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VOLKSWAGEN Group Australia (VGA) has been accused in court of being “quite silly” by a Federal Court judge during the joint class-action hearing over the diesel engine scandal when the German car giant took the unusual step of objecting to its own witness.

VGA is defending what is potentially a billion-dollar class action brought by lawyers on behalf of 100,000 owners and is jointly, in the same hearing, facing allegations by the Australian Competition and Consumer Commission (ACCC) that it misled Australian consumers.

According to court documents from the hearing this week, Volkswagen’s lawyer Dr Ruth Higgins told Justice Lindsay Foster in the Federal Court in Sydney that VW’s key witness, Volkswagen AG manager of the powertrain development department Dr Dirk Neumann, was not “authorised” to speak on the issue.

Dr Neumann was expected to give evidence about how VW’s vehicles came to be operated in two modes. But shortly before the trial, VW chose not to call him as a witness.

In response, Justice Foster said to Dr Higgins that Dr Neumann’s statement was “evidence you were going to read”. On learning it was not to be included in the statement, Justice Foster said “this is really quite silly, isn’t it?”

In the event, Justice Foster overruled VW’s objections to its own evidence, saying that the evidence of how the vehicles operated will be admitted and exposed for scrutiny and consideration in the case.

Maurice Blackburn Lawyers’ class-action principal Jason Geisker said: “Volkswagen has taken the extraordinary step of objecting to its own expert statement from a senior employee.

“We are astounded that Volkswagen now say that their own expert – a senior employee of Volkswagen – Dr Neumann, had no authority to make statements on behalf of Volkswagen and that such statements were outside the scope of his employment,” he said.

“Volkswagen’s conduct in seeking to exclude their own evidence shows that it will stop at nothing to cover up the facts.”

Maurice Blackburn Lawyers admitted that it had relied on Dr Neumann’s evidence in determining how the emission-cheat device operated.

“Although the reasons for the dual-mode operating were disputed, the fact of how they operated was not,” Mr Geisker said.

“We sought to tender those aspects of Dr Neumann’s statement.”

In the trial that could see Australian owners of some Volkswagen Group diesel vehicles – Volkswagen, Skoda and Audi – be financially compensated, Volkswagen remains firm that the issue of fitting some of its diesel vehicles with a much-publicised defeat device to disguise emission levels is not valid in Australia because its vehicles did not breach Australian emission regulations.

Volkswagen has paid billions of dollars in compensation and fines in other markets where the device did cover up the fact the vehicles were emitting more pollutants than allowed by the respective legislation.

But in Australia it has argued that by not breaching the country’s emission limits, there is no case to answer.

Maurice Blackburn Lawyers is seeking compensation for its clients, but has not discussed any financial value. In Canada, Volkswagen made a $A287 million settlement to some owners of 3.0-litre models in January, the second payment made by Volkswagen and one that resulted in a total bill of $A2.4 billion.

The ACCC will make its case at the same hearing as Maurice Blackburn, which first launched action against Volkswagen in November 2015 and is representing about 100,000 Volkswagen, Audi and Skoda owners.

The legal firm has 18,000 signed-up Volkswagen Group owners as clients and has brought the action on behalf of all the 100,000 affected Australian owners and lessees.

By Neil Dowling

KPMG
Macquarie