Constantino v Youi Pty Ltd [2018] QMC 1

MAGISTRATES COURT OF QUEENSLAND CITATION: Constantino v Youi Pty Ltd [2018] QMC 1 PARTIES: TANYA CONSTANTINO (Plaintiff) v YOUI PTY LTD ACN 123 074 733 (Defendant) FILE NO/S: 54073 of 2016 DIVISION: Trial PROCEEDING: Claim ORIGINATING COURT: Brisbane DELIVERED ON: 1 March 2018 DELIVERED AT: Brisbane HEARING DATE: 28 February 2018 MAGISTRATE: Magistrate Hay ORDER: 1. I give judgement for the plaintiff against the defendant. 2. I will hear from the parties on the question of costs. CATCHWORDS: INSURANCE CONTRACTS ACT – SECTION 51 – INSURED CANNOT BE FOUND – ‘REASONABLE ENQUIRY’ – Whether there is a continuing obligation to undertake ‘reasonable enquiries’ – Whether enquiries made were reasonable in the circumstances. TORTS – NEGLIGENCE – ROAD ACCIDENT CASES – QUANTUM – Pre-accident market value – Expert evidence CASES: Bayswater Car Rental Pty Ltd v Hannell (1999) 29 MVR 35 James v Hill & Anor [2010] QSC 70 Hannell v Bayswater Car Rental Pty Ltd (1997) 10 ANZ Ins Cas 61-387 COUNSEL: M Eade for the Plaintiff D Kissane for the Defendant -- 1 of 7 -- 2 SOLICITORS: Sparke Helmore Lawyers for the Plaintiff Ligeti Partners Lawyers for the Defendant 1. The plaintiff claims against the defendant insurer for property damage arising from a motor vehicle accident that occurred on 19 April 2015. The plaintiff relies upon s. 51 of the insurance Contracts Act 1984 (Cth) to found its cause of action directly against the other driver’s insurer on the basis that, despite reasonable enquiry, it has been unable to locate the defendant’s insured.1 2. The only issues for determination are: a. whether the plaintiff made ‘reasonable enquiry’ within the meaning of s. 51(1)(b) of the Act; and b. whether the pre-accident market value of the plaintiff’s vehicle was $4,500 as alleged by the plaintiff2 or $3,250 as alleged by the defendant.3 Reasonable Enquiry 3. Section 51 of the Act creates a separate cause of action directly against the defendant insurer. To succeed in her cause of action, the plaintiff must prove, on the balance of probabilities: a. that there is a valid policy of insurance in place between the defendant and its insured, Amanda Gay. This is not disputed by the defendant.4 b. that she, the plaintiff, has a valid claim. This is not disputed by the defendant.5 c. that the plaintiff has been unable to locate the insured despite reasonable enquiry. 4. The issue of whether the steps taken by the plaintiff to locate the defendant’s insured, Amanda Gay, constitute ‘reasonable enquiry’ for the purposes of s. 51(1)(b) of the Act is question of fact. It is not disputed that the plaintiff’s obligation to make 1 Section 51(1)(b) 2 Reply filed 14 November 2017, Court doc no. 8; Plaintiff’s Response to Particulars filed 27 February 2018, Court doc no. 10. 3 Amended defence filed 19 October 2017, Court doc no. 7. 4 The defendant admits that Amanda Gay is an insured or third party beneficiary under a contract of liability insurance provided by the defendant, and the policy covers liability for Amanda Gay’s operation of the defendant’s vehicle and the resulting collision, loss and damage to the plaintiff’s vehicle: paragraph 6(a) and 6(b) of the Statement of Claim and paragraph 2(a) of the Amended Defence 5 The defendant admits liability for the collision and for the damages arising from the collision, but disputed the quantum of the damages claimed: paragraphs 2(a) and 2(c) of the Amended Defence. -- 2 of 7 -- 3 reasonable enquiries is a continuing one. The reasonableness of the enquiry made is to be determined on the facts of the case having regard to the nature of the claim and the interests of justice.6 As noted by Commissioner Greaves in Hannell v Bayswater Car Rental Pty Ltd: “… the need to make reasonable enquiry… is not limited to reasonable enquiry before the commencement of an action… however given the history of the earlier enquiries and the size of the claim, it was not reasonable to expect the appellant’s solicitors to enquire at an address which the respondent provided to the appellant’s solicitors through discovery in July 1996.” 7 5. It is important to bear in mind the mischief at which s. 51 of the Act is directed. In my opinion, this case exemplifies it. As noted in the The Law Reform Commission’s 20th report on Insurance Contracts:8 “Insurers have been known to insist that a third party serve proceedings or enforce a judgment directly against the insured where they believe that it will be difficult or impossible to locate the insured… Conduct of this sort is often explained on the basis that, since liability is in doubt, the insurer’s interests would be prejudiced if it were forced to conduct the case in the absence of the insured. While this may be an adequate explanation in some cases, liability is often clear. In those cases, the insurer’s conduct may appear to be an unmeritorious way of defeating a legitimate claim.” [my emphasis] 6. In the present case, there is no suggestion of prejudice to the insurer. It has been able to conduct the litigation, including a full admission of liability, an admission as to the validity of its insured policy and an admission that the policy will respond to the claim. Further there is no question that some attempts were made to locate the defendant’s insured. The question is whether those efforts were reasonable. 7. On 5 February 2016 proceedings were instituted by the plaintiff against the defendant’s insured. In those proceedings the plaintiff pleaded that “the defendant was the driver of vehicle bearing an unknown Queensland registration number.”9 6 James v Hill & Anor [2010] QSC 70 at [10] and [15]. See also Hannell v Bayswater Car Rental Pty Ltd (1997) 10 ANZ Ins Cas 61-387 at [24]. See also Bayswater Car Rental Pty Ltd v Hannell (1999) 29 MVR 35 7 Supra at [24]. See also Bayswater Car Rental Pty Ltd v Hannell (1999) 29 MVR 35 esp. at [20], [41] – [44] and [74]. 8 Published 1982 9 Statement of claim filed in proceedings M508/16 on 5 February 2016 in the Brisbane Magistrates Court at paragraph 1.b. -- 3 of 7 -- 4 8. On 8 February 2016 the plaintiff’s solicitors provided written instructions to its process server to attend upon personal service of the defendant’s insured, Amanda Gay. They provided her last known address and mobile phone number to assist the process server in its task.10 There is nothing on the evidence before me to suggest that, at that point in time, the plaintiff had any better information regarding the defendant’s insured such as the registration number of the vehicle she was driving. 9. On or about 15 February 2016 the plaintiff’s solicitors received a report from the process server advising that service at the given address had been unsuccessful because the occupant, who and had resided at the address for several years, had never heard of the defendant’s insured, Amanda Gay.11 10. On or about 19 February 2016 the plaintiff’s solicitors received a further interim report from the process server repeating the contents of its earlier report and providing the results of ‘basic relocation searches’ conducted by it. Three searches had been undertaken resulting in two possible addresses. 12 11. The defendant contends that the plaintiff’s should have made further follow up enquiries at the addresses identified in its agent’s second interim report dated 19 February 2018. 13 One of those addresses, it contends, was in fact the correct address for the insured and would have resulted in her being located by the plaintiff. 14 12. It is not disputed that the plaintiff did not follow up these addresses. Instead it would seem that the plaintiff turned its attention to the defendant insurer. It is clear on the face of the correspondence that in doing so, the plaintiff’s initial intention was to continue to pursue its action against the defendant’s insured, not the defendant itself. Between at least April 2016 and August 2016 the plaintiff attempted to engage with the defendant regarding its claim against the defendant’s insured, Amanda Gay. See for example the email sent on 19 April 2016 by the plaintiff’s solicitors to the defendant15 with the subject line ‘RE: Letter of Offer – Claim Number: 8724673’ 16 10 Exhibit 1 Letter Sparke Helmore to Advance National Services dated 8 February 2016 11 Exhibit 1 Interim report Advance National Services dated 15 February 2016 12 Exhibit 1 Interim report Advance National Services dated 19 February 2016 13 Exhibit 1 14 Exhibit 8 15 Exhibit 8 Email Sparke Helmore to the defendant dated 19 April 2016 16 Which is the claim number the defendant allocated to this matter. Se Exhibit 8 Email from defendant’s representative, Karin Buckley, dated 14 June 2016 sent at 11.23am. -- 4 of 7 -- 5 13. No response was received from the defendant to that email until further prompted by the plaintiff’s solicitors by correspondence and emails on 10 June 2016.17 At that time the plaintiff’s solicitors informed the defendant that it had been unsuccessful in locating the insured to effect service upon her and reserved the plaintiff’s rights under s. 51 of the Act.18 14. On 3 August 2016 the defendant wrote to the plaintiff advising that they did not accept service of the proceedings instituted against its insured, advising that they were looking to “resolve the matter” and requesting that the plaintiff “hold further legal action in abeyance for us to resolve.”19 15. Correspondence continued between the plaintiff’s solicitors and the defendant. On 12 September 2016 the plaintiff’s solicitor’s sought the defendant’s position regarding the plaintiff’s claim and put the defendant on notice that they held instructions to pursue resolution of the matter under s. 51 of the Act.20 16. On 21 September 2016 the plaintiff’s solicitors made further enquires to locate the defendant’s insured. They conducted a point in time search21 of the defendant insured’s vehicle registration. The results did not disclose any information about the defendant’s insured. This was in part because of an error in the registration number searched.22 I accept that even had the registration number been correctly entered for the point in time search, it would not have identified the defendant’s insured because neither the defendant’s insured nor the other co-registered owner, Anthony Gay, were effective registered owners of the car until after the date of the accident.23 17. Noting that s. 51 of the Act creates a separate cause of action, the plaintiff was entitled to commence fresh proceedings against the defendant as it did on 17 October 2016. Alternatively, it could have brought an application in the existing proceedings seeking leave to join the defendant and amend the pleadings to plead the cause of action against the defendant under s. 51 of the Act. 17 Exhibit 8 Email Sparke Helmore to defendant’s representative, Rose Blackburn, dated 10 June 2016 sent at 9.44am 18 Exhibit 8 Letter Sparke Helmore to the defendant dated 10 June 2016. 19 Exhibit 8 Email from defendant’s representative, Rose Blackburn, dated 3 August 2016 sent at 3.14pm 20 Exhibit 8 21 That is registration as at the date of the accident: 19 April 2015 22 The last two letters were accidently switched about. See exhibit 9. 23 Exhibit 11. Defendant’s insured name registered to the car from 29 September 2015 and Anthony Gay from 24 July 2015, both being after the date of the accident -- 5 of 7 -- 6 18. This is a very low value claim. It was clearly cheaper to issue fresh proceedings, rather than draft an application, supporting affidavit and amended pleadings as well as appear on an application before the court. 19. On 17 October 2016 these proceedings were commenced. 20. On 31 October 2016 the defendant emailed the plaintiff’s solicitors requesting that they “hold further legal action in abeyance so I can forward to our solicitor to file a defence.” This was reiterated by the defendant’s solicitors under correspondence dated 3 November 2016. 24 21. On 22 December 2016 the defendant filed its defence in these proceedings accepting all the elements of s. 51 of the Act, save for reasonable enquiry, and admitting liability. 22. Having regard to these factors I am satisfied that the enquiries made by the plaintiff to locate the defendant’s insured are reasonable having regard to quantum and nature of the dispute and the defendant’s ability to prosecute its defence through to trial in the absence of its insured. There is no suggestion on the evidence before me that the defendant has been in any way prejudiced by the plaintiff enquiries, albeit limited, being conducted in the manner in which they were. I am of the opinion that it would not be in the interests of justice to require the plaintiff to re-prosecute the same case on the pre-existing claim against the insured in circumstances where the insurer accepts the policy of insurance held by it will respond, liability is admitted and it will be acting pursuant to the subrogated rights of its insured under the valid contract of insurance. Quantum 23. I accept the evidence of the loss assessor called for the plaintiff, Mr Wright. He had relevant expertise to undertake an assessment of the pre-accident market value of the plaintiff’s vehicle and to assess the likely repair costs arising from the damage sustained in the accident. He has been assessing vehicles for 11 years, most recently for the last 9 years. He assesses 35 – 40 cars a week. He also has 40 years of experience as a motor vehicle repairer and panel beater. It is fair to say he is vastly experience in all the relevant areas necessary to appear as an expert in these matters. 24 Exhibit 8 -- 6 of 7 -- 7 His experience and level of expertise was not seriously challenged under cross examination. 24. He was unshaken in cross examination. He had made an appropriate adjustment in the pre-accident market value of the car to allow for its high kilometres. I accept his evidence that the number of kilometres travelled by a car is not the main or only factor in determining its value. I accept his evidence that a car can have high kilometres and still be considered ‘above average’. He had the benefit of physically inspecting the car inside and out. He did not just perform a ‘desk top’ assessment. No expert evidence was called for the defendant on this issue. 25. For these reasons I reject the defendant’s contention that an amount less than that assessed by Mr Wright should be allowed for the pre-market value. I find that the pre-market value of the plaintiff’s vehicle was $4,500.00. I note that the towing and salvage amounts claimed by the plaintiff are admitted by the defendant. Accordingly, I allow the quantum of the plaintiff’s claim in full. -- 7 of 7 --