A property developer (whose claim for a replacement Rolls
Royce Phantom was dismissed due to lack of evidence of an actual need for a
replacement), has seen the decision upheld by the Court of Appeal. In a
controversial area of law, it is a significant case highlights that the burden
of proof for credit hire need is the responsibility of the claimant.
The facts of the case
In August 2009 the claimant, Mr Singh, a successful property
developer whose clients included celebrities, royalty and famous sports people,
was involved in a road traffic accident with the Defendant, Mr Yaqubi, causing
Mr Singhs Rolls Royce Silver Phantom to be damaged.
Whilst his car was being repaired, Mr Singh hired a
replacement vehicle from Accident Exchange, accruing hire charges of £99,439.06
e later reduced to £92,953.90 due to his VAT status. A Bentley was used for the
first five days, subsequently replaced with a Rolls Royce Phantom. This was
despite the fact that the claimant’s company owned a fleet of prestigious cars,
including; a Rolls Royce Phantom convertible, a Mercedes CL600, a Bugatti Veyron,
a Range Rover Overfinch, a Mercedes S320 and a Porsche later traded for a Range
Rover Sport HSE.
The arguments
The defence put the claimant to strict proof over his need
to hire a replacement vehicle at all, and sought evidence as to why none of the
company’s other prestigious vehicles could have been used rather than hiring a
replacement.
First instance
decision
In February 2012, liability was found in favour of Mr Singh.
However, when considering the claim for hire charges, HHJ Cowell at Central London
County Court dismissed the claim on the basis that the Claimant had not
provided sufficient evidence as to his need to hire to successfully discharge
the burden of proof.
The Judge had taken his starting point at the speech of Lord
Mustill in Giles v Thompson: “The need for
a replacement car is not self proving.“ He also noted that, one of the
great problems in this case is really the absence of detailed evidence. He took
the hypothetical case of a self employed plumber whose car is damaged. He
asked: “What evidence would anyone acting for him tell him to put together in order
to prove his need of the hire car. It seems to me that, properly advised, he
would give evidence about two things: first...his actual use of his vehicle
prior to the accident...perhaps by reference to his diary that he would
exhibit.... Then, secondly...what use he
made of the hired vehicle. For example, where did he go during the course of
the hire. It is the equivalent of all that which is completely missing in this
case. That is why it is a particularly difficult one.“
In this case, Mr Singh had been out of the country during
the hire period and could not give any indication as to what use the hire vehicle
was put e either whilst he was out of the country, or at all. The Judge felt
that it would have been appropriate for evidence to be adduced as to the use of
the accident damaged vehicle and also the hire vehicle. Such evidence would, he
said, have been easy to obtain and readily available.
Upon the claimant’s explanation that he needed a replacement
Rolls Royce, “to maintain the correct
impression in such circles,“ the Judge commented: “...what a testament that
is to the superficial, if not false, nature of the warped values of society,
or, as the claimant himself put it, “that
is how these people see it,“ ...That is a very subjective view which, as I
shall explain, is unsupported by detailed evidence.“
He also commented that; “this case raises the moral
question... whether the ever increasing insurance premiums of the ordinary motorist,
particularly one struggling to make ends meet and needing a modest car to go to
work, should, in some part, be used so that the rich may continue, at no
expense to themselves, to be filled with good things that they think they
need.“
The Judge went on to say however, that had the claimant
successfully discharged the burden of proof, he would have awarded the sum of
£21,428.57 which represented the lowest of the alternative basic hire rates as
adduced by the defendant. This was due to the fact that the location of this
particular hire company was closest in locality to the claimant and his
business. As the claimant had failed to beat a Part 36 offer of £30,000 the
appropriate costs order followed. Immediately following the judgment the
claimant requested permission to appeal which was granted.
The Issues
In December 2012, the Court of Appeal was asked to decide
if:
- The Judge was wrong to place such a high burden of proof upon the claimant in terms of proving the need to hire a replacement vehicle.
- The Judge was wrong in his finding as to the appropriate sum to be awarded if need was established.
- There was a serious irregularity by reason of the Judges apparent bias.
During the course of the appeal, the appellants conceded
that, if the Court were not with them on ground 3, then ground 2 would fall
away on the basis that a fair minded Judge would be perfectly entitled to award
the hire rate as indicated. Ground 3 was in fact dealt with first. The test is
whether the circumstances described would lead a, fair minded and informed
observer to conclude that there was a real possibility that the Tribunal was
biased. Counsel for the appellant submitted that the comments made by the Judge
were unfair as Mr Singh was not trying to profit at the expense of another and
he merely wanted an equivalent vehicle whilst his Rolls Royce was being
repaired. A fair minded and informed observer would conclude from the
references to the rich being ⁄filled with good things, l and to the⁄warped
values of society that the Judge was objectively unable to make a sound
judgment upon a claim by a rich man for a large hire charge. It was submitted
that these comments indicated active hostility towards the appellants claim.
The Court of Appeals
Decision
The Court of Appeal dismissed this ground of appeal on the
basis that the Judge had expressed views on the values of society openly and
frankly, citing the appellants own evidence that, “it is materialistic but that
is how these people see it.“ In light of this, the appeal as to the rate of
hire which could be awarded fell away. In terms of ground 1 of the appeal ie.
whether the Court had correctly assessed the evidence in terms of the appellants
need to hire, the appellant argued there was a burden on the respondent to show
that the appellant had acted unreasonably in replacing the Rolls Royce.
Emphasis was placed upon the burden of proof resting with the respondent.
The Court however,
found that:
- There was a burden on the appellant to show a reasonable
need for a replacement Rolls Royce during the period of repair.
- The required need was the need of the partnership.
- Such need is not self proving.
It was submitted that Aikens LJs judgment in Pattni sought
to alter the position but this was rejected. Indeed, it was noted that, when
the questions to be asked in considering a credit hire claim are set out, the
very first question should be, did the claimant need to hire a replacement car
at all?
It was held that the Judge was entitled to find that need
had not been established. It was stated that: ‘very large hire claims such as
this one should be scrutinised carefully by the Court and particularly when the
business partnership, which was required to establish the need, had a fleet of
seven prestigious cars on the same insurance. For such a business claim to
succeed, the Judge was entitled to require specific evidence of need...“
Accordingly, the appeal was dismissed.