If you’ve been involved in a car accident, whether you or someone else was at fault, you may be wondering if you can recover the costs of renting a replacement car while yours is being repaired. The High Court addressed this issue in the recent case of Arsalan v Rixon and Nguyen v Cassim [2021] HCA 40, which is a critical decision for anyone making a claim for motor vehicle property damage that includes a claim for a replacement hire car.

Background

In this case, Rixon and Cassim were involved in separate car accidents, and both owned “prestige vehicles” – an Audi A3 and a BMW535i, respectively. The defendants, through their insurers, accepted liability for the crashes. Both Rixon and Cassim hired replacement cars through a third-party credit hire company – an Audi A3 for $12,829.91 over eight weeks, and a Nissan Infinity Q50 for $17,158.02 for five months.

The Issue

The primary issue for the High Court was whether a plaintiff, whose vehicle was negligently damaged, is entitled to recover the reasonable costs of hiring a replacement vehicle that meets their basic needs, or a vehicle of equivalent value to their damaged vehicle, known as a “like-for-like” vehicle.

The Decision

The High Court, in a unanimous joint decision, held that a plaintiff who has been deprived of their vehicle due to the plaintiff’s negligence is entitled to damages for the reasonable costs of hiring a replacement vehicle that is broadly equivalent to their own damaged vehicle.

The Consequences

This decision removes the need for a plaintiff to demonstrate a “need” for a replacement vehicle and recognizes that the correct heads of damages in cases of motor vehicle property damage are “physical inconvenience” and “loss of amenity” or enjoyment of use, not just “loss of use” as a measure for deprivation of their vehicle. The court also recognizes that the plaintiff who incurs significant expenditure on a prestige vehicle derives “amenity” from its functions and that it may not be difficult for a plaintiff to demonstrate the damage of inconvenience of use and loss of amenity by providing “a past suite of purposes for which the damaged car was used.”

The Takeaway

It’s important to note that a defendant can still dispute the plaintiff’s claim for various reasons, including the costs included in the hire charge, the duration of the hire, and whether the replacement vehicle is comparable or equivalent to the plaintiff’s vehicle. However, once a plaintiff mitigates their loss by hiring a replacement vehicle equivalent to the damaged vehicle, the onus is on the defendant to prove that the costs incurred in mitigation were unreasonable.

In summary, if you’re involved in a car accident, and you’re forced to rent a replacement vehicle while yours is being repaired, you may be able to recover the costs of the rental from the at-fault driver. The High Court has held that a plaintiff is entitled to damages for the reasonable costs of hiring a replacement vehicle that is broadly equivalent to their own damaged vehicle. This includes the heads of damages for “physical inconvenience” and “loss of amenity” or enjoyment of use, and not just “loss of use.”

What should you do if you are involved in a car accident, and you have paid for a hire replacement car?

Call McDonald Law now on (02) 8824 4736 or 0411 460 034 to speak with one of Sydney’s most experienced lawyers to commence recovery of your car hire replacement costs.

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