Nationwide News Pty Ltd v Edmund Bateman and Primary Health Care Limited

[2003] ACTCA 6

NATIONWIDE NEWS PTY LTD v EDMUND BATEMAN and PRIMARY HEALTH CARE LIMITED [2003] ACTCA 6 (14 March 2003)

CATCHWORDS

DEFAMATION – Practice and procedure – Discovery – Interrogatories – Relevance of documents and interrogatories relating to truth of matter complained of – Defence of fair comment – Claim of malice and for aggravated or exemplary damages.

Adam P Brown Male Fashions Proprietary Limited v Philip Morris Inc (1981) 148 CLR 170

In re the Will of F B Gilbert (1946) 46 SR (NSW) 318

Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621

Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137

Hadmor Productions v Hamilton [1983] AC 191

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397

ON APPEAL FROM A JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. ACTCA 22- 2002 
No. SC 437 of 2000

Judges:         Higgins CJ, Crispin P and Wilcox J
Court of Appeal of the Australian Capital Territory
Date:            14 March 2003

IN THE SUPREME COURT OF THE       )          No. ACTCA 22 of 2002
  )          No. SC 437 of 2000
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:NATIONWIDE NEWS PTY LIMITED

Applicant

AND:EDMUND BATEMAN

First Respondent

AND:PRIMARY HEALTH CARE LIMITED

Second Respondent

ORDER

Judges:  Higgins CJ, Crispin P and Wilcox J
Date:  14 March 2003
Place:  Canberra

THE COURT ORDERS THAT:

1. The application by Nationwide News Pty Limited for leave to appeal against orders made by Gray J on 26 July 2002 concerning Edmund Bateman be dismissed.

1. The application by Nationwide News Pty Limited for leave to appeal against orders made by Gray J on 26 July 2002 concerning Primary Health Care Limited be granted and the following orders made:

(a)The said appeal be allowed and the orders set aside.

(b)The notice of motion of Nationwide News Pty Limited, insofar as it relates to Primary Health Care Limited, be remitted to Gray J for further hearing and determination.

IN THE SUPREME COURT OF THE       )          No. ACTCA 22 of 2002
  )          No. SC 437 of 2000
AUSTRALIAN CAPITAL TERRITORY    )
  )

COURT OF APPEAL  )

ON APPEAL FROM A JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN:NATIONWIDE NEWS PTY LIMITED

Applicant

AND:EDMUND BATEMAN

First Respondent

AND:PRIMARY HEALTH CARE LIMITED

Second Respondent

Judges:  Higgins CJ, Crispin P and Wilcox J
Date:  14 March 2003
Place:  Canberra

REASONS FOR JUDGMENT

THE COURT:

1. This is a motion for leave to appeal against an interlocutory judgment of Gray J concerning discovery of documents and the administration of interrogatories in a defamation action.  The applicant for leave is the defendant to the action, Nationwide News Pty Limited (“Nationwide News”).  The respondents to the motion are the first and second plaintiffs in the action, Edmund Bateman and Primary Health Care Limited (“PHC”).  Dr Bateman is the managing director of PHC.

Background

1. The defamation action arises out of an article published in “The Sunday Telegraph” on 2 July 2000.  A transcript of the article, with added line numbers, is contained in Schedule A of the plaintiffs’ Statement of Claim.  We reproduce below the whole of that Schedule:

“Doctors racing the clock in business of medicine

Richard Zachariah

1.    In an emerging scandal, ‘five-minute medicine’ dispensed by the infamous Dr

2.     Geoffrey Edelsten in the 1980s has become common practice in Sydney.

3.     Anti-hero Dr Edelsten is the role model as big business takes over Sydney’s

4.     medical practices and our GPs become contractors dispensing scripts up against

5.     the clock.

6.     Yet while NSW AMA president Dr Michael Ridley bemoans the death of the

7.     individual doctor-patient relationship as ‘desperately sad’, public companies

8.    like Primary Health Care swallow up more private practices into their $100

9.   million-plus group.

10.    With seven major clinics, employing more than 300 doctors and spread from

11.  Chatswood and Castle Hill in the north and Campbelltown and Blacktown in the

12.  west, PHC is about to set up shop in Bondi Junction and Darlinghurst.

13.  In their wake, they leave the closed sign at small, neighbourhood practices,

14.     favoured for years by Australians.

15.     PHC has already acquired several practices in the eastern suburbs with the aim

16.  of relocating them into Bondi Junction.  Doctors contracted to the big groups

17.  claim that under their conditions of employment, it is impossible to give patients

18.     the time needed.

19.  It is clear from a contract I was shown that the GP who is paying the company 55

20.  per cent of his fees as overhead would need a turnover of up to nine patients

21.     every hour to earn the industry average of about $90.

22.     That equates to a little more than five minute consultations.

23.  This is well short of the Government’s recommendation of up to 25 minutes, for

24.     which they rebated $22.50.

25.  Of that bulk billing fee, the doctor receives $10.

26.  If the doctor was following the Government’s instructions, he or she would be

27.     earning $30 an hour – about half of what a plumber charges.

28.  And even more serious is the claim by doctors that if they were to give the

29.  patients the time they need, they would be working a 100-hour week,

30.     endangering their own health as well as that of the patients.

31.  AMA president Dr Kerryn Phelps says the average consultation the AMA

32.  recommends is 15 minutes.

33.  She says she is deeply concerned about the ethical questions inherent in

34.  corporatisation of medicine.

35.  ‘The ownership of private health records by a company leads to all sorts of

36.  ethical questions’, she says.

37.  Dr Ridley says it is important corporatised medicine is at least owned and run by

38.  doctors.

39.  ‘Doctors employed by other doctors are in a position to protest’, he says.

40.  PHC is the brainchild of its founder and practising GP Dr Edmund Bateman.”

1. On 11 July 2000 Dr Bateman and PHC instituted the defamation action.  By letter they gave particulars of the imputations, they allege, are conveyed by the article.  Those particulars were:

“First Plaintiff

(a)The first plaintiff, in conducting his medical practice, deliberately chose to emulate the dishonest, scandalous and unethical practices of Dr Geoffrey Edelsten.

(b)The first plaintiff was so dishonest and unethical a medical practitioner that he deserved to be struck off.

(c)The first plaintiff practises medicine in a dishonest, unethical and scandalous manner.

(d)The first plaintiff practised medicine in such a way as to place at risk the lives and health of his patients.

(e)The first plaintiff caused the company which he founded with the second plaintiff to practise medicine in a dishonest, unethical and scandalous manner which placed at risk the lives and health of its patients.

Second Plaintiff

(f)The second plaintiff in conducting medical practices deliberately chose to emulate the dishonest, scandalous and unethical practices of Dr Geoffrey Edelsten.

(g)The second plaintiff practises medicine in a dishonest, unethical and scandalous manner.

(h)The second plaintiff placed at risk the lives and health of patients attending its medical centres.

Further, to the extent that the following facts are not stated in the matter complained of (‘the infamous Dr Geoffrey Edelsten’) or did not form part of the general knowledge of the community, the plaintiffs rely upon them as conveying the above imputations as true innuendoes.

(a)       Dr Geoffrey Edelsten was widely reputed to be a dishonest and unethical doctor, who was convicted of criminal offences and was struck off the rolls.”

1. On 20 October 2000 Nationwide News filed a Defence in which it admitted publication but denied the matter complained of was, or was capable of being, defamatory of the plaintiffs or gave rise to any imputations defamatory of the plaintiffs.  Indeed the Defence went so far as to deny the matter complained of “was published of and concerning the plaintiffs”.  The Defence raised defences of qualified privilege and comment.  These defences were framed in such a way as to refer to the law in each of the six States and two Territories in which publication occurred.

1. On 25 July 2001 the plaintiffs filed a Reply in which they responded to the latter defences by alleging either that the publication of the matter was actuated by express malice or was not in good faith.

1. The defendant sought particulars of the matters upon which the plaintiffs relied in asserting malice and lack of good faith.  The plaintiff responded with a letter, dated 28 August 2001, containing 13 paragraphs.  Paragraph (a) read as follows:

“(a)the falsity of statements contained in the matters complained of, namely:

(i)that the industry average take home income for a GP is about $90 per hour;

(ii)that the government’s recommended time for a consultation is up to 25 minutes;

(iii)that the fee for 25 minutes consultations is $22.50

(iv)that the costs of running a normal medical centre are dissimilar to the overhead costs paid by doctors contracted to Primary Health Care;

(v)that doctors who work for Primary Health Care earn less than doctors who do not;

(vi)that the plaintiffs relied upon Dr Geoffrey Edelsten as a role model.”

1. On 9 August 2001 Dr Bateman made an affidavit of documents on behalf of both himself and PHC.  He produced certain documents but they did not include any documents concerning the contractual or work arrangements governing doctors employed by, or contracted to, PHC.  No immediate complaint was made about this.  However, on 10 April 2002 the solicitors for the defendant requested the solicitors for the plaintiffs to provide copies of documents falling within any of the following three categories:

“1.Contracts of employment entered into by Primary Health Care Limited or its related bodies corporate and general practitioners at the date or within 6 months before publication of the matter complained of;

2.Standard terms or conditions that Primary Health Care Limited or its related bodies corporate offered to general practitioners at the date or within 6 months before publication of the matter complained of; and

3.Documents which Primary Health Care Limited or its related bodies corporate provided to general practitioners at the date or within 6 months before publication of the matter complained of which contained terms on which employment or engagement as a contractor or agent were offered.”

1. The solicitors contended such documents “are relevant to the proceedings, as they relate to the truth of the matter complained of and to comment”.

1. On 24 January 2002 the defendant administered interrogatories to both plaintiffs.  Answers were filed on 9 April 2002; but the defendant did not regard the answers as satisfactory.  Many questions were met with the formula:

“The [first or second, as the case was] plaintiff objects to answering this interrogatory on the basis that it is vexatious, oppressive and does not relate to any matter in issue between the parties.”

The hearing at first instance

1. On 18 April 2002 the defendant filed a Notice of Motion in which it sought two substantive orders:

“1.That the first and second plaintiffs provide the information requested in the defendant’s Notice to First Plaintiff to Answer Interrogatories and Notice to Second Plaintiff to Answer Interrogatories provided to the first and second plaintiffs by letter dated 24 January 2002.

2.That the first and second plaintiffs provide the documents requested by the defendant in its letter dated 10 April 2002.”

1. The motion came before Gray J for hearing on 28 June 2002.  On 26 July 2002 his Honour delivered reasons for judgment.  He made an order that PHC answer interrogatories 1(c), 20, 33 and 34, but otherwise dismissed the motion with costs.

2. In an early part of his reasons for judgment, Gray J summarised the principles applicable to an application for an order requiring answers to interrogatories.  It is useful to set out this summary: 

   “.interrogatories must relate to the matters in question in the action (SCR O 34 r 1(4));

   .they are permitted to the same extent as questions may be asked in oral examination (O 34 r 1(4));

   .interrogatories enable a party to obtain from the opposite part particular information as to the facts material to the questions in dispute between them and for the purpose of securing admissions about such facts;

   .they should relate to a matter in question if it has some relevant association or connection with an issue;

   .an interrogatory must be sufficiently material at the stage that it is administered (SCR O 34 r 8) and whether it is so is a discretionary judgment to be made by the court.  That judgment is to be made in light of the purposes for which interrogatories are allowed;

   .an order compelling the answering of interrogatories should be made only where it serves some necessary and useful purpose.”  (Case references omitted)

3. The accuracy of this summary was not challenged before us. 

4. Gray J dealt first with the interrogatories administered to PHC.  He referred to “authority for the proposition that where fair comment is pleaded and the defendant has given particulars of the material upon which the comment was based, the plaintiff may be interrogated as to the truth of the matter relied upon in the particulars”.  He noted the plaintiffs had not argued against that proposition, so he was “prepared to assume that interrogatories may be delivered as to the facts upon which a defendant seeks to base his defence of fair comment if those facts can be properly identified”.

5. Gray J then set out a summary of what he understood to be “the facts upon which the defendant wishes to interrogate the plaintiff”.  The summary drew heavily upon the words used in Mr Zachariah’s article.  It did not directly refer to the terms of the letter in which the defendant’s solicitors provided particulars of the material upon which the comment was based.  The relevant item in that letter contained three paragraphs.  The first paragraph read:

   “(i)      matters of public interest, namely

   (A)the success and expansion of the second plaintiff in the provision of health care;

   (B)the terms on which doctors in the second plaintiff’s employ were required to work, to the extent that such terms might impact upon the quality of health care dispensed by the second plaintiff and its employees;

   (C)the replacement of traditional small practice partnerships by health care companies employing GPs, such as the second plaintiff;

   (D)the views on the above matters by leading members of the medical profession and/or the leaders of doctors’ representative bodies;”

6. The second paragraph of the letter referred to “facts stated in the matter complained of”.  Those “facts” were identified by reference to particular lines (or portions of lines) in the article itself.  This method of particularising the facts relied upon was criticised by Gray J; we think rightly.

7. The third paragraph in the particulars read:

   “(iii)the notorious fact that Dr Geoffrey Edelstein pioneered large, corporate bulk billing practices with employed doctors in Sydney, whose business ultimately failed.”

8. The letter went on to say:

   “(b)     All of the material is proper material for comment.

   (c)It is true.

   (d)The relationship is self evident, having regard to the matters of public interest above.”

9. After referring to the topic of facts upon which the comment was based, Gray J noted the letter of 28 August 2001 (set out in para 6 above) in which the plaintiffs particularised the basis of their allegation of malice.  [The first five sub-paragraphs of those particulars were also relied upon by Dr Bateman as relevant to his claim for aggravated or exemplary damages.]

10. After other comments, Gray J said:

    “Nothing was said before me as to why I should not regard interrogatories regarding the truth or falsity of the particularised statement as relevant and material even though the questions asked by way of the interrogatories were criticised on other grounds.  However, I consider that I should approach this matter only by regarding as relevant and material at this stage those interrogatories which can be related to the facts upon which the comment is said to be based, and including what can be said to be crystallised as to those facts from the particulars of malice that the plaintiffs have given.”

1. At paras 15-18 of his judgment, Gray J dealt with a series of interrogatories, directed to PHC (interrogatories 13 to 21), concerning employment contracts between general practitioners and PHC or its related corporate bodies.  In the course of that discussion, he said:

“I am satisfied that the interrogatories and the documents sought do not relate to the facts upon which it is said that the defence of fair comment is based, even as extended by the particulars said to be particulars of malice, in so far as those particulars may be said to extend the ‘facts’ upon which the comment is said to be based.

I say so because there is no clear fact discernable from the article to bring in direct issue the employment or other contracts that the second plaintiff has with medical practitioners as a basis for the comment made.  What is said to be the fact which founds the interrogatories in question is the assertion by the author of the article that ‘It is clear from the contract I was shown that the GP who is paying the company 55 per cent of his fees as overhead would need a turnover of up to nine patients every hour to earn the industry average of about $90’.  Yet the only fact that this statement is based upon is that the author was shown a contract.  It may be that there were terms of that contract that caused the author to express his opinions or comment but the fact upon which the comment is based is the contract that the author alleges that he was shown.  Once this is appreciated, the attempt by the interrogatories and by the application for further discovery to generally put in issue the contracts that the second plaintiff might have with its employees as independent contractors must fail as not being material at this stage.”

1. In the result, Gray J directed an answer only to interrogatory 20.  (Interrogatory 13 had already been answered.)

2. Gray J then turned to three interrogatories directed to PHC concerning the company’s purchase of medical practices.  His Honour said (at para 19):

   “Interrogatories 22 to 24 related to the second plaintiff purchasing medical practices and relocating them.  Although the defendant indicates that it relies upon the words in the article ‘In their wake, they leave the closed sign at small neighbourhood practices favoured for years by Australians’, I do not regard this as an identifiable factual matter but a mixture of fact and comment presumably based upon the fact of PHC acquiring private practices.  Because of the difficulty in ascertaining what may be said to be the fact on which the comment is said to be based I would not direct that answer be made to these interrogatories.”

3. Next, Gray J considered interrogatories to PHC concerning the earnings of medical practitioners and its knowledge of the recommended duration of general practitioners’ consultations (interrogatories 25-38).  His Honour directed answers only to interrogatories 33 and 34, concerning the Australian Medical Association recommendation about average consultation time.  His Honour disallowed each of the remaining interrogatories for one of the following reasons: the difficulty of disentangling fact from comment in relevant portions of the published article, that some clearly factual assertions were “much better suited to a notice to admit facts” or that “no useful purpose” would be served by an answer to particular interrogatories.  The defendant does not now press for answers to all the interrogatories in this category.  We will return to those that are pressed.

1. Gray J then turned to the interrogatories administered to Dr Bateman.  Although the defendant’s application for leave to appeal encompasses this aspect of his Honour’s judgment, that matter is not now pressed.

2. Gray J did not expressly advert to the application for discovery of documents relating to the terms of employment of general practitioners, by PHC or its related bodies corporate.  He made no order for discovery of such documents.  The counsel who argued, on each side, the application for leave to appeal both assumed this was because of the view taken by his Honour about interrogatories concerning such contracts.  We think that assumption is correct.  Like counsel, we treat the matter in that way, regarding the matter of discovery as being a live issue before us.  It is raised by the defendant’s filed Notice of Motion for Leave to Appeal from Interlocutory Judgment and its foreshadowed grounds of appeal.

The contentions of counsel

1. The applicant for leave

1. In his Summary of Argument, Mr Thomas Blackburn, counsel for Nationwide News, set out six propositions which he said were fundamental to his client’s argument:

   “(a)the defence of fair comment at common law must be based on facts truly stated;

   (b)such facts must be proved at trial to be true;

   (c)facts in issue between the parties include the terms upon which general practitioners are employed by Primary Health Care Limited, in particular the turnover of patients necessary for a general practitioner to secure adequate remuneration;

   (d)the documents and answers sought plainly relate to that issue.

   (e)The documents and answers also relate to the issues raised by the allegation of malice, and further the respondents’ claim for aggravated and exemplary damages …

   (f)On ordinary principles, the interrogatories administered are necessary and relate to the same issues …”  (References to transcript and authorities omitted)

2. There is no dispute about propositions (a) and (b).  The major contest concerns proposition (c).  As to that matter, Mr Blackburn said:

   “It is respectfully submitted that his Honour has misapprehended the true factual sub-stratum plainly contained in the article.  What the article asserts is that doctors are opining that it is impossible to give patients the time needed under the conditions of their employment.  The author of the article bases this comment factually upon, inter alia, the fact that a GP who is paying 55% of his fees as overhead would need a turnover of nine patients per hour to earn the industry average of $90.00.

   The factual sub-stratum upon which comment is based can be stated expressly or impliedly in the matter complained of: Hawke v Tamworth Newspapers [1983] 1 NSWLR 699 at 704C. One of the fact [sic] supporting the comment in lines 16-18, properly understood, is that GPs are employed by the second respondent on the terms alleged. Lines 19-21 of the matter complained of obviously carry the implication that there is more than one such contract.

   It follows that his Honour has fallen into error in concluding that the only relevant fact is that there is only one such contract, or that the author only saw one such contract.”

3. Mr Blackburn also argued the remuneration of PHC’s medical employees was relevant to the issues of malice and aggravated or exemplary damages.  This was because the plaintiffs relied upon the falsity of the article in relation to these issues.  In response to a comment by Gray J (at para 11 of his judgment) that malice is concerned with a defendant’s belief and “(a) person’s belief in the truth of an objective fact is not established by showing that the belief is true”, Mr Blackburn said:

   “To say that the objective truth or falsity of a matter does not prove or disprove the subjective belief or a person in that matter is correct as a legal proposition.  However, it is quite a different proposition to say that the objective truth or falsity of a matter can never be a factual matter which in combination with other matters can assist a factual inference of malice.  The appellant does not know how the respondents intend to use the particulars of malice, …”

4. During the course of oral argument, Mr Blackburn made it clear his client pressed for discovery of documents relating to the terms and conditions upon which medical practitioners had been employed by PHC or its “related bodies corporate”.  He conceded the latter term is ambiguous and needs refinement.  Mr Blackburn also identified the particular interrogatories that his client now pressed.  As indicated, they did not include any interrogatories directed to Dr Bateman.  They consisted only of PHC’s interrogatories 22, 23, 24, 31, 32, 35, 36, 37 and 38.

1. The respondents to the application

1. The summary of argument provided by Mr Bruce McClintock SC, counsel for Dr Bateman and PHC, consisted almost entirely of submissions based on the fact that Gray J’s judgment was a discretionary one concerning a matter of practice and procedure.  Mr McClintock cited the decision of the High Court of Australia in Adam P Brown Male Fashions Proprietary Limited v Philip Morris Inc (1981) 148 CLR 170 at 177, and a number of the cases that have applied that decision. In Adam P Brown, Gibbs CJ, Aickin, Wilson and Brennan JJ quoted with approval a statement by Jordan CJ in In re the Will of F B Gilbert (1946) 46 SR (NSW) 318 at 323:

“… I am of opinion that, … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights.  In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice.  The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”

1. Mr McClintock also cited a passage in the judgment of Kitto J in Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627 concerning the presumption in favour of the correctness of a discretionary judgment. Kitto J said:

“A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts.  Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.”

1. This passage was adopted and applied by the Full Federal Court of Australia in Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137 at 147.

1. Mr McClintock also referred to the speech of Lord Diplock in Hadmor Productions v Hamilton [1983] AC 191 at 220. His Lordship there described the role of an appellate court in relation to a discretionary judgment:

“It may set aside the judge’s exercise of his discretion on the ground that it was based upon a misunderstanding of the law or the evidence before him or upon an inference that particular facts existed or did not exist, which, although it was one that might legitimately have been drawn upon the evidence that was before the judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal; or upon the ground that there has been a change of circumstances after the judge made his order that would have justified his acceding to an application to vary it.”

1. Under the heading “The Merits” in his summary of argument, Mr McClintock set out an uncontentious summary of legal principles concerning interrogatories.  He also referred to the defendant’s delay in objecting to the extent of the plaintiffs’ discovery of documents.  He then said:

“In relation to both issues, it is relevant to note that the applicant’s own answers to interrogatories mean that the defences of qualified privilege and comment cannot possibly succeed.  No defence of truth is pleaded.”

1. In oral argument, Mr McClintock identified two bases of his submission that the defences of qualified privilege and comment “cannot possibly succeed”.  First, there was a discrepancy between, on the one hand, Mr Zachariah’s statement, in the article, that he had been shown a copy of a contract and, on the other, a statement in answer to interrogatories by Warren Beeby, Editorial Manager of Nationwide News, that Mr Zachariah had been informed of the terms of the contract by a medical practitioner identified as “Dr A”.  Second, Mr Beeby answered negatively a question in the plaintiffs’ interrogatories as to whether, prior to publishing the article, Nationwide News believed propositions corresponding with the imputations claimed by the plaintiffs to be true.

1. Mr McClintock also contended the interrogatories were unnecessary and oppressive.  In the latter connection he made the point that, if there were 350 employed doctors, it would be necessary to collect and consider at least 350 employment contracts.  There is no evidence as to where or how the contracts are held or the extent of the burden of that obligation.

1. Mr McClintock also made observations about the form of some interrogatories and the description of documents required to be produced.

Conclusions

1. The conditions of employment

1. As we have indicated, there is no dispute as to the relevant legal principles.  Nor is there any doubt that the decision of Gray J was a discretionary decision to which are applicable the principles stated in Adam P Brown.  However, contrary to the oral submission of Mr McClintock, those principles do not limit appellate court intervention to cases in which the primary judge has made an error of law resulting in a decision that is wrong in principle.  The relevant circumstances are wider than that.  They include, according to the formulation of Kitto J, “making a mistake as to the facts”, or, according to Lord Diplock, a misunderstanding of the evidence.

1. In the present case, the major complaint of Nationwide News is that Gray J misunderstood the thrust of the newspaper article.  According to Mr Blackburn, the fundamental point made by the article was that, as a result of the contractual terms imposed on them by PHC, employed doctors are forced either to give too little consultation time to patients or to work excessively long hours; in either case with dangers to health.  Mr Blackburn said the thrust of the article was captured by Mr Beeby’s answer to an interrogatory inquiring “[w]hat imputation or imputations (if any) did the defendant intend to convey of the second plaintiff in publishing the matter complained of?”  Mr Beeby answered:

“(a)the second plaintiff put in place contracts of employment with its doctors that were likely to cause those doctors to spend less time with patients than is recommended by the Australian Medical Association;

(b)the second plaintiff employed doctors on terms and conditions which required those doctors to choose between spending only about 5 minutes with each patient and earning less than the average hourly rate for Australian doctors;

(c)the second plaintiff employed doctors on terms and conditions which required those doctors to choose between spending insufficient time with their patients and earning less than the industry average hourly salary; and

(d)the second plaintiff employed doctors on terms and conditions which required those doctors to, if they chose to spend the time with patients that is recommended by the Australian Medical Association, work extremely long hours.”

1. It seems to us, with respect, that Gray J did misapprehend the thrust of the article.  We cannot agree with his Honour’s statement (in para 17 of his reasons) that “there is no fact discernable from the article to bring in direct issue the employment or other contracts that the second plaintiff has with medical practitioners as a basis for the comment made”.  On the contrary, it seems to us the article dealt in a general way with PHC’s method of conducting its business.  It made two criticisms: first, that employee doctors were forced to choose between inadequate consultation  times or excessively long hours, in either case thereby jeopardising their health or their patients’ welfare; and, second, that the operations of PHC and like companies meant the loss of accessible community medical centres.

1. In relation to the first matter, several passages in the article made clear that the criticism was a general one: “common practice in Sydney” (line 2), “our GPs become contractors dispensing scripts up against the clock” (lines 4-5), “Doctors contracted to the big groups claim that under their conditions of employment, it is impossible to give patients the time needed” (lines 16-18), “the claim by doctors that if they were to give the patients the time they need, they would be working a 100-hour week” (lines 28-29).

1. We respectfully feel Gray J misunderstood the significance of the reference (in line 19 of the article) to “a contract I was shown”.  It is, at least, strongly arguable that Mr Zachariah was not concerned only with that contract; he was using it as an example of a wider problem.  He said “the GP” (that is, any GP) who is paying the company 55% of his fees would need a turnover of nine patients per hour to earn the industry average of $90.

1. The particulars supplied by Nationwide News made plain that it sought to rely upon the terms and conditions applicable to all doctors employed by PHC: see para (i)(B) in the extract quoted in para 15 above.

1. We respectfully think Gray J should have directed himself that there was, at least, a serious possibility that, at trial, it would be determined the article dealt generally with the conditions under which PHC employed doctors, and the comments contained in the article were related to that subject, and not only with the particular contract whose terms were disclosed to Mr Zachariah.  If his Honour had taken that course, he would have accepted it was necessary for Nationwide News to demonstrate the truth of its factual assertions concerning contracts generally, if it was to make good its fair comment defence.  That would have made relevant the terms of employment of all PHC employed doctors.  It would have followed that all documents identifying these terms are discoverable.  Also, subject to discretionary matters including their proper formulation, interrogatories concerning these terms of employment would be allowed.

1. There is no substance in the contentions of Mr McClintock noted at para 36 above.  Any discrepancy between the article and Mr Beeby’s understanding of the facts is a matter to be evaluated at trial.  There is no conflict between Nationwide News believing the truth of the facts expressly or impliedly asserted by the article and it not believing the factual accuracy of the imputations suggested by PHC.

1. Having regard to the lack of any relevant evidence, there is no basis for holding that discovery would be oppressive.

1. Mr Blackburn recognised that, for leave to appeal to be granted, it was necessary for him to demonstrate that, otherwise, substantial injustice would result: see Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. He contended this was the present case; if his client was denied access to the employment contracts, or the right to administer interrogatories concerning their terms, it would be unable to lay the factual foundation for its defence of fair comment upon that matter. Mr Blackburn made a similar assertion in relation to his clients’ inability to meet that part of the plaintiff’s cases on malice and aggravated/exemplary damages that depended upon the alleged falsity of the facts asserted in the article.

1. There is force in Mr Blackburn’s claim of substantial injustice.  While it would be possible for his client to issue a subpoena for production of the documents, counsel agreed the same argument about relevance would then arise.  As the documents are held by a party, it is preferable they be produced on discovery immediately, rather than at or near the trial.

1. In our opinion, Gray J should have ordered discovery of the plaintiffs’ documents concerning the conditions of employment of medical practitioners.  However, there is a need for refinement of the description of the documents that was set out in the defendants’ solicitors’ letter of 10 April 2002 (para 7 above).  There is a difficulty about the term “related bodies corporate”.  Also we think category 3 should be omitted.  It includes documents that never achieved binding force.

1. It is preferable for us to allow the defendant’s advisers to reconsider the description, preferably in consultation with the solicitors for the plaintiffs.  This course can best be accommodated by our remitting the matter of discovery to Gray J.

1. The interrogatories concerning conditions of employment (13 to 21) have either been already answered or are now not pressed.

1. Location of medical centres

1. There is no claim for further and better discovery in relation to this topic but there are three contentious interrogatories.  They are:

“22.Has PHC or its related bodies corporate ever purchased medical practices?

23.If the answer to the preceding interrogatory is yes, has PHC or its related bodies corporate ever ceased to use the premises used by a medical practice at the time it was purchased and moved the place of employment of the general practitioners in that practice to a new location?

24.If the answer to the preceding interrogatory is yes, please state:

(a)the number of occasions on which this has occurred; and

(b)the locations from which and to which each such practice has moved.”

1. As previously indicated, we see closure of medical practices as one of the two principal complaints made in the article.  Seemingly, nobody argues it is defamatory to say of a person or company that he/she/it has closed down local medical practices.  However, we accept Mr Blackburn’s contention that, if his client is to make good its defence of fair comment, it must establish the truth of all material facts asserted in the article.  Interrogatories 22-24 are designed to assist it to do so.  In principle, they should be allowed.  However, once again, it would be desirable for their form to be reconsidered, especially to refine the term “related bodies corporate”.  Accordingly, this aspect of the interrogatories should be remitted to Gray J.

1. Knowledge of consultation times and earnings

1. The interrogatories relevant to these matters that are unanswered and still pressed are as follows:

“31.At the time of publication of the matter complained of did PHC know, or does it now know, the average time which general practitioners employed or engaged by PHC or its related bodies corporate spent with each patient in a patient consultation?

33.If the answer to the preceding interrogatory is yes, what was the average time spent?

…

35.At the time of publication of the matter complained did PHC know the average hourly wage for general practitioners in Sydney?

36.If the answer to the preceding interrogatory is yes, what was the average hourly wage for general practitioners in Sydney?

37.Did you know at the time of publication of the matter complained of did PHC know, or does PHC now know, the average hourly wage for general practitioners employed or engaged by PHC or its related bodies corporate in Sydney?

38.If the answer to the preceding interrogatory is yes, what was the average hourly wage for general practitioners employed or engaged by PHC or its related bodies corporate in Sydney?”

1. The relevance of the matters referred to in these interrogatories is more debateable than that of those concerning the previous topic.  Much may depend upon the course of the trial.  However, we can envisage circumstances in which these matters will become relevant, even if only in relation to the claim for aggravated/exemplary damages.  In principle, we would allow these interrogatories.  If there is any problem about their form, that matter should be discussed between the parties and any dispute resolved by Gray J.

Disposition

1. In the result, we propose to allow the application by Nationwide News to appeal against that part of the order of Gray J that affected the applications made by PHC.  We will allow that appeal and set aside the whole of his Honour’s orders, insofar as they affect PHC; as distinct from Dr Bateman.  We will order that, insofar as it relates to the case of PHC, the notice of motion dated 18 April 2002 be remitted to Gray J for further hearing and determination .

1. The course we propose to take will have the effect of retaining the order for costs made by Gray J in favour of Dr Bateman, but not that made by his Honour in favour of PHC.  Given that these parties were represented by the same counsel and solicitors before Gray J, it will be necessary for the taxing officer to apportion the costs.  There may be virtue in ascribing one-half of the total costs to the representation of each party.

1. We do not propose to make any order in respect of the costs of the application for leave to appeal and appeal.  Each side has had a degree of success.  It would be unfair to cast the whole burden on one side, as would happen if the costs were made costs in the cause.  Having regard to the mixed outcome, it is preferable to leave each side to pay his or its own costs.

   I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

   Associate:
   Date:      14 March 2003

Counsel for the Appellant:  Mr T Blackburn

Solicitor for the Appellant:  Blake Dawson Waldron

Counsel for the Respondent:  Mr B McClintock SC

Solicitor for the Respondent:  Colquhoun Murphy

Date of hearing:  18 February 2003

Date of judgment:  14 March 2003