Breaking news: Australian Full Federal Court provides clarity on lawfulness of representations regarding mandatory consumer guarantees

After the Federal Court dismissed the case against LG Electronics in first instance (see ACCC v LG  [2017] FCA 1047 per Middleton J), the Full Federal Court upheld the appeal in relation to representations made to two consumers that it found were false, and misleading or deceptive, in breach of s18 and 29(1)(m) of the Australian Consumer Law, and has remitted the matter to the trial judge to consider appropriate relief.  The Full Court dismissed the appeal in relation to representations to 5 other consumers, finding they were not unlawful.

The case clearly establishes that the consumer bears the onus of proving that there has been a breach of the mandatory consumer guarantees and that a manufacturer is entitled to require the consumer to return the goods for assessment to determine the existence and nature of the alleged fault.

The case serves as an important warning to manufacturers that they must be cautious not make a definitive or unequivocal statement as to a consumer's ability or right to receive a repair, refund or replacement for a faulty product in circumstances where the consumer may have a remedy against it, or a supplier under the consumer guarantees.  This caution will particularly needed when denying a consumer a remedy under an express manufacturer's warranty  (e.g. "You are not entitled to a repair/refund/replacement under our manufacturer's warranty"). In light of this case, such a statement should be paired with an acknowledgment of other rights the consumer may have  (e.g. "However you may have rights under the Australian Consumer Law").