CASE REPORT: Approach to Credit Hire Claim When Impecuniosity Argument has Failed

Image Helen Rutherford

Karl Stevens v Equity Syndicate Management Limited

Judgment date: 12/03/14

High Court of Justice Queen’s Bench Division

 This is a new credit hire case, involving hire company Accident Exchange Ltd. It was an appeal from Mr Recorder Tolson QC, who had reduced the value of the Claimant’s hire from £5,764.80 to £1,436.78.

The Claimant owned an Audi A4 S Line TDi 140 vehicle. On 10 February 2011 that vehicle was damaged when the Defendant reversed into the rear nearside. He was put in touch with Accident Exchange by his own insurers, who made arrangements to repair the vehicle and hired a replacement vehicle to the Claimant.

The Claimant hired a 2009 Audi A4 for £140 per day. The £1,500 excess was reduced to zero for £22.50 per day. £3 per day was claimed for a collision damage waiver. Therefore the daily charge was £165.50, which with VAT added totalled £198.60. That vehicle was delivered for £120. The Claimant was in hire for 28 days.

The Claimant was alleging impecuniosity. His bank accounts showed a positive balance and very few transactions; it was not the full picture.

Key Points

  • On the facts the Claimant was held not to be impecunious. That was upheld on appeal. “particularly in the context of a case where there was no dispute on liability and thus no question about the recoverability of reasonable hire charges”.
  • On the issue of basic hire rate the Judge commented that there is an “air of unreality” when considering BHR, given that the question is hypothetical.
  • The judge held that the question was of what figure the Claimant was willing to pay, on the basis that he had in fact gone into the ordinary car hire market to find a temporary replacement for his vehicle. “in doing that the evidence of a Claimant that he would be disinclined to spend more than necessary on a car would be relevant”.
  • The Judge advised: “questioning of the Claimant on this issue should be directed to exploring what he would have been willing to pay on the hypothesis that he would have gone into the market to hire a vehicle”.
  • On period of hire: the trial judge had reduced the period by 9 days because the car went into the garage 9 days before the repairs commenced. It had been inspected the day after hire commenced and the parts ordered. The vehicle had been stripped to assess what parts were required, and then those parts were ordered. On appeal it was held it was unrealistic to suppose that after having been stripped the vehicle could be reassembled so the Claimant could drive the vehicle for those 9 days. The hire period was therefore allowed in full.



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