Appellant v Respondent

1 On 8 September 2019, a collision occurred between a Mercedes Benz GL320 (the Mercedes) driven by Mr Taleb and a vehicle driven by Mr Rijal (the collision). The damage caused to the Mercedes was such that it could not be driven after the collision. As a consequence, Mr Taleb claimed that he hired a Jeep SRT for a period of 43 days, for $150 per day, from a car rental business that he owned. Mr Taleb sought to recover these costs as part of Magistrates' Court proceedings he issued against Mr Rijal. However, that claim for car hire costs was rejected by the Magistrate. Mr Taleb appeals that decision on the basis that the Magistrate erred in finding that Mr Taleb was required to, and failed to establish, a daily car hire rate.

2 Mr Rijal submitted that there was no error of law in the Magistrate's judgment, but contended that even if there was, Mr Taleb should not be awarded damages for a replacement vehicle. In making that assertion, Mr Rijal relied on several grounds including that Mr Taleb did not have a Victorian driver's licence during the relevant period of hire such that it was illegal for him to drive any replacement car.

3 For the following reasons, I am not satisfied that the Magistrate erred in law in deciding not to award Mr Taleb his claimed car hire costs. Even if there was an error in respect of that decision, I am satisfied that as Mr Taleb did not have a licence at the time, he would not have otherwise been entitled to hire a replacement car.

4 Mr Taleb commenced Magistrates' Court proceedings on 4 November 2019. In his defence dated 18 November 2019, Mr Rijal admitted fault for the collision but disputed the damages claimed by Mr Taleb. It was specifically alleged that Mr Taleb failed to mitigate his loss, and that the sums claimed were excessive and unreasonable.

5 On 22 November 2019, Mr Rijal served an offer of compromise on Mr Taleb pursuant to Order 26 of the Magistrates' Court Civil Procedure Rules 2020. The offer was for a sum of $18,000, plus costs. This offer was not accepted.

6 The Magistrates' Court hearing proceeded over three days via Webex on 2, 3, and 4 December 2020. The Magistrate heard evidence from two experts in respect of the pre-collision value of the vehicle and by oral judgment delivered on 4 December 2020, awarded damages of $13,634.90 for Mr Taleb's vehicle and assessing fee. That aspect of the judgment is not challenged in this appeal.

7 In respect of Mr Taleb's claim for car hire costs, the evidence was as follows:

8 Mr Taleb was the owner of City Wide Rentals, a business that operated with an Australian Business Number and leased out hire cars.

9 There was evidence before the Magistrate that Mr Taleb owned several companies, each of which owned a small number of vehicles available to rent from City Wide Rentals. One such company was Safety Beach Ragamuffin Pty Ltd, the registered owner of the Mercedes. Mr Taleb admitted that all the cars owned by the various companies were hire cars but that the Mercedes was 'more of a personal car' for his day to day use.

10 As a consequence of damage to the Mercedes caused by the collision, Mr Taleb claimed that on 9 September 2019, he rented a Jeep SRT (the rental car) from City Wide Rentals.

11 Mr Taleb said that the rental car was the only car available, stating that 'it was just laying around'.

12 Mr Taleb said that the daily hire cost was $150 per day. In support of his claim, Mr Taleb tendered two documents relevant to the rental car (the car hire documents). The first was a rental agreement between City Wide Rentals and Mr Taleb, which was signed by him and which he said he filled out himself. This document did not specify the rate of daily rental, but did refer to the excess reduction being $35 per day. This document stated the car hire period was from 9 September 2019 until 21 October 2019.

13 The second document was an undated car hire invoice, which stated that the rental charges were as follows:

14 Mr Taleb said that he needed a car on a daily basis 'for work, kids, sports ... friends ... just day-to-day'. He said that he needed a 'big car' so that he could drive his five children to swimming lessons and soccer.

15 Mr Taleb said that he rented four-wheel-drive cars at a rate of $150 per day. In cross-examination, it was put to Mr Taleb that in a previous Magistrates' Court case,[1] there had been evidence that City Wide Rentals had rented out a Jeep for $120 per day. Mr Taleb responded that he would need to 'get the paperwork' to confirm the amount charged. In re-examination, Mr Taleb produced the relevant car hire agreement and noted that it was a different type of Jeep that had been rented for $120 per day.

16 Mr Taleb was also cross-examined in relation to the period of car hire. He said that after 43 days, he ended the rental as another Jeep became available. He considered that he was 'being generous' for not claiming further car hire beyond the 43 days.

17 Mr Taleb was cross-examined in relation to the numerous vehicles rented out through City Wide Rentals. He denied that he treated the vehicles as his own. Further, Mr Taleb gave evidence that a Porsche which had his personalised number plates on it was rented out as a 'classic car'. During cross-examination, Mr Taleb was asked if he could produce documents that evinced the details of the rental cars including the dates, charges, and amounts received. His evidence was that he would 'need to get the bookkeeper' to assist him with his business records and that he would 'do [his] best' to 'work it out after lunch.' Save for the record regarding the car hire of the different type of Jeep at a rate of $120 per day, no such documents were subsequently tendered.

18 During closing submissions, the Magistrate asked Mr Taleb's counsel for assistance in relation to the evidence of car hire rate. The following extract demonstrates the Magistrate's concerns regarding the legitimacy of the car hire arrangement:

What's the evidence of rate, other than Mr Taleb saying that he rendered it to himself, that is, provided by one of his companies to his hire company to himself for a base rate of $150 a day, plus the extras which are shown upon the document, though there hasn't been any evidence about that, but he hires it to himself for $150...

19 The Magistrate noted that Mr Taleb's evidence was that he needed his bookkeeper to produce documentation as to other car hire rates at City Wide Rentals, but that at 'no time during the proceeding [was] any material provided to support a contention that that's what he hires it out at'.

The only material I've got is that by dint of his various hats he rented to himself a vehicle, [for] $150 a day, and that he has rented out a vehicle of a slightly different nature on another occasion for $120 a day. How does that fix a market rate?

21 Mr Taleb's counsel then made the following concession:

If it reaches the height of Your Honour not being satisfied with any of Mr Taleb's evidence, much of which was actually not challenged, then I would have to concede that I'd probably be in a hopeless case not to be able to get across my burdens before even looking to some of the authority. I accept that as I accept that in every case in which there has been insufficient evidence.

22 In his judgment, the Magistrate considered Mr Taleb to be:

an unimpressive witness. He wrote) (sic) documents for an unrelated entity for which he has an unknown relationship and he relies upon those assertions to base his claim. He contradicts his own assertions, he pretends not to understand the corporate and financial arrangements.

23 Having accepted that Mr Taleb drove his five children to soccer and swimming and noting that he used the Mercedes for 'personal and business work,' the Magistrate considered that Mr Taleb had established a need for a replacement car.

24 However, the Magistrate refused Mr Taleb's claim for 43 days of car hire at $150 a day. His reasons for this were as follows:

There is no evidence of rate. The evidence of Mr Taleb in relation to his charge to himself or others falls in the same category as the rest of his evidence, that is, it is unreliable, it is not supported, circumstances where I cannot be satisfied on his oath to the requisite level on the balance of probability. There needs to be other material which supports his contention. There is none, none whatsoever. That does not mean that he is not entitled to damages. Damages, of course, flow to put him into the appropriate position. There is a level of damage which is ordinarily measured by the rate of hire but, as I say, there is no evidence of rate of hire. That does not mean that he is not entitled to sue damages, it just means that there is a dearth of evidence in relation to damages. If there was some reliable evidence before this court I would have to use that to fix the level of damage, but there is none. Still he is entitled to damages, but the best that can be said is he would be entitled to nominal damages, that is, a recognition of the fact of a loss, but unable to be fixed upon a consideration of rate, and so I fix the sum of $1000 as nominal damages. I accept that the car was off the road for 42 or 43 days and I fix $1000 as the nominal damages.[2]

25 Also relevant to this appeal is the evidence that was before the Magistrate in respect of Mr Taleb's Victorian driver's licence. Mr Taleb stated that he surrendered his licence on 22 August 2011. He lodged an appeal against this disqualification, but on 29 June 2012, the County Court dismissed the appeal and ordered that Mr Taleb was not to be re-licenced except by order of a Magistrate.

26 Mr Taleb moved to South Australia and thereafter obtained a South Australian driver's licence. In approximately 2014 or 2015, he relocated back to Victoria but did not obtain a Victorian licence. Mr Taleb drove with a South Australian licence until, after discussions with police, he ceased doing so. He had not been re-licenced in Victoria at the time of the Magistrates' Court proceeding.

27 The Magistrate found Mr Taleb's evidence in respect of his licence to be unsatisfactory:

His evidence moved from knowing he was disqualified, not knowing he was disqualified, a belief in his licence status, a lack of some particular belief in his licence status, a lack of knowledge in the appeal result [and], an abandonment of his Victorian licence. His evidence was unsatisfactory.

28 Notwithstanding the above, the Magistrate noted that in driving unlawfully, Mr Taleb took a risk and stated that 'there is not such a close relationship between the damage done that has occurred to him and the fact that he did not have a licence that persuades me in all the circumstances his right to damages is excluded'.

General principles relevant to a section 109 appeal

29 Pursuant to s 109 of the Magistrates' Court Act 1991, an appeal against a Magistrate's final order can only be made in respect of a question of law.

30 To succeed in his appeal, Mr Taleb must establish that the Magistrate acted 'on a wrong principle of law, misapprehended the facts or made a wholly erroneous assessment of the relevant issues'.[3]

31 As was recently stated by Keogh J in Elvin v Davey,[4] errors of law in s 109 appeals may include:

(a) whether the Magistrate has identified the correct legal test;

(b) whether the Magistrate applied the correct legal test;

(c) whether there is any evidence to support a finding by the Magistrate of a particular fact; and

(d) whether the facts found fall within a statute properly construed.[5]

32 In respect of an error of law regarding a finding of fact, Batt J in Roads Corporation v Dacakis[6] explained:

... a finding of fact is only open to challenge as an error of law if there is no probative evidence to support it (and not also if it is not reasonably open on the evidence), whilst an inference will be open to challenge as being erroneous in law if was not reasonably open on the facts... there is virtually no difference between the tests.[7]

33 In his judgment, Batt J repeated with approval what Mason CJ had said in Australian Broadcasting Tribunal v Bond:[8]

But it is said that "[t]here is no error of law simply in making a wrong finding of fact": Waterford v The Commonwealth [1987] HCA 25; (1987) 163 C.L.R 54, at 77, per Brennon J. Similarly, Menzies J. observed in Reg v District Court; Ex Parte White [1966] HCA 69; (1966) 116 C.L.R. 644, at 654:

"Even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound, this would not amount to an error of law on the fact of the record. To establish some faulty (e.g. illogical) inference of fact would not disclose an error of law."

Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for a judicial review because no error of law has taken place.[9]

34 In relation to the Magistrate's rejection of the claim for car hire costs, Mr Taleb contends the following errors:

Ground 1 - The Magistrate erred in law by finding that Mr Taleb failed to establish the daily hire rate to sustain his claim on the basis it was not open on the evidence;

Ground 2 - The Magistrate erred in law by finding that there was no evidence as to the rate of daily hire when there was such evidence before the court;

(a) the Magistrate accepted that Mr Taleb had a reasonable need for, and hired, a replacement vehicle for a period of 43 days;

(b) had before him the car hire documents indicating that the hire car was rented for 43 days at a daily rate of $150; and

(c) the only challenge to Mr Taleb in cross-examination as to the daily car hire rate was that in Yehia[10] - a Jeep was leased for $120 per day rather than $150 per day,

the Magistrate erred in law by failing to apply the correct legal test in determining the measure of damages for the loss of use of Mr Taleb's vehicle.

Ground 4 - The Magistrate erred in law by applying an erroneous, unfair, or unwarranted standard of proof of the daily rate of the replacement vehicle.

35 In support of these grounds of appeal, Mr Taleb referred me to numerous authorities relevant to the assessment of damages of a chattel.

36 In Talacko v Talacko,[11] the High Court stated that:

Where a defendant's tort impairs the value of a plaintiff's rights to tangible property, this will constitute loss or damage. The normal measure of damages in such cases is the diminution in the value to the plaintiff of their rights to tangible property, usually measured by the cost of repair, where it is reasonable to repair, or the cost of replacement. As the Supreme Court of the United Kingdom recently said:

If a claimant suffers damage to property, such as a vehicle or a ship, as a result of the tortious actions of a defendant, it can claim as damages the diminution in value of the damaged property, usually measured by the cost of repairing the property, and consequential loss.[12]

37 Further, in Arsalan v Rixon,[13] in a unanimous judgment, the High Court said '[w]here a plaintiff's chattel is damaged as a result of the negligence of a defendant, the plaintiff will generally be entitled to damages for the costs of repair and for consequential loss.'[14]

38 In relation to the burden of proof in respect of such consequential loss, it was stated that '[o]nce the plaintiff acts to mitigate that loss by hiring a substitute vehicle, the onus of proof will lie upon the defendant to show that the costs incurred in mitigation were unreasonable'.[15]

Where a plaintiff acts in an attempt to reduce a loss, the onus shifts to the defendant to show that the acts actually taken by the plaintiff were unreasonable acts of mitigation. Unless the plaintiff's actions are shown to be unreasonable, costs that are incurred in an attempt to mitigate loss caused by wrongdoing become, themselves, a head of damage that can be recovered. Even if the costs incurred by the plaintiff are greater than the loss that was attempted to be mitigated, those costs will be recoverable other than to the extent that they are shown to be unreasonable.[16]

40 In relation to whether a plaintiff acted reasonably in the mitigation of damages, I was taken to a decision of Garde J in Portbury Development Co Pty Ltd v Ottedin Investments Pty Ltd & Ors,[17] where the law relating to mitigation was summarised:

This statement of the law highlights a number of important principles that guide the assessment of loss in cases where mitigation is in issue:

(a) There is in fact no duty to mitigate loss - rather, damages are reduced to the extent that the plaintiff has not acted reasonably;

(b) the onus of proof is on the defendant to show that the plaintiff has not acted reasonably in minimising loss arising from the defendant's breach of contract;

(c) the defendant must prove the extent of the plaintiff's failure to minimise loss, i.e. the amount of the plaintiff's loss that was occasioned by the plaintiff's failure to act reasonably;

(d) a high standard of conduct is not required of the plaintiff, because the defendant is a wrongdoer; and

(e) a plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct, so long as it was reasonable for the plaintiff to act in the way that he did. [18]

41 Mr Taleb contended that the Magistrate erred in not applying such principles to his claim for car hire costs. This error was said to be evident from the Magistrate's reference to Mr Taleb needing, but failing to establish, the daily rate and his adverse finding in respect of that failure. Mr Taleb suggested that the Magistrate used the expression 'market rate' interchangeably with the term 'rate', demonstrating confusion as to what Mr Taleb and Mr Rijal had to respectively prove.

42 It was submitted by Mr Taleb that there was uncontradicted evidence of the rate of hire, being both in Mr Taleb's oral evidence and the car hire documents. Therefore, having established the consequential loss in the form of car hire at a rate of $150 per day for a 43-day period, in accordance with the principles referred to above at paragraph [40], Mr Taleb was entitled to such an amount unless Mr Rijal was able to satisfy the Court that the amount claimed was unreasonable. Mr Taleb contended that it was for Mr Rijal to produce evidence as to the market rate and establish the unreasonableness of Mr Taleb's claim. As Mr Rijal did not discharge this burden, it was argued that there should be no reduction in the car hire costs claimed by Mr Taleb.

43 In response, Mr Rijal submitted that there was no error by the Magistrate as he was not satisfied that Mr Taleb had incurred the claimed car hire costs and this was reflected in the judgment. Mr Rijal stated that it was open for the Magistrate to find that there was no evidence of such a rate, even if the evidence was uncontradicted and or unchallenged at trial.

44 Mr Rijal submitted that the grounds of appeal in respect of the evidentiary burden to establish rate were predicated on an erroneous assumption that the claim for car hire damages was established in the first place.

45 Mr Rijal accepted that a plaintiff will ordinarily establish a prima facie claim for damages by the tender of a rental agreement and invoice establishing hire charges incurred pursuant to an arm's length transaction with a rental company in the market. It was also accepted that once that evidence is tendered, the onus shifts to the defendant to argue that the charges were unreasonable. However, Mr Rijal said that the present circumstances did not give rise to such a claim as Mr Taleb claimed he hired a car from his own business.

46 In considering this appeal, I am mindful that the Magistrate delivered his judgment orally, shortly after the conclusion of closing submissions.

47 An unsuccessful party to litigation is entitled to understand why their claim failed. To enable this, the judicial officer must provide a clear path of reasoning by addressing the key points of contention in the case, explaining what was accepted, what was rejected, and why.[19]

48 Ex tempore, otherwise known as oral judgments, are often brief and the reasons contained in such judgments are generally not as fulsomely developed as might occur if a written judgment is delivered. Whilst this does not excuse a judgment that contains an error of law, an oral judgment must be reviewed in the context and circumstances in which it was delivered. In consideration of this appeal, it is appropriate to acknowledge the large case load and limited resources of Magistrates. Further, the prompt and timely delivery of judgments in less complex cases is to be encouraged and should not be scrutinized with overzealous eyes.

49 Having so acknowledged those matters, I consider the Magistrate made it clear that he did not accept Mr Taleb's evidence in respect of the car hire. The Magistrate's reasons could have been more fulsome, and no doubt would have been had he published a written judgment. However, this does not constitute an error of law.

50 In his judgment, the Magistrate stated that he considered Mr Taleb's evidence was unreliable and was not supported, such that that there was no evidence of rate. This was a finding of fact open to the Magistrate.

51 It was clear from the Magistrate's exchange with counsel during closing submissions that he had serious reservations as to the evidence surrounding Mr Taleb's claim for car hire, including raising concern that the car hire documents were created by Mr Taleb himself. Further, the Magistrate expressly commented during closing submissions that Mr Taleb had failed to produce any business records to demonstrate how City Wide Rentals managed its fleet of vehicles, including dates and rates of hire. In circumstances where this exchange between the Magistrate and Mr Taleb's counsel occurred on the same day he delivered his oral judgment,[20] it is reasonable to infer from the comments and reservations expressed by the Magistrate during closing submissions, that he rejected Mr Taleb's evidence on this, including in relation to the car hire documents. I am therefore satisfied the Magistrate's path of reasoning is sufficiently clear.

52 Mr Taleb contended that the Magistrate accepted that he hired a vehicle for 43 days, that he had a need for that vehicle for the 43 day period, and that the duration of the hire was therefore reasonable. Save for the Magistrate accepting that Mr Taleb established a need for a vehicle, and that the Mercedes was off the road for around 42-43 days, I do not accept the Magistrate made either of the other findings. To the contrary, the Magistrate stated there was no evidence of hire.

53 Although the Magistrate accepted Mr Taleb's evidence in respect of his need for the car, he was entitled to reject other aspects of Mr Taleb's evidence, including the documentary evidence prepared in respect of the car hire, on the basis that he considered Mr Taleb an unreliable witness. That is, it was open to the Magistrate to accept only a limited aspect of Mr Taleb's evidence.

54 I do not accept that the Magistrate's use of the terms 'daily hire rate' and 'market rate' are indicative of confusion on his behalf, nor did it demonstrate that he conflated the two evidentiary burdens in this matter. There is nothing in the Magistrate's judgment to support such an assertion. Indeed, the Magistrate stated 'if there was some reliable evidence' before the Court, he would have used that to fix the level of damages awarded. However, he stated 'there [was] none.' It is therefore clear that the Magistrate simply did not accept Mr Taleb's evidence as to the fact of the car hire.

55 As was noted by the New South Wales Court of Appeal in Azzopardi v Tasman UEB Industries Ltd,[21] even if the evidence points only in one direction (as Mr Taleb submits it did), if a Magistrate states that they disbelieve it, on appeal, the court may not intervene.[22] Although the Magistrate did not expressly state that he considered the car hire documents to be a 'sham', when reading his judgment as a whole, and informed by the questions and comments he made during closing submissions, it can be inferred the Magistrate made that factual finding. Therefore, on this appeal, it is not for me to intervene.

56 As Mr Taleb failed to satisfy the Magistrate that he had incurred damages for his consequential loss, the Magistrate was never required to consider whether Mr Rijal could establish that such a claim was unreasonable. Therefore, it never progressed to the shifting of the onus of proof and as such, there was no error by the Magistrate regarding this.

57 In view of the above, I dismiss Mr Taleb's grounds of appeal numbered 1-4.

58 For the sake of completion, I note that Mr Rijal submitted that in accordance with established common law principles,[23] the Magistrate's award of $1,000 nominal damages was likely an error. Mr Rijal said that unlike a claim for damages involving a breach of contract, if a plaintiff whose action lies in tort leads insufficient evidence to establish damages, nominal damages are not recoverable.

59 Mr Taleb disputed this principle and submitted that it was open to the Magistrate to award nominal damages in a negligence claim. However, as Mr Rijal did not appeal against the award of nominal damages, it is not necessary for me to consider this further.

60 Having accepted there was no error in the Magistrate's judgment in respect of his decision to award Mr Taleb nominal damages instead of car hire costs, it is not strictly necessary for me to consider the consequences of Mr Taleb being unlicenced. However, in the event that I am wrong in this regard, I will, in the alternative, consider Mr Rijal's contention that the Magistrate erred in his finding that Mr Taleb driving unlicenced did not disentitle him from such damages.

61 Mr Taleb disputed Mr Rijal's ability to raise such an issue in circumstances where he had not issued a cross-appeal. However, Mr Rijal submitted that as this issue only arose in the event that the Magistrate was found to be in error, a cross appeal by him was not required.

62 Instead, Mr Rijal considered that such issues ought be raised in a notice of contention. In the pre-trial management of this Magistrates' Court appeal, Mr Rijal sought a direction from a Judicial Registrar in respect of how to put Mr Taleb and the Court on notice of such contentions. Mr Rijal was given leave to file and serve affidavit material identifying the grounds of his contention and did so by affidavit of his solicitor on 11 June 2021.

63 I accept that a cross appeal was not required as Mr Rijal did not seek to disturb the Magistrate's award for damages. In the event that Mr Taleb's appeal in respect of car hire costs was upheld, Mr Rijal sought to contend that the Magistrate erred on other grounds. I accept the affidavit was a sufficient way to record Mr Rijal's proposed contentions.

64 Mr Taleb also contended that an allegation of illegality ought to have been pleaded by Mr Rijal in the Magistrates' Court proceedings and that the failure to do so denied him procedural fairness. Mr Taleb submitted that he was ambushed with the issue in cross-examination and argued that the Court should not decide illegality on its own motion.

65 In response, Mr Rijal asserted that he had served a notice to admit on Mr Taleb in respect of his licence having been cancelled (and later surrendered) and his counsel had raised the issue in opening submissions in the Magistrates' Court proceedings. Additionally, Mr Taleb was cross-examined on this without objection, and his counsel made closing submissions in respect of why such illegality should not have impacted any award of damages.

66 I accept that this is a matter which was properly raised by Mr Rijal in the Magistrates' Court trial and may properly be raised in this appeal. I am not persuaded that Mr Taleb was denied procedural fairness and note that no such objection was taken in the Magistrates' Court proceeding. Such illegality was not a matter that the Court raised on its own motion, it was a matter raised by Mr Rijal and was addressed by both parties during the running of the case.

67 In support of this contention, Mr Rijal submitted that at the time of the collision and during the claimed period of car hire, Mr Taleb did not hold a valid driver's licence which would entitle him to drive such a car. The Magistrate heard that there were public policy considerations against the awarding of car hire costs to an unlicenced driver. In support of this submission, the Magistrate was referred to the decisions of Hewison v Meridian Shipping PTE[24] and Agheampong v Allied Manufacturing.[25]

68 Further, in this appeal Mr Rijal submitted that the Magistrate had been lead into error by Mr Taleb who referred him to the decisions of Mills v Baitis (Mills),[26] and Henwood v The Municipal Tramways Trust (Henwood).[27] It was contended that Mills was either wrongly decided or limited to its own facts as in it the Court had not been taken to the High Court decision of Smith's Newspaper Ltd v Becker (Smith's Newspaper).[28] Mr Rijal submitted that Henwood had no application to the claim for hire charges.

69 Instead, Mr Rijal contended that the correct line of authority[29] required the Magistrate to dismiss Mr Taleb's claim for car hire charges as to allow such damages would be to allow damages for an unlawful activity.

70 In reply, Mr Taleb submitted that the principles outlined in Henwood and Mills were good law and were correctly applied by the Magistrate in this case.

71 In Henwood, the plaintiffs were the parents of a man who died after striking his head on two steel standards while illegally leaning out of a tram window. The plaintiffs alleged negligence on the part of the Municipal Tramways Trust. The High Court held that the illegal act of the deceased did not disentitle the plaintiffs' claim for damages where there was another tortfeasor whose negligence was a cause of the accident.

[W]e have formed the opinion that breach of the by-law on the part of the deceased does not disentitle the plaintiff from recovering in respect of his death. We do not think that, in the absence of English authority requiring us to do so, we ought to adopt as part of the law of torts a general principle that, if the damage suffered by the plaintiff has been directly brought about by an act of his which is unlawful, he can never complain of a wrongful or negligent act or omission on the part of the defendant from which the damage otherwise flows as a reasonable and probable consequence.[30]

73 In Mills, the plaintiff was injured in a transport accident and sought to recover damages for lost income. His pre-accident earnings were derived from his work as a car mechanic from a garage at the back of his home. Mr Mills lived in an area which was residentially zoned, such that commercial activity including repairing cars was against the local council's planning laws. The defendant contended that as the plaintiff's income was derived in breach of council laws, he should be denied damages for his income loss. This argument was rejected and the plaintiff was permitted to recover his damages.

The public interest is not concerned to relieve the defendant wrongdoer. It directs its concern to the question of the deprivation of the plaintiff wrongdoer. Where the plaintiff's wrong-doing has had no causal connection with the defendant's wrong-doing which has caused the damage, it is less probable that the purpose of the law will be to treat the plaintiff's wrong-doing as affecting the plaintiff's relief, than where there has been a causal connection. Whatever may be the implications where the background wrong-doing on the part of the plaintiff is an offence at common law, where it is a statute which creates the offence, the statute should be regarded as providing an exhaustive statement of the purpose of the law. If all that the statute does is to take an activity which is ordinarily permitted and to prohibit it only in respect of a particular time or a particular place and to prescribe a penalty for a contravention, it should not be inferred, in the absence of any other expression of intention, that it was the purpose of the law that it should carry any other privative consequences.[31]

75 Mr Taleb also referred me to a High Court decision of Jackson v Harrison (Jackson).[32] In Jackson, two unlicensed drivers, the plaintiff and defendant, took turns driving the same vehicle in South Australia. When the vehicle was involved in a collision, the majority of the High Court (Barwick CJ dissenting) held that the plaintiff could sue the defendant in negligence despite knowing that the defendant was driving whilst unlicensed.

76 Further, I was taken to a quote from Mason J in Yango Pastoral Company Pty Ltd v First Chicago (Yango), in which he said:

There is much to be said for the view that once a statutory penalty has been provided for an offence the rule of the common law in determining the legal consequences of commission of the offence is thereby diminished.[33]

77 I note that this comment was made in the context of the High Court considering the enforceability of a contract entered into by the plaintiff carrying on a banking business in circumstances where it was not authorised to do so under the Banking Act 1959 (Cth).

78 Mr Taleb also referred me to an unreported decision of Giles J in Yoo v Allco Steel Corporation Pty Ltd.[34] In that case, the plaintiff was an immigrant who was not permitted to work in Australia and sought damages for a workplace injury. Giles J allowed a claim for loss of income. In doing so, he stated that to deprive a person working illegally of a claim for compensation for past loss of earnings was a penalty so much greater than the statutory penalty that it could not be said to be the intention of the legislature.[35]

79 The legislation which governs driving licenses in Victoria is the Road Safety Act 1986 and the Road Safety (Drivers) Regulations 2019. Mr Taleb contended that to refuse him an award of car hire costs on the basis that he was not qualified to drive would impose a greater penalty on him than that intended by the legislation. Further, he contended it would be inconsistent with the authorities to which he referred me.

80 I recently considered similar submissions in the matter of Yehia v Williams.[36] In that Magistrates' Court appeal, the issue of illegality related to a modified vehicle which could not be lawfully used on Victorian roads. I held that car hire costs should not be awarded, as at the time of the collision, Mr Yehia was only entitled to admire his car, not drive it. I stated that in such circumstances, to award car hire costs would put him in a better position than he was in at the time of the collision.[37]

81 In this case, the illegality is different. It relates to the driver of the damaged vehicle, not the vehicle itself. Notwithstanding this difference, having considered the submissions of both parties, I am satisfied the result is the same. Mr Taleb should not be awarded damages for a replacement car that he was not lawfully permitted to drive. Unlike Mr Yehia, who was denied a claim on the basis that it would have put him in a better position, I consider Mr Taleb should not be awarded car hire costs as the Court will not be a vessel for such illegality.

82 As Lord Mansfield stated in Holman v Johnson,[38] '[n]o court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act'.

83 There was no suggestion that being an unlicensed driver should disentitle Mr Taleb from all damages arising from the collision. I was therefore not assisted by the decisions of Henwood, Mills and Jackson as they considered whether or not to award damages to a plaintiff who was engaged in illegal activity at the time the tort was committed. Yango was even less relevant, as the illegal activity considered was in the context of the enforceability of a contract.

84 In determining whether the injured plaintiff in Yoo should be awarded damages for lost income arising as a consequence of his injury, Giles J considered the legislative intention of the Migration Act 1958. In doing so, he said as follows:

I ask myself whether s31B of the Migration Act evinces a legislative Intention that a person working without permission In contravention of Its terms is to be deprived of the rights of action which he would otherwise have if Injured In the course of his employment. I can see no reason for so concluding. It must be recognised that many persons illegally in Australia will work in order to live, despite s31B, and to deprive such a person of compensation for possibly severely disabling injury would in truth be to make him caput lupinum. Even to partially so deprive him by denying to him compensation for past loss of earnings would be a penalty so much greater than the statutory penalty of a fine of $1,000 that I do not think it can have been intended by the legislature.[39]

85 I consider the circumstances of Mr Yoo were vastly different to those of Mr Taleb.

86 Denying Mr Taleb's car hire claim is not about the imposition of a penalty relevant to what he was doing at the time of the collision. It arises because the Court will not award damages to a plaintiff to enable them to engage in ongoing illegal activity. In this case, providing a hire car to an unlicensed driver for a period of 43 days would allow Mr Taleb to drive without a licence. The Court should not, and will not, enable this.

87 Consistent with the decisions of Smith's Newspapers,[40] Brownbill,[41] and Sami,[42] Mr Taleb's illegality was relevant to the amount of damages he was entitled to recover. That is, it was a proper basis upon which to refuse his claim for car hire costs. I consider the Magistrate erred in not doing so.

88 In view of my findings above, it is not necessary for me to separately consider and determine Mr Rijal's alternative contentions, being that Mr Taleb was not entitled to damages for his claimed car hire on the basis that:

(a) he had a large number of vehicles at his disposal through his business; and

(b) any car rental agreement was unenforceable as it is not possible to contract with oneself.

89 Mr Taleb also claimed that the Magistrate erred in his calculation of the interest awarded on the judgment sum. He contended that the Magistrate erred by only awarding interest on the judgment up to 22 November 2019, when Mr Rijal made an offer of compromise.

90 In written submissions filed on behalf of Mr Taleb it was stated that:

The amount awarded was clearly an error. The sum of $72.67 awarded was the notional sum for interest that applied for the purpose of the Offer of Compromise. Counsel for the Respondent stated this at TT 281, line 22. He further stated, at TT281 line 20, that the actual interest that should be awarded was $1,514.85. Counsel for the Appellant at TT267 line 20 calculated the interest at $1,588.54. The difference in the two calculations appeared to be the different amount of the judgment each had used. Mr Ravida used $13,960 and Mr Strauch used $14,639.10. Whichever was used, the interest of $72.67 was clearly erroneous and this should be corrected.

91 Mr Rijal disputed this ground of appeal. He reiterated his submissions made at trial that interest should only be awarded up to the date of the offer of compromise (in which case, the interest would be $72.67). It was explained that Mr Rijal referred to the figure of $1,514.85 at trial to account for a circumstance in which the Magistrate decided to award interest on the total judgment sum, notwithstanding his submissions to the contrary.

92 Mr Rijal submitted that determining which figure to award was a matter of discretion and there was no error of law made by the Magistrate in awarding interest up to the date of the offer of compromise ($72.67).

93 The Magistrates' Court has the power to award interest under ss 33 and 60 of the Supreme Court Act 1986.

94 Section 60(1) of the Supreme Court Act 1986 is as follows:

Interest in proceedings for debt or damages

The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under s.2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of judgment over and above the debt or damages awarded.

95 A Magistrate's decision to award interest under s 60 is discretionary.

96 The High Court in House v King[43] set out the matters to be considered in an appeal against an exercise of a judicial discretion. It was stated that:

it must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed... [44]

97 When reviewing the exercise of such discretion, there is a strong presumption in favour of the correctness of the decision appealed from, and that decision should be affirmed unless I am satisfied that it is 'clearly wrong'.[45]

98 The Magistrate found that there was 'good cause' for not awarding Mr Taleb interest on the basis that Mr Rijal had made an offer of compromise for a sum greater than that which he was ultimately awarded. The exercise of the Magistrate's discretion was open and reasonably exercised.

99 As I am not satisfied that the Magistrate erred in awarding an interest sum of $72.67, I dismiss this ground of appeal.

100 Mr Taleb contended that the Magistrate erred in ordering him to pay Mr Rijal's costs from the date of the offer of compromise.

101 In exercising his discretion in respect of costs, the Magistrate was required, in Mr Taleb's submission, to consider whether the offer of compromise was unreasonably rejected. In support of this contention, I was referred to a decision of United Petroleum Australia Pty Ltd v Herbert Smith Freehills _(N_o. 2).[46] In that judgment, Elliott J discussed factors relevant to consideration of whether an offer of compromise had been 'unreasonably rejected'.[47]

102 Mr Taleb submitted that the Magistrate failed to exercise his discretion properly because he failed to have regard to, and attach due weight to a number of factors, including:

(a) the offer of compromise was made at a time when the only evidence of Mr Taleb's loss was the assessment report of his expert;

(b) it was reasonable for Mr Taleb to act on his expert's report;

(c) the offer of compromise did not make allowance or refer to car hire costs, and that became the principal focus of the defence at trial; and

(d) the offer of compromise expired before all the issues relating to damages became known to Mr Taleb.

103 Mr Rijal submitted that in circumstances where Mr Taleb failed to obtain an order more favourable than the offer of compromise, Order 26.08(3) of the Magistrates' Court Civil Procedure Rules 2020 applied.

(3) If an offer of compromise is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains an order on the claim to which the offer relates not more favourable than the terms of the offer, then, unless the Court otherwise orders -

(a) the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim before 11.00 a.m. on the second business day after the offer was served, fixed on the appropriate scale in Appendix A; and

(b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter fixed on the appropriate scale in Appendix A, as if the costs prescribed by that scale were increased by 25%.

105 Mr Rijal noted that Mr Taleb's submissions went to his purported reasonableness in not accepting the offer of compromise. However, it was put that unlike offers of compromise served in accordance with Rule 26.08 of the Supreme Court Rules,[48] Order 26.08(3) does not require an assessment of the 'reasonableness' of the offer made. In any event, after considering the lengthy submissions made by Mr Taleb's counsel, the Magistrate did not consider that such factors warranted a departure from the normal procedure contained in Order 26.

106 The Magistrate's decision in respect of costs was discretionary. The Magistrate took into consideration Mr Taleb's award for damages, being less than the sum Mr Rijal had offered him over one year prior. It was open and appropriate for the Magistrate to do so.

107 There was nothing in Mr Taleb's submissions which could support a finding that the Magistrate erred in law in his exercise of that discretion, or that such a finding was not open to the Magistrate.

109 For the abovementioned reasons, I dismiss the appeal.

110 I will hear from the parties in respect of costs.

[1] Yehia v Williams (Magistrates' Court Case No. K13055474).

[2] Revised transcript of judgment as agreed by the parties.

[3] Romas v Green [2015] VSC 95, [26].

[4] [2022] VSC 214.

[6] [1995] VicRp 70; [1995] 2 VR 508.

[8] [1990] HCA 33; (1990) 170 CLR 321.

[11] [2021] HCA 15; (2021) 389 ALR 178 (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ).

[12] Ibid, 189 [45] citing Sainsbury's Supermarkets Ltd v Mastercard Inc [2020] 4 All ER 807; [2020] UKSC 24, [200].

[13] [2021] HCA 40; (2021) 395 ALR 390.

[16] Ibid, 398 [32] (citations omitted).

[17] [2014] VSC 57.

[19] Hunter v Transport Accident Commission & Avalanche [2005] VSCA 1; (2005) 43 MVR 130, 136-7, [21]-[22].

[20] The time between the conclusion of closing submissions, and the delivery of judgment is not apparent from the transcript. However, both occurred on 4 December 2020.

[21] (1985) 4 NSWLR 139.

[23] Keys Consulting Pty Ltd v Cat Enterprises Pty Ltd [2019] VSCA 136, [68].

[24] [2002] EWHC 2175; [2003] ICR 766.

[25] [2008] EW Misc 4 (EWCC).

[26] [1968] VicRp 76; [1968] VR 583 ('Mills').

[27] [1938] HCA 35; (1938) 60 CLR 438 ('Henwood').

[28] [1932] HCA 39; (1932) 47 CLR 279 ('Smith's Newspaper').

[29] Commencing with Smith's Newspaper (n 28); followed by Brownbill v Kenworth Truck Sales (NSW) Pty Ltd [1982] FCA 11; (1982) 39 ALR 191 (Sheppard J) ('Brownbill') and Sami v Roads Corporation [2008] VSC 377 (Vickery J) ('Sami').

[32] (1978) 138 CLR 438 ('Jackson').

[33] [1978] HCA 42; (1978) 139 CLR 410, 429.

[34] (Supreme Court of New South Wales, Giles J, 17 June 1998) ('Yoo').

[36] [2022] VSC 197.

[38] [1775] EngR 58; [1775] 1 Cowp 341.

[45] Australian Coal & Shale Employees' Federation & Anor v The Commonwealth & Others [1953] HCA 25; (1953) 94 CLR 621, 627.

[46] [2018] VSC 501.

[48] Supreme Court (General Civil Procedure) Rules 2015 (Vic).