Needs vs Wants in the realm of hire car claims

Are you in need of a replacement car? Yes, and I have demonstrated the need for it. So, do I get a BMW or a Camry?

The basic principle is that, once need is established, if the claimant’s vehicle was a non-income producing chattel, irrespective of its value, then the claimant is entitled to a commensurate vehicle such as a Toyota Corolla or Camry.

The rationale goes as far back as 1826, in The Yorkshireman (1826) 2 Hagg Adm 30n, where the cost of hiring a replacement chattel, in this case a ship, was held recoverable. Since 1826, the Courts have allowed the cost of ordinary replacement chattels where need was demonstrated, but since that time, chattels with special features such as prestige luxury vehicles have entered the realm of the hire car industry.

In Droga v Cannon [2015] NSWSC 1910, the Court found that a far less sophisticated vehicle would suffice for the purposes of getting from A to B, and that, in the absence of any evidence as to why a comparable vehicle is required, the cost of hire is not a compensable loss. This needs-based approach was confirmed in Seung Huyn Lee v Leisa Strelnicks [2019] NSWSC 526.

The law assists genuine claimants by providing appropriate compensation to alleviate, as best as possible, the inconvenience of not being able to drive their car (depending on how it was driven or used before the collision). Such compensation can be limited to interest on capital value of the claimant’s car.

The law is not there to allow credit hire companies to provide prestige, luxury, or of equivalent value, vehicles to claimants just because their vehicle was damaged in a collision.

In Nguyen v Cassim [2019] NSWSC 1130, the claimant owned a Mercedes Benz and gave evidence that he needed a vehicle for daily personal use. On its appeal, the claimant received the cost of hiring a Corolla, based on the principles explained above.

In Rixon v Arsalan [2019] NSWSC 1136, the claimant owned an Audi, and the Court allowed the cost of hiring the good old Corolla, as it met the claimant’s needs in this case.

In Souaid v Nahas [2019] NSWSC 1132, where the claimants hired a Lexus sports car but had no need for it, the Court allowed the cost of hiring the Camry.

It appears that the Courts are sending a message to claimants, that, they should not make claims based on status or desire. It is no longer about which vehicle you desire to hire, rather, it is whether you needed to have hired that replacement vehicle.