JUDGE:	Bell J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 April 2018
DATE OF JUDGMENT:	30 May 2018
CASE MAY BE CITED AS:	Fallon v Johnston
MEDIUM NEUTRAL CITATION:	[2018] VSC 273

---

DAMAGES – mitigation of damage – motor vehicle accident – order of magistrate that plaintiff entitled to hire-car expenses for 52 days – appeal on grounds of error of law – unexplained delay by insurer in making write-off payment – whether plaintiff had taken reasonable steps to mitigate her damage – whether magistrate erred in law by applying subjective rather than objective standard of reasonableness – whether reasonable for plaintiff to wait until after write-off payment made by defendant’s insurer to buy replacement vehicle – damages for loss of use of vehicle as represented by hire-car expenses when vehicle of innocent motorist damaged or written off – impecuniosity or lack of means of plaintiff – whether and how taken into account when assessing whether plaintiff had taken reasonable steps to mitigate loss – plaintiff had modest amount in quasi-partnership business account – whether entitled to exercise commercial prudence by not using those funds to purchase replacement vehicle before insurer had made write-off payment – Magistrates’ Court Act 1989 (Vic) s 109(1).

---

APPEARANCES:	Counsel	Solicitors
For the appellant	Mr M Black	Mills Oakley Lawyers
For the respondent	Mr T J McLean	John Curtain and Associates

HIS HONOUR:

Jessica Johnston owned a 15 year old motor vehicle of low value. On or about 13 January 2017, it had a collision with a motor vehicle being driven by Vincent Fallon, rendering it undriveable and probably a write-off. Alleging Mr Fallon was negligent, Ms Johnston issued a proceeding in the Magistrates’ Court of Victoria claiming as damages (among other things) the write-off value of the vehicle and hire-car costs.

Some weeks after the collision, Mr Fallon’s insurer (‘AAMI’) paid to Ms Johnston the amount of $5,460.00 for that write-off value, which she accepted. Soon afterwards, she obtained finance for and bought a replacement vehicle. The costs of the hire-car claimed by Ms Johnston was a total of $8,808.00 for 52 days.

Just prior to the hearing before the magistrate, Mr Fallon admitted liability and the proceeding continued by way of a damages assessment. As the write-off value of the vehicle had been paid, the main issue was whether Ms Johnston was entitled to hire-car costs for 52 days or less. Mr Fallon contended that, even though Ms Johnston bought a replacement vehicle soon after the write-off payment was made, she should have obtained a replacement vehicle much earlier. On this basis, she would have been entitled to hire-car costs for 14 days (or so), being $2,371.60.

The magistrate heard the evidence and held that Ms Johnston was entitled to damages that included hire-car costs for 52 days. His Honour ordered…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Fallon v Johnston

Details

AGLC: Fallon v Johnston [2018] VSC 273
Case: [2018] VSC 273
Decision Date: 30 May 2018

CaseChat Overview and Summary

In the case of Fallon v Johnston, the plaintiff, Fallon, sought damages from the defendant, Johnston, for injuries sustained in a motor vehicle accident. Fallon appealed against an order of a magistrate that she was entitled to hire-car expenses for a period of 52 days. The appeal was based on the grounds that the magistrate erred in law by applying a subjective rather than an objective standard of reasonableness when assessing whether Fallon had taken reasonable steps to mitigate her loss. The defendant argued that Fallon had delayed in purchasing a replacement vehicle until after the defendant’s insurer made a write-off payment, and that this delay constituted unreasonable behaviour in mitigating her loss.

The court had to determine whether the magistrate’s application of the standard of reasonableness was erroneous and whether it was reasonable for Fallon to wait until after the write-off payment was made to purchase a replacement vehicle. The court also had to consider how Fallon’s financial situation, specifically her modest amount in a quasi-partnership business account, affected the assessment of whether she had taken reasonable steps to mitigate her loss. The court considered whether Fallon was entitled to exercise commercial prudence by not using those funds to purchase a replacement vehicle before the insurer had made the write-off payment.

The court found that the magistrate had erred in law by applying a subjective standard of reasonableness. The court held that the standard of reasonableness should be objective, and that it was reasonable for Fallon to wait until after the write-off payment was made to purchase a replacement vehicle. The court also found that Fallon’s financial situation could be taken into account when assessing whether she had taken reasonable steps to mitigate her loss. The court held that Fallon was entitled to exercise commercial prudence by not using her business account funds to purchase a replacement vehicle before the insurer had made the write-off payment. The appeal was dismissed.

The court ordered that Fallon was entitled to damages for loss of use of her vehicle as represented by hire-car expenses for a period of 52 days. The court also ordered that the defendant pay Fallon’s costs of the appeal.

Orders