SRSC v Beaumont - [2004] NSWSC 164

No judgment structure available for this case.

CITATION: SRSC & Anor v Beaumont & Ors [2004] NSWSC 164

HEARING DATE(S): September 15, 16, 17, 22, 23, 24, 25, 26, 29, 30, October 1, 7, November 3, 4, 5, 10, 11, 12, 13, 14, 17, 19, 20, 21, 24, 25, 26, 27, 28, December 1, 2003.

JUDGMENT DATE:
18 March 2004

JURISDICTION:
Common Law Division
Defamation List

JUDGMENT OF: Studdert J

DECISION: (1) In the proceedings by the second plaintiff arising from the publication in April 1998, verdict for the second plaintiff against the first defendant in the sum of $10,000, together with interest in a sum to be determined. (2) In the proceedings by the second plaintiff arising from the publication on 4 May 1998, verdict for the second plaintiff against the first and the second defendants in the sum of $70,000, together with interest in a sum to be determined. (3) In the proceedings by the second plaintiff arising from the publication on 5 May 1998, verdict for the second plaintiff against the first and the third defendants in the sum of $120,000, together with interest in a sum to be determined. (4) In the proceedings by the first plaintiff arising from the publication in April 1998, verdict for the first plaintiff against the first defendant in the sum of $4000, together with interest in a sum to be determined. (5) In the proceedings by the first plaintiff arising from the publication on 4 May 1998: (a) verdict for the first plaintiff against the first and second defendants concerning imputations (b), (d), (e), (f) and (g) in the sum of $62,500, together with interest in a sum to be determined; (b) verdict for the first plaintiff against the second defendant concerning imputation (h) in the sum of $12,500, together with interest in a sum to be determined. (6) In the proceedings by the first plaintiff arising from the publication on 5 May 1998: verdict for the first plaintiff against the first and the third defendants concerning imputations (b), (d), (e), (f) and (g) in the sum of $638,020, together with interest in a sum to be determined; (b) verdict for the first plaintiff against the third defendant concerning imputation (h) in the sum of $127,604, together with interest in a sum to be determined. (7) In respect of the claim by the first plaintiff against the first and second defendants, and in respect of the claim by the first plaintiff against the first and the third defendants, I reserve leave to the first plaintiff to apply for additional damages referable to capital gains tax considerations should the first plaintiff be found liable to pay such tax. (8) Costs are reserved. (9) The matter is to be relisted by arrangement with my associate for argument as to interest and costs.

CATCHWORDS: DEFAMATION - Claims arising from interview and two subsequent television programmes - one in Victoria and one in New South Wales - Imputations found by jury - defences of truth and of comment raised to all three publications. Claims for damages by specialist opthalmologist - claims on imputations arising from interview and two later television programmes - assessment of damages - whether assessment should include aggravated damages - whether in case of Victorian programme exemplary damages should be awarded. Claims for damages by body corporate - claims on imputations arising from interview and two later television programmes. Assessment of damages - whether assessment should include aggravated damages - whether in case of Victorian programme exemplary damages should be awarded - whether assessment should make provision for capital gains tax - leave to apply for such provision reserved.

LEGISLATION CITED: Defamation Act, ss 7A, 15, 16, 30, 31, 32, 34, 46, 46A, 47, 48
Income Tax Assessment Act 1997, ss 4-5, 6-5, 102-5, 118-37
Income Tax Assessment Act 1936, s 160ZB

CASES CITED: Bickel v John Fairfax & Sons Limited (1981) 2 NSWLR 474
Breen v Williams ((1995-96) 186 CLR 71
Briginshaw v Briginshaw (1938) 60 CLR 336
British Transport Commission v Gourley (1956) AC 185
Bulfin v Bebarfald's Limited (1938) 38 SR 423
Carson v John Fairfax Limited (1992-1993) 178CLR 44
Catt v Marac Australia Limited (1987) 9 NSWLR 639
Coyne v Citizen Finance Limited (1990-91) 172 CLR 211
Cullen v Trappell (1980-81) 164 CLR 1
Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41
Hunt v Star Newspapers (1908) 2 KB 309
Jackson v TCN Channel 9 [2002] NSWSC 1229
Jones v TCN Channel 9 (1992) 26 NSWLR 732
Joynt v Cycle Trade Co. (1904) 2 KB 292
Lamb v Cotogno (1987) 164 CLR 1
McGregor on Damages, 17th ed. @ 503-504
Merivale v Carson (1888) 20 QBD 275
O'Brien v McKean (1968-69) 118 CLR 540
Perkins v NSW Land Council (1998) 45 NSWLR 340
Pfeiffer v Rogerson (2000) 203 CLR 503
Rabelias Pty Limited v Cameron 95 ATC 4552
Refjek v McElroy (1965) 112 CLR 517
Rogers v Nationwide News Pty Limited (2003) 201 ALR 784
Rogers v Whitaker (1991) 23 NSWLR 600; (1992) 175 CLR 479
Rubber Improement Limited & Anor v Daily Telegraph Limited (1964) AC 234
Steele v Mirror Newspapers (1974) 2 NSWLR 348
Steiner-Wilson & Webster Pty Limited v Amalgamated Television Services Pty Limited (unreported, Crispin J, ACT SC, 18 November 1999)
Tinkler v Commissioner of Taxation (1979-80) 29 ALR 663
Triggett v Pheeney (1951) 82 CLR 497
UDC v Brian (1985) 157 CLR 1

PARTIES :
Sydney Refractive Eye Surgery Centre Pty Limited (1st Plaintiff)
Dr Michael Lawless (2nd Plaintiff)
Dr Paul Beaumont (1st Defendant)
HSV Channel Seven Pty Limited (2nd Defendant)
Amalgamated Television Services Pty Limited (3rd Defendant)

FILE NUMBER(S): SC 20298/98

COUNSEL: B.R. McClintock SC/M.F. Richardson (Plaintiffs)
T.E.F. Hughes QC/K.P. Smark (Defendants)

SOLICITORS: Gilbert & Tobin (Plaintiffs)
Mallesons Stephen Jaques (Defendants)

INDEX

Paras 1-3 Claim for damages for defamation.

The imputations pleaded and found by the jury.

Paras 4-6 The defences and the reply.

Paras 8-16 Laser eye surgery and the involvement of Dr Lawless and of Dr Rogers in this field pre publications.

The video “Wake Up and See” (para 12).

Paras 17-57 Assessment of evidence of Dr Rogers, Dr Lawless and Dr Beaumont.

Paras 58-177 The issue of truth of imputations.

Paras 178-188 The defences as to comment – statements of principle.

Paras 189-239 Comment and the interview in April 1998.

Paras 240-249 Comment and the Victorian programme.

Paras 250-252 Comment and New South Wales programme.

Paras 253-293 Damages – the claims of Dr Lawless.

Paras 294-394 Damages – the claims of the first plaintiff.

Paras 395 Formal orders.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
DEFAMATION LIST

STUDDERT J

Thursday 18 March 2004

20298/98 SYDNEY REFRACTIVE SURGERY CENTRE & ANOR v PAUL BEAUMONT & ORS

JUDGMENT

1 HIS HONOUR: The plaintiffs, Sydney Refractive Surgery Centre Pty Limited and Michael Lawless, sue the first defendant, Paul Beaumont, the second defendant, HSV Channel 7 Pty Limited, and the third defendant, Amalgamated Television Services Pty Limited, claiming damages for defamation.

2 Put shortly, as pleaded, the imputations charged are claimed to arise from three matters:

(i) In April 1998 the first defendant conducted an interview with a representative of the second and third defendant television networks and it is the plaintiffs’ claim that what he said carried a number of serious imputations which I shall presently identify. (The text of the interview became Exhibit B and, for convenience, the text is Appendix 1 to this judgment.)

(ii) On 4 May 1998 the second defendant put to air in Victoria a programme called “Today Tonight” and it is the plaintiffs’ claim that this carried a number of serious imputations. (The videotape and the transcript became Exhibit F and, for convenience, the transcript is Appendix 2 to this judgment.)

3 At a trial conducted pursuant to s 7A of the Defamation Act, the jury determined that the matters complained of carried many grave imputations which are conveniently set out in Exhibit EEE, which I here record:

“ SRSC: Imputations summary

Imputation	Beaumont Interview: SRSC	Beaumont Interview: Dr Lawless	Broadcasts: SRSC	Broadcasts: Dr Lawless
(a) unethical misleading	•
(b) deceitful scheme to trick with video	•	•	•	•
(c) disgrace to profession in that recommends surgery	•	•
(d) irresponsible eye surgeon	•	•	•	•
(e) no patient gone blind	•	•	•	•
(f) throw away spectacles	•	•	•	•
(g) absurdly inflated costs	•	•
(h) false advertisements	•

SRSC

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

Dr Lawless

(b)

(c)

(d)

(e)

(f)

4 At this subsequent trial, the defendants did not rely upon all of the defences that were pleaded, and it is convenient that I now record in short form those defences that have been pursued. Those defences are the following:

(a) By the first defendant

As to each of the imputations other than imputation (g):

(i) justification (s 15 of the Defamation Act , 1974);

(ii) contextual justification (s 16 of the Defamation Act , 1974);

(iii) comment (s 32 of the Defamation Act , 1974).

As to imputation (g):

(i) comment.

(b) By the second defendant

In relation to the Victorian broadcast, the second defendant similarly relies upon common law defences analogous to the above, save that the comment defence is comment by a stranger.

By the third defendant

As to each of the imputations other than imputation (g):

(i) justification (s 15 of the Defamation Act , 1974);

(ii) contextual justification (s 16 of the Defamation Act , 1974);

(iii) comment of a stranger (s 34 of the Defamation Act , 1974).

As to imputation (g):

5 Each of the defendants allege against both plaintiffs as to imputations (b), (e), (f) and (h) that the plaintiffs behaved in a fraudulent manner.

6 In reply the plaintiffs pleaded malice. As to the defence of comment under s 32 of the Defamation Act, the issue as to whether any comment represented the opinion of the first defendant was raised. As to the defence of comment by a stranger under s 34 of the Defamation Act, the issues as to whether the comment was that of the first defendant, and, if so, any such comment was in good faith for public information arose.

7 The hearing of this cause occupied thirty sitting days and the tendering of nearly 150 exhibits. It would be neither practicable nor useful to conduct a comprehensive review of the evidence of each witness from whom evidence was taken. There are, however, certain matters that either have not been in dispute at this lengthy hearing or which have been clearly established, and I shall address these matters first. Then, because of the issues of malice raised against Dr Beaumont and of fraudulent conduct raised against the plaintiffs, I will conduct some analysis of the evidence of Dr Rogers, Dr Lawless and Dr Beaumont. Thereafter I shall consider the issues that arise because of the defences that have been pursued.

8 Dr Rogers and Dr Lawless are both specialist ophthalmologists. In 1991 they acquired together a laser for the performance of eye surgery. In 1996 the first plaintiff was incorporated and thereafter Dr Rogers and Dr Lawless conducted their practices through the first plaintiff. They were joined in that practice by Dr Sutton. The first laser eye surgery conducted in 1991 was PRK (photorefractive keratectomy). Then, in December 1995, the plaintiffs began to carry out a new procedure known as Lasik (Laser assisted in situ keratomileusis). In the year ended 30 June 1997, the plaintiffs performed 912 Lasik primary procedures compared with 369 primary PRK procedures. Then in the year ended 30 June 1998, 2362 primary Lasik procedures were carried out compared with 28 primary PRK procedures.

9 Briefly, the older procedure, PRK, which was introduced into Australia in 1991, begins with a portion of the outer layer of the cornea, the epithelium, being scraped away. Then an excimer laser is applied to the exposed surface, which is sculpted to correct the eye’s refractive error. Lasik is a different procedure altogether. The first stage with this procedure is to cut the outer layer of the cornea to leave a flap that is peeled back but not removed. After the flap is rolled back, the laser is applied to the area within the cornea; then when the laser treatment is finished the flap is put back into position and, ordinarily, it heals quickly.

10 Whilst both PRK and Lasik were used to treat short-sightedness, Lasik is generally regarded as an improved procedure, and one of its advantages was that it was less painful than PRK and enabled more rapid recovery.

11 In 1992 or 1993 Dr Rogers and Dr Lawless began to employ orthoptists, and, after it was incorporated, SRSC did likewise. By 1997 or 1998 the first plaintiff had four or five employed orthoptists.

12 In 1997 a decision was made by the plaintiffs to introduce an information video intended for prospective patients. There had been an earlier video (Exhibit 17), but the evidence disclosed that in 1997 EFEX produced a new video for the first plaintiff. This new video was called “Wake Up and See”. This new video was first distributed in September 1997. It was this video which became the focal point of the interview (see Exhibit B), and of the TV broadcast (see Exhibits F and G). The video was also the focal point of the imputations upon which the plaintiffs’ claims are based.

13 Dr Rogers and Dr Lawless are both eminent ophthalmologists. So, too, is Dr Beaumont. It is a sorry feature of this litigation that the Court is required to make an assessment of the credibility of these three specialists and to make findings as to their conduct. However unattractive the prospects of doing so may be, it is nevertheless necessary for the Court to undertake this task, because it is alleged against Dr Rogers and Dr Lawless that they behaved in a fraudulent manner, and it is alleged against Dr Beaumont that he has behaved maliciously and that he has expressed opinions that he has not held.

14 I do not intend to dwell upon the details of the career of Dr Rogers. There is no issue as to the accuracy of his curriculum vitae, Exhibit M. He has had an interest in laser surgery since 1985 and has had extensive experience in the field of laser surgery. He was the corneal specialist at Royal North Shore Hospital until the late 1980s when Dr Lawless replaced him.

15 Professor McGhee, whose professional eminence is not here challenged, expressed in his evidence the highest regard for the reputations of both Dr Rogers and Dr Lawless in 1997 and 1998. Indeed, Professor McGhee arranged to send two Fellows to them for training in corneal cataract and refractive surgery. Professor McGhee was asked these questions and gave these answers (T 1447):

“Q. They were known as experienced refractive surgeons in 1997/98?
A. Yes.

Q. In fact, probably known as the most experienced refractive surgeons in Australasia?
A. Probably.

Q. They were also known to be carrying out a considerable amount of research into refractive surgery in the course of their practices, weren't they?
A. That's correct.

Q. And publishing a large number of papers about refractive surgery?
A. Probably the biggest group of publications in Australasia.

16 Dr Martin also spoke highly of Dr Rogers (T 914) and of Dr Lawless (T 913-914).

17 Dr Rogers spent a long period in the witness box and he was subjected to lengthy and testing cross examination.

18 There were a number of features of the evidence of Dr Rogers, and a like criticism is made of the evidence of Dr Lawless, concerning which Mr Hughes voiced stern criticism. One of these features was the attitude towards the video “Wake Up and See”. Another was the false assertion in the video as to the number of procedures that had been undertaken. It is desirable that I address these matters here.

19 Whilst I accept that a function of the video, Exhibit A, was to inform prospective patients about Lasik eye surgery, I also find that a further function of the video was promotional. In other words, it was intended to encourage the viewer entertaining consideration of the surgery. It was designed to attract rather than to deter.

20 When cross examined about this (at T 237), Dr Rogers did not accept that the video was promotional:

“Q. Not promotional?
A. No - it wasn't promotional. It was meant to be just an introductory information video. It was meant to help people understand the process that they would go through. I mean, we did - we didn't actually - we didn't encourage, by ‘promotion’, meaning handed out on street corners or posted to people willy nilly. It was for people who had already expressed an interest in laser surgery or who had arrived to have a consultation, and this video was meant to just show them the process they would go through and then help them, allow them to understand something about the process, before they spoke to the orthoptist or before they spoke to me, or one of the surgeons.

Q. Ninety-nine per cent of the people who after mid-1997 underwent laser eye surgery at Sydney Refractive Surgery Centre viewed this video; is that right?
A. Yes.

Q. And they viewed it, would you agree, either because they did so when it was sent out to them at their request; is that right?
A. Yes.

Q. Or when they came into the clinic and were shown into a viewing room to view it?
A. Yes.

Q. Ninety-nine per cent?
A. Yes.

21 Then (at T 238-239):

“Q. And would you not agree, as a logical proposition, that if it was designed not to dissuade them, common sense tells you that it was designed to persuade them?
A. No, I thought it was meant to be neutral. It was meant to give people information.

Q. You say, do you, that this video, exhibit A, was neutral?
A. Yes.

22 Dr Rogers made the point that only three percent of those who inquired about the possibility of surgery proceeded to have surgery.

23 I found the reluctance of Dr Rogers to acknowledge the promotional objective of the video to be an unsatisfactory feature of his evidence.

24 In Exhibit A (at lines 21-22), Helen O’Connor, on whose experience the video was based, stated:

“But the surgeons are very experienced and already they’ve completed over 5000 operations.”

25 Exhibit 3, which quantified the PRK and Lasik procedures undertaken month by month from 1 September 1991 onwards, showed procedures up to the end of July 1997 totalling 3288. I find on the evidence that that aggregate figure was the aggregate of primary procedures undertaken. I accept that it did not include revision procedures. If these were taken into account, Exhibit WWW reveals that by the end of July 1997 the number of procedures carried out was some 4300. However, on either approach to the numbers, what Helen O’Connor said in Exhibit A was wrong.

26 This error assumes significance when considering the defences raised to imputation (b) and imputation (h). Fraudulent behaviour is attributed to the plaintiffs over this misstatement of the number of procedures.

27 Mr Hughes submitted that a surgeon who advertised with a view to gaining professional business was under a fiduciary duty concerning the content of the advertising material. He cited Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41, and in particular the judgment of Mason J at 97, and UDC v Brian (1985) 157 CLR 1 per Gibbs CJ at 5-6; Catt v Marac Australia Limited (1987) 9 NSWLR 639 at 651; and Bulfin v Bebarfald’s Limited (1938) 38 SR 423. Mr Hughes properly acknowledged however that there was no authority directly in point and Breen v Williams (1995-96) 186 CLR 71 acknowledged certain restrictions upon the duty owed by a doctor to a patient. Whilst Breen v Williams is not directly in point, I am not persuaded that the distribution of a promotional video was attended by fiduciary duty such as that for which Mr Hughes here contends. Nevertheless, care should have been exercised in seeing to the accuracy of the information contained in the video, including the information about the number of procedures.

28 How did the misstatement occur?

29 Dr Rogers acknowledged in his evidence that Helen O’Connor overstated the number of procedures (T 159). His evidence was to the effect that he first realised the number of operations had been overstated two days before the hearing began on 15 September 2003 (T 251). Dr Rogers said he thought the number had been provided by Carla Riches, a former office manager of the first plaintiff (T 160, T 302).

30 Carla Riches, however, was called by the defendants. Ms Riches was the office manager for the first plaintiff from January 1996 until November 1997 and was involved in the making of “Wake Up and See”, dealing with EFEX in its production. Ms Riches was provided by EFEX with a proposal for the video (Exhibit 27) and she said she provided it to Dr Rogers and to Dr Lawless. Ms Riches said she also gave to the doctors for their approval the second draft script provided by EFEX (Exhibit 16). Likewise, the final script (Exhibit 30) in which it was asserted the first plaintiff had, since 1991, “performed over 4000 operations”. According to Ms Riches, the information as to the numbers came from Dr Rogers and Dr Lawless (T 1033). In a brochure (Exhibit 9) that came into use after the first plaintiff moved premises to Chatswood on 4 July 1997, it was stated that “over 4000” laser procedures had been performed by the first plaintiff, and Ms Riches said that Dr Rogers gave her the information for this document (T 1029), and that the figure of “4000” was arrived at in consultation with Dr Rogers (T 1045). The video director, Ian Stevenson, and the video producer, Angela Barbour, were called by the defendants to complete the evidence as to how “Wake Up and See” came into existence. Ms Barbour did not know where the reference to “over 4000 operations” in Exhibit 30, or the reference to “over 5000 operations” in the working script (Exhibit 47), came from, but I am satisfied that these numbers came from the first plaintiff, and I accept the evidence of Ms Riches that it was Dr Rogers and Dr Lawless who provided the numbers.

31 It is not altogether clear how the numbers were arrived at. I accept that there were no comprehensive computer records available such as would have recorded at the time precise numbers as to procedures. I accept that to obtain accurate numbers it would have been necessary to work through the many volumes of logbooks in which details of procedures that had been performed were kept.

32 Dr Rogers did accept responsibility for the misinformation in the video about the operation numbers (T 252); he acknowledged that the misstatement of numbers was “a bad mistake” (T 254), a “seriously incorrect figure” (T 255), and “a serious error” (T 260). The error was compounded because it was elsewhere repeated or built upon in other publications distributed by the first plaintiff, such as the brochure, Exhibit P, where the number had mistakenly escalated to “more than 8000”, and the third edition of “Wake Up and See” (Exhibit 5) where the number of procedures was wrongly stated as “over 12,000 operations”.

33 Dr Rogers was cross examined about that last number of “over 12,000 operations” at T 292-293:

“Q. Did you realise it as your responsibility to check that figure before it was embodied in a promotional videotape to be released to the public?
A. I was responsible for the figure.

Q. Would you answer my question?
A. I didn't make any other checks, other than the checks I have told you before, that - the way I came to the figure. I came to the figure, I thought the figure was about right, and I'm responsible for the figure. But I didn't - I didn't check of the - I mean, it was - I didn't ever, until the - until it was considered important for other reasons, I didn't think anything to do with these reasons, I didn't ever get anyone to go back and manually check all of the procedures that were done before we switched to a computer system where we could keep an exact record. So all those - what I had in mind of the cases that were done before the computer came in were a bit of a guess.

Q. ‘A bit of a guess’?
A. A fairly accurate guess, I thought, Mr Hughes, but they weren't - they weren't checked by anyone.

Q. What were not checked by anyone?
A. No-one went back and manually checked all out of the log book, which was the only way of doing it, all the numbers of every procedure that we had done from 1991 through to the time that we went on to a program where it was kept by computer, and I can't - so at any time when I - the assessment of the numbers that we were doing, there was - I mean, not total guesswork, but there was an estimation of what we had done during the time before we went on to a computer.

Q. Did you make that estimation?
A. It was - no, it was a combination of me and the practice manager, whoever the practice manager was at that time.

Q. Who was that?
A. Well, the practice manager during - when the first video was made, was Carla Riches?

Q. Carla Riches?
A. Yes. I mean, because, well --

34 Not only were incorrect numbers stated in the first plaintiff’s videos and literature but in newspaper advertisements as well: see Good Weekend, 1 August 1998 (Exhibit 4) (T 258-259).

35 Satisfied as I am as to the responsibility of Dr Rogers for the incorrect information as to numbers, I consider his conduct to have been very careless in the provision of the figures, or at the very least in allowing incorrect numbers to be published.

36 Like Dr Rogers, Dr Lawless was reluctant to acknowledge the promotional role of Exhibit A. He did not agree that the statement by Helen O’Connor as to the experience of the surgeon at SRSC was in any sense promotional (T 717). He thought that the video described Ms O’Connor’s experience (T 718). Contrary to what Dr Lawless had to say, I consider the conclusion that the video was in part promotional is inescapable.

37 I am satisfied as to the responsibility of Dr Lawless for the incorrect statement in Exhibit A as to the number of operations. It seems to me there existed ample opportunity for both doctors to have checked the procedure numbers, and they should have done so.

38 In evidence Dr Lawless acknowledged that the assertion in Exhibit A as to the number of operations was incorrect (T 586, T 671-673). He could hardly have done otherwise. Dr Lawless contributed to the writing of Exhibit 29, a co-management document that came into existence after Exhibit A, and in which it was asserted in the introduction that “SRSC has performed more than 6000 successful procedures.” Dr Lawless was unable to explain how the figure of 6000 was arrived at, but he agreed it was an error and that he did nothing to check it (T 752). Dr Lawless was the co-author of co-management guidelines, Exhibit T, which came into existence before the end of April 1998. In this it was asserted that SRSC had treated some 8000 eyes and that figure too was wrong.

39 Like Dr Rogers, Dr Lawless incorrectly attributed primary responsibility for the wrong number appearing in Exhibit A to Carla Riches (T 587).

40 Dr Lawless put forward this explanation:

“If you put a number of lasers performed, it's going to be accurate for a week because the week before and the week after you did less and then you did more. I don't think it was - I didn't consider myself central to choosing the number 5,000, but if I was and making a video, you'd want the video to last for a couple of years, as you want a brochure to last for two or three years, and it has to be a number that reflects somehow where you were, where you're going to be six months later and probably two years later.

41 The above explanation is totally unacceptable and could not excuse an overstatement of procedures performed.

42 There is another unsatisfactory feature of the evidence of Dr Lawless concerning this video. Dr Lawless said he did not see a draft script for the video, but that evidence was plainly incorrect, as the doctor went on to acknowledge in his cross examination and as the evidence of Carla Riches, Ian Stevenson and Angela Barbour in any event established. Indeed, when shown a draft script, Exhibit 15, with handwriting upon it, Dr Lawless acknowledged that the handwriting was his, even though he could not remember putting it there.

43 I accept that Dr Lawless had genuinely forgotten that he had been presented with a draft script for consideration before “Wake Up and See” came into being, but, as earlier remarked, I regard him as being equally blameworthy with Dr Rogers for the false statement of procedure numbers in the first edition of “Wake Up and See”, and for the failure to correct such error in it, and in the failure to prevent the compounding of that error in later versions of the video and in literature put out by the first plaintiff. Both doctors, in my opinion, behaved very carelessly.

44 Mr Hughes submitted that their fault exceeded mere carelessness, and that they deliberately falsified the operation numbers or, at least, that their behaviour amounted to recklessness. I do not find this submission to have been made good.

45 In the opinion of Dr Lawless 1000 operations conveys a sense of experience (T 750); Dr Stasiuk thought 500 to 1000 Lasik cases were more than sufficient to engender a patient’s confidence (T 849); Professor McGhee considered a refractive surgeon to be an expert in the area after performing “probably a few hundred” procedure (T 1448), although the number 5000 would have been “reassuring” (T 1422).

46 It seems to me that a reasonable viewer of this video, Exhibit A, would be no more influenced to undertake laser eye surgery in response to information that asserted the surgeons had performed “over 5000 operations” than to information that the surgeons had performed “over 3000 operations”, or “over 1000 operations”, or “thousands of operations”.

47 It seems to me to be unlikely that had they contemplated dishonest or fraudulent behaviour to boost patient numbers, either Dr Rogers or Dr Lawless would have perceived it to be a useful exercise to deliberately or recklessly overstate the number of procedures that had been carried out by the first plaintiff.

48 Whilst I consider the behaviour of both Dr Rogers and Dr Lawless to have warranted criticism in the respects above identified, I was in other respects impressed by each of these doctors. Each doctor was in the witness box for a long period and each doctor was subjected to very testing cross examination. Each of these witnesses impressed me generally as being an honest and reliable witness, and I reject the submission levelled against each of them that there was any element of fraud in relation to the overstatement in Exhibit A or elsewhere of the number of operations undertaken by the first plaintiff. I reject the submission that the operation numbers were deliberately falsified, and I reject the alternative submission that either doctor behaved recklessly concerning such overstatement.

49 This brings me to Dr Beaumont. Dr Beaumont is an ophthalmologist who has specialised in medical retina and neuro-ophthalmology. Dr Beaumont has practised as an ophthalmologist for thirty years and Exhibit 40 evidences his distinguished career.

50 Dr Beaumont commenced laser eye surgery in February 1972, and that has been his particular speciality, primarily for the treatment of retinal conditions; Dr Beaumont said (T 1047):

51 Unlike Dr Rogers and Dr Lawless, Dr Beaumont has never practised excimer laser refractive surgery, but his evidence was that he had kept himself informed by the literature relating to laser eye surgery and in about 1990 he became involved in the establishment of the Macquarie Street Excimer Laser Centre. A number of ophthalmologists responded to an offer to become involved in a group purchase of an excimer laser. The members of the group agreed to be bound by an independent ethics committee, and Dr Beaumont was the chairman of that committee. The Macquarie Street Excimer Laser Centre operated until about the middle of 2003.

52 The concept behind the ethics committee was that of Dr Beaumont. He explained it in his evidence in this way (T 1051-1052):

“A. It was primarily my idea that the Excimer laser would create a financial pressure on any single doctor who was buying it that would make it very difficult for him to not want to laser every case that came along, that there would be a conflict of interest between the financial pressure on him and his professional duty, so to minimise that conflict of interest I suggested to my colleagues that they should form a large group where the pressure would not be as great and that, furthermore, they could establish an independent ethnics committee outside of the ownership of the group that could, in the early stages of the development of this new technology, help to guide the ethics of the whole group and a number of colleagues agreed that this was a good idea and the centre was set up.”

53 Dr Beaumont had a financial interest in the Macquarie Street centre throughout the period within which laser eye surgery was being conducted there (T 1056).

54 Dr Beaumont was contacted by Mr Little from the third defendant prior to the two television broadcasts on 4 and 5 May 1998. Mr Little requested that he go on a programme on excimer laser surgery and that he agree to address ethical issues on that programme. Following that initial approach Dr Beaumont had a meeting with John Little at Dr Beaumont’s office and subsequently he met with Mark O’Brien from the third defendant. When he met with Mark O’Brien, Dr Beaumont was shown Exhibit A from start to finish and then it was played back again and the video was stopped during this replay, as the transcript, Exhibit B, records. I will address the imputations and the issues raised by the defences and the reply presently, but it is my intention to express my assessment of Dr Beaumont as a witness, necessary as this has become by reason of the issues raised in this cause.

55 Like Dr Rogers and Dr Lawless, Dr Beaumont gave evidence over an extended period and he was subjected to searching cross examination. I had ample opportunity to observe him in the witness box and I regret to say that there were many features of his evidence that bear upon the question as to whether I ought to regard his evidence generally as being reliable. I propose to deal with those matters now:

Rogers v Whitaker

Dr Rogers was not cross examined about the above conversation, but when Dr Beaumont gave evidence, he denied what Dr Rogers claims had occurred (T 1102).

Then, in 1996, Dr Rogers said that there was a deal of publicity concerning the launch of the first plaintiff’s new laser, and Dr Beaumont protested to him about the “publicity barrage”. Dr Beaumont said: “I’m appalled. I’m really surprised that you would do it”, but then added: “I’m not surprised by Lawless. It’s just the sort of thing he’d get up to. He should be drummed out of the College.” (T 105)

Once again, Dr Rogers was not cross examined to test his account of this conversation, but Dr Beaumont denied the remarks Dr Rogers attributed to him about Dr Lawless.

In the absence of cross examination, I prefer the evidence which Dr Rogers gave concerning the conversations he claimed to have had with Dr Beaumont in 1991 and in 1996 rather than Dr Beaumont’s denials.

(b) In September 1997 Dr Lawless saw a patient, Mrs Mullane, for a second opinion regarding a cataract and implant surgery. Mrs Mullane had been a patient of Dr Beaumont, but he decided that the patient needed to have her cataracts addressed and referred her to Dr Chatfield. Dr Chatfield was retiring and Mrs Mullane asked Dr Lovett, who was her son-in-law and a medical practitioner, to recommend an ophthalmologist. Dr Lovett recommended Dr Lawless. When Dr Beaumont found out about this, he telephoned Mrs Mullane and advised her to seek treatment elsewhere, because the speciality of Dr Lawless was predominantly that of refractive surgery.

All the correspondence concerning this incident is collected in Exhibit EE. Dr Lawless complained to the president of the Royal Australian College of Ophthalmologists about Dr Beaumont’s behaviour and eventually the matter was resolved. The College took no action. What is significant, however, is part of the content of the letter which Dr Beaumont wrote to the president of the College on 23 September 1997 addressing the complaint. Paragraphs 7 and 8 of that letter read:

“7. I deny that I have a bias or prejudice in regards to Dr Lawless. My judgment of his professional standing is based on facts such as this event, his statements to the press, his display on television, his publications of his clinical experience in treating high myopes and getting a high incidence of complications and the reports from my colleagues.

8. I have read the letter of Dr Ian Lovett. Dr Lovett knew I was looking after his mother-in-law and had done so for thirteen years. He should have contacted me prior to referring her off to another eye specialist. If Dr Lovett had followed the usual professional ethics of contacting me prior to referring his mother-in-law or if he had done the usual practice of making the referral through his local practitioner, Dr Sheen, then the confusion which occurred would have been avoided. There are many points in Dr Lovett’s letter which are factually incorrect but as Dr Lovett is not making a formal complaint, I will ignore these. I do make the observation, however, that I think it is rather unethical that Dr Lawless should involve his personal friends in his vendetta.”

To my mind the paragraph numbered 7 manifests ill-will to Dr Lawless. The assertion of “a high incidence of complications” and the assertion of “reports from my colleagues” (inferentially unfavourable) evidence ill-will towards Dr Lawless.

Then, in paragraph 8, there is the assertion, unfounded in the evidence, that Dr Lawless involved Dr Lovett in a vendetta.

(c) On 5 March 1998 Dr Beaumont wrote to the New South Wales Medical Board enclosing a letter written by Dr Rogers, Dr Lawless and Dr Sutton on the question of co-management. This subject, indeed, was a subject which was considered by the Royal Australian College of Ophthalmologists. However, Dr Beaumont sought legal advice as to its terms and reported to the Medical Board that the legal opinion (copy of which he enclosed) suggested that the co-management fee was a secret commission “and therefore a criminal act”. Dr Beaumont concluded by asking the Medical Board to deal with the situation “as it may not only be unethical and contravene the Medical Act, but it may also be deserving of a criminal prosecution” (see Exhibit W).

Dr Beaumont asked the Medical Board in Exhibit W to consider referring the matter to the Attorney General.

When cross examined about his letter to the Medical Board, Dr Beaumont denied that he wanted Dr Rogers, Dr Lawless and Dr Sutton to be prosecuted (T 1114) and, indeed, he went so far as to say that he would rather they were not prosecuted (T 1115). I simply do not accept that evidence, particularly having regard to the content of Exhibit W.

It is to be observed that the complaint to the Medical Board raised in Exhibit W shortly before Dr Beaumont was interviewed by Mr O’Brien remained undetermined when the interview for the broadcast took place.

Later, however, when taken to Exhibit OOO, being the by-laws of the College of Ophthalmologists, Dr Beaumont did agree (T 1563) that when he gave the interview to Mr O’Brien, he breached an ethical by-law, and in particular the following provision:

“(a) Only the President, Honorary Secretary, Chairman of the Public Relations Committee or a Fellow specifically deputed by one of them is authorised to act as media spokesperson for the College. However, in respect of a State or local issue, the relevant Branch Chairman or his/her nominee may speak to the media on behalf of the Branch.

(b) Members shall not advertise or make a statement to the public about professional services unless the chief purpose of the advertising or statement is to present information reasonably needed by any patient or colleague to make an informed decision about the appropriateness and availability of medical services.

statements to the public

must not be likely to bring

one’s colleagues into disrepute

(Emphasis added)

Dr Beaumont recognised he could have complained to the College about the plaintiffs’ video, Exhibit A, (T 1563), and I am unable to accept that it was Dr Beaumont’s perception that his participation in the interview with Mr O’Brien involved no breach of the ethical standards prescribed by the College.

(3) Prior to the interview for the television programme, Dr Beaumont said he told somebody from Channel 7 he did not want his comments to be associated with naming a particular group (T 1143). He said that he told Mr Little this. However, before the interview was conducted, Dr Beaumont provided to Mr Little a copy of the co-management letter which the plaintiffs had sent to Lisa Cottee (Exhibit VV). In the interview he spoke about the “Wake Up and See” video. He said he was hoping in the course of the interview that no-one would be named and no specific centre would be named, but it must have been quite obvious to Dr Beaumont because of the very circumstances in which he was interviewed that the broadcast would identify both plaintiffs.

“I know you are concerned about litigation, so are we. My experience with contentious stories like this is that if you hold back during the interview and try to be legalistic, the impact is lost. It is better to be bold and let the lawyers pick over it thoroughly before broadcast. We want to do a powerful program but rest assured every word will be rigorously legalled.

As discussed, I am faxing to you separately a document concerning any legal action which may be instigated against you as a result of the program.”

Dr Beamont’s assertion that he did not want any particular group or person to be named was not supported by any expression of disapproval or of disappointment when the plaintiffs were named in the broadcasts. Indeed, on the contrary, Dr Beaumont wrote to Mr Little after the programme expressing his pleasure (Exhibit PPP). His letter of 12 May 1998 reads in part:

“Dear John

I would like to thank you and your fellow workers for your excellent programme concerning excimer laser. I was extremely anxious as everyone had warned me how terrible the press are and how they can quote you out of context. My fears, of course, were groundless. You did an excellent job. The selected quotes were very appropriate…”

No complaint was made in the letter that he did not want the plaintiffs named and I do not accept that it was his wish that their anonymity be preserved.

“the script for a video which is being made for the unit was discussed and Dr Michael Delaney’s video was viewed, which forms a basis for this script. This video should be available in the near future.”

Dr Beaumont signed the minutes of the meeting immediately below the above paragraph.

During the course of cross examination of Dr Beaumont a call was made for the video referred to in the minutes and the video Exhibit SSS was produced. Dr Beaumont said he did not recall seeing the entire video (T 1763) and he thought there may have been some technical difficulty preventing its complete showing. He also suggested that maybe Dr Smith and Dr Delaney viewed it in his absence (T 1762). However, I am guided by the minutes and I find on the probabilities that Dr Beaumont saw the entire video.

Dr Beaumont said he considered a comparison of Exhibit A and Exhibit SSS was “chalk and cheese” (T 1769), and that, unlike Exhibit A, Exhibit SSS was “so dull”. Having seen and listened to Exhibit SSS, I do not agree. It seems to me that “glitz, glamour and superlatives” such as were criticised by Dr Beaumont in his interview with Mr O’Brien, are to be found in Exhibit SSS viewed by Dr Beaumont so recently before he gave that interview. I did not find Dr Beaumont’s evidence as to perceived differences in the two videos to be at all convincing, and I regard his evidence about Exhibit SSS as unsatisfactory.

a fantastic medical advance and a wonderful procedure

giving a large number of the Australian public the opportunity to be free of glasses and improve their lifestyle

On a sheet accompanying the above letter Dr Beaumont proposed as an example of an ethical advertisement the following:

“Radio – 30 seconds

The surgery is quick, complications uncommon and there is minimal discomfort

Dr Beaumont suggested at the foot of that sheet:

“Other OK phrases you may want to use:

1) Dramatically reducing your need for spectacles

2) Improves your vision without spectacles”

Dr Beaumont considered the thirty second ad to be “honest and accurate” (T 1999) and the assertions that “the surgery is quick, complications uncommon and there is minimal discomfort” also to be true (T 1200). He agreed that the suggestion in the letter as to the opportunity to be free of glasses conveyed the notion of being able to throw away glasses (T 1203). However, whilst it was his view that a large number could achieve this through Lasik, a view held by him in April 1997 and in May 1998, this was not the same as saying that all could do this, and he said that was the impression Exhibit A created. Whether that is so or not, is a matter to be considered when addressing the imputations and the defences to them.

Dr Beaumont was cross examined on the subject of advertising carried out by the Macquarie Street Laser Centre (see in particular the cross examination at T 1175-1190).

I did not find the evidence given in cross examination on the matters here identified in (5) to sit comfortably with Dr Beaumont’s criticisms of Exhibit A and the advertising undertaken by the first plaintiff.

(6) Exhibit QQQ was a brochure produced by the Macquarie Street Excimer Laser Centre and it was distributed in 1999 (T 1797). That, of course, was some twelve months or more after Dr Beaumont gave his interview, but there were several features of this brochure which warrant mention. There is the assertion in the brochure that “serious sight threatening [complications] are rare”. The brochure contained no mention of blindness and it asserted that the risk of infection is very low. It is asserted as to quality of vision that some patients will experience “a loss of sharpness of vision following treatment”. When it was put to Dr Beaumont that this amounted to the same thing as the expression used by Dr Lawless concerning loss of crispness in Exhibit A, Dr Beaumont disagreed (T 1621). He asserted that in the expression used as to loss of crispness the risk was trivialised. I do not accept the distinction which Dr Beaumont sought to draw between the language of Exhibit QQQ and the language Dr Lawless used in Exhibit A.

“Now the long term effects of the procedure are not known. We do know up to ten years time, which is all the history we have with the use of excimer lasers, that there is no adverse side effects due to their use.”

In cross examination Dr Beaumont said he did not take Georgia as clearly referring to long term side effects (T 1608), but took it that she was saying there were no adverse side effects due to their use (T 1609). It seems to me that that evidence is inconsistent with what Dr Beaumont said in the course of the interview at lines 112-116:

“They spend a disproportionate amount of time on something that’s irrelevant but which is good news for them, such as the long term complications of this are unknown. Well the short term ones aren’t, and they’re not going into those. They spend a lot of time pretending to talk about complications… We don’t know about this long term in ten years. It makes it look as if you are really giving the patient information, it’s a waste of time.”

As I read what Dr Beaumont said in the above passage, he understood that Georgia was plainly referring to long term effects as opposed to short term effects in the passage from lines 59-62. I do not accept that Dr Beaumont took it that Georgia was saying there were no adverse side effects due to the use of Lasik.

Dr Beaumont was cross examined about the case of the American physician (T 1638):

“Q. The physician in America that you refer to there is not the subject of any peer review article, is he?
A. At the time of the video, when I made that statement, I was recalling the fact that I knew a patient had an infection in both eyes when they were done at the same time. Now, when asked in retrospect "Who were you thinking of at that time", I had to think back.

Q. Dr Beaumont, my question was different and it was: you know, don't you, that there is no peer review article that refers to that or to a physician in America who lost vision in both eyes, and so on?
A. There was an article that referred to that which was published in the Archives of Ophthalmology, and I just can't remember if it was a case report or a letter.

Q. Dr Beaumont, there was no reference in the literature at all, ever, may I suggest to you, to a physician in America who lost vision in both eyes because he got an infection. If you say there was --
A. No, I agree that in referring to this I made a mistake saying it was a physician in America, but the point I was making there was that a patient had an infection in both eyes, and my recall at that time was incorrect.

Q. Dr Beaumont, you knew, didn't you, when you gave this interview that the material you gave to Mr O'Brien was going to be used by him in an attack on my clients, didn't you?
A. No, I didn't.

Q. You say now, do you, that you were wrong in asserting that there was a physician in America who lost vision in both eyes, and so on?
A. I was incorrect in saying it was a physician in America.

Q. Could you explain to the court how you came to make a mistake about there being a physician in America who had that happen to him?
A. I had faulty recall at the time I was asked the question. I remembered there being a case. There was a bilateral infection. I didn't recall all the details. The important message I wanted to get over was the fact that infections could occur in both eyes, and I had faulty recall at the time I was doing the interview.

Q. Are you saying that that physician in America in fact was the case referred to by Watanabe in the letters to the editor?
A. Yes, I am.

Q. Dr Beaumont, I want to suggest to you that you made up the reference to the physician in America in an attempt to discredit my clients. What do you say about that?
A. That is not correct.

Q. It is an absolutely extraordinary mistake to make, isn't it, to erroneously suggest that a patient in Japan was in fact a physician in America, isn't it?
A. The important part was --

Q. Please, answer my question.
A. The infection was in both eyes and having made a mistake as to whether it was a Japanese person or an American person was not of substantial importance in relation to what I was saying.

(The reference in the above passage to a patient in Japan was a reference to an eighteen year old person in Japan who, after Lasik surgery, developed infection in both eyes and who suffered temporary loss of vision in them. His case was the subject of an article by Watanabe and others published in the Archives of Ophthalmology in December 1997 – Exhibit 26.)

Later (T 1644), Dr Beaumont was asked this question and gave this answer:

There was further cross examination about the Watanabe article (see in particular T 1729-1742). In the course of that cross examination Dr Beaumont was asked this question and gave this answer (T 1733-1734):

The evidence in this case does not describe the case of any American doctor who temporarily lost sight in both eyes after Lasik surgery and I regard the evidence that Dr Beaumont gave he had confused the patient he described to Mr O’Brien with an eighteen year old Japanese person described in the Archives of Ophthalmology as being most unsatisfactory. Indeed, I do not accept it.

56 It will, of course, be necessary to refer further to the evidence of Dr Beaumont when considering the various imputations and I have not above attempted to record an exhaustive analysis of what I perceive to be worrying features of his lengthy testimony. However, I have decided that where the evidence of Dr Beaumont is not in accord with the evidence of either Dr Rogers or Dr Lawless, I prefer the evidence of the latter two doctors, each of whom I found generally to be a more satisfactory and reliable witness than the first defendant. I have so concluded notwithstanding the extent of the carelessness of Dr Rogers and of Dr Lawless in respect of the misinformation on the number of surgical procedures they have carried out. In making my assessment, I have brought into account, where appropriate, the particular skill of Dr Rogers and of Dr Lawless concerning the Lasik procedure to which Exhibit A relates, and Dr Beaumont’s lack of expertise in that particular area, Dr Beaumont having acknowledged that he has never practised excimer laser refractive surgery.

57 I will now consider the defences to the various imputations.

Justification

58 The interview recorded as Exhibit B enlivens consideration of s 15 of the Defamation Act 1974. So, too, does the television programme on 5 May 1998. The Victorian programme on 4 May 1998 invites consideration of common law principles as to truth. It is to be recognised that in New South Wales, unlike Victoria, it is each imputation which represents the publication on which each plaintiff’s claim is based.

59 There has been a very lively contest as to the issue of truth, and it will be necessary to consider each imputation in turn.

Imputation (a)

60 This imputation is available only to the first plaintiff in the proceedings against the first defendant, arising out of the interview between Dr Beaumont and Mr O’Brien. In the interview, there was, of course, extensive reference to the video “Wake Up and See”. Mr Hughes submitted that the video was misleading in that:

(a) the operation numbers were overstated, and hence the experience of the surgeons was overstated;

(b) due warning as to the risks of eye surgery was not given;

(c) false information was given concerning loss of best corrected visual acuity (BCVA);

61 Whilst fraud is not alleged to be an element of this imputation, what is asserted is essentially a deliberate course of deception for financial gain.

62 There is a considerable degree of overlap as to matters arising under imputations (a), (b) and (h). Inevitably that which is relevant to one of those imputations will be relevant to another. I do not propose to retrace in detail the same grounds when addressing this question of truth for the various imputations that have common ground.

63 The evidence satisfies me that the video “Wake Up and See” was intended by the plaintiffs (inter alia) to inform patients: see, for instance, Dr Rogers (T 299) and Dr Lawless (T 554), but it was only part of the process of information and part of the process relied upon to achieve informed consent, albeit an important part (Dr Rogers T 242, T 370). For the purposes of this interview with Mr O’Brien, Dr Beaumont based what he said on the video itself, although he appreciated there was a consent process employed by the first plaintiff that went beyond simply showing a patient “Wake Up and See: (T 1614). Dr Beaumont, however, was unaware of the details of that process (T 1614), but he had no reason to doubt that it would not include a “one on one” meeting between the patient and the surgeon (T 1633).

64 For the Court to consider whether the truth of imputation (a) has been established, it is appropriate and, indeed, necessary to have regard to the entire consent process for patients. It is to be recognised that this is something Dr Beaumont was unable to do and did not do.

65 I find that the process involved the following:

(i) the patient saw the video;

(ii) there was an interview and assessment by the orthoptist;

(iii) an “Essential Points” form was provided to and explained to the patient (see Exhibit Q)

(iv) the surgeon made his assessment of the patient and explained the procedure;

66 In the interview Exhibit B, Dr Beaumont expressed himself in forcible terms (at lines 180-190) about the inability to obtain informed consent after “this fabulous video”. Dr Beaumont gave evidence (T 1780):

67 And then (T 1781):

68 It will be necessary to return to a consideration of Dr Beaumont’s evidence concerning the impact of the video when the defence of comment is being considered, but it is appropriate that I now have regard to the views of others bearing upon the impact of the video, Exhibit A, on the issue of informed consent.

69 Professor McGhee was critical of the video in a number of respects:

(a) he considered Georgia’s remarks about the long term effects of Lasik (starting at line 59) were wrong, treating what she was saying as covering short term effects. This was a matter he felt “would have to be addressed in the subsequent consent” (T 1422);

(b) Professor McGhee regarded what was said at lines 71-72 as also needing to be addressed in the subsequent consent (T 1423);

(c) Professor McGhee would have couched the warning about loss of quality of vision (at lines 84-87) more strongly, but said: “It depends on what is in the consent afterwards” (T 1427);

(d) Professor McGhee considered the assertion “that has never happened” at line 79 as “perhaps too reassuring”, and he said there was a need for this to be addressed in a consent form (T 1425);

“Q. I want you to assume that the video was seen by a hypothetical patient in, say, late 1997 or early 1998. That before that, after that hypothetical patient saw the video, she had a consultation and eye testing with an orthoptist in terms of what is shown on the video and that she had, again after seeing the video, a consultation with Dr Lawless, as shown on the video. Can you say anything, based on your experience and studying the psychology of the patient consent, as to the likely result of the interaction of those various integers on a hypothetical patient, including in your consideration of that question the forms that the patient signs?
A. It's quite a long question to answer. I think it would depend to a large extent on how much time was spent with the patient with the orthoptist and with the surgeon. If there was little time spent, then the consent process would probably be flawed because the patient would go in with a very positive expectation. I think if the form was addressed fully and time was spent with the patient, because this form does cover most of the risks, then you could probably achieve with some effort the filling in of the form consent.

Q. Why do you say ‘with some effort’?
A. I think it would take time. It's a time issue. If the patient comes in with, certainly with some preconceived view about getting 20/20, you then have to assess the patient as to what their values are in terms of how shortsighted and what their expectations are and you have to address the patient's expectations.

70 Dr Stasiuk opined that it was impossible in an information video to cover every risk and that “the most important time to mention the risks is during the doctor/patient consultation” (T 843).

71 Dr Rogers recognised the video as an important element in the consent process (T 242, T 370), but considered there were more important things that happened (T 242).

72 Dr Lawless instructed the orthoptists as to what they should say to patients, taking them through the “Essential Points” document. Unlike Dr Rogers, Dr Lawless considered the video, Exhibit A, to be only a “small part” of the consent process (T 581).

73 The evidence of Professor McGhee, Dr Stasiuk, Dr Rogers and Dr Lawless leads me to the conclusion that the face to face interview between the patient and the surgeon was of central importance. I cannot and do not accept the evidence of Dr Beaumont reviewed at para 67 above. Dr Rogers gave evidence as to the procedure he adopted with his patients, including discussion of the Essential Points and consent forms (see T 120 and following). I accept as being reliable the evidence that Dr Rogers gave as to the consent process. Dr Lawless gave evidence as to the procedure he adopted at the face to face interview with his patients (see T 450 and following). He also gave evidence as to the instruction he gave to the orthoptists engaged by the first plaintiff as to what they should say to patients when considering the Essential Points document with them (T 444 and following). Again I accept as reliable the evidence that Dr Lawless gave as to these matters. I also accept the evidence that Dr Lawless gave (T 482) that in 1997/98 only about 45% of patients who presented for a consultation with an orthoptist and then with a surgeon ultimately proceeded to have refractive surgery. Having considered the evidence as to the consent process, the language of the forms employed and the evidence of Dr Rogers and of Dr Lawless in point, I do not consider that the truth of imputation (a) has been established.

74 Let me deal specifically with the four matters which Mr Hughes identified:

(a) I dealt earlier with the overstatement of the operation numbers (paras 28-47 above). Careless as that was, I do not find that the overstatement in the video misled patients “about the risks of eye surgery”. Whilst it is to be accepted that a patient might reasonably regard the surgeon’s experience as a factor bearing on the risk of surgery, the evidence satisfies me that the first plaintiff’s surgeons were, as at April/May 1998, highly experienced Lasik surgeons, and, in my opinion, the overstatements of operation numbers had no bearing on the risks of surgery having regard to the actual experience of the plaintiffs (see in particular as to this paras 45-46 above).

Much attention was directed to what appears in Exhibit A at lines 77-87 read in conjunction with the remarks attributed to Georgia at lines 51-55. It was submitted that what was there said understated the risks.

In the rough cut of Wake Up and See (Exhibit 6), Georgia said at lines 501-502:

“There have been two or three cases of reported infections in the world”

and this was cut from Exhibit A. When asked about Georgia’s statement and the source of her knowledge, Dr Lawless was unaware of the source but said that Georgia was wrong (T 766). In response to the following question at T 767, Dr Lawless gave the following answer:

I accept that the above answer reflected the knowledge of Dr Lawless and I accept his evidence at T 697 that what he told Ms O’Connor accorded with his belief at that time. I accept it to have been his belief that the first reported case of infection after Lasik was the Watanabe case (see earlier at p 30) and that “cases of infection started to filter into the literature through 1998” (T 765).

The Watanabe article appears in the Archives of Ophthalmology in December 1997 and concerned a case of corneal infection as a complication of Lasik. The patient was not treated at the Watanabe clinic but appeared there for treatment for the infection. His sight was severely impaired on presentation and the impairment amounted to legal blindness. However, that was not a permanent state of affairs. In assessing this matter, Dr Lawless had regard to the fact that the circumstances in which the Lasik surgery had taken place were not disclosed and also that in Japan, at that time at least, surgery was carried out by other than ophthalmologists.

Dr Lawless was cross examined about an article by Salah which was published in the American Journal of Ophthalmology in 1996 (see Exhibit 33). This article did address excimer laser but did not report a permanent case of significant loss of BCVA (see the evidence of Dr Lawless at T 803-804). One patient referred to there lost two lines at the end of the study but sight may have returned after that time (T 830).

Dr Lawless was also cross examined on an article in the Journal of Refractive Surgery published in September/October 1998. That article was written by Dr Fraenkel, Dr Lawless, Dr Cohen, Dr Sutton and Dr Rogers. Description was given of three cases of opacification identified within one week of Lasik surgery, but in each case resolution of the condition occurred within four weeks of appropriate treatment.

Professor McGhee gave evidence concerning an article by Dr Seiler, published in the August 1991 edition of the Journal of Ophthalmology (Exhibit 43). This was a PRK study and one of the patients was a sixty-two year old person with a pre-existing collagen disease, which, by 1997, was a known contraindication to Lasik (T 1444). She was not a typical patient and a Lasik procedure for her would have been strongly contraindicated in 1997/98 (T 1445). None of the patients reviewed by Seiler ended up gaining or losing more than one line (T 1445).

Professor McGhee was also questioned about a letter by Sampath (Exhibit 44). Again this concerned a patient who underwent a PRK procedure. He was aged seventy-one and Professor McGhee agreed he was not a representative case for present purposes (T 1444).

Finally, there was an article by Friedman in the Archives of Ophthalmology in July 1997 (Exhibit 45). This reported on three patients who underwent ALK, resulting in severe visual loss many months after surgery. Dr Lawless was not cross examined about this article and neither was Dr Rogers. Whilst ALK involved the use of a microkeratome as in the first stage of Lasik, the procedure then in ALK was to make a further deeper cut to reshape the eye (T 1106). Dr Beaumont thought that the procedure was abandoned in 1996 or 1997 (T 1107). I do not find this article by Friedman to be of assistance in the present context.

75 On my assessment of the evidence in this case, what Dr Lawless said to Ms O’Connor at lines 77-82 has not been proved to have involved any assertion that was intended to deceive. The risk of infection and scarring was adverted to and so too was the risk of loss of sight and blindness. Imputation (e) deals specifically with the question of blindness and I will consider the statement “no-one has gone blind” when looking at that imputation.

356 My assessment of the other three matters raised by Dr Beaton as providing a reasonable explanation for a decline in procedures is that they are each unlikely to have done so.

357 The evidence establishes that OPSM ceased to refer patients after the broadcasts (Dr Lawless, T 524). I find this is likely to have been because of the broadcasts, but there is no evidence as to what proportion of the first plaintiff’s business came from OPSM. However, I have concluded that the most likely explanation for the decline in patient numbers following the broadcasts is to be found in the broadcasts themselves.

358 However, I am not satisfied that the lost procedures were as many as Dr Callaghan’s evidence would suggest having regard to the valid criticisms to his approach, which I have shortly endeavoured to record. On the other hand, I do not accept Dr Beaton’s approach either, having regard to what I perceive to be valid criticisms of his approach, to which I have earlier referred.

359 The period in respect of which damages are to be awarded for loss of procedures is a period of a little over twelve months. Having reflected on all the evidence that is available, I have decided that the best guide to the lost procedures for this period is to take the average number of procedures per month for the twelve months prior to the publications and to use that average figure during the post publications period up to 30 June 1999. I will reduce the procedure numbers by ten percent to take account of the adverse impact of the programmes beyond the impact of the defamatory imputations contained in them.

360 The approach that Mr Gower was asked to take in using the average of ten months prior to the publication left out of account the months of May and June 1997. In May 1997 there were 203 procedures compared with 106 procedures in May 1998 but in June 1997 there were only 147 procedures. If one takes only ten months prior to the publications upon which to place an estimate as to lost procedures, this affords an average number of procedures per month of 208 and ignores the relatively poor numbers for June 1997.

361 Dr Beaton suggested that numbers were declining before the broadcasts, but I am not satisfied that this is so. There was some drop in May 1998 after the broadcasts and a significant drop in June after the broadcasts, but when one compares the full financial year ended 30 June 1997 with the full financial year ended 30 June 1998, what one sees is, prior to 5 May 1998, a very significant increase in procedure numbers.

362 It is possible that had the broadcasts not taken place there would have been some decline in procedure numbers. It is also possible had the broadcasts not taken place that the first plaintiff would have continued to increase procedure numbers as it had done in the past. However, what I am satisfied is probable on my assessment of the evidence is that the procedure numbers would not have fallen below the average monthly figures achieved in the period of twelve months up to 30 April 1998, but for the television broadcasts.

363 The total number of procedures carried out in the period from 1 May 1997 to 30 April 1998 was 2411. The average number of procedures carried out per month then was 201, rounding the calculation off. I therefore find on the balance of probabilities that, but for the adverse effects of the television broadcasts, the first plaintiff would have performed, between the date of the broadcasts and 30 June 1998, 2814 procedures. In the same period the first plaintiff performed 1928 procedures. I therefore find that the procedures lost were 886 in number. I attribute ninety percent of those lost procedures to the impact of the defamatory imputations. Accordingly, I find the compensable loss in procedure numbers to be 797 procedures, rounding the calculation off.

364 What was the monetary loss suffered in consequence?

365 Mr Gower determined that the average revenue per procedure in the financial year ended 30 June 1998 was $2113.70, and in the financial year ended 30 June 1999 this had dropped to $1991.18 per procedure (see Exhibit QQ, p 5).

366 Accepting Mr Gower’s figures just mentioned, I calculate the loss of revenue as follows:

367 There were savings of costs which Mr Gower considered had to be brought into account (see Exhibit QQ, p 15).

368 Mr Lom joined issue with Mr Gower as to the calculation of the costs savings on the procedures not carried out. Mr Lom pointed out, at p 13 of his report Exhibit 52, that in Mr Gower’s report there was no explanation as to why the laser costs per procedure went down from $220.29 in the year ended 30 June 1998 to $155.98 in the following financial year; nor did Mr Gower explain why gas costs had been removed from laser costs. This prompted Mr Lom to recalculate the laser costs per procedure and he arrived at a figure for savings in laser costs of $204.49 per procedure. Mr Lom also calculated an average labour cost saving per procedure at $143.43.

369 As I understand it, Mr Lom’s figures set out on p 13 of Exhibit 52 were ultimately accepted by the plaintiffs, and in any event I accept them for the purposes of calculating the costs savings here to be brought into account.

Cost savings:

(a) Laser cost savings at $204.49 on 797 procedures = $162,978.53

370 Hence I arrive at total costs savings of $277,292.24.

371 It follows that the lost nett profit before tax is $1,319,724.86.

372 In his report of 29 September 2003 (Exhibit QQ), Mr Gower, in quantifying the first plaintiff’s loss, determined its lost nett profit before tax, and then made a deduction of thirty-six percent for income tax. Then, after calculating interest, he added “A gross up for income tax which will be payable by SRSC on the receipt of an award of damages.”

373 Whether the first plaintiff’s award will attract a taxation liability has been a matter of strenuous contention.

374 It is well settled that in an action for tort where a person is claiming damages in respect of impairment of earning capacity following injury, any allowance in respect of such a claim is made by reference to nett loss. The court does not include in the assessment the income tax that person would have had to pay on lost earnings because he does not have to pay income tax on that assessment: see, generally, Cullen v Trappell (1980-81) 146 CLR 1 in which, by majority, the High Court followed the decision of the House of Lords in British Transport Commission v Gourley (1956) AC 185. The damages are awarded for loss of earning capacity, even though they may be measured for the past by reference to comparable earnings of others and even though there may be agreement between the parties as to wage loss for the past. In O’Brien v McKean (1968-69) 118 CLR 540 Windeyer J said at 557:

“…. the true ground of damages for what is called economic loss is the destruction or impairment of earning capacity…”

375 Then, in Tinkler v Commissioner of Taxation (1979-80) 29 ALR 663, Brennan J said at 667:

Paff v Speed

Bresatz v Przibilla

Arthur Robinson (Grafton) Pty Ltd v Carter

Graham v Baker

376 In Rubber Improvement Limited & Anor v Daily Telegraph Limited (1964) AC 234, it was determined that the principle in Gourley applied to a company that established its profits had been diminished by defamation. Lord Reid said at 262:

Gourley’s

But damages for libel have to be assessed by a jury, and juries are not expected to make mathematical calculations, so they can only deal with this matter on broad lines. I think that a jury ought to be directed to the effect that if they think that the plaintiff company has proved that it has suffered or will suffer loss of profits as a result of the libel they must bear in mind that the company would have had to pay income tax at the standard rate out of that profit if it had been earned and would only have been entitled to keep the balance. So in assessing damages they ought not to take into account the whole of that profit, but should make allowance for the obligation to pay income tax out of it.”

377 In McGregor on Damages, 17th ed., the following commentary appears by reference to the above decision (at 503-504):

Lewis

Gourley

Gourley’s

378 It has been submitted by the defendants that any award of damages to SRSC is not truly to be regarded as relating to income. When determining whether or not compensation is income the relevant issue is the nature of the receipt in the hands of the recipient. Mr Smark referred to the joint judgment of Deane and Fisher JJ in Tinkler (supra) where their Honours said at 672:

“There is a clear distinction between the character of a payment and the manner of its calculation or quantification… The method of calculation or quantification may provide a quite misleading guide to the character of the payment.”

379 Here it is submitted that whilst the approach to the assessment of damages has been to determine what losses were incurred, nevertheless the damages are awarded for the purposes identified by Lord Reid in the passage from Rubber Improvement Limited to which I made reference above.

380 Counsel have not referred to any authority in this country which is directly in point on the question as to whether in awarding damages to SRSC I should include an allowance for income tax. Mr Smark submitted that the damages awarded to SRSC ought not to be treated as “ordinary income” for the purpose of s 6-5 of the Income Tax Assessment Act, 1997. With that submission I agree.

381 Mr Smark has submitted further that there is no statutory provision which would have the effect of making the award “statutory income” for the purposes of s 6-10 of that statute.

382 In response, it has been submitted on behalf of the plaintiff company that the payment of damages is to be treated not as ordinary income but as falling within the category of “capital gains” and that as a result any award of damages to SRSC will attract a liability to pay income tax. Reference is made to s 102-5 of the 1997 Act.

383 Under s 118-37 of the 1997 Act a capital gain is disregarded if relating directly to:

“(a) compensation or damages you receive for any wrong or injury you suffer in your occupation;

(b) compensation or damages you receive for any wrong, injury or illness you or your relative suffers personally.”

384 It has been pointed out that in a taxation ruling, TR 95/35, the Commissioner has stated that the exemption from capital gains tax for personal injuries is intended to be read as widely as possible and, in relation to the predecessor to s 118-37, that the exemption should apply to compensation for defamation. However, the same ruling excluded corporations from the exemption. Paragraph 216 of taxation ruling 95/35 which related to s 160ZB of the Income Tax Assessment Act 1936 states that:

“Compensation for any wrong or injury suffered by a company does not fall within the scope of the exemption.”

385 Section 160ZB(1) of the Income Tax Assessment Act 1936 provides:

“A capital gain shall not be taken to have accrued to a tax payer by reason of the tax payer having obtained a sum by way of compensation or damages for any wrong or injury suffered by the tax payer to his or her person or in his or her professional vocation and no such wrong or injury or proceeding instituted or other act done or transaction entered into by the tax payer in respect of such a wrong or injury shall be taken to have resulted in the tax payer having incurred a capital loss.”

386 Apparently the reason for the ruling of the Commissioner referable to the above subsection is that the subsection refers to “his or her” person and “his or her profession or vocation”, and hence the provision has been interpreted as a provision intended only for natural persons.

387 Addressing the contention that an award of damages will attract capital gains tax, Mr Smark drew attention to s 4-5 of the 1997 Act:

you

388 It seems to me that there is considerable merit in that submission, and that for this and other reasons developed by Mr Smark the first plaintiff would have substantial arguments to put to the Commissioner of Taxation as to why the first plaintiff should not be required to pay capital gains tax in relation to damages awarded. Should those arguments prevail, for the Court now to make any provision for taxation would result in an injustice to the defendant and, whilst I am unable presently to calculate the precise amount that would be involved, it would not be inconsiderable. On the other hand, to proceed on the basis that any award will not attract capital gains tax would result in an injustice to the plaintiff if ultimately it is required to pay such tax. It is not possible for this Court now to resolve the tax issues that arise, including the quantification of any liability, and I presently make no provision for income tax in assessing damages. If, however, ultimately the first plaintiff is found to be liable to pay capital gains tax on the damages to be awarded, I would consider this to be a recoverable head of damages as against the defendants.

389 In the circumstances, whilst recognising that it is generally desirable that there be no fragmentation of the process of assessing damages, it seems to me here that justice can best be done if I reserve leave to the first plaintiff to apply for additional damages referable to capital gains tax should the first plaintiff be found liable to pay such tax. I note that the defendants consent to this course, and, indeed, invite me to adopt it in the event that I entertain concern that capital gains tax may be attracted. I also note that the course I am about to take in reserving leave to apply is a course taken by Hodgson J in Rabelias Pty Limited v Cameron 95 ATC 4552 at 4553.

390 For the present I make no provision for capital gains tax. I reduce the lost nett profit which I earlier arrived at by thirty-six percent to take account of the tax that would have been payable on that profit. Accordingly, the sum to be awarded to the first plaintiff, omitting cents and rounding the calculation off, is $844,624.

391 Mr McClintock submitted that I should award exemplary damages in respect of the claim of the first plaintiff concerning the Victorian programme. He relied substantially upon the same matters as were advanced in support of the claim for exemplary damages for the second plaintiff. I am not persuaded that exemplary damages should be awarded to the first plaintiff, and I refer to what I have already written in paras 280-284.

392 The first plaintiff did not conduct business in Victoria but only in New South Wales where, presumably, most of its patients resided. There is evidence in the case which establishes that both Dr Rogers and Dr Lawless were well known in Victoria and Dr Stasiuk gave evidence as to the discussion in the medical community in Victoria concerning the Victorian programme. However, whilst I am satisfied that the first plaintiff suffered harm as a consequence of the Victorian programme, I consider it likely that the greater portion of the harm suffered by the first plaintiff was in consequence of the later New South Wales programme.

393 The first plaintiff was defamed by the first defendant in the April 1998 interview. The publication was, of course, a limited one, and I propose to award only very modest damages in respect of the claim based on the interview. Those damages I assess in the sum of $4000.

394 The evidence permits of no precision in apportionment in respect of the two television programmes. Strictly speaking, it is not a question of apportionment at all, but of determining what damages are appropriate in respect of each publication having regard to the harm caused by the publication in question. I must, of course, be mindful of the number of procedures lost because of the television programmes. I find the later programme in New South Wales to be likely to have occasioned the first plaintiff far greater harm than the Victorian programme. Doing the best I can, I propose to award damages in respect of the Victorian publication in the sum of $75,000 and in respect of the New South Wales publication in the sum of $765,624.

395 I find the first defendant responsible for the republication by the second defendant and for the republication by the third defendant of imputations (b), (d), (e), (f) and (g). I refer in this context to para 291 above. However that responsibility of the first defendant as a joint tortfeasor does not extend to imputation (h), an imputation which was not found to arise from the interview. This limit upon the first defendant’s liability as a joint tortfeasor must be reflected in my assessment of damages and in the orders of the Court. I assess damages referable to imputations (b), (d), (e), (f) and (g) in the sum of $62,500 in relation to the publication on 4 May 1998 and in the sum of $638,020 in respect of the publication on 5 May 1998, being five-sixths of the total sums assessed in para 394.

Formal orders

396 1. In the proceedings by the second plaintiff arising from the publication in April 1998, verdict for the second plaintiff against the first defendant in the sum of $10,000, together with interest in a sum to be determined.

2. In the proceedings by the second plaintiff arising from the publication on 4 May 1998, verdict for the second plaintiff against the first and the second defendants in the sum of $70,000, together with interest in a sum to be determined.

3. In the proceedings by the second plaintiff arising from the publication on 5 May 1998, verdict for the second plaintiff against the first and the third defendants in the sum of $120,000, together with interest in a sum to be determined.

4. In the proceedings by the first plaintiff arising from the publication in April 1998, verdict for the first plaintiff against the first defendant in the sum of $4000, together with interest in a sum to be determined.

(a) verdict for the first plaintiff against the first and the second defendants concerning imputations (b), (d), (e), (f) and (g) in the sum of $62,500, together with interest in a sum to be determined;

(b) verdict for the first plaintiff against the second defendant concerning imputation (h) in the sum of $12,500, together with interest in a sum to be determined.

(a) verdict for the first plaintiff against the first and the third defendants concerning imputations (b), (d), (e), (f) and (g) in the sum of $638,020, together with interest in a sum to be determined;

(b) verdict for the first plaintiff against the third defendant concerning imputation (h) in the sum of $127,604, together with interest in a sum to be determined.

7. In respect of the claim by the first plaintiff against the first and second defendants, and in respect of the claim by the first plaintiff against the first and third defendants, I reserve leave to the first plaintiff to apply for additional damages referable to capital gains tax considerations should the first plaintiff be found liable to pay such tax.

8. Costs are reserved.

**********

Last Modified: 03/19/2004

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Citations

SRSC v Beaumont [2004] NSWSC 164

Most Recent Citation

Sydney Refractive Surgery Centre Pty Ltd v Commissioner of Taxation [2008] FCA 454

Cases Citing This Decision

5

Carazi Pty Ltd v Blow Dry Bar Franchising Pty Limited (in liq) (No. 2) [2015] NSWSC 108

Mason v Doyle [2005] NSWSC 127

Commissioner of Taxation v Sydney Refractive Surgery Centre Pty Limited [2008] FCAFC 190

Cases Cited

23

Statutory Material Cited

3

Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64

Clay v Clay [2001] HCA 9

Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64

CITATION:	SRSC & Anor v Beaumont & Ors [2004] NSWSC 164
HEARING DATE(S):	September 15, 16, 17, 22, 23, 24, 25, 26, 29, 30, October 1, 7, November 3, 4, 5, 10, 11, 12, 13, 14, 17, 19, 20, 21, 24, 25, 26, 27, 28, December 1, 2003.
JUDGMENT DATE:	18 March 2004
JURISDICTION:	Common Law Division Defamation List
JUDGMENT OF:	Studdert J
DECISION:	(1) In the proceedings by the second plaintiff arising from the publication in April 1998, verdict for the second plaintiff against the first defendant in the sum of $10,000, together with interest in a sum to be determined. (2) In the proceedings by the second plaintiff arising from the publication on 4 May 1998, verdict for the second plaintiff against the first and the second defendants in the sum of $70,000, together with interest in a sum to be determined. (3) In the proceedings by the second plaintiff arising from the publication on 5 May 1998, verdict for the second plaintiff against the first and the third defendants in the sum of $120,000, together with interest in a sum to be determined. (4) In the proceedings by the first plaintiff arising from the publication in April 1998, verdict for the first plaintiff against the first defendant in the sum of $4000, together with interest in a sum to be determined. (5) In the proceedings by the first plaintiff arising from the publication on 4 May 1998: (a) verdict for the first plaintiff against the first and second defendants concerning imputations (b), (d), (e), (f) and (g) in the sum of $62,500, together with interest in a sum to be determined; (b) verdict for the first plaintiff against the second defendant concerning imputation (h) in the sum of $12,500, together with interest in a sum to be determined. (6) In the proceedings by the first plaintiff arising from the publication on 5 May 1998: verdict for the first plaintiff against the first and the third defendants concerning imputations (b), (d), (e), (f) and (g) in the sum of $638,020, together with interest in a sum to be determined; (b) verdict for the first plaintiff against the third defendant concerning imputation (h) in the sum of $127,604, together with interest in a sum to be determined. (7) In respect of the claim by the first plaintiff against the first and second defendants, and in respect of the claim by the first plaintiff against the first and the third defendants, I reserve leave to the first plaintiff to apply for additional damages referable to capital gains tax considerations should the first plaintiff be found liable to pay such tax. (8) Costs are reserved. (9) The matter is to be relisted by arrangement with my associate for argument as to interest and costs.
CATCHWORDS:	DEFAMATION - Claims arising from interview and two subsequent television programmes - one in Victoria and one in New South Wales - Imputations found by jury - defences of truth and of comment raised to all three publications. Claims for damages by specialist opthalmologist - claims on imputations arising from interview and two later television programmes - assessment of damages - whether assessment should include aggravated damages - whether in case of Victorian programme exemplary damages should be awarded. Claims for damages by body corporate - claims on imputations arising from interview and two later television programmes. Assessment of damages - whether assessment should include aggravated damages - whether in case of Victorian programme exemplary damages should be awarded - whether assessment should make provision for capital gains tax - leave to apply for such provision reserved.
LEGISLATION CITED:	Defamation Act, ss 7A, 15, 16, 30, 31, 32, 34, 46, 46A, 47, 48 Income Tax Assessment Act 1997, ss 4-5, 6-5, 102-5, 118-37 Income Tax Assessment Act 1936, s 160ZB
CASES CITED:	Bickel v John Fairfax & Sons Limited (1981) 2 NSWLR 474 Breen v Williams ((1995-96) 186 CLR 71 Briginshaw v Briginshaw (1938) 60 CLR 336 British Transport Commission v Gourley (1956) AC 185 Bulfin v Bebarfald's Limited (1938) 38 SR 423 Carson v John Fairfax Limited (1992-1993) 178CLR 44 Catt v Marac Australia Limited (1987) 9 NSWLR 639 Coyne v Citizen Finance Limited (1990-91) 172 CLR 211 Cullen v Trappell (1980-81) 164 CLR 1 Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 Hunt v Star Newspapers (1908) 2 KB 309 Jackson v TCN Channel 9 [2002] NSWSC 1229 Jones v TCN Channel 9 (1992) 26 NSWLR 732 Joynt v Cycle Trade Co. (1904) 2 KB 292 Lamb v Cotogno (1987) 164 CLR 1 McGregor on Damages, 17th ed. @ 503-504 Merivale v Carson (1888) 20 QBD 275 O'Brien v McKean (1968-69) 118 CLR 540 Perkins v NSW Land Council (1998) 45 NSWLR 340 Pfeiffer v Rogerson (2000) 203 CLR 503 Rabelias Pty Limited v Cameron 95 ATC 4552 Refjek v McElroy (1965) 112 CLR 517 Rogers v Nationwide News Pty Limited (2003) 201 ALR 784 Rogers v Whitaker (1991) 23 NSWLR 600; (1992) 175 CLR 479 Rubber Improement Limited & Anor v Daily Telegraph Limited (1964) AC 234 Steele v Mirror Newspapers (1974) 2 NSWLR 348 Steiner-Wilson & Webster Pty Limited v Amalgamated Television Services Pty Limited (unreported, Crispin J, ACT SC, 18 November 1999) Tinkler v Commissioner of Taxation (1979-80) 29 ALR 663 Triggett v Pheeney (1951) 82 CLR 497 UDC v Brian (1985) 157 CLR 1
PARTIES :	Sydney Refractive Eye Surgery Centre Pty Limited (1st Plaintiff) Dr Michael Lawless (2nd Plaintiff) Dr Paul Beaumont (1st Defendant) HSV Channel Seven Pty Limited (2nd Defendant) Amalgamated Television Services Pty Limited (3rd Defendant)
FILE NUMBER(S):	SC 20298/98
COUNSEL:	B.R. McClintock SC/M.F. Richardson (Plaintiffs) T.E.F. Hughes QC/K.P. Smark (Defendants)
SOLICITORS:	Gilbert & Tobin (Plaintiffs) Mallesons Stephen Jaques (Defendants)