This appeal is a sequel to the decision of the House in Dimond v Lovell [2002] 1 AC 384. It represents a further step in clarifying the obligations of motor insurers regarding the cost of hire of a replacement car while a damaged car is undergoing repair. It is part of the long continuing contest between motor insurers and credit hire companies. The issue raised is narrow, and the amount of money involved in this case is modest. But the issue is important because it raises a principle of general application affecting many people.
When one person's car is damaged by negligent driving on the part of another motorist and the damaged car is economically repairable, the owner of the damaged car loses the use of his vehicle while it is being repaired. In the ordinary course the damages payable by the negligent driver include, in addition to the cost of repairs, damages for loss of use of the damaged car. In the ordinary course the reasonable cost of providing the innocent motorist with a suitable replacement vehicle while his own car is off the road crystallises the amount of loss suffered by him under this head of loss. In practice it is a convenient yardstick by which to measure the damages payable to the innocent driver for temporary loss of use of his own car.
In cases of this type accident hire companies, or credit hire companies, as they are variously known, provide a service additional to hiring out replacement cars. Unlike the arrangements normally made by car hire companies, credit hire companies do not require the motorist to produce an acceptable debit or credit card in advance ('up front'). Nor, in practice, is the hirer required to pay the hire charges in any other way. Instead, when a motorist seeks a replacement car for the period while his own car is off the road, the company checks whether the motorist seems to have an unanswerable claim against the other driver. Having satisfied itself on this score, the company provides the car sought and then seeks to recover its charges from the negligent driver's insurers. For these services, which go beyond simple car hire, credit hire companies charge an additional fee.
In Dimond v Lovell [2002] 1 AC 384 the majority of the House expressed the view that a car owner cannot recover this additional fee element from the negligent motorist or his insurers. The damages recoverable for loss of use are limited to the 'spot rate' quoted by hirers other than accident hire companies. In the case of a hiring from an accident hire company the equivalent spot rate will ordinarily be the net loss after allowance has been made for the additional benefits the accident hire company has provided: see Lord Browne-Wilkinson [2002] 1 AC 384, 390, Lord Hoffmann, at p 403, and Lord Hobhouse of Woodborough, at p 407.
In Dimond v Lovell Mrs Dimond could have found the money needed to hire a…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.