Capic v Ford Motor Company of Australia Pty Ltd
[2021] FCA 715
•29 June 2021
FEDERAL COURT OF AUSTRALIA
Capic v Ford Motor Company of Australia Pty Ltd [2021] FCA 715
File number:
NSD 724 of 2016
Judgment of:
PERRAM J
Date of judgment:
29 June 2021
Catchwords:
CONSUMER LAW – representative proceedings – guarantee of acceptable quality in s 54 Australian Consumer Law (‘ACL’) – where 73,451 vehicles supplied in Australia with DPS6 dry dual clutch transmission – allegation transmission non-compliant with s 54 guarantee due to real risks of failure arising from four component and two architectural deficiencies – where failure manifests in range of undesirable symptoms including vehicle shudder – where Respondent introduced revised versions of three of four original components – where Respondent submitted some symptoms are ‘normal operating characteristics’ of the vehicles – where component deficiencies interrelated with transmission’s architecture – where Applicant alleged transmission control module failure a safety issue
CONSUMER LAW – representative proceedings – where Applicant claimed damages for herself and on behalf of group under ACL s 271(1) – whether s 271(1) confers a single cause of action where goods have multiple features that independently constitute non-compliance with s 54
CONSUMER LAW – where Respondent replaced failed components under warranty – where effectiveness of replacements in issue – where Respondent relies on ACL s 271(6) to negative Applicant’s claim – whether s 271(6) part of cause of action or defence – whether s 271(6) enlivened where consumer has not required manufacturer to repair goods – whether Applicant bears onus in relation to s 271(6) – where parties did not litigate question of ‘reasonable time’ with respect to group members – whether late repairs affect entitlement to damages – whether Respondent bears onus in relation to s 271(2)
CONSUMER LAW – representative proceedings –allegation of misleading or deceptive conduct based on implied representations arising from marketing of vehicles – where no link to knowledge of Respondent – where express representation alleged to be on Respondent’s website – where no evidence as to context of representation
EVIDENCE – where Applicant sought to rely on evidence from 52 group members in class of 73,451 vehicles – where method of selection unknown – whether evidence of group members sufficiently representative to be probative
REPRESENTATIVE PROCEEDINGS – where Applicant sought aggregate damages on behalf of group – where Federal Court of Australia Act 1976 (Cth) s 33Z requires reasonably accurate assessment of total amount to which group members will be entitled – where group member’s entitlement to reduction in value damages for defective components unknown
DAMAGES – Applicant’s individual claim for reduction in value – whether value to be assessed at time of supply or by considering repairs performed during life of vehicle
DAMAGES – Applicant’s individual claim for other reasonably foreseeable loss under s 272(1)(b) – whether Applicant can recover excess tax and financing costs – effect of award of reduction in value damages
PRACTICE AND PROCEDURE – where Respondent objected to Applicant’s reliance on certain documents discovered in US proceedings – where documents tendered at end of trial and not part of particularised case – whether reliance procedurally fair in light of notice given
Legislation:
Census and Statistics Act 1905 (Cth) s 17(2)
Competition and Consumer Act 2010 (Cth) s 82, Sch 2 ss 2, 4, 7(e), 18, 33, 54, 59(1), 259, 271, 272, 273, 274
Evidence Act 1995 (Cth) ss 81, 144, 159, 191, Dictionary definition of ‘Australian Statistician’
Federal Court of Australia Act 1976 (Cth) ss 33Z, 51A(1)(a)
Sale of Goods Act 1895 (WA) s 52
Sale of Goods Act 1893 (UK)
Cases cited:
APS Satellite Pty Ltd (formerly known as “SkyMesh Pty Ltd”) v Ipstar Australia Pty Ltd [2016] NSWSC 1898
Australian Competition and Consumer Commission v Ford Motor Company of Australia Limited [2018] FCA 703; 360 ALR 124
Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672
Australian Competition and Consumer Commission v Pratt (No 3) [2009] FCA 407; 175 FCR 558
Avel Pty Ltd v Multicoin Amusements Pty Ltd (1990) 171 CLR 88
Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Boyer v FRP Pools and Spas Pty Ltd [2019] NSWCATCD 52
Capic v Ford Motor Company (No 3) [2017] FCA 771
Capic v Ford Motor Company of Australia Limited (No 4) [2017] FCA 1575
Capic v Ford Motor Company of Australia Limited (Form of Common Questions) [2020] FCA 884
Capic v Ford Motor Company of Australia Limited (Knowledge Common Questions) [2020] FCA 885
Capic v Ford Motor Company of Australia Limited (Late Evidence) [2020] FCA 1117
Capital Securities XV Pty Ltd v Calleja [2018] NSWCA 26
Chaplin v Hicks [1911] 2 KB 786
Chowder Bay Pty Ltd v Paganin [2018] FCAFC 25
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Courtney v Medtel Pty Ltd [2003] FCA 36; 126 FCR 219
Doe d Wetherell v Bird (1833) 111 ER 63; 7 Car & P 6
Federal Commissioner of Taxation v Rozman [2010] FCA 324; 186 FCR 1
Fink v Fink (1946) 74 CLR 127
Gould v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490
Graham Barclay Oysters Pty Ltd v Ryan [2000] FCA 1099; 102 FCR 307
Hadley v Baxendale (1854) 156 ER 145
Henville v Walker [2001] HCA 52; 206 CLR 459
Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd [2008] FCA 369; 167 FCR 314
Jones v Dunkel (1959) 101 CLR 298
Jones v Schiffmann (1971) 124 CLR 303
Kent v Wotton & Byrne Pty Ltd [2006] TASSC 8; 15 Tas R 264
Manly Council v Byrne [2004] NSWCA 123
McRae v Commonwealth Disposals Commission (1951) 84 CLR 377
McWilliam’s Wines Pty Ltd v LS Booth Wine Transport Pty Ltd (1992) 25 NSWLR 723
Medtel v Courtney [2003] FCAFC 151; 130 FCR 182
Moore v Scenic Tours Pty Ltd [2020] HCA 17; 94 ALJR 481
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Parmar v Minister for Immigration and Citizenship [2011] FCA 760
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355
Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338
Swick Nominees Pty Ltd v LeRoi International Inc (No 2) [2015] WASCA 35; 48 WAR 376
Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177
Unique International College Pty Ltd v Australian Competition and Consumer Commission [2018] FCAFC 155; 266 FCR 631
Vautin v BY Winddown, Inc. (formerly Bertram Yachts) (No 4) [2018] FCA 426; 362 ALR 702
Vines v Djordjevitch (1955) 91 CLR 512
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Waters v Mercedes Holdings Pty Ltd [2012] FCAFC 80; 203 FCR 218
Wentworth District Capital Ltd v Commissioner of Taxation [2010] FCA 862
Australian Bureau of Statistics, 3303.0 Causes of Death, Australia, 2019 (Australian Bureau of Statistics, Canberra, 23 October 2020)
Hancock PA and Weaver JL, ‘On Time Distortions under Stress’ (2005) 6(2) Theoretical Issues in Ergonomics Science 193-211
Langer J, Wapner S and Werner H, ‘The Effect of Danger upon the Experience of Time' (1961) 74(1) The American Journal of Psychology 94-97
Odgers S, Uniform Evidence Law (14th ed, Thomson Reuters, 2019)
Division:
General Division
Registry:
New South Wales
National Practice Area:
Commercial and Corporations
Sub-area:
Regulator and Consumer Protection
Number of paragraphs:
969
Date of last submissions:
23 September 2020 (Applicant)
16 September 2020 (Respondent)
Date of hearing:
15-19, 22-26 and 29-30 June, 1, 6-8, 10, 13-17 and 21-24 July
Counsel for the Applicant:
Mr I R Pike SC with Ms F Roughley and Mr P Strickland
Solicitor for the Applicant:
Corrs Chambers Westgarth
Counsel for the Respondent:
Mr C Scerri QC with Ms K Anderson and Mr T Farhall
Solicitor for the Respondent:
Allens
Table of Corrections
4 November 2021
In paragraph 112(b), the word “he” has been inserted between the words “line” and “gave”.
4 November 2021
In the fourth sentence of paragraph 697, the full stop has been replaced with a question mark.
4 November 2021
In the third sentence of paragraph 739, “s 271(1)(a)” has been changed to “s 272(1)(a)”.
ORDERS
NSD 724 of 2016
BETWEEN:
BILJANA CAPIC
Applicant
AND:
FORD MOTOR COMPANY OF AUSTRALIA PTY LTD ACN 004 116 223
Respondent
order made by:
PERRAM J
DATE OF ORDER:
29 June 2021
THE COURT ORDERS THAT:
1. The direction of 29 July 2020 relating to the Applicant’s tender list be revoked to the extent it applies to the documents listed in Annexure A.
2. The matter stand over for further case management on 27 July 2021 at 9.30 am.
3. The parties not deliver written submissions in advance of the case management hearing.
AND THE COURT NOTES THAT:
1. The documents in Annexure A will be removed from the ‘Admitted Into Evidence’ section of the electronic Court Book.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
Document ID
Title
Date
1
FOR.712.002.6164
6 Panel - Launch Judder 30-Nov-12
17/01/2013
2
FOR.712.002.8367
RE: DPS6 seals
31/07/2013
3
FOR.713.001.0347
May 03,2012 B299 CMT
2/05/2012
4
FOR.729.004.7466
RE: Ability to clean engine oil from the DPS6 clutches
29/05/2015
5
FOR.729.005.4035
RE: DPS6 Clutch Cleaning
21/10/2015
6
FOR.729.005.4055
RE: DPS6 Clutch Cleaning
6/10/2015
7
FOR.729.005.4064
RE: DPS6 Clutch Cleaning
7/10/2015
8
FORD_DPS6-SAC_00053729
00.00-R-202_Functional_Attribute_Rating_of_Vehicles.doc
22/05/2017
9
FORD_DPS6-SAC_00053808
00.00-R-201_Vehicle_and_Attribute_Customer_Rating_System.doc
22/05/2017
10
VGS20034961
RE: Dealer call Friday
11/12/2010
11
VGS20099409
DPS6 Fiesta Shudder Take-off.pdf
11/12/2012
12
VGS20140955
Proposed Solution to DPS6 Inertia and Thermal Issues
30/04/2010
13
VGS20141401
ONE Ford PPT Template (Base Version)
18/02/2013
14
VGS20143863
Fw At HPS Paper - Odell Review
1/11/2011
15
VGS20143864
2011 FWB Automatic Transmission - High Priority Study - M. Fields and S. Odell Follow-Ups - Key Follow-Up Items From Oct 27 2011 SAR Review
27/10/2011
16
VGS20143916
Fw Note to Send out Under Joe's Signature
4/11/2011
17
VGS20143918
2011 FWB Automatic Transmission - High Priority Study - Key Follow-Up Items From Oct 27 2011 SAR Review
27/10/2011
18
VGS20150040
Updated Agenda for the Engineering Governance Forum (EGF) - September 24th 2008 - Timing 08.30h AM - 9.30h AM US Time - 14.30h - 15.30h CET - Location PDC 1B-C73 / Merk18-MC4 / NetMeeting 19.171.147.108
24/09/2008
19
VGS20151953
2013MY DPS6 Upgrade for 1.0L GTDI Unit PS/PSC - Executive Summary
3/06/2009
20
VGS20166367
Transmission and Driveline PTTR Meeting Minutes - 7/31/09
5/08/2009
21
VGS20166394
DPS6 Clutch Torque Capacity
7/08/2009
22
VGS20168759
DMF DPS6 NVH Assessment (Gear Rattle) Vehicle Test & CAE - Presenters H Jiang / G Pietron
31/07/2009
23
VGS20179358
Engine Start Concerns Auto Trans Engagement Concerns Leaving Park And/or Check Engine Light with DTC P06B8 P0884-Built On or Before 8/17/2010 - TSB 10-19-6
24/12/2010
24
VGS20185585
DPS6 August 2007 Design Review Minutes Day 2
3/09/2007
25
VGS20231997
FW: Reviewing DPS6 Dry Clutch Durability and 1.0L GTDI w/Eli Avny
4/04/2013
26
VGS20231999
DPS6 Application Assessment
4/04/2013
27
VGS20232207
DPS6 Application Assessment
4/04/2013
28
VGS20254283
Fw Cardanic-Damper Concept Issue Impacting Grattle
8/12/2009
29
VGS20343126
DPS6 Design Review Minutes June 22 2007
26/06/2007
30
VGS20345669
Twin Dry PowerShift (DPS6) With 1.6L GTDI IR Status Review - Trans/Driveline Research & Advanced - August 2008
1/08/2008
31
VGS20387022
FW: investigating abnormal noises vehicle 1 data
15/08/2013
32
VGS20415042
RE: DPS6 Next Steps
9/03/2014
33
VGS20415048
Talking Point MF March 11 rev1.docx
9/03/2014
34
VGS20419396
Qs v4 - DPS6.docx
7/03/2014
35
VGS20481752
TGW - Introduction into an Proposal - DPS6 Integrated Cooling System - Cascade Session Towards GTC/LuK Team - Mail 1
25/01/2013
36
VGS20948373
DPS6 Clutch Cooling Project
5/10/2012
37
VGS21239077
6DCT250 - Design Review - Ford and Getrag at LuK in Buehl
28/09/2007
38
VGS21274162
October 6th 1 x1 w TKB/Steve Armstrong
22/09/2011
39
VGS21274195
Getrag Group/GFT Briefing Paper for October 3rd Week Meetings with Armstrong and Hagenmeyer
23/09/2011
40
VGS21274196
Getrag and GFT Relationship with Ford
1/01/2012
41
VGS21274198
Getrag Briefing Paper
1/01/2012
42
VGS21274233
Getrag Group/GFT Briefing Paper for October 3rd Week Meetings with Armstrong and Hagenmeyer
27/09/2011
43
VGS21276324
Fw Roush Support for DPS6
7/12/2012
44
VGS21276329
DPS6 Dual Clutch Air Cooling Concept Project
7/12/2012
45
VGS21276340
Roush Support for DPS6
12/12/2012
46
VGS21277518
PowerPoint Presentation
31/01/2014
47
VGS21293945
SPD6 1.0L DMF - Initial Study - Update - 22-Mar-2012
22/03/2012
48
VGS21343988
Fw Slide About B8080 Implementation
7/05/2010
49
VGS21343990
B8080 Implementation in B-Car
7/05/2010
50
VGS21354959
Slide 1
19/11/2013
51
VGS21355122
FW: DPS6 Getrag Status Update
20/03/2014
52
VGS21513649
Proposed Customer Hang Tag
4/02/2013
53
VGS21683733
Thermal Mass to Forced Cooling Sensitivity Study Phase 1
28/02/2010
54
VGS5-00129095
RE: investigating abnormal noises vehicle 1 data
18/08/2013
55
VGS5-00170109
RE: Meet with Ann Carter?
18/11/2013
56
VGS5-00170111
DPS6 Warranty Negotiation Strategy.docx
18/11/2013
57
VGS5-00171150
DPS6 Paper for SAR 10:30am
27/01/2014
58
VGS5-00171151
DPS6 Cost Estimate 11-22-13 SR Submission v2 (01-27-14).pdf
26/01/2014
59
VGS5-00171156
Getrag DPS6 Seal Leaks_1pager01262014vF2.docx
26/01/2014
60
VGS5-00188800
Fw DPS6 Production Engrg Budgetary Estimate
27/01/2013
61
VGS7-0009634
SREA C00867 Approved
4/05/2015
62
VGS7-0148130
RE: Emailing: QCN Request Form V4 AE8Z-7048-A Seal leakers copy
8/05/2013
63
VGS7-0151656
RE: Shudder Event
22/02/2013
64
FOR.700.005.0013
16X53-16131-Oct 21 extract AP only
24/10/2016
65
FOR.725.026.6816
SSM Rear Seal Leaks_20087-2013-1750
27/08/2015
66
FOR.725.026.6819
Rear Main Seal and DPS6 Transmissions
27/08/2015
67
FORD_DPS6-SAC_00007042
10_22_15 DPS6 C12995785 all hands #23.ppt
4/08/2016
68
VGS20090227
FW: DPS6 Clutch Cooling Project
30/11/2012
69
VGS20090292
FW: Clutch Temp Testing
30/11/2012
70
VGS20109545
C346 media drive feedback
9/12/2010
71
VGS20148606
RE: TGW Improvement - Hardware Changes - Proposal
5/04/2012
72
VGS20169615
Slide 1
2/10/2009
73
VGS20190063
Microsoft PowerPoint - Ford Focus TGW competitive analysis 7-21-2011 ver2.ppt
26/07/2011
74
VGS20956107
FW: Ford Cardanic Clucth Application
4/11/2012
75
VGS21238832
PS195 SDS Version 1.0.xls
20/04/2006
76
VGS20090230
DPS6 Active Cooling Project CR Gateway & Project Status - Trans/Driveline Research & Advanced Engineering
27/08/2010
77
VGS20090260
Active Cooling for Dry DCT Transmissions
05/04/2012
78
VGS20090281
DPS6 Temperature and Torque Correlations
04/10/2012
79
VGS20204805
Evolution and Outlook PowerShift DCT250 - Piero Aversa and Ernest DeVincent
16/09/2010
REASONS FOR JUDGMENT
SECTION I: INTRODUCTION
[1]
Ms Capic
[2]
Liability
[2]
Damages
[14]
The group claim
[17]
Liability
[17]
Input shaft seals
[19]
Clutch lining
[23]
The TCM
[29]
Rear main oil seal
[33]
Inadequate heat management
[34]
Rattling gears and slight shudder at low speeds
[35]
Damages
[36]
SECTION II: THE AFFECTED VEHICLES
[41]
SECTION III: PROCEDURAL CONSEQUENCES OF THE WAY THE CASE WAS RUN
[52]
SECTION IV: THE NATURE AND RELEVANT FEATURES OF THE DPS6
[60]
SECTION V: THE WITNESSES
[63]
The Applicant’s lay witnesses
[63]
Ms Capic
[63]
The Applicant’s other lay witnesses
[102]
The Respondent’s lay witnesses
[108]
Mr Karageorgiou
[108]
Mr Cruse
[142]
Mr Nethercote
[180]
Mr Davidson
[196]
Dr Greiner and Mr Kuhn
[198]
Mr Holtshausen and Ms Padmanaban
[204]
Mr Marston and Mr Carter
[206]
Mr Vasilakis and Mr Cuthbert
[207]
Mr Stockton and Dr Strombom
[208]
SECTION VI: THE LEAKING INPUT SHAFT SEALS
[209]
Lip material
[212]
Outer backing material
[215]
Were the lip and outer backing problems design or manufacturing problems?
[221]
What problems could leaking input shaft seals give rise to?
[225]
What was the risk of the seals failing?
[226]
Fix on fail: vehicles which were repaired
[232]
Fix on fail: vehicles which have not been repaired
[233]
Other problems
[235]
Safety issue
[236]
SECTION VII: THE CLUTCH LINING AND ASSEMBLY
[238]
Clutch lining material: B8080
[239]
Clutch assembly problem: geometric misalignment in production
[244]
Design or manufacturing problems?
[248]
What problems could the B8080 clutch lining material and the difficulties with geometric variation give rise to?
[251]
Resolution of the problems in production
[252]
Fiesta
[254]
EcoSport
[255]
Focus
[259]
How effective were the fixes in production?
[260]
The Applicant’s contentions
[277]
The Respondent’s submissions
[292]
Conclusions on the switch in production to RCF1o and half-hybrid B8040/B8080
[307]
‘Fix on fail’ strategy for vehicles on the road
[310]
Fiesta
[313]
EcoSport
[314]
Focus
[315]
250 rpm test
[316]
Geometric variability issue in vehicles on the road
[319]
The risk of problems eventuating
[321]
SECTION VIII: THE TCM ISSUE
[327]
ATIC 91 failure symptoms
[344]
ATIC 106 failure symptoms
[348]
The Affected Vehicles
[350]
Risk of failure
[351]
ATIC 91
[352]
ATIC 106
[369]
Engineering solutions
[370]
Introduction of solutions in production
[376]
Introduction of solutions into vehicles already on the road
[380]
Safety issue?
[388]
Design or manufacturing problem
[412]
Vibrations
[413]
SECTION IX: THE REAR MAIN OIL SEAL
[416]
SECTION X: THE ARCHITECTURAL DEFICIENCIES
[449]
Torsional vibrations
[450]
Negative consequences of torsional vibrations
[451]
The need for damping
[453]
The damping mechanisms of the DPS6
[454]
Single and dual mass flywheels
[458]
The cardanic joint
[460]
The inner dampers
[463]
Software damping: clutch slip
[465]
Did the torsional damping measures remove the torsional vibrations?
[474]
Inner dampers
[474]
Clutch slip
[495]
Heat management
[510]
The position of the Respondent
[520]
Conclusions on Architectural Deficiencies
[528]
Inadequate damping of torsional vibrations
[528]
Inadequate heat management
[531]
Connection to the Component Deficiencies
[532]
SECTION XI: MS CAPIC’S CAR
[535]
The independent inspection of Ms Capic’s car
[547]
Mr Carter
[551]
Mr Marston
[561]
The IDS episode
[569]
The absence of reported problems in Mr Marston’s summary
[585]
Driving conditions debate
[586]
Mr Marston’s subsequent testing
[588]
Did the Applicant challenge Mr Carter’s evidence?
[595]
Conclusions on Mr Carter’s and Mr Marston’s evidence
[599]
SECTION XII: ACCEPTABLE QUALITY
[603]
The matters in s 54(3)
[614]
Section 54(3)(a): the nature of the goods
[615]
Section 54(3)(b): the price of the goods (if relevant)
[616]
Section 54(3)(c): any statements made about the goods on any packaging or label on the goods
[617]
Section 54(3)(d): any representation made about the goods by the supplier or manufacturer of the goods
[618]
It was an automatic transmission with smooth gear changes
[620]
The DPS6 had the power or responsiveness of a manual with the benefits and ease of an automatic
[630]
The DPS6 was ‘sealed for life’
[632]
Conclusion on s 54(3)(d) representations
[633]
Section 54(3)(e): any other relevant circumstances relating to the supply of the goods
[636]
Vehicles with original input shaft seals
[638]
Vehicles with B8080
[642]
Vehicles with a TCM containing the original ATIC 91 chip
[647]
Vehicles with the ‘normal operating characteristics’
[652]
Ms Capic’s vehicle
[674]
Summary of conclusions on acceptable quality
[675]
All Affected Vehicles
[675]
Input shaft seals
[677]
Clutch lining
[682]
TCM
[687]
Reduction in value damages
[691]
Other damages under s 272(1)(b)
[693]
Section 271 of the ACL
[694]
Some background to the provision
[698]
Affected person
[698]
Express warranty in s 271(6)
[699]
The right to damages in s 272(1)
[707]
Is s 271(6) enlivened if a person does not require the goods to be repaired or replaced?
[717]
The significance of late repairs
[724]
Who bears the onus of proof under s 271(6)
[726]
Who bears the onus under s 271(2)
[741]
The implications of s 271(6)
[742]
Group members
[743]
Replacement of the input shaft seals and TCM under the Respondent’s express warranty
[753]
The replacement of the B8080 clutch lining material and input shaft seals with rubber-backed replacements under warranty
[763]
Ms Capic
[766]
SECTION XIII: MISLEADING OR DECEPTIVE CONDUCT
[768]
Group
[768]
The pleaded case
[769]
Vehicle Representations and Transmission Representations
[771]
The PowerShift Representations
[799]
Ms Capic
[804]
The Affected Vehicles were exhibiting shudder and that this was a common issue
[809]
The Respondent had received 284 complaints about the Affected Vehicles in relation to issues including excessive clutch shudder, excess noisiness from the transmission, delayed acceleration and excessive shuddering and jerking when accelerating
[814]
The TCM failures were an issue in Affected Vehicles
[819]
Some implications
[820]
Was there misleading or deceptive conduct?
[823]
Conclusion
[843]
SECTION XIV: THE GROUP’S AGGREGATE DAMAGES CLAIM
[844]
SECTION XV: MS CAPIC’S INDIVIDUAL CLAIM FOR LOSS AND DAMAGE
[854]
The nature of the claims
[854]
Reduction in value damages under s 272(1)(a)
[855]
Consequential losses under s 272(1)(b)
[856]
Inconvenience, distress and vexation
[857]
The causes of action
[858]
Input shaft seals
[858]
The TCM issue
[860]
The replacement of B8080
[861]
The rattling gears and the slight shudder at low speeds
[862]
Reduction in value damages
[864]
Mr Vasilakis
[865]
The purchase of the vehicle
[872]
How much did Ms Capic pay for the vehicle?
[877]
Mr Cuthbert’s evidence as to the value of the vehicle
[880]
Consequential losses
[891]
GST, stamp duty and financing costs
[891]
Repair time
[919]
Damages for inconvenience, distress and vexation
[923]
SECTION XVI: MISCELLANEOUS
[924]
Procedural fairness
[924]
Schedule 1 documents drawn from the §1782 documents
[928]
Schedule 1 documents not being §1782 documents
[947]
Orders
[955]
Judicial notice
[956]
SECTION XVII: CONCLUSION AND ANSWERS TO COMMON QUESTIONS
[960]
PERRAM J:
SECTION I: INTRODUCTION
The Applicant, Ms Capic, brings this suit on her own behalf and on behalf of the group whom she represents, against Ford Motor Company of Australia Pty Ltd (‘Ford Australia’). When referring to Ms Capic in her capacity as the group’s representative I will refer to her as the Applicant and when referring to her in her own capacity I will call her Ms Capic. I deal first with the position of Ms Capic and then of the group whom she represents.
Ms Capic
Liability
On 24 December 2012 Ms Capic purchased a 2012 Ford Focus from Sterling Ford in Melbourne which had been imported into Australia by the Respondent. She claims that since its purchase her vehicle has displayed a number of mechanical difficulties which she says are associated with its transmission (a 6-speed dry dual clutch PowerShift transmission, known as the ‘DPS6’). These difficulties are alleged to include shuddering, sudden deceleration, grinding noises and difficulties with gear selection (but there are many others). As the case was run, Ms Capic said that the DPS6 had certain features which created a risk that the symptoms would occur and she says that those risks were all present at the time that she purchased the vehicle. She submits that the supply of a vehicle which is inherently subject to such risks of failure contravenes the guarantee of acceptable quality imposed by s 54 of the Australian Consumer Law (‘ACL’), being Sch 2 to the Competition and Consumer Act 2010 (Cth) (‘the Act’).
For reasons I will later explain, there is no doubt that s 54 applies to the Respondent as the importer of the vehicle. ACL s 271(1) permits Ms Capic to sue the Respondent for breach of the guarantee of acceptable quality and to recover damages from it. Without expanding at this stage on what any of the following mechanical engineering jargon means, Ms Capic says that the DPS6 posed four risks related to components within it (‘the Component Deficiencies’). The components and their risks of failure were:
• Input shaft seals which had a tendency to leak permitting lubricants from the gearbox side of the transmission to enter the part of the bell housing containing the otherwise dry clutch and drive plates and contaminate them;
• Inadequate friction material on the faces of the clutch and drive plates (the friction material is also referred to as the ‘clutch lining’);
• A transmission control module (‘TCM’) which contained a printed circuit board (‘PCB’) to which was affixed, amongst other things, two types of integrated circuits known as an ATIC 91 and an ATIC 106. These were affixed to the PCB by means of solder. Ms Capic says that the coefficients of thermal expansion of the PCB and the ATIC 91 and ATIC 106 chips were different and that repeated heating and cooling of the TCM (which is attached to the transmission assembly) created a risk of the solder cracking; and
• A rear main oil seal which had a tendency to leak permitting lubricants to enter the bell housing from the engine side of the transmission and contaminate the clutch and drive plates.
Ms Capic submits that each of the first three risks eventuated in the case of her vehicle and gave rise to a range of symptoms including shudder. Her case, however, is not that her vehicle is not of acceptable quality because the risks materialised, it is rather that it was not of acceptable quality because it was supplied with these risks inherent in it. The full implications of running her case on the basis of risks were not always appreciated by either side.
I have concluded that she has established the existence of each of the risks set out above except the risk said to arise from the rear main oil seal. For each risk she has a separate cause of action under ACL s 271(1) entitling her to claim damages from the Respondent under s 272.
As it happens, I am also satisfied that in the case of her vehicle the three risks which I have accepted also manifested themselves and that after they did her vehicle displayed a troubling range of behaviours. Ms Capic took her vehicle for servicing on many occasions and complained about these problems. For a long time they were not fixed. However, in the case of the input shaft seals they were eventually replaced in a way which satisfies me that after the replacement the risk posed by them no longer existed.
In the case of the TCM the issue is slightly more complex. There are two relevant events. The first involved the installation of a software update known as 15B22 which detected solder cracking before actual symptoms became perceptible to the driver. The second was the replacement of the old TCM with a new TCM with a revised ATIC 91 chip. It is only after this second event that I am satisfied that the relevant risk of TCM failure was removed in Ms Capic’s vehicle. I am not satisfied that she has demonstrated the existence of the problem with the original ATIC 106 chips.
In the case of the friction material I am not satisfied that the Respondent has satisfactorily resolved the problem.
These conclusions matter because the Respondent asserts that it is entitled to rely upon ACL s 271(6) in response to Ms Capic’s claim:
(6) If an affected person in relation to goods has, in accordance with an express warranty given or made by the manufacturer of the goods, required the manufacturer to remedy a failure to comply with a guarantee referred to in subsection (1), (3) or (5):
(a) by repairing the goods; or
(b) by replacing the goods with goods of an identical type;
then, despite that subsection, the affected person is not entitled to commence an action under that subsection to recover damages of a kind referred to in section 272(1)(a) unless the manufacturer has refused or failed to remedy the failure, or has failed to remedy the failure within a reasonable time.
The proper construction of this provision is very difficult and I will not touch upon it here. I will simply say that I accept that the risk inherent in the input shaft seals with which her vehicle was supplied was eliminated when they were replaced and that the risk posed by the TCM was eliminated when her vehicle received a new TCM with the revised ATIC 91 chip.
However, in both cases I do not accept that the Respondent did this within a reasonable time so that s 271(6) does not apply. Consequently, I am satisfied that Ms Capic is entitled to sue the Respondent for the reduction in value damage she has suffered as a result of the supply to her of a vehicle with the three inherent risks.
In addition to her case that the four components above were attended by a risk of failure Ms Capic also pursued a more general case that her vehicle was not of acceptable quality because it had a risk of certain symptoms (principally, but not only shudder) because of what were said to be two architectural features of the DPS6 (‘the Architectural Deficiencies’). These were:
• Inadequate heat management; and
• Inadequate damping of torsional vibrations.
These problems were designated as ‘architectural’ because of a contention that they could not be cured without changes to the architecture of the DPS6 and that this in fact had not occurred. The Respondent denied the existence of either risk. I have concluded that the heat management case does not succeed. However, I have accepted that the manner in which the DPS6 damped torsional vibrations generated a risk that the gears in her vehicle would rattle and that the vehicle would display a slight shudder at low speeds. There was no dispute that there was a risk that these two symptoms could occur. Indeed, the Respondent submitted that they were both ‘normal operating characteristics’ of the DPS6. I have not accepted that the fact that gear rattling and a slight shudder at low speeds are described as normal operating characteristics has the consequence that they cannot constitute a breach of the guarantee of acceptable quality. I have concluded that the fact that Ms Capic’s vehicle was supplied with these two problems inherent in it has the consequence that it is not of acceptable quality for the purposes of s 271(1) and she has another cause of action against the Respondent in respect of them. Since the Respondent claims these features are normal operating characteristics it has not attempted to resolve them.
Damages
Ms Capic claims that she is entitled to reduction in value damages under s 272(1)(a). I have accepted that she is and that she is entitled to the sum of $6,820.91 together with interest up to judgment from 24 December 2012. Ms Capic also claims to be entitled to damages under s 272(1)(b) because, so it is argued, she paid too much GST and stamp duty on the purchase of the vehicle on the basis (as it has fallen out) that it was worth 30% less than the $22,736.36 she paid for it. For myself, there is an interesting and complex question not dealt with by the parties whether an award of these damages is conceptually coherent since Ms Capic is to be placed in the position she would have been if the vehicle had complied with the guarantee of acceptable quality. On one view, this has been done by awarding her $6,820.91 for reduction in value damages and there is then no sense in which GST and stamp duty represent losses, those being amounts Ms Capic always expected to pay in the bargained-for position to which she would have been restored. However, this was not a defence raised by the Respondent. In any event I have determined that even if it had been this issue would not have been a bar to Ms Capic recovering these sums. Of the actual defences raised by the Respondent to this claim for damages, I have not found any persuasive. I therefore award amounts for GST and stamp duty.
Ms Capic purchased the vehicle using a finance lease. She also claims to be entitled to damages for the fact that she was required to ‘borrow’ more than she should have. I have accepted this claim and rejected the Respondent’s defences to it. On each rental payment she paid GST and I have also concluded that she is entitled to an amount to reflect the fact that with lower lease payments she would have paid less GST on these.
Although Ms Capic made a claim for damages for inconvenience, distress and vexation in her pleadings she did not pursue it in her submissions and I make no award for it.
The group claim
Liability
The DPS6 was fitted in 73,451 vehicles imported into Australia by the Respondent. I will call this cohort the ‘Affected Vehicles’. These vehicles consisted of the model lines of the Focus, Fiesta and EcoSport and the dates they were supplied new range from 22 September 2010 to 29 December 2017. The group consists principally of the persons who purchased these vehicles new together with subsequent second hand purchasers between 1 January 2011 and 29 November 2018. The Applicant estimated there are approximately 185,000 people in the group by reasoning that each car had been owned on average by 2.5 persons in this time.
The picture is much more complex in the case of the group than it is in the case of Ms Capic. The vehicles were manufactured by the Respondent’s parent, Ford Motor Company (‘Ford US’). As the problems with the DPS6 became apparent Ford US worked to resolve them. As a solution became available it was gradually implemented in vehicles which were already on the road. However, this was only done where the vehicles presented for service with a problem (except in the case of 15B22 which was installed when vehicles were brought in for regular servicing). This approach is known as a ‘fix on fail’ approach. Ford US also adjusted its manufacturing processes so that the fixes were applied in new vehicles. Turning to the particular problems advanced by the Applicant:
Input shaft seals
I am satisfied that the Affected Vehicles which were supplied with the original input shaft seals posed a risk of failure and that all of these vehicles were at the time of their supply not of acceptable quality.
Where the original input shaft seals have not been replaced no question under ACL s 271(6) arises and these group members have claims under s 271(1) for reduction in value damages under s 272(1)(a) and (if applicable) other reasonably foreseeable loss and damage under s 272(1)(b) .
Where the input shaft seals have been replaced with seals containing both the new FKM elastomer and a steel outer backing on the inner seal, I accept that each relevant group member ‘required’ the repair within the meaning of s 271(6). However, in these cases the issue of whether the repair was effected within a reasonable time was not the subject of the present trial. Both parties eschewed any attempt to prove whether group members’ vehicles had been repaired within a reasonable time by asserting that the other bore the burden of proving this matter. The effect of this impasse was that there is no evidence before the Court on the topic. Had either party attempted to prove this matter it would have been immediately apparent that it could not have been tried as a common issue since it turns on the individual position of each group member. For this reason the only conclusion is that the matter was not tried and could not have been tried as a common issue.
Consequently, it cannot presently be known whether these group members have claims for reduction in value damages although the prima facie position is that they may have claims for other reasonably foreseeable loss and damage under ACL s 272(1)(b). This conclusion about the present uncertainty as to the availability of reduction in value damages does not apply in those vehicles where an input shaft seal was replaced with one containing only the new FKM elastomer but not the new steel backing on the inner seal.
Clutch lining
I am satisfied that each vehicle which was supplied with the original clutch lining material (known as B8080) suffered from a risk of developing symptoms such that it did not comply with the guarantee of acceptable quality.
Some of the Affected Vehicles supplied with this material have never had it replaced. I am satisfied that each such group member has a cause of action under s 271(1) for reduction in value damages under s 272(1)(a) and if applicable for other reasonably foreseeable loss or damage under s 272(1)(b).
Some of the Affected Vehicles supplied with this material have since received replacement clutches using lining material known as RCF1o. I am satisfied that this replacement has removed the relevant risk of symptoms. The Respondent then seeks to rely on s 271(6) to defeat such a group member’s claim for reduction in value damages. I am satisfied that each such group member ‘required’ the Respondent to repair the vehicle, however, the issue of whether it did so within a reasonable time was not tried in the present trial. Its outcome will turn in each case on when the particular group member required the Respondent to repair the problem and when, in fact, the Respondent did so. Since that issue was not tried it is not presently known whether the Respondent has a defence to a claim for reduction in value damages under s 271(6) in the case of such a group member. This will not be known until the individual position of each group member is ascertained. However, as with the input shaft seals, s 271(6) does not affect a group member’s entitlement to seek compensation for reasonably foreseeable loss or damage other than reduction in value damages, ie under s 272(1)(b).
Some vehicles received a replacement clutch known as a half-hybrid B8040/B8080 clutch rather than an RCF1o clutch. I am not satisfied that the Respondent has proved that this half-hybrid clutch eliminated the risk. Consequently, no question under s 271(6) can arise. It follows that these group members do have claims for reduction in value damages as well as for other reasonably foreseeable loss and damage under s 272(1)(b).
Not all of the vehicles were supplied with B8080. Some were supplied with the half-hybrid B8040/B8080 clutch. I am not satisfied that the Applicant has demonstrated that this material posed the risks of failure she alleges and hence I am not satisfied that these group members have a claim for damages in respect of their clutch lining. It will be noted that I have already rejected the Respondent’s reliance on s 271(6) with respect to the half-hybrid clutch. In effect, both parties failed to prove anything useful about the half-hybrid clutch.
In the case of the vehicles which were supplied with RCF1o the group members do not have a claim in respect of the clutch lining.
The TCM
The case based on the ATIC 106 chips fails on the facts. However, the case based on the original ATIC 91 chip is viable. Not all of the Affected Vehicles were supplied with a TCM containing an ATIC 91 chip attended by a risk of solder cracking. Affected Vehicles supplied with a TCM with the revised ATIC 91 chip were not in breach of the guarantee of acceptable quality for this reason and their owners do not have a claim under s 271(1) in respect of it.
The vehicles supplied with TCMs containing the original ATIC 91 chip were not of acceptable quality at the time of their supply because of the risks they posed. The Respondent applied two fixes. First, each vehicle which was presented for service after 27 October 2015 received a software update known as 15B22. It did not address the physical problem of solder cracking but it detected that problem before the symptoms associated with it became perceptible to the driver and disabled the vehicle in a sufficiently confronting way, attended with warning lights and messages, that it may be accepted that a driver would take the vehicle in for service almost immediately and without fail. Secondly, once new TCMs with the revised ATIC 91 chip became available these were inserted into vehicles which showed symptoms of TCM failure or which had been brought in for service due to the operation of the warning system instituted by the 15B22 software update.
The first fix was effective in those vehicles into which it was installed where replacement TCMs with the revised ATIC 91 chip were available in service stock but not effective in those vehicles in which it was not installed or where it was installed without the corresponding availability in service of TCMs with the revised ATIC 91 chip. The second and third class of these have claims for reduction in value damages if their original TCM was not otherwise replaced. It is not known whether the first class have claims for reduction in value damages in respect of this issue because, while I accept that the installation was an effective repair for the purposes of s 271(6) where new TCMs were available as replacements in service, the issue of whether the repair took place within a reasonable time has not been tried nor has it been shown for each group member that replacement TCMs with the revised ATIC 91 chip were in fact available.
The replacement of the original TCM with a new TCM with the revised ATIC 91 chip was a successful repair and removed the risk posed by the original TCM. However, in the case of each such group member it is not presently known whether the replacement was effected within a reasonable time. It cannot presently be known whether these group members have claims for reduction in value damages.
Rear main oil seal
The group members have not established that any of the Affected Vehicles had an inherent risk of failure due to the rear main oil seal. This claim fails.
Inadequate heat management
The group members have not established that their vehicles had an inherent risk of failure because of the way in which heat was managed in the DPS6. This claim fails.
Rattling gears and slight shudder at low speeds
I am satisfied that all Affected Vehicles have a risk that they will develop these symptoms due to the manner in which the DPS6 damps torsional vibrations. I have concluded that the Affected Vehicles do not comply with the guarantee of acceptable quality because of this issue. The Respondent has not attempted to resolve this.
Damages
The group members sought damages on an aggregate basis under s 33Z(1)(f) of the Federal Court of Australia Act 1976 (Cth) (‘FCA Act’). Such an award may only be made if the Court is satisfied that a reasonably accurate assessment can be made of the total amount to which group members will be entitled: s 33Z(3). Since it is not presently known which group members have which causes of action for reduction in value damages the question of whether there can be aggregation under this provision does not yet arise. The claim is therefore refused on the current state of the case. If and when the issue of whether the various repairs were effected within a reasonable time is resolved, this question may be revisited.
For reasons explained more fully in Section XIV, this conclusion is not disturbed by either of the following matters:
First, that all group members have causes of action in relation to the risks of rattling gears and a slight shudder at low speeds which I have concluded are caused by inadequate torsional damping. This was a comparatively minor issue when compared with the Applicant’s case on the Component Deficiencies. In any event, an award of aggregate damages cannot be made unless the Court can arrive at a reasonably accurate assessment of the total amount to which group members are entitled under the judgment: FCA Act s 33Z(3). This is not possible for reasons I have just outlined.
Secondly, that the group’s aggregate damages claim incorporated amounts for alleged excess finance and tax and repair time costs, comprising other reasonably foreseeable loss or damage under s 272(1)(b). While the entitlement to damages under that provision does not depend on the continued existence of a cause of action for reduction in value damages, nonetheless it is not possible to make a reasonably accurate assessment of group members’ total entitlement. In any event, as I explain in Section XIV, any assessment of excess finance and tax losses cannot be undertaken until the quantum of any entitlement to reduction in value damages is known. The result therefore is that there can yet be no award of aggregate damages.
Finally, before moving to the substantive issues in the case, it should be recorded that this trial was conducted during the Victorian lockdown in 2020 in circumstances of considerable hardship for both parties, their lawyers and those working within the Court. The entire 6 week trial was conducted by means of a virtual platform with not a single appearance in a court room by any person. This required a high degree of co-operation between the legal representatives for the parties. Whilst no doubt the trial was conducted with little quarter given by either side to the other, this formal hostility did not extend to facilitating the orderly conduct of the trial in the difficult circumstances of the pandemic. The Court records its thanks to the representatives of the parties for bringing the matter to trial in this fashion.
SECTION II: THE AFFECTED VEHICLES
The Affected Vehicles consist of 73,451 separate vehicles manufactured by Ford US under the model lines Focus, Fiesta and EcoSport during the period between July 2010 and December 2016. Each of the vehicles was manufactured either in Rayong in Thailand, Saarlouis in Germany or Chennai in India. Each of the vehicles is equipped with the DPS6 transmission. Further, each of the vehicles was sold by the Respondent through Ford Australia dealerships to consumers in the Australian market.
Apart from the three model lines, the vehicles may relevantly be further sub-categorised by reference to their year of production and their engine size. In the case of production year, there can be a lag of up to one year between the time a vehicle is physically assembled at a Ford plant and the time at which it is eventually sold. Whilst sometimes the model year of a vehicle can be the same as the production year this is not inevitably so and for some vehicles the model year is the year following the production year. This is so, for example, in the case of the Affected Vehicles bearing a 2017 model year, as all were produced in 2016.
The Applicant’s submissions summarised the composition of the fleet of Affected Vehicles in Table 1 of her submissions which is based upon production year:
A table was also prepared by reference to model year (as opposed to production year):
The Respondent’s submissions contained a similar set of tables which very marginally differed. After judgment was reserved I queried the parties as to the discrepancy. On 6 August 2020, my Associate was informed by the parties that the Court should rely upon the tables in the Applicant’s submissions. The minor discrepancy related to the inclusion in the Respondent’s figures of some vehicles which had never been sold. For that reason, I will act on the basis of the tables I have just set out.
The Ford Focus constitutes the largest segment of the Affected Vehicles (57.9%) followed by the Fiesta (34.2%) and the EcoSport (7.9%). The small number of EcoSports involved is a reflection, in part, of the fact that it did not enter production until 2013. It will also be noted that there is a significant decline in the number of Affected Vehicles manufactured after 2014. Most of the Affected Vehicles (88.6%) were manufactured between 2010 and 2014 and 11.4% were manufactured in 2015 and 2016.
Next it is useful to note where these vehicles are located in the wider market for all vehicles. The Fiesta and EcoSport are what are known as B-segment vehicles whilst the Focus is a C-segment vehicle. Both B- and C-segment vehicles are designed to be lightweight, fuel efficient and relatively inexpensive to purchase and operate in comparison to larger and more expensive vehicles in the D-segment (eg the Audi A4) or the E-segment (eg the Mercedes-Benz E-class). C-segment vehicles are generally larger than B-segment vehicles. The Focus is larger than the Fiesta but similar in size to the EcoSport. B- and C-segment vehicles are typically equipped with smaller engines between 1.0 and 2.0 litres in size.
Although the tables above refer to engine size without discrimination between engine type, there is a debate between the parties about the role of ‘dual mass flywheels’. I need not explain what that debate is at this point (see Section X below) although it concerns the kind of flywheel connecting the crankshaft to the drive plate (I explain these terms below at Section IV).
The flywheel debate does make it necessary, as a matter of background, to understand that, with the exception of the 1.0L Fiesta, all the Affected Vehicles have 4-cylinder engines. Each of these engines was equipped with a ‘single-mass flywheel’. The 1.0L Fiesta, on the other hand, was built with a turbocharged 3-cylinder engine (known as the ‘Fox’) equipped with a dual mass flywheel. I return to the large topic of dual mass flywheels and torsional vibrations below at Section X. It forms a significant part of the engineering debate between the parties.
Within model lines there were further distinctions which reflected differences in trim or additional functionality. In general, different levels of trim can range from the cosmetic (ie, leather seats instead of fabric) through to improvements in performance and comfort (ie, increased sound insulation and better powertrain mount tuning). For the Affected Vehicles, these different trims can be identified by each model line’s badge. The Affected Vehicles include the Fiesta in six different badges (CL, LX, ZETEC, Ambiente, Trend and Sport), the EcoSport in three (Ambiente, Trend and Titanium) and the Focus in four (Sport, Ambiente, Trend and Titanium/Sport). Nothing in this litigation turns on the differences between badges but since they often appear in the evidence it is useful to know what they mean.
I was not taken to any evidence directly on this matter, but in submissions the Applicant referred to there being 64,963 Affected Vehicles remaining from the 73,451 once the settled claims had been removed. In any event the total number of vehicles remaining in the class is not material at this stage.
SECTION III: PROCEDURAL CONSEQUENCES OF THE WAY THE CASE WAS RUN
The Applicant’s case that the Affected Vehicles were not of acceptable quality is principally found at §6AB of the fourth further amended statement of claim (‘4FASOC’). It is a case alleging that the vehicles had a propensity towards certain identified misbehaviours. There was no issue in the case as to whether individual vehicles in the class actually exhibited the misbehaviours (although there was in Ms Capic’s individual case). This interpretation of §6AB reflected the parties’ understanding of it with which the Court had previously agreed: Capic v Ford Motor Company (No 3) [2017] FCA 771 at [16]. Any inquiry into the individual position of vehicles within the class would not have presented common issues suitable for determination in a class action trial. The Applicant did not therefore seek to prove the individual position of vehicles within the cohort. It is true that the Applicant did call 52 other group members to give evidence about their vehicles but she submitted their relevance was only to give anecdotal support for her case that the vehicles suffered from the propensities alleged and to exemplify the expectations of a reasonable consumer.
The case therefore is about the existence of propensities (or risks) of identified forms of vehicle misbehaviour. The method of proof selected by the Applicant was to seek to prove that the propensities or risks existed because of particular mechanical features of the DPS6. In an ordinary claim that goods are not of acceptable quality the question of why they are such is irrelevant. For example, if I buy a kettle and it does not work, it does not matter why it does not work. It is not of acceptable quality simply because it does not work. The applicant in such a case has no need to prove its design or componentry deficient, just that it does not work. However, where a case of unacceptable quality is pursued on the basis that the goods pose a risk of some kind, the qualities of the argument necessarily require an identification of some reason why the risk exists. Ordinarily, this will require some form of practical explanation of a problem in construction or design. For example, if an applicant wishes to prove that a kettle is defective because it has a 5% risk of exploding, it will usually be necessary to explain what it is about the kettle that gives rise to that risk. The only other alternative would be to rely on sufficiently robust empirical data to show that in fact 5% of the kettles did explode.
The manner in which the Applicant sought to prove the existence of the risks of the alleged misbehaviours was multi-faceted. She relied on:
• the evidence of Dr Jürgen Greiner, a transmissions engineer;
• the evidence of herself and 52 other members of the group as to the difficulties they had had with their own vehicles;
• evidence derived from warranty claims and complaints data maintained by the Respondent;
• documents produced by Ford US which were referred to by Dr Greiner in his reports; and
• documents produced by Ford US which were not referred to by Dr Greiner in his reports.
For reasons I explain more fully in Section XVI the Applicant’s case was that the vehicles suffered from the risks of misbehaviour identified by Dr Greiner. This was not the way that §6AB of the 4FASOC was particularised but the Applicant later notified the Respondent that she would prove the existence of the deficiencies through Dr Greiner. By the time the matter came to trial, it was on this basis that it was conducted. The parties chose to make the correctness of Dr Greiner’s evidence the field of their dispute which they were at liberty to do.
Dr Greiner referred to a number of documents which had been created by Ford US and, in relation to these there is no doubt that the Respondent has been given an opportunity to meet the Applicant’s case. However, at the end of the trial the Applicant tendered a number of Ford US documents not referred to in Dr Greiner’s evidence without indicating at any time prior to her closing written submissions what their significance was. As I explain in Section XVI this is procedurally unfair and will not be permitted.
In relation to the 52 vehicle owners who were called, I explain in Section V as to why I do not think I can rely on their evidence to substantiate the existence of risks across the Affected Vehicles where the Applicant provided no evidence as to how these witnesses had been selected or what the statistical value of a sample of 52 vehicles from a cohort of 73,451 might be.
Consequently the case that the Respondent was required to meet on the existence of the alleged propensity of the vehicles to misbehave was the case consisting of:
• Dr Greiner’s evidence including the Ford US documents referred to by him;
• The Respondent’s warranty and complaints data and the evidence derived from that data.
It is then necessary to identify features of the DPS6 relevant to the Applicant’s case.
SECTION IV: THE NATURE AND RELEVANT FEATURES OF THE DPS6
The DPS6 is a dry dual clutch transmission. A dual clutch transmission is a transmission with two clutches. In the DPS6 one clutch operates the odd numbered gears (‘clutch 1’) and the other the even numbered gears along with reverse (‘clutch 2’). This permits the transmission to have two gears selected at once. Clutch 1 is attached to an inner input shaft which is itself located within a hollow outer input shaft to which clutch 2 is attached. In both cases, the clutch plate sits between a pressure plate and a central drive plate. The pressure plates are controlled by actuators and squeeze the relevant clutch plate onto the drive plate. The drive plate is connected to the crankshaft (via a flywheel) and it is the crankshaft that takes power from the engine. The clutch plate is connected to the input shaft. When a gear is fully engaged, the drive plate and the clutch plate move at the same rotational speed and are pressed onto each other such that power flows from the crankshaft to the input shaft and from there through the transmission to the gears to drive the car. When the vehicle is moved from a standing position (‘launch’) or when a gear change is performed, the clutch plate and the drive plate move at different speeds until they are brought to the same speed in the same way as occurs in a manual transmission. This period of transition depends on the frictional qualities of the clutch lining or friction material which lines the relevant faces of the clutch plates, the pressure plates and the drive plate. This material is an important element in the operation of the transmission and its frictional qualities dictate the manner in which the transmission operates. Because there are two clutches in a dual clutch transmission there are four areas of frictional contact involved, one on each side of the drive plate and one between each clutch plate and its respective pressure plate. Below are two diagrams of the DPS6 architecture. By way of explanation, in the labels K1 refers to clutch 1 related components and K2 to clutch 2 related components, while the clutch plates are labelled ‘clutch disc’ and the drive plate is labelled ‘central plate’.
Because humans do not have three legs, it is generally not feasible for a dual clutch transmission to be operated by the driver. In the DPS6 the control of the two clutches is given over to a computer located on the transmission control module (‘TCM’). When the transmission is in one gear it works out what the next gear change will be and selects that gear whilst the relevant input shaft is not connected to the engine (via the drive plate–clutch plate system). The next change of gear therefore avoids any delay whilst the new gear is selected and correspondingly there is no need for an interruption in the delivery of power whilst the transmission is disengaged from the drive plate (as occurs in a manual when the clutch is disengaged in order to allow the driver to physically shift into the next gear with the gearstick). A change of gear in the DPS6 therefore only requires a switch of power between the input shafts, brought about by disengaging one clutch plate while simultaneously engaging the other clutch plate with the corresponding side of the drive plate.
With that brief discussion in mind, the following concepts are relevant to this litigation:
(a) Clutch lining. The surfaces of both sides of each clutch plate and the drive plate, along with the surfaces of the pressure plate that face the clutch plate are lined with the clutch lining material. The frictional qualities of the clutch lining are, as I have already said, central to the operation of the transmission. The TCM knows what these qualities are and they are factored into the procedures it uses for changing gears. Unpredictable variations in the frictional qualities of the clutch lining disrupt the process of gear shifts in ways which are themselves unpredictable. The frictional qualities of the clutch lining are also affected by heat, that is to say, some clutch lining materials behave differently (and unpredictably) the hotter the transmission is. This clutch lining is also referred to interchangeably in the evidence as clutch material or friction material.
(b) Clutch slip. When the clutch plate and the drive plate are fully engaged with each other they are pressed together in a state of static friction and rotate as one so that power passes from the engine through them to the gears and then on to the wheels. When they are being introduced to each other, on the other hand, they move at different speeds until they are brought to the same speed. The initial difference in their rotational speeds reflects the fact that after launch the drive plate will be rotating at a rotational speed related to the rotational speed of the crankshaft (with the influence of the flywheel in between) whereas the clutch plate will not be rotating at all. As they are gradually introduced to each other by increasing the pressure exerted on the clutch plate side (by a spring loaded pressure plate) the clutch plate begins to rotate sympathetically with the drive plate until, ultimately, it is rotating at the same speed. Whilst in the transition from not rotating at all (in a state of full disengagement before launch) to rotating at the same speed as the drive plate, the clutch is said to be in slip phase which reflects the fact that the plates are rotating at different speeds and therefore necessarily in a state of kinetic friction. Although this sounds complex, for persons who can drive a manual vehicle the ideas will be familiar. In particular, in a manual vehicle the slip phase corresponds to the skill involved in re-engaging the clutch by lifting your foot off the clutch pedal following a gear change. Clutch slip is used during gear changes but it may also be used as a form of braking. For example, the practice of ‘riding the clutch’ in a manual vehicle when on a slope so as to keep the vehicle stationary involves keeping the clutch in a constant state of clutch slip. This practice is generally regarded as unsound in a manual vehicle as it wears out the clutch lining and generates heat. One of the issues in this case concerns the programming of the TCM to use clutch slip as a method for damping torsional vibrations. This brings one to torsional vibrations:
(c) Torsional vibrations. The pistons in an internal combustion engine are attached to the crankshaft. Because they fire at different times this means that the crankshaft accelerates as each piston fires and then begins to decelerate as the explosion finishes and continues to drop off until the next piston fires. Although it is usual to say that the crankshaft is rotating at a particular rate of revolutions per minute (rpm) this is in fact an incomplete description of what is occurring. In reality, the rotational speed of the crankshaft is not constant but oscillates at a high frequency related to the rate at which the pistons are firing. The intermittent nature of the piston firing also means that the turning force (or torque) output by the crankshaft also fluctuates. Torsional vibrations are a product of the fluctuations in both the speed and torque of the crankshaft. In an internal combustion engine they are a fact of life but can have negative consequences. For example, the presence of a vibrational oscillation in a vehicle may have unwelcome consequences if the frequency of the oscillation coincides with a harmonic frequency of any other component in the vehicle. When this occurs other components of the vehicle may begin to rattle. Consequently, at some point some effort must be made to damp the torsional vibrations produced by the engine. There are several ways of doing so. In the DPS6 the TCM was programmed to soak up the torsional vibrations by using clutch slip and also with the use of ‘torsional springs’ known as inner dampers which were located within the clutch plates. Other ways exist too, for example, by placing a flywheel on the crankshaft equipped with dampers. All of these solutions have strengths and weaknesses. A flywheel with torsional dampers will reduce torsional vibrations. But nothing is for free. Such a flywheel is heavy and can affect the vehicle’s fuel consumption. Further, the same phenomenon which soaks up the torsional vibrations also guarantees that more engine power is needed to drive the crankshaft. This corresponds with a reduced responsiveness in the vehicle to applications of power (and an overall reduction in power).
(d) The TCM. The TCM is a computer consisting of several integrated circuits soldered to a printed circuit board and is bolted onto the transmission housing (which is also referred to as the bell housing). As such it is exposed to the heat generated by the transmission. The temperature the DPS6 operates at depends, inter alia, on the amount of heat generated through the friction involved in clutch slip. This fluctuates with the manner and frequency of gear changes. A vehicle with a lot of gears will have more frequent gear changes and is likely to run hotter. The picture then is one of fluctuations in temperature. The integrated circuits and the printed circuit board expand and contract when heated and cooled. For the reasons just given, this occurs very frequently in a dual clutch transmission. If they expand and contract at different rates, this will expose the solder to mechanical strain and may cause cracking in the solder over time. Cracking in the solder in turn may cause electrical conductivity issues which may cause the TCM to behave erratically. This problem does not occur if the printed circuit board and the integrated circuits soldered to it have the same coefficient of thermal expansion, as the expansion and contraction would then occur at identical rates.
(e) Input shaft seals. The DPS6 is a dry dual clutch transmission. In general, dual clutch transmissions may be wet or dry. A wet transmission is one in which the clutch plates are bathed in a liquid. The purpose of the liquid is to remove heat from the transmission. A dry dual clutch assembly is one in which the clutch and drive plates are not so bathed but are instead cooled by the surrounding air in the bell housing, with the rotating clutch plates acting as fans. One advantage of a dry clutch is that it is lighter and the clutch plates experience less resistance when rotating (which improves fuel efficiency). A disadvantage is that air cooling is not as efficient as liquid cooling due to the higher heat capacity of liquids. In a dry clutch transmission the desired frictional properties of the clutch lining are premised on the clutch lining remaining dry. How is this achieved? The input shaft to which the clutch is connected is exposed in the gearbox to lubricants. It is important for the operation of the clutches that these lubricants do not find their way onto the surface of the clutch lining. The clutch plates and drive plate faces must therefore be sealed from the gearbox. This is achieved by means of seals. Relevantly there are two seals, both known as input shaft seals, which serve this purpose (one for the inner input shaft and one for the outer input shaft). If the input shaft seals fail then lubricants may find their way onto the clutch lining. The presence of fluid on the clutch lining affects the frictional qualities of the clutch lining and may cause the clutches to behave in unpredictable ways.
(f) Rear main oil seal. The problem just described exists on both sides of the transmission. Just as the clutch lining must be kept free of contamination from lubricants coming from the gearbox side so too must it be protected from oil contamination coming from the engine side. The purpose of the rear main oil seal is to provide that protection at the point where the crankshaft exits the engine and enters the transmission environment.
(g) Heat management. When a clutch is in its slip phase, the kinetic friction involved generates heat. Heat may affect the frictional qualities of the clutch lining. The clutch lining must be such as to perform predictably in the heat environment in which it finds itself. Where the clutch lining is not sufficient in a given temperature environment there are two possible solutions. Either the clutch lining material may be changed so that it can operate predictably in the actual heat environment of the transmission or additional cooling measures may be introduced into the transmission. For example, one might change to a wet clutch configuration or, perhaps, increase the air flow throughout the transmission by some means (like a fan).
(h) Wet clutch shudder. The term ‘shudder’ was used in a somewhat amorphous manner in this litigation to describe undesirable vehicle behaviour that is caused by a number of distinct problems. Wet clutch shudder is that subset of shudder which is the result of lubricating fluid contaminating the clutch lining and causing it to behave unpredictably.
(i) Dry clutch shudder. In distinction to wet clutch shudder, dry clutch shudder refers to that shudder emanating from the errant behaviour of clutch plates that have not been contaminated with fluid. Within this genus, ‘self-excited shudder’ is that which is linked to the inherent frictional properties of the clutch lining material, while ‘forced-excited shudder’ is the result of geometric variability in the clutch components.
SECTION V: THE WITNESSES
The Applicant’s lay witnesses
Ms Capic
Ms Capic gave her evidence in chief by means of three affidavits dated 7 June 2018, 22 November 2019 and 5 May 2020. She was cross-examined on Thursday 18 June 2020 and Friday 19 June 2020 which were the 4th and 5th days of the trial. The cross-examination appears at T222-330.
The principal issue about her credit turned on some evidence she gave in relation to the financing of her vehicle. It is therefore necessary to understand that financing before that evidence can be assessed.
Ms Capic currently works for herself as a business consultant providing, inter alia, payroll management and bookkeeping services. At the time she gave her evidence she was 35 years old. On 24 December 2012 Ms Capic purchased a 2012 Ford Focus LW MKII Sport 2.0L from Sterling Ford who traded from Bundoora in Victoria. It was a 5 door hatchback and its colour was frozen white. In addition, Ms Capic also paid for tinted windows and some carpet mats. On top of these costs there were some on-road costs. The purchase costs for the vehicle were as follows:
Vehicle
$25,627.27
Carpet mats – 3pcs
$65.00
Window tint
$200.00
Discount:
-$2,890.91
Dealer delivery
$1,540.91
Total:
$24,542.27
GST:
$2,454.23
In addition there were the following on-road expenses:
Registration fee
$232.30
Compulsory third party
$464.20
Slimline Plate Fee
$92.00
Stamp Duty
$810.00
Total:
$1,598.50
Thus Ms Capic was required to pay the following amounts on the acquisition of the vehicle:
Car purchase costs
$24,542.27
GST
$2,454.23
On-road costs
$1,598.50
Total:
$28,595.00
On the same day, Ms Capic entered into a ‘novated finance lease’ with BMW Australia Finance Ltd (‘BMW Finance’) under which an amount of $27,930.27 was financed. A copy of the terms of this lease is not available but the evidence does include an amortisation schedule and it corroborates Ms Capic’s evidence that the lease was a novated finance lease. There was no direct evidence about this but I propose to assume that a novated finance lease is a hire purchase arrangement where an employer (a) agrees to meet the rental payments due under a hire purchase arrangement in relation to a motor vehicle provided to an employee; but (b) is not obliged to make the residual payment at the end. Ms Capic gave evidence that at the time of this first lease she was employed by IN-Fusion Management Pty Ltd and that it was a term of her employment agreement that she would be provided with a car. A copy of that agreement was not in evidence but Ms Capic says that she entered into a fresh employment contract with IN-Fusion Management Pty Ltd on 1 June 2014 in which there was a similar term. That agreement is available. One of its provisions is as follows:
In addition to your remuneration, you are also provided with a fully maintained motor vehicle which will operate under a personal novated lease. IN-Fusion Management will be responsible for meeting all lease payments on your behalf whilst you are an employee of the business and; be responsible for the costs associated with running and maintaining the vehicle accordingly, for example, Fuel, Registration, Insurance, Servicing, Tolls and Repairs.
In this case, one can discern from the amortisation schedule which was put in evidence that the lease had a four year term with monthly payments of $586.09 (including GST). There was a residual payment of $12,839.20 (including GST) due at the end of the fourth year on 24 December 2016. There is a gap of $664.73 between the total purchase price due to Sterling Ford of $28,595.00 and the amount provided by BMW Finance of $27,930.27. I am unable to account for this anomaly.
In August 2016 Ms Capic’s employer IN-Fusion Management Pty Ltd went into administration. In the period between 24 August 2016 and 25 October 2016 it appears to have continued to have been debited for the payments under the lease but on each occasion the payments were dishonoured. Ms Capic says, and I accept, that IN-Fusion (or perhaps what had been its business) was eventually purchased by a new entity, Interstate Enterprises Pty Ltd which traded as ‘Tecside Group’. Tecside employed Ms Capic under an employment contract dated 16 September 2016. It contained this term:
At the time of writing this offer, Tecside will continue with the current arrangements in relation to your novated lease. We will, however, reserve the right to incorporate the lease into your salary as a salary sacrifice arrangement. This will not impact your current net salary.
This was apt to pick up the former arrangement with IN-Fusion. A document entitled ‘BMW Group Financial Services – Transaction Inquiry’ printed on 17 September 2019 contains a complete history of the amounts due and payments made under the BMW Finance lease. It records that a single payment of $1765.77 was made on 14 December 2016 which was the amount by which the lease with BMW Finance had by then fallen into arrears. I infer that this payment was made by Tecside. This was, however, the only payment ever made by Tecside because on 24 December 2016 the BMW Finance lease expired under its own terms. Tecside’s obligations to Ms Capic were only to meet the rental payments and it was not obliged to, and did not, pay the residual amount then due. The residual was $12,839.20.
Ms Capic did not pay the residual either, at least not at that time. BMW Finance’s Transaction Inquiry document records that it corresponded with Ms Capic on 11 January 2017, 20 January 2017 and 28 February 2017 and I infer that is likely to have been in relation to her obligation to pay the residual.
One may infer that if unattended for a sufficiently long period of time it is possible that BMW Finance might have repossessed Ms Capic’s vehicle under the terms of the finance lease. In any event, by May 2017 it is clear that steps were underway designed to secure a new finance lease in the amount of the outstanding residual due under the BMW Finance lease. Ms Capic’s evidence in her affidavit of 7 June 2018 was that she thought that it was Tecside’s obligation to secure a new finance lease: §30. She says that on 22 March 2017 she signed an invoice for the sale of her vehicle. Whilst this is correct it is not an entirely complete statement. She was also the person to whom the vehicle on sale was to be supplied to. The sale price was for the amount of the residual payment of $12,839.20. Ms Capic is recorded therefore both as the vendor and as the person to whom the vehicle was to be delivered.
However, I am satisfied that no such transaction occurred on 22 March 2017. As I shortly explain, Ms Capic did not obtain finance until 29 May 2017 and I do not think Ms Capic could, or at least would, have paid out the first lease until the second lease was entered into. A more likely explanation for the date of this document is that it is a document which was, for some reason, thought necessary to facilitate the second lease.
That second lease was procured, and in fact probably advanced, by Ms Capic’s finance broker, Mr Crea. According to her evidence, he had been in touch with her and had impressed upon her the need quickly to refinance the amount due to BMW Finance. Under cross-examination she said that it was Mr Crea’s company Melbourne Finance Broking Pty Ltd which had refinanced the residual. Certainly the lease that began 29 May 2017 suggests that the lessor was Melbourne Finance Broking Pty Ltd as trustee for the Melbourne Finance Broking Unit Trust. Puzzlingly, however, subsequent demands for payment appear to have come from Macquarie Leasing Pty Ltd (‘Macquarie Leasing’) but it was not a party to the second finance lease. A letter from Macquarie Leasing dated 11 November 2019 seems to record a payment having been received on 30 May 2017. Furthermore, another letter from Macquarie Leasing dated 13 November 2019 appears to be, at first glance, a record that the first monthly payment of $368.18 had been made by Ms Capic to Macquarie Leasing on 29 May 2017. That might suggest that Macquarie Leasing has been the lessor on that day which is the same date as the lease with Melbourne Finance Broking. However, closer examination does not bear this out. The document is in fact merely an amortisation schedule and bears an annotation ‘This is not a payment history or statement of account and therefore does not reflect actual payment activity on your contract’. It would be unsafe to rely on this document to infer that Macquarie Leasing was first paid on 29 May 2017.
At T261.16 Ms Capic gave evidence that she thought, based on the documents, that Melbourne Finance Broking had paid out the first lease but that subsequently a new lease had been entered into. I do not think Ms Capic was purporting to give this evidence as an explicit exercise in recollection; rather, it was an attempt to explain why Melbourne Finance Broking appeared to have been the lessor on 29 May 2017.
There is clearly a missing piece in the evidence. There are only two available explanations. Either Melbourne Finance Broking novated the second lease to Macquarie Leasing or a fresh, third, lease was entered into with Macquarie Leasing which was used to refinance the second lease with Melbourne Finance Broking. Ms Capic’s reconstruction of events is consistent with the latter but I do not think her speculation is especially probative. As will be seen, it is not necessary to resolve this issue, although I would express a preference for the novation theory were it necessary – it seems more consistent with the absence of any evidence of a third lease. What is important, however, is that on either view, Melbourne Finance Broking was to be the lessor on 26 May 2017 and this means that it (and Mr Crea) were acting in that capacity on that day.
The second lease was a 3 year finance lease requiring the payment of 36 instalments of $386.18. Shortly after the second finance lease was executed (on 26 May 2017) Ms Capic was made redundant by Tecside. This occurred in June 2017. Tecside agreed however to continue to meet the lease payments under the second lease until 30 November 2017. I infer that it made no payments after that date. Consistently with the drawing of that inference, Macquarie Leasing wrote to Ms Capic on 29 January 2018 pointing out her account had fallen into arrears. This letter confirms that at least by then the lessor was no longer Melbourne Finance Broking although it does not explain how that came to be.
Ms Capic then began meeting the lease payments herself. The second (novated) or perhaps third (new) lease was due to expire on 29 May 2020 at which time she was bound to make a residual payment of $6,355.40. A few weeks before that day dawned, Ms Capic had already affirmed at §20(a) in her affidavit of 5 May 2020 that she felt financially trapped by her finance lease. She also said that between the date of that affidavit and 29 May 2020 (a period of only 24 days) she would shortly have to meet the residual payment and the then single remaining monthly instalment under the second (or perhaps third) lease. At trial she confirmed that she had in fact made these payments: T247.20.
It is then useful to turn to the credit attack which the Respondent launched across this somewhat dry ground. It submitted that Ms Capic had given evidence about her entry into the second finance lease which was not to her credit. The submission went this way: on 26 May 2017, her finance broker had sent her documents to be executed for the second lease and she had completed these. One of the documents was the lease itself which she signed. The document contained a section under which Ms Capic was asked to give a number of acknowledgements and warranties. Clause 3 was as follows:
Except for any defects disclosed in Item 4 of Schedule 1, the Goods are of merchantable quality and free from defect.
But no defect had been notified in the schedule. This was submitted to be surprising because Ms Capic had by then commenced this proceeding (on 17 May 2016) just over a year before. In the proceeding she already had alleged, at §19 of her original Statement of Claim, that her vehicle suffered from a number of identified problems and was not of acceptable quality within the meaning of ACL s 54. She found herself in the position therefore of having alleged in this class action that the vehicle was defective but having afterwards warranted to Melbourne Finance Broking that the vehicle was of merchantable quality and free from defect. This involves a potential inconsistency.
Ms Capic was extensively cross-examined about the inconsistency at T257-258 and her evidence was ultimately that she had in fact verbally told her broker, Mr Crea, about the defects. She was also criticised for not mentioning the fact that she had done so in any of her affidavits. Whilst I do not think Ms Capic is to be criticised for not mentioning the matter in her affidavits, I do not accept her evidence that she told Mr Crea of the problems with the vehicle for two reasons. First, Ms Capic had an incentive not to tell Mr Crea about the difficulties with the vehicle. Secondly, it seems doubtful had Mr Crea been informed of the problems with the vehicle as Ms Capic then perceived them that he would have extended the finance to her.
As to her failure to include her discussion with Mr Crea in any of her affidavits: I do not think this especially remarkable. Whether Ms Capic told Mr Crea about the vehicle’s problems does not relate to any issue in her case in chief. It was not raised in any of the Respondent’s evidence. It only finally became relevant once the Respondent decided to make a credit issue out of it during the cross-examination.
As to her motive not to tell Mr Crea about the problems with the vehicle: by 26 May 2017 Ms Capic was in need of finance. The residual under the BMW Finance lease had been due for many months and BMW Finance had written to her several times after the lease had expired. It is reasonable to infer that at some point BMW Finance would have looked to its rights. By 26 May 2017, Ms Capic had been in default for 5 months by not paying the residual. She may have been right that it was Tecside’s responsibility to organise another lease (I offer no view on that question) but, at the end of the day, if BMW Finance repossessed the vehicle after the non-payment of the residual, it was in a real sense, her problem. I think it fair to infer in that circumstance that she had a real motive to organise the second lease and that this need had become more pressing by 26 May 2017.
Furthermore, by May 2017 Ms Capic’s perception of her vehicle was negative. The car was serviced on 30 May 2017 very shortly after the date she signed the second lease. Her evidence in her affidavit of 7 June 2018 was that she had told the Ford dealer when it was serviced on that day that the vehicle was displaying the usual problems, ie shuddering, not enough power, vibration and an inability to take off. On this occasion the dealer replaced the clutch and input shaft seals. In her affidavit of 5 May 2020, she said at §20(b) that she could not in good conscience sell the car to another person. She had earlier stated this in her affidavit of 7 June 2018 at §153. Irrespective of the mechanical realities of Ms Capic’s vehicle, there seems little doubt that she was subjectively deeply dissatisfied with it. One does not, after all, start a class action on a whim. I infer that as at the time Ms Capic entered into the second lease on 26 May 2017, she thought her vehicle was something she could not in good conscience sell to another person. Although her evidence to that effect was only forthcoming in her 7 June 2018 affidavit, I do not think that at this point this was a revelation at which she had only recently arrived. It seems to me that it is likely to have been her view since at least the commencement of the class action.
Ms Capic found herself in the position on 26 May 2017 of needing the finance to avoid difficulties with BMW Finance but being the owner of a vehicle about which she had grave doubts. Revelation of the problems her vehicle presented to Mr Crea might well have led, in Ms Capic’s perception, to Melbourne Finance Broking refusing to refinance the residual. And, for the reasons I have already given, the situation by May 2017 was such that Ms Capic had been in default with BMW Finance for some months. These two factors gave Ms Capic incentives not to tell Mr Crea about the difficulties with the vehicle. I do not disregard the fact that Ms Capic denied that she had kept the matter from Mr Crea in order to ensure that the finance would be forthcoming, saying at T263.4 under cross-examination that she had not thought of that ‘until you [ie, the cross-examiner] just mentioned that now’. I accept that it is unlikely she set out deliberately to keep this from Mr Crea. A more likely scenario is that the two incentives lingered at the fringe of her conscious mind and merely edged her towards non-disclosure without her ever forming a complete thought that she would not disclose.
As to the unlikelihood of Mr Crea extending finance if informed of the problems with the vehicle: Ms Capic was seeking to refinance the residual under the BMW Finance lease. This was an amount of $12,839.20. Although some care should be exercised in assuming that this figure represented the depreciated value of Ms Capic’s vehicle by 26 May 2017 (the rates of depreciation set for tax purposes are usually higher than actual depreciation rates so as to encourage the replacement of equipment and hence economic growth) nevertheless it is a useful benchmark by which to gauge the value of the car even if only in a rough way. It is sufficient, for example, to conclude that for the amount being borrowed the loan to value ratio would have been reasonably high and hence the quality of the security was important. The revelation to Mr Crea that the vehicle was beset with the difficulties about which Ms Capic was complaining in 2017 would have affected the potential realisable value of the only security she was offering. It is difficult to see that it would have been in the interests of Mr Crea to extend the finance without knowing quite a bit more about what the difficulties were. Since Melbourne Finance Broking was the initial lender under the second lease this was not just a problem which could be waved through to some unfortunate third-party financier. Just as BMW Finance was Ms Capic’s real problem, so too it would have been Mr Crea’s real problem if he had lent against the vehicle’s capital value knowing, as on this hypothesis he would have, that it suffered from multiple problems and knowing, as he would have, that Ms Capic was in default under the BMW Finance lease. It is possible Mr Crea might have proceeded despite these problems, but it strikes me as unlikely.
These matters lead me to conclude that Ms Capic did not tell Mr Crea about the difficulties with her vehicle. Her evidence at trial that she did was therefore false.
It is difficult to think that this episode was to her credit although, in fairness to her, it is tolerably clear what happened. The fact that the defects had not been disclosed by her was a fact that she understandably felt embarrassed about and she was keen, I think, to come across – as she believes herself to be – as an honest person. The irony of the situation is that I do not think that her failure to disclose the defects in the financing documents reflected any deliberate dishonesty on her part. I accept that she most likely signed the lease without appreciating the significance of the warranty as many people would. In her efforts to appear honest on this issue regrettably Ms Capic was not telling the truth. The situation she found herself in during cross-examination was a difficult one and Mr Scerri QC’s cross-examination of her was searching and stern. It must have been a stressful occasion for her and this incident is, in some sense, unfortunate since it was unnecessary. The cross-examination persisted on the issue for several pages. Ultimately Ms Capic tried to say at T262.39-40 that she thought that the word ‘defect’ ‘meant something where it’s physically broken or, you know, can’t turn the car on or something along those lines….’. This answer did not strike me as very plausible. My impression was that by this stage of questioning Ms Capic was quite distressed and was, in some ways, flailing around.
There is force therefore in the Respondent’s submission that it has been deprived of the opportunity of considering whether it should: (a) tender some of the other §1782 documents perhaps to contradict the documents upon which the Applicant now seeks to rely; (b) ask its own witnesses about the documents; and, (c) perhaps call other witnesses. The Applicant says that the Respondent has not led any evidence about these matters. However, I do not think that matters. Parties are often confined to the way in which they have run their case (often by being tied to their particulars) and this is not usually thought to require evidence from the other party that they would be prejudiced if some other course were taken. In any event, the prejudice pointed to by the Respondent – especially the possibility of considering whether to tender additional documents – is to my mind reasonably obvious.
The Applicant submitted that if I thought there was something in the Respondent’s position the more desirable course would be to permit it to take the steps it says it has been denied. Assessment of that submission occurs in a context where the present debate:
• arose in the last week of a six week trial;
• required two rounds of written submissions some weeks after the trial had concluded; and
• will necessarily be resolved after judgment had been reserved.
I do not accept in that context that it would be consistent with orderly trial management to give the Respondent an opportunity to reopen its case several months after the trial has concluded so that it can be given an opportunity to meet a case not foreshadowed at trial.
For completeness, I reject the Applicant’s submission that the Respondent had consented to her use of these documents because it had consented to the final form of the tender list (which included the documents). As a matter of formality, at the time the Respondent objected to the use of Schedule 1 documents on the basis that they were not yet formally in evidence. They would not find their way into evidence until 10.22 am on 29 July 2020 when my Associate informed the parties that the documents identified in document TDL.010.006.0001 would be received into evidence. By this time, the trial had been completed subject to the cleaning up of some loose ends (such as the tender of documents).
When the Schedule 1 documents were received into evidence on 29 July 2020 it is true that this occurred with the agreement of the Respondent. However, that agreement must be seen in context. On the last day of the trial, 24 July 2020, the Respondent had indicated that there were a number of documents in the draft list then provided to it which were not referred to anywhere in the evidence or in the submissions (by contrast the Schedule 1 documents were referred to in the Applicant’s closing written submissions if not anywhere else). It was the Respondent’s position that these never-referred-to documents should not be tendered. The Applicant appears to have agreed with this and removed documents of that kind from the final form of list. The Respondent then agreed to the tender of the balance. However, it is quite clear that this took place against a backdrop which included the Respondent’s continuing objection to the Schedule 1 documents. I do not think that its entitlement to make that objection was thereby lost. It continued to assert that reliance could not be placed upon the documents. Where the Respondent makes good its objection, the course I will take is to revoke to the extent necessary the interlocutory order by which the documents were admitted.
In that circumstance, I conclude that it would be procedurally unfair for the Applicant to be permitted to prove the allegations in §6AB by relying on those of the Schedule 1 documents which are drawn from the §1782 documents.
Despite the assertion in the Applicant’s written submissions that all the documents relate to pleaded issues and many relate to issues addressed in Mr Kuhn’s evidence, the Applicant fell short of submitting that any of the Schedule 1 documents were properly to be seen as being in reply to Mr Kuhn’s evidence and therefore admissible even if not mentioned in Dr Greiner’s report. For example, part of the Respondent’s defence as advanced by Mr Kuhn was that shudder was a normal operating characteristic of the DPS6 and did not constitute a defect. Legitimate evidence in reply to that evidence would have included the tender of documents proving that shudder was not a normal operating characteristic of the DPS6. This may well have included evidence which showed that Ford US decided in 2011 to discontinue use of the DPS6 in favour of a conventional automatic transmission. However, the Applicant did not put the matter that way and I need not form a view about it. Had such a submission been made, it would then have been necessary to assess the procedural consequences of the failure of the Applicant to cross-examine Mr Kuhn on this material. The outcome of that debate is not self-evident.
The parties were asked to prepare a table explaining their respective views on each of the Schedule 1 documents. The Respondent treated the table as an invitation to formulate further objections lying beyond its procedural fairness objection. I gave no leave for such objections to be made and I do not propose to entertain them.
Schedule 1 documents not being §1782 documents
These documents were not the subject of direct submission and their significance emerged only in the table prepared by the parties.
The first document in this category is DIRD.001.001.0236 which is a minute of a decision made within DIRD. The Applicant submitted that the point of this document was to rebut any assertion that DIRD’s position provided evidence that there was no problem with the input shaft seals. The point was to show that the information which DIRD acted upon was not the same as the information before the Court. So viewed, the relevance of this evidence is as reply evidence to the Respondent’s evidence concerning the position of DIRD. For example, Mr Cruse gave evidence at §52 of his affidavit that DIRD had written to the Respondent on 17 October 2017 saying that its concerns ‘were clarified satisfactorily’. I propose to permit this document to remain in evidence.
The second document in this category is FOR.712.002.8367, an email forwarding a 6 Panel report that was referred to by Dr Greiner. The Applicant wishes to rely on this document to show the existence of knowledge within the Respondent of the input shaft seal issues discussed in the report, an allegation that appears at §20B(e). As with the §1782 documents, it would be procedurally unfair to allow this to occur when this document has never formed a part of the particularised case.
The third document is a spreadsheet FOR.713.001.0347. This was said to prove that the Respondent was aware of the TCM solder issue. That allegation appears at §20B(f). The particulars to that allegation indicate that this will be proved by means of FOR.713.001.0348 which is an agenda. I note that while the agenda and spreadsheet appear to have been attached to the same email, the contents of the spreadsheet could not be said to be reproduced or summarised in the agenda. No application was made to amend the particulars. The present document therefore falls outside the particularised case and will be removed from the evidence.
The fourth, fifth, sixth and seventh documents are FOR.729.004.7466, FOR.729.005.4035, FOR.729.005.4055 and FOR.729.005.4064. Each is an email in the same chain discussing the rear main oil seals and is said to prove the allegation at §6AB(a)(iii). None of these documents have ever formed part of the particularised case and the Applicant first signalled her intention to tender them on 16 July 2020. This was near the end of the fifth week of the trial, when the only remaining evidence was that of Mr Stockton and Dr Strombom on aggregate loss and damage. These documents will be removed from the evidence.
The eighth document is FOR.758.001.3126, the unsworn affidavit of Matthew Fyie, of Ford US, dated 3 July 2020. This affidavit was produced in the context of an application made by the Applicant to discharge suppression orders that applied to the §1782 documents. The Applicant wishes to rely on the affidavit to support its submission that a Jones v Dunkel inference should be drawn against the Respondent in relation to its failure to call witnesses who had detailed knowledge of the alleged deficiencies. Mr Fyie was not called to give evidence regarding the DPS6 and the Applicant submits that the existence of his unsworn affidavit evidences his availability to do so. Having being produced during the third week of the trial, this document clearly could not have formed part of the particularised case. However, given that it was filed and served by the Respondent (despite appearing to have been prepared by the solicitors acting for Ford US) there does not seem to be any procedural unfairness flowing from the Applicant relying on it. I will therefore allow it to remain in evidence.
The ninth document is FOR.700.005.0013, a spreadsheet said to be relevant to the allegations concerning the friction material that appear at §6AB(a)(i)(A), §6AB(a)(v) and §6AB(a)(ci). Despite being attached to a 14D report which is in evidence, this spreadsheet has not been particularised. It will be removed from the evidence.
The final two documents are FOR.725.026.6816 and FOR.725.026.6819. Both were attached to an email referred to by Dr Greiner and are said to prove the allegation at §6AB(a)(iii) relating to the rear main oil seal deficiency. However Dr Greiner’s reference to the covering email does not extend to how the Applicant seeks to use the attachments in question at [382] of her closing submissions. They do not form part of the particularised case and will be removed from the evidence.
Orders
I will therefore remove from the evidence all of the objected to Schedule 1 documents save for the DIRD minute and the unsworn affidavit of Matthew Fyie. The appropriate way for this to occur is for me to revoke the order admitting the Schedule 1 documents into evidence, save for those where the Respondent does not press its objection and the two documents I have determined should remain in evidence.
Judicial notice
I propose to take judicial notice of the fact that driving a car inevitably has some degree of risk. In particular, I note that the Australian Bureau of Statistics (‘ABS’) has recorded that 739 people died in 2019 as a ‘Car occupant injured in transport accident’. To take notice of the fact that people die driving cars each year in Australia I must consider whether the requirements of s 144 of the Evidence Act 1995 (Cth) have been satisfied. It states:
144 Matters of common knowledge
(1) Proof is not required about knowledge that is not reasonably open to question and is:
(a) common knowledge in the locality in which the proceeding is being held or generally; or
(b) capable of verification by reference to a document the authority of which cannot reasonably be questioned.
(2) The judge may acquire knowledge of that kind in any way the judge thinks fit.
(3) The court (including, if there is a jury, the jury) is to take knowledge of that kind into account.
(4) The judge is to give a party such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced.
Considering then s 144(1)(b), it is relevant to note the effect of s 159 of the Evidence Act. It states:
159 Official statistics
A document that purports:
(a) to be published by the Australian Statistician; and
(b) to contain statistics or abstracts compiled and analysed by the Australian Statistician under the Census and Statistics Act 1905.
is evidence that those statistics or abstracts were compiled and analysed by the Australian Statistician under that Act.
In light of the definition of ‘Australian Statistician’ in the Evidence Act’s Dictionary and the deeming effect of s 17(2) of the Census and Statistics Act 1905 (Cth), s 159 encompasses documents published by the ABS such as 3303.0 Causes of Death, Australia, 2019 (Australian Bureau of Statistics, Canberra, 23 October 2020). The effect of s 159 means that I am to take this document as evidence that the statistics it contains were compiled and analysed by the Australian Statistician. I therefore can conclude that for the purposes of s 144(1)(b) it is a document the authority of which cannot reasonably be questioned.
While this satisfies the 2nd limb of s 144(1), the knowledge that people die driving cars each year must also be ‘not reasonably open to question’. I am satisfied that this is the case as the knowledge falls within the same category of information such as ‘asbestos is dangerous and can be deadly’: see Kent v Wotton & Byrne Pty Ltd [2006] TASSC 8; 15 Tas R 264 at [12] per Blow J, cited in Odgers S, Uniform Evidence Law (14th ed, Thomson Reuters, 2019) p 1351 [144.60]. This is not the kind of knowledge that I considered in Parmar v Minister for Immigration and Citizenship [2011] FCA 760 at [12]-[13], which was the intricacies of a language test. It is more akin to the information found in a meteorological document or a map: see Wentworth District Capital Ltd v Commissioner of Taxation [2010] FCA 862 at [2]. Finally s 144(4) requires me to give parties the opportunity to make submissions as is necessary to ensure that they are not unfairly prejudiced. I do not see how any submissions are necessary to avoid prejudice here as neither party could be disadvantaged if I take this knowledge into account, nor could the fact that ‘people die driving cars each year in Australia’ be meaningfully contradicted. Section 144(2) therefore allows me to acquire the knowledge in any way I see fit and I do so by reference to the document published by the ABS. I then rely on s 144(3) to take this knowledge into account.
SECTION XVII: CONCLUSION AND ANSWERS TO COMMON QUESTIONS
The Court directed that certain common questions be stated for the purposes of the trial. These questions are as follows:
Defects
1 Which Affected Vehicles, when supplied as new, contained or were part of model lines containing a PowerShift Transmission that had:
(a) Component Deficiency – Friction Material?
(b) Component Deficiency – Input Shaft Seals?
(c) Component Deficiency – Rear Main Oil Seal?
(d) Component Deficiency – TCM Solder Cracks?
2 Which Affected Vehicles, when supplied as new, contained or were part of model lines containing a PowerShift Transmission that had:
(a) Architecture Deficiency – Damping?
(b) Architecture Deficiency – Heat?
3 Did the Affected Vehicles that had the Component Deficiency – Friction Material have, or have an unusual propensity to have, the:
(a) performance issues (as defined in sub-paragraph 6AB(b) of the 4FASOC);
(b) reliability issues (as defined in sub-paragraph 6AB(c) of the 4FASOC);
(c) durability issues (as defined in sub-paragraph 6AB(d) of the 4FASOC); and/or
(d) comfort issues (as defined in sub-paragraph 6AB(f) of the 4FASOC)?
4 Did the Affected Vehicles that had the Component Deficiency – Input Shaft Seals have, or have an unusual propensity to have, the:
(a) performance issues (as defined in sub-paragraph 6AB(b) of the 4FASOC);
(b) reliability issues (as defined in sub-paragraph 6AB(c) of the 4FASOC);
(c) durability issues (as defined in sub-paragraph 6AB(d) of the 4FASOC); and/or
(d) comfort issues (as defined in sub-paragraph 6AB(f) of the 4FASOC)?
5 Did the Affected Vehicles that had the Component Deficiency – Rear Main Oil Seal have, or have an unusual propensity to have, the:
(a) performance issues (as defined in sub-paragraph 6AB(b) of the 4FASOC);
(b) reliability issues (as defined in sub-paragraph 6AB(c) of the 4FASOC);
(c) durability issues (as defined in sub-paragraph 6AB(d) of the 4FASOC); and/or
(d) comfort issues (as defined in sub-paragraph 6AB(f) of the 4FASOC)?
6 Did the Affected Vehicles that had the Component Deficiency – TCM Solder Cracks have, or have an unusual propensity to have, the:
(a) performance issues (as defined in sub-paragraph 6AB(b) of the 4FASOC);
(b) reliability issues (as defined in sub-paragraph 6AB(c) of the 4FASOC);
(c) durability issues (as defined in sub-paragraph 6AB(d) of the 4FASOC);
(d) safety issues (as defined in sub-paragraph 6AB(e) of the 4FASOC); and/or
(e) comfort issues (as defined in sub-paragraph 6AB(f) of the 4FASOC)?
7 Did the Affected Vehicles that had the Architecture Deficiency – Damping have, or have an unusual propensity to have, the:
(a) performance issues (as defined in sub-paragraph 6AB(b) of the 4FASOC);
(b) reliability issues (as defined in sub-paragraph 6AB(c) of the 4FASOC);
(c) durability issues (as defined in sub-paragraph 6AB(d) of the 4FASOC);
(d) safety issues (as defined in sub-paragraph 6AB(e) of the 4FASOC); and/or
(e) comfort issues (as defined in sub-paragraph 6AB(f) of the 4FASOC)?
8 Did the Affected Vehicles that had the Architecture Deficiency – Heat have, or have an unusual propensity to have the:
(a) performance issues (as defined in sub-paragraph 6AB(b) of the 4FASOC);
(b) reliability issues (as defined in sub-paragraph 6AB(c) of the 4FASOC);
(c) durability issues (as defined in sub-paragraph 6AB(d) of the 4FASOC);
(d) safety issues (as defined in sub-paragraph 6AB(e) of the 4FASOC); and/or
(e) comfort issues (as defined in sub-paragraph 6AB(f) of the 4FASOC)?
Knowledge
9 Did the Respondent know, and if so, from when, the matters pleaded at paragraph 20B of the 4FASOC?
10 Did the Respondent know, and if so, from when, the matters pleaded at paragraph 20D(a) of the 4FASOC?
Guarantee Subgroup
11 When the Affected Vehicles were supplied as new, did they fail to comply with the guarantee of acceptable quality within the meaning of s 54 of the ACL?
Ford Customer Subgroup
12 Did Ford Australia make, to the Applicant and Ford Customer Subgroup Members (as defined in paragraph 7B(b) of 4FASOC):
(a) the Vehicle Representations (as defined in paragraph 7A of the 4FASOC), and if so, were those representations false and misleading in contravention of s 18 of the ACL and/or liable to mislead the public as to the nature, the characteristics of the suitability for purpose of Affected Vehicles in contravention of s 33 of the ACL;
(b) the Transmission Representations (as defined in paragraph 7F of the 4FASOC), and if so, were those representations false and misleading in contravention of s 18 of the ACL and/or liable to mislead the public as to the nature, the characteristics of the suitability for purpose of Affected Vehicles in contravention of s 33 of the ACL.
13 Did Ford Australia make, to the Applicant and Ford Customer Subgroup Members, the PowerShift Representations (as defined in paragraph 8A of the 4FASOC), and, if so, were the PowerShift Representations misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL.
14 Were the PowerShift Representations liable to mislead the public as to the nature, the characteristics, or the suitability for purpose of the Affected Vehicles, in contravention of s 33 of the ACL.
Some of these may be answered as they stand. For example for Question 1 and Question 2:
(1) Which Affected Vehicles, when supplied as new, contained or were part of model lines containing a PowerShift Transmission that had:
(a) Component Deficiency – Friction Material?
All Focuses; Fiestas manufactured before 7 January 2015 (excluding the 1.0L ‘Fox’ Fiesta); and EcoSports manufactured before 3 September 2016.
(b) Component Deficiency – Input Shaft Seals?
Fiestas manufactured before 30 August 2013; Focuses manufactured at the Ford Thailand Manufacturing plant before 2 September 2013; Focuses manufactured at the Saarlouis plant before 28 June 2013; and EcoSports manufactured before 1 October 2013.
(c) Component Deficiency – Rear Main Oil Seal?
None
(d) Component Deficiency – TCM Solder Cracks?
Fiestas manufactured at the AutoAlliance Thailand plant before 23 June 2014; Fiestas manufactured at the Ford Thailand Manufacturing plant before 10 November 2014; Focuses manufactured before 10 November 2014; and EcoSports manufactured before 10 November 2014
(2) Which Affected Vehicles, when supplied as new, contained or were part of model lines containing a PowerShift Transmission that had:
(a) Architecture Deficiency – Damping?
All Affected Vehicles to the extent it led to a slight shudder at low speeds and gear rattling.
(b) Architecture Deficiency – Heat?
None
It is also clear that the answers to Question 5(a)-(d) and Question 8(a)-(e) are all ‘no’.
So far as Questions 3, 4, 6 and 7 are concerned, the decision to use the concept of performance, reliability, durability, safety and comfort issues is liable to mask a great deal of detail. Although I will hear the parties on this, it would be better if the questions were restated to reflect the precise Component Deficiencies and risks associated with them. For example, the selection of B8080 clutch lining material carried with it risks of a number of symptoms only one of which was self-excited shudder. The risks and symptoms should be precisely identified in the questions.
Question 9 relates to the misadventure which is 4FASOC §20B and should not be answered. Question 10 relates to the barely mentioned §20D(a). The Applicant refers to §20D(a) in her submissions just twice at [552] and [558]. As far as I can see its only purpose is as part of the same misadventure of §20B, being the inchoate larger omissions case. The actual allegation in §20D(a) is:
By reason of the matters alleged in paragraphs 6AB-6AC, 6Al, 6AK, 6AM, 20B, and further or alternatively, paragraph 20C, during the relevant period, Ford Australia knew that:
(a) it had advised on, and Dealers had implemented, certain repairs and replacement works to be carried out on certain Affected Vehicles to attempt to address the Vehicle Defects and PowerShift Transmission Defect (or one, some or all of them);
Holding this up to the light and squinting, I take this to be a reference to the fact that the Respondent implemented the three fixes for vehicles which were already in service and consequently, in relation to each implementation, must be taken to have known the nature of the problem which was being fixed. Thus, for example, the replacement of the input shaft seals from August 2013 gives rise to an implication that the Respondent knew that the input shaft seals were being replaced because there was something wrong with them and that the something was likely to be that they had leaked. Similar observations may be made about the B8080 clutch lining material, software update 15B22 and the revised TCM. In principle, I accept this. However, rather than push the actual findings I have made through the definition of the Vehicle Defects and PowerShift Transmission Defect in the 4FASOC, it would be better if the question actually reflects what the factual debate was – that is, the debate within the framework of issues assayed by Dr Greiner.
As for Question 11, while the answer to the Question as it stands is ‘yes’, this will need to be adjusted to reflect at least two matters. The first is the fact that each deficiency (constituted by a risk) gives rise to a separate cause of action under s 271(1). The second is that the particular deficiency (risks) will need to be identified with precision. Some attention may eventually need to be given to the fact that some of the vehicles were supplied before the commencement of the ACL.
Questions 12(a), 12(b) and 13 should be answered ‘no’. Question 14 does not arise.
In addition to the existing questions it is apparent that the parties in fact litigated a number of issues which they omitted to state as common questions. That will now need to be rectified. They include (at least):
(a) the proper construction of s 271(1), s 271(6) and s 272;
(b) the problems which were successfully repaired by the Respondent;
(c) the problems which were not;
(d) whether, in relation to the successful repairs, the relevant group members required the Respondent to conduct the repair; and
(e) whether there should be an award of aggregate damages.
The parties will need to confer on these matters and propound revised questions and proposed answers. I will give them 28 days to do so. There will be a case management hearing on 27 July 2021. At that time, any remaining debate about the questions and answers will be ventilated, any question of costs may be mentioned although not debated and the future course of the litigation charted. At the same time, the issue of Ms Capic’s excess GST, stamp duty and financing costs may be mentioned and orders made resolving, if nothing else, her case. The only formal orders I will make are those in relation to the category of documents which I have determined the Applicant not be entitled to rely upon for reasons of procedural fairness, that the matter stand over for further case management on 27 July 2021 and that the parties not deliver written submissions in advance of the case management hearing.
I certify that the preceding nine hundred and sixty-nine (969) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.
Associate:
Dated: 29 June 2021
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