Car makers on notice after Rover ruling
A LANDMARK ruling against Jaguar Land Rover Australia is a wake-up call for other car manufacturers on how not to treat owners.
Jaguar Land Rover Australia (JLRA) has not only had to refund Sally and James Morphy the $280,000 they paid for the top of the line Range Rover Autobiography, it has been made to cover the Geelong couple's legal expenses of $140,000 following a lengthy consumer tribunal battle.
JLRA has also been forced to pay the dealer's litigation costs of $150,000.
Then there's the estimated $100,000 outlaid for its own failed defence.
All up that's a $670,000 bill for this lemon, which an expert's report said risked "sudden and catastrophic engine failure" because 10 litres of coolant had leaked into the oil.
The Victorian Civil and Administrative Tribunal (VCAT) found the vehicle unfit for even the most basic functions, let alone towing a horse float, which was what it was bought for.
The Geelong couple's case is now being used by other car manufacturers as an example of how not to treat owners.
It recently featured in a presentation to 800 Volkswagen executives and dealers at a "customer experience" conference in Brisbane.
VW marketing director Jason Bradshaw said the case was "cited to reinforce the importance of getting it right (because) there are real examples of dealerships and brands getting it wrong."
Consumer law expert Gene Schirripa of Snedden Hall & Gallop in Canberra said car companies could not afford to ignore the ruling.
"Because this was such a landmark decision in terms of the Australian Consumer Law as it applies to motor vehicles and because JLRA is a major player I think you will see behavioural shift in terms of the other manufacturers," Mr Schirripa said.
The firm Mills Oakley, which represented the dealer in the Morphy case, has since been contacted by at least three consumers alleging "major failures" and seeking to rely on the ruling to receive a full refund from the manufacturer, not the dealership.
"If this pattern reflects a broader trend, it certainly suggests that manufacturers may be more likely to engage with consumers who make the allegation of 'major failure' with their vehicles so as to avoid the risk that the vehicle can be rejected and then the manufacturer being held liable for the costs of a replacement vehicle and legal costs," said partner James Tobin.
In October last year VCAT member Blair Ussher found that "repetitive and undiagnosed failures made the car unreliable … and the prospect of the defect leading to a sudden and catastrophic engine failure rendered the motor car unfit for its basic purpose".
Then in a separate costs ruling in January this year he again ruled for the couple, mainly because in the original case they had "won entirely" and JLRA had "lost entirely".
"I consider that this disparity is sufficient to support a costs award in (the Morphys') favour," Mr Ussher said.
In a rewrite of history, a JLRA spokesman said it had provided the refund "without challenge", demonstrating the company's "desire to comply at all times with Australian consumer law and operate at the highest standards morally and ethically".
Following a 2017 investigation, the Australian Competition and Consumer Commission (ACCC) described the new car retailing industry's attitude to its obligations under consumer law as "deeply concerning".
The Morphys are now driving a Porsche Cayenne.
LAND ROVER OWNER: 'I'M NOT SIGNING A GAG ORDER'
A Land Rover owner has refused to sign a "gag order" the automaker attempted to impose after it finally agreed to a $70,000 refund.
The ACCC has repeatedly said nondisclosure agreements are not on, but that hasn't stopped recalcitrants within the industry from trying to silence unhappy customers such as Dee Caldicott.
The engine of his Discovery Sport had to be removed after doing just 18,000km.
An expert's report found "very high" amounts of metal in the oil, indicating "severe" engine wear.
Despite requesting a no-cost replacement or full refund, at one point the Mackay man faced having to fork out $30,000 towards another vehicle.
He refused and eventually won a full refund from Jaguar Land Rover Australia (JLRA) after mediation at the NSW Civil and Administrative Tribunal.
"Then they tried to impose a gag order," Mr Caldicott said.
"I said 'I'm not doing it'.
"I told them I'd take them to the District Court if they didn't pay on time."
Payment was made two hours before the deadline.
A JLRA spokesman said it couldn't be "drawn to comment on the specifics … other than to say a refund is at times accompanied with an agreement that slanderous and defamatory commentary cease now that an amicable agreement has been reached. This is not a gag order."
During mediation Mr Caldicott presented a document he had found on an internet forum that purported to be a memo by a top executive of the parent company Jaguar Land Rover about a "balancer shaft whine" affecting hundreds of thousands of vehicles and requiring "remedial action with the least amount of delay".
The JLRA spokesman confirmed the authenticity of the memo but said it was referred to a "customer comfort improvement on a limited number of vehicles.
"There are no consequences should the improved parts not be installed other than the possibility that a customer may perceive a whining sound from the engine under particular loads and conditions," the spokesman said.
"There have been no product failures reported in conjunction with the replacement or recommended replacement of this part."