Toyota Australia faces diesel defeat device court action

Toyota Australia says it will rigorously defend a class action lawsuit that alleges it sold up to 500,000 diesel-powered vehicles fitted with so-called diesel defeat devices (DDDs) since 2016.

The class action involves some of the Australian auto market leader’s most popular models – including the top-selling Toyota HiLux, LandCruiser, Prado and even RAV4 – and if proven in court it could potentially cost the world’s biggest car-maker upwards of six billion dollars in compensation to affected owners.

If successful, the class action will seek compensation from Toyota for the perceived loss of value of the affected vehicles. This could include buybacks of affected vehicles or compensating owners for the difference in value between their respective purchase price and current market value.

The class action was launched in the Supreme Court of Victoria today by Maddens Lawyers, which has named Adam Peter Rowe – the owner of a 2014 LandCruiser Sahara – as the plaintiff, citing that Toyota is in breach of Australian Design Rule 79.

ADR 79, which was introduced in 1995, governs emissions levels in petrol and diesel cars, as well as light and medium goods vehicles, sold in Australia.

The court case is unrelated to the separate class action brought against Toyota Australia for the diesel particulate filters (DPFs) fitted to more than 260,000 examples of the HiLux, Prado and Fortuner sold between 2015 and 2020.

Toyota is appealing the judgement handed down in April by Federal Court Justice Michael Lee, who found that Toyota failed to comply with the statutory guarantee as to “acceptable quality” provided under Australian Consumer Law.

The company is facing payouts of more than $1.85 billion after Justice Lee determined that the value of the impacted vehicles had reduced by 17.5 per cent based on the average retail price. The ruling could see owners receive more than $7000 each in compensation and Toyota’s appeal is due to be heard in November.

Toyota avoided a fine following a separate investigation into the DPF issue by the Australian Competition and Consumer Commission (ACCC), but promised to review its systems and customer complaint handling procedures.

Volkswagen wasn’t so lucky following local court actions around its own ‘dieselgate’ scandal, copping a record $125 million penalty from the Federal Court in April 2021 for making false representations about compliance with Australian diesel emissions standards, after paying out up to $127 million – amounting to about $1400 per vehicle – in compensation following five separate class actions in September 2019.

The latest class action alleges that “many Toyota diesel powered cars contained DDDs and that Toyota has incorporated operating settings which function differently during test conditions and real world driving conditions”, according to the law firm.

Further, it alleges that Toyota Australia engaged in misleading and deceptive conduct when obtaining regulatory approval for the sale of the vehicles in question.

At the heart of the allegations is the assertion that Toyota used the engine computer unit (ECU) to modify the behaviour of the exhaust gas recirculation (EGR) system, as well as to modify fuel-injection timing.

In a nutshell, the ECU in affected vehicles would ‘switch off’ the EGR system when the throttle was opened more than 42 per cent, as well as advance the timing of the injection system.

This would improve engine performance, but would lead to higher emissions of highly poisonous nitrous oxide. It would also allow for different emissions levels to be obtained if the vehicle’s throttle was opened less than 42 per cent, for example in the case of a static emissions test.

The suit alleges that the vehicles in question, which include the Toyota HiLux, Fortuner, Granvia, HiAce, LandCruiser, LandCruiser Prado and RAV4 emit “unlawfully high” levels of nitrous oxide when driven.

“If the Court finds that Toyota has been using ‘defeat devices’ then there are literally hundreds of thousands of people driving a car that simply should have never been allowed on our roads,” said Maddens special counsel Brendan Pendergast in a statement.

The suit names the diesel engines in question; namely the 1GD-FTV 2.8-litre four-cylinder, the 2.4-litre 2GD-FTV, the 3.3-litre F33A-FTV, the 4.5-litre 1VD-FTV and the 2.2-litre AD-FHV and FTV.

“The class action alleges that some diesel engines developed by Toyota, including those incorporated in some of the most popular models such as the Landcruiser and Hilux, include design elements which tamper with the vehicle’s emissions control system in order to enhance the car’s performance,” said the law firm in a post on a site dedicated to the class action.

The suit alleges that vehicles fitted with the engines listed above and sold from 2016 are affected, which could potentially involve more than 350,000 vehicles.

Toyota typically represents 20 per cent of new vehicle sales in any given year, which equates to sales of around 210,000-215,000 vehicles a year.

The HiLux alone accounts for about 200,000 sales since 2016, while the HiAce, LandCruiser and Prado also sell in significant volumes.

But Maddens puts the number at close to 500,000.

“The number of impacted vehicles means that the potential ramifications for Toyota are enormous. This could completely overshadow VW’s dieselgate scandal,” said Pendergast in a press release.

“This class action is one of the biggest claims in Australia’s legal history. It could result in each participant receiving tens of thousands of dollars of compensation. Anyone who has purchased one of these vehicles should register to participate in this class action. Registration is quick and easy and can be done online.”

For its part, Toyota Australia has issued a succinct yet pointed statement.

“Toyota Australia stands by its reporting, monitoring and evaluation standards in relation to the carbon emissions for all its vehicles,” it reads.

“We will defend the class action announced today rigorously. As this matter is before the courts, we have no further comment.”

The automotive industry has been rocked by similar actions in recent years, with Volkswagen, Mercedes-Benz and Peugeot, among others, slapped with huge fines and recall costs for similar misconduct.

In 2016, Mitsubishi was forced to apologise after years of reporting false fuel economy data, eventually resulting in the company’s sale to Nissan.

More recently, Hino Trucks – part of the wider Toyota automotive business – has been forced to apologise after it was revealed that it, too, had been falsely reporting emissions figures for several years.

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