Federal Court of Australia

Australian Competition and Consumer Commission v Honda Australia Pty Ltd (No 2) [2023] FCA 1655

ORDERS

THE COURT DECLARES THAT:

1.    Between about 1 February 2021 and 26 April 2021, the respondent (Honda), in trade or commerce:

(a)    in connection with the promotion and supply of automotive servicing and repair services to Australian consumers, made false or misleading representations concerning the availability of facilities for the repair of vehicles, in contravention of s 29(1)(j) of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law); and

(b)    engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the Australian Consumer Law;

by:

(c)    sending service reminder emails and text messages (Service Reminder Communications) to customers of Brighton Automotive Holdings Pty Ltd (Astoria) and Tynan Motors Pty Ltd (Tynan) that represented that Astoria or Tynan (as applicable):

(i)    would close or had closed; and

(ii)    would no longer service, or were no longer servicing, Honda vehicles,

when in fact:

(d)    Astoria and Tynan were not closing, did not close, and during that period continued to operate vehicle servicing departments and were able to service, repair and provide spare parts for vehicles, including Honda vehicles.

2.    Between about 1 April 2021 and 26 April 2021, Honda, in trade or commerce:

(a)    in connection with the promotion and supply of automotive servicing and repair services to Australian consumers, made false or misleading representations concerning the availability of facilities for the repair of vehicles, in contravention of s 29(1)(j) of the Australian Consumer Law; and

(b)    engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the Australian Consumer Law;

by:

(c)    sending Service Reminder Communications to customers of Buick Holdings Pty Ltd (Burswood) that represented that Burswood:

(i)    would close or had closed; and

(ii)    would no longer service, or were no longer servicing, Honda vehicles,

when in fact:

(d)    Burswood was not closing, did not close, and during that period continued to operate a vehicle servicing department and was able to service, repair and provide spare parts for vehicles, including Honda vehicles.

3.    Between 24 December 2020 and 15 April 2021, Honda, in trade or commerce:

(a)    in connection with the promotion and supply of automotive servicing and repair services to Australian consumers, made false or misleading representations concerning the availability of facilities for the repair of vehicles, in contravention of s 29(1)(j) of the Australian Consumer Law; and

(b)    engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the Australian Consumer Law;

by:

(c)    call centre staff acting on Honda’s behalf making statements to callers that represented that Astoria, Tynan or Burswood:

(i)    would close or had closed; and/or

(ii)    would no longer service, or were no longer servicing, Honda vehicles,

when in fact:

(d)    Astoria, Tynan and Burswood were not closing, did not close, and during that period continued to operate vehicle servicing departments and were able to service, repair and provide spare parts for vehicles, including Honda vehicles.

THE COURT ORDERS THAT:

4.    Within 45 days, Honda pay to the Commonwealth a pecuniary penalty of $6,000,000 in respect of its conduct declared to be contraventions of s 29(1)(j) of the Australian Consumer Law.

5.    Within 45 days, Honda pay 90% of the applicant’s costs of the proceeding, as agreed or taxed.

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

REASONS FOR JUDGMENT

MOSHINSKY J:

1    On 15 December 2023, I gave judgment in this proceeding: Australian Competition and Consumer Commission v Honda Australia Pty Ltd [2023] FCA 1602. These reasons, which deal with the issue of costs, should be read together with those reasons. I will adopt the abbreviations used in the 15 December 2023 reasons in these reasons.

2    In the 15 December 2023 reasons at [134], I set out a proposed form of declarations. Both parties have included declarations in that form in their minutes of proposed orders. I will therefore make declarations in that form.

3    There is no issue between the parties as to the time for payment of the pecuniary penalty. Both parties have included in their minutes of proposed orders that the pecuniary penalty be paid within 45 days. I will make an order in those terms.

4    There is an issue between the parties as to costs. The ACCC contends that there should be an order in its favour for the costs of the proceeding. Honda contends that the appropriate order is that the parties bear their own costs of the proceeding.

5    The parties have filed written submissions in support of their proposed orders.

6    Section 43(3)(e) of the Federal Court of Australia Act 1976 (Cth) provides that an award of costs may be made in favour of, or against, a party whether or not that party is successful in the proceeding.

7    The principles relating to costs are well established. It is sufficient for present purposes to refer to the summary of those principles in Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd (No 2) [2017] FCAFC 158 at [10]-[11].

8    In my view, the starting point in considering the question of costs in the present case is that the ACCC was successful in the proceeding in that it obtained declaratory relief and a pecuniary penalty order.

9    The main issue at the hearing was the amount of the pecuniary penalty to be imposed. Most of the evidence and most of the submissions were directed to that issue. The ACCC sought a penalty in the range of $7 million to $9 million, while Honda proposed a penalty in the range of $1 million to $3 million. The penalty ultimately imposed was $6 million. This amount is close to that sought by the ACCC. I consider that the ACCC was substantially successful in respect of the main issue in dispute. To the extent that Honda submits that “neither party can fairly be said to have succeeded”, I do not accept that submission. In my view, the ACCC was substantially successful in relation to the issue of penalty. This supports there being a costs order in the ACCC’s favour.

10    Honda made substantial admissions, with the consequence that most of the alleged contraventions were agreed. This substantially reduced the hearing time. I accept that, as Honda submits, there is a public interest in encouraging compromises in litigation, so as to save Court time and resources. However, it remains the case that the ACCC was successful in obtaining declarations of contravention in respect of the admitted contraventions. I do not consider the fact that Honda made substantial admissions to provide a basis to reduce the costs that would otherwise be ordered in the ACCC’s favour.

11    There was a dispute between the parties as to whether certain communications contravened the relevant statutory provisions: see the 15 December 2023 reasons at [10]. In relation to these communications, I concluded that Honda did not contravene ss 18 and 29(1)(j) of the Australian Consumer Law: see the 15 December 2023 reasons at [12(a)]. This was a relatively minor issue in the context of the hearing. Only a small part of the evidence and submissions related to this issue. I consider it appropriate to make a small adjustment to the costs that would otherwise be ordered in the ACCC’s favour on account of the outcome on this issue. In my view, an appropriate adjustment is to reduce the costs that would otherwise be ordered in the ACCC’s favour by 10%.

12    In light of the above, I consider the appropriate costs order to be that Honda pay 90% of the ACCC’s costs of the proceeding. I will provide for these costs to be payable within 45 days, being the same period as that for the pecuniary penalty order.

Associate:

Dated:    22 December 2023