Avery v Alexander
[2018] QMC 9
•13 February 2018
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
Avery v Alexander [2018] QMC 9
PARTIES:
Lee AVERY
v
Lisa ALEXANDER
FILE NO/S:
M50234/2017
PROCEEDING:
Trial
ORIGINATING COURT:
Southport Magistrates Court
DELIVERED ON:
13 February 2018
DELIVERED AT:
Southport
HEARING DATE:
16 January 2018
MAGISTRATE:
A.H. Sinclair
ORDER:
Judgment for the Plaintiff in the sum of $462.00
CATCHWORDS:
DAMAGES – loss of use and enjoyment of motor vehicle
COUNSEL:
A. Messina for Plaintiff
A. Fitzsimmons for Defendant
SOLICITORS:
Sphere Legal for the Plaintiff
Ligeti Partners for the Defendant
Overview
Mr Avery, the nominal Plaintiff, was driving his 1994 Econovan to work on the M1. His car was struck from behind in an accident caused by the Defendant's negligence. He was promised a car at no cost to him by the tow-truck driver. He was taken to Right2Drive who provided a near new Hyundai Accent[1]. It engaged lawyers on its behalf to recover damages from the Defendant’s insurer.
[1] The odometer reading was 6008km at the time.
Pleadings
The pleadings admit liability and raise a number of issues in relation to the correct quantum of damages. The amount in dispute is $1485 made up of $88 a day of car hire for 16 days and $77 towing fee.
Issues
At the trial the parties acknowledged that the real issues in dispute between them were:
a. Whether Mr Avery had a need entitling him to a replacement vehicle
b. What the appropriate measure of damages was.
The later issue was the main focus of the trial. It could be expressed in the following way :
Where the driver of a vehicle which is much older than the available rental fleet has their vehicle taken off the road for period of time by the negligence of another driver; do they recover only the cost of the cheapest appropriate replacement hire vehicle available at that time and place?
My conclusions are :
a. That Mr Avery had a ‘need’ which was to get to work. Almost any car would do.
b. The drivers of much older cars with simple needs recover only the cost of the least expensive vehicle in the rental fleet that meets their need. This will usually be the oldest and smallest.
The Facts
The plaintiff Mr Avery is a honest and hardworking man. I accept all of his evidence. On his way to work he was rear-ended by a car pushed into him by the defendant. His concern was not for himself but the drivers of the other cars when he smelt petrol. He could see that his 1994 Econovan was badly damaged and a likely write off. He was now late for work and no doubt in some shock. He found himself unable to drive to work and unable to help his elderly and disabled neighbours for whom his van and assistance were invaluable.
In this vulnerable state he was taken away by a tow truck driver on the promise of something too good to be true - a free car: one paid for by the at fault driver’s insurer. He was taken to the Right2Drive premises in an industrial area. He told the lady working there that he didn’t read very well and she ‘explained’ the contract to him.
He understood it to be as told to him by the tow truck driver. What he signed was something else altogether. It purports to be a 90 day car hire agreement for which he is liable for the costs. It also assigned to Right2Drive the irrevocable right to sue in his name. Such a clause is not a power of attorney and is no doubt ineffective. If it were, the implications are that for a car that was double the price of major hire companies, he also had to risk costs and engage in litigation. It’s clear that if he knew what he was signing he would not have done so. The clauses of the Right2Drive contract being dispersed amongst small type fonts in unexpected locations under misleading headings and directly contrary to the misunderstanding caused by Right2Drive’s explanation of it might well render such a contract unenforceable.[2]
[2] See for example East Coast Car Rentals v Lee 14 November 2012 Magistrate Cull unreported.
Mr Avery wasn’t told that he is liable for the whole fee regardless of the outcome of these proceedings or that by the proceedings being in his name, he was at risk of having to pay his own legal costs or adverse legal costs. Nothing he was told at the time of the hire changed his understanding given to him by the tow-truck driver.
When Right2Drive unilaterally told him that the written contract would not be honoured and they would collect the car in 14 days, he was left to ‘make do’ with borrowed cars at some considerable inconvenience to himself. In fact, they took it back after 16 days. During that time he drove to and from work but not elsewhere for fear of damaging it.
Right2Drive concedes that the price wasn't even filled in before it was signed. Mr Warren of Right2Drive also gave evidence that the contract included further terms and conditions. No such document was produced or disclosed. (or referenced in the contract). He said they had a ‘policy’ of only renting for 14 days write offs. It was available online they said. Something hardly useful to a man who doesn’t even own a computer and was taken to the location after the smash. Mr Avery was never given a tax invoice by Right2Drive. They sent it directly to the Defendant's insurer.
Mr Avery in his evidence clearly was not of the view that he had hired a car or was responsible under the contract for the now filled in costs on the contract he signed. He did not seem to appreciate that he was the Plaintiff. Properly advised, it seems Mr Avery might easily defend any claim by Right2Drive attempting to seek to enforce any aspect of the so called hire contract including the hire costs, interest or legal costs. That is a matter about which the solicitors on the record who purport to be under a fiduciary duty to him to act in his best interests may have to face.
Evidence was received from Mr Soloman of Hertz, Mr Karadriou of Rent-a-Bomb and Mr Warren of Right2Drive. The later included hearsay evidence of what market offerings were in place at the date of the accident. It included Thrifty who for 1 day charged in the area of $75.00 for a Corolla and Budget who charged more than $100 a day all up for a brand new 8 seater van.
All offer similar models of cars grouped in similar classes (apparently commonly used worldwide in the hire industry), a number of classes, hire to the public from a convenient location, services in multiple locations within Australia, advertising of prices on the internet and phone bookings. They all offered similar excesses and similar packages to reduce the excess. Some required a deposit or a credit card.
The evidence about price fluctuations given did not assist. What did was the prices which actual hirers gave for actual cars available on the date of the accident. I accept their evidence about that.
A Hertz Yaris for 16 days all up would have cost Mr Avery $606.23 (so would an Accent)
A Rent-a-Bomb older Accent or Corolla would have been $432 over that 16 days.
Even a newer Rent-a-Bomb Accent would have been only $40 per day after 7 days.
The excess and waiver options were similar for the new cars but in any event Mr Avery did not available himself of them or claim them. His car was not comprehensively insured.
The Law
Need
The threshold test for need is not high. Here Mr Avery used his vehicle to get to work. Exhibit 3 and the mileage travelled on the Right2Drive car shows he did only 285 km in 16 days. Even if he only worked 12 of them, his work was close.
I was not given any evidence as to why he didn’t fix his motorbike. He had ridden it to work until it got a flat tyre. He could have taken it in the van when he had it or on a tow truck or trailer after the accident. In any event, he didn’t do it, preferring to borrow his partner’s car where he could or a friend’s. It would seem there was a good reason why he did not repair the bike. Cost seems the most likely cause given his circumstances. The insurer made no enquiries with him, made no part payment of the damages and provided him with no replacement vehicle of its own. While it was unrepaired he had to get to work. He had a need for a replacement car.
Damages
The guiding principle in the damages is authoritatively stated as:
The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed[3]
[3] Haines v Bendall (1991) 172 CLR 60 at 63; 99 ALR 385 per Mason CJ, Dawson, Toohey and Gaudron JJ.
Both parties relied on the same authority and for good reason. In Beamish v Kanakis [2017] WADC 33 His Honour Judge Derrick SC of the the District Court dealt with the same issues.
I gratefully adopt his reasoning in that decision not because I am bound but because I think it’s correct. It is a detailed exposition of all the relevant authorities. Especially relevant are paragraphs 44, 51-55, 63, 83, 84, 86, 117-121, 123, 128, 129, 165,172, 180 but ratio is at 132. This case raises no new or novel point of law: just the simple application of principles distilled and published in that decision of 15 March 2017.
Paragraph 132 reads:
In summary, and for the reasons I have stated, if damages for loss of a non-income producing vehicle damaged by the negligence of a third party are to be calculated by reference to the cost of hiring a replacement vehicle, the determination of what is an appropriate replacement vehicle by reference to which the market rate hire costs are to be quantified requires the taking into account of the precise nature of the need of the person who has lost the use of the damaged vehicle, the value of the damaged vehicle, and the value of available replacement vehicles which are capable of meeting the precise need of the person who has lost the use of the damaged vehicle.
The parties concentrated on whether His Honour’s use of the term ‘mainstream’ at [119] to describe renters as meaning some particular hire options are not relevant to what he described as ‘market rate hire costs’.
A hair splitting exercise in not required. Any market for any product or service consists of a wide variety of options. Some are poor quality. Some are overpriced. It is often hard to compare them. Hire cars are no exception.
This does not in my view change the fact that they are all essentially offering the same product. To the extent it is necessary to decide what a ‘mainstream’ hire car company is, His Honour seems only to have been distinguishing backyard operators or persons offering cars or terms well outside other market operators.
The defendant says I can place limited weight on the market research by Mr Warren into market prices. Prices vary a good deal based on how long the hire period is. While companies vary as to what the discount is and what periods it applies to, all would offer a healthy discount at 14 days. His efforts do not show the Thrifty price other than for one day. It’s also clear from evidence given by the representatives of Hertz and Rent-a-Bomb that prices over the phone or in person can be negotiated lower that any online price but are never higher.
The outliers in this group were Rent-a-Bomb and Right2Drive. Only the later delivers or collects vehicles by tow truck. Only Right2Drive provides the car on credit and pursues the at fault drivers insurer. On the surface it is fast and convenient. What is vastly different to other hire car companies is the inclusion of a clause allowing it to commence legal action in the hirers name against a third party. Rent-a-Bomb’s only real difference was that it hires two general types of vehicle - newish (2012 to 2107) and older (later 90’s to mid-2000’s) vehicles. The later are much cheaper and have much lower excesses and excess reduction options. Both companies are nonetheless ‘mainstream’ providers with vehicles readily available for hire to drivers such as Mr Avery in the area at the general time.
If either is outside the ‘mainstream’ market it is Right2Drive. It’s insistence on only giving a car for 2 weeks to drivers of written off cars shows that it is not really hiring to the general public on commercial terms but focuses on not-at-fault drivers. Because Mr Avery was such a driver, they form part of the market he was in.
His Honour also dealt with the situation where the precise need will dictate a vehicle more valuable than the damaged one (at [121]). That is the case here. There were no 1994 vans for hire with a rusty roof. Fortunately for Mr Avery he only needed to travel a relatively short distance in easy driving conditions to get to and from work and said any reliable vehicle would do. There being no hire cars as old as his, he was entitled to the most modest one that would meet his need. That included an older Rent-a-Bomb vehicle.
If I disagree with His Honours assessment of the relevant factors it is only as to the extent of the relevance of the value of car being replaced. What seems important to me is its utility. Damages are about compensation for the need. The value a replacement car has matters little to the hirer. What matters is how well it meets the need. It seems sensible where the rental industry groups cars into classes that these form the basis for determining what will meet the need rather than having to hear extensive evidence at the absolute value of any model that any hirer had on hand on the day. For example, one hirer might have a car with 20km on the clock and another might have a similar model in the same class with 20,000km and be 3 years older. The later would be worth a fair degree of difference less but would do the job just as well.
While His Honour was concentrating on relative value in the rather unique position of need in the prestige car arena, for more everyday vehicles it seems sufficient to me to say that hiring any vehicle from the cheapest class that will meet the need is the correct measure of damages. In that way, a family with 5 children might end up with a newish ‘people-mover’ to replace their much older 7 seater if that’s all there was; a driver with an automatic transmission licence might only be able to get a larger car if there are no autos available in their size. All cases will turn on their facts.
A 20 year old vehicle is likely not to be as desirable or pleasant to drive as a newish one but there is no evidence that it is inherently unreliable. Common sense dictates that it would be at least as reliable as a 23 year old vehicle worth $1000. In any event, any car can break down and the hirer has the obligation to provide a working vehicle under the terms of the hire. The mere fact that the vehicle is older and perhaps less reliable does not change the fact that it meets the need of the driver of an even older vehicle.
Application
The question is thus, can the owner of any very old car rent a newish one and recover the whole cost as compensation? The answer is no.
They may hire any car they wish to but they will only ever be entitled to recover the market rate for the ‘appropriate replacement vehicle’ as set out in paragraph 132 of Beamish.
In summary, and for the reasons I have stated, if damages for loss of a non-income producing vehicle damaged by the negligence of a third party are to be calculated by reference to the cost of hiring a replacement vehicle, the determination of what is an appropriate replacement vehicle by reference to which the market rate hire costs are to be quantified requires the taking into account of the precise nature of the need of the person who has lost the use of the damaged vehicle, the value of the damaged vehicle, and the value of available replacement vehicles which are capable of meeting the precise need of the person who has lost the use of the damaged vehicle.
Any hire car available was more valuable than Mr Avery’s van and of the same or better utility to meet his needs.
In Mr Avery’s case, I accept there was a Rent-A-Bomb available. He gave evidence that any reliable vehicle would have done for him. There was unchallenged evidence that Rent-a-Bomb had such a vehicle available on the day and regardless of how long the initial hire was for, once he had it, he could have kept it. Had he hired from them for 16 days it would have cost him $432 in total.
The value of the damaged vehicle was modest. Mr Avery accepted $1000 from the insurer.
No evidence was led as to the value of the hire car but if it was registered and therefore road worthy, on the balance of probabilities it was worth at least that amount.
The market on the Gold Coast on 10 November 2016 included Rent-a-Bomb. Their price was $27. They would let him keep the car once he had it as long as he needed it. Uber was a delivery and pickup option. A fare could not exceed the vast difference between the Right2Drive daily rate and the Rent-a-Bomb rate.
The Plaintiff abandoned the claim for the tow truck that came to collect the Right2Drive car. Mr Avery did not request such a service. It was in fact in breach of the written contract and done at the insistence of Right2Drive and not for Mr Avery’s convenience. However, in order to avail himself of the Rent-A-Bomb car, Mr Avery would have incurred at least the additional costs of going there or having it delivered and the same for its return. I allow $15 each way being the unchallenged and only evidence given as to an Uber fare from Oxenford to Palm Beach.
Conclusion
The general aim of an award of damages in tort is to put the injured party in the same position as he would have been in if the tort had not occurred. Damages in tort aim to restore the claimant to his pre-incident position. During the 16 days Mr Avery chose to satisfy his need, he could have been put in that position for a lot less than he chose to pay (under the misapprehension that he was not paying anything at all).
The Plaintiff has claimed interest. He has not been ‘held out’ of his money, having paid none. He appears under the contract to be liable for interest to Right2Drive. That does not mean that he is to be compensated for his choice of hire or payment arrangements. Any attempt by Right2Drive to recover interest would no doubt suffer from the same problems with the contract earlier alluded to.
In Screenco Pty Limited v R L Dew Pty Limited & Anor [2003] NSWCA 319, Hadley JA at [41] to [42] and Tobias J at [90], [120] and [122] set out why interest is not payable for the loss of a chattel where no money was spent to obtain the replacement. That follows the basic principle that damages are a compensation for actual losses.
Orders
The Plaintiff is awarded $462 In damages and no interest.
I will hear the parties as to costs.
A.H.Sinclair
Magistrate
14 February 2018
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