News & Insights

Recent High Court decision – Mitsubishi Motors Australia Ltd & Anor v Begovic

In a case of breaking the law by obeying the law

The High Court of Australia has granted Mitsubishi Motors Australia special leave to appeal against the Court of Appeal’s decision finding Mitsubishi guilty of misleading conduct for complying with a fuel labelling law.

Key facts

Begovic purchased a 2016 Mitsubishi Triton vehicle from a dealership operated by NorthPark Investments Pty Ltd (Northpark). The vehicle was imported by Mitsubishi.

Under the Motor Vehicles Standards Act 1989 (Cth) (the Act) manufacturers and importers of vehicles must comply with the Australian Design Rules (ADRs) that cover fuel consumption labelling requirements.[1] In accordance with this Act and the rules, a fuel consumption label was affixed to the vehicle’s windscreen.

Shortly after purchase, Begovic noticed that the vehicle consumed more fuel than what was indicated on the label.

Begovic commenced proceedings in the Victorian Civil and Administrative Tribunal (the Tribunal) against Northpark and Mitsubishi (the appellants) seeking a refund of the purchase price on the basis that his vehicle’s excessive fuel consumption breached three provisions of the Australian Consumer Law (ACL), namely:

  1. section 18; misleading or deceptive conduct,
  2. section 54; guarantee that goods comply with their description, and
  3. section 56; guarantee of acceptable quality.

The Tribunal found that the appellants had breached all three provisions of the ACL and ordered Northpark to refund Begovic the purchase price of $39,500 and take back the vehicle.

In 2021, the appellants sought leave to appeal the Tribunal’s orders on the question of law and this appeal was allowed. This was allowed by the Supreme Court of Victoria. The Court affirmed the Tribunal’s finding that the appellants had engaged in misleading or deceptive conduct in accordance with s 18 of the ACL, however found that the Tribunal had erred in finding Northpark and Mitsubishi breached ss 54 and 56 of the ACL.

Following which, the appellants appealed to the Court of Appeal which dismissed the appellant’s appeal and held that the label did convey a misleading and deceptive representation in regard to the vehicle’s fuel consumption. Although the label accurately represented the results of testing conducted on a representative vehicle, it was interpreted by consumers as applying to the actual vehicle offered for sale. Further, the appellant’s requirement to attach the label to the vehicle under the Act did not absolve them from making a misleading representation.

The High Court granted the appellant’s special leave to appeal on the grounds that the Court of Appeal erred in finding that the appellants had breached s 18 of the ACL. The Court of Appeal should have found that:

  • The relevant conduct was mandatory and s 18 of the ACL does not prohibit mandatory conduct; and
  • The appellants did not make the representation conveyed by the label.

Further, the Court of Appeal should have found that the only representation the label made was the “test accuracy representation”, not the “testing replicability representation”.

Key Takeaways

It will be interesting to see how the High Court deals with car manufacturers meeting the requirements of the Act and whether that conduct can give rise to a contravention of s 18 of the ACL.

In a case of breaking the law by obeying the law

The High Court of Australia has granted Mitsubishi Motors Australia special leave to appeal against the Court of Appeal’s decision finding Mitsubishi guilty of misleading conduct for complying with a fuel labelling law.