Mechanic’s Lien in Australia: Legal Rights for Repairers Facing Non-Payment

Business Law: 20 May 2025

Author: Joel Parsons - Our People

You’re a mechanic. You’ve just completed works on a customer’s car and now they’re refusing to pay. What can you do?

If you have well drafted Terms and Conditions (T&Cs), it is likely that you will have prescribed protections for yourself in this type of situation. However, this is not always the case, with many businesses in the automotive industry having inadequate T&Cs or just haven’t got the customer’s agreement to be bound by them.

Still, there’s another way…

Mechanic’s lien –

The mechanic’s lien is a legal right allowing a mechanic to hold onto a vehicle until they have been fully paid for the mechanical work they have performed. As the lien is possessory, it only allows a mechanic to retain possession of the vehicle as security for payment and does not grant them a right to sell the vehicle to recover the debt, unless the customer provides written consent.

Based in common law, this lien arises automatically once certain conditions have been met. The VCAT ruling in Fitzgerald v Davis (Civil Claims) [2015] VCAT 295 outlines these limbs at [24]:

A mechanic’s lien arises under common law if:

• the goods were provided for the purpose of repair / improvement;
• the goods were provided by the owner or someone with authority;
• the goods were improved by the repair;
• The repairs were carried out by a skilled tradesman; and
• possession by the repairer has been continuous and never broken.

Consumer Affairs Victoria (CAV) affirms that the mechanic has the right to keep their vehicle until fully paid, unless a customer has come to a financial arrangement with the mechanic.

Although a mechanic’s lien does not give a repairer rights to charge for storage or maintenance of a vehicle, the Australian Automotive Aftermarket Association (AAAA) claims that storage fees could be recovered from a customer if the mechanic’s T&Cs allow for this. A properly drafted customer contract will always offer the mechanic more protection.  

Also, under section 8(1)(c) of the Personal Property Securities Act 2009 (Cth) (PPSA), a mechanic’s lien does not have to be registered as a security interest on the Personal Property Securities Register. In fact, a mechanic’s lien may have priority over interests registered on the PPSA, if any exist (s 73(1) of the PPSA).

Whether you’re a provider or a customer, if you have any questions surrounding your position in the automotive industry, please contact Aitken Partners’ experienced and friendly Commercial Law Team on (03) 8600 6000 to discuss your options.