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Boblang v Lau [2008] VUSC 59; Civil Case 46 of 2007 (31 July 2008)

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 46 of 2007

BETWEEN:

JACK BOBLANG AND FREDDY BOBLANG
Claimant

AND:

SAMI LAU
Defendant

Coram: Justice C.N. Tuohy

Counsel: Mr. Boar for Claimant
Mr. Malcolm for Defendant

Date of Hearing: 6th June 2008
Date of Decision: 31stJuly 2008

RESERVED JUDGMENT

Introduction

1. This is a claim for damages arising out of a motor vehicle accident which took place on 1 May 2007 in which the claimants’ 4WD Toyota Hilux single cab truck was damaged. The defendant consented to judgment on liability. The only issue is the amount of damages for consequential losses.
   

Facts

2. The claimants operate a sawmilling business under the name of Freckjoris Tropical Timber. The Hilux was one of the vehicles used in the business. It had been purchased in 2004 for VT 3.09 m and at the date of the accident had 107,491 kilometres on the odometer.
   
3. The truck was used for transporting the saw mills to and from logging sites in the bush and sawn timber from the logging sites to a point where it could be transferred to a lorry (camion). The roads and tracks over which it was required to operate are rough and muddy and the truck had had a hard life. The claimant Freddy Boblang estimated its value at the date of accident as about VT 1.5 m.
   
4. Following the accident, the defendant’s insurer obtained repair quotations from 3 different garages, one of which was from Deou Motors for approximately VT 1.2 m. On 8 June 2006, the claimants were asked to deliver the vehicle for repair. However they refused to do so because they considered they were entitled to have a new Toyota Hilux purchased for them by the insurer at a cost of VT 4.5 m. In addition they demanded VT 4.247.211 for the purchase price of the damaged vehicle plus its running expenses since date of purchase plus VT 1.3 m for damage to the vehicle. Not surprisingly the insurer refused this demand.
   
5. Eventually the claimants’ lawyer at the time wrote a letter dated 8 August 2006 indicating the claimants’ agreement to having the vehicle repaired by Deou Motors. The repairs were undertaken during the period 16 August 2006 to 1 December 2006. The defendants’ insurer has paid the bill for the repairs.
   
6. The claimants allege that as a result of the unavailability of the Hilux, they were unable to continue operating their sawmilling business and in their claim seek the sum of VT 32 m for loss of revenue (not profit) of VT 4 m per month for 8 months (May – December 2006 – in fact the period 1 May to 1 December is 7 months). In his submissions, Mr. Boar suggested an even greater sum exceeding VT 40 m should be awarded.
   
7. Mr. Malcolm for the defendant submitted that a claim for VT 32 m for the non-availability for 7 months of a fairly common vehicle worth perhaps VT 1.5 m is unreasonable. He argued that the claimants had other options which would have limited their loss, specifically to use the other 4WD Toyota Hilux vehicle owned by their business and hire a replacement for it; or at worst purchase a replacement vehicle.
   

Discussion

8. The fundamental purpose of compensatory damages in tort is to put the claimant in the same position as he would have been if he had not sustained the wrong: Livingstone v. Rawyards Coal Co. [1880] UKHL 3; (1880) 5 App Cas 25,39; British Transport Commission v. Gourlay [1956] AC185, 187.
   
9. In the case of damage to a chattel such as a vehicle, the normal measure of damages is the cost of repair which in this case has already been paid. In addition, in the case of a chattel used in the course of a business, a claimant may recover loss of profits during a reasonable repair period: The Argentino (1889) 14 App.Ca 519. If a specific loss of profits is sought, i.e. special damages, the onus is on the claimant to prove it and by precise evidence: The Mediana [1900] UKLawRpAC 3; [1900] AC 113 per Lord Halsbury.
   
10. All that is subject to the law relating to mitigation of damage. This requires a claimant to take all reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong and he cannot recover damages for any part of the loss which he could thus have avoided but has failed through unreasonable action or inaction, to avoid. This is a question of fact. The onus is on the defendant who claims there has been a failure to mitigate to prove it: Garnac Grain Co v. Faure & Fairclough [1968] AC 1130.
    
11. The two central issues in this case both relate to mitigation of damage. The first is the period during which the claimants are entitled to be compensated in respect of the loss of use of the vehicle. The second is whether the claimants are entitled to any damages for loss of profits. If they are, there is a further issue as to what the proper amount should be.
    
12. I am satisfied that the claimants are not entitled to recover anything for the period during which they refused to deliver the vehicle for repair. Their demand that the insurer buy them a new Toyota Hilux was unreasonable and without any legal justification. The choice to refuse to deliver the vehicle was theirs and they cannot expect the defendant or his insurer to pay for it. The appropriate period for recovery is first, 1 May – 8 June 2006, secondly 16 August – 1 December 2006. This is a total of 145 days.
    
13. The second issue comes down to whether the claimants had any choice about winding down their sawmilling operations during the repair period. The obvious step to take to ensure the continuing operation of the sawmilling business was to obtain the use of a substitute vehicle. Because of the nature of the work, this had to be a 4WD vehicle. Freddy Boblang said in evidence that there was no equivalent 4WD vehicle available for hire in Port Vila during the period. This is surprising because this type of vehicle is very common on Efate. However no evidence was produced to contradict what Mr. Boblang stated and the onus is on the defendant to do so.
    
14. What was proven was that the claimants owned a second 4WD Toyota Hilux truck purchased at the same time as the one damaged in the accident. It was part of the business assets of Freckjoris Tropical Timbers. It was apparently used in the real estate part of the business. When asked why that vehicle was not used as a temporary replacement in the sawmilling operations, Freddy Boblang said that he could not use it because the other claimant Jack Boblang was busy, it was his vehicle and Freddy could not use it for that reason. There was however, no suggestion that Jack had to have a 4WD vehicle, or even a vehicle of that particular type for the real estate business. There was evidence admitted by consent that the international rental vehicle companies Avis and Budget both advertise a range of types of vehicle for hire at Port Vila, both cars and trucks including 4WD vehicles. The prices were also in evidence.
    
15. In the circumstances, it was unnecessary for the claimants to cease their sawmilling operations. They could have used their business’s other 4WD Toyota Hilux for the sawmilling operations and hired a more than adequate replacement for Jack from one of the rental companies. There were a range of choices available. A top of the line 4WD vehicle would have cost VT11,500 – VT13,500 per day or VT 345,000 – 405,000 per month. It was unreasonable not to have incurred this expense in order to ensure the continuation of a business which the claimants allege was earning VT 4 m a month. The claimant’s evidence of its financial position and monthly profit and loss accounts satisfies me that it would have been in a financial position to do so.
    
16. I find therefore that the claimants are not entitled to recover any compensation for loss of profits consequential on the winding down of the sawmill operations. In effect it was their failure to use their other Hilux which resulted in operations ceasing.
    
17. However, the matter does not end there. Although the claimants did not in fact incur the cost of providing a replacement vehicle for Jack, they were in my view, entitled to do so. It is a corollary of the rule that a claimant is under a duty to take reasonable steps to mitigate his loss, that he is entitled to recover from the defendant the costs of doing so. In those circumstances, they are entitled to an award of damages equating to the cost of doing so.
    
18. In principle, if a defendant is to have the benefit of a claimants’ failure to mitigate loss by neglecting to incur a reasonable expense, he should at least be charged with that expenditure. It would be unfair for the defendant to have it both ways. If the claimants in this case had actually hired a replacement vehicle for Jack, it is likely to have been regarded simply as part of the normal measure of damages rather than an attempt to mitigate loss (cf Compania Financiera Soleada v. Hamoor Tanker Corp, the Borag [1981] 1W.L.R. 274). It is well established in regard to repair costs, for example, that the claimant is not required to actually incur the repair costs to recover them as part of the normal measure of damages: The London Corporation [1935] P. 70. I see no valid distinction in the case of the cost of a replacement vehicle.
    
19. The cost of hiring a Category D 4x4 5 seater vehicle from Budget for a 2 – 6 days period is shown in the advertisement admitted into evidence as VT11,500 per day. Probably the daily rate would be less for a longer hire. But the defendant has provided no proof of that. I allow the claimants an amount for replacement vehicle hire of VT 11,500 for 145 days totaling VT1,667,500.
    
20. In addition, some allowance needs to be made for notional extra depreciation which the real estate Hilux would have suffered if used for 145 days in the sawmilling operations, compared to what it would have suffered under its usual conditions of use. There is no specific evidence on this but the Court can make an estimate based upon the assumed depreciation in the other vehicle and the distance it had clocked up since purchase. I assess this head of damages at VT 70,000.
    

Conclusion

21. There will be judgment for the claimants in the sum of VT 1,737,500. There will be no award of costs. Although the claimants have achieved a judgment, it is for vastly less than they sought. They were unsuccessful on the main arguments.
    
22. Two final observations may be made. With the usual benefit of hindsight, it is obvious that the defendant’s insurer would have been better off offering the claimants the price of a replacement vehicle at the start, not a new one, but one of the same age, condition and mileage as the damaged vehicle was pre-accident. But of course, the lengthy repair period may not have been foreseen.
    
23. Secondly, this is another example of a wildly unrealistic damages claim. A Toyota Hilux is a very common vehicle. The idea that damage to a well-worn example worth perhaps VT 1.5 m could result in VT 32 m of consequential losses does challenge common sense. Claimants and their advisers need to be aware that the purpose of claims for damages is to put claimants back in the same position they were originally, not to enrich them at the expense of a defendant.
    

Dated at Port Vila, this 31st day of July 2008

BY THE COURT

C.N. TUOHY
Judge