This is an application made by Ms Zoë Daly (Applicant) against Trudy Gilbert t/as Elite Introductions (First Respondent) arising out of introduction services provided by the First Respondent to the Applicant in 2016.
The Tribunal has jurisdiction pursuant to Part 6A of the Fair Trading Act 1987 (NSW) and more particularly pursuant to s 79F(1)(a) of that Act.
At the hearing before the Tribunal on 7 July 2017, the Applicant appeared in person and Ms Lisa Haynes, a senior employee of Elite Introductions pursuant to an authority provided by Ms Trudy Gilbert trading as Elite Introductions, appeared for the Respondent.
As a result of the hearing and a review of the parties' respective documents, the Tribunal has joined Elite Introductions International Pty Ltd ABN 64 116 607 642 as a Second Respondent in this application as it appears to be the proper entity with which the Applicant has contracted. The First Respondent is the founder and director of the Second Respondent.
[2]
Background
In October 206 the Applicant contacted the First Respondent to consider retaining the Second Respondent's services in order meet a partner.
On 7 November 2016 the Applicant met with the First Respondent. After an hour meeting, the Applicant said she was not ready to sign up that day. But that day she did enter into a contract for introduction services with the Second Respondent and paid the 12 month service cost of $4,995 (fee).
In early December the First Respondent arranged an introduction for the Applicant with a male which she had selected from the Second Respondent's database.
After the introduction, the Applicant contacted the First Respondent by telephone and by email claiming for a range of reasons that the male was not suitable (and in some respects wholly inappropriate), and that as a result she had lost confidence in the Respondents' ability to provide the introduction services that she sought. She then asked for a refund. The Respondents declined.
The Applicant and the Respondents were unable to resolve this dispute. No further introductions to prospective male candidates were arranged by the Respondents for the Applicant
In February 2017 the Applicant notified Fair Trading of the dispute but it was unable to achieve a resolution.
On 8 March 2017 the Applicant filed the Application with the Tribunal.
[3]
The Application
The Application provides a fairly detailed chronology of events and concerns that arose with the Applicant both at the time of contracting and after her first meeting with the male candidate provided from the Second Respondent's database.
From a review of the Application and Applicant's documents, certain specific claims emerge:
1. in breach of s 18 of the Australian Consumer Law, the Respondents engaged in misleading and deceptive conduct by inducing the Applicant to enter into the contract on 7 November 2016 by claiming the Respondents had "amazing men who can't wait until the new year" when they did not, and in spite of the Applicant's reluctance;
2. in breach of s 21 of the Australian Consumer Law, the Respondents engaged in unconscionable conduct or placed the Respondents under undue influence or pressure or used unfair tactics in respect of the circumstances in which the Applicant was induced to enter into the contract with the Respondents and pay her fee; and
3. in breach of s 60 or s 61 of the Australian Consumer Law, whether the services provided by the Respondents to the Applicant pursuant to the contract were provided with due care and skill and were reasonably fit for purpose.
[4]
The Applicant's evidence
The Applicant is an online coach and fitness expert. She has significant social media presence in fitness coaching, nutrition and weight training. She has competed in, and been successful in, a range of international fitness championships.
In October 2016 she sought the Respondents' services to meet a potential partner. She says that she chose the Respondents as opposed to a regular or free dating service because she wanted to meet like-minded, ambitious, successful, professional men.
She had an introductory telephone conversation with the First Respondent, completed the Second Respondent's online pre-interview questionnaire and then met the First Respondent at the Respondents' offices at 1 Bligh Street, Sydney on 7 November 2016 for about an hour. She said she was not ready to sign up that day but had planned on signing up sometime in 2017 all going well. Rather, her intention was to ascertain the precise services that the Respondents provided and make a decision in the New Year.
After about a 1 hour interview, the Applicant says that the First Respondent pressed her to sign up (enter a contract) and pay the fee. When the Applicant prevaricated and said she would consider this and make a decision in the New Year, the First Respondent said: "Oh no, these men can't wait, they won't be here in the New Year".
The Applicant said that she was in a vulnerable state and that she was placed under pressure. So she signed up and paid the fee on her credit card 'even though it did not feel right'. She also said that 'Trudy did not give me time to read the contract', there was no cooling-off period and the First Respondent did not supply the Applicant with an executed copy of her contract afterwards.
The Applicant said she gave a fairly clear specification of the type of male to whom she was seeking an introduction. On 25 November 2016 the First Respondent contacted the Applicant and advised her that she had provided the Applicant's contact details to a male candidate.
In early December 2016 the Applicant and the male candidate had an introductory meeting of approximately 2 hours.
The next day, the Applicant telephoned the First Respondent protesting at the selection of the candidate, his values and inappropriateness to the specification provided by the Applicant. She sought a refund of her fee. In particular the Applicant said that the candidate:
1. spoke about himself the whole time;
2. was 40 but looked much older when the Applicant had specified 32-38 years;
3. was very negative;
4. was not passionate about his job;
5. did not speak about his family and was actually ashamed of them;
6. offended the Applicant in references to her car;
7. showed no interest in the Applicant;
8. spoke about previous introductions and how terrible they were; and
9. advised the Applicant that he was going overseas from 22 December 2016 until February 2017 and would therefore not be available until after that time.
The Applicant described the meeting in her evidence as 'not at all pleasant' and his imminent departure overseas only confirmed in the Applicant's mind that she would have been better waiting until the New Year.
In email and telephone correspondence since that time, the Applicant and the First Respondent have largely agreed to differ. The Applicant has sought to disengage and has sought a refund of her fee. The First Respondent initially said that she would consider a refund after the 12 month period if the Applicant remained unsatisfied with the services provided by the Respondents. There was an attempt to renegotiate or vary the terms of the contract but the parties have again failed to agree on those terms.
There have been no further dates or meetings with male candidates and following the referral to Fair Trading and then the Tribunal, the contract remains unfulfilled and in limbo.
[5]
Contract
The Second Respondent's contract is a 2 page document which appears on the Second Respondent's website.
Relevantly it states:
"Elite Introductions International Pty Ltd is an exclusive private matchmaking service for professionals, executives and successful business owners. All potential candidates must attend an interview and are carefully screened before being accepted as members in order to ensure that the agency maintains a certain standard in matching successful, attractive, professional, educated, well groomed men and women."
It further stated it was by invitation only and it was offered to "exceptional individuals" who embody the qualities of the Respondents' members. These qualities included being accomplished, financially independent, good company, interesting with varied interests, healthy non‑smokers with a good work-life balance and who are relationship ready.
The price of a 12 month membership was $4,995 including GST.
Relevantly, clause 6 of the Respondents' Terms and Conditions stated:
"I acknowledge that EII (Second Respondent) will use its reasonable endeavours to provide me with compatible introductions and if I change my mind about using the EII's services or meet a partner outside of EII, I am not entitled to terminate this contract or to request a refund in order to maximise the opportunity for introduction. I agree and acknowledge that liability of the EII in respect of any breach by it under these terms and conditions is limited to re‑supplying the services again."
[6]
The Respondents' evidence
Ms Haynes appeared for the Respondents. Early in the hearing, the Applicant said that a direction had been made by the Tribunal on a previous occasion that the First Respondent should appear in person for the hearing of the Application.
No such direction could be found on the Tribunal's file. However the failure of the First Respondent to appear in person in circumstances where she had conduct of a number of telephone calls and interactions with the Applicant about the contract and about the services provided by the Respondents limited the evidentiary response that the Respondents could bring to some aspects of the Applicant's claim.
The First Respondent is, on the Second Respondent's website, referred to as 'Australia's Millionaire Matchmaker' and a 'Relationships Expert'. She has appeared in the Real Housewives of Melbourne. She has recently written a book entitled '49 Secrets of an Elite Matchmaker'.
The Respondents say that on 7 November 2016 the First Respondent interviewed the Applicant and offered her membership on the basis that the First Respondent was confident that the Applicant was compatible with the Second Respondent's database.
The First Respondent said that as a matter of policy she does not meet with people until they are ready to join in order to avoid wasting time. The First Respondent said that when she met the Applicant she had a couple of strong potential candidates in mind who were available before the Christmas break, and that her interview with the Applicant only validated those assumptions.
The First Respondent then went through the service agreement with the Applicant and the Applicant signed the agreement "with full understanding" and had an opportunity to clarify any terms and conditions of the agreement. The Applicant then paid by giving the First Respondent her credit card number and, allowing 4 days to process that, the Respondents would be able to organise her first introduction within 2 weeks.
On 22 November the First Respondent briefed the Applicant on a prospective male candidate and on 25 November 2016 informed the Applicant that the male candidate had been given her contact details and would make contact.
The Respondents state that only after the meeting with the male candidate on about 5 December 2016 did the Applicant seek a refund; that it was predicated upon one introduction to a male candidate that the Applicant subjectively considered unsuitable; and that the Applicant had unreasonably formed the view that not even a year of introductions by the Respondents could lead to a better outcome.
Ms Haynes for the Respondent stated it was usual in a 12 month membership period for a member to receive about 8‑10 introductions, or one about every 5-6 weeks.
[7]
Consideration
The market for introduction services in New South Wales predominantly operates between consumers and dating agencies or consumers and websites. Unlike some other states, it is not specifically regulated other than via the Australian Consumer Law. By contrast, Queensland in 2001 enacted the Introduction Agents Act which covers a range of detailed issues including licensing, disclosure statements, client agreements, cooling off periods, termination and refunds. Victoria had passed similar legislation in 1997.
The Tribunal acknowledges that the Applicant, despite having a public presence and a strong social media profile, would naturally feel vulnerable at the point of contracting with the Respondents. This came through strongly in the Applicant's evidence.
While New South Wales has no specific legislation, it has case law on this topic: Commissioner for Consumer Affairs v. Bona Fide Consultants Pty Ltd NSWSC, 28 March 1994, unreported; and Director-General of the Department of Fair Trading v. Joanna Monaghan and Anor [2003] NSWSC 1099.
In the latter case, Bell J. acknowledged emotional vulnerability … 'as an inexact concept. However it does seem to me that some clients of introduction agencies are likely to be persons who are vulnerable to pressure sales techniques because of an acute awareness of their loneliness and that such individuals may be disadvantaged in dealing with the operator of an introduction service.'
In light of the evidence and the disparity between the Applicant's evidence at the interview on 7 November 2016 at the Respondents' premises and the First Respondent's account - which could not be tested because the First Respondent did not attend the hearing - the Tribunal accepts the evidence of the Applicant in respect of misleading and deceptive statements and pressure sales techniques made to the Applicant to induce her to enter a contract there and then and to pay the full 12 month fee on the spot.
It is unfortunate that the Second Respondent's contract does not contain a cooling off period as is required in a range of similar consumer contracts.
Legislation in other states and an analysis of NSW cases suggests that there are a number of factors that gravitate against the Applicant being in a situation of equal bargaining power with the Respondents at the time that the Applicant entered into the contract with the Second Respondent. These factors also support an assertion of unconscionable conduct by the Respondents, and include:
1. the use of pressure sales techniques to get the Applicant to sign a contract with the Second Respondent;
2. the absence of any cooling off period;
3. the structuring of a contract so that all fees were paid upfront for a lengthy membership period (12 months) rather than, say, quarterly;
4. no provision regarding refunds if the applicant was dissatisfied with any aspect of the services during the membership period;
5. the refusal to embark upon any part of the contract services until the fee was paid in full; and
6. the making of inducements to the Applicant to have her enter the Second Respondent's contract in terms that either were misleading or deceptive or unconscionable or that were not true or that couldn't be objectively tested ("Oh no, these men can't wait, they won't be here in the New Year").
An online review of the Second Respondent's business attached to the Application dated 8 March 2017 shows a number of poor consumer ratings for the Second Respondent's business. Of 37 reviews, 18 were 'excellent', 4 were 'good' and 15 were 'terrible'. None were either 'okay' or 'bad', the middling categories. This suggests a certain polarity in a consumer's reaction to the type of services offered by the Respondents based on their individual responses. Unsurprisingly only the 15 'terrible' reviews were attached to the Application.
The contract is now practically suspended. The Applicant has paid the fee and has had a single introduction. It is now clear from email correspondence between the Applicant and the First Respondent that the necessary level of trust required to maintain a professional relationship no longer exists.
The Tribunal finds that the Respondents indulged in misleading and deceptive conduct and in unconscionable conduct in the circumstances in which the Respondents induced the Applicant to sign up to the contract at the Second Respondent's premises on 7 November 2016.
For the above reasons and in practical terms the balance of the contract cannot be carried out. The requisite level of trust between the Applicant and the Respondents does not permit this. Nevertheless, the Respondents have undertaken a range of preliminary tasks and soundings including interviews and selection processes on behalf of the Applicant notwithstanding an unsuccessful outcome.
The Tribunal's remedies for consumer claims include an order for a respondent to pay (or repay) a sum to a consumer which it regards in all the circumstances as just and equitable: see s 79N Fair Trading Act 1987. That sum may be all or part of the amount paid by the consumer for services.
Although it is hard to judge the precise sum, the Tribunal considers that on all the evidence presented to it the Respondents should repay to the Applicant the sum of $4,000 of the fee paid to it under the contract, or approximately 80% of the fee. The Applicant only received one of 8-10 prospective introductions.
The balance of the fee ($995) should be retained by the Respondents for preliminary interview, administrative and research work undertaken by the Respondents on the Applicant's behalf and which resulted in the sole introduction that the First Respondent arranged for the Applicant on 5 December 2016.
S A McDonald
Senior Member
Civil and Administrative Tribunal of NSW
31 August 2017
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
[8]
Amendments
05 October 2017 - replacement for restricted decision that has been removed
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Decision last updated: 05 October 2017