Faletoese v Onesemo [2005] WSDC 2 (31 March 2005)

IN THE DISTRICT COURT OF SAMOA
HELD AT APIA

BETWEEN:

MARA FALETOESE
of Vaisigano Business woman.
Plaintiff

AND:

NIFO ONESEMO
c/- SPREP Vaoala, Secretary.
Defendant

Counsels: M.Leung Wai for plaintiff
S. Toailoa for defendant

Decision: 31 March 2005

DECISION OF NELSON, DCJ

This is a claim for damages arising out of a motor vehicle accident. Counsels have advised that liability is not in issue only the quantum of damages claimed by the plaintiff. The statement of claim particularises these as follows:

Damage to plaintiffs vehicle (labour and materials) $6,971.06

Loss of use of plaintiffs vehicle for 11 days (repair time) 2,103.75

$9,074.81

Plaintiffs cause of action:

The evidence establishes the plaintiff's insurer has paid the cost of repairs to the plaintiffs vehicle pursuant to a policy of insurance. This part of the claim is accordingly brought by the plaintiffs insurer pursuant to the doctrine of subrogation. As stated by Chief Justice Sapolu in NPI and Potoi v Cardinal Taofinuu and another [1994] Supreme Court decisions 253 at 256 (a case followed and applied by this court in Chappelow v Atonio unreported decision dated 11^th February 2005, see page 4 thereof):

“While the insurer under the doctrine of subrogation may enforce the rights of the assured after it has admitted liability under the insurance policy and has paid the amount of the loss payable under the insurance policy to the assured, those rights and remedies must be enforced in the name of the assured and not that of the insurer, unless there is some statutory authority for the insurer to enforce those rights in its own name or there has been a valid assignment of those rights from the assured to the insurer, then the insurer can enforce those rights in its own name.”

As in that case, there is no evidence here that the assured has validly or otherwise assigned her right of action against the defendant to her insurance company; neither is there any statutory authority in this jurisdiction mandating the insurer to enforce such rights in its own name. The action is accordingly properly brought and the defendant's argument that it has not because the claim should have been brought in the insurers name must fail. It follows that neither is it now open to the plaintiff to abandon or otherwise have any further say in the claim. She has been fully compensated and her insurer by operation of law stands in her shoes. If any part of the claim is to be negotiated or compromised for settlement that is now at the sole option and discretion of her indemnifier insurance company.

The defendant also argues that the pleadings are improper because they allege the plaintiff has suffered loss, which is not true since she has been fully indemnified by her insurer. This submission must likewise fail for it is fundamental to subrogation of the assureds rights against a third party that the third party is unable to escape liability by arguing that the assured having been indemnified by the insurer has no longer suffered a loss: Mason v Sainsbury (1782) 3 Doug KB 61 and Bradbury v Great Western Railway Co. (1874) LR 10 Ex.1; see also the authorities cited in Halsburys Laws of England 4^th edition vol. 25 para 528. As noted by Sutton in ‘Insurance Law in Australia and New Zealand’ at page 552:

“The purpose of subrogation is to prevent one person being unjustly enriched at the expense of another, and the doctrine finds its most common application in the field of insurance law. If an assured suffers a loss for which he can recover against a third party the latter cannot avoid liability on the ground that the assured has been or will be fully compensated by his insurer. Nor can the insurer avoid liability on the basis that the assured has a claim against the third party.”

These principles as accepted by Chief Justice Sapolu in NPI v Taofinuu represent the law on subrogation in Samoa and the legal position can now be taken as settled. Certainly no other authorities have been cited to justify taking a different approach and indeed as plaintiffs counsel rightly points out, a contrary approach would mean an insurer who has suffered a real financial loss as a consequence of an accident would without a proper legal assignment from the assured be unable to bring proceedings against a negligent defendant as it would have no locus standi in the matter. It would also mean a negligent defendant would be allowed to take advantage of the plaintiff's foresight and monies expended in arranging insurance in the first place. Furthermore it would permit a negligent defendant to walk away from liability at the whim or option of the fully indemnified plaintiff. Quite apart from the issue of whether this was the intention of the parties (in particular the insurer) to a contract of indemnity insurance, that would be a most inequitable and unjust state of affairs and does not appear to be the law in this or any other comparable common law jurisdiction.

Quantum of damages:

As to the quantum of repair costs claimed the defendant says these are grossly inflated as the damage to the plaintiff's vehicle was minor. She says the damage to her vehicle was greater and her repair costs were only $1,200 in total. Unlike the plaintiff however she did not produce any photographic evidence of same and neither did she call her mechanic to testify as to the nature and extent of her damage or the repair work required. Neither did she produce any other expert evidence to challenge the evidence of the plaintiff's engineer. In assessing all the evidence I am well satisfied notwithstanding defence counsels probing cross-examination, as to the necessity and quantum of the plaintiffs repair costs. Furthermore, there is no evidence supporting the suggestion that some unspecified part of this damage was caused post accident by some unknown party and I find the first part of the claim proven to the requisite legal standard.

The second part of the claim relates to compensation for costs incurred by the plaintiff in hiring a rental car for eleven days while her vehicle was under repair. She rented a double cab Toyota Hilux pickup being the type of vehicle suitable for her catering operation. Her own vehicle is a Toyota Hilux pickup which she uses in her business. The vehicle is still registered to its previous owners Orum Catering but I am satisfied she purchased the vehicle when she purchased that catering business. She claims the total account for the eleven day hire period which she has paid. Her evidence confirmed by her insurers representative is that her contract of insurance does not cover this cost. This part of her claim is therefore pursued by her on her own behalf.

The defendants evidence is that originally she agreed to pay the repair costs to the plaintiffs vehicle as she admitted being at fault in the accident. While awaiting the repair bill however the plaintiff spoke to her and her husband and requested they pay her rental costs as her insurer had agreed to meet her repair costs. For obvious reasons she did not advise the defendant and her husband that this did not absolve the defendant of liability for her repair costs if her insurer decided to pursue those costs. It is likely the defendant did not realize this; she certainly made no inquiries along these lines of the plaintiff. The evidence is a little nebulous but it appears the defendant initially agreed to the proposal to pay the rental charges, but upon receiving the 11-day rental account reneged on her agreement since her mechanic had told her the plaintiffs car should have taken no more than three days to repair. She also testified her own car only took three days to repair. The defendant did not call her mechanic but the evidence of the plaintiffs engineer is that the plaintiffs pickup took eight working days to repair involving two boys full time. He says the damage was not small and one to two days was used for prepping and painting. He did not explain whether it was one or two days or why it would have taken this length of time to repaint only the affected areas of the vehicle and I find this evidence does not fully satisfy me that two full working days were required for repainting.

There is a further aspect upon which I am not satisfied: this arises out of the testimony of the plaintiff's engineer that the vehicle took about two weeks to repair because he had to look for spare parts and because there were other vehicles in his workshop. Whilst he says he did not charge for time used scourcing parts this evidence suggests the vehicle sat idle in his workshop for unspecified periods. Elsewhere in his evidence he talks about if the shop had begun work on the vehicle “straight away”, the total job time would have been eight working days, evidence that suggests again some delay in attending to repairs to the vehicle. I also note that the evidence shows the plaintiff drove and presumably was able to fully use her vehicle for some ten days post accident, the accident having occurred on the morning of 31^st July 2003 and the rental of the replacement vehicle having commenced on 10^th August 2003, as per the rental company invoice produced as plaintiffs exhibit “P-3”. I further note that the rental costs claimed commenced on Sunday 10^th August 2003 and there is no explanation why the plaintiff could not have waited an extra day, that is until Monday 11^th August to take her vehicle in for repairs. The rental period also included at least one weekend. This evidence raises questions in my mind as to whether the plaintiff has fully complied with her legal duty to mitigate her loss vis-à-vis the duration of the repair period.

The defendant in the course of her oral evidence indicated that she was prepared to pay up to half of the rental costs claimed. I am satisfied that considering all the circumstances that is a reasonable compromise and I will accordingly accept only 50% for this part of the plaintiffs claim.

Judgment will therefore be given for the plaintiff in the following sums:

For vehicle repair costs $6,971.06

For rental charges 1,051.87

$8,022.93

Plus costs as fixed by the Registrar in accordance with the applicable court scale.

DISTRICT COURT JUDGE