On 8 December 2021 the High Court delivered their decision in Arsalan v Rixon and Nguyen v Cassim.
The decisions were appealed from the New South Wales Court of Appeal, and each relate to the situation where an insured driver has caused a collision, and where the damaged vehicle owner has rented a vehicle (effectively on a credit basis from a rental vehicle provider) during the period their vehicle is being repaired and sought recovery of the credit hire from the at fault driver.
The High Court considered whether a vehicle capable of meeting the specification and functionality of the damaged vehicle would be sufficient or whether a “like for like” vehicle could be hired as a reasonable replacement.
The rental of vehicles on a credit basis by third party claimants is an area of increasing concern for insurers, particularly given the growing magnitude and prevalence of literally thousands of such matters (which are predominantly determined in lower-level Court jurisdictions across Australia).
The factual issues generally involve the following scenarios:
(i) A rental hire company (with a large part of the credit rental market being dominated by Right2Drive/Onyx and CompassCorp) provides a vehicle to the not at fault driver;
(ii) The rental vehicle is usually of a similar (or often more expensive) type of vehicle;
(iii) The rental vehicle is provided on a credit basis, at no upfront cost to the owner of the damaged vehicle; and
(iv) The rental company (in their agreement with the owner of the damaged vehicle) obtains the authority to pursue the insurer of the at fault driver for the costs incurred of the rental.
With the costs of motor vehicle claims rising and putting pressure on insurance premiums the High Court was called upon to consider the entitlement of the owner of a damaged prestige vehicle to claim the costs of renting a “like for like” similar type vehicle while their vehicle was being repaired.
It is important to note that accidents involving prestige vehicles represent only a very small share of the total number of motor vehicle accidents in Australia each year and there remain many strategies to combat such claims as will be detailed below.
In what was a relatively short judgment by High Court standards (particularly given the conflicting authorities and complexity of the issues involved), the High Court considered the following issues:
(i) Whether “loss of use” of the vehicle itself is a head of damage?
(ii) In the event that “loss of use” itself of the particular vehicle is not a sufficient measure of damages, how should the Court then assess the physical inconvenience and loss of amenity of using the damaged vehicle?
(iii) Whether the damaged vehicle owner must establish a “need” for the hire vehicle in order to obtain damages?
(iv) What steps is the owner of a damaged vehicle required to take to mitigate their loss?
(v) Is the onus upon the damaged vehicle owner to establish that the damages claimed (and steps taken to mitigate the losses) are reasonable, or alternatively is the onus upon the at fault driver (through their insurer) to establish that the damages claimed (and steps taken) are unreasonable?
In addressing the key issues raised above, the High Court held in a unanimous decision:
(a) The loss of “use” of a prestige type vehicle is not a sufficient measure of damages to which the owner of such a vehicle is entitled.
(b) Rather, the ownership of such a vehicle goes beyond the “use” of the vehicle and extends to the “loss of amenity or enjoyment of the use of the vehicle”, with references to the loss of “convenience” and “pleasure” of using such a vehicle featuring prominently in the assessment of the reasonableness of damages being claimed.
(c) Importantly, the issue of “need” (for a prestige rental vehicle) was effectively abolished, with the fact that the damaged vehicle owner having suffered physical inconvenience, loss of amenity and also having incurred “significant capital or ongoing expenditure on that prestige vehicle” being sufficient to establish an entitlement to damages.
(d) With the damaged vehicle owner not having to establish a “need” for the prestige vehicle rented, the entitlement to damages will usually be assessed as the reasonable costs incurred in renting a “substitute vehicle that is broadly equivalent to their damaged vehicle”.
(e ) With the above factors satisfied, the onus is usually then upon the Defendant to show that the owner of the damaged vehicle incurred unreasonable costs in their rental of the prestige vehicle.
In summary, the High Court has affirmed the decision of the Court of Appeal of the Supreme Court of New South Wales and in direct contrast to the decision of the Supreme Court of New South Wales, held that the owner of a damaged prestige vehicle is entitled to a “like for like” vehicle, irrespective of their usage of the damaged vehicle prior to the collision.
The only requirement is that the replacement prestige rental vehicle be “broadly equivalent”, an interesting concept which will be explored further below.
The High Court also identified specific scenarios where the owner of a damaged prestige vehicle would not be entitled to rent a similar vehicle, but such scenarios were limited to situations where such a vehicle owner was:
(i) Hospitalised or abroad whilst their vehicle was being repaired; or
(ii) Able to utilise an alternative vehicle from “idle stock”.
While the above scenarios were described by the High Court as being “exceptional”, with the owner of a damaged prestige vehicle otherwise being entitled to rent a similar vehicle, it is not difficult to think of other similar scenarios. For example, individuals affected by COVID and in lockdown or quarantine, may not be entitled to a vehicle at all.
It is interesting to note that in the High Court Summary of the decision it is stated that the plaintiff was entitled to rent:
“…a replacement vehicle of broadly equivalent value to the damaged vehicle” (emphasis added)
As a result of the above summary, there has been commentary online adopting the wording used as the decision of the High Court, but it is important to note that the actual wording used in the High Court decision is:
“…a substitute vehicle that is broadly equivalent to their damaged vehicle”.
The High Court was not called upon to consider whether the cars hired by Mr Rixon and Mr Cassim were broadly equivalent to the car each of them had owned. This will remain a fertile area for dispute. The defendant will still be entitled to argue that the replacement vehicle hired, “in light of the range of vehicles that might fairly be regarded as equivalent to the damaged vehicle”, was unreasonable.
The specification, performance, age, condition, and value of the vehicle are all matters which may be considered relevant by the Court when assessing whether the replacement vehicle was “broadly equivalent”, however, we urge caution on reliance on the High Court Summary to assert that the dollar value of a car might be the key criterion to assess whether a vehicle might be of “broadly equivalent value”.
Despite the High Court decision being widely regarded as a resounding victory for the credit rental industry, it is important to note that the decision related only to the issue of the “need” for a replacement prestige vehicle.
The decision did not relate to the assessment of the reasonableness of the amount claimed in respect of rental costs for a like for like prestige vehicle.
As a result, insurers are still able to apply all available pressure upon credit rental providers to ensure that the following elements of the rental claim are substantiated.
The rental period claimed must be reasonable
The High Court decision specifically referred to the “reasonable period of time for repairs”. There are various strategies available to insurers to ensure that the repair period (and accompanying rental period) are substantiated as reasonable, including the request for provision of all repair documentation and the compelling of the repairer to attend at Court at the determination of the rental claim if required.
In the absence of such supporting evidence and documentation, significant reductions can be made in the total claim payable, by limiting the rental period only to the reasonable repair period (notwithstanding that there may be no fault on the part of the damaged vehicle owner for any unreasonable delays in the repair process).
The rate of hire must be reasonable
The issue of the reasonableness of daily rates claimed for credit rental vehicles has long been a battleground for many thousands of cases determined by Courts across Australia.
Whilst the High Court decision now firmly places the onus upon insurers to establish that the daily rates charged by rental entities are unreasonable, there are many strategies that can be employed by insurers to ensure that such claims are properly substantiated as reasonable.
Insurers can rely upon daily and weekly rental rates from mainstream rental companies (such as Hertz and Thrifty) for prestige vehicles, particularly given that these companies have greatly expanded their offering of prestige vehicles in recent years.
Relevant rates from mainstream rental companies can be obtained under Subpoena if the rental claim is litigated. In addition, representatives of the respective rental companies can assist in giving evidence at hearing if required, no doubt due to their willingness to combat the rapid rise of credit rental entities which are clearly impacting their more reasonably priced business model.
It can also be submitted in combatting such claims that it is unreasonable for the owner of a damaged prestige vehicle to claim a daily rental rate for what may be an extended rental period. Mainstream rental vehicle companies offer significantly discounted rates when a prestige vehicle is rented for a weekly or monthly period, and that when lengthy repairs are required such delays are known (or should be known) to the owner of the damaged prestige vehicle.
Whilst the High Court decision has been described by many as an obstacle for insurers in defending credit rental claims for prestige vehicles, the principles emanating from the reasoning of the High Court are only applicable to a very small section of claims in the burgeoning credit rental industry.
Even in respect of the prestige vehicle rental claims to which the High Court decision does apply, as outlined above there still remain firm grounds for insurers to combat the reasonableness of these often exorbitant claims.
In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract. Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed. Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph , Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)." Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter. Judgment At paragraph , Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship. Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph : "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the dictionary.com definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest. What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.
The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane  NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty. The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.
The recent decision in New Aim Pty Ltd v Leung  FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.