MISTER BIG STUFF AUTO RENTALS LTD AND BEFORE THE HONOURABLE MADAME JUSTICE DEAN-ARMORER JUDGMENT

Transcription

1 TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Cv. No: 2010/0078 BETWEEN MISTER BIG STUFF AUTO RENTALS LTD CLAIMANT AND SHERWIN LOPEZ DEFENDANT BEFORE THE HONOURABLE MADAME JUSTICE DEAN-ARMORER APPEARANCES Mr. Raphael, Attorney-at-Law for the Claimant. Mr. Moses, Attorney-at-Law for the Defendant. JUDGMENT Introduction 1. In this action, the claimant seeks to recover damage for breach of a contract for the rental of a motor vehicle. In the course of this judgment, the Court considered whether the claimant, as beneficial owner of the motor vehicle, lacked locus standi to institute the proceedings. The Court also considered the appropriate measure of damages due to the claimant. Procedural History 2. On the 21 st May, 2010, the claimant instituted these proceedings seeking orders that the following payments be made by the defendant: 1. The sum of one hundred and seventy-two thousand, three hundred and seventy-five dollars ($172,375.00) Page 1 of 12

2 2. Interest on the said sum. 3. The defendant filed his defence on the 2 nd December, 2010, together with a counterclaim for damages for misrepresentation and/or deceit. On the 7 th January, 2011, the claimant filed its reply and defence to counterclaim. Evidence 4. The Court heard the evidence of two (2) witnesses for the claimant, that is to say, Leroy Serries and Ezekiel Joseph, who testified in obedience to a witness summons. The Court also heard the evidence of the defendant himself as well as investigator, Ian Gilbert, both testifying in support of the defence. Facts 5. The claimant, Mister Big Stuff Auto Rentals Ltd was, at all material times, a limited liability company, engaged in the rental of motor vehicles. At all material times, the claimant s managing director was Mr. Leroy Serries. According to the uncontroverted evidence of Mr. Serries, Mister Big Stuff Auto Rental Ltd was part of a holding company, designated LR&J Investments Limited. 6. It was the claimant s case, supported by the evidence of Mr. Serries, that in 2009, the claimant had been the beneficial owner of a blue Corolla, which carried the registration number, PCK 4583 ( PCK 4538 ). The registration card in respect of PCK 4583 was tendered into evidence and marked L.S.8. This document shows ownership of PCK 4583 to be held by LR&J Investments Limited. Mr. Serries testified however, that the claimant, Mister Big Stuff Auto Rentals Ltd is the beneficial owner of PCK Page 2 of 12

3 7. On the 15 th April, 2009, the defendant signed an agreement with the claimant for the rental of PCK The terms of the agreement were contained in a standard form, intituled Mister Big Stuff Auto Rentals Ltd Auto Rental Agreement 8. On the front of the Auto Rental Agreement, the defendant inscribed his name and contact information as well as information as to the issue and expiry date of his driver s permit. The defendant also inscribed information concerning PCK 4583 including the respective dates when the vehicle was taken and when it was due to be returned as well as the daily rate of rental agreed at three hundred and seventy-five dollars ($375.00). 9. Overleaf, one finds the terms of the auto rental agreement. Of significance, is the first substantive term, under the heading Who shall drive the car. WHO SHALL DRIVE THE CAR The car shall be driven by the lessee or additional lessee who signs Page 1 of this agreement, both of whom shall be 25 years of age or over and both of whom shall at the time of rental be in possession of a valid driver s permit. No other person shall drive the car unless duly authorized by the lessor. The contract shall be in breach should any unauthorized person be driving the car. 10. Another term of the agreement provided: DAMAGES TO CAR Lessee if at fault shall be liable for damages to vehicle. Liability not to exceed $10, Lessee shall immediately report any accident to the Law Enforcement agency having jurisdiction at the place of such accident and to lessor, and shall present any notices or other papers of any kind received regarding any claims or other legal proceedings of any kind relating to or involving the vehicle. Further lessee shall co-operate fully with Page 3 of 12

4 lessor or its investigators in defending the same. The lessee shall not without written consent of the owner give or allow to be given any instruction for repairing of the vehicle (s) or for the replacement of parts rendered necessary to such accidents. 11. According to the agreement, the Lessor was Mister Big Stuff Auto Rentals Ltd and the Lessee as the party leasing or renting the vehicle, was the defendant. 12. The defendant contends that prior to signing the agreement, he indicated to Mr. Serries that PCK 4583 was being rented for his brother. The defendant admits however, that his brother never visited the claimant for the purpose of either signing the agreement or producing his driver s licence. 13. On 19 th April, 2009, PCK 4583 was being driven by Earl Francisco Lopez, brother of the defendant. PCK 4583 collided with two (2) other vehicles and was damaged. The relevant report of the Maloney Police Post was attached to the witness statement of Mr. Serries and marked L.S The police report revealed that the accident involved three (3) motor vehicles: PAW 2008 and TCD 8370, and PCK According to the report no information had been provided by the driver of PCK 4583, suggesting that Mr. Earl Francisco Lopez had not accompanied the other drivers to the police station. 15. The resulting damage was investigated by COLFIRE, with whom PCK 4583 had been insured. COLFIRE accepted the recommendation of Motor Vehicle Adjuster, Ezekiel Joseph and treated the damage as a total loss. COLFIRE calculated the loss as one hundred and twenty-three thousand, nine hundred dollars ($123,900.00) and offered the claimant the sum of sixty-eight thousand dollars ($68,000.00) together with the salvaged vehicle, Page 4 of 12

5 worth fifty-five thousand dollars ($55,000.00). COLFIRE required the claimant to present a valid driver s permit by the defendant s brother, Earl Francisco Lopez. The permit was never produced. 16. Accordingly, COLFIRE did not honour the claim and the claimant proceeded to repair the vehicle at its own cost. The claimant produced copies of two (2) receipts from Aranguez Auto Body Works for the sums of fifteen thousand dollars ($15,000.00) and eight thousand dollars ($8,000.00) respectively. The first receipt was dated the 20 th October, 2009 and the second was dated the 12 th December, The repairs which were done on both occasions were the same: straightening the front and rear fender. 17. The defendant contended that he had requested and had obtained the permission of Mr. Serries to have his brother drive the vehicle. This was denied by the claimant. In resolving this issue of fact, it was my view that it fell to the defendant to prove his allegation that he had obtained the claimant s permission to have his brother drive the vehicle. The Court heard the evidence of the defendant as to a conversation with Mr. Serries. Mr. Serries denied that this conversation took place. The defendant failed to put this aspect of his case to Mr. Serries and has therefore failed to establish his allegations. 18. The defendant elicited the assistance of Ian Gilbert, who deposed that he was an investigator attached to Insurance Investigations Services Ltd. Mr. Gilbert interviewed Anand Ramlochan of Aranguez Auto Body Works, where PCK 4583 was being repaired. The defendant annexed to the witness summary of Mr. Gilbert, a virtually illegible handwritten statement of Anand Ramlochan. He sought to prove that PCK 4583 had not been severely damaged. The garage owner took no oath and did not submit to crossexamination. The attempt by Mr. Gilbert to introduce the unsworn statement of Mr. Page 5 of 12

6 Ramlochan as evidence is in my view dangerous and inadmissible. Mr. Gilbert under cross-examination admitted that he did not know whether Mr. Rampersad was speaking the truth or not. In my view, this evidence was clearly hearsay and unreliable. 19. The defendant also contended that PCK 4583 had been involved in another accident later in the This was alleged at paragraphs 6 and 7 of the defence and admitted by the claimant at paragraph 6 of its reply and defence to counterclaim. Submissions and Law 20. Parties relied on the written submissions of their attorneys-at-law. Mr. Moses, learned attorney-at-law for the defendant relying on the authority of Candlewood Navigation Corporation Ltd v. Mitsui O.S.K. Ltd 1, contended at the outset that the claimant, not being the registered owner of PCK 4583, lacked locus standi to prosecute this claim. 21. Mr. Moses contended further that the defendant had properly obtained the permission of Mr. Serries to have his brother drive PCK 4583 and that accordingly there was no breach of the auto rental agreement. Candlewood Navigation Corporation Ltd v. Mitsui O.S.K. Lines Ltd This was a decision of the Judicial Committee of the Privy Council and concerned a vessel under the name of Ibaraki Maru. The first plaintiff, as owner of the vessel, rented it to the second plaintiff under a bareboat charter. 23. While the Ibaraki Maru was at anchor off Port Kembla, New South Wales, another vessel, the Mineral Transporter, owned by the defendant negligently collided with it. On the plaintiff s claim for damages, their Lordships held as follows: 1 [1986] 1 AC 1 2 [1986] 1 AC 1 Page 6 of 12

7 it was a principle of common law that if a wrong was done to a chattel a person who merely had a contractual right in relation to the chattel and not a proprietary or possessory right could not bring an action against the wrongdoer for injury to his contractual right In the course of his judgment, Lord Fraser of Tullybelton considered the claim of the time charterer for economic loss and had this to say: This issue is one of fundamental importance in Maritime law and in the law of negligence generally. There is a long line of authority in the United Kingdom for the proposition that a time charterer is not entitled to recover for pecuniary loss caused by damage to a third party to the chartered vessel. The reason is that the time charterer has no proprietary or possessory right in the chartered vessel. 4 CV 20 of 2002, Anand Rampersad v. Willies Ice Cream Ltd 25. This was a decision of the Court of Appeal in which the defendant/appellant, owner of PAE 6296, negligently ran off the Montrose Main Road and crashed into the respondent s Ice Cream Palour. The collision caused structural damage to the premises as well as the destruction of and damage to equipment. 26. In the course of his judgment, Chief Justice Archie restated the principle that the damages are to be specially proved: 5 The rule is that the plaintiff must prove his loss. 27. The learned Chief Justice continued: 3 Ibid at page 2D 4 [1986] 1 Ac 1 at 15A per Lord Fraser of Tullybelton 5 Civ App. 20 of 2002 Anand Rampersad v. Willies Ice Cream Ltd p. 8 of 14 Page 7 of 12

8 The correct approach is as stated by Lord Goddard CJ in Bonham Carter v. Hyde Park Hotel: Plaintiffs must understand that if they bring actions for damages it is for them to prove their damages, it is not enough to write down the particulars and so to speak throw it at the Court They have to prove it Continuing at page 9 of 14, the learned Chief Justice had this to say: Special damages are generally those past pecuniary losses calculable at the date of trial. It is well accepted that special damages must be specifically pleaded and proven. However with regard to the degree of strictness the law appears less certain. The authorities show that the degree of strictness depends on what is reasonable. Then at page 10 of 14, Archie CJ said: The Master in the absence of evidence to the contrary would have been entitled to accept a reasonable figure. The plaintiff would have to persuade him by evidence led that it was not simply plucked out the air but based on actual cost of replacement or what was actually paid for Reasoning and Decision 29. In these proceedings, three issues arose for the Court s decision: Whether the defendant breached the auto rental agreement. To what extent is the defendant liable to compensate the claimant. Whether the claimant is liable on the counterclaim of the defendant. 6 Ibid at p. 8 of 14 Page 8 of 12

9 30. The undisputed facts of this case are that the defendant signed an agreement which included a term prohibiting anyone other than the lessee from driving the vehicle. It was also undisputed that the defendant, as lessee permitted his brother to drive the vehicle and it was while in the control of the defendant s brother that the vehicle was damaged. It was therefore by the plain ordinary meaning of the auto rental agreement that the defendant was in breach of the term which prohibited anyone other than the lessee from driving the vehicle. 31. It falls to the Court to consider whether the defendant extricated himself from the breach by obtaining the verbal permission of Mr. Serries to have his brother drive the vehicle. Even if I accepted the defendant s allegation, which is strongly denied by Mr. Serries, it is trite law that evidence of verbal variation of a written agreement is inadmissible Accordingly, it is my view and I hold, that there was clearly a breach of the auto rental agreement by the defendant. The defendant will be liable to compensate the claimant so as to restore it to the position which it would have been occupied had the breach not occurred. At the outset, it falls to the Court to consider the defendant s contention that the claimant, not being the legal owner of the vehicle lacked the requisite locus standi to prosecute this claim. The defendant relies on the case of Candlewood Navigation Corporation Ltd v. Mitsui O.S.K. Lines Ltd 8. That authority concerned an action in negligence, whereas this action was for breach of contract. The claimant stands on the clear terms of the agreement and on the undisputed facts that constitute the breach. In my view, Candlewood Navigation Corporation Ltd v. Mitsui O.S.K. Lines Ltd 9 is distinguishable from the facts 7 Henderson v. Arthur [1907] 1 KB 10 8 [1986] 1 AC 1 9 [1986] 1 AC 1 Page 9 of 12

10 before me and the claimant as the lessor under the agreement was entitled to institute these proceedings. 33. I turn now to consider the issue of compensation. It is undisputed that the claimant s insurer dispatched motor claims adjuster, Mr. Ezekiel Joseph to assess the damage to the vehicle. Mr. Joseph testified that, as investigator, he visited the garage where PCK 4583 was being repaired. In his opinion, the cost of repairing the vehicle would have exceeded the value of the vehicle. Mr. Joseph advised COLFIRE accordingly. 34. It has not been disputed that COLFIRE offered to settle the claim in the sum of sixty-eight thousand dollars ($68,000.00) together with the salvaged vehicle which was valued at fiftyfive thousand dollars ($55,000.00). The offer was however, conditional on the production of the driving permit of the defendant s brother. The permit was never produced. Learned counsel, Mr. Raphael argued in his written submission that the claimant ought to recover the sum which had been offered by COLFIRE. Mr. Moses, by contrast, relied on the undisputed fact that the claimant had repaired the vehicle and resumed its use. In his submission, therefore it was inaccurate of Mr. Joseph to regard the vehicle as a total loss. Mr. Moses argued further that the claimant produced only two (2) receipts totaling twentythree thousand dollars ($23,000.00) and that the claimant should not even recover that sum since his pleaded case did not include a claim for repairs. 35. It is trite that the defaulting party is required to place the victim of a breach of contract in the position that he would have occupied had the breach not occurred. 10 In that case, Lord Blackburn defined the measure of damages as: 10 See Livingstone v. Rawyards Coal Co. [1880] 5 App Case per Lord Blackburn Page 10 of 12

11 the sum of money which will put the party who has been injured in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation The Court proceeds therefore to consider the position which the claimant would have occupied had the breach not occurred, that is to say, the position which the claimant would have occupied had the car been under the control of the authorized lessee at the time of the accident. 37. Had the car been under the control of the duly authorized lessee, the information as to the lessee s driving permit would have been recorded on the agreement so as to be available to the insurer. The condition specified by the insurer would then have been satisfied and the insurer would have been obliged to honour the claim in the sum of sixty-eight thousand dollars ($68,000.00). 38. As a result of the breach however, the requisite information was unavailable to the insurer who refused the claim. Having failed to recover the insurance benefit, the claimant proceeded to repair the salvage. There is no evidence forthcoming from the defendant to suggest that the repaired salvage was of the same quality or the same value as the preaccident vehicle. 39. It is therefore my view and I hold that there ought to be judgment for the claimant. 40. The claimant is in my view entitled to recover the following: (i) Loss of use for the three (3) weeks at three hundred and seventy-five dollars ($375.00) totaling seven thousand, eight hundred and seventy-five dollars ($7,875.00). 11 Mac Gregor on Damages, 19 th Edition at para Page 11 of 12

12 (ii) The value of the vehicle minus the value of the salvaged vehicle equaling to ninetyfour thousand dollars ($94,000.00). 41. It is unclear why the claimant claimed loss of the insurance premium. This has not been substantiated by evidence. It is also unclear why the claimant was required to pay the insurance excess if the benefit was being withheld. Accordingly these sums will be refused. 42. In respect of the counterclaim, it was my view that the defendant failed to prove that there was either malice, misrepresentation or deceit on the part of the claimant. Allegations of misrepresentation were made against Mr. Serries. The claimant as a limited liability company is a distinct legal entity separate from Mr. Serries. Accordingly the counterclaim is refused. The defendant to pay the claimant cost as prescribed. Orders 43. The defendant to pay to the claimant the sum of seven thousand, eight hundred and seventy-five dollars ($7,875.00) representing loss of use of PCK 4583 for three (3) weeks. 44. The defendant to pay to the claimant the sum of ninety-four thousand dollars ($94,000.00) representing the value of PCK 4583 less the value of the salvage. 45. The defendant to pay to the claimant costs as prescribed in the sum of twenty-four thousand, one hundred and twelve dollars ($24,112.00). 46. A stay of execution of twenty-eight (28) days. Dated this 28 th day of April, M. Dean-Armorer Judge Page 12 of 12