Capic v Ford Motor Company of Australia Limited

AND: FORD MOTOR COMPANY OF AUSTRALIA LIMITED ACN 004 116 223 Respondent

PERRAM J: 1 Today is day seven of the trial and the second day on which the subject of common questions has been debated. The present debate concerns some of the allegations of knowledge made by the Applicant. The debate has been drawn out. Ford has presented its form of the questions, the Applicant has presented her form, and then at the close of business yesterday the Applicant presented some more questions. The proposed questions dealing with knowledge, which is the topic of present discussion, were numbered in the Applicant's document produced last night as Questions 10, 11 and 12. They refer to the Applicant's Fourth Further Amended Statement of Claim ('4FASOC') and are as follows: 10. Did the Respondent know, and if so, from when: (a) the matters pleaded at paragraph [20A(a)] of the 4FASOC? (b) the matters pleaded at paragraph [20A(b)] of the 4FASOC? 11. Did the Respondent know, and if so, from when the matters pleaded at paragraph [20B] of the 4FASOC? 12. Did the Respondent know, and if so, from when: (a) the matters pleaded at paragraph [20D(a)] of the 4FASOC? (b) the matters pleaded at paragraph [20D(b)] of the 4FASOC? (c) the matters pleaded at paragraph [20D(c)] of the 4FASOC? (d) the matters pleaded at paragraph [22] of the 4FASOC? 2 Ford accepts that Questions 11 and 12(a) are appropriate. During the course of argument this morning the Applicant accepted that Question 12(c) was not appropriate. That leaves for resolution Questions 10, 12(b) and 12(d). 3 It is useful to begin first with Question 12(b). It seeks to pose the question of what Ford knew about the matters pleaded in s20D(b). The Applicant wishes to pose the question of whether, and if so from when, Ford knew of those matters. Paragraph 20D(b) is in the following terms: 20D. 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: … (b) those steps had not, or had not adequately, remedied the Vehicle Defects and the Powershift Transmission Defect (or one, some or all of them) … 4 This question would involve an analysis of what Ford knew about each vehicle and its repair history. It is difficult to see that the position of every vehicle will not be different. Each car will have a unique repair and maintenance history. I do not understand how that could generate a common issue across the class. I reject the proposed question. 5 The next issue concerns Question 12(d). It involves a debate about the knowledge that Ford had of the matters pleaded in s22. It alleges: 22. The Vehicle Defects and PowerShift Transmission Defect (or any of them) in the Affected Vehicles continued after the Affected Vehicles had been purportedly repaired and after the relevant warranty had been extended by Ford Australia. Particulars The Applicant refers to and repeats the particulars to paragraphs 6AK and 6AM. Ford Australia Admissions, [31], [35], [40]-[41], [51], [52], [63]. 6 This paragraph makes no allegations of knowledge by Ford. However, it is picked up by s24 which is as follows: 24. At all material times during the relevant period, Ford Australia was aware of the matters pleaded in paragraphs 20A-23 above. Particulars The Applicant refers to and repeats the particulars to paragraphs 20B-23 above. Ford Australia was aware from Ford Motor Company in the USA that Ford Fiesta and Ford Focus models supplied in the USA, and equipped with a similar PowerShift transmission, experienced problems similar to those experienced in the Affected Vehicles (further details will be provided after discovery). Ford Australia issued technical service bulletins to Ford dealers advising of problems experienced with the PowerShift Transmission (further details will be provided after discovery). Group Members raised concerns about the performance of Affected Vehicles with Ford dealers. 7 In terms, s24 picks up s22 and alleges that Ford knew of this matter. Assuming that matter in the Applicant's favour, the problem is that s22 suffers from the same difficulty that s20D(b) suffers from. Because it turns on what has happened to individual cars which have been repaired, it cannot present any common issue for resolution. I reject it. 8 The final issue concerns Question 10. This really involves two issues about its subparagraphs (a) and (b). Both of those subparagraphs turn on s20A. It is in the following terms: 20A. During the relevant period Affected Vehicles contained, or were part of model lines containing: (a) the Vehicle Defects; (b) further or alternatively, the Powershift Transmission Defect in that the PowerShift Transmission in Affected Vehicles caused, or had a propensity to cause, some or all of the following problems: (1) Delayed or harsh gear shifting during acceleration; (2) Sudden gear change or skipping gears, leading to shuddering, jerking, bucking or kicking of the vehicle; (3) Harsh transmission noise; (4) Unsteady and/or uncontrolled movement; (5) Transmission overheating and malfunction; (6) Loud engine noise; (7) sudden loss of power in ordinary driving conditions. … 9 This paragraph contains no allegation of knowledge by Ford. However, s24 alleges that Ford knew of several matters including those which are set out in s20A. The terms of s24 are important and I have set them out at [6] above. 10 The particulars are especially important. The way in which the Applicant will prove Ford's knowledge of the matter pleaded in s20A is by means of the repeated particulars to ss20B to 23 and then the further subscribed three freestanding particulars set out after the reference to ss20B to 23. 11 Dealing with each in turn, one begins with s20B. Ford has already accepted that there should be a common question as to whether it knew the matters alleged in s20B. So to the extent that s24 through s20A seeks to raise the same matter, it is redundant. 12 The next particularised paragraph is s20C. It provides: 20C. By reason of the matters alleged in paragraph 20B, during the relevant period, Ford Australia knew of the facts underlying the Vehicle Defects and the PowerShift Transmission Defect (or one, some or all of them). 13 This paragraph has no particulars and adds nothing to s20B in terms of factual matters. It, too, therefore, does not advance matters. 14 Paragraph 20D is the next particularised paragraph. It provides: 20D. 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); (b) those steps had not, or had not adequately, remedied the Vehicle Defects and the Powershift Transmission Defect (or one, some or all of them) (c) consumers were entitled to remedies under the ACL in respect of goods not of acceptable quality. 15 I have already rejected s20D(b) on the basis that it does not give rise to a common question. The Applicant accepted that s20D(c) did not give rise to a common question. This leaves s20D(a). However, Ford has agreed that s20D(a) does raise a common question. Since it is to be asked, it does not add anything in the present context. 16 Paragraph 21 is the next particularised paragraph. It provides: 21. Ford Australia issued notices to advise the Applicant and Group Members of certain defects in the Affected Vehicles and to have the Affected Vehicles returned for repair. 17 Contrary to what is suggested by the particulars to s24, this paragraph has no particulars. Accordingly it does not fall for consideration. 18 Paragraph 22 is the next particularised paragraph. It is as follows: 22. The Vehicle Defects and PowerShift Transmission Defect (or any of them) in the Affected Vehicles continued after the Affected Vehicles had been purportedly repaired and after the relevant warranty had been extended by Ford Australia. Particulars The Applicant refers to and repeats the particulars to paragraphs 6AK and 6AM. Ford Australia Admissions, [31], [35], [40]-[41], [51], [52], [63]. 19 I have already rejected s22 as being suitable as a common question. It is, therefore, not of any present utility. 20 The next particularised paragraph is s23. It is in these terms: 23. Until at least April 2018 Ford Australia did not disclose, or adequately disclose, to persons acquiring an interest in an Affected Vehicle, persons who had already acquired an interest in an Affected Vehicle, or to the public: (a) the existence, nature and extent of the Vehicle Defects and the PowerShift Transmission Defect (or any of them) in the Affected Vehicles; (b) that Ford Australia had issued Customer Satisfaction Programs (sic) notices and bulletins to existing customers who had purchased Affected Vehicles, recalling them for repair; and/or (c) that the Vehicle Defects and/or PowerShift Transmission Defect (or any of them) in the Affected Vehicles continued notwithstanding repeated, and multiple, servicing and/or attempted repair of and/or replacement of components in the Affected Vehicles by authorised Ford dealers; (collectively, Ford Australia's Omissions) Particulars Ford Australia Admissions. [67]-[71], [74], [76], [77]. Ford Australia's Undertaking to the Australian Competition and Consumer Commission dated 19 April 2018 [2.4]. 21 There is simply no logical way this can advance the contention contained in s24 that Ford knew of the matters in s20A (that there were vehicle defects, etcetera). It is an entirely different topic. 22 It is then necessary to deal with the three freestanding particulars to s24. The first of these is that Ford Australia was aware from Ford US that the Fiesta and Focus vehicles in the US had experienced similar problems to those experienced by the vehicles in the class. The same allegation, however, may be found at ss20B(a) and 20B(b), which are in these terms: 20B. During the relevant period, Ford Australia knew: (a) from as early as 2010, that vehicles containing a PowerShift Transmission had exhibited no engagement or intermittent no engagement in Drive or Reverse, or when shifting from Park to Drive or Reverse, grinding noise during engagement, and/or a check engine light with transmission control Module diagnostic trouble code; Particulars Ford Motor Company (US) Technical Service Bulletin, September 2010. Ford Australia's knowledge may be inferred from the material facts pleaded in paragraphs 6(g) and 6AI above and Ford Australia's Admissions, [17]. (b) from as early as January 2011, that vehicles containing a PowerShift Transmission had exhibited a loss of power, hesitation, surge, or lack of throttle response while driving; Particulars Ford Motor Company (US) Technical Service Bulletin, 1 January 2011. Ford Australia's knowledge may be inferred from the material facts pleaded in paragraphs 6(g) and 6AI above and Ford Australia's Admissions, [17]. 23 This matters because Ford accepts that a common question may be asked about these paragraphs. Asking it through s20A as picked up by s24 therefore adds nothing to the debate. 24 The second freestanding particular is that Ford issued technical service bulletins to Ford dealers advising of problems with the transmission. A very similar allegation may be found at s20B(e): 20B. During the relevant period, Ford Australia knew: … (e) from as early as March 2012, that vehicles containing a PowerShift Transmission were exhibiting intermittent clutch shudder and wet clutch shudder which Ford Australia attributed to issues resulting from leaking input shaft seals; Particulars Ford Australia Admissions, [18]-[21]. Getrag Supplier- 8D Status Report, dated 7 March 2012, FOR. 708.001.0430. Technical Service Bulletin, 14/13, 8 October 2013, FOR.004.001.0089. Technical Service Bulletin, 14/13 (Reissued) 27 June 2014, FOR.604.001.0012. Chris Kwasniewicz et al, "2011-13MY DPS6 Transmission Seal Leaks" 8 October 2013, FOR. 705.001.1044. B200A DPS issues, FOR.703.001.3618. The Applicant refers to and repeats paragraph 6AB(a)(i) and (ii) above. 25 It is possible, I suppose, that the allegation in the s24 particulars is broader and encompasses more technical service bulletins than might be encompassed by the more specific allegation contained at s20B(e). However, no submission to that effect was made to me in the present debate. In that circumstance, I do not see that this particular adds anything to s20B. 26 The final freestanding particular was that group members raised concerns about the performance of the vehicles with Ford dealers. The same allegation may be found at s20B(u), which is in these terms: 20B. During the relevant period, Ford Australia knew: … (u) the substance of the thousands of complaints made to and passed on or reported by Dealers to Ford Australia through its Customer Relationship Centre (CRC) which deals with complaints and enquiries from customers and Dealers. Ford Australia was aware of the complaints often on or about the dates they were received (either by the CRC, or by its Dealers who reported them to the CRC) and tracked them, including to report to senior management; Particulars The total number of "cases" opened by the CRC relating to Affected Vehicles in each calendar year between 2011 and 2016 were approximately: • 2011 - 284 • 2012 - 813 • 2013 - 1,254 • 2014 - 1,708 • 2015 - 4,374 • 2016 - 8,238. Ford Australia Admissions [36]-[37]. 27 Permitting this to have a second life under the s20A/s24 axis would be pointless. In that circumstance, the particulars to s24 either cannot support an allegation that Ford knew of the matters in s20A (ie s21 because it contains no particulars, or s23 because it lacks logic) or the allegation in question is not suitable as a common question, or the matter is already alleged elsewhere where there is agreement that a common question may be posed. In those circumstances it is not appropriate to state a common question about Ford's knowledge of the matters in s20A. Question 10 is rejected. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.