Mitsubishi decision sets dangerous precedent

The recent decision by the Supreme Court of Victoria to uphold the finding of the Victorian Civil and Administrative Tribunal (VCAT) that Mitsubishi Motors Australia Limited (MMAL) and one of its Dealers had deceived and misled a consumer with the vehicle’s fuel labelling sticker, sets a dangerous precedent.

In June 2019, the owner of a 2016 Mitsubishi Triton brought a case before VCAT alleging that the fuel consumption figures on the ADR-prescribed label were not representative of real-world results. The tribunal determined that the selling Dealer and MMAL were in breach of the Australian Consumer Law (ACL) for misleading and deceptive conduct, finding in favour of the consumer and awarding him a full refund for the purchase price of the vehicle.

MMAL appealed in the Supreme Court of Victoria but failed to have the judgement overturned.

It’s a major concern because the Manufacturer and Dealer simply obeyed the Government’s fuel labelling laws and fuel consumption testing regulations. They have done nothing other than comply with their legislative obligations.

The ACL makes no distinction between retailers or suppliers regarding liability for misleading or deceptive conduct, so this decision means Dealers will have to work closely with OEMs to ensure they are shielded from any potential liability.

AADA’s primary concern is the liability that Dealers are exposed to in selling a product that is fully compliant with all regulatory requirements but is not manufactured or tested by Dealers who have no control or influence over how a car is made and certified.

Dealers and Dealer Councils have been advised to raise the issue as a matter of urgency with their respective OEMs and ask them to:

  1. review the accuracy of their labelling and ensure no representation is made regarding it being indicative of real-world performance;
  2. provide assurance to the networks that the labelling is correct; and
  3. assure the network that the OEM will accept liability in the event of any claims.

AADA will continue working on the issue and will seek advice on the merits of a standard disclaimer for Dealers to use in relation to labelling. The AADA is also making representations to the Federal Infrastructure Department in relation to their role as the regulator of vehicle standards and their prescription of the fuel economy label.

This result also puts Manufacturers in a no-win situation. They are obliged to test to the ADR81 requirements and declare the results on a prescribed fuel label which clearly states that the results are not indicative of real-world performance. The finding that meeting their legislative obligations places them in breach of the ACL is untenable and potentially creates a dangerous precedent that other consumers could follow, especially if they are encouraged to do so by consumer advocacy groups.

This article is written by Vinesh George, Company Secretary and Legal Counsel of the AADA, and Principal of VS George Lawyers.

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