It was apparently the intention
of the parties when the vehicle was found to be unroadworthy that it would
under-go further
work at the hands of the Respondent to put it into a
roadworthy condition. However in subsequent discussions between the
representatives of the Appellant and the Respondent, disputes arose between
them and no further work was carried out on
the vehicle.
Prior to trial, the Appellant
rranged for the vehicle to be inspected by an expert from Nrom New Zealand, Mr.
John Greacen.
The trial judge accepted his evidence. Mr. Greacen found on
inspection that the front right hand of the chassis of the vehicle
was
shorter than the left hand side by 5 centimetres. He considered that the
chassis alignment and resulting mis-alignment
of the wheels was part of the
structural damage that had been caused in the accident. The trial judge
accepted Mr. Greacen’s
evidence that the chassis of the vehicle had not been
properly repaired to the Toyota factory standard. That, in turn, affected
the wheel alignment, causing the front wheel to throw outwards, making the
vehicle difficult to steer, and causing the
steering not to return to centre
on a particular turn.
There was another finding also
made by the expert, namely heating had occurred to parts of the chassis
in the the course
of the repairs. That heating (welding) was not in accordance
with Toyota factory specifications, and, in itself, affected the
road
worthiness of the vehicle. The expert advised that for the vehicle to be put
into a roadworthy condition a new or
replacement chassis, was required, or,
failing that, the vehicle should be written off. In Mr. Greacen’s opinion
allowing
for the additional expense of inserting a new chassis made repair
of the vehicle uneconomic.
<
The claim as formulated at
trial by the Appellant was for three i
First, a refund of payment of
the repair costs of 639,270 vatu; secondly, loss of hire charges of
4,656,000 vatu; and
thirdly, the comparable replacement value of another
motor vehicle of 910,000 vatu. The comparable replacement value, that
is the
market value of the vehicle at the time that it was given into the
possession of the Respondent for repairs, does
not seem to have been
disputed. It seems to have been accepted that the market value of the
vehicle at that time was
about 900,000 vatu.
The trial judge dismissed the
claim for the following reasons. His Lordship looked e quotation which
spe specifically
itemised parts that were to be replaced namely, 1 front
windscreen, 1 windshield rubber, 1 front right door, 1 front bumper,
1 front
head lamp right hand assembly, 1 front right hand signal lamp, 1 wheel rim,
1 knucle arm, 1 complete shock absorber,
1 inner skirt panel, 1 front right
hand fender, and 1 tyre, all for total of 409,270 vatu. In addition there
were amounts
allowed for workshop materials, painting labour, a panel
layout, mechanical labour and engine repairs which brought the total
quote
up to the figure previously mentioned. Those last mentioned items of work
were not further specified and may have
included work to the chassis. Indeed
as there was welding to the chassis it is reasonable to assume that those
items
were intended to include what was necessary to repair chassis damage.
His Lordship held that the work specified by item in
the quotation had been
carry out. However, the quotation plainly overlooked that if the work was to
be done to Toyota
specification, and to be done to a standard which put the
vehicle back into a roadworthy condition, heating of the chassis
was not
appropriate and that a replacement chassis was required.
class="MsoNoMsoNormal" style="margin-top: 1; margin-bottom: 1">
His Lordship held that as all
the specified work in the quotation had been carried out, it was up to the
Appellant either
to provide in kind another chassis or to pay the equivalent
costs of replacing that item. As the Appellant had not offered
either of
those courses the Appellant’s Claim should be dismissed.
In our opinion the learned
judge fell into error in his approach to the merits of the claim. The
approach adoptedopted overlooks
the fundamental importance of the admission that
the vehicle was put into the possession of the Respondent for the purpose
of
putting it back into a roadworthy condition. It is true that the specific
part items mentioned in the quotation were
supplied, and that some work was
done. But the underlying problem is that the quotation itself was defective
because
the Respondent negligently failed to discover and to disclose to the
Appellant in the quote the need to replace the chassis.
Had that need been
identified, the clear inference from the evidence is that it would have been
uneconomic to repair
the vehicle. In other words the market value of the
vehicle before the accident less the salvage value after the accident
was less than the costs of carrying out necessary repairs. The only
reasonable inference
on the evidence is that the Appellant, as a commercial
car hirer, would not have spent more than the value of the car on repairs
had it been so advised.
In reality the quotation given
misled the Appellant in to thinking that the vehicle could be economically
repaired, and
in consequence the Appellant laid out 639,279 vatu for repairs
that in the end proved to be pointless. By spending money on
trying to
repair something that should not have been repaired, the Appellant suffered
loss.
<
As a stg point, it is
arguable that in this circumstance the Appellant is entitled to recoveecover from
the Respondent
the money pointlessly spent on repairs. However, we think
that credit should be given against this sum because new parts have
been
added to the damaged car by the Respondent. The value of the wreck would now
be higher than it was before any repairs
were carried out. There is no
precise evidence on that topic and it can only be done broadly. In our view
an appropriate
approach would be to allow the Respondent credit for half the
costs of the replacement items shown on the quotation namely
204,635 vatu.
The Court indicated to the parties that it was contemplating this course,
and we did not understand there
to be serious disagreement to the Court
adopting this broad approach.
The conclusion that the vehicle
was was in truth a wreck that should have been written-off carries the further
consequence
that in our opinion the Appellant cannot maintain a claim for
loss of profits. The vehicle ceased to be capable of earning
any profit at
the time when it suffered the accident damage. The position of the Appellant
was not made worse by the
fact that it received negligent advice or because
the repairs were carried out negligently by the Respondent.
lass="MsoNoMsoNormal" style="margin-top: 1; margin-bottom: 1">
As a matter of theoretical
possibility it might be that the Appellant could mount a claim for a
business loss because
it was not told earlier that the vehicle was not
repairable. That however is a claim of a different kind to one based on loss
of use of this particular vehicle. It would be a loss which would arise
because the Appellant was delayed in outlaying
an amount for a new vehicle,
in putting the new vehicle into its stock, and then earning something over
and above the
“cost” of the money used to buy the new vehicle. On looking at
whether a loss would have occurred in those circumstances it
would be
necessary to analyse closely the business structure and financial position
of the Appellant, to have regard
to the number of vehicles it had, to the
rate of use of those vehicles, and to the position the Appellant was in fact
in without a new vehicle. None of that information is before the Court in a
form which enables any estimate to be made. For
the court to attempt such an
estimate would be to engage in speculation, which the Court should not do.
It is however
sufficient to say that the case was not put on that basis at
trial. In our opinion there should be no allowance for lost profits.
In our opinion the Appeal
should be allowed, the judgment of dismissal of tpellant’s claim should
be set aside, and
there should be judgment for the Appellant against the
Respondent for the money unnecessarily wasted on repairs less credit
for
parts of 204,635 vatu, being a net judgment for 434,644 vatu.
There is no reason why the
Appellanellant should not have possession of its motor vehicle. It seems that
there has been
some disagreement or mis-understanding between the parties on
that topic. For clarity there will be an order that the Respondent
deliver
up the wreck in its present state of repair and condition to the Appellant
within 7 days.
