MITSUBISHI Motors Australia (MMAL) has lost a claim by the owner of a Triton ute that the fuel label on his vehicle was misleading and deceptive, in a case that has implications across the industry.

The crux of the case was that the buyer, Mr Begovic, wanted better fuel economy than his 2008 Triton and that the fuel-economy label on the windscreen of a 2017 model led him to believe he would achieve a satisfactory economy if he purchased a brand-new example.

From the get-go, he complained he was not getting the stated economy. Tests by the automotive engineering consultancy ABMARC  showed the consumption was 27 per cent worse than he was getting with his 2008 Triton and worse than the label on the 2017 Triton windscreen.

The owner sought redress before the Victorian Civil & Administrative Tribunal (VCAT).

One curious element to the case was the lack of gravity demonstrated by MMAL in the hearing.  The company did not have legal representation and the MMAL employee attending had to seek instructions by phone as the hearing continued.

All MMAL relied on was an assertion that the label was accurate according to its testing. But the tribunal said it had to take into account evidence from ABMARC’s tests on the actual vehicle that showed the label was not even close to the fuel consumption of the 2017 Triton in question.

Given the potential implications for the whole car industry which, as a result, might find OEMs now having to confirm through a massive bout of testing that their consumption labels are accurate, it is especially surprising that MMAL took the case so lightly.

According to industry lawyers HWL Ebsworth, MMAL has sought leave to appeal VCAT’s decision in the Supreme Court of Victoria.

But appeals from VCAT are limited to questions of law and MMAL will not be entitled to bring in new evidence on appeal that it could have brought before VCAT at first instance.

For MMAL to succeed on appeal, it will need to establish that VCAT made a mistake in the way in which it applied the law to Mr Begovic’s case.

HWL Ebsworth partner Evan Stents and senior associate Christian Teese said in a report to clients that VCAT ordered MMAL and the Mitsubishi dealer to pay a full refund to the customer on the basis that both parties contravened the Australian Consumer Law (ACL) by engaging in misleading and deceptive conduct, and breaching the consumer guarantees as to acceptable quality, fitness for a disclosed purpose and supply by description in relation to the fuel-consumption figures displayed on the 2017 Triton purchased brand new by the customer.

The report, which says the case “may prove to be a very significant decision for the industry”, outlines for HWL Ebsworth clients relevant facts in the case of Begovic v Northpark Berwick Investments Pty Ltd & Mitsubishi Motors Australia Pty Ltd:

These are:

• Mr Begovic purchased a brand-new Mitsubishi Triton in 2017;

• A fuel-consumption label was adhered to the front windscreen of the 2017 Triton prior to purchase.

Mr Begovic alleged that:

• He purchased the 2017 Triton because he wanted a more fuel-efficient vehicle than his previous vehicle (a 2008 Mitsubishi Triton);

• The fuel consumption he experienced from the 2017 Triton was much higher than both his 2008 Triton and the fuel consumption label adhered to the 2017 Triton (12.44L/100km Extra Urban vs 8.5L/100km); and

• He would not have purchased the 2017 Triton had he known that its actual fuel consumption would be much higher than both his previous Triton and the fuel consumption label.

The issues for VCAT to determine were whether:

• The fuel-consumption label was misleading or deceptive;

• The 2017 Triton was defective or not of acceptable quality; and

• Mr Begovic was entitled to any remedy.

VCAT found that:

• Independent expert test-result evidence on the actual fuel consumption of Mr Begovic’s 2017 Triton proved that:

• • The 2017 Triton’s actual fuel consumption was significantly higher than the fuel consumption on the label provided by Mitsubishi (and Mr Begovic’s previous vehicle);

• • Based on the methodologies allowed for fuel-consumption tests under the ADR, the expected variation in fuel consumption test results is small – less than one or two per cent – and could not account for the significant variation in this vehicle (some 26.7% combined).

• On the basis of the independent expert evidence, the fuel-consumption label provided by Mitsubishi was misleading or deceptive in respect of this particular vehicle;

• In purchasing the 2017 Triton, Mr Begovic relied on the misleading or deceptive representation contained in the fuel-consumption label as to the 2017 Triton’s fuel-consumption characteristics;

• Mr Begovic had suffered a loss by reason of increased fuel costs which he did not bargain for when purchasing the 2017 Triton;

• It was not necessary to calculate what compensation Mr Begovic might be entitled to in respect of the increased fuel costs because Mr Begovic sought relief limited to a refund of the 2017 Triton;

• The 2017 Triton failed to be of acceptable quality because its fuel consumption was substantially more than represented by the fuel-consumption label;

• The 2017 Triton failed to be fit for the specific purpose disclosed by Mr Begovic (namely, the vehicle be more fuel efficient than his previous vehicle);

• There was also a breach of the guarantee contained in section 56 of the ACL that the Triton would match its description – given that the fuel consumption of the 2017 Triton departed in a material sense from the description of fuel consumption on the label;

• The failures of acceptable quality and fitness for specific purpose were major failures; and

• Mr Begovic was still within time to ‘reject’ the 2017 Triton for the purposes of enforcing a right to refund or replacement because he had raised complaints about its fuel consumption almost immediately after purchase and repeatedly raised the issues until he issued proceedings in VCAT.

Aside from VCAT’s findings, there are several other important observations to make about this case:

• Mitsubishi was not legally represented at trial and although Mr Begovic produced independent expert evidence in support of his claims, that evidence was not contested by Mitsubishi (rather, Mitsubishi simply asserted that its fuel consumption label was correct having regard to its own testing conducted by unnamed technicians);

• The findings by VCAT do not amount to a finding that all 2017 Triton fuel-consumption labels are misleading or deceptive – that finding was limited to Mr Begovic’s particular 2017 Triton based on the evidence presented in relation to that vehicle’s actual fuel consumption;

• The dealer was not found to have done anything other than sell the 2017 Triton to Mr Begovic with the Mitsubishi fuel-consumption label (which was found to be misleading or deceptive) attached. In other words, the findings in relation to misleading and deceptive conduct, and breaches of the consumer guarantees arise against the dealer solely as a result of the misleading or deceptive fuel-consumption label; and

• The dealer was entitled to claim an indemnity from Mitsubishi in relation to Mr Begovic’s claim and VCAT’s judgment.

 

By John Mellor