E v Australian Red Cross Society

[1992] HCATrans 164

••

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl64 of 1991

B e t w e e n -

g

Applicant

an~

AUSTRALIAN RED CROSS SOCIETY

First Respondent

AUSTRALIAN RED CROSS SOCIETY

NEW SOUTH WALES DIVISION

Second Respondent

CENTRAL SYDNEY AREA HEALTH

SERVICE

Third Respondent

Application for special leave

to appeal

Red Cross 1 4/6/92

BRENNAN J
DEANE J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 4 JUNE 1992. AT 4.06 PM

Copyright in the High Court of Australia

MR B.J. GROSS, QC:  May it please the Court, I appear with

MR M. CASHION, for the applicant. (instructed by

Caruana, Kay & Barry)

MR R.H. GILLIES, QC:  May it please the Court, I appear on

behalf of the first-named respondent, with my

learned friend, MR T.G. WODAK, (instructed by

Arthur Robinson & Hedderwicks), and on behalf of the second-named respondent, with my learned

friend, MR P. DWYER.	(instructed by Tress Cocks &
Maddox)

MR J.D. HEYDON, QC: If the Court pleases, I appear for the

third respondent, with MR P.R. GARLING.

(instructed by Audrey Lee)

BRENNAN J:	Mr Gross?
MR GROSS:	Might I hand up a list of authorities?

Your Honours, we attack the finding in the Full

Bench of the Federal Court on two bases, first of

all section 71(1) of the Trade Practices Act and,

secondly, in relation to the issue of negligence. In relation to the Trade Practices Act issue,

Justice Lockhart, with whom the other judges

agreed, did not disagree with the findings of

Justice Wilcox, that the Royal Prince Alfred

Hospital was a trading corporation; that it was. not an emanation of the Crown; that the applicant,

as a hospital patient, was a consumer and that the

blood plasma was goods.

However, His Honour held that there was no

relevant contract for the supply of goods under

section 71(1), and that finding, Your Honours, is

at 180 point 8.

BRENNAN J: Before you get to that, could you just give us

the reference to where there is a conclusion that

was goods? it was in trade or commerce and that blood plasma

MR GROSS:  The findings made by Wilcox J, on that aspect, I

have not got the reference to those, but

Justice Lockhart deals with what matters were resolved by Wilcox J at pages 179 and 180.

DEANE J:  But he said that Justice Wilcox did not deal with

the question whether the blood plasma was good.

BRENNAN J: At 182 point 5.

MR GROSS:  Thank you. Yes:

Red Cross 2 4/6/92

His Honour did not decide whether it was

appropriate to regard blood plasma as goods

within the meaning of s 71.

I am indebted to Your Honours.

BRENNAN J:	What about the trade and commerce?
MR GROSS:	Your Honours, I think Justice Lockhart passed over that because he found that the critical matter
was that there was no contract for the supply of
goods under section 71(1).

BRENNAN J: Well, I appreciate that is the point that you

wish to get to, but if this is a vehicle for getting to it we need to understand that the

foundation is there.

MR GROSS:	Is Your Honour inquiring about Justice Lockhart, because Justice Lockhart did not deal explicitly
with the question of whether it was in trade or
commerce, although at page 179 point 3 he said the
hospital was a trading corporation.

BRENNAN J: Well, did Justice Wilcox find that it was in

trade or commerce?

MR GROSS:  Your Honours, that is my recollection but I do

not have the precise reference, I am sorry. Can I

have my learned junior look for that reference

while I proceed, if I may?

BRENNAN J: Yes, Mr Gross.

MR GROSS:  Your Honours, the finding by His Honour at

page 180 point 8 that there was -

no relevant contract for the supply of goods

under s 71 -

is explained by His Honour at 182 to 184, and

Your Honours, at the bottom of 182, having dealt

with what I might describe as the other matters,

His Honour pointed out that the distinction between

agreements for the sale of goods and agreements for

performance of service "is often a fine one". He

referred to Robinson v Graves to the effect that

the traditional test looks at the substance of the

contract and then points out that Robinson v Graves

has been much criticized. Then His Honour turns to

the decision of the Court of Appeals of New York in Perlmutter v Beth David Hospital. Your Honours, if

I may read that passage at page 183:

We were referred to a decision of the Court of

Appeals of New York in Perlmutter v Beth David

Red Cross 4/6/92

Hospital where the majority of the Court held

that the essence of the contractual

relationship between the hospital and the

respondent Perlmutter was that the patient
bargained for and the hospital agreed to make
available the human skill and physical
material of medical science to the end that

the patient's health may be restored, and that

such a contract was one for services and was

not divisible into the provision of services

and the transfusion of blood.

His Honour then went on to hold, at the top of

page 184:

The essence of the contract ..... was one for

services, namely, the provision of hospital,

medical and nursing services for the purpose

of treating the appellant for his medical

problem and restoring him to health. To the

extent that goods were provided to him such as

food, sleeping tablets, antibiotics,

dressings -

blood, et cetera -

they were provided as an incident to the

contract for the provision of services.

Now, Your Honours, if I can just read from that

part of page 184 point 3, and this is where, in our

submission, one of the errors arises:

The contract between the CSAHS -

that is the statutory successor to the hospital -

and the appellant was one for services and is

not divisible into a contract for services and

for the supply of goods. I leave open,

however, the question whether in an

appropriate case a contract between a patient

and a hospital may be divisible in other

circumstances. But the provision on the facts
of this case of medicine, drugs and blood

cannot be severed into concepts of the

provision of services on the one hand and of

purchase and sale of goods on the other.

Your Honours, there were, in our submission, two

errors in relation to this analysis, bearing in

mind that it involves an adoption of the reasoning

in Perlmutter, which is on the preceding page.

Indeed, His Honour says at 183 point 8:

The process of reasoning of the majority -

Red Cross 4 4/6/92

in Perlmutter -

accords with my own approach in this case.

Your Honours, the first matter is that

His Honour incorrectly applied to section 71(1) of

the Trade Practices Act the distinctions which were
crucial in Perlmutter that the supply of blood was

not the result of a transaction which amounted to a

contract for the sale of that blood for the

purposes of sale of goods legislation.

If Your Honours would turn to Perlmutter, I

would take you to a very brief passage in that

case. Your Honours will see that Perlmutter is a

sale of goods case and it is a blood transfusion

case. If Your Honours would turn to page 794,

there is a short passage there in the first column

at the fifth line in the judgment of the majority:

The essence of the contractual relationship

between hospital and patient is readily

apparent; the patient bargains for, and the

hospital agrees to make available, the human

skill and physical materiel of medical science

to the end that the patient's health be

restored.

Such a contract is clearly one for

services, and, just as clearly, it is not divisible. Concepts of purchase and sale cannot separately be attached to the healing

materials - such as medicines, drugs or,

indeed, blood - supplied by the hospital for a

price as part of the medical services it

offers. That the property or title to certain

items of medical material may be transferred,

so to speak, from the hospital to the patient

during the course of medical treatment does

not serve to make each such transaction a

sale. "'Sale' and 'transfer' are not

synonymous", and not every transfer of

personal property constitutes a sale. It has

long been recognized that, when service

predominates, and transfer of personal

property is but an incidental feature of the

transaction, the transaction is not deemed a

sale within the Sales Act.

Your Honours, the majority reasoning, in our

submission, has no application to section 71(1)

because section 71(1) is not confined to sale

situations or where there is in effect a transfer

of goods from a vendor to a purchaser for an agreed

consideration known as a price.

Red Cross 4/6/92

The reasoning in Perlmutter is that the

concepts of purchase and sale, which are essential

for a sale of goods action, cannot separately be

attached to the healing materials which are

provided as part of the treatment setting, and one

cannot find a separate contract with a separate

price to that effect.

BRENNAN J:  What is the contract on which you rely to

satisfy section 71?

MR GROSS:	Your Honour, it is a contract to supply goods, being the manufactured blood plasma.
BRENNAN J:	Is it a discrete contract from some other one?
MR GROSS:	Your Honour, in our submission, if I can take

Your Honours quickly to the provisions, the

structure of the definitions of supply and

contracts for supply of good and services does not

make such a distinction relevant and, indeed, it is

Trade Practices
unnecessary in the context of the from the Sale of Goods legislation, namely that of the essence or the substance of the contract.

BRENNAN J:  My question was not what the distinction was, it

was simply, "What is the contract upon which you

rely?", as a matter of fact.

MR GROSS:  Yes, Your Honour. It can be put in two ways,

Your Honours. It is a contract to provide medical

services and medical materials to the end of

preserving the patient's health. So that is the

first characterization. Secondly, one can put

this, that he signed, as Justice Wilcox referred

to-, a consent form for a blood transfusion and at

the point where he signed that document either we

have a concurrent contract or, alternatively, more

likely, we have an alteration or amendment of the

existing contract so that there is a specific	provision for him to receive those particular
goods, although not ascertained at that stage.

GAUDRON J: Is there a finding that the hospital supplied,

as distinct from transfused the plasma?

MR GROSS:  There is not a finding itself but, Your Honours,

in our submission, it is unarguable from the

wording of "supply" that given the breadth of that

expression in the Trade Practices Act and not

confined to sale situations that there was a supply

by the hospital of the blood plasma which it had

received itself from the blood bank.

GAUDRON J:  It might have been merely a transfusion of that

supplied by the blood bank.

Red Cross 6 4/6/92

MR GROSS: 

Your Honour, it is identifiable goods which

becomes transposed into his body, the same way as a
hip replacement or a heart valve or a pin in a

fractured  leg .

GAUDRON J: But there is no finding as such, at first

instance?

MR GROSS:  Your Honour, there is no finding in terms, that

is correct, because His Honour Justice Wilcox and

the Federal Court found against us on the basis

that there was no contract for the supply of goods

because looking at the essential nature of the

transaction you could not so characterize the

overall treatment contract.

If I can just take Your Honours to the

definition of "supply", if I may, in the Trade

Practices Act. At the top of the materials,

Your Honours will see that supply, in section 4 is

defined:

when used as a verb, includes -

(a) in relation to goods - supply (including

re-supply) by way of sale, exchange, lease,

hire or hire-purchase -

et cetera. But, Your Honours, it is an inclusive

definition and "supply" is a term of wide import

and includes plainly, in our submission, supply for

which there is no agreed or separate price and
which comes free of charge. Section 4C,

Your Honours, which is a couple of pages over in

the materials, contemplates that you can have a

supply of goods together with a supply of services

within the same contract. Section 4C(c),

. Your	Honours:
In this Act, unless the contrary intention
appears -
(c) a reference to the supply or acquisition
of goods includes a reference to the supply or
acquisition of goods together with other
property or services, or both -

and Your Honours, there is no suggestion that the

dominance of one element over the other, that is

services over goods, or vice versa, makes the other

incidental only to an essential purpose you have to

find so as to disqualify it from consideration.

Nor, Your Honours, is there any suggestion that the

ultimate benefit that it intended or the worthy

motives of the supplier, should be a matter for

discrimination for the purpose of determining

whether the contract has the relevant character.

Red Cross 7 4/6/92

In our submission, the dominant purpose which, of course, was so important in the Full Federal Court

is, as the judgment indicates on page 183:

to the end that the patient's health may be

restored.

There is the provision, as was pointed out at

page 183, of both "human skill and physical

materials". The particular benevolent or

therapeutic purpose applied equally to both,
therefore it is no reason for disqualifying goods

on the basis that it only attaches to the services.

Your Honours, with a blood transfusion or the

insertion of any prosthesis, heart valve or hip

joint, there is no reason why either the

professional setting or the therapeutic aims should

matter. Your Honours, section 4C, in our

submission, contemplates that you can treat a

hybrid contract, or mixed transaction, for both

goods and services, as having a dual character,
which is divisible for the purposes of the Act into

one for goods, which is covered by section 71 and one for services, which is covered by section 74.

BRENNAN J:  Mr Gross, was there any concession that the

hospital as distinct from the blood bank was the

supplier, or any finding that the hospital had

acquired the blood from the blood bank?

MR GROSS:  Your Honour, it does not have to acquire it from

the blood bank. Your Honour, I did not appear at

trial or in the Full Federal Court, I am sorry, and

I will inquire of my junior, Your Honours, but - I

am reminded at page 96 point 6 of the book,

half-way through that paragraph:

He did have a contract with the third

respondent -

and that is the hospital. Do Your Honours have

that, 96 point 6? It is page 94 of the old

judgment.

But it was for the provision of nursing

services; perhaps also medical attention.

There was no contract for the supply of the

blood plasma, which was intended - if

necessary - to be supplied, and was supplied,

free of charge.

I think that probably answers Your Honour's

question.

GAUDRON J: But it does not say by whom.

Red Cross	4/6/92
BRENNAN J:	By whom.

MR GROSS: Well, Your Honours, this is being discussed in

the context of what flows from the contract as

between the applicant and the third respondent.

Your Honours, there has never been any suggestion

that the blood bank, as it were, transmitted the

blood direct to the applicant; the evidence was

quite clear that the blood was received by the

hospital and, in the ordinary course of treatment,

the blood was then supplied to the patient.

BRENNAN J: This paragraph that you have just drawn our

attention to denies the existence of any relevant

contract for the supply, does it not?

MR GROSS:  Your Honours, yes. Justice Wilcox made the same

finding, that there was no contract for the supply

of the blood plasma. In other words, his reasoning

was the same as Justice Lockhart, that the essence

of the contract was, judged on, presumably, a

Robinson v Graves type analysis, for provision of

medical expertise and nursing services. So that

His Honour plainly saw the goods, that is the

blood, as being incidental to a larger contract

which bore the character of a contract for services

rather than a contract for goods.

But, Your Honours, that was in the context of

His Honour feeling constrained to define it one way

or another.	The whole context of section 4C is
contrary to the need for that choice.	Can I just

take Your Honours back to what Justice Lockhart

said, and this is at page 184 point 5. His Honour

said:

I leave open, however, the question whether in

an appropriate case a contract between a

patient and a hospital may be divisible in

other circumstances.

Section 4C, to which I have referred Your Honours,	in our submission, enables the distribution of the
agreed contractual benefits into goods and services
and enables separate consideration of the legal
consequences under section 71, in the case of goods, and section 74, in the case of services,
without the need for any inquiry as to whether it is appropriate to do so and without inquiring whether the circumstances permit division of the
contract.

It is unclear and, no doubt, unclear to future

litigants, Your Honours, in this setting what will

be an appropriate case which Justice Lockhart has

in mind and what are the other circumstances where

one can divide up the contract for that purpose.

Red Cross 9 4/6/92

Can I also remind Your Honours that

section 4B(d)(ii) is a further indication that one

does not have to go looking for the essence of the

contract. That is about four pages into the bundle

of materials. Your Honours will see section 4B is

the definition of "consumers". Do Your Honours

have that? Of course, that defines the matter.

4B(l)(a):

a person shall be taken to have acquired

particular goods as a consumer if, and only

if -

(i) the price of the goods did not exceed the

prescribed amount -

and there are some other alternatives.

(b) a person shall be taken to have acquired

particular services as a consumer if, and only

if -

(i) the price of the services did not exceed

the prescribed amount -

That seems to suggest a need for a price, but then one goes to 4(d) one finds that:

where a person acquired goods or services

otherwise than by way of purchase, the price

of the good or services shall be taken to have

been -

(i) the price at which, at the time of the
acquisition, the person could have purchased

the goods or services from the supplier;

(ii) if, at the time of the acquisition, the

goods or services were not available for

purchase from the supplier or were so

available only together with other property or

services -

et cetera, you then go to:

the lowest price at which the person could, at
that time, reasonably have purchased goods or

services of that kind from another supplier.

So, both 4B(d)(ii) and 4C contemplate that the two

are going to be mixed together as, of course, is a

common feature of modern transactions. And it also

contemplates that the price, in a sense, can be a

hypothetical price based on certain assumptions, if

in fact there ~s no provision for a price in the

contract. So, Your Honours, the very

considerations that appealed to the judges in

Red Cross 10 4/6/92

Perlmutter and to Justice Lockhart find no place in

this Act.

Your Honours, section 4C contemplates, in our

submission, the co-existence of implied conditions
as to quality of goods, and implied conditions as

to services without the need to divide the contract

and, of course, 4B(d)(ii) re-enforces that

position.

The disqualifying factor in the present case, against division of the treatment contract, was the

therapeutic goals of the hospital, and that is a

reference, the goods and services provided:

to the end that the patient's health may be

restored -

page 183. Your Honours, this factor exists in

every medical treatment situation, and it applies

equally to both services and materials, so that, in

our submission, later litigants may be confused as

to what ..... amount to appropriate circumstances
which warrant division of the treatment contract.

Your Honours, it poses these questions: should items or medical treatment, such as transplants,

surgical implants and the like, qualify because the

reception of those goods into the body is the main intended purpose of the hospital admission and not

just a provisional or contingent item like

medicines or blood, depending on how the treatment
goes.

Your Honours, how can the treatment options be graded for medical importance, that is goods as

against services, and how can one determine their

.	significance at varying stages in the treatment relationship when of course the facts known to each
of the parties can be varying? The significance of matters, if there is to be an appropriate case and
there are to be circumstances that warrant

severance of the contract, as His Honour suggests,

is it to depend on what were the expectations that

were communicated, what was the difficulty of the
operation?

In our submission, by providing this answer,

apart from confusing the law in relation to the

Trade Practices Act, it has created, in our

submission, a minefield of medical devices

litigation or medical implants litigation where it

would be impossible to determine where the line is

to be drawn.

Your Honours, we pointed out that he signed a

consent to the blood transfusion - there is a

Red Cross 11 4/6/92

reference to that at page 55 of Justice Wilcox's

judgment. As the treatment progresses in a

hospital, this question is raised: can medical

decisions after admission, depending on the

progress of the patient's health, create a

divisible contract which can have as its essence

the supply of medical goods so as to qualify under
the test proposed by the Full Bench, and can an

amendment give it that character? Your Honour, in
our submission, this judgment leaves all those

matters at large.

BRENNAN J:  Mr Gross, to make section 71 run, there has to

be the building blocks or the elements which are

referred to. Looking at the pages to which you

have thus far given us reference - and I might have

missed some - I do not see any finding of any of

the following elements, and one can trace them

seriatim through the lines of 71(1) in the print.

There is no finding of a supply by the hospital,

there is no finding that the blood was goods, there

is no finding that the supply, if any, was in the

course of a business, there is no finding of a

contract for the supply, and I doubt whether there

is a finding in relation to the plaintiff being a

consumer. Those being the elements of 71, do you

not have to be able to point to the findings of

those elements in order to make 71 run?

MR GROSS: 

The finding that the contract was in the course

of a business, is at the bottom of page 100,
point 9.

BRENNAN J: Page 100, point 9.

MR GROSS: This is as against the third respondent, the

hospital; do Your Honours have that? First of all

the question starts at 100 point 4:

Then is it said that the nursing services were

not supply "in the course of a business".

I see no reason to doubt that its contract

with the applicant was made "in the course of

a business".

The argument is then recited, down to the bottom:

Your Honours, can I then go to the item - - -

BRENNAN J: Just a moment, that is nursing services; that is

the commencement of the paragraph, is it not?

MR GROSS:  It is the last three lines, Your Honours, at

page 100.

Red Cross 12 4/6/92

BRENNAN J: The last three lines speak of "the provision of

services".

MR GROSS:  Yes. Your Honours, of course, His Honour, at

that point is not discriminating between provision

of goods and provision of services, but rather he

is - His Honour is, in any event moving to the

concept that the essence of the contract is one for

services, but the question is whether - - -

BRENNAN J: Well he has passed that one because he has

already found that there was - at 96 - no contract

for the supply of the blood.

MR GROSS: 

Yes and, Your Honour, the question of consumer,

can I take Your Honours to that? It is at the top
of page 100 - yes, Your Honours, there is a long

passage before that, but that seems to be the end.
It starts really at page 98 point 8, the discussion

of consumer starts and, Your Honours, that

discussion ends at the top of page 100:

The notion of a "consumer" of services

may be unfamiliar to some. But once that

notion is accepted, I do not see why a

hospital patient who receives nursing services

in return for payment of fees should not be

regarded as a "consumer" of those services

within the ordinary meaning of that term.

There is nothing in s.4B to make that meaning

inapplicable.

BRENNAN J: It may be, of course, that the question of

whether or not the plaintiff was a consumer is a

mere conclusion of law on whatever facts were not

in dispute, namely, that the patient had received a

blood transfusion. But even if one leaves that

aside the problem of finding that there was a

supply by the hospital, that the blood was goods,

that the blood was supplied by the hospital in the

course of a business, and that there was a contract

by the hospital for the supply of the blood, thus

far seem to be lacking.

MR GROSS: Well, .I thought I had already taken Your Honours

to the reference in relation to supply.

BRENNAN J:	You had, and it did not seem to support what you were saying at 96 and 100. At 96 there was no
contract for the supply is the proposition at the
end of that paragraph.

MR GROSS: Well, Your Honours, page 96 point 7, and I

apologize for reading it again:

He did have a contract with the third

respondent. But it was for the provision of

Red Cross 13 4/6/92

nursing services; perhaps also medical

attention. There was no contract for the

supply of the blood plasma, which was

intended - if necessary - to be supplied, and

was supplied.

That is a reference to the blood plasma.

DEANE J:	It does not say it was supplied by the hospital.
MR GROSS:	Your Honours, the third respondent is the

hospital. Your Honours, His Honour has not

BRENNAN J: But is it not - I mean, the reality is that the

blood bank provides the blood, and the hospital

transfuses it, does it not?

MR GROSS:	Yes, but the hospital receives it first.
BRENNAN J:	You mean, physically?
MR GROSS:	Yes, physically receives it.

BRENNAN J: Well now, by physically receiving it and

carrying it along the corridor, is that a supply by

the hospital?

MR GROSS: Well, they acquire it to begin with and it - - -

BRENNAN J: Do they? Is there a finding of that?

MR GROSS: Well, Your Honours, there is no finding of that,

because I do not know that any of this was in

dispute. Your Honours, a judgment that is some 140

long can miss some things, and Your Honours, the

que_stion of whether - - -

BRENNAN J: Well, is there a concession or a pleading which

shows it?

MR GROSS: Well, Your Honours, I am reminded that the

definition of "supply" includes "re-supply" and

Your Honours there is no doubt in relation to the facts, and this was not an issue, that the hospital

had received the blood from the blood bank and

then, at a later stage, the blood was transfused

into the applicant in the treatment setting in the hospital. Your Honours, what more is required for

supply, used in terms of its natural meaning?

DEANE J:  Non constat supply for the purpose of the

Trade Practices Act. I mean, say for example you had a direct transfusion of blood from a donor to

the patient, which the hospital effected. Would

you say the hospital supplied the blood for the

purposes of the Trade Practices Act.

Red Cross 14 4/6/92

MR GROSS: Well, Your Honours, if they have it in their

possession first, and then they give it to him, it

is, in our submission, a supply for the purposes of

the Trade Practices Act. Your Honours, supply is

not

DEANE J: Well, did the blood bank supply the blood to your

client?

MR GROSS: Well, Your Honours, that is not how it is done;

they deal with the hospital, they give the hospital

its reservoir, so to speak. The hospital then

draws from that reservoir in order to - or that is

accumulated supply and then resupplies it to the

patient.

DEANE J: So, if one can use the language, you would say the

blood plasma became the property of the hospital?

MR GROSS: Yes, Your Honour, it does. It does not pay for

it, but when it receives it, it is to dispose of.

DEANE J: What, it could sell it?

MR GROSS: Well, Your Honour, there are no doubt ethical

restraints and professional restraints - - -

DEANE J:  No, but I mean in so far as the arrangements

between the hospital and the blood bank, the
hospital does not receive it as something that can
be used on its patients; it receives it as

something which becomes its property.

MR GROSS:  It receives it for the commonly intended purpose

of supplying it to its patients. There is no other

legitimate use of that scarce resource. So that,

Your Honours, there is the common expectation of

all concerned that that will be its normal use.

The decision as to whether the blood is to be used

or not is a matter for the hospital. There is no
obligation to use it just because they have

received it, but on the other hand, they have it

and they deal with it in their own medical

discretion in dealing with the needs of patients.

There is no obligation to send back whatever is unused, there is no obligation to account for it

back to the blood bank.	Once they have it, it is
their blood.	Your Honours, in a United States

situation, the blood might be sold by the blood bank. There are all sorts of ways in which the

blood can get to a hospital, but the manner in

which it is dealt with in this country is that it

is supplied free of charge.

BRENNAN J: Perhaps the underlying problem is that it has

been discussed without the basic finding that the

blood is goods. The question of whether or not

Red Cross 15 4/6/92

human tissue is susceptible of proprietary rights

is, I would have thought, one of some doubt.

MR GROSS:  Your Honours, at page 99 there is discussion

concerning blood plasma and the fact that one is

not able, within section 4B, to put a price on it.

This is in reciting the submissions of the third respondent:

that the notion of "consumer" evident in s4B

is "of being able to fix a purchase price of

the goods or alternatively a money value".

They say, rightly, that in Australia it is not

possible to put a price on blood plasma.

Blood products are not sold in Australia ..... a

sale of blood plasma would probably be

unlawful.

Your Honours, there is no trace in His Honour's

assessment of the submissions that there is any

dispute on the question of whether there is a

supply of it. The reference to being a supply of

services relates rather to the character of the

contract under which the provision is made, and the

blood itself is a constituted, manufactured blood

product and so, in our submission, stands in the
same category as any other goods, although it

obviously has certain beneficial purposes within a

medical setting.

DEANE J: But it is a combined preliminary question, is it

not? One can fully understand the hospital being

liable for negligence or what have you, but the

preliminary question here is whether section 71(1),

in referring of supplying goods to a consumer in

the course of a business, was intended to encompass

the supply of blood or a heart or lungs by a

hospital with the consequence that if it so happens

that the blood or the heart or the lungs were not

of merchantable quality, presuming you can apply

that to that sort of thing, the hospital is to be

liable in damages regardless of the fact that it

was guilty of no negligence whatsoever.

When in that context you approach the

question: is the transfusing of blood or dealing

with a human heart or a lung a supply of goods to a

consumer in the course of a business, and you have

no finding in the court below that it was or that

it is, it is very difficult to get this Court to

take on the questions of construction that you want

to argue.

MR GROSS:	Your Honours, in our submission, we have, "in the course of the business", and the question of supply
does -

Red Cross 16 4/6/92

DEANE J:  No, you have not, you have got the supply of

nursing services was "in the course of the

business".

MR GROSS:  Your Honour, I think "nursing" is used not to

refer to the Florence Nightingale-type approach, it

is describing the whole treatment setting and the

term is not used as a matter of distinction between

one and the other.

BRENNAN J: But it is because it appears at page 100 after

the passage on page 96.

MR GROSS:	Your Honours, this is legal analysis which is related to that which has gone before. Might I
respond to the one matter that Your Honour
Justice Deane raised. It is not permissible, in
our submission, to read down a statute, which is a
strict liability statute, by reference to concepts
of reasonableness or negligence or of avoidability.
The whole idea of statutory strict liability, as
presumably will occur when the Trade Practices Act
is amended to provide for strict product liability, ignores that particular consideration or equation.

DEANE J: But the answer to that is that it is permissible

to take account of what the Act does in determining
whether it was the legislative intent that supply

of goods to a consumer in the course of a business

should encompass the supply of blood or an

artificial organ by a hospital in the course of

carrying out an operation.

MR GROSS:  I think Your Honours have my submissions. might I move on to the next aspect, if Your Honours But

please, and that relates to the issue of

negligence. If I can take Your Honours, first of

.all, to pages 213 to 214, of the book. On page 213

there is a lengthy quotation from His Honour

Mr Justice Wilcox and can I only deal with part of

that, at 213 point 7, half-way through that

paragraph: 

Although surrogate testing was not considered before August 1984, I must dismiss the claim

because I am not satisfied that, had it been

considered, a reasonable person in the

position of the respondents would have decided

to introduce anti-HBc testing at an earlier

date. This is not because I doubt the

foreseeability of HIV infection from a blood

transfusion or that anti-HBc surrogate testing

had a useful role to play in reducing the risk

of such infection. The reason for my

conclusion is the possibly serious effect on

the blood supply. In the absence of that

Red Cross 17 4/6/92

possibility, I would certainly hold the

applicant entitled to recover damages.

Your Honours, Justice Lockhart then says:

It thus appears that his Honour would have

found negligence against the Society in not

introducing the anti-HBc testing before

October 1984 were it not for his conclusion

that to have done so would possibly have had a

serious effect on the available blood supply

to the Society to meet the community's needs

for plasma, namely, the wasting of about five

percent of all donations of blood, most of

which his Honour found at 380 were in fact

suitable for use.

Your Honours, in the Federal Court, the main attack

made by the applicant was what His Honour described

as the possibly serious effect on the blood supply

was not, on the evidence, a matter which justified

withholding what would otherwise have been a

certain - that is His Honour's expression - holding

of negligence.

Your Honours, if I can just briefly explain

the problem there: the judgment of Justice Wilcox,
concerning the possible impact of a drop of 5 per
cent in the supply came down to this: at page 146

His Honour asked, at point 8:

But how critical was the last 5% of the

supply? In practice, would the loss of a

further 5% of blood have caused any problem;
and, if so, to what degree? Surprisingly, the

evidence does not provide answers to these

questions.

I have been troubled as to the attitude I

should take regarding the lack of evidence

about the practical effect of anti-HBc testing

on the adequacy of the blood supply. On the

one hand, it might have been expected that, if

there was a basis for real concern, detailed

evidence to that effect would have been

adduced by one or more of the respondents.

But, on the other hand, there was no challenge

to the general statements made by Dr Archer.

It was never suggested to him that, whatever

the theoretical inadequacy of the available

number of units, there was no real practical

problem. So, although I would have preferred

to rest my judgment on more precise

information than is available, I think that I

should interpret Dr Archer's general

statements as an indication of his perception
that any reduction in the available blood

Red Cross 18 4/6/92

supply would have had serious practical

effects.

Now, Your Honours, that is dealt with later in the

judgments and I will come back to that. But our

point is this, Your Honours, that the Federal Court

in deciding the negligence issue, went well beyond

the proper role of an appellate court in reviewing

factual findings based on expert evidence;

because, Your Honours, Justice Wilcox, but for this

factor involving a void in the evidence, and where

the relevant evidence of an impact could be

expected to come from the first and second
respondents who would know all about such matters,

and where, in fact, the blood banks, without

hesitation when Dr Archer came back from overseas

in July 1984, introduced such testing straight

away, sought the funding so that all could be

provided for and there was no evidence of any
actual shortage of the blood supply during that

period.

It was our submission that given what was the

known danger to the applicant of a major degree which I will describe in a second, there was no

basis for outweighing the probability of injury to

someone within the population who was exposed by

the test they took, to find that outweighed by what

was just a bare possibility based on what

His Honour found to be a concern about the blood

supply which was not fortified by any form of

evidence, and which indeed only went to the stage,

in our submission, of indicating what any blood

bank has, a concern that their blood supply is

sufficient and, of course, blood banks in dealing with their supply, are dealing with an expandable

commodity which is amenable where there is a crisis

to public appeals as obviously takes place from

time to time, and other steps.

Alternatively, our case is that as it was,

they expected to have the definitive HIV test

within a very short space of time, so that as at April 1984, the United States Director of Health

was promising a commercially available HIV test
within six months. That would bring it to

October 1984 which is when we got the blood

transfusion, and as it was a specific screening

test did become available in March 1984. At the

meeting on 16 August 1984 of the committee of the

blood banks, specific screening test for HIV was

expected by the committee in early 1985. That is

198 point 7.

So that, what one was looking at was, a very,

very short period of time, during which they had to
do the best they could with what they had, but

Red Cross 19 4/6/92

eventually you would have no need for surrogate

testing; you could actually have a specific

commercially available test for AIDS. So that,

Your Honours, there was a major attack made on

Justice Wilcox's hesitancy about taking that last

step and finding negligence, merely because he

found that Doctor Archer was concerned about the

matter.

Now, Your Honours, what the Full Federal Court

did was, each judge proceeded to decide the matter

by drawing in an uncritical and unqualified

fashion, from the evidence that was given and, as

it were, arraying a list of reasons why

Doctor Archer or the blood bank would not introduce

surrogate blood testing. But these were reasons

which plainly Justice Wilcox found entirely

unconvincing.

Now, Your Honours, can I just show Your Honours quickly how that was done.

Justice Lockhart at page 185 point 6, under the heading "Facts":

Before turning to these questions it is

necessary to state the relevant facts. I have

been greatly assisted by the full and careful

statement of the facts as found by His Honour

in his reasons for judgment -

But Your Honours, this is the matter we complain

about -

but it is necessary for a proper understanding of the issues on the appeal to restate some of

them and to refer to some additional facts to

which we were directed in argument and which
were not the subject of specific findings by

His Honour. Indeed, the course taken in argument when referring to facts additional to

those the subject of findings by His Honour	has involved the Court in examining closely	and at length a deal of the evidence in the
case, in particular, the evidence of certain of the expert witnesses called by the parties.

And then they are listed. Your Honours,

Justice Sheppard took the same line, starting at

page 240 point 5. There are a number of passages I

want to take Your Honours to, but Your Honours,

they are short passages. A critical question on

the appeal was whether Doctor Archer even

considered the possible danger to the overall blood

supply by reducing the overall blood supply by throwing out blood which, in fact, was not HIV

positive, but which is positive to Hepatitis B

anti-body testing.

Red Cross 20 4/6/92

At page 240 point 5:

There is, apparently, no clear evidence from

Dr Archer that, at any relevant time, he

considered this problem -

that is the 5 per cent problem, Your Honours, and

its implications on the blood supply -

and decided that he would not institute

surrogate testing because it would lead to the

loss of blood supply.

At page 241 point 5, the middle of the next page,
middle paragraph, His Honour having quoted from

some of the evidence of Doctor Archer on a number

of other questions, namely, whether they should

have back-tested or whether they should have

changed their system so as to only send out tested

blood and not untested blood.	Your Honours, I will
read at the middle of page 241:

To me that evidence goes to the question

of the reasonableness or otherwise of testing
already donated blood and blood products

derived from it. It does not go in any direct

way to any fear on the part of Dr Archer that

the distribution of untested blood in October

1984 would or might prejudice the blood

supply.

One then goes, Your Honours, to 242 point 3, and

this is in the course of a discussion,

Your Honours, which is concerned with the potential

confusion if the blood was tested out of order. At

page 242 point 3:

When pressed, Dr Archer said, "Well, I think

the answer to that question is, we were so

short of blood at this time that everything

went out. Everything went out within days."

It was suggested to him that the blood donated

by 09 -

that is the American donor -

stayed in the blood bank from 3 to

18 October 1984. Dr Archer said that that

would have been quite exceptional and added

that there had been a technical committee

meeting to discuss the shortage of blood and

he appealed to the Health Department for more

funds to get more blood, "We were - as a

result of the Lokar publicity, the donor

numbers fell down. "

Red Cross 21 4/6/92

This evidence, given in cross-examination

though it was, indicates a concern about the

blood supply although it does not specifically

emerge from what Dr Archer said that he

decided to let untested blood go out because

of the shortage of blood.

Your Honours, then what His Honour did was that

His Honour quoted from Professor Gust at the bottom of page 242 and the top of page 243:

In the short period of time between the

introduction of anticore testing and specific

HIV testing in 1985 I think we were very lucky

that there was not a major disaster in that
time that produced an unexpected requirement

for blood. We would have been in great

trouble if something like a Granville train

disaster or a plane crash or something had

occurred at that time.

Your Honours, the evidence was on that particular

question that when a Granville rail disaster or

something spectacular like that happens, there is a public request for blood and people come running to

meet the increased demand. At page 145 point 6,

indeed, Dr Archer is quoted by Justice Wilcox in

this fashion:

Dr Archer explained that the problem was not primarily one of coping with major

emergencies, such as the Granville rail

disaster. He said that, at such times, large

numbers of people come forward to give blood.

The problem was to keep up the supply on a day

to day basis during ordinary times.

So that, Your Honours, that problem did not impress

either Dr Archer or, plainly, Justice Wilcox, but

here we have, on page 243, His Honour calling

Professor Gust's opinion on this issue into aid as

shortage of the blood supply. indicating that there was a real problem about the

BRENNAN J: What is the point you are making?

MR GROSS:	I am sorry, I am about to give Your Honours that. If Your Honours go back then to 243 where we find
the conclusion of Justice Sheppard, at the top of
243:

I think that all I would say about the

ultimate approach made by his Honour in
resolving the question of negligence is that

the shortage of blood to which Dr Archer

referred was a factor, but not the only factor

to be taken into account. One has to look at

Red Cross 22 4/6/92

the totality of the evidence. If one does, I

am satisfied that the failure ..... was

reasonable -

Your Honours, what His Honour has done there is to

treat His Honour Justice Wilcox's concern about the

possible effect on the blood supply as just being a

factor to be taken into account with all the other

factors which would make it reasonable to refuse to

not introduce the testing. Justice Wilcox,
however, in our submission, made that factor the

factor which prevented what would otherwise be a

certain finding of negligence. Justice Sheppard,

however, has basically treated that factor and all

of the other factors as warranting a decision which

he independently makes on the facts.

BRENNAN J:  Now, as a matter of legal analysis, the absence

of the anti HBc testing was established. There is

no question of that as a fact, that there was no

testing.

GAUDRON J: Yes.

BRENNAN J:  The next question is, would a reasonable

authority in the position of the Red Cross at this

time, in these circumstances, have had an HBc

program in place?

GAUDRON J: Yes.

BRENNAN J: Well, does that not require a consideration of

all relevant factors?

MR GROSS:  Yes, but, Your Honours, what the Federal Court

did was quote, in an unqualified way, from the

witnesses, in particular giving emphasis to the

strongest positions of Professor Holland and the

weakest positions of Professor Engleman, who was

the applicant's expert, and, Your Honours, in doing

so, gave to the respondents' evidence a credence

which plainly Justice Wilcox did not give it.

Your Honours, there are reasons given by

Professor Holland and other doctors called in the respondents' case, as to why you would not

introduce the testing, and His Honour rejected all

of these reasons one by one, including the

so-called magnet effect - that is, you attract more

bad donors because they believe that you are

testing. He rejected the argument that you should

not have hepatitis B testing because only a

percentage of the people who are positive to

hepatitis B will be positive to the HIV virus.

BRENNAN J:  When you say he rejected it, what His Honour did

necessarily was to consider that aspect, the magnet

Red Cross 23 4/6/92

effect, for example, or the disconformity between

HBc results and HIV infection and, having regard to

all those matters, his view was that a reasonable

authority in this position would, but for the loss

of the five per cent blood, have instituted the HBc test. Their Honours in the Full Court, considering all the same facts, were not prepared to discount

those factors perhaps, to the same extent as

Justice Wilcox.

MR GROSS:  Your Honours, in our submission, they drew from

materials which depended upon the subtle influence

of demeanour before Justice Wilcox as to how much

cogency he gave those reasons.

BRENNAN J: But there is no question of credibility amongst

these experts, was there?

MR GROSS:  Yes, indeed there was, Your Honour.

BRENNAN J: There was.

MR GROSS:  Yes, Professor Holland and the other witnesses

were strongly cross-examined and there was head-on

conflict on these questions.

BRENNAN J: Well, there may have been a conflict, but was

there any resolution of credibility questions?

MR GROSS:	Your Honours, the credibility of all the witnesses was attacked in cross-examination. In
other words, to what extent can you rely upon this
witness.  Your Honours, can I just point out one
matter.  I think there may have been a
misunderstanding.  Would Your Honours just go to
page 191 and Your Honours will see, in the judgment
of ·Justice Lockhart, the following - 191 point 5:

It was accepted on all sides that many people

who tested anti-HBc positive would not in fact

be HIV carriers. It appears from the

evidence, as best I can glean it, that the

percentage of persons who test anti-HBc

positive and who are in fact HIV carriers is

about 40 to 50 percent, a point relied on

strongly by counsel for the Society to negate
negligence and causation in this case.

So that, Your Honours, the blood that is being

thrown out is blood that, it may be said, is

probably good in the sense that you have got a 50

to 60 per cent chance that it will be blood that

does not contain the HIV virus.

BRENNAN J: But you have also got blood left in which,

having been tested, is HIV positive.

Red Cross 24 4/6/92

MR GROSS:  Your Honours, that is so but, in our submission,

there was knowledge by the blood banks that those

who were transfused with HIV blood would catch the
HIV virus, which is the AIDS virus and,

Your Honours, the consequence of that is certain death at some point in time, from that condition.

Your Honours, it is almost invariably fatal.	So
that, Your Honours, there is an obligation to

reduce down the numbers by those feasible means

that existed and, Your Honours, that was the whole

purpose of, as it were - screening the donor by

questionnaires was to eliminate blood which,

because it came from a high risk group, you would

not wish to run the risk thereby presented that it

contained the HIV virus. But, Your Honours,

Justice Lockhart is dealing with a situation where

it can be said to a person who is to be given

blood, which otherwise will be thrown out, "Well,

you have only got a 40 to 50 per cent chance of

catching the HIV virus from this blood". And,

Your Honours, even if one goes to the other

evidence - by the way, one wonders why that point

can be relied on strongly by counsel for the

Society to negate negligence because, in our

submission, in relation to any individual person,

the chances might only be 40 to 50 percent that you
are going to give them the HIV virus, but if you

give that untested blood which does contain

detectable, but undiscarded blood which is positive

to Hepatitis B anti-bodies, if you give enough

people those bloods you will statistically, as a

matter of probability analysis, end up with an

increased population that certainly has the HIV

virus.

Your Honours, it is a bit like the question of

whether persons are permitted to fire off

303 rifles at the MCG on grand final day. Most

people will not be hit, but it is an unacceptable

risk to expose that small percentage of the

population who might get hit to that particular

risk. There is a certainty someone will be hit,

but you cannot say in advance who is going to get

it and, in our submission, the probability

analysis, in relation to the risks, miscarried in

relation to the analysis by the Full Federal Court.

Your Honours, the importance of hepatitis B

testing is that it is well known, and

Your Honours - - -

DEANE J:  Mr Gross, where does what is said there about 40

to 50 per cent carry through into the

decision - - -

MR GROSS:  By Justice Lockhart?

Red Cross 25 4/6/92

DEANE J: Yes. I mean, there all he is setting out is two

things: what was said and what was relied on, but

does it appear how it carried into his decision?

MR GROSS:  Yes, Your Honours, it does. Your Honours,

Justice Lochhart gave a number of reasons at 217

point 6 and following, as to the reasons that he is giving. There is a succession of reasons, but then

Your Honours come down to:

Arguments against anti-HBc testing were many -

and that is at page 217 point 8 -

but essentially they were as follows.	The
degree of correlation between anti-HBc

positivity and HIV positivity was insufficient

to justify the tests (not more than fifty

percent).

And then other reasons are given.

Your Honours, another reason - well if I can

just summarize the reasons of Justice Lockhart:

apart from the fact that it was controversial as to

the desirability of the test and no other State had introduced it and that there had been no AIDS case,

which is blood transfusion related, which had emerged till July 1984, although everyone was

operating on the basis of a major risk that was

going to happen sooner or later, His Honour appears

to rely on the following factors. It was not until

1983 that the suspicions as to the link between

blood transfusions and AIDS were confirmed - in

other words, it was a newly discovered problem -

that, in any event, the Society took other steps by

way of notices to warn at high-risk donors giving

blood. So, in other words, they were taking some

other step, but the evidence clearly indicated that

the notices had a lot of draw backs and

deficiencies so that you would not discourage your

entire high-risk population from giving blood, just

by screening the donor, giving him forms and

notices.

His Honour then said you cannot rely upon

subsequent received wisdom - that is the hind-sight

argument, but in our submission, nothing happened

after July 1984 which created any subsequently

acquired knowledge that was not there as a matter

of reasonable foresight long before. So that,

Your Honours, in fact, all of the judges seem to have quoted Malony v Commissioner for Railways and

the need to avoid hindsight in looking at

foresight, but Your Honours, there was no single

fact which emerged afterwards, which would have

provided the extra insights that were involved.

Red Cross 26 4/6/92

All of the relevant ingredients were in place at the stage when the administrative decision was

made.

So that, ultimately His Honour

Justice Lockhart quotes, and indeed, paraphrases,

the arguments without, in our submission,

sufficiently dispatching these arguments, and

Your Honours will see the summary at page 217

point 8 through to 218 point 5. Although

His Honour is summarizing the arguments, His Honour

is not, as Justice Wilcox was doing, going through

those arguments and pointing out that, effectively,
those arguments were not arguments which a

reasonable scientist or blood bank administrator would find as being operative for the purpose of

making a responsible decision. And, Your Honours,

that, in our submission, is why Justice Wilcox can

certainly find negligence, but when the Full Bench

looks at all these reasons, they drew back from, as

it were, the scientific debate and, although

following F v Rand rejecting the Bolam test and

saying it is for courts to decide, and you cannot

delegate that to the scientists, the Full Bench

said, "But we have to be very slow to intrude in an

area where there is controversy between eminent

experts.

Yet, Your Honours, the decision to be made was

ultimately a decision of administration. It was

not a decision involving being at the cutting-edge

of medical and scientific knowledge as

Justice Sheppard seems to have suggested in one

passage in his judgment, at page 236. It was a

simple matter involving assessment of readily

understood risks.

Your Honours, can I just take Your Honours

back to what, in our submission, was plainly the

situation: it was accepted that there was a

foreseeable risk of HIV infection from transfusion

to the applicant - and I can give Your Honours the	references if Your Honours wish. There was a fear
expressed as early as 1982 that quite calamitous
and tragic consequences might arise from the
transfusion of blood which is capable of causing
AIDS. Justice Sheppard, and I think, in effect,
the other judges, accepted that there was a high
duty because of the magnitude of the risk and the
magnitude of the consequences. Justice Sheppard
accepted that this necessitated the greatest care
by the blood banks.

Your Honours, at pages 225 and 226,

Justice Sheppard says the blood banks were conscious of the need to ensure, as far as

possible, that patients did not receive

Red Cross 27 4/6/92

contaminated blood. Your Honours, "as far as

possible" means that even if you cannot prevent all

of the bad blood getting through, you, as a

reasonable blood bank administrator, do what you

can to reduce the incidence in terms of the numbers

of persons who are thus affected.

Your Honours, the steps which were to be taken

to prevent this foreseeable risk involved a simple

test where cost, in terms of money cost, was not at

issue. Everyone accepted it was a very, very cheap

test. Your Honours, the technology was available.

The Society, having waited until the first case

presented itself in Australia yet knowing that one

was at risk at coming, decided at that point to

introduce surrogate testing and, Your Honours, when

they did there was no difficulty about doing so,

and when they proceeded to do so there was no

impact on the blood supply at all.

So, Your Honours, the reasons for refusing to

introduce anti-HBc testing were reasons which
depended upon the administrators following the

majority thinking in the blood bank industry in the

United States and, secondly, responding in

accordance with the inertia of government

committees and bodies in recommending surrogate

testing.

Your Honours, the position in the United

States is now, in our submission, being reviewed by

the courts and for Your Honours' assistance we have

provided a copy of the Colorado Supreme Court

decision of United Blood Services v Quintana.	we
do not have the original judgment, Your Honours,
but we do have the extract from a number of

secondary publications. If Your Honours would turn

.to that. It is behind McLean v Tedman,

Your Honours.

Your Honours, the point that was emphasized in

that case - and I will not read it at length,

Your Honours - was concerned with the same problem

of failure to provide feasible means of preventing
transmission of AIDS and it included the failure to

employ surrogate testing of donated blood.

The point raised is whether or not the

national standard itself was unreasonably deficient

and, in our submission, it follows from F v Rand

the rejection of the Bolam test that an entire

industry can itself be negligent and, indeed, even

though the majority of industry thinking which, of

course, is often tardy to develop, and to produce

new initiatives can have an inertia of its own so

that it takes a considerable time before consensus

arrives.

Red Cross 28 4/6/92

In our submission, although there was a

majority of blood bank administrators against

surrogate testing, nevertheless the reasons for

which they were refraining from introducing the

testing were not in accordance with the legal

standard of care.

Your Honours, we would submit that this case

does raise the issue of what is the duty of courts
applying the reasoning of F v Ras distinct from

the Bolam test. In our submission, what happened

in the present case was that the Federal Court

adopted, as it were, the terminology and the

doctrine espoused in F v R which involved the

rejection of the Bolam test. But by saying, with

so many persons in disagreement, and in saying that

the majority of thinking had not yet reached a

position in favour of surrogate testing, and by

saying that the court, in such circumstances, must
be slow to reach a contrary conclusion and find
negligence, the court, in effect, delegated back to

the medical profession or, rather, to the blood

bank industry the task of assessing what was

required when, in fact, that is the court's role in

cases of this kind.

Your Honours, there are related matters in

relation to the delay in implementing the tests

once a decision was taken. Can I very briefly put

what our case is on that, Your Honours? The

decision was made to introduce the tests on 31 July

1984 when Dr Archer returned from Munich. On

10 September kits were ordered but, Your Honours,

only 3000 kits arrived at a stage when they were

taking 5000 donations per week which basically

meant that there was an inadequate number of test

kits to deal with the blood donations that were

still coming through, notwithstanding the fact that

the committee in August 1984 had asked for funding
so that tests could be administered to all blood

donors for the next six months.

The personnel who were directed to carry out

the -testing were the new officers whose positions

were advertised for and who were appointed and who

progressively, on 2, 3 and 8 October, that is over

two months after the decision was made, whose

duties only commenced on 2, 3 and 8 October, so

that regular testing started by 5 October, and it

was not until approximately a month later, as I

recall it, that they were engaging in full testing,

that is, with a workforce that could handle it and

with a sufficient number of kits, because by the

following month they were getting the 20,000 per

month rather than just the initial batch of 3000.

Red Cross 29 4/6/92

In our submission, during this transitional

period, the respondents, that is the first and

second respondent, were failing to meet the

standard which the law required because they were

applying too little with too few people and too

late. But, Your Honours, I appreciate that does

not itself warrant being looked at in terms of

special leave. But, Your Honours, that is an

argument which we would seek to put, were special

leave to be granted. That completes my

submissions, Your Honours.

BRENNAN J: The Court will adjourn briefly to consider what

course it should take.

AT 5.30 PM SHORT ADJOURNMENT

UPON RESUMING AT 5.41 PM:

BRENNAN J:  We need not trouble you, Mr Gillies, nor you,

Mr Heyden.

The applicant challenges the findings of the

trial judge and of a unanimous Full Court that

there was no negligence on the part of the Red

Cross Society in providing the blood which was

transfused into the appellant and occasioned his
tragic infection with the HIV virus. However,

notwithstanding the submissions of Mr Gross, we are

not persuaded that the differences between

their Honours give rise to any question of

principle appropriate to attract a grant of special

leave to appeal to this Court.

In those circumstances, we do not think that

the Court would be justified in granting special

leave so that the members of this Court might

embark upon a further review of the evidence for

the purpose of considering whether their views

differ from and should be substituted for the

concurrent conclusion of the courts below.

The applicant's reliance on section 71 of the

Trade Practices Act as against the Central Sydney
Area Health Service lacks the necessary findings of

fact which would attract the operation of the section and produce for decision the specific

question which the applicant wishes to raise on
appeal, namely whether the character of a contract
for the supply of goods is to be ascertained by

reference to substantially the same test as that

Red Cross 30 4/6/92

which is applied to determine the character of a contract for the sale of goods under the Sale of

Goods Act.

In the absence of those findings, the case

does not provide a suitable vehicle for determining

that question. Accordingly, special leave will be

refused.

AT 5.43 PM THE MATTER WAS ADJOURNED SINE DIE

Red Cross 31 4/6/92