Supreme Court New South Wales Medium Neutral Citation: Rixon v Arsalan [2019] NSWSC 1136 Hearing dates: 27 August 2019 Decision date: 03 September 2019 Jurisdiction: Common Law Before: Basten J Decision: (1) Dismiss the appeal from the judgment and orders of the Local Court. (2) Order that the plaintiff pay the defendant's costs in this Court. Catchwords: TORTS – damages – damage to chattel – motor vehicle accident – damaged vehicle unavailable while undergoing repairs – damages for inconvenience – owner's need for replacement vehicle – rental charges incurred for vehicle of equivalent value and prestige to damaged vehicle – whether charges recoverable – whether charges reasonably necessary to meet need Legislation Cited: Local Court Act 2007 (NSW), s 39 Cases Cited: Anthanasopoulos v Moseley (2001) 52 NSWLR 262; [2001] NSWCA 266 Nguyen v Cassim [2019] NSWSC 1130 Souaid v Nahas [2019] NSWSC 1132 Wong v Maroubra Automotive Refinishers Pty Ltd [2015] NSWSC 222 Category: Principal judgment Parties: Alex Rixon (Plaintiff) Ahya-Ud-Din Arsalan (Defendant) Representation: Counsel: B W Walker SC / J Gruzman (Plaintiff) S G Habib SC / K Oliver (Defendant) Solicitors: Martin P Board & Associates (Plaintiff) MCK Lawyers (Defendant) File Number(s): 2018/391931 Decision under appeal Court or tribunal: Local Court Jurisdiction: Civil Date of Decision: 22 November 2018 Before: Keogh LCM File Number(s): 2018/63169 Judgment 1. BASTEN J: This matter involved an appeal from the Local Court with respect to the assessment of damages for loss of the use of the plaintiff's motor vehicle which was damaged in a collision with the defendant on 8 August 2017. It was one of three cases heard together in this Court, each of which raised similar issues as to the applicable legal principles. These are discussed in the companion case of Nguyen v Cassim [1] and need not be repeated. 2. Mr Rixon's damaged vehicle was an Audi A3 sedan; the repairs took a little over two months. For most of that period the plaintiff hired another vehicle of the same make and model. The rental covered a period of 69 days, at a base rate of $115 per day, but, with additional charges, at a cost of $186 per day. The total charge was $12,829.91. This amount was claimed in proceedings commenced in the Local Court for damages flowing from the inconvenience of the loss of use of the damaged vehicle whilst undergoing repairs. 3. Magistrate Keogh gave judgment in favour of the plaintiff, but in an amount well below that claimed, namely $4,226.25, plus interest. She held that the needs of the plaintiff, as established by the evidence, could have been met by the hire of a Toyota Corolla at a cost reflected by the amount of the judgment. 4. The plaintiff appealed under s 39 of the Local Court Act 2007 (NSW) on the basis of errors of law committed by the magistrate. The plaintiff submitted that, as a matter of law, he was entitled to compensation calculated as the expense of obtaining a vehicle of equivalent value to that which had been damaged, and not by reference to a vehicle of lesser value which would have satisfied his needs. Further, he submitted that the magistrate erred in concluding that the actual cost of the replacement vehicle included non-compensable benefits and was above a market rate, "when there was no evidence to support that finding." [2] Finally, to the extent that the magistrate relied upon the plaintiff's failure to mitigate his loss, it was baldly submitted that "[t]he doctrine of mitigation was not pleaded and has no application to the assessment of damages in the proceeding." [3] Reasoning of magistrate 1. The judgment in this matter was delivered two months after the judgment in the Local Court in the companion case of Souaid v Nahas. [4] The magistrate referred to that judgment and echoed the view expressed there that there was "no decision directly on point", although she found a number of decisions "extremely persuasive", leading her to the conclusion that "the plaintiff is only entitled to be compensated for the loss of his motor vehicle in an amount that represents a reasonable rate of hire for a suitable replacement vehicle that he has demonstrated a need for." [5] 2. With respect to mitigation, the magistrate stated: "[12] The doctrine of mitigation relieves a defendant from paying that portion of the loss which can be attributed to the plaintiff's unreasonable conduct. Conversely it operates to permit the plaintiff to recover additional expenses incurred in reasonable attempts to confine the loss. The onus is on the defendant to prove the plaintiff has not taken reasonable steps to mitigate his or her loss." 1. The plaintiff's claim that principles of mitigation were not in play in this matter should not be accepted. To the extent that the consequential loss involving the inconvenience of not having use of the vehicle whilst it was being repaired was compensable, it was appropriate for the plaintiff to take reasonable steps to alleviate or extinguish the inconvenience. He did that by hiring a replacement vehicle. However, whether the steps he took in that regard were reasonably necessary was a matter to be determined upon his claim for compensation. 2. There is a degree of artificiality in seeking to apply a principle of mitigation to steps taken by way of mitigation. However, it is not necessary to resolve this semantic issue. The defence expressly put in issue the following matters, namely that: 1. the plaintiff could have hired a vehicle for two-three weeks at a time at a reduced rental; 2. the daily rate of hire claimed was excessive, unreasonable and not representative of the market hire rate; and 3. the hire of the vehicle on credit led to charges which included non-compensable benefits. 1. Further, the defendant called evidence as to what it said were the relevant market rates. Whether described as a plea in mitigation or not, there was no doubt that each of these considerations was in play and that the defendant accepted a burden of proving the elements of its defence. 2. It may be said further in this context that the magistrate's findings that the actual hire costs included costs of non-compensable benefits and were higher than relevant market rates was supported by the evidence. The ground of appeal asserting that there was "no evidence" to support what were in fact two separate findings was itself without foundation. 3. The requirement that the plaintiff demonstrate a real need for a replacement vehicle by reference to the usage of the damaged vehicle prior to the accident was derived from the reasoning in Anthanasopoulos v Moseley [6] and its application by McCallum J in Wong v Maroubra Automotive Refinishers Pty Ltd. [7] The magistrate drew from those authorities the principle that "[t]he measure of damages is based on the need for the replacement vehicle and those damages should be calculated by reference to the market rate of hiring a replacement vehicle." [8] 4. With respect to the relevant needs, the magistrate held: "[41] In this case the plaintiff's need was uncontested to the extent he needed to travel to work, to collect and drop off a child to school and for general errands. [42] He also said he needed a European car, for safety reasons and as safety was a significant factor in his choice of a luxury European car he claimed he was entitled to a similar replacement vehicle. [43] I accept the plaintiff is of the belief that his Audi 3 is a vehicle with a superior safety rating than many other cars however his opinion is not proof of that. [44] The inference I drew from his evidence was simply that his preference was to drive a European car rather than any other make of car. The only need he demonstrated was to meet his general transport requirements. He did not prove that he had any particular need for a particular car. For instance he did not need a 4 wheel drive because of any particular terrain his car was required to drive on, he did not need to collect clients and provide them with a particular degree of luxury, or represent his business and therefore require a particular standard of vehicle. He also did not require a car of a particular size. [45] The reasonable inference that can be drawn from the evidence is he needed a car to meet his and his family's daily transport requirements. His car was relatively new and consequently in good condition and well maintained. It seems to me any replacement vehicle should have had those same characteristics to meet his needs. … [52] The defendant is relieved from paying that portion of the plaintiff's loss which is attributed to his choice which is not compensable, rather than his need, which is compensable." 1. The magistrate concluded that a Toyota Corolla would have been sufficient to meet his needs and would therefore have been an appropriate replacement vehicle. She assessed the reasonably necessary expense by reference to the rates in evidence for hiring a Toyota Corolla on the basis of a six day hire from the city depot of Hertz. 2. It should be noted that the magistrate had before her evidence as to market rates which she summarised in the following passage: "[25] The market rate is variable. The evidence satisfied me that it varies depending on the location of the hire and the duration of the hire. For instance, due to industry practice the hiring of a vehicle from Sydney Airport would involve the plaintiff in a greater expense than hiring from another location. Furthermore it is apparent from the evidence hiring for a day or a day at a time would require the plaintiff to pay a higher daily rate than if the period of hire was calculated weekly or monthly." Conclusions 1. There is no basis for concluding that the findings of fact set out above were not properly made on the evidence. Indeed, there could be no challenge to those findings, not alleging error of law, short of a no evidence ground. The real challenge was to the result, namely that, having found that the plaintiff had a need for a replacement vehicle, the magistrate failed to accept that the need was only adequately satisfied by the hire of a vehicle of equivalent value to the damaged vehicle. Whether the magistrate was entitled to assess damages for the inconvenience suffered from the damaged vehicle being unavailable by reference to the market rate for a vehicle of lesser value which was capable of satisfying all aspects of the plaintiff's needs was a question of law which was challengeable on the appeal. That challenge was made, but should be rejected. The approach adopted by the magistrate was consistent with the principles explained in authorities binding on her and to which full reference has been made in the companion case of Nguyen v Cassim. 2. The appeal should be dismissed with costs. ********** Endnotes 1. [2019] NSWSC 1130. 2. Summons, appeal ground 4. 3. Plaintiff's written submissions, par 22. 4. For appeal in this matter, see [2019] NSWSC 1132. 5. Primary judgment at [10]. 6. (2001) 52 NSWLR 262; [2001] NSWCA 266. 7. [2015] NSWSC 222. 8. Primary judgment at [21]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 September 2019