Mann v Capital Territory Health Commission

[1981] FCA 180

CATCHWORDS

Contract of Employment - Action by S t a f f Surgeon

Against Hospi ta l - Whether Agreement to P rov ide

Adequate S u i t a b l e Work - Contrac t Par t ly Wri t ten and

P a r t l y Oral - Construct ion - Whether Term I m p l i c i t o r

t o be Implied - Consequences of Contract S t i l l i n

Force - S a l a r y S t i l l Being Paid - Damages.

ARNOLD MANN v THE CAPITAL TERRITORY HEALTH COMMISSION

No. ACT G41 of 1980

Fox, Sheppard and Kelly JJ

,

Canberra.

2 3 OCT 1981

\.	' :
.

IN THE FEDERAL COURT OF AUSTRALIA	)
1
J
AUSTRALIAN CAPITAL TERRITORY	1
) No. ACT G41 of 1980

REGISTKY	DISTRICT	1
1

DIVISION GENERAL 1

ON APPEAL FROM THE SUPREME COURT

OF THE mSTRALIAN C A m A L TERRITORY

ARNOLD MANN

Appellant

THE CAPITAL TERRITORY HEALTH

ION

Respondent

O R D E R

JUDGES MAKING ORDER: Fox and Kelly JJ

Canberra

MADE:

WHERE

DATE OF ORDER: 2 3 OCT 1981

THE COURT ORDERS THAT:

1.	The appeal be dismissed.
2 .	The appellant pay the respondent's costs.

IN THE FEDERAL COURT OF AUSTRALIA )

1

AUSTRALIAN CAPITAL TERRITORY 2

DISTRICT REGISTRY No. ACT G41 of 1980

,

J

GENERAL DIVISION 1

ON APPEAL FROM THE SUPREME COURT

OF THE m R A L I A N CAPITAL T E R m RY

ARNOLD MANN

Appellant

THE CAPITAL TERRITORY HEALTH

SION

Respondent

Coram: Fox, Sheppard and Kelly JJ

Canberra. 2 3 OCT 1981

REASONS FOR JUDGMENT

FOX and KELLY JJ:

This is an appeal from the Supreme Court of

the Australian Capital Territory (Connor J). The

appellant i s a salaried senior specialist general surgeon

employed by the respondent. He sued his employer for a

breach of the contract of employment. The learned trial

judge found that it was an implied term of the contract

that "the defendant would furnish the plaintiff with

surgical work of a quantity and kind suitable for a senior

and experienced general surgeon". The particular

- 2 -

con t rac tua l t e rm re l i ed upon was one of several a l leged

i n the s ta tement of c la im, but i n t h i s a p p e a l t h e a p p e l l a n t

has sought only to support that found i n h i s f avour by the

1 udge .

His Honour then considered a number o f f u r t h e r

ques t ions . He expressed the inqui ry as fo l lows:

“The f i r s t ques t ion is whether the work t h e

p l a i n t i f f i s now doing i s s u r g i c a l work of

a k ind and quan t i ty su i t ab le fo r a senior and

experienced general surgeon. If n o t , t h e

second question arises namely whether that

s t a t e o f a f f a i r s c a n be l a i d at the door of

the defendant .”

He found the evidence on the f i rs t q u e s t i o n a l l one way, i n

favour o f the appl icant ‘s case . He then expressed the

c ruc ia l ques t ion , as he descr ibed i t , a s fo l lows :

”The c r u c i a l q u e s t i o n , t h e r e f o r e , i s whether

t he de fendan t has f a i l ed to fu rn i sh the

p l a i n t i f f w i t h s u c h work.”

His conclusion was as fol lows:

“ I t 1s f o r t h e p l a i n t i f f t o p e r s u a d e me

t h a t some act ion of the defendant has

amounted t o a f a i l u r e t o p r o v i d e him with

s u r g i c a l work of a kind and quant l ty

s u i t a b l e f o r a senior and experienced

general surgeon. Because of the other

m a t t e r s t o which I have re fer red I do not

f e e l any a c t u a l p e r s u a s i o n t h a t t h i s i s

S O . I t i s p o s s i b l e t h a t some ac t ion of

the defendant i s r e s p o n s i b l e i n p a r t f o r

- 3 -

t h e f a l l i n t h e p l a i n t i f f ' s work. I

th ink it i s e q u a l l y p o s s i b l e t h a t the

o t h e r f a c t o r s , which cannot be laid a t

the door o f the defendant, have been

r e spons ib l e fo r t he whole of t h a t f a l l .

This be ing the case , I f i n d t h a t t h e

p la in t i f f has not d i scharged the onus of

proof and there w i l l be judgment f o r t h e

defendant."

I t was submitted by the appe l l an t t ha t hav ing

found the implied term which he did, the learned judge was

in e r ror in proceeding to cons ider whether non-compl iance was a t t r i b u t a b l e t o the respondent . If the judge meant

by the way a b s o l u t e l i a b i l i t y in which he expressed the t e n t h a t t h e r e was an

upon i t t o e n s u r e t h a t t h e work was

provided the submission would undoubtedly be correct. The

remaining questions were breach and damage, and there

could be l i t t l e doub t t ha t a breach had been established of

such a term. A closer examinat ion of the judgment dis-

c l o s e s however tha t h i s Honour ' s v iew was t h a t so f a r a s

conce rned con t r ac tua l r e spons ib i l i t y , t he Commission was t o

furnish the work, so far a s it was a b l e t o do so . More

p rec i se ly , t he t e rm was the nega t ive of the ques t ion

f ina l ly posed , namely whether some act ion of the defendant

had amounted t o a f a i l u r e t o p r o v i d e ( t h e a p p l i c a n t ) w i t h

s u r g i c a l work of a k ind and quan t i ty su i t ab le fo r a s e n i o r

and experienced general surgeon. He had considered this

m a t t e r a t some l e n g t h , and i f t he re be e r ro r , i t was i n t h e

way he f i rs t expressed the implied term, r a t h e r t h a n i n

fol lowing the well accepted precepts of cont rac t law.

- 4 -

We are therefore of the opinion that the appel-

lant has not established an error in the Judgment entitling

him to succeed. He is however entitled to ask this Court

to come to a different conclusion, favourable to himself.

We are ourselves unable to find that there was a

term in the contract	of employment in	o r to the effect	of
that relied on.

The contract was partly written and partly oral. not signed. At a time of a change in policy, when staff specialists were being recruited for newly created positions, the Board, which was the predecessor of the respondent	By far the greater part was in writing. The writing was appellant answered an advertisement, and was told by letter
dated 1 4 August 1 9 7 4 from the Chairman of the Board, Dr.
Wells, that he had been placed on a short list. A copy of
the general conditions applicable to the specialist
positions was enclosed with the letter. An earlier document
giving information about the "Hospital Service Scheme" had been distributed and the appellant had a copy. He was thereafter interviewed by a panel in Melbourne, and by
telephone was advised on 5 September (confirmed by letter
the following day) that he was offered the position. At the request of the appellant, he and Dr. Wells had a l ong
discussion about the appointment on 11 September 1974 . The
appellant was concerned, inter alia, to see how the appointment would operate in the changing scene; the surgical work which would be undertaken at the Canberra

- 5 -

hospital (and at the Woden hospital, when it opened for

surgery), the number of salaried appointments which would

be made, and the amount of work which would be available

to the appellant. Although the appellant gives a more

detailed account of the conversation, his account is for

the most part consistent with that of Dr. Wells. The

learned judge made a finding on this matter:

"I accept the plaintiff's evidence, which is

not contradicted by Dr. Wells, that he

sought and obtained from the latter an

assurance that private general surgeons

would not be given the right to treat un-

insured patients and to be remunerated for

it except in accordance with need and that

this assurance played an important part in

the plaintiff's decision to accept the

position."

By letter dated 24 September 1974 the appellant accepted the

position, and his employment commenced on 1 October 1 9 7 4 .

He was then aged 44 and hls employment was to contlnue until

he was 6 5 . It has not been terminated.

In planning, Dr. Wells and those working with hin

had estimated that at least 30 per cent of the patients

attending the hospital "would opt for so-called hospital

service care", and it was thought that the resultant work

might be more than f o u r general surgeons could cope with.

In the event, only three, of whom the appellant was one, were

appointed. The scheme was that there would be "hospital-

care" patients who would receive attention free, even though

- 6 -

not insured. Indeed, the scheme was one for "uninsured"

p a t i e n t s who came t o one of the hospi ta l s , o r h o s p i t a l

c e n t r e s , f o r t r e a t m e n t . The majority were to be "insured"

p a t i e n t s , who would normally come through the pr iva te (non-

sa l a r i ed ) p ro fes s ion , and be operated on by non- sa l a r i ed

surgeons. Some uninsured pa t ien ts might a l so be admi t ted

th rough p r iva t e p rac t i t i one r s , bu t t he number o f t hese was

expec ted to be ve ry sma l l . P r iva t e pa t i en t s cou ld be

r e f e r r e d t o s a l a r i e d d o c t o r s , a n d t h e l a t t e r h a d a r i g h t o f

p r i v a t e p r a c t i c e e n a b l i n g them t o e a r n i n t h i s way up t o

2 5 % o f t h e i r s a l a r i e s , and keep f o r themselves half of

those earn ings . The informative document e a r l i e r r e f e r r e d

t o s a i d t h i s a b o u t t h e scheme i n g e n e r a l :

"THE SCHEME

For the Hospi ta l Serv ice Scheme the Canberra

Hospi ta l s Management Board wants 2 7 l ead ing

c l i n i c a l s p e c i a l i s t s	t o s u p p l e m e n t p r e s e n t
s t a f f s p e c i a l i s t s	and t o e s t a b l i s h t h e b a s i c

c o r e o f s p e c i a l i s t s t a f f f o r a f r e e t r e a t -

ment scheme a t t he Canber ra Hosp i t a l and Woden

Val ley Hospi ta l .

P a t i e n t s a t t h e s e h o s p i t a l s w i l l be ab le to

choose f ree medica l care f rom s ta f f spec ia l i s t s

and gene ra l p rac t i t i one r s w i l l con t inue to

have access , as a t p resent , to admi t and ca re

f o r t h e i r p r i v a t e p a t l e n t s i n the Canberra

and Woden Val ley Hospi ta ls . ' l

Later it exp la ined the p r iva t e p rac t i ce a spec t i n the

following way:

"Rights of pr iva te prac t ice - The Hospi ta l

Service Scheme aims t o g i v e p a t i e n t s and

- 7 -

their referring doctors the maximum

possible choice of specialists, and at

the same time to glve hospital patients

the choice between free medical care and

fee for service care on a private practice

basis. To maximise the choice of private

specialist care the Board will therefore

allow full-time salarled specialists

limited rights of private practice,

enabling them to earn up to 2 5 per cent of

their salaries in private fees. Each

specialist may retain half of the private

fees so earned, and the other half will be

paid into a fund which will be used to

subsidise study, travel and research by the

specialists . I '

The particular domain of the salarled specialist

surgeons consisted of the uninsured patients. It was the

appellant's understanding, based on what D r . Wells told

him, that the number of surgeons appointed to treat these

patients would be determined in accordance with requirements surgeons were not to be left without adequate work. It has been inferred in this case that if the number had remained at three, this would have been adequate, but not excessive.

It was in contemplation that some part-time surgeons

(presumably from the private profession) might also be

appointed, depending upon need. At the time of his discus-

sion with Dr. Wells on 11 September 1974, the appellant

knew that there were nine general surgeons already in

Canberra. He estimated that this number was excessive, and

was concerned at what the position would be "after a

reconciliation was effected" if there were three more full-

time surgeons .

There was within the Australian Capltal Territory strong opposition by the non-salaried, or private,

profession to the new scheme. The scheme had originated in

instructions given by the Government of the day. It is not

necessary to go into the details of the grounds of opposition

but the fact that it existed, and was widely publicised, and

that the appellant knew these things before he agreed to

accept the appointment is of relevance. One aspect of the

new proposals which was attractive to him was that he would

have the surgical work without having to be dependent on the

private profession t o refer cases to him. It 1s probably

not unfair to say that he wanted for the most part to be in

a non-competitive field, or one, at least, in which the

number of his competitors, if they could be called that,

would be strictly limited, i.e. to two r three. At the

same time, he had no objection to acceptlng cases which might

be referred by the private profession, and he apparently did

this on many occasions.

There was no language used in the Conditions of

Service document or in the oral discussion with Dr. Wells

(or anyone else) expressmg in terms something in or to the effect of the term relied on. The language which perhaps most closely approached that used in the term as framed is

to be found in the following exchange with Dr. Wells on 11

September 1974, as deposed to by Dr. Mann:

Q. Did you ask him about what workload you

- 9 -

des i r ed?

A.	Well, I t o l d him t h a t I wanted a f u l l
t ime surg ica l job . I wanted a busy

p r a c t i c e .

Q.	What d i d he s a y t o t h a t ?
A.	He s a i d t h a t t h a t o f c o u r s e i s what the
board intended. I t did not want people
on i t s p a y r o l l who were ju s t tw idd l ing

t h e i r thumbs.

There i s we th ink no doubt t h a t t h e a p p e l l a n t was

led to expect , both from what he was told about the scheme,

and from what Dr. Wel ls to ld him more d i r e c t l y a b o u t h i s

own expected workload, that he r o l e as a s a l a r i e d general surgeon. would be kept busy i n h i s

The ques t ion i s

whether there was i m p l i c i t i n what was s a i d , o r t h e r e i s t o

be implied, a c o n t r a c t u a l p r o m i s e t o t h e a b s o l u t e e f f e c t o f

t h a t r e l i e d upon.

We do not f ind in the ev idence about the d iscus-

s ion anything which can fair ly be regarded as an express ion

o f the term. That i s to s ay , t he l anguage , a s t o t he who le ,

or any a contractual promise p a r t o r p a r t s t h e r e o f , d o e s n o t c o n v e y t h e meaning of

i n or t o t he e f f ec t o f t ha t sued on .

The question whether the Court should imply the

promise 1s a d i f f e ren t a l though c lose ly r e l a t ed one .

The context has to be borne i n mind. The p re -

dominate purpose of the neeting was t o p r o v i d e e l u c i d a t i o n .

There was t h e p o l i t i c a l d i s p u t e , t h e outcome of which must

a t tha t t ime have been uncer ta in . The Condit ions of Service

document , which appl ied to salar ied special is t medical

. .

. .

- 10 -

officers in general occupies 16 pages of the appeal book,

and might reasonably be thought to contain virtually all

necessary terms. The salary for Dr. Mann was not mentioned

in the copy of it sent to him, and, so far as appears was

not discussed on 11 September 1 9 7 4 . Probably it was

mentioned in the telephone message of 5 September, whlch

Dr. Wells confirmed the following day. He re-affirmed the

salary in a letter dated 30 September 1 9 7 4 . We accept that,

among other things, the appellant was concerned to ascertain

whether he would have enough work, and to be reassured that

this would not be reduced unacceptably by a return of

private surgeons to deal with uninsured in-service patients.

If the term, or something like it, was something Dr. Mann

thought he could ensure as a matter of contract, o r if he

wanted a written non-contractual assurance, he had ample

opportunity to make an appropriate request, but the evidence

does not disclose any. Dr. Wells spoke in terms o f intention

and expectation, and did not himself express a promise. I f

he had sought to do so it is most unlikely that it could have

been in the absolute and unqualified words now relied on.

It IS an important matter that, whatever the work-

load, the appellant was to be paid a salary. He was

appointed until he became 65 years of age. A right to

private practice gave him a fair opportunity to increase his

gross earnings by one quarter. On the other hand, he under-

standably and correctly emphasises that he needed an adequate

amount of work to maintain hls skills and his standing among

professional colleagues.

- 11 -

The question in thls case is whether the par-

ticular term alleged should be implied. In some employment

situations, it may be correct to imply a similar term.

There are a number of cases deallng with actors and producers to whom actual performance was regarded as vital:

see, for example, Marbe v George Edwardes (Daly's Theatre)

-	Ltd. (1928) 1 KB 269; White v Australlan and New Zealand
Theatres Ltd. (1943) 67 CLR 266. In Collier v Sunday
Referee Publishing Co. Ltd. (1940) 2 KB 647, in a passage
often referred to, Asquith J said (p.650):

"It is true that a contract of employment

does not necessarily, or perhaps normally,

oblige the master to provide the servant

with work. Provided I pay my cook her

wages regularly she cannot complaln if I

choose to take any or all of my meals out.

In some exceptlonal cases there is an obligation to provide work. For instance, where the servant is remunerated by

commission, or where (as in the case of an

actor or singer) the servant bargains,

among other things, for publlcity, and the

master, by withholding work, also with-

holds the stipulated publlcity: see, for

instance, Marbe v George Edwardes (Daly's

Theatre), Ld. (1928) 1 KB 269: but such

cases are anomalous, and the normal rule 1s illustrated by authorities such as Lager- wall v Wilkinson, Henderson & Clarke, Ld.

80 LT 5 5 and Turner v Sawdon & Co. (1901) 2 KB 653, where the plaintiffs (a commer-

cial traveller and a salesman respectively,

- 12 -

retained for a fixed perlod and remunerated

by salary) were held to have no legal com-

plaint so long as the salary continued to

be paid, notwithstanding that owing to thelr

employers' action they were left wlth

nothing to do. The employers were not bound

to supply work to enable the employee, as

the phrase goes, t o "keep his hand m," o r to avoid the reproach of idleness, or even

to make a profit out of a travelling allow-

ance. In such a case there is no breach of

contract, but the result is much the same as

if there had been, because In either event

the plaintiff is entitled to a sum or sums

which are measured prima facie by the amount

of salary in respect of the unexpired perlod

of service ."

(See also Halsbury's Laws of England, 4th edn. Vol . 16,

para. 557; 53 American Jurisprudence Zd para. 133; Fridman,

The Modern Law of Employment (1963) pp. 82-5).

In Langston v Amalgamated Union o f Engineerlng

Workers (1974) 1 WLR 185, an action under the Industrial

Relations Act 1971 (Eng.) Lord Denning MR, after commenting

that time had marched on since Collier's	case, said (at
p. 192) :

"In these days an employer, when employlng a skilled man, is bound to provide him with work. By which I mean that the man should be given the opportunity of doing his work when

it is available and he is ready and willing

to do it."

(See also Langston v Amalgamated Unlon of Engineering

Workers (No. 2) (1974) ICR 510, 521-2).

- 13 -

This formulation does not involve a duty as absolute as that relied on here. In many situations, contractors and other employees, and perhaps professional employees in particular, make inquiries and seek information to see

whether a risk as to the volume	o r continulty of work is
acceptable.

There are a number of matters which lead us to the conclusion that in the present case the term should not

be implied. There is the difficulty of applying the term

in question. Some of the considerations show up more clearly

if the term is assumed and matters of breach and damage are

considered. There is for example, no period stipulated

during which compliance is to be tested. It would not be a

once and for all situation; the term could be complied with

at some times, and not at others, and s o on. A variety of

external factors could become operatlve. If the term

created an absolute obligation on the Commission, some

allowance would have to be made for the work received

privately, and this could vary considerably. These and

other matters are not, as counsel suggested at one stage,

merely a matter of making cross implications. They go to

the implication of the term relied on, and of that par-

ticular term. It is perhaps one way of putting this aspect

of the matter to say that the vlcissitudes attending the

employmenteere too many and too varied to allow the term to

be implied.

The Board in its literature emphaslsed, as the

evidence shows to be the fact, that the system under whlch

.

- 14 -

the appellant would work involved "referral" to him by

other doctors. This is an important matter. The referral

would be by an intern, o r by another staff doctor or by a

private practitioner, depending upon the circumstances.

The amount of work he received from any one of these

sources would depend on the judgment o f the referring

doctor. It would be understood by D r . Wells and Dr. Mann

that this would depend on whether, in all the circumstances,

the appellant was regarded as the most suitable surgeon for

the patient. The patient's own wish could of course be

controlling. In casualty o r emergency cases, the surgeon on

duty at the hospital may of necessity be the one who has to

perform the operation, although the patient, if conscious, o r his relatives, may a l so be able to control this situation.

Most surgery is, however, "elective", which we understood to

mean that it is planned some time ahead. So far as concerns uninsured patients who would present themselves at the hospital for treatment under the scheme envisaged at the

time, and which was being put into operation, there would be

few surgeons among whom a choice could be made. Nevertheless,

it surely could not have been intended that these patients,

even although they might be relatively poor, would be with-

out some reasonable choice or adequate guidance as to who

should operate on them, and should instead be allotted to a

doctor, regardless of his skill, for the particular task, or

his manner o r compatibility, actual o r perceived. The appel-

lant and Dr. Wells visualised that there might be three or

four full-tlme specialist surgeons, and possibly, If the

c

- 15 -

need arose, some part-tlme ones. Even then, it was for the

doctor carrying out the examlnation f the patient (and the

appellant, doing clinical sessions, could be one f these)

to decide to whom the patlent should be referred for

surgery. As the evidence shows, the choice could properly

be based on considerations other than surgical expertise;

matters such as ability to establlsh a suitable relationship

wlth patients and faculty for co-operation with nursing and

theatre staff.

There is then a wide consideration, which overlaps

what we have been saying about the referral system. It is

siaply that the subject matter of the alleged implled

agreement was the ailing bodies of men and women who would

be needing surgery, men and women who must be regarded as

being entitled to the services of a surgeon of their free

choice. The referring doctors were not under any constraint

whatever to refer patients to a partlcular surgeon.

Undoubtedly Dr. Wells, experienced hospltal administrator

that he was, could have estimated with a conslderable degree

of accuracy the nunber of patlents who would require surgery

in fields within the plalntiff's obviously high competence.

Nevertheless, it can hardly be thought that the plaintiff

and Dr. Wells were agreelng in advance, agalnst the back-

ground of their knowledge of hospitals, doctors and

patients, that in some fashion the free choice of patlents

and referring doctors was to be fettered In the interests of

the plaintiff. It seems to us that respectable and respon-

sible medical practitioners could not have been agreeing

- 16 -

that a number of bodies, sufficient to keep the plaintiff

busy to the extent he hoped for, would be delivered up to

him for operation, regularly and without fall. What the

plaintiff sought can only have been an assurance,

necessarily vague and general in its terms, that those

responsible for the administration of the Canberra hospitals

would do what they properly could to see that he had a

reasonable work-load, but that assurance, even if it can be

spelled out from what Dr. Wells said, cannot have been a

contractual promise. Certainly it could not have amounted

to a promise in the terms sued upon.

What happened was that, after a change in Govern-

ment, and pursuant to a directive of the new Minister for

Health, nine private surgeons were allowed to participate in

the treatment of uninsured patients. This increased the

number nominated as having access to that market from three

to twelve. Senior counsel for the appellant says that this

was the critical impermissible step. The submission, we

believe, brings us closer to the polnt. When an implied

term is relied upon, it should stand out as something that can be formulated with reasonable precision. An uncertainty

as to what the terms should be, or the existence of equally

plausible alternatives, is fatal. There is a quite delusive

simplicity in introducing terms simply because their f o r -

mulation has an air of reasonableness. This is apparent

from the formulation of the Privy Council in B.P. Refinery

Pty. Ltd. v Hastings Shire Council	( 1 9 7 6 )	52 ALJR	2 0 at	26,
which was as follows:

- 17 -

"In (their Lordships') view, for a term to be

implied the following conditions (whlch may

overlap) must be satisfied:

(1)

it must be reasonable and equitable;

(2 )

it must be necessary to give business

efficacy to the contract, so that no

term will be implied	if the contract
is effective without	it;

(3)

it must be so obvious that 'it goes

without saying' ;

(4)

it must be capable of clear expression;

(S)

it must not contradict any express

term of the contract.''

We do not understand the minority in that case to have applied a less rigorous test.

As we have explained, we do not think that the

trial judge applied the term sought to be implied.

In our opinion, the appeal should be dismissed.

The appellant should pay the respondent's costs.

I oertify that this and the 1 6

preceding pages are a true copy of the

Reasons f o r JudgmenthereinofhisHonour

Yr. Justice Fox and his Honour Mr.

I N THE FEDERAL COURT OF AUSTRALIA )

AUSTRALIAN CAPITAL TERRITORY

No. G. 41 o f 198C

DISTRICT REGISTRY

GENERAL DIVlSION I

i Between

ARNOLD MANN

Appe; l n n t

I_ and

Respondent

CORAM: Fox, Sheppard and Kelly JJ

SFIEPPARD J.

REASONS FOR JUDGMENT

There a re two p r m c l p a l hospitals i n Canberra. They

are the Canberra Hospl ta l (more recent ly the Royal Canber1.a

H o s p ~ t a l ) and t h e Woden Vzlley Ho-,pitzl. Un t i l 1972 the

hosp i t a l s were s t a f f ed by doc tors some of whom were ~n

permanent employment and o the r s vLs i t l ng medlcal ol ' f lcers .

Following the change of government which occurred after

t h e 1972 e l e c t i o n s t h e r e was ou t l ined a new h e a l t h s e r v l c e .

This came t o b e known a s Medibank. A g roup of pa t ien ts

t o be provlded for were known as "Hosp i t a l Se rv ice Pa t i en t s " .

These pa t i en t s were cove red fo r bas i c t r ea tmen t a t a l l

l e v e l s . The fee f o r t h e i n i t i a l c o n s u l t a t i o n w i t h a

general p r a c t l t i o n e r was f u l l y r e b a t a b l e a s was t h e f e e o f

any spec ia l i s t t o whom they were referred. They were e n t l t l e d

t o f ree hospi ta l t rea tment wl thout there be lng any means

t e s t . I n most hosp i t a l s t he t r ea tmen t o f Hosp i t a l Se rv lce

P a t i e n t s was t o be undertaken by e i t h e r f u l l t i m e o r p a r t

time s a l a r i e d s p e c l a l l s t s . In t h e A u s t r a l i a n C a p i t a l

T e r r i t o r y i t was dec ided tha t Hosp i t a l Se rv lce Pa t i en t s

would be au thor i ty immedia te ly in charge of the admlnls t ra t ion of t r e a t e d by f u l l t u n e s a l a r i e d s p e c l a l l s t s . The

the proposa l was the Canberra I lospl ta ls Management Board.

Later t h e Board was succeeded by t h e C a p l t a l T e r r i t o r y

Heal th Commisslon whlch i s t h e r e s p o n d e n t t o t h i s a p p e a l ,

and the successful defendant in proceedlngs brought against

i t i n t h e Supreme Cour t o f the Aus t ra l ian Capi ta l Territory by

t h e a p p e l l a n t . The a c t i o n was f o r damages fo r b reach of

c o n t r a c t . No p o i n t was taken tha t the respondent was no t

l i a b l e f o r s u c h damages , no twi ths tanding tha t any cont rac t

which the appe l l an t had was wl th the Board ra ther than the

ComAssion.

i

2.

f

The term of t h e c o n t r a c t which t h e a p p e l l a n t

a l l e g e d had been broken was t h a t t h e Board would

f u r n i s h t h e a p p e l l a n t w i t h s u r g i c a l work of a kind

m d q u a n t i t y s u i t a b l e f o r a s e n i o r and experienced

general surgeon. The respondent submitted t'nat

t he con t r ac t con ta ined no such term. That 1s cne

of the p r i n c l p a l matters t o be determlned i n t h i s

appeal. I t was a ma t t e r upon which t h e a p p e l l a n t

succeeded be fo re t he l ea rned t r i a l Judge. he f a i l e d

i n t h e p r o c e e d i n g s a t first ins tance only because the

learned judge was not persuaded tha t any damage he

had s u f f e r e d r e s u l t e d from breach by the respondent

o f t h e term I n q u e s t i o n .

The a p p e l l a n t was appointed a s e n i o r s p e c l a l i s t

surgeon by t h e Board t o a c t i n t h a t c a p a c i t y i n t h e

two ho 'spi ta ls . The appointment a long with others

was adve r t i s ed by t h e Board about the middle o f 1974.

A brochure was prepared. I t was da ted 20 June, 1974.

I t was headed with the name of t h e Board under which

appeared the words "Hospi ta l Serv lce Schemeit. The

brochure said t h a t the mformat ion i t contained had

been prepared for the guidance of med ica l p rac t i t -

i one r s l i v lng ou t s ide Canber ra who were i n t e r e s t e d

i n s e e k i n g p o s i t l o n s as h o s p l t a l specialists

3 .

under the Hospl ta l Serv ice Scheme. A d e s c r i p t i o n o f

Canberra nd i t s surrounds was given. There was

information concerning each of the hospi ta ls . The

scheme was then descr ibed. Amongst o t h e r t h i n g s i t

was s a i d t h a t f o r t h e c l i n i c a l s p e c i a l i s t s t o s u p p l e m e n t p r e s e n t s t a f f s p e c i a l i s t s scheme t h e Board wanted "leadlng

and t o e s t a b l i s h the b a s i c c o r e o f s p e c i a l i s t s t a f f f o r a

f r e e t r e a t m e n t scheme'! a t t h e two h o s p i t a l s . It was s a i d

: t h a t p a t i e n t s a t t h e h o s p i t a l s would be ab le to choose

f r ee med ica l ca re f rom s t a f f s p e c i a l l s t s o r p r i v a t e

medical care on a f e e f o r s e r v i c e b a s i s . P r i v a t e s p e c i a l i s t s

would c o n t i n u e t o h a v e a c c e s s t o t h e h o s p i t a l s f o r t h e i r

I

p r i v a t e p a t i e n t s . T h e r e was then a heading, "Spec1al t ies1! ,

under which It was s a i d t h a t t h e Board would seek to p rov ide

the w ides t p rac t i cab le r ange of spec ia l ty cove r unde r t he 1

scheme and f u l l t i m e s a l a r l e d s p e c i a l i s t s intended to supplement the coverage provided by

with a d d i t i o n a l l o c a l

s p e c i a l i s t s engaged on a par t t ime bas l s . I t was s a i d

t h a t a l l a s p e c t s o f m e d i c i n e were not covered under the

s p e c i a l t l e s which were named, "but i t is t h e c l e a r I n t e n t i o n

of the Government to p rov ide eve ry poss ib l e a spec t o f

medica l care as the scheme develops!!. There was then a

l i s t o f s p e c i a l t i e s , which included under the heading

"Surge ry" , ches t su rge ry , gas t ro - in t e s t ina l su rge ry and

4"

accident and trauma surgery.

There were statements concerning the salaries to be paid, leave, (sabbatical, recreation, long servlce

ii

and sick), hours, compensation, superannuation, cost of travel and housing. It was also said under the heading llResearch Facilities" that the Board sought specialists

who were and who would remain "at the forefront

o their

specialty". Clinical research would therefore be

encouraged.

The brochure gave details of where further information could be obtained and said that applications closed on

31 July, 1974.

The appellant graduated from the University of

Melbourne with honours degrees in both mediclne and surgery. He won the Ryan Prize in mediclne and shared that prize in

surgery. Between 1954 and 1956 he held appointments as

junior and senior resident medical officer and also as

registrar at the Royal Melbourne Hospital. He was in the

United Kingdom between 1957 and 1959 when he became

Fellow of the Royal College of Surgeons. He is also a

Fellow of the Australasian College. He returned to

Melbourne and was an honorary assistant surgeon at S .

Vincent's Hospital from 1961 to 1969. During that period

he carried on private practice in Collins Street, Melbourne,

I 5.

as a general surgeon with a special interest in gastro-

intestlnal surgery. In 1971 he worked in an honorary

capacity as a general surgeon in Israel. In 1972 he

"

returned to the United Kingdom where he was appointed a

I

senior research assistant at Royal Marsden Hospital. In

!

1973 he was appointed a senlor lecturer at Kings College

Hospital in London. In his evidence the appellant said

that he found immense professional interest in salaried

medical practice In the United Kmgdom. He said that he

found it satisfymg and that it became his preferred method

of practice.

The appellant was still in London when he read of the

availability of senior specialist positions for general

surgeons in Canberra. His interest in obtaining such a

position was one of the reasons whlch prompted him to return

to Australia in 1974. Upon his return he was furnished

with a copy of the brochure to which I have earlier referred.

Applications for employment were to be addressed to

Dr. Wells who was the chairman of the Board. The appellant

made an application. On 14 August, 1974, Dr. Wells wrote

the appellant a letter (described as a routine letter). It

said that the Board had completed an initial assessment of

the applications made. The appellant's name had been

I

included in a short list of applicants 'Ifor more detailed

6.

assessment and interview with our consultants for your

specialtyot. The letter enclosed a document descrlbed

in the letter as Ita copy of the general conditions

relating to these appointmentsn. The document was

headed ltConditions of Service Agreement". It said that

"this agreement" was to apply to those salaried specialist

medical officers employed by the Board. It continued,

"All matters of particular relevance are included in this

document, but other matters of procedure wlll be unified

with the formation of a health commissiontt. The document

foreshadowed that in due course the powers and functions

of the Board would pass to the Commission upon its creation.

i Clause 1 of the document contamed a number of definitions

including a definition of IISenior Specialist". Such a

specialist was a medical practitioner who had spent not less

than eight years in practice, had spent not less than three

years in supervised specialist training or had had not less

r

than three years experlence In that specialty, had obtalned

an appropriate hlgher medical qualification and had been

in full time practice In that specialty for at least six

years. The document then began to deal with a number of

basic matters. These included salaries and their adjustment,

7.

board, lodging and resldential accommodation, leave of

va r ious k inds , hours of duty, superannuation and the

c o s t of t r a v e l , A number of p rov i s ions were Included

under the under th i s heading provided tha t the heading Vondit ions of Servicet! . Clause 7.2

Board should "appoint

the spec ia l i s t med ica l o f f i ce r t o p rov lde med ica l s e rv i ces

fo r pe r sons coming w i t h i n t h e d i r e c t c a r e r e s p o n s i b l l i t y

of the Board". The document included a number of

p r o v i s i o n s i n r e l a t i o n t o t e r m i n a t i o n o f s e r v l c e . The

Board was n o t e n t i t l e d t o t e r m i n a t e t h e s e r v i c e o f any

appointee except on grounds of misconduct, negligence o r

ineff ic iency. There were xtensive provls ions deal ing

with these mat te rs and w l t h appeals f rom decls lons con-

cern ing them.

One type of leave t o whlch a s p e c i a l l s t m e d i c a l o f f i c e r

was e n t i t l e d was s tudy leave which accrued a t t h e r a t e of

26 weeks s tudy leave for each comple ted s ix years of se rv ice .

An acceptab le programme of s tudy to be c a r r i e d o u t d u r i n g

I

the per iod of such leave was t o be submi t ted to the

commit tee referred to . A l i m i t e d r i g h t o f p r i v a t e p r a c t i c e

was provided f o r . There was no expres s p rov i s ion dea l ing

wlth te rmina t ion by t h e s p e c i a l l s t b u t c l a u s e 6 ( 2 ) provided

t h a t any s p e c i a l i s t m e d i c a l o f f i c e r who had given o r had

been given three months ' notice o f t e rmina t ion of se rv lce

8.

i	.4
!

! should be paid all moneys due to him on terminatlon of

service. Because of the elaborate provisions concern-

ing terminatlon by the Board it would appear that the

provision was not intended to give the Board power to

terminate the appointment on three months’ notice except

on one of the grounds earlier referred to. On the other hand it would appear that the intention was that the

appointee might himself give three months’ notlce of

termination of the agreement. That was the interpretatlon

of the provlsion which both counsel said should be given it.

A s a result of the letter of l4 August, 1974, the appellant attended an interview in Melbourne.

On 6 September, 1974, Dr . Wells wrote him a further letter. The letter sald, “This 1s to confirm my phone

message yesterday that the Board has decided to offer y u

an appointment as a Senior Speclallst In Surgery”. The

appellant was to meet D r . Wells in Canberra on 11 September.

They had not met earlier because Dr. Wells had been ill.

The appellant had been interviewed by the deputy chairman and two other members of the Board. The interview was conducted on Its behalf.

The two met as arranged on l1 September, 1974, and

spent most of the day together.

9.

I .

.

The evidence contains a lengthy account both by Dr. Wells and the appellant as to what transpired during

their discussion. Dr. Wells was called in the appellant's

case and gave evldence first. There is no conflfct

between the two on any matter of substance. The learned

trial judge accepted their evidence as reliable. The

relevant part of their discussion concerned the amount and

type of work which the appellant was to	do.	In his
eross-examination Dr. Wells said:

'l1 recall Dr Mann in particular wanted to be

assured that he was not Just going to be dealing

with minor cuts and boils in casualty and other

surgeons had similar views, and so this raised

what sort of additional medlcal support was going

to be provided and whether there was golng to be

the satisfactory support o do the minor work."

On this topic the appellant's evidence was:

"1 told him I was not prepared to accept an

, appointment which involved - well, a non-existent

job in due course. I was very, very deeply con-

cerned about the possibillty of this

Did you tell him - I am sorry, but you must tell

me whether you are maklng observations, or

whether in fact you are telllng us the content

of your discusslon? --- No. I assure you that

was the content of my discussion; in fact, I

alluded to this again and again.

You told him that you were concerned about what?

--- About the posslbllity of being inactivated

if every surgeon was appointed to servlce the

uninsured patients, or as they were then to be

called Medibank-levy patlents.

iu.

1

"What did Dr Wells say to you ln relation to

not Justify expenditure on unnecessary appolnt- that? --- He said to me that the board could

ments, and that appolntments would be made on

the basis of need. There certainly was no

intention to appoint everybody unless that was

the requirement at the particular time when

these decisions were made.

Did you ask hlm about what work load you desired?

--- Well, I told him that I wanted a full time

surgical Job. I wanted a busy practice.

What did he say to that? --- He said that that

of course is what the board intended. It did

not want people on its payroll who were Just

twiddling thelr thumbs."

After the intervlew concluded the appellant went away.

Subsequently he recelved a letter dated 30 September, 1974, signed by D r . Wells on behalf of the Board. The letter said:

"Thank you for your letter o f 24 September 1974

acceptlng the position of Senior Specialist in

general surgery at the Canberra Hospital.

Your duties will commence on 1 October 1974 at

' the agreed salary of $23,0OOl'.

The appellant's letter of	24 September, 1974, is not in
evidence.

The appellant commenced duties as planned and until the end of 1976 matters proceeded uneventfully. At the end of

1975 there had been a further change of government. The

i

incoming government decided to make substantial changes to

11.

the medical scheme which the previous government had

s e t up. Before bringing these changes about he then

Min i s t e r fo r Hea l th commissioned a r e p o r t by a working

par ty under the chairmanship of Professor E.S.R. Hughes.

The working pa r ty ' s t e rms of re ference requi red it t o

propose how the range of medical services in Canberra

should be staffed and provlded and to propose	how	hlgh
qua l i ty in the p rov i s ion o f t hose se rv ices cou ld be

achleved. The committee was asked t o a c c e p t t h a t t h e

1 f u l l involvement of sa la r led and pr iva te s ta f f would

cont inue. The committee published i t s recommendations

on 1 September, 1976. I t is unnecessary to go i n t o d e t a i l

but the recomrnendatlons proposed that a l l s p e c i a l i s t s ,

whether employed o r par t t ime, should have equal s ta tus

and equal opportunity f o r r e f e r r a l I n r e s p e c t o f a l l

p a t i e n t s . Thus t h e r e was to be no longer an assured

nuc leus o f pub l i c pa t i en t s whose cases must be r e f e r r e d

t o t h e recommendatlons f u l l t i m e employed s p e c i a l i s t s . The working p a r t y ' s

a were adopted and implemented a t t h e end of

1976.

That led to a s i t u a t i o n p u r s u a n t t o which the amount

of work diminlshed.	which	was	a v a l l a b l e t o t h e a p p e l l a n t s u b s t a n t i a l l y
The	c a u s e s f o r t h a t s i t u a t i o n a r i s l n g n e e d

t o be consldered because, as I have e a r l i e r mentioned, it

is the respondent 's submission that any damage suf fered by

12.

xhe appellant as the result of the falllng off of

work avallable to him was not due to any breach of

any contract by the Board or the Commission. It

was that submlssion whlch the learned trial Judge

upheld. I do not, however, propose to refer to

the evidence about causes now. It 1 s more con-

venient to do so when I come to deal with the implementation of the new scheme at the beginnlng

competing submissions of the parties about causation.

of 1977 the amount of work avallable to the appellant

began to fall away. In a comparatlvely short

period it reduced to a level whlch the evidence estabLishes was insufficlent to enable him to maiEtain his professional competence. There is

no issue that that was the case, and I do not

propose to refer to the detail of the evidence about

it. The appellant did not purport to treat the

respondent's alleged breach of contract as a repudiation

by it of its obligations thereunder. He has remained In

the respondent's employment down to the present time. The

contract is still on foot.

3

For the appel lan t to succeed each of the fo l lowing

th ree ques t ions needs to be answered In h i s favour:-

1. Was i t a term of t h e c o n t r a c t between t h e a p p e l l a n t

and the Board, and thus the Commission, t h a t t h e Board

would f u r n i s h t h e a p p e l l a n t w i t h s u r g i c a l work of a

k ind and quan t i ty su l t ab le f o r a s e n l o r and experienced

general surgeon?

2. Was t h e r e a breach by the respondent o f the ob l iga t ion

imposed upon it by tha t te rm?

3 . Was such breach causat ive of damage s u f f e r e d by t h e

appe l l an t?

If these ques t ions a re answered favourably to the appel lan t ,

t h e r e wlll a r l s e f o r c o n s i d e r a t l o n t h e f u r t h e r q u e s t l o n o f

t h e amount of h is damages.

The learned t r ia l judge answered the f irst two ques t lons

f avourab ly to the appe l l an t bu t w a s not persuaded that any

damage he suf fered was caused by the respondent ' s b reach of

c o n t r a c t . He decided the mat ter upon the onus of proof.

Before us the respondent supported his Honour 's Judgment no t

only upon t h e b a s i s t h a t t h e r e was no c a u s a l r e l a t l o n s h i p

between any damage and breach, but also upon the basls that

d

t h e c o n t r a c t d i d not conta ln a t e r m t o t h e e f f e c t o f t h a t

r e l l e d upon by the appel lant and found by h l s Honour t o be

part of the contract. A notice of contention to enable

this point to be argued was filed.

I deal first

respondent’s notice of contentlon glves rise. In his

Honour‘s view the term was one which It was proper to

of all with the question to which the

imply in accordance with principles propounded in - Th

Moorcock (1889) 14 P.D. 64 and in countless cases since, including the recent decision of the Prlvy Council in

B.P. Reflnery (Westernport) Pty. Llmited v. Shire of Hastings

(1977) 52 A.L.J.R.20. With respect, I have reached the

conclusion that there 1s no place In the contract in the

present case for an implied term to the effect of that

here relied upon. In short I take the vlew that the

implicatlon of such a term is not necessary	m order to
give to the contract business efficacy.

Nevertheless,I am of opinion that his Honour’s con-

cluslon was sound because the parties expressly agreed upon

such a term. They dld so in part of the conversation which

took place between the appellant and Dr. Wells on behalf of

the Board on 11 September, 1974. To the essential parts

of that conversation I have earlier referred. It is my

opirnon that the words of the term relied upon may falrly

be spelt out of what was said.

15.

7

A proper understanding of the conversatlon requires

one to take into account a number of background matters.

They are as follows:

1. The position offered the appellant was that of senior

specialist surgeon - the most senior position which the

Board had to offer. No doubt the appellant was offered

the position because of his distinguished career as a

surgeon and the depth of surgical experience which he then

had. That emerges from the whole of the surrounding cir-

cumstances, but the facts of his quahfications and

experience coupled with the statement in the brochure that

the Board was looking for "leading clmica1 specialists to

supplement present staff speclalists and to establish the

basic core of specialist staff for a free treatment scheme"

shows both the high callbre of the persons being sought and

that the appellant was of this calibre. Plainly the Board

through Dr. Wells knew it was dealing with a person of high

quality and ability.

2. It is common ground between the parties that a surgeon needs continuing experience In order to maintain his skill.

In relation to this matter	Dr. Wells gave the following
evidence:

:

16.

"From the Board's point of view we of course

had a c l e a r i n t e r e s t i n k e e p i n g s u r g e o n s a n d

o the r peop le fu l ly occup ied to keep them competent.

I t i s we l l known tha t i f ( i n ) v a r i o u s m e d l c a l s p e c i a l t i e s

people are not busy enough w l t h the i r medica l work ,

they tend to lose competence and so t h i s was one of

t h e t h i n g s t h a t t h e Board had d i scussed in ensu r lng

t h a t t h e workload f o r a l l t h e s p e c i a l i s t s employed

would	be	adequate.
...e ..... ...

I t h i n k t h a t I n most s p e c l a l t i e s which r equ i r e long

t r a i n i n g t o g e t i n t o them i n t h e first lns t ance , they

r equ i r e con t inued cons ide rab le p rac t i ce , not o n l y t o

keep a t the cu t t ing edge of knowledge , re levant

knowledge , bu t a l so In the cases of t h e o p e r a t i v e

s p e c i a l t l e s o f c o u r s e , t o k e e p t h e i r t e c h n i c a l a n d

manual s k i l l s i n o p e r a t i o n .

Do you have any views as t o g e n e r a l s u r g e o n s i n

par t icu lar?- - - Yes, I thlnk general surgeons have

a s p e c l a l p r o b l e m l n t h a t t h e y are c a l l e d upon i n

emergencies t o o p e r a t e on a l i p a r t s o f t h e body.

T h i s i s n o t l i k e d o i n g a c o l d l e g a l case o r a co ld

s u r g i c a l case where c e r t a i n o f t h e d a t a t h a t m l g h t

be relevant can be looked up beforehand in preparat ion.

So they have to keep a ve ry cons ide rab le body of

knowledge r e a d i l y a c c e s s i b l e a t t h e l r f l n g e r t i p s the

whole time. A t the same tlme, they have to keep the i r

t e c h n i c a l skil ls r e a d y t o deal w i t h many d l f f e r e n t

areas and wi th many v a r i a t i o n s t h a t o c c u r i n t h e human

body. I do n o t b e l i e v e t h a t t h e s e s k l l l s can be main-

'

t a i n e d s a t i s f a c t o r i l y u n l e s s p e o p l e , u n l e s s s u r g e o n s

are m fac t kept	busy. F o r example, a general surgeon
who mlght have	t o remove a g a l l b ladder would no t be

l i k e l y t o b e t e r r i b l y gcod a t i t i f he had not done

one f o r f i v e y e a r s . T h e r e a r e many of these operations

whlch the surgeons would need t o keep t h e i r hands in .

That l n f e r s the need to keep reasonably busy."

3. The c o n t r a c t was t o be one pursuant to which the appel lan t

Y

cou ld expec t t o be employed f o r t h e remainder of h i s working

a

3

l i f e . There was no p rov l s ion In It f o r t e r m i n a t i o n by t h e

17.

Board in any event other than	on grounds of misconduct,
negligence or inefficiency.

4 . The matters referred to in paragraphs 2 and 3 need to

be taken into account together and with a further factor, namely, the statement in the brochure earlier referred to that the Board was seeklng specialists who were and

who would remain "at the forefront of their speclalty". capacl-cy of senior speciallst surgeon, remaln employed by

the Board (subsequently the Commission) for a perlod of

over 20 years. During this time it was expected that he

would remain at the forefront of hls speclalty. In the

light of the evidence that would only be so if he were

provided with work in sufflcient quantities and also

embarked on the research and took the study leave which

the brochure also contemplated.

5. The appellant's conversation wlth D r . Wells was con-

ducted agamst the background of knowledge by both of

simmering unrest and resentment on the part of the local

medical profession concerning the lntroduction of the

scheme. A maJor reason for that resentment was the

realisation by the local profession that addltional highly

experienced surgeons were to be introduced into Canberra

without any increase in the numbers of patients and wlth

18.

a seeming assurance to the new practitioners o f a steady

supply o f the more interestmg and challenging cases.

Having sketched in the background I can now come to

the material words of the conversation. I have earlier

set out the essential parts of It, but it should be

appreciated that a proper appreclatlon o f It does require

the reading of the evidence of It in its entirety.

Subject to that matter, it is my opinion that the following

evldence establishes that there was an express term to the

effect of that relied upon by the appellant:-

1. The evidence of Dr. Wells that he recalled the appellant

wanting "to be assured that he was not just going to be

dealing with minor cuts and boils in casualty".

2. The evidence of the appellant that he said that he was

not prepared to accept an appolntment "which Involved	- well,
a non-existent Job in due course".

3. The appellant's evidence that he was concerned about

the possibility of being inactivated if every surgeon was

appointed to service the unlnsured patients.

4 . The appellant's evidence of Dr. Wells' statements to

him that -

(a) the Board could not Justify expenditure on

unnecessary appointments;

i 19. n

i

(b)

there certainly was no intention to appolnt Iteverybody unless that was the requirement at the particular time when these declsions were made" ;

(c)

the Board intended the appellant to have a full

time surgical job - a busy practice. It did not

want people on its payroll "who were just

twiddling their thumbs".

By no means unimportant is the use by Dr. Wells of the

word "assuredf1. Plalnly the appellant wanted assurances

of the amount of work which he would have. According to

Dr. Wells he used that word. It is perhaps unnecessary to

pause to emphasise that the ordinary meanlng of that word 1s

a promise making a thlng certam; an engagement, pledge or

guarantee. In the recounting of a conversation which had proceeded over a number of hours and had taken place some

years before the evidence of it was given, one would not tie

a witness to actual words. But the overall impresslon

which the evidence to which I have referred gives 1s that

the two parties to the conversatlon were intending it to be

clear between them that there was, as a matter of obligation,

to be provided a sufflcient flow of work to enable the

appellant to maintain his professlonal skill.

The respondent sought o rely upon the appellant's

knowledge of the polltical objectlons to the scheme as a

reason why he could not have reasonably expected the

assurances whlch he was given. But in my opinion his

knowledge in that respect provldes a strong reason why one

would take the opposite view. It was that very knowledge

which prompted him to seek the assurances to whlch reference

is made in the evidence. His concern was to ensure, so

far as he could, that he would not become a victlm of the

polltical dispute whlch was brewing. He wished to remain

apart from it.

It was also submitted on behalf of the respondent that

on no basis could it be inferred that the parties were con-

tracting in such absolute terms. The subject matter of

thelr contract In this particular respect was patients -

human bodles to be operated upon. The obligation imposed

upon the Eoard by such a term would involve it in compelling

'1	patier,ts to undergo major surgical treatment by the appellant,
3
d	perhaps in many cases against their wlll. That being the
case the partles to the conversation should not be taken to
have lntended that any assurances sought and given were
intended to be promissory in a legal sense, that is contractual.
Rather the case was one where the appellant as an experienced
surgeon seeklng a position went about obtaining as much

21.

information as he could about the amount of work he would

have and the Roard's future intentions in order to make his

Own independent judgment about what the future was likely to

hold. In support of its submission the respondent placed reliance not only upon the nature of the subject matter of

the contract and the entirety of the surrounding circum-

stances, but also upon the length of time for whlch a person

such as the appellant would be entitled to the benefit of

the promise In question. It was submitted that neither

party could reasonably have contemplated that the obligation

of the Board in respect of such a matter might remain in

force for a period of over 20 years.

In my opinion the respondent's submission should be

rejected. I think a reading of the evidence of the conver-

sation as a whore reveals that the appellant intended o-obtain,

as contractual promises, the assurances to which I ave

earlier referred, and that Dr. Wells on behalf of the

Board was willing to give them as such. Both contemplated

that the contract would be in force for many years. The

documents themselves contemplatelthis when they spoke of

leave, including sabbatical and study leave, and research.

A further submission made on behalf of the respondent

" was that no term to the effect of that relief upon should.be

found because the system of which the appellant became part was

22.

a referral system. That submission was made because

three senior specialists in general surgery were employed

by the Board and were available to do general surgical

work, The appellant was one of these. The practice was

for work to be referred to one of the three by general

practitioners or by other, although more Junior, staff medical officers. Thus the respondent was able to say that the appellant In practice depended upon referrals for

the amount of hls work. If work were not referred to

him by other medical practitioners he would not get it

otherwise. However, in no conversation nor In any document

which preceded the appellant taking up his dutles was there

any mention of such a system. Nor was there any reference

to the proposed adoption of a practice whereby the

appellant would depend upon referrals for a sufficient

flow of work. However, it was envisaged that more

than one specialist in general surgery would be

appomted. Nothing belng said in any of the documents

or conversations as to how work was to be shared, it must,

I	have been contemplated that some system would have to be introduced to enable work properly to be allocated and
shared amongst the doctors in question. But to my mind,
that circumstance does not cut down the unqualified nature

23.

of the assurances whlch the appellant was given. No

problem arose as the result of the referral system which

was in force because under It the appellant received a

e

sufficient flow of work. The problem did not arise until

the change in the system occurred at the end of 1976. It

is my opinion that if he had recelved insufficlent work

under the referral system which existed prior to the change

in the system, the appellant could have complalned of a

breach of contract. The fact that he acquiesced in the

system which was instituted is not of any moment. His

acquiescence in It resulted from the fact that the system

worked without detriment to him. His statement in

evidence that 98 per cent of his work came from referrals

does not alter my conclusion in thls regard. That was a

statement of fact and was an answer given in the context

of que'stions attemptlng to brlng out alleged problems

which the appellant had in worklng under a referral system

where he had become one of 12 rather than one of three.

I have consldered whether the appellant's acquiescence in the limited referral system whlch existed between 1974

and 1976 ought not to be treated as a variation by conduct

of the orlginal terms of the agreement. But in my opinion

there is no material upon which it would be possible to

base a findlng that the appellant had by hls acquiescence

24.

in the system agreed to any modification f the guarantee

of sufficient work whlch e had been given before commenc-

ing his duties.

For the reasons I have given I am of opinion that

the words used by the parties to the conversatlon when

i

considered against the background earlier mentioned were used with the intention that they should be contractual and that they did involve the giving by Dr. Wells on behalf

of the Board of an assurance to the effect of the term

which 1 s relied upon. Thus the contract did, as his Honour

found, contain a term that the Board (and thus e Commlssion)

would furnish the appellant with surgical work of a kind

and quantity suitable for a senlor and experjenced general

surgeon.

The next question is that of breach. The evidence

plalnly establlshes that the work with which the appellant

was provided after 1976 was substantially inadequate. The

evldence is all to the effect that it was quite insufficient

to enable hlm to maintain his surgical sklll. The Commission

was, of course, entitled to change the system. But that

entitlement does not mean that It could Ignore Its obligation

to the appellant. No defence based upon frustration,

impossibility of performance or some aspect of public policy

25.

has been raised, nor do I think that it could have been.

The inescapable fact is that the establlshment of the new

system had the effect of reducing substantlally the amount

of available work to the appellant.

I turn to the question of causatim. His Honour's

reasons for not finding damage suffered by the appellant

to have been caused by the respondent's breach of contract

were based upon evidence of a number of other matters

I which his Honour thought could themselves explam the fall

in the volume of the appellant's work. These matters were -

i	1.	The necessity for the appellant to obtain referrals.
I

His Honour thought that the appellant may have recelved

substantially less numbers of referrals because of the part

he had played in medical politics in the Territory. The

appellant agreed that he had taken a strong stand in support

of the salaried medical system. He had written articles

about it in a newspaper. Dr. Wells sald that the appellant

had become the recipient of bad feeling on the part of other

i

doctors and had defended himself agalnst it. He was thus at odds wlth the local medlcal profession who were unllkely

to refer many cases to him for that reason.

2. Evidence that the appellant had other problems with members of the'local medical profession. It is not useful

to go to the detail of these. It is enough to say that he

was at oods with practltioners In private practice in a number

of respects.

26.

I

3. The appellant's refusal to participate in the activities

~

of the Division of Surgery, a unlt established after the

change in the scheme at the end of 1976. The appellant

considered the unit to be carrylng on an activity whlch was

illegal by reason of the operation of a provision of the

Trade Practices Act 1974.

4. The appellant's failure to disclose, in accordance wlth

his contract, amounts earned by him in prlvate practice.

His reasons for refusing this information are glven in the

evidence. I do not find It necessary to refer to the

detall of it.

With respect to hls Honour I do not flnd that any of

the matters referred to provide relevant grounds for not

finding damage suffered by the appellant to have been caused

by the respondent's breach of contract. I have earlier

found.that there was no term of the contract obliglng the

appellant to pzrtlcipate in a referral system. He was

promised a sufficient flow of work. He did not receive It.

Itwas not suggested that fallure by him to obtain a sufficient

*I

amount of work was due to any breach of contract on hls part.

The only breach he has committed is failure to disclose the

amount of his earnings in prlvate practice. But that

could not be causative of his receiving insufficient

work. It mlght have been used as the basis for an argument

27.

that he had not established breach or that he had suffered no damage. But hls Honour found that his private practice was not providmg substantial work for the appellant. This

was said to be demonstrated by his small operatlng require-

I

ments. In the shelter of the contract which the appellant

has he could take sides in medical politics, claim, as he

apparently did, that too many unnecessary operations for

appendicitis were being carrled out or go on, notwlthstandlng

that his manner and ways of dealing wlth fellow practltioners might not have been, at least in their eyes, all that could

be desired. None of those matters could affect his

entitlement to a sufflcient flow of work. If it had been

found during the currency of the orlginal scheme that other

doctors or patients were unhappy with having to deal with

him, it may be, although I express no opinion on the point,

that the Board would have had some redress. But the uncon-

tradicted evidence was that during that period the appellant

had no problem in obtaining a sufficient flow f work. HIS

problems arose only after the change 1.n the system.

In my opinion the appellant has established that damage

which he has suffered was caused by the respondent's breach

of contract.

He is therefore entitled to succeed in this appeal.

28.

The remaining quest ion i s t h a t of damages, I have

had the oppor tun i ty of r ead lng the Judgment t o be

d e l i v e r e d by the o t h e r members o f t he Cour t . I n the

r e s u l t my opinion w l l l n o t p r e v a i l . I t does no t therefore

seem u s e f u l or a p p r o p r l a t e f o r me to expres s an op in lon as

t o what amount t h e a p p e l l a n t would have been en t i t l ed to

recover had he succeeded. There are, however, some

matters I n r e l a t i o n t o damages which should be noticed.

F i r s t l y , I ment ion tha t the preference of counse l

f o r t h e a p p e l l a n t was tha t t he re shou ld be a new t r i a l

l imi t ed to the ques t ion o f damages i f we were of oplnion

t h a t t h e a p p e l l a n t was e n t i t l e d t o s u c c e e d . I would n o t

have been prepared to order a new t r i a l . The evldence on

damage was l e d . No ques t ion o f c r ed i t i s Involved. The

respondent opposes a new t r i a l and we are i n a s good a

p o s i t i o n as t h e t r i a l judge to a s ses s such damages a s t h e

a p p e l l a n t i s e n t i t l e d t o .

Then i t should be remembered t h a t t h e c o n t r a c t i s

s t i l l on foot . The appe l l an t con t inues t o be employed

1

as a o the r bene f i t s wh ich s e n i o r s p e c i a l i s t and t o r e c e i v e the emoluments and

are provided f o r I n h l s con t r ac t . He

h a s s u f f e r e d n o f i n a n c i a l l o s s i n the sense of l o s i n g

income which he might otherwlse have earned o r t h e s e c u r l t y

of the a p p l i e s In a employment which he has. The p r inc ip l e wh ich

case such as t h l s 1s t h a t the a p p e l l a n t may

29.

4

only recover such damage as he has suffered down to the

date of the institution of the proceedlngs, 22 June, 1978.

He is not entitled to recover damages in respect of any

period thereafter, at least in these proceedings; Lewis v.

Peachey (1882)i H. & C. 318; 158 E.R: 989 and McGregor on

Damages, 14th ed. (1980) paras.293-295. The reason for

this principle 1 s obvious. The respondent may at some

date in the future decide to change the system again. It

may be that under such a change the appellant would be

supplied wlth a sufficient flow of work. Alternatively he

may cease, for some other reason, to suffer damage. That

would be the case if he were to die prematurely or become, through Illness or accident, incapacitated for hls work as a surgeon. Furthermore, he might decide to give the

Commission three months notice thus brlnging the contract to an end.

What I have said is subject to any operation whlch should be accorded to Order 38 Rule 29 of the Rules of the Supreme

Court of the Australian Capital Territory. The rule

!

provides that where damages are to be assessed in respect

of any continuing cause of action they shall be assessed

down to the tlme of the assessment. In the light of the

discussion in National Coal Board v. Galley (1958) 1 A.E.R.91

at pp.100-iO2, I would have some reservatlon as to whether

the rule has any applicatlon in this case. I express no

30.

view upon the question, particularly as no argument

on the point was addressed to us. If the rule were

to apply damages would be assessed down to the date of

his Honour's Judgment, 27 November, 1980, rather than

22 June, 1978.

The only other matter I would mention in relation

to damages is the meagreness of the evidence about them.

There is evidence, although scant, of sone hurt to the

appellant's feelings. More importantly, although the

evidence plainly establishes that the appellant has not

had a sufflclent flow of work to maintain a high standard

of professlonal competence, there is no evidence of what

the partlcular consequences to him of that situation have

been. In those circumstances it would not seem to me

that the case is one for the award of a flgure anywhere

near the very substantial sum	for which senior counsel for
the appellant contended.

f That is all I wish to say about damages. For the

reasons earlier glven I would allow the appeal.

a