Local Court of New South Wales CITATION: Lambros v Riethmuller [2006] NSWLC 26 JURISDICTION: Civil PARTIES: Mike Lambros Craig Riethmuller FILE NUMBER: 1198/04 PLACE OF HEARING: Downing Centre Local Court DATE OF DECISION: 10/04/2006 MAGISTRATE: Magsitrate B A Lulham CATCHWORDS: Civil - Assessment of damages - Motor vehicle property damage claim - Basis of assessment of damages - Fair and reasonable costs of repair - Whether plaintiff entitled to indemnity - Evidence - expert evidence - can party engage itself or employee as expert witness - Applicability of Code of Conduct LEGISLATION CITED: Evidence Act 1995 S.79 Uniform Civil Procedure Act R.33.2(3), R.31.18 The Poctolus SWAB 1079 Darbishire v Warran 1963 WLR 1067 (CA) Harriton v Stephens 59 NSWLR 694 Kostik v Giannakopoulos S.C SA 2930 of 1988 CASES CITED: Kirch Communications Pty Ltd v Gene Engineering Pty Ltd 2002 NSWSC485 Collins Thompson v Clayton (2002) NSWSC 366 Makita Pty Ltd v Sproules (2001) 52 NSW LR 705 Sydney Wide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) FC AFC 157 Keller v R (2006 NSW CCA 2004) Mr J Gruzman - Counsel Mason Black - Solicitors REPRESENTATION: Mr K J Manion - Counsel C K B Partners - Solicitors ORDERS: Judgement for the plaintiff in the sum of $13,491.50; The plaintiff will be entitled to interest on that amount from 1 April 2004 to be calculated by the Registrar; Costs follow the event. The defendant is to pay the plaintiff's costs and disbursements as agreed. In default of agreement within 28 days the costs are to be assessed under the Legal Profession Act BACKGROUND TO DISPUTE 1 The plaintiff Mike Lambros owned a Mercedes Benz SLK230 Compressor convertible. The vehicle was about fifteen months old and had travelled approximately 15,000 kilometres. The plaintiff's vehicle was damaged in an accident which occurred on 17 December 2003. The defendant Craig Riethmuller was driving a Pajero 4 wheel drive, which vehicle struck the plaintiff's vehicle in the rear. The plaintiff took his vehicle to the repair premises of Perfect Autobody Pty Ltd (hereinafter referred to as 'Perfect Autobody') at 22 O'Riordan Street, Alexandria. His vehicle was comprehensively insured with IAG formerly NRMA (and referred to as 'NRMA' in this judgment). A quotation was prepared dated 19 December 2003. NRMA Loss Assessor and employee Mr Todd Wainwright inspected the vehicle on 19 December 2003. Some reductions were made to the quotation. The vehicle was repaired and a tax invoice was prepared by Perfect Autobody totalling $15,054.76. Mr Wainwright's report was tendered as Exh.1. 2 The defendant's vehicle was comprehensively insured by AAMI. Its Technical Loss Assessor Mr Mark Nunn reviewed the repair quotation from Perfect Autobody. He assessed the fair and reasonable cost of the repairs to be $9,252.94. His report was tendered as Exh.5. Subsequently, following the commencement of court proceedings, AAMI arranged for its Loss Assessor and employee Mr Scott Matthews to inspect the plaintiff's vehicle on 21 May 2005. Mr Matthews assessed the fair and reasonable cost of the repairs of the plaintiff's motor vehicle at $8,731.47. Mr Matthews' report was tendered as Exh.4. 3 The NRMA having paid the repairs sought to recover them from AAMI. The proceedings were brought and defended pursuant to each insurers' rights of subrogation in the names of the vehicle owners. However, the real dispute was between the two publicly owned and listed insurance companies. The only witnesses called were the Loss Assessors Mr Wainwright and Mr Matthews. 4 The plaintiff filed a Statement of Claim on 28 October 2004 seeking payment of the sum of $15,054.76 plus interest and costs. The defendant filed a Defence on 16 February 2005 admitting liability, but denying quantum. On the same day the defendant filed a Part Confession in the sum of $9,252.94 plus interest and costs. The amount confessed to was the same as Mr Nunn's assessment. The amount in dispute for the repairs was therefore an amount of $5,802.82. Mr Matthews's subsequent assessment increased the amount in dispute by $521.47 to $6,354.29. 5 This matter is typical of many matters presently before the court involving the same factual situation. Perfect Autobody is the only repairer authorised by Mercedes Benz. In this matter, as part of Exh.A various photographs were tendered without objection, showing the repair and office facilities of Perfect Autobody. Such photographs indicate a very large spacious purpose built repair facility which would appear to be capable of repairing up to fifty vehicles at the one time. The evidence indicated that Perfect Autobody held itself out as specialising in the repair of prestige motor vehicles. The matters presently before the court arise out of the situation where the owner of the prestige vehicle not at fault in the accident was insured with the NRMA. The NRMA assessor approved the repairs for the vehicle. The party at fault in the action was insured by AAMI. AAMI dispute that the costs of the repair are fair and reasonable. Proceedings are then commenced in this court for the cost of the repairs, but the actual amount in dispute is the difference between the amount charged by Perfect Autobody and approved by the NRMA, and the cost of repairs as assessed by AAMI. Such matters presently take a very considerable amount of this court's available hearing time. The amount in dispute, being the difference between the two assessments of the cost of the repairs is usually less than $10,000. In this matter Mr Gruzman appeared for the plaintiff and Mr Manion for the defendant. The same Counsel appear for the NRMA and AAMI respectively in almost all of the similar matters before the court. THE ISSUES 6 The issues appear quite simple; What is the amount of money which the plaintiff is entitled to recover from the defendant for the cost of the repairs paid for by the plaintiff? The determination of that question by the court in this and similar matters has raised difficult factual and legal questions which have been litigated by the insurance companies with great vigour and tenacity. Particular problems have arisen as to how the evidence of the loss assessors, who are called by each insurance company and who are usually the only witnesses, should be treated having regard to the principles relating to the evidence of expert witnesses. Moreover, the determination of the factual matters are complicated enormously by an artificial historical and fictitious method adopted to prepare and assess quotations for the repairs of motor vehicles in New South Wales. Such method is referred to in the industry as 'Funny Time-Funny Money'. 7 Quite fortuitously the leading cases on the principles of the measure of damages for property damage caused by negligence are those involving the repair to ships damaged in collisions. I find it fascinating that Lord Lushington exactly 150 years ago in The Pactolus (SWAB 1079)(which the learned author of McGregor on Damages refers to as the first reported case on the point) stated; "First, it is not to be expected that Courts can have any practical knowledge as to what repairs were necessary in consequence of the collision or whether the charges made for such repairs are fair and just, and these are the questions to be determined…Secondly, the principle upon which these reports should be founded is, I apprehend, undoubted; the parties are entitled to restitution in integrum, to a complete repair of all the damage done…With regard to the bills incurred for such expenses, they must necessarily, for the purposes of justice, be submitted to examination and extravagant charges lowered by the opinion of persons conversant with the trade; but I must say that it is a very arduous task for the Court to decide when such opinions are conflicting… There are two grounds upon which no doubt such reductions would be justified, provided the evidence established the fact; first, if the bill be extravagant, the charges exceeding the ordinary and accustomed rate; secondly if the work done was not rendered necessary by the collision. With regard to the first head, it appears that the registrars and merchant were of the opinion that the charges were high, and that a greater discount ought to have been allowed, and accordingly they deducted L94 (English Pounds). Now this is a matter upon which they were peculiarly competent to form a correct opinion, and I am not satisfied by the evidence that they have miscarried…" 8 All magistrates sitting in the Downing Centre 150 years later would agree that they find trying to establish a fair and reasonable cost of repairs to motor vehicles 'is a very arduous task for the courts to decide when such opinions are conflicting'. That is the court's task in this matter. 9 I propose to discuss the issues raised under the following headings; (i) The measure of damages (ii) Practices within the insurance industry – funny time-funny money (iii) Consideration of the principles in relation to expert evidence (iv) Consideration of the evidence in this matter THE MEASURE OF DAMAGES 10 The measure of damages in a claim for the recovery of the cost of repairs to a motor vehicle has been regarded as being the reasonable cost of the repairs to put the car in the same condition as it was before the collision. The learned author of McGregor on Damages (15th Ed, para 1247) set out the principle as follows; The normal measure of damages is the amount by which the value of the goods damaged has been diminished. This, in the ship collision cases, has invariably been taken as the reasonable cost of repair. As Greer L.J. said in The London Corporation (1935) p.70, 77(C.A.) "Prima facie, the damage occasioned to a vessel is the cost of repairs – the cost of putting the vessel in the same condition as she was in before the collision, and to restore her in the hands of the owners to the same value as she would have had if the damage had never been done; and prima facie, the value of a damaged vessel is less by the cost of repairs than the value it would have if undamaged." In the case of goods other than ships the cost of repair has now become established as prima facie the correct measure of the plaintiff's loss. This has been accepted in a number of cases at first instance, and is confirmed by Darbishire v Warran (1963) 1W.L.R. 1067 (C.A.) where it was said by Harman L.J. that "it has come to be settled that in general the measure of damage is the cost of repairing the damaged article." Moreover if, despite the repairs, the market value of the goods is less than before, the plaintiff should be entitled to such diminution in value in addition to the cost of repair. Thus in Payton v Brooks (1974) R.T.R. 169 (C.A.) Roskill L.J. said: "There are many cases … where the cost of repairs is a prima facie method of ascertaining the diminution in value. It is not, however, the only method of ascertaining the loss. In a case where the evidence justifies a finding that there has been, on top of the cost of repairs, some diminution in market value … I can see no reason why the plaintiff should be deprived of recovery under that head of damages also." 11 Mr Gruzman submitted that the principles referred to above from McGregor on Damages have as their bases the principle of 'restitutio in integrum'. Mr Gruzman went on to submit that it followed from that principle that the plaintiff was entitled to be put in the same position as though the damage had not happened and was therefore entitled to be indemnified by the defendant. Mr Gruzman, as I understand it, was submitting that if the plaintiff had paid the cost of the repairs to his vehicle then, unless it was proved that part of the amount claimed for repairs related to a procedure which was not necessary, or was a procedure not rendered necessary by the defendant's negligence, then the plaintiff was entitled to succeed. As I understood his submission it was that the onus was not on the plaintiff to prove that the cost of the repairs were fair and reasonable, but that they were necessary and were required as a result of the defendant's negligence. 12 For completeness I set out his written submissions on this point; 7. The plaintiff contends that the normal measure of damages to which the plaintiff is entitled is the amount by which the value of the Mercedes has been diminished, which in the shipping cases, has been taken as the cost of putting a vessel in the same condition as she was in before a collision and to restore her in the hands of the owner to the same value as she would have had if the damage had not been done; prima facie this is the value of the repairs. ( The London Corporation ( 1935) P70 C.A. at 77) 8. The principle of restitutio in integrum is to be applied; that is the plaintiff is entitled to an indemnity in respect of its loss by virtue of the obligation to undertake a restitution. "The principle is that of restitutio in integrum, that is to say it 'put the plaintiff in the same position as though the damage had not happened.' (Derbyshire v Warran 1963) 3All E310 at 312) 9. As a true restitution cannot be achieved, the courts have identified the obligation of a defendant to put the plaintiff, so far as money can do it, into the same position as if the wrong had not been suffered. (Liesborsh Dreder v Eddison SS (1933) AC at 439). 10. Having incurred the sum of $15,054.76 the plaintiff says it is entitled to a verdict by way of an indemnity in that sum unless it is demonstrated that part of that amount relates to a procedure that was not necessary or a procedure that was not rendered necessary by the defendant's negligence. 13 Clearly some Judges, particularly in the old shipping cases, when considering the quantum of damages, referred to the principle of restitutio in integrum. Lord Lushington did so in the quotation from The Pactolus set out at paragraph 6 hereof. The reference to the principle now appears to be regarded as an error. This was made clear in the decision of Harriton v Stephens 59 NSWLR 694 where His Honour Ipp JA when referring to the established compensatory principle relating to the action for damages, referred to the old shipping cases and had this to say; '226 I would add that, for a period from the early part to about the middle of the last century, courts in England, particularly when referring to cases of damage to ships, made reference to the measure of damages as being the principle of restitutio in integrum: see for example the Admiralty Commissioners v SS Valeria [1922] 2 AC 242 AND THE Dredger, Liesbosh [1933] AC 449. This was later said to be incorrect terminology. Indeed, even in the Admiralty Commissioners v SS Valeria, Lord Dunedin criticised this usage by the Court of Appeal. He said (at 248): "… I agree with the Lords Justices in the Court of Appeal, but I cannot refrain from a slight criticism upon the use of the phrase 'Restitutio in integrum.' 'Restitutio in integrum' is a phrase which is properly applied when you wish to express the condition which is imposed upon a person seeking to rescind a contract. I do not think it can be properly applied to questions of tort." This criticism was repeated in British Transport Commission v Gourley [1956] AC 185 by Earl Jowitt (at 197) and Lord Goddard (at 208). The criticism does not reflect on the compensatory principle itself, merely on the terminology used to describe it (see the discussion in McGregor, operation cit at 1-023). 227 In these cases the courts were applying the established compensation principle as stated in Livingstone v Rawyards Coal Co but were making the point that it is inappropriate to describe tortious damages as restitutio in integrum damages. This is because, in applying the established compensatory principle, the courts can only attempt to arrive at a fair estimate – true restitution not being possible. This approach is a reflection of the views of Lord Shaw in Watson Laidlaw (referred to by Kirby J in Cattanach v Melchoir ). 14 I can find no authority to support paragraph 10 of Mr Gruzman's submission that the plaintiff is entitled to an indemnity. I am satisfied that the correct position applicable to this case was set out by His Honour Ipp JA in Harriton v Stephens above and by Lord Pearson in Darbishire v Warran (p315 at E) as follows; "The plaintiff is not entitled to charge the defendant by way of damages any greater sum than that which he reasonably needs to expend for the purpose of making good the loss. In short, he is fully entitled to be as extravagant as he pleases, but not at the expense of the defendant." 15 I am satisfied that the appropriate principle is that the onus is on the plaintiff to establish that the costs of repairs carried out to his vehicle to repair the damage caused by the defendant is fair and reasonable. The essential point however is as stated by His Honour Ipp JA in Harriton v Stephens that; ' The courts can only attempt to arrive at a fair estimate – true restoration not being possible.' I am satisfied on the basis of the evidence in this case and adopting the statement of His Honour Ipp JA, that in relation to the repairs of motor vehicles in general, but particularly in the case of the repair of prestige motor vehicles, there may be a range of charges for repairs which might differ considerably but still come within the expression of 'fair and reasonable'. That finding is re-enforced by the evidence which I will refer to in this case as to the approach and practices adopted by insurance companies in assessing vehicles which make the assessment of that 'fair estimate' by the court, extraordinarily difficult. 16 Such difficulties can only extend the range of charges which will come within the definition of 'fair and reasonable'. 17 Some assistance as to the extent of the range of charges which will come within the expression 'fair and reasonable' is gained from a consideration of the authorities. It is significant that Lord Lushington in The Pactolus in the quotation already set out (paragraph 6 hereof) referred to the need for extravagant charges to be lowered. True it is that he then approved a reduction by the Registrars, whose opinions were that the charges were high. Lord Pearson in Darbishire v Warran referred to the plaintiff not recovering expenses which were extravagant. In fact the damages sought to be recovered in Darbishire v Warran was an amount twice the replacement value of the vehicle where it was further found that the plaintiff had made no attempt to find a replacement vehicle. 18 Mr Gruzman further submitted that as the plaintiff had paid the amount of the repairs, the sum claimed was therefore in the nature of 'special damage' which defined the plaintiff's actual loss. Mr Gruzman submitted that the measure of damages should be approached in the same way as the court approaches the assessment of special damages in compensation cases, namely that the amount claimed and paid should be allowed unless the defendant calls evidence to prove that the amount claimed is not fair and reasonable. 19 Mr Gruzman relied on the decision of the Full Court of the Supreme of South Australia in Kostik v Giannakopoulos (Supreme Court South Australia, Full Court 2930 of 1988). I am not convinced that the case supports Mr Gruzman's submission. Mr Manion, in his helpful submissions, also referred to the case of Kostik's case. Although the case was dealing with a claim for damages for personal injuries and the matter in dispute related to a claim for part of the special damages being the cost for physiotherapy charges, nevertheless I found the case quite instructive and I set out the following excerpt; 'Only one item of the special damages was attacked on appeal. That was the amount allowed for physiotherapy charges, namely $5,114. This was the amount charged by Mr A Minucci for his physiotherapy services. At the trial it was contended that the respondent had been grossly over-serviced in this regard. That contention was rejected by the learned trial judge and was not renewed upon the appeal. Counsel for the appellant contended, however, that the charges made were excessive. A plaintiff is entitled to recover only the reasonable cost of the treatment which he requires. A reasonable amount of latitude may properly be allowed in choosing professional advisers and providers of treatment and the cost of treatment need not be regarded as unreasonable simply because the treatment might have been obtained more cheaply elsewhere, Wyld v Bertram (1970) SASR 1. A plaintiff cannot recover, however, exorbitant charges made by those from whom he has obtained treatment. The onus is on the plaintiff to establish the reasonableness of the charges which he seeks to recover. In the generality of cases, of course, where no issue is taken with the reasonableness of the charges claimed, no evidence on this point is necessary. Where the reasonableness of the charges is challenged, it is necessary for the plaintiff to establish their reasonableness by evidence. The evidence called by the respondent to establish the reasonableness of physiotherapy charges was that of the physiotherapist, Mr Minucci, himself. Mr Minucci gave evidence that the charges which he made were substantially in excess of those recommended by the Australian Physiotherapists Association. Indeed if the charges were made in accordance with the fees recommended by the Australian Physiotherapists Association they would total not $5,114 as claimed but only $2,891`1.80. Mr Minucci's only explanation of the higher charges was that "the Private Practitioners Group of South Australia, a special group of the Australian Physiotherapists Association, recommends that these fees be charged for third party claims unless the actual payment is made within 30 days when we revert back to recommended fees". The justification put forward for charging higher fees was "because of the delays that we had experienced in the past with payment of accounts of up to 3 years, we sought our own legal advice and accounting advice which suggested that if the recommended fee should be thus at the point of contact, as long as the patient – there is a notice in our waiting room etc, to say that's the case and all accounts should have had a slip that went with it to say that that's the case, explaining the situation". It was not suggested by Mr Minucci or on behalf of the respondent that the fees recommended by the Australian Physiotherapists Association were other than reasonable charges for the services rendered. I think that it is proper therefore to accept those recommended fees as the fair and reasonable cost of the treatment rendered. A defendant cannot reasonably be expected to pay by way of damages a surcharge imposed simply because there is a claim for damages. I think that it would be reasonable for a provider of treatment in such circumstances to stipulate with the patient for the payment of reasonable interest upon the charges during any period of delay in payment. If a plaintiff obligated himself in consequence of such a stipulation to pay interest, the treatment charges would no doubt form part of that component of an award of damages which would bear interest pursuant to s30c of the Supreme Court Act. No agreement to pay interest was proved in the present case. The reasonable cost of physiotherapy treatment as proved by the evidence was $2,811.80. The amount of special damages should be reduced by $2,302.20 to $7,206.' 20 I am satisfied that the following principles are confirmed by the decision; 1. The onus is on the plaintiff to establish the reasonableness of the charges which he seeks to recover. 2. The cost of treatment (or repair) need not be regarded as unreasonable simply because the treatment (or repair) might have been obtained more cheaply elsewhere. 3. Where the reasonableness of the charges is challenged, it is necessary for the plaintiff to establish their reasonableness by evidence. 4. In the particular facts of the case the court found that the reason for the higher charges (the delay usually encountered by physiotherapists in receiving payment in accident cases) was in the nature of a surcharge imposed simply because there is a claim for damages, and was not therefore fair and reasonable. 21 I am satisfied those principles will be of some assistance in this case. However, I am not satisfied that such case or the other matters referred to by Mr Gruzman justify his final submission on the measure of damage, which was as follows; '14. In the absence of the defendant demonstrating that the work done was not rendered necessary by the collision or the charges were extravagant, exorbitant or grossly excessive, then the plaintiff should be awarded the sum of $15,054.76 for the repairs.' 22 I reject that submission. I am not satisfied the cases relied upon support his submission. I confirm my view that the appropriate principles are; 1. The plaintiff has to prove that the work done was necessary (1) as a result of the damage caused by the defendant, and (2) to restore as close as possible the vehicle to its pre-accident condition. 2. It is for the plaintiff to prove that the costs of the repairs are fair and reasonable. 3. The court can only come to a fair estimate of the fair and reasonable costs indicating that there will a range of costs which will be fair and reasonable. 4. To be outside the range the costs would have to be exorbitant or extravagant or at least high. FUNNY TIME-FUNNY MONEY 23 It was not argued in this case that the plaintiff had failed to mitigate his loss. In my view the defendant was not able to do so. The plaintiff took his vehicle to the Mercedes Benz authorised repairer. The repairs were assessed and approved by the NRMA. There could be no criticism of the actions of the plaintiff. 24 I have received very helpful written submissions from the parties as follows; Plaintiff: Mr Gruzman 9.6.2006 In reply 6.9.2006 Defendant: Mr Manion 4.7.2006 I have considered carefully all of their submissions even though I may not specifically refer to them. There was some delay in my preparing this judgment. Mr Manion used a tape of the proceedings to prepare his submissions and that necessitated me obtaining a copy of the transcript which originally I did intend to do. 25 Much of the evidence was directed towards the usual practice adopted by repairers in New South Wales. The evidence established that as a result of an earlier dispute as to the basis and fees charged by repairers, it was agreed that the Insurance Council would fix the hourly rate and that the Motor Traders' Association (hereinafter referred to as 'the MTA') would fix the time to be allowed for the removal and repair of various parts of motor vehicles. Mr Matthew's report stated that the MTA Guide was attached to the report. That was not done. Mr Gruzman called for the production of the Guide. The defendant's solicitor produced a copy of the Guide, but it was not tendered. That was unfortunate as it means that in the preparation of this judgment, I have to rely on what the witnesses said as to what was in the Guide, rather than being able to refer to the Guide itself. 26 The evidence indicated that the 'hourly rate' used as the basis for quotations and by assessors in estimating the fair and reasonable costs of repairs were as follows; ' MTA – A rate between $29 and $31 NRMA – $30.90 Perfect Autobody – referred to a unit charge of $30.90 27 Both assessors agreed that such figures although used almost universally in the repair industry, were fictitious. They did not represent the actual hourly rate charged by any repairers. The figure is fictitious and it is completely misleading to refer to that figure as an hourly rate. Both assessors agreed no repairers could do the work for $30.90 per hour. They would go out of business. 28 Mr Manion criticised Mr Wainwright severally and criticised the practice of Perfect Autobody because it does not refer to the figure it uses as an hourly rate, but simply as a unit worth $30.90. I found such criticism completely unwarranted. Perfect Autobody's practice at least removed one fiction from the method used to calculate fair and reasonable repairs. I find that the move by Perfect Autobody to be proper and sensible. 29 I found Mr Manion's criticism of Perfect Autobody's practice surprising as the evidence of Mr Matthews was that AAMI has moved to a system whereby repairers preparing quotes for that company merely state the dollar amount quoted but on the basis that AAMI assess quotes on a unit fee or fictitious hourly charge of $30.00. Mr Manion's report attached a copy of the quote received by AAMI for the repair of Mr Reithmuller's car. It had a repair amount of $45.00. Mr Matthews said he assessed that quote on the basis of 1.5 fictional hours at $30.00 per fictional hour. 30 The practice for quotations to be based on the basis of a figure of $30.00 (or a figure close to it) was surprising, but I have to accept it. Apparently repairers and loss assessors have been preparing quotations on the basis of a price of $30.00 (fictitiously referred to as an hourly rate of $30.00) for so long, that both repairers and assessors now invariably quote and assess repairs on the basis of amounts of $30.00. I questioned both of the assessors. They both gave evidence that if asked to give an estimate for the repair of a certain part, say a bumper bar, both assessors said that they would calculate the fair and reasonable costs as being three units and therefore $90.00. Both said they would approach the task by considering how many units or fictitious hours of $30.00 the job would take. They would not assess the job in terms of real time or real money. 31 I note that Mr Matthews (AAMI's Loss Assessor) agreed that the figure of $30.90 should not be referred to as an hourly rate, and said as follows (T02/05, p32,L5-10) in cross examination by Mr Gruzman; Q. "So the time when they quote time or hours it may as well be called a unit, because its not time, is it?" A. "You could call it anything, yes." Q. "So when Perfect records something as a unit, they're actually being more truthful about what's going on by saying "this is not time, but it is a multiplier that we use"?". A. "Maybe that's the case, but.." Q. "You wouldn't want to criticism them for that, would you". They're actually being truthful about how they're going about preparing their document?" A. "No I'm not criticising." FUNNY TIME-FUNNY MONEY Funny time 32 It may be that when the figure of $30.90 (the figure allowed by the NRMA) was originally agreed upon it may have represented proper value and return for an hour's work. Clearly today it does not, and to complete the fiction, both assessors before me agreed that the time allowed to do the various items of repair is over generous by approximately three times. Mr Matthews gave the following evidence in chief (T02/05, p19); Q. "Were you able to compare the actual times that it was taking your enterprise to perform tasks to the MTA suggested times?" A. "I was." Q. "What was your experience overall?" A. "They were carried out in much less time than the suggested MTA rate." Q. "Is there any sort of average figure you are able to give us in relation to that time or range?" A. "A third of the allowance suggested by the MTA is a rough gauge." 33 Mr Wainwright gave similar evidence. The result is that the MTA Guide might allow three hours for the repair of a certain part of the vehicle, and on that basis the appropriate cost would be three times the figure of $30.90, making the recommended quotation in accordance with the MTA Guide to be $92.70. However the work would not take three hours. It would take about one hour, so that the quotation would give the repairer a true hourly rate of $92.70. 34 Both loss assessors confirmed that no repairers or insurance companies access quotations based on real time and real money. As indicated previously the evidence was that using the figure of $30.90 as the basis of preparing quotations and assessing work is so entrenched, that it is universally used in the industry. 35 The very considerable practical problem that such method of quoting and assessing repairs presents for the court is that, as in the example given above, when the assessors give evidence in court, they give evidence on the basis that three hours is a reasonable allowance for the work, and are cross examined on the basis that three hours is an excessive time to be allowed for the work. The assessors give their evidence both for the plaintiff and for the defence on the basis of the funny time, that is, three hours. The judicial officer, in my view not unreasonably, will normally be considering the matter in real time. The present method based on two frictions, makes it very considerably harder for judicial officers to understand and appreciate the evidence and to adjudicate between two experts witnesses as to what is the fair and reasonable cost of repairs. 36 Moreover, during evidence confusion frequently arise as to whether questions are being asked on the basis of fictional or funny time or real time. In this matter submissions were made attacking the creditability of both witnesses based on apparently inconsistent answers. I am satisfied both witnesses were at times confused as to what basis the questions were asked and no real question of credit arose. EXPERT EVIDENCE 37 Each assessor complied with the Expert Witness Code of Conduct. Both witnesses were cross examined as to alleged breaches of the code. It appeared to me during the hearing that to require the witnesses in this case, each being an employee of a party to the proceedings, to comply with the code, created an artificial and unreal situation. I am satisfied that for the purpose of this argument, I am entitled to treat the NRMA and AAMI as the two parties in dispute before the court. It was unrealistic to expect employees of parties giving the only evidence on behalf of their employer in the case, to be impartial and to owe a paramount duty to the court and not to their employer. I was concerned as to how I should treat those criticisms and cross examination in this judgment. I am now satisfied that neither witness was required to comply with the Expert Witness Code of Conduct. 38 R3 31.2(3) of the Uniform Civil Procedure Rules provide as follows; R31.2(3); 1. As soon as practicable after engaging an expert as a witness whether to give oral evidence or to provide an expert's report, the party engaging the expert must provide the expert with a copy of the Code of Conduct. 2. Oral evidence may not be received from an expert witness unless: (a) he or she has acknowledge in writing whether in a report relating to the proposed evidence or otherwise in relation to the proceedings, that he or she has read the Code of Conduct and agrees to be bound by it, and (b) a copy of acknowledgement has been served on all parties affected by the evidence. 3. If an expert's report does not contain an acknowledgement by the expert witness who prepared it, that he or she has read the Code of Conduct and agrees to be bound by it: (a) Service of the report by the party who engaged the expert witness is not valid service, and (b) the report is not admissible in evidence. 4. This rule applies unless the court otherwise orders. 39 The Expert's Code of Conduct is in the following form; Uniform Civil Procedure Schedule 7 EXPERT WITNESS CODE OF CONDUCT Application of code 1. This code of conduct applies to any expert engaged: a) to provide a report as to his or her opinion for use as evidence in proceedings, or b) give opinion evidence in proceedings or proposed proceedings. General duty to the Court 2.1 An expert witness has an overriding duty to assist the Court impartially on matters relevant to the expert's area of expertise 2.2 An expert witness's paramount duty is to the Court and not the person retaining the expert. 2.3 An expert witness is not an advocate for a party. The form of expert reports 3.1 A report by an expert witness must (in the body of the report or in an annexure) specify the following: a) the person's qualifications as an expert, b) the facts, matters and assumptions on which the opinions in the report are based (a letter of instructions may be annexed), c) the reasons for each opinion expressed, d) if applicable – that a particular question or issue falls outside his or her field of expertise, e) any literature or other materials utilised in support of the opinions, f) any examinations, tests or other investigations on which he or she has relied including details of the qualifications of the person who carried them out. 3.2 If an expert witness who prepares a report believes that it may be incomplete or inaccurate without some qualifications, that qualification must be stated in the report. 3.3 If an expert witness considers that his or her opinion is not a concluded opinion because of insufficient data or for any other reason, this must be stated when the opinion is expressed. 3.4 An expert witness who, after communicating an opinion to the party engaging him or her (for that party's legal representative), changes his or her opinion on a material matter must forthwith provide the engaging party (or that party's legal representative) with a supplementary report to that effect which must contain such of the information referred to in sub-clause 1(b), (c), (d), (e) and (f) as is appropriate. 3.5 Where an expert witness is appointed by the Court, the preceding paragraph applies as if the Court were the engaging party. Experts' conference 4.1 An expert witness must abide by any direction of the Court to: a) confer with any other expert witness, and b) endeavour to reach agreement on material matters for expert opinion, and c) provide the Court with a joint report specifying matters agreed and matters not agreed and the reasons for any non agreement. 4.2 An expert witness must exercise his or her independent, professional judgment in relation to such a conference and joint report, and must not act on any instruction or request to withhold or avoid agreement. 40 Whilst it may be of assistance to the court for the loss assessors to prepare their report generally in accordance with cl 3.1 of the Code, I consider it unrealistic to expert them as employees of the parties to comply with cl 2 and with cl 3.2, 3.2 and 3.4. 41 In Kirch Communications Pty Ltd v Gene Engineering Pty Ltd (2002) NSWSC 485 a director of the defendant company prepared a report for the loss assessor regarding damage to a winch which included expert opinion. The director had expertise in relation to the matters in the report. The plaintiff objected to the tender of the report on the basis that it did not comply with the then equivalent of r31.2(3) because the director did not comply with the Expert's Code of Conduct. 42 His Honour Campbell J, referred to the definition of 'expert witness' in r13(c) of the Supreme Court Rules (now pt 31.18 Uniform Civil Procedure Rules) as follows; 'Expert witness' means an expert engaged for the purpose of; Providing a report as to his or her opinion for use as evidence in proceedings or proposed proceedings, or giving opinion evidence in proceedings or proposed proceedings. 43 His Honour went on to state; "It does not seem to me that the definition of 'expert witness' is able to catch the situation involved here where an officer of a party, not engaged for any particular purpose, has at a time before court proceedings were contemplated, expressed an expert opinion in a report and that report is tendered in later proceedings." 44 His Honour found that the report sought to be tendered did not have to comply with the requirements of r31.2(3) and the expert witness Code of Conduct. 45 I am satisfied that the same reasoning applied to the evidence of each loss assessor in this matter. The NRMA employed Mr Wainwright as a loss assessor. He assessed the quotation of Perfect Autobody quotation and inspected the plaintiff's vehicle. Subsequently when court proceedings were commenced to recover the cost of the repairs from the defendant the NRMA sought to call Mr Wainwright to give expert evidence. However, Mr Wainwright did not become an 'expert witness' under the definition. He was not engaged by the plaintiff for that purpose. A party could not engage herself, himself or itself as an expert witness, although the party could if sufficiently qualified give an expert opinion. Mr Wainwright was able to give expert evidence but did not have to comply with r31.2(3) and the Expert Code of Conduct. 46 I am satisfied that the same principle applied to Mr Matthews. He inspected Mr Lambros's vehicle as a loss assessor. His employer then sought to call him as a witness. He was not engaged by the defendant for that purpose. He did so as part of his duties as an employee. He could give expert evidence, but was not an 'expert witness' and did not have to comply with r31.2(3). 47 I do not therefore propose to deal with submissions based on the failure of one or other of the witnesses to comply with the code. I indicate that such submissions were not in any event important as I find that they went only to minor matters of credit and I did not find them helpful to either party. 48 For completeness I should indicate that because each witness may not have been impartial or independent did not mean that their report was inadmissible. His Honour Judge Campbell came to that conclusion in Kirch Communications Pty Ltd v Gene Engineering Pty Ltd. 49 In Collins Thompson v Clayton (2002) NSWSC 366 His Honour Austen J came to the same conclusions in a very helpful and instructive decision. 50 It follows then that the evidence of the two loss assessors was admissible, although they did not have to comply with the requirements of r31.2(3) and the Expert Witness Code of Conduct. The fact that each was employed by a party to the proceedings, was a matter to be taken into account when assessing their credibility in the usual manner. 51 Their evidence still had to comply with S79 of the Evidence Act. Mr Manion urged strongly that Mr Wainwright's evidence should be given little or no weight because it did not satisfy the tests for admissibility as laid down by His Honour Justice Heydon in Makita Pty Ltd v Sprowles (2001) 52NSWLR 705. Justice Heydon summarised the applicable principles in the often quoted paragraph 85 as follows; "In short if evidence tendered as expert evidence is to be admissible: 1. It must be agreed or demonstrated that there is a field of 'specialised knowledge'. 2. There must be an identified aspect of that field in which the witness demonstrates that by reason of specialised training, study or experience the witness has become an expert. 3. The opinion proffered must be 'wholly or substantially based on the witness's expert knowledge. 4. So far as the opinion is based on facts 'observed by the expert' they must be identified and admissibly proved by the expert, and 5. so far as the opinion is based on 'assumed' or 'accepted facts' they must be identified and proved in some other way. 6. It must be established that the facts on which the opinion is based form a proper foundation for it, and 7. the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached; that is the expert's evidence must explain how the field of 'specialised knowledge in which the witnesses is expert by reason of 'training, study or experience' and on which the opinion is 'wholly or substantially based' applies to the facts assumed or observed so as to produce the opinion propounded'. 52 His Honour went on to say; "If all of these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible and, so far as it is admissible of diminished weight." 53 That test proposed by Heydon JA is often put forward as the only test to be applied. The test has, however, been somewhat watered down by the decision of the Court of Appeal in Asic v Rich (2005) NSWCA 152 (see particularly 92-135) and also particularly in Sydney Wide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) FC AFC 157. Branson J in that case considered the requirement that the court be 'sure' placed too high a test upon the admissibility of expert evidence. He said; "The approach of Heydon J as set out above is, as it seems to me, to be understood as a council of perfection. As a reading of His Honour's reasons for the judgment as a whole reveals, His Honour recognised that in the context of an actual trial the issue of admissibility of evidence tendered as expert evidence may not be able to be addressed in the way outlined in the above paragraph." 54 Branson J also emphasised the need for an approach which tended to place more emphasis on questions of weight than on absolute compliance with the Makita test of admissibility. There is of course, the discretion for the court to exclude evidence that is unfairly prejudicial or misleading or confusing or wasteful of time (s135 of the Evidence Act). It seems to me that to require strict compliance with the principles of Makita in this matter would set the bar too high. 55 It is important to note that in Makita the independent expert was Professor Morton. He was not a participant or witness in the events of the accident in relation to which he was required to give expert evidence. That situation contrasts sharply with the position in this matter where the NRMA assessor Mr Wainwright was involved in assessing the quote and inspecting the plaintiff's vehicle in the ordinary course of his work and AAMI's assessor Mr Matthews was called upon to consider the fair and reasonable cost of the repairs in the ordinary course of his employment. 56 In Keller v R (2006) NSW CCA 2004 in a situation where a witness was expressing an opinion as to whether a speaker on a telephone was talking about drugs, His Honour Studdert J stated that for the evidence to be admissible; "It is necessary that there be a manifest foundation for the evidence, namely; (i) That it should be made apparent that the opinion expressed 'is wholly or substantially based' upon the expert training, study or experience of the witness.' (s79); (ii) That the reasoning process of the witness should be sufficiently exposed to enable an evaluation as to how the witness used his expertise in reaching his opinion." 57 It appears to me that those tests espoused by Studdert J are a more practical statement of the appropriate principles to be applied in this case. THE EVIDENCE IN THE MATTER Todd Wainwright 58 Mr Todd Wainwright's statement for the plaintiff was tendered as Exh.1. He stated that the issues he had been instructed to address in his statement were; 1. Whether each of the items listed in the repair quote of Perfect Autobody Pty Ltd was necessary in order to restore the vehicle to its pre-accident condition. 2. Whether the cost of restoring the vehicle to its pre-accident condition as quoted by Perfect Auto Pty Ltd was fair and reasonable. 59 In paragraphs 1 to 7 of his statement he set out his qualifications. He was an apprentice with O'Briens Auto Body Repairs at Caringbah which specialised in European prestige motor vehicles. He completed his trade qualifications as a panel beater including automotive refinishing in 1991. He was employed there until 2002. In the last two years he was a foreman responsible for eight staff. He said he gained extensive experience with Prestige European motor vehicles with O'Briens Auto Body Repairs. He joined Insurance Australia Limited as a loss assessor in 2002 and has been employed since then. He said he was regularly instructed to assess Mercedes Benz vehicles most of which were repaired by Perfect Autobody. He said he was familiar with the operations of Perfect Autobody. 60 He stated that he inspected the plaintiff's motor vehicle on 19 December and at various times thereafter. When he inspected the vehicle he had NRMA documents and Perfect Autobody's repair estimate No. 32014. He said the vehicle was a superbly maintained motor vehicle with no evidence of prior damage and still considered a new vehicle. It had travelled 15,712 kilometres. 61 He described the damage to the vehicle on inspection in paragraphs 15 to 22 of his statement. The areas of damage were the rear bumper and boot lid. Based on his inspection he anticipated internal damage to the chassis of the vehicle as well as the obvious damage to the boot lid which was out of alignment. He explained that the particular vehicle was especially designed to absorb an impact, even a more forceful impact, by crumpling and then springing back to shape. He said that fact meant that external inspection of the vehicle will often not detect the full extent of the damage to areas such as the chassis rails. He said he assessed and approved Perfect Autobody's estimate. He said he was satisfied that the extent of damage to the vehicle and the repairs required to bring the vehicle to its pre-accident condition was entirely consistent with the accident description and damage which he would expect a particular motor vehicle to incur in such a collision. 62 At paragraph 28 he said that in determining whether to approve the estimated repairs and which of the repairs to approve, he relied upon his skills, experience and expertise as a motor vehicle loss assessor as well as his familiarity with this particular make and model of motor vehicle. 63 At paragraph 29 he said that after the repairs had been completed he advised NRMA that the costs claimed by Perfect Autobody were fair and reasonable and that each of the items listed and approved by him were reasonable and necessary to reinstate the vehicle to its pre-accident condition. 64 At paragraphs 30 to 35 Mr Wainwright set out his understanding as to how Perfect Autobody prepared their quotations. He referred to the usual practice which I have previously discussed in this judgment under the heading 'funny time-funny money'. He referred to the labour rate referred to in quotes "prepared on that basis as being an arbitrary figure". 65 He stated in paragraph 33 that Perfect Autobody quoted "their work in terms of a set dollar figure for each individual item quoted". He said the system was based on their experience in repairing Mercedes Benz vehicles. He said they specialise in repairing Mercedes Benz vehicles and repair a large number of such vehicles on a daily basis. He said he was satisfied based on his experience with the company that they are very familiar with the operations involved in repairing any given model of Mercedes Benz and can thus provide an accurate estimate of the real cost involved in preparing any particular item of damage. 66 He went on to describe that the units referred to in the estimate of Perfect Autobody did not reflect a time value, but was a unit equal to the arbitrary rate accepted by the MTA. In evidence he said the figure was $30.90. 67 He further stated that the use of the units was imposed upon Perfect Autobody by the NRMA. He said NRMA assessor assessing the fair and reasonable cost of repairs would consider the unit allowance he would make for each item quoted in the estimate. 68 Mr Wainwright said Mercedes Benz vehicles are prestige motor vehicles which are built to a very high quality. He said they could not be compared to ordinary motor vehicles and the nature of repairs required. The skill and expertise required, the position and perfection required, could not be compared to an ordinary motor vehicle. He stated that in his opinion a Mercedes Benz vehicle cannot be properly repaired by any repairer. 69 He went on to say that every motor vehicle involved in a collision will lose their value. The extent of the loss of value varied depending on a number of factors, one being the nature and quality of the repairs. 70 At paragraph 42 he said; "The quality of Perfect Autobody's repair work when it comes to Mercedes Benz is second to none. It is, in my experience, having dealt with Perfect Autobody extensively and having assessed most makes and models of prestige vehicles, that Perfect Autobody's work is of extremely high quality that cannot be matched by a standard repair shop." 71 He said that the quality of workmanship of Perfect Autobody was so good that it was almost undetectable and would only be detected by a trained panel beater smash repairer. 72 At paragraph 46 of his statement he stated; "An average (or standard) repairer that operates on the times and rates imposed by insurance companies would not be able to reproduce the same level of quality in the repairs to a Mercedes Benz vehicle that Perfect Autobody produce." 73 He then went to estimate the difference in the standard between Perfect Autobody and a standard repairer to vary by approximately 10%. He said he was aware that the vehicle was purchased for $101,000 and was insured for $97,000. He said that as a result of Perfect Autobody repairing this vehicle the resale value would not drop, but if repaired by a standard repairer the value of the vehicle after repairs would be between $85,000 and $87,000. 74 At paragraph 52 Mr Wainwright referred to various documents which he annexed to his report. The documents were as follows: 1. Repair photographs taken by Perfect Autobody consisting of some 74 photographs pages 13-49 of the witness statement. 2. Four photographs taken by Mr Wainwright of the spray painting guns and equipment. 3. The motor vehicle assessment report (Exh.F). 4. Estimate 32014 of Perfect Autobody. 5. The supplemental estimate of Perfect Autobody (Exh.H). 6. Tax invoice 35953 of Perfect Autobody (Exh.I) 7. Pre-repair photographs taken by Mr Wainwright being 15 photographs. 8. Response to AAMI report which is a response prepared by Mr Wainwright to the document in the nature of a Scott Schedule prepared by Mr Matthews the Loss Assessor for AAMI. I intend in this judgment to annex the Scott Schedule document of Mr Matthews as Attachment A to this judgment and Mr Wainwright's reply as Attachment B. 75 Before I deal with the cross examination of Mr Wainwright by Mr Manion it may be useful for me to set out some comments in relation to the estimate and documents prepared by Perfect Autobody. It has on the pages relating to 'remove and replace' a column under the heading 'Units' and also has a rate which is expressed to be $30.90. It would seem Mr Wainwright reduced the quotation by .8 of a unit. Some items were placed on report. It was explained that items are placed on report in a quotation when it was considered that the repairer was unable to properly assess an amount for the repairs until the vehicle was partially dismantled. At that stage a further quotation is made and the vehicle is further inspected. On the page of the estimate relating to refinish, three units were disallowed and the rate for the work was said to be $68.80. Further paint was put on report as was the operation of the Vario roof with multi directional boot lid hinge and reset. A further estimate was annexed as Exh.H dated 29 March 2004. In the particulars the job was shown as 'date in 9 February, date out 26 February'. The vehicle mileage which on 19 December was shown as 15,702, was shown as 17,276. The repairer's tax invoice for $15,054.76, which included the amounts in the supplementary quotation, was apparently approved by Mr Wainwright on or about 31 March. CROSS EXAMINATION 76 Mr Manion commenced his cross examination by having Mr Wainwright concede that the unit figure $30.90 referred to in Perfect Autobody's quotation was not related to time. Mr Manion was very critical of Mr Wainwright on this point. In his written submissions at para 23 Mr Manion submitted; 'Mr Wainwright was bound by some agreement between PAB and NRMA which forced him to deal with a unique and idiosyncratic quoting system as a result of some unrevealed and unexplained agreement between NRMA and PAB some indeterminate time ago in unknown circumstances and of unknown terms. He has no information available to him to allow his assessment to be objectively tested or even understood.' 77 I reject that submission. Mr Manion put to Mr Wainwright an assumption that a new assessor going into Perfect Autobody's repair centre and seeing a quote for a door handle for $50.00 would not know how much time they were saying it would take them to remove the door handle (T01/05/p4). He put to Mr Wainwright that referring to a unit wouldn't tell them how much time it would take. 78 I find the proposition put by Mr Manion to be wrong. The new assessor, in the example given by Mr Manion would look at Perfect Autobody's quotation for the item to remove a door handle and would find it would refer to one and a half units at $30.90 to give a price of $50.00. The quote would be therefore prepared and be able to be assessed on exactly the same basis as every other quote prepared in the repair industry. As Mr Wainwright clearly pointed out in his statement, Perfect Autobody referred to the units and rates so as to enable assessors to assess the quote on the same basis as every other quote is assessed. 79 I have already referred in my discussion under the heading 'funny time-funny money' to the fact that it appeared that the practice was so entrenched in the repair industry, that all assessors (and one would think even Mr Manion's new assumed assessor), would assess motor vehicles using a unit time of about $30.90. The admirable thing which Perfect Autobody did was to make it clear that the figure of $30.90 was not an hourly rate. They have tried to get away from that fiction. 80 In further cross examination Mr Wainwright went on to say that the NRMA and Perfect Autobody have agreed on the amounts to be allowed for specific tasks in relation to Mercedes Benz vehicles. Mr Wainwright said there was no document evidencing that agreement, but all assessors doing such assessments are aware of the various amounts allowed. However, the fact that the quotation referred to units of $30.90 and therefore allowed the amount claimed to be considered in exactly the same way as all quotes were prepared in the repair industry, in my view certainly allowed the reasonableness of the quote of Perfect Autobody to be tested. 81 Mr Wainwright said his report did not detail how much Perfect Autobody charge per hour for their work. I would add that other evidence confirmed that such information was not shown or known to any assessor assessing any repairer's quote (see Matthews (T02/05, p35&36)). 82 He was cross examined at p10 and following and indicated that he believed that paint code 744 zircon pearl was a three layer application paint. He agreed that the additional allowance for a pearl colour paint reflected the increased price of the pearl coloured paint and that three paint layers are used. Mr Manion put to Mr Wainwright that in fact the particular paint was a standard metallic paint which had a small amount of pearl additive and required only two paint layers. Mr Wainwright said he was not aware of that. He was shown certain documents but did not agree that the particular paint was a two layer application paint. He agreed he wasn't a licensed spray painter. At p13 Mr Manion put to Mr Wainwright the following questions (T01/05,p13,L55); Q. "But NRMA only allows repairers $30.90 per hour doesn't it?" A. "That's correct, yes." Q. "Repairers routinely repair cars at $30.90 per hour?" A. "Yes that is correct." Q. "Would you be aware that in Victoria the rate is about $23.00 per hour for repairers?" A. "I knew it was lower. I didn't know the exact figures." 83 It is exactly that type of cross examination which makes these matters so hard for magistrates to consider. Those questions are misleading and can only make sense if they are taken to mean that NRMA only allows repairers $30.90 per fictional hour. It is not a proper hourly rate. It is funny money and the questions and answers do not assist at all. The time allowance in Victoria was not given. It may be five times the hourly rate which would make Victoria more expensive than New South Wales. 84 Mr Wainwright was cross examined as to his opinion as to the precision and perfection required to properly repair them. He said he had not had any experience of vehicles repaired by Perfect Autobody being returned for rectification. 85 It was put to Mr Wainwright that for a repairer to forget to put in sound deafening pads in the boot area of the vehicle when it was returned to the owner would not be commensurate with precision or perfectionism. Mr Wainwright agreed. He was shown photograph 6 in Mr Matthews's report taken of the vehicle well after the repairs had been completed. He agreed such photograph appeared to indicate that the sound deadening material on the boot floor had not been replaced. He agreed that photograph B3 in his statement would indicate that the sound deadening material had been removed and ripped off. Mr Wainwright said the finish shown as a result of the manner of removal of the sound deadening material was inconsistent with any degree of perfectionism in the repair of a Mercedes Benz vehicle, but would not agree that it was a substandard repair. 86 At p20 and following of the transcript Mr Wainwright was cross examined in relation to the standard of repair in relation to another Mercedes Benz vehicle and his observations at a joint inspection with representatives of AAMI. Mr Wainwright said the inspection was two years after the repairs and anything could have occurred in that period of time. He said he wasn't one hundred percent convinced that the work they were looking at was Perfect Autobody's work. He said he stood by his statement in para 42 that Perfect Autobody have an extremely high quality that cannot be matched by a standard repair workshop. 87 At p24 Mr Wainwright was taken to his assessment report (Annexure F to his report at p54). He was cross examined as to the signature of Paul Wood on the form and said that Mr Wood was the Acting Manager at the time who had countersigned the report as (T01/05, p25,L5): "He was checking over my assessments to make sure it was accurate and fair and reasonable." 88 Mr Wainwright said that in his assessment report he noted the damage to the driver's side rear quarter area and to the passenger's side rear area as 'heavy panel'. He agreed he did not show it as structural damage. Mr Wainwright said that when he originally inspected the vehicle he did not see any structural damage, but subsequently during the dismantling he said there was structural damage as there was damage to the chassis rails. He did not agree that the only damage was very slight kinking of the chassis rail right at the place where it abutted the beaver panel. He said photographs on A2 showed that the chassis rails were out of alignment. He marked the kinking on photograph A4. He agreed that the photograph showed a celette bench jib (B2, p22). He said the photograph was one of the photographic diary that Perfect Autobody take of every car. Mr Wainwright disagreed that that was the only photograph showing the jib attached to the car and referred to photographs A2, A3, A4, A6, A7, A8 and A9. He agreed there was no photographic evidence of the jib being used at the front of the car. At p33 Mr Wainwright said he visited Perfect Autobody almost on a daily basis. He said he looked at this vehicle on several occasions. He said he did not keep records of those occasions. He said he would only look at the vehicle if there was a problem. He agreed that they could be referred to as casual inspections. He said he now had no specific recollection of those other inspections. 89 At pp37, 38 and 39 Mr Wainwright was again cross examined strongly in relation to how the sum of $123.60 was calculated for the cost of the use of the jig. Mr Manion suggested that the figure was unable to be tested. Mr Wainwright indicated that the figure was shown as four units at $30.90 or $123.60. 90 Mr Wainwright said that when he inspected the vehicle he did not check the Vario roof and he had no reason to suspect that it would be malfunctioning or not working properly. In relation to the supplementary report Mr Wainwright said either he would have inspected the vehicle with the supplementary quote or he may have relied on his inspections during the repairs. He said parts of the Vario roof system would have been partly dismantled to enable repairs to the beaver panel. He said that costs in relation to checking the operation of the Vario roof with the multi directional boot lid hinge had been put on report. He said it was put on report because they would not have known how much time would be involved in checking the Vario roof. 91 Mr Wainwright agreed (T01/05, p56,L15) that he did not have a proper basis for saying this vehicle had been repaired by a standard repairer it would lose ten percent of its value. He said however that he believed the work done by Perfect Autobody was such that the value of this vehicle would not be devalued at all, or absolute minimum. 92 Mr Wainwright was referred to photograph B1 at page 22 of his statement to the presence there of a twelve pound sledgehammer. It was suggested that such a sledgehammer would be associated with the lower end of the panel beating fraternity. 93 At pp60 and 61 of the transcript Mr Manion put a series of questions to Mr Wainwright to the effect that the NRMA Guide allowed a period of five hours to remove and replace the beaver panel. It was not made clear that that five hours was five hours of 'funny time'. Mr Manion (T01/05, p65,L15) put the following question to Mr Wainwright; Q. "In fact Sir, to remove and place the beaver panel on that vehicle I know you told me a little while ago you thought it would be something in excess of a Commodore, I suggest to you about four hours would be the time?" A. "Four hours to remove and replace." Q. "The beaver panel?" A. "If you can do it in four hours you'll earn yourself a lot of money." 94 Mr Manion did not make it clear whether that was four hours in real time. or four hours of 'funny time'. He had been asking questions previously in real time. He then goes on to compare that four hours with the 36 units charged by Perfect Autobody, which clearly was not real time. 95 Mr Wainwright was then cross examined in relation to amounts claimed for testing and checking the electrical systems. Mr Wainwright said such systems were complicated and after the car was repaired required checking to make sure that they are all properly working. 96 At transcript (T01/05, p75,L35) I put to Mr Wainwright a proposition that the figures he was putting were not subject to objective testing. I indicate now and will refer to it in my reasons, that I now have a better understanding of all the issues in case than when I put that proposition to Mr Wainwright. There was considerable cross examination regarding the need to test and check the Vario roof. Mr Wainwright said it was done and allowed for under the repair and align which is a trial fit-up and trial run to open and close the roof before the vehicle is painted. It was then dismantled, pulled apart and the vehicle was painted. After it was painted the roof had to be checked again. Mr Wainwright agreed that the roof wasn't removed for the painting of the vehicle. 97 In further examination on the second day Mr Wainwright said that it was necessary and reasonable for $360.00 to be allowed for the urethane seam sealer which Mr Wainwright said had to be applied by hand. 98 He repeated that the whole of the vehicle had been jigged. He said the steering suspension components have to be removed in order to mount the vehicle to the jig bed. He agreed he hadn't allowed for a wheel alignment, but would have if it had been sought. Mr Wainwright explained in some detail the nature of the complex large hinge system which bolts not only the boot lid, but operated the roof. (T02/05,p7) 99 Mr Wainwright said an allowance of $120.00 was reasonable to cover the cost of polishing panels adjacent to the paintwork, because the vehicle was quite extensively masked up and covered. RE-EXAMINATION 100 Mr Wainwright said that he had never seen a quote prepared by a repairer in real time, real dollars. 101 Mr Wainwright said he has assessed motor vehicles for Perfect Autobody where the NRMA client was at fault and he said they were assessed in the same way. He said that for the twelve months prior to his assessment of this vehicle he was assessing prestige vehicles at four or five other prestige motor repairers which he named. 102 That concluded the case for the plaintiff. THE DEFENDANT'S CASE Scott Andrew Matthews 103 Mr Matthews's CV was tendered as Exh.3 and his report dated 16 September 2005 was tendered as Exh.4. He stated that he had been employed by AAMI for three years. He obtained his panel beating trade certificate in 1995 and his spray painting certificate in 2000. He was the assistant manager of the NRMA Smash Repair Centre at Brookvale, where he was responsible for seventeen staff who completed an average of forty-five vehicles per week. He also owned his own successful smash repair centre for a period of two and a half years. Since commencing at AAMI he said he had extensive experience at various assessing centres. Up until March he worked at AAMI's North Sydney head office where he 'managed the fair and reasonable process for the cost of third party repairs, including prestige and heavy vehicle repair costs.' For the five months prior to September 2005 he had undergone extensive training, assessing stolen and fire affected vehicles. 104 His report indicated that he inspected the plaintiff's motor vehicle at the plaintiff's address on 21 March 2005. He said that when assessing the claim he had access to the original repair quotation of Perfect Autobody, the supplemental quotation identifying additional repairs and parts considered necessary to complete the part and their tax invoice. He also had the assessment report of Mr Wainwright. He attached copies of the repair quotation of Perfect Autobody and the additional estimate to his report. His report included information regarding the paint measuring gauge which tests paint depth. 105 In the section under 'inspection of the vehicle' he said he had reference to the MTA Repair Times Manual. He stated as follows; 'Reference was made to Motor Traders' Association (MTA) Repair Times Manual for the purpose of determining reasonable costs for repairs, operations outlined in the repair quotation. The MTA Repair Times Manual is intended for the use of all members of the body repair industry, motor vehicle insurers and loss assessors. It is designed as a guide to repairs when preparing quotations on damaged vehicles attached to this report are the relevant pages of the MTA Manual.' 106 Unfortunately those relevant pages were not attached. They were not tendered to the court. This provided a significant problem in the determination of this matter. A very important part, indeed almost certainly the most important part, of the attack on the plaintiff's claim for the cost of repairs was that the costs were more than the fair and reasonable costs. Clearly Mr Matthews in estimating the fair and reasonable costs, relied extensively on the MTA Guide. It was extremely important for the defendant's case that the Guide be available to the court so that the court could itself independently look at the recommended costs. Moreover, the absence of the Guide made the preparation of this judgment considerably more difficult. 107 Mr Matthews went on to say; "Most motor vehicle body repairers prepare quotes for the repair of motor vehicles based on the following hourly rate: $27 per hour to a maximum of $32 per hour for labour, and $45 per hour to a maximum of $70 per hour for paint (this is dependant upon the colours and paint material type). I accept the hourly rate of $30.90 for removal/replacement and repair operations quoted by Perfect Autobody. I have adjusted the paint operation hourly rate to $57.00 per hour which is slightly above the mid range industry accepted rate." 108 I consider those statements to be very significant. Much was made in the cross examination of both witnesses that Perfect Autobody had adopted a practise of referring to the rate of $30.90 as a unit rate. Much of the criticism levied at Mr Wainwright by Mr Manion was that Perfect Autobody's quotation was not able to be objectively considered. The above statements in Mr Matthews's report proved otherwise. He accepted the 'hourly rate of $30.90 quoted by Perfect Autobody'. True he was referring to the fictitious hourly rate. It is clear that Mr Matthews then proceeded to assess their quote on that basis, which is exactly the same basis universally adopted in the industry code. At that stage Mr Matthews had no difficulty in equating the unit charge of $30.90 to the fictitious hourly charge of $30.90. On several occasions in evidence and in his report Mr Matthews mistakenly referred to, and may have adopted the fictitious rate as a real time rate. However, I am satisfied that before the court hearing, both assessors approached this matter as they would the assessment of any other prestige vehicle. 109 Mr Matthews then very usefully attached to his report a document in the nature of a Scott Schedule showing the adjustments which he made to the NRMA assessment and his reasons. I intend to attach a copy of that document as Annexure A, and a copy of Mr Wainwright's reply as Annexure B. I intend to summarise Mr Matthews's the evidence in chief and cross examination. I intend to discuss Mr Matthews's evidence and reasoning as set out in the Scott Schedule and Mr Wainwright's replies in the final section of this judgment. EXAMINATION IN CHIEF 110 Mr Matthews said his opinion was that the painting of the plaintiff's vehicle was with a standard metallic paint requiring a two stage application, and he therefore reduced the rate from $68.00 to $57.00 per hour. 111 He said he had not worked on this particular Mercedes Benz, but had worked on other Mercedes Benz. He said that the way the beaver panel for instance was attached to the Mercedes was the same method as for other motor vehicles. The following evidence was given (T25/07,p16,L45-50); Q. "When you applied throughout your report reasoning based on the MTA times, did you make any extra allowance for the fact that you were dealing with a more complex or more specialised vehicle?" A. "There would be an extra allowance to the MTA Times Manual if there were additional items that were thought were out of the ordinary, or more than the standard vehicle. I would make an allowance for that." 112 Mr Matthews said that the $92.70 which he allowed for Item 13 'boot lid including disassemble fittings' was arrived at on the basis of three hours at $30.90. He said in real time the job would have taken 1.2 hours. 113 Mr Matthews gave evidence as to the relevance between the fictional $30.90 per hour allowed and the real time for doing the work. He replied (T25/07, p20,L10); "A third of the allowance suggested by the MTA as a rough gauge." 114 Mr Wainwright said that the photographs consisting of the repairers photographic diary were not available to him when he prepared his report. He conceded that looking at those photographs that there was damage to the floor area being damage to the boot floor and chassis rail. He said he thought it was therefore reasonable for the beaver panel to be replaced and subsequently he said the would allow an additional $272.59 to the amount he previously allowed to remove and replace the beaver panel. CROSS EXAMINATION 115 Mr Matthews agreed that his CV and pages from the MTA Guide were not included in his witness statement, although they were expressed to be. He said for a time he owned his own business. He said they would repair sixty vehicles a month which included ten Mercedes a month. I found that to be a surprisingly high number of Mercedes. He had not worked on a Mercedes with a Vario roof system. In preparing his assessment he said he relied on the MTA Guide and to his experience in the industry. He agreed that the universal industry practise for assessing costs of the repairs was based on a fictitious hourly rate and a fictitious time allowance. 116 Significantly (T02/05 p29, L1-5) Mr Matthews said that when assessing repairs; "You think of it in fictitious time." 117 He was then cross examined in relation to use of the word 'unit' and as to what an hour in the MTA Guidelines meant. I have already come to a finding in relation to these matters based on Mr Matthews's statement in his witness statement. 118 Mr Matthews said he had not been inside the repair premises of Perfect Autobody. He conceded that assessors are not aware of the actual charge out rates of repairers and they are not relevant to the assessment of fair and reasonable costs of repairs using the MTA Guide (T02/05, p35-36). He conceded that the MTA did state that for prestige vehicles there can be an allowance for additional time to be negotiated between the repairer and the assessor. 119 Mr Matthews was cross examined (T02/05, p37) as to whether anyone had assisted him with the preparation of the report. He said he could not recall. He was asked if he knew a Mr Mark Nunn. He said that he had left the company at the time that he (Matthews) had prepared his report. He said his report was prepared from his own reasoning on the evidence he took at the time of the inspection. He said he worded the report and that no one else had influence in the preparation of the report. Mr Matthews conceded that he had seen a desk top assessment prepared by Mark Nunn on the plaintiff's car. He said he could not recall whether he had seen a copy of the report. 120 After much legal argument the report was tendered as Exh.5. Mr Matthews said that the practice of assessors at AAMI when preparing reports was to cut and paste from a data base established from previous reports. 121 Mr Matthews, after looking through Mr Nunn's report, agreed that many of the paragraphs in his report were identical or practically identical to the wording in Mr Nunn's report. The cross examination went on for a considerable period of time. Mr Gruzman submitted that I would have grave difficulty in accepting Mr Matthews report because it wasn't his report, but that in truth he had simply adopted Mr Nunn's report. 122 In fact on some occasions Mr Matthews did not adopt Mr Nunn's report. A good example was in relation to the painting, where Mr Nunn allowed a rate of $68.80, but Mr Matthews reduced the a rate to $57.00. 123 The view I have come to was that Mr Matthews had seen Mr Nunn's report and adopted similar or the same wording. However, I believe that Mr Matthews applied his own experience and reasoning to the task at hand. However, I am satisfied that Mr Matthews did not indicate as readily as he should that he had seen and to some extent, used Mr Nunn's report. In my view he should have indicated that he had access to such report in the documents he acknowledged as using in his report. His failure to do so was a matter to be taken into account on his credit. 124 Mr Matthews gave this significant evidence (T02/05, p56, L20); Q. "Do you say that you cannot assess a particular claim if it doesn't include funny hours and funny rate? A. "that would be the case." Q. "It can't be done?" A. "No." 125 He was referred to the quotation Annexure C for the defendant's vehicle attached to his report. That was a quotation to AAMI. The repair and replacement item quoted $45.00 with no hours or rate quoted. Mr Matthews said the quote was from an AAMI repairer who knew that the applicable rate was $30.00 (fictitious time) and quote was assessed on the basis of one and a half hours at $30.00 a (fictitious) hour. 126 Mr Matthews agreed that the use of the jig would overcome the considerable problem which would be caused if a car was repaired that was slightly out of alignment. Mr Matthews agreed he didn't have Perfect Autobody's photographic diary when he prepared his report. He agreed that the best person to form the view about whether the particular vehicle needed jigging was the person that had seen the car and pulled it apart. Mr Matthews disagreed that photographs A5 and A1 indicated a need to use the jig. 127 Mr Wainwright said he applied the paint test. He agreed that the paint test was applied to the centre of the aperture. It was suggested to him that photographs indicated that only the edge of the aperture had been painted. 128 Mr Matthews was asked questions in relation to the roof system and the following evidence was given (T02/05, p68, L15-15); Mr Gruzman Q. "And you have I suggest no idea about the replacement and installation of the roof system?" A. "I'm not real familiar with them." Q. "You're not be familiar at all would you, having never done it?" A. "I am familiar through the research I've done on the Vario roof. I'm familiar with it in that." Q. "When did you do this research?" A. "In my own time." Q. "When?" A. "Prior to the report." Q. "What did you do?" A. "Just made with information – I think it was on the – besides that the Vario roof was never removed throughout the course of the repairs, but the time to adjust the roof would be far less than what was suggested in the report." Q. "Sir, I asked you what research you had done in relation to the roof?" A. "That's what I said. I researched the photographs that you put forward to me." Q. "You looked at the photos?" A. "That's correct. Q. "That's your research?" A. "Yes." 129 I was under the impression that Mr Matthews indicated clearly in previous evidence that he had not seen the Perfect Autobody's photographic diary attached to Mr Wainwright's report until he received Mr Wainwright's report. 130 A copy of the MTA Guide was produced by the defendant's solicitor and Mr Matthews was referred to a section in it as follows (T02/05, p71, L15); "In reference to the painting of panels of prestige or extra large vehicles, e.g. Mercedes, Rolls Royce, BMW, Volvo, Cadillac, Buick, Ford Limited and Landau etc., the association suggests you negotiate with the assessor concerned, or alternatively that the vehicle's owner in an endeavour to obtain a rate and time which will allow you a fair margin for the refinishing in accordance with the quality of the vehicle concerned." 131 Mr Matthews was aware of that provision but said it only applied to larger panels, and that wasn't the case in this matter. Mr Matthews disagreed that the amount claimed by Perfect Autobody was commensurate with the market for repairing prestige vehicles. 132 He agreed that the more a car was worth, the more a car would devalue if repairs weren't affected well. 133 In re-examination Mr Manion tendered as Exh.6 a list of documents received from various suppliers of paint. 134 In re-examination Mr Matthews said that when working with the NRMA at Brookvale, he had more to do with the repair of Mercedes than ordering parts. He said he would keep the records in relation to assessments and the time done to carry out repairs. Mr Matthews said AAMI would repair between 700 and 800 Mercedes a year and he would assess about 20 of them. He confirmed that the MTA time rates are by and large three times more generous than the actual time to do a job. He said he could not recall seeing Mr Nunn's report but he could have seen it on a computer screen. That concludes my summary of the evidence other than the evidence in Scott Schedule and Mr Wainwright's reply to that evidence. DECISION 135 The determination of this matter will depend largely on my assessment of the evidence of Mr Wainwright and Mr Matthews. 136 I am satisfied that there is a field of specialised knowledge as to the assessing of the fair and reasonable costs to repair motor vehicles and that both witnesses by their training, study and expertise were qualified to give expert evidence. Except in relation to one matter (see para 143 hereof) I am satisfied that the opinions they offered were based on their expert knowledge. For the reasons I shall later set out, I am satisfied that the reasoning process of each witness was sufficiently exposed to enable an evaluation as to how each witness used his expertise in reaching his opinion. 137 Clearly Mr Wainwright was in the better position to accurately assess the extent of the damage to the plaintiff's vehicle and the reasonableness of the repairs quoted by Perfect Autobody. Mr Wainwright inspected the vehicle in its damaged condition. He had the quotation prepared by Perfect Autobody. I accept his evidence that during the repairs he inspected the vehicle on five or six occasions. He was criticised by Mr Manion because he could not specifically recall those occasions and did not keep notes. I found it not unusual at all that he could not specifically recall the inspections whilst the vehicle was being repaired. The evidence indicated that he was assessing a considerable number of Mercedes Benz vehicles at that time for Perfect Autobody. The inspections of the plaintiff's car took place some two years and three months prior to his giving evidence. In the meantime he has continued to assess vehicles on a daily basis. I do not find it surprising that he could specifically recall such inspections. I am satisfied he carried out such further inspections. 138 When preparing his report, Mr Wainwright had the benefit of the photographic diary kept by Perfect Autobody. That diary consisted of 74 photographs helpfully captioned by Perfect Autobody. The number of photographs and the manner in which they were kept was indicative, in my view, of a well run professional repair organisation. 139 Mr Matthews (AAMI) was not able to inspect the vehicle until 21 May 2005, more than thirteen months after the repairs had been completed. When preparing his report he did not have the benefit of Perfect Autobody's photographic diary. 140 Only Mr Wainwright had the opportunity to properly inspect the vehicle in its damaged state and again during the repairs. He was therefore in a better position to assess the extent of the damage and the fair and reasonable amount required to repair the vehicle. 141 Both assessors were licensed panel beaters with similar qualifications, except that Mr Matthews had obtained his spray painting certificate and appeared better qualified in relation to questions of spray painting. However generally I formed the view that Mr Wainwright had the better experience in assessing Mercedes Benz vehicles. At the time of his inspection in this matter he had been assessing vehicles at Perfect Autobody for twelve months. The evidence indicated he was assessing six prestige vehicles, mainly Mercedes Benz, a day. Mr Matthews evidence was that with AAMI he was assessing about twenty Mercedes Benz a year. Moreover, Mr Wainwright gave evidence that he had repaired a similar model vehicle namely, a Mercedes Benz Compressor convertible with a Vario style roof. Mr Matthews said he had not personally repaired a similar model nor had he previously assessed the cost of repairs to this model of Mercedes. I formed the view that Mr Wainwright was more experienced in assessing and repairing Mercedes Benz vehicles than Mr Matthews. 142 There were some aspects of Mr Wainwright's evidence which caused me some concern. At one stage he said he was not all that familiar with the MTA Guide. I accept that his employer NRMA has its own guide, and most of the vehicles which Mr Wainwright assessed would be for his employer. However, I would have expected Mr Wainwright to also be inspecting quotes and vehicles not insured by NRMA, but where NRMA clients were liable and that he, and indeed every loss assessor, would be very well aware of the MTA Guide and its recommended times. His evidence to the contrary surprised me. 143 Mr Wainwright stated at para 51 of his statement that he estimated that cars repaired by a standard repairer would depreciate ten percent more of its value than a vehicle repaired by Perfect Autobody. I doubted that he was competent to express that opinion. That he attempted to do so was of concern. However, to his credit he frankly admitted that he had no proper basis for such opinion when it was put to him in cross examination. 144 I found that at times Mr Wainwright was confused by the cross examination by Mr Manion in relation to the fictitious hours and times involved in the 'funny time-funny money' method and practice, but I formed the same view in relation to Mr Matthews in relation to cross examination of him by Mr Gruzman. In other words, the lengthy cross examination in relation to the 'funny time-funny money' method and difficulties and problems, did not assist me greatly in favour of either party. 145 There was one passage in the evidence which caused me concern in relation to Mr Matthews's credibility. That was the evidence he gave which I set out in detail at para 125 hereof relating to the research which he had done on the Vario roof. When he gave that evidence saying he was familiar through his research with the Vario roof procedure, I was impressed. However, he then conceded in further cross examination that the only research he had done was to look at the photographs in Mr Wainwright's statement. I considered his earlier statements misleading and an attempt to impress the court that he had carried out research sufficient to make himself familiar with the operation, when all that he had done was look at the other party's photographs. 146 I am satisfied Mr Matthews did refer to the previous report on the plaintiffs vehicle prepared by Mr Nunn. I am satisfied Mr Matthews adopted some of the wording from Mr Nunn's report and accepted some of Mr Nunn's figures, but on the basis that he agreed with them. The aspect of the evidence which affected Mr Matthews credit was that he was so reluctant to acknowledge that he had done so. In my view he should have acknowledged his reference to Mr Nunn's report in his witness statement. His failure to do so and his reluctance to concede that he had knowledge and recourse to Mr Nunn's report did not assist his credibility. 147 However, this is not a matter where it is necessary for me to find that I did not believe the evidence of either witness. The general impression I got was that each of them was doing his best to support the position taken by each of their employers and to support the opinions which each of them had put forward. I confirm my earlier finding that I do not regard either of them as an expert witness but each was giving expert evidence. However for the reasons I have given, I found Mr Wainwright to be the more impressive witness. 148 I propose to revisit my finding in relation to the vigorous criticism made by Mr Manion in his submissions to the effect that the evidence of Mr Wainwright should be given no weight because it was incapable of objective testing. The fallacy in that submissions and argument arose out of the fact that Mr Manion, in my view, failed to appreciate that the $30.90 referred to as a 'unit' in Perfect Autobody's quote played exactly the same role as the $30.90 relied upon by Mr Matthews in his report, and it did not matter that in Mr Matthews's report it was referred to with a fictitious reference to an hour. As I have already pointed out, Mr Matthews when preparing his report, accepted that the unit rate used by Perfect Autobody was an hourly rate. Both assessors gave evidence that when assessing a quote they do so on the basis of the unit or fictitious hourly rate of $30.90 and not in the terms of any actual or real charge out rate. Perfect Autobody's quotation was capable of objective testing and this was clearly demonstrated in Item 7 of the Scott Schedule prepared by Mr Matthews. To remove and replace the rear bumper bar Mr Wainwright allowed Perfect Autobody $169.95. In accordance with his evidence that was an agreed figure, but in the quote it was expressed in terms of 5.5 units which, multiplied by $30.90 gave the figure of $169.95. Mr Matthews considered 5.5 units (fictitious hours) too generous and he reduced it to 3 fictitious hours at $30.90 allowing $92.70. The same process was used throughout both assessments. 149 Mr Manion argued that Mr Wainwright did not disclose Perfect Autobody's actual charge out rate. That was true, but the evidence of both assessors was that no quotations indicated the actual or real charge out rate of repairers and they assessed all quotes without that knowledge. I therefore reject Mr Manion's submissions based on those matters. 150 The problem that practice presents for magistrates is that magistrates are not practiced in assessing things on a unit price of $30.90 and to get a better appreciation of what the work involves in time and money, requires the magistrate to convert the units and fictitious time to real time and money. Both assessors agreed that real time was approximately three times the figure of $30.90 or approximately $92.70 an hour. 151 Mr Wainwright's stated that there was an agreement between Perfect Autobody and NRMA based on their joint experience and expertise, that a certain figure would be allowed for specific work on Mercedes Benz vehicles. Mr Wainwright said the figures were not recorded in any guide, but were known to NRMA assessors. That fact detracted from Mr Wainwright's evidence and NRMA's position. I accept that there is such an agreement, but I would have expected it in the ordinary course to be reduced to writing and a copy of the Guide produced to the court. The absence of the Guide added to the difficulty which the court had in determining the matter but was not fatal to the plaintiff's case. 152 The defendant was in no better position. Mr Matthews's assessment of the fair and reasonable cost of repairs was based largely on the MTA Guide. Surprisingly that MTA Guide was not produced to the court, so that I haven't had the benefit of being able to check the allowances in the Guide. It seems to me that both parties are in the same position. The absence of the MTA Guide was not fatal to the defendant's case. 153 It was not in dispute that the MTA Guide does not set out recommended repair or painting times for Mercedes Benz. Mr Gruzman submitted that the reason was self-evident and was supported by the extract which he read from the MTA Guide in relation to the painting allowances (see para 130 hereof). That extract recommended to members of the MTA that they negotiate a rate and time which will allow the repairer a fair margin for the refinishing in accordance with the quality of the vehicle concerned. Mr Matthews gave evidence that the recommended painting rate was $45.00 to $70.00 per hour. Perfect Autobody charged $68.80. The inference from the recommendation in the MTA report was consistent with the evidence of Mr Wainwright's evidence to the effect that the plaintiff's car being an "as new" prestige vehicle required special skill and special attention to restore the paintwork to its pre-accident condition. 154 I am satisfied on the evidence that the fact that the MTA Guide does not include recommended charges for Mercedes Benz is a recognition by the MTA that Mercedes Benz generally are prestige motor vehicles requiring more time, more skill and more precision to repair them to restore them as near as possible to their exceptional high quality. I prefer the opinion of Mr Wainwright that this particular motor vehicle was a prestige, precision motor vehicle built to a very high quality and cannot be compared to ordinary motor vehicles in terms of the time and amount of skill required to repair them. That is not to say that the times recommended for the repair of ordinary motor vehicles would not provide some guide and clearly would be of assistance as to the comparison of the costs, but I am satisfied that more time, skill and care are required to repair a vehicle like the plaintiff's. 155 I find that Perfect Autobody was, at the time of this repair, the only authorised repairer of Mercedes Benz in Sydney. I prefer the evidence of Mr Wainwright to the effect that they do their work in a highly professional manner. His opinion was supported by the photographs they kept and the general impression I got from the evidence. The fact that the sound deadening pad was not replaced, was one indication of poor work, but not of such importance to reflect generally on the standard of work. The presence of the large hammer reflected nothing. I am satisfied they are highly professional repairers. The photograph taken by Mr Matthews of the plaintiff's vehicle some thirteen months after the accident would seem to indicate, at least externally, that the repairs were very well done. 156 Notwithstanding those findings, it was still necessary for the plaintiff to prove that the amount claimed by Perfect Autobody for the cost of repairs of the plaintiff's vehicle came within a range of costs which were fair and reasonable. For the costs to be disallowed, the cases which I referred to previously, would seem to indicate that the costs would have to be extravagant or exorbitant or at least too high. 157 Sensibly in this matter the parties did not go through each item of difference, as indicated in the Scott Schedule. Those matters where the matters proceeded on that basis have taken three or four days before the court. 158 The aspect of the repairs which was most discussed in cross examination was whether or not it was fair and reasonable for the plaintiff to attach the vehicle whilst under repair to the jig. The amount claimed for that operation was $160.68. It was explained in considerable detail. Mr Wainwright explained that because of the high precision complicated parts in this particular Mercedes Benz, especially related to the Vario roof, which folded back into the boot with multi directional hinges, it was absolutely essential that the vehicle when repaired was in absolute correct alignment. If it was out of alignment even to a very small amount, parts of the vehicle including the roof, would not function properly. Despite the protestations of Mr Matthews, I was very comfortably satisfied that it was a wise precaution and good and proper practice for the vehicle to be placed on the jig. I am satisfied that the dismantling of the vehicle did disclose damage to the chassis rail. The amount claimed in relation to the use of the jig was $160.68. It seemed to me to be a moderate amount and I was surprised that the defendant so vigorously opposed the use of the jig. 159 In relation to the painting, I am not satisfied that the plaintiff has proved that the application of the paint in this matter was a three stage operation. It may well have been, but I am not satisfied Mr Wainwright allowed $68.80 an hour. I prefer the evidence of Mr Matthews on this point. I had misgivings as to whether the amount which he allowed of $57.00 was too low, even for a two stage application of paint, but in the end I have decided to allow the painting at the rate of $57.00 per unit. I have examined carefully Mr Wainwright's submissions and Mr Matthews submissions as to the amount of time allowed for the painting. I generally prefer the evidence of Mr Wainwright except in relation to the re-painting of the inner luggage compartment (Item 34). The time allowed seemed excessive. I propose to allow a reduction of $250.00 in the amount claimed for the painting of the luggage compartment. In relation to the reduction in the rate for the painting as I understand it, there were approximately 60 units for the painting, and I propose to deduct $700.00 as an appropriate figure calculated roughly at 60 times $11.80. 160 I am not satisfied on the evidence that the amounts allowed for the removal and replacement of items were other than within a range that was fair and reasonable. I found it significant that it was only after Mr Matthews had seen the photo diary kept Perfect Autobody, that he was prepared to accept that there was damage to the chassis rail. I was however concerned as to the amounts claimed in the supplemental quotations in relation to the refitting and checking of the Vario roof assembly. Mr Matthews sought to reduce the amounts claimed in Items 79, 80 and 81 by an amount of $1,514.10. I appreciate the intricacy and delicate nature of the work, but after considering the statements of Mr Matthews in the Scott Schedule and the evidence in the matter, I was not satisfied that the costs claimed were fair and reasonable or within a range that was fair and reasonable, and I propose to reduce the amount claimed by $600.00. 161 The charge for replacing the deadening material which was not in fact replaced at $13.46 should be deducted. 162 I am not satisfied on the evidence that any further reductions should be made. As indicated and for the reasons given, I generally preferred the evidence of Mr Wainwright and I was satisfied that the other charges made did come within a range which was fair and reasonable. 163 I considered it reasonable for the car to be cleaned and polished at a cost of $120.00. I am satisfied the work was required to restore the vehicle as near as possible to its pre-accident condition. Whilst I have made some reduction for the painting, I have not allowed anywhere near the reduction in time sought by Mr Matthews. I am satisfied he did not recognise the additional care and skill required to repair the car to the very high standard of a Mercedes Benz. I preferred the defendant's evidence that only the edges of the right and left side door apertures were painted. 164 Mr Wainwright was cross examined regarding the differences in the odometer readings and as to when the repairs were in fact carried out. I was satisfied that the repairs were probably carried out between 9 February and 26 February 2004 and that between the date of the quotation (19 December 2003) and the date of repair (9 February 2004) the car travelled about 1564 kilometres. 165 Mr Manion submitted that there was no evidence that the Vario roof was not damaged during that 1564 kilometres or before the accident. I do not accept that submission. I am satisfied that if the operation of the roof had been affected in the accident or subsequently before repairs were carried out, the owner would have made some complaint and the complaint would have been recorded. I am satisfied in the absence of any complaint, that the roof was probably working satisfactorily when the repairs were commenced and the roof itself was not damaged in the accident. 166 In coming to that decision I also had regard to the evidence of Mr Wainwright that the basis on which the NRMA assesses quotes prepared by Perfect Autobody was the same whether as in this matter, the NRMA had a recovery action against another insurance company, or whether the NRMA was the insurer of the vehicle at fault, and will therefore itself be responsible for the cost of the repairs. I considered that evidence significant. 167 I appreciate the importance of these matters to the insurance companies, but it does appear to me that there must be considerable doubt as to whether litigating these matters in this manner in this court is a satisfactory way of resolving such disputes. An attempt by the court to refer similar matters to an independent loss assessor has not been successful. One practical solution may be that if there are particular problems with a particular brand of motor vehicle or with particular repairers, that arrangements should be made for the loss assessors of both companies to inspect the vehicle before repairs and for the matter to be resolved prior to repair. 168 Sadly it would seem that the practical resolution of these disputes has in fact gone backwards in the period of 150 years. It is interesting to note that in The Pactolus the initial assessment of the damages was referred to the Registrars and a merchant to assess the proper costs of the repair. It would appear desirable that some consideration be given to matters of this nature, being determined by a tribunal or court with the members having some special expertise in the repair of motor vehicles. 169 I would propose to make the following orders: 1. There will be judgment for the plaintiff in the sum of $13,491.50. 2. The plaintiff will be entitled to interest on that amount from 1 April 2004 to be calculated by the Registrar. 3. Costs follow the event. The defendant is to pay the plaintiff's costs and disbursements as agreed. In default of agreement within 28 days the costs are to be assessed under the Legal Profession Act. 170 I shall hear from the parties in relation to the proposed orders. B.A. LULHAM 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.