Pisano v South Metropolitan Health Service

[2021] WASC 402

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   PISANO -v- SOUTH METROPOLITAN HEALTH SERVICE [2021] WASC 402

CORAM:   MASTER SANDERSON

HEARD:   28 OCTOBER 2021

DELIVERED          :   15 NOVEMBER 2021

FILE NO/S:   CIV 1124 of 2021

BETWEEN:   GIGLIETTO PISANO

Plaintiff

AND

SOUTH METROPOLITAN HEALTH SERVICE

Defendant

Catchwords:

Practice & procedure - Application to strike out statement of claim and for defendant's summary judgment - Turns on own facts

Legislation:

Hospitals and Services Act 1927 (WA)
Public Sector Management Act 1994 (WA)

Result:

Plaintiff's claim is dismissed
Summary judgment for the defendant

Representation:

Counsel:

Plaintiff	:	C Stokes
Defendant	:	FB Seaward

Solicitors:

Plaintiff	:	Chris Stokes & Associates
Defendant	:	State Solicitor's Office

Case(s) referred to in decision(s):

Obied v Lockley (2018) 98 NSWLR 258

MASTER SANDERSON:

1. This application raises the question of whether the Chief Executive Officer, running a health care company which provides both private and public services, can be regarded as a public officer with respect to the tort of misfeasance.  The issue is raised in the context of a defendant's summary judgment application.  That being the case, the defendant says that on the material facts pleaded by the plaintiff, taking the most favourable view of those facts, the plaintiff's claim cannot succeed.  For reasons which follow, the defendant's submissions should be accepted with the result that, it is not arguable that the Chief Executive Officer of the defendant holds public office.

2. The statement of claim pleads the plaintiff is a qualified medical practitioner or a specialist orthopaedic surgeon.  The defendant is identified as having overall responsibility for what is known as the Peel Health Campus.  In fact, the hospital is run by an entity known as Ramsay Health Care Pty Ltd (Ramsay).  The contractual arrangement pursuant to which Ramsay runs the hospital is somewhat complex but important in the context of this application.  It can be summarised as follows.

3. The defendant was constituted by the Minister for Health for the State of Western Australia in his capacity as the Board of the hospitals, comprised in the Metropolitan Health Services Board under s 7 of the Hospitals and Services Act 1927 (WA).  Prior to 1 June 2013, Health Solutions (WA) Pty Ltd (Health Solutions) was licenced to operate the Peel Health Campus (Hospital) by a licence granted pursuant to the Peel Health Campus Service Agreement (the Licence Agreement).  The hospital on the Peel Health Campus is a major hospital offering a wide range of medical services to the public of Western Australia.  This includes specialist orthopaedic-surgeons.

4. From on or about 1 June 2013 Ramsay was licenced to operate the Hospital.  In effect, Ramsay took over the licence formally held by Health Solutions.  That licence dated from June 1997 and was for a period of 20 years.  The transfer of the licence was made pursuant to an Assets Sale Agreement which was entered into between Health Solutions and Ramsay in or about April 2013.

5. By an agreement made between the plaintiff and Health Solutions in or about February 2012 (that is prior to Ramsay commencing ownership and administration of the hospital) the plaintiff was re-credentialed at the hospital as what is known as a 'credentialled practitioner with clinical privileges as a specialist practitioner'.  This re-credentialling was for a period of 3-years and expired on 1 March 2015.

6. The plaintiff pleads it was a material term of the Asset Sale Agreement that Ramsay would be responsible for all of Health Solutions obligations under the terms of any third-party contract, existing in respect of the Hospital as at 1 June 2013.  In other words, Ramsay was bound to respect the credentials the plaintiff had with Health Solutions.  There is no suggestion Ramsay did not comply with the terms of that agreement.  Further, it is pleaded that it was a condition of the licence that Ramsay would comply with all relevant requirements and responsibilities relating to the credentialling of new and existing medical practitioners at the hospital.  Again, there is no dispute that such a condition was in the Licence.

7. By par 10 of the statement of claim, the plaintiff plead certain provisions of the Peel Health Campus Service Agreement.  That clause reads as follows:

   10.The PHC Service Agreement provided, inter alia, that:

   a)Ramsay as the Hospital operator must ensure that the person presenting the Hospital, whether as a Public Patient or a Private patient requiring urgent or essential treatment is not denied appropriate care – clause 10.1 (g)

   b)Ramsay as the Hospital operator must ensure that access to the provision of Services is based on clinical need – clause 10.1 (h);

   c)If at any time during the Term the Operator fails to provide the Services to the Quality Standards the Operator must promptly notify the State of that failure – clause 10.11

   d)If a Public Patient seeks or requires treatment at the Hospital with a condition which is either not included in the Activity Profile or which requires a level of treatment or facilities which are not available at the Hospital, the Operator must, following assessment and initial stabilisation, transfer the patient to a facility with an appropriate level of treatment or facilities - clause 10.19 (b)

   e)An Event of Default occurs if, inter alia,

   i)The Operator fails to attain or maintain Accreditation in accordance with Clause 5.2 - clause 16.1 (g);

   ii)The Operator fails to observe the Quality Standards - clause 16.1 (h);

   iii)There is a Change of Control of the Operator without the prior written consent of the State (to be determined in the States absolute discretion) - clause 16.1 (k);

   f)The Operator acknowledges that the State must ensure continuous provision of the Services to Public Patients to the Quality Standards at the Hospital and that upon the occurrence of an Event of Default under clause 16.1 which results in the Operator failing to provide the Services or the Services to the Quality Standards, the State may, upon notice to the Operator, exercise the rights set out in clause 17 (Step in Rights) during the period of the Event of Default - clause 17.1.

   g)The State must, in exercising the Step In Rights, ensure the continuity of delivery of essential goods and services to the Facility at commercial rates and in accordance with all statutory obligations of the State relating to the supply of goods and services - clause 17.9 (b)

   h)The Operator has taken all necessary action to authorise the entry into, and the observance and performance of the Operators Covenants to be observed and performed by the Operator - clause 25.5

   i)The execution, observance and performance by the Operator of the Operators Covenants to be observed and performed by the Operator will not violate

   i)inter alia, any judgement, binding on the Operator - clause 25.8 (a)

   ii)any other document or agreement which is binding on the Operator - clause 25.8 (b)

   j)The Operator undertakes to the State that it will, inter alia, comply fully with all laws binding on it in relation to the Facility and the provision of the Services and will ensure that it and the Facility complies with all statutes - clause 27.2 (a).

8. By par 12 the plaintiff pleads at all material times Ramsay employed Margaret Sturdy as the Medical Director and Chief Executive Officer of the hospital.  It is said Ms Sturdy was responsible for Ramsay's compliance with the terms of the Licence, the conditions of the PHC Services Agreement and the terms of the Assets Sale Agreement.  It is also pleaded that Ramsay was vicariously liable for the acts of Ms Sturdy.  There are clearly some difficulties with this plea.  For instance, it is too broad to say Ramsay was vicariously liable for all of the acts of Ms Sturdy - if indeed that is what is pleaded.  But for present purposes (and solely for the purposes of this application, the defendant accepted the plea was proper.

9. Paragraph 14 deals with an alleged breach of contract as between Ramsay and the plaintiff.   The plea reads as follows:

   14.Ramsay and Margaret Sturdy, in breach of the Asset Sales Agreement and the PHC Service Agreement;

   a)failed to recognise that the plaintiff was a Credentialled Practitioner with Clinic Privileges at the Hospital as at 1 June 2013;

   b)in February 2015 failed and refused to recognise the plaintiff's entitlement to apply for re-credentialling on the basis he was Credentialled Practitioner with Clinical Privileges at the Hospital, notwithstanding that by a judgment of the Supreme Court of Western Australia delivered on 26 September 2014 it was determined that the plaintiffs credentialling at the Hospital was valid until 1 March 2015.

Particulars

(i)On or about 18 February 2015 the plaintiff lodged with Ramsay his application for re-credentialling of his Clinical Privileges pursuant to Rule 73 of Ramsay's Facility Bylaws;

(ii)Margaret Sturdy failed to comply with the due process set out in Ramsay's Facility Bylaws for re credentialling of the plaintiff's Clinical Privileges

1. It is worth repeating that for the purposes of the summary judgment application the defendant accepted the matters as pleaded in par 14.  Neither Ramsay nor Ms Sturdy are parties to this action.  They therefore have been given no opportunity to dispute the pleaded facts.  It is important that be born in mind.  It is difficult to see how the defendant would have any knowledge of these pleaded matters and for that reasons, no issue is taken with what is pleaded.  It should not be thought that in accepting the facts as pleaded, the defendant is accepting there was any breach of the contract between Ramsay and the plaintiff.

2. The graveman of the plaintiff's case is found in par 15 of the plea:

   15.  By reason of the fact that:

   a)Ramsay had statutory obligations as the Operator of the Hospital pursuant to the provisions of the Hospitals and Health Services Act 1927 to comply with all laws, bylaws, statutes and covenants;

   b)Margaret Sturdy, as the Clinical Director and Chief Executive Officer of the Hospital, responsible for ensuring Ramsay compliance with all laws, bylaws, statutes and covenants

   Margaret Sturdy was a public officer of the defendant and the defendant was thereby responsible for Ramsay's compliance with its statutory obligations under the Asset Sales Agreement, the PHC Services Agreement and the Licence.

3. During the course of counsel for the plaintiff's submissions, I sought to clarify with him precisely what the plaintiff was arguing.  It amounts to this.  Ramsay, pursuant to a contractual arrangement with the State government (represented by its agent the defendant), provides medical services to the public.  It provides private services for which it charges a fee and it provides public services for which no fee is charged.  So by way of example, a person who requires a hip replacement can present at the Peel Health Campus and in due course will under go surgery.  In days past, the Hospital would have been run by the State government - even if the actual party running the Hospital was an agency such as the defendant.  In those circumstances, the Chief Executive Officer of the public corporation running the hospital was a 'public officer'.  It was the plaintiff's position of a private operator, which assumed the public service, which would otherwise have been provided by the government, rendered the private enterprises run by the Chief Executive Officer, a public officer.

4. It was conceded by the plaintiff that Ms Sturdy was not a 'Public Service Officer' as that term is defined in the Public Sector Management Act 1994 (WA). In Obied v Lockley (2018) 98 NSWLR 258, Bathurst CJ (with whom Beazley P and Leeming JA agreed) considered the concept of public office and held:

   (a) For the purposes of the tort of misfeasance in public office, the tortfeasor must hold a public office and the act complained of must be an exercise of public power; and

   (b)a public officer, at least, persons who by virtue of the particular positions they hold are entitled to exercise executive powers in the public interest.  The tort is not confined only to person appointed to particular statutory officers which expressly confers statutory powers and responsibilities.  Nor does the executive power exercised have to be expressly 'attached' to the office held.[1]

   [1] Obied v Lockley (2018) 98 NSWLR 258, 8(1).

5. In my view, it is not arguable that Ms Sturdy could be described as holding a 'public office' or that she was exercising a 'public power'.  She is an employee of Ramsay and is responsible according to the terms of her contractual engagement to Ramsay and just to Ramsay.  It may be that Ramsay has obligations to the defendant.  It may be that if Ramsay breached those obligations, certain consequences would follow.  However, none of that makes Ms Sturdy a public officer.  Quite the reverse - she is a private officer.

6. There is a further difficulty with the plaintiff's claim.  By par 19 the plaintiff pleads the defendant is vicariously liable for certain alleged wrongdoings of Ms Sturdy.  That plea really amounts to this.  Ms Sturdy, who is employed by Ramsay, is alleged to have committed certain wrongs.  It is said that the defendant is vicariously liable for the alleged wrongful acts of Ms Sturdy.  Ramsay employed Ms Sturdy.  There is nothing to suggest the defendant had any say in Ms Sturdy's employment, nor is there anything pleaded to the effect that the defendant could in anyway control the discharge by Ms Sturdy of her contractual obligations to Ramsay.  That being so, there is no basis upon which the defendant could be liable for any wrongful acts of Ms Sturdy.

7. There is a further plea in par 21, which is introduced by pleading the plaintiff was in 'a position of special disadvantage' in relation to his registration. It is not entirely clear whether this plea raises some claim under principles of fiduciary duty or whether it in some way references the Australian Consumer Law. Either way, the plea is not in my view reasonably open, and discloses no cause of action.

8. The defendant required a further extension of time to bring this application.  The plaintiff did not oppose that extension being granted and rightly so.  The application was brought just out of time and an explanation was provided for the delay.

9. The plaintiff's position is untenable and the action cannot succeed.  There should be summary judgment for the defendant.  The order will be the plaintiff's claim is dismissed with the plaintiff to pay the defendant's costs of the action including reserved costs and the costs of this application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

MM

Court Officer

15 NOVEMBER 2021