Kingsbury-Carr v Kiliman [2007] ACTSC 36 (8 June 2007)

Last Updated: 8 May 2008

NEVILLE KINGSBURY-CARR v GLENN WILLIAM KILIMAN

[2007] ACTSC 36 (8 JUNE 2007)

DAMAGES - motor vehicle property damage - replacement cost - more reasonable than repair cost.

Magistrates Court Act 1930 (ACT), s 275, s 277

Court Procedures Rules 2006 (ACT), r 5052

Beaumont v Cahir [2004] ACTSC 97, (unreported, 29 September 2004), Cooper J

Chaloupka v Berryman Small Claim No 60708 of 2006, 13 July 2006

Murphy v Brown (1985) 1 NSWLR 131

Jansen v Dewhhurst [1969] VR 421

Johnson Tiles Pty Ltd (Barrett Burston Malting Co Pty Ltd v Esso Australia Pty Ltd [2003] VSC 211 (unreported, 20 June 2003), Gillard J

ON APPEAL FROM THE SMALL CLAIMS COURT

No. SCA 56 of 2006

Judge: Gray J

Supreme Court of the ACT

Date: 8 June 2007

IN THE SUPREME COURT OF THE )

) No. SCA 56 of 2006

AUSTRALIAN CAPITAL TERRITORY )

ON APPEAL FROM THE SMALL CLAIMS COURT

BETWEEN: NEVILLE KINGSBURY-CARR

Appellant

AND: GLENN WILLIAM KILIMAN

Respondent

ORDER

Judge: Gray J

Date: 8 June 2007

Place: Canberra

THE COURT ORDERS THAT:

1. Leave to appeal be refused.

2. The question of costs is reserved.

1. On 10 November 2006, Neville Kingsbury-Carr (the appellant) was given leave to appeal from the judgment of Magistrate Lalor sitting as the Small Claims Court under the Magistrates Court Act 1930 (ACT). On 19 October 2006, judgment had been entered in the appellant's favour in the sum of $2,500.00 plus lodgement costs of $100.00 and interest on $2,500.00 from 22 December 2005 to 19 October 2006 in the sum of $185.16. The judgment was obtained in an assessment of damages arising from a motor vehicle accident on 20 October 2005 in which the appellant's vehicle was significantly damaged. Glenn William Kiliman (the respondent) admitted liability and the matter proceeded as an assessment of the quantum of damages. The insurer of Mr Kiliman's vehicle exercised its right of subrogation and conducted the proceedings on his behalf.

The nature of the proceedings

2. Section 275 of the Magistrates Court Act 1930 provides:

Appeals--Small Claims Court

(1) A party to a proceeding in the Small Claims Court may, with the Supreme Court's leave, appeal from a judgment of the Small Claims Court in the proceeding.

(2) The Supreme Court may grant leave only if satisfied--

(a) that the decision of the Small Claims Court on a question of law was wrong; or

(b) that the conduct of the proceeding in the Small Claims Court was unfair to the applicant for leave to appeal.

3. It can be seen from that provision that this court is to proceed on the matter as a question of leave and, if leave is granted, then the court is to exercise the powers given then under s 277 of the Magistrates Court Act 1930 but now under Rule 5052 of the Court Procedures Rules 2006 in respect of an appeal to this court. That is a fact that does not appear to have been appreciated by the parties because the matter came before this court on an application for leave to appeal out of time on 10 November 2006 and leave to appeal was granted. Strictly, that application and the consequential order should have only been to extend the time in which the application to seek leave to appeal should have been made. It follows that I consider that I should treat this matter as an application for leave and only grant that leave if I am satisfied in terms of s 275(2) that the matter or matters referred to in that subsection justify the grant of leave. Having regard to the course of this matter, it is convenient, however, to continue to refer to Mr Kingsbury-Carr as the appellant as the matter proceeded before me on a notice of appeal.

4. The appellant was unrepresented. Mr Walker appeared as counsel for the respondent.

The proceedings in the Small Claims Court

5. The appellant made application in the Small Claims Court for the damages sustained when the respondent's motor vehicle ran into the rear of the appellant's stationary vehicle. The accident occurred on 20 October 2005 at the junction of Limestone Avenue and Anzac Parade, Reid. The appellant's vehicle was a 1985 Ford Telstar Ghia AR sedan (the 1985 Telstar).

6. The damages claimed included $6,949.15 being a quote from a panel beater to repair the damage, $135.00 to replace a detached exhaust, $920.00 the quote to reinstate the air-conditioning (which, on the hearing of this appeal, the appellant wished to amend to $1,028.50), $3.00 for a parking fee, $42.00 for a fare to Sydney, a claim for the appellant's time spent in connection with the damages being nine hours at $350.00 per hour, a total of $3,150.00, and finally a sum of $118.56 for kilometres travelled. The total sum exceeded $10,000.00 (the jurisdictional limit of the Small Claims Court) and the appellant waived the excess. The respondent admitted liability and agreed to entry of judgment in the sum of $2,400.00. It was the respondent's case that the sum of $2,400.00 represented the replacement value of a similar vehicle. It was the appellant's case that he was entitled to have the vehicle repaired for the quoted price and that he was entitled to the other damages claimed as costs incurred by him in connection with his damages claim.

Grounds of appeal

7. The notice of appeal set out the following ground:

That the learned Magistrate's decision erred in law by failing to apply the legal principles for the assessment of the Applicant's property damages caused by the Respondent's admitted negligence, and cited by the Appellant to the Court in:

° Beaumont v Cahir [2004] ACTSC 97 [29 September 2004] and applied in

° Chaloupka v Berryman SC 60708 of 2006, and

° Murphy v Brown [1985] 1 NSWLR 1, which cited

° Council of the Shire of Bland v Anthoness NSWFC [1960] NSWR 254.

8. The ground of appeal in this form is particularly unhelpful. It does not set out in any particularity the error or errors of principle said to have been made by the magistrate or the principle or principles which the magistrate should have applied.

The appellant's written submission

9. The appellant filed an extensive written submission which set out the facts and the claim. It then sought to précis the defence, the expert's evidence, objections to that evidence, the appellant's evidence, the legal authorities referred to, the appellant's submissions, the defence submissions and the appellant's reply. That is followed by what was said to be a précis of the magistrate's judgment. The written submission then commented and made submissions upon the basis of fact in the magistrate's judgment before coming to the legal principles which the appellant said should have applied.

The legal principles for assessment in this case

10. The written submission identified the legal principle as being, "Where damages caused to a chattel by wrongful conduct the following legal principles establish that the owner is entitled to recover the reasonable cost of repairs:". The written submission then cites Beaumont v Cahir [2004] ACTSC 97, (unreported, (29 September 2004), a decision of Cooper J sitting as a judge of this court, and describes the decision as a primary authority.

11. Beaumont v Cahir (supra) involved an appeal from a magistrate who had held that the proper measure of damages for a badly injured horse, in the circumstances of that case, was the cost of treatment to restore the horse to a sound condition rather than the replacement cost of another horse. In that case, the cost of treatment of the horse vastly exceeded the replacement cost. The magistrate had awarded damages on the basis of the cost of treatment and the defendant appealed. In Beaumont v Cahir, Cooper J said, at [32]:

The value of the chattel in the sense of what the owner would have received for it if it was sold, in an available market, if one existed on the date on which it was damaged, is irrelevant. The market value is the cost of obtaining a replacement chattel having the same or substantially the same characteristics of the chattel damaged if there exists a market in which such a substitute could be obtained: Darbishire v Warran [1963] EWCA Civ 2; [1963] 1 WLR 1067 (CA) at 1074, 1078; Jansen v Dewhurst [1969] VR 421 at 427; Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88 at 99 - 100; Belz v Oslob Pty Ltd [1989] BC 8901306 (NSWCA) at 4 - 5. What is relevant is the use to which the chattel was put before it was injured, and what use it is intended to be put in the future, as this is material for determining what the measure of damages should be: Hoad v Scone Motors Pty Ltd at 100. There was no onus on the respondent to prove whether or not she could have obtained a replacement horse which satisfied her personal requirements for a horse for dressage competition, and if one was available, the cost of it. The respondent was required to prove that the moneys she expended were a direct consequence of the appellant's tortious conduct and that it was reasonable to expend such moneys.

12. In his written submission, the appellant in this case seems to have misunderstood Cooper J's judgment. He has taken the judgment as authority for the proposition that the cost of replacement of a chattel is not the proper measure of damages where damage is suffered by wrongful conduct on the part of another. That, of course, is not the case as Cooper J makes clear in Beaumont v Cahir at [18] - [23]. In the passages from the various judgments he cites, Cooper J stresses that the proper question in determining the question of damages is the reasonable expenditure required to make good the damage sustained as a result of the wrongful conduct of the tort feasor. The question, therefore, in the circumstances of this case, is whether it would be reasonable to incur the expenditure in repairing the motor car or whether the reasonable option is to replace the vehicle.

13. In the present case, the magistrate referred to the passage in Beaumont v Cahir that I have set out, and drew from that passage the appropriate principle. The magistrate said:

The respondent [in Beaumont v Cahir] was required to prove that the monies expended were a direct consequence of the appellant's tortuous conduct and that it was reasonable to expend such monies.

14. The appellant also sought to reply upon a decision by a referee in the Small Claims Court in a matter of Chaloupka v Berryman in application Small Claims No 60708 of 2006, the decision being given on 13 July 2006. In that case, the referee sought to apply Cooper J's reasoning in Beaumont v Cahir to the facts of the matter before the referee. The decision does not raise any different principle or go any further than applying the judgment of Cooper J to the facts of that case. However, the facts in Chaloupka are quite distinguishable from the present case. Chaloupka was concerned with whether, as a consequence of an accident, the damage to the motor vehicle should be properly assessed as the cost of repairs which amounted to approximately $1,700.00 - $2,000.00, or whether the damages were to be confined to the "write-off value" of the vehicle said to be $880.00. In that case, the basic premise accepted by the referee was that there were no comparable motor vehicles on offer to the public at that time. Accordingly, it could be said that it was reasonable in those circumstances to repair the vehicle. I do not regard that case as being of assistance in the present case.

15. The authority more in point in this case is the decision of the New South Wales Court of Appeal in Murphy v Brown (1985) 1 NSWLR 131. That case was concerned with whether a plaintiff claiming damages for a damaged motor vehicle was entitled to prove the reasonable cost of repair of the vehicle without showing that the value of that vehicle was greater than the amount reasonably required to repair it.

16. Priestley JA (with whom Hope JA agreed) dealt with what he described as the two views of a plaintiff's obligation in such a case. As authority for one of those views, he cited (at 134) a passage from Jansen v Dewhhurst [1969] VR 421 at 426. Newton J, of the Victorian Supreme Court, said in that case:

The general rule is that where there is a prima facie measure of damages, then the burden lies on the defendant of showing that the plaintiff is entitled to recover less than such prima facie measure, because the plaintiff should have minimized his loss: ... But in the present case the prima facie measure of damages is either cost of repair or cost of replacement, whichever is reasonable: the burden is on the plaintiff to show which of the two is reasonable in the circumstances. Hence the general rule just mentioned does not apply. The plaintiff's obligation to minimize his (sic) loss by acting reasonably is incorporated into the ordinary measure of damages and the onus is on the plaintiff throughout: ...

17. In respect of this view, Priestley JA said, at 135:

Newton J cited as the principal authorities justifying his opinion Bartlett v D H Small & Son Ltd [1967] NZLR 260 and Van der Wal v Harris [1961] WAR 124. His view has been said to be correct for Australia generally: see Professor Luntz in his chapter on "Damages" in the Australian Commentary on Halsbury's Laws of England, 4th ed (1978) par C1163 at 22, 23.

18. After this citation, Priestley JA set out what he referred to as the other view (at 135):

The other view is stated in Halsbury's Laws of England, 4th ed, vol 12, par 1163 at 456, where the following appears:

The basic rule is that the measure of damages in the case of damage to a chattel is the cost of repair, but if it is unreasonable from a business point of view to repair the article, or if the article is damaged beyond repair, then the basic measure is the cost of replacement in an available market.

Numerous authorities can be found supporting this formulation of the rule many of which are cited in Halsbury. In Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88 at 99, Samuels JA expressed the opinion that that passage was correct and that there was ample authority for it.

The situation is complicated because many of the cases referred to by Halsbury (English version) and Samuels JA are cases where the rule was stated in a factual context where the same result would have been reached if the rule had been stated in the way favoured by Professor Luntz, and where therefore the court was not addressing the precise point now in question.

A further complication is that it is undoubtedly the practice in many claims for damages to motor cars for the court to accept proof of the reasonable cost of repair to the car without any direct reference to the value of the car immediately before it was damaged. This practice seems to me to be as easily explained by tacit recognition by the parties and the court in such cases that the appropriate figure will be arrived at by that method as it is by taking the practice as reflecting the correct view of the law in all circumstances and even against the opposition of the defendant.

The different ways of stating the relevant rule both flow from what is described in the title "Damages" in Halsbury's Laws of England, 4^th ed, vol 12, as "The first principle; restitutio in integrum" which is said to mean that "so far as money can do it, the injured person should be put in the same position as he would have been in if he had not sustained the wrong ..." (par 1129 at 430). Professor Luntz's Australian Commentary already referred to does not dissent from this statement. The question in the case of damage to a plaintiff's motor car, is whether the principle requires his being restored to the position he would have been in if the accident had not happened by being put in the position of having a car substantially identical with the one that he had at the time of the accident or to the position where he has the car that he had at the time of the accident, in its pre-accident condition. In the case where there is something special about the plaintiff's car the latter position appears to me to be required by the "first principle". In the case where, as here, there is nothing special about the car, and in the absence of any authority dealing with the precise distinction my own inclination is to think that the former of the two ways of putting it is in closer accordance with the "first principle".

19. In the particular circumstances of the case before him, Priestley JA held that he did not have to express an opinion as to which view was to be preferred. It may be noted, however, that neither view of the way in which a plaintiff is required to prove his damage favours the appellant in this case. If the first view expressed by Priestley JA were to be the principle, then it would be for a plaintiff to show which of the cost of repair or the cost of replacement was reasonable. The alternative view still requires a court to consider whether it would be unreasonable to repair the vehicle having regard to the replacement cost, although that may require a defendant to raise the issue.

20. The present case was one where there was nothing special about the appellant's motor vehicle that would favour the repair cost being preferred as the reasonable option to the far less expensive replacement cost. The evidence given by the repairer called in the appellant's case referred to the vehicle as "just a normal Ford Telstar". The appellant did not give evidence of any special characteristic of the vehicle which related to the use to which the vehicle was put that required the vehicle to be repaired rather than replaced. It may be assumed that the vehicle provided a mode of transport for the appellant and that the appellant was entitled to be placed in the position of having a substantially identical vehicle rather than the vehicle that he had had at the time of the accident in its pre-accident condition in order to satisfy the use to which the appellant puts his vehicle. A replacement vehicle would therefore place the appellant in the same position as he would have been had he not suffered the wrong.

21. The judgment of Mahoney JA (with whom Hope JA also agreed) in Murphy v Brown (supra) approached the matter by reference to what Mahoney JA called "the basic rule in the law of damages". He set out at 132 that rule as, "... that the plaintiff is to have such money as will, as far as money may, put him (sic) in the same position as he (sic) would have been if the tort had not been committed."

22. Mahoney JA (at 133) then said:

... there is a further rule which operates by way of qualification of the general principle. Where a plaintiff claims the cost of the work necessary to put him or his property in the pre-injury condition, the work must not merely be necessary for that purpose but "it must be a reasonable course to adopt" to do that work: Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 at 618. And, as the defendant's argument here suggested, it will not normally be reasonable to spend, for example, $4,000 to restore a vehicle which, undamaged, was worth, say, $1,000.

That last observation has direct relevance to this case.

23. The citations from Murphy v Brown to which I have referred, are quite contrary to the propositions that the appellant would wish to advance as the principle to be applied in the present case.

24. Bearing in mind that the ground of appeal in this matter was restricted to alleging an error of law in failing to apply the legal principles for the assessment of property damage and that I have found that there is no such error, that finding is sufficient to refuse leave to appeal.

The factual issues

25. Nevertheless, in the course of his written submission, the appellant took issue with the facts relied upon by the magistrate in making his assessment. I am not able to see that the magistrate misapprehended the facts placed before him and he was entitled to refer to the matters that he did in his judgment. The evidence that the appellant appears to have particular concerns about is the material relied upon by the magistrate to determine the proper cost of a replacement vehicle. That evidence was tendered as part of an exhibit tendered by the loss assessor called by the respondent. One of the documents tendered as part of that exhibit was an extract from Trading Post Auto dated 16 November 2005 (the accident having occurred on 20 October 2005). That page listed a number of Ford Telstars manufactured from 1984 to 1989. In all cases but one, the price of the vehicles available was below the $2,500.00 that the magistrate awarded by way of replacement costs in this matter. The appellant now makes the point that there was no Ford Telstar Ghia AR 1985 listed in this document. Nevertheless, from the evidence before the magistrate there is no reason to think that a replacement vehicle of an earlier or later model as the appellant's damaged vehicle would not be a proper replacement vehicle. It is true also that no vehicle was advertised as being available in the Australian Capital Territory. That was a matter, no doubt, for the appellant to take up if it were thought to mean that additional costs might be incurred in making vehicles available from another State.

The claim for economic loss

26. The appellant's written submission also raises the issue of the magistrate's treatment of the economic loss that he claimed was a direct result of the accident. That loss included the appellant's time spent travelling to and with the panel beater, mechanic and air conditioning service provider as well as miscellaneous matters such as the police report, parking fees and fares to Sydney. The magistrate dealt with this claim by disallowing it in light of the fact that the appropriate measure of damages was the replacement of the vehicle. In the hearing before me, I understood the appellant to agree that if this was the proper outcome of these proceedings, then the magistrate was entitled to treat his claim in the way that he did.

27. The appellant supported this claim by referring to Johnson Tiles Pty Ltd (Barrett Burston Malting Co Pty Ltd v Esso Australia Pty Ltd [2003] VSC 211 (unreported, 20 June 2003) per Gillard J. The appellant cited the following passage from the judgment at [46] and [47] of that case:

In my opinion, the principle of law is clear. The cases establish that a victim of negligence may claim compensation for the physical damage suffered and any economic loss consequent upon the physical damage. The economic loss must be directly consequential upon that physical damage. The general rule concerning quantification of damages is that stated by Lord Blackburn in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 at 39 where his Lordship defined the measure of damages as -

That sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.

The statement of principle has been often cited with approval since it was first stated, and is the established law in Australia. See Butler v Egg and Egg Pulp Marketing Board [1966] HCA 38; (1966) 114 CLR 185 at 191 and Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 at 412. Its application involves a comparison of the hypothetical situation if the tort had not occurred, and what in fact happened.

28. The principle cited is unexceptional. However, to establish such economic loss there is a requirement that material be placed before the court to establish that loss. By taking the view that the proper measure of damages in this case was the replacement value of the vehicle, the efforts expended by the appellant in respect of the repair cost cannot be said to be consequential upon the physical damage sustained. The further difficulty faced by the appellant is in establishing any loss by demonstrating an inability to engage in income producing work as a consequence of doing those things which the appellant would wish to say were properly consequential upon that physical damage.

29. It is true that the magistrate seemed to misunderstand this claim and to have equated the appellant's claim in this regard as some form of professional fees incurred. However, that would not seem to be material having regard to the fact that the magistrate could not properly regard what was said to be the economic loss as consequential upon the damage or as quantified by any evidence concerning work foregone by the appellant.

30. It follows that the appellant has not satisfied the pre-conditions upon which leave might be granted under s 275 of the Magistrates Court Act 1930. Leave for appeal is refused. At the conclusion of the hearing, Mr Walker asked that I reserve any question of costs. I do so.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gray.

Associate:

Date: 8 June 2007

Counsel for the appellant: Self Litigant

Counsel for the respondent: Mr P Walker

Solicitor for the respondent: Williams Love & Nicol

Date of hearing: 25 May 2007

Date of judgment: 8 June 2007