Davies v Slee

NCAT Consumer and Commercial|2016-12-07

Reasons for Decision

The applicant commenced proceedings in the Tribunal in September 2016 seeking an order that the respondent pay her the sum of $20,000.00 for misleading and deceptive conduct.
The applicant was one of a number of persons who commenced proceedings against the respondent alleging substantially the same complaint. All the cases brought against the respondent, apart from separate witness statements, relied on the same documentation. The cases against the respondent were heard on the same day.
The respondent operated a business the 'Flawless Makeup Academy' ('FMA') from which she offered makeup courses to members of the public in consideration of the payment of specified fees.
In the evidence before the Tribunal there are a number of allegations made regarding events that occurred in the course of the scholastic year. However the gist of the applicant's case is that she was induced by the respondent's conduct, such conduct being by way of statements or representations, to enrol in a Certificate of Makeup course conducted by the respondent at the FMA for a fee of $8,999.00. I have understood that to be the applicant's primary case. On that basis I do not attach any significance to what is alleged to be conduct by way of representations made during the scholastic year since it has not been established or even suggested that such conduct caused the applicant to change her position in any way, she already having been enrolled in the course at the time of the alleged representation or conduct.

The Australian Consumer Law

In order to be successful the applicant must establish a breach of the Australian Consumer Law
The Australian Consumer Law ('ACL') was accepted as law in New South Wales by amendments made to the Fair Trading Act on 1 January 2011 and thereby applies to the facts relating to this application.
Section 18 of the ACL provides: '(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in Part 3‑1 (which is about unfair practices) limits by implication subsection (1).'
Section 236 of the ACL states: '236 Actions for damages (1) If: (a) a person (the claimant) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention. (2) An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.'

Evidence

The applicant relied upon a bundle of three folders which were marked exhibit A, although not all of the documents in those folders related to her case. The registry of the Tribunal had previously marked the bundles 1, 2 and 4 respectively.
The respondent filed and relied upon: 1. A tender bundle made up of evidence and submissions which was marked exhibit 1 insofar as it contained affidavits or statements; and 2. an authorities Book which contained copies of 14 cases relevant to misleading and deceptive conduct issues.
Exhibit A contained the applicant's statement dated 23 October 2016 at pages 36 - 42 which provides her evidence broken up into a number of sections starting at 'Prior to the enrolment' and then dealing with 'Term One', 'Term 2', 'Term 3', 'Term 4', 'Graduation' and 'After Graduation'.

The applicant's case

The amount claimed by the applicant is $20,000.00 made up of $9,000.00 being the cost of the course, 200 hours (which I understand to relate to work experience hours) at $25.00 per hour, $5,000.00 and lost employment opportunities, $6,000.00.
The applicant's evidence consisted of her statement dated 23 October 2016 which was in exhibit A. The applicant also referred to a report set out in one of the volumes prepared by the applicant and the other applicants. The volume was titled 'Collective Group Report and Supporting Evidence'. The applicant relies on pages 3 -10 of that document and has sworn that the facts and circumstances stated in that material are true and correct.
The applicant's evidence in the Prior to the enrolment section of her statement is that she met with the respondent before registering for the Certificate of Makeup course run by the respondent at the FMA. The applicant states that that the respondent told her: 1. There wasn't anything she didn't cover in the course and although it was bridal and glamour based, students would spend some time on special effects and film and television; 2. due to the TAFE courses being out dated she had purchased this course from Canada so that students would also have an advantage in up-to-date industry trends and an internationally recognised qualification that would allow them to work in the make up industry anywhere in the world; 3. this was also the same curriculum she had studied in Sydney, but she had added more to it to make it better; and 4. students would be given work experience opportunities at magazines and fashion shows.
In the Collective Group Report and Supporting Evidence folder which forms part of Exhibit A the applicant relies on pages 3 -10 in which alleged misleading information by the respondent is alleged as follows: 1. Stating both verbally and in writing that Government courses such as TAFE are over 20 years out of date and that students should enrol in the course at FMA because it is up to date with the current industry making students more employable as their skills and industry knowledge would be up to date; 2. In response to inquiries before enrolling in the course, students were told that this course was identical to the Makeup Technicians (TMT) course in Sydney. Students researched and compared this before enrolling as the school had a good reputation in the industry; 3. Verbally telling several students that the Certificate of Makeup course at FMA was the same course as the TMT course ; 4. informing students that she had purchased the Certificate of Makeup course from the same educational provider as the TMT course; 5. before enrolling in the Certificate of Makeup course students were verbally told on several occasions that after completion of the course their qualifications could be converted over to a Government Accredited Certificate IV of Makeup for a fee of approximately $1000; 6. should students wish to convert their qualification the respondent would provide assistance; 7. students were told that they would be guaranteed employment due to gaining a Certificate IV equivalent and they would be eligible to work on the make-up industry around the world with that qualification; 8. students were told that they would graduate with a Certificate II in business and that the FMA business teacher was an experienced business teacher and a qualified trainer and assessor; 9. the FMA is a Registered Training Organisation 'RTO' and this RTO was Blanche Macdonald Centre 'BMC' in Canada; 10. the course and its contents were purchased from BMC for approximately $8,500 in total for the relevant class; 11. each student was registered under the BMC for a fee of approximately $2,500 prior to class commencing as part of the enrolment fee; 12. prior to graduating students certificates were approved by and sent from BMC and ordered two weeks before graduation; and 13. all work, assessments, exams were sent to unmarked BMC in Canada such work including hardcopies of assessments and exams as well as photos taken on an iPhone or digital camera of practical work students to allow BMC to audit work further to deduct or add to marks based on the assessment.
In her oral evidence before the Tribunal the applicant stated that the respondent told her that the Makeup course was identical to a course taught in Sydney by Make Up Technicians, that it was extra to the TAFE course, that it was fashion and TV based and that the result was equivalent to a Certificate IV, internationally recognized which would enable her to work anywhere in the world.
The applicant stated that she enrolled for the Certificate of Makeup course with FMA based on the statement by the respondent that the Certificate of Makeup course was equivalent to a Certificate IV course, internationally recognized which would enable her to work anywhere in the world.
In answer to my question, the applicant stated that if she hadn't enrolled in the FMA, she would have enrolled in an appropriate course in business management.
The applicant alleges that contrary to the respondent's representations the Certificate of Makeup course was not equivalent to a Certificate IV course and was not internationally recognized and would not enable her to work anywhere in the world.

Concessions in Cross examination

In cross examination the applicant stated that she was aware that the she would not be obtaining a government accredited Certificate or qualification. She also stated that she was told that the course while not associated with the government, it was associated with a Canadian company. The applicant also conceded that FMA was not an accredited RTO, but said that she believed that FMA had an RTO in BMC.

The Respondent's case

The respondent submitted that the course outline covered all relevant subjects and that course was delivered to the applicant. It was also submitted that the applicant did not pay the full enrolment fee and that $4,700.00 remains to be paid by the applicant.
The respondent also points to the fact that the FMA issued a Certificate of Makeup to the applicant on 14 December 2015.
The respondent swore an affidavit dated 17 November 2016 with a number of annexures which are in exhibit 1. In connection with the applicant, the respondent confirms that she met with the applicant on 11 August 2014 and they discussed the FMA Information Pack and the Certificate of Makeup course. The respondent states she said to the applicant: 'We're a private facility, totally independent. We don't have government courses because we've designed it based on industry skills. It allows us to give more skills-focussed training, which we think better sets you up for a career and make up.'

Respondent's Certificate of Assessment and Training

During cross examination by the applicant the respondent was asked if she possessed a Certificate of Assessment and Training. As a result of that question I made an order that the respondent was obliged to provide a copy of her Certificate of Assessment and Training by Friday 23 December 2016. The respondent has not done that. She has filed a statement in the Tribunal that she has lost her certificate and is unable to obtain a replacement. She has also provided affidavits from two of her students who depose that they have in the past seen her Certificate IV in Assessment and Training. I do not accept those affidavits as evidence on the basis that my order requiring the respondent to provide a copy of her Certificate of Assessment and Training by Friday 23 December 2016 did not allow for the affidavits that have been provided.
In the circumstances of the applicant's case under section 18 of the ACL, I do not regard the fact that the respondent has not established her qualification in a documentary way as being relevant. The basis for this position is that there is no allegation by the applicant that the respondent's conduct which caused her to enrol in the Certificate of Makeup course included representations about her qualifications.

Burden of Proof

The applicant is obliged to establish her case on the balance of probabilities. The relevant principles in relation to discharging the burden of proof in civil cases were recently summarised by the New South Wales Court of Appeal in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [55] as follows: '(1) A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist; (2) where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact's existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied; (3) where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and (4) a rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue.'

Relevant principles

In Perpetual Trustee Company Limited & anor v Peter Ishak [2012] NSWSC 697 Brereton J stated at [75 - 76] in connection with section 42 of the Fair Trading Act since repealed, which was in identical terms to section 18 of the ACL: 'Section 42 (like its TPA and ASICA analogues) is not confined to misrepresentations: it is contravened if the acts, omissions, statements and/or silence of the defendant, taken as a whole and considered in light of all relevant circumstances, are misleading or deceptive or are likely to mislead or deceive [Campbell v Backoffice Investments Pty Ltd [2009] HCA 25 ("Campbell"), [102]; (2009) 238 CLR 304; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 ("Butcher"), [104]; (2004) 218 CLR 592]. Conduct is misleading if it induces, or is capable of inducing, error [Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, 198; Rhone-Poulenc Agrochomie SA v UIM Chemical Services Pty Ltd [1986] FCA 218; (1986) 12 FCR 477; Campbell, [25]; Butcher, [111]], and likely to mislead or deceive where there is a real (or not remote) chance or possibility that the conduct will have that effect [Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [1984] FCA 180, [14]; (1984) 2 FCR 82]. Whether conduct has a tendency to lead into error is an objective question of fact, to be determined on the basis of the conduct of the defendant as a whole viewed in the context of all relevant surrounding facts and circumstances [Campbell, [102]; citing Butcher, [109] (McHugh J: where the conduct involves delivery of a document, the effect of the document must be examined in the context of the evidence as a whole, and the court must have regard to all the defendant's conduct in relation to the document, including its preparation and distribution and any statement, action, silence or inaction in connection with it)]. In this exercise, often called "characterization", the subjective impact of the conduct on the plaintiff is irrelevant, the focus being the objective tendency of the conduct to induce an erroneous assumption on the part of a hypothetical individual, but taking into account the respective positions of the parties, including such matters as their knowledge of each other from previous dealings and their respective familiarity with the subject matter [Sutton v AJ Thompson Pty Ltd (In Liq) [1987] FCA 167, [30]; (1987) 73 ALR 233]. The objective nature of this inquiry means that a finding that conduct is misleading or deceptive is not avoided merely because a plaintiff could by proper inquiries have discovered the misleading or deceptive conduct [Butcher, [111]; Henjo Investments Ply Ltd v Collins Marrickville Pty Ltd (No 1) [1988] FCA 40, [40]; (1988) 39 FCR 546 (Lockhart J: it is no answer to say that a plaintiff should have made its own inquiries and that, if it had done so, it would have found out the true position)]. However, this does not create by a side wind an obligation of full disclosure in commercial negotiations [Poseidon Ltd v Adelaide Petroleum NL [1991] FCA 663; (1991) 105 ALR 25, 26; Lam v Ausintel Investments Australia Pty Ltd (1990) 97 FLR 458 ("Lam"), 475]. Nor does it mean that a party to commercial negotiations is obliged to volunteer information that will be of assistance to the decision-making of another, or that will avoid the consequences for another (of equal bargaining power and competence) of careless disregard for its own interests [Miller & Associates Insurance Broking v BMW Australia Finance [2010] HCA 31 ("Miller v BMW"), [22]; (2010) 241 CLR 357]. A party that itself independently forms an erroneous impression [Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc [1993] FCA 630; (1992) 38 FCR 1] or leaps to its own erroneous conclusion [Miller v BMW] is not to be regarded as misled, and failure to make reasonable inquiries may be a relevant circumstance in assessing whether a non-disclosure is correctly characterised as misleading [Miller v BMW, [91]].'
In Watson v Foxman (1995) 49 NSWLR 315 McLelland CJ in Eq stated at 318-319 some relevant observations regarding establishing misleading and deceptive conduct by spoken words, namely: Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not … attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712.'

Consideration of the evidence

Apart from her statement which has been referred to and her evidence before the Tribunal, the applicant's case against the respondent is based on a collaboration of all of the persons who have brought similar or identical applications against the respondent arising out of their enrolment in the Certificate of Makeup course at FMA in 2015. In particular I refer to the Collective Group Report and Supporting Evidence folder which forms part of Exhibit A and pages 3 -10.
As stated by McLelland CJ in Eq in Watson v Foxman: 'Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances'
In these proceedings because the applicant is self-represented the statements alleged to have been made by the respondent to the applicant have been identified in a general way. I do not accept that the applicant is entitled to rely upon what the respondent may have said to other persons or what all of the applicants have formulated as a common set of allegations. In that regard the I refer to pages 3 -10 of the Collective Group Report and Supporting Evidence folder which forms part of Exhibit A which has the applicant's name printed on page 10. As a result I do not accept that the respondent made all of the representations to the applicant as referred to in [21] of these Reasons, unless the applicant has provided the relevant evidence in her statement or in her evidence before the Tribunal.
The statements by the respondent upon which the applicant relies were made at the meeting between the parties which the respondent states occurred on 11 August 2014.
The respondent's account of the meeting is not detailed. All she states is that she stated to the applicant: 'We are a private facility, totally independent. We don't have government courses because we've designed it based on industry skills. It allows us to give more skills focussed training, which we think better sets you up for a career in make up.'
The applicant's evidence is that more than that was said at the meeting.

Were the statements relied upon by the applicant in fact made

It is necessary for me to determine whether the statements relied upon by the applicant as for enrolling in the course were in fact made by the respondent at the 11 August 2014 meeting and if so whether they were misleading or deceptive or likely to mislead or deceive. I will deal with each alleged statement in turn as referred to in [23] above.
Certificate of Makeup course was equivalent to a Certificate IV course
I am persuaded that the respondent told the applicant that the Certificate of Makeup course would be the equivalent of a 'Certificate IV' in make up since the respondent has stated in her evidence that she created the Certificate of Makeup course as a non-government equivalent of the Certificate IV in makeup course, but which added things which she thought the government certificate lacked. The respondent also stated in the Tribunal that the course was equivalent to a Certificate IV in makeup, the closest non-government comparable course.
Certificate of Makeup course was internationally recognized which would enable applicant to work anywhere in the world
I find on the competing evidence between the parties that the respondent did state to the applicant that the Certificate of Makeup course was internationally recognized which would enable applicant to work anywhere in the world. I make this finding because the applicant has the greater recollection of what was said at the 11 August 2014 meeting. The respondent has recalled very little of what she said at that meeting.
It is not credible that the statement that the respondent recalls having made was all that was said at the meeting with the applicant. About the Certificate of Makeup course. In the absence of any evidence contradicting what the applicant states was said at the meeting, I accept her evidence and do so on the basis that all of the evidence of the meeting induces in my mind an actual persuasion that the respondent told the applicant the Certificate of Makeup course was internationally recognized which would enable the applicant to work anywhere in the world and the probabilities of the respondent having said those words were greater than the possibility that she did not. I have had regard to paragraph 163(c) of the respondent's 17 November affidavit in reaching this conclusion. I find that evidence does not have relevance in the context of this statement since a statement that a qualification will enables a person to work is quite different to a statement that a qualification that will guarantee employment.
Based on the findings above I further that the applicant enrolled in the FMA to undertake the Certificate of Makeup course on the basis of the conduct of the respondent in making the statements referred to in [23] above.
I also find that the statements that I have found were made by the respondent were made in trade or commerce. It was not in dispute that the FMA operated by the respondent was a business being operated for profit in the training and education sector of the economy.
Was the respondent's conduct misleading and deceptive or likely to mislead or deceive
The next issue that I must resolve is whether the conduct of the respondent in making the statements or representations to the applicant was misleading and deceptive or likely to mislead or deceive.
I find that the Certificate of Makeup course was the equivalent of a Certificate IV course and that the applicant knew before enrolling in the course that she would not be obtaining a government accredited Certificate or qualification. I accept the respondent's evidence at paragraph 13 of her statement that she created the Certificate of Makeup as a non-government equivalent of the Certificate IV in makeup but added things which she thought the government certificate lacked. The respondent's statement that the Certificate of Makeup course was the equivalent of a Certificate IV course was not misleading or deceptive.
On the evidence before the Tribunal I find that the respondent's statement that that the Certificate of Makeup course was internationally recognized which would enable applicant to work anywhere in the world was misleading as it induced error and was capable of inducing error. The evidence before the Tribunal makes it clear to me that it is incorrect to say that the Certificate of Makeup is internationally recognized and would enable an applicant to seek and obtain work overseas.
At page 55 bundle 1 of exhibit A, a student of FMA states in connection with the Certificate Makeup Course: 'I know you like to use the term industry recognised but exactly where in the industry recognises our "qualification" because david jones and myer don't ! I paid 9K for a course and im not qualified to apply for a job on a make up counter hours or no hours.'
I infer from this evidence that the course was not completely recognized in Australia, let alone internationally.
I find that the respondents statements or representations that the Certificate of Makeup course was internationally recognized and would enable applicant to work anywhere in the world constituted conduct for the purposes of section 18 of the ACL which was misleading and deceptive because it was capable of inducing an error, in this case that the applicant would at the conclusion of the course, if passed, gain an internationally recognised qualification that would allow her to work in the makeup industry anywhere in the world. The respondent's statements or representations, as I have found, also constituted conduct for the purposes of section 18 of the ACL which was likely to mislead or deceive as there was, I find, a real chance or possibility that the conduct referred to would have the effect of inducing an error of the type referred to above.
I have regard to the evidence in exhibit 1 from other students who were enrolled at FMA. I do not find their evidence to be of assistance in resolving the issues in these proceedings as they do not have any consequence as to the respondent's conduct at the 11 August 2014 meeting with the applicant.
I accept the applicant's evidence that if the respondent's conduct as found did not occur, it is likely that she would have done something different, namely enrolled in an appropriate course in business management.
I find that the applicant has suffered loss because of the respondent's conduct contravened section 18 of the ACL which is found in Chapter 2 of the ACL and is thereby entitled to recover the amount of such loss pursuant to section 236 of the ACL. Section 78N(a) of the Act allows me to make a monetary order in the applicant's favour.
The applicant has provided satisfactory evidence that she has paid all money due to the FMA, such evidence being at page 42 of exhibit A in the form of a letter from Debit success which is I find conclusive evidence of the payments made by her.
I will find for the applicant in the sum of $8,999.00 paid by her to the respondent as the enrolment fee for the Certificate of Makeup course on the basis that but for the conduct of the respondent it was highly unlikely that she would have enrolled for the course.
The applicant has also claimed the sum of $11,000.00 as the loss and damage that has arisen because of the conduct of the respondent. She claims the sum of $5,000.00 being 200 hours at $25.00 per hour in connection with the time she states that she spent doing work experience. A further sum of $6,000.00 is also claimed for los of employment opportunities.
I reject these aspects of the claim. The applicant has not established that she in fact spent 200 hours in carrying out work experience and further has brought no evidence to show that if she hadn't undertaken the Certificate of Makeup course she would have worked the 200 hours at a pay rate 25.00 per hour. In fact the applicant's own evidence is that if she hadn't undertaken the course she would have enrolled in a business management course. In those circumstances, it is not clear that the applicant would have had 200 hours free time to undertake work.
The loss of employment claim has not been explained at all and there is no evidence or submission about how it has been calculated.
I reject the $6,000.00 claim on the basis that it is speculative and not substantiated by any evidence at all. D Goldstein Senior Member Civil and Administrative Tribunal of New South Wales 18 April 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 June 2017

Trade Practices Act 1974(Cth)

At a glance

Court

Decision date

Source

Judgment (13 paragraphs)

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Legislation Cited (1)

Cases Cited (25)

Cited By (1)