Monday, April 22, 2024

NZ files class action suit over defective Toyota utes

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The class action relates to the diesel particulate filter system failing to operate properly, impacting at least 35,000 models sold in NZ.
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Thousands of farmers may be eligible to participate in a class action being taken against Toyota for a fault in the engine of its utes that has already cost the auto giant a $1 billion-plus lawsuit across the Tasman.

The New Zealand branch of Australian law firm Shine Lawyers is leading the charge against Toyota New Zealand, having filed an application in the Palmerston North High Court to pursue a lawsuit that relates to at least 35,000 Toyota Hilux, Prados and Fortuner models sold in NZ between October 2015 and 2020. 

The suit centres on the same issue that cost Toyota Australia a court case. It relates to the ute’s diesel particulate filter (DPF) system failing to operate properly, resulting in some vehicles emitting foul-smelling white smoke, delivering lower engine efficiency and performance.  

The DPFs are in place as a pollution control device, burning off pollutants and harmful emissions. Shine will be representing owners of the vehicles that are powered by the 1GD-FTV or 2GD-FTV 2.8 litre diesels manufactured after October 1 2015.

The Australia class action filed in 2019 resulted in the court ruling in favour of the vehicles’ 250,000 owners putting a value on the damages of 17.5%, or over A$2.5 billion. ($2.7bn)  This would have made it the largest damages claim in Australian consumer history.

Toyota appealed the decision. Its appeal was declined earlier this year, but the judge reduced the damages liability to 10% of the vehicles’ value, amounting to about A$1bn on vehicles manufactured between 2015 and 2020. This represents a value of about A$5000 per vehicle.

The automaker was found to be in breach of consumer law in Australia, having engaged in misleading or deceptive conduct in the marketing of the vehicles with the faulty DPF during their sale, impacting on the value of the affected vehicles. 

The court did, however, acknowledge that Toyota found an effective fix for the problem in May 2020, offered free to owners and extended the warranty on the vehicles to 10 years.

Shine Lawyers senior associate Hamish Davies said the action was being funded by a specialist litigation funding company, Courthouse Capital.  He said he was somewhat surprised that legal action had not kicked off sooner in NZ.

He confirmed the company sought to repeat the outcome of the case in Australia.

“The DPF is required meet environmental standards, it’s a serious part of the vehicle and the consequences of a defective one in Australia were quite significant. It can damage the engine, emit white smoke and affect fuel efficiency.”

Toyota has the opportunity to file a defence against the action over the next fortnight. 

Davies noted that in appealing the court’s decision in Australia, Toyota never disputed the fault with the vehicles, only the amount that fault had been valued at. 

A Toyota NZ spokesperson said the company has been and remains committed to assisting any customer whose vehicle experiences a DPF issue and continues to provide any related repairs free of charge.

“This has been our position to date, and we will defend the class action.” 

As the matter is now before the court, the company had no further comment.

The law firm has set up a registration log for owners wanting to register, but Davies was unable to say how many had registered at this point. 

Hilux has long been a popular farm vehicle choice for farmers and defended a long-held reputation as the country’s No 1 four-wheel drive until 2015. 

Since then, Ford Ranger has knocked it off its perch, and continues to be the country’s No 1 seller.

Davies acknowledged class actions in NZ are relatively rare, with NZ’s court system less geared to such actions.

The last significant class action affecting the rural sector was when kiwifruit growers successfully took the Crown to court over its management that led to the Psa outbreak. That action resulted in an out-of-court settlement of $40 million.

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