AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd

[2010] NSWSC 1395

CITATION:	AMI Australia Holdings Pty Ltd & anor v Fairfax Media Publications Pty Ltd & ors [2010] NSWSC 1395 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	26, 27, 28 October 2009, 24, 25, 26 February, 1, 19 March 2010
JUDGMENT DATE :	2 December 2010
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
DECISION:	Order for delivery up of certain material provided to first, third and fourth defendants by second defendant. Proceedings otherwise dismissed.
CATCHWORDS:	TORTS – Miscellaneous torts – Other economic torts – Injurious falsehood – elements – malice – whether malice established – EQUITY – Equitable remedies – Injunctions – Injunctions for particular purposes – Other cases – to restrain breach of confidence – by third parties (journalists) – whether journalists knew or ought to have known that provision to them of the information involved a breach of confidence – where information provided by whistleblower – whether information had requisite quality of confidentiality
LEGISLATION CITED:	(NSW) Medical Practice Act 1992 s 105 (UK) Restrictive Trade Practices Act 1956 4 & 5 Eliz 2, c 63
CATEGORY:	Principal judgment
CASES CITED:	A v Hayden (No 2) (1984) 156 CLR 532 AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 Annesley v Earl of Anglesea (1743) 17 State Trials 1139 Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341 Australand Holdings Ltd v Transparency & Accountability Council Inc [2008] NSWSC 669 Australian Broadcasting Corporation v O’Neill [2006] HCA 46(2006) 227 CLR 57 Bacich v Australian Broadcasting Corporation (1992) 29 NSWLR 1 Beechwood Homes (NSW) Pty Ltd v Camenzuli [2010] NSWSC 521 Beloff v Pressdram Ltd [1973] 1 All ER 241 British Industrial Plastics Ltd v Ferguson (1940) 58 RPC 1 British Railway Traffic & Electric Co Ltd v CRC Co Ltd & London County Council [1922] 2 KB 260 Broderick Motors Pty Ltd v Rothe (1986) Aust Tort Rep 80-059 Browne v Dunn (1893) 6 R 67 Castol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 51 FLR 184 Church of Scientology of California Incorporated v Reader’s Digest Services Pty Ltd [1980] 1 NSWLR 344 Coco v A N Clark (Engineers) Limited [1969] RPC 41 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 David Syme & Co Ltd v General Motors-Holden’s Ltd [1984] 2 NSWLR 294 Dickson v Earl of Wilton (1859) 1 F&F 419, 427; 175 ER 790 Exchange Telegraph Co Ltd v Central News Limited [1897] 2 Ch 48 Exchange Telegraph Co Ltd v Howard & The London & Manchester Press Agency Ltd (1906) 22 TLR 375 Fraser v Evans [1969] 1 QB 349 Gilbert v Star Newspaper Co Ltd (1894) 11 TLR 4 Greers Ltd v Pearman & Corder Ltd (1922) 39 RPC 406, 417 Horrocks v Lowe [1974] 1 All ER 662 Initial Services Ltd v Putterill [1968] 1 QB 396 John Fleming, The Law of Torts, 9th ed (1998) LBC Information Services at 780 Joyce v Sengupta [1993] 1 All ER 897 Kaplan v Go Daddy Group [2005] NSWSC 636 Kaye v Robertson (1990) 19 IPR 147 Liquid Veneer Co v Scott (1912) 29 RPC 639 London & Provincial Sporting News Agency Ltd v Levy (1928) Mac G Cop Cas (1923-28) 340 Morison v Moat (1851) 9 Hare 241, 68 ER 492 National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 128 FLR 334 Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 Prince Albert v Strange (1849) 1 Mac & G 25, 41 ER 1171 Ratcliffe v Evans [1892] 2 QB 524 Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57 Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 Shapiro v La Morta [1923] All ER Rep 378 Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Department of Community Services (1990) 22 FCR 73 Spring v Guardian Assurance PLC [1993] 2 All ER 273 Spring v Guardian Assurance PLC [1995] 2 AC 296 Stuart v Bell [1891] 2 QB 341 Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419 Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1 Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796 Westpac Banking Corporation v John Fairfax Group Pty Ltd (1991) 19 IPR 513 Wilts United Dairies Ltd v Thomas Robinson Sons & Co Ltd [1957] RPC 220; Wilts United Dairies v Thomas Robinson [1958] RPC 94 Woodward v Hutchins [1977] 1 WLR 760; [1977] 2 All ER 751 Worth Recycling Pty Ltd v Waste Recycling & Processing Pty Ltd [2009] NSWCA 354 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317
TEXTS CITED:	J Fleming, The Law of Torts, 9th ed (1998) LBC Information Services JCC Gatley, P Lewis, JE Previte and RW Ground, Gatley on Libel and Slander, 8th ed (1981) Sweet & Maxwell
PARTIES:	AMI Australia Holdings Pty Ltd (first plaintiff) Advanced Medical Institute Pty Ltd (second plaintiff) Fairfax Media Publications Pty Ltd (first defendant) Rita Almohty (second defendant) Kelly Burke (third defendant) Kate McClymont (fourth defendant)
FILE NUMBER(S):	SC 09/289188
COUNSEL:	Mr M Green w Dr E Peden (plaintiffs) Mr D Sibtain w Mr M Polden (first, third & fourth defendants)
SOLICITORS:	Bruce Stewart Dimarco (plaintiffs) TresCox Lawyers (second defendant) Johnson Winter & Slattery (first, third & fourth defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Thursday, 2 December 2010

2009/289188 AMI Australia Holdings Pty Limited & Anor v Fairfax Media Publications Pty Limited & 3 Ors

JUDGMENT

1 HIS HONOUR: The plaintiffs AMI Australia Holdings Pty Limited and Advanced Medical Institute Pty Limited (together, “AMI”) market and supply to the public medical goods and services for the treatment of sexual dysfunction, in particular premature ejaculation (PE) and erectile dysfunction (ED) in male patients. The first defendant Fairfax Media Publications Pty Limited (“Fairfax”) proposes, unless restrained, to publish in its newspapers an article, authored by its employed journalists the third defendant Ms Kelly Burke and the fourth defendant Ms Kate McClymont, unfavourable to AMI. AMI claims injunctive and other relief against Fairfax and the journalists, alleging that the proposed article (1) has been written and would be published by the journalists using information received by them from the former second defendant Dr Rita Almohty (a doctor and former employee of AMI, with whom AMI has since reached a settlement) in circumstances which they knew or ought to have known involved a breach of confidence, and (2) contains falsehoods the publication of which would be malicious and injurious to AMI’s business.

2 In the course of the proceedings before trial, Fairfax was required to particularise the allegations pertaining to AMI that it proposed to publish, and did so in five paragraphs of “further particulars” which, for the sake of convenience although somewhat imprecisely, I have called “imputations”. While that characterisation is imprecise – inter alia because not only does AMI not sue in defamation, but also AMI’s case is that the assertions involve a combination of breach of confidence and injurious falsehood – it is a convenient shorthand description, by which they can be identified. The five imputations are as follows:

1. For at least 18 months prior to early 2009, it was the practice of AMI to pay its doctors commissions on the basis of the number of telephone consultations which they performed, so as to provide doctors with a financial incentive to keep those consultations brief and to maximise the volume of prospective purchasers of AMI’s products and services, regardless of the patient’s best interests.

2. For at least 18 months prior to early 2009, it was the practice of AMI to reprimand and threaten doctors with having their employment terminated if they mentioned to patients too many side effects of the products and services recommended by doctors employed by AMI, or told patients that part of the treatment for which they would contract if they entered into contract with AMI for its goods and services included penile injections, so as to ensure that patients were not put off by the unattractive features of the products and services for which they might contract.

3. For at least 18 months prior to early 2009, it was the practice of AMI customer service operators to tell patients misleading information regarding treatments, namely that patients would get the best results when using AMI products for one-two years, when there was no scientific evidence to support such a claim, and that AMI condoned that practice.

4. For at least 18 months prior to early 2009, it was the practice of AMI to permit its customer service operators and nurses to provide medical advice which could only properly be given by a registered medical practitioner to prospective customers and to prepare prescriptions for those customers, and then for those prescriptions to be signed by medical practitioners when such a mode of providing prescriptions was not in accordance with good medical practice or otherwise in the best interests of the patient.

5. During at least an 18-month period prior to 2009, AMI employed at least two doctors who, to its knowledge, were subject to continuing supervision from the NSW Medical Board.

3 AMI contends that publication of each of those five imputations would involve a use of information received by the journalists, from Dr Almohty, with notice that Dr Almohty was breaching obligations of confidence owed by her to AMI; the journalists’ “notice” is said to be that they knew that their source was employed by AMI and was legally bound not to disclose such information, and/or that the information was self-evidently “confidential” by its very nature, being information relating to the internal workings of AMI’s business, and communications between doctors and patients. Further and alternatively, AMI contends that each of the five imputations contains elements which are false, and which lead to an overall falsity of the imputation; that the falsity has been demonstrated so as to dispel any just cause or excuse for their publication; that the defendants’ behaviour is such as to require a finding of malice; and that publication would be injurious to AMI’s business, employees and consultants. In substance, AMI seeks permanent injunctions restraining the defendants from publishing the five imputations, and orders for the delivery up and return of the material provided to them by Dr Almohty.

Background

4 AMI’s business is conducted primarily by telephone consultation. (Although face-to-face clinics may be offered if a patient prefers, the evidence suggests that men prefer the anonymity and convenience of telephone consultations). Upon a prospective patient telephoning AMI, the call is first put through to a “clinical co-ordinator”, who obtains some relevant information about the presenting problem from the caller. The call is then transferred to a medical practitioner, who obtains a medical and sexual history and, if considered appropriate, recommends and prescribes a treatment. The call is then returned to the clinical co-ordinator, who completes the sale by negotiating a contract for the supply of the prescribed medicines.

5 Dr Almohty was first employed by AMI as a medical practitioner in about July 2006, on $900 per day, consulting males with sexual dysfunction over the telephone. A couple of months after commencing employment, she executed a “Confidentiality Deed Poll”, by which she agreed:

1. I will not directly or indirectly:
(a) disclose Confidential Information to any person;
(b) use Confidential Information;
(c) copy or reproduce Confidential Information; or
(d) remove any Confidential Information from Advanced Medical Institute Pty Limited’s premises,
except as is necessary for the proper performance of my duties or to the extent required by law.

6 “Confidential Information” was defined in the Deed to mean information relating to the business of AMI, including inter alia information of a business sensitive nature, business contact information, information relating to terms of business which AMI maintains with its consultants, customers or suppliers, medical records, operating manuals, policies and procedures manuals and training manuals.

7 Dr Almohty first left AMI in about October 2006, to work elsewhere. She returned, initially on a casual basis, in about January 2007, working eleven days at $900 per day between then and April 2007, when she resumed fulltime employment with AMI. She says that in about February 2008 she was given a form of letter of engagement, which she sent to her medical defence organisation but did not sign. However, Ms Nicole Andrade, who was an administrative assistant at AMI, says that she witnessed Dr Almohty’s signature on the letter on 14 January 2008.

8 Dr Almohty was called on subpoena to give evidence in the defendants’ case – in circumstances where, ultimately, she had reached a settlement with AMI before trial, by which she agreed, to the extent permitted by law, not to participate further in the proceedings nor to co-operate with the defendants; she also provided to AMI a statutory declaration, in which she declared that she did not know of any conduct that could be described as a ‘practice of AMI’ in relation to imputations 1, 2, 3 or 4; that she was never paid a commission by AMI; that her contract was not terminated because she mentioned side effects of AMI’s products and services; that she did not consider herself qualified to express an expert opinion as to whether literature about the efficacy of medical products containing some of the same ingredients as AMI’s products for extended periods should be accepted; and that she was not under supervision and had not been responsible for supervising any doctor consulting to AMI. In my view, this statutory declaration is of significance. While it was “induced” in the sense of being an obligation associated with the settlement of the proceedings as against her, I am confident that Dr Almohty was prepared to go no further than strictly required by way of co-operation (for example, her concession about “commission” was based on a particular strict construction of the term “commission”). The court can be comfortably satisfied that, insofar as she made concessions in that statutory declaration, they were literally correct.

9 Although she appeared careful and precise in giving her evidence in some respects, and not to overstate the position when addressing matters of objective fact, it is clear that she was motivated by a conviction that AMI had various inappropriate practices which she wished to expose, and a belief that she had acted properly in endeavouring to do so, as a result of which, where there was room for her to draw an inference from, or interpret, objective facts, she was inclined to draw the worst or most extreme conclusion adverse to AMI. One illustration of this was her evidence to the effect that patients might be “forced” to have penile injections; it transpired that it was a condition of AMI’s refund policy that a patient try all treatments recommended, which Dr Almohty portrayed as some compulsion to accept a particular form of invasive therapy, as she became astute to point out to patients. Although ultimately – after what seemed to be some hesitation – she did not seek to resile from her statutory declaration, she was far from impartial. She was determined to do what she could to expose conduct on the part of AMI that she described – and believed to constitute not only bad medical practices but even “criminal” activity. Her evidence was demonstrated to be wrong in some material respects: in particular, it became manifest that she was not deterred from warning patients about possible side effects and penile injections; she asserted that a “doctor’s script” (to be read to female patients over the phone) was on her desk in 2007, when she ultimately accepted that no script for female patients existed until about July 2008; and although she maintained that there was a “male” doctor’s script, other evidence does not support that contention. Accordingly, her evidence must be treated with considerable caution.

10 In particular, I am unable to accept Dr Almohty’s denial that she signed the engagement letter, or her suggestion that her signature might have been traced onto it. Ms Andrade was unshaken in her evidence of the circumstances in which she maintained that Dr Almohty had executed it. The signature, as it appears on the document, is well within the range of variation of Dr Almohty’s signature as demonstrated by other specimens of her signature in evidence, and indeed bears striking similarities to many of them. The handwriting of the date that accompanies it is also notably similar, particularly the figure “5”. There is nothing to suggest tracing, and indeed tracing would improbably produce so fluent a replica. I am satisfied that Dr Almohty signed the engagement letter as Ms Andrade described.

11 By the engagement letter, Dr Almohty agreed not to use or disclose confidential information of AMI – except where AMI had given its prior written consent, or in the proper course of performing the services she was required to render and for the benefit of AMI, or to the extent required by law. She also agreed to take all reasonable steps to prevent the unauthorised disclosure or use of the confidential information, and not to copy or remove from AMI’s premises any documents containing confidential information without the prior written consent of AMI. For these purposes, “Confidential Information” was defined to mean:

All information which relates to the business and affairs (financial and otherwise) of AMI and its related entities (including information which is in oral, visual, or written form or is recorded in any other medium), and includes:
(a) information which is marked confidential or which is described or treated by AMI or its related entities as confidential;
(b) information of a business sensitive nature;
(c) personal information as defined in the Privacy Act 1998 (CTH);
(d) medical reports or other reports prepared in relation to the services;
(e) trade secrets; and without limiting the generality of the above
(i) the names, addresses, medical records and other personal details of AMI’s patients and the patients of its related entities (patient information);
(ii) the names and addresses and other personal details of AMI’s and its related entities’ employees, contractors, clients and suppliers of AMI and its related entities (including without limitation pharmacies, doctors, nurses, administration staff, sales staff and AMI’s patients);
(iii) the terms upon which AMI or its related entities contract with or proposes to contract with current, proposed or previous employees, contractors, clients and suppliers;
(iv) financial and marketing information;
(v) business plans and forecasts;
(vi) any know how, trade secrets, ideas, concepts, technical and operational information, arising or used by AMI or its related entities in relation to their businesses;
(vii) the terms of this letter;
(viii) product and service composition and formulae;
(ix) treatment manuals and methods;
(x) operating manuals, policies and procedures manuals and training manuals; and
(xi) software and other business processes, documents and information.

12 At some stage in or about 2007, Dr Almohty’s remuneration changed, although her evidence as to how is somewhat vague. Instead of $900 per day, she received $900 per day plus $10 for each patient consulted. Later – probably in 2008 – she says that she sought a pay increase, and was offered $50 per patient, which she declined on the basis that it would be less than what she was earning; then she was offered $10 per patient after the first ten, which she apparently accepted, although it is difficult to see how that amounts to any increase on $900 per day.

13 By the first half of 2008, Dr Almohty had developed concerns at what she perceived to be some practices of AMI – in particular, that after a patient’s telephone consultation with the doctor was completed and returned to the clinical consultant, clinical consultants were giving patients what she believed to be inappropriate medical advice, and that she was being discouraged from referring fully to potential side effects of medication and suggesting that patients consult their GP. In the first half of 2008, she claims to have made recordings of about 30 such telephone conversations between patients and clinical consultants, with a view to having evidence that could exculpate her in respect of liability for any such advice and, possibly, could be referred to appropriate authorities. However, those recordings have been lost. In early 2009, she recorded eight further such conversations, which were downloaded to a CD and are in evidence.

14 Dr Almohty claims that as a result of her concerns, she commenced to take home and retain her patient consultation notes; and that AMI’s CEO Dr Jacov Vaisman learnt of this and told her that the notes belonged to AMI, but agreed to her request that she be permitted to have them copied and to retain the copies for her own use. The patients were not likely to be recurrent, and if they were there was little prospect that they would be referred again to the same doctor. It would have been manifest to Dr Vaisman that Dr Almohty had little real requirement to retain copies for her own use. On Dr Almohty’s own evidence, Dr Vaisman had previously successfully sued a doctor who had sought to retain patient notes. To my mind, in the light of these considerations, coupled with the confidentiality obligations deliberately imposed by the engagement letter, and his track record, it is improbable in the extreme that Dr Vaisman gave such permission, and I do not accept that he did so.

15 Dr Almohty ceased to work for AMI in March 2009 when, following a couple of weeks’ absence – one for a holiday and the second for illness – she was not rostered on for shifts and, upon inquiring why, was told that her services were no longer needed

16 The Sydney Morning Herald, a Fairfax newspaper, published articles critical of AMI, authored by Ms Burke and Ms McClymont, on 23, 24, 25 and 26 May 2009. Dr Almohty contacted the journalists on or about 25 May 2009, and on 27 May, she met Ms McClymont, Ms Burke, and Ms Valentine at a café in the inner western suburbs of Sydney. She took with her and gave to them her patient consultation notes and other material, and participated in an interview in the course of which she made statements to the journalists pertaining to what she said were AMI’s practices and conduct. There is a recording and transcript of part of this interview. She met again with Ms McClymont, in Fairfax’s offices, the following day, on 28 May, when the documents provided by Dr Almohty were perused, and copies were made. The journalists retained some of the copied documents. A third meeting took place, probably on or about 5 June 2009, at which Dr Almohty attended to collect her documents, and review a draft of the proposed article prepared by the journalists. Ms Burke did not attend the second or third meetings, although she was in the office at the time, but Dr Almohty understood that she was to be provided with the material. Apart from the recording and transcript to which reference has been made, the only evidence of what passed between Dr Almohty and the journalists was elicited from Dr Almohty in cross-examination by Mr Green, who appeared for AMI; in due course, and unsurprisingly, much was made in AMI’s case of the circumstance that no evidence was adduced from the journalists.

17 On 3 or 4 June 2009, Ms Burke sent an email to AMI, setting out fourteen allegations said to have been made by “a NSW registered doctor who had previously been employed” by AMI, and inviting a response. AMI’s CEO Dr Jacov Vaisman sent a comprehensive response traversing the allegations on the same, or possibly the following, day. The response did not claim to be confidential, nor make any assertion of confidentiality in respect of the subject matter of the allegations. Such a claim was however advanced, it appears for the first time, by letter from AMI’s lawyers Bruce Stewart Dimarco to Fairfax on 11 June 2009. On 12 June 2009, Gzell J granted an interim injunction prohibiting publication of the proposed article. This interim injunction was extended on an interlocutory basis until the final hearing and determination of the proceedings. Subsequently, the defendants refined and reduced the allegations that they propose to publish to those now contained in the five imputations.

18 Not without considerable misgivings, I acceded to AMI’s application that the trial be heard in closed court – because, if the proceedings were conducted in open court, and AMI were ultimately successful, the proceedings and relief sought would be rendered futile by publication in the meantime of the imputations in the course of a report of the proceedings or otherwise [see AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd (unreported, 26 October 2009)].

Breach of confidence

19 To establish a case for final relief for breach of confidence, a plaintiff must show, first, that there is information capable of being identified with some specificity; secondly that that information has the necessary quality of confidence (which involves that it is not otherwise in the public domain); and thirdly, that it was received by the defendant in circumstances which imparted an obligation of confidence [Coco v A N Clark (Engineers) Limited [1969] RPC 41, 43; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434, 443 (Gummow J); Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Department of Community Services (1990) 22 FCR 73, 87 (Gummow J); Worth Recycling Pty Ltd v Waste Recycling & Processing Pty Ltd [2009] NSWCA 354, [24]]. The second and third of these elements are considered further below.

20 The requisite quality of confidence, and the “iniquity” exception. Information may lack the necessary attribute of confidence, not only if it is already in the public domain, but also if its subject matter is the existence, or real likelihood of the existence, of an iniquity – in the sense of a crime, civil wrong or serious misdeed of public importance – and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed [Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), 445-6 (Gummow J)]. Although it has sometimes been suggested that this is a discretionary exercise, involving the court in balancing the private interest in maintaining a confidence against the public interest in knowing the truth [AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464, 513; Woodward v Hutchins [1977] 1 WLR 760, 764; David Syme & Co Ltd v General Motors-Holden’s Ltd [1984] 2 NSWLR 294, 305-6 (Hutley AP), 309-10 (Samuels JA); cf Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341, 382 (Powell J); see also Westpac Banking Corporation v John Fairfax Group Pty Ltd (1991) 19 IPR 513, to the effect that the rule was that publication of otherwise confidential material might be permitted in cases in which there was shown to have been some impropriety of such a nature that it ought in the public interest be exposed], the better view is that it is a question of principle, not discretion, founded on what conscionable behaviour demands of the confidant in the circumstances, so that the obligation of confidence will yield only where the confidant in conscience could not be expected to maintain the confidence [Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Department of Community Services, 111 (Gummow J); Bacich v Australian Broadcasting Corporation (1992) 29 NSWLR 1, 16 (Brownie J); Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419, 427]. In A v Hayden (No 2) (1984) 156 CLR 532, the proposition that the public interest in the disclosure to the appropriate authority – or perhaps even the press – of iniquity would always outweigh the public interest in the preservation of private and confidential information was expressly disapproved as “too broad”, unless “iniquity” was confined to mean serious crime [per Gibbs CJ, at 545-6; see also Mason J, at 560]. Before the “iniquity” exception is attracted, a prima facie case of iniquity must be established [AG Australia Holdings Ltd v Burton, 521, [202]]. But as the following cases illustrate, the exception when attracted can at least sometimes justify disclosure to the press, and it can be attracted in relation to “matters medically dangerous to the public”, which has obvious potential relevance in the present context.

21 In Initial Services Ltd v Putterill [1968] 1 QB 396, the plaintiffs claimed an injunction, damages and delivery up of confidential papers allegedly disclosed by the defendant in breach of an implied term of his contract of service; the defendant alleged that the plaintiffs were engaged in illegal price fixing. Lord Denning MR, in holding that there was an arguable defence, said (at 405) that there could be no confidence preventing an employee disclosing proposed or contemplated commission of a crime or civil wrong, and that the exception extended to crimes, frauds and misdeeds actually committed and in contemplation, provided that the disclosure was justified in the public interest. The basis was said to be that “no private obligations can dispense with that universal one which lies on every member of the society to discover every design which may be formed, contrary to the laws of the society, to destroy the public welfare”, for which reference was made to Annesley v Earl of Anglesea (1743) 17 State Trials 1139. His Lordship said that the disclosure must be to a person who had a proper interest in receiving the information: thus, in respect of a crime, the police; or, in respect of a breach of the (UK) Restrictive Trade Practices Act 1956 4 & 5 Eliz 2, c 63, the Registrar; but his Lordship added:

There may be cases where the misdeed is of such a character that the public interest may demand, or at least excuse, publication on a broad field, even to the press.

22 An authoritative explanation of the exception was given by Ungoed-Thomas J in Beloff v Pressdram Ltd [1973] 1 All ER 241, (at 260) (emphasis added):

The defence of public interest clearly covers and, in the authorities does not extend beyond, disclosure, which as Lord Denning MR emphasised must be disclosure justified in the public interest, of matters carried out or contemplated, in breach of the country's security, or in breach of law, including statutory duty, fraud, or otherwise destructive of the country or its people, including matters medically dangerous to the public ; and doubtless other misdeeds of similar gravity. Public interest, as a defence in law, operates to override the rights of the individual (including copyright) which would otherwise prevail and which the law is also concerned to protect. Such public interest, as now recognised by the law, does not extend beyond misdeeds of a serious nature and importance to the country and thus, in my view, clearly recognisable as such.

23 In Castrol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 51 FLR 184, Rath J quoted the above passage, and added (at 213-4):

This passage, in my respectful view, expresses no more than a reasonable elaboration of Viscount Finlay's “higher duty” concept, and is an acceptable statement of the law as to the defence of public interest in an action for breach of confidence … What is particularly important in Ungoed-Thomas J's formulation of principle is his emphasis on the gravity of the conduct that may give rise to the defence. If there is to be a defence labelled public interest, some such confinement of its vague boundaries is in my view essential.
…
In my opinion the court, in considering whether just cause for breaking confidence exists, must have regard to matters of a more weighty and precise kind than a public interest in the truth being told.

24 In the present case, the position is complicated by the circumstance that AMI contends that what Fairfax proposes to publish is, at least in part, false. This raises an issue as to the relationship between confidentiality and accuracy: the question is whether the dissemination of “misinformation” in a field to which, if the information were accurate, obligations of confidentiality would apply, can be restrained as a breach of confidence. In my view, the answer depends upon whether the dissemination can be characterised as a “use” of confidential information. If what is disseminated is derived from information obtained in confidence, then it will be a “use” of that information, even if such use involves misinterpretation or misrepresentation of it. But merely to publish untrue statements on subject matter that, if true, would be protected by confidentiality, does not of itself involve a “use” of confidential information. The confection of falsehoods about another, albeit in respect of subject matter otherwise within the field of confidentiality, is not of itself a breach of confidence. But if the confection makes use of information obtained in confidence, it will be nonetheless a use of confidential information, and will not be deprived of that character by its inaccuracy.

25 Accordingly, publication of false imputations about matters to which confidence would attach if they were true is not a breach of confidence, unless it can be characterised as a use of confidential information. Thus, while contract and equity (though perhaps not to the same extent) bound Dr Almohty not to use or disclose AMI’s confidential information, neither contract nor equity bound her not to make false disparaging statements of or pertaining to AMI: any obligation to refrain from such a course must be sourced elsewhere, in tort law.

26 Circumstances imposing obligations of confidence. Obligations of confidence may be imposed by contract, or in equity, and contractual obligations may extend beyond those which would otherwise be imposed by equity [Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317, 333-4 (Kirby P), 339-40 (Samuels JA)]. Ultimately, it was not seriously if at all in dispute that the person from whom the journalists received their source material – on the evidence, Dr Almohty – was bound by contractual obligations of confidence to AMI, which extended to not using or disclosing information relating to the business and affairs of AMI, including the terms upon which AMI contracted with current, proposed or previous employees, contractors, clients and suppliers. But AMI seeks relief, relevantly, not against Dr Almohty with whom it had a contract, but against third parties, into whose possession the allegedly confidential information has come, but with whom it had no contractual relationship. Whatever might have been its position vis-à-vis Dr Almohty, AMI had no contractual relationship with Fairfax or the journalists, and against them cannot rely on contractual rights.

27 Although the obligation of confidentiality imposed on Dr Almohty was a contractual one, Fairfax and the journalists were not bound by any such contract; relief against them must be founded on equitable, not contractual principles. In that respect, AMI invoked the obligation of confidence which equity imposes on a third party in possession of information which has to its knowledge been obtained by or communicated to it in breach of confidence [Liquid Veneer Co v Scott (1912) 29 RPC 639, 644]. Such knowledge on the part of the third party can readily be inferred from the nature of the information, and/or the circumstances in which it was communicated [Exchange Telegraph Co Ltd v Howard & The London & Manchester Press Agency Ltd (1906) 22 TLR 375; Exchange Telegraph Co Ltd v Central News Limited [1897] 2 Ch 48; Gilbert v Star Newspaper Co Ltd (1894) 11 TLR 4; Morison v Moat (1851) 9 Hare 241, 68 ER 492; Prince Albert v Strange (1849) 1 Mac & G 25, 41 ER 1171; London & Provincial Sporting News Agency Ltd v Levy (1928) Mac G Cop Cas (1923-28) 340; National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 128 FLR 334, 344]. And constructive knowledge may be imputed where the third party suspects that the information received was confidential [British Industrial Plastics Ltd v Ferguson (1940) 58 RPC 1, 7].

28 Insofar as the proposed publication would use information provided by Dr Almohty in breach of confidence, and received by the defendants in circumstances which impressed them with an obligation of confidence, such use would be liable to be restrained in equity. The critical questions will be (1) whether the information provided by her to them was confidential (having regard to its subject matter, and the iniquity exception), and (2) whether it should be inferred that the defendants knew, or ought to have known, that it was provided to them in breach of Dr Almohty’s obligations of confidence. As there is no evidence that Fairfax or the journalists knew when they received the relevant information from Dr Almohty of the existence or terms of Dr Almohty’s contractual obligations of confidence, the answer will be an inference from the nature of the information and the circumstances of its communication, and will not necessarily be the same for all relevant classes of information. Thus, for example, the journalists must have known that for Dr Almohty to provide to them patient records was, or well might be, a breach of confidence – because of the inherently and notoriously confidential nature of medical records; but that does not necessarily extend to the basis of remuneration of employed medical practitioners.

Injurious falsehood

29 The elements of the tort of malicious falsehood comprise (1) a false statement of or pertaining to the plaintiff’s goods or business; (2) publication of that statement by the defendant to a third person; (3) malice on the part of the defendant; and (4) actual damage as a consequence [Ratcliffe v Evans [1892] 2 QB 524, 527-8; Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1; Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388, 404 [52] (Gummow J), 425 [114] (Kirby J)].

30 In injurious falsehood, unlike in defamation, the plaintiff bears the onus of proving falsity [Palmer Bruyn, 406 [58]]. From time to time, AMI’s submissions slipped into the form that there was no evidence to support or justify an imputation, and therefore that it was false. This is not the way in which the tort of injurious falsehood works; unlike in defamation, where it is for a defendant to justify an imputation, in injurious falsehood the plaintiff must prove the imputation to be false. However, the absence of evidence to justify a falsehood is not without significance: where there is nothing to justify it, it may take very little to establish, on balance, that the imputation is false.

31 Again unlike in defamation, in injurious falsehood malice is also an essential element of the cause of action, to be proved by the plaintiff. While the notion of “malice” in the context of this tort is not easy to define [Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275, 291 (Pincus J)], it is a question of motive, intention or state of mind and it involves the use of an occasion for some indirect purpose or indirect motive such as to cause injury to another person [British Railway Traffic & Electric Co Ltd v CRC Co Ltd & London County Council [1922] 2 KB 260, 269; Browne v Dunn (1893) 6 R 67, 72; Dickson v Earl of Wilton (1859) 1 F&F 419, 427; (1859) 175 ER 790; Stuart v Bell [1891] 2 QB 341, 351; Shapiro v La Morta [1923] All ER Rep 378; Schindler Lifts Australia Pty Ltd v Debelak, 291]. The English Court of Appeal has said that the criteria for malice in injurious falsehood are the same as at common law for libel and slander [Spring v Guardian Assurance PLC [1993] 2 All ER 273, 288; reversed on other grounds Spring v Guardian Assurance PLC [1995] 2 AC 296]]. Its content has been variously described as “an intent to injure another without just cause or excuse” or “some indirect, dishonest or improper motive” [J Fleming, The Law of Torts, 9th ed (1998) LBC Information Services at 780; Palmer Bruyn, 423 [108] (Kirby J)], or “a purpose or motive that is foreign to the occasion and actuates the making of the statement” [cf Roberts v Bass (2002) 212 CLR 1, 30; [2002] HCA 57, [75] (Gaudron, McHugh & Gummow JJ)]. It involves that the statement was made mala fide or with a lack of good faith. In this context, while a person who acts in good faith is not liable [Joyce v Sengupta [1993] 1 All ER 897], malice may exist without an actual intention to injure [Wilts United Dairies Ltd v Thomas Robinson Sons & Co Ltd [1957] RPC 220; Wilts United Dairies v Thomas Robinson [1958] RPC 94].

32 As motive must often be inferred from what the defendant did or said or knew, malice is commonly proved by inference [Horrocks v Lowe [1974] 1 All ER 662, 669 (Lord Diplock)]. Malice may be inferred from the “grossness and falsity of the assertions and the cavalier way in which they were expressed”: Joyce v Sengupta, 905-6. Proof that the defendant knew that a statement was untrue is ordinarily conclusive evidence that its publication was actuated by an improper motive [Roberts v Bass, 31 [76]]. On the other hand, mere lack of affirmative belief in truth is insufficient of itself to establish malice [Roberts v Bass, 31 [78]]. But malice can be inferred not only where the false publication was made with knowledge of its falsity, but also where it was made with reckless indifference as to whether it was true or false [Schindler Lifts Australia Pty Ltd v Debelak, 291; Browne v Dunn, 72; Greers Ltd v Pearman & Corder Ltd (1922) 39 RPC 406, 417; Shapiro v La Morta; Kaye v Robertson (1990) 19 IPR 147, 152; Joyce v Sengupta, 905]. The defendants submitted that mere recklessness was insufficient to found a conclusion of malice, citing Roberts v Bass, in particular the following passage (at 32, [77]-[78]):

If the defendant knew the statement was untrue when he or she made it, it is almost invariably conclusive evidence of malice. That is because a defendant who knowingly publishes false and defamatory material almost certainly has some improper motive for doing so, despite the inability of the plaintiff to identify the motive [ Clarke v Molyneux (1877) 3 QBD 237, 247; Mowlds v Fergusson (1939) 40 SR (NSW) 311, 329]. In Barbaro v Amalgamated Television Services Pty Ltd , Hunt J said that “In some of the older authorities, an absence of honest belief on the part of the defendant is treated merely as some evidence of an indirect motive which alone is said to constitute express malice, but the better view, in my opinion, is to treat the two as different kinds of malice”. His Honour cited no authority for this novel proposition. Some years later, in Hanrahan v Ainsworth [(1990) 22 NSWLR 73, 102-103], Clarke JA said that, since Horrocks , “It has been accepted that if it is proved that a person has made a defamatory statement without an honest belief in its truth or for a dominant improper purpose ... malice will be made out”.
The knowledge and experience of Justice Hunt in defamation matters is well recognised. But with great respect to His Honour and Clarke JA, they erred in asserting that lack of honest belief defeated a defence of qualified privilege. There is no basis in principle or authority for treating knowledge of falsity or lack of honest belief as a separate head of, or equivalent to, malice . In the law of qualified privilege, the common law has always regarded malice as the publishing of defamatory matter with an improper motive. Knowledge of falsity is “almost conclusive evidence” that the defendant had some improper motive in publishing the material and that it actuated the publication. That judges have treated knowledge of falsity as almost conclusive evidence of malice is no ground, however, for treating it as a separate head of, or equivalent to, malice. In some circumstances, lack of honest belief in what has been published may also give rise to the inference that the matter was published for a motive or purpose that is foreign to the occasion of qualified privilege. Nothing in Lord Diplock’s speech in Horrocks supports treating the defendant’s knowledge or lack of belief as a separate head of, or equivalent to, malice. Indeed, Lord Diplock expressly said [[1975] AC 135, 149-150] that, if it is proved that the defendant did not believe that what he or she published was true, it was “generally conclusive evidence” of improper motive.

33 However, while holding that mere absence of an honest belief in truth is insufficient, that passage does not establish that reckless indifference will not suffice. In Kaye v Robertson, Glidewell LJ (with whom Bingham and Leggatt LJJ agreed) said that it sufficed to infer malice that the words were calculated to produce damage and the defendant either knew them to be false or was reckless as to whether they were false or not (at 152):

Malicious Falsehood. The essentials of this tort are that the defendant has published about the plaintiff words which are false, that they were published maliciously, and that special damage has followed as the direct and natural result of their publication. … Malice will be inferred if it be proved that the words were calculated to produce damage and that the defendant knew when he published the words that they were false or was reckless as to whether they were false or not.

34 The same view was expressed in Spring v Guardian Assurance PLC [1993] 2 All ER 273, in which the Court of Appeal cited the chapter dealing with malicious falsehood in JCC Gatley, P Lewis, JE Previte and RW Ground, Gatley on Libel and Slander, 8th ed (1981) Sweet & Maxwell at [303]):

The malice essential to support the action is some dishonest or otherwise improper motive. Such a motive will be inferred on proof that the words were calculated to produce actual damage, and that the defendant knew that they were false when he published them, or was recklessly indifferent as to whether they were false or not.

35 In Palmer Bruyn, Callinan J said that knowledge that a statement was untrue, or recklessness as to its truth, was sufficient to establish malice [Palmer Bruyn, 447 [192]-[194]]. In Schindler Lifts, the applicants submitted that there was malice consisting in three elements: an attempt by the respondent to attract business from the applicants, a purpose of damaging the applicants commercially, and knowledge that the disparagement of the applicants was false. The respondents contended that there was no malice, because they said they had a reasonable basis for believing the truth of the statements, the making of which was motivated purely by a desire to get the business. Pincus J accepted that knowledge of falsity or recklessness would suffice:

The decision in De Beers Abrasive Products Ltd v International General Electrical Co of New York Ltd [1975] 1 WLR 972, ... was given on an application to strike out a pleading. It contains, however, a useful review of English authority to that date concerning statements of the kind here in issue. It is unnecessary to summarise Walton J’s account of the cases. What it demonstrates is that the respondents’ assertion that they merely wished to get business is no defence. ...
In the case just discussed, the court did not determine whether a lack of belief in the truth of what was said was necessary in order to show malice. The decision of the Court of Appeal in Shapiro v La Morta (1923) 40 CLR 201 bears on that point. There, Scrutton LJ (at 203) referred to authorities which: “... suggests that if the defendant is speaking in furtherance of his own business or interest and honestly believes what he says to be true, in contrast with deliberate intention to injure the plaintiff, either with knowledge that the statement is untrue or with reckless indifference to whether it is true or false, then either there is no cause of action or the defendant has a “just cause or excuse”.” Scrutton LJ appeared to act on the view just mentioned, but Atkin LJ merely assumed, without deciding, that the necessary element is either knowledge of falsity or recklessness.
...
I therefore accept that the necessary mental element is as contended for by the applicants – ie knowledge of falsity or recklessness.

36 In my opinion, the above authorities establish that although mere carelessness or lack of honest belief in the truth of what is published is not conclusive of malice [Roberts v Bass, [78]], reckless indifference as to the truth of what is published, as well as knowledge of its falsity, will justify an inference of malice.

37 Generally speaking, in the tort of malicious falsehood, the relevant damage must be harm of a kind intended, or of a kind which is the natural and probable consequence of the false statement [Palmer Bruyn & Parker Pty Ltd v Parsons, 411-12, [73-75] (Gummow J), 396-7 [13-14] (Gleeson CJ)]. The law does not require “special” damage, but “actual” damage. (which may include a general loss of business). This was established by the seminal judgment of Bowen LJ in Ratcliffe v Evans, in which his Lordship explained that the expression “special damage”, in this context, included any actual and temporal loss which has, in fact, occurred (at 527-529, 533):

That an action will lie for written or oral falsehoods, not actionable per se nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage, is established law. ... To support it, actual damage must shewn, for it is an action which only lies in respect of such damage as has actually occurred. It was contended before us that in such an action it is not enough to allege and prove general loss of business arising from the publication, since such general loss is general and not special damage, and special damage, as often has been said, is the gist of such an action on the case. Lest we should be led astray in such a matter by mere words, it is desirable to recollect that the term “special damage”, which is found for centuries in the books, is not always used with reference to similar subject-matter, nor in the same context. At times ... it is employed to denote that damage arising out of the special circumstances of the case which, if properly pleaded, may be superadded to the general damage which the law implies in every breach of contract and every infringement of an absolute right. ... In all such cases the law presumes that some damage will flow in the ordinary course of things from the mere invasion of the plaintiff’s rights, and calls it general damage. Special damage in such a context means the particular damage (beyond the general damage), which results from the particular circumstances of the case, and of the plaintiff’s claim to be compensated, for which he ought to give warning in his pleadings in order that there may be no surprise at the trial. But where no actual and positive right (apart from the damage done) has been disturbed, it is the damage done that is wrong; and the expression “special damage”, when used of this damage, denotes the actual and temporal loss which has, in fact, occurred. Such damage is called variously in old authorities, “express loss”, “particular damage” … “damage in fact”, “special or particular cause of loss” ...

The term “special damage” has also been used in actions on the case brought for a public nuisance, such as obstruction of a river or a highway, to denote that actual and particular loss which the plaintiff must allege and prove that he has sustained beyond what it sustained by the general public, if his action is to be supported, such particular loss being, as is obvious, the cause of action ... In this judgment we shall endeavour to avoid a term which, intelligible enough in its particular context, tends, when successively employed in more than one context and with regard to different subject-matter, to encourage confusion in thought. The question to be decided does not depend on words, but is one of substance. In an action like the present, brought for a malicious falsehood intentionally published in a newspaper about the plaintiff’s business – a falsehood which is not actionable as a person liable, and which is not defamatory in itself – is evidence to shew that a general loss of business has been the direct and natural result admissible in evidence, and, if uncontradicted, sufficient to maintain the action?

...

An instructive illustration, and one by which the present appeal is really covered, is furnished by the case of Hargrave v Le Breton 4 Burr 2422, decided a century and a half ago. It was an example of slander of title at an auction. ... This case shews, what sound judgment itself dictates, that in an action for falsehood producing damage to a man’s trade, which in its very nature is intended or reasonably likely to produce, and which in the ordinary course of things does produce, a general loss of business, as distinct from the loss of this or that known customer, evidence of such general decline of business is admissible.

38 The requirement for “actual damage” does not, however, preclude the grant of injunctive relief to restrain a threatened publication, in which circumstance it will suffice to establish a reasonable probability, as opposed to the actual incurring, of such damage, as McCallum J recently illustrated in Australand Holdings Ltd v Transparency & Accountability Council Inc [2008] NSWSC 669, granting a final injunction to restrain a threatened publication disparaging of a building company (at [169]) (emphasis added):

As to the question of damage, the amended defence concedes, in effect, that a general loss of business would be suffered if future publication were permitted. [Counsel for the plaintiff] submitted that the absence of evidence of actual loss could be explained by reference to the fact that an injunction restraining publication was swiftly sought by Australand and ordered by this Court . I am satisfied that there is a reasonable probability that actual damage to the plaintiff would result if the statements were permitted to be published.

39 It has been said that the special rules relating to the grant of injunctive relief in defamation cases cannot be avoided by the expedient of framing the plaintiff’s case in injurious falsehood rather than in defamation [Fraser v Evans [1969] 1 QB 349, 362; Woodward v Hutchins [1977] 1 WLR 760, 764; [1977] 2 All ER 751, 755; Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796, 800; Church of Scientology of California Incorporated v Reader’s Digest Services Pty Ltd [1980] 1 NSWLR 344, 350-1; Broderick Motors Pty Ltd v Rothe (1986) Aust Tort Rep ¶80-059]. Typically, injunctions have been granted in injurious falsehood cases where questions of public interest, free speech and discussion and liberty of the press are not involved [Swimsure (Laboratories) Pty Ltd v McDonald, 801; Broderick Motors Pty Ltd v Rothe, 68,103; Kaplan v Go Daddy Group[2005] NSWSC 636, [40]-[42]]. But High Court authority now recognises that the restraint exercised in the grant of injunctive relief in defamation cases does not apply, at least with the same force, in cases of injurious falsehood. In Palmer Bruyn & Parker Pty Ltd v Parsons, Gummow J said that the inhibition on injunctive relief to restrain further publication of defamatory material does not apply to injurious falsehood (at 406, [58]) (emphasis added):

Whilst the same factual matrix may found actions in both defamation and injurious falsehood, there are important distinctions between them. In Joyce v Sengupta , Sir Donald Nicholls V-C said:
The remedy provided by the law for words which injure a person’s reputation is defamation. Words may also injure a person without damaging his reputation. An example would be a claim that the seller of goods or land is not the true owner. Another example would be a false assertion that a person has closed down his business. Such claims would not necessarily damage the reputation of those concerned. The remedy provided for this is malicious falsehood, sometimes called injurious falsehood or trade libel. This cause of action embraces particular types of malicious falsehood such as slander of title and slander of goods, but it is not confined to those headings.
It is for the plaintiff in injurious falsehood to establish falsity, malice and special damage, burdens not imposed upon the plaintiff by defamation. On the other hand, the inhibition upon the use of the injunction to restrain further publication of defamatory material does not apply to injurious falsehood; a rationale for the distinction is said to be that the latter tort protects proprietary and commercial rather than personal interests .

40 In Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57, Gummow and Hayne JJ said that where causes of action lay in the same situation for both defamation and injurious falsehood, an injunction might be granted in respect of the injurious falsehood claim (at [56], 79):

The qualification expressed by Lord Cairns LC allowed, for example, for injunctive relief in respect of those torts of slander of title and slander of goods, where property interests were involved, and which were classified as “trade libel”, and later, after Ratcliffe v Evans , were developed as the tort of injurious falsehood, elements of which were malice and special damage. The logical consequence was that, where causes of action both for defamation and injurious falsehood lay in the same situation, an injunction might be granted in respect of the injurious falsehood claim.

41 And recently, in Beechwood Homes (NSW) Pty Ltd v Camenzuli[2010] NSWSC 521, Harrison J, with reference to that passage, and having pointed out (at [11]) that in Australand McCallum J granted a final injunction in an injurious falsehood case without referring to any need to consider issues of freedom of speech or special considerations applicable to the exercise of discretion in the circumstances, concluded that any special rules applicable to attempts to restrain a defamation did not apply in a case of injurious falsehood (at [18]):

The facts of this case, although specifically different from those with which her Honour was concerned, are similar in form and effect. It does not appear to me that the present case is one in which the plaintiff has illegitimately formulated its case so as to avoid what would otherwise be a fatal impediment to success. I do not consider that any special rules that apply in cases concerned with attempts to restrain a defamation apply in cases of alleged injurious falsehood.

42 I have found it useful to consider each of the imputations generally as follows: (1) the content and meaning of the imputation; (2) whether it has the necessary quality of confidentiality, including the iniquity exception; (3) whether Fairfax and the journalists knew or ought to have known that its communication to them involved a breach of confidence; and (4) whether the imputation is false. The issue of malice is best considered subsequently, in the context of my other conclusions in respect of all of them.

First Imputation - commissions

43 The first imputation is that for at least 18 months prior to early 2009, it was the practice of AMI to pay its doctors commissions on the basis of the number of telephone consultations which they performed, so as to provide doctors with a financial incentive to keep those consultations brief and to maximise the volume of prospective purchasers of AMI’s products and services, regardless of the patient’s best interests.

44 Content. AMI invoked the Oxford English Dictionary definition of commission as “a remuneration for services or work done as agent, in the form of a percentage on the amount involved in the transaction”. Although Fairfax contended for a wider meaning, in my judgment use of the word “commission” in this context would convey, to the potential audience of readers of Fairfax publications, a reward calculated as a percentage of sales. The reference to commission would convey to a reader the suggestion that doctors were incentivised to achieve sales, but the imputation goes still further to allege explicitly that doctors were incentivised to keep consultations brief and to maximise the volume of prospective purchasers of AMI’s products and services, regardless of patients’ best interests. The real import of the imputation is that doctors were being incentivised to disregard patients’ interests: shorn of that content, the mere assertion that doctors were remunerated on a fee per service basis would be innocuous. The “sting” in the imputation lies not so much in the assertion that doctors were remunerated on the basis of the number of consultations performed, but in the purpose attributed to that remuneration structure, namely to incentivise doctors to keep consultations brief and to maximise the volume of prospective purchases, regardless of patients’ best interests.

137 It follows that AMI has failed to establish malice on the part of the defendants, which is an essential element of the cause of action in injurious falsehood. That cause of action therefore also fails.

Relief

138 AMI is entitled to an order for delivery up of the documentary material provided to the defendants by Dr Almohty. Otherwise, its claims for relief must be dismissed. I will afford the parties an opportunity to make submissions in respect of costs.

139 Subject to any submissions counsel may wish to make in respect of the form of the orders, my orders are:

1. Order that by 8 December 2010 the first, third and fourth defendants, with verification, deliver up to the plaintiffs and delete from all electronic document storage facilities, all original and copy records, in whatsoever form they may exist, of the business of the plaintiffs, including patient records, that were provided to them by the second defendant and are in the possession, custody or power of them or any of them.

2. Order that the statement of claim be otherwise dismissed.

140 I will make directions in respect of argument as to costs.

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11/02/2011 - Correction to typographical error - Paragraph(s) 115, second sentence inclusion of word "not" before "malicious".