Capic v Ford Motor Company of Australia Pty Ltd

The High Court of Australia considered an appeal by Ford Motor Company of Australia Pty Ltd concerning representative proceedings brought by Ms Biljana Capic on behalf of individuals who acquired motor vehicles fitted with a "DPS6" transmission. The dispute centred on whether these vehicles complied with the guarantee of "acceptable quality" under section 54(1) of the Australian Consumer Law ("ACL"). The primary judge found that the vehicles did not comply with this guarantee at the time of supply, and the case involved the assessment of damages under section 272(1)(a) of the ACL, which allows for recovery of damages for any reduction in the value of the goods resulting from a failure to comply with the guarantee.

The legal issues before the High Court included whether the Full Court of the Federal Court of Australia erred in finding that the assessment of damages under section 272(1)(a) of the ACL could require departure from the time of supply or adjustment to avoid over-compensation. Specifically, the court had to determine if subsequent events, such as repairs or the actual materialisation of defects, were relevant to the assessment of damages, and whether the Full Court correctly applied the principles established in *Toyota Motor Corporation Australia Ltd v Williams*.

The High Court allowed the appeal, finding that the Full Court's reasoning, which relied on *Toyota*, could not be sustained given this Court's subsequent decision in *Williams*. The High Court determined that the primary judge had erred in not considering information known at the time of trial and the appellant's use of the vehicle up until that time when assessing damages under section 272(1)(a). Consequently, the High Court set aside the orders of the Full Court and remitted the question of Ms Capic's damages for redetermination by the primary judge, in accordance with the High Court's reasons and on the basis that Ms Capic was entitled to pre-judgment interest on certain damages awards.