Tag: accelerated depreciation

Vehicle Lessor Awarded Damages for Accelerated Depreciation By BC Civil Resolution Tribunal

I’ve written many times about the law of ‘accelerated depreciation’ claims in BC.  In short when a vehicle is damaged in a crash it often suffers a loss of market value, even after all reasonable repairs are done.  ICBC routinely chooses to ignore this reality when dealing with crash victims and raises invalid arguments trying to deny such claims.  The damages for such claims can be pursued against the at fault motorist (through their liability insurance policy).

As was demonstrated in reasons published this week by BC’s Civil Resolution Tribunal there is no reason why such claims have to be limited to vehicle owner/operators but others with title interest in the vehicle can pursue such a claim.  In what I believe is one of the first times this issue was addressed the Tribunal found that a vehicle lessor can also obtain damages for accelerated depreciation.

In this week’s case (Dual Mechanical Ltd. v. Vicencio) the applicants (a vehicle lessor and lessee) vehicle was involved in a crash caused by the respondent.  The vehicle suffered an accelerated depreciation due to the damages from the crash.  The applicants brought a claim arguing one or the other of them should be entitled to the damages.  The CRT found that the vehicle lessor, given that title remained with them under the terms of the lease, was the appropriate party to be awarded these damages.  In reaching this decision Tribunal Member Lynn Scrivener provided the following reasons:

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Three Strikes and ICBC’s Out! – Insurer’s Denial of Accelerated Vehicle Depreciation Fails Again

For the third time in one month ICBC has been ordered by the Civil Resolution Tribunal to pay a vehicle owner damages for accelerated depreciation following a vehicle collision.

When a vehicle is damaged in a crash it often suffers a significant loss of market value, even after all reasonable repairs are done.  ICBC chooses to ignore this reality when dealing with crash victims and raises invalid arguments trying to deny such claims.  For the third time in one month the Civil Resolution Tribunal has held ICBC insured driver liable for paying such damages.

In the most recent case (Herriott v. Yuen) the Applicant’s Audi Quattro sustained over $10,000 in damages in a crash that the Respondent admitted fault for.  After the vehicle was repaired both the Applicant’s dealership and an expert appraiser noted there was an accelerated depreciation in the vehicle’s remaining market value.  ICBC denied this claim arguing the vehicle is worth no less than it would be even without such a significant crash.  In rejecting ICBC’s position and ordering damages paid recognizing the accelerated depreciation CRT Vice Chair Andrea Ritchie provided the following reasons:

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ICBC Ordered To Pay Damages for Accelerated Vehicle Depreciation Following Significant Crash

As discussed numerous times on this site BC law recognizes that if property is damaged by the wrong doing of another and if that property is then worth less even after all reasonable repairs have been made the ‘accelerated depreciation’ can be recovered against the at fault party.

ICBC often refuses to recognize accelerated depreciation claims following collisions and forces crash victims to litigate these claims.   Reasons for judgement were published today by BC’s Civil Resolution Tribunal with such a fact pattern.

In today’s case (Peterson v. Texmo) the Applicant’s vehicle sustained over $10,000 in damages in a crash the Respondent was at fault for.  The Applicant asked ICBC to compensate him for his vehicle’s accelerated depreciation which reached several thousand dollars but the insurer refused to recognize this loss raising several arguments which missed the mark such as suggesting that if the vehicle was not sold there is no loss and that the vehicle was imported from the US which if resold there may not have a similar market loss.  In rejecting these arguments and finding that the applicant was entitled to damages for accelerated depreciation Tribunal Member David Jiang provided the following reasons:

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Motorist Ordered to Pay $1,805 for “Accelerated Depreciation” Following Collision With Porsche

As discussed numerous times on this site BC law recognizes that if property is damaged by the wrong doing of another and if that property is then worth less even after all reasonable repairs have been made the ‘accelerated depreciation’ can be recovered against the at fault party.

In the first Accelerated Depreciation claim heard by BC’s Civil Resolution Tribunal such damages were awarded to the owner of a Porsche that was damaged in a collision.

In today’s case (Lai v. Leung) the Applicant’s vehicle was struck by the Respondent who admitted fault of the crash.  The impact caused damages which cost over $6,500 to repair.   The Applicant consulted with an appraiser who provided evidence that as a result the vehicle will be worth less on the open market.  ICBC refused to recognize this.  Both ICBC and the at fault motorist were sued but the tribunal noted that ICBC was not a correct party in such a dispute and the claim is properly brought against the at fault motorist with ICBC simply playing the role of their insurer.

In siding with the Applicant and accepting the expert opinion of the Fournier Auto Group Tribunal Member Trisha Apland provided the following reasons in ordering that $1,805 in damages for Accelerated Depreciation be paid:

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CRT Dismisses Accelerated Depreciation Claim Because Applicant Named Wrong Party

Reasons for judgement were recently published by BC’s Civil Resolution Tribunal (“CRT”) dismissing a claim for accelerated depreciation following a serious vehicle collision because the applicant named the wrong party.

In the recent case (Liang v.  ICBC) the Applicant’s  vehicle was involved in a collision where it sustained over $17,000 in damages.  When the vehicle was repaired the Applicant believed its market value was compromised with an accelerated depreciation of several thousand dollars.

Instead of suing the at fault motorists she sued ICBC who presumably were their insurance company.  The CRT dismissed the claim finding that the wrong party was sued.  Legally it is true that ICBC would not be contractually liable to pay for accelerated depreciation to a plaintiff as that is a tort claim and such cases do need to be brought directly against negligent motorists, not their insurance company.  Insurers do, however, pay damages for accelerated depreciation once their insured at fault motorist is held liable.

Interestingly the CRT refused to substitute the motorists in for ICBC finding that since the limitation period expired it would be prejudicial to do so.  It is a bit difficult to follow this logic, assuming ICBC was the motorists insurer, as they are the ones who would ultimately be dealing with the claim in any event once the correct parties were named.  The Applicant appeared reluctant to name the correct party at the outset which is equally hard to understand.  It is worth noting that the BC Supreme Court can and regularly does allow the addition/substitution of parties after the expiration of a lawsuit and does so quite frequently.  In any event below are the reasons Vice Chair Andrea Richie provided in dismissing the claim:

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ICBC Ordered To Pay “Accelerated Depreciation” Damages Following Vehicle Collision

As I’ve previously written, when a vehicle is involved in a crash and is then repaired it is generally worth less than it would be had it not been damaged.  The reason for this is quite simple.  When a buyer is looking to purchase a used vehicle, those that have previously been damaged and repaired carry a stigma.  This stigma generally results in a lower resale value.

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$20,700 "Accelerated Depreciation" Claim Succeeds Following Vehicle Damage in Crash

Reasons for judgement were published this week by the BC Provincial Court ordering a Defendant (insured by ICBC) to pay over $20,000 in vehicle depreciation after a crash.
In the recent case (Chiang v. Kunar) the Plaintiff purchased a Mercedes for just over $68,000.  The following year the Plaintiff was involved in a crash caused by the negligence of the Defendant.  The crash caused over $34,000 in repair costs leaving the vehicle far less valuable after repairs.  The Plaintiff sued to recover the value of this accelerated depreciation but ICBC argued that there was no loss.  In siding with the Plaintiff, who to his credit succeeded in litigation while self represented, The Honourable Judge K. Arthur-Leung provided the following reasons:

      I am satisfied that the Claimant has met the burden of proof, and that this low to mid-level luxury vehicle was indeed a customized vehicle that was in the high end of its own category of Mercedes Benz, and sustained accelerated depreciation.  The Bill of Sale shows thousands of dollars of extras that he ordered for this Vehicle.  It was a rare vehicle at the time that it was initially in the Vancouver market, and the experts both testified that it remains an in demand vehicle if it was not in an accident.

In addition, the decision of Rutter v. Adams, 2016 BCSC 554 (CanLII) at paragraph 314 relies upon Signorello v. Khan, 2010 BCSC 1448 (CanLII) to include quantification that “…such losses can include a ‘loss of use and the inconvenience of having to return the vehicle on several occasions’.”  In addition, in Cummings v. 565204 BC Ltd., 2009 BCSC 1009 (CanLII), the Court relied upon Reinders v. Wilkinson, 1994 CanLII 2527 (BC CA)1994 CanLII 2527 (BCCA) that it is not necessary for the party to sell the vehicle in order to succeed in a claim for accelerated depreciation.  The damage sustained to this Vehicle was not merely cosmetic and required significant repair, to wit it remains outstanding with ongoing operational and mechanical problems…

THEREFORE THIS COURT ORDERS JUDGMENT TO THE CLAIMANT AGAINST THE DEFENDANTS, JOINTLY AND SEVERALLY AS FOLLOWS:

a)            The amount of $20,700.00, for accelerated depreciation of the Vehicle ($18,000.00 plus 15% tax);

b)            Interest on the sum of $20,700.00 as of February 26, 2015, in accordance with the Court Order Interest Act;

c)            The amount of $1,990.08 in general damages as claimed by the Claimant;

d)            Interest on the sum of $1,990.08 as of May 9, 2016, in accordance with the Court Order Interest Act;

e)            The amount of $472.50 for the cost of the Coast Auto Appraisal Report;

f)            Court attendance fees of Mr. Sparrow of Coast Auto Appraisal in the amount of $1,155.00;

g)            Court filing fees in the amount of $156.00; and

h)            Service fees in the amount of $30.00.

Accelerated Depreciation Claim Succeeds From Crash Causing $18,000 in Vehicle Damage

Reasons for judgement were released this week by the BC Supreme Court, Vancouver Registry, awarding a Plaintiff damages for accelerated vehicle depreciation following a significant collision.
In this week’s case (Pan v. Shihundu) the Plaintiff was involved in two collisions, the first causing significant vehicle damage resulting in over $18,000 of repair costs.  The Plaintiff was injured and sued for damages.  Among these was a claim for ‘accelerated vehicle depreciation’ arguing that the vehicle’s market value was deflated due to the Defendant’s fault.  ICBC opposed this claim however the Court sided with the Plaintiff.  In awarding damages for this loss Mr. Justice Punnett provided the following reasons:
160]     The plaintiff purchased the 2004 BMW M3 for $30,000 US in March 2008. As noted above, the vehicle required $18,421 in repairs following the First Accident. After that accident the plaintiff attempted to sell the BMW. He listed it on Craigslist for three months at an asking price of $27,000. It was his evidence that he had a few inquiries but no offers after advising prospective buyers of the damage caused by the First Accident. He made similar attempts to sell it in 2011 but received no response. As a result, he still owns and drives the vehicle.
[161]     The plaintiff provided an expert report from Carey Scarrow, who was qualified as an expert in the field of automotive appraisals and automotive collision repairs. He opined that as a result of the 2009 accident the vehicle sustained an accelerated depreciation of $4,000 due to the stigma associated with the BMW having been in the accident.
[162]     In examining the vehicle Mr. Scarrow noted uneven body panel alignment in the front of the vehicle and other minor deficiencies including flaws in the refinished body panels with inconsistent coating thickness. He commented that the overall repair quality was of acceptable industry standards for the calibre of car but not representative of its previous pre-accident factory standard.
[163]     Mr. Scarrow noted that it was mandatory for the seller to declare any damage over $2,000 to a prospective purchaser. He stated that the repaired areas will deteriorate at varying rates, making the repairs more evident as the vehicle ages.
[164]     He then provided his opinion that the collision repairs resulted in a value of $15,000, an accelerated depreciation of $4,000 when compared with an estimated value of $19,000 for a BMW of that make, age, and mileage but without the accident damage. In his report Mr. Scarrow indicated that he based this opinion on his inspection of the vehicle itself, references to the Sanford Gold Book, July 2013 edition (a used car valuation guide), as well as what he referred to as “local market comparable research.” In cross-examination he expanded somewhat on this methodology, noting that he relies on his years of experience in used car valuation and sales to determine the valuation numbers. In this case he said that he also posted the car for sale for a period of three to four days and gauged the response from potential buyers. He noted that potential buyers for vehicles of this type are particularly “fussy” about the details of previous damage and repairs.
[165]     The plaintiff relies on Signorello v. Khan, 2010 BCSC 1448, and Cummings v. 565204 B.C. LTD., 2009 BCSC 1009. Signorello stands for the proposition that a vehicle need not be sold in order to demonstrate an accelerated depreciation loss (para. 29); see also Cummings, at para. 73.
[166]     The defendants acknowledge that claims for accelerated depreciation are good in law. However, they submit there is a heavy burden on a plaintiff to adduce sufficient evidence to prove that accelerated depreciation has actually taken place. They rely on Miles v. Mendoza, 1994 CanLII 419 (B.C.S.C.), and Burrard Import Ltd. v. Budget Rent-A-Car of B.C. Ltd, 2001 BCPC 75. In Miles, the court noted that “difficulties of proof” arise where the car is not sold after the accident, as the depreciating effect of the accident declines over time. The court also said that expert evidence of that only spoke to the general “stigma” attaching to damaged vehicles was not sufficiently persuasive proof to award damages for accelerated depreciation: “it cannot be “assumed”, by virtue of the occurrence of an accident requiring extensive repairs, that a properly repaired vehicle has suffered accelerated depreciation” (para. 40).
[167]     Burrard followed Miles in finding that the evidence did not meet the necessary standard given the claimant’s expert’s opinion amounted to no more than a simple proposition and as a result was not the type of persuasive evidence contemplated by the jurisprudence.
[168]     The defendants submit that the plaintiff must prove that the accelerated depreciation actually occurred by adducing evidence that goes over and above the simple proposition that a car which has been in an accident, even though properly repaired, carries a stigma. They say that in this case the plaintiff’s evidence does not go beyond asserting the existence of such a stigma.
[169]     I cannot accept this submission, for two reasons. First, in my view, the evidentiary standard as described in Miles has not been applied quite so strictly in recent decisions. In Cummings, for example, Madam Justice Gerow awarded $7,600 in damages for accelerated depreciation. There the evidence consisted of an automobile valuation expert’s opinion that the plaintiff’s vehicle had suffered an accelerated depreciation of 20% following the accident. There is no comment in the decision as to the factual basis for this opinion and no suggestion that it went beyond the expert’s experience of the “stigma” in the marketplace. The owner had also attempted to trade the vehicle in but was informed by the dealership that they did not accept trade-ins on vehicles with more than $5,000 in damage.
[170]     In Signorello the car was an extremely rare exotic high-performance luxury sports car, manufactured by Mercedes-Benz. The valuation expert set a value based on conversations he had with various Mercedes-Benz dealers in the province. The court identified some concerns with this evidence, noting that the defendant had argued that the expert’s opinion was based on hearsay and opinion evidence itself. Justice Grauer then said at para. 25:
[25]      … the starting point for any vehicle appraisal is the Canadian Black Book, a guide to the wholesale value of used vehicles in Canada relied upon by dealers across the country. This car is so rare, however, that it does not appear in theBlack Book. Of course the figures in that book could also be described as opinion evidence … In the particular circumstances of the case, it is my conclusion that it was not an inappropriate way for Mr. Cogbill to approach the problem, although it would have been preferable had he included the specifics of his conversations. As it was, he did indicate the dealers whom he consulted, …
[171]     From this I take that the expert may rely on the Black Book or similar valuation guides in coming to an opinion as to the value of the vehicle. It also suggests that the “difficulties of proof” that may arise if the car is not sold can be overcome by an expert’s opinion.
[172]     Second, even if one accepts that the standard from Miles still applies, I am of the view that the evidence tendered here does go beyond a “bare” opinion that the car has suffered depreciation due to a “stigma.” Mr. Scarrow based his valuation on a long history of appraising cars, including BMWs. He also relied on the Gold Book, a valuation guide, and market research that he described in cross-examination. The plaintiff also provided evidence that he had attempted to sell the vehicle at a reduced price following the accident and received no offers.
[173]     I conclude that the plaintiff’s evidence is sufficient to establish accelerated depreciation in value for the BMW. I accept Mr. Scarrow’s figures and award damages of $4,000.
 

Hearsay of Reduced Vehicle Value Not Enough to Prove Accelerated Depreciation

I have previously discussed the fact that accelerated vehicle depreciation is a recognized damage in BC.  Reasons for judgement were released this week by the BC Court of Appeal addressing such a claim noting something more than hearsay is required to prove the loss.
In this week’s case (Kapelus v. Hu) the Plaintiff was injured in a 2006 collision.  She proceeded to trial and was awarded damages for her injuries but her claim for accelerated vehicle depreciation was dismissed.  The Plaintiff presented evidence of offers that others provided her for the purchase of the vehicle.  The Court of Appeal noted that if this was the only evidence then there was no error in dismissing this aspect of her claim.  The Court provided the following reasons:
24]         Finally, I should say that the argument advanced by Mrs. Kapelus, that the judge erred in rejecting evidence of the loss in value of her vehicle, based solely on her report of offers to purchase the vehicle, is without merit.  The judge ruled that Mrs. Kapelus’ evidence, that third parties had been prepared to purchase her car at a certain price prior to the accident, was hearsay.  I accept this ruling: it is hearsay and it is not rendered admissible under the business records exception in the Evidence Act, R.S.B.C. 1996, c. 124.

Doing it Yourself – Suing for Accelerated Vehicle Depreciation in BC Small Claims Court


As I’ve previously written, when a vehicle is involved in a crash and is then repaired it is generally worth less than it would be had it not been damaged.  The reason for this is quite simple, when a buyer is looking to purchase a used vehicle, those that have previously been damaged and repaired carry a stigma.  This stigma generally results in a lower resale value.   You can click here to watch CBC’s Marketplace investigation highlighting this reality.
Although Defendants often are reluctant to acknowledge such a loss, the law in BC recognizes this lost value.  If your vehicle was damaged due the the actions of others you can sue to recover your damages for “accelerated depreciation“.
Often times the cost of hiring a lawyer to advance an accelerated depreciation claim can outweigh the amount of the recovery making it an unrealistic option.  So what can you do?
In BC the Small Claims Court has a current limit of $25,000.   This ceiling is adequate to cover all but the most serious of accelerated depreciation claims.  If you did not suffer a personal injury in your crash and your only loss is accelerated vehicle depreciaton bringing a self represented action in Small Claims Court is a viable option.
The Provincial Court has a useful website explaining the basics of starting a lawsuit.  You can click here to access information about filing your claim.
In addition to this, here are some of the key points to be aware of before getting started:
1.  The claim needs to be against the at-fault party.  The insurance company of the at-fault driver (such as ICBC) is the wrong party to sue.  Typically the action is brought against the driver of the at-fault vehicle along with the registered owner who is ‘vicariously liable‘ for damage caused by people who operate their vehicle with their consent.
2.  The Notice of Claim must describe a ’cause of action’.  In other words you have to sue for a recognized wrong.  Typically car crash   cases deal with ‘negligence’ that is, the at fault motorist caused the crash by careless driving.
3.  The resulting harm needs to be caused by the negligent action.  The Pleadings should reflect that the accelerated depreciation was caused as a result of the at-fault driving of the Defendant.
4.  The loss needs to be proven with admissible evidence.  It is not good enough to baldly suggest that a vehicle sustained an accelerated depreciation.  Some vehicles do not sustain any loss in value following a collision.  It is a good idea to retain a qualified expert to examine the vehicle, the repairs done and to then comment on what the vehicle’s lost value is compared to its natural depreciation at the time of the collision.  The expert should be prepared to come to court to testify as to his opinion and the expert’s report needs to be served in compliance with the Rules of Court.   While it does cost money to retain an expert it is worth keeping in mind that the Small Claims Court does have the discretion to order reimbursement of reasonable disbursements if the claim is successful making such expenses a worthwhile investment.
5.  You must bring your lawsuit in time.  If you wait beyond the applicable limitation period before starting your lawsuit the claim will be dismissed.
6.  If you have personal injuries but fail to sue for these and only claim for accelerated depreciation you may be barred from bringing a personal injury action later.  It is important to claim damages for all losses resulting from the crash.
 
 

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ERIK
MAGRAKEN

Personal Injury Lawyer

When not writing the BC Injury Law Blog, Erik is the managing partner at MacIsaac & Company, based in Victoria, B.C. He is also involved with combative sports regulatory issues and authors the Combat Sports Law Blog.

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