More than 300,000 angry Toyota and Ford owners who bought faulty cars over the past 10 years will have to wait even longer for compensation after a High Court of Australia judgment handed down in Canberra today.

Affected cars included diesel-powered Toyota Hilux, Prados and Fortuna models, as well as Ford Focus, Fiesta and Ecosport models with a dry dual-clutch transmission problem.

Both cases were initially brought before the Federal Court as class actions seeking a ruling on how the car’s loss of value should be calculated, after fixes were developed for the defective vehicles.

The key issue concerned the guarantee under Australian consumer law that an item purchased must be of acceptable quality.

In a case like this where the cars were defective, the law states that consumers are entitled to compensation for the loss of value.

The sticking point considered by the High Court was when this loss of value should be calculated.

Today the High Court answered this question by stating that the assessment of damages “is the amount by which the value of the goods is reduced at the time of delivery”.

All three cases, including a class action brought by Toyota owners, a cross-claim by Toyota and a class action brought by Ford owners, were sent back to the Federal Court to be re-evaluated in light of the decision of the High Court.

Filters expel harmful gases

It’s been a long road for car owners and both automakers.

In Toyota’s case, diesel particulate filters were supposed to collect dangerous pollutants, but instead released harmful gases.

It was only when the so-called “2020 field fix” was developed that a solution was found and the company carried out the repairs free of charge.

Ford also struggled to resolve its dry dual-clutch transmission issues, which resulted in sudden deceleration, intermittent revving, and loss of power.

The faults were intermittent and some cars had some problems, others had all of them, and others were not affected at all.

When the problems first surfaced in 2015, Ford told customers the shivers were due to their driving style.

The ACCC fined the company $10 million, after Ford admitted unreasonable conduct.

The boundary between compensation and overcompensation

The current case was never about whether compensation should be paid, but rather about where to draw the line.

In Toyota’s case, the Federal Court said the loss in value of the cars was 17.5 percent, rejecting the company’s argument that it should be less due to the availability of the fix from 2020.

On appeal, the court estimated that the loss in value before repair was only 10 percent.

The Federal Court judge in the Ford case initially ruled that the reduction in value was 30 percent.

But when Ford challenged this, the Court of Appeal found that the judge had failed to take into account repairs made to the car free of charge, the value of the car at the time of trial and the use of the car.

The High Court was asked to rule in both cases on the limit between compensation and overcompensation.

He found that none of the Federal Court decisions addressed the issue by measuring loss at the point of supply.