Mazda v ACCC ‘unconscionable conduct’ ruling upheld by Federal Court


The Full Federal Court has dismissed appeals from both Mazda and the Australian Competition and Consumer Commission (ACCC) concerning a ruling it made in November 2021.

The ACCC had appealed the ruling, arguing Mazda did in fact engage in unconscionable conduct in its dealings with nine consumers.

Mazda, in contrast, appealed the Court’s ruling as it argued it didn’t make 49 false representations to consumers about their consumer rights.

“I accept that this evaluative judgment is contestable and generally the case was made harder by the ACCC than it could have been by it not seeking to prove major failure or advancing a “system” case,” concluded Justice Lee in his ruling, calling the ACCC’s case “prolix, repetitive and complex”.

The Justice did, however, say Mazda’s conduct towards one of the affected owners “was not only seriously wrong, but of such a character that according to prevailing norms of conducting Australian business, it cannot be regarded as being conscionable”.

The case will be referred back to the trial judge for a hearing at a later date concerning the penalties and orders sought by the ACCC.

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“Mazda is pleased that the Federal Court by majority has upheld Justice O’Callaghan’s finding that it did not engage in unconscionable conduct,” said a spokesperson for Mazda Australia.

“This decision is an acknowledgment that Mazda acted within the law and that Mazda was, and remains committed to ensuring that its customers are treated fairly within the law.

“We are disappointed that the Court upheld Justice O’Callaghan’s finding that it engaged in misleading conduct and are carefully reviewing the Court’s decision in that regard.”

The Court hasn’t yet handed down a penalty to Mazda Australia. Previous cases brought by the ACCC, however, have led to court-enforceable undertakings from Volkswagen, Holden, and Hyundai designed to improve their compliance with Australian Consumer Law.

The consumer watchdog now says it will “carefully consider the Full Court’s judgment”.

“We appealed this case because we believe that it is not acceptable business practice for businesses to give consumers the ‘run around’ and discourage consumers from pursuing their rights for a refund or replacement vehicle,” ACCC Commissioner Liza Carver said.

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Camera IconSupplied Credit: CarExpert

The nine consumers at the centre of the case had requested a refund or replacement vehicle from Mazda after experiencing recurring and serious faults within the first year or two of ownership.

One customer had their Mazda’s engine replaced three times, but continued to experience problems with their car.

The ACCC had alleged Mazda pressured consumers to accept offers below what they were entitled to after repeated repairs failed to resolve issues with its vehicles, and instituted proceedings against the company in October 2019.

It filed an appeal on 14 April 2022, a few months after the Court handed down its decision.

In his November 2021 ruling, Justice O’Callaghan found Mazda’s conduct represented “appalling customer service” but rejected the ACCC’s allegations of unconscionable conduct.

“The fact that Mazda did not always give the consumers precisely what they were seeking was not unconscionable conduct,” said Federal Court Justice O’Callaghan in the ruling.

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Camera IconSupplied Credit: CarExpert

The Court found the company made 49 individual false or misleading representations about consumer rights to customers seeking refunds for Mazda 2, 6, CX-3, CX-5, and BT-50 vehicles with recurring faults.

Federal Court Justice O’Callaghan found Mazda represented to customers they were only entitled to a repair, offered to refund only a part of the initial purchase price, or offered replacement cars to the customers on the condition they paid for them.

“The Court found that Mazda misled these consumers about their consumer guarantee rights by representing that they were only entitled to have their vehicles repaired, even though a consumer’s rights under the Australian Consumer Law also include a refund or replacement when there is a major failure,” the ACCC said in a statement.

“Mazda did not follow its own compliance policies in dealing with the consumers’ complaints, and sought to discourage consumers from pursuing their right to a refund or a replacement vehicle,” Ms Carver alleged.

MORE: Mazda, ACCC both appeal Federal Court ruling



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