AUSTRALIAN MARITIME LAW
Arsalan v Rixon
Collision—measure of damages for damage to non-profit-earning goods
(NB: Although this is not a maritime case, the principles stated by the High Court of Australia are relevant to the calculation of damages in maritime collision cases involving non-profit-earning vessels.)
The two plaintiffs (Rixon and Cassim) were involved in separate car accidents. The two defendants, by their insurers, admitted liability for the accidents. The plaintiffs’ damaged cars were prestige models and both plaintiffs sought to recover the cost of hiring a substitute car of equivalent luxury while their damaged cars were being repaired. At first instance in the Local Court of New South Wales, Rixon was awarded damages on the basis of the market rate of hire for an ordinary (non-luxury) sedan car (a Toyota Corolla), but Cassim was awarded damages for the full amount of the hire costs he incurred. On appeal, Basten J of the Supreme Court of New South Wales dismissed Rixon’s appeal but allowed the defendant’s appeal in Cassim’s case, substituting an award of damages representing the hire costs of a Toyota Corolla. On further appeal, the New South Wales Court of Appeal (by a majority) reversed Basten J’s decision, awarding damages for the full amount of hire incurred by the plaintiffs. By special leave, the defendants appealed to the High Court of Australia.
Decision: Appeal dismissed.
Held: (1) “Loss of use” is not a head of damage. Where a plaintiff’s chattel is damaged as a result of a defendant’s negligence, the plaintiff is generally entitled to damages for the costs of repair and for consequential loss. The mere reference to the loss of use of the chattel is inadequate because it does not identify the manner or extent of any loss to the plaintiff. An assessment of consequential loss always requires the identification of the manner in which the loss of use of a chattel has adversely affected the plaintiff.
(2) Although older cases (such as The Mediana
) speak in terms of “loss of use” when awarding damages for a ship where no substitute or spare is available, the underlying principle is to compensate for the consequences of the loss of convenience derived from the use of the chattel. Where no substitute is available or hired, the loss of convenience