Toyota Class Action Allows Claims for Aggregate Damages

A class action lawsuit was initiated against Toyota on behalf of both initial and subsequent motor vehicle owners due to the malfunctioning of the diesel exhaust after-treatment system (DPF System) in their allegedly defective diesel motor vehicles. The DPF System was responsible for capturing and transforming the pollutant emissions into carbon dioxide and water vapour but, under certain driving conditions, it became clogged, releasing excessive white smoke and foul odor, necessitating frequent servicing visits and causing a slight increase in fuel consumption.

The applicants filed claims under s 54 of the Australian Consumer Law, which guaranteed the 'acceptable quality' of their vehicles, and also for deceptive or misleading conduct. The Court-appointed referee's findings were utilized to substantiate these claims and were later adopted by the Court. However, parties disagreed on whether Lee J had the authority to settle these claims on a 'common basis,' specifically if all the vehicles given to class members were not of 'acceptable quality,' and whether Toyota had deceived or misled all members. Lee J asserted that he could as the DPF System's propensity for malfunctioning caused the vehicles to depreciate in value, indicating their nonconformity with the acceptable quality parameter. The misrepresentation claims depended on public-facing promotional campaigns.

Compensatory damages were sought on an aggregate and individual basis, with the first category comprising the reduction in vehicle value for members whose defect had not been fixed. The second category included the excess GST paid because of the vehicle's purchase price exceeding its actual value. Lee J recognized aggregate damages as permissible under the law, with the damages' specified amounts were calculated as 17.5% of the vehicle's purchase price. Nevertheless, Lee J did not allow making an assessment for total compensation entitlement due to the variance in each vehicle's purchase price, precluding an award of aggregate damages in favor of the relevant class members. Nonetheless, an award of aggregate damages was made in favor of relevant class members by specifying that the compensation's amount should be 17.5% of the vehicle's purchase price (and in a similar manner with interest on the excess GST paid).