Court rejects appeals over Mazda Australia refund conduct dispute

UPDATE: Court throws out appeals against previous Mazda conduct judgments

The Full Federal Court today has dismissed an appeal by consumer watchdog the ACCC against an earlier Federal Court judgment that ruled Mazda did not engage in unconscionable conduct in its dealings with nine customers.

However, the same court today also dismissed Mazda’s own appeal against another previous judgment that found the carmaker had made 49 false representations to consumers about their rights.

The Full Court rejected the Australian Competition and Consumer Commission's appeal from the trial judge’s finding that Mazda’s dealings with the consumers was not unconscionable.

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

The ACCC said it will carefully consider the Full Court’s judgment before deciding what to do next.

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The case will now be referred back to the trial judge for a hearing at a later date on the penalties and other orders sought by the ACCC in relation to the false representations made by Mazda, which are said to go back to 2013.

The models involved include; the Mazda 2, Mazda 6, CX-5, CX-3 and BT-50 purchased between 2013 and 2017 – though the ACCC only launched its case against the manufacturer in 2019.

A spokesperson for the auto company told Wheels: "Mazda is pleased that the Federal Court by majority has upheld Justice O’Callaghan’s finding that it did not engage in unconscionable conduct.

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

"We are disappointed that the Court upheld Justice O’Callaghan’s finding that Mazda engaged in misleading conduct, and are carefully reviewing the Court’s decision in that regard."

Our earlier story continues below unchanged.

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The story to here

April 2022: The ACCC has filed an appeal against the Federal Court's decision to dismiss its allegation that Mazda Australia engaged in unconscionable conduct.

Despite an earlier ruling that Mazda had engaged in false or misleading representations with nine customers, the Federal Court dismissed the ACCC’s application of the more serious accusation of ‘unconscionable conduct’.

“In addition to finding that Mazda made false or misleading representations, the Court found that Mazda gave consumers the ‘run-around’ by engaging in evasion and subterfuges, provided appalling customer service and failed to make any genuine attempt to consider and apply the consumer guarantee provisions of the Australian Consumer Law,” ACCC Commissioner Liza Carver said today as the watchdog launched its appeal.

“We will argue that based on the Court’s factual findings, Mazda’s conduct fell below the applicable norms of commercial behaviour, and was in all the circumstances unconscionable.”

If Mazda is found to have engaged in unconscionable conduct, the company could be liable for greater penalties under Australian Consumer Law.

A spokesperson for Mazda Australia told WhichCar the company has filed its own appeal seeking to have the misleading conduct decision overturned.

On the more serious allegation they said: "Mazda maintains the trial judge was correct in finding that Mazda had not engaged in any unconscionable conduct."

Read on for our coverage of the Court's previous decision.

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December 2021: The Federal Court has ruled Mazda Australia misled a number of customers who were experiencing issues with their cars, following a legal battle lasting two years.

Mazda was found to have made false or misleading representations to nine consumers, refusing to provide a full refund despite the owners experiencing serious and recurring faults with their new cars – a right guaranteed under the Australian Consumer Law.

“Mazda engaged in long, drawn out discussions with the consumers, often multiple times a day over months, in which it misled the consumers about their rights,” ACCC Chair Rod Sims said following the ruling.

“Mazda’s conduct towards these consumers was not just appalling customer service as noted by the judge, it was a serious breach of the law.”

Despite multiple attempts at repairing the cars – including up to three engine replacements in one case – the company told its customers they would only be provided a partial refund, or a replacement vehicle if the owner made a significant payment towards it.

“The message to the new car industry is clear, consumer rights are not negotiable and must not be misrepresented to consumers,” Sims said.

“If a vehicle cannot be repaired within a reasonable time, or at all, consumers have a right under the Australian Consumer Law to a refund or replacement.”

But while the court found the car company made false or misleading representations, it disagreed with the ACCC’s allegations of engaging in “unconscionable conduct”.

A spokesperson for Mazda Australia told WhichCar it was taking the Federal Court judgment into careful consideration, but did not have any further comment at this stage.

The Federal Court will rule on penalties at a later date.