Public Health Action Limited v Tū Ora Compass Health

[2025] NZHC 1351

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2025-485-180

[2025] NZHC 1351

BETWEEN

PUBLIC HEALTH ACTION LIMITED

Applicant

AND

TŪ ORA COMPASS HEALTH

Respondent

Hearing:

20 May 2025

Appearances:

M E Hubble for Applicant

L Clark and G Robinson for Respondent

Judgment:

27 May 2025

JUDGMENT OF BOLDT J

[1]    Mātauranga Medical is a general medical practice in Paraparaumu. It is owned and operated by a charitable company called Public Health Action Ltd (PHA). PHA’s sole director is Dr Karl Geiringer, who also holds 68 per cent of PHA’s shares.

[2]    Mātauranga Medical was established in 2021. It was set up at short notice because an existing Paraparaumu medical practice, Natural Healing Raumati (Natural Healing), was unwilling to conform with the COVID-19 mandates then in force and could not remain open. Mātauranga Medical is part-funded by the respondent, a Primary Health Organisation (PHO) called Tū Ora Compass Health Limited (Tū Ora).

[3]    Tū Ora is contracted by Health New Zealand | Te Whatu Ora (HNZ) to deliver subsidised primary health care services throughout the Wellington region. It is one of several Wellington-region PHOs. HNZ funds PHOs, and PHOs then provide subsidies and other services to general practices. In effect, a PHO operates as a bridge between

PUBLIC HEALTH ACTION LTD v TŪ ORA COMPASS HEALTH [2025] NZHC 1351 [27 May 2025]

HNZ and individual medical practices. While they may not realise it, patients who are enrolled with a medical practice are also registered with a PHO. If something happens which affects a practice’s ability to provide services to its patients, it is the PHO’s responsibility to ensure the patients have access to ongoing care.

[4]    Tū Ora had a Contracted Provider Agreement (sometimes called a Back to Back or B2B agreement) with Natural Healing. In November 2021, PHA entered into a Deed of Novation with the practitioner who had been running Natural Healing, meaning PHA assumed Natural Healing’s rights and obligations under the B2B agreement with Tū Ora.

[5]    On 22 January 2025, Tū Ora wrote to PHA giving it six months’ notice of its intention to terminate the B2B agreement. PHA’s agreement with Tū Ora will expire on 25 July 2025. If the agreement expires and Mātauranga Medical cannot secure another source of public funding, it will be unable to provide subsidised care to its patients.

[6]    I will discuss the B2B agreement in much more detail below, but cl 15.3 of the agreement provides that either party “may terminate this Agreement by giving the other 6 months notice”. While other provisions permit Tū Ora to terminate the agreement immediately if certain situations arise, cl 15.3 does not require the party which gives notice to provide any reason for its decision to do so. Clause 15.3 is, and was plainly intended to be, a standard “without cause” termination provision.

The proceeding

[7]    PHA has filed proceedings which challenge the validity of the termination notice. It contends the B2B agreement provides that cl 15.3 cannot be exercised until the parties have tried and failed to resolve the underlying dispute between them, whether by negotiation, mediation or arbitration.  Alternatively,  PHA argues  that Tū Ora’s decision to terminate the agreement breached cl 3.3. That clause commits both parties to exercise their rights under the B2B agreement in a reasonable manner. PHA has signalled it will shortly file an amended claim which will characterise the decision to terminate the agreement as unreasonable.

[8]    The existing statement of claim was drafted by Dr Geiringer personally. It was filed on 27 March 2025 and initially sought only modest injunctive relief. PHA asked the Court to order Tū Ora not to contact Mātauranga Medical’s patients about the termination of the B2B agreement. Tū Ora had proposed to advise patients of their options, including providing information about other practices they may wish to enrol with. PHA sought the injunction for only a month, until 25 April 2025. The statement of claim says PHA proposed to use that time to obtain representation and further information about the concerns which led Tū Ora to issue the termination notice.

[9]    Tū Ora immediately agreed to refrain from contacting Mātauranga Medical’s patients until PHA’s injunction application was resolved. On 14 May 2025, PHA filed an amended application, seeking an injunction which would restrain Tū Ora from communicating with Mātauranga Medical’s patients until the parties’ underlying dispute is resolved “by the means provided in the [B2B agreement]”. On the same date PHA filed a second application, asking the Court to enjoin Tū Ora from acting “in any way” on its notice to terminate the agreement “until the termination is resolved by the means provided in the agreement, or the applicant succeeds in obtaining an agreement with another [PHO] …”.

[10]   PHA argues that if Tū Ora advises Mātauranga Medical’s patients that the practice’s funding may terminate in July, and offers to facilitate their registration with other practices, the “reputational damage to the clinicians and directors of [PHA] would be irreversible and not able to be remedied through any court orders or damages”.

[11]   This judgment deals with PHA’s two applications for interim injunctions. At the same time, the parties have indicated they are available to accept a substantive fixture on 18 June 2025, around a month before Tū Ora’s notice of termination takes effect.

Background

[12]   Since he established Mātauranga Medical, Dr Geiringer has sought to run a health centre which funds its services differently from a conventional general practice. The practice is nurse-led and most patient consultations are with a registered nurse,

rather than with Dr Geiringer personally. It has adopted other innovative funding initiatives, such as a membership system, by which patients pay $6 a week and then pay no nurse-led consultation fees, repeat prescription fees or referral fees.

[13]   Many of Mātauranga Medical’s patients are vulnerable or from low socio-economic backgrounds, and the practice is designed to reduce cost barriers to primary care. Despite many allowing their enrolments to lapse after Mātauranga Medical took over from Natural Healing, the number of patients enrolled with the practice grew from 649 in November 2021 to 1430 at the beginning of March 2025.

[14]   At the same time, it is apparent the relationship between PHA and Tū Ora has not been harmonious. While Tū Ora was careful not to offer any reason for its decision to end its relationship with PHA, Dr Geiringer’s affidavit outlines the immediate background to the termination. On 19 December 2024, an administrator at Mātauranga Medical contacted Tū Ora alleging the practice was unsafe. Tū Ora initially issued PHA with a breach notice. Then, instead of seeking to investigate the allegations further or meeting with Dr Geiringer to discuss its concerns, Tū Ora issued its letter of termination.1

[15]   In the covering email which attached the termination letter, Tū Ora’s CEO, Ms Justine Thorpe, indicated she would be happy to meet with Dr Geiringer but would “not be getting into discussions about the notice”. Ms Thorpe offered to discuss how Tū Ora could help Dr Geiringer “to look at the options you have, i.e. another PHO, and also the communication that will need to occur with patients”.

[16]   Ms Clark, on behalf of Tū Ora, acknowledged it had deliberately refrained from offering any reason for the termination, either in its communications with PHA or in opposition to the current applications.

1      The termination letter was divided into two sections. The first section was headed “Termination of contract”. That section indicated Tū Ora was giving PHA six months’ notice of its decision to terminate the B2B agreement. It did not offer any reason for that decision. The second section was headed “Continued obligations”. Tū Ora noted it had issued a breach notice the previous month, alleging Dr Geiringer had been absent from the practice without explanation. It asserted he had not responded properly to the breach. It also recorded its concern that Dr Geiringer was running the practice with only two nurses, and asked for information about the steps he intended to take “to ensure that both employees and patients … are being protected from workplace and / or clinical risk”.

[17]   Since January, Dr Geiringer has been attempting to find another PHO which is willing to enter into a B2B agreement with PHA. He has been unsuccessful so far. His affidavit cited a response from one PHO which indicated Tū Ora had raised “concerns about the model [PHA] is running  but  also  challenges  working  with [Dr Geiringer]”. In February 2025, Dr Geiringer sought to engage directly with HNZ but has received no substantive response.

The interim injunction applications

[18]   As noted above, PHA seeks two injunctions. The first would prevent Tū Ora from contacting Mātauranga Medical’s patients until the underlying dispute regarding the termination is resolved through the dispute resolution procedure in the B2B agreement.  The  second  would  compel  Tū  Ora   to   continue   funding Mātauranga Medical either until “the dispute as to the termination” is resolved using the dispute-resolution procedures set out in the B2B agreement, or until PHA secures a new source of public funding. In response to my concern about the open-ended nature of the latter injunction, Ms Hubble, on behalf of PHA, accepted the injunction should expire either upon execution of an agreement with a new PHO, or resolution of the substantive proceeding.

[19]   In determining PHA’s injunction applications the Court must examine whether the proceeding discloses a serious question to be tried, where the balance of convenience lies and, as a cross-check, the overall interests of justice.2

[20]   Ms Hubble indicated that PHA will shortly file an amended statement of claim, which sets out the basis of its contention that the notice of termination was invalid. While an amended pleading is an urgent next step in the substantive proceeding, for present purposes the basis of PHA’s challenge to the termination is clear. There are two main grounds. PHA contends the B2B agreement, properly construed, required Tū Ora to articulate the basis of its decision to terminate the agreement.  It argues  Tū Ora was then obliged and to try to resolve the underlying dispute before it had recourse to cl 15.3. In effect, it argues the “without cause” termination power in

2      New Zealand Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90 at [12]. Roseneath Holdings Ltd v Grieve [2004] 2 NZLR 168 (CA) at [35]–[37].

cl 15.3 is subject to cl 14, which sets out how disputes between the parties should be addressed.

[21]   Second, PHA argues that the B2B agreement provides that all decisions taken under the agreement must be made in a reasonable manner, and that Tū Ora’s decision to terminate its relationship with PHA was unreasonable. It argues there is a serious question to be tried on both grounds, and that the balance of convenience clearly favours preserving the status quo pending resolution of the substantive claim.

The Back to Back Agreement

[22]   Three clauses in the B2B agreement assumed particular importance in argument, namely clauses 3, 14 and 15. They relevantly provide:

3.        Our obligations and how we will work together

…

3.3 We agree to carry out the roles and responsibilities under  this  Agreement in a collaborative and co-operative way, and to exercise out rights in a reasonable manner.

14.Dispute resolution

14.1Court or arbitration proceedings: We agree not to commence any court or arbitration proceedings relating to any dispute arising out of this Agreement until we have both complied with the requirements set out in this clause, unless either party considers that proceedings are necessary to preserve its rights.

14.2Resolution by agreement: If a dispute arises under this Agreement:

(a)the party claiming that dispute exists must give notice to the other party of the nature of the dispute; and

(b)we will each act in good faith and use our best endeavours to resolve the dispute by agreement.

14.3Mediation:  If  the  dispute  is  not   settled  by  agreement   within 21 Business Days of receipt of the notice of dispute, unless we agree otherwise in writing, we will participate in mediation…

…

14.4Arbitration: If the dispute is not settled by agreement within 30 Business Days of the appointment of a mediator, unless we agree otherwise in writing, the dispute will be referred to arbitration…

…

14.6     Exceptions: This clause does not apply to:

…

(b) a variation of this Agreement in accordance with clause 2.4 or termination of this Agreement in accordance with clauses 15.1, 15.4(a), 15.4(b), or 15.4(e);

…

15.Termination

15.1If the PHO Services Agreement is terminated for any reason, we agree that this Agreement terminates on the same day as the expiry or termination of the PHO Services Agreement.

…

15.3Either of  us  may  terminate  this  Agreement  by  giving  the  other 6 months notice.

15.4The PHO may terminate this Agreement immediately by notice to the Contracted Provider (or their agent) if:

(a)the PHO is required to terminate this Agreement by the DHB in accordance with the provisions of the PHO Services Agreement;

(b)the Contracted Provider has failed to perform a material obligation set out in this Agreement;

(c)the Contracted Provider has claimed, and been paid, a payment in breach of this Agreement;

(d)the Contracted Provider has failed to perform an obligation in this Agreement other than an obligation described in paragraph

(b) or (c), and the failure is capable of being rectified , is not rectified within 30 days of the PHO giving the Contracted Provider notice of the failure; or

(e)an Insolvency Event occurs; or

15.5The Contracted Provider may terminate this Agreement immediately by notice to the PHO if:

(a)the PHO has failed to perform a material obligation set out in this Agreement;

(b)the PHO has failed to perform an obligation in this Agreement that is not a material obligation, and the failure is incapable of being rectified, is not rectified within 30 days of the Contracted Provider giving the PHO notice of the failure; or

(c)an Insolvency Event occurs.

Serious question to be tried

Clauses 14 and 15

[23]   Provisions like cl 15.3 are common. They ensure parties in a continuing contractual relationship always have the option of terminating the relevant agreement, with appropriate notice, if they wish. In Bank of New Zealand v Christian Church Community Trust, the Court of Appeal referred to a provision which authorised either party to terminate their banking relationship “for any reason”.3 It observed:

[103] … The clear scheme of the contract, consistent with the common law default position, is that the relationship subsists for so long as both parties wish it to do so, but either is free to bring it to an end at any time for any reason.

[24]   Ms Hubble’s principal submission is that cl 15.3 may only be exercised if PHA and Tū Ora have first exhausted the dispute resolution mechanisms in cl 14. The key to her submission is cl 14.6(b), which provides that cl 14 does not apply to some, clearly specified, terminations under cl 15, implying it does apply to the rest. Critically, cl 15.3 is not among the provisions excluded by cl 14.6(b).

[25]   Ms Hubble submitted cl 14.6(b) demonstrates that termination decisions under cl 15 are generally subject to the dispute resolution provisions in cl 14. If cls 14 and 15 operate independently, as Tū Ora argues, the exceptions in cl 14.6(b) would not have been necessary. Ms Hubble argued this is a case where articulation of the exceptions proves the existence of the rule.

[26]   There is an undeniable logic to Ms Hubble’s submission, but I do not consider cl 15.3 can sensibly be read in the manner she suggests. I agree with Ms Clark that there appears little rhyme or reason to the grounds in cl 15.4 which may be invoked without reference to the dispute resolution provisions. For example, there appears no reason to allow the provider to insist upon dispute resolution if it is accused of claiming and receiving a payment in breach of the agreement (cl 15.4(c)) but not if the PHO alleges it has failed to perform a material obligation under the agreement (cl 15.4(b)).

3      Bank of New Zealand v Christian Church Community Trust [2024] NZCA 645, [2024] 3 NZLR 856 [BNZ].

Ms Clark described cl 14.6(b) as an “untidy and unhelpful” provision, and it is hard to disagree.

[27]   In any event, all the grounds for termination listed in cl 15.4 represent examples of termination for cause, and some — especially cls 15.4(b), (c) and (d) — imply the existence of an underlying dispute. Some are then made subject to the dispute resolution provisions, while others are not.

[28]   By contrast, termination without cause under cl 15.3 does not imply the existence of a dispute. That clause gives both parties the power to bring the relationship to an end for any reason. As is discussed in more detail below, cl 15.3 must be exercised in a reasonable manner. Nonetheless, there are any number of reasons why a party might decide to terminate the contract. Providers may decide to retire, move to another region, leave general practice or decide another PHO suits their requirements better. None of those reasons implies a dispute, and it would make little sense to hold that the PHO, no matter how disappointed it might be, has the right to challenge the decision to terminate by insisting on recourse to cl 14.

[29]   The same analysis applies in reverse. There are many reasons why a PHO might decide to end its relationship with a provider. It must act reasonably in doing so, but termination under cl 15.3 does not necessarily imply the parties are in dispute. Indeed, Ms Clark insists there is no particular dispute here. While the final straw appears to have been (heavily contested) allegations about staffing levels, Ms Clark said that was not why Tū Ora chose to end the agreement. Though there is no direct evidence on this point yet, it appears Tū Ora will simply say it considered its relationship with the practice had become unsustainable and that it no longer wanted the agreement to continue.

[30]   I asked Ms Hubble what “dispute” Tū Ora should have referred for resolution before it decided to terminate the agreement. She replied the dispute arose from the decision to terminate the agreement. Even leaving aside the circularity of that analysis, it highlights why cl 14 is not an appropriate vehicle by which  a decision to  invoke cl 15.3 can be challenged. In effect, it would involve requiring Tū Ora to set out the exact basis of its unhappiness in the relationship, characterising the areas of

dissatisfaction as a “dispute”, then utilising cl 14 in an attempt to resolve them. A requirement that Tū Ora provide a detailed account of the reasons it wishes to end the relationship, then engage in dispute resolution, is incompatible with a “no cause” termination provision like cl 15.3.

Reasonableness

[31]   Despite the breadth of its wording, cl 15.3 is not as unfettered as many provisions which permit termination without cause. In this case it is not necessary to examine the developing law about implied limits on contractual discretions explored by the Court of Appeal in BNZ. As the Court noted in that case, “there may be cases where the purpose for which a termination clause may be exercised is qualified by an express [contractual] term”.4

[32]   Clause 3.3 of the B2B agreement is a good example. That clause expressly binds both parties to exercise their rights under the agreement in a reasonable manner. Ms Clark accepted that cl 3.3 qualifies the otherwise absolute right to terminate the contract under cl 15.3.

[33]   The problem for Tū Ora, at least as the evidence stands, is that it has not attempted to explain its decision to terminate the agreement. That was a deliberate choice on Tū Ora’s part; it apprehended,  whatever  justification  it  advanced,  that Dr Geiringer would immediately take issue with it, forcing it to show cause when exercising a power that does not require any reason to be given. While that approach may pass muster in the absence of a clause such as cl 3.3,5 until Tū Ora explains the termination it risks a finding that it acted unreasonably.

[34]   The reasonableness requirement does not set a high bar. It will be very rare for the Court to intervene when an organisation like Tū Ora exercises a right the agreement expressly grants it. The power to terminate is intended to be a broad and flexible one, which recognises the parties may re-evaluate their contractual relationships as time

4 At [132].

5      Though it would not necessarily do so — as the Court of Appeal observed in BNZ, above n 3, at [11], the law governing the introduction of implied limits to discretionary powers is still developing and remains uncertain.

goes by. The six-month notice period is designed to ensure the other party is not taken by surprise and has time to put new arrangements in place.

[35]   Tū Ora need not explain its assessment of the relationship between it and PHA in granular detail. Provided it had a rational basis for its decision, acted in good faith, and had proper regard to the interests of Mātauranga Medical’s patients, it is unlikely PHA will be able to characterise the decision as unreasonable. As long as the decision was one a reasonable and responsible PHO could make, it is unlikely the termination will breach cl 3.3.

[36]   It would also be advisable for Tū Ora to show it has made arrangements to ensure Mātauranga Medical’s patients will be able to transfer to other nearby practices with minimal disruption, and that none will be left without a suitable provider. As already noted, Mātauranga Medical’s patients are registered with Tū Ora. An obvious factor in assessing a decision that may affect the ongoing viability of a general practice is the steps Tū Ora has taken to ensure continuity of care.

[37]   In any event, despite the breadth of the discretion in cl 15.3 there is at present an unanswered allegation that Tū Ora acted unreasonably when it terminated the agreement. I am satisfied there is a serious question to be tried.

Balance of convenience

[38]   My analysis of the balance of convenience has been simplified by the availability of a substantive fixture in less than a month. This is not a case where the absence of injunctive relief will effectively determine the case in the defendant’s favour. There will still be time, after the substantive hearing, for a ruling about the validity of the termination before the notice period expires on 25 July.

[39]   In light of the availability of an urgent fixture, the only question which needs to be determined immediately is whether, if Dr Geiringer declines to do so, Tū Ora should be free to contact Mātauranga Medical’s patients to advise them that the practice may not be in a position to continue offering subsidised care after 25 July. Tū Ora is currently bound by an undertaking not to contact PHA’s patients.

[40]   The question of communication is complicated by the fact Dr Geiringer is challenging the termination decision and is also taking active steps to secure an alternative source of funding. He is understandably concerned his patients may leave in large numbers if they are told the practice may lose funding in another two months. He is also concerned that any communication, while the future of the practice is uncertain, will cause confusion and distress among his patients, many of whom are vulnerable.

[41]   I agree there were good reasons to refrain from communicating with patients in the early stages of the six-month notice period. Dr Geiringer and Tū Ora both hoped he would quickly secure an agreement with a new PHO. If that occurred, and Mātauranga Medical’s fees structure remained in place, most patients would have had little interest in the fact the practice had a new funder.

[42]   That analysis no longer applies. PHA has not yet secured an agreement with a new PHO, nor has HNZ intervened. While Dr Geiringer continues to seek alternative funding, and this Court will hear his substantive challenge to the termination next month, it is now less than two months until the B2B agreement is due to expire. The position was summarised well by the Hon Christopher Finlayson KC, who acted for PHA in the early stages of the notice period. In a letter to Tū Ora dated 12 March 2025, he wrote:

[9]        PHA accepts that in the event it is unable to secure restored or alternative funding as the six month window closes patients should be advised in good time of the change in circumstances and that they should consider seeking and obtaining alternative general medical care. But that good time need not and should not be within weeks of the notice of termination that has effect six months hence. There is no patient benefit to such early notice.

[43]   With less than two months in the six-month window left, I agree with Ms Clark that there is no longer any reason for Tū Ora to be prohibited from communicating with PHA’s patients. Tū Ora accepts it is responsible for ensuring their continuity of care, and I agree, in light of that responsibility, that Tū Ora should be free to tell patients what is happening and to give them the option of enrolling with a new practice if they wish. Ms Hubble accepted that the transition of so many patients to new providers will be a time-consuming exercise and that the time left before the agreement is scheduled to expire is limited.

[44]   It would take a highly unusual set of circumstances for the Court to hold that a PHO may not communicate with a group of its registered patients about changes that may affect their care. In this case, there is unlikely to be sufficient time to complete such a large transition if the process is left until the Court issues its final decision in June or July. It would be ideal if Dr Geiringer contacts the patients in the first instance, but whether he does so or not I agree that Tū Ora should be released from its current undertaking.

[45]   The nature  of  any  communications  with  patients  will  be  a  matter  for  Dr Geiringer and Tū Ora. No doubt patients will be told that Dr Geiringer has challenged Tū Ora’s decision and is working tirelessly to secure new funding. It may also be prudent to emphasise that any patient who accepts the offer to enrol with another practice will be welcomed back if Dr Geiringer’s efforts are successful. Communications will need to be carefully worded. It may be prudent to actively encourage some patients — for example those with complex or chronic conditions for whom even a short gap in care could be dangerous — to sign up with a new practice.

[46]   There is no need to determine the second injunction — that Tū Ora should be compelled to continue funding PHA after 25 July if the current proceedings are not resolved — in light of the availability of a prompt fixture. It will be a matter for the trial Judge to determine whether there is any need to make an order preserving the status quo after the hearing on 18 June.

Overall interests of justice

[47]   Standing back and considering the case in the round, I am satisfied both of PHA’s applications should be dismissed. There is no longer any justification for restricting Tū Ora’s right to communicate with patients. I hope, in light of this decision, that Dr Geiringer and Tū Ora will co-operate to ensure any communications are worded with appropriate sensitivity, and emphasise that patients are being offered a choice that will ensure continuity of care while the final fate of the practice remains uncertain.

Conclusion

[48]   PHA’s applications are dismissed. I confirm that the substantive challenge to Tū Ora’s decision to terminate the agreement will be heard in this Court on 18 June 2025.

Costs

[49]   The costs of this application are reserved and will be determined as part of the substantive proceeding.

Boldt J

Solicitors:

O’Regan Arndt Peters and Evans, Wellington for Applicant Dentons, Wellington for Respondent