Mr Cruse
142 Mark Cruse is presently employed by the Respondent as the Customer Service Engineering Manager in its International Markets Group. He has worked for the Respondent in a number of roles since 2002 but, relevantly for this trial, was employed as its Service Engineering Manager from August 2014 to January 2018, replacing Mr Karageorgiou. His duties at that time included dealer technical support for field service actions and managing campaigns, recalls, technical hotlines, field service engineers, training, tools, diagnostics and publications. He is also a qualified motor mechanic and is qualified in, and has taught, automotive engineering.
143 Mr Cruse made an affidavit dated 1 October 2019 which was read at trial with some minor objections limiting the use of certain sentences. He was called as one of the Respondent's witnesses on the 11th and 12th days of the trial, Monday 29 June 2020 and Tuesday 30 June 2020. He was examined in chief at T631, cross-examined from T632-751 and re-examined from T752-755.
144 He gave evidence about the nature of the DPS6 transmission, the position of the Respondent as part of Ford US' Asia-Pacific region, the process of updating the DPS6 transmission based on field experience and its normal operating characteristics. He also gave evidence about difficulties with the DPS6 which were known to the Respondent by 2016: wet clutch shudder, the TCM solder issue and dry clutch shudder. He explained Ford US' global quality monitoring process and the manner in which the Respondent was notified of quality concerns with Ford vehicles and the processes by which it passed that kind of information on to its dealers. He gave specific evidence about what he knew about the DPS6 during his tenure as the Service Engineering Manager commencing with the handover period with Mr Karageorgiou in July 2014. He explained the various technical service bulletins which had been issued during that time, the warranty extensions that had been granted and the additional training which had been given to dealers. He gave specific evidence about a change in the clutch friction material which became available in Australia from May 2016. Mr Cruse said that by the end of 2016 he thought that the three quality concerns with the DPS6 referred to above had been resolved.
145 I deal with the specific issues raised by Mr Cruse's evidence later in these reasons. However, it is convenient to deal at this juncture with the Applicant's global criticisms of his evidence. The Applicant submitted that Mr Cruse gave his evidence about the Respondent's knowledge of the Component Deficiencies at a high level of generality. She also submitted that his evidence reflected the Respondent's 'company line'. It was said that he had resorted, under cross-examination, to responses such as 'not specifically', 'not necessarily' and 'I can't recall'.
146 During his cross-examination over two days, Mr Cruse did not answer any question 'not specifically'.
147 There were 12 occasions on which he used words to a similar effect. They are at T635.9, T645.36, T670.43, T675.10, T682.15, T683.39, T685.6, T696.39, T717.10, T718.12, T720.24 and T725.31. I have examined each of those and I do not consider that they reflect adversely on his credit when read in context.
148 He had answered two questions 'not necessarily'. The first was at T695.45-696.3:
And would also lead to decreased performance of the transmission?---Can you explain what you mean by performance in this case, Mr Pike.
Well, the fuel efficiency of it, for one?---Well, not necessarily, because it would get into its top gear on the highway and still operate locked up. So I don't know that it would hurt the fuel efficiency necessarily, Mr Pike.
149 I do not consider that this reflects adversely of Mr Cruse's credit. The second was at T725.4-16:
However you wish, Mr Cruse?---Yes. 1, I was aware of; that's the assembly plant damage on installation. And 5. I had some knowledge that the surface finish was contributing. The others I was not aware of.
All right. So 5 is a design issue?---Not necessarily.
Well, it says:
Design not to Ford guidelines.
So I want to suggest to you it's a design issue?---Okay. As suggested there, I knew there was surface finish concerns, which could have, in my mind, been machining. I had not seen this, Mr Pike.
150 Although Mr Cruse accepted the cross-examiner's position I do not think this supports the broader contention that he was resistant or equivocal in his answers. Mr Cruse used the answer 'I can't recall' or 'I don't recall' on 23 occasions during his cross-examination. These are at T635.9, T641.32, T642.18, T646.25, T646.30, T646.35, T646.41, T647.2, T647.45, T670.32, T670.44, T678.21, T679.31, T679.42, T696.39, T708.29, T708.40, T717.1, T717.10, T718.12, T733.26, T740.40 and T745.24. I have examined each of these. Each appears to be an example of Mr Cruse legitimately saying that he could not recall. Given that most of this evidence related to events which occurred 8 years ago this is unsurprising. There was no challenge to him on any of these occasions to the effect that he could recall.
151 As to the 'company line' submission, that was not my apprehension of his evidence if by that it is meant that he gave evidence contrary to the fact so as to further the position of the Respondent. No doubt, he was sympathetic to the Respondent but it was not my impression that he was willing to give incorrect evidence to further its position.
152 It was also said that his responses were often inconsistent with objective contemporaneous or underlying documents. These documents were not identified and the submission, in that circumstance, is not able to be assessed in that general form.
153 The Applicant also submitted that Mr Cruse had been heavily prepared for his cross-examination. Under cross-examination, he said that he had spent 'weeks' preparing for it: T646.44, T650.22 and T680.15. I accept that Mr Cruse had prepared heavily for the cross-examination. That is not a surprising proposition where the Applicant is suing the Respondent for hundreds of millions of dollars and Mr Cruse is an important one of the Respondent's witnesses who is still employed by it. I do not think it reflects adversely on his credit. No doubt it means that he had had a thorough opportunity to think through the matters in relation to which he was challenged but I did not obtain the impression he was reciting his evidence programmatically or delivering speeches.
154 The Applicant submitted that Mr Cruse's evidence should be approached with care because it was apparent that he was often unwilling to concede matters until confronted with a document. Three examples were given.
155 The first example was that he had denied under cross-examination that he was aware in mid-2010 that Volkswagen produced a car which contained (as the Affected Vehicles do) a dry dual clutch transmission and only accepted that he must have been aware of it by at least April 2012 when he was taken to a document. The evidence does not bear this out. The relevant question appeared at T635.18-25:
All right. Now, you're aware - sorry, you were aware in sort of mid-2010 that the DPS6 was Ford's first dry dual clutch technology transmission?---Yes.
Were you aware at the time that VW and its associated brands had a dry dual clutch transmission in service?---No, I was not.
(Emphasis added)
156 So what Mr Cruse was asked was whether he was aware in mid-2010 (ie 'at the time') that Volkswagen had a dry dual clutch transmission. He was then asked at T648.34-40 about an email he had sent on 26 April 2012 whose subject heading was 'Re: "TGW" for VW DSG in China/DPS6 Market Intro':
And if you have a look again at the subject there, Mr Cruse, do you see the subject?---Yes.
TGW or VWDSG in China/DGS6 market intro. Do you see that?---Yes, I do.
So do you accept by this time, so April 2012, you were aware of a VW dry dual clutch transmission?---Based on the heading, yes, aware of the existence, yes.
157 I see no contradiction between Mr Cruse's initial evidence that he was not aware of the Volkswagen dry dual clutch in mid-2010 and his acceptance, based on his email, that he was aware of it by April 2012. The Applicant's submission about this suggested that he had initially denied being aware of it in 2010 but this had changed when he was confronted with the email. But his evidence about that never changed. It was not suggested to him that he was aware in mid-2010 of the Volkswagen dry dual clutch transmission. There is no basis in the evidence which supports the contention that Mr Cruse had given evidence about what he knew in mid-2010 and then recanted from it when confronted with the email. I reject the submission that the first example reflects poorly on Mr Cruse's credit.
158 The second example concerned an internal Ford US document dated 8 January 2012 and entitled 'DPS6 Lessons Learned Paper - Summary of Key Issues for the DPS6 Transmission Project'. It is an engineering document concerned with various issues which had arisen in relation to the DPS6 transmission by 8 January 2012. The cross-examination of Mr Cruse sought to have him accept that he was aware of this document by April 2012. This was done by taking him through an email chain in April 2012 in which Mr Cruse had referred to the Lessons Learned document. I interpolate that at this point in the cross-examination Mr Cruse had not been shown the Lessons Learned document. Even so, he conceded in the face of the email chain that he was aware of it but only as a document relating to training at T645.16-24:
MR PIKE: All right. But I want to suggest to you you were aware at this time of an actual document in relation to the DPS6 transmission that was a lessons learned document?---From a training perspective, I will say yes. For anything else, I will say no.
All right. But it's - I'm talking about an actual document actually headed Lessons Learned. You were aware of it, weren't you?---I'm not aware, based on the context. If you're saying training, I expect there's something heading Lessons Learned for training. Anything else, I'm - I'm not aware of at this time.
159 He was then shown the Lessons Learned document at T646.9 and asked about whether he could deny knowing of the document in April 2012:
All right. You're not in a position to deny that you saw it prior to April 2012; correct?---Please continue. I will try to see if I can remember something. Please continue. Again. Again. Again. Again. Once more, please. Again. Once more. Again. Mr Pike, I - I don't recall seeing that at that time. I just simply don't recall it.
All right. But, again, you're not able to deny that you had seen it prior to April 2012?---I can't deny, no.
All right?---I can't recall seeing it either.
Have you seen it - are you meaning to convey, by the answer that you've just given, that you have seen it since April 2012?---I've seen it in recent weeks, as supplied by Allens, for review.
160 The multiple references to 'again' are Mr Cruse directing the document operator to scroll through the document and may be disregarded. What I get from this exchange is that Mr Cruse probably was aware of the Lessons Learned document in April 2012 but had no actual recollection of the matter.
161 In the Applicant's submissions it was then said that Mr Cruse ultimately accepted that he had been aware of the Lesson Learned document in April 2012 and this was shown by exchanges which happened at T647 and T649. This submission does not go very far, however. Mr Cruse had, in fact, already conceded that he must have been aware of the document because of the email chain at T645 extracted above but he had added the rider that he would have been aware of it only from a training perspective. I do not think that the transcript at T647.42-45 and T649.27-28 cited by the Applicant supports the contention that he ultimately accepted that he had been aware of it in April 2012 for three reasons. First, the word ultimately is unsound when he had already accepted that he was aware of it. Secondly, there might nevertheless be second life for the contention were it to be shown that Mr Cruse had abandoned his qualification that he had been aware of the document only from a training perspective but T647.42-45 simply does not establish this:
And don't you accept, therefore, that you must have been aware, as at April 2012, of the first document that I just showed to you, being the USA lessons learned document?---That's what's being referred to here as a USA lessons learned publication. Other than that, I don't recall the document, Mr Pike.
162 Thirdly, contrary to the Applicant's submission at [73], T649.27-28 does not establish that Mr Cruse 'ultimately conceded he had been aware of it in April 2012'. What it says is this:
And so would you accept this document that is on screen is likely to be the attachment that is referred to in your email?---Yes.
163 However, the document on the screen was an Excel spreadsheet which had been attached to an email sent by Mr Cruse: T649.17. It was not the Lessons Learned document. Consequently, this evidence does not support the contention.
164 In her written submissions in reply the Applicant sought to buttress this case by reference to the answer given by Mr Cruse at T641.14-16:
MR PIKE: So you're aware, aren't you, Mr Cruse, of something called lessons learned documents in relation to the DPS6 transmission?---I'm, at this stage, not yet sure of what you're referring to, Mr Pike, no.
165 This was the first question Mr Cruse was asked in this exchange. This is not evidence that Mr Cruse was unaware of the document; it is evidence that he did not know what the cross-examiner was talking about. I have considered whether the point the Applicant was trying to make here was that Mr Cruse perhaps was giving evidence about two different documents. One of these was generated by his office and was concerned with lessons learned from a training perspective and the other was the Ford US Lessons Learned document. Combing the transcript one can perhaps cobble together such a proposition (see eg, T645.33-46) but I do not really think that was put squarely. In any event, I do not think it matters. Whatever the Applicant's submission about this was, I simply do not think that Mr Cruse was really seeking to be evasive about it.
166 I do not accept therefore the Applicant's submission that Mr Cruse gave evidence about when he knew of the Lessons Learned document from which he ultimately resiled. His substantive evidence at the start of this section of cross-examination (leaving aside the first answer to which I have referred) was that he was aware of the document from a training perspective. I do not apprehend his evidence was any different by the end of this phase of his cross-examination. I do not accept therefore the Applicant's implicit submission at [73] that he had given inaccurate evidence at the outset of this topic from which he had then, confronted with documentation, resiled. That is not what happened.
167 The third example concerned input shaft seal leaks. The Applicant's point was that Mr Cruse had 'initially' refused to concede that he had been aware in 2014 that the seal leak was a design issue but that he had 'ultimately' conceded this 'because he had known that the replacement seals were more robust and involved a "change to the seal"' at T685.1-9.
168 The Applicant's submissions did not identify where Mr Cruse had initially refused to concede that he had been aware in 2014 that the seal leak was a design issue. At T650.27-34 Mr Cruse agreed that he had been aware in 2013/2014 that there was an issue with the input shaft seals and oil leaking through them. At T650.37 he said that he had not been aware in 2013/2014 that the input shaft seal leak issue was a design issue.
169 The evidence that Mr Cruse resiled from this was at T684.40-685.9:
All right. And we're dealing here with August 2014; correct?---Yes.
And the - so do you mean to convey by those answers that you understood then that part of the work being done in relation to the seals was to make them more robust; correct?---Yes. And - and bear in mind I walked into the role and this work had been done. So we had a TSB, we had seals that were now brown instead of black, and - and we had our instruction out to the dealer body when I walk in to that role. Correct.
But just to be clear, you understood that the brown seals were more robust than the black seals; correct?---Yes. Yes. Correct.
And because they were made with a different material, which obviously had different properties; correct?---I wasn't aware of the materials change. I wasn't aware of the specifics of the robustness action.
You were at least aware, weren't you, that they were more robust because of a changed design?---A change to the seal, yes. Yes.
170 Whether one regards Mr Cruse as having recanted from his earlier evidence at T650.37 that he was not aware that the input shaft seal leak issue was a design issue depends upon whether one reads this evidence as demonstrating an acceptance on his part that the switch from black seals to more robust brown seals was a design change. I do not read his final answer as evidencing that. I read his final answer as him accepting that the change to the seal had resulted in a more robust seal. I do not read it as Mr Cruse accepting that the change to the seals was a design change. I read the answer as accepting that the new seals were more robust ('yes') but because of a change in the seal ('a change to the seal') rather than a 'changed design'. The cross-examiner's position was that a change in the seal material meant that the issue with the old seals must therefore have been a design issue. I do not think this was Mr Cruse's position.
171 Consequently, I do not accept that Mr Cruse resiled from his earlier evidence and I do not accept that this evidence detracts from his credit.
172 The Applicant then finally submitted that Mr Cruse seemed to have prepared answers on topics of interest. There were two steps to this argument:
(a) He had given long non-responsive answers to questions relating to the topics of safety or the TCM at T693.22-33, T693.38-41; and
(b) When asked a simple question about how he defined a safety issue he had said at T703.16-17 'Do you want to talk about TCMs, Mr Pike, first?'
173 I do not think the answers in (a) were not responsive and whilst I would accept that the first answer was long, the second was not. The first part of the series of questions and answers leading up to and including T693.22-33 is as follows:
All right. But you know people in the real world sometimes don't always react to even months and months of warning in relation to lights going on; that's correct, isn't it?---Yes. We would expect that they should though, Mr Pike.
But, for example, if you've got a teenage son that just keeps driving a car until maybe his father gets in the car and sees the warning light has been on for a number of months. That's a real world situation, isn't it, Mr Cruse?---Yes, I think both you and I experience it, by that look on your face, Mr Pike.
I'm living it every day. But that's all right. But it's a real world situation, isn't it?---Yes. People do ignore things, but - but let's walk through this one so we're all clear. An ATIC91 chip will take years to initially propagate. So this car could be three or four-year old, maybe six-year old. And then when it does begin, it will indicate to the driver through drivability issues. There will be this jerkiness that we're talking about. And then that will go for months. That will go for three or four months of intermittent every now and again it's doing this jerk to me. And that's what the customer would complain of. Ultimately, if ignored, that customer then will have trouble getting out of park. There will be lights on the dash and the vehicle would be able to roll for many, many metres. If it was un - non-powered through the transmission, in something in the order of 500 metres, it would roll for and probably near a minute. And in that time all steering and braking would be still functional, Mr Pike.
174 The cross-examiner was positing the example of a wayward teenage son who was likely to ignore the warning light on the dashboard. The witness was saying that both he and the cross-examiner appeared, from the look on the cross-examiner's face, to be suffering from the same kind of teenage son. The substantive answer he then gave was to the effect that even with such a driver the nature of the problem was such that it would eventually mean that the car could not be driven. I do not think this was non-responsive. It may have been the result of some pre-examination thinking by Mr Cruse - I cannot say - but even if it was, it does not detract from the responsiveness of the answer.
175 The second part was this (at T693.35-41):
All right. But if you're, for example, going across an intersection at the time of immediate failure, you wouldn't be able to put any power on to enable to you get out of the problem; correct?---Yes. Similarly, you may not have been timetable power into the problem, depending on your chances on the day. You may not have moved off, Mr Pike. One of the more severe failure modes here is that it won't move away from a stationary position. It won't go. So you may not have been moved into problem in the first place.
176 This does not appear to be long or unresponsive. Dealing with (b), the full exchange is at T703.10-25:
48. You say there that:
None of the quality issues described above have ever posed a safety issue.
Do you see that?---Yes.
How do you define a safety issue in that context, sir?---Can we break them down? Do you want to talk about TCMs, Mr Pike, first?
I just want to get an understanding first, if I could, Mr Cruse, about what you mean by "safety issue", being the term you have used in your affidavit?---Okay. So a safety issue to me is one that is catastrophic. One that comes with no warning. One that renders the vehicle uncontrollable. Maybe a good example would be a steering arm that falls off the vehicle or a steering rack and I have no control. A brake system that catastrophically fails or maybe a safety system like an airbag and Takata is another good example.
177 When this evidence was given, I did have the impression that Mr Cruse had something to say about the TCM issue and, in the context, I am prepared to accept that he may have been attempting to give a prepared answer to this question. However, at least at this juncture the cross-examiner did not permit him to deliver whatever he was going to say about the TCM issue.
178 I therefore reject the Applicant's attack on Mr Cruse's credibility except the last one. To accept that is, however, only to accept that Mr Cruse had evidently thought about the TCM issue from a safety perspective and had tried unsuccessfully to give those views voice at that juncture in the cross-examination. I do not accept the implicit, broader, proposition at [75] of the Applicant's submissions that Mr Cruse's evidence should somehow be discounted because much of it had been pre-prepared. That was not shown even allowing for the answer at T703.16-17.
179 I conclude that Mr Cruse was a reliable witness and I do not think that I should be circumspect in the use to which his evidence is put.