Rickhuss v The Cosmetic Institute Pty Ltd

Supreme Court of NSW|2021-04-12|Before: Garling J

rris (D16) J Tesarsch (D17) T Mehigan SC / J Williams (D18) P Mann (D19)

Solicitors: Turner Freeman (P) McLachlan Thorpe Partners (D5) Goldman Lawyers (D6) HWL Ebsworth (D7-D15) William Roberts Solicitors (D16) Landers & Rogers (D17) MinterEllison (D18) Sparke Helmore (D19) File Number(s): 2017/279308 Publication restriction: Not applicable

Nature of the Proceedings

There have been a number of previous judgments in these proceedings: see, e.g. Rickhuss v The Cosmetic Institute Pty Ltd [2018] NSWSC 1848; Rickhuss v The Cosmetic Institute Pty Ltd (No.2) [2020] NSWSC 393. The nature of the proceedings which were described in those judgments applied at the time those judgments were given. Since those judgments were given, the proceedings have changed and have evolved. However, the underlying complaints have remained.
It is convenient to describe the general nature of the proceedings and to identify the various parties.
These are proceedings in which damages are claimed by the plaintiffs, and on behalf of group members, being individual patients who had breast augmentation surgery ("BAS") on or before 29 October 2017 at identified premises ("the TCI Premises") and whose surgery was performed by or with the assistance of one or more of 12 doctors ("the TCI Surgeons") in accordance with a standard approach described in the pleadings as the "One Size Fits All Approach".
The 1st to 4th defendants are companies in liquidation which were members of what can conveniently be described as the TCI Group. The 1st defendant is the Cosmetic Institute Pty Ltd. It was the principal corporation in the group. The other corporations were wholly owned subsidiaries of the 1st defendant and operated premises and businesses at Parramatta, Bondi Junction and Southport in Queensland respectively. None of the members of the TCI Group have filed appearances or taken any part in the proceedings. The plaintiffs have leave to proceed against these companies.
The 5th defendant, Dr Eddy Dona, is a registered medical practitioner who, it is alleged, practised as a plastic and reconstructive surgeon. It is alleged that he was a director and the beneficial shareholder of a number of the companies in the Cosmetic Institute group. It is also alleged that he was, at the relevant time, described as the surgical director of the TCI Group. It is pleaded that he devised the method of BAS utilised at the TCI Premises by the TCI Surgeons. It is also alleged that he trained and supervised those surgeons in their performance of BAS.
The 6th to 16th defendants are individually named medical practitioners who carried out BAS at TCI Premises in accordance with the system devised by Dr Dona for the TCI Group. In the pleading there are defined sub-groups where one of the named plaintiffs was operated on by one identified defendant and the sub-groups are constituted by other members of the group who were operated on by that particular doctor.
The remaining three defendants are insurers of either or both the 5th defendant (Dr Dona) or the 1st to 4th defendants (the TCI Group). The insurers have denied their liability to indemnify those parties and, accordingly, are joined to the proceedings by the plaintiffs so that it can be determined whether or not they are liable to indemnify the 1st to 5th defendants in the event that they are found liable to the plaintiffs for damages.
Putting the matter at its simplest, and accepting inaccuracy from any risk of over-simplification, the allegations of the plaintiffs are that the 5th defendant (Dr Dona) was the principal in the TCI Group. The business of the TCI Group was conducted as a franchise from different locations. Its intention was to offer breast augmentation surgery at a price which was significantly less than that offered by specialist plastic and reconstructive surgeons. To achieve the provision of the surgery at the price offered, Dr Dona devised a standard form of surgery, which the TCI Group implemented and the TCI Surgeons participated in, which was to be conducted as day surgery under local anaesthetic or light sedation. The plaintiffs allege that the surgery was conducted at premises which were not adequate for the purpose, there was not the necessary specialist staff in attendance and there was minimal personal pre and post‑surgical consultations. They further allege that the standard BAS procedure carried with it considerable increased risk of complications.
The plaintiffs allege that this franchised business was intended to be widely available and was advertised extensively over various internet websites and social media platforms without reference to any potential complications, and in particular, without reference to what the plaintiffs allege was a significantly increased risk of complications having regard to the way in which the system as a whole was designed, and the surgery was undertaken, when compared with surgery undertaken by specialist plastic and reconstructive surgeons.
The plaintiffs' allegations suggest that the BAS was promoted to women as a way of improving their body image and attractiveness without any complications and for a defined and advertised price.
In essence what the plaintiffs say is that if the truth had been told in the advertising and promotion of the TCI Group and its BAS system, in particular if the complications arising from that approach were made known to individual patients in good time before the surgery, then none of the plaintiffs and none of the group members would have undertaken the surgery.
Accordingly, although not all of the complications occurred with respect to each plaintiff or group member, the plaintiffs nonetheless claim that any complication of the surgery, and any lasting effects which were less than promised, constitute an injury for which they are entitled to be compensated.
In their pleading the plaintiffs defined the complications which they allege arose because of the BAS system employed, and the "One Size Fits All Approach" to the surgery which was employed. They nominate 14 such complications.
The claims of the plaintiffs and group members are made at common law in negligence and also for damages for alleged breaches of various statutory causes of action arising from the Australian Consumer Law ("ACL") which is contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) ("CC Act").

Notice of Motion

On 19 March 2021, the 7th to 15th defendants filed a Notice of Motion seeking orders pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 ("UCPR") that the Second Further Amended Statement of Claim ("FASOC2") be struck out in whole or in identified part.
This Motion was fixed to be heard on 12 April 2021.
Submissions in support of the relief were filed by the 7th to 15th defendants on 19 March 2021. Submissions seeking similar relief were filed by the 5th defendant on 24 March 2021.
On 8 April 2021, the plaintiffs filed a Notice of Motion seeking leave to file and serve a Third Further Amended Statement of Claim ("FASOC3"). In an affidavit of the plaintiffs' solicitor, Ms Sally Gleeson, sworn 8 April 2021, she deposed that on 1 April 2021, in response to issues raised by the 7th to 15th defendants about FASOC2, she had circulated FASOC3 and indicated to the solicitors for all defendants that this was the pleading in respect of which leave would be sought from the Court.
The hearing of the two Notices of Motion commenced on 12 April 2021. All parties agreed that it was convenient for the Court to hear the plaintiff's motion first because if it succeeded then the defendants' Motion became moot.
In the course of oral submissions over a two-day period, it became apparent that the plaintiffs intended to further amend FASOC3 to address some of the arguments with which they were confronted. Accordingly, at the conclusion of the oral submissions, the plaintiff sought leave to serve a proposed Fourth Further Amended Statement of Claim ("FASOC4") and submitted that the Court ought grant leave to the plaintiffs to file that pleading.
Procedural directions were made so that all parties had the opportunity to file and serve any further submissions in writing dealing with FASOC4, and to respond to such submissions. Those steps were complied with.
The effect of these developments since the defendant's Notice of Motion was filed is that this Court is being asked to make orders with respect to FASOC4 as opposed to FASOC2 which was the document specified in the original orders of the defendants' Notice of Motion, or FASOC3 which was the subject of the plaintiffs' Notice of Motion and oral submissions.
This judgment deals only with FASOC4 and does not deal with any earlier version of the pleadings.

Legal Principles

In deciding whether to make an order permitting the amendment of any pleading, the Court is obliged to act in accordance with the dictates of justice: s 58 of the Civil Procedure Act 2005 ("CPA"). As s 58(2) of the CPA shows, there are matters to which a court must have regard, and others to which it may have regard in making that determination.
Because of the way in which the Motion was argued, the issues of principle which are most prominent were those associated with whether FASOC4 was a proper pleading, and whether there were parts of it which, if filed, would be likely to be struck out pursuant to r 14.28 of the UCPR.
The function of pleadings is to state with sufficient clarity the case which must be met by a defendant. Pleadings serve to define the issues for determination and ensure that, as a matter of procedural fairness, a party should have the opportunity to meet a case brought against them: Banque Commercial SA v Akhil Holdings Ltd (1990) 169 CLR 279 at 286, 296, 302-3; [1990] HCA 11.
As well as informing a defendant of the case which they must meet, a pleading must also set out the material facts upon which a plaintiff relies to make good their case with sufficient particularity to enable the eventual trial to be conducted fairly: Gunns Ltd v Marr [2005] VSC 251 at [57] per Bongiorno J.
Whether or not a pleading, particularly in representative proceedings, is at too high a level of generality, and so not permissible, will depend on the circumstances of the particular case and the stage which it has reached. The fundamental question is whether the pleading enables a defendant to adequately understand the case made, and has a fair opportunity to meet that case: Phillip Morris (Australia) Ltd v Nixon [2000] FCA 229; 170 ALR 487 per Sackville J.
Finally, I note the principle which is self-evident, namely that an amendment to a pleading would not be allowed if, had that amendment appeared in the original pleading, it would have been liable to be struck out as being so obviously futile: Horton v Jones (No 2) (1939) 39 SR (NSW) 305 per Jordan CJ.
I will apply these principles in the determination of the application of the plaintiffs.

Claims Pursuant to the Australian Consumer Law

FASOC4 seeks to plead a number of different causes of action arising under the ACL. They can be conveniently grouped in this way: 1. Breaches of a consumer guarantee arising from the supply of services, namely the BAS ("the consumer guarantee claims"). The guarantees which are said to have been breached are those provided for in: 1. section 60 of the ACL - the due skill and care guarantee; 2. section 61(1) of the ACL - the fitness for purpose guarantee; and 3. section 61(2) of the ACL - the result guarantee; and 1. Conduct characterised variously as misleading and deceptive, false or misleading, or likely to mislead or deceive in contravention of ss 18, 29(1)(b), 29(1)(m) and 34 of the ACL. The conduct is constituted by representations which are pleaded as having been made by each of the 1st to 16th defendants ("the impugned conduct claims").
Insofar as FASOC4 relies on the conduct of the defendants by way of representations contrary to the sections enumerated above, the plaintiffs plead that they and the group members "… relied upon, and were induced by, the Representations… to acquire BAS".
As opposed to earlier versions of the pleading, FASOC4 makes claims for damages which are pleaded in the alternative depending upon which parts of the ACL give rise to the various claims.
FASOC4 pleads that the plaintiff and group members suffered "… injury, loss and damage by reason that…" the defendants were negligent, an allegation which seems to incorporate a breach of the due care and skill guarantee under the ACL, and by reason that the defendants were in breach of the purpose and result guarantees contained in the ACL.
There are particulars provided in respect of the plaintiffs by reference to the required Statement of Particulars pursuant to r 15.12 of the UCPR. It is plain that those particulars incorporate personal injuries, consequent disabilities and other loss and damage "… such as pain and psychiatric injury".
In FASOC4, the plaintiffs advance a claim, in the alternative to the claims for personal injury to which I have just referred, for loss and damage by reason of the conduct of making representations in contravention of the ACL which I have described as the impugned conduct claims above and which are not claims for breaches of consumer guarantees.
This particular claim for damages is pleaded only as an alternative and not an additional claim "… if any of the plaintiffs and group members have not suffered injury…". The loss and damage is particularised as constituted by: "(a) distress and disappointment at the poor aesthetic outcome of the BAS; (b) economic loss, including for the costs of rectifying the poor aesthetic outcome of the BAS."
It will be convenient to refer to this claim as "the alternative claim".

Submissions

It is convenient to deal with the submissions opposing the amendments articulating these statutory causes of action.
The first submission was that the provisions of ss 137C and 137E of the CC Act prohibited the alternative claim for damages pleaded by the plaintiffs.
It is clear that the provisions of ss 137C and 137E bar the making of claims to recover an amount of loss or damage where the loss and damage is, or results from, death or personal injury.
The submissions of the 7th to 15th defendants, which the 5th defendant adopts, rely upon three fundamental propositions. First, it is unclear how a "poor aesthetic outcome" would not fall within the definition of personal injury in s 4 of the CC Act, because it must constitute an impairment of a person's physical condition.
The plaintiffs contest the conclusion that as a matter of fact a poor aesthetic outcome must necessarily constitute a physical impairment. They point to examples of a poor aesthetic outcome being claimed by one or more of the plaintiffs including that the breast implants were positioned too high, unevenly aligned or otherwise mispositioned, or were asymmetrical or apparently distorted. The plaintiffs accept that in some circumstances a poor aesthetic outcome may be or include the consequence of an impairment in their physical condition, but submit that is not necessarily so. They submit, in effect, that it is not possible to conclude by reference only to the matters pleaded, and before a final hearing of all of the relevant facts, that the alternative claims result from personal injury. They submit that the Court would reject that submission as a basis for refusing leave to file FASOC4.
Secondly, the defendants submit that the pleadings do not specify how it could be said that any disappointment or distress suffered was not consequent upon physical or psychiatric injury.
The plaintiffs submit that because those alternative claims are pleaded as only arising in the event that it is found that they did not suffer personal injury, such a meaning is sufficient to alert the defendants to the case against them, namely that the disappointment or distress was not consequent upon the suffering of personal injury.
Thirdly, the defendants submit that the relevant Statement of Particulars filed and served for each plaintiff makes no reference to "disappointment" with only some referring to "distress". They submit that shows that in substance the plaintiffs are claiming only damages for personal injury.
The plaintiffs respond by submitting that the Statement of Particulars is filed and served in compliance with r 15.12 of the UCPR which requires provisions of particulars in personal injury cases. They submit that the failure of those documents to set out the particulars of loss and damage which do not amount to personal injury is unsurprising and does not limit or define the claim in the way contended for by the defendants.

Discernment

I reject the submissions of the defendants. I am not persuaded that a poor aesthetic outcome of the BAS must necessarily constitute a personal injury by way of an impairment of a person's physical condition. There is no doubt that in some circumstances that it may do so. However I accept that in many cases a poor aesthetic outcome can exist even if in all respects there has been no physical impairment. It is to be remembered that the BAS was conducted by the insertion of an artificial implant under the patient's breast tissue. Such implant was intended to change the shape of the patient's breasts by enlarging them. So much may have occurred without any impairment of the person's physical condition. Asymmetry of the breasts could be the result of a successfully performed BAS. That asymmetry may not involve any impairment of the physical condition of the breasts.
As well, because the alternative claims can only succeed, and result in an order for damages favourable to the plaintiffs, if the plaintiffs fail in their claims for damages for personal injury, there is no reason to conclude that the amendment ought to be disallowed. Put differently, if the defendants are correct that a poor aesthetic outcome in one or more plaintiffs does amount to, or is the result of, personal injury, then (subject to a favourable finding on liability) damage for that outcome would be received by the plaintiff and the alternative claim would not be determined. If the defendants demonstrate that no personal injury has occurred, then it is open to the plaintiffs to submit that the alternative claims for damages can be made out.
I note that it is clear that damage for distress and disappointment and as well economic loss can be awarded in the absence of a person suffering personal injury: Moore v Scenic Tours Pty Ltd (2020) 268 CLR 326; [2020] HCA 17 at [39]-[46], [75].
As well, as is apparent from Scenic Tours Pty Ltd v Moore [2018] NSWCA 238; 339 FLR 244, the existence and terms and conditions of a contract for the supply of services may be different from the actual supply of services when determined as a question of fact, which can be based on promotional material or a brochure which outlines the services and the result which will be obtained from those services.
I do not accept that the amendments should not be permitted because the contents of the Statement of Particulars only include reference to personal injury, loss and damage. That is all that is required of such document by the UCPR. Nor do I accept that a claim for damages for distress and disappointment is required to specify how those damages do not arise out of personal injury. In my view, it is sufficient in this case for the claim to be made in circumstances where because it is an alternative claim, it can be said thereby not to arise from personal injury.
The second principal submission for the defendants is that the impugned conduct claims for breaches of various specified provisions of the ACL, by the making of representations, are liable to be struck out, and so ought not to be permitted by way of an amendment.
There are 14 representations in FASOC4 which are said either independently or else in combination to amount to the characterised conduct giving rise to the impugned conduct claims.
The defendants submit that in respect of these 14 representations, the plaintiffs have not pleaded the critical facts which underpin and found each representation. It is submitted that FASOC4 does not plead the material facts as to the conduct by which the representations were made.
The defendants criticise as wholly insufficient for the purposes of a proper pleading the particulars of publication provided by paragraph 24D of FASOC4 which identifies the website and social media sites on which the representations were disseminated and published.
The defendants point to the fact that it is not pleaded whether the representations were express or implied, or whether they were conveyed directly or else by inference. In summary, the defendants submitted that the plaintiffs needed to identify with respect to each representation the actual words alleged to have been published on which the plaintiffs rely to allege that a specific representation was conveyed.
The evidence contained in the affidavit of Leonie Beyers sworn 24 May 2021 was relied upon by the defendants to support their submission that further particularisation of the representations was needed. Ms Beyers draws attention to the difficulty in identifying the representations from an indexed bundle of documents provided by the plaintiffs as evidence of the existence of the representations.
The plaintiffs note that although this submission may be literally accurate when attention is concentrated on paragraphs 24D to 24AG, which are described as representations made to the public generally, the plaintiffs do plead, in respect of each individual plaintiff in paragraphs 26 through to 77LFC, which representations were conveyed to each plaintiff, when and in what circumstances those representations were so conveyed, the conduct of the identified defendant relied upon, and what the plaintiff did by way of reliance on that conduct.
I am not persuaded, having regard to the contents of the pleadings and the evidence of Ms Beyers, in the context of representative proceedings, that the defendant's submission, that the proposed pleading should not be allowed to be filed, ought be accepted.
It is to be kept in mind that the purpose of the pleading is to ensure that the defendants are informed of the case which they have to meet sufficiently for them to be able to defend the proceedings.
Here the representations are identified, the internet and social media sites where the representations are to be found are identified, the specific representations read or heard by each plaintiff are identified as is the source of that representation. And there is a pleading of reliance on those specific representations and other conduct.
It is a matter for evidence and submission at trial as to how and in what way the representation is conveyed by the websites nominated, and whether those representations were conveyed as alleged.
I agree with the plaintiffs' submissions that the defendants are seeking, in effect, an articulation of the plaintiffs' final case, but in the amended pleading - FASOC4.
I am not satisfied that the pleading is deficient as the defendants contend, nor that it would be liable to be struck out.
It is convenient to deal here with the defendants' further contentions that there is no pleading, or no sufficient pleading, of the falsity of the representations, or the way in which the representations are said to be misleading or deceptive or likely to mislead or deceive. The pleading in paragraphs 94A to 94L describes the conduct as false, or misleading or deceptive or as likely to mislead or deceive in contravention of the identified provisions of the ACL, thereby characterising the conduct.
In my view, the defendants' submission fails to give meaning to the introductory words of each of those paragraphs which are to a similar effect, namely: "By reason of the System of BAS and/or the matters referred to in paragraph… above: …"
The paragraph mentioned in the case of each plaintiff refers back to specific precautions which it is said that the defendants should have taken in the performance of the BAS to avoid the pleaded risk of harm.
By that pleading which invites attention to the earlier paragraph, in my view there is a sufficient basis for the defendants to know what is alleged to be the false or misleading (or otherwise deceptive) aspect of the conduct in which they engaged, and why that is so.
However, the pleading does include an allegation that the representations are false and misleading about services and that thereby they contravened s 29(1)(m) of the ACL. That subsection prohibits false or misleading representations "… concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy…".
This allegation is to be found in sub-paragraph (d) of each of paragraphs 94 to 94L of FASOC4. The fourteen representations said to be made to the public as described in paragraph 24D do not mention or say anything at all about the specific subject matter referred to in s 29(1)(m) of the ACL, namely the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.
Nor do any of the representations upon which the individual plaintiffs are alleged to have acted as set out in paragraphs 24J to 24AG refer to the subject matter of s 29(1)(m). To the extent that it might be argued that a breach of s 29(1)(m) is described by any of the allegations alleging a failure to take reasonable precautions, I note, as a matter of completeness, that none of those allegations raise matters which might fall within the conduct prohibited by s 29(1)(m).
In those circumstances, the introductory words set out above in [72] are incapable of conveying any false or misleading characteristic of the representations alleged to constitute breaches of s 29(1)(m) of the ACL.
In light of the terms in which the representations are pleaded and having regard to the incapacity just referred to, each of sub-paragraphs (d) of the paragraphs 94 to 94L cannot be allowed by way of amendment, because they are not supported by any other pleading nor any suggestion of any relevant material fact.
Further, the defendants submit that the FASOC4 does not specify which one of the representations relied upon, if any, are as to an existing fact or whether they are representations as to a future matter. The defendants submit that in the absence of such specificity, and in the absence of material facts identifying how any of the representations are said to be misleading or deceptive, they are not able to know how it is that any representation as to a future fact is misleading because there is no pleading of substance about the absence of reasonable grounds for the making of the representation.
However, in my view, it is not always possible to clearly delineate a representation as being either as to an existing fact or else as to a future matter. Some representations may in fact contain both elements. In those circumstances, the proposed FASOC4 having identified the representations pleads that to the extent it was made with respect to a future matter, no reasonable grounds existed.
The defendants further submit that without being told (in the pleading) with clarity which representation is with respect a future matter, they are being denied procedural fairness because they cannot know whether they have the obligations set out in s 4 of the ACL with respect to adducing evidence.
In my view, in the circumstances here, the plaintiffs are not obliged to plead that a representation is made as to a future matter, or that part of a representation may be. Section 4 of the ACL does not create a cause of action, rather it is an evidentiary provision dealing with how a claim may be proved, or else resisted. It is a provision which provides for a deemed conclusion if evidence is not adduced by a defendant. If evidence is adduced, then the Court has to make a determination about whether that evidence taken with all of the evidence in the case proves the exclusion of reasonable grounds for the making of the statement. Because the provision is an evidentiary or procedural one, I am of the view that it does not have to be pleaded either specifically or in substance. It follows that the absence of pleading as to whether a representation is or is not as to a future matter will not be a default of a kind which leads to an amendment being refused.
Finally with respect to the impugned conduct claims, the defendants submit that the necessary material facts to establish the causal relationship between the conduct (as variously characterised) and the loss are not pleaded.
The plaintiffs submit that in order to constitute a sufficient pleading all that is required is, having pleaded the relevant representations and their particular character, to plead reliance on those representations followed by the loss and damage alleged to be suffered from the contraventions of the ACL.
The plaintiffs' submissions note that, in respect to the cause of action in negligence they have pleaded at paragraphs 81M to 81X, but for the pleaded breaches of duty, each plaintiff would not have undergone the BAS.
There seems to me to be good reason for a similar pleading being included when dealing with the impugned conduct claims which arise under the ACL. Particularly is that so having regard to the pleading at paragraph 91 which, when dealing with the consequences of the breaches of the consumer guarantees which were said to constitute a major failure, pleads that the plaintiffs would not have acquired the BAS had they been fully aware of the nature and extent of the failures.
The FASOC4 will need to be further amended to add in a pleading to a similar effect as those in paragraphs 81M to 81X and 91, to reflect the alleged consequence of the impugned conduct claims under the ACL.

Consumer Guarantee Claims under the ACL

The defendants submit that the material facts necessary to identify the services being provided including the benefits and facilities to be provided to the plaintiffs are not adequately pleaded. It is inherent in this submission that the defendants are unable to understand the case being made against them with respect to the consumer guarantee claims.
In my view, it is entirely clear from the FASOC4: 1. what services were being acquired by the plaintiffs and supplied by the defendants - that is BAS which was part of the BAS system as set out in Part II of FASOC4 being paragraphs 15 to 24C; 2. what physical facilities were being provided for those services - that is the TCI Premises described in paragraphs 15 to 17 of FASOC4; 3. what human facilities or resources (which may be an inapt expression) were being provided for those services - namely the TCI Surgeons and the TCI Anaesthetists as described in paragraphs 18 to 20 of FASOC4; 4. the purpose for which the services and facilities were acquired by the plaintiffs and provided by the defendants - namely the BAS Purpose pleaded at paragraph 85 of FASOC4; and 5. the result which might reasonably be expected from the services - namely the BAS Result pleaded at paragraph 87 of FASOC4.
As well, in the case of each plaintiff, the relevant facts as to the acquisition of the services and what happened as a consequence of undergoing BAS are pleaded.
I reject the submission that there are further material facts which need to be pleaded to establish the cause of action for breaches of the consumer guarantees in the ACL.
I note that in considering the breach of the due skill and care guarantee, the same tests are relevant to the claims in negligence. Access can be had to the pleadings in negligence, if necessary, to enable the defendants to have a complete understanding of the claims which they have to meet.
There is no reason to conclude that FASOC4 does not adequately plead all of the matters relevant to the consumer guarantee causes of action.

Negligence

The plaintiffs plead against the 1st to 5th defendants, i.e. Dr Dona and the TCI Group, that each of them owed a duty to exercise reasonable care and skill in the provision of advice about, the performance of, and in the management after the performance of, the BAS. As well, the plaintiffs plead that a duty existed which fell on Dr Dona as the designer of the BAS system, namely that he owed the plaintiffs and group members a duty to exercise reasonable care and skill in the design of the system.
Each of the TCI Surgeons are alleged to owe a duty to their patients who underwent BAS, being a duty to exercise reasonable care and skill in the provision of advice about, in the performance of, and in the management after the performance of, the BAS.
Claims in negligence against these defendants, because they involve claims for personal injury, are subject to the provisions of the Civil Liability Act 2002.
FASOC4 is arranged to address the essential elements of a cause of action under the Civil Liability Act. First, the proposed pleading pleads a risk of harm in the following terms: "79. In undergoing BAS, there was a risk that the plaintiffs and group members might suffer harm from materialisation of the BAS Complications (the Risk of Harm)."
This is to be understood and read as alleging physical or mental injury in accordance with the way in which harm is defined in the Civil Liability Act.
Next, in paragraph 79A, the plaintiffs plead that the Risk of Harm was known to the defendants or else ought to have been known to them. There are no particulars pleaded which relate to this paragraph. It is clear from the Civil Liability Act, that either actual knowledge or constructive knowledge is sufficient for the purpose of establishing foreseeability in accordance s 5B(1)(a). However, a plaintiff may choose to plead both actual and constructive knowledge. A defendant is, in my view, entitled to know what facts, matters and circumstances the plaintiff is relying upon to establish knowledge in either of its forms.
To the extent that paragraph 79A does not set these matters out by appending particulars of either or both actual or constructive knowledge, the pleading is deficient. Any grant of leave to file FASOC4 will include, as a condition, the inclusion of such particulars.
Paragraph 79B pleads that the Risk of Harm is not insignificant. No specific complaint is made about that paragraph. It is in an appropriate form. Paragraphs 81 to 81L set out the allegations about breach of the duty of care and the particulars of those breaches.
Finally, in paragraphs 81M to 81X, the plaintiffs plead that but for the breaches of duty by the defendants, they (and the group members) would not have undergone the BAS and would not have suffered the injuries particularised.
The defendants submit that the proposed pleading ought not be permitted to be filed because it is entirely devoid of the material facts necessary to establish the breach and causation elements of the cause of action.
I reject that submission. In my view, material facts are pleaded in paragraphs 14A to 14J, which are sufficient to ground the existence of a duty of care owed by each of the TCI Surgeons in the undertaking of surgery on any of the plaintiffs or group members.
Between paragraphs 26 and 77LL, there are pleaded sufficient facts with respect to each plaintiff to establish the circumstances in which the TCI Surgeons undertook the relevant surgery and what occurred in the course of the relevant surgery. There are sufficient as a basis for a claim for breach of duty.
It is unnecessary in my opinion to consider for the purpose of any finding at this stage of the proceedings whether, and if so how, any one or other representation in fact amounted to a breach of the pleaded duty of care. That is because the representations pleaded are capable, depending on what facts are ultimately proved, of constituting a breach of duty.
I am unpersuaded that the facts, matters and circumstances pleaded are inadequate to enable the defendants to know the case they are required to meet.
The submissions of the defendants assert that there is no pleading which identifies the features of the "One Size Fits All Approach" to BAS, nor which undertakes a comparison between the system of BAS and the allegation that there is "an increased risk of having the [BAS] complications compared with [BAS] not performed in accordance with the One Size Fits All Approach".
In considering this submission it is necessary to have regard to the whole of the proposed FASOC4. In paragraph 21, the plaintiff identifies a number of particular features of the standard approach used by TCI Surgeons at TCI Premises to undertake BAS upon the plaintiffs and group members. Those identified features are said to constitute the One Size Fits All Approach.
In my view, in a pleading of this kind in representative proceedings it is not necessary to plead a direct correlation between one or more features of the One Size Fits All Approach and the existence of one or other complication of the kind set out in paragraph 22. That is because having regard to the nature of the BAS, the wide variability in the subjective facts of each plaintiff (and ultimately each group member), a pleading need not descend to such particularity. In my view, these submissions seek an outline of evidence both expert and lay rather than a statement of the allegations and causes of action which the defendants have to meet.
I reject the defendants' submission.
The defendants also submits that a "counterfactual" to the negligence claims is not pleaded. In my view, such counterfactual is pleaded - the plaintiffs contend that they would not have undergone the BAS and would not have suffered injuries. I reject this submission.
The defendants also submit that FASOC4 provides "shopping lists" of complications, and particulars of breach of duty without linking between those general lists. As I have earlier said above at [111], such a submission in representative action is in substance seeking the effect of lay and expert evidence to be pleaded. In my view, in this case, such particularity is not required in FASOC4 to enable the defendants to know the case they have to meet.
Finally, the defendants submit that the Court would not grant leave for FASOC4 to be filed because it includes a claim for relief by way of declarations with respect to breaches of duties of care.
The defendants submit by reference to the well-known integers of the tort of negligence, namely, put shortly, duty, breach and damage, that there is no room for a declaration as to any of those elements, particularly breach of duty. In a case of a single plaintiff, I would readily agree that the court makes findings as to the success of the plaintiff by reference to the existence of those elements and enters a judgment. Declarations are ordinarily not made.
However, in representative proceedings, such a declaration, in my view, is possible. Declarations can have a practical utility, particularly where group members claims are to be determined at a later time: see Gill v Ethicon Sarl (No 5) [2019] FCA 1905 at [5800]-[5807]. Whether such a declaration will be made or not after a hearing is beside the point. It is open to the plaintiff to seek such relief.
I reject the defendants' submissions on this basis.

Fifth Defendant

The fifth defendant adopted the submissions of the other defendants, dealt with above, with respect to the effect of ss 137C and 137E of the CC Act. For the reasons earlier given, I do not accept those submissions.
In addition, the fifth defendant makes four further submissions opposing the grant of leave to the plaintiffs to file FASOC4 on the basis that the Court would conclude that the plaintiffs' claim against the fifth defendant is so hopeless that it would, if filed, be summarily dismissed. The fifth defendant does not lead any evidence in support of his submissions.
The first submission which he makes is that the conduct alleged against him in paragraph 24F of FASOC4 is not capable of communicating the representations pleaded in paragraph 24D as having been made to the public.
The fifth defendant emphasises that unlike the claims against the TCI Group, it is not said that he made the representations to the public through the internet on the various sites nominated. Nor is it pleaded, in contrast to the claims against the TCI Surgeons, that he is said to have personally attended any of the pre-surgery consultations at which the TCI Surgeons are said to have made the representations.
It follows, the fifth defendant submits, that none of the representations pleaded could amount to his engaging in misleading or deceptive conduct to any of the plaintiffs or group members. In this respect the fifth defendant notes that his liability is not alleged to be an accessorial one, and so to have engaged in conduct contrary to s 18 of the ACL, at a minimum, the fifth defendant must have disseminated the representations. No such pleading is made.
The plaintiffs submit that the allegations must be taken together, in the context of the nature of the business undertaken and the surgery performed in accordance with the BAS System by the TCI Group and the TCI Surgeons. In that context, the plaintiffs submit, it is readily apparent from the pleaded facts, that such conduct as writing the representations, approving the marketing material by which the representations were conveyed whilst promoting himself as, and acting in the role of, the "Surgical Director" of the TCI Group, it would be open to the Court to conclude that as a matter of fact the fifth defendant engaged in misleading or deceptive conduct. The plaintiffs also point to the specific pleading that the fifth defendant was responsible for obtaining the brochures from the Australian Society of Plastic Surgeons and supplying them to the TCI Group and the TCI Surgeons for their use when interacting with the plaintiffs and group members had the effect of perpetuating the fallacy about the qualifications of the TCI Surgeons as plastic surgeons.
Whilst on the face of the pleading, the connection between the representations pleaded and the conduct of the fifth defendant which is said to amount to misleading and deceptive conduct contrary to s 18 of the ACL may be described as tenuous, or oblique, I am not prepared to conclude that the representations which were said to be misleading or deceptive could not have been made by the fifth defendant.
It seems to me underlying these pleadings are complex issues of fact which cannot give rise to certainty of the kind necessary to permit what is in effect a claim for summary judgment. It follows that this submission which contended that the Court would be persuaded that the amendments in FASOC4 ought not be allowed because they would be liable to summary judgment must be rejected.
The second submission made by the fifth defendant is to a similar effect, namely that there is no nexus, or no sufficient nexus between the alleged conduct of the fifth defendant and the conveying of the representations either to the public or to the plaintiffs.
My conclusion with respect to this submission is the same as the first submission. The nexus may be tenuous or oblique but it is not entirely missing. For example, the plaintiffs point to statements in the published material, of which the fifth defendant is said to be the author, which refer to the TCI Surgeons as "our plastic surgeons" in circumstances where it will be contended that they were not so specialised demonstrates a relevant nexus.
In my view, the pleading is sufficient for the fifth defendant to know what is being alleged against him, and it will be a matter for further factual material by way of evidence adduced by the plaintiffs to make good their pleaded cause of action.
The third submission which the fifth defendant makes is that unlike the other defendants there is no case pleaded of reliance or causation by the plaintiffs on the misleading and deceptive conduct of the fifth defendant. By way of example, the fifth defendant says that if one examines the pleading referable to Ms Rickhuss, in paragraphs 26A to 26C, and in paragraphs 28A to 28C, the representations are said to have been made seriously by members of the TCI Group, and by the sixth defendant, a TCI Surgeon. Ms Rickhuss pleads that she relies on these representations made by these defendants in deciding to undergo her BAS. No representation made by the fifth defendant is said to have been relied upon by Ms Rickhuss. The pleadings of the other plaintiffs are in a similar form (although referring to different surgeons).
The plaintiffs respond by accepting that at the paragraphs pleaded there is no case of reliance or causation pleaded against the fifth defendant. But they point to the pleading in paragraph 95A as making up for that deficiency. That paragraph contains a clear pleading that the representations made by the fifth defendant were relied upon and were causal in their effect upon the plaintiffs when they decided to undertake BAS.
To my mind this is a sufficient pleading of reliance and causation as far as the fifth defendant is concerned. I reject this submission on the part of the fifth defendant.
Finally, the fifth defendant submits, in reliance on the decision of Australian Securities and Investments Commission v Narain (2008) 169 FCR 211; [2008] FCAFC 120 at [96], that before a determination can be made adversely to the fifth defendant in circumstances where, as a matter of fact, the fifth defendant is pleading to be acting whilst holding a corporate position or role, namely surgical director of the TCI Group, the pleading must address the following question, namely whether all of the elements of the contravention are alleged (and ultimately made out) against the fifth defendant as an individual or whether the conduct pleaded demonstrates that the fifth defendant merely acted as a corporate organ, binding the TCI Group but not himself individually.
The fifth defendant submits that having regard to the matters pleaded, only the latter conclusion is available. Accordingly, he submits that FASOC4 should not be permitted to be filed.
In my view, this submission of the fifth defendant mistakes the position between the circumstances which require pleading and what as a matter of fact the plaintiffs are required to prove at trial before judgment can be obtained against the fifth defendant. FASOC4 pleads a claim of individual liability on the part of the fifth defendant. That means that the plaintiffs will have to persuade the Court that the proved conduct of the fifth defendant, as matter of fact, demonstrated that he was in breach of s 18 of the ACL. The pleading is broad enough to include such a case. Whether it could, or might succeed, is not a matter which would justify refusing to grant leave to file FASOC4.
I am persuaded that leave should be granted to file FASOC4, notwithstanding each of the submissions of the fifth defendant.

Costs

There is no reason why the usual order against the plaintiff being the party seeking to amend their pleadings ought not be made.
The costs of the Notice of Motion may be differently regarded. The defendants have not succeeded in resisting the substance of the order sought by the plaintiffs for leave to amend although the grant of leave requires some further amendments to be made. To that extent, they should pay the costs of the motion. But on the other hand, in light of the submissions of the defendants in opposition to leave, the plaintiffs have twice amended their proposed pleading from FASOC2 to FASOC4, thereby accepting parts of the defendants' submissions.
In those circumstances, because all parties can justifiably claim to have had a measure of success in preparation for and on the hearing of the Notice of Motion, the appropriate order is in my opinion that each party should pay their own costs of the Notice of Motion.

Orders

I make the following orders: 1. Grant leave to the plaintiffs to file the Fourth Further Amended Statement of Claim in accordance with these reasons for judgment, providing that such amended document is filed and served by Friday 10 June 2022. 2. Order the plaintiffs to pay the costs of and occasioned by the amendment. 3. Otherwise, dismiss the plaintiff's Notice of Motion filed on 8 April 2021. 4. Order that each party pay their own costs of the Notice of Motion filed by the plaintiffs on 8 April 2021. 5. Dismiss the Notice of Motion filed on 19 March 2021 by the 7th to 16th defendants. 6. Order that each party pay their own costs of the Notice of Motion filed on 19 March 2021 by the 7th to 16th defendants. 7. Stand these proceedings over for directions to Friday 24 June 2022 before me.

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: 20 May 2022

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (15 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (12)

Cited By (1)