Patterson v Kenny
[2017] WADC 58
•5 MAY 2017
PATTERSON -v- KENNY [2017] WADC 58
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WADC 58 | |
| Case No: | APP:88/2016 | 22 MARCH 2017 | |
| Coram: | GETHING DCJ | 5/05/17 | |
| PERTH | |||
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Decision of magistrate set aside Respondent's claim dismissed | ||
| PDF Version |
| Parties: | ANDREW PATTERSON JAMES KENNY |
Catchwords: | Appeal Appeal against decision of magistrate awarding damages for loss of use of non-income earning motor vehicle Principles to be applied in assessing damages payable for the loss of use of a non-income earning motor vehicle |
Legislation: | Nil |
Case References: | Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 Anthanasopoulos v Moseley [2001] NSWCA 266 Badran v Public Transport Authority of Western Australia [2017] WASCA 28 Beamish v Kanakis [2017] WADC 33 Brocklehurst v Wolinski [2015] WADC 36 Butler v Bennett [2007] WADC 107 East Metropolitan Health Service v Martin [2017] WASCA 7 Fort v Pastoral Management Pty Ltd [2016] WADC 51 Jones v Darkan Hotel [2014] WASCA 133 La Macchia v Minister for Primary Industries and Energy (1992) 110 ALR 201 Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359 Mustac v Medical Board of Western Australia [2007] WASCA 128 Pattni v First Leicester Buses Limited [2011] EWCA Civ 1384 Roberts v Rodier [2006] NSWSC 282 Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22; (2016) 331 ALR 550 Tang v Driden [2010] NSWLC 17 Wainwright v Barrick Gold of Australia Limited [2014] WASCA 15 Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Appellant
AND
JAMES KENNY
Respondent
Catchwords:
Appeal - Appeal against decision of magistrate awarding damages for loss of use of non-income earning motor vehicle - Principles to be applied in assessing damages payable for the loss of use of a non-income earning motor vehicle
Legislation:
Nil
Result:
Appeal allowed
Decision of magistrate set aside
Respondent's claim dismissed
Representation:
Counsel:
Appellant : Mr C G Colvin SC with Mr G J Pynt
Respondent : Mr M Howard SC with Ms J Henderson
Solicitors:
Appellant : SRB Legal
Respondent : Jonathan D'Arcy & Co
Case(s) referred to in judgment(s):
Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172
Anthanasopoulos v Moseley [2001] NSWCA 266
Badran v Public Transport Authority of Western Australia [2017] WASCA 28
Beamish v Kanakis [2017] WADC 33
Brocklehurst v Wolinski [2015] WADC 36
Butler v Bennett [2007] WADC 107
East Metropolitan Health Service v Martin [2017] WASCA 7
Fort v Pastoral Management Pty Ltd [2016] WADC 51
Jones v Darkan Hotel [2014] WASCA 133
La Macchia v Minister for Primary Industries and Energy (1992) 110 ALR 201
Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359
Mustac v Medical Board of Western Australia [2007] WASCA 128
Pattni v First Leicester Buses Limited [2011] EWCA Civ 1384
Roberts v Rodier [2006] NSWSC 282
Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22; (2016) 331 ALR 550
Tang v Driden [2010] NSWLC 17
Wainwright v Barrick Gold of Australia Limited [2014] WASCA 15
Watts v Rake [1960] HCA 58; (1960) 108 CLR 158
- GETHING DCJ:
Introduction
1 On 2 December 2014 the 2006 model Toyota Camry owned by James Kenny (the respondent) was damaged in an accident with a car driven by Andrew Patterson (the appellant). Mr Kenny's car took 22 days to repair. Whilst it was being repaired he used a late model Toyota RAV 4 pursuant to an agreement with Compass Corporation Pty Ltd (Compass). Among other things, the agreement authorised Compass to take action on behalf of Mr Kenny to bring a claim against Mr Patterson for loss of use of the Camry. In reliance on the agreement, Compass claimed $2,671.90 from RAC Insurance (RAC), Mr Patterson's liability insurer. This was based on the daily hire rate for a Toyota Camry. RAC accepted the claim, but only in the amount of $1,795.75. This amount was calculated by reference to the weekly hire rate for a Toyota Camry.
2 By general procedure claim filed in May 2015 Mr Kenny claimed from Mr Patterson the difference between what Compass claimed and what RAC paid, being $793.65, with interest. Following a trial, the magistrate awarded Mr Kenny the amounts claimed.
3 Mr Patterson appealed the decision of the magistrate to this court. In reality, the action was a contest between Compass and RAC. Although the amount in dispute on its face is less than $1,000, the outcome has obvious wider commercial implications for both Compass and RAC. This decision follows the recent decision of Derrick DCJ in Beamish v Kanakis [2017] WADC 33 which also involved a claim relating to car hire from Compass.
4 On the basis of the submissions and oral argument before me, the concise issue arising in the appeal is whether the magistrate made an appealable error in not assessing the damages claimed by the respondent by reference to the market rate for renting a replacement vehicle.
Facts which are not in dispute
5 The facts which follow do not appear to be in dispute between the parties.
6 Mr Kenny is the owner of a 2006 Toyota Camry motor vehicle. On 2 December 2014 it was damaged as a result of a collision with a motor vehicle driven by Mr Patterson. Following the collision, Mr Patterson lodged a claim with his insurer.
7 The damage sustained by the Camry was such that it required repair. On or about 15 December 2014, Mr Kenny drove the damaged Camry to a repair centre for assessment and to obtain a quote for repairs. This repairer was not able to repair the Camry, so the Camry was towed to Bert Bennett Panel Centre (Bert Panel) who undertook the repairs.
8 The Camry was Mr Kenny's primary mode of transport which he used on a daily basis for personal purposes such as grocery shopping, visiting family and other activities as the need arose. He required a replacement vehicle whilst the Camry was being repaired.
9 On 16 December 2014, Mr Kenny had a telephone conversation with a representative from Bert Panel. As a result of this telephone conversation, Bert Panel contacted Compass on behalf of Mr Kenny to arrange for him to hire a replacement vehicle. The same day, Compass emailed two documents to Mr Kenny. The first was an email which provided a general overview of what Mr Kenny would be required to do in order to obtain a car from Compass (exhibit 6). The second was a document entitled 'Terms & Conditions –and FAQs' (exhibit 7).
10 On 17 December 2014, two representatives of Compass drove a Toyota RAV 4 to Mr Kenny's home address. He signed three documents, and the RAV 4 was left at his address (though at trial he could not recall which documents he had in fact signed: ts A16 - I will identify the transcript references for the trial by the prefix 'A').
11 The first document was a rental agreement with Compass to hire the RAV 4. The rental agreement was for a period of 30 days at a rate of $136.36 per day. With other fees and charges, the total specified in the rental agreement was $4,582.38.
12 The second document was a document entitled 'Mandate and Authority to Act' (Mandate). It recited that the 'Client', defined to be Mr Kenny, 'wishes to hire a replacement vehicle and Compass wishes to hire to the Client a replacement vehicle as near as comparable to the vehicle used by the Client upon the terms set out in this Mandate and Authority to Act … and in the Rental Agreement'. Among other clauses, the Mandate provided that Compass would provide the hire vehicle on credit for a period up to 61 days from the date of the hire invoice, after which time the hire charges would become due and payable without further demand (cl 4). The Mandate contemplated that their final hire charges would not be known until the repairs were completed (cl 2).
13 The Mandate then provided that Compass would use its best endeavours, 'absent the commencement of legal proceedings' during the period in which the credit was provided to have the hire charges paid by the third party or the third party's insurer (which in context appears to be a reference to the driver of the vehicle with whom the Client's vehicle collided). The Mandate goes on to provide that, if paid, the Client is released from liability for the hire charges, provided that the Client has fully complied with his obligations under the Mandate and the Rental Agreement (cl 7).
14 The Mandate further provided that the Client irrevocably appointed Compass as its exclusive agent to recover, by whatever means including legal proceedings, the hire charges 'which Compass considers in its absolute discretion to have reasonable prosects of recovery' from the third party. There is then an obligation on the Client to render all co-operation required by Compass in the recovery process (cl 8).
15 The third document signed by Mr Kenny is described as a 'letter of need' which was addressed to RAC. The letter of need was based on a pro-forma and was in the following terms:
Dear Claims Office:
I am the owner of the vehicle registration 1CGB232 which was damaged in the accident which occurred on 02/12/2014
The accident was a result of your client's negligence and I am seeking to recover the costs of a replacement vehicle for the period our car is to be repaired. I require the replacement vehicle for the following reasons….
• Work
• Family
I am aware that I am entitled to this reimbursement and expect to be reimbursed in full for the replacement vehicle costs. I have kept my costs to a minimum in doing so. I authorise Compass Claims to recover these costs on my behalf and require all monies owed in relation to this car hire to be made payable to Compass Corp Pty Ltd.
16 On or about 19 December 2014, Mr Kenny telephoned Bert Panel to inquire when the repairs to the Camry would be completed. He was advised that the repairs would be completed by early January 2015 (ts A19).
17 On 8 January 2015, Mr Kenny attended Bert Panel to collect the Camry. He left the RAV 4 at the premises of Bert Panel for collection by Compass and terminated the hire agreement with Compass.
18 Compass subsequently sent RAC a tax invoice in the amount of $2,671.90. This comprised $2,589.40 representing a daily rate of $117.70 for 22 days and a delivery fee of $82.50 (all figures being inclusive of GST).
19 RAC assessed the claim at $1,878.25, and paid this amount to Compass. This amount comprised $1,795.75 hire costs and a delivery fee of $82.50 (again, all figures being inclusive of GST).
Proceedings in the Magistrates Court
20 On 7 May 2015, Mr Kenny lodged a general procedure claim in the Magistrates Court seeking the amount of $793.65 together with court costs. The claim was described in the following terms:
On 2 December 2014, the Claimant's vehicle sustained damage as a result of a motor vehicle accident caused by the negligence of the Defendant. As a result of the damage sustained in the collision, the Claimant's vehicle required repairs and rectification. Whilst the Claimant's vehicle was undergoing repairs, the Claimant required and hired a substitute vehicle and the Claimant thereby suffered loss and damage. The Claimant seeks damages in the sum of $793.65, being the cost of hiring a substitute vehicle during the repair period less a partial payment of $1878.25, plus costs and interest.
21 In Mr Kenny's statement of general procedure claim filed 21 September 2015, the following particulars of damages were provided:
Damages for the loss of use, calculated by reference to the market cost of hiring an alternate/substitutive vehicle from 17/12/2014 to 08/01/2015 for the sum of $2,671.90, less a partial payment of $1,878.25. The Claimant seeks the remaining balance of $793.65.
22 The claim went to trial on 23 August 2016 before Magistrate Shackleton.
23 Mr Kenny gave evidence. He also called Darryle Adams, a licensed commercial agent employed by Compass as its Senior Recoveries Specialist. Mr Patterson did not give evidence. He called two witnesses. The first was Gabriela Skinner, a Senior Motor Claims Specialist employed by RAC, Mr Patterson's insurer. The second was John McShera, who at the time was the General Manager – Operations for Busby Investments Pty Ltd trading as Budget Car and Truck Rental.
24 His Honour reserved the decision, and gave oral reasons at a hearing on Monday 24 October 2016 (I will identify the transcript references for this hearing by the prefix 'B'). After summarising the broad factual context, his Honour stated (ts B2 – B3):
Mr Kenny carries the burden of proving his claim, and so he must prove on the facts and the law that he is entitled to $1,795.75. Mr Patterson also carries a legal burden of proof on the basis that it's for a defendant who seeks a reduction from the expenditure in mitigation on the ground of betterment to make out his case for doing so.
25 His Honour found that Mr Kenny had a need for a replacement vehicle (ts B3 – B4). This finding was not challenged on appeal.
26 His Honour continued (ts B4):
The defendant then says that the rate Mr Kenny is entitled to is the cheapest rate on the evidence. My view is in line with Tang v Driden and that is that it is the circumstances of the plaintiff who has been deprived of his vehicle as a result of the collision are such that he is unlikely to be in a position to obtain a replacement vehicle at the cheapest rate possible.
The need to hire the vehicle is unforeseen so he's unable to book in advance. He is unable to be certain as to the period that his vehicle will require repairs and so he is more likely to need to hire a vehicle on a continuing daily rate. The court would consider this to be the case even in circumstances where the smash repairer provides an evidence on the time for repairs. Ultimately, I also took into account the next line from that case which wasn't quoted by counsel for the claimant that provided the plaintiff obtained a hire vehicle at a rate that was within the range of comparative rates available at the time, it will be market value.
That passage, in my view, is particularly relevant because this hire was between 7 December 2014 and 8 January 2015 which, it seems to me, is obvious is a particularly busy period. Evidence of the rates given by Mr McShera and Ms Skinner was that weekly rates are cheaper than single daily rates. Overall, the evidence, which is not surprising, is that prices fluctuate and change depending on peak periods, the length of the hire and whether it is for a fixed period or daily rate and whether it is an advanced booking.
I refer again to the quote given to Mr Kenny and the estimate, being only a visual inspection and clearly subject to change. Also, the quotes given by Mr Skinner sorry – Ms Skinner and Mr McShera were taken from the internet and there is no evidence that Mr Kenny is internet au fait, and I agree with counsel for the claimant that he is not from the internet generation. In any event, Mr McShera agreed that the offers were not made available in ordinary advertising materials. He also said that if an extension is required, the hire company would do everything it could to keep the hirer in the same vehicle but he stopped short of giving a guarantee or even a most likely position.
In my view, it was reasonable for Mr Kenny to accept the loan agreement from Compass in litigation [sic] of his loss. In relation to the non-compensable aspects, Mr Adams' evidence was that the additional services referred to by the defendant were provided 'at no extra charge' and, on that basis, and I accept his evidence, the defendant's onus has not been discharged. For the reasons given, I find in favour of the claimant against the defendant in the amount claimed. So could someone remind me of those figures and I will make that order.
- It is common ground that the reference to 'litigation' in the last paragraph quoted is an error in transcription and should read 'mitigation'.
27 The formal orders made by Magistrate Shackleton were that Mr Patterson was to pay Mr Kenny:
(a) interest at 6% per annum on the amount of $2,671.90 from 8 January 2015 to 27 January 2015;
(b) interest at 6% per annum on the amount of $793.65 from 27 January 2015 to the date of this order;
(c) $793.65; and
(d) costs of $165.70.
28 The decision in Tang v Driden [2010] NSWLC 17 referred to by the magistrate is a decision of an assessor of the Local Court of New South Wales. The plaintiff's BMW 120i sedan was damaged in a collision as a result of the negligence of the defendant. The plaintiff hired a replacement BMW for the 35 day period it took for the BMW to be repaired, at a total cost of $7,397.75. The defendant disputed the quantum of the claim on three grounds, the relevant one for present purposes being that the hire rate was excessive. The assessor held that damages of the type claimed were able to be recovered, following the decision in Anthanasopoulos v Moseley [2001] NSWCA 266 (a decision analysed in some detail by Derrick DCJ in Beamish). The assessor made specific reference to a passage in the judgment of Beazley JA [83] where her Honour stated the damages in question are to be determined 'by reference to the market cost' of providing the plaintiff's need. The assessor held that the rate charged to the plaintiff was 'within the range of comparative rates of hire for a similar vehicle available in April 2009'.
29 As to the application of the principle to the facts, the following comments by the assessor in Tang were referred to by counsel in argument before me:
In this case, the defendant submits that the rate is excessive in that it exceeds the market cost of providing a replacement vehicle. The plaintiff hired a BMW that was a similar model to the vehicle that was being repaired. Whether the rate claimed is excessive is to be considered by reference to the market cost of the hire of a vehicle similar to the BMW being replaced.
The Court accepts that the market cost for the hire of motor vehicles will vary considerably between car hire companies and also fluctuate over time …
The hire of a motor vehicle will vary according to a number of other factors. Rates will differ based on whether bookings are made over the internet or based on a walk in rate. Rates will vary depending upon whether a person hires a vehicle for a fixed period or on a continuing daily rate.
The circumstances of the plaintiff who has been deprived of his vehicle as a result of a collision are such that he is unlikely to be in a position to obtain a replacement vehicle at the cheapest rate possible. The need to hire the vehicle is unforeseen so he is unable to book in advance. He is unable to be certain as to the period that his vehicle will require repairs and so he is more likely to need to hire a vehicle on a continuing daily rate. The Court would consider this to be the case even in circumstances where the smash repairer provides an estimate on the time for repairs. In addition, the deprivation of his vehicle may make it difficult for the plaintiff to travel to car hire companies that are less conveniently located from home. These factors combine so that it is likely that the hire rate obtained by the plaintiff will be towards the high end of the range of market rates available. Provided that the plaintiff obtained a hire vehicle at a rate that is within the range of comparative rates available at the time it will be a market rate.
Appeal notice
30 By appeal notice filed 14 November 2016 the appellant commenced an appeal from the magistrate's decision.
31 The notice of appeal sets out seven grounds of appeal. In submissions filed 17 March 2017, the appellant advised the court that he did not pursue grounds 2, 5, 6 and 7 (par 39). Also as set out in the appellant's submissions, the remaining grounds of appeal reduce to two issues:
(a) Did the learned magistrate apply the correct legal principle in assessing the damages claimed by the respondent?
(b) Applying the correct legal principle to the facts, did the respondent prove that he was entitled to more than $1,795.75?
32 On the basis of the submissions and argument before me, five issues arise for determination:
• What is the correct legal principle for assessing the damages claimed by the respondent?
• Has the appellant established the error in appeal ground 1?
• Has the appellant established the error in appeal ground 3?
• Has the appellant established the error in appeal ground 4?
• If the appellant has established an error, applying the correct legal principle to the facts, did the respondent prove that he was entitled to more than $1,795.75?
District Court's appeal jurisdiction
33 The District Court's appeal jurisdiction is found in Magistrates Court (Civil Proceedings) Act 2004 (WA) (MCCPA) pt 7. The District Court must decide the appeal on the material and evidence that were before the Magistrates Court: MCCPA s 40(4)(a). No party sought leave to admit other evidence: MCCPA s 40(4)(b), s 40(5). The appeal is by way of a 'reconsideration of the evidence' that was before the Magistrates Court: District Court Rules 2005 (WA) (DCR) r 50(1). This is to be undertaken by way of a rehearing: Brocklehurst v Wolinski [2015] WADC 36 [14] (Derrick DCJ); Butler v Bennett [2007] WADC 107 [6] - [10] (Bowden DCJ). As a rehearing, the appellate powers of the District Court are only exercisable if the appellant demonstrates that the decision made by the magistrate the subject of the appeal was the result of some legal, factual or discretionary error: Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 [23] (Gaudron, McHugh, Gummow and Hayne JJ). The onus is on the appellant to demonstrate this error: Jones v Darkan Hotel [2014] WASCA 133 [31] (judgment of the court).
What is the correct legal principle for assessing the damages claimed by the respondent?
34 In order to determine whether there was an error of law it is first necessary for me to consider what legal principles determine the assessment of damages in this context.
35 The principles governing the assessment of damages in the present case are conveniently summarised in the decision of Derrick DCJ in Beamish. I am not bound by the decision in Beamish. However, as a matter of judicial comity, a court of first instance will usually follow the decision of another judge of first instance unless convinced that the judgment was wrong: Mustac v Medical Board of Western Australia [2007] WASCA 128 [38] (Martin CJ, with whom Wheeler and Buss JJA agreed); La Macchia v Minister for Primary Industries and Energy(1992) 110 ALR 201, 204 (Burchett J); Fort v Pastoral Management Pty Ltd[2016] WADC 51 [19] (Gething DCJ).
36 In Beamishthe respondent, Mr Kanakis, owned a 2006 Porsche Boxster Convertible (2006 Porsche). The 2006 Porsche was damaged as a result of a collision caused by the negligence of Ms Beamish. Mr Kanakis entered into an agreement with Compass to hire a 2014 Porsche Boxster (2014 Porsche). Mr Kanakis made use of the 2014 Porsche for a period of 32 days being the period of time it took to repair the 2006 Porsche. The total charge raised by Compass was $19,106.03. Compass presented an invoice in this amount to RAC, Ms Beamish's insurer. RAC assessed the value of Mr Kanakis' compensable loss for the repair period to be $2,288. Under Mr Kanakis' insurance policy, he had the option to hire a car free of charge for the repair period. This cost would have been charged by a car rental company to RAC at the rate of $71.50 per day. This rate was used to assess the value of Mr Kanakis' compensable loss for the repair period.
37 At first instance the magistrate awarded damages amounting to the difference between what Mr Kanakis claimed and what RAC paid.
38 As to the general principles, his Honour concluded [117]:
It is, in my view, abundantly clear from both the Australian and English decisions to which I have referred that if a person who has lost the use of their non-income producing vehicle damaged by the negligence of a third party wishes to be awarded damages calculated by reference to the cost of hiring a replacement vehicle, the person must demonstrate a need to hire the replacement vehicle. It is also, in my view, clear from the Australian authorities to which I have referred that if damages for loss of a non-income producing vehicle damaged by the negligence of a third party are to be calculated by reference to the cost of hiring a replacement vehicle, the relevant rate is the market rate of hiring the replacement vehicle.
39 I pause here to note that, with one nuance, the parties to the present appeal accepted the correctness of these principles (I will refer to the transcript for the District Court hearing by the prefix 'C': ts C4, C15). The nuance is that the respondent submitted that it may be that on the facts of a particular case the evidence does not establish a single market rate for hiring the replacement vehicle, rather a market rate which is a range (ts C4).
40 The central issue in dispute in Beamish was 'what is the approach that should be taken in determining what is an appropriate replacement vehicle by reference to which the market rate hire costs are to be quantified?' ([118], emphasis in original). His Honour concluded ([132]):
In summary, and for the reasons I have stated, if damages for loss of a non-income producing vehicle damaged by the negligence of a third party are to be calculated by reference to the cost of hiring a replacement vehicle, the determination of what is an appropriate replacement vehicle by reference to which the market rate hire costs are to be quantified requires the taking into account of the precise nature of the need of the person who has lost the use of the damaged vehicle, the value of the damaged vehicle, and the value of available replacement vehicles which are capable of meeting the precise need of the person who has lost the use of the damaged vehicle.
41 His Honour found that the magistrate failed to apply the correct principles [135] – [137]. On the facts, his Honour concluded that, on the evidence before the magistrate, it was appropriate to determine the damages payable to Mr Kanakis by reference to the cost of hiring a Holden Caprice for the repair period. This meant that Mr Kanakis only proved a loss $442.56 in excess of the amount paid by RAC (Beamish [174]).
42 The issue of what was the appropriate replacement vehicle by reference to which market rate hire costs are to be quantified does not arise in the present appeal. Mr Kenny's claim was based on the Toyota Camry, the same type of vehicle as his.
43 The appellant accepted the law as set out in Beamish that the relevant market is determined by having regard to the precise needs of Mr Kenny.
44 The respondent's position is that the court simply needs to inquire as to the market rate for a person in the respondent's position to hire a comparable replacement vehicle, without the gloss of an analysis of the precise needs of the respondent (ts C38, C49 - C50).
45 I respectfully agree with the statement of law set out by Derrick DCJ quoted at [40] and the reasoning adopted by his Honour.
46 The correct test is to inquire as to what is the market rate of hiring an appropriate replacement vehicle: Beamish[117], [118], [132]. Just as the precise need of the person who has lost the use of the damaged vehicle is used to determine what is an appropriate replacement vehicle, the precise need of the person who has lost the use of the damaged vehicle is used to determine the relevant market rate. For example, if the person who lost the use of the damaged vehicle lives in Kalgoorlie, and proves a need for a vehicle in Kalgoorlie, it is the Kalgoorlie rates which are relevant, and not the Perth rates. If the parts required to repair the damaged vehicle need to come from France, making the repair period two months, the need may be proven to be the use of a vehicle for a minimum two month period. This need will in turn define the relevant market, being for a minimum two month rental and not some lesser period.
Has the appellant established the error in appeal ground 1?
47 The first ground of appeal relied on by the appellant is in the following terms:
Ground 1 – Burden of proof
1. The Learned Magistrate erred in law in concluding that the Appellant carried the burden of proving:
a) the Respondent failed to mitigate his loss;
b) the Respondent's claim should be reduced for betterment;
c) the Respondent's claim included a claim for 'non-compensable benefits'.
Particulars
a) The Appellant did not raise mitigation as an issue.
In a claim for loss of the use of a non-profit earning chattel, the cost of hiring a replacement chattel goes to measurement of the loss, not mitigation of it.
- b) The Appellant did not raise betterment as an issue.
c) The Respondent carried the burden of proving his loss.
a) neither mitigation nor betterment were relevant to the Respondent's claim or the Appellant's defence;
- b) the Respondent carried the burden of proving his loss.
49 I accept that the appellant did not assert either a failure to mitigate or betterment. In his Statement of Defence to General Procedure Claim filed 2 October 2015, the appellant did not raise the issues of mitigation or betterment. Nor did counsel for the appellant raise either issue in his opening submissions (ts A30 - A33).
50 The magistrate did, however, correctly state the principles as regards onus of proof (ts B2 - B3, quoted above [74]). The respondent (claimant) had the onus of proving his loss, which included the quantification in money that should be adopted in the sum awarded: Watts v Rake [1960] HCA 58; (1960) 108 CLR 158, 159 (Dixon CJ); Wainwright v Barrick Gold of Australia Limited [2014] WASCA 15 [92] (Pullin JA with whom Newnes and Murphy JJA agreed). Had the appellant (tortfeasor) asserted that the respondent (claimant) had failed to mitigate his damages, then the onus would have been on the appellant to prove the failure to mitigate: Watts v Rake (159); Wainright [100].
51 In view of the fact that his Honour correctly stated the principle, I do not consider that the conclusion that it was reasonable for Mr Kenny to accept the loan agreement from Compass in mitigation of his loss reflects an error of law as regards onus (ts B5, [26] above).
52 As to betterment, this principle is succinctly summarised in the judgment of Campbell J in Roberts v Rodier [2006] NSWSC 282 [143] (references omitted):
… Betterment. If the only practical way in which the plaintiff can be compensated for damage to an item is by providing the plaintiff with the price of acquiring an item which is better than the item which was damaged, it can sometimes be appropriate to allow the plaintiff the full value of that better item … Whether that course is adopted in a particular case depends upon the facts of that case … and how best to apply, in light of those particular facts, the fundamental principle that the objective of damages is to put the plaintiff in the same position as he or she would have been if the tort had not been committed. Once the plaintiff has discharged the onus of proving an amount which will remedy his or her damage, the onus of adducing evidence is on the defendant to prove both the presence of any betterment, and also its quantum: …
53 So it is correct that the appellant (tortfeasor) bears the onus of proving betterment and its quantum, the onus being an evidential onus. However, the statement of principle in the preceding paragraphs serves to confirm that the present appeal is not about betterment; the case is about what quantum of damages the respondent has proven as regards his need to use a replacement vehicle.
54 In any event, I agree with the respondent's submission on this point. Whether or not it is correct to say that the appellant carried the burden of proof as regards betterment is unimportant. Betterment was not raised as an issue. Further, the magistrate did not take into account betterment in the final judgment given.
55 The third error identified in ground 1 is that the magistrate erred in law in concluding that the appellant carried the burden of proving that the respondent's claim included non-compensable benefits. His Honour's decision was that the appellant had not discharged the onus on him to establish the existence of a non-compensable benefit (ts B5). Again, this does not disclose an error of law as to onus as there is an onus on the appellant (tortfeasor) to adduce evidence that the loss claimed by the respondent includes amounts which the respondent is not entitled to at law: Pattni v First Leicester Buses Limited [2011] EWCA Civ 1384 [35] (Aikens LJ with whom Moore-Bick LJ and Pill LJ agreed) Beamish [113]. As with betterment, this is an evidential onus, the legal onus remaining with the respondent to prove his loss.
56 In summary, the learned magistrate did not make any error of law in setting out the onus of proof which applied in the various scenarios being considered. The appellant has not made out the errors of law set out in ground 1.
Has the appellant established the error in appeal ground 3?
57 Appeal notice ground 3 provides:
Ground 3 – The cost of 'hire' identified in the Rental Agreement was not a reliable guide to the market cost of hiring a replacement vehicle
5. The Learned Magistrate erred in law, alternatively mixed law and fact, in concluding that the cost of 'hire' identified in the Rental Agreement was a reliable guide to the market cost of hiring a temporary replacement vehicle.
Particulars
a) Notwithstanding the terms contained in the Rental Agreement and the Mandate, the Respondent understood from what he was told by Compass or its agents at the time he signed the Rental Agreement and the Mandate that he did not have to pay for the replacement Camry;
b) the Respondent never expected or intended to pay the cost of 'hire' identified in the Rental Agreement;
c) Compass never expected or intended that the Respondent pay the cost of 'hire' identified in the Rental Agreement;
- d) the cost of 'hire' identified in the Rental Agreement included Non-compensable benefits;
e) the cost of 'hire' identified in the Rental Agreement significantly exceeded the daily hire fee that a mainstream hire car company would have charged the Respondent for the hire of a Toyota Camry or Nissan Pulsar in Perth at the relevant time;
f) the Non-compensable benefits represented the difference between the cost of 'hire' identified in the Rental Agreement and the daily hire fee that a mainstream hire car company would have charged the Respondent for the hire of a Toyota Camry or a Nissan Pulsar in Perth at the relevant time for the period of actual hire.
6. The Learned Magistrate should have concluded that the 'hire' cost for the replacement Camry identified in the Rental Agreement was not a reliable guide to the market cost of hiring a temporary replacement vehicle for the Respondent's Camry.
58 It is not evident from the magistrate's reasons that his Honour concluded that the cost of 'hire' identified in the Rental Agreement initially signed by Mr Kenny was a reliable guide to the market cost of hiring a temporary replacement vehicle.
59 The daily hire rate in the Rental Agreement initially signed by Mr Kenny was $136.36. However, the judgment awarded by his Honour was based on the invoice submitted by Compass, which used a daily rate of $117.70. At no point does his Honour expressly or implicitly conclude that a daily hire rate of $136.36 as set out in the Rental Agreement, was a reliable guide to the market cost of hiring a temporary replacement vehicle.
60 The appellant has not established the errors set out in appeal ground 3.
Has the appellant established the error in appeal ground 4?
61 Appeal notice ground 4 provides:
Ground 4 – The market cost of hiring a temporary replacement vehicle
7. The Learned Magistrate erred in law, alternatively in mixed law and fact, in not concluding that the market cost of hiring a temporary replacement vehicle for the Respondent's Camry was the market cost of hiring a Camry or a Nissan Pulsar from a mainstream hire car company in Perth at the relevant time for the period of actual hire.
8. The Learned Magistrate should have concluded that the market cost of hiring a temporary replacement vehicle for the Respondent's Camry was the market cost of hiring a:
a) a Camry or a Nissan Pulsar from a mainstream hire car company in Perth at the relevant time for the period of actual hire; alternatively
- b) Nissan Pulsar, that being, on the evidence, the cheapest of the hire costs from a mainstream hire car company.
63 As is apparent from the facts set out at [11], the loan agreement from Compass accepted by Mr Kenny had a totally different rate ($136.36 per day) than the rate used in the invoice submitted to RAC ($117.70 per day).
64 At trial, Mr Adams gave evidence of searches of hire car rates which had been undertaken by Compass staff. His witness statement, which was tendered as his evidence-in-chief, contains a table summarising the results of the searches, the detailed searches being annexed to this witness statement. The rates were daily hire rates, that is, the rate for a pick up on one day and return the following day (ts A25 - A26). The table is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65 It was on the basis of this analysis that the rate of $117.70 was set.
66 The rate of $117.70 per day was used in the invoice submitted to RAC, not the rate set out in the initial loan agreement. This appears to have been the hire charges which, pursuant to the Mandate, 'Compass considers in its absolute discretion to have reasonable prospects of recovery' from Mr Patterson, through his insurer RAC (see [14] above). As set out above, the rate of $117.70 flowed through to give rise to a deficit in the amount paid by RAC of $793.65, which formed the basis of the judgment.
67 The respondent's position is, in effect, that it is implicit in the magistrate's decision that the amount claimed by Compass, the subject of the judgment, reflected the market cost of hiring a temporary replacement vehicle for the respondent's Camry; if there was an error, it was an error of fact, but not an error of fact sufficient to warrant a contrary decision on appeal. The respondent's position is that no error of law is disclosed as the test is consistent with the law as I have stated it as summarised in Beamish ([38], [40] above). The respondent's position is that the appellant is asserting an error of fact; the magistrate erred in preferring the evidence of market rate presented by the respondent (daily rate) and should have preferred the evidence of market rate presented by the appellant (the weekly rate).
68 If there is an error of fact, the appeal court should not interfere merely because of a preference for one line of evidence over another: Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359, 369 (Beaumont and Lee JJ). The High Court recently restated the principles governing an appeal on a question of fact in the following terms in Robinson Helicopter Company Incorporated v McDermott [2016] HCA 22; (2016) 331 ALR 550 [43] (French CJ, Bell, Keane, Nettle & Gordon JJ) (footnotes omitted):
A court of appeal conducting an appeal by way of rehearing is bound to conduct a 'real review' of the evidence given at first instance and of the judge's reasons for judgment to determine whether the judge has erred in fact or law. If the court of appeal concludes that the judge has erred in fact, it is required to make its own findings of fact and to formulate its own reasoning based on those findings ... But a court of appeal should not interfere with a judge's findings of fact unless they are demonstrated to be wrong by 'incontrovertible facts or uncontested testimony', or they are 'glaringly improbable' or 'contrary to compelling inferences '...
- (Recently applied in this jurisdiction in: Badran v Public Transport Authority of Western Australia [2017] WASCA 28 [65] (Newnes, Murphy and Mitchell JJA); East Metropolitan Health Service v Martin [2017] WASCA 7 [99] (Newnes and Murphy JJA and Beech J)).
69 The appellant's position is that in asking the question whether it was reasonable for the respondent to accept the loan agreement from Compass in mitigation of his loss, the magistrate asked the wrong question, and made an error of law. This is the test for mitigation and not the test for assessing quantum of loss. The error in turn flowed through to the analysis of the evidence, leading the magistrate not to consider the precise needs of Mr Kenny, and not to consider the relevant market.
70 I prefer the appellant's position for four reasons.
71 The first reason is that the central question is not, as stated by the magistrate, whether the respondent acted reasonably in mitigating his loss: Beamish [105]; [112]. Indeed, the issue of mitigation was not asserted by the appellant (above [49]). In stating the central question in this way, his Honour appears to have assessed damages by reference to the reasonableness of the respondent's behaviour in entering into the agreement with Compass, rather than by reference to the evidence of market rates. The correct central question is whether the respondent has proven that he suffered a compensable loss in the amount of $2,671.90 (and not the amount of $1,795.75 set out at ts B3, which is the amount paid by RAC). This in turn required the magistrate to consider the market rate for the provision of a comparable car over the period claimed. As I have already stated, the respondent bore the onus of proving the loss he claimed: Watts v Rake (159); Wainwright [92]. The misstatement of the central question is, in my view, an error of law.
72 The second reason is that the agreement which the respondent in fact signed with Compass was for a 30 day hire for a RAV 4 at a daily rate of $136.36. The respondent did not make a claim based on the agreement he signed with Compass. Rather, the claim which Compass made on the respondent's behalf was for the lesser amount of $2,671.90, being the rate for a Toyota Camry determined on a daily basis of $117.70 per day. Therefore, whether or not it was reasonable for the respondent to have entered into the agreement with Compass was not in fact relevant to the issues in dispute. This analysis reflects the error of law identified in the preceding paragraph.
73 The third reason is that the respondent's actual agreement with Compass is relevant only as potential evidence of the market rate for the replacement vehicle. However, it was not evidence which the respondent relied on. Rather, the respondent relied on evidence establishing that the rate which he (through Compass) actually claimed was within the market rates at the time, albeit calculated on a daily hire basis. I agree with the appellant's submission that in assessing whether Mr Kenny acted reasonably in entering into the agreement with Compass his Honour erred in law by considering the facts from an incorrect legal perspective.
74 The fourth reason is that, as a consequence of the error, the magistrate did not make a finding of fact as to the market rate for a replacement vehicle; rather the finding was that it was reasonable for the respondent to have entered into the agreement with Compass. The fact that the judgment ultimately given reflects one line of the evidence as to market rate (Mr Adam's evidence as to the daily rate), and not the rate set out in the respondent's agreement with Compass, does not undo the error of law.
75 For these reasons, I am of the view that in finding that it was reasonable for the respondent to enter into the agreement with Compass in mitigation of his loss, and not assessing the market rate for a replacement vehicle, the magistrate made an error of law.
76 For these reasons, the appellant has established appeal ground 4.
If the appellant has established an error, applying the correct legal principle to the facts, did the respondent prove that he was entitled to more than $1,795.75?
77 As the appellant has established that the learned magistrate made an error, the court is required to make its own finding of facts and to formulate its own reasoning based on those facts: Robinson [43]. The MCCPA empowers the District Court on appeal to set aside a decision of the magistrate and to 'give any judgment and make any order that the Magistrates Court could have made': MCCPA s 43(7).
78 Applying the law as I have found it (above [38], [40]), the correct starting point in the analysis is to examine the precise need of the respondent for a replacement vehicle.
79 I do not need to consider whether or not the amount set out in Mr Kenny's agreement with Compass was a reliable guide to the market rate. This is because the amount claimed by Compass was not based on the rate in its agreement with Mr Kenny, but on a rate calculated by reference to market rates (see in particular the evidence of Mr Adam at ts A26. As I have already observed, the particular services provided to a claimant under the specific agreement which he or she entered into are, with one exception, not relevant. The exception is if the claimant seeks to use the specific agreement as evidence of the market rate (as was the case in Tang, but is not the case in the present appeal). This also means that there is no need to consider whether or not either the rate charged by Compass in the initial agreement with the respondent, or the amount it claimed from RAC, includes any non-compensable benefits (being heads of damage which are not recoverable at law by the owner of a vehicle against the negligent driver for damage to the vehicle).
80 As to Mr Kenny's need, there is no challenge to the magistrate's finding that he had proven a need for a replacement vehicle (ts B3). Nor was there any challenge to the magistrate's finding that Mr Kenny's need to hire the vehicle was unforeseen, so he was unable to book in advance (ts B4). I accept both points.
81 As set out above, when Mr Kenny entered into the agreement with Compass he did not know when his car would be repaired. A day or so later, he was told early January 2015. So, Mr Kenny's initial need was for a replacement car for an indeterminate duration pending the repair of his car, a duration which within a few days he found out to be a few weeks.
82 I interpose here to note that on the formulation of the law advanced by counsel for the respondent ([44]), I would have come to the same conclusion. The requirement to look at the respondent's position would lead to the same conclusion as an examination of the respondent's precise needs.
83 On the evidence, the relevant market rate is that for a Toyota Camry for a 22 day period, where it was not initially known how long the rental period would be for.
84 Ms Skinner was the RAC assessor who dealt with the claim made by Compass on behalf of Mr Kenny. Her witness statements were tendered and stood as her evidence-in-chief. Ms Skinner gave evidence that she conducted an internet search of what she described as 'mainstream rental companies' to obtain representative quotations. The car she used was a Toyota Camry or similar, being a full size sedan. The prices she obtained were for a Toyota Camry or similar were:
|
|
|
|
|
|
|
|
|
|
|
|
85 She assessed Compass' claim on the basis of the average of these three companies, being $1,795.75, being a daily rate of $81.65.
86 Counsel for the appellant referred to the evidence of Ms Skinner and Mr McShera that the practice of hire car companies is that where there is a rental on a daily basis which continues past a week, the rate charged for the entire period is reduced to the weekly rate (ts B47 (Ms Skinner); ts B51 - B52 (Mr McShera)). The respondent did not lead any evidence to the contrary.
87 The appellant also referred to evidence that the daily rate has built into it a turnaround figure for costs such as cleaning which could be as much as $30 (ts B57).
88 Mr Kenny did not in fact return the hire car and rehire it each day. He had no need to do so, and one could infer that it would have been a considerable inconvenience for him to have done so. He was not in the market to hire and return cars on a daily basis; he was in the market to hire a car for an indeterminate period which ended up being 22 days. Accordingly, the relevant market rate is that determined by Ms Skinner.
89 For these reasons I am of the view that the respondent has not proven on the balance of probabilities that he suffered a compensable loss in excess of the amount of $1,795.75 which RAC paid Compass.
90 The appropriate final orders are that the decision of Magistrate Shackleton dated 24 October 2016 be set aside and that the respondent's claim be and is hereby dismissed.
91 I will hear from the parties as to costs.
2
18
1