News & Insights

In its recent judgement, the High Court has ruled in favour of Mitsubishi Motors Australia Ltd (Mitsubishi) and Macpherson Kelley client Northpark Berwick Investments Pty Ltd (Northpark), finding that they did not engage in misleading and deceptive conduct, even where the conduct in question may have lead a consumer into error.

Fuel to the fire: the label in question

In 2017, Mr Begovic purchased a 2016 Mitsubishi Triton motor vehicle. Prior to purchase, a fuel consumption label (pictured below) was attached to the vehicle’s windscreen, as required by the Motor Vehicle Standards Act 1989 (Cth) (MVS Act) and associated applicable vehicle standards.

(Mitsubishi Motors Australia v Begovic [2023] HCA 43, 2)

The figures depicted on the fuel consumption label were taken from testing of a representative test vehicle – a single 2016 Mitsubishi Triton for which the results of fuel consumption testing were required by legislation to be reflective of all 2016 Mitsubishi Tritons (the “Test Vehicle”).

Following the purchase of his motor vehicle, Mr Begovic became dissatisfied with the fuel consumption of the vehicle. The vehicle underwent testing, where it was concluded that the vehicle’s actual fuel consumption was substantially higher than the fuel consumption described on the fuel consumption label. When Mr Begovic’s subsequent complaints to Mitsubishi and Northpark (the dealership) were not resolved, he commenced a proceeding in the Victorian Civil and Administrative Tribunal (VCAT). He alleged that Mitsubishi and Northpark had contravened sections 18 and 54 of the Australian Consumer Law (ACL), arguing that:

• the fuel consumption label was misleading or deceptive, and
• the vehicle was defective and therefore not of acceptable quality.

Proceeding History

Mr Begovic succeeded at the VCAT.

On appeal by Mitsubishi and Northpark to the Victorian Supreme Court, the primary judge:

• found that, contrary to the VCAT’s finding, the vehicle was not defective and therefore was of acceptable quality, but
• maintained that Mitsubishi and Northpark had engaged in misleading and deceptive conduct.

This second finding was also upheld upon further appeal by Mitsubishi and Northpark to the Court of Appeal.

On a further appeal to the High Court, Mitsubishi and Northpark argued:

1. the conduct of placing the fuel consumption label to the vehicle was “mandatory conduct” and therefore not misleading and deceptive conduct; and
2. the representation made by the fuel consumption label was not that it could be replicated, but that the fuel consumption testing on the Test Vehicle was accurately recorded.

High Court Proceedings

Mitsubishi and Northpark were successful on their first argument. Accordingly, the High Court did not deal with the second argument, as it was unnecessary to do so.

In finding for Mitsubishi and Northpark, the High Court determined that where a conflict exists between general and specific statutory requirements regarding the same topic – in this case, consumer protections – the specific requirement will take preference.

Mitsubishi and Northpark had a specific mandatory obligation under specific consumer protection legislation (being the MVS Act, and its associated motor vehicle standards) to apply the fuel consumption label to Mr Begovic’s vehicle. As the figures were validly obtained during testing as required by the legislation, Mitsubishi and Northpark were required to display those specific figures.

Because this conduct was mandatory, the High Court reasoned that the conduct could not have happened “in trade or commerce”, as required by section 18 of the ACL. “In trade or commerce” is defined by section 2 of the ACL as including “any business or professional activity…”, which the High Court stated “involves a choice to engage in that kind of trade or commerce”.[1]

Consequently, as Mitsubishi and Northpark were required by law to display the figure on the fuel consumption label, they had not voluntarily applied the label. As such, the conduct claimed to be misleading and deceptive did not occur “in trade or commerce”.[2]

Applying its decision in Credit Tribunal, Re; Ex parte General Motors Acceptance Corp, Australia (GMAC),[3] the High Court found that the conduct mandated by specific requirements of the MVS Act and associated motor vehicle standards “trumped” the more general requirements contained in the ACL (namely, to avoid engaging in misleading and deceptive conduct).

What does this mean for businesses?

Where businesses have undertaken mandatory conduct pursuant to specific requirements of consumer protection legislation, they will likely be protected against more general claims of misleading and deceptive conduct. As we have seen in this case, this protection extends even to where compliance with a mandatory obligation results in an outcome that is not replicable for every individual situation, or has led a person into error.

Businesses do still need to be wary of making voluntary statements and representations which may have a bearing on matters involving the quality and compliance etc of their products and services. Essential to the High Court’s findings was that Mitsubishi and Northpark’s conduct was mandatory under specific legislation. Should businesses make voluntary representations which go beyond their mandatory statutory obligations, they will not be afforded the same protections as provided in this case.

We’re here to help

If this has raised any questions for you, or if you would like to discuss or review the representations you make in your business, please do not hesitate to contact our team.  We have extensive motor dealer experience and intimate knowledge of consumer protection legislation and are well positioned to assist.

Footnotes

[1] Mitsubishi, 68.

[2] S 18 ACL.

[3] (1977) 137 CLR 545.