In Pan v. Shihundu, the Plaintiff was injured in a motor vehicle accident, and brought an ICBC claim for damages for pain and suffering, as well as other types of damages, including a claim for accelerated deprecation. The Plaintiff had purchased a new BMW for $30,000 approximately a year and a half before the accident, which caused over $18,000 in damages. The Plaintiff had attempted to sell the vehicle, however did not receive any offers, as he was required by law to inform prospective buyers that the vehicle had been in an accident. Counsel for the Defendant argued that claims for accelerated depreciation are valid at law, but require a heavy burden of proof. The Plaintiff adduced an expert report, which stated the value of the accelerated depreciation was $4,000, which the Court accepted.

 

[165] The plaintiff relies on Signorello v. Khan, 2010 BCSC 1448, and Cummings v. 565204 B.C. LTD., 2009 BCSC 1009. Signorello stands for the proposition that a vehicle need not be sold in order to demonstrate an accelerated depreciation loss (para. 29); see also Cummings, at para. 73.

 

[166] The defendants acknowledge that claims for accelerated depreciation are good in law. However, they submit there is a heavy burden on a plaintiff to adduce sufficient evidence to prove that accelerated depreciation has actually taken place. They rely on Miles v. Mendoza, 1994 CanLII 419 (B.C.S.C.), and Burrard Import Ltd. v. Budget Rent-A-Car of B.C. Ltd, 2001 BCPC 75. In Miles, the court noted that “difficulties of proof” arise where the car is not sold after the accident, as the depreciating effect of the accident declines over time. The court also said that expert evidence of that only spoke to the general “stigma” attaching to damaged vehicles was not sufficiently persuasive proof to award damages for accelerated depreciation: “it cannot be “assumed”, by virtue of the occurrence of an accident requiring extensive repairs, that a properly repaired vehicle has suffered accelerated depreciation” (para. 40).

 

[172] Second, even if one accepts that the standard from Miles still applies, I am of the view that the evidence tendered here does go beyond a “bare” opinion that the car has suffered depreciation due to a “stigma.” Mr. Scarrow based his valuation on a long history of appraising cars, including BMWs. He also relied on the Gold Book, a valuation guide, and market research that he described in cross-examination. The plaintiff also provided evidence that he had attempted to sell the vehicle at a reduced price following the accident and received no offers.

 

[173] I conclude that the plaintiff’s evidence is sufficient to establish accelerated depreciation in value for the BMW. I accept Mr. Scarrow’s figures and award damages of $4,000.

In Kapelus v. Hu, the Plaintiff was injured in a rear end collision, and brought an ICBC claim for damages for pain and suffering, cost of future care, and other heads of damages, with one of these being a claim for accelerated depreciation. The Plaintiff was claiming that the value of her car, although it had been repaired, would have a lower resale value in the future, given that it had been in an accident. The trial judge disallowed the claim for accelerated depreciation on the basis that the only evidence as to the reduction in value was hearsay evidence in the form of offers to purchase from third parties. The British Columbia Court of Appeal upheld the ruling of the trial judge, ruling that the hearsay evidence was inadmissible. The decision highlights the importance of obtaining an expert report with respect to attributing a value for accelerated depreciation.

[24]         Finally, I should say that the argument advanced by Mrs. Kapelus, that the judge erred in rejecting evidence of the loss in value of her vehicle, based solely on her report of offers to purchase the vehicle, is without merit.  The judge ruled that Mrs. Kapelus’ evidence, that third parties had been prepared to purchase her car at a certain price prior to the accident, was hearsay.  I accept this ruling: it is hearsay and it is not rendered admissible under the business records exception in the Evidence Act, R.S.B.C. 1996, c. 124.

In Signorello v Khan, the Plaintiff owned a Mercedes Benz that required $26,000 in repairs. The Court disagreed with the Defendant that there was no loss in resale value, who had claimed that the vehicle had been fixed to the highest standard. The Court awarded $16,000 for accelerated depreciation.

 

[11] In British Columbia, a person wishing to sell a used motor vehicle that has sustained damage in an accident costing $2,000 or more to repair must declare that to any potential buyer. Other matters that must be declared include whether the vehicle has been leased or rented, whether it has been used as an emergency vehicle, and whether it has been registered out of province.

 

[12] Since any person considering the purchase of Mr. Signorello’s Mercedes would presumably investigate further and thereby become aware of its history and the cost of its repairs, Mr. Signorello maintained that the market value of his vehicle has been reduced, a phenomenon known as accelerated depreciation.

 

[13] The plaintiff’s claim under this heading was supported by expert evidence from Mr. Garry Cogbill of C/S Automotive Appraisals. It was his conclusion that the loss amounted to 15% of the vehicle’s value at the time of the collision, varying between $12,500 and $18,000 depending upon whether one takes wholesale or retail.

 

[14] The defendants’ contention that the plaintiff has suffered no loss in this regard was supported by expert evidence from Mr. Tom Cino of T.C. Consultants. Mr. Cino expressed the view that so long as a vehicle damaged in an accident has been repaired properly, as this one clearly was, then there is no loss due to accelerated depreciation regardless of the amount of the damage.

 

[15] Having read their reports and listened to the evidence of both experts, I find that I prefer the evidence of Mr. Cogbill to that of Mr. Cino. I do so for the following reasons.

 

[16] While it would be unfair to describe Mr. Cino as an advocate for the party who retained him, he struck me as someone who is certainly an advocate for his position that, in general, a motor vehicle that is damaged in an accident does not suffer accelerated depreciation so long as it is repaired properly. It is a position he has advocated for a long time. As he stated, he set out many years ago to prove that the use of the damage declaration by automobile dealers to reduce the trade-in value of vehicles subject to those declarations, was just a sales tool, and that so long as the vehicles had been repaired properly, they were in fact worth as much as similar vehicles that had not been damaged.

 

[19] The issue is whether, in the marketplace, people prepared to pay a six-figure sum for an exotic performance motorcar such as Mr. Signorello’s are likely to pay less for one that they learn has sustained $26,000 worth of damage, then they would for one that had never been in an accident, all else being equal.

 

[29] The law does not require that the plaintiff demonstrate the loss precisely by having sold the vehicle. It is enough for him to establish, as I find that he has, a reduction in its value: : see Cummings v. 565204 B.C. Ltd.,2009 BCSC 1009 (CanLII), 2009 BCSC 1009. I accept Mr. Cogbill’s conclusion in that regard, and doing the best that I can with his figures, I assess the reduction at $16,000.

In an ICBC claim, when you have a vehicle that has been damaged in a motor vehicle accident, the resale value of this vehicle will be lower, even if it has been repaired. This loss is recognized at law, and is known as a claim for accelerated depreciation. This ICBC claim usually applies to more expensive cars that are in excellent condition, but can apply to others as well. In reality, if a buyer is faced with two identical cars in terms of make, model, year, and mileage, but one has been in an accident, and the other not, then preference will be given to the car that was not in the accident. The law in British Columbia states that you must declare any damages over $2000 if you intend to sell your vehicle.

 

ICBC is loathe to pay such a claim and, when they do, they will not separately recognize the claim, but rather will roll an amount for the claim into an overall global settlement number. The main reason ICBC will try to avoid paying is the proverbial floodgates argument. If it gets out that they are paying out on accelerated depreciation claims, then their fear is that there will be an onslaught of claims for accelerated depreciation, potentially costing ICBC untold millions of dollars.

 

There is a common misconception that you must be in the process of selling your vehicle at the time of the motor vehicle accident in order to be able to make a claim for accelerated depreciation. This is simply not the case. The claim for accelerated depreciation arises on the day of the accident.

 

Another misconception that arises is that you have to sell your vehicle in order to realize a claim for accelerated depreciation. This is also not true, as you can still keep your vehicle after making a claim for accelerated depreciation.

 

If you have been involved in a motor vehicle accident, and wish to bring an ICBC claim for damages, it is always prudent to make sure that you bring a claim for accelerated depreciation, if the circumstances warrant it. You could be losing out on several thousands of dollars if you do not. You are wise to obtain an expert report from someone who can view and test drive your vehicle, and then present this expert report to ICBC.

 

In Cummings v 565204 B.C. Ltd., the cost to repair a used vehicle was just over $13,000, and the Court awarded the Plaintiff $7,600 for accelerated depreciation.

 

[70] Ms. Cummings is claiming the amount of $7,600 for accelerated depreciation of the Nissan due to the damage it sustained in the accident. For the following reasons, I have concluded that an award in that amount for accelerated depreciation is appropriate.

 

[71] The cost to repair the Nissan following the June 2006 motor vehicle accident was in excess of $13,000. Ms. Cummings tried to trade the Nissan in following the accident but was told by Dean Dodd, the lease manager at the Richmond Honda dealership, that the dealership is not interested in a vehicle that had sustained more than $5,000 in damage in an accident. Mr. Dodd confirmed that the dealership does not accept cars for trade that have in excess of $4,000 damage.

 

[72] Mr. Haffenden testified that the owner of a vehicle that has been involved in an accident where the damages exceed $2,000 must declare the damages, whether selling privately or to a dealer. In his opinion, the Nissan would have suffered a depreciation of approximately 20% or $7,600 on the date of the accident as a result of the damage it sustained.

 

[73] It is not necessary for a plaintiff to sell a vehicle in order to make out a claim for accelerated depreciation. The assessment of a claim for accelerated depreciation should be made on the day of the accident: Reinders v. Wilkinson (1994), 51 B.C.A.C. 230.