Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107 | Case summary

Beran v John Fairfax Publications Pty Ltd [2004] NSWCA 107 | Case summary | Zoe

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CATCHWORDS : DEFAMATION - PRACTICE AND PROCEDURE - appeal from jury decision - whether jury's finding that imputations not conveyed was one which no reasonable jury could reach - whether jury's finding that imputation not defamatory was one which no reasonable jury could reach - interlocutory determination that two articles so interlinked they should be pleaded as one publication - whether leave required to appeal against interlocutory determination. (D) Defamation Act 1974 (NSW) s 7A, s 7A(3), s 9 LEGISLATION CITED : Supreme Court Act 1970 (NSW) s 101(2)(e) Supreme Court Rules 1970 (NSW) Pt 15 r 26, Pt 31 r 2, Pt 67 r 12(d), r 12A Berry v British Transport Commission [1961] 1 QB 149 Bottomley v Hurst & Blackett Ltd (1928) 44 TLR 451 Broome v Agar (1928) 138 LT 698 Burrows v Knightley & Nationwide News Pty Ltd (1987) 10 NSWLR 651 Cairns v John Fairfax and Sons Ltd [1983] 2 NSWLR 708 Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68; (2001) Aust Torts Reports 81-610 David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346 Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478 Gordon v Amalgamated Television Services Pty Limited [1980] 2 NSWLR 410 Hall v Nominal Defendant (1966) 117 CLR 423 Hardy v Harris (1986) Aust Torts Reports 80-003, BC8601168 CASES CITED : John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 201 ALR 77; (2003) 77 ALJR 1657; (2003) Aust Torts Reports 81-711 Kelly v Daily Telegraph Newspaper Company (1897) 18 LR (NSW) 358 Liftronic Pty Limited v Unver [2001] HCA 24; (2001) 75 ALJR 867 Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112 Phelps v Nationwide News Pty Limited [2001] NSWSC 130 Piercy v Young (1880) 15 Ch D 475 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Reader's Digest Services Pty Limited v Lamb (1982) 150 CLR 500 Rivkin v John Fairfax Publications Pty Limited [2002] NSWCA 87 Ron Hodgson (Trading) Pty Limited v Belvedere Motors (Hurstville) Pty Limited [1971] 1 NSWLR 472 Salter Rex & Co v Ghosh [1971] 2 QB 597 Southern Cross Exploration NL v Fire and All Risks Insurance Company Ltd (No 2) (1990) 21 NSWLR 200 Tsvangirai v Special Broadcasting Service [2002] NSWSC 532 PARTIES : Roy Beran (Appellant) John Fairfax Publications Pty Ltd (Respondent) FILE NUMBER(S) : CA 40875/02; 40950/02 COUNSEL : B.R. McClintock SC/P.M. Strickland (Appellant) J.R. Sackar QC/T.M. Thawley (Respondent) SOLICITORS : Corrs Chambers Westgarth (Appellant) Freehills (Respondent)

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Statement of the Case 4 On 13 February 2001 the respondent published an article in The Sydney Morning Herald (the "matter complained of"). 5 On 2 March 2001 the appellant commenced proceedings in the Supreme Court of New South Wales to recover damages in respect of defamatory imputations he alleged were conveyed by the matter complained of. 6 The matter complained of appeared on two pages of The Sydney Morning Herald; the first and page four. I have set out the text of the matter complained of, with numbered paragraphs, in the schedule to this judgment. On the first page the article was divided into two sections. A red banner with the words "A HERALD INVESTIGATION" printed within it united the articles across the top of the page, while a borderline down the right hand side of the article separated the investigation story from the other few items on the front page. The two sections of the matter complained of were respectively entitled "The drug body-snatchers" and "No cure, Mrs James, but thanks for all the money." The latter portion of the matter complained of appeared under a photograph of a woman who was identified as Mrs James. A portion of the photograph of Mrs James extended into the text of the first section. The reader's attention was directed to the continuation of the story on page 4 of the newspaper in two ways: in the first section the words "Take this body" imprinted over a shadowy photograph apparently of a baby and "More reports PAGE 4" appeared in a break-out box; the words "continued page 4" appeared at the end of the section relating to Mrs James. 7 The caption under the photograph of Mrs James stated: "Mrs James, who agreed to test the epilepsy drug Gabapentin, says she had no idea that her doctor was benefiting from the arrangement with a big drug company." 8 The portion of the article headed "No cure, Mrs James …" was continued on page 4 under the heading "No cure, but lots of money". A photograph of the appellant appeared as part of the continued article. Two other reports appeared on page 4, under the banner "A Herald Investigation" but they did not form any part of the matter complained of.

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The pre-trial hearing 9 In his Statement of Claim the appellant pleaded the publication of the two sections of the article both separately and jointly in the following manner. 10 In paragraphs 3 - 4, he pleaded the section of the article headed "No cure Mrs James …" and the imputations he alleged were conveyed by that portion. 11 In paragraphs 5 - 6 he pleaded that the respondent published the section of the article headed "The drug body-snatchers" and the imputations he alleged were conveyed by that section. In addition, he provided particulars of identification pursuant to Supreme Court Rules Part 67 r 12(d) alleging that he was identified in the drug body-snatchers article by virtue of the information provided in the "No cure, Mrs James …" article. 12 In the alternative to the separate pleading of the two articles, the appellant alleged in paras 7 and 8 that the respondent had published both of the sections as one publication. The joint publication pleading relied upon the totality of the imputations pleaded in relation to the separate publication. 13 The respondent filed a Notice of Objections to the Statement of Claim: Supreme Court Rules Part 67 r 12A. The first objection was to the manner in which the appellant had pleaded the article as separate publications (the "separate publication question"). The respondent contended: "It is clear that the two articles, published on the same page closely interlinked, are a single publication and intended to be read as such, and it is unreasonable for the plaintiff to plead them as separate and distinct publications." 14 The respondent also made a number of complaints about the capacity of the matter complained of to convey the various imputations the appellant had pleaded (the "capacity question"). 15 The complaints raised in the respondent's Part 67 r 12A Notice were heard by Justice Adams on 4 May 2001. His Honour upheld the respondent's complaint on the separate publication question. While he accepted that the plaintiff's pleading could not be struck out unless it was embarrassing or prejudicial, he held that the manner in which the plaintiff had pleaded the matter complained of separately would introduce "entirely unnecessary complexity" into the trial. He ordered that paragraphs 4, 5 and 6 of the Statement of Claim be struck out and gave the appellant leave to amend consequent upon his order rejecting the separate pleading (the "separate publication determination"). 16 Thereafter argument proceeded on the capacity question. In the course of that argument Mr McClintock SC who appeared for the appellant did not press two imputations being 4(f) and 4(g). 17 On 19 October 2001 the appellant filed an Amended Statement of Claim pursuant to the orders Justice Adams had made on 4 May 2001 in which he pleaded both "The drug body-snatchers" and "No cure, Mrs James …" sections as one publication. He also pleaded all of the imputations which had been severally and jointly pleaded in the first Statement of Claim save for the two which had not been pressed during the argument before Justice Adams.

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The s 7A hearing 18 The s 7A hearing commenced on 4 September 2002. Counsel for the appellant tendered the matter complained of and addressed the jury. His address concluded shortly after lunch. Counsel for the respondent then addressed the jury. His address concluded on the second day of the trial. Hidden J summed up that day. 19 The jury was asked to answer "yes" or "no" to the question whether the appellant had established that the matter complained of conveyed to the ordinary, reasonable reader any of the following imputations (or imputations which do not differ in substance from them): (a) The plaintiff behaved in an unethical manner by deliberately concealing from potential participants in drug trials the fact that he would be paid for their participation. (b) The plaintiff behaved unethically by failing to inform potential participants in drug trials that he would receive payment for their participation in those trials. (c) The plaintiff profiteered from the drug trials which he arranged. (d) The plaintiff behaved unethically by permitting drug testing on retarded people. (e) The plaintiff is a doctor who sacrificed the interests and genuine medical needs of patients to the interests of international drug companies. (f) The plaintiff callously permitted a patient to continue to undergo an experimental treatment which caused her great suffering. (g) The plaintiff set up a sham ethics committee which included cronies of his because he feared that no truly independent ethics committee would ever approve his practices. (h) The plaintiff used Australian patients as guinea pigs in drug trials for multinational drug companies. 20 The second question the jury was asked was whether, in respect of any of the imputations that it had found to be conveyed, the imputation was defamatory of the appellant. 21 The jury retired to consider its verdict at 2.25 pm and announced its answers to the questions at 4.35 pm. The jury found that the appellant had established that the matter complained of conveyed only one of his imputations - imputation (c) - to the ordinary reasonable reader. That imputation was: "(c) the plaintiff profiteered from the drug trials which he arranged." 22 The jury also found, however, that the imputation was not defamatory of the appellant. 23 Hidden J then entered a verdict for the respondent with costs.

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27 Although the appeal had been commenced as of right, on 18 October 2002 the appellant filed a Summons for extension of time for applying for leave to appeal and for leave to appeal in relation to the separate publication determination. The Summons was based on the proposition that Justice Adams' order of that date was interlocutory. 28 The appellant noted in his summary of argument in support of the Summons for an extension of time that the application was made for more abundant caution. He did not address any substantive argument to whether or not the leave application was necessary. 29 The respondent/opponent to the Summons for Leave to Appeal resisted the appellant's Summons on the basis, inter alia, that the proceedings before Justice Adams were not interlocutory but, rather, were properly characterised as a separate trial pursuant to Part 31 of the Supreme Court Rules. It further submitted that whether or not an appeal from that decision lay as of right or was available with leave, the appeal was out of time. It argued that both the principles in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 598, 602, 604 and general discretionary considerations precluded "a plaintiff from sitting on a potential appeal point to use only (sic) in the event of a disappointing result from the jury." 30 I do not accept that the separate publication determination was properly characterised as a Part 31 separate trial. No separate trial order was made as the rules require: Supreme Court Rules Part 31 r 2 and see Piercy v Young (1880) 15 Ch D 475 at 479; Bottomley v Hurst & Blackett Ltd (1928) 44 TLR 451. Separate trial orders are most usually made in the Defamation List when the court hears argument about whether the plaintiff's imputations are conveyed as a matter of law: see Love v Mirror Newspapers Ltd [1980] 2 NSWLR 112 at 117 ff where Hunt J (as his Honour then was) held that the Court had power to make a separate trial order in respect of the question of law whether the pleaded imputations were capable of being conveyed by the matter complained of in its natural and ordinary meaning. 31 It is often a fine point to determine whether an order is final or interlocutory: see Salter Rex & Co v Ghosh [1971] 2 QB 597 at 601. 32 In Hall v Nominal Defendant (1966) 117 CLR 423 at 440 Taylor J said: "… an order made in the course of an action or suit which does not conclude the rights of the parties inter se, although it may, of course, conclude the fate of the particular application in which it is made, is interlocutory only. On this basis an order staying proceedings against one of several defendants on the ground that they are scandalous, vexatious and an abuse of the process of the Court has been treated as interlocutory: Hind v Marquis of Hartington (1890) 6 TLR 267. The same view was taken of an order striking out a plaintiff's statement of claim on the ground that it disclosed no reasonable cause of action: Jones v Insole (1891) 64 LT 703, and of an order dismissing an action as frivolous and vexatious in Re Page (1910) 1 Ch 489 ". 33 If the appellant had been able to retain his pleading of the matter complained of as two separate publications, he would in turn have been able to plead imputations arising out of each separate publication. Such imputations constitute the cause of action: s 9 Defamation Act 1974 (NSW) as amended. The effect of the separate publication determination, therefore, was to determine finally the appellant's rights insofar as his separately pleaded imputations were concerned. It does not matter that the appellant was thereafter granted leave to amend: see Hall v Nominal Defendant (1966) 117 CLR 423 at 440 (per Taylor J), at 443 (per Windeyer J); Southern Cross Exploration NL v Fire and All Risks Insurance Company Ltd (No 2) (1990) 21 NSWLR 200 esp. at 216 - 217 per Handley JA. 34 In my view, the better view is that the separate publication determination was interlocutory. Had the appellant sought to challenge it prior to the jury determination, he would have required leave to appeal: Supreme Court Act 1970 (NSW), s 101(2)(e).

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35 There are, however, circumstances in which an interlocutory decision can be challenged on a final appeal without leave being required. This issue was considered in Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; (2002) 209 CLR 478. 36 Gaudron, McHugh and Hayne JJ pointed out in their joint judgment (at [6]) that the proposition that an interlocutory order could be challenged in an appeal against the final judgment was "often stated in unqualified terms." In their Honours' view the better formulation was that adopted in Spencer Bower, Turner and Handley, The Doctrine of Res Judicata, 3rd Ed 1996 pp 79-80 para 170 where the learned authors said: "On an appeal from the final order an appellate court can correct any interlocutory order which affected the final result." 37 Their Honours pointed out (at [7]) that that qualification was necessary "to reflect the well-established principle that a new trial is not ordered where an error of law, fact, misdirection or other wrong has not resulted in any miscarriage of justice." 38 Their Honours also observed that there were circumstances where an interlocutory decision made other than in the course of the hearing must be treated as concluding an issue between the parties. Their Honours did not finally decide the question whether such decisions might also be challenged on an appeal against a final judgment in the proceedings. That conclusion was, however, reached by this Court in David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346, to which their Honours referred (at [8]) as being consistent with their qualified formulation of the relevant principle. Their Honours did not, having regard to the circumstances of the case they were considering, feel it necessary to explore the limits of the principle. 39 Kirby and Callinan JJ in their joint judgment (at [44]), referred to the "established rule of practice" permitting an objection to an interlocutory order following final judgment as long as the ground was still relevant to that judgment. After reviewing the authorities their Honours found (at [48]) that the practice whereby an interlocutory order could be challenged following final judgment was a sensible one which was an accepted rule of the High Court's practice as well as being regularly followed in other Australian appellate courts. Their Honours were of the view (at [49]) that the principle should not be narrowly confined, although they acknowledged that the point decided by the interlocutory order would need to be relevant to the disposition of the case for it to be considered by the appellate court. 40 In David Syme & Co Ltd v Lloyd [1984] 3 NSWLR 346 at 349, Glass JA (with whom Samuels and Priestley JJA agreed on this point) held that it was open to a defendant which unsuccessfully challenged the plaintiff's imputations to challenge that decision on appeal from a subsequent jury verdict, even though the original decision was interlocutory. While there was a measure of pragmatism in his Honour's conclusion (it being based at least in part on discouraging a superfluity of applications for leave to appeal from interlocutory orders made in the Defamation List), it was, as I have earlier noted, accepted by Gaudron, McHugh and Hayne JJ in Gerlach v Clifton Bricks Pty Ltd as being consistent with their qualified formulation of the relevant principle. 41 The pragmatic flavour of Glass JA's conclusion was reflected in Kirby and Callinan JJ's judgment in Gerlach v Clifton Bricks Pty Ltd (at [49]) where their Honours observed that "the rule permitting adverse interlocutory orders to be contested in an appeal against a final judgment …[is] supported by many practical considerations". As they said (omitting footnotes): "Interlocutory appeals can often cause great injustice to parties who are less well resourced than those who pursue them. They can be misused by those with 'a long purse' to prevent others from securing justice in an early trial of the substantive issues. They can lead to a plethora of appeals and further interlocutory hearings that needlessly raise the costs and delay the conclusion of litigation." 42 The separate publication determination affected the final result in the sense I have earlier explained and, accordingly, it was open to the appellant to challenge the separate publication determination as of right upon appeal from the jury's verdict. This follows both from Gerlach v Clifton Bricks Pty Ltd and David Syme & Co Ltd v Lloyd. Accordingly the appellant did not need to file the Summons seeking an order extending the time within which to seek leave to appeal from Justice Adams' order nor did he need leave to appeal. The respondent's Notice of Motion seeking to strike out ground 1 in the Notice of Appeal on the basis that it was incompetent because it was out of time was misconceived. 43 Mr McClintock SC who appeared with Mr Strickland for the appellant informed the Court that the Summons seeking an extension of time for applying for leave to appeal and for leave to appeal had been filed because the respondent filed the Notice of Motion. That being the case it follows, in my view, that the respondent should pay the costs of the Summons. 44 I turn then to consider the appellant's substantive complaint about the separate publication determination. 45 The appellant submitted that two questions arose in relation to the separate publication determination. Those were:

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(b) Whether Adams J was correct in holding that the form of pleading adopted by the appellant would cause the respondent "to respond to immaterial issues". 46 The appellant submitted that the relevant principles of pleading were stated by Simpson J in Phelps v Nationwide News Pty Limited [2001] NSWSC 130 at [22]. He complained, however, that Adams J failed to apply those principles. 47 The respondent submitted that the articles which the appellant sought to plead separately were properly to be read as a single publication and that it was unreasonable for the appellant to have pleaded them as separate and distinct publications. It submitted that an ordinary reader would have read both articles together as the manner of publication (including the headlines and pagination) invited attention to both articles while each invited attention to the other. 48 It also submitted that the material in each article could be understood by the ordinary reasonable reader as materially altering or qualifying the complexion of the other or was at least capable of changing the complexion of the other such that both articles had to be pleaded: see Gordon v Amalgamated Television Services Pty Limited [1980] 2 NSWLR 410 at 414 - 415; Tsvangirai v Special Broadcasting Service [2002] NSWSC 532. 49 In Ron Hodgson (Trading) Pty Limited v Belvedere Motors (Hurstville) Pty Limited [1971] 1 NSWLR 472 Asprey JA (with whom Holmes JA agreed) said: "… if the alleged defamatory matter be contained within other written material, it is sufficient to set forth in the declaration the libellous passages only, provided that their meaning be clear and distinct. But, if the meaning of the passages taken singly is not clear or if the complexion of the imputation conveyed by the libellous passages is materially altered or qualified by other passages in the written material, the plaintiff must set out all of the passages in the written material which affect the sense of the alleged defamatory matter." 50 Ron Hodgson (Trading) Pty Limited v Belvedere Motors (Hurstville) Pty Limited was followed by Hunt J in Gordon v Amalgamated Television Services Pty Limited [1980] 2 NSWLR 410 at 413 (6) where his Honour held that a plaintiff was "obliged to include within his pleading every passage of the [publication sued upon] which materially alters or qualifies the complexion of the imputation complained of". His Honour said that the "justification for that rule is the principle that the effect of the matter complained of must be taken from the whole of what has been published." 51 Accordingly in Hunt J's view (at 414 - 415) where additional passages relied upon by a defendant "may be understood by the ordinary reasonable reader as materially altering or qualifying the complexion of the plaintiff's imputation … principle demands … that if a plaintiff is entitled to set out those passages from which the imputations of which he complains are capable of being conveyed, then the defendants should similarly be entitled to have set out those additional passages which are capable of materially altering or qualifying any such imputation". 52 The decision in Gordon v Amalgamated Television Services Pty Limited has frequently been cited to support what Levine J referred to in Tsvangirai v Special Broadcasting Service (at [4]) as a "strike-in" order, "to use the argot of the Defamation List". Such orders are usually made to require a plaintiff to plead additional parts of a single matter complained of. 53 A strike-in order may also be made in relation to separate publications. In Burrows v Knightley & Nationwide News Pty Ltd (1987) 10 NSWLR 651 at 655, Hunt J held that where there were two separate publications, the plaintiff was entitled to, or might be obliged to, have them considered together in order to determine the sense in which either was understood, provided that they were sufficiently connected and identified with each other. His Honour referred (at 656) to Gordon v Amalgamated Television Services Pty Limited as entitling a defendant, which wished to have the material in a separate publication considered upon the issue of the sense conveyed by the matter which the plaintiff had pleaded, to require the plaintiff to plead that other material where it was capable of affecting the sense in which the matter complained of should be understood.

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54 Phelps v Nationwide News Pty Limited, upon which the appellant relies, was an application of the above principles. In that case, Simpson J held (at [22]): "22 Individual circumstances will dictate whether a particular pleading will be permitted to stand. However, it is to be borne in mind that, subject to unfairness amounting to abuse of process, or unreasonableness, or the inability of the publication to sustain the form of pleading chosen, it is generally for the plaintiff to select the manner in which he/she/it wishes to present a case. It is only if the plaintiff's selection of the mode of pleading is untenable for one of those reasons that it will be struck out. By this I mean that where, for example, a plaintiff elects to proceed as though a number of individual parts of the matter complained of together amount to a composite publication, it is only if that approach is not reasonably open, or creates unfairness of such a degree as to constitute an abuse of process, that the pleading will be struck out. Similarly, where the plaintiff elects to proceed as though each were a separate publication, it is only where that view is not reasonably open (or where unfairness amounting to abuse of process would result) that that pleading will be struck out. Within those boundaries, a plaintiff is entitled to mark out the playing field." 55 Adams J referred to Phelps and clearly concluded that the pleading of the matter complained of as separate publications was impermissible because the two articles were so interlinked that permitting them to be pleaded separately was embarrassing: Supreme Court Rules Part 15 rule 26. 56 In my view his Honour's decision was correct. The manner in which the two articles were presented was such that the ordinary reader would have read them as one publication. They were inseparably linked. Each qualified the other. It was incumbent upon the appellant to include within his pleading every passage which materially altered or qualified the complexion of the imputations of which he complained. It was, in my view, essential in order to discharge that obligation that he pleaded the two articles as one publication. 57 I would also reject the appellant's complaint that in striking-out paras 4, 5 and 6, Adams J determined a factual question which was truly the province of the jury. Simpson J rejected that argument in Phelps v Nationwide News Pty Limited, (above at [31]). I agree with her Honour that the identification of the publication is not a jury question. The authorities to which I have referred make it clear that the issue of how the publication should be pleaded is properly the province of the court. The function of a jury is confined to whether the matter complained of carries the imputation and, if it does, whether that imputation is defamatory: s 7A(3) Defamation Act 1974 (NSW). 58 In my view this ground of appeal should be rejected.

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Ground 2 - The jury's decision that the imputations were not conveyed 59 I note that Ground 2 did not accurately reflect the question the jury was asked to answer in relation to whether or not the imputations were conveyed. The question to the jury, which was formulated in standard terms, asked the jury to consider, in substance, whether the imputations were "conveyed" to the ordinary reasonable reader, not whether they were "reasonably conveyed" which is the expression used in the ground of appeal. 60 When the appeal was heard, it was common ground that to succeed in his challenge to the jury's verdict the appellant had to establish that the jury's finding that the imputations were not conveyed was one to which no reasonable jury could have come. Since the hearing of the appeal the High Court has delivered its judgment in John Fairfax Publications Pty Limited v Rivkin [2003] HCA 50; (2003) 201 ALR 77; (2003) 77 ALJR 1657; (2003) Aust Torts Reports 81-711 ("Rivkin") which examined the scope of appellate review of a jury verdict. That decision has confirmed that the approach the parties took to the test to be applied to determine the appeal was correct. 61 Rivkin was an appeal from the decision of the Court of Appeal (Rivkin v John Fairfax Publications Pty Limited [2002] NSWCA 87) ordering a new trial of Mr Rivkin's defamation action against John Fairfax Publications. The jury had found that the matter complained of did not convey any of the fifteen imputations pleaded. Grove AJA (with whom Meagher JA and Foster AJA agreed on this issue) held that there was no reasonable basis on which the jury finding in relation to six of the fifteen imputations could be sustained. He also concluded (at [112]) that "in the circumstances, that is to say constant rejection of the cause of a litigant in many cases in defiance of reasonableness, it is apt to conclude that the jury has misapplied itself to its task". He held (at [113]) there should be a new trial of all the imputations which were before the jury. 62 Although counsel for Mr Rivkin sought to maintain that order in the High Court, he also, as Callinan J noted (at [190]), "properly conceded", in effect, that he could not argue that the jury had dealt so unreasonably with nine of the imputations not found to have been conveyed "as to argue that those imputations should be the subject of the retrial." 63 In the High Court, Callinan J (with whom Gleeson CJ and Heydon J agreed) held (at [185]) that a jury finding that an imputation was not conveyed could only be successfully challenged on appeal if it was one that no reasonable jury could reach. 64 Callinan J expressed the view (at [183]) that in finding that some of the answers of the jury were perverse the Court of Appeal may have adopted a more demanding test than the law requires. He emphasised (at [184]) that a Court of Appeal could not substitute the answer that it would give to a question for that of a jury. Accepting that a "jury has an especially significant constitutional role to play in those cases in which it participates" his Honour pointed out that: "Both as a practical and legal matter, a jury's decision on a factual question, although by no means impregnable, does have an authority over and above that of a decision of a judge sitting alone to determine a factual question. The jury is representative of the community. Its members are better placed than judges to give meaning to, and evaluate, the spoken and written word and its impact upon the community. Nor should it be assumed that juries approach their task with heightened or lowered suspicion and prejudice. History shows that not all lawyers and judges are strangers to suspicion. It may accordingly be accepted that the occasions for judicial correction of jury verdicts will be extremely rare. But such occasions do arise." 65 The High Court differed from the Court of Appeal in deciding which of the jury's findings in relation to the imputations should be overturned. Callinan J found that the jury verdict was only unreasonable in relation to five of the imputations. These five included one imputation in respect to which the Court of Appeal found the jury's decision to have been open to it. Conversely, Callinan J disagreed with the Court of Appeal's finding that the jury verdict in relation to two other imputations, 3(a) and 5(a), was unreasonable. Kirby J (at [143]) would have upheld the Court of Appeal's decision as to which of the imputations were reasonably conveyed in all but one respect - that disagreement related to an imputation, 3(i), which in his view was not a matter before the Court. He disagreed with Callinan J's conclusion that the jury was shown to have been incorrect in relation to an additional imputation to those found by the Court of Appeal. 66 McHugh J concluded (at [11] and [70]) that the Court of Appeal erred in finding that no reasonable jury could find that the two articles did not contain the relevant imputations. He would have dismissed the appeal.

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The appellant's overview argument to the jury 68 Mr McClintock SC placed emphasis on the heading to the article and, in particular, the word "body-snatchers". He suggested that that was an allusion to an illegal practice of some 200 years antiquity when it was against the law to carry out operations to teach medical students so recently buried bodies were dug up and sold to doctors. He submitted that readers of the newspaper would read the article with that notion in mind. 69 Mr McClintock SC suggested to the jury that the article dealt with a serious topic being "A Herald Investigation". He said it amounted to a generalised attack on drug companies and doctors which had, in effect, singled out the appellant. 70 He suggested that the article was concerned with explaining that patients' rights had been ignored and sacrificed for the interests of international drug companies and that the appellant was involved in this activity. He submitted that the reasonable reader would have understood the article as saying two categories of people were being treated as guinea pigs: intellectually retarded people whose rights were being ignored because they were being involved in clinical trials without their consent and patients, such as Mrs James, who were involved in clinical trials but were not told of that fact. 71 Dealing with Mrs James he drew attention, in particular, to paragraph 97 and suggested that that conveyed that Mrs James did not know she was being the subject of research, that she was a guinea pig as opposed to being treated. He also drew attention to the references in the article to the Ethics Committee the appellant had established and suggested that the article was conveying that Committee was not independent but was made up of a "bunch of cronies" who would [take the appellant's] advice as he thought an independent committee would not approve the trial in question. 72 It was by emphasising the idea of patients being used as guinea pigs, the failure to inform patients that they were involved in clinical trials and the establishment of the "sham" Ethics Committee that Mr McClintock SC sought to explain to the jury that the article conveyed an underlying notion of unethical behaviour on the part of those involved including, of course, the appellant. 73 Secondly, he pointed to the words "guinea pigs" in the sub-heading and suggested that that was a reference to "an animal subjected to tests done without regard for the welfare of the animal but for the purposes of the person carrying out the test." He suggested that that notion was linked to a later reference to the appellant who was described as using a patient as a guinea pig. 74 He drew attention to the breakout caption "Take this body" and suggested that that picked up on the "body-snatcher" reference in the headline. 75 He suggested that the "No cure - Mrs James" headline was an attack on the appellant suggesting that while he had not cured Mrs James he had made a lot of money out of treating her.

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The trial judge's directions 102 There was no challenge on appeal to the trial judge's directions to the jury. 103 His Honour gave the jury what might be regarded as a conventional summing-up in a defamation matter. It is worth noting some of the points about which he directed them. 104 He directed them that they must not look at specific parts of the articles in isolation, but in the context of the articles as a whole. He directed them as to the qualities of the ordinary reasonable reader and drew their attention to the fact that in reading the articles, they must apply "community standards and attitudes". He suggested that the ordinary reasonable reader might read the articles only once but, having regard to the seriousness of the subject matter, may go back over some parts to make sure what was read was properly understood. He reminded them that the ordinary reasonable reader was a person who gained a general impression from a reading of the articles and may be guilty of a measure of loose thinking. 105 Applying those tests, he directed them that their task was to consider each of the eight imputations and to determine whether they were satisfied on the balance of probabilities that the imputation arose from a fair reading of the articles. 106 On the issue of whether or not any imputation found to have been conveyed was defamatory, his Honour explained that "defamatory" meant something which would lead ordinary decent people in the community to think less of the appellant. 107 His Honour then dealt with each counsel's arguments to the jury. I do not think I do any disservice to his Honour if I do not repeat the matters on which he summed-up to the jury in this respect. His Honour's summing-up was impeccably fair to both parties and, in my view, was a balanced rendition of the competing arguments. 108 Hidden J directed the jury that imputations (a) and (b) were alternatives and that if they found (a), they need not answer (b), or they might answer yes to (b) but no to (a) or no to both.

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The appellant's argument 112 The appellant relied primarily upon the manner in which he had addressed the jury in relation to this imputation. He submitted that paragraph 13, in combination with paragraph 5, inevitably conveyed the suggestion that patients should be told that doctors were being paid by Pharmaceutical Companies for arranging their participation in drug trials. 113 He submitted that paragraphs 32 and 33 made it clear that Mrs James did not know the appellant would be paid for her participation in the drug trial. He referred also to paragraph 81 and the fact that the appellant who appeared before the Guardianship Tribunal did not tell the Tribunal that he received payments for each visit ranging up to $1,000 a patient. He submitted that paragraph 81 suggested that the appellant's conduct in failing to disclose his financial arrangements to the Tribunal was unethical and that this strengthened the inference that the appellant's failure was a result of deliberate concealment. 114 He submitted that the material necessarily conveyed the suggestion that the only reason patients were not specifically informed about the appellant receiving payment was because the appellant deliberately concealed that fact from them. He submitted the deliberate concealment was unethical because patients should expect to be informed that they are part of drug trials. 115 The respondent submitted that contrary to the appellant's submission concerning the inevitability of the suggestion said to be conveyed by paragraph 13, other parts of the article explicitly contradicted that suggestion. It referred to paragraph 7 which stated that "patients do not have to be told of the financial arrangement" and paragraph 82 which noted that "financial disclosure was not required under State laws". It also referred to the fact that the reader was told that only two of 1,712 trials had to be reviewed by the Therapeutic Goods Administration (paragraph 14). It submitted that the fact that the appellant was quoted in the article as stating that patients were informed that the drug company would pay for their treatment (paragraph 89), which necessarily included payment to him, would lead a reader to conclude that his comments were not the utterances of someone who had anything to conceal. 116 Secondly, the respondent submitted that even if the reasonable reader may have concluded the payment was deliberately concealed from patients, the article did not provide any basis for a conclusion that not being so informed amounted to "unethical" behaviour. It submitted that paragraphs 14 and 82 contradicted the proposition that patients should be told about financial arrangements. Decision 117 In my view the jury's decision that imputation (a) was not conveyed was one which a reasonable jury could have reached. 118 It is important in this context first to have regard to the nature of the article. There is no doubt that the headline is dramatic and eye-catching. The expression "body-snatchers" certainly carried a negative connotation in implying that those associated with the drug industry were using people's bodies in a manner which may not be appropriate. It is, in my view, improbable that the jury would have accepted Mr McClintock SC's submission that readers of the newspaper would read the article by recalling the illicit and somewhat arcane practice to which he had referred. 119 Once one comes to read the body of the article, however, it is open to the interpretation that its real focus is on the inadequacy of the current regulatory regime, in the view of some medical practitioners, to protect patients' rights in drug trials. The converse of this proposition is that medical practitioners who were recruiting patients for drug trials were acting within the current regulatory regime. 120 Thus, paragraph 5 refers to Australian patients being used as guinea pigs "without explicit laws to adequately protect their rights", paragraph 7 refers to the fact that "patients do not have to be told of the financial arrangements", paragraph 10 refers to the Chairman of the Australian Drug Evaluation Committee who believes "the protection of patients' rights in drug trials needs a major overhaul", paragraph 14 refers to the Therapeutic Goods Administration, "the main responsible Federal Government Authority", being obliged only to review directly 2 of 1,712 clinical trials carried out in Australia the previous year, paragraph 18 refers to the "ease of getting approval" for drug trials in Australia, paragraph 20 refers to the approval of an experiment by the NSW Guardianship Tribunal, paragraph 35 refers to the fact that "since regulations were eased a decade ago, Australia has become an important testing centre for international pharmaceutical companies", paragraph 74 refers to Dr Beran using intellectually handicapped people in drug trials with the approval of the Royal North Shore Hospital Ethics Committee, paragraph 75 refers to the fact that in 1999 the Guardianship Tribunal granted the appellant the right to use a number of intellectually disabled people in the trial of an experimental drug and paragraph 82 refers to the fact that the President of the Guardianship Tribunal said financial disclosure was not required under State laws. 121 Whether one regards those specific references to the regulatory regime within which the drug trials the subject of the article were being conducted as the foreground or the background, it was, in my view, open to the jury to accept the respondent's argument that the matter complained of did not suggest that there was any obligation upon the appellant (or anyone else) to disclose the fact that medical practitioners were receiving payment in relation to patients' participation in drug trials. 122 Once it is understood that the article explicitly stated that patients did not have to be told of the financial arrangements relating to drug trials then it was open to the jury to conclude first, that the appellant would not have deliberately concealed the fact he was receiving payment from potential participants in drug trials and, secondly, that in those circumstances there could be no question that he had behaved in an unethical manner. 123 In my view, the jury's answer to imputation (a) was reasonably open to it.

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Imputation (e): The plaintiff is a doctor who sacrificed the interests and genuine medical needs of his patients to the interest of International Drug Companies. 134 In his written submissions the appellant relied upon substantially the entirety of the matter complained of, in particular the break-out article relating to Mrs James and paragraph 5 referring to Australian patients being used as guinea pigs in drug trials. He submitted that the ordinary reasonable reader would relate that paragraph to the appellant's conduct as set out in the break-out article. He submitted that the break-out article contrasted the great benefits to the global pharmaceutical companies in the drug tests with the interests of Mrs James, which suffered after she tested a new experimental epilepsy drug suggested by the appellant. The appellant contrasted the references in the article to the advantages the global pharmaceutical companies enjoyed from conducting their drug trials in Australia with the reference to Mrs James who suffered "endless visits to the doctor, painful side-effects and rounds of intrusive medical procedures". He referred to the fact that her hopes were dashed because she "found no cure for her form of epilepsy". 135 The appellant submitted that the article clearly conveyed the suggestion that from the appellant's viewpoint the interests of the pharmaceutical companies took precedence over his patients' interests because he had a direct and lucrative financial interest in recruiting patients to the drug trials. 136 After referring to the fact that the appellant had spoken (in paragraph 86 and 87) of his idea concerning a study involving an epileptic drug and submitting that that paragraph conveyed the clear suggestion that the appellant was promoting the interests of the drug company in exploiting new areas for expansion into Australia, the appellant referred to paragraphs 94 to 97 and relied again upon the submission to the jury that "the real effect of this article…is that [the appellant] doesn't give two hoots about [the patients], all he cares about is the drug companies". 137 The respondent submitted, as it had before the jury, that the article made it clear that patients such as Mrs James engaged in trials by their own choice for a number of reasons because they had tried all other available forms of treatment. It submitted that the article demonstrated that such people know they may not obtain a benefit and that the article did not suggest that by providing hope for the possibility of relief by way of clinical trials, the tests were contrary to the medical needs of patients.

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Imputation (f): The plaintiff callously permitted a patient to continue to undergo an experimental treatment which caused her great suffering. 140 The appellant submitted that the only issue about this imputation was whether the matter complained of conveyed that the appellant's conduct in permitting Mrs James to continue to undergo an experimental treatment which caused her great suffering was callous or uncaring. He submitted that that meaning could be derived from the fact that the matter complained of (paragraph 32) stated that the appellant had recruited Mrs James for a twelve month trial which went on for years. "LARGE PERSONAL SACRIFICES" (paragraph 37) and involving "several years of coping with the pressures of new and additional medications" (paragraph 41). He submitted that the headline to the break-out article "No cure, Mrs James, but thanks for all the money" was clearly linked to the statement in paragraphs 33 and 34 that the appellant gained a direct financial benefit by recruiting Mrs James to the trial. He submitted that the inevitable suggestion arising from the headline was that he had made a lot of money out of Mrs James. He submitted that the article necessarily conveyed the suggestion that it was callous or uncaring for the appellant to permit Mrs James to continue on the treatment for years knowing that she was suffering. 141 The respondent disputed the appellant's assertion that there was no issue that the break-out article expressly conveyed that the appellant had permitted Mrs James to continue to undergo an experimental treatment which caused her great suffering. It submitted that there was nothing in the article which suggested that there was a point in time when a decision was to be made as to whether or not to continue. 142 The respondent submitted that the article made it clear that it was Mrs James' choice to engage in the trial (paragraph 32) and that she did because she hoped to gain some benefit (paragraph 41) and that it was also her choice as to when to cease (paragraph 40). It submitted that the matter complained of emphasised that while trials of experimental drugs offered hope, there was no guarantee of success. It submitted that the ordinary reasonable reader would understand those matters to be inherent in the very nature of a clinical trial. It submitted that a reasonable reader would understand that there was not only no guarantee of success during clinical trials, but chances of failure or worse. It submitted that the article did not convey that the appellant was callous because of this and that it was perfectly permissible for the reader to conclude that all doctors observing or conducting clinical trials would see patients suffering. 143 Finally, the respondent submitted that the emphasis in the article was on Mrs James' choosing to be involved in the clinical trial and that there was no suggestion that the appellant encouraged or coerced her to continue.

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Imputation (g): The plaintiff set up a sham Ethics Committee which included cronies of his because he feared that no truly independent Ethics Committee would ever approve his practices. 149 The appellant relied particularly upon paragraph 17 and submitted that it was clear beyond doubt that that paragraph referred to the appellant. He referred also to paragraph 45 and its statement that the appellant "overcame initial problems getting ethical approval for his role in the new drug testing industry by setting up his own Ethics Committee", to the reference to the fact that the appellant did not reveal the make-up of his Ethics Committee in the magazine "Epilepsia" (paragraph 52) and to the appellant's disputed claim that Dr Banks put the members of the Committee together (paragraph 55 cf paragraphs 59-60). 150 The appellant submitted that taken together these paragraphs necessarily instilled in the mind of the ordinary reasonable reader that the Ethics Committee set up by the appellant was a sham in that it was not truly independent and would approve of the appellant's practices. The submissions asked, rhetorically, why the article would refer to the people who constituted the Ethics Committee if it did not intend to convey that that Committee was a sham. It was also submitted that the matter complained of necessarily conveyed that the appellant was afraid that a truly independent Ethics Committee would never approve his practices, that following from the statement that the appellant only overcame the initial problems in getting ethical approval after he set up his own committee packed with his friends and relatives. 151 The respondent submitted that it was open for a reasonable reader to consider that the qualifications of the people on the Ethics Committee made it highly unlikely that they were not independent. It submitted that the fact that the appellant knew the members of the Committee was hardly surprising and that the reasonable reader was entitled to infer that people the appellant knew and whose opinions he respected and trusted were precisely the sort of persons who would be chosen for the Committee. 152 The respondent also relied upon the fact that the article pointed out that one in six Ethics Committees was private so that it was not unusual for the appellant's Committee to fall into that category. It also relied upon the fact that the article demonstrated that the appellant was not afraid of other Ethics Committees as he had obtained approval from the Royal North Shore Ethics Committee and from the Guardianship Tribunal. It submitted that there was no suggestion that the appellant's so called "practices" had been rejected by any of those bodies or that the decisions of the Ethics Committee set up by him had come under any adverse comment.

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Decision 153 The respondent does not dispute that the reference in paragraph 17 to a "Sydney doctor" in that paragraph was a reference to the appellant. 154 I accept the respondent's submissions concerning the manner in which a reasonable reader could have considered whether this imputation was conveyed. In addition, in my view it was open to the jury to conclude that a reasonable reader would read the article as making the point that while the ethics committee included associates of the appellant (paragraph 17) those people were not selected solely by the appellant. Thus while the article identifies a disparity between the appellant's recollection that it was Mr Banks who put the committee together (paragraph 56) and Mr Banks' recollection that he suggested a number of people who subsequently served on it, that is capable of being seen as a difference in emphasis only. 155 Further, paragraph 60 of the article makes it clear that the Ethics Committee which approved a number of the appellant's early drug trials was registered with the National Health and Medical Research Council. Registration with a highly reputable and clearly independent body is another matter the jury was entitled to take into account when considering whether the ethics committee was a "sham". 156 The sting of the imputation was that it was the appellant who established a sham Ethics Committee. Once it is seen that whatever the nature of his involvement the people on the ethics committee were appropriately qualified, that the appellant was not solely responsible for their selection and that the Ethics Committee was registered, much of the basis of the appellant's imputation, in my view, evaporates. 157 In my view, it was open to the jury to conclude that a reasonable reader would not read the article as imputing that the plaintiff had established a sham Ethics Committee because the body which was established included people nominated by a third party, was accountable to a regulatory body and, moreover, its members were those whose qualifications suited them for involvement in such a committee. 158 In my view, the jury's answer to imputation (g) was reasonably open to it.

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Ground 3 - The jury's decision that imputation (c) was not defamatory 166 In Rivkin only McHugh J dealt expressly with appellate review of a jury verdict that an imputation was not defamatory. His Honour observed (at [19]) that "appellate courts have rarely … set aside a jury's finding that a publication was not defamatory." He referred (at [20]) to Chief Justice Darley's observation in Kelly v Daily Telegraph Newspaper Company (1897) 18 LR (NSW) 358 at 361: "If the words of the publication have any possible construction which can be put upon them, susceptible of an innocent meaning, then the verdict of the jury for the defendants is conclusive and cannot be disturbed." 167 Accordingly, his Honour concluded (at [20]) "an appellate court can set aside a verdict of no libel on the ground of unreasonableness only when the words of the publication are not capable of any but a defamatory meaning … when the defamation is 'clear and beyond argument'." 168 In considering whether an imputation is defamatory a jury is asked to apply general community standards. As Brennan J (with whom Gibbs CJ and Stephen J agreed) said in Reader's Digest Services Pty Limited v Lamb (1982) 150 CLR 500 at 506 the question whether an imputation was to be understood as being defamatory depended "upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social by which they (the jury) evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation … being a standard common to society generally." 169 In Cairns v John Fairfax and Sons Ltd [1983] 2 NSWLR 708 the Court of Appeal considered the question whether a jury finding that imputations that "[Miss Morosi] was improperly involved with her employer, Dr Cairns in a romantic or sexual association contrary to the obligations of her marriage" and that "[Dr Cairns] was improperly involved with his assistant Junie Morosi in a romantic or sexual association contrary to the obligations of his marriage and that of Miss Morosi" were not defamatory should be set aside as perverse. Hutley JA and Mahoney JA (at 721) both held it was not. Hutley JA said (at 710) the judgment of the jury was not "lightly to be rejected". Samuels JA (who dissented in the result but not on the test to be applied) held (at 716-717) that the test to be applied when considering "the issue of libel or no libel is such that a jury must be allowed great latitude" but noted that "the rule still is that if their verdict is unreasonable, it must be set aside". He said, "the test requires a case against the verdict which is "clear and beyond argument": Broome v Agar (1928) 138 LT 698 at 702, per Sankey L.J." 170 Mahoney JA would have accorded a particular inscrutability to a jury's decision that an imputation was not defamatory. His Honour observed (at 720) that it would be more difficult to persuade a court to set aside a jury's verdict that words were capable of a non-defamatory meaning than a jury verdict that an imputation was not conveyed. This was because, in his Honour's view, "there is … more difficulty in the court holding that a jury could not form a particular view as to general community standards than in deciding whether a word is capable of a non-defamatory meaning." 171 In Cinevest Ltd v Yirandi Productions Ltd [2001] NSWCA 68 at [41]; (2001) Aust Torts Reports ¶81-610, Spigelman CJ (with whom Meagher and Handley JJA agreed), speaking of the circumstances in which an appeal court could interfere with a jury finding that an imputation was not defamatory, observed that "[t]he test that must be met for this Court to interfere with a jury's verdict is a high one. The jury's finding must be rejected as perverse or unreasonable." 172 Although the majority of the High Court in Rivkin thought a standard that a jury finding should be "perverse" before it could be set aside was a "more demanding test than the law requires", I do not understand the majority's decision to be inconsistent with Spigelman CJ's proposition that the test is "a high one". As much follows from Callinan J's acceptance (at [184]) that "the occasions for judicial correction of jury verdicts will be extremely rare." 173 Further, I note that historically the test of 'perversity' has been regarded as a shortened expression of the test that "the verdict is one which reasonable men could not have reached or that is not susceptible of any rational explanation": see Hardy v Harris (1986) Aust Torts Reports ¶80-003, BC8601168 (per Glass JA with whose statement of principle Kirby P at 1 and Priestley JA at 11 agreed).

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178 Mr Nicholas QC submitted to the jury that the sense in which the reader would understand the concept of "profiteering" was a matter for it. He argued, however, that an available view of "profiteering" was that the appellant derived a profit from or earned fees for his work from his activities in the drug trials. He submitted that if that was the sense in which the jury understood the word "profiteering", then no right-minded member of the community would think the less of anybody for that. Alternatively, he submitted that if the jury was satisfied "profiteering" was understood in the sense of "exorbitant", then it was a matter for the members of the jury having regard to their experience of community values as to whether they would regard that as harmful to the appellant's reputation. 179 The appellant complained that the sense in which counsel for the respondent had submitted to the jury that it might understand the word "profiteering" was not reasonably open. There are a number of difficulties with accepting that submission. The first is that, as is apparent from my summary of Mr Nicholas QC's address to the jury, the respondent essentially left it to the jury to determine the sense in which a reader would understand the concept of "profiteering". Mr Nicholas QC also made it clear to the jury that even if it understood the word "profiteering" in the sense for which the appellant contended, it was nevertheless for the jury, applying its understanding of community values, to determine whether even understood in that sense, the imputation was defamatory. Those submissions were properly placed before the jury. 180 The appellant submitted that "profiteering" necessarily contains a pejorative connotation. He referred to the Macquarie Dictionary (3rd Ed) definition of "profiteering" to mean "one who seeks or exacts exorbitant profits, as by taking advantage of public necessity" and the Concise Oxford Dictionary (4th Ed) definition "make an excessive or unfair profit". 181 He referred also to Hidden J's summing-up to the jury and, in particular, his statement that the way imputation (c) had been put before it "you may think no real argument has been advanced against the proposition that they are defamatory if you find them". 182 In those circumstances, the appellant submitted that the finding that imputation (c) was not defamatory of the appellant "defied reasonableness". 183 The respondent submitted that the term "profiteered" could reasonably be understood as deriving a profit or as deriving a profit from a situation in which the person paying is obliged by necessity to pay. It submitted that a reasonable reader was entitled to conclude "especially in this day and age, that there is nothing negative involved in earning an income in circumstances where the person paying is obliged by necessity to pay". It referred to the fact that whether an imputation conveyed is in fact defamatory depends upon the context of the matter complained of and contemporary standards. It drew attention to the fact that an imputation of criminality was not always defamatory: Berry v British Transport Commission [1961] 1 QB 149 at 166. 184 It submitted that the question whether "profiteer" in the context used in the articles was in fact defamatory against contemporary standards was a classic jury question permitting of the answer given. 185 I would accept the respondent's submissions. In my view it could not be concluded that the words of the matter complained of were not capable of anything but a defamatory meaning. The jury was, properly, not directed to dictionary definitions of "profiteering". Such definitions do not assist this Court in determining whether the jury's decision was one no reasonable jury could reach. 186 The defamation was not "clear beyond argument": Rivkin, above, at [20] per McHugh J. The jury applied its understanding of general community standards in considering whether imputation (c) was defamatory. Its conclusion appears to me to have meant that according to those standards a person's reputation was not lowered in the eyes of the community if they earned a great deal, even an exorbitant amount, of money from drug trials. Its conclusion is understandable in the materialistic atmosphere of contemporary society.

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Schedule "A" 1 A HERALD INVESTIGATION 2 The drug body-snatchers 3 Australians used as guinea pigs for the global pharmaceutical market 4 Gerard Ryle 5 Thousands of Australian patients are being used as guinea pigs in drug trials for global pharmaceutical companies without explicit laws to adequately protect their rights. 6 Intellectually disabled men and women, incapable of giving consent on their own behalf, are being included in the trials, which are largely aimed at getting new drugs to the United States and European markets. 7 Pharmaceutical companies are paying private doctors up to $6,000 for every patient they recruit but the patients do not have to be told of the financial arrangement. The money covers trial expenses and allows a profit for the doctors. 8 Drug trials are vital in bringing life-saving medicines to market but the number being conducted in Australia has risen 20-fold since 1990 and many never result in approval for the drug. 9 Some trials are abandoned after reports of side-effects and deaths, either here or overseas, or because the drug simply does not work. 10 The chairman of the Australian Drug Evaluation Committee, Professor Martin Tattersall, who is at the forefront of medical research in Australia, believes the protection of patients' rights in drug trials needs a major overhaul. 11 "Basically most patients do what their doctors say," he said. "They do that because they want to trust their doctors. Some patients taking part in clinical trials don't appreciate that they are in a clinical trial." 12 A Herald investigation has found that: 13 Patients are being bought and sold like commodities by doctors and pharmaceutical companies but are not being told that money changes hands when they volunteer for new treatments. 14 The Therapeutic Goods Administration, the main responsible Federal Government authority, was obliged to directly review only two of the 1,712 clinical trials carried out in Australia last year. 15 Patients are not always given copies of the consent forms they sign and are often not in a position to question their doctor's suggestion that they join a trial. 16 Nearly one in six of the 210 medical bodies which approve trials - known as ethics committees - are being run out of private organisations. 17 One Sydney doctor who conducted trials on his patients got approval from an ethics committee that included, among others, his former lawyer, his former patient, his rabbi and his sister. 18 Global pharmaceutical companies have rushed to Australia at a time when debates have arisen over similar trials in Europe and the US, and because of the relative cheapness and ease of getting approval here. 19 Australian trials include experiments on dementia patients, the testing of hormone creams on menopausal women, and new vaccines in children.

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20 One experiment, approved by the NSW Guardianship Tribunal, involved putting intellectually disabled people on a anti-epileptic drug which never succeeded in being registered anywhere in the world. 21 Professor Tattersall said many trials which harmed patients may be hidden from public view because pharmaceutical companies controlled the data. 22 "One of the main flaws in the process of [drug] registration is that you only know the studies which are shown to you," he said. "You don't know the studies that were done and weren't shown to you. 23 "Clearly there is an opportunity for a company which is sponsoring a study to hide the dirty washing. 24 "I think the other thing that is true is that while the barriers for buying doctors have gone up quite a lot in North America and increasingly in Europe, they haven't gone up here yet." 25 Professor John Simes, director of the National Health and Medical Research Council's clinical trial centre, said the lack of a publicly accessible central trials register in Australia meant there was no accurate way of knowing what trials were being done, and by whom. 26 Associate Professor Paul Komesaroff, chairman of the ethics committee of the Royal Australasian College of Physicians, said industry funded research was easier to obtain and much more lucrative than government-funded research. 27 "In many cases the industry sponsored trial doesn't have a valid scientific intention. It is eroding research that is truly innovative in favour of research that satisfies commercial purposes." 28 No cure, Mrs James, but thanks for all the money. 29 Helen James agreed to test a new epilepsy drug, to her cost. Gerard Ryle writes. 30 When Mrs Helen James consulted a new physician she was willing to listen to any suggestion. And, as it turned out, her complex form of epilepsy was just what the doctor ordered. 31 Dr Roy Beran, a Chatswood neurologist, suggested that she might join a study of an experimental new drug which offered great hope to people with her condition. He ran through the pros and cons and she agreed to a 12- month trial. 32 In making her decision, Mrs James didn't know that her doctor had something to gain. 33 She wasn't told that the pharmaceutical company Parke-Davis was paying a fee for every patient recruited for the trial, which was aimed at getting the anti-epileptic drug Gabapentin registered in the United States. The money covered study expenses while allowing an amount for Dr Beran's time. 34 By agreeing to take part in September 1988, Mrs James became one of the first Australians recruited by their doctors into a booming new industry: testing experimental drugs on people here primarily for overseas markets. 35 Since regulations were eased a decade ago, Australia has become an important testing centre for international pharmaceutical companies which not only see a cheap place to do business but a willing test population. 36 TOMORROW How Sydney public hospitals earn cash trialling drugs on their patients.

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37 For people like Mrs James the trials offer enormous hope. But they also require large personal sacrifices, which in her case lasted for years. 38 There are often endless visits to the doctor, painful side-effects and rounds of intrusive medical procedures. 39 Worst of all, there is no guarantee that the treatment will work. 40 "You go in hoping for a positive outcome [but] in retrospect I wish I had withdrawn from the trial much earlier," said Mrs James. 41 "Several years of coping with the pressures of new and additional medications did not enhance the quality of my life as I had hoped". 42 Mrs James found no cure for her form of epilepsy but Parke-Davis did very nicely out of Mrs James. 43 The drug which she and at least 53 other Australians trialled is now worth an estimated $1.5 billion a year for its present owner, Pfizer, which merged with Parke-Davis. 44 Dr Beran also enhanced his reputation through his involvement. 45 In fact, he is proud of the pioneering role he has played in this new drug testing industry, boasting in July to a prestigious international medical journal, Epilepsia, how he overcame initial problems getting ethical approval by setting up his own ethics committee. 46 Under Australian law, the approval from an ethics committee is critical before starting a clinical trial. Its role is also vitally important to patients to ensure their rights are looked after. 47 "We are probably a pretty unique practice here," Dr Beran told the Herald. "At any one time we would have half a 48 No cure, but lots of money 49 From Page 1 50 dozen trials running, either starting up or winding down. 51 "What happens in Australia is that we are often the last port of call. When people cannot recruit patients overseas they say, 'Well, let's include Australia'." 52 What Dr Beran didn't reveal in Epilepsia was the make-up of the ethics committee that approved a number of his early drug trials and which was registered with the National Health and Medical Research Council. It included, among others, his sister, his rabbi, his former lawyer and his former patient. 53 "I originally had an ethics committee we created ourselves," Dr Beran told the Herald. 54 "There were colleagues who questioned its integrity because it was created and could be argued had links, which I think is both insulting to me and insulting to the ethics committee." 55 The global pharmaceutical companies paying Dr Beran's bills also appeared to ignore the fact that the ethics committee was run out of the Epilepsy Association of NSW, of which Dr Beran was a senior board member. 56 The association's then clinical psychologist, Mr Gary Banks - the man who, according to Dr Beran, put the members of the committee together - collected fees for a number of the psychological assessments for the trials in his capacity as a private psychologist.

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57 The flow-on benefits didn't stop there. Until 1998, Dr Beran's wife, Maureen, and Mr Banks's wife, Susan, were joint directors in a company called Strategic Health Evaluators that did the health economics, as consultants to the pharmaceutical industry, for at least three of the new anti-epileptic drugs tested by Dr Beran. 58 Mr Banks was a big shareholder in Strategic Health Evaluators until bought out by Dr Beran and his wife in 1998. 59 On the critical issue of the ethics committee, whose members changed over the years, Mr Banks's recollection differs with that of Dr Beran. 60 He said he didn't put it together, but rather he suggested a number of people who subsequently served on it. 61 By 1993 the issues for the ethics committee had been complicated by the inclusion of intellectually disabled people in Dr Beran's trials. 62 Using intellectually disabled people in trials has prompted fierce international debate because such people can't give consent on their own behalf and are unable to describe the all-important side-effects of new drugs. 63 The ethics committee was confronted with the issue after Dr Beran returned from Denmark, where he had visited the head office of the pharmaceutical company Novo Nordisk. 64 His mission, partly paid for by the company's Australian arm, had been to persuade them to test another new anti-epileptic drug, Tiagabine, here. Nine research sites in Australia were eventually signed up but Dr Beran's was the only one which included intellectually disabled people. 65 Novo Nordisk and Dr Beran said the patients were institutionalised residents of the Marsden Centre at Westmead and under the care of the then NSW Guardianship Board (now the Guardianship Tribunal). The Marsden Centre is a residential care facility run by the Department of Community Services. 66 A department spokesman confirmed Dr Beran had Marsden patients, but denied that residents were used in the trial. 67 Dr Beran defended the use of what he called "DDs" or "developmentally delayed" people in the Tiagabine trial even though discovering side-effects was one of its primary purposes. 68 "If I think a drug is good then I think everybody deserves that right [to take part in a trial]," he said "Should then we never put any DD on any new drug?" 69 Dr John Miller, medical director of Novo Nordisk's Australian arm, also defended the trial, which ran from May 1993 until September 1994. He said three other sites in Britain and Denmark included intellectually disabled people in trial groups. 70 "When considering epilepsy, people with intellectual disability represent the most afflicted end of the spectrum and those in greatest need of help," said Dr Miller. 71 "I would acknowledge the challenge of noting subtle side-effects of drug treatment in this population. However, this was recognised in the risk-benefit evaluation by the clinical investigators, ethics committees and others involved in the care and well-being of the patients."

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72 Dr Miller said the Australian arm of the trial was "pivotal" in getting Tiagabine registered with the US Food and Drug Administration. He also said that the ethics committee approval for Dr Beran's part in the trial came from the ethics committee of Disability Resources Inc - a body that was being managed by Mr Banks. 73 Mr Banks said Disability Resources Inc provided "secretarial support" to the ethics committee when it moved from the Epilepsy Association in about late 1992. 74 Although the ethics committees of the NSW Epilepsy Association and Disability Resources Inc have long since closed, Dr Beran has continued using intellectually handicapped people in drug trials, in recent years with the approval of the Royal North Shore Hospital ethics committee. 75 In 1999, Dr Beran appeared before the Guardianship Tribunal where he asked for, and was granted, the right to use a number of intellectually disabled people in the trial of another new experimental anti-epileptic drug, Remacemide. 76 The drug has still not been registered anywhere, but it had been used experimentally by Dr Beran for a number of years, with mixed results. 77 "If you think the drug works I think it is almost unethical not to allow DDs, if you think they are well supervised," Dr Beran explained. "I have used Remacemide for eights years, 10 years. I have one patient who has been rendered totally seizure free." 78 Remacemide was shelved by its manufacturer, the giant Swedish company AstraZenica, before it could be given to any intellectually disabled people, but by then Dr Beran stood to collect fees from the trial because the preliminary examinations of patients had already begun. 79 The Herald has learnt that the "per capita" or per person fees in the Remacemide trial were to be broken down to 10 parts and calculated in British pounds. 80 Money would be paid for each of 10 proposed visits made by the patient, with the experimental drug not due to be administered until the seventh visit. 81 The payments for each visit ranged up to $1,000 a patient, but the Guardianship Tribunal was not told about the financial arrangements when Dr Beran appeared before it. 82 The deputy president of the tribunal, Ms Marion Brown, who attended the hearing that gave the go-ahead to Dr Beran, said financial disclosure was not required under State laws. 83 Aside from asking his patients to take part in trials, Dr Beran also advertises in newspapers such as The Sydney Morning Herald and The Mosman Daily for volunteers. 84 "Wanted: Volunteers for Migraine Treatment Study", one advertisement reads. "Strategic Health Evaluators is seeking men and women between the ages of 18 and 65 who experience 1-6 migraines per month to participate in a migraine treatment study." 85 Dr Beran is particularly proud of this, his latest study, which involves experimenting with a powerful anti-epileptic drug against migraine attacks.

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86 "[The trial] was my idea," he said. "I spoke to the drug company and said to them that I think this is an area that has not been looked at." 87 Though the emphasis in the advertisement is that the drug would be provided free to patients, they are not specifically informed about the arrangement that pays Dr Beran for each person he recruits. 88 "I tell patients that to get a new drug to market costs [the drug company] $US500 million. My involvement in the trial could be $100,000," he said. 89 "What I am selling is my time and my intellect. What they [the patients] are told is that the drug company pays for their medical treatment in the trial." 90 Today, Dr Beran doesn't recall much about the former ethics committee of the NSW Epilepsy Association and had to be pressed even to remember who served on it, including his sister Monica Kleinman, a psychologist. 91 "It was totally at arm's length," he said. "I had nothing to do with its administration, organisation or function. "Personally, I couldn't give a damn whether I now everybody on an ethics committee or not, so long as I know them to be of the highest integrity." 92 Mr Keith Roberts, the Epilepsy Association's chief executive, is also keen to distance the present organisation from its past. 93 "It was inappropriate for an organisation such as this to have an ethics committee," he said. "We closed it down." To Mrs James, however, the memory of the trial remains, especially as the drug continues to make newspaper headlines around the world. 94 The drug is at the centre of dispute between its present owner, Pfizer, and the Australian company FH Faulding, which wants to manufacture a generic version. 95 Pfizer wants to retain its 1992 patent on the drug, which was obtained from the US Food and Drug Administration largely through two trials involving Australian patients. Nearly a quarter of those recruited worldwide were from Australia, said a Pfizer spokeswoman. 96 In the smaller of the two trials, Dr Beran recruited all 15 Australian patients. 97 Today, as the pharmaceutical companies squabble over the spoils, Mrs James - and thousands of other Australians like her - are slowly realising that what they volunteered for was research, not treatment.

Beran v John Fairfax Publications Pty Ltd

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