Toyota Motor Corporation Australia Limited v Williams

Toyota Motor Corporation Australia Limited appealed against a decision by the primary judge, who found that Toyota had breached the guarantee of acceptable quality under section 54 of the Australian Consumer Law. The case involved a class action brought on behalf of vehicle owners who had purchased new Toyota vehicles with a defective exhaust system. The court was required to determine the nature of the defect, the appropriate assessment of damages, and whether the statutory provisions could be applied on a common basis for all claimants. The primary judge found that the vehicles were of unacceptable quality due to the defect, and awarded damages based on a reduction in value. Toyota contested the primary judge’s interpretation of the statutory provisions and the assessment of damages.

The court considered the statutory provisions, focusing on the requirement for an objective assessment of the goods' quality from the perspective of a hypothetical reasonable consumer. It rejected Toyota's argument that the statutory provisions required a subjective assessment based on the individual circumstances of each consumer. The court found that the defect was significant and likely to manifest in common driving conditions, leading to a loss of utility for a reasonable consumer. Regarding the damages, the court determined that the primary judge's assessment of the reduction in value was incorrect and that the reduction in value should be re-assessed, taking into account the availability of a fix at the time of the trial. The court also found that the primary judge's use of expert evidence on the willingness to pay was flawed, and the damages should be re-assessed based on a common sense approach.

The appeal was allowed in part. The court set aside the primary judge's assessment of the reduction in value and ordered that the matter be remitted for re-assessment of the reduction in value damages and damages for excess GST. The parties were required to file written submissions on consequential orders and costs. The court's decision emphasised the importance of an objective assessment of the quality of goods and the need for a common approach to damages in class actions under the Australian Consumer Law.