VW awarded legal costs after winning Supreme Court case over Takata airbags recall – UPDATE

UPDATE, September 10: A Supreme Court judge has awarded costs to Volkswagen Group Australia after a case against the manufacturer involving Takata airbags was thrown out.

In June, Justice Stevenson ruled the plaintiff, Passat owner Professor Dwyer, did not establish that his vehicle was not of acceptable quality when he purchased it – nor that he had suffered any actual loss or damage from a Takata airbag having been fitted to his car.

As a result, this week the case was formally dismissed and the court ordered the plaintiff and litigation funder should foot the car company's legal bill.

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The story to here

June 22: The Supreme Court in New South Wales has thrown out a case made against Volkswagen over claims some airbags fitted in its cars were faulty.

The plaintiff in the case, Professor Phillip Dwyer, claimed there was a propensity for PSAN (phase-stabilised ammonium nitrate - the chemical used as a propellant in the relevant airbags supplied by Takata) to degrade – which could cause them to explode or malfunction in the inflators installed in Volkswagen vehicles.

However the court found no such link could be established, and also that Professor Dwyer could not prove his VW Passat was not of acceptable quality when he purchased it.

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Additionally the court ruled Mr Dwyer could not prove he’d suffered any actual loss or damage because a Takata airbag had originally been fitted in his vehicle, "not least because Volkswagen has, without charge, replaced the Takata airbag with an airbag which is undoubtedly sound".

In its defence, the Wolfsburg firm stated there have been zero incidents worldwide where a Takata airbag has ruptured in a VW vehicle.

In February 2016, Volkswagen in Germany began testing 20,000 airbag inflators retrieved from its vehicles manufactured from 2005 onwards around the world, under varying climactic conditions, but found all had deployed correctly.

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It said it had complied with the mandatory recall notice, issued by the Australian Government, and replaced Professor Dwyer’s Takata airbag at no cost to him in 2019 when his vehicle had its 60,000km service, even though there had been no examples of the airbags failing to deploy properly and no recall issued in Europe.

The plaintiff took civil action against the German carmaker, and six other manufacturers, in 2018 regarding a global recall of Takata airbags. The other six cases have yet to be determined.

In a judgment handed down by the court on June 18, Justice James Stevenson said: "VW AG's Product Safety Committee determined there was no systemic risk associated with airbag inflators installed in Volkswagen vehicles that would warrant their recall.

"Indeed, I was informed that no European regulator has required a recall of Volkswagens fitted with Takata airbags. The results of the Empirical Analysis Program suggest the airbags are safe."

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A spokesman for VW Australia added: “VGA [has] maintained that the case brought against it was without merit and resolved to defend the action. As was shown in evidence, there have been no incidents reported of a Takata airbag rupture in any relevant Volkswagen vehicles in the field globally.”

The court ruled Professor Dwyer was only entitled to damages for the loss that he has actually suffered.

In total 101,759 Volkswagen cars and 17,595 Skodas were involved in the recall in Australia.