Wald v Dianabelle Pty Ltd
[2025] VMC 6
•24 April 2025
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
CIVIL DIVISION
| Michael Wald | Case No. MAG-CI-240168640 Plaintiff |
| v | |
| Dianabelle Pty Ltd (trading as Rootcontrollers & Hydrox Australia) ABN 32 065 581 133 | First Defendant |
| and | |
| Patrick O’Loughlin | Second Defendant |
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MAGISTRATE: | Magistrate M A Hoare |
WHERE HELD: | Melbourne Magistrates’ Court |
DATE OF HEARING: | 12 December 2024, 28 – 29 January 2025, 13 February 2025 & 25 March 2025 |
DATE OF DECISION: | 24 April 2025 |
CASE MAY BE CITED AS: | Wald v Dianabelle Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VMC 6 |
_ _ _
Ruling
INTEREST – Motor vehicle property damage claim – Cost of repairs, towing and storage – Replacement hire car charges – ‘Good cause’ – ‘Compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest’ – Supreme Court Act 1986, ss 60(1), 60(3)(a).
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiff | Mr Paul W McDermott | John Curtain & Associates |
| For the Defendant | Mr Jake Green | Ligeti Partners |
HER HONOUR:
INTRODUCTION
On 17 May 2024, a motor vehicle owned by the plaintiff, Mr Michael Wald, was damaged following a collision with a vehicle driven by the second defendant, Mr Patrick O’Loughlin, and owned by the first defendant, Dianabelle Pty Ltd. Liability having been admitted, the matter proceeded in the Magistrates’ Court as a ‘quantum only’ dispute. Damages claimed by the plaintiff comprised: cost of repairs; loss of amenity in the form of a replacement hire car; and storage costs of the damaged vehicle.
On 13 February 2025, the Court delivered various factual findings regarding loss and damage and awarded damages on the claim in favour of the plaintiff. Based on those factual findings, parties were given leave to reach agreement on calculating the final award amount and proposing final orders.
The award amount was agreed at $39,619.02. However, the defendants denied there ought to be any amount awarded for interest. The parties therefore sought a ruling on the question of interest.
On 25 March 2025, submissions were heard, and the Court was referred to a number of authorities.
LEGISLATIVE FRAMEWORK & RELEVENT AUTHORITIES
Part 5 of the Supreme Court Act 1986 (Vic) (‘SCA’), which governs awards of interest, applies to proceedings in the Magistrates’ Court by reason of s 33.[1]
[1]Supreme Court Act 1986 (Vic) (‘SCA’) pt 5, s 33.
Within Part 5 of the SCA, s 60(1) provides:
The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.[2]
[2] Ibid s 60(1) (emphasis added).
What constitutes ‘good cause’ in any given case will depend on the particular facts and circumstances.[3]
[3]Clarke v Foodland Stores Pty Ltd [1993] 2 VR 382, 395 (Fullagar, Marks and J.D. Phillips JJ) (‘Clarke’).
In Hosking v Ipex Software Services Pty Ltd (No.2),[4] Habersberger J observed that ‘good cause’ had to be measured against the purposes of the statutory power to award interest, which were two-fold:
(a) to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money and deprived of its use during the relevant period; and
(b) to encourage the early resolution of litigation.[5]
[4] [2004] VSC 343 (‘Hosking’).
[5] Ibid [6], cited in M A & J Tripodi Pty Ltd v Swan Hill Chemicals Pty Ltd (No.3) [2018] VCC 710, [13]-[14] (Cosgrave J).
The onus was on the defendant to show ‘good cause’ as to why an award should not be made in accordance with s 60(1).[6]
[6]Hosking (n 4) 394.
At the end of the day, the Court had to be satisfied on the material before it, that there was good reason not to apply the general rule in favour of awarding interest to the plaintiff.[7]
[7]Clarke (n 3) 393-4.
Section 60(3)(a) then provides that the Court must not allow interest on certain categories of damages:
If the damages awarded by the Court or jury include or if the Court in its absolute discretion determines that the damages awarded include any amount for—
(a) compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest; …
— the Court must not allow interest in respect of any amount so included or in respect of so much of the award as in its opinion represents any such damages.
PLAINTIFF’S CLAIM FOR INTEREST
The plaintiff claimed interest in respect of two categories of loss: first, the cost of repairs, towing, and storage; and secondly, hire car charges incurred.
By way of summary, the evidence relied upon in support of the first category of loss was as follows:
(a) On the day of the subject collision, the plaintiff’s damaged vehicle was towed to a workshop called ‘Autosalone’ (the repairer). Also, on the day of the collision, the plaintiff executed a document headed ‘Authority to Repair, Store and Tow Autosalone’ in which he authorised the repairer to store, prepare a quotation for repairs and carry out repairs. The signed authority contained the following acknowledgements:[8]
[8] Plaintiff’s Court Book, 119 (‘PCB’).
I ACKNOWLEDGE AND AGREE that the repairer shall be entitled to charge the fair and reasonable costs of the repairs as set out in his quote and supplementary quotes (‘the repairs’)
I ACKNOWLEDGE AND AGREE that the repairer shall be entitled to charge for the cost of towing as required (‘towing’).
I ACKNOWLEDGE AND AGREE that that repairer shall be entitled to charge for the costs of vehicle as set out in s.153(3) of the Accident Towing Services Act 2007 (‘storage’).
l IRREVOCABLY AUTHORISE any such sums or charges relating to above to be paid directly to the repairer and acknowledge and agree that any such sums or charges unpaid and outstanding will carry interest at the rate prescribed of section 2 of the Penalty Interest Rates Act 1983.
l ACKNOWLEDGE AND AGREE that in the event the at fault driver or their issuer refuses or fails to pay for the repairs, towing and/or storage, l will co-operate in all ways reasonable by assisting my repairer in recovering the costs of those charges.
(b) In accordance with the plaintiff’s express authority, the damaged vehicle was stored for a period (pending liability decisions) and the repairs were quoted for and completed by the repairer.
(c) A tax invoice was rendered for the sum of the repairs (addressed to the plaintiff’s lawyers) and remained unpaid at the date of judgment.
As to the evidence relating to the second category of loss, the plaintiff had entered into a credit hire agreement with an entity referred to by the acronym CARS.[9] The terms of the written agreement were contained in a single page form signed by the plaintiff. The hire car agreement provided for a daily hire rate with ancillary amounts, with nothing being immediately payable by the plaintiff. There was no provision for interest. The agreement stated further:
Payment for the sum invoiced by C.A.R.S to the hirer will not be sought to be paid until all reasonable avenues of recovery have been exhausted by agents the hirer has authorised to act on the behalf of the hirer with regards to the invoiced sum.[10]
[9] Ibid ‘HC Rental Agreement’, 121.
[10] Ibid.
The plaintiff relied on Croce v Steel (‘Croce’),[11] a decision of Hayne J (on appeal from this Court). There, the Court rejected the defendant’s submission that s 60(3)(a) operated to preclude the plaintiff from interest on the cost of repairs. Hayne J disagreed and said the following:[12]
[11] [1993] VicSC 137 (‘Croce’).
[12] Ibid 9.
The compensation which the plaintiff seeks ~ and in respect of which I consider him entitled to judgment – is compensation for damage to his motor car and is not, in my view, properly characterised as compensation in respect of any liability which the plaintiff may have to a third party – in this case, the repairer.
The damages that I consider the plaintiff should receive are damages that may be measured by the cost of repairing his motor car, but they are referable to the fact that an item of his property has suffered physical damage by reason of the negligence of the defendant.
That being so, I do not consider that s.60(3)(a) applies in the present matter. The fact that the plaintiff may have made, as is here the case, a special or unusual arrangement with his repairer concerning payment for the cost of repairs does not, in my view, affect the characterisation that should be given to the damages that are awarded.
In Antrim v Hinkley (‘Antrim’),[13] also on appeal from this Court, O’Bryan J held that the Magistrate had erred in awarding interest on damages on a vehicle property damage claim. Notably, that was in circumstances where the evidence was that the repairs had not been undertaken. His Honour upheld the defendant’s argument on appeal because the ‘cost of repairs had not been incurred when judgement was given’. For completeness, I note that in Antrim, the appeal ground was squarely on the basis of s 60(3)(b), which provides that interest must not be allowed for ‘compensation for loss or damage to be incurred or suffered after the date of the award’.
[13] Supreme Court of Victoria, O’Bryan J, 29 March 1994) (‘Antrim’).
According to Counsel for the plaintiff, s 60(1) is clear and, in accordance with the reasoning in Croce,[14] the Court ‘must’ award interest on the full amount awarded to the plaintiff for his loss and damage caused by the negligence of the wrong-doer. There could be no other course taken where the defendant had failed to discharge the requisite onus to show ‘good cause’. Moreover, Antrim was distinguishable from the facts of the present case as, on the evidence in that case, the damaged motor vehicle had not been repaired.
[14] Ibid 30, [73].
Although no submissions were made specific to the consideration of interest on the second category of loss, Counsel for the plaintiff referred to my previous decision, Kinkead v Rositani,[15] a case involving contested hire car charges. There, I stated ‘plus interest’ in finding on the plaintiff’s claim based on the prayer for relief. However, I consider that conclusion to be neither persuasive nor binding given the absence of argument or submissions either way in that matter.
THE DEFENDANT’S POSITION
[15] [2021] VMC 009.
Counsel for defendant, on the other hand, submitted that the Court should follow Antrim (which was decided after Croce) with respect to interest on the cost of repairs. Further, it was contended that s 60(3)(a) had clear application in this case with respect to the consideration of the loss of amenity claim. The case law established that interest is compensatory in nature for when a plaintiff is held out of his money, whereas in circumstances of a credit arrangement (such as the plaintiff’s credit hire car), nothing is paid, and no loss or detriment is suffered to require a compensatory award of interest.
Counsel for the defendant also submitted (incorrectly, as noted above), that Croce was not concerned with s 60(3). In fact, Hayne J specifically ruled out s 60(3) having application and observed that, just because the plaintiff had a special or unusual arrangement with his repairer concerning payment for the cost of repairs, that did not affect the characterisation that should be given to the damages that are awarded.
Furthermore, in Antrim, the Judge observed that it was ‘not disputed that interest should not have been awarded in respect of the cost of hiring a replacement car’.[16]
[16]Antrim (n 13) 4 (O’Bryan J).
On the specific question of whether interest should be awarded on hiring charges for a replacement vehicle, in addition to NSW authorities, the Court was referred to Lord Mustill’s speech in Giles v Thompson:
The argument … proceeds on the basis that the motorist’s cause of action against the defendant, and the financial loss resulting from it, came into existence at the moment of the accident, and was later quantified … when the hiring period came to an end. At this time, so the argument runs, the defendant should have recompensed the motorist for her loss. Thereafter, she was kept out of her money, a detriment for which she should be recompensed by an award of interest. Although this argument seemed logical at first sight, it ignores the fact that the power to award interest is discretionary, and that the exercise of this power should correspond with reality. In the present case although the motorist incurred a genuine liability for the hire charges day by day, it was not a liability capable of immediate enforcement by the hire company. In both practical and legal terms the financial position of the motorist was wholly unaffected by the defendant’s failure to make immediate payment, since … until judgment was given she was not obliged to pay the hiring charges … Thus, although an award of interest is always discretionary, I am unable to detect any grounds on which … the discretion could properly be exercised in favour of the motorist.[17]
[17][1994] 1 AC 142, 167-8 (emphasis in original).
The Court was also referred to Fire & All Risks Insurance Co Ltd v Callinan (‘Fire & All Risks’).[18] In that case, the High Court in joint judgment of five justices, addressed the question of interest, and observed that interest should only be allowed on damages awarded representing compensation for ‘those detriments the practical impact of which has already at the date of judgment been experienced by the plaintiff’.[19] Whilst that case was concerned with interest on damages for personal injury, the High Court articulated the requirement to consider whether the detriment has been incurred in practical sense or not.
[18] (1978) 140 CLR 427 (‘Fire & All Risks’).
[19] Ibid 432.
The High Court put it this way:
A money award is the only compensation which the law can provide in respect of the suffering of those detriments and if interest is to be awarded "on the whole or any part of that sum for the whole or any part of the period" between the arising of action and judgment, … a proper exercise of discretion must necessarily involve the paying of due regard to the time of manifestation and to the duration of the various detriments in question."[20]
[20] Ibid 433.
Counsel for the defendants referred this Court to various reported decisions of the NSW Local Court which have declined to award interest on charges for hire of a replacement vehicle following the approach set out above in Lord Mustill’s speech.[21] An example is Chong v Berry,[22] in which the Court concluded that, since the plaintiff had by his own admission not been ‘kept out of his money’ except in relation to the sum he paid for the excess waiver fee, it was appropriate not to order pre-judgment interest in this particular case. Similarly, in Masrour v Danzey,[23] a NSW Local Court Magistrate declined to make an award of interest because there was no express provision for interest in the hire contract.
ANALYSIS
[21]Giles v Thompson (n 17).
[22] [2007] NSWLC 33.
[23] [2013] NSWLC 9.
The passages cited above from Croce address the application of s 60(3)(a) of the SCA, which limits the Court’s discretion to award interest on certain categories of damages.
In that case, Hayne J drew a distinction between damages for physical damage to property and compensation for liabilities incurred to third parties. His Honour concluded that although the cost of repairs may reflect a liability to a repairer, the damages are not properly characterised as compensation for that liability. Rather, the cost of repairs serves as the measure by which the loss is quantified.
The proper characterisation of the damages was as compensation for the physical damage to the plaintiff’s vehicle caused by the negligence of the defendant.
I consider this Court is bound by Croce, certainly on the facts of the current case, as regards interest on repair costs.
In my view, on the evidence and applying the reasoning in Croce, the invoiced charges for repairs are properly characterised as compensation referable to the fact that an item of the plaintiff’s property suffered physical damage by reason of the defendant’s negligence. As in Croce, there was an express authorisation for the repairs to be carried out for the plaintiff’s benefit, and the plaintiff authorised those charges to be paid directly to the repairer.
By contrast, the towing and storage charges are not reflective of the physical damage to the vehicle itself. Rather, they represent consequential expenses incurred in response to that damage. However, on the evidence, I am satisfied that these charges were reasonable, proximate, and necessary in order to secure, preserve and facilitate the repair of the vehicle. They were also incurred on the plaintiff’s behalf and invoiced directly to him.
Further, in the present case, the authorised charges — including for towing and storage — expressly carried interest, with the invoice stating that unpaid amounts “will carry [interest] at the rate prescribed by section 2 of the Penalty Interest Rates Act 1983”.[24]
[24] PCB, ‘Authority to Repair Store and Tow’, 119 (emphasis in original).
While it is true that the plaintiff was not ‘kept out of his money’ in the literal sense, having not yet paid for the repairs or associated charges, the reasoning in Fire & All Risks supports the view that the relevant detriment was experienced when the plaintiff’s vehicle was damaged and he authorised the remedial work, including towing and storage. At that point, the practical consequences of the defendant’s negligence had manifested, and I am satisfied that the charges were properly incurred and invoiced.
Further, I am not satisfied that the defendant has shown any good reason for why interest should not be awarded regarding the first category of loss.
In contrast, I am not satisfied that interest should be awarded in respect of the hire car charges. Unlike the cost of repairs, which is directly referable to physical damage to the plaintiff’s property and reflected a loss that manifested at the time of the collision, the hire car charges are not of the same characterisation.
In Arsalan v Rixon, the High Court in joint judgment of five justices, referred to the plaintiff’s loss in that regard as commonly consisting of: (i) the physical inconvenience from the plaintiff's inability to use the damaged vehicle during the period of repair; and (ii) loss of amenity or enjoyment of the use of the vehicle.[25] Thus, the loss is less tangible in nature than the physical damage to property.
[25]Arsalan v Rixon [2021] HCA 40, [3], [22] (Kiefel CJ, Gageler, Keane, Edelman and Steward JJ) (‘Arsalan’).
Further, Arsalan confirms that by hiring a substitute vehicle, the plaintiff is taking a step to mitigate that loss.[26] While hire car charges for a substitute vehicle may be recoverable as damages, they are not themselves reflective of damage to the plaintiff’s property.
[26] Ibid [3].
Moreover, in circumstances where the plaintiff has not paid for the hire and is not liable to pay interest on those charges (as in the evidence in this case), an award of interest on hire car charges carries a risk of over-compensation to the plaintiff.
Finally, the plaintiff’s liability under the credit hire agreement had not resulted in any real or practical detriment at the time the agreement was entered into, nor at any time prior to judgment. Although genuinely incurred, it was not a liability capable of immediate enforcement and did not carry interest as against the plaintiff. To say otherwise would not, in my mind, ‘correspond with reality’ in the words of Giles v Thompson.[27]
[27]Giles v Thompson (n 17).
In these circumstances, I am satisfied that there is good cause not to award interest on the hire car charges, and I decline to do so.
Moreover, even if the hire car charges could otherwise be characterised as compensable loss, I consider that s 60(3)(a) operates to preclude the award of interest on this component. On the facts of this case, the liability incurred under the hire car agreement does not carry interest as against the plaintiff. Section 60(3)(a) requires that interest must not be awarded in respect of such liabilities, and accordingly, no interest may be ordered on the hire car charges.
CONCLUSION
For these reasons, I order that the defendant pay interest to the plaintiff on the damages award, excluding such sum as represents the hire car charges.
I will hear from parties as to final orders.
Magistrate M A Hoare
24 April 2025
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