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[2010] NSWSC 1395
Supreme Court of NSW
2009-10-28
Brereton J
Original judgment source is linked above.
CITATION : AMI Australia Holdings Pty Ltd & anor v Fairfax Media Publications Pty Ltd & ors [2010] NSWSC 1395 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S) : 26, 27, 28 October 2009, 24, 25, 26 February, 1, 19 March 2010
DECISION : Order for delivery up of certain material provided to first, third and fourth defendants by second defendant. Proceedings otherwise dismissed.
CATCHWORDS : TORTS - Miscellaneous torts - Other economic torts - Injurious falsehood - elements - malice - whether malice established - EQUITY - Equitable remedies - Injunctions - Injunctions for particular purposes - Other cases - to restrain breach of confidence - by third parties (journalists) - whether journalists knew or ought to have known that provision to them of the information involved a breach of confidence - where information provided by whistleblower - whether information had requisite quality of confidentiality
LEGISLATION CITED : (NSW) Medical Practice Act 1992 s 105 (UK) Restrictive Trade Practices Act 1956 4 & 5 Eliz 2, c 63
A v Hayden (No 2) (1984) 156 CLR 532 AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 Annesley v Earl of Anglesea (1743) 17 State Trials 1139 Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341 Australand Holdings Ltd v Transparency & Accountability Council Inc [2008] NSWSC 669 Australian Broadcasting Corporation v O'Neill [2006] HCA 46(2006) 227 CLR 57 Bacich v Australian Broadcasting Corporation (1992) 29 NSWLR 1 Beechwood Homes (NSW) Pty Ltd v Camenzuli [2010] NSWSC 521 Beloff v Pressdram Ltd [1973] 1 All ER 241 British Industrial Plastics Ltd v Ferguson (1940) 58 RPC 1 British Railway Traffic & Electric Co Ltd v CRC Co Ltd & London County Council [1922] 2 KB 260 Broderick Motors Pty Ltd v Rothe (1986) Aust Tort Rep 80-059 Browne v Dunn (1893) 6 R 67 Castol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 51 FLR 184 Church of Scientology of California Incorporated v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344 Coco v A N Clark (Engineers) Limited [1969] RPC 41 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 David Syme & Co Ltd v General Motors-Holden's Ltd [1984] 2 NSWLR 294 Dickson v Earl of Wilton (1859) 1 F&F 419, 427; 175 ER 790 Exchange Telegraph Co Ltd v Central News Limited [1897] 2 Ch 48 Exchange Telegraph Co Ltd v Howard & The London & Manchester Press Agency Ltd (1906) 22 TLR 375 Fraser v Evans [1969] 1 QB 349 Gilbert v Star Newspaper Co Ltd (1894) 11 TLR 4 Greers Ltd v Pearman & Corder Ltd (1922) 39 RPC 406, 417 Horrocks v Lowe [1974] 1 All ER 662 CASES CITED : Initial Services Ltd v Putterill [1968] 1 QB 396 John Fleming, The Law of Torts, 9th ed (1998) LBC Information Services at 780 Joyce v Sengupta [1993] 1 All ER 897 Kaplan v Go Daddy Group [2005] NSWSC 636 Kaye v Robertson (1990) 19 IPR 147 Liquid Veneer Co v Scott (1912) 29 RPC 639 London & Provincial Sporting News Agency Ltd v Levy (1928) Mac G Cop Cas (1923-28) 340 Morison v Moat (1851) 9 Hare 241, 68 ER 492 National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 128 FLR 334 Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 Prince Albert v Strange (1849) 1 Mac & G 25, 41 ER 1171 Ratcliffe v Evans [1892] 2 QB 524 Roberts v Bass (2002) 212 CLR 1; [2002] HCA 57 Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 Shapiro v La Morta [1923] All ER Rep 378 Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Department of Community Services (1990) 22 FCR 73 Spring v Guardian Assurance PLC [1993] 2 All ER 273 Spring v Guardian Assurance PLC [1995] 2 AC 296 Stuart v Bell [1891] 2 QB 341 Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419 Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1975) 134 CLR 1 Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796 Westpac Banking Corporation v John Fairfax Group Pty Ltd (1991) 19 IPR 513 Wilts United Dairies Ltd v Thomas Robinson Sons & Co Ltd [1957] RPC 220; Wilts United Dairies v Thomas Robinson [1958] RPC 94 Woodward v Hutchins [1977] 1 WLR 760; [1977] 2 All ER 751 Worth Recycling Pty Ltd v Waste Recycling & Processing Pty Ltd [2009] NSWCA 354 Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317
TEXTS CITED : J Fleming, The Law of Torts, 9th ed (1998) LBC Information Services JCC Gatley, P Lewis, JE Previte and RW Ground, Gatley on Libel and Slander, 8th ed (1981) Sweet & Maxwell
AMI Australia Holdings Pty Ltd (first plaintiff) Advanced Medical Institute Pty Ltd (second plaintiff) PARTIES : Fairfax Media Publications Pty Ltd (first defendant) Rita Almohty (second defendant) Kelly Burke (third defendant) Kate McClymont (fourth defendant)
COUNSEL : Mr M Green w Dr E Peden (plaintiffs) Mr D Sibtain w Mr M Polden (first, third & fourth defendants)
Bruce Stewart Dimarco (plaintiffs) SOLICITORS : TresCox Lawyers (second defendant) Johnson Winter & Slattery (first, third & fourth defendants)
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
2009/289188 AMI Australia Holdings Pty Limited & Anor v Fairfax Media Publications Pty Limited & 3 Ors JUDGMENT 1 HIS HONOUR: The plaintiffs AMI Australia Holdings Pty Limited and Advanced Medical Institute Pty Limited (together, "AMI") market and supply to the public medical goods and services for the treatment of sexual dysfunction, in particular premature ejaculation (PE) and erectile dysfunction (ED) in male patients. The first defendant Fairfax Media Publications Pty Limited ("Fairfax") proposes, unless restrained, to publish in its newspapers an article, authored by its employed journalists the third defendant Ms Kelly Burke and the fourth defendant Ms Kate McClymont, unfavourable to AMI. AMI claims injunctive and other relief against Fairfax and the journalists, alleging that the proposed article (1) has been written and would be published by the journalists using information received by them from the former second defendant Dr Rita Almohty (a doctor and former employee of AMI, with whom AMI has since reached a settlement) in circumstances which they knew or ought to have known involved a breach of confidence, and (2) contains falsehoods the publication of which would be malicious and injurious to AMI's business. 2 In the course of the proceedings before trial, Fairfax was required to particularise the allegations pertaining to AMI that it proposed to publish, and did so in five paragraphs of "further particulars" which, for the sake of convenience although somewhat imprecisely, I have called "imputations". While that characterisation is imprecise - inter alia because not only does AMI not sue in defamation, but also AMI's case is that the assertions involve a combination of breach of confidence and injurious falsehood - it is a convenient shorthand description, by which they can be identified. The five imputations are as follows:
33 However, while holding that mere absence of an honest belief in truth is insufficient, that passage does not establish that reckless indifference will not suffice. In Kaye v Robertson, Glidewell LJ (with whom Bingham and Leggatt LJJ agreed) said that it sufficed to infer malice that the words were calculated to produce damage and the defendant either knew them to be false or was reckless as to whether they were false or not (at 152):
Malicious Falsehood. The essentials of this tort are that the defendant has published about the plaintiff words which are false, that they were published maliciously, and that special damage has followed as the direct and natural result of their publication. … Malice will be inferred if it be proved that the words were calculated to produce damage and that the defendant knew when he published the words that they were false or was reckless as to whether they were false or not. 34 The same view was expressed in Spring v Guardian Assurance PLC [1993] 2 All ER 273, in which the Court of Appeal cited the chapter dealing with malicious falsehood in JCC Gatley, P Lewis, JE Previte and RW Ground, Gatley on Libel and Slander, 8th ed (1981) Sweet & Maxwell at [303]): The malice essential to support the action is some dishonest or otherwise improper motive. Such a motive will be inferred on proof that the words were calculated to produce actual damage, and that the defendant knew that they were false when he published them, or was recklessly indifferent as to whether they were false or not. 35 In Palmer Bruyn, Callinan J said that knowledge that a statement was untrue, or recklessness as to its truth, was sufficient to establish malice [Palmer Bruyn, 447 [192]-[194]]. In Schindler Lifts, the applicants submitted that there was malice consisting in three elements: an attempt by the respondent to attract business from the applicants, a purpose of damaging the applicants commercially, and knowledge that the disparagement of the applicants was false. The respondents contended that there was no malice, because they said they had a reasonable basis for believing the truth of the statements, the making of which was motivated purely by a desire to get the business. Pincus J accepted that knowledge of falsity or recklessness would suffice: The decision in De Beers Abrasive Products Ltd v International General Electrical Co of New York Ltd [1975] 1 WLR 972, ... was given on an application to strike out a pleading. It contains, however, a useful review of English authority to that date concerning statements of the kind here in issue. It is unnecessary to summarise Walton J's account of the cases. What it demonstrates is that the respondents' assertion that they merely wished to get business is no defence. ... In the case just discussed, the court did not determine whether a lack of belief in the truth of what was said was necessary in order to show malice. The decision of the Court of Appeal in Shapiro v La Morta (1923) 40 CLR 201 bears on that point. There, Scrutton LJ (at 203) referred to authorities which: "... suggests that if the defendant is speaking in furtherance of his own business or interest and honestly believes what he says to be true, in contrast with deliberate intention to injure the plaintiff, either with knowledge that the statement is untrue or with reckless indifference to whether it is true or false, then either there is no cause of action or the defendant has a "just cause or excuse"." Scrutton LJ appeared to act on the view just mentioned, but Atkin LJ merely assumed, without deciding, that the necessary element is either knowledge of falsity or recklessness. ... I therefore accept that the necessary mental element is as contended for by the applicants - ie knowledge of falsity or recklessness. 36 In my opinion, the above authorities establish that although mere carelessness or lack of honest belief in the truth of what is published is not conclusive of malice [Roberts v Bass, [78]], reckless indifference as to the truth of what is published, as well as knowledge of its falsity, will justify an inference of malice. 37 Generally speaking, in the tort of malicious falsehood, the relevant damage must be harm of a kind intended, or of a kind which is the natural and probable consequence of the false statement [Palmer Bruyn & Parker Pty Ltd v Parsons, 411-12, [73-75] (Gummow J), 396-7 [13-14] (Gleeson CJ)]. The law does not require "special" damage, but "actual" damage. (which may include a general loss of business). This was established by the seminal judgment of Bowen LJ in Ratcliffe v Evans, in which his Lordship explained that the expression "special damage", in this context, included any actual and temporal loss which has, in fact, occurred (at 527-529, 533): That an action will lie for written or oral falsehoods, not actionable per se nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage, is established law. ... To support it, actual damage must shewn, for it is an action which only lies in respect of such damage as has actually occurred. It was contended before us that in such an action it is not enough to allege and prove general loss of business arising from the publication, since such general loss is general and not special damage, and special damage, as often has been said, is the gist of such an action on the case. Lest we should be led astray in such a matter by mere words, it is desirable to recollect that the term "special damage", which is found for centuries in the books, is not always used with reference to similar subject-matter, nor in the same context. At times ... it is employed to denote that damage arising out of the special circumstances of the case which, if properly pleaded, may be superadded to the general damage which the law implies in every breach of contract and every infringement of an absolute right. ... In all such cases the law presumes that some damage will flow in the ordinary course of things from the mere invasion of the plaintiff's rights, and calls it general damage. Special damage in such a context means the particular damage (beyond the general damage), which results from the particular circumstances of the case, and of the plaintiff's claim to be compensated, for which he ought to give warning in his pleadings in order that there may be no surprise at the trial. But where no actual and positive right (apart from the damage done) has been disturbed, it is the damage done that is wrong; and the expression "special damage", when used of this damage, denotes the actual and temporal loss which has, in fact, occurred. Such damage is called variously in old authorities, "express loss", "particular damage" … "damage in fact", "special or particular cause of loss" ... The term "special damage" has also been used in actions on the case brought for a public nuisance, such as obstruction of a river or a highway, to denote that actual and particular loss which the plaintiff must allege and prove that he has sustained beyond what it sustained by the general public, if his action is to be supported, such particular loss being, as is obvious, the cause of action ... In this judgment we shall endeavour to avoid a term which, intelligible enough in its particular context, tends, when successively employed in more than one context and with regard to different subject-matter, to encourage confusion in thought. The question to be decided does not depend on words, but is one of substance. In an action like the present, brought for a malicious falsehood intentionally published in a newspaper about the plaintiff's business - a falsehood which is not actionable as a person liable, and which is not defamatory in itself - is evidence to shew that a general loss of business has been the direct and natural result admissible in evidence, and, if uncontradicted, sufficient to maintain the action? ... An instructive illustration, and one by which the present appeal is really covered, is furnished by the case of Hargrave v Le Breton 4 Burr 2422, decided a century and a half ago. It was an example of slander of title at an auction. ... This case shews, what sound judgment itself dictates, that in an action for falsehood producing damage to a man's trade, which in its very nature is intended or reasonably likely to produce, and which in the ordinary course of things does produce, a general loss of business, as distinct from the loss of this or that known customer, evidence of such general decline of business is admissible.
38 The requirement for "actual damage" does not, however, preclude the grant of injunctive relief to restrain a threatened publication, in which circumstance it will suffice to establish a reasonable probability, as opposed to the actual incurring, of such damage, as McCallum J recently illustrated in Australand Holdings Ltd v Transparency & Accountability Council Inc [2008] NSWSC 669, granting a final injunction to restrain a threatened publication disparaging of a building company (at [169]) (emphasis added): As to the question of damage, the amended defence concedes, in effect, that a general loss of business would be suffered if future publication were permitted. [Counsel for the plaintiff] submitted that the absence of evidence of actual loss could be explained by reference to the fact that an injunction restraining publication was swiftly sought by Australand and ordered by this Court . I am satisfied that there is a reasonable probability that actual damage to the plaintiff would result if the statements were permitted to be published. 39 It has been said that the special rules relating to the grant of injunctive relief in defamation cases cannot be avoided by the expedient of framing the plaintiff's case in injurious falsehood rather than in defamation [Fraser v Evans [1969] 1 QB 349, 362; Woodward v Hutchins [1977] 1 WLR 760, 764; [1977] 2 All ER 751, 755; Swimsure (Laboratories) Pty Ltd v McDonald [1979] 2 NSWLR 796, 800; Church of Scientology of California Incorporated v Reader's Digest Services Pty Ltd [1980] 1 NSWLR 344, 350-1; Broderick Motors Pty Ltd v Rothe (1986) Aust Tort Rep ¶80-059]. Typically, injunctions have been granted in injurious falsehood cases where questions of public interest, free speech and discussion and liberty of the press are not involved [Swimsure (Laboratories) Pty Ltd v McDonald, 801; Broderick Motors Pty Ltd v Rothe, 68,103; Kaplan v Go Daddy Group [2005] NSWSC 636, [40]-[42]]. But High Court authority now recognises that the restraint exercised in the grant of injunctive relief in defamation cases does not apply, at least with the same force, in cases of injurious falsehood. In Palmer Bruyn & Parker Pty Ltd v Parsons, Gummow J said that the inhibition on injunctive relief to restrain further publication of defamatory material does not apply to injurious falsehood (at 406, [58]) (emphasis added): Whilst the same factual matrix may found actions in both defamation and injurious falsehood, there are important distinctions between them. In Joyce v Sengupta , Sir Donald Nicholls V-C said: The remedy provided by the law for words which injure a person's reputation is defamation. Words may also injure a person without damaging his reputation. An example would be a claim that the seller of goods or land is not the true owner. Another example would be a false assertion that a person has closed down his business. Such claims would not necessarily damage the reputation of those concerned. The remedy provided for this is malicious falsehood, sometimes called injurious falsehood or trade libel. This cause of action embraces particular types of malicious falsehood such as slander of title and slander of goods, but it is not confined to those headings. It is for the plaintiff in injurious falsehood to establish falsity, malice and special damage, burdens not imposed upon the plaintiff by defamation. On the other hand, the inhibition upon the use of the injunction to restrain further publication of defamatory material does not apply to injurious falsehood; a rationale for the distinction is said to be that the latter tort protects proprietary and commercial rather than personal interests . 40 In Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57, Gummow and Hayne JJ said that where causes of action lay in the same situation for both defamation and injurious falsehood, an injunction might be granted in respect of the injurious falsehood claim (at [56], 79): The qualification expressed by Lord Cairns LC allowed, for example, for injunctive relief in respect of those torts of slander of title and slander of goods, where property interests were involved, and which were classified as "trade libel", and later, after Ratcliffe v Evans , were developed as the tort of injurious falsehood, elements of which were malice and special damage. The logical consequence was that, where causes of action both for defamation and injurious falsehood lay in the same situation, an injunction might be granted in respect of the injurious falsehood claim. 41 And recently, in Beechwood Homes (NSW) Pty Ltd v Camenzuli [2010] NSWSC 521, Harrison J, with reference to that passage, and having pointed out (at [11]) that in Australand McCallum J granted a final injunction in an injurious falsehood case without referring to any need to consider issues of freedom of speech or special considerations applicable to the exercise of discretion in the circumstances, concluded that any special rules applicable to attempts to restrain a defamation did not apply in a case of injurious falsehood (at [18]): The facts of this case, although specifically different from those with which her Honour was concerned, are similar in form and effect. It does not appear to me that the present case is one in which the plaintiff has illegitimately formulated its case so as to avoid what would otherwise be a fatal impediment to success. I do not consider that any special rules that apply in cases concerned with attempts to restrain a defamation apply in cases of alleged injurious falsehood. 42 I have found it useful to consider each of the imputations generally as follows: (1) the content and meaning of the imputation; (2) whether it has the necessary quality of confidentiality, including the iniquity exception; (3) whether Fairfax and the journalists knew or ought to have known that its communication to them involved a breach of confidence; and (4) whether the imputation is false. The issue of malice is best considered subsequently, in the context of my other conclusions in respect of all of them. First Imputation - commissions 43 The first imputation is that for at least 18 months prior to early 2009, it was the practice of AMI to pay its doctors commissions on the basis of the number of telephone consultations which they performed, so as to provide doctors with a financial incentive to keep those consultations brief and to maximise the volume of prospective purchasers of AMI's products and services, regardless of the patient's best interests. 44 Content. AMI invoked the Oxford English Dictionary definition of commission as "a remuneration for services or work done as agent, in the form of a percentage on the amount involved in the transaction". Although Fairfax contended for a wider meaning, in my judgment use of the word "commission" in this context would convey, to the potential audience of readers of Fairfax publications, a reward calculated as a percentage of sales. The reference to commission would convey to a reader the suggestion that doctors were incentivised to achieve sales, but the imputation goes still further to allege explicitly that doctors were incentivised to keep consultations brief and to maximise the volume of prospective purchasers of AMI's products and services, regardless of patients' best interests. The real import of the imputation is that doctors were being incentivised to disregard patients' interests: shorn of that content, the mere assertion that doctors were remunerated on a fee per service basis would be innocuous. The "sting" in the imputation lies not so much in the assertion that doctors were remunerated on the basis of the number of consultations performed, but in the purpose attributed to that remuneration structure, namely to incentivise doctors to keep consultations brief and to maximise the volume of prospective purchases, regardless of patients' best interests. 45 Confidentiality. The "information" that AMI's remuneration structure included a fee per service component was information relating to the business and affairs of AMI, including the terms upon which AMI contracts with current, proposed or previous employees and contractors, obtained from AMI in circumstances within the scope of Dr Almohty's contractual obligation of confidence. But while it is undoubtedly possible for conditions of service of employees, including their remuneration arrangements, to be the subject of obligations of confidence, that is typically because knowledge of those matters may permit a competitor to poach employees by offering more attractive terms. The mere fact that the remuneration structure includes a fee per patient component (at least after a threshold was reached) would not do that. I am unable to see how the general basis of remuneration of AMI's employed doctors (namely, that it included a fee for service component) could have the necessary quality of confidentiality to be protected as confidential information. At least in the absence of a contractual obligation, in my view equitable obligations of confidence would not have attached to that information. 46 Beyond the "information" that AMI's remuneration structure included a fee per service component, the remainder of the imputation - in particular, the allegation that doctors were remunerated by "commission" - was not information acquired by or imparted to Dr Almohty, but her interpretation of the information she had. Nonetheless, it was derived from information that was the subject of her contractual obligation of confidentiality, and thus constitutes a use of that information. 47 Iniquity. If true, the subject matter would reveal "matters medically dangerous to the public", in particular that doctors were likely to prescribe medication regardless of the interests of the patient. There would be substantial public interest in disclosure of that matter, such as to override any private obligation of confidence that a doctor such as Dr Almohty might have to an employer such as AMI. 48 Notice of breach of confidence. In her interview with the journalists, Dr Almohty told them: So um they have introduced commission - everyone's variable you know payment. I kind of refused to be on commission but then they did a token thing that above 15 patients I spoke to I would get paid, no, sorry, above 10 patients I would get $10 extra a patient, right, but some, you know, some doctor's getting $50 per patient, I was offered that by the owner Jack … Oh yeah, so I was on $1,200 a day … well not a day like per hour, they worked it out per hour so for 9 hours work that was $1,200 and then for me was a token $10 a patient above 10 so often that was $100 extra but as I said that is variable. Other doctors the one next door to me, Catherine Berry she was on per patient $50 or something and other kinds of bonuses. Cos we worked it out, because we were like why? … Sometimes a doctor might go from seeing 15 to 35 and we would suss it out and ask them and sometimes they would swap over to commission so if they talked to 40 people a day that's $2,000. Journalist: So some people were favoured? Almohty: Oh yeah because they wanted something quick and someone to go yeah this is really good medication … 49 It is not in doubt that Dr Almohty was, in that way, the source of the information contained in the first imputation. Embellishment with the sinister purpose attributed to the remuneration structure was derived from the information supplied, and accordingly, publication of the first imputation would be a "use" by the defendants of "information" supplied to them by Dr Almohty. 50 But were the journalists to know that provision of that information involved a breach of confidence? The circumstances of the dealings between Dr Almohty and the journalists were such as to attract great suspicion, if not actual knowledge, that she was engaging in a breach of confidence, but that does not mean that it should have been apparent that all information supplied by her was confidential property of AMI. While it might be plain enough that provision of patient records would involve a breach of confidence, the same does not follow in respect of all other information that she might have communicated, and in particular the general basis of remuneration - namely that (at least as Dr Almohty apparently then asserted) it included a fee per service component. As explained above, I am unpersuaded that the general basis on which AMI remunerated its employed doctors - including that there was a fee for service component or a "commission" - was inherently or obviously confidential; a fortiori it was not self-evidently so to a third party. In my view, in the absence of any evidence that they were aware of the scope and extent of Dr Almohty's contractual obligations of confidence, the general description of AMI's remuneration practices as contained in the first imputation was not such as to require or permit the conclusion that Fairfax or the journalists knew, or ought to have known, that provision to them of that information involved a breach of confidence. 51 Falsity. In her statutory declaration, produced pursuant to the settlement of the proceedings against her, Dr Almohty declared that she did not know of any practice that doctors at AMI were paid commissions - although it became plain that that acceptance was founded on the narrow definition to which I have referred. For reasons previously explained, the statutory declaration is, insofar as it contains concessions by Dr Almohty, reliable. As AMI submits, the evidence establishes that no AMI doctor was remunerated on a basis that fell within the defined meaning of "commission", although some were paid on a basis that included a fee per patient consultation: for example, at least two doctors were paid a minimum daily rate, but also received an extra amount for each additional consultation over a specified threshold. 52 The evidence was that, with full demand, doctors were able to perform between 20 and 30 consultations a day, and perhaps normally achieved between 20 and 25, but on quiet days as few as ten to twelve. During the period from 2 July 2008 to 17 March 2009, Dr Almohty's patient load averaged about 11 per day, up to a maximum of 24. Importantly, AMI pays its doctors regardless of the outcome of the consultation, without distinction as to whether or not medication is prescribed or a sale achieved. Dr Berry was cross-examined as to whether she was incentivised to consult with more patients to increase her financial returns; her response was that she took her ethical responsibilities seriously, and gave all patients the time and care they deserved. Dr Goodier was not cross-examined on the issue. 53 In my view, the circumstance that doctors were remunerated regardless of whether or not medication was prescribed is a significant indicator that they were not incentivised to compromise standards of professional care by the remuneration structure. It is also significant that the nature of the practice was such that most consultations were substantially similar in format, duration and complexity. The provision for some doctors of additional remuneration for consulting additional patients over a specified threshold - akin to overtime - does not bespeak an intention to incentivise them to see more patients at the expense of proper patient care. 54 Conclusion. Accordingly, even if the information contained in the first imputation was the subject of contractual obligations of confidentiality as between Dr Almohty and AMI, the general basis on which AMI remunerated its employed doctors was not inherently or obviously confidential so as to attract equitable protection in the absence of contract, and was certainly not self-evidently so to a third party. Moreover, the asserted purpose of incentivising doctors to disregard patients' best interests, if true, would not have been amenable to protection as confidential information, because to encourage a doctor to act in that manner would be so potentially injurious to public health and contrary to the public interest as to override any private obligation of confidentiality in that respect. I am therefore not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. However, I am satisfied that the imputation was, in substance, false: AMI doctors were not incentivised to compromise standards of care by the remuneration structure. The imputation is self-evidently calculated to harm AMI in respect of its business, in that it conveys that its doctors will prefer their financial interests to patients' proper interests and needs. As foreshadowed, I will address the question issue of malice globally, once the other imputations have been considered. Second Imputation - deterring reference to side-effects 55 The second imputation is that for at least 18 months prior to early 2009, it was the practice of AMI to reprimand and threaten doctors with having their employment terminated if they mentioned to patients too many side effects of the products and services recommended by doctors employed by AMI, or told patients that part of the treatment for which they would contract if they entered into contract with AMI for its goods and services included penile injections, so as to ensure that patients were not put off by the unattractive features of the products and services for which they might contract.
56 Content. It is important to note that this imputation is not that AMI once (or twice) engaged in the conduct alleged, but that it was the practice of AMI to do so. The sting in the imputation is the suggestion that AMI directed and disciplined its employed doctors to give patients incomplete (if not, by omission, misleading) information, in order to maximise business, potentially to the detriment of the patients. 57 Confidentiality and iniquity. Assuming that such a practice were an aspect of AMI's internal business structure and arrangements, which might be the subject of Dr Almohty's contractual obligations of confidence, nonetheless the existence of any such practice - involving intentionally counselling and requiring employed medical practitioners, under threat of termination, to provide incomplete if not misleading information to patients - could hardly be the subject of an equitable obligation of confidence. Moreover, it would be so manifestly contrary to the interests of public health that there would be substantial public interest in its disclosure, such as to override any private obligation of confidence that a doctor such as Dr Almohty might have to an employer such as AMI. For that reason, the information contained in the second imputation, if true, would not have the requisite quality of confidentiality to attract protection as a confidence. 58 Notice of breach of confidence. A fortiori, it could not be concluded that Fairfax or the journalists knew, or ought to have known, that provision to them of that information involved a breach of confidence. 59 Falsity. Has AMI established, as a matter of fact, that it had no such practice? 60 In her oral evidence, Dr Almohty said that having originally not referred to the potential for penile injections, she changed her approach and came to do so, after being informed by another doctor that he had been reprimanded by an interstate medical board for failing to mention the possibility of such injections. Dr Almohty said that she explained to patients that injections were part of the programme, and that the patient may be forced to use injections if all else does not work. When asked "and did you use the word 'forced'?", she answered, "I may have used 'forced' at times". Then she said that while she probably did use the word 'force' at times, she probably said "If you don't use this, the injections which are part of the programme, you might not get a refund". Dr Almohty said that she ceased to mention to patients the possibility of penile injections after being "counselled" by Dr Vaisman and Mr Shrestha, early in 2009, not to mention injections, nor recommend a GP consultation, and directed to sit with two other doctors, in order to change her consultation style. According to Dr Almohty, Mr Shrestha said to her: Why did you ask him 'any side-effect?'. Don't say side-effects, don't say 'go to the doctor', don't say 'get medical tests'. Sales people don't want to put phone calls to you. I can't keep hiring you. 61 Dr Almohty's own patient consultation records falsify her allegation that she ceased to refer to side-effects or penile injections. In fact, Dr Almohty regularly mentioned the possibility of injections, and the side-effects of the medications - indeed, she did so almost invariably. The records of her patient consultations demonstrate that out of the 291 documented consultations in evidence, in 276 she recorded having mentioned side-effects of the recommended treatment (or did not prescribe any treatment); in 275 she either mentioned or prescribed injections, or the patient had a condition which did not and would not require injections (such as PE), or she prescribed nothing at all; in the remaining 16 (of which four took place on 2 March 2009, and two on 17 February 2009) she mentioned side-effects. Ultimately, analysis of the 314 patient records in evidence revealed no case where penile injections were potentially relevant when Dr Almohty did not refer to that possibility. Dr Almohty's practice, as documented in her own notes, demonstrates that she was not influenced against referring to penile injections and side-effects. 62 Moreover, in her statutory declaration of 16 October 2009, Dr Almohty declared that she knew of no such practice of reprimanding doctors. As I have said, the statutory declaration is of significance, and the court can be comfortably satisfied that, insofar as she made concessions in that statutory declaration, they were correct. Indeed, the statutory declaration is not necessarily inconsistent with her oral evidence; the fundamental distinction being between something that she claims to have experienced once, and the existence of a practice of AMI of the kind described in the imputation. 63 Although in his affidavit Dr Vaisman had not refuted Dr Almohty's assertion that he warned doctors not to keep mentioning injections in consultations with patients, he did so in the witness box; and I would not infer that the earlier omission of such a refutation was any acceptance of the accuracy of the assertion. Dr Vaisman denied that he had ever personally reprimanded, or threatened with termination, a doctor for mentioning side-effects of AMI's products. He said that the training and information he gave to doctors always included reference to penile injections, which were sometimes the only appropriate treatment; he said that there was no good reason to keep information about such injections from patients. He insisted that, to his best knowledge, all doctors mentioned all treatment options, and that it was not up to him but up to the individual doctor. 64 Dr Berry gave evidence that she mentioned side-effects and injections to patients, when appropriate. Dr Goodier was not cross-examined on this issue. 65 Conclusion. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. However, I am satisfied that AMI had no such practice as is referred to in this imputation, and that the imputation is therefore false. The imputation is obviously calculated to harm AMI in respect of its business. Third Imputation - absence of scientific evidence 66 The third imputation was that for at least 18 months prior to early 2009, it was the practice of AMI customer service operators to tell patients misleading information regarding treatments, namely that patients would get the best results when using AMI products for one-two years, when there was no scientific evidence to support such a claim, and that AMI condoned that practice. 67 Content. This imputation pertains to representations said to be made by AMI clinical co-ordinators (not customer service operators), allegedly as a matter of routine - or practice - to patients or potential customers for whom certain medications were prescribed, as to certain characteristics claimed for those products, to the effect that the products would provide best results if used for one to two years. The claim, as described in the imputation, does not refer to any particular type of treatment for any particular condition. The sting in the imputation is the allegation that such a claim was misleading, in the absence of any scientific evidence to support it. Thus the imputation asserts that such a claim was misleading, not simpliciter, but because there was no scientific evidence to support it. Moreover, the imputation is not that the claim was not scientifically proved - an imputation that might have been more difficult for AMI to falsify - but the higher and wider assertion that there was no scientific evidence to support it. It is important also to recognise that the claim attributed to AMI was that patients would get "best results" with prolonged use over one to two years. In substance, this means no more than that better results were obtained with such prolonged use than with short-term use, which is not equivalent to the language into which the defendants often lapsed, of describing it as a claim of "increased effectiveness (or efficacy) of AMI products over time". 68 Confidentiality and iniquity. Whatever claims were made by AMI's clinical co-ordinators to customers or potential customers were made freely to customers or potential customers, without any obligation that customers treat them as confidential. While individual consultations between clinical co-ordinators and customers might well be the subject of obligations of confidence, it is not possible to see why a claim made generically in respect of AMI's products to customers would be confidential. And if the claims were spurious, there is nothing to suggest that knowledge of the absence of any evidence to support them was something that was imparted to or acquired by Dr Almohty in confidence. 69 Moreover, while the content of communications between AMI's doctors and patients, and between AMI clinical co-ordinators and patients, would prima facie be confidential, neither the existence of a practice of providing misleading information to patients, nor the absence (if it were so) of any scientific evidence to support AMI's claims, could be the subject of obligations of confidence: the existence of such a practice would plainly be inimical to public health, and the public interest in its disclosure would override any private obligation of confidentiality attending it. For that reason, the information contained in the third imputation, if true, would not have the requisite quality of confidentiality to attract protection as a confidence. 70 Notice of breach of confidence. It follows that I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. 71 Falsity. AMI's products are in general compounds, including (for the treatment of PE) clomipramine or tramadol, delivered by nasal spray, capsule or troche; and (for the treatment of ED) apomorphine, often in combination with other drugs (such as phentolamine and sildenafil (Viagra), vardenafil (Levitra) or tadalafil (Cialis)), delivered by nasal spray or troche. 72 I accept that, when medication was prescribed, clinical co-ordinators commonly recommended to customers that the products be used for a sustained period - typically 12 to 18 months - in order "to train the brain and body". Dr Berry explained: In the case of premature ejaculation, it is necessary to retrain the mind and the body to get to the point where a patient has got past the point of anxiety about ejaculating too quickly. My intention is to recommend a treatment term which aims to get a patient to the point where he no longer needs medication to avoid early ejaculation. 73 She said that, in her experience, treatment was recommended for periods of three months, six months, twelve months or eighteen months. At least implicitly, this conveys a recommendation to use the treatment for sustained periods, because doing so will assist the mind and body to become habituated to the desired end state of minimising, if not eliminating, the impact of ED and/or PE. To my mind, the representation conveyed is rather to the effect that a better enduring result is obtained by sustained use of the medication, than that efficacy of the medication increases with sustained use. 74 Fairfax called Dr Katelaris, an experienced urological surgeon, to give evidence that there was no scientific evidence to support AMI's claims. However, while Dr Katelaris maintained that there was no scientific evidence to support the claim, it emerged that his evidence was really that there had been no "placebo-controlled double-blind randomised studies" that supported an increase in efficacy over a period of one to two years, of the drugs used by AMI (particularly, clomipramine and apomorphine), alone or in conjunction with other compounds, using the modes of administration utilised by AMI. Even when confronted with peer-reviewed articles, or a placebo-controlled double-blind study, he found some reason to discount it - that it was a decade or so old; or that there were insufficient study groups; or that the number of controls did not match the number in the test group. While I accept that each of these matters might weaken the force of the studies, it does not deprive them of all value. In substance, the effect of Dr Katelaris' evidence, in the light of his cross-examination, was not that there was no evidence supporting AMI's claim, but that the evidence for it was not, to him, persuasive or compelling. Moreover, in my view, his opinion miscued, in that while he seems to have insisted that to qualify as scientific evidence there had to be a placebo-controlled double-blind randomised study of the medications used by AMI administered by the modes of delivery utilised by AMI demonstrating increased efficacy over time, the claim in issue was not that the efficacy of the drugs was increased, but that better enduring results were obtained from the treatment, if it was undertaken on a sustained basis. 75 However, it was not for Fairfax to prove the truth of the imputation; AMI bears the burden of establishing its falsity. AMI tendered opinions of Dr Vaisman, Dr Berry and Dr Goodier, in which they drew upon their experience in practice, and articles from the medical literature, to establish that there was some scientific basis for the claim. Amongst the articles from the literature tendered by AMI are at least some that do tend to support aspects of the claim, as the following (incomplete) summary shows. 76 SM Haensel et al, "Clomipramine and Sexual Function in Men with Premature Ejaculation and Controls" (1996) 56 Journal of Urology 1310, reports that clomipramine effectively increases ejaculatory latency in men with primary PE. This provides support for the view that one of the medications utilised by AMI, clomipramine, is effective in the treatment of PE. 77 DS Strassberg et al, "Clomipramine in the Treatment of Rapid (Premature) Ejaculation" (1999) 25 Journal of Sex & Marital Therapy 89, reports a double-blind, placebo-controlled cross-over study, the results of which demonstrated the efficacy of low doses of clomipramine in the treatment of PE. It provides further support for the view that one of the medications utilised by AMI is effective in the treatment of PE. 78 DL Rowland et al, "Effective Daily Treatment With Clomipramine in Men With Premature Ejaculation When 25mg (as required) is Ineffective" (2001) 87 British Journal of Urology International 357, reports a study of four men, who had not responded to low dose on-demand clomipramine, but responded well to daily dosing, concluding that daily dosing may give better results than on demand dosing for PE in men who do not respond to on-demand dosing. This provides further support for the view that regular and sustained treatment produces better results. 79 MR Safarinejad et al, "Safety and Efficacy of Tramadol in the Treatment of Premature Ejaculation: A Double-blind, Placebo-Controlled, Fixed-Dose, Randomized Study" (2006) 26 Journal of Clinical Psychopharmacology 27, concludes that tramadol seems to be effective in the treatment of PE. This provides support for the view that another of the medications utilised by AMI, tramadol, is effective in the treatment of PE. 80 The substance of EA Salem et al, "Tramadol HCL Has Promise In On-Demand Use to Treat Premature Ejaculation" (2008) 5 The Journal of Sexual Medicine 188, is evident from the title of the article. It provides further support for the view that tramadol is effective in the treatment of PE. 81 AL Burnett, "Vasoactive Pharmacotherapy To Cure Erectile Dysfunction: Fact or Fiction?" (2005) 65 Urology 224, is a peer-reviewed article which suggests that extended use of vasoactive pharmacotherapy, including combination pharmacotherapy, can improve erectile function and examines year-long longitudinal studies on erectile health. This provides some support for the efficacy in treatment of ED of extended use of combination pharmacotherapy with vasoactive drugs - of which apomorphine is one. 82 Several other articles report that apomorphine has effect in the treatment of ED. 83 K Hatzimouratidis and DG Hatzichristou, "A Comparative Review of the Options for Treatment of Erectile Dysfunction: Which Treatment for Which Patient?" (2005) 65 Drugs 1621, a peer-reviewed article - reported that apomorphine is efficacious in improving erectile function; noted that in one study daily use rescued 86% of those who did not respond to on-demand use; observed that combination treatment with other medication such as PDE5 inhibitors seemed appealing, but that there was no clinical data available on such a combination; and also noted a study in which men responded better to daily dosing with tadalafil over a twelve week period than to on-demand use. This provides further support for the view that apomorphine - one of the drugs used by AMI - is effective in the treatment of ED; and that regular and sustained treatment produces better results than on-demand dosing. 84 P Lammers et al, "Combination Therapy for Erectile Dysfunction: A Randomised, Double Blind, Unblended Active-Controlled, Cross-Over Study of the Pharmacodynamics and Safety of Combined Oral Formulations of Apomorphine Hydrochloride, Phentolamine Mesylate and Papaverine Hydrochloride in Men With Moderate to Severe Erectile Dysfunction" (2002) 14 International Journal of Impotence Research 54, concluded that an oral combination of two vasoactive drugs with different pharmacodynamic activity - particularly apomorphine and phentolamine - may provide an alternative approach to oral treatment with the highest approved dose of sildenafil, and warranted further investigation. Significantly, their observations included: For the mean six-point SEP score (primary efficacy variable) there was a period effect, which means that patients did increasingly better as the trial periods advanced, independent of the type of treatment. The observed period effect across all four treatments in the study is most likely due to increased confidence with sexual performance during study participation. 85 That article provides further support for the view that apomorphine in combination with phentolamine may be effective treatment for ED, and that efficacy was enhanced over time (the "period effect"), through increasing confidence and reducing performance anxiety over time. 86 I Eardley, "Pharmacotherapy for Erectile Dysfunction" (2010) 7 The Journal of Sexual Medicine 524, reports no evidence of significant differences in efficacy, safety and tolerability between PDE5 inhibitors - such as sildenafil, vardenafil and tadalafil - and apomorphine; that apomorphine is efficacious in the treatment of erectile dysfunction in the broad population at doses of two and three milligrams taken sublingually in an on-demand fashion; and that there was intermediate level evidence for efficacy and safety of combination therapy with, inter alia, phentolamine. This provides further support for the view that apomorphine - one of the drugs used by AMI - administered sublingually - one of the modes of delivery used by AMI - was effective in the treatment of ED. 87 M Lowy and V McCann, Too Fast? Learn to Last Longer: A Guide to Premature Ejaculation, (2009) states: Fluoxetine (Prozac), sertraline (Zoloft) and paroxetine (Aropax) are SSRI anti-depressants which are quite effective in inhibiting ejaculation and are frequently used for this purpose in Australia and the USA. They do this by raising serotonin levels in the ejaculation centre in the brain. Paroxetine is the most effective. Daily dosing is more effective than taking it as a single dose a few hours before sexual activity. It is recommended to take the medication for at least six to 12 months, however, there is no guarantee that PE will be cured after six months. Some men chose life-long treatment. 88 That provides further support for the view that long-term regular medication is typically required for PE. 89 The American Urological Association's Premature Ejaculation: Guideline on the Pharmacologic Management of Premature Ejaculation (2003), an authoritative guideline publication, advises that therapy for premature ejaculation is most likely needed on a continuing basis; that PE usually returns upon discontinuing therapy; and that clomipramine, a tricyclic antidepressant with SRI effects, has improved ejaculatory latency and other measures of PE when prescribed at particular doses. This provides further support for the view that clomipramine, one of the medications used by AMI, is effective in the treatment of PE, and that treatment for PE is usually needed on a long-term basis. 90 Other articles report the efficacy of nasal administration as a route for delivery of medication. 91 The defendants submitted that none of the studies discussed AMI's products, and that is so; but many discussed medications that were included in AMI's products. The defendants contended that scientific evidence could be provided only by a placebo-controlled double-blind randomised study of the type for which Dr Katelaris would stipulate, testing the application of AMI's products delivered via the prescribed routes for the prescribed purpose. If the imputation pertained to proof, as distinct from evidence, there would be great force in that submission. But in order to establish the falsity of the imputation, it is not necessary for AMI to establish that the claim is scientifically proved; it is sufficient to show that there is some scientific evidence to support it. Such evidence may be furnished by a range of material from which conclusions applicable to AMI's products and treatment can be drawn, as distinct from a singular study of AMI's own products. The literature tendered by AMI establishes some basis for, inter alia, each of the following:
· clomipramine, one of the medications utilised by AMI for that purpose, is effective in the treatment of PE; · tramadol, another of the medications utilised by AMI for that purpose, is effective in the treatment of PE; · long-term regular medication is typically required for PE; · apomorphine, one of the drugs used by AMI for that purpose, is effective in the treatment of ED; · apomorphine in combination with phentolamine may be effective treatment for ED; · regular and sustained treatment for ED produces better results than on-demand dosing, and efficacy was enhanced over time through increasing confidence and reducing performance anxiety over time; · sublingual and nasal administration appear to be effective routes of delivery for at least some of these drugs. 92 Dr Katelaris invariably had some criticism or qualification in respect of the focus, size or methodology of each of the studies, but allowing all due weight to those criticisms, the articles nonetheless provide some scientific evidence - albeit falling well short of scientific proof - supportive of AMI's claim. What is critical, in respect of the present imputation, is that at least several articles in the medical literature (including, amongst those referred to above, Rowland, Burnett, Hatzimouratidis, Lammers, Lowy, and the American Urological Association Guideline) suggest that prolonged treatment is necessary or more effective, at least partly because habitual behaviour over time reduces anxiety. In my view, this provides some scientific evidentiary basis for the claim that AMI's treatments are more likely to produce an enduring improvement if used for a sustained period. I am therefore satisfied that this imputation is false. 93 Conclusion. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. However, I am satisfied that this imputation is false, because AMI's claim is not without scientific basis. It is self-evident that the imputation as framed - involving as it does an assertion of provision to patients of misleading information - is calculated to damage AMI in respect of its business. Fourth Imputation - unqualified medical advice
94 The fourth imputation is that for at least 18 months prior to early 2009, it was the practice of AMI to permit its customer service operators and nurses to provide medical advice which could only properly be given by a registered medical practitioner to prospective customers and to prepare prescriptions for those customers, and then for those prescriptions to be signed by medical practitioners when such a mode of providing prescriptions was not in accordance with good medical practice or otherwise in the best interests of the patient. 95 Content. The substance of this imputation is that AMI's unqualified personnel give medical advice that could only properly be given by qualified doctors, and to prepare prescriptions for signature by medical practitioners when that was contrary to good medical practice. 96 Confidentiality and iniquity. Although it may be that AMI's internal business structure and arrangements could be the subject of obligations of confidence, and subject to Dr Almohty's contractual obligations of confidence, I do not see how the circumstance - if it were so - that part of those arrangements included that medical advice was routinely improperly given by unqualified persons could be the subject of an obligation of confidence. A practice of having non-qualified personnel provide medical advice which could only properly be given by registered medical practitioners would be inimical to public health, and the interest in its disclosure would override any private obligations of confidentiality. For that reason, the information contained in the fourth imputation, if true, would not have the requisite quality of confidentiality to attract protection as a confidence. 97 Notice of breach of confidence. It follows that I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. 98 Falsity. Insofar as this imputation relates to the preparation of prescriptions, the defendants virtually conceded that there was no evidence that there was any such practice. In closing submissions, Mr Sibtain acknowledged that this part of the imputation could not be sustained. Moreover, if there were a practice of AMI to permit its customer service operators and nurses to prepare prescriptions for customers, and then for those prescriptions to be signed by medical practitioners, that would not of itself be inconsistent with good medical practice or otherwise contrary to the best interests of the patient, because the formal preparation of prescriptions followed a doctor having recommended the relevant treatment, and they were then signed off by the prescribing doctor. So far as I can see, there could be no objection to someone other than the prescribing doctor doing the clerical work of completing the prescription form, in accordance with the doctor's recommendation, for signature by the doctor. 99 As to the provision of "medical advice", transcripts of recordings of conversations between clinical co-ordinators and potential customers, and the script provided to clinical co-ordinators, establish that clinical co-ordinators sometimes warned potential customers that there may be consequences from not getting treatment quickly, and/or that they should "use it or lose it"; told customers that it took time for the medication to build up in the body, and that the products needed to be used over a protracted period; mentioned adverse side-effects of Viagra, including a risk of heart attack and blindness; said that the condition of PE was psychological, not physical; and asserted that AMI's products have no side-effects. 100 It is uncontroversial that AMI's call-centre operators and clinical co-ordinators are not medically qualified. However, the evidence also establishes that they give such advice in the context that the customers were, in the course of their telephone consultation, referred to a doctor for medical assessment and advice. Any relevant diagnosis and prescription is made by a medical practitioner. The customer would be under no misapprehension that they were speaking to a person qualified to give medical advice when they were not. 101 The basis on which it was said that such advice could not "properly" be given by persons other than medical practitioners was ever clearly articulated. Reference was made to (NSW) Medical Practice Act 1992, which was in force at relevant times, although repealed with effect 30 June 2010, and which relevantly provided, by s 105, that a person who is not a registered medical practitioner must not advertise or hold him or herself out to be entitled, qualified, able or willing to practice medicine or surgery in any of its branches or to give or perform any medical or surgical advice, service, attendance or operation. However, insofar as it is relevant, it is noteworthy that the prohibition imposed by that section was not on giving medical advice, but on holding oneself out to be entitled, qualified, able or willing to do so. The evidence and argument disclosed no relevant prohibition or standard that would have made it improper for non-qualified personnel to give such advice as the clinical co-ordinators apparently gave. There was no evidence before me as to what advice in the medical field could and could not properly be given, and in what circumstances, by an unqualified person. There is no clear delineation between "medical advice" that can "properly" be given only by a qualified medical practitioner, and advice that can permissibly be given by a biologist, a pharmacist, a first-aider, a paramedic, or anyone else. Such advice as was given by clinical consultants did not depend upon any specialised study, knowledge or learning. 102 There is no apparent basis for the contention that the "advice" given by clinical consultants was not the type of "advice" that a layperson with some knowledge of the field might give without offending the law or any other applicable standard. In my view, there is no basis for the contention that it was such as could, in the context in which it was given, only properly be given by a registered medical practitioner. Accordingly, the imputation is false. 103 Conclusion. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. However, I am satisfied that the imputation is false. An allegation that AMI had a practice of giving medical advice improperly through unqualified personnel is calculated to injure it in respect of its business. Fifth Imputation - doctors under supervision 104 The fifth imputation is that during at least an 18-month period prior to 2009, AMI employed at least two doctors who, to its knowledge, were subject to continuing supervision from the NSW Medical Board. 105 Content. The substance of this imputation is that AMI engages, to deliver its services, medical practitioners whose ability was so marginal that they were entitled to practice only under supervision. Indeed, many readers would infer worse, that the doctors in question had been subject to disciplinary action. 106 Confidentiality and iniquity. It may well be that the public interest in the maintenance of standards of health professionals does not extend to having every professional blemish publicly recorded, and that some cases of impaired registrants might properly be kept confidential. Nonetheless, if a medical practice had become, in effect, a refuge for substandard doctors under supervision, that would be a matter of sufficient significance to public health that its disclosure would override private obligations of confidence. In any event, there is nothing to suggest that the restrictions affecting the doctors in question in this case were not on the public record and thus already in the public domain. In my view, the circumstance that AMI employed doctors who were subject to supervision does not have the requisite quality of confidentiality to attract protection in equity. 107 Notice of breach of confidence. It follows that I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. 108 Falsity. I do not accept that the imputation is falsified merely by the circumstance that AMI has "employed" only one doctor, all others being "retained" pursuant to a consultancy agreement; the substance of the imputation is concerned with the quality of the practitioners used by AMI to deliver its services, not the precise legal structure under which they are engaged to do so. 109 The evidence establishes that one AMI doctor, Dr B, is subject to a restriction imposed by the NSW Medical Board that he be supervised. So far as the evidence goes, the requirement arises from what have been described as "personal issues", rather than any issue pertaining to his professional skill or judgment. Dr B is supervised by Dr Berry, in respect of his well-being in relation to those personal issues; she meets with him twice monthly to discuss his physical health, but is not required to supervise him on a continual basis, nor in relation to his consultations with patients; according to Dr Berry there is no requirement to supervise his medical practice. Another AMI doctor, Dr O, is said to be subject to restrictions on practice, the effect of which is to restrict him from practising in any new employment other than under supervision. So far as appears from the evidence, there is no requirement for supervision in his current employment at AMI. This does not suggest any defect in his ability to provide an appropriate professional standard of treatment for AMI customers, though he may be lacking skills for more diverse practice. 110 In my view, while the evidence establishes that AMI employs two doctors who are subject to restrictions on practice in one form or another, it does not support the imputation that AMI engages substandard professionals. To the contrary, the evidence is that there is nothing about Dr B or Dr O that adversely impacts upon their fitness to practice medicine in the context of AMI's practice. The imputation is therefore false in substance. 111 Conclusion. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in this imputation involved a breach of confidence. However, I am satisfied that the imputation is false. An allegation that AMI engaged doctors who were so sub-standard that they could only practice under supervision, or had been the subject of professional disciplinary action, would plainly be detrimental to its business and commercial reputation. Malice 112 In order to consider whether malice is established in the present case, it is appropriate to have regard to all five imputations together, since that is how it is proposed that they be published, and since they have been formulated concurrently, they together rather than individually inform an evaluation of the state of mind of the defendants. 113 Given that they variously impute to AMI intentional disregard of patients' best interests, deception of patients, making claims for which there was no scientific basis, improperly using unqualified personnel to provide medical advice, and using substandard doctors, it cannot be doubted that publication of the imputations is calculated to injure AMI. Moreover, the imputations involve not merely the reporting of facts, but the superimposition on them of a characterisation and interpretation adverse to AMI. In at least four of the imputations, language is used that bespeaks an intent to injure:
· In the first imputation, "so as to provide doctors with a financial incentive to keep those consultations brief and to maximise the volume of prospective purchasers of AMI's products and services, regardless of the patient's best interests" ; · In the second imputation, "so as to ensure that patients were not put off by the unattractive features of the products and services for which they might contract"; · In the third imputation, "to tell patients misleading information regarding treatments"; · In the fourth imputation, "which could only properly be given by a registered medical practitioner to prospective customers and … when such a mode of providing prescriptions was not in accordance with good medical practice or otherwise in the best interests of the patient .
114 The fifth imputation serves no purpose unless it too was intended to injure by impugning the standards of AMI's doctors. In my view, the language of the imputations and their content bespeaks an intention to injure. Such imputations would plainly be calculated to discourage custom, and thus are calculated to cause pecuniary damage. 115 However, an intent to injure does not of itself constitute malice; it does so only if it is without just cause or excuse. It is not malicious to publish, at least other than recklessly, matter that is intended to expose iniquities, even if to do so will necessarily be injurious. 116 I have found, above, that:
· AMI's remuneration structure was not intended to incentivise doctors to disregard patients' best interests, and did not do so; · AMI did not have a practice of reprimanding or threatening doctors with termination for mentioning side-effects; · there is some scientific evidentiary basis in the medical literature - albeit falling well short of scientific proof - for AMI's claim that sustained or prolonged use of its treatments would produce more enduring results than short-term or occasional use; · there was no impropriety in clinical co-ordinators giving such advice as they did in the context in which it was given; · although two doctors engaged by AMI were admittedly subject to restrictions, they were not substandard in any relevant way in the context of AMI's practice. 117 Nonetheless, it does not follow that there is no basis upon which the journalists could have entertained an honest belief in the truth of the imputations; moreover, as explained above, mere absence of an honest belief in the truth of the imputations does not establish malice; although reckless indifference as to truth may do so, particularly when in combination with other factors. 118 AMI submits that an inference of malice should be drawn from the whole of the circumstances. Although AMI did not articulate what was, according to its submission, the defendants' collateral motive, it could only have been the indirect and improper one of publishing a sensational story for commercial benefit, regardless of its accuracy. I accept that that would be a sufficient indirect or improper motive to constitute malice. 119 This submission had many marks of strength, and I confess that for a time I was inclined to favour it. In my mind, the most telling considerations are the absence of evidence to justify the imputations, the manner of their expression and in particular their calculated injurious impact on AMI, and the defendants' persistence in their intention to publish them notwithstanding the evidence as it has emerged in the course of the proceedings - especially in the absence of any evidence to the contrary from the journalists. That the journalists do not give evidence that they have an honest belief in the truth of the imputations, in a case in which their evidence on the issue of motive would have been very pertinent, and their absence from the witness box is unexplained, is of no little significance, and it might readily be inferred that their evidence would not have assisted their case. 120 However, the mere absence of evidence from the defendants does not fill an evidentiary void. All the moreso, it does not warrant an inference in a direction opposite to that which the evidence otherwise suggests. It is at this point that the nature and extent of the inquiries made by the journalists, and in particular their interaction with Dr Almohty, assume considerable, and in my view ultimately decisive, significance. 121 The content of the interview between Dr Almohty and the journalists is in this respect of great importance. In the course of that interview, Dr Almohty conveyed to the journalists information to the effect that:
· AMI remunerated some doctors on a "commission" basis, in order to encourage them to sell medication quickly; · AMI (through Mr Srestha) told her on multiple occasions that she mentioned too many side effects to patients, and that if she continued to do so he could not continue to hire her; · Combinations of medicines used by AMI were dangerous, that there were no clinical trials or scientific evidence at all for them; that a claim that it took time for the medication to build up in the system and work was medical nonsense and false; and that the medication was prescribed for lengthy periods, up to years, for no good medical reason but purely for commercial benefit; · That unqualified salespersons (clinical co-ordinators) effectively pre-sold medication before reference to a doctor; that she had recordings of salespeople blatantly misrepresenting the performance of AMI's treatments to customers; and that a prescription had been improperly created in her name by a salesperson without her authority;
· That some of AMI's doctors were atrocious and should not be allowed to practise. 122 From that source, the journalists had information that provided some basis for them to hold an honest belief in the imputations. Moreover, the tone and flavour of the interview is that the journalists were genuinely endeavouring to elicit information, evidence and facts concerning the affairs of AMI and its practices - albeit in a context that they may have been predisposed to believe the worst. It also reveals that they had undertaken some other inquiries and investigations, and that Dr Almohty was not their sole source. They sought comment from AMI, and Dr Vaisman robustly refuted their allegations; but the journalists were not bound to believe him and to disbelieve Dr Almohty. The evidence reveals a course of inquiry which to my mind bespeaks a good faith, if imperfect, investigation and a good faith, if inaccurate, reportage. Despite their absence from the witness box, and bearing in mind that the plaintiff bears the onus of proving malice, I am ultimately quite unable to be satisfied that they acted with an intent to injure without just cause or excuse; to the contrary, in my view the journalists believed, even if incorrectly, that they had just cause or excuse, namely the exposure of iniquity, injurious to public health, in the way in which AMI carried on business. 123 The plaintiffs suggest that a judicial finding of falsity, such as I have made in respect of each of the imputations, removes any "just cause or excuse" for their publication, with the consequence that to persist in publication in the face of such a finding would necessarily be malicious. For the defendants, Mr Sibtain explicitly eschewed any intention to publish anything found to be false, and maintained that in those circumstances I could not be satisfied that there was such a threat to publish falsehoods maliciously as to justify injunctive relief. 124 I do not accept that it follows from my findings of falsity that any subsequent publication of the imputations would necessarily be malicious - it is conceivable that the defendants might have, or might come into possession of, evidence that was not before the court, and/or that they could honestly and genuinely believe that the court's findings were wrong, even on the evidence before it. I remain unpersuaded that any threatened publication, even in the light of my findings of falsity, would be actuated by malice. 125 It follows that in my opinion, AMI has failed to establish malice on the part of the defendants, which is an essential element of the cause of action in injurious falsehood. That cause of action therefore also fails. Waiver 126 The conclusions that I have otherwise reached on the claim for breach of confidence in respect of the several imputations relieve me of the necessity to consider the defence of waiver. Return of documents 127 AMI maintained a claim for delivery up of documentation in the possession of the defendants, being copies made and retained by the journalists of documents provided to them by Dr Almohty, comprising various records of the business, including patient records, of AMI. The nature of these documents, and the means by which they came into possession of the defendants, is such as to readily permit the inference to be drawn that they must have known, or at the least ought to have known, that a breach of confidence was involved in their provision. The documents revealed no iniquity. AMI is entitled to their return. Conclusion 128 For the foregoing reasons, I have reached the following conclusions. The imputations 129 Commissions. Even if the information contained in the first imputation were the subject of contractual obligations of confidentiality as between Dr Almohty and AMI, the general basis on which AMI remunerated its employed doctors was not inherently or obviously confidential so as to attract equitable protection in the absence of contract, and was certainly not self-evidently so to a third party. Moreover, the asserted purpose of incentivising doctors to disregard patients' best interests, if true, would not have been amenable to protection as confidential information, because to encourage a doctor to act in that manner would be so potentially injurious to public health and contrary to the public interest as to override any private obligation of confidentiality in that respect. I am therefore not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in the first imputation involved a breach of confidence. However, I am satisfied that the imputation was, in substance, false: AMI doctors were not incentivised to compromise standards of care by the remuneration structure, and it was not intended to have that effect. The imputation is self-evidently calculated to harm AMI in respect of its business, in that it conveys that its doctors will prefer their financial interests to patients' proper interests and needs. 130 Deterring reference to side-effects. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in the second imputation involved a breach of confidence. However, I am satisfied that AMI had no such practice as is referred to in this imputation, and that the imputation is therefore false. The imputation is obviously calculated to harm AMI in respect of its business. 131 Absence of scientific evidence. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in the third imputation involved a breach of confidence. However, I am satisfied that this imputation is false, because there is some scientific evidentiary basis, albeit falling well short of scientific proof for AMI's claim that sustained or prolonged use of its treatments would produce more enduring results than short-term or occasional use. It is self-evident that the imputation as framed - involving as it does an assertion of provision to patients of misleading information - is calculated to damage AMI in respect of its business. 132 Unqualified medical advice. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in the fourth imputation involved a breach of confidence. However, I am satisfied that the imputation is false. An allegation that AMI had a practice of giving medical advice improperly through unqualified personnel would plainly be detrimental to its business and commercial reputation. 133 Doctors under supervision. I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in the fifth imputation involved a breach of confidence. However, I am satisfied that the imputation is false. An allegation that AMI engaged doctors who were so sub-standard that they could only practice under supervision would plainly be detrimental to its business and commercial reputation. Breach of confidence 134 It follows that, in respect of all five imputations, the case in breach of confidence fails, essentially because I am not satisfied that Fairfax or the journalists knew, or ought to have known, that provision to them of the information contained in the imputations involved a breach of confidence. That conclusion relieves me of the necessity to consider the defence of waiver. 135 However, I am satisfied that the journalists knew, or ought to have known, that the documentary material provided to them by Dr Almohty and copied by them - including in particular patient records - was provided in breach of confidence. AMI is entitled to have that material delivered up to it, and the defendants restrained from further using it. Injurious falsehood 136 I am satisfied that each of the imputations is substantially false, and is calculated to injure AMI in respect of its business and to cause it pecuniary loss. However, the defendants had information, from Dr Almohty, that provided some basis on which they could hold an honest belief in the imputations. Moreover, the tone and flavour of their interview with Dr Almohty was that they were genuinely endeavouring to elicit information, evidence and facts concerning the affairs of AMI and its practices. They had also undertaken other inquiries and investigations, and were not solely reliant on Dr Almohty. They were not obliged to believe Dr Vaisman's refutation and to disbelieve Dr Almohty. The course of their inquiries bespeaks a good faith, if imperfect, investigation and a good faith, if inaccurate, reportage. Despite their absence from the witness box, and bearing in mind that the plaintiff bears the onus of proving malice, I am ultimately quite unable to be satisfied that they acted with an intent to injure without just cause or excuse; to the contrary, in my view the journalists believed, even if incorrectly, that they had just cause or excuse, namely the exposure of iniquity, injurious to public health, in the way in which AMI carried on business. And it does not follow from my findings of falsity that any subsequent publication of the imputations would necessarily be malicious, as the defendants might have, or might come into possession of, evidence that was not before the court, and/or could honestly and genuinely believe that the court's findings were wrong, even on the evidence before it. 137 It follows that AMI has failed to establish malice on the part of the defendants, which is an essential element of the cause of action in injurious falsehood. That cause of action therefore also fails. Relief 138 AMI is entitled to an order for delivery up of the documentary material provided to the defendants by Dr Almohty. Otherwise, its claims for relief must be dismissed. I will afford the parties an opportunity to make submissions in respect of costs. 139 Subject to any submissions counsel may wish to make in respect of the form of the orders, my orders are: 1. Order that by 8 December 2010 the first, third and fourth defendants, with verification, deliver up to the plaintiffs and delete from all electronic document storage facilities, all original and copy records, in whatsoever form they may exist, of the business of the plaintiffs, including patient records, that were provided to them by the second defendant and are in the possession, custody or power of them or any of them.
11/02/2011 - Correction to typographical error - Paragraph(s) 115, second sentence inclusion of word "not" before "malicious".
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
AMI Australia Holdings Pty Ltd & anor
Fairfax Media Publications Pty Ltd & ors
[2002] HCA 57
(1984) 156 CLR 532
(2002) 58 NSWLR 464
(1987) 8 NSWLR 341
(2006) 227 CLR 57
(1992) 29 NSWLR 1
(1980) 51 FLR 184
(1987) 14 FCR 434
(1990) 19 IPR 147
(1995) 128 FLR 334
(2001) 208 CLR 388
(2002) 212 CLR 1
(1989) 89 ALR 275
(1990) 22 FCR 73
(2000) 77 SASR 419
(1975) 134 CLR 1
(1991) 19 IPR 513
(1991) 22 NSWLR 317
(1990) 22 NSWLR 73
(1923) 40 CLR 201
[2006] HCA 46