(iii) Mrs Ruthnam's evidence is preferred
135 The reasons why I strongly prefer Mrs Ruthnam's evidence of what was said at the 25 August 2015 meeting are as follows.
136 First, I found Mrs Ruthnam to be honest and truthful. She was a responsive witness in what turned out to be a lengthy and searching cross-examination by a very experienced cross-examiner. The highest point of the ACCC's case relates to the response attributed to her in Ramsay's s 155 response, but for reasons which I will later explain I accept her explanation regarding the differences between the account attributed to her in that document and her other evidence relating to the 25 August 2015 conversation.
137 Although, as indicated, I found Dr Joshi generally to be an honest witness, there are several reasons why I hesitate to accept and act upon all his evidence in the absence of strong corroborating material. Those reservations relate to the following matters.
(a) Dr Joshi freely participated in an arrangement with Dr Lim and Dr Lim's wife, Dr Kuswanto, to make redactions from their WhatsApp messages in responding to Ramsay's subpoenas and without disclosing that those redactions had been made. Dr Joshi's evidence under cross-examination was to the effect that he agreed that because the WhatsApp transcripts were common to all who had sent or received the messages, he left it to Dr Kuswanto to decide for all of them which parts of the transcript should be redacted as not being relevant to the proceeding. It is true that many of the redactions are of a personal nature and are not relevant to the issues in the proceeding. Other redactions, however, plainly are relevant, including the redaction of Dr Joshi's message sent on 10 February 2016 at 10:11 pm when he told the others for the first time that he had recorded his dinner meeting with Mr Sims on 3 September 2015. The redacted messages also included Dr Joshi's statement that the ACCC "were excited to hear about the prospect of recordings but I didn't admit to it directly and they couldn't comment on the legality of it". In circumstances where Ramsay had had a subpoena issued to Dr Joshi which required the production of relevant WhatsApp transcripts, it was cavalier and irresponsible of him to delegate the task of determining what material was relevant to Dr Kuswanto and without proper supervision or control by Dr Joshi. These actions derogate from his reliability.
(b) Dr Joshi did not take appropriate steps to preserve the sound recording which he made of his dinner conversation with Mr Sims on 3 September 2015, notwithstanding that he must, or at least should, have appreciated the potential significance of that recording to these proceedings, not the least because it is evident that the deletion occurred after Dr Joshi had met with the ACCC in February 2016. I do not suggest that the deletion was deliberate or made at the request of the ACCC. I accept Dr Joshi's evidence that the recording was inadvertently deleted when he performed a factory reset of his phone to enable its use in his medical practice. When this occurred, however, he had already met with the ACCC and must have been aware of the potential importance of the recording, not the least because, as he told his colleagues, the ACCC "were excited to hear about the prospect of recordings". He ought to have taken proper steps to preserve the recording.
(c) I was left with a strong impression that, from an early stage, Dr Joshi believed that it was important to get the ACCC involved in the surgeons' plans to develop a rival day surgery. This is plainly reflected in the WhatsApp messages which he sent shortly after his meeting with Mrs Ruthnam in which there are several references to that matter. His suggestion of involving the ACCC was strongly supported by Dr Lim. Dr Joshi's willingness to engage in conduct in order to achieve a desired outcome in his self-interest is also reflected in the draft letter which he prepared to send to Mrs Ruthnam, which he candidly described at the top of the email as "baiting" (see [105] above). Similarly, Dr Joshi was prepared to lend his name in support of the letter of complaint which was sent to the ACCC. That letter stated that Mrs Ruthnam had told several surgeons that if they brought any of their patients to a competitor day surgery, their "operating privileges at Ramsay would also be revoked" and that Mr Sims had confirmed to Dr Joshi that Ramsay would indeed seek to "revoke" the operating rights of surgeons who bring their work to another day surgery in Coffs Harbour. This is to be contrasted with Dr Joshi's ultimate acceptance in cross-examination that Mrs Ruthnam did not use the words "privileges will be revoked" when she spoke with him on 25 August 2015. Furthermore, it is clear from Dr Joshi's WhatsApp message at 2:23 pm on 25 August 2015 that the topic of deaccreditation arose from his own conjecture as to what Mrs Ruthnam meant by saying "surgeons would have to choose". These matters show that at times Dr Joshi was prone to exaggerate or overstate matters if he believed that it was in his self-interest to do so.
(d) My further impression is that important parts of Dr Joshi's evidence, including that relating to what was actually said during the conversation on 25 August 2015, were more reflective of Dr Joshi's perception of what had been said, rather than accurately recording or identifying the words which were actually used. As Ramsay submitted, this may have been because Dr Joshi frankly acknowledged that, prior to the conversation on 25 August 2015, he had not considered the implications of taking away all his day surgeries from Baringa, including his loss of priority and the possibility of Ramsay recruiting other surgeons. His perceptions or impressions also appear to have been affected by his prior knowledge of the events at Hurstville, a matter which Dr Joshi mentioned in his WhatsApp message which is set out at [93] above. The terms of that message (particularly the use of parentheses) suggest that the reference to Hurstville was something he recalled, rather than something which Mrs Ruthnam said to him on 25 August 2015.
138 Secondly, I do not accept Mr Joshi's evidence that, on 25 August 2015, Mrs Ruthnam told him that if he took his day surgery work away from Baringa he would not have any lists there, that he "would not be able to do any work at Baringa" or that he "could not rely on being able to do any cases that required inpatient stay at Baringa if I took my work elsewhere". The relatively contemporaneous WhatsApp messages do not record Dr Joshi telling his colleagues that Mrs Ruthnam had told him any of these things. Rather, they record him telling them that Mrs Ruthnam planned to kick them all out. When asked by Dr Lim to explain the basis for kicking them out, Dr Joshi responded by saying that Mrs Ruthnam said that surgeons would have to choose and that they "may deaccredit us or restrict o/t [i.e. operating theatre] time". Yet, as noted, Dr Joshi ultimately accepted in cross-examination on both 4 March 2019 and 3 December 2019 that Mrs Ruthnam did not use the specific words "deaccredit" or "kick out". Nor did he think that she used the specific words "restrict operating time". It is difficult to reconcile this evidence with the terms of Dr Joshi's own WhatsApp messages sent to his colleagues on 25 August 2015.
139 I do not accept Dr Joshi's evidence in cross-examination that by using the word "restrict" he meant that he would be given no operating time at all. This is inconsistent with the ordinary meaning of that term, which he used in his WhatsApp message, which is to reduce or limit his operating time and not to exclude it altogether.
140 Thirdly, Mrs Ruthnam sent an email to Mr Passmore on 15 February 2016, just before she met again with Dr Joshi, in which she told Mr Passmore that Dr Joshi was "still very upset at Ramsay's position re the security of his lists if he competes against us". This accords with Mrs Ruthnam's evidence that the conversation she had with Dr Joshi focussed on the topic of the security or priority of his lists if he were involved in the day surgery. I accept Ramsay's submission that, on its face this email is a reference to what was conveyed to Dr Joshi as to Ramsay's position on 25 August 2015. Mrs Ruthnam confirmed as much. The language of "security of lists" reflects the language used by Mrs Ruthnam in her conversation with Dr Sutherland on 28 August 2015 where she spoke of lists no longer being "guaranteed", as well as the language in the conversation with Dr Joshi of not being able to "rely" on continuing to have the same lists. The email underlines the likelihood that a message to the same effect as that conveyed to Dr Sutherland was conveyed to Dr Joshi on 25 August 2015. Dr Joshi accepted that the effect of his conversation with Mrs Ruthnam in February 2016 was that by taking away his day surgery work, he would be "risking the security of the existing lists" he had.
141 Fourthly, I accept Ramsay's submission that Dr Joshi may have either overreacted or misunderstood the message he received from Mrs Ruthnam on 25 August 2015. The issue of a potential loss of his priority came as a shock and surprise to him and may have coloured his perception of what Mrs Ruthnam was saying to him. Having reviewed Dr Joshi's evidence and demeanour, although I accept that generally he was an honest witness, as noted above at [137(d)] I consider that much of his evidence reflected his personal impression or perception of what he was being told by Mrs Ruthnam, rather than accurately reflecting the actual words which she used. This is well illustrated by the terms of the two draft emails which Dr Joshi prepared and sent to Dr Lim on 26 August 2015, the day after his meeting with Mrs Ruthnam (see [105] above). That draft letter refers twice to Dr Joshi wanting to clarify what Mrs Ruthnam had said, and includes a reference to the position being "a bit vague". I recognise that the draft letters were prepared by Dr Joshi as "bait" as referred to in the introductory part of his email, but it is also significant that Dr Joshi agreed in cross-examination that he wanted clarification following the 25 August 2015 conversation. This would be unnecessary if he had a clear recollection of what Mrs Ruthnam had said.
142 Fifthly, I do not consider that any particular significance attaches to the fact that on 28 August 2015 Dr Joshi sent an email to the other proponents in which he claimed that Mrs Ruthnam had told him that "we would hate to lose you at Baringa". As noted at [128] above, I accept Mrs Ruthnam's evidence under cross-examination as to what she meant by this expression.
143 It is notable that Mrs Ruthnam used a similar expression in her conversation with Dr Sutherland only three days after she had met with Dr Joshi. Dr Sutherland's sound recording contains the following exchange between Mrs Ruthnam and him on 28 August 2015 on the topic of "not losing him":
No it won't hurt because you know we have a sustained approach to growing the business but we don't want to lose you…
However, I just might end by saying we don't want to lose you and your business...
144 I accept Ramsay's submission that the expression "I would hate to lose you" was used by Mrs Ruthnam in respect of both Dr Joshi and Dr Sutherland to indicate that she didn't want Baringa to lose their valuable day surgery work, which could occur if the existing priority in their lists at Baringa was changed and they did less work at Baringa. This reading is consistent with evidence that Mrs Ruthnam raised the prospect of purchasing new equipment in seeking to retain both Dr Joshi's and Dr Sutherland's day surgery work at CHDS.
145 Sixthly, and critically, I do not accept the ACCC's submission that Dr Joshi's account of what he was told by Mrs Ruthnam on 25 August 2015 should be preferred because Mrs Ruthnam had effectively confirmed the accuracy of Dr Joshi's account of their conversation with reference to what was attributed to her in Ramsay's response dated 27 May 2016 to the s 155 notice. That response contained the following statements attributed to Mrs Ruthnam:
I'm sorry but if you remove your more lucrative high turnover surgery from Baringa then RHC won't facilitate that by having you work here. We would recruit to our losses. That won't be happening. You can't be working at two hospitals. That is not fair to Ramsay and Ramsay will not tolerate this.
I'm just trying to make the business work and the business cannot work when someone rips part of the business out of it that is profitable.
146 For the following reasons, I consider that the ACCC has overstated the significance of that response.
(a) When Mrs Ruthnam's attention was drawn to Ramsay's s 155 response, she did not resile from her oral evidence regarding her conversation with Dr Joshi on 25 August 2015. She explained that she had provided information to Ramsay for the purposes of Ramsay responding to the s 155 notice. When pressed in cross-examination, Mrs Ruthnam acknowledged that she "must have" provided information which provided the foundation for that set out in the s 155 reply and that this must have been her best recollection at that time, but she stated in cross-examination that it wasn't her best recollection now. She said that her further recollection is that she gave Dr Joshi the same message as she did to the other doctors to whom she spoke, namely that "he couldn't rely on keeping all his major lists at Baringa". I accept that evidence. When reminded of the chronology of events, including her email dated 20 August 2015 in which she asked for guidance from Mr Passmore as to what to say to the surgeons, which request was made prior to her meeting with Dr Joshi, Mrs Ruthnam truthfully acknowledged that, as at 25 August 2015, she wasn't aware of Ms Cunningham's legal advice. Under cross-examination, however, Mrs Ruthnam stated that she had been instructed by Mr Passmore in his email dated 20 August 2015 of the need for caution in using market power. I accept that evidence. It is confirmed by the contemporaneous documents. I find that Mrs Ruthnam is by nature a cautious and truthful person. Her caution and appreciation of potentially relevant competition law constraints on what Ramsay could lawfully say to the proponents of the new day surgery is reflected in the fact that, several months before her 19 August 2015 email request to Mr Passmore for guidance (see [111] above), she sent him another email on 17 June 2015 (shortly after her meeting with Dr Lim regarding his involvement in the new day surgery), when she asked Mr Passmore:
Have you had your meetings with Katrina and Danny regarding the Company's position regarding this threat to our business?
The reference to "Katrina" is to Ms Cunningham and the reference to "Danny" is to Mr Sims.
And in the email Mrs Ruthnam sent to Mr Passmore on 20 August 2015 (see [114] above), she said that "we need to define our legal competitive response". This was a matter which plainly was still at the forefront of Mrs Ruthnam's mind at that time, which was shortly before she met with Dr Joshi.
(b) Mrs Ruthnam's email dated 17 June 2015 apparently stems from what is recorded in Mr Passmore's file note dated 4 June 2015 of his discussion that day with Mrs Ruthnam, which is set out at [60] of Pt B above). After noting "Can we initiate the Hurstville/St George strategy → Urologist → Vascular - out of Baringa?", Mr Passmore then made the following entry:
"Actions to be taken - meet with Danny + Katrina
- ?OT in Baringa Centre".
(c) It may be inferred from this file note, together with Mrs Ruthnam's email dated 17 June 2015, that both Mr Passmore and she saw the need to obtain specific legal advice from Ms Cunningham on any relevant competition law constraints on how they should respond to the threat to Ramsay's business. In these circumstances, I think it most unlikely that Mrs Ruthnam would have cast aside the need for caution and pre-empt the legal advice which she knew was forthcoming by telling Dr Joshi the things he claims she said to him on 25 August 2015.
(d) Mrs Ruthnam's evidence under cross-examination regarding the circumstances surrounding her provision of information for the purposes of Ramsay's s 155 response, as described above, is not new. She said substantially the same thing in her s 155 examination on 21 July 2016. She said then that she wasn't sure she had "actually interrogated" Ramsay's final response, but that she had edited "my content with the first draft, which wasn't in this format" (referring to the format of Ramsay's final s 155 response) and that she assumed that her comments had been recorded as provided by her.
(e) The ACCC submitted that it was incumbent upon Ramsay to adduce relevant evidence to support any suggestion by it that Mrs Ruthnam's instructions regarding what she told Dr Joshi on 25 August 2015 were not faithfully recorded in the relevant entry in Ramsay's s 155 response. There is some force in that submission. For completeness, however, it should also be noted that in the course of the lengthy s 155 examination of Mrs Ruthnam, which occupied 129 pages of substantive text, Mrs Ruthnam was asked no questions at all by any of her examiners with a specific focus on the relevant entry in Ramsay's s 155 notice concerning her conversation with Dr Joshi on 25 August 2015. In particular, it is significant to note that she was asked no questions as to how she reconciled her repeated evidence in her s 155 examination that she gave the same message to each of the surgeons with the statements attributed to her in Ramsay's s 155 notice regarding what she told Dr Joshi on 25 August 2015.
(f) Moreover, Mrs Ruthnam's further recollection of what she said to Dr Joshi, as opposed to what is recorded in Ramsay's s 155 notice, is broadly consistent with her evidence in her s 155 examination which was conducted on 21 July 2016. When she was asked to describe the message which she and Mr Passmore agreed should be conveyed to the doctors involved in the proposed new day surgery, Mrs Ruthnam said the following:
So, the message was doctors do both - some doctors do only day procedures. Opthalmologists would normally only do day procedures, so they're in a slightly different category. Other surgeons usually do minor surgery and major surgery, the minor surgery being either in a day facility or in a hospital that admits the patient just for the day. So some of our minor surgery is done in our major theatres. So there is an effect not only on our numbers, so there's an effect on our theatre lists, which are regularly allocated and reviewed six-monthly. So there would be an effect of this, and I was asked to communicate to the doctors that the effect of the change in our list may not be to their advantage.
(g) Later in her s 155 examination, after Mrs Ruthnam was asked to describe the substance of the conversations she agreed with Mr Passmore to have with the doctors, she said:
Just what I said before - that we should try to establish who's involved, why are they involved, is it because of some deficit on our part, whether it's staff or equipment or space or access to theatre lists, as Dr Sutherland had stated. And to say - I did state to the doctors that I wasn't obliged to have this conversation, but I felt that it was a fair thing to do to say that there would be a consequence to them working in two or three different facilities at the same time, and it would have an effect on our business and that we would do those things and reorder our theatre lists and recruit to our losses. Those were actually the terms that I used.
(h) Ramsay made the following submission regarding the significance which the ACCC ultimately attached to what was attributed to Mrs Ruthnam in Ramsay's s 155 response, as opposed to her evidence under cross-examination:
Thus, the ACCC obtained two responses under compulsory process, one from the company and one from Mrs Ruthnam directly. During her s 155 examination, it did not seek to explore with Mrs Ruthnam any inconsistency between her direct response and the company response and indeed implicitly accepted her direct response. Yet when it comes to trial, in seeking to assist the Court in making factual findings as to what occurred, being findings on a serious charge, the ACCC cross-examines only on one part of the company response, chooses not to take her to her direct response, resists the Court learning about her full s 155 response and successfully resists Mrs Ruthnam being given the opportunity in re-examination to explain, as she inevitably would have, that her s 155 response, as the ACCC itself appeared to accept at that time, represented her honest and best recollection of the relevant conversations at about that time, and that one part of the company response, however it came to be prepared, did not.
There is considerable force in that submission.
147 That Mrs Ruthnam conveyed to Dr Joshi that he could not rely on his major lists if he was to take all of his day surgery to another facility is also confirmed by an email she sent on 15 February 2016, just before she met with Dr Joshi again:
Have usual periodic appointment to see him tomorrow. Will see what he tells me. Obviously still very upset at Ramsay's position re the security of his lists if he competes against us.
148 Seventhly, I do not accept the ACCC's submission that the "balance" and "policy" to which she repeatedly referred to in her evidence was a "confection", which was designed to disguise Ramsay's anti-competitive response to the threat posed by the proposed day surgery. I do not accept that the "policy" derives no support from the Facility Rules. In particular, I consider that cl 18 of the Facility Rules expressly provided that the availability or allocation of theatre sessions would be reviewed by the CEO and that the CEO had an "absolute discretion to allocate and to change the allocation of theatre sessions", taking into account a non-exhaustive list of factors, including in cl 18.2 "commercial strategies and priorities of the Facility and/or Ramsay Health Care" and, significantly, in cl 18.3 "the case mix of that Accredited Practitioner and the Facility". This adequately recognises the commercial desirability of the CEO maximising utilisation of Baringa's operating theatres for Ramsay's financial benefit.
149 The practical application of that factor or "policy" is well illustrated by an email which Mrs Ruthnam sent to one of Baringa's accredited surgeons (Dr Robert Kalmar) on 4 September 2015. Mrs Ruthnam sent that email in advance of a meeting the following week with Dr Kalmar which was for the purpose of discussing proposed changes in his theatre allocation times. Mrs Ruthnam said in her email:
In our most recent theatre utilisation review your utilisation of your allocated theatre time has reduced to 58%. You have discussed your change of lifestyle and I applaud your ability to work less! However the executive team is required to make and report our efficiency strategies for the management of our theatres. The changes we are required to make are as follows: your main theatre list will remain on Thursday of week 2 but will be reduced from a full day to a half day so your new allocation will be on Thursday afternoon. This will not be operational until 22nd October to provide you with adequate notice. For your endoscopy list this will change from week 3 in the theatre cycle to week 2. This will be operational from Wednesday 21st October.
150 For the reasons explained by Mrs Ruthnam in her evidence, she had a natural concern as Baringa's CEO to maximise its financial profitability. This meant that, in allocating theatre lists, she took into account a range of factors, including the value of an individual surgeon's contribution to Baringa's profitability. She gave preference to the most valuable contributors, not only by allocating to them more attractive theatre lists in terms of their timing, but also by seeking to accommodate the medical needs of those surgeons' medical practices so that they continued to contribute to Ramsay's profitability.
151 Mrs Ruthnam's desire to give preference to surgeons who provide the most valuable work at Baringa is well illustrated in her dealings with Dr Sutherland, not only in respect of what is recorded in Dr Sutherland's sound recording of their conversation of 28 August 2015, but also in the email which Mrs Ruthnam sent to Dr Sutherland on 4 September 2015. There, she described in some detail how she could address some of the requirements relating to his practice as raised by him at their meeting on 28 August 2015, including improving his allocated lists.
152 Finally, I reject the ACCC's submission that [152] of Mrs Ruthnam's affidavit is consistent with [106] of the FASOC, with particular reference to her telling Mr Passmore that she had told Dr Joshi that he "shouldn't rely on keeping all of his major surgeries at BPH" (emphasis added). The position would be different if she had used the word "any". But the notion of Dr Joshi not relying on keeping all his major surgeries at Baringa is consistent with what Mrs Ruthnam told Dr Sutherland and the other surgeons with whom she spoke that there may be changes to their major theatre lists, in the sense of a loss of priority, if they took their day surgery away.