July 7, 2020
Lee v Strelnicks; Souaid v Nahas; Cassim v Nguyen; Rixon v Arsalan  NSWCA 115
These four cases involved claims for recovery of credit hire costs for replacement vehicles while their respective vehicles were being repaired. Each case went from the Local Court, to the Supreme Court and then finally the Court of Appeal, where they were heard together.
In the Supreme Court, Basten J found that a Toyota Corolla would have satisfied the claimant’s needs (compared to his damaged BMW 535) - the value or prestige of the damaged vehicle was not an essential characteristic of what is reasonably necessary in a replacement vehicle, rather the test of reasonable necessity must be applied by reference to the need in question; the usage rather than the choice of vehicle ultimately determines the reasonableness of the expense.
The Court of Appeal, by majority (White JA and Emmett AJA, with Meagher JA dissenting), held that claimants were entitled to damages for hire costs of an equivalent vehicle in terms of model, make, year and specification. The majority’s reasoning stemmed from the strict application of restitutio in integrum, - to put the claimant in the position that they would have been but for the loss inflicted by the wrongdoing . The claimant was entitled to be compensated for the cost of a “commensurate” or a “reasonably equivalent” or a “broadly comparable” replacement vehicle [69, 127].
White JA said at :
I do not accept that it is only “inconvenience” that can be addressed through an award of damages for loss of use of the car. The injured plaintiff who has suffered actual loss through being denied use of his or her car is to be put in the same position, so far as money can do it, as if the tort had not been committed. In the case of Cassim v Nguyen, had the tort not been committed, the plaintiff would have had the use of a car that not only did the job required of it, but did so with higher levels of safety and luxury than the Toyota vehicle that the primary judge held was adequate to meet the plaintiff’s needs. There must also be an intangible benefit (to some) in owning, leasing or using a “prestige” vehicle… The intangible nature of such feelings does not mean that they are unreal or uncompensable.
In dissent, Meagher JA adopted similar views to Basten J. He considered the duty to mitigate meant the claimant could recover no more than was reasonably necessary to make good their compensable loss (uses during the period of repair), so satisfied by the hire of a vehicle which is sufficiently comparable in terms of functionality and specifications for those uses only.
This decision sees the potential for increase in the cost of claims for more “prestigious” replacement vehicles, however, claimants must still establish the “need” and that the cost was reasonable in all of the circumstances.
As this decision sees divergence between White JA and Emmett AJA as against Basten J and Meagher JA, there are material prospects of an application for Special Leave to Appeal to the High Court. This should be monitored.