Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission

• Jurisdiction: Australia Federal only
• Judgment Date: 09 April 2021
• Neutral Citation: [2021] FCAFC 49
• Date: 09 April 2021
• Court: Full Federal Court (Australia)

Federal Court of Australia

Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission [2021] FCAFC 49

Appeal from:	Australian Competition and Consumer Commission v Volkswagen Aktiengesellschaft [2019] FCA 2166
File number:	NSD 125 of 2020
Judgment of:	WIGNEY, BEACH, AND O'BRYAN JJ
Date of judgment:	9 April 2021
Catchwords:	CONSUMER LAW – admitted contraventions of s 29(1)(a) of the Australian Consumer Law by appellant Volkswagen Aktiengesellschaft – where regulatory proceedings settled as between the regulator, Australian Competition and Consumer Commission, and Volkswagen and its subsidiaries and affiliates – where the parties jointly proposed an agreed pecuniary penalty as part of the settlement – where the primary judge found that the agreed pecuniary penalty was not appropriate within the meaning of s 224(1) of the Australian Consumer Law – where the primary judge held that the agreed pecuniary penalty was manifestly inadequate – where the primary judge imposed a higher civil pecuniary penalty ; APPEAL – appeal from a judgment imposing a higher penalty than the agreed pecuniary penalty between the parties – whether the primary judge erred in determining that the agreed pecuniary penalty was not appropriate – whether the imposed higher penalty was manifestly excessive – relevant principles regarding the determination of an appropriate civil pecuniary penalty – whether the primary judge considered all relevant matters in determining the civil pecuniary penalty pursuant to s 224(1) of the Australian Consumer Law – where the parties did not demonstrate appellable error by the primary judge – where appellate intervention was not warranted – appeal dismissed
Legislation:	Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law, ss 29(1)(a), 224, 224(1), 224(1)(a)(ii), 224(2), 224(2)(a), 224(2)(b), 224(2)(c), 224(3) Evidence Act 1995 (Cth) ss 191, 191(2)(b) Motor Vehicle Standards Act 1989 (Cth) s 10A Trade Practices Act 1974 (Cth)
Cases cited:	Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 Australian Competition and Consumer Commission v Apple Pty Limited [2012] FCA 646 Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd (2016) 118 ACSR 124; [2016] FCA 1516 Australian Competition and Consumer Commission v Birubi Art Pty Ltd (in liq) (No 3) (2019) 374 ALR 776; [2019] FCA 996 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540; [2015] FCA 330 Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (No 5) (1998) ATPR 41-628 Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301; [2005] FCA 265 Australian Competition and Consumer Commission v McMahon Services Pty Ltd (2004) ATPR 42-031; [2004] FCA 1425 Australian Competition and Consumer Commission v PT Garuda Indonesia Ltd (2019) 370 ALR 637; [2019] FCA 786 Australian Competition and Consumer Commission v Qantas Airways Ltd (2008) 253 ALR 89; [2008] FCA 1976 Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54 Australian Securities and Investments Commission v Wooldridge [2019] FCAFC 172 Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54 Director of Public Prosecutions (Cth) v Nippon Yusen Kabushiki Kaisha (2017) 254 FCR 235; [2017] FCA 876 Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301 House v The King (1936) 55 CLR 499 Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993; [2004] FCAFC 72 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 R v Adler (2005) 53 ACSR 471; [2005] NSWSC 274 R v Gay (2002) 49 ATR 78; [2002] NSWCCA 6 R v Hannigan (2009) 193 A Crim R 399; [2009] 2 Qd R 331 R v Ronen (2006) 161 A Crim R 300; [2006] NSWCCA 123 R v Whitnall (1993) 42 FCR 512 Re Application by the Attorney-General (No 3 of 2002) (2004) 61 NSWLR 305; [2004] NSWCCA 303 Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20 The Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46 Trade Practices Commission v CSR Limited (1991) 13 ATPR 41-076; [1990] FCA 521
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Number of paragraphs:	218
Date of hearing:	12 August 2020
Counsel for the Appellant:	Mr G Rich SC with Mr I Ahmed
Solicitor for the Appellant:	Clayton Utz
Counsel for the Respondent:	Mr J Kirk SC with Ms J Davidson
Solicitor for the Respondent:	Australian Government Solicitor
Amicus Curiae:	Mr N Owens SC with Mr R Yezerski

ORDERS

		NSD 125 of 2020
BETWEEN:	VOLKSWAGEN AKTIENGESELLSCHAFT Appellant
AND:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Respondent

order made by:	WIGNEY, Beach And O’Bryan JJ
DATE OF ORDER:	9 April 2021

THE COURT ORDERS THAT:

1. The appeal be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1. The appellant, Volkswagen Aktiengesellschaft, is one of the largest companies in the world. It manufactures the well-known Volkswagen brand of motor vehicles. Those vehicles are sold throughout the world, including in Australia.

2. Over a period of almost five years between January 2011 and October 2015, Volkswagen engaged in a course of conduct which involved the deliberate and dishonest deception of the Australian government and Australian consumers, about the exhaust emissions of certain Volkswagen-branded motor vehicles which were imported into Australia for sale. When that conduct was eventually exposed, the respondent, the Australian Competition and Consumer Commission, commenced a civil penalty proceeding against Volkswagen and its Australian subsidiary, Volkswagen Group Australia Pty Limited (Volkswagen Australia). The Commission alleged that Volkswagen had contravened s 29(1)(a) of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth).

3. Volkswagen initially defended the proceeding. Ultimately, however, it reached a settlement with the Commission. As part of that settlement,...