Kenneth John Williams & Anor v Toyota Motor Corporation Australia Limited (ACN 009 686 097) (Toyota Class Action)

The Federal Court of Australia has today delivered an important judgment following the initial trial which took place in December 2021.  A copy of the judgment is accessible here.

In summary, the Court overwhelmingly found in favour of the Applicants on key issues of liability and damages.  The Court found that:

• the Relevant Vehicles were not of acceptable quality because of their defective DPF systems;
• Toyota engaged in misleading and deceptive conduct in connection with marketing and selling the Relevant Vehicles;
• the value of the Relevant Vehicles was reduced by 17.5% as a result of their defective DPF systems; and
• the representative applicant is entitled to damages totalling at least $13,191.65 (further details below).

Further details of the judgment are outlined below.

Liability

The Court found that:

• all Relevant Vehicles failed to comply with the guarantee of acceptable quality provided in the Australian Consumer Law by reason of their defective DPF systems;
• representations made by Toyota regarding the Relevant Vehicles were false or misleading in contravention of the Australian Consumer Law; and
• Toyota engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law by failing to disclose, or disclose adequately, to purchasers of the Relevant Vehicles, or to the public at large, the issues with the DPF system.

Damages

The Court found that:

• Toyota’s failure to comply with the guarantee of acceptable quality resulted in a reduction in the value of the Relevant Vehicles in the amount of 17.5% of the average retail price of those vehicles;
• at this time, Group Members, other than 2020 Field Fix Group Members and Partial Period Group Members (defined below), are entitled to an award of damages under the Australian Consumer Law for that reduction in value;
• 2020 Field Fix Group Members and Partial Period Group Members may be entitled to an award of damages at a later time:
  • 2020 Field Fix Group Members are those Group Members whose Relevant Vehicles have received the “2020 Field Fix” (a specific countermeasure introduced by Toyota from May 2020); and
  • Partial Period Group Members are those Group Members who have “bought and/or sold a Relevant Vehicle on the secondary market”;
• Group Members, other than Partial Period Group Members, are entitled to an award of damages under the Australian Consumer Law for the excess GST they paid as a result of acquiring their Relevant Vehicle at a price which exceeded its true value (calculated as 10% of the reduction in value of their vehicle);
• Group Members are entitled to pre-judgment interest on any reduction in value and GST damages award;
• Group Members did not have a duty to mitigate their losses;
• the representative applicant is entitled to damages totalling at least $13,191.65, including:
  • $7,474.59, for the reduction in value of his Relevant Vehicle;
  • $745.46, for excess GST paid in connection with acquiring his Relevant Vehicle;
  • $246.60, for excess stamp duty paid in connection with acquiring his Relevant Vehicle; and
  • $4,725, for income he lost due to having to have his Relevant Vehicle serviced for issues associated with the DPF system;
• the representative applicant is not entitled to damages for excess fuel costs incurred as a result of issues with the DPF system. However, the Court noted that other Group Members may be able to prove that they suffered such loss.

Next steps

The class action is listed for a case management hearing on 28 April 2022, at which time the Court may make orders to give effect to the judgment.  We will provide you with a further update following that case management hearing, including in respect of the next steps in the proceeding.