JURISDICTION: Civil
PARTIES: Plaintiff: Tang, Defendant: Driden
FILE NUMBER: 353 of 2010
PLACE OF HEARING: Downing Centre Local Court
DATE OF DECISION: 15/06/2010
MAGISTRATE: Assessor Olischlager
CATCHWORDS: Motor vehicle damages, general damages, loss of use of motor vehicle
CASES CITED: Anthanasopoulos v Moseley [2001] NSWCCA 266, Chong v Berry [2007] NSWLR 33, Clark v Tull (t/a Ardington Electrical Services) [2002] EWCA Civ 510, Daniels v Anderson (1995) 37 NSWLR 438, Dimond v Lovell [200] 2 WLR 1121; [2000] 2 All ER 897, Patterson v Middle Harbour Yacht Club & Anor (1996) 64 FCR 405, Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463
REPRESENTATION: Mr Tam for the Plaintiff, Mr Board for the Defendant
ORDERS: Verdict and Judgment for the Plaintiff in the sum of $5,966.74 together with court costs of $114 and profession costs of $1,285.68 giving a total judgment of $7,366.42. Judgment set off against amount due of $504.86 under earlier costs order.

This is a claim for general damages arising from a motor vehicle collision that occurred on 23 April 2009. The only issue in dispute between the parties is the assessment of damages and in particular, the claim for general damages being the cost of a replacement vehicle hired while the plaintiff’s vehicle was being repaired.

The plaintiff is the owner of a BMW 120i sedan. It sustained damages in a collision on 23 April 2009 as a result of the negligence of the defendant. The plaintiff’s vehicle suffered substantial rear end damage and was not in a driveable condition. The plaintiff contacted his insurer, NRMA, to inform the insurer of his intention to deliver the vehicle to ESR Prestige Smash Repairs, a repairer who specialises in BMW repairs. This was done the following day, on 24 April 2009. The plaintiff spoke to an employee of ESR Prestige who indicated that it would contact NRMA for an assessment of damage to be carried out.

The plaintiff made inquiries with an employee of ESR Prestige as to the possibility of arranging a replacement vehicle while the plaintiff’s vehicle was being repaired. The employee suggested that it could arrange for the plaintiff to hire a BMW from City Car Rentals.

The plaintiff elected to hire a BMW from City Car Rental for the period of 24 April 2009 until the plaintiff’s vehicle was available for collection on 28 May 2009. The cost of the hire for 35 days was a daily rate of $175.00 together with insurance protection waiver of $612.00 and a recovery fee of $163.20. In total the hire costs amount to $7,397.75.

The defendant disputes the quantum of the claim on the basis that the hire rate is excessive and that the duration of the hire period was excessive. Furthermore the defendant submits that the plaintiff’s vehicle was registered for business use and the plaintiff is entitled to claim an input tax credit in respect of the hire of a replacement vehicle.

It is clear that a plaintiff is entitled to recover damages for the loss of a non income producing chattel. In Anthanasopoulos v Moseley [2001] NSWCCA 266 the Court of Appeal applied the “Greta Holme” case line of authority and held that injury to property that deprives its owner of its use is compensable.

In New South Wales, loss of use is compensable as general damages without requiring a plaintiff to establish a need for the replacement vehicle or demonstrating an actual financial loss. In Anthanasopoulos v Moseley loss of use of a vehicle was compensable even though a replacement was available through a courtesy car program. In Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 Palmer J allowed compensation for the loss of use of a pleasure craft even though the plaintiff sustained no actual loss for the hire of a replacement.

The position in New South Wales is in contrast to the position in the United Kingdom where the cost of hiring a replacement is recoverable as special damages where there is an established need for a replacement and costs are incurred for obtaining a replacement; Dimond v Lovell [200] 2 WLR 1121; [2000] 2 All ER 897.

The distinction between the United Kingdom position and the New South Wales position is important to bear in mind when assessing a claim for loss of use. As a claim for loss of use is a claim for general damages the Court has a wider discretion to award compensation on what it considers to be a reasonable basis rather than being confined to assessing the actual pecuniary loss suffered by a plaintiff.

The assessment of damages for loss of use of property will normally be determined having regard to the reasonable cost of the replacement of that property. In Anthanasopoulos v Moseley Beazley JA said at 83:

“Whatever the nomenclature to be attributed to the nature of damages represented by a plaintiff’s need for serves, the damages in question are not to be determined by reference to the actual cost to the plaintiff of having the care or the services provided, or by reference to the income foregone by the provider of the services, but generally, by reference to the market cost of providing them: Gincelis v House [2000] HCA 42; (2001) 201 CLR 321 at 327 per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; Van Gervan v Fenton [1992]HCA 54; (1992) 175 CLR 327.”

In this case, the defendant submits that the rate is excessive in that it exceeds the market cost of providing a replacement vehicle. The plaintiff hired a BMW that was a similar model to the vehicle that was being repaired. Whether the rate claimed is excessive is to be considered by reference to the market cost of the hire of a vehicle similar to the BMW being replaced.

The Court accepts that the market cost for the hire of motor vehicles will vary considerably between car hire companies and also fluctuate over time. The affidavit of Angela Shaw quotes the Thrifty website which states “Vehicle rental pricing, is just like airline pricing. If you purchase in peak periods, you’ll pay higher prices. Pricing can also vary from location to location, as it may vary depending on where and what you want to rent. If you’re thinking Thrify, it’s best to book in advance. That way you will get the cheapest rate possible for your rental…”

The hire of a motor vehicle will vary according to a number of other factors. Rates will differ based on whether bookings are made over the internet or based on a walk in rate. Rates will vary depending upon whether a person hires a vehicle for a fixed period or on a continuing daily rate.

The circumstances of the plaintiff who has been deprived of his vehicle as a result of a collision are such that he is unlikely to be in a position to obtain a replacement vehicle at the cheapest rate possible. The need to hire the vehicle is unforeseen so he is unable to book in advance. He is unable to be certain as to the period that his vehicle will require repairs and so he is more likely to need to hire a vehicle on a continuing daily rate. The Court would consider this to be the case even in circumstances where the smash repairer provides an estimate on the time for repairs. In addition, the deprivation of his vehicle may make it difficult for the plaintiff to travel to car hire companies that are less conveniently located from home. These factors combine so that it is likely that the hire rate obtained by a plaintiff will be towards the high end of the range of market rates available.

Provided that the plaintiff obtained a hire vehicle at a rate that is within the range of comparative rates available at that time it will be a market rate.

In Chong v Berry [2007] NSWLR 33 Magistrate Dillon was required to consider a similar question as to whether the hire rate for a replacement vehicle was excessive. In that case Magistrate Dillon noted [at 55] that the defendant admitted that, once a plaintiff produces an invoice, it will ordinarily be presumed that the price or rate evidenced by the invoice was determined by law of demand and supply, throwing an evidentiary onus upon the defendant. In the case before this Court the plaintiff has produced a copy of the tax invoice rendered by City Car Rentals. In all respects it appears to have been an arm’s length commercial transaction and accordingly, the Court is of the view that the invoice is evidence that gives rise to a rebuttable presumption of being a market rate at the relevant time.

The parties have provided some evidence of comparative rates offered by other car hire companies. Ms Angela Shaw has provided quotes obtained from the internet for luxury vehicles that range from $102.70 per day as at 2 July 2009 to $300 per day (Friday to Monday) from Luxury Car hire as at 19 May 2010. Mr Arlo Roche, a claims officer with AAMI, has provided a copy of a Europecar quotation of $112.49 per day for an Audi A4.

In assessing comparative market rates at the relevant time the Court does have greater regard to rates more contemporaneous with the hire period and also to the rates that relate to a similar model vehicle as the plaintiff’s. The Court does place weight on evidence on behalf of the plaintiff that the hire of a BMW 318i offered by Luxury Car Hire at a cost of $100 (midweek) and $300 (Friday to Monday). That represents a daily average rate of $214.00. This rate is higher than the rate of $175 per day obtained by the plaintiff. While this rate was obtained on 19 May 2010, being a year after the relevant hire period, there is no evidence to suggest that market hire rates would have increased by more than 22% over the past twelve months to suggest that the rate offered by City Car Rental was out of step with its competitors.

The rate obtained by Mr Roche on behalf of the defendant is based on a discounted web rate and a fixed hire period of 14 days. It applies in respect to an Audi A4 rather than a BMW. The rate does not relate to the same model vehicle being replaced by the plaintiff. The rate is not based on a daily rate that was obtained by the plaintiff. While the Court accepts that this is a market rate, it is nothing more than one rate within the range of market rates available at the time. It does not suggest that the rate obtained by the plaintiff was outside the range of market rates available at the time.

Given that the invoice rendered by City Car Rentals should be presumed to be a genuine market rate the Court is of the view that the defendant has failed to produce evidence rebutting that presumption.

The Court is satisfied that the rate of $175 per day was within the range of comparative rates of hire for a similar vehicle available in April 2009.

The defendant submitted that the plaintiff was informed that repairs should take approximately three week and should therefore have hired a vehicle on the basis of rate applying for 14 days rather than a daily rate. The Court rejects the suggestion that the plaintiff acted unreasonably accepting a daily rate. When a vehicle is hired for a 14 day period there is no guarantee that the hire period can be extended. Furthermore the advice provided by the repairer was no more than an estimate of length of time for repairs to be effected. It could not be relied upon as a certain time frame.

The second issue raised by the defendant is that the defendant should not be liable for the cost of hire of a replacement vehicle for the entire period of 35 days. The defendant’s loss assessor, Mr Abdishou, reviewed the proof of loss documents of the plaintiff and expresses the opinion that the repairs should have been effected within a period of 14 days. The assessor for NRMA allowed 56.4 hours for repairs which is the equivalent of eight working days.

There were clearly delays in effecting the repairs to the plaintiff’s vehicle. Although the vehicle was with ESR Prestige smash repairers on 24 April 2009 the vehicle was not assessed by the NRMA loss assessor until 3 weeks later on 14 May 2009. Mr Derek Bell, the director of ESR Prestige has stated that delays occurred in respect to carrying out repairs due to heavy workload that did not allow ESR Prestige to engage an assessor until 14 May 2009 and further a rear muffler that was ordered from Canterbury BMW on 28 April 2009 did not become available until 18 May 2009.

A plaintiff is under a duty to take reasonable steps to mitigate his or her loss. What is reasonable will depend upon the circumstances. In this instance, the plaintiff has given evidence to the effect that she questioned how long it would take to repair the vehicle. At paragraph 17 of her statement she states that she contacted ESR Prestige on two or three occasions regarding the status of repairs and on each occasion an employee of ESR informed her that she would be contacted when the car was ready.

It is difficult to conceive what more a plaintiff could be reasonably expected to do in the circumstances to hasten the repairs to mitigate damages. She had delivered her vehicle to a qualified mechanic and made several inquiries as to the progress of repairs. The plaintiff relied on the mechanic to act with reasonable promptness in effecting repairs. The plaintiff had no knowledge as to what the reasonable time frame should be for carrying out insurance loss assessments or repair times. Even if she did, it is difficult to conceive what influence she could have had over the outcome.

The defendant has submitted that the plaintiff should be held responsible for the delay caused by the mechanic and her insurer. The Court rejects this submission on the basis that the plaintiff was not responsible for the actions of either the repairer or her insurer nor could she assert control over their conduct.

The issue of whether a claimant or the tortfeasor should bear the burden of any delays in the carrying out of repairs was considered in the United Kingdom in Clark v Tull (t/a Ardington Electrical Services) [2002] EWCA Civ 510. In that case delays in repairs occurred as a result of the workloads of the smash repairer. Lord Justice Aldous referred to the conduct of the plaintiffs claiming loss of use and stated at paragraph 12:
“They both appear to have acted reasonably in placing the cars in the hands of respectable repairers and there were no supervening events. Further delays of that order were foreseeable. The extra loss caused by the delay in the repair must fall on the tortfeasor as there was no failure to mitigate.”
The decision in Clark followed an earlier United Kingdom decision of Mattocks v Mann [1973] RTR 13. In that case Ms Mattocks took her vehicle to a reputable repairer. It was estimated that it would take 6 weeks to repair, but it took 12 weeks to complete. The vehicle was held pending payment for nearly 7 months after the repairs had been started. The Court of Appeal held that Mrs Mattocks was entitled to recover the cost of hiring the replacement vehicle for the entire period. Beldam LJ said at page 18:
“For a supervening cause or a failure to mitigate to relieve a defendant of a period of hire there must, in my judgment, be a finding of some conduct on her part or on the part of someone for whom she is in law responsible, or indeed or a third party, which can truly be said to be an independent cause of loss of her car for that period”.
The Court agrees with the views expressed in these decisions that it should be the tortfeasor that bears the cost associated with delays caused in these circumstances. It is foreseeable that there may be delays when vehicles are given to a repairer due to either the need to obtain parts, or due to heavy workloads for repairers or insurance assessors having competing priorities. These delays, while caused by third persons, are inexorably linked to the original damage caused by the tortfeasor and cannot be considered to be a supervening or independent cause of the damage. The plaintiff is not, at law, responsible for the conduct of her insurer or the repairer.

The Court is satisfied that the plaintiff is entitled to recover from the defendant the hire charges for the entire period of 35 days.

There is a final issue that was raised by the defendant in submissions. The defendant states that the plaintiff’s vehicle was registered for business purposes and the plaintiff was entitled to claim a GST credit on the hire of the motor vehicle. The defendant states unless the Court has regard to this credit the plaintiff will receive a windfall.

The Court is of the view that it should not have regard to the tax implications of an award in favour of the plaintiff. This is consistent with the approach of Australian Courts. In the New South Wales Court of Appeal decision in Daniels v Anderson (1995) 37 NSWLR 438 Clarke and Sheller JJA at 586 held as follows:
“In most cases if damages to be awarded to a plaintiff are taxable, taxation should not be taken into account in their assessment.”
The above statement was cited by Whitlam J in Patterson v Middle Harbour Yacht Club & Anor (1996) 64 FCR 405 at 408.

In any event the Court is dealing with a claim for general damages and damages are not limited to the actual financial loss suffered by plaintiffs. The Court is of the view that it should not have regard to any taxation implications when assessing general damages.

Accordingly, the Court will enter a verdict and judgment for the plaintiff for the cost of a replacement vehicle for the period of 35 days during which he was deprived of his vehicle. Allowing for the part payment made by the defendant the Court will enter judgment in the sum of $5,966.74 together with court costs of $114. This is a claim for unliquidated general damages and the court will allow professional costs at the rate applicable for default judgment on an unliquidated claim being $1,285.68. The plaintiff’s claim for pre-judgment interest was not pressed. The judgment will be set off under section 96 of the Civil Procedure Act 2005 against an earlier costs order in favour of the defendant upon which a writ for levy against property issued and the amount due under that order including enforcement costs is $504.86.

Stephen Olischlager
Local Court Assessor