Sundararajah v Teachers Federation Health Ltd

Bailey v Department of Land and Water Conservation [2009] NSWCA 100 GE Capital Corporate Finance Ltd v Bankers Trust Co [1995] 1 WLR 172 Government Insurance Office of NSW v Council of the City of Penrith (unreported - Court of Appeal - 9 March 1999) CASES CITED : Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 NRMA v John Fairfax [2002] NSWSC 563 Prestia v Aknar (1996) 40 NSWLR 165 Sundararajah v Teachers Federation Health Ltd [2009] NSWSC 1443 Telstra Corporation v Australis Media Holdings (unreported - McClelland CJ in Eq - 10 February 1997)

PARTIES : Dr Raahulan Sundararajah (Plaintiff) Teachers Federation Health Ltd (Defendant)

COUNSEL : P Arblaster (Plaintiff) S Philips (Defendant)

SOLICITORS : TressCox Lawyers (Plaintiff) Henry Davis York (Defendant)

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2009/291703 DR SUNDARARAJAH V TEACHERS FEDERATION HEALTH LTD (NO. 2) JUDGMENT 1 On 18 December 2009 I granted an interlocutory injunction restraining the Defendant from acting upon or implementing a Notice of Termination dated 29 September 2009 of the HICAPS Agreement made between the Plaintiff and the Defendant on 5 August 2005 or from issuing any substitute notice, and also restrained the Defendant from treating the agreement as being at an end upon the expiry of the 90 day notice period referred to in that Notice. 2 The matter was heard at very short notice after short service on the Defendant. At the time of the hearing the Defendant was not in a position to adduce evidence about the factual matters that gave rise to the Notice of Termination. 3 On 10 February 2010 the Defendant filed a Notice of Motion seeking an order that the orders I made on 18 December 2009 be varied by deleting the words "or from issuing any substitute notice" in Order 1(a). That Notice of Motion has been listed twice for hearing before me but on each occasion an application was made to vacate the hearing. The reason for vacating the hearing of the Notice of Motion is related to evidence which has been served by the Defendant that masks certain material. The evidence falls into 3 categories:

(3) Minutes of meetings within the Defendant. 4 In the first category of documents the names of the patients or former patients of the Plaintiff have in 4 cases been masked to protect the anonymity of the complainants. In 2 other cases the names of the complainants have been disclosed. 5 In the second category the patient membership numbers with the Defendant and the transaction numbers were masked although the Defendant has now indicated that it is prepared to unmask those details. 6 In the third category the documents are only unmasked to the extent that they contain information relevant to matters concerning the Plaintiff. 7 When the application to vacate came before me on 26 March 2010 it appeared that the issue of whether the Defendant was required to provide unmasked documents needed to be determined before the Notice of Motion could be heard because the evidence was relevant to the orders sought in the Notice of Motion as well as being relevant to any final hearing of the proceedings. I vacated the hearing of the Notice of Motion and I heard some brief argument about the entitlement of the Defendant to mask the documents and rely upon them. Counsel were not fully prepared to argue that matter and I stood it over part heard for further argument on 31 March 2010. 8 As I understand the position, the Defendant wishes to rely on the evidence of the complaints and matters associated with the billing practices of the Plaintiff both to establish bona fides in having served the Notice of Termination last year and, perhaps, as a basis for serving any further Notice whether under cl 7.2 or 7.3 of the HICAPS Agreement that it may be permitted to do if the injunction is varied in the manner sought. 9 The Plaintiff submits in relation to category (1) that unless he knows who the complainants are he is in no position to be able to answer the complaints to neutralise any basis the Defendant might otherwise have for being able to rely on those complaints. Similarly, in relation to category (2) the Plaintiff says that unless he knows who the patients are in each case he will not be able to explain why the billing was done in the way it was. If he cannot do that, again, he would not be able to neutralise the effect of what Defendant puts forward based on those billing practices. 10 As I have noted above, the Defendant says it is prepared to provide unmasked copies of the billing documents. However, the Plaintiff submits that that is not sufficient. Whilst it may be possible for the Plaintiff to try to work out who each patient was in relation to those matters it would be a long and difficult process and would involve a good degree of speculation and guesswork. The Plaintiff in effect asks that the Defendant identify who the patients are in respect of those billing matters. 11 In relation to category (3) the Plaintiff said that he did not press for unmasked copies of those for the purposes of the Notice of Motion. He asked only that the Plaintiff be allowed to reserve his rights to argue for unmasked copies in respect of any final hearing. 12 The Plaintiff asks for a direction that the Defendant provide the evidence it has served in an unredacted way and, at least in relation to category (2) the Plaintiff appears to seek a direction not only that the material served be unredacted but that more information be provided by the Defendant. 13 During the course of the hearing on 31 March 2010 I asked the parties if they sought me to rule in advance on whether the evidence in a redacted form would be admissible at either the hearing of the Defendant's Notice of Motion or at the final hearing. The Defendant embraced the suggestion that I should give some sort of preliminary indication about whether the evidence in unredacted form would be admitted so that it could make a decision about the course it took in relation to preparation for the hearing of the Notice of Motion and the hearing. The Plaintiff's position was that such a ruling or indication would not assist him in terms of case management and preparing evidence in reply. The difficulty that the Plaintiff faced, however, was articulating a basis, other than a preliminary ruling or indication on admissible evidence, for obtaining an order that the Defendant serve unredacted evidence. Despite reference to cases that were said to provide some assistance analogously, the issue in relation to the redacted evidence was not one that arose here from an order for discovery. 14 In this regard, McClelland CJ in Eq said in Telstra Corporation v Australis Media Holdings (unreported - McClelland CJ in Eq - 10 February 1997): There is, however, a difference for the purposes of the application of this rule of practice between cases of privilege, on the one hand, and cases of irrelevance on the other. The existence of a recognised privilege confers a positive right to withhold production, whereas exclusion of part of a document on the ground of irrelevance is permitted as a matter of practice, in order to avoid infringement, for no legitimate purpose, of interests of privacy and confidentiality, and thus to avoid injustice. 15 Since the issue here does not arise out of the giving of discovery, it seems to me that the only basis upon which the Plaintiff can now ask for unredacted documents is by way of a preliminary ruling on whether the Defendant will be permitted to rely on a redacted document at any subsequent hearing. 16 Further, it does not seem possible on the state of the present evidence to give other than an indication of what is likely to transpire at a future hearing in relation to the admissibility of the evidence in question. 17 The Defendant tendered an internal document of the Defendant in relation to the Defendant's policy with regard to complaints. Paragraph 4 relevantly provides: We adhere to the following principles in resolving complaints: … (v) Confidentiality: personally identifiable information concerning the complainant will be available only for the purpose of addressing the complaint within TFH and should be actively protected from disclosure unless the customer expressly consents to its disclosure; … 18 The Defendant does not suggest that any of its members were aware of that policy document or even that that was its approach to confidentiality when dealing with a complaint. It was not established that the policy was even in existence at the time the complaints were made and, presumably, investigated. The document was put forward on the basis that the question of confidentiality arises at the present time and that is the existing policy. It is in those circumstances and for that reason that the Defendant says it will not breach the confidentiality of the complainants and the patients in respect of the billing enquiries. 19 The Defendant calls in aid a privilege provided by Div 1A of Pt 3.10 of the Evidence Act 1995. That Division provides a privilege that arises out of a professional, confidential relationship. 20 Section 126B Evidence Act relevantly provides: (1) The court may direct that evidence not be adduced in a proceeding if the court finds that adducing it would disclose: (a) a protected confidence, or (b) the contents of a document recording a protected confidence, or (c) protected identity information.

(2) The court may give such a direction: (a) on its own initiative, or (b) on the application of the protected confider or confidant concerned (whether or not either is a party).

(3) The court must give such a direction if it is satisfied that: (a) it is likely that harm would or might be caused (whether directly or indirectly) to a protected confider if the evidence is adduced, and (b) the nature and extent of the harm outweighs the desirability of the evidence being given.

(4) Without limiting the matters that the court may take into account for the purposes of this section, it is to take into account the following matters: (a) the probative value of the evidence in the proceeding, (b) the importance of the evidence in the proceeding, (c) the nature and gravity of the relevant offence, cause of action or defence and the nature of the subject matter of the proceeding, (d) the availability of any other evidence concerning the matters to which the protected confidence or protected identity information relates, (e) the likely effect of adducing evidence of the protected confidence or protected identity information, including the likelihood of harm, and the nature and extent of harm that would be caused to the protected confider, (f) the means (including any ancillary orders that may be made under section 126E) available to the court to limit the harm or extent of the harm that is likely to be caused if evidence of the protected confidence or the protected identity information is disclosed, (g) if the proceeding is a criminal proceeding - whether the party seeking to adduce evidence of the protected confidence or protected identity information is a defendant or the prosecutor, (h) whether the substance of the protected confidence or the protected identity information has already been disclosed by the protected confider or any other person.

(5) The court must state its reasons for giving or refusing to give a direction under this section. 21 Section 126A defines protected confidence to mean: a communication made by a person in confidence to another person (in this Division called the confidant ): (a) in the course of a relationship in which the confidant was acting in a professional capacity, and (b) when the confidant was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law or can be inferred from the nature of the relationship between the person and the confidant. 22 It seems to me that there are a number of problems for the Defendant in endeavouring to bring itself within that definition. Even if it can be accepted that there was an implied obligation upon the Defendant not to disclose the identity of complainants there is the very difficult problem of establishing that the health provider was acting in a professional capacity with regard to the complainants. 23 The Defendant suggests that the categories of relationship covered by the definition in paragraph (a) of protected confidence is not closed and points to the fact that it has been extended to journalist and source: NRMA v John Fairfax [2002] NSWSC 563. In that case Master Macready (as his Honour then was) drew attention to the definition given by Santow J in Prestia v Aknar (1996) 40 NSWLR 165 at 186. He then noted the occupation of a journalist involved skills which were acquired by practice and instruction and also by tertiary courses. His Honour rejected the view that acting in a professional capacity meant that professional services were being delivered to the confider. He said that was not required by the section and there was no warrant for including it as an element in the definition. The element of relevance was whether the journalist was acting in a professional capacity (at [150]). His Honour drew attention to the Second Reading Speech when s 126A was introduced into the Act as providing some support for his view about the relationship of journalist and source (at [152]). 24 I do not think that what Master Macready said in NRMA v John Fairfax assists the Defendant. It is not clear to me how an insurer as a corporate entity, or an employee of an insurer who receives a complaint, can be said to be acting in a professional capacity. 25 There may be circumstances where the relationship between a member of the health fund and the health fund or its employees was a relationship that involved the Fund or its employees acting in a professional capacity. That does not mean, however, that every act of those persons nor all incidents of the relationship involve acting in a professional capacity: Government Insurance Office of NSW v Council of the City of Penrith (unreported - Court of Appeal - 9 March 1999 at [7] and [19]-[20]. The point is further strengthened by the fact that the Defendant only puts forward the complaints in relation to the number of them and not on the basis that those complaints were investigated and dealt with in any particular way. The mere receipt by the Defendant of the complaints cannot involve the Defendant acting in a professional capacity. 26 If, therefore, a claim for privilege was made by the Defendant based on ss 126A and 126B Evidence Act at any hearing, on the present state of the evidence I would reject that claim. 27 That still leaves for determination whether the Defendant would have the right to lead the evidence in redacted form as McClelland CJ in Eq suggested in Telstra Corporation v Australis might be permitted. In that regard, s 135 Evidence Act is relevant. 28 It is important to make clear again the basis upon which the Defendant puts forward the evidence. Mr Philips of counsel, who appeared for the Defendant, said this: I think it is fair to say the defendant's position is this; the evidence is relied upon on the motion as evidence of the number of the complaints and the nature in general terms of the complaints that were made, not as to whether there was any substance in them. So that it matters not, from your Honour's perspective, as to whether the plaintiff comes along and says, "I can explain every single one of these complaints", because what is relevant is the fact that the defendant - this is what I will ultimately be submitting - reasonably took the fact that it had received these complaints on board in exercising its expressed contractual right to terminate the contract.

For the plaintiff to embark on an exercise of seeking to justify himself and defend his conduct in relation to each of these complaints would miss the point, because that's not the reason for the evidence. Ultimately, I am instructed, we would rely on the primary evidence in paragraph 6 of the witness's affidavit, which is that she received these complaints. 29 It is upon that basis that the Defendant says it does not matter whether or not the Plaintiff has an answer to each of the complaints. It is not whether there is an answer to the complaints that matters. It is only that there are a number of complaints, and the nature of those complaints in general terms is relevant. 30 The Plaintiff says that the position is still unfair because he may well be able to answer each and every one of the complaints in an entirely satisfactory way and that would undercut the reliance on both the number and the nature of the complaints as a basis for the Defendant having issued the Notice of Termination. 31 If the Defendant wished to rely on a termination under cl 7.2(a) of the Agreement it is likely to be unfairly prejudicial to the Plaintiff to permit the adducing of evidence of the complaints without identification of the complainants so that the Plaintiff is in the position to provide any answer to the complaints that he can. 32 But it is not only for reliance on cl 7.2(a) that the Defendant may wish to rely on the complaints. The Defendant may also wish to rely on the evidence to answer what is said to be an allegation that the Defendant did not act in good faith when it issued the notice in respect of which the injunction was granted. As I understand the argument the Defendant wants to say that it did not act other than in good faith because it had good reason to issue the Notice of Termination under cl 7.3. Of course, strictly speaking, the Defendant did not need to have a reason for issuing a Notice of Termination under cl 7.3. But when the Plaintiff, in seeking the injunction, pointed to the matters that I have set out in para 31 of my earlier judgment (Sundararajah v Teachers Federation Health Ltd [2009] NSWSC 1443), it may be necessary for the Defendant to answer those by pointing to a good reason it had for taking the action it did, a reason not inconsistent with its obligation of good faith. 33 On the face of it, the use of the present evidence in redacted form may not be unfairly prejudicial to the Plaintiff when used on that basis. However, the Defendant runs the risk that such little weight will be given to the evidence in those circumstances, or that its reliance on the number and general nature of the complaints will not be accepted as showing good faith when the Plaintiff is still left in the position of being unable to answer each of the complaints. 34 It is to be recalled that McClelland CJ in Eq allowed for the exclusion of part of a document "on the ground of irrelevance", and in order to avoid infringement "for no legitimate purpose" of matters of confidentiality "and thus to avoid injustice". In the present case, the Plaintiff has an argument that the identity of the complainants are not an irrelevance, and identifying them has a legitimate purpose to enable him to deal with the issues raised by the complaints. 35 It is in this area that the distinction between the category (1) and (2) documents might assume some significance. In relation to the category (2) documents it does not seem to me that the Plaintiff can have any legitimate complaint, now that it has been agreed that unredacted copies of those documents will be provided. The Plaintiff says that he is unable to work out from the numbers in those documents who the complainants were. That seems to me, however, to be a separate matter from the admissibility of the documents themselves. The Defendant must be permitted to adduce the evidence by the tender of those documents. The Plaintiff can then argue that the weight and significance to be attached to them should be slight because he is not in a position to deal with the matters they raise. It does not seem to me that the documents in category (2) in unredacted form are inadmissible. 36 In relation to the category (1) documents the starting point is that a document must be tendered as a whole and not in part unless part of the document is severable in the way discussed by the UK Court of Appeal in Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 at 536 and subsequently in GE Capital Corporate Finance Ltd v Bankers Trust Co [1995] 1 WLR 172 at 175, and see the discussion about these decisions in Bailey v Department of Land and Water Conservation [2009] NSWCA 100 at [120]-[138], noting that the significance of those decisions in Bailey was in relation to waiver of privilege. 37 Even absent s 135 Evidence Act a Court would be in the position to reject the tender of a document where part only of the document was sought to be tendered and some sort of right not to disclose the other part was claimed. But s 135(a) puts the matter beyond doubt. 38 My preliminary view is that, even if the only reliance of the Defendant is for reliance on the number of complaints and the general nature of them as a basis for issuing the existing Notice under cl 7.3 or any future notice under cl 7.3, that reliance would be unfairly prejudicial to the Plaintiff. Mere reliance on the number of complaints and their general nature would not, it appears to me, be sufficient to provide an answer to any lack of good faith demonstrated by the matters in para 31 of my earlier judgment if those matters are made out. 39 On the present state of the evidence I would not permit the Defendant to rely on the category (1) documents in redacted form. 40 These preliminary rulings are made, contrary to the Plaintiff's submission that they will not assist in the case management or preparation of the hearing of the Motion or any other hearing, for 2 reasons. First, the Plaintiff sought a direction that the Defendant not be entitled to rely on the redacted material (coupled with a requirement that the Defendant provide supplementary material in relation to the category (2) documents). Secondly, they are made to facilitate the more efficient hearing of the Notice of Motion and any subsequent hearings. If either party wishes to supplement evidence already served in relation to the Notice of Motion or otherwise they will be permitted to do so. 41 The preliminary rulings that I make are these:

(a) The evidence relevant to category (2) is admissible in unredacted form;

(b) The evidence relevant to category (1) is inadmissible in redacted form;

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.