Supreme Court New South Wales Medium Neutral Citation: Lazicic v Rossi [2024] NSWSC 777 Hearing dates: 12 June 2024 Date of orders: 25 June 2024 Decision date: 25 June 2024 Jurisdiction: Common Law Before: Kirk J Decision: (1) Appeal allowed. (2) The judgment of the Local Court in favour of Mr Rossi is set aside. (3) The matter is remitted to the Local Court for determination according to law. (4) The defendant in this Court is to pay the plaintiff's costs of the appeal. Catchwords: APPEAL — Appeal from ex tempore judgment of Local Court Magistrate — Right to reasons — Inadequacy of reasons — Nature of judicial duty to give reasons — Failure to deal with substantial and clearly articulated argument — Failure to consider reasonableness of mitigation — Reasons inadequate — Constructive failure to exercise jurisdiction TORTS — Damages — Mitigation — Damage to non-income producing chattel — Motor vehicle collision — Damaged vehicle unavailable while undergoing repairs — Owner's need for replacement vehicle — Whether rental charges were reasonably incurred — Relevance of range of market rates in determining reasonableness of claimant's conduct Legislation Cited: Local Court Act 2007 (NSW), ss 39(1), 40(1) Cases Cited: Acuthan v Coates (1986) 6 NSWLR 472 Arsalan v Rixon [2021] HCA 40; (2021) 274 CLR 606 British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 Burns v Man Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653 DL v The Queen [2018] HCA 26; (2018) 266 CLR 1 Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313; (2000) 10 BPR 18,235 Kelly v R [2024] NSWCCA 101 Lodge Holes Colliery Company Ltd v Wednesbury Corporation [1908] AC 323 McBride v UK Insurance Limited [2017] EWCA Civ 144 Ming v Director of Public Prosecutions [2022] NSWCA 209; (2022) 109 NSWLR 604 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Public Service Board of NSW v Osmond [1986] HCA 7; (1986) 159 CLR 656 Stocovaz v Fung [2007] NSWCA 199 Watson Norie Ltd v Shaw [1967] 1 Lloyd's Rep 515 Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 Category: Principal judgment Parties: Cameron Lazicic (Plaintiff) Thomas Rossi (Defendant) Representation: Counsel: G Carolan (Plaintiff) CP Carter (Defendant) Solicitors: MCK Lawyers (Plaintiff) RTN Law (Defendant) File Number(s): 2023/00355095 Publication restriction: Nil Decision under appeal Court or tribunal: Local Court Jurisdiction: Civil Date of Decision: 11 October 2023 Before: Magistrate Barko File Number(s): 2022/184409 JUDGMENT 1. On 21 December 2021 there was a car accident in Wollongong involving two vehicles. Mr Lazicic, whom I shall call the appellant, crashed into a relatively new Honda Civic owned and driven by Mr Rossi, whom I shall call the claimant. The Honda was badly damaged and, in due course, was written off by the claimant's insurer. The appellant's insurer, NRMA, accepted that the appellant was at fault and liable in negligence to the claimant. There was no dispute that the appellant was liable to pay for the value of the Honda. 2. Two days after the accident the claimant rented a replacement vehicle, a Hyundai i30, from a company called Right2Drive Pty Ltd (R2D). The circumstances in which he came to do so are described below. He rented the car for 86 days, until his insurer provided him with a replacement Honda Civic. There was no dispute that it was reasonable for him to hire a rental car, not least because he lived in Wollongong but was employed in Sydney. There was no dispute that he needed it for 86 days. There was no dispute that it was reasonable for him to hire the Hyundai, which was of a comparable kind to his Honda. 3. The only point in dispute was about the amount he claimed as payment for the rental car. Under the rental agreement with R2D the claimant had agreed to pay an amount which worked out as $343.31 per day. R2D charged him $29,684.16 for less than three months rental. There was evidence that that amount was greater than the purchase price of such a vehicle. 4. When NRMA declined to pay that sum the claimant instituted proceedings in the Local Court. The case came before Magistrate Barko. His Honour upheld the claim, ordering the appellant to pay the sum claimed along with interest and costs. 5. The appellant now appeals pursuant to s 39(1) of the Local Court Act 2007 (NSW), which grants a right to appeal a judgment or order of the Local Court in its General Division to the Supreme Court on a question of law. Under s 40(1) an appeal can also be brought on a question of mixed law and fact, but only by leave of the Court. 6. Mr Lazicic raises four grounds of appeal: (1) The decision of the Court at first instance failed to disclose adequate reasons. (2) His Honour failed to provide adequate reasons for finding that the defendant (plaintiff below) acted reasonably in mitigating his loss. (3) His Honour failed to address the evidence and the plaintiff's submissions in relation to mitigation of loss, which was the only live issue in the case. (4) Alternatively, as a matter of mixed fact and law, his Honour failed to address the evidence in relation to whether the defendant had acted reasonably in mitigating his loss by hiring a vehicle at a cost of $345.16 per day. 1. The first two grounds are directed at a failure to provide adequate reasons; it seems that the second ground is intended to be an elucidation of the first. It is not necessary to distinguish between these two grounds. The third ground was said to raise a complaint of a constructive failure to exercise jurisdiction. So understood, these three grounds raise questions of law. The fourth ground does not and thus leave to appeal is required. 2. As will appear, the first three grounds are made out. It is therefore unnecessary to consider whether leave should be granted for the fourth ground. Neither party sought that, if any of the grounds were made out, I then determine the reasonableness of the damages claim myself. The case must thus be remitted to the Local Court. 3. Before addressing the first three grounds it is appropriate to set out the factual and legal context in which the issues arise. Context The facts 1. Three witnesses gave evidence below: the claimant; Ms Havva Lachmann of R2D; and Ms Zina Trevisan of the NRMA. The Magistrate accepted the evidence of each of them. Various documents were also in evidence. There are no apparent disputes of fact. The relevant facts are in short compass. 2. According to Ms Lachmann, R2D is a business that provides cars for hire to people "considered to be 'not at fault' in motor vehicle collisions" whilst their cars are repaired or replaced. It appears that it does so on a credit basis, with a view to R2D itself then making a claim against the other driver (and their insurance company) to recover the rental fees. 3. A day or two after the accident the claimant was phoned by a representative of R2D. It is not apparent how that business obtained his phone number. The claimant was offered a rental car. Some time thereafter the claimant signed a rental agreement with R2D by which he agreed to pay certain amounts per day to hire the Hyundai, along with a $95 delivery and collection charge and a $50 sanitisation fee (those figures being before GST). The car was delivered to him on 23 December 2021 and he had it for 86 days until mid-March 2022. R2D then formally issued an invoice to him for the total sum of $29,684.16. Leaving aside the one-off fees, the daily rental charge was $343.31. The rental agreement provided for a further amount to be charged if the car was driven more than 100km per day, but that threshold was not reached and so no such charge was applied. It appears that the claimant was not required to ever actually pay this amount to R2D. Indeed, as the Magistrate noted in his judgment, the claimant had not instructed that the proceedings be brought, he "really did seem somewhat perturbed about why he was present", and it appeared that R2D had exercised a right of subrogation in commencing the proceeding. 4. His Honour recorded that in the phone call in which R2D enticed the claimant to accept a car rental "there was no discussion over payment or anything to do with discount, about rates or otherwise". When the claimant was asked about agreeing to pay "roughly $345 for a pretty ordinary little $22,000 car" he said "I know that now", implying he simply had no idea what rate he was (nominally) being charged. He agreed that he "never made any inquiry". The Magistrate recorded that it was clear that "no other options were considered by the plaintiff", and that the claimant conceded himself of the rates charged that "[t]hat is expensive". 5. There was no evidence the claimant was impecunious, or that he could not afford to pay for a car rental himself absent the credit service provided by R2D. It is apparent that he made no inquiries about the availability of cars from, or the rates charged by, other rental car companies. 6. Each party provided evidence as to the reasonableness of the rates. Ms Lachmann explained that "the setting of the Right2Drive rate is on a particular day made with reference to the immediately preceding day". The rate in question here was set by reference to rates on 22 December 2021 for reasonably comparable vehicles to the claimant's Honda Civic in the Greater Sydney and Wollongong regions. She accessed the company's records for these rates and summarised them in a table, which listed 11 providers for which a Toyota Corolla or Hyundai i30 was available to hire (no Honda Civic being available). All of the providers were either Budget or Avis rental car outlets. The evidence does not appear to disclose why only those two companies were selected for comparison purposes. 7. The lowest all-inclusive daily rate on Ms Lachmann's evidence was $88.10 for a Toyota Corolla hired from Budget in Wollongong. Of the 11 daily rates provided two were below $100, a further four were below $200, a further three were below $300, and only two were above that amount. The second most expensive was $333.09. The highest was $398.19 for a Hyundai i30 vehicle, obtained from Avis at Sydney Airport. There was thus a wide range in the figures. That said, it is unsurprising that the most expensive rate on a date three days before Christmas should be at an outlet at Sydney Airport. 8. R2D's rate of $343.31/day was higher than all but the most expensive of the comparative rates – the Avis Airport rate – apparently obtained by it. 9. The evidence on how R2D set its rate was opaque. In her first written statement Ms Lachmann said that R2D "set our own rates of hire, which are set by reference to the rates in the mainstream hire car market". She said that there was "no component in the rates charged by R2D to its customers for the provision of any credit or cost of litigation". In cross-examination she indicated that the figures for the cars were determined not by her but by a "senior pricing analyst". The Magistrate asked Ms Lachmann "why didn't the pricing analyst charge $99.96 a day like Budget at Wollongong for a Corolla?". She answered: "I can't comment on why not. I don't set the rate your Honour. The pricing analyst will look at the range of rates for the area." The evidence might be taken to suggest that R2D offers claimants a vehicle at a rate somewhat below the highest figure it can identify on the relevant day in the relevant region (where here that region was taken to encompass Wollongong and Greater Sydney). That being said, how R2D came up with its second highest rate is not of any great moment in addressing the legal issue raised. 10. In response, Ms Trevisan of the NRMA also provided evidence of rental car rates, sourced from a database. These figures differed from those provided by Ms Lachmann in the following respects: the relevant date was 23 as opposed to 22 December 2021; the search was limited to Wollongong; a broader range of cars is listed; outlets of two further car rental companies are listed (Hertz and Sixt); and, most significantly, the rates are not all-inclusive. As to the latter point, Ms Trevisan gave oral evidence suggesting that about $30/day should be added to cover the usual additional fees charged by rental companies for the types of vehicle in question. On that understanding, and just focusing on a Hyundai i30 or Toyota Corolla, the cheapest all inclusive daily rate was just under $84 from a Sixt outlet, there was another available at $85.52 from a Budget outlet, and there three more outlets (two Avis and one Hertz) with rates less than $100. These five rates are thus consistent with the lower two rates identified in the evidence provided by R2D. 11. The hearing of the evidence occurred before the Magistrate on 9 May 2023. The matter was stood over to 22 August 2023, with directions made for exchange of written submissions. It appeared to be envisaged that there might be further brief oral submissions made on that day, followed by an oral judgment. Both parties provided written submissions. The claimant sought payment of the full amount claimed by R2D. The appellant submitted that the claimant was only entitled to the amount of $7380.52, calculated based on a daily rate of $85.52/day (supported by one of the rates identified by Ms Trevisan). 12. It appears that the possibility of oral submissions fell by the wayside. For various reasons the matter was further adjourned. His Honour delivered an oral judgment, occupying some 13 pages of transcript, on 11 October 2023. 13. His Honour upheld the claimant's claim in full, ordering payment of $29,684.16 in damages together with interest and costs. Legal principles relating to such a claim 1. Careful and detailed written submissions were provided to the Magistrate by both parties. Legal principles relevant to determination of the issue arising below were identified in those submissions. 2. The principles attending mitigation of loss cases such as this were set out by the High Court in Arsalan v Rixon [2021] HCA 40; (2021) 274 CLR 606 (citations omitted): [32] Where a plaintiff acts in an attempt to reduce a loss, the onus shifts to the defendant to show that the acts actually taken by the plaintiff were unreasonable acts of mitigation. Unless the plaintiff's actions are shown to be unreasonable, costs that are incurred in an attempt to mitigate loss caused by wrongdoing become, by themselves, a head of damage that can be recovered. Even if the costs incurred by the plaintiff are greater than the loss that was attempted to be mitigated, those costs will be recoverable other than to the extent they are shown to be unreasonable. … [36] Once a plaintiff has proved heads of damage of physical inconvenience and loss of amenity of use, it will usually be difficult for a defendant to prove that the plaintiff acted unreasonably by seeking to hire a replacement vehicle. In some cases, a defendant might instead seek to establish that the amount of the hire costs incurred was unreasonable for various reasons: the replacement vehicle hired, in light of the range of vehicles that might fairly be regarded as equivalent to the damaged vehicle; the period of hire, having regard to the reasonable period of time for repairs; or the extent of the costs included in the hire charge. 1. The Court also referred, with apparent approval, to a decision of the English Court of Appeal which upheld a finding of a County Court judge allowing only a lesser amount than had been claimed for replacement car hire: Watson Norie Ltd v Shaw [1967] 1 Lloyd's Rep 515. The High Court noted (at [39]) that in that case: the defendants had established that the plaintiff had acted unreasonably in circumstances including: (i) the plaintiff's hire from a company that was not in the habit of hiring cars; (ii) the plaintiff's failure to make any real enquiry about price; and (iii) the plaintiff's failure to avail itself of a 20 per cent hire discount by paying cash. 1. Put shortly, thus, the legal question is whether the claimant has acted reasonably in incurring the costs that they did. The defendant bears the onus to prove to the contrary. Whether or not the claimant acted reasonably is assessed in all the circumstances. A possible outcome is that a lesser amount is awarded than what is claimed. It is implicit in the High Court's discussion of Watson Norrie, and in any case is self-evident, that significant factors in assessing the reasonableness of the claimant's claim will be what inquiries they made in filling their need for a replacement vehicle, and the availability of other cheaper rates in doing so. It is thus relevant to take account of the market rates of comparable vehicles as at the relevant time. 2. The claimant's submissions referred to various other authorities. Not all of those authorities are entirely consistent with the High Court's subsequent clear statement of principles in Arsalan. 3. One authority cited was Stocovaz v Fung [2007] NSWCA 199, where Handley JA said, in relation to an issue of the cost of repairing a vehicle: [37] … [T]here may not be a single fair and reasonable cost for repairing a damaged motor vehicle, especially a Mercedes costing $95,563 new. There is likely to be a range of costs all of which are fair and reasonable. In such a case acceptable evidence that a lower cost would be fair and reasonable cannot of itself establish that a higher cost was outside the range and not fair and reasonable. [38] The true question would be whether the cost incurred was outside the range. In my judgment this is only another way of asking whether the cost incurred was extravagant or unreasonable. 1. His Honour appears to have been speaking in a kind of shorthand directed to the particular case. The reference to the "true question" being "whether the cost incurred was outside the range" has the potential to mislead if taken out of context. That is not the legal test. To speak of a cost being outside the reasonable "range" is at best the language of conclusion. Rather, the test is whether or not the claimant acted reasonably in acting as they did such as to incur the cost for which they are claiming reimbursement. That principle is not only reaffirmed by Arsalan, it has long been the case: see eg British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 at 689; Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 at 159. Stocovaz certainly should not be taken to suggest that a claimant will win simply by pointing to a range of market prices and saying the rate chosen was not the most expensive one. 2. Neither excessive diligence nor perfection is required of a claimant: note eg Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313; (2000) 10 BPR 18,235 at [187]. As was said in Lodge Holes Colliery Company Ltd v Wednesbury Corporation [1908] AC 323 at 325 by Lord Loreburn LC: Now I think a Court of justice ought to be very slow in countenancing any attempt by a wrong-doer to make captious objections to the methods by which those whom he has injured have sought to repair the injury. ... Errors of judgment may be committed in this as in other affairs of life. It would be intolerable if persons so situated could be called to account by the wrong-doer in a minute scrutiny of the expense, as though they were his agents, for any mistake or miscalculation, provided they act honestly and reasonably. 1. Thus a defendant will not necessarily be entitled to have a claim for hire of a replacement vehicle reduced simply because they can point to one cheaper rate being available in the market. The issue is whether the claimant acted reasonably in acting as they did. But nor, conversely, can it be said that a claimant will have acted reasonably simply because they can point to one more expensive rate in the market than the one that they agreed to pay. Grounds 1 and 2: inadequacy of reasons The duty to give reasons 1. The requirement to give reasons is a normal, though not universal, incident of the judicial process: Public Service Board of NSW v Osmond [1986] HCA 7; (1986) 159 CLR 656, 666-667. There is no dispute that there was a legal duty on the Magistrate here to provide reasons for his decision. 2. There is no immutable standard for the reasons of a judicial officer. It will vary according to the circumstances. Some general principles about what is required to fulfil that duty are apparent. The following explanation was given in Ming v Director of Public Prosecutions [2022] NSWCA 209; (2022) 109 NSWLR 604: [43] What can be seen is that the judicial duty to give reasons does not extend to referring to every argument or piece of evidence. Relevantly for current purposes, what is required is that the judge expose the reasons for resolving a point critical to the contest between the parties, do justice to the issues posed by the parties' cases, refer to evidence that is important or critical to the proper determination of the matter, and generally explain any conclusion on a significant factual or evidential dispute that is a necessary step to the final decision. 1. Similar comments were made in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 (citations omitted): [56] The court is conscious of not picking over an extempore judgment and, too, of giving due allowance for the pressures under which judges of the District Court are placed by the volume of cases coming before them. However a trial judge's reasons must, "as a minimum ... be adequate for the exercise of a facility of appeal". A superior court, "considering the decision of an inferior tribunal, should not be left to speculate from collateral observations as to the basis of a particular finding". 1. In Acuthan v Coates (1986) 6 NSWLR 472, at 479, Kirby P said that in considering the remarks of a magistrate it is "the substance of what the magistrate said and did that the court is concerned with", that reasons are not to be construed strictly, and that "[a]ny other approach would impose an intolerable burden on magistrates". Further, "the provision of adequate reasons does not equate to a requirement that a decision maker provide a lengthy exposition of the law and survey all of the evidence and submissions": Kelly v R [2024] NSWCCA 101 at [78]. 2. In this matter the Magistrate said the following at the conclusion of the oral evidence and when discussing when to set the matter down for judgment: You understand, and I hope everyone does understand, we do our own judgments in our own time with our own resources. We don't have tipstaves, we don't have associates, we have nobody else. We get one day a month allocated for chamber work. What that really means is one day a month to try and catch up with lots of other things. I don't want to, if I can avoid it, do a written judgment. 1. The substantial burden of having to produce judgments in such circumstances should be acknowledged. Allowance must be made for this. It would be unrealistic and unfair in that context to expect magistrates to produce judgments analysing the law and facts with the thoroughness that might be expected of higher courts with somewhat less crushing caseloads. 2. Even so, there remains a duty to provide reasons which consider and address the core matters of law or fact in dispute between the parties. The reasons should be sufficient for it to be apparent to the parties that those core matters have been grappled with, in a reasoned way, and such that they can consider the merits of any appeal. Any appeal court considering the matter should be able to understand the essence of why the judicial officer came to the conclusion that they did on those core matters. As was said in DL v The Queen [2018] HCA 26; (2018) 266 CLR 1 at [33], "reasons will often be inadequate if the trial judge fails to explain his or her conclusion on a significant factual or evidential dispute that is a necessary step to the final conclusion". The issue in dispute and the Magistrate's reasons 1. In the end, here, there was only one issue between the parties requiring determination: whether the claimant had acted reasonably in mitigating his loss by hiring the car from R2D in the circumstances in which he did. 2. That that was the issue in dispute had been clearly identified by both parties. The appellant's defence denied the claim for damages on the bases that the claim was "excessive, exorbitant and/or unreasonable" and the "right of hire claimed is in excess of market rate of higher for a replacement vehicle that is comparable to the damaged vehicle". The defence did also refer to the vehicle being hired on credit, and it was said that the "rate of hire included non-compensable benefits". That issue of non-compensable benefits was the subject of attack by the claimant. But no such issue arose, as the claim was for car hire alone and not for additional benefits such as credit or litigation fees. 3. The claimant's written submissions below identified one of the two issues said to be in dispute as "whether the plaintiff acted reasonably when they agreed to hire a replacement vehicle at the prescribed daily rate of hire they seek to recover". The other issue identified – whether the claimant would have suffered inconvenience without a replacement car – was not in fact disputed by the appellant in the responsive written submissions. Those submissions of the appellant stated simply that the "issue for the court is whether the cost of hiring the replacement vehicle was reasonable, in the context of mitigating the loss". 4. The Magistrate himself referred near the beginning of his reasons to the appellant's assertion that the claimant's claim was excessive, exorbitant or unreasonable. Towards the end of his reasons he stated that the issue in dispute "boils down to the reasonableness of the rates, how they are calculated and the like". 5. It might have been thought that the issue of whether the claimant acted unreasonably in incurring the charges that he did was not one of great difficulty: 1. The claimant undertook no market research. He simply accepted the offer of a car when made to him by R2D. He made no inquiry whatsoever as to what rate or charges he would be paying, and R2D's representative did not volunteer that information. 2. The rate charged by R2D was, on any view, very high and well above what could readily have been obtained from a range of other car rental companies for the same type of car. It was some four times higher than rates for equivalent available cars on each party's evidence. When the claimant belatedly learnt of the rate – in the course of the proceedings below – he himself acknowledged that the rate was expensive. Ms Lachmann of R2D accepted in her evidence that the amount nominally charged to the claimant, for the 86 days hire, was more than it would have cost to buy an equivalent new car. 3. There was no evidence indicating that he needed a car so urgently that it was reasonable for him to take the first offer that came along. Even if there had been such evidence, it would then have been appropriate to consider whether it was reasonable to continue hiring the car at R2D's very high rate once the immediate urgency had passed. 4. There was no evidence indicating the claimant's financial position was such that the only way he could obtain a replacement car was on credit: cf Burns v Man Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653 at 658-660. Even if there had been such evidence, it would then have been appropriate to consider whether there were other options reasonably open to him other than accepting R2D's very high rates. 5. The mere fact that there was one or more higher rates charged by someone somewhere in the Greater Sydney region for car hire on or around the day he first hired the car did not establish that the claimant had acted reasonably. 1. This case is not an appeal on the merits of his Honour's decision. However, the above considerations put into relief how his Honour did actually express his reasons in concluding that the claimant was entitled to recover the full amount claimed. 2. There was no need for the Magistrate's reasons to have been lengthy. All that was necessary was to identify the issue in dispute, refer to the legal test that applied, summarise the key evidence going to that issue, then explain whether or not and why the appellant had made out its onus to show that the claimant had acted unreasonably in incurring the costs. If the Magistrate had concluded that the onus had been discharged, then it would have also been necessary to address briefly what lower sum would be ordered and why (recalling that the appellant had submitted that it was liable for an amount of $7380.52). 3. Some of what his Honour said did not seem to the point of resolving the sole issue in dispute, in what was a rather discursive judgment, but those aspects may be set aside. As noted, his Honour did identify the issue in dispute. His Honour did refer to much of the relevant evidence. He referred to applicable cases. In the middle of his Honour's reasons he stated, correctly, that "every one of these cases turns on its facts and circumstances to a great extent". That statement illustrated that it was necessary for his Honour to engage with the facts of the case, explaining they why those facts did or did not establish unreasonableness. Where the reasons fall down is at the end, in drawing the threads together to reach and explain his conclusion. 4. His Honour's reasoning on reasonableness is contained in the concluding paragraphs of the judgment, as counsel for the claimant accepted. I have numbered them here for ease of reference: [1] As I said, I also accept the honesty, reliability, and accuracy of the business witnesses that were called by the respective parties. As I said earlier, there are so many variables in these proceedings and, factually, it is very difficult. But at the end of the day, the essence of the plaintiff's case is, your Honour might be pained by how much it costs per day to hire a Hyundai 130, but that was in the reasonable range of damages given all the surrounding circumstances, all the variables and everything else taken into account. [2] Of course, the plaintiff's position, through the subrogated contractual rights to Right2Drive, is that, look, "I could have had the car for two days. If they had agreed to liability and they had sent me back to a new Honda dealer, I could have had a car before Christmas". So I am certainly satisfied that the defendant has failed to satisfy me on the balance of probabilities that the plaintiff did not act reasonably in mitigation of his loss. There was the delay in liability and he was awaiting a new car. There was the delay for reasons expressed. [3] There is no evidence that he had any part to play in any of that delay whilst the move to the motor vehicle existed. No doubt there will be some more work done in respect of these sorts of matters to fine-tune issues that I have commented upon or highlighted and that, of course, is going to cost somebody further time, effort and money. But I do remind the parties that the likelihood is one of two things: parliament will intervene or the small claim monetary jurisdiction will be raised to $40,000 or $50,000. Then, of course, there is every prospect for legal costs being capped. [4] I am satisfied and find, given the admissions by the parties, that the relevant hire car period was satisfied as not being unreasonable and being foreseeable, essentially. There is no issue about liability and I am also satisfied and find on the balance of probabilities that the plaintiff's claim for the damages sought is made out. 1. The first paragraph does refer to the hiring being "in the reasonable range of damages given all the surrounding circumstances". As explained above, the legal issue is in fact whether the claimant acted unreasonably in incurring the charges he did. The fact that a claimant can show that there is a more expensive alternative does not establish that they did not act unreasonably. In any event, that statement is part of summarising the claimant's case. It is at best a start of the analysis. 2. In the second paragraph the Magistrate addresses an issue relating to the timing of when, and for how long, the car was obtained. But that was not what was in dispute. No argument was put by the appellant that the claimant could not claim for the full 86 days. No argument had been put by the claimant that there was no other practical option available given the Christmas season. His Honour does suggest in this paragraph that for that reason "I am certainly satisfied that the defendant has failed to satisfy me on the balance of probabilities that the plaintiff did not act reasonably in mitigation of his loss". That did address the correct legal issue but not the arguments made as to why that conclusion should or should not have been reached. 3. The only relevant point made in the third paragraph is in the first sentence, which again relates to issues of timing. 4. The fourth paragraph again expresses conclusions. The first sentence is again directed to an issuing of timing. The second sentence expresses his Honour's ultimate conclusion. 5. Nowhere in these paragraphs, nor elsewhere in his judgment, does the Magistrate address why he was rejecting the appellant's arguments that the claim should not be allowed because the claimant did not act reasonably in accepting R2D's rates. His Honour did not address why it was reasonable to accept that rate when it was so much higher than other available rates. He did not explain why the claimant acted reasonably when (to quote the appellant's written submissions below): Mr Rossi made no internet searches or enquiries to ascertain what cars were available for hire and at what prices. It seems that he was blissfully oblivious to the price he had agreed to pay and what that meant in terms of his potential legal liability. He was content to pass on the cost to the defendant, regardless of whether it was reasonable or not. 1. Counsel for the claimant sought to argue that case was about "non-compensable benefits", and that his Honour's reasoning on this point was therefore properly directed to the question at hand. Arguments about such benefits might conceivably arises in cases where there was a need to hire a vehicle on credit, or where there was some particular significance to the fact that there were litigation recovery services involved: cf Arsalan at [33]. But, as already explained, that was not the issue in dispute. No such need to hire on credit was established. And R2D's charges did not include amounts for credit hire or for litigation services. Moreover, his Honour did not address the point anyway (for which he cannot be criticised, given it was not in dispute). 2. The respondent similarly sought to frame the appellant's argument as taking issue with the fact that the Magistrate did not engage with the case of McBride v UK Insurance Limited [2017] EWCA Civ 144, which had been cited by the appellant. That argument mischaracterised the gravamen of the appellant's arguments. 3. In short, his Honour did not express any reasons for why he was rejecting the case put by the appellant in the terms in which it had been put. It was not sufficient to summarise the evidence of either side, refer to the law, and then state a conclusion. His Honour thereby failed to comply with his duty to provide reasons for his conclusion. That is legal error: Ming at [35]-[36]. The error is certainly sufficient to uphold the appeal. Ground 3: constructive failure to exercise jurisdiction 1. The applicant's third ground in effect alleges a constructive failure to exercise jurisdiction. In Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088, Gummow and Callinan JJ held that for a decision-maker "[t]o fail to respond to a substantial, clearly articulated argument relying upon established facts" was both a constructive failure to exercise jurisdiction and a failure to accord natural justice (at [23]-[25], Hayne J agreeing at [95]). Kirby J similarly found a constructive failure in that case where the decision-maker's mistake "amounts to a basic misunderstanding of the case brought by an applicant" (at [88]). The nature of this ground of review is further discussed in Ming at [12]-[18]. Jurisdictional error is error of law sufficient to ground an appeal under s 39(1) of the Local Court Act. 2. The answer to this third ground overlaps substantially with the answer to the first two grounds. The legal question here was whether the claimant acted reasonably in acting as he did to incur the rental car expenses. The appellant argued that he had not. The Magistrate did not engage with the substantial, clearly articulated arguments put by both sides in rejecting that argument. 3. Ground 3 is thus also made out. The Magistrate constructively failed to exercise his jurisdiction. The process of decision-making has not validly been completed. Orders 1. The appellant is entitled to succeed in the appeal. The judgment of the Local Court, including as to costs, should be set aside (the appellant did not identify the precise orders made). There is no reason why costs in this Court should not follow the event. Costs of the proceedings below should be left for determination by the Local Court on remitter. 2. The orders of the Court will be as follows: 1. Appeal allowed. 2. The judgment of the Local Court in favour of Mr Rossi is set aside. 3. The matter is remitted to the Local Court for determination according to law. 4. The defendant in this Court is to pay the plaintiff's costs of the appeal. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 June 2024