This costly dispute arose over the unprincely sum of $30.73. That’s right, the average price of a movie ticket with a small popcorn. But the hearing was somewhat princely; it took two days and both parties were represented by junior and senior counsel.
Yet it raised an important question that has been rearing its head in both the United Kingdom and Australia. Namely, whether the costs of a credit hire car are compensable in successful motor vehicle accident claims. That is, while a damaged vehicle is being repaired, are the costs of the temporary hire car compensable. Or, does a different test apply?
In both the Local Court, and, on appeal to the Supreme Court, it was determined that the costs of the credit hire car were not compensable damages.
The litigation
The litigation in Lee v Strelnicks [2019] NSWSC 526 was an application for judicial review of a Local Court Assessor’s decision.
The Origins
The origins of the dispute were pedestrian. A motor vehicle accident in suburban Sydney causing minor damage to the Plaintiff’s Toyota Camry. The car was soon repaired. During the repair period of 15 days, a replacement car was used by the Plaintiff. She claimed damages for the temporary use of her car. She sought $2304.09 which were the costs of the hire car during the 15 day period from a credit hire car company known as “Im in the Right” (an ironic moniker so it turned out).
The Assessor’s Determination
The Assessor determined that the Defendant was negligent but found the Plaintiff was a contributor (20%). The Assessor refused the Plaintiff’s damages claim for the costs of a hire car (other costs, such as the repair costs, were not in issue).
The Assessor held that the plaintiff had not established her entitlement to damages “assessed at the market rate” for the hiring of a replacement car. Instead, damages were assessed on the basis of interest accumulating on the capital value of the Plaintiff’s car while it was being repaired.
The Plaintiff’s Toyota Camry was worth approximately $17,000. Accordingly, damages were assessed at $30.73 (being the capital interest on the car’s value for 15 days less 20% for contributory negligence).
Challenge to the Supreme Court of New South Wales
In the Supreme Court of New South Wales, the Plaintiff challenged the assessment of damages. She contended that the Assessor’s determination was contrary to authority and principle and constituted an error of law amenable to review per s.69 Supreme Court Act.
The Plaintiff was unsuccessful. Wilson J determined that there was no error of law.
The Grounds for Review
Ground 1: Questions of use, need, and the assessment of quantum
The Assessor determined the issue of quantum on the basis that the Plaintiff bore a “burden of proving need as a basis for assessing damages according to the market rate for replacement”. He was not satisfied that the evidence of the use made of the damaged vehicle, and the need for a replacement, which he described as “bare assertions”, was sufficient to discharge that burden.
The Plaintiff contended that this was not the correct test to be applied in determining quantum. Instead, the reasonableness or otherwise of the decision to hire a replacement vehicle is to be assessed by reference to the facts and circumstances existing at the time the vehicle was hired and the Assessor erred by requiring her to establish a sufficient need for a hired replacement, by tendering detailed evidence of the degree of use of the replacement vehicle.
The Plaintiff submitted that the principle of restitutio in integrum should apply (a Latin phrase meaning restoration to the original position). In this respect, the Plaintiff had a car prior to the crash and, inferentially, had a car because she needed it. And, in that she was not hospitalised or overseas during the period of the car hire, inferentially, the same need existed at that time. She cited the judgment of Lord Steyn in Giles v Thompson [1993] 3 All ER and argued that evidence to that effect ought to have been sufficient to establish that the Plaintiff needed to hire a replacement vehicle, with damages assessed by reference to the car hire fees, since they were not extravagant.
The Defendant also relied upon on Giles v Thompson citing the judgment of Lord Mustill, in which his Lordship said, “The need for a replacement car is not self-proving”. The Defendant also relied on the decision of Ipp AJA, with whom Handley JA agreed, in Athanasopoulos v Moseley (2002) 52 NSWLR 262.
Ground 2: Mischaracterisation of evidence
The Plaintiff contended that the Assessor mischaracterised the evidence of need and use of a replacement vehicle. Referring to the Assessor’s rejection of her evidence on that point as no more than general assertion, she submitted that his Honour’s conclusion was “patently irrational”, a paradoxical decision that no reasonable mind could reach.
The Plaintiff submitted that this was a mischaracterisation of the evidence, and that the Assessor should not have required detailed evidence to justify the reasonableness of the plaintiff’s decision to hire a replacement car. She argued that this mischaracterisation further underlined the Assessor’s error in asking himself the wrong question with respect to damages, and approaching the matter contrary to principle.
The Defendant contended that the Assessor recognised and understood the Plaintiff’s evidence of need, but was simply not persuaded by it. That is, applying the test set out by Ipp AJA in Anathanopoulos, the Assessor was not satisfied that the Plaintiff had adduced evidence to support her claimed need of a replacement hire car during the relevant period. That decision was a conclusion of fact, and one which was open to the Assessor.
Consideration
The Court determined that there was no error of law. In so doing, it noted that the defence to the Local Court put the Plaintiff to “strict proof” and cited numerous particulars that put in issue whether the claim was excessive, exorbitant, or unreasonable; whether the daily rate of hire was excessive; and whether the duration of the hire period was excessive. Clearly, whether the Plaintiff was entitled to the damages claimed was in issue. It followed that the claim had to be proved by the Plaintiff. The Court adopt Lord Mustill’s words in Giles v Thompson, and stated that “the need for a replacement car was not self-proving”.
Following the Assessor’s decision as to liability, the temporary loss of use of the Plaintiff’s Camry was a loss that the Defendant was liable to compensate the Plaintiff for by way of an award of general damages. That is the principle to be derived from the line of authority commencing with The Owners of No 7 Steam Sand Pump Dredger v The Owners of SS Greta Holme (“The Greta Holme”) [1897] AC 596, and The Owners of Steamship Mediana v The Owners, Master and Crew of Lightship Comet [1900] AC 113 (“The Mediana”), which deal with the recovery of damages for injuries to property.
Beazley JA (as the present Governor of the State then was), wrote the leading judgment in Anthanasopoulos, and discussed both The Greta Holme and The Mediana, concluding that injury to property which deprives a party of the use of the property is compensable, in accordance with the long line of authority traceable to The Greta Holme.
Take home
As referred to in the judgment, securing a decision on liability in one’s favour is not and should not be viewed as an invitation to gratuitous expenditure, knowing it will be borne by someone else. There remains an obligation on a successful litigant to act reasonably in mitigating loss.