Opinions and Legal Insights

Motorist Ordered to Pay $1,805 for “Accelerated Depreciation” Following Collision With Porsche

As discussed numerous times on this site BC law recognizes that if property is damaged by the wrong doing of another and if that property is then worth less even after all reasonable repairs have been made the ‘accelerated depreciation’ can be recovered against the at fault party.

In the first Accelerated Depreciation claim heard by BC’s Civil Resolution Tribunal such damages were awarded to the owner of a Porsche that was damaged in a collision.

In today’s case (Lai v. Leung) the Applicant’s vehicle was struck by the Respondent who admitted fault of the crash.  The impact caused damages which cost over $6,500 to repair.   The Applicant consulted with an appraiser who provided evidence that as a result the vehicle will be worth less on the open market.  ICBC refused to recognize this.  Both ICBC and the at fault motorist were sued but the tribunal noted that ICBC was not a correct party in such a dispute and the claim is properly brought against the at fault motorist with ICBC simply playing the role of their insurer.

In siding with the Applicant and accepting the expert opinion of the Fournier Auto Group Tribunal Member Trisha Apland provided the following reasons in ordering that $1,805 in damages for Accelerated Depreciation be paid:

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. 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. 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.