Motor Accidents (Compensation) Commission v Toyota Motor Corporation Australia Limited
[2022] NTSC 39
•17 May 2022
CITATION:Motor Accidents (Compensation) Commission v Toyota Motor Corporation Australia Limited & Anor [2022] NTSC 39
PARTIES:MOTOR ACCIDENTS (COMPENSATION) COMMISSION
v
TOYOTA MOTOR CORPORATION AUSTRALIA LIMITED
(ACN 009 686 097)
and
TOYOTA MOTOR CORPORATION
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: SUPREME COURT exercising Territory jurisdiction
FILE NO:2020-01671-SC
DELIVERED: 17 May 2022
HEARING DATE: 21 February 2022
JUDGMENT OF: Huntingford A/AsJ
CATCHWORDS:
Practice and Procedure – Application for separate trial of preliminary question – facts not admitted on pleadings – need to determine facts – no likely saving of expense and inconvenience – proposed question not clearly defined and dependent upon facts not agreed – mixed fact and law - risk of delay, extra expense and uncertainty – application refused
Practice and Procedure – Application for particular discovery – PD6 compliance disputed – relationship between PD6 obligations and discovery under Supreme Court Rules – large number of potential documents – consideration of cost of compliance – application granted
Motor Accidents (Compensation) Act 1979 (NT) ss 4A, 38(4) and (5)
Supreme Court Rules 1987 (NT) rr 29.02, 29.05, 47.05
Practice Direction 6 of 2009Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47; Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464; Tepko Pty Ltd v Water Board (2001) 206 CLR 1, considered
Compaignie Financiere du Pacifique v Peruvian Guano Co (1882) QBD 55; Northern Australian Beef Limited v Bilba Capital Pty Ltd and Bilba Capital, Pty Ltd v Jim Louris in his capacity as the Registrar-General [2021] NTSC 18; Vliestra v Ranger (2005) 42 MVR 359, cited
Wickham Point Development Pty Ltd v Commonwealth of Australia & Ors (No 2) [2018] NTSC 50, discussed
REPRESENTATION:
Counsel:
Plaintiff:Ms Morgan
Defendants:Mr McConnel SC
Mr Robinson
Solicitors:
Plaintiff:YPOL Lawyers,
town agent Maria Savvas
Defendants:Clayton Utz
Judgment category classification: B
Judgment ID Number: Hun2202
Number of pages: 28
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINMotor Accidents (Compensation) Commission v Toyota Motor Corporation Australia Limited & Anor [2022] NTSC 39
No. 2020-01671-SC
BETWEEN:
MOTOR ACCIDENTS (COMPENSATION) COMMISSION
Plaintiff
AND:
TOYOTA MOTOR CORPORATION AUSTRALIA LIMITED
(ACN 009 686 097)
First Defendant
AND:
TOYOTA MOTOR CORPORATION
Second Defendant
CORAM: Huntingford A/AsJ
REASONS FOR DECISION
(Delivered 17 May 2022)
Introduction
By amended summons initially filed 30 November 2021, the plaintiff seeks limited discovery of particular classes of documents pursuant to r 29.05 of the Supreme Court Rules 1987 (NT) (SCR).[1]
The first and second defendants object to the orders for discovery sought by the plaintiff.
In addition, by summons filed 1 December 2021 the first and second defendants seek an order pursuant to r 47.04 of the SCR that a question be tried as a preliminary question ahead of the trial of the other issues in this proceeding.
The plaintiff objects to the question posed by the defendants being tried before the trial of the balance of the proceeding.
The proceeding
The plaintiff is a statutory corporation constituted under s 5 of the Motor Accidents (Compensation) Commission Act 2014 (NT) and has as one of its functions the administration of the Motor Accidents Compensation (MAC) Scheme in accordance with the Motor Accidents (Compensation) Act 1979 (NT) (MAC Act). It has instituted these proceedings seeking to enforce statutory indemnities pursuant to s 38(4) and/or s 38(5) of the MAC Act.
The claim arises out of a motor vehicle accident that occurred on 24 April 2017. On that day Ms Gaynor Hill (the claimant) was driving a Toyota RAV4, registered number NT CB64ZV (the RAV4) owned by Rodley Pty Ltd (the owner) at Karama when she was involved in a collision with another vehicle. The claimant suffered serious injuries as a result of the accident.
The plaintiff’s claim against the defendants is put on the basis that:
- Either or both of the defendants were the manufacturer of the RAV4; and
- Either:
o A defect in the manufacture or repair of the motor vehicle caused or contributed to the motor accident within the meaning of s 38(4) of the MAC Act; or
o The defendants’ wrongful or negligent act or omission caused or contributed to the motor accident within the meaning of s 38(5) of the Act; and
- The defendants would, assuming that the MAC Act had never existed, have been liable in damages, in tort or contract, for the injury to the claimant.
The defendants’ putative liability to the claimant for the purpose of s 38(4) of the MAC Act is said to arise pursuant to s 54 and/or s 138 of the Australian Consumer Law. In relation to s 38(5) of the MAC Act, the claim that the claimant would otherwise have had is said to arise in negligence, based upon a failure by each of the defendants to take sufficient steps to warn the owner or the claimant of the danger posed by the front driver’s side airbag.
Pleadings – what is in dispute?
Although there are myriad legal and factual issues in dispute on the pleadings, the defendants have admitted by their defences that:
- On 24 April 2017 the claimant was driving the RAV4 at Karama in the Northern Territory when she was involved in a collision with another vehicle;
- The collision was a motor accident within the meaning of the MAC Act;[2]
- The front driver’s side airbag in the RAV4 deployed as a result of the accident;
- The claimant suffered injuries as a result of a motor accident;[3]
- The claimant’s injuries were as a result of the penetration of a foreign object into her eye and brain;
- The second defendant was the manufacturer of the RAV4[4]; and
- The plaintiff has made payments to the claimant.[5]
Each of the defendants denies, at paragraph 7(c) of their respective defences, that the deployment of the airbag caused or contributed to the accident.
Paragraph 7 of statement of claim pleads that the airbag deployed as a result of the collision “causing injury to the claimant”, and gives particulars of the injury as ejection of metal fragments, one of which penetrated the claimant’s eye and brain. The defendants do not directly address this pleading. Although paragraph 7 of each defence admits that the airbag deployed and that the claimant suffered injuries “as a result of a motor accident”, neither pleading engages with the exact mechanism of the injury.
At paragraph 18 of each defence it is admitted, at 18(a), that the claimant was injured by penetration of a “foreign object” into her eye and brain. However, at 18(b) each defendant states “if the injury referred to at sub-paragraph (a) above was caused by the deployment of the driver’s front airbag…”. This looks like a non-admission, which is consistent with the approach taken at paragraph 7 of each defence. Therefore, on the pleadings, the plaintiff is put to proof as to whether the “foreign object” which caused the claimant’s injury came from the airbag (or one of its components).
At paragraphs 10(b) and (c) of the statement of claim the plaintiff pleads that “the discharge of metal fragments from the airbag resulted from a defect in the airbag…” and therefore there was a defect in the manufacture of the RAV4. The first defendant, at paragraph 10(c) of its defence, denies that the “alleged defect” in the airbag caused or contributed to the accident, refers to paragraph 7 and also relies upon a general denial at paragraph 10(g). The second defendant, at paragraph 10(b) of its defence, denies that “the conditions leading to the discharge of metal fragments from the driver’s front airbag constituted a defect in the manufacture of the vehicle” and then goes on to plead in the same terms as the first defendant. The first defendant either does not admit or denies that there was a defect in the manufacture of the vehicle, specifically the airbag, and the second defendant denies it.[6]
So far as the claim based upon s 38(5) of the MAC Act is concerned, at paragraph 14 of the statement of claim the plaintiff pleads that the defendants were aware, by May 2015, that the driver’s side front airbag in the RAV4 was defective. Although admitting a product safety recall, both defendants otherwise do not admit those allegations. Further, at paragraph 15 of each defence there is a denial that a duty of care was owed and a statement that if there was a duty it did not arise before 15 May 2015 (the date of the Australian recall) and that in any event any duty of care owed was not breached.
At paragraph 16 of the statement of claim the plaintiff pleads that the defendants took insufficient steps to warn of the risk posed by the driver’s side airbag in the RAV4, and the facts which, it says, made that airbag defective, hazardous and requiring replacement. In response, at paragraph 17 of their respective defences the first and second defendants acknowledge the recall of 15 May 2015 but otherwise deny the allegations. In response to paragraph 17 of the statement of claim (which is a pleading of injury caused by the failure described at paragraph 16 of the statement of claim) each defendant admits that the claimant’s injuries were caused by penetration of a foreign object into her eye and brain, and goes on to say
…if the injury … was caused by the deployment of the driver’s front airbag, then the deployment of the driver’s front airbag was caused by the impact of the accident and did not cause or contribute to the accident.
This is followed by paragraph 18(c) in each defence, which is a general statement of non-admission.
As the discussion above illustrates, the defendants do not concede that the airbag was defective, what the defect was, whether it constituted a defect in the manufacture of the vehicle, their state of knowledge of any defect at particular times, or that they failed to take appropriate steps to warn the claimant or the owner of the risk. There is also no clear admission as to the mechanism of the claimant’s injury.
The defendants’ application for trial of a preliminary question
The question for preliminary determination is framed by the defendants as follows:
Whether, in the premises of the facts pleaded in paragraphs 4 to 7 of the plaintiff’s statement of claim filed 9 April 2020, and the matters admitted and pleaded in paragraphs 4 to 7 of the first defendant’s defence filed 21 May 2021 and the second defendant’s defence filed 30 July 2021, the deployment of the airbag caused or contributed to the subject accident within the meaning of sections 38(4) and (5) of the Motor Accidents (Compensation) Act 1979.
The test for preliminary trial of a question
There was no dispute between the parties as to the principles governing an application for the preliminary determination of a question. There is a need for caution, reflected in the well-known passages from the High Court in Tepko Pty Ltd v Water Board where Kirby and Callinan JJ said “the attractions of trials of issues rather than of cases in their totality, are often more chimerical than real”.[7] Their Honours went on to say that single-issue trials should “only be embarked upon when their utility, economy, and fairness to the parties are beyond question.”[8]
The principles to be considered in decisions of this type were summarised by McKechnie J in 5 Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd[9] in a passage which was cited with approval by Southwood J in Vliestra v Ranger[10] and Kelly J in Northern Australian Beef Limited v Bilba Capital Pty Ltd and Bilba Capital Pty Ltd v Jim Louris in his capacity as the Registrar-General.[11]
There is no doubt that properly used a separate trial of a preliminary question can be an effective way of achieving a just, speedy and cheap resolution of a dispute.[12] Determination of a preliminary question can also be appropriate where it will be likely to reduce delay and expense, even if a full resolution of the proceeding appears unlikely.
Calling for careful consideration in this application is the degree to which issues of fact would need to be determined at the trial of the separate question, and whether those factual matters are likely to be relevant to other issues which overlap, and whether the question posed involves statutory interpretation alone or raises questions of mixed fact and law.
In deciding this interlocutory application, I am not making any finding as to the merits of any legal argument the defendants might ultimately pursue. My decision is directed only to whether the question posed is suitable for preliminary trial.
Consideration
The definition of motor accident in s 4A of the MAC Act is, relevantly, in these terms:
(1) A motor accident is an occurrence:
(a)caused by or arising out of the use of a motor vehicle; and
(b)resulting in the death of, or injury to, a person.
(2) A motor accident is caused by or arises out of the use of a motor vehicle if, and only if, it results directly from:
(a)the driving of the motor vehicle; or
(b)the motor vehicle moving out of control; or
(c)a collision, or action to avoid a collision, with the motor vehicle (whether the motor vehicle is stationary or moving).
The relevant parts of s 38 are as follows:
(4) A person (the indemnifier) is liable to indemnify the Commission for statutory benefits paid to another person in relation to death or injury arising from a motor accident if:
(a)the indemnifier was the manufacturer or repairer of the motor vehicle, or one of the motor vehicles involved in the accident; and
(b)a defect in the manufacture or repair of the motor vehicle caused or contributed to the accident; and
(c)the indemnifier would, assuming this Act had never existed, have been liable in damages, in tort or contract, for the death or injury.
(5) A person (the indemnifier) is liable to indemnify the Commission for statutory benefits paid to another person in relation to death or injury arising from a motor accident if:
(a)the indemnifier is a person (other than the owner or driver of a motor vehicle involved in the motor accident) whose wrongful or negligent act or omission caused or contributed to the accident; and
(b)the indemnifier would, assuming this Act had never existed, have been liable in damages, in tort or contract, for the death or injury; and
(c)the indemnifier is not otherwise liable to indemnify the Commission under this section.
In order to enforce the indemnity under s 38(4) or (5) the plaintiff must first establish that there was a motor accident within the meaning of s 4A. This includes proving that the subject occurrence was “caused by or arising out of the use of a motor vehicle”, noting the requirements of s 4A(2) which include that the motor accident must result “directly from” at least one of the circumstances set out in (a) to (c). The plaintiff must then go on to establish each of the elements of s 38(4) and/or s 38(5) in order to be entitled to an indemnity from either or both defendants.
Counsel for the defendants addressed s 4A(2) in his submissions when he said “Toyota makes the point that the direct cause of what is happening here is a collision”.[13] He went on to say that “the collision caused the airbag to eject particles into the air”.[14] He then referred to the requirement in s 38 that there be a “cause or contribution” and that the defendants each deny “that the deployment of the driver’s airbag caused or contributed to the accident”.[15] In addressing the requirement under s 38(4) that it is the “defect” which caused or contributed to the accident counsel submitted that:
Suppose the defect was caused by a badly repaired set of brakes and the brakes failed that caused the accident. That would be where the defect caused the action, accident. It’s a collision here because a collision was the direct cause of an accident. It’s not the case that the airbag ejecting metal fragments was the direct cause of the accident.[16]
The first difficulty with the argument put by the defendants is that it fails to engage properly with the legislation, and therefore the matters which the plaintiff has to prove. The question posed by the defendants addresses what “caused or contributed to” the motor accident, not to ask whether the alleged defect or wrongful act made the relevant contribution as required by s 38(4) or (5), but whether the deployment of the airbag was the direct cause of the collision. In doing so the defendants seem to seek to incorporate the specific “caused by or arising out of” requirements from the definition in s 4A(2) to the “caused or contributed to” requirements of s 38(4) and (5), where those words do not appear.
The so-called “bifurcation” of the accident argument, in which the defendants say that there was no cause or contribution to the accident by the deployment of the airbag because that deployment did not cause the collision, misses the mark. It is not alleged that the deployment of the airbag of itself caused or contributed to the accident. There is further no allegation that the deployment of the airbag of itself was either a defect or a negligent act or omission as required by the words of the section. The allegations are that the airbag was defective because of the matters set out at paragraph 16 of the statement of claim, and that the defendants, or either of them, were negligent by failing to warn the owner of the risk. It is the alleged defect, or negligent omission, which the plaintiff must show caused or contributed to the accident.
If, notwithstanding the admissions in their defences, the defendants want to argue that an element of the definition in s 4A is not established such that the definition of motor accident is not satisfied, there is a need to identify with precision a question which raises that legal issue in the language of the statute. The proposed question does not directly engage with the language of s 4A.
Second, although the defendants submitted that the central facts were not in dispute, analysis of the pleadings shows that is not the case. As discussed above the mechanism of injury is not admitted on the pleadings. That is important because the fact that an occurrence results in injury to a person is an essential ingredient of the definition of motor accident in s 4A. It is also a requirement in s 38(4) and (5) that the benefits were paid “in relation to death or injury arising from a motor accident”.[17] Without clear admissions as to the fundamental issue of how the claimant was injured, any legal argument which relies upon that fact cannot be addressed.
Further, the existence of a defect, which is a fundamental requirement of the claim under s 38(4), is denied. It would therefore be necessary for the plaintiff to prove all of the facts which might lead to a finding that the airbag inflator was defective and that that amounted to a defect in the RAV4 as alleged before consideration of whether any defect ultimately established on the facts caused or contributed to the motor accident.
The claim pursuant to s 38(5) requires proof of numerous facts which would be required to support a legal conclusion as to negligence. Some of those facts are separate and additional to those required for the case based on s 38(4). Both defendants deny that they were negligent. Until the facts are established it is not possible to determine whether any negligent act or omission on the part of either defendant caused or contributed to the motor accident.
Third, any argument as to the application of the definition in s 4A, or the matters required by s 38(4) and (5) will require determination of questions of mixed fact and law. Several potentially arise, including whether the subject occurrence[18] meets the test of “caused by or arising out of the use of a motor vehicle” in s 4A, and the question of what is meant by “caused or contributed to” in s 38(4) and (5). The question posed by the defendants, potentially raises questions of mixed fact and law which are not suitable for preliminary trial.
In summary, there are significant disputes as to factual matters that would need to be resolved before any legal argument could proceed. The question posed is not framed in a way which clearly articulates a short and discrete legal issue relevant to the language of the MAC Act and the questions which are potentially raised include some of mixed fact and law. In those circumstances I think that a trial of the preliminary question posed by the defendants is unlikely to expedite the resolution of the proceeding. On the contrary, the result is likely to be extra delay, expense and uncertainty.
Finally, I note that there is an outstanding application in relation to discovery of documents and the proceeding is not yet at the stage where there has been the opportunity to obtain expert or other evidence as to the alleged defects, or evidence about the actions of the defendants in relation to the recall notices. While those matters are outstanding, there is a risk that it would be unfair to the plaintiff to embark upon any preliminary hearing.
The application pursuant to r 47.04 is refused and the defendants’ summons is dismissed.
The plaintiff’s application for discovery
The plaintiff argues that an order for limited discovery is required because both defendants have failed to provide relevant documents notwithstanding requests by the plaintiff’s solicitors in accordance with paragraph [6.5] of Practice Direction 6 of 2009 – Trial Civil Procedures Reforms (PD6).
The PD6 process in this proceeding
The writ was filed on 9 April 2020 and was served on the first defendant on 18 January 2021 and on the second defendant, pursuant to the Hague Convention, on 3 June 2021. The writ was filed before the pre-action PD6 process had been undertaken due to the imminent expiry of a limitation period.
The plaintiff wrote to the second defendant on 17 July 2020 and to the first defendant’s solicitors on 22 July 2020 in very similar terms. Those letters[19] were in purported compliance with PD6 and relevantly requested copies of documents relating to the state of each defendants knowledge and enquiries relating to the risk posed by the driver’s side airbag within the class of vehicles to which the claimant’s vehicle belonged. This correspondence was not the first so far as the plaintiff and the first defendant were concerned, letters having passed between their solicitors in 2018 and 2019.
The first defendant responded to the plaintiff’s letter on 2 October 2020 providing a detailed response and including what it said were the essential documents for PD6 disclosure. There were 23 documents disclosed, including seven letters to the owner of the RAV4.
At a directions hearing on 26 May 2021 the plaintiff sought orders for general discovery pursuant to r 29.02 of the SCR. That order was opposed on the basis that a PD6 process had occurred.
On 7 July 2021 the plaintiff wrote to the first defendant seeking further documents. Those documents were described as:
a. Copies of documents including technical reports, internal memoranda, correspondence, and communications (including with the Department of Infrastructure and Transport or the ACCC) in the possession of TMCA relevant to the state of knowledge of the risks and hazards posed by driver’s side front airbag inflator rupture in the period 13 May 2015 to 15 September 2019; and
b. Copies of all documents relating to the subject accident and any inspection of the Toyota involved in the subject accident conducted by or on behalf of TMC, TMCA and/or Takata engineers including file notes, correspondence, reports, photographs, vehicle assessments and all other documents.
The solicitor for the first and second defendants responded on 19 October 2021. As to documents in the first group, the defendants stated that the plaintiff already had the documents evidencing the matters pleaded and that the plaintiff’s request “went beyond its stated case”. A response as to documents in the second group was deferred.
At a directions hearing on 27 October 2021 the plaintiff again indicated that it sought an order for general discovery. A direction was given that any application by the plaintiff as to discovery was to be filed by 30 November 2021.
On 29 October 2021 the defendants provided a further 22 documents in relation to the second category of documents indicated in the plaintiff’s letter of 7 July 2021.
The plaintiff filed its summons seeking orders for discovery, general or in the alternative pursuant to 16 (later amended to 17) categories on 30 November 2021. It did not put the categories to the defendants prior to filing the summons.
On 31 January 2022 the defendant’s solicitors wrote to the plaintiff’s solicitors providing a detailed response to the orders sought by the plaintiff, including proposed document categories (a) to (p).
On 15 February 2022 the defendants provided a further detailed response to the plaintiff’s suggested disclosure categories and also made a further disclosure of 44 documents.[20]
The defendants’ arguments
The defendants’ first overall submission is that no order should be made on the plaintiff’s application because the process is regulated by PD6 and the PD6 process is ongoing. The defendants point to their various disclosures as evidence of their compliance and say that therefore the plaintiff’s application is unnecessary.
The interaction between Order 29 of the SCR and PD6 was described by Luppino AsJ in Wickham Point Development Pty Ltd v Commonwealth of Australia & Ors (No 2)[21] and I respectfully adopt his Honour’s analysis of the interaction between the two as set out in that case.
The defendants submitted that PD6 provides “a different process and a different test”[22] than the “traditional Peruvian Guano of relevance”[23] However, as Luppino AsJ pointed out in Wickham Point, the combined effect of Order 29 and PD6 is “that the parties are required to effect discovery upon the close of pleadings unless discovery is dispensed with.”[24] PD6 does not automatically remove the obligation to make discovery, nor does it change the fundamental test, which remains as set out in r 29.02. Rather, PD6 introduces a disclosure process which “is intended to be the prelude to dispensing with discovery.”[25] There is an important distinction between discoverable documents and those which are required to be disclosed pursuant to PD6 based on the different tests which apply.
The intention, and practical effect, of an effective PD6 process coupled with an order dispensing with discovery, or requiring limited discovery, is that the number of relevant documents which are produced in a particular proceeding will be less than would be required in a full discovery process. This is a function of the focus in PD6 upon the production of “essential documents” and documents which “might significantly impair” a party’s case. However, PD6 is neither a sword nor a shield. The Court must consider in each case whether, and what, discovery is necessary and appropriate.
Where, as here, the parties are in clear disagreement as to the sufficiency of the PD6 disclosure the Court will proceed as described by Luppino AsJ in Wickham Point at [19] – [22]. In that case his Honour noted that in complex or document intensive cases determining what discovery is necessary for the purpose of making a decision for the purposes of paragraph 22 of PD6 can carry with it the risk of incurring more costs than can be justified. In such situations, a broad approach to the resolution of the dispute is required.
The evidence establishes that the first defendant maintains a database of 880,000 documents related to Takata airbag recalls, established for a product liability class action in the Supreme Court of New South Wales.[26] It is a subset of a much larger database of about 30 million documents which is kept in the United States of America by Toyota Motor Engineering and Manufacturing North America Inc (which is not a defendant in this proceeding). There are said to be significant costs in maintaining the Australian database for the purposes of this proceeding and, as a further complication, the defendants’ evidence is that a “substantial” number of the 880,000 documents are written in Japanese and there may be significant costs in translating them.[27] It would appear, therefore, that if general discovery were ordered there would be a very large number of potentially relevant documents, such that the case might be described as “document intensive”. Further, based on the defendants’ evidence, the cost of an order for general discovery would likely be out of proportion to the total amount sought by the plaintiff in the proceeding, based on the figures in the statement of claim. In all of the circumstances, an order for general discovery would not be appropriate and the plaintiff was right to abandon that application.
However, I am satisfied that orders for limited discovery should be made. The evidence establishes that there is a genuine dispute between the parties as to the documents which must be produced in accordance with PD6, based largely on relevance.[28] It is unlikely that that dispute will be resolved between the parties using a PD6 process given the history of interactions to date.
The defendants submit that the plaintiff has not complied with the PD6 process and in particular that the categories of documents were not put to them for response before the summons was filed. While the latter point is correct, the defendants’ solicitor’s letter of 15 February 2022[29] is evidence that the parties are at an impasse. The original summons (omitting category (q)) was filed on 30 November 2021. Detailed responses were provided in the defendants’ solicitor’s letters of 31 January 2022 and 15 February 2022. Taken together, those letters indicate that a review of documents has been completed and that the defendants consider that they have produced all necessary documents.
Additionally, the defendants have been slow to comply with their PD6 disclosure obligations. The plaintiff sent PD6 letters in July 2020. The first defendant has under its control a significant database, prepared for other litigation and therefore presumably indexed and searchable. The first defendant produced 23 documents in October 2020, which it said at the time were all of the essential documents for PD6. Since then, in October 2021 and February 2022, 66 additional documents have been produced. There is no sufficient explanation as to the delay in disclosure and the last tranche of documents was produced without admission that they were required for PD6. Finally, to the extent that it may have been suggested or implied that a defendant is not obliged to provide further disclosure under PD6 until a plaintiff requests additional documents, that position must be rejected. The primary PD6 obligations of a defendant are independent of any request from the plaintiff. In the circumstances, an order dispensing with discovery is not appropriate in this case.
I turn now to consider what orders for limited discovery should be made having regard to the categories of documents (a) to (q) the plaintiff has enumerated in its application, and the particular objections of the defendants.
Documents sought at (a) – (d) of the plaintiff’s application
These categories seek discovery of documents relating to communications between the second defendant and others in relation to the manufacture and supply of the airbag in the RAV4. The categories are:
a. Communications, including electronic communications, from the Second Defendant, or any entity communicating on behalf of the Second Defendant, to Takata Corporation, or Tokai Rika Company Limited sent prior to 1 February 2005 in which the Second Defendant specified minimum safety and performance requirements for phase stabilised ammonium nitrate (PSAN) propellant airbags for use in vehicles manufactured by the Second Defendant.
b. Communications, including electronic communications from Takata Corporation to the Second Defendant, or any entity on behalf of the Second Defendant, for the period March 2000 to March 2005 in which Takata Corporation reported to the Second Defendant testing data, including any safety testing data, for its airbags including but not limited to Production Validation Reports, Delta Production Validation Reports, and lot acceptance testing.
c. Communications, including electronic communications from Takata Corporation to the Second Defendant, or any entity on behalf of the Second Defendant, for the period 18 March 2005 to 24 April 2017 in which Takata Corporation reported to the Second Defendant testing data, including any safety testing data, for its airbags including but not limited to Production Validation Reports and Delta Production Validation Reports, and lot acceptance testing.
d. Communications, including electronic communications between Takata Corporation and the Second Defendant, or any entity on behalf of the Second Defendant, for the period 18 March 2005 to 24 April 2017, in relation to the risk or likelihood of inflator rupture in airbags manufactured by Takata Corporation.
The second defendant objects to orders for discovery in these categories because it says the documents requested cannot relate to a question raised by the pleadings. They further complain as to the breadth of the suggested discovery, pointing out that category (a) refers to all PSAN propellant airbags for manufacture in all of the defendants’ vehicles and that categories (b), (c) and (d) simply refer to “airbags” manufactured by Takata Corporation. Finally, the defendants complain that the date ranges are inappropriate.
Turning first to the allegation as to lack of precision as to the description of the airbags, I agree with the defendants that it is not appropriate to require discovery in relation to all airbags used by the defendants. The questions in this proceeding are, as the defendants submit, limited to the particular type of airbag and inflator fitted to the subject RAV4, which was referred to in the evidence as a “beta inflator” or “Takata Smokeless Driver Inflator”.[30] The evidence does not establish that documents relating to any other type of airbag inflator are likely to be relevant. The requirement for discovery should therefore be limited to documents concerned with the type of airbag inflator fitted to the RAV4. This limitation should apply across all relevant categories.
In relation to the question of pre-manufacture or procurement specifications I note the statement at Annexure Q of the affidavit of Timothy Randolph Price sworn 31 January 2022 that:
Because inflators must fit into small and unique spaces including vehicle steering wheels and front instrument panels (i.e. dashboards), and because they must also satisfy specific performance requirements, inflators must meet exacting size and configuration requirements for each air bag module they are paired with and each vehicle in which they are installed.
It would therefore appear unduly onerous to require the second defendant to discover documents in relation to pre-manufacture specifications and testing for airbag modules relating to all of its vehicles. Therefore discovery in categories (a) to (c) should be limited to only those documents which are relevant to the type of inflator and airbag in the RAV4, which may of course include general specifications, test results and the like for that type of inflator, where those matters apply across a range of vehicles including the RAV4. What I am trying to achieve here is to avoid the second defendant having to discover documents setting out essentially the same specification or testing material applied to or tailored for all beta inflators across all models in its range, while requiring documents relevant to the essential specification and testing activities for the subject airbag inflator to be discovered.
The defendants further submit that communications about safety and performance requirements for the relevant airbags cannot be relevant to a question in the proceeding. The plaintiffs argue that the documents described are relevant because the defendants have put in issue both the existence of a defect at the time of supply of the airbag to the second defendant in February 2005, and at the time of sale to the owner in March 2005, and their state of knowledge at each of those times. Each of the defendants denies that the airbag was defective at those times at paragraphs 10(c) and 12(c) of their respective defences. It is clearly arguable that an airbag with a propensity for moisture intrusion is defective from the time it is manufactured, not only at the time that the airbag component is degraded or when the risk manifests. Senior counsel for the defendants conceded that that is an issue in the proceeding.[31] Documents relating to the design of the airbag procured by the second defendant, including applicable design specifications, testing and quality control information, required by the second defendant as part of the procurement, are therefore relevant both to the question of whether there was a defect and also the state of the second defendant’s knowledge of risk.
The defendants also object that the documents are requested for a period before the date of manufacture of the RAV4, which was in about February 2005.[32] However, it is obvious that procurement activity, including stipulation of any performance requirements, and receipt of testing results, for the relevant airbags must have taken place before manufacture of a vehicle. The evidence is that the particular airbag was likely manufactured by Takata Corporation in January 2005 and the airbag inflator between June and December 2004.[33] Therefore a date earlier than February 2005 is appropriate. I do not think an exact date is necessary in this category, because limiting discovery to documents relating to the particular airbag type in the RAV4 should be a sufficient to ensure that discovery in this category is not oppressive.
In relation to category (c) the defendants say that documents from the date of supply of the vehicle (18 March 2005) to the date of the product safety notice submitted by the first defendant (15 May 2015) cannot be relevant because the plaintiff has limited its pleading at paragraph 14, which relates to the allegation of negligence, to what the defendants knew as at May 2015.
Paragraph 14 of the statement of claim commences “By May 2015…” which indicates that the plaintiff alleges that was the latest date by which the defendants had knowledge of the defect. The defendants join issue on this at paragraphs 15 and 16 of their respective defences where, while admitting the recall notification, they each deny the duty of care and plead in the alternative that if a duty existed it did not arise before 15 May 2015. The defendants’ awareness of the defect and the risk posed by it, and when they acquired that knowledge, is therefore a question raised by the pleadings. It is reasonable to allege that each of the defendants were aware of the risk at some time before 15 May 2015, since that is the date of the action taken and it is reasonable to assume that initial awareness and preparatory or exploratory work must have occurred before then. The second defendant’s defence pleads that it decided to initiate a voluntary recall on 11 May 2015 but does not say why it chose that date. The United States Coordinated Remedy Order contains statements that the first rupture of a driver’s side airbag in a Honda was in November 2008 and that Toyota was involved in various actions taken in the United States from 2013 involving initially passenger, and later driver’s side airbags.[34]
The plaintiff’s suggested date is the date of supply. That is a date at which the defendants have pleaded that they were not aware of the defect. Therefore, the defendants’ state of knowledge at that time is a question in the proceeding and any documents in existence will likely be relevant. In my opinion the date of supply is not unreasonable on the evidence, given the allegation as to the date of awareness and the changing nature of the risk over time.
In relation to category (d) the defendants say that the risk referred to is not a question in the proceeding because it is admitted. Senior counsel for the defendants fairly conceded that an admission as to existence of the risk was not expressly pleaded, but relied upon the defendants’ instigation of the recall notice on 15 May 2015 as evidence of an appreciation of the risk and argued that that could be taken as an “implicit” acceptance of risk by the defendants.[35] Despite this submission, it is clear that there is no admission on the pleadings. Pleadings govern the questions relevant for discovery. The documents are likely to be relevant and should be discovered.
Documents sought at (e) to (g) of the plaintiff’s application
These categories seek documents created by or communications between the first and second defendants before the date of the accident described as:
e. Communications, including electronic communications between the Second Defendant and the First Defendant in relation to the risk or likelihood of inflator rupture in airbags manufactured by Takata Corporation for the period March 2000 to 24 April 2017.
f. Documents created or received by the First or Second Defendant prior to 24 April 2017, including technical reports, internal memoranda, correspondence, and communications in relation to the risks posed by PSAN propellant airbags manufactured by Takata Corporation.
g. Documents created or received by the First or Second Defendant prior to 24 April 2017, including technical reports, internal memoranda, correspondence, and communications in relation to the risks posed by airbags manufactured by Takata Corporation at its Monoclova plant in Mexico.
The plaintiff orally amended categories (f) and (g) in the course of argument to include documents dated from March 2000, bringing this category in line with category (e). The significance of March 2000 is that the plaintiff says that that is the date from which Takata Corporation was aware that the relevant inflators were not performing as they should.[36] On that basis, with the general limitation that discovery is limited to documents relevant to the type of airbag inflator in the RAV4 as discussed above, this category, with the restricted date ranges, is appropriate.
Documents sought at (h) to (i) of the plaintiff’s application
These categories seek documents from the first defendant described as:
h. Emails sent between 28 April 2017 and 6 May 2017 by the Commonwealth Department of Infrastructure and Regional Development (Vehicle Safety Standards Branch) to the First Defendant requesting information following the meeting of 28 April 2017.
i. Communications, including electronic communications sent by the First Defendant to the Commonwealth Department of Infrastructure and Regional Development (Vehicle Safety Standards Branch) in response to any email within category (h).
The first defendant contends that orders were not required in relation to these categories because the documents have already been disclosed.[37] The disclosure was made with the qualification that the documents were not required by PD6. Given the defendants’ qualification and ongoing objections the plaintiff is entitled to some certainty as to the documents discovered in this category.
It was further argued that these documents could only be relevant to the argument based on negligence relied on for the purposes of the s 38(5) claim, which is correct, and that therefore no document relating to communications after the date of the accident could be relevant. However, the documents were not created in a vacuum. The evidence shows that they were created in response to a meeting held after the claimant’s accident in circumstances where there had been a recall two years earlier and communications between the first defendant and the Commonwealth Department were ongoing, as was work by the first defendant in relation to the recall. There is also evidence that there was a RAV4 Campaign Completion document dated 29 May 2017,[38] over a month after the claimant’s accident. What the first defendant told the Department about the causes of the accident and the risk posed is likely to be relevant to their actions and state of knowledge before the date of the accident, which are questions in the proceeding, and any documents in these categories should be discovered.
Documents sought at (j) to (p) of the plaintiff’s application
These categories focus on documents related to steps taken by the defendants related to the Australian product recall in May 2015, prior to the claimant’s accident. They are described as:
j. Policies or procedures created or utilised by the First or Second Defendant governing the Rav4 Driver’s Side Airbag Inflator Recall (PRA No. 2015/14700) in Australia.
k. Documents including policies, internal memoranda, correspondence, and communications created, used or received by the First Defendant in relation to undelivered recall notices issued as part of the Rav4 Driver’s Side Airbag Inflator Recall (PRA No. 2015/14700) in Australia between 1 April 2013 and 24 April 2017.
l. Documents including policies, internal memoranda, correspondence, and communications created, used or received by the First Defendant in relation to undelivered recall notices issued as part of the Rav4 Driver's Side Airbag Inflator Recall (PRA No. 2015/14700) in the Northern Territory between 1 April 2013 and 24 April 2017.
m. Documents including policies, internal memoranda, correspondence, and communications created, used or received by the First Defendant in relation to the number and location of vehicles which had been identified but not yet been repaired under PRA No. 2015/14700 between 1 April 2013 and 24 April 2017.
n. Documents including policies, internal memoranda, correspondence, and communications created, used or received by the First Defendant in relation to the number and location of vehicles which had been identified but not yet been repaired in the Northern Territory under PRA No. 2015/14700 between 1 April 2013 and 24 April 2017.
o. Communications sent by the First or Second Defendant to Bridge Toyota (Darwin), European Garage, or Vehicle Solutions NT Pty Ltd in relation to the Rav4 Driver's Side Airbag Inflator Recall (PRA No. 2015/14700) in Australia between 1 April 2013 and 24 April 2017.
p. Progress or mandatory reports submitted prior to 24 April 2017 by the First Defendant to the ACCC in relation to the Rav4 Driver’s Side Airbag Inflator Recall (PRA No. 2015/14700).
The defendants’ main objection to the documents sought in categories (k) to (o) is that the date range commences from 1 April 2013, the date of the airbag recall in North America, rather than the Australian recall date which is 15 May 2015. I agree that the nature of the documents sought in categories (k) to (o), which directly relate to the Australian recall, and actions taken under it, means that it is very unlikely that any documents would have been created prior to the date of the notification of the recall. It would therefore be appropriate to limit the start date for those categories to 1 May 2015. This is not the case in relation to category (j), which picks up any documents related to preliminary work, which is appropriate.
Categories (l) and (n) are subsets of categories (k) and (m) respectively. There is no evidence that there was a separate Northern Territory recall process. It seems logical that all of the documents which would be included in (l) and (n) will also be included in the wider categories and therefore I do not consider it necessary to make an order for discovery in terms of categories (l) and (n).
The defendants also objected to orders for discovery of documents in categories (j), (k), (o) and (p) on the basis that they have already been disclosed. Given my findings above I am not persuaded that the plaintiff is not entitled to orders for discovery on that ground. It is appropriate to have this issue resolved by the making of orders.
Documents sought at (q) of the plaintiff’s application
The final category of documents relates to communications between the defendants, the relevant Commonwealth department and the participants in the Takata Airbag Working Group described as:
q. Communications, including electronic communications, between the First or Second Defendant and the Department of Infrastructure and Regional Development or any member of the Takata Airbag Working Group (which was established by the Department of Infrastructure and Regional Development in 2015), prior to 24 April 2017, concerning:
i.any risk posed by airbags or airbag inflators manufactured by Takata Corporation; or
ii.communications with owners of vehicles fitted with airbags manufactured by Takata Corporation, including without limitation the accuracy or quality of the owner information or details recorded in the National Exchange of Vehicle and Driver Information System database.
The defendants’ objection to an order for discovery in this category was that the documents to be discovered should be limited to the particular airbag inflator in the RAV4. For reasons given above I agree that this limitation would be appropriate. Otherwise the documents appear potentially relevant and should be discovered.
Orders
I will hear the parties as to the precise form of the orders for discovery based on my findings set out above.
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[1]The summons sought, in the alternative, discovery in accordance with r 29.02(1) but that application was abandoned by the plaintiff at the hearing (transcript 21/2/2022, p 9) and written submissions on that issue are therefore not addressed in these reasons.
[2]Defence of first defendant and second defendant, each at [6]
[3]Defence of first defendant and second defendant, each at [7b]
[4]The plaintiff pleads that the first defendant was also a manufacturer, which is denied by the first defendant.
[5]It is not admitted that the claimant made a claim for benefits pursuant to the MAC Act (defences paragraph 8).
[6] The second defendant’s pleading differs from the first defendant’s in this respect, and noting that there is an acknowledgement by the second defendant that there was a “discharge of metal fragments from the driver’s front airbag” at paragraph 10(b) of the second defendant’s defence, but no direct admission that this caused the claimant’s injuries.
[7](2001) 206 CLR 1 at 55, [168]
[8]above at [170]
[9][2004] WASC 47
[10](2005) 42 MVR 359 AT 361
[11][2021] NTSC 18 at [18]
[12] Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 at [6]
[13] Transcript 21/2/2022, at p 58
[14]Above, at p 58-59
[15]Above, at p 59
[16]Above, at p 60
[17]Note that the claim for benefits under the MAC Act alleged at paragraph 8 of the statement of claim is not admitted at paragraph 8 of each defence.
[18]Which is not clearly defined.
[19] Annexures A and B to the affidavit of Nathan Kennedy sworn 26 October 2021
[20] Affidavit Mark Spain sworn 16 February 2022, annexure 3
[21][2018] NTSC 50, at [7] – [22]
[22] Transcript 21/2/2022 at p 31, defendants’ written submissions 16/2/2022 at [6]-[11]
[23]Compaignie Financiere du Pacifique v. Peruvian Guano Co (1882) QBD 55, referred to in defendants’ submissions 16/2/2022 at [7].
[24]Above, n 5, at [9]
[25]Above, at [11]
[26]Affidavit Mark Cameron Spain sworn 16 February 2022, at [59]
[27] Above, at [61]-[65]
[28]Addressed further in discussion below as to specific categories.
[29]Annexure MCS 3, of affidavit of Mark Cameron Spain sworn 16 February 2022
[30]Affidavit Mark Cameron Spain sworn16 February 2022, at [39c]
[31]Transcript 21/2/2022, p 42
[32] Affidavit Anthony Crowe, affirmed 30 November 2021, at [6b]
[33]Affidavit of Anthony Crowe, affirmed 30 November 2021, at [6a] to [6c]
[34]Affidavit of Timothy Price sworn 31 January 2022, annexure Q at p 150-160
[35]Transcript 21/2/2022, p 46-47
[36]Affidavit Anthony Crowe, 30 November 2021, at [6f]
[37]Transcript, 21/2/2022, p 47
[38] Attachment C to the affidavit of Mark Spain of 16 February 2022
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