The High Court has allowed an appeal against a finding of misleading or deceptive conduct in circumstances where the representations made were mandated by consumer protection legislation.
In issue
- Whether a mandatory fuel consumption label applied to a vehicle can be misleading or deceptive in contravention of the Australian Consumer Law (ACL).
The background
The Respondent, Mr Begovic, purchased a new Mitsubishi MQ Triton (manufactured by the First Appellant, Mitsubishi) from the Second Appellant, Northpark, a Mitsubishi dealer. The vehicle had a fuel consumption label applied to its windscreen in compliance with the Motor Vehicle Standards Act 1989 (Cth) (the MVS Act). The form and content of the fuel consumption label as applied were dictated by the Vehicle Standard (Australian Design Rule 81/02 – Fuel Consumption Labelling for Light Vehicles) 2008 (Cth) (ADR 81/02). The fuel consumption figures on the label were from a standardised test of the same model of vehicle.
Following the purchase, the Respondent became dissatisfied with the fuel consumption of the vehicle exceeding the fuel consumption values on the label. He brought a claim in the Victorian Civil and Administrative Tribunal (VCAT) against the Appellants alleging (amongst other things) that the label was misleading or deceptive in contravention of s 18 of the ACL.
The decision at trial
The Respondent’s claim was successful at first instance with VCAT finding that the Appellants had engaged in misleading or deceptive conduct on the basis that the fuel consumption of the Respondent’s vehicle substantially exceeded the fuel consumption values on the label.
The Appellants unsuccessfully appealed to the Supreme Court of Victoria and subsequently to the Court of Appeal on ‘the mandatory conduct ground’, which argued the issue of whether a manufacturer required by law to apply a fuel consumption label to a vehicle, 'the form and content of which are prescribed by law', could be found to have engaged in misleading or deceptive conduct in contravention of s 18 of the ACL. The Supreme Court found that compulsory labelling can be misleading or deceptive (in breach of s 18 of the ACL) if it inaccurately records information about the goods which it is obliged by law to describe accurately. The Court of Appeal also rejected the Appellants’ argument and concluded that the Appellants’ were not compelled to engage in misleading or deceptive conduct in circumstances where the Appellants were not required to offer the vehicle for sale.
The issues on appeal
The Appellants obtained a grant of special leave to appeal to the High Court of Australia (HCA). The mandatory conduct ground was the primary issue on appeal and was sufficient for the HCA to determine the appeal.
The decision on appeal
The HCA unanimously found in favour of the Appellants on the mandatory conduct ground.
The Court applied its decision in R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (GMAC) which involved a conflict between the predecessor provision to s 18 of the ACL and a State law requiring (an inaccurate) notice to be given by a credit provider to consumers. Consistent with its decision in GMAC, the Court reasoned that in the event of inconsistency of statutory requirements relating to the same subject matter (here, consumer protection), the general provision may need to be subordinated to the specific provision in order to alleviate the conflict.
Relevantly, the Court held that in circumstances where the MVS Act obliged the Appellants to apply and maintain the fuel consumption label in the form and content prescribed by ADR 81/02, any failure to do so would result in the supply of consumer goods that did not comply with safety standards, contravening s 106 of the ACL.
The appellants’ conduct of affixing the fuel consumption label was required to comply with the specific provisions of the MVS Act (and therefore s 106 of the ACL). That same conduct was said to result in a breach of s 18 of the ACL (a general provision). In those circumstances, the High Court concluded that s 18 of the ACL must be subordinated to the specific requirements of the MVS Act. It follows that the Appellants were not in breach of s 18 of the ACL by merely engaging in conduct specifically required by the MVS Act.
Implications for you
The decision provides some clarity in relation to resolving conflicts between specific legislative requirements and general consumer protection legislation (including s 18 of the ACL). However, it should be kept in mind that any voluntary conduct which goes beyond mandatory requirements may be found to be misleading or deceptive in breach of s 18 of the ACL. For example, in this case, had the appellants done more than strictly comply with the requirements of the MVS Act, s 18 of the ACL would not necessarily be subordinated.
