FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Mazda Australia Pty Limited [2023] FCAFC 45

ORDERS

THE COURT ORDERS THAT:

1.    The notice of appeal filed on 2 May 2022 be dismissed.

2.    Within 14 days of these orders, the parties provide, by email, to the Associate of Mortimer J, agreed or competing orders for costs by way of an agreed lump sum or that there be no orders as to costs.

3.    In the event of competing orders, the parties also provide short written submissions and any affidavit evidence in support of their respective positions.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The notice of appeal filed on 2 May 2022 be dismissed.

2.    Within 14 days of these orders, the parties provide, by email, to the Associate of Mortimer J, agreed or competing orders for costs by way of an agreed lump sum or that there be no orders as to costs.

3.    In the event of competing orders, the parties also provide short written submissions and any affidavit evidence in support of their respective positions.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MORTIMER AND HALLEY JJ:

INTRODUCTION

1    These reasons for judgment address appeals brought by both Mazda Australia Pty Limited (Mazda) and the Australian Competition and Consumer Commission (ACCC) against orders made by a judge of this Court in Australian Competition and Consumer Commission v Mazda Australia Pty Ltd (No 2) [2022] FCA 250 for the reasons advanced by the primary judge in Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2021] FCA 1493 (J). The appeals were heard together.

2    Mazda appeals against orders made by the primary judge finding that it had contravened s 18(1) and s 29(1)(m) of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL), by making false representations (a) concerning the existence or effect of consumer guarantees and rights or remedies available under the ACL and (b) that it had reasonable grounds for expressing opinions that nine consumers who had purchased Mazda vehicles were not entitled to a refund or replacement vehicle at no cost to them under the consumer guarantee provisions of the ACL (Mazda appeal). The ACCC filed a notice of contention in the Mazda appeal.

3    The ACCC appeals against the primary judge’s dismissal of its claims that Mazda had engaged in unconscionable conduct in contravention of s 21 of the ACL with respect to the nine consumers (ACCC appeal). Mazda filed a notice of contention in the ACCC appeal.

4    The two central questions for the primary judge and this Court are whether the conduct of Mazda in its dealings with the nine consumers (Consumers), in relation to their seven vehicles (three of the vehicles were jointly owned), was first, misleading or deceptive and second, whether in all the circumstances it was unconscionable. The two appeals are interrelated in that the representations that the primary judge found were false or misleading in contravention of s 18(1) and s 29(1)(m) of the ACL (Contraventions) provided the foundation for the unconscionable conduct case pursued by the ACCC.

5    The Consumers were referred to by their initials RC, CT, MT, SB, KB, MG, TK, MK, LC and EG in the reasons of the primary judge and we have followed that convention in these reasons.

6    For the reasons that follow we would allow the ACCC notice of contention but reject both the ACCC appeal and the Mazda appeal. In the circumstances, it was unnecessary to address the Mazda notices of contention.

FACTUAL BACKGROUND

7    The following factual background is taken from the undisputed factual findings of the primary judge which in turn were largely sourced from the very lengthy and detailed facts that had been agreed between the parties (agreed facts).

8    When faults with the vehicles occurred, the Consumers took their vehicles to authorised Mazda dealers. The dealers, often in consultation with Mazda, attempted to repair the faults. Although representatives of the dealers engaged with the Consumers in relation to the faults and repairs, Mazda chose to deal with the Consumers, principally via employees described as “customer service representatives” (or “customer advocates”). The Consumers were often told by the dealers to approach Mazda. Mazda says it was under no legal obligation to become involved in any communications with the Consumers, but it did so “in an effort to improve the outcome for [them]”.

9    All consumer contact with Mazda (including complaints by consumers) was managed by Mazda’s National Customer Support department (NCS). The NCS was divided into teams which focused on different areas of complaint. The intention of Mazda was that they were to work collaboratively to provide a satisfactory outcome for complaints by customers.

10    The NCS operated out of Melbourne. It handled all complaints and enquiries of a technical or operational nature made directly by owners of Mazda vehicles. Such owners were, in almost all cases, customers of Mazda dealers. Complaints and enquiries were received by the NCS either by telephone, email, or letters. Telephone calls were generally recorded if made to the customer support lines (an 1800 number) and were retained by Mazda for quality control purposes. Where complaints and enquiries were made through the Mazda website via the “Contact Us” page, they were directed to relevant staff within the NCS. If there was an existing record of an enquiry or complaint in Mazda’s contact management system, called Maestro, the complaint or enquiry was entered into that record for review by the assigned customer advocate.

Mazda’s role with its dealers

11    The dealers were the “suppliers” of the vehicles for the purposes of Div 1 of Pt 5-4 of the ACL, set out below. Mazda was the deemed manufacturer within the meaning of s 7 of the ACL. Although Mazda had no obligation to provide a refund or replacement vehicle under the ACL, it took on the responsibility for dealing with the Consumers’ requests. It did so mainly because, as a rule, Mazda bore the full cost associated with any refund or the provision of a new vehicle.

12    The dealers, from time to time, “escalated” vehicle faults to Mazda. They were required to escalate “ACL” classified repairs and faults that could not be resolved “within the first 4 steps of Mazda’s Technical Protocol”. Repairs were classified as “ACL” prior to 2016. That terminology was replaced with “Priority Vehicle Repairs” in or about 2016.

13    Pursuant to Mazda’s Service Standards (see [24] below), any technical and customer handling concerns needed to be rectified by carrying out corrective measures jointly with Mazda and by sharing information among all personnel involved.

14    Dealers were required to submit a Prior Authorisation Request (PAR) for faults in respect of which the dealer considered that Mazda had an obligation.

15    Mazda would also, from time to time, seek information from its parent company, Mazda Motor Corporation, in respect of some vehicle faults.

16    Mazda also operated a “Dealer Support Team”, which comprised Technical Services and Dealer Operations teams. The technical support which Mazda provided to dealers included:

(a)    conducting training on some Mazda specific systems and repair procedures;

(b)    issuing technical bulletins, as required, which dealt with specific issues with Mazda vehicles and procedures that dealers should follow to repair “Complete Built Unit” vehicles that presented with these issues;

(c)    establishing a technical protocol setting out the procedure to be followed by dealers when making technical enquiries of Mazda;

(d)    providing a technical and warranty “help desk” for dealers to contact with technical or warranty enquiries regarding Mazda products, and responding to technical reports provided by dealers in respect of specific issues with Mazda vehicles; and

(e)    providing Field Technical Specialists (FTS), whose role was to provide advisory support to dealers in relation to vehicle and customer enquiries.

17    Mazda also relied on written policies, including those contained in the following documents:

(a)    Summary Guidelines for Responding to Consumer Warranty Questions from July 2015 (Summary Guidelines);

(b)    Post Major Repair / ACL Form, renamed Priority Vehicle Repair Form in February 2016, and discontinued in May 2017;

(c)    Warranty Bulletins;

(d)    Post Warranty Support Criteria;

(e)    Knowledge Articles (offering training to the NCS);

(f)    Compliance Training Materials;

(g)    Mazda Service Standards;

(h)    CCA Compliance Manual;

(i)    Mazda Australia Buy Back Process; and

(j)    Refund Process.

18    Mazda had the following technical documents which it provided to, and intended to be relied upon by, dealers and Mazda personnel to diagnose the cause of faults and undertake repairs:

(a)    technical bulletins;

(b)    diagnostic protocols; and

(c)    Mazda’s Technical Protocol.

19    The ACCC relied on a number of Mazda’s internal compliance documents in aid of its unconscionable conduct case, including the contention that departures from the relevant terms of training and similar documents was unconscionable.

20    Mazda’s Diagnostics Training Slides (Diagnostics 2) were created by Mazda’s Technical Training team in 2008, and were last updated in 2018. Their principal purpose was to assist in delivering a two-day technical training course to Mazda dealer technicians, and also to make dealer technicians aware of the ACL, particularly when diagnosing, repairing and servicing customer vehicles.

21    Slide 28 of the Diagnostics 2 presentation was entitled “Mazda’s New VEHICLE WARRANTY” and read:

-    Important message from Mazda (First page in the new Warranty Booklet)

-    Our goods come with guarantees that cannot be excluded under the Australian Consumer Law (ACL). You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage.

-    You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.

22    Slide 29 was entitled “Determining ACL cases” and read:

–    What may constitute a Major Failure?

–    Concern that will make the vehicle undriveable & not quickly/easily repaired

–    Concern that is safety related, even if driveable

–    Concern that is expensive to repair

–    Concern requiring replacement of major component (engine, trans, diff)

–    Major refinishing of body work

–    New vehicle sale after Jan 1st 2011

23    The Diagnostics 2 slides were provided to the court in their native PowerPoint format, including speaking notes. The speaking notes to slide 29 relevantly read: “not quickly / easily repaired – any longer than 5 working days”.

24    Mazda’s Service Standards dated October 2017, which were intended to assist dealers in their dealings with consumers, contained references to “ACL”. The Service Standards included a section entitled “ACL Service Guidelines”, which provided information on the process required by dealers and Mazda for “ACL” classified vehicle repairs. The Guidelines included a flowchart with a list of relevant (ACL) “Vehicle Repairs”:

•    Operational failures caused by major assemblies such as engines, transmissions, differential, etc.

•    Repeated occurrences of the same failure after the first repair

•    Safety [r]elated concerns

•    Concerns that make the vehicle not drivable; not quickly & easily repaired in a reasonable time, say, 5 working days

25    Mr Michael Robins, Mazda’s General Counsel, agreed in cross-examination that ACL classified repairs were a “red flag” to consumers having a right to a refund or replacement vehicle under the ACL.

26    Mazda’s July 2015 Summary Guidelines were provided to NCS staff as part of their training. They were used to train NCS staff between 2017 and 2019. Under the heading “Purpose of these guidelines” it was stated:

Many customer warranty claims and questions can be dealt with easily under the terms of our factory warranties. However, in addition to those factory warranties customers also have rights under the consumer guarantees contained in the Australian Consumer Law. Those rights can extend for longer, and give greater rights to refunds and replacements, than exist under our factory warranties. Failure to honour those consumer guarantees and/or misleading a consumer about their rights under those consumer guarantees is a breach of the law. The purpose of this summary is to assist you to know when a customer has rights under the consumer guarantees and how to respond to customer queries when those rights may be involved.

27    The Summary Guidelines included a section on “Simple rules to avoid breaching the law”, which included the following:

•    Never tell a customer that they do not have any rights or aren’t entitled a remedy because the factory warranty period has expired. Remember – the consumer guarantees do not have clear time limitations, and last for a “reasonable period”. What is a “reasonable period” may differ depending on the component which is defective. For example, a “reasonable period” for windscreen wiper blades will be much less than the “reasonable period” that applies to a transmission.

•    Never tell a customer that they do not have any rights or aren’t entitled to a remedy because they did not purchase or have not been given an extended warranty. Remember - they may still be entitled to a refund, repair or replacement under the consumer guarantees.

•    Never tell a customer the time period for a consumer guarantee has expired - if you suspect that the vehicle is so old that the “reasonable period” for the consumer guarantees has expired, please check with Legal before you advise the customer.

•    Do not tell customers that they will only be entitled to a refund or replacement if they have had the vehicle repaired first. A customer will have the right to insist on a refund or a replacement where the vehicle is a “major defect”.

•    …

•    Do not tell customers that you [are] providing them with a remedy as “a gesture of good will”, “as a favour” or “just this once”. Remember - the consumer guarantees are mandatory, it is not a choice to comply with them.

•    If in doubt, always seek assistance from Legal - the application of consumer guarantees can often involve difficult judgments and Legal can help.

28    The Summary Guidelines also contained a section on “Questions to ask”, which included the following:

To help determine whether a customer has a right under a consumer guarantee, ask:

•    “What is the factory warranty or extended warranty applying to the vehicle” – use this information to first determine what Mazda can do under these warranties, but remember that this will only give you part of the answer. You must consider whether the consumer guarantees apply.

•    “What is the problem with the vehicle?” – use this information to determine the nature of the defect and whether the defect is major or minor. A major defect is one where the vehicle is unsafe or a reasonable person would not have purchased the vehicle had they known about the fault, or a fault which cannot be repaired. For example, a fault requiring replacement of the engine would be a major defect. There are many shades of grey in between.

•    “How did this problem occur” – this will assist you in determining whether or not the cause of the problem is due to a manufacturing default (which is covered by the consumer guarantee), or otherwise. For example, engine seizure due to the customer’s failure to have the vehicle serviced and the oil replaced may not be covered but the same engine failure occurring where the customer has ensured that the oil levels are appropriate would be covered.

•    “When did the customer purchase the vehicle?” – this will help you determine whether a reasonable time has passed for the fault to become apparent.

•    “Has the vehicle been repaired previously?” – a history of repeated repairs to the same part, or repairs to multiple parts may indicate that there is a major defect.

•    “What is the customer asking for?” – remember that in the event of a major defect only, it is the customer’s choice of repair, replacement or refund.

How Mazda’s internal structures were designed to deal with consumer complaints

29    At all material times, Mazda had the following internal structures for dealing with consumer complaints, including those of the consumers the subject of this proceeding.

30    The first point of call for consumers was with Mazda’s customer service representatives.

31    Before June 2017, decisions on consumers’ requests for a refund or a replacement vehicle were made in meetings called “round table reviews”. These meetings could be attended by the Customer Relations Manager (Ms Han), the relevant customer service representative, the Senior Manager of Customer Support, and/or the Senior Manager Technical (Mr Bradford). Prior to April 2018, the round table made decisions as to whether a replacement or refund or other means of redress would be offered to consumers.

32    Following the introduction in April 2018 of an “executive panel review process”, the round table review process continued, but it no longer had authority to make these decisions on requests for a refund or a replacement vehicle. The executive panel comprised members of the NCS and a Mazda executive. From April 2018 onwards, the executive panel made decisions as to whether a replacement or refund or other means of redress would be offered to consumers.

33    The primary judge made the following introductory findings in relation to each of the Consumers:

59    Consumer RC. RC purchased a Mazda2 in 2014, and between 2015 and 2018, had issues with the car’s engine lights coming on and the car going into “limp mode” or losing power. Her evidence described her interactions with Mazda to attempt to resolve these issues, including telephone conversations with Mazda’s customer representatives throughout 2017 and 2018. RC ultimately obtained a partial refund.

60    Consumers CT and MT are married. They purchased a Mazda CX-5 Akera in 2016. Their evidence described their individual interactions with Mazda about problems with the vehicle’s adaptive headlights, which began five months after purchase. After seeking to repair the vehicle, CT and MT told Mazda that they no longer wanted the vehicle, at which point they contacted NSW Fair Trading and the ACCC and continued to engage with Mazda, seeking a refund or a replacement vehicle. They commenced proceedings in the NSW Civil and Administrative Tribunal (NCAT) in November 2017, which resulted in consent orders requiring Mazda to replace the vehicle.

61    Consumers SB and KB are married. They purchased a Mazda CX-5 Mazz Sport Diesel in 2013 to use as a family car, including for holidays and for SB’s work. Between 2015 and 2017, they experienced a number of engine issues, including three engine failures and a starter motor failure. Initially, SB was the one who spoke with Mazda. KB became involved in August 2017. The couple lodged a complaint with NSW Fair Trading and, after further engine issues, commenced proceedings in NCAT in February 2018. Those proceedings settled, with Mazda paying SB and KB $16,000.

62    Consumer MG. MG purchased a Mazda6 in 2013, primarily to drive to work. The vehicle had three engine replacements over four years, and a number of other issues including the car displaying warning messages, the engine light coming on, a failure and subsequent replacement of the car’s turbo-charger and camshaft, and the car going into “limp mode”. In August 2018, Mazda offered to provide MG with an Atenza Auto Wagon in exchange for his vehicle and MG paying $17,700. MG accepted the offer.

63    Consumer TK. TK and her husband MK purchased a Mazda BT 50 in 2017 to travel around Australia with a new caravan. Their issues with the car included needing an engine replacement within five months of purchase and an intermittent stalling issue in 2018. The couple took the car to Mazda three times to fix the stalling issues. Mazda could not replicate the fault on the first two occasions; the third time, Mazda was able to replicate the fault and later gave a full refund to TK and MK for the car and its accessories.

64    Consumer LC (previously LS). LC purchased a Mazda CX-3 A 6AAkari Diesel All Wheel Drive in 2015. She deposed that she wanted a car that was reliable and safe for personal and business use. Several months after her purchase, LC experienced issues with the car losing power while driving. After discussions with Mazda, Mazda offered LC an extended warranty and free service, which she accepted in December 2017. LC said the issues with the car were ongoing as at the date of her affidavit (April 2020).

65    Consumer EG. EG bought a Mazda2 in 2014 to use for travel to work, as well as in her daily life. Her issues included the car going into “rough idle”, an issue which began several weeks after purchase, and “limp mode”, a problem which began in February 2018. She left her car at a Mazda dealer for repairs in early July 2018. EG had several discussions with NSW Fair Trading and Mazda, and ultimately commenced NCAT proceedings in January 2019, seeking a replacement vehicle or services to the value of the purchase price. The matter was resolved, with Mazda agreeing by consent to pay EG $303 and to provide a one year extended warranty on the car, a two year extended warranty on new parts, and three free car services.

THE CASES ADVANCED BY THE ACCC

34    The conduct relied upon by the ACCC as giving rise to its false or misleading representation case was identified in general terms in the amended concise statement (ACS) at [3] to [10].

35    The representations that were alleged to be false or misleading were identified at ACS [11] (Representations).

36    The ACCC contended that by making the Representations to the Consumers, Mazda engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of s 18(1) of the ACL and made false or misleading representations concerning the existence or effect of consumer guarantees, rights or remedies in contravention of s 29(1)(m) of the ACL.

37    The following Representations were alleged in the ACS at [11(a)] and [11(b)]:

(a)    the Faults [the Consumers experienced various and often recurring faults] with the Vehicles were not major failures under the consumer guarantee provisions of the ACL;

(b)    the Consumers were not entitled to a refund or replacement vehicle at no cost to the Consumer under the consumer guarantee provisions of the ACL;

    (Together, the Opinion Representations).

38    The following Representations were alleged in the ACS at [11(c)] to [11(e)]:

(c)    the Consumers did not have any ability under the ACL to seek to obtain a refund or replacement vehicle, because Mazda was entitled to repair the Vehicle regardless of the number of attempts made to repair the Faults or the time it took to repair the Faults, and the Consumers’ rejection of the Vehicles and Requests and/or Mazda’s obligation under the ACL was to repair the Vehicle;

(d)    Mazda was not required to provide a refund or replacement vehicle at no cost to the Consumer because of the age and/or mileage of the Vehicles; and/or;

(e)    a major failure within the meaning of the consumer guarantee provisions of the ACL in respect of motor vehicles is limited to a failure of a major component of the vehicle.

(Together, the ACL Representations)

39    Although the ACS [11(c)] and [11(e)] Representations were stated in the ACS to be directed at the Consumers, the Representations were ultimately alleged by the ACCC to be false statements of fact about the rights of consumers generally under the ACL rather than statements of fact limited to the specific positions of each of the Consumers.

40    The ACL Representations and the Opinion Representations were alleged in the ACS at [12] to be false or misleading because:

(a)    the Faults [the Consumers experienced various and often recurring faults with their Vehicles] were major failures for the purposes of section 260 of the ACL, or otherwise were failures to comply with the consumer guarantees that the Consumers required to be remedied and that Mazda had not remedied at all or within a reasonable time for the purposes of section 259(2) of the ACL; and the Consumers were entitled to refunds or replacement vehicles at no cost pursuant to section 263(4) of the ACL;

(b)    they incorrectly represented the position under the ACL in that: the Consumers did have an ability under section 263(4) of the ACL to seek to obtain a refund or replacement vehicle; the right to a refund or replacement vehicle under section 263(4) is not confined by the age and/or mileage of the vehicle; and a major failure within the meaning of section 260 of the ACL in respect of motor vehicles is not limited to a failure of a major component of the vehicle; and/or

(c)    at the time the Representations were made, Mazda had not given any, or any proper, consideration to whether the Consumers were entitled to refunds or replacement vehicles at no cost pursuant to the ACL; and in circumstances where the Representations impliedly conveyed that Mazda had reasonable grounds for making the statements, Mazda did not have reasonable grounds for making the Representations.

41    As the primary judge explained at J [7], the contention that the alleged “various and often recurring faults” that the Consumers experienced with their vehicles were not “major failures” to comply with consumer guarantees was narrowed during the course of the hearing. The ACCC confirmed that it did not seek to establish that the vehicles in fact suffered major failings for the purposes of the ACL. Rather, as the primary judge explained at J [7] the case advanced by the ACCC was that:

Mazda misrepresented the position as to the consumers’ legal rights because Mazda’s customer representatives expressed an opinion that there was no major failure, in circumstances where they could have had no basis for holding such an opinion, because Mazda had not considered whether or not the issues complained of were, in fact, major failures. The ACCC submitted such statements about the exercise of rights were misleading or deceptive because the opinion was not genuinely held and there was no reasonable basis for it, citing Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; and Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 at [598].

42    The conduct relied upon by the ACCC in the ACS as giving rise to the unconscionable conduct case was the same conduct identified in general terms in the ACS at [3] to [10] that it relied upon for its misrepresentation case, together with the making of the Representations, as alleged at ACS [11] and [12].

43    The ACCC contended at ACS [14] that by engaging in the conduct described in the at ACS [3] to [12], Mazda engaged in conduct, in trade or commerce, with respect to the supply of vehicles that was in all the circumstances, unconscionable conduct in contravention of s 21 of the ACL. The ACCC relied in particular on the circumstances referred to in ss 22(1)(a), (b), (d), (e), (f), (i) and (l) of the ACL.

44    The ACCC contended at ACS [15] that the circumstances of Mazda’s unconscionable conduct included:

(a)    the Consumers were in a substantially weaker bargaining position relative to Mazda with respect to the Faults and the Requests;

(ba)    the Consumers were vulnerable and disadvantaged with respect to Mazda, given that they had outlaid significant amounts on purchasing the Vehicles, relied on them for their daily domestic and business obligations and were entirely dependent on Mazda as to how the Faults and Requests were dealt with;

(bb)    Mazda took advantage of that vulnerability and disadvantage by engaging in the conduct referred to in paragraphs (b) to (f) below;

(b)    the false or misleading Representations described in paragraph 11 and 12;

(c)    Mazda’s refusal to provide a refund or replacement vehicle at no cost to the Consumer, even after the Consumer’s Vehicle had undergone multiple repairs which had not remedied the issues and where in some cases, Mazda’s internal “Post Repair Checklist” indicated that the Fault with the Vehicle was a major failure;

(d)    Mazda’s failure to give any proper consideration to whether the Faults made the Vehicles unfit to drive, defective and/or unsafe with the effect that a reasonable consumer would not have regarded the Vehicle as acceptable had they known of the Faults;

(e)    the offers made by Mazda to Consumers to pay amounts less than a full refund for the Vehicles or to provide replacement vehicles only if the Consumers made a significant financial contribution towards the replacement vehicle, or alternatively to provide an extended warranty and other services instead of a refund or replacement vehicle;

(f)    Mazda provided the Consumers with limited time to consider and accept an offer; and

(g)    Mazda’s ongoing refusal to provide a refund or replacement vehicle at no cost to the Consumers which caused harm to the Consumers.

OVERALL APPROACH OF THE PRIMARY JUDGE

45    The primary judge identified that central to the controversy between the parties was how to characterise the agreed facts. The agreed facts included the content of conversations between the Consumers and Mazda customer service representatives. The primary judge observed that the complaints made by the Consumers and the response by Mazda to those complaints was recorded in various documents, including audio clips of telephone calls between Consumers and Mazda customer representatives.

46    The primary judge provided the following explanation of the approach that he took to the determination of the misrepresentation and unconscionable conduct cases:

131    I now turn to consider each of the seven individual cases and the evidence in respect of them. I will take each case, and the ACCC’s case in respect of each such case, in turn.

132    In order to explain how the representations and alleged unconscionable conduct is said to arise, I have structured these reasons in respect of each consumer as follows. First, I have set out the relevant background facts that the ACCC claimed gave rise to each representation (or group of representations, where it is convenient to deal with them in such a manner). I then turn to consider, in respect of each representation said to arise from those facts, whether those representations were false or misleading in the manner that the ACCC claimed. I then continue to set out the relevant facts for the next representation or group of representations, and so on.

133    Having considered each representation in turn, and in the course of doing so, having described all the facts relevant to the consumer, I then consider the ACCC’s case on unconscionable conduct in respect of that consumer. As will become apparent, there is a considerable, but necessary, degree of repetition.

47    A necessary consequence of the approach that the primary judge adopted was that the factual findings relevant to the misrepresentation and unconscionable conduct cases were inextricably linked. A further consequence of the approach was that the “considerable, but necessary, degree of repetition” was often sought to be ameliorated by the inclusion of cross-references to the consideration of similar conduct with a particular Consumer or other Consumers.

MAZDA APPEAL

Overview

48    Mazda’s notice of appeal is 38 pages in length. It raises 38 numbered grounds of appeal. Many of those grounds have multiple sub-paragraphs. The first two grounds of appeal challenge the primary judge’s findings in general terms as to the making of 48 of the Representations and the falsity of 38 of the Representations. Grounds 3 to 9 in the notice of appeal are directed at what are described as “Common grounds arising in multiple findings under appeal”. These common grounds raise discrete challenges to the primary judge’s findings with respect to the Opinion Representations (Grounds 3 to 5) and the ACL Representations (Grounds 6 to 8). The common grounds also include challenges to implying representations from: (a) Mazda’s offers of less than a replacement vehicle or a refund of the full purchase price to a Consumer and (b) Mazda’s refusals to provide a replacement vehicle or a full refund to a Consumer (Ground 9).

49    The remaining 29 grounds, each with multiple sub-paragraphs, are directed at each of the Representations that are challenged as to making and falsity, individually and by Consumer and are cross referenced where Mazda considered appropriate to the first nine grounds.

Statutory provisions and principles

Misleading or deceptive conduct

50    Section 18(1) of the ACL provides:

18    Misleading or deceptive conduct

(1)    A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

51    Section 29(1)(m) of the ACL provides:

29    False or misleading representations about goods or services

(1)    A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

…

(m)    make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or

    …

52    There is no meaningful distinction between the phrase “misleading or deceptive” in s 18(1) and the phrase “false or misleading” in s 29(1)(m): Australian Competition & Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634 at [40] (Allsop CJ).

53    Unlike s 18(1), s 29(1)(m) of the ACL is a civil penalty provision.

54    Further, although representations to the public must be considered by reference to the class of consumers likely to be affected by the conduct, “where the conduct is directed to a single person …attention must be directed to the relationship between the two persons, the context in which the statement is made, the reasonably known characteristics of the recipient of the statement, and the effect on a reasonable person in the position of the recipient of the statement”: Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196 at [219] (Edelman J).

55    In Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [37] (Gleeson CJ, Hayne and Heydon JJ) it was said:

… it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known.

56    This is a proceeding, like Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 (Wheelahan J), where the ACCC alleged that the conduct alleged to be misleading or deceptive, or likely to mislead or deceive, included the making of representations as to the law or legal rights. As Wheelahan J said in that case:

598    [R]epresentations as to the law or legal rights … may relate to the existence of rights in a particular relationship or arising from a particular transaction, in a general sense: see, for example, Valve Corporation v Australian Competition and Consumer Commission [2017] FCAFC 24; 351 ALR 584, and Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2018] FCAFC 96. Others may relate to the exercise of rights in particular circumstances that may depend upon questions of judgment involving fact and degree. In considering such representations, it is necessary to be mindful that a representation in the nature of an appraisal or opinion does not necessarily give rise to a contravention of s 18 because it later proves to be inaccurate. An opinion, so expressed, at least if it is genuinely held and there is a basis for it, however erroneous, misrepresents nothing: Global Sportsman v Mirror Newspapers at 88 (Bowen [CJ], Lockhart and Fitzgerald JJ). The High Court made this point in Campbell v Backoffice Investment, in which it was held that the provision of financial estimates in pre-contractual documents before a corporate transaction, which were believed to be true but which turned out to be inaccurate, was not misleading or deceptive. In circumstances closer to the present proceeding, Dowsett J in Australian Competition and Consumer Commission v Bunavit Pty Ltd [2016] FCA 6 at [29], commented on the potential danger of penalising suppliers for bona fide denials of liability, such as denials that a defect in goods amounts to a major failure of a statutory warranty, which later turn out to be wrong …

599    Such cases involving representations as to the law or legal rights may involve claims under both ss 18 and 29(1)(m) of the ACL, such as the ACCC has made in the present proceeding. The general prohibition on misleading or deceptive conduct in s 18 operates concurrently with the more specific prohibitions in s 29: see, s 18(2).

Statutory guarantees

57    Section 54 of the ACL provides:    

54    Guarantee as to acceptable quality

(1)    If:

(a)    a person supplies, in trade or commerce, goods to a consumer; and

(b)    the supply does not occur by way of sale by auction;

there is a guarantee that the goods are of acceptable quality.

(2)    Goods are of acceptable quality if they are as:

(a)    fit for all the purposes for which goods of that kind are commonly supplied; and

(b)    acceptable in appearance and finish; and

(c)    free from defects; and

(d)    safe; and

(e)    durable;

as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3).

(3)    The matters for the purposes of subsection (2) are:

(a)    the nature of the goods; and

(b)    the price of the goods (if relevant); and

…

(6)    Goods do not fail to be of acceptable quality if:

(a)    the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and

(b)    they are damaged by abnormal use.

…

58    Section 259 of the ACL provided relevantly as follows:

259 Action against suppliers of goods

(1)    A consumer may take action under this section if:

(a)    a person (the supplier) supplies, in trade or commerce, goods to the consumer; and

(b)     a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3-2 (other than sections 58 and 59(1)) is not complied with.

(2)    If the failure to comply with the guarantee can be remedied and is not a major failure:

(a)    the consumer may require the supplier to remedy the failure within a reasonable time; or

(b)    if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time—the consumer may:

(i)    otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or

(ii)    subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection.

(3)    If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may:

(a)    subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or

(b)    by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods.

…

59    Section 260 of the ACL provided relevantly as follows:

260    When a failure to comply with a guarantee is a major failure

A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if:

(a)    the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b)    the goods depart in one or more significant respects:

(i)    if they were supplied by description—from that description; or

(ii)    if they were supplied by reference to a sample or demonstration model—from that sample or demonstration model; or

(c)    the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or

(d)    …

(e)    the goods are not of acceptable quality because they are unsafe.

Overview of the approach and reasons of the primary judge

60    The primary judge made the following principal findings on the misrepresentation case advanced by the ACCC:

(a)    Mazda had no reasonable basis for making the Opinion Representations because it failed to make any enquiries as to whether the faults were “major failures” for the purposes of the ACL: at J [243] and [372]; and

(b)    Mazda gave no real consideration to Consumers’ rights to a refund or replacement under the ACL: at J [358], [373], [586], [823] and [938].

61    The primary judge concluded that 49 of the 55 Representations (each being to the effect of one of the five generic Representations identified in the ACS at [11(a)-(e)]) had been conveyed and were false. The Representations that were found not to have been conveyed were the first Representation in the TK/MK case and the first five Representations alleged in the LC case. The Representations that the primary judge found were conveyed in the case of each Consumer and cross referenced to the relevant generic Representation were summarised by Mazda in the following table in its notice of appeal (where NF records that the Representation was not found):

Grounds 1 and 2

62    It is convenient to address Grounds 1 and 2 together.

63    In Ground 1 of its notice of appeal Mazda contends that given the words used and the circumstances in which they were used 48 of the 49 Representations were not conveyed for the reasons advanced in sections C to F of its notice of appeal (Grounds 3 to 38).

64    In Ground 2 of its notice of appeal Mazda contends that if conveyed, the 33 Representations in the form of the Opinion Representations were not misleading or deceptive and were not false for the reasons advanced in sections C and F of its notice of appeal (Grounds 3 to 5 and 10 to 38). We note that in their written submissions, both Mazda and the ACCC stated that Ground 2 was directed at 38 Representations but this must have been an inadvertent error. In fact, there were only 33 Opinion Representations, comprising 8 ACS [11(a)] Representations and 25 ACS [11(b)] Representations.

Submissions

65    In its written submissions Mazda advances three overarching submissions in support of Grounds 1 and 2.

66    First, Mazda submits that in determining whether a representation was conveyed, the primary judge failed to have sufficient regard to context, including when the representation was made to an individual, the knowledge of that individual. Mazda submits that if the individual to whom the representation was made knew the truth, a finding that the individual was likely to be misled would be unlikely. It submits that all the Consumers received advice from the ACCC, the relevant Department of Fair Trading or a lawyer, and that (a) this was a highly relevant factor in determining the nature of the representation and whether it was likely to lead the Consumers into error, (b) it was apparent that at the time the alleged representations were made none of the Consumers was actually misled, and (c) the relevance of the receipt of advice by the Consumers and the absence of any evidence that the Consumers were misled was misapprehended or overlooked by the primary judge.

67    Second, Mazda submits that conduct that is transitory or ephemeral, or where any misleading impression is likely to be dispelled quickly does not constitute misleading and deceptive conduct under the ACL. It submits that if a Mazda representative made an inaccurate statement but clarified or corrected it in the same conversation then that fact is highly relevant to whether there has been a contravention. Mazda contends this occurred in relation to some of the Representations that were found to have been conveyed to RC, CT/MT, SB/KB, TK/MK and LC.

68    Third, Mazda submits that the Representations that consumers did not have a right to a refund or a replacement vehicle because Mazda always had the right to repair a vehicle, were in substance a negative representation about the existence of legal rights generally. It submits that statements by Mazda customer service representatives that Consumers had the right to commence legal proceedings if they were not satisfied with Mazda’s response “can only be taken to have confirmed the existence of those rights at the conceptual level with which the alleged representation is concerned”.

69    The ACCC submits that Mazda’s contentions that the Representations were not conveyed, were correctly characterised by the primary judge at J [180] (by way of example) to be “an altogether too literal and unrealistic; non contextual reading” of the relevant communications relied upon by the ACCC.

70    The ACCC submits that Mazda’s submission that each Consumer “knew the truth” is legally misconceived. It submits that (a) the primary judge’s focus was correctly on Mazda’s impugned conduct, (b) it is not necessary to prove an intention to mislead or that the impugned conduct in fact misled or deceived anyone, and (c) the fact that a person has sufficient knowledge not to be misled or deceived does not alter the misleading character of what might have been said.

71    In any case, the ACCC submits that Mazda’s contentions are not established on the evidence because (a) in most cases, the Consumers did not fully understand their rights or feel confident enforcing those rights against Mazda, (b) it was irrelevant that Consumers remained open to commence proceedings against Mazda, and (c) the statements relied upon by Mazda to assert that the Representations were “clarified or corrected” in the same conversations in which they were made did not have that effect.

Consideration

72    Grounds 1 and 2 of Mazda’s notice of appeal are expressed at a degree of generality that is largely overtaken by the more specific grounds that are subsequently advanced in the notice of appeal. For that reason these grounds are best understood as introductory and overarching grounds that seek to identify generic errors in the reasoning of the primary judge.

73    It is sufficient to make the following observations in response to the written submissions advanced by Mazda in support of these two grounds.

74    First, as submitted by the ACCC, knowledge of the falsity of a representation does not alter the misleading character of the representation. As the Full Court stated in Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2018] FCAFC 96 at [54] (Allsop CJ, Jagot and Lee JJ):

Here, however, even though the false representation did not mislead, as conduct it was to be characterised as false and so as misleading or deceptive in that sense. In the context of a serious inquiry about a faulty consumer good the mere fact that [the consumer] had sufficient knowledge not to be misled does not alter the misleading character of what was said. Nor is the misleading character of the statement altered by the fact, if it be the fact, that the LG representative is to be inferred to have known that [the consumer] held such knowledge….

75    Second, any alleged reliance on advice provided by third parties necessarily turns on the specific context in which that advice might have been provided and both the content and circumstances in which the statements that gave rise to the misleading representations were made by the Mazda customer service representatives.

76    Third, the effect of any statements that are alleged to be inconsistent with the Representations must be considered both in the context of the conversation or document considered as a whole and against the specific Representation alleged to have been conveyed, either expressly or by implication.

77    Fourth, any awareness by a Consumer of their ability to bring proceedings or make complaints to regulatory bodies if requests for refunds or replacement vehicles were not accepted cannot logically detract from the misleading character of a Representation or necessarily preclude a finding that a Consumer may have been misled.

78    It follows for these reasons that Grounds 1 and 2, to the extent that they are relied upon as general overarching grounds, independently of other grounds, must be rejected.

Ground 3

Mazda’s contentions and submissions

79    In Ground 3 of its notice of appeal Mazda contends that the Opinion Representations did not necessarily convey any representation by implication that Mazda had reasonable grounds for making them, and the primary judge ought to have so found.

80    Mazda submits that the following two fundamental misconceptions in the representation cases advanced by the ACCC were adopted by the primary judge and underpinned many of his Honour’s alleged erroneous findings.

81    First, a misconception that every statement of opinion also conveys a further implied representation that there was a reasonable basis for that opinion.

82    Second, a misconception that in making an offer for less than a replacement vehicle at no cost to the Consumer or a full refund, Mazda conveyed a representation (either as an opinion or as a fact) that each of the Consumers (or consumers more generally) had no rights to a refund or a replacement vehicle under the consumer guarantee provisions of the ACL.

83    Mazda submits that contrary to the approach that it alleges was adopted by the primary judge, statements of opinion do not necessarily carry an implied representation that there is a reasonable basis for the opinion. It submits that in the case of an inexpert opinion there would usually be no reason to assume that it was based on reasonable grounds and references the following decisions: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [94], [102]-[105] (Heydon J); Inn Leisure Industries Pty Ltd (Provisional Liquidator Appointed) v DF McCloy Pty Ltd (No 1) (1991) 28 FCR 151 at 167 (French J, as his Honour then was).

84    Mazda submits that no implied representations of reasonable grounds were conveyed in the present case because (a) conversations with “call centre staff” should not be “impressed with a profundity they lack on their face”, (b) Mazda and the Consumers did not have shared commercial interests, (c) the Consumers did not regard the “call centre staff” to be providing them with legal advice, (d) the relevant context often involved the communication of Mazda’s position or the call centre conveying an offer “as a conduit for the decision of others”, (e) whether Mazda followed its own processes is not relevant to identifying precisely what representations were conveyed, (f) there may have been more than one reasonable basis for the opinion, (g) the fact a response may be spontaneous is relevant as to whether a representation as to reasonable grounds was conveyed, and (h) the primary judge did not imply any representation as to reasonable grounds for the opinions conveyed on the basis that Mazda had a dominant bargaining position and Mazda did not in fact hold a stronger bargaining position than the Consumers.

85    The references by Mazda to “call centre staff” were references to the Mazda customer service representatives in the NCS.

ACCC’s submissions

86    The ACCC submits that (a) the question of whether a representation conveys an implied representation as to reasonable grounds turns on the content of the opinion and the context in which the opinion is given, (b) Mazda’s appeal ignores the essential findings made by the primary judge that Mazda never gave any, or any proper or genuine consideration to Consumers’ requests for refunds or replacement vehicles, and (c) establishing an absence of reasonable grounds for giving the opinions did not depend on the Consumers demonstrating an entitlement to compensation under the ACL.

Consideration

87    A statement of opinion may carry with it one or more implied representations. Those implied representations may include a representation that the opinion is based on reasonable grounds or that it was formed on the basis of reasonable inquiries: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 39 at [33] (French CJ).

88    In Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307, in reasons principally directed at distinctions between statements of fact and statements of opinion, Bell ACJ (as his Honour then was) stated at [34] (Barrett AJA agreeing at [91]):

Where, however, it is established that a statement or representation is or must have been understood by its target audience as one of opinion or belief, even though presenting at one level as one of fact, liability will not be strict; rather, it will generally depend upon an assessment as to whether or not the belief or the opinion was honestly held and “perhaps” (see [24] above) whether or not the maker had a reasonable basis for the belief or opinion. Other than in cases of statements as to future matters (where the statutory presumption is engaged: see, for example, Competition and Consumer Act 2010 (Cth), Sch 2 — Australian Consumer Law, s 4), it will be for a plaintiff to establish the lack of reasonable basis for belief if misleading or deceptive conduct is to be established.

89    To consider whether a representation that a party has reasonable grounds for expressing an opinion is conveyed, it is necessary to approach the issue from the perspective of the target audience. The relevant question is whether the person or persons to whom the statement of opinion was made would reasonably understand that the person expressing the opinion was also representing by implication that they had reasonable grounds for expressing it.

90    An answer to that question requires a consideration of the context in which the opinion is expressed and the specific content of the opinion. Those issues in turn require a consideration of matters that would include any information asymmetry, the significance and importance of the subject matter of the opinion to the person or persons to whom it is directed and any overarching context provided by relevant legislative requirements or objectives such as those that might arise from consumer protection legislation.

91    The approach of the primary judge, at a general level, was not inconsistent with these propositions.

92    Contrary to the implicit contention advanced by Mazda, the primary judge did not make any finding or proceed on any assumption that every representation that might be construed as a representation as to the holding of an opinion necessarily also conveyed a further implied representation that the opinions were honestly held and that there was a reasonable basis for holding that opinion. Rather, the primary judge only made that finding for the Representations that he found were expressions of opinions after considering the specific context in which each of those Representations was conveyed.

93    We do not accept that any overarching error arose because the relevant communications on which the primary judge relied were with “call centre staff”. As noted above, the alleged “call centre staff” were Mazda customer service representatives in the NCS. To describe them as “call centre staff” in the sense such a phrase is usually understood is wrong. As the evidence shows, they are case managers, they sometimes have long discussions with consumers, send and receive emails from Mazda executives, and take detailed notes in Maestro of their communications. The NCS staff had specific responsibility to deal directly with disaffected consumers and act as a conduit between those consumers and senior Mazda executives. The Consumers were entitled to, and did, regard them as having some authority to speak on behalf of Mazda.

94    Nor did any alleged failure to give sufficient weight to any belief by a Consumer that they were not being provided with “legal advice” by the Mazda customer representatives or that the representatives were only a conduit for the decision of others, establish any error by the primary judge. Consumers could readily be expected to have inferred that (a) responses by Mazda customer service representatives to requests for refunds or replacement vehicles at no cost reflected a settled, considered and approved position of Mazda, and (b) this approved position was based on advice as to the scope and nature of its legal obligations, including its obligations under the ACL.

95    It follows for these reasons, that this ground, to the extent that it is relied upon as a general overarching ground, must be rejected.

96    Ultimately, the question, of whether the Opinion Representations conveyed further implied representations that that there was a reasonable basis for holding those opinions, turns on a consideration of the specific context and content of the conversations or documents relied upon by the ACCC for each of the Opinion Representations.

Ground 4

Mazda’s contentions and submissions

97    In Ground 4 of its notice of appeal, Mazda contends that if contrary to its contentions, the Opinion Representations were conveyed and they carried a further implied representation that they were based on reasonable grounds, there were reasonable grounds for each Opinion Representation given “the undisputed evidence of the circumstances of each case identified below”.

98    Mazda contends that irrespective of whether it relied upon a matter at the time, the primary judge ought to have found that it had reasonable grounds for each of the Opinion Representations because:

c.    no Consumer had proved, the ACCC's case did not involve seeking to prove (J[7]) and the trial judge therefore did not find, and Mazda did not at the relevant time accept, that they were entitled to a replacement vehicle or refund under the ACL and Mazda was therefore entitled to refuse to provide a replacement vehicle or full refund to each Consumer;

d.    the expiration of the ACL rejection period, damage to the vehicle and the failure of any Consumer to prove an ACL entitlement.

99    Mazda submits that the misrepresentation case advanced by the ACCC included the following fundamental misconceptions that it alleges were adopted by the primary judge and underpinned many of his Honour’s alleged erroneous findings:

(a)    statements of opinion that Consumers had no right to a refund or replacement vehicle at no cost were misleading notwithstanding that the ACCC had not alleged and the primary judge had not found that such a right existed; and

(b)    Mazda could only prove that it had a reasonable basis to make an opinion representation if it had undertaken a review in accordance with its documented processes and correctly applied the law and facts.

100    Mazda submits that given the ACCC’s abandonment of any case that the Consumers had established an entitlement to a refund or replacement vehicle under the ACL it must follow that Mazda had reasonable grounds for making the Opinion Representations because (a) the Consumers had not established that the faults with their vehicles were major failures, and therefore, (b) the Consumers were not entitled to a refund or replacement vehicle under the ACL.

101    Mazda also submits that despite the primary judge’s recognition that the ACCC had not established that any Consumer was entitled to a refund or a replacement vehicle at no cost, “a number of” the findings by the primary judge were made on the assumption that the Consumer’s vehicle had suffered a major failure or the Consumer was otherwise entitled to reject their vehicle.

ACCC’s submissions

102    The ACCC submits that the contention that it was necessary to establish that Consumers were entitled to a refund or replacement vehicle in order to “prove” or “meet their onus” misapprehends the relevant enquiry. It submits that the relevant questions to be addressed for the ACL Representations, was whether they were correct by reference to the provisions of the ACL and for the Opinion Representations, turned on whether they were reasonably held at the time they were conveyed. It submits that neither case required the ACCC to prove that Customers were entitled to a refund or replacement vehicle at no cost.

103    The ACCC submits that the relevant inquiry is whether Mazda had reasonable grounds for holding the opinions conveyed by the Opinion Representations, not whether the Consumers were entitled to a refund or replacement vehicle at no cost under the consumer guarantee provisions in the ACL. It submits that the absence of any finding that the Consumers were entitled to a refund or replacement vehicle at no cost under those provisions and the expiry of the ACL rejection period are not relevant to that inquiry.

104    The ACCC submits that (a) any recognition of an entitlement to commence legal proceedings against Mazda cannot alter the false or misleading nature of the Representations, (b) the alleged clarification or correction of false or misleading statements in the same communication cannot be established on the unchallenged facts found by the primary judge, (c) the primary judge did not wrongly assume that vehicles had suffered “major failures”, and (d) the primary judge did not proceed on the basis that it was “decisive” that Mazda failed to follow its own internal processes or to evaluate the law correctly, rather the failures to follow internal processes formed part of the relevant context, but was not decisive.

Consideration

105    Although the ACCC initially sought to advance a case that the Opinion Representations were statements of fact and were false, that case was subsequently abandoned by the time the hearing before the primary judge commenced. Having abandoned that case, the objective truth of the matters the subject of the Opinion Representations was no longer relevant. Irrespective of whether in fact the faults with the Consumers’ were major failures under the consumer guarantee provisions of the ACL and irrespective of whether in fact the Consumers were entitled to a refund or a replacement at no cost under those provisions, the ACCC could succeed if it was able to establish that the information available to Mazda at the time each Opinion Representations was conveyed, did not objectively provide Mazda with reasonable grounds to express the representation.

106    In Australian Competition and Consumer Commission v Dateline Imports Pty Ltd [2014] FCA 791, Rangiah J found at [268], [269] and [276] that in order for the ACCC to establish an absence of reasonable grounds for the respondent to make representations directed at the absence of toxic or dangerous chemicals in a hair straightening product, including formaldehyde, and representations that the product was safe for use and complied with health and safety regulations, it was necessary for the ACCC to prove that the representations were not true.

107    The Full Court overturned those findings in Australian Competition and Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114. Their Honours (Gilmour, McKerracher and Gleeson JJ) concluded at [95]:

The ACCC submits, correctly in our opinion, for reasons which we will shortly explain, that even assuming that it did not establish that these representations were false, it does not follow from that conclusion that at the time of making the representation, Dateline and Mr Taylor had reasonable grounds to make it.

108    In Dateline, the ACCC had characterised the underlying representations made by the respondent as representations of fact not opinion. Nevertheless, we consider that the following passages in Dateline apply with equal force where the relevant enquiry arises in circumstances where it is alleged that reasonable grounds are represented, by implication or otherwise, for a representation of opinion:

98    Dateline submits that its success on the truth of the underlying representation is enough to defeat these grounds. In other words, so long as the represented fact is right, Dateline submits that the ACCC has not shown that it was misleading or deceptive for Dateline to have made the representation on incomplete or wrong reasons that it believed were correct and complete, and did not include the reasons showing it to be correct.

99    We do not accept this submission. It is not a question as to Dateline’s subjective belief. Rather, the representation that Dateline had reasonable grounds for making the several representations of fact is to be considered in light of the grounds which Dateline actually then knew and whether those grounds, objectively, were reasonable.

100    There will not be reasonable grounds for making a representation if, at the time of making, it, the representor did not have facts sufficient to induce, in the mind of a reasonable person, a basis for making the representation: Australian Competition and Consumer Commission v Jones (No 5) [2011] FCA 49 at [32]–[33]; George v Rockett (1990) 170 CLR 104at 112.

101    It matters not that it transpires, in due course, that the fact represented is true. That may simply be serendipitous. The representation, “I have reasonable grounds“ for making the representation of fact is a discrete representation, indeed one which is likely to reinforce in the representee the reliability of the representation of fact.“

102    Moreover the reasonable grounds representation is also one of fact. It is not directed to grounds which may become known but are not then known. Consumers should be protected against such conduct where, in fact, objectively assessed, there were no reasonable grounds known to the representor.

109    The primary judge was under no misconception as to the nature of the reasonable grounds case that the ACCC was advancing in these proceedings. As the primary judge noted at the commencement of his reasons at J [7]:

The allegation that Mazda made the representations that certain faults with Mazda vehicles owned by the consumers were not “major failures” to comply with a consumer guarantee was narrowed during the course of the hearing. The ACCC’s case did not involve seeking to prove that the relevant vehicles in fact suffered major failures within the meaning of the ACL. Rather, its case was that Mazda misrepresented the position as to the consumers’ legal rights because Mazda’s customer representatives expressed an opinion that there was no major failure, in circumstances where they could have had no basis for holding such an opinion, because Mazda had not considered whether or not the issues complained of were, in fact, major failures. The ACCC submitted such statements about the exercise of rights were misleading or deceptive because the opinion was not genuinely held and there was no reasonable basis for it, citing Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; and Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 at [598].

110    The primary judge did not find that Mazda could only prove that it had a reasonable basis to make an opinion representation if it had undertaken a review in accordance with its documented processes and correctly applied the law and facts. The primary judge did not proceed on the basis that the failure of Mazda to follow its own procedures was a sufficient or necessary condition to his Honour’s findings that Mazda did not have reasonable grounds to make the Opinion Representations.

111    Rather, the primary judge focused on the failure of Mazda to undertake any consideration of whether the consumer guarantee provisions in the ACL may have been engaged by the serious and persistent faults notified by the Consumers to the Mazda customer service representatives. The primary judge identified at J [11(1)] the first of what he considered were the four main areas in which the characterisation of the facts (and thus the outcome of the misrepresentation and the unconscionable conduct cases), was disputed. This was whether or not:

Mazda gave any proper or genuine consideration to whether the individual customers were entitled to a refund or replacement car;

112    The primary judge found at J [141] in the context of his general observations about the unconscionable conduct claims:

I also reject Mazda’s assertion that the round table and executive panel processes, which even Mazda conceded (eg in its “Summary of respondent’s key propositions” document, filed on 14 July 2021) were “imperfectly undertaken” and “imperfect”, were nonetheless “authentic” attempts to “ensure an informed and rational decision was made in response” to what Mazda insisted were “unsubstantiated assertion[s] of a statutory right”. As the evidence will show, at no point did the round table or executive panel processes make any genuine attempt to consider and apply the consumer guarantee provisions of the ACL to the circumstances of the individual consumer. That is, of course, a very unsatisfactory state of affairs, including because Mazda by doing so did not comply with its own internal ACL compliance standards and processes. Again, however, it seems to me that such failings are more appropriately characterised as very bad management, rather than unconscionable conduct.

113    More directly in the context of the findings made by the primary judge with respect to the specific Representations that he found were made to the Consumers, his Honour stated at J [823] with respect to Representations that he found were conveyed to LC:

It seems to me that Mazda’s characterisation of the exchanges between Mr Marshall and LC is unrealistic. Construed in context, in my view, the impugned statements do convey the representations alleged, and Mr Marshall could not have had a reasonable basis for saying what he did because there was no evidence that anyone at Mazda ever gave LC’s request for a new vehicle any apparent consideration, which was surely warranted in circumstances where the transmission had failed after four months and Mazda had noted it as an “ACL” failure (see [782] above).

114    The primary judge did not make the error alleged. It follows this general overarching ground must be rejected.

Ground 5

Mazda’s contentions and submissions

115    In Ground 5 of its notice of appeal Mazda contends that the primary judge erred in finding that:

a.    Mazda did not press its position that the ACCC's case at trial was not the case on notice (J[17]-[19]); and

b.    the ACCC's case as conducted was fairly disclosed in its amended concise statement (J[22]).

and contends that the primary judge should have found that:

c.    the ACCC, by raising an argument in closing address for the first time that alleged statements of opinions were not in fact held (J[7]), did not fairly disclose its case; and

d.    in circumstances where Mazda objected on the basis that the conduct of its case was thereby prejudiced;

he would not, as a result, decide any issue on the basis of the ACCC's changed position.

116    The written submissions of Mazda in support of Ground 5 focus on a finding by the primary judge at J [834] that there was no evidence that a “senior representative” meeting that a Mazda customer service representative referred to had ever taken place. It submits that this amounted to a finding of dishonesty from a person who was not called to give evidence and that procedural fairness required a party to be put on notice of the case it has to meet, particularly where the allegation is akin to fraud. It submits that in response to Mazda’s objections in its written closing submissions (a) the ACCC expressly disavowed in its oral closing submissions the allegation of dishonesty made in the ACCC’s written closing submissions, and (b) the primary judge erred by concluding that its objections were not pressed because Mazda did not repeat the objection in its oral closing submissions.

ACCC’s submissions

117    The ACCC submits that the primary judge was correct in finding that it had provided a fair disclosure in its written and oral opening submissions of the case it advanced in respect of both the misrepresentations and the unconscionable conduct case. It further submits that the impermissible alleged finding of dishonesty is irrelevant to Ground 5.

Consideration

118    It may be accepted that in some cases it is permissible to draw an inference that a written submission not repeated or referred to in oral submissions has been abandoned. The primary judge’s reasons, however, did not depend on drawing such an inference.

119    The primary judge noted at the outset of his reasons the objection by Mazda in its written closing submissions that the case now advanced by the ACCC in its closing submissions was not the case that it was on notice of having to meet as set out in the ACS. He explained that the objection was directed at the ACCC’s contention that the Representations alleged in the ACS at [11(a)] and [11(b)] were statements of opinion relating to specific vehicles rather than statements of facts and Mazda did not have reasonable grounds for making them. The primary judge considered that he was entitled to infer that the objection had been abandoned because there was no reference to it in Mazda’s oral closing submissions.

120    The primary judge, concluded, however, even if he was wrong to draw an inference that the objection was not pressed, he was satisfied that there had been a fair disclosure in the ACS and in both the ACCC’s written and oral opening submissions of the cases that the ACCC was advancing. The primary judge stated that it was (a) important to recognise that concise statements perform a different role to pleadings, (b) an applicant could refine its precise case in opening: see Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2021) 287 FCR 388; [2021] FCAFC 121 at [144] (McKerracher and Colvin JJ) (reversed on appeal in Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2022] HCA 38 but not on this point), and (c) the ACCC in its outline of opening submissions at [64] had expressly stated:

[t]he representations made by Mazda as to the [c]onsumers’ rights as to the faults with the [v]ehicles should be characterised as statements of opinion which carried an implied representation that Mazda had a basis for them and reasonable grounds for them.

121    This approach is correct. Further, as submitted by the ACCC, the alleged impermissible finding of dishonesty has nothing to do with Ground 5 as expressed, which is directed at a complaint that Mazda was not on notice of the opinion and absence of reasonable grounds contentions with respect to the Opinion Representations, not the credit of a “senior representative” of Mazda who had not given evidence in the proceeding.

122    It follows for these reasons, that this ground must be rejected.

Ground 6

Mazda’s contentions and submissions

123    In Ground 6 of its notice of appeal, Mazda contends that contrary to the findings of the primary judge, the ACL Representations alleged in ACS [11(c)] (Mazda was entitled to repair vehicles regardless of the number/duration of attempts to repair faults or consumers’ rejection of vehicles and/or Mazda had an obligation to repair vehicles under the ACL) were not conveyed by implication from discussions of matters relating to the repair of the Consumers’ vehicles and were not representations about consumers’ rights generally under the ACL.

124    Mazda submits that a proper evaluation of the Representations to the effect of ACS [11(c)] required careful attention to the context and words relied upon by the ACCC. It submits, by reference to one of the Representations made to RC, that the “plain meaning of what was said concerned the feasibility of repair” and that references to the “fixability” of a vehicle did not convey any implied statements about legal rights generally. It submits that it does not follow from any earlier references to possible ACL rights that all subsequent discussions were concerned with ACL rights rather than matters such as the “practical possibility of effective repair”.

ACCC’s submissions

125    The ACCC accepts that whether Representations to the effect of ACS [11(c)] were directed at consumers’ rights generally under the ACL requires careful attention to the context and words relied upon as giving rise to the Representation, but submits that was a task that was undertaken by the primary judge. It submits that Mazda’s contentions that the statements made by its customer service representatives were not directed at consumer’s rights generally under the ACL relied on non-contextual, excessively literal and unrealistic interpretations of what was said in the course of conversations between Mazda customer service representatives and the Consumers.

Consideration

126    It is convenient to address Ground 6 where it is specifically relied upon in support of the Grounds directed at the ACS [11(c)] Representations that were found to have been made to RC and CT/MT. It is necessarily dependent on the specific context in which each Representation is alleged to have been made.

127    For reasons that are not readily apparent, Mazda only sought to rely on Ground 6 for two of the five ACS [11(c)] representations made to RC and CT/MT.

Ground 7

Mazda’s contentions and submissions

128    In Ground 7 of its notice of appeal, Mazda contends that the Representations alleged to have been made to the effect of the Representation alleged in ACS [11(d)] (Mazda was not required to provide a refund or replacement vehicle at no cost to consumers because of the age and/or mileage of their vehicles) were:

(a)    not conveyed by implication from discussions that were only concerned with the amount of offers being made to Consumers, not with any entitlement of the Consumers to compensation, and in circumstances where it was not in dispute that the Consumers had not proved they were entitled to any compensation, a complete refund or a replacement vehicle; and

(b)    not misleading or deceptive, or likely to mislead or deceive in circumstances where:

i.    the Consumers had not proved (and the trial judge did not find) that the symptom being exhibited by their Vehicle existed at the time of supply; and

ii.    as the expert evidence demonstrated, the age and mileage of the Vehicle was directly relevant to the likelihood that a symptom being exhibited by the vehicle was caused by a fault which existed at the time of supply; and

iii.    as a result, the age and mileage of the Vehicle was directly relevant to the question of whether Consumers might ultimately be found to be entitled to a refund or replacement vehicle.

129    Mazda submits that it should have been uncontroversial that any entitlement to compensation under the consumer guarantee provisions of the ACL (a) becomes “less likely with age and use as a matter of mere symptomology involving mechanical diagnosis”, and (b) a material fault is “inherently and more readily considered to be a major failure in a new low mileage vehicle”. It submits that the primary judge recognised at J [129] the forensic difficulty of making out a case brought under the ACL for older vehicles and vehicles that had undergone multiple repairs but then erroneously found that the expert witnesses had concluded that “factors to do with age and use were not relevant to any of the vehicles at issue”. Moreover, Mazda submits that in any event, the experts concluded that age and use of vehicles would need to be investigated before reaching any conclusion that any form of liability, let alone, that a need for a full refund or replacement vehicle had arisen.

ACCC’s submissions

130    The ACCC submits that Ground 7 and the submissions advanced by Mazda in support of the ground are irrelevant. It submits that the primary judge was clearly correct in finding a false representation in the form of an ACS [11(d)] Representation was conveyed to RC. It points to the history of issues leading to the failure of RC’s vehicle at high speed and the need for an engine replacement and “the fact that Mazda failed to give any proper or genuine consideration to whether RC was entitled to a refund or replacement car under the ACL, including failing to seek technical advice, at the time the Opinion Representations were made”.

Consideration

131    Whether Mazda gave any proper or genuine consideration to whether the Consumers were entitled to a refund or replacement vehicle under the ACL is not relevant to the case advanced by the ACCC with respect to the ACS [11(d)] Representations. The ACS [11(d)] case advanced by the ACCC was directed at the making of representations to the effect that Mazda was not required to provide a refund or replacement vehicle at no cost to consumers because of the age and/or mileage of their vehicles. It was alleged in ACS [12(b)] that those Representations were false because the right to a refund or replacement vehicle under s 263(4) of the ACL was not confined by the age and/or mileage of the vehicle. The primary judge recognised at J [5(4)] and [6(2)(b)] that was the case that the ACCC was advancing. The primary judge, however, did not expressly make findings that the ACS [11(d)] Representations, were false or misleading on the basis that s 263(4) of the ACL was not confined by the age and/or mileage of the vehicle.

132    By way of example, the primary judge concluded with respect to an ACS [11(d)] Representation that he had found was made to RC (referred to in the extract below as “representation 3”):

221    In my view, the ACCC was correct to contend that what Ms Miller said to RC on 27 February (set out at [203]-[204] above) constituted a representation that Mazda was not required to provide a refund or replacement vehicle at no cost to RC because of the age and/or mileage of the vehicle, for the reasons it submitted (see [207] above).

222    Representation 4 was said to arise from the statements of representations 2 and 3 “taken together”, which conveyed the false and/or misleading representation that RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL. Because I have found both representations 2 and 3 to be made out, and because they both represented that RC did not have any ability to obtain (or conversely, Mazda was not required to provide) a refund or replacement vehicle, representation 4 was also false/misleading, for the reasons submitted by the ACCC.

133    At J [207] the primary judge had stated:

The ACCC also submitted that Mazda’s statements to RC on 27 February 2018, in response to her request for a refund of the purchase price of the vehicle, that Mazda had reviewed “all the information” and was prepared to offer the sum of $12,215 for it (less than a full refund) and that this offer took into account the age and mileage of the vehicle and that cars are “actually not” like any other consumer product, conveyed, in the context in which they were said, the representation that Mazda was not required to provide a refund or replacement vehicle at no cost to RC because of the age and/or mileage of the vehicle (representation 3).

134    The primary judge found that “representation 3” was false or misleading because “it conveyed the false and/or misleading representation that RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL”.

135    Nevertheless, in addressing the ACCC’s unconscionable conduct case, the primary judge demonstrated that he accepted the ACCC’s submissions that Mazda was not entitled to take into account the age and/or mileage of a vehicle in refusing to provide a refund or replacement vehicle pursuant to the consumer guarantee provisions in the ACL, as is evident from the following findings:

255    The ACCC’s fourth point in support of its unconscionable conduct case was that Mazda sought to dissuade RC from continuing with her requests, and instead sought to negotiate a commercial outcome with her, by suggesting she trade in her vehicle for a new Mazda, instead of considering her requests under the ACL. On a number of occasions, Mazda told RC that the age and mileage of the vehicle could be taken into account when providing a remedy under the ACL – something that was obviously wrong. And even when the round table review had approved a figure to be offered, the offer put was less than that approved, treating the offer as an opportunity for further commercial negotiation.

    …

273     It can be accepted, as the ACCC submitted, that Mazda sought to dissuade RC from continuing with her requests, and instead sought to negotiate a commercial outcome with her, by suggesting she trade in her vehicle for a new Mazda, instead of considering her requests under the ACL. And Mazda was clearly wrong to tell RC that the age and mileage of her vehicle could be taken into account when providing a remedy under the ACL.

136    In grounds 1, 6 and 7 of its notice of contention, the ACCC contends with respect to some, but not all of the ACS [11(d)] Representations that if, as alleged by Mazda, the primary judge failed to provide any, or any adequate reasons for his findings, including by failing to differentiate between different Representations, each of those ACS [11(d)] Representations:

… was false and misleading or deceptive because it incorrectly represented the position under the ACL in that the right to obtain a refund or replacement vehicle under s 263(4) was not confined by the age and/or mileage of the vehicle.

137    We are satisfied that the primary judge erred in not expressly relying on those grounds in concluding that the Representations in the form of ACS [11(d)] Representations were false or misleading. This Court is in as good a position as the primary judge to find, given the absence of any age and/or mileage qualification to the right to obtain a refund or replacement vehicle under s 263(4) of the ACL, that if conveyed, each of the Representations in the form of ACS [11(d)] Representations was false or misleading.

138    In this context, we accept that the age and/or mileage of a vehicle, as acknowledged by the primary judge at J [129], might present forensic difficulties in establishing that a fault with a vehicle constituted a major failure for the purposes of the consumer guarantee provisions of the ACL but it is not a basis on which a claim for a full refund or replacement vehicle can be rejected.

139    It follows for these reasons, that Grounds 1, 6 and 7 of the ACCC notice of contention should be allowed and Ground 7 of the Mazda notice of appeal to the extent that it is relied upon as a general overarching ground must be rejected.

140    It is otherwise convenient to address Ground 7 where it is specifically relied upon in support of the Grounds directed at the ACS [11(d)] Representations that were found to have been made to RC, SB/KB and MG. The question of whether each Representation is to be implied and whether each was false or misleading is necessarily dependent on the specific context in which the Representation is alleged to have been made.

Ground 8

141    In Ground 8 of its notice of appeal, Mazda contends that contrary to the findings of the primary judge, the Representations alleged in the form of the Representation alleged in ACS [11(e)] (a major failure within the meaning of the consumer guarantee provisions of the ACL in respect of motor vehicles is limited to a failure of a major component of a vehicle) were not (a) conveyed by statements made in the context of discussions about what may or may not have been a major component failure, and (b) statements about whether the failure of a particular component was a major component failure for the purposes of the ACL.

142    Ground 8 was directed at two Representations that the primary judge found had been made to CT/MT and SB/KB.

143    The submissions of Mazda and the ACCC were directed specifically at these two Representations. It is therefore convenient to address Ground 8 in the consideration below of the more specific Grounds directed at these Representations (Grounds 22 and 27).

Ground 9

Mazda’s contentions and submissions

144    In Ground 9 of its notice of appeal, Mazda contends that the primary judge erred in finding Representations alleged in the form of ACS [11(a)], [11(b)], [11(c)] and/or [11(d)] were conveyed by implication from (a) Mazda’s refusals to provide a replacement vehicle or a full refund to each Consumer, and (b) Mazda’s offers of less than a replacement vehicle or a full refund to each Consumer.

145    Mazda advances the “basal proposition” that an offer of less than a new vehicle or refund does not of itself convey a negative representation about the existence of legal rights. It submits that the primary judge found that Representations were made in the form of ACS [11(a)], [11(b)], [11(c)] and/or [11(d)] by implication when Mazda made an offer to a Consumer of less than a full refund or replacement vehicle.

146    Mazda submits, by reference to Representations found to have been made to RC in a letter to RC dated 22 March 2018, that the reasoning of the primary judge followed four steps. First, the offer for less than a full refund or a replacement vehicle was an implied rejection of the request for a refund under the relevant ACL consumer guarantee provision, second that rejection represented to the Consumer an absence of entitlement, third the rejection was a statement of opinion, and fourth, the statement of opinion was misleading because Mazda had no reasonable basis in the absence of an inquiry as to major failure. It submits this reasoning was flawed. It says that the principal error is with the second step because the offer conveyed nothing other than what Mazda was prepared to offer. It submits that an offer may be made for various reasons and prior to any consideration of any substantive entitlement of the Consumer. Further, it seeks to show by reference to the Representations found to have been made to RC in the 22 March 2018 letter, that the rejection and the offer were separated by the adverb however and thus provided confirmation that a different topic was being addressed.

147    The ACCC submits that whether an offer conveys a negative representation about the existence of legal rights will depend on context. It submits that the RC example relied upon by Mazda fails to engage with the facts relevant to that example. In particular, these facts include the prior requests made by RC in the period leading up to the 22 March 2018 letter, not least because of the reference in the letter to those requests by the words “As discussed”, the letter confirming the rejection of those requests by the use of however, and the offer of something less than a full refund or replacement.

148    The ACCC also submits that to the extent that Mazda argues that the making of an offer is consistent with alternative explanations, those alternative explanations amount only to mere speculation, particularly when the makers of those offers were not called as witnesses.

Mazda’s reply submissions

149    Mazda submits in response to the ACCC’s submissions that the context asserted by the ACCC with respect to the RC example that Mazda had relied upon is selective and does not assist the ACCC. It submits that the ACCC’s case with respect to the Representations alleged to have been conveyed in the 22 March 2018 letter was alleged to arise “solely from the terms of the letter”.

150    It further submits that the meaning to be conveyed is to be determined objectively and therefore, the absence of evidence from the authors of letters relied upon by the ACCC misses the point. It submits that there is no reason why only one, of a number of completely plausible explanations, ought to be considered as the sole possible explanation.

Consideration

151    We do not accept that the primary judge made findings that any of the Representations were conveyed solely on the basis that the making of an offer necessarily carried with it an implied negative representation about the existence of legal rights. Nor do we accept that the ACCC’s misrepresentation cases can be construed as limited to the words expressly relied upon by the ACCC as giving rise to each Representation, divorced from the relevant context in which those words were spoken or written. In this regard, we note that a document entitled “Representations alleged to have been made by Mazda to each of the Consumers” that was provided to the Court by Mazda as an aide memoire for the purposes of the hearing of the appeal stipulated on the first page:

The summaries of the statements made to the Consumers set out in this document are sourced from the ACCC’s particulars of each alleged representation. The parties agree that in determining whether the alleged representations were conveyed by the statements made, the Court should have regard to the proper factual context of the conversation of the letter, including the full content of the particular communication and the dealings between Mazda and each of the Consumers.

152    The approach followed by the primary judge was to identify and make detailed findings, largely from the agreed facts, of the factual context, including the full content of the particular communications and the dealings between Mazda and each of the Consumers. It was in that context that the primary judge then considered whether offers made by Mazda in response to complaints and requests from the Consumers gave rise to an implied representation as to the absence of legal rights.

153    It follows for these reasons, that this ground, to the extent that it is relied upon as a general overarching ground, must be rejected.

Overview of Grounds 10 to 38

154    In Grounds 10 to 38 of its notice of appeal Mazda advances specific and detailed contentions challenging the findings of the primary judge with respect to each of the Representations:

(a)    Grounds 10 to 18 are directed at the Representations that the primary judge found were conveyed to RC;

(b)    Grounds 19 to 23 are directed at the Representations that the primary judge found were conveyed to CT/MT;

(c)    Grounds 24 to 27 are directed at the Representations that the primary judge found were conveyed to SB/KB;

(d)    Grounds 28 and 29 are directed at the Representations that the primary judge found were conveyed to MG;

(e)    Grounds 30 to 32 are directed at the Representations that the primary judge found were conveyed to TK/MK;

(f)    Grounds 33 to 36 are directed at the Representations that the primary judge found were conveyed to LC; and

(g)    Grounds 37 and 38 are directed at the Representations that the primary judge found were conveyed to EG.

155    Mazda’s written submissions in support of Grounds 10 to 38 were limited to the following at [63]:

The remaining grounds apply the above grounds as appropriate to the facts for each representation under appeal. They do so in order to assist the Court by specifically identifying the errors contended for. The Court may also be assisted by the appellant’s submissions at trial (some of which are extracted in the reasons for judgment).

156    In the course of his oral submissions, Mr Scott KC who appeared for Mazda, referred to a 12 page document entitled “Summary of Representations” that had been provided to the Court as an aide memoire on the Friday prior to the hearing of the appeal. Mr Scott then took the Court to “some instances where it may be useful to see how we read the evidence”. These “instances” did not materially travel beyond and largely replicated the contentions in the Mazda notice of appeal. The Court was provided with little real assistance from Mazda concerning the details of these appeal grounds. Nevertheless, since each of the grounds was said to be pressed, and there were multiple grounds in respect of each consumer, it is necessary for the Court to traverse all of the grounds in these reasons, despite the shorthand form with which Mazda approached them in its argument. The reasons in this section are somewhat repetitive and formulaic, because that was the nature of the challenges to them, and because of the way the ACCC’s case was presented to the primary judge, relying on individual communications as separate representations and because much of the content of the communications as between Mazda and the Consumers was also necessarily repetitive.

RC background facts

157    The primary judge made detailed unchallenged findings at J [150]-[169], largely taken from the agreed facts, of the background to the Representations that he found were made by Mazda to RC.

158    The background findings made by the primary judge can be summarised as follows:

(a)    in November 2014, RC purchased a Mazda 2 for a total price of $18,990, including accessories, government charges and insurance;

(b)    the dealer was Eagers MD Pty Ltd in Newstead, Brisbane (Eagers Mazda);

(c)    in the period between August 2015 and June 2017 the engine warning light in her vehicle illuminated intermittently. These issues were not recorded in any of the dealer’s service records prior to 22 August 2016;

(d)    in early September 2017, RC was driving on the Centenary Highway to Ipswich at around 100 km per hour when her vehicle lost power and the lights on the dashboard, including the engine light, began to flash, RC estimates that the speed of the car dropped down to 50 km per hour in about 4 seconds;

(e)    RC’s vehicle was then towed to Eagers Mazda and RC informed them that she was going overseas for a month and told them to keep the vehicle unless “[it was] going to be fixed”;

(f)    on 5 October 2017, RC returned from her holiday and contacted Eagers Mazda. She was told “we forgot about the car and have not touched it”;

(g)    on 6 October 2017, RC spoke to a Mazda employee and advised him that she needed her vehicle for work, complained about the lack of action by Eagers Mazda, stated she did not feel safe in the vehicle, did not want the vehicle unless she could be given a 100% guarantee that it was safe and requested that her case manager Ms Miller contact her; and

(h)    on or about 6 October 2017, Ms Miller spoke to Eagers Mazda and then contacted RC and informed RC that Eagers Mazda had now ordered a clutch switch, she had escalated the matter to the “Mazda Field Technical Manager” who he would oversee the work to be done by Eagers Mazda and advised RC that she would arrange for RC to be provided with a loan car by Eagers Mazda “until they can get your car back on the road”.

Ground 10

RC 1

159    Ground 10 is directed at a representation that the primary judge found was made to RC in the course of a telephone conversation between RC and Ms Marilyn Miller, a customer service representative employed by Mazda, on 31 October 2017 in the form of an ACS [11(c)] Representation (Mazda was entitled to repair vehicles regardless of the number/duration of attempts to repair faults or consumers’ rejection of vehicles and/or Mazda had an obligation to repair vehicles under the ACL) (RC 1).

160    The ACCC provided the following particulars of the statements that it relied upon as giving rise to RC 1:

Call on 31 October 2017 between RC and Ms Miller.

Mazda represented to RC, in response to RC’s query about what happens if the vehicle is “not fixable” and if “the Mazda Australia technician’s looked at it and it just continues to keep having this problem”, that the vehicle is fixable and “there hasn’t been a car that they can’t fix” and “there has never been a situation where they can’t” and “It’s just a matter of sometimes getting the right person on it long enough … to just persist”.

Principal findings and reasons of the primary judge

161    The primary judge made the following unchallenged findings with respect to the telephone call between RC and Ms Miller on 31 October 2017:

173    On 31 October, during an 18 minute telephone call between RC and Ms Miller, Ms Miller and RC discussed the various steps the dealer had taken to fix the misfire problem. RC observed that it was “now week eight that I’ve been without my car”. She then asked, “at what point – if it – if it keeps happening, like, what the next step is because obviously if it keeps happening it’s an issue that isn’t fixable”. She said she was too scared to drive the vehicle and that it was a “ticking time bomb”. She expressed misgivings about continuing with a loan car because it had a $1,000 insurance excess, $600 more than that which applied to her own car. RC sought a timeframe from Ms Miller. RC said that she was concerned that the dealership was unable to fix the vehicle. Ms Miller said she “can’t guarantee you – that this car … won’t have a problem sometime in the next six months”.

174    RC then asked, “So what happens if it’s not fixable though?” Ms Miller replied, “It will – it’s fixable. Yeah”. The following exchange ensued:

RC:    … if Mazda – the Mazda Australia technician’s looked at it and it just continues to keep having this problem …

Ms Miller:    Mmm hmm.

RC:        … what – what do you normally do in that instance?

Ms Miller:    There hasn’t been a car that they can’t fix.

RC:        Mmm.

Ms Miller:    There has never been a situation where they can’t. It’s just a matter of, ah, sometimes getting the right person on it long enough … to just persist, just absolutely persist. I mean, they’ve - they’re doing everything they possibly can and are capable of doing at this - at this stage.

RC:        Yeah.

Ms Miller:     If it plays up again, um, I - I guess we just reassess the whole situation …

RC:        Yeah.

175    Later in the call, Ms Miller asked RC, “would you consider maybe trading it in on another Mazda2 with Eagers?” RC said, “Potentially. Yeah. I mean, I guess that’s the thing. Like, it would be an idea. Like, I’d like to do that … but part of me is scared to have a Mazda again”. Ms Miller said, “If it happens again I think, you know, again, we have to look at it on … its merits”. RC said she was concerned about the trade-in price given “it’s having all these problems”. Ms Miller then said “… in all honesty. It actually makes no difference to the trade-in price”. Ms Miller then referred to the fact that the car had been regularly serviced, adding “it’s in good nick, it’s got low k’s, it’s young, you’re going to get good money for it”. Later, Ms Miller said, “Unfortunately that’s all I can advise you … I wish I could give you a magic answer”.

162    The primary judge concluded at J [179] that the following statements made by Ms Miller in the course of her telephone call with RC on 31 October 2017 conveyed, by necessary implication, a representation that RC had no ability nor right under the ACL to reject her car:

(1)    RC’s car was fixable;

(2)    there had not been a car that Mazda technicians could not fix;

(3)    there had never been a situation where the technicians could not fix a car; and

(4)    it was just a matter of persisting to get the right technician on the matter long enough.

163    The primary judge rejected Mazda’s submissions that Ms Miller’s statements were limited to the possibility of repairing the vehicle from a mechanical point of view, not a statement about a consumer’s rights from a legal point of view. The primary judge found that Mazda’s submissions on this issue relied on an “altogether too literal and unrealistic, non-contextual reading” of Ms Miller’s statements.

164    The primary judge found that it must, or ought to, have been obvious to Ms Miller that RC had a potential claim under the ACL and that RC was making a request or demand under the ACL. His Honour found that her responses to RC by necessary implication conveyed RC 1 and “nothing that Ms Miller said remotely conceded, or admitted the possibility of, such an ability or right” to a full refund or replacement vehicle. The primary judge dismissed, as “a ridiculous characterisation of the conversation”, the submissions made by Mazda to the effect that Ms Miller and RC were debating “the threshold question of the possibility and efficacy of repair” and that Ms Miller’s responses to RC were “responsive to RC’s stated concerns about the topic”: at J [181]-[182].

Mazda’s contentions and submissions

165    Mazda submits that the response by Ms Miller was not an answer to the question posed by RC but rather an answer to the premise to the question – the premise being whether the vehicle could be fixed. Mazda submits that Ms Miller’s response was a “reassuring statement to do with the repairability of the vehicle” that was not connected to the consequence of it not being repaired. It submits that the comment “if it plays up again, I guess we just reassess the whole situation” is confirmatory of the opposite effect of the Representation alleged.

166    Mazda otherwise contends with respect to RC 1 that it related to the possibility of repairing the vehicle from a mechanical point of view and it was not a statement about the existence or otherwise of legal rights generally under the ACL. In advancing these contentions, Mazda repeats Ground 6.

Consideration

167    We do not accept that the responses from Ms Miller could fairly be characterised as a simply “reassuring statement to do with the repairability of the vehicle”. The statements were made in response to a specific enquiry as to what would be the position if the fault could not be fixed. In that context, it was open for the primary judge to find that Ms Miller’s response conveyed, by necessary implicaton, that Mazda was entitled to continue with its attempts to repair the vehicle, and further that the customer was not entitled to either a replacement vehicle nor to a refund.

168    Further, we are satisfied that the statement that there would be a “reassessment” of the “whole situation” was more likely to convey the impression that further and alternative repair methods would be pursued by Mazda if the current proposal was not successful. The reference to a reassessment was certainly not confirmatory that RC would then be entitled to a replacement vehicle or a full refund. Those alternatives were not offered to RC, nor was it suggested in the 31 October 2017 telephone call that either might be a possible outcome.

169    We are otherwise satisfied for these reasons and the reasons advanced above with respect to Ground 6, that it was open for the primary judge to find that (a) the statements made by Ms Miller conveyed RC 1 and (b) RC 1 was false or misleading.

170    It follows for the reasons given, that Ground 10 must be rejected.

Ground 11