Australian Competition and Consumer Commission v Mazda Australia Pty Limited - [2023] FCAFC 45 - FCAFC 2023 case summary — Zoe

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Australian Competition and Consumer Commission v Mazda Australia Pty Limited

[2023] FCAFC 45

Federal Court of Australia (Full Court)|2023-03-23|Before: Halley JJ

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Court

Federal Court of Australia (Full Court)

Decision date

2023-03-23

Before

Halley JJ

Source

Original judgment source is linked above.

Judgment (185 paragraphs)

[1]

INTRODUCTION 1 These reasons for judgment address appeals brought by both Mazda Australia Pty Limited (Mazda) and the Australian Competition and Consumer Commission (ACCC) against orders made by a judge of this Court in Australian Competition and Consumer Commission v Mazda Australia Pty Ltd (No 2) [2022] FCA 250 for the reasons advanced by the primary judge in Australian Competition and Consumer Commission v Mazda Australia Pty Ltd [2021] FCA 1493 (J). The appeals were heard together. 2 Mazda appeals against orders made by the primary judge finding that it had contravened s 18(1) and s 29(1)(m) of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL), by making false representations (a) concerning the existence or effect of consumer guarantees and rights or remedies available under the ACL and (b) that it had reasonable grounds for expressing opinions that nine consumers who had purchased Mazda vehicles were not entitled to a refund or replacement vehicle at no cost to them under the consumer guarantee provisions of the ACL (Mazda appeal). The ACCC filed a notice of contention in the Mazda appeal. 3 The ACCC appeals against the primary judge's dismissal of its claims that Mazda had engaged in unconscionable conduct in contravention of s 21 of the ACL with respect to the nine consumers (ACCC appeal). Mazda filed a notice of contention in the ACCC appeal. 4 The two central questions for the primary judge and this Court are whether the conduct of Mazda in its dealings with the nine consumers (Consumers), in relation to their seven vehicles (three of the vehicles were jointly owned), was first, misleading or deceptive and second, whether in all the circumstances it was unconscionable. The two appeals are interrelated in that the representations that the primary judge found were false or misleading in contravention of s 18(1) and s 29(1)(m) of the ACL (Contraventions) provided the foundation for the unconscionable conduct case pursued by the ACCC. 5 The Consumers were referred to by their initials RC, CT, MT, SB, KB, MG, TK, MK, LC and EG in the reasons of the primary judge and we have followed that convention in these reasons. 6 For the reasons that follow we would allow the ACCC notice of contention but reject both the ACCC appeal and the Mazda appeal. In the circumstances, it was unnecessary to address the Mazda notices of contention.

[2]

FACTUAL BACKGROUND 7 The following factual background is taken from the undisputed factual findings of the primary judge which in turn were largely sourced from the very lengthy and detailed facts that had been agreed between the parties (agreed facts). 8 When faults with the vehicles occurred, the Consumers took their vehicles to authorised Mazda dealers. The dealers, often in consultation with Mazda, attempted to repair the faults. Although representatives of the dealers engaged with the Consumers in relation to the faults and repairs, Mazda chose to deal with the Consumers, principally via employees described as "customer service representatives" (or "customer advocates"). The Consumers were often told by the dealers to approach Mazda. Mazda says it was under no legal obligation to become involved in any communications with the Consumers, but it did so "in an effort to improve the outcome for [them]". 9 All consumer contact with Mazda (including complaints by consumers) was managed by Mazda's National Customer Support department (NCS). The NCS was divided into teams which focused on different areas of complaint. The intention of Mazda was that they were to work collaboratively to provide a satisfactory outcome for complaints by customers. 10 The NCS operated out of Melbourne. It handled all complaints and enquiries of a technical or operational nature made directly by owners of Mazda vehicles. Such owners were, in almost all cases, customers of Mazda dealers. Complaints and enquiries were received by the NCS either by telephone, email, or letters. Telephone calls were generally recorded if made to the customer support lines (an 1800 number) and were retained by Mazda for quality control purposes. Where complaints and enquiries were made through the Mazda website via the "Contact Us" page, they were directed to relevant staff within the NCS. If there was an existing record of an enquiry or complaint in Mazda's contact management system, called Maestro, the complaint or enquiry was entered into that record for review by the assigned customer advocate.

[3]

Mazda's role with its dealers 11 The dealers were the "suppliers" of the vehicles for the purposes of Div 1 of Pt 5-4 of the ACL, set out below. Mazda was the deemed manufacturer within the meaning of s 7 of the ACL. Although Mazda had no obligation to provide a refund or replacement vehicle under the ACL, it took on the responsibility for dealing with the Consumers' requests. It did so mainly because, as a rule, Mazda bore the full cost associated with any refund or the provision of a new vehicle. 12 The dealers, from time to time, "escalated" vehicle faults to Mazda. They were required to escalate "ACL" classified repairs and faults that could not be resolved "within the first 4 steps of Mazda's Technical Protocol". Repairs were classified as "ACL" prior to 2016. That terminology was replaced with "Priority Vehicle Repairs" in or about 2016. 13 Pursuant to Mazda's Service Standards (see [24] below), any technical and customer handling concerns needed to be rectified by carrying out corrective measures jointly with Mazda and by sharing information among all personnel involved. 14 Dealers were required to submit a Prior Authorisation Request (PAR) for faults in respect of which the dealer considered that Mazda had an obligation. 15 Mazda would also, from time to time, seek information from its parent company, Mazda Motor Corporation, in respect of some vehicle faults. 16 Mazda also operated a "Dealer Support Team", which comprised Technical Services and Dealer Operations teams. The technical support which Mazda provided to dealers included: (a) conducting training on some Mazda specific systems and repair procedures; (b) issuing technical bulletins, as required, which dealt with specific issues with Mazda vehicles and procedures that dealers should follow to repair "Complete Built Unit" vehicles that presented with these issues; (c) establishing a technical protocol setting out the procedure to be followed by dealers when making technical enquiries of Mazda; (d) providing a technical and warranty "help desk" for dealers to contact with technical or warranty enquiries regarding Mazda products, and responding to technical reports provided by dealers in respect of specific issues with Mazda vehicles; and (e) providing Field Technical Specialists (FTS), whose role was to provide advisory support to dealers in relation to vehicle and customer enquiries. 17 Mazda also relied on written policies, including those contained in the following documents: (a) Summary Guidelines for Responding to Consumer Warranty Questions from July 2015 (Summary Guidelines); (b) Post Major Repair / ACL Form, renamed Priority Vehicle Repair Form in February 2016, and discontinued in May 2017; (c) Warranty Bulletins; (d) Post Warranty Support Criteria; (e) Knowledge Articles (offering training to the NCS); (f) Compliance Training Materials; (g) Mazda Service Standards; (h) CCA Compliance Manual; (i) Mazda Australia Buy Back Process; and (j) Refund Process. 18 Mazda had the following technical documents which it provided to, and intended to be relied upon by, dealers and Mazda personnel to diagnose the cause of faults and undertake repairs: (a) technical bulletins; (b) diagnostic protocols; and (c) Mazda's Technical Protocol. 19 The ACCC relied on a number of Mazda's internal compliance documents in aid of its unconscionable conduct case, including the contention that departures from the relevant terms of training and similar documents was unconscionable. 20 Mazda's Diagnostics Training Slides (Diagnostics 2) were created by Mazda's Technical Training team in 2008, and were last updated in 2018. Their principal purpose was to assist in delivering a two-day technical training course to Mazda dealer technicians, and also to make dealer technicians aware of the ACL, particularly when diagnosing, repairing and servicing customer vehicles. 21 Slide 28 of the Diagnostics 2 presentation was entitled "Mazda's New VEHICLE WARRANTY" and read: - Important message from Mazda (First page in the new Warranty Booklet) - Our goods come with guarantees that cannot be excluded under the Australian Consumer Law (ACL). You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. - You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure. 22 Slide 29 was entitled "Determining ACL cases" and read: - What may constitute a Major Failure? - Concern that will make the vehicle undriveable & not quickly/easily repaired - Concern that is safety related, even if driveable - Concern that is expensive to repair - Concern requiring replacement of major component (engine, trans, diff) - Major refinishing of body work - New vehicle sale after Jan 1st 2011 23 The Diagnostics 2 slides were provided to the court in their native PowerPoint format, including speaking notes. The speaking notes to slide 29 relevantly read: "not quickly / easily repaired - any longer than 5 working days". 24 Mazda's Service Standards dated October 2017, which were intended to assist dealers in their dealings with consumers, contained references to "ACL". The Service Standards included a section entitled "ACL Service Guidelines", which provided information on the process required by dealers and Mazda for "ACL" classified vehicle repairs. The Guidelines included a flowchart with a list of relevant (ACL) "Vehicle Repairs": • Operational failures caused by major assemblies such as engines, transmissions, differential, etc. • Repeated occurrences of the same failure after the first repair • Safety [r]elated concerns • Concerns that make the vehicle not drivable; not quickly & easily repaired in a reasonable time, say, 5 working days 25 Mr Michael Robins, Mazda's General Counsel, agreed in cross-examination that ACL classified repairs were a "red flag" to consumers having a right to a refund or replacement vehicle under the ACL. 26 Mazda's July 2015 Summary Guidelines were provided to NCS staff as part of their training. They were used to train NCS staff between 2017 and 2019. Under the heading "Purpose of these guidelines" it was stated: Many customer warranty claims and questions can be dealt with easily under the terms of our factory warranties. However, in addition to those factory warranties customers also have rights under the consumer guarantees contained in the Australian Consumer Law. Those rights can extend for longer, and give greater rights to refunds and replacements, than exist under our factory warranties. Failure to honour those consumer guarantees and/or misleading a consumer about their rights under those consumer guarantees is a breach of the law. The purpose of this summary is to assist you to know when a customer has rights under the consumer guarantees and how to respond to customer queries when those rights may be involved. 27 The Summary Guidelines included a section on "Simple rules to avoid breaching the law", which included the following: • Never tell a customer that they do not have any rights or aren't entitled a remedy because the factory warranty period has expired. Remember - the consumer guarantees do not have clear time limitations, and last for a "reasonable period". What is a "reasonable period" may differ depending on the component which is defective. For example, a "reasonable period" for windscreen wiper blades will be much less than the "reasonable period" that applies to a transmission. • Never tell a customer that they do not have any rights or aren't entitled to a remedy because they did not purchase or have not been given an extended warranty. Remember - they may still be entitled to a refund, repair or replacement under the consumer guarantees. • Never tell a customer the time period for a consumer guarantee has expired - if you suspect that the vehicle is so old that the "reasonable period" for the consumer guarantees has expired, please check with Legal before you advise the customer. • Do not tell customers that they will only be entitled to a refund or replacement if they have had the vehicle repaired first. A customer will have the right to insist on a refund or a replacement where the vehicle is a "major defect". • … • Do not tell customers that you [are] providing them with a remedy as "a gesture of good will", "as a favour" or "just this once". Remember - the consumer guarantees are mandatory, it is not a choice to comply with them. • If in doubt, always seek assistance from Legal - the application of consumer guarantees can often involve difficult judgments and Legal can help. 28 The Summary Guidelines also contained a section on "Questions to ask", which included the following: To help determine whether a customer has a right under a consumer guarantee, ask: • "What is the factory warranty or extended warranty applying to the vehicle" - use this information to first determine what Mazda can do under these warranties, but remember that this will only give you part of the answer. You must consider whether the consumer guarantees apply. • "What is the problem with the vehicle?" - use this information to determine the nature of the defect and whether the defect is major or minor. A major defect is one where the vehicle is unsafe or a reasonable person would not have purchased the vehicle had they known about the fault, or a fault which cannot be repaired. For example, a fault requiring replacement of the engine would be a major defect. There are many shades of grey in between. • "How did this problem occur" - this will assist you in determining whether or not the cause of the problem is due to a manufacturing default (which is covered by the consumer guarantee), or otherwise. For example, engine seizure due to the customer's failure to have the vehicle serviced and the oil replaced may not be covered but the same engine failure occurring where the customer has ensured that the oil levels are appropriate would be covered. • "When did the customer purchase the vehicle?" - this will help you determine whether a reasonable time has passed for the fault to become apparent. • "Has the vehicle been repaired previously?" - a history of repeated repairs to the same part, or repairs to multiple parts may indicate that there is a major defect. • "What is the customer asking for?" - remember that in the event of a major defect only, it is the customer's choice of repair, replacement or refund.

[4]

How Mazda's internal structures were designed to deal with consumer complaints 29 At all material times, Mazda had the following internal structures for dealing with consumer complaints, including those of the consumers the subject of this proceeding. 30 The first point of call for consumers was with Mazda's customer service representatives. 31 Before June 2017, decisions on consumers' requests for a refund or a replacement vehicle were made in meetings called "round table reviews". These meetings could be attended by the Customer Relations Manager (Ms Han), the relevant customer service representative, the Senior Manager of Customer Support, and/or the Senior Manager Technical (Mr Bradford). Prior to April 2018, the round table made decisions as to whether a replacement or refund or other means of redress would be offered to consumers. 32 Following the introduction in April 2018 of an "executive panel review process", the round table review process continued, but it no longer had authority to make these decisions on requests for a refund or a replacement vehicle. The executive panel comprised members of the NCS and a Mazda executive. From April 2018 onwards, the executive panel made decisions as to whether a replacement or refund or other means of redress would be offered to consumers. 33 The primary judge made the following introductory findings in relation to each of the Consumers: 59 Consumer RC. RC purchased a Mazda2 in 2014, and between 2015 and 2018, had issues with the car's engine lights coming on and the car going into "limp mode" or losing power. Her evidence described her interactions with Mazda to attempt to resolve these issues, including telephone conversations with Mazda's customer representatives throughout 2017 and 2018. RC ultimately obtained a partial refund. 60 Consumers CT and MT are married. They purchased a Mazda CX-5 Akera in 2016. Their evidence described their individual interactions with Mazda about problems with the vehicle's adaptive headlights, which began five months after purchase. After seeking to repair the vehicle, CT and MT told Mazda that they no longer wanted the vehicle, at which point they contacted NSW Fair Trading and the ACCC and continued to engage with Mazda, seeking a refund or a replacement vehicle. They commenced proceedings in the NSW Civil and Administrative Tribunal (NCAT) in November 2017, which resulted in consent orders requiring Mazda to replace the vehicle. 61 Consumers SB and KB are married. They purchased a Mazda CX-5 Mazz Sport Diesel in 2013 to use as a family car, including for holidays and for SB's work. Between 2015 and 2017, they experienced a number of engine issues, including three engine failures and a starter motor failure. Initially, SB was the one who spoke with Mazda. KB became involved in August 2017. The couple lodged a complaint with NSW Fair Trading and, after further engine issues, commenced proceedings in NCAT in February 2018. Those proceedings settled, with Mazda paying SB and KB $16,000. 62 Consumer MG. MG purchased a Mazda6 in 2013, primarily to drive to work. The vehicle had three engine replacements over four years, and a number of other issues including the car displaying warning messages, the engine light coming on, a failure and subsequent replacement of the car's turbo-charger and camshaft, and the car going into "limp mode". In August 2018, Mazda offered to provide MG with an Atenza Auto Wagon in exchange for his vehicle and MG paying $17,700. MG accepted the offer. 63 Consumer TK. TK and her husband MK purchased a Mazda BT 50 in 2017 to travel around Australia with a new caravan. Their issues with the car included needing an engine replacement within five months of purchase and an intermittent stalling issue in 2018. The couple took the car to Mazda three times to fix the stalling issues. Mazda could not replicate the fault on the first two occasions; the third time, Mazda was able to replicate the fault and later gave a full refund to TK and MK for the car and its accessories. 64 Consumer LC (previously LS). LC purchased a Mazda CX-3 A 6AAkari Diesel All Wheel Drive in 2015. She deposed that she wanted a car that was reliable and safe for personal and business use. Several months after her purchase, LC experienced issues with the car losing power while driving. After discussions with Mazda, Mazda offered LC an extended warranty and free service, which she accepted in December 2017. LC said the issues with the car were ongoing as at the date of her affidavit (April 2020). 65 Consumer EG. EG bought a Mazda2 in 2014 to use for travel to work, as well as in her daily life. Her issues included the car going into "rough idle", an issue which began several weeks after purchase, and "limp mode", a problem which began in February 2018. She left her car at a Mazda dealer for repairs in early July 2018. EG had several discussions with NSW Fair Trading and Mazda, and ultimately commenced NCAT proceedings in January 2019, seeking a replacement vehicle or services to the value of the purchase price. The matter was resolved, with Mazda agreeing by consent to pay EG $303 and to provide a one year extended warranty on the car, a two year extended warranty on new parts, and three free car services.

[5]

THE CASES ADVANCED BY THE ACCC 34 The conduct relied upon by the ACCC as giving rise to its false or misleading representation case was identified in general terms in the amended concise statement (ACS) at [3] to [10]. 35 The representations that were alleged to be false or misleading were identified at ACS [11] (Representations). 36 The ACCC contended that by making the Representations to the Consumers, Mazda engaged in conduct that was misleading or deceptive or likely to mislead or deceive, in contravention of s 18(1) of the ACL and made false or misleading representations concerning the existence or effect of consumer guarantees, rights or remedies in contravention of s 29(1)(m) of the ACL. 37 The following Representations were alleged in the ACS at [11(a)] and [11(b)]: (a) the Faults [the Consumers experienced various and often recurring faults] with the Vehicles were not major failures under the consumer guarantee provisions of the ACL; (b) the Consumers were not entitled to a refund or replacement vehicle at no cost to the Consumer under the consumer guarantee provisions of the ACL; (Together, the Opinion Representations). 38 The following Representations were alleged in the ACS at [11(c)] to [11(e)]: (c) the Consumers did not have any ability under the ACL to seek to obtain a refund or replacement vehicle, because Mazda was entitled to repair the Vehicle regardless of the number of attempts made to repair the Faults or the time it took to repair the Faults, and the Consumers' rejection of the Vehicles and Requests and/or Mazda's obligation under the ACL was to repair the Vehicle; (d) Mazda was not required to provide a refund or replacement vehicle at no cost to the Consumer because of the age and/or mileage of the Vehicles; and/or; (e) a major failure within the meaning of the consumer guarantee provisions of the ACL in respect of motor vehicles is limited to a failure of a major component of the vehicle. (Together, the ACL Representations) 39 Although the ACS [11(c)] and [11(e)] Representations were stated in the ACS to be directed at the Consumers, the Representations were ultimately alleged by the ACCC to be false statements of fact about the rights of consumers generally under the ACL rather than statements of fact limited to the specific positions of each of the Consumers. 40 The ACL Representations and the Opinion Representations were alleged in the ACS at [12] to be false or misleading because: (a) the Faults [the Consumers experienced various and often recurring faults with their Vehicles] were major failures for the purposes of section 260 of the ACL, or otherwise were failures to comply with the consumer guarantees that the Consumers required to be remedied and that Mazda had not remedied at all or within a reasonable time for the purposes of section 259(2) of the ACL; and the Consumers were entitled to refunds or replacement vehicles at no cost pursuant to section 263(4) of the ACL; (b) they incorrectly represented the position under the ACL in that: the Consumers did have an ability under section 263(4) of the ACL to seek to obtain a refund or replacement vehicle; the right to a refund or replacement vehicle under section 263(4) is not confined by the age and/or mileage of the vehicle; and a major failure within the meaning of section 260 of the ACL in respect of motor vehicles is not limited to a failure of a major component of the vehicle; and/or (c) at the time the Representations were made, Mazda had not given any, or any proper, consideration to whether the Consumers were entitled to refunds or replacement vehicles at no cost pursuant to the ACL; and in circumstances where the Representations impliedly conveyed that Mazda had reasonable grounds for making the statements, Mazda did not have reasonable grounds for making the Representations. 41 As the primary judge explained at J [7], the contention that the alleged "various and often recurring faults" that the Consumers experienced with their vehicles were not "major failures" to comply with consumer guarantees was narrowed during the course of the hearing. The ACCC confirmed that it did not seek to establish that the vehicles in fact suffered major failings for the purposes of the ACL. Rather, as the primary judge explained at J [7] the case advanced by the ACCC was that: Mazda misrepresented the position as to the consumers' legal rights because Mazda's customer representatives expressed an opinion that there was no major failure, in circumstances where they could have had no basis for holding such an opinion, because Mazda had not considered whether or not the issues complained of were, in fact, major failures. The ACCC submitted such statements about the exercise of rights were misleading or deceptive because the opinion was not genuinely held and there was no reasonable basis for it, citing Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; and Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 at [598]. 42 The conduct relied upon by the ACCC in the ACS as giving rise to the unconscionable conduct case was the same conduct identified in general terms in the ACS at [3] to [10] that it relied upon for its misrepresentation case, together with the making of the Representations, as alleged at ACS [11] and [12]. 43 The ACCC contended at ACS [14] that by engaging in the conduct described in the at ACS [3] to [12], Mazda engaged in conduct, in trade or commerce, with respect to the supply of vehicles that was in all the circumstances, unconscionable conduct in contravention of s 21 of the ACL. The ACCC relied in particular on the circumstances referred to in ss 22(1)(a), (b), (d), (e), (f), (i) and (l) of the ACL. 44 The ACCC contended at ACS [15] that the circumstances of Mazda's unconscionable conduct included: (a) the Consumers were in a substantially weaker bargaining position relative to Mazda with respect to the Faults and the Requests; (ba) the Consumers were vulnerable and disadvantaged with respect to Mazda, given that they had outlaid significant amounts on purchasing the Vehicles, relied on them for their daily domestic and business obligations and were entirely dependent on Mazda as to how the Faults and Requests were dealt with; (bb) Mazda took advantage of that vulnerability and disadvantage by engaging in the conduct referred to in paragraphs (b) to (f) below; (b) the false or misleading Representations described in paragraph 11 and 12; (c) Mazda's refusal to provide a refund or replacement vehicle at no cost to the Consumer, even after the Consumer's Vehicle had undergone multiple repairs which had not remedied the issues and where in some cases, Mazda's internal "Post Repair Checklist" indicated that the Fault with the Vehicle was a major failure; (d) Mazda's failure to give any proper consideration to whether the Faults made the Vehicles unfit to drive, defective and/or unsafe with the effect that a reasonable consumer would not have regarded the Vehicle as acceptable had they known of the Faults; (e) the offers made by Mazda to Consumers to pay amounts less than a full refund for the Vehicles or to provide replacement vehicles only if the Consumers made a significant financial contribution towards the replacement vehicle, or alternatively to provide an extended warranty and other services instead of a refund or replacement vehicle; (f) Mazda provided the Consumers with limited time to consider and accept an offer; and (g) Mazda's ongoing refusal to provide a refund or replacement vehicle at no cost to the Consumers which caused harm to the Consumers.

[6]

OVERALL APPROACH OF THE PRIMARY JUDGE 45 The primary judge identified that central to the controversy between the parties was how to characterise the agreed facts. The agreed facts included the content of conversations between the Consumers and Mazda customer service representatives. The primary judge observed that the complaints made by the Consumers and the response by Mazda to those complaints was recorded in various documents, including audio clips of telephone calls between Consumers and Mazda customer representatives. 46 The primary judge provided the following explanation of the approach that he took to the determination of the misrepresentation and unconscionable conduct cases: 131 I now turn to consider each of the seven individual cases and the evidence in respect of them. I will take each case, and the ACCC's case in respect of each such case, in turn. 132 In order to explain how the representations and alleged unconscionable conduct is said to arise, I have structured these reasons in respect of each consumer as follows. First, I have set out the relevant background facts that the ACCC claimed gave rise to each representation (or group of representations, where it is convenient to deal with them in such a manner). I then turn to consider, in respect of each representation said to arise from those facts, whether those representations were false or misleading in the manner that the ACCC claimed. I then continue to set out the relevant facts for the next representation or group of representations, and so on. 133 Having considered each representation in turn, and in the course of doing so, having described all the facts relevant to the consumer, I then consider the ACCC's case on unconscionable conduct in respect of that consumer. As will become apparent, there is a considerable, but necessary, degree of repetition. 47 A necessary consequence of the approach that the primary judge adopted was that the factual findings relevant to the misrepresentation and unconscionable conduct cases were inextricably linked. A further consequence of the approach was that the "considerable, but necessary, degree of repetition" was often sought to be ameliorated by the inclusion of cross-references to the consideration of similar conduct with a particular Consumer or other Consumers.

[8]

Misleading or deceptive conduct 50 Section 18(1) of the ACL provides: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. 51 Section 29(1)(m) of the ACL provides: 29 False or misleading representations about goods or services (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: … (m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2); or … 52 There is no meaningful distinction between the phrase "misleading or deceptive" in s 18(1) and the phrase "false or misleading" in s 29(1)(m): Australian Competition & Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634 at [40] (Allsop CJ). 53 Unlike s 18(1), s 29(1)(m) of the ACL is a civil penalty provision. 54 Further, although representations to the public must be considered by reference to the class of consumers likely to be affected by the conduct, "where the conduct is directed to a single person …attention must be directed to the relationship between the two persons, the context in which the statement is made, the reasonably known characteristics of the recipient of the statement, and the effect on a reasonable person in the position of the recipient of the statement": Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196 at [219] (Edelman J). 55 In Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [37] (Gleeson CJ, Hayne and Heydon JJ) it was said: … it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known. 56 This is a proceeding, like Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 (Wheelahan J), where the ACCC alleged that the conduct alleged to be misleading or deceptive, or likely to mislead or deceive, included the making of representations as to the law or legal rights. As Wheelahan J said in that case: 598 [R]epresentations as to the law or legal rights … may relate to the existence of rights in a particular relationship or arising from a particular transaction, in a general sense: see, for example, Valve Corporation v Australian Competition and Consumer Commission [2017] FCAFC 24; 351 ALR 584, and Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2018] FCAFC 96. Others may relate to the exercise of rights in particular circumstances that may depend upon questions of judgment involving fact and degree. In considering such representations, it is necessary to be mindful that a representation in the nature of an appraisal or opinion does not necessarily give rise to a contravention of s 18 because it later proves to be inaccurate. An opinion, so expressed, at least if it is genuinely held and there is a basis for it, however erroneous, misrepresents nothing: Global Sportsman v Mirror Newspapers at 88 (Bowen [CJ], Lockhart and Fitzgerald JJ). The High Court made this point in Campbell v Backoffice Investment, in which it was held that the provision of financial estimates in pre-contractual documents before a corporate transaction, which were believed to be true but which turned out to be inaccurate, was not misleading or deceptive. In circumstances closer to the present proceeding, Dowsett J in Australian Competition and Consumer Commission v Bunavit Pty Ltd [2016] FCA 6 at [29], commented on the potential danger of penalising suppliers for bona fide denials of liability, such as denials that a defect in goods amounts to a major failure of a statutory warranty, which later turn out to be wrong … 599 Such cases involving representations as to the law or legal rights may involve claims under both ss 18 and 29(1)(m) of the ACL, such as the ACCC has made in the present proceeding. The general prohibition on misleading or deceptive conduct in s 18 operates concurrently with the more specific prohibitions in s 29: see, s 18(2).

[9]

Statutory guarantees 57 Section 54 of the ACL provides: 54 Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and (b) the price of the goods (if relevant); and … (6) Goods do not fail to be of acceptable quality if: (a) the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and (b) they are damaged by abnormal use. … 58 Section 259 of the ACL provided relevantly as follows: 259 Action against suppliers of goods (1) A consumer may take action under this section if: (a) a person (the supplier) supplies, in trade or commerce, goods to the consumer; and (b) a guarantee that applies to the supply under Subdivision A of Division 1 of Part 3-2 (other than sections 58 and 59(1)) is not complied with. (2) If the failure to comply with the guarantee can be remedied and is not a major failure: (a) the consumer may require the supplier to remedy the failure within a reasonable time; or (b) if such a requirement is made of the supplier but the supplier refuses or fails to comply with the requirement, or fails to comply with the requirement within a reasonable time - the consumer may: (i) otherwise have the failure remedied and, by action against the supplier, recover all reasonable costs incurred by the consumer in having the failure so remedied; or (ii) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection. (3) If the failure to comply with the guarantee cannot be remedied or is a major failure, the consumer may: (a) subject to section 262, notify the supplier that the consumer rejects the goods and of the ground or grounds for the rejection; or (b) by action against the supplier, recover compensation for any reduction in the value of the goods below the price paid or payable by the consumer for the goods. … 59 Section 260 of the ACL provided relevantly as follows: 260 When a failure to comply with a guarantee is a major failure A failure to comply with a guarantee referred to in section 259(1)(b) that applies to a supply of goods is a major failure if: (a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or (b) the goods depart in one or more significant respects: (i) if they were supplied by description - from that description; or (ii) if they were supplied by reference to a sample or demonstration model - from that sample or demonstration model; or (c) the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such a purpose; or (d) … (e) the goods are not of acceptable quality because they are unsafe.

[10]

Overview of the approach and reasons of the primary judge 60 The primary judge made the following principal findings on the misrepresentation case advanced by the ACCC: (a) Mazda had no reasonable basis for making the Opinion Representations because it failed to make any enquiries as to whether the faults were "major failures" for the purposes of the ACL: at J [243] and [372]; and (b) Mazda gave no real consideration to Consumers' rights to a refund or replacement under the ACL: at J [358], [373], [586], [823] and [938]. 61 The primary judge concluded that 49 of the 55 Representations (each being to the effect of one of the five generic Representations identified in the ACS at [11(a)-(e)]) had been conveyed and were false. The Representations that were found not to have been conveyed were the first Representation in the TK/MK case and the first five Representations alleged in the LC case. The Representations that the primary judge found were conveyed in the case of each Consumer and cross referenced to the relevant generic Representation were summarised by Mazda in the following table in its notice of appeal (where NF records that the Representation was not found): Table of Representations 1 2 3 4 5 6 7 8 9 10 11 12 RC 11(c) 11(c) 11(d) 11(b) 11(b) 11(b) 11(d) 11(a) 11(b) 11(a) 11(b) 11(d) CT/MT 11(b) 11(c) 11(c) 11(b) 11(c) 11(a) 11(a)) 11(b) 11(a) 11(b) - - SB/KB 11(b) 11(d) 11(d) 11(b) 11(d) 11(b) 11(d) 11(e) - - - - MG 11(b) 11(c) 11(d) 11(b) 11(b) 11(b) - - - - - - TK/MK NF 11(a) 11(b) 11(b) 11(b) 11(b) - - - - - - LC NF NF NF NF NF 11(a) 11(b) 11(a) 11(b) 11(a) 11(b) - EG 11(b) 11(b) - - - - - - - - - -

[12]

Submissions 65 In its written submissions Mazda advances three overarching submissions in support of Grounds 1 and 2. 66 First, Mazda submits that in determining whether a representation was conveyed, the primary judge failed to have sufficient regard to context, including when the representation was made to an individual, the knowledge of that individual. Mazda submits that if the individual to whom the representation was made knew the truth, a finding that the individual was likely to be misled would be unlikely. It submits that all the Consumers received advice from the ACCC, the relevant Department of Fair Trading or a lawyer, and that (a) this was a highly relevant factor in determining the nature of the representation and whether it was likely to lead the Consumers into error, (b) it was apparent that at the time the alleged representations were made none of the Consumers was actually misled, and (c) the relevance of the receipt of advice by the Consumers and the absence of any evidence that the Consumers were misled was misapprehended or overlooked by the primary judge. 67 Second, Mazda submits that conduct that is transitory or ephemeral, or where any misleading impression is likely to be dispelled quickly does not constitute misleading and deceptive conduct under the ACL. It submits that if a Mazda representative made an inaccurate statement but clarified or corrected it in the same conversation then that fact is highly relevant to whether there has been a contravention. Mazda contends this occurred in relation to some of the Representations that were found to have been conveyed to RC, CT/MT, SB/KB, TK/MK and LC. 68 Third, Mazda submits that the Representations that consumers did not have a right to a refund or a replacement vehicle because Mazda always had the right to repair a vehicle, were in substance a negative representation about the existence of legal rights generally. It submits that statements by Mazda customer service representatives that Consumers had the right to commence legal proceedings if they were not satisfied with Mazda's response "can only be taken to have confirmed the existence of those rights at the conceptual level with which the alleged representation is concerned". 69 The ACCC submits that Mazda's contentions that the Representations were not conveyed, were correctly characterised by the primary judge at J [180] (by way of example) to be "an altogether too literal and unrealistic; non contextual reading" of the relevant communications relied upon by the ACCC. 70 The ACCC submits that Mazda's submission that each Consumer "knew the truth" is legally misconceived. It submits that (a) the primary judge's focus was correctly on Mazda's impugned conduct, (b) it is not necessary to prove an intention to mislead or that the impugned conduct in fact misled or deceived anyone, and (c) the fact that a person has sufficient knowledge not to be misled or deceived does not alter the misleading character of what might have been said. 71 In any case, the ACCC submits that Mazda's contentions are not established on the evidence because (a) in most cases, the Consumers did not fully understand their rights or feel confident enforcing those rights against Mazda, (b) it was irrelevant that Consumers remained open to commence proceedings against Mazda, and (c) the statements relied upon by Mazda to assert that the Representations were "clarified or corrected" in the same conversations in which they were made did not have that effect.

[13]

Consideration 72 Grounds 1 and 2 of Mazda's notice of appeal are expressed at a degree of generality that is largely overtaken by the more specific grounds that are subsequently advanced in the notice of appeal. For that reason these grounds are best understood as introductory and overarching grounds that seek to identify generic errors in the reasoning of the primary judge. 73 It is sufficient to make the following observations in response to the written submissions advanced by Mazda in support of these two grounds. 74 First, as submitted by the ACCC, knowledge of the falsity of a representation does not alter the misleading character of the representation. As the Full Court stated in Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2018] FCAFC 96 at [54] (Allsop CJ, Jagot and Lee JJ): Here, however, even though the false representation did not mislead, as conduct it was to be characterised as false and so as misleading or deceptive in that sense. In the context of a serious inquiry about a faulty consumer good the mere fact that [the consumer] had sufficient knowledge not to be misled does not alter the misleading character of what was said. Nor is the misleading character of the statement altered by the fact, if it be the fact, that the LG representative is to be inferred to have known that [the consumer] held such knowledge…. 75 Second, any alleged reliance on advice provided by third parties necessarily turns on the specific context in which that advice might have been provided and both the content and circumstances in which the statements that gave rise to the misleading representations were made by the Mazda customer service representatives. 76 Third, the effect of any statements that are alleged to be inconsistent with the Representations must be considered both in the context of the conversation or document considered as a whole and against the specific Representation alleged to have been conveyed, either expressly or by implication. 77 Fourth, any awareness by a Consumer of their ability to bring proceedings or make complaints to regulatory bodies if requests for refunds or replacement vehicles were not accepted cannot logically detract from the misleading character of a Representation or necessarily preclude a finding that a Consumer may have been misled. 78 It follows for these reasons that Grounds 1 and 2, to the extent that they are relied upon as general overarching grounds, independently of other grounds, must be rejected.

[14]

Mazda's contentions and submissions 79 In Ground 3 of its notice of appeal Mazda contends that the Opinion Representations did not necessarily convey any representation by implication that Mazda had reasonable grounds for making them, and the primary judge ought to have so found. 80 Mazda submits that the following two fundamental misconceptions in the representation cases advanced by the ACCC were adopted by the primary judge and underpinned many of his Honour's alleged erroneous findings. 81 First, a misconception that every statement of opinion also conveys a further implied representation that there was a reasonable basis for that opinion. 82 Second, a misconception that in making an offer for less than a replacement vehicle at no cost to the Consumer or a full refund, Mazda conveyed a representation (either as an opinion or as a fact) that each of the Consumers (or consumers more generally) had no rights to a refund or a replacement vehicle under the consumer guarantee provisions of the ACL. 83 Mazda submits that contrary to the approach that it alleges was adopted by the primary judge, statements of opinion do not necessarily carry an implied representation that there is a reasonable basis for the opinion. It submits that in the case of an inexpert opinion there would usually be no reason to assume that it was based on reasonable grounds and references the following decisions: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 at [94], [102]-[105] (Heydon J); Inn Leisure Industries Pty Ltd (Provisional Liquidator Appointed) v DF McCloy Pty Ltd (No 1) (1991) 28 FCR 151 at 167 (French J, as his Honour then was). 84 Mazda submits that no implied representations of reasonable grounds were conveyed in the present case because (a) conversations with "call centre staff" should not be "impressed with a profundity they lack on their face", (b) Mazda and the Consumers did not have shared commercial interests, (c) the Consumers did not regard the "call centre staff" to be providing them with legal advice, (d) the relevant context often involved the communication of Mazda's position or the call centre conveying an offer "as a conduit for the decision of others", (e) whether Mazda followed its own processes is not relevant to identifying precisely what representations were conveyed, (f) there may have been more than one reasonable basis for the opinion, (g) the fact a response may be spontaneous is relevant as to whether a representation as to reasonable grounds was conveyed, and (h) the primary judge did not imply any representation as to reasonable grounds for the opinions conveyed on the basis that Mazda had a dominant bargaining position and Mazda did not in fact hold a stronger bargaining position than the Consumers. 85 The references by Mazda to "call centre staff" were references to the Mazda customer service representatives in the NCS.

[16]

Consideration 87 A statement of opinion may carry with it one or more implied representations. Those implied representations may include a representation that the opinion is based on reasonable grounds or that it was formed on the basis of reasonable inquiries: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 39 at [33] (French CJ). 88 In Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307, in reasons principally directed at distinctions between statements of fact and statements of opinion, Bell ACJ (as his Honour then was) stated at [34] (Barrett AJA agreeing at [91]): Where, however, it is established that a statement or representation is or must have been understood by its target audience as one of opinion or belief, even though presenting at one level as one of fact, liability will not be strict; rather, it will generally depend upon an assessment as to whether or not the belief or the opinion was honestly held and "perhaps" (see [24] above) whether or not the maker had a reasonable basis for the belief or opinion. Other than in cases of statements as to future matters (where the statutory presumption is engaged: see, for example, Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, s 4), it will be for a plaintiff to establish the lack of reasonable basis for belief if misleading or deceptive conduct is to be established. 89 To consider whether a representation that a party has reasonable grounds for expressing an opinion is conveyed, it is necessary to approach the issue from the perspective of the target audience. The relevant question is whether the person or persons to whom the statement of opinion was made would reasonably understand that the person expressing the opinion was also representing by implication that they had reasonable grounds for expressing it. 90 An answer to that question requires a consideration of the context in which the opinion is expressed and the specific content of the opinion. Those issues in turn require a consideration of matters that would include any information asymmetry, the significance and importance of the subject matter of the opinion to the person or persons to whom it is directed and any overarching context provided by relevant legislative requirements or objectives such as those that might arise from consumer protection legislation. 91 The approach of the primary judge, at a general level, was not inconsistent with these propositions. 92 Contrary to the implicit contention advanced by Mazda, the primary judge did not make any finding or proceed on any assumption that every representation that might be construed as a representation as to the holding of an opinion necessarily also conveyed a further implied representation that the opinions were honestly held and that there was a reasonable basis for holding that opinion. Rather, the primary judge only made that finding for the Representations that he found were expressions of opinions after considering the specific context in which each of those Representations was conveyed. 93 We do not accept that any overarching error arose because the relevant communications on which the primary judge relied were with "call centre staff". As noted above, the alleged "call centre staff" were Mazda customer service representatives in the NCS. To describe them as "call centre staff" in the sense such a phrase is usually understood is wrong. As the evidence shows, they are case managers, they sometimes have long discussions with consumers, send and receive emails from Mazda executives, and take detailed notes in Maestro of their communications. The NCS staff had specific responsibility to deal directly with disaffected consumers and act as a conduit between those consumers and senior Mazda executives. The Consumers were entitled to, and did, regard them as having some authority to speak on behalf of Mazda. 94 Nor did any alleged failure to give sufficient weight to any belief by a Consumer that they were not being provided with "legal advice" by the Mazda customer representatives or that the representatives were only a conduit for the decision of others, establish any error by the primary judge. Consumers could readily be expected to have inferred that (a) responses by Mazda customer service representatives to requests for refunds or replacement vehicles at no cost reflected a settled, considered and approved position of Mazda, and (b) this approved position was based on advice as to the scope and nature of its legal obligations, including its obligations under the ACL. 95 It follows for these reasons, that this ground, to the extent that it is relied upon as a general overarching ground, must be rejected. 96 Ultimately, the question, of whether the Opinion Representations conveyed further implied representations that that there was a reasonable basis for holding those opinions, turns on a consideration of the specific context and content of the conversations or documents relied upon by the ACCC for each of the Opinion Representations.

[17]

Mazda's contentions and submissions 97 In Ground 4 of its notice of appeal, Mazda contends that if contrary to its contentions, the Opinion Representations were conveyed and they carried a further implied representation that they were based on reasonable grounds, there were reasonable grounds for each Opinion Representation given "the undisputed evidence of the circumstances of each case identified below". 98 Mazda contends that irrespective of whether it relied upon a matter at the time, the primary judge ought to have found that it had reasonable grounds for each of the Opinion Representations because: c. no Consumer had proved, the ACCC's case did not involve seeking to prove (J[7]) and the trial judge therefore did not find, and Mazda did not at the relevant time accept, that they were entitled to a replacement vehicle or refund under the ACL and Mazda was therefore entitled to refuse to provide a replacement vehicle or full refund to each Consumer; d. the expiration of the ACL rejection period, damage to the vehicle and the failure of any Consumer to prove an ACL entitlement. 99 Mazda submits that the misrepresentation case advanced by the ACCC included the following fundamental misconceptions that it alleges were adopted by the primary judge and underpinned many of his Honour's alleged erroneous findings: (a) statements of opinion that Consumers had no right to a refund or replacement vehicle at no cost were misleading notwithstanding that the ACCC had not alleged and the primary judge had not found that such a right existed; and (b) Mazda could only prove that it had a reasonable basis to make an opinion representation if it had undertaken a review in accordance with its documented processes and correctly applied the law and facts. 100 Mazda submits that given the ACCC's abandonment of any case that the Consumers had established an entitlement to a refund or replacement vehicle under the ACL it must follow that Mazda had reasonable grounds for making the Opinion Representations because (a) the Consumers had not established that the faults with their vehicles were major failures, and therefore, (b) the Consumers were not entitled to a refund or replacement vehicle under the ACL. 101 Mazda also submits that despite the primary judge's recognition that the ACCC had not established that any Consumer was entitled to a refund or a replacement vehicle at no cost, "a number of" the findings by the primary judge were made on the assumption that the Consumer's vehicle had suffered a major failure or the Consumer was otherwise entitled to reject their vehicle.

[19]

Consideration 105 Although the ACCC initially sought to advance a case that the Opinion Representations were statements of fact and were false, that case was subsequently abandoned by the time the hearing before the primary judge commenced. Having abandoned that case, the objective truth of the matters the subject of the Opinion Representations was no longer relevant. Irrespective of whether in fact the faults with the Consumers' were major failures under the consumer guarantee provisions of the ACL and irrespective of whether in fact the Consumers were entitled to a refund or a replacement at no cost under those provisions, the ACCC could succeed if it was able to establish that the information available to Mazda at the time each Opinion Representations was conveyed, did not objectively provide Mazda with reasonable grounds to express the representation. 106 In Australian Competition and Consumer Commission v Dateline Imports Pty Ltd [2014] FCA 791, Rangiah J found at [268], [269] and [276] that in order for the ACCC to establish an absence of reasonable grounds for the respondent to make representations directed at the absence of toxic or dangerous chemicals in a hair straightening product, including formaldehyde, and representations that the product was safe for use and complied with health and safety regulations, it was necessary for the ACCC to prove that the representations were not true. 107 The Full Court overturned those findings in Australian Competition and Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114. Their Honours (Gilmour, McKerracher and Gleeson JJ) concluded at [95]: The ACCC submits, correctly in our opinion, for reasons which we will shortly explain, that even assuming that it did not establish that these representations were false, it does not follow from that conclusion that at the time of making the representation, Dateline and Mr Taylor had reasonable grounds to make it. 108 In Dateline, the ACCC had characterised the underlying representations made by the respondent as representations of fact not opinion. Nevertheless, we consider that the following passages in Dateline apply with equal force where the relevant enquiry arises in circumstances where it is alleged that reasonable grounds are represented, by implication or otherwise, for a representation of opinion: 98 Dateline submits that its success on the truth of the underlying representation is enough to defeat these grounds. In other words, so long as the represented fact is right, Dateline submits that the ACCC has not shown that it was misleading or deceptive for Dateline to have made the representation on incomplete or wrong reasons that it believed were correct and complete, and did not include the reasons showing it to be correct. 99 We do not accept this submission. It is not a question as to Dateline's subjective belief. Rather, the representation that Dateline had reasonable grounds for making the several representations of fact is to be considered in light of the grounds which Dateline actually then knew and whether those grounds, objectively, were reasonable. 100 There will not be reasonable grounds for making a representation if, at the time of making, it, the representor did not have facts sufficient to induce, in the mind of a reasonable person, a basis for making the representation: Australian Competition and Consumer Commission v Jones (No 5) [2011] FCA 49 at [32]-[33]; George v Rockett (1990) 170 CLR 104at 112. 101 It matters not that it transpires, in due course, that the fact represented is true. That may simply be serendipitous. The representation, "I have reasonable grounds" for making the representation of fact is a discrete representation, indeed one which is likely to reinforce in the representee the reliability of the representation of fact." 102 Moreover the reasonable grounds representation is also one of fact. It is not directed to grounds which may become known but are not then known. Consumers should be protected against such conduct where, in fact, objectively assessed, there were no reasonable grounds known to the representor. 109 The primary judge was under no misconception as to the nature of the reasonable grounds case that the ACCC was advancing in these proceedings. As the primary judge noted at the commencement of his reasons at J [7]: The allegation that Mazda made the representations that certain faults with Mazda vehicles owned by the consumers were not "major failures" to comply with a consumer guarantee was narrowed during the course of the hearing. The ACCC's case did not involve seeking to prove that the relevant vehicles in fact suffered major failures within the meaning of the ACL. Rather, its case was that Mazda misrepresented the position as to the consumers' legal rights because Mazda's customer representatives expressed an opinion that there was no major failure, in circumstances where they could have had no basis for holding such an opinion, because Mazda had not considered whether or not the issues complained of were, in fact, major failures. The ACCC submitted such statements about the exercise of rights were misleading or deceptive because the opinion was not genuinely held and there was no reasonable basis for it, citing Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; and Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 at [598]. 110 The primary judge did not find that Mazda could only prove that it had a reasonable basis to make an opinion representation if it had undertaken a review in accordance with its documented processes and correctly applied the law and facts. The primary judge did not proceed on the basis that the failure of Mazda to follow its own procedures was a sufficient or necessary condition to his Honour's findings that Mazda did not have reasonable grounds to make the Opinion Representations. 111 Rather, the primary judge focused on the failure of Mazda to undertake any consideration of whether the consumer guarantee provisions in the ACL may have been engaged by the serious and persistent faults notified by the Consumers to the Mazda customer service representatives. The primary judge identified at J [11(1)] the first of what he considered were the four main areas in which the characterisation of the facts (and thus the outcome of the misrepresentation and the unconscionable conduct cases), was disputed. This was whether or not: Mazda gave any proper or genuine consideration to whether the individual customers were entitled to a refund or replacement car; 112 The primary judge found at J [141] in the context of his general observations about the unconscionable conduct claims: I also reject Mazda's assertion that the round table and executive panel processes, which even Mazda conceded (eg in its "Summary of respondent's key propositions" document, filed on 14 July 2021) were "imperfectly undertaken" and "imperfect", were nonetheless "authentic" attempts to "ensure an informed and rational decision was made in response" to what Mazda insisted were "unsubstantiated assertion[s] of a statutory right". As the evidence will show, at no point did the round table or executive panel processes make any genuine attempt to consider and apply the consumer guarantee provisions of the ACL to the circumstances of the individual consumer. That is, of course, a very unsatisfactory state of affairs, including because Mazda by doing so did not comply with its own internal ACL compliance standards and processes. Again, however, it seems to me that such failings are more appropriately characterised as very bad management, rather than unconscionable conduct. 113 More directly in the context of the findings made by the primary judge with respect to the specific Representations that he found were made to the Consumers, his Honour stated at J [823] with respect to Representations that he found were conveyed to LC: It seems to me that Mazda's characterisation of the exchanges between Mr Marshall and LC is unrealistic. Construed in context, in my view, the impugned statements do convey the representations alleged, and Mr Marshall could not have had a reasonable basis for saying what he did because there was no evidence that anyone at Mazda ever gave LC's request for a new vehicle any apparent consideration, which was surely warranted in circumstances where the transmission had failed after four months and Mazda had noted it as an "ACL" failure (see [782] above). 114 The primary judge did not make the error alleged. It follows this general overarching ground must be rejected.

[22]

Consideration 118 It may be accepted that in some cases it is permissible to draw an inference that a written submission not repeated or referred to in oral submissions has been abandoned. The primary judge's reasons, however, did not depend on drawing such an inference. 119 The primary judge noted at the outset of his reasons the objection by Mazda in its written closing submissions that the case now advanced by the ACCC in its closing submissions was not the case that it was on notice of having to meet as set out in the ACS. He explained that the objection was directed at the ACCC's contention that the Representations alleged in the ACS at [11(a)] and [11(b)] were statements of opinion relating to specific vehicles rather than statements of facts and Mazda did not have reasonable grounds for making them. The primary judge considered that he was entitled to infer that the objection had been abandoned because there was no reference to it in Mazda's oral closing submissions. 120 The primary judge, concluded, however, even if he was wrong to draw an inference that the objection was not pressed, he was satisfied that there had been a fair disclosure in the ACS and in both the ACCC's written and oral opening submissions of the cases that the ACCC was advancing. The primary judge stated that it was (a) important to recognise that concise statements perform a different role to pleadings, (b) an applicant could refine its precise case in opening: see Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2021) 287 FCR 388; [2021] FCAFC 121 at [144] (McKerracher and Colvin JJ) (reversed on appeal in Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 [2022] HCA 38 but not on this point), and (c) the ACCC in its outline of opening submissions at [64] had expressly stated: [t]he representations made by Mazda as to the [c]onsumers' rights as to the faults with the [v]ehicles should be characterised as statements of opinion which carried an implied representation that Mazda had a basis for them and reasonable grounds for them. 121 This approach is correct. Further, as submitted by the ACCC, the alleged impermissible finding of dishonesty has nothing to do with Ground 5 as expressed, which is directed at a complaint that Mazda was not on notice of the opinion and absence of reasonable grounds contentions with respect to the Opinion Representations, not the credit of a "senior representative" of Mazda who had not given evidence in the proceeding. 122 It follows for these reasons, that this ground must be rejected.

[26]

Mazda's contentions and submissions 128 In Ground 7 of its notice of appeal, Mazda contends that the Representations alleged to have been made to the effect of the Representation alleged in ACS [11(d)] (Mazda was not required to provide a refund or replacement vehicle at no cost to consumers because of the age and/or mileage of their vehicles) were: (a) not conveyed by implication from discussions that were only concerned with the amount of offers being made to Consumers, not with any entitlement of the Consumers to compensation, and in circumstances where it was not in dispute that the Consumers had not proved they were entitled to any compensation, a complete refund or a replacement vehicle; and (b) not misleading or deceptive, or likely to mislead or deceive in circumstances where: i. the Consumers had not proved (and the trial judge did not find) that the symptom being exhibited by their Vehicle existed at the time of supply; and ii. as the expert evidence demonstrated, the age and mileage of the Vehicle was directly relevant to the likelihood that a symptom being exhibited by the vehicle was caused by a fault which existed at the time of supply; and iii. as a result, the age and mileage of the Vehicle was directly relevant to the question of whether Consumers might ultimately be found to be entitled to a refund or replacement vehicle. 129 Mazda submits that it should have been uncontroversial that any entitlement to compensation under the consumer guarantee provisions of the ACL (a) becomes "less likely with age and use as a matter of mere symptomology involving mechanical diagnosis", and (b) a material fault is "inherently and more readily considered to be a major failure in a new low mileage vehicle". It submits that the primary judge recognised at J [129] the forensic difficulty of making out a case brought under the ACL for older vehicles and vehicles that had undergone multiple repairs but then erroneously found that the expert witnesses had concluded that "factors to do with age and use were not relevant to any of the vehicles at issue". Moreover, Mazda submits that in any event, the experts concluded that age and use of vehicles would need to be investigated before reaching any conclusion that any form of liability, let alone, that a need for a full refund or replacement vehicle had arisen.

[28]

Consideration 131 Whether Mazda gave any proper or genuine consideration to whether the Consumers were entitled to a refund or replacement vehicle under the ACL is not relevant to the case advanced by the ACCC with respect to the ACS [11(d)] Representations. The ACS [11(d)] case advanced by the ACCC was directed at the making of representations to the effect that Mazda was not required to provide a refund or replacement vehicle at no cost to consumers because of the age and/or mileage of their vehicles. It was alleged in ACS [12(b)] that those Representations were false because the right to a refund or replacement vehicle under s 263(4) of the ACL was not confined by the age and/or mileage of the vehicle. The primary judge recognised at J [5(4)] and [6(2)(b)] that was the case that the ACCC was advancing. The primary judge, however, did not expressly make findings that the ACS [11(d)] Representations, were false or misleading on the basis that s 263(4) of the ACL was not confined by the age and/or mileage of the vehicle. 132 By way of example, the primary judge concluded with respect to an ACS [11(d)] Representation that he had found was made to RC (referred to in the extract below as "representation 3"): 221 In my view, the ACCC was correct to contend that what Ms Miller said to RC on 27 February (set out at [203]-[204] above) constituted a representation that Mazda was not required to provide a refund or replacement vehicle at no cost to RC because of the age and/or mileage of the vehicle, for the reasons it submitted (see [207] above). 222 Representation 4 was said to arise from the statements of representations 2 and 3 "taken together", which conveyed the false and/or misleading representation that RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL. Because I have found both representations 2 and 3 to be made out, and because they both represented that RC did not have any ability to obtain (or conversely, Mazda was not required to provide) a refund or replacement vehicle, representation 4 was also false/misleading, for the reasons submitted by the ACCC. 133 At J [207] the primary judge had stated: The ACCC also submitted that Mazda's statements to RC on 27 February 2018, in response to her request for a refund of the purchase price of the vehicle, that Mazda had reviewed "all the information" and was prepared to offer the sum of $12,215 for it (less than a full refund) and that this offer took into account the age and mileage of the vehicle and that cars are "actually not" like any other consumer product, conveyed, in the context in which they were said, the representation that Mazda was not required to provide a refund or replacement vehicle at no cost to RC because of the age and/or mileage of the vehicle (representation 3). 134 The primary judge found that "representation 3" was false or misleading because "it conveyed the false and/or misleading representation that RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL". 135 Nevertheless, in addressing the ACCC's unconscionable conduct case, the primary judge demonstrated that he accepted the ACCC's submissions that Mazda was not entitled to take into account the age and/or mileage of a vehicle in refusing to provide a refund or replacement vehicle pursuant to the consumer guarantee provisions in the ACL, as is evident from the following findings: 255 The ACCC's fourth point in support of its unconscionable conduct case was that Mazda sought to dissuade RC from continuing with her requests, and instead sought to negotiate a commercial outcome with her, by suggesting she trade in her vehicle for a new Mazda, instead of considering her requests under the ACL. On a number of occasions, Mazda told RC that the age and mileage of the vehicle could be taken into account when providing a remedy under the ACL - something that was obviously wrong. And even when the round table review had approved a figure to be offered, the offer put was less than that approved, treating the offer as an opportunity for further commercial negotiation. … 273 It can be accepted, as the ACCC submitted, that Mazda sought to dissuade RC from continuing with her requests, and instead sought to negotiate a commercial outcome with her, by suggesting she trade in her vehicle for a new Mazda, instead of considering her requests under the ACL. And Mazda was clearly wrong to tell RC that the age and mileage of her vehicle could be taken into account when providing a remedy under the ACL. 136 In grounds 1, 6 and 7 of its notice of contention, the ACCC contends with respect to some, but not all of the ACS [11(d)] Representations that if, as alleged by Mazda, the primary judge failed to provide any, or any adequate reasons for his findings, including by failing to differentiate between different Representations, each of those ACS [11(d)] Representations: … was false and misleading or deceptive because it incorrectly represented the position under the ACL in that the right to obtain a refund or replacement vehicle under s 263(4) was not confined by the age and/or mileage of the vehicle. 137 We are satisfied that the primary judge erred in not expressly relying on those grounds in concluding that the Representations in the form of ACS [11(d)] Representations were false or misleading. This Court is in as good a position as the primary judge to find, given the absence of any age and/or mileage qualification to the right to obtain a refund or replacement vehicle under s 263(4) of the ACL, that if conveyed, each of the Representations in the form of ACS [11(d)] Representations was false or misleading. 138 In this context, we accept that the age and/or mileage of a vehicle, as acknowledged by the primary judge at J [129], might present forensic difficulties in establishing that a fault with a vehicle constituted a major failure for the purposes of the consumer guarantee provisions of the ACL but it is not a basis on which a claim for a full refund or replacement vehicle can be rejected. 139 It follows for these reasons, that Grounds 1, 6 and 7 of the ACCC notice of contention should be allowed and Ground 7 of the Mazda notice of appeal to the extent that it is relied upon as a general overarching ground must be rejected. 140 It is otherwise convenient to address Ground 7 where it is specifically relied upon in support of the Grounds directed at the ACS [11(d)] Representations that were found to have been made to RC, SB/KB and MG. The question of whether each Representation is to be implied and whether each was false or misleading is necessarily dependent on the specific context in which the Representation is alleged to have been made.

[30]

Mazda's contentions and submissions 144 In Ground 9 of its notice of appeal, Mazda contends that the primary judge erred in finding Representations alleged in the form of ACS [11(a)], [11(b)], [11(c)] and/or [11(d)] were conveyed by implication from (a) Mazda's refusals to provide a replacement vehicle or a full refund to each Consumer, and (b) Mazda's offers of less than a replacement vehicle or a full refund to each Consumer. 145 Mazda advances the "basal proposition" that an offer of less than a new vehicle or refund does not of itself convey a negative representation about the existence of legal rights. It submits that the primary judge found that Representations were made in the form of ACS [11(a)], [11(b)], [11(c)] and/or [11(d)] by implication when Mazda made an offer to a Consumer of less than a full refund or replacement vehicle. 146 Mazda submits, by reference to Representations found to have been made to RC in a letter to RC dated 22 March 2018, that the reasoning of the primary judge followed four steps. First, the offer for less than a full refund or a replacement vehicle was an implied rejection of the request for a refund under the relevant ACL consumer guarantee provision, second that rejection represented to the Consumer an absence of entitlement, third the rejection was a statement of opinion, and fourth, the statement of opinion was misleading because Mazda had no reasonable basis in the absence of an inquiry as to major failure. It submits this reasoning was flawed. It says that the principal error is with the second step because the offer conveyed nothing other than what Mazda was prepared to offer. It submits that an offer may be made for various reasons and prior to any consideration of any substantive entitlement of the Consumer. Further, it seeks to show by reference to the Representations found to have been made to RC in the 22 March 2018 letter, that the rejection and the offer were separated by the adverb however and thus provided confirmation that a different topic was being addressed. 147 The ACCC submits that whether an offer conveys a negative representation about the existence of legal rights will depend on context. It submits that the RC example relied upon by Mazda fails to engage with the facts relevant to that example. In particular, these facts include the prior requests made by RC in the period leading up to the 22 March 2018 letter, not least because of the reference in the letter to those requests by the words "As discussed", the letter confirming the rejection of those requests by the use of however, and the offer of something less than a full refund or replacement. 148 The ACCC also submits that to the extent that Mazda argues that the making of an offer is consistent with alternative explanations, those alternative explanations amount only to mere speculation, particularly when the makers of those offers were not called as witnesses.

[33]

Overview of Grounds 10 to 38 154 In Grounds 10 to 38 of its notice of appeal Mazda advances specific and detailed contentions challenging the findings of the primary judge with respect to each of the Representations: (a) Grounds 10 to 18 are directed at the Representations that the primary judge found were conveyed to RC; (b) Grounds 19 to 23 are directed at the Representations that the primary judge found were conveyed to CT/MT; (c) Grounds 24 to 27 are directed at the Representations that the primary judge found were conveyed to SB/KB; (d) Grounds 28 and 29 are directed at the Representations that the primary judge found were conveyed to MG; (e) Grounds 30 to 32 are directed at the Representations that the primary judge found were conveyed to TK/MK; (f) Grounds 33 to 36 are directed at the Representations that the primary judge found were conveyed to LC; and (g) Grounds 37 and 38 are directed at the Representations that the primary judge found were conveyed to EG. 155 Mazda's written submissions in support of Grounds 10 to 38 were limited to the following at [63]: The remaining grounds apply the above grounds as appropriate to the facts for each representation under appeal. They do so in order to assist the Court by specifically identifying the errors contended for. The Court may also be assisted by the appellant's submissions at trial (some of which are extracted in the reasons for judgment). 156 In the course of his oral submissions, Mr Scott KC who appeared for Mazda, referred to a 12 page document entitled "Summary of Representations" that had been provided to the Court as an aide memoire on the Friday prior to the hearing of the appeal. Mr Scott then took the Court to "some instances where it may be useful to see how we read the evidence". These "instances" did not materially travel beyond and largely replicated the contentions in the Mazda notice of appeal. The Court was provided with little real assistance from Mazda concerning the details of these appeal grounds. Nevertheless, since each of the grounds was said to be pressed, and there were multiple grounds in respect of each consumer, it is necessary for the Court to traverse all of the grounds in these reasons, despite the shorthand form with which Mazda approached them in its argument. The reasons in this section are somewhat repetitive and formulaic, because that was the nature of the challenges to them, and because of the way the ACCC's case was presented to the primary judge, relying on individual communications as separate representations and because much of the content of the communications as between Mazda and the Consumers was also necessarily repetitive.

[34]

RC background facts 157 The primary judge made detailed unchallenged findings at J [150]-[169], largely taken from the agreed facts, of the background to the Representations that he found were made by Mazda to RC. 158 The background findings made by the primary judge can be summarised as follows: (a) in November 2014, RC purchased a Mazda 2 for a total price of $18,990, including accessories, government charges and insurance; (b) the dealer was Eagers MD Pty Ltd in Newstead, Brisbane (Eagers Mazda); (c) in the period between August 2015 and June 2017 the engine warning light in her vehicle illuminated intermittently. These issues were not recorded in any of the dealer's service records prior to 22 August 2016; (d) in early September 2017, RC was driving on the Centenary Highway to Ipswich at around 100 km per hour when her vehicle lost power and the lights on the dashboard, including the engine light, began to flash, RC estimates that the speed of the car dropped down to 50 km per hour in about 4 seconds; (e) RC's vehicle was then towed to Eagers Mazda and RC informed them that she was going overseas for a month and told them to keep the vehicle unless "[it was] going to be fixed"; (f) on 5 October 2017, RC returned from her holiday and contacted Eagers Mazda. She was told "we forgot about the car and have not touched it"; (g) on 6 October 2017, RC spoke to a Mazda employee and advised him that she needed her vehicle for work, complained about the lack of action by Eagers Mazda, stated she did not feel safe in the vehicle, did not want the vehicle unless she could be given a 100% guarantee that it was safe and requested that her case manager Ms Miller contact her; and (h) on or about 6 October 2017, Ms Miller spoke to Eagers Mazda and then contacted RC and informed RC that Eagers Mazda had now ordered a clutch switch, she had escalated the matter to the "Mazda Field Technical Manager" who he would oversee the work to be done by Eagers Mazda and advised RC that she would arrange for RC to be provided with a loan car by Eagers Mazda "until they can get your car back on the road".

[36]

Principal findings and reasons of the primary judge 161 The primary judge made the following unchallenged findings with respect to the telephone call between RC and Ms Miller on 31 October 2017: 173 On 31 October, during an 18 minute telephone call between RC and Ms Miller, Ms Miller and RC discussed the various steps the dealer had taken to fix the misfire problem. RC observed that it was "now week eight that I've been without my car". She then asked, "at what point - if it - if it keeps happening, like, what the next step is because obviously if it keeps happening it's an issue that isn't fixable". She said she was too scared to drive the vehicle and that it was a "ticking time bomb". She expressed misgivings about continuing with a loan car because it had a $1,000 insurance excess, $600 more than that which applied to her own car. RC sought a timeframe from Ms Miller. RC said that she was concerned that the dealership was unable to fix the vehicle. Ms Miller said she "can't guarantee you - that this car … won't have a problem sometime in the next six months". 174 RC then asked, "So what happens if it's not fixable though?" Ms Miller replied, "It will - it's fixable. Yeah". The following exchange ensued: RC: … if Mazda - the Mazda Australia technician's looked at it and it just continues to keep having this problem … Ms Miller: Mmm hmm. RC: … what - what do you normally do in that instance? Ms Miller: There hasn't been a car that they can't fix. RC: Mmm. Ms Miller: There has never been a situation where they can't. It's just a matter of, ah, sometimes getting the right person on it long enough … to just persist, just absolutely persist. I mean, they've - they're doing everything they possibly can and are capable of doing at this - at this stage. RC: Yeah. Ms Miller: If it plays up again, um, I - I guess we just reassess the whole situation … RC: Yeah. 175 Later in the call, Ms Miller asked RC, "would you consider maybe trading it in on another Mazda2 with Eagers?" RC said, "Potentially. Yeah. I mean, I guess that's the thing. Like, it would be an idea. Like, I'd like to do that … but part of me is scared to have a Mazda again". Ms Miller said, "If it happens again I think, you know, again, we have to look at it on … its merits". RC said she was concerned about the trade-in price given "it's having all these problems". Ms Miller then said "… in all honesty. It actually makes no difference to the trade-in price". Ms Miller then referred to the fact that the car had been regularly serviced, adding "it's in good nick, it's got low k's, it's young, you're going to get good money for it". Later, Ms Miller said, "Unfortunately that's all I can advise you … I wish I could give you a magic answer". 162 The primary judge concluded at J [179] that the following statements made by Ms Miller in the course of her telephone call with RC on 31 October 2017 conveyed, by necessary implication, a representation that RC had no ability nor right under the ACL to reject her car: (1) RC's car was fixable; (2) there had not been a car that Mazda technicians could not fix; (3) there had never been a situation where the technicians could not fix a car; and (4) it was just a matter of persisting to get the right technician on the matter long enough. 163 The primary judge rejected Mazda's submissions that Ms Miller's statements were limited to the possibility of repairing the vehicle from a mechanical point of view, not a statement about a consumer's rights from a legal point of view. The primary judge found that Mazda's submissions on this issue relied on an "altogether too literal and unrealistic, non-contextual reading" of Ms Miller's statements. 164 The primary judge found that it must, or ought to, have been obvious to Ms Miller that RC had a potential claim under the ACL and that RC was making a request or demand under the ACL. His Honour found that her responses to RC by necessary implication conveyed RC 1 and "nothing that Ms Miller said remotely conceded, or admitted the possibility of, such an ability or right" to a full refund or replacement vehicle. The primary judge dismissed, as "a ridiculous characterisation of the conversation", the submissions made by Mazda to the effect that Ms Miller and RC were debating "the threshold question of the possibility and efficacy of repair" and that Ms Miller's responses to RC were "responsive to RC's stated concerns about the topic": at J [181]-[182].

[41]

Principal findings and reasons of the primary judge 174 The primary judge made the following unchallenged findings with respect to the telephone call between RC and Ms Miller on 24 January 2018: 194 On 24 January, RC and Ms Miller spoke on the telephone. Ms Miller said that the dealer was replacing the engine in the vehicle and that "theoretically that should fix all your problems". The following exchange then occurred: Ms Miller: But you're actually asking now for - and I think we may have had - touched on this prior … that you weren't holding much confidence in this car? RC: No. So I pretty much told Kim [Jones], the service manager at Mazda, that I'd like - as far as my rights are concerned, I know I don't have to accept the vehicle back if it's not safe or it's taken too long to get fixed, in which … case I think I fall under both of those categories and so I pretty much----- Ms Miller: Okay. One step back. We also work with the Australian Consumer laws … and we are aware of the consumer's rights, just as you are. … Once this - once this vehicle engine goes in and they test it, quite literally it is going to be safe to drive. They would not release the vehicle to you if it was unsafe to drive. So the----- RC: [B]ut they don't know that because it happened - that same problem happened in September last year and they told me that it was fixed then it wasn't. Ms Miller: Yeah, I - we see that. But we have to go on what's fact and we can see the facts there, that it has - that it has actually been in a few times for very similar or the same - the same concern but with different parts replaced. … There were spark plugs, you know, at one stage - you know, they've done bits and pieces to try and get it to be okay and I'm just - and this is - this is what I'm doing, [RC], this is what I'm doing … before I can actually have it fully reviewed for any sort of - what are you asking for, a replacement car, or a money back or a discount on a trade-in or ? RC: No. I want - I want a refund because I don't want, don't want - I don't want a replacement car because I don't ever want to drive a Mazda car again, to be honest. Ms Miller: Okay. RC: Because I feel like I can't trust Eagers and I can't trust Mazda. … I don't want a discount on the trade-in because the last time I spoke to them about trading in they were going to give me 6 grand, of which I paid $19,000 for it three years ago. … And so I want a refund on the vehicle. Ms Miller: Okay. I'm putting all that - all those - all the facts together … to give you a yes or no on that. … Bear in mind, we are aware and we work in line with the Australian Consumer laws. RC: Yep. No, I understand that. I mean, I have - if it's not going to - if I'm not going to get the outcome from you that I want then I'm not hesitating to take legal action. Like, I have spoken to someone about it and I know that----- Ms Miller: That's - and as a consumer, it is your right to do that. It is. 195 Ms Miller then said, "We'll put the case forward". She said "… we are fair and reasonable. We work in line with the Australian Consumer laws. If you're not happy with the response you receive from us at the end of all of this, then … as a consumer you have a right to take further action". 175 The primary judge considered that Mazda's submission that Ms Miller "was simply putting a position" to RC was an "entirely artificial characterisation of the conversation" (at J [211]). 176 The primary judge stated at J [212]: Ms Miller's assertion that Mazda "works with" the ACL is also hardly to be understood as a representation that RC was or might have been entitled to the refund she claimed, because she made that curiously worded commitment to compliance with the ACL only as part of her insistence that once the new engine "goes in", and the car was tested, "quite literally it is going to be safe to drive". Quite how that, or Ms Miller's closing comment to the effect that if RC was "not happy" she could institute legal proceedings, are to be characterised as explicit confirmation of a right to a refund under the ACL escapes me.

[45]

Principal findings and reasons of the primary judge 186 The primary judge made the following unchallenged findings with respect to the telephone call between RC and Ms Miller on 27 February 2018: 203 On 27 February, Ms Miller told RC by telephone that Mazda was prepared to offer her $12,125 and asked her, "how does that sound … to you?" RC said she would have to think about it, and "I just feel like in my mind the refund is the cost that I … paid for the car". Ms Miller said she would explain "how we arrived at that figure". She said that the offer was based on factors including current valuation and 30 months of good use, with an additional $2,125 to recognise "the eight months that you haven't had good use of the car". She noted that they also took off aftermarket accessories, and they took into account registration, stamp duty and dealer delivery. RC responded saying, "if I'm paying a loan off for stuff that I'm not even refunded I'm then paying for something that I don't even have, which doesn't make sense to me". RC also referred to the fact that her problems commenced a year into her vehicle ownership, not 30 months into it. 204 A discussion then ensued about the effect of the vehicle being off the road a number of times whilst the engine light issue was investigated. Ms Miller said that the eight month period was calculated on the basis that "[t]hat's what date we actually take it from because the other ones were, um, sort of quite minor". The following exchange then occurred: RC: Yep. Which I get. I just get - it's still a car. Like, you know, if this was something cheap, if I bought a TV and it had a four year warranty and the same issue was happening, I'm not going to take it back and the place isn't going to give me 50 back that I paid for the TV. I don't understand why it has to then take into account all these other factors. Like, it should just be like any other consumer product. Ms Miller: But cars, they're not. Yeah. They're actually not. 187 The primary judge rejected a submission by Mazda that the "30 months of good use" statement made by Ms Miller was "plainly positional". His Honour provided the following reasoning in response to that submission: 218 Secondly, it is not altogether clear why attributing the character of "positional" to the offer meets the ACCC's case, in particular when the making of the offer was accompanied by a false assertion, viz that cars are "not like" other consumer products for the purposes of relevant provisions of the ACL. 219 Thirdly, it is difficult to know what legal significance there is in a consumer receiving a "plainly positional" offer. At the point that the offer of $12,125 was made to RC, she had already notified Mazda and the dealer that she had rejected the vehicle, with the consequence that property in the vehicle had been revested in the dealer pursuant to s 263(6). 220 Fourthly, the ACL does not contemplate refunds made following a proper rejection of goods under the ACL being reduced by (in the case of cars) registration and stamp duty costs, and at the hearing Mazda did not seek squarely to contend otherwise.

[47]

Consideration 190 We do not accept that the primary judge failed to provide any, or any adequate, reasons for his findings. The primary judge explained at J [218]-[221], as set forth above, why he did not accept that the Mazda offer could be characterised as "plainly positional" and why he considered Mazda had conveyed an ACS [11(d)] Representation (Mazda was not required to provide a refund or replacement vehicle at no cost to consumers because of the age and/or mileage of their vehicles). 191 Nor do we accept that the primary judge made no finding of misleading conduct relevant to this ground. 192 At J [221] the primary judge concluded that: In my view, the ACCC was correct to contend that what Ms Miller said to RC on 27 February (set out at [203]-[204] above) constituted a representation that Mazda was not required to provide a refund or replacement vehicle at no cost to RC because of the age and/or mileage of the vehicle, for the reasons it submitted (see [207] above). 193 Then immediately following that finding, the primary judge stated at J [222]: Representation 4 was said to arise from the statements of representations 2 and 3 "taken together", which conveyed the false and/or misleading representation that RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL. Because I have found both representations 2 and 3 to be made out, and because they both represented that RC did not have any ability to obtain (or conversely, Mazda was not required to provide) a refund or replacement vehicle, representation 4 was also false/misleading, for the reasons submitted by the ACCC. 194 Read together, these paragraphs make plain that the primary judge's reasoning extended to a conclusion that RC 3 was false or misleading. The conclusion that RC 4 was "also" false/misleading must be a finding that it, as well as RC 2 and 3, was false/misleading because like them, it represented that "RC did not have any ability to obtain (or conversely, Mazda was not required to provide) a refund or replacement vehicle". In the case of RC 3, given the finding at J [221] it was because of the "age and/or mileage of the vehicle". 195 We are otherwise satisfied for these reasons and the reasons advanced above with respect to Ground 7(a), 7(b) and 9 and the refusal of Mazda to provide a replacement vehicle and making an offer that was less than a full refund because it took into account the age and the kilometres on the vehicle, that it was open for the primary judge to find that (a) the statements made by Ms Miller conveyed RC 3 and (b) RC 3 was false or misleading. 196 It follows for the reasons given, that Ground 12 must be rejected.

[51]

Consideration 202 The relevance of the cars "were actually not like" other consumer goods comment to the existence and correctness of the opinion that RC was not entitled to a refund under the consumer guarantees was expressly advanced by Mazda in the following extract from their submissions to the primary judge, as reproduced at J [213]: The identified conversations of 24 January 2018 and 27 February 2018 involved statements of Mazda's position and an explanation for that position. RC's case had been to an executive meeting. There is no reason to conclude that any opinion was not held. In making a statement about the application of the ACL to motor vehicles, Ms Miller was not denying the application of the ACL to them; she was at most expressing a personal opinion that motor vehicles were different because they are considerably more complex and the application of the law more difficult. To the extent it matters, that opinion was correct. 203 We are satisfied that it was open for the primary judge to conclude that the statement that cars were "not like" other consumer products for the purposes of the relevant provisions of the ACL was false. 204 Motor vehicles do not enjoy any particular status under the consumer guarantee provisions of the ACL. Other commonly acquired consumer goods, such as personal computers, iPhones and multi-media systems might be thought to be equally complex. Further, the generally much higher price paid by consumers for motor vehicles could be expected to compensate manufacturers for any additional work that might be required to address any complex technical issues that might need to be addressed. 205 We are satisfied for these reasons and the reasons advanced above with respect to Grounds 3, 4 and 9 that it was open for the primary judge to find with respect to RC 4 that (a) the statements made by Ms Miller conveyed RC 4 and a further implied representation that the opinion was based on reasonable grounds, and (b) Mazda did not have reasonable grounds for that opinion. 206 It follows for the reasons given, that Ground 13 must be rejected.

[61]

Principal findings and reasons of the primary judge 228 The primary judge made the following unchallenged findings at J [226]-[227] with respect to the letter sent by RC on 5 March 2018 and the telephone call between RC and Ms Miller on 16 March 2018: 226 On 5 March, by a letter drafted by RC with the assistance of a friend who was a lawyer, RC rejected Mazda's offer and counter-offered on the basis that Mazda paid her $18,990, being the purchase price of the car. She stated that the reference to "fair use and benefit" was misconceived and said that Mazda was not entitled to offset her entitlement to a remedy under the ACL against some use she may have had of the vehicle. She set out her views that the vehicle had suffered a major failure under the ACL. 227 In response, Mazda agreed to offer a "partial refund" of $13,000, an offer Ms Miller conveyed to RC by telephone on 16 March. Ms Miller said Mazda could offer up to $13,000 and asked RC what her thoughts were about that. RC repeated her entitlement to a full refund on the basis of a major failure, and said, "the car had a major failure, so, you know, the engine obviously has needed to be replaced in the car, which is a major failure with the car". Ms Miller repeated that Mazda could "bring up the offer to 13,000", and said that she was sure Mazda could cover the transfer fee. Ms Miller also said, "if you want to stick to your guns and say no, you want full purchase price … and take the matter further … as a consumer you have a right to do that". RC said that her lawyer wanted her to go for more, but she needed to think about it. 229 The primary judge rejected a submission made by Mazda that when Ms Miller advised RC that she "had the right" to "take the matter further" that this amounted to a confirmation of that right and that therefore "it follows that the unspoken premise was that it was possible that there had been a major failure and that RC might therefore be entitled to a full refund". The primary judge responded at J [245] that: I am at a loss to understand how such an unspoken premise follows. In my view, even accepting that Ms Miller "confirmed" RC's right to sue Mazda, such acceptance says nothing about Mazda's view of its prospects. 230 The primary judge accepted that by making an oral offer for RC's vehicle for a sum that was considerably less than a full refund Mazda impliedly made representations in the course of the telephone call on 16 March 2018 in the form of ACS [11(a)] and [11(b)] Representations.

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Consideration 238 We do not accept Mazda's contentions. 239 The primary judge found RC 8 - 12 could be dealt with together: at [241]. 240 Read in context, and as a whole, we are satisfied that the primary judge did make findings, at least by implication, to the effect that a representation of opinion was conveyed by RC 9 that was based on reasonable grounds and the primary judge provided sufficient reasons for those findings. 241 At J [244], the primary judge stated: I turn now to the representations set out at [241(2)] and [241(3)] above. For the reasons given above in relation to representations 1 - 4, I also accept the ACCC's submissions (and reject Mazda's submissions) in respect of representations 5 - 12, that Mazda conveyed the representations, in the precise manner set out above, that: (1) RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL; and (2) Mazda was not required to provide a refund or replacement vehicle at no cost to her because of the age and/or mileage of the vehicle. 242 The reference in J [244(1)] to a representation that "RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL" was plainly a reference to RC 9, namely a Representation in the form of an ACS [11(b)] Representation. 243 The cross reference to the reasons given above for RC 1 to 4, includes the primary judge's reasoning at J [222] for his conclusion that RC 4, that was also in the form of an ACS [11(b)] Representation, was conveyed and was misleading and deceptive. In turn, it is necessary to have regard to the fact that the reasoning at J [222] was in response to specific submissions of Mazda reproduced by the primary judge at J [213] that included a reference to general representations in the form of "representations of opinion that RC was not entitled to a refund or replacement at no cost under the consumer guarantee provisions of the ACL". 244 We do not accept that the absence of the prefatory words "an opinion" in J [222] and [244], can fairly be construed as a failure to make findings to the effect, at least by implication, that a representation of opinion was conveyed by RC 9 and that the opinion was based on reasonable grounds. The primary judge has otherwise in his reasons for judgment recognised and made findings on the basis that Representations in the form of ACS [11(b)] Representations were alleged to be representations of opinion and his conclusions at J [222] and [244] were in response to and in the context of the references to "representations of opinion" in J [213]. 245 It follows for the reasons given, that Ground 17 must be rejected.

[71]

CT/MT background facts 256 The primary judge made detailed unchallenged findings at J [283]-[300], largely taken from the agreed facts, of the background to the representations that he found were made by Mazda to CT/MT. 257 The background findings made by the primary judge can be summarised as follows: (a) in July 2016, CT and MT purchased a Mazda CX-5 Akera diesel for a total price of $52,160; (b) the dealer was West End Mazda in Blacktown, NSW (West End Mazda); (c) prior to 2017, CT and MT experienced an issue with the headlights; (d) in or around December 2016, CT and MT took the vehicle to West End Mazda on at least four times and initial repair work on the vehicle was concluded on or about 5 January 2017; (e) between 23 December 2016 and 18 July 2017, Mazda provided West End Mazda with instructions on how to fix the issue with the headlights; (f) on 23 December 2016, West End Mazda advised Mazda that the forward sensing camera had been previously replaced; (g) on 4 January 2017, West End Mazda advised Mazda that they had inspected the actuators and there did not seem to be any damage to them; (h) on 9 January 2017, Mazda issued Technical Bulletin NS002_17 which acknowledged the headlights issue affecting Mazda CX-5 vehicle models for the date range 27 November 2014 to 12 September 2016; (i) on or about 14 or 15 May 2017, the headlight issue occurred again while MT was driving home from Gosford; (j) on or about 15 May 2017, CT and MT took the vehicle to West End Mazda for a service and for a further service on 19 May 2017 and 26 May 2017; (k) on 15 May 2017 and 26 May 2017, West End Mazda performed work on the vehicle but were not able to do any work on 19 May 2017; (l) on 30 May 2017, CT and MT took the vehicle for a drive at night and took photos of the headlight beams from inside the vehicle; (m) on 31 May 2017, CT took the vehicle to West End Mazda and showed the photos to Mr Steve Rochford a West End Mazda service manager; (n) on or about early June 2017, CT and MT were forced to cancel their family holiday for the June long weekend because they could not drive at night and MT contacted NSW Fair Trading and the ACCC about the issues with the vehicle; (o) on 2 June 2017, CT provided photos of the headlights to Mr Rochford at West End Mazda; (p) on or about 11 June 2017, CT and MT returned to West End Mazda and told Mark Wiggins, a West End Mazda manager, that they did not want any more repairs on the vehicle and wanted a refund or replacement. Mr Wiggins told CT and MT they should contact Mazda; (q) on 13 June 2017, West End Mazda reopened the technical report and corresponded with Mazda in relation to the testing and repairs to be done on the vehicle of CT and MT; and (r) on 14 June 2017, the West End Mazda service centre informed MT that the vehicle was ready to be picked up. Mr Wiggins told both CT and MT that he was not prepared to offer any refund, replacement or compensation and directed CT and MT to take their consumer guarantee claim to Mazda directly.

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Principal findings and reasons of the primary judge 260 The primary judge made the following unchallenged findings with respect to the telephone call between MT and Ms Temling on 15 June 2017: 301 On 15 June, after again being told to contact Mazda by Mr Wiggins, MT telephoned Mazda directly and spoke with Ms Jacqueline Temling. Ms Temling told MT that a case manager (Mr Justin Waldron) had been appointed to their case that day and she would take a message and get him to call them back. Ms Temling asked for a "heads up" on what was wrong with the lights. MT said that there had been problems with the headlights and they had spoken to the manager of the service department, and that "he thinks he has fixed them but we don't know until we drive them at night". MT said that with the holidays coming up, they had a big trip planned to drive up to Queensland in two weeks' time and that they had lost confidence in the car. Ms Temling told MT that the matter had been allocated a case number. In response to a query from Ms Temling, MT again confirmed that the manager of the service department believed he had fixed the problem "but he doesn't know. And unfortunately we've heard this story far too many times for our liking". 302 MT and Ms Temling then had the following exchange: MT: And, and I have actually spoken to the ACCC and opened up a case under the Consumer …where they said trumps the warranty. Ms Temling: No. So we - as a manufacturer, we have the right to fix the car under warranty, and that's what … that's what's happening at the moment … MT: And also, if you refer back to the ACCC, the Consumer Guarantee overrides any warranty. … I've been on the phone quite a fair bit to the ACCC today and they've said that their legislation overrides warranty … And because the headlights are a major failure, this - we can actually seek either a full refund or replacement vehicle. And that's unfortunately the path that we're going down … Because it has been six months. Ms Temling: …and that's totally fine because you're able to do that, your - that's your choice … You have to follow your path, and we have to do what we feel - what, what we're, we're - according to our guidelines, what we […] do. … Ms Temling: So I'll let Justin [Waldron] know the story. 303 Ms Temling then asked how long the car had been at the dealership and to whom MT had spoken at the ACCC. MT answered Ms Temling's questions and said that NSW Fair Trading, rather than the ACCC, would contact Mazda. Ms Temling then said: Yep. Our problem is to fix the car, and that's what we're going to do. So I will pass this all on to Justin and you can - and he can contact you. 261 The primary judge found that: 308 CT had rejected the vehicle. At that point, it was surely Ms Temling's obligation under the ACL and Mazda's own training materials (see [43] above) to "escalate" that request for consideration by the appropriate executives designated by Mazda to assess the merits of the rejection - not instead to say, as Ms Temling in effect said, "well you can do whatever you like, but we are relying on our warranty obligation to fix the vehicle". 309 And the submission that Mazda was instead, by telling CT and MT that they had the "choice" to seek either a full refund or a replacement vehicle, "affirming MT's right as a consumer to pursue a remedy" is a wholly unrealistic characterisation of the exchange relied on by the ACCC. 262 The primary judge rejected a submission by Mazda that the "context" relied on by the ACCC permitted the "attribution of any meaning that was different to the ordinary meaning of the impugned words" (at J [307]). The primary judge accepted that the statement in the course of the telephone call between Ms Temling and MT on 15 June 2017 that Mazda, as the manufacturer of the vehicle, had "the right" to fix CT/MT's vehicle under warranty, made in response to their rejection of the vehicle under the ACL, did convey, by necessary implication, representations in the form of ACS [11(b)] and [11(c)] Representations. 263 The primary judge also found that a submission by Mazda that telling CT and MT that they had the "choice" to seek either a full refund or a replacement vehicle was 'affirming MT's right as a consumer to pursue a remedy" was "a wholly unrealistic characterisation of the exchange relied on by the ACCC". The primary judge further found that Mazda's submission that "the impugned statement was plainly based on the information then available" to Ms Temling, "is hardly to the point".

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Principal findings and reasons of the primary judge 274 The primary judge made the following unchallenged findings with respect to the telephone call between CT and Mr Waldron on 16 June 2017: 312 On 16 June 2017, CT telephoned Mazda and spoke with their case manager, Mr Waldron. Mr Waldron expressed his understanding (based on the notes from the dealer) that new headlights were fitted in December 2016, and they had worked until the previous Friday. CT told him that the problems with the headlights had been going on for longer than that and set out a number of days that the vehicle had been back to the dealer. Mr Waldron noted that he was looking through the help case information but "all the information isn't there". 313 The following exchange took place: CT: So we've, we have tried to get it resolved but at this stage, we're not happy and we've already contacted the ACCC and raised a case with them as a major fault. Mr Waldron: Look, that's something that, that's your option. From our point of view, our, our requirement is to fix the vehicle, and that's the information I'll be looking through. So, yeah, so I'll call the dealership and then I'll give you a call back and advise what they have done and then see where we need to move forward from there. CT: Well, well it's not really relevant from our point of view because we no longer have faith in the vehicle and it's not lived up to our expectations as a new vehicle, and we therefore classify it as a major fault, as per the Consumer Guarantee. Mr Waldron: And that's something that, as I say, that's your option. But our, our requirement as a manufacturer is to, is to fix the car. And if that's what we've done, then as a case manager in the customer support area, our, our advice then would be to pick up the car if it's fine. If you, if you're not happy with that side of it, if we get contact from Fair Trading or somewhere like that, then we're happy to deal with them as well and advise them what we have done to rectify the concern. CT: Under your own warranty conditions, you acknowledge that a major fault is - entitles us to a refund or a replacement car. Mr Waldron: Yeah, well I guess it's under the interpretation as to what a major fault is. So … CT: The ACCC's interpretation is - so, which we've met three of the four conditions at least that they list on their website. Mr Waldron: Yeah. And that may be the case. And if it needs to go that way, then that may be a way it will go and … CT: It's not needs to, it's going that way. We are giving you formal notice, we have raised a case and if we don't get a resolution, we are definitely going that way. Mr Waldron: Yeah. But we haven't had any contact from them. So as I've said, our, our - as a manufacturer, our requirement is to fix the vehicle. And I'm not sure what we've done to do that yet, so I need to get more information. And in doing that, I need to call the dealer and go through that with them. … Mr Waldron: Well, as I've advised you, certainly what I'll be doing is calling the dealer, getting the information and then, if you would like that in an email, I can certainly send you an email outlining what's been done. CT: So, your story is still that you're obligated to repair it and not follow the Consumer Guarantee? Mr Waldron: Our obligation is to repair the vehicle. As a manufacturer, we work on the repair, repair process. … Mr Waldron: Look, that's an option you're making [to not pick the car up]. As I say, from our point of view, I've advised you I have research that I have to do at this end and that won't be finished today. So I, I have a time frame there, so early next week I would expect to have that email out to you. But unfortunately, it's not going to happen today. … Mr Waldron: Yep. So have you - are you asking West End Mazda to replace the vehicle or are you asking … ? CT: Yeah. Mr Waldron: … Mazda Australia. CT: Well, we, we approached West End Mazda for a replacement or refund. And their response was to say it's a warranty issue and to direct us to call Mazda. Our opinion is it's not the warranty issue and falls under the Consumer Guarantee and should actually be directed therefore to the manager of West End Mazda, but we did - he did ask us to call you … … Mr Waldron: Because we, we haven't been passed on that email [which CT sent to the dealer] so we have no visibility to that email at all. (Original bolding.) 275 The primary judge rejected a submission by Mazda at J [319] that read as a whole, the conversation between Mr Waldron and CT: conveyed that if there was a major failure then consumers would be entitled to a refund or replacement vehicle. There was a dispute as to whether or not the complaint amounted to a major failure. Mr Waldron expressly stated that it may be found that the consumers' vehicle had suffered a major failure. 276 The primary judge found that in the face of CT's insistence that the car had suffered "a major fault" and that they were entitled to a refund or a new vehicle that when Mr Waldron replied, "our requirement is to fix the vehicle" it necessarily implied a false and misleading representation in the form of an ACS [11(c)] Representation. 277 The primary judge stated that this finding was reinforced by the context of the conversation between Mr Waldron and CT. He explained at J [321]: In another part of the conversation, CT asked the question: "your story is still that you're obligated to repair it and not follow the Consumer Guarantee?" Mr Waldron responded: "Our obligation is to repair the vehicle. As a manufacturer, we work on the … repair process". That too is consistent with the ACCC's case. And when CT pressed Mr Waldron about having been told by the dealer to call Mazda in response to his "approach" for a refund or replacement vehicle, Mr Waldron's Delphic response is "so we have no visibility to that email at all". I thus fail to see how the conversation could be characterised as "involv[ing] a dispute about whether CT/MT's vehicle ha[d] experienced a major failure", as Mazda submitted.

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Principal findings and reasons of the primary judge 285 The primary judge made the following unchallenged findings with respect to the telephone call between MT and Mr Waldron on 10 July 2017: 324 Mr Waldron telephoned MT the same day. Mr Waldron asked, "Just out of interest, how is car going … ?" MT said she had not had working headlights for such a long time that "we forgot how they work", but that the headlights seemed to be pointing too high. MT also said she was "not happy with them" and then, she was not "a hundred percent happy with them". She said, "I've lost faith in the vehicle", and "I'm driving my family around in the car and I'm just expecting the headlights to fail at any moment". Mr Waldron asked what the issue with them was. MT said she was not an expert and not qualified but, to her, they seemed too high. Mr Waldron asked if oncoming cars were flashing their lights. MT said no. MT said it had happened in the past but not recently, although she had not been driving much recently. She later added, "… we've got a big trip up north in the car coming up, and I'm just - I don't have faith in the car because I don't want to be stuck on a highway between here and, and Northern Queensland, stuck on a road with nowhere to go". 325 Mr Waldron explained that Mazda had been advised by the dealer that when the vehicle was dropped off in June, the service manager took the vehicle home at night to test and, in his professional opinion, the lights were low, but only marginally. Mr Waldron noted that the service manager advised that they carried out the relevant test. Mr Waldron said that, although he was not from the technical area, "I guess at the end of the day, from our point of view, we, we rely on the dealers because they check the vehicles … If there is a manufacturing defect there, we - then obviously under the warranty we, we're obligated to repair it. And that's what we do. So if that repair's been carried out and you're still concerned about it, then our recommendation would be to go back to the dealer and see why".

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CT/MT 6, 7 and 8 290 Ground 22 is directed at three representations that the primary judge found were made to CT in the course of a telephone conversation between Mr Micallef and CT on 6 September 2017 (CT/MT 6, CT/MT 7 and CT/MT 8). 291 The ACCC characterised: (a) CT/MT 6 as a representation in the form of an ACS [11(a)] Representation (opinion that faults with their vehicle were not major failures under the consumer guarantee provisions of the ACL); (b) CT/MT 7 as a representation in the form of an ACS [11(b)] Representation (opinion that no entitlement to a refund or replacement vehicle at no cost under the consumer guarantee provisions of the ACL); and (c) CT/MT 8 as a representation in the form of an ACS [11(e)] Representation (a major failure within the meaning of the consumer guarantee provisions of the ACL in respect of motor vehicles is limited to a failure of a major component of a vehicle). 292 Contrary to the characterisation by the ACCC, the primary judge found that CT/MT 7 was in the form of an ACS [11(a)] Representation and CT/MT 8 was in the form of an ACS [11(b)] Representation. 293 The ACCC provided the following particulars of the statements that it relied upon as giving rise to CT/MT 6, 7, and 8: Call on 6 September 2017 between CT, MT and Mr Micallef Mazda represented to CT, in the context of the CT and MT's Request under the ACL and CT and MT's claims that the Fault was a major failure, that the Fault with the Vehicle was "not a major breakdown in the vehicle, it is an inconvenience", and that Mazda would not provide a refund or replacement vehicle. Mazda represented to CT, in the context of the CT and MT's Request under the ACL, that the Fault with the Vehicle was "not a major breakdown in the vehicle, it is an inconvenience", and that Mazda would not provide a refund or replacement vehicle. Mazda represented to CT that headlights are not considered to be a major component and CT and MT were not are entitled to a replacement vehicle unless there are numerous issues on the same component.

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Principal findings and reasons of the primary judge 294 The primary judge made the following unchallenged findings with respect to the telephone call between CT and Mr Micallef on 6 September 2017: 339 The same day, Mr Micallef telephoned CT. The call lasted more than two hours. 340 Mr Micallef confirmed that the issues with the headlight actuators had been repaired. CT agreed and that as far as he could see, there was nothing wrong with the vehicle. Mr Micallef noted that there was a discrepancy between the information provided by the dealer and the information provided by CT and MT and he was not able to resolve that as he was not there. Mr Micallef said that Mazda was prepared to offer two free services and a one year extended warranty and asked how that sounded to CT. CT said it "sounds very weak, frankly". 341 Mr Micallef explained that when management looked at the issue of a replacement or refund, they did not seek to resolve the differences between what the dealer said and what CT and MT said occurred. Rather, Mr Micallef explained, management looked at the warranty claims in respect of the headlights and decided that it was not what he called a "major breakdown in the vehicle" and "it is an inconvenience". 342 CT responded that it was a "major breakdown" if the vehicle was un-roadworthy - and that was the definition of a major fault. Mr Micallef said that Mazda appreciated that it was an inconvenience but it was not a major issue and, on that basis, it was prepared to offer free services and extended warranty for the inconvenience. 343 CT said that he wanted Mazda to confirm in writing that not having working headlights was not a major issue. Mr Micallef said that the problem was "not the headlights weren't working, they weren't - they weren't, um, the range wasn't as high as it should have been". CT said that the headlights were pointing to the ground. Mr Micallef said that was not discussed. Mr Micallef said that the dealer was adamant that he never said the car was un-roadworthy. 344 Mr Micallef explained that he was happy to investigate the issue of the un-roadworthiness of the vehicle. Mr Micallef said that the failure of the headlights was not considered a major concern on the vehicle like it might be if the engine failed. 345 CT said that he and MT were in agreement that the offer was not acceptable. 346 CT recounted the inconvenience to him and the number of trips to the dealer. Mr Micallef explained that he understood the frustration, but he felt he had been transparent about what Mazda had based its decision on, and Mazda took the view that the vehicle was not faulty, but rather had a faulty component. He agreed that it took a long time to fix, but said that the car was not faulty and that it had been repaired. On that basis, he said that Mazda was prepared to make the offer in respect of the customers' inconvenience. He said that if CT was not happy, then he would relay that back. CT said that would be a big understatement. 347 CT said that because Mazda was not (in his view) prepared to follow the consumer guarantees, he and MT would take the matter further. CT provided his summary of Mazda's position and then asked Mr Micallef to confirm. Mr Micallef again said that Mazda would ignore the allegation that the car was un-roadworthy. Mr Micallef then said: ---all right, that's the end of it, that's it, if a car's un-roadworthy whether you - whether - whether it's you say that or the dealer says that you shouldn't be driving a car on the road if it's un-roadworthy full stop, right, so let's take that out of the equation. What we are saying is whatever the concern was with this vehicle, which is the headlights, okay, in the scheme of things it is not considered to be a major - it's not a major component that's failed in the car--- … ---component of a vehicle is an engine and what people say, you know, they say about the consumer laws, what people don't understand is, yes, you are entitled to a replacement vehicle if you have numerous issues on the same - on the same component as in, like, if - if your car had an engine replaced and two months later your car needed another engine replaced, that may not even warrant a - a replacement vehicle because under - under the warranty we're obliged to replace whatever fails as a manufacturing concern --- … ---but if then a transmission went on that vehicle, we've got two engines and a transmission, you're probably entitled to another vehicle, okay? So I'm trying to - please don't misunderstand what I'm saying, we don't feel your headlights are roadworthy and if you had an accident we're not - it's not to do - we're not saying that at all, what we're saying is if you - if you take the vehicle as a whole component, nothing to do with roadworthiness, nothing to do with danger or safety, if you look at a vehicle as a component there are large components in the vehicle that are obviously big ticketed items that if they fail constantly, yes, you've got a cause for concern. What we're saying that this is not a major ticketed item on the vehicle so it's not considered a major issue on the vehicle, it's not - nothing to do with the safety or the fact that, you know, you - that you don't have headlights. (Original emphasis.) 295 The primary judge observed (at J [357]) that Mazda's case on CT/MT 6, 7 and 8 was in substance that (a) Mr Micallef was "hidebound" by the fact that he could not "resolve" the "discrepancy" between what the dealer had said about CT/MT's vehicle ("there was nothing wrong with the vehicle") and the claims by CT and MT that the headlights on their vehicle did not work and that was a "major failure under the ACL, and (b) the impugned remarks had to be construed "in context". 296 The primary judge rejected those submissions, stating at J [358]: In my view, it is not open for Mazda now to say that the fact that Mr Micallef could not, or would not, make any attempt to resolve the "discrepancy" provided any arguable basis for the proposition that Mazda had reasonable grounds for its stated opinion (that the headlights failure was not a major failure or major issue), in particular when he made no attempt to "escalate" the request for a refund or replacement vehicle in accordance with Mazda's internal policies. As the extracts from the cross-examination reveal, Ms Han conceded that "as at 6 September 2017, no real consideration had been given to the consumer's right to a refund or replacement under the [ACL]".

[87]

Mazda's contentions and submissions 297 Mazda contends that CT/MT 7 and 8 as found by the primary judge were not in the form of the representations as characterised by the ACCC and CT/MT 8 was found to be a representation of opinion when it was alleged to be a representation of fact about consumer rights generally under the ACL. 298 Mazda further contends that the primary judge erred in finding that (a) contrary to the evidence, Mr Micallef told CT that not having working headlights was "not a major issue" (at J [356]), (b) the fact that Mr Micallef could not, or would not, resolve the discrepancy between the information provided by CT/MT and the dealer was not a reasonable basis for any opinion stated (at J [358]). 299 Mazda contends that the primary judge should have found that the impugned statements did not convey CT/MT 6, 7 and 8 because: Further, the grounds for the statements as made were as stated (based on information from the dealer) not otherwise. The Mazda representative qualified his statements by saying that Mazda relied on information from the Mazda dealer to the effect that the fault (which according to the dealer was that the headlights aimed a little low) was not significant and had been repaired which statement was inconsistent with the implied representations as to the basis of the opinion as found; 300 Mazda otherwise contends with respect to CT/MT 6, 7 and 8 that (a) Mazda did not represent by implication that CT/MT were not entitled to a refund or replacement vehicle at no cost to CT/MT under the guarantee provision of the ACL, (b) the statements made by Mr Micallef did not convey the further implied representation that the opinion was based on reasonable grounds, and (c) if an implied representation as to reasonable grounds was conveyed, then there were reasonable grounds for that opinion. In advancing these contentions, Mazda repeats Grounds 3 and 4. 301 The ACCC accepts that the primary judge erred in finding that CT/MT 7 conveyed an ACS [11(a)] representation and CT/MT 8 conveyed an ACS [11(b)] representation. In its notice of contention at [3] and [4], the ACCC contends that the primary judge should have found on the grounds alleged by the ACCC before the primary judge that CT/MT 7 conveyed an ACS [11(b)] representation and CT/MT 8 conveyed an ACS [11(e)] representation.

[88]

Consideration 302 We are satisfied that the contentions advanced by the ACCC in its notice of contention are correct. The findings should have been made by the primary judge in the form contended by the ACCC in its notice of contention. 303 The contention advanced by Mazda that it only relied on information from the dealer as to whether the faults with the vehicle's headlights were significant cannot be accepted. Mr Micallef did not simply rely on information from the dealer. He stated to CT (as his own opinion) that faulty headlights were only an inconvenience and not a safety issue. Moreover, he made that statement to CT in response to the faults with the vehicle's headlights raised by CT, notwithstanding his inability or refusal to resolve the discrepancy between the information provided by CT/MT and the dealer with respect to the headlights. Further, Mr Micallef did not make any attempt to escalate the request for a refund or replacement vehicle in accordance with Mazda's internal policies. 304 In context, it was open for the primary judge to conclude that the reported faults with the headlights were sufficiently serious to give rise to a requirement to consider the potential engagement of the consumer guarantee provisions in the ACL. It was further open for the primary judge to conclude that the making of an offer by Mazda of two free services and a one year extended warranty in response to the concerns raised by CT/MT conveyed CT/MT 6, 7 and 8. 305 We are satisfied for these reasons and the reasons advanced above with respect to Grounds 3 and 4 that: (a) it was open for the primary judge to find that (i) the statements made by Mr Micallef conveyed CT/MT 6 and a further implied representation that the opinion was based on reasonable grounds, and (ii) Mazda did not have reasonable grounds for that opinion; (b) the primary judge erred in not finding with respect to CT/MT 7 that (i) the statements made by Mr Micallef conveyed CT/MT 7 and a further implied representation that the opinion was based on reasonable grounds and (ii) Mazda did not have reasonable grounds for that opinion; and (c) the primary judge erred in not finding with respect to CT/MT 8 that the statements made by Mr Micallef conveyed CT/MT 8 and that it was false or misleading. 306 It follows for the reasons given, that Grounds 3 and 4 in the ACCC notice of contention should be accepted and Ground 22 must be rejected.

[90]

Principal findings and reasons of the primary judge 309 The primary judge made the following unchallenged findings with respect to the letter from Mazda dated 28 September 2017: By letter dated 28 September, Mazda wrote: We refer to the concerns you have raised in regards to the operation of the headlights on your Mazda CX-5 vehicle. We understand the headlight concern has been resolved and the headlights are now operating as intended. … In recognition of the inconvenience you may have experienced and in order to provide you with an assurance of our ongoing support, Mazda Australia would like to extend the following offer to you in full and final satisfaction of your matter: 1. We will provide you with complimentary servicing for the next two scheduled services (30,000km and 40,000km) for the above vehicle … and 2. Mazda Australia will extend the factory warranty on your vehicle until 19 July 2020. 310 The primary judge found that CT/MT 9 was misleading because Mazda had not considered whether the faults with the vehicle's headlights were, in fact, a major failure for the purposes of the consumer guarantee provisions. The primary judge stated at J [372]: As is apparent from the evidence set out above, the evidence, including that given by Ms Han in cross-examination, showed that because Mazda never properly explored the question of whether the failure with the headlights was a major failure, including in circumstances where CT and MT had taken the vehicle back to the dealer 13 times, and where safety concerns were, one would have thought, very real. I reject Mazda's submission that the letter was a mere "offer". As counsel for the ACCC said in closing, that submission misses the point. 311 The primary judge then stated at J [373] in response to a submission from Mazda that the statement that the faults with the vehicle had been rectified "was plainly based on the information CT had conveyed to Mazda on 6 and 8 September 2017", referring to an answer given by CT in cross-examination: But that goes nowhere in circumstances where the evidence established that Mazda gave no proper consideration to the request made by CT and MT for a replacement vehicle or refund.

[93]

SB/KB background facts 317 The primary judge made detailed unchallenged findings at J [402]-[438], largely taken from the agreed facts, of the background to the representations that he found were made by Mazda to SB/KB. 318 The background findings made by the primary judge can be summarised as follows: (a) on 13 May 2013, SB purchased a Mazda CX-5 Maxx Sport Diesel for a total price of $42,000; (b) the dealer was Regal Motors Newcastle, NSW (Newcastle Mazda); (c) on 8 April 2015, the vehicle lost power while SB was driving along the Pacific Highway; (d) on 16 April 2015, Newcastle Mazda identified that the head gasket had failed and Mazda approved the dealer's "prior authorisation request" for a partial engine replacement, which was installed by 7 May 2015; (e) on 9 April 2015, Mr Crawshaw entered a note in Mazda's Maestro record stating, among other things; "I spoke with Steve Groves. He will be happy to support the customer with a rental vehicle"; (f) on 18 May 2015, Mazda completed a "Post Repair Checklist" indicating "ACL Major Failure: yes"; (g) on 18 July 2015, SB was driving to Newcastle from Sydney at around 110km per hour when the warning lights came up on the dashboard again and the vehicle lost power; (h) on or about 18 July 2015, SB submitted a message to Mazda via the "contact us" form on the website, which stated "Last night while returning home from Sydney to Newcastle the same occurred on the F3 motorway" and "The car has done less than 10,000 kms since the replacement engine"; (i) on 20 July 2015, Newcastle Mazda submitted a technical report to Mazda's technical department describing the issues with the vehicle and SB collected a loan vehicle that had been arranged by Mazda from Glendale Mazda; (j) on or about a week after 20 July 2015, KB (in SB's presence) told Newcastle Mazda that they had no confidence in the vehicle and wanted a replacement. The dealer told KB there was "absolutely no way" Mazda would give them a replacement and to take it up with customer care at Mazda; (k) on 23 July 2015, Mazda was contacted by the dealer and informed that SB and KB had rejected the vehicle and requested a replacement vehicle; (l) on 6 August 2015, Michael Burlak, a Mazda customer support employee, entered a note in Mazda's Maestro record on 6 August 2015 stating, among other things, that "it appears that previous [sic] Mazda may not have fitted the injectors correctly"; (m) on 11 August 2015, SB spoke with Central Coast Mechanic, Alan, and was provided with an explanation which included a reference to a failed oil sensor; (n) on or about 13 April 2016, SB tried to turn on the vehicle but it would not start. SB arranged for a new battery to be installed via his NRMA membership, but the vehicle still would not start. A representative at Port Macquarie Mazda told SB that a new starter motor had to be sent to Port Macquarie; (o) on or about 21 July 2017, SB noticed while driving the vehicle that the engine was not running at full capacity and that it lacked power, particularly when he accelerated. The engine light came on very briefly, flashing on for a matter of seconds and for less than a minute. SB observed when opening the bonnet that there was coolant spray all over it. SB was informed by a Newcastle Mazda representative on that day that the vehicle required an engine replacement. Newcastle Mazda did not tell SB why the engine needed replacing. SB responded, "No. I don't want to drive that car anymore"; (p) Newcastle Mazda submitted a technical report to Mazda's technical services department describing the issues with the vehicle. Newcastle Mazda "suspected" the thermostat had failed. The vehicle was found to have an engine coolant leak and the head gasket had blown. Mazda's technical department instructed Newcastle Mazda on the repairs to be undertaken for the vehicle and to replace the engine; and (q) on 26 July 2017, in a telephone call between Ms Miller and SB, Mazda offered to cover the cost of the new engine and provide a loan vehicle.

[95]

Principal findings and reasons of the primary judge 321 The primary judge made the following unchallenged findings with respect to the telephone call between KB and Ms Miller on 28 July 2017: 439 On 28 July, in a telephone call between KB and Ms Miller, KB said, "the outcome that we were hoping for is for a new car". She said that it was their "priority" given it was the third time it had happened with the car. Ms Miller noted that "I haven't been getting that from [SB]"; KB responded, "Look, he's very stressed". Ms Miller said, "So the fact that you're wanting another car … regardless, even that going forward, the … Your CX-5 is still registered in your name. It's going to be driveable" and that, "It's going to get a brand new engine and associated parts". Ms Miller explained that Mazda would give an additional two year "assurance". KB explained that she had previously asked the dealer for a replacement and been denied this outcome. 440 The following discussion ensued: Ms Miller: So - so what we'll do is the car needs to be fixed anyway, okay, so----- KB: Yeah. Go ahead with what you're doing Ms Miller: We're doing it anyway but what we'll do----- KB: Yeah, exactly. Ms Miller: -----if this is the path you want to take----- KB: It is. Ms Miller: -----what I'm going to need to do is get Newcastle Mazda to do a----- KB: Yes. Ms Miller: Do up a new quote for us. KB: Yeah. Ms Miller: So what they'll do - did you want to perhaps - and I'm - and I'm going to refer to it as "trade into another CX5 sport diesel"? 441 KB referred to the loss of power at speed on a freeway. Ms Miller responded by identifying this as "limp home mode" which provided "enough power to get you off the road" to which KB said, "yes that's right". 442 Ms Miller said: … if you want to go into a new CX-5 we can make it happen but there will be an amount that you will need to pay. I can't tell you what that amount is. We're not going to - we won't be able to give you a brand new CX-5 diesel with no cost to you. … That won't happen. That can't happen. That's not going to happen. … Because you've had the failures and all that is taken into consideration. … We do look at a certain - we look at all of that. … When we come back to you with a bottom line figure … of - of, okay, [KB], this is what we've got. Are you happy to accept this offer? … You can say yes or no. 443 Ms Miller then explained it had to go through a chain of events including being considered by the "Mazda legal team". She said "there will be a figure" but "how much that's going to be, if you're willing to accept - that's your choice". Ms Miller also said, "you can seek your own independent legal advice if you choose", and: …we look at the background, we look at the history. … You know, the warrantable history on these sorts - you know, when we come - when we're down this path we look at the warranty background. … But you've got to bear in mind that it is a four year old car with close to 200,000 ks on it, so all that is taken into consideration. … Everything is reviewed and we present you with the best figure that we possibly can squeeze. 322 The primary judge rejected a submission from Mazda that there has been no clear request for a replacement vehicle. Mazda contended with respect to SB/KB 1 that the statement by KB to Ms Miller that "the outcome that [they] were hoping for is for a new car" fell short of any rejection of the vehicle for the purposes of s 259(3) of the ACL. The primary judge stated at J [448] in response to that submission that: The insuperable difficulty with that submission is that Ms Miller quite clearly understood KB to have requested a new vehicle. That much is obvious from her response to the request ("We're not going to - we won't be able to give you a brand new CX-5 diesel with no cost to you. … That won't happen. That can't happen. That's not going to happen.") and from her Maestro note ("[KB] called has asked for this vehicle to be replaced"). 323 The primary judge also rejected submissions by Mazda with respect to SB/KB 2 that (a) Ms Miller's statements concerning the impact of the age and mileage of the vehicle on the claim for a replacement vehicle or refund were a "spontaneous prediction of what Mazda would do", (b) it was not a decision for Ms Miller to make and "KB knew it", (c) the "prediction" that Mazda would not give SB/KB a new vehicle because of their vehicle's age and mileage was Ms Miller's opinion and "accurate", and (d) Ms Miller's statements concerning the age and mileage of the vehicle were an explanation of a factor "that was taken into account in determining the amount of compensation to be offered to the consumers". 324 The primary judge did not accept these submissions, stating: 453 I reject Mazda's submissions. How can the words "[w]e're not going to - we won't be able to give you a brand new CX-5 diesel with no cost to you. … That won't happen. That can't happen. That's not going to happen" conceivably be read or construed as "a spontaneous prediction of what Mazda would do"? I am equally at a loss to understand the relevance of seeking to characterise Ms Miller's response as "spontaneous". Whatever meaning the submission sought to convey is a question that I can put to one side, because Mazda did not call Ms Miller to testify. But in any event, and more importantly, what Ms Miller said was not a "prediction" - it was a resolute assertion of something that was to be regarded as incontrovertible, viz getting a new car could not and would not happen. 454 I also do not accept that "when read in its context, the statement made to the effect that it was a four year old car with 200,000 kms was not a statement about the reasons for denial of the claim for a replacement vehicle at all". That is exactly what it was.

[100]

Principal findings and reasons of the primary judge 336 The primary judge made the following unchallenged findings with respect to the telephone call between KB and Ms Miller on 4 August 2017: 456 On 4 August 2017, KB and Ms Miller had a further telephone call. KB told Ms Miller that, rather than the diesel, they would now prefer a petrol model. Ms Miller said she had some figures back from the dealer, and informed KB that the history of the vehicle, SB's previous requests for a replacement, the fact that SB did not feel confident in the vehicle, and the age and mileage of the vehicle would be "taken into consideration". 457 The following discussion then ensued: Ms Miller: What's going against - what's going against us is the age and the kilometres of the car. … That's what's - you know, that's what's pulling - pulling us down. KB: I understand that and - and, yeah, exactly. Ms Miller: Yeah. KB: And I suppose in some ways it isn't really, like, a normal trade-in, is it? Ms Miller: Well, yeah. KB: I know you're looking at that but I don't think it should be the - the focus of the outcome. Ms Miller: Yeah. So there's two parts to it. … There's the trade-in - the trade-in value, which is at the dealer level, basically. … And we're not talking Mazda dealer, we're talking, basically, Redbook. … So what - what the - what most - I dare say all - used car and new car dealerships and agents look at is the Redbook price. So regardless of the warranty history on it, what they're going to look at is - and the service, what they're going to look at is Redbook value, which is----- KB: Yeah. Yeah. And I - yeah. Ms Miller: And you could look at that yourself and it will give you an indication of a car of that age and that kilometres. KB: Yeah. I understand that but it's not - we wouldn't be in this situation - like, I don't think we can be treated as people that are coming to trade in their car----- Ms Miller: No----- KB: -----and have those rules apply to us. Because we've been in a----- Ms Miller: You're not. KB: Yeah. Ms Miller: You're not, and that's where it steps over into Mazda. KB: Yeah. Yes. Okay. Ms Miller: That's where it steps over into Mazda. So dealers can only do so much. … And then, because of the history on this one … and because we're not treating you like a normal customer who's walking in a trade-in----- KB: Yeah, that's right. Exactly. Ms Miller: That's where it's - exactly. That's where it does step in to Mazda. KB: Yeah, to do the right thing. Yeah. Ms Miller: Okay. To do the right thing, yes, and we do take - and all - all the history on this car, the communication----- KB: Yeah, because there's quite a bit. Yeah, so - yeah. Ms Miller: -----the inconvenience - yes. And, look, I went through some of the notes there and it's just - it's just been a nightmare every time it's been off the road. KB: It's been a nightmare for [SB] and, like, it's been one starter motor and three engines, so that's - that's four separate issues where, you know, it's come off the road, yes. Ms Miller: Yeah. Yeah, so length of time----- KB: Yes. Ms Miller: -----and - and at - and at the most inconvenient time, from what I was looking back at the notes there, so----- KB: I know. Ms Miller: -----we are taking all that into consideration. KB: Good. I'm pleased to hear that, Marilyn, thank you. 458 During the call, Ms Miller also said that SB and KB's case needed to be further reviewed by Mazda and "by our legal team" and that "I had that actually reviewed by our legal team and senior management". Ms Miller noted that the vehicle was being repaired but that "that doesn't mean that this is off - off the table … Not by a longshot". 337 The primary judge rejected the submission made by Mazda with respect to SB/KB 3 that the impugned statements were directed at the value of the vehicle and how Mazda had arrived at a figure for compensation, rather than statements of reasons why Mazda had refused to replace the vehicle. The primary judge explained at J [462]: I disagree. In a context where Ms Miller had told KB only a few days earlier that "[w]e're not going to - we won't be able to give you a brand new CX-5 diesel with no cost to you. … That won't happen. That can't happen. That's not going to happen", it is, contrary to Mazda's submission, plain that the impugned statements (the age and kilometres of the car were "pulling us down") were indeed statements of reasons for Mazda's refusal to replace the vehicle.

[104]

Principal findings and reasons of the primary judge 344 The primary judge made the following unchallenged findings with respect to the telephone call between SB and Ms Miller on 11 August 2017: 468 Ms Miller and SB spoke again on the telephone on 11 August. Ms Miller made an offer based on the "Red Book" value price (around $10,000) for a four year old CX-5 car with over 200,000 km on it, in these terms, with the following response: Ms Miller: I did meet with our management this - last night and this morning about your request. Now at this - they're willing to tip in only 5,000 towards the changeover. SB: Sorry? Ms Miller: They're willing to contribute - contribute $5,000 to a changeover. SB: Oh, well, that's nothing. Ms Miller: Not enough? SB: So I - I don't understand. What's - what's that mean? Like, so a new car, typically, would be about 43,000, is that right? 469 Ms Miller told SB that "the reason the figure is - is - is only 5,000 is because it is a four year old car with over 200,000 ks on it. Yes, it has had the two engines, we see all that". Ms Miller said that Mazda's offer amounted to $5,000 in addition to the trade-in value for the vehicle. She explained that if SB purchased a new car for, say, $43,000 and traded in the vehicle for $10,000, Mazda would contribute another $5,000, so that the amount owing would in that event be $28,000. 470 SB responded by pointing out that he still owed a debt of $11,000 on the financing of the vehicle and said, "[a]ll of a sudden, it's back to 40,000 so that's a totally unacceptable outcome". 471 Ms Miller said, "I'm just letting you know where - what the call on it was". SB said that he considered the offer was "outrageous" and that it was an "absolute rubbish offer". SB referred to their intention to go to NSW Fair Trading. Ms Miller responded that "my seniors … also look at the - their consumer laws as well and - and there you have it". 472 SB asked whether he received a warranty on the new engine. Ms Miller confirmed that it would be a two year/40,000 km warranty. They then discussed that SB noted that he would travel more than 40,000 km in a year and asked if Mazda would offer a warranty without the limitation of kilometres on it.

[108]

Principal findings and reasons of the primary judge 353 The primary judge made the following unchallenged findings with respect to the telephone conversation which took place between KB and Ms Miller on 1 September 2017: 478 On 1 September 2017, KB spoke with Ms Miller. 479 KB rejected Mazda's offer and told Ms Miller that they were proceeding to NSW Fair Trading. KB asked again for the service history to take to NSW Fair Trading. Ms Miller said that Mazda would have to ask the dealer for it, as Mazda did not have it. 480 KB asked whether Mazda had formulated its offer based on all the facts. She said that there had been "four major things". Ms Miller said, "I can only see two - two major". Ms Miller then referred to the 2015 engine replacement, and acknowledged that that "would be considered major". In relation to the 2016 starter motor incident, Ms Miller said, "[t]he starter motor is not major" (although she added, "Yes, it was [major] to you, I'll agree with that"). Ms Miller said the starter motor was a "major dilemma when that happened because obviously the car wouldn't start but it's not considered major". KB said that she did not hear of too many cars having a starter motor fail in such a short period of time. Ms Miller said that when she was seeking legal advice, she should put that in too. 481 KB pressed the request for a replacement vehicle, as follows: You know, like, just saying, "Oh, we'll give you 5,000 off," you know, we're - we're not coming in with a clean slate trying to buy a car off you. We're coming in as customers that have had a very traumatic and bad deal with buying a brand new car and I just don't think anyone's acknowledged that. 482 In response, Ms Miller said, "Look, let's - there is absolutely no way that Mazda is going to agree to a new car, full stop". Ms Miller asked KB, "I might have been able to up that 5,000 or just ask them to relook at it and up the offer of 5,000 but it won't … it could be six, it could be seven. Is that going to be enough?" KB said no. Ms Miller then said, "Then let's proceed with plan A and that's … your plan A, which is to go to Fair Trading, go down that line. … Because there is no way - no way I'm going to get them to agree to a - to a - to a new car at no cost to you". 483 The following discussion between Ms Miller and KB then ensued: KB: Well, I don't know - I don't know why there isn't, for such a big company, you know, when they have something like this that has gone terribly wrong. To me, it's just proper customer service. I don't understand why it would be a "no way" statement and that's why I am going to Fair Trading because it isn't fair. What you're offering's not fair. Ms Miller: Yeah, I understand. I understand where you're coming from. So, but I guess the managers and the powers that be look at it and - and I did review it with them----- KB: Well, they're not putting customers first, I can tell you, they're putting their own pockets first, which is wrong. Ms Miller: Well, we have supported - I can tell you, there is quite a few customers that we have supported with replacement cars. KB: Yeah. I wonder why - why did they get them? Ms Miller: I tell you when that happens, when they drive it out the workshop brand spanking - sorry, off the sales yard, brand spanking new … It stops. Goes back to a dealer, the dealer has it for two weeks. We don't know what's wrong with it … I've turned around and I've said, "Do you know what? Managers, let's just give these people a new car." 484 Ms Miller said that she would have another discussion with her supervisor but she considered it "highly unlikely" that Mazda would agree to a new car at no cost to SB and KB. In the end, Mazda declined to provide a new car to SB and KB.

[109]

Mazda's contentions and submissions 354 Mazda contends that the primary judge: (a) failed to differentiate between SB/KB 6 (being a statement of opinion for which he found there were no reasonable grounds) and SB/KB 7 and SB/KB 8 (being representations of fact concerning the rights of consumers generally); (b) erred in finding the representations were conveyed because: in saying "Then let's proceed with plan A… your plan A which is to go to Fair Trading, go down that line," after KB rejected the offer, [Ms Miller] recognised that SB/KB may be entitled to greater compensation than was being offered and that statement was not consistent with the representations alleged; 355 Mazda otherwise contends with respect to SB/KB 6 that (a) Mazda did not represent by implication that RC was not entitled to a refund or replacement vehicle at no cost to RC under the guarantee provision of the ACL, (b) the statements made by Ms Miller did not convey the further implied representation that the opinion was based on reasonable grounds, and (c) if an implied representation as to reasonable grounds was conveyed, then there were reasonable grounds for that opinion. In advancing these contentions, Mazda repeats Grounds 3 and 4. 356 Mazda otherwise repeats Ground 7 with respect to SB/KB 7 and Ground 8 with respect to SB/KB 8. 357 In its submissions directed at Ground 8, Mazda submits with respect to SB/KB 8 that the statements made by Ms Miller concerning the service history of the vehicle, including the characterisation of some previous repairs, such as the engine replacement, as "major" were directed at the "identification of the past issues visible to Mazda, not a characterisation of breaches of the consumer guarantee or even a discussion of the topic". 358 Mazda also submits that the response by Ms Miller to KB to the effect that "Then let's proceed with plan A… your plan A which is to go to Fair Trading, go down that line" is irreconcilable with SB/KB 8 because it recognised "the possibility of entitlement". 359 The ACCC contends in its notice of contention at [9(b)] that if the primary judge had conflated the submissions with respect to SB/KB 6, 7 and 8, then his Honour should have found for the reasons that it had advanced that SB/KB 8 conveyed an ACS [11(e)] Representation.

[110]

Consideration 360 Mazda did not develop its contention that the primary judge erroneously conflated arguments made with respect to SB/KB 6, 7 and 8 by not differentiating between SB/KB 6 (a statement of opinion for which there was no reasonable grounds) and SB/KB 7 and 8 (representations of fact concerning rights of consumers generally). The contention appears to be principally directed at the opening words of J [489] in which the primary judge stated "And how could it possibly be "reasonable" for Ms Miller to have told KB …". 361 In any event, and independently of the contention advanced in the ACCC notice of contention at [9(b)] we are satisfied any alleged conflation, in the context of the reasons as a whole, was not material, and that it was open for the primary judge to find that SB/KB 8 had been conveyed from the content of the conversation between KB and Ms Miller, as found at J [478]-[484]. 362 We do not accept that the statements by Ms Miller, read as a whole and in context can be characterised as simply comments concerning the service history of the vehicle and previous repairs. The question at the commencement of the conversation about whether Mazda had formulated "its offer based on all the facts" was asked immediately following KB's rejection of an offer from Mazda and confirmation from KB that she was taking the matter to NSW Fair Trading. Given that context, it was open for the primary judge to construe KB's reference to "four major things" and the responses by Ms Miller that "I could only see two - two major", the 2015 engine replacement "would be considered major", "[t]he starter motor is not major" and "Yes, it was [major] to you, I'll agree with that" were references to what categories of matters could be the subject of complaints under the consumer guarantee provisions of the ACL. We are satisfied that it was open for the primary judge to infer that these responses from Ms Miller suggested that only matters that could be construed as "major" under the ACL consumer guarantee provisions had been included in the offer that had been made by Mazda in its attempt to resolve SB/KB's concerns and thus make it unnecessary for them to pursue the matter with NSW Fair Trading. 363 We are satisfied for these reasons and the reasons advanced above with respect to: (a) Grounds 3 and 4 that it was open for the primary judge to find with respect to SB/KB 6 that (i) the statements made by Ms Miller conveyed SB/KB 6 and a further implied representation that the opinion was based on reasonable grounds, and (ii) Mazda did not have reasonable grounds for that opinion; (b) Ground 7 that it was open for the primary judge to find with respect to SB/KB 7 that (i) the statements made by Ms Miller conveyed SB/KB 7, and (ii) SB/KB 7 was false or misleading; and (c) Ground 8 that it was open for the primary judge to find with respect to SB/KB 8 that (i) the statements made by Ms Miller conveyed SB/KB 8, and (ii) SB/KB 8 was false or misleading. 364 It follows for the reasons given, that Ground 27 must be rejected.

[111]

MG background facts 365 The primary judge made detailed unchallenged findings at J [511]-[546], largely taken from the agreed facts, of the background to the representations that he found were made by Mazda to MG. 366 The background findings made by the primary judge can be summarised as follows: (a) in June 2013, MG purchased a Mazda 6 Diesel Touring Wagon for approximately $46,663; (b) the dealer was Maitland City Motor in East Maitland, NSW (Maitland Mazda); (c) MG had no issues with the vehicle for the first year after the date of purchase; (d) on or about 8 October 2014, the engine warning light for the vehicle came on and an oil pressure warning message displayed on the dashboard; (e) between 8 October and 14 October 2014, Maitland Mazda identified fault code "engine oil deteriorated". Maitland Mazda replaced the engine oil and filter, reset the oil data, updated the Powertrain Control Module, reset the diagnostic trouble codes, and installed an onboard data recorder. Maitland Mazda stated to MG that "we have replaced the oil and oil filter and reset the computer codes. The error on the dashboard meant the oil quality had degraded. It should be ok now"; (f) on or about 24 January 2015, the engine light and low pressure warning message displayed on the vehicle's dashboard; (g) on 24 January 2015, MG contacted Mazda by submitting a message through Mazda's "contact us" page. MG's message stated that "I have a 2013 Mazda 6 Touring Wagon Diesel that is having regular problem" and "It seems that every 7000k it is showing a low oil pressure alert on the dash"; (h) on 28 January 2015, Mazda's technical department instructed Maitland Mazda on the tests and repairs to be undertaken. South Coast Mazda, the nearest Mazda dealership to MG at the time, performed a system reset to address the oil pressure warning light; (i) on or about February 2015, MG was driving on the Hunter Expressway near Maitland. Engine lights illuminated on the dashboard and the "low oil pressure, take car to dealer" warning message displayed on the LCD screen. MG pulled over to the side of the but the brake pedal felt "rock hard"; (j) between 20 February 2015 and 2 March 2015, Mazda instructed Maitland Mazda to replace the camshaft, rockers, turbo charger, vacuum pump and other components of MG's vehicle; (k) MG was advised by Maitland Mazda that the issue with her vehicle was not confined to the brake pedal. Maitland Mazda informed MG that there "is a problem with oil flow around that engine. There are metal shavings from the camshaft which are blocking the filters and the turbocharger and camshaft needed to be replaced. There's a recall on the camshaft"; (l) on 2 March 2015, Mazda's "Post Repair Checklist" was completed by Maitland Mazda and Mazda. The checklist notes that the failure was an "ACL Major Failure"; (m) on or about 3 March 2015, MG spoke to Simon, a Mazda service manager, and stated that "I am not happy with the problems I've had with the car. What are my chances of getting the vehicle replaced by Mazda Australia?" MG said that the answer he received from Simon was that Mazda does buy vehicles back but not often, and Maitland Mazda was confident that the repair had fixed the problems; (n) on an unspecified occasion MG spoke to an unnamed person in sales at Maitland Mazda. MG asked the unnamed Mazda sales representative if there was any chance Mazda could give him a refund or replacement. The Mazda sales representative told MG it was "pretty unlikely" and that he should take up his request with the service department of Maitland Mazda; (o) on or about 11 May 2015, the dashboard engine light and oil pressure came on in the vehicle. Maitland Mazda performed repair works on the vehicle and was informed by Mazda to change the engine oil and oil filter, update the Power Control Module, and replace the engine oil pressure switch; (p) on or about 22 May 2015, the dashboard engine light and warning message came on again. MG had the vehicle towed to Maitland Mazda and stated to someone in the service centre that "You need to fix it properly this time". MG was told by Maitland Mazda that "the oil is clogged with black soot and there is significant damage to the engine bearings and crankshaft and wear on other internal parts. We need to replace the engine"; (q) on or about 12 October 2015, the low oil pressure light illuminated again and repairs were attempted by Maitland Mazda; (r) on or about November 2016, MG took the vehicle to Maitland Mazda as the engine light and low pressure warning had illuminated on the dashboard; (s) between 14 November 2016 and 16 November 2016, Mazda's technical department instructed Maitland Mazda on tests and repairs to be carried out on the vehicle. The vehicle was in repairs for two to three weeks. MG was informed by Maitland Mazda that "the fuel injector was not sealed correctly, which is letting air into the combustion chamber. That is what is causing soot to build up in the oil and block the oil pick-up leading to substantial damage to the internal components"; (t) on or about 4 August 2017, the power steering and brakes of the vehicle had stopped working and the vehicle went into limp mode; (u) on or about June or July 2018, the engine light and low oil pressure warning came on while MG was driving about a block from his home. MG drove home and arranged for the vehicle to be towed to Maitland Mazda; (v) MG stated, to a dealer service manager at Maitland Mazda that "This has been five years of recurring problems. Keep the car; I don't want it anymore"; and (w) Mazda found that the oil pick up was blocked and the top half of the bearing shell of the vehicle was discoloured and scored.

[113]

Principal findings and reasons of the primary judge 369 The primary judge made the following unchallenged findings with respect to the telephone call between MG and Mr Tristian Reimers on 5 July 2018: 547 The same day, Mr Tristian Reimers of Mazda telephoned MG. Mr Reimers explained that Mazda had become involved at the instigation of the dealer and that Mazda had approved the "engine repairs". MG explained that his "biggest problem" was what he perceived as potential harm to the resale value of the vehicle and also that he had a car that had not been as reliable as he had hoped. 548 The following discussion ensued: MG: Yeah. I mean, I've looked up, like, what - I was at one point where I thought, 'oh god, I should just' - 'I should push you guys to see if you'll replace the vehicle completely'. Because I just got that fed up with it. So, like - when I started looking up, you know, other cases, I thought the best I could ever hope for was Mazda to buy the vehicle back at its current market value, which, you know, would still put me significantly out of pocket. Mr Reimers: Mmm. MG: Which has kind of - you know, kind of left us stuck with the thing. You know, all I really----- Mr Reimers: Well, I'm happy to review----- MG: -----want----- Mr Reimers: -----you know, based on the experience, you know, something around goodwill, or, you know, some compensation as a result of, you know, everything you've told me about the - you know, the history of the vehicle and what Simon's obviously told us about it. I mean, I'm more than happy to have a - you know, a - a discussion with - with management here, and - and loop back to you. You know, with a - with a response to that. I mean - yeah, whether it would involve Mazda doing what you've just outlined in terms of, you know, buying it back, I mean, I - I - I don't know. I'll probably have to set an expectation that that would probably be unlikely. MG: Yeah. The----- Mr Reimers: But - yeah. Yeah----- MG: The thing that annoys me----- Mr Reimers: Yep. MG: -----the most about it is, like, it's a lovely car to drive. Mr Reimers: Mmm. MG: And - when it's - when it's working. And even - even when it's had issues, it's still - it's still - like, it still drives exactly the same. It just, you know - only once it's really had a good shutdown where it's gone - gone into limp-home mode. Mr Reimers: Mmm-hmm. MG: But it's just - it's a really nice car. It's really frustrating that it's had these problems. Mr Reimers: Yeah, yep. MG: You know, the - the----- Mr Reimers: No, it isn't what we want. I mean - yeah, and----- MG: Yeah. I mean, the - the best possible - like - and I know this is really unlikely, but the best possible outcome for me is if you replaced it completely with a new - new model. … And - and I'd be, like, steering well away from another diesel one. Yeah. … That'd - that'd be the - the - yeah, the ideal outcome for me. … If the vehicle got completely replaced with a brand-new one. Yeah. Mr Reimers: Yeah. Look - I mean, I'd - yeah, I'd have to be really honest with that and say, look, that - that would probably - that would probably be unlikely. I mean, unless you're----- MG: I know. Mr Reimers: Yeah. I - I'm----- MG: I - I wouldn't push----- Mr Reimers: I'm not saying that it wouldn't - wouldn't happen. I'm saying that there'd have to be some contribution, you know, I guess in terms of - and like a financial contribution through yourself to - to facilitate something like that, if it was to - to be approved at this end. MG: Yep. Mr Reimers: But, yeah - I mean, I'd - yeah, it certainly wouldn't be a case of Mazda saying, "Yep, let's" - "let's replace the" - "the vehicle and put you in a new one". As - you know, as a---- MG: I just have - got so little faith in the current car. Mr Reimers: Mmm. Yeah. No, I understand that. Yeah. … MG: Yeah, I would like you to go to your management team and - who - you know, whoever approves these kind of things, and let them know. I mean, I think it's - it would have to be pretty rare at your end that, you know, a car would have its engine swapped out - we're beyond the fourth engine now since it was - you know, since it was new. … Mr Reimers: Mmm. But I - I guess in terms of me reviewing it here at this end, I guess in terms of offering a - a buy-back at market value, that's not something that you would be open to? MG: I - I don't want to do it. Because----- Mr Reimers: Yeah. MG: I - I mean, I bought the car to keep it for 10 years. And I've had it----- Mr Reimers: Yeah. MG: -----for five now. I mean, I bought it with extended warranty, I paid extra for that. I bought it with, like, 10 years roadside assist. Mr Reimers: Mmm. MG: You know, I really wanted to get 10 years out of the vehicle. You know, if - if it's worth 18, 20 grand or something as its current market value, if I was to go and spend 20 grand on something, I'd be lucky to get anything as nice as what I'm driving at the moment. Mr Reimers: Yeah, sure. MG: Yeah. Mr Reimers: Yeah. I mean, the other - I mean - I guess when we're talking about goodwill, I mean, there's - there's, you know, servicing; there's, you know, accessory fitments; you know, there's all - I mean, there's that sort of goodwill that we can - we can potentially offer, based on the experience you've had. Would you be open to something along those lines? MG: If - if you guys offered me, like - like, guaranteed me that - I don't know. Extended the warranty on the vehicle till - till it - it was 10 years old, that'd be the kind of thing I'd be interested in as well. 549 MG then said, from Mazda's point of view, it would have been cheaper to replace the vehicle than to undertake three engine replacements. In response, Mr Reimers said that was not how Mazda viewed it and added: And I guess if it's a, you know, confirmed manufacturer issue - and I guess that's what we're dealing with here, through, you know, the vehicle - taking into fact, you know, how many kays you've done, the history of all the previous issues, yeah, I think that's - that's probably how Mazda would generally approach it in terms of, you know, what we need to do to address the - the actual manufacturing problem with the car. … I'm just trying to explain it from a - a Mazda perspective in terms of how they would look to - to resolve an issue with a car, and that would be along the lines of addressing the manufacturing fault through a repair process involving a dealer, mmm. 550 MG then said: "I guess - I'd like you to go with management. So I guess the first thing would be replace the vehicle completely, and then other - those other options you've just mentioned after that". Mr Reimers agreed. 551 MG then said that he had looked at his legal options and "I don't think I'd be very lucky to get away with much more than it being bought back at market value, according to the ACCC, anyway". MG said he would be open to the option of making a contribution depending on what the dollar figures were. 370 The primary judge was satisfied, contrary to Mazda's submissions, that Mazda never gave any, or any proper or genuine, consideration to MG's request for a refund or replacement vehicle including because the record of a Mazda executive panel meeting on 20 July 2018, at which MG's requests were considered, did not make any reference to any issue that might have arisen under the ACL. Rather, the primary judge stated at J [586]: As the ACCC submitted, "[t]here was no evidence in [the] contemporaneous record of any consideration of whether MG was entitled to a replacement vehicle under the ACL. There was no technical input; neither Mr Bradford nor Mr David were at the meeting … Ms Han recalled that the repair time was "fairly short", on the basis that the car was off the road for "two weeks", and it was a bigger and more complicated repair. She recalled that the car was five years old. She did not recall major failure or ACL being discussed". 371 The primary judge then stated at J [588]: I therefore accept the ACCC's submissions in respect of each of these representations, for reasons that I trust are sufficiently clear from my earlier reasons in respect of similar representations concerning other consumers. See eg [215]-[221] in respect of RC above, and [454] in respect of SB and KB.

[117]

Principal findings and reasons of the primary judge 381 The primary judge made the following unchallenged findings at J [557]-[559], J [561]-[566] and J [569] with respect to the telephone calls between MG and Mr Reimers on 25 July 2018 and between MG and Ms Katherine Eason on 7 August 2018; and the letter dated 15 August 2018 and sent on 20 August 2018 (15 August 2018 letter): 557 In a telephone call on 25 July, Mr Reimers offered MG a 50 per cent contribution to the change over costs for a new Mazda 6 wagon petrol vehicle, including accessories and on road costs. 558 Mr Reimers explained that this meant that Mazda would pay half of the change over cost after the trade-in price, so that if a new vehicle cost, say, $42,310, and the trade-in figure was $15,000, then the change over cost would be $27,310, half of which Mazda would pay. 559 Mr Reimers explained that this amount could be used for a different model if that was what MG wanted to do. Mr Reimers said that he did not expect an answer immediately but if MG did want to go ahead then he would draft an official letter with the settlement offer. MG asked to think about it and said the offer was "kind of pretty close to what I was expecting". … 561 On 7 August, Ms Katherine Eason of Mazda telephoned MG. Ms Eason told MG that Mr Reimers had left Mazda and that she was taking over as MG's case manager. She said that she had to learn about what had happened from the beginning and she could see that Mazda had made an offer of a 50 per cent contribution towards "change-over costs". 562 MG said that the offer of 50 per cent contribution to change over costs was Mazda's "initial offer". Ms Eason agreed and noted that MG was looking to upgrade to a CX-9. 563 MG described the issues he had had and why he was leaning towards the petrol rather than the diesel given the problems he had with the diesel, and said: I bought a new car so that I wouldn't have to worry about a car breaking down … … it was pretty obvious really early on that there was something, you know, critically wrong with the car. … And it - it felt like we just - they just kept fixing it under warranty when, like, these discussions we're having now could have easily happened, like, two years ago … Or three years ago. And - and the trade-in - potential trade-in value of my car would have been a lot - lot higher back than … than what it is now. … But like, what I meant - I mean, as - the longer it went on, the less the car was worth, and - and then the more I have to pay to kind of sort myself out now … Whereas - whereas if this had've happened two years ago, after, like, the second engine - which is probably when it should have happened … (Ms Eason then said, "The value would be higher.") 564 MG asked whether Mazda would be prepared to contribute more than 50 per cent or whether it was fixed and Ms Eason said, "Yeah, it looks like it's 50 per cent. … I've been advised of that, and it's in the notes from the review meeting as well that … Mazda Australia are able to offer 50 per cent". 565 MG and Ms Eason discussed the various options and other vehicles that MG was interested in. The following discussion ensued: MG: Yeah. It's quite - it's a bit of a shame you guys - like - I mean, I wouldn't mind the money if your management are willing to be more negotiable on how much they're willing to put in. Ms Eason: Yeah. I mean, what - what would you see as reasonable? As - for Mazda Australia to offer? MG: If you could put me in, like, a GT or in an Atenza with, like - and I'd be putting in, like, 10 grand or less, then I'd be quite happy with that. Ms Eason: Yeah. So you're looking at - I mean, Mazda Australia have offered 50 per cent. Are you - are you requesting maybe 55 to 60 per cent? What's - what - what would you - what would your request be? I mean, I can take it and have it reviewed, [MG], I don't mind doing that at all on your - on your behalf. 566 Ms Eason said she would get quotes on the other models and see if there could be a higher contribution from Mazda. … 569 Mazda confirmed its offer to provide such a vehicle, upon a payment of $17,700 from MG, on 15 August. The offer was open for acceptance until 21 August. MG accepted the offer on 20 August. 382 The reasons of the primary judge referred to above in relation to MG 1, also extended to MG 4, MG 5 and MG 6 as the primary judge's reasons addressed all four representations together.

[120]

TK/MK background facts 386 The primary judge made detailed unchallenged findings at J [595]-[636], largely taken from the agreed facts, of the background to the representations that he found were made by Mazda to TK/MK. 387 The background findings made by the primary judge can be summarised as follows: (a) in or about May 2017, MK purchased a Mazda BT-50 3.2l dual cab utility XTR for approximately $55,500; (b) the dealer was Graeme Powell Mazda, in Seaford, Victoria (Frankston Mazda); (c) on or about 15 August 2017, TK and MK noticed a tapping noise coming from the engine. TK and MK drove the vehicle to the nearest Mazda dealership, Mt Isa Mazda. Mt Isa Mazda advised TK and MK that they could not fix the issue and the vehicle should be taken to Townsville or Rockhampton; (d) on or about 21 August 2017, the Mazda dealer in Rockhampton found metal shavings in the oil filter, oil, and sump from the fuel injector; (e) on 23 August 2017, TK spoke to Mike Silverman, an employee from Mazda's Customer Support Department. Mr Silverman informed TK that a new engine would be ordered and that a loan vehicle was available; (f) on or about September or October 2017, while TK and MK were travelling home from Rockhampton, the steering wheel was shaking; (g) on or about 16 December 2018, the vehicle stalled and lost all power as TK and MK were approaching a roundabout at low speed. The vehicle was still "on" but the motor cut out, it was not possible to accelerate, the power-assisted steering and brakes were not working, and the dashboard lights lit up; (h) on or about 16 December 2018, TK and MK were travelling to work, approaching a roundabout at low speed. The vehicle stalled and lost all power as MK and TK entered the roundabout; (i) on or about 10 February 2019, the vehicle stalled and lost all power while TK was driving; (j) on 21 February 2019, the vehicle stalled while MK was driving; (k) on 22 February 2019, the vehicle stalled as TK and MK were driving to Byron Bay. MK was in the vehicle on a downwards incline and struggled to get the vehicle to stop using the handbrake. On two or three occasions during the drive to Byron Bay, without warning, the electric braking system locked the brakes and a green light illuminated on the dashboard; (l) on or about 25 February 2018, TK contacted Lismore Mazda, which was the closest Mazda dealership in Byron Bay. TK took the vehicle to Lismore Mazda and told them about the problems with the vehicle and the dates that each issue had occurred; (m) on 25 February 2019, TK contacted Georgie Mathew, an employee in Mazda's Customer Support Department, by telephone. TK informed Mazda that the vehicle had stalled when at low speed and turning. Mr Mathew stated that he could arrange a hire vehicle or TK and MK could hire one and Mazda would reimburse them; (n) in or around late February or early March 2019, Lismore Mazda contacted TK and stated that there were no fault codes for the dates and times that TK had provided. Lismore Mazda further stated to TK that they would need to get the vehicle to replicate the fault. In reply to Lismore Mazda, TK stated "you're making me sound like a liar" and agreed to let the Lismore Mazda dealership drive the vehicle to try and replicate the fault; (o) on 6 March 2019, Lismore Mazda contacted TK and informed her that they had driven the vehicle around 600 kms and could not replicate the fault with the vehicle stalling or the issue with the brakes; (p) on 8 March 2019, TK contacted Mazda and spoke with Mr Mathew. Mr Mathew stated to TK that Lismore Mazda "did raise a technical case with us". Mr Mathew further stated to TK that "Mazda Australia has requested some tests on the vehicle and the dealers are supposed to send some photos - and some details on the Polaris of your unit as well". The technical case related to the Polaris unit only; and (q) on 13 March 2019, TK called Mazda and spoke with Catherine Manukia, a Mazda employee. TK stated to Ms Manukia that she did not want to take the vehicle back if it had not been fixed, and that she wanted a new vehicle with all the accessories swapped over.

[122]

Principal findings and reasons of the primary judge 390 The primary judge made the following unchallenged findings with respect to the conversation which took place between TK and Mr Mathew on 15 March 2019: 639 On 15 March, TK spoke with Mr Mathew, who told TK that he was following up with the dealer. TK said "… the service foreman is driving my car … trying to get it to fault, but as I said, there's no guarantee, it may never fault again. I could pick it up tomorrow and it faults as soon as I drive out the driveway. I - I can't pick when it's going to fault as you know in my letter I wrote every time it's done it and what the situation was when it happened. … I don't know why it's not coming up on the computer system when it faults". 640 TK said, "it's just too dangerous for me to even contemplate driving at the moment, because the last time it faulted, when we had the van on the back was so scary in peak hour traffic like. So yeah, and that was my concern. I feel like I had a defective vehicle from the start. You see in the letter … a new motor, these defects. I'm happy with the car 99 per cent of the time. I would buy another car. I just feel that the vehicle that I got is defective". 641 Mr Mathew responded, "It's definitely not defective from the company, because basically if there was a defective piece, it should have shown very bad signs of such stalling a long time back". 642 Mr Mathew then added, "And the dealers are only keeping the vehicle because they want to see if there is this concern or not". 643 TK said: Everyone's telling me they're [sic] got to see if there's a problem. I know there's a problem, it's happened to me five times, so because it's not happening for you, I can't help that, it's happened to me five times. I know there's a problem. So when you and the service advisors at Lismore are telling me, we can't get it to fault, we can't find a fault with it, there is a fault in that car somewhere. There is a fault with that car. So don't - it's not telling me that you can't find it, that's not my concern, I'm not the person who manufactured the car or works on the car, I know what's happened to me five times. … I've given you the times and the dates and the situation of where it occurred, in that letter. … It's happening. It's not - it's not a figment of my imagination, it happens. I have witnesses when it happens. So it happens to that car. There is a fault in that car, it's not a fallacy, it's nothing else, there is a fault in that car. … I just want to make that perfectly clear, because I'm sick of everyone saying to me, we can't get it to fault, we can't - we can't find anything wrong with it. There is something wrong with that car. 644 Mr Mathew said, "The only thing is for Mazda Australia to consider anything … it's really important for the dealership to find a fault, so that I can put all the information to the management and then we can work towards helping you". 645 TK said that she had contacted Consumer Affairs Victoria and, if she had to, she would go to VCAT. 391 The primary judge held, contrary to the submissions advanced by Mazda, that no amount of context could change the meaning of Mr Mathew's statement that the vehicle was "definitely not defective" in response to TK and MK seeking to invoke their rights under the ACL and Mazda had conceded in opening that he had no basis for making that statement: at J [648]-[652].

[127]

Principal findings and reasons of the primary judge 400 The primary judge made the following unchallenged findings with respect to the telephone call between TK and Mr Mathew on 20 May 2019 and the letter sent by Mazda to TK on 22 May 2019 (22 May 2019 letter): 712 On 20 May, Mr Mathew again called TK. Mr Mathew said, "So based on that details the panel has reviewed the issue and everything and they feel we will not go ahead with the replacement of the vehicle at this stage … Since the testing is not complete at this stage and since you wanted me to take the case and advise you an outcome … I had to go with the minimum information". 713 TK responded that she was going to proceed with legal action. 714 Mr Mathew said, "[i]nitially they did find and then after that they could not replicate that in the recording sessions". TK asked, "Are you able to email me their decision? … What it was based on? Everything it was based on. I want every bit of information it was based on and how they come to that decision". Mr Mathew agreed that he would do so. … 718 On 22 May, Mazda wrote to TK relevantly as follows: We understand you have requested we provide you with a replacement vehicle or refund due to your concerns with the performance of this vehicle. Your request has been reviewed by Executive Management who did not believe the circumstances of the case justified a replacement vehicle or a refund. As per our investigations, we believe that there is no manufacturing concern with the vehicle and it is operating as per Mazda manufacturing standards. Nonetheless, due to the intermittent nature of your concern, Traralgon Mazda and the Mazda Australia Technical Division will carry out further inspection and testing of the vehicle before it is returned back to you to ensure no further concerns arise. 401 The primary judge rejected submissions advanced by Mazda to the effect that the statements made by Mr Mathew on 20 May 2019 "simply relayed that the investigations were incomplete" and the Mazda letter of 22 May 2019 was "consistent with that fact" and "was a statement of position based on the limited information then available to Mazda". The primary judge responded to those submissions in the following terms: 724 I do not agree. In particular, I do not agree that Mr Mathew's statement during the phone call that "based on that details the panel has reviewed the issue and everything and they feel we will not go ahead with the replacement of the vehicle at this stage" was "simply relaying that the investigations were incomplete". And even if those words may be so interpreted, the letter of the next day admitted of no such "incompleteness" ("Your request has been reviewed by Executive Management who did not believe the circumstances of the case justified a replacement vehicle or a refund … [the vehicle] is operating as per Mazda manufacturing standards"). 725 I also do not agree that the last paragraph of the 22 May 2019 letter was "a statement of position based on the limited information then available to Mazda", which "communicated an opinion that was reasonable given the uncertainties existing at that time". TK and MK's vehicle, by this time, had had the engine and turbo replaced, experienced the steering wheel shaking, stalled while driving a number of times, and had "locked" the brakes on their connected caravan two or three times. 726 In my view, the ACCC's submissions about representations 3 and 4 must be accepted. Quite apart from anything else, the letter made clear that Mazda had made the decision not to provide a replacement vehicle or a refund because there was no "manufacturing" concern. As I have explained earlier (see [128] above), that is quite wrong. The operation of the statutory guarantee provisions is not limited, in the case of motor vehicles, to "mechanical" defects.

[131]

Principal findings and reasons of the primary judge 411 The primary judge made the following unchallenged findings with respect to the telephone call between TK and Mr Mathew on 23 May 2019 and the letter sent by Mazda to TK on 5 June 2019: 727 On 23 May, TK telephoned Mr Mathew. 728 TK told Mr Mathew that Mazda's letter dated 22 May "wasn't actually exactly what I wanted. I wanted to know the reasons why they've declined to replace the vehicle at this stage. … not the decision itself. I want to know the reasons behind the decision". 729 Mr Mathew replied, "basically the reason now, like I've mentioned, there's not a - they believe it's not a manufacturing concern at this stage". 730 TK said that the vehicle had failed at the dealership, and asked why it was not a manufacturing concern. TK said, "I'm not prepared to take the car back until I know why it's not a manufacturing fault, because as long as I know what the fault is, then I can get it fixed. … So, I need to know what the fault is, if it's not a manufacturing fault". Mr Mathew told TK that he would have to discuss this further with the technical department as he needed further details. … 734 On 5 June, Mazda wrote to TK, informing her that it would not accede to a request for refund or replacement in circumstances where, despite extensive testing, the dealer could not replicate the fault after the aftermarket light bar and reverse camera accessories were disconnected. The letter provided: Your request has been reviewed by Executive Management who did not believe the circumstances of the case justified a replacement vehicle or a refund. As per our investigations, the vehicle has not faulted after the light bar and reverse camera were disconnected. At this point you will have to monitor the vehicle with these accessories disconnected and if there is any concern please let us know. As a gesture of support from Mazda Australia we have covered the cost for the 75,000 Km service on the vehicle. 412 The primary judge again rejected the submission made by Mazda that in both cases that "this was a position based on the information then available" on the same basis as he had rejected the submission made by Mazda in relation to TK/MK 3 and 4.

[134]

LC background facts 418 The primary judge made detailed findings at J [776]-[812], largely taken from the agreed facts, of the background to the representations that he found were made by Mazda to LC. We note that some of the findings were prefaced with the phrase "LC deposes that" but the primary judge did not otherwise comment on the significance of that qualification to his reasoning and nor did the parties to the appeal seek to raise any issue with respect to that qualification. We have therefore proceeded on the basis that findings of background facts prefaced with "LC deposes that" were found by the primary judge to have occurred and are not challenged on the appeal. 419 The background findings made by the primary judge can be summarised as follows: (a) in August 2015, LC purchased a Mazda CX-3 Akari for $38,508; (b) the dealer was Grand Prix Sales, Aspley, Brisbane, Queensland (Aspley Mazda); (c) from around October 2015, LC's vehicle began "jerking" while she was driving. This issue occurred infrequently over the course of around three or four weeks. Around a month after this incident, the jerking became more frequent and more intense. The issue was still intermittent, but sometimes the jerking happened multiple times a day, and on multiple days a week; (d) from around October 2015, the vehicle began losing power. This issue happened intermittently and sometimes occurred multiple times a day, and multiple days a week; (e) on or about late 2015 and early 2016, LC took the vehicle to Aspley Mazda two or three times. Aspley Mazda informed LC that they could not find anything wrong with the vehicle; (f) on or about January 2016, LC took the vehicle to Aspley Mazda. The vehicle remained at Aspley Mazda for around two weeks and the transmission was replaced; (g) on 15 January 2016, Mazda opened a Maestro case in respect of LC's vehicle. The case name was "Heads-up Possible Major Failure. Transmission failure. PAR approved"; (h) on 19 January 2016, LC lodged a request for a loan vehicle, which was approved by Mazda on the same day; (i) on 25 January 2016, LC telephoned Jarrod Whitehead, a Mazda employee. The ACCC alleged that LC requested a replacement vehicle. LC stated to Mr Whitehead that "I just don't want any issues…so that's why I buy new cars, is that I don't have to worry about it breaking down for the next, you know, five years". Mazda did not agree to the request; (j) on or about February 2017, LC experienced a loss of power while driving. The issue was intermittent and became progressively worse; (k) on or about April 2017, LC experienced intermittent loss of power in the vehicle and the problem became progressively worse. On some occasions, LC was able to accelerate again. However, on other occasions, LC had to pull over, stop the vehicle, and restart it. The vehicle jerked, coughed, or spluttered when LC was driving uphill and the vehicle did not respond when LC put her foot on the accelerator; (l) on at least one occasion, the vehicle lost power while she was driving on the highway. LC was able to continue driving the vehicle when she turned off the vehicle and restarted it; (m) on most occasions, Aspley Mazda advised LC to bring in the vehicle whenever she faced issues. Most times a mechanic inspected the vehicle and stated to LC that they could not find anything wrong with the vehicle; (n) between April 2017 and June 2017 the issue of the vehicle losing power continued to occur daily; (o) in or around June 2017, LC took the vehicle to Aspley Mazda again. About a week later, Jamie, an employee of Aspley Mazda, told LC that the vehicle required an engine replacement. LC deposes that Jamie referred to the issue as "the second major fail" and told her that she needed to do something about it. Jamie directed LC to call Mazda and take the issue up with them; (p) on 27 June 2017, Mazda opened a Maestro record of the issues experienced by LC. The Maestro record was titled "Dealer have found the Engine is allowing Carbon build up and TSD [Technical Service Department] have instructed to replace Partial Engine with new modified engine. Customer doesn't want the car back!"; (q) on 3 July 2017, Mazda instructed Aspley Mazda to replace the engine following "prelim advice from Mazda Japan in relation to this concern relating to carbon build up through these engines"; (r) on 5 July 2017, LC contacted Bradley Miller, an employee of Mazda, by telephone. Mazda's Maestro record includes a note of the call entered by Mr Miller which states that LC made it clear to him that "she does not want this car back and fully expects that under ACL the product is replaced"; (s) on 5 July 2017, Mr Miller sent an email to LC. The email acknowledged that LC had requested that her CX-3 be replaced with a new vehicle due to the auto transmission replacement in January 2016. The email further noted that a partial engine replacement for the vehicle was required. The email from Mr Miller to LC stated "[t]his matter will be further reviewed with Senior Management and at such time we will be in contact with you to discuss matters further"; and (t) on 12 July 2017, Aspley Mazda informed Mazda that "the customer is refusing to pick up the vehicle as she wants it replaced".

[136]

Principal findings and reasons of the primary judge 422 The primary judge made the following unchallenged findings with respect to the telephone call between LC and Mr Marshall on 12 July 2017: 813 LC spoke with Mr Marshall on the telephone on the same day. He told LC that "I've presented it [LC's case] to our legal team this morning … and at this stage they're not entertaining the idea of a buy back", but that he had looked into "some compensation for you, obviously there's some issues that you've had". Mr Marshall said he wanted to get LC's feeling on what she would like to do. 814 LC told him she was not happy with the outcome and that "[t]here are two fails or like two major things have gone wrong". LC asked why, after two major fails, her request for a replacement had been rejected, and asked what the decision was based on "and before you even answer that, is it something that ever gets done, so does anyone ever get a buy back?" 815 The conversation continued: Mr Marshall: It does happen but it is very rare. LC: Yeah. Mr Marshall: But it's normally brand new vehicles, if that makes sense. Like I understand your car's only a couple of years old, but normally it's----- LC: Yeah, it sort of had its first fail though that like the - the transmission failed totally. Mr Marshall: Yeah, I know that was only - that was four months out of you buying it, I've seen that. LC: Exactly. 816 Mr Marshall then conveyed an offer of an extended warranty and two free services. The conversation continued: LC: Okay. Which doesn't solve the problem of me getting in it and driving for 1000 kilometres and trusting that it's not going to have another issue. And I know that you can't - no-one can assure me of that, that's one of those - yeah, open ended things. Mr Marshall: Yeah, unfortunately it's one of those sort of crystal ball situations where at the moment the dealer - you know, they believe the vehicle is fixed. They've road-tested it several times. 817 LC said she would have a think about it, to which Mr Marshall said, "yeah, absolutely" and that he would put the offer in writing. 818 LC then asked, "is it worthwhile me pursuing this, Stuart…?" Mr Marshall responded, "To be honest, I wouldn't want you to waste your time, reading between the lines. Yeah, just because some of these things I have seen where people have pushed them before haven't been a great outcome … in regards to personal costs and you know court time and all the other things that go with it". 423 The primary judge was satisfied that the statements made by Mr Marshall to LC, construed in context, were sufficient to convey LC 6 and 7 and Mr Marshall could not have had a reasonable basis for saying that anyone at Mazda ever gave LC's request for a replacement vehicle any apparent consideration which he considered was "surely warranted in circumstances where the transmission failed after four months and Mazda had noted it as an "ACL" failure: at J [823].

[140]

Principal findings and reasons of the primary judge 431 The primary judge made the following unchallenged findings with respect to the telephone call between LC and Mr Marshall on 17 July 2017: 826 On 17 July, Mr Marshall telephoned LC in response to her email of the previous day. He told her that she would be able to get the service records from the dealers and that Mazda did not have them. He also said that if LC were to commence proceedings it would not prejudice her position and the conversation they were having at the moment would continue. 827 Mr Marshall added: "The only other thing I wanted to float past you was … obviously you've asked us to replace the vehicle and at this stage we're not able to do that at the moment, but I did have a meeting with my senior representatives just before … we've sort of come up with, if you were looking to replace the vehicle … We may be able to assist you in that somehow, in regards to the changeover costs of a replacement vehicle". 828 LC said that she did not want to pay anything in terms of change over. Mr Marshall then asked LC to return the loan vehicle and collect her car. She did so the next day, when she also collected the service report she had requested. 829 LC then emailed Mr Marshall, pointing out that the service report made no mention of the fault with the car that had instigated the replacement of the engine. She asked for Mazda to send the faults found by return email. 830 Mr Marshall responded: In response to your return email, the concern with your engine was a misfire or hesitation, which was due to the valves not closing correctly under specific driving conditions (higher load / rpm). This allowed carbon to build up or to be trapped on valve seats. A decision was made to replace the engine avoiding the need to remove and repair the cylinder head, as this is the easiest and most efficient way of getting your vehicle back on the road and reducing any further delays with the repair. 432 The primary judge rejected Mazda's submission that Mr Marshall's statements were about "Mazda's positon not a statement about rights" for the reasons that he gave in respect of RC 6 and RC 7: J [833]-[834].

[148]

Principal findings and reasons of the primary judge 445 The primary judge made the following unchallenged findings with respect to the telephone call between LC and Mr Marshall on 3 August 2017 and the conversation that took place between LC and Mr Marshall on 8 August 2017: 836 On 3 August, LC and Mr Marshall had another telephone conversation. 837 LC confirmed that she wanted a buy back "or something similar" and asked Mr Marshall for an update on that. Mr Marshall said, "Look as I said to you last time, they're not looking to buy back at this stage, but I could put that towards the legal team again. … And just see what they come back with. … And then go from there, if you like, or yeah, as I said, you're more than willing - more than entitled to, you know, pursue whatever legal action or whatever you think's necessary". 838 LC said she had spoken to a solicitor and "obviously it's not cheap". She also said that she had had "a bit of a chat to Fair Trade" and "all these guarantees and things and I don't feel that it's lived up to any of those". 839 LC said, "I know you guys don't want to call it a major fail, however anyone that I say that you've replaced the engine, replaced the transmission, certainly considers that a major failure". 840 Mr Marshall confirmed that he would put it to "them" again and see what he could come up with, but advised he did not believe Mazda would "look into buying the vehicle back". … 842 The same day, Mr Marshall told LC that Mazda's position had not changed, that "legal" was still not prepared to replace or refund the vehicle, and again offered compensation. LC told Mr Marshall that she had no confidence in the car, that it was not running properly, and that it had not lived up to the original specification. LC said she would pursue legal redress. Mr Marshall said, "So where you want to take it from here is totally up to you … it's totally your decision". LC said she would pursue it from her end. 446 The primary judge did not agree, for the reasons that he gave in respect of LC 6 and 7, with Mazda's submission that Mr Marshall's statements were "merely a statement of Mazda's position": at J [845]-[846].

[151]

EG background facts 452 The primary judge made detailed findings at J [856]-[917], largely taken from the agreed facts, of the background to the representations that he found were made by Mazda to EG. We note that some of the findings were prefaced with the phrase "EG deposes that" but the primary judge did not otherwise comment on the significance of that qualification to his reasoning and nor did the parties to the appeal seek to raise any issue with respect to that qualification. We have therefore proceeded on the basis that findings of background facts prefaced with "EG deposes that" were found by the primary judge to have occurred and are not challenged on the appeal. 453 The background factual findings made by the primary judge can be summarised as follows: (a) on 13 December 2014, EG purchased a Mazda 2 Neo for $17,350; (b) the dealer was West End Mazda, Blacktown, NSW (West End Mazda); (c) within the first few weeks of purchase EG experienced a rough idle a few times a week, and there was no pattern to when it would occur. EG felt a little shake in the vehicle when sitting at traffic lights and heard a little flutter in the engine; (d) EG took the vehicle to West End Mazda for scheduled services. The invoice from West End Mazda dated 14 December 2015 records that the vehicle was tested for a "clicking noise" reported by EG but that the person who carried out the test "could not hear any abnormal noises". On 23 March 2018, the rough idle issue was recorded in the records of West End Mazda; (e) in or about October 2017 to March 2018, warning lights intermittently illuminated on the dashboard when she was driving. This issue occurred every three to four weeks, and the lights usually stayed on for around a week before turning off. On each occasion that EG contacted West End Mazda to resolve the issue, she was told that if the engine felt normal then the vehicle could still be driven. EG booked the vehicle in for the first available appointment at West End Mazda. However, the lights of the vehicle turned off before the appointment and West End Mazda told EG that they would not be able to run diagnostics if the lights had turned off; (f) in or about late February 2018, EG started her vehicle in her driveway and it had no acceleration. The dashboard lights illuminated. The vehicle would only go at around 5km/hr when EG put the vehicle in first gear and drove. EG drove a short distance and the vehicle kicked into gear and started driving normally. EG contacted West End Mazda and booked in a service for 23 March 2018; (g) between February and March 2018, the issue with the acceleration and dashboard lights continued to occur intermittently; (h) on 2 July 2018, EG took the vehicle to West End Mazda for repairs; (i) on 5 July 2018, West End Mazda informed EG that the fourth cylinder was misfiring constantly, the third cylinder was misfiring intermittently, and that the vehicle would have to stay at the dealership until it was fixed; (j) on 11 July 2018, Mazda opened a Maestro case in respect of EG's vehicle and informed West End Mazda that "Idle Harshness" was a "known concern". Mazda further notified EG that the issue was "currently under investigation" and awaiting an outcome; (k) on or about early September 2018, EG had not been told about what the issue was with her vehicle. By this time, the vehicle had been with West End Mazda since 2 July 2018. EG contacted Mazda and was told someone would call her back; (l) on 17 September 2018, EG sent a letter to West End Mazda which stated that "the vehicle sold to me is not of satisfactory quality or fit for purpose" and "I request that you either fit a new engine to my existing vehicle or offer a replacement vehicle"; (m) on 29 October 2018, Mazda instructed West End Mazda to carry out the engine replacement; (n) on 5 November 2018, EG informed Mazda by telephone that she refused the engine replacement and would like a new vehicle; (o) on 14 November 2018, Ainul Faruquee, a Mazda employee, informed EG that her vehicle was ready to be picked up and that Mazda's decision as to a replacement vehicle had not yet been made; and (p) on 16 November 2018, Mazda's Executive Panel reviewed EG's request for a replacement vehicle and determined that a replacement vehicle would not be offered.

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Overview 470 In summary, the ACCC contends that, in finding that the conduct of Mazda with respect to the Consumers was not unconscionable, the primary judge failed to (a) use the a correct judicial technique to assess whether the conduct was unconscionable, (b) take relevant findings that he had made on the misrepresentation case into account, (c) give sufficient weight to relevant findings that he had made, and (d) provide adequate reasons for his conclusions that Mazda's conduct was not unconscionable. 471 Given the breadth and complexity of the overlapping representation and unconscionable conduct claims advanced by the ACCC and the understandable need to avoid unnecessary duplication, the primary judge was faced with an unenviable task of seeking to explain how his evaluative judgments led to a rejection of all of the ACCC's unconscionable conduct cases. We have reluctantly, given the diligence and care with which the primary judge answered each of the claims advanced by the ACCC, nevertheless concluded that the primary judge ultimately did not provide sufficient reasons to explain why he rejected the unconscionable conduct claims advanced by the ACCC. 472 That conclusion has meant it is necessary to review the alleged conduct again on the appeal. We have concluded for the reasons that follow that the conduct relied upon by the ACCC before the primary judge did not diverge sufficiently far from community standards of acceptable business practices that it objectively fell within the description of unconscionable conduct within the meaning of s 21 of the ACL. 473 It is convenient first to address Ground 6 of the ACCC notice of appeal and explain why we have come to the view that the primary judge did not provide sufficient reasons for rejecting the unconscionable conduct cases advanced by the ACCC. 474 We then explain in the course of addressing Grounds 1, 4 and 5 why we have independently concluded that the conduct relied upon by the ACCC fell short of conduct that would contravene s 21 of the ACL. 475 Finally, we address the contentions in Grounds 2 and 3 that the primary judge failed to have regard, or sufficient regard, to the matters specified in those grounds.

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Statutory Provisions and Principles 476 The relevant provisions of the ACL addressing unconscionable conduct are s 21 and s 22. 477 At the time of the relevant conduct, s 21 of the ACL provided: 21 Unconscionable conduct in connection with goods or services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. (2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct: (a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or (b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition. (3) For the purpose of determining whether a person has contravened subsection (1): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section. (4) It is the intention of the Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and (c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of: (i) the terms of the contract; and (ii) the manner in which and the extent to which the contract is carried out; and is not limited to consideration of the circumstances relating to formation of the contract. 478 Section 22 of the ACL provides some guidance to the proper application of s 21 of the ACL by identifying non-exhaustive factors that may be taken into account in assessing whether the impugned conduct was unconscionable within the meaning of s 21 of the ACL. Section 22 of the ACL provides: 22 Matters the court may have regard to for the purposes of section 21 (1) Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to: (a) the relative strengths of the bargaining positions of the supplier and the customer; and (b) whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and (c) whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and (e) the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and (f) the extent to which the supplier's conduct towards the customer was consistent with the supplier's conduct in similar transactions between the supplier and other like customers; and (g) the requirements of any applicable industry code; and (h) the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and (i) the extent to which the supplier unreasonably failed to disclose to the customer: (i) any intended conduct of the supplier that might affect the interests of the customer; and (ii) any risks to the customer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and (j) if there is a contract between the supplier and the customer for the supply of the goods or services: (i) the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and (ii) the terms and conditions of the contract; and (iii) the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and (iv) any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and (k) without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and (l) the extent to which the supplier and the customer acted in good faith. 479 As recently stated by Allsop CJ in Good Living Company Pty Ltd and Another v Kingsmede Pty Ltd (2021) 284 FCR 424; [2021] FCAFC 33 at [3], the principles underpinning the application of statutory unconscionability, including under s 21 of the ACL, have been consistently stated by the Full Court of this Court in at least seven judgments: Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132; [2005] FCAFC 226; Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90; Paciocco v Australian and New Zealand Banking Group Ltd (2015) 236 FCR 199; [2015] FCAFC 50; Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421; [2016] FCAFC 186; Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd (2017) 251 FCR 404; [2017] FCAFC 75; Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631; [2018] FCAFC 155; Australian Competition and Consumer Commission v Medibank Private Ltd (2018) 267 FCR 544; [2018] FCAFC 235. 480 In Lux, Allsop CJ, Jacobson and Gordon JJ stated at [5] that statutory provisions directed at proscribing unconscionability reinforce societal values and expectations and cannot be considered in isolation. Their Honours described the task to be undertaken by the Court in approaching questions of unconscionability at [23]: The task of the Court is the evaluation of the facts by reference to a normative standard of conscience. That normative standard is permeated with accepted and acceptable community values. In some contexts, such values are contestable. Here, however, they can be seen to be honesty and fairness in the dealing with consumers. The content of those values is not solely governed by the legislature, but the legislature may illuminate, elaborate and develop those norms and values by the act of legislating, and thus standard setting. The existence of State legislation directed to elements of fairness is a fact to be taken into account. It assists the Court in appreciating some aspects of the publicly recognised content of fairness, without in any way constricting it. Values, norms and community expectations can develop and change over time. Customary morality develops "silently and unconsciously from one age to another", shaping law and legal values: Cardozo, The Nature of the Judicial Process (Newhaven, Yale University Press, 1921) pp 104-105. These laws of the States and the operative provisions of the ACL reinforce the recognised societal values and expectations that consumers will be dealt with honestly, fairly and without deception or unfair pressure. These considerations are central to the evaluation of the facts by reference to the operative norm of required conscionable conduct. 481 In Lux, the Full Court found that each allegation of unconscionable conduct shared the following common features: a script was provided by Lux to its sales staff who would make a telephone call to a consumer that was, "at best, a half truth" as it was plainly designed to obtain access to their home by the offer of a "free maintenance check", the script dealt with various alternative courses in the event a consumer responded negatively and the person sent to conduct the "free maintenance check" was, in fact, a sales agent who would attend each home to sell a new vacuum cleaner: at [25]-[26]. The Full Court concluded that an opportunity to sell a product through extended demonstration in a consumer's home that was obtained by deception, in contravention of State law designed to limit the time that particular selling techniques could be practiced, was unconscionable: at [43], [52] and [60]. 482 In Paciocco, Allsop CJ further explained the correct judicial technique to be applied when evaluating whether particular conduct is unconscionable in the following passages: 296 The working through of what a modern Australian commercial, business or trade conscience contains and requires, in both consumer and business contexts, will take its inspiration and formative direction from the nation's legal heritage in Equity and the common law, and from modern social and commercial legal values identified by Australian Parliaments and courts. The evaluation of conduct will be made by the judicial technique referred to in Jenyns. It does not involve personal intuitive assertion. It is an evaluation which must be reasoned and enunciated by reference to the values and norms recognised by the text, structure and context of the legislation, and made against an assessment of all connected circumstances. The evaluation includes a recognition of the deep and abiding requirement of honesty in behaviour; a rejection of trickery or sharp practice; fairness when dealing with consumers; the central importance of the faithful performance of bargains and promises freely made; the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage; a recognition that inequality of bargaining power can (but not always) be used in a way that is contrary to fair dealing or conscience; the importance of a reasonable degree of certainty in commercial transactions; the reversibility of enrichments unjustly received; the importance of behaviour in a business and consumer context that exhibits good faith and fair dealing; and the conduct of an equitable and certain judicial system that is not a harbour for idiosyncratic or personal moral judgment and exercise of power and discretion based thereon. 297 The variety of considerations that may affect the assessment of unconscionability only reflects the variety and richness of commercial life. It should be emphasised, however, that faithfulness or fidelity to a bargain freely and fairly made should be seen as a central aspect of legal policy and commercial law. It binds commerce; it engenders trust; it is a core element of decency in commerce; and it gives life and content to the other considerations that attend the qualifications to it that focus on whether the bargain was free or fair in its making or enforcement. … 299 These considerations may involve behaviour that is best evaluated relationally in a transaction; they may involve conduct that can be evaluated against normative or ethical standards, apart from any particular transaction: see, for instance, National Exchange. … 304 In any given case, the conclusion as to what is, or is not, against conscience may be contestable. That is inevitable given that the standard is based on a broad expression of values and norms. Thus, any agonised search for definition, for distilled epitomes or for shorthands of broad social norms and general principles will lead to disappointment, to a sense of futility, and to the likelihood of error. The evaluation is not a process of deductive reasoning predicated upon the presence or absence of fixed elements or fixed rules. It is an evaluation of business behaviour (conduct in trade or commerce) as to whether it warrants the characterisation of unconscionable, in the light of the values and norms recognised by the statute. 305 The task is not limited to finding "moral obloquy"; such may only divert the normative inquiry from that required by the statute, to another, not tied to the words of the statute. The clearest example of the lack of need for dishonesty, at least in equity in unconscionable conduct (in the unwritten law), is the lack of criticism of the bank manager in Amadio by Deane J: at CLR 478; ALR 426 . See also Johnson v Smith [2010] NSWCA 306 at [5] and Aboody v Ryan (2012) 17 BPR 32,359 ; [2012] NSWCA 395 at [65] . Such is not to deny that, in many cases of unconscionable conduct in equity, a degree of moral criticism may attend the evaluation that the relevant conduct was unconscionable. 306 As Deane J said in Muschinski at CLR 616; ALR 452 ; Fam LR 950 , property rights (and the same can be said of jural relations in trade or commerce) should be governed by law, and not some mix of judicial discretion or the subjective views as to who should win based on the formless void of individual moral opinion. Nothing in Subdiv C and ss 12CB and 12CC or the other statutes with which this case is concerned should be seen as requiring this. The notions of conscience, justice and fairness are based on enunciated and organised norms and values, including the organised principles of law and equity, taken from the legal context of the statutes in question and the words of the statutes themselves. Employing judicial technique involving a close examination of the complete attendant facts and rational justification, the Court must assess and characterise the conduct of an impugned party in trade or commerce against the standard of business conscience, reflecting the values and norms recognised by Parliament to which I have referred. 483 The reference by Allsop CJ to Jenyns refers to the statement by Dixon CJ, McTiernan and Kitto JJ in Jenyns v Public Curator of Queensland (1953) 90 CLR 113; [1953] HCA 2 at 119 which endorses Lord Stowell's description in The Juliana (1822) 2 Dods 504 at 522; 165 ER 1560 at 1567: A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case. (Emphasis added.) 484 It is to be noted that although Paciocco was appealed to the High Court, there is nothing in Keane J's reasons in Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525; [2016] HCA 28 (French CJ agreeing at [2] and Kiefel J agreeing at [70]) to suggest that the evaluative approach articulated by Allsop CJ was not accepted. This evaluative approach was subsequently reiterated by Allsop CJ in Kojic at [54]-[59] (Besanko J agreeing at [69] and Edelman J agreeing at [85]) and by a Full Court of this Court in Four Oaks at [54] (Rares, Murphy and Davies JJ) and in Medibank at [342] (Beach J, Perram J agreeing at [102] and Murphy J agreeing at [103]). 485 In Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18 at [14], Kiefel CJ and Bell J also cited Paciocco with approval by reference to the values that underpin the application of s 12CB(1) of the Australian Securities and Investments Commission Act 2001 (Cth): 14 The term "unconscionable" is not defined in the ASIC Act and is to be understood as bearing its ordinary meaning. The proscription in s 12CB(1) is of conduct in connection with the supply of financial services that objectively answers the description of being against conscience. The values that inform the standard of conscience fixed by s 12CB(1) include those identified by Allsop CJ in Paciocco v Australia and New Zealand Banking Group Ltd: certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and: "the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage." (Footnote omitted.) 486 In Unique, Allsop CJ, Middleton and Mortimer JJ stated at [155] that an allegation of unconscionability is a serious allegation, sufficient to warrant censure for the purpose of deterrence by the imposition of a civil penalty: To behave unconscionably should be seen, as part of its essential conception, as serious, often involving dishonesty, predation, exploitation, sharp practice, unfairness of a significant order, a lack of good faith, or the exercise of economic power in a way worthy of criticism. None of these terms is definitional. The Shorter Oxford Dictionary on Historical Principles (1973) gives various definitions including "having no conscience, irreconcilable with what is right or reasonable". The Macquarie Dictionary (1985) gives the definition "unreasonably excessive; not in accordance with what is just or reasonable". (The search for an easy aphorism to substitute for the words chosen by Parliament (unconscionable conduct) should not, however, be encouraged …) These are descriptions and expressions of the kinds of behaviour that, viewed in all the circumstances, may lead to an articulated evaluation (and criticism) of unconscionability. It is a serious conclusion to be drawn about the conduct of a businessperson or enterprise. It is a conclusion that does the subject of the evaluation no credit. This is because he, she or it has, in a human sense, acted against conscience. The level of seriousness and the gravity of the matters alleged will depend on the circumstances. Courts are generally aware of the character of a finding of unconscionable conduct and take that into account in determining whether an applicant has discharged its civil burden of proof. 487 Finally, it is to be noted that whilst exploitation of "some form of pre-existing disability, vulnerability or disadvantage" is often a feature of unconscionable conduct, it is not a necessary feature for the impugned conduct to fall within the meaning of s 21 of the ACL: Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40 at [78] (Allsop CJ, Besanko and McKerracher JJ). 488 All of these authorities emphasise that the task is an evaluative one. The conclusions reached may be "contestable" in the sense that reasonable judicial minds may differ, as Allsop CJ observed in Paciocco at [304].

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Overview of the approach and reasons of the primary judge 489 It is convenient to commence with a broad overview of the approach and reasons of the primary judge with respect to the unconscionable conduct claim. We analyse in more detail the approach and reasons of the primary judge in our consideration of the specific grounds of appeal advanced by the ACCC. 490 The primary judge summarised the unconscionable conduct case at J [9]. He observed it was not a "system" or a "pattern" case. Rather, he stated, it was a case directed at Mazda's conduct towards the nine Consumers in the light of the institutional practices of Mazda, including "internal compliance documentation, process and culture." 491 The primary judge identified the relevant statutory provisions and principles for the unconscionability claim at J [89]-[96] in terms that are not disputed by the ACCC. His Honour then explained at J [131]-[133] how he had structured his reasons. 492 At J [134]-[135] the primary judge stated his conclusions on the unconscionable conduct cases advanced by the ACCC in the following terms: 134 For reasons that I explain below in the context of each of the separate cases the subject of this proceeding, I have formed the view that Mazda's conduct was not unconscionable as alleged. The ACCC's submissions regarding unconscionable conduct, like Mazda's response, turn on how properly to characterise the detail of conduct and communications between Mazda and each consumer. 135 I have formed the view that although Mazda's conduct can accurately be characterised as constituting what I describe as appalling customer service, and although customers were rightly frustrated at Mazda's delays and excuses for not squarely addressing their complaints and their requests for a refund or replacement vehicle, Mazda's conduct was not, in my view, to be characterised as unconscionable (as I say, for reasons that I explain below). 493 The primary judge then stated that despite his conclusion that Mazda's conduct was not unconscionable, there were a number of submissions made by Mazda that he did not accept: at J [136]. The primary judge addressed each of these submissions at J [137]-[145] and his observations included (a) a lengthy recital of the facts to show that in each instance of alleged unconscionability, the Consumers had suffered harm, (b) that Mazda's submission that its conduct was not unconscionable because it provided support and assistance to the Consumers did not address the ACCC's case that in each instance, the support was insufficient, (c) that he rejected Mazda's assertion that the round table and executive panel processes were genuine attempts to consider and apply the consumer guarantee provisions of the ACL to the circumstances of each Consumer but such conduct was more appropriately characterised as very bad management, (d) that Mazda made no sufficient attempt to seek technical advice about the particular issues experienced by the Consumers, and (e) that he did not have regard to Mazda's submission, with which the ACCC disagreed, that any opinions conveyed by the Representations in each case were reasonably held, as he was not taken to any authority on the point. 494 The primary judge then made some general observations about the unconscionable conduct case advanced by the ACCC at J [146]-[149]. These general observations included that (a) the existence of a disparity in bargaining power does not establish that a party which has superior bargaining power acts unconscionably by exercising it, (b) there was no allegation that Mazda had acted in bad faith or dishonesty, and (c) the ACCC had eschewed any case based on a pattern or system of conduct. 495 The primary judge then addressed in turn each of what he described as the seven individual cases and the evidence in respect of them from J [150]-[956] over some 163 pages. Broadly speaking, the approach that the primary judge took to each case was to (a) briefly introduce the relevant Consumer or Consumers, if the car was jointly owned, (b) for each representation alleged by the ACCC to have been made to that Consumer or Consumers, identify the relevant facts, summarise the parties submissions and then by reference to the evidence, state whether he accepted that the representation was made and whether it was false or misleading, (c) where relevant, make additional factual findings that he considered were necessary to understand the unconscionable conduct cases, and (d) summarise the parties' submissions and then state whether he considered in all the circumstances and as a whole, Mazda's conduct sufficiently diverged from community standards of acceptable business standards that it objectively answered the description of unconscionable conduct within the meaning of s 21 of the ACL. 496 For each of the seven individual cases advanced by the ACCC, the primary judge was not persuaded that the conduct of Mazda was unconscionable within the meaning of s 21 of the ACL.

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Principles 498 It is well established that a trial judge is under an obligation to give reasons for their decision: Carlisle Homes Pty Ltd v Barrett Property Group Pty Ltd [2009] FCAFC 31 at [40] (Tamberlin, Sundberg and Besanko JJ) citing Pettitt v Dunkley [1971] 1 NSWLR 376 at 388 (Moffitt JA); Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279 (McHugh JA, as his Honour then was). 499 The adequacy of reasons will depend on the circumstances of the case and the nature of the proceedings: Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at 18 (Gray J, Fullagar and Tadgell JJ agreeing at 20); Beale v Government Insurance office of New South Wales (1997) 48 NSWLR 430 at 443 (Meagher JA); DL v The Queen (2018) 266 CLR 1; [2018] HCA 26 at [32] (Kiefel CJ, Keane and Edelman JJ); Kaur v Minister for Immigration and Border Protection (2019) 269 FCR 464; [2019] FCAFC 53 at [177] (Murphy, Mortimer and O'Callaghan JJ). However, the court's reasons "as a minimum…[must] be adequate for the exercise of a facility of appeal": Soulemezis at 260 (Kirby P), 268-269 (Mahoney JA); Beale at 444 (Meagher JA); see also TechnologyOne Limited v Roohizadegan [2021] FCAFC 137 (Rangiah, White and O'Callaghan JJ). 500 In Hunter v Transport Accident Commission [2005] VSCA 1, Nettle JA (as his Honour then was) stated at [21]: Above all the judge should bear steadily in mind that reasons are not intelligible if they leave the reader to wonder which of a number of possible routes has been taken to the conclusion expressed. Failure to expose the path of reasoning is an error of law 501 In DL v The Queen, Kiefel CJ, Keane and Edelman JJ stated at [33]: Not every failure to resolve a dispute will render reasons for decision inadequate to justify a verdict. At one extreme, reasons for decision will not be inadequate merely because they fail to address an irrelevant dispute or one which is peripheral to the real issues. Nor will they be inadequate merely because they fail to undertake "a minute explanation of every step in the reasoning process that leads to the judge's conclusion" (Citations omitted.) 502 In Kaur, Murphy, Mortimer and O'Callaghan JJ set out a number of general propositions which emerge from the authorities on the obligation of courts to give adequate reasons at [177] including that: … (a) The more serious the consequences of a proceeding, or the more serious a finding, the more a judge may need to explain why she or he reached a conclusion or finding; … (c) If a judge disbelieves evidence which is uncontradicted, reasonable and inherently probable, he or she may be required to give more detailed reasons for disbelieving that evidence. 503 In Sun Alliance, Gray J found that the trial judge's reasons were inadequate because the appeal court was unable to ascertain the trial judge's reasoning process to enable a judgment as to whether he had fallen into error. As a consequence of the trial judge's inadequate reasons, Gray J also found that justice was not seen to be done and in this regard, stated at 18: The defendant, having led a weighty body of incriminating evidence was entitled to have the evidence weighed by the Court and, if rejected, the grounds of its rejection expressed in reasoned terms. To have a strong body of evidence put aside without explanation is likely to give rise to a feeling of injustice in the mind of the most reasonable litigant. 504 Similarly, in Singh v Minister for Immigration and Border Protection [2019] FCA 781, Davies J found that the primary judge's reasons were inadequate as the primary judge did not deal with the evidence and did not provide an intelligible explanation which exposed why the evidence supported the conclusion reached: at [13].

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Consideration 507 The consideration paragraphs of the primary judge's reasons for each of the individual unconscionable conduct cases might fairly be characterised as economical, including the RC case that was not the subject of Ground 6. 508 The approach that the primary judge followed in addressing each of the unconscionable conduct claims, after summarising in uncontentious terms the relevant principles at J [89]-[96] and making some overarching comments on the unconscionable conduct cases advanced by the ACCC at J [134]-[148], can be summarised as follows: (a) making comprehensive factual findings, principally taken from the agreed facts, in the course of considering the misrepresentation cases that provided the context and the circumstances relevant to each of the unconscionable conduct cases, none of which were challenged by the ACCC; (b) summarising the submissions made by the ACCC and in most cases, also by Mazda; (c) stating that, other than the ACCC submissions that Mazda was not taking the safety concerns of the Consumers seriously and one submission by the ACCC that Mazda did not give a Consumer sufficient time to respond to an offer, "much of the ACCC's submissions can be accepted" or "the rest of the ACCC's propositions concerning [a particular Consumer] can be accepted"; and (d) concluding that the conduct of Mazda constituted appalling customer service but was not unconscionable conduct. 509 The primary judge provided the following summary at J [11] of the factual matters in dispute in both the misrepresentation and unconscionability cases: There were four main areas in respect of both the misrepresentation and unconscionability cases where the characterisation of the facts (and thus the outcome of the case) was disputed, namely whether or not: (1) Mazda gave any proper or genuine consideration to whether the individual consumers were entitled to a refund or replacement car; (2) Mazda made the representations alleged; (3) to the extent that representations were in the nature of opinions, there was a reasonable basis for making them; and (4) taken as a whole, and in all the circumstances, Mazda's conduct was unconscionable. 510 The primary judge stated at J [132] that in order to explain "how the representations and alleged unconscionable conduct is said to arise" he had set out the relevant background facts that the ACCC relied upon as giving rise to each representation and then considered whether each representation was false or misleading in the manner that the ACCC had alleged. 511 The primary judge explained at J [133]: Having considered each representation in turn, and in the course of doing so, having described all the facts relevant to the consumer, I then consider the ACCC's case on unconscionable conduct in respect of that consumer. As will become apparent, there is a considerable, but necessary, degree of repetition. 512 The paragraphs in the primary judge's reasons for each of the individual unconscionable conduct cases have to be read and understood in the context of the general unconscionable conduct paragraphs at J [133]-[149]. 513 The approach taken by the primary judge to the LC case is a fair representation of the approach that he adopted in considering each of the unconscionable conduct cases. 514 The primary judge first, summarised the submissions made by the ACCC directed to the LC unconscionable conduct case in the following terms: 847 The ACCC alleged that Mazda engaged in unconscionable conduct in its dealings with LC in respect of her request for a replacement vehicle under the ACL. It pointed to the following considerations. 848 First, it was submitted that LC had a clear and cogent request for a replacement car or refund under the ACL and that her case raised numerous "red flags" to Mazda in this regard, with LC having experienced two major failures. The first was after she had only had the car for a few months. The whole transmission had failed and had to be replaced. It is apparent that Mazda had identified that the transmission replacement was an "ACL" major failure. The transmission replacement also satisfied the description of major failure in Mazda's Summary Guidelines. And the ACCC said (correctly) that it even satisfied Ms Han's definition set out in her affidavit (at [15]), namely, "a complete failure of a major assembly (such as an engine or transmission) which occurs early in the life of a vehicle (such as in the first 6 months or less) and which means the vehicle is not able to be driven". 849 Despite that, the ACCC submitted, Mazda's customer advocate dismissed LC's request under the ACL for a replacement car without any apparent consideration. 850 The second "major failure", the ACCC submitted, required the replacement of an engine and was based on a manufacturing defect. It was submitted that there was no evidence to support the notion that the need to replace the engine was a "minor" fault, and that the court should infer that the statement was false or misleading and an attempt to persuade LC to give up pursuing her rights under the ACL with Mazda. 851 Secondly, the ACCC submitted that there was no evidence that LC's request had been considered by anyone in the legal department, contrary to what the customer advocate told her; there was no evidence of any review by any senior management before rejecting LC's requests; there was no record of any round table meeting in the Mazda system or otherwise, and no compliance with Mazda's own processes; and the request was rejected, without any apparent consideration of the position under the ACL. 852 Thirdly, it was submitted that instead, the customer advocate "appears to have decided on [his] own that [LC] was not entitled to a replacement car under the ACL". 853 Fourthly, the compensation offered by the consumer advocate was within his personal remit, something that was said to go "to the culture of Mazda". 854 The ACCC also submitted that, as in the earlier cases, Mazda: (1) summarily rejected the requests for a replacement vehicle without consideration on the merits; (2) sought to dissuade LC from continuing with the request; (3) did not escalate the requests in accordance with Mazda's processes; (4) obfuscated LC's requests, including by "raising the bar so as to deny [LC's] requests" - eg "when LC sought a replacement car after the engine replacement, the request was assessed based on the age and kilometres of the car at that time" - and ignoring the history of failures, including the new transmission within three months of LC's purchase; and (5) did not take LC's safety concerns seriously, in circumstances where the faults experienced by LC "gave rise to immediate, serious and apparently continuing safety concerns".It follows for these reasons, that this ground to the extent that it is relied upon as a general overarching ground must be rejected. 515 After summarising the submissions made by the ACCC, the primary judge then concluded at J [855]: I do not accept that the evidence showed that Mazda did not take LC's safety concerns seriously. The rest of the ACCC's propositions concerning LC may be accepted - but, again, I do not regard Mazda's conduct as rising to the level of the unconscionable. It is, to be sure, another example of appalling customer service and a failure to comply with Mazda's own procedures. And LC was, I have no doubt, justified in remaining disappointed by and frustrated at the outcome to which she agreed (one extra year's warranty and two free services). But that does not mean that Mazda's conduct was unconscionable. 516 In our view, given the factual findings that the primary judge made, his findings that there had been contraventions of s 18(1) and s 29(1)(m) of the ACL, and his acceptance of the ACCC's submissions as to the significance or characterisation of those matters for the ACCC's unconscionable conduct cases, it was necessary to explain why those matters were not sufficient to constitute unconscionable conduct. It was not sufficient to point to the absence of dishonesty or any allegation of systemic conduct and to then characterise the conduct "in all the circumstances" as appalling customer service but not unconscionable conduct. 517 In some circumstances, in very straight forward cases, particularly cases not involving an evaluative judgment, it might be thought sufficient for a judge to set out the respective parties' submissions then state that the submissions of one party are accepted and the other party's submissions are rejected. Such an approach, however, cannot be consistent with an appropriate judicial technique where a party's submissions are almost entirely accepted and the other party's submissions are almost entirely rejected but the judge comes to an ultimate conclusion that is not consistent with the case advanced by the party whose submissions have been almost entirely accepted. 518 We are satisfied that the primary judge, with respect, has not provided adequate reasons for why he found that the conduct of Mazda was not unconscionable, given the numerous contraventions that he found of s 18(1) and s 29(1)(m) of the ACL and his acceptance of the ACCC's submissions with only minor qualifications. His Honour did not explain what he meant by using the contrasting description of "appalling customer service". Had he done so, it is likely his reasoning about why the conduct was unconscionable might have been exposed. 519 The approach taken by the primary judge might fairly be characterised as putting aside a "strong body of evidence" without an adequate explanation and has led to a situation where he might be thought to have failed to provide an intelligible explanation which exposed how he reached his conclusion that the unconscionable conduct cases had not been established. 520 We consider the consequences of this conclusion to the determination of the ACCC notice of appeal below.

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Overview 521 It is convenient to address Grounds 1, 4 and 5 together. The grounds are interrelated and were also addressed together by the parties. 522 These grounds do not involve any challenge to legal principles or the factual findings of the primary judge. Rather, they are directed at alleged errors in the proper application of the legal principles of statutory unconscionability to the facts as found by the primary judge. The ACCC advances the following interrelated grounds in its notice of appeal. 523 First, the ACCC contends that the primary judge erred in finding that Mazda did not engage in unconscionable conduct in contravention of s 21 of the ACL given his Honour's findings that in dealing with the Consumers' requests for a refund or replacement vehicle under the consumer guarantee provisions of the ACL, Mazda: (a) made false representations in contravention of s 18(1) and s 29(1)(m) of the ACL concerning (i) the existence or effect of the consumer guarantee provisions and (ii) the rights and remedies available under the ACL and the consumer's entitlement to a refund or replacement vehicle under the consumer guarantee provisions of the ACL; (b) did not make any proper or genuine attempt to consider and apply the consumer guarantee provisions of the ACL to the circumstances of the consumer's case: at J [141]; (c) failed to make any genuine attempt to consider and apply the consumer guarantee provisions of the ACL which was "a very unsatisfactory state of affairs" including because it failed to comply with its own internal ACL compliance standards and processes: at J [141]; (d) made no sufficient attempt to seek technical advice about the particular issues experienced by the consumer and then to have regard to such advice in applying the consumer guarantee provisions of the ACL: at J [142]; (e) decided that, in most instances, its interests were best served by engaging in commercial negotiations which had no regard to the parameters or requirements of the consumer guarantee provisions of the ACL: at J [142]; (f) sought to dissuade the consumer from continuing with the requests for a refund or replacement vehicle under the consumer guarantee provisions of the ACL, and instead sought to negotiate a "commercial outcome" (for example, trade in, repair, extended warranty) at J [273]; (g) gave the consumer the "run around" meaning to "fob (someone) off with evasion and subterfuges" (at J [279]) and Mazda delayed and made excuses for not squarely addressing the consumer's requests for a refund or replacement vehicle: at J [135]; (h) engaged in "appalling customer service": at J [135] and [282]; (i) was in a stronger bargaining position than the consumer with respect to the consumer's requests: at J [146]; and (j) by its conduct caused the consumer to suffer harm: at J [137]-[139], (Ground 1). 524 Second, the ACCC contends that the primary judge erred by failing to apply the law to the circumstances of each Consumer (Ground 4). 525 Third, the ACCC contends that having regard to each of the grounds above, the trial judge ought to have found, and erred in failing to find, that Mazda had engaged in unconscionable conduct in contravention of s 21 of the ACL in the case of each Consumer (Ground 5).

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Submissions 526 The ACCC submits with respect to Grounds 1, 4 and 5 that the primary judge should have found that Mazda's conduct, in the circumstances as found by him for each Consumer, was unconscionable. It submits that Mazda's conduct involved a sufficient departure from the norms of acceptable commercial behaviour to contravene s 21 of the ACL having regard to (a) the totality of the circumstances (in the context of the factors relied on by the ACCC pursuant to s 22(1) of the ACL), (b) Mazda's failure to comply with the law as evidenced by the 49 Representations constituting the Mazda contraventions of s 21 of the ACL that the primary judge found and (c) Mazda's failure to comply with the standards it had set for itself, namely, its own internal ACL compliance standards and processes which were intended to ensure that Mazda dealt "honestly and fairly" with consumers. 527 The ACCC submits that the primary judge's consideration of the unconscionable cases was flawed in three principal respects. 528 First, the ACCC submits that the primary judge failed to apply the "correct judicial technique" for determining whether conduct was unconscionable in the requisite sense. The phrase "correct judicial technique" is not drawn from any authority, although in Paciocco, Allsop CJ speaks of "judicial technique" in many passages in his Honour's reasons and in both Kojic at [56] and Kingsmede at [2], his Honour employed the phrase "proper judicial technique". 529 In Paciocco at [306], which is extracted above, Allsop CJ explains the technique as needing to employ "a close examination of the complete attendant facts and rational justification". We take it this is the kind of "technique" the ACCC is referring to. The ACCC submits that the primary judge failed to undertake a sufficient and precise examination of the facts and the connection or relation between those facts. 530 Second, the ACCC submits that in seeking to characterise the conduct of Mazda as "appalling customer service" the primary judge has fallen into error by "reducing the test to some form of non-statutory definition". It submits that the primary judge has concluded that "appalling customer service" is at some level of the spectrum and that unconscionable conduct is at a higher level of the spectrum but there is no warrant for such an analysis in the statute. 531 Third, the ACCC submits that it was not clear, at least with Consumers other than RC, what primary facts were being taken into account by the primary judge in his unconscionability analysis for each Consumer. 532 Mazda submits that the contraventions found by the primary judge with respect to its dealings with the Consumers can be attributed to a lack of understanding of the Consumers' rights and mistakes by the individuals involved given that the relevant context for that conduct did not involve "matters of casual significance, a deliberate ruse, systemic conduct or dishonesty". 533 Mazda makes further submissions in opposition to Grounds 1, 4 and 5 by reference to its notice of contention. It is unnecessary to address those submissions given we have determined independently of the matters raised in the notice of contention that the ACCC's notice of appeal must be dismissed.

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Consideration 534 The ACCC does not identify what might constitute a "sufficient and precise examination of the facts and the connection or relation between them" in order to apply the "correct judicial technique", beyond the statement by Allsop CJ in Paciocco at [296]. That statement makes plain that in the case of an allegation of unconscionable conduct contrary to s 21 of the ACL, judicial technique involves an evaluative judgment that must extend beyond a personal intuitive assertion by a judge of whether conduct is unconscionable and it must be undertaken having regard to and in the context of all the connected circumstances and by reference to the values and norms recognised by the text, structure and context of the legislation. In particular, the ACCC did not develop how this "sufficient and precise examination" should have been undertaken by the primary judge in a proceeding where the ACCC had made multiple repetitive allegations in respect of seven consumers, and where its misrepresentation case substantively overlapped in terms of facts with its unconscionability case. 535 In substance, the alleged failure to apply the "correct judicial technique" is another way of advancing the insufficient reasons ground of appeal in Ground 6. Unlike Ground 6, however, the failure to apply the correct judicial technique contention is directed at the primary judge's reasons in rejecting all of the ACCC's unconscionable conduct cases, including the case with respect to RC. It is therefore necessary to consider what approach the primary judge took to the RC unconscionable conduct case. For the reasons that follow we have concluded that the primary judge did not take the correct approach because, in substance, there was insufficient reasoning to support a rejection of the ACCC's unconscionable conduct case. 536 As we have noted above, the approach that the primary judge followed in addressing the unconscionable conduct claims in the case of RC was similar to that which he adopted for the other unconscionable conduct claims. 537 After setting out with some specificity the submissions made by the ACCC and Mazda at J [247]-[263] with respect to the RC unconscionable conduct case, but without making any statement as to whether the submissions were accepted or rejected, the primary judge stated: 264 I am not persuaded, as Tadgell JA said in Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 at 141, citing Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 (Mummery J), that "standing back and viewing it from a distance, making an informed, considered, qualitative appreciation of the whole", Mazda's conduct in respect of RC was unconscionable. 265 The ACCC's case with respect to RC, and each of the other consumers, was that Mazda's conduct towards them in the individual circumstances of each case, considered in the context of all the relevant circumstances, and as a whole, was sufficiently divergent from community standards of acceptable business practices that it objectively answered the description of unconscionable conduct within the meaning of s 21 of the ACL. 538 To this point, the reasons are either simply stating a conclusion, or repeating some of the expressions of the appropriate test. The primary judge then summarised the submissions of the parties in the following terms: 266 Although some of Mazda's submissions in relation to the ACCC's unconscionable conduct claim about RC, quite frankly, baffled me, their rejection, in the end, did not matter much. 267 For example, on 8 September 2017, RC told Ms Miller, "I do not want that car back until it is 100 per cent safe. I am not confident in it at all". And in her Facebook post of 6 October, RC said, "Bottom line is, I NEED a car (whether it's mine, a loan car or better yet a replacement vehicle)". And it may be, as Mazda contended, that those words do not constitute a notification of the rejection of the vehicle within the meaning of the ACL. But the ACCC did not rely on those words. It relied instead upon the separate and emphatic statement that RC made during her 6 October 2017 telephone call with Ms Miller, namely: I can't trust that it's fixed. I'm scared I'm going to be in some sort of accident and kill myself in this car. I don't want it. 268 Mazda contended, in aid of its contention that the ACL was not invoked until later in RC's dealings with it, that viewed in "context", this statement was "not an unequivocal rejection" of the vehicle. But it is difficult to posit a less unambiguous rejection of a vehicle - "I can't trust it, I'm scared I will kill myself in it and I don't want it". Quite what Mazda would accept as an "unequivocal" rejection was not explained. 269 Mazda's case that it did not summarily reject RC's requests for a refund without consideration of the merits of the claims is equally untenable. 270 The gist of Mazda's submission was that the consideration at the round table and the executive panel was "a genuine consideration" of the "important points" concerning RC's rights under the ACL. As the ACCC submitted, the record of the round table meeting on 21 February 2018 did not properly reflect RC's position; nor did it contain any reference to the ACL or the subject matter of the relevant ACL provisions; there was no evidence of technical input into the discussion; and there was no technical person (such as Mr Bradford or Mr Rick David (Mazda, Manager Dealer Support)) present at the meeting. Ms Han conceded all of that in cross-examination. Among other matters, she admitted that "we wouldn't have specifically discussed major failures", "we don't generally use that term [major failure]", the ACL was not referred to, and that that there had been no technical input into RC's case at that time. 271 The proposition that Mazda gave any proper or genuine consideration to whether RC was entitled to a refund or replacement car is inconsistent with Ms Han's evidence, and I do not accept it. 272 Mazda also submitted that although the Maestro record of the round table meeting held on 21 February 2018 did not refer to the ACL, it did record Mazda's decision to offer a partial refund, which it said "reflects the purpose and function of the record". I confess that I do not understand, and it was not explained, what purpose and function was being referred to. 273 It can be accepted, as the ACCC submitted, that Mazda sought to dissuade RC from continuing with her requests, and instead sought to negotiate a commercial outcome with her, by suggesting she trade in her vehicle for a new Mazda, instead of considering her requests under the ACL. And Mazda was clearly wrong to tell RC that the age and mileage of her vehicle could be taken into account when providing a remedy under the ACL. 274 It can also be accepted that RC was in a lesser bargaining position than Mazda. 275 I do not, however, accept that Mazda placed unfair and unreasonable commercial pressure on RC to accept its offer. As Mazda submitted, RC never suggested that she needed more time, something that she could readily have done had she wished. 276 And nor do I accept that Mazda "did not take RC's safety concerns seriously". There is no sufficient basis to enable me so to characterise anything that Mazda told RC. 277 Mazda also submitted that if, in fact, there was no major failure of RC's vehicle, then it could not have been unconscientious for Mazda to have negotiated with her. But as I said earlier, the ACCC did not ask me to make such a finding. 539 The primary judge then concluded: 278 Weighing all these competing factors in the balance, and having regard to the totality of the circumstances, I am not satisfied that the ACCC has established a case that Mazda's dealings with RC were unconscionable. 540 The primary judge's substantive reasoning did not appear to extend beyond a personal intuitive assertion that the conduct of Mazda was not unconscionable, notwithstanding all the submissions of the ACCC that he had otherwise accepted and the numerous contraventions that he had found of s 18(1) and s 29(1)(m) of the ACL. There is some reasoning at J [275] and [276] but it only repeats Mazda's submission. 541 The evaluative judgment of the primary judge in the RC unconscionable case was comprised in the following paragraphs of his reasons: 264 I am not persuaded, as Tadgell JA said in Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 at 141, citing Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 (Mummery J), that "standing back and viewing it from a distance, making an informed, considered, qualitative appreciation of the whole", Mazda's conduct in respect of RC was unconscionable. … 278 Weighing all these competing factors in the balance, and having regard to the totality of the circumstances, I am not satisfied that the ACCC has established a case that Mazda's dealings with RC were unconscionable. … 281 But that said, having conducted the evaluative exercise that is required in cases such as this, I am not satisfied that Mazda's conduct towards RC, considered in the context of all the relevant circumstances, and as a whole, was sufficiently divergent from community standards of acceptable business practices that it objectively answered the description of unconscionable conduct. 282 Ultimately, it seems to me, that although Mazda's conduct with respect to RC (and the other consumers) can surely be characterised as appalling customer service, it falls short of being unconscionable, for the reasons I have given. (Emphasis added.) 542 The difficulty with this approach is that it is not apparent what "reasons" are encompassed by the phrase "reasons I have given" at J [282], given that the primary judge almost entirely accepted the submissions of the ACCC and almost entirely rejected the submissions of Mazda, save for the two submissions described at J [275] and J [276] Adapting the language of Hunter, the reader is left to wonder "which of a number of possible routes has been taken to the conclusion expressed" by the primary judge.

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Our conclusion on unconscionable conduct 543 Given our earlier conclusion that Ground 6 should be accepted, it is necessary in addressing Grounds 1, 4 and 5 for this Court to undertake a "real review" of the evidence and reach our own conclusion as to whether the conduct of Mazda relied upon by the ACCC was unconscionable: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [27] (Allsop J, as his Honour then was). 544 We are satisfied given the unchallenged findings of fact made by the primary judge, drawn largely from the extensive agreed facts, that this Court is in as good a position as the primary judge to determine whether the conduct of Mazda, as alleged before the primary judge, involves "a sufficient departure from the norms of acceptable commercial behaviour as to be against conscience or to offend conscience": Quantum at [92] (Allsop CJ, Besanko and McKerracher JJ). 545 As Dixon CJ and Williams J stated in Mann v Mann (1957) 97 CLR 433; [1957] HCA 68 at 440: Where the question is, not what are the facts but what is the proper inference to be drawn from the facts provide, the appellate tribunal is no less competent to decide what these inferences should be than the judge who actually hears the case. (Citations omitted.) 546 It is against the above statement of principle in Quantum, and the statements of principle to the same effect referred to above in Paciocco at [296]-[299] (Allsop CJ), Lux at [5] and [23] (Allsop CJ, Jacobson and Gordon JJ), Unique at [155] (Allsop CJ, Middleton and Mortimer JJ) and Kobelt at [14] (Kiefel CJ and Bell J) that the ACCC's unconscionable conduct cases are to be assessed. 547 We have reached our own conclusion, that assessed as a whole, the conduct of Mazda relied upon by the ACCC did not involve a sufficient departure from the norms of acceptable commercial behaviour as to be against conscience or to offend conscience for the reasons that we explain below. 548 In reaching that conclusion, we have necessarily had to consider the conduct of Mazda against the values that have been said to inform the standard of conscience and matters that have been stated to be part of its essential conception. In doing so, we recognise that this is not a search for easy aphorisms or alternative formulations of the language of s 21 of the ACL against which to judge the conduct of Mazda and perform the necessary evaluative judgment.

[172]

Overlap in the unconscionable conduct cases 549 Given the extent of the overlap in the unconscionable conduct cases advanced by the ACCC it is convenient to address them together. The differences in the unconscionable conduct cases advanced by the ACCC are relatively minor and reflect the specific faults encountered by the Consumers with their vehicles and their personal circumstances rather than any material differences in the conduct of Mazda that is relied upon by the ACCC. 550 The ACCC relied on the following overlapping or common descriptions or expressions of kinds of behaviour of Mazda in support of its unconscionable conduct claims before the primary judge: (a) summarily rejecting requests by Consumers for replacement vehicles or full refunds without considering the merits (all cases); (b) seeking to dissuade Consumers from continuing with their requests for replacement vehicles or full refunds (all cases); (c) obfuscating requests made by Consumers for replacement vehicles or full refunds (all cases); (d) not taking safety concerns expressed by Consumers seriously (all cases); (e) being in a dominant bargaining position (all cases); (f) not escalating requests made by Customers for replacement vehicles or full refunds in accordance with its processes (all cases, other than RC); (g) placing unfair and unreasonable commercial pressure on Consumers to accept offers (RC, SB/KB and EG); and (h) falsely claiming that requests were to be or had been considered by legal and senior management or proper consideration had been given to the request for replacement vehicles or full refunds (SB/KB, TK/MK and LC). 551 In addition, the ACCC relied on a small number of other matters in support of its unconscionable conduct claims that were bespoke to particular cases, including blaming a Consumer for causing the faults with their vehicles and only belatedly acknowledging that a vehicle had been un-roadworthy for considerable periods of time. 552 The primary judge summarised the common features of the case advanced before him by the ACCC of Mazda's conduct in relation to each of the Consumers in the following terms at J [9]: (1) Mazda did not give any, or any proper or genuine, consideration to the consumers' entitlement under the ACL to a refund or replacement vehicle, and failed to comply with its own internal policies and procedures in dealing with the consumers' requests for refunds or replacement vehicles in accordance with the ACL; (2) Mazda, by its customer advocates, made false or misleading statements to the consumers in contravention of ss 18 and 29(1)(m) of the ACL; (3) Mazda customer advocates made further false or misleading statements to the consumers, in particular, telling them on a number of occasions that their request had been escalated to "senior management" or "legal", when the evidence demonstrated that no such escalation had occurred; (4) Mazda did not give any proper or genuine consideration to the consumers' expressed safety concerns arising from the faults with their vehicles; (5) Mazda was in a dominant bargaining position in relation to the consumers' requests, and engaged in unfair, unjustified, and unreasonable dealings with the consumers, and placed unfair commercial pressure on them to accept offers rather than pursue their requests (including by summarily rejecting requests without consideration on the merits; seeking to dissuade consumers from continuing with their requests, often in favour of repair, free services or extended warranty; and treating their requests as if they were a matter of commercial negotiation); and (6) the sum of Mazda's conduct led to long, drawn-out discussions between the consumers and Mazda customer advocates, often numerous times per day over months, and this frustrated the consumers and their requests. 553 The extent of the overlap in the ACCC's unconscionable conduct cases is also evident in its submissions on appeal. In each case the ACCC relies on the falsity of the Representations, the primary judge's characterisation of the conduct of Mazda as "appalling customer service" and the following findings of the primary judge that it described as "General Findings" (General Findings): (a) the absence of any genuine attempt to consider and apply the consumer guarantee provisions of the ACL to the circumstances of each Consumer: at J [141]; (b) the dominant bargaining position of Mazda: at J [146]; (c) the Consumers were rightly frustrated at Mazda's delays and excuses for not squarely addressing their complaints and requests for a refund or replacement vehicle: at J [35]; (d) the Consumers suffered relevant harm: at J [137]-[139]; (e) the Consumers suffered relevant distress and disruption: at J [139]; (f) the support and assistance provided to the Consumers was insufficient: at J [140]; and (g) Mazda engaging in commercial negotiations in which it had no regard to the parameters or requirements of the consumer guarantee provisions of the ACL: at J [142]. 554 The overlap in the ACCC's unconscionable conduct cases is further demonstrated by the overlap in the Representations that the primary judge found were conveyed to the Consumers. The primary judge found that: (a) 8 Representations in the form of ACS [11(a)] Representations were made to RC, CT/MT and TK/MK and LC; (b) 25 Representations in the form of ACS [11(b)] Representations were made to RC, CT/MT, SB/KB, MG, TK/MK, LC and EG; (c) 4 Representations in the form of ACS [11(c)] Representations were made to RC, CT/MT and MG; (d) 8 Representations in the form of ACS [11(d)] Representations were made to RC, SB/KB and MG; and (e) 2 Representations in the form of ACS [11(e)] Representations were made to RC and SB/KB.

[173]

General propositions 555 We now turn to explain why we have concluded that the conduct of Mazda in the context of all of the relevant circumstances did not sufficiently diverge from community standards of acceptable business practices that it objectively fell within the description of unconscionable conduct within the meaning of s 21 of the ACL. 556 In essence, the unconscionable conduct alleged by the ACCC was a failure by Mazda to consider consistently with its own guidelines and obligations under the ACL, whether the serious and persistent faults notified by the Consumers with respect to their seven vehicles fell within or otherwise engaged the consumer guarantee provisions of the ACL. Rather than considering whether the Consumers might have been entitled to a refund or a replacement vehicle at no cost, Mazda engaged in protracted commercial negotiations and performed extensive vehicle repairs, including engine replacements, at no cost to the Consumer. The failures to consider potential entitlements to refunds and replacement vehicles, at no cost under the ACL consumer guarantee provisions and to making the Opinion Representations and the ACL Representations was serious and reflected poorly on Mazda. 557 As explained further below, the conduct of Mazda, relied upon by the ACCC, did not involve dishonesty, predation or exploitation. It did not demonstrate a lack of good faith, trickery or sharp practice. Nor did it involve an exercise of economic power in a manner worthy of criticism. 558 At the outset it is relevant, but not determinative, to emphasise the following features of the unconscionable cases that the ACCC advanced before the primary judge each of which weigh significantly against a finding that the conduct of Mazda was unconscionable. 559 First, the ACCC expressly disavowed any allegation of dishonesty or fraud on the part of Mazda. 560 Second, unlike in Lux, the conduct relied upon by the ACCC did not involve deception in the form of a ruse or a stratagem by sales representatives to gain access to a consumer for the purpose of achieving sales pursuant to explicit directions from their employer. 561 Third, the ACCC does not advance any systemic conduct case on the part of Mazda, rather it advanced seven individual cases based on essentially the same type of conduct. The absence of a 'system' case meant that the fact there were seven individual cases, in which similar behaviour was proved, was not as significant as it otherwise might have been. 562 Fourth, the ACCC initially raised but ultimately abandoned any case that the Consumers had established an entitlement to a full refund or replacement vehicle at no cost by reason of the faults that they had experienced with their vehicles.

[174]

Significance of Contraventions 563 Having made these general observations, it is then necessary to consider the specific nature of the Representations that the ACCC relies upon. It can readily be accepted that compliance with the law must inform normative standards of acceptable conduct towards consumers and non-compliance with the law may involve a material departure from normative standards. It does not follow, however, that there is any necessary correlation between the making of a false representation in contravention of s 18(1) and s 29(1)(m) of the ACL and a finding of unconscionable conduct for the purposes of s 21 of the ACL. Necessarily, it would depend on context and the nature of the representation. 564 Given the Contraventions have not been overturned in the Mazda appeal, it is necessary to have regard to the common factual context relied upon for the misrepresentation and unconscionable conduct cases advanced by the ACCC, the manner in which the ACCC presented those cases to the primary judge, the overlap in the Representations and most significantly, the specific nature of the Representations. 565 The Opinion Representations, as ultimately advanced by the ACCC and accepted by the primary judge, were only found to convey representations, by implication, that Mazda had reasonable grounds for expressing opinions that (a) the faults with the Consumers' vehicles were not major failures under the ACL consumer guarantee provisions (ACS [11(a)] Representations), and (b) the Consumers were not entitled to a refund or replacement vehicle at no cost under the ACL consumer guarantee provisions (ACS [11(b)] Representations). 566 As explained above, the absence of reasonable grounds was found on the basis that Mazda had not, contrary to its own policies, considered whether the consumer guarantee provisions of the ACL may have been engaged because of the serious and persistent faults that the Consumers had experienced with those vehicles and notified to Mazda. 567 Falsity - in the sense of absence of reasonable grounds - arose only by implication, through refusals to provide full refunds or replacement vehicles at no cost and the making of offers for less than a full refund. Mazda did not falsely represent that it had considered the consumer guarantee provisions of the ACL and formed the opinion that the Consumers were not entitled to a refund. 568 Each of the ACL Representations was also only conveyed by implication. 569 We accept it does not necessarily follow that a representation made by implication is less likely to amount to unconscionable conduct than an express representation. It will always be necessary to have regard to the relevant context in which it is alleged the implied representation was made. Nevertheless, that a representation was implied and not express is an important matter to be taken into account in any ultimate determination of whether conduct is unconscionable. Drawing inferences and making findings that conduct is against conscience may more readily be drawn or made when the conduct is deliberate and that in turn is less difficult to find when a representation is express and not implied. 570 Statements to the effect that Mazda always had the right to repair a vehicle and there was never a vehicle that Mazda could not repair were inconsistent with the ACL consumer guarantee provisions and therefore were found to have implied that consumers did not have any ability to obtain a full refund or replacement vehicle at no cost under those provisions. In circumstances, however, where the ACCC had not alleged that the Consumers had established that they were entitled to a full refund or a replacement vehicle at no cost, the objective seriousness of the ACS 11(c) Representations was materially diminished. 571 Equally, statements referring to the age and/or mileage of a vehicle in response to a request for a full refund or replacement vehicle at no cost or focusing on the failure of major components were found to have conveyed representations as to consumers' rights under the consumer guarantee provisions of the ACL, but only by implication. 572 Again, the objective seriousness of the ACS [11(d)] and [11(e)] Representations was materially diminished because the ACCC had not alleged that the Consumers had established that they were entitled to a full refund or a replacement vehicle at no cost. 573 Further, although the Representations were found to have conveyed misrepresentations of the Consumers legal rights and remedies under the ACL consumer guarantee provisions in circumstances where the consumers were attempting to exercise those very rights there was no evidence that any Consumer was directly told that those rights and remedies were not available to them. 574 In the case of RC, the primary judge set out the following response at J [195] given by Ms Miller, the Mazda customer service representative, in response to RC's ultimatum that if she did not get the outcome that she wanted she would not hesitate to take legal action: We'll put the case forward…we are fair and reasonable. We work in line with the Australian Consumer Laws. If you're not happy with the response you receive from us at the end of all of this, then…as a consumer you have a right to take further action. 575 Similarly, in the case of MT, the Mazda customer representative, Ms Temling, expressly acknowledged in response to MT's statements that she had spoken to the ACCC that "You have to follow your path": at J [302]. No attempt was made to discourage MT from pursuing her rights under the ACL consumer guarantee provisions.

[175]

General Findings made by the primary judge 576 We turn now to consider the significance of the General Findings and the "appalling customer service" characterisation of the conduct of Mazda for the ACCC's unconscionable conduct cases. 577 The absence of any genuine attempt to consider and apply the consumer guarantee provisions of the ACL to the circumstances of each Consumer was conduct that reflected a failure to have regard to potential obligations under the ACL consumer guarantee provisions and was inconsistent with internal policies directed at seeking to ensure that Mazda complied with those obligations. There was no attempt by the ACCC to prove this approach was a ruse or device, nor did Mazda's approach in fact preclude or prevent any Consumer from pursuing their rights. 578 The dominant bargaining position of Mazda is relevant, but again not determinative. The telephone discussions and written communications between Mazda's customer service representatives and the Consumers demonstrated a willingness to listen to the complaints and concerns of the Consumers, they were not dismissed out of hand. Moreover, notwithstanding Mazda's dominant bargaining position, authentic offers were made to the Consumers to address their concerns in circumstances where the ACCC does not contend, and did not seek to prove, that any Consumer had established any entitlement to a full refund or a replacement vehicle at no cost under the consumer guarantee provisions of the ACL. If the ACCC had followed its initial course of seeking to prove the vehicles had suffered major failures, and had proved that, the unconscionability case might have looked quite different. 579 The ACCC placed significant emphasis on the reporting by the Consumers to Mazda of vehicle faults that it characterises as "red flags". As the name suggests, these "red flags" were an indication of the potential seriousness of the faults reported. It can readily be accepted that many of the faults experienced by the Consumers with their vehicles were at least potentially serious and raised genuine matters of concerns with the safety and reliability of their vehicles. The vehicles going into what was euphemistically called "limp mode" on a freeway or busy road, is one pertinent example. As explained above, however, the primary judge rejected the ACCC's submissions that Mazda did not take the Consumers' safety concerns with their vehicles seriously. It could not be said, that the complaints were ignored or that Mazda did not engage in genuine attempts to identify and address the faults. 580 By way of example, in the case of SB/KB, Mazda replaced the engine of the vehicle in 2015 and replaced the starter motor in 2016: at J [480]. In the case of MG, Mazda replaced the engine of MG's vehicle three times in the space of five years: at J [590]. The ACCC did not seek to prove that these engine replacements were less than a genuine and complete attempt to fix the reported problems. In response to the concern of CT/MT with the adaptive headlights of their vehicle, Mazda arranged for the headlight actuators to be replaced in September 2017: at J [340], notwithstanding that, the dealer had advised Mazda that its service manager had taken the vehicle home to tests the lights in June 2017 and in his opinion "the lights were low, but only marginally": at J [325]. Again, some of these factual matters come back to the abandonment by the ACCC of its major failure case. 581 The harm suffered by the Consumers was material. Understandably from the Consumers' perspectives they suffered harm, distress and disruption by (a) not being able to drive a vehicle with a caravan to attend the Birdsville Races, ending up in a caravan park at Rockhampton and being provided with a replacement vehicle without a towbar resulting in the caravan being left in situ for some time, (b) having to engage in lengthy and repeated conversations with Mazda customer representatives, (c) missing work because vehicles had broken down, (d) having to accept a higher insurance excess on a loan vehicle in the case of RC, and (e) only being offered a full refund two years after rejecting the vehicle when TK called into a radio show and Mazda's PR staff. Yet most of that harm did not arise directly from the misleading representations concerning entitlements under the consumer guarantee provisions of the ACL. The harm arose from the defects in the vehicles themselves. Again, the unconscionability case might have been different if the ACCC had sought to prove major failure. 582 However, some of the harm suffered - especially some of the delays experienced by the Consumers in having their vehicles repaired in the way ultimately required - might be seen as arising from the opinions expressed on behalf of Mazda that their vehicles did not have major failures, when Mazda had no basis for that opinion because it had not investigated the question. 583 Failures to provide sufficient support and assistance and delays in diagnosing the cause of faults and taking steps to address them imply poor, even at times what might be characterised as "appalling customer service". Again, without a "system" case, or a major failure case, Mazda's multiple failures fall short of conduct, however, that could be characterised as trickery or sharp practice, predation, exploitation, unfairness of a significant order, an absence of good faith or the exercise of economic power in a way worthy of criticism. The probative value of combining seven examples is lost without either of those more serious cases being alleged by the ACCC. Moreover, the descriptive language used by the primary judge in his findings directed at the conduct of Mazda must be understood in the context of the express disavowal by the ACCC of any allegation of dishonesty or fraud by Mazda. 584 The position would likely be materially different if the failures to consider Consumers' potential entitlements under the consumer guarantee provisions of the ACL and the delays and "fobbing off" in addressing complaints by Consumers and requests for full refunds or replacement vehicles at no cost were part of a deliberate strategy that Mazda had instructed its customer service representatives to pursue in order to minimise Mazda's exposure to having to provide refunds or replacement vehicles to consumers. No such strategy or concerted programme was alleged by the ACCC. 585 Equally, had the conduct included deceit or deception, such as (a) claiming vehicles had been repaired when no such steps had been undertaken, (b) falsely asserting that the reported faults had not been able to be replicated when no steps had been taken to investigate the faults, (c) undertaking purported repairs or replacements with faulty or inappropriate engine parts, or (d) denying its warranty obligations and requiring the Consumers to pay for the cost of undertaking repairs and engine replacements for their vehicles. 586 In this context it is important to have regard to the fact that rather than declining to deal with the Consumers, Mazda voluntarily assumed responsibility for addressing the Consumers' complaints and requests for refunds or replacement vehicles at no cost. 587 In assessing whether conduct is unconscionable within the meaning of s 21 of the ACL it is important to recognise, as emphasised in Unique at [155], that a finding that conduct is unconscionable is a serious conclusion to be drawn about the conduct of a business person or enterprise, sufficient to warrant censure by the imposition of a civil penalty for the purposes of deterrence. A conclusion that conduct cannot, in all the circumstances, be characterised as a sufficient departure from the norms of acceptable commercial behaviour to be against conscience or to offend conscience does not carry with it any explicit or implied finding that the conduct has been found to be consistent with the norms of acceptable commercial behaviour. In concluding that the impugned conduct of Mazda did not constitute a sufficient departure from the norms of acceptable commercial behaviour to be against conscience or to offend conscience, no finding is made that Mazda was acting consistently within the norms of acceptable commercial behaviour. The facts of these seven cases place Mazda's overall treatment of its customers in a very poor light.

[176]

Conclusion 588 Given our conclusions that Ground 6 should be accepted and that Grounds 1 and 4 should also be accepted to the extent that they contend that the primary judge did not apply a correct judicial technique to determine the unconscionable conduct claims it is strictly unnecessary to address the ACCC's submissions that (a) the primary judge did not identify the relevant facts that he relied upon, and (b) that he fell into error by reducing the test to some form of non-statutory test by characterising the conduct of Mazda as "appalling customer service" that fell short of unconscionable conduct. 589 Neither criticism, however, is justified. 590 It is readily apparent from the structure of the primary judge's reasons that he has meticulously and comprehensively made contextual and specific factual findings of the circumstances that were alleged by the ACCC to give rise to each of its seven unconscionable conduct cases. It was unnecessary for the primary judge to repeat those findings in the sections of his judgment explicitly addressing the unconscionable conduct claims, particularly in circumstance where the primary judge had explained that the findings were relevant to both the representation and unconscionable conduct cases. The amount of overlap in the ACCC's case explains why his Honour took the approach he did. 591 Necessarily, in concluding the conduct of Mazda was not unconscionable, the primary judge can be inferred to have reached that conclusion notwithstanding each of the contextual and specific factual findings that he has made. The error in the primary judge's approach was not to provide sufficient reasons. The primary judge identified the relevant facts but did not explain why those facts, taken as a whole, led him to conclude that the conduct of Mazda was not unconscionable. 592 It is also readily apparent from the primary judge's reasons that the primary judge correctly stated the relevant statutory test to determine whether conduct was unconscionable for the purposes of s 21 of the ACL and that his characterisation of the conduct of Mazda as "appalling customer service" was made only after the primary judge had concluded that the conduct was not unconscionable. It was perhaps, best understood as an abbreviated method of seeking to explain why he did not find the conduct was unconscionable. 593 The primary judge did not to apply a non-statutory test as Mazda contended. Rather as explained above, he did not provide sufficient reasons and he did not apply a correct judicial technique. 594 As explained above, we have reached our own conclusion that the conduct of Mazda did not constitute a sufficient departure from the norms of acceptable commercial behaviour to be against conscience or to offend conscience. It follows from that conclusion that notwithstanding the extent to which error is demonstrated in Grounds 1 and 4, Ground 5 must be rejected.

[179]

Consideration 600 We are satisfied that the primary judge did have regard to the making of the Representations that he found to be false and misleading Representations in undertaking his evaluative exercise for each of the unconscionability cases. 601 The facts giving rise to the Representations formed the principal basis of the facts summarised by the primary judge that were relevant to both the misrepresentation and unconscionability cases. 602 Further, the effect of the Representations was considered by the primary judges in his summaries of the submissions made by the ACCC in support of its unconscionable conduct cases. The making and the falsity of the representations concerning the existence or effect of consumer guarantees was the factual means by which Mazda sought to "dissuade the Consumers from continuing with their requests" submissions and the falsity of the Opinion Representations by reasons of the absence of reasonable grounds for making them was principally established by the facts establishing the "summarily rejecting Consumer's' requests without considering the merits" submissions. 603 The more relevant issue is whether the primary judge gave sufficient weight to the findings that the Representation were false and misleading in his rejection of the ACCC's unconscionable conduct cases. 604 The errors in the approach of the primary judge were the provision of insufficient reasons and departures from the correct approach to a detailed evaluation of the facts. These errors precluded any assessment of the weight that the primary judge gave to the making of the false and misleading Representations. We have addressed at [561]-[573] above, the significance of the Contraventions to the determination of the ACCC's unconscionable conduct cases in our separate assessment of those cases. 605 It follows for the reasons given, that to this extent Ground 2 must be accepted but that acceptance does not extend beyond the errors identified in Ground 6 and the shortfalls in the application of the correct approach in Grounds 1 and 4.

[182]

Consideration 610 We are satisfied that the primary judge did take the matters raised in Ground 3 into account in undertaking his evaluative exercise for each of the unconscionability cases. 611 The failure to comply with internal compliance standards contentions were principally directed at the failure by the Mazda customer service representatives to escalate, in accordance with Mazda's processes, the Consumers' requests for refunds or replacement vehicles. 612 The primary judge referred to the red flag contentions, the asymmetry contentions and the failure to comply with internal compliance standards contentions in the course of his consideration of the unconscionable conduct cases directed at: (a) RC at J [260] (asymmetry); (b) CT/MT at J [395(4)] (compliance) and at J [396] (asymmetry); (c) SB/KB at J [503(4)] (compliance and red flag), at J [505(3)] (compliance) and at J [504] (asymmetry) and then after rejecting the alleged lack of safety concerns contention found at J [510] that "much of what the ACCC otherwise submitted may be accepted"; (d) MG at J [590] (red flag), at J [591(4)] (compliance) and at J [592] (asymmetry) and then found at J [594] that "much of the ACCC's submissions can be accepted"; (e) TK/MK at J [770] (red flag), at J [771(4)] (compliance) and at J [773] (asymmetry); (f) LC at J [848] (red flag) and at J [854(3)] (compliance) and then, after rejecting an alleged failure to take safety concerns seriously contention, found at J [855] "the rest of the ACCC's propositions concerning LC may be accepted"; (g) EG at J [954] (asymmetry) and at J [951(1)] (compliance) and then, after rejecting an alleged failure to take safety concerns seriously contention, found at J [955] "the rest of the ACCC's propositions concerning EG may be accepted"; and (h) Mazda gave the consumer only limited time without any justification to accept offers (for less than a refund or replacement vehicle). 613 The limited time contentions were only explicitly advanced by the ACCC in the unconscionable conduct case directed at RC. The primary judge referred to the contention at J [262] but then found in the following passage: 275 I do not, however, accept that Mazda placed unfair and unreasonable commercial pressure on RC to accept its offer. As Mazda submitted, RC never suggested that she needed more time, something that she could readily have done had she wished. 614 In the light of the above matters, we are not persuaded that the primary judge failed to have sufficient regard to all the relevant circumstances in making his evaluative judgments that the conduct of Mazda towards the Consumers circumstances, was unconscionable. Ground 3 can best be construed as a complaint that the primary judge gave insufficient weight to the red flag contentions, the asymmetry contentions and the failure to comply with internal compliance standards contentions in the course of his consideration of the unconscionable conduct cases. Acceptance of those contentions by the primary judge did not preclude him from reaching his evaluative judgments that in all the relevant circumstances the conduct of Mazda was not unconscionable. 615 The 'red flag' notifications indicated that Mazda understood the faults could be serious, but in the absence of a system case, or a major failure case, the responses from Mazda, although sometimes dilatory, were consistent with Mazda appreciating that the faults needed attention, often repeated attention, and follow up. The information asymmetry was not itself probative of unconscionability in the absence of a system case or a major failure case, although it might be probative of an overly cumbersome or inefficient complaints process. Likewise, the failure to follow Mazda's policies and procedures did not rise to the level of unconscionable conduct without a systems case or a major failure case. 616 The contentions were correctly identified by the primary judge as relevant to the unconscionable conduct cases advanced by ACCC but each only formed part of the matters that had to be considered and we are satisfied that it was open for the primary judge not to find that any was decisive or otherwise dictated that the conduct of Mazda was unconscionable. 617 The more relevant issue is whether the primary judge had sufficient regard to the matters identified in Ground 3. Again, the failure to provide sufficient reasons and departures from the correct approach precluded any meaningful assessment of the weight that the primary judge gave to these matters in understanding his evaluative assessment. 618 It follows for the reasons given, that to this extent, Ground 3 has force, but again that acceptance does not extend beyond the errors identified in Ground 6 and the shortfalls in the application of a correct judicial technique identified in Grounds 1 and 4.

[184]

LEE J: 621 I have had the benefit of reading a draft of the judgment of Mortimer and Halley JJ. I generally agree with the reasons given for the dismissal of the Mazda appeal and adopt the abbreviations used by their Honours. 622 As to the ACCC appeal, for reasons their Honours give, it is necessary to re-determine whether the ACCC established that Mazda engaged in unconscionable conduct in contravention of s 21 of the ACL. 623 It is far from surprising that the ACCC's unconscionable conduct case miscarried. The closing submissions filed by the ACCC were over 300 pages long and contained 1,435 footnotes. Like other examples of regulatory proceedings in recent times (see, for example, Australian Securities and Investments Commission v GetSwift Limited (Liability Hearing) [2021] FCA 1384) the case advanced by the regulator was prolix, repetitive, and complex. Although it is evident the ACCC faced a determined opponent, simplification of regulatory proceedings (to the extent possible) is desirable to allow regulatory action to be resolved promptly and to place no more demands upon the Court's resources than necessary. This need for making cases simpler was heightened when hearings like that below, perforce, were being conducted sub-optimally over remote technology. 624 Moreover, and connected to its complexity, there was a tension in the ACCC's case. While it eschewed a "system" or "pattern" case, at many points, it skirted with one. 625 The ACCC made a series of omnibus submissions as to Mazda's institutional practices (including internal compliance documentation, process, and what was described as "culture"), but as advanced at trial, the prism through which the conduct was to be judged was not at some high level of abstraction. The relevant enquiry was properly directed towards the relevant circumstances of Mazda's dealings towards each consumer and the logically separate (albeit often repetitive) allegations of contravening conduct in relation to each consumer. 626 Again, despite there being no "system" case, the ACCC focussed in final submissions on the following five aspects of Mazda's institutional practices that were said to be "common features to Mazda's conduct". 627 First, even though Mazda was aware (by the existence of so-called "red flags") that the provisions of the ACL were engaged by the Consumers' requests, it did not give any, or any proper or genuine, consideration to the Consumers' entitlements under the ACL to a refund or replacement vehicle. In this regard, Mazda failed to comply with its own internal process, which was important to ensure that Mazda dealt honestly and fairly with consumers. 628 Secondly, and somewhat problematically given the denial of a "system" case, it was asserted the "culture" within Mazda was to deny requests for refunds or replacement cars which included: summarily rejecting requests without consideration on the merits; seeking to dissuade requests, often in favour of repair, free services, or extended warranty; and treating requests as though they were a matter of commercial negotiation. 629 Thirdly, and again, at a high level of generality, it was contended that Mazda, by its (oddly named) "customer advocates", made false or misleading representations in that: Mazda 'Customer Advocates' told the Consumers on a number of occasions that their request had been escalated to 'senior management' or 'legal' when the evidence demonstrates that this had not occurred. 630 Fourthly, it was said Mazda did not take seriously the Consumers' genuine safety concerns, despite their manifest relevance under the ACL and their general importance to the Consumers and the public more broadly. 631 Fifthly, the ACCC submitted that Mazda "was in a completely dominant bargaining position" with respect to the Consumers when requests were raised and "also engaged in unfair tactics in its dealings with the Consumers and placed unfair commercial pressure on the Consumers to accept offers rather than pursue their requests". It was said this led to "long, drawn-out discussions" between the Consumers and customer advocates. 632 In its final written submissions below, immediately following reference to these general factors, the ACCC submitted (at [18]-[19]): 18. Mazda's conduct was clearly beyond conscience in all the circumstances. It was "irreconcilable with what is right or reasonable" and involved "unfairness of a significant order, a lack of good faith, or the exercise of economic power in a way worthy of criticism". It was a "sufficient departure from the norms of acceptable commercial behaviour as to be against conscience or to offend conscience" and involved "misrepresentation, commercial … pressure and sharp practice, using a superior bargaining position". 19. To succeed in this case, the ACCC does not have to prove that in each case the Consumers were in fact entitled to a refund or replacement vehicle under the consumer guarantee provisions of the ACL. However, those provisions form an important background to the ACCC's claims. (Citations omitted). 633 Against this background, and faced with an unwieldy case, the primary judge adopted a form of shorthand: having rejected the ACCC's characterisation of these "common features to Mazda's conduct" in the context of dealing with the customer known by her initials "RC", his Honour did not then descend into the further detail referred to in the reasons of Mortimer and Halley JJ. 634 That is not to say his Honour misapprehended that there was a need, in having regard to all the relevant circumstances, to focus on the separate conduct directed to each of the Consumers. Rather, the prominence of the "common features" contentions did not assist the primary judge in the sufficient and precise examination required. 635 Given the need for re-determination, my preference would have been to remit the matter for a new trial of all aspects of the unconscionable conduct case (other than the aspect dealt with below). I would prefer to make an order under s 30 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) that the new trial be limited to the determination of the balance of the unconscionable conduct case on the currently served evidence, but requiring the service of a statement of claim which pleads each unconscionability case against each customer so there was precision and clarity as to the individual unconscionability cases being advanced. This would focus submissions and serve to assist a trial judge in making a sufficient and precise assessment in relation to each case persisted in (to the extent the ACCC thought it consistent with the overarching purpose in Pt VB of the FCA Act to pursue a case in relation to each customer). 636 Given I am in the minority in this regard, I do not propose to go through each of the individual cases advanced below to explain why I respectfully differ from Mortimer and Halley JJ and consider the unconscionable conduct claims should not be dismissed on appeal. 637 It is appropriate, however, that I deal with the ACCC's case as it relates to RC, being the customer the primary judge dealt with most extensively (and an aspect of the case not the subject of Ground 6 dealing with sufficiency of reasons). 638 His Honour recorded (at J [152]-[245]) the dealings between RC and Mazda in 2017 and 2018 and the characterisation of those dealings as involving misleading or deceptive conduct. Mortimer and Halley JJ have explained, in detail, how no error has been identified in the primary judge identifying this conduct and characterising it as being false or misleading. 639 In my respectful view, the fact the contravening conduct was based on implied rather than express representations is not to the point. Speaking generally, and depending upon the context, conduct in the nature of silence or implied representations can often be as seriously misleading as express representations (and, in some circumstances, may be more serious because the misleading nature of the conduct may be more difficult to appreciate). 640 Here, the misleading conduct was of some seriousness. By way of recapitulation, the following conduct was particularised and, to the extent the communications were oral, were evidenced by recordings annexed to the affidavit of RC sworn on 31 January 2020: Date Representation Particulars 31 October 2017 RC Representation 1: Telephone call between Ms Marilyn Miller of Mazda and RC Mazda represented to RC, in response to her query about what would happen if her vehicle was "not fixable" and if "the Mazda Australia technicians looked at it and it just continues to keep having this problem", that the vehicle was fixable and "there hasn't been a car that they can't fix" and "there has never been a situation where they can't" and "[i]t's just a matter of sometimes getting the right person on it long enough … to just [sic] persist". 24 January 2018 RC Representation 2: Telephone call between Ms Miller and RC Mazda represented to RC, in the context of RC stating "I don't have to accept the vehicle back if it's not safe or if it's taken too long to get fixed", that "we also work with the Australian Consumer laws", "we are aware of the consumer's rights", and "once this vehicle engine goes in and they test it, quite literally it is going to be safe to drive. They would not release the vehicle to you if it was unsafe to drive". 27 February RC Representation 3: Telephone call between Ms Miller and RC Mazda represented to RC, in the context of RC's request for a refund, that Mazda's offer of $12,125 (less than a full refund) took into account the age of and the kilometres on her vehicle. 2018 27 February RC Representation 4: Telephone calls between Ms Miller and RC Mazda represented to RC, in the context of RC stating "I don't have to accept the vehicle back if it's not safe or if it's taken too long to get fixed", that "we also work with the Australian Consumer laws" and "we are aware of the consumer's rights". Subsequently, Mazda represented to RC, in response to RC's request for a refund, that Mazda has reviewed "all the information" and was prepared to offer the sum of $12,215 for the vehicle (less than a full refund) and, in response to RC's statement that cars should be like any other consumer product (for which a consumer receives a full refund), that "cars, they're not … they're actually not [like any other consumer product]". 2018 and 24 January 2018 1 March 2018 RC Representation 5: Telephone call between Ms Miller and RC Mazda represented to RC, in response to RC's request for a refund, that Mazda was prepared to offer the sum of $12,215 for the vehicle (less than a full refund). 2 March 2018 RC Representations 6 and 7: Letter from Mazda to RC "You have requested that Mazda Australia refund the full purchase price of $18,990.00 to you. As discussed, Mazda Australia has reviewed your request and are unable to accede to your request. We are however prepared to offer you an amount of $12,125.00 to purchase the vehicle from you. We believe this offer is reasonable taking into account you have had fair use and benefit of this vehicle." 16 March RC Representations 8 and 9: Telephone call between Ms Miller and RC Mazda represented to RC, in the context of RC stating that the vehicle had a "major failure" and "the engine obviously has needed to be replaced in the car, which is a major failure with the car" and that she was entitled to a full refund, that Mazda was prepared to increase its offer for the vehicle to $13,000 (less than a full refund). 2018 22 March 2018 RC Representations 10, 11 and 12: Letter from Mazda to RC "We refer to your recent telephone conversation with the writer on the 16th March 2018 in relation to your Mazda2 vehicle purchased from Eagers Mazda in December 2014. You have requested that Mazda Australia refund the full purchase price of $18,990.00 to you. As discussed, Mazda Australia has reviewed your request and are unable to accede to your request. We are however prepared to offer you an amount of $13,000.00 to purchase the vehicle from you. We believe this offer is reasonable taking into account you have had fair use and benefit of this vehicle."

[185]

641 As the unconscionability case relied upon this false or misleading conduct, one is left with the reality that Mazda, partly through someone who Mazda held out as a so-called "customer advocate", engaged in conduct towards RC by which it impliedly conveyed the following: (1) the fault with RC's vehicle was not a major failure under the consumer guarantee provisions of the ACL (see the 16 March and 22 March 2018 communications); (2) RC was not entitled to a refund or replacement vehicle at no cost to her under the consumer guarantee provisions of the ACL (see the 24 January, 27 February, 1 March, 2 March, 16 March and 22 March 2018 communications); (3) RC did not have any ability under the ACL to seek to obtain a refund or replacement for her vehicle, because Mazda was entitled to repair it regardless of the number of attempts made to repair the fault, the time it took to repair, and RC's requests (see the 31 October 2017 and 24 January 2018 communications); and (4) Mazda was not required to provide a refund or replacement vehicle at no cost to RC because of the age and/or mileage of her vehicle (see the 27 February, 2 March and 22 March 2018 communications). 642 As explained by the primary judge (at J [246]-[262]), the ACCC's case on unconscionable conduct rested upon a number of related propositions: first, RC rejected her vehicle, requested a refund on a number of occasions, and raised serious safety concerns, and the provisions of the ACL were engaged; secondly, RC's vehicle was off the road under repair for significant periods of time, including for about two months from September to November 2017, and a further three weeks in January 2018; thirdly, Mazda summarily rejected RC's requests without consideration on the merits and repeatedly assured RC that her vehicle had to be repaired and no proper or genuine consideration was given to whether she was entitled to a refund under the ACL; fourthly, Mazda sought to dissuade RC from continuing with her requests, sought to negotiate a commercial outcome instead of considering her requests under the ACL, and falsely told her that the age and mileage of the vehicle could be taken into account when providing a remedy under the ACL; fifthly, Mazda was in a dominant bargaining position; sixthly, Mazda obfuscated RC's requests and did not take her safety concerns seriously; and seventhly, Mazda placed unfair and unreasonable commercial pressure on RC to accept its offer. 643 For the reasons explained by the primary judge, the first five of these propositions were made out. Further, the primary judge, with respect correctly, rejected a number of adjectival propositions raised by Mazda in its submissions below (reflected in its notice of contention), namely: (a) Mazda devised and implemented a detailed and accurate training programme for ACL compliance (cf J [31]-[45], [141]); (b) Mazda provided support and assistance to the Consumers (including RC) at no cost, despite not being obliged to do so and without the Consumers having demonstrated an entitlement to relief under the ACL (cf J [140]); (c) the roundtable and executive panel processes were a good faith (albeit flawed) attempt by Mazda to apply the consumer guarantee provisions of the ACL (cf J [141]); and (d) the Consumers (including RC) did not suffer harm in the relevant sense or were no worse off by reason of Mazda's conduct (cf J [138]-[139], [277]). 644 Moreover, it seems to me that the other aspects of the unconscionable conduct case as it related to RC were established. 645 First, the misleading conduct and "appalling customer service" had the effect of obfuscating RC's true commercial and legal position qua Mazda. Mazda's conduct towards RC while pressuring her to accept the offer involved a serious departure from proper commercial conduct. Three examples suffice: (a) the implied rejection by the "customer advocate" of the notion that RC could seek a refund under the ACL, which was manifestly inconsistent with her assertions that "Mazda [is aware of] consumer's rights" and "work in line with the Australian Consumer Laws" (at J [211]); (b) the false assertion in the context of explaining to RC how Mazda arrived at the figure offered that cars are "actually not" like any other consumer product (at J [204]); and (c) the deflecting observation, in response to RC's complaint about the engine warning light, that "[t]here must have been a, just a small batch of them on assembly that just, the springs weren't tight enough or something like that" (at J [154]). It is hard not to share the view of the primary judge that a "number of things" said by the customer advocate to RC "can be correctly be characterised as subterfuge" (at J [280]), in the sense of a want of an appropriate level of candour, rather than deceit (which was not a case advanced by the ACCC). 646 Secondly, as to the offer itself, RC considered she had no alternative option but to keep what she perceived (and Mazda understood she perceived) to be an unsafe car, and her only recourse would be the pressure and uncertainty of commencing litigation against a major corporation, which she understandably wanted to avoid (at J [262]). Put simply, RC was faced with unfair pressure in that if she did not accept Mazda's proposed outcome, she perceived she might be left with nothing but a car she regarded as unsafe. This was compounded by the fact that the offer had a short timeframe for acceptance (seven days), and RC felt pressured to accept it quickly (at J [229]). Moreover, the terms of the offer not only amounted to less than a full refund (which RC was entitled to under the consumer guarantee provisions of the ACL), but less than the amount approved initially at the Mazda roundtable meeting (at J [232]-[241]). 647 The task of the Court in evaluating whether conduct such as that directed by Mazda towards RC amounts to unconscionable conduct has been complicated by a history of cases in which glosses have been placed upon the statutory words. The cases are canvassed at length in the reasons of Mortimer and Halley JJ. To set them out in detail would be to add unduly to an already lengthy judgment. I will restrict myself to the following. 648 The text is clear. Section 21(1)(a) of the ACL provides that a "person must not, in trade or commerce, in connection with … the supply or possible supply of goods or services to a person … engage in conduct that is, in all the circumstances, unconscionable". Subparagraph 21(4)(a) provides that it is the intention of Parliament that s 21 "is not limited by the unwritten law relating to unconscionable conduct". 649 Section 22 of the ACL then sets out a series of factors which the Court may consider in determining whether conduct is, in all the circumstances, unconscionable. As Beach J observed in Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liquidation) (No 3) [2020] FCA 208; (2020) 275 FCR 57 (at 117 [362]) (albeit by reference to a statutory analogue) this "lens", together with the non-exhaustive list in s 22 in the ACL, is indicative of the fact that "neither the boundaries nor content of the equitable doctrine are defining or limiting features" of statutory unconscionability. This is consistent with Parliament's evident intention to extend statutory unconscionability beyond the equitable concept (in contrast to s 20, which is expressly limited to unconscionability within "the meaning of the unwritten law"). Of course, this is not to say the accumulated experience of equity does not assist in the evaluative task under s 21. It obviously does, but it does not constrain it. 650 Indeed, the statutory prohibitions on unconscionable conduct were widened, including by the addition of the "system" or "pattern" case provision (s 21(4)(b)), to address Parliament's impression that the sections had "fallen short of [their] legislative intent": see Senate Standing Committee on Economics, The need, scope and content of a definition of unconscionable conduct for the purposes of Part IVA of the Trade Practices Act 1974 (December 2008) (at 43 [5.54]). 651 In my respectful view, and speaking generally, there has been a tendency to attenuate the concept of statutory unconscionability and a failure to appreciate its potential reach. Although greater clarity has emerged following a number of relatively recent Full Court decisions, there remains a danger of overcomplicating the evaluative task and becoming distracted by seeking to characterise conduct as being of a nature that can be described as mala fide or dishonest, predatory, exploitative, or unfair to a significant order. The real nature of the evaluative task might be thought to be best captured by the Full Court in Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40; (2021) 285 FCR 133, where Allsop CJ, Besanko and McKerracher JJ (at 155-156 [92]) observed that the aim of evaluating the impugned conduct is to: assess whether it is to be characterised as a sufficient departure from the norms of acceptable commercial behaviour as to be against conscience or to offend conscience and so be characterised as unconscionable. In any particular case, it should be recognised that if the evaluative answer be "no: it is not unconscionable", the court is concluding that by an Australian business conscience the conduct is conscionable and not to be deterred by penalty. 652 So what of the conduct of Mazda towards RC? 653 As I recently said in Kumova v Davison (No 2) [2023] FCA 1 (at [108]), for almost fifty years, the commercial life of this country has been regulated by a basic norm, now reflected in a bewildering array of statutory provisions, being that persons must not engage in conduct, which is misleading or deceptive, or likely to mislead or deceive. The pervading influence of the provisions enacting this norm might be seen generally as a reflection of social attitudes that have heralded a retreat from legal formalism on several fronts and, in many ways, the existence of the norm reflects community expectations of acceptable commercial behaviour. But it is not as simple as that. There is a continuum of conduct that can contravene these norms: at one end, wicked, predatory, and highly immoral conduct; and at the other, guileless conduct, engaged in by someone trying to do their best, but which involves innocent but mistaken conduct. 654 For this reason, it is both simplistic and wrong to point to conduct that is misleading and then say it must also be against good conscience. But the conduct of Mazda towards RC, including the conduct rightly characterised as misleading, 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. Of course, as Mortimer and Halley JJ point out, just because conduct cannot be characterised as not being a sufficient departure from the norms of acceptable commercial behaviour to offend conscience, does not mean it has been found to be acceptable commercial behaviour. It is necessarily a matter of degree. I cannot accept that the sort of conduct summarised above (at [639]-[644]) is anything other than a marked divergence from what is right and proper. My evaluation of Mazda's conduct, by reference to the values and norms recognised by the text, structure, and context of the legislation, is that the conduct directed towards RC constitutes a sufficient departure from the norms of acceptable commercial behaviour as to be against conscience. 655 Of course, 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, but I consider the conduct towards RC contravened s 21 without the additional weight of combining other examples. I would allow the appeal against the dismissal of the unconscionable conduct case as it related to RC, hear the parties on appropriately calibrated relief, and make an order pursuant to s 30 of the FCA Act as identified above. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.

Parties

Applicant/Plaintiff:

Australian Competition and Consumer Commission

Respondent/Defendant:

Mazda Australia Pty Limited

Legislation Cited (3)

Australian Securities and Investments Commission Act 2001(Cth)s 12CB

Competition and Consumer Act 2010(Cth)

Federal Court of Australia Act 1976(Cth)s 30

Cases Cited (71)

ssion v Dateline Imports Pty Ltd [2015] FCAFC 114 Australian Competition and Consumer Commission v Jayco Corporation Pty Ltd [2020] FCA 1672 Australian Competition and Consumer Commission v LG Electronics Australia Pty Ltd [2018] FCAFC 96 Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90 Australian Competition and Consumer Commission v Medibank Private Ltd (2018) 267 FCR 544; [2018] FCAFC 235 Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40 Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196 Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18 Australian Securities and Investments Commission v AGM Markets Pty Ltd (in liquidation) (No 3) (2020) 275 FCR 57; [2020] FCA 208 Australian Securities and Investments Commission v GetSwift Limited (Liability Hearing) [2021] FCA 1384 Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132; [2005] FCAFC 226 Beale v Government Insurance office of New South Wales (1997) 48 NSWLR 430 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 39 Carlisle Homes Pty Ltd v Barrett Property Group Pty Ltd [2009] FCAFC 31 Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd (2017) 251 FCR 404; [2017] FCAFC 75 Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421; [2016] FCAFC 186 DL v The Queen (2018) 266 CLR 1; [2018] HCA 26 Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 Good Living Company Pty Ltd v Kingsmede Pty Ltd and Another (2021) 284 FCR 424; [2021] FCAFC 33 Hunter v Transport Accident Commission [2005] VSCA 1 Inn Leisure Industries Pty Ltd (Provisional Liquidator Appointed) v DF McCloy Pty Ltd (No 1) (1991) 28 FCR 151 Ireland v WG Riverview Pty Ltd (2019) 101 NSWLR 658; [2019] NSWCA 307 Jenyns v Public Curator of Queensland (1953) 90 CLR 113; [1953] HCA 2 Kaur v Minister for Immigration and Border Protection (2019) 269 FCR 464; [2019] FCAFC 53 Kumova v Davison (No 2) [2023] FCA 1 Mann v Mann (1957) 97 CLR 433; [1957] HCA 68 NSW Police Force v Winter [2011] NSWCA 330 Paciocco v Australian and New Zealand Banking Group Ltd (2015) 236 FCR 199; [2015] FCAFC 50 Pettitt v Dunkley [1971] 1 NSWLR 376 Singh v Minister for Immigration and Border Protection [2019] FCA 781 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Sun Alliance Insurance Ltd v Massoud [1989] VR 8 TechnologyOne Limited v Roohizadegan [2021] FCAFC 137 The Juliana (1822) 2 Dods 504 at 522; 165 ER 1560 Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631; [2018] FCAFC 155

[2005] VSCA 1

[1953] HCA 2

(2021) 287 FCR 388

(2018) 267 FCR 544

(2021) 285 FCR 133

(2019) 267 CLR 1

(2020) 275 FCR 57

(2005) 148 FCR 132

(1997) 48 NSWLR 430

(2001) 117 FCR 424

(2004) 218 CLR 592

(2009) 238 CLR 304