134-NLR-NLR-V-55-GENERAL-INSURANCE-CO.-Appellant-and-C.-SOMASUNDERAM-Respondent.pdf
f SWAN J.—General Insurance Co. v. Somasunderam
467:
3
^954Present: Pull© J- and Swan J.
GENERAL INSURANCE CO., Appellant, and C. SOMASUNDERAM^
Respondent
S. C. 390—D. G. Colombo, 3,992
Motor Oar—Accident—Vehicle damaged beyond repair—Basis of valuation-
■ Where a motor oar is damaged beyond repair as the result of an accident,the value of the car at the time of loss is to be calculated, apart from specialfactors, upon a basis of depreciation depending on the theoretical life of the£ar.’
^.PPEAL from a judgment of the District Court, Colombo.
S. J. Kadirgamar, for the defendant appellant.
P. Somatilakam, for the plaintiff respondent.
„Cur. adv. tmtt-
99 9
February 25, 1954. Swan J.—
The appellant was sued by the respondent on two causes of actiomfor the recovery of (1) Rs. 6,000 alleged to be the value of motor car-CI* 2435 which was damaged beyond repair as the result of an accident-that occurred on 6.2.1950, and (2) Rs. 1,275 for bodily injuries sustained-There was no dispute regarding the latter claim. The case went to triaLon only one issue, namely :—“ What was the value of the car on 6th_February, 1950 ? The learned District Judge held that the car wasreasonably wor+jh Rs. 5,750 at the relevant date ; and judgment was-entered accordingly in favour of the respondent for Rs. 5,750 on the firstcause of action and Rs. 1,275 on the second cause of action togetherwith costs…
The only point argued before us was that the basis of valuation of;the car was wrdh§. It was a Ford Prefect which at that time could b&-purehased new for Rs. 6,500. The respondent had bought it second-hand for Rs. 6,000. The car had then done 12,000 miles. Between thatdate and the date of the accident it had done a further 7,000 miles..The respondent estimated the depreciation of the car during the periodhe owned it at Rs. 250 and this figure was accepted by the learned DistrictJudge as reasonable. Upon what basis this amount was arrived at one-cannot say. The learned District Judge has stated in his judgment thatit was “ well known that in 1950, the importation of cars was allowedonly on a licence ” and that therefore the value of second-hand cars had.gone up. The dnly evidence in the case was a statement by the witness-called by the appellant that in 1942 there was a scarcity of cars. Mr—Somatilakam who appeared for the respondent admitted that he could.not support the learned District Judge’s statement that ip. 1950 cars,could not be imported except on a licence. So that the learned District-.Judge has elearly misinformed or misdirected himself on an important^question of fact.
468
SWAN J.—General Insurance Co. v, Somasunderam
For the appellant one D. J. Wijesiriwardene gave evidence. Hesaid that he was the Foreman of the Ford Motor Company, Colombo,and counted 17 years of service. His evidence was that in the tradethe depreciation of a car was calculated on a mileage basis—10 centsper mile on the first 10,000 miles and 15 cents per mile on the second10,000. He was not asked, nor did he volunteer to say what t£e rate of•depreciation would be for the third 10,000 miles and thereafter. For-the purposes of this case that information was unnecessary.
The learned District Judge seemed to think that the calculation cfthe depreciation of the car on this basis was arbitrary. I take the contrary-view. Depreciation calculated on the theoretical life of a car has been•accepted in England and I see no reason why it should not be adoptedhere. Shawcross in his treatise on Motor Insurance at page 509 refers-to a judgment of the Official Referee in Edney v. de Rougemont1 in which-the following principles were laid down (I should mention that the report■of this case is-not available here).
(1) “ The value of the’ car at the time of loss is to be calculated upon abasis of depreciation ;
‘(2) The rate of depreciation is to be ascertained by finding upon theevidence in each case what was the theoretical life of the car –
<(3) The depreciation for the first year will be the rate per cent so foundplus something in respect of the dealer’s commission on the car ;
%4t) The depreciation for the last year will be the rate so found lessthe scrap value of the car at the end of its life ;
•ip) The rate of depreciation is to be applied from year to year to thecar’s value at the beginning of each year, and rjot yearly to itsoriginal cost. ”
Of course special factors in each case must be considered, for example*the use to which the car has been subjected during its actual life, whetherit had been recently repaired or renovated, and the value of any special-accessories destroyed or lost with it.
Tn this case the basis of depreciation although not strictly calculatediin accordance with the principles laid down in Edney v. de Rgugemont■{supra) is nevertheless based upon the theoretical life of a car, namely-the number of miles it can reasonably be expected to run before it dep-reciates to mere scrap value. In the absence of any better evidenceI would accept the basis of depreciation given by Wijesiriwardene andfix the value of the car at Rs. 4,100 at the time of the accident. In theTesult judgment will be entered for the respondent foroRs. 4,100 plusRs. 1,275 and costs of action. The respondent will, however, pay to theappellant the costs of appeal.
~Pttt.t,v J.—Ragree.
Appeal partly aUowed.
1 28 LI. L. B. 215.