Maroubra Auto Refinishers Pty Ltd & Baker v Power - [2006] NSWLC 44

No judgment structure available for this case.

Local Court of New South Wales

CITATION: Maroubra Auto Refinishers Pty Ltd & Baker v Power [2006] NSWLC 44

JURISDICTION: Civil

PARTIES: Maroubra Automotive Refinishers Pty Ltd
Peter Douglas Baker
Nathan Power

FILE NUMBER: 144/04

PLACE OF HEARING: Downing Centre Local Court

DATE OF DECISION:
12/18/2006

MAGISTRATE: Magsitrate B A Lulham

CATCHWORDS: Damages - Motor vehicle property damage claim - The measure of damages - Whether plaintiff who is paid cost of repairs is entitled to indemnity or whether onus is on plaintiff to prove cost of repairs are fair and reasonable - Evidence - Whether loss assessor employed by defendant falls within definition of expert witness - Whether loss assessor instead able to give expert evidence - Torts - Whether action to recover damages in negligence to recover repairs to motor vehicle is capable of assignment.

LEGISLATION CITED: Uniform Civil Procedure Rules 2005. Rule 31.2(3)
Uniform Civil Procedure Rules 2005. Schedule 7

CASES CITED: Maroubra Auto Refinishers Pty Ltd v David Christian Johnson (2004) NSWLC 3
Poulton v The Commonwealth & Ors (1952-1953) 89 CLR 602.
Maroubra Automotive Refinishers Pty Ltd v Paul Koulos (6336/05 12 December 2005)
Rickard Constructions v Rickards Hails Maretti & Ors. (2004) NSWSC 1041
Monk v Australia & New Zealand Banking Group (1994) 34 NSWLR 148
Auto Panel Beaters and Radiators Pty Ltd v Chantal J Hilderbrant (2004) NSWLC 6
Kirsh Communications Pty Ltd v Jene Engineering Pty Ltd (2002) NSWSC 485
Collins Thompson v Clayton (2002) NSWSC 366
Makita Pty Ltd v Sprowles (2001) 52 NSWLR 705
ASIC v Rich (2005) NSWCA 152
Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) FC AC 157
Keller v R (2006) NSWCCA 2004

REPRESENTATION: Solicitors for Plaintiff: Insight Litigation & Legal Services Pty Ltd
Advocate for Plaintiff: Mr B. Gower (Solicitor)
Counsel for Defendant: Mr K. Manion
Solicitors for Defendant: C.K.B. Partners

ORDERS: Judgment for the second plaintiff in the sum of $32 964.80.

Reasons for Decision

1 On 21 August 2003 Peter Douglas Baker was driving a Jaguar XJ6 sport car, registered number AFF50B south on Southern Cross Drive when the vehicle was hit in the rear by a vehicle owned by Nathan Power. The Jaguar also suffered damage to its front. By sheer coincidence Mr Baker was returning to his home following the final day of a divorce hearing. The vehicle was registered in the joint names of himself and on that day his divorced wife. Mr Baker gave evidence in the matter and it was not in dispute that for the purposes of these proceedings he was the owner of the Jaguar.

2 The vehicle was repaired by Maroubra Automotive Refinishers Pty Ltd. The amount claimed for the repairs was $34,964.80. The defendant’s vehicle was insured with AAMI. Their solicitors filed a Defence and also a Part Confession in the sum of $26,930.20. In relation to the repairs, the amount actually in dispute was therefore $8,034.60. During the proceedings the amount actually in dispute was reduced to $7,444.49 as a result of an error by the defendants.

3 The repairer Maroubra Automotive Refinishers Pty Ltd (hereinafter called ‘Maroubra Automotive’) entered into a Deed of Agreement to Repair and Assign Right to Recover Repairs Costs from Negligent Party with Mr Baker. The original Statement of Claim issued on 28 November 2003 was issued in the name of Maroubra Automotive and sought to recover the amount of the repairs as a debt assigned by Mr Baker to Maroubra Automotive. An Amended Statement of Claim was filed on 21 September 2004 following a Motion filed by the plaintiff seeking an order for Peter Douglas Baker to by joined as a second plaintiff. The order was made on 9 September 2004.

4 In the Amended Statement of Claim Maroubra Automotive sued the defendant alleging negligence by the defendant and relying on the Deed dated 21 August 2003 to enable the first plaintiff to bring the proceedings. In the alternative the Statement of Claim pleaded that the second plaintiff alleged negligence on behalf of the defendant and alleged that the second plaintiff had been put to the expense of repairing the vehicle and sought to recover the amount of the repairs in the sum of $34,964.80.

5 The defendant’s Defence denied that either plaintiff was a proper plaintiff and had standing to bring the proceedings. The defendant denied the assignment and denied that Mr Baker was the owner of the motor vehicle. The defendant admitted liability for the collision and admitted liability for the loss and damage suffered by the owner of motor vehicle AFF50B, but denied that either party had suffered loss and damage as alleged, and denied the quantum of the plaintiff’s claim. In paragraph 13 the defendant did not admit that the whole of the repairs claimed were reasonably necessary to reinstate the vehicle to its pre-accident condition and pleaded in paragraph 14 as follows:

‘The defendant asserts that the repairs which were actually undertaken have reinstated the vehicle to its pre-accident condition.’

6 I have received very helpful submissions from Mr Gower on behalf of the plaintiffs and from Mr Manion on behalf of the defendant. I have taken all of those submissions into account, even if in this judgment I do not specifically refer to all of them. I propose to set out the issues raised by the matter and to generally refer to the submissions when dealing with the issues. There was a lengthy delay in my receiving the submissions. Mr Manion’s were received on about 23 November 2006 and Mr Gower’s on 27 November 2006.

7 It would appear that the resolution of this matter will require consideration of the following issues:

(i) What is the effect of the Deed of Agreement to Repair and Assign Right to Recover Repair Costs from Negligent Party?

(ii) Was it necessary for Mr Baker to prove loss?

(iii) Were Mr Schumak, Mr Wild and Mr Sadgic expert witnesses?

(iv) An assessment of witnesses.

(v) Quantum.

8 These proceedings were originally commenced by Maroubra Automotive issuing a Statement of Claim seeking to sue under The Deed of Agreement to Repair and Assign Right to Recover Repair Costs from Negligent Party (hereinafter called ‘the Deed’) between Maroubra Automotive (repairer) and Peter Baker (customer) dated 21 August 2003. I propose to attach a copy of the Deed to this judgment. After certain recitals, paragraph 1 of the Deed provided as follows:

In consideration of the repairer repairing the motor vehicle and relinquishing and releasing the customer from the costs of the repair to the repairer, the customer assigns to the repairer all its rights at law to recover the cost of the repair from the negligent driver and/or owner of the third party vehicle.

9 In Clause 2 the customer, Mr Baker, covenanted with the repairer:

That the cause of the accident was solely the responsibility of the driver and/or owner of the third party vehicle giving rise to an assignable right of action against the negligent driver and/or owner of third party vehicle for the cost of repair.

10 Clause 4 of the Deed purported to contain an irrevocable appointment by the customer of the repairer as its attorney in relation to the court proceedings.

11 In my view it is not necessary for me to further set out the details of the Deed.

12 The crucial question of course is whether Mr Baker’s right to sue the defendant Mr Power in negligence for the cost of the damage to his vehicle was assignable. That question was considered by Magistrate M. Quinn LCM in Maroubra Auto Refinishers Pty Ltd v David Christian Johnson (2004) NSWLC3. Her Honour was dealing with the same Deed as in this matter. Her Honour reviewed a large number of cases and came to the view, based on the view of the High Court in Poulton v The Commonwealth & Ors (1952-1953) 89 CLR 602 that the right to sue in tort was incapable of assignment. Her Honour expressed the view that even if she was to depart from the principles stated in Poulton, the repairer did not have the required genuine commercial interest to support an assignment.

13 Her Honour Magistrate D.A. Sweeney considered the same Deed in her decision in Maroubra Automotive Refinishers Pty Ltd v Paul Koulas, (file number 6336/05 18th December 2005). In those proceedings Maroubra Automotive were endeavouring to rely on the terms of the same Deed as in this matter to seek recovery from the owner alleging that the owner had breached conditions of the Deed. Her Honour discussed carefully the decision of McDougal J in Rickard Constructions v Rickards Hails Maretti & Ors (2004) NSWSC 1041 a decision which post dated Magistrate Quinn’s decision previously referred to. Her Honour Magistrate Sweeney came to the view that it may be possible for a chose of action in tort to be assigned, provided the basis of the cause of action was commercial and not personal. Her Honour referred to the concept of ‘a genuine commercial interest’ as considered by Cohen J in Monk v Australia & New Zealand Banking Group (1994) 34 NSWLR 148 when he said that what was required was something beyond a mere personal interest in profiting from the outcome of the proceedings, such as an interest by the assignee in the assignor or its business affairs which might be protected by the assignment. Cohen J found that the interest relied upon must exist prior to the assignment.

14 Her Honour, Magistrate Sweeney, found that the repairer’s interest under the Deed was an interest in profiting from proceedings contemplated by the Deed, and not an already existing interest which would meet the test set out in Monk to constitute a genuine commercial interest which would justify the purported assignment. She therefore found that the ‘right’ to recover the costs of repairs of the vehicle was not assignable to the plaintiff.

15 I came to the same decision in a matter of Auto Panel Beaters and Radiators Pty Ltd v Chantal J. Hilderbrant (2004) NSWLC 6. That decision pre-dated the decision of Her Honour Magistrates Quinn and also the decision of His Honour McDougal J in Rickard Constructions. I have considered carefully Rickard Constructions and I agree with the views expressed in relation to that decision by Her Honour Magistrate Sweeney.

16 I am satisfied that the Deed could not, and did not assign from Mr Baker to Maroubra Automotive the right to recover the cost of the repair from Mr Power. On that basis Maroubra Automotive could not succeed as a plaintiff, and no doubt it was on that basis that before the commencement of the evidence, Mr Gower for the plaintiff, indicated that evidence would not be led on behalf of Maroubra Automotive which consented to a judgment against it in favour of the defendant. I will consider subsequently the question of the costs flowing from that concession.

17 Mr Manion submitted at pages 4,5,6 and 7 of his submissions that Mr Baker was not able to sue for the cost of the repairs because they had been carried out by Maroubra Automotive pursuant to the Deed, and therefore he had suffered no loss. Mr Manion submitted that Mr Power (clearly meant to be ‘Baker’) had not breached any of his covenants under the Deed. Clearly that is factually incorrect. It was Mr Baker who in Clause 3A(iii) covenanted:

that the cause of the accident was solely the responsibility of the driver and/or owner of the third party vehicle giving rise to an assignable right of action against the negligent driver and/or owner of the third party vehicle for the cost of repair.

I have found that the Deed could not and did not assign the right of action and that the Deed was therefore ineffective and void. The main purpose of the Deed was incapable of performance. The other clauses were supplementary to the main purpose and were not several.

18 I am satisfied that the Deed being void, Maroubra Automotive would have the right to sue Mr Baker for the cost of the repairs of the vehicle. It may be able to do so in contract and may be able to do so on the basis of unjust enrichment. The mere possibility that Maroubra Automotive could exercise those rights against Mr Baker, in my view, entitled Mr Baker to exercise his rights against the defendant to recover the cost of the repairs and to pay the same to Maroubra Automotive to avoid the litigation between Maroubra Automotive and himself.

19 Even if I be wrong in relation to those findings, I am satisfied that Mr Baker is still able to bring these proceedings and to succeed. That position was made clear in the following extract from McGregor on Damages para 1395 as follows:

Jones v Stroud District Council

The Endeavour

20 I am satisfied that Mr Baker is entitled to bring the proceedings as plaintiff and is entitled to recover the fair and reasonable cost of the repairs to his vehicle from the defendant.

21 Mr Schumak the Managing Director of Maroubra Automotive served a witness statement dated 19 August 2004. To his statement he attached a copy of the repair quotation prepared by Maroubra Automotive and a copy of the quotation assessed by Mr Wild a loss assessor. Mr Schumak stated that Maroubra Automotive repaired the car and sought recovery of the amount of the assessed quotation. Mr Schumak’s witness statement might properly be regarded as basic, but similar to those often relied upon by a repairer where liability was not in issue.

22 In these proceedings I am satisfied I am entitled to regard AAMI as the defendant as clearly the insurance company conducted the defence. It had available to it the resources of a listed public company. The defendant relied upon the report of AAMI Inspector Nick Sadgic. He prepared a document in the nature of a Scott Schedule and which I shall refer to as the ‘Scott Schedule’. It was a very detailed document going through the 198 items contained in the adjusted repair quotation.

23 Mr Manion at pages 7,8, 9 and 10 submitted that Mr Schumak in his statement entirely failed to comply with the requirements of the experts’ code of conduct and s79 of the Evidence Act. He complained bitterly that Mr Schumak was allowed in examination in chief, to comment and reply to the Scott Schedule in Mr Sadgic’s report. In retrospect I concede that it may have been better if Mr Schumak was required to filed evidence in reply. This was one of the first cases heard in relation to quantum and the practice of having the plaintiff reply to the Scott Schedule is now adopted. The court had no idea as to the length of time which the parties were going to spend on quantum. The estimate given to the court was two days. In fact the matter took five days. Largely as a result of the length of time this matter took, the court has endeavoured to take steps to shorten similar matters. As to what the parties could reasonably be expected to do in the way of presenting evidence, has to be considered, bearing in mind that the real dispute between the parties was of an amount of $7,444.49. Mr Manion in his submissions ignored the fact that he spent longer in chief with Mr Sadgic than Mr Gower had with Mr Schumak. Moreover, the objections raised in submissions were not raised during Mr Gower’s examination of Mr Schumak.

24 In two similar cases, but involving disputes as to quantum between two insurance companies, I considered whether the assessors who were employees of each insurance company were expert witnesses and were required to comply with the experts’ code of conduct. Mr Manion was involved in Lambros v Rhiethmuller (2006) NSWLC 26 and Ausbrand Pty Ltd v Vrahnos, file number 6956/05. I am aware that an appeal has been lodged in each of those matters. I intend to rely in this matter on my findings in relation to the law in those matters. I propose to set out hereunder paragraphs 37 to 57 from my judgment in Lambros.

(EXCERPT FROM LAMBROS V RHIETHMUILLER)

EXPERT EVIDENCE

37. Each assessor complied with the Expert Witness Code of Conduct. Both witnesses were cross examined as to alleged breaches of the code. It appeared to me during the hearing that to require the witnesses in this case, each being an employee of a party to the proceedings, to comply with the code, created an artificial and unreal situation. I am satisfied that for the purpose of this argument, I am entitled to treat the NRMA and AAMI as the two parties in dispute before the court. It was unrealistic to expect employees of parties giving the only evidence on behalf of their employer in the case, to be impartial and to owe a paramount duty to the court and not to their employer. I was concerned as to how I should treat those criticisms and cross examination in this judgment. I am now satisfied that neither witness was required to comply with the Expert Witness Code of Conduct.
38. R3 31.2(3) of the Uniform Civil Procedure Rules provide as follows;

R31.2(3);

1. As soon as practicable after engaging an expert as a witness whether to give oral evidence or to provide an expert’s report, the party engaging the expert must provide the expert with a copy of the Code of Conduct.

2. Oral evidence may not be received from an expert witness unless:

(a) he or she has acknowledge in writing whether in a report relating to the proposed evidence or otherwise in relation to the proceedings, that he or she has read the Code of Conduct and agrees to be bound by it, and

(b) a copy of acknowledgement has been served on all parties affected by the evidence.

3. If an expert’s report does not contain an acknowledgement by the expert witness who prepared it, that he or she has read the Code of Conduct and agrees to be bound by it:

(a) Service of the report by the party who engaged the expert witness is not valid service, and

(b) the report is not admissible in evidence.

4. This rule applies unless the court otherwise orders.

39. The Expert’s Code of Conduct is in the following form;

Uniform Civil Procedure Schedule 7

EXPERT WITNESS CODE OF CONDUCT

Application of code

1. This code of conduct applies to any expert engaged:

a) to provide a report as to his or her opinion for use as evidence in proceedings, or

b) give opinion evidence in proceedings or proposed proceedings.

General duty to the Court

2.1 An expert witness has an overriding duty to assist the Court impartially on matters relevant to the expert’s area of expertise

2.2 An expert witness’s paramount duty is to the Court and not the person retaining the expert.

2.3 An expert witness is not an advocate for a party.

The form of expert reports

3.1 A report by an expert witness must (in the body of the report or in an annexure) specify the following:

a) the person’s qualifications as an expert,

b) the facts, matters and assumptions on which the opinions in the report are based (a letter of instructions may be annexed),

c) the reasons for each opinion expressed,

d) if applicable – that a particular question or issue falls outside his or her field of expertise,

e) any literature or other materials utilised in support of the opinions,

f) any examinations, tests or other investigations on which he or she has relied including details of the qualifications of the person who carried them out.

3.2 If an expert witness who prepares a report believes that it may be incomplete or inaccurate without some qualifications, that qualification must be stated in the report.

3.3 If an expert witness considers that his or her opinion is not a concluded opinion because of insufficient data or for any other reason, this must be stated when the opinion is expressed.

3.4 An expert witness who, after communicating an opinion to the party engaging him or her (for that party’s legal representative), changes his or her opinion on a material matter must forthwith provide the engaging party (or that party’s legal representative) with a supplementary report to that effect which must contain such of the information referred to in sub-clause 1(b), (c), (d), (e) and (f) as is appropriate.

3.5 Where an expert witness is appointed by the Court, the preceding paragraph applies as if the Court were the engaging party.

Experts’ conference

4.1 An expert witness must abide by any direction of the Court to:

a) confer with any other expert witness, and

b) endeavour to reach agreement on material matters for expert opinion, and

c) provide the Court with a joint report specifying matters agreed and matters not agreed and the reasons for any non agreement.

4.2 An expert witness must exercise his or her independent, professional judgment in relation to such a conference and joint report, and must not act on any instruction or request to withhold or avoid agreement.

40. Whilst it may be of assistance to the court for the loss assessors to prepare their report generally in accordance with cl 3.1 of the Code, I consider it unrealistic to expert them as employees of the parties to comply with cl 2 and with cl 3.2, 3.2 and 3.4.

41. In Kirsh Communications Pty Ltd v Gene Engineering Pty Ltd (2002) NSWSC 485 a director of the defendant company prepared a report for the loss assessor regarding damage to a winch which included expert opinion. The director had expertise in relation to the matters in the report. The plaintiff objected to the tender of the report on the basis that it did not comply with the then equivalent of r31.2(3) because the director did not comply with the Expert’s Code of Conduct.
42. His Honour Campbell J, referred to the definition of ‘expert witness’ in r13(c) of the Supreme Court Rules (now pt 31.18 Uniform Civil Procedure Rules) as follows;

‘Expert witness’ means an expert engaged for the purpose of;

Providing a report as to his or her opinion for use as evidence in proceedings or proposed proceedings, or giving opinion evidence in proceedings or proposed proceedings.

43. His Honour went on to state;

“It does not seem to me that the definition of ‘expert witness’ is able to catch the situation involved here where an officer of a party, not engaged for any particular purpose, has at a time before court proceedings were contemplated, expressed an expert opinion in a report and that report is tendered in later proceedings.”

44. His Honour found that the report sought to be tendered did not have to comply with the requirements of r31.2(3) and the expert witness Code of Conduct.

45. I am satisfied that the same reasoning applied to the evidence of each loss assessor in this matter. The NRMA employed Mr Wainwright as a loss assessor. He assessed the quotation of Perfect Autobody quotation and inspected the plaintiff’s vehicle. Subsequently when court proceedings were commenced to recover the cost of the repairs from the defendant the NRMA sought to call Mr Wainwright to give expert evidence. However, Mr Wainwright did not become an ‘expert witness’ under the definition. He was not engaged by the plaintiff for that purpose. A party could not engage herself, himself or itself as an expert witness, although the party could if sufficiently qualified give an expert opinion. Mr Wainwright was able to give expert evidence but did not have to comply with r31.2(3) and the Expert Code of Conduct.

46. I am satisfied that the same principle applied to Mr Matthews. He inspected Mr Lambros’s vehicle as a loss assessor. His employer then sought to call him as a witness. He was not engaged by the defendant for that purpose. He did so as part of his duties as an employee. He could give expert evidence, but was not an ‘expert witness’ and did not have to comply with r31.2(3) .

47. I do not therefore propose to deal with submissions based on the failure of one or other of the witnesses to comply with the code. I indicate that such submissions were not in any event important as I find that they went only to minor matters of credit and I did not find them helpful to either party.

48. For completeness I should indicate that because each witness may not have been impartial or independent did not mean that their report was inadmissible. His Honour Judge Campbell came to that conclusion in Kirsh Communications Pty Ltd v Gene Engineering Pty Ltd .

49. In Collins Thompson v Clayton (2002) NSWSC 366 His Honour Austen J came to the same conclusions in a very helpful and instructive decision.

50. It follows then that the evidence of the two loss assessors was admissible, although they did not have to comply with the requirements of r31.2(3) and the Expert Witness Code of Conduct. The fact that each was employed by a party to the proceedings, was a matter to be taken into account when assessing their credibility in the usual manner.
51. Their evidence still had to comply with S79 of the Evidence Act. Mr Manion urged strongly that Mr Wainwright’s evidence should be given little or no weight because it did not satisfy the tests for admissibility as laid down by His Honour Justice Heydon in Makita Pty Ltd v Sprowles (2001) 52NSWLR 705. Justice Heydon summarised the applicable principles in the often quoted paragraph 85 as follows;

“In short if evidence tendered as expert evidence is to be admissible:

1. It must be agreed or demonstrated that there is a field of ‘specialised knowledge’.

2. There must be an identified aspect of that field in which the witness demonstrates that by reason of specialised training, study or experience the witness has become an expert.

3. The opinion proffered must be ‘wholly or substantially based on the witness’s expert knowledge.

4. So far as the opinion is based on facts ‘observed by the expert’ they must be identified and admissibly proved by the expert, and

5. so far as the opinion is based on ‘assumed’ or ‘accepted facts’ they must be identified and proved in some other way.

6. It must be established that the facts on which the opinion is based form a proper foundation for it, and

7. the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached; that is the expert’s evidence must explain how the field of ‘specialised knowledge in which the witnesses is expert by reason of ‘training, study or experience’ and on which the opinion is ‘wholly or substantially based’ applies to the facts assumed or observed so as to produce the opinion propounded’.

52. His Honour went on to say;

“If all of these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible and, so far as it is admissible of diminished weight.”

53. That test proposed by Heydon JA is often put forward as the only test to be applied. The test has, however, been somewhat watered down by the decision of the Court of Appeal in Asic v Rich (2005) NSWCA 152 (see particularly 92-135) and also particularly in Sydney Wide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) FC AFC 157. Branson J in that case considered the requirement that the court be ‘ sure’ placed too high a test upon the admissibility of expert evidence. He said;

“The approach of Heydon J as set out above is, as it seems to me, to be understood as a council of perfection. As a reading of His Honour’s reasons for the judgment as a whole reveals, His Honour recognised that in the context of an actual trial the issue of admissibility of evidence tendered as expert evidence may not be able to be addressed in the way outlined in the above paragraph.”

54. Branson J also emphasised the need for an approach which tended to place more emphasis on questions of weight than on absolute compliance with the Makita test of admissibility. There is of course, the discretion for the court to exclude evidence that is unfairly prejudicial or misleading or confusing or wasteful of time (s135 of the Evidence Act). It seems to me that to require strict compliance with the principles of Makita in this matter would set the bar too high.

55. It is important to note that in Makita the independent expert was Professor Morton. He was not a participant or witness in the events of the accident in relation to which he was required to give expert evidence. That situation contrasts sharply with the position in this matter where the NRMA assessor Mr Wainwright was involved in assessing the quote and inspecting the plaintiff’s vehicle in the ordinary course of his work and AAMI’s assessor Mr Matthews was called upon to consider the fair and reasonable cost of the repairs in the ordinary course of his employment.
56. In Keller v R (2006) NSW CCA 2004 in a situation where a witness was expressing an opinion as to whether a speaker on a telephone was talking about drugs, His Honour Studdert J stated that for the evidence to be admissible;

“It is necessary that there be a manifest foundation for the evidence, namely;

(i) That it should be made apparent that the opinion expressed ‘is wholly or substantially based’ upon the expert training, study or experience of the witness.’ (s79);

(ii) That the reasoning process of the witness should be sufficiently exposed to enable an evaluation as to how the witness used his expertise in reaching his opinion.

57. It appears to me that those tests espoused by Studdert J are a more practical statement of the appropriate principles to be applied in this case.

(END OF EXCERPT IN RHIETMULLER v LAMBROS)

25 Based on the reasons in that excerpt and particularly based on the decision in Kirsh Communications, I am satisfied that Mr Schumak was not an expert witness and did not have to comply with the code.

26 Mr Schumak was not engaged by Mr Baker for the purpose of providing a report as to his opinion for use as evidence in proceedings or to give opinion evidence in the proceedings. Mr Schumak was the Managing Director of the company which carried out the repairs to Mr Baker’s vehicle. He was put to the proof as to the fair and reasonable cost to repair the damage in the accident. His company carried out the work. He was called to prove those matters. He had a duty to his client Mr Baker. In my view litigation in this State could not be conducted if in those circumstances Mr Schumak was held to be an expert witness and therefore bound by the experts’ code of conduct with ‘an overriding duty to assist the court impartially’ on matters relevant to the experts’ area of expertise and that his paramount duty is to the court and not the person retaining him (see Experts’ Code).

27 I am satisfied that Mr Schumak was not an expert witness. However, the witness statement indicated that he had been a licensed panel beater, at the time of giving evidence, for forty years. The evidence indicated that he conducted a large motor repair facility. Relying on that experience and qualifications, he was clearly able to give opinion evidence as an experienced licensed panel beater. I was satisfied Mr Schumak did set out the basis of his expertise. It was his qualifications and his experience.

28 At the end of paragraph 10 on page 10 of his submissions, Mr Manion referred to the following evidence of Mr Schumak as follows (T20/04 p26, L27):

‘The Jaguar mudguard has probably got double the amount of bolts holding on a car than most production vehicles.’

29 Referring to that statement Mr Manion submitted:

‘Complying with Makita he would have had to make explicit his basis for that statement. Was it based on an observed fact? Was it an assumption? Was it based on research? Was it a considered opinion? What was its basis? This example is typical of vast tracks of Mr Schumak’s evidence and indicates why it is unsafe to accord his opinion evidence any weight and the difficulty in according any of his evidence any weight because of the blurred distinction between observed fact and opinion.’

30 I considered Mr Schumak’s statement to be a statement of fact based on his knowledge and experience gained from over forty years in the industry. If it was not a statement of fact, it was a statement of opinion which he was entitled to make, based on his forty years experience in the industry, particularly as the owner of a company specialising in the repair of prestige vehicles such as Jaguars.

31 For the reasons which I expressed in Lambros I do not regard Mr Sadgic as an expert witness. On the basis of the decision in Kirsh Communications I am not satisfied that AAMI is able to engage its own loss assessor as an expert witness. Clearly Mr Sadgic is qualified to give expert evidence. I do not propose to treat him as an expert witness. In my view such finding very much assists the defendant. I did not find Mr Sadgic to be impartial. I gained no impression that he regarded his paramount duty to be to the court and not to his employer. I had no doubt that he was an advocate for AAMI. However, as a result of my finding I draw no particular adverse findings in relation to those matters.

32 In my view the position in relation to Mr Wild is less clear. I am satisfied on the evidence that Mr Wild was engaged by Maroubra Automotive to assess the quotation prepared by Maroubra Automotive as part of his occupation as a loss assessor. I am satisfied he carried out that duty. In giving evidence as to what he did as part of that work, I am not satisfied that he was engaged as an expert witness. I am therefore satisfied he did not have to comply with the code. I am satisfied that he also, although not an expert witness, was entitled, based on his long experience, to give expert evidence.

33 I propose when assessing the evidence of each witness to take into account their experience and expertise. I will take into account the interest which each of them had in the proceedings. I accept Mr Gower’s submission that the appropriate test to be applied in relation to their evidence under s 79 of the Evidence Act is that set out by His Honour Studdart J in Keller v R (2006) NSWCCA 2004 as follows:

1. That it should be made apparent that the opinion expressed is wholly or substantially based on the expertise, training or experience of the witness (s79).

2. That the reasoning process of the witness should be sufficiently exposed to enable an evaluation as to how the witness used his expertise in reaching his opinion.

I intend to apply those principles when assessing the expert opinions expressed by Mr Schumak and Mr Sadgic.

34 I have rejected the submissions made by Mr Manion that Mr Schumak’s evidence should be rejected because it does not comply with the principles in Makita v Sprowles. I merely point out that if those principles were to be applied strictly in this matter, Sadgic’s report would not comply with those principles. The most important opinion in so far as the defendant is concerned, expressed by Mr Sadgic appears on page 29 of his report when he stated:

‘The repair quotation from Maroubra Automotive Refinishers was considered excessive when compared to industry rates.’

Nowhere in his report could I find the basis or details or source materials for those industry rates. I assume his opinion is based on ‘assumed’ or ‘accepted facts’ that is the industry rate, but nowhere are they identified or proved in any way. I nevertheless allowed the tender of his report.

QUANTUM

35 I intend to consider the question of damages under the following headings:

(i) Mitigation

(ii) The measure of damages

(iii) Funny time, funny money

(iv) Assessment of the witnesses

(v) The evidence

36 Mr Manion submitted that the defendant had mitigated his loss by entering into the Deed and as a result had suffered no loss. I have already dealt with that submission. I am satisfied the Deed was void.

37 Mr Gower conceded at paragraph 18 of his submissions that a failure by the second plaintiff to mitigate his loss was pleaded by the defendant. I am not sure that that was so, although there were submissions in relation to mitigation. I propose to deal with the issue.

38 The law requires the defendant to prove on the balance of probabilities the failure of the plaintiff to mitigate. The appropriate test would appear to be:

‘Did the plaintiff take reasonable steps to mitigate the loss in all the circumstances?’

39 The evidence in this matter indicated that the plaintiff delivered his vehicle to Maroubra Automotive a large repair company which held itself out to be a prestige motor vehicle repairer. He relied upon the expertise of Mr Schumak. There is nothing to suggest that he was not entitled to do so.

40 Maroubra Automotive prepared a quotation for the repair of the vehicle and had the vehicle assessed by Mr Wild.

41 I am not satisfied that the defendant has proved a failure to mitigate by Mr Baker. Mr Baker was called to give evidence. Not one question was put to him which went to any failure to mitigate. The onus to prove the failure was on the defendant. I am not satisfied he has done so.

42 Mr Gower submitted at paragraph 36 of his submissions:

a

43 Mr Manion at page 10 submitted that the defendant is required to pay the fair and reasonable costs of repairs.

44 I considered this matter in Lambros v Rhiethmuller. In that matter Counsel for the plaintiff submitted that the plaintiff, having incurred the loss, was entitled to recover the whole of the cost of the repairs on an indemnity basis. I rejected that proposition.

45 The measure of damages in a claim for the recovery of the cost of repairs to a motor vehicle has been regarded as being the reasonable cost of the repairs to put the car in the same condition as it was before the collision. The learned author of McGregor on Damages (15th Ed, para 1247) set out the principle as follows;

The London Corporation

Darbishire v Warran

Payton v Brooks

46 In some cases it has been submitted that the principles referred to above from McGregor on Damages have as their basis the principle of ‘restitutio in integrum’. Clearly some Judges, particularly in the old shipping cases, when considering the quantum of damages, referred to the principle of restitutio in integrum. Lord Lushington did so in did so in The Pactolus (SWAB 1079) when he said as follows:

“First, it is not to be expected that Courts can have any practical knowledge as to what repairs were necessary in consequence of the collision or whether the charges made for such repairs are fair and just, and these are the questions to be determined…Secondly, the principle upon which these reports should be founded is, I apprehend, undoubted; the parties are entitled to restitution in integrum, to a complete repair of all the damage done…With regard to the bills incurred for such expenses, they must necessarily, for the purposes of justice, be submitted to examination and extravagant charges lowered by the opinion of persons conversant with the trade; but I must say that it is a very arduous task for the Court to decide when such opinions are conflicting…

the charges exceeding the ordinary and accustomed rate;

47 The reference to the principle of restitutio in integrum now appears to be regarded as an error. This was made clear in the decision of Harriton v Stephens 59 NSWLR 694 where His Honour Ipp JA in referring to the established compensatory principle relating to the action for damages, referred to the old shipping cases and had this to say:

Admiralty Commissioners v SS Valeria

Dredger, Liesbosh

Admiralty Commissioners v SS Valeria,

“… I agree with the Lords Justices in the Court of Appeal, but I cannot refrain from a slight criticism upon the use of the phrase ‘Restitutio in integrum.’ ‘Restitutio in integrum’ is a phrase which is properly applied when you wish to express the condition which is imposed upon a person seeking to rescind a contract. I do not think it can be properly applied to questions of tort.”

British Transport Commission v Gourley

Livingstone v Rawyards Coal Co

Watson Laidlaw

Cattanach v Melchoir

48 I am satisfied that the correct position applicable to this case was set out by His Honour Judge Ipp JA in Harriton v Stephens above and by Lord Pearson in Darbishire v Warran (p315 at E) as follows:

“The plaintiff is not entitled to charge the defendant by way of damages any greater sum than that which he reasonably needs to expend for the purpose of making good the loss. In short, he is fully entitled to be as extravagant as he pleases, but not at the expense of the defendant.”

49 I am satisfied that the appropriate principle is that the onus is on the plaintiff to establish that the costs of repairs carried out to his vehicle to repair the damage caused by the defendant is fair and reasonable. The essential point however is as stated by His Honour Ipp JA in Harriton v Stephens that;

‘ The courts can only attempt to arrive at a fair estimate – true restoration not being possible.’

I am satisfied on the basis of the evidence in this case and adopting the statement of His Honour Ipp JA, that in relation to the repairs of motor vehicles in general, but particularly in the case of the repair of prestige motor vehicles, there may be a range of charges for repairs which might differ considerably but still come within the expression of ‘fair and reasonable’. That finding is re-enforced by the evidence which I will refer to in this case as to the approach and practices adopted by insurance companies in assessing vehicles which make the assessment of that ‘fair estimate' by the court, extraordinarily difficult.

50 Such difficulties can only extend the range of charges which will come within the definition of ‘fair and reasonable’.

51 Some assistance as to the extent of the range of charges which will come within the expression ‘fair and reasonable’ is gained from a consideration of the authorities. It is significant that Lord Lushington in The Pactolus in the quotation already set out (paragraph 6 hereof) referred to the need for extravagant charges to be lowered. True it is that he then approved a reduction by the Registrars, whose opinions were that the charges were high. Lord Pearson in Darbishire v Warran referred to the plaintiff not recovering expenses which were extravagant. In fact the damages sought to be recovered in Darbishire v Warran was an amount twice the replacement value of the vehicle where it was further found that the plaintiff had made no attempt to find a replacement vehicle.

52 I am satisfied that the appropriate principles as to the measure of damages are as follows:

(ii) To restore as close as possible the vehicle to its pre-accident condition.

3. The court can only come to a fair estimate of the fair and reasonable costs indicating that there will be a range of costs which will be fair and reasonable.

4. To be outside the range of fair and reasonable the costs would have to be extravagant, the charges exceeding the ordinary and accustomed rate, exorbitant or at least high.

53 I intend to apply those principles in this case.

54 Since preparing the draft of this judgment His Honour Patten AJ has handed down his decision in On Tai Fung v Janice Rosemary Stocovez (2006) (NSWSC 1345). In my view such judgment confirms my decision as to the appropriate principles as set out above.

55 I indicated when discussing the law into law as to the measure of damages that there were practices within the motor vehicle repair industry which made the assessment by a court of a fair estimate of the fair and reasonable cost for the repairs of motor vehicles extraordinarily more difficult. This case classically highlights the problems. Mr Schumak the owner of Maroubra Automotive gave evidence in chief from about 10.30am to approximately 3.00pm on the first day. He was then cross examined by Mr Manion for approximately an hour on the first day and for the whole of the second day, that is the 21st of April and for at least an hour on the third day the 23rd February 2006. He was cross examined on the basis that the appropriate hourly rates were as follows:

Remove and replace $29.00 per hour

Repair and align $31.00 per hour

Paint refinish $57.00 per hour

During the whole of his evidence in chief and the whole of that extensive cross examination (except for three or four examples) Mr Schumak was cross examined very largely on the basis that the time which he had charged to do the various items was excessive. The cross examination on that basis was not only extensive but it was relentless. By way of example, I refer to items 3 and 5 in the Scott Schedule. Before discussing that example it was agreed that Mr Schumak had quoted on the basis of $29 per hour for remove and replace. As will be seen, the cross examination got down to matters of minutes and it was agreed between the parties that at $29 per hour the following time and prices applied:

Time
Hour Minutes Charge

.1 6 $2.90

.2 12 $5.80

.3 18 $8.70

.4 24 $11.60

.5 30 $14.70

56 In item 3 to remove and replace the near side head light and to disassemble the dual lights, the repairer had charged 36 minutes or $17.40. The defendant was prepared to allow .4 of an hour, or 24 minutes at a charge of $11.60. Mr Schumak was cross examined by Mr Manion on these matters (T21/04/05 p10, L20 – p12, L45). Typical of the questions put to Mr Schumak was the following: (T21/04/05, p12, L30):

57 Mr Sadgic the expert for the defendant was cross examined about the hourly rate and the times allowed in the MTA Repair Times Manual. At the commencement of his cross examination (T21/02/06, pp132-137) Mr Sadgic agreed that the $29.00 did not represent a true hourly rate, because he conceded that it would be impossible for a panel beater to exist charging $29.00 an hour. He conceded (T21/02, p137, L40) that the $29.00 was part of a formula. It was one part. He further conceded at (L50) that the MTA Time Guides do not bear any relationship to the actual time spent on a particular task. In subsequent evidence he agreed that the MTA hourly guide was about three times the actual time it would take to do a task and agreed that the multiplication of the MTA time allowance and the fictitious figure of $29.00 would result in a true hourly rate to the repairer of about $87.00 to $90.00 per hour. That evidence was not in dispute.

58 Clearly I have to consider Mr Manion’s cross examination in light of that undisputed evidence which came late on the third day of the hearing. If I go back to Mr Manion’s cross examination on the second day at pp 8 and 10 in relation to items 3 and 5, being the removal and replacement of the headlamps, Mr Manion went to some considerable length to cross examine Mr Schumak as to what was involved in each operation. It was put to Mr Schumak on several occasions that 36 minutes for each headlight was excessive. As set out above Mr Manion suggested that 24 minutes per headlight was plenty of time with time to spare. I made notes at the time based on the cross examination as to what, on that evidence, I considered to be a reasonable time. Subsequently of course it transpired that those times were fictitious and the time really sought by the repairer was twelve minutes per headlight, and that sought to be allowed by the insurer was eight minutes per headlight. When the very question I have to determine is whether the repairer’s charge was a fair and reasonable one, the difference in the evidence and the true position was crucial. Obviously based on the real time the difference between what was claimed and what was allowed is reduced by two-thirds.

59 It appears to me that the only way that I could make sense of the evidence in chief and the cross examination of Mr Schumak is to treat his evidence on the basis that when he gave evidence and was cross examined the questions were asked and answered on the basis of what would be a reasonable fictitious time based on the fictitious rate of $29.00 per hour. That requires me to reconsider all of the evidence given on the first three days. I propose to do so, but clearly it makes my task much more difficult.

Assessment of witnesses

60 The evidence indicated that Mr Schumak had been a licensed panel beater in New South Wales since 1970 and had worked in the industry since 1965. The business of Maroubra Automotive was established in 1976 and has been conducted by Mr Schumak since that time. The evidence indicated that the company would have twenty to thirty vehicles at any one time under repair. Mr Schumak was present in the work shop each day in a supervisory capacity. He employed a full time manager and clearly a large number of staff.

61 I am satisfied that Mr Schumak is a very experienced panel beater and business operator and there was nothing at all in the evidence which indicated otherwise than that Mr Schumak operated a well run business. I was satisfied that he did supervise generally the repairs of the vehicles in the workshop and I was well satisfied that he had a good knowledge of what was involved in the repair of Mr Baker’s motor vehicle and had a good recall as to what had taken place. He was cross examined at great length with consideration intensity by Mr Manion. I generally considered that he was a forthright and honest witness. I was satisfied that he had a better knowledge of the workings of Jaguar cars and what was required in their repair than Mr Sadgic.

62 The plaintiff relied on the evidence of an assessor Mr Wild. He gained his trade qualifications as a panel beater in 1965. He had carried on his own business as a motor vehicle loss assessor for seven years. Prior to that he had been a motor vehicle loss assessor for an insurance company. I was impressed with the evidence of Mr Wild. He gave his evidence in a calm detached manner. He inspected the vehicle on 26 August and then again on 5, 16 and 26 September. He said he did about twenty-five assessments a week and he thought he would do about two a month for Maroubra Automotive. I considered that consistent with his experience he appeared to have an excellent knowledge of what was involved in assessing the fair and reasonable costs of repairs to a motor vehicle. He made many concessions in cross examination by Mr Manion. I found him to be a truthful and impressive witness.

63 I am satisfied Mr Wild carefully examined Mr Baker’s damaged vehicle. He clearly went through each item of the quote approving some, reducing some and placing some on report. He helpfully took a number of photographs. He returned to inspect the vehicle during its repair on three occasions. He charged a fee of $200.00. Mr Sadgic said such fee was excessive (T14/3/06, P39, L8). I was not impressed by that evidence.

64 Mr Sadgic was the only witness called on behalf of his employer. He attached a copy of the Code of Conduct for Expert Witnesses to his statement, but I have found he did not come within the definition of an expert witness although clearly he was qualified to give expert evidence. I did not find him to be impartial, but he didn’t have to be. I was satisfied that he did not have as good a working knowledge of the particular Jaguar sports vehicle involved in this matter as Mr Schumak. I make that finding on the basis of the following evidence:

(ii) He was unaware of how many plugs are under the bonnet or in the under bonnet area of the Jaguar in the front wiring harness (T21/02, p156, L50-57).

(iii) He gave evidence in relation to there being mounting bolts for the radiator. He had to confirm that they weren’t bolts, but grommets (T21/02, p158, L35).

(iv) He was unsure where the rear blinkers were located (T21/02, p174, L1).

(v) He agreed that allowed $29 to disconnect the computer module because he couldn’t tell how long it would take.

ASSESSMENT OF FAIR AND REASONABLE COST OF REPAIRS

65 Mr Schumak said he prepared his quotation using the figure of $29 an hour and then calculated the time that it would take, based on his experience, to do the particular operation (see T/20/04, p13, L40-55). Mr Schumak was a member of the Motor Traders’ Association and used their guide. However, his position was that the guide only covered scheduled vehicles such as holdens, fords and commodores and did not make reference to a jaguar. His evidence was that a jaguar was a prestige vehicle which was ‘much more complex than say a Mazda or a Holden’ (T20/4,p14, L35). Mr Schumak gave evidence that for the first item in the Scott Schedule, to remove and replace and disassemble the front bumper bar, he quoted $130.50 which would be 4.5 hours at $29.00. (It would of course equate to about 1.5 hours in real time).

66 Mr Sadgic in relation to Item 1 stated as follows:

‘The removal and replacement of this bumper bar is no more or less difficult than most popular makes and models of vehicles. However, the disassembly and reassembly is more complex and requires additional time to complete. The maximum allowance for the removal, disassembly and reassembly and replacement of a front bumper bar for most popular makes of passenger vehicles as is listed in the Motor Traders’ Association (MTA) Repair Time, does not exceed $70.00. The adjusted amount reflects the fair and reasonable cost of this operation taking into consideration the complexity of disassembling and reassembling this particular bumper bar.’

67 Item 1 was therefore a very good example of the major dispute between the plaintiff and the defendant. The plaintiff claimed that the Jaguar was a prestige vehicle more complex and difficult to repair than an ordinary car. It required more care and time, and for that reason was not included as a scheduled car in the MTA Guide The defendant used the MTA times guide and allowed on this occasion more than the MTA Guide amount, but less than what the repairer sought to charge.

68 In the Scott Schedule Mr Sadgic showed the difference between that claimed by the plaintiff and that prepared to be allowed by the defendant to be $8,326.76. He conceded that he made an error in Items 128 resulting in an amount of $849.99 being placed in the incorrect column. The parties were to get back to me and didn’t, but it seems that the amount therefore in dispute was $7,444.49. I did some rough calculations and it appeared to me that of that sum of $7,444.49 about $5,100.00 was represented by amounts where the defendant agreed that the work had been done, but alleged an overcharge. The balance amount of about $2,344.00 appeared to relate to work where the defendant alleged that the work charged for had not been done. Included in the amounts for the items where work was done but overcharged were included some large items where various parts were repaired. In the Scott Schedule prepared by Mr Sadgic he reviewed 198 items. Again at a quick check indicated that there was agreement in approximately 106 items, leaving 92 disputed items.

69 I have come to the view that time does not allow me to individually investigate the 92 disputed matters. To do so would, in effect, involve writing 92 separate judgments, as in relation to each of the disputed items each witness gave evidence in chief and was cross examined, often at considerable length. I propose to examine some examples of the overcharge items and some items where it was alleged the work was not done and come to a finding based on my general view of the evidence as to what amounts to a fair estimate of the fair and reasonable cost of repairs.

70 Based on all of the evidence I have come to the general view that Mr Sadgic under estimated the difference between this particular Jaguar and a scheduled vehicle in the MTA Guide. I am satisfied that the time and care required to repair this vehicle was more than Mr Sadgic was prepared to allow. I confirm my finding that I am satisfied for the reasons I have already given that Mr Schumak had a better understanding and knowledge of what was involved in the repair of Jaguar cars generally and of this particular car than Mr Sadgic.

71 In coming to that finding I take into account that of the three witnesses only Mr Schumak and Mr Wild saw the vehicle in its damaged condition prior to repairs commencing. They were obviously in the best position to determine the extent of the damage. Mr Sadgic to his credit, acknowledged that the extent of the damage was not fully indicated in the photographs which Mr Wild took, although obviously they were of some assistance to him. I am satisfied Mr Schumak and Mr Wild were in the best position to assess the extent of the damage to the car.

72 Returning to Item 1, I have already found that I was impressed with the evidence of Mr Wild. Mr Manion in his submission (para 37) in relation to Item 1 submitted as follows:

‘ It is submitted that the plaintiff has failed to establish on the balance of probabilities that any more than $100 or 3.4 hours at their nominated hourly rate of $29.00 per hour is reasonable for the operation. It is notable that Mr Wild made no reference to this in his evidence in chief.’

73 I reject that submission. Mr Wild when giving evidence indicated that he assessed the repair quotation prepared by Maroubra Automotive. The assessed quotation was Annexure A to the Affidavit of Mr Schumak. Mr Wild gave evidence that when he assessed the quotation he placed some ticks and numbers and dots on the quotation. He stated (T20/02, p44, L30):

‘A tick is when the time allowed is a fair and reasonable time to carry out that particular process’.

74 On the assessed quotation Mr Wild placed a tick approving the repairer’s claim of 4.5 hours at $29.00 or $130.50 for the work involved. Mr Wild’s evidence as to what he did on his assessment was that he inspected the vehicle and placed a tick against those items which he approved. Mr Wild’s evidence to that effect was not challenged at all by Mr Manion.

75 Moreover, Mr Manion had foreshadowed on the second day (T20/02, p14, L30):

‘ But it will be alleged that there’s a relationship between Mr Wild and Maroubra covering many, many vehicles and many, many assessments.’

76 That proposition was not put in cross examination to Mr Wild at all. His independence was not challenged at all. Mr Gower asked him some questions which indicated Mr Wild assessed about 100 cars a month, of which about 2 a month were for Maroubra Automotive.

77 I am satisfied on the balance of probabilities that a fair estimate of the fair and reasonable cost to remove, replace and reassemble the front bumper bar was $130.50.

78 In Items 3 and 5 the repairer claimed $17.40 or 36 minutes of ‘funny time’ to remove and replace and disassemble the dual headlight. The charge for each item was approved by Mr Wild. The defendant claimed that the appropriate allowance was $11.60 or 24 minutes, a difference of $5.80. Mr Schumak gave evidence in chief. He indicated what was involved (T20/04, p10-11). He was cross examined in relation to that evidence (T24/04, p10-12). Mr Sadgic gave evidence in chief in relation to the headlights (T20/02, p68-70). Mr Sadgic was cross examined by Mr Gower (T21/02, p149-150). I prefer the evidence of Mr Schumak and supported by Mr Wild. I am satisfied that there is considerably more involved in the removal and replacement and disassembly of the headlights in a Jaguar than in a standard car, and that the figure charged by the repairer is a fair estimate of the fair and reasonable cost of carrying out that procedure. I do not accept Mr Manion’s submissions at paragraph 37. He submitted that Mr Wild assessed the fair and reasonable costs at $17.40 without explanation. In my view that is incorrect. Mr Wild inspected the vehicle as part of carrying out his business as a loss assessor. Based on his forty years experience in the industry and on completing twenty-five assessments a week (T20/02, p45, L55), he ticked the quotation for $17.40 or 36 minutes as being fair and reasonable. Mr Manion’s submission is factually incorrect. He stated:

‘Mr Sedgic allowed .3 or $11.60’.

In fact the time allowance by Mr Sedgic was for .4 or 24 minutes. Mr Manion’s error is significant. The amount claimed by the repairer as being fair and reasonable was .6 of an hour or 36 minutes. For me to not accept that figure and for me to accept the defendant’s figure, I have to be satisfied that the repairer’s figure was extravagant, exorbitant or too high. The difference between the repairers 36 minutes for the repair and 24 minutes on Mr Sadgic’s evidence is 12 minutes or in real time just 4 minutes. By stating that Mr Sadgic had allowed .3 or 18 minutes, Mr Manion overstates the difference between the two assessments. That is further complicated by Mr Manion’s submission:

‘The real time involved would only be in the order of five to ten minutes each side (T69) based on Mr Sadgic’s own experience in repairing dual headlight vehicles.’

79 The concession by Mr Sadgic that the operation would take up to ten minutes of real time would mean 30 minutes of ‘funny time’ whereas he was only prepared to allow 24 minutes.

80 In my view the evidence in relation to Items 3 and 5 highlight the difficulties facing the defendant. I have indicated that in relation to Items 3 and 5 I prefer the evidence of Mr Schumak and Mr Wild. However, even if I could not come to a decision as to whose evidence I preferred, so that the evidence of each side had equal effect, in my view I would still not, on the figures relied on by the defendant, be able to find that the plaintiff’s figure was extravagant, exorbitant or too high.

81 As previously indicated I am not prepared or in my view, should I be required, to go through the evidence in relation to each of the 92 disputed items.

82 In those matters where it is alleged that the work was done but the cost was too high, I generally prefer the evidence for the plaintiff. I find that the defendant under estimated what is involved in repairing a jaguar compared to a car such as a holden or ford. I came to that view particularly in relation to Item 8 - the removal and replacement of the bonnet, Item 14 – windscreen washer bottle and Item 16 – the front air intake. I have already referred to Mr Sadgic’s apparent lack of knowledge in relation to the front air intake. I was satisfied on the evidence that the radiator had been removed. I reject Mr Manion’s submission in relation to Item 25. Even on Mr Sadgic’s figures, if the real time was 4 minutes, then he was obliged to allow $11.60 and not the $8.70 which he did in fact allow. I am not satisfied that the amounts claimed by the repairer were extravagant, exorbitant or too high.

83 In relation to Item 30 I am satisfied that one hour at $29.00 per hour or 20 minutes of real time was an appropriate time for that work. The charge made would allow an hourly return in real terms of $87.00. In relation to Item 55 the removal and replacement of the boot lid, I prefer the evidence of Mr Schumak and Mr Wild. Mr Manion again submitted:

‘Mr Wild did not justify to explain his allowance of $81.20.’

I restate that Mr Wild inspected the vehicle in its damaged condition. Based on his long experience in the industry as a panel beater and loss assessor, he assessed the charge of $81.00 to be fair and reasonable. In my view he was entitled to do so. He was not cross examined in relation to his allowance of this amount or his allowance of any other item in the quotation.

84 In relation to Item 65 Mr Schumak confirmed that the muffler was not removed and replaced but were repaired. In relation to the repair of the muffler I was not satisfied on the balance of probabilities that Mr Schumak had proved that such work was done. It may have been, but on the balance of probabilities I was not satisfied. I disallow items 150 and 151 and deduct the sum of $400.00.

85 In relation to some items such as the repair and align of the near side rear chassis rail (Item 79), I came to the view on the evidence that the charge claimed by the repairer of $248.80 was too high, but that the charge allowed by the defendant was too low. I considered the appropriate figure to be 6 hours or $186.60. I deduct $62.20. I came to a similar view in relation to Item 80 where I deduct $124.40. I would also deduct $124.40 from Item 82 and $124.40 from Item 85.

86 On the balance of probabilities I was satisfied that the work was done in relation to Item 88 I was satisfied that there was some damage to the near and off side rail and skirt in Items 89 and 90, but not as extensive as claimed and I would deduct $98.30 from these claim.

87 In relation to the paint and refinish I was generally satisfied that the standard of preparation and painting required in relation to a Jaguar takes more time than that required in relation to a car such as a Holden or Ford. However, overall on the balance of probabilities I considered that some of the charges may have been excessive. Doing the best I can and considering all of the evidence in relation to the painting and refinishing, I propose to disallow ten hours or $570.00.

88 There was considerable cross examination of Mr Schumak in relation to the repair of parts required – Item 127 the off side headlight assembly, Item 136 – the radiator support assembly and Item 138 – the near side front guard. The off side headlight assembly was quoted and assessed by Mr Wild as requiring a new part at a cost of $1,023.78. Item 136 – the radiator support assembly was sought to be replaced at a cost of $218.40. It was placed on report. The near side front guard was placed on report by Mr Wild in relation to a claim to replace it at $819.00.

89 Much of the cross examination centred around the repair of the near side front guard. Mr Schumak said that his practice was that where a part is assessed as requiring replacement he nevertheless on occasions decides to repair the part if he is of the view that the part can be repaired satisfactorily for less than the cost of the new part. The cost of the new near side front guard was $819.00. Mr Schumak gave evidence that the repairer negotiated a price with the assessor and that the price was based on the hours taken to repair the item and also took into account the price of the new item. Mr Schumak was cross examined for at least a day and a half. It was in relation to this aspect of the matter that I thought be became, to some degree understandably, frustrated. When he referred to basing his charge on an hourly rate, I gained the impression that he was referring to a real hourly rate of about $90.00 per hour. Clearly he was of the opinion that there was a practice for parts which were going to be replaced to be repaired if possible, particularly if there was to be a saving to the owner. In relation to the guard Mr Schumak charged $600.00. Mr Wild gave evidence of negotiating with the employee in relation to those items. Mr Sadgic was prepared to allow $373.20. He did not see the guard in its damaged condition. On the whole of the evidence I formed the view that the charge of $600.00 was reasonable. In relation to the repairs to the off side headlamp assembly, I was satisfied that some repairs had been carried out, but that the charge of $550.00 was too high and I would propose to allow a fee of $300.00, making a reduction of $250.00. On the whole of the evidence I considered the charge made for the repair of the radiator support assembly was reasonable.

90 I calculate the specific deductions to be:

Remove and replace: 79 $62.20

80 $124.40

81 $124.40

82 $124.40

89 $ 98.30

$ 98.30

$632.20 $632.20

Paint-refinish $570.00

Parts required 150 $200.00

151 $200.00

$250.00

$650.00

$1,852.00

91 I have considered carefully all of the evidence and submissions. I rely on the general findings I have made and the specific deductions and comments I have made. Doing the best I can I propose to deduct the sum of $2,000.00 from the amount claimed of $34,964.80, resulting in a judgment for $32,964.80.

92 The hearing of this matter strongly confirms my view that these matters are unsuitable for determination by a Magistrate in this court. It is extraordinarily difficult for a person without mechanical or motor repair knowledge to properly understand the intricacies of the evidence. Moreover, I have grave doubts as to whether this court can justify allocating 5 days to hear a matter where the amount in dispute was $7,444.49. There are numerous similar matters before the court. These disputes, in my view, should be resolved within the industry. If legislative charges are required to bring about the necessary mechanism, then they should be considered and made.

93 There will be judgment for the plaintiff in the sum of $32,964.80. The defendant is to pay interest on the judgment from 21 September 2003 in accordance with s 100 to be calculated by the Registry.

94 I would propose that the first plaintiff pay the defendant’s costs on an ordinary basis incurred as a result of it being a plaintiff. It would seem such order would cover most of the costs incurred between 28 November 2003 and 9 September 2004, although much of the work done was covered by specific cost orders. It would not cover work such as the preparation of statements which were subsequently used, or were the basis for statements used in the hearing.

95 I would propose that the defendant should pay the second plaintiff’s costs of the action on the ordinary basis. The costs in both cases will be as agreed between the parties. In default of agreement within 28 days the costs are to be assessed under the Legal Profession Act.

96 I will hear from the parties in relation to the proposed cost orders.

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Citations

Maroubra Auto Refinishers Pty Ltd and Baker v Power [2006] NSWLC 44

Cases Citing This Decision

0

Cases Cited

6

Statutory Material Cited

2

FAI General Insurance Co Ltd v Tidbold [1999] QCA 524

Kirch Communications Pty Ltd v Gene Engineering Pty Ltd [2002] NSWSC 485

Collins Thomson v Clayton [2002] NSWSC 366

CITATION:	Maroubra Auto Refinishers Pty Ltd & Baker v Power [2006] NSWLC 44
JURISDICTION:	Civil
PARTIES:	Maroubra Automotive Refinishers Pty Ltd Peter Douglas Baker Nathan Power
FILE NUMBER:	144/04
PLACE OF HEARING:	Downing Centre Local Court
DATE OF DECISION:	12/18/2006
MAGISTRATE:	Magsitrate B A Lulham
CATCHWORDS:	Damages - Motor vehicle property damage claim - The measure of damages - Whether plaintiff who is paid cost of repairs is entitled to indemnity or whether onus is on plaintiff to prove cost of repairs are fair and reasonable - Evidence - Whether loss assessor employed by defendant falls within definition of expert witness - Whether loss assessor instead able to give expert evidence - Torts - Whether action to recover damages in negligence to recover repairs to motor vehicle is capable of assignment.
LEGISLATION CITED:	Uniform Civil Procedure Rules 2005. Rule 31.2(3) Uniform Civil Procedure Rules 2005. Schedule 7
CASES CITED:	Maroubra Auto Refinishers Pty Ltd v David Christian Johnson (2004) NSWLC 3 Poulton v The Commonwealth & Ors (1952-1953) 89 CLR 602. Maroubra Automotive Refinishers Pty Ltd v Paul Koulos (6336/05 12 December 2005) Rickard Constructions v Rickards Hails Maretti & Ors. (2004) NSWSC 1041 Monk v Australia & New Zealand Banking Group (1994) 34 NSWLR 148 Auto Panel Beaters and Radiators Pty Ltd v Chantal J Hilderbrant (2004) NSWLC 6 Kirsh Communications Pty Ltd v Jene Engineering Pty Ltd (2002) NSWSC 485 Collins Thompson v Clayton (2002) NSWSC 366 Makita Pty Ltd v Sprowles (2001) 52 NSWLR 705 ASIC v Rich (2005) NSWCA 152 Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) FC AC 157 Keller v R (2006) NSWCCA 2004
REPRESENTATION:	Solicitors for Plaintiff: Insight Litigation & Legal Services Pty Ltd Advocate for Plaintiff: Mr B. Gower (Solicitor) Counsel for Defendant: Mr K. Manion Solicitors for Defendant: C.K.B. Partners
ORDERS:	Judgment for the second plaintiff in the sum of $32 964.80.