1 MASON P: I have had the benefit of reading the reasons of Sheller JA. I agree with them and with the orders proposed.
2 When the respondents communicated their intentions to sever links with Health Services for Men they used the language of withdrawing or terminating their services. This did not prove that they had been employees, but it reflected the relationship between the medical practitioners and the organisation of which they were an integral part.
3 Another integral part was the system for creating, maintaining, storing and accessing patient records. As Sheller JA demonstrates, these records included manilla files in which pro forma documents relating to the patient were kept. Ready and continuing access to these files was vital in the interests of patient, doctors and administrative staff. The common intention evidenced by common practice was that ownership of the files would commence with and remain with those who were in control of the whole organisation, ie the appellants. Any other system would be a recipe for chaos or destructive self interest.
4 A large enterprise such as this is not unlike a hospital. A proper record-keeping system is vital. In Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542 Hope JA said (at 549):
Any significant organisation in our society must depend for its efficient carrying on upon proper records made by persons who have no interest other than to record as accurately as possible matters relating to the business with which they are concerned. In the every day carrying on of the activities of the business, people would look to, and depend upon, those records, and use them on the basis that they are most probably accurate. … If, for some reason, a new honorary had to take over the case, it is to the records that he would go to find out what had happened or what he had to do. …When what is recorded is the activity of a business in relation to a particular person amongst thousands of persons, the records are likely to be a far more reliable source of truth than memory. They are often the only source of truth.
5 A similar point was made in a different context in Esso Australia Resources Ltd v Commissioner of Taxation [1999] HCA 67, 74 ALJR 339 where Callinan J said (at [162]):
The employees of natural persons, partners, officials in bureaucracies and employees and directors of corporations may, and often must, out of practical necessity communicate internally by written report. A corporation "cannot … think or write or act except by certain machinery which is, so to speak, extraneous of itself".
6 The respondents' invocation of their patients' rights to care and confidentiality was a hollow invocation of a jus tertii. The appellants have corresponding duties of care and confidentiality, whether or not particular doctors remain with their organisation. In any event, it is difficult to conceive how the standard of care which the respondents would give to patients that followed them into their new practices would be affected by non-access to the material recorded in the appellants' files. These concerns do not appear to have been the trigger for the unilateral, stealthy removal of patient files en masse. And they provide no justification for a passing of property in records from the appellants to the respondents.
7 Equally hollow is the submission that denial of the property right claimed by the respondents constitutes a form of conscription to medical servitude incompatible with their independent judgment as medical practitioners. The submission carries echoes of long-exploded arguments (cf Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561). And it carries no conviction in the present context. A doctor employed by a school, a shipping company, a hospital or an insurance company would be surprised by the suggestion, as would a locum tenens in a private practice. Each would see no incompatibility between obligations as a medical practitioner and the duty to act in good faith towards and to recognise the property rights of an organisation such as that run by the appellants.
8 The passages in Breen v Williams (1996) 186 CLR 71 recognising that a professional person may have property in certain documents prepared in the performance of professional duties address the position as between the professional and the lay patient or client. They have nothing to say about ownership as between groups of professionals (eg partners inter se or an employer and employee) or as between a corporation employing or engaging the services of professionals.
9 Once the appellants' property in the records is established there could be no basis for requiring the appellants to make copies of those records available to the persons who have gone out on their own, apparently with a view to competing with the appellants' business.
10 In my view this case is resolved by the application of property principles to the facts. At various stages each side argued in favour of an implied contractual term. Suffice it to say that the implied term invoked by the respondents would amount to a term permitting the taking of property. To say the least, such a term lacks obviousness.
11 PRIESTLEY JA: I agree with Mason P and Sheller JA.
12 SHELLER JA:
INTRODUCTION
Under a contract with the appellants who were owners of clinics for the medical treatment of male patients, the respondent doctors examined patients in the clinics and made examination notes on a form provided by the appellants. This appeal concerns the property, if any, the respondents had in their examination notes. The outcome depends upon the nature of the services the appellants offered to patients and the part the doctors played in providing those services.
13 Until 9 August 1999 the respondent doctors, Dr Oscar D'Souza, Dr Paul Condoleon and Dr Mirwais Wadan, carried on medical practice in clinics owned and operated by the appellants, Health Services for Men Pty Limited, Asire Pty Limited, Medical Admin Services Pty Limited and Medical Integrated Services Pty Limited. The appellants began to operate the clinics in March 1998. The clinics carried out treatment of sexual dysfunction in male patients and were conducted under the name "Health Services for Men". The appellants were successors in business to a company called Australian Men's Health Pty Limited which had bought the clinics from On Clinic Pty Limited in 1996.
14 The respondent doctors were not the only medical practitioners to work in the clinics. Until 9 August 1999, ten different medical practitioners worked in the appellants' twenty-one clinics which were widely distributed around Australia.
15 Each of the three respondent doctors had made a written agreement with the first appellant. The agreement was in a standard form headed "Short Form Agreement". By it, each of the doctors authorised the first appellant to deposit all his consultation, consumables and medication receipts into the HSM Doctors Fees Holding Account (the trust account), and to manage on his behalf these funds. Each doctor also consented to payments being made out of the trust account directly to various service companies. There were no other written arrangements between the doctors and the appellants.
16 The clinics were conducted from premises leased and staffed by one or other of the appellants, which decided when and where to establish or whether to close or to move a clinic and made all arrangements to do so. Patients at the clinics were given a variety of treatments for sexual dysfunction. In many cases, erectile dysfunction was treated by self-injection therapy. A patient using self-injection therapy needed and received medical advice relating to the suitability of the therapy and the quantity of medication required. The patient also received medical supplies such as an auto-injector, medication and a self-injection video. The appellants advertised extensively, particularly in metropolitan Sunday newspapers. They were said to spend approximately $30,000 per week on advertising. They solicited business from the public by way of a 1300 telephone number which was shown prominently in the advertisements. Business was largely generated by the newspaper advertisements, but there were also repeat consultations from established patients, and consultations initiated when patients established contact with particular doctors in other ways.
17 The appellants' staff prepared rosters setting out which clinic each doctor was to attend and the times of attendance. Sometimes the roster set out arrangements for a particular doctor to travel interstate or otherwise to attend clinics requiring lengthy journeys. Roster arrangements were made co-operatively between the appellants' staff and particular doctors, and doctors were not required to attend the clinics except in accordance with their own wishes and convenience; they were not under discipline. On the other hand, they had an interest in contributing to the successful operation of the clinics.
18 Dr D'Souza usually attended at clinics in and near Melbourne, Dr Condoleon at clinics in Melbourne and Southport and Dr Wadan at a clinic conducted at one time at Edgecliff and later at Bondi Junction. Each of them had at times attended elsewhere, though not while the appellants were operating the clinics.
19 In New South Wales, fees for the doctors' attendance were bulk-billed. A claim was made to Medicare in the name of the doctor with the patient's authority for a payment to the doctor. The Short Form Agreement recognised that the fees were the medical practitioner's fees. When received, fees were paid into the trust account as authorised by the Short Form Agreement. In other States, the appellants directly charged the patients for consultation and the fees received were paid to the trust account.
20 Patients paid the appellants directly for prescribed medication and equipment. Those payments were also paid into the trust account. Arrangements between the appellants and each doctor established the proportion of the money received into the trust account to be paid out to the appellants and to the medical practitioners. Proportions varied and were related to the number of consultations which the doctor conducted. Typically, about 78 per cent went to the first appellant and 22 per cent to the medical practitioners. Fees for consultations gave rise to about 15 per cent of the appellants' total income. The sale of medication and equipment gave rise to about 85 per cent.
21 In the clinics, there were medical records for about 300,000 patients. Many of these were related to patients who had not attended for some years and not while the appellants conducted them. Mr Meehan, a non-executive officer of the first appellant who made an affidavit on the appellants' behalf, estimated that approximately 100,000 files were active.
22 Typically a file consisted of:
(a) a manilla folder bearing the patient's name;
(b) slips recording particulars of the dates of attendance and materials supplied which were stapled to the folder;
(c) a two page examination sheet on a standard form containing an array of social and medical information which was completed in handwriting by the medical practitioner. When completed, the sheets constituted a comprehensive relevant medical history and recorded treatment prescribed and matters observed on examination;
(d) an informed consent form relating to the self-treatment therapy which was a standard form signed by the patient and directed to the medical practitioner;
(e) a sheet headed "must be completed by the Patient" giving personal particulars and stating whether the patient was on any medication.
The file also contained any pathology report about the patient. This was usually directed to the medical practitioner from a consultant pathologist.
23 On or about 9 August 1999, the respondent Dr D'Souza arranged for the removal, by a courier company which he engaged, of about 5,500 patient files from the appellants. Dr Condoleon similarly arranged for the removal of 12,350 patient files from the appellants. Within a few days the files so removed were returned to the control of the appellants under interlocutory orders.