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Pawned goods

Goods that have been left in exchange for money with money lenders.

What are pawned goods?

Pawned goods are items that have been left at a registered pawnbroking business. They do not include motor vehicles. The goods are left as security for a loan of money. Pawnbrokers and second-hand dealers must be registered to carry out their businesses. They have to record all of the transactions that they make.

A person who wants to pawn goods must provide proof of identification.

See ss. 5, 19, 19B, 23—Second-Hand Dealers and Pawnbrokers Act 1989 (Vic)(opens in a new window).

Pawned goods must be held for at least 7 days

A pawnbroker must retain the pawned goods in the condition they were in for at least 7 days. They may agree to keep the goods for longer than this. The pawnbroker must set out the period of the loan and the conditions and payments at the time the goods are pawned.

When a pawnbroker advances money to a person and keeps goods as security they must give the owner a ticket that includes the person's rights and obligations and the amount they will be charged to get the goods back.

See:

Owner may collect goods late

The owner of pawned goods may pay the outstanding money owed and get their goods back any time until the goods are sold. It does not matter that the period of the loan has expired.

See r.23—Second-hand dealers and Pawnbrokers (General Exemption and Record-keeping) Regulations 2018 (Vic)(opens in a new window).

Quick sale of goods not collected

If the loan period expires and is not extended, the goods that were pawned as security for the loan must be offered for sale as soon as possible to get the best possible price for the goods.

See r. 24—Second-hand dealers and Pawnbrokers (General Exemption and Record-keeping) Regulations 2018 (Vic)(opens in a new window).

Money left over after sale of goods

If the goods are not collected, the pawnbroker may sell the goods, but the person who pawned the goods is entitled to the money left over after the sale for up to 12 months.

If the goods are worth more than $10 the pawnbroker must send a notice to the person who left he goods there, telling them that the goods have been sold and that they are entitled to claim the balance for the next 12 months. The pawnbroker must pay on demand.

Penalty

The business can be fined up to 20 penalty units if they fail to send this notice.

See s. 23A—Second-Hand Dealers and Pawnbrokers Act 1989 (Vic)(opens in a new window).

If there is a dispute about who owns the goods

If a person believes that they are entitled to goods that are now in the possession of a second-hand dealer or pawnbroker, they may apply to the Magistrates’ Court for an order for delivery of the goods.

The pawnbroker must display a sign that explains that any person who believes that goods have been stolen does not have to pay for the goods but may ask the police to serve a notice prohibiting the disposal of the goods. The person may then ask for an order from the magistrate for the goods to be returned.

See Schedule—Second-Hand Dealers and Pawnbrokers Act 1989 (Vic)(opens in a new window).

How to apply to court

The applicant has to go into court to apply. They must have been into the shop and sighted the goods themselves. They will also need to be able to prove that the items belong to them such as a receipt. They will need to be able to describe the goods in detail. An application must be supported by evidence on oath or by affidavit. No other party has to be served with this application. The court will type up the application form while they are there.

If the court registrar believes that the affidavit and application has enough evidence to support the claim, they may make both of the following orders:

  • order that directs the second-hand dealer or pawnbroker to deliver the goods to the applicant (effective 21 days after service)
  • order directing the second-hand dealer or pawnbroker to refrain from disposing of the goods or changing them in any way until they are delivered to the applicant.

This order expires within 6 months after the day it was made unless another order is made by the court.

See s. 24(3)—Second-Hand Dealers and Pawnbrokers Act 1989 (Vic)(opens in a new window).

Disputing a court registrar’s order

A second-hand dealer or pawnbroker may lodge an objection with the court within 21 days of being served with the order.
In such a case, the order will no longer have any effect. A magistrate of the court must then decide who is entitled to possession of the goods.

The court may do any of the following:

  • make an order directing the second-hand dealer or pawnbroker to deliver the goods to the applicant
  • make an order directing the second-hand dealer or pawnbroker to pay the applicant the value of the goods as assessed by the Court
  • may dismiss the matter and rescind the earlier order made by the Registrar.

More information

Legislation

Second-Hand Dealers and Pawnbrokers Act 1989 (Vic)

  • s. 3—defines a pawnbroker, registered second-hand dealer, second-hand goods and second-hand dealer
  • s. 5—second hand dealer and pawnbrokers to be registered
  • s. 20—recording transactions
  • s. 21—goods must be kept for at least 7 days before disposing of the goods
  • s. 22—co-operation with police, the dealer must check goods they receive against any notice that is served on them by the police and if they suspect the goods are stolen, they must contact police immediately
  • s. 23A—return of any extra money made from the sale of the goods
  • s. 24—Magistrates’ Court to determine disputes
  • Schedule—warning notice that people who believe goods have been stolen are not obliged to buy them

See Second-Hand Dealers and Pawnbrokers Act 1989 (Vic)(opens in a new window).

Second-hand dealers and Pawnbrokers (General Exemption and Record-keeping) Regulations 2018 (Vic)

  • r. 12—sets out the documents that must be used to prove the identity of the person who is pawning or selling the goods
  • rr. 14, 16—records that must be kept of transactions by a pawnbroker and second-hand dealer
  • r. 20—details that must be included in the pawn ticket (see also schedules)
  • r. 22—period of the loan
  • r. 23—a person may get their goods back by paying the money owed any time before the goods are sold, even if the loan period has ended.
  • r. 24—goods not collected after the period of the loan they must be sold as quickly as possible for the best possible price
  • Schedule 2—pawn ticket
  • Schedule 3—document that sets out the rights of the person pawning their goods
  • Schedule 4—notice of sale of pawned goods

See Second-hand dealers and Pawnbrokers (General Exemption and Record-keeping) Regulations 2018 (Vic)(opens in a new window).

Magistrates' Court

See:

Fines—Value of penalty and fee units.

Reference

Acknowledgement

Information about the application procedure where there is a dispute about the ownership of the goods is from discussion with the staff at Melbourne Magistrates' Court. September 2012.

Updated