C S v Anna BIEDRZYCKA

Supreme Court of NSW|2010-11-17|Before: Latham J

Imperial Furniture Pty Ltd v Automatic FireSprinklers Pty Ltd (1967) 1 NSWLR 29 James Hardie & Co Pty Ltd v Roberts [1999] NSWCA 314; 47 NSWLR 425 Laresu Pty Ltd v Clark [2010] NSWCA 180 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 McCamley v Harris [1997] NSWSC 360 Mobbs v Kain [2009] NSWCA 301 Oxley County Council v Macdonald [1999] NSWCA 126 Redken Laboratories (Australia) Pty Ltd v Docker [2000] NSWCA 100 Ruddock v Taylor [2003] NSWCA 262; 58 NSWLR 269 Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364 The Eastern Extension, Australasia and China Telegraph Co. Ltd v Federal Commissioner of Taxation [1923] HCA 62; (1923-24) 33 CLR 426 Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; 186 CLR 574 Walmsley v Cooper (1839) 11 A. & E 221 Zanner v Zanner [2010] NSWCA 343 Category: Principal judgment Parties: C S - Plaintiff Anna Biedrzycka - 1st Defendant Colin Gross - 2nd Defendant Harry Johnson - 3rd Defendant Idameneo (No. 123) Pty Ltd - 4th Defendant Representation: Counsel: A Sullivan QC / Ms J Lonergan - Plaintiff GM Watson Sc / NE Chan - Defendants Solicitors: Slater and Gordon Lawyers - Plaintiff TressCox Lawyers - 1st Defendant Avant Law Pty Ltd - 2nd and 3rd Defendants HWL Ebsworth Lawyers - 4th Defendant File Number(s): 2007/264861

Judgment 1The first, second (Dr Gross) and third (Dr Johnson) defendants are doctors in a medical practice in Eastern Sydney. The fourth defendant, Idameneo (No. 123) Pty Ltd, provided all relevant administrative services and facilities under a contractual arrangement with the doctors. 2Doctors Gross and Johnson admitted liability for their negligence with respect to a patient, LB, in March and April 2004. The patient, who was not informed that tests carried out for the presence of the HIV virus were unresolved, had unprotected sexual intercourse with the plaintiff, resulting in the transmission of that disease. Settlement of the proceedings between the plaintiff and Doctors Gross and Johnson was reached in July 2009. The first and fourth defendants had verdicts entered in their favour. 3Doctors Gross and Johnson filed a cross claim (Amended First Cross Claim) against the fourth defendant, seeking a contribution towards the damages paid to the plaintiff on the basis that the employees of the company were negligent in failing to maintain proper records, namely the current address of the patient. A letter advising the patient of the need for re-testing for HIV, sent to the patient's former address, failed to reach her. When the patient returned to the practice for the test results, an incomplete entry on the patient's records was incorrectly conveyed to the patient as a negative result for HIV. 4The fourth defendant denies that it owed a duty of care to the plaintiff. Further, it contends that, assuming the existence of a duty of care and breach of that duty, the second and third defendants cannot establish on the balance of probabilities that the breach caused the harm suffered by the plaintiff. 5The fourth defendant also filed a cross claim (Amended Second Cross Claim) against all three doctors seeking indemnity under the services agreement between it and each of them, damages under the agreement and an indemnity and/or a contribution as joint tortfeasors. That cross claim is only pursued against Doctors Gross and Johnson. 6By their defence to that cross claim, the second and third defendants contend that, on the proper construction of the relevant agreement, the indemnity provision does not apply in the present circumstances because liability does not arise from Doctors Gross and Johnson rendering medical services pursuant to the agreement. Rather, if liability arises, it arises as a result of the fourth defendant's failure to provide appropriate administrative services pursuant to the agreement.

Factual Background 7It is common ground that the following facts were established by the evidence. 8In 1999, LB attended the medical centre, where Doctors Gross and Johnson worked, along with a number of other doctors. At that time, LB was residing in rented premises at Bondi. 9On 30 March 2004, LB returned to the practice. She was then residing at a different address in North Bondi. LB had not made an appointment, but was referred to a Dr Poulos. LB requested a test for sexually transmitted diseases. Dr Poulos counselled the patient and referred her the same day to Dr Biedrzycka for testing. Dr Biedrzycka also counselled LB and arranged for the pathology tests to be carried out by a nurse employed at the centre. The patient's blood was subsequently sent off for analysis. 10Dr Biedrzycka asked LB to return to the practice for the results in about a week's time. The doctor also informed LB that she would be away on leave and that LB should return to the practice in order to consult another doctor. 11At no stage during LB's visit on this occasion did any member of staff employed by the fourth defendant confirm with LB that her address, as it appeared in the records of the practice, was current and correct. LB's evidence was that the receptionist spoke to her abruptly and only asked for her Medicare card. 12On 5 April 2004, Dr Johnson received a telephone call from the SDS pathology laboratory. Dr Johnson was the medical director of the practice whose responsibilities included overseeing the administrative performance of the practice. The laboratory indicated that the patient's results were equivocal with respect to the HIV test and that the patient needed retesting. That telephonic advice was followed by a hard copy of the advice sent to the practice for the attention of a doctor. The regulatory framework surrounding notification of prescribed medical conditions mandates that positive or equivocal results with respect to HIV testing are not communicated electronically from the laboratory directly to the practice, but require telephonic and hard copy notification to a medical practitioner. 13Having received the advice, Dr Johnson noted the patient's records "By phone, needs bloods repeated, pos result, needs repeat." The same day, Dr Johnson directed the administrative staff of the practice to send a recall letter to the patient at the address corresponding to the records held by the practice. That letter, dated 5 April, read in part "Dr Johnson would like you to come back to the surgery to repeat some of your blood tests. ... Dr Johnson requests that you please come into the surgery as soon as possible." 14LB attended the practice of her own volition on 22 April 2004. The patient asked to see Dr Biedrzycka (who had returned from leave) and was told that the doctor was not available. The patient then saw the next available doctor who was at the time Dr Gross. 15Dr Gross called up the patient's records on the computer. Dr Gross interpreted LB's test results as negative, with the exception of candida, but there was one result which simply said "specimen status, original report to requesting doctor, ordered by Dr Biedrzycka, collected date 30 March 2004, reported date 5 April 2004". Dr Gross carried out no further enquiries. In particular, he did not read that part of the patient's history that included Dr Johnson's note of 5 April. It is accepted by Dr Gross that had further enquiries been made, it would have been possible to ascertain that the specimen status entry was a reference to the outstanding HIV test. 16Dr Gross advised the patient that her tests were clear except for the candida swab. His entry in the patient's records noted "22 April 2004 review results all NAD but Pos Candida." 17LB left the practice with the impression that there was no impediment to unprotected sexual intercourse. LB advised the plaintiff accordingly and they engaged in at least one episode of unprotected sexual intercourse about one week after 22 April. There had been no sexual intercourse between them between 30 March and 22 April 2004. 18LB's evidence was that, had she been aware that there was an equivocal result with respect to HIV and that she needed retesting, she would not have engaged in unprotected sexual intercourse with the plaintiff at least until she had obtained a clear result. In addition, had she received Dr Johnson's letter, she would have telephoned the practice to find out what was wrong. Although she may not have taken it with her to the surgery, she would have conveyed the contents of the letter to any treating doctor. 19On 12 May, Dr Johnson was advised by staff that there had been no response to the letter. Dr Johnson directed that a telephone call be made to the phone number in the records of the practice, but those attempts were unsuccessful. A further letter of the same date was sent, again requesting LB to come to the surgery as soon as possible. Dr Johnson also made an entry in LB's clinical records. It noted in part that "this patient needs her HIV serology repeated as there is a suggestion that the serology tests were POS." 20The following day, the staff informed Dr Johnson that the telephone number for LB in the records of the practice was incorrect. From that time until the end of May, Dr Johnson made various enquiries through the Sydney Hospital Sexual Health Clinic, ultimately resulting in a representative of the Clinic making contact with LB's father. LB attended at the practice on 3 June and was told of the need for re-testing for the HIV virus.

Was there a Duty of Care Owed by the Fourth Defendant to the Plaintiff ? 21The existence of a duty of care between the fourth defendant and the plaintiff, including the content of that duty, falls to be determined by "a close analysis of the facts bearing on the relationship between the plaintiff and the [fourth defendant] by reference to the 'salient features' or factors affecting the appropriateness of imputing a legal duty to take reasonable care to avoid harm or injury" : per Allsop P at [102] Caltex Refineries (Qld) Pty Ltd v Stavar & Ors. [2009] NSWCA 258; 75 NSWLR 649. Such an exercise is said to involve an evaluative judgment, including normative considerations : Caltex Refineries v Stavar at [105]. 22Sections 5B and 5C of the Civil Liability Act 2002 do not detract from or modify this approach. 23Of some importance to this analysis in the circumstances of this case is the fact that the harm suffered by the plaintiff was constituted by the transmission of a medical condition, which is scheduled under the terms of the Public Health Act 1991, thereby imposing strict obligations upon medical practitioners with respect to notification and treatment. It is necessary to briefly consider that legislative framework in order to place factors, such as the nature and foreseeability of the relevant harm, and actual or constructive knowledge on the part of the fourth defendant of the consequences of its conduct or omission, in their proper context. 24The Public Health Act 1991 is "an Act relating to the maintenance of proper standards of health for the public". Part 3 deals with scheduled medical conditions. A medical practitioner who believes on reasonable grounds that a patient suffers from a sexually transmissible medical condition must provide the patient with prescribed information (s12). A failure to do so is an offence under the Act. 25Division 3 of Part 3 sets out various obligations with respect to the notification of Category 3 and Category 5 medical conditions. An HIV virus infection falls within both categories (Schedule 1). Section 16 relevantly provides :- 16 Notification of test results-Category 3 medical condition (1) If: (a) a medical practitioner requests a serological or other prescribed test for the purpose of detecting whether a person is suffering from a Category 3 medical condition, and (b) the test has a positive result, the person who, in response to the request, certifies the result of the test to the medical practitioner must, as soon as practicable, send to the Director-General a report in the approved form that relates to the test but does not disclose the name or address of the patient if the medical condition is also a Category 5 medical condition. 26Section 16 also imposes an obligation upon the medical practitioner to supply sufficient information in a timely manner, so as to enable the person certifying the test results to make the report to the Director General of the Department of Health in NSW. Failure to comply with this obligation is an offence under the Act. 27Division 4 allows for exceptions to the privacy provisions that otherwise apply to protect the identity of persons with a Category 5 medical condition. Relevantly, a medical practitioner must supply the name and address of a patient with the condition to the Director General, where the Director General has obtained an order from the District Court on the grounds that the identification of the person is necessary to safeguard the health of the public. 28Division 6 deals with compulsory testing of a named person and the making of public health orders, which prohibit the named person from engaging in specified conduct, where the person is endangering, or is likely to endanger, the health of the public. A public health order must be served personally on the named person. 29It is not suggested that Divisions 4 and 6 have any direct bearing on the circumstances of the present case, but the nature and breadth of the powers under the Act demonstrate that significant measures, capable of breaching the privacy of an individual and constraining the patient's conduct, are deemed necessary in the interests of maintaining public health. The exercise of the power to obtain a public health order, and the effective operation of the order, relies upon the integrity of the records relating to the patient's name and address kept by the medical practice. 30More relevantly, the Act places a number of obligations on medical practitioners who become aware of a patient with a Category 3 or 5 medical condition. In a very real sense, the competency of general medical practices throughout the community underpins the operation of the Act, to the extent that the identification, treatment and monitoring of persons in the community with scheduled medical conditions depends largely in the first instance upon presentation to a medical practitioner. In the event that a medical practice does not maintain accurate records capable of readily identifying and locating a given patient, the achievement of the objects of the Act may be seriously compromised. 31The contents of the fourth defendant's Reception Training Manual and the Policy and Procedures Manual (Ex C) also assume considerable relevance and force in determining the existence and scope of a duty of care. The former instructs the fourth defendant's staff at reception to ask a series of questions, including whether the patient has attended the centre before, a request for the patient's Medicare card and Health Care card, and confirmation of the patient's address and telephone number. The manual instructs the receptionist to request a patient to complete a patient information sheet if the patient is not willing to repeat their address and phone number. (Ex C4, page 5) 32The job description for the position of receptionist at the fourth defendant's practices includes "maintain accurate patient computer records, including updating and modifying existing records." (Ex C16) 33It should be noted that there is no evidence contradicting the proposition that the fourth defendant was responsible for maintaining accurate records relating to patient details. Dr Gross' evidence was that from the date of purchase of his practice by the fourth defendant, ownership and conduct of all of his patient records would become the property of the fourth defendant. His understanding, based on his experience of working at the practice and observing the staff at reception, was that it was the responsibility of staff to check the contact details relating to patients. Dr Gross conducted his practice on the understanding that the staff of the fourth defendant would carry out this task properly. 34Dr Johnson also understood that the fourth defendant had ownership and conduct of all patient records. Further, Dr Johnson gave evidence that during the course of his 25 year career, it had always been his understanding that it was the responsibility of administrative staff to check a patient's contact details as recorded in the practice records at each consultation, in order to ensure that those details were current and correct. 35Dr Biedrzycka's evidence was to the same effect. Dr Biedrzycka observed reception staff taking contact details and she was informed by a member of the fourth defendant's staff that they were trained to do so at each consultation. Dr Biedrzycka did not check her patients' contact details and phone numbers during the course of consultations because she believed that reception staff had already carried out this task. 36The evidence of the doctors is further supported by the terms of the agreement between each doctor and the fourth defendant. In the case of Dr Gross and Dr Johnson, each of those agreements contained a clause that ensured the provision, supply and maintenance of administrative services, clerical staff, facilities, plant and equipment by the fourth defendant as considered necessary for the doctor in each case to conduct a medical practice from the premises. A further clause in each agreement under the heading "Medical Services" stated that "all [patient] records remain the property of the company and [the doctor] must not make copies of the whole or any part of them or remove them from the premises either during or after the termination of this Deed." 37Returning to the fourth defendant's policy documents, the "Treatment Room Policy Re Pathology Collection" (Ex C17) sets out the procedure to be followed where a sample of blood is requested by a treating doctor. The policy includes the following instruction : "ensure that all the patient details are written and legible on the request form. The patient must identify themselves to you by stating their name, date of birth, address and phone number." It is apparent that this procedure was not followed on 30 March 2004 by the fourth defendant's employee who took the blood sample from LB. 38At page 75 of the Policy and Procedures Manual, there is a reference to the "patient recall book". This book should be kept at the front desk of the practice and in the event that a doctor asks a member of staff to recall a patient urgently, "e.g. abnormal pathology results", the following procedure applies, namely "on the day of request enter the patient name, date of birth and address in the Recall Register." The staff member must attempt to phone the patient to request attendance at the centre in relation to the last consultation. If the patient has not been contacted, documentation should be made in the Recall Register and a first recall letter should be sent. 39The Manual instructs staff to check the Recall Register each Saturday morning, attending to any non-completed entries. In the event that three recall letters have been sent to the patient and the patient has not attended at the practice, "attempts should be made to contact the electoral office to establish the correct address." 40The evidence disclosed that no Recall Register was kept at the front desk of the practice in this case (Ex D, p 471). 41The combination of these policies and procedures reflect an awareness on the part of the fourth defendant of the importance of maintaining accurate and current patient records, particularly in the case of patients in respect of whom a doctor has requested a pathology sample. A procedure was put in place to allow for the collection of accurate information, capable of ensuring ready contact with a patient in the event that a pathology sample was returned with a positive result, or indicated a need for retesting. It cannot be suggested that the fourth defendant's employees, including those employed at reception, were not aware of the risk to members of the public posed by a patient, who was potentially infected with the HIV virus, engaging in unprotected sexual intercourse, in ignorance of the nature of his /her medical condition. Yet the procedures adopted by the fourth defendant to guard against this very risk were not implemented at this particular practice. 42It is acknowledged that the fourth defendant's employees may not have been privy to the reasons for the request in relation to LB's pathology. The confidentiality provisions surrounding the testing for, and disclosure of, the HIV virus militate against a finding of actual knowledge on the part of the fourth defendant of the risks inherent in failing to notify LB promptly of the need for retesting. However, for the reasons discussed above, the fourth defendant had constructive knowledge of that risk. The risk was therefore foreseeable for the purposes of s 5B(1)(c) of the Civil Liability Act . 43In many respects, the arguments advanced by senior counsel for the fourth defendant in support of the proposition that no duty existed echo those the President addressed and rejected in Caltex Refineries v Stavar . The fourth defendant maintains that, in effect, it is sought to erect a duty of care simply on the basis of a practice manual and that to do so necessarily extends a duty of care to an indeterminate number of people with whom the patient may have contact. 44As to the complaint of indeterminacy, the President said at [112] :- There is no doubt that questions of indeterminacy are relevant to the imposition of a duty of care (and its scope and content). That question will, however, be intimately related to the risk of harm and the reasonable methods of avoidance of the risk of that harm. 45Where the obligations under the Public Health Act apply to the medical practice operated by the fourth defendant, an awareness on the part of the fourth defendant of the recognized risk of the transmission of scheduled medical conditions, such as the HIV virus, by its patients, required the implementation of reasonable and appropriate measures to ensure as far as practicable that patients were promptly notified of the results of pathology samples. The fourth defendant was aware that any delay in notification to such a patient increased the risk that others coming into contact with the patient would be exposed to infection. This was not a case of imposing on the fourth defendant an obligation to warn "an indeterminate class". It was a case of adhering to procedures in order to confirm with the patient his/her current address on the taking of a pathology sample, so that the transmission of an infectious disease by a patient might be prevented or at least minimised. 46It is accepted that a recognised practice, contained within a policies and procedures manual, and its breach do not, without more, establish the existence of a common law duty. However, the additional factors to which I have made reference in these reasons amplify the circumstances said to give rise to the existence of the duty and place the fourth defendant's documented procedures in their proper context. 47The fourth defendant also placed some reliance on the absence of vulnerability on the part of LB, in so far as she acknowledged that she did not volunteer her current address, despite the lapse of about 4 years since she last visited the practice, and under cross examination she conceded that she understood it was her responsibility to return to the medical centre to receive the test results. This submission is, in my view, misplaced. The plaintiff was in fact vulnerable to harm from the fourth defendant's conduct, insofar as the plaintiff was unable to take any steps to protect himself, in the absence of knowledge of LB's medical condition. In that respect, the plaintiff was almost wholly reliant upon the integrity of the fourth defendant's procedures to avert the risk of infection from LB. 48The potential widespread nature of the harm, including its recognition by a strict statutory scheme, the fact that the fourth defendant was in the business of providing health care, constructive knowledge on the part of the fourth defendant of the harm that would result from the failure to promptly notify a patient of a serious medical condition, the foreseeability of harm to others with whom an infected patient came into contact, the assumption of responsibility by the fourth defendant for keeping accurate and current patient records, and the fact that compliance with the fourth defendant's own documented procedures would have averted the relevant harm, justify the imputation of a duty of care on the fourth defendant in the circumstances of this case. 49That duty of care consists, in part, of the requirement to maintain current and accurate records that ensure effective and timely contact with its patients when the need arises, particularly when a pathology sample has been taken. 50The fourth defendant acknowledged that if a duty existed, then it had undoubtedly been breached. I pass to a consideration of the issue of causation.

Did the Fourth Defendant's Breach Cause the Harm to the Plaintiff ? 51Section 5D of the Civil Liability Act 2002 provides :- (1) A determination that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the occurrence of the harm ( " factual causation " ), and (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused ( " scope of liability " ). .................................................................................. (4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. 52It is not suggested that this case is an exceptional case within the meaning of s 5D(2). The onus is upon the second and third defendants to prove on the balance of probabilities any fact relevant to the issue of causation (s 5E). The fourth defendant does not contend that this onus has not been discharged in the circumstances of this case. 53The division of the issue of causation into two distinct elements, namely factual causation and scope of liability, was said by the High Court in Adeels Palace Pty Ltd v Moubarak [2009] HCA 48 to suggest a departure from the common law approach to causation, according to Mason CJ's judgment in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506. Mason CJ referred to the determination of causation as "ultimately a matter of common sense". Value judgments and policy considerations played a legitimate role in determining causation as a factual issue (at 515). However, the approach of the High Court in Adeels Palace appears to omit such considerations in the resolution of the "but for" test in s 5D(1)(a) ; at [44] to [53]. 54The most recent examination of the operation of s 5D appears in Zanner v Zanner [2010] NSWCA 343. There was no issue in that case that factual causation was established and that s 5D(1)(a) was satisfied. The question under consideration by the Court was whether s 5D(1)(b) was satisfied. However, the President, with whom Young JA agreed, made the following observations on the role of the common law concept of causation in the operation of s 5D :- 11 The requirement to follow s 5D is clear. What its statutory content is and the extent of any continuity with developing common law concepts awaits judicial elucidation. In Woolworths Limited v Strong [2010] NSWCA 282 at [48] Campbell JA (with whom Handley AJA and Harrison J agreed) said that s 5D(1) excluded notions of "material contribution" and increase in risk. To the extent that his Honour was referring only to factors or circumstances from which a negative "but for" answer was given, so much is clear. However, the notion of cause at common law can incorporate "materially contributed to" in a way which would satisfy the "but for" test. Some factors which are only contributing factors can give a positive "but for" answer. Both the driver who goes through the red light and the driver with whom he collides who is not paying attention contribute to the accident. If either episode of neglect had not occurred the accident would not have occurred. 55On the role of common sense in the operation of the test under s 5D, the President said :- 12 There is no suggestion that the application of common sense is in any way foreign to the task in ss 5D(1)(b), (2) and (4). Indeed it would be an odd interpretation of a law of the Parliament that excluded such a consideration from an evaluation of this kind against the background of the common law and, in particular, in the light of the contents of the Ipp Report. 56Tobias JA, who delivered the principal judgment in Zanner , (Young JA agreeing) also addressed the place of common sense factors in the application of s 5D. After referring to Ipp JA's comments at [85] to [89] and [92] in Ruddock v Taylor [2003] NSWCA 262; 58 NSWLR 269, to Graham v Hall [2006] NSWCA 208; 67 NSWLR 135 at [78], to Mobbs v Kain [2009] NSWCA 301, and to Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364, his Honour said :- 79 The most that can be extracted from the foregoing references is that this Court's determination of whether it is appropriate for the scope of the first appellant's liability to extend to the harm caused to the respondent, is to be considered as a matter of common sense taking into account any relevant policy considerations that might assist in determining whether or not, and why, responsibility for the harm to the respondent should be imposed upon the first appellant. 57Applying these principles to the circumstances of this case, s 5D(1)(a) requires the second and third defendants to establish that it was more probable than not that, but for the failure on the part of the fourth defendant to keep current and accurate records of a LB's address, the transmission of the HIV virus to the plaintiff would not have occurred. 58The argument advanced on behalf of the second and third defendants on the issue of factual causation adopted the following steps. The evidence established that, had LB received the recall letter which was sent to the wrong address, she would have telephoned the medical centre to determine the purpose of the recall, attended at the medical centre as soon as possible after receipt of the letter, and either taken the recall letter with her or conveyed its contents to the treating doctor. 59It was therefore more probable than not that LB's attendance at the medical centre some time after 5 April 2004 would have alerted the treating doctor (whether that was Dr Gross or Dr Johnson) to the unresolved nature of the test results for the HIV virus. LB would have been advised of the need for retesting and counselled against engaging in any unprotected acts of sexual intercourse until the results of a further test were available. It therefore follows that LB would not have engaged in the unprotected act of sexual intercourse with the plaintiff, approximately a week after 22 April 2004, which resulted in the relevant harm. 60The argument in response put on behalf of the fourth defendant is that Dr Gross' negligence in failing to review all of LB's test results on 22 April intervened, so that LB's ignorance of the contents of the recall letter (and hence the fourth defendant's negligence) became irrelevant. The cause of the transmission of the HIV virus to the plaintiff was Dr Gross' negligent advice to LB that there was no impediment to engaging in unprotected sexual intercourse. Given that LB returned to the practice of her own volition on 22 April 2004, before any act of unprotected sexual intercourse had taken place, the fact that LB did not receive the recall letter was not a necessary condition of the relevant harm suffered by the plaintiff. 61Both senior counsel sought to rely upon aspects of Basten JA's judgment in Elayoubi v Zipser [2008] NSWCA 335. I would agree with the submission of senior counsel for the second and third defendants that this case, like Elayoubi , "could be analysed as involving independent acts of negligence, each of which gave rise to a risk, which risk in fact materialised." (at [52]). In the result, there is no utility in examining the basis of that decision. It did not call for the application of the "but for" test. 62Having regard to the High Court's insistence in Adeels Palace on the application of the "but for" test and paraphrasing the approach of the President in Zanner set out above at [54], the issue in this case is resolved by posing the question whether the harm to the plaintiff would have been averted, if either episode of neglect had not occurred. In other words, if the fourth defendant maintained current and accurate records allowing the recall letter to be sent to the correct address, would the HIV virus have been transmitted to the plaintiff ? The answer to that question is undoubtedly "no". If Dr Gross had read LB's complete patient history on 22 April 2004, would the HIV virus have been transmitted to the plaintiff ? Again, the answer is undoubtedly "no". 63Accordingly, I am of the view that the submissions advanced by the second and third defendants on the issue of causation ought be accepted. The patient's receipt of the recall letter would have averted the risk, at any time thereafter, of an incomplete consideration of her patient history and of incorrect advice being given to her on the status of her test results. The fourth defendant's negligence relevantly caused the harm to the plaintiff, in that the failure to keep accurate and current patient records was a necessary condition of its occurrence. 64There was no issue taken with respect to satisfaction of s 5D(1)(b) and (4). In any event, the type of normative and policy considerations that have been considered at [23] to [30] of these reasons amply justify the extension of liability to the fourth defendant.

Is the Third Defendant a Tortfeasor ? 65Where, as here, a claim is made under the Law Reform (Miscellaneous Provisions) Act 1946, the party seeking a contribution after a settlement (the second and third defendants) must be prepared to establish that, if the claim had been fought out, the party would have been held responsible in law and liable to pay the damages in whole or in part ; per Gummow J, Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; 186 CLR 574 at 616, referred to in Frisbo Holdings Pty Ltd v Austin Australia Pty Ltd [2010] NSWSC 155. 66The fourth defendant submits that Dr Johnson was not and ought not to have been held liable to the plaintiff. If that is so, only Dr Gross may recover a contribution from the fourth defendant under s 5(1) of the Law Reform (Miscellaneous Provisions) Act , assuming the fourth defendant is not indemnified under its agreement with Dr Gross. 67The basis upon which it is maintained that the third defendant was negligent is twofold. Firstly, it is said that, in his entry in the patient records on 5 April, Dr Johnson did not explicitly state that the equivocal result was in respect of an HIV test. The entry on 5 April simply recorded "needs bloods repeated, pos result, needs repeat." The reference to the need for a further test for the HIV virus was not inserted in the patient records by Dr Johnson until 12 May 2004. That was, of course, after LB had seen Dr Gross on 22 April. 68The second aspect of Dr Johnson's negligence is said to consist of taking insufficient steps to ensure the recall of the patient. Dr Johnson did not instruct staff to attempt to make a phone call to LB until 12 May 2004. The next day, he was informed that the phone number was incorrect, which prompted more extensive enquiries to locate the patient. Had that instruction been given by Dr Johnson on 5 April, those more extensive enquiries would have been made at an earlier time, resulting in probable contact with LB before 22 April. 69The fourth defendant's answer to these propositions is that Dr Johnson denied in the course of his evidence that he was negligent. Dr Johnson's instruction to staff that a recall letter should be sent to LB was considered appropriate and sufficient by Dr Johnson and the entry that he made in LB's patient history on 5 April was said to be consistent with the information that he received from the pathology laboratory. Further, Dr Johnson agreed in cross-examination that any doctor in the practice who treated LB on 22 April was capable of speaking to Dr Johnson about the meaning of that entry, and that if Dr Johnson had been contacted, he would have told that doctor that LB needed to be retested and counselled in respect of the risks of HIV infection. 70Dr Johnson's evidence concerning the phone call from the pathology company on 5 April 2004 was that the laboratory technician was "telephoning about an HIV test on [LB]. ....... He said the test results were equivocal and needed to be taken again to confirm the diagnosis." Having regard to this evidence, I do not agree with the proposition that Dr Johnson's entry on 5 April was appropriate and sufficient to convey the information that he received from the pathology laboratory to another doctor who may, from time to time, in treating LB, have cause to access her patient history. In a practice where patients routinely presented without an appointment and requested to see the next available doctor, it was vital, particularly where a doctor had previously requested testing of a pathology sample, that the most complete information was made available on the patient history. It should not have been necessary for a doctor to seek clarification from Dr Johnson with respect to his entry on 5 April before being in a position to properly treat and counsel LB. 71I also agree with the submission that Dr Johnson's failure to direct staff to contact LB by telephone, at the same time that he instructed a recall letter to issue, constituted a breach of his duty to LB and to those with whom she came into contact. Dr Johnson's awareness that LB was potentially HIV positive, and his awareness of the public health implications in failing to make prompt contact with LB, dictated that every possible avenue ought to have been explored at the earliest available opportunity. 72I am satisfied that Dr Johnson was negligent in this respect and that he is entitled to recover a contribution from the fourth defendant. I note in passing that these aspects of Dr Johnson's conduct were precisely those relied upon by the fourth defendant to support the allegation of negligence in the Amended Second Cross Claim.

The Construction of the Indemnity Clauses in the Provision of Services Agreements. 73Dr Gross entered into a performance guarantee (Ex C7) with the fourth defendant (the Company) on 18 October 2001, whereby the doctor undertook to "procure that the IMP [Colin Gross Pty Ltd] carries out the terms of the obligations imposed on the IMP under the Practitioner Contract". The "Practitioner Contract" refers to a further agreement entered into on the same date, namely the "Provision of Services to Incorporated Medical Practitioner" (Ex C8). This latter agreement contained the following clause :- 7.1 As between the Company on the one hand and the IMP and the Doctor on the other hand, the IMP and the Doctor are jointly liable for, and by this Deed indemnify the Company against, any liability whatever arising from the Doctor rendering medical services as a consequence of the IMP being a party to this Deed or otherwise in connection with this Deed or other acts or failure to act on the part of the Doctor or the IMP, whether of a medical service nature or otherwise. (italics not in original) 74Dr Johnson entered into a "Provision of Services to Medical Practitioner" agreement (Ex C13) with the fourth defendant (the Company) on 7 June 2002. That agreement included the following term :- 7.1 The Doctor is liable for, and by this Deed indemnifies the Company against, any liability whatever arising from the Doctor rendering medical services pursuant to or in connection with this Deed or other acts or failure to act on the part of the Doctor, whether of a medical service nature or otherwise. (italics not in original) 75The fourth defendant contends that these clauses in the respective agreements operate to indemnify it against the Cross Claim now brought by the second and third defendant. In effect, the fourth defendant's construction of the clauses is said to defeat the operation of s 5 of the Law Reform (Miscellaneous Provisions) Act. 76The submissions advanced by the second and third defendants in respect of the construction of these clauses dispute that they give rise to the meaning attributed to them by the fourth defendant, either on the basis of the clear language of the clauses, having regard to the principles of construction of a commercial contract, or on the basis that, assuming some ambiguity in the meaning of the clauses, that ambiguity should be resolved in favour of the party providing the indemnity : Laresu Pty Ltd v Clark [2010] NSWCA 180. 77I have reached the conclusion that the submissions of the second and third defendants as to the plain meaning of the language in the clauses ought be accepted and that there is no relevant ambiguity that requires the Court to go further in construing the provisions. 78It is relevant to observe that Dr Gross and Dr Johnson each sold their medical practice to the fourth defendant in the latter stages of their respective careers. Dr Gross had been a medical practitioner for 34 years when he commenced working with the fourth defendant. Dr Johnson had been a medical practitioner for 27 years when he joined the fourth defendant. Throughout their professional lives, they understood that they were liable for their own professional negligence, including the negligence of their staff. The respective Deeds with the fourth defendant allowed them to divest themselves of the responsibility and liability for maintaining premises, staff, equipment and administration services, whilst still providing professional services. 79Having regard to the objective circumstances under which the relevant Deeds were executed, a reasonable person in the position of the second and third defendants would have understood the respective clauses to require each of them to indemnify the fourth defendant for liability arising out of their acts or omissions in the course of carrying out their duties as doctors within the medical practice, in the event that the fourth defendant, as the owner of the medical practice, was sued by a patient for injuries arising out of treatment provided by either of them. That construction emerges from the italicised words in the clauses set out above, namely that the indemnity was in respect of liability arising from the doctor's acts or omissions. 80The construction promoted by the fourth defendant requires the second and third defendants to indemnify the fourth defendant, not only for negligent acts or omissions on the part of each of them, but also in respect of negligent acts or omissions on the part of the fourth defendant. Such an additional burden of liability on Dr Gross and Dr Johnson makes no commercial sense, particularly in the context of each of them seeking to effectively reduce their exposure to professional costs : Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407. 81Accordingly, there is no indemnity that operates to defeat the Amended First Cross Claim.

Contribution by the Fourth Defendant. 82Section 5(2) of the Law Reform (Miscellaneous Provisions) Act states :- In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity. 83According to James Hardie & Co Pty Ltd v Roberts [1999] NSWCA 314: 47 NSWLR 425 , this exercise requires a comparative examination of culpability on the part of each negligent party . Senior counsel for the second and third defendants accepted that his clients bore the bulk of the responsibility for the harm suffered by the plaintiff. In the light of the conduct of both of them, that submission is well founded. Dr Gross' departure from the standard of care required of a doctor consulted by a patient with respect to outstanding pathology results was considerable. Dr Johnson's negligence was of a lesser order, although his conduct contributed to the unacceptable delay in contacting LB. 84The terms of the Consent Order disclose that the second and third defendants were jointly liable to the plaintiff for payment of the agreed amount. There is no evidence before me of any apportionment. 85The culpability of the fourth defendant was, in my view, no less than, and arguably greater than, that of Dr Johnson. It is not necessary to do more than emphasise the importance of maintaining accurate and current records in the provision of health services, a responsibility which the fourth defendant took upon itself. This case demonstrates the serious consequences of the failure to carry out that responsibility. The policy considerations underlying liability in this case warrant a contribution from the fourth defendant of 40% of the damages paid to the plaintiff.

A Further Claim by the Fourth Defendant Alleging Breach of Contract 86For the above reasons, I made orders on 20 May 2011 entering judgment for the second and third defendants on the Amended First Cross Claim against the fourth defendant and dismissing the fourth defendant's Amended Second Cross Claim. The quantum of the contribution and the issue of costs were stood over to 2 June 2011. 87On that day, the fourth defendant sought leave to re-open in order to persuade the Court to deal with a breach of contract claim. That claim, whilst pleaded in the Amended Second Cross Claim as against the second and third defendants, was not fully addressed at the time of hearing. Accordingly, leave to re-open was granted and further submissions were made by the fourth defendant in support of that claim, and by the second and third defendants in reply. 88The fourth defendant presses its claim for damages for breach of contract as against each of the second and third defendants on the basis that, if successful, the amount of the damages equals the amount it would be required to pay by way of contribution for its negligence and any costs. 89The position with respect to Dr Gross is somewhat complicated by the existence of the service agreement of 18 October 2001 between the fourth defendant and Dr Gross' service company, Colin Gross Pty Ltd (the IMP) (Ex C8), and the performance guarantee (Ex C7). 90The former agreement contains the following clauses :- 5.5 As part of the maintenance of the [fourth defendant's] business, the IMP must record, in the manner and at the time required by the regulations under the [Medical Practice] Act, on each patient record all information, particulars and details required to be recorded by those regulations, and otherwise so that the record includes sufficient information concerning the patient's case to allow another registered medical practitioner to continue management of the patient's case. 7.3 The IMP must comply with the [Medical Practice Act 1992] and all other legislation which relates to the rendering of medical services and must comply with the customs and standards of conduct becoming practitioners registered under the Act. In connection with rendering or initiating of each medical service the conduct of the IMP must be acceptable to the general body of general practitioners in Australia. 7.4 In furtherance of the preceding clauses, the IMP must procure the [second defendant] to pursue appropriate continuing medical education, ......., maintain a high standard of record-keeping (as to which see clause 5.5) and otherwise conduct himself in a way which ethically and professionally enhances the quality and image of the services provided at the premises. 10.1 The IMP must procure that the [second defendant] complies with such of the terms of this Deed as will enable the IMP to meet its obligations under this Deed. 10.2 The IMP must procure that the [second defendant] complies with clauses .......... 5.5, ...., 7.3, ........ as if each of those obligations had been a binding contractual obligation between the [fourth defendant] and the [second defendant]. 91The fourth defendant's argument is that, following upon the admission by Dr Gross that his conduct, outlined at [15], was negligent, and the findings made with respect to his liability at [83] above, there was a breach of clause 7.3 of the agreement (Ex C8), in that the IMP did not comply with legislation relating to the rendering of medical services, specifically the Public Health Act 1991 and its regulations, in circumstances where clauses 10.1 and 10.2 required the IMP to bring about Dr Gross' compliance with all the obligations owed by the IMP under the agreement with the fourth defendant. 92There is no doubt that the IMP has breached clauses 7.3,10.1 and 10.2 set out above at [90]. The fourth defendant stresses that there is no service agreement between it and the second defendant, for reasons which are critical to the resolution of the further submissions in response to the breach of contract claim. Dr Gross is, however, also in breach of the agreement between himself and the fourth defendant (Ex C7) on the basis that the IMP failed to carry out its obligations under the performance agreement. 93The breach claimed against Dr Johnson is said to arise directly out of breaches of clauses 5.5 and 7.3 of the service agreement between him and the fourth defendant (Ex C13). Those clauses are in the same terms as the corresponding clauses in [90] above. The fourth defendant relies upon the findings made at [70], [71] and [72]. 94It is accepted that Dr Johnson's conduct underpinning those findings constitutes breaches of clauses 5.5 and 7.3 of Ex C13. 95The fourth defendant's claim that the damages for breach of contract represent the whole amount it would be required to pay to the plaintiff by way of contribution, plus costs, relies upon the following authorities; Florida Hotels Pty Ltd v Mayo [1965] HCA 26; 113 CLR 588; Oxley County Council v Macdonald [1999] NSWCA 126; Redken Laboratories (Australia) Pty Ltd v Docker [2000] NSWCA 100; Climax Management v Scansash [2002] NSWCA 167. 96The second and third defendants accept the proposition that, where two tortfeasors are entitled to recover contribution from each other in respect of damage suffered as a result of the other's tort, and where that damage was caused by breach of a contractual duty owed by one tortfeasor to the other, the tortfeasor to whom the contractual duty was owed is entitled to recover from the other the amount it was ordered to contribute to the plaintiff's damages and costs: Oxley County Council v Macdonald at [61]. 97However, the second and third defendants point to the terms of clause 7.1 in the agreements and to the Court's interpretation of that clause in the context of the commercial arrangement existing between the parties. It is submitted that the proper construction of the agreements evinces an intention by the parties that liability for acts or omissions occasioning loss to others would be borne by the party responsible for that loss, unless both parties were jointly liable, in which case the loss would be apportioned. 98More particularly, the second and third defendants rely upon a passage in the majority judgment in Astley v Austrust Ltd [1999] HCA 6; (1999) 197 CLR 1, appearing under the heading "policy considerations", cited at length in Oxley County Council at [65] :- 85. In contract, the plaintiff gives consideration, often very substantial consideration, for the defendant's promise to take reasonable care. The terms of the contract allocate responsibility for the risks of the parties' enterprise including the risk that the damage suffered by one party may arise partly from the failure of that party to take reasonable care for the safety of that person's property or person. Ordinarily, that risk is borne by the party whose breach of contract is causally connected to the damage. Rarely do contracts apportion responsibility for damage on the basis of the respective fault of the parties. Commercial people in particular prefer the certainty of fixed rules to the vagueness of concepts such as "just and equitable". That is why it is commonplace for contracts to contain provisions regulating liability for breach of a duty to take reasonable care, whether by excluding liability altogether or limiting it in some other way. 86. Absent some contractual stipulation to the contrary , there is no reason of justice or sound legal policy which should prevent the plaintiff in a case such as the present recovering for all the damage that is causally connected to the defendant's breach even if the plaintiff's conduct has contributed to the damage which he or she has suffered. By its own voluntary act, the defendant has accepted an obligation to take reasonable care and, subject to remoteness rules, to pay damages for any loss or damage flowing from a breach of that obligation. If the defendant wishes to reduce its liability in a situation where the plaintiff's own conduct contributes to the damage suffered, it is open to the defendant to make a bargain with the plaintiff to achieve that end . ........................................................................ 87. In an action in tort, however, the duty of the defendant to take reasonable care and the obligation of the plaintiff to take reasonable care for his or her own safety or interests are imposed on the parties by law. Absent a contractual stipulation varying the rights of the parties , it is the general law that defines their rights and liabilities. ............................... (italics not in original) 99The contention is that the doctors in this case have, by the terms of clause 7.1 in the agreements, limited their liability for breach of the agreements to the loss or damage for which they are each responsible. However, clause 7.1 does not address the question of damages payable to the fourth defendant for breach of the agreement by the doctors. It is directed to ensuring that the fourth defendant is not made liable for the acts or omissions of the doctors that occasion loss or damage to a third party. 100The findings made at [73] to [80] above as to the construction of the indemnity clauses in the respective agreements reflect the fact that the clauses do no more than regulate the doctors' liability for their own negligence. The respective clauses appear under the heading "Insurance and Ethics" and are to be read with clause 7.2, which requires the doctors to remain insured at their own cost. There is nothing in the agreements that deals explicitly with the fourth defendant's liability in negligence. That falls to be determined by the application of general legal principles. 101In that respect, clause 7.1 is consistent with the construction placed upon an indemnity clause in Volman t/a Volman Engineering v Lobb & Anor. ; Mobil Oil Australia Pty Ltd v Lobb & Anor [2005] NSWCA 348. The same claim for breach of contractual duties was made in Volman , although the Court of Appeal determined that no relevant breaches had occurred. 102Contrary to the submissions of the second and third defendants, clause 7.1 provides no basis for denying the fourth defendant's claim for damages for breach of the agreements. 103In the alternative, the second and third defendants claim that the fourth defendant has breached the agreement with each of them and that those breaches have caused or contributed to the plaintiff's loss, thereby entitling the doctors to recover damages from the fourth defendant in the same amount as the fourth defendant now seeks from them. It is then said that the application of the principle of circuity of action provides a complete defence to the fourth defendant's claim under the agreements. 104At paragraphs 40 and 42 of the Amended First Cross-Claim, the second and third defendants plead a breach of clauses 3.1 and 3.2 of the agreements between each of them and the fourth defendant. Clause 3.1 provides that the fourth defendant "must, at its cost and expense, provide, supply and maintain to and for [the doctor], and such other persons as may at any time practise medicine and provide paramedical services from the premises, such administrative services, clerical staff, facilities, plant and equipment as are in the opinion of the [fourth defendant] necessary for [the doctor] to conduct its ..... medical practice from the premises." Clause 3.2 of the agreements sets out a number of specific inclusive services and facilities. 105In addition, at paragraphs 41 and 42 of the Amended First Cross-Claim, the second and third defendants plead a breach of an implied term of the agreements, namely that :- The [fourth defendant would] provide trained competent clerical and administrative staff and services that would include : (i) a procedure, documented or otherwise, and followed by staff for updating and checking address and phone contact details for every patient on presentation to the centre, and (ii) a procedure, documented or otherwise, and followed by staff by which patients are made aware within a reasonable timeframe of abnormal test results and the need to present to the practice to discuss them, and (iii) a procedure, documented or otherwise, and followed by staff for notice and attention to the follow-up of patients who have not re-presented within a reasonable period to discuss results as requested. 106The fourth defendant maintains that clause 3.1 is no more than advisory. However, the obligation upon the fourth defendant to maintain such administrative services as are, in the opinion of the fourth defendant, necessary for the doctor to conduct a medical practice from the premises, necessarily imports a qualitative assessment of those administrative services. It could not, in my view, be regarded as otherwise than reasonable and necessary for the proper conduct of a medical practice that the content and quality of the administrative services provided by the fourth defendant ensure the accuracy and currency of patient records. 107The matters outlined at [31] to [36] above reinforce the conclusion I have reached that the fourth defendant breached clause 3.1 in each of the agreements. I also accept the submission that the fourth defendant has breached an implied term in the agreements to the effect set out at [105] above. 108The fourth defendant maintains that the essential preconditions for the existence of an implied term are lacking in the present case. According to t he test stated by the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3, and adopted by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337 at 347, a term may be implied if : (1) It is reasonable and equitable; (2) It is necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) It is so obvious that 'it goes without saying'; (4) It is capable of clear expression; (5) It does not contradict any express term of the contract. 109These criteria are satisfied. Having regard to the matters referred to at [29] to [41] above, the existence and observance of appropriate procedures that are critical to the discharge of a doctor's obligations under the Public Health Act are reasonable for, and necessary to, the effective performance of the agreement by the parties. Such a term is capable of clear expression, and was clearly reflected in the fourth defendant's manuals. Such a term does not contradict any express term of the agreements, including clause 13, which provides that "no change or addition to the terms of the Deed" can be made unless agreed between the parties in writing. 110Nor do I regard the damages flowing from the breach by the fourth defendant as too remote. It is not unreasonable to conclude that it would have been in the contemplation of the parties at the time that the agreements were entered that a failure to maintain adequate patient records and to observe the fourth defendant's record-keeping procedures would give rise to a risk of injury to a patient of the practice. 111It follows that the third defendant, Dr Johnson, is entitled to damages from the fourth defendant for breach of the agreement. It is pertinent to note once again that there is no evidence before me of the sum Dr Johnson paid in contribution towards the damages paid to the plaintiff. This lacuna in the evidence has important consequences, as the following demonstrates. 112The breach relied upon by the second defendant, Dr Gross, is in fact a breach of the agreement between Dr Gross' company vehicle (the IMP) and the fourth defendant. This assumes some importance for the purposes of the fourth defendant's argument in response to the asserted application of the principle of circuity of action and for the purposes of any alleged breach of the agreement by the fourth defendant. In relation to circuity of action, the fourth defendant submits that, in the absence of the IMP as a party to these proceedings, it is not open to the second defendant to rely that principle. Were this the only hurdle to the application of the principle, I would reject the fourth defendant's argument in this respect. 113It is clear that there only need be a proposed action against the fourth defendant, assuming that the principle otherwise applies. In The Eastern Extension, Australasia and China Telegraph Co. Ltd v Federal Commissioner of Taxation [1923] HCA 62; (1923-24) 33 CLR 426, Isaacs and Rich JJ referred with approval to Lord Denman C.J. in Walmsley v Cooper (1839) 11 A. & E., at pp. 221-222, where the latter speaks of the "principle ... of avoiding circuity of action, i.e., the scandal and absurdity of allowing A to recover against B, in one action, the identical sum which B has a right to recover in another against A . The law, when it clearly detects the possibility of such a waste of the suitor's money and its own process, as well as of the public time, will interpose to prevent its happening." (italics not in original) 114To the extent that the principle requires that the parties must sue each other in the same right (see McCamley v Harris [1997] NSWSC 360), I would not regard a proposed action by the IMP against the fourth defendant as necessarily outside the scope of the principle. The IMP is a vehicle through which the second defendant conducts his practice. The former is, for practical purposes, identical with the latter. 115It is critical to the application of the principle of circuity of action that precisely the same amount of damages would be awarded in each of the second and third defendants' proposed action as in the fourth defendant's action. The authorities make clear that the measure of damages must be "precisely the same" : Imperial Furniture Pty Ltd v Automatic Fire Sprinklers Pty Ltd (1967) 1 NSWLR 29 at 41. In the light of the apportionment that has been determined at [85] above, it is only possible to conclude that the fourth defendant's damages for the breach of the agreement represent 40% of the sum paid to the plaintiff, plus costs, whereas the combined damages available to the second and third defendants for the breach of the agreement represent 60% of the sum paid to the plaintiff, plus costs. 116Accordingly, there is no evidentiary basis upon which I could determine that the principle applies in the case of either the second or third defendant. 117Finally, and in the alternative, the second and third defendants submit that they are entitled to equitable contribution from the fourth defendant. Whilst the fourth defendant maintains that such a claim was not pleaded, paragraph 45 in the amended first cross claim refers to "contribution", whilst paragraph 46 refers to "contribution pursuant to section 5 of the Law Reform (Miscellaneous Provisions) Act 1946." 118Accepting for present purposes that equitable contribution was pleaded, I am not persuaded that the principle applies in the circumstances of this case. 119In Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282, Gaudron A-CJ and Hayne J. said :- In general terms, the principle of equitable contribution requires that those who are jointly or severally liable in respect of the same loss or damage should contribute to the compensation payable in respect of that loss or damage, either equally where they are liable in the same amount or proportionately, where the amount of their liability differs. .................................. The doctrine ..... is usually expressed in terms requiring contribution between parties who share "coordinate liabilities" or a "common obligation" to "make good the one loss". ......... The notion of "coordinate liability" is one that depends on common interest and common burden. Perhaps because, at common law, there was no general right of contribution between tortfeasors, the notion of coordinate liability has not traditionally been expressed in terms requiring equal or comparable culpability or a requirement that the acts or omissions of the persons in question be of equal or comparable causal significance to the loss in respect of which contribution is sought. However, the requirement that liability be "of the same nature and to the same extent" ... is apt to include notions of equal or comparable culpability and equal or comparable causal significance. [14] to [16] ; (at 292 - 293) 120In the same case, McHugh J. said :- In determining whether there is "a common obligation", the traditional test is whether the liability of each party "is of the same nature and to the same extent". [38] ; (at 299) In Scholefield Goodman and Sons Ltd v Zyngier , for example, the Privy Council held that there was no room for the application of the doctrine unless the person from whom contribution is claimed has placed himself on the same level of liability as that on which the claimant for contribution stands. Thus contribution will not lie simply because the respective liabilities of parties arise out of similar relationships or related transactions. Similarly, the doctrine will not apply if the obligations in question are merely owed to the same party or are "otherwise connected in time or circumstance". .... [43] [44] ; (at 301) 121It is not the case that the fourth defendant is on the same level of liability as the second and third defendants or that, as between the second and third defendants on the one hand and the fourth defendant on the other, there is "equal or comparable culpability and equal or comparable causal significance". Senior counsel for the second and third defendants acknowledged in the course of submissions on the apportionment issue that his clients bore the greater burden of liability towards the plaintiff. Moreover, as a matter of practical reality, the liability of the fourth defendant for its negligent acts or omissions towards the patients of the practice would generally be of a lesser order than the liability of the doctors for their negligent acts or omissions towards those patients. 122The second and third defendants have succeeded in their Cross Claim to the extent that the fourth defendant is liable as a joint tortfeasor and to the extent that the fourth defendant breached the service agreement with the second defendant's company and with the third defendant. However, there can be no recovery by the second defendant personally in these proceedings as to damages arising out of the breach of the service agreement. The fourth defendant has succeeded in its Cross Claim against the second and third defendants to the extent that the second defendant's company and the third defendant breached their respective service agreements with the fourth defendant. The effect of the performance guarantee between the second defendant and the fourth defendant is to make the second defendant liable for damages arising out of that breach. 123The result of these findings is that the breach of contract claims by the third defendant and the fourth defendant, against each other, cancel out, leaving the third defendant's successful claim for contribution against the fourth defendant. Whilst the second defendant was successful in his claim for contribution against the fourth defendant, that claim is met by the fourth defendant's successful claim against the second defendant pursuant to the performance guarantee. 124I vacate the orders made on 20 May 2011. I make the following orders :- 1)Verdict and judgment for the third defendant on the Amended First Cross Claim against the fourth defendant by way of contribution in the amount of $188,400:00 2)The fourth defendant to pay pre-judgment interest to be calculated pursuant to s 100 of the Civil Procedure Act on the judgment sum. 3)The fourth defendant to pay the third defendant's costs of the Amended First Cross Claim in relation to the claim for contribution on a party/party basis up to 14 January 2010 and thereafter on an indemnity basis. 4)Verdict for the second defendant on the Amended First Cross Claim against the fourth defendant in relation to the claim for contribution. 5)Verdict for the second and third defendants on the Amended First Cross Claim against the fourth defendant in relation to the breach of contract claim. 6)Verdict for the fourth defendant on the Amended Second Cross Claim against the second and third defendants in relation to the breach of contract claim. 7)The second defendant to pay the fourth defendant's costs on the Amended Second Cross Claim in relation to the breach of contract claim on a party/party basis. 8)The Stay of the Judgment in favour of the fourth defendant against the plaintiff is discharged. 9)Otherwise, no order as to costs.

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. Decision last updated: 18 October 2011

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