Court of Appeal Decision of the Week

Quantifying Loss-of-Use: When the Garage Drives Your Favourite Ferrari into a Parked Truck

Case: Miller v. Brian Ross Motorsports Corp., 2017 BCCA 166 (CanLII)

Keywords: Ferrari F430; General Damages; Non-Pecuniary Damages

Synopsis:

A technician employed by the Respondent automobile dealership road-tests the Appellant’s Ferrari F430 (the “quality control” component of its annual service). During the course of this test, the technician collides with a parked truck, causing considerable negligent damage to the Ferrari (and the truck as well, no doubt). The Appellant’s Ferrari F430 is then wrongfully detained for nine months as repairs are sorted. The parties “wisely settled” repair costs ($35,664) and accelerated depreciation ($36,350.25); they could not agree on the value of the appellant’s loss-of-use. (See para. 1). (No word on whether crash-driving technician still works there).

At trial, Madam Justice Dardi awarded the Appellant $15,000 in general, non-pecuniary damages for loss-of-use. On appeal, the Appellant raises the following issues:

  1. the Trial Judge proceeded on an incorrect principle of law by failing to consider, as the guiding principle of assessment, the rental rate for a comparable vehicle; and
  2. the Trial Judge considered an irrelevant factor in assessing damages for loss of use: that the appellant had an alternative vehicle available for transportation purposes.

The Court of Appeal determines the Trial Judge arrived at an amount that was reasonable in the circumstances, finding rental rates are not the only available tool for measuring the value of a loss-of-use claim.

The Court of Appeal quotes a prior B.C. case in which a B.C.S.C. judge refers to a particular luxury car as “the stuff of a young man’s fantasy, and an older man’s crisis” (See para. 26) – a potentially (inadvertently?) sexist comment given our Supreme Advocacy colleague Marie-France Major drove (at high speed and on a racetrack) a special “Formula 1” Ferrari F430 at a firm team-building event earlier this year in Nevada.

Importance:

The assessment in this case was complicated by the fact the appellant had not rented a replacement vehicle for the period his Ferrari was wrongfully detained. The question, then, for both the Court of Appeal and in the trial below was how do you value the loss-of-use?

The Trial Judge noted general or non-pecuniary damages are meant to compensate for intangible losses – not exactly an exact science. In conducting her assessment, Dardi J. held courts must therefore engage in a balanced consideration of the evidence and tailor an award that is both reasonable and fair. (See at para. 6).

The Appellant’s argument relied primarily on the reasoning of Lord Scott in Lagden v. O’Connor, [2003] UKHL 64, which states the cost of renting a comparable vehicle should be used as the measure of loss and damages should be measured without consideration for “the degree of use to which he would, if his car had not been damaged, have been likely to put it”. (See at para. 10; Lagden at para. 76). Referring to both The “Mediana”, [1900] A.C. 113 and The “Greta Holme”, [1897] A.C. 596, the Appellant challenged the Trial Judge’s method – especially aspects of her judgment which discounted his claim to reflect the fact the vehicle would have been used infrequently and that substitute vehicles were available.

The Court of Appeal held the Trial Judge’s decision to discount the claim and determination that “While the authorities are instructive they provide general guidance only” was consistent with the authorities. (See para. 29).

For the Court of Appeal, taking no account of the extent to which the Appellant’s Ferrari would actually have been enjoyed is to “…exaggerate the anomalous effect Waddams discusses and would depart from the compensatory objective.” (See para. 34). In the Court’s view, there was no reason for the Trial Judge to depart from the compensatory rule as the claim was in negligence, the Respondent did not use the vehicle, and the Respondent derived no benefit from its wrongful possession. (See para. 35).

Although the Court of Appeal found that the availability of other vehicles which served the Appellant’s needs “ought not to have been taken into account” (even in measuring the damages caused by loss-of-use of a vehicle “purely for pleasure”), the Court declined to find this factor played any significant role in the Trial Judge’s assessment. (See para. 40).

Counsel for the Appellants: Arpal Dosanjh and Allan Doolittle (Gumundseth Mickelson LLP, Vancouver)

Counsel for the Respondent: Christopher Bakker (SHK Law Corporation, Vancouver)

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Posted: Wednesday, May 03, 2017