On 8 December 2021, the High Court of Australia handed down its judgment in Ahya-Ud-Din Arsalan v Alex Rixon; Dylan Nguyen v Azad Cassim [2021] HCA 40.

In summary, the High Court held that if a plaintiff’s vehicle is damaged as a result of a defendant’s negligence, the plaintiff may recover hire car costs from the defendant.

The High Court upheld the decisions of the New South Wales Court of Appeal, which had previously determined that, in three out of the four cases before it, the plaintiffs were entitled to hire car costs.

The High Court commented that the:

“…conclusion of the majority of the Court of Appeal should be upheld on the basis that Mr Rixon and Mr Cassim suffered heads of damage of physical inconvenience and loss of amenity and it was not unreasonable for them to take steps to mitigate both aspects of their loss by the hire, at a reasonable rate, of an equivalent car for a reasonable period of repair.”

The High Court heard submissions in relation to the correct method by which damages are to be assessed where a plaintiff suffers a temporary loss of use of their vehicle, whilst their vehicle is under repair and the plaintiff can establish a need for a use of a hire vehicle.

The High Court unanimously dismissed the appeals with costs in favour of the plaintiffs, and noted the following:

“The simple answer is that a plaintiff will usually be able to recover from a negligent defendant the reasonable costs incurred in hiring, for the period of repair, a substitute vehicle that is broadly equivalent to their damaged vehicle.

… Once the plaintiff acts to mitigate that loss by hiring a substitute vehicle, the onus of proof will lie upon the defendant to show that the costs incurred in mitigation were unreasonable.

… Once a plaintiff has proved heads of damage of physical inconvenience and loss of amenity of use, it will usually be difficult for a defendant to prove that the plaintiff acted unreasonably by seeking to hire a replacement vehicle. …”

Implications

The decision provides long sought after clarity as to the recoverability of hire car costs following a car accident.

However, the amounts recoverable on hire car claims remains subject to matters, including but not limited to:

  1. the extent to which the hire vehicle was equivalent to the damaged vehicle;
  2. the extent to which the plaintiff mitigated their losses; and
  3. whether the hire charges were reasonable and within industry range.