IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]           The Claimant, Shih Ning Denny Chiang, has filed a claim against the Defendants arising out of a motor vehicle accident on February 26, 2015, in Richmond, British Columbia, wherein a vehicle owned by the Defendant, Ravinder Sharma, and driven by X Naresh Kumar, caused damage to the vehicle owned and operated by the Claimant.  Liability for the accident is not in dispute, and the Claimant has resolved the personal injury portion of the claim against the Defendant.  The resulting crash caused $34,439.00 in damages to the Claimant’s 2014 Mercedes Benz CLA45 (“the Vehicle”).  The Claimant seeks accelerated depreciation, the cost of the Appraisal, and lost personal time against the Defendants.  The pleadings of the Defendants deny any accelerated depreciation, and further plead that the loss was as a result of the Claimant.  At trial, however, the negligence claim was not advanced by counsel for the Defendants, and counsel for the Defendants acknowledges that accelerated depreciation did occur.

[2]           The Claimant testified that in July 2013, he placed a deposit on the Vehicle and was eager to receive the Vehicle.  Being a self-defined car enthusiast, the Claimant knew that his vehicle wold be one of a handful to be the first off of the production line, and he waited some nine months for the Vehicle to arrive.  He took possession of the Vehicle in April 2014, and Exhibit 2, Tab 5 in these proceedings indicates that the Claimant expended additional funds to “kit” out this Vehicle, including $3,000.00 for the premium package, $2,100.00 for the exclusive package, metallic paint, aluminium trim, $2,020.00 for a COMAND Nav system, $750.00 for a AMG night package, $450.00 for a AMG performance exhaust for a total purchase price of $68,888.73.  The Vehicle was the 6^th of 9 to be in Vancouver at that time.  By agreement of both experts in this trial, this Vehicle was at the top of the line of its model, and the Claimant spent a considerable amount of funds to “kit” out the vehicle with extras.  This was no drive off the lot vehicle, and was very much a custom order vehicle.

[3]           As a result of the negligence of the Defendants in the motor vehicle accident, the Vehicle sustained significant damage.  Initial estimates had the damage at approximately $20,000.00; however, the Claimant was without the use of this Vehicle for six months post-accident due to the extensive and ongoing repairs which ultimately were in excess of $34,000.00.  To date, the Claimant has testified that the Vehicle continues to have fault, including problems with the rimless window operation and dashboard noise.  Those ongoing problems were not challenged by the Defendants.  Exhibit 1, Tab 1 in these proceedings is documentation to note that as of March 17, 2015, the initial damage estimate was just over $19,000.00, and that the Vehicle was not going to be written off, as it did not meet the deemed 50% repair threshold.  Of note, the Claimant was advised in this exhibited document, “the appraiser has advised…that there is always the possibility of hidden damage, but it would have to be very extensive for us to be approaching this repair threshold…”, and as early as March 17, 2015, the Claimant put the parties on notice about his concern for accelerated depreciation.  The damage was extensive, and in the end, exceeded $34,000.00, with ongoing problems still persisting within the Vehicle.

[4]           The Claimant did not receive his Vehicle back until August 2015, and thereafter, he immediately noticed that a door window was misaligned, that there was wind noise when the vehicle was in excess of 50 kms per hour, the B Pillar was rattling, there was dashboard noise, damage to the passenger leather seat, and the sunroof was broken.  By October 2015, one door leaked water and the noise issues continued to persist.

[5]           The Claimant did his due diligence, including putting parties on notice about accelerated depreciation even before receiving the Vehicle back some six months post-accident.  In November 2015, he endeavoured to trade in the Vehicle, however, no dealerships were prepared to accept the Vehicle due to the extensive damage that it sustained.  In December 2015, the Mercedes Benz dealership where the Vehicle had undergone repairs said that the Vehicle at trade in value was approximately $36,000.00 plus taxes.

[6]           On cross-examination, counsel for the Defendants asked how the Claimant quantified the portion of his claim for lost time, to wit he testified that he is a financial planner, earning approximately $55.89 per hour.  His current claim is seeking compensation for approximately 90 hours, however, when pressed, acknowledged that approximately 41 of those hours were due to the multiple court attendances.  He was able to quantify 15 hours of time for the first six months while the Vehicle was being repaired, 2.5 hours of time with both the Claimant and Defendant experts, making his Vehicle available on separate occasions, and additional time thereafter for ongoing problems with the Vehicle.

[7]           Counsel for the Defendants endeavoured to convince the Court that the Vehicle is not a luxury vehicle per se, however, this Court respectfully disagrees.  While it is true (and admitted by the Claimant) that there are higher end Mercedes Benz vehicles, the Claimant’s vehicle was kitted out with thousands of dollars of extras, and upon arrival, was one of approximately nine in Vancouver, making it unique.  It is a mid-range performance vehicle.  Value added to this Vehicle is also that it comes with a Mercedes Benz warranty, however, upon transfer of ownership, the warranty ceases, thus impacting the value of the Vehicle.

[8]           The Court heard testimony from Mr. Carey Scarrow, the owner of Coast Auto Appraisals Ltd.  The parties agreed that each of their experts is a qualified court expert to testify in these proceedings.  Exhibit 1, Tab 3 in these proceedings is a copy of the Coast Auto Report (“Coast Report”).  Mr. Scarrow has been professionally appraising vehicles for over 15 years, is a certified Capda appraiser, and has been recognized at various court levels across Canada as an expert.  The Coast Report made a significant distinction in its findings, as opposed to the report relied upon by the Defendants, in that Mr. Scarrow used the final repair numbers of $34,419.13 for the damaged Vehicle.  In his testimony and the Coast Report, he noted that “the overall visible repair quality is of typical industry standard” (2B), that “the complete right side of the vehicle was refinished as part of the repair process; there are minor paint defects, as well as inconsistent paint thickness readings.  The existing factory paint warranty on the newly refinished panels is now void.  It is evident both doors have been refinished twice which is visibly evident as well as noted with paint thickness gauge readings” (2C), that the “overall repair quality is of typical industry standards for this calibre of a luxury import vehicle but does not represent its previous pre-loss factory originality” (2D); he commented on the warranty noting, “it is my opinion any prospective purchaser would take this into consideration negatively” (2E), that the damage “permanently flags/brands the vehicles [sic] title history, which clearly reduces the vehicles [sic] desirability and value” (2F), that the “total loss threshold was exceeded” (3B), “due to its history a large percentage of potential buyers would not consider this vehicle at any amount.  Buyers of this calibre of vehicle are notoriously fussy and accident history is the number one concern” (3D), and concluded that accelerated depreciation was evident, particularly when he extensively reviewed the exhibited damage sheets.  He reviewed the damage sheets and concluded that there was 44.2 hours of structural repair, including frame work.  He testified that if the Vehicle was in a subsequent accident, there would be no guarantee that it would respond in a similar manner as it would have pre-accident.  In arriving at his valuation, he testified that he relied upon the Canadian Black Book because of the unique qualities of the Vehicle, and the Canadian Red Book would not at that time have included the Vehicle, because it was not a standard production vehicle.  His Auto Report relied upon the market data from June to August 2015, and thus was close in time to the accident.  He acknowledged that there is no one formula to calculate the loss, and that it is difficult to capture the value, but that he concluded that as of the date of the accident, the Vehicle was valued at $55,000.00 plus taxes, and that as a result of the accident, accelerated depreciation has occurred in the amount of $18,000.00 plus taxes.  He thus valued it at $37,000.00 plus taxes and accounted for the six-month period of time in which the Vehicle was in the auto body repair shop and was not able to be driven.

[9]           On cross-examination, he acknowledged that base models of vehicles have different valuations, however, pointed out that this Vehicle was customized with a navigation system, premium package, seatbelt package and other additional options which totalled some $9,100.00 in extras.  He was asked about quantifying the 44.2 hours of structural calculations, and testified that there were 10 hours of frame work, but that there was an additional 34 hours of time to repair and replace, including high strength steel in the body of the Vehicle.

[10]        He testified that Mercedes Benz refused to sell the Vehicle, and that at best, they would sell it at auction or to another dealer.

[11]        Mr. Sparrow was pressed by counsel for the Defendants as to whether this is a luxury vehicle, and he testified that it was indeed a “flag ship premier” vehicle, it was AMG, it was not an entry level Mercedes Benz, and that while there are other classes of Mercedes Benz that are more of a luxury class, this Vehicle with the AMG was the highest of its model category.  Counsel continued to endeavour to convince him that it was not a luxury vehicle, and his testimony was unwavering, strong and consistent, including that other models are a different class with a different platform, and he remained unchallenged and repeated that the Vehicle was the high end of that particular model and it was not a compact executive vehicle.

[12]        He acknowledged that dealers will offer a lower price on a trade value, but that trade value is but one factor of many that he used in arriving at his calculations.

[13]        He testified that in order to test the market value of the Vehicle, he declared the damage at $20,000.00, because that was the initial claim when he was initially retained.

[14]        In arriving at the pre-market value of the Vehicle, he testified that he used current comparables at that time; considered that the Vehicle was ten months old; used monthly depreciation to correlate it with comparables; used the Black Book value as a guideline and noted that there was no retail book value for this Vehicle at the time, given its additional options.

[15]        He was unchallenged in testifying that the Vehicle was rare at the time of the accident and that it remains in limited production.

[16]        He was asked about his calculations, and testified that he used a 20% valuation because of the large accident declaration, that it is a higher end AMG model, that it had not been fully repaired, and that there were a number of replaced parts exceeding $11,000.00 in cost.

[17]        Exhibit 3 in these proceedings is the hand calculations of Mr. Sparrow, wherein he acknowledged a $11,000.00 number of 20% depreciation, a $2,000.00 number for insurance, a $2,000.00 number for accelerated depreciation and the Vehicle not being returned to factory specifications, and a $3,000.00 number for the loss of use of the Vehicle over a six-month period.  That is a key distinction between the testimony of Mr. Sparrow and that of the Defendant’s expert, who acknowledged that he did not have the final damage numbers, nor did he place a value on the loss of use of the Vehicle for that six-month period.  Mr. Sparrow testified that there were shortcuts in the repair, because it was an insurance claim, therefore the structure has been changed, and while not visible for a person on the street, the Vehicle is a unibody construction and thus it had significant structural changes after the accident.

[18]        The Defendant seeks to rely upon the testimony of Mr. Robert Fournier, owner of The Fournier Auto Group Ltd.  Again, both parties consented and agreed that, as with Mr. Sparrow, Mr. Fournier was also a court approved expert to testify.  He has been engaged in the auto industry since 2000, and commenced his own business, thereafter focussing in 2008 on accelerated depreciation.

[19]        Exhibit 2, Tab 1 in these proceedings is the accelerated depreciation report from The Fournier Auto Group Ltd. (the Fournier Report).  He testified that the Vehicle depreciated 10% in value in its first year and categorized the Vehicle as being a mid-class luxury vehicle.  There are key distinctions between the Coast Report as opposed to the Fournier Report, including that Mr. Fournier assumed that the repairs were complete, and assumed that if there was any problem that Mercedes Benz would repair it.  He acknowledged that he did not have the final invoice in the preparation of his report, which is different from the Coast Report, which in turn had also been prepared much earlier to the date of loss.  Mr. Fournier valued the Vehicle pre-accident at $56,760.00 plus taxes, however, the Fournier Report becomes distinctive in that he only defined the damage as being “moderately significant”, however, agreed that it comes to a point with some vehicles that it will stop depreciating because it essentially becomes a rebuilt vehicle and the depreciation is pegged at between 20-30%.  The Fournier Report states that “the loss of value is determined by comparing the results of the market analysis, the repair details, and details of over 120 accelerated depreciation reports performed by the Fournier Auto Group over the last 7 years” (paragraph 25(5)), however, none of that data calculation of 7 years of such reports was affixed.  Mr. Fournier concluded in his report dated October 10, 2016, that the accelerated depreciation was between $10,785.00 to $11,920.00 plus taxes.

[20]        On cross-examination, Mr. Fournier acknowledged that he has no auto body experience.  He was asked why he did not use the final invoice in his report.  He was candid and testified that he asked for it, and that it was not produced to him for his calculations.  He acknowledged that he did not have all of the correct data and that he made the assumption in his report that all of the damage had been rectified.  He was not advised that there are ongoing problems with the Vehicle.  When pressed, he was candid and forthright, acknowledging that if he had been in receipt of the detailed final invoice to which Mr. Sparrow relied upon, that he would have been more keenly aware of the extent of the damage.  Mr. Fournier acknowledged that the AMG is a more particularized vehicle, and in his words, he said “it’s an impressive automobile”, and that it is “pretty exciting technology” with “limited mass production”.  He acknowledged on cross-examination that his initial calculations changed to his final numbers because he was not initially provided all of the documentation.

[21]        Mr. Fourier agreed that he physically observed imperfections on the Vehicle, including bolts not being painted, the harness was out of the door, and there was dust in the paint on the rear quarter panel.  He acknowledged that the absence of a warranty does impact the value of any vehicle.  He acknowledged that he has never prepared an AMG vehicle report, but does, however, focus largely on German vehicles.

[22]        Most notably, on cross-examination, Mr. Fournier agreed that he did not account for the six-month period that the Vehicle was in the repair shop in arriving at his valuation.  That is strikingly different from the Coast Report.

[23]        He agreed that his report is dated October 2016, and that any valuations and reports would be more accurate closer to the date of loss.

[24]        The parties agreed that accelerated depreciation occurred as a result of the motor vehicle accident.

[25]        The Defendant relied on older market data, did not have the final invoice, and thus was not aware of the entire amount of structural and frame repair, and did not factor in the six-month period that the Vehicle was not on the road; therefore a value of $44,480.00 is not accurate on the part of the Defendant.  The Claimant’s valuation is more accurate and was undertaken closer to the date of loss, and included both breakdown of the final invoice and considered the six-month period in which the Vehicle was in the shop for repairs.

[26]        Counsel for the Defendants relies upon Miles v. Mendoza, 1994 CanLII 1714 (BC CA), [1994] B.C.J. No. 35 (BCSC) for the proposition that only actual loss should be compensated, and that if quality repairs put the vehicle back to the pre-accident state and/or alternatively the Claimant does not sell the vehicle, there may be no loss.  The fact is that with this Vehicle, there is actual loss, and both experts agree.  Both also agree that the Vehicle is not back to the exact condition it was pre-accident, and the Claimant was unchallenged with his testimony that some repairs, such as the frameless window continue to not function properly.  Both parties rely upon Gunn v. Tritow Systems Ltd., [1984] B.C.J. No. 758 and Miles, supra, for the proposition of accelerated depreciation, and both experts acknowledge that this Vehicle sustained accelerated depreciation.  Counsel for the Defendants submit that the Vehicle is a subcompact executive vehicle, meaning an entry level Mercedes Benz, when there is nothing factually to support such, and in fact, both experts agreed that this is a customized vehicle that is a low to mid-range luxury vehicle, including that it was at the top of its level in its own model class.  The Coast Report is the report to be accepted.  It relied upon the final invoicing numbers of damage of the Vehicle and the itemized breakdown of each repair and replacement (known as the Mitchell document); it also considered the fact that the Vehicle was in the repair shop for a six-month period, and it carefully considered that frame damage alone should not be isolated, as the Fournier Report does, and that the Vehicle sustained significant structural and body damage over and above the 10 hours of invoiced frame damage.  The Coast Report was also prepared much closer to the date of loss, making that a factor to be preferred.  A clear reading of the Coast Report, which affixes the final breakdown of repair and replacement, flies in the face of the submissions of counsel for the Defendant that it is an “entry level” executive car, when the actual Bill of Sale itemizes thousands of dollars of extras, purchased over and above for a vehicle that the Claimant customized, and waited months for delivery, to be only a mere handful of such sought after vehicles in Vancouver at the time of its arrival.  So, too, counsel for the Defendants seeks to rely on the fact that there is no sale of the Vehicle, however, both experts agree that they struggled to find any auto person, or even a Craigslist non-auto person, wishing to place a solid offer on the Vehicle, and both agreed that the significant damage to the Vehicle does attach the stigma of it now being significantly reduced in terms of its marketability.  Similarly, counsel for the Defendants endeavours to refute that the open market posting on Craigslist is an “unofficial trading platform”, however, that is incorrect when, factually, a Mercedes Benz dealership actually responded to that posting by Mr. Sparrow, and that factually, many auto dealerships post listings on Craigslist.  For all such reasons, the Coast Report and its findings are to be found to be more accurate and will be accepted in terms of its calculations.  In addition, the decision of Rutter v. Adams, 2016 BCSC 554 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 (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.

[27]        I now turn to the monetary portion that the Claimant is seeking for his time in this matter.  I am satisfied that the repairs to the Vehicle over a six-month period is inordinate, and that indeed the Claimant was extremely patient without having the joy and use of his customized Vehicle over a six-month period, having to communicate and meet with the auto body repair shop over that six-month period, that he has made his time and Vehicle available to two experts, that he continues to experience time because the Vehicle continues to have problems, particularly the frameless window and dashboard noise.  He is entitled to some monetary compensation for this portion of his claim.  He is seeking 90 hours of time based on his work billable/paid rate of $55.89 per hour which would total $5,030.10.  He does, however, acknowledge that this included a number of court attendances, seeking legal advice, and legal research out of court.  That is not compensable.  However, while somewhat arbitrary, he itemized and exhibited 15 hours of time expended on the Vehicle and repair issues up to 2017 and thereafter, he should be allocated some, albeit arbitrary, additional time, as the repairs remain unsatisfactory.  I am prepared to allocate the sum as claimed of $1,990.08 towards his loss.  That is what the Claimant has claimed at the time of filing, and I have no doubt that he has expended additional quantifiable time over and above; however, that is what he has claimed.  So, too, I counter balance anything over and above to draw to the attention of the Claimant that he could have, and should have had replacement insurance on this Vehicle that would have avoided his significant time expended on this matter, and that weighs in reducing his verbal submission of 90 hours of time.  It is no doubt an expensive lesson learned.  In saying that, however, he is entitled to be awarded monies.  The Defendants failed to provide any testimony or explanation as to why they permitted the authorized auto body repairs to continue over an unacceptable period of some six months, and how the initial estimate was so grossly under-estimated.  I accept that the initial estimate was essentially visual in nature, however, it would have been quickly and abundantly clear once the repairs physically commenced that the damage was extensive, and it is extremely troubling that the Defendants permitted the ongoing stress and aggravation to the Claimant who was without the use of his Vehicle for in excess of six months.  That conduct is simply not acceptable.

[28]        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.