FEDERAL COURT OF AUSTRALIA

Capic v Ford Motor Company of Australia Limited (No 7) [2018] FCA 1631

ORDERS

THE COURT ORDERS THAT:

    Prayers 1-3 and 6-10 of the interlocutory application filed on 3 July 2018 be dismissed with costs.

    The Applicant file any application for costs against Bannister Law within seven (7) days.

    The matter be listed for a case management hearing on 13 November 2018 at 9.30am.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1    The lead applicant in this representative proceeding applies for leave to file a third further amended originating process (‘3FAOP’) and a corresponding statement of claim (‘3FASOC’). The proceeding involves vehicles with an allegedly defective transmission. These reasons assume a familiarity with the six previous interlocutory judgments in this matter.

2    The Applicant also sought discovery orders (prayers 4 and 5) and injunctive relief (prayers 6-10) against the Respondent (‘Ford’). The parties agreed that the discovery dispute should occur after the amendment application is determined. The application for injunctive relief was mostly withdrawn after the hearing.

3    The amendment application should be refused with costs.

Pleading amendments

4    Ford took particular issue with four aspects of the proposed 3FAOP and 3FASOC: changes to the group definition, the pre-purchase representation cases, the post-purchase representation cases and a new allegation of unconscionable conduct.

Group definition

5    The group is presently defined in ¶1 to comprise, in part, persons who acquired one of the affected vehicles in the period January 2011 to 11 May 2016 and, if the amendments be allowed, from January 2011 to 24 August 2018. I see no reason why that amendment should not be permitted. Since it operates analogously to the addition of a new party, however, the addition of the new group members should be effective from the date of the amendment: Ethicon Sàrl v Gill [2018] FCAFC 137 at [47]-[48], [51] per Allsop CJ, Murphy and Lee JJ.

6    Another part of the class definition is that the persons in it should have suffered loss and damage. This appears in both the 3FASOC and its predecessor and is not, therefore, an amendment. I reject Ford’s submission that the Court should refuse leave to include this aspect of the definition. Leave is not being sought and hence cannot be refused.

7    A further aspect of the current group definition is that it includes the purchase of any affected vehicle in the given date range which necessarily includes second-hand vehicles. Across the period 2011-2016 (and up to 2018 on the proposed amendments) this means every owner of any given vehicle will be a group member (as long as they meet the other criteria), i.e., one vehicle may be related to several group members (its successive owners across the date range). This is, therefore, a representative proceeding in relation to vehicles purchased both new and second-hand.

8    The 3FASOC includes a definition of a subgroup which consists of ‘Customers’ who made complaints to Ford about their vehicles (¶6AD). The 3FASOC calls this the ‘Complaints Subgroup’. The pleading defines ‘Customers’ in ¶6(d) to mean persons who bought affected vehicles from a Ford dealer to whom it had been supplied by Ford. Although there may be some second-hand sales by Ford involved in that definition, most persons who acquire an affected vehicle second-hand will not meet the definition of ‘Customer’. So although the main proceeding is concerned with both new and second-hand vehicles, the Complaints Subgroup consists only of persons who bought their vehicles from Ford dealers and does not include any second-hand purchasers from persons other than Ford dealers. These distinctions are relevant to the representation cases which are sought to be pleaded.

Pre-purchase representations

9    The 3FASOC seeks to include amendments which raise two new representation cases. The first comprises representations which it is alleged Ford made to all group members (and the general public) and in reliance upon which it is said that group members acquired their vehicles (or more precisely an interest in their vehicles). These representations necessarily preceded the acquisition of the vehicles. The second consists of representations alleged to have been made after the vehicles had been acquired and only to the Complaints Subgroup. By reason of the matter explained above, there are no second-hand purchasers in this subgroup except where the vendor was a Ford dealer.

10    The pre-purchase representations were, by the time of the hearing of this application, alleged to be implied. They were referred to in the 3FASOC as the Vehicle Representations and the Transmission Representations. The issues arising from both are the same and attention may be confined to the Vehicle Representations which are set out at ¶7A. The Vehicle Representations were exhaustively pleaded but, in their essence, were that Ford had from 2011 represented continuously (¶7C) to the Applicant, Group Members and the general public (¶7B) that the vehicles in question were of good quality or of at least typical quality. This implied representation arose from a number of particularised matters which may be loosely summarised as being that Ford advertised and sold the vehicles and at particular prices.

11    I do not think that there is any prospect of establishing that such an implied representation as particularised was made by Ford to the purchasers of second-hand vehicles from persons other than Ford. Otherwise, however, there is no problem. In its current from ¶7A should not be permitted nor should the Transmission Representations in ¶7F.

Post-purchase representations

12    Turning then to the post-purchase representations, these were three. Ford was alleged to have told customers who had purchased affected vehicles from it or its dealers (and who by reason of the subgroup definition, had complained) that:

    the problem was with the way the customer drove the vehicle rather than with the vehicle itself (the Driving Style Representation);

    the vehicle could be fixed in a certain way when in truth it could not (the Issues Remediable Representations); and

    customers could not get a refund when in truth as a matter of law they could (the No Refund Representation).

13    The first two of these were alleged to have been made to Customers or Ford dealers (who presumably passed them on to Customers) (¶¶8AC and 8AD). The third was expressly said to have been made to the Complaints Subgroup (¶8AJJ). At ¶8FF it is alleged that the Applicant and the Complaints Subgroup relied on these three representations in taking various steps such as having the vehicle serviced. The wording of ¶8FF is problematic:

‘…the Applicant and the Complaints Subgroup relied on the Driving Style Representations, the Issues Remediable Representations and/or the ‘No Refund’ Representations (or any of them when):’

14    This wording means that it is not possible to say which of the three representations the Complaints Subgroup relied on then beyond the fact that it was ‘any of them’.

15    The consequence is that the pleading of the Complaints Subgroup in the 3FASOC has these features:

(a)    it is defined to consist of persons who purchased an affected vehicle from a Ford dealer after 2011 and who had complained to Ford or its dealers (¶6AD);

(b)    the No Refund Representation was made to the Complaints Subgroup (¶8AJJ);

(c)    the Driving Style and Issues Remediable Representations were made to Customers, that is, people who bought the vehicles from Ford in the relevant period but those people need not have complained and hence need not be in the Complaints Subgroup (¶¶8AC and 8AD);

(d)    the Complaints Subgroup relied upon at least one of the three post-purchase representations although which is unknowable (¶8FF).

16    On the way in which the subgroup definition and representation cases are pleaded, it is possible therefore that:

(e)    the Driving Style Representation and the Issues Remediable Representations were not made to any member of the Complaints Subgroup (because a Customer need not have made a complaint – proposition (c) above);

(f)    there are members of the Complaints Subgroup who need not have relied on the No Refund Representation which was, however, actually made to them (propositions (b) and (d)); and

(g)    there are members of the Complaints Subgroup who relied on a representation which need not have been made to them (propositions (c) and (d)).

17    This will not do. The Complaints Subgroup must be defined so that the claims of the persons in it are in respect of, or arise out, of the same or similar circumstances and their claims must give rise to substantial common issues of law or fact: Federal Court of Australia Act 1976 (Cth) s 33C(1)(b)-(c). This is not to require identicality but nevertheless there must be at least a common nucleus of facts and legal issues: Green v Barzen Pty Ltd (formerly Dukes Financial Services Pty Ltd) [2008] FCA 920 at [13] per Finkelstein J.

18    The definition of the Complaints Subgroup does not meet this standard. The only common features of the Complaints Subgroup are that the members purchased (or acquired interests in) vehicles from Ford or its dealers and that they complained about them together with the allegation at ¶8AJJ that the No Refund Representations were made to them. And, although one knows that every member of the Complaints Subgroup relied on at least one of the three post-purchase representations one cannot know which. I do not accept, as the Applicant submitted I should, that this problem could be ignored and addressed if and when the Court came to specify the common questions for the trial. For those reasons, I would not allow the post-purchase representation cases to be added until such time as the subgroup definition is put in order.

19    There are also real problems of comprehensibility in particularising the subgroup by cross-referencing it to the Statement of Agreed Facts (‘SAF’) filed in proceedings resolved by Middleton J entitled Australian Competition and Consumer Commission v Ford Motor Company of Australia Limited [2018] FCA 703 (‘ACCC proceeding’). I accept Ford’s complaint in that regard.

20    Objection was also taken to ¶¶6AD-6AG. These paragraphs are drawn with date ranges which do not match the date ranges in the particulars with which they are accompanied. This should not be permitted and will need to be rectified.

21    There was an additional problem with ¶6AG which has been drafted by reference to the SAF in the ACCC proceeding. ¶6AG deals with complaints made by customers to Ford. ¶6AG(f), however, is particularised by reference to ¶35 of the SAF which is concerned with complaints made to the ACCC not Ford. Allegation ¶6AG(f) should not be permitted to proceed in this condition.

Unconscionable conduct

22    The next set of amendments under challenge were ¶¶31AAA-31E. These paragraphs brought into the case for the first time an allegation of unconscionable conduct. I will not set them out in full. The essence of the allegations may be summarised this way. The claim is not about the defective vehicles themselves nor about the alleged misrepresentations which led customers to purchase them. Instead, it is an allegation that Ford handled post-purchase complaints about the vehicles in a manner which was unconscionable. This is a new case arising out of different facts to those upon which the case has rested up until now. If leave is granted to raise this case, it should take effect only from the date of the amendments.

23    Ford submitted that leave to amend should be refused because:

    the pleading did not make clear whether the Applicant was relying on an unconscionable pattern or system or whether what was intended was individual claims of unconscionable conduct;

    it was not sufficient to particularise the claim by cross-references to the SAF; and

    various parts of the allegations were vague.

24    I do not think there is any substance in the first complaint. The Applicant has not pleaded that Ford had a pattern or system so ¶¶31AAA-31E do not contain such an allegation. During argument, Ms Roughley, for the Applicant, suggested that although no pattern was pleaded the facts alleged were consistent with such a case and the Applicant did not have to choose. I do not agree. One of the points of a pleading is to avoid surprise. If the Applicant does not allege a pattern I will not permit such a case to advance.

25    The second complaint, in substance, concerns the range of dates over which the allegation of unconscionable conduct is made. The case at ¶¶31AAA-31E is particularised by reference to the admissions made by Ford in the SAF. The Applicant, by the 3FASOC, signals her intention to prove this part of her case by tendering the relevant portions of the SAF. No other method of proving the allegations is suggested. The unconscionability allegations reach their ultimate expression in two allegations which are in the alternative. The first (¶31E) is that Ford engaged in unconscionable conduct across the date range which Ford has admitted to in the SAF, i.e., the short period between 1 May 2015 and 29 February 2016. There is no difficulty with this from the point of view of the particulars which correspond. However, there is a difficulty with ¶31E because it pleads that the conduct was done to the Complaints Subgroup, which is defined in ¶¶6AD and 6AF as ‘Customers’ who made a complaint to Ford, and ‘Customers’ in turn is defined in ¶6(d) as people who bought vehicles from Ford in the period January 2011 and 28 August 2018 (¶1). Obviously, that does not work having regard to the SAF because the dates do not correspond. In this form, it cannot go forward.

26    The second unconscionability allegation is at ¶31D. It is the same allegation as at ¶31E except this time the date range alleged matches the class definition. The price paid for that, however, is that it is no longer supported by the particulars from the SAF.

27    As they currently stand, neither ¶¶31D or 31E work. I would not grant leave to amend to add them. Since the only point of ¶¶31AAA-31E is to lead to the ultimate conclusions in ¶31D-31E, there is no point to the whole section. For completeness, I reject Ford’s argument that the word ‘guidelines’ in ¶31B(c) is too vague. It is Ford’s word from the SAF.

28    For all of those reasons, the Applicant should not be permitted to file the 3FASOC. Since the 3FAOP is intimately linked to the 3FASOC leave for its filing should also be refused.

Injunction

29    At the hearing the Applicant also sought an injunction to restrain Ford from communicating with clients of Bannister Law. The application was withdrawn on 20 October 2018. The Applicant also sought an injunction restraining Ford from communicating with unrepresented group members. Whilst it is unclear whether this was pressed at the hearing, the terms of the relief sought nothing which was not already happening and therefore should be dismissed.

30    Ford is entitled to its costs of the application for injunctive relief. If the Applicant wishes to seek some form of costs order against Bannister Law it should do so within seven days hereof.

Orders

31    The orders I make are:

1.    Prayers 1-3 and 6-10 of the interlocutory application filed on 3 July 2018 be dismissed with costs.

2.    The Applicant file any application for costs against Bannister Law within seven (7) days.

3.    The matter be listed for a case management hearing on 13 November 2018 at 9.30am.

Associate:

Dated:    31 October 2018