MOTOR VEHICLE CLAIM - general damages - loss of use - quantum dispute - need for a replacement
Cases Cited: Admiralty Commissioners v The Susquehanna (Owners) [1926] AC 655
[1926] All ER Rep 124
Anthanasopolous v Moseley [2001] NSWCA 266
52 NSWLR 262
Berrill v Road Haulage Executive [1952] 2 Lloyds Rep 490
Chong v Berry [2007] NSWLC 33
Giles v Thompson
Devlin v Baslington [1994] 1 AC 142
Griffiths v Kerkemeyer [1977] HCA 45
Source
Original judgment source is linked above.
Catchwords
MOTOR VEHICLE CLAIM - general damages - loss of use - quantum dispute - need for a replacement
Cases Cited: Admiralty Commissioners v The Susquehanna (Owners) [1926] AC 655[1926] All ER Rep 124
Anthanasopolous v Moseley [2001] NSWCA 26652 NSWLR 262
Berrill v Road Haulage Executive [1952] 2 Lloyds Rep 490
Chong v Berry [2007] NSWLC 33
Giles v ThompsonDevlin v Baslington [1994] 1 AC 142
Griffiths v Kerkemeyer [1977] HCA 45139 CLR 161
Lagden v O'Connor [2003] UKHL 64
Judgment (3 paragraphs)
[1]
JUDGMENT
The plaintiff, Mr Garry Ross, was the owner of a 2010 Suzuki 5X4. His vehicle was damaged in a collision on 7 June 2014 when the bus driven by the second defendant, Mr Sean Higgins, and owned by the first defendant, State Transit Authority of NSW ("the Authority"), collided with Mr Ross' vehicle which was parked outside his residence in Maroubra, NSW. There is no dispute that the damage sustained to Mr Ross' vehicle was due to the negligence of Mr Higgins, for which the Authority is vicariously liable.
On 11 June 2014, Ms Merryn Ross, presumably the wife of Mr Ross, emailed the second first defendant's insurer advising that the vehicle was unable to be driven anything other than short distances.
On 17 June 2014, the vehicle was towed to Maroubra Bay Garage. Mr Ross states that he was advised by the owner of Maroubra Bay Garage that he would lodge a claim with the at-fault driver's insurer. On that same day, Mr Ross hired a replacement vehicle. Mr Ross states that he used the replacement vehicle for work and domestic purposes.
On 18 June 2014, the repairer prepared an estimate. On 24 June 2014, a loss assessor carried out an assessment on the estimate and an agreement was reached with the repairer for the repairs to be carried out at a cost of $4,883.67.
On 27 June 2014, Mr Ross signed a written release in consideration of payment by the first defendant's insurer of the sum of $4,883.67. The release document directs the settlement sum to be made payable to the repairer and sent to the plaintiff's residence. The executed release was returned to the insurer on 30 June 2014.
On 21 July 2014, the first defendant's insurer authorised payment of the settlement cheque. The cheque was banked by the repairer on 25 July 2014 and repairs were commenced. On 1 August 2014, the repairs were completed and Mr Ross returned the hire vehicle and collected his vehicle from the repairer.
Mr Ross hired the replacement vehicle for a period of 45 days. He hired the replacement vehicle through Right2Drive which offers vehicles on a credit hire basis. A tax invoice issued by Right2Drive on 28 August 2014 shows daily charges of $79.00 together with vehicle registration recovery of $7.00 and excess reduction of $27.00. The total cost said to be due is $5,659.50. Mr Ross has not paid any amount towards that cost.
The statement of claim seeks to recover damages being loss of use of the plaintiff's motor vehicle based on hire car charges in the sum of $5,659.50. Counsel for the defendants criticises the plaintiff's claim in that it fails to distinguish with particularity whether the claim seeks either special or general damages. It is a distinction which is not a mere technicality. If the plaintiff seeks to recover special damages; that is, to recover an actual expense or liability incurred, then issues identified in Lagden v O'Connor [2003] UKHL 64; 1 All ER 277, such as whether the plaintiff was impecunious and unable to afford a hire vehicle not on credit, become relevant. If the plaintiff alternatively seeks to recover general damages, then, following Anthanasopolous v Moseley [2001] NSWCA 266; 52 NSWLR 262 different considerations apply and the assessment of damages is based on the market rate for the replacement of the plaintiff's vehicle irrespective of the basis upon which the plaintiff actually hired the replacement vehicle.
In Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 3 All ER 479 the Court of Appeal held:
"Where a plaintiff has suffered damage of a kind which is not the necessary and immediate consequence of the wrongful act complained of, he must warn the defendant in the pleadings that the compensation claimed will extend to this damage and particularise any item of damage which is capable of substantially exact calculation while at the same time giving the defendant access to the facts which make such calculation possible, thus showing him the case he has to meet and assisting him in computing a payment into court; furthermore the extent of this requirement is dictated not by any preconceived notions of what is general or special damage but by the circumstances of the particular case".
Furthermore, in Admiralty Commissioners v The Susquehanna (Owners) [1926] AC 655; [1926] All ER Rep 124 at 127, Viscount Dunedin said:
"If the damage be general, then it must be averred that such damage has been suffered, but the quantification of such damage is a jury question."
In the present case, while there is no obligation to plead general damages with particularity, it is at least necessary for the plaintiff's pleadings, which are couched in terms of special damages for car hire costs, to include a further pleading for general damages for loss of use of property.
Despite the inadequacy of the plaintiff's pleadings, the basis of this claim was said, on behalf of the plaintiff, to be one seeking only general damages. In this instance, no real prejudice is caused to the defendants, who is represented by counsel well experienced in credit hire claims. The defendants are capable of responding to the claim for general damages.
The dispute between the parties on the quantum can be distilled to three issues for determination. Firstly, the question of the plaintiff's "need" for a replacement vehicle; secondly, the duration of the loss of use for which the defendant should be held responsible; and thirdly, the assessment of the market rate for the replacement of the plaintiff's vehicle.
[2]
The Plaintiff's "Need"
Since the decision of the House of Lords, United Kingdom, in The Owners of No. 7 Steam Sand Pump Dredger v Owner's of SS "Greta Holme" (The Greta Holme) [1897] AC 597 it has been accepted that a plaintiff deprived of a non-income producing chattel is entitled to recover damages. This entitlement is not dependent upon a plaintiff establishing a need for the chattel.
This proposition is perhaps best illustrated in the statement by the Earl of Halsbury LC in Mediana, Owners of the Steamship v Owners, Master & Crew of the Lightship Comet (The Mediana) [1900] AC 113:
"Supposing a person took away a chair out of my room and kept it for twelve months, could anybody say you had a right to diminish the damages by shewing that I did not usually sit in that chair, or that they were plenty of other chairs in the room? The proposition so nakedly stated appears to me to be absurd".
In Anthanasopolous v Moseley (supra) the Court of Appeal held The Greta Holme line of authority as applicable to the assessment of damages for loss of a private motor vehicle. In that case, the Court of Appeal was determining an appeal on questions of law as to whether a plaintiff was entitled to damages for loss of use in circumstances where a replacement vehicle was provided through an insurance courtesy vehicle program. The decision of the Court of Appeal dealt with the basis for the right to claim damages. It was not called upon to determine the basis upon which those damages should be assessed. Notwithstanding this, Ipp AJA (with whom Handley JA agreed) went on to consider the basis upon which damages for loss are assessed. Ipp AJA noted the similarity between personal injury claims based on Griffiths v Kerkemeyer [1977] HCA 45; 139 CLR 161, which are assessed according to the plaintiff's need for personal services, and claims for loss of property which are based on the need to keep, maintain or replace the property. Ipp AJA concludes at [80]:
"In my opinion, the true basis of claims for damages to a non-income producing chattel and claims of the Griffiths v Kerkemeyer category are both based on need, the latter category of cases provides additional support for the proposition that the respondents are entitled to damages against the appellants."
There is, at least on the face of it, a potential inconsistency between the views expressed by Ipp AJA at [80] and the statement of Halsbury LC in The Mediana regarding the requirement of "need".
This inconsistency was noted in Yates v Mobile Marine Repairs and Anor [2007] NSWSC 1463. That case involved a claim for damages for the period when Mr Yates was deprived of a fishing vessel known as "Eagle" which was used for private pleasure. The defendant in that case relied on the comments of Ipp AJA and argued that damages for loss of use should not be awarded as Mr Yates did not "need" the vessel. Palmer J rejected the submission that the comments of Ipp AJA introduced a test of "need" and noted that this would be contrary to the authority of what was said in The Mediana. Palmer J accepted that damages could be assessed by reference to either interest on the capital value of the yacht or the market cost of hiring a replacement yacht.
In the recent decision of Wong v Maroubra Automotive Refinishers Pty Ltd [2015] NSWSC 222 ("the Wong case"), McCallum J dealt with claims of detinue involving private motor vehicles. When assessing damages for the wrongful detention of the vehicles, McCallum J adopted the views expressed by Ipp AJA in Anthanasopolous v Moseley (supra) that the basis for recovery was the plaintiffs' need for their vehicles. McCallum J held at [68]:
"Each plaintiff had established that they were dependent on their cars to satisfy their daily transport needs. Where, by reason of that need, they were required to hire a replacement chattel, the damages were to be measured by reference to the market rate of hiring a replacement chattel."
In the Wong case, Ms Wong relied on public transport for a period of time until she was provided a replacement vehicle. Notwithstanding that, McCallum J held that she had established a need for a vehicle and allowed damages calculated at the market rate for the hire of a replacement for the entire duration of the detention period.
The views of Ipp AJA in Anthanasopolous v Moseley (supra) and Halsbury LC in The Mediana on the requirement of "need" can be reconciled. Where Halsbury LC was speaking of "need" in the context of being irrelevant to the entitlement to general damages, Ipp AJA was speaking of "need" in the context of being relevant to the method of assessing that entitlement. Properly understood, there is no inconsistency in the views expressed.
Accordingly, a person wrongfully deprived of their motor vehicle by the tortious conduct of another is entitled to general damages irrespective of whether they "needed" their vehicle. Such damages could be calculated on the basis of interest on the capital value of the vehicle, costs of maintenance of the vehicle foregone (such as registration and insurance costs) and other inconvenience such as public transport costs. However, damages may be alternatively calculated on the basis of the cost of hiring a replacement, provided that a plaintiff establishes a "need" for a replacement vehicle. In light of the decision in the Wong case, it would seem open for a plaintiff to recover damages assessed at the market rate for a replacement vehicle, even for the period where a replacement vehicle was not arranged, provided the plaintiff gives sufficient evidence establishing a "need" for that period.
In the present case, the defendants dispute that the plaintiff "needed" a replacement vehicle. The defendants rely on an email from Merryn Ross dated 11 June 2014 where she states, "I am unable to drive the car anything other than short distances and would like to have the situation remedied as soon as possible to avoid further inconvenience". The defendants submit that this is evidence of another person's need for the vehicle rather than the plaintiff's need. In Berrill v Road Haulage Executive [1952] 2 Lloyds Rep 490, Slade J held that general damages for loss of use required a consideration of the plaintiff's loss rather than an assessment of the loss of use suffered by another person including, in that case, a spouse.
It is a requirement for a plaintiff to demonstrate "need" in order for damages to be assessed by way of the market rate for the hire of a replacement. That "need" is not self-proving; Chong v Berry [2007] NSWLC 33 at [20]; Singh v Yaqubi [2013] EWCA Civ 23 at [33] - [35] and Giles v Thompson; Devlin v Baslington [1994] 1 AC 142 at 167. If, for example, a plaintiff is overseas, incapacitated or has an alternative vehicle already at their disposal during the period of deprivation, then such need may not be demonstrated. However, the issue of "need" is not an onerous burden to discharge. As Ipp AJA acknowledged in Anthanasopolous v Moseley (supra) at [73] many people are dependent on their motor vehicles to satisfy their daily transport needs. In Yates v Mobile Marine Repairs and Anor (supra) it was accepted that Mr Yates was likely to charter the vessel for 88 days during the period of loss of 348 days and that the market rate for hire of a replacement vessel for that period was considered by the Court to be a proper basis for assessment of damages. Palmer J found that Mr Yates was looking forward to using and enjoying the vessel and "had a substantial need - in a practical sense, not in a commercial sense - for the use of the Eagle" at [83] .
In respect to Mr Ross' "need" he states at par 8 of his statement that he "used the hire vehicle for work and domestic purposes". Mr Ross fails to depose in his statement that he, in fact, "needed" a replacement vehicle.
Mr Ross completed a form titled "Advice of Authority to Act" on 17 June 2014, in which he represents that he requires a replacement vehicle because he needs a vehicle to commute to and from work, and that public transport is not suitable for his needs. Mr Ross does not give evidence of where his place of work is located or details of his hours of travel to and from work. Nor does he explain why a vehicle is required for his transport needs. Mr Ross gives no evidence of his domestic circumstances. Curiously, Mr Ross did not select the additional option contained on the form "I do not have access to another suitable vehicle". In those circumstances, it is open to the Court to infer that he does have another suitable vehicle available to satisfy his transport needs. The hired vehicle was driven 759 km during the 45 day hire period. On average that equates to less than 17 km per day. Mr Ross does not give any detailed evidence as to how the vehicle was used during this period.
When a plaintiff is put to proof on the issue of "need" for a replacement vehicle it is incumbent upon the plaintiff to provide some evidence detailing the need. While the act of hiring and use of the replacement vehicle may provide some evidence of "need" in the practical sense referred to by Palmer J in Yates v Mobile Marine Repairs and Anor (supra), in this instance, there is evidence that Merryn Ross used Mr Ross' vehicle. While she may have needed the vehicle, as evident from her email dated 11 June 2014, Ms Ross is not the plaintiff and her "need" for a vehicle is not compensatable.
The plaintiff has failed to establish that he needed a replacement vehicle to meet his daily transport needs. In those circumstances, the Court is not prepared to assess general damages based on the market rate for a replacement vehicle. Mr Hardy, a loss assessor from Burgess Assessments, attaches a report on the plaintiff's vehicle that expresses the opinion that the pre-accident value of the plaintiff's vehicle was $9,000. The Court will assess general damages on the basis of applying the Court's prescribed pre-judgment interest rate on the capital value of the plaintiff's vehicle. There is also evidence that Mr Ross incurred the annual cost of registration for the vehicle in the sum of $337. The Court will also allow damages based on the annual registration fee on a pro rata basis.
It is unnecessary to consider the dispute as to the market rate for the replacement vehicle.
[3]
Duration of Loss of Use
The remaining issue in dispute is the period claimed for loss of use. The plaintiff claims loss of use for 45 days between 17 June and 1 August 2014.
The defendants submit that by no later than 27 June 2014, when the plaintiff signed a written agreement releasing the first defendant's insurer from further liability in consideration of payment of the sum of $4,883.67, the plaintiff should have directed the repairer to commence repairs. Instead the plaintiff waited until payment was received on or about 25 July 2014 before authorising the commencement of repairs.
The argument that the plaintiff should have authorised repairs on 27 June 2014 is rejected. The agreement was not signed on behalf of the first defendant's insurer on 27 June 2014. The agreement, by its terms, only became binding upon the insurer at the time of making payment to the plaintiff. That did not occur until on or about 25 July 2014. Prior to that, there was no certainty as to when, or even if, the insurer would make that payment.
In respect to the alternative submission that there is an absence of evidence on the part of the plaintiff regarding his inability to pay the cost of repairs from his own financial resources, again there is no basis for concluding that the plaintiff acted in a manner that caused the period of loss to be extended. The plaintiff was negotiating the repairs to the vehicle with the first defendant's insurer. The decision to wait until there was formal acceptance of the cost of repairs by the insurer was reasonable. If the plaintiff had authorised the carrying out of repairs prior to a certain assurance by the insurer, he may have found himself incurring a liability which the insurer may have either sought to avoid or, alternatively, sought to settle at a lesser amount.
Otherwise, the duration of the loss of use while repairs were being carried out was no longer than what would have been expected.
The Court is satisfied that the duration for loss of use should be assessed for the period of 45 days. General damages are assessed in the sum of $75.33, being interest on the pre-accident value of the plaintiff's vehicle, together with $41.54 for the pro rata cost of registration costs.
The Court will enter a verdict and judgment for the plaintiff in the sum of $116.87. Costs reserved.
Assessor Olischlager
Local Court of New South Wales
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Decision last updated: 23 July 2015