Legal case update | Premier Taxis v Mann Limbu

We were instructed by Tesco Underwriting to defend a credit hire claim brought by a Taxi Company

Executive Summary

Claim for credit hire charges of a replacement taxi dismissed due to the owner of the vehicle, and proprietor of a taxi company, not having actually incurred any of the claimed charges.

Facts

We were instructed by Tesco Underwriting to defend a credit hire claim brought by a Taxi Company (“Premier Taxis”) in the sum of £21,225.33. Premier Taxis had hired a replacement plated taxi from Andy’s of Dover for 63 days at £336.91 per day. The case was defended on a number of issues:

  1. Locus standi to bring the claim as the hire agreement was in the name of their driver (Ian Kosh) and not the taxi company;
  2. The hire contract had not been formed at arms length as the vehicle ‘hired’ to the claimant company was already on their fleet at the time of the accident and throughout the claimed period of hire;
  3. Need to hire at all and any loss, if it could be proved, would be utilisation rates as per Beechwood v Hoyer, the claimant company having a large fleet of taxis; and
  4. Loss of profit as per A-Line Taxis v Ward and the Weightmans case of Ali v Bayliss.

The Issues

After the defence and Directions Questionnaires were filed the court listed the matter for a Case Management Conference. We made robust submissions on the disclosure required from the claimant which the court agreed. Specific reference by the Judge was made to the defence and that the claimant, if it could be proved would not achieve more than loss of profit at trial provided it could get over the locus standi hurdle.

The claimant’s barrister conceded that the vehicle was rented out to a driver (Ian Kosh) for a weekly settle fee. The claimant was ordered to disclose

  • a list of every vehicle within their custody and control on the date of the accident and throughout the duration of hire to include their utilisation costs,
  • a copy of the agreement between Premier Taxis and Ian Kosh for the use of the accident damaged vehicle to include the fee paid for it use,
  • certified profit and loss accounts for 3 months prior to the start of hire and those covering the full period of hire,
  • 3 years of tax returns to include the tax year in which the accident occurred.

We requested that the claimant serve a reply to the defence dealing with each issue raised. Unfortunately, although the Reply was served, it didn’t deal with the substantive elements of the defence referred to above.

Witness statements were served from the claimant’s driver (Ian Kosh) and the Director of Premier Taxis. Again the statements did not deal with the above points.

The matter proceeded to trial on 4 January 2019 and the claim was dismissed on the locus standi argument. The Judge accepted that the loss (the credit hire charges) had not been incurred by Premier Taxis but by their driver, as the agreement was in his name and had been signed by him. The driver admitted on cross examination that he had no idea about the type of document he was signing and just thought that the vehicle he was given was another of the vehicles Premier Taxis owned and which he paid a weekly settle fee to use. All of this had been pleaded in the defence and numerous requests were made to the claimant’s solicitors (Waring & Co) to respond to the issues raised. Instead, they chose to ignore reasonable requests. As a result of defeating the substantive claim presented, and the claimant only recovering £714 for recovery and storage charges and Small Claims Track fixed costs and disbursements of £1,700 (against the £18,000 originally claimed).

Comment

This is another example in the long running battle to determine the correct measure of damages where a claim for credit hire charges is presented by a company. As is known, Beechwood v Hoyer held that where a claim is brought for credit hire charges under the umbrella of special damages, the damages being are assessed at the cost of putting an unused fleet vehicle into use (utilisation cost). Where the company making the claim is a taxi business (as in this matter) and it is not possible to utilise a fleet vehicle, or no fleet vehicles were available, then the loss should be assessed by reference to loss of profit in line with the decisions in A-Line Taxis v Ward and the Weightmans case of Ali v Bayliss.

As this particular matter shows, each case can turn on its individual facts. Where the claimant is a taxi business, attention should be paid to who has signed the hire agreement and whether they had authority to do so on behalf of the company. Beechwood v Hoyer clarified the nature of documentation that should be disclosed in support of any hire claim presented to enable an assessment of damages to proceed. The court will need to determine whether credit hiring a replacement vehicle was the most reasonable way to mitigate loss (it very rarely is) if there are no issues with enforceability and also how to assess the loss if there is a fleet of vehicles available. A-Line Taxis v Ward and the Weightmans case of Ali v Bayliss are useful authorities to be relied upon, where there is no fleet of vehicles or a fleet is fully utilised, to show that the loss be calculated by reference to loss of profit.

With larger companies their financial records are often available for public viewing on Companies House, so an assessment of the potential loss of profit can be made and a strong early Part 36 offer made, if needed. Claims such as these are not common but are often of high value. It is essential to reduce a client’s exposure to the claimant’s solicitor’s costs as these claims are not subject to qualified one way costs shifting if presented by the taxi company.

 

If you have any questions or would like to know more about our legal update, please contact Charlie Williams, Partner on 0151 242 7961, or Charles.williams@weightmans.com or Adam Skelland, Solicitor on 0151 242 6857, or adam.skelland@weightmans.com

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