Janice Rosemary Stocovaz v On Tai Fung [2007] NSWCA 199


Facts

Ms Stocovaz purchased a Mercedes Benz E200 for the sum of $95,563. This vehicle was purchased on finance pursuant to a Hire Purchase Agreement. A few weeks after the purchase, Ms Stocovaz’s vehicle collided with another vehicle driven by Mr Fung.

Following the collision Ms Stocovaz took her vehicle to a repairer which estimated the repairs at $14,197.67 plus GST and this amount was duly paid by Allianz, her insurer. Allianz then claimed the amount from Mr Fung which resulted in the commencement of the proceedings.

The Court ordered judgment for Ms Stocovaz against Mr Fung in the sum of $14,197.67 plus GST.


Issues

The Supreme Court of New South Wales heard the matter and considered the following issues:

  1. Whether Ms Stocovaz was entitled to damages from Mr Fung for the actual cost of repairs?
  2. If so, whether Mr Fung’s liability for damages ought to be reduced to the extent that the actual cost of repairs were not “fair and reasonable” and/or were “extravagant”?


Judgment

The Supreme Court ultimately held that Ms Stocovaz was entitled to damages from Mr Fung for the actual cost of repairs. However, the Court ultimately held that although the cost of repairs were not fair and reasonable, they were extravagant and ought to be reduced.

With respect to the second issue, the Court held that the method of assessing the cost of repairs falls on the question as to whether the cost of repairs were reasonable, both that the work must be necessary and the charges must not be extravagant. This test was applied in The Pacatolus (1856) Swab 173, and it was found in that case that costs of repairs were excessive as they were not rendered necessary by the collision.

The issue of whether the costs of repairs are indeed extravagant were further considered in Darbishire v Warran [1963] All ER 310, where the Court measured the extravagance of repairs and whether the plaintiff acted reasonably in claiming for the amount:

“The plaintiff is not under any actual obligation to adopt the cheaper method: if he wishes to adopt the more expensive method, he is at liberty to do so and by doing so he commits no wrong against the defendant or anyone else. The true meaning is that the plaintiff is not entitled to charge the defendant by way of damages with any greater sum than that which he reasonably needs to expend for the purpose of making good the loss. In short, he is fully entitled to be as extravagant as he pleases, but not at the expense of the defendant.”

The Supreme Court concluded that the costs of repairs were extravagant. This resulted in an appeal brought by Ms Stocovaz to the New South Wales Court of Appeal.

The Court ultimately refused the appeal and held that the term “extravagant” means something which is clearly outside the range rather than something which is within the scope of commercially available prices.


Impact of Decision

This decision reaffirmed that an individual or corporation is permitted to accept cost of repairs which are extravagant or unreasonable, but not at the expense of the defendant and the amount of repairs ought to be reduced to ensure that a fair and reasonable figure is compensated by a wrongdoer.

The Court confirmed that the term ‘extravagant’ and ‘unreasonable’ are interchangeable terms and a person claiming an amount for costs of repairs must not claim for more than the actual cost of those repairs and that cost must not go beyond prudence, be excessively high or exorbitant.