An ‘Unsuitable Vehicle’: High Court Challenge on Credit Hire Car Charges Refused

Legal update

Last Thursday, the High Court refused a special leave application in the case of Miller v McKnight.

The special leave application was brought by McKnight, the claimant, who was supported by a credit hire car company and sought to overturn the decision of the Western Australia Supreme Court of Appeal.

For more background and brief facts of the case, see our earlier TurkAlert: What Are Non-Compensable Benefits and Are They Recoverable from an At-Fault Party?

Judgment

As indicated in our firm’s earlier TurkAlert, the Western Australia Supreme Court of Appeal upheld the decision in the Perth Magistrates Court, where it was found that:

• the claimant failed to mitigate her loss by hiring a replacement vehicle that included credit hire charges which took it outside the market rate for similar hire vehicles;
• benefits tied up in the credit hire car business model included the cost of a hire car provided on credit, the hire car company acting as a ‘duly appointed agent’ to manage the claim and instruct legal providers, and the hire car company liaising with repairers to monitor the repair status;
• the not-at-fault party must prove a sufficient justification to recover credit hire car charges; and
• applying the median market rate (applied by the Senior Member in Sasso v Nicholas) presented as the correct approach in assessing damages.

Implications

The decision may have a ripple effect across all jurisdictions where credit hire car matters are litigated. The findings reached in the Perth Magistrates Court, and the adoption of the median-rate approach, may prompt a reconsideration of the approach taken in jurisdictions, such as Victoria, where credit hire car rates are accepted because they fall within the ‘range’ of mainstream market rates. It may also lead to a departure from the ‘lowest rate’ approach frequently applied in the small claims division of the New South Wales Local Court.

We anticipate that the decision will provide greater certainty in the assessment of credit hire claims and assist in resolving disputes currently awaiting judgment or determination. Its broader impact across jurisdictions is likely to become clearer as further cases are considered in light of this ruling.