Dwyer v Volkswagen Group Australia Pty Ltd

HCA 66 BHP Group Ltd v Impiombato (2021) 286 FCR 625; [2021] FCAFC 93 Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 Capic v Ford Motor Company of Australia Pty Ltd [2021] FCA 715; (2021) 154 ACSR 235 Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 Dwyer v Volkswagen Group Australia Pty Ltd t/as Volkswagen Australia [2021] NSWSC 715 Dwyer v Volkswagen Group Australia Pty Ltd t/as Volkswagen Australia (No 2) [2021] NSWSC 1137 Dyczynski v Gibson (2020) 280 FCR 583; [2020] FCAFC 120 Effem Foods Ltd v Nicholls [2004] NSWCA 332; (2004) ATPR 42-034 Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410 Ethicon Sàrl v Grill (2021) 288 FCR 338; [2021] FCAFC 29 Gill v Ethicon Sàrl (No 3) [2019] FCA 587; (2019) 369 ALR 175 Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 68 Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; [2002] HCA 41 Jonval Builders Pty Ltd v Commissioner for Fair Trading (2020) 104 NSWLR 1; [2020] NSWCA 233 Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281; [1995] HCA 4 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69 Medtel Pty Ltd v Courtney (2003) FCR 182; [2003] FCAFC 151 Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 Paino v Paino [2008] NSWCA 276 Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326; [2020] HCA 17 Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3 Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 196 ALR 257 Potts v Miller (1940) 64 CLR 282; [1940] HCA 43 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338 Registrar of Titles (WA) v Franzon (1975) 132 CLR 611; [1975] HCA 41 Republic of Croatia v Sneddon (2010) 241 CLR 461; [2010] HCA 14 R v Khazaal (2012) 246 CLR 601; [2012] HCA 26 Scenic Tours Pty Ltd v Moore [2018] NSWCA 238; (2018) 361 ALR 456 Scenic Tours Pty Ltd v Moore [2023] NSWCA 74 Searle v The Commonwealth (2019) 100 NSWLR 55; [2019] NSWCA 127 Sun v Chapman [2022] NSWCA 132 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 Takata Airbags Class Action - Common Questions [2018] NSWSC 1868 TAL Life Ltd v Shuetrim; Metlife Insurance Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 The King v Jacobs Group (Australia) Pty Ltd (formerly known as Sinclair Knight Merz) [2023] HCA 23 Timbercorp Finance Pty Ltd (in liquidation) v Collins (2016) 259 CLR 212; [206] HCA 44 Toyota Motor Corporation Australia Ltd v Williams [2023] FCAFC 50; (2023) 408 ALR 582 Vautin v By Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426; (2018) 362 ALR 702 Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12 Waters v Public Transport Commission (1991) 173 CLR 349; [1991] HCA 49 Williams v Toyota Motor Corporation Australia Ltd (Initial Trial) [2022] FCA 344 Category: Principal judgment Parties: Philip Dwyer (Appellant) Volkswagen Group Australia Pty Ltd t/as Volkswagen Australia (Respondent) Representation: Counsel: C R C Newlinds SC / D Barnett (Appellant) S J Free SC / I Ahmed / C Winnett (Respondent)

Solicitors: Quinn Emanuel Urquhart & Sullivan, LLP (Appellant) Clayton Utz (Respondent) File Number(s): 2021/204042 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2021] NSWSC 715; [2021] NSWSC 1137 Date of Decision: 18 June 2021; 7 September 2021 Before: Stevenson J File Number(s): 2018/322648

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] Volkswagen Australia (VW) supplied to consumers in Australia various models of Volkswagen vehicles manufactured by its German parent company Volkswagen Aktiengesellschaft (VW AG) fitted with driver side airbags manufactured by Takata Corporation or its related entities (Takata). Those airbags were designed by Takata to be inflated by gas generated by the ignition of a propellant inside the airbag inflator known as phase stabilised ammonium nitrate (PSAN). In February 2016, VW AG commenced an empirical analysis program, involving some 20,000 airbags retrieved from the field worldwide for the purpose of investigating whether the PSAN used in the airbags in Volkswagen vehicles posed a safety risk. VW AG determined that there was no systemic safety risk associated with the Takata airbags installed in Volkswagen vehicles that would warrant their recall. However, following a recall notice issued in February 2018 by the Assistant Minister to the Commonwealth Treasurer in relation to a wide class of vehicles, including some Volkswagen vehicles, VW initiated a recall program of its models in Australia containing the affected Takata airbags and progressively replaced the airbags in those vehicles, at no cost (subject to a small number of exceptions where VW had applied to the Australian Competition and Consumer Commission for an exemption). The appellant, Prof Dwyer, acquired a VW Passat vehicle for approximately $40,000 in 2013. He commenced representative proceedings against VW on behalf of members of a group consisting of some 83,000 persons who purchased various models of new and second-hand Volkswagen vehicles in Australia between 2007 and 2018 (the VW Vehicles). The appellant claimed that his vehicle was not safe and free from defects, given the installation of the Takata airbag, and therefore did not comply with the consumer guarantee of "acceptable quality" in s 54 of the Australian Consumer Law (ACL). He claimed that the use of PSAN as the propellant in the Takata airbags installed in the VW Vehicles created a risk of mis-deployment or rupture of the airbag, and that risk was present at the time of purchase. The risk was said to arise because PSAN has a propensity to degrade over time when exposed to moisture and temperature fluctuations and, if the PSAN degraded sufficiently, it could burn so aggressively that the airbag inflator could rupture in a life-threatening way. The appellant accepted that the alleged risk was unquantifiable in that it cannot be predicted when and in what circumstances the PSAN in the airbags in the VW Vehicles might degrade to a functionally significant degree. The appellant sought damages for himself and on behalf of relevant group members under s 272 of the ACL for any reduction in the value of his vehicle resulting from the failure to comply with the consumer guarantee and for consequential loss. He also sought damages under s 74D of the Trade Practices Act 1974 (Cth) on behalf of group members who purchased their vehicles before 1 January 2011 for alleged breach of the warranty of "merchantable quality". The primary judge rejected the appellant's claim. His Honour found that the appellant had not established any link between the propensity of PSAN to degrade and any relevant, functionally significant, propensity of the PSAN to degrade in the particular airbag installed in the appellant's vehicle so as to cause it to rupture or malfunction. His Honour also made contingent findings that if the acceptable quality guarantee had been breached (i) VW would have the benefit of the defence in s 271(2)(a) of the ACL, as the assumed failure to comply with the acceptable quality guarantee occurred "only because of" "an act, default or omission of … any person other than the manufacturer", relevantly, Takata; and (ii) the appellant had not established an entitlement to damages as referred to in s 272 of the ACL. The common questions in the proceedings were answered adversely to the appellant and group members and the proceedings were dismissed with costs. On appeal, Prof Dwyer limited his case on breach of the acceptable quality guarantee to the alleged risk of rupture of the airbags in the VW Vehicles. The Court held (Gleeson JA, Leeming and White JJA agreeing), dismissing the appeal: As to the acceptable quality guarantee (1) There was no error by the primary judge in finding that the results of VW AG's empirical analysis program suggested, very strongly, that there was no reason to predict that the airbag inflators installed in Volkswagen vehicles will become critical or dangerous: [127]. (2) Although unacceptable quality may be demonstrated on the basis of an inherent risk associated with a product without that risk actually having materialised, it is first necessary to establish that the product carries the inherent risk alleged: [146]. Medtel Pty Ltd v Courtney (2003) 130 FCR 182; [2003] FCAFC 151; Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338, considered. (3) The appellant failed to prove that the airbags in the VW Vehicles carried the inherent risk alleged. The appellant's expert, Mr Renz, accepted that he could not say that degradation would reach a point of functional significance at any identifiable point in time, let alone within the service life of any of the VW Vehicles: [100], [147]. (4) The primary judge did not err in finding that the appellant had failed to prove, on the balance of probabilities, that the propensity or risk of PSAN to degrade in the presence of moisture and temperature changes would materialise at any identifiable point in time in the VW Vehicles: [148]. (5) The appellant's contention that there was an unquantifiable risk of serious harm because the risk of rupture had not been excluded for the realistic life of the good reversed the onus of proof. There was no error in the primary judge's finding that the appellant had not sought to demonstrate that the alleged risk could eventuate during any meaningful timeframe: [153]. (6) His Honour was correct to conclude that the appellant had failed to establish a breach of the acceptable quality guarantee in ACL, s 54. A merely speculative theoretical possibility of a risk of rupture of the airbag, not within any meaningful timeframe, would not be regarded as unacceptable by a reasonable consumer: [151], [154]-[156]. As to the applicability of the defence in s 271(2)(a) (7) The phrase "only because of" in s 271(2)(a) is a relational term. The manufacturer's defence in s 271(2)(a) directs attention to the fact or facts which made the goods of unacceptable quality under the consumer guarantee. Having identified the fact or facts, the question is whether the goods were not of acceptable quality only because of an act, default or omission of any person, other than the manufacturer, or an employee or agent of the manufacturer. If the sole cause of what made the goods non-compliant with the consumer guarantee is an act, default or omission of a third party supplier of a component of the goods who is not the agent of the manufacturer, there is no reason to deny the defence to the manufacturer: [172]-[186]. (8) The reference to the "manufacturer" in s 271(2)(a) should be read distributively to include both the actual manufacturer of the vehicles located overseas (here, VW AG) and the importer of the vehicles (here, VW) at a time when the actual manufacturer did not have a place of business in Australia: [176]-[182]. (9) Assuming a breach of the consumer guarantee had been established, the acts of VW AG in choosing Takata as a third party supplier of the airbags, installing the airbags as manufactured by Takata and releasing the vehicles in that state for supply to consumers were not what made the VW Vehicles of unacceptable quality (assuming breach of the consumer guarantee had been established). That argument confused those steps taken by VW AG, which are a necessary precondition of liability for any failure to comply with the consumer guarantee of acceptable quality, with the question of whether the vehicle was non-compliant with the consumer guarantee only because of an act, default or omission of any person other than the manufacturer: [188]-[195]. As to damages under s 272(1) (10) Since it was common ground that the time for the assessment of any reduction in value of the goods under s 272(1)(a) is the time of supply, it is not necessary to consider whether a departure from the time of supply as the time of the assessment of damages may be required in some cases: [215]-[218]. Vautin v By Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426; (2018) 362 ALR 702; Capic v Ford Motor Vehicle Company of Australia Pty Ltd [2021] FCA 715; (2021) 154 ACSR 235; Williams v Toyota Motor Corporation Australia Ltd (Initial Trial) [2022] FCA 344; Toyota Motor Corporation Australia Ltd v Williams [2023] FCAFC 50; (2023) 408 ALR 582, referred to. (11) Given the resemblance between the two components of damages referred to in s 272(1)(a) and (b) and compensatory damages available at common law for breach of contract, it is appropriate to draw upon general law notions of compensation, by way of analogy, when assessing statutory damages under s 272(1): [227], [230]-[232], [240]. Capic v Ford Motor Vehicle Company of Australia Pty Ltd [2021] FCA 715; (2021) 154 ACSR 235; Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326; [2020] HCA 17, considered. (12) By analogy with common law principles, subsequent events which illuminate, indicate or reflect the true value of the good, at the time of supply, may be taken into account under s 272(1)(a) when assessing any reduction in value, at the time of supply. However, subsequent events as a consequence of independent, extrinsic, supervening or accidental factors must not be taken into account. Whether a subsequent event truly illuminates or indicates or reflects the measure of loss earlier suffered depends on all the circumstances: [225]-[234]. Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281 at 291; [1995] HCA 4; Henville v Walker (2001) 206 CLR 459; [2001] HCA 52; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; [2004] HCA 54; Capic v Ford Motor Vehicle Company of Australia Pty Ltd [2021] FCA 715; (2021) 154 ACSR 235; Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326; [2020] HCA 17, considered. (13) To disregard subsequent events which illuminate, indicate or reflect the true value of the good, at the time of supply, would be inconsistent with the "universal rule" that a plaintiff cannot recover more than he or she has lost. There is no reason to consider that s 272, like similar remedial provisions within Pt 5-4 of Ch 5 of the ACL, was intended to be inconsistent with that "strong principle": [237]-[239]. Baxter v Obacelo Pty Ltd (2001) 205 CLR 635; [2001] HCA 66; Scenic Tours Pty Ltd v Moore [2023] NSWCA 74, considered. (14) A motor vehicle is a mechanically complex product that requires maintenance in order to remain safe for use, and frequently has parts repaired or replaced during its lifetime. Given that a vehicle should remain safe for use, it is inherent in the nature of a vehicle that upon recognising a latent defect, the defective part will be repaired or replaced as necessary. Assuming the airbag in the appellant's vehicle was a latent defect, that is what occurred in this case. On the assumption that there was a breach of the acceptable quality guarantee, that was an event that arose from the nature of the vehicle: [241]-[244]. (15) There was no error by the primary judge in taking into account the replacement of the airbag, at no cost, when assessing damage for any reduction in value of the appellant's vehicle, at the time of supply, as referred to in s 272(1)(a). In any event, the appellant had not established his claim for any reduction in value damages under s 272(1)(a): [245], [255], [260]-[261]. (16) The appellant's alternative claim for damages based on the "left in the hand" approach did not fall within the terms of s 272(1)(a). To the extent that this claim was made under s 272(1)(b), it was not pressed in oral submissions, and had this claim been pressed, (i) it should not be permitted as a new point on appeal as it could possibly have been met by calling evidence at the hearing, and (ii) such a claim is not within s 271(1)(b) because it assumes a no transaction case, contrary to the premise of s 272(1), and, by reason of s 272(3), a claim based the reduction in value can only be made under s 272(1)(a) and not s 272(1)(b): [267]-[275]. (17) The appellant's claims for excess financing costs (interest) and excess taxes (GST and stamp duty) under s 272(2)(b) were not run at trial, pleaded, or specified in the common questions. The appellant should not be permitted to advance these claims as new points on appeal: [281], [289]-[293]. (18) In any event, insofar as the claim for excess interest was based on the difference between the purchase price and the "true" value of the appellant's vehicle, at the time of supply, the claim could not succeed because the appellant had failed to establish that his vehicle's true value was less than what he paid for it, at the time of supply. Insofar as the claim was for interest on the cost of repair, that claim could not succeed because the appellant was never "out of my money", nor were any of the group members, as the airbags had been replaced by VW, at no cost: [282]-[283]. (19) The appellant's contention that the common questions can now be amended to include the new claims is unsound because it ignores the effect of s 179 of the Civil Procedure Act 2005 (NSW). Group members are bound by a statutory estoppel on the issues raised by common questions 17, 19 and 20A, which concerned loss and damage under s 272(1)(a) and (b): [294]-[298]. Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631; Timbercorp Finance Pty Ltd (in liquidation) v Collins (2016) 259 CLR 212; [2016] HCA 44; Dyczynski v Gibson [2020] FCAFC 120; (2020) 280 FCR 583; Ethicon Sàrl v Gill [2021] FCAFC 29; (2021) 288 FCR 338; BHP Group Ltd v Impiombato [2021] FCAFC 93; (2021) 286 FCR 625, referred to. Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127, considered. (20) Moreover, the appellant made no application at trial or following the primary judgment to amend the common questions, and there is no ground of appeal contending that the primary judge erred in not amending the common questions. Although s 75A(6) of the Supreme Court Act 1970 (NSW) provides that this Court on an appeal by way of rehearing has the same powers as the primary judge, and this includes the power of amendment, there is no occasion to consider amending the common questions following the trial and dismissal of the proceedings. The appellant did not make an application in this Court for leave to amend the common questions to include the new claims for GST and stamp duty: [303]-[306].

Judgment

1. GLEESON JA: This appeal concerns a representative proceeding brought by Prof Philip Dwyer as a representative plaintiff against Volkswagen Group Australia Pty Ltd (VW) claiming damages for himself and on behalf of group members in respect of the supply of Volkswagen motor vehicles which were alleged not to be of acceptable quality or, in some cases, merchantable quality, because the airbags fitted to the vehicles carried a risk of mis-deployment or rupture. Following delivery of his principal judgment on 18 June 2018 and a second judgment on 7 September 2021, the primary judge made final orders on 16 September 2021 determining the common questions in the proceedings adversely to the plaintiff and group members and dismissed the proceedings with costs. Prof Dwyer appeals against those orders and the answers to some of the common questions.

Nature of the case

1. VW imported into Australia various models of Volkswagen vehicles manufactured by its German parent company, Volkswagen Aktiengesellschaft (VW AG). In October 2013, Prof Dwyer (the appellant) purchased a Volkswagen Passat from VW for approximately $40,000. Some 83,000 group members in the representative proceeding purchased various models of new and second-hand Volkswagen vehicles in Australia between 2007 and 2018 (the VW Vehicles). The VW Vehicles were fitted with driver side airbags manufactured by Takata Corporation or its related entities (Takata). Those airbags contained a propellant known as phase stabilised ammonium nitrate (PSAN).
2. The appellant commenced a representative proceeding against VW under Pt 10 of the Civil Procedure Act 2005 (NSW). He sought damages for himself and on behalf of group members claiming that the VW Vehicles supplied from 1 January 2011, including his own, failed to comply with the consumer guarantee of acceptable quality in s 54 of the Australian Consumer Law (ACL) because the vehicles were not safe and free from defects, given the installation of the Takata airbag. He also claimed that the supply of the VW Vehicles to group members prior to 1 January 2011 was a breach of the statutory warranty of merchantable quality in s 74D the Trade Practices Act 1974 (Cth) (TPA). It was common ground that any distinction between the concepts of "merchantable" and "acceptable" quality was not material for the purpose of the proceedings.
3. The questions for determination at the trial before Stevenson J were all those arising on the appellant's claims and the questions common to the appellant's and group members' claims identified in consent orders made by Sackar J on 21 June 2019, as varied on 22 May 2020.
4. The appellant's case was that the use of PSAN as the propellant in the airbags created a risk of mis-deployment or rupture of the airbag, and that risk was present at the time he purchased his vehicle. He contended that: 1. the PSAN propellant had a propensity to degrade over time when exposed to moisture and temperature fluctuations; and 2. if the PSAN degraded sufficiently, the PSAN could burn so aggressively that the inflator housing could rupture in a life-threatening way.
5. The appellant accepted at trial that the risk of mis-deployment or rupture of the airbags in the VW Vehicles is unquantifiable in that it cannot be predicted when and in what circumstances the PSAN in the airbags might degrade to a functionally significant degree. On his case, this is what made the VW Vehicles of unacceptable quality.

The appeal

1. There are three parts to the appeal. To the extent that it relates to questions common to the claims of group members, the appeal is brought as a representative proceeding on behalf of group members: Civil Procedure Act, s 180(1)(a).
2. The first concerns a challenge to the findings that the appellant had failed to establish that the VW Vehicles were not of "acceptable" quality, or in some cases of "merchantable" quality. The case on appeal is limited to the alleged risk of rupture of the airbags in the VW Vehicles; the appellant did not press his case below concerning the alleged risk of mis-deployment of the airbags.
3. The second part concerns whether his Honour erred in his contingent finding that the exception in s 271(2)(a) of the ACL would apply to defeat the appellant's claim for damages, assuming that the appellant's vehicle was not of acceptable quality.
4. The third part concerns whether his Honour erred in his contingent finding that the appellant had not suffered any damage and the adverse answers given to the claim for damages on behalf of group members.
5. For the reasons that follow, the appeal should be dismissed.

Structure of these reasons

1. The structure of these reasons is:

• first, to briefly state the factual background to the proceedings;
• second, to identify the applicable legislative provisions;
• third, to explain the standard of appellate review;
• fourth, to provide an overview of the technical and expert evidence, and summarise his Honour's key findings with respect to that evidence;
• fifth, to deal with the issues on liability relating to the asserted risk of rupture of the airbags, including the challenge to some of his Honour's findings concerning the technical and expert evidence as to the propensity or risk of PSAN to degrade in the airbags installed in the VW Vehicles so as to cause them to rupture;
• sixth, to deal with the defence relied upon by VW under s 272(2)(a) of the ACL that any failure to comply with the statutory guarantee in s 54 (if established) occurred "only because of" the act, default, or omission of another person namely, Takata; and
• seventh, to deal with the issue of damages, including the new damages claims which the appellant sought to raise on appeal.

Factual background

1. The primary facts are not in dispute. The following outline is largely taken from his Honour's unchallenged summary in the principal judgment, supplemented by some additional matters which provide context for the appellant's claim.

Takata airbags

1. The frontal driver side Takata airbags installed in Volkswagen vehicles contained four major subsystems: (a) an inflator; (b) a fabric bag that inflates; (c) a cover that matches the car's interior and tears open in a controlled way when the bag is inflating; and (d) a sensor system that detects rapid deceleration that is consistent with a crash scenario. A diagrammatic representation of these components, given by Mr Robert Renz, the appellant's expert, in Figure 2a of his report appears below.
2. The airbag was designed to inflate upon a relevant impact by igniting the booster and then the main PSAN propellant to produce a controlled explosion that generated a hot gas (a "gas generant") to fill the airbag with pressure within approximately 50 milliseconds of impact.
3. A schematic cross-sectional diagram of such an inflator contained in Figure 9 of an affidavit provided by Mr Andreas Schade, a technical expert employed by VW AG, appears below.
4. The location and operation of the Takata airbags fitted in the VW Vehicles was described by his Honour at [29]-[33]: The Takata airbags in question were fitted to the front driver side of the vehicles, within the steering wheel boss. Airbags are comprised of several different components. Those components include the inflator which, in this case, was a particular type of frontal single stage driver airbag inflator known as a "Smokeless Driver Inflator" ("SDI"). The purpose of an airbag inflator is to cause gas to be generated rapidly when there is a collision. In the event of a collision, an ignitor within the airbag produces hot gasses. These gasses ignite propellant tablets that cause the propellant, here the PSAN, to ignite and produce gas for inflating the airbag cushion. These steps need to occur within milliseconds of the initiation of the process by the airbag control unit.
5. The appellant's vehicle was manufactured by VW AG and fitted with a Takata driver side airbag which contained PSAN as the propellant: at [34]. Takata manufactured the airbag installed in the appellant's vehicle pursuant to a contract with VW AG: [35]-[36]. The specifications given to Takata by VW AG did not specify the propellant to be used in the airbags: at [38].

Recall of other vehicles in the United States

1. On 3 November 2015, the United States Department of Transportation National Highway Traffic Safety Administration published a Coordinated Remedy Order which imposed recall and remedy obligations on certain vehicle manufacturers (not Volkswagen) in respect of Takata airbags installed in those vehicles. That report noted: As of October 30, 2015, there have been 99 confirmed incidents in the United States where a ruptured Takata airbag inflator allegedly caused death or injury.
2. Notwithstanding the occurrence of such incidents, the appellant accepts that there has been no reported instance of injury from a rupture of a driver side Takata airbag installed in a Volkswagen vehicle.

VW AG empirical analysis program

1. In February 2016, VW AG commenced an empirical analysis program for the purpose of investigating whether the PSAN gas used in the airbag inflators in Volkswagen vehicles constituted a safety risk. This involved the collection and testing of some 20,000 airbag inflators from the field from vehicles manufactured from 2005 onwards and from various climatic zones around the world: at [67]-[68]. The details of this testing program and analysis are summarised at [56]f below.
2. VW AG's product safety committee determined that there was no systemic safety risk associated with Takata smokeless driver inflator (SDI) airbag inflators installed in Volkswagen vehicles that would warrant their recall. The Court was also informed that no European regulator has required a recall of Volkswagens fitted with Takata airbags: at [75]. Nevertheless, VW AG and its related companies conducted recalls of vehicles fitted with Takata SDI airbag inflators in those countries where recalls were required by relevant government authorities, including in Australia.

Recall of vehicles in Australia

1. In February 2018, the Assistant Minister to the Commonwealth Treasurer issued a recall notice styled Consumer Goods (Motor Vehicles With Affected Takata Airbag Inflators and Specified Spare Parts) Recall Notice 2018 (Cth), which came into effect in March 2018: at [54]. The recall notice applied to a wide class of motor vehicles, including the VW Vehicles, and required the recall of "Affected Takata Airbag Inflators" including driver side airbags that used PSAN as a propellant to activate the airbag upon a collision: at [55]. The notice stated that it had been issued after a detailed investigation by the Australian Competition and Consumer Commission (ACCC) into possible risks involved in using vehicles containing Takata airbags manufactured by Takata Corporation of Japan: at [56].
2. Following the recall notice, VW initiated a recall program. The VW Vehicles were recalled and the airbag inflators in them progressively replaced by the time of trial, subject to minor exceptions where VW had applied to the ACCC for an allowable exemption (for example, where the vehicle has been stolen, scrapped or where the owner has not been able to be contacted): at [64], [66]. As of 31 December 2020, the oldest VW Vehicle containing a Takata airbag was approximately 14 years old. All other relevant VW Vehicles were no more than 12 years old.

The appellant's case

1. The appellant's case is that his vehicle was not as safe and free from defects as the hypothetical reasonable consumer would regard as acceptable because a safety device in the vehicle for the stated purpose of minimising the risk of injury upon collision - the airbag - itself carried a risk of causing injury or death which was not present in airbags that used other propellants.
2. The appellant accepts that his vehicle is, by reason of replacement of the airbag, as valuable today as it would have been had it been supplied originally with non-defective airbags. The appellant's complaint is that his vehicle, at the time of supply, was worth less than the price he paid for it by reason of the defective airbag installed in it. It is said that notwithstanding the replacement of the airbag some six years after purchase, the appellant has still suffered loss and damage.

The statutory provisions

1. The appellant's claim for damages for himself and on behalf of the group members who purchased their VW Vehicles from 1 January 2011, was based on a statutory cause of action conferred by s 271 of the ACL. The damages claim advanced on behalf of group members who purchased their VW Vehicles prior to 1 January 2011, was based on a statutory cause of action conferred by s 74D(1) of the TPA. The applicable statutory provisions are set out below.

Australian Consumer Law

1. The Australian Consumer Law commenced on 1 January 2011 and is set out in Sch 2 of the Competition and Consumer Act 2010 (Cth). Section 54 provides a consumer guarantee of acceptable quality: 54 Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality.
2. "Supply", in relation to goods, as defined in s 2(1), includes "supply (including re-supply) by way of sale, exchange, lease, hire or hire-purchase". "Goods" as defined in s 2(1), includes "(a) ships, aircraft and other vehicles; … (f) second-hand goods; and (g) any component part of, or accessory, to goods".
3. There is no dispute that these provisions were satisfied in the present case, relevantly: 1. the appellant and at least some group members were "consumers" within the meaning of ACL, s 3(a) and (b); 2. the VW Vehicles are "goods" as the inclusive definition of that term in s 2(1) includes "vehicles", which are expressly referred to in sub-par (a) of the definition ("ships, aircraft and other vehicles"); and 3. VW admitted on the pleadings that the VW Vehicles were supplied in trade or commerce, other than by way of sale by auction.
4. Section 54(2) and (3) define the concept of "acceptable quality" for the purpose of the guarantee: (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. …
5. The first part of this definition of "acceptable quality" contains a set of quality elements in s 54(2). The present case concerns whether the goods are free from defects and safe: s 54(2)(c) and (d). The second part of the definition contains a reasonable consumer test which applies an objective evaluation of the quality elements, in accordance with the expectations of a hypothetical reasonable consumer who is fully acquainted with the state and condition of the goods, including any hidden defects: s 54(2), taking into account the factors specified in the third part of the definition referred to in s 54(3), which include any other relevant circumstances relating to the supply of the goods: s 54(3)(e).

Trade Practices Act

1. Prior to 1 January 2011, Part V of the TPA ("Consumer Protection") included Div 2 ("Conditions and Warranties in Consumer Transactions") and Div 2A ("Actions against Manufacturers and Importers"). Division 2A contained s 74D which conferred on consumers a direct right of action against a corporate manufacturer of goods which were not of merchantable quality: 74D Actions in respect of goods of unmerchantable quality (1) Where: (a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re‑supply; (b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer; (c) the goods are not of merchantable quality; and (d) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not of merchantable quality; the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction. (2) Subsection (1) does not apply: (a) if the goods are not of merchantable quality by reason of: (i) an act or default of any person (not being the corporation or a servant or agent of the corporation) (ii) a cause independent of human control; occurring after the goods have left the control of the corporation; (b) as regards defects specifically drawn to the consumer's attention before the making of the contract for the supply of the goods to the consumer; or (c) if the consumer examines the goods before that contract is made, as regards defects that the examination ought to reveal. (3) Goods of any kind are of merchantable quality within the meaning of this section if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to: (a) any description applied to the goods by the corporation; (b) the price received by the corporation for the goods (if relevant); and (c) all the other relevant circumstances.
2. As will be apparent from s 74D(2), the entitlement to claim damages under s 74D(1) is qualified by s 74D(2) which relevantly provides that s 74D(1) does not apply if the warranty of merchantable guarantee is not complied with "by reason of" one of two specified circumstances, occurring after the goods have left the control of the corporate manufacturer.

The common questions

1. The questions for determination at the trial were all those arising on the appellant's claims and the questions common to the appellant's and group members' claims as identified in Annexure A to consent orders made by Sackar J on 21 June 2019 (following a judgment delivered by Sackar J on 11 December 2018: Takata Airbags Class Action - Common Questions [2018] NSWSC 1868), together with an additional common question, Q20A, identified in the consent orders made by Sackar J on 22 May 2020.
2. It is not necessary to reproduce in full the common questions. To the extent that the appellant challenges the answers to some of the questions, those questions and answers given by his Honour are set out in the Schedule to these reasons.

Standard of appellate review

1. The appeal to this Court is an appeal by way of rehearing under s 75A of the Supreme Court Act 1970 (NSW). Before this Court can interfere with the findings made by the primary judge, error must be established: Scenic Tours Pty Ltd v Moore [2018] NSWCA 238; (2018) 361 ALR 456 (Scenic Tours) at [255], citing Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [30] (Gageler J).
2. Neither party directed submissions to the standard of appellate review which applies to the challenge to the finding that there was no breach of the guarantee of acceptable quality in ACL, s 54. Although the determination of this question involved the exercise of an (objective) evaluative judgment, the test for establishing error with respect to whether the appellant's vehicle was of acceptable quality is the general "correctness" standard of review in Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9, rather than the "deferential standard" which tolerates a range of outcomes.
3. That is because the question of whether the appellant's vehicle was of acceptable quality must be answered in accordance with the expectations of a hypothetical reasonable consumer applying the express statutory criterion in ACL, s 54(2) and (3), and calls for a decision where there is one correct answer, or adopting the language of Gageler J in SZVFW at [49], a "unique outcome"; see also Scenic Tours at [254]; Sun v Chapman [2022] NSWCA 132 at [8]-[13], [114]-[117] and [189].
4. Further, whilst due respect is to be paid to the conclusions reached by the primary judge, this Court must make its own judgment as to the proper inferences to be drawn from the established facts and give effect to its own conclusions if they differ from those of the primary judge: Scenic Tours at [254], citing SZVFW at [18] (Kiefel CJ), [27], [48]-[50] (Gageler J). Although his Honour heard evidence from the appellant, neither party submitted that the appellant's evidence informed his Honour' evaluative judgment in a manner that justifies this Court in giving his Honour's assessment a significant degree of respect for that reason: Scenic Tours at [255], citing SZVFW at [33] (Gageler J).

Liability: whether breach of guarantee of acceptable quality

1. At trial, the appellant's case on liability was that the VW Vehicles necessarily carried a risk of airbag mis-deployment or rupture through PSAN degradation in the presence of moisture and temperature changes. The appellant characterised the risk as "unquantified and unquantifiable". His case was that: … it is irrelevant whether the airbags installed in the plaintiff's car, or the car of any particular group member, in fact showed degradation to have occurred to any level or at all. It is sufficient that the propellant used in the Takata airbags had a risk of degradation not present in alternatives.
2. The appellant sought to prove his case on liability by reference to the empirical analysis program conducted by VW AG and expert evidence from Mr Renz. It is of assistance first to refer to this evidence and his Honour's findings before summarising the findings on acceptable quality.

The technical and expert evidence on liability issues

1. Mr Schade was a technical expert employed by the Product Analysis Department within the Technical Development Department of VW AG. He had been involved in the design and implementation of the empirical analysis program and the analysis of its results since its inception in February 2016.
2. As indicated, some 20,000 airbag inflators were collected from the field from Volkswagen vehicles manufactured from 2005 onwards and from various climatic zones around the world. As of 2020, the airbags retrieved from the field represented vehicles of up to 15 years in age. The airbag inflators were subjected to several tests: (i) physical examination of the inflated module; (ii) investigation of the chemical and physical properties of the propellant; (iii) computerisation tomography scans (CT scans); (iv) deployment tests and tank tests; and (v) closed vessel analysis of pressure/time curves. Mr Schade gave evidence that there were approximately 7,000 deployment tests, 5,000 tank tests (in fact 5,423) and 7,000 closed vessel tests (in fact 7,492).
3. Competing expert evidence was given as to the risk of mis-deployment or rupture of the airbags in the VW Vehicles. Mr Renz was called for the appellant; he was a chemist with mechanical engineering technology expertise and much experience working on automatic airbag ignitors, inflators and micro gas generators. Prof Thomas Klapötke was called by VW; he was a Professor of Chemistry at Ludwig Maximilian University in Munich, Germany.
4. Addressing the evidence of the real-world experience of airbags in Volkswagen vehicles, his Honour made the following general findings:

• inflators using PSAN had been installed in 20 million Volkswagen vehicles worldwide: at [47];
• some 440,000 of those vehicles had been involved in a collision that had resulted in the deployment of an airbag: at [48];
• although many of those vehicles were relatively new, 50,000 of them were nine years or older, and therefore of an age where any problem with the airbags would likely materialise: at [51];
• there was no evidence of any mis-deployment of a Takata airbag in any Volkswagen. This fact, while not determinative, raised a serious question as to whether there is any link between PSAN's propensity to degrade as a matter of generality, and the likelihood of any functionally significant propensity of PSAN degradation in the airbags fitted to Volkswagen vehicles, including the appellant's vehicle: at [52];

Physical examinations and CT scans

1. Mr Schade gave evidence that the physical examinations of the retrieved airbags involved visual examination to identify signs of changes in inflator behaviour and internal examination by deconstructing the inflator into constituent parts. The CT scans involved a non-invasive examination of the inflator and used two-dimensional, cross-sectional images, which can be combined to produce a three-dimensional image of the inflator.
2. His Honour found that the physical examinations and the CT scans showed differences between airbag inflators fitted to Volkswagen vehicles and those fitted to other vehicles: at [80]. As his Honour said (at [81]): Such differences included: (a) the number of outflow openings; (b) the size of the propellant tablets; (c) the use of a ceramic, rather than a wired, propellant cushion; (d) the use of a thicker base plate; (e) a design to deploy with larger output pressure; (f) absence of what Mr Schade described as "anomalies" in the base of the generators that in other brands indicated excessive moisture over time; and (g) use of 60 gm filter compared to a 70 gm filter in SDI inflators installed in other vehicles.
3. After noting at [82] that Mr Schade gave unchallenged evidence that as a result of this testing, the airbag inflators fitted to the Volkswagen Vehicles did not show any functionally relevant anomalies and no material manufacturing faults that would lead to rupture, his Honour found at [83] that this provided support for the submission made on behalf of VW that airbag inflators for Volkswagen vehicles are different from the inflators in other vehicles in ways that meaningfully affect their performance.

Closed vessel testing

1. Mr Schade explained that the "closed vessel" testing involved the removal of the PSAN propellant from retrieved inflators, a sample of which was then placed in a reinforced closed vessel and ignited. The burn rate of the propellant and the pressure generated by the burning of the propellant (which produces the gas which inflates the airbag cushion) was calculated. The closed vessel allowed the measurement of much higher pressures generated by the propellant, once ignited, than pressures which are reached within an inflator during a typical deployment of an airbag. The burn rate of the propellant is derived from the pressure over time curves that are produced in the closed vessel test. The derived burn rate is then compared to the normal burn rate and a predetermined "critical" integrated burn rate which is the burn rate that produces the maximum pressure that the inflator housing is designed to withstand. If the derived burn rate indicated exceeds the desired inflator housing pressure, then inflator rupture can occur. A burn rate that produces the pressure at levels at which the housing can rupture is known as the "critical burn rate".
2. As of 1 April 2021, there were 7,493 closed vessel tests. The results of the closed vessel testing were shown in Figure 21 to Mr Schade's affidavit, which was reproduced as an attachment to the principal judgment. Mr Schade gave evidence that the closed vessel analysis confirmed that the inflators from Volkswagen vehicles did not reveal any critical anomalies in the burn rate of the inflator. He explained that: (i) the normal or expected integrated burn rate for PSAN was between 1,700 to 1,800 MPamm/s, (ii) the pressure/time curves plotted in pink and purple in Figure 21 indicated that certain older SDI field inflators retrieved from Volkswagen vehicles from hot and humid climates (Zone 1 and 2) exhibited slightly elevated burn rates, (iii) the highest recorded integrated burn rate for the SDI inflators returned from Volkswagen vehicles was measured by the closed vessel test to be 2051 MPamms, and (iv) the pressure/time data results demonstrate that the SDI inflators installed in the Volkswagen vehicles exhibited integrated burn rates in the non-critical range.
3. His Honour observed that the closed vessel testing involved subjecting the PSAN in the airbag inflators retrieved from the field to pressure in a reinforced closed vessel in order to determine whether its integrated burn rate or IBR measured in megapascals per millimetre per second, exceeded a "normal" or "expected" rate of between 1,700 and 1,850 MPamm/s: at [84], [91], [97]. His Honour found that the evidence established that the airbags are designed with an industry standard 150 per cent safety margin above the normal or expected burn rate, which would imply a rupture pressure of 2,775 MPamm/s: at [94]. His Honour accepted that this was well below the critical rupture rate, whether that figure was approximately 2,775 MPamm/s calculated by Takata: at [102], [103], [140].

Tank testing

1. The "tank" tests involved the inflator as a unit being placed in a sealed tank and sensors measured the internal and external pressure during the firing of gas generators: at [104]. Mr Schade gave evidence that the burn rate of the propellant is inferred from the tank pressure observed during the tank test. High tank pressure indicates excessively rapid burn-off behaviour.
2. Prof Klapötke gave evidence that tank pressure and inflator chamber pressure provide additional information on the propellant burning behaviour inside the inflator because it measures the pressure which occurs inside the inflator housing and in the tank upon deployment of the inflator being tested. He said that, as a result, the performance of the propellant as it burns within the housing is measured, as opposed to the burn rate of the propellant alone, as is measured in closed vessel testing.
3. As of 1 April 2021, 5,423 inflators were subjected to the tank tests. There was a single incident of rupture of an airbag inflator in a tank test. Mr Renz accepted in cross-examination that the single incident was an anomaly as compared to the rest of the data. Mr Schade described this incident as an "outlier". He said that "it was not something that our data showed at the time in 2019, or its shows today", "it is so far out that it is an outlier by the data", that the assumed burn rate for this test was well above 3,000 (MPa*mm/s) and, "we see that all the other burn rates that we have are far away from that". He proffered the view that "this one outlier can be due to manufacturing issues at the time of its production".
4. After observing that little attention was paid to the tank tests in final submissions, save that it was emphasised on behalf of the appellant that during one of these tests, one inflator ruptured (at [105]), his Honour made the following findings:

• only one rupture occurred in the entire empirical analysis program which involved some 20,000 airbags: at [106]; and
• Mr Renz accepted that the single incident in the tank tests as an anomaly as compared with the rest of the data: at [107]. The appellant challenges what it says is his Honour's implicit finding as to the anomalous nature of that one rupture in the tank tests.

The expert evidence concerning the use of PSAN as an inflator in the airbags

1. In their joint report, Mr Renz and Prof Klapötke agreed that the empirical testing conducted by VW AG was done using sound scientific and acceptable practices. They also agreed that the empirical testing shows an increase in the integrated burn rate or IBR, as the inflators age, with Prof Klapötke qualifying his agreement as follows: I agree that 10-15 year old inflators (VW, SDI) show an increase burn rate, which is, however, critical still well below the level at which may give any cause for concern, as stated in report par 111. If the normal IBR for an SDI inflator ranges from 1700 to 1850 MPa mm/s and some older inflators show IBR of 1850-2000 MPs mm/s, this is still well below the 3000 MPa mm/s threshold that Takata has given as being critical.
2. After noting at [120] that PSAN absorbs moisture from the air, his Honour made the following findings with respect to PSAN's propensity to degrade:

• Mr Renz and Prof Klapötke agreed that generally speaking: (a) the root cause of the degradation of PSAN in the Takata airbag inflators was thermal fluctuation with moisture being present; (b) the rate of such degradation increases as the moisture level increases; and (c) the degradation of the PSAN will lead to an increase in surface area of the PSAN which leads to faster burning of the propellant tablets. This then causes increased pressure inside the inflator, which in turn causes the airbag inflation to occur faster and at a higher peak pressure than would otherwise be the case: at [121];
• the experts diverged as to whether such degradation was progressive, irreversible and inevitable, being the opinion of Mr Renz, or whether the position was more nuanced, being the opinion of Prof Klapötke, which his Honour accepted, finding that PSAN can degrade if exposed to moisture and temperature fluctuations: at [124];
• the rate at which the PSAN within an airbag inflator will degrade varies significantly according to a variety of factors which differ from manufacturer to manufacturer, and it is not possible to make generalisations between airbags fitted to different manufacturers' vehicles or even between different models of vehicles made by the same manufacturer: at [126];
• Mr Renz and Prof Klapötke agreed that the differences between inflator design and vehicles, as well as other variables, impacted upon the level of moisture ingress into an inflator, being the critical factor associated with degradation of PSAN: at [129];

The primary judge's reasons on acceptable quality

1. There is no dispute as to his Honour's concise statement of the concept of "acceptable quality" in s 54. It is convenient to reproduce the reasons at [21]-[24] in full (citations omitted): The question as to whether goods are of acceptable quality is an objective one, to be determined on the basis of relevant information known at the time of the trial. The test posed by s 54 is not absolute, nor is it a standard of perfection. Rather, it is a test of what a reasonable consumer would regard as acceptable having regard to, relevantly here, any relevant circumstances relating to supply of the goods. The relevant expectation is that of a reasonable consumer in the position of the actual consumer. The question is to be answered on the basis of what was objectively reasonable to expect at the time of supply. The answer will always depend on the circumstances.
2. His Honour found that the results of the empirical analysis program could not lead to a conclusion that the tested airbags were unsafe: at [110]. On the contrary, he found that the results suggested that the airbag inflators installed in the VW vehicles were safe and that increased integrated burn rates revealed by the tests were unlikely to translate to aggressive or unsafe deployment of the airbags: at [111].
3. It is not necessary to summarise all of his Honour's detailed findings at [137]-[146] on the propensity or risk of explosion case, as much of these reasons have already been referred to at [66] above. It is sufficient to refer to the following further findings:

• the appellant had failed to show any connection between possible degradation in the PSAN (in the presence of moisture and temperature fluctuations) and airbag performance in VW Vehicles: at [141]-[142];
• the appellant had not established that, on the balance of probabilities, "the alleged propensity or risk has been present in any Volkswagen vehicle" or that "the alleged propensity or risk would have materialised in any Volkswagen [vehicle] at any identifiable point in time": at [143];
• rather, the most the appellant can say relying on the evidence of Mr Renz, is that there was no more than a theoretical possibility that at some [un]identified point in the future, if a vehicle was left in the right environment for long enough, the alleged propensity or risk might develop at some future time: at [144]. (There is an obvious typographical error in the word "identified" at [144], given Mr Renz's evidence referred to at [100] below.);

Finding on acceptable quality

1. The appellant's case on acceptable quality was that the state and condition of the goods must be assessed in light of six facts, which his Honour set out at [155]: a. The PSAN propellent used in the affected airbags has a propensity to degrade over time given the presence of moisture and changes in temperature; b. Volkswagen's own testing shows that propensity is manifesting in the field. That indicates, that by whatever means, sufficient moisture is entering the system in the real word to cause measurable degradation of the PSAN; c. As PSAN degrades, the risk of the airbag mis-deploying (ie deploying too quickly) or rupturing increases. This process is inevitable and progressive; d. If the airbag deploys too quickly, the risk is that it will not protect the occupant in an accident either at all or to the extent designed, leading to an increased risk of injury. If the airbag ruptures, the risk is that metal fragments are sprayed inside the cabin and cause injury or death; e. That process of degradation, culminating in the risk of misdeployment and rupture, is inevitable in the sense that given temperature fluctuations and moisture, those outcomes will happen at some stage; f. No time frame can be given for when the risk of misdeployment and/or rupture arises for any given car and the risk for any given car at any given point in time cannot be quantified, other than to say that the risk increases over time. (Emphasis added in original.)
2. His Honour concluded at [159] that he was not persuaded that the appellant's vehicle was not of acceptable quality, nor persuaded that VW had failed to comply with the guarantee of acceptable quality in s 54(1). He summarised his reasons at [156]-[158]: But, for the reasons I have set out, a reasonable consumer in this hypothetical circumstance would also be acquainted with the fact that there was no reason to think that, probably, "those outcomes will happen at some stage" [see [155e] set out above] in any Volkswagen and thus in the plaintiff's vehicle. This reflects the link or integer that is missing from the plaintiff's case, namely between the propensity of PSAN to degrade and any relevant, functionally significant propensity of PSAN to degrade in Volkswagens. Further, the reasonable consumer in the hypothetical circumstance posed by s 54 would also be acquainted with the fact that motor vehicles are complicated pieces of machinery that may develop problems, even problems going to the safety of the vehicle, that may require rectification by the manufacturer during the vehicle's lifetime.

Grounds 1-10

1. Grounds 1-10 contend: 1. The primary judge erred in failing to hold that the appellant's vehicle was not of acceptable quality at the time of supply to the appellant within the meaning of s 54 of the Australian Consumer Law (ACL). 2. The primary judge ought to have found that the appellant's vehicle was not of acceptable quality under s 54 of the ACL by reason of the matters recorded at J[155] together with the following facts, which were established on the evidence and ought to have been found: (a) A substantial portion (circa 30%) of Volkswagen vehicles still remain on the road after 15 years; (b) The oldest of the inflators the subject of the closed vessel and tank tests carried out by the respondent as part of its Empircal [sic] Testing Program was 12 years; (c) The results of the burn closed vessel tests showed that the incidence of integrated burn rates for phase stabilised ammonium nitrate (PSAN) propellent retrieved from used vehicles exceeding the baseline integrated burn rates for new PSAN increased with the age of the vehicle; and (d) Alternative propellants existed and were in use at all material times which did not have a propensity to degrade over time in the presence of moisture and temperature changes. 3. To the extent that the primary judge did not make findings in terms of the matters at J[155], his Honour ought to have made such findings and erred in not doing so. 4. The primary judge erred in holding that: (a) in addition to the matters at J[155], the reasonable consumer in the hypothetical circumstance posed by s 54 of the ACL would also be acquainted with the fact that there was no reason to think that, probably, misdeployment or explosion will happen at some stage in any Volkswagen or in the appellant's vehicle; (b) if such knowledge was to be imputed to the reasonable consumer, it produced the result that the affected vehicles were of acceptable quality. 5. The primary judge erred in finding that the results of Volkswagen's Empirical Analysis Program: (a) suggest that the airbags are safe; (b) suggest that there is no reason to predict that the airbag inflators actually installed in Volkswagen vehicles will become critical or dangerous; (c) could not lead to a conclusion that the airbags were unsafe. 6. The primary judge erred in failing to hold that the defect lay in the vulnerability of the PSAN propellent to ordinary real world conditions under which moisture could be present in, or enter, the inflation unit, including humidity at the manufacturing plant, error in affixing seals, baseline permeability or leakage of seals, and ordinary wear and tear. 7. The primary judge erred in disregarding the single instance of rupture in the tank tests carried out by Volkswagen. His Honour ought to have found that it demonstrated that the vulnerability at ground [6] above could lead to rupture of the airbag inflator and the risk of explosion or misdeployment. 8. The primary judge erred in holding that it was necessary for the appellant to establish that the risk of misdeployment or rupture arising from the accepted propensity of PSAN to degrade over time in the presence of temperature cycling and moisture would have materialised in any Volkswagen vehicle at any identifiable point in time. 9. The primary judge erred in taking into account, or considering it relevant to the analysis under s 54 of the ACL, that motor vehicles are complicated pieces of machinery that may develop problems, even problems going to the safety of the vehicle, that may require rectification by the manufacturer. 10. The primary judge erred in answering in the negative each of common questions 3, 4, 10 and 11. The primary judge ought to have answered each of these questions, yes.

The appellant's argument on appeal

1. The appellant's submissions addressed grounds 1-10 compendiously under three headings: Volkswagen's testing, Expert evidence, and Unacceptable quality. Not all the grounds were the subject of submissions. It is said that sub-pars (e) and (f) of [155] of the principal judgment (set out at [78] above), encapsulates the way the appellant puts his case on appeal.
2. It is convenient to address the grounds as advanced in the appellant's submissions in the following order: (1) the closed vessel testing, (2) the single tank test result, (3) the empirical testing program, (4) the nature of motor vehicles, and (5) whether the VW Vehicles were of unacceptable quality.

The closed vessel testing

1. It is common ground that the closed vessel test involves observing the PSAN burning in conditions that do not exist when an airbag is ignited in the field. Airbag inflators are designed so that once the propellant is ignited and starts generating gas, the pressure within the inflator will start to stabilise once it reaches a certain point, approximately 45-50 MPa, as gas is released from the vent openings. By contrast, in a closed vessel test the propellant continues to burn to conditions where the pressure significantly exceeds 50 MPa. The closed vessel tests subjected the PSAN in the inflators to pressures of up to 90 MPa, which his Honour found was much higher than would normally be experienced in the field as airbags are designed so that when pressure reaches 40-50 MPa vent holes open and the airbag inflates: at [90].
2. About 8 per cent of the closed vessel test results exceeded the "normal" or "expected" range of the integrated burn rate. The appellant referred to the "normal" or "expected" range as the "accepted" range as determined by Takata and adopted by Volkswagen. VW submits that it does not follow that a test result above this level was unacceptable or to be deemed dangerous. It said that the relevant comparator was the critical rupture rate, which as his Honour observed at [100], was the rate at which there was the possibility of rupture of an airbag on inflation.
3. The appellant made two related complaints in relation to his Honour's findings in relation to the closed vessel testing. The first is that although his Honour recognised that the testing showed that the integrated burn rate of PSAN from retrieved airbag inflators exceeded Takata's "normal" or "expected" range of between 1,700 and 1,850 MPamm/s in 8 per cent of results, his Honour focused on the fact that all the results were substantially below the "critical rupture point" of 3,000 MPamm/s as determined by Takata: at [100]-[103]. The second is that his Honour focused on the margin between the highest observed closed vessel test result of 2,051 MPamm/s and either the 3,000 MPamm/s critical rate calculated by Takata, or the 2,775 MPa*mm/s rate implied by applying a 150 per cent safety margin to the expected range: at [138]-[139].
4. It is said that (i) the true significance of the closed vessel testing was that it showed that the PSAN in the airbag inflators fitted to the VW Vehicles had the propensity to degrade in the presence of moisture and temperature change, and (ii) the closed vessel testing showed that degradation of PSAN, which is a progressive and irreversible process, was occurring in Volkswagen vehicles.

Whether the closed vessel tests captured vehicles up to 12 years old or 15 years old

1. The first matter is Takata's investigations unrelated to Volkswagen vehicles which suggested that the minimum field exposure for problems with the airbags was seven years and the majority of field ruptures occurred after ten years or more. It is said that Volkswagen's closed vessel testing was only capturing the early part of the likely period of heightened risk because this testing involved vehicles that were between 5 and 12 years old. This submission was based on Figure 23 in Mr Schade's affidavit but ignored that the summaries and tables in Mr Schade's affidavit are effectively points in time.
2. As Mr Schade explained, the testing was ongoing and the database maintained by VW AG was constantly being updated (monthly as of January 2021) as more tests were conducted. The evidence at trial captured all relevant tests, including closed vessel tests, as of 1 April 2021; this is evident from the content of the electronic spreadsheets that were provided by VW's solicitors to the appellant's solicitors on 7 April 2021. Documents extracted from those electronic spreadsheets made good VW's submission that the closed vessel tests included vehicles manufactured in 2006.
3. Nor can the results obtained by Takata for other manufacturers' vehicles be translated to Volkswagen vehicles. The evidence was that there had been no such rupture in a Volkswagen vehicle anywhere in the world. As his Honour noted at [51], 50,000 of the 440,000 Volkswagen vehicles involved in accidents were nine years or older, and thus of an age where any problem with the airbags would likely materialise. Further, there is an unchallenged finding at [74] that the airbag inflators for Volkswagen vehicles were different from the inflators in other vehicles in ways that might meaningfully affect their performance.

One third of Volkswagen vehicles still on the road at 15 years

1. The second matter is that some one third of Volkswagen vehicles in Australia were still on the road at 15 years. It is said that the VW AG testing does not establish what happens after that. But this ignores several important matters.
2. First, the appellant had the onus of proof that the airbags in the VW Vehicles were unsafe. Mr Renz accepted that he could not say that degradation of PSAN would reach a point of functional significance at any identifiable point in time, let alone within the service life of any of the VW Vehicles. When asked about the 8 per cent of the closed vessel test results which exceeded the "expected" integrated burn rate and the highest test result of 2,051 MPa*mm/s which exceeded the "expected" integrated burn rate by about either 11 per cent, or 15 per cent on Mr Renz's implied limit, Mr Renz agreed that he did not have any data to indicate that that level of exceedance will affect the process of the airbag deployment in a way that impacts on its safe operation.
3. Second, the closed vessel testing did not disclose unacceptable results, even for vehicles up to 15 years old. The testing established that the degree of degradation of PSAN in the 8 per cent of observed cases did not interfere with their safe and effective operation. As his Honour found, none of the results came anywhere near Takata's critical rupture point: at [102]. The results of the testing were inconsistent with the appellant's case that PSAN degradation is inherently dangerous.
4. Third, nor did the closed vessel testing establish the appellant's contention that "at some stage in the life of the Volkswagen vehicles, the degradation would reach the point where rupture would occur" (emphasis added). The appellant did not demonstrate that there is degradation to such an extent as to have an adverse impact on functionality of the airbags within any meaningful timeframe. The submission about the situation getting worse at some time in the future was merely speculation.
5. There is no basis to infer from the results of the closed vessel testing that the critical rupture point would have been reached within the lifespan of the VW Vehicles. As his Honour found at [140], the appellant did not establish any connection between the possible degradation in the PSAN and the airbag performance in Volkswagens.

The single tank test result

1. Ground 7 contends that his Honour erred by disregarding the single instance of rupture of the inflator that occurred in the tank tests conducted on some 5,000 inflators as part of the empirical testing program. The airbag inflator had been retrieved from a 2007 Volkswagen Polo located in Queensland, being XTLU00902851.
2. Contrary to the appellant's submission, his Honour did not disregard this result. It was expressly considered at [105]-[107], together with the evidence given by Mr Renz, who conceded in the passage of his cross-examination extracted by his Honour at [107], that the single result was an anomaly.
3. It is said that the one ruptured inflator during tank testing demonstrates that there was in fact a breach of the guarantee of acceptable quality. Being a destructive test, by the time of trial all that was available was the data. This was reproduced in Mr Renz's report in reply at par [82] in a graph which is set out below: Figure 2: Plot of Ruptured Inflator XTLU00902851
4. In his report, Mr Renz attributed significance to the initial rise in pressure in the airbag inflator over the first two milliseconds, followed by a brief pause and then approximately 10 millisecond exponential rise in internal pressure, before bursting. Mr Renz said that this reflected the shape of the curve produced by mapping pressure over time in reports which concerned vehicles other than Volkswagen vehicles: the Orbital-ATK report of September 2016 and the first report of Exponent Inc of July 2016. Based on the similarities between the pattern of pressure seen in relation to the inflator retrieved from the 2007 Polo and his views as to the propensity of PSAN to degrade, Mr Renz considered that this rupture was due to the degradation of PSAN-based propellant in the inflator.
5. Several observations can be made in relation to Figure 2 in the Renz report. The unlabelled X axis is time in milliseconds. The Y axis is labelled "Pressure" but does not give a unit, however, by comparing the graph in Figure 2 with that in the Orbital-ATK report, to which Mr Renz referred, the Y axis seems to be in atmospheres. Normal atmospheric pressure is about 101,325 pascals (Pa) or 101.325 kilopascals (kPa). By comparing the graph in Figure 6 in the Orbital-ATK report with the graph in Figure 2 prepared by Mr Renz, it would seem that the peak on Mr Renz's graph at "900", would, if it is measured in atmospheres, correspond to 90,000 kPa, which is consistent with the peak "runaway pressure" on airbags with degraded PSAN shown in the Orbital-ATK report.

Reliance on the VW AG empirical testing program

1. Ground 5 contends that his Honour erred in finding that the results of the empirical testing program by VW AG (i) suggest that the airbags are safe, (ii) suggest that there is no reason to predict that the airbag inflators installed in the VW Vehicles would become critical or dangerous, and (iii) could not lead to a conclusion that the airbags were unsafe. This ground can be dealt with relatively briefly, given that the matters relied upon in support of this ground have been largely addressed above.
2. There is no challenge to his Honour's finding at [78] that there is nothing in the evidence to suggest that the empirical analysis program was not a genuine attempt by VW AG to ascertain whether there was any problem with Takata airbags installed in Volkswagens.
3. Nor is there any challenge to the methodology adopted by VW AG. As his Honour found at [70], Mr Renz, the appellant's expert, agreed that the program involved ample testing across different climate zones and of inflators of different ages.
4. It is said that the testing was confined to airbags and PSAN retrieved from vehicles that were no more than 12 years old, and that the testing could not predict, nor did it even purport to predict, whether, and if so when, the airbags will become critically dangerous. This submission has been addressed above. As his Honour found at [68], the empirical testing program involved airbags retrieved from Volkswagen vehicles from 2005 onwards. Contrary to the appellant's submission, the closed vessel tests captured vehicle up to 15 years old: see [96]-[97] above.
5. The balance of the submission ignored the matters referred to at [100]-[103] above. The fact that the closed vessel tests recorded that, for vehicles up to 15 years old, the burn rate observed in the closed vessel testing never approached the critical rupture rate, was consistent with the real-world experience. There had been no such rupture in a Volkswagen vehicle anywhere in the world and no meaningful degradation had been found in testing on inflators from Volkswagen vehicles up to 15 years old.
6. It is not in issue that Prof Klapötke did not attempt to model the risk of when the PSAN might become unsafe. So much is accepted by VW. But contrary to the appellant's contention that the predictive exercise of when PSAN might become critical or dangerous in "unknowable", his Honour accepted Prof Klapötke's evidence that whilst the timing and speed of the degradation process with respect to PSAN is "unknowable on the basis of theoretical model of prediction", it is possible to model when the PSAN might become unsafe: at [134]. As his Honour found at [145], the appellant has not sought to demonstrate that this risk could eventuate within any meaningful timeframe.

The nature of motor vehicles

1. Ground 9 contends that his Honour erred at [158] by considering it relevant to the analysis of acceptable quality under s 54 "that motor vehicles are complicated pieces of machinery that may develop problems, even going to the safety of the vehicle, that may require rectification by the manufacturer during the vehicle's lifetime".
2. In writing, the appellant acknowledged that his Honour's observation was "self-evidently correct". In oral argument, the appellant accepted that the observation does not seem to have impacted his Honour's decision on liability. To the extent that the appellant said that it is not apparent what his Honour's observation was intended to suggest, this is immaterial.
3. Given that no error has been identified, ground 9 should be rejected.

Unacceptable quality

1. The contention that the appellant's vehicle was not of acceptable quality was put in two ways. In chief, the appellant said that his vehicle was not safe and free from defects as the hypothetical reasonable consumer would regard as acceptable because his vehicle was manufactured with a particular physical feature, PSAN propellant in the airbag inflator, that is responsible for a risk of rupture (because PSAN is subject to progressive degradation over time in the presence of temperature changes and moisture), which in turn translates into "increased" risk of death or injury.
2. In reply, the appellant said that it is not necessary to establish that the good has a "relevant quality or characteristic" that makes the good of unacceptable quality, rather, the "relevant characteristic" can be "an unquantifiable risk of serious harm", at least where (i) the risk is not fanciful, (ii) arises from the application of physics and common sense in respect of a physical-chemical process which is shown to occur in real world conditions, and (iii) has not been excluded for the realistic life of the good or otherwise dealt with by appropriate disclosure and/or safeguard measures.
3. The different way in which the argument was put in reply reflected the evidentiary difficulties confronting the argument in chief. Each argument is addressed below.

Whether a physical feature of the VW Vehicles was responsible for a risk of rupture

1. On the first way the unacceptable quality argument is put, the appellant characterised the PSAN propellant as a latent defect in the airbag inflators.
2. The appellant does not challenge the finding at [156], insofar as it concerns the appellant's vehicle, that the hypothetical reasonable consumer would "also be acquainted with the fact that there was no reason to think that probably, 'those outcomes' [(ie rupture or mis-deployment)] will happen at some stage in any Volkswagen and thus in the [appellant's] vehicle". The appellant accepts that "it cannot be said that it is more probable than not that rupture … will happen in respect of [his] vehicle". But it is said that is not an answer because: In Medtel, Sackville J had inferred on the balance of probabilities that had Mr Courtney's pacemaker remained in situ it would not have ceased to function prematurely by reason of battery depletion: Medtel at [16]. At the risk of repetition, the point is that the physical feature of the vehicle (PSAN propellant) increased the risk of such outcomes.

Medtel

1. Medtel Pty Ltd v Courtney (2003) 130 FCR 182; [2003] FCAFC 151 involved pacemakers which were found not to be of merchantable quality because of the increased risk of premature failure. It is said by analogy with Medtel that Volkswagen's testing suggested that the conditions required for degradation of PSAN were occurring in about 8 per cent of Volkswagen vehicles tested, which is comparable to the 5.5 per cent of pacemakers in Medtel (which had been returned to the manufacturer).
2. The suggested analogy with Medtel is inapt.
3. In Medtel there was evidence of an inherent risk associated with the pacemakers supplied to consumers without the particular product purchased by Mr Courtney having actually failed. The pacemakers were shown to be of greater risk of failing by reason of accelerated battery depletion than other pacemakers manufactured by the same manufacturer. The accelerated battery depletion was the consequence partial short circuits because the yellow spool solder used in the manufacturing process tended to give rise to dendritic growth: Medtel at [10]-[13]. The dendritic growth had been observed in 5.5 per cent of the pacemakers which had been returned to the manufacturer: Medtel at [14] and [30].
4. Branson J (Jacobsen J agreeing) observed at [60] that the trial judge had found at that the use of yellow spool solder in the manufacturing process led to a "superadded risk of premature failure" by reason of partial short circuit. Her Honour rejected the notion that it would be absurd to consider a product unmerchantable where it carried "a slight but appreciable risk" of toxicity (at [72]).
5. Her Honour emphasised that the conclusion by the trial judge that Mr Courtney's pacemaker was unmerchantable in breach of the warranty in TPA, s 74D was not based upon its simply being a member of a class that had a statistically significant risk of failure but was, rather, based upon its exhibiting a particular physical characteristic (the yellow spool solder) that carried the risk of premature failure (at [77]). Her Honour continued at [77]: … As a consequence of its method of manufacture it was itself at added risk because of the white residue, when compared with pacemakers not so manufactured, of premature battery depletion caused by dendritic growth. That is, his Honour concluded that, because it had been manufactured with yellow spool solder, Mr Courtney's pacemaker was not as fit for the purpose for which pacemakers are commonly bought as it was reasonable to expect for the reason that its method of manufacture gave it the quality of carrying a risk of premature failure which was higher than it was objectively reasonable to expect in a pacemaker.

Protec

1. It is said, unlike Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338 at [528], that the appellant "has established on the balance of probabilities that there is a risk of rupture … in Volkswagen vehicles and that a physical feature of the vehicle (the use of PSAN as propellant) is responsible for that risk". The submission continued: It is not to the point that the appellant did not show that an integrated burn rate sufficient to rupture the airbag … having a particular physical consequence would be generated at identifiable point in time. The very fact that no identifiable point in time can be predicted for any given vehicle is part of what makes the vehicle of unacceptable quality. Protec does not assist the appellant.
2. Protec involved a claim for damages for misleading or deceptive conduct based on representations concerning the suitability of a product, Bekaplast lining, a high density polyethene (HDPE) used as a long-term containment liner for concrete solvent extraction tanks at a mine site. By contrast with the circumstances of Medtel, the Victorian Court of Appeal (Tate, Santamaria and Kyrou JJA) concluded in Protec at [528], that the evidence did not establish, on the balance of probabilities, that there was a risk of premature failure nor that there was any physical feature of HPDE that was responsible for that risk. In distinguishing Medtel, the Court in Protec said at [528]: Without having first established that it was a physical feature of HDPE that was responsible for the risk of premature failure, no reliance could be appropriately placed upon the analysis in Medtel v Courtney to conclude that the owner of a solvent extraction plant would not be prepared to run the risk of using HDPE lining. While it follows from Medtel v Courtney that it is permissible to demonstrate unsuitability on the basis of an inherent risk associated with a type of product, without the particular product purchased having actually failed, it is first necessary to establish that the type of product carries the inherent risk alleged. In our opinion, this is what BHP has failed to do.
3. The appellant contends that a possibility of a quality that would render the good unacceptable, is sufficient to establish a contravention of s 54. But to describe the process of degradation of the PSAN propellant, if exposed to temperature changes and moisture, as one which is known to be "progressive and irreversible", does not demonstrate that a risk of rupture is present in the airbags in the VW Vehicles or the nature of such risk. As indicated, there was no materialisation of the asserted risk of rupture within the timeframes tested by VW AG, which included vehicles up to 15 years old. That accorded with the real-world experience that there had been no such rupture in a Volkswagen vehicle anywhere in the world.

An unquantifiable risk of serious harm

1. The argument that a "relevant characteristic" which makes the good of unacceptable quality can be an "unquantifiable risk of serious harm", proceeds on the basis that: 1. the appellant did not show that an integrated burn rate sufficient to rupture the airbag having a particular physical consequence would be generated at an identifiable point in time; 2. the very fact that no identifiable point in time can be predicted for any given vehicle is part of what makes the vehicle of unacceptable quality; and 3. it does not matter that the appellant did not prove if and when the airbag in his vehicle would rupture or mis-deploy.
2. As to (1) and (2) above, it is not in dispute that PSAN may absorb moisture and that this may contribute to a process of degradation which increases the burn rate for PSAN. At trial, the parties diverged as to whether the appellant had shown anything more than the theoretical potential for a form of aggressive burning of PSAN that can cause rapid inflation of an airbag in such a way as to cause a rupture. As indicated, Mr Renz accepted that he could not say that degradation of PSAN would reach a point of functional significance at any identifiable point in time, let alone within the service life of any of the VW Vehicles.
3. Nor did the empirical testing conducted by VW AG prove the appellant's contention that the degree of moisture absorption that affected Takata airbags in Volkswagen vehicles gave rise to the alleged propensity or risk that the airbags would rupture in a manner that causes harm to vehicle owners. As his Honour found at [142], the appellant failed to establish any connection between possible degradation in PSAN and airbag performance in Volkswagens. The contention that the "unquantifiable risk of serious harm" is not fanciful should be rejected. As his Honour found at [146], the risk that the appellant alleged was no more than a speculative possibility.
4. As to (3) above, the appellant sought to prove that his vehicle was of unacceptable quality because it was manufactured with a particular feature (PSAN propellant in the airbag inflators) that was responsible for an increased risk of rupture compared with airbags not manufactured using PSAN. For the reasons given above, the appellant failed to do so.
5. It is said that the unquantifiable risk makes the appellant's vehicle of unacceptable quality because "the risk has not been excluded for the realistic life of the good". This reverses the onus of proof. It was for the appellant to demonstrate, on the balance of probabilities, that his vehicle was of unacceptable quality. As his Honour found at [145], the appellant had not sought to demonstrate that the alleged risk could eventuate during any meaningful timeframe.

Answers to common questions

1. Given the conclusions on grounds 1-9, the contention in ground 10 that his Honour erred in answering questions 3, 4, 10 and 11 in the negative should be rejected.

Other grounds

1. The above conclusions are decisive of the appeal. While not strictly necessary to consider the other grounds relating to the defence under s 271(2) and damages, this is a case which in accordance with Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 at [12], taking into account the remarks in Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 at [7]-[8], it is appropriate to deal with the grounds which are not decisive.

Defence under ACL, s 271(2)

1. Section 271(2) is a proviso in the nature of a defence, being a justification or exception. It is common ground that VW bears the onus of proving that it applies: Capic v Ford Motor Vehicle Company of Australia Pty Ltd [2021] FCA 715; (2021) 154 ACSR 235 at [741] (Perram J). The same view was taken of the proviso in the predecessor provision in TPA, s 74D(2): Effem Foods Ltd v Nicholls [2004] NSWCA 332; (2004) ATPR 42-034 at [11] (Handley JA, Tobias JA and Palmer J agreeing).
2. The Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (the 2010 Explanatory Memorandum) states at par 7.126 that s 271(2) "ensures that manufacturers are not held liable for issues with goods that are beyond their control". The three exceptions in s 271(2) address different subject matters: sub-par (a) deals with the acts, defaults, omissions or representations by persons, other than the manufacturer, that might affect compliance with the statutory guarantee; sub-par (b) deals with events independent of human control provided they occurred after the goods left the control of the manufacturer; and sub-par (c) deals with the price charged by the supplier, that might affect compliance with the statutory guarantee.

The pleaded defence

1. VW pleaded the exception in s 271(2)(a) in answer to the claims of the appellant and group members for any non-compliance with the consumer guarantee in s 54 (which was denied). The particulars of this defence included that Takata was responsible for the design, development and production of the Takata airbags installed in the VW Vehicles.
2. VW relied on Mr Schade's evidence that airbag inflators are a complex subsystem within a vehicle and require specialist expertise to design, develop, manufacture and test, and in acquiring these systems from third party suppliers, VW AG relied on their expertise and also required suppliers of airbag systems to meet quality and safety requirements for the systems specified by VW AG. Mr Schade gave evidence that:

• during the development phase for the production of a vehicle, VW AG sends to the relevant supplier a "Book of Requirements" and specification drawings under the cover of a "nomination letter" which sets out the requirements that the supplier needs to meet when developing the airbag module under its contract with VW AG for the supply of those systems. (An example of a Book of Requirements in respect of a Polo A5 was in evidence);
• legal constraints under German law pertaining to the handling of explosives (the "Sprengstoffgesetz") apply to the handling, production and testing of the pyrotechnic components of an airbag system. Neither VW AG nor any of its employees has the necessary approvals required by the Sprengstoffgesetz to engage in all necessary activities for the handling, production and testing of pyrotechnic material that is used in airbag inflators;
• all newly developed airbag systems to be supplied to VW AG must undergo testing at the supplier's facilities, to satisfy the specifications notified by VW AG;
• once a supplier provides to VW AG a prototype of an airbag system, it has been VW AG's practice for a prototype to be installed in a vehicle and subjected to further testing by VW AG. The nature of the testing is: (a) combined steering wheel and airbag component tests (specifically for frontal driver airbags), (b) sled testing and, (c) vehicle crash tests; and
• it is the practice at VW AG that these tests are conducted before it approves an airbag system for series production. Once series production has commenced, the system supplier will conduct additional periodic conformity of production tests of the airbag modules during the production period of the particular model. VW AG also undertakes its own full vehicle crash testing of production series vehicles.

The submissions at trial

1. VW said that neither VW AG nor VW was responsible for the design of the airbags, and they both relied on Takata. To the extent that the use of PSAN in the Takata airbag inflators constituted a relevant defect, it was said that defect with the goods only arose because of the acts of Takata in designing and building the airbag inflators using PSAN.
2. The appellant submitted that the exception in s 271(2)(a) did not apply because: Where the good is not fit for purpose before it leaves the manufacturer's control, the non-compliance cannot be only because of someone else. This is so even where primary responsibility for the defective part lies with a third party supplier; if nothing else, the non-compliance must be at least partially because of the manufacturer's decision to release the good for sale, as well as its selection of the supplier and/or selection and policing of specifications and quality standards (even if the manufacturer exercised reasonable care and skill). The fact that Takata manufactured the airbags on contract for the defendant does not exonerate the defendant from liability.

The primary judge's reasons

1. His Honour made the following findings concerning the design and manufacture of the airbags in the VW Vehicles at [35]-[38]: VW AG did not manufacture the airbags. Airbag systems are complex and require specialist expertise to design, develop, manufacture and test. Indeed, VW AG does not hold the German legal approvals necessary to produce airbag systems. VW AG gave Takata specifications in respect of the airbags in a "Book of Requirements". The Book of Requirements contained specification drawings, under cover of a "nomination letter", setting out certain requirements that Takata was required to meet when designing the airbag system. The specifications that VW AG gave Takata included performance specifications for the inflators, including that, at room temperature, inflation should occur within the range of 24 to 33 milliseconds. However, and critically, VW AG did not specify what propellant should be used in the airbags. Takata chose to use PSAN as the propellant.
2. None of these findings are challenged on appeal.
3. On the assumption that the appellant's vehicle was not of acceptable quality, his Honour found at [173] that the guarantee under s 54 does not apply by reason of the exception in s 271(2)(a). It is convenient to set out in full his Honour's reasons at [162]-[170]: In this hypothetical circumstance, the reason that VW did not comply with the s 54 guarantee is because the airbag in the plaintiff's vehicle used PSAN as the propellant and because PSAN has a propensity to degrade. VW AG did not design the airbag and did not specify what propellant should be used, let alone specify that PSAN should be used. Only Takata was responsible for the design and manufacture of the airbag and for the decision to use PSAN as the propellant. But for Takata's decision to use PSAN as the propellant, there would have been no breach by VW of the s 54 guarantee of the kind contended for by the plaintiff. There is no other circumstance that, in this hypothetical scenario, has led to VW being in breach of the guarantee. It is true that VW AG installed the airbag, but there is no suggestion here that the manner of airbag installations was causative of the plaintiff's vehicle not being of acceptable quality. It is also true that VW "supplied" the vehicle to the plaintiff for the purpose of s 54. But the guarantee under s 54 only arises when there has been such a supply. The exemption in s 271(2) can only arise if there has been such a supply. Otherwise, there could be no guarantee "not complied with". The exemption in s 271(2) presupposes that the manufacturer in question has "supplied" the goods and then posits a circumstance where the breach of the guarantee thereby arising occurs "only because" of the conduct of another. The fact that, on this hypothesis, the plaintiff's vehicle was not "acceptable" from the time of its manufacture takes matters no further. Subsection 271(2)(b) deals expressly, and alternatively, with causes "after the goods left the control of the manufacturer". This makes clear that the legislature did not intend that the exception in s 271(2) be so confined. The plaintiff also submitted that VW's non-compliance with s 54 in this hypothetical circumstance was not "only" because of Takata's acts, defaults or omissions but also because of VW's own selection of Takata as its subcontractor and VW's "selection and policing of specifications and quality standards" even if it "exercised reasonable care and skill". In effect, the submission was that the mere fact that VW chose Takata as its airbag supplier was itself a reason for its failure to comply with the s 54 guarantee. But that reading of s 271(2)(a) would leave it having no work to do. That subsection is clearly directed to acts, faults and omissions of parties other than the manufacturer itself. If the mere engagement by the manufacturer of such a third party was sufficient to exclude the subsection's operation, I find it hard to see what operation the subsection could have.

Grounds 11-14

1. Grounds 11-14 contend: 11. The primary judge erred in failing to hold that s 271(2) of the ACL did not apply. 12. The primary judge erred in effectively importing a negligence or fault standard into what is a strict liability regime. 13. The primary judge ought to have held that on the proper construction of s 271(2) of the ACL, non-compliance with the guarantee could be "only because of" the act, default or omission of another if the manufacturer had no control over the good between the relevant act, default or omission and the supply. 14. The primary judge erred in answering common question 18, yes. His Honour ought to have answered it, no.
2. Ground 11 is a general ground. Grounds 12 and 13 challenge his Honour's construction of s 271(2). Ground 14 incorrectly states that the answer given to question 18 was "yes" when the answer was "[g]iven the answers to Questions 3, 4 and 11, it is not necessary to answer this question". Ground 14 depends on the outcome of the preceding grounds.
3. It is convenient first to address the causal relationship required by the phrase "only because of" in s 271(2).

The phrase "only because of"

1. The phrase "only because of" is a relational term. The approach to construing relational terms is explained by French CJ in R v Khazaal (2012) 246 CLR 601; [2012] HCA 26 at [31]. In s 272(2), the phrase refers to a causal connection between the non-compliance with the guarantee of acceptable quality and the specified matter in the three exceptions under s 271(2). The requisite nexus between the non-compliance with the consumer guarantee of acceptable quality and the specified matter in s 271(2) is that the latter must be the "only" reason for the failure of the good to comply with the consumer guarantee. Relevantly, in this case, s 271(2)(a) requires that an act, default or omission of any person, other than the manufacturer or its employee or agent, must be the "only" reason for the failure of the good to comply with the consumer guarantee.
2. This is to be contrasted with the phrase "by reason of" in the predecessor provision in TPA, s 74D(2)(a), which is an expression that generally requires a causal connection between two matters, but it need not be direct or proximate: see, for example, in other statutory contexts, Waters v Public Transport Corporation (1991) 173 CLR 349 at 401; [1991] HCA 49 (McHugh J); Republic of Croatia v Sneddon (2010) 241 CLR 461; [2010] HCA 14 at [22] (French CJ), [53], [69] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
3. No temporal limitation applies to the exception in s 271(2)(a) for an act, default or omission of another person, unlike TPA, s 74D(2) which explicitly imposed a temporal limitation on the specified matters in sub-pars (i) and (ii) of s 74D(2) ((i) an act or default of any person, or (ii) a cause independent of human control "occurring after the goods have left the control of the manufacturer" (emphasis added)). By contrast, this temporal limitation continues to apply to the exception in s 271(2)(b) for a cause independent of human control, and it also applies the same exception in s 259(5) for a supplier of goods.
4. The absence of any temporal limitation in s 271(2)(a) compared to s 271(2)(b) and s 259(5), together with the drafting change to sub-par (i) of TPA, s 74D(2) strongly suggests that it is not possible to read the qualification in s 271(1)(b) and s 259(5) into the exception in s 271(2)(a). The exception in s 271(2)(a) is satisfied where the only cause of non-compliance with the consumer guarantee in s 54 is an act, default or omission of any person, other than the manufacturer or its employees or agents, occurring before or after the goods left the control of the manufacturer.

Who is the manufacturer in this case?

1. The obligation under s 271 is imposed on the manufacturer of the goods. "Manufacturer" has an extended definition in s 7(1): see [42] above. As the 2010 Explanatory Memorandum states at par 2.37: The meaning of manufacturer encompasses a wide range of activities that represent the first point in the chain of distribution of a product into an Australian market, whether directly by a person, or in that person's name or brand.
2. It is common ground that both VW AG and VW is a manufacturer. VW AG is "a person who … produces … or assembles goods" within s 7(1)(a). And, as the importer of the VW Vehicles into Australia at a time when VW AG did not have a place of business in Australia, VW is taken to be a manufacturer within s 7(1)(e). No point was taken by VW at trial that the definition of "manufacturer" in s 7(1)(e) does not expressly state that the importer is taken to be the manufacturer for all purposes of the ACL, such as in s 271(2).
3. In this Court, VW said that there may be a distinct question of construction of s 271(2)(a) in an action against the importer, who is taken to be a manufacturer by operation of s 7(1)(e), if the act, default or omission that made the goods non-compliant with the consumer guarantee includes that of the actual manufacturer located outside Australia. VW said that it is not necessary to determine this question as it does not arise in this case because neither VW AG nor VW was relevantly responsible for the defect in the VW Vehicles.
4. However, in oral argument, VW implicitly conceded that in an action against the importer, who is taken to be a manufacturer by operation of s 7(1)(e), the reference to the "manufacturer" in s 271(2) included both the actual manufacturer located overseas and the importer of the goods. That should be accepted. In the circumstances of this case, the reference to the "manufacturer" in s 271(2)(a) should be read distributively to include both the actual manufacturer, VW AG, and the importer, VW. That is for several reasons.
5. Ordinarily the same meaning should be given to the same words appearing in different parts of a statute unless there is reason to do otherwise: The King v Jacobs Group (Australia) Pty Ltd (formerly known as Sinclair Knight Merz) [2023] HCA 23 at [25], referring to Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618 (Mason J); [1975] HCA 41. Neither party suggested that there was a reason to do otherwise in s 271(1) and (2) with respect to the word "manufacturer".

Application of the "other person" exception in s 271(2)(a)

1. The appellant relies upon two reasons which are said to demonstrate error in his Honour's finding that the assumed defect only arose because of the act of Takata in deciding to use PSAN as the propellant: at [164].
2. Ground 12, as explained in written submissions, contends that the effect of his Honour's construction of s 271(2)(a) is to transform manufacturer liability for breach of consumer guarantees from strict liability into fault-based liability, if and to the extent that subcontractors are engaged. It is said that this would allow an easy means for manufacturers to circumvent the consumer guarantees.
3. This ground misstates the exception in s 271(2)(a). The exception directs attention to the fact or facts which made the goods of unacceptable quality under s 54. Having identified that fact or facts, the question is whether the goods were not of acceptable quality only because of, relevantly, an act, default or omission of any person, other than the manufacturer or an employee or agent of the manufacturer.
4. The exception in s 271(2)(a) draws the line at the conduct in respect of which the manufacturer is strictly liable as its own conduct and that of its employees or agents. It was not suggested that Takata was an agent of VW AG. It was common ground at trial that Takata was a third party supplier to VW AG. The words in s 271(2)(a) are clear and must be given effect according to their terms without the unwarranted gloss suggested by the appellant. If the sole cause of what made the goods non-compliant with the consumer guarantee in s 54 is an act, default or omission of a third party supplier to the manufacturer, there is no reason to deny the operation of the exception to a manufacturer. Ground 12 should be rejected.
5. Ground 13 contends that non-compliance with the guarantee could be "only because of" the act, default or omission of another if the manufacturer had no control over the good between the relevant act, default or omission and the supply. The matter was put a little differently in writing. It is said that the exception in s 271(2)(a) only applies when the breach of the consumer guarantee is triggered solely by matters in respect of which the manufacturer had no "involvement or responsibility" in what made the goods non-compliant with the consumer guarantee.

Damages

1. Common questions 17, 19 and 20A articulated the damages claimed on behalf of group members under two heads of damage: 1. Questions 17 and 19 asked, "can the Group Members have suffered any loss or damage, in the form of a reduction in the 'true value' [of the vehicle] as at the date of purchase, attributable to the [vehicle] not being of" "merchantable quality" (Q17) or "acceptable quality" (Q19), in circumstances in which the airbag has been or can be replaced at no cost to the Group Member? 2. Question 20A asked, "can the Group Members have suffered any loss or damage, in the form of disappointment/ distress and/ or anxiety", in circumstances in which the airbag has been or can be replaced at no cost to the Group Member?
2. In final written submissions at trial, three potential approaches to the appellant's claim for damages under s 272(1) were identified: 1. reduction in value: award the appellant the difference between the price paid and the "true value" at the time (of supply); 2. "left in the hand": award the appellant the difference between the price paid and the current value of the vehicle; and 3. "do the best": the Court should "do the best" to arrive at a damages figure by an award of either: (1) a portion of the difference between the price paid by the appellant for his vehicle and its "true value", being equal to the number of years that the vehicle was "defective" over the total number of years from purchase to judgment, or (2) interest at an appropriate rate on the difference between the price paid and the "true value" over the period during which the vehicle was "defective".
3. It is not necessary to refer to his Honour's reasons for rejecting the appellant's claim under s 272(1)(b) for damages for disappointment, distress or anxiety, as there is no challenge to this finding.

The primary judge's reasons

1. His Honour rejected the appellant's claim under s 272(1)(a) on two bases.
2. First, the appellant was only entitled to damages for loss actually suffered because the question posed by s 272(1)(a) is what damage the appellant has now suffered "for" any reduction in value below the purchase price "resulting from" any failure by VW to comply with the s 54 guarantee. Reference was made to Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281 at 291; [1995] HCA 4 at [190], [193].
3. Applying this approach, his Honour concluded at [195] that the appellant has not suffered any financial loss, giving five reasons: (i) the airbag has since been replaced at no cost; (ii) the appellant has had full use of the vehicle since he acquired it; (iii) there has never been any performance issue with the airbag associated with the alleged defect; (iv) the appellant has not been involved in any accident so as to trigger deployment of the airbag; and (iv) the appellant continues to own a vehicle that is as valuable as an ordinary car of that age and type: at [196]-[201]. His Honour found that "[t]he effect of such replacement [of the airbag] is that such defect, as may hitherto have affected the vehicle's value, has been removed": at [205].
4. Second, the appellant had not proved damage in any of the three ways in which the appellant put his claim in final submissions: (1) reduction in value, (2) "left in the hand", or (3) the court should "do the best" to arrive at a damages figure: at [184]-[187].
5. As to (1), the appellant's case was that a discount of about 30 per cent to the purchase price should be applied, had the true facts been known. This discount was based on Prof Michelle Baddeley's survey-type evidence that the market price of affected new Volkswagen vehicles would have been about 30 per cent lower than the actual price, had the risks associated with the Takata airbags been disclosed to the market.
6. His Honour gave detailed reasons for finding at [223] that no weight could be given to the discrete choice experiments conducted by Prof Baddeley, including the fundamental flaws in her work (at [230]), and the methodological problems which caused the surveys to be "confusing" (at [249]-[251]), none of which reasons were challenged on appeal. His Honour concluded at [252] that the experiments were "deeply flawed", of no value to the task at hand, and cast no light on the "true value" of the appellant's vehicle at the time he purchased it.

Grounds 15-20

1. The appellant did not press ground 15 which contends that his Honour erred in his approach to the award of damages under s 272(1).
2. Grounds 16-20 contend: 16. The primary judge erred in rejecting and placing no weight on Professor Baddeley's discrete choice experiments as evidence of the value of the appellant's vehicle, having regard to: (a) the findings on liability which his Honour ought to have made; (b) the fact that the respondent would not have offered a vehicle with a defective airbag for sale, such that a sale transaction for the appellant's vehicle would not have taken place. 17. Alternatively, given 16(b), the primary judge ought to have held that the value of the appellant's vehicle for the purposes of s272(1) was nil. 18. The primary judge ought to have held that the appellant was entitled to damages under s272 of the ACL, calculated on the basis of: (a) The full amount of the purchase price paid for the vehicle, on the basis that the value of the vehicle was nil; (b) Alternatively, a proportion of the purchase price paid for the vehicle, on the basis that the value of the vehicle was greater than nil but less than the price paid, placing some weight on the discrete choice experiments; (c) Alternatively, the difference between the purchase price paid for the vehicle and the value of the vehicle at the time of hearing (the "left in the hand" approach); (d) Alternatively, some proportion of (a), (b) or (c) to reflect the fact that the appellant had a vehicle that was of unacceptable quality for some six years, until airbags were replaced; and/or: (e) Interest on (a), (b) or (c), or the additional interest/financing costs that the appellant paid under which financing facility based on (a), (b) or (c); (f) GST on (a), (b) or (c); (g) stamp duty on (a), (b) or (c). 19. The primary judge ought to have held that damages in accordance with ground 18 are available notwithstanding that the defective airbags have now been replaced at the respondent's cost. 20. The primary judge ought to have answered each of common question 17, 19 and 20A, yes.
3. These grounds fall into two categories. Some grounds challenge the rejection of the appellant's individual claim. In this category, grounds 16, 17 and 18(a) and (b) challenge the rejection of the reduction in value claim, alternatively, ground 18(c) challenges the rejection of the "left in the hand" claim, ground 18(d) was not the subject of specific submissions, and grounds 18(e), (f) and (g) advance a new claim for consequential loss under s 272(1)(b) for excess financing costs and excess taxes.

The proper approach to the assessment of reduction in value damages

1. Section 271(1) creates a statutory cause of action. It entitles affected persons to damages from the manufacturer for non-compliance with the consumer guarantee of acceptable quality in s 54. Section 272(1) states the type of damages a consumer is entitled to claim under s 271, being any reduction in value of the goods "resulting from" the failure to comply with the statutory guarantee (s 272(1)(a)) and any other reasonably foreseeable loss or damage, including consequential loss (s 272(1)(b)).
2. The word "damages" in ss 271 and 272 is used in the sense of statutory compensation. Two issues of construction arise in relation to s 272(1)(a): 1. the point in time for assessing damages for any reduction in the value of the goods; and 2. whether events or information obtained after the time of supply can be taken into account.

Time for assessment of any reduction in value

1. It was and is common ground between the parties that any reduction in value of the goods is to be assessed by reference to the time of acquisition of the goods, that is, the time of supply. That is consistent with the statutory language in s 272(1)(a), given that each of the integers by which reduction in the value of the goods is assessed is a price referable to the time of supply. It also accords with views expressed in:

• Capic at [880], where Perram J said that "[t]he correct question is what the value was when the [claimant] purchased it";
• Vautin v By Winddown, Inc (formerly Bertram Yachts) (No 4) [2018] FCA 426; (2018) 362 ALR 702, where Derrington J said at [229] in obiter that "presumably" reduction in value is measured at the date of supply for a claim under s 259(3) and took the same view at [340] for a claim under s 272(1)(a); and
• Williams v Toyota Motor Corporation Australia Ltd (Initial Trial) [2022] FCA 344, where Lee J concluded at [309] that the point in time for assessing damages for any reduction in the value of the goods is the time of supply.

1. After this Court reserved judgment on the appeal, the Full Federal Court expressed a qualification to the time for assessment of reduction in value damages in Toyota Motor Corporation Australia Ltd v Williams [2023] FCAFC 50; (2023) 408 ALR 582. Although Moshinsky, Colvin and Stewart JJ accepted that "generally" or in "most cases" it will be appropriate to assess damages for any reduction in the value of the goods by reference to the time of supply (at [98], [100]), their Honours said that, depending on the circumstances, the assessment of whether the claimant has suffered loss or damage "may require" "a departure from the time of supply or an adjustment to avoid over-compensation" (at [99]).
2. Two main reasons were given why this may be necessary. One is that the word "damages" in s 272 imports a requirement that the applicant for relief must have suffered loss or damage, and this requirement is not to be displaced by the "explicit or implicit reference to the time of supply" in s 272(2)(a)(i) and (ii) (at [99]). The other is that, like the cases involving general law damages, the overarching consideration to award appropriate compensation may require flexibility in applying the general rule that damages are assessed as at the time of supply (at [102]-[103]).

Whether subsequent events can be taken into account

1. Assuming the use of PSAN in the airbag inflator was a latent defect, the parties diverged as to whether his Honour erred in having regard to the subsequent replacement of the airbag, at no cost, when assessing whether the appellant had suffered damage under s 272(1)(a). The essential difference between the parties is whether in assessing statutory damages of the kind referred to in s 272(1)(a) of the ACL, it is an error to have regard to common law principles for the assessment of damages.

Submissions

1. The appellant accepted that to take account of the replacement of the airbag at no cost would be fatal to his case. In resisting that approach, which the primary judge adopted, the appellant said that the language of s 272(1)(a) does not permit an assessment of any reduction in value which takes account of the goods having been being "fixed".
2. It is said that (i) general law notions of compensation should not be imported into s 272 by the use of the word "damages" in that provision; (ii) disregarding subsequent events coheres with s 271(6); (iii) any reduction in value "can happen theoretically"; and (iv) the replacement of the airbag was simply a benefit which the appellant received in mitigation of loss and should be brought to account.
3. No separate or different argument was advanced by the appellant in relation to the words "loss or damage" and "compensation" in s 74D(1) of the TPA.
4. VW submits that the analysis of the primary judge was plainly correct: any notional reduction in value based on abstract propositions could not be shown to have caused the appellant any loss in circumstances where the appellant had experienced no detrimental impact of any supposed defect and the defect had been wholly rectified, at no cost, before any risk of manifestation had arisen.
5. It is said, by analogy with the High Court's approach in Kizbeau to assessing damages under s 82 of the TPA, that the primary judge was right to take into account the subsequent replacement of the airbag at no cost in analysing whether the appellant was entitled to damages under s 272(1)(a).

Reasoning

1. It is well-established that "[t]he primary task is to construe the relevant statutory provisions, rather than to draw an analogy with claims under the general law": Jonval Builders Pty Ltd v Commissioner for Fair Trading (2020) 104 NSWLR 1; [2020] NSWCA 233 at [35] (Leeming JA, Bathurst CJ and Meagher JA agreeing), referring to the joint judgment in Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; [2004] HCA 3 at [44]. The same point was made in I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; [2002] HCA 41 at [84] (McHugh J) and Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; [1998] HCA 69 at [32], [38] (McHugh, Hayne and Callinan JJ).
2. Nevertheless, the assessment of damages for the relevant statutory purpose may be informed by a consideration of common law principles for the assessment of damages, particularly where those principles relate to a claim with a close analogy to the claim being considered. In such circumstances, general law principles may provide "useful guidance" or be an "appropriate guide": Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 at [18] (Gleeson CJ), [130] (McHugh J). As Gleeson CJ explained at [18], in the context of claims for damage under s 82 of the TPA, general law analogies may provide useful guidance: … for the reason that they have had to respond to problems of the same nature as the problems which arise in the application of the Act. They are not controlling, but they represent an accumulation of valuable insight and experience which may well be useful in applying the Act.
3. The statutory cause of action in ACL, s 271 and its predecessor TPA, s 74D(1), does not operate on any contract. However, as Perram J said in Capic at [891], by reference to the observations of Edelman J in Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326; [2020] HCA 17 at [63]-[67] in relation to the similar provisions of the ACL (s 267(3) and (4)), s 272(1)(a) and (b) resemble the two components of compensatory damages available at common law for breach of contract: (1) compensation directly for the performance interest, and (2) compensation for consequential losses. Perram J observed in Capic at [891] that this might suggest that the point of an award of damages is to put the claimant "in the position she would have been in if the [thing acquired] had been of acceptable quality". The appellant did not argue to the contrary.

Application to the facts

1. It is not in dispute, as VW submits, that the appellant acquired a mechanically complex product - a vehicle - that requires maintenance in order to remain safe for use, and frequently has parts repaired and even replaced during its lifetime. Given that a vehicle should remain safe for use, it is inherent in the nature of a vehicle that upon recognising a latent defect, the defective part will be repaired or replaced as necessary. Assuming the airbag in the appellant's vehicle was a latent defect, that is what occurred in this case.
2. Contrary to the appellant's submission, this is not a question of quantifying a mitigating benefit the appellant has received. Whether there is "any" reduction in the value of the appellant's vehicle, at the time of supply, directs attention to the nature of the failure to comply with the consumer guarantee. Here, the asserted problem with the appellant's vehicle that is said to have reduced its value, at the time of supply, has been fully rectified, at no cost, in a manner that a reasonable consumer would have always expected given the nature of goods of this kind, if the vehicle contained a latent defect. On the present assumption, that was an event that arose from the nature of the vehicle.
3. It is said that the fatal flaw in VW's submission is "assuming away breach to get to a conclusion of no damage". This misunderstands the submission. The premise of the submission is that the appellant's vehicle is not of acceptable quality at the time of supply because the use of PSAN as a propellant is a latent defect. The submission points to the rectification of the assumed latent defect in a manner which a reasonable consumer would always have expected, given the nature of the goods, as a subsequent event which illuminates or reflects or indicates the value of the appellant's vehicle at the time of supply.
4. Nor is it an answer for the appellant to say, as he does, that any reduction in value "can happen theoretically". Aside from the obvious difficulty in assessing damages based on a "theoretical" reduction in value, to award damages on that basis would be unprincipled. It would place the appellant in a superior position to that which he would have been in had the guarantee of acceptable quality been fulfilled by VW, assuming a failure to comply with the consumer guarantee in s 54. The appellant would have received a vehicle which he has used without incident and, which he accepts is, by reason of replacement of the airbag, as valuable today as it would have been had it been supplied originally with non-defective airbags. The appellant cannot recover more than his actual loss such that "double recovery" is impermissible. Nothing in s 272(1) suggests otherwise.

The appellant's damages claim in this Court

1. In writing, the appellant advanced the three claims for damages under s 272(1) (see (1), (2) and (3)(a) below). In oral argument, a further claim was advanced (see (3)(b) below): 1. reduction in value: a claim under s 272(1)(a) for the difference between the purchase price (about $40,000) and the "true" value of the vehicle at the time of supply; 2. "left in the hand": a claim based on what was "left in the hand", which is said to be a proxy for damages under s 272(1)(b), being a loss of $15,000 calculated as the difference between the purchase price (about $40,000) and the current value of the appellant's vehicle at trial which is said to be $25,000; and/or 3. consequential loss: a claim under s 272(1)(b) for (a) "excess" financing costs (interest) and "excess" taxes (GST and stamp duty) on the difference between the purchase price and the "true" value of the vehicle at the time of supply; and (b) interest on the cost of repair.
2. In oral argument in reply, senior counsel for the appellant conceded that "a lot of the methodology that we float in our written submissions falls foul of the statutory definition, and I accept that". Given this concession, some of the appellant's claims can be dealt with relatively briefly.

Reduction in value

1. In writing, the appellant contended that the true value of his vehicle, at the time of supply, was either: (i) nil, (ii) a value as assessed by reference to Prof Baddeley's discrete choice experiments, or (iii) a value assessed by the Court as a matter of impression.

"Nil" value

1. It is said, by application of market theory, that the appellant's vehicle had no value at the time of supply, and therefore he should recover his full purchase price. As the appellant acknowledged, this submission was not put at trial. Indeed, in final submissions at trial, senior counsel for the appellant expressly disavowed this argument stating, "I'm not putting a submission, as tempting as it is, that the car was worth zero".
2. The short answer to the "nil" value argument is that it was not pressed in this Court in oral submissions. Senior counsel for the appellant frankly acknowledged that the argument was "too artificial" and said nothing in support of it. Grounds 17 and 18(a) should be taken not to have been pressed.
3. Had it been necessary to determine VW's objection to this claim as a new point on appeal, the objection should be upheld. This claim could possibly have been met by calling evidence at the hearing: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; [1950] HCA 35 and Coulton v Holcombe (1986) 162 CLR 1 at 7-9; [1986] HCA 33.

30 per cent discount of purchase price

1. The critical issues at trial were whether it was possible to reason from the discrete choice experiments of Prof Baddeley and, if so, what conclusions might properly be drawn as to any reduction in value of the appellant's vehicle, at the time of supply, assuming a failure to comply with the guarantee of acceptable quality. It is said that his Honour erred in placing no weight on Prof Baddeley's evidence (ground 16), and that he should have placed "some" weight on that evidence (ground 18(b)).
2. The appellant accepts that there were imperfections in the discrete choice experiments of Prof Baddeley, which could have been done better. However, it is said that it is obvious (by recourse to common sense or basic economic theory) that the appellant's vehicle was worth less at the time of supply than he paid for it.
3. No attempt was made in oral argument to sustain the broad challenge in ground 16 to the finding that no weight should be given to the evidence of Prof Baddeley. Nor did the appellant challenge the findings that there were fundamental flaws in Prof Baddeley's work (at [230]), that she had "allowed herself to become something of an advocate for" the appellant and group members (at [227]), and that there were methodological problems with the surveys (at [249]-[251]).
4. To the extent that the appellant urged the Court to give "a tiny bit of weight" to what Prof Baddeley said in relation to the discrete choice experiments, the appellant did not identify any error in his Honour's findings. Grounds 16 and 18(b) should be rejected.

"Do the best" approach

1. Next, it is said that the Court must "do the best" it can, even where precise evidence of value is not available, and the exercise is inherently impressionistic, referring to statements in Capic at [883]-[884]. This submission has two limbs.
2. It is said that his Honour ought to have accepted the results of the discrete choice experiments as a starting point and then, if appropriate, adjust for unreliability. Alternatively, it is said that even if his Honour did not err in rejecting the results of the discrete choice experiments, he should nevertheless have made an assessment, "as a matter of impression", referring to Capic at [882]-[890].
3. It is not in doubt that "mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them" and "[w]here precise evidence is not available, the Court must do the best it can": Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83 (Mason CJ and Dawson J); [1991] HCA 54.
4. In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 196 ALR 257 at [37]-[38], Hayne J (Gleeson CJ, McHugh and Kirby JJ agreeing) distinguished between a case where the plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence. His Honour said of the former kind of case at [38]: In the former kind of case it may be that estimation, if not guesswork, may be necessary in assessing the damages to be allowed. References to mere difficulty in estimating damages not relieving a court from the responsibility of estimating them as best it can may find their most apt application in cases of the former rather than the latter kind. (Citations omitted.)
5. This case falls into the latter category. The appellant sought to prove the "true" value of his vehicle, at the time of supply, and of all vehicles affected by the same alleged defect, by reference to the evidence of Prof Baddeley which was wholly rejected.
6. This is not a case where damage has been proved but the evidence does not enable precise quantification of it and the Court is required to "do its best": Paino v Paino [2008] NSWCA 276 at [76] (Hodgson and McColl JJA, Young CJ in Eq agreeing at [113]). The appellant failed to prove his loss and its quantum by adducing precise or reasonably precise evidence of any reduction in value of his vehicle at the acquisition date. That circumstance does not permit the primary judge to make an assessment by placing "some weight" on evidence that was "unreliable", or make a jury assessment as to any reduction in value at the time of supply: Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 at [31].

"Left in the hand" approach

1. The appellant accepted that his Honour's conclusion at [254]-[255] that the "left in the hand" measure of loss did not fall within s 272(1)(a) "appears to be correct". That concession was properly made. The enquiry as to the true value at the date of supply is conceptually distinct from enquiring into the current value of the relevant good, which is the wrong question for the purpose of s 272(1)(a): Capic at [880].
2. In writing, the appellant said that the "left in hand" approach is a proxy for assessing the loss or damage suffered by the affected person because of the failure to comply with the guarantee in s 54 and therefore falls within s 272(1)(b). By analogy with the "no transaction" cases, such as HTW Valuers v Astonland, it is said that the appellant seeks to be put in the position he would have been in had he not spent his money on acquiring a Volkswagen vehicle by receiving the purchase price that he would not have paid and bringing to account the value of his vehicle that he still holds.
3. The appellant did not mention the "left in the hand" approach in oral argument in chief, nor in reply after VW stated in oral argument that it assumed that this claim was not pressed. This claim should be taken not to have been pressed.
4. If the claim had been pressed, it should be rejected for two reasons.

Pleading objection

1. The appellant's contention that VW was not prejudiced by the late notice of this unpleaded claim cannot be accepted. When the claim was first raised in closing submissions, the appellant conceded that there was "no direct evidence of sales in 2021", and pointed to the highest prices from the eleven sales recorded in the Pickles sales data covering 2015-2018 for second-hand Volkswagen Passats manufactured on the same date as the appellant's vehicle at trial. This is the precise prejudice referred to by his Honour at [260]-[261].
2. Nor was the belated "offer" by the appellant on the last day of trial (1 June 2021) that VW appoint an expert who would inspect the vehicle and prepare a report on its market value an adequate solution to the prejudice occasioned to VW. There is no reason not to accept senior counsel's statement at trial, which was repeated in this Court, that had the appellant claimed this loss at some point before closing submissions, VW would have put on evidence going directly to the question of the vehicle's current value.
3. The appellant should not be permitted to advance a new point on appeal which could possibly have been met by calling evidence at the hearing: Suttor v Gundowda Pty Ltd at 438; Coulton v Holcombe at 7-9.

The "left in the hand" claim is not within s 272(1)

1. The "left in the hand" claim assumes a "no transaction" case, which is inconsistent with the rights given in s 272(1) which are premised on the transaction having taken effect: Capic at [891]. So much was correctly accepted by the appellant in oral argument.
2. Further, the premise of this claim under s 272(1)(b) is that the appellant acquired a vehicle that was less valuable than the purchase price. But this is inconsistent with s 272(3), which indicates that any claim for loss or damage alleged to have been "suffered through a reduction in the value of the goods" must be made under s 272(1)(a), not s 272(1)(b). As noted, the appellant accepts that the "left in the hand" claim does not come within s 272(1)(a).
3. Ground 18(c) should be rejected.

Consequential loss: interest, GST and stamp duty

1. The claim for "excess" financing costs (interest) and "excess" taxes (GST and stamp duty) is put as a claim for consequential loss under s 272(1)(b). The appellant acknowledged that no claim was made at trial for GST and stamp duty but said that a claim for interest was made.
2. It is said that the appellant should be permitted to advance the claims for interest and GST on appeal, as these claims "depend on resolution of a question of principle, not on any factual matter not debated at trial". The appellant pointed to documentary evidence that he financed the purchase of his vehicle, paying $6,133 in interest over five years and GST of $3,617.
3. It is also said that whilst the appellant did not press his claim for stamp duty on appeal, given the absence of evidence that he paid stamp duty on the purchase, the group members might be able to claim stamp duty after this Court "resolve[s] the question of principle" concerning whether those amounts "are recoverable".

Interest

1. The claim for interest was put differently at trial. As his Honour observed at [265(b)], the appellant contended in final submissions that one "potential approach" to the "do my best" assessment of damages was that the court should award "interest" at an appropriate rate on the difference between the price paid and the true value "over the period" during which the vehicle was defective, being the period 2013 to 2019, before the airbag in the appellant's vehicle was replaced.
2. The stated premise of this approach was that replacement of the airbag in the appellant's vehicle in 2018 reduces, but does not fully offset, that part of the appellant's loss that comprises the difference between the purchase price and true value, and some allowance should be made for the fact that for most of the period of the appellant's ownership, he has not had the car he paid for. That claim was not pressed on appeal. In this Court, the "interest" claim was put in two ways; neither was run at trial, nor pleaded, nor specified in the common questions.
3. "Excess" financing costs: It is said that the appellant and group members are entitled to damages referable to the interest on the difference between the purchase price and the "true" value of the vehicle, at the time of supply. This assumed that the appellant had established by evidence that his vehicle's value was less than what he paid for it, at the time of supply, by reason of the defective airbags, and that he sustained detriment arising from that state of affairs. That is not so, for the reasons given above in rejecting the reduction in value claim.
4. Interest on the "cost of repair": It is said that fixing the airbag is a proxy for paying reduction in value damages, and the appellant and group members are entitled to damages under s 272(1)(b) for consequential loss for being "out of my money" for the period the airbag was not fixed. The premise of this claim is unsound. The appellant was never "out of my money" for the cost of repair, nor were any of the group members. There can be no consequential loss for interest on the cost of repair of the airbag, given the replacement of the airbags was at no cost to the appellant and group members.

GST and stamp duty

1. It is said that the appellant's failure to contend at trial that the available damage under s 272(1)(b) included "excess" GST and stamp duty paid in respect of the purchase is not fatal for three reasons: (i) a distinction must be drawn between the appellant's individual claim and claims on behalf of group members, (ii) the new claims sought to be raised on appeal involve questions of law, and (iii) the common questions can now be amended to reflect the legal issues actually common to the appellant and group members.
2. As to the first matter, the distinction between a plaintiff's role as a party advancing an individual claim and the representative role of a plaintiff in representative proceedings under Pt 10 of the Civil Procedure Act is not contentious: see, for example, BHP Group Ltd v Impiombato (2021) 286 FCR 625; [2021] FCAFC 93 at [17]-[18]. As observed in Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127 at [236] (Bell P, Bathurst CJ and Basten JA agreeing): The representative proceedings regime [in Pt 10 of the CP Act] is concerned with the common determination of common questions only. The regime directly attends to the inevitability in representative proceedings that parts of the proceedings will not be common. (Emphasis in original.)
3. However, this distinction is no explanation for the appellant's failure to make a claim for himself and on behalf of group members for GST and stamp duty.
4. As to the second matter, even if it be assumed that the new claims only involved a question of law, "[a] party does not have a right to insist that a new point be decided on appeal simply because all of the facts having been established beyond controversy or the point is one of construction or of law": Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645 (Mason P, Gleeson CJ and Priestley JA agreeing). It always remains a question of whether it is "expedient and in the interests of justice" to entertain the point: Multicon at 645 (Mason P), quoting Water Board v Moustakas (1988) 180 CLR 491 at 497; [1988] HCA 12.
5. When considering that question, it has been said that "the finality of litigation and the importance of parties being bound to the cases they make at trial should never be overlooked": Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [38] (Allsop J, Drummond and Mansfield JJ agreeing), referring among others to Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 at 71. See also: TAL Life Ltd v Shuetrim; Metlife Insurance Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 at [166] (Leeming JA, Beazley P and Emmett AJA agreeing).

Amendment to the common questions

1. The appellant said that VW's criticism - that the common questions as framed by the parties and adopted by the primary judge do not raise the questions of GST and stamp duty - treats the procedural device of common questions as the master rather than the servant. This submission overlooks that Pt 10 of the Civil Procedure Act creates its own kind of "statutory estoppel" in s 179, as the similar provision in Part 4A of the Supreme Court Act 1986 (Vic), s 33ZB, was described in Timbercorp Finance Pty Ltd (in liquidation) v Collins (2016) 259 CLR 212; [2016] HCA 44 at [52] (French CJ, Kiefel, Keane and Nettle JJ).
2. Section 179 requires that a judgment given in representative proceedings must describe or otherwise identify the group members affected by it and provides that the judgment "binds all such persons" (subject to s 162 which is not presently relevant, concerning any person who has opted out of the proceedings). It is established that group members in a representative proceeding are only bound by the determination of the claims giving rise to the common questions, but not with respect to the plaintiff's individual claims: Timbercorp at [53].
3. The way the statutory scheme works to bind group members (as non-parties) to an order made by the Court in proceedings under Pt 10 of the Civil Procedure Act is by operation of s 179: Dyczynski v Gibson (2020) 280 FCR 583; [2020] FCAFC 120 at [249] (Murphy and Colvin JJ) and [391] (Lee J); Ethicon Sàrl v Gill (2021) 288 FCR 338; [2021] FCAFC 29 at [393] (Jagot, Murphy and Lee JJ). This is one of the reasons why it is critical for the orderly conduct of a representative proceeding that prior to an initial trial there is specificity in what common questions are being determined at trial: Gill v Ethicon Sàrl (No 3) [2019] FCA 587; (2019) 369 ALR 175 at [9] (Lee J). This occurred in the present case. The interlocutory decision and orders of Sackar J made on 21 June 2019, as varied on 22 May 2020, identified the common questions for determination at trial.
4. It is not in dispute, as VW submits, that questions 17, 19 and 20A articulated in detail the damages claimed on group members' behalf, and were carefully framed to facilitate a determination, on a common basis, of the heads of loss that were or were not claimable by the group members. The framing of the common questions in this case is to be distinguished from Scenic Tours, where Appendix C records that common question 12, relevantly, posed the broader question: "What heads of damage are recoverable for a claim for compensation under s 267 of the ACL?".

Ground 21: costs

1. The appellant did not advance any written or oral submissions in support of ground 21 which challenged the indemnity costs order made on 16 September 2021 relating to one aspect of the damages claim. This ground can be taken not to have been pressed.

Conclusion and Orders

1. The appeal has failed. There is no reason why costs should not follow the event: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.
2. I propose the following orders: 1. Appeal dismissed. 2. Appellant to pay the respondent's costs.
3. LEEMING JA: I agree with Gleeson JA.
4. WHITE JA: I agree with Gleeson JA.

SCHEDULE Question Answer Whether the Takata Airbags in each of the Recalled Vehicles have either or both: No. The Takata Airbags in each of the Recalled Vehicles do not, as a consequence of the use of ammonium nitrate in the propellant: 3 (a) a propensity to explode and/or a risk of exploding, thereby propelling metal shrapnel towards the occupants of the Defective Vehicle; (a) have a propensity to explode or a risk of exploding; (b) a propensity to malfunction and/or a risk of malfunctioning on deployment of the Takata Airbag, by deploying too rapidly and/or with excessive force; (b) have a propensity to malfunction or a risk of malfunctioning on deployment of the Takata Airbag, by deploying too rapidly or with excessive force. as a consequence of the use of ammonium nitrate in the propellant? hav As a result of the answer to Question 3 above, in respect of each model of the Recalled Vehicles: No. The fact that each model of the Recalled Vehicles was constructed with at least one Takata Airbag: 4 (a) are or were they not safe to drive; and/or (a) does not make any of those Recalled Vehicles not safe to drive and does not expose the driver or any passengers to any unnecessary danger or harm; (b) if driven, do or did they expose the driver or any passengers to unnecessary danger and harm, (b) did not in the past make any of those Recalled Vehicles not safe to drive and did not expose the driver or any passengers to any unnecessary danger or harm. attributable to their construction with at least one Takata Airbag? 10 Was any Recalled Vehicle acquired by a Group Member not of merchantable quality within the meaning of section 74D of the TPA at the time of supply to the Group Member by reason of the answers to Questions 3 to 5? No. By reason of the answers to questions 3 to 4, the Recalled Vehicles acquired by Group Members were of merchantable quality within the meaning of section 74D of the TPA at the time of supply to each Group Member. Whether a reasonable consumer fully acquainted with the state and condition of the Recalled Vehicles at the time of supply would not regard the Recalled Vehicles as: No. Given the answers to Questions 3 and 4, a reasonable consumer fully acquainted with the state and condition of the Recalled Vehicles at the time of supply would regard the Recalled Vehicles as: (a) acceptably fit for all the purposes for which goods of that kind are commonly supplied? (a) acceptably fit for all the purposes for which goods of that kind are commonly supplied; 11 (b) free from defects? (b) free from defects; and (c) safe? (c) safe. for the purposes of section 54 of the ACL. for the purposes of section 54 of the ACL. If the answer to Question 10 is "Yes", can the Group Members have suffered any loss of damage, in the form of a reduction in the "true value" of that Recalled Vehicle as at date of purchase, attributable to the Recalled Vehicle not being of merchantable quality, in circumstances in which: 17 (a) the Group Member has had the Recalled Takata Airbag in their Recalled Vehicle replaced at no cost for the replacement; or Given the answer to question 10, it is not necessary to answer this question. But given the answer to Questions 3, 4 and 10, Group Members have not suffered any loss or damage. In circumstances where the Takata Airbag in a Recalled Vehicle has been replaced at no cost, there is no difference between the purchase price of the Recalled Vehicle and the "true value" of that Recalled Vehicle at the time of purchase. (b) the Group Member is able to have the Recalled Takata Airbag in their Recalled Vehicle replaced at no cost for the replacement? 18 If the answer to Question 11 is "Yes", was any non-compliance with section 54(1) of the ACL only because of any act, default or omission of Takata Corporation (or its related entities, including TK Holdings Inc) and not because of any act, default or omission of the Defendant? Given the answers to Questions 3, 4 and 11, it is not necessary to answer this question. If the answer to Question 11 is "Yes", can the Group Members have suffered any loss of damage, in the form of a reduction in the "true value" of that Recalled Vehicle as at date of purchase, attributable to the Recalled Vehicle not being of acceptable quality, in circumstances in which: 19 (a) the Group Member has had the Recalled Takata Airbag in their Recalled Vehicle replaced at no cost for the replacement; or Given the answer to question 11 it is not necessary to answer this question. But given the answers to Questions 3, 4 and 11, Group Members have not suffered any loss or damage. In circumstances where the Takata Airbag in a Recalled Vehicle has been replaced at no cost, there is no difference between the purchase price of the Recalled Vehicle and the "true value" of that Recalled Vehicle at the time of purchase. (b) the Group Member is able to have the Recalled Takata Airbag in their Recalled Vehicle replaced at no cost for the replacement? Can the Group Members have suffered any loss or damage, in the form of disappointment, distress and / or anxiety, attributable: (a) If the answer to question 10 is yes, to the Recalled Vehicle not being of merchantable quality; (b) If the answer to question 11 is yes, to their Recalled Vehicle not being of acceptable quality; 20A (c) If the answer to question 15 is yes, to the misleading or deceptive conduct of the defendant; No. Given the answers to Questions 3, 4, 10, 11, 14 and 15, it is not possible for any Group Members to have suffered any loss or damage of the kind described in this question. in circumstances in which: (d) the Group Member has had the Recalled Takata Airbag in their Recalled Vehicle replaced at no cost for the replacement; or (e) the Group Member is able to have the Recalled Takata Airbag in their Recalled Vehicle replaced at no cost for the replacement?

Amendments 05 September 2023 - Formatting (Headnote) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 September 2023