My Fashion Republic Pty Ltd t/as Cosette v Pennisi

NCAT Appeal Panel|2024-08-26

Solicitors: Ashurst Australia (Appellant) Respondent (self-represented) File Number(s): 2024/00216759 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: [2023] NSWCATCD Date of Decision: 14 May 2024 Before: G K Burton SC, Senior Member File Number(s): 2024/00003013

Summary

This the appellant's appeal from a decision of the Consumer and Commercial Division of the Tribunal (Tribunal) of 14 May 2024 (Decision).
The respondent had purchased a St Laurent Lou Camera Bag (Camera Bag) "in quilted leather with bronze hardware": Decision, at [3], for $1,672.00.
After reading media reports of "super fakes" allegedly being sold by the appellant, the respondent had the Camera Bag checked by an authenticator, Luxury Authentication Australia Pty Ltd (LAA): Decision, at [4].
After LAA said that the Camera Bag was not authentic, and after the appellant refused to refund the purchase price of the Camera Bag to the respondent, the respondent commenced proceedings in the Tribunal.

Appellant's materials before the Appeal Panel

The appellant provided the following materials to the Appeal Panel.

Notice of Appeal

The Notice of Appeal invokes eight grounds of appeal. These are as follows: 1. the Tribunal erred in law by finding that the appellant breached the consumer guarantee set out s 54 of the Australian Consumer Law (NSW) (ACL) by "the provision of a certificate of authenticity that could not, without more, be relied on, whether or not the goods were authentic", in circumstances where: 1. the relevant issue in dispute is whether or not the Camera Bag purchased by the respondent is authentic or not, and not whether or not the certificate of authenticity provided with the handbag could be relied on; and 2. the appellant maintained that the Camera Bag supplied to the applicant was, and is, authentic. 1. the Tribunal erred in law by finding that the appellant breached the consumer guarantee set out in s 54 of the ACL by finding that the Camera Bag supplied was not of acceptable quality "because of the inherent risk that they were not authentic since a reliable measure of authenticity was not supplied for the purchasing consumer's comfort"; 2. the Tribunal erred in law by making a finding that the appellant's evidence amounted to a disavowal of the reliability of the certificate of authenticity the appellant had provided to the respondent; 3. the Tribunal erred in law by finding that there was sufficient evidence to establish the respondent's claim that the Camera Bag supplied to the respondent by the appellant was not authentic; 4. the Tribunal erred in law by drawing an adverse inference against the appellant for not requesting the respondent's witnesses to be available for cross-examination; 5. the Tribunal erred in law by characterising the respondent's authentication certificates as opinions of the organisations, capable of discharging the respondent's burden of proof; 6. the Tribunal erred in law by finding that the "the evidential onus can shift with each party's evidence"; 7. the Tribunal erred in law by not applying a mandatory legal requirement by making orders under Div 3 Pt 6A of the Fair Trading Act 1987 (NSW) (FT Act) without consideration of whether it was satisfied that such order would be "fair and equitable to all the parties to the claim", as required by s 79U(1) of the FT Act.

Other documents

That said, the respondent relied on two bundles of materials respectively filed on 24 June 2024 (40 pages) and 6 August 2024 (108 pages). These documents included detailed and extensive submissions on the appellant's grounds of appeal. We will refer to these below.
The respondent also filed new evidence.

New evidence

It is convenient at this point to consider the application of each party to rely on materials that were not before the Tribunal.
The appellant sought to rely on a statutory declaration of its Chief Financial Officer, Mr David Solimena. The purpose of the affidavit, as Mr Solimena explains at [4], was to demonstrate the unreliability of third party authentication services. To that end, he instructed an employee to purchase luxury handbags from primary market retail stores and seek third party authentication opinions on these goods which are known (based on their store of origin) to be genuine.
By way of example, he directed the employee to purchase a Gucci handbag from Gucci Sydney DFS Galleria and seek an authentication opinion on it from a third-party authenticator who said: had the opportunity to evaluate the item in question and find this item to be Counterfeit with the images provided. For the following reasons, we have determined this item does not fall within brand compliance:
The respondent sought to rely on 10 pages of additional evidence grouped under the hearing "Further evidence from the respondent". Principally, these documents were said to address the following submissions of the respondent namely: 1. The main argument that the Appellant is holding onto is that third party authentication services cannot be trusted and they are unreliable however, their CEO Pierre Paoli and parent company My Fashion Republic have invested in creating their own authentication service to not only authenticate bags but also watches, jewellery, wine and liquors: various screenshots from the web and news articles below [website omitted]: …The evidence presented indicates that My Fashion Republic has not only previously utilised third-party authentication services for their products but also demonstrated a significant belief in such services by investing in the creation of their own authentication system. Their website explicitly states, "merchants are dealing with customers who are aware of the counterfeiting problem. Having a third-party service is reassuring." It is perplexing and inconsistent for My Fashion Republic to advocate for the use of third-party authentication services for others while simultaneously denying consumers, who have been misled by their deceptive conduct, the right to obtain a refund when exercising their rights under the Australian Consumer Law (ACL). 2. The Appellant has a history of relying on third party authenticators even assuring consumers that they could rely on them 3 years ago when first being accused of selling counterfeit products, this demonstrates a reliance on the certificates until, they could no longer serve them to hid their unfair practices under Part 3-1.
As for the new evidence sought to be relied on by the appellant, cl 12(3) of Sch 4 of the NCAT Act relevantly provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal if it satisfied that the appellant may have suffered a substantial miscarriage of justice "because significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)".
The legal principle here is straightforward, and has been followed in countless Appeal Panel decisions. The test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23].
To take a recent example, in Fam v Assassin Pert Control Pty Ltd t/as Assassin Pest Control [2024] NSWCATAP 106 the Appeal Panel stated at [19]: 19 Some of the materials were not before the Tribunal. As the Appeal Panel stated in Chapman v McLaughin [2016] NSWCATAP 212 at [37]: … The point of limiting fresh evidence to that which was not reasonably available at the first hearing is to ensure finality of proceedings. This means that it is in the interests of justice for parties to put forward all of their evidence as best they can at the hearing, as otherwise, if they were free to add fresh evidence after a case was decided, the proceedings would run the risk of not being finalised until after many hearings. This principle is of particular importance in the Tribunal because of the provisions of s 36 of the Act. That section requires the Tribunal to proceed to decide cases justly, quickly and cheaply.
We were not persuaded that the appellant satisfies the Al-Daouk test, and therefore we will have no regard to materials that were not before the Tribunal.
In any event, the additional "authenticator evidence" sought to be relied on by the appellant has precisely the same issues as the respondent's authentication evidence in this case; that being there is no stated author.
As for the new materials sought to be relied on by the respondent, there is no proper basis why those materials should be read by the Appeal Panel, as we are determining whether there was an error in the Decision by reference to the materials before the Tribunal at the time of the hearing, not by reference to materials that were never before the Tribunal.

Nature of an appeal

Section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which appeals from decisions of the Tribunal may be brought. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s 80(2)(b)).

A question of law

In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, without listing exhaustively possible questions of law, the Appeal Panel considered the requirements for establishing an error of law giving rise to an appeal as of right. These included: 1. whether there has been a failure to provide proper reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law had been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account relevant (that is, mandatory) considerations; 6. whether the Tribunal took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; 8. whether the decision was so unreasonable that no reasonable decision-maker would make it.

Leave to appeal

Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded at 84 that: Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) Issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the Act. An appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].

The Decision

It is appropriate to briefly summarise the Decision.
At [3] to [15] the Tribunal sets out the "Background and Issues, [and] Procedure].
At [3] the Decision records that the respondent purchased online from the appellant the Camera Bag at a cost of $1,672. With the Camera Bag was a certificate of authenticity.
The Tribunal then states at [4]: After reading media reports of "super fakes" allegedly being sold by the respondent, the applicant had the bag checked by another authenticator, Luxury Authentication Australia PL (LA), to whom she provided (as identified in the LA report dated 15 August 2023) photographs of the bag with close-ups of engraving and hardware symbols and of accompanying identification including labels, cards and the original certificate of authenticity that came with the bag. The QR code for the original certificate on search was found no longer to be accessible; the respondent said that there was a time limit on the availability of the certificate online. The third party report obtained from LA dated 15 August 2023 said that the bag was not authentic. This was the primary report relied upon and is the report primarily described and referred to below.
After summarising the procedural background to the matter and the course of the Tribunal hearing the Tribunal notes at [13]: There was no objective documentation to support the description in the CFO's witness statement of the authenticity of the verification process to enable the strength of that process to be tested and assessed.
At [16] to [24], the Tribunal then sets out and discusses the relevant legislation, legal principles and some caselaw.
At [25] to [27], the Tribunal considers whether it had jurisdiction on the basis the respondent's claim was brought within three years "after the cause of action giving rise to the claim first accrued". The Tribunal found it had. That decision was correct and neither party has criticised it.
The Tribunal then referred to the appellant's submission that the respondent had failed to prove that the goods were not authentic, noting the respondent's submission (at [28]) that: The third party reports that the goods were not authentic, which was the applicant's primary evidence, did not qualify as expert opinion under general law principles or under the Tribunal's requirements for an expert report. The author within the umbrella organisation who made the assessment of authenticity did not have revealed in the organisation's report his or her identity or qualifications. There was inadequate reasoning for the report's conclusion. As a consequence, the reports should be given no weight and the respondent in effect was not required to go into evidence.
The Tribunal then refers to "the present LA report" which was a refence to a document titled "Statement of Non-Authenticity" dated 29 November 2023, issued by LAA. The contents of this document are set out below.
The Tribunal then states at [33]: Further, while the actual authenticator was not identified or his or her qualifications described in detail, the organisation who adopted the assessment as its opinion said that all its appraisers were professional brand specific luxury goods authenticators with knowledge and experience gained from years of collecting, selling and authenticating branded luxury goods. The authenticator entity was said to be independent of the brands with which it dealt. Of the particular authenticator the report said: Our authenticator for this item is a professional luxury goods authenticator with over 10 years' experience authenticating luxury brands, including Saint Laurent.
The Tribunal then refers to what it describes as the "LegitGrails report" noting that: 34 The LegitGrails report was briefer but indicated the following bases for the conclusion that the bag was a fake: the text formatting of the item did not match the authenticator's database; the main problem was that the wrong fonts, font weights and spacing were used; the logo and other identified text did not check out, and this was particularly noticeable in the inside label. 35 The LegitGrails report did not identify an authenticator who did the assessment that it adopted or speak of qualifications but the conclusions were substantially similar to some of the matters identified in the LA report.
The Tribunal then states [at 36] that the appellant: chose not to notify that the assessor or the principal of the company that adopted the assessment in the LA report (or the LegitGrails report) was to attend for cross-examination and also chose not to provide its own expert report. As already said, the respondent chose not to rely on the original third party assessment of authenticity that it had supplied with the goods since it now considered such assessments unreliable and preferred a supply chain verification. It did not deny that it had retained the original certificate (the CFO said he did not know) and did not put it into evidence.
The Tribunal then states at [37] that: The [appellant's] critique in the CFO's statutory declaration that critiqued the [respondent's] two reports itself suffered from a lack of sufficient identification of qualifications and was not independent of a party.
In those circumstances, the Tribunal concluded at [38]: In those circumstances, in my view there was sufficient evidence to establish the applicant's claim of lack of authenticity in the absence of contrary material. While non-compliance with all aspects of the expert witness code reduces the weight of evidence, in the presence of the other matters just identified and in the absence of request for cross-examination, in this case the qualifications were sufficiently stated and the reasons sufficiently provided not to apply a significant discount on weight. (emphasis added)
The Tribunal then stated at [39] to 42] that that conclusion was not diminished by the terms (that is, disclaimers) on which the authentication reports were provided on which the appellant relied.
After discussing the item number of the relevant invoice of the appellant to the respondent, the Tribunal states at [46]: Even if I accepted that the relevant numeral was a 6, in my view it did not do the work that the respondent sought for it to do and I would have reached the same conclusion as I have just reached, namely, the applicant discharged her ultimate burden of proof.
After discussing the principles relevant to s 54 of the ACL, the Tribunal states at [48]: On the principles discussed above, provision of goods that were on the evidence not authentic - an intrinsic and important characteristic - constitutes a major failure on an objective assessment. It is a clear inference from the evidence that the goods would not have been purchased for the high price paid, or at all, if they were not the genuine brand. There was no challenge to the consequence of the goods not being authentic, only to whether or not they had been established not to be authentic.
The Tribunal then states: 49 On the principles discussed above, the rejection period for major failure, and the concomitant right to claim a refund, lasted until a reasonable time after the [respondent] received a third party report on lack of authenticity. At that point, which was when the [respondent] promptly sought a return and refund, the breach of consumer guarantee, its cause and its consequences were clear to the [respondent]. 50 On the evidence there emerged a potentially more direct path to the same outcome. As said earlier, the CFO said that the [appellant] provided the certificate of authenticity, at the time the goods were purchased and with the goods, to provide "comfort" to the [respondent]. The [appellant] no longer relied upon the certificate because it considered it a less reliable means of providing such comfort than a chain of supply provenance through reputable suppliers authorised by the ultimate manufacturer. 51 In providing the certification the [appellant] effectively warranted that the [respondent] could rely upon the certificate as proof of authenticity of the goods purchased. By disavowing the reliability of the certificate the [appellant] breached that warranty.
The Tribunal concludes as follows: 53 One can objectively conclude that a reasonable consumer would not regard goods as of acceptable quality if a certificate of authenticity from a third party provided as an intrinsic part of the supplied goods was later resiled from by the supplier (by the supplier's own statement) as no longer regarded as having ever been a reliable measure of authenticity, whether or not the goods were in fact authentic. Taking into account (as is permitted) the facts now known about the [appellant's] attitude to the reliability of the certificate of authenticity, it can be concluded that the goods were not of acceptable quality because of the inherent risk that they were not authentic since a reliable measure of authenticity was not supplied for the purchasing consumer's comfort: Vautin at [143]-[150] , citing in particular, among other authority, Medtel PL v Courtney (2003) 130 FCR 182 (FCAFC), Protec Pacific PL v Steuler Services GmBH & Co KG [2014] VSCA 338 and APS Satellite PL (formerly known as "SkyMesh PL") v Ipstar Australia PL [2016] NSWSC 1898. 54 Accordingly, the consumer guarantee was breached by the provision of a certificate of authenticity that could not, without more, be relied upon, whether or not the goods themselves were or were not authentic. 55 On the principles discussed above, provision of an unreliable certificate of authenticity from a third party constitutes a major failure. Objectively assessed, such unreliability was intrinsic and important and the goods would not have been purchased without a certificate that the supplier itself stood by, used and put forward as a reliable assessment of authenticity of the goods supplied

Consideration

As can be seen, a variety of grounds of appeal were raised. These can be divided into three groups which we list in order of importance as follows: 1. appeal grounds which relate to the Tribunal's finding that the appellant had breached the consume guarantee in s 54 of the ACL (being appeal grounds 1, 2 and 3); 2. appeal grounds which relate to whether the applicant had proved that the Camera Bag was not authentic (being appeal grounds 4 and 6); 3. other grounds, being: 1. ground 5, namely that the Tribunal erred in law by drawing an adverse inference against the appellant for not requesting the respondent's witnesses to be available for cross-examination; 2. ground 7, namely that the Tribunal erred in law by finding that the "the evidential onus can shift with each party's evidence"; 3. ground 8, namely that the Tribunal erred in law by not applying a mandatory legal requirement by making orders under Div 3 Pt 6A FT Act without consideration of whether it was satisfied that such order would be "fair and equitable to all the parties to the claim", as required by s 79U(1) of the that Act.

Appeal grounds 1, 2 and 3

As noted, these appeal grounds relate to the Tribunal's findings of the breach of the consumer guarantee in s 54 of the ACL.
We paraphrase the Tribunal's reasoning as follows: 47. Lack of authenticity is a distinct and fundamental defect in the "nature of the goods" supplied which ACL s 54(3)(a) states is one of the matters for the purposes of s 54(2). … 48. … provision of goods that were on the evidence not authentic - an intrinsic and important characteristic - constitutes a major failure on an objective assessment. 49. … the respondent provided the certificate of authenticity, at the time the goods were purchased and with the goods, to provide "comfort" to the purchaser. The respondent no longer relied upon the certificate because it considered it a less reliable means of providing such comfort than a chain of supply provenance through reputable suppliers authorised by the ultimate manufacturer. … 51. In providing the certification the respondent effectively warranted that the purchaser could rely upon the certificate as proof of authenticity of the goods purchased. By disavowing the reliability of the certificate the respondent breached that warranty. … 53 One can objectively conclude that a reasonable consumer would not regard goods as of acceptable quality if a certificate of authenticity from a third party provided as an intrinsic part of the supplied goods was later resiled from by the supplier (by the supplier's own statement) as no longer regarded as having ever been a reliable measure of authenticity, whether or not the goods were in fact authentic. Taking into account (as is permitted) the facts now known about the respondent supplier's attitude to the reliability of the certificate of authenticity, it can be concluded that the goods were not of acceptable quality because of the inherent risk that they were not authentic since a reliable measure of authenticity was not supplied for the purchasing consumer's comfort. … 54 Accordingly, the consumer guarantee was breached by the provision of a certificate of authenticity that could not, without more, be relied upon, whether or not the goods themselves were or were not authentic. (emphasis added)

The appellant's submissions

The appellant provided 12 pages of detailed submissions on these grounds, but it is only necessary to deal with one. The appellant submits that: 35 The Tribunal, in issuing a decision on the basis of breach of section 54 of the ACL, based on questions of law and fact outside of those contemplated by the Respondent's complaint and the discussion in the contested hearing. The Tribunal failed to consider that the goods were advertised as authentic, that the Appellant contended that the Saint Laurent Bag (the goods in question) was authentic and that the Respondent argued that it was not. This issue falls at the heart of a section 56 inquiry, not section 54. 36. Neither of the parties had legal representation at the hearing on the first instance, and neither party was on notice that the proceedings would be determined in accordance with provisions other than section 56 of the ACL or that the Tribunal would require submissions on matters outside of the authenticity of the Saint Laurent Bag. Further, the Tribunal did not indicate, either in the Directions or in the course of the contested hearing, that the Tribunal required the parties to make submissions on section 54 of the ACL, relating to the acceptable quality of the Saint Laurent Bag.
The appellant submits that it was denied procedural fairness, and that adherence to the principles of natural justice required the Tribunal to advise it of the consideration of any issues outside of those included in the respondent's application and the discussion at the hearing, in order to provide the appellant with the opportunity to make submissions about the relevant issues and consider whether there was additional evidence that should be put to address the s 54(2) and (3) factors. The appellant submits that the denial of this opportunity by the Tribunal amounted to a denial of procedural fairness and an error of law.
The appellant further submits that the Tribunal's approach was inconsistent with the hearing rule, which requires that a person whose interests may be affected by a decision be granted the opportunity to address the case against them. While the content of the hearing rule may vary depending on the "circumstances in which the repository is to exercise this power", natural justice fundamentally involves an affected party being informed of critical issues, or information that is "credible, relevant and significant" to the decision, and being provided an opportunity to respond. As the appellant was not aware that the matter would be decided under any provision of the ACL other than s 56 of the ACL, the appellant had no meaningful opportunity to make submissions or give evidence on the considerations under s 54 of the ACL was presented.

The respondent's submissions

The respondent provided lengthy submissions on the s 54 issue, but these submissions principally addressed the correctness of the Tribunal's approach and that "regardless of whether the case is assessed under [s 54] or [s 56] of the [ACL]",the Tribunal concurred with the respondent's assertion that the bag is not fit for purpose, does not conform to the representations made regarding the goods, and would not have been purchased had the respondent not believed it to be authentic.
The respondent then submits: 28. Should the Appellant wish to raise the issue of procedural fairness, the Tribunal must consider the following: The Appellant is pursuing the Respondent for a refund of $1,672, while simultaneously claiming to have issued over $2 million in refunds which is why they want the $1672 back. Notably, the Appellant has engaged legal representation, incurring costs estimated to be five to eight times the amount of the $1,672 in question which overrides their reasoning for wanting to claim back funds. In contrast, the Respondent, lacking the means to afford legal representation for a case worth $1672, has been presented with over 1,500 pages of documentation, replete with legal terminology, which she must meticulously review in two weeks, whilst working 4 days a week and being a mum. This scenario suggests a significant lack of fairness in the proceedings. The Appellant has a documented history of employing intimidation tactics, ostensibly to induce withdrawal from proceedings due to stress. Furthermore, the Appellant will be represented by legal counsel on the day of the hearing, exacerbating the imbalance of fairness to the detriment of the Respondent. 29. The Tribunal made no error of law and did not deny the Appellant the possibility of a successful outcome. The decision and outcomes were rendered based on the evidence provided by both parties, resulting in a fair and reasonable outcome for both. In previous cases, customers may not have possessed the substantial evidence that the Respondent had in this instance. This evidence includes the absence of information regarding the whereabouts of the original RA authenticity certificate, additional dispute certificates detailing the multiple & specific reasons the bag is counterfeit, and an invoice supplied by the Appellant which had been edited and altered. One could reasonably assume that if the Respondent had known that the case would be addressed under other sections of the Australian Consumer Law, she might have prepared further evidence. Nevertheless, both parties were afforded the same opportunities on the day of the hearing and if anything, The Appellant had more benefits in relation to them having legal counsel who prepared documents as well as experience with the other multiple cases where customers have purchased counterfeit bags unknowingly. Regrettably, the Appellant was unable to counter the Respondent's competing and accurate submissions".

Consideration

Sections 54 and 56 of the ACL relevantly provide: 54 Guarantee as to acceptable quality (1) If: (a) a person supplies, in trade or commerce, goods to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods are of acceptable quality. (2) Goods are of acceptable quality if they are as: (a) fit for all the purposes for which goods of that kind are commonly supplied; and (b) acceptable in appearance and finish; and (c) free from defects; and (d) safe; and (e) durable; as a reasonable consumer fully acquainted with the state and condition of the goods (including any hidden defects of the goods), would regard as acceptable having regard to the matters in subsection (3). (3) The matters for the purposes of subsection (2) are: (a) the nature of the goods; and4 (b) the price of the goods (if relevant); and (c) any statements made about the goods on any packaging or label on the goods; and (d) any representation made about the goods by the supplier or manufacturer of the goods; and (e) any other relevant circumstances relating to the supply of the goods. 56 Guarantee relating to the supply of goods by description (1) If: (a) a person supplies, in trade or commerce, goods by description to a consumer; and (b) the supply does not occur by way of sale by auction; there is a guarantee that the goods correspond with the description.
We note that in her application to the Tribunal the respondent had stated: Orders sought i would like a full refund of $1672 that i originally paid for the bag as i thought i was purchasing an authentic YSL Camera Lou bag. I have proof the bag is counterfeit however, Cosette is refusing to give me a refund and i have been requesting one since September as they are saying the bag is authentic. Reasons for asking for orders? Cosette has refused to provide me with a refund even though i have proof the bag is counterfeit from a reputable Australian Supplier that has also helped other Cosette customers. I have done everything that i was told to do including bring the bag into store and following up and they have only ignored me for months on end and lied to me multiple times. The bag is fake and the dispute certificate has the 6 reasons the bag is fake. Multiple other customers were also sold fake YSL bags so i believe mine to be apart of that batch. I have also included email trails where i am asking for my money and their appalling customer service. I am not even asking for the additional money i have spent trying to prove the bag is fake, i just want the $1672 that i originally paid for the bag. Attachments included are: Invoice of original purchase, two certificates showing the bag is counterfeit including exact fake features, email trail since september. (typographical error as in original)
We have the benefit of a transcript prepared by the appellant. There was much discussion between the Tribunal and the respondent and Mr Solimena about the authenticity of the Camera Bag, and the persuasiveness of the respondent's evidence in that respect.
The lack of authenticity of the Camera Bag was emphasised by the appellant at the Tribunal hearing when in her oral submissions she stated: APPELLANT so I believe that the bag is fake. It's a counterfeit. So I know that we, I need to do it completely on the favour of the balance of probabilities so in my evidence I believe that by providing the two separate third party authenticators ... APPELLANT As well as the dodgy invoice. It does prove that they are importing what is called the super fake bags. … APPELLANT I think as well that the bag is counterfeit, it is a fake bag. Many of the features do, you know, look normal. But upon further inspection, you know, it is, the bag is absolutely counterfeit. TRIBUNAL Now what you, are you saying that in your own observations or from the expert report? APPELLANT From both. From my own observations as well as the detailed report. TRIBUNAL Well what is the basis for your own observation? I mean obviously the bag but what are you comparing it to? APPELLANT I'm comparing it with authentic YSL products that I've seen after. When I purchased the bag i thought some things looked off but I sort of brushed it aside because I thought surely that wouldn't be the case. But you know, upon, you know viewing authentic YSL products the bag is close ... TRIBUNAL Yes. APPELLANT... but, and it is referred to as what people refer to as a super fake. TRIBUNAL Yes. Okay. So you've bought this as a genuine YSL product? APPELLANT Correct. The only reason I went to Cosette and paid $1,672 for the bag was I was under the belief that the bag was authentic. They, that is what, is put everywhere on their website that they deal with products that are authentic and the reason that they come in at a lower price is because they are a couple of seasons old or old stock which was absolutely fine. But I was under the impression I was purchasing an authentic YSL product not a super fake.
We accept that there is perhaps an element of overlap between s 56 and the matters identified in s 54(3)(c) and (d) (namely any statements made about the goods on any packaging or label on the goods(s 54(3)(c) and any representation made about the goods by the supplier or manufacturer of the goods (s 53(3)(d)) which a reasonable consumer may have had regard to in coming to a conclusion as to whether they would regard the goods in question as acceptable in accordance with s 54(1) and (2).
However, we could see no discussion in the transcript between the Tribunal and the parties about the issues a "s 54 inquiry" (as described by the appellant) would raise.
In those circumstances, we are unable to accept the respondent's submissions on this issue, and do accept those of the appellant which we find to be persuasive. The simple point is that the appellant was denied procedural fairness by the Tribunal, in that it dealt with the respondent's application in a different fashion to that articulated in the application and different to how the hearing was conducted.
Failure to provide procedural fairness raises a question of law: Prendergast at [13(4)].
This means that there has been an error on a question of law and that the appeal should be allowed.

Reconsideration

We raised with the parties at the hearing what course should be adopted were we to allow the appeal. Both parties asked that we redetermine the matter based on the evidence before us, and not to remit the matter back to the Tribunal.
The fundamental issue in this matter is the authenticity of the Camera Bag. This issue was raised by the appellant in appeal grounds 4 and 6.
Appeal ground 4 was that that the Tribunal erred by finding that there was sufficient evidence to establish the respondent's claim that the Camera Bag supplied to her by the appellant was not authentic.
Appeal ground 6 was that the Tribunal erred in law by characterising the respondent's authentication certificates as opinions of the organisations, capable of discharging the respondent's burden of proof.
Our view is that there is a fundamental issue about the evidence relied on by the respondent to prove her claim that the Camera Bag was not authentic or, to speak colloquially, "a fake".
The Tribunal has now considered a number of similar claims against the respondent. Some of these are referred to in the Decision. At least one other application besides the respondent's has been successful.
Be that as it may, any case is decided on its own facts, matters and circumstances, applying the relevant law to the established facts.
The central issue in the application before the Tribunal was whether or not the Camera Bag was an authentic St Laurent Lou Camera Bag. The onus was on the respondent to prove so. The evidence of proof of a lack of authenticity before the Tribunal in this matter was as follows.
First a document titled "Confirmation of Non-Genuine Item" dated 15 August 2023 issued by LAA.
The document includes photographs of the Camera Bag and bears a stamp stating "Counterfeit". The document is not signed by any person and is silent on how any officer or employee of or consultant to LAA reached the conclusion that the Camera Bag was a counterfeit.
This document was not referred to by the Tribunal in the Decision. We infer that that was because it is clearly an inadequate document for the Tribunal to place any reliance.
Secondly, the document titled "Statement of Non-Authenticity dated 29 November 2023, also issued by LAA. This document relevantly states: Fee paid for authentication service: $20 for standard authentication and $50 for dispute certificate Purchase information: Purchased from Cosette on 1 2 July 2022, invoice number 3251 2. Summary of Non-Authenticity: Based on our review of the information provided to us as outlined in this statement, we have determined this Saint Laurent Lou camera bag is not authentic. For the purpose of our determination, we have assumed that this item purports to be a Saint Laurent Lou camera bag. Appraiser's information: Our appraisers are professional brand specific luxury goods authenticators with knowledge and experience gained from years of collecting, selling and authenticating branded luxury goods. Our authenticator for this item is a professional luxury goods authenticator with over 10 years' experience authenticating luxury brands, including Saint Laurent. Photos illustrating evidence of concerns with authenticity: The following photos were obtained directly from the client. [There then appears 5 photographs] Particulars of concerns with authenticity: Factors demonstrating non-authenticity for this item are as follows: 1 The logo is in the wrong position on the front of the bag. 2 The stamping on the internal heat stamp is not in the incorrect font and the gilt stamp is too thin, uneven and messy. 3 The stamping on the serial number leather tab is in the incorrect font and is uneven and messy. 4 The font on the engraving on the zipper head is incorrect, messy and poorly crafted. 5 The colour and texture of the zipper head is not in accordance with brand standards. 6 The texture of the leather on the heat stamp and serial number leather tabs is not in accordance with brand standards, and the stitching and the edging of the leather tabs is not uniform. Conclusion: In our opinion, the particulars of non-authenticity noted above for this item, ore evidence that the item you have received is a counterfeit. Accordingly, we consider this Saint Laurent Lou camera bag to be non-authentic.
Then there was the "report" of LegitGrails. A document titled "Authenticity Document" was provided to the respondent on 27 January 2024. It relevantly states: Authentication Outcome: Fake Reason Inside label. [There then appears 3 photographs of the Bag].
The covering email from a generic email address for "Legitgrails" states: Hello there, Hope you are well! Please find your authenticity certificate attached to this email. Unfortunately, looking at the available photos, this item does not pass the authenticity check because: • The text formatting of the item does not match our database • The main problem is that the wrong fonts, font weights and spacing are used • The logo and other identified text do not check out • This is particularly noticeable in the inside label Please reply to this email in case of any questions or concerns. Our amazing support team is available around the clock!
On 25 August 2024, the Tribunal published its decision in Yang v My Fashion Republic Pty Ltd t/as Cosette, being proceedings 2024/00032118. The applicant had relied on two certificates of authenticity to prove that her bag was not authentic.
We found the Tribunal's statement of the applicable principles to be useful. The Tribunal relevantly stated: 31 Opinions in legal proceedings may only be given by those having specialised knowledge based on the person's training, study or experience and their opinion must be wholly or substantially based on that knowledge. 32 The Tribunal is not aware of the training, study or experience of whoever it is that is giving the two opinions. Indeed, it appears to be the case that, in the case of Entrupy, the opinion is the result of artificial intelligence based on Entrupy's algorithms. 33 Mr Solimena, also referred me to the well-known case of Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305. 34 In an oft-quoted passage, Heydon JA referred to the prime duty of experts in giving opinion evidence as furnishing the Court (or in this case the Tribunal) with criteria to enable the evaluation of the validity of the expert's conclusions. His Honour referred to the judgment of Lord President Cooper in Davie v The Lord Provost, Magistrates and Councillors of the City of Edinburgh 1953 SC 34 where the Lord President stated that the role of the expert was: "to furnish the Judge or jury with the necessary scientific criteria for testing the accuracy of their conclusions, so as to enable the Judge or jury to form their own independent judgment by the application of these criteria to the facts proved in evidence. The scientific opinion evidence, if intelligible, convincing and tested, becomes a factor (and often an important factor) for consideration along with the whole other evidence in the case, but the decision is for the Judge or jury. In particular the bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert". 35 I accept that there is some reasoning for the opinions expressed in the two certificates. However, there is no expert or other person giving those opinions. I reject the applicant's submission that the media reports she relies on demonstrates that I should accept the Entrupy opinion as provided.
The Tribunal then discussed the implications of the fact that it was not bound by the rules of evidence: Civil and Administrative Tribunal Act 2013 (NSW), s 38(2). The Tribunal stated: 39 First, I agree entirely that the Tribunal is not bound by the rules of evidence: see s 38(2) of the Civil and Administrative Tribunal Act 2012 (NSW). That said, it is appropriate to recall the caution of Evatt J in R v The War Pensions Entitlement Appeals Tribunal; Ex parte Bott (1933) 50 CLR 228. His Honour stated at 256: But this does not mean that all rules of evidence may be ignored as of no account. After all, they represent the attempt made, through many generations, to evolve a method of inquiry best calculated to prevent error and elicit truth. No tribunal can, without grave danger of injustice, set them on one side and resort to methods of inquiry which necessarily advantage one party and necessarily disadvantage the opposing party. In other words, although rules of evidence, as such, do not bind, every attempt must be made to administer "substantial justice". 40 And, as is observed by Aronson and Groves in Judicial Review of Administrative Action (5th Ed) at 581: Provisions which free a tribunal or other body from the rules of evidence are best regarded as facultative. They are intended to provide procedural flexibility but not to displace logic or reasons. A decision-maker freed from the rules of evidence must therefore still consider the whether the material it can consider should in fact be considered. The litmus test is usually whether the material is rationally probative. It follows that provisions which free tribunals from the rules of evidence do not allow decision-makers to "draw inferences or jump to conclusions, which the available material did not adequately support". (emphasis added)
As with the authentication reports relied on by the applicant in Yang, the Appeal Panel is not aware of the training, study or experience of whoever it is that is gave the certificates relied on by the respondent before the Tribunal. As the Tribunal noted in Yang, opinions in legal proceedings may only be given by those having specialised knowledge based on the person's training, study or experience and their opinion must be wholly or substantially based on that knowledge.
The respondent provided detailed and substantive submissions on this issue, including that: The Respondent contends that the Tribunal's decision was based on a thorough and balanced consideration of all the evidence presented. The Tribunal meticulously evaluated the authenticity concerns raised, and the decision was grounded in the factual matrix of the case, supported by the evidence provided by both parties. The Tribunal's findings align with the preponderance of evidence, including the third-party authentication reports, which are industry-recognized tools used to determine the authenticity of luxury goods as well as the Invoice The Appellant had supplied which has been edited/doctored and the Appellant's lack of evidence that specifically relates directly back to the YSL Lou Camera bag that was purchased by the Respondent. …
The issue we have with that submission is that, for the reasons we have explained above, we do not accept that the third-party authentication reports relied on by the respondent establish the lack of authenticity of the Camera Bag.
As to the issue of authenticity specifically, the respondent provides almost 4 pages of lengthy and detailed submissions. In summary, the respondent relevantly states: 35. … All cases before the NCAT must meet the civil standard of proof, which is the balance of probabilities. In this instance, the Appellant failed to meet this standard. The Respondent, having presented a stronger argument and more compelling evidence, successfully demonstrated that the bag was counterfeit. It is also noteworthy that the Appellant relied on these certificates for many years until they ceased to serve their interests and began to benefit the consumers who had been misled by their conduct. 36. The Appellant states that the only evidence were two authentication certificates stating that the bag was counterfeit. One from legit grails and one from Luxury Authentication Australia, however what the Appellant fails to mention is the secondary Dispute certificate or "statement of Non-Authenticity" from Luxury Authentication Australia which: i. Lists the Authenticators ID number, so whilst they have not mentioned names there is a way of identifying them ii. Goes into detail about who the identifier is "Our Authenticator for this item is a professional luxury goods authenticator with over 10 years experience authenticating luxury brands including saint Laurent" iii. 6 specific reasons that the bag is counterfeit, with 3 of them matching the reasons that the legit grails certificate picked up … … 38. … The Respondent, however, presented substantial evidence demonstrating that the authentication process was thorough and reliable. The Tribunal correctly identified that both the LegitGrails and LAA certificates stated the Saint Laurent Bag was counterfeit. Page 148-149 of the Appellant's evidence. The Tribunal considered the terms of service and limitations of the certificates but found that the overall evidence supported the conclusion that the bag was inauthentic, and the Respondent was able to prove the Civil standard of proof. 39. …The [appellant submits] state "both certificates make it clear that the opinions expressed in them cannot be relied on" however, as stated by the Tribunal … "Both qualifications contain matters that affirm as well as qualify the opinion. They appear to be an attempt to protect the organisations from being sued on a contractual warranty, rather than resiling from or discounting the conclusions in the opinions" The Tribunal also stated in Paragraph 37 Page 150 of The Appellant's evidence " The respondent's critique in the CFO's Statutory declaration that critiqued the applicants two reports itself suffered from a lack of sufficient identification of qualifications and was not independent of a party" it should be known that Legit Grails state on their website that they are "The Most Advanced Luxury Authentication Service in the World" They have a peer system where each item is checked by 2-4 authenticators" Page 26 of The Respondent's evidence and they have an "accuracy rate of over 99% and an experience in reselling and working directly with well known brands" Luxury Authentication Australia or LAA state that "Our authenticators are brand experts with many years experience in the luxury goods industry and we have brought them all into one place so that you can rely on their expert opinion" as well as being trusted by upwards of 5 resellers and consigners who trust LAA to authenticate their inventory. 40. Prior to addressing the four cases referenced by the Appellant in Ground 4a-4d, it is essential to note that none of these cases constitute established case law. Instead, they are selectively drawn from the Appellant's own catalogue of cases in which they have prevailed. These cases do not bear resemblance to the evidence presented in the current matter. The only commonality shared among these cases is that the consumers, including the Respondent, were misled by the Appellant's deceptive conduct and were induced into purchasing a bag believed to be authentic. 41. In the case of Ren (Yi Ren v My Fashion Republic Pty Ltd (2023/00366486) Page 1597-1601 of The Appellant's evidence, it is more probable than not that the Tribunal went to the Appellants side was that Ren was unable to prove beyond civil standard that the bag was not authentic. Unfortunately for Ren it seems that only the Authenticity was purchased and not the further dispute certificate for $50 which is what The Respondent purchased to further prove her evidence Page 150 of The Appellant's evidence

Conclusion

The central matter in this appeal, and indeed in any application to the Tribunal, is that an applicant has to provide probative evidence, that is persuasive and reliable evidence, to prove their claim.
As the Appeal Panel remarked in Kora v Ian's Roofing Pty Ltd [2023] NSWCATAP 42: 107. The Tribunal or its predecessors have remarked on a number of occasions (see Pate v Chan [2010] NSWCTTT 221; Buckland v Goodwin [2009] NSWCTTT 685; McGinn v Barilla [2018] NSWCATAP 85 that: (1) a court or tribunal is informed and persuaded only by the presentation of evidence; (2) evidence is material which tends to persuade the court or tribunal of the truth or probability of the facts being alleged. (3) evidence may be photographic, documentary or testimonial. But it will only succeed in persuading the tribunal if it appears as being truthful, reliable and cogent; (4) the uncorroborated say so of a party that work has been undertaken poorly or that a loss has been suffered in a particular amount is rarely, if ever, sufficient proof of the poor work or the loss being suffered. … 111 In short, there is a difference between having "a good case" and having the evidence to prove that one has "a good case".
In Kora, the Appeal Panel was of the view that the evidence before the Tribunal relied on by the appellant was entirely lacking. In this case, for the reasons given above, we consider that the evidence relied on by the respondent to prove the Camera Bag was not authentic (or a fake) is not persuasive.
It follows that, in re-exercising the discretion of the Tribunal, we would dismiss the application to the Tribunal.

Conclusion

For these reasons, we allow the appeal, set aside the Decision and in lieu thereof order that the respondent's application to the Tribunal be dismissed.
This means that the respondent must repay to the appellant the $1,672.00 it had previously paid to her pursuant to the Decision. That is to be undertaken within 28 days.
As for the fate of the Camera Bag, the appellant has sought an order that it be directed to return the Camera Bag to the respondent, at the respondent's expense.
We decline to make that order. We propose that the respondent indicate to the appellant within 7 days whether she wishes the Camera Bag to be returned to her. If she does, the appellant can mail the Camera Bag to the respondent in the usual way. If the respondent does not want the Camera Bag returned, the appellant can dispose of the Camera Bag as it thinks fit.

Orders

The Appeal Panel orders: 1. The appeal is allowed. 2. The decision of the Tribunal of 14 May 2024 in matter 2024/00003013 is set aside, and in lieu thereof it is ordered that the application is dismissed. 3. On or before 29 October 2024, the respondent is to repay to the appellant the $1,672 it had previously paid to her pursuant to the Tribunal's order of 14 May 2024. 4. By 8 October 2024 that the respondent is to indicate to the appellant whether she wishes the St Laurent Lou Camera Bag she purchased to be returned to her. If she does, the appellant may mail the St Laurent Lou Camera Bag to the respondent. Otherwise, the appellant may dispose of the St Laurent Lou Camera Bag as it thinks fit.

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: 01 October 2024

Civil and Administrative Tribunal Act 2012(NSW)

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