Kinkead v Rositani
[2021] VMC 9
•11 August 2021
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
CIVIL DIVISION OF COURT
Case No. L11226182
| Warwick KINKEAD | Plaintiff |
| v | |
| Samantha ROSITANI | Defendant |
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MAGISTRATE: | M A HOARE |
WHERE HELD: | Melbourne (via WebEx) |
DATE OF HEARING: | 3 – 4, 17 & 23 June 2021 |
DATE OF DECISION: | 11 August 2021 |
CASE MAY BE CITED AS: | Kinkead v Rositani |
MEDIUM NEUTRAL CITATION: | [2021] VMC 009 |
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CATCHWORDS – Damages – Mitigation of damage - Motor vehicle collision – Claim for hire-car expenses for 215 days – Damages for loss of use of vehicle as represented by hire-car expenses when vehicle of fault-less motorist damaged or written off - Whether plaintiff had taken reasonable steps to mitigate his damage – Whether reasonable for plaintiff to wait until after write-off payment made by defendant’s insurer to buy replacement vehicle – Impecuniosity or lack of means of plaintiff - Whether reasonable for fault-less plaintiff to opt not to claim under own comprehensive insurance policy which included hire-car benefit.
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiff | Mr G. McDermott | John Curtain & Associates Pty |
| For the Defendant | Mr K. Oliver | Russell Kennedy |
HER HONOUR:
Introduction and Overview
On 11 March 2020, Mr Warwick Kinkead’s 2008 BMW ‘X series’ motor vehicle (‘the vehicle’) was parked in Weatherall Road, Cheltenham. The parked vehicle was struck and damaged by a car driven by Ms Samantha Rositani (‘the collision’).
By complaint dated 21 May 2020, Mr Kinkead, the plaintiff, claimed damages due to the collision which he alleged was caused by the negligent driving of Ms Rositani, the defendant. The vehicle was a write-off. Mr Kinkead claimed (among other things) the write-off value of the vehicle and hire-car expenses.
In its defence dated 10 July 2020, the defendant admitted liability. On 23 September 2020, Ms Rositani’ s insurer (‘RACV’) paid an amount of $24,600 to Mr Kinkead via his solicitors representing the write-off value of the vehicle (‘the write-off payment’).
At hearing, the sole issue for determination related to Mr Kinkead’s claim for hire-car expenses. The sum claimed for hire-car expenses was $33,325 (being 215 days at a rate of $155 per day).
At the time of the collision, the vehicle was comprehensively insured by RACV. It was not disputed that Mr Kinkead’s comprehensive policy included provision of a hire car (with some conditions). However, Mr Kinkead opted to pursue a claim against the ‘at fault’ driver rather than to claim under his own policy. In essence, the defendant contended that in taking this course of action Mr Kinkead had not acted reasonably and had failed to mitigate his damage. The defendant took issue with the duration of the hire car claim (on various grounds) as well as the daily rate.
The hearing proceeded over four days. Mr Kinkead gave evidence as did Ms Suzanna Varvapselis, director of Mainstream Rentals. The defendant called two insurance officers, Mr Phillip Crompton and Ms Frances Gilchrist, as well as Ms Jenelle Dynon, an employee of Hertz.
Mr Kinkead’s evidence-in-chief
Mr Kinkead’s evidence (a summary adopted under oath)[1] was as follows:
[1] Rule 40.02 (20(b) of the Magistrates’ Court General Civil Procedure Rules 2020
(a) On the day of the collision, his partner (who was then 8 months pregnant) had parked the vehicle in order to attend a medical appointment. After the collision, it was apparent the vehicle was undriveable and it was towed to Mr Kinkead’s Fawkner address.
(b) At the time of the collision, Mr Kinkead had no other vehicles registered to his name and no other car available to him. A chef by occupation, he needed a car to travel to and from work (and to transport equipment such as kitchen knives). Additionally, a car was needed for family reasons, especially with his partner about to give birth, for attending medical appointments, for household shopping and so on.
(c) Shortly after the collision, Mr Kinkead telephoned Ms Rositani’s partner to exchange further details. On either 11 or 12 March, he made a brief telephone call to RACV, as his comprehensive insurer, about the collision. He was told that, as he was not at fault, he would be ‘better off’ making a claim against the ‘at fault’ driver rather than under his own policy. He followed that advice.
(d) His understanding was that, had he claimed under his own policy, there would have been deducted from any pay-out, the remaining eight or nine monthly instalments of the annual premium. He didn’t know whether his ‘no claim’ bonus would be impacted. He did know that if he claimed under his own policy, he would be responsible for stamp duty and transfer fee. He had no awareness of whether his policy was for ‘agreed value’. He did not know that he was entitled to a hire car had he claimed under his own policy.
(e) Within two days, the vehicle had been assessed as uneconomical to repair.[2] After a salvage tender process, Mr Kinkead received a cash sum of $3,500 (‘the salvage sum’) and disposed of the vehicle.
[2] Fair Go Assessing Assessment Form dated 13 March 2020
(f) On 20 March 2021 a letter of demand was sent to Ms Rositani. On 31 March 2021, a further letter of demand was sent to RACV, as Ms Rositani’s insurer. Both letters included documents regarding the assessment and the salvage.
(g) Within weeks of the collision, Mr Kinkead was laid off by his employer due to COVID-19 restrictions. At some stage, he began receiving government support (the ‘Job Keeper’ allowance). He could not afford to buy a permanent replacement vehicle before being paid out. His partner was on parental leave due to the birth of the baby within weeks of the collision.
(h) On 12 March 2021, Mr Kinkead took possession of a hire-car (a Toyota Corolla) through an accident hire car company, Mainstream Rentals. He had never rented a car before and thought the rate of $155 per day was reasonable as it included insurance, zero excess, roadside assist and a baby capsule. At some point, he made enquiries with a market hire car company (Avis) to arrange a hire car, but was told he needed a credit card (which he did not have) nor did he have funds for an upfront bond.
(i) On 23 September 2020, his solicitors received the part pay-out sum on his behalf.
(j) On 13 October 2020, he took possession of permanent replacement vehicle which had been used by him and his family ever since (a Jeep).
(k) On 13 October 2020, the hire car was returned.
Cross-examination of Mr Kinkead
Mr Kinkead no longer worked as a chef. His current occupation (and had been for the past 8-10 months) was tradesman. At the time of the collision, he lived partly with his partner (in Pascoe Vale) and partly with his mother (in Fawkner). The reason for that he was then still attending work as a chef and he was fearful about exposing his partner to COVID-19.
After the collision, he had engaged the services of Daniel’s Recovery, a ‘one-stop shop’, who arranged the towing, the damage assessor, the salvage tender and the hire car. Mr Kinkead saw the assessor’s report of 13 March 2020 within a day of two. The decision to salvage was taken within one to two weeks. The salvage sum was spent on household expenses including for the new baby.
In December 2019, Mr Kinkead had renewed his RACV comprehensive insurance policy, although he could not recall receiving or reading the renewal letter. His mail came to his mother’s address as she handled a lot of paperwork for him. He was ‘a bit dyslexic’ and if he had trouble reading documents, he asked for his mother’s help. RACV’s renewal letter dated 16 November 2019 (‘the renewal letter’) stated that the vehicle had an ‘agreed value’ of $31,700. The renewal letter stated on the first page, under a heading ‘Benefits to keep you moving’: ‘Your policy covers a hire car for you if you’re not at fault in a collision, and you can provide the details of the driver who was at fault’.
Mr Kinkead did not dispute he could have claimed under his own policy. He opted not to do so based on what he was told when he rang the RACV. He didn’t know (and it didn’t occur to him) that he might have been better off claiming under his own policy given the ‘agreed value’ of $31,700.
As for the phone-call to the RACV on 11 or 12 March 2020, Mr Kinkead could not recall whether he spoke with a male or female person (only that the person might have had an accent). He told the person his name and date of birth. He explained how the collision occurred and gave the other driver’s details. He mentioned having a comprehensive policy but did not given the policy number. He did not ask whether it was for an ‘agreed value’. He made this call from his mobile phone. He later conceded he could have made the call from four other phone numbers including his mother’s or brother’s phones. He provided these numbers in cross-examination. He could not explain why RACV had no record of a call from any of numbers provided (other than one for roadside assistance from his brother’s phone for his brother’s vehicle). When asked why his memory was unclear about the phone call, he said it was due to a combination of the new baby and the stresses of the pandemic.
Mr Kinkead corrected his summary of evidence saying the replacement vehicle was not a Jeep, but a Ford Ranger (‘the Ford Ranger’). The explanation was that he misunderstood what was said. The Ford Ranger was purchased for $12,500 (including registration and stamp duty) from an acquaintance, Mr Ilias El Khoury. Mr Kinkead had some work done on the vehicle then obtained a roadworthy certificate. There was a brief period of driving the Ford Ranger without a roadworthy certificate.
Mr Kinkead was asked to explain a signed VicRoads transfer history form that recorded that the Ford Ranger was acquired by him on 19 February 2020 from ‘Construction Management’. He said that information was incorrect. He didn’t acquire the Ford Ranger until about November or December 2020. Mr El Khoury had told him he was employed by Construction Management up until 19 February 2020. On that date, Mr El Khoury acquired the Ford Ranger from his employer. Mr Kinkead did not dispute he signed the VicRoads document knowing it contained false information. He did this at Mr El Khoury’s request because he was getting a cheap car and to help out Mr El Khoury who wanted to avoid extra stamp duty. Mr El Khoury had since died and a Facebook memorial page was produced to verify that.
Mr Kinkead agreed the write-off payment landed in his bank account on 23 November 2020. There was a delay due to him misplacing the first cheque sent to him on around 9 November 2020. He was unaware his solicitors had received the write-off payment on or around 23 September 2020.
Mr Kinkead did not recall making a phone call to RACV on 5 March 2020 about an overdue premium instalment for his comprehensive policy (‘the 5 March phone call’). He initially denied telling the RACV representative that his partner had purchased another car, an Alfa Romeo. Later, he conceded it was possible he had told RACV that. He also disputed that he would have referred to having three bank accounts. The Court then heard a recording of the 5 March phone call in which Mr Kinkead was heard discussing an overdue premium instalment. Mr Kinkead identified himself on the call. He is heard to say on the call that: (a) the direct debit didn’t go through due to his account being overdrawn; (b) he had three bank accounts; (c) they needed insurance as his partner had just bought a 2002 Alfa Romeo vehicle (‘the Alfa Romeo’).
The Alfa Romeo purchase hadn’t gone ahead because he and his partner couldn’t obtain finance. The provisional insurance was cancelled on 20 April 2020.
As for his bank accounts, Mr Kinkead had two accounts in his name. His partner and mother both had access to these accounts. There was a third bank account which was in his partner’s name (‘the third account’) over which he had no access nor control. His partner, who managed their joint finances, regularly moved monies between his two accounts and the third account. Mr Kinkead agreed it was he who made the Sports Bet transactions shown in the statements. His gambling was the reason why his mother and his partner had access to his two accounts and why his partner moved funds into the third account. This was to preserve funds for the best interests of him and the family. This situation had been going on ‘for years’. As for the balance of the third account at the time of the hearing, he said there was not much in it. Mr Kinkead could not explain why premium instalments had continued to be debited for the comprehensive policy on six or seven occasions after the vehicle was written-off. When on a couple of occasions, the payment ‘bounced,’ the debit was repeated.
Re-examination of Mr Kinkead
Mr Kinkead only became aware of the Ford Ranger being available to purchase after the write-off payment had been made. He denied taking possession of it before that time and, had he done so, he would have taken out insurance on it which he had not done.
Ms Varvapselis’ evidence
Ms Suzanna Varvapselis, the director of Mainstream Rentals, said the hire-car rate of $155 per day was inclusive of the following: GST, roadside assist, unlimited kilometres, window/tyre cover, administration fees, insurance (with a zero excess), drop and pick up; a baby capsule; allowance for an additional driver. In cross-examination, she said her rates were competitive especially given all the inclusions. She did at least monthly comparisons of credit hire car companies (such as Avis, Hertz and others which had fluctuating rates) and Mainstream’s rates were cheaper overall. Mainstream’s rates were also cheaper overall compared to other accident hire-car companies such as Right to Hire. Ms Varvapselis said she would have compared rates 21 or 22 times since September 2019.
Mr Crompton’s evidence
Mr Phillip Crompton, a customer relations officer with IAG (group insurer of brands such as RACV), had 20 years’ experience in motor vehicle insurance claims. He described the process that would have followed had Mr Kinkead opted to claim under his own policy. A claim number would be generated once Mr Kinkead confirmed the other driver’s details. Given the ‘straight-forward’ nature of the collision, Mr Kinkead would have been informed immediately by RACV that this it was ‘a fault-less claim with no excess.’ He would have been told he was entitled to have the vehicle towed. No upfront payments would have been required. Any amounts ultimately payable would be deducted from the pay-out figure once the claim was finalised. The premium would not have been impacted as Mr Kinkead was not at fault.
As for the hire-car benefit, Mr Crompton was ‘100 per cent certain’ that, under Mr Kinkead’s policy, where the policy-holder was not at fault, RACV would have offered a hire-car. This was a standard benefit. Initially, he said that information was not contained on the annual certificate of insurance, but only in the relevant product disclosure statement. Later, he clarified that policy-holders were informed of the hire-car benefit in renewal letters (such as the renewal letter to Mr Kinkead).
The time-frame for RACV assessing and paying out on a ‘total loss’ claim could vary. Data was produced to show that the average number of days taken by RACV to pay out on a total loss claim was 33 days (based on a data set of 1,440 claims). However, as Mr Kinkead had not claimed under his own policy, RACV could not inspect the vehicle prior to salvage, so the process was protracted. AAMC had eventually assessed the vehicle for RACV and considered it a ‘total loss’.
RACV and IAG retained electronic records of all incoming telephone calls. Searches of RACV and IAG systems for the 12 months prior to June 2020 revealed no incoming calls from any of the phone numbers provided by Kinkead. The only search results were the 5 March phone call and a call on 12 March 2020 for roadside assistance by Mr Kinkead’s brother for his own vehicle.
The hire-car companies used by RACV were Avis, Thrifty and Budget. When asked whether those required a credit card, he said a debit card could also be used. A letter was produced from Thrifty dated 3 June 2020 stating that a debit card would be acceptable. When asked about the cost of hire-car insurance, his belief was the only cost to the policy-holder was a $1 fee on a credit or debit card.
In cross-examination, Mr Crompton was asked to explain the considerable delay between liability being admitted in the defence of 10 July 2020 and the write-off payment on 23 September 2020. Mr Crompton did not dispute that within a month of the collision RACV had information regarding the salvage including full colour photographs of the damaged vehicle. He disagreed that 136 days was an inordinate amount of time between receiving the information and making the write-off payment. When demands came from solicitors and the vehicle had already been salvaged, information needed to be reviewed carefully. When asked whether a vehicle being subject to finance might impact on a policy-holder’s decision to claim under their own policy, Mr Crompton conceded there were reasons why people might not choose to make a claim. He also conceded it was not unusual for an insured person to call RACV seeking information about whether or not to make a claim. He agreed that an insured person might make a ‘judgement call’ which might be either considered a ‘good call’ or a ‘bad call’ and that you cannot force people to proceed with a claim.
Ms Gilchrist’s evidence
Ms Frances Gilchrist, RACV member relations officer, had extensive experience with claims procedures. She had conducted the system searches for phone calls requested by Mr Crompton. She was unaware of any systems failure that would mean the search results could be incomplete. She confirmed the only results for the numbers provided were the 5 March phone call and Mr Kinkead’s brother’s 12 March call for roadside assistance. In cross-examination, she said she couldn’t say that whether the system was completely fool-proof or whether calls could be mis-filed or not recorded. When pressed on whether she had ever experienced that, she conceded she had, but not for a long time.
Ms Dynon’s evidence
Ms Jenelle Dynon, a receptionist/administration officer employed with Hertz, produced three Hertz hire-car invoices for Toyota Corolla vehicles for around the time of the collision. A daily fee of $86.89 was a typical indication of the rate Hertz would have offered. Rates generally dropped with longer rental periods. Major market competitors were Avis, Budget, Thrifty and Europcar. In cross-examination, Ms Dynon disputed Hertz only hired out cars to customers with a credit card. Hertz would also take a debit card. However, if a debit card was used, Hertz would charge a $200 bond and ‘run a check’ to ensure the debit card had adequate funds. If funds were not available on the debit card, the car would not be hired out.
Legal Principles
The legal principles that apply to this case are as stated by Bell J in the Victorian Supreme Court decision of Fallon v Johnson.[3] Where a plaintiff suffers loss due to their motor vehicle being written off in a collision due to the negligence of the defendant, the ordinary principle that damages are compensatory applies, as does the ordinary principle that the plaintiff must mitigate their damage[4]. It is well-established that the cost of hiring a replacement vehicle, when needed, can represent the element of damages relating to loss of use of the damaged vehicle[5].
[3] [2018] VSC 273 at [19] onwards
[4] Ibid at [22]
[5] Ibid
The evidentiary onus of quantifying and proving the loss lay with the plaintiff. As for the period claimed for the loss of use of the vehicle, the plaintiff must establish the beginning, end and duration of the loss of use as caused by the defendant’s negligence. The extent of the actual compensation for the loss is not loss of money but loss of use being the inconvenience of being without a vehicle.
On the other hand, the onus of proof as to the plaintiff’s failure to mitigate his loss rests on the defendant[6]. The legal principles relating to mitigation were as stated by Garde J in Portbury Development Company Pty Ltd v Ottedin Investments Pty Ltd and adopted by Bell J in Fallon v Johnson follows:
(a) there is in fact no duty to mitigate loss – rather, damages are reduced to the extent that the plaintiff has not acted reasonably;
(b) the onus of proof is on the defendant to show that the plaintiff has not acted reasonably in minimising loss arising from the defendant’s breach of contract;
(c) the defendant must prove the extent of the plaintiff’s failure to minimise loss, i.e., the amount of the plaintiff’s loss that was occasioned by the plaintiff’s failure to act reasonably;
(d) a high standard of conduct is not required of the plaintiff, because the defendant is a wrongdoer; and
(e) a plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct, so long as it was reasonable for the plaintiff to act in the way that he did[7].
[6] McGregor on Damages (18th ed) at [7-019]
[7] [2014] VSC 57 at [158]
The test of what is reasonable is an objective one, but it is to applied in a way that takes the factual circumstances of the particular case into account.[8] On the question of reasonableness, in Fallon v Johnson, Bell J also cites with approval the following statement of Pritchard J of the Supreme Court of WA: ‘Accordingly, in determining whether a plaintiff has acted reasonably … it will be appropriate, for example to take into account, in the objective determination of that question the fact that the plaintiff is impecunious and therefore unable to pursue a course of action which might otherwise have mitigated his or her damage’. [9]
[8] Ibid at [23]
[9]Ibid at [23] citing Hardie Finance Corporation Pty Ltd v Ahern [No 3] [2010] WASC 403 at [767], [770]
As for what was mean by ‘impecunious,’ the defendant submitted (and the plaintiff did not take issue with this) that the term did not mean literally penniless. Rather, it encompassed what was said by the House of Lords in Lagden v O’Connor in relation to the obligations of motor insurers regarding hire-car expenses: “There remains the difficult point of what is meant by ‘impecunious’ in the context of the present type of case. Lack of financial means is, almost always, a question of priorities. In the present context what it signifies is inability to pay car hire charges without making sacrifices the plaintiff could not be expected to make’[10].
[10] [2004]1 AC 1067 at [9]
In this case, beyond those accepted general principles, there was an important divergence between the parties. As I observed at the outset of these reasons, a key plank of the mitigation defence turned on whether, as a matter of law, the principles of mitigation could extend to requiring Mr Kinkead to claim on his own comprehensive insurance policy.
In submitting that Mr Kinkead had acted unreasonably in opting against claiming under on his own policy, Counsel for the defendant referred to the following passage in McGregor on Damages: ‘A further issue mentioned but not argued [in the 2014 English Court of Appeal’s decision of Umerji v Khan[11]] was whether the rules of mitigation required the claimant to claim on his insurance policy and with the proceeds buy a replacement car. The Court said, that while this was an interesting question of some importance, it was for another day[12]. That day had arrived in the case of Mr Kinkead, according to Counsel for the defendant.
[11] Umerji v Khan [2014] Civ 357
[12] (21st ed) at [37-028]
There is of course, a long line of established authority, as the plaintiff submitted, to the effect that a plaintiff’s insurance arrangements cannot be taken into account to reduce a tortfeasor’s liability[13]. This line of authority which commenced with the English decision of Bradburn v Great Western Railway[14] is set out in the judgement of Mandie JA in the Victorian Court of Appeal decision of Saric v Tehan.[15] The leading case in Australia, as Mandie JA observes, is the High Court decision of National Insurance Co of New Zealand v Espagne (‘Espagne’)[16]. The High Court considered what principle should govern the question of whether a particular benefit ought or ought not be taken into account in assess damages. The Court decided that, in assessing damages in a personal injury action caused by negligence, the award of a statutory invalid pension was to be disregarded. The following passage contained in the reasoning of Dixon CJ is cited by Mandie JA in Saric as follows:
So, in a contract of accident insurance; where in the absence of special stipulation the insurer will not succeed by subrogation or otherwise to the insured’s right of recourse against others in the case of injury by their negligence. But for the reason given it does not follow that the negligent parties can treat the insurance as operating in relief of their liability. It was effected by the money of the plaintiff for his own benefit in the event of an accident, a benefit both independent of and cumulative upon whatever right of redress against others might arise out of the circumstances of the accident.[17]
[13] Ibid at [9-167]
[14] {1874} LR10Ex1;[1845] EngR538
[15] [2011] VSCA 421
[16] (1961) 105 CLR 569
[17] Ibid at 573 cited by Mandie JA at [27]
Numerous English decisions were referred to by both Counsel. In Clarke v McCullough, the principles for determining of credit hire-car cases includes reference to the principle of res inter alios acta or the legal principle that a tortfeasor cannot require the injured party to invoke his contract with his insurers in order to mitigate his loss[18]. In the English Court of Appeal decision of Bee v Johnson, The Court stated: ‘Ever since Bradburn v Great Western Rly Co, defendants have had to accept that a claimant’s insurance arrangements are irrelevant and cannot be prayed in aid to reduce their liabilities.[19] The facts there, while different to the present case, concerned a claim for hire-car costs brought as a subrogated claim by the claimant for the benefit of his insurer.
[18] [2012] NIQB 104 at[19], [20]
[19] [2007] 4 All ER 791; [2007] EWCA Civ923
In Australia, there is a line of authority that deal with the extent to which the Espagne principles are to be applied in cases outside the personal injury sphere[20]. For example, in the Full Federal Court decision of Monroe Schneider Associates (Inc) & Anor v No 1 Raberem Pty Ltd & Ors,[21] Burchett J (with whom O'Loughlin J agreed) said: In my view, the principle of Espagne is applicable generally, and not merely as a rule in actions for damages for personal injuries.[22]
[20] See Thomas v Powercor Australia Limited [2011] VSC 586 at [49] to [51]
[21] (1991) 104 ALR 397.
[22] Ibid at [421].
The broad proposition derived from the authorities is that where a benefit is conferred upon a plaintiff (not intended to release the wrongdoer of his or her obligations) then such benefit should be ignored in the assessment of damages[23].
[23] Thomas v Powercor Australia Limited [2011] VSC 586 at [51]
The plaintiff referred also to English Court of Appeal decisions in which a plaintiff is found to have acted reasonably in not lodging a claim against his or her own insurer. In Martindale v Duncan[24], the claimant had acted reasonably in delaying vehicle repairs until repairs were approved. In Mattocks Mann[25], the claimant had acted reasonably in hiring a car for as long as it took for the defendant to pay out on the claim. According to Counsel for the defendant, these cases were distinguishable on the facts.
Defendant submissions
[24] [1973] 1 WLR 574
[25] [1993] RTR 13
The extent of the plaintiff’s compensatory damages had to be confined to that which flowed from the defendant’s negligence. The defendant was only required to compensate Mr Kinkead for loss of use from the time he knew the vehicle was a write-off to the time within which a plaintiff with reasonable diligence could purchase and source a suitable vehicle. There was no rule of law that the plaintiff may wait to obtain write-off payment before obtaining a replacement vehicle. If the plaintiff establishes that he is ‘legally impecunious’ that will bear upon the duration of the loss. In other words, the plaintiff had alleged, and had the burden of proving, that he didn’t at any material time have means to do other than what he did without making financial sacrifices that he could not have reasonably been expected to make.
Mr Kinkead had failed to discharge the onus of proving a lack of means to purchase a replacement vehicle in advance of receiving the write-off payment. The defendant relied on the following matters in support:
a.Mr Kinkead was not a credible witness. His evidence could not be accepted as reliable as it contained numerous inconsistencies and matters that were simply implausible. This included: adopting a summary that referred to Jeep rather than a Ford Ranger; his denials as to the information provided in the 5 March phone call; and inconsistencies on when the Ford Ranger was acquired;
b.The evidence as Mr Kinkead’s finances was deficient and unsatisfactory. He failed to tender his bank statements. Instead, the defendant had to do this. The bank statements which were produced were only for the two accounts in his name and they did not, therefore, disclose the entirety of cash at his disposal. This was because of the third account. The bank statements disclosed that approximately $28,000 was moved out Mr Kinkead’s two accounts into the third account over a six-month period.
c. Mr Kinkead’s gambling transactions were incongruous with his assertion of impecuniosity and being without means. Over the six-month period for which statements were provided, there were outgoings of $9,967 on wagering with Sports Bet and also credits (with total net losses of about $2000).
d.There was no reason not to presume substantial funds in the third account especially as the balance of the third account was unknown at the time of the collision. An adverse interference should be drawn from Mr Kinkead’s failure to call his mother or partner where there was no suggestion of them being unavailable. The Court could infer neither the mother nor the partner would have assisted the plaintiff’s case as to his financial circumstances.
e.It was a ‘strange decision’ to keep paying premium instalments on his comprehensive policy for several months after the collision. This could not be reconciled with the assertion that Mr Kinkead was impecunious.
f.Mr Kinkead could not be heard to say he was ‘impecunious’ when he had opted not to exercise a contractual entitlement to demand the sum of $31,700 from his insurer (being the agreed value) which he could have received (on Mr Crompton’s evidence) in around 33 days.
Regarding the duration of the loss of use claim, even if the plaintiff was found to be impecunious and lacking means to purchase a replacement vehicle, he had not taken steps to minimise his loss by claiming under his own policy. Whilst it may be Mr Kinkead was not bound to claim under his own policy, nevertheless it did not follow that his decision not to claim has no bearing on the duration of the loss of use claim being attributable to the defendant’s tort.
Objectively considered, Mr Kinkead’s conduct was unreasonable. He would have received larger sum ($31,700) within a shorter period (not remotely approaching 215 days). He would also have had the benefit of a hire-car at the expense of the insurer and would have incurred no charges at all beyond $1. A reasonable person in Mr Kinkead’s circumstances would have made an enquiry of his comprehensive insurer as to the consequences of claiming under his own policy. Mr Crompton’s evidence should be accepted that Mr Kinkead would have been told ‘on the spot’ he was ‘fault-less’ and been offered a hire-car at the insurer’s cost until such time as the vehicle was assessed as a write-off. Also, on the question of rate, no reasonable person, if impecunious, would have chosen instead to rack up a debt in his own name for hire-car expenses at a daily rate of $155.
It was an implausible assertion by Mr Kinkead that he had been misled by an RACV officer into pursuing the ‘at fault’ driver. The evidence of both Mr Crompton and Ms Gilchrist should be preferred as to searches having produced no ‘footprint’ of the alleged call. The improbability of that phone call occurring at all was underscored by Mr Crompton saying an RACV officer should not give advice only factual information (although he did ‘quite properly’ concede he could not say that never happened).
Finally, on rate, the defendant made no criticism of replacement of a 12 year old BMW with a Toyota Corolla. However, the daily rate was excessive. Mr Kinkead needed to establish a need for the whole bundle of services that formed part of the Mainstream Rentals rate. The best evidence regarding what was an appropriate rate was contained in the Hertz invoices produced by Ms Dynon. These did not exceed $86.88 per day. Accordingly, any award of hire-car expenses representing loss of use should not exceed 21 days loss of use (allowing time to source a replacement vehicle) at a rate of $86.88 per day or at most 33 days (being the RACV average for making write-off payments) by that rate.
Plaintiff’s Submissions
In simple terms, due to the negligence of Ms Rositani, Mr Kinkead had been deprived of loss of use of his vehicle. The measure of this loss is the cost of a hire-car, a recognised head of damage. The defendant had failed to discharge the onus of proof that Mr Kinkead had acted unreasonably. In arranging a temporary replacement vehicle, Mr Kinkead had availed himself of a credit hire car at a rate that not seriously challenged. His evidence that he had no credit card was unchallenged and he also did have the funds for an upfront bond. A ‘market’ or ‘spot’ hire car arrangement was not within his means and, even if it were, Mr Kinkead was not obliged at law to spend his meagre savings on such an arrangement.
It was untenable to say that Mr Kinkead had not established he lacked the means to buy a replacement vehicle. His evidence in relation to his employment and family circumstances spoke for itself and was unchallenged. The defendant’s criticism of Mr Kinkead in relation to his bank statements was unfounded. He produced all bank statements other than for the third account which was not in his name. It was absurd to speculate wildly about what funds were held in the third account. The reality of Mr Kinkead’s situation was that he lost his job due to the pandemic soon after the collision and was thereafter for some months on Jobseeker. At times the bank statements showed he was overdrawn. The defendant’s submission that a person’s credit should be impugned because of admitting to a gambling problem whilst asserting impecuniosity was objectionable.
The question of whether Mr Kinkead would have been better off or worse off had he claimed under his own policy simply misses the point. Instead, the question is whether he acted reasonably in opting not claim under his own policy. Opting not to claim on his own insurance was not unreasonable and is in accordance with the Espagne[26] principles and the long line established authorities set out in Saric v Tehan[27]. What Mr Kinkead has done is not anticipated the inexplicable and unreasonable delay in receiving a write-off payment after a straight-forward collision.
[26] [1961] HCA 15
[27] [2011] VSCA 421
As for the defendant’s submission that being impecunious, he ought to have relied upon his insurance, Mr Crompton had readily agreed that people are not obliged to claim on insurance. As for the criticism of Mr Kinkead for failing to opt to claim on his insurance thereby taking advantage of the benefit of a free hire car, even Mr Crompton “the expert’ had made an error initially saying it may not have been disclosed in the relevant the product disclosure statement.
Analysis and Findings
This is quite a complicated matter that has arisen out of a very simple collision. In my opinion, the plaintiff’s action must succeed. I shall now turn to my reasons why this is so.
I turn first to whether the plaintiff has established impecuniosity or a lack of means to purchase a permanent replacement vehicle in advance of receiving the write-off payment.
At the hearing’s outset, the defendant objected to the plaintiff either asserting or adducing evidence as to impecuniosity. This was on the basis the plaintiff had neither pleaded impecuniosity in his statement of claim nor by way of reply once the defence of mitigation was raised. On the other hand, the plaintiff submitted there was no authority requiring the plaintiff to plead, or nor to discharge a specific proof of, impecuniosity. After hearing preliminary argument from the parties, I ruled against the defendant. The defendant’s argument had relied upon an English Court of Appeal case of Umerji-v-Khan[28], a decision relating to an interlocutory stage in the context of English civil procedure law which does not bind this Court. Moreover, it is long established that the function of pleadings is to state with sufficient clarity the case that must be met[29]. In my view it was entirely clear from the plaintiff’s prayer for relief that his claim for loss and damage included loss of use of the vehicle in the form of having incurred hire-car expense (for which he would have to establish a need).
[28] Ibid
[29] See for example Gould v & Birbuck & Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490
Weighing the whole of the evidence, it seems to me that the plaintiff has discharged the burden of proof in relation to impecuniosity for the period for which he has claimed loss of use of the vehicle. I now turn to my reasons for that finding. Mr Kinkead’s employment as a chef came to an end within weeks of the collision unexpectedly due to COVID-19 restrictions. He then after a period received the Jobkeeper allowance. His partner was on parental leave with the couple’s baby being born within weeks of the collision. In late 2020 or early 2021, Mr Kinkead did intermittent labouring work. The evidence was that over a six-month period (from late March to late October 2020) a net total of about $28,000 was transferred out of Mr Kinkead’s two accounts into the third account with about $3,000 coming back into them from the third account. Whilst the plaintiff’s savings may not have been ‘meagre’ (as Counsel for the plaintiff submitted), the test is not, as the defendant conceded, being penniless. It seems to me, on the evidence of the bank statements, Mr Kinkead was very far from being in situation where he could have outlaid the sum required to purchase a replacement vehicle without sacrifice. I reject the submission of the defendant that the plaintiff’s disclosure as to his financial circumstances was deficient. As the plaintiff submitted, he produced six months’ of bank statements (give or take a few days at either end of the period) for the two accounts in his name. I do not draw any inference from his failure to produce his partner’s bank accounts (which were not in his name and not his to produce) nor in relation to his failure to call her or his mother. I agree with Counsel for the plaintiff that it is a matter of unfounded and pure speculation as to the balance of his partner’s account. I say that particularly when the Court did have before it evidence of what was going into that account from Mr Kinkead’s two accounts.
As for the continuing direct debits of the premium instalments, weighing the whole of Mr Kinkead’s evidence, I find this was a matter of oversight and not of itself inconsistent with a finding of impecuniosity.
It is true that Mr Kinkead’s credit came under heavy attack by the defendant with some justification. It is also true that, under pressure of sustained cross-examination, his evidence was sometimes inconsistent and inaccurate, as the defendant submitted. A damaging matter in terms of credit related to the signed VicRoads form which contained false information. Whilst this was clearly dishonest, I accept as plausible his explanation he felt obligated to help Mr El Khoury avoid two lots of stamp duty given he was getting a ‘cheap car’ from him. I would say that this conduct, which I of course denounce, does add to my impression of Mr Kinkead as being a person in straightened financial circumstances.
Weighing his evidence as a whole, it was my impression overall that Mr Kinkead was endeavouring to answer the questions put to him as accurately as possible. For the most part I found him to be a cooperative, if not an especially articulate, witness. He was quite open (although somewhat embarrassed) about his habitual gambling as being the reason for his mother and partner essentially controlling his finances. Examples of his cooperation were: readily providing all alternative phone numbers from which he may have called RACV; producing the Facebook page to verify the death of Mr El Khoury and making concessions against interest such as having driven the Ford Ranger without a roadworthy certificate. Inevitably, with the lapse of time, recollections of details of events and circumstances tend to fade. I found entirely plausible his explanation for his poor recall as being ‘due to a combination of the new baby and the stresses of the pandemic’, On the issue of the alleged phone call with RACV about the collision, weighing the whole of the evidence, I find it unlikely Mr Kinkead made a phone call to RACV on 11 or 12 March. Mr Crompton and Ms Gilchrist were credible witnesses particularly in relation to the searches undertaken regarding incoming calls. I found it persuasive that within the parameters of the searches, two results were produced: namely, the 5 March call; and the Mr Kinkead’s brother’s 12 March call for roadside assistance. I consider it likely that had such a call been made as Mr Kinkead asserted there would have been a ‘footprint’ or record of it.
Weighing the whole of Mr Kinkead’s evidence, I find it likely that he did talk to somebody on the phone soon after the collision who advised he would be better off pursuing the ‘at fault’ driver rather than claiming under his own policy. Whilst it is not necessary for me to decide, it is likely Mr Kinkead had this conversation with somebody connected with Daniel’s Recovery, the ‘one-stop’ shop who organised the tow-truck, the assessment, the salvage tender and pay-out and the car rental.
Having found that the weight of evidence supports Mr Kinkead being impecunious, I further find this circumstance continued for the entirety of the period claimed for loss of use of the vehicle. I have already set out my finding in relation to his circumstances for the six-month period to October 2020.
I now turn to the question of Mr Kinkead’s need for a replacement vehicle. Whilst Counsel for the defendant submitted that ‘need’ was a live issue, I find the weight of evidence supported Mr Kinkead having an immediate and ongoing need for a replacement vehicle. Initially this was to attend work and transport his equipment (including cooks’ knives) and after he lost his job, a car was required for family and household reasons given the new baby, for medical and hospital appointments, and to obtain supplies and so on. His evidence was essentially unchallenged on there being no other vehicle available. Weighing the totality of the evidence, I find that Mr Kinkead did not take possession of the Ford Ranger until sometime on or after 13 October 2020 as I accept as likely that had he done so at any earlier point he would have arranged insurance.
Having found that Mr Kinkead has discharged the burden of proof that he was in fact impecunious, I now turn to consider whether the defendant has discharged the legal and evidentiary onus of proof in relation to mitigation.
In contending that Kinkead has not acted reasonably, the defendant’s main grounds of attack were that he had unreasonable in:
a. not obtaining a permanent replacement vehicle until after he received the write-off payment;
b. opting not to claim under his own comprehensive policy;
c. entering into an arrangement with an accident credit hire car company.
Of course, in relation to reasonableness, I must apply an objective test in accordance with the principles referred to previously in these reasons. In my view, a reasonable person in the situation in which Mr Kinkead found himself, would not have outlaid for a permanent replacement vehicle when he or she was out of work, had a partner not working, had a new baby and whilst in receipt of a government allowance and the only wage-earner in the family. Additionally, and again in assessing objectively Mr Kinkead’s situation in this regard including the whole of the evidence as to his financial circumstances, I find that a reasonable person would not have outlaid funds for a permanent replacement vehicle given:
a. the vehicle had not been owned outright and was still subject to finance;
b. the attempted purchase of the Alfa Romeo just prior to the collision had to be abandoned as finance could not be obtained;
c. the two bank accounts were in overdraft at various time as was apparent from the failed instalment direct debits on the comprehensive policy; and
d there was no access to credit via a credit card.
I find that, considered objectively, Mr Kinkead lacked the financial means to purchase a permanent replacement vehicle in advance of receiving the write-off payment without making sacrifices he could not, as a matter of law, be expected to make. I find that he acted reasonably in not obtaining a permanent replacement vehicle until after he received the write-off payment as he otherwise very well would have had to make sacrifices. In arriving at this finding, I am of course also guided by the principle that the court does not apply a high standard of reasonableness in relation to mitigation of damage. As Bell J observed in Fallon v Johnson in relation to the defendant’s submissions there: ‘The court does not approach the application of the reasonableness standard as a notional accounting exercise. It is removed in time and context from the situation facing the injured party, of whom prudence but not perfection is expected. The pros and cons of an alternative course of mitigatory action are not nicely weighed on the scales as if the court were making a decision on the merits’[30].
[30] Ibid at [30]
I turn now to whether Mr Kinkead acted unreasonably in electing not to claim under his own comprehensive policy. In this regard, I prefer the submissions of counsel for the plaintiff. In my view, a finding that Mr Kinkead has, a matter of law, acted unreasonably in not minimising loss by claiming under his own policy would be inconsistent with the long line of authority to which referred previously. I am not simply persuaded that it would be appropriate for me to find that Mr Kinkead’s ‘protection as a consumer should be diverted to the tortfeasor’.
Of course, as Windeyer J observed in Espagne, ‘…it is not, I think, possible, to enunciate an exhaustive rule for all parts of this vexed topic. And the questions that arise can never be determined in the abstract, each must depend on the terms of the particular contract, pension scheme, charitable benefaction or statute governing the benefit conferred’[31]. It is appropriate, therefore, that I nevertheless give careful consideration to the reasonableness (or otherwise) of steps taken or not taken by Mr Kinkead in which included opting not to claim on his own policy.
[31] Ibid at 599-600, cited by Mandie JA in Saric at [29]
It is plain from the renewal letter of 19 November 2020 that had Mr Kinkead claimed under his own policy he would have minimised his loss as he would have had the benefit of a hire car at the insurer’s cost. The defendant, in urging that I find the plaintiff had acted unreasonably in not claiming under his own policy, contended that it was not seeking to obtain a benefit directly from an application of the Espagne principles. Rather, it was submitting that, considered objectively, a reasonable person would have made the enquiry of his or her comprehensive insurer. Then, upon weighing up what flowed from that (a hire-car essentially at the insurer’s expense and an ‘agreed value’ of $31,700 paid out on average within 33 days), a reasonable person would have proceeded with a claim for indemnity under his own policy.
It seems to me that whilst this may appear, as the defendant submitted, a preferable course of action in hindsight, I am bound, as I have observed, to apply the the legal principles referred to previously in Portbury[32] and as adopted in Fallon[33]. In particular, because the defendant is a wrongdoer, a high standard of conduct is not required of the plaintiff. There is also no question that a plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct, so long as it was reasonable for the plaintiff to act in the way that he did. Furthermore, I must consider the steps taken (or not taken) by the plaintiff, objectively, taking into account the factual circumstances of the particular case.
[32] [2014] VSC 57 at [158]
[33] [2018] VSC 273
The defendant’s submission, in essence, is that Mr Kinkead could not be held to have acted reasonably because the defendant has pointed to other and more beneficial conduct as a result of which the plaintiff would be ‘better off.’ However, that (claiming under his own policy) is not the judgement Mr Kinkead made. Of course, as I have said, the test I must apply is not subjective, but an objective one. The evidence was that had Mr Kinkead made a claim under his own policy he would have been liable for: the balance of the annual premium; other deductions such as the transfer fee and stamp duty (as well as the setting off any amount owing to the finance company which of course he would have been liable for regardless). The evidence is that Mr Kinkead was unaware that he was entitled to the benefit of a hire-car at the insurer’s expense. As for whether it was reasonable not to be aware of that, as counsel for the pontiff noted, even Mr Crompton, an expert, expressed some uncertainty (at least initially) as to whether there was a hire-car benefit under Mr Kinkead’s policy and what the terms might have been. Ultimately it was a matter of making a judgement call as Mr Crompton conceded. As he also said, there were many reasons why a person might not choose to make a claim which might be a ‘good call’ or a ‘bad call’.
In my view, considered objectively, a reasonable person in Mr Kinkead’s situation following a collision in which he was clearly fault-less, would have opted to pursue the ‘at fault motorist’ rather than to claim under his own policy with the various deductions referred to previously. It seems to me that it was open to a reasonable person in Mr Kinkead’s situation to decide that a proper course of action in minimising their loss was to pursue, proactively and promptly, the ‘at fault’ driver. The fact that I have found against Mr Kinkead on the question of whether he obtained advice from an RACV representative is of minimal weight in my view. I did find it likely that he received advice that would be better off going after the at fault driver from someone with whom he spoke about the collision. Again, I refer to the statements of law adopted by Bell J in Fallon v Johnson in relation to judgements made and steps taken in circumstances such as Mr Kinkead’s: that errors of judgment may be committed in this as in other affairs of life; and that it is often easy to criticise steps taken but the criticism does not come well from those who themselves have been created the emergency.[34]
[34] Ibid at [24]
As for what Mr Kinkead did do, the evidence was that having been established that the vehicle was a total loss, Mr Kinkead took the following steps: within ten days, he had caused a letter of demand dated 20 March 2020 to be sent to the defendant. On 3 April 2020, he followed that demand with a receipt evidencing the monies paid to him for the salvage of the vehicle. On 9 April 2020, colour photographs of the damaged vehicle were sent to RACV which would have allowed for a desk-top assessment of the damaged vehicle. He made enquiries of Avis, a market rental company, and found he needed a credit card or funds upfront. As Counsel for the plaintiff submitted, what Mr Kinkead did not do was anticipate the protracted period that would elapse prior to RACV making a write-off payment on behalf of its ‘at fault’ insured. Although the accident circumstances were entirely straightforward, liability was not formally admitted by RACV until 11 July 2020 when it filed its notice of defence (a period of 122 days). Further, the write-off payment was not made to Mr Kinkead’s solicitors until 23 September 2020 (a period of 196 days). However, it is, of course, in cases of this kind, not the conduct of the ‘at fault’ motorist’s insurer that is under scrutiny but that of the fault-less motorist.
Finally, I turn to consider whether Mr Kinkead acted unreasonably in relation to utilising an accident credit hire-car company. In relation to this matter, I refer again to my findings in relation to impecuniosity which are relevant here. I accept, as I have said, that he made enquiries with Avis but could not proceed as he did not have a credit card and did not have the funds for an upfront bond. The evidence was that from 12 March 2020 Mr Kinkead took possession of a hire car having entered into an arrangement with Mainstream Rentals. I agree with the plaintiff’s submissions that Ms Varvapselis’ evidence on rate was not seriously challenged. On the evidence of Ms Dynon, whilst a debit card could be utilised (as opposed to a credit card), she did say that upfront funds would be required by way of a bond.
Conclusion
For the reasons stated, I find that the plaintiff is entitled to the relief claimed (in addition to the write-off payment previously paid): $33,325 being 215 days by $155 plus interest on that amount. As for final orders, I will hear from the parties by way of submissions or by way of filing of minutes of proposed consent orders on a date to be fixed.
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