BERAN v CHANNEL SEVEN PTY LTD

CHANNEL SEVEN SYDNEY PTY LTD (Defendant) FILE NUMBER(S) : SC 20546 OF 2001 B McClintock SC (Plaintiff) COUNSEL : K Smark (Defendant) Corrs Chambers Westgarth (Plaintiff) SOLICITORS : Mallesons Stephen Jacques (Defendant)

• 8 - [2003] NSWSC 272 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DEFAMATION LIST

JUDGMENT (Discovery - issue of falsity of imputations going to aggravated damages - SCR Pt 23 - the "Tabe" discretion) 1 The plaintiff sues the defendant for damages for defamation in relation to a "Today Tonight" program broadcast on 13 February 2001. A transcript of that program is appended hereto and marked "A". 2 On 13 February 2002 a jury found that the matter complained of contained the following defamatory imputations of the plaintiff: (a) The plaintiff betrayed the medical interests of his patients by conducting clinical trials for experimental drugs on his patients in such a manner as to undermine the patient/doctor relationship. (b) The plaintiff had failed, contrary to his obligations as a doctor, to ensure that his patients understood what they would endure and undergo when recruiting them for drug tests. (c) The plaintiff is a greedy profiteer. (d) The plaintiff pushed drugs on his patients in return for payment by drug companies. (e) The plaintiff placed his own financial gains ahead of the lives of his patients and their human rights, which was an outrageously wrong thing to do. 3 By its defence filed on 18 March 2002, the defendant pleads substantively the defences of qualified privilege at common law and pursuant to s22 Defamation Act, and interstate qualified protection defences. In mitigation of damages the defendant relies upon the circumstances in which the plaintiff proved at trial that the publication was made and other proceedings apparently instituted by the plaintiff against John Fairfax Publications Pty Ltd. 4 It is to be observed that in the context of the privilege defences, the defendant nominates the following subjects of public interest: 1. The clinical trial of experimental drugs. 2. The payment by drug companies of fees to medical practitioners in respect of patients who take part in clinical trials of experimental drugs. 3. The regulation of clinical trials of experimental drugs. 4. The involvement of developmentally disabled people in clinical trials of experimental drugs. 5. The relationship between medical practitioners and their patients. 6. The ethical considerations in the relation to the conduct of clinical trials of experimental drugs including the payment by drug companies of fees to medical practitioners in respect thereof. 7. The obligation of medical practitioners to obtain informed consent from patients who participate in clinical trials of experimental drugs. 5 Of immediate relevance, however, is the claim by the plaintiff of an entitlement to aggravated damages by reason of "his knowledge of the falsity of the imputations". The defendant has not justified nor has it raised the truth of the imputations, or their substantial truth, in mitigation of damages. 6 The plaintiff having raised the issue of aggravated damages on the asserted basis, the law is clear that an issue has arisen on the pleadings and that the defendant is entitled to be given, and the plaintiff is obliged to give, discovery of documents in relation to that issue: Tabe v Amalgamated Television Services Pty Ltd, Hunt J, unreported, 27 March 1987; on appeal, NSWCA, 7 December 1987, A Def R 50,025. It is equally clear that there reposes in the judge a discretion whether or not to order such discovery. This discretion is in fact referred to by each of Samuels JA and Mahoney JA in the Court of Appeal and particularly by McLelland AJA (see Waterhouse v Perkins [2001] NSWSC 13 per Levine J at [62]; Murphy v Nationwide News Pty Ltd [2000] NSWSC 813 per Levine J at [46]; SCR Pt 23 r 3). 7 On 8 June 2002 the plaintiff filed his List of Documents. Part 1 of schedule 1 of that list sets out the following four documents: 1. Video of "Today Tonight"; 2. Curriculae Vitae of Dr Roy Beran; 3. Letter to the Editor, Diane and Stephen Power; 4. Bundle of newspaper clippings. 8 By notice of motion filed 23 August 2002 the defendant seeks an order that the plaintiff give verified discovery of documents in the categories listed in an annexure to the notice of motion. That annexure is appended to these reasons and marked "B". In support of the notice of motion an affidavit of Ian Robert Angus, solicitor for the defendant sworn 22 August 2002 was read. Annexed to that affidavit is the defendant's List of Documents and a letter from the solicitors for the defendant to the solicitors for the plaintiff dated 17 July 2002 which sets out the defendant's requirement as to discovery in the same terms as the annexure to the notice of motion. 9 In opposition to the motion an affidavit sworn 4 October 2002 by Joseph Kouper of the plaintiff's solicitors was read and it is desirable to set out its substance: "4 I am informed by the plaintiff and believe that he has conducted drug trials for more than 10 years, involving approximately 360 subjects. I am informed by the plaintiff and verily believe that each participant generates between 1 and 8 files per trial, each file generally containing over 250 pages. 5 Patient treatment documents requested by the Defendant would potentially fall within the professional confidential relationship privilege under section 126B of the Evidence Act (NSW) 1995 and I am informed by the Plaintiff and believe he would need his solicitors to review this material in order to determine this. 6 I am also informed by the Plaintiff and believe that he would need his solicitors to review all the documents requested by the Defendant, including financial information held by accountants, in order to ensure relevance. 7 The rate Corrs Chambers Westgarth would charge for me to review the documents to comply with the Defendant's request would be $220.00 per hour. I estimate that reviewing patient files generated by drug trials as referred to in paragraph 4 above, would cost $396,000.00 based on there being at least 4 files in relation to 360 subjects and spending at least 5 hours per subject in a situation where all the information had already been extracted by the plaintiff. There would be additional cost involved in reviewing other documents, such as financial information held by accountants and academic papers written by the plaintiff. 8 I am informed by the plaintiff and believe that not all the material requested by the Defendant is held in the Plaintiff's offices and there will be considerable time and effort involved on his part in retrieving and organising documents for review by his solicitors. 9 I am further informed by the Plaintiff and believe that should he have to notify each patient in relation to possible claims of privilege under s126 of the Evidence Act, it will involve, in some cases, making enquiries regarding the whereabouts of patients, particularly those involved in drug trials prior to three years ago". 10 In addition to the material hitherto mentioned, for the defendant applicant was tendered a bundle of correspondence (exhibit A) between the parties' solicitors. By the first letter dated 25 September 2002, the defendant's solicitors invited the plaintiff's solicitors to give informal discovery of documents falling within annexure "A", limiting the "patients" to those whose surnames begin with the letters "J" to "L". This offer was rejected by letter dated 4 October 2002. By letter dated 10 October 2002 the defendant limited the reference to "drug trial" in annexure A to the Notice of Motion as relating to "a drug trial conducted (in whole or in part) by the plaintiff". This was also rejected by the plaintiff's solicitors by letter dated 15 October 2002. 11 The plaintiff perceives the defendant's request for discovery as of a very broad nature, in effect requiring the discovery of any document relating to the subject of drug trials. The parties are at issue as to what may be described as the "parameters" of the found imputations. 12 The plaintiff sees imputation (a) as requiring, if anything, discovery of documents relevant to the truth or falsity of the notion of the relevant "betrayal" of patients' medical interests. The discovery should not extend to all documents relative to the conduct of trials by the plaintiff, it is contended, but only those which show "betrayal". 13 In relation to imputation (b) the plaintiff contends the documents relevant to the truth or falsity of the imputation are those relating to communications by the plaintiff with his patients when recruiting them for drug trials regarding what they would endure and undergo during such trials. 14 With respect to imputation (c) the area of relevance is "greedy" and "profiteer"; thus discovery would not extend to financial information as this does not demonstrate, or could not demonstrate, these qualities imputed to the plaintiff. 15 Imputation (d) is concerned with the "pushing" of drugs on patients in return for payment by the drug companies. The discovery sought by the defendant does not extend to financial information as this does not demonstrate that drugs were "pushed" in the sense of the wording of the imputation. 16 Imputation (e) points to the need for the discovery of any documents relevant to the truth or falsity of the component concerning the plaintiff placing his own financial gain ahead of the lives and human rights of his patients. Again, the plaintiff contends that this does not mean that all documents relating to the conduct of drug trials by him are relevant but only those indicating the "prioritising" of financial gain. Financial information, generally, is not relevant because it does not indicate that financial gain was so "prioritised". 17 The defendant simply states that the imputations found by the jury centre upon the following matters: (1) the plaintiff's involvement in, and conduct of, drug trials; (2) payment to the plaintiff in respect of drug trials; (3) disclosures made by the plaintiff to patients involved in drug trials. 18 The plaintiff asserts that paragraphs 1 - 6 of annexure B take no account of the parameters outlined above. 19 The first paragraph of the annexure seeks all documents relating to the conduct of drug trials, including the initial assessment of candidates and financial information. The flaw, so the plaintiff contends, is that the paragraph extends to drug trials not conducted by him and could include drug trials not only in this country but also overseas. 20 The second paragraph refers to the Guardianship Board or the Guardianship Tribunal, neither of which is referred to in the imputations or by name in the matter complained of. Again, the category seeks documents relating to any drug trial whether conducted by the plaintiff and whether or not in Australia or overseas. 21 The third paragraph of the annexure requires documents relating to the Epilepsy Association of New South Wales and any Ethics Committees. This category, the plaintiff contends, does not limit the documents sought to those relating to drug trials conducted by him or indeed any drug trials. On that basis alone the category requires discovery of irrelevant documents. 22 For the plaintiff it is contended that the fourth paragraph of the annexure requests discovery of documents concerning the conduct of any drug trial, whether actual or proposed, and outlines or documents are included, making it plain that the documents sought are not limited to those in fact listed. Again, the category seeks documents relating to drug trials not conducted by the plaintiff. 23 With respect to paragraph 5 of the annexure, the period stated is from 1 January 1990 to 1 January 2002 (ten years expiring after the date of publication of the matter complained of). The plaintiff objects to giving discovery of documents relating to any complaint, in that there is a requirement for the discovery of irrelevant material insofar as complaints, let alone mere "inquiries", may have been unsubstantiated (cf Murphy, supra, at paragraphs [38] and [39]). Further, documents relating to "concern, question or inquiry", whether related to any act or condition of the plaintiff or not, are irrelevant. Again, unjustified concerns may have been raised and thus be irrelevant. 24 As to paragraph 5(b), the plaintiff complains that the requirement here is not restricted to drug trials involving the plaintiff and to that extent are irrelevant. Further, none of the imputations refers to intellectually challenged or developmentally disabled persons. 25 Paragraph 6(a) of the annexure seeks, among other things, documents relating to any "complaints, concerns or questions or inquiries" made to "or about" the plaintiff "by any person" concerning "any drug trial". Again, the plaintiff complains of the irrelevance of such material, and also points to drug trials with which he had no connection and financial information is irrelevant to the truth or falsity of the imputations as set out above. Similar complaint is made in relation to the requirement of discovery of financial information as set out in paragraph 6(b); it is not limited to drug trials conducted by the plaintiff, for example. 26 Paragraph 6(c) is again very widely worded and the use of "interested" catches an extremely wide range of persons or organisations whose interest in the drug trials would have no bearing on the truth or falsity of the imputations. 27 The plaintiff takes the general objection, in the light of the analysis above, and against the background of the parameters of the imputations, that discovery, as sought, is oppressive. The evidence relied upon by the plaintiff is set out above and there would be involved an immense amount of labour and cost in retrieving and reviewing archived records. Further, the plaintiff would be obliged to consider retrieved material in the context of potential claims for privilege under s126B of the Evidence Act (protected confidences). 28 Even the limitation that the defendant has offered, by way of a sample of persons whose names begin with a certain letter of the alphabet but whose name is otherwise obliterated, might not overcome concerns in the plaintiff that such confidences would be exposed. 29 In addition to the matters upon which the defendant contends the imputations centre, as set out above, the defendant says that the imputations can be viewed against the background of the matter complained of and suggest that aspects of the plaintiff's conduct of drug trials that are relevant include the composition and conduct of Ethics Committees associated with the plaintiff (that is certainly referred to in the text of the matter complained of) and dealings between the plaintiff and representatives of intellectually disabled persons (which in my view is not dealt with in the matter complained of). 30 It is the "new" SCR Pt 23 that now governs discovery. SCR Pt 23 r 1(d) is as follows: "(d) a document or matter is to be taken to be relevant to a fact in issue if it could, or contains material which could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or matter would be admissible in evidence".

This points to the fundamental test to be applied (see National Australia Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8). 31 It is to be borne in mind that the issue between the parties is whether or not the plaintiff is entitled to aggravated compensatory damages by reason of the increased hurt to his feelings he will no doubt allege that he sustained by reason of what he will no doubt assert to be the mere falsity of the imputations. The evidence in support of those propositions, in relation to each imputation, will be a matter of but a few sentences. The defendant has not justified; the defendant has raised no matter in mitigation of damages connected with the truth of the imputations. Yet it is the present state of the law, following Tabe, that this does create an issue on the pleadings between the parties entitling a defendant to discovery. 32 The defendant not having itself raised truth, one could be forgiven the view upon reading annexure A, that the discovery exercise is "disproportionate" to the particular matter in issue which involves short oral evidence as to a subjective state in the plaintiff and an assertion that the meanings are "false" and that is the reason for the increased hurt to feelings. What the defendant will be testing of course is the integrity of the plaintiff's assertion of the subjective component, and presumably will seek to test the reasonableness of the plaintiff's claim in that regard by reference to something about the truth or falsity of the imputations, the defendant, however, not otherwise availing itself of substantive defences it has in relation to the latter aspect. 33 When one bears in mind that the plaintiff's action for damages for defamation is a personal one, but the issue raised on the question of damages is, in the sense I have described, personal, much of that which the defendant seeks by way of discovery must fall away. The plaintiff's complaints in relation to drug tests carried out by persons other than the plaintiff, especially over a decade, references to institutions and other bodies that are not referred to in the matter complained of or in the imputations, are well founded. A mere question of "proportion" could be insufficient or indeed an erroneous basis for precluding relief of the kind the defendant seeks. One must also, however, bear in mind SCR Pt 1 r 3 and the overriding purpose of the Rules in their application to civil proceedings being to facilitate the just, quick and cheap resolution of the real issues in such proceedings. 34 In the course of submissions Mr Smark for the defendant identified his client's approach as being that if the application for discovery can be narrowed in any rational way, the defendant is willing to do so. The Court might think, he submitted, that it is a matter of some redress that the plaintiff has not been willing to identify the manner in which the orders may be limited. At this point I would remark that in the face of the annexure I do not see any difficulty at all with the position adopted by the plaintiff and as sworn to in the affidavit in opposition to the motion. The plaintiff points to the application as one inviting myself to "rewrite" it. I do not see it as the Court's function to "settle" a dispute between the parties as to discovery along the lines as disclosed by the language used by Mr Smark and Mr McClintock. 35 However I am persuaded, in the end, by the submissions for the plaintiff in relation to oppression generally, and the more detailed analysis of paragraphs 2-6 of the annexure, that although the issues have arisen on the pleadings, it cannot be said at this stage that any of the material referred to in those paragraphs has or may have some relevance to the two components of the issues constituted by the claim for aggravated damages. 36 It is paragraph 1 of annexure B that in very general terms captures the areas of relevance, in my view, identified both by the plaintiff and the defendant as the "parameters" for the relevant aspects of the plaintiff's conduct referred to in the matter complained of and the imputations. 37 In his affidavit Mr Cooper swears to his being informed by the plaintiff that the plaintiff has in fact conducted drug trials for more than ten years involving 360 subjects. The first limitation that seems to make sense to me is to limit the period from 1 January 1990 to 31 December 2000. The second limitation is to limit the number of subjects, referred to by initials only, at this stage, to ten: five from the first five years and five from the second five years. The third limitation is in relation to documents relating to the examination or treatment or assessment by the plaintiff alone and of any person for the purposes or considering or placing that person on a drug trial and/or conducting or recording such drug trial by the plaintiff including personal files and notes, treatment records, medical reports, clinical notes, consent forms, invoice receipts, Medicare or Health Insurance Commission invoices and receipts and records of payments requested or perceived by the plaintiff from any person or company or institution. 38 The plaintiff's concerns about s126B of the Evidence Act can be reflected in a properly drawn affidavit of discovery in response to the Court's order. 39 Otherwise I am of the view that the plaintiff's complaint, as I have said as to general oppression and irrelevance has been made out. 40 Accordingly the orders are:

1. The plaintiff is to give discovery in accordance with paragraph 37 of these reasons and is to deliver a verified list within 28 days of today.
2. The defendant's notice of motion is dismissed.
3. The defendant is to pay two-thirds of the plaintiff's costs of the motion.
4. The action is to be listed in the Registrar's Defamation Directions List on 30 May 2003.

"A" Presenter: Well next up our exclusive interview with a doctor being paid by drug companies to put his patients on clinical trials and just how widespread it now is. Dr Tattersall: There is a potential for patients to be recruited and not understand what they've let themselves in for. Dr Beran: There is nothing wrong with being paid for services rendered. Advertising Break Presenter: Millions of Australians rely on wonder drugs to improve their quality of life gaining relief for everything from arthritis to epilepsy. But what many of us may not know is that sometimes those drugs are pushed on patients by doctors who get paid by the drug companies to recruit people to test their products. And that finders fee could run into thousands of dollars. As Dr John D'arcy reports, its not against the law, but is it fair? Dr D'arcy: This doctor has made thousands of dollars by enrolling his patients on clinical trials for experimental drugs. Dr Beran I'm actually very proud of the fact that we have produced a number of scientific works based on what we do. And they are all designed for patient well-being. Dr D'arcy: Like many other doctors, neurologist Roy Beran is paid as much as $6,000 for every patient he recruits to drug trials. Dr Beran: There is nothing wrong for being compensated for the extreme amounts of time and effort that go into doing clinical research. Dr D'arcy: Now you might think its wrong money changes hands whilst the experiment goes on. Dr Beran: The recompense you get is calculated basically to recompense that time, effort, expertise and knowledge. Dr Tattersall: It seems to me there is a potential for patients to be recruited and not understand what they've let themselves in for. Dr D'arcy: Martin Tattersall is the Professor of cancer medicine at the University of Sydney. Dr Tattersall: It may be dissatisfaction and it may be perhaps sometimes side effects of treatment of which they were not aware. Dr D'arcy: In some cases it's alleged the patients don't even know they're on a trial and remember the doctor is getting paid by the pharmaceutical industry for putting them on it. Dr Tattersall: I am concerned that the balance between the investigator and the doctor and the patient has been upset by the increasing power of the industry and I think that that balance could undermine the doctor/patient trust relationship. Dr D'arcy: There are concerns that not only is the patient's trust being tested, but also the accuracy of private clinical trials. Dr Beran: It is a scurrilous allegation. In fact private research has to be far more scrupulous in what it does than anywhere else because you have to be aware there are people out there, as has happened today, prepared to criticise. You cannot skew sci..., this is fraud and I wouldn't be party to scientific fraud, in fact I find it offensive that anybody would accuse me of such. Dr D'arcy: So, how has this happened? In 1991, the decision to approve drug trials was taken away from the Federal Government and handed over to the so-called ethics committees. Those committees can be made up of medical professionals, former patients and lay people, basically anyone. Dr Roy Beran has been criticised for allowing his sister, his Rabbi and his lawyer onto the ethics committee. Dr Beran: I make no bones about it. My sister was on the clinical trial but it was not pointed out that she actually is double degreed, is a counsellor of many years standing and a very competent professional in her own right. Dr D'arcy: Critics of the system say that this has undermined the value of the ethics group, dramatically increasing the number of trials and the approval rates. Patty Costa: Well I just think it's horrifying. To put financial gain ahead of human life and human rights to me is outrageous, absolutely outrageous. Dr D'arcy: But Patty Costa, head of a watchdog group for the developmentally disabled, is troubled about the money question and the blind faith these patients have in their doctor. Patty Costa: It seems to be a money-based situation at the moment which is really really tragic when you consider that people's human rights and lives are at stake here. Dr Beran: By the time you involve an intellectually handicapped person it must be a proven product so that you know that it works in the condition for which it is being tested. Dr Tattersall: Informing and empowering patients to be active participants in the decision-making about whether or not to enter a clinical trial is I think the goal. Patty Costa: By its very definition a clinical trial is an experiment and we believe that the participants in that should either be volunteers or in the case of somebody without the ability to be informed or to give free consent it then should be up to the nearest family next of kin. Presenter: Dr John D'arcy with that report. Well do stay with us, I'll be back with more after the break.

"B" 1 All documents, as defined by the Evidence Act 1995 (NSW), from 1 January 1990 to 1 January 2002, relating to the examination, treatment or assessment by the plaintiff or any other medical practitioner of any person for the purposes of considering or placing that person on a drug trial and/or conducting or recording such trial, including but not limited to personal files and notes, treatment records, medical reports, clinical notes, consent forms, invoices, receipts, Medicare or Health Insurance Commission invoices and receipts and records of payment requested or received from any person, company or institution.

2 All documents, as defined by the Evidence Act 1995 (NSW), from 1 January 1990 to 1 January 2002, relating to any application, request or communication with the Guardianship Board or Guardianship Tribunal with respect to any drug trial or proposed drug trial.

3 All documents, as defined by the Evidence Act 1995 (NSW), from 1 January 1990 to 1 January 2002, concerning the conduct, deliberation or proceedings of: (a) the Epilepsy Association of New South Wales; (b) any Ethics Committee with which the plaintiff was associated or with which the plaintiff communicated. 4 All documents, as defined by the Evidence Act 1995 (NSW), from 1 January 1990 to 1 January 2002, concerning the conduct of any drug trial whether actual or proposed, including (but not limited to) documents being communications or drafts thereof between the plaintiff (or any person or company with whom the plaintiff was or is associated) and:

(a) Therapeutic Goods Administration; (b) Australian Drug Evaluation Committee; (c) Adverse Drug Reactions Committee; (d) National Health and Medical Research Council; (e) Australian Health Ethics Committee; (f) Health Insurance Commission; (g) Medicare; (h) any private health fund; (i) any medical practitioner; (j) any patient or person the plaintiff proposed for, or considered for, any drug clinical trial; (k) any pharmaceutical/drug company with whom the plaintiff had arrangements to conduct drug trials. 5 All documents, as defined by the Evidence Act 1995 (NSW), from 1 January 1990 to 1 January 2002, relating to: (a) any complaint, concern, question or inquiry about any drug trial or proposed drug trial with which the plaintiff was associated; (b) he involvement of intellectually challenged persons and/or developmentally disabled persons generally or any particular such person in drug trials generally or any specific such trial. 6 All documents, as defined by the Evidence Act 1995 (NSW), from 1 January 1990 to 1 January 2002, relating to: (a) any complaints, concerns, questions or inquiries made to or about the plaintiff (or any person or company with whom the plaintiff was or is associated) by any person in relation to the financial circumstances or arrangements concerning any drug trial actual or proposed; (b) income received, or requests for payment made, by the plaintiff (or any person or company with whom the plaintiff was or is associated) in relation to any drug trial, including but not limited to: · invoices to patients or public or private health insurers, · receipts, · records of payments from any person, including patients and private or public health insurers), and i) payments made by any person or institution in relation to the drug trial. (c) the arrangements (including, but not limited to, financial arrangements), agreements or understanding between the plaintiff (or any person or company with whom the plaintiff was or is associated) and any person, company or institution interested in any clinical drug trial performed or undertaken by the plaintiff (or any person or company with whom the plaintiff was or is associated) or proposed to be performed or undertaken by the plaintiff (or any person or company with whom the plaintiff was or is associated) or with which the plaintiff (or any person or company with whom the plaintiff was or is associated) was in any way concerned.

Last Modified: 04/09/2003 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.