IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
HELD AT PORT VILA
(Appellate Jurisdiction)
      
Appeal Case No. 18 of 2001
      
BETWEEN:
      
AIR TRADE (VANUATU) LIMITED
Appellant
      
AND:
      
DEOU MOTORS LIMITED
Respondent
      
Coram: Hon. Justice John von Doussa
Hon. Justice Daniel Fatiaki
Hon. Justice Oliver Saksak
      
Hearing Date: 22nd October 2001
      
Counsel: Mr. John Malcom for the Appellant
Mr. Silas Hakwa for the Respondent
      
JUDGMENT
      
This is an appeal against a decision of a single Judge of the Supreme Court which dismissed the Appellant’s claim against the Respondent for damages.
      
The Appellant owned a hire car that was damaged when it was driven into a concrete post on 27th      of March 1997. The damaged car was delivered shortly afterwards to the Respondent, a motor vehicle repairer, to estimate the costs of repairing the vehicle, and thereafter to repair it.
      
The Appellant alleges that the repairs were carried out negligently and unskilfully with the result that the Appellant suffered loss and damage. The motor car had been bought new by the Appellant in July 1992 for 1.350.000 Vatu. The car was therefore approaching 5 years old when the accident happened. In the accident it suffered major damage to the right front quarter.
      
It is admitted by the Respondent that the Appellant gave instructions to the defendant      “to carry out all necessary repairs including panel beating to restore the vehicle to a roadworthy condition”.
      
The Respondent gave a quotation for 639,270 Vatu. The Appellant, having considered the quotation, authorised repairs. But when the vehicle was returned after work had been carried out by the Respondent it was found to be unroadworthy.
      
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 arranged for the vehicle to be inspected by an expert from 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 that heating had occurred to parts of the chassis in 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 items:
      
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 at the quotation which 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.
      
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 adopted 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 starting point, it is arguable that in this circumstance the Appellant is entitled to recover 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 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.
      
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 the Appellant’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 Appellant 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.
      
      It remains to consider the question of costs. As a result of this judgment the Appellant has to an extent been successful, and in relation to the costs of the trial it is entitled to recover something to reflect that fact. On the other hand the Appellant has not succeeded on its claim for loss of profits, nor has it succeeded on the claim for the value of a comparable motor vehicle. Because a good deal of the trial was spent on issues on which the Applicant has failed and because the costs of a week long trial at full rates would be out of proportion to the judgment which the Appellant has actually recovered, the Appellant should recover substantially less than full taxed costs.
      
We have been invited by the parties to fix a gross sum to avoid taxation. We do so. We fix the costs of the trial which the Appellant will recover from the Respondent at 200,000 vatu. We have also been asked by the parties to fix a gross sum for the costs of the Appeal. Having regard to the amount involved to the outcome of the appeal, and the length of time involved in the hearing, we order that the Respondent pay to the Appellant a further 200,000 vatu as the costs of the Appeal.
      
For these reasons the Orders of the Court are :-
      
1.                                                                                                            Appeal allowed.
      
2.                                                                                                            The Order for dismissal of the claim is set aside.
      
3.                                                                                                            Judgement is entered on the claim for the Appellant against the Respondent for 434,644 vatu.
      
4.                                                                                                            The Respondent deliver up to the Appellant the wrecked motor vehicle in its present state of repair and condition within 7 days.
      
5.                                                                                                            Respondent to pay the Appellant the costs of the trial fixed at 200,000 vatu plus the costs of the Appeal fixed at 200,000 vatu.
      
DATED at Port Vila this 22nd      day of October 2001.
      
Justice John von Doussa
Justice Daniel Fatiaki
Justice Oliver Saksak