It strikes me that the best way to pursue this line is for your friend to ask the OC’s insurers as well as his individual car insurers – policies may differ between companies and only they can provided definitive answers.
However, I have a horrible feeling that whoever bashed the car would be responsible – driving through a space that’s too narrow is a judgement call by the driver.
Your friend needs to bite the bullet and lodge a mediation application at Fair Trading.