Megally v Bojanic

The applicant's grounds

1. The amended summons sets out some thirteen grounds of appeal, some with sub-grounds. At the hearing, grounds 4, 5 and 11 were abandoned. Of the remaining grounds, I doubt that any of are on a question of law, as opposed to question of mixed fact and law for the purposes of ss 39 and 40 of the Local Court Act. That is, each appears to require a grant of leave. The defendant was initially inclined to accept that grounds asserting findings made where there was "no evidence" to support that finding were on a question of law for the purposes of s 39. Even these grounds, however, seem to me to require the determination of whether there was or was not evidence to support the particular finding, and thus raise a question of mixed fact and law. Be that as it may, it must also be accepted that there can be some complexity to the issue: see Orr v Cobar Management Pty Limited (2020) 103 NSWLR 36; [2020] NSWCCA 220. As was there observed (at [40]), "the expression 'question(s) of law' and cognate expressions are not deployed uniformly in the statute books and … there is no universal meaning or understanding of what is a question of law".
2. It is convenient to set out such grounds as remain, and determine each in turn.

Ground 1: To the extent that leave is required as any of the grounds raise issues of fact or mixed fact and law, the appellant relies on the following matters:

a. there are clear errors on the face of the decision;

b. there are findings that cannot be supported on the evidence;

c. there are errors in basic principles as they apply to the assessment of the reasonable cost of repairs of a motor vehicle which is contrary to well- established legal principles; and case law; …

1. Grounds" 1(a), (b) and (c) contain general complaints that do not identify any actual error. They are not grounds within the meaning of r 50.4 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). At the hearing, Mr Hiramanek accepted that each was prefatory in nature. They were not pressed as individual grounds. To the extent that they might be regarded as grounds, they should be dismissed.

Ground 1(d): the [learned Magistrate] failed to provide reasons as to why [his Honour] departed from established legal principles or in the alternative, adequate reasons at all

1. The respondent was at something of a disadvantage with respect to this ground in that the applicant's written submissions did not appear to specifically address a complaint in these terms. The substance of this ground was clarified at the hearing. Mr Hiramanek explained that the substance of the complaint was that the learned Magistrate failed to apply the principle in Bellgrove v Eldridge (1954) 90 CLR 613, and "other cases … contained in the plaintiff's outline of submissions, court book 149 and 150 and 151". [1] Despite the somewhat late formulation of the substance of the ground, I am of the view it can be dealt with without any unfairness to the respondent.
2. It is convenient at this point to say something as to the basis of the applicant's claim. The applicant's claim was for "the extent to which the value of the property has been diminished by the damage caused to it": Stocovaz v Fung [2007] NSWCA 199 at [22]. Basten JA there explained the principle as follows: "Similarly, the loss or damage suffered by the plaintiff is, as a matter of principle, the extent to which the value of the property has been diminished by the damage caused to it through the negligence of the defendant. In many cases, though not all, the change in value will be reflected by the cost which would be incurred in restoring the vehicle to its former condition. In some cases that assumption may be false. Thus superficial damage to an old car which has already suffered some changes to its appearance, may only be capable of repair at a cost, which significantly exceeds the diminution in its value."
3. His Honour went on to note that there may also be cases where "it would be unreasonable to repair the vehicle because the extent of the damage indicates that the cost of replacement will be below the cost of repair" (at [23]). It should be noted that the nature of the applicant's vehicle and the damage to it was not such that it was, on this basis, unreasonable to repair the vehicle. Nor was it a case of an old car only capable of repair at a cost significantly exceeding the diminishment value. In other words, in the present case, the diminution in value as a result of the damage was capable of being determined "by the cost which would be incurred in restoring the vehicle to its former condition".
4. The difficulty for the applicant in the present case was that the ASA invoice did not represent the cost incurred, the cost that would be incurred, or the cost owed in actually undertaking repairs to the vehicle. That is, while certain works were done to restore the vehicle to its pre-accident condition, the invoice did not reflect that work.
5. Insofar as the respondent's expert, Mr Black, was accepted, he was forced to deal with some uncertainty as to what was actually required to restore the vehicle. In the joint experts' report, Mr Black revised his figure for the top of the range upwards which he said in evidence was the result of making some concessions. His evidence, nonetheless, remained that the reasonable cost of repairs was somewhere within that revised range. That he propounded a range was explicitly acknowledged in his Honour's reasons (at [47]) and is not challenged on this appeal.
6. Returning to the applicant's complaint, as noted above, this ground was articulated as a failure apply the principle in Bellgrove v Eldridge and "other cases … contained in the plaintiffs outline of submissions …" [2] The reference to the outline of submissions was a reference to the applicant's written submissions opening the case, prior to the calling of any evidence. In those submissions it was submitted that the invoice was available as a benchmark "for work done" as "representing a fair and reasonable cost of repairing the motor vehicle", citing Zdrilic v Fuchs [2008] NSWSC 486 per Malpass AsJ at [18] and Hyder Consulting (Australia) Pty Ltd v Wilih Willhemsen Agency Pty Ltd [2001] NSWCA 313 at [99] per Giles JA. Other authorities were referred to. It is not necessary to consider the merits of relying on the applicant's opening submissions rather than his closing submissions. Some of the authorities referred to in opening were again referred to in closing submissions. The more pertinent point is that, having heard all the evidence, the learned Magistrate found that the invoice did not represent the work done. The applicant's claim that somehow error occurred as a result of the Magistrate not having regard to authorities based on invoices that were taken to reflect to work that was actually done, or reasonably necessary to do, has, at least on the facts here, a fantastical quality. Having found that the invoice did not represent work done, it was not necessary that his Honour go on to explain why authorities based on actual costs or at least a genuine assessment of work required to be done and its cost, were not relevant.
7. Insofar as the applicant relies on a failure to apply Bellgrove v Eldridge or to provide reasons for not doing so, this complaint must also be rejected. The applicant submitted in writing that where there are no known costs of repair (as here) "the appropriate course of action as the High Court authority in Bellgrove v Eldridge (as adopted in Hyder) is to refer to the experts to determine the 'reasonable and necessary work to rectify' the vehicle". Contrary to the applicant's submission on the appeal, that is precisely what his Honour did.
8. Having rejected the evidence of the applicant's expert, the only acceptable evidence available to his Honour as to what work was reasonable and necessary to restore the applicant's position was that of the defendant's expert, Mr Black. Mr Black, in forming his opinion, had regard to the purchase of parts for the purposes of the repair and their cost. Despite the criticism of the applicant, this was simply part of his reasoning process. His Honour was entitled to accept Mr Black's reasoning, and his ultimate conclusion. Indeed, it is difficult to understand the applicant's complaint as to the reasoning of the expert given the applicant does not now suggest that it was not open to his Honour to accept Mr Black's evidence.
9. As I have observed, the learned Magistrate accepted the evidence of Mr Black, and, within the range provided by Mr Black, selected a figure, providing reasons for doing so. The assessment was necessarily imprecise as a result of the quality of the evidence available. There is nothing unusual in such assessments, often described as the application of the "broad axe" principle: Capita Alternative Fund Services (Guernsey) Ltd v Drivers Jonas (A firm) [2012] EWCA Civ 1417, CA at [80] per Gross LJ.
10. There is no merit in the applicant's complaint on this ground.

Ground 1(e): The [learned Magistrate] failed to apply the appropriate standard of proof when calculating damages

1. With respect to this ground, the applicant complained that the learned Magistrate "went outside the report" of Mr Black by having regard to the actual cost of parts. He submitted: "Where he has utilised remittance advices provided under subpoena by a repairer for the purchase price of the parts that were fitted to the vehicle. So instead of applying the market price which is contained within the expert report, which is clearly explained in each line item, he has then gone to the repairer and found out how much they purchased the part for and applied that to the sum. We say that is the error. By doing that he has increased the bar in terms of what the plaintiff has to prove in these types of cases." [3]
2. The complaint was that it can be assumed there will be some markup by a repairer on the actual cost of the parts. In these circumstances there was, in the applicant's submission, unfairness to him, by in effect, placing an onus on him to establish the markup, and failing this, receiving damages based only on the actual cost of the parts.
3. This submission misunderstands the approach of the learned Magistrate. His Honour said (at [49]-[50]): "49 I will determine the reasonable cost of repair within the range. I do that because I have reservations about the top of the range. For example, there was a paucity of evidence linking the parts identified in the invoice to the parts actually ordered. The evidence was that under $3,000 was spent on parts (Ex 19), whereas Mr Black allowed, at his top figure, $4,545 excluding GST. That is significant given the Agreed Fact that the work actually done, whatever it was, restored the car to its pre-accident condition. If parts were not supplied, it makes it difficult to find, on the balance of probabilities, that their cost would be part of the reasonable cost of repairs. Mr Black also did not positively opine about the higher labour rate he included, merely saying that he "had no problem" with it. The defendant points out that in the open market, it may well have been possible that a lower figure could have been obtained. 50 Doing the best that I can, and recognising that the defendant is the wrongdoer and is not entitled to have all doubtful matters resolved in his favour, I will take about $1500 off the top figure in Mr Black's range, and fix a round amount of $7000 (including GST) as the reasonable cost of repair, and hence the measure of damages for the diminution in value caused by the accident."
4. His Honour did not award damages limited to the actual cost of parts. Rather, his Honour noted that it was not appropriate to assume the figures for parts and labour at the top of their respective ranges. Nor did his Honour, in arriving at his ultimate conclusion, take the figure at the bottom of Mr Black's range which would, presumably, have been at least closer to the actual cost of parts and the lowest labour rate. His Honour's approach to the problem was entirely appropriate. There is, at a practical level, some irony in the applicant's complaint with respect to onus, given that he was arguably in the best position to know what was required to repair the vehicle and its cost. In this regard it may have been open to his Honour to weigh the evidence according to the capacity of the parties to produce it: Blatch v Archer (1774) 1 Cowp 63; 98 ER 969; Vetter v Lake Macquarie City Council (2001) 202 CLR 439; [2001] HCA 12.
5. Ground 1(e) fails.

Ground 2: The [learned Magistrate] erred at law at [46] of the decision by rejecting the appellant/plaintiff's claim based on a repair labour rate of $120.00 and substituting a rate of $100.00 per hour on the basis that it "may well have been possible that a lower figure could have been obtained in the market"

1. The essence of the complaint was that a labour rate of $120 per hour was not "extravagant or unreasonable", and that the assessment of damages should have been made on the basis of that figure, relying on Stocovaz v Fung.
2. The argument is similar to the one dealt with immediately above. The flaw in the applicant's argument is that the figure of $120 per hour did not represent the actual cost incurred by the applicant. Given the range available, there was nothing in principle requiring the Magistrate to determine that the reasonable cost of repair was repair involving the most expensive labour rate available. Where that amount has not been paid such an approach would risk awarding a plaintiff more than they will incur to address their loss. Having regard to the evidence in the case it was, as I have already said, open to the Magistrate to pick a figure within the range provided by Mr Black.

Ground 6: The [learned Magistrate] erred at law at [46] of the decision by finding that the respondent's expert, Mr. Gavin Black's top figure for the reasonable cost of repair was $8,500.00 inclusive GST in circumstances where there was no evidence to support that finding

Ground 7: The [learned Magistrate] should have found that Mr. Gavin Black's top figure as determined following the expert conclave on 29 July 2022 was $8,669.96 inclusive GST

1. These grounds were dealt with together by the applicant. The basis of the complaint is found in his Honour's statement (at [50]): "… I will take about $1500 off the top figure in Mr Black's range, and fix a round amount of $7000 (including GST) as the reasonable cost of repair …"
2. The applicant submitted that subtracting $1,500 from Mr Black's figure top figure of $8669.96 produces a figure of $7,169.96.
3. His Honour was well aware of Mr Black's top figure having noted it at [47] of his reasons. The applicant's submission ignores entirely his Honour's use of the words "about" and "a round amount". His Honour did not find that Mr Black's top figure was $8,500, or ignore the evidence that it was $8,669.69.
4. These grounds must fail.

Ground 8: The [learned Magistrate] erred at law at [49] of the decision in that [his Honour]:

a. relied on documents contained in Exhibit 19 which were Subpoena [sic] material produced by a third-party repairer and incorrectly made deductions for quantum based on this material; and then

b. accepted Mr. Black allowed $4,545 ex GST but wrongfully adjusted that figure to $3000.

1. This ground, as set out above, is as reformulated by the applicant at the hearing.
2. With respect to ground 8(a), the significance of the subpoenaed material having been produced by a third-party repairer is unclear.
3. Ground 8 appears to be a complaint solely relating to a factual finding. In any event, as discussed above, his Honour's approach was open to him. The Magistrate did not proceed on the basis that Mr Black "allowed $4,545 ex GST" for parts. Rather, his Honour accepted that Mr Black used that figure to arrive at the top end of his range. As already explained his Honour was not obliged to award damages at that upper limit. Further, his Honour did not "adjust" the figure to $3,000. His Honour simply made reference to the evidence of the actual cost of parts, as well as evidence with respect to labour costs, for the purposes of applying his entirely appropriate "broad axe" approach. This approach did not, as I have said, result in a figure at the bottom of the range.
4. Insofar as the applicant, in arguing this ground, was critical of the Magistrate for having accepted Mr Black's figure for the bottom of the range, that criticism is without foundation. The applicant's submission that there was no evidence that the bottom of the range was $5,000 is not correct. That was the evidence Mr Black gave and which the Magistrate accepted. Insofar as the applicant contrasted the precision of Mr Black's upper figure when compared to the lower figure, that was the result of the upper figure assuming particular work was done with particular costs. The lower figure represented the uncertainty as to what was in fact done to restore the vehicle (and applying lower labour and parts rates) and the round figure estimate is to be understood in this context.
5. Grounds 8(a) and (b) are without merit.

Ground 9: The [learned Magistrate] should have found that:

a. Mr Black, the respondent/defendant's expert had in fact allowed the amount of $4,496.78 ex GST (not $4,545 ex GST) for parts; and

b. that such an allowance by the respondent/defendant's expert of $4,496.78 was properly made

1. At the appeal the plaintiff did not separately press ground 9, stating it was "really part of [ground] 8". [4] While the ground purports to set out a discrepancy (of $48.22), between the figure the applicant states Mr Black allowed for parts, and the figure referred to by the learned Magistrate, the applicant's solicitor did not rely on any such discrepancy.
2. As has been stated, the complaint appears to be factual. In any event, as has been said, Mr Black did not "allow" the amount of $4,496.78. His evidence was that that figure was the uppermost available figure.

Ground 10: In the premises [sic], the [learned Magistrate] should have allowed a total amount of $8,900.30 including GST as the reasonable cost of repair and hence the measure of damages for the diminution in value caused by the accident

1. This ground was not pressed. It was acknowledged to be subsumed by the applicant's other grounds.

Grounds 12: The [learned Magistrate] erred at law in the decision below in awarding costs to the defendant against the plaintiff

Ground 13: The decision in 12 above was in made [sic] in circumstances where:

a. The plaintiff was successful in the proceedings below;

b. The majority of the grounds of defence in the proceedings below were either withdrawn or not agitated or no finding was made; and

c. The defendant failed in principle arguments raised in the defence filed in the proceedings below.

1. The applicant clarified at the appeal that these grounds represent a single ground. The ground does not obviously raise a question of law or of mixed fact and law. I would read s 40(2) of the Local Court Act as imposing additional requirements in the circumstances it sets out, as opposed to a providing a separate basis on which an appeal by leave, not requiring error of law or mixed error of law and fact, is available: see, for example, Picos v Western Pacific Automotive Pty Ltd [2018] NSWSC 536 at [28], [38].
2. At best for the applicant, this ground might be understood as asserting that the decision to award costs was wholly unreasonable such that latent error may be inferred: House v The King (1936) 55 CLR 499; [1936] HCA 40 at 505.
3. I am not satisfied of any error as to law or fact with respect to his Honour's determination as to costs.
4. Section 98 of the Civil Procedure Act 2005 (NSW) provides: 98 Courts powers as to costs (cf Act No 52 1970, section 76; SCR Part 52A, rules 5, 6, 7 and 8; Act No 9 1973, section 148B; Act No 11 1970, section 34) (1) Subject to rules of court and to this or any other Act- (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.
5. UCPR r 42.1 provides: 42.1 General rule that costs follow the event (cf SCR Part 52A, rule 11) Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
6. His Honour acknowledged these principles, and stated: "Costs are in the discretion of the Court. They generally should follow the event. That involves understanding the practical or real outcome of the proceedings. As Beazley J said in Commonwealth of Australia v Gretin [2008] NSWCA 717, 'The general rule and the qualifications to the general rule is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be a responsibility of each party for the incurring of the costs.' It seems to me in this case it is quite clear that the event was success for the defendants whose approach to the invoice that was the subject of the claim and the amount that was claimed was vindicated, and I propose to make an order for costs. I am prepared to reduce it by 5% to reflect the fact that there would have been some minimal costs incurred in dealing with issues that they did not ultimately press or based on the pleadings." [5]
7. His Honour's approach was entirely orthodox. While the applicant is correct in noting that he was successful in the proceedings below, this was more in form than in substance. That is, while the applicant obtained an award of damages, by the time of the hearing, liability was not in issue. The real issue litigated was the quantum of damages. That issue was largely defined by the competing opinions of the respective experts. The evidence of the applicant's expert was rejected. The respondent's expert was accepted. The result was an award of damages in the range propounded by the respondent's expert. Having regard to the actual context, in no real sense can it be said the applicant was successful.
8. While some grounds of the defence were withdrawn or not agitated, his Honour allowed for this by discounting the costs by five percent. Given the success of the defendant at the hearing, his Honour's decision as to costs has not been shown to have been attended by error.
9. Grounds 12 and 13 are without substance.

Conclusion

1. Having regard to the small amount involved, and the lack of substance in various grounds, the obvious course is to refuse leave to appeal: see Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164. However, against the possibility that at least one of the grounds raises a question of law within s 39 of the Local Court Act, and having considered the merits of each ground, I would, to the extent necessary, grant leave to appeal but dismiss the appeal.
2. Costs should follow the event.

Orders

1. I order as follows: 1. Grant leave to appeal. 2. Dismiss the appeal. 3. The applicant is to pay the respondent's costs as agreed or assessed on the ordinary basis.

Endnotes

1. Tcpt, 25 June 2024, p 20(30)-(35)
2. Tcpt, 25 June 2024, p 20(30)-(35)
3. Tcpt, 25 June 2024, p 21(41)
4. Tcpt, 25 June 2024, p 26(49)
5. Exhibit A, p 58 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 July 2024