Dwyer v Volkswagen Group Australia Pty Ltd

The appeal concerned a consumer law dispute brought by the appellant, Mr. Dwyer, against Volkswagen Group Australia Pty Ltd. Mr. Dwyer alleged that vehicles supplied by Volkswagen were not of acceptable quality, as required by section 54 of the Australian Consumer Law, due to a purported risk of airbag rupture. He contended that this risk rendered the vehicles unsafe and defective. Volkswagen sought to rely on a defence under section 271(2) of the Australian Consumer Law, arguing that any failure to comply with the guarantee of acceptable quality was solely due to the act or default of a third-party supplier of the airbags, who was not an agent of Volkswagen.

The Court of Appeal was required to determine whether the vehicles were of acceptable quality to a reasonable consumer, specifically considering the alleged risk of airbag rupture. It also had to consider whether Volkswagen was disentitled to the defence under section 271(2) by reason of its actions in selecting the airbag supplier, installing the airbags, or releasing the vehicles for supply. Furthermore, the court needed to address how damages should be assessed under section 272(1) of the Australian Consumer Law, including whether subsequent events, such as the replacement of airbags at no cost, should be taken into account when determining the value of the goods at the time of supply. Finally, the court considered whether common questions in representative proceedings should be amended on appeal.

The Court of Appeal found that Mr. Dwyer had not established a physical feature of the airbags that carried the inherent risk he alleged. It concluded that the risk of rupture was merely speculative and theoretical, not materialising within any meaningful timeframe, and therefore not a factor that would render the vehicles unacceptable to a reasonable consumer. The court also held that Volkswagen was not disentitled to the defence under section 271(2), as the third-party supplier was not an agent of Volkswagen, and Volkswagen's actions did not negate the defence. Regarding damages, the court noted that subsequent events, such as the free replacement of airbags, could be relevant to assessing the true value at the time of supply. The court also declined to amend the common questions on appeal, as no application had been made at trial or on appeal.

Consequently, the appeal was dismissed, and the appellant was ordered to pay the respondent's costs.