Australian Competition and Consumer Commission v BMW

REASONS FOR JUDGMENT 1 Section 65C(1) of the Trade Practices Act 1974 (Cth) prohibits a corporation from supplying goods which do not comply with a "prescribed consumer product safety standard". Although there is no definition of a "consumer product safety standard", its character can be discerned from s 65C(2). According to that sub-section, regulations may prescribe a consumer product safety standard provided the standard consists of requirements relating to things such as, among others, the performance, composition or contents of goods, the testing of goods or the form or content of markings on goods which are "reasonably necessary to prevent or reduce risk of injury to any person". In addition to their promulgation by regulation, the Minister may, pursuant to s 65E(1), declare certain standards to be prescribed consumer product safety standards for the purposes of s 65C, if such standards have been "prepared or approved by the Standards Association of Australia …". Under this power the Minister declared the Australian / New Zealand Standard AS/NZS 2693:1993 - Vehicle Jacks as a "consumer product safety standard" for the purposes of s 65C. The standard covers a variety of jacks including "specific vehicle jack[s]". A specific vehicle jack is limited in its application to a specific vehicle or range of vehicles and is not intended to be used to lift a vehicle other than at specific engagement points. The standard provides that a warning notice "shall be permanently and legibly marked" on the jack "as follows, or words to the same effect": "Warning: Do not get under a vehicle that is supported only by a jack: Use vehicle support stands." 2 The respondent, BMW (Australia) Ltd, imports and sells the BMW 318i 2002 motor vehicle. The BMW 318i is supplied with a specific vehicle jack whose warning notice does not contain the words in the standard but the following message: "Warning: Do not get bodily under a vehicle that is supported by a jack!". 3 The Australian Competition and Consumer Commission brought proceedings against BMW for the purpose of obtaining orders requiring it to (1) comply with the standard; (2) recall and properly word all vehicle jacks which do not comply with the standard and (3) publish in daily newspapers and on its internet website information to the effect that its vehicle jacks do not contain the wording required by the standard. 4 Following a trial the ACCC obtained the orders it sought. BMW has appealed those orders and now seeks to stay their execution pending the determination of its appeal. Ordinarily such an application should be made to a Full Court: Australian Workers' Union v Pilkington (Aust) Ltd (2000) 101 FCR 35, 37 per Goldberg and Weinberg JJ: ("We consider that as a matter of principle it is desirable, wherever practicable, that a Full Court rather than a single judge consider any application to stay an order of another single judge of this Court pending the hearing of an appeal to a Full Court"). However, BMW did not have time to approach a Full Court because the orders made by the trial judge came into effect on 6 August 2003. In that circumstance it would have been best for the application to be returned before the trial judge who, being familiar with the issues raised, could deal with the matter with greater expediency than a judge who has no knowledge of the case: Jennings Constructions Limited v Burgundy Royale Investments Proprietary Limited [No. 1] (1986) 161 CLR 681, 684. See also CSR Ltd v Cigna Insurance Australia Ltd (1996) 70 ALJR 565, 565 per Gummow J: ("[The] primary judge is certainly well seised of the details of this rather complex transnational litigation. It was upon that footing that the primary judge was the appropriate tribunal seised of the matter that the present applicants for leave in [the High] Court went back to his Honour seeking a stay …"). In this case however, it was not possible for the trial judge to hear the application. 5 The principles which govern a court's discretion in granting a stay pending the determination of an appeal are well known: see generally Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685. Although it is not possible to state exhaustively the considerations that may be taken into account in the exercise of this discretion, it is appropriate that I mention those that bear on this application. The general rule is that a stay will be granted where there is a likelihood that a successful appeal will be rendered nugatory: Wilson v Church (No.2) (1879) 12 Ch D 454, 458. A court will also consider the balance of convenience and the competing rights of the parties as well as whether either party will be prejudiced by the stay: The Marconi's Wireless Telegraph Company Limited v The Commonwealth [No.3] (1913) 16 CLR 384, 386; Philip Morris (Australia) Ltd v Nixon [1999] FCA 1281 at [17]. Even though a judge will generally not be required to speculate about the appellants prospects of success, it is well established that a stay will not be granted in the absence of arguable grounds of appeal, or if the appeal is not bona fide: J C Scott Constructions v Mermaid Waters Tavern Pty Ltd (No. 1) [1983] 2 Qd R 243, 248; Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685, 695. It necessarily follows that a stay will not be granted if an appeal has no prospect of success: Australian Workers' Union v Pilkington (Aust) Ltd (2000) 101 FCR 35, 43. 6 BMW seeks to appeal against the first instance judgment on what can essentially be reduced to two grounds. The first is that the wording of its warning complies with the standard because it is "to the same effect" as that contained in the standard, and may even, possibly, be wider. The second ground is that the Minister's declaration under s 65E is invalid because compliance with the standard would be dangerous and it is therefore not one that is "reasonably necessary to prevent or reduce the risk of injury to any person". On this score, the notice of appeal makes reference to the trial judge's findings that there is a risk that injury will occur if a BMW specific vehicle jack is used to either place support stands under a vehicle or to investigate whether there are points underneath the vehicle where support stands may be located. Therefore BMW contends that the warning contained in the standard may lead the reader to conclude that it is safe to use the specific vehicle jack for the purpose of lifting the car in order to locate the vehicle support stands. 7 I am of opinion that the first ground has limited prospects of success. There seems to me to be a difference between a warning which states that you must not get under a vehicle when it is held in its raised position by support stands (which is what the standard requires) and one which states that you should not get under a vehicle that is supported by a jack. However, while I believe that the first ground has limited prospects of success, I cannot deny absolutely the possibility that the Full Court may accept that the express requirement of the standard is implicit in the warning that BMW placed on its jacks. 8 In virtue of this conclusion it is, strictly speaking, unnecessary for me to form any view about the merits of the second ground. I am bound to say, however, that I am by no means persuaded that it is a requirement of s 65E(1) that before the Minister may declare a standard to be a "consumer product safety standard" for the purposes of s 65C, the standard must be one which is "reasonably necessary to prevent or reduce risk of injury to any person". In my view, the only relevant criteria that a standard must satisfy for the purposes of s 65E(1) is that it be in the character of "a consumer product safety standard"; it need not be the same type of "consumer product safety standard" that may be adopted by regulations made under s 65C. One obvious standard that can be the subject of a declaration under s 65E(1), but cannot be adopted by the regulations under s 65C(2), is a standard which is designed to prevent or reduce the risk of injury to property. Such a regulation is not beyond the scope of s 65E(1) even though it is plainly beyond the regulation making power in s 65C. That is not to say, however, that a product safety standard that neither prevents nor reduces the risk of injury to any person or property, could relevantly be a product safety standard for the purposes of s 65E(1). 9 In any event, even if the standard must comply with the criteria set out in s 65C, it is not clear why the vehicle jack standard fails to meet that test. It is likely that any standard of general application will not satisfactorily cover all individual cases. That may be the position in this case. However, that is not sufficient to deny to the standard the character of a "consumer product safety standard", or of a consumer product safety standard that is "reasonably necessary to prevent or reduce risk of injury". 10 Given the remote possibility of success on the appeal, I am of opinion that BMW should only be entitled to a stay of a limited kind. The stay should be confined to those orders whose effect could not effectively be reversed if BMW were to succeed on its appeal. The orders which fall into that category are order 3 (the recall) and orders 4 and 5 (requiring the publication of notices). I do not propose to stay order 1 which requires the appellants to mark its vehicle jacks in the precise manner required by the standard. BMW will suffer no inconvenience if that is to occur, and I do not think that there is any great risk to the public if it is required to follow this course. The second order requires BMW to audit its compliance program and report its audit to the ACCC. BMW will suffer no inconvenience by having to comply with this obligation until the appeal is heard. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.