Written by Elyse Liakopoulos
In 2023, the Melbourne Magistrate Court considered the actions of Kar Ping Leung and his repairer and whether those actions showed a failure to mitigate loss. The Court also considered different paint methodologies utilised by repairers.
Facts
The relevant facts of the case were as follows:
- Kar Ping Leung had a 2018 Audi A6 which sustained minor damage to the boot lid, bumper bar and the beaver panel when Anita Burom drove into the rear of Mr Leung’s car.
- Mr Leung’s repairer, Abbottsford Panel Beaters, organised a hire car through Hire Cars Australia for Mr Leung to use while they completed the repairs.
- Legal proceedings were issued in Mr Leung’s name by lawyers engaged by the repairer to recover repairs quantified in the sum of $16,640.55 and hire car charges in the sum of $6,949.00.
Evidence
- Mr Leung gave evidence that he took his car to the repairer the day following the collision. Mr Leung accepted an invitation to sign an agreement for a hire car and was provided with a Hyundai Accent. He was told that the at fault party (Ms Burom) would pay for the hire car.
- Mr Leung made no enquiries as to the price of the hire car and the daily hire rate was left blank in the rental agreement. He also did not make any enquiries about what the repair of his car would involve.
- Mr Leung remained in the hire car for 38 days at a rate of $182 per day.
- A repair estimate was prepared the same day Mr Leung dropped his car off and although there was only minor damage to the paint on the boot lid, the estimate provided for painting not only the boot lid but also the left and right-hand side quarter panels, cant rails, sill panels, door apertures, and roof. That totalled $3,920 for the painting alone.
- The expert called on behalf of Mr Leung, Mr Racco, gave evidence that the preferred paint method was to “blend out” to the surrounding panels. Although Mr Racco represented the repairer, he worked in administration.
- Mr Bridges was the assessor for the repairer. He conceded under cross-examination that his assessment would require adjustment and he “undertook no independent verification of the work done but relied on the information given to him”.
- The insurer for Ms Burom had one of their assessors who had specialised training as a spray painter, Mr Casella, inspected the vehicle in person prior to repairs. Mr Casella gave evidence that a competent painter would be able to paint only the affected panel in a manner which is not noticeable and, to extend beyond that, is wasteful.
- Mr Casella had reduced the reasonable repair figure down from Mr Bridges’ original assessed figure of $12,532.71 to $3,503.07.
- Mr Casella’s evidence was largely supported by Mr David Palmer, an independent motor assessor who had been in the motor vehicle industry for 53 years.
- Mr Palmer gave evidence that the reasonable repair timeframe would be four to five days.
- Mr Scott, the manager of Hire Car Australia, gave evidence that Hire Car Australia leave vehicles at the panel shop and that he had filled out the form for Mr Leung to sign and advised him that “there will be a rate” determined later.
- Mr Scott gave evidence that he asks repair shops to leave the rate blank when taking customers through the rental agreement. This allows him to determine the rate once he knows who will be paying. Specifically, he said he will provide a more favourable rate for “good payers” – that is, those who paid promptly and without causing him to “sit around” in courts arguing about the market rate.
- With regards to whether Mr Leung could obtain damages for hire car, Ms Burom relied upon Arsalan v Rixon including the passing references made to Dimond v Lovell and submitted that the hire car charges were not recoverable as no price had been inserted into the contract.
Magistrate Court Judgment
A decision was handed down by Magistrate Robinson which accepted Ms Burom’s argument that the repairs claimed were excessive. In reaching this conclusion, His Honour gave more weight to the evidence of Ms Burom’s assessor, Mr Casella, given his specialist expertise in spray painting and the support of Mr Palmer. His Honour found that the method of repairs utilised by the repairer was not reasonable.
In relation to the hire car charges, His Honour accepted the rental agreement was an enforceable contract despite the price not being inserted, but that Mr Leung had failed to mitigate loss by hiring the vehicle for 38 days.
The Court held that a reasonable period to fix the car was five days but that there was a 22 day period which the vehicle sat at the repairer waiting to be assessed.
Despite the assessment being in the hands of the insurer, His Honour stated “where the car was so slightly damaged, a reasonable person would have at least queried why the car could not continue to be driven instead of immediately accepting the offer of a hire car for an indeterminate period, especially knowing that it would fall upon Ms Burom to pay”.
Implications
It is quite common for hire car providers to argue a not at fault party is not responsible for delays caused by repairers or insurers. However, it is important to remember that the not at fault party still has an obligation not to act unreasonably. What is reasonable or unreasonable will change on a claim by claim basis, but in this case it was unreasonable for Mr Leung to fail to consider whether his vehicle was capable of being driven while it was awaiting assessment.
The dispute over whether paint should be extended to other panels or ‘blended’ is a common one. This case is an example of when paint ought to be blended and highlights the importance of experts who have the relevant expertise and experience giving evidence.
Should you wish to discuss any of the above, please contact Elyse Liakopoulos on 03 9947 4590 or any member of the Ligeti Partners team on 03 9947 4500.
