Australian Competition and Consumer Commission v Mazda Australia Pty Ltd (No 2)

[2022] FCA 250

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Mazda Australia Pty Ltd (No 2) [2022] FCA 250

File number(s):

VID 1169 of 2019

Judgment of:

O'CALLAGHAN J

Date of judgment:

21 March 2022

Catchwords:

CONSUMER LAW – misleading and deceptive conduct –where respondent contravened ss 18(1) and 29(1)(m) of Schedule 2 to the Competition and Consumer Act 2010 (Cth) by making false representations concerning the existence or effect of consumer guarantees – form of declarations

Legislation:

Competition and Consumer Act 2010 (Cth) Schedule 2 ss 18(1), 29(1)(m)

Cases cited:

Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2018] FCAFC 96

Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2021] FCA 1493

Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693; (2004) 207 ALR 329

Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53

Warramunda Village Inc v Pryde (2001) 105 FCR 437

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

Economic Regulator, Competition and Access

Number of paragraphs:

11

Date of last submission/s:

10 March 2022

Date of hearing:

Determined on the papers

Counsel for the Applicant:

Mr NP De Young QC with Ms NJ Hickey and Ms AF Garsia

Solicitor for the Applicant:

Webb Henderson

Counsel for the Respondent:

Mr MR Scott QC with Mr MJ Hoyne

Solicitor for the Respondent:

Mills Oakley

ORDERS

VID 1169 of 2019

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Applicant

AND:

MAZDA AUSTRALIA PTY LTD

Respondent

ORDER MADE BY:	O'CALLAGHAN J
DATE OF ORDER:	21 MARCH 2022

THE COURT DECLARES THAT:

1.The respondent contravened ss 18(1) and 29(1)(m) of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) by making false representations concerning the existence or effect of consumer guarantees under Part 3-2 of the ACL, and the rights or remedies available under Part 5-4 of the ACL, in the course of:

(a)communications between the respondent and Consumer RC on 31 October 2017, 24 January 2018, 27 February 2018, 2 March 2018 and 22 March 2018 in relation to a Mazda 2 Neo vehicle purchased in or about November 2014;

(b)communications between the respondent and Consumers MT or CT on 15 June 2017, 16 June 2017, and 10 July 2017 in relation to a Mazda CX-5 Akera vehicle purchased in or about July 2016;

(c)communications between the respondent and Consumers SB or KB on 28 July 2017, 4 August 2017, 11 August 2017 and 1 September 2017 in relation to a Mazda CX‑5 Maxx Sport vehicle purchased in or about May 2013; and

(d)communications between the respondent and Consumer MG on 5 July 2018 in relation to a Mazda 6 wagon purchased in or about June 2013.

2.The respondent contravened ss 18(1) and 29(1)(m) of the ACL by making false representations concerning whether it had reasonable grounds for forming the opinion that the consumer was not entitled to a refund or replacement vehicle at no cost to them under the consumer guarantee provisions of the ACL when it had no reasonable grounds for forming such an opinion in the course of:

(a)communications between the respondent and Consumer RC on 24 January 2018, 27 February 2018, 1 March 2018, 2 March 2018, 16 March 2018 and 22 March 2018 in relation to a Mazda Neo vehicle purchased in or about November 2014;

(b)communications between the respondent and Consumers MT or CT on 15 June 2017, 10 July 2017, 6 September 2017 and 28 September 2017 in relation to a Mazda CX-5 Akera vehicle purchased in or about July 2016;

(c)communications between the respondent and Consumers SB or KB on 28 July 2017, 11 August 2017 and 1 September 2017 in relation to a Mazda CX‑5 Maxx Sport vehicle purchased in or about May 2013;

(d)communications between the respondent and Consumer MG on 5 July 2017, 25 July 2017, 7 August 2018 and 20 August 2018 in relation to a Mazda 6 wagon purchased in or about June 2013;

(e)communications between the respondent and Consumer TK on 15 March 2019, 20 May 2019, 22 May 2019, 23 May 2019 and 5 June 2019 in relation to a Mazda BT-50 Dual Cab Utility purchased by Consumers TK and MK in or about May 2017;

(f)communications between the respondent and Consumer LC on 12 July 2017, 17 July 2017, 3 August 2017 and 8 August 2017, in relation to a Mazda CX-3 Akari purchased in or about August 2015; and

(g)communications between the respondent and Consumer EG on 19 November 2018 and 28 November 2018, in relation to a Mazda 2 Neo purchased in or about December 2014.

THE COURT ORDERS THAT:

3.The applicant’s claim in so far as it relates to questions of liability is otherwise dismissed.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’CALLAGHAN J:

1. Following my judgment in Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2021] FCA 1493 (the primary reasons), the parties are unable to agree about the form of declaratory relief.

2. These reasons assume familiarity with the primary reasons.

3. The ACCC has proffered a 42 page draft form of declaration, which makes a separate form of declaration in respect of each individual misrepresentation which I found to be established in the primary reasons.

4. By way of example, the ACCC contends for the following declaration in relation to representation 6 for Consumer LC:

   On 12 July 2017, Mazda, in trade or commerce and in connection with the supply of goods or possible supply of goods and/or services in Australia:

   (a)engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL; and

   (b)made a false or misleading representation concerning the existence, exclusion or effect of the consumer guarantees under Part 3-2 of the ACL, and the rights or remedies available under Part 5-4 of the ACL, in contravention of s 29(1)(m) of the ACL;

   by:

   (c)stating that Mazda would not replace Consumer LC’s vehicle at no cost to her and that Consumer LC’s case had been “presented to our legal team this morning … and at this stage they’re not entertaining the idea of a buy back” and that a “buy back” was “normally [for] brand new vehicles” and that “to be honest”, Consumer LC should not “waste her time” pursuing the matter, and offering Consumer LC compensation (less than a full refund), in the context of Consumer LC stating that “[t]here are two fails or like two major things that have gone wrong” and in the context of Consumer LC’s rejection of the vehicle and request for a refund or replacement vehicle;

   thereby representing to Consumer LC that:

   (d)the faults with Consumer LC’s vehicle were not major failures under the consumer guarantee provisions of the ACL;

   when in fact:

   (e)at the time the representation was made, Mazda had not given any consideration to whether Consumer LC was entitled to a refund or replacement vehicle at no cost pursuant to the ACL, and in circumstances where the representation impliedly conveyed that Mazda had reasonable grounds for making the statements, Mazda did not have reasonable grounds for making the representation.

5. Each of the ACCC’s proposed declarations follows the same format.  

6. Mazda, on the other hand, submits that the form of declarations proffered by the ACCC suffers the vice of recording in a summary form conclusions reached by the court in reasons for judgment, citing by way of example Warramunda Village Inc v Pryde (2001) 105 FCR 437 at 440 [8] (“The remedy of a declaration is not an appropriate way of recording in a summary form, conclusions reached by the Court in reasons for judgment”). It says that a briefer form of declaration is to be preferred, and is more likely to achieve the educative effect that the cases say declarations in matters such as this should aim to achieve.

7. Whether to grant declaratory relief, and if so in what form, is of course a matter of discretion.

8. In my view, as both parties submitted, there is utility in the granting of declaratory relief here.  In Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at 92 [95], Gummow, Hayne and Heydon JJ saw the utility in the setting out of the basis of the liability found and, in turn, the basis for the penalties imposed. There is also utility here in declaring contraventions of the ACL in order to define and publicise the type of conduct that constitutes a contravention of the ACL. Compare Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693; (2004) 207 ALR 329 at 333 [21].

9. As to the form of such relief, in my view the briefer form of relief contended for by Mazda is to be preferred. It sets out with sufficient clarity the conduct that constitutes the numerous contraventions of the ACL that I found to have occurred in the primary reasons, and will, in my view, also set out with sufficient clarity the foundation for any consequential orders, including penalties. Compare Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2018] FCAFC 96 at [71]. And it avoids the potential pitfalls of endeavouring to encapsulate in a summary form the relevant factual and legal detail of the (regrettably very lengthy) primary reasons.

10. For those reasons, I will make the following declarations:

    (1)The respondent contravened ss 18(1) and 29(1)(m) of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) by making false representations concerning the existence or effect of consumer guarantees under Part 3-2 of the ACL, and the rights or remedies available under Part 5-4 of the ACL, in the course of:

    (a)communications between the respondent and Consumer RC on 31 October 2017, 24 January 2018, 27 February 2018, 2 March 2018 and 22 March 2018 in relation to a Mazda 2 Neo vehicle purchased in or about November 2014;

    (b)communications between the respondent and Consumers MT or CT on 15 June 2017, 16 June 2017, and 10 July 2017 in relation to a Mazda CX-5 Akera vehicle purchased in or about July 2016;

    (c)communications between the respondent and Consumers SB or KB on 28 July 2017, 4 August 2017, 11 August 2017 and 1 September 2017 in relation to a Mazda CX‑5 Maxx Sport vehicle purchased in or about May 2013; and

    (d)communications between the respondent and Consumer MG on 5 July 2018 in relation to a Mazda 6 wagon purchased in or about June 2013.

    (2)The respondent contravened ss 18(1) and 29(1)(m) of the ACL by making false representations concerning whether it had reasonable grounds for forming the opinion that the consumer was not entitled to a refund or replacement vehicle at no cost to them under the consumer guarantee provisions of the ACL when it had no reasonable grounds for forming such an opinion in the course of:

    (a)communications between the respondent and Consumer RC on 24 January 2018, 27 February 2018, 1 March 2018, 2 March 2018, 16 March 2018 and 22 March 2018 in relation to a Mazda Neo vehicle purchased in or about November 2014;

    (b)communications between the respondent and Consumers MT or CT on 15 June 2017, 10 July 2017, 6 September 2017 and 28 September 2017 in relation to a Mazda CX-5 Akera vehicle purchased in or about July 2016;

    (c)communications between the respondent and Consumers SB or KB on 28 July 2017, 11 August 2017 and 1 September 2017 in relation to a Mazda CX‑5 Maxx Sport vehicle purchased in or about May 2013;

    (d)communications between the respondent and Consumer MG on 5 July 2017, 25 July 2017, 7 August 2018 and 20 August 2018 in relation to a Mazda 6 wagon purchased in or about June 2013;

    (e)communications between the respondent and Consumer TK on 15 March 2019, 20 May 2019, 22 May 2019, 23 May 2019 and 5 June 2019 in relation to a Mazda BT-50 Dual Cab Utility purchased by Consumers TK and MK in or about May 2017;

    (f)communications between the respondent and Consumer LC on 12 July 2017, 17 July 2017, 3 August 2017 and 8 August 2017, in relation to a Mazda CX-3 Akari purchased in or about August 2015; and

    (g)communications between the respondent and Consumer EG on 19 November 2018 and 28 November 2018, in relation to a Mazda 2 Neo purchased in or about December 2014.

11. The parties agree that, in so far as it relates to questions of liability, the ACCC’s claim should otherwise be dismissed.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan.

Associate: 

Dated:       21 March 2022