Appanna v Anglesea Hospital Limited - [2019] NZHC 474

ORDER PROHIBITING PUBLICATION OF NAMES OR IDENTIFYING PARTICULARS OF THE PATIENTS OF DR APPANNA DISCUSSED IN THIS JUDGMENT.

ORDER PROHIBITING SEARCH OF THE FILE WITHOUT THE LEAVE OF A HIGH COURT JUDGE.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-1794

[2019] NZHC 474

BETWEEN
NALENDRA APPANNA

Plaintiff

AND

ANGLESEA HOSPITAL LIMITED

Defendant

AND

NEW ZEALAND PRIVATE SURGICAL HOSPITALS ASSOCIATION INC

Intervenor

Hearing: 30 April, 1, 2, 3, 4, 7, 8, 9, 10 May 2018

Appearances:

A H Waalkens QC & A L Sweeney for Plaintiff M J Fisher & K J Ng for Defendant

J P Coates & C E J Deans for Intervenor

Judgment:

18 March 2019

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 18 March 2019 at 4:00 pm Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
DLA Piper, Auckland Kemps Weir, Auckland
Claro Health Sector Lawyers

APPANNA v ANGLESEA HOSPITAL LTD [2019] NZHC 474 [18 March 2019]

Introduction

[1] The plaintiff, Dr Nalendra Appanna,1 is a registered health practitioner, vocationally registered with the Medical Council of New Zealand as an obstetrician and gynaecologist (O & G). Between 2007 and 2016 he was credentialed and approved by the defendant, Anglesea Hospital Ltd (Anglesea), to undertake surgical procedures upon his own patients at Anglesea’s hospital in Hamilton. Pursuant to the credentialing arrangement he regularly conducted surgical procedures at the hospital using the facilities provided by Anglesea and assisted by its theatre nursing staff.2

[2] On 29 March 2016, Anglesea, acting on a recommendation from its Clinical Risk Management Committee (the CRMC), and without having afforded Dr Appanna an opportunity to be heard, suspended his credentialing status, pending a review by its Credentialing Committee and an external clinical review.

[3] On 6 October 2016, Dr Appanna obtained an injunction from this Court which ordered Anglesea to immediately reinstate his credentialing status. Dr Appanna says that while Anglesea did reinstate his credentialing status, it imposed conditions requiring another surgeon to be present during any surgical procedures conducted by him, and furthermore failed to provide the appropriate nursing staff support necessary to enable him to conduct surgery.

[4] Dr Appanna claims that as a consequence of his suspension, the conditions imposed by Anglesea relating to his performance of surgical procedures, and Anglesea’s failure to provide appropriate nursing staff to assist him, he has suffered irreparable harm to his professional reputation, and significant financial losses.

[5] Dr Appanna alleges that Anglesea has acted in breach of the contract entered into between the parties relating to their respective credentialing obligations or alternatively breach of fiduciary duty, entitling him to declarations and damages. He initially also sought a judicial review of Anglesea’s decision to suspend his

1 Dr Appanna is commonly referred to as “Naylin” in the various pieces of correspondence between himself, Anglesea and third parties.
2 The word “credentialing” is frequently spelled “credentialling” in the documents and correspondence referred to in this judgment.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NZHC 474
Decision Date: 18 March 2019

CaseChat Overview and Summary

Dr Nalendra Appanna brought an action against Anglesea Hospital Limited, a private hospital in Hamilton, seeking damages for breach of contract and breach of fiduciary duty. Dr Appanna was a registered health practitioner credentialed by Anglesea to undertake surgical procedures at its hospital. He claimed that Anglesea had acted in breach of the contract entered into between the parties relating to their respective credentialing obligations, or alternatively in breach of a fiduciary duty, and sought declarations and damages. Anglesea denied that a contract had been formed or entered into between the parties relating to Dr Appanna’s credentialing status, and also denied the existence of a fiduciary relationship between them. The court found that a contract had been formed between Dr Appanna and Anglesea, and that Anglesea had breached that contract by failing to notify Dr Appanna that it had conducted an internal audit of his surgical operations during 2016, and again when it failed to notify Dr Appanna of the formation of the Credentialing Committee to review his credentialing status and provide him the opportunity to appear before it. The court found that Anglesea further breached the contract between them when it suspended Dr Appanna’s credentialed status. The court found that Anglesea continued to breach its contract, throughout the duration of Dr Appanna’s suspension, by failing to act promptly to arrange an external review of the grounds and justification for the suspension. The court found that the breaches caused financial damage to Dr Appanna, during the term of the suspension, by preventing him from earning income by performing surgical procedures at Anglesea, and for a period afterwards until the second Credentialing Review, by causing damage to his reputation that resulted in a reduction of income. The breaches also caused general damage to Dr Appanna in the form of stress and anxiety. The court found that no fiduciary relationship existed, in any capacity, between Anglesea and Dr Appanna. The court entered judgment for Dr Appanna and awarded him damages for breach of contract by Anglesea in the sums of $401,461 for actual loss of income during the period 30 March 2016 to 6 October 2016, caused by the suspension of Dr Appanna’s credentialing; $179,000 for loss of income during the period 7 October 2016 to 31 December 2017, caused by the damage to Dr Appanna’s reputation consequential on the suspension of his credentialing; and $25,000 for general damages caused by stress and anxiety. Dr Appanna was entitled to costs on a 2B basis.

Orders