Mitsubishi Triton owner awarded full refund under Australian Consumer Law over misleading fuel consumption claims

On 27 May 2019, the Victorian Civil & Administrative Tribunal (VCAT) ordered Mitsubishi Motors Australia Pty Ltd (Mitsubishi) and a Mitsubishi dealer to pay a full refund to a customer on the basis that both Mitsubishi and the dealer contravened the Australian Consumer Law (ACL) by engaging in misleading & deceptive conduct and breaching the consumer guarantees as to acceptable quality, fitness for a disclosed purpose and supply by description in relation to the fuel consumption figures displayed on a 2017 Mitsubishi Triton purchased brand new by the customer.

In what may prove to be a very significant decision for the industry, the relevant facts in the case of Begovic v Northpark Berwick Investments Pty Ltd & Mitsubishi Motors Australia Pty Ltd are as follows:

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

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

• Mr Begovic alleged that:

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

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

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

The issues for VCAT to determine were whether:

• The fuel consumption label was misleading or deceptive;

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

• Mr Begovic was entitled to any remedy.

VCAT found that:

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

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

• based on the methodologies allowed for fuel consumption tests under the ADR, the expected variation in fuel consumption test results is small – less than 1 or 2% – and could not account for the significant variation seek in this vehicle (some 26.7% combined);

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mitsubishi has sought leave to appeal VCAT’s decision in the Supreme Court of Victoria. However, appeals from VCAT are limited to questions of law. Consequently, it will not be open to Mitsubishi to bring in new evidence on appeal that it could have brought before VCAT at first instance. For Mitsubishi to succeed on appeal, it will need to establish that VCAT made a mistake in the way in which it applied the law to Mr Begovic’s case.

This article was written by Evan Stents, Partner and Christian Teese, Senior Associate.

Evan Stents

P: +61 3 8644 3509

E: estents@hwle.com.au