Sun v Lumi Skin Clinics Pty Ltd

[2025] NSWCATCD 17

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Sun v Lumi Skin Clinics Pty Ltd [2025] NSWCATCD 17

Hearing dates:

31 January 2025

Date of orders:

7 April 2025

Decision date:

07 April 2025

Jurisdiction:

Consumer and Commercial Division

Before:

JA Rose, General Member

Decision:

(1)      By consent, the respondent, Lumi Skin Clinics Pty Limited must pay the applicant, Xiaoran Sun the sum of $4,653.00 immediately.

(2)      The application is otherwise dismissed because the Tribunal is not satisfied to the civil standard (being the balance of probabilities) on the material put before it that there are grounds for the Tribunal to make the orders sought by the applicant.

(3)      Subject to order (4), each party is to pay that party’s own costs of the proceedings.

(4)      If either party wishes to seek a different costs order to that set out in order (3), then:

(a)      that party (the “costs applicant”) is to provide to the other party (the “costs respondent”) and to the Tribunal written submissions (strictly not exceeding 4 pages) setting out the costs order they contend for and the reasons relied on for seeking that order, together with any other relevant documents or material, within the 7 days after the date this decision is issued to the parties;

(b)      the costs respondent is to provide to the costs applicant and to the Tribunal written submissions in response (strictly not exceeding 4 pages) setting out the reasons relied on against making that order, together with any other relevant documents or material, within the 14 days after the date this decision is issued to the parties; and

(c) the parties submissions are to address the question of whether a hearing on costs can be dispensed with under s 50 of the Civil and Administrative Tribunal Act 2013 (NSW), with the intent that the costs issue will be determined on the papers.

(5) The Tribunal is satisfied pursuant to s 79U of the FT Act that this order will be fair and equitable to all parties to the claim.

Catchwords:

CONSUMER LAW — Consumer guarantees — Supply of services — Guarantee as to due care and skill

CONSUMER LAW — Consumer guarantees — Supply of services — Guarantee as to nature, quality, state or condition

CONSUMER LAW — Unconscionable conduct — In connection with goods or services

CONSUMER LAW — Unfair contract terms — Consumer contract

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW) Civil Liability Act 2001 (NSW)

Fair Trading Act 1987 (NSW)

Poisons and Therapeutic Goods Regulation 2008 (NSW)

Cases Cited:

ACCC v Chrisco Hampers Australia Limited [2015] FCA 1204

ACCC v Kobelt [2019] HCA 18; (2019) 267 CLR 1; 93 ALJR 743; 368 ALR 1

ACCC v Quantum Housing Group Pty Ltd [2021] FCAFC 40

AWD Cavallo Investments Pty Ltd v Smokevitch [2021] NSWCATAP 183

Bird v DP (a pseudonym) [2024] HCA 41

Director General of Fair Trading v First National Bank Plc [2001] UK HL 52

Gover v South Australia (1985) 39 SASR 543

Jetstar Airways Pty Ltd v Free [2008] VSC 539

Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305

Paciocco v Australia and New Zealand Banking Group Ltd [2014] FCA 35

Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 321 ALR 584; 236 FCR 199

Rogers v Whitaker (1992) 175 CLR 479

Sidaway v Governors of Bethlem Royal Hospital [1985] AC 871

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Xiaoran Sun (Applicant)
Lumi Skin Clinics Pty Ltd (Respondent)

Representation:

Counsel:
J Yu, solicitor (Applicant)
R Li, solicitor (Respondent)

Solicitors:
D&J Solicitors (Applicant)
Du & Associates (Respondent)

File Number(s):

2024/279640

Publication restriction:

Nil

REASONS FOR DECISION

Introduction and procedural history

1. This application arises out of a series of transactions by which the applicant engaged the respondent to provide and beauty treatments to her at its premises at Hay Street, Haymarket NSW, between August 2022 and May 2024.

2. By the application form that she lodged with the Tribunal on 30 July 2024, the applicant sought orders that the respondent refund her $27,160.80 that she had paid to the respondent over that period. The application was accompanied by a Statement of Orders and Reasons that was prepared by the applicant’s solicitor, which have since been amended. That original Statement of Orders and Reasons described the orders sought by the applicant as follows:

The applicant seeks the following orders:

1.   The respondent refunds the applicant full treatment fee of facial slimming injection;

2.   The respondent pays for the applicant’s costs of after-care treatment for the facial slimming injection; and

3.   The respondent refunds the applicant unused credits in full amount.

The document alleged (at [7]) that the respondent had breached various sections of the Australian Consumer Law (the ACL) in the course of rendering its services to the applicant, including:

a. section 60 – that the respondent failed to render it services with due care and skill;

b.   section 61(2) – that the respondent failed to render it services with results that are reasonably expected by the applicant;

c.   section 21 – that the respondent engaged in conduct that is, in all the circumstances, unconscionable; and

d.   section 23 – that a term of a contract between the respondent and the applicant, express or implied, is unfair [being the clause which prevented the applicant from receiving a full refund].

3. The application first came before the Tribunal for a conciliation and initial (group list) hearing on 16 August 2024. At that time, the applicant sought and obtained leave to amend her application, and the Tribunal adjourned the proceedings to allow the applicant to lodge and give to the respondent an amended application.

4. The matter came back before the Tribunal for a further conciliation and group list hearing on 6 September 2024. By that time the applicant has amended the orders sought in the proceeding to the following (my bolding, underlining in the original):

The applicant seeks the following orders:

1.   The respondent refunds the applicant full treatment fee of facial slimming injection and pay for the treatment in relation to side-effects of the injection, if necessary;

2.   The respondent refunds the applicant unused pre-deposits in full amount.

The Amended Statement of Orders and Reasons re-pleaded the claim for “credits” as a claim for “pre-deposits”, alleging (at [5]) that the applicant had made pre-deposits into the respondent’s account totalling $32,622 and that, after some pre-deposits had been spent on services received by the applicant, there was a balance of $13,412 left in the account.

5. Conciliation was again not successful at the hearing on 6 September 2024, so the Tribunal made orders adjourning the proceeding for hearing as a special fixture on a date to be confirmed by the Registrar. In so doing, the Tribunal made orders:

1. permitting both parties to be represented by lawyers; and

2. directing directed both parties to lodge with it and give to each other documents they intended to rely on at the hearing, by certain dates.

The Tribunal noted that the basis of the applicant’s claim was as follows:

The applicant claimed that over the last two years, she received “facial slimming injections” from the respondent and claims the respondent failed to take reasonable care in doing that work which caused injury to her. On that ground the applicant seeks a refund of the amounts paid to the respondent being approximately $32,622. The respondent denies those claims. The applicant may seek further compensation for what she claims are injuries caused to her by the respondent. Given what could be potentially the complexity of the legal issues arising from this claim the Tribunal has granted the parties to have legal representation.

6. The proceeding was originally listed for hearing on 5 December 2024, however that listing was vacated at the request of the parties, due to “unavailability”.

The hearing

7. The proceeding was then listed for hearing by me on 31 January 2025.. The applicant was represented at the hearing by her solicitor, Mr Yu. The respondent was represented at the hearing by its solicitor, Mr Li.

8. The hearing proceeded in the usual manner. After both parties’ representatives gave brief outlines of their respective claims and defences, the parties were given the opportunity to present their evidence in the matter and to test the evidence produced by the other party (which both parties did). They were also given the opportunity to present evidence in reply to that evidence. The parties were also given the opportunity to present their submissions to the Tribunal, including by making submissions in response to the submissions made by the other party. I am satisfied that the parties have had a reasonable opportunity to be heard and to have the Tribunal consider their arguments.

9. In opening the applicant’s claim, Mr Yu asserted that the applicant maintained her claims under ss 60, 61, 21 and 23 of the ACL, and that she claimed a total of $9,130, including:

1. $960, as a refund of the fee for a facial injection performed on the applicant on or about 16 March 2024;

2. $600, for the cost of seeing a doctor after that injection was performed; and

3. $7,570, as a refund of unspent money held in the respondent’s account for the applicant.

He otherwise relied on his written submissions dated 27 January 2025, which asserted that Dr. Sung (1) failed to assess the applicant or test her skin condition for suitability for receiving the injection; and (2) failed to inform her of the possible adverse effects after the injection to allow her an opportunity to decide whether to proceed or not; and that the respondent’s terms and conditions were both unfair and unconscionable.

10. Mr Li summarised the respondent’s denial of the claim for the reasons set out in his written outline of submissions dated 29 January 2025. In doing so, he conceded on the respondent’s behalf that the applicant had not used $4,653 of one package and that this amount should be refunded to the applicant. The respondent therefore admits that this amount should be paid to the applicant, but otherwise opposes the applicant’s claim.

11. I have heard the matter on this basis. Consequently there should be, at the minimum, a consent order that the respondent pay the applicant $4,653. The issue to be determined by the Tribunal is whether the respondent is liable to pay a larger amount to the applicant on one or more of the bases identified by the applicant.

12. I reserved my decision at the end of the hearing. For the reasons that I now set out, I have decided that the applicant has not proved any of the additional claims that she has made against the respondent to the required standard. Consequently, there should be an order that the respondent pay the applicant $4,653 however the balance of the application must be dismissed.

The evidence

(a)   The applicant’s evidence

13. The applicant relied on her affidavit dated 17 September 2024. She also gave sworn oral testimony, during which she was questioned on the issues in the case by Mr Li and by the Tribunal.

(b)   The respondent’s evidence

14. the respondent relied on the bundle of documents that it had lodged with the Tribunal on 29 January 2025, which included:

1. Mr Li’s written outline of submissions;

2. the affidavit of Lili Bi dated 14 October 2024;

3. the affidavit of Yuet Ching Soo dated 15 October 2024; and

4. the supplementary affidavit of Lili Bi dated 29 January 2025:

15. Ms Bi and Ms Soo both gave sworn oral testimony, during which they were questioned on the issues in the case by Mr Yu and by the Tribunal.

16. I have considered all of that evidence in coming to my determination.

Jurisdiction

17. Part 6A of the Fair Trading Act 1987 (NSW) (the “FT Act”) seeks to provide remedies for, and the straightforward resolution of, disputes concerning the supply of goods and services to consumers. Section 79I, within that Part, empowers consumers (as defined in Part 6A) to apply to the Tribunal for determination of a “consumer claim”. Section 79J gives the Tribunal jurisdiction to hear and determine a consumer claim that is the subject of an application under that Part, subject to the limitations specified in the Part.

18. It was common ground between the parties that the respondent:

1. conducts business providing facial treatment services from premises at Hay Street, Haymarket NSW; and

2. provided facial treatment services to the applicant between August 2022 and May 2024.

19. I am satisfied on those agreed facts and on the evidence produced by the parties that:

1. The respondent is a “supplier” for the purposes of Part 6A: s 79D.

2. The services provided by the respondent to the applicant fall within the definition of “services” in s 79G.

3. The applicant is a “consumer” for the purposes of Part 6A, including because (firstly) the respondents have not sought to argue to the contrary: s 79H; and (secondly) the services were supplied to her by the respondent within the meaning of s 79D and 79G.

4. The applicant’s claim seeks one or more of the remedies specified in s 79E (namely, an order for the payment of a specified sum of money) in respect of the supply of the services to her by the respondent. Consequently, her claim is also a “consumer claim” for the purposes of Part 6A: s 79B.

5. The claim has a sufficient connection with New South Wales, including because the services were supplied to the applicant in New South Wales: s 79K.

6. The claim has been lodged within the limitation period of 3 years after the cause of action giving rise to the claim first accrued: s 79L.

20. Consequently, I find that the Tribunal has jurisdiction to hear and determine the applicant’s claim. I am also satisfied that the relief sought by the applicant is within the Tribunal’s power under ss 79N-79V of the FT Act.

The background facts

21. Having weighed and considered the evidence produced by both parties and the submissions made by both parties about that evidence, I am satisfied on the balance of probabilities that the background facts of the matter are as follows:

22. As noted above, the respondent provides facial treatment services to its customers. Those services included (amongst others) botulinum toxin (“Botox”) treatments, which is a procedure that uses a neurotoxin to temporarily paralyse muscles, reducing the appearance of wrinkles and fine lines by relaxing the underlying muscles. Due to the requirements of the Poisons and Therapeutic Goods Regulation 2008 (NSW) (the PATG Regulation), those treatments are administered by doctors and/or nursing practitioners who are engaged by the respondent for that purpose.

23. The respondent has adopted a standard form Terms and Conditions, which he gives to its customers before the provision of any services to them, for the customers to review. The respondent prohibited staff in providing any services to its customer until he or she has reviewed and signed the terms and conditions.

24. The respondent provides those treatments on a pay-as-you-go basis, where each treatment is provided and paid for individually, or in a bundle of treatments which are purchased as a package and paid for up-front at a discounted price, compared to purchasing the packaged treatments individually.

25. The respondent offers monthly promotional beauty packages to its customers on special terms and at special prices. The respondent requires its staff to inform customers that all promotional beauty packages are non-refundable, has the purpose of the package is to offer customers competitive pricing for beauty services that are purchased in bulk.

26. When the respondent sells a package of treatments to a customer, the customer is able to undertake one of the packaged services at any time. Consequently, the respondent uses the price paid by the customer for the package to bulk-buy upfront the products and materials necessary to provide those services to that particular customer. The products and materials are kept on-hand at the respondent’s premises between each treatment, where they are marked as assigned to that particular customer. In the event that a customer refunds the beauty package on a change of mind, the respondent must bear the costs of the consumables purchased, although the respondent’s terms and conditions permit a customer to transfer purchases. The respondent also offers store credit refunds to its customers, to allow them to refund a news promotional beauty packages and receive store credit.

27. When a customer purchases a beauty service from the respondent, either by way of a retail purchase the respondent’s staff records in a document titled “customer treatment record” the details of the package that is purchased by the customer. Each time a customer visits for a beauty session, the therapist two provides the services will record the treatment performed, the therapist’s name, the date of the service and the balance of the promotional package, and will have the customer sign to acknowledge that information.

28. As noted above, the respondent engages medical practitioners who are qualified to provide injectable services. The respondent engaged Dr Wen-Shan Sung, who provided the Botox injection service that is the subject of the applicant’s claim.

29. The applicant is a fitness coach. On 4 August 2022, she began visiting the respondent’s clinic at Haymarket for skin care services. At that time (and consistently with the matters that I have just set out), she completed a consultation form, setting out the skin problems that she wanted to solve and her health status. She also signed the respondent’s terms and conditions, which included the following provisions (my underlining):

Terms & conditions

Lumi Skin Clinics uses quality products that are guaranteed by our reputable suppliers. If there is dissatisfaction with the products or treatments offered at Lumi Skin Clinics, we endeavour to help you with after treatments from your purchased packages subject to our agreement. Where there is a price difference, you will be required to pay for any price increase.

…

Lumi Skin Clinics does not provide any medical procedures and clients should seek professional medical advice in circumstances where they require treatment for health problems. You warrant that you have informed us of any underlying health conditions, and, to the extent permitted by law, we are not liable for costs, expenses and damages as a result of non-disclosure of any pre-existing health conditions. You agree to indemnify us for any loss, damage, penalty, fine or legal costs which may be incurred by us as result of your non-disclosure. To the extent permitted by law, our liability in connection with our services will be capped at the fees paid by you.

…

For all online and in-store purchases, an expiry date of two years from the date payment is made exists. This expiry does not relate to the expiry of the product itself but for treatments and packages. All consumables and perishables should be used within the period as disclosed on the products. Could you wish to extend the expiry date of any online and in-store purchases for treatments, you may do so for prior to the expiration date for a period of up to 1 year at the additional cost of $100AUD.

…

Any purchases made online, or in-store may be transferable to another party within its validity date. All purchases are non-refundable as payments made will be used towards ordering materials and products required for the treatment.

30. Over the period between August 2022 and May 2024, the applicant purchased about 16 promotional beauty services packages from the respondent, paying a total of $32,622. She also received one free promotional store credits package. According to the respondent’s submissions and the customer treatment records for the applicant that were produced by Ms Soo (which I accept):

1. the applicant has fully completed 11 of those packages, valued at $19,210;

2. the applicant has partly completed 5 promotional beauty services packages, with a remaining value of $1,553.22 across those packages;

1. one promotional beauty service package remains unused, valued at $4,653; and

2. there is $908 in store credit left available for the applicant to spend with the respondent on the promotional store credits package.

31. I accept the respondent’s submission that the description of the payments made by the applicant to the respondent as “pre-deposits” is erroneous and misconceived. I find that it no time did the respondent, or its staff, make any representations to the applicant that it held the applicant’s deposits on behalf of, or in trust for the applicant.

32. While the applicant paid money to the respondent, she did not do so as a pre-deposit and the money was not held on her behalf as money or as a debt (chose in action). Rather, at the point of payment, the respondent sold the applicant one or more promotional beauty services packages, which usually consisted of the right to receive a number of sessions of a particular beauty service. In effect, the applicant exchanged her payment for the right to receive an agreed number and type of beauty services in the future, at a discount compared to purchasing those services individually. These prepaid services would be recorded on the applicant’s customer treatment records, and signed for by the applicant as each service was redeemed.

33. The applicant also received store credit with the respondent, which was run down on the store credit running account as it was redeemed by the applicant. That credit was not a “pre-deposit”, as alleged by the applicant.

34. On or about 27 February 2024, Dr. Sung purchased about 50 units of Xeomin 100U (Botox) from DHL Supply Chain (Australia) Pty Ltd, which included a bulk-purchase of Botox for supply to the applicant under the beauty services packages that she had purchased from the respondent.

35. In around March 2024, the applicant booked a “facial slimming injection” at the respondent’s clinic. On the day when she arrived at the clinic, the applicant was led to the doctor who was to perform the injection. The doctor administered the injection into the applicant’s lower face. There is a dispute between the parties about whether the doctor enquired about or checked the applicant’s skin condition or general health condition, or whether he explained the procedure and the possible side effects of the injection to the applicant. I will return to this below.

36. About a week after the injection (which Ms Bi identifies was in or around April 2024), the applicant complained to the respondent that the facial injection had caused injury to her face, and demanded a refund of all her past payments to the respondent. The applicant sent the respondent two photographs that showed the side of her face which the applicant alleges suffered the injury. Those photographs showed some swelling around the jaw line on the left side of the applicant’s face, which has since subsided.

37. On 30 May 2024, the applicant obtained a medical certificate from a Dr. You-Feng Judy Huang, at Medicentral 501 George Street, Sydney, who certified that the applicant:

… Is suffering irregular fat atrophy after Botox injection on her left side of her face that caused irregularity of her face when she bites down especially on her left cheek. She is upset that the side-effects were not discussed prior to her procedure and she never had this issue before in her prior treatment in the past.

Her facial irregularity is only obvious when she bites down, but is not visible in neutral facial expression or smiles on examination today.

38. Dr Huang was not cross-examined at the hearing. The respondent argued that no weight should be given to the certificate because of its brevity and its failure to comply with the principles stated in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 – particularly because the doctor did not state clearly the reasoning and analysis used to arrive at her conclusion, demonstrating that her opinion was based on her expertise. I accept that submission, which I agree with. I therefore accept the certificate only as summary of matters that were said to her by the applicant at about that time.

39. In the weeks before 2 July 2024, Mr Yu sent a “legal letter” to the respondent in respect of those events. The respondent replied to Mr Yu and the applicant, at 10:52 AM that day:

1. proposing a unilateral refund of the fee for the Botox treatment to the applicant “by our company and not by the doctor”, stating that:

From the doctor’s prospective, this is not considered a procedural error but rather a probability issue, which can be easily addressed; hence, the doctor has refused to issue a refund.

2. Stating that the packages constituted a contractual agreement for services that were priced significantly lower than the regular rates, adding:

If you have not fully utilised the package and are now requesting a refund for reasons not caused by our company, we reserve the right to revoke your special discount. You have a right to a refund, but we will deduct the services you have used at their regular prices from your membership card balance. After this deduction, there will likely be no remaining balance on your card.

40. On 30 July 2024, the respondent sent a further email to Mr Yu, calculating two versions of the balance of the applicant’s account: (1) “after applying member discounts” – $2461.52 in remaining package and bonus credits; and (2) “after breaking of the contract” – an outstanding fee (debt due to the respondent) of $1450.40.

41. As noted above, the applicant lodged her claim with the Tribunal on 30 July 2024. On 13 August 2024, the applicant obtained a letter from a Dr. Shelley Hwang, consultant dermatologist at Castle Hill, NSW, who wrote (relevantly, my underlining):

Diagnosis: Transient muscle atrophy from Botulinum Toxin injection.

Thank you for referring Xiaoran. I had the pleasure of reviewing Xiaoran, 33-year-old lady who presents for discussion about Botulinum toxin complications. I understand she received what appears to be a Masseter injection on her bilateral jaw line back in April 2024 at [the respondent]. She reports Dr. Wen Shen Sung at [the respondent] has injected 30 units of Botulin Toxin on her right masseter and 30 units on her left side. She reports that she was not informed of potential side-effects nor expected results relating to Botulinum toxin injections prior to the procedure and that she is not happy he developed irregular muscular appearance on her left jawline. She also reports that she developed yellow/green discolorisation on her left jaw line, which I wonder was temporary bruising which is now resolved. She appears to be mostly upset by the attitude of [the respondent] where no prior consent was obtained from her prior to the procedure being undertaken as well as discussion about potential expected effect and side effects of Botulinum toxin.

I have informed Ms Son that the Botulinum toxin is designed to temporarily paralyse of the injected muscle in this case would be masseter. As Ms Sun wished to know what the potential side effect of Botulinum toxin, I have informed her of the below. Potential side-effects of Botulinum toxin usage included injection site bruising, infection, pain, bleeding, transient muscle weakness, transient dysfunction of the masseter muscle such as difficulty chewing and biting action, irregular appearance of the muscle and potential injury to nearby structures such as masseter nerve. It is also contraindicated against any women who are pregnant or breastfeeding, history of hyper sensitivity reaction to botulinum toxin, or pre-existing motor neuron disease. There are also reported cases of resistance to treatment developed with repetitive use of botulinum toxin.

It appears that the bruising has resolved and the transient muscle atrophy will subside over time. I anticipate that the muscle irregularity will dissipate over the next three to six months. This is a matter for Xiaorun to discuss further with [the respondent] regarding her concerns that she has developed post treatment. I have advised Xiaorun to return back to me if there are any further issues.

42. Dr Hwang’s report was not objected to and she was not cross-examined at the hearing. To the extent that the matters stated in her report are her own observations and conclusions based on her training, study and experience as a consultant dermatologist (which was not objected to or opposed), I accept those matters. To the extent that she merely records statements made to her by the applicant, I accept that evidence only as a record of that conversation, and not of the underlying truth of those matters. Consequently, I find that there was no bruising to the applicant’s face in mid-August 2024, and that there was an ongoing muscle irregularity that was expected to dissipate over the period between then and the date of the hearing.

43. No ongoing muscle irregularity was identified in the applicant’s face at the hearing, including while she gave evidence before me. Consequently, I find that the muscle irregularity reported by Dr. Hwang had subsided by the time the hearing occurred.

44. I accept the evidence given by Ms Bi in her affidavit dated 29 January 2025, and find that as at that date the respondent was in possession of leftover products and materials that it had purchased for providing services to the applicant under the packages that she had purchased, including ampoules of Bioline Jato Vita+ and Sothys moisturiser, cool pads, Cellmuta AquaClean Solution and electro-surgical disposal ground pads that had been purchased and assigned to the applicant.

Consideration – applying the law to the facts as found

(a)   The s 60 (due care and skill) claim

The applicable legal principles

45. Section 60 of the ACL provides:

60   Guarantee as to due care and skill

If a person supplies, in trade or commerce, services to a consumer, there is a guarantee that the services will be rendered with due care and skill.

46. Section 60 expressly requires that services provided to a consumer must be rendered with due care and skill. This statutory obligation enshrines the common law negligence standard into all consumer transactions for the provision of services, to ensure that consumers receive services that meet a certain standard of quality and competence. If a service provider fails to meet this standard, the consumer may be entitled to remedies such as repair, replacement, or compensation.

47. The law of negligence is based on the failure of a person to exercise due care when that person had a legal duty to take reasonable care to avoid injuring or causing loss or damage to another person. Consequently, to establish a negligence claim in common law or a successful claim under s 60, an applicant or plaintiff must prove three key elements: (1) that a duty of care was owed, (2) that the duty was breached, and (3) that the breach of duty caused damage that should be compensated. In greater detail those elements are:

1. Duty of Care: The respondent had a legal obligation to act with a certain standard of care towards the applicant, and that the applicant was within the foreseeable scope of that duty.

2. Breach of Duty: That the respondent’s conduct fell below the required standard of care, meaning they acted unreasonably or failed to take reasonable precautions.

3. Causation: The applicant must demonstrate a causal link between the respondent’s breach of duty and the resulting damage or harm suffered by the applicant, and that the damage concerned was sufficiently proximate – that it was not too remote for the defendant to keep in mind. This means the damage would not have occurred “but for” the defendant’s negligence (factual causation) and was a reasonably foreseeable consequence of the respondent’s breach of duty (scope of liability).

4. Damage: The applicant must have suffered actual harm or injury as a result of the defendant’s negligence.

48. Under negligence law, professionals are required to exercise the level of care and skill that a reasonably competent professional in their field would exercise. As a rule, a professional is not negligent if acting in accordance with a practice that is accepted at that time as proper by a responsible body of opinion even though other professionals adopt a different practice: (the “Bolam” principle):

In short, the law imposes the duty of care: but the standard of care is a matter of medical judgment: Sidaway v Governors of Bethlem Royal Hospital [1985] AC 871 at 881H, per Lord Scarman.

This is often referred to as the “reasonable skill and care” standard and is enshrined in s 5O of the Civil Liability Act 2001 (NSW) (the CL Act). If a professional fails to meet this standard and causes harm or loss, they can be held liable for negligence or, under the ACL, for breach of the guarantee in s 60.

49. A professional may have provided their services with due care and skill even if they did not achieve a particular result, or if the outcome of their work has resulted in some injury, loss or damage to their client. This is because the obligation to exercise due care and skill is about the process and the standard of the professional’s work, and not necessarily the outcome. For example: 

1. Reasonable Efforts: The professional might have taken all reasonable steps and precautions that a competent professional would take under similar circumstances. This includes using appropriate materials, following professional standards, and applying their expertise correctly. 

2. External Factors: Sometimes, factors beyond the professional’s control can affect the outcome. For example, unexpected weather conditions, defective materials not supplied by the professional or the intervention of third parties can impact the final result. 

3. Complexity and Uncertainty: Certain tasks may have inherent complexities or uncertainties that make it difficult to guarantee a specific result or outcome. For instance, diagnosing and fixing an intermittent fault can be challenging, and despite the professional’s best efforts, the issue might not be fully resolved on the first attempt. 

4. Client Instructions: If the client provides specific instructions or constraints that limit the professional’s ability to achieve the desired result, the professional may still be considered to have exercised due care and skill if they followed those instructions competently. 

5. Professional Judgment: The professional might have exercised their professional judgment in a way that was reasonable at the time, even if it did not lead to the desired outcome. Professional judgment involves making decisions based on experience, knowledge, and the information available at the time. 

50. In summary, the standard of due care and skill focuses on the quality and appropriateness of the professional’s actions and decisions, rather than the result which was achieved. This ensures that professionals are judged fairly based on their professional conduct and efforts, rather than solely on the outcome of their work. 

Applying the principles to the applicant’s claim

51. As suggested above, the applicant had the burden of proving all of the elements required to establish her claim against the respondent, but in my assessment she has not done so.

52. When undertaking her facial treatments, the applicant dealt with two entities:

1. the respondent, which provided the venue, packaged the treatments and sold them to the applicant; and

2. the doctor(s) or nurse(s) who performed the treatments.

That distinction is made clear by the PATG Regulation, which provides that only doctors and nursing practitioners may administer Botox injections.

53. Both of those entities owe the applicant a duty of care, however the nature and scope of their respective duties is different:

1. The common law imposes on doctors a duty to exercise reasonable care and skill in the provision of professional advice and treatment: Rogers v Whitaker (1992) 175 CLR 479. That duty is a “single comprehensive duty covering all ways in which a doctor was called upon to exercise his skill and judgment”, extending to the examination, diagnosis and the treatment of the patient and the provision of information in appropriate cases: Gover v South Australia (1985) 39 SASR 543 at 551. Part 1A of the CL Act codifies these principles in New South Wales.

2. The duty owed by the clinic is to exercise the reasonable care and skill normally expected of a similar clinic in the provision of its services.

54. Depending on the circumstances of particular case the duty by the clinic may overlap with the duty owed by the doctor – particularly if the clinic employs the doctor and is vicariously liable for his conduct. However the High Court has rejected the expansion of the doctrine of vicarious liability to relationships outside of employment, such as the acts of independent contractors: Bird v DP (a pseudonym) [2024] HCA 41.

55. While I am satisfied that the respondent supplied services to the applicant in trade or commerce, and that it owed the applicant a duty of care, the applicant has not demonstrated satisfactorily (on the balance of probabilities) the scope of the duty that the respondent owed the applicant in relation to the Botox injection services that she received. The evidence and submissions produced by the respondent both assert that the respondent engaged Dr. Sung as an independent contractor to provide the services that only a doctor can provide under the PATG Regulation. The applicant has not established that Dr. Sung was employed by the respondent. Consequently, the applicant has not established that the respondent is vicariously liable for any breach by Dr. Sung of his duty of care to the applicant. The applicant has also not established that the respondent was under any obligation to act in a particular way with regard to the applicant’s treatment once the applicant was introduced to the doctor.

56. Having failed to establish the scope of the duty of care owed by the respondent to the applicant, the applicant has similarly failed to establish that the respondent failed to discharge its part of the transaction with the due care and skill normally expected of a clinic of this nature. On the evidence before the Tribunal, it appears that the respondent may have adequately discharged its duty of care by introducing the applicant to a professional doctor for that doctor to administer the Botox injections in accordance with his duty of care and the requirements of the PATG Regulation.

57. Separately, I am not satisfied on the evidence that the applicant has suffered any long term damage as a result of the application of the injection. The swelling that she experienced around her jawline, particularly when she bit down, was a known potential side effect of the procedure, and one which has subsided by the time of the hearing. There is no evidence to demonstrate that the applicant has suffered any particular loss in respect of it. Importantly, the applicant has not produced any invoices or other evidence to demonstrate that she has spent any particular amount in seeking advice from her doctors. Noting that the applicant consulted the dermatologist after she commenced these proceedings, I am also satisfied that was a part of her costs of pursuing the proceeding and not a financial loss arising out of any negligence on the part of the respondent, as negligence has not been established.

58. Consequently, the applicant’s claim that the respondent breached s 60 of the ACL must fail.

(b)   The s 61 (nature/quality/state/condition) claim

The applicable legal principles

59. Section 61 of the ACL provides (relevantly to the applicant’s claim):

61   Guarantees as to fitness for a particular purpose etc.

(1)   …

(2)   If:

(a)   a person (the supplier) supplies, in trade or commerce, services to a consumer; and

(b)   the consumer makes known, expressly or by implication, to:

(i)   the supplier; or

(ii)   a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made;

the result that the consumer wishes the services to achieve;

there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result.

(3)   This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier.

(4)   …

60. Section 61(2) imposes a guarantee that the supplier’s services will be “of such a nature, and quality, state or condition” that they “might reasonably be expected to achieve” a result that was disclosed by the consumer to the supplier (etc), except where “the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier”.

61. The plaintiff or applicant has the burden of establishing all of the elements, including that (1) he or she had made known to the supplier a particular result he or she wished the service would achieve, and (2) that the services, and any product resulting from the services, would not reasonably have been expected to achieve that result.

62. By the use of the word “reasonably”, the guarantee is not expressed in absolute terms. The services need only be of such a nature (etc) that they “might reasonably” be expected to achieve the result disclosed by the consumer. The reasonableness standard is confirmed by s 61(3) which provides that the guarantee does not apply if the circumstances show that the consumer did not rely on the skill or judgement of the supplier, or that it was unreasonable for the consumer to rely on their skill or judgement.

Applying the principles to the applicant’s claim

63. The applicant’s evidence and her submissions did not identify any particular result that the applicant wished to achieve from the Botox injection that she received. Further, the evidence does not go so far as identifying whether, or when, the applicant expressly made that result “known” to the respondent. In these circumstances, the Tribunal must look to see whether the applicant made that result known to the respondent by implication.

64. As I identified at [21] above, the Botox injection process uses a neurotoxin to temporarily paralyse muscles in order to reduce the appearance of wrinkles and fine lines by relaxing the underlying muscles. It is fair to conclude that, by submitting herself to undertake the injection process voluntarily, the applicant impliedly made known to the respondent that she wished the process would reduce the appearance of wrinkles and fine lines on her face. I am not satisfied on the evidence before the Tribunal that the applicant made known to the respondent that she wished the injection process would achieve any other result.

65. Botox injections are a well-known and popular method of reducing the appearance of wrinkles and fine lines. The applicant’s evidence was that she had used the procedure before, in China. The respondent’s evidence showed that the applicant had previously undertaken the procedure several times in the respondent’s clinic.

66. Against the weight of that evidence, the applicant has not established that the Botox injection service that she received in the respondent’s clinic in March-April 2024 (regardless of whether it was provided by the doctor or by the respondent) was not of such a nature, quality, state or condition, that it might have reasonably been expected to achieve the result of reducing the appearance of wrinkles and fine lines.

67. I must therefore accept the respondent’s submission that the applicant has failed to discharge the onus established by s 61 of the ACL, to prove that the respondent’s services failed to comply with the guarantee of fitness to achieve a result disclosed by the applicant as being the result that she wished the respondent’s services would achieve.

68. Accordingly, this part of the applicant’s claim also fails.

(c)   The s 21 (unconscionable conduct) claim

The applicable legal principles

69. Sections 21-22A of the ACL provide (my underlining):

21      Unconscionable conduct in connection with goods or services

(1)   A person must not, in trade or commerce, in connection with:

(a)   the supply or possible supply of goods or services to a person; or

(b)   the acquisition or possible acquisition of goods or services from a person;

engage in conduct that is, in all the circumstances, unconscionable.

(2)   …

(3)   For the purpose of determining whether a person has contravened subsection (1):

(a)   the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b)   the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

(4)   It is the intention of the Parliament that:

(a)   this section is not limited by the unwritten law relating to unconscionable conduct; and

(b)   this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

(c)   in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:

(i)   the terms of the contract; and

(ii)   the manner in which and the extent to which the contract is carried out;

and is not limited to consideration of the circumstances relating to formation of the contract.

22 Matters the court may have regard to for the purposes of section 21

(1)   Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

(a)   the relative strengths of the bargaining positions of the supplier and the customer; and

(b)   whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)   whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)   whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e)   the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f)   the extent to which the supplier’s conduct towards the customer was consistent with the supplier’s conduct in similar transactions between the supplier and other like customers; and

(g)   the requirements of any applicable industry code; and

(h)   the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

(i)   the extent to which the supplier unreasonably failed to disclose to the customer:

(i)   any intended conduct of the supplier that might affect the interests of the customer; and

(ii)   any risks to the customer arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

(j)   if there is a contract between the supplier and the customer for the supply of the goods or services:

(i)   the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii)   the terms and conditions of the contract; and

(iii)   the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv)   any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k)   without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

(l)   the extent to which the supplier and the customer acted in good faith.

(2)   …

22A      Presumptions relating to whether representations are misleading

Section 4 [which concerns misleading representations with respect to future matters] applies for the purposes of sections 21 and 22 in the same way as it applies for the purposes of Division 1 of Part 3-1.

70. There is no definition of “unconscionable” in the ACL. As noted in subsection 21(4), the term “unconscionable” in s 21 is not limited by the general law meaning of unconscionable conduct. Consequently, the term must have a different, and wider meaning. Where (as here) the conduct is in relation to a contract that is alleged to be unconscionable, the Tribunal is not limited to considering the circumstances in which the contract was formed, and can consider the terms of the contract and the way, or extent to which the contract is carried out: s 21(4)(c). Whether or not conduct is unconscionable is a decision to be made on the facts, having regard to all relevant circumstances: s 21 (1), provided that those circumstances were reasonably foreseeable when the alleged contravention occurred: s 21(3).

71. Simply put, however, conduct is unconscionable under s 21 if that conduct is not in good conscience, or is irreconcilable with what is right and reasonable, or is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience in the sense that a court should only take the serious step of denouncing conduct as unconscionable when it is satisfied that the conduct is offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society: ACCC v Kobelt [2019] HCA 18; (2019) 267 CLR 1; 93 ALJR 743; 368 ALR 1, per Gageler, Nettle, Gordon and Edelman JJ (Kobelt).

72. Whether or not conduct is against good conscience depends on the values and considerations in the text, structure and context of the ACL – particularly s 22, from other relevant statutes, and from the informing norms of equity and the common law. Most of those values and considerations are those that honest business people understand and do not need expressly to require of each other: ACCC v Quantum Housing Group Pty Ltd [2021] FCAFC 40; Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 321 ALR 584; 236 FCR 199 (“Paciocco FC”), amongst others.

73. The question is whether, objectively determined, the conduct of such a departure from accepted community standards as to warrant it being characterised as unconscionable. Impugning one’s conduct as offending good conscience is a serious matter: Kobelt. To be unconscionable, conduct must be substantially worse than simply being “unfair” or “unjust”; as conduct that is against conscience, it goes against and in a sense of what is right and wrong.

Applying the principles to the applicant’s claim

74. The applicant’s argument that the non-refund term in the respondent’s terms and conditions was unconscionable was not advanced in Mr Yu’s written outline of submissions. Nevertheless, it is appropriate to deal with the assertion as it was set out in the applicant’s Amended Statement of Orders and Reasons. That document asserts (my underlining):

12.   The applicant was induced by the respondent to make pre-deposits for benefits, i.e., discount on services charges. Pre-deposits would usually be deducted by the respondent each time the applicant received services on discounted rates, as claimed by the respondent.

13.   The applicant was never informed by the respondent of its policy on the withdrawal or refund of unused pre-deposits.

14.   The applicant requested withdrawal of unused pre-deposits, the request was declined by the respondent …

15.   The applicant alleges the respondent engages in conduct that is unconscionable by failing to disclose its refund policy to the applicant in relation to the pre-deposits and by declining to refund the pre-deposits.

75. As I have identified above, the applicant’s argument proceeds on a false premise. The applicant did not make “pre-deposits for benefits”; and there was no running balance of deposits which was deducted from each time the applicant received services. To the contrary, the applicant pre-purchased multiple services in bulk as part of a “package” at a discounted price. Records were kept, stating the number and type of services that were purchased in each bundle, and entries were made in those records each time the applicant claimed, or redeemed, one of the services that she had pre-purchased. In this way, there is very little difference between the arrangement between the parties and a similar arrangement where a customer buys a book of vouchers, each of which can be exchanged for the provision of a specified service at a time in the future.

76. Secondly, the applicant’s argument that she was never informed by the respondent of its policy on the withdrawal or refund of unused pre-deposits (or, more accurately, its policy on the refund of money paid on individual packages) is disproved by the terms and conditions that the applicant signed on for August 2022, when she began her relationship as a customer of the respondent. Those terms and conditions clearly identified, as a term of doing business with the respondent, that purchasers were non-refundable cash payments made would be used towards ordering materials and products required for the customer’s treatment, although purchasers made online or in-store could be transferred to another party within its validity date (two years from the date of payment).

77. I do not accept as true the applicant’s evidence that she was told that she would be participating in a “pre-deposit scheme” or that by participating in the scheme she would be making pre-deposits into the respondent’s account. I also do not accept the applicant’s evidence that she did not sign any contract or agreement provided by the respondent, or that she was not informed about any terms and conditions that regulate withdrawals and/or the refund of unused payments (“pre-deposits”, or otherwise).

78. I find that the true position was that the applicant acknowledged and accepted the respondent’s trading terms when she signed a copy of those terms and conditions and provided it to the respondent.

79. I am satisfied on the evidence that there was nothing about the circumstances in which those terms and conditions was signed or in which the applicant purchased packages from the respondent. I particularly accept as reasonable the respondent’s evidence that the purchase price paid by the applicant for those bulk packages was used to pre-purchase the materials and products that would be used in the packaged services, when they were redeemed.

80. Lastly, I accept as likely on the balance of probabilities the evidence given by Ms Soo in her affidavit dated 15 October 2024, to the effect that when she introduced the respondent’s beauty packages to the applicant the applicant said words to the effect of “Can I get a refund if I do not want to finish the package?” And that Ms Soo responded in words to the effect of “No, Lumi’s policy says you cannot get any refund, but Lumi can refund you store credit for other services”. I conclude from this evidence and from the terms and conditions signed by the applicant that the respondent had disclosed to the applicant the substance and effect of its policy against refunds before the applicant purchased treatment packages from the respondent.

81. The applicant’s claim that the respondent engaged in unconscionable conduct therefore also fails.

(d)   The s 23 (unfair contract terms) claim

The applicable legal principles

82. Sections 23-25 of the ACL provide (relevantly, my underlining):

23 Unfair terms of consumer contracts and small business contracts

(1)   A term of a consumer contract … is void if:

(a)   the term is unfair; and

(b)   the contract is a standard form contract.

(2)   The contract continues to bind the parties if it is capable of operating without the unfair term.

(2A)   A person contravenes this subsection if:

(a)   the person makes a contract; and

(b)   the contract is a consumer contract …; and

(c)   the contract is a standard form contract; and

(d)   a term of the contract is unfair; and

(e)   the person proposed the unfair term.

Note: A pecuniary penalty may be imposed for a contravention of this subsection: see section 224.

(2B)   A person who contravenes subsection (2A) commits a separate contravention of that subsection in respect of each term that is unfair and that the person proposed.

(2C)   A person contravenes this subsection if:

(a)   the person applies or relies on, or purports to apply or rely on, a term of a contract; and

(b)   the contract is a consumer contract …; and

(c)   the contract is a standard form contract; and

(d)   the term is unfair.

Note: A pecuniary penalty may be imposed for a contravention of this subsection: see section 224.

(3)   A consumer contract is a contract for:

(a)   a supply of goods or services; or

(b)   a sale or grant of an interest in land;

to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.

(4)   …

(5)   …

(6)   …

(7)   …

24 Meaning of unfair

(1)    A term of a consumer contract or small business contract is unfair if:

(a)    it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and

(b)    it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and

(c)   it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

(2)    In determining whether a term of a contract is unfair under subsection (1), a court may take into account such matters as it thinks relevant, but must take into account the following:

(a)   the extent to which the term is transparent;

(b)   the contract as a whole.

(3)   A term is transparent if the term is:

(a)   expressed in reasonably plain language; and

(b)   legible; and

(c)   presented clearly; and

(d)   readily available to any party affected by the term.

(4)   For the purposes of subsection (1)(b), a term of a contract is presumed not to be reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, unless that party proves otherwise.

25 Examples of unfair terms

Without limiting section 24, the following are examples of the kinds of terms of a consumer contract or small business contract that may be unfair:

(a)   a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract;

(b)   a term that permits, or has the effect of permitting, one party (but not another party) to terminate the contract;

(c)   a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract;

(d)   a term that permits, or has the effect of permitting, one party (but not another party) to vary the terms of the contract;

(e)   a term that permits, or has the effect of permitting, one party (but not another party) to renew or not renew the contract;

(f)   a term that permits, or has the effect of permitting, one party to vary the upfront price payable under the contract without the right of another party to terminate the contract;

(g)   a term that permits, or has the effect of permitting, one party unilaterally to vary the characteristics of the goods or services to be supplied, or the interest in land to be sold or granted, under the contract;

(h)   a term that permits, or has the effect of permitting, one party unilaterally to determine whether the contract has been breached or to interpret its meaning;

(i)   a term that limits, or has the effect of limiting, one party’s vicarious liability for its agents;

(j)   a term that permits, or has the effect of permitting, one party to assign the contract to the detriment of another party without that other party’s consent;

(k)   a term that limits, or has the effect of limiting, one party’s right to sue another party;

(l)   a term that limits, or has the effect of limiting, the evidence one party can adduce in proceedings relating to the contract;

(m)   a term that imposes, or has the effect of imposing, the evidential burden on one party in proceedings relating to the contract;

(n)   a term of a kind, or a term that has an effect of a kind, prescribed by the regulations.

83. As noted by Edelman J in ACCC v Chrisco Hampers Australia Limited [2015] FCA 1204 (Chrisco) at [38], s 24(1) requires the three elements in (a) to (c) to be satisfied before a term of a consumer contract is unfair. Assessment of whether a contract is unfair is evaluative, to be carried out with a close attendance to the statutory terms: Paciocco FC at [363]-[364], where Allsopp CJ also stated, “Unjustness and unfairness are of a lower moral or ethical standard than unconscionability”.

84. Further, as stated in Chrisco at [43], there are a number of matters concerning the construction of s 24:

(1)    for a term to be unfair it must satisfy the requirements of all of s 24(1)(a) to (c);

(2)   the onus is upon the applicant to prove the matters in ss 24(1)(a) and 24(1)(c) but it is upon the respondent in relation to s 24(1)(b);

(3)    s 24(2)(a) only requires the Court to consider transparency in relation to the particular term that is said to be unfair and only in relation to the matters concerning that term in s 24(1)(a) to (c);

(4)    similarly, the assessment of the contract as a whole in s 24(1)(c) only requires the Court to consider the contract as a whole in relation to the particular term that is said to be unfair and only in relation to the matters concerning that term in s 24(1)(a) to (c);

(5)    as the Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (Cth) provided at [5.39], “if a term is not transparent it does not mean that it is unfair and if a term is transparent it does not mean that it is not unfair”; and

(6)    guidance can be had to s 25 which provides examples of unfair terms.

85. The requirement of significant imbalance is met if a term is so weighted in favour of the supplier has to tilt the parties’ rights and obligations under the contract significantly in its favour: Director General of Fair Trading v First National Bank Plc [2001] UK HL 52, as adopted by Edelman J in Chrisco at [47]-[50]. A lack of individual negotiation of the contracts between the parties is not relevant to whether the term cause a significant imbalance in the parties rights and obligations arising under the contract: Jetstar Airways Pty Ltd v Free [2008] VSC 539 [12]; Paciocco v Australia and New Zealand Banking Group Ltd [2014] FCA 35 [331].

Applying the principles to the applicant’s claim

86. The applicant’s Amended Statement of Orders and Reasons asserted at [16]:

In the alternative, the applicant alleges that even if there exists a refund policy, terms of the policy are unfair terms for the reason:

i.   Those terms cause a significant imbalance in the parties’ rights and obligations;

ii.   It is not necessary in order to protect the legitimate interests of the respondent;

iii.   It would cause financial detriment to the applicant.

The applicant’s right to demand withdrawal of unused pre-deposits is based on the fact that the unused pre-deposits are not yet used for services not yet rendered by the respondent.

By its re-adjustment of already rendered services, the respondent is double-charging the applicant in an attempt to deny the applicant’s right by effectively diminishing the amount of remaining pre-deposits.

87. In his written outline of submissions, Mr Yu asserted that the non-refund policy was unfair because:

27   The non-refund term is unfair for the reason:

a.   It would cause a significant imbalance in the parties’ rights and obligations.

The balance sitting in Lumi’s account underspent pre-deposits and due to [the applicant] no longer attends the clinics, these money will not be spent in the future.

If Lumi is allowed to retain the money without it providing any service to [the applicant] it is such a significant imbalance in the parties’ rights and obligations by asking [the applicant] she has not consumed.

b.   [The applicant] relies on the presumption of section 24 (4) of the ACL.

c.   It would cause detriment to a party

Without saying, by paying for what she has not consumed under the non-refund term [the applicant] is suffering financial detriment.

d.   In addition, the non-refund term is not transparent.

88. After referring to the 3 cumulative criteria in s 24(1) and the Appeal Panel’s decision in AWD Cavallo Investments Pty Ltd v Smokevitch [2021] NSWCATAP 183 at [10], the respondent argued:

18.   In relation to s 24(1)(a) of the ACL, the respondent submits:

a.   The term “significant imbalance” is considered in Abraham v Gogetta Equipment Funding Pty Ltd, which adopted Cavanagh J’s conclusion in Jetstar Airways Pty Ltd v Free [at 105], that the word “significant” means at least “significant in magnitude or “sufficiently large to be important”.

b.   In this case:

i.   The non-refund term was transparent as the Applicant signed the T&C which contains said term; and

ii.   The Applicant was provided with a copy of the T&C issued by the Respondent, and she signed the T&C acknowledging that she accepts the terms of the T&C.

iii.   The respondent:

1.   Implements a strict policy of requiring its customers to review and sign T&C before any service is provided;

2.   Had its employee informed Shelley of the Respondent’s non-refund policy on a number of occasions.

iv.   The respondent’s adduced evidence of materials purchased by the Respondent for the purpose of providing beauty services to Shelley.

19.   In these premises, there is no significant imbalance between the parties that are sufficiently large to be important, where the Applicant paid for a service, which the Respondent incurred costs preparing for, in circumstances where the Applicant is entitled to either a refund by way of store credit, or by way of assignment to 1/3 party for valuable consideration had her sole discretion. Even if there are imbalance between the parties, the Respondent submits the imbalance is not of a significant magnitude, for sufficiently large to be important.

20.   In relation to s 24 (1)(b) of the ACL, the Respondent concedes it is the party that would be advantaged by the term, and submits the term is reasonably necessary to protect the Respondent’s interests, as the Respondent would have:

a.   Incurred costs purchasing the products required perform the services purchased by the Applicant; and

b.   Incurred cost maintaining its staff to ensure that it is sufficiently and adequately staffed to meet the Applicant’s needs as the Applicant is entitled to attend the Respondent’s business and have the services performed on an ad hoc basis.

21.   In relation to s 24 (1)(c) of the ACL, the respondent submits the T&C does not prevent the Applicant from converting her interest in the services into valuable consideration, as it expressly permits the Applicant to assign her interest in the services she purchased to any third party at her sole discretion. There are no bar preventing the Applicant from doing so.

22.   Taking into account the cumulative criteria of s 24 (1) of the ACL, the Respondent respectfully submits that the Tribunal should not make a finding that the non-refund term in the form set out in the Respondent’s T&C is an unfair term.

23.   In light of the above, the Respondent submits:

a.   The Applicant is entitled to a full refund of $4,653, for the promotional beauty package that was entirely unused;

b.   Taking into account paragraph 8(a)(ii)(2), and paragraph [23(a)] in this submissions, the Applicant’s refund claim, taken at its highest, entitles the Applicant to a total refund of $6,206.52.

c.   The Respondent’s claim for a refund of $13,412 is therefore misconceived.

24.   In the circumstances, the Tribunal should dismiss the Applicant’s application with costs.

Paragraph 8(a)(ii)(2) and (3) of those submissions had acknowledged that the remaining services in the 5 promotional beauty service packages partly completed by the applicant was $1,553.52, and that the value of the unused promotional beauty service package was $4,653 – a total of $6,206.52.

Would the no-refund term cause a significant imbalance in the parties’ rights and obligations arising under the contract?

89. Contrary to the submission made by Mr Yu, there was no balance of “unspent pre-deposits” sitting in the respondent’s account. The ultimate issue arising on the applicant’s claim is whether any of the services that the applicant has paid for and not used should be redeemed for cash, instead of being used.

90. Regardless of the presence of the no-refund clause, the applicant had the ongoing right to use the beauty services provided by the respondent that she had paid for. She also had an ongoing right to transfer those services to another party. Those rights have significant value, compared to the unused parts of the respondent’s services that were purchased by the applicant.

91. The no refund term was drafted in short form, in plain and simple English, very close to the place on the terms where the applicant was asked to sign the form. Both it and the terms and conditions as a whole were expressed in reasonably plain language, were legible, were presented clearly and were readily available to the parties affected by the term.

92. Adopting the principles set out in the authorities discussed above, and applying it to these facts, I am not satisfied that the no-refund term causes, or would cause, a significant imbalance in the parties rights and obligations arising under the contract.

Is it not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term?

93. The respondent is clearly the party advantaged by the no-refund term. I accept the respondent’s submission that the respondent has incurred costs buying the products required perform the services purchased by the applicant: and has incurred costs of maintaining its staff to ensure that it was sufficiently and adequately staffed to meet the applicant’s needs, on the basis of the applicant was entitled to attend the respondents business and have the services performed on an ad hoc basis.

94. I am satisfied, as a matter of practicality, that the respondent the purchase prices paid by the applicant to buy products and materials so that it can be ready to provide the services purchased by the applicant as and when she wished to redeem those services. Those products were set aside for use with and on the applicant, marked with her name, and could not be used for anyone else. As shown on the invoice produced by the respondent, those products and materials often have significant value. The respondent would therefore incur losses in disposing of those products if the applicant was entitled to a refund for the services that she has not used. There was no way that the respondent could offset or ameliorate those losses without being able to retain at least some of the money the applicant had pre-paid to purchase those services.

95. Separately, I also accept the submission that the purchase prices paid for those packages represented significant discounts compared to purchasing the equivalent of services on a one-by-one basis.

96. In my assessment, by virtue of these matters, the respondent has proved that the no refund term is reasonably necessary in order to protect the respondent’s legitimate interests, as the party who is/would be advantaged by the term.

Would the no-refund term cause detriment to a party if it were to be applied or relied on?

97. At a superficial level, the no-refund term prevents the applicant from recovering the money that she has paid for services that she has not used. However, the no-refund term gives the applicant an alternative to simply forgoing the money that she has pre-paid in that event. The term expressly permits the applicant to assign her interest in the unused services that she has purchased to any third party at her sole discretion, without restriction or bar, provided that is done within the two-year period the applicant has to redeem those services.

98. That right has value which must be taken into account in determining whether the term would cause detriment to the applicant if it were to be applied or relied on, as that right potentially ameliorates or offsets the detriment that the no-refund term causes the applicant.

99. Balancing those items, while I accept that the no-refund term causes some detriment to the applicant if it was relied on, by preventing her from recovering the money that she has spent, I do not consider that detriment to be substantial as the applicant always has the right up until the services expire to either use the services that she has purchased or to transfer them to someone else, such as family or friends.

Conclusion on the unfair contract terms claim

100. For the applicant to succeed on the unfair contract terms claim, she had to prove all three of the elements listed in s 24(1). While I am satisfied that there is a financial detriment to the applicant if the no-refund term was applied or relied on, the applicant has failed to prove that the term would cause significant imbalance in the parties rights and obligations under the contract, or that the no-refund term was not reasonably necessary in order to protect the respondent’s legitimate interests. Consequently, the unfair contract terms claim also fails.

Conclusion and orders

101. The applicant has failed to prove all four of the claims that she has made against the respondent. Consequently, while the applicant should receive the $4,653 conceded by the respondent, the balance of the claim must be dismissed.

102. I note that s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) provides that each party to proceedings in the Tribunal is to pay that party’s own costs, although the Tribunal may award costs in relation to proceedings if it is satisfied that there are “special circumstances warranting an award of costs”. Nevertheless, the parties wished to be separately heard on the question of costs. The Tribunal will therefore make orders providing for each party to pay their own costs as a default position, but allowing both parties to make submissions in respect of costs if they seek a different order. In doing so, the parties should also make submissions on whether a hearing can be dispensed with so that the issue of costs can be determined on the papers.

103. The Tribunal therefore makes the following orders:

1. By consent, the respondent, Lumi Skin Clinics Pty Limited must pay the applicant, Xiaoran Sun the sum of $4,653.00 immediately.

2. The application is otherwise dismissed because the Tribunal is not satisfied to the civil standard (being the balance of probabilities) on the material put before it that there are grounds for the Tribunal to make the orders sought by the applicant.

3. Subject to order (4), each party is to pay that party’s own costs of the proceedings.

4. If either party wishes to seek a different costs order to that set out in order (3), then:

1. that party (the “costs applicant”) is to provide to the other party (the “costs respondent”) and to the Tribunal written submissions (strictly not exceeding 4 pages) setting out the costs order they contend for and the reasons relied on for seeking that order, together with any other relevant documents or material, within the 7 days after the date this decision is issued to the parties;

2. the costs respondent is to provide to the costs applicant and to the Tribunal written submissions in response (strictly not exceeding 4 pages) setting out the reasons relied on against making that order, together with any other relevant documents or material, within the 14 days after the date this decision is issued to the parties; and

3. the parties submissions are to address the question of whether a hearing on costs can be dispensed with under s 50 of the Civil and Administrative Tribunal Act 2013 (NSW), with the intent that the costs issue will be determined on the papers.

5. The Tribunal is satisfied pursuant to s 79U of the FT Act that this order will be fair and equitable to all parties to the claim.

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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

Decision last updated: 26 May 2025