Vasant Pattni v First Leicester Buses Limited & Darren Bent v Highways And Utilties Construction Limited & Allianz Insurance
Vasant Pattni v First Leicester Buses Limited & Darren Bent v Highways And Utilties Construction Limited & Allianz Insurance
Pattni :The First AppealThe Claimant, Mr Pattni's Porsche 911 required repair following an accident caused by the Defendant's vehicle. During the period of repair the Claimant required a replacement vehicle and he hired a replacement vehicle on credit hire terms for 40 days through Swift Rent-A-Car Limited at a cost of over £25,000. Under the hire agreement with Swift contractual interest was payable on the hire charges outstanding from the end of hire to the date the charges are immediately due and payable.
At first instance as the Claimant was not impecunious HHJ O'Rourke held that the Claimant was entitled to recover hire charges by reference to the “spot rate” and also reduced the period for which the Claimant was entitled to recover hire charges to 29 Days. He also rejected the Claimant's claim for interest. On appeal to Swift J, the Claimant's claim for interest was rejected.
On appeal to the Court of Appeal it was argued by the Claimant that he was entitled to recover interest on a sum equal to interest on the principal found to be recoverable by HHJ O'Rourke.
The Court of Appeal's View
Contractual Interest
If it is proved that any element of the credit hire charges represents the cost of providing credit facilities to the hirer this is not recoverable as part of the Claimant's damages for loss of use but is an additional benefit. The interest charge which the Claimant is under a liability to Swift by the terms of the agreement constitutes the cost on an additional benefit given to the credit hirer and is therefore irrecoverable to the pecunious Claimant.
Interest as Damages
The relevant question is whether the Claimant can prove he suffered a loss for which he had to pay out money which could have been used for other purposes. It is immaterial that the Claimant might have suffered loss of use of his money by hiring at the BHR without the benefit of credit facilities. There must be actual loss.
Statutory Interest
As this is discretionary in the absence of payment by the Claimant there is no loss and therefore interest was not payable to the Claimant.
Bent : The Second Appeal
The Claimant, Darren Bent hired an Aston Martin DB9 in 2007 from Accident Exchange as a replacement for his Mercedes Benz CLS 63 AMG which was damaged in an accident for which the First Defendant was liable. The hire period lasted 94 days and the daily rate of hire was £573.28 plus VAT. The Claimant could have afforded to hire a replacement vehicle in advance and so did not need to use credit hire facilities.
At first Instance HHJ Yelton found that the Aston Martin DB9 was a reasonable replacement for the Claimant's own vehicle, that the period of hire was reasonable but in the absence of evidence of the “spot hire” rate for an Aston Martin of the type the Claimant hired or of the Claimant's own Mercedes the judge could not speculate as to the appropriate spot rate and the Claimant recovered the entire credit hire sum.
On the original appeal from this decision the Court of Appeal held that HHJ Yelton's approach had been wrong in concluding he could not use the evidence he had of a spot rate for an Aston Martin DB9 in 2008 to assess the spot rate for an Aston Martin DB9 in early 2007.
The case was remitted for trial limited to the determination of the spot rate of hire of a reasonably equivalent replacement vehicle at the time of hire. This was heard before HHJ Plumstead who concluded (i) in setting the spot rate it was correct to err on the highest side of that which [is] reasonable (ii) that would be done by picking the top end of the centre bracket of rates as her starting point (iii) the replacement car should have been hired on a 28 day period basis and should be discounted to reflect lower rate for a longer period of hire (v) that this discount should be 12%.
The Court of Appeal's view
The Court of Appeal found that HHJ Plumstead also erred in her approach to the evidence.
Notably, in assessing the BHR, whether the judge has evidence of BHRs for the type of car actually hired on credit, or has evidence for BHRs for types of car which are within a bracket that is comparable, the aim of the exercise is to make a calculation of what the BHR was for the car actually hired and to compare it with the credit rate paid. The proper approach in that case was to find the BHR for the actual car hired on credit. HHJ Plumstead erred in concentrating on rates for a Mercedes SL 55 AMG when ones for an Aston Martin DB9 were available. She further erred in concentrating on 2009 rates when 2007 rates were available.
Further, the judge's conclusion that the appropriate BHR should be the highest which was reasonable was inconsistent with the approach in Burdis v Livsey. What is reasonable will depend on the circumstances. So long as the Claimant was reasonable in hiring that car and the credit hire rate is reasonable, the BHR will be the rate charged by an equivalent non-credit hire company the Claimant might have gone to. This may well be at the top end of the range.
Comment
Pattni puts to bed the issue of contractual interest where the Claimant is not impecunious, though for the impecunious Claimant forced to hire on credit hire terms it remains possible to recover using this route. Other avenues of interest recovery are effectively closed where the Claimant has not paid hire charges.
The Court of Appeal's latest guidance in Bent emphasises that once the Claimant satisfies the court that the car hired is reasonable, that model of vehicle should be the focus of evidence for BHR rates. This may well lead to somewhat odd results. For example, where a Claimant's own vehicle was a Ford Fiesta but he is held to have reasonably hired a Golf the court should prefer the evidence of hire rates for a Golf over rates for a Fiesta when assessing the appropriate BHR for a replacement vehicle. Further, although the initial outing of Bent to the Court of Appeal heralded a more liberal approach, in practice, when assessing the BHR parties should expect judges to prefer submissions based on specific rates rather than broad brush reasonable averages.
LOIS ALDRED