Mitsubishi Motors Australia Ltd v Begovic (No 2)

[2021] VSC 305

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2019 02790

MITSUBISHI MOTORS AUSTRALIA LTD (ACN 007 870 395)	First Applicant
NORTHPARK BERWICK INVESTMENTS PTY LTD (ACN 075 238 121)	Second Applicant
v
ZELKO BEGOVIC	Respondent

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JUDGE:	GINNANE J
WHERE HELD:	Melbourne
DATE OF HEARING:	21 May 2021
DATE OF JUDGMENT:	21 May 2021 (revised)
CASE MAY BE CITED AS:	Mitsubishi Motors Australia Ltd v Begovic (No 2)
MEDIUM NEUTRAL CITATION:	[2021] VSC 305

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COSTS – Appeal from Victorian Civil and Administrative Tribunal – Applicants unsuccessful on major issue – Successful on other issues – Applicants to pay 75 per cent of respondent’s costs.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr B Gibson	Thomson Geer
For the Respondent	Mr J Gottschall	SLF Lawyers

HIS HONOUR:

1. I gave judgment in this proceeding on 12 May 2021,[1] but left open the appropriate orders to give effect to the judgment. I have heard further argument and decided that the appropriate orders are:

   [1]Mitsubishi Motors Australia Ltd v Begovic [2021] VSC 252.

1.        The applicants have leave to appeal.

2.The appeal be allowed in respect of grounds 8, 14 and 15 of the Notice of Appeal dated 21 June 2019 but be otherwise dismissed.

3.        The order of the Senior Member made on 27 May 2019 be set aside.

4.The proceeding be remitted to the Victorian Civil and Administrative Tribunal (‘The Tribunal’) to hear the parties and to determine the appropriate orders to be made or remedies granted to give effect to the Court’s judgment delivered 12 May 2021 including, to the extent the Tribunal considers necessary, to determine the quantum of the loss or damage suffered by the respondent.

5.For the purposes of the rehearing in paragraph 4, the Tribunal is to be constituted by the same member who made the original orders.

1. That leaves for decision the appropriate order for costs in this appeal, which extended for a day and a half. The Court has a discretion as to costs but the principle that is applied in exercising it, is expressed as costs follow the event unless there is reason to depart from that principle. Costs are compensatory and not to punish a party, as the High Court reaffirmed in Northern Territory v Sangare.[2]

   [2](2019) 265 CLR 164.

1. In order to apply the principle that costs follow the event, it is necessary to determine what ‘the event’ was. Mr Begovic in 2018 commenced his proceeding in the Victorian Civil and Administrative Tribunal (‘the Tribunal’) by a pro forma application in which he described the problem with his Triton as being a ‘defective vehicle; excessive fuel consumption’ and then gave details of actual fuel consumption and stated:

I purchased this vehicle on the basis [that] its advertised fuel economy was better than the vehicle I had previously (as per the advertised economy on both); this vehicle is rated as better fuel consumption but actually uses more fuel than the previous - also a Mitsubishi Triton.

1. In my opinion, when the matter came on for hearing the issue that had arisen concerned whether the fuel consumption label was misleading or deceptive. In my judgment, I set out a direction given by a Deputy President, which described the issue arising in the proceeding in these terms:

[T]he legal issue raised by the Applicant in his claim that the advertised fuel consumption of the motor vehicle purchased from the Respondents was inaccurate, is that the Respondents engaged in misleading and deceptive conduct in trade and commerce contrary to s 18 of the Australian Consumer Law.

1. This understanding of the case that Mr Begovic put to the Tribunal is supported by the observations of the Senior Member during the hearing in April 2019, in which she indicated to the parties, in effect, that the case was one concerning s 18 of the Australian Consumer Law (‘ACL’).[3]

   [3]Competition and Consumer Act 2010 (Cth) sch 2 (‘ACL’).

1. I am only concerned with the costs of the Supreme Court hearing. No order was made for costs of the Tribunal proceeding. The effect of the orders I have just announced is that the order made by Tribunal has been set aside and the matter remitted to the Tribunal. What may happen on remittal cannot be forecast. But, the effect of my ruling is that the applicants succeeded in setting aside findings against them of contraventions of ss 54 and 56 of the ACL, and a remedy based on those contraventions. However, the Tribunal's findings that the applicants contravened s 18 of the ACL remain.

1. The applicants have in effect submitted that the basis on which I found a contravention of s 18 of the ACL was only advanced at the hearing before me and that the Tribunal’s findings about the contravention of s 18 were differently expressed or underpinned. It was also contended that a number of the grounds in the notice of appeal concerning the Tribunal’s s 18 findings have succeeded. I do not accept that the matter is as clear as that. I consider that the Senior Member's grounds for finding a contravention of s 18 were based on a number of matters and were summarised in the following passage:

The label information was false based on the expert evidence. It misled Mr Begovic to believe the vehicle had certain fuel consumption characteristics it did not have. He relied upon the representation in the label in making his decision to purchase the vehicle.

1. I did not consider Mr Begovic’s argument about the s 18 contravention, made on appeal, as entirely a new point. While it may have been expressed on appeal in clearer terms, as I mentioned in my judgment by reference to authority, it is not unusual for arguments like that to be shaped in different ways as a matter progresses from trial through appeal, although founded on the same bedrock.[4] I consider that Mr Begovic’s case was always substantially a s 18 case. In my opinion, Mr Begovic’s success on the s 18 claim was ‘the event’ for the purpose of the application of the principle that costs follow the event.

   [4]See Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6 [80].

1. The applicants had success on the ss 54 and 56 grounds, although the success was in a context where the Tribunal had said at one point in the hearing that it was only going to consider a case based on a misleading representation and no one argued the s 56 ground as the Tribunal itself acknowledged in its reasons. But it did make findings of contraventions of s 54 and s 56 and those findings were supported by Mr Begovic before me. I do not consider that the fact that the applicants have had the Tribunal’s orders set aside is determinative of the issue of costs. That setting aside followed from the applicants’ success on the ss 54 and 56 grounds, but they were not the main issue in the proceeding in the Tribunal or on appeal. Rather the s 18 claim was and Mr Begovic succeeded on it and maintained his success on this appeal.

1. Howver, I do not consider that Mr Begovic has established his contention that the applicants breached provisions of the Civil Procedure Act2010. His counsel sought to hand me documents containing details of the extensive costs that were said to be calimed by the applicants in the case. But as I then said, I am prepared to accept that the costs of the Supreme Court litigation would be very large and that there is a difference between the costs that parties say they have incurred and the costs that the Court would award on a standard basis.

1. My assessment of the case is that Mr Begovic has had success on the substantial issue argued at the Tribunal and in this Court, which was the s 18 case. All of the evidence he called from Ms Winkelmann, his own evidence and much of the argument before me about the analysis of the fuel consumption label was required for his s 18 case.

1. For those reasons I consider that Mr Begovic has been substantially successful. However, in the Court's discretion to take account of the parties’ success on particular issues, I take into account that the applicants have succeeded on the ss 54 and 56 grounds. I consider that, taking an overall view of the litigation, including the applicants’ success on those grounds, that an appropriate order for costs is that the applicants/appellants pay Mr Begovic, the respondent, 75 per cent of his costs of this Supreme Court proceeding on a standard basis to be assessed by the Costs Court in default of agreement.

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