Appanna v Anglesea Hospital Limited
[2016] NZHC 3172
•6 October 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-1794 [2016] NZHC 3172
BETWEEN NALENDRA APPANNA
Plaintiff
AND
ANGLESEA HOSPITAL LIMITED Defendant
Hearing: 3 October 2016 Appearances:
A H Waalkens QC and B M Moore for the Plaintiff
M Fisher and K J Ng for the DefendantJudgment:
6 October 2016
Reasons:
21 December 2016
JUDGMENT OF WOODHOUSE J
This judgment was delivered by me on 21 December 2016 at 11:00 a.m. pursuant to r 11.5 of the High Court Rules 1985.
Registrar/Deputy Registrar
……………………………………
Solicitors / Counsel:
Mr A H Waalkens QC, Barrister, Auckland
Mr S O’Sullivan (plaintiff ’s instructing solicitor), DLA Piper, Solicitors, Wellington
Mr M J Fisher, Barrister, Auckland
Mr P Kemps (defendant’s instructing solicitor), Kemps Weir Lawyers, Solicitors, Auckland
APPANNA v ANGLESEA HOSPITAL LTD [2016] NZHC 3172 [21 December 2016]
[1] The plaintiff, Dr Appanna, applied for an interim injunction, seeking mandatory orders, arising out of suspension of his “credentialing” to conduct surgery at the defendant’s hospital. The suspension, made without any prior notice to Dr Appanna, was on the basis that there was evidence giving rise to concern about patient safety.
[2] Having received comprehensive written and oral submissions, and after reviewing the evidence, I made the order sought, as follows:1
The defendant shall immediately reinstate the plaintiff’s credentialing status and operating privileges at Anglesea Hospital, Knox Street, Hamilton, pending further order of this Court.
[3] The order was made without recording my reasons. These are my reasons.
Outline of claims and contentions
[4] In his substantive claim Dr Appanna advances three alternative causes of action against the defendant. I will refer to the defendant, and to the hospital itself, as Anglesea. Dr Appanna claims that Anglesea breached a contractual agreement with him, that Anglesea is in breach of fiduciary duties owed to him, and that he is entitled to relief on an application for judicial review.
[5] Anglesea, in its written submissions on this application, appeared to contend that there was no contract between Dr Appanna and Anglesea relevant to this application.2 However, Mr Fisher, for Anglesea, acknowledged in his oral submissions that there is a contract, but breach is denied. Anglesea also denied that the relationship between the parties gave rise to fiduciary duties owed by Anglesea to Dr Appanna, and denied that any decisions made by Anglesea can be subject to
judicial review.
[6] The parties followed the conventional approach to applications for interim injunctions.3 The first enquiry is whether there is a serious question to be tried on
1 Appanna v Anglesea Hospital Ltd [2016] NZHC 2378.
2 Dr Appanna was an Anglesea shareholder and there was a shareholders’ agreement. This has no
relevance.
3 American Cyanamid co v Ethicon Ltd [1975] AC 396, [1975] 1 All ER 504 (HL).
the plaintiff’s claims. Dr Appanna contended that this was for two reasons: the process leading to his suspension and following it was fundamentally flawed, and the evidence established that there was no patient safety risk justifying his suspension. Anglesea contested those contentions.
[7] The second stage of the enquiry is to assess where the balance of convenience lies; in essence, a provisional assessment of the consequences to Dr Appanna of not granting the injunction weighed against the consequences to Anglesea of granting it. The interests of third parties may also be relevant, on both sides of this enquiry.
[8] On the balance of convenience Dr Appanna advanced two main arguments. The first was that his professional reputation had been harmed in a substantial way, and the extent of the harm was increasing with continued delays by Anglesea in reinstating him. He contended that damages would not be an adequate remedy. The second argument was that there was no evidence of any material risk for Anglesea if Dr Appanna was reinstated because there was no evidence of risk to Dr Appanna’s patients.
[9] The primary argument for Anglesea on the balance of convenience was that, even if obligations owed to Dr Appanna were arguably breached by the suspension, which was denied, the consequences, including any harm to reputation, would be cured by a credentialing review that Anglesea intended to undertake.4 Anglesea also submitted that damages payable by Anglesea would be a fully adequate remedy for Dr Appanna, so that an injunction was not required.
Factual background
[10] Dr Appanna is a registered medical practitioner. He qualified with an MBChB in 1984, and has further, specialist qualifications. Since May 1996 he has practiced as an obstetrician and gynaecologist, specialising in laparoscopic surgery. The focus of Dr Appanna’s work is surgery in private hospitals which necessarily
require contracts with the private hospitals concerned.
4 The word “credentialing” is spelt “credentialling” – that is, with a double “l” – in numbers of the documents, but not consistently. For convenience, the spelling has been standardised throughout, including the spelling in documents.
[11] The first contract between Dr Appanna and Anglesea was made in October
2007. This arose from Anglesea’s acceptance of Dr Appanna’s credentialing application to Anglesea, for a term of five years. The contract was renewed for a further five years when Anglesea accepted Dr Appanna’s second credentialing application, made in November 2013.
[12] Dr Appanna performed operations, and was entitled to perform operations, at Anglesea until 30 March 2016. On that date he was informed by Anglesea’s chief executive officer, Ms Nicola van Praagh, without any prior notice, that his credentialing, as it is referred to, had been suspended. In other words, his right to carry out operations on his patients at Anglesea Hospital was summarily suspended.
[13] The process that led to the suspension was as follows. Anglesea’s clinical risk management committee met on 23 March 2016.5 The purpose of the meeting was to consider three cases which had been referred to Ms van Praagh. These concerned operations carried out by Dr Appanna at Anglesea. The committee consisted of Drs Torrance and Ravikanti. Ms van Praagh was in attendance, but the extent of her participation is not clear. Dr Singh was also present. Dr Ravikanti and
Dr Singh had each referred, or been involved in referral, of two of the three cases brought to Ms van Praagh’s attention. The risk management committee referred all three cases to Anglesea’s credentialing committee.
[14] The credentialing committee met on 29 March. The members of the committee were Drs Moaveni, Schuitemaker and Torrance. Ms van Praagh was in attendance. Drs Ravikanti and Singh also attended for what Ms van Praagh described as “expert advice on gynaecological matters”. The short minutes of the meeting are as follows:
The credentialing committee was asked to review concerns raised by the
Clinical Risk Management Committee (CRMC). These were as follows
1) An event form was submitted documenting an incident where the operation deviated significantly from the consent obtained pre- operatively from the patient.
5 All of the following dates are in 2016.
2) Our internal audit has suggested a disproportionately high rate of major complications in Mr Appanna’s surgery. On review there were 3 cases that required readmission and reoperation with significant morbidity out of a total of 20 major cases performed this year (15%).
3) The head of Obstetrics & Gynaecology at Waikato Hospital verbally raised serious concerns about the clinical management of the two cases that were admitted to Waikato Hospital and asked that these be reviewed. A review of these cases suggests significant deficiencies in care.
The CRMC agrees that this pattern of practice raises significant patient safety concerns.
The Credentialing Committee recommends therefore that an impartial external review of Mr Appanna’s practice is obtained and in view of patient safety that his operating privileges be suspended effective immediately, pending the outcome of this review.
Nicky [Ms van Praagh] to refer this to the Board.
An MOU between Anglesea Hospital and the NZ Medical Council dictates that the medical council be notified of this decision.
Nicky to seek legal advice and to arrange external review.
[15] On 30 March Dr Appanna was phoned by Ms van Praagh at the end of the day and asked urgently to attend a meeting with her. She gave no reason. At this point Dr Appanna had had no notice from Anglesea that it had any concerns in respect of patient safety.
[16] Dr Appanna met Ms van Praagh at the hospital. Ms van Praagh was the only person present. She handed Dr Appanna a letter dated 29 March. This referred to the meeting of the clinical risk management committee and said that that committee had referred particular “clinical concerns” to the credentialing committee. Reference was made to “three major complications” without any identifying particulars (although Dr Appanna realised what cases were being referred to). There was also reference (as there had been in the credentialing committee minutes) to concerns that in an operation Dr Appanna had “deviated significantly from the procedure on the consent form”. There were no particulars of this. The letter concluded:
In light of these concerns the Credentialing Committee has decided that an impartial external review of these issues should be performed and that to protect patient safety your operating privileges are to be suspended, effective immediately, pending the outcome of this review.
[17] Dr Appanna said in his principal affidavit:
I asked Mrs van Praagh if I could meet with the Committee urgently to discuss this decision. She told me that this was not possible. I asked her for the detail and reasons for their decision, and expressed my complete surprise. I also enquired as to the composition of the Committee and was told that I was not entitled to this information.
No discussion ensued. She provided no further information apart from informing me that they would be undertaking an impartial review of the issues raised in the letter and that they would be getting a specialist from Auckland to do this.
There was no challenge to this evidence.
[18] At this meeting Ms van Praagh raised another matter with Dr Appanna. This related to the fact that Dr Appanna was no longer performing surgery at another private hospital in Hamilton, Southern Cross. This is a matter given some emphasis by Anglesea on the present application, but it is not a matter recorded in the minutes of the credentialing committee leading to the suspension.
[19] On 8 April Dr Appanna sent a detailed email to Ms van Praagh setting out his concerns in relation to what had occurred and responding in detail in respect of the three patient cases which had led to his suspension. After setting out his views on the three cases, and more general information relating to his competence, he said:
With the cases in question, if each case were considered individually, it becomes apparent that there were complications that would have occurred with any surgeon and that it is just unfortunate that they occurred in such a short period of time.
[20] On 23 April Dr Appanna sent to Anglesea, by email directed to Ms van Praagh, two opinions Dr Appanna had obtained from gynaecologists in respect of the three cases. One is from Professor Neil Johnson. Professor Johnson is a gynaecologist and fertility specialist in Auckland. He is the Honorary Associate Professor of Reproductive Medicine and Obstetrics and Gynaecology at the University of Auckland. He is the president elect of the World Endometriosis Society. The other report is from Mr Tal Jacobson. Mr Jacobson is a consultant obstetrician and gynaecologist at Mater Hospital, Brisbane where he is the clinical
lead for gynaecology. He is also a director of a group private practice that delivers gynaecology, fertility and obstetric services.
[21] The conclusions in both reports are contrary to the statement in Anglesea’s letter to Dr Appanna of 29 March that “there was potentially significant risk to patient safety”. The experts said that the complications encountered were ones commonly encountered. Professor Johnson also said that “there are no similarities between these complications to suggest a systemic departure from accepted practice as contributory”.
[22] On 26 April Anglesea, pursuant to a memorandum of understanding between it and the New Zealand Medical Council, formally notified the Council that Dr Appanna’s “operating privileges” had been suspended.6 Anglesea had given informal notice shortly before.
[23] The next day the Medical Council requested from Anglesea “detailed information … regarding the circumstances or incidents that have occurred”. This request was in an email. The email, following the general request, set out in some detail a range of information sought by the Council. Towards the end of the email there is the following:
Essentially we request detailed information from complainants in order to ensure that the doctor is able to provide an informed response to Council regarding the concerns raised. Furthermore, it is important that when Council considers the concerns and the doctor’s response, and decides what further action, if any, is required, they are also fully informed as to what the concerns are, what led to the concerns and any action that the doctor’s place of work has taken since the incident/concerns were raised.
[24] On 28 April Dr Appanna met Ms van Praagh at her office. Ms van Praagh told Dr Appanna that the Medical Council had been notified. She said that Anglesea had not commenced an independent review, as she had previously said would happen, because Anglesea had decided that it would now wait until the Medical Council had considered the issues Anglesea had raised. Dr Appanna again requested
a meeting with the credentialing committee. The following day Ms van Praagh
6 The memorandum of understanding is described below at [40].
advised Dr Appanna that she would inform the credentialing committee of Dr
Appanna’s wish to meet with them. No meeting with the committee was arranged.
[25] On 4 May Dr Appanna’s solicitors wrote to Anglesea requesting that it lift the interim suspension, or alternatively that an urgent meeting be convened. Anglesea’s response, on 6 May, was:
We are dealing with this matter, as we are required to do, under the guidance of the Medical Council. We have provided some further information to the Council today which we hope will enable the Council to progress their advice to us.
[26] There was a further pressing letter from Dr Appanna’s solicitors, on 10 May. Anglesea’s reply on 11 May included advice that the Medical Council “is now charged with the responsibility to review the matter and make a decision as how best to proceed”. Anglesea concluded:
Until the Medical Council has conducted its review and given us the advice we now, we are simply not able to accede to the request that has been made.
[27] Anglesea also said that it had provided further information to the Medical Council and that it knew that Dr Appanna had a right to provide to the Medical Council an informed response to the matters raised by Anglesea. There is no evidence of any request from Anglesea to the Medical Council to have an opportunity to respond to any information provided by Dr Appanna.
[28] On 24 June the Medical Council, through its deputy registrar, sent an email to Ms van Praagh, with copies to Dr Appanna and Dr Appanna’s solicitor, clarifying a letter from an employee of the Council on 23 June. The deputy registrar said:
To further clarify Council’s position, Council considered all of the information provided by Anglesea Hospital (attached) and Dr Appanna’s submissions at its meeting on 14 and 15 June 2016. Council did not consider that the information raised any concerns about public health and safety. Council decided there were no grounds at present to limit or restrict Dr Appanna’s practice. Council further resolved to request the outcome of Southern Cross Hospital’s investigation prior to making a final decision about Dr Appanna’s case.
We acknowledge of course that Council has no role in Anglesea’s business decisions but do wish to make it clear that Council has no reasons for concern about the safety of Dr Appanna’s practice at present.
Please contact me if you have any questions.
[29] On 26 June Dr Appanna’s solicitor sent an email to Ms van Praagh noting advice from Ms van Praagh that the credentialing committee was unable to meet until the following week, with a hope expressed that that would be early enough for Dr Appanna to continue with his list on 28 June. The email was sent on a Sunday, which of itself indicated the urgency from Dr Appanna’s perspective. Reference was made to three patients of Dr Appanna on the list, and difficulties they had experienced with delays, and to another patient with a suspected malignancy. Dr Appanna had referred to similar difficulties he faced when he was confronted with the suspension on 30 March. The email from Dr Appanna’s solicitor continued:
The Medical Council appreciated the urgency hence the deputy registrar was prepared to send you the letter confirming that they have no concerns with [Dr Appanna] continuing to operate.
We would have thought that in view of the history of this matter, the fact that the committee has already debated it … and the clarity of the position taken by the Medical Council that an urgent meeting or telephone conference can be arranged to ensure that [Dr Appanna’s] patients are not denied their treatment yet again.
[30] A further email on Monday, 27 June, from Dr Appanna’s solicitor to Ms van Praagh, again referred to Dr Appanna’s theatre list scheduled for the following morning. The solicitor stated that Dr Appanna had booked the list on the basis that both Ms van Praagh and Mr V P Singh had assured Dr Appanna that, if the Medical Council gave him the go ahead, then he would be allowed to commence operating.
[31] Anglesea’s response was in a letter of 27 June. The letter is from Ms van
Praagh. She said:
No assurances of any kind have been given to Dr Appanna that he may expect his suspension to be lifted. On the contrary I have made clear that the credentialing committee would have to meet to consider its position and make a decision on that question. We will not take responsibility for Dr Appanna making assumptions as to the outcome of that process or the timeframe within which it can occur.
The Medical Council gave their advice in writing that there was not enough evidence to make a decision regarding concerns expressed, and that it resolved to defer consideration of Dr Appanna’s case until it has received further detailed information from Southern Cross Hospital. By email late on Friday 24 June I was subsequently advised by the Medical Council that
although there were no grounds at present to limit or restrict Dr Appanna’s
practice the matter is still open until further information is received.
The Credentialing Committee has met urgently this afternoon to consider its position.
The suspension remains in place. This will be reviewed when the Medical Council has made a final decision on Dr Appanna’s case following receipt of information from Southern Cross.
[32] On 1 July a further and very detailed letter was sent by Dr Appanna’s solicitors to Anglesea. The response, for the first time, was from Anglesea’s lawyers, in a letter of 5 July. There was no shift in Anglesea’s position. Anglesea’s solicitors said:
It is in all parties’ interests that the Medical Council’s investigation process be completed as early as possible. However, while the investigation is ongoing our client is simply not in a position to make a final decision as to Dr Appanna’s credentialing nor can it withdraw the suspension.
[33] On 12 August Anglesea’s solicitors wrote to Dr Appanna’s solicitors. They recorded their understanding that the Medical Council would shortly release its decision and that Anglesea would then refer the decision to Anglesea’s credentialing committee. They stated that this was so that the committee could “get on with organising a review of the matters identified in [Anglesea’s] letter dated 29 March
2016, the matters the subject of [the Medical Council’s] forthcoming decision, and any other matters relevant to Dr Appanna’s credentialing review”. They referred to Mr John Tait as the person who would be the independent member of the committee. They then recorded the procedure for the review. This was not put as a proposed procedure, for discussion with Dr Appanna.
[34] On 19 August the Medical Council notified Dr Appanna and Anglesea of its final decision. This was based on information obtained from Southern Cross Hospitals, as well as the information supplied earlier by Anglesea and Dr Appanna. The decision and reasons, as recorded in the letter that went to Anglesea, were as follows:
Having considered all of the information before it, including Dr Appanna’s responses, Council resolved to take no further action at this time regarding the concerns raised by Anglesea and Southern Cross Hospitals.
The reasons for the Council’s decision are that:
·Council has no information before it that raises concerns about Dr Appanna’s practice of medicine, therefore Council has no grounds to consider taking any action.
· The audit information submitted by Dr Appanna further reassures
Council as to his competence to practise.
·Neither Anglesea Hospital nor Southern Cross Hospital has provided any information to Council that raises concerns about Dr Appanna’s competence to practice medicine, or his professional conduct.
[35] There were further communications between the lawyers. The essence of the position taken for Dr Appanna was that the suspension of Dr Appanna “should be immediately rescinded”. The essence of the response for Anglesea was that the credentialing review should proceed and there were requests, as there had earlier been, for Dr Appanna to nominate suitable dates for the review hearing. Issues between the parties, through their lawyers, as to the procedure for the review and the persons who should sit on the review committee, were not resolved and, at the date of the hearing of the present application, had not been resolved.
Factual background: documents
[36] Although it is not in issue that there is a contract between the parties, there is no written agreement between them setting out in a single document the terms of their arrangement. There are four documents referred to by both counsel, which either record, directly or by cross-reference, express terms relied on by one or other of the parties, or which provide the foundation for Dr Appanna’s argument that there has been breach of contract, breach of fiduciary duties, and judicially reviewable error. I will provide an outline of the four documents.
The credentialing applications and agreements
[37] The credentialing applications are those submitted by Dr Appanna on Anglesea’s standard forms in 2007 and 2013, and accepted by Anglesea. The main relevance of the credentialing applications is two-fold. First, they record directly, or indirectly by reference to other documents, the terms of the agreement between the parties. Second, there is an express statement bearing on the fiduciary relationship claim. It is as follows:
As you are applying to practise in a position of professional responsibility on [Anglesea] premises, it is important that there is a high degree of trust and confidence in our relationship.
Anglesea’s practising guide
[38] The second document is Anglesea’s “Credentialing and Scope of Practice Guide”. This was incorporated into the arrangement between the parties through a provision in the credentialing application. Anglesea’s practice guide records that Anglesea has adopted a credentialing programme consistent with the programme in a framework document published by the Ministry of Health, which is referred to next. The practice guide, under a heading “Legislation/Regulations”, refers to the Ministry of Health framework and the Health Practitioners Competence Assurance Act 2003.
The Ministry of Health framework
[39] The Ministry of Health framework was published in 2010, updating a framework published in 2001. It is entitled The Credentialing Framework for New Zealand Health Professionals. The current framework applies “to all health professionals in New Zealand, health and disability services, both public and private”. The document records that, while “a standardised approach is desirable, at this stage of development, and given the changes proposed, this document can provide guidance only”. The framework records seven principles, and explains these in some detail, and all but one of those principles has been expressly adopted by Anglesea. Relevant aspects of the principles are noted in my evaluation.
The memorandum of understanding
[40] The fourth document is entitled Medical Council of New Zealand and Participating NZ Private Surgical Hospitals – Memorandum of Understanding. Anglesea is a party to this memorandum of understanding. The memorandum records the purpose of the document as follows, with the Medical Council referred to as “MCNZ” and participating private surgical hospitals as “PPSH”:
Purpose
The purpose of the MoU is to enable the MCNZ and the PPSH to clarify their respective roles and responsibilities (refer Appendix 1) and the objectives and intentions of the parties (refer Appendices 3 and 4) related to:
•the regulation of doctors in New Zealand, including the management of any competence, performance, conduct and health issues;
• the credentialing of self employed doctors to practice in PPSHs;
• the context for the operation of the MoU; and
• how the PPSH and the MCNZ intend to interact with each other.
This document is not intended to create binding legal obligations, but it sets out the behaviours that the parties expect of each other in discharging their respective functions. The parties to this MoU will use all reasonable endeavours to meet their responsibilities under this memorandum.
Evaluation: a serious question to be tried?
Causes of action
[41] As recorded in the introduction, Dr Appanna’s claims are founded on contract, fiduciary obligations, and judicially reviewable error. Anglesea accepted that there is a contract between the parties, but denied that it owed fiduciary obligations or that its actions could be subject to judicial review.
[42] I am satisfied that it is seriously arguable that Anglesea did owe fiduciary obligations to Dr Appanna, and continues to do so.
[43] Mr Fisher submitted that there could not be a fiduciary relationship because Dr Appanna and Anglesea are not in a joint venture. He also submitted that, in relation to credentialing, “the duties and interests of Anglesea Hospital are inherently in conflict with the interests of” Dr Appanna.
[44] Mr Fisher’s submission about a joint venture was directed to a pleading in Dr Appanna’s statement of claim. The relationship of Dr Appanna and Anglesea is probably not a joint venture, but that is simply a pleading point. A joint venture is not necessary for fiduciary obligations to arise.
[45] In respect of Mr Fisher’s second point, it may be accepted that the duties and interests of the parties are not the same, but it does not follow that Dr Appanna and Anglesea are “inherently in conflict”. In fact, one of the principles adopted by Anglesea suggests the opposite. The principle is:
Professional bodies, employers and individual health practitioners have essential roles in credentialing that are distinct and complementary.
[46] In any event, the issue on the injunction application was not one of credentialing, but whether Anglesea had acted in accordance with obligations it already owed to Dr Appanna because his credentialing application had been accepted.
[47] The four documents earlier summarised sufficiently establish that it is seriously arguable that fiduciary obligations arose. There is the express statement in Anglesea’s own credentialing document that “it is important that there is a high degree of trust and confidence in our relationship”. Anglesea also adopted all but one of the principles in the Ministry of Health framework.
[48] Principle 1 in the Ministry of Health framework is relevant. The principle is:
Credentialing is a process used by all health and disability service providers to promote the provision of quality health care.
Relevant detail on this principle includes the following:
The confidence of practitioners in the process and their willing participation are essential: effective credentialing requires an ownership of the process by practitioners and a partnership between practitioners and employers based on trust and mutual respect.
(emphasis in the original)
This is telling on the existence of a fiduciary relationship. The use of the word “employers” is inapt, but that does not bear on the substance of the relationship as conveyed by this statement.
[49] The nature of the relationship is further described in section 3 of the framework, which is concerned with the credentialing process. It includes the following:
Successful implementation of this recommendation depends on the following on the part of stakeholders: … acknowledgement that the confidence of practitioners in the process and their willing participation are essential: there must be a partnership between practitioners and employers based on trust and mutual respect.
[50] I also consider that there is a serious question to be tried on whether decision making by Anglesea is susceptible to judicial review. It is unnecessary to consider this in any detail because the contractual and fiduciary relationships are a sufficient foundation for assessment of the injunction application. It may nevertheless be noted that the relationship is not dependent solely on private arrangements. This is sufficiently indicated by Anglesea’s adoption of a credentialing programme consistent with the Ministry of Health’s framework. As noted in the description of Anglesea’s practicing guide, it refers not only to the Ministry of Health framework but also to the Health Practitioner’s Competence Assurance Act 2003. The public/private overlap may also be indicated by Anglesea’s adoption of the principles from the Ministry of Health framework and its binding itself, through the memorandum of understanding, to the statutory processes of the Medical Council.
[51] The alleged breaches of contract and of fiduciary obligations, and judicially reviewable error, of Anglesea are essentially the same. They may be summarised as follows:
(a) Failure to give Dr Appanna prior notice of the fact that it was considering the suspension.
(b)Failure to give Dr Appanna any, or a proper, opportunity to respond to the concerns upon which the suspension decision was based.
(c) Failure to obtain an independent review from a suitably qualified and independent person or persons.
(d)Reliance on advice from persons who were not independent and had a conflict of interest.
(e) Ignoring the opinions of Professor Johnson and Mr Jacobson.
(f) Ignoring the findings of the Medical Council, or failing to give appropriate weight to them.
(g) Imposing the suspension without reasonable grounds for doing so.
[52] To determine whether there is a serious question for trial, the detailed contentions in the statement of claim can conveniently be considered by reference to the two main points advanced for Dr Appanna and noted in the introduction: the process was flawed and there was no patient safety risk justifying suspension.
[53] To an extent the process issue overlaps with the risk issue. This is because, as the factual narrative makes clear, Anglesea initially embarked on one process – suspension to be followed by credentialing review – and then referred the matter to the Medical Council for the risk assessment. Having got the Council’s decision, Anglesea then seemingly put it aside and reverted to its own internal processes. These considerations by themselves, coupled with the very clear conclusion of the Medical Council as early as 24 June that there was no risk, established that there is a serious question to be tried. On the evidence presented on this application, and taking full account of the evidence for Anglesea, Dr Appanna has in fact established a prima facie case. Establishing a prima facie case is important given the fact that what he sought was a mandatory injunction for his reinstatement.
Process obligations of Anglesea
[54] The Ministry of Health framework records a range of what may be described as process obligations which have either been expressly adopted by Anglesea for, or which it can reasonably be argued are binding on Anglesea in, its relationship with credentialed doctors such as Dr Appanna. I will record some relevant statements from the framework:
(a) “Credentialing cannot be imposed on practitioners without consultation.” This is relevant to steps taken, or not taken, by Anglesea from its receipt of the three cases that had been referred to Ms van Praagh sometime before 23 March 2015.
(b) A point of detail for principle 3:
“The precise nature of the relationship between professional bodies and service providers in relation to credentialing is likely to be profession-specific, but it should always be clarified on both sides in order to ensure that requirements
are met without unnecessary duplication of assessment and administrative processes.”
(c) “Principle 6: Credentialing process must be fair, transparent and robust.” Detail for this principle includes the following:
Organisational commitment to quality, patient care and objective professional standards provides the foundation for an unbiased credentialing system.
(emphasis added)
(d) A further point of detail on principle 6:
Credentialing policy must document an appeals process,
including specifications on …
A number of matters were identified. Anglesea has no appeals process.
(e) “Committees delegated to undertake credentialing should include:
· A practitioner nominated from another service within the organisation.
· A practitioner with relevant clinical experience co-opted from outside the organisation (the appropriate college or specialist society may be asked to nominate this person).”
(f) Under a heading “The appeals process”:
A change to a practitioner’s scope of practice resulting from the credentialing process has the potential to influence his or her livelihood, reputation and job satisfaction. Where appropriate, an employing organisation should offer retraining to practitioners whose scope of practice has been reduced. However, when the practitioner and the credentialing committee disagree over such an outcome, a process must be available for the practitioner to challenge the decision. The appeals process must be governed by due process that is clearly specified by the organisation.
…
In most instances the appeal will be addressed to the chief executive. For this reason he chief executive should not be involved in the day-to-day workings of the credentials committee.
Analysis
[55] Against that broad overview I will outline, largely in a summary way, particular points supporting the conclusion I reached that Dr Appanna had established a serious question to be tried on the contention that the processes followed by Anglesea were in breach of obligations owed to him.
[56] From the evidence the following points are seriously arguable and, as earlier indicated, numbers of them established on a prima facie basis:
(a) There was no prior notice to Dr Appanna of concerns about the three operations, or about any other matter.
(b) He was peremptorily suspended without any form of consultation.
(c) All efforts he then made, directly and through his solicitors, to engage in constructive consultation were ignored or rebuffed.
(d)Some of the persons involved in decision making by the clinical risk management committee, and by the credentialing committee, should not have been present.
(e) Until matters were referred to the Medical Council there was no independent review.
(f) The opinions of Professor Johnson and Mr Jacobson confirmed Dr Appanna’s own advice to Anglesea, but no steps were taken by Anglesea in response to these independent opinions, or indeed Dr Appanna’s own opinion.
(g) Anglesea advised Dr Appanna, in the letter dated 29 March, that his
suspension was to be the subject of an “impartial external review”, but
that had not happened when, on 26 April, almost a month later, Anglesea referred the matter to the Medical Council. On referral to the Medical Council Dr Appanna’s attention was therefore directed to responding to the Medical Council, and not to review of the suspension by Anglesea. Given the fact that Anglesea did not reinstate Dr Appanna on receipt of the Medical Council’s decision, it is reasonably arguable that Dr Appanna was misled by Anglesea in material ways and also lost a substantial amount of time in bringing the injunction application to seek reinstatement.
(h)Given Anglesea’s referral of the matter to the Medical Council, and the conclusion of the Council, Anglesea was not justified in then refusing to reinstate Dr Appanna.
(i)Anglesea, in the face of the Medical Council’s decision, sought to find additional reasons to maintain the suspension, with these reasons unrelated to the original grounds for suspension. One stated reason was the fact that Dr Appanna was no longer performing surgery at the Southern Cross Hospital. That was irrelevant, and the Medical Council’s conclusion of 24 June made that clear. Ms van Praagh also stated, in her evidence in opposition to the injunction application, that she had made “discreet enquiries” of theatre staff and the result of those enquiries gave rise to concerns. That was inadmissible evidence.
(j)Ms van Praagh’s evidence, and evidence of the extent of her involvement, also raises questions as to whether she acted, and made decisions as chief executive, with the required degree of objectivity.
[57] There was also Dr Appanna’s argument that it is seriously arguable that the grounds for suspension – patient risk – were not made out. It is unnecessary to consider whether it is seriously arguable that the evidence relied on by Anglesea for the suspension on 29 March was adequate, as opposed to the process leading to the conclusion. The primary point for Dr Appanna is that it was not open to Anglesea to
continue to maintain that there was risk following the clear conclusion of the Council. In my judgment, it is beyond reasonable argument that the body with the ultimate statutory responsibility for determining patient risk, the Medical Council, had definitively concluded by August 2015 that there was no risk. Apart from the side issue of the Southern Cross Hospital, that had been the Council’s conclusion in June. The only point to be added is that, on the application for the injunction, there was no admissible evidence from Anglesea raising any material question on the question of patient risk. As Mr Waalkens QC submitted, this is surprising given the position that Anglesea has steadfastly maintained on the question of risk.
[58] The conclusion that there is a serious question to be tried, on Dr Appanna’s contention that there was breach of obligations owed to him when Anglesea failed to reinstate him following the Council’s decision, is reinforced by provisions in some of the documents which define the relationship between Dr Appanna and Anglesea. For example:
(a) From Anglesea’s practice guide:
Adverse events would be investigated by the Clinical Committee, referred to the appropriate specialist on the committee who would advise if he [sic] could deal with it or bring in an external specialist to assist. If necessary the case would be referred to the Medical Council.
(b)The purpose of the memorandum of understanding between the Medical Council and participating private surgical hospitals is relevant on the question of risk. The statement of purpose in the memorandum is reproduced above at [40]. The general statement of purpose recorded there is followed by two principles, one of which is as follows:
The MCNZ has responsibility to protect health and safety of the public by ensuring the competence and fitness to practice of doctors.
(c) In appendix 1 of the memorandum the roles and responsibilities of the
Council on the one hand and participating private surgical hospitals
on the other are set out in columns. Responsibilities of the Medical
Council include the following:
[The Council] will notify the PPSH, in relation to credentialed doctors when:
· there is a risk of harm or risk of serious harm arising
from the doctor’s practice.
[The Council] will take responsibility to ensure patients are not at risk while competence and conduct or other concerns are being reviewed by MCNZ.
(d)Under the column for the PPSH (i.e. in this case Anglesea) there is the following:
[The PPSH will] maintain a current credentialing process for assessing and addressing concerns. The PPSH will ensure compliance with statutory requirements.
[NB Under section 34(1) of the … Act] where a health practitioner [i.e. a PPSH] has reason to believe that a doctor may pose a risk of harm to the public by practicing below the required standard of competence, that health practitioner may give the MCNZ written notice of the reasons on which that belief is based.
Evaluation: balance of convenience
[59] Dr Appanna’s principal contention on the balance of convenience was that his immediate reinstatement was necessary because, if he was not immediately reinstated, but in the end established his claims, damages would not be an adequate remedy. On the question of the adequacy of damages, Anglesea contended that damages would be an adequate remedy and, in any event, the credentialing review Anglesea intended to undertake would resolve matters promptly.
[60] I will deal with Anglesea’s second point in a moment. On the question of the adequacy of damages, I was satisfied that damages would not provide an adequate remedy to Dr Appanna if he succeeded on the substantive claims. This was because, on that assumption, there would have been unjustified and substantial damage to his reputation, as well as loss of income, and the damage to reputation would increase materially with the passage of time through to a decision on the substantive claims. I considered Mr Waalkens was justified in a submission that a substantial part of Dr
Appanna’s loss, if he establishes his claims, will be the damage to reputation and that quantifying damage to reputation in money terms can be particularly difficult. I considered, in addition, that vindication for Dr Appanna through his reinstatement in a judgment on his substantive claims could be illusory vindication if his practice had been lost in the meantime.
[61] That last point brings the balance of convenience assessment to the question of risk. The parties saw the question of risk quite differently. Dr Appanna submitted that there was no material risk for Anglesea given the decision of the Medical Council. Anglesea appeared to argue that there was evidence of potential risk. This aspect has already been assessed on in considering whether there is a serious question to be tried. The conclusions there also apply when considering the balance of convenience. The scales were weighted very much in favour of Dr Appanna because of the unequivocal clearance from the Medical Council. Anglesea’s arguments, as I have already recorded, were not founded on any probative evidence. They seemed to be founded more on trying to find new reasons to justify continued suspension.
[62] Anglesea also submitted that an interim injunction was not required because of the proposed credentialing review which was said to be imminent. I was not persuaded that the submissions in this regard justified declining Dr Appanna’s application. Given the extended delay by Anglesea in getting a credentialing review under way, and with this including inconsistent courses of action and inconsistent advice to Dr Appanna, it was not at all clear that a review would happen reasonably promptly, and there was no basis for arguing that it was “imminent”. There was likely to be further delay because numbers of important matters required for a credentialing review had not been agreed.
[63] There was a separate, and perhaps more fundamental point, in relation to Anglesea’s reliance on the proposed credentialing review as a reason to refuse the injunction. This is that, to give weight to Anglesea’s proposition that the proposed credentialing review was a cure-all, would effectively require no weight to be given to the unequivocal decision of the Medical Council. Anglesea’s argument conflated two matters which in large measure, on the injunction application, were distinct – a
credentialing review process put in train because of the suspension, and the fundamental preliminary question as to whether the suspension because of patient risk was justified in the first place. Putting it another way, a credentialing review could only be undertaken if events had occurred which properly justified the review; the first question to be answered is whether the suspension was arguably justified, but Anglesea’s argument begged that question.
[64] Assessing all matters advanced on the question of the balance of convenience, and combined with the prima facie strength of Dr Appanna’s case, I was satisfied that the injunction sought was warranted, for the various reasons now
recorded.
Woodhouse J