Donvale Private Hospital Pty Ltd v National Mutual Health Insurance Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA              )
VICTORIA DISTRICT REGISTRY  )          No VG 56 of 1997 (074)
GENERAL DIVISION  )

BETWEEN:DONVALE PRIVATE HOSPITAL PTY LTD (ACN 005 390 750)

Applicant

AND:NATIONAL MUTUAL HEALTH INSURANCE PTY LTD (ACN 003 098 655)

Respondent

COURT:Sundberg J
DATE:4 March 1997
PLACE:Melbourne

EX TEMPORE REASONS FOR JUDGMENT

SUNDBERG J:
In the case of each of the letters to which it refers, the Statement of Claim pleads that its contents are defamatory and that they are misleading and deceptive or likely to mislead or deceive.

The claim in defamation
An interlocutory injunction to restrain publication of allegedly defamatory material will be granted only in a very clear case. As a general rule an applicant must establish that:

a subsequent finding that the matter complained of was not defamatory of the applicant would be set aside as unreasonable;

there is no real ground for supposing that the respondent may succeed upon any defence of justification, privilege or fair comment; and

the applicant is likely to recover more than only nominal damages.

See Swimsure (Laboratories) Pty Ltd v McDonald (1979) 2 NSWLR 796 at 799 and National Mutual Life Assoc v GTV Corporation [1988] VR 747.

Whatever might be thought about the first and third of those requirements, the second is not satisfied in the present case. The respondent will, in my view, be able to mount a respectable argument that the defence of qualified privilege is made out. Accordingly I will not grant the relief sought in reliance on the defamation causes of action.

The trade practices claim
As to s52 causes of action, the respondent argued that relief should be refused for the same reason that I have declined to grant relief on the defamation causes of action.

It was pointed out that the court's reluctance to grant interlocutory injunctions in defamation cases is based on the importance attached to the public interest in free speech. See Bonnard v Perryman [1891] 2 Ch 269. In reliance on this it was suggested that the reluctance to which I have referred should extend to the trade practices causes of action.

In the Swimsure case Hunt J said, at 800:

... a plaintiff cannot avoid that special exception [to the ordinary balance of convenience rule] by framing his case, not in defamation, but in injurious falsehood or otherwise: Fraser v Evans [1969] 1 QB 349 at 362; nor will the Court grant an injunction in such other cases, where its effect would be the same as an injunction which the Court would not grant in defamation: Woodward v Hutchins [1977] 1 WLR 760 at 764.

His Honour went on to hold that in suing for slander of goods (one form of the wider tort of injurious falsehood) the plaintiff in Swimsure was not avoiding the special exception, and his Honour continued the ex parte injunction he had earlier granted.

Counsel were not aware of any case in which this issue has arisen in a s52 context, and I have not found any such case. However the view has been expressed in an unattributed Practice Note in vol 56 of the Australian Law Journal at 552 that the special exception in defamation cases should be applied at the interlocutory stage of a s52 case, notwithstanding that neither privilege nor public discussion would constitute a reason for refusing a permanent injunction at the final hearing if it is found that the defendant's conduct has been misleading or deceptive or is likely to be so.

I need not decide this question, which was not explored before me in any depth, because on the assumption that the special exception does not apply, the applicant has not persuaded me that the relief sought should be granted. I am prepared to accept that there is a serious question to be tried that the letters are misleading or deceptive or likely to mislead or deceive, notwithstanding that none of them mentions the applicant, and I will assume that the
balance of convenience favours the grant of relief. However, in the exercise of my discretion I decline to grant relief.

The Doctors' and Hospitals' letters are clearly pro forma or circular letters. Those in evidence are both dated 20 December 1996. They were probably received by the various addressees a day or so later. That is when Dr Schofield received his. It seems to me most unlikely that the letters are still being dispatched ten weeks after the date those in evidence bear. The same applies to the request in the Hospitals' letter that the Doctors' letter be circulated to doctors with admitting rights. If the hospitals which received the letters soon after 20 December 1996 were going to act on the request, they would have done so weeks ago. In short, the damage (if any) caused by the letters has been done. The applicant should be left to its remedy in damages.

The Surgeon's letter is in a special position. The evidence shows it was a private letter written at the request of the addressee. That is to say, it is not a pro forma or circular letter.

In my view, there is no likelihood of this letter or letters like it being dispatched to other persons. For that reason I decline to grant relief in relation to this letter.

Although the Statement of Claim does not encompass the letter to patients, such as that received by Mrs Buckley, the application for relief was orally expanded to cover such letters. What I have said about the Doctors' letter and the Hospitals' letter applies to the Patients' letter.

The application is refused.

I certify that this and the preceding four pages are a true copy of the ex tempore reasons for judgment of the Honourable Justice Sundberg

........ ........ ........ ........ ........ ........ .

Associate
4 March 1997

Counsel for the Applicant: S Crennan QC and JJ Gleeson

Solicitors for the Applicant: National Mutual Holdings Ltd (Legal Department)

Counsel for the Respondent: R A Finkelstein QC and S E Marks

Solicitors for the Respondent: J M Smith & Emmerton

Date of Hearing: 28 February 1997

Place of Hearing: Melbourne

Date of Judgment: 4 March 1997

The Federal Court of Australia presided over by Justice Sundberg was presented with a case where Donvale Private Hospital sought an interlocutory injunction against National Mutual Health Insurance. The hospital sought relief from the publication of letters that it claimed were defamatory, misleading, or deceptive. The letters in question included correspondence addressed to doctors, hospitals, a surgeon, and patients. The primary legal issue before the court was whether the hospital was entitled to an interlocutory injunction to prevent the further dissemination of these letters. The court had to consider the criteria for granting such an injunction, specifically the likelihood of success in proving defamation or misleading conduct under the Trade Practices Act, as well as the balance of convenience.

Justice Sundberg began by examining the defamation claim, noting that interlocutory injunctions in defamation cases are only granted in very clear cases. The court held that there was a real possibility that the defence of qualified privilege could be successfully argued by the insurer, thus not satisfying the second criterion for an injunction. Consequently, the court declined to grant the injunction on the defamation claims. Moving to the claims under the Trade Practices Act, the court similarly found that the applicant had not established that relief should be granted. The judge was persuaded that there was a serious question to be tried regarding the misleading nature of the letters, but the court exercised its discretion to decline relief due to the limited ongoing impact of the letters' distribution. The judge concluded that the damage caused by the letters had likely already been done and that the hospital should seek its remedy in damages rather than an interlocutory injunction.

Ultimately, the court refused the application for an interlocutory injunction. The judge's reasoning was grounded in the specific circumstances of the case, including the nature and timing of the letters' distribution, and the discretion exercised in balancing the interests of the parties. No further orders were made by the court beyond the refusal of the injunction.

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