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Sayce v TNT (UK) Limited, Oxford County Court, 25 January 2011

25 February 2011
The issues

Credit hire – offer of courtesy car – Lagdon v O’Connor – Copley v Lawn.

The facts

The Claimant had an accident on the 30th May 2007 when one of the Defendant’s employees drove into the back of her Vauxhall Corsa in Northampton. The driver admitted liability and handed her a card with TNT’s details on it and a passage which read:-

“If you require a hire car whilst your vehicle is undergoing repairs call us and we will provide you with a hire vehicle the same or equal to yours free of charge.”

The Claimant rang TNT on the day of the accident. At Trial she said she was not told to contact her own insurers, although the TNT card clearly stated:-

“It is imperative that you show this card to your insurers.”

The Claimant did speak to her insurers and told the Court that she was “unsure as to the motives behind TNT’s offer to assist”. She did not take up the offer but on the 2nd June instead entered into a credit hire agreement with Albany Assistance. Hire charges of £3,446.28 were incurred for two months car hire.

On the 6th June she received a letter from TNT offering a car of an equivalent kind to hers at a fully inclusive rate of £14 per day. The letter warned that if she did not take advantage of the offer it might affect her entitlement to recover hire charges and advised her to show the letter to her insurer or any third party hire company. That offer was not taken up. On the 13th June, TNT wrote to Albany saying it was prepared to pay £14 per day toward the hire claim. A cheque was sent by TNT in respect of the repairs on the 18th July and the car hire was terminated on the 2nd August.

The matter came before the District Judge for Trial, who found that the Claimant had failed to mitigate her loss.

The Claimant Appealed.

The decision

A layman’s common sense might well be that if a tortfeasor offered to provide a victim with a satisfactory car at no cost to the victim, why then should the victim be entitled to sue the tortfeasor for the cost of a car which he chose to obtain elsewhere. It was important that the law coincided as far as possible with common sense. As Lord Hutton in Tomlinson v Congleton BC had commented: “The common law is just the formal statement of the results and conclusions of the common sense of mankind”. If the Claimant had accepted the Defendant’s offer she would have sustained no loss in respect of the expense of hiring a substitute car whilst her own was mended.

The Claimant relied on Copley v Lawn, a decision of the Court of Appeal which indicated that it was not correct that a Claimant that rejected a Defendant’s reasonable offer was entitled to nothing, although there might be consequences in costs. Questions arose. First, was the Claimant unreasonable not to accept the Defendant’s offer? Second, was the District Judge’s decision wrong in law and appealable? Third, if the Claimant’s rejection was unreasonable, what was the legal position and was the Court bound by Copley v Lawn?

As to the first two questions, it was clear that the question of mitigation was one of fact. Although the Court of Appeal in Copley had said that there was no reason why the Court should not interfere if the Judge’s conclusions on mitigation were wrong, Sir Mark Potter in Beechwood v Birmingham had noted that this observation had “to be read in context” and he cited Burdis v Livesey and a remark of Lord Justice Aldous:-

“What is reasonable and whether a loss is avoidable are questions of fact, not law, which District and County Court Judges regularly decide.”

In this case the District Judge had considered the evidence and reached her conclusion. She was entitled to reach this conclusion on the basis of the evidence before her. The Claimant had all the necessary information to make an informed choice and decided to make one that would lead to her incurring and attempting to recover charges of nearly £3,500 when she could have had a car for nothing.

If Copley was correct, the effect was that if a Claimant acted reasonably and accepted a free car, the Claimant was entitled to no damages; but if the Claimant failed to act reasonably and rejected a free car then the Claimant could have damages based on the cost to the Defendant of the car which would have been free to the Claimant. The Claimant therefore gets not what the car cost him or her but what it would have cost the Defendant.

In Hunt v Severs, the House of Lords (Lord Bridge) stated that the basis of a Plaintiff’s claim for damages might consist in his need for services however the question from which source that need had been met was irrelevant. That passage was cited with approval by Lord Hoffmann in Dimond v Lovell in which he commented that:-

“The only way … in which Mrs Dimond could recover damages for the notional cost of hiring a car which she had actually had for free is if [the House of Lords] were willing to create another exception to the rule against double recovery. I see no basis for doing so.”

Thus, if the Defendant’s offer of a car had been accepted, the Claimant would have had no claim for any damages in respect of the provision of a replacement car. Why then should the position be any different if she ought reasonably to have accepted it but had not?

In Dimond v Lovell, Lord Hobhouse had emphasised that a duty of mitigation on the part of the injured party to take reasonable steps to avoid loss by incurring that expense. This was all the more striking as a principle if no expense at all was involved.

In Lagdon v O’Connor, Lord Hope said:-

“If it is reasonable for him to hire a substitute he must minimise his loss by spending no more on the hire than he needs in order to obtain a substitute vehicle.”

In this case the Claimant did not need to spend anything at all. Lord Hope had gone on to say that whilst the wrongdoer was not entitled to demand of an injured party that he bear a burden or incur a loss in mitigation of damages, he was entitled to demand that where there were choices to be made, the least expensive route which would achieve mitigation had to be selected. In this case the least expensive route for the Claimant would manifestly have been to accept TNT’s offer of a car free to herself.

The Court proposed to follow this body of authority. It had been urged upon the Court that it was bound to follow the observations of the Court of Appeal in Copley. In the event the Court preferred the higher authority of the House of Lords and proposed to follow that line of authority.

Appeal dismissed.

Comments

My thanks to Darran Harris of Pollard Bower for bringing my attention to this case.

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