High Court decides conduct was not misleading and deceptive: Mitsubishi Motors Australia Ltd & Anor v Begovic [2023] HCA 43

Recap

Mitsubishi sought special leave to appeal against the Court of Appeal’s decision in 2023.  (You can read more about the Court of Appeal’s decision here: https://www.brandpartners.com.au/news/recent-high-court-decision-mitsubishi-motors-australia-ltd-anor-v-begovic/)

Quick recap on the background facts

• Begovic purchased a Mitsubishi vehicle from a dealership.
• Shortly after purchase, Begovic noticed that the vehicle consumed more fuel than what was indicated on the label. He commenced proceedings in VCAT alleging that Mitsubishi’s conduct was misleading and deceptive.
• Mitsubishi argued that it was required under the Motor Vehicles Standards Act 1989 (Cth) (MSV Act) and the Australian Design Rules (ADR) 81/02 to apply a fuel consumption label to the vehicle.

This proceeding started in VCAT and through several appeals has ended up in the High Court for final determination.

The High Court granted Mitsubishi special leave to appeal on two grounds:

• that the fuel consumption labelling requirement under the Motor Vehicles Standards Act 1989 (Cth) (MSV Act) was mandatory, and that section 18 of the Australian Consumer Law (ACL) does not apply to mandatory conduct (the mandatory conduct ground); and
• that the label did not indicate that the test results were replicable; instead, the label only showed the results of the Australian Design Rules (ADR) 81/02 testing on a test vehicle of the relevant type at a particular time.

At the hearing, the High Court unanimously held in favour of Mitsubishi and ruled that Mitsubishi had not contravened section 18 of the ACL.

The High Court applied its decision in R v Credit Tribunal: Ex Parte General Motors Acceptance Corporation (GMAC).[1] In GMAC, the High Court considered the concurrent operation of the predecessor provision to section 18 of the ACL and a State law that required that an inaccurate notice be given by a credit provider to consumers.

Consistent with its decision in GMAC, when faced with an inconsistency between conflicting statutory requirements regarding the same subject matter, the High Court held that a specific provision must be interpreted as to prevail over a general provision when enacted by the same legislature.

So that Mitsubishi could supply the vehicle for sale, it was required to comply with a specified fuel consumption label and its obligations under ADR 81/02 and the MVS Act.  The High Court held that because of the specific requirement to apply the fuel consumption label, it had not breached section 18 of the ACL.

As the first ground was made out, the High Court held that it was unnecessary to consider the second ground.

Key takeaways

This decision does not favour the consumer.

Going forward, it will be important to understand that the fuel consumption labels placed on vehicles may not be accurate and therefore cannot be relied upon when purchasing a vehicle.

However, it is important to remember that this case was relevant to mandatory conduct required to be performed by Mitsubishi in respect of testing done on the vehicle.  The Courts decision may have been different if Mitsubishi had falsely represented that the vehicle sold conformed with the fuel consumption label.

[1] (1977) 137 CLR 545.