Disputed kickback at centre of car owner's win over towie

Harbour City Tow & Salvage said a $250 fee per tow was a fair reflection of the business's costs. Photo / Thinkstock

A man whose car was towed says he was gobsmacked when the towie said in court that he paid KiwiRail a $120 commission per tow.

Harbour City Tow & Salvage was ordered to pay $160 back to the man, who asked not to be named, after a Disputes Tribunal referee ruled its charge of $250 was unreasonable.

The man's car was towed from the Railway Station in central Wellington at lunchtime after he parked there to play indoor sports nearby.

He accepted he had parked illegally but, on the advice of Consumer NZ, challenged Harbour City's fee of $250 as unreasonable.

According to the court documents, during the hearing the tow company said one reason for its $250 fee was "to pay KiwiRail $120 per vehicle towed".

"It was during the course of the hearing - I don't believe he blurted it out - but he said, 'We've got to cover our $120 that we pay KiwiRail'," the man said. "I was a little bit gobsmacked, actually. And I didn't say anything, because we weren't arguing over morals or anything, so I was trying to keep to the facts."

However, both the tow company and KiwiRail strenuously deny such an arrangement exists.

Harbour City owner Stephen Okeby said he was misquoted and he had lodged an application for a rehearing or have the document amended.

"What was actually said was that [KiwiRail] have buses down there, and it costs them $120 an hour.

"That's how much it costs [KiwiRail] an hour for the buses there, and they can't get the buses in and out [because of illegally parked cars]."

Mr Okeby said his company had never paid anybody at KiwiRail.

"Fraser from KiwiRail came down, because he thought somebody down [at the Railway Station] was getting $120. But that is definitely not the case."

He said a $250 fee per tow was a fair reflection of his business's costs.

"Insurance is about $60,000 a year. And then you've got to man it 24 hours a day. It's not actually the cost from going from A to B. And in the illegal parking side of things, you don't know whether you're going to do one today or 10. How it's worked out is an average of tows on the previous year."

KiwiRail spokeswoman Kimberly Brady said the company and its employees had never received money from Harbour City. "We are reviewing our arrangement with Harbour City Tow & Salvage. But the work will be re-tendered for in three months anyway."

Asked the reason for the review, Ms Brady said: "We'll just stick with 'We are currently reviewing the arrangement'."

Landowners have the right to remove illegally parked vehicles from their property. But Consumer Affairs spokesman Alastair Stewart has said it is illegal for them to profit from doing so. "If a commission was paid to the landowner, this could be deemed a profit and beyond the reasonable costs of rectifying a contractual breach or trespass."