Idameneo (No 123) Pty Ltd v Ashraf

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2013 05863

IDAMENEO (No 123) PTY LTD (ACN 002 968 185)	Plaintiff
v
SOHAIL ASHRAF & ANOTHER	Defendants

---

JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	15, 17, 18, 19 (for mention), 22, 23 and 25 JUNE 2015
FURTHER WRITTEN SUBMISSIONS:	29 and 30 JUNE 2015
DATE OF JUDGMENT:	3 JULY 2015
CASE MAY BE CITED AS:	IDAMENEO (No 123) PTY LTD v ASHRAF
MEDIUM NEUTRAL CITATION:	[2015] VSC 317

---

CONTRACT — Construction — Performance — Breach — Frustration — Purported termination — Liability determined — Issues concerning damages deferred – Compulsory mediation ordered - Civil Procedure Act 2010 (Vic), ss 7(2)(c)(ii), 66(1); Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 50.07(1).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Wallis	Herbert Smith Freehills
For the First Defendant	In person
For the Second Defendant	Dr S Ashraf (by leave)

TABLE OF CONTENTS

A.. Introduction................................................................................................................................... 1

B.. Details of Narregate..................................................................................................................... 2

C.. Agreements entered into............................................................................................................. 3

D.. Idameneo’s claims...................................................................................................................... 11

E... The defence................................................................................................................................. 12

F... Position adopted by the parties during closing submissions............................................ 14

G.. Events from late June 2012 to mid November 2012.............................................................. 15

H.. Events from late November 2012 until May 2013................................................................. 22

I.... Events from late May 2013 to mid June 2013......................................................................... 32

J.... Further steps taken by Idameneo, and responses by the Defendants, concerning the ongoing failure to perform.................................................................................................................................... 33

K.. Breaches of contract................................................................................................................... 37

K.1 Minimum Hours Requirement.......................................................................................... 38
K.2 Maximum Absence Requirement...................................................................................... 40
K.3 Other breaches...................................................................................................................... 41

L... Estoppel defences....................................................................................................................... 42

M. Fundamental change in Ashraf’s situation and impossibility of performance.............. 44

N.. Consequences of frustration.................................................................................................... 46

O.. Further conduct of the proceeding.......................................................................................... 47

HIS HONOUR:

A. Introduction

The plaintiff, Idameneo (No 123) Pty Ltd (“Idameneo”), is in the business of operating medical centres. Idameneo has an established practice of acquiring medical practices and recruiting medical practitioners to work as independent contractors, through an incorporated medical practice.

Broadly speaking, the business model encapsulated in the agreements the subject of this proceeding is that Idameneo agrees to provide the premises, together with administrative services, clerical staff and such other facilities that are necessary for an incorporated medical practice to be conducted by the medical practitioner, and the medical practitioner agrees to provide medical services from those premises. Idameneo has numerous premises throughout Australia from which medical services are provided under these arrangements.

The first defendant, Sohail Ashraf (“Ashraf”) was 1 such medical practitioner. Before June 2012, Ashraf conducted his medical practice in Greensborough. The second defendant, Sohail Ashraf Pty Ltd (“Ashraf’s Company”), was the vehicle by which Ashraf did so. Ashraf is the sole director and shareholder of Ashraf’s Company.

Ashraf and Ashraf’s Company (together “the Defendants”) initially had legal representation in this proceeding. Their solicitors were granted leave to cease to act a month before trial. With the consent of Idameneo, Ashraf was granted leave to represent Ashraf’s Company.

In May 2012, negotiations commenced between Idameneo and Ashraf for the sale of Ashraf’s Company’s medical practice and for the procurement of Ashraf’s services through Ashraf’s Company.

In June 2012, agreement was reached. The agreement was reduced to writing and 3 contracts were executed. As a result, Ashraf’s Company agreed to procure the services of Ashraf to provide work for Idameneo at its medical centre, located in Narre Warren and known as “the Narregate Medical Centre” (“Narregate”).

Not long after Ashraf commenced providing these services, Idameneo became dissatisfied. Subsequently, Idameneo complained about the level of service provided by Ashraf, then later alleged breaches of contract, and ultimately purported to terminate the contractual relationship between the parties.

Essentially, the dispute between the parties is whether or not Ashraf’s Company, together with Ashraf, were in breach of contract, whether such alleged breach entitled Idameneo to terminate at the time that it purported to do so, and whether Idameneo is consequently entitled to compensation. Although the Defendants made allegations about the wrongful conduct of Idameneo, no claim was made by the Defendants with respect to any alleged wrongful conduct.[1]
[1]At one stage, the court was informed that the Defendants intended to make a counterclaim. No such counterclaim was ever made. The need to make a counterclaim if either of the Defendants intended to claim damages was brought to Ashraf’s attention on numerous occasions during the course of the trial.

For the reasons that follow, the Defendants were in breach of their contractual obligations while the contracts remained on foot in a number of respects. However, at a time yet to be determined, the contracts were frustrated. The claim for damages by Idameneo is confined to any accrued rights Idameneo had up until the time of termination by reason of frustration.

B. Details of Narregate

In early 2012, there were 10 doctors working at Narregate. In addition, there were around 15 staff. Narregate had 14 consulting rooms.

Narregate was open from 7 am until 10 pm on Monday to Friday, and 8 am to 10 pm on weekends and public holidays. Shifts were organised to seek to ensure that there was a spread of doctors throughout each day, with at least 2 doctors available at 7 am (or 8 am on weekends and public holidays), and at least 2 doctors available through to 10 pm. At times, the desired roster could not be achieved. For example, occasionally there would only be 1 doctor rostered to work through to 10 pm.

There was also a roster for nurses, who were in attendance from 8 am to 8 pm, 7 days a week. This meant that doctors working the evening shift did not have the assistance of nurses from 8 pm to 10 pm.

The number of doctors working at Narregate increased throughout 2012 and 2013. By the time Ashraf commenced working for Idameneo in July 2012, there were 11 doctors working at Narregate. This number progressively increased over the following 12 months or so, so that by 2 August 2013 there were 18 doctors engaged.

C. Agreements entered into

On 29 June 2012, 3 deeds were executed.

The first deed was executed by each of Idameneo, Ashraf and Ashraf’s Company, and was entitled “Sale of Practice” (“the Sale Deed”). The recitals to the Sale Deed included:

A.[Ashraf’s Company] owns a medical practice conducted at [Greensborough].
…
E.[Ashraf’s Company] wishes to cease the conduct of a medical practice from [Greensborough], to sell to [Idameneo] the practice conducted by it from [Greensborough], and the medical goodwill developed by [Ashraf’s Company] through [Ashraf], and [Ashraf’s Company] wishes to conduct a new medical practice from [Narregate] on the terms now set out.

The operative clauses of the Sale Deed included:

2.1[Ashraf’s Company] agrees to sell, and [Idameneo] agrees to buy, for [$600,000], the practice of [Ashraf’s Company], which includes the goodwill of the practice (and all other medical goodwill of [Ashraf’s Company] developed through [Ashraf]) and the items in Schedule 1.[2]
[2]The only item referred to in Schedule 1 was “Doctor’s bag”.
2.2On the date of entering into [the Sale Deed]:
(a)[Ashraf’s Company] and [Idameneo] must execute the Practitioner Contract in accordance with Clause 4.1(a); and
(b)[Ashraf] and [Idameneo] must execute the Performance Guarantee in accordance with Clause 4.1(b).

2.3
…
(b)Before completion of this sale and as a precondition to completion, [Ashraf’s Company] or [Ashraf] must deliver to [Idameneo] evidence to the satisfaction of [Idameneo] that:
[various security interests were identified that needed to be discharged].

If all the conditions in this clause are not satisfied, then completion cannot occur.

…
2.6 On completion:
(a)[Ashraf’s Company] must have satisfied the conditions of Clause 2.3(b); and
(b)[Idameneo] must pay the Purchase Price balance of $575,000 …; and
(c)[Idameneo] must insert the date of completion as the Commencement Date in each of the executed Practitioner Contract and the executed Performance Guarantee in accordance with Clause 4.1(d);[3] and
[3]The date of 16 July 2012 was inserted.
(d)[Ashraf’s Company] must commence its incorporated medical practice, through [Ashraf], at [Narregate] in accordance with Clause 4.1.

2.7If only some of the steps under the preceding Clause take place, then completion is deemed to have taken place when [Ashraf’s Company] has satisfied all the preconditions in Clause 2.3(b), the Purchase Price has been paid to [Ashraf’s Company], and the proposed completion date has passed.
2.8It is a precondition to completion of [the Sale Deed] that [Ashraf] satisfies all the preconditions in Clause 2.3(b) …

…
4.1 The parties agree that:
(a)[Idameneo] must execute the original, and [Ashraf’s Company] must execute the duplicate (or counterpart), of the Practitioner Contract at the same time [the Sale Deed] is entered into, with its Commencement Date (in its Clause 1.1) being left blank; and
(b)[Idameneo] must execute the original, and [Ashraf] must execute the duplicate (or counterpart), of the Performance Guarantee at the same time as [the Sale Deed] is entered into, with its Commencement Date (in its Clause 1.1) being left blank; and

…
(e)essential terms of [the Sale Deed] includes Clause 2.3(b), and the satisfaction of all preconditions in Clause 2.3(b), and that [Ashraf’s Company] commence its incorporated medical practice, through [Ashraf], full time at [Narregate] on or before completion in accordance with the Practitioner Contract.

4.2[Ashraf’s Company] agrees with [Idameneo] that [Ashraf’s Company] will, under the Practitioner Contract, conduct its incorporated medical practice and procure [Ashraf] to:
(a)render medical services from [Narregate] for at least 5 years from the Commencement Date under the Practitioner Contract. [Ashraf’s Company] agrees with [Idameneo] that it will conduct its incorporated medical practice, and procure [Ashraf] to render medical services, only from Narregate during that period. This requirement extends the restraint in Clause 5.1.[4] The only exceptions to this are:
[4]Clause 5 of the Sale Deed contained a restraint of trade, preventing each of Ashraf and Ashraf’s Company from rendering medical services within a 10 kilometre radius of Ashraf’s Company’s medical practice in Greensborough or within a 10 kilometre radius of Narregate for a period of up to 8 years.
(i)where the rendering of the medical services is in accordance with any prior specific written permission of [Idameneo] given at any time; or
(ii)it is the rendering of urgent medical attention in circumstances where the failure to do so might reasonably be regarded as unprofessional conduct or unsatisfactory professional conduct under the Act;[5] and
[5]The Act was defined as “the Health Practitioner Regulation National Law, as applied by each State and Territory …”.

(b)render medical services from [Narregate] during those 5 years, for no less than 50 hours per week for 48 calendar weeks per financial year. [Ashraf] is entitled to be absent (that is, not be in attendance at [Narregate]) for up to 4 calendar weeks per financial year (providing Clauses 4.2(c)(i) and 4.2(c)(ii) have been complied with pro rata to the then stage of the financial year). For the financial year during which the Practitioner Contract commences or terminates the 48 week and 4 week periods in this Clause are pro rated; and
(c)counting as part of those hours specified in Clause 4.2(b), and regardless of any entitlement to be absent, work not less than:
(i)an average of 10 hours (between 8.00 am and 10.00 pm) on 48 weekend days (either Saturdays or Sundays, or both) each financial year; and
(ii)one evening (from 6.00 pm to 10.00 pm) on or between Monday to Friday each week for 48 weeks each financial year; and
(iii)one half of the Christmas and New Year period special rosters (5 days on, 5 days off); and
(iv)an equal share of other public holiday period special rosters along with the other practitioners at [Narregate],

so as to enable [Idameneo] to manage [Narregate] as a medical centre which operates efficiently 24 hours a day for 365 days a year; and
(d)act in a harmonious way with other practitioners and staff at [Narregate]; and
(e)use [Ashraf’s Company] and [Ashraf]’s best endeavours to, ethically and professionally, expand the turnover, profitability, quality and image of the services provided at [Narregate].

4.3The parties agree that, despite the width of Clause 3.2(b) of the Practitioner Contract, it is the responsibility of [Ashraf’s Company] and [Ashraf] (and not that of [Idameneo]) to supply the personal items of equipment normally found in a doctor’s bag, such as ophthalmoscope, auroscope and stethoscope.
4.4[Ashraf’s Company] and [Ashraf] must complete and sign all documents and do all other things necessary to obtain, by completion, a provider number in respect of [Narregate]. Each of [Ashraf] and [Ashraf’s Company] must cease, as from completion, to use [Ashraf’s Company] and [Ashraf]’s provider number in respect of any other location.
4.5Each of [Ashraf’s Company] and [Ashraf] must complete and sign all documents and do all other things necessary from time to time during the term of the Practitioner Contract in relation to seeking and obtaining any Grants. For this purpose “Grants” means grants from the Commonwealth or a State Government, a statutory or other medical authority or body including, but not limited to, Better Practice Grants, Practice Incentives, and any replacement or similar grants, paid or payable either to [Ashraf’s Company] or to [Ashraf], whether solely or jointly with another.
4.6The parties agree that any money any of them receives in respect of Grants to [Ashraf’s Company] or [Ashraf] belongs solely to [Idameneo], regardless of whether the Practitioner Contract is on foot or has been terminated.
…
6.1[Ashraf’s Company] and [Ashraf] jointly and severally warrant to [Idameneo] that at the date of [the Sale] Deed and at completion:
(a)the gross receipts of [Ashraf’s Company] in respect of medical services rendered by [Ashraf] from the Old Premises (ie Greensborough):
(i)for the year ended 30 June 2011 were not less than $350,000; and
(ii)from 1 July 2011 to the date of [the Sale] Deed were, pro rata, not materially different from that in (i) above;

…
(c)neither [Ashraf] nor [Ashraf’s Company] is aware of anything which would affect the capacity (whether legal, physical or mental) of either [Ashraf] or [Ashraf’s Company] to comply with the terms of each of [the Sale] Deed, the Practitioner Contract and the Performance Guarantee;
…

6.2The warranties in the preceding Clause are qualified only to the extent of any specific disclosure made by [Ashraf’s Company] and [Ashraf], in writing, to [Idameneo] immediately prior to signing [the Sale] Deed.
6.3The warranties do not merge on completion. Each of [Ashraf’s Company] and [Ashraf] is liable to [Idameneo] for damages for any breach of the warranties whether the breach is discovered by [Idameneo] before or after completion.
…
8.1In consideration of [Idameneo] entering into [the Sale] Deed to purchase the practice at the request of [Ashraf], [Ashraf] guarantees to [Idameneo]:
(a)the performance and observance by [Ashraf’s Company] of its obligations under [the Sale] Deed, before, on or after completion of the sale; and
(b)the accuracy and fulfilment of all warranties and representations made by or on behalf of [Ashraf’s Company] in [the Sale] Deed or to induce [Idameneo] to enter into, or to complete, [the Sale] Deed; and
(c)the payment of any money by [Ashraf’s Company] to [Idameneo] or to any third party, in accordance with [the Sale] Deed.

8.2The guarantee in the preceding Clause is a continuing guarantee and binds [Ashraf] despite:
(a)the subsequent death, bankruptcy, or liquidation of either or both [Ashraf’s Company] and [Ashraf]; or
(b)any indulgence, waiver or extension of time by [Idameneo] to [Ashraf’s Company] or [Ashraf]; or

…
9.1[Ashraf’s Company] and [Ashraf] may terminate [the Sale] Deed by notice in writing to [Idameneo] if [Idameneo] commits any breach of any provision of [the Sale] Deed other than a breach which (being capable of being remedied) is remedied within 7 days of notice being given to [Idameneo] by [Ashraf’s Company] and [Ashraf].
9.2[Idameneo] may terminate [the Sale] Deed on the happening of any of the following events:
(a)either [Ashraf’s Company] or [Ashraf] commits any serious breach of any provision of [the Sale] Deed and [Ashraf’s Company] or [Ashraf] has failed to remedy that breach within 7 days of receiving a notice from [Idameneo] calling for that breach to be remedied; or

…
10The parties agree that:
…
(b)a due termination of [the Sale] Deed by [Idameneo] under Clause 9.2 above is automatically a due termination of the Practitioner Contract under its Clause 9.2, and vice versa.

…
13No change in, or addition to, the terms of [the Sale] Deed is made, unless agreed in writing signed by a director of [Idameneo] and by [Ashraf] (both on [Ashraf]’s own behalf an on behalf of [Ashraf’s Company]).

In summary, relevant to the issues to be determined, the Defendants agreed that Ashraf’s Company, through Ashraf, would provide services to Idameneo for 5 years from 16 July 2012. Further, in providing those services, both of them agreed that Ashraf’s Company would procure Ashraf to provide medical services at Narregate for no less than 50 hours per week for 48 calendar weeks of each financial year (“the Minimum Hours Requirement”). This meant that Ashraf’s Company was not required to procure that Ashraf attend at Narregate for a maximum of 4 weeks per annum (“the Maximum Absence Requirement”). Furthermore, both agreed with Idameneo that Ashraf’s Company would procure Ashraf to provide at least the minimum services in the evening (“the Evening Hours Requirement”), and on weekends and public holidays (“the Weekend Hours Requirement”), as set out in clause 4.2(c) of the Sale Deed. (The requirements referred to in this paragraph are referred to collectively as “the Working Requirements”.)

The commitment made by Ashraf’s Company was to enable Idameneo to manage Narregate as a medical centre to operate efficiently for 365 days per year. To this end, Ashraf’s Company agreed to act harmoniously and to use its best endeavours to, effectively, achieve this outcome, and to procure Ashraf to do likewise. Moreover, warranties were given jointly and severally by the Defendants that they were not aware of anything which would affect their capacity to comply with the obligations imposed under the Sale Deed, the Practitioner Contract or the Performance Guarantee. There was no suggestion by the Defendants that any disclosure was made (pursuant to clause 6.2 or otherwise) to suggest the warranties given were qualified in any way.

Significantly, for the purposes of this proceeding, neither the Sale Deed nor the other deeds executed made any provision or allowance for sick leave if Ashraf was injured or became too unwell to meet the Working Requirements.

The second deed executed on 29 June 2012 was the Practitioner Contract (referred to in clause 4.1(a) of the Sale Deed) between Idameneo and Ashraf’s Company (ie Ashraf was not a party in his own right). The recitals included:

C.[Ashraf’s Company] wishes to conduct its incorporated medical practice from [Narregate] and [Idameneo] has agreed to make [Narregate] available for this purpose and to supply extensive services to [Ashraf’s Company] on the terms now set out.

The operative terms of the Practitioner Contract included:

2.[The Practitioner Contract] commences on the Commencement Date [being 16 July 2012] and continues for a period of 5 years, and after that until determined by either party giving to the other 30 days’ written notice of termination.
3.1[Idameneo] must, at its cost and expense, provide supply and maintain to and for [Ashraf’s Company], and such other persons as may at any time practise medicine and provide paramedical services from [Narregate], such administrative services, clerical staff, facilities, plant and equipment as are in the opinion of [Idameneo] necessary for [Ashraf’s Company] to conduct its incorporated medical practice from [Narregate].
3.2The services, facilities and items to be provided by [Idameneo] under Clause 3.1 include:
[various services were listed].

…
5.1[Ashraf’s Company] must conduct its incorporated medical practice and must procure that [Ashraf] attends at [Narregate] and renders medical services:
(a)from such location within [Narregate] as may be specified at any time by [Idameneo]; and
(b)during such hours as are mutually agreed between [Idameneo] and [Ashraf’s Company] at any time.

…
5.3 [Ashraf’s Company] must:
(a)use [Ashraf’s Company]’s best endeavours to promote the interests and welfare of the practice at [Narregate]; and
(b)subject to Clause 5.2,[6] diligently observe all the lawful directions of [Idameneo] given at any time concerning the operation or management of [Narregate] and the business conducted from [Narregate]; and
[6]Clause 5.2 prevented Idameneo from telling Ashraf or Ashraf’s Company how to perform medical services.
(c)procure [Ashraf] to act in a harmonious way with other practitioners and staff at [Narregate].

…
9.2[Idameneo] may terminate [the Practitioner Contract] on the happening of any of the following events:
(a)[Ashraf’s Company] commits any serious breach of any provision of [the Practitioner Contract] and [Ashraf’s Company] has failed to remedy that breach within 7 days of receiving a notice from [Idameneo] calling for that breach to be remedied; or

…
10.1[Ashraf’s Company] must procure that [Ashraf] complies with such of the terms of [the Practitioner Contract] as will enable [Ashraf’s Company] to meet its obligations under [the Practitioner Contract].

…
13.No change in, or addition to, the terms of [the Practitioner Contract] is made, unless agreed in writing signed by a director of [Idameneo] and by [Ashraf] on behalf of [Ashraf’s Company].

Finally, on 29 June 2012 the Performance Guarantee (referred to in clause 4.1(b) of the Sale Deed) was executed as a deed between Idameneo and Ashraf only. Clause 1.2 of the Performance Guarantee read:

[Ashraf] covenants with [Idameneo] that [Ashraf] will procure that [Ashraf’s Company] carries out the terms of the obligations imposed on [Ashraf’s Company] under the Practitioner Contract.

There were no contractual documents between the parties other than those referred to above.[7] Further, although there were subsequent communications between Ashraf and Idameneo regarding a possible change to his working hours,[8] no variation was ever agreed to in that regard.[9]

D. Idameneo’s claims

[7]Ashraf referred to a document during the trial entitled “Primary Health Care Limited Work Health and Safety Policy”. Not only did this document not have contractual status, but no allegations were pleaded in the defence by reference to this document.

[8]There was a significant dispute about the extent of these communications: see pars 65, 77 to 86, 95-96, 100-101 and 135 below.

[9]However, there was an arrangement to allow for Ashraf’s absence beyond the Maximum Absence Requirement: see par 108 below.

Idameneo alleged that, from 16 July 2012 to 16 July 2013, the Defendants failed to meet their contractual obligations. More specifically, it was alleged that there was a failure to comply with each of the Working Requirements. Based on these allegations, it was alleged further breaches were committed by reason of a failure by Ashraf’s Company to procure Ashraf to act harmoniously or with best endeavours.[10]
[10]See par 16 above, clause 4.2(d) and (e) of the Sale Deed.

It was further alleged that the Defendants knew Ashraf was unwell before he entered into the agreements on 29 June 2012. The alleged non‑disclosure also founded allegations of breach by the Defendants.

Various other breaches were alleged in relation to each of the Sale Deed, the Practitioner Contract and the Performance Guarantee. By reason of those alleged breaches, on 20 June 2013, Idameneo served a notice of serious breach pursuant to clause 9.2(a) of the Sale Deed and 9.2(a) of the Practitioner Deed requiring the Defendants to remedy the breaches within 7 days (“the Notice to Remedy”). It was then alleged, that by reason of the failure to remedy the breaches, on 2 August 2013, Idameneo served a notice of termination of the Sale Deed and the Practitioner Contract.

Damages are claimed by Idameneo for breaches both before and after the alleged termination.

Further or alternatively, Idameneo alleged that Ashraf suffered from illnesses between 16 July 2012 and 16 July 2013,[11] and that such illnesses were not caused by the fault of any of the parties. It was alleged that the illnesses constituted a supervening event that fundamentally changed the nature of the parties’ obligations under the Sale Deed and that, by no later than 16 July 2013, performance of the Sale Deed had become impossible or was otherwise frustrated and therefore discharged. Finally, it was claimed that Idameneo was entitled to recover the purchase price of $600,000 paid under the Sale Deed by reason of the alleged frustration.

E. The defence

[11]It appears this time frame was chosen to reflect the time period alleged in the earlier allegations. There was no issue between the parties that Ashraf continued to be ill after 16 July 2013.

There was no dispute that the Sale Deed, the Practitioner Contract and the Performance Guarantee were duly executed. It was alleged that the Defendants’ obligations to render medical services were governed by the Practitioner Deed, rather than the Sale Deed. Further, it was alleged that, pursuant to clause 5.1(b) of the Practitioner Deed, Ashraf’s Company was required to procure Ashraf to attend at Narregate and render medical services only during such hours as were mutually agreed between Idameneo and Ashraf’s Company. It was alleged the effect of this clause was that Idameneo could not impose a requirement to work a minimum number of hours per week or at particular times during a week, unless Ashraf’s Company agreed to do so pursuant to clause 5.1(b) of the Practitioner Deed.

The defence then contained allegations as to agreed working hours, which were not in accordance with the Sale Deed, but rather reflected the hours allegedly worked by Ashraf from 16 July 2012 to 16 May 2013. It was alleged that, on many occasions that Ashraf was not able to attend in accordance with his 50 hour per week roster that had been issued by Idameneo, he spoke to the practice manager at Narregate and informed her as to why he was unable to work. When this notification was given, Ashraf alleged that on each occasion the practice manager said in substance, “That’s fine, get well soon”. It was alleged that, on other occasions, Ashraf notified Idameneo of an incapacity to work by the provision of medical certificates and that no response was received before 20 June 2013. It was alleged this failure to respond suggested Idameneo would not require the time lost to be remedied later.

The defence also contained allegations that there were implied terms of good faith with respect to the Sale Deed and the Practitioner Deed. It was alleged an implied term qualified the right of Idameneo to allege the existence of, or enforce, both the Minimum Hours Requirement (of 50 hours per week) and the Maximum Absence Requirement (of 4 weeks per annum). The defence stated that by purporting to enforce these requirements on and from 20 June 2013,[12] Idameneo’s behaviour was arbitrary and perverse, and it was acting in breach of these implied terms.
[12]The dates of 20 June 2013 and 20 July 2013 are alleged in the respective paragraphs. I will assume 20 July 2013 is a typographical error.

Ultimately, Idameneo did not dispute an implied term of good faith existed.[13] However, Idameneo alleged in its reply that any implied term of good faith required Idameneo to do no more than comply with reasonable requests made by Ashraf not to attend work, made on reasonable notice. It was further alleged that there were no such reasonable requests made concerning his absences.
[13]The allegation was denied in Idameneo’s reply, but was conceded during closing submissions. Accordingly, it is unnecessary to consider whether, as a matter of law, such a term was implied: see, for example, Bytan Pty Ltd v BB Australia Pty Ltd (2012) 41 VR 46, 57 [45] (Warren CJ, with whom Osborn JA agreed); Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL [2005] VSCA 228, [25] (Buchanan JA, with whom Warren CJ and Osborn AJA agreed).

Returning to the defence, it was alleged that the purchase price of $600,000 was to acquire the practice of Ashraf’s Company, that it was a capital payment and that Idameneo received the consideration it bargained for by reason of that fact that it did acquire Ashraf’s Company’s practice.

Allegations were also made that a course of conduct gave rise to Idameneo being estopped from enforcing any rights it may have concerning the absences of Ashraf. Essentially, it was alleged that Ashraf duly notified Idameneo of his absences and that that conduct was accepted. This was alleged to have occurred by Ashraf contacting the practice manager each time he failed to attend in accordance with his roster or by providing medical certificates (as referred to in paragraph 30 above). The Defendants claimed they relied on the conduct of Idameneo as the responses of Idameneo gave rise to an assumption that Ashraf did not need to meet the Minimum Hours Requirement or the Maximum Absence Requirement.

In addition to the above conduct said to underlie the estoppel, it was alleged in the defence that Idameneo knew the Defendants were relying on the conduct of Idameneo in assuming Ashraf did not have to comply with the Minimum Hours Requirement or the Maximum Absence Requirement. It was alleged that such reliance occurred up until 20 June 2013, when the Notice to Remedy was served by Idameneo.

Further, it was alleged that Idameneo “condoned” each alleged breach arising by reason of the absences and, accordingly, Idameneo could not now rely on such breaches to claim damages against the Defendants.

Finally, allegations were made to the effect that Idameneo suffered no loss by reason of Ashraf’s absences, or, if loss was suffered, Idameneo failed to mitigate its loss.

F. Position adopted by the parties during closing submissions

At the commencement of closing submissions, counsel for Idameneo raised the possibility of the court referring the proceeding to mediation. The court was informed that Idameneo had made an offer to the Defendants, in full and final settlement, that each party “walk away” bearing his or its own costs. In substance, it was suggested that it might be desirable for the court to assist in facilitating the resolution of the proceeding in these circumstances by ordering a mediation.

By way of background, evidence previously filed with the court in support of an adjournment application made by the Defendants in late 2014 disclosed that the Defendants, if not impecunious, had very limited means. Further, a mediation scheduled to be held in the first week of trial could not be conducted because Ashraf became seriously unwell.[14] As stated above,[15] the Defendants were represented by Ashraf alone at trial.
[14]Ashraf was taken by ambulance to the emergency department of a hospital on the evening of the first day of trial and remained in hospital on the following day. A medical certificate was provided to the court in that regard.
[15]See par 8 above.

In response, Ashraf told the court that the Defendants did not accept the open offer made by Idameneo. The parties were informed that it was desirable that the closing submissions be completed that day, but that an attempt would be made by the court to find a mediator or someone else to assist Ashraf as a self-represented litigant. The trial was stood down for a short period of time. Upon resumption, the matter was again stood down so the Defendants could obtain the benefit of legal advice.[16]
[16]Two members of the Victorian Bar dutifully offered their services pro bono at the request of the court.

After Ashraf received independent legal advice, Ashraf repeated that the Defendants would not accept the open offer made by Idameneo. Accordingly, the matter proceeded.

Also during closing submissions, Idameneo stated that it no longer sought compensation based on a claim of frustration.[17] While it was accepted that the issue of frustration remained in the context of the claims for breach of contract, Idameneo’s position was that any claim for compensation would now be confined to a claim for damages for breach of contract.

G. Events from late June 2012 to mid November 2012

[17]See par 28 above.

In late June or early July 2012, Ashraf met with the practice manager at Narregate, Leanne Starfas (“Starfas”), to discuss Ashraf working at Narregate. The lead doctor at Narregate, Mark Overton (“Overton”), was introduced to Ashraf on this occasion.

During the course of the discussion, at which both Starfas and Overton remained present, Ashraf agreed to a 50 hour per week roster. Leading up to this agreement, it was discussed that there was a need to fill some morning shifts and the evening shifts at Narregate. When this was raised, Ashraf stated he was willing to work the evening shifts. Ashraf stated that he was not a morning person, so that this arrangement suited him. Ashraf stated at trial he was joking when he said this, but in any event he freely agreed to work evening shifts. Accordingly, from 16 July 2012, when he commenced at Narregate, Ashraf was rostered for evening shifts.

Ashraf appears to have had problems with working at Narregate from the very outset. Shortly after he started, Ashraf observed that the room he was given was dusty. Ashraf said that he had suffered previously from allergies that were caused by dust. Ashraf said that he cleaned his room himself, but his exposure to the dust caused him to suffer an allergic reaction.

In his first week or so, Ashraf spoke to Starfas and told her of his concerns regarding the dust in his room. However, he also told Starfas that he had cleaned the room himself. He made no request for any assistance from Starfas or anyone else from Idameneo in this regard. Whether by reason of his allergic reaction or otherwise, Ashraf failed to attend at Narregate for a day in his first week of providing services.

Attached to this judgment and marked annexure “A” is an agreed schedule of the days that Ashraf failed to attend at Narregate in accordance with his roster. Annexure “A” illustrates that, from the outset, Ashraf repeatedly failed to attend for work as agreed. An email sent on 12 October 2012 recorded that Ashraf was only “73% compliant” with his roster. Ashraf did not dispute the accuracy of this figure.[18] Further, without taking any annual leave, between mid July 2012 and mid November 2012, Ashraf had used up his full allocation of days and weeks off, in accordance with the Maximum Absence Requirement, for that financial year.
[18]On the contrary, in cross-examining the chief financial officer of Idameneo, Timothy Brewer (“Brewer”), Ashraf appeared to fully accept its accuracy.

In addition to the days when Ashraf failed to attend for work at all, there were numerous occasions when Ashraf attended at Narregate for a period of time substantially less than his rostered time.

On this issue, it must be noted that the means by which Idameneo recorded when doctors commenced and ended their shifts was not entirely accurate. By the use of a software program called Medtech, doctors “clicked on” the relevant patient file on their computers when dealing with a patient. By this means, Idameneo had an approximate record of when the doctor commenced her or his shift (by reference to when the doctor “clicked on” the first patient’s file) and when the shift ended (by reference to when the doctor closed the last patient’s file). It was accepted by Idameneo that there were relatively short periods of time during which a doctor attended before seeing the first patient, and attended after seeing the last patient, at Narregate which times were also attributable to meeting the Working Requirements, that the Medtech data failed to record.

Another potential shortfall with the Medtech system arose when a doctor failed to “click on” when seeing a patient. For example, on 2 August 2012, the Victorian area manager for Idameneo, Tess Kowalski (“Kowalski”), sent an email to Starfas suggesting that Ashraf had been late to work on the Monday and Tuesday of that week. However, Kowalski also entertained the possibility that Ashraf had failed to click on a patient at the commencement of his shift. The email continued:

Check what time [Ashraf] gets in today and explain to him that it is good if he clicks on a patient as close to his start time as possible as this is one way we monitor the hours.
Don’t make a big deal out of it ‑ just maybe a gentle tip.

The email chain, of which this email was a part, recorded that Starfas duly did this.

Notwithstanding these shortfalls with the system used for recording the start and end times of a doctor’s shift, on the evidence, there could be no issue that Ashraf repeatedly failed to attend at Narregate in accordance with his rostered hours.

Attached to this judgment and marked annexure “B” is a schedule of the days that Ashraf attended at Narregate on a rostered day, but either arrived materially late or left materially early, or both.[19] The contents of annexure “B” were produced by Idameneo during closing submissions. Based on the evidence as to the business at Narregate, the system used for recording patients being consulted and the frequency of patients attending for consultation, I accept the contents of annexure “B” as being substantially accurate.[20]
[19]The times used for the purposes of compiling annexure “B” made allowance for the shortfalls discussed in pars 49 and 50 above by adding an hour to Ashraf’s hours worked (as recorded by the Medtech data) for each day. The additional hour was included to account for: (1) any time Ashraf may have spent at work without “clicking on” in Medtech; or (2) any time Ashraf may have spent performing incidental, non‑consultation based tasks at the start of his day or at the end of his shift. Further, Ashraf expressly accepted and adopted the accuracy of the Medtech data (in contrast to data recorded on another software program, called Sapphire).
[20]In appropriate cases, an approximation of the loss is acceptable where a plaintiff cannot adduce precise evidence of what has been lost: see, for example, Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257, 266 [37]-[38] (Hayne J, with whom Gleeson CJ, McHugh and Kirby JJ agreed), 280 [84] (Callinan J); Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625, 636.1 (Barwick CJ). Again, this is a matter for quantum.

That said, some further allowance may have to be made for the inadequacies of the system used. Further, it appears there were some occasions when there were no patients waiting to be attended to and this has not been taken into account in the preparation of annexure “B”. These are matters to consider when assessing quantum.

Between July and mid November 2012, Ashraf gave various reasons for his absences. Some of the reasons related to his medical condition. During that period, Ashraf suffered allergies from time to time, and to varying degrees. Ashraf gave evidence that, on some occasions, he could continue to work notwithstanding the allergies, but on other occasions he said he was not fit for work. Ashraf put no independent medical evidence before the court to corroborate this account for his absence.

In addition to allergies, Ashraf also referred to suffering from other illnesses or injuries that kept him from work from time to time.

Independent of his medical conditions, Ashraf gave other reasons for his non‑attendance. Ashraf stated that whenever he took sick leave or was running late he would contact reception staff or the practice manager by telephone to tell them of his position; for example, that he was delayed because he was in a traffic jam or something to that effect. He said this happened reasonably often, because he was driving from Southbank in Melbourne to Narre Warren (approximately 43 kilometres south east of Melbourne). Ashraf suggested that the highway that he used to travel to work was notoriously bad in the mornings. When asked why he did not leave earlier to get to work on time, Ashraf suggested it would not have made a significant difference to his arrival time as traffic jams were unpredictable. Ashraf went so far as to suggest that he tried leaving earlier, but it did not make any difference to the time he arrived at work.[21]
[21]However, during the course of closing submissions, Ashraf stated that he was not using traffic as a reason for his tardiness. This does not alter the fact that previously, during his evidence, Ashraf did use traffic as an excuse, including, on his evidence, when speaking to the reception staff and the practice manager.

On the issue of getting to work on time, Ashraf said that his normal practise was to leave for work at 11 am to be at Narregate by 12 noon. He said that sometimes it took longer than an hour. Ashraf also suggested getting to work on time was “a very fine balance” with all his other duties, such as home duties, shopping, et cetera. He stated that, because he was living alone, in the morning he had to manage his house duties as well.

Ashraf further sought to explain his position on the basis that, because he visited his children in Geelong on the weekends, he did not have time on the weekends to do his house duties. As a consequence, he was “balancing everything finely”. This evidence seems to ignore the fact that Ashraf also had rostered days off on weekdays.

With respect, Ashraf’s evidence in this regard fell well short of providing a satisfactory explanation as to why he repeatedly failed to commence his rostered shifts on time.

Further, on some occasions when Ashraf was either running late or failed to attend at all for his rostered shift, he gave either no notice[22] or very late notice that he would not be in attendance as rostered. On numerous occasions, he contacted Narregate at or around the time the shift was due to commence, which meant it was not possible for any replacement to be arranged.
[22]When it was put to Ashraf in cross-examination that he gave no notice on some occasions, he responded that he felt as if he had given reasons every time “and if I didn’t, then it would have been either I forgot to mention it or it was accidental”.

For reasons that were not entirely clear, in the context of giving this evidence about his failure to attend at Narregate as rostered, Ashraf also referred to an incident he said occurred in August 2012 upon him leaving work at around 10.15 pm. He said he was required to park in the street, as doctors were not given any special privileges for parking at Narregate. He said rocks were thrown at him from a passing car. He said he felt it was not safe around Narregate. The incident was not reported to police. Ashraf suggested he reported this to Overton, but that matter was not put to Overton when Overton gave evidence.

Without going into further detail,[23] the evidence establishes that, subject to the issues raised in the defence (which are discussed in paragraphs 129 to 137 and 144 to 151 below), there was a failure to attend at Narregate for 50 hours per week as mutually agreed. In so doing, at the very least, the Defendants failed to comply with the Minimum Hours Requirement.[24]
[23]Further examples of non-attendance and differing explanations were the subject of evidence: for example, court book 1/220, 223, 259, 267 and 269.
[24]Ashraf’s Company’s obligations arising directly under the Sale Deed, cl 4.2(b) and (c), together with the Practitioner Contract, cl 5.1(b); and Ashraf’s obligations arising under the Performance Guarantee, cl 1.2.

Further, there was no evidence to support the contention that any representation was made by the practice manager or other representative of Idameneo to the effect that it was agreed or otherwise acceptable for Ashraf to continually fail to comply with the agreed roster. Overton, in his role as lead doctor, spoke to Ashraf in around September or October 2012 about Ashraf’s attendance levels. In substance, Overton told Ashraf that Narregate needed doctors that were able to function and service the needs of the patients. Overton also reminded Ashraf that he had signed a contract and that he was obliged to meet the terms of the contract. Although Overton could not recall whether there were “3, 4 or 5” such discussions, he did recall them occurring on “a few” occasions.

As time went on, Overton formed the view that he was unable to resolve Ashraf’s issues by means of his discussions with Ashraf. Accordingly, in November 2012, he referred the issue to more senior management. Ashraf submitted this showed a cavalier and reckless attitude towards Ashraf’s position. Ashraf said it amounted to evidence of ignoring Ashraf’s concerns, which conduct he contended increased his stress levels and caused his health to suffer. Again, there was no independent medical evidence led to support this assertion. Further, such suggestions are difficult to reconcile with Ashraf’s stated position the following month.[25] In any event, there were no allegations in the defence which sought to rely on Overton’s conduct, namely, the elevation of the problem to senior management.
[25]See par 96 below.

In closing submissions, Ashraf properly accepted that up until November 2012 relations between Ashraf and representatives of Idameneo were harmonious.[26] Ashraf also accepted he made no request to amend his roster before 10 November 2012. Further, there was no evidence to suggest that Ashraf, at any time before April 2013, sought to have his roster changed so that he could work less evening shifts. If any request was substantively made in November 2012 to reduce his working hours (which I seriously doubt),[27] it was not an ongoing request and Ashraf soon after agreed to comply with the roster as originally agreed.[28]
[26]This evidence was given by reference to the nature of the relationship between the parties, rather than to cl 4.2(d) of the Sale Deed.
[27]See pars 74-75, 77-85 and 95 below.
[28]See par 96 below.

During the course of the trial, Ashraf appeared to contend that Idameneo should have assumed responsibility itself for changing the roster because it was apparent that Ashraf was unwell and should not have been working as many evening shifts as he was. Any such allegation was not pleaded in the defence.

In any event, in circumstances where Ashraf had stated that he was not a morning person (jokingly or otherwise) and readily agreed to work evening shifts when asked for his preferred shifts in late June or early July 2012, there is no proper basis for contending that Idameneo should have assumed some responsibility to change the roster. This is particularly so when Ashraf himself did not make any request, at least before November 2012, for the roster to be changed. To adopt the language of clause 5.1(b) of the Practitioner Contract, even on Ashraf’s evidence, the roster had been, and continued to be, mutually agreed until at least November 2012.

H. Events from late November 2012 until May 2013

As can be seen from annexures “A” and “B”, absenteeism and tardiness continued to be a problem for Ashraf up until May 2013. From 22 November 2012 until the end of May 2013, Ashraf was absent for a further 42 days.[29] This was despite the fact that, in November 2012, Idameneo made it very clear that it was dissatisfied with Ashraf’s performance.
[29]But also see par 108 below.

On 20 November 2012, a meeting was held between Ashraf and Idameneo. There is a file note of the discussion. Ashraf agreed that the file note is accurate. Ashraf suggested the file note reflected a discussion between himself and Overton. When it was put to him that the note was prepared by someone other than Overton, namely Amanda Mullins, the Victorian state manager (“Mullins”), and it was Mullins who met with Ashraf, Ashraf was adamant the discussion was with Overton. To a large extent it does not matter, for the purposes of this proceeding, whether Ashraf met with Mullins or Overton, as the agreed file note makes it clear that Idameneo raised its concerns with Ashraf.

Dealing with the matters the subject of the file note, it was stated to Ashraf that his absence had been cause for concern. It was also stated to Ashraf there were concerns about his ability to provide medical services as it had been observed that he had been stumbling around the administration area, slurring his words and appearing to be half asleep at times. It was put squarely that some of Ashraf’s colleagues were concerned as Ashraf appeared to be drunk or affected by drugs at times.

Ashraf was also told at the meeting that he had already been absent from work for a total of 21 days,[30] which was effectively (pursuant to the Maximum Absence Requirement) the total amount of time he was allowed to be absent for that financial year. Ashraf responded by saying he did not realise it had been so many. It was also put to Ashraf that there was concern not only with the 21 days of absence, but also the fact that Ashraf left the practice at short notice, leaving his colleagues short staffed and inconvenienced.
[30]Annexure “A” suggests it was only 20 days.

Ashraf made no challenge to the allegation concerning leaving Narregate at short notice. Rather, in response, Ashraf told Idameneo’s representative of his health history and the fact that he had had a frustrating life of being unwell with allergies. During his evidence, Ashraf said this history included, as a 15 year old, being bedridden for up to a year. When asked during the meeting whether or not his health history had been disclosed before contracts were entered into with Idameneo, Ashraf said he had not disclosed such matters. When it was suggested that it would have been unusual for Idameneo to agree to a 50 hour week if there was a chance those requirements could not be met, Ashraf responded that, in mid 2012, he thought his health had improved and that he did not feel that 50 hours was too much to complete.

In this regard, evidence was given by Nick Aitken (“Aitken”), a business consultant, who conducted the pre‑contractual negotiations on behalf of Idameneo. Aitken said that, at the time of those discussions in May and June 2012, Ashraf was cooperative and it was not apparent that Ashraf was under the influence of any substances. Aitken said he observed no problems with Ashraf’s skin. There is no evidence to suggest, at any time during the pre‑contractual negotiations, Ashraf was other than in good health.

Returning to 20 November 2012, towards the end of the discussion, Ashraf asked whether his contract with Idameneo could be reviewed. He was told he would need to speak to Mendel (Michael) Monk (“Monk”), an executive medical director of Primary Health Care Limited (“Primary Health Care”), the holding company of Idameneo.

Ashraf enquired as to what was wanted of him and he was told that he needed to be compliant with his roster. There was no suggestion in the file note that, this issue having been raised, Ashraf sought at this meeting any amendment to the roster to reduce the number of evenings that he worked.

Ashraf was also told that he needed to communicate more if he was unwell to ensure that Narregate was not left inconvenienced. Ashraf said he would try. The file note concluded with:

[Ashraf] didn’t come across as angry or upset [but] rather agreed he needed to be more transparent.

Ashraf gave evidence at trial that he thought what was being requested of him was unreasonable. He said he responded in the way that he did because he thought agreeing to anything would make the person with whom he was talking happier so that a roster change would be looked upon more favourably.

Contrary to the file note, Ashraf also gave evidence that, on 20 November 2012, he asked Overton for his roster to be changed. Although I do not find that Ashraf was deliberately giving evidence that he believed to be untrue, I do not accept that on or about 20 November 2012 he sought to have his roster changed. There are a number of reasons for this.

First, Ashraf accepted that the note of the discussion on 20 November 2012 was correct in every respect. Save for the issue of the roster, he suggested no other corrections or omissions.[31]
[31]The discrepancy as to who was at the meeting was not a matter for correction as the file note did not identify its author, or with whom Ashraf spoke.

Secondly, under cross‑examination, Overton not only stated that the meeting was not with him on 20 November 2012, but also stated that he did not recall any discussion with Ashraf where Ashraf asked for a change of his roster.

Thirdly, on 19 November 2012, Overton sent an email to Mullins, by which Overton recorded he had spoken to Ashraf “who is at work now”. The email recorded that Ashraf had said he had fallen off a ladder over the weekend and was a bit sore. It also recorded that Overton had told Ashraf that Mullins was interested in talking to Ashraf to see if there was anything that Idameneo could help with in regard to Ashraf’s work times and health problems. There was no suggestion in the email that Ashraf had raised directly with Overton that he wanted his roster changed.

Fourthly, based on both the evidence of Overton and Starfas, if a request to change the roster had been made, there appears to be no good reason why it would not have been done. On the contrary, the email of 19 November 2012 suggests that Idameneo was amenable to changing the work times for Ashraf if such changes were sought.

Fifthly, by this point in time, Overton had formed the view that there was a link between Ashraf’s health problems and his ability to provide medical services in accordance with his obligations. The contemporaneous documentation suggests Overton was asking Mullins to see if there was anything that could be done to help. Presumably, if Ashraf had given a direct means by which help might have been offered, which was consistent with the Defendants’ contractual obligations, then that would have been accommodated or at least reasonably contemplated.

Sixthly, in his evidence in chief (and after Idameneo had closed its case), Ashraf gave evidence of numerous requests for his rosters to be changed. Although some allowance needs to be made for the fact that he was self-represented, he failed to put many of these alleged requests to Idameneo witnesses during cross‑examination despite the fact that he was reminded by the court of the need to put his case. For example, when Ashraf was so reminded during the cross- examination of Starfas (after she had denied there was ever a request by Ashraf to change the roster so that it would involve less evening shifts), Ashraf declined to take the matter further and stated that he could not recall a specific situation where such a request was made. Moreover, when Ashraf came to giving his evidence on this issue, it was not given with much conviction or certainty.[32]
[32]Ashraf was vague as to the timing of most of these alleged conversations. When asked to be more specific about his evidence, Ashraf described the conversations with Starfas as informal. He also said, with respect to some of these conversations, he would be guessing as to what was said. Finally, he said when his alleged requests received no response, he did not follow them up.

Seventhly, Overton said he did recall a number of conversations with Ashraf in which Ashraf told him that because of the drugs he was taking for his medical condition, he could not wake up early in the morning and could not come to work any earlier. In making statements to Overton that he could not start work before 12 noon, Ashraf was obviously stating a position quite inconsistent with wishing to amend his roster to commence work before the evening shift.

Eighthly, Starfas said, until towards the end of Ashraf’s time at Narregate, she could not recall Ashraf ever making a request for the number of roster hours to be changed. It might be expected he would have also made a request of Starfas if he was requesting a roster change in November 2012.

After the meeting on 20 November 2012, Ashraf said he was “so upset and deflated, I couldn’t take — I had difficulty coming to work”. He said he had spoken previously with Starfas and Mullins, and accordingly thought that Overton would be meeting him to change his roster. For the reasons stated above, I do not accept issues with Ashraf’s roster had been raised previously.

Ashraf failed to attend to work on 22, 23 and 24 November 2012. He said this failure arose from being emotionally disturbed and feeling deflated at the time. Under cross‑examination, Ashraf accepted that by November 2012 it would be reasonable for Idameneo to get the impression that lots of reasons had been given for his absences.

On 29 November 2012, Monk attended at Narregate and met with Ashraf. Monk gave evidence of what occurred at this meeting, which was not the subject of any challenge at trial by Ashraf. Monk stated to Ashraf that there were concerns about Ashraf’s performance. Monk stated that Ashraf was arriving late for shifts, that he was not compliant with the roster and that Idameneo was concerned by Ashraf’s demeanour. Monk said there had been a suggestion that Ashraf staggered at work and that he might even be on drugs.

When this suggestion was put to Ashraf, he became agitated and denied he was taking drugs. However, he said it was true that he might have been late for work, but that was because he was suffering from the effects of the medication he was taking as he had a very serious illness. When asked by Monk as to the nature of the illness, Ashraf stated that he had severe allergies that kept him awake at night, that he needed medication to stop the allergies and that the medication made him drowsy. In response, Monk said that there were non‑drowsy anti‑allergy tablets available, but Ashraf said the ones he was taking were the only ones that worked.

Monk suggested that if the allergies were so severe, Idameneo needed some proof. Monk asked for Ashraf to provide some form of medical certificate or other evidence to demonstrate he was suffering in the way Ashraf had described. Ashraf agreed to do this.

Monk also said that he would like to take a drug sample to sort out whether or not there was a possibility that Ashraf was on drugs. In response, Ashraf said that he was a doctor of high rapport, with high credentials, and that he was being made the subject of an accusation. Ashraf became upset and said he was not going to submit to a drug test.

Monk then stated that Ashraf may well be in breach of his contract and the matter could “go legal”.

After this meeting, Ashraf did not provide any medical certificates to demonstrate that he was suffering from allergies, severe or otherwise. Further, at no time did Ashraf agree to subject himself to a drug test.

When giving his evidence in chief, Ashraf gave evidence of matters that were not the subject of Monk’s evidence and were not put to Monk in cross‑examination. I do not propose to set out these further matters,[33] save to say that, to the extent that Ashraf suggested that Monk stated he was not interested in any dermatological reports concerning Ashraf’s condition, I do not accept this evidence. Not only was it not put to Monk, but it also flies in the face of the unchallenged evidence Monk gave and the fact that, at the time, Idameneo was clearly seeking to try to ascertain the reasons for the difficulties Ashraf was experiencing.
[33]See T373.06–375.10, 419.06–.28.

On the evening of 29 November 2012, Ashraf sent an email to Aitken entitled ”advice please”. This email referred to Ashraf’s allergy problem. Having explained the symptoms and the difficulties he was experiencing, Ashraf then referred to the fact that he was shocked and very upset to learn that it had been suggested he had been a “substance abuser, because I was seen to be staggering around looking tired”. Ashraf implicitly suggested that his condition was such that he should not be working, and that he should have been resting, but he continued to work on as there was a shortage of doctors at Narregate and he felt obliged to do as much work as he could. Towards the end of the email, Ashraf asked Aitken a series of questions. These included:

SHALL I go ahead and do the drug screen, to prove that abuse is almost as disgusting a suggestion as the intimidating manner in which I was spoken to.
SHALL I refuse and risk the threat of legal action, which I don’t want to do as I love working here.
I really just want to get completely well from this allergy moment, and get back to work, which was going well until today. I feel today’s stress has made things worse tonight. I’m already starting to scratch more as I’m writing this mail.
(Emphasis added.)

Ashraf asked Aitken to keep the email confidential.

After further emails were exchanged between Aitken and Ashraf, in which Aitken advised Ashraf that he needed to advise Idameneo of the contact made without going into the detail of the email, Ashraf responded on 4 December 2012 with the following:

The issue has been resolved – thank you for all your help and in representing me.
I hope that that is the end of it. I am feeling much better, and my health is now, (sic) have got (sic) over the worst of the pollen. Take care and thanks once again …
(Emphasis added.)

On 10 December 2012, Mullins sent an email recording she had spoken to Ashraf at length early in the previous week. It would appear from the email that Mullins stated to Ashraf that Idameneo would be monitoring his leave and behaviour. Ashraf stated in response that he was happy with that. The email also recorded that Overton had advised that Ashraf had been good when attending at Narregate and appeared to be happy.

The attendances by Ashraf improved in December 2012 and January 2013. He was only absent when rostered to attend for 1 day in December and for 2 days in January. An email from Overton to Mullins and others in mid January 2013 reflected this improvement. However, Overton gave evidence that, shortly after this email was sent, Ashraf’s performance started dropping off again.

In mid March 2013, and again in April 2013, Idameneo sent letters to Ashraf recording the extent of his absences[34] and reminding him of his and Ashraf’s Company’s obligations under the Sale Deed and the Practitioner Contract. The correspondence also suggested that the conduct of Ashraf had been unfair on patients, as well as his colleagues and staff at Narregate.
[34]It was conceded under cross‑examination by Brewer that some of the figures recorded in a letter dated 9 April 2013 may have been inaccurate because they were based on figures from the Sapphire data, such data being susceptible to human error. Although this concession was rightly made, nothing turns on it as there is no dispute Ashraf was absent for significant periods of time.

On 10 April 2013, Ashraf sent a letter to the Victorian doctor relationship manager of Idameneo, Daniel Vandenberg (“Vandenberg”). By this letter, Ashraf suggested that he had repeatedly made requests to Vandenberg, Monk, Mullins, Starfas and Overton for his hours to be reduced and to not work as many evening shifts. As already noted,[35] the contemporaneous documentation tendered at trial does not support Ashraf’s suggestion that he asked to work anything other than evening shifts. Further, the evidence given by the witnesses called by Idameneo at trial were inconsistent with this version of events. Although, in November 2012, it is possible Ashraf may have asked informally for his hours to be reduced,[36] shortly after that, in early December 2012, he expressed satisfaction that the issues had been resolved.[37] After this email there was a continuation of the existing arrangements.
[35]See pars 80-81 and 95 above.
[36]See pars 65 and 83 above.
[37]See par 96 above.

The letter also asserted that Ashraf had repeatedly asked for his weekly roster to reflect his contract so that he would only have to do a week day evening and a weekend evening.[38] There was simply no probative evidence before the court of such repeated requests. The letter concluded with a request to reduce his working hours to 42 hours per week with an extension on his contract and to only work 2 nights per week.
[38]In fact, this did not accurately reflect clause 4.2(c) of the Sale Deed.

The very same day, Ashraf sent a further letter to Idameneo stating that he wanted emergency leave because his mother was unwell. There was then a series of communications between Ashraf and Idameneo about the appropriateness of Ashraf taking further leave. This culminated in Ashraf providing an affidavit on 19 April 2013, setting out the details as to why leave was sought.

Before this affidavit was proffered, on 18 April 2013, a meeting was held between Vandenberg and Ashraf. Also in attendance were Monk and another medical practitioner who Ashraf asked to attend the meeting as a witness. Ashraf did not want Monk present, but Monk said he would only be there as an observer.

That meeting was specifically called in response to Ashraf’s request to take 2 weeks leave because of his mother’s illness. During the course of the meeting, Vandenberg told Ashraf that he was well behind with respect to his current contractual commitment and that it would not be possible to extend his leave given the existing shortfall. Vandenberg also stated that he hoped to see an improvement in Ashraf’s attendance.

On 20 April 2013, Ashraf sent an email referring to his affidavit and stating that Idameneo had accepted his mother was ill and that he would be flying to Pakistan. Ashraf stated he would be returning on 5 May 2013 and that, immediately upon his return, he wanted to discuss the matter of his “employment” and other issues and how they could be mutually resolved. Ashraf said he would like to seek an amicable agreement where both parties could go into the future without the use of lawyers or any legal or public forum, which he suggested could be potentially damaging for both parties’ reputations. Idameneo did not respond immediately to this email.

With Idameneo’s implied agreement,[39] Ashraf then departed to visit his sick mother. He returned as scheduled, but then contacted Idameneo to say that he was jetlagged. He took an additional day off upon his return.
[39]A letter from Idameneo dated 6 May 2013 recorded the fact of Idameneo’s acquiescence on or about 19 April 2013. However, there does not appear to have been any formal written agreement.

As may be seen from annexure “A”, Ashraf then attended in accordance with his roster for just over a week, but ceased to attend Narregate from 17 May 2013.

At the time that Ashraf departed for Pakistan in April 2013, Ashraf’s Company had already exceeded the Maximum Absence Requirement. In substance, Vandenberg discussed this fact with Ashraf both in emails and in their meeting prior to Ashraf’s departure.[40] By 19 April 2013, having received Ashraf’s affidavit and anticipating his imminent resumption at Narregate upon his return from Pakistan, Idameneo had effectively acquiesced to Ashraf’s leave, without indicating that any action would be taken in relation to his absence from work while in Pakistan. Therefore, the period during which Ashraf was in Pakistan could arguably be characterised as an agreed variation of the Maximum Absence Requirement, rather than contributing to the assessment of the days Ashraf was absent in excess of his annual allowance for the financial year ended 30 June 2013. This is a matter for any consideration of the quantum of the claims for breaches of contract.
[40]See pars 103-104 above.

Events from late May 2013 to mid June 2013

According to Ashraf, his condition became worse over time. As a result of this, in May 2013, he consulted with a psychiatrist.[41] At this time, Ashraf said he was “very, very, very depressed indeed and very anxious about going out and just the thought of coming to work, it triggered symptoms”.
[41]When asked by the court during the trial whether he wanted the psychiatrist to give evidence, Ashraf said “No”. Further, no medical records were relied upon by Ashraf beyond medical certificates he provided to Idameneo at the time.

The psychiatrist issued a medical certificate stating that Ashraf was “suffering from a medical condition” and that he was unfit to attend for work from 20 May to 31 May 2013.

Ashraf initially gave evidence that, on or about 22 May 2013, he attended at Narregate and delivered a copy of the medical certificate. He said that he thought he could not find Starfas when he attended, so he left the medical certificate on her desk. Ashraf said, when he could not find Starfas, he did not seek out anyone else to explain the situation. When challenged about this evidence (it was suggested that he only ever posted or sent medical certificates by facsimile), Ashraf said he could not remember. He said he may be wrong in relation to his account of the delivery of the first medical certificate.

From this point onwards, a series of medical certificates were sent by Ashraf to Narregate stating that he was unfit for work. Each medical certificate referred to “a medical condition”, but none of them gave any details of the nature of Ashraf’s condition.

J.Further steps taken by Idameneo, and responses by the Defendants, concerning the ongoing failure to perform

On 20 June 2013, Idameneo sent the Notice to Remedy by letter to the Defendants alleging serious breaches of the Sale Deed and the Practitioner Contract. The letter included the following:

You are in breach of Clause 4.2(b) of the Sale Deed in that you have failed to render medical services at [Narregate] for no less than 50 hours per week, for 48 weeks per calendar year in accordance with your Minimum Hours [Requirement]. [Idameneo]’s records show that from the Commencement Date of 16 July 2012 to 16 June 2013 you should have rendered medical services for a minimum of 2,215 hours. However, you have only rendered medical services for a total of 1,372 giving a shortfall of 843 hours.
You are in further breach of Clause 4.2(b) of the Sale Deed in that you have exceeded the Agreed Absences [ie Maximum Absence Requirement]. From 16 July 2012 to 16 June 2013 you were entitled to 18 days. However, your total absences to date are 80 days. This is in excess of 62 days and over 344% of your Agreed Absences. Even discounting the time you went to Pakistan to visit your sick mother[42] and the recent provision of medical certificates, your Agreed Absences are still 24 days in excess of your annual allowance of 20 days and over 220% of your annual Agreed Absences.
[42]See pars 102-108 above.
You are in breach of Clause 4.2(c)(i)–(ii) of the Sale Deed. [Idameneo]’s records show that from 16 July 2012 to 16 June 2013 your contracted Weekend Hours [Requirement] was 443 hours. However you have only rendered medical services for a total of 303 hours, giving a shortfall of 140 Weekend Hours.

Paragraph 18 of the letter gave Ashraf 7 days in which to remedy the breaches by:
a.[Ashraf] returning to [Narregate] to render medical services in accordance with [Ashraf’s Company] and [Ashraf]’s obligations;
b.agreeing to extend the minimum term of the Sale Deed and [the Practitioner Contract] by a period of 16 Weeks in order to account for the shortfall in hours and excessive absences;
c.agree that if you exceed your Agreed Absences again or fall into material shortfall of Minimum Hours, Evening Hours or Weekend Hours [Requirements] again, [Idameneo] can terminate the Sale Deed and [the Practitioner Contract] with immediate effect; and
d.signing where indicated below to give your undertaking in relation to 18a–c above.

Ashraf acknowledged he received the letter sent dated 20 June 2013. He did not respond to the letter for the period of a week.

On 27 June 2013, Ashraf sent an email to the national doctor relationship administrator for Idameneo. In that email, Ashraf recorded he was still on sick leave and had a certificate in that regard until 8 July 2013. He suggested that by that time he would be in a better position to decide whether or not to come back to work. He then stated that a professional had given the medical certificates for a reason, and that it was not fair for Idameneo to be sending ultimatums. He also asserted that the Notice to Remedy sent on 20 June 2013 was factually incorrect. Ashraf concluded the email by stating he would be in touch when he was feeling better and able to respond to the letter.

On 9 July 2013, Ashraf sent a further email to Idameneo entitled “Shocking practices from a health company”. The addressees to the email included the general manager and the chief clinical officer, both of the medical centres division of Idameneo. The email suggested that Idameneo had Ashraf under surveillance. It made numerous allegations about the conduct of Idameneo. The email then stated:

Therefore, if you want an ongoing headache to subside, I will be requiring a letter addressed to myself and [to a solicitor], saying that you accept my resignation and wish me well in the future.
…
I have had to see my psychiatrist, which you know about, who has had to give me time off for sick leave, because she saw the state I was in, and with me already in a fragile state of mind … you pushed the boat too far. When you push a man to his limits, the consequences can be unforgiving, but the whole incident will remain private, that you can be assured of, unless of course the above scenario should unfortunately befall.
Denial for you is always an option, but evidence never lies, and a lot of damning evidence has been collated in 7 months. I think your men even smiled for the camera!
I expect to hear from you by the end of Wedneday 9th (sic).

Without referring expressly to the email sent on 9 July 2013, on 11 July 2013 Idameneo sent a letter addressed to the Defendants. It referred to the Notice to Remedy sent on 20 June 2013 and asserted that the breaches had not been remedied. Having referred to the medical certificates already provided, it noted, correctly, that the certificates were silent on the nature of Ashraf’s condition. It also stated that Ashraf had failed to provide any information about his health or the basis of his continuing absence. The letter concluded with the following:

You have 7 days from the date of this letter to:
a.contact either the lead independent doctor Dr Overton or Dr John Houston, Chief Clinical officer to discuss your health and to agree a plan for your return to [Narregate]; and
b.agree that as part of your plan to return to [Narregate] you will be assessed by an appropriately qualified medical professional by 30 July 2013.

If [Idameneo] does not hear from you within 7 days and your agreement to the above matters, [Idameneo] will take all available steps under the deeds.

Ashraf did not respond to the letter sent on 11 July 2013.

On 15 July 2013, a further letter was sent to the Defendants. That letter referred to the earlier correspondence; namely, the Notice to Remedy dated 20 June 2013, the letter dated 11 July 2013, Ashraf’s email dated 9 July 2013 and a further medical certificate that had been received by Idameneo on 11 July 2013 (for the period 8 July to 21 July 2013). It informed Ashraf that his email of 9 July 2013 did not alter the position of Idameneo or “the fact that you have failed to remedy” the matters the subject of the Notice to Remedy. The letter asserted that neither Idameneo nor any other company within the Primary Health Care group had engaged in any surveillance of Ashraf. It also recorded that the medical certificate dated 8 July 2013 had written on it:

The doctor suggested I take another 2 weeks sick leave. After this leave, hopefully, I’ll be well enough to return to work.

Having noted what had been written by Ashraf on this medical certificate, the following was stated in the letter:
These statements support an intention to return to [Narregate] in order to comply with your obligations under the Deeds. These statements are inconsistent with the matters set out in your email and your desire to “resign”.
In relation to your request to “resign”, you are not an employee. There is no provision for “resignation” under the Deeds. [Idameneo] does not accept your purported resignation and the Deeds remain on foot.

Notwithstanding the statement by Ashraf that he was considering returning to work at Narregate, there was no real prospect of this occurring given his state of health. A further medical certificate, dated 22 July 2013, was provided by Ashraf. This certificate contained no comment from Ashraf about his ability to return to work at the end of the 2 week period covered by the certificate. In any event, the evidence before the court clearly demonstrated that Ashraf was mentally very unwell. In addition to the allergies he was suffering from (about which there is no clear evidence as to the degree of severity), Ashraf was suffering from anxiety, paranoia and depression.

Whether or not Idameneo was carrying out surveillance of Ashraf,[43] this paranoia and depression resulted in extreme behaviour. At his apartment, Ashraf taped up the sprinklers because he thought cameras had been installed, and he “ripped out” the electrical sockets. Ashraf was very scared. He suffered panic attacks. His extreme paranoia (as he described it) resulted in him living in his apartment in darkness, and constantly engaging in activities to try and “get away from being followed”. This conduct also included hiding behind cars, including his own, which was in a lock‑up cage in the apartment building he used to live in. To adopt Ashraf’s own language, he was doing “all sorts of crazy things”.
[43]An email dated 26 July 2013 between various Idameneo representatives strongly suggests some surveillance of Ashraf was being carried out: court book 3/645.

The fact that Ashraf’s condition was serious and ongoing is demonstrated by events shortly after the relationship between Ashraf and Idameneo ceased. In September 2013, Ashraf secured a job as a medical practitioner at a practice in Werribee. It only lasted a short time. Not only did Ashraf say he was not interested in his patients, but he said that he thought that he was being spied on by them. He said that on 1 day alone, 8 patients complained of his conduct. As a result, he was dismissed. He has not been engaged as a medical practitioner since that time. Ashraf gave evidence that, with respect to his current state of mind, he was still healing. He said he expected to remain “a little bit paranoid” for the rest of his life.

Returning to events concerning Idameneo, on 2 August 2013, Idameneo sent a notice of termination. That notice referred to, amongst other things, the Notice to Remedy sent on 20 June 2013. It also stated that the Defendants had failed to remedy the breaches referred to in the Notice to Remedy. After referring to further matters, the letter purported to terminate the Sale Deed and the Practitioner Contract.

By 2 August 2013, Ashraf had continuously and substantially failed to attend at Narregate in accordance with Ashraf’s Company’s contractual obligations. As may be seen from annexures “A” and “B”, by this point in time not only had Ashraf failed to attend complete shifts as rostered on 41 occasions, he had also failed to attend at work on rostered days 106 times. Allowing for approximately 21 days pursuant to clause 4.2(b) of the Sale Deed,[44] this meant that Ashraf had failed to attend at all on 85 days (or perhaps 73 days[45]) in a period of approximately 12½ months.
[44]See par 16 above. It is not necessary to determine at this point whether the financial year ending 30 June 2014 needs to be considered separately from the previous financial year, and whether a calculation recommences at zero from 1 July 2013 for the purpose of assessing any breach of the Maximum Absence Requirement.
[45]Whether or not the absence of 85 days ought to be reduced by 12 days to allow for the time that Ashraf visited his sick mother in Pakistan (with the acquiescence of Idameneo) will need to be considered in any assessment of damages: see par 108 above.

The Defendants did not respond directly to the notice of termination. It seems that initially the notice of termination was ignored. Ashraf provided a further medical certificate, dated 5 August 2013, for a period up to and including 18 August 2013. That medical certificate included a note from Ashraf to the effect that he expected to be absent from work for a further month “as per [the] doctor I am seeing”.

Ashraf did not attend for work at Narregate ever again.

K. Breaches of contract

Idameneo alleged that there were breaches of the Minimum Hours Requirement, the Weekend Hours Requirement, the Evening Hours Requirement and also the Maximum Absence Requirement. In closing submissions, Idameneo focused upon the Minimum Hours Requirement and the Maximum Absence Requirement.

K.1 Minimum Hours Requirement

The summary set out in paragraph 125 above shows that there was a substantial and ongoing breach of the Minimum Hours Requirement. Given the substantial discrepancy between the 50 hours required to meet the Minimum Hours Requirement and the amount of hours worked by Ashraf from week to week, many weeks of attendance being between nil and less than half the stipulated 50 hours, there can be no issue that, prima facie, the Minimum Hours Requirement was not met and the Sale Deed was breached in that regard.

The defences to such breaches concern a question of construction as well as factual questions.

Dealing first with the issue of construction, the contention that Ashraf was not required to work 50 hours per week, but only such hours as were “mutually agreed” because of clause 5.1(b) of the Practitioner Deed, is rejected.[46] Implicit in this defence is the assumption that the terms of the Practitioner Contract are to be read and construed separately from the other contracts entered into on 29 June 2012. Indeed, as referred to in paragraph 29 above, the defence expressly alleged that Ashraf’s Company’s obligations for the rendering of medical services were “governed by the Practitioner [Contract], not the Sale Deed”. The defence went so far as to allege that there was no Minimum Hours Requirement, or Evening Hours Requirement or a Weekend Hours Requirement, unless Ashraf’s Company agreed to such hours under the Practitioner Contract.
[46]See par 29 above.

Each of the Sale Deed and the Practitioner Contract contained a clause entitled “Definitions and interpretation”. There was nothing in those clauses to suggest the contracts should be read separately. The provisions of the contracts, including the Performance Guarantee, were expressly interrelated. In these circumstances, a proper approach to the question of construction is to read together the whole of each of the documents encapsulating the agreement between the parties. Essentially, the 3 agreements ought to be construed as 1 entire indivisible agreement.[47]
[47]See, for example, EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd (2010) 41 WAR 23, 52–53 [104] (Buss JA, with whom Owen and Newnes JJA agreed); Gardiner v Agricultural & Rural Finance Pty Ltd [2007] NSWCA 235, [23] (Spigelman CJ, agreeing with Basten JA); Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133, 144.3 (Isaacs J, with whom Rich J agreed) and the cases there cited, 139.2 (Knox CJ sim, also with whom Rich J agreed).

Clause 5.1(b) of the Practitioner Contract may be read entirely consistently with clause 4.2(b) of the Sale Deed. This is achieved if clause 5.1(b) is understood and construed to mean that the parties were required to mutually agree when the 50 hours comprising the Minimum Hours Requirement were to be performed within the trading hours of Narregate (and consistent with the other Working Requirements). A like observation may be made with respect to the Evening Hours Requirement and the Weekend Hours Requirement. Further, it is not insignificant that the obligations contained in clause 4.2 of the Sale Deed were expressly required to be provided “under the Practitioner Contract”.

To read clause 5.1(b) of the Practitioner Contract to mean that if, for example, Ashraf only agreed to work on Monday mornings for 4 hours per week, there was no obligation to work beyond those 4 hours, would completely undermine clause 4.2(b) of the Sale Deed. On such a construction, clause 4.2(b) would have no meaningful operation or effect. Ordinarily,[48] such a construction should be avoided. [49]
[48]Cf AFC Holdings Pty Ltd v Shiprock Holdings Pty Ltd [2010] NSWSC 985, [13] (Ball J).
[49]See, for example, Bakers Investment Group (Australia) Pty Ltd v Caason Investments Pty Ltd (No 2) [2014] VSC 598, [104] fn 50, and the cases there cited. See also, Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109.4 (Gibbs J, dissenting).

Turning to the factual issues, the facts set out above do not support a finding that Idameneo agreed with Ashraf to reduce the Minimum Hours Requirement, or materially alter Ashraf’s obligations, simply by acknowledging Ashraf’s notification that he would not attend at work on a particular day, or for some hours on a particular day. Even ignoring clauses 13 of the Sale Deed and of the Practitioner Contract,[50] the mere fact that on occasions Idameneo did not protest to Ashraf about his absence cannot be properly understood as agreeing to any variation. This is particularly so in light of the discussions had between Ashraf and Overton in or about September or October 2012,[51] and the further discussions held between Ashraf and Idameneo representatives in November 2012.[52] Equally, the correspondence forwarded to Ashraf in 2013[53] made it abundantly clear that, far from agreeing with Ashraf’s absences and tardiness, Idameneo was complaining about his conduct, albeit while trying to resolve the issue.
[50]See pars 16 and 21 above.
[51]See par 63 above.
[52]See pars 69-72, 74-76 and 88-92 above.
[53]See pars 99, 113, 117 and 119 above.

Even more fundamentally, the facts demonstrate that Ashraf did agree to work 50 hours per week, on evening shifts.[54] With possible minor exceptions,[55] for the vast majority of the time Ashraf worked at Narregate, he sought no change to the hours agreed to at the outset of the relationship.
[54]See par 44 above.
[55]See par 65 above.

As to the allegations in the defence concerning duties of good faith, because of the ongoing agreement to the roster these allegations did not take the matter any further for the period up to April 2013. Then followed a period when Ashraf was away in Pakistan. Finally, to the extent that the allegations relate to events after Ashraf became seriously incapacitated and unable to attend at work altogether, the contractual relationship ceased to remain on foot for the reasons set out in paragraphs 152 to 159 below.[56] In short, any suggestion of an absence of good faith on the part of Idameneo is without substance.
[56]The allegations concerning frustration made by Idameneo were originally pleaded in its reply, but then removed to be included in the statement of claim as the basis for a restitutionary claim which is now no longer sought.

K.2 Maximum Absence Requirement

For the reasons set out in paragraphs 127 to 136 above, there was also a breach by Ashraf’s Company of the Maximum Absence Requirement. The figures in annexures “A” and “B” demonstrate that Ashraf failed to attend far in excess of the approximately 4 weeks allowed.[57] Also for the reasons set out above,[58] save possibly for the time Ashraf visited his sick mother in Pakistan,[59] there was no agreement between the parties which extended the contractually agreed period.
[57]See also par 124 above.
[58]See pars 69-76 and 88-96 above.
[59]See par 108 above.

K.3 Other breaches

The evidence also demonstrates that Ashraf’s Company failed to act in accordance with its obligation in clause 4.2(d) of the Sale Deed, namely to procure Ashraf to act in a harmonious way with other practitioners and staff. His continual non‑attendance clearly caused disharmony with the conduct of the medical centre conducted at Narregate. His repeated late notice, or even absence of notice, of unscheduled absences created additional work and pressure on other practitioners, which was not insignificant.[60]
[60]That is not to say that the other practitioners could not meet that additional workload, but such issues are for consideration as part of any assessment of Idameneo’s alleged loss.

This finding does not reflect in any way on the manner in which Ashraf dealt with his fellow practitioners and the staff at Narregate. It appears that at all times Ashraf was courteous and polite to such people.

Clause 4.2(e) of the Sale Deed, requiring Ashraf’s Company to procure Ashraf to use best endeavours to expand the turnover, profitability, quality and image of the services provided at Narregate, was also breached. On numerous occasions, the excuses given by Ashraf for his absences or tardiness were far from satisfactory.[61] In my view, the best endeavours clause required Ashraf’s Company to procure Ashraf, generally speaking, to get to work on time, absent some emergency or unforeseen event. His evidence concerning travelling to work and his reliance upon his home duties, while living in an apartment alone, was demonstrative of a failure to use best endeavours as required.[62]
[61]See pars 54-60 above.
[62]See pars 57-58 above.

Because of the interrelationship between the Sale Deed, the Practitioner Contract and the Performance Guarantee, the breaches referred to above amount to a breach of each of those agreements. By failing to procure Ashraf to perform, Ashraf’s Company breached both the Sale Deed and the Practitioner Contract. In turn, although somewhat circular, Ashraf breached the Performance Guarantee by failing to procure that Ashraf’s Company carried out its obligations under the Practitioner Contract.

In light of the above findings, it is unnecessary to consider whether there was also a breach of the Weekend Hours Requirement and the Evening Hours Requirement. The breaches as found above establish that the case of Idameneo for breach of contract has been made out.

For completeness, I note that Idameneo made no submissions in closing in support of the allegation that Ashraf’s Company had breached clause 6.1(c) of the Sale Deed because the Defendants had failed to disclose anything about Ashraf’s health on or before 29 June 2012. There was no evidence that could support this allegation.[63]

L. Estoppel defences

[63]See pars 72-73 above.

In large part, the allegations based on estoppel in the defence are directly met by the findings that Ashraf agreed, and continued to agree, to work 50 hours per week until around 10 April 2013.[64] After his letter of that date, there was no agreement that superseded the previously “mutually agreed” position. Further, there was no conduct after that point in time which might have reasonably given rise to any assumption on the part of Ashraf that he was not required to comply with the Minimum Hours Requirement.
[64]See pars 65, 77-85, 95, 96 and 100-101 above.

Even absent the finding of an ongoing agreement by Ashraf to the 50 hour working week as originally agreed, there are further fundamental problems with this aspect of the defence. With respect to the Minimum Hours Requirement, a series of allegations were made in the defence, seeking to establish an estoppel, which are simply not supported on the evidence.

First, it was alleged that the Defendants assumed that Idameneo would not require Ashraf to render medical services to make up the hours that were not worked because of his incapacity to work due to illness, injury or family emergency. There is no evidence to support this assumption. On the contrary, the evidence shows that Ashraf thought he should make some attempt to make up the hours lost. He even gave evidence of his attempts to do so from time to time. Further, when he requested a reduction in his working hours from 50 hours to 42 hours per week on 10 April 2013, he did so on the basis that it would be coupled with “an extension on [Ashraf’s] contract”. This appears to be an acknowledgment of the obligation to provide the total requisite number of hours of service.

Secondly, it was alleged that Idameneo induced the Defendants to adopt the assumption referred to in the previous paragraph. There is no basis for finding such an inducement, particularly when the repeated representations made by Idameneo[65] were to the contrary of the alleged assumption.
[65]See fnn 51-53 above.

Thirdly, an allegation to the effect that Idameneo knew of the reliance upon the alleged assumption, but did not purport to impose the Minimum Hours Requirement until 20 June 2013, is without foundation. Again, the evidence shows that Idameneo repeatedly reminded Ashraf of the Minimum Hours Requirement, and the Defendants’ obligation to meet it.

Fourthly, the allegation that Idameneo engaged in unconscionable conduct, by not seeking compliance with the Minimum Hours Requirement until 20 June 2013 and then seeking to resile from that position, is also without foundation. Again, it is abundantly clear that compliance was sought well before 20 June 2013, and over an extended period of time.

Like allegations in the defence are made in relation to the Maximum Absences Requirement. The responses set out above with respect to the Minimum Hours Requirement are equally applicable to the allegations concerning the Maximum Absences Requirement.

In summary, the evidence does not support any case based upon allegations to the effect that Idameneo induced the Defendants to assume that they were not required to comply with their contractual obligations.

M. Fundamental change in Ashraf’s situation and impossibility of performance

Before considering whether the breaches of Ashraf were continuing so that the Notice to Remedy sent 20 June 2013 could be relied upon subsequently, or whether the breaches were of such a nature as to entitle Idameneo to terminate as of right, it is necessary to consider whether or not the contractual relationship between the parties remained on foot at the time of the purported termination on 2 August 2013.

As set out above,[66] Idameneo’s pleaded claim included a further or alternative basis for relief, namely that the illnesses of Ashraf prevented him from attending at Narregate during his rostered shifts. Although no relief is now sought by reason of such allegations, it remained a live issue at trial whether or not the contractual relationship between the parties had been frustrated, and therefore discharged, by reason of the illness of Ashraf.
[66]See par 28 above.

Frustration of a contract is not lightly found. By reference to the contractual relationship in this case, it is plain[67] that a temporary illness or injury would not give rise to frustration. Further, the fact that hardship may have been caused to Ashraf by reason of the continuation of the contractual relationship would not, of itself, establish frustration.[68]
[67]See, for example, Ringstad v Gollin & Co Pty Ltd (1924) 35 CLR 303, 315.3 (Isaacs J), 317.2 (Starke J, with whom Knox CJ agreed).
[68]Scanlan’s New Neon Ltd v Tooheys Ltd (1943) 67 CLR 169, 231.9 (Williams J).

The nature of the services to be provided in this case is important. The obligation upon Ashraf’s Company was, amongst other things, to procure Ashraf to provide medical services to the public at Narregate. It was not possible for Ashraf’s Company to meet its contractual obligations other than by procuring the services of Ashraf. Clearly, it would be most unsatisfactory, not only to the public, but also to Idameneo’s business, for a medical practitioner to be treating patients and providing other medical services if the medical practitioner was seriously mentally unwell. Such a scenario would also be totally unsatisfactory for Ashraf. In my view, even if, contrary to the facts of this case, Ashraf had been willing to come to work between mid May and early August 2013, but had a serious mental illness, which was ongoing and not temporary, then it is likely that the contractual relationship between the parties would have been frustrated. The position is even clearer, in the circumstances of this case, where Ashraf was mentally unwell to the extent that he could not even attend at Narregate.

In the circumstances, I find that the allegation made by Idameneo, that the performance of the Sale Deed had become impossible or was otherwise frustrated and therefore discharged, has been made out. A like position must follow in relation to the other 2 agreements. Each of the contracts were interlinked and interdependent. It must follow that each of the contracts was frustrated.

In this regard, it is significant that the relationship between Ashraf and Idameneo was not one of employee and employer.[69] The Practitioner Contract was only between Idameneo and Ashraf’s Company. The arrangement reflected in the contractual documents was that the services were to be provided by Ashraf’s Company to Idameneo, with Ashraf’s Company agreeing to procure the services of Ashraf. Accordingly, authorities concerned with serious or permanent illness of an employee (that stand for the proposition that the fact of such illness, alone, may not give rise to an automatic termination of a contract by reason of frustration) are not on point.[70] There was no submission made that this line of authority was relevant to the issues at hand.
[69]Clauses 11 of each of the Sale Deed and Practitioner Contract expressly provided that none of Idameneo, Ashraf’s Company or Ashraf were partners and that Ashraf was not an employee of Idameneo. It was also provided that neither of Ashraf’s Company or Ashraf, in rendering medical services and doing other things, were doing so as a servant or agent or otherwise on behalf of Idameneo.
[70]See, for example, Finch v Sayers [1976] 2 NSWLR 540, 547B–548B, 551C–552A, 558C–E (Wootten J); cf Chapman v Taylor [2004] NSWCA 456, [8]–[9], [29]–[30] and [35] (Hodgson JA, with whom Beazley and Tobias JJA agreed).

Further, not only the contracts, but also the subsequent conduct of Idameneo, demonstrates that the contracts were not being treated as contracts that gave rise to an employment relationship,[71] notwithstanding any possible (incorrect) assertions to the contrary.[72]
[71]See par 119 above. The letter dated 6 May 2013 also refuted any employment relationship: see fn 36 above.
[72]See par 105 above.

The allegation of Idameneo was that such frustration arose by no later than 16 July 2013.[73] It is highly likely that this allegation is correct. However, I note that the medical certificate dated 8 July 2013 contained a suggestion that Ashraf was contemplating returning to work 2 weeks later. In my view, given the serious issues with the health of Ashraf at that time, the message as conveyed by Ashraf that he entertained the possibility of returning would have been unlikely to make any difference to whether or not the contractual relationship was frustrated. But if I am wrong about that, I find that, from on or about 22 July 2013, the contract was frustrated by reason that Ashraf continued to remain unwell, and from that point in time he conveyed no intention to return to work.
[73]It seems this date was chosen on the pleadings because 16 July 2012 was the Commencement Date.

Accordingly, either sometime on or after 17 May 2013 when Ashraf ceased to attend at Narregate and on or before 16 July 2013, or on or shortly after 22 July 2013, but before 2 August 2013, the contractual relationship was frustrated. It follows that, on either scenario, the contractual relationship was frustrated before 2 August 2013 when Idameneo purported to terminate the contractual relationship.

N. Consequences of frustration

By reason of the findings made in paragraphs 152 to 160 above, the notice of termination sent on 2 August 2013 was of no effect. The frustration of the contractual relationship automatically terminates the contracts in question.[74] Accordingly, at the time the notice of termination was sent, the contract was no longer on foot.
[74]Aurel Forras Pty Ltd v Graham Karp Developments Pty Ltd [1975] VR 202, 206.9–207.3 (Menhennitt J).

The result of the termination of the contractual relationship by frustration means that any accrued rights Idameneo had up until the time of termination remain unaffected and enforceable. These rights include the right to claim damages for the breaches that had occurred prior to the point of frustration.[75]

O. Further conduct of the proceeding

[75]Baltic Shipping Co v Dillon (1993) 176 CLR 344, 356.2 (Mason CJ) and the cases there cited.

The issues of quantum in this case are potentially complex. The relevant evidence is extensive. In the unusual circumstances of this case, and mindful of the overarching obligations under the Civil Procedure Act 2010 (Cth),[76] it was in the interests of the parties that I provide judgment on liability as soon as possible.
[76]Section 7(1) provides: “The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute”.

In light of the position adopted by Idameneo by way of its open offer,[77] and the findings made above, it is desirable that this proceeding be referred to mediation promptly. Arrangements have been put in place for a court‑appointed mediator to conduct such a mediation forthwith.[78]
[77]See par 38 above.
[78]The court has the power to refer the proceeding to mediation with or without the agreement of the parties: Civil Procedure Act, s 7(2)(c)(ii), 66(1); Supreme Court (General Civil Procedure) Rules 2005 (Vic), r 50.07(1).

If the proceeding is not resolved at mediation, I will invite the parties to make further submissions upon the issue of the precise point in time at which the contractual relationship was frustrated. To date, I have received no specific submissions on this issue. Once those submissions have been received, if the matter remains unresolved, the court will determine the quantum of Idameneo’s claim for damages.

---

FOOTNOTE:

By consent, on 10 July 2015, the court ordered that:
1.        The Defendants pay the plaintiff the sum of $100,000.
2.        There is no order as to costs.
3.        The proceeding is otherwise dismissed.
Upon making these orders by consent, the court recorded in other matters:
1.The trial of this proceeding was heard before the Honourable Justice Elliott on 15, 17, 18, 19 (for mention), 22, 23 and 25 June 2015 on all issues.

2. His Honour delivered judgment on issues of liability only on 3 July 2015.
3.Following delivery of judgment, his Honour referred the proceeding to mediation before Judicial Registrar Hetyey forthwith.

4. The mediation took place on 3 July 2015.
5.On 8 July 2015, the court was informed, by email, from the plaintiff’s solicitor, that the parties had reached agreement to fully resolve the issues the subject of the proceeding and that the parties each consented to the making of the orders set out [above].
6.The email further stated that there would be confidential terms of settlement between the parties, which included provisions relating to the ability of the plaintiff to enforce the orders.

Annexure “A” – Total days absent

1 20 July 2012 47 3 May 2013

2 26 July 2012 48 4 May 2013

3 10 August 2012 49 5 May 2013

4 20 August 2012 50 6 May 2013

5 21 August 2012 51 7 May 2013

6 23 August 2012 52 17 May 2013

7 24 August 2012 53 18 May 2013

8 6 September 2012 54 19 May 2013

9 21 September 2012 55 20 May 2013

10 5 October 2012 56 21 May 2013

11 6 October 2012 57 23 May 2013

12 11 October 2012 58 24 May 2013

13 18 October 2012 59 27 May 2013

14 23 October 2012 60 28 May 2013

15 25 October 2012 61 30 May 2013

16 26 October 2012 62 31 May 2013

17 1 November 2012 63 1 June 2013

18 8 November 2012 64 2 June 2013

19 12 November 2012 65 3 June 2013

20 13 November 2012 66 4 June 2013

21 22 November 2012 67 6 June 2013

22 23 November 2012 68 7 June 2013

23 24 November 2012 69 10 June 2013

24 6 December 2012 70 11 June 2013

25 8 January 2013 71 13 June 2013

26 27 January 2013 72 14 June 2013

27 8 February 2013 73 15 June 2013

28 10 February 2013 74 17 June 2013

29 18 February 2013 75 18 June 2013

30 19 February 2013 76 20 June 2013

31 21 February 2013 77 21 June 2013

32 4 March 2013 78 24 June 2013

33 11 March 2013 79 25 June 2013

34 22 March 2013 80 27 June 2013

35 2 April 2013 81 28 June 2013

36 7 April 2013 82 29 June 2013

37 9 April 2013 83 30 June 2013

38 19 April 2013 84 1 July 2013

39 20 April 2013 85 2 July 2013

40 21 April 2013 86 4 July 2013

41 22 April 2013 87 5 July 2013

42 23 April 2013 88 8 July 2013

43 26 April 2013 89 9 July 2013

44 29 April 2013 90 11 July 2013

45 30 April 2013 91 12 July 2013

46 2 May 2013 92 13 July 2013

93 14 July 2013

94 15 July 2013

95 16 July 2013

96 19 July 2013

97 22 July 2013

98 23 July 2013

99 25 July 2013

100 26 July 2013

101 27 July 2013

102 28 July 2013

103 29 July 2013

104 30 July 2013

105 1 August 2013

106 2 August 2013

Annexure “B” - Incomplete hours on days attended

No Date Hours recorded Assumed hours worked

1 24 July 2012 0.88 1.88

2 4 September 2012 6.93 7.93

3 11 September 2012 6.80 7.80

4 17 September 2012 6.15 7.15

5 30 September 2012 4.33 5.33

6 1 October 2012 6.53 7.53

7 4 October 2012 1.90 2.90

8 9 October 2012 6.52 7.52

9 12 October 2012 5.48 6.48

10 22 October 2012 1.60 2.60

11 9 November 2012 2.65 3.65

12 16 November 2012 1.12 2.12

13 30 November 2012 5.82 6.82

14 3 December 2012 6.13 7.13

15 18 December 2012 2.48 3.48

16 25 December 2012 6.42 7.42

17 26 December 2012 6.90 7.90

18 27 December 2012 5.90 6.90

19 28 December 2012 6.55 7.55

20 29 December 2012 6.88 7.88

21 5 January 2013 5.53 6.53

22 6 January 2013 0.92 1.92

23 17 January 2013 6.22 7.22

24 22 January 2013 6.87 7.87

25 28 January 2013 2.92 3.92

26 29 January 2013 4.62 5.62

27 1 February 2013 6.35 7.35

28 4 February 2013 5.97 6.97

29 6 February 2013 2.10 3.10

30 13 February 2013 4.23 5.23

31 15 February 2013 3.83 4.83

32 17 February 2013 4.33 5.33

33 26 February 2013 6.73 7.73

34 2 March 2013 4.83 5.83

35 5 March 2013 6.65 7.65

36 9 March 2013 6.85 7.85

37 28 March 2013 5.33 6.33

38 8 April 2013 1.00 2.00

39 16 April 2013 2.53 3.53

40 20 April 2013 0.12 1.12

41 20 June 2013 0.18 1.18

Total 186.08 227.08

Shortfall[79] 223.92 182.92
[79]This shortfall is calculated on the basis that Ashraf was required to work 10 hours on each of these 41 days, and therefore the total number of hours he should have worked across these 41 days is 410 hours.

1	20 July 2012	47	3 May 2013
2	26 July 2012	48	4 May 2013
3	10 August 2012	49	5 May 2013
4	20 August 2012	50	6 May 2013
5	21 August 2012	51	7 May 2013
6	23 August 2012	52	17 May 2013
7	24 August 2012	53	18 May 2013
8	6 September 2012	54	19 May 2013
9	21 September 2012	55	20 May 2013
10	5 October 2012	56	21 May 2013
11	6 October 2012	57	23 May 2013
12	11 October 2012	58	24 May 2013
13	18 October 2012	59	27 May 2013
14	23 October 2012	60	28 May 2013
15	25 October 2012	61	30 May 2013
16	26 October 2012	62	31 May 2013
17	1 November 2012	63	1 June 2013
18	8 November 2012	64	2 June 2013
19	12 November 2012	65	3 June 2013
20	13 November 2012	66	4 June 2013
21	22 November 2012	67	6 June 2013
22	23 November 2012	68	7 June 2013
23	24 November 2012	69	10 June 2013
24	6 December 2012	70	11 June 2013
25	8 January 2013	71	13 June 2013
26	27 January 2013	72	14 June 2013
27	8 February 2013	73	15 June 2013
28	10 February 2013	74	17 June 2013
29	18 February 2013	75	18 June 2013
30	19 February 2013	76	20 June 2013
31	21 February 2013	77	21 June 2013
32	4 March 2013	78	24 June 2013
33	11 March 2013	79	25 June 2013
34	22 March 2013	80	27 June 2013
35	2 April 2013	81	28 June 2013
36	7 April 2013	82	29 June 2013
37	9 April 2013	83	30 June 2013
38	19 April 2013	84	1 July 2013
39	20 April 2013	85	2 July 2013
40	21 April 2013	86	4 July 2013
41	22 April 2013	87	5 July 2013
42	23 April 2013	88	8 July 2013
43	26 April 2013	89	9 July 2013
44	29 April 2013	90	11 July 2013
45	30 April 2013	91	12 July 2013
46	2 May 2013	92	13 July 2013
93	14 July 2013
94	15 July 2013
95	16 July 2013
96	19 July 2013
97	22 July 2013
98	23 July 2013
99	25 July 2013
100	26 July 2013
101	27 July 2013
102	28 July 2013
103	29 July 2013
104	30 July 2013
105	1 August 2013
106	2 August 2013

No	Date	Hours recorded	Assumed hours worked
1	24 July 2012	0.88	1.88
2	4 September 2012	6.93	7.93
3	11 September 2012	6.80	7.80
4	17 September 2012	6.15	7.15
5	30 September 2012	4.33	5.33
6	1 October 2012	6.53	7.53
7	4 October 2012	1.90	2.90
8	9 October 2012	6.52	7.52
9	12 October 2012	5.48	6.48
10	22 October 2012	1.60	2.60
11	9 November 2012	2.65	3.65
12	16 November 2012	1.12	2.12
13	30 November 2012	5.82	6.82
14	3 December 2012	6.13	7.13
15	18 December 2012	2.48	3.48
16	25 December 2012	6.42	7.42
17	26 December 2012	6.90	7.90
18	27 December 2012	5.90	6.90
19	28 December 2012	6.55	7.55
20	29 December 2012	6.88	7.88
21	5 January 2013	5.53	6.53
22	6 January 2013	0.92	1.92
23	17 January 2013	6.22	7.22
24	22 January 2013	6.87	7.87
25	28 January 2013	2.92	3.92
26	29 January 2013	4.62	5.62
27	1 February 2013	6.35	7.35
28	4 February 2013	5.97	6.97
29	6 February 2013	2.10	3.10
30	13 February 2013	4.23	5.23
31	15 February 2013	3.83	4.83
32	17 February 2013	4.33	5.33
33	26 February 2013	6.73	7.73
34	2 March 2013	4.83	5.83
35	5 March 2013	6.65	7.65
36	9 March 2013	6.85	7.85
37	28 March 2013	5.33	6.33
38	8 April 2013	1.00	2.00
39	16 April 2013	2.53	3.53
40	20 April 2013	0.12	1.12
41	20 June 2013	0.18	1.18
Total	186.08	227.08
Shortfall[79]	223.92	182.92

[2015] VSC 317

3 JULY 2015