Beran v John Fairfax Publications Pty Ltd

[2004] NSWCA 107

CITATION:	Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107
HEARING DATE(S):	6 May 2003
JUDGMENT DATE:	5 April 2004
JUDGMENT OF:	Mason P at 1; Beazley JA at 2; McColl JA at 3
DECISION:	1. Appeal dismissed. 2. Subject to order 3, appellant to pay the respondent's costs of the appeal. 3. Respondent to pay the costs of the Summons for Leave to Appeal.
CATCHWORDS:	DEFAMATION - PRACTICE AND PROCEDURE - appeal from jury decision - whether jury's finding that imputations not conveyed was one which no reasonable jury could reach - whether jury's finding that imputation not defamatory was one which no reasonable jury could reach - interlocutory determination that two articles so interlinked they should be pleaded as one publication - whether leave required to appeal against interlocutory determination. (D)
LEGISLATION CITED:	Defamation Act 1974 (NSW) s 7A, s 7A(3), s 9 Supreme Court Act 1970 (NSW) s 101(2)(e) Supreme Court Rules 1970 (NSW) Pt 15 r 26, Pt 31 r 2, Pt 67 r 12(d), r 12A
CASES CITED:	Berry v British Transport Commission [1961] 1 QB 149 Bottomley v Hurst & Blackett Ltd (1928) 44 TLR 451 Broome v Agar (1928) 138 LT 698 Burrows v Knightley & Nationwide News Pty Ltd (1987) 10 NSWLR 651 Cairns v John Fairfax and Sons Ltd [1983] 2 NSWLR 708 Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68; (2001) Aust Torts Reports 81-610 David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346 Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478 Gordon v Amalgamated Television Services Pty Limited [1980] 2 NSWLR 410 Hall v Nominal Defendant (1966) 117 CLR 423 Hardy v Harris (1986) Aust Torts Reports 80-003, BC8601168 John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 201 ALR 77; (2003) 77 ALJR 1657; (2003) Aust Torts Reports 81-711 Kelly v Daily Telegraph Newspaper Company (1897) 18 LR (NSW) 358 Liftronic Pty Limited v Unver [2001] HCA 24; (2001) 75 ALJR 867 Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112 Phelps v Nationwide News Pty Limited [2001] NSWSC 130 Piercy v Young (1880) 15 Ch D 475 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Reader's Digest Services Pty Limited v Lamb (1982) 150 CLR 500 Rivkin v John Fairfax Publications Pty Limited [2002] NSWCA 87 Ron Hodgson (Trading) Pty Limited v Belvedere Motors (Hurstville) Pty Limited [1971] 1 NSWLR 472 Salter Rex & Co v Ghosh [1971] 2 QB 597 Southern Cross Exploration NL v Fire and All Risks Insurance Company Ltd (No 2) (1990) 21 NSWLR 200 Tsvangirai v Special Broadcasting Service [2002] NSWSC 532
PARTIES :	Roy Beran (Appellant) John Fairfax Publications Pty Ltd (Respondent)
FILE NUMBER(S):	CA 40875/02; 40950/02
COUNSEL:	B.R. McClintock SC/P.M. Strickland (Appellant) J.R. Sackar QC/T.M. Thawley (Respondent)
SOLICITORS:	Corrs Chambers Westgarth (Appellant) Freehills (Respondent)

LOWER COURTJURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 20166/01
LOWER COURT JUDICIAL OFFICER :	Adams J; Hidden J

CA 40875/02; 40950/02
SC 20166/01

MASON P
BEAZLEY JA
McCOLL JA

Monday, 5 April 2004

Roy BERAN v JOHN FAIRFAX PUBLICATIONS PTY LTD

FACTS

The appellant brought proceedings in the Supreme Court to recover damages in respect of eight defamatory imputations he alleged were conveyed by an article the respondent published in The Sydney Morning Herald (the “matter complained of”).

The matter complained of was divided into two sections with separate titles, united by a banner across the top of the page. The appellant pleaded the publication of the two sections both separately and jointly. Following a preliminary hearing in which Adams J ordered that the separate publication pleading be struck out (the “separate publication determination”), the appellant pleaded both sections as one publication.

In a hearing pursuant to s 7A of the Defamation Act 1974 (NSW), the jury found that the appellant had established that the matter complained of conveyed only one of the eight imputations, imputation (c), to the ordinary reasonable reader. The jury also found that imputation (c) was not defamatory of the appellant. Hidden J entered a verdict for the respondent with costs.

The appellant appealed from the jury’s decision on two grounds:

1. that the jury’s decision that the imputations were not conveyed to the ordinary reasonable reader was one no reasonable jury could come to.

2. that the jury’s decision that imputation (c) was not defamatory was one no reasonable jury could come to.

The appellant also sought leave to appeal from the separate publication determination.

HELD per McColl JA (Mason P and Beazley JA agreeing), dismissing the appeal:

1. It was open to the appellant to challenge Adams J’s interlocutory decision as of right upon appeal from the jury’s verdict because the effect of the separate publication determination was to determine finally the appellant’s rights insofar as his separately pleaded imputations were concerned: David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346; Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478 referred to.

2. Adams J was correct to conclude that the pleading of the matter complained of as separate publications was impermissible because the two articles were so interlinked that the ordinary reader would have read them as one publication: Ron Hodgson (Trading) Pty Limited v Belvedere Motors (Hurstville) Pty Limited [1971] 1 NSWLR 472; Gordon v Amalgamated Television Services Pty Limited [1980] 2 NSWLR 410; Burrows v Knightley & Nationwide News Pty Ltd (1987) 10 NSWLR 651; Phelps v Nationwide News Pty Limited [2001] NSWSC 130; Tsvangirai v Special Broadcasting Service [2002] NSWSC 532 referred to.

3. A jury’s finding that an imputation was not conveyed can only be successfully challenged on appeal if it was one which no reasonable jury could reach: John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 201 ALR 77; (2003) 77 ALJR 1657; (2003) Aust Torts Reports 81-711 applied.

4. The jury’s finding that the imputations were not conveyed was not one which no reasonable jury could have reached.

5. In considering whether an imputation is defamatory a jury is to apply its understanding of general community standards: Reader’s Digest Services Pty Limited v Lamb (1982) 150 CLR 500; Cairns v John Fairfax and Sons Ltd [1983] 2 NSWLR 708; Hardy v Harris (1986) Aust Torts Reports ¶80-003, BC8601168; Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68; (2001) Aust Torts Reports ¶81-610; Liftronic Pty Limited v Unver [2001] HCA 24; (2001) 75 ALJR 867; John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 201 ALR 77; (2003) 77 ALJR 1657; (2003) Aust Torts Reports 81-711 referred to.

6. The jury’s finding that imputation (c) was not defamatory of the appellant was not one which no reasonable jury could have reached.

ORDERS

1. Appeal dismissed.

2. Subject to order 3, appellant to pay the respondent’s costs of the appeal.

3. Respondent to pay the costs of the Summons for Leave to Appeal.

CA 40875/02; 40950/02
SC 20166/01

MASON P
BEAZLEY JA
McCOLL JA

Monday, 5 April 2004

Roy BERAN v JOHN FAIRFAX PUBLICATIONS PTY LTD

Judgment

1 MASON P: I agree with McColl JA.

2 BEAZLEY JA: I agree with McColl JA.

3 McCOLL JA: The principal issue in this appeal is whether a jury’s decisions in a hearing pursuant to s 7A of the Defamation Act 1974 (NSW) that the appellant had failed to establish that an article published by the respondent in the Sydney Morning Herald conveyed to the ordinary, reasonable reader certain imputations and, to the extent that one imputation was found to have been conveyed, it was not defamatory of the appellant, were decisions no reasonable jury could reach.

Statement of the Case

4 On 13 February 2001 the respondent published an article in The Sydney Morning Herald (the “matter complained of”).

5 On 2 March 2001 the appellant commenced proceedings in the Supreme Court of New South Wales to recover damages in respect of defamatory imputations he alleged were conveyed by the matter complained of.

6 The matter complained of appeared on two pages of The Sydney Morning Herald; the first and page four. I have set out the text of the matter complained of, with numbered paragraphs, in the schedule to this judgment. On the first page the article was divided into two sections. A red banner with the words “A HERALD INVESTIGATION” printed within it united the articles across the top of the page, while a borderline down the right hand side of the article separated the investigation story from the other few items on the front page. The two sections of the matter complained of were respectively entitled “The drug body-snatchers” and “No cure, Mrs James, but thanks for all the money.” The latter portion of the matter complained of appeared under a photograph of a woman who was identified as Mrs James. A portion of the photograph of Mrs James extended into the text of the first section. The reader’s attention was directed to the continuation of the story on page 4 of the newspaper in two ways: in the first section the words “Take this body” imprinted over a shadowy photograph apparently of a baby and “More reports PAGE 4” appeared in a break-out box; the words “continued page 4” appeared at the end of the section relating to Mrs James.

7 The caption under the photograph of Mrs James stated:

“Mrs James, who agreed to test the epilepsy drug Gabapentin, says she had no idea that her doctor was benefiting from the arrangement with a big drug company.”

8 The portion of the article headed “No cure, Mrs James …” was continued on page 4 under the heading “No cure, but lots of money”. A photograph of the appellant appeared as part of the continued article. Two other reports appeared on page 4, under the banner “A Herald Investigation” but they did not form any part of the matter complained of.

The pre-trial hearing

9 In his Statement of Claim the appellant pleaded the publication of the two sections of the article both separately and jointly in the following manner.

10 In paragraphs 3 – 4, he pleaded the section of the article headed “No cure Mrs James …” and the imputations he alleged were conveyed by that portion.

11 In paragraphs 5 – 6 he pleaded that the respondent published the section of the article headed “The drug body-snatchers” and the imputations he alleged were conveyed by that section. In addition, he provided particulars of identification pursuant to Supreme Court Rules Part 67 r 12(d) alleging that he was identified in the drug body-snatchers article by virtue of the information provided in the “No cure, Mrs James …” article.

12 In the alternative to the separate pleading of the two articles, the appellant alleged in paras 7 and 8 that the respondent had published both of the sections as one publication. The joint publication pleading relied upon the totality of the imputations pleaded in relation to the separate publication.

13 The respondent filed a Notice of Objections to the Statement of Claim: Supreme Court Rules Part 67 r 12A. The first objection was to the manner in which the appellant had pleaded the article as separate publications (the “separate publication question”). The respondent contended:

“It is clear that the two articles, published on the same page closely interlinked, are a single publication and intended to be read as such, and it is unreasonable for the plaintiff to plead them as separate and distinct publications.”

14 The respondent also made a number of complaints about the capacity of the matter complained of to convey the various imputations the appellant had pleaded (the “capacity question”).

15 The complaints raised in the respondent’s Part 67 r 12A Notice were heard by Justice Adams on 4 May 2001. His Honour upheld the respondent’s complaint on the separate publication question. While he accepted that the plaintiff’s pleading could not be struck out unless it was embarrassing or prejudicial, he held that the manner in which the plaintiff had pleaded the matter complained of separately would introduce “entirely unnecessary complexity” into the trial. He ordered that paragraphs 4, 5 and 6 of the Statement of Claim be struck out and gave the appellant leave to amend consequent upon his order rejecting the separate pleading (the “separate publication determination”).

16 Thereafter argument proceeded on the capacity question. In the course of that argument Mr McClintock SC who appeared for the appellant did not press two imputations being 4(f) and 4(g).

17 On 19 October 2001 the appellant filed an Amended Statement of Claim pursuant to the orders Justice Adams had made on 4 May 2001 in which he pleaded both “The drug body-snatchers” and “No cure, Mrs James …” sections as one publication. He also pleaded all of the imputations which had been severally and jointly pleaded in the first Statement of Claim save for the two which had not been pressed during the argument before Justice Adams.

The s 7A hearing

18 The s 7A hearing commenced on 4 September 2002. Counsel for the appellant tendered the matter complained of and addressed the jury. His address concluded shortly after lunch. Counsel for the respondent then addressed the jury. His address concluded on the second day of the trial. Hidden J summed up that day.

19 The jury was asked to answer “yes” or “no” to the question whether the appellant had established that the matter complained of conveyed to the ordinary, reasonable reader any of the following imputations (or imputations which do not differ in substance from them):

(a) The plaintiff behaved in an unethical manner by deliberately concealing from potential participants in drug trials the fact that he would be paid for their participation.
(b) The plaintiff behaved unethically by failing to inform potential participants in drug trials that he would receive payment for their participation in those trials.
(c) The plaintiff profiteered from the drug trials which he arranged.
(d) The plaintiff behaved unethically by permitting drug testing on retarded people.

(e) The plaintiff is a doctor who sacrificed the interests and genuine medical needs of patients to the interests of international drug companies.

(f) The plaintiff callously permitted a patient to continue to undergo an experimental treatment which caused her great suffering.
(g) The plaintiff set up a sham ethics committee which included cronies of his because he feared that no truly independent ethics committee would ever approve his practices.
(h) The plaintiff used Australian patients as guinea pigs in drug trials for multinational drug companies.

20 The second question the jury was asked was whether, in respect of any of the imputations that it had found to be conveyed, the imputation was defamatory of the appellant.

21 The jury retired to consider its verdict at 2.25 pm and announced its answers to the questions at 4.35 pm. The jury found that the appellant had established that the matter complained of conveyed only one of his imputations – imputation (c) – to the ordinary reasonable reader. That imputation was:

“(c) the plaintiff profiteered from the drug trials which he arranged.”

22 The jury also found, however, that the imputation was not defamatory of the appellant.

23 Hidden J then entered a verdict for the respondent with costs.

The Appeal

24 On 30 September 2002 the appellant filed a Notice of Appeal which raised four issues:

1. that Justice Adams had erred in striking out paras 4, 5 and 6 of the Statement of Claim and ruling that the two articles the subject of the proceedings must be necessarily read as one.

2. that the jury’s decision that the imputations were not “reasonably conveyed to the ordinary reasonable reader was perverse and unreasonable and such as no reasonable jury could come to.”

3. that the jury’s decision that imputation (c) was not defamatory was perverse and unreasonable and such that no reasonable jury could come to.

4. that Justice Hidden had erred in not allowing the appellant a right of reply.

25 The fourth ground was not pursued.

Ground 1 – The separate publication determination

26 Consideration of the first ground of appeal requires, first, considering the respondent’s argument that the appellant’s appeal about the separate publication determination was out of time.

27 Although the appeal had been commenced as of right, on 18 October 2002 the appellant filed a Summons for extension of time for applying for leave to appeal and for leave to appeal in relation to the separate publication determination. The Summons was based on the proposition that Justice Adams’ order of that date was interlocutory.

28 The appellant noted in his summary of argument in support of the Summons for an extension of time that the application was made for more abundant caution. He did not address any substantive argument to whether or not the leave application was necessary.

29 The respondent/opponent to the Summons for Leave to Appeal resisted the appellant’s Summons on the basis, inter alia, that the proceedings before Justice Adams were not interlocutory but, rather, were properly characterised as a separate trial pursuant to Part 31 of the Supreme Court Rules. It further submitted that whether or not an appeal from that decision lay as of right or was available with leave, the appeal was out of time. It argued that both the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598, 602, 604 and general discretionary considerations precluded “a plaintiff from sitting on a potential appeal point to use only (sic) in the event of a disappointing result from the jury.”

30 I do not accept that the separate publication determination was properly characterised as a Part 31 separate trial. No separate trial order was made as the rules require: Supreme Court Rules Part 31 r 2 and see Piercy v Young (1880) 15 Ch D 475 at 479; Bottomley v Hurst & Blackett Ltd (1928) 44 TLR 451. Separate trial orders are most usually made in the Defamation List when the court hears argument about whether the plaintiff’s imputations are conveyed as a matter of law: see Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112 at 117 ff where Hunt J (as his Honour then was) held that the Court had power to make a separate trial order in respect of the question of law whether the pleaded imputations were capable of being conveyed by the matter complained of in its natural and ordinary meaning.

31 It is often a fine point to determine whether an order is final or interlocutory: see Salter Rex & Co v Ghosh [1971] 2 QB 597 at 601.

32 In Hall v Nominal Defendant (1966) 117 CLR 423 at 440 Taylor J said:

“… an order made in the course of an action or suit which does not conclude the rights of the parties inter se, although it may, of course, conclude the fate of the particular application in which it is made, is interlocutory only. On this basis an order staying proceedings against one of several defendants on the ground that they are scandalous, vexatious and an abuse of the process of the Court has been treated as interlocutory: Hind v Marquis of Hartington (1890) 6 TLR 267. The same view was taken of an order striking out a plaintiff's statement of claim on the ground that it disclosed no reasonable cause of action: Jones v Insole (1891) 64 LT 703, and of an order dismissing an action as frivolous and vexatious in Re Page (1910) 1 Ch 489 ”.

33 If the appellant had been able to retain his pleading of the matter complained of as two separate publications, he would in turn have been able to plead imputations arising out of each separate publication. Such imputations constitute the cause of action: s 9 Defamation Act 1974 (NSW) as amended. The effect of the separate publication determination, therefore, was to determine finally the appellant’s rights insofar as his separately pleaded imputations were concerned. It does not matter that the appellant was thereafter granted leave to amend: see Hall v Nominal Defendant (1966) 117 CLR 423 at 440 (per Taylor J), at 443 (per Windeyer J); Southern Cross Exploration NL v Fire and All Risks Insurance Company Ltd (No 2) (1990) 21 NSWLR 200 esp. at 216 – 217 per Handley JA.

34 In my view, the better view is that the separate publication determination was interlocutory. Had the appellant sought to challenge it prior to the jury determination, he would have required leave to appeal: Supreme Court Act 1970 (NSW), s 101(2)(e).

35 There are, however, circumstances in which an interlocutory decision can be challenged on a final appeal without leave being required. This issue was considered in Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478.

36 Gaudron, McHugh and Hayne JJ pointed out in their joint judgment (at [6]) that the proposition that an interlocutory order could be challenged in an appeal against the final judgment was “often stated in unqualified terms.” In their Honours’ view the better formulation was that adopted in Spencer Bower, Turner and Handley, The Doctrine of Res Judicata, 3rd Ed 1996 pp 79-80 para 170 where the learned authors said:

“On an appeal from the final order an appellate court can correct any interlocutory order which affected the final result.”

37 Their Honours pointed out (at [7]) that that qualification was necessary “to reflect the well-established principle that a new trial is not ordered where an error of law, fact, misdirection or other wrong has not resulted in any miscarriage of justice.”

38 Their Honours also observed that there were circumstances where an interlocutory decision made other than in the course of the hearing must be treated as concluding an issue between the parties. Their Honours did not finally decide the question whether such decisions might also be challenged on an appeal against a final judgment in the proceedings. That conclusion was, however, reached by this Court in David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346, to which their Honours referred (at [8]) as being consistent with their qualified formulation of the relevant principle. Their Honours did not, having regard to the circumstances of the case they were considering, feel it necessary to explore the limits of the principle.

39 Kirby and Callinan JJ in their joint judgment (at [44]), referred to the “established rule of practice” permitting an objection to an interlocutory order following final judgment as long as the ground was still relevant to that judgment. After reviewing the authorities their Honours found (at [48]) that the practice whereby an interlocutory order could be challenged following final judgment was a sensible one which was an accepted rule of the High Court’s practice as well as being regularly followed in other Australian appellate courts. Their Honours were of the view (at [49]) that the principle should not be narrowly confined, although they acknowledged that the point decided by the interlocutory order would need to be relevant to the disposition of the case for it to be considered by the appellate court.

40 In David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346 at 349, Glass JA (with whom Samuels and Priestley JJA agreed on this point) held that it was open to a defendant which unsuccessfully challenged the plaintiff’s imputations to challenge that decision on appeal from a subsequent jury verdict, even though the original decision was interlocutory. While there was a measure of pragmatism in his Honour’s conclusion (it being based at least in part on discouraging a superfluity of applications for leave to appeal from interlocutory orders made in the Defamation List), it was, as I have earlier noted, accepted by Gaudron, McHugh and Hayne JJ in Gerlach v Clifton Bricks Pty Ltd as being consistent with their qualified formulation of the relevant principle.

41 The pragmatic flavour of Glass JA’s conclusion was reflected in Kirby and Callinan JJ’s judgment in Gerlach v Clifton Bricks Pty Ltd (at [49]) where their Honours observed that “the rule permitting adverse interlocutory orders to be contested in an appeal against a final judgment …[is] supported by many practical considerations”. As they said (omitting footnotes):

“Interlocutory appeals can often cause great injustice to parties who are less well resourced than those who pursue them. They can be misused by those with ‘a long purse’ to prevent others from securing justice in an early trial of the substantive issues. They can lead to a plethora of appeals and further interlocutory hearings that needlessly raise the costs and delay the conclusion of litigation.”

42 The separate publication determination affected the final result in the sense I have earlier explained and, accordingly, it was open to the appellant to challenge the separate publication determination as of right upon appeal from the jury’s verdict. This follows both from Gerlach v Clifton Bricks Pty Ltd and David Syme & Co Ltd v Lloyd. Accordingly the appellant did not need to file the Summons seeking an order extending the time within which to seek leave to appeal from Justice Adams’ order nor did he need leave to appeal. The respondent’s Notice of Motion seeking to strike out ground 1 in the Notice of Appeal on the basis that it was incompetent because it was out of time was misconceived.

43 Mr McClintock SC who appeared with Mr Strickland for the appellant informed the Court that the Summons seeking an extension of time for applying for leave to appeal and for leave to appeal had been filed because the respondent filed the Notice of Motion. That being the case it follows, in my view, that the respondent should pay the costs of the Summons.

44 I turn then to consider the appellant’s substantive complaint about the separate publication determination.

45 The appellant submitted that two questions arose in relation to the separate publication determination. Those were:

(a) Whether in coming to his conclusion that paras 4, 5 and 6 should be struck out, Adams J determined a factual question which was truly the province of the jury in determining issues of publication pleaded by the appellant.

(b) Whether Adams J was correct in holding that the form of pleading adopted by the appellant would cause the respondent “to respond to immaterial issues”.

46 The appellant submitted that the relevant principles of pleading were stated by Simpson J in Phelps v Nationwide News Pty Limited [2001] NSWSC 130 at [22]. He complained, however, that Adams J failed to apply those principles.

47 The respondent submitted that the articles which the appellant sought to plead separately were properly to be read as a single publication and that it was unreasonable for the appellant to have pleaded them as separate and distinct publications. It submitted that an ordinary reader would have read both articles together as the manner of publication (including the headlines and pagination) invited attention to both articles while each invited attention to the other.

48 It also submitted that the material in each article could be understood by the ordinary reasonable reader as materially altering or qualifying the complexion of the other or was at least capable of changing the complexion of the other such that both articles had to be pleaded: see Gordon v Amalgamated Television Services Pty Limited [1980] 2 NSWLR 410 at 414 – 415; Tsvangirai v Special Broadcasting Service [2002] NSWSC 532.

49 In Ron Hodgson (Trading) Pty Limited v Belvedere Motors (Hurstville) Pty Limited [1971] 1 NSWLR 472 Asprey JA (with whom Holmes JA agreed) said:

“… if the alleged defamatory matter be contained within other written material, it is sufficient to set forth in the declaration the libellous passages only, provided that their meaning be clear and distinct. But, if the meaning of the passages taken singly is not clear or if the complexion of the imputation conveyed by the libellous passages is materially altered or qualified by other passages in the written material, the plaintiff must set out all of the passages in the written material which affect the sense of the alleged defamatory matter.”

50 Ron Hodgson (Trading) Pty Limited v Belvedere Motors (Hurstville) Pty Limited was followed by Hunt J in Gordon v Amalgamated Television Services Pty Limited [1980] 2 NSWLR 410 at 413 (6) where his Honour held that a plaintiff was “obliged to include within his pleading every passage of the [publication sued upon] which materially alters or qualifies the complexion of the imputation complained of”. His Honour said that the “justification for that rule is the principle that the effect of the matter complained of must be taken from the whole of what has been published.”

51 Accordingly in Hunt J’s view (at 414 – 415) where additional passages relied upon by a defendant “may be understood by the ordinary reasonable reader as materially altering or qualifying the complexion of the plaintiff’s imputation … principle demands … that if a plaintiff is entitled to set out those passages from which the imputations of which he complains are capable of being conveyed, then the defendants should similarly be entitled to have set out those additional passages which are capable of materially altering or qualifying any such imputation”.

52 The decision in Gordon v Amalgamated Television Services Pty Limited has frequently been cited to support what Levine J referred to in Tsvangirai v Special Broadcasting Service (at [4]) as a “strike-in” order, “to use the argot of the Defamation List”. Such orders are usually made to require a plaintiff to plead additional parts of a single matter complained of.

53 A strike-in order may also be made in relation to separate publications. In Burrows v Knightley & Nationwide News Pty Ltd (1987) 10 NSWLR 651 at 655, Hunt J held that where there were two separate publications, the plaintiff was entitled to, or might be obliged to, have them considered together in order to determine the sense in which either was understood, provided that they were sufficiently connected and identified with each other. His Honour referred (at 656) to Gordon v Amalgamated Television Services Pty Limited as entitling a defendant, which wished to have the material in a separate publication considered upon the issue of the sense conveyed by the matter which the plaintiff had pleaded, to require the plaintiff to plead that other material where it was capable of affecting the sense in which the matter complained of should be understood.

54 Phelps v Nationwide News Pty Limited, upon which the appellant relies, was an application of the above principles. In that case, Simpson J held (at [22]):

“22 Individual circumstances will dictate whether a particular pleading will be permitted to stand. However, it is to be borne in mind that, subject to unfairness amounting to abuse of process, or unreasonableness, or the inability of the publication to sustain the form of pleading chosen, it is generally for the plaintiff to select the manner in which he/she/it wishes to present a case. It is only if the plaintiff's selection of the mode of pleading is untenable for one of those reasons that it will be struck out. By this I mean that where, for example, a plaintiff elects to proceed as though a number of individual parts of the matter complained of together amount to a composite publication, it is only if that approach is not reasonably open, or creates unfairness of such a degree as to constitute an abuse of process, that the pleading will be struck out. Similarly, where the plaintiff elects to proceed as though each were a separate publication, it is only where that view is not reasonably open (or where unfairness amounting to abuse of process would result) that that pleading will be struck out. Within those boundaries, a plaintiff is entitled to mark out the playing field.”

55 Adams J referred to Phelps and clearly concluded that the pleading of the matter complained of as separate publications was impermissible because the two articles were so interlinked that permitting them to be pleaded separately was embarrassing: Supreme Court Rules Part 15 rule 26.

56 In my view his Honour’s decision was correct. The manner in which the two articles were presented was such that the ordinary reader would have read them as one publication. They were inseparably linked. Each qualified the other. It was incumbent upon the appellant to include within his pleading every passage which materially altered or qualified the complexion of the imputations of which he complained. It was, in my view, essential in order to discharge that obligation that he pleaded the two articles as one publication.

57 I would also reject the appellant’s complaint that in striking-out paras 4, 5 and 6, Adams J determined a factual question which was truly the province of the jury. Simpson J rejected that argument in Phelps v Nationwide News Pty Limited, (above at [31]). I agree with her Honour that the identification of the publication is not a jury question. The authorities to which I have referred make it clear that the issue of how the publication should be pleaded is properly the province of the court. The function of a jury is confined to whether the matter complained of carries the imputation and, if it does, whether that imputation is defamatory: s 7A(3) Defamation Act 1974 (NSW).

58 In my view this ground of appeal should be rejected.

Ground 2 – The jury’s decision that the imputations were not conveyed

59 I note that Ground 2 did not accurately reflect the question the jury was asked to answer in relation to whether or not the imputations were conveyed. The question to the jury, which was formulated in standard terms, asked the jury to consider, in substance, whether the imputations were “conveyed” to the ordinary reasonable reader, not whether they were “reasonably conveyed” which is the expression used in the ground of appeal.

60 When the appeal was heard, it was common ground that to succeed in his challenge to the jury’s verdict the appellant had to establish that the jury’s finding that the imputations were not conveyed was one to which no reasonable jury could have come. Since the hearing of the appeal the High Court has delivered its judgment in John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 201 ALR 77; (2003) 77 ALJR 1657; (2003) Aust Torts Reports 81-711 (“Rivkin”) which examined the scope of appellate review of a jury verdict. That decision has confirmed that the approach the parties took to the test to be applied to determine the appeal was correct.

61 Rivkin was an appeal from the decision of the Court of Appeal (Rivkin v John Fairfax Publications Pty Limited [2002] NSWCA 87) ordering a new trial of Mr Rivkin’s defamation action against John Fairfax Publications. The jury had found that the matter complained of did not convey any of the fifteen imputations pleaded. Grove AJA (with whom Meagher JA and Foster AJA agreed on this issue) held that there was no reasonable basis on which the jury finding in relation to six of the fifteen imputations could be sustained. He also concluded (at [112]) that “in the circumstances, that is to say constant rejection of the cause of a litigant in many cases in defiance of reasonableness, it is apt to conclude that the jury has misapplied itself to its task”. He held (at [113]) there should be a new trial of all the imputations which were before the jury.

62 Although counsel for Mr Rivkin sought to maintain that order in the High Court, he also, as Callinan J noted (at [190]), “properly conceded”, in effect, that he could not argue that the jury had dealt so unreasonably with nine of the imputations not found to have been conveyed “as to argue that those imputations should be the subject of the retrial.”

63 In the High Court, Callinan J (with whom Gleeson CJ and Heydon J agreed) held (at [185]) that a jury finding that an imputation was not conveyed could only be successfully challenged on appeal if it was one that no reasonable jury could reach.

64 Callinan J expressed the view (at [183]) that in finding that some of the answers of the jury were perverse the Court of Appeal may have adopted a more demanding test than the law requires. He emphasised (at [184]) that a Court of Appeal could not substitute the answer that it would give to a question for that of a jury. Accepting that a “jury has an especially significant constitutional role to play in those cases in which it participates” his Honour pointed out that:

“Both as a practical and legal matter, a jury’s decision on a factual question, although by no means impregnable, does have an authority over and above that of a decision of a judge sitting alone to determine a factual question. The jury is representative of the community. Its members are better placed than judges to give meaning to, and evaluate, the spoken and written word and its impact upon the community. Nor should it be assumed that juries approach their task with heightened or lowered suspicion and prejudice. History shows that not all lawyers and judges are strangers to suspicion. It may accordingly be accepted that the occasions for judicial correction of jury verdicts will be extremely rare. But such occasions do arise.”

65 The High Court differed from the Court of Appeal in deciding which of the jury’s findings in relation to the imputations should be overturned. Callinan J found that the jury verdict was only unreasonable in relation to five of the imputations. These five included one imputation in respect to which the Court of Appeal found the jury’s decision to have been open to it. Conversely, Callinan J disagreed with the Court of Appeal’s finding that the jury verdict in relation to two other imputations, 3(a) and 5(a), was unreasonable. Kirby J (at [143]) would have upheld the Court of Appeal’s decision as to which of the imputations were reasonably conveyed in all but one respect – that disagreement related to an imputation, 3(i), which in his view was not a matter before the Court. He disagreed with Callinan J’s conclusion that the jury was shown to have been incorrect in relation to an additional imputation to those found by the Court of Appeal.

66 McHugh J concluded (at [11] and [70]) that the Court of Appeal erred in finding that no reasonable jury could find that the two articles did not contain the relevant imputations. He would have dismissed the appeal.

The argument to the jury

67 Each counsel presented a general overview of the article to the jury before addressing argument to the individual imputations.

The appellant’s overview argument to the jury

68 Mr McClintock SC placed emphasis on the heading to the article and, in particular, the word “body-snatchers”. He suggested that that was an allusion to an illegal practice of some 200 years antiquity when it was against the law to carry out operations to teach medical students so recently buried bodies were dug up and sold to doctors. He submitted that readers of the newspaper would read the article with that notion in mind.

69 Mr McClintock SC suggested to the jury that the article dealt with a serious topic being “A Herald Investigation”. He said it amounted to a generalised attack on drug companies and doctors which had, in effect, singled out the appellant.

70 He suggested that the article was concerned with explaining that patients’ rights had been ignored and sacrificed for the interests of international drug companies and that the appellant was involved in this activity. He submitted that the reasonable reader would have understood the article as saying two categories of people were being treated as guinea pigs: intellectually retarded people whose rights were being ignored because they were being involved in clinical trials without their consent and patients, such as Mrs James, who were involved in clinical trials but were not told of that fact.

71 Dealing with Mrs James he drew attention, in particular, to paragraph 97 and suggested that that conveyed that Mrs James did not know she was being the subject of research, that she was a guinea pig as opposed to being treated. He also drew attention to the references in the article to the Ethics Committee the appellant had established and suggested that the article was conveying that Committee was not independent but was made up of a “bunch of cronies” who would [take the appellant’s] advice as he thought an independent committee would not approve the trial in question.

72 It was by emphasising the idea of patients being used as guinea pigs, the failure to inform patients that they were involved in clinical trials and the establishment of the “sham” Ethics Committee that Mr McClintock SC sought to explain to the jury that the article conveyed an underlying notion of unethical behaviour on the part of those involved including, of course, the appellant.

73 Secondly, he pointed to the words “guinea pigs” in the sub-heading and suggested that that was a reference to “an animal subjected to tests done without regard for the welfare of the animal but for the purposes of the person carrying out the test.” He suggested that that notion was linked to a later reference to the appellant who was described as using a patient as a guinea pig.

74 He drew attention to the breakout caption “Take this body” and suggested that that picked up on the “body-snatcher” reference in the headline.

75 He suggested that the “No cure – Mrs James” headline was an attack on the appellant suggesting that while he had not cured Mrs James he had made a lot of money out of treating her.

The respondent’s overview argument to the jury

76 Mr Nicholas QC, counsel for the respondent, submitted to the jury that the ordinary reasonable reader would have read the whole of the article and would not have selected paragraphs or sentences out of the context. He sought to reinforce this submission by suggesting to the jury that the reader would appreciate that the article and its subject matter required serious attention and would be read carefully and reflectively. He submitted that the reader who was going to read the article from beginning to end would be a person who did not jump to conclusions without coming to some degree of persuasion on the balance of probabilities that the claimed meanings found support in the article taken as a whole.

77 After taking the jury in detail through the matter complained of, Mr Nicholas QC submitted that the jurors might think it defied ordinary common sense to suggest that a doctor and organisations involved in trials for potentially healing drugs engaged in bad or wrong conduct. He reinforced that submission by pointing out that it was more difficult to be persuaded there was something wrong or bad about the conduct dealt with in the article having regard to the fact it stated that drug trials of the kind being reported upon had been conducted all over the world over a wide range of matters over many years.

The parties’ addresses on the imputations

78 I turn then to deal with the arguments to the jury concerning the individual imputations. I have juxtaposed counsels’ arguments relating to each imputation so that the issues posed for the jury can be clearly perceived.

Imputation (a): The plaintiff behaved in an unethical manner by deliberately concealing from potential participants in drug trials the fact that he would be paid for their participation.

The appellant’s argument - imputation (a)

79 Mr McClintock relied upon the headline and sub-headline in paragraphs 2 and 3 of the matter complained of as well as paragraphs 7, 13, 32, 33, 81 and 87 as conveying this imputation. He relied heavily on paragraph 13 referring to the fact that “patients are being bought and sold like commodities by doctors and pharmaceutical companies but they are not being told money changes hands when they volunteer for new treatments”. He drew attention to the fact that Mrs James was not told of the fee the appellant received by her participation in the trial. He submitted to the jury that it was obvious that the appellant knew about the drug trials and had been recruiting patients but did not tell his patients of those trials. It followed, according to his submission to the jury, that the appellant had deliberately concealed the fact that he was receiving a fee for the drug trials from his patients and that that deliberate concealment was “clearly unethical”.

The respondent’s argument - imputation (a)

80 Mr Nicholas QC submitted that the matter complained of neither told or suggested that there was any obligation upon either the appellant or anyone else to disclose the fact that they were paid in relation to the participation of patients in the drug trials. Indeed, he pointed out, paragraph 7 said patients did not have to be informed of the financial arrangements. He drew the jury’s attention to remarks attributed to a number of eminent medical practitioners and suggested that it might be expected that they would have remarked upon the fact that it was unethical for doctors involved in trials not to disclose the fact of payment to patients if that was the case.

81 He also submitted that the fact that the appellant was extensively quoted throughout the article would convey to the reader that this was not the conduct or utterances of someone with something to conceal and, therefore, that it would be difficult to imagine a reader concluding from the matter complained of that the appellant had deliberately concealed matters.

Imputation (b): The plaintiff behaved unethically by failing to inform potential participants in drug trials that he would receive payment for their participation in those trials.

The appellant’s argument - imputation (b)

82 Mr McClintock SC informed the jury that imputation (b) was an alternative to (a). He drew to their attention the fact that imputation (a) concerned a suggestion of deliberate concealment from patients whereas imputation (b) turned on simply failing to inform the appellant’s patients. He suggested it was possible that both were in the matter complained of or that it was possible that imputation (a) was not conveyed but imputation (b) was.

83 His submission to the jury that a failure to inform his patients of the payments he would receive amounted to unethical behaviour was bald: it was obviously unethical, he told the jury, for the appellant not to inform his patients of the payments he would receive.

The respondent’s argument - imputation (b)

84 Mr Nicholas QC reminded the jury that because this imputation pivoted on the assertion that a failure to disclose was unethical the jury should have regard to his previous submissions on what might be unethical and, in those circumstances, would find no support for this imputation.

Imputation (d): The plaintiff behaved unethically by permitting drug tests on retarded people.

The appellant’s argument - imputation (d)

85 Mr McClintock SC submitted the jury should draw the conclusion that the matter complained of conveyed the notion that the appellant was behaving unethically by permitting drug tests on retarded people because such people were not able to make up their own minds and could not give informed consent. He drew their attention to paragraphs 64 and 65 and the fact that of nine research sites signed up in Australia to test a new anti-epileptic drug, the appellant’s was the only one which included intellectually disabled people. He suggested that that meant that the appellant was out of the mainstream of medical conduct. Finally, he referred to paragraphs 69 – 71 where Dr Miller, the medical director of the pharmaceutical company Novo Nordisk, defended the trial involving intellectually disabled people but acknowledged the difficulties using such people in trials. He submitted to the jury that they would conclude that the article was “over all” saying that the appellant behaved unethically in permitting drug testing on intellectually disabled people.

The respondent’s argument - imputation (d)

86 Mr Nicholas QC’s submission to the jury that this imputation was not conveyed turned upon the several references in paragraphs 20, 65 and 75 to the fact that the NSW Guardianship Tribunal had approved the experiments on intellectually disabled people. He also referred to the fact that the Royal North Shore Hospital Ethics Committee had approved the appellant’s use of such people. He submitted that a reader reflecting on those statements would find it a leap of the imagination to conclude that the appellant was behaving unethically by permitting testing on intellectually disabled people.

Imputation (e): The plaintiff is a doctor who sacrificed the interests and genuine material needs of his patients to the interests of international drug companies.

The appellant’s argument - imputation (e)

87 Once again Mr McClintock SC relied upon the headlines to the matter complained of (paragraphs 2 and 3) and then paragraphs 5 – 7, 12 – 13, 17 – 18, 22, 27, 32 – 43, 45 – 53, 55, 61 – 65, 72 – 73, 86 – 94 and 97 as conveying this imputation. He submitted that the whole point of the article was to say, “the doctors in question do not give two hoots about the patient. They are doing it to get money from the drug companies”. He suggested to the jury that the reader would be taken to read the entire article so that references to the appellant in the second article would mean that the first article was read as referring to him. Thus, he submitted, the jury would find that the ordinary reasonable reader would have read the matter complained of as saying that the appellant used his patients as “guinea pigs for the global pharmaceutical market” and that the appellant’s concern for the interests of the latter took precedence over the interests of his patients.

The respondent’s argument - imputation (e)

88 Mr Nicholas QC submitted that the overwhelming message of the matter complained of was that patients such as Mrs James voluntarily participated in trials which offered them hope of relief. He pointed out that the article made it clear that such patients had a choice, that the pros and cons were explained, as were the matters involving experimental drugs. He submitted that the matter complained of did not suggest that it was not in the interests of the participants to be involved in the trials. Once again, insofar as intellectually disabled people were concerned, he reminded the jury that the Guardianship Tribunal and the Royal North Shore Hospital Ethics Committee sanctioned the trials.

Imputation (f): The plaintiff callously permitted a patient to continue to undergo an experimental treatment which caused her great suffering.

The appellant’s argument - imputation (f)

89 This imputation, Mr McClintock SC submitted, was specific to the references in the matter complained of to Mrs James. While he acknowledged the word “callous” was not used, he suggested that a doctor who allowed a patient to undergo a treatment which caused her suffering for no good result behaved in a callous manner. He drew the jury’s attention to paragraphs 28, 37 to 42, 94 and 97, and to Mrs James being quoted in paragraph 40 as hoping for a positive outcome. He noted the reference, in paragraph 42, to the fact that “Parke-Davis did very nicely out of Mrs James.” Next, he drew the jury’s attention to paragraphs 94 and 97 and suggested that the matter complained of was saying that Mrs James’ treatment caused her suffering and that the appellant permitted her to continue with that treatment knowing of her suffering and that was callous.

The respondent’s argument - imputation (f)

90 Mr Nicholas QC submitted that there was nothing in the article which suggested that Mrs James was coerced or obliged to continue with the trial. He drew the jury’s attention to the fact that the article made it clear that Mrs James chose to participate in the trials hoping to derive some benefit.

Imputation (g): The plaintiff set up a sham Ethics Committee which included cronies of his because he feared that no truly independent Ethics Committee would ever approve his practices.

The appellant’s argument - imputation (g)

91 The appellant relied upon paragraphs 17, 45, 46, 52, 53, 55 – 60, 72 and 73 to convey this imputation.

92 Mr McClintock told the jury that an Ethics Committee is supposed to oversee treatment and decide whether it is appropriate. He suggested that the matter complained of was saying that a committee made up of the appellant’s former lawyer, a former patient, his Rabbi and his sister was not independent and would be thought to “give … a big tick” to whatever outrageous proposal the appellant put before them. Secondly, he submitted, the reason the appellant would set up such a committee was because he was frightened of a “real committee” which might reject his proposals. In essence, he submitted that the Ethics Committee the appellant had established was “a sham committee” because it included his cronies.

The respondent’s argument - imputation (g)

93 Mr Nicholas QC drew the jury’s attention to the qualifications of the members of the Ethics Committee. He pointed out that the article said that the Ethics Committee which approved a number of the appellant’s earlier drug trials was registered with the National Health and Medical Research Council. This, he submitted, demonstrated the accountability of the Ethics Committee. There was no support, in those circumstances, for the suggestion that the committee was a sham.

94 He submitted that a reader might well conclude that a Rabbi, clergyman or priest or somebody whose lifelong occupation concerned ethical conduct, a person with legal qualifications, a former patient and a psychologist (the appellant’s sister) would be all persons with some experience to bring to bear on an Ethics Committee. He drew attention to the appellant’s statement that he knew those on the Ethics Committee to be of the highest integrity.

Imputation (h): The plaintiff used Australian patients as guinea pigs in drug trials for multi-national drug companies.

The appellant’s argument - imputation (h)

95 The appellant relied upon the headlines in paragraphs 2 and 3 as well as paragraphs 5, 34 and 35.

96 Counsel for the appellant submitted that, “in a sense this meaning … is actually the whole article”. He repeated the sub-heading “Australians are used as guinea pigs”. He submitted it could only refer to persons subject to a drug trial without regard to his or her interest or welfare.

The respondent’s argument - imputation (h)

97 Mr Nicholas QC submitted that the words “guinea pigs” were capable of two meanings. The first described people, things or animals who were the subject matter of experiments. As such, he submitted, the use of the phrase did not raise one’s eyebrows.

98 He also conceded that the phrase might be used to suggest people participating in experiments who “were truly victims”, “being exploited without any freedom of choice … rather like lab rats” in a manner which would conjure up a message of “unattractive, wrongful, distasteful conduct”.

99 The fact that those two connotations were available, Mr Nicholas QC submitted, demonstrated the importance of reading the words in their entire context rather than jumping to a conclusion.

100 He submitted that the article made it plain that the trials were subject to approval by different bodies depending upon the class of people one was concerned with and that some were considered volunteers and participated because they were motivated by hope of deriving benefit. He submitted that it was nonsense to suggest that the matter complained of was using the expression “guinea pigs” in the “lab rat” context.

101 He repeated his submission that the jury should read the whole article to see what was being said about the trials and, on balance, submitted that what was being said was that trials of this kind were necessary and in the public interest.

The trial judge’s directions

102 There was no challenge on appeal to the trial judge’s directions to the jury.

103 His Honour gave the jury what might be regarded as a conventional summing-up in a defamation matter. It is worth noting some of the points about which he directed them.

104 He directed them that they must not look at specific parts of the articles in isolation, but in the context of the articles as a whole. He directed them as to the qualities of the ordinary reasonable reader and drew their attention to the fact that in reading the articles, they must apply “community standards and attitudes”. He suggested that the ordinary reasonable reader might read the articles only once but, having regard to the seriousness of the subject matter, may go back over some parts to make sure what was read was properly understood. He reminded them that the ordinary reasonable reader was a person who gained a general impression from a reading of the articles and may be guilty of a measure of loose thinking.

105 Applying those tests, he directed them that their task was to consider each of the eight imputations and to determine whether they were satisfied on the balance of probabilities that the imputation arose from a fair reading of the articles.

106 On the issue of whether or not any imputation found to have been conveyed was defamatory, his Honour explained that “defamatory” meant something which would lead ordinary decent people in the community to think less of the appellant.

107 His Honour then dealt with each counsel’s arguments to the jury. I do not think I do any disservice to his Honour if I do not repeat the matters on which he summed-up to the jury in this respect. His Honour’s summing-up was impeccably fair to both parties and, in my view, was a balanced rendition of the competing arguments.

108 Hidden J directed the jury that imputations (a) and (b) were alternatives and that if they found (a), they need not answer (b), or they might answer yes to (b) but no to (a) or no to both.

The submissions on appeal

109 I turn then to consider the parties’ submissions on appeal concerning the imputations. I do so with some diffidence. As the issue to be determined is whether the jury’s finding was one which a reasonable jury could have reached, in my view, an appeal court’s inquiry should be directed to resolving that issue by considering the parties’ addresses to the jury as well as the trial judge’s summing-up.

110 In considering the parties’ submissions, I bear in mind that an appeal court considering whether a civil jury acted reasonably in reaching its verdict must “approach the case on the basis most favourable to the respondent to the appeal”. The question for the appeal court is not “whether the verdict is right or appears to be right but whether in the light of the evidence the verdict shows that the jury failed to perform its duty. As long as the verdict cannot be described as irrational, it must stand.”: Rivkin per McHugh J (at [17]). Although his Honour differed from the majority in the orders which should be made in Rivkin (his Honour would have allowed the appeal, set aside the orders of the Court of Appeal and ordered that the appeal to the Court of Appeal be dismissed), I do not understand the majority to have disagreed with his statement of this principle which applied long-standing precedents.

111 In deference to the parties’ submissions, and in dealing with the issues posed on appeal, I set out the manner in which the parties addressed those issues for this Court. I take into account in doing so both the strictures identified by McHugh J and the manner in which parties addressed the jury.

Imputation (a): The plaintiff behaved in an unethical manner by deliberately concealing from potential participants in drug trials the fact that he would be paid for their participation.

The appellant’s argument

112 The appellant relied primarily upon the manner in which he had addressed the jury in relation to this imputation. He submitted that paragraph 13, in combination with paragraph 5, inevitably conveyed the suggestion that patients should be told that doctors were being paid by Pharmaceutical Companies for arranging their participation in drug trials.

113 He submitted that paragraphs 32 and 33 made it clear that Mrs James did not know the appellant would be paid for her participation in the drug trial. He referred also to paragraph 81 and the fact that the appellant who appeared before the Guardianship Tribunal did not tell the Tribunal that he received payments for each visit ranging up to $1,000 a patient. He submitted that paragraph 81 suggested that the appellant’s conduct in failing to disclose his financial arrangements to the Tribunal was unethical and that this strengthened the inference that the appellant’s failure was a result of deliberate concealment.

20	One experiment, approved by the NSW Guardianship Tribunal, involved putting intellectually disabled people on a anti-epileptic drug which never succeeded in being registered anywhere in the world.
21	Professor Tattersall said many trials which harmed patients may be hidden from public view because pharmaceutical companies controlled the data.
22	“One of the main flaws in the process of [drug] registration is that you only know the studies which are shown to you,” he said. “You don’t know the studies that were done and weren’t shown to you.
23	“Clearly there is an opportunity for a company which is sponsoring a study to hide the dirty washing.
24	“I think the other thing that is true is that while the barriers for buying doctors have gone up quite a lot in North America and increasingly in Europe, they haven’t gone up here yet.”
25	Professor John Simes, director of the National Health and Medical Research Council’s clinical trial centre, said the lack of a publicly accessible central trials register in Australia meant there was no accurate way of knowing what trials were being done, and by whom.
26	Associate Professor Paul Komesaroff, chairman of the ethics committee of the Royal Australasian College of Physicians, said industry funded research was easier to obtain and much more lucrative than government-funded research.
27	“In many cases the industry sponsored trial doesn’t have a valid scientific intention. It is eroding research that is truly innovative in favour of research that satisfies commercial purposes.”
28	No cure, Mrs James, but thanks for all the money.
29	Helen James agreed to test a new epilepsy drug, to her cost. Gerard Ryle writes.
30	When Mrs Helen James consulted a new physician she was willing to listen to any suggestion. And, as it turned out, her complex form of epilepsy was just what the doctor ordered.
31	Dr Roy Beran, a Chatswood neurologist, suggested that she might join a study of an experimental new drug which offered great hope to people with her condition. He ran through the pros and cons and she agreed to a 12- month trial.
32	In making her decision, Mrs James didn’t know that her doctor had something to gain.
33	She wasn’t told that the pharmaceutical company Parke-Davis was paying a fee for every patient recruited for the trial, which was aimed at getting the anti-epileptic drug Gabapentin registered in the United States. The money covered study expenses while allowing an amount for Dr Beran’s time.
34	By agreeing to take part in September 1988, Mrs James became one of the first Australians recruited by their doctors into a booming new industry: testing experimental drugs on people here primarily for overseas markets.
35	Since regulations were eased a decade ago, Australia has become an important testing centre for international pharmaceutical companies which not only see a cheap place to do business but a willing test population.
36	TOMORROW How Sydney public hospitals earn cash trialling drugs on their patients.

37	For people like Mrs James the trials offer enormous hope. But they also require large personal sacrifices, which in her case lasted for years.
38	There are often endless visits to the doctor, painful side-effects and rounds of intrusive medical procedures.
39	Worst of all, there is no guarantee that the treatment will work.
40	“You go in hoping for a positive outcome [but] in retrospect I wish I had withdrawn from the trial much earlier,” said Mrs James.
41	“Several years of coping with the pressures of new and additional medications did not enhance the quality of my life as I had hoped”.
42	Mrs James found no cure for her form of epilepsy but Parke-Davis did very nicely out of Mrs James.
43	The drug which she and at least 53 other Australians trialled is now worth an estimated $1.5 billion a year for its present owner, Pfizer, which merged with Parke-Davis.
44	Dr Beran also enhanced his reputation through his involvement.
45	In fact, he is proud of the pioneering role he has played in this new drug testing industry, boasting in July to a prestigious international medical journal, Epilepsia, how he overcame initial problems getting ethical approval by setting up his own ethics committee.
46	Under Australian law, the approval from an ethics committee is critical before starting a clinical trial. Its role is also vitally important to patients to ensure their rights are looked after.
47	“We are probably a pretty unique practice here,” Dr Beran told the Herald. “At any one time we would have half a
48	No cure, but lots of money
49	From Page 1
50	dozen trials running, either starting up or winding down.
51	“What happens in Australia is that we are often the last port of call. When people cannot recruit patients overseas they say, ‘Well, let’s include Australia’.”
52	What Dr Beran didn’t reveal in Epilepsia was the make-up of the ethics committee that approved a number of his early drug trials and which was registered with the National Health and Medical Research Council. It included, among others, his sister, his rabbi, his former lawyer and his former patient.
53	“I originally had an ethics committee we created ourselves,” Dr Beran told the Herald.
54	“There were colleagues who questioned its integrity because it was created and could be argued had links, which I think is both insulting to me and insulting to the ethics committee.”
55	The global pharmaceutical companies paying Dr Beran’s bills also appeared to ignore the fact that the ethics committee was run out of the Epilepsy Association of NSW, of which Dr Beran was a senior board member.
56	The association’s then clinical psychologist, Mr Gary Banks – the man who, according to Dr Beran, put the members of the committee together – collected fees for a number of the psychological assessments for the trials in his capacity as a private psychologist.

57	The flow-on benefits didn’t stop there. Until 1998, Dr Beran’s wife, Maureen, and Mr Banks’s wife, Susan, were joint directors in a company called Strategic Health Evaluators that did the health economics, as consultants to the pharmaceutical industry, for at least three of the new anti-epileptic drugs tested by Dr Beran.
58	Mr Banks was a big shareholder in Strategic Health Evaluators until bought out by Dr Beran and his wife in 1998.
59	On the critical issue of the ethics committee, whose members changed over the years, Mr Banks’s recollection differs with that of Dr Beran.
60	He said he didn’t put it together, but rather he suggested a number of people who subsequently served on it.
61	By 1993 the issues for the ethics committee had been complicated by the inclusion of intellectually disabled people in Dr Beran’s trials.
62	Using intellectually disabled people in trials has prompted fierce international debate because such people can’t give consent on their own behalf and are unable to describe the all-important side-effects of new drugs.
63	The ethics committee was confronted with the issue after Dr Beran returned from Denmark, where he had visited the head office of the pharmaceutical company Novo Nordisk.
64	His mission, partly paid for by the company’s Australian arm, had been to persuade them to test another new anti-epileptic drug, Tiagabine, here. Nine research sites in Australia were eventually signed up but Dr Beran’s was the only one which included intellectually disabled people.
65	Novo Nordisk and Dr Beran said the patients were institutionalised residents of the Marsden Centre at Westmead and under the care of the then NSW Guardianship Board (now the Guardianship Tribunal). The Marsden Centre is a residential care facility run by the Department of Community Services.
66	A department spokesman confirmed Dr Beran had Marsden patients, but denied that residents were used in the trial.
67	Dr Beran defended the use of what he called “DDs” or “developmentally delayed” people in the Tiagabine trial even though discovering side-effects was one of its primary purposes.
68	“If I think a drug is good then I think everybody deserves that right [to take part in a trial],” he said “Should then we never put any DD on any new drug?”
69	Dr John Miller, medical director of Novo Nordisk’s Australian arm, also defended the trial, which ran from May 1993 until September 1994. He said three other sites in Britain and Denmark included intellectually disabled people in trial groups.
70	“When considering epilepsy, people with intellectual disability represent the most afflicted end of the spectrum and those in greatest need of help,” said Dr Miller.
71	“I would acknowledge the challenge of noting subtle side-effects of drug treatment in this population. However, this was recognised in the risk-benefit evaluation by the clinical investigators, ethics committees and others involved in the care and well-being of the patients.”

72	Dr Miller said the Australian arm of the trial was “pivotal” in getting Tiagabine registered with the US Food and Drug Administration. He also said that the ethics committee approval for Dr Beran’s part in the trial came from the ethics committee of Disability Resources Inc – a body that was being managed by Mr Banks.
73	Mr Banks said Disability Resources Inc provided “secretarial support” to the ethics committee when it moved from the Epilepsy Association in about late 1992.
74	Although the ethics committees of the NSW Epilepsy Association and Disability Resources Inc have long since closed, Dr Beran has continued using intellectually handicapped people in drug trials, in recent years with the approval of the Royal North Shore Hospital ethics committee.
75	In 1999, Dr Beran appeared before the Guardianship Tribunal where he asked for, and was granted, the right to use a number of intellectually disabled people in the trial of another new experimental anti-epileptic drug, Remacemide.
76	The drug has still not been registered anywhere, but it had been used experimentally by Dr Beran for a number of years, with mixed results.
77	“If you think the drug works I think it is almost unethical not to allow DDs, if you think they are well supervised,” Dr Beran explained. “I have used Remacemide for eights years, 10 years. I have one patient who has been rendered totally seizure free.”
78	Remacemide was shelved by its manufacturer, the giant Swedish company AstraZenica, before it could be given to any intellectually disabled people, but by then Dr Beran stood to collect fees from the trial because the preliminary examinations of patients had already begun.
79	The Herald has learnt that the “per capita” or per person fees in the Remacemide trial were to be broken down to 10 parts and calculated in British pounds.
80	Money would be paid for each of 10 proposed visits made by the patient, with the experimental drug not due to be administered until the seventh visit.
81	The payments for each visit ranged up to $1,000 a patient, but the Guardianship Tribunal was not told about the financial arrangements when Dr Beran appeared before it.
82	The deputy president of the tribunal, Ms Marion Brown, who attended the hearing that gave the go-ahead to Dr Beran, said financial disclosure was not required under State laws.
83	Aside from asking his patients to take part in trials, Dr Beran also advertises in newspapers such as The Sydney Morning Herald and The Mosman Daily for volunteers.
84	“Wanted: Volunteers for Migraine Treatment Study”, one advertisement reads. “Strategic Health Evaluators is seeking men and women between the ages of 18 and 65 who experience 1-6 migraines per month to participate in a migraine treatment study.”
85	Dr Beran is particularly proud of this, his latest study, which involves experimenting with a powerful anti-epileptic drug against migraine attacks.

86	“[The trial] was my idea,” he said. “I spoke to the drug company and said to them that I think this is an area that has not been looked at.”
87	Though the emphasis in the advertisement is that the drug would be provided free to patients, they are not specifically informed about the arrangement that pays Dr Beran for each person he recruits.
88	“I tell patients that to get a new drug to market costs [the drug company] $US500 million. My involvement in the trial could be $100,000,” he said.
89	“What I am selling is my time and my intellect. What they [the patients] are told is that the drug company pays for their medical treatment in the trial.”
90	Today, Dr Beran doesn’t recall much about the former ethics committee of the NSW Epilepsy Association and had to be pressed even to remember who served on it, including his sister Monica Kleinman, a psychologist.
91	“It was totally at arm’s length,” he said. “I had nothing to do with its administration, organisation or function. “Personally, I couldn’t give a damn whether I now everybody on an ethics committee or not, so long as I know them to be of the highest integrity.”
92	Mr Keith Roberts, the Epilepsy Association’s chief executive, is also keen to distance the present organisation from its past.
93	“It was inappropriate for an organisation such as this to have an ethics committee,” he said. “We closed it down.”
94	To Mrs James, however, the memory of the trial remains, especially as the drug continues to make newspaper headlines around the world. The drug is at the centre of dispute between its present owner, Pfizer, and the Australian company FH Faulding, which wants to manufacture a generic version.
95	Pfizer wants to retain its 1992 patent on the drug, which was obtained from the US Food and Drug Administration largely through two trials involving Australian patients. Nearly a quarter of those recruited worldwide were from Australia, said a Pfizer spokeswoman.
96	In the smaller of the two trials, Dr Beran recruited all 15 Australian patients.
97	Today, as the pharmaceutical companies squabble over the spoils, Mrs James – and thousands of other Australians like her – are slowly realising that what they volunteered for was research, not treatment.

Last Modified: 04/08/2004