Date Issued: October 1, 2020

File: VI-2020-002645

Type: Motor Vehicle Injury

 

Civil Resolution Tribunal

Indexed as: Lai v. Leung, 2020 BCCRT 1111

BETWEEN:

KAM HO LAI

APPLICANT

AND:

CHIU YIN LEUNG and INSURANCE CORPORATION OF BRITISH COLUMBIA

RESPONDENTS

 

REASONS FOR DECISION
Tribunal Member:	Trisha Apland

 

INTRODUCTION

1.      This dispute is about a motor vehicle accident that took place on April 30, 2019 in Richmond, British Columbia.

2.      The applicant, Kam Ho Lai, was waiting at a gas station to pump gas into his 2009 Porsche Carrera 4S. The respondent, Chiu Yin Leung, backed his vehicle into the Porsche’s driver’s side door, causing vehicle damage. Mr. Lai also says he was injured as a result of the accident.

3.      The respondent, the Insurance Corporation of British Columbia (ICBC), insures both drivers. 

4.      Mr. Lai seeks $2,525 in damages for accelerated depreciation and $750 in dispute-related fees and expenses. Accelerated depreciation means a loss in a vehicle’s value beyond its natural depreciation.

5.      The respondents admit Mr. Leung was at fault for the accident but deny that the Porsche lost any value. They ask that Mr. Lai’s claims be dismissed.

6.      The applicant is self-represented. The respondents are jointly represented by an ICBC adjuster.

JURISDICTION AND PROCEDURE

7.      These are the formal written reasons of the Civil Resolution Tribunal (CRT). The CRT has jurisdiction over motor vehicle injury disputes, or “accident claims”, brought under section 133 of the Civil Resolution Tribunal Act (CRTA). Section 133(1)(c) of the CRTA and section 7 of the Accident Claims Regulation (ACR) give the CRT jurisdiction over the determination of liability and damages claims, up to $50,000.

8.      Section 2 of the CRTA states that the CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. In resolving disputes, the CRT must apply principles of law and fairness, and recognize any relationships between parties to a dispute that will likely continue after the dispute resolution process has ended.

9.      Section 39 of the CRTA says that the CRT has discretion to decide the format of the hearing, including by writing, telephone, videoconferencing, email, or a combination of these. I find that I am properly able to assess and weigh the documentary evidence and submissions before me without an oral hearing. Bearing in mind the CRT’s mandate that includes proportionality and a speedy resolution of disputes, I decided to hear this dispute through written submissions.

10.   Section 42 of the CRTA says that the CRT may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law. The CRT may also ask questions of the parties and witnesses and inform itself in any other way it considers appropriate.

Preliminary Matters

Claims Against ICBC

11.   Mr. Lai brought this claim under the CRT’s jurisdiction for accident claims set out in CRTA section 133. I find Mr. Lai’s claim is in tort, for negligence.

12.   In Kristen v. ICBC, 2018 BCPC 106, the court considered a claim against ICBC, regarding liability. The court held at paragraph 8 that “[t]he proper defendant in an action to determine liability in a motor vehicle accident is the other driver, not ICBC, although ICBC is required to be served with a copy of the Notice of Claim”. I find the same applies to the CRT.

13.   In Liang v. ICBC, 2020 BCCRT 192, a CRT Vice Chair found that tort claims for damages in accelerated depreciation are properly brought against the party who allegedly caused the damage. While prior CRT decisions are not binding on me, I agree with the Vice Chair’s reasoning in Liang.

14.   I find that Mr. Lai’s claim for damages in accelerated depreciation is properly against the other driver, Mr. Leung. I find ICBC is not the proper defendant in this tort claim. I dismiss Mr. Lai’s claims against ICBC.

Fault

15.   Mr. Lai asks the CRT to make a finding on fault. As mentioned above, the respondents admit that Mr. Leung is 100% at fault for the collision. There is no dispute that Mr. Leung reversed or backed into Mr. Lai’s parked Porsche. I find that Mr. Leung is 100% liable for the collision.

Personal Injury Claim Resolution

16.   In his application for dispute resolution, Mr. Lai claimed $5,229.00 in damages for personal injury. During the CRT’s case management phase, the parties reached an agreement and Mr. Lai withdrew the personal injury claim. So, I find the personal injury claim is no longer before me here.

ISSUES

17.   The remaining issues in this dispute are:

a.    Is Mr. Lai entitled to damages for alleged accelerated depreciation? If so, what is the value of those damages?

b.    Is Mr. Lai entitled to the claimed $750 as reimbursement for dispute-related fees and expenses?

BACKGROUND

18.   In a civil claim such as this, Mr. Lai, as the applicant, bears the burden of proof on a balance of probabilities. While I have read all of the parties’ submissions, I have only addressed the evidence and arguments to the extent necessary to explain my decision.

19.   As mentioned, Mr. Lai’s 2009 Porsche was damaged on April 30, 2019 when Mr. Leung’s vehicle backed into it. The Porsche mainly sustained damage to the driver’s door front and the left quarter panel. A Porsche and ICBC certified collision facility, Richmond Auto Body Ltd. (RAB), repaired the Porsche and replaced the panels using original manufacturer parts. The total repair cost was $6,546.37 including tax. At the time of the collision, the Porsche had about 31,897 kilometres on the odometer, no prior collisions, and was in good condition. The Porsche did not suffer any mechanical or structural problems as a result of the accident. These facts are not disputed.

20.   There is no issue with the quality of the repairs. I find the repairs likely restored the Porsche to its pre-accident condition. There is no evidence to suggest otherwise.

Parties’ Positions

21.   Mr. Lai says that despite the repairs, the Porsche automatically lost resale value. Mr. Lai argues that a buyer would not purchase his Porsche if they had a choice between it and an identical accident-free Porsche. Mr. Lai asserts that he would have to sell his Porsche at a reduced price and as a result, he has not sold it. He says it is also hard to “buy/sell” his Porsche because there are not many on the market. He claims $2,525 in damages for accelerated depreciation.

22.   The respondents deny that the Porsche’s value was reduced by the collision. They say that accelerated depreciation cannot be assumed on the mere fact that the Porsche was in a collision. They say the Porsche is an out-of-province vehicle with low mileage. They argue that the Porsche is a “rarity” and it suffered no reduced marketable value due to minor damage that was fully repaired. The respondents also say that Mr. Lai still owns the Porsche and suffered no actual financial loss. Further, the respondents say there is no supported or documented formula to calculate accelerated depreciation.

ANALYSIS

The Law

23.   The burden is on Mr. Lai to prove the Porsche suffered a reduction in its value because of the April 30, 2019 collision. The proper measure of damages is the difference in the Porsche’s value immediately before and immediately after the accident (Miles v. Mendoza, 1994 CanLII 419 (BCSC)). I agree with the respondents that accelerated depreciation cannot be assumed simply by virtue of the Porsche being in a collision that required repairs. The courts have held that the loss must be proven by appropriate evidence on a balance of probabilities (see Lee v. Hawkins, 1990 CanLII 444 (BCSC), Barrie Brown Pontiac Buick GMC Ltd. v. Insurance Corp. of British Columbia, [1999] 16 C.C.L.I. (3d) 243 (BCPC), and Chiu v. Kumar et al, 2006 BCPC 345).

24.   However, the law does not require Mr. Lai to demonstrate the loss by selling the Porsche. It is enough for him to establish that the accident reduced the Porsche’s value (see Cummings v. 565204 B.C. Ltd., 2009 BCSC 1009 and Signorello v. Khan, 2020 BCSC 1448).

25.   I have read the court and CRT decisions submitted by the parties in support of their positions. I find these prior cases were decided on the basis of different facts. They deal with different damaged vehicles in other market conditions. I find the question of the Porsche’s accelerated depreciation, if any, is a fact specific analysis and it must be made on the evidence before me. For this reason, I have not summarized the decisions submitted by the parties’ apart from citing the relevant legal principles above.

Valuation Evidence and Findings

26.   The courts have relied primarily on expert opinion in deciding claims of accelerated depreciation. I find the same applies to the CRT. I find a vehicle’s valuation requires technical knowledge that is beyond common understanding and requires expert opinion (see Bergen v. Guliker, 2015 BCCA 23).

27.   Under CRT rule 8.3(3), the CRT may accept expert opinion evidence from a person the CRT decides is qualified by education, training, or experience to give that opinion.

28.   Mr. Lai submitted a “Preliminary Accelerated Depreciation Report” by Robert Fournier from Fournier Auto Group Ltd. (Fournier Report). Mr. Fournier’s title is “Material Damage Appraiser”. His credentials as stated in the Fournier Report include working as an ICBC vehicle valuation arbitrator since 2013 and in the car sale industry since 2000. I am satisfied that Mr. Fournier is qualified to provide an opinion on the Porsche’s valuation. The respondents do not dispute the admissibility of the Fournier Report, though they dispute the reliability of Mr. Fournier’s opinion, which I discuss below. I accept the Fournier Report as expert evidence.

29.   The respondents submitted a “Vehicle Valuation Report” by “Mitchell WorkCenter, Total Loss” (Mitchell Report). The Mitchell Report states that the vehicle valuation methodology was designed and built in conjunction with the company “J.D. Powers”. However, the Mitchell Report does not state who authored the report. Therefore, I am not able to assess their credentials. I find the Mitchell Report does not strictly meet CRT rule 8.3(2) for expert opinion evidence. The Mitchell Report does not specifically discuss the issue of accelerated depreciation. Instead, the Mitchell Report provides a valuation for the Porsche based on listing prices for comparable vehicles that “most closely resemble the totaled vehicle”. However, the Porsche was not a totaled vehicle. The Mitchell Report does not say whether it specifically considered the impact of the April 30, 2019 collision or the actual damage and repairs. Without this information, I find the Mitchell Report is unhelpful in deciding the accelerated depreciation issue and I put no weight on it.

30.   In addition to the expert reports, the parties submitted advertisements for the same year and make of Porsche that show a range of asking prices in the Canadian market. However, I find that I cannot determine Mr. Lai’s Porsche’s value or whether it suffered accelerated depreciation from these advertisements. As mentioned, I find a vehicle’s valuation requires specialized expertise. I do not have such expertise as a CRT member.

31.   Mr. Lai argues that the salesperson from the Porsche dealership in Langley, told him on a “rough estimate” that a Porsche would be expected to depreciate by 50% of the cost of repairs. Mr. Lai did not provide a statement from the salesperson and this was not the opinion of his own expert, Mr. Fournier. I put no weight on this hearsay assertion about the expected post-collision depreciation of a Porsche.

32.   I turn now to the Fournier Report. Mr. Fournier stated that he used his 15 years of expertise helping consumers purchase vehicles to research and determine the pre- and post-collision fair market value for the Porsche. His stated observation in dealing with similar cases is that vehicles are commonly discounted from 5% to 25% of the retail price depending on the amount and type of damage. However, Mr. Fournier concluded that Mr. Lai’s Porsche depreciated less than this amount. Mr. Fournier stated that this particular Porsche’s value depreciated by about 2.5% ($1,805) to 3.5% ($2,525) as a result of the collision and resulting repairs. To reach his opinion, Mr. Fournier said he considered, among other things, the Porsche’s specifications, mileage and overall condition, the nature of the damage and repairs described in the RAB estimate, the market conditions, his own experience, and findings in 630 other accelerated depreciation reports performed by Fournier Auto Group. The Fournier Report’s raw data was included as evidence in an Excel document.

33.   Mr. Fournier’s opinion states that the Porsche had no out-of-province declarations. I find his assumption was incorrect. There is no dispute that the Porsche was imported into BC in 2012. The respondents argue that the Fournier Report should not be relied on because of this incorrect assumption. They assert that the value of vehicles from Ontario are negatively adjusted by 4% to 6% when imported to BC because of stigma around rust and the effect of highly salted roads in eastern provinces. However, the respondents provided no evidence to support their assertion about the negative adjustment. I am not prepared to accept the respondents’ unsupported assertion that all Ontario vehicles are negatively adjusted by default or that such an adjustment applies to Mr. Lai’s Porsche. There is also no evidence that Mr. Lai’s Porsche had rust that would reduce its resale value.

34.   Mr. Fournier relied on photographs and the RAB repair estimate in forming his opinion. While Mr. Fournier did not inspect the Porsche personally, I find his opinion on accelerated depreciation is still useful. I am persuaded by Mr. Fournier’s years of experience in valuating and selling vehicles that he has knowledge of the used car market and the impact of the collision on the Porsche’s value. I find he considered factors specific to Mr. Lai’s Porsche and the market when assessing it. There is also no expert evidence directly contradicting Mr. Fournier’s opinion on the accelerated depreciation.

35.   On balance, I accept Mr. Fournier’s opinion on the Porsche’s valuation and its accelerated depreciation. I find it more likely than not that the collision caused the repaired Porsche to depreciate quicker than it otherwise would have, at a rate of about 2.5% to 3.5%. I find Mr. Lai has not proven that his loss was more than the lower end of this continuum. Based on the Fournier Report valuation, I find that Mr. Lai is entitled to a total of $1,805 in damages for accelerated depreciation.

36.   I find Mr. Leung must pay Mr. Lai a total of $1,805 in damages.

INTEREST, FEES, AND EXPENSES

37.   Mr. Lai claims interest under the Court Order Interest Act (COIA). Section 2(a) of the COIA says that interest does not apply to a pecuniary (monetary) loss arising after the date of the order. Since Mr. Lai has not yet sold the Porsche, I find he has not yet suffered a pecuniary loss. I dismiss Mr. Lai’s pre-judgment interest claim.

38.   Under section 49 of the CRTA, and the CRT rules, a successful party is generally entitled to recover their CRT fees and dispute-related expenses. As Mr. Lai was partially successful, I find he is entitled to reimbursement of $87.50, which is half of his paid CRT fees. Since I dismissed Mr. Lai’s claim against ICBC, I find ICBC is entitled to reimbursement from Mr. Lai for $25 in paid CRT fees. Mr. Leung was primarily unsuccessful. I dismiss Mr. Leung’s claims for reimbursement of CRT fees.

39.   Based on the receipt in evidence, I find Mr. Lai paid $525 for the Fournier Report with a consulting fee. I relied on the Fournier Report in reaching my conclusion on accelerated depreciation, and find it was a reasonable expense in the circumstances. I find that Mr. Leung must pay Mr. Lai $525 for the report with consulting fee.

40.   The parties did not claim any other dispute-related fees or expenses.

ORDERS

41.   Within 30 days of the date of this decision, I order Mr. Leung to pay Mr. Lai a total of $2,417.50, broken down as follows:

a.    $1,805 in damages,

b.    $87.50 in CRT fees; and

c.    $525 in dispute-related fees and expenses.

42.   Mr. Lai is also entitled to post-judgment interest under the COIA.

43.   Within 30 days of the date of this decision, I order Mr. Lai to pay ICBC a total of $25 in CRT fees.

44.   Mr. Lai’s claims against ICBC are dismissed.

45.   Under section 57 and 58 of the CRTA, a validated copy of the CRT’s order can be enforced through the Supreme Court of British Columbia or the Provincial Court of British Columbia if it is under $35,000. Once filed, a CRT order has the same force and effect as an order of the court that it is filed in.