Re Ramsay Health Care Australia Pty Ltd
[2022] VSC 226
•10 May 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S ECI 2022 00362
| RAMSAY HEALTH CARE AUSTRALIA PTY LTD | Applicant |
| v | |
| NO RESPONDENT |
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JUDGE: | FORBES J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 31 March 2022 |
DATE OF JUDGMENT: | 10 May 2022 |
CASE MAY BE CITED AS: | Re Ramsay Health Care Australia Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2022] VSC 226 |
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CONTEMPT OF COURT – Civil contempt – Breach of implied undertaking – Disclosure to non-party of documents – Non-party used documents for its own purpose – Non-party had no actual knowledge of origin of documents at time of use – Application to purge any contempt – Full and frank disclosure – Adequate apologies offered by applicant – No contempt found – Apologies accepted by the Court.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr C. Moller | MinterEllison |
HER HONOUR:
Summary
Ramsay Health Care Australia (Ramsay) operates the Albury Wodonga Private Hospital (the hospital). Dr Khoury (Khoury) and Dr Kolt (Kolt) are both orthopaedic surgeons practicing in Albury Wodonga and in 2019 were accredited to work at the hospital. In 2019, Kolt was also the chair of the hospital’s Medical Advisory Committee (MAC). MAC is the peak advisory body of medical practitioners at the hospital.
Khoury sued another local orthopaedic surgeon, Dr Kirwan (Kirwan) for defamation in 2020. In the course of that defamation proceeding a subpoena was issued for Kolt to produce documents. Documents produced by Kolt to the Prothonotary in answer to the subpoena in May 2020 included 77 emails, largely between himself and Kirwan (the subpoenaed documents).
The content of the subpoenaed documents showed that Kolt had breached confidentiality requirements. They included comments and opinions about the clinical practice of Khoury expressed by Kolt and Kirwan. In late 2019, Khoury had complained to Ramsay that Kolt was publicly disparaging him and breaching confidentiality. When this allegation was put to Kolt he had denied it and tendered his resignation as the chair of MAC in November 2019.
Because the subpoenaed documents were produced under compulsion of court processes, those persons who gained access to them were subject to an obligation that they use the documents only for the purpose for which they were produced. That obligation is often described as an ‘implied undertaking’ or a ‘Harman undertaking’.[1] Contrary to that obligation, when he was provided with a copy of the subpoenaed documents by his solicitor, Khoury arranged for his wife Jessica Khoury to send them to the CEO of the hospital on 30 July 2020.
[1]A reference to Harman v Secretary of State for the Home Department [1983] 1 AC 280.
The hospital then used some of the subpoenaed documents forwarded to it to issue a show cause notice to Kolt dated 12 August 2020. The show cause notice was signed by the hospital CEO, Ms Sheryl Anne Keir (Keir). The show cause notice referred to the obligations of privacy and confidentiality imposed by the Ramsay Health Care Facility Rules (the internal rules), made reference to the email correspondence between Kolt and Kirwan and required Kolt to show cause why his accreditation at the hospital should not be terminated in accordance with Rule 130 of the internal rules.
The show cause notice said:
A series of email correspondence between you and David Kirwan was recently brought to my attention. Whilst the entire series is very concerning, for the sake of brevity, I have summarised the most pertinent aspects of the correspondence below…
Thereafter, the notice set out six particular emails of concern.
On receipt of the show cause notice, Kolt’s solicitors wrote to Ramsay. Their letter dated 21 August 2020 asserted that six emails between Kolt and Kirwan specifically referred to in the show cause notice had been produced under subpoena in the defamation proceeding. The letter asserted that Ramsay was in breach of a Harman undertaking and alleged that the use of the subpoenaed documents to issue the show cause notice may be a contempt of Court.
The letter in response, written by MinterEllison on behalf of Ramsay and dated 24 August 2020, advised that until receipt of the letter of 21 August 2020 Ramsay was unaware that the emails provided to it had been disclosed through a compulsory court process.
Subsequently, both Kolt and Kirwan had issued summons within the defamation proceeding seeking that Khoury and Jessica Khoury be punished for contempt. Khoury and Jessica Khoury both admitted that they were in breach of the implied undertaking given to the court and, by forwarding emails to Ramsay, were therefore in contempt. They brought an application to purge their contempt. Justice John Dixon dealt with the admitted contempt (the Khoury contempt hearing).[2]
[2]Khoury v Kirwan (No 4) [2021] VSC 333 (‘Khoury v Kirwan’).
Kolt and Kirwan actively participated in the Khoury contempt hearing in the role of prosecutors. Notwithstanding the admission of contempt, the applications were hard fought on whether full and frank disclosure of the circumstances of the contempt had been made and whether the contempt was contumacious or wilful (by Khoury) and wilful or accidental and inadvertent (by Jessica Khoury). Kirwan subpoenaed Keir to give evidence. Keir’s evidence was largely relevant to the intention of Khoury and John Dixon J touched on her knowledge of the circumstances in which she received the subpoenaed emails as part of the necessary background. On 23 April 2021, when Keir gave her evidence, there remained a possibility that Kolt or Kirwan might bring contempt proceedings against Keir or Ramsay for their use of the emailed documents. For this reason Keir gave her evidence before John Dixon J with the protection of a certificate under s 128 of the Evidence Act 2008 (Vic). Her evidence-in-chief was led by Kirwan’s Counsel and she was cross-examined by Counsel for Kolt and Khoury. Although she was represented by counsel at the hearing, given the intention communicated by Kolt to bring contempt proceedings personally against Keir, her counsel played no role in adducing her evidence.
The prospect of Keir or Ramsay being summonsed for contempt had been detailed in a letter from Kolt’s solicitors, Sparke Helmore, dated 15 April 2021 (15 April letter). It concluded that Ramsay ‘was fully aware that it was in receipt of documents that had been produced by [Dr Kolt] under the compulsion of an Order of the Court’ and that ‘[it] follows that [Ramsay and Keir] are in contempt of Court’.[3] It sought an immediate explanation and reserved the right to apply to join Ramsay and Keir as respondent’s to Kolt’s summons for contempt in the proceeding. Despite the allegations of contempt by Ramsay, no such application was ever made. Ultimately, the defamation proceeding has settled and final orders have been made.
[3]Letter dated 15 April 2021 from Sparke Helmore Lawyers to S Chesterman and M Petronijevic of MinterEllison with a copy to P George and N Buck of Kennedys Law, tendered by the applicant as Exhibit 1.
As the defamation proceeding is no longer current, Ramsay, by way of originating motion, sought a hearing to proffer an apology to the Court for any contempt arising from its use of the documents, to invite the Court to accept the apology and to seek that it be discharged from punishment for any breach of an implied undertaking. Kolt and Kirwan were advised of this application. Kolt was informed that if he wished to participate he would be joined as a party. He did not wish to do so. Accordingly, there was no contradictor to the hearing on 31 March 2022.
Ramsay does not admit any contempt. It accepts that the subpoenaed documents should not have been used as they were because they had been produced under subpoena and therefore subject to the obligation as identified by the High Court of Australia in Hearne v Street.[4] It was submitted on its behalf that it could not admit a contempt as it had no actual knowledge of the emails having been produced via subpoena at the time they were used, and no actual knowledge until 21 August 2020. It submitted that a contempt of court requires actual knowledge.[5] Counsel had not been able to identify any case that dealt with the ‘knowledge’ required in the context of a contempt arising from a breach of an ‘implied undertaking’.
[4]Harman v Secretary of State for the Home Department [1983] 1 AC 280.
[5]Grant-Taylor v Jamieson (2002) 11 BPR 21, 023.
The questions for determination are:
(a) Was Ramsay bound by an obligation to the Court, as described in Hearne v Street, not to the use the subpoenaed documents that came into its possession as it did?
If the answer to (a) is yes, then the action is a contempt of Court.
(b) In those circumstances:
(i) has Ramsay made a full and frank disclosure and apology to purge the contempt?
(ii) should Ramsay be discharged from punishment for that contempt?
For the reasons that follow, I have determined that Ramsay did not have actual knowledge that the subpoenaed documents had been produced under a compulsory court process when it used them to issue the show cause notice to Kolt and its action is therefore not a contempt of court. If I am wrong in that conclusion and the action is a contempt, then I would be satisfied that by its actions and its apologies detailed below, it has purged any contempt.
Applicable Legal Principles
An implied undertaking is a substantive obligation owed to the Court.[6] The obligation arises when documents are obtained by a person as a result of compliance with court processes. Those processes include discovery, interrogation, subpoenas, as well as the exchange of witnesses statements and expert reports prepared in the proceeding. Documents obtained in these ways are not to be used for any purpose other than for the conduct of the proceeding in which they are produced.[7] Leave of the court is required for any extraneous use of the documents. The obligation addresses the need to protect a right of a person to keep one’s documents private and the competing need for parties and others involved in a proceeding to make full disclosure to ensure that justice is done between parties to a dispute.[8] The obligation exists as a necessary part of the proper administration of justice.
[6]Hearne v Street (2008) 235 CLR 125 (‘Hearne’).
[7]Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, 38 (Hayne JA).
[8]Watkins v AJ Wright (Electrical) Ltd [1996] 3 All ER 31.
Primarily, the obligation is owed by parties to litigation, and historically the language, by implication, expressed the parties as giving an undertaking to the court. However, as a substantial obligation to Court and not a voluntary action by a party, it can be understood how persons beyond the parties to the litigation might be bound. Legal representatives, advisors, expert and other witnesses, court staff and others who come into possession of documentation subject to an implied undertaking are similarly bound by the obligation. Without the obligation binding on those beyond the parties themselves, it may have little value.
In Hearne v Street, the High Court decided that a servant or agent of a party is directly bound by an implied undertaking and the extraneous use of documents was a breach of the undertaking and not merely the act of an accessory to a breach by a party. The trial judge had accepted an argument that their actions were contrary to an implied undertaking but that they were not in contempt because the individuals personally had not given any undertaking to the Court. On appeal, the NSW Court of Appeal by majority held that the obligation was imposed on persons into whose hands the documents come if the person knows that they were obtained by way of compulsory court process. It was not necessary there to decide how far the obligation extends beyond the class of servants or agents.
The High Court confirmed that the obligation that arises from an ‘implied undertaking’ is not personal to a litigant. As a matter of principle they said ‘persons who, knowing that material was generated in legal proceedings, use it for purposes other than those of the proceedings are in contempt of court’.[9]
[9]Hearne (n 6) [103].
The reasoning in Hearne contemplates any person who acquires documents produced in or for legal proceedings being bound. The joint judgment of Hayne, Heydon and Crennan JJ canvassed the English and Australian authorities. They referred to Hammersley Iron Pty Ltd v Lovell where Anderson J said:
The implied undertaking is binding upon anyone into whose hands the discovered documents come, if he knows that they were obtained by way of discovery.[10]
[10]Hammersley Iron Pty Ltd v Lovell 19 WAR 316, 334 (Pidgeon and Ipp JJA concurring).
They concluded that without such a principle any obligation could be easily evaded and be of little value. It is the origin of the documents and not the knowledge of the undertaking or its obligations that is the relevant knowledge. The majority concluded:
There is no support in the authorities for the idea that knowledge of anything more than the origins of the material in legal proceedings need be established. In particular, there is no support for the idea that knowledge of the “implied undertaking” and its consequences should be proved, for that would be to require proof of knowledge of the law, and generally ignorance of the law does not prevent liability arising.[11]
[11]Hearne (n 6) [112].
The unchallenged factual finding by the NSW Court of Appeal in Hearne was that the appellants actually knew that proceedings were pending and that the documents they used had been produced in accordance with the court’s processes. It was not necessary for the Court to consider whether forms of notice other than actual knowledge might suffice.
However, the Court did say:
The statement of charge does not allege a knowing breach, but the evidence showed clearly that each breach was a knowing breach, and the appellants do not contest the Court of Appeal’s finding to that effect.
In short, the case proved was narrower than the case alleged. The case proved is a case falling within the rules for establishing contempt of court. The case alleged was not. … But the possession by the appellants of the only knowledge which was relevant – knowledge that the affidavit and statement were supplied by the residents in legal proceedings – was incontrovertible, and no other potential evidence relevant to liability …was pointed to.[12]
[12]Ibid [128]-[129].
The applicant submitted that actual knowledge of the origin of the documents is required because the consequence of a breach of an implied undertaking is that a contempt of court occurs. In establishing a contempt for breach of a court order actual knowledge of the order, and that the action taken is inconsistent with the order, is required.[13] As was said by the Court of Appeal in CFMEU v Grocon:
In order to prove a civil contempt involving the breaching of an undertaking or order it must be established that the order is clear and capable of compliance, that the alleged contemnor has knowledge of the terms of the order and has by his act or omission breached the terms of the order. In order that he is able to defend himself, the particulars must state what it is that the defendant did or omitted to do which constitutes the contempt.[14]
The public interest requires that any disobedience more than casual, accidental, or unintentional must at least be regarded as wilful. Thus, a deliberate act or omission which is in breach of an injunctive order or an undertaking, will ordinarily constitute wilful disobedience unless the alleged contemnor is able to show, by way of exculpation, that the default was casual, accidental, or unintentional.[15]
[13]Grant-Taylor v Jamieson (2002) 11 BPR 21 (Barrett J).
[14]Construction Forestry Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd & Ors (2014) 47 VR 527; [2014] VSCA 261 (‘CFMEU v Grocon’).
[15]CFMEU v Grocon (n 14) [139]–[140] (citations omitted).
In my view, a contempt for breach of the obligation arising from an ‘implied undertaking’ stems from orders made for the production of documents in a proceeding. It should therefore be treated no differently to breaches of other, substantive, court orders. It is, in my view, appropriate to assess any contempt for a breach of such an obligation on the basis that the relevant knowledge (the origin of the documents) is established as actual knowledge.
Knowledge by a party in other contexts might include circumstances short of actual knowledge. One might wilfully shut eyes to the obvious or be reckless in failing to make obvious inquiries. In those circumstances, actual knowledge might, as a matter of inference, be found. Constructive notice might also arise from the knowledge of circumstances. Such categorisations are often useful in cases assessing ‘knowing assistance’. The applicant submits that while circumstances might permit a finding of wilful blindness by a person as to the source of documents coming into their possession, and therefore infer knowledge that might be sufficient to demonstrate a breach of an implied undertaking in an appropriate case, the facts of this case do not give rise to any suggestion of wilful blindness. For the reasons that become apparent below, I accept this submission.
Therefore, to establish that Ramsay is bound by the implied undertaking it must have actual knowledge that the documents sent to it by Khoury originated from production in the legal proceeding between Khoury and Kirwan. It is not necessary to establish that Ramsay also knew of an implied undertaking regarding the use of such documents or the consequences of being bound by such an undertaking.
Factual Background
The applicant relied on the following affidavits and their exhibits in support of its application:
(a) two affidavits of Gregory Hall, the Chief Operating Officer of Ramsay, affirmed on 17 December 2021 and 10 March 2022;
(b) an affidavit of Sheryl Anne Keir sworn on 10 March 2022;
(c) an affidavit of Justine Lloyd, a legal practitioner and Senior Corporate Counsel with Ramsay between 2011 and December 2020, affirmed on 11 March 2022; and
(d) an affidavit of Samantha Shanahan affirmed on 30 March 2022.
Additionally, I requested both Keir and Lloyd give evidence and provide an opportunity for the Court to ask questions arising from their affidavits.
Mr Moller also tendered a copy of the transcript of the hearing of the Khoury contempt proceeding before John Dixon J at which Keir gave evidence.
Keir gave viva voce evidence before John Dixon J. He referred to the allegation made by Kolt’s solicitor’s that Ramsay Health was fully aware of the source of the documents (as I have outlined above at [10]) but said it was unnecessary to analyse that allegation.[16] What was necessary to consider, for the purpose of ascertaining Khoury’s intent in forwarding the emails to Ramsay, was the recollection of witnesses to events on 30 July 2020. In that regard, he found both Khoury and his solicitor to be unsatisfactory witnesses with poor recollection.[17] He also found that Keir ‘had motive to downplay the circumstances of receipt of the Kolt subpoenaed documents and did so as her evidence was characterised by her memory lapses or by a reconstructed recollection’.[18] I will return further to that evidence and the findings of his Honour regarding Keir later.
[16]Khoury v Kirwan (n 2) fn 6.
[17]Ibid [15].
[18]Ibid [44].
The uncontroversial evidence before me demonstrated that Ramsay operates twenty two hospitals throughout Australia including the Albury Wodonga Private Hospital (the hospital). From April 2020 Keir was CEO of the hospital and of the Border Cancer Hospital and the Murray Valley Private Hospital. She has worked in various capacities for Ramsay for sixteen and a half years.
Keir’s evidence in this proceeding
Keir deposed to a handover and familiarisation process prior to the formal commencement in the role of CEO. She said that included background information from the outgoing CEO regarding communication in late 2019 between the National Manager of Clinical Quality and Patient Safety (Dr Eather) and Kolt raising concerns about breaches of confidentiality of MAC and by Kolt. That concern had previously been raised by Khoury with her predecessor. Kolt denied breaching confidentiality and tendered his resignation from MAC. The resignation was accepted in December 2019. As well as this information, Keir said she heard informally from April 2020 that Kolt had breached confidentiality while chair of MAC. She said it appeared common knowledge but that there was no evidence to substantiate the information. She described the importance of confidentiality of MAC as it operated as something akin to a clinical risk management board for the hospital.
Keir also gave evidence of an inquiry into the clinical practice of Khoury which resulted in the imposition of conditions from February 2020 restricting his clinical practice at the hospital. Khoury sought a review of the imposition of those conditions. As a result of the review, the restrictions that had been imposed were lifted and Khoury was notified of this outcome on 14 July 2020. There was an overlap between the clinical practices subject of the inquiry, the imposition of conditions and the content of the emails between Kirwan and Kolt in the subpoenaed documents. The language used in the subpoenaed documents included comments regarding Khoury’s clinical practice in language that might be thought to be, in the words of John Dixon J, ‘disparaging, abrasive and critical’.[19]
[19]Khoury v Kirwan (n 2) [25].
Keir was unable to recall when she first became aware of the defamation proceeding between Khoury and Kirwan. She said the awareness came about through an involvement in attempting to identify relevant documents in answer to subpoenas addressed to Ramsay in the defamation proceeding.
On 27 July 2020, Khoury emailed Keir purporting to give her a ‘heads up’ that the local paper, the Border Mail was proposing to write an article alleging a ‘cover up’ by Ramsay. The following day the paper emailed Ramsay with an inquiry about Khoury’s restriction on practice. The newspaper’s email was subject of discussion between Keir, Ms Monaghan, the Chief of Staff of Ramsay and Justine Lloyd, inhouse legal counsel. Responding to the newspaper was the responsibility of Ms Monaghan and she apparently did so.
Central to the receipt of the subpoenaed documents themselves are the events of 30 July 2020. Keir’s executive assistant took a phone message to return a call to Ms Litton who was Khoury’s solicitor. The message indicated that the purpose of the discussion was the proposed Border Mail article and a statement of Ms Monaghan that the restrictions on Khoury’s clinical practice remained in place. Litton was concerned that Monaghan’s statement was both inaccurate and reflected poorly on her client.[20] Keir deposed to saying she was aware of the defamation proceeding but not of the details. Keir says at the end of the conversation Litton was to send a copy of the statement of claim which Keir had not at that point seen. She says no mention was made of Kolt in the conversation. It is this conversation that is subject to findings by John Dixon J referred to above at [31].
[20]Applicant, ‘Exhibit to Affidavit of Sheryl Anne Keir’, Exhibit Bundle SAK-1 to the Affidavit in the matter of an application by Ramsay Health Care Australia Pty Ltd v No Respondent S ECI 2022 00362, 10 March 2022, p 39.
Keir did not receive any email from Litton but later that same morning five emails arrived in her inbox from Jessica Khoury who she understood to be the wife and practice manager of Khoury. Those five emails were sent at 11.07am, 11.10am, 11.19am, 11.23am and 11.25am (collectively, the five emails). Keir deposes to opening the emails and their attachments the next day, 31 July 2020.
The first email (11.07 email) has as its subject line ‘STRICTLY CONFIDENTIAL: Jeremy Kolt Subpoena Email’s re: Khoury v Kirwan’. The body of the email refers to ‘attached emails that were subpoenaed from Dr Jeremy Kolt in relation to Elie’s matter’. It provides a mobile number if any questions arise.
The second email (11.10 email) has as its subject line ‘STRICTLY CONFIDENTIAL – Kolt emails’ It attaches a file and says the attachment should have 77 emails. It invites contact to Elie and Jessica Khoury or their lawyer (Ms Linton) for any questions.
The third email (11.19 email) has as its subject ‘STRICTLY CONFIDENTIAL Khoury v Kirwan re: Defamatory Emails Book Part 2’. The body of the emails refers the discussion with Litton and says that the Defamatory Emails Book accompanies the Statement of Claim.
The fourth email (11.23 email) has as its subject matter ‘STRICTLY CONFIDENTIAL Amended Statement of Claim Khoury v Kirwan’. The body of the email refers to an attached Statement of Claim as discussed with Ms Litton that morning.
The fifth email (11.25 email) has as its subject ‘RAMSAY General Counsel Letter to Elie – Private & Confidential’. The email says ‘Just in case you advent [sic] seen the below letter from Ramsay – removing Elie’s restrictions unanimously’. The ‘below letter’ is the letter dated 9 July 2020 communicated to Khoury on 14 July 2020.
Despite the express reference to the attachments having been obtained from Kolt under subpoena in the 11.07 email, Keir maintains that she did not know that this was the source. Her evidence on this question was as follows:
(a) she had been busy with other tasks and did not read or review the five emails until 31 July 2020;
(b) on review she could see that the emails contained attachments because this appeared as large icons at the top of her screen. She saved each attachment to a ‘home’ folder on her computer as is her standard practice and did not read the subject lines or texts of the emails;
(c) she saved the attachments to the 11.10 email, the 11.22 email and possibly the 11.19 email to her computer;
(d) once she completed the process of saving the attachments, she opened those attachments and reviewed them commencing with the Amended Statement of Claim – that being the document she had been expecting. The Amended Statement of Claim had annexed to it a document called the ‘Defamatory Emails Book’;
(e) she opened the emails contained in the attachment to the 11.10 email and read some but not all of the 77 emails contained. She did not open the attachment to the 11.19 email as she believed it to be a duplicate of the annexure to the Amended Statement of Claim; and
(f) ‘I am sure I did not read the subject line of the 11.07 email or the text containing the word ‘subpoena’. I am sure because, if I had seen the word subpoena I would have discussed the email with one of Ramsay’s in house lawyers, specifically with Justine Lloyd.’[21]
[21]Applicant, ‘Affidavit of Sheryl Anne Keir’, Affidavit in the matter of an application by Ramsay Health Care Australia Pty Ltd v No Respondent S ECI 2022 00362, 10 March 2022, [54].
As a result of what she had read, Keir discussed the matters raised with Lloyd that same day. In that discussion she described the conversation with Litton, the receipt of several emails from Jessica Khoury which she had not been expecting. Lloyd asked her why the emails had been sent, to which she replied that, apart from the statement of claim which she was expecting, she was unsure. Until she was told in this conversation that Ramsay legal counsel already had the statement of claim, Keir was unaware of that fact. They agreed that the emails seemed to show that Kolt had breached his obligation of confidentiality despite his denial of this in December 2019.
On 4 August 2020 Lloyd, Keir and Mr Hall, Ramsay’s Chief Operating Officer, met to discuss Kolt. In the course of the meeting, Hall requested the documents received from Jessica Khoury. Keir forwarded the 11.19 email, the 11.10 email and the 11.25 email. As she did, she edited the text of those emails. She said she did not forward the 11.07 email to Hall or to any other person. The meeting resolved to issue a show cause notice to Kolt for the breach of confidentiality subject to approval of Dr Robertson, the new chair of MAC.
In order to prepare the show cause notice Keir forwarded to Lloyd the 11.25 email and the 11.10 email with abridged text.
The 11.07 text was not forwarded by Keir to any person.
The show cause notice was sent to Kolt by email dated 12 August 2020.
On 21 August 2020, Keir received the letter from Sparke Helmore acting for Kolt raising the use of the emails disclosed by their client under subpoena. Keir deposed to discussing the letter with Hall and Lloyd and deleting the emails sent by Jessica Khoury. Keir was shocked and Lloyd seemed, to Keir, to be surprised.
On 24 August 2020, Keir received a phone call from Khoury in which she believed that a request was made not to use any of the emails sent by his wife. Shortly after, Keir received an email from Jessica Khoury stating that she had ‘mistakenly’ sent 77 emails which she described as ‘only for the purpose of the court’. Jessica Khoury pointed out that the Defamatory Email Book annexed to the statement of claim and documents received prior to the issue of proceedings (attaching 10 relevant documents) could be used. After consulting with MinterEllison on the issue, Keir emailed Jessica Khoury stating that:
It was not apparent from the initial email that the documents were mistakenly sent to me or had been produced under subpoena. I can confirm on becoming aware through legal correspondence that I received on Friday, action has been taken and the material will be deleted.[22]
[22]Applicant, ‘Exhibit to Affidavit of Sheryl Anne Keir’, Exhibit Bundle SAK-1 to the Affidavit in the matter of an application by Ramsay Health Care Australia Pty Ltd v No Respondent S ECI 2022 00362, 10 March 2022, p 221.
In her viva voce evidence, Keir said she simply assumed the documents forwarded by Jessica Khoury were provided on instruction from Ms Litton after their conversation.[23] She said that Khoury was of the opinion that Ramsay sided with Kirwan and they were in ‘cahoots’ with each other. Keir said she believed Khoury would be ‘going after Ramsay next’.[24] She said she had no interest in the defamation case or the ‘battle’ between surgeons that had been going on for years. She was concerned for the procedures in the hospital for which she was responsible.
[23]Transcript of Proceedings, In the matter of an application by Ramsay Health Care Australia Pty Ltd v No Respondent (Supreme Court of Victoria, S ECI 2022 00362, Justice Forbes, 31 March 2022) 56.29 (‘T’).
[24]T 58.22.
In relation to the subpoena issued to the hospital in the defamation case, the documents were confined to patient records and letters and not to documents relevant to Kolt and the MAC, and confidentiality. Having not seen the statement of claim, she did not connect the subpoenas directed to Ramsay in the defamation proceeding with the emails between Kolt and Kirwan.
She said that it is not her practice to work from emails but from folders containing saved copies of attachments and emails. The folder contained three saved emails which she copied and pasted to send to Hall and Lloyd, rather than forwarding matters from her email inbox.
Keir has no recollection of the 11.07 email and said that the reconstruction of the email trail showed it had not been forwarded to anyone. She believed that at the time she received duplicate emails from Jessica Khoury she didn’t read them all. She said that the 11.07 email would have been ‘at the bottom of the pile’, as the inbox displays the most recently received email at the top, and that she generally starts at the top of her inbox and works down. She says she got to the statement of claim and was ‘flabbergasted’ to read of doctors behaving so badly. Keir did not believe she went on to read the subject line or the content of the 11.07 email further down her inbox. The existence and content of that email was first brought to her attention by the Sparke Helmore 15 April letter.[25] When recalled after Lloyd’s evidence to address Exhibit 1, Ms Keir said that the mistake that led to the unauthorised use of the emails was hers by not reading her emails, not Ms Lloyd’s. She accepted that fault lay with her.[26]
[25]Letter dated 15 April 2021 from Sparke Helmore Lawyers to S Chesterman and M Petronijevic of MinterEllison with a copy to P George and N Buck of Kennedys Law, tendered by the applicant as Exhibit 1.
[26]T 80.6.
Lloyd’s evidence
Lloyd was not called in the Khoury contempt proceeding. John Dixon J said:
Although Keir professed not to know about an implied Harman undertaking, there was no evidence that the solicitors employed in Ramsay Health legal department (‘Ramsay Legal’) who drew up the show cause notice were also ignorant of that principle. It is probable that there were discussions about the exposure to risk through Ramsay Health’s use of the Kolt subpoenaed documents, and I have no doubt that Keir participated in such discussions by the time she gave her evidence…[27]
[27]Khoury v Kirwan (n 2) [44] (emphasis in original).
Ms Lloyd obtained nursing qualifications in NSW and completed a Bachelor of Arts before completing a Diploma of Law and Graduate Certificate in Legal Practice. She was admitted to practice in the Supreme Court of New South Wales in 1996 and has worked as a solicitor since that time in private practice, for government, and as corporate counsel. She has primarily practiced in health law and commenced as Senior Legal Counsel with Ramsay in 2011. She remained in that role until her resignation at the end of 2020. As at July 2020, she was in a team of seven who provided legal support to head office and 73 facilities in total – hospital and day clinic facilities at which approximately 10,625 accredited practitioners worked.[28]
[28]Applicant, ‘Affidavit of Justine Lloyd’, Affidavit in the matter of an application by Ramsay Health Care Australia Pty Ltd v No Respondent S ECI 2022 00362, 11 March 2022, [9].
Lloyd deposed to knowing that defamation proceedings were on foot between Khoury and Kirwan. More than one subpoena was served on Ramsay in that proceeding and her job was to co-ordinate provision of documents under those subpoenas and liaise with Ramsay’s external lawyers on record. In that context, a copy of the statement of claim was obtained and seen by Lloyd.[29] It had not been shown to Keir prior to 30 July 2020. Lloyd deposed that she had never met or had direct communication with Kolt but had been copied in on correspondence surrounding his role on the MAC and his resignation from that role.
[29]Although not in evidence before me, I observe from the reasons of John Dixon J in Khoury v Kirwan (No 4) [2021] VSC 333 at [32] that the amended statement of claim was provided to Ramsay’s lawyers, Dominion Lawyers on 15 July 2020.
She confirmed emailing Keir on 31 July 2020 following a discussion between them about issuing a show cause notice. She forwarded documents from late 2019 concerning the scope of review into Khoury’s clinical practice and the resignation of Kolt from MAC, for Keir’s information.
Lloyd deposes to receiving from Keir the 11.25 email and the 11.10 email. She understood that the attachments were to assist her in preparing the show cause notice. She deposed that at the time ‘I thought they were part of the statement of claim in the proceeding between Dr Khoury and Dr Kirwan. I did not know they had been obtained via a subpoena’. Her review of the statement of claim revealed details of several emails. She said she assumed the 77 Kolt emails were documents referred to in the statement of claim.
She says that it did not occur to her to ask about the source of the emails, whether that be because of the assumption she made that they were part of the statement of claim or because of her workload at the time, significantly impacted as it was by the increase in dealing with the first wave of the coronavirus pandemic.[30] She deposed to being exhausted by June 2020 to the point where she was not sure if she could continue in the role. By December 2020, her doctor told her she was suffering ‘burn out’ and for this reason she decided to resign and effectively retire.
[30]Applicant, ‘Affidavit of Justine Lloyd’, Affidavit in the matter of an application by Ramsay Health Care Australia Pty Ltd v No Respondent S ECI 2022 00362, 11 March 2022, [39].
She deposed to knowledge of the Harman undertaking and its obligations. She says she would have made inquiries had she suspected the emails were obtained under subpoena and had she known that they had been, then she would not have used the emails.
Lloyd says on receipt of the Sparke Helmore letter dated 21 August 2020 she understood that any breach of a Harman undertaking was a serious matter and referred the matter to Ramsay’s external lawyers. She acknowledges that they should not have been used and had she been aware she would not have used them as the basis for a show cause notice.
In her oral evidence, she could not recall if she asked Keir why Jessica Khoury had sent the emails but said it would be her normal practice to ask such a question.[31] She accepts without doubt that she should have asked. She was involved in the production of documents in answer to, she thought, four subpoenas from Khoury but did not connect the production by Ramsay with the emails sent to Keir. She said her assumption that the emails were annexed to the statement of claim she had seen was borne of ‘absolutely drowning in work’ and not paying sufficient attention. In answer to a question from me about a statement of claim that references 12 emails and the forwarding of a greater number of emails (77 in total), Lloyd accepted that when the pile of emails came to her she simply overlooked the discrepancy and didn’t actually weigh up the difference. Her assumption was quite simply wrong. She described being mortified by her error when she realised the emails were from subpoenaed material and accepted that she made a mistake in the face of enormous workload pressures at the time.
[31]T 71.28-30.
Hall’s evidence
Hall’s evidence set out matters of background as to the relationship between Kolt and Ramsay, Ramsay’s concerns about the clinical practice of Khoury, and the steps taken in that regard. Relevantly, there was concern in 2019 that Kolt was breaching his obligation of confidentiality. Kolt had denied this. Hall knew generally of legal proceedings between Khoury and Kirwan before July 2020 but not of the specific allegations made.
Hall received the 11.10 email, the 11.19 email and the 11.25 email, with edited text, from Keir on 4 August 2020. Hall says he was appalled that the emails seemed to confirm the breach of confidentiality by Kolt. His principal concern was the breach of confidentiality and he did not recall asking about the source of the emails.
His affidavit offers a full and sincere apology of behalf of Ramsay to the Court and to Kolt. He accepts that the subpoenaed documents should not have been used and that further inquiries should have been made before they were used. A number of steps have been taken by Ramsay to remedy the error. The show cause notice was immediately withdrawn. The emails and their attachments were immediately deleted. A fact sheet regarding ‘the Harman undertaking’ has been prepared and distributed to all Ramsay staff who might have a decision making role in disciplinary processes. The fact sheet has also been incorporated into a compulsory training module for Corporate Managers, CEOs and Directors of Clinical Services. All existing and new managers will complete this module upon induction and on a bi-annual basis thereafter.
Ms Shanahan’s evidence
Samantha Shanahan is a solicitor who now holds the position of General Counsel for Ramsay. She deposes to the substantial legal costs incurred by Ramsay in seeking to address the consequences of having used the subpoenaed documents to prepare the show cause notice.
Those costs have included costs of engaging MinterEllison to advise about the issue from August 2020 and to withdraw the show cause notice, the cost of meeting Keir’s independent legal costs as a witness called in the Khoury contempt proceeding, Lloyd’s independent legal costs, and making payment of Dr Kolt’s legal costs as agreed between Keir and Kolt in the sum of $30,739.50. Ramsay’s own legal costs, together with its indemnification of Keir and Lloyd’s independent legal costs, and including the cost of bringing this proceeding, are substantial. They exceed $500,000 in total and are far in excess of any fine that might be imposed in the event of a finding of contempt.
Analysis
The 11.07 email is the only one of the five emails that explicitly and unambiguously refers to the documents as being obtained under subpoena. This case revolves around the simple proposition that if Keir had read that email, then she had actual notice that the production of the documents was in compliance with a subpoena. There is no evidence that the 11.07 email was forwarded to or seen by any other person at Ramsay before the show cause notice was issued. Ramsay made no inquiry as to why Jessica Khoury forwarded the documents to Ramsay or how Khoury came to be in possession of them. At the very least, it was a significant error of judgment not to make those inquiries.
At first blush I found it impossible to go past the explicit nature of the text in the first email sent. However, as Keir explained, that email would have been the last looked at because the emails appeared in the inbox with the most recently received at the top of the screen. She would therefore have commenced with the 11.25 email. Insofar as her focus was first on the attachments rather than the emails, the attachment to the 11.07 email appeared to be a duplicate of that attached to the 11.10 email. Keir accepts she received and saw the 11.10 email which, although not referring to a subpoena, nevertheless attached the subpoenaed emails as the 11.07 email had purported to do. In those circumstances, I can more readily accept that an email attaching something that appears to be a duplicate of that found in another email already seen might be given scant attention. Further, in the context of retrieving the email trails for the purpose of preparing affidavits for this application, it became apparent that the attachment to the 11.07 email was in fact empty. An empty duplicate at the end of a series of emails could well be overlooked.
I have reservations about accepting Keir’s positive statement that she did not read the 11.07 email because she said had she done so she would have raised it will Lloyd. However, I do accept her evidence that she has no recollection of opening the attachment nor of reading the email until it was quoted in the 15 April letter sent by Dr Kolt’s solicitors. This is consistent with the evidence, informed by a review of the documents retrieved by Ramsay IT, that the 11.07 email was not forwarded to any person. It is also consistent with Lloyd’s evidence, which I accept, that she did not receive the 11.07 email and so was not aware that the documents had been obtained under subpoena.
Lloyd frankly conceded her knowledge of and obligations pursuant to a Harman undertaking. I accept that if she had actual knowledge of the origin of the documents, she knew that Ramsay was not permitted to make use of them and would not have used them to prepare the show cause notice. Rather she would have alerted Keir and Hall to the restriction on their use. On being informed of the source of the documents in August 2020 she immediately recognised the seriousness of the situation and engaged external lawyers for advice.
In his Honour’s reasons, John Dixon J observed a lack of evidence that solicitors employed by Ramsay who drew up the show cause notice were unaware of the principle of an implied undertaking. He thought it probable that there were discussions about exposure to risk in which Keir had participated by the time she gave her evidence. It is abundantly clear that such discussions occurred from 21 August 2020 and occurred in the face of ongoing assertions by Kolt in particular that he was contemplating contempt proceedings against Ramsay. However, there is no evidence that any such discussions occurred prior to the subpoenaed emails being used to draft the show cause notice. His observations did not have the benefit of Lloyd’s evidence, which as I have said was that of an officer of the court who gave her evidence in a straightforward manner, readily accepting of the mistake and contrite that she had not done more to ascertain the source of the documents. I have endeavoured to explain how this important issue was nevertheless overlooked by Ramsay’s legal staff.
Certain elements surrounding the evidence given by Keir before me were not present in the Khoury proceeding before his Honour. In particular, Keir was called by Kolt to give evidence, the evidence was led by Kolt’s counsel, it was somewhat interrupted and disjointed, and was given without the benefit of reference to any contemporaneous documentary trail. I had before me affidavit material of Keir with supporting and contemporaneous material which could be referenced in her examination. On that basis, I found Keir’s assertions supported by the trail of documents leading backwards to the receipt of the documents on 30 July 2020.
Keir’s knowledge of the source of the documents for the purpose of a finding of contempt is knowledge relevant to the time the documents were used. From 24 August 2020 that use was disavowed.
In the Khoury contempt proceeding, John Dixon J was faced with recollections of conversations on 30 July 2020 that were unclear and irreconcilable as between Khoury, Jessica Khoury, Litton and Keir. Ultimately, he concluded that any reference to forwarding the statement of claim discussed between Litton and Keir was incidental to a discussion primarily about the accuracy of any statement to the media about the status of restrictions on Khoury’s right to practice. He also concluded that Khoury himself decided that Keir needed to see the subpoenaed emails and arranged for them to be sent to her. I accept Keir’s evidence that she ‘had not requested’, nor was she ‘expecting to receive any emails’ from Jessica Khoury. She anticipated receiving a statement of claim from Litton in the context of an article about Khoury, not in the context of any actions by Kolt.
I accept the submission that this is not a case of wilful blindness. No doubt if the relevant question is whether Ramsay should have known that the emails had been produced by a subpoena the answer, in light of the 11.07 email, would be yes. But I am satisfied that this email was overlooked by Keir as a result of a combination of the strained workload at the time, the volume of emails generally that she was dealing with and the multiple and somewhat repetitive emails sent by Jessica Khoury. The oversight is in my view not deliberate but rather unintended and resulted in the reference to a subpoena not being brought to the attention of Lloyd in particular who would have appreciated its significance.
I accept that Ramsay’s principal concern was the breach of confidentiality by Kolt demonstrated by the subpoenaed emails and not the feud between Khoury and Kirwan.
I am satisfied that from this time, 21 August 2020, but not before, Ramsay knew both the origin of the subpoenaed emails and the obligation imposed by that knowledge. I am conscious that the element of contempt, including knowledge of the origin of the documents is to be proved beyond reasonable doubt. I am not satisfied beyond reasonable doubt that Keir or any other person at Ramsay had actual knowledge at the time it prepared and sent the show cause notice to Kolt.
If I am wrong in this conclusion and Keir had in fact read the 11.07 email and was thereby fixed with knowledge that the attached emails were obtained in answer to a subpoena, then I would be satisfied that Ramsay be discharged from any punishment for that breach. Ramsay, through Hall has apologised and acknowledged that the subpoenaed documents should not have been used and accepts that inquiry about the documents was inadequate.
Further, and having had the benefit of hearing from Lloyd and Keir, I have no doubt that their apologies were heartfelt and sincere. The evidence as to workload at the time given by both Keir and Lloyd was not given to excuse their behaviour. Both witnesses accepted their error. I accept the explanation that the workload at the time contributed to the oversight in not reading all emails or making prudent inquiries as to their source. It is not just frontline health workers that bore the brunt of an extraordinary workload dealing with the coronavirus pandemic. It is clear that administrators and others involved in health administration were also working under very difficult conditions to meet enormous demands. The actions of Ramsay staff since being made aware of the source of the documents has been to resile from any reliance on them. I also accept that Ramsay has since put in place training and procedures to educate its managers as to the obligations imposed on them by a ‘Harman undertaking’. Finally, the error has already led to a substantial financial cost to Ramsay, including bringing this proceeding of its own volition in the absence of any prosecuting third party. Given all of these matters I would be satisfied, if the use of the documents was a contempt, that the contempt has been purged.
I will make an order accepting the apologies made by Hall, Keir and Lloyd on behalf of Ramsay for the use of documents produced under subpoena to prepare a show cause notice to Kolt. Subject to any submission from Ramsay’s Counsel, I propose to make no further order.
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