Brysha v Kingmill Pty Ltd t/as Thrifty Car Rental

[2018] NSWCATCD 81

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Brysha v Kingmill Pty Ltd t/as Thrifty Car Rental [2018] NSWCATCD 81
Hearing dates:	17 September 2018
Date of orders:	04 December 2018
Decision date:	04 December 2018
Jurisdiction:	Consumer and Commercial Division
Before:	J A Ringrose, General Member
Decision:	1. The Tribunal orders that the applicant, Jake Brysha, is not required to pay the respondent, Kingmill Pty Ltd t/as Thrifty Car Rental the sum of $8,939.00 or any other sum, apart from the insurance excess which has already been paid, arising out of a motor vehicle accident which occurred on 30 March 2018 in South Hobart, Tasmania involving a Toyota Yaris, registered number XXX XX.
Catchwords:	Insurance cover provided with a car rental –attempts to exclude liability for insurance – meaning of driving dangerously or recklessly
Legislation Cited:	Australian Consumer Law 2010 Competition and Consumer Act 2010
Cases Cited:	Kane v Dureau [1911] VLR 293 Quigley v Becker unrep WASC 22 July 1997 per White J R v Coventry [1938] 59 CLR 633 R v Burnside [1962] VR 96 R v Lawrence [1982] AC 510 Thompson v Copeland [1936] SASR 45
Category:	Principal judgment
Parties:	Jake Brysha (Applicant) Kingmill Pty Ltd t/as Thrifty Car Hire (Respondent)
Representation:	Applicant (self-represented) Mr Fehre (Recoveries Officer (Respondent)
File Number(s):	MV 18/25686
Publication restriction:	Nil

REASONS FOR DECISION

Application

1. By an application filed on 6 June 2018 the applicant sought an order that he should not be required to pay a sum of $8,939.00 which was being demanded from him by the respondent.

2. In setting out his reasons for the orders sought, Mr Brysha claimed that he hired a motor vehicle from the respondent on the understanding that he was covered for comprehensive insurance with a payable excess. He pointed out that he had paid the excess but was now being followed up for the remaining balance of any damage done to that car on the basis that, as a result of his driving, he was in breach of his contract for hire and was therefore not entitled to any insurance cover.

3. When the matter was listed before the Tribunal on 25 June 2018 the name of the respondent was amended to include the correct legal entity and a direction was then made that the respondent should provide the applicant and the Tribunal with a copy of all documents on which the respondent intended to rely to support its claim for exclusion. Those documents were to be provided by 9 July 2018.

4. The applicant was thereafter directed to provide all of his documents by 30 July 2018. The directions also required both parties to include with their documentation a short statement of the legal basis upon which the claim was made or upon which it was defended.

5. Both parties provided documents in accordance with the directions made and the matter was listed for hearing on the allocated date.

Respondent’s Submissions

6. As the respondent was required to provide submissions of evidence to justify a refusal of the insurance indemnity, the directions made required the respondent to provide first evidence and submissions. It is noted that Mr Fehre, Collections Officer, appears to have remained responsible for the claim from the time of the first refusal. There is no evidence that he ever sought or obtained legal advice in relation to his rights to refuse the insurance claim in the way he did.

7. Mr Fehre noted that the applicant hired a Thrifty vehicle (Toyota Yaris Ascent – registration number XXX XX) on 26 March 2018. Some four days later, 30 March 2018 he phoned the respondent and advised that his vehicle was involved in an accident with another vehicle after he had failed to stop at a red light. It was noted that both vehicles were towed away from the scene and that Tasmanian Police issued the applicant with an infringement notice for “fail to stop as required on red light”.

8. Mr Fehre claimed that by reason of this infringement notice the applicant had breached the terms and conditions of the hire contract with the respondent by failing to stop at a red light, breaching road and traffic legislation applicable to the operation of the vehicle.

9. He did not submit that a copy of the terms and conditions had been provided to the applicant but noted that the terms and conditions were available on the Thrifty website and suggested that they were provided at a point of booking. He did not point to any evidence that this was done.

10. Although Mr Fehre referred to a number of clauses of the contract which gave rise to what was described as a “serious breach”, he did not see fit to attach the full contract and clauses which referred to a serious breach.

11. At the Hearing he narrowed this aspect down to refer to cl 7.5 and 7.7 of the contract and alleged that there had been a failure to take all reasonable care of the vehicle:-

1. To prevent damage, theft of the vehicle and third party loss and further to cl 7.7 in relation to driving the vehicle dangerously or recklessly.

He claimed that as a result of these alleged failures that the respondent held the applicant fully responsible for the cost of damage to both their own vehicle and the other vehicle involved in the accident.

12. Mr Fehre then referred to cl 11 of the contract and he claimed that the contract had been terminated as a result of:

1. a serious breach of the rental contract or;

2. a reckless breach of road or traffic legislation

13. Apart from providing a copy of the one page hire agreement signed by the applicant, along with a copy of the Tasmanian Infringement Notice and four images depicting damage to the vehicle, no other evidence was provided in support of the allegation that the contract could be terminated by the respondent as a result of a serious breach.

14. The respondent also produced a copy of a letter to the applicant dated 3 May 2018 being a letter of demand of payment of a sum of $8,939.21 by 17 May. The letter contained a threat that if payment was not received in full by the due date, collection proceedings may be commenced through their solicitors, which would incur legal costs with interest. All communications with the respondent appeared to have been answered by Mr Brendan Fehre, recovery officer.

Applicant’s Submissions

15. The applicant, Jake Brysha provided a detailed statement dated 18 July 2018 along with some 12 annexures, together with an indexed copy of the Tasmanian Traffic Act 1925 and the Traffic (Compliance and Enforcement) Regulations 2017.

16. He stated that he was 26 years of age holding a standard C Class Driver’s Licence in New South Wales and that he had been licensed as a driver for over 8 years. He stated he had good eyesight and hearing and no disabilities which could impair his driving.

17. On Monday 26 March 2018 he flew to Launceston for a one week holiday in Tasmania with his partner. They had not been there previously and it was their intention to drive through the centre of Tasmania from Launceston to Hobart.

18. They booked a vehicle through the Economy Car website and obtained an e-Voucher for Thrifty Car Rentals. He attached that voucher which indicated that he had chosen a full insurance package with an excess and that Thrifty Excess damage protection was included.

19. Upon arrival at Launceston airport, Mr Brysha stated that he questioned the Thrifty operator about car insurance and he was told that the car was booked with insurance and that the cover he had was all that he would need. As he looked over the document provided, he was told that he had comprehensive insurance by a provider that would look after him in the event that there was an accident, even if it was his fault. Mr Brysha stated that had he been told he was not covered with comprehensive insurance he would never have agreed to rent the car under those terms.

20. The attendant simply asked him to sign the rental agreement and did not request him to tick or initial anywhere else on the page. The document signed by Mr Brysha was provided as an annexure to this statement and it is noted that he had not been required to initial the document in a position where he would have been directed to a $4,000.00 excess and another section which related to pets. It is noted that at the hearing Mr Fehre, on behalf of Thrifty, was questioned about the fact that no initials had been provided and he simply speculated that the attendant had ticked these boxes to indicate he had explained these matters to the hirer although he was unable to explain why the required initials had not been obtained.

21. Having departed Launceston, Mr Brysha and his partner, journeyed down to Hobart, along the Central Highway. They arrived at Hobart on 29 March 2018 and after lunch on the following day they planned to drive to Mt Wellington. They put the address in the GPS and headed down the road towards the mountain.

22. Mr Brysha then described the circumstances leading up to the accident indicating that they proceeded to Davey Street which was a long wide one way street. Photographs of the area near the accident have been included as annexures to Mr Brysha’s statement.

23. He claimed that at the time of driving down the road he was surrounded by traffic and there were cars in front of him and on both sides as well as behind him. He continued down the centre lane trying to take everything into account to enable him to get to his destination. A sign showed that the street ahead had two left hand turn lanes but when he finally got closer to the intersection he stated that the situation became confusing and the lane in which he was travelling which was a straight ahead lane then became two left hand turn lanes. He claimed that the arrows on the road only appeared from underneath the car when he was about seven car lengths from the traffic lights and that parked cars on his left and right had come to a stop.

24. The applicant then described looking at lights and seeing them to be green. He noted that he had a quick check of his mirrors and any blind spot and changed into the correct lane for his destination. As he proceeded through the intersection towards his destination he saw a car in front of him and the collision occurred.

25. When police attended the scene he explained to the attending officer how the accident had occurred and he was advised that he would not be charged with reckless or negligent driving as it was a mistake. The officer explained that accidents of this nature did happen and he informed Mr Brysha that he would be given an infringement notice for disobeying a red light.

26. Each of these matters are clearly confirmed by the Tasmanian Police Infringement Notice which was attached detailing the offence of fail to stop as required on a red light. The notice prescribed a penalty of $159.00 and a loss of three points.

27. The traffic report number 18001831 created by Constable Travis Purton detailed the contributing factors to the accident as inattentiveness and failure to obey traffic signals.

28. A description of the accident was as follows:-

Unit one was travelling west on Davey Street in the left lane. Unit one driver had the intention of travelling up to Mount Wellington and realised he was in the wrong lane and attempted to change into the correct lane. Unit one has then failed to see the lights at the intersection of Davey Street and the southern outlet change and has proceeded through a red light colliding with the side of unit two which had a green light travelling on the southern outlet. Unit two has flicked on to its roof. All persons extricated themselves from the vehicle. There is no indication in the report that any persons were injured.

29. A blood sample was taken at the scene and a certificate dated 2 May 2018 indicated that no alcohol was detected and no prescribed illicit drugs were detected.

30. On 1 April 2018 Mr Brysha attended the office of Thrifty Car Rental in Hobart to report the accident. He was told by an attendant at that office that he would be required to pay a full $4,000.00 excess for the motor vehicle accident. He stated that he thought this was a bit strange because he had been told by the attendant at Launceston airport that Economy Car Rentals had a good insurance policy. The attendant at the Hobart office informed him that after paying this amount it should be the last he would hear. In the following weeks he sent letters including details of his fine and his blood test results along with some other correspondence to Thrifty.

31. On 25 April 2018 he received a letter from Thrifty and signed by Mr Fehre (his assigned officer) indicating that he would be liable for the full damage to the vehicle as he had breached the contract of insurance. The letter included a demand for payment of $8,939.21 in addition to the money he had already paid and required that this money be paid by 3 March 2018.

32. An exchange of emails then occurred between the applicant and Mr Fehre in which the applicant firstly noted that he had expected he had an insurance cover for events like this in view of the information he received. In reply Mr Fehre informed the applicant that he had breached parts of the contract relating to reckless and dangerous driving and that he had not taken reasonable care of the vehicle and that he had been in a reckless breach of road laws.

33. Mr Brysha sought clarification of these issues but unfortunately Mr Fehre did not provide any further information but rather suggested “if you don’t understand it speak to a lawyer”. He insisted that the applicant was driving recklessly and informed him that he never had insurance on the car and that no level of excess reduction would have changed the result. Mr Brysha then sought to refer the matter to the Financial Ombudsman Service and it was pointed out that all Thrifty rental vehicles were self-insured and that service could not assist.

34. The applicant then referred to the definition of reckless driving contained in s. 32 of the Tasmanian Traffic Act 1925 and to the Traffic (Compliance and Enforcement Regulations 2017) under which he noted that the offence of fail to stop as required on a red traffic light attracted a penalty of one penalty unit and a loss of three demerit points.

35. He also referred to extracts from Traffic Law (New South Wales) by MMG Britts with reference to driving offences under the New South Wales Traffic Act.

Decision

36. In this matter the respondent clearly bears the onus of establishing that the contractual rights of the applicant for insurance are no longer available to him in the circumstances of the present case. Although Mr Fehre did not see fit to include a full copy of the terms of contract between the parties the applicant included one in his material.

37. As a preliminary point the Tribunal is well satisfied that the terms and conditions upon which the respondent relies were never in fact brought to the attention of the applicant prior to his taking delivery of the rental car. The applicant states that he never received a full copy of the terms and it is clear from the documents that he has provided that he had every good reason to believe that he was obtaining a vehicle with a full insurance package where third party damage excess protection was also included.

38. The document provided to the applicant at Launceston Airport was a one page document and the copy of that document has been provided again by the applicant although not by the respondent. Acknowledging that there is a presumption whereby persons signing an agreement are acknowledging to be bound by the terms contained therein, it is significant to note in the present case that the signature of the applicant on the document occurs in only one place notwithstanding a specific requirement on the document that there be initials indicating that an excess of $4,000.00 under the policy has been brought to the attention of the hirer. The Tribunal accepts without hesitation the evidence of the applicant that he was never requested to initial in that part of the contract and that he had a conversation with a Thrifty employee whereby he was led to believe that there was perfectly adequate insurance cover provided through the arrangement with Economy Car Rentals.

39. The hire document includes an acknowledgment that the hirer has received and read the Thrifty terms and conditions but this is clearly not the case and on the first issue relating to the contractual terms by which the applicant was bound, it is appropriate to determine that the respondent is not, in the circumstances of this particular case, entitled to rely on the acknowledgement incorporating all of the undisclosed terms owing to the manner in which the document was signed and the manner in which the questions by the applicant were dealt with.

40. Mr Fehre has relied upon cl 11 of the Thrifty terms and conditions which relate to termination of the rental contract by the respondent and notwithstanding the findings which at present have already been made, it is appropriate to consider whether his arguments have any merit in relation to cl 11.

41. The basic proposition relied upon by Mr Fehre on behalf of the respondent was that the insurance under the contract is not available where the contract terminated for a breach. He addressed the argument in relation to terms and conditions by submitting that the applicant had agreed to terms and conditions which were on the internet and if he was not shown them when picking up the vehicle he should not have signed the hire contract if he was not aware of those terms and conditions.

42. It should be pointed out that the reference to terms and conditions is in small print and the circumstances in which the document was signed, including the conversation with the Thrifty attendant give little or no support to the argument raised by Mr Fehre in this regard.

43. Although the respondent seeks to rely on exclusions to damage cover in its submissions it is noted that cl 5.3, upon which Mr Fehre seeks to rely relates to damage, under body damage or third party loss caused by deliberately or recklessly driving the vehicle. Clearly in such circumstances recklessness and deliberate driving must be established before the exclusion can be relied upon.

44. In an email to the applicant on 17 March 2018 Mr Fehre said:-

I have already explained to you four times. If you don’t understand what you have signed please get legal advice.

Section 7.5 During the rental period you must:

1. Take all reasonable care of the vehicle:

Section 7.7, you must never:

(f) drive the vehicle dangerously or recklessly;

Section 11, TERMINATION OF THE RENTAL CONTRACT

2. A reckless breach of road or traffic legislation.

If you are unable to pay in full and want to enter a payment arrangement to settle the debt, please let me know and I will send you a financial questionnaire.

If you are unsure of your legal standing in regards to the rental please seek legal advice.

Regards

Brendon Fehre

Recoveries Officer

45. Mr Brysha sent four unanswered emails to Mr Fehre between 17 May 2018 and 5 June 2018 including an email where he noted that he had gone into the Alexandra office of Thrifty with an enquiry about coverage and he noted that he had been told by a woman there that he would be covered in the event of an accident.

46. On 6 June 2018 Mr Fehre wrote to Mr Brysha indicating that he was no longer handling the file over a default on the credit line and it had been forwarded to the legal team as Mr Brysha had already been informed by a letter of 3 May. He suggested that the legal team would be in contact with Mr Brysha in due course.

47. Mr Fehre in his submissions sought to rely on the provisions of cl 7.5 of the terms and conditions noting that it was an obligation on the hirer:-

1. To take all reasonable care of the vehicle.

He failed to refer to the other parts of cl 7.5(a) and it is trite to suggest that if a failure to take all reasonable care of the vehicle constituted a basis, of itself, to declare the contract void then that clause would be struck out as being harsh and unconscionable.

48. In the hearing Mr Fehre conceded that in order for the contract to be breached and terminated, driving of the vehicle must be reckless or dangerous and he conceded further that the breach of the contract entitling termination must be a serious breach of the contract or involve a reckless breach of road or traffic legislation.

49. Mr Fehre also conceded that the only evidence upon which he relied in relation to the nature of driving to demonstrate reckless or dangerous driving was the photos of the vehicle and the description of the accident contained in the police report.

50. In his submissions Mr Fehre, on behalf of the respondent, referred to a definition of reckless from the Webster dictionary as being:-

(1) Marked by lack of proper caution; Careless of consequences

(2) Irresponsible reckless charges

He referred further to a definition of dangerous from the Webster dictionary as:-

(1)   Involving possible injury, pain, harm or loss; characterised by danger,    a dangerous job.

(2)   Able or likely to inflict injury or harm; a dangerous man.

51. It is noted that in an email to the respondent on 17 May 2018 Mr Brysha referred to reckless as “heedless of danger or the circumstances of one’s action; rash or impetuous”. He described the adjective ‘heedless’ as showing a reckless lack of care or attention. In the same email Mr Brysha questioned Mr Fehre as to his assertion that receiving a fine for an infringement constituted an irrevocable breach of the contract. Mr Fehre failed to respond directly and suggested that the file was with the Thrifty legal team for recovery of monies owing. It is noted however that Mr Fehre continued to attend Tribunal on behalf of the respondent to pursue the present claim.

52. In considering whether the applicant’s driving in the present case was sufficient to be regarded as reckless or dangerous, it is necessary to take into account a number of matters, in particular the nature of the driving should be gauged in the light of all available evidence concerning the circumstances of the accident. The respondent has provided no evidence other than the traffic infringement notice and the photographs of the damaged vehicle. The applicant has provided evidence of the findings of the police officer who attended the scene and apparently interviewed not only the applicant but also one other witness including, probably, the driver of the other vehicle. The photographs provided support to the description of the accident given by the applicant in relation to the road layout and the fact that the signage for traffic travelling to the left or straight ahead occurs quite close to the lights leaving little time for a driver unfamiliar to the area to elect to proceed straight ahead or make a turn.

53. The Traffic Crash Report indicates a speed limit of 50 km/hour on a sealed road which was dry. The description of “inattentiveness” provided by the investigating police officer fits comfortably with the description of the accident given by the applicant, namely that he realised he was in the wrong lane and attempted to change into the correct lane then failed to see the lights had changed. The applicant’s evidence which is accepted by the Tribunal was that he was travelling in very slow moving traffic in circumstances where he needed to wait and check before attempting to change lanes to proceed in the direction towards Mount Wellington. The evidence of any damage to the vehicle cannot serve as evidence of speed or manner in which the applicant was driving and it is therefore necessary to consider the meaning of reckless within the terms of traffic laws.

54. The actus reus of the offence of driving recklessly is not merely driving without due care and attention but driving in a manner that creates an obvious and serious risk of physical injury to any other road user or substantial damage to property. The mens rea of the offence is driving in such a manner without giving any thought to the risk or having recognised that it exists nevertheless taking the risk (R v Lawrence [1982] AC 510).

55. Where one’s conduct when driving may cause serious damage to persons using the road, indifference to consequences, is enough to support a charge of driving “recklessly”. (Kane v Dureau [1911] VLR 293 and Thompson v Copeland [1936] SASR 45).

56. In Victoria Sholl J has held that on a charge of reckless driving contrary to s. 318 of the Crimes Act 1957 (VIC), it is relevant to consider whether the accused realised the risk and went on regardless and whether that was the cause of the accident (R v Burnside [1962] VR 96).

57. For driving to be dangerous it must in reality and not speculatively be actually or potentially dangerous to the public or another person. The rest is objective (Quigley v Becker unrep WASC 22 July 1997 per White J).

58. The matter of driving includes all matters connected with the management and control of a car by a driver when it is being driven and the test of liability is objective and impersonal and does not depend on the state of mind of the accused at the time of the alleged defence (R v Coventry [1938] 59 CLR 633).

59. The authorities referred to herein provide considerable support to the definition of reckless offered by the applicant rather than the Webster’s dictionary definition relied upon by the respondent.

60. In taking into account the manner in which the Tasmanian Traffic Legislation addresses the seriousness of the respective offences, it is noted that s. 32 of the Traffic Act 1925 describes reckless driving as driving of a motor vehicle on a public street recklessly, having regard to all the circumstances of the case including the nature, condition and use of the public street and the amount of traffic that actually used at the time or that might reasonably be expected to be on the public street. The penalty upon conviction of an offence of reckless driving is noted to be up to 20 penalty units or a period of imprisonment of two years for the first offence. By a way of contrast the penalty provided for a failure to stop on a red traffic light is one penalty unit and a loss of three points.

61. Considering the applicant’s description of the manner in which the accident occurred and recognising that that description is not contradicted by any other evidence or by the observations of the investigating police officer, it is difficult if not impossible to find that a reckless or dangerous manner of driving would be inferred from the circumstances of this accident. The respondent has accordingly failed to demonstrate that the driving of the applicant constituted a serious breach within the meaning of the hire agreement and has failed to demonstrate that the circumstances of the accident demonstrate that the vehicle was being driven by the applicant in a manner which was dangerous or reckless. The respondent has also failed to demonstrate any basis upon which the contract of hire could be terminated. These observations are made specifically because there was an inference in material sent by Mr Fehre to the applicant that the respondent would not cover him against any damage should a claim be made by the driver of the other vehicle. The Tribunal has determined that a denial of the insurance and the circumstances was not and is not available to the respondent.

62. It is unfortunate that this matter has been allowed to go through a series of processes up to a point of a Tribunal Hearing in circumstances where the officer from the respondent, who clearly has no legal qualifications has, on the face of it, attempted to bully the applicant and suggest that he should seek legal advice. The applicant’s position throughout has proved to be appropriate and sound and if the provisions of s. 60 of the Civil and Administrative Tribunal Act and the recent decisions of the Appeal Panel had allowed for an award of costs in favour of the applicant and against the respondent, an application for costs would have been seriously considered. Unfortunately the opportunity to apply for costs in the circumstances is not available to the applicant.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 28 March 2019