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:

14.   The applicants say that Dual Mechanical or, in the alternative, Gold Key, is entitled to damages for accelerated depreciation. The applicants say that the terms of their lease result in Dual Mechanical being responsible for any deficit resulting from a sale to a third party at the end of the lease term. According to the applicants, the Suburban’s value is decreased by $4,400 in accelerated depreciation.

15.   ICBC says that the applicants’ claim for accelerated depreciation is not established by the evidence and that Dual Mechanical does not have a claim for damages in any event.

16.   The courts have held that a party does not have a claim for accelerated depreciation on a vehicle to which they have no claim of title (see, for example, Nguyen v. Johnson, 2007 BCSC 388). As noted, Dual Mechanical is the lessee and Gold Key is the lessor and owner of the Suburban.

17.   Under the terms of the lease, the Suburban’s title remains with Gold Key, which retains the right to sell the vehicle at the end of the lease. Notwithstanding the lease terms between the applicants, Gold Key will bear any loss associated with a decreased sale price at the end of the lease term. On this basis, I find that Gold Key is entitled to claim damages for accelerated depreciation.