Federal Court of Australia

Casey v General Motors Australia and New Zealand Pty Ltd [2025] FCA 772

ORDERS

THE COURT ORDERS THAT:

1.    The Respondent’s interlocutory application dated 2 April 2025 be dismissed.

2.    The Respondent pay the Applicant’s costs of the application.

3.    The Respondent file and serve a defence within 28 days of these orders.

4.    The matter be listed for a case management hearing at 9.30am on Thursday, 4 September 2025.

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

REASONS FOR JUDGMENT

ANDERSON J:

1.    Introduction

1    The respondent (GMANZ) applies for orders striking out the whole or, alternatively, a substantial majority of the further amended statement of claim (FASOC), as set out in its Interlocutory Application dated 2 April 2025.

2    In this representative proceeding, the applicant (Mr Casey) and group members seek damages pursuant to sections 271(1) and 272(1) of the Australian Consumer Law (ACL), for alleged non-compliance with the statutory guarantee of acceptable quality under s 54(1) of the ACL, and pursuant to s 236(1) of the ACL, for alleged misleading or deceptive conduct in breach of ss 18, 29 and/or 33 of the ACL.

3    Mr Casey advances those claims on behalf of himself and any person who:

(a)    during 1 January 2011 and 23 December 2024 (Relevant Period), in Australia, acquired (by purchase or lease), or obtained title to certain Holden vehicles (in the Colorado, Trailblazer, Commodore, Berlina, Calais, Holden Ute or Caprice ranges) which were first acquired new by a consumer on or after 1 January 2011 (Affected Vehicles); and

(b)    either:

(i)    acquired the Affected Vehicle from GMANZ, an authorised Holden dealership or other retailer (including used car dealers) other than by way of sale by auction, and other than for the purpose of re-supply; or

(ii)    acquired the Affected Vehicle other than for re-supply from a person who acquired the vehicle in the circumstances in (b)(i) above; or

(iii)    obtained title to the Affected Vehicle that another person had previously acquired in the circumstances described in (b)(i) above.

4    GMANZ attacks Mr Casey’s pleading of the failure to comply with the guarantee of acceptable quality under s 54 of the ACL. The complaint is that Mr Casey has failed to identify the specific defect said to be common to all Torque Converters and all Torque Converter Clutches across all of the Affected Vehicles.

5    GMANZ also attacks the pleas of actual knowledge in FASOC [45(c)] and agency in FASOC [4(c)(i)(B)].

6    GMANZ relies on the affidavits of its solicitor, Mr Christopher Pagent, dated 19 February 2025, 2 April 2025, 4 June 2025, and 18 June 2025. Mr Casey relies on the affidavits of his solicitor, Ms Kimi Nishimura, dated 16 May 2025 and 13 June 2025.

2.    General principles

7    Proper compliance with pleadings principles is a matter of procedural fairness. The function of a pleading is to state with sufficient clarity the case that must be met. A pleading defines the issues for decision and serves to ensure the basic requirement of procedural fairness that a party ought to have the opportunity of meeting the case against them: Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279, 286 (Mason CJ and Gaudron J); McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409; [1999] FCA 1101, [22] (Weinberg J).

8    A pleading must state the material facts on which a party relies, but not the evidence by which the material facts are to be proved: Federal Court Rules 2011 (Cth), r 16.02(1).

9    As observed by Middleton, Perram and Anastassiou JJ in Oztech Pty Ltd v Public Trustee of Queensland (2019) 269 FCR 349; [2019] FCAFC 102 at [31]:

Clarity in pleading is by no means an unattainable objective, even in the most complex litigation. Often the elements of a cause of action require careful and precise identification to ensure that the relevant integer is properly characterised having regard to the context in which the claim arose.

10    The Court may order that the whole or part of a pleading be struck out if, relevantly, a statement of claim is evasive or ambiguous, likely to cause prejudice, embarrassment or delay in the proceeding, fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading, or is otherwise an abuse of the process of the Court: Rules, r 16.02(2). Where a pleading omits material facts or pleads conclusions that are not supported by material facts, depending on the nature and degree of the omission, such deficiencies may be characterised as one or more of a failure to disclose a cause of action, evasive or ambiguous or likely to prejudice, embarrass or delay the proceedings: Pigozzo v Mineral Resources Ltd [2022] FCA 1166, [25(13)] (Feutrill J). Where substantial parts of a pleading are struck out, the Court may strike out the entire pleading on the basis that the “residue would be confusing”: Trade Practices Commission v Australian Iron & Steel Pty Ltd (1990) 22 FCR 305, 323 (Lockhart J).

11    The factors that tend in favour of the exercise of the power to strike out include that striking out may make a trial unnecessary or may substantially reduce the burden of preparing for a trial or the burden of the trial itself. Such considerations (including cost considerations) have particular application in the context of representative proceedings given the costs of such proceedings can be large as they typically involve claims brought on behalf of a large number of group members based on wide-ranging events: Reilly v Australia and New Zealand Banking Group Limited (No 2) [2020] FCA 1502, [14] (O’Bryan J).

12    As Moshinsky J said in Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) (2017) 123 ACSR 223; [2017] FCA 1202, at [17], a proper pleading is critical in assisting courts to achieve the overarching purpose of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.

3.    The central deficiency: the “design flaw” and the “propensity to experience problems” of Affected Vehicles

3.1    Submissions

13    GMANZ submit that the central pillar of Mr Casey’s claims is the allegation that there was a “design deficiency” in the Torque Converter and Torque Converter Clutch in each of the Affected Vehicles. That “design deficiency” is said to be pleaded at paragraph 16 of the FASOC. It forms the basis upon which Mr Casey claims that each vehicle was not of acceptable quality within the meaning of s 54 of the ACL: FASOC [40]-[41].

14    It also forms the basis upon which Mr Casey claims that the “Vehicle Representations”, the “Future Vehicle Representations”, and the “Omissions Conduct” (as those terms are defined in the FASOC) constitute contraventions of ss 18, 29 and 33 of the ACL: FASOC [23], [27], [32], [43]-[45].

15    Paragraph 16 and 17 of the FASOC are expressed in the following terms (without reproducing the underline and strikethrough used to reflect amendments made to the FASOC):

16    The Torque Converter and Torque Converter Clutch in the Affected Vehicles, by reason of their design, were ineffective in coping with torsional vibrations during ordinary operation of the Affected Vehicles.

Particulars

(i)    That the design is ineffective in coping with torsional vibrations is to be inferred from the propensities alleged in paragraph 17, because the development of those propensities is an expected consequence of the inability of the Torque Converter and Torque Converter Clutch to limit, withstand or otherwise cope with torsional vibrations in performing the functions described in paragraphs 9, 11 and 15 above.

(ii)    Further particulars will be provided after (a) discovery and (b) expert evidence.

17    By reason of the design deficiency of the Torque Converter and Torque Converter Clutch in the Affected Vehicles as pleaded in paragraph 16 above, each of the Affected Vehicles has a propensity to experience one or more of the following problems: …

16    The balance of paragraph 17(a) to (s) refers to 19 individual alleged “problems” or symptoms, in respect of which particulars are set out for each in a separate schedule to the FASOC. It is alleged that “by reason of the design deficiency in the Torque Converter and Torque Converter Clutch … as pleaded in paragraph 16”, each of the Affected Vehicles has a propensity to experience “one or more” of those “problems” or symptoms identified in paragraph 17.

17    GMANZ submit that paragraphs 16 and 17 create a circular plea: paragraph 16 alleges that the design of the Torque Converter and the Torque Converter Clutch was defective or ineffective (which is said, by particulars, to be inferred from the propensities in paragraph 17); whilst paragraph 17 states that the propensities only arise by reason of the so-called “design deficiency”.

18    GMANZ submit that the substantive effect is a plea that is fundamentally devoid of any articulation of the facts, matters and circumstances that might explain what the “design deficiency” is in the Torque Converter and the Torque Converter Clutch that is alleged for each and every Affected Vehicle. GMANZ submit that not only does this approach fall foul of the general pleading requirements referred to above, but that it also cuts across the principles emanating from a range of authorities where “propensity” arguments have been advanced. GMANZ make the following submissions.

19    Firstly, GMANZ submit that Mr Casey’s case, as presently framed, is based on symptomology and is not apt to proceed as a representative proceeding. GMANZ rely upon the decision of Perram J in Capic v Ford Motor Company (No 3) [2017] FCA 771 (Capic (No 3)) where his Honour emphasised the distinction between the unacceptable quality of a vehicle being established on the one hand, by its “constellation of symptoms” and, on the other, by proving the “root cause” of those symptoms: Capic (No 3) at [8].

20    GMANZ refer to Perram J’s observations in Capic (No 3) at [11] that the “forensic difference between a class action based on symptomology and one based on aetiology” suggests that the former is “not apt to proceed as a class action”. As his Honour identified at [9], a class action grounded “only on the symptomology of each vehicle and without recourse to why it is that those symptoms occur” is likely to result in “the common issues of fact largely evaporat[ing]”. On that basis, Perram J accepted that if the matter was to proceed as a class action, it was necessary for the relevant defects to be said to be manifestations of some underlying difficulty common to the members of the class: Capic (No 3) at [6]-[12].

21    GMANZ submit that as a threshold matter, rather than relying upon symptomology, it is necessary in this class action for Mr Casey to clearly and precisely plead the “underlying difficulty” or “root cause” of the “design deficiency” alleged. GMANZ submit that such a plea would form the essential integer in assessing whether it is appropriate that the proceeding continue as a representative proceeding.

22    GMANZ submit that although paragraph 16 superficially purports to mount a case based on aetiology, the present articulation of the “design deficiency” (which is said to exist because of, and to be wholly inferred from, the propensities or symptoms alleged in paragraph 17) is, without more, a case based on symptomology which is not apt to proceed as a class action.

23    GMANZ submit that insofar as Mr Casey seeks to progress this case as a representative proceeding, it is incumbent upon him to clearly and precisely articulate the real and substantive aetiology alleged by reference to the “underlying difficulty” or “root cause” of the “design deficiency” that is said to be common to the Torque Converters and Torque Converter Clutches across each and every Affected Vehicle.

24    Secondly, GMANZ submit that not only does Mr Casey need to properly identify and plead the “underlying difficulty” or “root cause” of the alleged “design deficiency”, in doing so, Mr Casey is not permitted to define the “design deficiency” by both its root cause and the symptoms which it is said to generate or cause. In Capic (No 3) at [18]-[19], Perram J agreed with the proposition that “the defect in the vehicles, i.e., what makes them not of acceptable quality, cannot be both the defective transmission and the symptoms which it engenders. It must be one or the other”.

25    GMANZ submit that to the extent Mr Casey does advance a case based on aetiology, that case has been impermissibly conflated with a case based on symptomology. GMANZ refer particularly to paragraphs 18 and 19 of the FASOC which read as follows (again, having removed underlining used to reflect amendments to the FASOC):

18    Each Affected Vehicle supplied in the circumstances described in paragraph 1(b)(i) above had the design deficiency alleged at paragraph 16 above and the propensity to experience one or more of the problems described in paragraph 17 above at the time it was supplied.

19    By reason of the matters described in paragraphs 16 and 17 above, individually and cumulatively, and paragraph 18, the Affected Vehicles were defective at the time they were supplied in the circumstances described in paragraph 1(b)(i) above.

26    GMANZ submit that, by these pleas, Mr Casey seeks to contend that the Affected Vehicles were defective not only because of the “design deficiency” described in paragraph 16, but also because of the symptoms described in paragraph 17 which “individually and cumulatively” caused the defect.

27    Thirdly, GMANZ submit that, consistent with authority, the articulation of the “design deficiency” said to be common across all Torque Converters and Torque Converter Clutches in the Affected Vehicles (and, thus, to result in certain propensities in each Affected Vehicle) requires a specific or practical explanation of the design fault or error said to be present in the Torque Converters and Torque Converter Clutches.

28    GMANZ submit that in the present case, despite the plea in paragraph 16 of the FASOC that the Torque Converters and the Torque Converter Clutches across the Affected Vehicles were defective “by reason of their design”, it remains entirely unclear what it is that Mr Casey contends was deficient in the way in which the Torque Converters and the Torque Converter Clutches were designed, such that their physical characteristics were deficient and caused the propensities alleged at paragraph 17 of the FASOC. GMANZ submit that the reference in paragraph 16 to the Torque Converters and the Torque Converter Clutches being “ineffective in coping with torsional vibrations” does not assist as that statement does not identify the root cause or alleged common design deficiency. GMANZ submit that, to the contrary, it only refers to a broad symptom which is expressly stated to have arisen “by reason of their [defective] design”. GMANZ submit that while the FASOC sets out the material facts which are said to constitute the functions and physical characteristics of the Torque Converters and the Torque Converter Clutches, the FASOC fails to identify or explain the alleged common problem in the design, or the affected physical characteristics, alleged in all of the Torque Converters and Torque Converter Clutches.

29    GMANZ submit that in the circumstance of Mr Casey’s failure to properly identify and articulate the “design deficiency” alleged, despite multiple requests to do so, the Court ought to infer that the allegation has been made and is being pursued without a proper basis. GMANZ rely upon the observations of Gordon J in Andrews v Australia and New Zealand Banking Group Ltd (2011) 281 ALR 113; [2011] FCA 388 at [50], that “to permit a pleading which seeks to raise a factual controversy stand, when there is no factual basis on which the controversy is raised, would be to permit a new form of fishing for a defence. It should not be permitted.”

30    GMANZ submit that the failure to properly plead the alleged “design deficiency” has the effect that the FASOC is evasive or ambiguous, likely to cause prejudice, embarrassment or delay in the proceeding, fails to disclose a reasonable cause of action or is otherwise an abuse of the processes of the Court. GMANZ also submit that Mr Casey’s failure to identify and articulate the “design deficiency” may disguise what might be idiosyncratic claims incapable of determination on a common basis.

31    GMANZ submit that, given the foundational nature of the pleadings in paragraphs 16 and 17 of the FASOC, if those paragraphs are struck out, then it follows that other dependent paragraphs of the FASOC advancing the claims for breach of statutory guarantee and for misleading and deceptive conduct must also be struck out. GMANZ submits that the appropriate course is to strike out the entirety of the FASOC.

3.2    Consideration

32    For the reasons that follow, I do not accept GMANZ’s submission that Mr Casey, in paragraphs 16 and 17 of the FASOC, has failed to adequately plead the “design deficiency” in the Torque Converter and Torque Converter Clutch in the Affected Vehicles that forms the basis upon which Mr Casey claims that each vehicle was not of acceptable quality within the meaning of section 54 of the ACL.

33    I accept Mr Casey’s submission that in a propensity case such as the present the pleading in paragraph 16 and 17 is orthodox in its approach and is pleaded with sufficient clarity to put GMANZ on notice of the case that must be met.

34    GMANZ urge the Court to require a level of detail from the applicant at the pleading stage which is not required for GMANZ to understand the case that it is required to meet, that is not supported by authority, that is unfair given the information asymmetry that Mr Casey faces before discovery, and which would represent a significant departure from the approach of this Court to pleading a failure to comply with a guarantee of acceptable quality under s 54 of the ACL.

35    Critical to determining this application are the matters pleaded in paragraphs 16 and 17 of the FASOC. At paragraph 16, Mr Casey pleads the components of the Affected Vehicles which were defective, namely the Torque Converter and Torque Converter Clutch. He identifies their defect, being their “design” which rendered them ineffective in coping with torsional vibrations during ordinary operation. In Particular (i) to paragraph 16, Mr Casey identifies that the design of those components being ineffective in coping with torsional vibrations is to be inferred from the propensities alleged in paragraph 17 given that the development of those propensities is to be the expected consequence of the inability of the Torque Converter and the Torque Converter Clutch to limit, withstand, or otherwise cope with torsional vibrations in performing the functions of the components as described in the FASOC. At paragraph 17 of the FASOC, Mr Casey articulates that, by reason of these defects, each of the Affected Vehicles was prone to experience one or more of 19 expressly pleaded problems in subparagraphs (a) to (s) of paragraph 17.

36    Mr Casey submits, and I accept, that what GMANZ effectively requires of Mr Casey, at this stage of the proceeding, is to identify the underlying mechanism of the identified “root cause” of the pleaded propensities in a form and level of detail which has not previously been required of a pleading of non-compliance with s 54 of the ACL.

37    As outlined above, GMANZ submitted that there were three problems with the nature of Mr Casey’s pleading: first, that it frames a case based on symptomology that is not apt to proceed as a class action; second, that it impermissibly conflates the root cause with symptoms; and third, that it lacks a specific or practical explanation of the design fault or error said to be present in the transmission. Each contention will be addressed in order.

38    Firstly, I do not accept GMANZ’s submissions that Mr Casey has sought to mount a case based on symptomology rather than a case based on aetiology.

39    GMANZ has not submitted that the approach of Perram J in Capic (No 3) was wrong and ought not be followed. Indeed, GMANZ rely upon his Honour’s decision as the basis for their submission regarding the distinction between the unacceptable quality of a vehicle being established, on the one hand, by its “constellation of symptoms” and, on the other, by proving the “root cause” of those symptoms: Capic (No 3) at [8].

40    Mr Casey has brought a case based on aetiology rather than symptomology and has sufficiently identified, for the purposes of the pleading, what he says is the “root cause” of the Affected Vehicles’ propensity to experience one or more of the 19 problems identified in subparagraphs (a) to (s) of paragraph 17, namely that the Torque Converter and the Torque Converter Clutch were defective because of their design.

41    In reaching this conclusion, it is again helpful to consider how each element of the FASOC logically feeds into the next. The FASOC firstly identifies the function of the Torque Convertor and the Torque Convertor Clutch in coping with torsional vibrations as part of a detailed description of the operation of the components within the Affected Vehicles: FASOC [9(d)], [11(c)(ii)(B)]. The FASOC then alleges that each Affected Vehicle contained a defective Torque Convertor and Torque Convertor Clutch: FASOC [16]. The nature of the defect is then identified as the components being “ineffective in coping with torsional vibrations during ordinary operation of the Affected Vehicles”. The pleading further alleges that this defect existed “by reason of [the] design” of these components. That is, the defects in the identified components in each Affected Vehicle is not an isolated occurrence but, to adopt Perram J’s terms in Capic v Ford Motor Company of Australia Ltd (Form of Common Questions) [2020] FCA 884 at [3], are “manifestations of some underlying difficulty”. The FASOC then alleges that each of the Affected Vehicles, by reason of that defect, has a propensity to experience one or more of 19 problems.

42    In Capic (No 3), the form of the pleading for which leave to amend was sought and allowed “identifie[d] the problem as a defect in the transmission which caused, or had the propensity to cause, the seven identified mechanical difficulties”: Capic (No 3) at [14]. The proposed paragraph for which leave was sought to amend (and granted) was in the following terms:

20A    During the relevant period Affected Vehicles contained a defect (the Defect in the Affected Vehicles) in that the DPS 6-speed dry dual-clutch PowerShift transmission caused, or had a propensity to cause some or all of the following problems:

(1)    Delayed or harsh gear shifting during acceleration;

(2)    Sudden gear change or skipping gears, leading to shuddering, jerking, bucking or kicking of the vehicle;

(3)    Harsh transmission noise;

(4)    Unsteady and/or uncontrolled movement;

(5)    Transmission overheating and malfunction;

(6)    Loud engine noise;

(7)    sudden loss of power in ordinary driving conditions.

43    In the present case, Mr Casey has identified the problem as a deficiency in the design of the Torque Converter and Torque Converter Clutch within the automatic transmission of the Affected Vehicles to perform a particular function, namely to cope with torsional vibrations during the ordinary operation of the Affected Vehicles. Mr Casey has further linked that design deficiency to a propensity or proneness to identified problematic behaviours at paragraph 17, which alleges that “by reason of the design deficiency of the Torque Converter and the Torque Converter Clutch in the Affected Vehicles as pleaded in paragraph 16, each of the Affected Vehicles has a propensity to experience one or more of” 19 identified misbehaviours.

44    I accept Mr Casey’s submission that his claim is not that the Affected Vehicles lacked acceptable quality because they in fact manifested in one or more adverse consequences at some point during the life of each vehicle (which would be a claim based on symptomology). Rather, his case is that the Affected Vehicles were not of acceptable quality because, at the time of supply, they were defective due to a common flaw in the design of the Torque Converter and the Torque Converter Clutch which meant they all carried the same inherent propensity to manifest one or more adverse consequences identified in paragraph 17(a) to (s) of the FASOC: see Williams v Toyota Motor Corporation Ltd (Initial Trial) [2022] FCA 344 at [206] (Lee J).

45    Mr Casey also submits, and I accept, that contrary to GMANZ’s submissions, the FASOC does not raise a “superficial” plea of aetiology. That the defect can be inferred from the propensity for adverse consequences does not mean that the claim of non-compliance with the guarantee is based on symptoms that manifested in practice. The alleged defect exists whether or not the symptoms have manifested. I accept Mr Casey’s submission that in circumstances where there is an alleged defect for which an alleged propensity is an expected consequence, there is no difficulty in inferring the existence of the design defect from evidence of the propensity.

46    Turning to GMANZ’s second contention, I do not accept GMANZ’s submission that Mr Casey’s claim impermissibly conflates aetiology with symptomology. Mr Casey alleges that the problems in paragraph 17 arise from the defect identified at paragraph 16, being that, by reason of their design, the Torque Converters and Torque Converter Clutches were “ineffective at coping with torsional vibrations during ordinary operation of the Affected Vehicles”. This is an allegation of cause (ie, design defect) and effect (propensity). Just as in Capic (No 3), Mr Casey identifies the defect rendering the Affected Vehicles non-compliant with the guarantee of acceptable quality as a defective component and alleges that that defect renders the Affected Vehicles prone to identified problems.

47    In Capic (No 3), the proposed allegation which Ms Capic sought to introduce was that a defect in the transmission of affected vehicles caused or had a propensity to cause seven identified problems. Perram J stated, at [19], referring to the respondent’s submission that the relevant defect which made the vehicles not of acceptable quality could not be both the defective transmission and the symptoms which it engendered:

I agree with this submission. But the submission is well wide of the mark because it is not what either proposed paragraph 6A or 20A does. They allege a defect; being a transmission which causes, or which has the propensity to cause, particular difficulties… They allege that the symptoms arise from the identified defect and the identified defect is the transmission.

48    Perram J’s comments are equally applicable to the allegations raised in this proceeding by Mr Casey. Mr Casey has done as much as the applicant in Capic (No 3) did by way of pleading by specifying the defect alleged to render the goods not of acceptable quality.

49    GMANZ’s reference to paragraph 19 of the FASOC is also not of assistance. The allegation there raised is that the Affected Vehicles were defective because of the problematic transmission design and the propensity for one or more of the bad symptoms that this design entailed. The propensity for problems, as identified in paragraph 17 of the FASOC, are alleged to arise directly “by reason” of the design deficiency pleaded in paragraph 16.

50    Turning to the third and last issue identified by GMANZ, I accept Mr Casey’s submission that his form of pleading in this proceeding goes further than the degree of exactitude that the proposed pleading in Capic (No 3) attained. In the proposed pleading at issue in Capic (No 3), Ms Capic identified the component of the affected vehicles that was defective (the DPS 6-speed dry dual-clutch PowerShift transmission) but she did no more in elucidating what about those components was defective, other than to point to the propensities to mechanical problems which the alleged defects gave rise in the affected vehicles: Capic (No 3) at [13].

51    In the present case, Mr Casey’s pleading, by contrast, not only identifies the components of the vehicles that are said to be defective (being the Torque Converter and Torque Converter Clutch) and itemises the propensities to experience problems because of those defective components, it also pleads a further explanation of how the identified component was defective. Namely, the identified components are alleged, by reason of their design, to be “ineffective in coping with torsional vibrations during ordinary operation of the Affected Vehicles”: FASOC [16]. In this case, unlike in Capic (No 3), the pleading identifies for GMANZ not only which components are defective, and the propensities to which they give rise, but additional detail as to the nature of this defect (that is, above and beyond the asserted fact that it renders the vehicles prone to identified problems).

52    Mr Casey’s pleading descends to a greater level of detail in describing the defect than the proposed pleading in Capic (No 3). Mr Casey’s pleading alleges which component within the good was defective (the Torque Converter and Torque Converter Clutch), what propensities this defect entailed (listed in FASOC [17]), how that component was defective (it was ineffective in coping with torsional vibrations in ordinary operation), and how that defect is said to be common across the class (it is common because the components are common and the defect results from the components’ design).

53    What GMANZ, in effect, require Mr Casey to plead, is what it was about the design of the defective components that made them ineffective in coping with torsional vibrations during the ordinary operation of the Affected Vehicles, so as to generate the propensities identified in FASOC [17]. GMANZ submit that Mr Casey’s identification of the Torque Converters and Torque Converter Clutches being ineffective in coping with torsional vibrations fails to identify the “root cause” or alleged common design deficiency.

54    I do not accept GMANZ’s submission that an applicant must commit to a detailed explanation of the mechanics of how the defective component was defective, or to use the language submitted by GMANZ, of “what it is that the applicant contends was deficient in the way in which the Torque Converters and Torque Converter Clutches were designed, such that their physical characteristics were deficient and caused the propensities alleged: Respondent’s Submissions (RS) [35].

55    The authorities relied upon by GMANZ do not support its approach to pleading in this case.

56    GMANZ contend that “the articulation of the ‘design deficiency’ said to be common across all Torque Converters and Torque Converter Clutches in the Affected Vehicles (and, thus, to result in certain propensities in each Affected Vehicle) requires a specific or practical explanation of the design fault or error said to be present in the Torque Converters or Torque Converter Clutches”: RS [29]. GMANZ refer to Perram J’s observations in his Honour’s decision on liability in Capic v Ford Motor Company of Australia (2021) 154 ACSR 235; [2021] FCA 715 at [53] that:

where a case of unacceptable quality is pursued on the basis that the goods pose a risk of some kind, the qualities of the argument necessarily require an identification of some reason why the risks exist. Ordinarily, this will require some form of practical explanation of a problem in construction or design.

However, that is a statement about the evidence required at trial to prove the alleged defect, not what is required of the pleading. Perram J had addressed what was required at the pleading stage in Capic (No 3). The level of explanation GMANZ seeks in this proceeding goes well beyond the “root cause” that Perram J referred to, and which his Honour considered was sufficient in Capic (No 3).

57    GMANZ also rely on the decision of Courtney v Medtel Pty Ltd (2003) 126 FCR 219; [2003] FCA 36 (Sackville J), a propensity case concerning pacemakers under s 74D of the Trade Practices Act 1974 (Cth) (the predecessor to s 54 of the ACL). In particular, GMANZ refer particularly to how Sackville J’s reasoning in the case focused on the identification of the “physical characteristic” of the goods and the way they were manufactured (with yellow spool solder) which then resulted in an increased risk of failure. That case does not provide support for GMANZ’s approach to pleading on this application. In that case, in support of its claim of unacceptable quality, the applicant pleaded the following (Medtel at [28]):

At all material times, the Pacemakers were designed or manufactured in such a way or with such inputs or under such conditions that:

(a)    (i)    they were prone to accelerated battery depletion and consequential failure, whereby the Pacemaker may cease to function without any prior warning or indication; and

(ii)    their longevity indicators or measurements could not be depended upon to give a reliable estimate of the Pacemaker's remaining longevity; or

(b)    the possibility that they had the characteristics identified in subparagraphs (i) and (ii) above could not be excluded,

(each of the circumstances referred to in (a) and (b) being hereinafter referred to as ‘the [F]ault’).

58    In that case, the parties had agreed that the fundamental short circuit problem in the relevant pacemakers was due to electrochemical dendrites, however, they did not agree what caused the dendrites. The key question at trial was what was the source of the ionic contamination that allowed the relevant dendritic growth to occur: see Medtel Pty Ltd v Courtney (2003) 130 FCR 182; [2003] FCAFC 151 (Moore, Branson and Jacobson JJ) at [11]-[13] (Moore J). The ultimate finding establishing liability was reached at the conclusion of a seven-day trial, at which testifying experts differed in their opinions as to the source of ionic contamination. It was at the trial stage that Sackville J required such a level of exactitude and proof, not at the pleading stage. There was no requirement that the applicant plead the precise mechanism of the defect rendering the good not of acceptable quality with the precision for which GMANZ now presses in this application.

59    GMANZ also submit that the importance of the proper identification of the relevant “defect” was highlighted in the High Court’s decision in Williams v Toyota Motor Corporation Australia Ltd (2024) 419 ALR 373; [2024] HCA 38 (Gageler CJ, Gordon, Edelman, Steward, Gleeson, Jagot and Beech-Jones JJ). In particular, GMANZ refer to Gageler CJ, Gordon, Steward, Gleeson and Beech-Jones JJ’s observations at [33] that:

Section 54(2) posits a hypothetical inquiry as to what a reasonable consumer at the time of supply would regard as acceptable if the reasonable consumer was “fully acquainted with the state and condition of the goods”, including any “hidden defects”… The attributed knowledge of the defect must be knowledge that would render a reasonable consumer “fully acquainted” with the true state and condition of the goods; it follows that this must include full knowledge of or acquaintance with the defect, including later acquired knowledge of the propensity of the defect to occasion adverse consequences and the nature of those consequences, even if understandings of those matters vary over the period of time leading up to the trial.

60    GMANZ submit that the proper identification of the “defect” informs what knowledge of the state and condition of the good is to be attributed to the hypothetical reasonable consumer at the time of the relevant supply. GMANZ also submit that such identification is also necessary for many other questions typically arising in respect of claims brought under s 54, including to what extent damages are available under s 272 of the ACL, and in respect of a limitation defence under s 273 of the ACL, having regard to when an affected person first became aware, or ought reasonably to have become aware, of the “defect”.

61    While the High Court’s observations recognise the importance of attributing full knowledge of a “defect” to a reasonable consumer in the context of a claim under s 54, the High Court’s comments are not directed towards identifying what is necessary to be pleaded to bring such a claim. I do not view the High Court’s observations as supportive of the approach which GMANZ contend for.

62    The authorities surveyed by Jackman J in McLean-Phillips v Carnival plc t/as P&O Cruises Australia [2023] FCA 328 at [18]-[21] do not provide support for GMANZ’s approach in the present application, nor does GMANZ’s reference to the Victorian Court of Appeal’s decision in Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338.

63    GMANZ’s submission in the present application is that unless Mr Casey can specify at the first return of his originating application the precise mechanical, metallurgical or engineering explanation for why the relevant Torque Converter and Torque Converter Clutch were ineffective in coping with torsional vibrations during the ordinary operation of the Affected Vehicles, then his case should be struck out. No authority identified by GMANZ supports this approach. It would require an applicant to be able to provide in their pleading the essential reasoning of what is ultimately expected to be the subject of expert evidence and to do so in circumstances in which no discovery has occurred. Mr Casey submits, and I accept, that the practical vice of the approach now contended by GMANZ is further compounded because, in this case, as will almost always be the case in a circumstance in which a plaintiff is suing a manufacturer for a defect in the design or manufacture of goods, there is a significant information asymmetry and the defendant or respondent, who is the manufacturer, will have access to all of the information that will need to be considered by an expert to test and then produce the explanation that will ultimately be required at trial so as to lead to the necessary findings of fact.

64    For these reasons, GMANZ’s challenge to Mr Casey’s pleading of contravention of s 54 of the ACL must be rejected.

4.    Plea of actual knowledge: FASOC [45(c)]

65    For the purpose of Mr Casey’s misleading or deceptive conduct claims, he alleges at paragraph 45(c) of the FASOC (again, having removed underlining used to reflect amendments to the FASOC) that:

[F]rom a date not presently known by the applicant, GMANZ has known of the design deficiency alleged at paragraph 16 and the propensity of the Affected Vehicles to experience one or more of the problems described in paragraph 17 above.

66    Mr Casey thereby alleges that GMANZ had actual knowledge of both the “design deficiency” alleged in paragraph 16 of the FASOC and the “propensities” alleged in paragraph 17 of the FASOC.

67    In this context, the particulars to paragraph 45(c) of the FASOC state as follows:

Particulars

(i)    Knowledge of this matter can be inferred from GMANZ’s manufacture of the vehicles and/or from the content of warranty claims and customer complaints GMANZ received in respect of certain Affected Vehicles.

(ii)    Further particulars may be provided following discovery and lay evidence.

68    GMANZ refer to r 16.42 and 16.43(1) of the Rules which require a party pleading misrepresentation or a condition of mind to state in the pleading particulars of the facts on which the party relies.

69    GMANZ submit that it is not reasonably arguable that one should infer, from the mere manufacture of vehicles, the specific knowledge alleged. It also submits that it is no less speculative to seek to draw inferences from the reference to warranty claims and customer complaints in circumstances where, despite GMANZ’s requests, Mr Casey has not produced any warranty claims or customer complaints referred to in the plea.

70    GMANZ submit that the plea of actual knowledge is entirely speculative and lacks the factual foundation from which it is reasonably arguable that the Court should infer that GMANZ had actual knowledge of the specific design deficiency and the propensities alleged in the proceeding.

71    The affidavit of Ms Nishimura affirmed 13 June 2025 annexes a letter from Maurice Blackburn to Corrs Chambers Westgarth which provided further particulars to paragraph 45(c). The further particulars make reference to complaints made by consumers concerning Affected Vehicles on various online forums, the content of certain online videos, a number of Technical Service Bulletins issued in the US by General Motors LLC, extracts from the US Department of Transportation National Highway Traffic Safety Administration Database, and certain articles in an automotive magazine said to be located in San Antonio, Texas. GMANZ submitted that the further particulars also failed to provide a proper factual foundation for the allegations, including by reason that much of the material was published and relevant to the US such that they could not ground a plea of actual knowledge of GMANZ, and that there was no basis to suggest that GMANZ accessed the online forums which Mr Casey referred to.

72    While some criticisms may be levelled to the particulars provided in respect of FASOC [45(c)], I am not satisfied that it is appropriate to strike out the paragraph. The further particulars provided by Mr Casey identify publicly available information about complaints made in relation to Affected Vehicles. Mr Casey seeks to use such information, in the context of his inferential case, to prove actual knowledge. I reject GMANZ’s submission that Mr Casey’s claim is entirely speculative and lacks the factual foundation to reasonably argue that the Court should infer that GMANZ had actual knowledge.

73    While GMANZ has identified issues that Mr Casey will be required to grapple with in order to successfully bring his case of actual knowledge, as senior counsel for Mr Casey acknowledged during the hearing, the case will become more developed over time, including following discovery. GMANZ submit, and I accept, that it is appropriate to have regard to the following observation of Beach J in Webster (Trustee) v Murray Goulburn Co-Operative Co. Limited (No 2) [2017] FCA 1260 at [6]:

Given information asymmetry as between the parties concerning the state of mind of one of them, where the pleadings are at an early stage and before discovery, so long as some particulars of knowledge are given so as to demonstrate that the plea of knowledge is not wholly speculative, it may be appropriate to allow a plea of knowledge to go forward on the basis that full particulars of knowledge will be provided after discovery, reserving to the other party the right to seek a strike out or summary dismissal of the pleaded cause of action relying upon that knowledge at that later stage if that turns out not to be the case.

74    For these reasons I will not strike out paragraph 45(c) of the FASOC

5.    Plea of agency: FASOC [4(c)(i)(B)]

75    In paragraph 4(c)(i)(B), the FASOC alleges that GMANZ was the manufacturer of certain affected vehicles by reason of those vehicles having been imported into Australia on its behalf by General Motors do Brasil (GM Brazil). The relevant paragraph in the FASOC is as follows:

4    GMANZ is, and throughout the Relevant Period was:

…

(c)    the manufacturer of the Affected Vehicles, within the meaning of section 7 of the Australian Consumer Law (ACL) (being Schedule 2 of the CCA), in that:

(i)    in relation to the Colorado Vehicles and the Trailblazer Vehicles:

(A)    GMANZ imported the Colorado Vehicles and Trailblazer Vehicles into Australia; or

(B)    In the alternative to (A) above, those vehicles were imported into Australia on behalf of GMANZ by General Motors do Brasil;

76    GMANZ submit that the plea of agency is vague and embarrassing as no basis for, and no scope of, that agency has been properly pleaded: BCI Media Pty Ltd v Corelogic Australia Pty Ltd [2022] FCA 1128 at [30] (Yates J). GMANZ submit that it is not sufficient simply to allege an agency relationship, “without reference to the scope of the particular agency and the facts that lead to the conclusion that the conduct of which the complaint is made of the agent is conduct for which the principal would be liable”: Investec Bank (Australia) Ltd v Colley (2012) 91 ACSR 597; [2012] NSWSC 813 at [232] (Ward J).

77    The plea of agency was introduced into the FASOC in response to GMANZ’s assertion that it was not the importer of Trailblazer Vehicles and was not the importer of Colorado Vehicles after 2 September 2015: Letter from Corrs Chambers Westgarth to Maurice Blackburn, 14 February 2025. Mr Casey submits that GM Brazil, rather than GMANZ, sought type approval in respect of some Colorado and Trailblazer Vehicles under the Motor Vehicle Standards Act 1989 (Cth). Mr Casey submits that the fact that GM Brazil sought and obtained type approval, which is required to import a vehicle into Australia, where GMANZ denies importing the vehicles, indicates that GM Brazil was the importer of the vehicles. Mr Casey submits that in the above circumstances, and where he was unable to identify any record that GM Brazil had any operations or presence in Australia, it is to be inferred that GM Brazil imported the vehicles into Australia for and on behalf of GMANZ.

78    To the extent that GMANZ is unclear on the basis for the allegation of agency, it can request further and better particulars. I do not propose to strike out the plea of agency in paragraph 4(c)(i)(B) of the FASOC.

6.    DISPOSITION

79    The respondent’s interlocutory application, filed on 3 April 2025, will be dismissed. The respondents will pay the applicant’s costs of the application. The respondent will file and serve a defence to the FASOC within 28 days of the date of these orders.

Associate:

Dated:    11 July 2025