Hospitals and Health Services Act 1927

Dunstan v Simmie & Co Pty Ltd [1978] VicRp 62; [1978] VR 669

Franklin v Minister of Town and Country Planning [1947] UKHL 3; [1948] AC 87

Kaycliff v ABT (1989) 90 ALR 310

Preston v Carmody [1993] FCA 377; (1993) 44 FCR 1

R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546

Republic of Bolivia v National Bolivian Navigation Co (1876) 24 WR 361

Rocklea Spinning Mills Pty Ltd v Anti-Dumping Authority [1995] FCA 1188; (1995) 56 FCR 406

Rogers v Baillieu Bullock (1981) 28 SASR 597

S C Taverner & Co Ltd v Glamorgan County Council (1940) 57 TLR 243

Stirling Marine Services Pty Ltd v Austral Piling & Constructions Pty Ltd, unreported; SCt of WA (Master Sanderson); Library No 970620; 21 November 1997

Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568

Wilsmore v Court [1983] WAR 190

1 MASTER SANDERSON: This is the defendant's application seeking an order that there be trial of preliminary issues. The application is brought under O 31 r 2(1) which is in the following terms:

"If it appear to the Court that there is in any cause or matter a question of law, which it would be convenient to have decided before any evidence is given or any questions or issue of fact is tried, or before any reference is made to a referee or arbitrator, the Court may make an order accordingly, and may direct such question of law to be raised for the opinion of the Court, either by special case or in such other manner as the Court may deem expedient."

2 Before dealing with the preliminary questions as formulated by the plaintiff, I should say something about the nature of this action. It is pleaded the plaintiff is and was at all material times a university academic and a medical practitioner specialising in gastroenterology. The defendant is the controlling body of Sir Charles Gairdner Hospital under the provisions of the Hospitals and Health Services Act 1927. Sir Charles Gairdner Hospital is what is known as a "teaching hospital". These matters are pleaded in par 1 through to par 4 of the statement of claim.

3 Paragraph 5 of the statement of claim pleads that by agreement made in or about January 1974 the plaintiff was employed by the University of Western Australia as a senior lecturer in medicine. He was employed under certain terms and conditions. In March 1991 he was appointed a professor in the Faculty of Medicine, again, on certain terms and conditions. Paragraph 7 of the statement of claim expands upon those terms and conditions. Paragraph 8 pleads that the defendant knew of the terms and conditions. Paragraph 9 pleads that, either pursuant to agreement between the plaintiff and the defendant or related to the employment agreement between the plaintiff and the University of Western Australia, certain clinical privileges were conferred upon the plaintiff which allowed him to practise in his field of speciality within Sir Charles Gairdner Hospital. Paragraph 10 pleads that in August 1997 these "clinical privileges" were withdrawn by the defendant, at least in part, and par 11 pleads that the privileges have not been reinstated. By par 12 it is pleaded that as a consequence of the removal of the clinical privileges the plaintiff has suffered loss and damage.

4 By par 13 it is pleaded that the plaintiff was entitled to procedural fairness in relation to withdrawal of his clinical privileges. Paragraph 14 pleads that this procedural fairness was not accorded to the plaintiff. Paragraph 15 pleads, as an alternative to par 13 and par 14, bias on the part of the defendant through its agent the Chief Executive Officer of the Sir Charles Gairdner Hospital. There is a further plea in par 16, as an alternative to par 14 and par 15, of a lack of procedural fairness based upon the Chief Executive Officer participating in the decision making. Paragraph 17 pleads the plaintiff is ready willing and able to perform his obligations under the employment agreement.

5 It can be seen then that the claim really raises two questions. First, was the plaintiff entitled to procedural fairness in relation to the withdrawal of his consultancy rights and, if so, was he accorded such procedural fairness? Secondly, given the circumstances in which the decision was made to withdraw the plaintiff's clinical privileges, was there a reasonable apprehension of bias on the part of the decision makers?

6 On the first of these issues it is clearly a mixed question of fact and law. First, it is necessary to establish the basis upon which the plaintiff was employed by the University and the nature of his relationship with the defendant. That is not an altogether easy question. The plaintiff pleads that he was employed by the University of Western Australia, first as a senior lecturer and subsequently as a professor. He did not have any direct employment relationship with the defendant. The provision of clinical privileges is said to arise either by way of custom and practice or by agreement between the defendant and the University of Western Australia. In its defence, the defendant does not admit the nature of the agreement between the plaintiff and the defendant. In other words, the precise status of the plaintiff's clinical privileges is a matter in dispute. That is a question of fact which will have to be determined at trial. Once the facts are established, the trial Judge will then have to determine whether or not in the light of the fact situation the plaintiff was entitled to procedural fairness.

7 By par 7 of its defence, the defendant denies that it withdrew the plaintiff's clinical privileges and by par 8 of the defence it says that it accorded the plaintiff procedural fairness. Clearly, both these matters are questions of fact to be determined at trial. By par 9 of the defence the plaintiff says that the law relating to procedural fairness did not require the defendant to do those things which it is alleged they failed to do in par 14(b) of the statement of claim. In other words, the defendant denies that the plaintiff has, in the circumstances of this case, any right to procedural fairness as set out in the statement of claim.

8 In relation to the claim of bias, the defendant says, first, that the law relating to procedural fairness in respect of the rule against interest and apprehended bias has no application to decisions made by the defendant or the Chief Executive Officer in relation to clinical privileges (par 10). Alternatively, it is said that the plaintiff has waived any right to claim bias. Essentially, the same arguments are put in relation to the third alternative claim found in par 16 of the statement of claim.

9 It is against that background that the defendant seeks to have trial of two preliminary questions. The questions are as follows:

"(1) Whether the rules of natural justice in respect of the rule against interest, apprehended bias and actual bias ('bias') have any application to the decisions of the Defendant and its servants and agents, in particular a decision of the Chief Executive Officer of Sir Charles Gairdner Hospital ('the CEO') in respect of the Plaintiff's clinical privileges.

(2) If the answer to Preliminary Question 1 is yes : Whether the failure of the Plaintiff to raise an objection to the making of a decision on grounds of bias, prior to the making of that decision, constituted waiver of the right to object to the making of that decision on the grounds of bias."

10 It will be seen at once that these two preliminary questions have nothing to do with the first issue between the parties - they have nothing to do with the question of whether or not the plaintiff was entitled to procedural fairness and whether or not procedural fairness was accorded him. As a consequence, whatever determination is made in relation to the preliminary questions the defendant seeks to have answered, the plaintiff will be left with a cause of action. As part of that cause of action the court will need to determine the nature of the relationship between the plaintiff and the defendant with respect to the clinical privileges.

11 In my view, it will also be necessary for the court to determine the nature of the relationship between the plaintiff and the defendant before the proposed Question 1 could be answered. It might be possible to conceive of a situation where the defendant conceded, for the purposes of determining the preliminary question, that the relationship was as set out in the plaintiff's statement of claim. Clearly, that is the plaintiff's best position and if the rules of natural justice have no application in those circumstances then that must be the end of the matter. But the question is not framed in that way. Even if it was, I have some difficulty seeing that in a case such as this there would be much to be gained by either party in having the questions answered as a preliminary issue. At trial, the most time consuming issue will be the nature of the relationship between the parties. Once that is established there will no doubt be some evidence as to whether the plaintiff's clinical privileges were withdrawn and if so in what circumstances. But that seems to be a relatively straight forward question. In my view, hiving off preliminary questions in the circumstances of this case is unlikely to offer much saving either in time or cost.

12 The principles applicable to deciding whether trial of a preliminary issue should be ordered were considered by Malcolm CJ in Smith v Maloney (1998) 19 WAR 209. His Honour said (at 223):

"The power to order the trial of a preliminary issue of fact will generally only be appropriate where its outcome will put an end to the action, or where there is a clear line of demarcation between the issues and the determination of one issue in isolation from the others is likely to save inconvenience and expense ... It has also been held that the separate trial of issues is only appropriate in clear and simple cases where a single question could be isolated from other questions in the proceedings and its decision may finally determine the proceedings as a whole or where facts can be agreed and the sole question is one of law: see Alan v Gulf War Refining Ltd [1980] UKHL 9; [1981] AC 1001. It has been commented that it is a procedure which frequently adds to the difficulties of courts of appeal and tends to increase the cost and time of legal proceedings and is not an appropriate procedure when the findings of fact could only be made after trial: see Tilling v Whiteman [1980] AC 1. It should be noted that all of these cases were decided before the advent of case management, which commenced in the civil jurisdiction on a pilot basis in this Court in 1990 and which has been in full operation since 1 November 1996. Experience has shown that the existence of a significant possibility that the determination of one or more issues tried separately may lead to a settlement is a practical consideration which should be taken into account."

13 In this case there is no reasonable prospect that determination of the questions proposed by the defendant will lead to a settlement of the proceedings. Of course, such a conclusion is always a question of judgment but neither counsel suggested that settlement was likely in any circumstances. Furthermore, as I can see little likely saving either in time or expense caseflow management principles do not suggest trial of separate issues should be ordered.

14 In my view, this is a clear case where the nature of the relationship between the plaintiff and the defendant must first be determined before any other matters can be resolved. It would be in the interests of all parties if this was done as soon as possible. For that reason I would not order trial of preliminary questions and I would dismiss the defendant's chamber summons.