Health Services For Men Pty Ltd v D'Souza - [2000] NSWCA 56

NEW SOUTH WALES COURT OF APPEAL

CITATION: HEALTH SERVICES FOR MEN PTY LTD & ORS v D'SOUZA & ORS [2000] NSWCA 56

FILE NUMBER(S):
40932/99

HEARING DATE(S): 18 February 2000

JUDGMENT DATE: 22/03/2000

PARTIES:
Health Services for Men Pty Limited - Appellant
Oscar D'Souza, Paul Condoleon, Mirwais Wadan - Respondents

JUDGMENT OF: Mason P Priestley JA Sheller JA

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): 3563/99

LOWER COURT JUDICIAL OFFICER: Bryson J

COUNSEL:
M L Einfeld QC/JW Stevenson - Appellant
M Cashion SC/T M Thawley - Respsondents

SOLICITORS:
Turtons Lawyers - Appellant
D G F Morgan & Associates - Respondents

CATCHWORDS:
INTELLECTUAL PROPERTY - Property in medical records as between doctors and owners of medical clinics - Intention of parties
CONTRACTS - Relationship between doctors and owners of medical clinics - Property in medical records
EQUITY - Equitable remedies - Grant of injunction - Considerations upon which court exercises discretion - ND

LEGISLATION CITED:
Medical Practice Act 1992
Ambulance Services Act 1990
Poisons and Therapeeutic Goods Act 1966
Suitors Fund Act 1951

DECISION:
1. Appeal allowed
2. Set aside the declaration, directions and orders made by Bryson J on 30 November 1999
3. In lieu thereof
(a) Declare that the plaintiffs are entitled to retain as against the defendants the documents identified in the patient files as
(i) examination sheets
(ii) implied consent forms
(iii) pathology reports
(iv) the manilla folders
(v) the documents entitled "must be completed by the patient
(vi) the slips recording the patient name, patient address, date of attendance and/material supplied (the day sheets)
(b) Order that the defendants within 7 days of this order deliver up to the plaintiffs any of the documents described in (a) retained by them or any of them and taken from the appellants’ premises or possession
(c) The defendants to pay the plaintiffs’ costs of the proceedings before Bryson J
4. The appellants have liberty to apply to the Equity Division for any further relief in the proceedings
5. The respondents to pay the appellants’ costs of this appeal but to have a certificate under the Suitors Fund Act 1951 if so entitled.

JUDGMENT:

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40932/99
ED 3563/99
MASON P
PRIESTLEY JA
SHELLER JA

HEALTH SERVICES FOR MEN PTY LIMITED & ORS v D’SOUZA & ORS

The respondent doctors, who formerly carried on medical practice in clinics owned and operated by the appellants, claimed ownership to examination sheets recorded by the respondents while they worked at the clinics. Apart from an agreement in relation to fees, there was no written agreement between the appellants and respondents.

Bryson J at first instance made orders declaring that the property in such of the examination sheets, consent forms and pathology reports as related to patients first seen by one of the respondents belonged to that respondent. In his Honour’s view, patients needing medical treatment consulted the respondents for their advice. Patients were not interested in consulting persons who were not doctors. The appellants’ business was to provide services to the respondents to support their medical practice and to enhance their opportunity to receive and treat patients in numbers. The appellants appealed from this decision.

Held: (by Sheller JA, Mason P and Priestley JA agreeing)

The determination of property in the examination notes depended upon the nature of services the appellants offered to the patients and the part the respondents played in providing those services.
Contrary to the trial Judge’s view, the relationship between each respondent and the appellants was a contractual one whereby the respondent agreed to assist the appellants to provide the diagnostic and treatment service that the appellants offered.
There was no basis upon which it could be inferred, or implied as a matter of contract, that the parties intended that the examination sheets became the property of the respondents. Patients were brought to the clinics with the intention that they be diagnosed and treated using the facilities, including the doctors, and materials provided by the appellants; ie the ultimate intention was that the appellants provided treatment for the patients. Circumstances pertinent to this finding were:-

Men suffering from sexual dysfunction were attracted to the clinics by the appellants’ advertisements. The advertisements suggested that patients were invited to look to the clinics and not to any particular doctors to provide treatment. The emphasis was on what the appellants could provide. If these patients simply wished to consult a doctor, they would have done so;
Patients attended the clinics at the appellants’ invitation. The appellants’ telephone operators were instructed to ask a series of questions designed to ensure that the prospective patient’s problem was amenable to treatment by services the appellants offered;
Patients attending at a particular clinic saw the doctor rostered there at the relevant time. Typically, a patient was seen by a number of doctors over a period of time.
The material included in the disputed documents was written in by the first doctor who consulted the patient. This material was essential to that doctor’s decision about the appropriate treatment and prescription. However, it was also essential to the appellants in continuing the treatment and to any other doctor retained by them to further examine the patient. Such material and the documents in which it was contained were therefore the property of the appellants. The pathology reports were also the property of the appellants for similar reasons.

It is generally undesirable to frame an injunction that does little more than repeat the injuncted party’s general legal obligations or so to frame an injunction that the question whether a breach has occurred is likely to be very debatable until settled by an order made in contempt proceedings.

Schindler Lifts Australia Pty Limited v Debelak (1989) 89 ALR 275, applied.

Accordingly, the declaration sought by the appellants that the patient contact details were information confidential to the appellants and to the patients was not made. Similarly, no order was made to restrain the respondents from approaching the clinics’ patients.

Ormonoid Roofing and Asphalts Limited v Bitumenoids Limited (1930) 31 SR (NSW) 347, referred to.

Held: (by Mason P, Priestley JA agreeing)

An integral part of the appellants’ organisation was the system for creating, maintaining, storing and accessing patient records. Ready and continuing access to the patient files was vital in the interests of the patients, doctors and administrative staff. The common intention was that ownership of the files belonged to the appellants who were in control of the whole organisation.
Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542, referred to.
Esso Australia Resources Ltd v Commissioner of Taxation (1999) 74 ALJR 339, referred to.

ORDERS

1. Appeal allowed;
2.Set aside the declaration, directions and orders made by Bryson J on 30 November 1999;

3. In lieu thereof:
(a)Declare that the plaintiffs are entitled to retain as against the defendants the documents identified in the patient files as

(i) examination sheets;

(ii) implied consent forms;

(iii) pathology reports;

(iv) the manilla folders;

(v)the documents entitled “must be completed by the patient;

(vi)the slips recording the patient name, patient address, date of attendance and/material supplied (the day sheets).

(b)Order that the defendants within 7 days of this order deliver up to the plaintiffs any of the documents described in (a) retained by them or any of them and taken from the appellants’ premises or possession.

(c)The defendants to pay the plaintiffs’ costs of the proceedings before Bryson J.

4.The appellants have liberty to apply to the Equity Division for any further relief in the proceedings.

5. The respondents to pay the appellants’ costs of this appeal but to have a certificate under the Suitors Fund Act 1951 if so entitled.

******

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40932/99
ED 3563/99
MASON P
PRIESTLEY JA
SHELLER JA

Wednesday, 22 March 2000

HEALTH SERVICES FOR MEN PTY LIMITED & ORS v D’SOUZA & ORS

JUDGMENT

MASON P: I have had the benefit of reading the reasons of Sheller JA. I agree with them and with the orders proposed.
When the respondents communicated their intentions to sever links with Health Services for Men they used the language of withdrawing or terminating their services. This did not prove that they had been employees, but it reflected the relationship between the medical practitioners and the organisation of which they were an integral part.
Another integral part was the system for creating, maintaining, storing and accessing patient records. As Sheller JA demonstrates, these records included manilla files in which pro forma documents relating to the patient were kept. Ready and continuing access to these files was vital in the interests of patient, doctors and administrative staff. The common intention evidenced by common practice was that ownership of the files would commence with and remain with those who were in control of the whole organisation, ie the appellants. Any other system would be a recipe for chaos or destructive self interest.
A large enterprise such as this is not unlike a hospital. A proper record-keeping system is vital. In Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542 Hope JA said (at 549):
Any significant organisation in our society must depend for its efficient carrying on upon proper records made by persons who have no interest other than to record as accurately as possible matters relating to the business with which they are concerned. In the every day carrying on of the activities of the business, people would look to, and depend upon, those records, and use them on the basis that they are most probably accurate. … If, for some reason, a new honorary had to take over the case, it is to the records that he would go to find out what had happened or what he had to do. …When what is recorded is the activity of a business in relation to a particular person amongst thousands of persons, the records are likely to be a far more reliable source of truth than memory. They are often the only source of truth.
A similar point was made in a different context in Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67, 74 ALJR 339 where Callinan J said (at [162]):
The employees of natural persons, partners, officials in bureaucracies and employees and directors of corporations may, and often must, out of practical necessity communicate internally by written report. A corporation “cannot … think or write or act except by certain machinery which is, so to speak, extraneous of itself”.
The respondents’ invocation of their patients’ rights to care and confidentiality was a hollow invocation of a jus tertii. The appellants have corresponding duties of care and confidentiality, whether or not particular doctors remain with their organisation. In any event, it is difficult to conceive how the standard of care which the respondents would give to patients that followed them into their new practices would be affected by non-access to the material recorded in the appellants’ files. These concerns do not appear to have been the trigger for the unilateral, stealthy removal of patient files en masse. And they provide no justification for a passing of property in records from the appellants to the respondents.
Equally hollow is the submission that denial of the property right claimed by the respondents constitutes a form of conscription to medical servitude incompatible with their independent judgment as medical practitioners. The submission carries echoes of long-exploded arguments (cf Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561). And it carries no conviction in the present context. A doctor employed by a school, a shipping company, a hospital or an insurance company would be surprised by the suggestion, as would a locum tenens in a private practice. Each would see no incompatibility between obligations as a medical practitioner and the duty to act in good faith towards and to recognise the property rights of an organisation such as that run by the appellants.
The passages in Breen v Williams (1996) 186 CLR 71 recognising that a professional person may have property in certain documents prepared in the performance of professional duties address the position as between the professional and the lay patient or client. They have nothing to say about ownership as between groups of professionals (eg partners inter se or an employer and employee) or as between a corporation employing or engaging the services of professionals.
Once the appellants’ property in the records is established there could be no basis for requiring the appellants to make copies of those records available to the persons who have gone out on their own, apparently with a view to competing with the appellants’ business.
In my view this case is resolved by the application of property principles to the facts. At various stages each side argued in favour of an implied contractual term. Suffice it to say that the implied term invoked by the respondents would amount to a term permitting the taking of property. To say the least, such a term lacks obviousness.
PRIESTLEY JA: I agree with Mason P and Sheller JA.
SHELLER JA:
INTRODUCTION
Under a contract with the appellants who were owners of clinics for the medical treatment of male patients, the respondent doctors examined patients in the clinics and made examination notes on a form provided by the appellants. This appeal concerns the property, if any, the respondents had in their examination notes. The outcome depends upon the nature of the services the appellants offered to patients and the part the doctors played in providing those services.
Until 9 August 1999 the respondent doctors, Dr Oscar D’Souza, Dr Paul Condoleon and Dr Mirwais Wadan, carried on medical practice in clinics owned and operated by the appellants, Health Services for Men Pty Limited, Asire Pty Limited, Medical Admin Services Pty Limited and Medical Integrated Services Pty Limited. The appellants began to operate the clinics in March 1998. The clinics carried out treatment of sexual dysfunction in male patients and were conducted under the name “Health Services for Men”. The appellants were successors in business to a company called Australian Men’s Health Pty Limited which had bought the clinics from On Clinic Pty Limited in 1996.
The respondent doctors were not the only medical practitioners to work in the clinics. Until 9 August 1999, ten different medical practitioners worked in the appellants’ twenty-one clinics which were widely distributed around Australia.
Each of the three respondent doctors had made a written agreement with the first appellant. The agreement was in a standard form headed “Short Form Agreement”. By it, each of the doctors authorised the first appellant to deposit all his consultation, consumables and medication receipts into the HSM Doctors Fees Holding Account (the trust account), and to manage on his behalf these funds. Each doctor also consented to payments being made out of the trust account directly to various service companies. There were no other written arrangements between the doctors and the appellants.
The clinics were conducted from premises leased and staffed by one or other of the appellants, which decided when and where to establish or whether to close or to move a clinic and made all arrangements to do so. Patients at the clinics were given a variety of treatments for sexual dysfunction. In many cases, erectile dysfunction was treated by self-injection therapy. A patient using self-injection therapy needed and received medical advice relating to the suitability of the therapy and the quantity of medication required. The patient also received medical supplies such as an auto-injector, medication and a self-injection video. The appellants advertised extensively, particularly in metropolitan Sunday newspapers. They were said to spend approximately $30,000 per week on advertising. They solicited business from the public by way of a 1300 telephone number which was shown prominently in the advertisements. Business was largely generated by the newspaper advertisements, but there were also repeat consultations from established patients, and consultations initiated when patients established contact with particular doctors in other ways.
The appellants’ staff prepared rosters setting out which clinic each doctor was to attend and the times of attendance. Sometimes the roster set out arrangements for a particular doctor to travel interstate or otherwise to attend clinics requiring lengthy journeys. Roster arrangements were made co-operatively between the appellants’ staff and particular doctors, and doctors were not required to attend the clinics except in accordance with their own wishes and convenience; they were not under discipline. On the other hand, they had an interest in contributing to the successful operation of the clinics.
Dr D’Souza usually attended at clinics in and near Melbourne, Dr Condoleon at clinics in Melbourne and Southport and Dr Wadan at a clinic conducted at one time at Edgecliff and later at Bondi Junction. Each of them had at times attended elsewhere, though not while the appellants were operating the clinics.
In New South Wales, fees for the doctors’ attendance were bulk-billed. A claim was made to Medicare in the name of the doctor with the patient’s authority for a payment to the doctor. The Short Form Agreement recognised that the fees were the medical practitioner’s fees. When received, fees were paid into the trust account as authorised by the Short Form Agreement. In other States, the appellants directly charged the patients for consultation and the fees received were paid to the trust account.
Patients paid the appellants directly for prescribed medication and equipment. Those payments were also paid into the trust account. Arrangements between the appellants and each doctor established the proportion of the money received into the trust account to be paid out to the appellants and to the medical practitioners. Proportions varied and were related to the number of consultations which the doctor conducted. Typically, about 78 per cent went to the first appellant and 22 per cent to the medical practitioners. Fees for consultations gave rise to about 15 per cent of the appellants’ total income. The sale of medication and equipment gave rise to about 85 per cent.
In the clinics, there were medical records for about 300,000 patients. Many of these were related to patients who had not attended for some years and not while the appellants conducted them. Mr Meehan, a non-executive officer of the first appellant who made an affidavit on the appellants’ behalf, estimated that approximately 100,000 files were active.
Typically a file consisted of:
(a)a manilla folder bearing the patient’s name;
(b)slips recording particulars of the dates of attendance and materials supplied which were stapled to the folder;
(c)a two page examination sheet on a standard form containing an array of social and medical information which was completed in handwriting by the medical practitioner. When completed, the sheets constituted a comprehensive relevant medical history and recorded treatment prescribed and matters observed on examination;
(d)an informed consent form relating to the self-treatment therapy which was a standard form signed by the patient and directed to the medical practitioner;
(e)a sheet headed “must be completed by the Patient” giving personal particulars and stating whether the patient was on any medication.
The file also contained any pathology report about the patient. This was usually directed to the medical practitioner from a consultant pathologist.

On or about 9 August 1999, the respondent Dr D’Souza arranged for the removal, by a courier company which he engaged, of about 5,500 patient files from the appellants. Dr Condoleon similarly arranged for the removal of 12,350 patient files from the appellants. Within a few days the files so removed were returned to the control of the appellants under interlocutory orders.
PROCEEDINGS
On 25 August 1999 the appellants filed a statement of claim joining the respondent doctors as the first three defendants. The other defendants were Australian Momentum Health Pty Limited, a company formed on 23 June 1999 and associated with the professional work of Dr D’Souza and Dr Condoleon, and OS D’Souza Pty Limited, a company associated with Dr D’Souza’s professional affairs. The appellants sought orders restraining the respondents from soliciting or approaching any patient of any of the clinics and from using confidential information, defined to include patient details and examination results, declarations that the appellants were the owners of the files and entitled to retain them and an order for their delivery up. The respondents filed a defence. The respondent doctors filed a cross-claim claiming, amongst other things, a declaration that the patient files were their property and an order that the appellants deliver up the patient files and any or all copies of them.
The proceedings came on for hearing before Bryson J on 10 September 1999. On 24 September 1999, Bryson J gave a judgment. The last two paragraphs of his Honour’s reasons for judgment were as follows:
“53. Where a patient first consulted one of the defendants that defendant is entitled to have possession of the Examination Sheets Informed Consent forms and pathology reports. Where another doctor later saw the same patient and, as is likely, wrote on the same sheet or perhaps added other sheets, the question whether ownership of papers passed to the other doctor in its turn depends on the intention of the doctor who was first consulted. Ownership would not leave that doctor unless that doctor so intended. If a medical practitioner saw another medical practitioner’s patient in the character of a locum tenens or to meet some situation where the first doctor was not available, or where the patient attended at a place where the first doctor was not in attendance and a fax copy was sent there, it is not probable that it was intended that ownership of the medical records should change. On the other hand if a patient was in some way definitively referred from one doctor to another in the contemplation that the first doctor would no longer see the patient and control of the medical records would pass it might be right to infer that it was intended that ownership would also pass. There is no evidence dealing with particulars of any such cases, the subject is speculative and in any event the first doctor would have a better right to the documents than the plaintiffs.
54. For these reasons I am prepared to make injunctions restraining use of the telephone numbers. I am also prepared to make orders appointing a referee who is to examine all the files in question and allocate the files, or parts of the files, to the person entitled to each sheet in accordance with the views I have expressed. I would hope that the parties could carry out the process by agreement, but the remedy available is a reference under Part 72. Counsel should submit draft minutes of an order and nominate a suitable referee.”
The use of telephone numbers is no longer an issue. On 22 October 1999, after argument on the form of order, his Honour said that his earlier judgment did not deal with part of the issues arising on the cross-claim and continued:
“At para. 14 I said ‘The typical file - Exhibit A - consists of a manilla folder bearing the patient’s name, and slips recording particulars of the dates of attendance and materials supplied are stapled to the folders’. I went on to consider the documents found inside the manilla folder and reached conclusions about the ownership of documents in various classes. I see now that the slips stapled to the manilla folder, which belong to the plaintiffs, bear information which is not to be found or not necessarily to be found in documents which the medical practitioners own. As well as recording dates of attendance and materials supplied, the slips record contact details such as each patient’s personal address and telephone number, and this information is not necessarily and not typically repeated on the examination sheets or elsewhere in the papers which the medical practitioners own. The slips also contain records of the charges made for attendances, and whether the patient is to be charged as a private patient or bulk-billed to Medicare. It is possible that the papers relating to a particular patient which a medical practitioner may be entitled to as owner may not enable the medical practitioner to contact the patient. The need to make contact might well become necessary in some emergency, or on seeing the need to give further advice about the use or suitability of material prescribed.
2. In the cross-claim it was alleged to the effect (see para.16) that information which would include information of the kind recorded on the slips was confidential information of the cross-claimants. In claim 18(ii) the cross-claimants sought an order that the cross-defendants deliver up the files, meaning all the files. I now see that in part claim 18(ii) was founded on protection of confidential information and not only on proprietary interest in papers. Claim 18(iii) claims an order that the cross-defendants provide a copy of any patient file.
3. I have already decided to the effect that the slips, like the manilla folders, are the property of the plaintiffs. However the information recording contact details and other details relating to patients recorded on the slips is information obtained, compiled and recorded by the plaintiffs for the purpose of providing supporting services ancillary to the medical practitioners’ carrying on their medical practices and treating their patients. In the words of the submission of the defendants’ counsel ‘Such information is recorded in order to fulfil the contractual obligations owed by the plaintiffs to provide administrative support for each doctor’s practice. The proper inference to draw is that it was intended that ownership of such information was intended to pass with title to the document upon which the information was recorded.’ These submissions refer to ownership of information; my view is that the information recorded by the plaintiffs on the slips is confidential information of the medical practitioners and their patients, which was recorded by the plaintiffs for the purpose of making effectual their services to the medical practitioners. In my opinion the plaintiffs were not entitled to make any other use of the information, which did not come to them for any other purpose, and the fact that the relationship between the medical practitioners and the plaintiffs has ended does not affect the medical practitioners’ contractual entitlement to ready access to their own confidential information. The medical practitioners’ entitlement to access to their own confidential information is just the same now as it was when they were actively using the plaintiffs’ services, and the fact that the plaintiffs are the owners of the slips of paper has no impact on the medical practitioners’ entitlement to the information.
4. For these reasons I am of the view that the medical practitioners are entitled to have copies of slips relating to their own respective patients.
5. The form of order now being settled should provide for the information to be made available to the medical practitioners, and should create opportunities for search and inspection of files so as to identify the information to which each particular medical practitioner is entitled.”
This direction led to a form of order made on 30 November 1999 the first thirteen paragraphs of which were directed to the examination sheets and consent forms, the pathology reports and “other documents in patient files”. By these orders, the court declared that the property in such of the examination sheets and consent forms in the patient files in the appellants’ possession as related to patients first seen by any one of the three respondent doctors had passed to that doctor, and that that doctor was entitled as against the appellants to possession of pathology reports contained in those patient files.
As I read the orders dealing with the other documents in the patient files it was declared that the appellants were entitled to retain them and were the owners of the manilla folder, the document entitled “must be completed by the Patient” and the day sheets but that the first defendant was entitled to a copy of the slips of paper on which might be recorded the patient’s name, address, date of attendance and/or materials supplied (“the Day Sheets”) in each patient file in the possession of the appellants in respect of patients who were first seen by the first defendant. The other two defendants were, mutatis mutandis, entitled to a copy of the day sheets in the patient file in respect of patients who were first seen by each of them.
There followed directions in relation to files returned by the doctors to the appellants on or about 23 August 1999. The appellants were to do all things necessary to review or cause to be reviewed all patient files in their possession within 14 days from the date of the orders and to provide lists of patients first seen by either one of the first three respondents and deliver to them examination sheets, consent forms and any pathology reports contained in those files. Relevant copies of the “Day Sheets” were to be provided also. Within 28 days the appellants were to do all things necessary to review or cause to be reviewed all patient files in their possession and to provide the lists of patients first seen by the first, second or third respondents and deliver to them examination sheets, consent forms and any pathology reports contained in the files. The respondents were required to deliver up to the first appellant documents in their possession relating to patients who were not first seen by any of them.
In a judgment of 1 December 1999 dealing with costs, Bryson J said that overall, the reasons for judgment upheld the respondents’ view of the relationship between the parties and the orders made were based on their view and not on the appellants’ view. The just disposition of costs would be one in which the doctors recovered most but not all of their costs. His Honour ordered the appellants to pay two-thirds of the costs of the claim and cross-claim of the first, second, fourth and fifth respondents and the whole of the costs of the third respondent of the claim and cross-claim. The third defendant, Dr Wadan had not removed any files and not been shown to have used any telephone numbers formerly used by the appellants. His Honour said that there did not seem to be any kind of case against him for adjudication.
APPEAL
On 3 December 1999 the appellants filed a notice of appeal and on 6 December 1999 a summons for leave to appeal from Bryson J’s “decision”. The appellants’ summary of argument stated that since the direction to file a white book, the respondents had conceded that the amount in issue on the appeal exceeded $100,000 and that leave to appeal was not required.
At the heart of the appeal was the question whether examination sheets written on by the respondent doctors were their property and if so remained their property when they ceased to practise in the clinics on or after 9 August 1999. Bryson J found, and this has not been challenged, that apart from the short form of agreement which threw no direct light on this question, there was no other written agreement between the parties. Breen v Williams (1996) 186 CLR 71 is authority for the proposition that medical practitioners, like other professional people who prepare documents to assist them to perform their professional duties, retain property in the documents and that the patient or lay client, absent some contractual provision, has no property in the documents; see pages 80, 89, 101 and 126.
In the case of a medical practitioner, the right of property in such documents is necessarily conditioned by the doctor’s duty not to disclose voluntarily without the consent of the patient information which the doctor has gained in the doctor’s professional capacity; Hunter v Mann [1974] 1 QB 767 at 772. But these general propositions do not automatically resolve the questions raised by these proceedings.
The appellants conducted their business of offering treatments for erectile dysfunction from clinics one or other of them leased and staffed. A typical press advertisement was as follows:
FOR MEN Only
Whether you’re 18 or 90 years old
if you suffer from IMPOTENCE or
PREMATURE EJACULATION,
and would like to lead a normal
healthy sexually active life,
our qualified Registered Doctors at Health Services for Men
can diagnose and treat your problem from only one visit.
ALL CONSULTATIONS MEDICARE REBATES APPLY
TABLETS ARE NOW AVAILABLE
In some cases oral treatment may not be advisable!
We can offer a number of alternative
medical treatments as required.
Very high success rate with all patients, including
those suffering from diabetes, blood pressure, heart
and psychological problems.
Health Services For Men
Toll Free - 7 Days - There’s a Clinic Near You
1 300 657 676
Such advertisements generated a large part of the clinics’ business. The sample advertisement emphasised that Health Services For Men was inviting men, with a particular problem and a wish to have the problem diagnosed and treated, to contact it using the toll free number. Part of the service Health Services For Men offered was diagnosis and treatment by “our qualified Registered Doctors at Health Services for Men”. The doctors were unidentified.
When a prospective patient called the appellants’ 1300 number the appellants’ operator recorded the prospective patient’s name, address and contact details and entered these details into the appellants’ computer system. The appellants instructed their telephone operators to ask the prospective patient a series of questions about his medical condition and requirements and to utilise a series of “prompts” created by the appellants for this purpose. The “prompts” or questions that the operator was instructed to ask were designed to ensure that the prospective patient’s problem was likely to be one which could be treated by services the appellants offered.
If the response given by the prospective patient to the operator indicated that the appellants’ treatments were appropriate, the operator ascertained the most convenient clinic for the prospective patient and, using their computer system, made an appointment at the clinic and caused a record of that appointment to be made in the computer system at that clinic. Details of the booking were confirmed by facsimile to the clinic prior to the date of appointment.
In the case of a new patient, clinic staff prepared a hard copy file for the patient, using various standard forms prepared by the appellants. This hard copy was made on the form that Bryson J described in his reasons for judgment as the manilla folder bearing the patient’s name and slips recording particulars of the dates of attendance and materials supplied. If the appointment had been made on behalf of an existing patient, details of the appointment were faxed to the clinic and clinic staff arranged for the existing patient file to be taken out and made available to the doctor at the appropriate time.
The prospective patient was given details of the address of the clinic and the time of the appointment. The patient would see the doctor rostered on at the clinic at the relevant time. There was evidence that typically, a patient would, over a period of time, be seen by a number of doctors.
At the initial consultation, a new patient would complete the relevant forms before seeing the rostered doctor. This initial consultation took approximately one hour. The doctor took a medical history from the patient including details of existing medications, previous illnesses and so on. The doctor then made physiological examination of the patient and if appropriate, gave a metered test injection, or a series of metered test injections until such time as the optimum result occurred. The doctor thereby ascertained the dosage required to achieve the ultimate result and recorded that detail in the patient file.
Investigation of the typical file, which was exhibit A at the hearing, shows that the examination sheet was used for the purposes so described. The doctor prescribed the medication for the patient who became designated as a “graduate” patient. After the original prescription of medication, the graduate patient might attend the clinic from time to time if he wished to renew the prescription. In the absence of complications, no further detailed diagnosis or examination was normally undertaken and such “repeat visits” were generally brief and involved little more than the patient signing the documentation necessary to ensure the renewed prescription.
It must be accepted that the stationery used for the examination sheet was the appellants’. The question is whether the property in the stationery was alienated by its transfer to the doctor or by the doctor’s writing notes upon it. The prospective patient was brought to the clinic by the appellants with the intention that the patient be diagnosed and treated using the facilities, including the doctors, and materials provided by the appellants. The treatment was of an on-going nature and might, though it would not necessarily, call for further examination by a doctor. The form of advertisement suggests that the patient was invited to look to Health Services for Men and its clinics and not to a particular doctor or doctors to provide this treatment.
The doctor who received money, at least in New South Wales, as the result of bulk-billing on the patient’s behalf no doubt could be treated as owing both contractual and tortious duties to the patient. Clearly the Health Services for Men also owed such duties to the patient. The patient provided information in confidence both to the doctor during the consultation and to Health Services for Men when first spoken to on the telephone and when dealing with prompts or questions about his problem. The relationship between the doctor and the appellants was contractual. The doctor agreed with the appellants to provide a service at their clinics to persons who attended there on the appellants’ invitation and as a result of the appellants’ advertising to obtain diagnosis and treatment. The appellants determined which members of the public who rang the 1300 number should attend the clinics.
In that context and the circumstances generally, including the ultimate intention that Health Services for Men would provide the treatment for the patient, I can see no basis upon which it could be inferred that the appellants and the doctors intended that the documents, namely the examination sheets provided by the appellants to the doctors for completion, become the property of the doctors. Nor could any such intention be implied as a matter of contract.
In his reasons for judgment of 24 September 1999 Bryson J said:
“15.     In describing the operation of the clinics Mr Meehan spoke in terms which attributed all acts and events to the plaintiffs and treated the conduct of the medical practitioners as if it were conduct on behalf of and in an agency relationship with the plaintiffs. The defendants’ evidence speaks from a different viewpoint in which the medical practitioners conduct their medical practices and see their patients with the benefit of services supplied by the plaintiffs which support their conduct of medical practice. These services include premises, furniture and office equipment, clerical and other staff to attend to arranging rosters and appointments and notifying doctors of these arrangements. In the plaintiffs’ point of view the doctors function as part of the plaintiffs’ organisation and the plaintiff is providing medical services through their agency, and in the defendants’ point of view the doctors are practising medicine and providing professional services, and receiving very full assistance from the plaintiffs in their practical needs as they do so.
16.      There is in my finding nothing in the nature of an employment relationship or employment discipline between the plaintiffs and the medical practitioners. Support given by the plaintiffs to the doctors in their work is very full indeed, even extending to paying their travelling and other expenses of attending at clinics, it may be interstate, to fulfil the rosters. There is no indication in evidence that doctors are ever constrained by the plaintiffs’ direction to do anything otherwise than exactly as the doctors choose to act. There is no indication of any source for a right to control them in any such way.
17.      My interpretation of what takes place accords with the view put forward by the defendants. The essence of what is taking place is that patients who need medical treatment are consulting medical practitioners and obtaining the opinion and advice of the medical practitioners; the patients are not interested in consulting persons who are not medical practitioners but conduct clinics through the agency of medical practitioners who form part of their organisation. It would be unlawful for persons who are not medical practitioners to give medical advice and prescribe treatment. The medical practitioners do not receive and prescribe to a standardised chain of patients with standardised conditions; patients and medical practice are just not like that, and the need for individual personal judgment on the medical practitioner’s professional responsibility presents itself anew for each patient. It would not be possible for consultations to be bulk-billed to Medicare unless they were consultations with medical practitioners for which medical practitioners were entitled to charge the patients. In my interpretation it is the plaintiffs’ business to provide services to medical practitioners to support their practising medicine and in so doing to enhance, I would think greatly, the medical practitioners’ opportunity to receive and treat patients in numbers.”

With due respect I disagree with his Honour’s conclusion in para 17. In my opinion, it is clear that male members of the public, who suffer from certain conditions and would like to lead a normal healthy sexually active life, are attracted by the appellants’ advertisements to approach the appellants for diagnosis and, importantly, treatment. The emphasis is on what the appellants can provide. If those persons wished simply to consult a doctor for advice and treatment they would do so. With due respect I do not think it was open to infer that the patients were “not interested in consulting persons who were not medical practitioners but conduct clinics.” Moreover, it is not clear on what basis it is said that it would be “unlawful for persons who are not medical practitioners to give medical advice and prescribe treatment.” This depends upon the nature of the advice and the type of treatment; compare, for example, the position of pharmacists, ambulance officers and paramedics and see generally Part 7 of the Medical Practice Act 1992 (in particular ss108, 109 and 111), the Ambulance Services Act 1990 (s12) and the Poisons and Therapeutic Goods Act 1966 (ss24 and 28A).
I accept that it was appropriate that the appellants did provide the services of medical practitioners in their clinics thereby offering the patients the benefit of the doctors’ individual personal judgment given in accordance with the professional responsibility the doctor owed to the patient. However, again with the greatest respect I do not think the circumstances allow the conclusion that the appellants’ business was to provide services to medical practitioners to support their medical practice and to enhance their opportunity to receive and treat patients in numbers. In truth, I think the facts and circumstances point unerringly to the conclusion that the doctors were under contract to the appellants to assist the appellants to provide the diagnostic and treatment service that the appellants offered by advertisement to men suffering from particular conditions.
This being so, I do not accept that the respondent doctors acquired any property in any of the documents the subject of this litigation. With the exception of the pathology reports, all the documents completed were on forms provided by the appellants in conducting their advertised business. The material included on the documents and written by the first doctor who consulted the patient was at that time essential to that doctor’s decision about the appropriate treatment and prescription. But it was also essential to the appellants in continuing the treatment after that initial consultation and to any doctor retained by them, be it the first doctor or any other doctor, to examine the patient. The force of this observation is supported by an example given during the course of argument. Assume a new patient consults Dr A who attends at the clinic under contract with the appellants. The day after the consultation and the completion by Dr A of the examination sheet for the patient, Dr A for any reason decides no longer to practise at the clinics or the appellants no longer wish to retain that doctor’s services. According to the respondents’ argument, that doctor is entitled as a matter of property to remove the completed examination sheet contrary to the business interests of the appellants (which led to Dr A’s retainer by the appellants and through their advertisements to Dr A’s examination of that patient) and contrary to the interests of the patient in his continued treatment at the clinic after Dr A’s departure. Such a result could never have been sensibly contemplated by the appellants or by the doctors concerned.
The pathology report falls into a different category. At the time it was prepared by the pathologist, the document was the property of the pathologist. It may be that when such a document was sent to and received by a practitioner in private practice, who had requested the report, it became the property of that practitioner. Even if that were so in the case postulated, in the present case the circumstances for like reason point to the pathology report being the property of the clinics and not the property of the treating doctor who worked in the clinic.
CONCLUSION
In my opinion, the appeal should be allowed. The orders I propose are intended to acknowledge that the appellants are entitled to retain the documents in the patient files as against the respondents who have no property in the files. In their notice of appeal the appellants ask for a declaration that the information recorded in the Day Sheets and in particular the patient contact details, is information confidential to the appellants and to the patients of the clinics and an order restraining the respondents from soliciting or approaching any patient of any of the clinics.
In argument, the appellants submitted that the patient contact details should be treated in the same way as customer lists; see Ormonoid Roofing and Asphalts Limited v Bitumenoids Limited (1930) 31 SR (NSW) 347. While an employee may be restrained from removing, retaining and making use of customer lists obtained in the course of employment, as Harvey CJ in Eq remarked at 354, where an employee in the course of his employment and for the purposes of his employment has obtained particular information with regard to his employer’s business, such as knowledge of processes, details of management or particulars of customers which have become stored up in his mind as a necessary consequence of the way in which his master employed him, there is no justification in the absence of an express contract, for preventing him making use of that knowledge.
The appellants are entitled to retain or, if necessary, recover the patient files. But I do not think that this Court should at this stage grant any further relief. As Pincus J remarked in Schindler Lifts Australia Pty Limited v Debelak (1989) 89 ALR 275 at 318 it is in general undesirable to frame an injunction that does little more than repeat the injuncted party’s general legal obligations or so to frame an injunction that the question whether a breach has occurred is likely to be very debatable until settled by an order made in contempt proceedings. I think the appellants should have leave, if so advised, to apply to the Equity Division for any further relief.
I propose the following orders:
1.        Appeal allowed;
2.Set aside the declaration, directions and orders made by Bryson J on 30 November 1999;
3.        In lieu thereof:
(a)Declare that the plaintiffs are entitled to retain as against the defendants the documents identified in the patient files as
(i)        examination sheets;
(ii)       implied consent forms;
(iii)      pathology reports;
(iv)      the manilla folders;
(v)the documents entitled “must be completed by the patient;
(vi)the slips recording the patient name, patient address, date of attendance and/material supplied (the day sheets).
(b)Order that the defendants within 7 days of this order deliver up to the plaintiffs any of the documents described in (a) retained by them or any of them and taken from the appellants’ premises or possession.
(c)The defendants to pay the plaintiffs’ costs of the proceedings before Bryson J.
4.The appellants have liberty to apply to the Equity Division for any further relief in the proceedings.
5. The respondents to pay the appellants’ costs of this appeal but to have a certificate under the Suitors Fund Act 1951 if so entitled.
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LAST UPDATED: 24/03/2000