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Federal Court of Australia makes first aggregate damages award in a funded representative proceeding in Toyota Class Action

June 9, 2022

Federal Court of Australia makes first aggregate damages award in a funded representative proceeding in Toyota Class Action

The following piece was contributed by Martin del Gallego and Matthew Harris of Australian law firm, Piper Alderman. This article considers a recent decision of the Federal Court of Australia, awarding damages to class action claimants on an aggregate basis.  Aggregate damages is a rare global award which covers all group members described or identified in the award.  This was the first instance of aggregate damages being awarded to a funded litigant in Australia, and may spur a trend in representative claims brought on this basis. In Williams v Toyota Motor Corporation Australia Limited (Initial Trial) [2022] FCA 344, Justice Michael Lee relied on s 33Z(1)(e) of the Federal Court of Australia Act 1976 (Cth) (the Act) to award damages to group members in possession of certain Toyota vehicles throughout the entirety of the claim period, calculated as the percentage reduction in value of their vehicle or vehicles.  It has been estimated that Toyota’s total aggregate damages bill may exceed AU$2 billion. Key Takeaways
  • For an order of aggregate damages to be made in a representative proceeding, the Court needs to be satisfied on a principled basis with which to assess and distribute the relief;
  • The analysis must be informed by general principles governing the assessment of damages, and can result in an award of aggregated damages applying to a specific class of group members within a representative proceeding;
  • While the judgment is liable to spur a trend in claims for aggregate damages, precisely how such an award will impact the approval of legal costs and a funder’s commission remains to be seen.
Background to the proceedings The case before the Court concerned claims relating to Toyota’s supply of 264,170 defective diesel vehicles to Australian consumers between 1 October 2015 and 23 April 2020 (Relevant Period).  These vehicles were fitted with diesel combustion engines and a ‘diesel exhaust after treatment system’, or ‘DPF’, aimed at reducing harmful pollutants and other emissions from the engine.  The case alleged that the vehicles were defective because the DPF was not designed to function during all reasonable driving conditions, and even if driven normally, there was a propensity for the car’s exhaust to emit excessive white smoke and malodour, and cause reduced fuel efficiency and trigger ‘excessive’ notifications prompting the need for service or repair. In alleging that the vehicles were not of ‘acceptable quality’ in breach of the statutory guarantee under s 54 of the Australian Consumer Law (ACL), and that Toyota’s conduct had been misleading and deceptive in contravention of ss 18, 29(1)(a) and (g), and 33 of the ACL, the lead applicant sought two types of damages under s 272 of the ACL:
  • Under s 272(1)(a), damages for the reduction in value of each relevant vehicle resulting from the failure to comply with s 54 of the ACL; and
  • Under 272(1)(b), other reasonably foreseeable loss or damage incurred as a result of the defect and failure to comply with s 54 of the ACL, including excess taxes, fuel consumption, financing costs, servicing costs and lost income.
Of these heads of damage, only two were suitable for determination at the initial trial of the lead applicant’s claim:  the ‘reduction in value’ damages under s 272(1)(a) and damages for excess GST paid by group members in connection with acquiring the relevant vehicles under s 272(1)(b).  (A separate question had been asked and answered in an earlier interlocutory application in the case, clearing the way for a potential aggregate damages award, in respect of only part of the lead applicant and group members’ claims.[1]) Aggregate Damages Having found in favour of the lead applicant, on among other things, their ‘acceptable quality’ cases, Justice Lee also found that the same determinations could be made on a common basis for the remainder of group members.  His Honour found that the lead applicant and group members were entitled to damages for the reduction in value of their vehicles, and for excess GST paid in connection with that reduction.  Accordingly, it was necessary for his Honour to determine a principled basis for arriving at a quantum of the reduced value which could be applied on an aggregate basis to all relevant group members. The Federal Court’s power to award damages on an aggregate basis is found in s 33Z of the Act. This section provides, among other things, that the Court may, in determining a matter in a representative proceeding, make an award of damages for group members, sub‑group members or individual group members, being damages consisting of specified amounts or amounts worked out in such manner as the Court specifies,[2] or award damages in an aggregate amount without specifying amounts awarded in respect of individual group members.[3]  Further, subject to section 33V of the Act, the Court is not to make an award of damages under s 33Z(1)(f) unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment.[4] Noting that class actions were not the ‘Galapagos islands’ of litigation, Justice Lee observed that an award of damages, even on an aggregate basis, was subject to two overarching principles as to the award of compensatory damages.[5]  His Honour observed that an award of compensatory damages must be considered in the light of the overriding compensatory principle, and that even where the process of estimating damages is difficult, the Court ‘must do what it can’, this principle equally applying to an assessment of ‘reduction in value’ damages. Justice Lee found that the Court is not permitted, by s 33Z of the Act, to take an approach of awarding aggregate damages on a per vehicle basis and determining the separate question of distribution at a later stage. Because of this, his Honour was faced with a challenge of how to distribute relief to group members who had possessed the relevant vehicles for only part of the Relevant Period.  His Honour termed these group members as ‘Partial Period Group Members’ and concluded at [432]: The bottom line is that without knowing the price at which, or the time at which, the Partial Period Group Members bought and sold Relevant Vehicles on the secondary market, one cannot determine on a principled basis how the compensation for the owners of those Relevant Vehicles ought to be assessed or distributed. One must always bear in mind the whole object of any award of damages is to put the claimant in the position the claimant would have been in but for the contravening conduct. Ultimately, the Partial Period Group Members will be required to undertake an individualised assessment of their loss. For the ‘Entire Period Group Members’, that is, people who possessed the relevant vehicles throughout the entirety of the Relevant Period, the Court awarded aggregate damages under s 33Z(1)(e) of the Act.  The award of aggregate damages for the Entire Period Group Members was calculated on the basis of a 17.5% reduction in value of the average retail price of the particular type of vehicle at the particular time it was purchased.  In circumstances where the group member paid a price lower than the average retail price for their vehicle, the lower of the two prices was said to be the applicable comparator from which the 17.5% reduction in value is to be calculated.[6]  In being satisfied there was a reduction in value of the relevant vehicles of 17.5% resulting from the failure to comply with s 54 of the ACL, Lee J also found that Entire Period Group Members were also entitled to recover the excess GST they paid on that reduction in value, calculated as 10% of the reduction in value.[7] Regarding the claim for damages under s 33Z(1)(f) of the Act, the Court declined to award aggregate damages on this basis, because his Honour was not satisfied that a reasonably accurate estimate could be made of the total amount owing to group members as required by s 33Z(3). Conclusion Williams is the first instance of a Court awarding aggregate damages in a funded representative proceeding, and provides helpful guidance on how the Court will approach such claims, particularly where only part of the claim is suitable for determination on an aggregate basis.  That said, while Justice Lee found in favour of the class on the issue, it is plain that such an assessment will need to be carried out on a case-by-case basis. About the Authors Martin del Gallego, Partner Martin is Chambers & Partners recognised commercial litigator with 15 years’ experience in high stakes, high value litigation. Martin specialises in class action and funded litigation, with expertise across a broad range of sectors including financial services, energy & resources, construction and insolvency. Matthew Harris, Lawyer Matthew is a litigation and dispute resolution lawyer at Piper Alderman with a primary focus on corporate and commercial disputes. Matthew is involved in a number of large, complex matters in jurisdictions across Australia. — For queries or comments in relation to this article please contact Kat Gieras, Litigation Group Project Coordinator | T: +61 7 3220 7765 | E:  kgieras@piperalderman.com.au [1] Williams v Toyota Motor Corporation Australia Limited [2021] FCA 1425. [2] Federal Court of Australia Act 1976 (Cth) s 33Z(1)(e). [3] Ibid s 33Z(1)(f). [4] Ibid s 33Z(3). [5] Williams [421]-[423]. [6] Williams [446]. [7] Williams [492].
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Pogust Goodhead Defeats BHP Bid To Block Deposition Of Former Renova Chief

The High Court has rejected mining giant BHP’s application for an anti-suit injunction (ASI) that sought to prevent Pogust Goodhead from pursuing lawful evidence-gathering measures in the United States against the former president of the Brazilian redress scheme foundation set up after the Mariana dam collapse.

The Court found no basis to characterise Pogust Goodhead’s use of Section 1782 to seek a deposition of Mr André de Freitas, former CEO of the Renova Foundation[i] as vexatious, oppressive, or unconscionable, as argued by BHP.

In November 2024, Pogust Goodhead filed the §1782 application in the District Court of Arkansas seeking limited testimony from Mr de Freitas in relation to Pogust Goodhead’s claim arguing that BHP unlawfully interfered with Pogust Goodhead’s retainer rights and the compensation due to its Brazilian clients.  The U.S. court granted the subpoenas in January 2025.

Since then, BHP has sought to block the deposition by filing motions to quash the subpoenas in April 2025 and seeking an ASI in the High Court. A ruling from the Arkansas court is pending.

In Wednesday’s judgment, Mr Justice Waksman rejected BHP’s request for an injunction that would have halted the U.S. evidence-gathering process, finding no basis to prevent Pogust Goodhead from continuing with its §1782 discovery efforts.

Justice Waksman wrote in his decision: “I agree with PG that the depositions serve a distinct and legitimate purpose, being to better understand Renova’s role in relation to the various settlements and their form.”

Alicia Alinia, CEO at Pogust Goodhead commented: “We welcome the Court’s clear judgment. BHP has repeatedly attempted to obstruct legitimate investigations into its conduct. Mr de Freitas’s testimony is central to understanding how our clients’ rights may have been undermined. It is essential that he gives evidence. Only by hearing directly from those involved can our clients’ rights be properly safeguarded and the full truth established.”

Key Findings

  • The court held that English courts do not control how parties lawfully obtain evidence abroad, and that the U.S. court is the appropriate authority to decide the scope and propriety of discovery sought under Section 1782.
  • The Court also highlighted BHP’s significant delay in bringing the ASI application — nearly four months after learning of the U.S. subpoenas — which weighed against granting any injunctive relief.
  • Any concerns about the scope of the subpoenas, alleged misstatements, or burden on the witness are squarely matters for the U.S. District Court, which has already engaged with the issues in detailed hearings.

As a result, BHP cannot use the English courts to derail the ongoing U.S. process. The parties now await the District Court of Arkansas’s decision on whether BHP’s motions to quash the subpoenas will succeed.

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A high-stakes dispute between insurers AmTrust and Sompo is unfolding in UK court, centered on a failed litigation funding scheme that left AmTrust facing an estimated £59 million in losses. At the heart of the case is whether Sompo, as the professional indemnity insurer of two defunct law firms, Pure Legal and HSS, is liable for the damages stemming from their alleged misconduct in the operation of the scheme.

An article in Law360 reports that AmTrust had insured the litigation funding program and is now pursuing Sompo for reimbursement, arguing that the liabilities incurred by Pure and HSS are covered under Sompo’s policies. The two law firms entered administration, leaving AmTrust to shoulder the financial burden. AmTrust contends that the firms breached their professional duties, triggering coverage under the indemnity policies.

Sompo, however, disputes both the factual and legal underpinnings of the claim. The insurer denies that any breach occurred and further argues that even if the law firms had acted improperly, their conduct would not be covered under the terms of the policies issued.

This case follows AmTrust’s recent resolution of a parallel legal battle with Novitas, another financial party entangled in the scheme. That settlement narrows the current dispute to AmTrust’s claim against Sompo.

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Woolworths Faces Shareholder Class Action Over Underpayments

By John Freund |

Woolworths Group is facing a new shareholder class action that alleges the company misled investors about the scale and financial impact of underpaying salaried employees. The action, backed by Litigation Lending Services, adds a fresh legal front to the long-running fallout from Woolworths’ wage compliance failures.

According to AFR, at the heart of the claim is the allegation that Woolworths did not adequately inform the market about the risks posed by its reliance on annualised salary structures and set-off clauses. These payment methods averaged compensation over longer periods instead of ensuring employees received correct pay entitlements for each pay period. This included overtime, penalty rates, and other award entitlements.

Recent decisions by the Federal Court of Australia have clarified that such set-off practices are non-compliant under modern awards. Employers must now ensure all entitlements are met for each pay period and maintain detailed records of employee hours. These rulings significantly raise the compliance bar and have increased financial exposure for large employers like Woolworths, which has tens of thousands of salaried employees.

As a result, Woolworths could face hundreds of millions of dollars in remediation costs. The shareholder class action argues that Woolworths failed to disclose the magnitude of these potential liabilities in a timely or accurate way. Investors claim that this omission amounts to misleading conduct, and that they were not fully informed of the risks when making investment decisions.