Tuch v South Eastern Sydney and Illawarra Area Health Service - [2009] NSWSC 1207

CITATION: Tuch v South Eastern Sydney and Illawarra Area Health Service [2009] NSWSC 1207
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 27 April 2009, 28 April 2009, 29 April 2009

JUDGMENT DATE :
12 November 2009

JUDGMENT OF: Johnson J at 1

DECISION: 1. It is declared that in making the report and recommendations made on 20 October 2008 (“the Review Committee Report”) by the Diabetes Transplant Unit Review Committee appointed by the Defendant pursuant to ss.24 and 29B Health Services Act 1997 (“the Review Committee”), the Review Committee of the Defendant denied the Plaintiff procedural fairness.
2. An order is made in the nature of certiorari quashing the Review Committee Report.
3. It is declared that the decision of Mr Terry Clout, the Chief Executive of the Defendant on 21 November 2008 to accept the Review Committee Report and to implement its recommendations (“the Acceptance Decision”) denied the Plaintiff procedural fairness.
4. An order is made in the nature of certiorari quashing the Acceptance Decision.
5. It is declared that, in notifying in November and December 2008 the University of New South Wales and the New South Wales Medical Board of the Review Committee Report and the Acceptance Decision, the Defendant denied the Plaintiff procedural fairness.
6. The Defendant is to pay 80% of the Plaintiff’s costs of the proceedings.
7. The order for costs may be vacated on application in the event that either party seeks a different costs order.

CATCHWORDS: ADMINISTRATIVE LAW - claim for certiorari and declaratory relief - clinical trial of transplantation of encapsulated human islets into people with diabetes - plaintiff in charge of clinical trial - clinical trial suspended - chief executive of Area Health Service establishes Review Committee under ss.24 and 29B Health Services Act 1997 - Review Committee to review suspension of clinical trial and to report and make recommendations - Review Committee report makes serious criticisms of plaintiff - chief executive accepts report and implements recommendations - report provided to third parties - application to quash report and decision of chief executive to accept report and to provide it to third parties - claim of denial of procedural fairness - apprehended bias - claim that persons were acting as both accusers and decision makers - prejudgment - claim upheld in part - whether certiorari available to quash report and acceptance decision - relief in nature of certiorari and declaratory relief granted

LEGISLATION CITED: Supreme Court Act 1970
Health Services Act 1997
Health Care Complaints Act 1993
Medical Practice 1992

CATEGORY: Principal judgment

CASES CITED: Roos v Director of Public Prosecutions (NSW) (1994) 34 NSWLR 254
Stollery v Greyhound Racing Control Board (1972) 128 CLR 509
Rendell v Release On Licence Board (1987) 10 NSWLR 499
Re Macquarie University; Ex parte Ong (1989) 17 NSWLR 113
Webb v The Queen (1994) 181 CLR 41
Johnson v Johnson (2000) 201 CLR 488
Ebner v Official Trustee (2000) 205 CLR 337
Re JRL; Ex parte CJL (1986) 161 CLR 342
Hall v New South Wales Trotting Club Limited (1977) 1 NSWLR 378
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1
Musumeci v Attorney General of NSW (2003) 57 NSWLR 193
Commissioner of Corrective Services v Government & Related Employees Appeal Tribunal [2004] NSWCA 291
Greyhound Racing NSW v Cessnock & District Agricultural Association [2006] NSWCA 333
White v Ryde Municipal Council [1977] 2 NSWLR 909
McGovern v Ku-Ring-Gai Council [2008] NSWCA 209; 251 ALR 558
Balmain Association Inc v Planning Administrator for the Leichhardt Council (1991) 25 NSWLR 615
Kioa v West (1985) 159 CLR 550
Carver v Law Society of NSW (1998) 43 NSWLR 71
Hedges v Australasian Conference Association Limited [2003] NSWSC 1107
Graham v Baptist Union of New South Wales [2006] NSWSC 818
Roylance v General Medical Council (No. 2) [2000] 1 AC 311
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70
R v Lusink; Ex parte Shaw (1980) 2 ALR 47
Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88
Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24
Minister for Immigration and Multicultural Affairs v Yusuf [2001] 206 CLR 323
Saville v Health Care Complaints Commission [2006] NSWCA 298
State of South Australia v O’Shea [1987] 163 CLR 378
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Johns v Australian Securities Commission (1993) 178 CLR 408
Consolidated Press Holdings Limited v Federal Commissioner of Taxation (1995) 57 FCR 348
R v Collins; Ex parte ACTU Solo Enterprises Pty Limited (1976) 8 ALR 691
Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125
Hot Holdings Pty Limited v Creasy (1996) 185 CLR 149
Police Integrity Commission v Shaw (2006) 66 NSWLR 446
Cox v Corruption and Crime Commission [2008] WASC 199
Calvin v Carr [1979] 1 NSWLR 1

PARTIES: Bernard Edward Tuch (Plaintiff)
South Eastern Sydney and Illawarra Area Health Service (Defendant)

FILE NUMBER(S): SC 30009/09

COUNSEL: Mr J Simpkins SC; Ms M Allars (Plaintiff)
Ms NL Sharp (Defendant)

SOLICITORS: Harris Freidman Hyde Page (Plaintiff)
Bartier Perry (Defendant)

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

Johnson J

12 November 2009

30009/09 Tuch v South Eastern Sydney and Illawarra Area Health Service
JUDGMENT

1 JOHNSON J: By Summons filed on 15 February 2009, the Plaintiff, Bernard Edward Tuch, seeks declaratory and prerogative relief under ss.69 and 75 Supreme Court Act 1970. The proceedings were brought initially against the First Defendant, South Eastern Sydney and Illawarra Area Health Service, and the Second Defendant, University of New South Wales. Thereafter, the Plaintiff discontinued his claim for relief against the Second Defendant. As there is a single Defendant remaining in the proceedings, I will refer to the First Defendant as the “Defendant”.

2 At the outset, it is important to observe what is, and what is not, determined in these proceedings. The issues raised in this case concern administrative processes undertaken with respect to the Plaintiff in 2008, and determination of his complaint that these processes did not comply with the requirements of the law. These proceedings do not address the medical and scientific merits of the Plaintiff’s research concerning the treatment of diabetes, nor the efficacy of that research.

Nature of Proceedings

3 The Plaintiff seeks relief with respect to:

(a) a report containing findings and recommendations made on 20 October 2008 by the Diabetes Transplant Unit Review Committee (“the Review Committee”) established by the Defendant;

(b) a decision made on 21 November 2008 by Mr Terry Clout, the Chief Executive of the Defendant, to accept the Review Committee report and to implement its recommendations;

4 The Review Committee comprised Professor Terry Campbell as Chair, with Ms Marie Malica and Ms Carmel Edwards as members. The Review Committee was authorised to make a report by Mr Clout.

5 The Plaintiff presses his claim for the following relief (paragraphs 1-4 of the Summons):

(a) an order in the nature of certiorari quashing the report of the Review Committee;

(b) a declaration that the Review Committee denied the Plaintiff procedural fairness;

(c) an order in the nature of certiorari quashing the decision of Mr Clout to accept the Review Committee report and to implement its recommendations;

6 As will be seen, the Plaintiff has mounted an elaborate and multi-faceted challenge to the processes which affected him in 2008. The grounds of review in relation to the report of the Review Committee is that the Review Committee:

(i) an appearance of bias; and

(i) determining issues and making findings beyond its terms of reference;

(ii) failing to take into account relevant considerations; and

7 The grounds of review in relation to the decision by Mr Clout accepting the Review Committee report are that the Defendant:

(i) an appearance of bias; and

8 The ground of review in relation to the notification of the Review Committee report and Mr Clout’s decision to the University of New South Wales and the New South Wales Medical Board is that the Defendant denied the Plaintiff procedural fairness, by reason of failure to afford a fair hearing.

Evidence Adduced at the Hearing in this Court

9 At the hearing in this Court, the Plaintiff was represented by Mr Simpkins SC and Ms Allars of counsel. The Defendant was represented by Ms Sharp of counsel.

10 Affidavits of the Plaintiff sworn on 12 February 2009, 11 March 2009 and 13 March 2009 were read in the Plaintiff’s case. In addition, three volumes of documents were tendered as an agreed tender bundle (Exhibit A). A number of other documents were admitted into evidence. The Plaintiff was required for cross-examination and his evidence constituted the only oral evidence adduced at the hearing.

11 The Defendant did not file any affidavit nor adduce oral evidence at the hearing.

12 As will be seen, a large number of emails are amongst the tendered documents, all admitted without objection. The Plaintiff placed substantial reliance upon statements made in emails which passed between members of the Review Committee and others. An examination of the email communications and other documents, and submissions made by reference to them, will be undertaken to determine the Plaintiff’s claim for relief.

13 Of course, the Plaintiff bears the onus of proving, on the balance of probabilities, facts grounding an entitlement to relief in the nature of prerogative relief or declaratory relief: Roos v Director of Public Prosecutions (NSW) (1994) 34 NSWLR 254 at 259.

Relevant Statutory Provisions

14 The Defendant is constituted as a body corporate by s.17 Health Services Act 1997 (“HS Act”), when read together with Schedule 1 to that Act. The functions of the Defendant are set out in s.10 HS Act, which relevantly provides:

“10 Functions of area health services

The functions of an area health service are as follows:

(a) generally to promote, protect and maintain the health of the residents of its area,

(b) to conduct and manage public hospitals, health institutions, health services and health support services under its control,

…

(d) to achieve and maintain adequate standards of patient care and services,

(e) to ensure the efficient and economic operation of its health services and health support services and use of its resources,

(f) generally to consult and co-operate (as it considers appropriate) with any one or more of the following:

(i) the Health Care Complaints Commission constituted under the Health Care Complaints Act 1993,

…

(i) to establish and maintain an appropriate balance in the provision and use of resources for health protection, health promotion, health education and treatment services,

…

(m) to undertake research and development relevant to the provision of health services,

…

(o) to carry out such other functions as are conferred or imposed on it by or under this or any other Act or as may be prescribed by the regulations.”

15 Provision is made for the control and management of area health services, including the Defendant, in Part 2 (ss.22-29B) HS Act. Section 23(1) provides that a chief executive is to be appointed to each area health service. At all relevant times, Mr Clout was the Chief Executive of the Defendant. Section 24 HS Act states:

“24

Chief executive to manage and control affairs of area health service

(1) The affairs of an area health service are to be managed and controlled by the chief executive of the service.

(2) Any act, matter or thing done in the name of, or on behalf of, an area health service by its chief executive is taken to have been done by the service.”

16 Section 29B provides:

“29B Other committees and councils

The chief executive may establish such committees and councils as he or she considers appropriate to assist the area health service in the exercise of its functions.”

17 It was common ground in these proceedings that the Review Committee was established by Mr Clout under s.29B and was authorised to report to him in exercise of his general powers of administration under s.24 HS Act. Likewise, the parties accepted that the decision by Mr Clout to accept the Review Committee report, and to implement some or all of its recommendations, was a decision made in exercise of the power under s.24 of the Act.

18 Reference should also be made to s.117A HS Act:

“117A

Duty of chief executive to report certain conduct

(1) The chief executive of a public health organisation is to report to a registration authority any conduct of a member of staff that the chief executive suspects on reasonable grounds may constitute professional misconduct or unsatisfactory professional conduct under the health registration Act by which the registration authority is constituted.

(2) In this section, health registration Act and registration authority have the same meanings as in the Health Care Complaints Act 1993.”

19 The Health Care Complaints Act 1993 (“HCC Act”) defines the terms “health registration Act” and “registration authority”. Section 4 HCC Act provides that a “health registration Act” includes the Medical Practice Act 1992. Section 4 defines a “registration authority” to mean “the person who has the function, under a health registration Act, of determining an application for registration under the Act”.

20 The New South Wales Medical Board is constituted under s.129 Medical Practice Act 1992. The functions of the Board are set out in s.132 of that Act. Section 22 and Schedule 1 to the Medical Practice Act 1992 make provision with respect to registration under that Act. The terms “unsatisfactory professional conduct” and “professional misconduct” are defined respectively in ss.36 and 37 Medical Practice Act 1992.

21 It was submitted for the Defendant that notification of the Review Committee report and Mr Clout’s decision to the New South Wales Medical Board were made for the purposes of s.117A(1) HS Act. It is not contended that the notification of the report and decision to the University of New South Wales was made under this provision. I will return to these issues later in the judgment.

Factual Matters

22 There were limited areas of factual dispute in this case. In reality, the course of events revealed by the documents is reasonably clear. The question to be determined is whether the Plaintiff has established his claim for relief by application of relevant legal principles to the factual circumstances of the case.

23 This part of the judgment refers to events, in chronological order, with extracts from emails and other documents being set out where necessary. From time to time, brief reference will be made to submissions of the parties so as to place particular documents into context. Detailed submissions were made by reference to the documents. Submissions of the parties are set out later in the judgment, together with my conclusions with respect to the various grounds for relief pressed by the Plaintiff.

24 The following recital may be taken as findings of fact by the Court, unless it is otherwise indicated.

25 The Plaintiff is a medical practitioner who has practised since the early 1990s as a specialist endocrinologist. He was employed by the Defendant, since 1994, as a Senior Staff Specialist in Endocrinology.

26 At all relevant times, the Plaintiff was the Director of the Diabetes Transplant Unit (“DTU”) which operates out of the Prince of Wales Hospital (“PoW Hospital”) in Randwick, Sydney. The Defendant has responsibility for administering the PoW Hospital, which is part of the Defendant’s NHN.

27 In 2006, following approval on 23 November 2005 by the Human Research Ethics Committee (“HREC”) of the NHN, the DTU commenced a stage 1 human clinical trial known as “Protocol 05/151 Transplantation of Encapsulated Human Islets Into People with Diabetes” (“Clinical Trial”). The Plaintiff was the Investigator for the purpose of the Clinical Trial.

28 The Clinical Trial involved persons with Type 1 (insulin dependent) diabetes. These persons require regular insulin injections to normalise their blood glucose levels. A potential treatment for Type 1 diabetes is the transplantation of insulin-producing cells, known as islets. The aim of such treatment is to avoid the need for regular injections of insulin to improve quality of life, even if it is not a cure for diabetes (affidavit, BE Tuch, 12 February 2009, paragraphs 7-8).

29 In October 2007, Professor Robyn Ward commenced as the Director of Research at the NHN. In March 2008, a new organisational structure was approved for the support of research activities in the NHN. The Research Support Office (“RSO”) was headed by Professor Ward.

30 On 26 March 2008, the Plaintiff attended a meeting with Professor Campbell to discuss issues arising as between the Plaintiff and Associate Professor Kuldip Sidhu, a member of staff of the DTU.

31 On 26 March 2008, Professor Ward emailed Mr Bernard to advise that an external review in November 2007 had raised patient safety concerns about the Clinical Trial. She strongly recommended that the Clinical Trial be suspended, and that the matter be referred to NHN HREC for further consideration (Exhibit A, page 49).

32 On 27 March 2008, Mr Bernard wrote to the Plaintiff noting that an external review had found that the DTU was “inadequate in design to produce sterile human therapeutics for clinical trial and there was insufficient quality oversight to justify the release of [encapsulated islet cells]”. Mr Bernard’s letter to the Plaintiff utilised a draft provided to him by Professor Ward. As the delegate of the Chief Executive (Mr Clout), Mr Bernard suspended the Clinical Trial and advised the Plaintiff that he had asked the NHN HREC to review the matter and advise on the way forward.

33 Around 31 March 2008, the RSO commenced initial investigations into the paperwork held by the HREC and others in relation to the Clinical Trial.

34 On 4 April 2008, the Plaintiff wrote to Mr Bernard requesting that he reconsider the decision to suspend the Clinical Trial.

35 In an email from Professor Ward to Mr Bernard dated 10 April 2008 concerning a proposed visit by a Member of Parliament to the DTU, Professor Ward stated (Exhibit A, page 70) (emphasis added):

“Whether the member meets with us separately or not

I think someone will need to be with Bernie

[the Plaintiff]

at all times. I don’t think we should leave Bernie alone with the member for even a moment

. My suggestions would be that the visit is accompanied by you, me or Jim Mackie.”

36 On 21 April 2008, the Executive of the NHN HREC met and discussed the suspension of the Clinical Trial, and concluded that the matter ought to be considered by the PoW Hospital Executive, which in turn decided to establish a small ad hoc committee of review. As General Manager of the NHN, Mr Bernard was responsible for establishing the Review Committee, determining its membership and its terms of reference.

37 On 28 April 2008, Professor Ward sent an email to Mr Bernard in the following terms (Exhibit A, page 82) (emphasis added):

“I discussed this email with Carmel [Edwards] today and asked her for a verbal update on progress. As flagged with you the ethics executive committee have reviewed the paperwork (or what there is of it!!) and have indicated that the first issue which needs to be addressed is one of governance related to the manufacture of the ‘goods or device’. They have suggested that you need to convene a small subcommittee of experts to firstly get advice on the manufacturing issues (both past and present). This committee will need lots of information from BT and will probably need to inspect the facility. After this has been completed it will then go to the ethics committee to handle the rest of the issues.

Unfortunately this issue like most things related to BT is going to require time-consuming input from unpaid experts - I doubt that they would view the ‘urgency’ from the same perspective as BT .

Let me know how I can help but Carmel will endeavour to get the official letter to you very shortly (sorry the office is as you know seriously understaffed and Carmel is only here 2 days per week).”

38 On 5 May 2008, Mr Bernard sent an email to Mr Clout, copied to Professor Ward, concerning a meeting he had with the Plaintiff that morning, in which he had raised the issue of applying for a Commonwealth grant in partnership with Monash University for stem cell research. Mr Bernard stated that he had sought advice from Professor Ward, and that a letter had been sent to the Plaintiff since the meeting. Mr Bernard continued as follows in his email (Exhibit A, page 102) (emphasis added):

“In making application for this grant, he requires signature of support from the appropriate Executive, which I have advised Bernie is yourself. I have advised him that we would probably be seeking advice from Prof Ward in her role as Director of Research in determining whether this support would be given. Bernie was generally not pleased. The completed submission is due to the Commonwealth by Wednesday COB and he sees this process as unnecessarily obstructive.

You are generally aware of the difficulties with managing Prof Tuch, and he is particularly concerned that the Area HS and I as Network GM are placing too much reliance on advice from Professor Ward, and that this advice may not be balanced and objective

.”

39 On 5 May 2008, Ms Edwards wrote to Mr Bernard on behalf of the NHN HREC Executive to advise him of the Executive’s view that the matter was one of research governance, and that a small ad hoc committee should be established to review the matter.

40 On 7 May 2008, Ms Malica commenced employment as the Manager of the RSO within the NHN. Before then, Ms Malica had been employed for seven years at the New South Wales Cancer Council.

41 From February 2008 to May 2008, Ms Edwards worked as Research Advisor in the RSO. She ceased employment with the RSO in May 2008.

42 During June 2008, Mr Bernard took advice about proposed terms of reference and proposed members of the ad hoc committee from Professor Margaret Rose, the Director of Research Governance, Professor Ward and Ms Malica.

43 In an email dated 2 June 2008, Professor Ward makes suggestions to Mr Bernard concerning the membership of the ad hoc committee. Professor Ward indicated that she had raised the need for a review with Professor Campbell, and that he was happy to help and he would be “a good chair”. She suggested that Ms Malica should be part of the committee. Professor Ward said in the email (Exhibit A, pages 133-134) (emphasis added):

“With due respect, I don't think Jim Mackie or other non-research clinicians on the campus are appropriate - we need very specific content advice from experts. You recall the HREC executive did not feel they had enough expertise either in the SAC or the HREC proper to address the first set of issues in this matter ie those related to the manufacture. Once advice is forthcoming on the manufacturing issues there are other issues which will require attention by both the HREC and the scientific review committee.

I caution against trying to do this with great haste - the minister cannot override your decision to halt the trial. Our priority is patient safety and research integrity. The process will take as long as it takes - no one is harmed by delays.

Given that this matter involves Bernie Tuch I also think we need to give some thought to the protections we put in place for the ad hoc committee, particularly if they make a decision which adversely affects Bernie .

Margaret, like you I suspect it would be best if we could both stay away from this ad hoc committee

It is expert content advice that is sought - the committee will provide a recommendation to Andrew Bernard and he may seek the views of others in interpreting this advice and formulating his next steps eg Jim, yourself etc. In my mind being part of the ad hoc committee disqualifies you from assisting in the interpretation of the advice

. I also think that this trial is an issue about ethics, scientific merit and governance - this should be assessed locally through due process - which as you know we have only just established. Adhering to these processes is very important, not only for our own integrity but also to maintain (gain in our case) credibility with the external research community. To undermine our processes now because of external pressures will be to our long lasting detriment.”

44 On 7 June 2008, Professor Ward sent an email to Mr Bernard concerning the proposed ad hoc committee (Exhibit A, page 141) (emphasis added):

“I met with Terry Campbell on Friday and he has agreed to act as chair of the committee. He has a preference for how he would like to run the agenda and I told him this would be fine with us. Briefly he wants to commission a couple of background documents before the committee meets face to face. One of these is a laboratory inspection and the other is an audit of the trial's CRFs etc.

He understands that the primary role of the committee is to advise on whether the decision to stop the trial were correct - but the short summary is that ‘you don’t need a committee to tell you this - you had no other choice

’. Provided you are comfortable, Terry would like Carmel Edwards to serve as a member of the committee with Marie as the support person.”

45 In an email dated 26 June 2008, Professor Ward suggested to Ms Malica, Professor Campbell and Mr Bernard that Dr Alison McLean be approached to review the laboratory manufacturing process used for preparation of islet cells, noting that she had already reviewed the facilities (Exhibit A, page 152). It was Professor Ward who passed on to Ms Malica the names of possible auditors who might be used by the Review Committee, including the name of Dr David Sarson (Exhibit A, page 156).

46 On 28 July 2008, Ms Malica emailed Mr Bernard in relation to the ad hoc committee, and said that the Plaintiff should be advised of the review and its terms of reference. Accordingly, on 29 July 2008, Mr Bernard wrote to the Plaintiff advising that “In order to make a determination on whether the project may resume, I have requested that a Committee be established to review issues of research governance arising from the conduct of the project within the Diabetes Transplant Unit”.

47 The same letter advised the Plaintiff that members of the Review Committee would be:

(a) Professor Campbell as chair - Professor Campbell was Clinical Associate Dean and head of the Department of Medicine, Faculty of Medicine, University of New South Wales;

(b) Ms Edwards, who by that time was a Consultant, Research Management; and

48 Mr Bernard enclosed the proposed terms of reference of the Review Committee and invited comment from the Plaintiff on those terms by 12 August 2008.

49 On 13 August 2008, the Plaintiff met with Mr Clout and requested one amendment to the terms of reference. On the following day, the Plaintiff emailed Mr Clout to thank him for “allowing the issues that have been frustrating me and the Diabetes Transplant Unit to be aired” and set out the additional term of reference that he sought (Exhibit A, pages 191-192). That amendment to the terms of reference was duly made, with the addition of clause 5.1.7 concerning patient safety.

50 The terms of reference of the Review Committee required it to review the research being undertaken in the DTU using human tissue as a component of a product for transplantation into humans with diabetes, in particular the Plaintiff’s study NHN Ref 05/151 and the conditions of manufacture of encapsulated islet cells. The terms of reference were lengthy, requiring review of procedures, documentation and safety outcomes in patients and compliance with regulatory requirements and standards for the manufacture of products for use in humans. With regard to documentation, clause 5.5 of the terms of reference gave the Review Committee power to review documentation. The Review Committee was also given power to make findings in certain respects.

51 Given the issues raised in these proceedings, it is appropriate to set out in full the terms of reference of the Review Committee:

“TERMS OF REFERENCE
Diabetes Transplant Unit Review Committee

Title

The name of the Committee shall be the Diabetes Transplant Unit (DTU) Review Committee (The Committee).

Purpose

To review the research being undertaken in the DTU that uses human tissue as a component of a product tor transplantation into humans with diabetes. Particular reference will be made to the study entitled ‘Transplantation of encapsulated human islets into people with Diabetes’ (SESIAHS NHN HREC Ref 05/151), and the conditions of manufacture of 'encapsulated islet cells’.

The General Manager, NHN, SESIAHS has requested a review of this research protocol. Specifically, the GM requires:

2.1 Advice as to whether his Directive of 27 March 2008 to cease the Encapsulated Islet Trial was justified.

2.1.1 An outline of the conditions which would need to be in place for the Encapsulated Islet Trial to be undertaken,

2.1.2 Advice, it relevant, on any possible negative impact of the study on the subjects and institution over the last three years.

2.1.3 Advice as to whom the GM should inform of the findings of the review.

Governance and Resources

3.1 This ad hoc committee has been established under the auspices of the General Manager, Northern Hospital Network, SESIAHS.

3.2 The Committee will provide detailed advice and recommendations to the General Manager, NHN, SESIAHS.

3.3 The Committee will be supported by a Secretariat within the Research Support Office, NHN. The Secretariat will provide ongoing support to the Committee as necessary. This Secretariat will undertake at least the following prior to the first meeting of The Committee:

3.3.1 Prepare a summary of the status of all research currently being undertaken within the DTU.

3.3.2 Seek expert advice from the Therapeutic Goods Administration (or other expert) about the appropriate national regulatory requirements of this study.

3.3.3 Provide to The Committee all documentation relating to the above as well as a catalogued copy of all documentation relating to the study that is held by the Research Support Office, including HREC submission and all subsequent correspondence.

3.3.4 Review of study documentation held by the investigator. [This may be sub-contracted to a Contract Research Organisation (CRO) or other expert with experience in reviewing and making recommendations about such documentation.]

3.3.5 Review the laboratory manufacturing processes used for the preparation of the islet cells

3.3.6 Any other documentation as requested by the Chairperson of The Committee.

Membership

4.1 The Committee membership shall be adequate to ensure appropriate expertise to undertake the review as outlined in the Purpose at Clause 2. Members will declare any potential conflicts of interest and may be excluded if the General Manager, NHN considers such potential conflicts to be significant.

4.2 Membership will at least include:

• Chairperson

• A person(s) with experience in research management

• A person(s) with experience in research governance.

Any member may have expertise across one or more of the above categories, there will be at least 3 members.

4.3 The Chairperson and Members will be appointed by the General Manager, NHN, SESIAHS.

4.4 All members of The Committee must be present at meeting(s) or must provide written comments.

4.5 Persons may be invited to provide expert advice by The Committee at the request of the Chairperson on behalf of The Committee. Such persons have no voting rights.

4.6 The Committee may seek the assistance of professional organisations or individuals In the review of study documentation or when necessary.

4.7 Decisions and recommendations will be made by consensus where possible, and alternatively by a simple majority vote of the membership of The Committee members only.

Scope

5.1 Review the project entitled ‘Transplantation of encapsulated human Islets into people with Diabetes’ (SESIAHS NHN HREC Ref 05/151) in relation to the following:

5.1.1 Procedures and facilities for the procurement of islet cells including approval, harvesting, maintenance of sterility, testing for pathogens, storage and quality assurance.

5.1.2 Procedure for encapsulation of islet cells including methodology, facilities, maintenance of sterility, adherence to appropriate directives/guidelines (eg ICH GCP, GMP).

5.1.3 Procedure and facilities for the transplantation of encapsulated islet cells into humans.

5.1.4 Procedures for Quality Assurance monitoring and ensuring protocol adherence.

5.1.5 Procedures for monitoring participants post transplantation.

5 1.6 All documentation relating to the study including protocol, ethics submissions and approvals, case report forms, adverse events, patient information statements and consent forms, quality assurance documents etc (this may be undertaken by a CRO).

5.1.7 Safety outcome in patients already treated in the trial, specifically in relation to Incidence of Infection.

5.2 Review adherence to national regulatory requirements for this research by the investigator, the Human Research Ethics Committee and the Institution.

5.3 Review national and international standards for the manufacture of such products for human use (should national regulatory requirements be ambiguous)

5.4 Review the broader implications for other research being undertaken in the DTU.

5.4.1 Should this review Indicate that other research being undertaken within the DTU does not meet appropriate regulatory standards then The Committee may propose to the GM NHN that he endorse the extension of these Terms of Reference to Include review of such research projects.

5.5 In undertaking this review The Committee may seek to review any documentation relating to the study that is held by the Investigator, the HREC, the Institution, and regulatory bodies eg TGA.

Outcomes

The committee will provide the General Manager, NHN, with a detailed report on the current status of the study ‘Transplantation of encapsulated human islets into people with Diabetes’ (SESIAHS NHN HREC Ref 05/151). This report will include detailed findings of the review and advice and recommendations about how to ensure research undertaken in the DTU meets appropriate regulatory standards. The report will also include detailed advice about the responsibilities of the investigator, the HREC and the Institution in respect of such research. The broader implications for other research within the DTU and across NHN campus will also be presented.

The Committee will provide a Report that includes:

6.1 Current status of the study with respect to:

• Procurement of islet cells

• Manufacture of encapsulated islet cells

• Procedures for transplantation

• Quality assurance methodology

• Monitoring of participants

• Adverse events

• Adherence to study protocol

The Report will document the current status of each element above, current national and international standards relating to each element and provide advice about whether these standards are being met. Recommendations will be made to ensure standards are implemented.

6.2 The national regulatory requirements for the research and whether these requirements have been implemented. Any such requirement(s) may have Implications not only for the conduct of the research and the investigator but also the role of the Human Research Ethics Committee and the Institutional administration (as the sponsor of investigator initiated clinical research). The Committee will clearly document the responsibilities of each party and make recommendation(s) about these responsibilities.

6.3 Advice and recommendations about appropriate facilities for, and the manufacture of, 'encapsulated islet cells', based on national and international standards. This is particularly important should the Therapeutic Goods Act not specifically require adherence to ICH GCP.

6.4 The Committee will provide recommendation about:

• the terms under which the research entitled 'Transplantation of encapsulated human islets into people with Diabetes’ (SESIAHS NHN HREC Ref 05/151) could proceed, or

• whether the current withdrawal of authorisation for the research should be made permanent.

Full documentation will be provided in support of either recommendation.

6.5 Implications for other research being undertaken in the DTU. The Committee may make recommendation that other research studies be reviewed with similar terms of reference.

6.6 Implications for research across the NHN.

Other

7.1 The investigator, Professor Bernie Tuch, will be informed of these Terms of Reference, his responsibilities in providing access to Information as requested by The Committee in undertaking this review.”

52 The Review Committee made formal requests for information from the Plaintiff on 14 and 22 August 2008. In response to those requests, the Plaintiff supplied information on 21 and 28 August 2008 respectively. There was also ongoing dialogue between those acting for the Review Committee and the Plaintiff, which involved further exchange of information.

53 Between 14 and 19 August 2008, the Plaintiff exchanged emails with Mr Bernard, Mr Clout, Professor Ward and Ms Malica about whether the Therapeutic Goods Administration (“TGA”) had approved the 2005 clinical trial notification for the Clinical Trial. On 19 August 2008, the Plaintiff emailed Ms Malica stating (Exhibit A, page 199):

“Your advice about how to handle the ‘2005 CTN’, in light of what has been uncovered in the last few days, is appreciated. I am happy to wait for instructions from Andrew on this matter. No doubt his administrative experience will be very helpful in guiding a future path.”

54 In a letter dated 21 August 2008 to Ms Malica enclosing documents sought by the Review Committee, the Plaintiff requested an early inspection be arranged of the DTU laboratory (Exhibit A, page 210):

“You have indicated that the laboratory of the Diabetes Transplant Unit will be inspected. It would be appreciated if this could be carried out before the Manager of the Unit departs for her 4 weeks annual leave. Her last date in the laboratory is Friday August 29. My understanding was that it was planned that the review would be completed by this time anyway. Your consideration of this issue would be appreciated.”

55 Ms Malica responded promptly to the Plaintiff’s letter by email on 21 August 2008 (Exhibit A, page 208):

“Thank you for arranging Sarah Walke to deliver the documents relating to your study HREC Ref 05/151 to my
office this afternoon as requested.

I note in your covering letter that you have requested the DTU inspection to be undertaken before the Unit Manager goes on 4 weeks leave from Friday 29 August.

In accordance with your request we do hope to have the inspection undertaken before 29 August.

I will contact you again tomorrow with more information.

When I spoke to Sarah this afternoon she indicated that there are many more documents, particularly relating to quality assurance and the preparation of the islets, retained at the DTU which you did not think were appropriate to provide to us at this stage, and it might be better to provide them to the inspector.

I have asked Sarah to email me a list of such documentation.

Thank you for your cooperation in this matter.”

56 The Review Committee met, for the first time, on 22 August 2008, with Professor Ward being present, in part, by invitation. The Review Committee considered the documents submitted by the Plaintiff on 21 August 2008. The minutes of the meeting contain the following (Exhibit A, page 335):

“The Committee was so concerned about the state of this and other documentation (see below) that it decided during this meeting to recommend commissioning of a formal audit of all the trial-related paperwork, to be done by an external consultant with specific expertise in auditing clinical trials to GCP and TGA/FDA standards.

Action:

Marie Malica to arrange GCP documentation audit to be undertaken as soon as possible.”

57 Later on 22 August 2008, Ms Malica communicated with the Plaintiff and Ms Sarah Walke, Laboratory Manager in the DTU, by email for the purpose of attending the DTU to sight original documentation. At 6.05 pm on 22 August 2008, an email from Ms Malica to the Plaintiff included the following (Exhibit A, page 339):

“Please find attached letter from Terry Campbell following the Review Committee's consideration of the documentation you provided.

I have not been able to confirm which day next week the DTU inspection will take place, but I hope to get back to you on Monday regarding this.”

58 Attached to the email was a letter from Professor Campbell dated 22 August 2008 requesting certain additional information, with the letter identifying shortcomings in the information that had been provided by the Plaintiff the previous day and noting that the Plaintiff had not provided some information previously requested. The Plaintiff was requested to provide further information by 28 August 2008 (Exhibit A, pages 340-342).

59 For the purpose of conducting its investigations, the Review Committee determined on 22 August 2008 to appoint two external auditors, and in due course, the following persons were appointed for this purpose:

(a) Dr David Sarson, Director of Delpharm Consultants Pty Limited, who was to conduct a good clinical practice (“GCP”) compliance audit in accordance with clause 5.1.6 of the terms of reference; and

60 In an exchange of emails between Ms Malica, Professor Campbell and Professor Ward on 25 August 2008, Professor Campbell said that it was “Robyn’s call” whether Dr Sarson was engaged, and Professor Ward approved this step (Exhibit A, page 355).

61 By email dated 26 August 2008, Professor Campbell provided to Professor Ward a copy of the notes of the 22 August 2008 meeting described as “our first meeting” (Exhibit A, page 359).

62 By email dated 26 August 2008, the Review Committee informed the Plaintiff that Dr Sarson would visit the DTU at 9.30 am on 27 August 2008, and that Dr McLean and Ms Bouyer would undertake a site inspection and review of procedures, facilities and quality assurance on 28 and 29 August 2008 as part of the review process.

63 Later on 26 August 2008, the Plaintiff sought a delay of the two external formal reviews, until the week commencing 27 October 2008 for reasons explained in an email from the Plaintiff, to be mentioned shortly.

64 A number of emails sent on 26 August 2008, referred to in the following paragraphs, are of particular significance to the Plaintiff’s claim for relief with respect to the Review Committee report based upon denial of procedural fairness.

65 At 1.14 pm on 26 August 2008, Ms Malica sent an email to the Plaintiff advising of the proposed site inspections by Dr Sarson on 27 August 2008 and Dr McLean on 28 and 29 August 2008. Ms Malica provided further information concerning the site inspections in the email, and requested that the Plaintiff and his staff make themselves available to Dr Sarson and Dr McLean to assist in their reviews.

66 At 4.18 pm on 26 August 2008, the Plaintiff replied by email to Ms Malica in the following terms (Exhibit A, pages 379-380):

“Dear Marie

Your attempt to organize for the lab inspection as part of the review is appreciated. It is consistent with the decision by the CE Terry Clout (mentioned at a meeting involving him, Robyn Ward and me on 13.8.08) to reach a speedy conclusion as to the future of the clinical islet trial. My recollection of the meeting was that the internal review of the Human Islet trial and the Committee's report would be completed by the end of this week. This would allow a decision by Andrew Bernard as to the fate of the clinical trial to be made over the subsequent few days. The aim of this time line was to allow past matters to be dealt with speedily and allow a future path to be created.

However, the magnitude of what is being requested using external consultants indicates this time line will not be achieved. Turn around time for written reports from external consultants is at least 30 days. Certainly, this was the case when the GMP review on the Randwick campus was carried out by Allison McLean late last year.

Your advice of there being two external contractors to advise the Committee is new information; previously the correspondence indicated a single visit.

Last Friday you and Tali visited the laboratory of the Diabetes Transplant Unit and the Diabetes Centre and viewed much of the information being requested for review by David Sarson. Moreover, the Committee has asked a series of questions in relation to much of what Mr Sarson is to review. The answers to these questions have been requested by Thursday, the day after his proposed review.

In light of the above, the Committee's indulgence is now sought to delay the two external formal reviews until the week commencing October 27, with a preference for Tuesday October 28 and Friday October 31 (if two days are needed). The reason for the new times is as follows:

(a) the Manager of the Unit will be on annual leave (1.9.08 - 28.9.08)
(b) I will be away for a number of days each week for the next 4 weeks (this is the time of the Jewish New Year and a series of religious festivals) [29.9.08 - 24.10.08]

Now, as regards the review by Allison McLean, can you please confirm that she has been advised the standard of the laboratory she is examining is not meant to be one that satisfies Good Manufacturing Practice (GMP) conditions. The Diabetes Transplant Unit categorically does not produce encapsulated human islets under such conditions; and, as previously argued, is not required to do so for the clinical trial (under existing TGA guidelines Schedule 7, Item 1 and Schedule 5, Item 7(q)). To the best of my knowledge, no laboratory on the Randwick campus operates under GMP conditions. Indeed, it was for this reason that the DTU had tried to upgrade its facilities last year to reach this standard. I am concerned that the Review Term of Reference 5.1.2 might lead Allison to believe otherwise.

To assist Allison in her future review, I will prepare a flow diagram as requested and hope to have it to you by COB today. The basis of the flow diagram is what is in the Protocols you have (the August 2008 version, which has yet to be submitted to the HREC for comment, is the same as the 2007 approved version with a small number of procedural changes). Could I suggest she be sent a Protocol together with the Flow Diagram.

Isolation of human Islets for non-clinical use

Approval from the hREC [sic] was obtained previously for the isolation of human islets for non-clinical use, as part of mechanistic studies to guide the direction of the clinical program. Carrying out such studies is, after all, good scientific practice. Approval for carrying out such studies was originally given under approval number MP01/003, which is separate from the clinical study. Approval to continue these studies was given on August 23, 2006 (copy attached), and given the same HREC number as the clinical trial (05/151).

In view of the requested delay as to whether the clinical islet trial can continue, and if so under what conditions, can you confirm that it is appropriate to allow this mechanistic study to continue. The basis of Andrew's original letter advising to stop the clinical trial related to a belief that encapsulated islets for clinical use may not be produced under stringent enough conditions. The issue of non-clinical use of encapsulated islets to my knowledge has never been brought into question.

You should be aware that two PhD students, Vijay Ganapathy and Gayathri Sundaram use human islets as an integral part of their post-graduate degree. Preventing them gaining access to the islets will hinder their ability to complete their PhD within the time frame required by the University.

Sincerely

bernie.”

67 At 5.06 pm on 26 August 2008, Professor Campbell sent an email to Ms Malica concerning the Plaintiff’s request for a delay in the site inspections to be undertaken by Dr Sarson and Dr McLean. Professor Campbell copied the email to Ms Edwards, Mr Bernard and Mr Clout and also to Ms Walke. As will shortly become apparent, the email was copied inadvertently to Ms Walke. Ms Walke was a colleague of the Plaintiff working in the DTU. The earlier emails from Ms Malica and the Plaintiff had been copied to a number of persons, including Ms Walke. However, it is clear that the present email was copied to her unintentionally. Professor Campbell’s email to Ms Malica was in the following terms (Exhibit A, pages 365-366) (emphasis added):

“Hi all,
This is an interesting development.
I would suggest there are no reasons to agree to the request, on the grounds that all the documents and equipment, SOP's etc that are being reviewed should already be extant and readily available in the DTU and DTC.... and if this is not the case, then Bernie is, by definition, in breach of various relevant guidelines, unfortunately, while he cannot do much about the infrastructure of the DTU in terms of compliance with various guidelines between now and late October, he could certainly attempt to retrospectively generate some of the documents we are seeking in the CRO review, and this review should definitely not be delayed....we already have strong grounds to believe it will identify major deficiencies in GCP, to the extent that we would be likely (if these are confirmed) to recommend indefinite continuing of the suspension of the trial in any case .

It is Andrew's call of course, but I would suggest that he make it very clear to Bernie that regardless of what might have been suggested by Terry Clout, the Clinical Trial is NOT going to be recommenced until such time as the Cttee is satisfied that the conditions are appropriate to recommend this, and we cannot be satisfied of this until the reviews we requested are done. [We are expecting ‘turnarounds’ of at most a few days in any case] I would recommend that his request to delay the Review of documentation be denied and the Audit by David Sarson go ahead this week. I do not feel so strongly about the review by Alison McLean since as Bernie has conceded, the DTU facility is not GMP, and whether he is correct in saying that GMP standards were not specifically legally required for this study, I am confident the Cttee will be recommending that any recommencement should only occur in GMP Facilities .

As far as the request to continue isolation of human islets for non-human use, I do not feel strongly one way or the other and would be keen to hear views from the other members of the Cttee

regards

Terry Campbell”

“overwhelming distrust and antagonism”

68 I infer that Professor Campbell realised that his 5.06 pm email had been inadvertently copied to Ms Walke because, at 8.41 pm on 26 August 2008, he sent an email to the Plaintiff explaining the earlier email (Exhibit A, page 365):

“Dear Bernie,
As you may have already gathered from the email I inadvertently copied to Sarah this afternoon, the Review Committee has significant concerns from what it has seen so far, in a number of areas, related among other things to the documentation required by GCP in Clinical trials.

I apologise for sending an email, intended as an internal committee document, to Sarah. I have since had the opportunity of hearing from the membership of the Committee and had some discussions with some of them, and am now in a position to notify you formally that the Cttee have recommended and Andrew Bernard has agreed, that it is in the best interests of all concerned that both proposed reviews (ie the review of the DTU Facility and the CRO's Review of your trial Documentation), go ahead as planned this week.

I understand your reasons for seeking a delay but as the whole point of the reviews is to document what should already be firmly in place anyway, there can be no argument that time is required to prepare for such audits and there is no doubt the Research Office has the power and the right to audit any ongoing research under its supervision at short notice. This is one of the ways in which quality assurance can be maintained in Research Governance.

Accordingly, Andrew Bernard has been notified of this recommendation this evening and has agreed that the reviews should proceed as planned.

The processes should both be very quick, and the Review Committee should be in a position to provide at least a Preliminary report by next week-close to and possibly within the original deadline suggested to you by Terry Clout.

We have a meeting planned late this week and will discuss our response to your request to continue nonclinical islet cell collection at that time.

sincerely

Terry Campbell”

69 At 11.38 am on 27 August 2008, Professor Campbell sent an email to Ms Walke, copied to the Plaintiff, concerning the email inadvertently copied to her the previous day (Exhibit A, page 389) (emphasis added):

“I am writing to apologise for the email I inadvertently sent to you yesterday and to give some context to it.

Firstly, I am sorry it has caused you distress - this was certainly not my intent. It was intended as an internal committee document and as such I did not feel the need to couch any of the language in the way I would have done had I been communicating it directly to you or Bernie. It is the duty of any such Committee to look into whether the Ethical and Governance issues surrounding a complex trial such as this are being carried out appropriately and being kept current. We would be remiss in our duty to the Area Health service if we did not do this in a way that considers all possibilities, including the possibility of documents which are meant to be contemporaneously kept, being created after the fact. To act in a way that minimises this possibility is not for a moment to assume or ascribe wrongdoing on the part of anyone associated with the study, but simply to be carrying out our job. I was simply stating that the possibility of fraud must be considered in all such reviews; it is the committee's job to seek it out (and we sincerely hope, not to find it), and that was the context of my comments on that issue and one of the reasons for the decision to recommend going ahead with the audits .

It is true we found significant deficiencies in what was sent last week and that was the reason for the follow-up requests and for the formal audit of documents. That is a matter of fact which would normally have been formally conveyed to you at the end of the inquiry (hopefully with all issues resolved by then), and again I apologise for the cc to you. I do not however concede that I was stating any preconception or prejudice on the Committee's part . I was simply stating that we had significant concerns based on what we had so far before us, and taking appropriate actions to resolve them quickly (ie I was doing my job within the context of a review which is ongoing).

I also apologise for the inconvenience to you and Bernie in terms of timing, but the timing of this review is not of the Committee's making. We have been urged on all sides to move quickly, and given this, are moving as quickly as we can to resolve all outstanding matters and come to our Conclusions and recommendations. These will be conveyed to Andrew Bernard as soon as is possible and then it will be up to him to communicate to Bernie.”

70 In an email sent at 11.48 am on 27 August 2008 to Professor Campbell and Ms Malica, Ms Walke objected to the notice given for the inspection and sought a delay. In an email sent to Ms Walke at 12.17 pm that day, Professor Campbell said (Exhibit A, page 384):

“I am sorry Sarah,

But you have no grounds on which to object. The DTU is not your property but that of the AHS. Ethics Committees have an absolute right to request audits and at St Vincents for example (where I have long experience) the standard is to give no more than 24 hours notice.

The whole point is to take a snapshot of record-keeping, documentation etc, as it is, not as it might be after an opportunity to prepare. GCP demands that all this be up to date at all times.

Having said that, we will not place any unreasonable expectations on you and are very happy to see this as exactly that-a snapshot and where there are items of documentation etc that are not regarded as essential to be kept up to date, we will be very happy to allow you time subsequently to prepare these. The same will apply to questions (if any) to which you may not have immediate answers.”

71 On 27 August 2008, Dr Sarson attended at the DTU to undertake an audit.

72 At 4.59 pm on 27 August 2008, the Plaintiff sent an email to Professor Campbell (copied to Ms Malica, Ms Edwards, Mr Bernard, Mr Clout and Ms Walke) under the heading “Procedural Unfairness”. In the course of the email, the Plaintiff contended that Professor Campbell had made up his mind before the review was completed and that, as a matter of procedural fairness, he should disqualify himself from the process. The Plaintiff’s email was in the following terms (Exhibit A, pages 377-378) (emphasis added):

“Dear Terry,

As per the wishes of Andrew and the Committee, the Diabetes Transplant Unit (DTU) co-operated with David Sarson and providing everything he requested to review this morning. Can you ensure that the Unit receives a copy of his audit, regardless of the outcome of the review. I am advised this is standard practice for clinical audits, and provides guidance about how best to maintain the paperwork needed for clinical trials.

It was pleasing to see that the amount of time required by personnel of the DTU for today's audit was minimal. I see from the time schedule provided this afternoon by Allison that the audit for tomorrow and Friday will be much more labour intensive. This is of concern, as there are existing commitments that personnel in the Unit also need to meet. For example, the overview presentation that Allison has requested from me for 0930 tomorrow is not practical since I have a weekly clinic that starts then. Marie has kindly tried to ensure Allison arrives earlier so the overview can be given and the clinic conducted.

The other timing issue relates to the lab manager, Sarah Walke. She departs on annual leave after this Friday. The DTU has 15 personnel that need to be managed in her absence, and reasonably she needs time to set the structures in place to ensure the Unit continues to operate in as smooth a manner as possible in her absence. Originally, it had been requested that no review occur on the Friday to allow a reasonable amount of time for Sarah to carry out these necessary duties. That half a day has been left for this is helpful, but not what had been sought. The degree of pressure that arises as a result of this time pressure is already having negative health consequences.

Perusal of the agenda that Allison has provided suggests yet again that GMP standard are being sought. As stated previously, the DTU does not operate under GMP conditions. This raises an issue of a substantial nature.

As you are aware, the Unit inadvertently received an email from you as Chairman of the Committee, with copies to Andrew Bernard and Terry Clout. Towards the end of the email you said: I am confident the Cttee will be recommending that any recommencement (of the trial) should only occur in GMP Facilities .

From the above quote, it is clear that you have made up your mind, even before the review has been completed, that the islet trial should be conducted only under GMP conditions. Since there is no GMP facility on the Randwick Campus, the review seems rather meaningless. Since you have pre-judged the issue, the Trial could never be approved even if the Unit satisfied all other aspects of the manner that the trials are to be conducted .

Terry, I have always been prepared to co-operate with the review and am surprised that you hold the view reflected in the above quote, since it is not a TGA requirement that trials of this nature be held under GMP conditions.

I also note in passing that the DTU has been at the forefront in attempts to establish a GMP facility on the Randwick Campus.

Having regard to the above, as a matter of procedural fairness, I would respectfully submit that you have no alternative but to disqualify yourself from the process .

Further, having clearly indicated your view to the other members of the Committee, if the review is not only to be fair but seen to be fair, they too should be disqualified since there is a real risk that their view about the trials could have been influenced by you .

For Thursday and Friday, the Diabetes Transplant Unit will do its best to co-operate fully with the requirements of Allison and Kerryn over the next two days. However, there will need to be some flexibility over the timing of how things are examined. I will take this up separately with Marie who is co-ordinating the visit of Allison and Kerryn.”

73 At 5.16 pm on 27 August 2008, Professor Campbell sought Professor Ward’s views concerning the Plaintiff’s email. Professor Campbell said (Exhibit A, page 421g) (emphasis added):

“Can you call me after you've read the previous email from Bernie and we can discuss what to do before one of us talks to Andrew Bernard ?

My feeling is that the view I expressed was not a ‘pre-judging’ at all, but a considered decision already made by the full cttee at its first meeting and stupidly released earlier than planned . It does not relate at all to the issues of documentation etc which are being dealt with by audit and I note Bernie has not tried to stop the audits.

An alternative would be to accede to his request and disband the Committee. Sarson's and McLean's reviews would still go ahead and reports could then go direct to Andrew Bernard who could make his own calls without input from us. Either way the outcome is likely to be similar

.”

74 At 5.43 pm on 27 August 2008, Ms Edwards sent an email to Professor Campbell (copied to Ms Malica, Mr Bernard and Mr Clout) concerning the Plaintiff’s earlier email. Ms Edwards said (Exhibit A, page 416) (emphasis added):

“Firstly, from my perspective as a member of the review committee I believe the Chair is entitled to express his opinion re one of the possible outcomes of the review. It is an opinion that may well be supported by the other members, based on the information reviewed to date about the conduct of the study. The committee members are adequately experienced and capable of making independent and informed judgements about the study. The recommendations put to the AHS will of course be made after due discussion and consideration of all the audit material by all committee members. I do not believe the committee members have been compromised in any way about the possible outcomes of the review .

On another issue raised by Bernie re the statement that since it is not a TGA requirement that trials of this nature be held under GMP conditions, I reiterate the following:

TGA requirements aside, it is the responsibility of the
organisation (SESIAHS) to ensure:

• The facilities and resources required for the research to proceed at the site have been identified, are appropriate and available.

• The researchers involved in the project at the site have the necessary skills, experience, training and expertise to carry out their role in the research project.

• Whether the research should be conducted at its site.

To ensure appropriate governance of human research is in place, the Institution can impose more stringent requirements than the TGA, or any other legal requirements, on the researcher.”

75 At 6.06 pm on 27 August 2008, Professor Campbell sent an email to Ms Edwards and Ms Malica in the following terms (Exhibit A, page 416) (emphasis added):

“Firstly Marie I think it is quite reasonable to send your proposed email.

Regarding the request to disband the committee, I want to discuss with Robyn when I can get hold of her and then either she or I will talk to Andrew Bernard .

I certainly don't think I need to admit to pre-judging and am happy to say (as I believe is true) that in fact the Committee already decided after due discussion at its first meeting that we would recommend exactly what I said. The only thing I am guilty of there is pre-releasing a decision already taken by the Cttee .

Andrew may wish to play the ‘safer’ option and just disband us, the two Audits can still report to him and he can either decide based on their reports or get another bunch of experts together.

”

76 On 27 August 2008, Dr Sarson conducted an inspection of the DTU laboratory.

77 At 8.15 am on 28 August 2008, Professor Campbell responded to the Plaintiff’s email (at [72] above) in the following terms (Exhibit A, pages 376-377) (emphasis added):

“Dear Bernie,

Can I first thank you for your cooperation in the processes that have been arranged for this week. I realise as you point out, that Allison's review today and tomorrow in particular, will be time consuming for you and Sarah and a particular burden for Sarah given her imminent departure on leave. I think it was important to move quickly and you have been most accommodating.

I am more than happy for a copy of David Sarson's report to go to DTU, but a final decision on that would rest with Andrew Bernard who is formally the client to whom it will be addressed.

In terms of your view that I have pre-judged the recommendations of the Review Committee, I must strongly disagree with your interpretation of the statement you have quoted from the email I inadvertently copied to Sarah. The question of whether Studies such as the Islet Cell transplant trial should be carried out in SESIAHS in future, under non-GMP conditions was discussed by the committee at it first meeting on Friday August 22, and the view I expressed in the email was simply reflecting where I believed we had got to during that discussion-no final decision was recorded as there was no need at the time to do so, and we will discuss it and other matters further at future meetings. We felt (and I agree) that whether or not it is required under TGA guidelines, it is best practice, and should be recommended as standard practice to the General Manager .

This was not a pre-judgement of mine which I was seeking to impose on the others, but a considered judgement of all the committee, taken a few days earlier and simply being fed back to them in my email was never meant to be conveyed to anyone outside the Committee, although of course, if it remains our view at the conclusion of our Review, it will then be conveyed to Andrew Bernard as one of our recommendations .

In regards to your comment that if that is our view then why persist with the rest of the Review (including the external audits), I can see the logic of your query, but would make two comments:

i) If that view is eventually formed into a recommendation to the GM, it will only be a recommendation; there is no obligation on the GM's part to accept it

ii) Quite apart from that, we were asked by Andrew Bernard not only to make recommendations about any future Transplant trials, but also to review the conduct of the current (suspended) Trial. We had serious concerns about several aspects of the responses we received from you last week, which we also reviewed and discussed at our Aug 22 meeting, and on that basis, requested the Audits to clarify these further in as expeditious and expert a manner as possible.

Accordingly Bernie, I see no reason to withdraw from the Committee, and certainly no reason for any other member of the Committee to withdraw. [The Committee was appointed by Andrew and it remains of course, his prerogative to dismiss us

.] I expect very quick turnarounds from David Sarson and from Allison McLean, and hope to be able to get at least a preliminary report to Andrew Bernard within the time window promised by Terry Clout. This would certainly not have been possible were the Audits not to have been held this week, and also would not have been possible without your and Sarah's cooperation for which I am grateful.

sincerely

Terry”

78 At 5.52 pm on 28 August 2008, the Plaintiff replied to Professor Campbell’s email in the following terms (Exhibit A, page 376) (emphasis added):

“Dear Terry

Thank you for your prompt response to my email.

Firstly, let me say the Product audit is underway at present and appears to be running smoothly. Allison and Kerry have been accommodating to our logistical requests that I raised yesterday with Marie.

Secondly, the preliminary conclusion reached by the Committee (as stated in your email) that best transplantation practice requires GMP conditions be met on the Randwick campus is one that the Diabetes Transplant Unit would support. Indeed, as you know, the Unit has been trying to have such a facility created on campus for some time now.

If this is the final recommendation of the Committee and it is adopted by Andrew, it will have implications for every transplant unit on campus, not just the encapsulated human islet trial which your committee is reviewing. It will effectively stop bone marrow transplants, for example, until a GMP Facility is created and the cells are prepared in this Facility.

Of course, Andrew might be prepared to have a period of grace for those transplanting cells, whilst GMP facilities are being developed, if indeed this pathway is chosen to proceed with.

Should that be so, would your Committee be prepared to consider recommending allowing the Encapsulated Human Islet Program to continue in the interim, and if so, on what basis. As you know, the Terms of Reference do provide for this option.

On the procedural matter I raised in my last email, you have confirmed the accuracy of my contention that not only you have prejudged the matter but that the whole Committee may well have done so even before the review was complete. We disagree on the actions that should arise from this .

As to your two reasons as to why the review should continue:

1. The conclusions of reviews by a Committee of this type are always merely recommendations to the GM. If the process is flawed then there is no point to the review.

2. Serious concerns about several aspects of the responses received last week. I trust these concerns were covered by your letter of August 22, in which you raised a number of issues, and asked for further information? [Marie has received my response to these today]. If there are further concerns, could you please advise what they are to allow for the opportunity to respond to them.”

79 On 28 August 2008, the Plaintiff provided further information to the Review Committee in response to Professor Campbell’s letter of 22 August 2008 (Exhibit A, page 422). The Plaintiff also took the opportunity in his letter to advance arguments on a number of issues.

80 On 28 and 29 August 2008, Dr McLean and Ms Bouyer conducted an inspection of the DTU laboratory.

81 In an email at 7.48 pm on 28 August 2008, Dr McLean informed Ms Malica of the key findings of her audit (Exhibit A, page 443):

“The following points summarise the key findings of the audit today:

We consider there is considerable risk to the safety of patients due to the lack of quality oversight and systems of control

Evidenced by:

Inadequate sterility assurance systems coupled with unvalidated Sterility testing methods

Non existant [sic] control over raw materials used in production eg use of collagenase that is not suitable for human use

Critical data is not recorded and production records are inappropriate

Traceability is compromised through inadequate record keeping

There is no independent Quality Function or formal review against specifications where they exist

While there has been considerable effort to write procedures and protocols it is clear that they have not been implemented successfully. Further in our opinion there are inadequate resources to successfully fix it on the short term.

We regret that we have to report these findings. The group are passionate about the science but clearly need outside support to help with the quality aspect of the clinical production.

We will complete a detailed report by next Friday for your review. I hope that this summary is adequate for your meeting tomorrow and again thank you for this opportunity.”

82 On 29 August 2008, Dr Sarson provided a draft report to Ms Malica (Exhibit A, pages 448-455; page 463). In the draft report, Dr Sarson noted that the audit had been arranged at short notice, thereby precluding a thorough examination of all the documentation held by the Research Governance Office. It was noted that the auditor was reliant on the documentation provided, and acknowledged that some other relevant documentation may be held at DTU which may alter the conclusions drawn (Exhibit A, page 448). The draft report of Dr Sarson expressed the following conclusions (Exhibit A, page 455):

“The audit of the documentation provided, revealed significant non-compliance with GCP Guidelines. As a result of this, the data gathered thus far is unacceptable for review by regulatory authorities unless significant remedial action is taken.

The onus for this non-compliance must be shared by the investigator and by the approving HREC. In the auditor’s opinion, this is an important research activity (islet transplantation) which could lead to greatly improved quality of life to brittle diabetic patients. For this reason it is a pity that the data in its current form is not usable in a regulatory dossier.

However, patient safety and ethical practice are the cornerstones of good research and should be pre-eminent in any venture of this type.

The auditor recommends that the study not be continued until the relevant GCP elements have been incorporated into the research plans and remedial action taken to improve the quality of existing data.”

83 The Review Committee met, for the second time, on the morning of 29 August 2008 to consider the preliminary comments of Dr Sarson and Dr McLean, and the documents which had been submitted by the Plaintiff on 28 August 2008. Dr McLean’s preliminary comments raised significant concerns for patient safety. The Review Committee resolved that the findings in relation to patient safety warranted immediate action. The Review Committee invited Mr Bernard to attend part of the meeting in order to provide an update. The minutes also record that Professor Ward was present, in part, by invitation. The Review Committee recommended to Mr Bernard that the suspension of the trial be confirmed. The Review Committee also recommended that, as a matter of urgency, the Plaintiff should be required that day to produce to Mr Bernard original trial-related documents, and that urgent consideration ought be given to notifying the patients of the Clinical Trial suspension and how their conditions would be monitored.

84 The minutes of the Review Committee meeting recorded that consideration had been given to the Plaintiff’s request of 27 August 2008 that the committee members stand down on the basis of prejudgment on the part of the Chair, with all members rejecting any claim of bias or prejudgment and confirming that they would continue their deliberations as a committee (Exhibit A, page 457).

85 On 29 August 2008, Ms Malica requested Dr Sarson to make a number of amendments to his draft report (referred to at [82] above). With respect to the conclusions expressed, Ms Malica stated (Exhibit A, page 463):

“Page 8 conclusions, whilst we recognise you do have content knowledge in this area, for the purposes of this report it might be best to remove the following statement “In the auditor’s opinion, this is an important research activity (islet transplantation) which could lead to greatly improved quality to life to brittle diabetic patients. For this reason it is a pity that the data in its current form is not suitable in a regulatory dossier’.

If you agree, please amend and return the report.”

86 Following the Review Committee meeting on 29 August 2008, Ms Malica sent an email to Mr Bernard in the following terms (Exhibit A, pages 465-466) (emphasis added):

“Following this morning's meeting of the Review Committee established under your auspices to review the abovementioned trial I am writing to advise the following. Our initial finding is that :

a) your directive of 27 March 2008 to cease the above-mentioned clinical trial was justified

b) the trial should not recommence

The Review Committee commissioned two expert reviews which were undertaken this week. Attached is the preliminary report from David Sarson regarding GCP documentation compliance, and a brief email from Allison McLean summarising the key findings from day one of a two day site inspection which will be completed today. These draft reports will be incorporated into the Committee's final report.

Decision Concerning Alleged Excess of Power by Review Committee

339 In a different context, I have already considered the Plaintiff’s submission that findings and recommendations were made by the Review Committee which went beyond the terms of reference. For reasons expressed at that point in the judgment (at [300] above), I am not persuaded that the findings and recommendations of the Review Committee went beyond the terms of reference. Accordingly, I reject the first ground for relief under the present heading.

340 With respect to the second and third grounds asserting the failure to have regard to relevant factors and the taking into account of irrelevant factors, I keep in mind the limits of the test posed in Peko-Wallsend.

341 The factors that are, or are not, relevant to a decision-maker’s task are to be identified primarily, perhaps entirely, by reference to the statute rather than the particular facts of the case that the decision maker is called upon to consider: Minister for Immigration and Multicultural Affairs v Yusuf [2001] 206 CLR 323 at 347-348 [73]. To invoke error of law based upon a failure to take account of relevant considerations, it is necessary to identify matters, the consideration of which is mandated by law: Saville v Health Care Complaints Commission [2006] NSWCA 298 at [55]. This ground is not to be used as a type of appeal against a finding of fact which is said to be erroneous. The essence of this ground is that the decision maker was required, in the exercise of the relevant statutory function, to have regard to certain factors, or to disregard other factors.

342 I am not satisfied that the Plaintiff has made good these grounds for relief. In my view, the Plaintiff’s legitimate grievance with respect to the Serva material arises from the non-disclosure by the Review Committee, prior to provision of the final report on 20 October 2008, that communications had taken place with Serva and that certain information had been provided by Serva since 8 October 2008 which the Review Committee proposed to have regard to in its findings and recommendations.

343 I reject the Plaintiff’s claim for relief based upon alleged excess of power by the Review Committee.

Plaintiff’s Claim for Relief with Respect to the Acceptance Decision of Mr Clout on 21 November 2008

The Plaintiff’s Submissions Concerning Claim of Apprehended Bias

344 The Plaintiff submitted that, in making the recommendation on 20 November 2008 to Mr Clout to accept the Review Committee report and recommendations, Mr Bernard did not exercise a discretion independent of Professor Ward. It was submitted that this lack of independence characterised his decision to establish the Review Committee and infected the decision to accept and implement the findings and recommendations of the Review Committee.

345 The Plaintiff submitted that, in implementing decisions already made by Professor Ward, Mr Bernard placed himself in the position of “accuser” and that, in accepting her opinions, he prejudged the matter before him. It was submitted that Mr Bernard had a personal interest in the outcome of the review because he may be seen to have failed to discharge his responsibilities for governance at PoW Hospital.

346 The Plaintiff submitted that:

(a) Professor Ward gave Mr Bernard the form of words to be used in his letter to the Plaintiff suspending the trial;

(b) Mr Bernard deferred to Professor Ward’s advice as to what he should do after suspension of the Clinical Trial;

(c) Mr Bernard simply accepted Professor Ward’s suggestion that Professor Campbell chair the Review Committee;

347 The Plaintiff relied upon the comments of Mr Bernard on the preliminary report dated 29 August 2008, which included findings of non-compliance by the Plaintiff with procedures of the HREC and Departmental policy, including the statement “It is the responsibility of researchers to know and comply with policy and legislative requirements”. It was submitted that Mr Bernard sought to emphasise the role of the Plaintiff, rather than any other person in the Defendant.

348 Reliance was placed upon Mr Bernard’s request for an amendment to be made to the draft report so that it be made more explicit “Why it is a COI [conflict of interest] for BT to be a manufacturer, investigator, doctor etc etc. He understands it is obvious but feels Terry Clout may not”.

349 The Plaintiff submitted that, in recommending the acceptance decision to Mr Clout on 20 November 2008, Mr Bernard had a closed mind. He had taken steps already to implement the preliminary report provided to him on 29 August 2008. He had provided an action plan to Professor Ward and others, containing seven matters which matched those in the preliminary report, and had already proposed a meeting with the Plaintiff to discuss those recommendations (Exhibit A, page 493).

350 The Plaintiff submitted that, as early as 2 September 2008, Professor Ward reported that Mr Bernard had prepared a brief to Mr Clout on various matters relating to implementing the recommendations in the preliminary report, although the final report would not be delivered for some weeks. Mr Bernard had sent Mr Clout a preliminary report dated 31 August 2008 with recommendations to continue suspension of the Clinical Trial and listing other recommendations. The Plaintiff submitted that Professor Ward continued to retain control over the implementation plan, advising Mr Bernard as to its content, and that it was to be given to the Plaintiff in an interview. The Plaintiff submitted that the steps which followed after 30 August 2008 were made on a predetermined path, which also had the approval of Mr Clout.

351 The Plaintiff submitted that Mr Bernard was the key advisor to Mr Clout, so that an appearance of bias on his part would amount to an appearance of bias in Mr Clout’s decision.

The Defendant’s Submissions Concerning Claim of Apprehended Bias

352 The Defendant submitted that Mr Bernard cannot be regarded as an “accuser”, with reliance being placed upon the narrower construction of Stollery and Ong proposed by the Defendant.

353 Further, the Defendant submitted that Mr Bernard was not the decision maker for the purpose of the acceptance decision. It was Mr Clout who made the decision to accept the findings and recommendations of the Review Committee.

Decision Concerning Claim of Apprehended Bias

354 It is the case that Mr Clout, the Chief Executive of the Defendant, made the decision on 21 November 2008 to accept the Review Committee report and to implement its recommendations. It is also the case that Mr Bernard, in the circumstances of this decision, was a key advisor to Mr Clout. It was Mr Bernard who had liaised between the Review Committee and Mr Clout with respect to this issue.

355 For reasons already expressed (at [194ff] above), I do not accept the Defendant’s narrow submission with respect to the “accuser” principle in Stollery and Ong. Rather, it remains a matter for assessment, on the facts of the particular case, to determine whether a person, may be characterised appropriately as an “accuser”, and whether that person has become involved in the decision-making process in a manner which gives rise to a reasonable apprehension of bias.

356 I am not persuaded that Mr Bernard acted in the role of an “accuser” with respect to the Plaintiff. Mr Bernard had an understandable role to play in the establishment of the Review Committee as a result of Professor Ward’s referral of the matter to Mr Clout.

357 A more troubling feature is the process undertaken by Mr Bernard, in late August and September 2008, which had the flavour of moving towards implementation of recommendations before any submission had been received from the Plaintiff with respect to the draft report, nor any final decision made by the Review Committee, let alone by Mr Clout. At the very least, there was a significant blurring of the line which ought to have existed between the Review Committee and Mr Bernard.

358 However, I am not persuaded that this establishes prejudgment on the part of Mr Bernard, let alone an approach which, in some way, can be sheeted home to Mr Clout so as to infect his decision on 21 November 2008 to accept the Review Committee report and recommendations.

359 I reject the Plaintiff’s claim for relief under this ground.

Plaintiff’s Submissions Concerning Failure to Afford Hearing Before Acceptance Decision of 21 November 2008

360 The Plaintiff submitted that Mr Clout’s decision of 21 November 2008 was an exercise of power under s.24 HS Act, which was subject to the principles of procedural fairness, so that he had a duty to give a hearing to the Plaintiff.

361 It was submitted that Mr Bernard’s recommendation and Mr Clout’s acceptance, made on 20 and 21 November 2008 respectively, were made without offering the Plaintiff a hearing. Indeed, the Plaintiff submitted these decisions had already been made. It was submitted that any reference which Mr Bernard made to communication with the Plaintiff, was for the purpose of informing him of the process of implementation of the recommendations made by the Review Committee in its preliminary report.

362 The Plaintiff submitted that the attachment of the Plaintiff’s submission dated 8 October 2008, as an appendix to the final report of the Review Committee, did not provide the Plaintiff with an opportunity for a hearing before Mr Bernard and Mr Clout. The Plaintiff was not provided by Mr Bernard and Mr Clout with an opportunity to respond to the matters contained in the covering letter dated 20 October 2008 which accompanied the final report.

363 The Plaintiff submitted that the decision of the High Court of Australia in State of South Australia v O’Shea [1987] 163 CLR 378 did not assist the Defendant. The present case was not a two-stage statutory decision-making scheme. Further, the Plaintiff submitted that the decision to be made by Mr Bernard and Mr Clout was not necessarily governed by the terms of reference of the Review Committee. It was a different exercise of power, rather than a final exercise of power in one process.

364 In any event, the Plaintiff submitted that fresh material was taken into account in the form of the Serva material which had been obtained by the Review Committee between 8 and 20 October 2008. Mr Bernard and Mr Clout did not seek a response from the Plaintiff to the letter of 20 October 2008, which referred to the Serva material.

365 The Plaintiff submitted that the entire process was not fair. The Review Committee denied the Plaintiff procedural fairness.

Defendant’s Submission Concerning Failure to Afford Hearing Before Acceptance Decision of 21 November 2008

366 The Defendant submitted that the Plaintiff had been given a proper opportunity to be heard before Mr Clout’s decision of 21 November 2008 by the opportunity provided to him to comment on the draft report of the Review Committee. The Plaintiff’s submission of 8 October 2008 was annexed to the final report of the Review Committee, and was before Mr Clout for the purpose of his decision of 21 November 2008.

367 The Defendant submitted that this was a multi-stage process, not uncommon in administrative decision making. It was submitted that the investigation process was split from the decision-making process, with the Review Committee undertaking the former function by means of a fact-finding exercise and the issue of a report with findings and recommendations. It was the subsequent decision of Mr Clout to adopt and implement the report and recommendations which was the operative decision. The Defendant submitted that it was necessary to consider the decision-making process in its entirety: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 578.

368 The Defendant relied upon State of South Australia v O’Shea and submitted that the decision-making process as a whole had afforded the Plaintiff procedural fairness, so that it was not necessary for Mr Bernard and Mr Clout to provide him with a further opportunity to be heard. The hearing before the Review Committee had provided a sufficient opportunity for the Plaintiff to present his case so that the decision-making process, viewed in its entirety entailed procedural fairness: State of South Australia v O’Shea at 389.

Decision Concerning Failure to Afford Hearing Before Acceptance Decision of 21 November 2008

369 I accept that the principles explained in State of South Australia v O’Shea may extend to a multi-stage decision-making process, even where that process is not part of a statutory scheme. A sequential approach to administrative decision making may be a practical and sensible approach in a given case.

370 What remains necessary, however, is that a fair hearing is afforded to a person as part of such a decision-making process. In the present case, the Review Committee had obtained the Serva material between 8 and 20 October 2008 and had relied upon this material in a manner adverse to the Plaintiff in the final report. The Review Committee did not provide this material to the Plaintiff before 20 October 2008.

371 In State of South Australia v O’Shea, it was made plain that, in a two-stage decision-making process, where the second and final stage involves some new matter which a party has not had an opportunity to deal with, or where additional material had been gathered or new facts had emerged after the first hearing, then procedural fairness required that the final decision maker give a hearing: State of South Australia v O’Shea at 389, 403, 410, 412.

372 In circumstances where the Serva material had not been provided to the Plaintiff by the Review Committee, the requirements of procedural fairness called for Mr Bernard and Mr Clout to ensure that the Plaintiff had an opportunity to respond to the Serva material, before a decision was made whether or not to accept the report and recommendations of the Review Committee.

373 It was the case that the Plaintiff had knowledge that material had been obtained from Serva, given the reference to this in the letter of 20 October 2008 which was furnished to him. However, Mr Bernard and Mr Clout did not provide him with the primary material (including the email communications with Serva), nor extend to him at all an opportunity to respond by reference to the material that had been in the hands of the Review Committee as at 20 October 2008.

374 In the circumstances of this case, I am satisfied that the Plaintiff was denied procedural fairness in this respect, so that this ground of challenge has been made good.

Plaintiff’s Claim Based Upon Failure to Afford a Hearing Before the Review Committee Report and Recommendations and the Acceptance Decision Were Notified to the University of New South Wales and the New South Wales Medical Board

The Plaintiff’s Submissions

375 The Plaintiff submitted that procedural fairness required that, before a decision maker released to another agency material which was adverse to the interests of an individual, including by exposing that individual to a new hazard or prejudice, the individual ought be afforded a hearing on that proposed course: Ainsworth v Criminal Justice Commission; Johns v Australian Securities Commission (1993) 178 CLR 408; Consolidated Press Holdings Limited v Federal Commissioner of Taxation (1995) 57 FCR 348.

376 It was submitted that the Defendant had a duty to give the Plaintiff a hearing before it disclosed the Review Committee report to other persons or agencies. If disclosure by the Defendant was made to the New South Wales Medical Board under s.117A HS Act, the Plaintiff submitted that this provision did not exclude procedural fairness in the performance of that duty. It was submitted that the Plaintiff had a legitimate expectation that he would be informed, prior to the commencement of the review of the potential outcomes, including that if the report contained any adverse findings, the Defendant would send it to other agencies.

377 The Plaintiff submitted that Mr Clout’s letter of 28 November 2008 to the New South Wales Medical Board, which enclosed a copy of the Review Committee report, seriously misstated the findings of the Review Committee. Not unexpectedly, the Plaintiff submitted, the New South Wales Medical Board referred Mr Clout’s letter to the Health Care Complaints Commission, which in turn wrote to the Plaintiff on 5 January 2009 requesting a response to issues raised by the report.

378 Further, Mr Clout wrote to the University of New South Wales on 21 November 2008. The Plaintiff only became aware of this action when he received a letter dated 1 December 2008 from Professor Field, advising that the matters in the Review Committee report could form the basis for a finding of a prima facie case of research misconduct.

379 The Plaintiff noted that Mr Clout did not inform the Plaintiff of these actions until a letter was sent on 9 December 2008, well after the notifications had been given to third parties.

380 The Plaintiff submitted that the Defendant had denied the Plaintiff procedural fairness by sending the report to the University of New South Wales and to the New South Wales Medical Board, and indirectly to the Health Care Complaints Commission, without first giving him a hearing as to that proposed course.

381 The Plaintiff also emphasised that emails which had come to light, in preparation for the hearing in this Court, revealed that Professor Campbell had already sent successive drafts of the Review Committee report to Ms Kirby seeking her comments, which were provided. On 17 September 2008, Ms Kirby conveyed to Professor Campbell her concern that the Review Committee did not appear to be giving the Plaintiff a fair hearing and gave advice on how that might be done (see [101] above).

382 The Plaintiff also noted that, on 25 October 2008, Professor Ward pressed Mr Bernard to send the final report to Professor Field, Professor Henry and Professor Peter Smith at the University of New South Wales (Exhibit A, pages 702a-702b). Mr Bernard said he was happy to do so once Mr Clout had agreed to the action plan (Exhibit A, page 702a). Professor Campbell protested that this placed him in an awkward position (Exhibit A, page 702a). Mr Bernard relented and agreed to the Review Committee report being provided to the three individuals at the University of New South Wales (Exhibit A, page 702a). Mr Bernard himself provided a copy to the three University persons on 21 November 2008, the day upon which Mr Clout signed the action plan, noting that he had himself previously sent copies to the University of New South Wales (Exhibit A, page 715a).

383 The Plaintiff submitted that the decision to release the report affected the Plaintiff’s reputation, and there was an implied entitlement to be heard before this step was taken: Johns v Australian Securities Commission at 470-472.

The Defendant’s Submissions

384 The Defendant observed that Mr Clout’s letter of 28 November 2008, forwarding a copy of the final report to the New South Wales Medical Board, involved him being merely a conduit of information, and that no new finding had been added to the final report. It was submitted that Mr Clout was bound to so act under s.117A HS Act.

385 In addition, the Defendant pointed to Mr Bernard’s letter of 21 November 2008 (at [129]-[130] above) which enclosed an action plan foreshadowing disclosure to the University of New South Wales and other agencies.

386 The Defendant submitted that the Plaintiff had been afforded a fair hearing before the Review Committee, and that a further hearing was not required before the report was further disseminated by the Defendant. It was submitted that no guarantee had been provided to the Plaintiff that the final report would not be made known to others, and that he could not have a legitimate expectation that he would be consulted before the final report was circulated.

387 The Defendant sought to distinguish Consolidated Press Holdings Limited v Federal Commissioner of Taxation upon the basis that there were statutory guarantees of secrecy, which bore upon the question whether a person had a legitimate expectation that he would be consulted, before papers he had submitted to the Australian Taxation Office would be provided to an external expert for comment. Likewise, the Defendant submitted Johns v Australian Securities Commission ought be distinguished, as the case involved disclosure of a transcript of evidence before the Australian Securities Commission, with a statutory secrecy provision having some application.

Decision

388 The appropriate starting point is clause 2.1.3 of the terms of reference (see [51] above), which expressly required advice from the Review Committee as to who should be informed of the findings of the review. The draft report and final report did not address this question. Although the prospect of dissemination of the report to a third party was envisaged in the terms of reference, it was not referred to by the Review Committee. The draft report which was furnished to the Plaintiff did not contain any recommended course in this respect, to which the Plaintiff would have had an opportunity to respond.

389 In these circumstances, it seems to me that the Plaintiff had a legitimate expectation that he would be given an opportunity to be heard, before the final report and recommendations of the Review Committee was provided to any third party.

390 Mr Bernard’s letter of 21 November 2008 to the Plaintiff revealed that disclosure of the report was to occur. However, Mr Clout had already decided this should happen, without hearing the Plaintiff on the issue. Mr Clout took this decision even though the Review Committee had not addressed clause 2.1.3 of the terms of reference. By the time the Plaintiff received Mr Bernard’s letter, the University of New South Wales had been provided with the report.

391 Mr Bernard’s letter of 21 November 2008 did not foreshadow provision of the report to the New South Wales Medical Board. The Plaintiff was informed that this had happened after it had occurred.

392 The evidence reveals that the final report and recommendations were furnished to the New South Wales Medical Board and the University of New South Wales without prior notice to the Plaintiff.

393 That the final report and recommendations of the Review Committee had a capacity to cause significant harm to the reputation and professional standing of the Plaintiff was borne out by the prompt response of both external agencies to whom disclosure had occurred. The New South Wales Medical Board referred the matter to the Health Care Complaints Commission for investigation of the Plaintiff’s conduct for professional disciplinary purposes. The University of New South Wales raised the question as to whether the Plaintiff had engaged in research misconduct.

394 I accept that s.117A HS Act required the Defendant to provide the report and recommendations to the New South Wales Medical Board. This is a clear demonstration that what might have started as an investigation into governance issues had become, along the way, a process that made findings and recommendations suggesting professional misconduct or unsatisfactory professional conduct on the Plaintiff’s part.

395 I accept the Plaintiff’s submission that s.117A does not exclude the requirement to afford procedural fairness to the Plaintiff in the circumstances of this case, where he had a legitimate expectation that he would have an opportunity to make submissions before the report and recommendations were disclosed to any third party. There may, of course, be cases where s.117A disclosure may be appropriate without notice to the affected person to protect the integrity of any investigatory process. However, that is not this case. The Plaintiff had a clear and legitimate expectation that he would be heard before disclosure of the report to a body such as the New South Wales Medical Board, and he was not afforded that opportunity.

396 Although there was no statutory guarantee of secrecy applicable here, the principles considered by Lockhart J in Consolidated Press Holdings Limited v Commissioner of Taxation at 355 assist the Plaintiff. A legitimate and reasonable expectation arose in the present case from the features to which I have referred.

397 A decision to release the report and recommendations of the Review Committee had the potential (at the very least) to prejudice the Plaintiff’s interests, in that it was likely to affect perceptions of his integrity and injure his reputation: Johns v Australian Securities Commission at 470-471.

398 Practical injustice has resulted in this case from the failure of the Defendant to afford the Plaintiff an opportunity to be heard before disclosing the Review Committee report and recommendations to third parties.

399 In my view, this was a clear case, arising from the terms of reference and the circumstances of the matter generally, where the Plaintiff was entitled to be heard before disclosure of the report and recommendation occurred. This did not occur, and a denial of procedural fairness has resulted.

400 The Plaintiff has made good this ground for relief.

401 Before leaving this ground, I observe that the fact that the draft report was provided to Ms Kirby, who provided advice to Professor Campbell on 17 September 2008 concerning the need for the Plaintiff to be given a chance to respond, is somewhat puzzling. The Review Committee was functioning under the statutory umbrella of the HS Act, on behalf of Mr Clout, as Chief Executive of the Defendant. The provision of the draft report to the University solicitor appears to have been irregular. It might be expected that any legal advice ought to have been provided by the Defendant, or its legal advisor.

Relief

402 The Plaintiff seeks relief in the nature of certiorari quashing the report and recommendations of the Review Committee and the acceptance decision of Mr Clout of 21 November 2008. In addition, the Plaintiff seeks declarations that the Review Committee denied the Plaintiff procedural fairness, and that the Defendant denied the Plaintiff procedural fairness by Mr Clout’s acceptance decision of 21 November 2008, and the notification to the New South Wales Medical Board and the University of New South Wales of the Review Committee report and recommendations.

Submissions of Parties

403 In the event that the Plaintiff established a basis for relief, the Defendant submitted that an order in the nature of certiorari was not available to quash the report and recommendations of the Review Committee, as that report had no legal effect in and of itself. Reliance was placed upon Ainsworth v Criminal Justice Commission at 580-581 and 595; R v Collins; Ex parte ACTU Solo Enterprises Pty Limited (1976) 8 ALR 691 at 699; Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 at 148; Hot Holdings Pty Limited v Creasy (1996) 185 CLR 149 at 159, 165, 174; Police Integrity Commission v Shaw (2006) 66 NSWLR 446 at 462 [65] and [67] and Cox v Corruption and Crime Commission [2008] WASC 199 at [85].

404 The Defendant submitted that, insofar as the decision in Hot Holdings Pty Limited v Creasy may support the availability of relief in the nature of certiorari, that case may be distinguished in the circumstances of this case. The Defendant submitted that Mr Clout was not bound to take account of the Review Committee’s final report. Whilst Mr Bernard had constituted the Review Committee in order to make findings of fact and recommendations which could be taken into account by the Executive in determining its approach, there was nothing, as a matter of statute or common law, which obliged Mr Clout to take those findings or recommendations into account. Accordingly, the Defendant submitted, the Review Committee’s final report was not a precondition to the Chief Executive’s exercise of power, and thus relief in the nature of certiorari was not available to quash the report.

405 The Defendant accepted that declaratory relief would be available in these circumstances, in accordance with the principles in Ainsworth v Criminal Justice Commission.

406 The Plaintiff submitted that relief in the nature of certiorari was available in this case, in addition to declaratory relief.

407 It was submitted that the Executive of HREC referred the matter to Mr Bernard, with the recommendation that it ought be dealt with by a small committee established to review it. Mr Bernard agreed to do so. The Review Committee was established pursuant to Mr Clout’s power under s.29B HS Act. Mr Clout delegated power to the Review Committee to making findings and recommendations to Mr Bernard, on the basis of which he would give advice to Mr Clout. The Plaintiff submitted that, impliedly, the Review Committee had power to determine the matters contained in its terms of reference, and was confined by those terms of reference.

408 The Plaintiff submitted that Hot Holdings Pty Limited v Creasy supported the availability of relief in the nature of certiorari in this case. It was submitted that other decisions to which the Defendant referred did not assist on this point, and that the question fell to be determined by reference to the principles in Hot Holdings Pty Limited v Creasy.

Decision

409 I have found that the Plaintiff was denied procedural fairness in a number of respects, in the processes under consideration in these proceedings.

410 It has been observed that a decision made contrary to procedural fairness is void, although it may have some effect or existence in law until declared void by a competent body or court: Calvin v Carr [1979] 1 NSWLR 1 at 8; Ong at 118, 140.

411 I consider that Hot Holdings Pty Limited v Creasy supports the Plaintiff’s submissions in this case. The Court must ask whether the report or recommendations operate as a precondition, or as a bar to a course of action, or as a step in a process capable of altering rights, interests or liabilities: Hot Holdings Pty Limited v Creasy at 162. The critical question is whether the ultimate decision maker may lawfully ignore the recommendations, or whether he is obliged to take them into account. A preliminary decision or recommendation, if it is one to which regard must be paid by the final decision maker, will have the requisite legal effect upon rights to attract certiorari: Hot Holdings Pty Limited v Creasy at 165.

412 I accept the Plaintiff’s submission that Mr Clout, as the Chief Executive of the Defendant, had a legal obligation to take into account the report and recommendations made by the Review Committee. The Review Committee was not analogous to a corruption investigation tribunal or royal commission, whose recommendations could be ignored by the Executive Branch. Rather, the Review Committee had been established by Mr Clout in the exercise of his power under s.29B HS Act. Having established a Review Committee, and provided it with its terms of reference, Mr Clout was bound to take into account its report and recommendations, as a relevant consideration in the sense described in Peko-Wallsend and the authorities referred to at [341] above. If he ignored the report and recommendations of the Review Committee, Mr Clout would fail to take into account a relevant consideration which he was bound to take into account. I accept the Plaintiff’s submission that this kind of legal obligation, derived from Peko-Wallsend and construction of the HS Act, is precisely the kind of legal obligation which the majority had in mind in Hot Holdings Pty Limited v Creasy at 173-175.

413 I do not consider that the other authorities relied upon by the Defendant assist the resolution of this question, in the factual circumstances of this case and the statutory scheme arising under the HS Act.

414 Accordingly, I am satisfied that relief in the nature of certiorari is available in the circumstances of this case. The Review Committee report had the requisite legal effect upon the Plaintiff’s rights to attract certiorari. The decision of Mr Clout on 21 November 2008 to accept the Review Committee’s report and to implement its recommendations was the ultimate and operative decision which affected the Plaintiff’s rights directly. It had the requisite legal effect upon the Plaintiff’s rights so as to attract certiorari.

415 Relief in the nature of certiorari and declaratory relief are discretionary remedies. It is neither possible nor desirable to fetter the power to grant declaratory relief by laying down rules as to the manner of its exercise: Ainsworth v Criminal Justice Commission at 581-582.

416 The Plaintiff has established a foundation for the grant of relief in the nature of certiorari and declaratory relief. I do not consider that there is any proper discretionary basis for declining to grant the Plaintiff such relief.

Conclusions and Orders

417 The Plaintiff sought relief in this Court upon a variety of grounds arising from the Defendant’s processes, by which he was affected between April and December 2008. He has succeeded in his claim for relief on some grounds, but not others.

418 Put shortly, the Plaintiff has demonstrated an entitlement to relief upon the grounds that:

(a) there was a reasonable apprehension of bias arising from the involvement of Professor Robyn Ward in the establishment and decision-making process of the Review Committee, in circumstances where she was the instigator of that process and an “accuser” of the Plaintiff;

(b) there was a reasonable apprehension of bias by prejudgment, in that an independent observer might reasonably apprehend that Professor Terry Campbell might not be open to persuasion on the issues for decision by the Review Committee;

(c) there was a denial of procedural fairness by the Review Committee, as a result of its failure to disclose to the Plaintiff, before issuing its final report and recommendations, the Serva material which had been obtained by the Review Committee between 8 and 20 October 2008;

(d) there was a denial of procedural fairness by Mr Bernard and Mr Clout, in failing to provide the Plaintiff with the Serva material, and an opportunity to respond to it, before a decision was made on 21 November 2008 to accept the findings and recommendations of the Review Committee;

419 At the beginning of this judgment (at [2]), I said that it is important to observe what is, and what is not, determined in these proceedings. The issues raised in this case concern administrative processes undertaken with respect to the Plaintiff, and determination of his complaint that these processes did not comply with the requirements of the law. These proceedings do not address the medical and scientific merits of the Plaintiff’s research concerning diabetes, nor the efficacy of that research.

420 I have determined, however, that there were significant shortcomings in the processes adopted by the Defendant with respect to the Plaintiff in 2008, with a consequence that practical injustice has resulted. The Plaintiff contended that reasonable apprehension of bias had been demonstrated at several points in the process, and I have upheld that submission in various respects. None of those involved in the Review Committee, in its establishment and in the decision to accept its report and recommendations and to disseminate its findings, gave evidence in the proceedings before me. For the purpose of determining the Plaintiff’s claim for relief, I was not required to make a finding, nor have I made a finding, that any person acted with malice or impropriety directed towards the Plaintiff. The findings which I have made arise from application of the principles of administrative law and, in particular, the reasonable observer test, to the processes affecting the Plaintiff in 2008.

421 I am satisfied that it is open to the Court to grant relief in the nature of certiorari together with declaratory relief, in the circumstances of this case.

422 With respect to costs, the Plaintiff has succeeded substantially in his claim for relief upon a number of grounds. However, many grounds were pressed and several were rejected. In all the circumstances, I have in mind ordering the Defendant to pay 80% of the Plaintiff’s costs of the proceedings. However, as the question of costs was not the subject of argument at the hearing, if either party wishes to make application for a different costs order on application to my Associate within seven days, I will vacate the order for costs and make such orders as I consider appropriate, after considering such submissions as the parties wish to make on the question of costs.

423 I make the following orders and declarations:

(a) I declare that in making the report and recommendations made on 20 October 2008 (“the Review Committee Report”) by the Diabetes Transplant Unit Review Committee appointed by the Defendant pursuant to ss.24 and 29B Health Services Act 1997 (“the Review Committee”), the Review Committee of the Defendant denied the Plaintiff procedural fairness;

(b) I make an order in the nature of certiorari quashing the Review Committee Report;

(c) I declare that the decision of Mr Terry Clout, the Chief Executive of the Defendant on 21 November 2008 to accept the Review Committee Report and to implement its recommendations (“the Acceptance Decision”) denied the Plaintiff procedural fairness;

(d) I make an order in the nature of certiorari quashing the Acceptance Decision;

(e) I declare that, in notifying in November and December 2008 the University of New South Wales and the New South Wales Medical Board of the Review Committee Report and the Acceptance Decision, the Defendant denied the Plaintiff procedural fairness;

(f) the Defendant is to pay 80% of the Plaintiff’s costs of the proceedings;

(g) the order for costs may be vacated on application made by either party to my Associate within seven days, in the event of which I will determine the appropriate procedure for taking submissions from the parties on the question of costs.

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08/12/2009 - Incorrect case name. - Paragraph(s) 387

CITATION:	Tuch v South Eastern Sydney and Illawarra Area Health Service [2009] NSWSC 1207 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	27 April 2009, 28 April 2009, 29 April 2009
JUDGMENT DATE :	12 November 2009
JUDGMENT OF:	Johnson J at 1
DECISION:	1. It is declared that in making the report and recommendations made on 20 October 2008 (“the Review Committee Report”) by the Diabetes Transplant Unit Review Committee appointed by the Defendant pursuant to ss.24 and 29B Health Services Act 1997 (“the Review Committee”), the Review Committee of the Defendant denied the Plaintiff procedural fairness. 2. An order is made in the nature of certiorari quashing the Review Committee Report. 3. It is declared that the decision of Mr Terry Clout, the Chief Executive of the Defendant on 21 November 2008 to accept the Review Committee Report and to implement its recommendations (“the Acceptance Decision”) denied the Plaintiff procedural fairness. 4. An order is made in the nature of certiorari quashing the Acceptance Decision. 5. It is declared that, in notifying in November and December 2008 the University of New South Wales and the New South Wales Medical Board of the Review Committee Report and the Acceptance Decision, the Defendant denied the Plaintiff procedural fairness. 6. The Defendant is to pay 80% of the Plaintiff’s costs of the proceedings. 7. The order for costs may be vacated on application in the event that either party seeks a different costs order.
CATCHWORDS:	ADMINISTRATIVE LAW - claim for certiorari and declaratory relief - clinical trial of transplantation of encapsulated human islets into people with diabetes - plaintiff in charge of clinical trial - clinical trial suspended - chief executive of Area Health Service establishes Review Committee under ss.24 and 29B Health Services Act 1997 - Review Committee to review suspension of clinical trial and to report and make recommendations - Review Committee report makes serious criticisms of plaintiff - chief executive accepts report and implements recommendations - report provided to third parties - application to quash report and decision of chief executive to accept report and to provide it to third parties - claim of denial of procedural fairness - apprehended bias - claim that persons were acting as both accusers and decision makers - prejudgment - claim upheld in part - whether certiorari available to quash report and acceptance decision - relief in nature of certiorari and declaratory relief granted
LEGISLATION CITED:	Supreme Court Act 1970 Health Services Act 1997 Health Care Complaints Act 1993 Medical Practice 1992
CATEGORY:	Principal judgment
CASES CITED:	Roos v Director of Public Prosecutions (NSW) (1994) 34 NSWLR 254 Stollery v Greyhound Racing Control Board (1972) 128 CLR 509 Rendell v Release On Licence Board (1987) 10 NSWLR 499 Re Macquarie University; Ex parte Ong (1989) 17 NSWLR 113 Webb v The Queen (1994) 181 CLR 41 Johnson v Johnson (2000) 201 CLR 488 Ebner v Official Trustee (2000) 205 CLR 337 Re JRL; Ex parte CJL (1986) 161 CLR 342 Hall v New South Wales Trotting Club Limited (1977) 1 NSWLR 378 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 Musumeci v Attorney General of NSW (2003) 57 NSWLR 193 Commissioner of Corrective Services v Government & Related Employees Appeal Tribunal [2004] NSWCA 291 Greyhound Racing NSW v Cessnock & District Agricultural Association [2006] NSWCA 333 White v Ryde Municipal Council [1977] 2 NSWLR 909 McGovern v Ku-Ring-Gai Council [2008] NSWCA 209; 251 ALR 558 Balmain Association Inc v Planning Administrator for the Leichhardt Council (1991) 25 NSWLR 615 Kioa v West (1985) 159 CLR 550 Carver v Law Society of NSW (1998) 43 NSWLR 71 Hedges v Australasian Conference Association Limited [2003] NSWSC 1107 Graham v Baptist Union of New South Wales [2006] NSWSC 818 Roylance v General Medical Council (No. 2) [2000] 1 AC 311 Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 R v Lusink; Ex parte Shaw (1980) 2 ALR 47 Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88 Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 Minister for Immigration and Multicultural Affairs v Yusuf [2001] 206 CLR 323 Saville v Health Care Complaints Commission [2006] NSWCA 298 State of South Australia v O’Shea [1987] 163 CLR 378 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 Johns v Australian Securities Commission (1993) 178 CLR 408 Consolidated Press Holdings Limited v Federal Commissioner of Taxation (1995) 57 FCR 348 R v Collins; Ex parte ACTU Solo Enterprises Pty Limited (1976) 8 ALR 691 Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 Hot Holdings Pty Limited v Creasy (1996) 185 CLR 149 Police Integrity Commission v Shaw (2006) 66 NSWLR 446 Cox v Corruption and Crime Commission [2008] WASC 199 Calvin v Carr [1979] 1 NSWLR 1
PARTIES:	Bernard Edward Tuch (Plaintiff) South Eastern Sydney and Illawarra Area Health Service (Defendant)
FILE NUMBER(S):	SC 30009/09
COUNSEL:	Mr J Simpkins SC; Ms M Allars (Plaintiff) Ms NL Sharp (Defendant)
SOLICITORS:	Harris Freidman Hyde Page (Plaintiff) Bartier Perry (Defendant)