Pisano v Health Solutions (WA) Pty Ltd
[2012] WASC 84
•13 MARCH 2012
PISANO -v- HEALTH SOLUTIONS (WA) PTY LTD [2012] WASC 84
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 84 | |
| Case No: | CIV:1325/2012 | 28 FEBRUARY 2012 | |
| Coram: | PRITCHARD J | 13/03/12 | |
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Application for interim injunction refused | ||
| B | |||
| PDF Version |
| Parties: | GIGLIETTO PISANO HEALTH SOLUTIONS (WA) PTY LTD |
Catchwords: | Injunctions Interim injunctions Application for injunction to restrain defendant from acting upon a purported termination of a contract Turns on own facts Implied terms Terms implied by custom and usage Terms implied in fact |
Legislation: | Nil |
Case References: | Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410 Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148 CH Giles & Co Ltd v Morris [1972] 1 WLR 307 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 Horsman v MG Kailis Pty Ltd [2009] WASC 166 Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48 Printing & Numerical Registering Company v Sampson (1875) LR 19 Eq 462 Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
HEALTH SOLUTIONS (WA) PTY LTD
Defendant
Catchwords:
Injunctions - Interim injunctions - Application for injunction to restrain defendant from acting upon a purported termination of a contract - Turns on own facts
Implied terms - Terms implied by custom and usage - Terms implied in fact
Legislation:
Nil
Result:
Application for interim injunction refused
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Category: B
Representation:
Counsel:
Plaintiff : Mr C P Stokes
Defendant : Mr M L Williams
Solicitors:
Plaintiff : Chris Stokes & Associates
Defendant : DLA Piper Australia
Case(s) referred to in judgment(s):
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410
Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148
CH Giles & Co Ltd v Morris [1972] 1 WLR 307
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
Horsman v MG Kailis Pty Ltd [2009] WASC 166
Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48
Printing & Numerical Registering Company v Sampson (1875) LR 19 Eq 462
Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
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- PRITCHARD J:
Background
1 The plaintiff is an orthopaedic surgeon, who has worked at the Peel Health Campus (PHC) since February 2000. The defendant operates the PHC. Since 2000, the plaintiff has performed surgery on both public patients (that is, patients within the public health system) and private patients. The basis on which the plaintiff was, until 28 February 2012, permitted to treat public patients at the PHC, was set out in an agreement made on 17 September 2009 with the defendant (the Agreement). It was not disputed that the plaintiff is not employed by the defendant, but instead treats patients at the PHC as an independent contractor.
2 Clause 1 of the Agreement provided that it expired on 28 February 2012. On 30 November 2011, Mr Justin Walter, the CEO of the defendant, wrote to the plaintiff advising him that the Agreement would not be extended beyond its termination date of 28 February 2011. Mr Walter also advised that the plaintiff would not be allocated any operating theatre time for public patients, nor would he be required to provide any orthopaedic surgical services to public patients at the PHC beyond 28 February 2012. However, Mr Walter also advised that the defendant would continue to permit the plaintiff to see private patients at the PHC, although his operating theatre time allocation would be reduced to reflect the fact that he would no longer be operating on public patients.
3 The plaintiff has now commenced proceedings against the defendant in this court by a writ of summons. In the indorsement of claim, the plaintiff's claim is said to be for an interlocutory and permanent injunction, or further or alternatively, damages, in respect of a threatened or actual breach of the Agreement.
4 By a chamber summons dated 27 February 2012, the plaintiff sought an interim injunction against the defendant in the following terms:
1. Until after judgment in this action, or further order, the defendant, whether by itself, its officers, servants, agents or otherwise, be restrained from acting upon or giving effect to its purported termination of the Agreement made on 17 September 2009 between it and the plaintiff;
2. Until after judgment in this action, or further order, the defendant whether by itself, its officers, servants, agents or otherwise shall
- (a) continue to treat the Agreement referred to in paragraph 1 above as remaining on foot and binding upon the parties to that agreement;
(b) continue to grant the plaintiff all rights presently enjoyed by the plaintiff pursuant t that Agreement
until the determination of the plaintiff's application for re-appointment pursuant to clause 13 of the Peel Health Campus bylaws, including any rights of appeal pursuant to clause 19 of the said Bylaws;
- 3. Until after judgment in this action, or further order, the defendant whether by itself, its officers, servants, agents or otherwise be restrained from:
(a) entering into any agreement, arrangement or other transaction; or
(b) taking any action or doing anything;
having the effect that the re-appointment of the plaintiff pursuant to the Agreement referred to in paragraph 1 is or will be terminated or otherwise adversely affected.
6 Having heard the submissions of counsel, I determined to decline the grant of an injunction and indicated that I would publish my reasons for decision at a later time. These are my reasons for declining to grant the interim injunction sought by the plaintiff.
Principles in relation to the grant of an injunction
7 The principles relating to the grant of an interim injunction are well established. First, the plaintiff must show that there is a serious question to be tried, or must make out a prima facie case (in the sense that if the evidence remains as it is, there is a probability that at the trial of the action the plaintiff would be entitled to relief). Secondly, the plaintiff must show that if the injunction is not granted the plaintiff will suffer irreparable injury for which damages will not be an adequate compensation. Thirdly,
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- the plaintiff must demonstrate that the balance of convenience favours the grant of an injunction: Castlemaine Tooheys Ltd v The State of South Australia(1986) 161 CLR 148, 153 (Mason ACJ); Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd(2001) 208 CLR 199, 217 - 218 [13] (Gleeson CJ).
8 In so far as the need for a prima facie case is concerned, it is not necessary that the plaintiff show that it is more probable than not that he or she would succeed at trial. Rather it is enough to show that there is a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the likelihood of success needs to be depends upon the nature of the plaintiff's asserted rights and the practical consequences likely to flow from the order sought: Australian Broadcasting Corporation v O'Neill(2006) 227 CLR 57, 81 - 84 [65] - [71] (Gummow & Hayne JJ), 68 [19] (Gleeson CJ & Crennan J agreeing).
9 Accordingly, whether there is a serious question to be tried and whether the balance of convenience favours the grant of an injunction are not wholly independent inquiries, but rather must be considered together: see also Horsman v MG Kailis Pty Ltd[2009] WASC 166 [92] (Beech J). Nevertheless, it will assist in explaining my reasoning with respect to the arguments raised at the hearing if initially I deal separately with each of the considerations relevant to the grant of an interim injunction. Before doing so it is necessary to set out a little more of the factual background to the plaintiff's case.
The plaintiff's case
10 The plaintiff's case was that the defendant's failure to renew the Agreement would constitute a breach of a term which the plaintiff contended should be implied into the Agreement. Initially the plaintiff's case was that two distinct terms should be implied into the Agreement. However in the course of the hearing counsel for the plaintiff abandoned his contention in relation to one of those terms, and relied on the implication of one term only.
11 The term which the plaintiff submitted should be implied into the Agreement was 'an implied obligation on the defendant to renew the plaintiff's appointment on the terms of the existing agreement provided the plaintiff satisfies the requirements of the credentialing committee and the medical advisory committee and otherwise complies with his obligations under [the Agreement]' (the Renewal Term).
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12 In order to understand the content of the Renewal Term, it is necessary to explain the basis upon which medical practitioners are permitted to treat patients at the PHC. In order to practise medicine at the PHC, a medical practitioner needs to be appointed as a 'Credentialled Practitioner' for the purposes of the Peel Health Campus By-Laws (the By-Laws): cl 1.1 of the By-Laws. The By-Laws are made by the Board of Directors of the defendant (the Board) and provide the framework for the operation of the PHC. (The By-Laws apply to the plaintiff and the defendant independently of the Agreement, but cl 6 of the Agreement also requires the parties to abide by the By-Laws.) Appointment as a Credentialled Practitioner amounts to recognition by the Board that the practitioner has the necessary qualifications, training, experience and clinical competence to practise medicine or to practise as a specialist in a particular field of medicine. The decision to appoint someone as a Credentialled Practitioner is made by the Board following the receipt of recommendations from the Credentials Committee and the Medical Advisory Committee at the PHC: cl 13.1 of the By-Laws.
13 A Credentialled Practitioner who wishes to treat public patients will then contract with the PHC in relation to the use of the PHC's staff, equipment and other resources to enable the practitioner to treat public patients, and in relation to the fees which the PHC will pay to the practitioner for doing so. The Agreement sets out the terms of the contract between the plaintiff and the defendant for this purpose.
14 On 28 February 2012, the Board accepted the plaintiff's credentials as an orthopaedic surgeon and reappointed him as a Credentialled Practitioner for a period of three years, expiring on 1 March 2015.
15 Against this background, it can be seen that the Renewal Term which the plaintiff submitted should be implied into the Agreement was to the effect that the defendant would be under an obligation to enter into a further contract with the plaintiff to permit the plaintiff to treat public patients at the PHC, on the same or similar terms as the Agreement, provided that the plaintiff was a Credentialled Practitioner and had otherwise complied with his obligations under the Agreement.
16 One further matter should be noted at this point. The Agreement expressly incorporates the provisions of another agreement, namely the 'Terms of Agreement Concerning the Provision of Medical Services by Visiting Medical Practitioners in State Government Non-Teaching Hospitals of Western Australia' dated 4 September 1995 (the 1995 AMA Agreement): cl 8.7 of the Agreement. The 1995 AMA Agreement was an
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- agreement between the then Minister for Health and the Western Australian Branch of the Australian Medical Association by which the parties agreed on the terms on which public hospitals would 'engage or permit the practice by medical practitioners in public hospitals in this State' [sic]: par (B) of the 1995 AMA Agreement. The Agreement expressly provided that the 1995 AMA Agreement would be subsidiary to the By-Laws and to the terms of the Agreement itself: cl 8.7 of the Agreement.
17 The plaintiff submitted that the Renewal Term should be implied into the Agreement on the basis of custom or usage and further, or alternatively, should be implied in fact.
(i) Whether there exists a serious question to be tried
(a) Implication of the Renewal Term on the basis of custom or usage
18 The phrase 'custom or usage' includes established mercantile usage or professional practice: Byrne & Frew v Australian Airlines Ltd(1995) 185 CLR 410, 440 (McHugh & Gummow JJ). The principles governing the circumstances in which custom or usage may form the basis for the implication of a term into a contract are well established. They are, first, that the existence of a custom or usage that will justify the implication of a term is a question of fact: Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd(1986) 160 CLR 226, 236.
19 Secondly, the custom must be reasonable, certain and unambiguous: Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd(1973) 129 CLR 48, 61 (Stephen J, Menzies & Gibbs JJ agreeing).
20 Thirdly, there must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract: Con-Stan Industries (236). It is not necessary that the custom be universally accepted because a requirement of that kind could be defeated by the denial by one litigant of the very matter that the other party seeks to prove in the proceedings: Con-Stan Industries (236). The issue instead is whether the custom is so notorious that it is reasonable to assume that the parties contracted on the basis of the custom, and that it is therefore reasonable to import such a term into the contract: Con-Stan Industries (237); Byrne & Frew (423) (Brennan CJ, Dawson & Toohey JJ), (440) (McHugh & Gummow JJ).
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21 Fourthly, a term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement, because the presumed intention of the parties (on which the implication of a term by custom rests) must give way to their actual intention as set out in the express terms of their agreement: Con-Stan Industries (236 - 237); Byrne & Frew (440) (McHugh & Gummow JJ).
22 The plaintiff's case as to the existence of a custom rested on evidence which he contended established a course of conduct between the plaintiff and the defendant between 2000 and 2011. The plaintiff submitted that this evidence established that the plaintiff was re-appointed 'on a routine basis', in 2003, 2006 and 2009, and that the contract entered into on each occasion permitted the plaintiff to treat public patients at the PHC in return for a fee paid by the defendant.
23 I digress to observe that this was a case in which it was open to the plaintiff to adduce evidence of the circumstances surrounding entry into the Agreement (and including circumstances surrounding earlier contracts between the defendant and the plaintiff). The purpose of such evidence was to establish the parties' presumed intention for the purpose of determining whether the Renewal Term should be implied into the Agreement. In cases involving implied terms, evidence may be admitted to establish a matter in the common contemplation of both parties but which was not a contractual provision actually agreed upon because it was a matter of common assumption: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 352 - 354 (Mason J).
24 I am not persuaded that there exists a serious question to be tried concerning the existence of a custom which would warrant the implication of the Renewal Term into the Agreement. That conclusion follows from the nature of the evidence before the court in this application. There were two main deficiencies in that evidence.
25 First, no attention was paid in submissions to identifying the relevant industry or profession in which the custom was said to exist. The assumption underlying the plaintiff's case was that the relevant custom existed within the practice of the defendant and specialist medical practitioners at the PHC in their contractual relations. I will assume (without deciding) for present purposes that that would constitute adequate parameters for the existence of any relevant custom. However, I am unable to accept that the evidence before the court established the existence of a custom even within such parameters.
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26 The only evidence before the court concerned the plaintiff's own contractual relationship with the PHC. There was no evidence as to the terms of any contracts between the defendant and other medical specialists who treat public patients at the PHC in return for a paid fee by the defendant. There was also no evidence of any practice adopted by the defendant in offering further contracts to medical practitioners once existing contracts expired. Counsel for the plaintiff submitted that, for the purposes of the present application, evidence of the practice adopted by the defendant and the plaintiff in their contractual relations constituted sufficient evidence of the existence of a custom between the defendant and medical specialists at the PHC. In the absence of any evidence of the practice between the defendant and any other medical practitioner it is not possible to conclude that the defendant's practice with respect to the plaintiff's contract was indicative of its practice with respect to any other medical practitioner at the PHC.
27 The second deficiency in the evidence was that it did not establish any custom even in the contractual relations between the plaintiff and the defendant. Other than for assertions by the plaintiff in his affidavit that his contract had been renewed on a routine basis in 2003 and 2006, there was no evidence of the circumstances in which, or the terms on which, those contracts were entered into. Counsel for the plaintiff accepted that what had occurred when the plaintiff's contract was renewed prior to 2008 could only be the subject of speculation. As for the renewal of the plaintiff's contract in 2009, the evidence was extremely limited. Apart from a copy of the Agreement itself, the only other evidence was a copy of a letter dated 18 June 2008 from the Medical Director of the PHC to the plaintiff. That evidence merely indicated that on the expiry of his earlier contract, the plaintiff was invited to enter into a further contract. Over a year later, the Agreement was entered into.
28 The evidence of the approach taken on that one occasion did not, in my view, constitute evidence of a custom or practice as between the plaintiff and the defendant as to the circumstances in which the defendant would be prepared to offer the plaintiff a further contract to treat public patients at the PHC in return for payment of a fee by the defendant.
29 A further difficulty in implying the Renewal Term as a matter of custom would have been that the content of the Term, as a matter of alleged custom, was not entirely clear. In his submissions, counsel for the plaintiff referred to the term of the Agreement as being for three years, and submitted that the evidence established that the plaintiff's contracts
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- with the defendant had always been for a term of three years. However, the Agreement itself had a term of just under two years and five months.
30 I turn now to the alternative basis on which the plaintiff submitted that the Renewal Term could be implied into the Agreement, namely by implication in fact.
(b) Implication in fact
31 The plaintiff's case that the Renewal Term should be implied in fact was founded on the operation of cl 2(b) and cl 4(1) of the 1995 AMA Agreement, which was incorporated into the Agreement by its terms.
32 The requirements which must be met in order to imply a term in fact into a contract which is complete on its face are:
(1) the term 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; and
(5) it must not contradict any express term of the contract.
See BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, 283 (Lord Simon, Viscount Dilhorne & Lord Keith agreeing); Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596, 605 - 606 (Mason J, Barwick CJ, Gibbs, Stephen & Aickin JJ agreeing); Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (347) (Mason J, Stephen & Wilson JJ agreeing), (404) (Brennan J).
33 Having considered the submissions of counsel, the terms of the 1995 AMA Agreement, and the Agreement, I consider that the plaintiff demonstrated only a weak case for the implication of the Renewal Term in fact. It seems to me that there are real questions as to how the 1995 AMA Agreement as a whole, and cl 2(b) and cl 4(1) in particular, could have any practical operation in the context of the Agreement. Consequently, it is difficult to see how the plaintiff could establish that the implication of the Renewal Term into the Agreement would be necessary to give business efficacy to that Agreement, or that it was so obvious that
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- it went without saying that the Renewal Term should be implied into the Agreement in the circumstances.
34 I will deal first with the plaintiff's case in so far as it relied on cl 2(b) of the 1995 AMA Agreement.
Clause 2(b) of the 1995 AMA Agreement
35 Clause 2(b) relevantly provided:
2. Principles of Operation of this Agreement
In the operation of this Agreement and the exercise of powers and discretions contemplated by this Agreement, the following principles shall be taken into account:
…
(b) Hospitals should subject to approval of competence and the other requirements of this Agreement endeavour to attract and accredit according to contemporary medical standards and retain all appropriately qualified and practising medical practitioners within the medical disciplines appropriate to providing services to community hospitals. This will enable medical practitioners who require access to the hospital who practice within the community and whose patients require hospitalisation as part of their treatment to admit and treat their public patients and private patients and compete equally for use of the hospitals [sic] resources.
37 It seems to me that the plaintiff's case in so far as it relied on cl 2(b) of the 1995 AMA Agreement is, at best, only arguable, for several reasons. First, at first blush it appears from the language used in cl 2(b), and the nature of the 1995 AMA Agreement itself, that cl 2(b) should be construed as merely aspirational in nature. That is, the first sentence of the clause set out what hospitals should aim to do, but the obligation is merely to 'endeavour' to achieve that objective, while the second sentence
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- of the clause appears to set out what would be the result of the successful pursuit of that endeavour. Counsel for the plaintiff accepted that cl 2(b) could be viewed as aspirational in nature, but submitted that cl 2(b) nevertheless was a guiding principle in relation to the operation of the Agreement between the plaintiff and the defendant. If, on its proper characterisation, cl 2(b) is merely aspirational in nature, it is difficult to see how the implication of the Renewal Term would be necessary to give business efficacy to the Agreement.
38 Secondly, the word 'retain' in cl 2(b) is amenable to an alternative construction to that advanced by the plaintiff. Counsel for the defendant submitted that the 'obligation' on a hospital to 'retain' practitioners should be understood to mean to 'contract with' or to 'engage', rather than to renew the contracts of medical practitioners on an ongoing basis. That submission was particularly attractive in view of an argument advanced by the defendant as to the consequence of adopting the plaintiff's construction of the word 'retain'. If the defendant were under an obligation to re-engage all medical practitioners with whom it has existing contracts, until such time as those practitioners decided that they no longer wished to treat public patients at the PHC, its ability to respond to the changing needs of its client base (for instance, a change in the demand for particular specialties) would be significantly hindered. Clause 2.5 of the Agreement itself contemplates reducing the operating theatre time allocated to practitioners, and to that extent would prevail over any obligation derived from cl 2(b) of the 1995 AMA Agreement. However there may be room for argument as to whether the bases set in out cl 2.5 for reducing the theatre time available to medical practitioners sufficiently deal with all contingencies.
39 I turn now to the plaintiff's case in so far as it relied on cl 4 of the 1995 AMA Agreement.
Clause 4 of the 1995 AMA Agreement
40 Clause 4 relevantly provided:
4.1 The Board of a hospital may from time to time appoint medical practitioners to provide medical services on a fee-service basis to public patients within that hospital as a Visiting Medical Practitioner.
41 The plaintiff's case was that he had been appointed as a Visiting Medical Practitioner at the PHC. In this respect, he relied on a letter dated 14 February 2012 which was annexed to the affidavit of Catherine
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- Elphick sworn 28 February 2012. That letter was sent by Dr Sam Khamhing, the Chairman of the Credentialing Committee of the PHC, to the plaintiff (the 14 February 2012 letter). In that letter the plaintiff was advised that 'you were present at both meetings of the Credentialing Committee and MAC [Medical Advisory Committee]. It has been minuted that you are still credentialed as VMP Orthopaedic Surgeon to Peel Health Campus'. (There was no dispute that the letters 'VMP' stood for 'Visiting Medical Practitioner'.)
42 Counsel for the plaintiff submitted that the term 'Visiting Medical Practitioner' was a term of art within the hospital system, and that appointment as a Visiting Medical Practitioner at a hospital carried with it an entitlement to treat public patients at that hospital in return for the payment of a fee by that hospital. The plaintiff's case was that by virtue of the recognition of his credentials by the PHC and his appointment as a Visiting Medical Practitioner, the operation of cl 4.1 of the 1995 AMA Agreement meant that he was entitled to treat public patients at the PHC on a fee for service basis. On this basis, the plaintiff submitted that the Renewal Term should be implied into the Agreement to give business efficacy to cl 4 of the 1995 AMA Agreement, which was incorporated into the Agreement.
43 The defendant's submission was that the purpose of the 14 February 2012 letter was to advise the plaintiff that his credentials had been recognised by the PHC. Counsel for the defendant accepted that the recognition of a practitioner's credentials carried with it a right for the practitioner to treat private patients in the PHC, and that that was addressed in the By-Laws. However, the defendant's case was that the recognition of a practitioner's credentials carried no entitlement to be paid a fee by the defendant for treating public patients at the PHC and that any such entitlement could only be derived by entering into a contract with the defendant for that purpose.
44 It is not clear how it can be said that the plaintiff was in fact appointed a Visiting Medical Practitioner for the purposes of cl 4 of the 1995 AMA Agreement. The term 'Visiting Medical Practitioner' was defined in the 1995 AMA Agreement to mean a medical practitioner appointed pursuant to cl 5, cl 5.12(a), cl 8.12 or cl 8.21 of that Agreement to provide services to a hospital. It is not clear how it could be said that the plaintiff was appointed in accordance with any of those clauses in the 1995 AMA Agreement. An alternative possibility is that the plaintiff was appointed pursuant to cl 13 of the By-Laws (to which the 1995 AMA Agreement is subsidiary). Further, cl 4.1 contemplates that a
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- practitioner's appointment as a Visiting Medical Practitioner will be made by the Board of a hospital. For reasons which I explain in more detail below, the PHC is not a hospital of the kind to which the 1995 AMA Agreement by its terms applies, nor is the Board a 'Board' as defined in the 1995 AMA Agreement (cf cl 14.1).
45 In my view, having regard to the questions which arise in relation to the operation of the 1995 AMA Agreement and cl 4.1 thereof in particular, the plaintiff's case that the implication of the Renewal Term into the Agreement is necessary to give business efficacy to the Agreement is, at best, merely arguable.
Other considerations relating to the operation of the 1995 AMA Agreement
46 Quite apart from the questions to which I have adverted which arise from the particular terms of cl 2(b) and cl 4 of the 1995 AMA Agreement, it was far from clear how the terms of the 1995 AMA Agreement as a whole would have any practical operation in the context of the Agreement. Counsel for the defendant submitted that the purpose of incorporating the terms of the 1995 AMA Agreement into the Agreement was to incorporate a schedule of fees payable to medical practitioners for their treatment of public patients. However, it was not at all evident how the incorporation of the entirety of the 1995 AMA Agreement would result in this limited operation.
47 The definition of key terms in the 1995 AMA Agreement suggests that that agreement would have little or no application in the context of the PHC's operations. The 1995 AMA Agreement primarily applies to public hospitals. That much is evident from the terms of the Introduction to the 1995 AMA Agreement (cl (B)) and from the definition of the term 'hospital', which means, amongst other things, 'all public non teaching hospitals established under the [Hospitals and Health Services Act 1927 (WA) (the HHS Act)] … and, if the parties agree … shall include specified agencies, health services and public teaching hospitals': cl 14.1 of the 1995 AMA Agreement. The PHC is a private hospital established under s 26D of the HHS Actwhich is operated by the defendant, and I did not understand there to be any dispute between the parties that the PHC is not a public hospital under the HHS Act. There was also no evidence to suggest that there had been any agreement that the PHC should be treated as a hospital for the purposes of the 1995 AMA Agreement. Accordingly, as I have already observed, it was far from clear how any obligations on 'hospitals', which were said to arise from the terms of the 1995 AMA Agreement, would apply to the PHC.
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48 A further difficulty in relying on the terms of the 1995 AMA Agreement to establish a case for the implication of the Renewal Term was that the 1995 AMA Agreement came into effect on 4 September 1995 and by its terms terminated three years later (cl 1.2). The 1995 AMA Agreement had, therefore, expired prior to its incorporation into the Agreement. Presumably its incorporation into the Agreement meant that its terms were intended to have a continuing operation as part of the Agreement, despite the fact that the 1995 AMA Agreement had expired.
49 The questions I have outlined above in relation to the operation of cl 2(b) and cl 4 in particular, and of the 1995 AMA Agreement as a whole, in the context of the Agreement itself also suggest the plaintiff would encounter real difficulties in establishing that the Renewal Term is 'so obvious that it goes without saying'.
50 For these reasons, in my view the plaintiff demonstrated only a weak case that the Renewal Term should be implied in fact into the Agreement.
(ii) The adequacy of damages as a remedy for the plaintiff
51 The plaintiff's case was that if an interim injunction were not granted, he would suffer a significant financial loss because he would no longer be able to treat public patients at the PHC on a fee for service basis. There can be no doubt that the defendant's decision not to offer the plaintiff a further contract will have a significant financial impact on the plaintiff. It was clear from the affidavit sworn by the plaintiff in support of his application, that his public patient elective surgery workload comprises a very substantial proportion of his total practice at the PHC. However, that impact would, in my view, be measurable in damages.
52 Quite apart from this direct financial impact, however, the plaintiff submitted that the defendant's decision not to offer him a further contract would cause damage to his professional reputation and to the current level of referrals that he enjoys from general practitioners in the Peel and Mandurah catchment area for the PHC. The plaintiff submitted that these consequences would be irreparable, and would be extremely difficult to estimate in monetary terms, such that damages would not be an adequate remedy.
53 I am unable to accept that submission. It is not entirely clear why the defendant's decision not to offer the plaintiff a further contract would necessarily have an adverse impact on the plaintiff's professional reputation, given that the defendant continues to permit the plaintiff to
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- treat private patients at the PHC, and continues to provide the plaintiff with operating theatre time to conduct surgery on his private patients.
54 As for the plaintiff's claim that he would suffer a loss of referrals, his submission was that because general practitioners would no longer be able to refer public patients to him, they may decide to no longer refer private patients to him either. However, counsel for the plaintiff accepted that this was purely speculative. Assuming for present purposes that the plaintiff was able to establish an impact of this kind, I am unable to see why that impact could not be quantified in financial terms and compensated in an award of damages if the plaintiff is ultimately successful in the action.
(iii) The balance of convenience, including the nature of the relationship which, by the grant of an injunction, the plaintiff seeks to have continued
55 The plaintiff submitted that the balance of convenience supported the grant of an injunction because if an injunction were not granted, the plaintiff would suffer financial loss, damage to his professional reputation and to the level of referrals which he currently receives from general practitioners in the catchment area for the PHC. The plaintiff submitted that there was no indication that the defendant would suffer any hardship if an injunction were granted. From that perspective the balance of convenience favoured the grant of an interim injunction.
56 The plaintiff submitted that if an injunction were not granted, there would be a very substantial impact on the provision of medical services to patients within the PHC catchment area, both for the conduct of elective surgery, and for acute emergency trauma service response. The plaintiff also submitted that if no injunction were granted, there would be no local orthopaedic surgeon available to perform emergency trauma work after 28 February 2012. I am unable to accept these submissions. The plaintiff's evidence was that a substantial proportion of his workload is comprised of treating public patients at the PHC, and that dealing with trauma patients occupies 20% of his workload. That evidence does not, however, support the plaintiff's submission that if an injunction were not granted there would be a very substantial impact on the provision of medical services in the PHC area. The submissions also assumed that the defendant would not make alternative arrangements to ensure that an orthopaedic surgeon would be available to patients requiring orthopaedic surgery in cases of urgency or emergency. The court was not advised of what arrangements the defendant had put into place to secure the services of an orthopaedic surgeon to replace the plaintiff but it would defy
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- common sense to conclude that no such arrangements would have been made.
57 There were two other considerations relevant to the balance of convenience. The first is that traditionally the courts have been cautious about making orders for the specific performance of contracts for personal services (see the discussion in CH Giles & Co Ltd v Morris[1972] 1 WLR 307, 318 (Megarry J)). However, the plaintiff submitted that the present case did not involve an employment relationship, nor did it involve any antipathy between the parties which would make difficult the enforcement of an order compelling the continuation of their contractual relationship. I accept that submission, particularly in view of the fact that the defendant continues to permit the plaintiff to treat private patients at the PHC, and to allocate operating theatre time to the plaintiff for that purpose. This consideration, of itself, does not therefore weigh the balance of convenience against the grant of an injunction.
58 A more significant consideration is the effect of the interim injunction sought by the plaintiff. The terms of the interim injunction sought in the plaintiff's minute of proposed injunction sought, amongst other things, to restrain the defendant from 'giving effect to its purported termination of the Agreement'. However this was not a case where the defendant was responsible for the termination of the Agreement. Instead, the Agreement, by its terms, terminated on 28 February 2012. Although the plaintiff's minute of proposed injunction did not seek an interim injunction in terms which would require the defendant to offer a further contract to the plaintiff, the only way in which the continuation of the plaintiff's contractual rights could be achieved (so as to maintain the status quo pending the trial of the plaintiff's action) would be by an order compelling the defendant to enter into a further contract with the plaintiff for the plaintiff's treatment of public patients at the PHC in return for a fee for service. Such an order would thus compel the defendant to enter into a further contractual relationship with the plaintiff.
59 The law has historically placed considerable weight on the liberty of individuals to decide both when to enter into contractual relationships and as to the terms of their contracts. Sir George Jessel MR observed in Printing & Numerical Registering Company v Sampson (1875) LR 19 Eq 462, that:
[I]f there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting (465).
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60 This general principle manifests itself in a variety of ways, such as in the reluctance of the law to imply terms into contracts which are otherwise complete on their face, the reluctance of the courts to order specific performance of contracts of personal service, and in the fact that the proportionality doctrine does not apply as part of the law of penalties: see Ringrow Pty Ltd v BP Australia Pty Ltd (2005) 224 CLR 656, 669 [30] - [32].
61 In recent years there have been some statutory inroads into this principle (for instance in the context of statutory remedies for reinstatement following the unfair termination of a contract of employment). Nevertheless, respect for contractual freedom continues to be a strong underlying (albeit not always express) rationale for the development of the law: see for example Ringrow (669), [31] - [32]; Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, 15 (Lord Hoffmann). It is not necessary for present purposes to explore this issue further. Even if it be assumed that an order could be made to compel a party to enter into contractual relations, in my view it would require a strong prima facie case to warrant the making of such an exceptional order by way of an interim injunction.
Conclusion
62 In my view the plaintiff did not demonstrate that there was a serious question to be tried as to the implication of the Renewal Term by custom or usage, and established only a weak case for the implication of the Renewal Term in fact. I was also not persuaded that this was a case in which damages would not be an adequate remedy should the plaintiff succeed in the trial of the action. Although some considerations relevant to the balance of convenience supported the grant of an interim injunction to maintain the status quo, the exceptional nature of the order which would be required to maintain the status quo in this case (that is, an order requiring the defendant to offer a further contract to the plaintiff), militated against the grant of an interim injunction given the weakness of the plaintiff's case. Having taken all of these factors into account, I determined to decline the grant of an interim injunction as sought by the plaintiff.
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