Wheelahan v North Coast Area Health Service

LEGISLATION CITED: Health Services Act 1997 ss 10, 17 Industrial Relations Act 1996 ss 105, 106, 106(1), 106(2)

Abboud v The State of NSW (Department of School Education) (1999) 92 IR 32 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Bowman v Ricegrowers Limited (2007) 167 IR 325 English v Aradlay Insurance Brokers Pty Ltd (2005) 145 IR 129 Jozef Banas v State of New South Wales [2003] NSWIRComm 317 King v State Bank (NSW) (No 2) (2002) 126 IR 407 Lane v The Commonwealth Bank of Australia [2000] NSWIRComm 274 CASES CITED: Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381 Patricia Cretney v State of New South Wales [2008] NSWIRComm 131 Pavior-Smith & Anor v The National Mutual Life Association of Australasia Ltd (1999) 91 IR 8 Ross v GN Comtext (Australia) Pty Limited (2000) 107 IR 1 State of New South Wales v Banas (2004) 137 IR 63 Stollery v The Greyhound Racing Control Board (1973) 128 CLR 509 Sydney Water Corporation Ltd and Anor v Industrial Relations Commission of NSW & Anor (2004) 61 NSWLR 661 Truelove v Sydney Water Corporation Limited and anor [2004] NSWIRComm 115 Westfield Holdings v Adams (2001) 114 IR 241

HEARING DATES: 22, 23, 24, 29, 30, 31 July 2008

APPLICANT: Mr P C Moorhouse of Counsel Solicitors: Mr P E Kennedy HWL Ebsworth Lawyers LEGAL REPRESENTATIVES: RESPONDENT: Ms K L Eastman of Counsel Solicitors: Ms V Vinski DLA Phillips Fox

Application under s 106 of the Industrial Relations Act 1996

TABLE OF CONTENTS INTRODUCTION 2 CLAIM FOR RELIEF 4 FACTUAL BACKGROUND 5 The parties 5 Death of patient "C" - March 2002 6 Death of patient "W" - May 2003 8 Ban on applicant - May 2003 9 Review of patient "W" outcome proposed - June 2003 10 New contract - June 2003 11 Review initiated - June 2003 12 Review terms of reference - August 2003 15 Negotiations with reviewers - August 2003 15 September 2003 to February 2004 17 Review undertaken - 13, 14 February 2004 20 March/April 2004 21 Draft review report - May 2004 23 Final review report - July 2004 25 Review report referred to Credentials Committee - August 2004 28 Applicant's complaints against Drs Houlton and Kalmar: August/September 2004 28 Credentials Committee meets - October 2004 29 Credentials Committee recommendations - October 2004 30 Findings regarding complaints against Drs Houlton and Kalmar

• October 2004 32 MDAAC accept Credentials Committee recommendations - November 2004 33 December 2004 34 Applicant returns to work - January 2005 35 Operating lists and mentoring process issues - January to September 2005 35 Limited clinical privileges restored - November 2005 44 Applicant declared unfit; extended leave - December 2005 to October 2006 45 Psychiatric evidence 47 Loss of earnings 50 Compensation for illness 52 CONSIDERATION 52 The informal ban 54 Delay in the review 57 Limiting applicant's privileges where not recommended by report 63 Procedural fairness 65 Conditions for regaining full clinical privileges 77 Alleged failure to restore the applicant to a reasonable level of operating lists 81 Variation of the contract 82 Compensation 83 Compensation for stress and suffering 94 ORDERS 95

1 This matter concerns a claim by a medical practitioner that contracts under which the medical practitioner provided services as a specialist urologist at a public hospital were unfair. The practitioner sought relief under the unfair contract provisions of the Industrial Relations Act 1996 ("the Act"), in particular ss 105 and 106. 2 Briefly, two patients died following nephrectomies performed by the applicant. Nephrectomy is a surgical procedure for the removal of a kidney, either wholly or partially. Following the death of the second patient the respondent area health service instituted a review into the applicant's clinical competence. During the review the applicant agreed not to perform nephrectomies and took unpaid leave. The review was subject to significant delay. The applicant claimed, amongst other matters, that the delaying of, or failing to pursue with expedition, the review into the applicant's clinical competence caused the contract to become unfair. 3 The reviewers were critical of the applicant's technique and made certain recommendations. The recommendations did not extend to a withdrawal of the applicant's clinical privileges that allowed him to perform nephrectomies. The respondent area health service's Credentials Committee, nevertheless, recommended withdrawal of those privileges and proposed a remedial program involving mentoring for the applicant before he could regain his privileges. The Committee's recommendations were implemented. As a consequence, the applicant claimed that the contract was, or became, unfair because of: (a) the respondent's failure to act in a procedurally fair manner in determining to restrict the applicant's clinical privileges following receipt of the agreed review; (b) the subsequent limiting of his clinical privileges in circumstances where the reviewers did not make such a recommendation; and (c) the withdrawal of his credentials in nephrectomy, which prevented him from complying with the requirement of the Credentials Committee to assist in nephrectomies as part of the mentoring process. The applicant claimed that completion of the mentoring requirement of the Credentials Committee was impossible. 4 The applicant resumed work in early 2005 following the extended period of leave. He claimed that on his return to work the respondent failed to provide him with a fair or reasonable level of operating lists. 5 The applicant also claimed that the conduct of the respondent caused him to suffer stress and anxiety. The applicant underwent treatment by a consultant psychiatrist, Dr Warwick Eaton. In December 2005, the psychiatrist certified that, in his opinion, the applicant was unfit for work by reason of anxiety and depression. CLAIM FOR RELIEF

6 The applicant's claim for relief was set out in his second further amended summons: (1) An order varying the fee for service contract of 1 July 2003 between the applicant and the respondent, and to the extent necessary the earlier fee for service contract of 9 February 1999, by inserting terms requiring the respondent, in the event that it refers a question about the competence of the applicant to his professional society for report, to (a) take all steps necessary to facilitate the expeditious delivery of the report, (b) promptly implement any recommendations in the report, (c) accept the report as a full and final determination of the question and initiate no further investigations and seek no further reports thereon, (d) exercise its right to unilaterally vary the applicant's clinical privileges only to the extent necessary to implement a recommendation in the report; (e) thereafter, restore to the applicant any operating lists of the applicant that were suspended pending delivery of the report, his conduct of which is unaffected by recommendations in the report, (f) provide all hospital services, including anaesthesia services, necessary for the applicant's exercise of his clinical privileges; (g) act in a procedurally fair manner in considering and determining any variation to the applicant's clinical privileges as a result of the report; and (h) in relation to any recommendations for remediation which accompany any variation to the applicant's clinical privileges, only adopt such recommendations as are reasonably capable of being carried out by the applicant and act with reasonable expedition and provide reasonable assistance to the applicant in relation to any such recommendations. (1A) An order setting aside the variation to the applicant's clinical privileges notified by letter from the respondent dated 25 November 2004. (2) An order that the respondent pay $570,000 to the applicant. (3) Interest and costs.

The applicant also claimed $15,000 for the illness (and associated symptoms and distress) suffered by the applicant as a result of the alleged unfairness. FACTUAL BACKGROUND

7 John Bernard Wheelahan ("the applicant") was a urological surgeon. The applicant was 63 years of age at the time he made his claim. He graduated in medicine at the University of Melbourne in 1965. He had been a fellow of the Royal College of Surgeons since 1970, and of the Royal Australasian College of Surgeons ("the College") since 1976. Between 1968 and 1999 he held hospital appointments as a urological surgeon in the United Kingdom and Victoria. 8 The respondent was the North Coast Area Health Service ("NCAHS"), an Area Health Service constituted on 1 January 2005 under s 17 of the Health Services Act 1997. It had the functions described in s 10 of that Act in respect of health services in the Coffs Harbour area.

9 The applicant was appointed as a Visiting Medical Officer ("VMO") at Coffs Harbour Base Hospital ("the Hospital") in December 1998. Dr Wheelahan commenced urological practice in Coffs Harbour in January 1999 and commenced performing work pursuant to his VMO appointment at the Hospital in February 1999 under a fee for service contract entered into with the Mid North Coast Area Health Service ("MNCAHS"), the respondent's predecessor. 10 The applicant subsequently accepted a further appointment in 2003 and entered into a service contract for the period 1 July 2003 to 30 June 2008 with NCAHS. The agreement provided that the applicant's clinical privileges were "specialist urology, including laparoscopic procedures", although Dr Wheelahan did not perform laparoscopic procedures, as he was not trained in them. In addition to his role as a VMO, for which he was allocated a weekly operating list and a monthly in-patient clinic for flexible cystoscopies, the applicant also maintained a private practice and operated on private patients at Baringa Private Hospital in Coffs Harbour. 11 Because the applicant has alleged that two of the central reasons why the contract was unfair were because of the delay caused by the respondent in reviewing the applicant's clinical competence and because of the failure of the respondent to provide reasonable assistance in a timely manner to the applicant to regain his clinical privileges, it becomes necessary to chart developments from 2002 to 2006 in some detail. Death of patient "C" - March 2002 12 On 12 March 2002, Dr Wheelahan operated on Mr "C" at Baringa. The operation was a radical (or total) nephrectomy to remove a malignant tumour. Dr Wheelahan lost control of the renal pedicle during the operation and the patient was experiencing severe blood loss.

13 Because of the blood loss and, it appears out of concern for the patient, the anaesthetist, Dr John Blaxland, called in Dr Robert Kalmar, a VMO at Baringa and a VMO General Surgeon at the Hospital. In that latter position, Dr Kalmar was responsible for General Surgery and was clinically privileged to perform urology. Dr Kalmar attended the operation and attempted to take action to control the bleeding. It appears there was disagreement between the applicant and Dr Kalmar about the best way to deal with the patient. Dr Wheelahan resumed control of the operation. Dr Kalmar left the operating theatre. Dr Wheelahan believed that the patient had already exsanguinated by the time that Dr Kalmar arrived in the operating theatre.

14 The patient was transferred to the Hospital where he died. The death was attributed to blood loss. As the patient died at the Hospital it was decided to conduct an audit of nephrectomies performed by Dr Wheelahan for the past three years. While the audit was in progress, Dr Wheelahan said he met with Dr Theresa Beswick and Dr Philip Houlton on 22 April 2002. Dr Beswick was the Director of Medical Services at the Hospital. Dr Houlton was a VMO anaesthetist (and the most senior anaesthetist) and Director of Surgical Services at the Hospital. At the meeting, Dr Wheelahan said Dr Houlton advised him that he would not be allowed to perform any nephrectomies at Baringa Hospital. Dr Wheelahan regarded this as a ban on him performing such work. He took a period of leave. At a meeting between himself and several anaesthetists, including Dr Houlton, at the Hospital on 8 May 2002, Dr Wheelahan was advised the 'ban' would not be proceeded with.

15 In the result, it was decided that, having conducted the audit and having reviewed the nephrectomies done by Dr Wheelahan, there were no grounds to alter the applicant's operating privileges at the Hospital. Dr Wheelahan continued to perform major surgery at Baringa Hospital, although he did not subsequently perform nephrectomies at Baringa whereas he did at the Hospital. Death of patient "W" - May 2003 16 On 7 May 2003, the applicant was performing a partial nephrectomy on a patient, Mr "W", at the Hospital. Complications developed during the operation that caused Dr Wheelahan to remove the whole of the affected kidney. The patient suffered extreme blood loss. The applicant arranged for the patient to be transferred to St. George Hospital in Sydney. The patient later died. 17 As the most senior anaesthetist at the Hospital, Dr Houlton was called into an operating theatre on 7 May 2003 by Dr Blaxland, who was again the anaesthetist in relation to the operation being performed by Dr Wheelahan. Dr Houlton said Dr Blaxland expressed his concern about the patient suffering massive blood loss. Dr Blaxland was reported to have said to Dr Houlton that Dr Wheelahan had refused his suggestion that Dr Kalmar be called in to assist. Dr Wheelahan said that he had refused this assistance because he said he did not have any confidence in Dr Kalmar's skill as a surgeon. 18 Other steps contemplated by Dr Blaxland to have a senior executive of the Hospital intervene, with the support of Dr Houlton, did not eventuate because Dr Wheelahan indicated he had control of the bleeding. 19 On 10 May 2003, the patient, Mr "W", was still in intensive care at the Hospital. He had developed a leakage of bowel contents from the wound, which indicated that a bowel injury had occurred during the operation. 20 On 11 May 2003, the applicant requested the advice of Dr Kalmar, concerning the management of the bowel injury. Dr Kalmar attended the patient and examined some of the x-rays. The applicant discussed the likely diagnosis with Dr Kalmar. The two practitioners disagreed as to the appropriate treatment. Ban on applicant - May 2003 21 On 11 May 2003, Dr Blaxland wrote to Dr Houlton expressing concern regarding the nephrectomy performed by Dr Wheelahan on Mr "W", in particular the amount of blood loss. On 25 May 2003, at a meeting called for another purpose, Dr Houlton raised the nephrectomy performed by Dr Wheelahan on 7 May 2003. Dr Wheelahan was not present at the meeting. Dr Houlton said he raised the incident as he was aware that all attendees knew about the incident, as did every member of the operating theatre staff who were present on the day of the operation. According to Dr Houlton, every VMO present at the meeting agreed that there should not be any further nephrectomies booked for Dr Wheelahan until an investigation into the incident involving Mr "W" had occurred. Dr Houlton instructed the operating theatre booking officer not to take any further bookings for Dr Wheelahan in relation to nephrectomy cases. 22 In late May 2003, Ms Krista Smith, an operating theatre booking clerk at the Hospital, advised the applicant that Dr Houlton had told her not to book any nephrectomy cases until further notice. On 27 May 2003, Dr Robert Kalmar telephoned the applicant to tell him of what Dr Wheelahan described as a "ban" on him performing nephrectomies at the Hospital. He told the applicant that Ms Julia Colvin, General Manager, Coffs Harbour Health Campus was involved and that "She's been told that the Hospital is in danger of being sued if you're not stopped from operating." 23 On 29 May 2003, Dr Houlton attended a meeting with Ms Colvin, General Manager, Coffs Harbour Health Campus and Tracey Peadon, Nurse Manager Critical Care at the Hospital. The purpose of the meeting was for Dr Houlton to report on the outcome of the meeting that had been held on 25 May 2003. He made a strong recommendation that the applicant should conduct no more nephrectomies until a review had been undertaken. It was agreed that the two nephrectomies on the waiting list would not be booked until further notice.

24 Ms Colvin requested "a full clinical report as to the events in the operating theatre relevant to Mr W". Dr Houlton prepared the report and provided a copy to Dr Robert Porter, Area Director of Medical Services. 25 On about 30 May 2003, Ms Colvin forwarded to Dr Porter a copy of a Reportable Incident Brief ("RIB") regarding the incident involving patient "W". According to Dr Porter, RIBs serve to advise the NSW Department of Health of incidents that, amongst other things, affect public health or safety or suggest a system or process problem affecting patient care. Review of patient "W" outcome proposed - June 2003 26 Dr Porter scheduled a meeting with Dr Wheelahan and Dr Beswick following Dr Beswick's return from leave. That meeting took place on 13 June 2003. Dr Porter advised the applicant that the respondent would request an independent review by the Urological Society of Australasia ("the Society"), the peak professional body of urological specialists in Australia, of what occurred in the case of Mr "W" on 7 May 2003. Dr Wheelahan agreed. Dr Wheelahan was requested not to perform any further nephrectomies until such a review was conducted. Dr Wheelahan agreed. Dr Wheelahan complained about the process by which a complaint had been made against him and about the ban imposed on him by Dr Houlton.

27 Dr Porter advised the applicant that if he was unhappy with Dr Houlton's actions he should document his complaints separately so that they might be investigated. The applicant was advised that Dr Houlton had no authority to impose a ban on the applicant and that the applicant could perform all other surgery as normal. 28 During the meeting, Dr Wheelahan inquired how long the review would take. He was advised the review would be carried out according to the "Guideline on the Management of a Complaint or Concern about a Clinician", published by the NSW Department of Health in November 2001 and that it would take two to three months. The Guideline stipulated that the review process should be completed within four to eight weeks of the notification of the complaint or concern.

The applicant said he was distressed about the manner of the making of the complaint about him. He regarded the statement that "the hospital was in danger of being sued" if he was not "stopped from operating" as an allegation of incompetence and found the prospect of working at the Hospital while this allegation was unresolved to be "very stressful". He said he found it difficult to perform his usual work due to this stress. New contract - June 2003 29 By letter dated 16 June 2003 to the applicant, the MNCAHS offered the applicant a further appointment as a visiting medical officer for the period 1 July 2003 to 30 June 2008 in accordance with the terms of the Health Services Act 1997 and "the Mid North Coast Area Health Service agreed Terms and Conditions for the quinquennium". The letter advised the applicant that he was to sign the "service contract" and "TMF contract for liability cover" that were enclosed. The Treasury Managed Fund ("TMF") indemnifies doctors against civil liability for their work in public hospitals.

30 The applicant and the MNCAHS made an agreement in writing entitled "Fee for Service Contract" dated 1 July 2003 for the appointment of the applicant as a visiting practitioner at the Coffs Harbour Health Campus until 30 June 2008. As mentioned earlier, the agreement was for the provision of services as a specialist urologist. In schedule 1 to the agreement it described the applicant's clinical privileges as "specialist urology, including laparoscopic procedures". 31 Clause 3.2 of the agreement provided that: The Area Health Service may review and vary the clinical privileges of the Visiting Medical Officer at any time after advice from the appropriate Credentials Committee in respect of the specified hospital/s in accordance with any applicable Act or regulations, or by-laws in force at the specified hospital(s).

32 On 18 June 2003, the applicant wrote to Dr Beswick stating that he wished to take leave for the month of July 2003. He arranged for another medical practitioner to perform a locum in his practice and at the Hospital. The applicant informed Drs Beswick and Porter that he would prefer to take leave from the Hospital pending the outcome of the Society's review, rather than be subject to a restriction of his clinical privileges. His application for leave was approved. Review initiated - June 2003 33 On 30 June 2003, Dr Beswick wrote to Dr Andrew Brooks in his capacity as the President of the Urological Society of Australasia, Australian College of Surgeons, New South Wales Branch. Dr Beswick made a formal request, on behalf of the Hospital, for a review of an adverse outcome in the treatment of patient "W". The letter confirmed that both the Hospital and Dr Wheelahan welcomed a finalisation of the investigation as soon as possible. 34 On 1 August 2003, Dr Beswick received a response (dated 7 July 2003) from Dr Brooks to her letter of 30 June 2003. Dr Brooks provided the names of two senior urologists, Dr Alan Crosthwaite and Dr Andre Lalak, who the Society recommended to conduct reviews of Dr Wheelahan's surgical procedures. Dr Beswick faxed a copy of Dr Brooks' letter to Dr Porter on 5 August 2003. 35 On 8 August 2003, Dr Beswick sent a letter to Dr Wheelahan, stating she had attached the following documents:

· The Terms of Reference proposed to the Royal Australasian College of Surgery ('RACS') for the investigation;

· A copy of record of meeting between Dr Houlton and Ms Colvin on 29 May 2003; and

· A copy of notes of the meeting held between Dr Wheelahan, Dr Porter and Dr Beswick on 13 June 2006. 36 On 14 August 2003, a further meeting was convened between Dr Porter, Dr Wheelahan and Dr Beswick. During the meeting, the draft terms of reference were reviewed and changes agreed, with the final draft to be sent out to Dr Wheelahan the following day. On 15 August 2003, Dr Wheelahan confirmed his acceptance of the terms of reference sent to him.

37 Dr Wheelahan used the meeting on 14 August to complain about the meeting that took place on 26 May 2003, and what he perceived as the delay in the progress of the investigation. It was Dr Beswick's evidence that words to the following effect were said: Dr Wheelahan: I am considering resigning from my position. My position is untenable because Dr Houlton's comments will continue. No-one advised me the incident was reported or a meeting occurred where the case was discussed. Dr Porter: The discussion that took place on 29 May 2003 was inappropriate if the meeting was convened for another reason, and you were not advised and no-one talked with you. If you wish, we can formally investigate these concerns. This would require you to document your concerns, setting out what you believe has been said about you, by whom and what has happened. Dr Porter: You are able to operate at the Hospital, except we have asked you not to perform nephrectomies until the investigation is concluded. It is your decision that you do not operate at all. Even if you do resign, the investigation will continue on regardless. There may be other problems emerge that as yet have not been identified, for example, equipment failure or system issues. If you do not intend to return to the Hospital you will need to formally request a leave of absence. The Hospital is not able to continue to add your patients to the waiting list if you go on extended leave. We will have to look for a locum to start performing surgery on the patients waiting now. Dr Wheelahan: I am unhappy with the time it is taking for the investigation. Dr Porter: The health service wants this resolved as soon as possible. Delays have occurred outside our control.

Dr Beswick provided a copy of her notes of the meeting to Dr Wheelahan on 3 September 2003.

38 Dr Wheelahan's recollection of what was said at the meeting of 14 August 2003 was as follows: I said: If the review is to be further delayed, I want to return to work with my full credentials. If not, I might as well leave now. I can't continue to practice urology with Houlton, Kalmar and Ross gossiping about me behind my back, and giving me a bad name in the town. Dr Porter: You can't do this. You're able to operate except that you can't perform nephrectomies. I said: I'd prefer to take leave pending the outcome of the review, rather than be subject to a restriction of my clinical privileges by Houlton. He will continue these restrictions, and the criticism behind my back will continue. Dr Porter: If you don't intend to return to work at the Hospital then you must apply for leave. I said: It's been two months since I agreed to the review. I can't carry out my full VMO duties. Dr Porter: Delays have occurred via the College and Society that are outside our control. Review terms of reference - August 2003 39 On 18 August 2003, Dr Beswick wrote to the two nominated urologists, Drs Crosthwaite and Lalak, to undertake the review, attaching the terms of reference agreed with Dr Wheelahan and endorsed by Dr Porter. Those terms were as follows: · review the management of a particular patient who was admitted to Coffs Harbour Base Hospital on 6 May 2003. In particular, the appropriateness of the surgical technique used and the performance of the procedure by Dr Wheelahan;

· advise as to whether once the complication occurred, was the remedial action taken appropriate and adequate;

· review the management of a second patient who was transferred to Coffs Harbour Base Hospital from Baringa Private Hospital following complications of severe haemorrhage on 12 March 2003; and

· discuss with Dr Wheelahan his approach and management of radical Nephrectomies with reference to previous cases and advise the Board of NCAHS via the Medical & Dental Appointments Advisory Committee on the outcomes. 40 In a letter of 14 August 2003 to Dr Porter, the applicant applied for further leave for one month. In a reply dated 22 August 2003, Dr Porter approved the leave. During Dr Wheelahan's ongoing periods of leave, locum urologists were employed intermittently. Negotiations with reviewers - August 2003 41 On 22 August 2003, Dr Porter received a telephone call from Dr Crosthwaite and they discussed arrangements for the review. On 24 August 2003, Dr Crosthwaite sent Dr Porter an email setting out the details of his visit to the Hospital with Dr Lalak. Dr Crosthwaite estimated that the review would require one day of preparation, two days in Coffs Harbour to meet with all the involved parties and one or two days to prepare the report, depending on the complexity of the situation. He outlined the costs of the review, which included a fee of $4000 per day for each clinician, as well as business class travel arrangements, accommodation and meals expenses. Dr Crosthwaite also requested the provision of secretarial assistance whilst at Coffs Harbour. Shortly following receipt of that email, Dr Porter had a discussion with the Chief Executive Officer of the respondent in relation to the proposed fees which Drs Crosthwaite and Lalak had sought. There was a disagreement between Dr Porter and Dr Crosthwaite concerning the fees and other matters, including class of travel, to be charged by the reviewers. In cross examination of Dr Porter, the following exchange occurred: Q. You see that that's a letter from the chief executive officer of the Area Health Service to Dr Crosthwaithe (sic) dated 14 October 2003? A. Yes.

Q. In that letter the Area Health Service agrees to the terms that Dr Crosthwaithe (sic) had put in his email of 24 August 2003 that I took you before? A. Not exactly. Q. You agree with that? A. Not exactly, no.

Q. The Area Health Service agrees to the daily fee, do you agree with that? A. Yes.

Q. And the travel and accommodation to be arranged and paid for by the Area Health Service? A. Yes. Q. And the clerical assistance? A. Yes.

Q. And a rate is set for hourly work outside of the actual days in Coffs Harbour in that letter, do you agree with that? A. The difference is travel and accommodation be arranged in accordance with New South Wales Department of Health official travel policy. Dr Crosthwaithe (sic) required business class travel and the chief executive only agreed to travel at the New South Wales Department of Health policy which, from Melbourne to Sydney, does not include business class. Q. This letter, you see, comes two months after Dr Crosthwaithe (sic) has put the terms that he seeks? A. Yes.

Q. Is that the only matter that was in dispute in those two months? A. What was in dispute?

Q. As to the terms of the reviewers that the question of the class of travel that they would have? A. No. What was in dispute was the fact that when I first spoke to Dr Brooks he agreed to VMO rates. When Dr Brooks wrote the letter of August, some time in August I think, he then said $2,000 a day, one day which, by our calculations, amounted to about $10,000 roughly. Dr Crosthwaite, in a conversation with me at one stage during the negotiations, said we have been talking to people who have done this sort of review before and we expect $4,000 a day, and he then suggested that it would be $5,000 a day - sorry, five days each at least which comes to $40,000, which is very different to what I discussed with Dr Brooks. Dr Crosthwaite, after sending me that email, went on leave and I couldn't contact him for weeks and weeks afterwards. Eventually what happened was I said to the chief executive officer this has gone on long enough, let's just agree to the conditions, it sticks in our craw but we are not going to get the thing resolved otherwise. So, on 14 October I drafted the letter, you will see up there it says "author Dr Robert Porter", I drafted the letter for the chief executive after discussion with him so that we could get the thing underway, conscious of the fact that there had been an untenable delay in it. Okay. September 2003 to February 2004

42 On 11 September 2003, the Acting General Manager of the Hospital, Mr Hampton, received copies of letters of complaint from Dr Wheelahan. The complaints concerned the conduct of Dr Kalmar and Dr Houlton. Dr Beswick commenced a review of the complaints. Also on 11 September 2003, Dr Wheelahan made a further request for leave for the period 15 September 2003 to 15 October 2003. Dr Wheelahan's request for leave was approved on 16 September 2003. 43 The applicant sent a letter of 13 October 2003 to Dr Porter, in which he expressed concern about the delay in the review and asked for a further month of leave for the period 15 October 2003 to 15 November 2003. This request for leave was approved on 16 October 2003 and, at the same time, Dr Wheelahan was informed that the arrangements for the review by Drs Crosthwaite and Lalak had been finalised. 44 In this last respect, I note that a letter dated 14 October 2003 was sent from the Chief Executive Officer of MNCAHS, Mr Terry Clout, to Dr Crosthwaite confirming arrangements for the review. The terms agreed to included two full days at Coffs Harbour, at $4000 per day per clinician, paid upon the completion of the report, with additional time as agreed by Coffs Harbour Base Hospital or the Area Health Service to be paid at $400 per hour upon receipt of invoice. In addition, travel and accommodation was to be arranged by the Area Health Service in accordance with the Department of Health official travel policy and clerical assistance at Coffs Harbour was to be provided by Coffs Harbour Base Hospital. The letter emphasised the desire of the Health Service to proceed as quickly as possible given the delays already experienced. Dr Crosthwaite was asked to contact Dr Beswick to make all necessary arrangements. 45 On 16 October 2003, Dr Beswick sent a letter to Dr Wheelahan concerning Dr Wheelahan's continual referral of patients while on leave to the Hospital for placement on the urological waiting list. Dr Wheelahan was reminded that it was possible for him to recommence surgery at the Hospital, subject to the agreement about not performing nephrectomy surgery. 46 On 31 October 2003, Dr Beswick sent a letter to the applicant requesting further particulars from him in relation to his complaints regarding Drs Kalmar and Houlton. 47 On 4 November 2003, there was a telephone conversation between the applicant and Dr Beswick in which the applicant was again reminded that whilst he was free to perform operations at the Hospital other than nephrectomies, he had decided against such a course. Dr Wheelahan had indicated that a return under the circumstances was "untenable". The applicant also inquired about the progress of the investigation and stated that the delay was unacceptable. Dr Beswick replied, saying that she wanted the investigation progressed as soon as possible but it had been a matter of "sorting through the process and then finalising negotiations, not all in our control." 48 On 14 November 2003, Dr Wheelahan requested a further period of leave, from 14 November 2003 to 15 January 2004. The applicant also stated that he had received no advice about the review. The applicant's request for leave was approved by the Hospital on 20 November 2003. 49 On 17 November 2003, Dr Beswick was requested by Dr Crosthwaite to provide some further documentation relating to the review. Dr Crosthwaite proposed that the review take place on 11 December 2003. The review did not proceed on that date. Dr Beswick's understanding was that the review did not proceed because of "the non-availability of key persons". The documents requested were couriered to Drs Crosthwaite and Lalak on 26 November 2003. 50 On 26 November 2003, Dr Wheelahan provided a written response to Dr Beswick's letter of 31 October 2003, in which she requested further particulars of Dr Wheelahan's complaints against Drs Kalmar and Houlton. 51 On 8 January 2004, Dr Beswick arranged for inquiries to be made of Dr Crosthwaite as to when he proposed that he and Dr Lalak would attend the Hospital to perform the review. Dr Crosthwaite indicated that he would be away on leave from 19 January 2004 for approximately three weeks, but that he would contact Dr Lalak and arrange a date in February 2004, nominally 14 February 2004. 52 On 15 January 2004, Dr Porter received a letter dated 12 January 2004 from Dr Wheelahan in which the applicant requested that a date for the review be nominated within seven days. 53 On 16 January 2004, Dr Michael King, Director of Medical Services for District Hospitals of the then Mid North Coast Area Health Service, sent a letter to Dr Wheelahan apologising for the delay in having the inquiry team operational and stating that Dr Beswick was currently negotiating with the team and that the inquiry was expected to commence in February 2004. 54 On 21 January 2004, Dr Beswick wrote to the applicant and informed him that the review had tentatively been scheduled to take place on 14 February 2004. Dr Beswick also informed Dr Wheelahan that Dr Crosthwaite was on leave until 2 February 2004 and that Dr Crosthwaite would confirm the date of the review on his return from leave. Dr Crosthwaite confirmed the review date with Dr Beswick's secretary on 23 January 2004. Between that date and 14 February 2004 there was an exchange of various information between Dr Beswick and the reviewers and Dr Beswick and Dr Wheelahan. Review undertaken - 13, 14 February 2004 55 On the evening of Friday 13 February 2004, Dr Lalak and Dr Crosthwaite interviewed Dr Bruce Watts and Dr Murtaza Jamnagerwalla, assistant surgeons for the nephrectomies on Mr "C" and Mr "W". On Saturday 14 February 2004, Drs Lalak and Crosthwaite interviewed Dr Beswick, Dr Houlton, Dr Blaxland (accompanied by Ms Sarah Bird, a representative from Dr Blaxland's medical defence association) and Drs Berry, William Ross, Tony Jones and Dr Kalmar. Also on 14 February 2004, Drs Lalak and Crosthwaite had a meeting with Dr Wheelahan, which was held at Coffs Harbour Base Hospital. Dr Wheelahan attended the meeting with a retired urologist, Dr Robert Wines. March/April 2004 56 On 16 March 2004, Dr Crosthwaite received an email from Dr Beswick requesting that he provide her with a time line for the progress of the review. On 2 April 2004, Dr Crosthwaite sent an email to Dr Beswick, stating that he and Dr Lalak were working on the report and hoped to have it completed soon after Easter. On about 24 April 2004, Dr Crosthwaite received a letter from Dr Porter indicating that he was anxious for the matter to be brought to a conclusion and that he would appreciate receiving the report at the earliest opportunity. 57 On 18 March 2004, a meeting was convened by Dr Porter and attended by Dr Porter, Dr Wheelahan and Dr Beswick. The purpose of the meeting was to discuss the review that took place on 13 and 14 February 2004. There was some disagreement about what was said in the meeting but it is apparent that at the meeting:

· the applicant complained about the time taken for the review, and complained about not being told of the reasons for the delay;

· that the applicant was advised that the report of Drs Lalak and Crosthwaite would be provided to "the Area Credentials Committee and then to the CEO for consideration";

· that the applicant inquired how long the Credentials Committee process would take and the reply was that the timeline was not known;

· that the applicant asked what had become of the complaints that he had made against Dr Houlton and Dr Kalmar and was advised that Dr Beswick was continuing with her investigation and would provide a final report to Dr Porter;

· that there was discussion about Dr Wheelahan returning to work. It was the applicant's evidence that he said: The delay with the report is depriving the hospital of a urology service. There's a long waiting list of cases. I'm prepared return to the hospital to perform my duties under the VMO Agreement, pending delivery of the report. If you allow me to return, I'm willing to resign if the reviewers make adverse findings in their report. 58 In relation to the last matter, I am satisfied the applicant was advised that he could return to work at the Hospital but that if he intend to return and perform radical nephrectomy, Dr Porter would "go to the Credentials Committee and then to the Board as I don't have authority to withdraw privileges". It is apparent that what Dr Porter meant was that he would seek the withdrawal of Dr Wheelahan's clinical privileges to perform nephrectomies if the applicant attempted to perform such operations at the Hospital. 59 On 29 April 2004, Dr Porter received a letter dated 27 April 2004 from Dr Wheelahan requesting that he be permitted to take a further period of leave until 30 May 2004 and stating that he had offered to return to perform his VMO duties, but that Dr Porter had rejected this offer and advised that the Area would take steps to withdraw Dr Wheelahan's clinical privileges if he did so. On 30 April 2004, Dr Porter sent a letter to Dr Wheelahan in which he responded to Dr Wheelahan's comments made in his letter dated 27 April 2004 and approved Dr Wheelahan's request to take leave up until 30 May 2004. In responding, Dr Porter clarified that the situation was that Dr Wheelahan had requested to return to VMO duties without restrictions, and that Dr Porter had advised until the review was complete, Dr Wheelahan was free and welcome to return to duties on the condition that he agreed not to perform nephrectomies. Dr Wheelahan had declined the offer and requested leave, which was subsequently approved. Dr Porter went on to say that he then advised that if Dr Wheelahan returned to his VMO duties and attempted to perform nephrectomies, he would have to move to alter Dr Wheelahan's privileges accordingly. 60 Throughout his leave from work at the Hospital Dr Wheelahan had continued to see patients in his rooms, and had continued to perform operations and procedures at Baringa. However, he said he had become depressed in 2003 following the complaint against him. For several periods of time in 2003 and 2004 he said he was unable to perform any work due to his depression. On 31 May 2004 he commenced seeing a psychiatrist, Dr Warwick Eaton. 61 On 6 May 2004, Dr Beswick received an email from Dr Crosthwaite confirming receipt of the earlier letter from Dr Porter and advising that the report was in its last stages and would be available "very soon". Draft review report - May 2004 62 On 13 May 2004, Dr Crosthwaite sent an email to Dr Porter indicating that the review had been completed. On 21 May 2004 Dr Crosthwaite sent a letter to Dr Wheelahan, which enclosed the draft report prepared by the reviewers. On 26 May 2004, Dr Beswick was provided with a copy of Drs Crosthwaite and Lalak's draft report. On or about 30 May 2004, Dr Crosthwaite received a letter from Dr Porter dated 28 May 2004 acknowledging receipt of the draft report. 63 The draft report made criticisms of the surgical technique used by Dr Wheelahan in the two cases it investigated and the rate of complication from blood loss in patients undergoing nephrectomy. The draft report recommended the surgical approach to nephrectomy be fully reviewed, that Dr Wheelahan undergo further training and for Dr Wheelahan to perform nephrectomy procedures with an experienced colleague. 64 On about 10 June 2004, Dr Crosthwaite received a letter dated 7 June 2004 from Dr Wheelahan's solicitor seeking corrections and some changes to be made to the draft report. Following receipt of the letter, Dr Lalak and Dr Crosthwaite reconsidered the draft report and made some alterations that they considered were appropriate. 65 On 10 June 2004, Dr Porter received a letter dated 7 June 2004 from Dr Wheelahan's solicitor, which stated that Dr Wheelahan had received the draft report from Dr Crosthwaite and Dr Lalak and that he accepted the recommendations made in the draft report. The letter stated that the applicant "accepts the recommendations made and looks forward to speedy resolution of all issues, particularly to return to his VMO privileges, with his credentials reaffirmed". 66 On 16 June 2004, Dr Beswick arranged to contact Dr Wheelahan to arrange a meeting with him, Dr Porter and herself to discuss the draft report. Dr Wheelahan indicated that he did not wish to meet, and requested that Dr Porter or Dr Beswick correspond directly with his solicitor. On 18 June 2004, Dr Beswick wrote to Dr Wheelahan confirming that it was necessary for a meeting to occur between him, Dr Porter and herself and requesting that he contact the Hospital to arrange a mutually convenient meeting time. On 6 July 2004, Dr Porter sent a letter to Dr Wheelahan's solicitors reiterating the need to meet with Dr Wheelahan. Final review report - July 2004 67 On 14 July 2004, Dr Beswick received a letter from Dr Lalak attaching a copy of the final report. The applicant received a copy of the final report, dated 7 July 2004, in mid July 2004. In the case of Patient "C", the review concluded that there were two main reasons for the excessive blood loss. The first, the location of clamps used by Dr Wheelahan which exacerbated the bleeding, and the second, that the performance of a nephrectomy early would have provided a much better chance of controlling the bleeding. In addition, there were other contributing factors including the choice of incision, the choice of retractor, the late call for more experienced surgical assistance and apparent lack of communication between surgeon and anaesthetist. 68 In case of Patient "W", the report concluded that there were several causes for the catastrophic blood loss. These were the inappropriate choice of incision, that a retroperitoneal approach should have been used, that a self retaining retractor (which Dr Wheelahan said was not available in Coffs Harbour) would have been of greater assistance, that Dr Wheelahan appeared to use inadequate instruments and a Satinsky clamp for an inappropriate use, that proceeding with the nephrectomy in the presence of uncontrolled (even though minor) bleeding from region of the common bile duct was not wise, and the late call for surgical assistance and poor communication between Dr Wheelahan and the other surgeons and medical practitioners. The report went on and made the following recommendations: · that Dr Wheelahan's surgical approach to performing a radical nephrectomy needed to be fully reviewed; · that the instruments used and surgical management of operative haemorrhage be reviewed. This could be achieved by studying texts and videos and having discussions with colleagues; · that Dr Wheelahan visit a unit performing open nephrectomies to allow a comparison of techniques used; · that operating with a colleague experienced in nephrectomies would be of assistance to Dr Wheelahan developing techniques to minimise blood loss; · that the use of modern self-retaining retractors, enables steady, secure retraction with excellent exposure and allows the surgical assistant to be of greater assistance in some of the more delicate parts of the operation; and · that Dr Wheelahan should consider referring any patient where the nephrectomy is potentially difficult, such as those with large tumours, and especially where veins are involved or extremely vascular, to a urology unit with the appropriate support to undertake such a procedure. 69 On 16 July 2004, a meeting took place involving the applicant and Drs Porter and Beswick to discuss the final report and the recommendations made. At that meeting, Dr Wheelahan agreed with the report's recommendations. Dr Wheelahan also identified some statements made in the final report that he did not consider were grounded on evidence disclosed during the review process. The applicant agreed that he would prepare a written response to the report containing proposals for implementing the recommendations of the report. He sent a letter dated 19 July 2004 to Dr Porter containing his response. 70 On 2 August 2004, a meeting took place between Dr Wheelahan, Dr Porter and Dr Beswick to follow up recommendations and actions. Dr Beswick made notes of the meeting, which accorded with Dr Porter's recollection. It was Dr Beswick's evidence that Dr Porter said to the applicant at the meeting: Your letter of 19 July does not advise of the outcome from reading articles and attending conferences as it relates to your practice, or in reviewing technique, what changes have or will be made. It does not provide any statement of action or advice that I can take to the Medical Appointments Committee to state that the Health Service is confident of the situation and to be able to reassure members of the Committee that the Heath Service is promoting a safe environment. There are two options that you could take: firstly, you can provide further detail to us of actions pertinent to your actual practice and outcomes from the review; secondly, I can take what you have already given us to the Committee for its consideration. What will happen is that the Report and your letter will go the Medical and Dental Appointments Advisory Committee, and that Committee would probably refer the matter to a Credentials Committee. Ultimately, recommendations would be provided to the Administrator, as the current governance role for the Area Health Service.

Dr Beswick recalled that Dr Wheelahan responded in the following terms: I will look at the wording of my letter and make some amendments following our discussion today. I will forward my amendments to you as soon as possible. 71 On 3 August 2004, Dr Wheelahan sent a letter to Dr Porter, which expanded upon the comments made by Dr Wheelahan in his letter dated 19 July 2004. 72 On 11 August 2004, a further meeting was convened between Dr Porter, Dr Wheelahan and Dr Beswick to discuss Dr Wheelahan's letter dated 3 August 2004. Dr David Ellis accompanied Dr Wheelahan to the meeting. At this meeting, Dr Wheelahan confirmed his wish to speak to his letter and the reviewers' final report at the next Credentials Committee meeting. Dr Wheelahan also confirmed that he consented to Dr Brooks being appointed as the visiting external specialist urologist to any Credentials Committee formed at the request of the respondent's Medical and Dental Appointments Advisory Committee ("MDAAC"). Review report referred to Credentials Committee - August 2004 73 On 11 August 2004, following Dr Wheelahan's request in his letter dated 3 August 2004, Dr Porter sent a memorandum to MDAAC, which enclosed the final report of Drs Lalak and Crosthwaite and Dr Wheelahan's letter dated 3 August 2004. The memorandum set out the next stage in the review process, which included the convening of a specialist Credentials Committee, including the appointment of a visiting specialist urologist. Dr Porter suggested that Dr Wheelahan be invited to address the specialist Credentials Committee and after such an address, the Committee would brief MDAAC on any issues relating to Dr Wheelahan's credentials and privileges. The MDAAC could then meet to consider the Credentials Committee advice and any recommendations together with any general issues relating to the performance of radical nephrectomy operations at Coffs Harbour Base Hospital. On 26 August 2004 Dr Porter telephoned the applicant and advised him that the MDAAC would establish a Credentials Committee to consider his case. Applicant's complaints against Drs Houlton and Kalmar: August/September 2004 74 Simultaneously with the investigations into Dr Wheelahan's surgical technique, the Hospital was also investigating the complaints made by Dr Wheelahan against Drs Houlton and Kalmar. On 24 August 2004, Dr Beswick provided a summary of her investigation into those complaints to Dr Porter. In summary, Dr Beswick found that there was no further action required in relation to Drs Houlton and Kalmar, but made a general recommendation that further training regarding policies and procedures should be provided to specialists who performed administrative roles. 75 On 2 September 2004, Dr Porter sent a letter to Dr Wheelahan inviting him to meet with Dr Beswick and himself to discuss the findings of the Hospital's investigation into his complaints against Drs Houlton and Kalmar. A meeting took place on 10 September 2004 attended by Dr Beswick, Dr Wheelahan and his wife who took notes of the meeting. Dr Wheelahan also taped the interview. A copy of the transcript of the tape was provided to Dr Beswick who made a number of handwritten amendments throughout the transcript, specifically where gaps were identified due to failure of the tape. Additionally, Dr Wheelahan sent a covering document titled Minutes of the Meeting 10 September 2004. This was a summary document that contained a number of statements Dr Beswick disagreed with. 76 On 12 September 2004, the applicant wrote to Dr Andrew Brooks of the Society seeking the Society's assistance in restoring his surgical credentials in accordance with the recommendations in the Crosthwaite/Lalak report. In this letter, he expressed his belief that Drs Houlton and Kalmar would maintain their ban on the provision of anaesthesia services to him for their own ulterior purposes and that, in order to avoid a confrontation with them, the administrators of the Hospital were delaying the resolution of the issue about his clinical privileges in the hope that he would resign in frustration. 77 On 15 September 2004, Dr Wheelahan was invited to attend a meeting with Dr Porter and Dr Beswick on 17 September 2004. The purpose of the meeting was to finalise matters relating to his complaints about Drs Kalmar and Houlton. Neither Dr Porter nor Dr Beswick was able to attend the meeting. Unfortunately, Dr Wheelahan did not receive timely notice that Drs Porter and Beswick were unable to attend. Credentials Committee meets - October 2004 78 On 20 September 2004, Dr Porter wrote to Dr Wheelahan and informed him that a meeting of the Credentials Committee had been arranged to occur on 19 October 2004 under his chairmanship. Dr Wheelahan was informed of the membership of the Credentials Committee and invited to address this meeting. 79 On 30 September 2004 the applicant's solicitor wrote to the administrator of the respondent, Mr Chris Crawford, objecting to the delay in resolving the applicant's situation and, on the ground of bias, to the appointment of Dr Porter to the Credentials Committee. In a letter dated 15 October 2004 the applicant's solicitor was advised that Dr Porter would stand down from the Credentials Committee, and that Dr Michael King, the Deputy Director of Clinical Services for the respondent, would replace him.

80 On 19 October 2004, Dr King chaired the meeting of the Credentials Committee, which included one external urologist, Dr P Kovac, an obstetrician, Dr M Brinsmead from Coffs Harbour, a surgeon, Dr Bruce Hodge, a surgeon and Dr Harry Johnston, a physician. The purpose of the meeting, as Dr King perceived it, was to review the report of the specialist urologists and review Dr Wheelahan's credentials as to whether he should continue to perform radical nephrectomies or not. Credentials Committee recommendations - October 2004 81 The meeting of the Credentials Committee commenced at 2.00 pm. The minutes of the meeting show the attendance of Dr Porter until 2.30 pm and the attendance of the applicant from 2.45 pm to 4.40 pm. At the meeting, the Committee resolved to recommend to the MDAAC, among other things, that the applicant's clinical privileges be changed to "specialist urologist excluding all nephrectomy and related procedures that involve dissection of the renal blood vessels". It also resolved to recommend that the applicant: undertakes remediation by:

· Engaging in a mentoring process with a urological surgeon approved by the Royal Australasian College of Surgeons or their delegate, or in the absence of a suitable process by the College, a urological surgeon arranged by Dr Wheelahan and agreed by the Hospital;

· That the mentoring process involve Dr Wheelahan assisting with nephrectomy procedures; and

· That the mentor advise the Hospital of progress so that Dr Wheelahan's credentials can be reassessed by MDAAC and the Credentials Committee at an appropriate time. 82 During the meeting the applicant was advised that the respondent would approach the Royal Australasian College of Surgeons to nominate or approve an appropriate specialist urologist to be a mentor to him. He questioned the practicality of performing nephrectomies under the supervision of a mentor if his credentials for nephrectomy were removed. Dr Wheelahan said Dr Kovac answered his question to the effect of "you can work something out yourself". 83 The applicant sent a letter on 21 October 2004 to Professor David Barr, the chief executive officer of the Urological Society of Australasia, in which he sought advice about the establishment of a mentor arrangement. Professor Barr replied in a letter of 26 October 2004 in which he stated that whilst the MDAAC could ask Dr Wheelahan to participate in a mentor assistance and re-training process as described by the Royal Australasian College of Surgeons, whatever the MDAAC required of Dr Wheelahan was ultimately their responsibility to determine, and not the Society's. However, if the MDAAC did ask Dr Wheelahan to follow some Royal Australasian College of Surgeons process, the Urological Society of Australasia would expect to be consulted pursuant to the Society's Memorandum of Understanding with the Royal Australasian College of Surgeons. Professor Barr also stated that the process could take quite a time, and that this was at odds with what he had understood Dr Wheelahan's view to be, namely that the whole process would be completed before the early part of 2005. He concluded that it was, in any event, all conjecture until the MDAAC formally advised Dr Wheelahan what they required him to do. Findings regarding complaints against Drs Houlton and Kalmar - October 2004

84 On 31 October 2004 Dr Beswick finalised her investigation into the complaints made by Dr Wheelahan against Drs Houlton and Kalmar. Dr Beswick found that:

· the interaction between Dr Kalmar and Dr Wheelahan during surgery presented a differing of opinion on clinical management, and no further action was required; · Dr Wheelahan did not provide specifics regarding disparaging remarks Dr Kalmar had allegedly made, and that Dr Kalmar had made contemporaneous notes that were not disparaging. Dr Besswick found no further action was necessary; · Dr Houlton had provided a clinical report, but that the RIB was most likely written by the then General Manager. Dr Beswick recommended continued training in Patient Safety Program, which would ensure awareness of the correct process when completing the RIB;

· Dr Houlton did discuss the incident with an extended group of people without apparent consultation with senior executives. This included at meetings not specifically called for the purpose of discussing the incident. This likely led to persons' involvement that might be deemed inappropriate and that confidentiality was compromised. No minutes of any meetings or discussions existed and they occurred in the absence of the Coffs Harbour Base Hospital Medical Administrator. Dr Beswick recommended specialists who undertake administrative roles should be appraised of relevant key policies and that they be required to follow these principles. The specific counselling of individuals on this process was going to occur; and · there was no documentation to support the claim that Dr Houlton had advised the Executive that Dr Wheelahan had been negligent or that Dr Houlton had placed a 'ban' on Dr Wheelahan's work at the Hospital. Dr Houlton had advised the Booking Officer prior to discussions with Senior Managers of the Hospital not to book further nephrectomies but this was a response to the need to implement a safe environment. Dr Beswick recommended that specialists who undertake administrative roles should be appraised of relevant key policies and procedures.

MDAAC accept Credentials Committee recommendations - November 2004

85 On 2 November 2004, Dr Porter attended a meeting of the MDAAC during which the Credentials Committee recommendations made on 19 October 2004 were accepted. 86 On 25 November 2004, Dr Porter wrote to Dr Wheelahan informing him of the outcome of the MDAAC and Credentials Committee meetings, including the change to his privileges. Dr Porter asked Dr Wheelahan when he intended to return to work. Also on 25 November, the applicant sent a letter to Dr King in which he suggested two methods of achieving the aims of the Credentials Committee in its recommendation for mentoring. Dr King acknowledged receipt of the letter on 29 November 2004 by email. This letter also set out Dr Wheelahan's concerns regarding what he perceived as a delay by the Hospital in implementing the Credential Committee's recommendations and his concerns that the Royal Australasian College of Surgeons may not offer an appropriate mentoring process. 87 On 29 November 2004, Dr Porter received an email from Margaret Bennett, the General Manager of the Hospital, which attached the letter from Dr Wheelahan to Dr King dated 25 November 2004. December 2004 88 On 3 December 2004 the applicant received the letter dated 25 November 2004 from Dr Porter, together with a copy of the minutes of the Credentials Committee and a replacement for the page of the agreement on which appeared the schedule containing the statement of the applicant's clinical privileges. The effect of the replacement page was to change the applicant's clinical privileges from "specialist urology, including laparoscopic procedures" to "specialist urology, excluding all nephrectomy that involves dissection of the renal blood vessels". 89 The applicant noted that Dr Porter's letter said "In relation to recommendation 3 [which related to the mentoring process], I will ask Dr Theresa Beswick to convene a meeting between yourself, Dr Bill Ross (Head, Department of Surgery), Dr Michael King and she to discuss progress… I will ask Dr Beswick to ensure that at the meeting there is an agreed pathway for your professional development and for reporting progress". 90 In December 2004, Dr Beswick telephoned Dr Ross and attempted to arrange a meeting between Dr Ross, Dr Wheelahan, Dr King and herself. During the conversation, Dr Ross declined to attend such a meeting. Shortly after the telephone conversation with Dr Ross, Dr Beswick informed Dr Wheelahan during a telephone discussion that Dr Ross had declined to attend. Dr Beswick suggested Dr Wheelahan talk with Dr Ross himself. Applicant returns to work - January 2005

91 On about 5 January 2005, Dr Beswick telephoned an alternate surgeon, Dr Hodge, to invite him to meet with Dr Wheelahan, Dr King and herself. Dr Hodge was unable to attend, as he was on leave until 17 January 2005, which would lead to a significant delay. A meeting was subsequently arranged with Dr Wheelahan, Dr King and Dr Beswick for 12 January 2005. In the meantime, on 22 December 2004 the applicant sent a letter of that date to Dr Beswick in which he noted that he had not received a reply to his suggestions for mentoring in his letter of 25 November 2004 to Dr King, and that he had not heard from Dr Beswick as foreshadowed in Dr Porter's letter of the same date. He also told Dr Beswick that he would be returning to the Hospital from leave as from 1 January 2005, and asked her what elective lists he would be allocated. Operating lists and mentoring process issues - January to September 2005 92 On 10 January 2005, Dr Beswick wrote to Dr Wheelahan, confirming that he could return to work on 1 January 2005 and reiterating to him the various administrative matters that had to be addressed before it would be possible to allocate theatre time to him. Dr Beswick advised the applicant that he would be returning to work under the recommendation of MDAAC, namely, to not perform nephrectomies. Dr Beswick also informed Dr Wheelahan that a meeting with Dr King would be scheduled. On 10 January 2005, the Booking Officer advised Dr Beswick that Dr Wheelahan had delivered 54 Requests for Admission. 93 On 12 January 2005, a meeting took place between Dr Wheelahan, Dr King and Dr Beswick. Dr Wheelahan expressed his concern about the mentoring process and questioned how it could be achieved. The applicant said he "had a problem with Dr Porter's involvement in the Credentials Committee as Dr Porter has promised he would not participate" and that been there had been "an enormous delay from the time of receipt of the report to the final letter of the recommendations." 94 Dr King provided an account of the remainder of the conversation with Dr Wheelahan on 12 January 2005 that the applicant does not appear to take issue with: I said: I understand that this is a difficult situation as there is no precedent. I do not think that the Urological Society has ever undertaken such a process. Dr Beswick: It is likely that the New South Wales Medical Board will have undertaken such a process and other colleges.' I said: 'John, what are your plans in relation to your future career? Do you want to do nephrectomies? Dr Wheelahan: Although I may only work a few more years, I do want to have my full privileges. I have undertaken assistance in nephrectomies with Dr Kurl in Lismore Base Hospital. I haven't gone into details with him but just given him a thumbnail sketch that I want him to act as an assistant. Dr Beswick: In order to progress supervision, why don't you contact senior colleagues in Sydney? Dr Wheelahan: I have 2 people in mind, one who was retired and who is thus unsuitable but I also note that a colleague in Sydney contacted the reviewers and he was told that the second point in relation to assistance was not appropriate and it was not their intent that privileges be altered. Dr Wheelahan continues and says: All I need is to implement the recommendations of the review and to take into consideration that the reported intent was not to alter privileges. I said: Essentially 2 people are dead. There is a loss of confidence in you John performing nephrectomies by the Appointments and Credentialing Committee. John, you have the option to accept the schedule and not to perform nephrectomies but to perform other procedures and not worry about them entering process in regarding credentialing in relation to nephrectomies. John, there is a lot of time, stress and work on your behalf in order to do say 6 nephrectomies a year. Dr Wheelahan: There was malicious intent in relation to the original instigation of the complaint. Dr Beswick: If it was purely malicious, then the process would not have continued to this extent. The review made findings on specific issues around technique and blood loss and the process of mentoring was in place and had commenced 12 months before when the first patient died. When the second death occurred, action was required. I said: I certainly do not feel malicious towards you John but would not feel comfortable with you performing nephrectomies in the future. Dr Beswick: Why do you want to go through the process and get nephrectomy privileges? The number of nephrectomies you do is very small, being only about 6 per year. It is not a major issue really to hand over to a colleague. John, as you know, competency requires not only skill but adequate numbers. In order to pursue mentoring you will need to develop a process and you will need to contact the relevant colleagues to acquire advice. Dr Wheelahan: The reason I am pursuing this is because the original complaint was malicious. I want a transcript of the Credentials Committee meeting. I said: I am happy for you to have it taped, although some of the tape quality is poor. Dr Wheelahan: I believe that the recommendations from the review should be implemented. Dr Beswick: But how do you resolve the issue in relation to the technical issues raised, other than by direct observation by a party to confirm your technical ability? I said: Two people have died, there is a review by 2 urologists that has been done and recommendations have been made which have led to a remediation process reviewed by the Credentialing Committee. These processes are not an emotive process. Dr Wheelahan: I want to progress with re-credentialing for nephrectomy. I said: Theresa and I will need to draw up the process to present to you and then get approval from the Credentialing Committee. Dr Wheelahan: I will not agree to a new schedule today. Dr Beswick: I've sent you out a letter in relation to your return from leave. I suggest John that you seek some advice and you return the signed schedule by close of business on Friday, 14 January 2005. If not, I will reissue the notice that you are not available and that of course will give rise to potential confusion.

Dr Beswick essentially agreed with Dr King's account of the conversation. 95 On 14 January 2005, Dr Beswick was forwarded by Ms Bennett a facsimile received from Dr Wheelahan attaching a signed copy of the re-issued Schedule to the Contract, setting out Dr Wheelahan's revised clinical privileges, namely that of specialist urology excluding all nephrectomy that involves dissection of the renal blood vessels. 96 Dr Beswick had made inquiries previously as to what operating times could be allocated to Dr Wheelahan upon his anticipated return to work. After she received the signed re-issued Schedule to the Contract from Dr Wheelahan, dated 14 January 2005, Dr Beswick confirmed availability. On 17 January 2005, she contacted Dr Wheelahan and informed him that he had been allocated a fortnightly theatre session commencing on 14 February 2005.

97 The applicant said his session on 28 February 2005 was cancelled by the Hospital due to an insufficiency of in-patient beds. A period of reduced activity in the Hospital for two weeks at Easter, the public holiday on Anzac Day and approved conference leave left him with only four sessions in the first five months of 2005. The applicant complained that this was a significant reduction in the number of sessions he had prior to the making of the complaint about him. In May 2003, at the Hospital he performed three half day lists, one all day list and two lists of endoscopies under local anaesthetic. This workload was, the applicant said, typical of his workload in the months prior to May 2003. 98 By letter of 31 January 2005 and email of 9 February 2005 to Dr Beswick the applicant requested an additional list for bladder tumour cases and a regular flexible cystoscopy list. On 15 February 2005 he received an email from Dr Beswick stating that no additional lists or regular flexible cystoscopy list would be available in the remainder of the financial year. 99 Dr Beswick said in her affidavit evidence that in discussions on 17 January 2005, Dr Wheelahan advised he would be away on 14 February 2005. Dr Beswick indicated she would investigate the option of using vacated operating lists in the next two weeks. The Theatre Nurse Unit Manager advised of a list available on 27 January 2005 for flexible cystoscopy. Dr Wheelahan operated on 28 February 2005, 14 March 2005, 11 April 2005 and then fortnightly until the end of June 2005. Dr Beswick said there was reduction in surgery over Easter 2005 for all surgeons, including Dr Wheelahan, except those few surgeons with extensive waiting lists. In August 2005, Dr Wheelahan commenced weekly lists, a number of which were cancelled due to insufficient patients, specifically flexible cystoscopy patients.

100 As to the additional list for bladder tumour cases and a regular flexible cystoscopy list, Dr Beswick said she informed Dr Wheelahan that it was not possible for the Hospital to set up a regular flexible cystoscopy list in the financial year but that the Hospital would, wherever possible, utilise vacated lists to allocate flexible cystoscopy lists depending on patients on the waiting list. By this time, Dr Beswick said Ms Krista Smith, Theatre Booking Officer, had already approached Dr Wheelahan with some potential dates on which he could perform such a list. 101 In late April 2005 Dr Wheelahan met with Ms Bennett, to discuss his lack of operating lists. Ms Bennett indicated that the Hospital was committed to restoring the applicant's lists, but after such prolonged leave his lists could not be immediately reactivated. Ms Bennett advised the applicant that the Hospital needed to allocate time and space and would do that as soon as possible. Ms Bennett said a significant problem at present was the shortage of anaesthetists.

102 On 23 February 2005, the applicant had sent an email to Dr King seeking advice about the outcome of his enquiries into a process for mentoring. On 4 March 2005 Dr King replied that he was still in the process of trying to find a path through the mentoring, that he apologised for the delay and would contact Dr Wheelahan the following week. 103 On 17 March 2005, the applicant telephoned Dr King who told the applicant he had spoken to someone at the Medical Board of New South Wales ("MBNSW"). On 21 March 2005 Dr Wheelahan said he spoke to Dr Alison Reid at MBNSW. The applicant's evidence was that Dr Reid said words to the following effect: The Medical Board may agree to undertake an assessment under the performance assessment provisions of the Medical Practice Act. The process is non-disciplinary. There would be no re-examination of cases that led to the notification about you to the Board. The whole of your practice would be examined. There is precedent for assessing particular operations and mentoring. Your Area Health Service would need to allow you to perform nephrectomy to allow assessment or mentoring on it. The Medical Board has no jurisdiction over Area Health Services, so that a finding by the Board is not enforceable. 104 On 28 March 2005 the applicant sent Dr King a further email seeking advice about the process for mentoring. Dr King sent the applicant an email on 29 March 2005 describing his contact with the MBNSW. In that email Dr King said that in order to initiate the process the Board would need to be notified that there was a concern regarding Dr Wheelahan's ability to perform nephrectomies. If the Board viewed the concerns as significant then they would perform a peer group assessment of Dr Wheelahan's practice, which would include all surgery and consultations. The Board would then consider the deliberations of the peer group, and make a determination of Dr Wheelahan's surgical practice, including specifically nephrectomies. Dr King queried whether the applicant would want an assessment of his whole practice, as a negative outcome could result in the Board finding that Dr Wheelahan could not perform certain surgery and subsequently enforcing such a finding through his registration. In addition, even if the Board was to make a positive finding, it did not necessarily follow that the MDAAC would agree that Dr Wheelahan was able to perform nephrectomies. Dr King considered that pursuing this path was an 'inherent risk,' but had no other suggestions. He again apologised for the delay in sending his communication. 105 Dr Wheelahan sent a letter dated 5 April 2005 to Dr King expressing his concern about participating in an assessment of his credentials by MBNSW when the respondent had not accepted the recommendations in the assessment by Drs Lalak and Crosthwaite. In this letter the applicant asked Dr King two questions: (1) Will the MDAAC and Area Health Service agree to be bound by any decisions of a professional review process and/or mentoring agreed to by the Medical Board or the Royal Australasian College of Surgeons? (2) Could you please ask the MDAAC if it is willing to restore my credentials so that mentoring can take place?

106 Dr. King acknowledged the applicant's letter by email on 12 April 2005 and stated that the letter had been presented to the MDAAC. On 10 June 2005 the applicant spoke to Dr King by telephone and was told that his letter had been put on the agenda for the MDAAC meeting on 21 June. On 24 June 2005 Dr King telephoned the applicant and advised him that his letter was received by the MDAAC but there was no discussion about it; that Dr King had been asked to step out of the matter and it was going to be dealt with by Dr Beswick, David Hutton and Denise Fletcher. David Hutton was the respondent's Director of Clinical Governance. Denise Fletcher was the respondent's Director of Clinical Operations. 107 On 13 May 2005, Ms Bennett received a letter from Dr Wheelahan concerning the requirement that he undergo retraining. In this letter, Dr Wheelahan informed Ms Bennett that he had arranged to perform two renal surgeries and that he had invited Dr Bill Lynch, the Chairman of the Board of Urology of the Royal Australasian College of Surgeons, to attend to observe surgical technique, as well as another senior urologist. Dr Wheelahan requested that he be provided with theatre time on 3 June 2004, for the performance of the surgeries. 108 On 19 May 2005, Ms Bennett sent a copy of Dr Wheelahan's letter dated 13 May 2005 to Denise Fletcher, Dr David Hutton, Dr Beswick, Kylie Kearns, Executive Assistant, and Mr Crawford. In the email, Ms Bennett requested that a teleconference take place between the email recipients to discuss, amongst other things:

· The claims made by Dr Wheelahan in relation to the reinstatement of his privileges;

· The practical implementation of the Credentials Committee requirement that Dr Wheelahan undertake retraining in relation to nephrectomy procedures; and

· The visit from Dr Lynch, proposed by Dr Wheelahan to take place on 3 June 2005.

109 Dr Beswick said she was made aware, via copy of the letter dated 13 May 2005, of Dr Wheelahan's intention to have surgeon Dr Bill Lynch come to Coffs Harbour to observe him undertake a pyeloplasty at the Hospital and a nephrectomy at Baringa. On 19 May 2005, Dr Beswick participated in the teleconference. Dr Wheelahan's proposal was discussed. Dr Beswick said Dr Wheelahan had not discussed his proposal with the Hospital prior to sending his letter regarding such arrangements. From this meeting Dr Beswick said specific tasks were to be undertaken, namely, she was to confirm the arrangement for the procedure with Baringa and confirm the status of Dr Wheelahan's privileges. Dr Hutton was to clarify the arrangement with Dr Lynch of the proposed visit. 110 On contacting Dr Wheelahan to discuss arrangements for credentialing Dr Lynch for his visit, it appeared to Dr Beswick that Dr Lynch would not be available and the cases were cancelled. On contacting Baringa, they advised Dr Beswick they had agreed on the understanding that Dr Lynch would be the primary surgeon with Dr Wheelahan observing. Dr Wheelahan did not approach the Hospital regarding future dates. Due to changes in NCAHS, following the restructure, the matter of establishing the mentoring process passed to Ms Fletcher from May 2005, with involvement of Dr Hutton. 111 On about 27 September 2005, Ms Bennett was provided with a copy of a letter from Dr John Quinn, Executive Director for Surgical Affairs, Royal Australasian College of Surgeons, to Dr Hutton, dated 12 September 2005. The letter related to the retraining of Dr Wheelahan and the meeting of conditions for reinstating Dr Wheelahan to full surgical privileges. The letter stated that because the Urological Society of Australasia controlled training of Urologists, the College had asked that Association and the Society itself to discuss with Dr Wheelahan ways that his training and experience could be gained and then an assessment made. However, it was the understanding of the Royal Australasian College of Surgeons that there were geographical difficulties and other problems in obtaining sufficient exposure, training and assessment of Dr Wheelahan's surgical abilities for nephrectomy surgery. In addition, Dr Quinn expressed the view that the Area Health Service was entitled to limit the credentials of specialists working in their institutions, and noted that this had been done by the Area Health Service who said it would assess Dr Wheelahan for re-credentialing if certain conditions were met. Dr Quinn concluded that if the conditions were met it would be incumbent on the Area Health Service to reassess the credentialing. If the conditions were not met, then the Area Health Service could maintain the limitations on credentials. Limited clinical privileges restored - November 2005 112 Dr Beswick said in her evidence that as a result of discussions with Dr Lynch on the mentoring process and an agreed plan of proctoring, on 14 November 2005 she wrote to Mr Crawford in his capacity as the Chief Executive of the respondent. Dr Beswick requested that MDAAC consider extending Dr Wheelahan's clinical privileges to include the performance of nephrectomy, including the dissection of renal blood vessels, on the basis that the performance of nephrectomy by Dr Wheelahan be under the mentoring process for elective surgeries with supervision. This was to enable a process of mentoring to be established, she said. The actual means of mentoring had not been agreed at this stage. 113 On 17 November 2005, at a meeting of MDAAC, it recommended the re-establishment of Dr Wheelahan's privileges in radical nephrectomy under the condition that these procedures be performed under a proctoring arrangement set up by the Urological Society for elective procedures only. Mr Crawford formally approved this recommendation. Dr Wheelahan's solicitor was advised of this development in a letter dated 13 December 2005. The change in the applicant's clinical privileges was not made at his request, or with his prior knowledge. 114 Dr Beswick referred to the challenges associated with proctoring, which involved finding suitable patients to be operated on at the Hospital and insufficient numbers to make any proctoring process valid, versus the logistics of arranging for Dr Wheelahan to operate on another surgeon's patients elsewhere. 115 In his affidavit evidence Dr Wheelahan stated: In my opinion, completion of the mentoring requirement of the Credentials Committee was impossible. Whilst fellow urologists may have been willing to allow me to observe them in the performance of procedures, they could not permit me to assist them in procedures for which I had no credentials. The withdrawal of my credentials in nephrectomy prevented me from complying with the requirement of the Credentials Committee to assist in nephrectomies as part of the mentoring process. I have endeavoured to follow the recommendations of the report. I sent a letter dated 28 July 2005 to Dr Bill Lynch of the College in which I described the steps I had taken to comply with the recommendations in the report. Applicant declared unfit; extended leave - December 2005 to October 2006

116 On 7 December 2005, Ms Bennett received a letter from Dr Wheelahan, in which he requested that he be permitted to take a period of leave from 14 December 2005 to 10 January 2006. The respondent approved this leave request. At this time Dr Wheelahan said his health was poor and the volume of patients in his practice had declined significantly. He decided to cease practice. 117 On 14 December 2005, Dr Eaton certified that, in his opinion, the applicant was unfit for work by reason of anxiety and depression. 118 Notwithstanding Dr Eaton's certificate, after a period of leave in late December 2005 and early January 2006 the applicant performed work that had already been arranged for January 2006. In his opinion, it would have been unfair to patients and irresponsible of him to cancel the patients' appointments in this period at short notice. He took a pre-arranged holiday for four weeks commencing in February 2006. 119 On 14 March 2006, Ms Bennett received a letter from Dr Wheelahan in which he requested a further period of "extended leave", commencing on 14 March 2006. Dr Wheelahan did not provide a return date. On 25 May 2006, Ms Bennett received a letter dated 18 May 2006 from Dr Wheelahan to Dr Beswick enclosing a medical certificate from Dr Eaton dated 4 April 2006. The medical certificate stated, amongst other things, that Dr Wheelahan was 'unfit to perform his professional duties between 11 January and 11 July 2006'. 120 On 25 May 2006, Dr Wheelahan attended Ms Bennett's office. Ms Bennett said in her evidence a conversation occurred to the following effect: Dr Wheelahan: I have closed down my practice, although it could be started up again with difficulty. I have made arrangements for Dr Morrisey to assume care of my wait listed patients, although I have not withdrawn my services altogether as I have not resigned from my appointment. My current sickness is directly related to the stress impact of the unresolved legal case. I would like access to my personnel files. Here is the medical certificate. I said: I will take advice on the request for file access and notify you within a few days. I do need a clear indication of your plan by 10 July, so that a long term locum/permanent recruitment can commence. Dr Morrisey is working too hard, and obviously the on call roster cannot be supported. Because of the impact on patient care, the service [NCAHS] cannot allow a repeat of a protracted leave scenario. I will issue a memo to all relevant staff/VMOs so that you are not contracted whilst on sick leave.

121 On 7 July 2006, Ms Bennett received a letter from Dr Wheelahan dated 2 July 2006, advising, amongst other things, that he was on sick leave on a 'month-by-month basis' and referring to his efforts to find a replacement urologist. 122 On 13 July 2006, Mr Geoff Hampton, Acting General Manager of Coffs Harbour Health Campus, sent a letter to Dr Wheelahan responding to Dr Wheelahan's letter dated 2 July 2006 and requesting that either Dr Wheelahan or his treating practitioner indicate the likely length of sick leave noting that his last sick leave certificate ended 11 July 2006. 123 On 7 September 2006, Ms Bennett sent a letter to Dr Wheelahan referring to the letter dated 13 July 2006 from Mr Hampton and seeking confirmation by 15 September 2006 as to whether Dr Wheelahan was likely to return to work within the next three weeks and confirmation that he accepted the position of the respondent to recruit a urologist. 124 On 13 September 2006, Ms Bennett received an email from Dr Wheelahan that attached a letter dated 12 September 2006 stating, amongst other things, that he had seen his treating doctor, Dr Eaton, in July 2006 and had requested a medical certificate from him; that Dr Eaton was overseas and did not return until 3 October 2006 and requesting a further extension of leave until mid-October 2006. 125 On 15 September 2006, Ms Bennett sent a letter to Dr Wheelahan seeking that by 9 October 2006, Dr Wheelahan confirm whether he was able to return to work by 16 October 2006 and advising that if not, the respondent would promptly recruit a urologist for his position and that the respondent would give three months' notice to Dr Wheelahan, on about 16 October 2006, of the termination of his contract. Psychiatric evidence 126 I note that Dr Eaton certified that Dr Wheelahan was unfit for work from 14 December 2005 to 10 January 2006, 11 January 2006 to 11 July 2006, 11 July 2006 to 11 January 2007, March 2007 to September 2007 and September 2007 to January 2008. In his evidence Dr Eaton stated: I have been treating the applicant, Dr John Wheelahan, since I first saw and assessed him on 31 May 2004. On each of the occasions he consulted me, he presented with the symptoms of depression and anxiety referred to in my report dated 12 January 2008. I quote from that report: … Dr Wheelahan has been unfit to perform his full time work, and although I did not give him a certificate until December 2005 because of the treatment rationale, he could be deemed to have been unfit for full time work as a result of his symptoms on 31 May 2004. These symptoms of depression and anxiety are indeed a reaction to the situation in his relationship with the Area Health Service. A situation which obviously was a loss with massive uncertainty and his view a situation in which he was not being treated decently and fairly. On each occasion Dr Wheelahan consulted me, he presented with the symptoms of depression and anxiety. I certified him unfit to perform his professional duties for periods following such consultations for the same reasons expressed in my report dated 12 January 2008. He was unfit to perform his professional duties because of his symptoms of depression and anxiety which were "a reaction to his situation in his relationship with the Area Health Service". 127 Dr Doron Samuell, a Specialist Clinical Psychiatrist, met with the applicant on 26 March 2008 for the purposes of preparing a report for the respondent in these proceedings. There was some suggestion by Dr Wheelahan that the consultation lasted only 50 minutes, and had been rushed through towards the end. In his report, Dr Samuell formed the opinion that Dr Wheelahan was psychiatrically well and had no significant symptoms or psychiatric illness, although he did acknowledge that Dr Wheelahan was taking antidepressants at the time and, therefore, might have be in a "treated state". In Dr Samuell's opinion, Dr Wheelahan was living a life free from impairment, but said it was unclear how long the applicant had been free from psychiatric illness. As Dr Samuell had not seen the applicant at the time of his allegedly greatest distress, it was difficult for him to comment retrospectively about Dr Wheelahan's diagnostic issues and could only assess him contemporaneously. In cross-examination, Dr Samuell conceded that Dr Eaton's documentation of Dr Wheelahan's contemporaneous symptoms should be relied upon.

128 In his report, Dr Samuell commented on the opinions of Dr Robert Wade and Dr Paul Kornan, Consultant Psychiatrists who had previously prepared individual reports on Dr Wheelahan for the purposes of an insurance claim. The reports were attached to the affidavit of Dr Samuell tendered in proceedings, but the psychiatrists were not called as witnesses, and the applicant was not afforded the opportunity to cross-examine them on their opinions. I note that each psychiatrist only met with the applicant on one occasion. Dr Wade met with the applicant on 4 May 2006 and provided his final report on 30 May 2006. The report found that Dr Wheelahan was suffering from an adjustment disorder, that his recovery would be delayed by the ongoing dispute, but that the disorder did not prevent him from working fulltime as a urologist. Dr Wheelahan had admitted that he was not very depressed during his interview and attributed that to antidepressants and that he had had a week of leave. Dr Wade went on to express his opinion that the applicant did not present any prominent anxiety or depression during the consultation and that any symptoms of the disorder were mild. 129 Dr Kornan saw Dr Wheelahan on 17 April 2007 and furnished his report on 18 April 2007. At the time of the consultation, Dr Wheelahan had not worked at the Hospital since April 2006. Dr Kornan found that Dr Wheelahan had an adjustment disorder with anxiety and depression, and in overall terms considered that the applicant's condition was of mild severity, but at the upper level of mild severity. The report stated that the applicant was not currently undergoing any treatment and was not on medication. Dr Kornan concluded that Dr Wheelahan's psychiatric state did not prevent him from working and performing his usual duties.

130 There was a conflict of evidence regarding the extent to which the applicant's mental illness prevented him from performing work. All four psychiatric opinions found that Dr Wheelahan suffered from an adjustment disorder, with depression and anxiety, but only Dr Eaton found that the applicant was unfit for work. The weight of the evidence, however, falls in favour of Dr Eaton's opinion. Dr Eaton made the initial diagnosis of Dr Wheelahan's adjustment disorder with anxiety and depression and was his ongoing psychiatrist. The three other psychiatrists only met Dr Wheelahan on one occasion and for the purposes of preparing a report for an insurance claim or court proceedings. Whilst I do not question the professional ability of Dr Wade, Dr Kornan and Dr Samuell to assess Dr Wheelahan's mental health, I am inclined to accept that Dr Eaton, who had an ongoing relationship with the applicant, was in a better position to assess the extent of the applicant's disorder and, in turn, to determine whether he was fit to perform work. 131 In addition, Dr Eaton saw the applicant at the height of his disorder and it was readily conceded by Dr Samuell that the contemporaneous notes of Dr Eaton regarding the applicant's condition should be relied upon. I also note that Dr Wheelahan was on medication for both his consultations with Dr Wade and Dr Samuell, and that Dr Samuell himself acknowledged that the applicant was in a "treated state" at the time of his consultation. Finally, the fact that the applicant has only had the opportunity to cross-examine Dr Samuell on his evidence, as well as the fact that there is no evidence the other two psychiatrists had complied with the expert witness Code of Conduct, leads me to accept the evidence of Dr Eaton regarding the applicant's fitness for work.

Loss of earnings 132 The applicant claimed loss of his Hospital earnings from March 2004 until the end of the five-year contract, namely, 30 June 2008. This was the difference between the sum of $160,000 per annum (being what the applicant claimed was approximately his average Hospital earnings in the preceding two financial years to 30 June 2003) and the payments actually received from the respondent during that period. 133 The applicant claimed that the unfairness alleged had led to these lost earnings on either of two alternative bases. Firstly, on the basis that by March 2004 a period of over nine months had expired since the original agreement to conduct the independent review by Drs Crosthwaite and Lalak. By that time, it was submitted, any review which had been conducted in accordance with the respondent's policy statement or within any reasonable timeframe, and including if appropriate (which was not admitted) any subsequent consideration of the applicant's credentials and any steps required to regain those credentials, should have been completed. On that basis, it was submitted, the combined effect of the delay and other unfairness was that by March 2004 the applicant had not, but should have, had his full credentials confirmed, or alternatively had not, but should have, regained his full credentials.

134 Secondly, on the basis that the unfairness that was alleged so affected the applicant that it caused his illness and unfitness to work from 31 May 2004. On this basis, it was submitted, the applicant would not be entitled to any loss of earnings prior to that date, as there is no evidence that he was unfit to work prior to that date. 135 The applicant did not perform services at the Hospital from July 2003 until early 2005 except on an emergency basis. The loss of income from the Hospital for the three months from 1 April 2004 to 30 June 2004 was claimed to be $40,000.

136 In addition, the loss of income from the Hospital for the financial years from 1 July 2004 to 30 June 2008 was represented as follows: Average Hospital Earnings Less Actual Hospital Earnings Equals Net Loss of Earnings 2004/2005 $160,000 $49,633 $110,367 2005/2006 $160,000 $53,982 $106,018 2006/2007 $160,000 Nil $160,000 2007/2008 $160,000 Nil $160,000

It was claimed that the applicant's total net loss for the period was $576,385. Compensation for illness

137 The applicant claimed that the medical evidence in this case was consistent with demonstrating that the applicant suffered from an adjustment disorder with anxiety and depression. It was submitted that if the Court were to find that the relevant conduct of the respondent meant that the contract was unfair, then it would be appropriate to award a discrete amount of $15,000 to compensate for the illness (and associated symptoms and distress) suffered by the applicant as a result of that unfairness. CONSIDERATION

138 The applicant submitted there were six ways in which the contract was, or became, unfair because it permitted certain conduct by the respondent, or because of conduct of the respondent during the term of the contract, as follows: (i) the informal ban or restriction on the applicant performing nephrectomies which was implemented with effect from May 2003; (ii) the delaying, or failing to pursue with expedition, the review into the applicant's clinical competence agreed in June 2003; (iii) the subsequent limiting of the applicant's clinical privileges in circumstances where that was not recommended by the report which constituted the outcome of the agreed review; (iv) the respondent's failure to act in a procedurally fair manner in then determining to restrict the applicant's clinical privileges following receipt of the agreed review; (v) the imposition on the applicant, in connection with the restriction of his clinical privileges with effect from November 2004, of a requirement to regain his clinical privileges in nephrectomy which was not capable of being carried out, and in respect of which the respondent did not provide reasonable assistance in any timely manner; and (vi) the failure to provide the applicant with a fair or reasonable level of operating lists once he returned to the Hospital from his extended leave in January 2005. 139 Before dealing with each of these contentions it is necessary to address a matter raised by the respondent, namely, that the 'contract' (as defined in s 105 of the Industrial Relations Act) must itself be demonstrated to be, or have become, unfair; the unfairness asserted must be related to the contract. It was submitted by the respondent that the applicant's case had shifted to one based on conduct, with no connection having been made between the conduct and the contract. The respondent referred to Patricia Cretney v State of New South Wales [2008] NSWIRComm 131. 140 The respondent was entirely correct in contending that it is the 'contract' that is to be held unfair, and not the conduct of any party: Sydney Water Corporation Ltd and Anor v Industrial Relations Commission of NSW & Anor (2004) 61 NSWLR 661 at [25]. Section 106(2) of the Act, however, provides that: The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. 141 In these proceedings, the applicant alleges that the unfair contract is the fee for service contract of 1 July 2003 between the applicant and the respondent. To the extent necessary, the Second Further Amended Summons extends this to include the earlier fee for service contract of 9 February 1999 on the basis that these two contracts may be considered as an arrangement for the purposes of the definition of "contract" within s 105 of the Act. 142 The contract expressly provided that the respondent could review and vary the applicant's clinical privileges. Clause 3.2 of the contract provided that: The Area Health Service may review and vary the clinical privileges of the Visiting Medical Officer at any time after advice from the appropriate Credentials Committee in respect of the specified hospital/s in accordance with any applicable Act or regulations, or by-laws in force at the specified hospital(s).

The contract described the applicant's clinical privileges as "Specialist Urology, including laparoscopic procedures". 143 As I understand the applicant's case it was that the contract permitted the respondent to engage in conduct, or failed to prevent the respondent from engaging in conduct, so that because of that conduct, or "the manner in which it worked out and operated between the parties to it" (see Bowman v Ricegrowers Limited (2007) 167 IR 325 at [66], [67]), the contract became unfair in the six ways earlier described. So to illustrate the point, it was alleged by the applicant that the respondent failed to act in a procedurally fair manner in determining to restrict the applicant's clinical privileges following receipt of the agreed review. That failure may be attributed to the contract because it permitted the respondent to act in this way or did not proscribe such conduct. A contract may become unfair because of a failure to accord procedural fairness: Abboud v The State of NSW (Department of School Education) (1999) 92 IR 32 at 51. 144 I do not accept the respondent's contention that the applicant's case was limited to unfair conduct. The informal ban

145 The question here is whether the informal ban on the applicant performing nephrectomies was conduct that caused the contract to be unfair. The applicant submitted that the ban effectuated a variation of his clinical privileges because he never had any option, once the ban was imposed, of performing nephrectomies thereafter at the Hospital. This ban, the applicant submitted, meant that he received no notice of the variation of his privileges as required by the statute underpinning the contract (s 105 of the Health Services Act) and the variation occurred without going before the appropriate Credentials Committee, a requirement of the contract. 146 Whilst Dr Houlton was instrumental in May 2003 in arranging for the Hospital to refrain until further notice from booking further nephrectomies to be performed by the applicant, Dr Houlton had no authority to require that to be done. Dr Porter advised the applicant on 13 June 2003 this was the case. At the same time, Dr Porter also advised the applicant that he proposed to initiate an independent review by the Society of what occurred in the case of patient "W" on 7 May 2003. Dr Wheelahan agreed to that review being undertaken. Dr Porter requested Dr Wheelahan not to perform any further nephrectomies until such a review was conducted. Dr Wheelahan agreed to this. 147 In order to show that the ban initiated by Dr Houlton had the effect of varying his clinical privileges without notice and that, therefore, a finding should be made that the contract was unfair, the applicant would need to show that in a real sense it was the ban that prevented him from exercising his clinical privileges. Apart from the fact that the ban had no formal or legal force or effect, it was not the ban, as such, that prevented Dr Wheelahan from performing nephrectomies at the Hospital but rather how he perceived medical and other staff at the Hospital were treating him. 148 In this respect, the applicant said he was distressed about the manner of the making of the complaint about him. He regarded the statement that "the hospital was in danger of being sued" if he was not "stopped from operating" as an allegation of incompetence and said he found the prospect of working at the Hospital while this allegation was unresolved to be very stressful. This mind-set undoubtedly influenced the applicant in deciding to agree to the review and in agreeing to not perform nephrectomies in the meantime. But it was not the ban that brought this about. Once Dr Porter advised the applicant that Dr Houlton had no authority to impose a ban, it ceased to be of relevance in any decision made by the applicant to subject himself to the review and to forego the privilege of performing nephrectomies.

149 In these circumstances, the proposition that the informal ban initiated by Dr Houlton was tantamount to a variation of the applicant's clinical privileges without notice is not sustainable. Nonetheless, the fact remains that Dr Houlton did initiate a ban on Dr Wheelahan performing nephrectomies and there was a brief period where the applicant believed a ban was in place. The practical effect of the ban, however, was nil because there were no patients on the waiting list that missed out on an operation because of the ban. 150 Further, it was not as though Dr Houlton's action in initiating the ban was baseless. After having obtained the agreement of practitioners at a meeting on 25 May 2003 that there should not be any further nephrectomies booked for Dr Wheelahan until an investigation into the incident involving patient "W" had occurred, Dr Houlton prepared a clinical report regarding the incident and submitted it to Dr Porter. This was done on 30 May 2003. The actions taken by Dr Houlton, whilst in disregard of proper administrative procedures, were, nevertheless, taken in circumstances where he had a legitimate concern regarding the applicant's clinical competence. One patient had died from blood loss a year earlier and patient "W" had at this time (he died some weeks later) suffered extreme blood loss, both as a consequence of nephrectomies performed by Dr Wheelahan. Although Dr Houlton did not have direct knowledge of the particular operation, he had Dr Blaxland's written complaint and he had information about the condition of patient "W", including the blood loss. There was sufficient information for Dr Houlton to understand that a critical event occurred in the operating theatre in May 2003 that strongly suggested further inquiry was necessary. 151 I have no doubt that the applicant was disturbed by the action of Dr Houlton in initiating the ban and having done so without any prior consultation with the applicant about his intention. It is understandable that the applicant would have felt distressed and undoubtedly embarrassed by colleagues having met without his knowledge and having effectively announced their lack of confidence in his clinical competence. However, I do not consider the contract was rendered unfair by the ban itself. Delay in the review

152 The applicant submitted that the delay, or failure to pursue with expedition, the review into the applicant's clinical competence as it was agreed at the applicant's meeting with Dr Porter and Dr Beswick on 13 June 2003, caused the contract to be unfair. 153 The Department of Health Guideline on Management of a Complaint or Concern about a Clinician provided that a level 2 investigation, which was the relevant level in the applicant's case, was to be completed: within a reasonable predetermined timeframe, generally eight weeks should be sufficient, excluding any period of ongoing monitoring. 154 At the meeting on 13 June, Dr Porter indicated that he expected the review to take two to three months. As it turned out, from the time Dr Porter announced his intention to initiate a review (13 June 2003) until the final report was provided to the applicant (mid-July 2004) a period of 13 months had passed. 155 When one considers the timeframe set out in the Guideline for dealing with a complaint or concern about a clinician, the time taken to complete the review was grossly excessive. Be that as it may, it is not simply a mathematical exercise of determining the time taken for the review and making a comparative judgment about whether that constituted an unreasonable delay. Rather, the question is whether the contract permitted the respondent to engage in conduct, or failed to prevent the respondent from engaging in conduct, so that there was such an unreasonable or undue delay in finalising the review, or there was such an unconscionable failure to pursue the review with expedition, that the contract was rendered unfair. 156 First, I note that on 18 June 2003 the applicant requested leave for the month of July. He informed the respondent that he would prefer to take leave from the Hospital pending the review, rather than be subject to a restriction on his privileges. I accept the applicant's submission that, at this point, taking leave was a reasonable response by the applicant, having regard to the then expected period of the review, the importance of a review into his clinical competence and the circumstances in which he had been informed of the ban imposed by anaesthetists at the Hospital. As I indicated, it is understandable that the applicant would have felt distressed and embarrassed. 157 I am most reluctant to make criticisms of any individual, including Dr Beswick, who I am sure was a very busy person given her role as Director of Medical Services at the Hospital. However, keeping in mind the Guideline for dealing with complaints and concerns about clinicians provided that any review was to be done in a reasonable timeframe, generally eight weeks, Dr Beswick did not write to the Urological Society making a formal request for a review to be conducted until 30 June 2003. That is, over two weeks after she and Dr Porter advised the applicant of their intention to initiate a review. Then Dr Beswick did not receive a response until 1 August 2003. There was no evidence Dr Beswick followed up with Dr Brooks at the Urological Society prior to receipt of the response. So by this time, over three quarters of the recommended period for dealing with the complaint had already passed. 158 During August, negotiations occurred over the terms of reference for the review. On 18 August 2003 Dr Beswick wrote to Drs Crosthwaite and Lalak attaching the agreed terms of reference, and requesting advice regarding the structure of their visit and any documentation required. On 22 August 2003, Dr Porter received a telephone call from Dr Crosthwaite to discuss arrangements for the review. On 24 August 2003 Dr Crosthwaite sent an email message to Dr Porter indicating their expectations and requirements for the review, including proposed costs. By letter dated 14 October 2003 the respondent wrote to Dr Crosthwaite notifying him and Dr Lalak of the agreed terms to apply to the review. Dr Porter gave oral evidence that in the period prior to him preparing this letter he had been unable to contact Dr Crosthwaite for 'weeks and weeks' after receiving the 24 August 2003 email, and, further, that the fees proposed in that email (and subsequently agreed by the respondent) were more than the fees indicated by Dr Brooks.

159 There was no detail provided by Dr Porter about his attempts to contact Dr Crosthwaite during the period August to October 2003. It is not known whether he attempted to contact Dr Lalak or Dr Brooks. By October 2003 the respondent had still not achieved a date for the reviewers to undertake their investigation, yet four months had passed. 160 On 17 November 2003 Dr Crosthwaite proposed that the review take place on 11 December 2003. Dr Beswick did not have any specific recollection of why the review did not proceed on 11 December, other than a recollection about the non-availability of key personnel. 161 On 8 January 2004 Dr Beswick arranged for inquiries to be made with Dr Crosthwaite as to when the review would be conducted. On 21 January 2004 the applicant was informed by Dr Beswick of the tentative review date of 14 February 2004. On about 26 January 2004 Dr Beswick had a telephone conversation with Dr Crosthwaite in which the review date of 14 February 2004 was confirmed. On 13 and 14 February 2004, Drs Crosthwaite and Lalak attended Coffs Harbour and conducted interviews for the purposes of their review. That is, eight months after the applicant was advised of the intention to conduct a review. 162 The reviewers then took from February until May 2004 to produce a draft report and from May to July 2004 to produce a final report. In other words, it took them an extraordinary six months to produce their report. 163 It is very apparent that the reviewers did not consider the review to be a priority, despite the fact that one of their peers was prevented from exercising his clinical privileges, and some of the delay may be attributed to their tardiness. However, throughout most of the period from June 2003 to July 2004 the respondent displayed no sense of urgency in having the review completed. The only time there was any pressure brought to bear on the reviewers was in March and April 2004 when Dr Beswick and Dr Porter appeared to be growing anxious with the fact that the reviewers had still not produced a report. 164 During August to October 2003, Dr Porter said he attempted to contact Dr Crosthwaite. But no complaint was made to the Urological Society about the difficulty the respondent was experiencing in arranging for the reviewers to conduct the review in a timely manner or about the prospect of organising alternative reviewers who could be available sooner. Dr Crosthwaite proposed in November 2003 that the review take place on 11 December 2003. However, apparently key personnel were not available, but we do not know who or why, which provides for a less than satisfactory explanation why the review did not proceed during December 2003. Nor do we know whether at the time the respondent sought to make alternative arrangements with Dr Crosthwaite, but there was no evidence that the respondent, upon learning the review could not take place on 11 December, took steps to set up an alternative time. And by this time six months had passed. 165 It is difficult to escape the conclusion that the review was arranged and undertaken to suit the convenience of all others involved except the applicant. It was not as though the applicant was unconcerned about the delay; on several occasions he complained to the respondent about the delay. The respondent could not have been mistaken about the applicant's concern at the delay, yet the respondent remained almost a passive bystander, pleading that the delay occurred outside its control. The respondent initiated the review; it had an obligation to manage the review process so that it was carried out in a timely manner. If conducting such a review means having to rely on meeting the convenience of others with no way for the respondent to control the progress of the review, then the process is flawed and should not be followed in future. 166 The respondent relied on the fact that the applicant took leave during the relevant period of the review and continued to perform surgery (other than nephrectomies) at Baringa with the same colleagues who worked at the Base Hospital. The respondent submitted that it was open to the applicant to continue his work at the Hospital except for performing nephrectomies. If he had done so, it was submitted, he would not have incurred the loss he claimed. Further, it was submitted that the delay per se was not a basis for finding unfairness. The question of unfairness involved consideration of the circumstances of the case, the nature of the inquiry and the subject matter being dealt with. It also should take into account the extent to which the applicant was informed of the progress and whether he had a reasonable opportunity to address issues relevant to his interests: Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381 at 437 per Mason P. 167 Counsel for the respondent submitted that the question was whether the delay caused a decision that was arbitrary, irrational or unreasonable: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 367. See also Lane v The Commonwealth Bank of Australia [2000] NSWIRComm 274 at [171]; Truelove v Sydney Water Corporation Limited and anor [2004] NSWIRComm 115 at [51]. The respondent submitted there would have been no different outcome from the review if it had not been delayed and the delay did not result in an arbitrary or unreasonable decision. 168 In connection with the respondent exercising its right to consider a variation of the applicant's privileges, there was nothing in the contract that required the respondent to review the applicant's clinical competence within a reasonable timeframe and without undue delay. Consequently, the respondent was able to conduct itself in such a way that it meant the applicant was deprived of the benefit of having his clinical competence determined within a reasonable timeframe, the applicant's professional standing was compromised for an excessively long period, the delay cause the applicant personal distress and embarrassment and forestalled the applicant for an unduly lengthy period from accessing an opportunity of returning to a position whereby he could maximise his earnings under the contract. It may, therefore, be concluded that the contract operated unfairly vis a vis the applicant. 169 It must be conceded that the applicant did agree not to perform nephrectomies until the review had been completed. But that agreement was made on the understanding by the applicant that the review would be completed within two to three months, not 13 months. It is also true that the applicant's privilege to perform nephrectomies was not varied by the respondent and so, theoretically, the applicant could have continued to perform nephrectomies in accordance with the clinical privileges accorded to him by the contract. It is, however, abundantly clear from the evidence that had the applicant attempted to perform nephrectomies, Dr Porter would have taken formal steps to prevent that happening. It may, therefore, be inferred that Dr Wheelahan did not seek to exercise his privilege because it would have been futile to do so and, in any event, the applicant was expecting the review to be completed within a reasonably short time. 170 I find that contract was, or became, unfair because it permitted the respondent to engage in conduct such that it allowed the review agreed between the applicant and the respondent in June 2003 to be unreasonably delayed or it failed to pursue the review with expedition. Limiting applicant's privileges where not recommended by report 171 The applicant submitted that the limiting of the applicant's clinical privileges in circumstances where that was not recommended by the review report caused the contract to be unfair. 172 The applicant maintained that the reviewers' final report did not recommend that there be any variation to his clinical privileges. The applicant accepted that the final report was to be provided to the respondent via the MDAAC, in accordance with the reviewers' terms of reference. However, it was submitted he was entitled to assume that the respondent would act on, and in accordance with, the report prepared in accordance with the agreed review process. This, it was said, was the basis on which he had agreed to the independent review of his nephrectomy operations, and the basis on which he had subsequently taken extended leave from his position at the Base Hospital. 173 The applicant submitted that given the agreed review process and, in particular, having regard to the length of time that process took and the importance of the process to the applicant, it was not appropriate or fair for the respondent to fail to act in accordance with the recommendations of the two expert reviewers, but instead to establish a separate and further process to determine whether the applicant's privileges to perform nephrectomies should be removed. In failing to act on, and in accordance with, the recommendations of the final report it was submitted the respondent acted unfairly and that it followed the contract was unfair in permitting such conduct. 174 It is true that the reviewers did not recommend any variations to the applicant's clinical privileges, but they were not asked to do so. It is also true that one may read the recommendations in such a way that the reviewers did not envisage that the applicant should be prevented from performing nephrectomies but rather what was required was that the applicant surgical approach to performing a radical nephrectomy needed to be fully reviewed and that, amongst other recommendations, he operate with an experienced assistant. 175 However, it was not the reviewers who were charged with the responsibility of providing advice to the respondent as to whether there should be a variation to the clinical privileges of the applicant, but rather that responsibility rested with the appropriate Credentials Committee. In my opinion, that Committee was required to have regard to the reviewers' report but it was not obliged to rubber stamp it. The applicant understood that the question of his clinical privileges would not and could not be finally determined by the reviewers. 176 The Credentials Committee had before it a situation where two patients of Dr Wheelahan had died within the space of about 14 months and where the underlying problem in both cases was major operative blood loss. The reviewers' report identified significant concerns with the applicant's operative technique that, according to the reviewers, needed to be fully reviewed. The concerns included:

· that Dr Wheelahan chose the wrong nephrectomy to perform on one of the patients, that is, that a radical nephrectomy should have been performed instead of a partial nephrectomy; · problems in the applicant's technique of managing major intraoperative haemorrhage. The report found that haemorrhage was the most important peri-operative complication of radical nephrectomy, and that it was an essential skill for a nephrologist to be able to deal with such bleeding; · the applicant's method of dealing with renal vessels. The report found that the renal vessels were never well controlled and that the applicant's approach of placing a clamp around the renal vein but not the renal artery undoubtedly exacerbated the bleeding. This approach should have been avoided at all costs as it was designed only for very difficult situations, and was potentially very dangerous; · the applicant's general surgical technique, including his choice of incision technique and use of inadequate and inappropriate instruments; · the lack of cooperative communication between the applicant and the anaesthetist during the operation; and · the applicant's perceived inability to recognise when further assistance was required.

177 In light of these very significant concerns and against the background of two deaths, the Committee was entitled to take a cautious or conservative approach as to whether Dr Wheelahan should be permitted to continue to perform nephrectomies. I do not find any unfairness in the fact that the Committee proceeded to recommend limits on the applicant's privileges in light of the reviewers' report.

178 The applicant submitted that the respondent's failure to act in a procedurally fair manner in determining to restrict the applicant's clinical privileges following receipt of the agreed review, made the contract unfair. The lack of procedural fairness was said to arise out of Dr Porter's attendance at part of the Credentials Committee meeting on 19 October 2004. The Credentials Committee subsequently made the decision to recommend restriction of Dr Wheelahan's surgical privileges. 179 On 11 August 2004, following the reviewers' final report, Dr Porter prepared a memorandum to the MDAAC suggesting a possible way forward. The proposal included that the reviewers' report and recommendations be provided to the MDAAC, that Dr Porter brief the MDAAC and provide it with a copy of Dr Wheelahan's response to the report, and that a Credentials Committee be established for the purpose of advising the MDAAC on the applicant's credentials. In his evidence, Dr Porter agreed that after receiving the final report he was of the opinion that there needed to be further consideration about whether to restrict Dr Wheelahan's privileges. In cross-examination, Dr Porter said that his view was that an appropriate action would be for Dr Wheelahan to have his privileges reduced until such time as he went through the remediation process recommended by the review report. 180 A meeting of the MDAAC was held on 17 August 2004. There was some dispute on the evidence as to whether Dr Porter actually attended this meeting. Dr Porter's affidavit stated that he did not attend but had been informed of the meetings outcome by Dr King. When questioned about this, Dr Porter could not recall whether he had attended and thought that he might have been in Newcastle at the time. The minutes of the 17 August 2004 MDAAC meeting, however, record Dr Porter as being not only present but also the 'mover' of a number of recommendations. Also recorded as present, although via teleconference, was Dr Harry Johnston. I will return to the significance of this shortly. The following are the minutes of the meeting as they relate to the applicant and the final report: Report Recommendations - Dr John Wheelahan The Area Director Clinical Services spoke to Attachment 10.2 regarding the Royal Australasian College of Surgeons report on radical nephrectomy cases at Coffs Harbour Base Hospital involving Dr John Wheelahan. The report expressed concerns with Dr Wheelahan's surgical technique and made recommendations for improvement and remediation. Dr Wheelahan's response was noted, and it was agreed that this did not fully address the issues raised. In particular, it was agreed that all aspects of remediation should be completed before Dr Wheelahan returns to full duty. The Area Director Clinical Services recommended that a special Area Credentials Committee meeting be convened to advise the Medical and Dental Appointments Advisory Committee on Dr Wheelahan's credentials and any other issues flowing from the report. The Royal Australasian College of Surgeons should be approached to nominate suitable people. Dr Wheelahan should be invited to attend the Committee to discuss his response to the report. It was agreed that Dr Wheelahan's privileges may need to be formally suspended in the event that Dr Wheelahan required a decision before the matter is resolved. The Committee agreed that the Area Director Clinical Services be empower to do this if needed. Recommendation: 1. The Area Director Clinical Services convene a special Credentials Committee to address the issues raised in the Royal Australasian College of Surgeons' report relating to Dr Wheelahan's credentials. 2. The Area Director Clinical Services be empowered to suspend Dr Wheelahan's privileges should Dr Wheelahan seek to perform nephrectomy operations prior to the matter being resolved. These recommendations are consistent with the suggested way forward prepared by Dr Porter in his memorandum dated 11 August 2004, including that the Area Director Clinical Services would brief the MDAAC. 181 In his evidence Dr Porter suggested that possibly the person who wrote the minutes could have confused him with Dr King who was Dr Porter's deputy and may have been Acting Area Director Clinical Services at the time. However, to that proposition I note two things: first in other parts of the minutes Dr Porter was referred to specifically by name, and not as 'Area Director Clinical Services'. The second is that the minutes do not record Dr King as being present at the meeting. The only evidence regarding Dr King's knowledge of the MDAAC meeting on 17 August 2004 comes from his cross examination, as follows: Q. If you come back to the first page, Dr Porter told you, it is recorded in the second paragraph, that the MDAAC meeting previously had expressed concerns with regard to Dr Wheelahan's response to the report. Do you see that? A. Yes.

Q. That was the only - did you have Dr Wheelahan's response to the report as well at that time? A. I don't believe I did. The information I had, the report and the response to the report, we received when Dr Wheelahan, my recollection of it, when he came to the Committee after Dr Porter left.

Q. You don't have any recollection of having a letter from Dr Wheelahan before? A. No.

Q. He attended this meeting? A. No.

Q. Do you recall that Dr Porter indicated that the matter had been discussed at the previous MDAAC meeting? A. Yes.

Q. It is the case that some of the members of your Credentials Committee had been at that meeting also, do you recall that? A. Some of the members of the credentialing committee were members of the medical appointments committee but I don't know whether they attended that meeting in August. 182 I infer from Dr King's answers that he was not in attendance at the 17 August 2004 meeting. Further, that Dr King recalled that Dr Porter had advised what had been discussed at the MDAAC meeting, leads to the inference that Dr Porter himself had been at the MDAAC meeting. Unfortunately, no other attendee from the 17 August 2004 MDAAC meeting was called to give evidence on the matter and I am, therefore, required to assess the facts on the evidence before me. On the one hand, there are the minutes of the MDAAC meeting that record Dr Porter as present, as the person who moved a number of recommendations and that the 'Area Director Clinical Services' made recommendations regarding Dr Wheelahan. On the other hand, there is Dr Porter's affidavit evidence that he did not attend the meeting. However, when questioned specifically on the matter, Dr Porter had said he could not recall whether he attended, and may have been in Newcastle. In light of my finding that Dr King was not present at the 17 August 2004 MDAAC meeting, that the recommendations attributed to the Area Director Clinical Services were consistent with Dr Porter's previous memorandum and that the only evidence that Dr Porter was not at the meeting was Dr Porter's evidence, to which he later qualified, leads me to find that, on the balance of probabilities, Dr Porter was present at the MDAAC meeting on 17 August 2004. 183 It was decided at the 17 August 2004 MDAAC meeting that a Credentials Committee should be established to address the issues raised in the final report. Dr Porter wrote to the applicant on 20 September 2004 to advise that the Credentials Committee would meet on 19 October 2004 at 2.00pm and that Dr Wheelahan was invited to attend to address the Committee from 2:30pm. Dr Porter advised that this was the earliest date he could arrange for the College of Surgeons nominee's availability to coincide with the availability of the local representatives. Dr Porter also advised that the Committee was to comprise of himself, as the chair; Dr Peter Kovac, Royal Australasian College of Surgeons nominee; Dr Bruce Hodge, Surgeon; Dr Max Brinsmead, Obstetrics and Gynaecology; and Dr Harry Johnston, Physician, who had participated in the 17 August 2004 MDAAC meeting. 184 Following receipt of this advice, Dr Wheelahan sent two letters, the first complaining of Dr Porter chairing the meeting, and the second complaining that he should not participate at all in the Credentials Committee meeting. The applicant's complaints were made on the basis of a perceived bias. Although Dr Porter rejected any suggestion of bias, he subsequently agreed not to participate in the Credentials Committee meeting in any capacity. Dr King took on the role of chair. 185 However, Dr Porter did attend the Credentials Committee meeting on 19 October 2004. In his evidence Dr Porter explained his involvement at the meeting: ...I addressed the committee to give the committee background because as we talked about these things being confidential before, the rest of the committee and in particular the College of Surgeons nominee was not privy to any of the background. So it was seen as prudent from me having been involved in the process to brief the committee as to the background, as to why they were there. This is not an unusual situation. I did that and left.

186 The evidence shows that Dr Porter attended the Credentials Committee meeting from 2:00pm to 2:30pm and that the applicant did not arrive until 2:45pm. In his evidence Dr Porter said that the purpose of his attendance was merely to brief the Credentials Committee so that everyone in the Committee knew the background of the matter, why they were there and what was supposed to happen. Dr Porter said he was conscious of the fact that Dr Wheelahan would say a lot of things to the Credentials Committee which might or might not have been in context with what the Committee had to achieve and that he felt he needed to ensure that the Credentials Committee did not get sidetracked into dealing with issues that they did not have authority to deal with. He maintained that he only spoke about the report generally, that he did not discuss the report, or take the Credentials Committee to certain parts of the report, nor had he expressed any opinion on the matter. He rejected the notion that his briefing of the Committee gave him the opportunity to influence the outcome of the meeting.

187 Dr King agreed that Dr Porter had attended the first half hour of the meeting for the purpose of briefing the Credentials Committee and to provide an oversight of the matter, which included that the excessive blood loss from the two patients was the principle concern that had lead to the matter currently being before the Credentials Committee. Dr King did not recall that Dr Porter had taken the Committee to parts of the report, however in cross examination he acknowledge that reference in the minutes to Dr Porter highlighting to the Committee the report's concerns over excessive blood loss, would have at least involved Dr Porter speaking to the report. He also accepted that he and the other Committee members had listened and taken note of what Dr Porter had said. 188 It was submitted for the applicant that Dr Porter's evidence that he did not influence the outcome of the Committee's decision should not be accepted having regard to: the contents of the minutes; the fact that Dr Porter had spoken to the Committee for most of the half hour; Dr Porter's prior acknowledged opinion of what should be the appropriate outcome; and the role he had played up to that time. It was further submitted that: The presence at a meeting of a person who is biased or acting as accuser may be sufficient for such a meeting to constitute a denial of natural justice, or be improperly conducted, even if that person does not play an active part in the meeting: Stollery v The Greyhound Racing Control Board (1973) 128 CLR 509, esp at 516-7, 525. See also Re Macquarie University; Ex Parte Ong (1989) 17 NSWLR 113, esp at 133-5. In this instance Dr Porter did play an active role in the meeting. 189 Also relevant in determining whether there was any procedural unfairness, is the period between when Dr Porter left the meeting and when Dr Wheelahan arrived. During this time the Committee discussed the issues raised in the reviewer's report. Of particular significance is the following excerpt from the minutes: A consensus was reached that his technique is not acceptable and Dr Wheelahan should not perform radical nephrectomies. The Committee discussed a way forward to retrain Dr Wheelahan using an appropriate technique. It was suggested that Dr Wheelahan could assist a specialist with a number of radical nephrectomies and then perform radical nephrectomies under the supervision of an expert. Supervision would continue until such time that the expert specialist deemed Dr Wheelahan's technique was acceptable. Dr Wheelahan would then need to reapply for credentials in radical nephrectomy. The Committee decided to hold off agreeing on any actions until Dr Wheelahan had presented his case. The Committee agreed to listen to what Dr Wheelahan had to say, take into account the recommendations put forward in the report and then agree on what urology privileges Dr Wheelahan should be credentialed in going forward. 190 The applicant submitted that the minutes supported a finding that the Committee's decision to recommend Dr Wheelahan's privileges be restricted, had in a real sense, been made prior to the applicant having had the opportunity to address the Committee. Further, it was submitted there was some doubt as to whether the Credentials Committee had a copy of Dr Wheelahan's written response to the reviewers' final report in front of them by this stage. Dr King in his oral evidence could not recall seeing it. 191 In relation to Dr Johnston, who sat on the MDAAC meeting on 17 August 2004 and who was a member of the Credentials Committee, the applicant submitted that: It will also be remembered that one member of the Credentials Committee (Dr Johnston) had participated in the preceding MDAAC meeting, at which he had heard Dr Porter's views about the Final Report and his view that if necessary the applicant's privileges should be suspended at least pending 'resolution of the matters'. 192 Dr Johnston was not called as a witness in proceedings. However, the fact is that Dr Johnston attended the 17 August MDAAC meeting. During that meeting Dr Porter expressed his opinion regarding Dr Wheelahan's credentials, namely, that an appropriate action would be for Dr Wheelahan to have his privileges reduced until such time as he went through the remediation process recommended by the review report. Dr Johnston was then a member of the Credentials Committee, which subsequently recommended that the applicant's privileges be restricted. Dr Johnston's presence at the MDAAC meeting and his later presence at the Credentials Committee meeting lend support for the possibility that the Credentials Committee was influenced by Dr Porter's opinion regarding the applicant's privileges.

193 Turning to Dr Porter's attendance at the Credentials Committee meeting, he was present for the first half hour during which time he briefed the members about the history of the matter, why they were there and what they were to achieve, as well as providing a summary of the reviewers' report. Even if I accept that Dr Porter did not actively voice his opinion or participate in the deliberation process, I am unable to discount the possibility that the context in which he framed his 'brief' to the Committee was not affected by his opinion on what should happen to the applicant's credentials. Dr Porter had played an active role in the matter to date, and he himself frankly and fairly acknowledged that he had formed an opinion, adverse to the applicant's interests, as to what should happen after reading the final reviewers' report.

194 It was submitted that the contract was unfair as it permitted the Credentials Committee to make a decision contrary to accepted standards of procedural fairness. It was contended that: Those accepted standards required the respondent to not make a decision adverse to the applicant's interests without giving him an opportunity to make submissions against the making of such a decision: Annetts v McCann (1990) 170 CLR 596 at 600-1.

195 On the face of it, the Credentials Committee meeting made an initial decision based on the briefing by Dr Porter and presumably on the reviewers' report and the applicant's response to it that the applicant's technique was not acceptable and that Dr Wheelahan should not perform radical nephrectomies. To what extent the applicant's written response to the reviewers' report played any part in the Committee's deliberations is unclear. However, Dr King in his oral evidence could not recall having seen the response. 196 Dr Wheelahan then attended the meeting, addressed the meeting, answered questions and asked questions of his own. While Dr Wheelahan was still in attendance at the meeting he was advised that his privileges would be modified. There was no adjournment of the Committee's proceedings to consider what Dr Wheelahan had put to the Committee in his defence; there was no adjournment to consider whether what Dr Wheelahan had said to the Committee in any way influenced its initial decision that Dr Wheelahan should not perform radical nephrectomies. It is apparent from the minutes of the meeting that the Committee had effectively determined a course of action to vary the applicant's privileges early in the meeting and prior to hearing from the applicant. 197 That is to say, after Dr Porter had briefed the Committee and before Dr Wheelahan met with the Committee it had, despite the statement in the minutes that the Committee would "hold off agreeing on any actions until Dr Wheelahan had presented his case", effectively made up its mind to reduce the applicant's privileges over the objection of the applicant that he was not aware that his privileges were to be the subject of any decision by the Committee. 198 The position then, at the Credentials Committee meeting, may be summarised thus: · Dr Porter had advised the MDAAC meeting in August 2004 "that an appropriate action would be for Dr Wheelahan to have his privileges reduced until such time as he went through the remediation process that was recommended from the terms of review";

· Dr Johnston attended the MDAAC meeting in August 2004 and also attended the Credentials Committee meeting in October 2004;

· Dr Porter briefed the Committee in the absence of Dr Wheelahan. Dr Porter was in the position of Area Director of Medical Services and therefore carried some influence;

· Dr Wheelahan did not hear what Dr Porter may have said to the Committee;

· although there was no evidence that Dr Porter participated in the deliberation or decision of the Committee by any positive act, the reasonable inference to be drawn by the reasonable bystander was that Dr Porter was in a position to participate in the Committee's deliberations and at least to influence the result of those deliberations adversely to the applicant thereby denying the applicant natural justice (Stollery at 517 per Barwick CJ) or constituting conduct that was procedurally unfair;

· the Committee, having invited the applicant to address it, effectively determined to reduce Dr Wheelahan's privileges before hearing from the applicant; there was no evidence to indicate that the Committee, as a body, gave any proper consideration to the case put by Dr Wheelahan prior to determining its recommendation to reduce his privileges. 199 It was perfectly understandable that the Committee was concerned about the implications of the reviewers' report for the continued performance by Dr Wheelahan of nephrectomies when two patients had died and severe blood loss was a contributing factor. However, the Credentials Committee was charged with the responsibility of providing advice to the respondent about whether or not the applicant's privileges should be varied. Any advice to reduce those privileges would inevitably have an adverse effect on the applicant's right to earn income from the Hospital and on his reputation. The Committee was obliged to act with proper regard for the applicant's rights. It was inappropriate for Dr Porter to have briefed the Committee, having consented to stand aside because of a perception of bias on the part of the applicant. That perception was soundly based because Dr Porter had advised the MDAAC in August that the appropriate action would be for Dr Wheelahan to have his privileges reduced until such time as he went through the remediation process recommended by the review report. 200 It was also inappropriate for the Committee, having invited the applicant to address it, to have arrived at "a consensus Dr Wheelahan should not perform radical nephrectomies" before having heard from Dr Wheelahan. Then, despite having "decided to hold off agreeing on any actions until Dr Wheelahan had presented his case", it is evident from the minutes that the Committee did not "hold off" and proceeded without any further deliberation, and whilst Dr Wheelahan was still present, to determine to recommend to the respondent that Dr Wheelahan's privileges be reduced so that he could not perform nephrectomies. 201 In the result, the recommendation went to the MDAAC, which agreed with the Committee's recommendations and advised the respondent accordingly. The respondent implemented the recommendations without hearing further from Dr Wheelahan. 202 The contract permitted the respondent to establish a Credentials Committee for the purpose of advising about whether the applicant's clinical privileges should be varied. The contract permitted conduct by the Credentials Committee in carrying out its function that did not meet accepted standards of procedural fairness. The contract, therefore, operated unfairly. 203 It follows that the contract should be varied to remedy the unfairness. It does not, however, necessarily follow that compensation should flow in connection with any variation to the contract, the Court being of the opinion that notwithstanding the lack of procedural fairness accorded to the applicant, it was open to the Committee to recommend the variation to the applicant's clinical privileges to exclude nephrectomy. I will say more about this later in the judgment. Conditions for regaining full clinical privileges 204 The applicant contended that the imposition on him, in connection with the restriction of his clinical privileges with effect from November 2004, of a requirement to regain his clinical privileges in nephrectomy, which was not capable of being carried out, and in respect of which the respondent did not provide reasonable assistance in a timely manner, caused the contract to be unfair. 205 The MDAAC's approval on 2 November 2004 of the Credentials Committee recommendations was in the following terms: 1. Coffs Harbour Health Campus purchase an Omni retractor or similar self retaining device. 2. Dr Wheelahan's privileges be changed to "specialist urology excluding all nephrectomy that involves dissection of the renal blood vessels". 3. Dr Wheelahan undertakes remediation by:

· Engaging in a mentoring process with a urological surgeon approved by the Royal Australasian College of Surgeons or their delegate, or in the absence of a suitable process by the College, a urological surgeon arranged by Dr Wheelahan and agreed by the Mid North Coast Area Health Service; · That the mentoring process involve Dr Wheelahan assisting with nephrectomy procedures; and · That the mentor advise the Mid North Coast Area Health Service of progress so that Dr Wheelahan's credentials can be reassessed by the Medical and Dental Appointments Advisory Committee and Area Credentials Committee at an appropriate time. 206 It is apparent from the evidence, including the oral testimony of Dr King, that the decision to recommend a restriction of the applicant's privileges was taken on the basis that the applicant would have an opportunity to regain those privileges. 207 From the outset the applicant queried whether it was possible to implement the mentoring process recommended by the Credentials Committee. He informed Dr Porter that the College of Surgeons did not have any mentoring process. He wrote a letter to Dr King dated 25 November 2004 in which he stated that the College of Surgeons did not have any mentoring assistance and retraining process, and the Urological Society had no precedent for this. Further, he referred to the possibility of assisting colleagues to perform nephrectomies, but stated that for that to occur he would need to retain his existing credentials (which he offered to only use in such circumstances). That letter was also provided to Ms Bennett, and through her to other senior administrators within the respondent. Dr King did not provide any substantive response to that letter. 208 The applicant raised the same issues as to practicality of the mentoring process at a meeting on 12 January 2005 with Drs Beswick and King. In that meeting Dr King stated that he and Dr Beswick would draw up a mentoring process and present it to the applicant. That never occurred. The only process that the respondent suggested, at least in the first half of 2005, was a review by the Medical Board. This was a process that Dr King acknowledged in his evidence was not a mentoring process, and was not a process that Dr King was confident the applicant should follow.

209 As the applicant submitted, until at least July 2005, the only substantive steps taken towards implementing the required mentoring process were steps taken by the applicant, largely independent of the respondent. He made enquiries of the College of Surgeons, the Urological Society and the Medical Board. He assisted with, or observed, six nephrectomy procedures as set out in a letter to Dr Lynch dated 28 July 2005, and a further two procedures as set out in a subsequent letter to Dr Lynch dated 16 August 2005. He sought to arrange for Dr Lynch to attend Coffs Harbour to observe other open renal operations (that visit ultimately did not occur). 210 From March 2005 to July 2005 officers of the respondent acknowledged in various ways the 'complication' posed by a requirement that the applicant assist with nephrectomies in circumstances where he did not have clinical privileges to perform that operation. Dr Beswick acknowledged in her oral testimony that the restriction on the applicant's clinical privileges prevented him from doing any more than observing nephrectomies, at least within the respondent's area. Ms Bennett also agreed that for the applicant to assist with nephrectomies he would need a form of privileges to be able to do that. The applicant's evidence was that the withdrawal of his privileges in nephrectomy prevented him from complying with the requirement to assist in nephrectomies as part of the mentoring process. 211 On 17 November 2005, the MDAAC restored the applicant's clinical privileges to perform nephrectomies on the condition that such procedures only be performed under a proctoring arrangement. Dr Beswick's evidence was that this was to arrange a process of mentoring to be established, and was recognition that the mentoring process could not be completed without that occurring. 212 The applicant was not informed of this partial restoration of his clinical privileges until about 13 December 2005, some 13 months after the MDAAC approved the Credentials Committee recommendations, and after he had attended a consultation with Dr Eaton and been certified as unfit for work. 213 The applicant did make a genuine attempt to comply with the Credentials Committee recommendations, despite being of the view that they were, in a practical sense, incapable of implementation. The respondent's efforts to overcome the impracticality, however, were at best, for most of 2005, tokenistic. 214 It should have been obvious to the Committee from the outset that what it was recommending was incapable of practical implementation. On the one hand, it recommended that the applicant's privileges be changed to exclude all nephrectomy and, on the other hand, it recommended that the mentoring process involve the applicant "assisting with nephrectomy procedures". Yet it took the respondent 13 months to properly acknowledge the difficulty. Ultimately, it was forced to change the applicant's clinical privileges to allow him to perform nephrectomies on the condition that such procedures only be performed under a proctoring arrangement, which should have been the recommendation in the first place. 215 The respondent's failure to take any meaningful steps for 13 months to put a workable mentoring process in place for the applicant was inexcusable, coming on top, as it did, of the respondent's failure to pursue the review with expedition. In formulating its recommendations to require the applicant to engage in a mentoring process the Committee was obliged, as a matter of fairness, to do so in such a way that the process was reasonably capable of implementation. No thought at all seems to have been given to its practicality. 216 The contract provides that the respondent may review and vary the clinical privileges of a VMO at any time after advice from the appropriate Credentials Committee. The contract contains no provisions to guide or regulate the Committee in carrying out its functions; the Committee is virtually at large in so far as the contract is concerned. This led directly to a situation in relation to the applicant whereby the respondent has conducted itself unreasonably and unfairly. The contract is thereby unfair in permitting the respondent to act in an unfair manner in that it enabled the respondent to adopt recommendations by the Credentials Committee that were not reasonably capable of being carried out by the applicant and it enabled the respondent to act unreasonably by failing to act with reasonable expedition and failing to provide reasonable assistance to the applicant in relation to the Committee's recommendations. Alleged failure to restore the applicant to a reasonable level of operating lists

217 The applicant submitted that the evidence supported a finding that in the first five months of 2005 the applicant was only allocated a small number of operating lists, and until August 2005 the applicant was allocated fewer operating lists than Dr Morrissey and significantly fewer operating lists than had been the case for him prior to June 2003. 218 Nonetheless, the applicant did not contend that any unfairness arising from this conduct, of itself, supported his claim for variation of the restriction of his clinical privileges, or his claim for loss of earnings. Rather, it was submitted that this unfair conduct formed part of the respondent's overall conduct towards him. It was a matter that the Court would have regard to in assessing the fairness of the respondent's conduct overall, and the reasonableness of the applicant's response to that conduct.

219 I am unable to find that the conduct of the respondent regarding the applicant's operating lists was unfair. There was no evidence to support a finding that the respondent deliberately sought to allocate fewer operating lists to the applicant or that the respondent was in any way neglectful of the need to appropriately and fairly allocate operating lists to the applicant. Variation of the contract

220 It follows from the foregoing findings that the contract as pleaded was unfair because the respondent: (i) allowed the process of review of the applicant's clinical competence to be unreasonably and unfairly delayed or, alternatively, failed to pursue the review with reasonable expedition; (ii) failed to act in a procedurally fair manner in determining to restrict the applicant's clinical privileges following receipt of the reviewers' report into the applicant's clinical competence; and (iii) imposed on the applicant, in connection with the restriction of his clinical privileges with effect from November 2004, a requirement to regain his clinical privileges in nephrectomy that was not reasonably capable of being carried out, and in respect of which the respondent did not provide reasonable assistance in any timely manner. 221 Accordingly, pursuant to s 106(1) of the Act I propose to vary the contract to remedy the unfairness to the following effect: In the event that the North Coast Area Health Service refers a question about the clinical competence of John Bernard Wheelahan to his professional society for report, the North Coast Area Health Service shall: (a) take all steps necessary to facilitate the expeditious delivery of the report;

(b) act in a procedurally fair manner in considering and determining any variation to Dr Wheelahan's clinical privileges as a result of the report; and (c) in relation to any recommendations for remediation which accompany any variation to the applicant's clinical privileges, only adopt such recommendations as are reasonably capable of being carried out by Dr Wheelahan, act with reasonable expedition and provide reasonable assistance to Dr Wheelahan in relation to any such recommendations. 222 The applicant also sought an order setting aside the variation to the applicant's clinical privileges notified by letter from the respondent dated 25 November 2004. The effect of making such an order would be to restore the applicant's full clinical privileges, which would extend to performing nephrectomies. I do not consider such an order would be an appropriate response to the unfairness found. The reason for taking this view is that although there were significant failures on the part of the respondent that rendered the contract unfair, I am unable to conclude that such unfairness requires the Court to restore the applicant's clinical privileges. It would not be in the public interest to do so in the absence of evidence that the applicant's clinical competence is such that full restoration is warranted.

223 Section 106(5) of the Act provides: In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. 224 In considering the question of compensation in connection with the varied contract, it becomes necessary to consider the periods of unpaid leave taken by the applicant during 2003 to 2006, the reasons for that leave and also the period when the applicant was psychiatrically unfit for work. 225 In a strong defence of the respondent's handling of the whole affair, counsel for the respondent contended that throughout the entire period that it took to complete the review (May 2003 - July 2004), the applicant's privileges were not suspended. The applicant agreed that he would not perform nephrectomies but otherwise he could perform all other urological services. The respondent wanted him to continue to work, it was submitted, but the applicant elected to take leave from the Hospital. During the period May 2003 to July 2004, the applicant continued to conduct his private practice and perform surgery at the private hospital in Coffs Harbour. He continued to work with the same colleagues who worked at the Hospital. The decision not to work at all, it was submitted, was entirely the applicant's decision. 226 It is true that in the beginning the applicant's privileges had not been suspended and that the applicant voluntarily agreed not to perform nephrectomies whilst the review was being undertaken. Further, that the applicant applied for leave on 18 June 2003 for the month of July. The leave was granted. However, the applicant's agreement not to perform nephrectomies at the respondent's request and the taking of the initial period of leave was on the understanding that the review would take about two to three months. The applicant said he informed Drs Beswick and Porter that he would prefer to take leave from the Hospital pending the outcome of the review rather than be subject to a restriction of his clinical privileges. 227 It is apparent that the applicant believed that unless he agreed to the respondent's request not to perform nephrectomies whilst the review was being undertaken that his privileges might be restricted. The applicant was distressed about the manner of the making of the complaint about him. The applicant regarded the statement that "the hospital was in danger of being sued" if he was not "stopped from operating" as an allegation of incompetence and found the prospect of working at the Hospital while this allegation was unresolved to be very stressful. He found it difficult to perform his usual work due to this stress. In his affidavit evidence Dr Wheelahan stated: By about July 2003 I had become anxious and depressed as a result of the complaint made about me and the manner in which that complaint was being dealt with. I was experiencing feelings that I did not want to see patients, exacerbated by embarrassment resulting from not being able to provide patients with a full range of urology services in the public health system. My interactions and disputes with the respondent increased my anxiety and depression. 228 The applicant's request for leave and his agreement not to perform nephrectomies was a reasonable response to the situation in which he found himself in June 2003. However, it could not be said that any unfairness caused by the respondent's failure to expedite the review had manifested itself at this early stage so as to attract compensation. The respondent had indicated to the applicant that the review would take two to three months. It could not be said that the respondent was in any way at fault because the applicant decided to take unpaid leave at this stage. 229 The applicant next applied for a further one month's leave on 14 August 2003. Dr Wheelahan had expressed concern about the delay that was occurring in relation to the review and said to Drs Beswick and Porter: If the review is to be further delayed, I want to return to work with my full credentials. If not, I might as well leave now. I can't continue to practice urology with Houlton, Kalmar and Ross gossiping about me behind my back, and giving me a bad name in the town. 230 It was made clear to the applicant that he would be allowed to perform operations at the Hospital but not nephrectomies. Consequently, the applicant decided to take further leave. Again, I consider the applicant's request for leave and his reluctant agreement not to perform nephrectomies was a reasonable response to the situation he found himself in, but also no unfairness had yet manifested itself. 231 The applicant applied for leave again on 11 September 2003 (one month), 13 October 2003 (one month), 14 November 2003 (two months) and 27 April (until 30 May 2004). On 31 May 2004 the applicant commenced seeing Dr Eaton because of feelings of depression. The applicant made no further requests for leave until December 2005. Nevertheless, he said he understood that his leave was continuing after May 2004. On 7 December 2005 the applicant requested further leave from 14 December 2005 to 10 January 2006. In February 2006 the applicant took four weeks' holiday. On 14 March 2006 Dr Wheelahan wrote to Ms Bennett advising her that he wished to take extended leave and that his consulting rooms would close. 232 On 13 September 2006, Ms Bennett received an email from Dr Wheelahan that attached a letter dated 12 September 2006 requesting a further extension of leave until mid-October 2006. On 15 September 2006, Ms Bennett sent a letter to Dr Wheelahan seeking that by 9 October 2006, Dr Wheelahan confirm whether he was able to return to work by 16 October 2006 and advising that if not, the respondent would promptly recruit a urologist for his position and that the respondent would give three months' notice to Dr Wheelahan, on about 16 October 2006, of the termination of his contract. 233 It is also relevant to note that in addition to the leave requested by the applicant, Dr Eaton certified that Dr Wheelahan was unfit for work from 14 December 2005 to 10 January 2006, 11 January 2006 to 11 July 2006, 11 July 2006 to 11 January 2007, March 2007 to September 2007 and September 2007 to January 2008. 234 The question arises as to whether it was reasonable for the applicant, following his initial requests for leave, to continue to stay on leave and not return to work at the Hospital on the basis that he could perform operations other than nephrectomies, which were, in terms of numbers of operations, a relatively small proportion of his overall work. The respondent submitted the applicant was obliged to mitigate his loss (see Westfield Holdings v Adams (2001) 114 IR 241, English v Aradlay Insurance Brokers Pty Ltd (2005) 145 IR 129) and that in assessing mitigation, the Commission may consider whether the applicant acted unreasonably: see Pavior-Smith & Anor v The National Mutual Life Association of Australasia Ltd (1999) 91 IR 8 at 61 - 62 and Ross v GN Comtext (Australia) Pty Limited (2000) 107 IR 1 at [57]. 235 The respondent submitted in this regard: With respect to the period June 2003 - July 2004, the Applicant continued to conduct his private practice. He continued to operate at Baringa. He worked with the same VMOs at Baringa. He decided not to perform nephrectomies at Baringa. During the whole of this period the Applicant retained his privileges. He agreed that he would not perform nephrectomies pending the review at Baringa. It was open to the Applicant at all times to continue to work at the Base Hospital. At no stage did the Area Health Service require the Applicant to take leave. During this period the Area Health Service wanted the Applicant to provide his services to the Base Hospital. As nephrectomies constituted a small portion of the Applicant's overall work, there is no plausible explanation for the Applicant refusing to perform all his duties (other than nephrectomy) at the Base Hospital. 236 In his affidavit evidence the applicant stated: I found the prospect of working at the Hospital while the complaint about my competence to perform nephrectomies was unresolved to be stressful. I considered that the anaesthetists at the Hospital were agitating for a permanent ban on me performing such operations, and were responsible for speculation and innuendo about my competence as a surgeon. I did not feel able to properly perform operations at the Hospital in that environment, and because of the anxiety and depression that I was feeling at that time. I considered that unless I was able to recommence working at the Hospital in a manner consistent with my full clinical privileges, the speculation and innuendo about my competence would continue. When I initially sought leave from the Hospital to commence in July 2003 I did not expect that the review then being arranged would take such a long period until completion. As the period that I was away from the Hospital continued, given my belief that there was ongoing speculation and innuendo about my competence as a surgeon and in the absence of any final report regarding my competency, it became more difficult for me to contemplate resuming surgery at the Hospital.

237 The applicant also stated that: [D]uring the time while I was on leave from the Hospital (from July 2003 onwards) I continued to conduct my private practice, and to operate at Baringa Hospital. The theatre staff at Baringa Hospital were a more stable and supportive group of people, as compared with those at the Base Hospital. For this reason I found it easier to contemplate operations at Baringa Hospital, as compared with the Base Hospital. Another reason that I was better able to contemplate operating at Baringa Hospital as compared with the Base Hospital was my ongoing interaction and disputes with the respondent regarding the nature and progress of the review and whether I was able to exercise my full privileges at the Hospital. Although I continued to conduct a private medical practice throughout this period, there were several periods throughout 2003 and 2004 when I found it necessary to take leave from all work because of my anxiety and depression. In that period I took regular weeks off work and regular extended weekends, during which I returned to Melbourne where I was at that time involved in renovations to a property that I owned. I found that this pattern of time away from medical practice and Coffs Harbour assisted me to cope with the anxiety and depression that I was experiencing as a result of the circumstances that existed in relation to my practice in Coffs Harbour. 238 In my opinion, for the first three months after the applicant was advised of the review, it was reasonable for him to take leave. He understood the review would take about two to three months and he was obviously uncomfortable about working in the Hospital in circumstances where he was unable to do so using his full clinical privileges. By September 2003, however, notwithstanding his concern about working in the Hospital environment, it was only reasonable that the applicant re-assess his position in light of the fact that he did still not know when the review was to be undertaken. 239 As the respondent submitted, the applicant continued to work at Baringa (although taking regular time off) in circumstances where he was not performing nephrectomies and some of the medical practitioners he was working with at the private hospital were the same as those he encountered at the Hospital. This diminishes the strength of the applicant's submission about having to work with colleagues at the Hospital who the applicant believed "were responsible for speculation and innuendo about my competence as a surgeon." 240 Although I consider the respondent's reliance on the authorities relating to mitigation was somewhat misplaced, I accept that as a matter of justice between the parties, the applicant had an obligation to take reasonable steps to mitigate his loss in the face of the respondent's failure to expedite the review. I do not accept he was entitled to opt to take unpaid leave when he was capable of undertaking the work at the Hospital, albeit not to the full extent of his clinical privileges, and when he was invited, indeed urged, to return to work at the Hospital. 241 I accept that the applicant continued to feel anxious and stressed at the situation in which he found himself after three months and when no real progress, in his mind, had been made in respect of conducting the review. But the stress at this stage was not at such a level the applicant was unable to perform the work or that the applicant felt it necessary to consult a psychiatrist for treatment. It was not until May 2004 that the applicant consulted Dr Eaton about feelings of depression. 242 I take the view that up to September 2003, which was the expiry of the period indicated by the respondent (up to three months) for the review to occur, the respondent cannot be held to account for any unfairness that might attract compensation. From September 2003 to May 2004, I consider the applicant had an obligation to mitigate his loss by resuming work at the Hospital. Therefore, no question of compensation arises in respect of this period. 243 In May 2004, the applicant consulted Dr Eaton. Dr Eaton stated in his affidavit: I have been treating the applicant, Dr John Wheelahan, since I first saw and assessed him on 31 May 2004. On each of the occasions he consulted me, he presented with the symptoms of depression and anxiety referred to in my report dated 12 January 2008. I quote from that report: … Dr Wheelahan has been unfit to perform his full time work, and although I did not give him a certificate until December 2005 because of the treatment rationale, he could be deemed to have been unfit for full time work as a result of his symptoms on 31 May 2004. These symptoms of depression and anxiety are indeed a reaction to the situation in his relationship with the Area Health Service. A situation which obviously was a loss with massive uncertainty and his view a situation in which he was not being treated decently and fairly. 244 In cross examination Dr Eaton explained what he meant by "unfit to perform his full time work": Q. You would agree with me that throughout the whole of the period Dr Wheelahan was in fact fit to do the work of a urologist? A. I assessed Dr Wheelahan as being fit to do limited work under some difficulty in that he - in this affidavit I described the symptoms that we referred to, that I described continued to do be with him whilst he worked, and as I described he did not feel like going to work, he suffered self consciousness and it wasn't pleasant for him in the workplace. He felt a duty to continue his practice. So, my view was that he was capable with some difficulty of conducting a limited practice but that he was not capable of practising to the full extent of his practice.

245 Dr Eaton saw the applicant again on a number of occasions during 2004, 2005, 2006, 2007 and 2008. Dr Eaton certified the applicant as unfit to perform his professional duties as a urological surgeon from 14 December 2005 to January 2008. 246 Whilst I accept that Dr Wheelahan was feeling distressed and anxious, I do not consider that a claim that the applicant should be entitled to compensation from May 2004 when he first consulted Dr Eaton, until December 2005, when he was declared by Dr Eaton to be unfit to work, can be sustained. First, the applicant did not seek to rely on his psychiatric unfitness to work as the basis for taking leave until December 2005. Secondly, the opportunity to perform work at the Hospital remained open for the whole of the period between May 2004 and December 2005. Thirdly, on 22 December 2004, Dr Wheelahan wrote to Dr Beswick and informed her that he intended to return to work on 1 January 2005 and subsequently did so. Whilst circumstances had, admittedly, changed by this time given the respondent's decision regarding limited privileges and mentoring, nothing had changed in respect of the working environment at the Hospital about which the applicant had been so concerned and which caused him distress. Further, there was no indication that the diagnosis by Dr Eaton of the applicant's level of depression and anxiety had changed for the worst since the initial assessment in May 2004. 247 In December 2005, the applicant decided to cease practice. This decision coincided with Dr Eaton certifying for the first time that the applicant was unfit to perform his professional duties from 14 December 2005. I have no doubt that the unfair contract permitting, or failing to prevent, as it did, the conduct of the respondent, was the major cause of the applicant's anxiety and depression and the main reason why the applicant decided to cease practice when he did. The failure of the respondent to manage the review process so that it was completed in a timely manner meant that the applicant was deprived of the benefit of having his clinical competence determined within a reasonable timeframe. 248 The additional failures of the respondent to put in place recommendations that were reasonably capable of being carried out by Dr Wheelahan, to act with reasonable expedition and to provide reasonable assistance to Dr Wheelahan in relation to those recommendations, meant that the opportunity for the applicant to take steps to regain his full clinical privileges was further delayed throughout most of 2005. As a consequence, the applicant's mental state reached a point where he was no longer fit to carry out his professional duties. By December 2005 Dr Wheelahan was, understandably, mentally exhausted by the unjustifiably lengthy process he was required to endure. Moreover, it is reasonable to expect that by December 2005, if a proper mentoring process had been put in place by the respondent, with the applicant given the right to perform nephrectomies under supervision, it is highly possible the applicant would have been in a position to demonstrate that his full privileges should be restored and he would, thus, have returned to his maximum earning capacity. 249 I find that the applicant is entitled to compensation in connection with the varied contract for the period 14 December 2005, when Dr Wheelahan was declared unfit, to 30 June 2008, which was the date of expiry of the pleaded contract. From that amount shall be deducted any monies earned by the applicant between December 2005 to March 2006 in connection with those remaining patients on the applicant's waiting list and whom the applicant felt obliged to deal with before he closed his consulting rooms. The monies owed to the applicant should be calculated on the basis of average annual hospital earnings of $160,000, being an amount slightly less than the applicant's average hospital earnings over the preceding two financial years to 30 June 2003. 250 The applicant received an amount of $91,609 representing total disability benefits payable from 12 May 2006 to 16 June 2007. The amount included 5 per cent per annum compound interest calculated from 15 January 2007 to 5 June 2008. The applicant contended that he earned no income at all from medical practice during the period between May 2006 and June 2007, and the amount received did not cover his usual earnings from private practice, let alone his full income loss. Although it was conceded that it was open to the Court to have regard to this sum, in light of the nature and quantum of the sum it was submitted that it did not affect the applicant's claim for loss of earnings from the Hospital. 251 It is most unlikely the applicant would have been required to seek an insurance payout but for the unfair contract. As the amount paid did not cover the applicant's usual earnings from private practice the Court is prepared to exercise its discretion not to require any deduction from monies owed to the applicant by the respondent by an amount connected to the insurance payout.

252 The respondent submitted that the only evidence of loss was to a corporate entity, JB Wheelahan Pty Ltd. It was noted that JB Wheelahan Pty Ltd was not a party to these proceedings and it was not clear how the applicant claimed that the loss of earnings for JB Wheelahan Pty Ltd sounded in a loss to the applicant. This is particularly so, it was submitted, as the applicant drew income from JB Wheelahan Pty Ltd upon which he paid income tax. He gave evidence that JB Wheelahan Pty Ltd paid its own tax. In this respect, the applicant submitted there was no evidence that JB Wheelahan Pty Ltd paid its own tax. It submitted tax returns, but was not permitted to make any profit and was required to distribute all of its profits to the applicant. Accordingly, the corporate entity did not pay any tax (other than remitting the GST collected as part of the fees collected on behalf of the applicant). 253 I am satisfied the Court may treat the earnings of JB Wheelahan Pty Ltd as the measure of loss of the applicant to the extent I have determined. Compensation for stress and suffering

254 The applicant submitted that the jurisdiction of the Court to make orders for stress and suffering in connection with a contract found to be unfair was confirmed by the Full Bench in State of New South Wales v Banas (2004) 137 IR 63 at [88], approving King v State Bank (NSW) (No 2) (2002) 126 IR 407. In Banas the Full Bench considered that it should not interfere with the award of $12,500 made at first instance, although it is noted that such an award "was at the high end of what was appropriate". 255 It was submitted that the medical evidence in this case was consistent in demonstrating that the applicant suffered from an adjustment disorder with anxiety and depression. Counsel submitted that if the Court found that the relevant conduct of the respondent meant that the contract was unfair, then it would be appropriate to award a discrete amount to compensate for the illness (and associated symptoms and distress) suffered by the applicant as a result of that unfairness. In that respect, it was submitted this matter was analogous to Banas. The applicant claimed an amount of $15,000 as compensation for stress and suffering arising out of the applicant's employment. The respondent contended that the present case was a personal injury claim in disguise. 256 I have had regard to the Full Bench decision in Banas and the decision of Haylen J at first instance in Jozef Banas v State of New South Wales [2003] NSWIRComm 317 and to the authorities referred to therein. Those authorities indicate there is no jurisdictional bar to the Court making compensatory orders for stress and suffering. It is very clear from the findings I have made that there was direct relationship between the applicant's medical condition and the unreasonable and unfair treatment and conduct of the respondent that led to the contract being unfair. It is, therefore, appropriate in this case that there should be a separate amount paid by the respondent in relation to this aspect of the applicant's case. I intend to make an order for the payment of $10,000 for stress and suffering.

257 The Court makes the following orders: (1) The fee for service contract of 1 July 2003 between John Bernard Wheelahan and North Coast Area Health Service is varied to provide as follows: In the event that the North Coast Area Health Service refers a question about the clinical competence of John Bernard Wheelahan to his professional society for report, the North Coast Area Health Service shall: (a) take all steps necessary to facilitate the expeditious delivery of the report; (b) act in a procedurally fair manner in considering and determining any variation to Dr Wheelahan's clinical privileges as a result of the report; and (c) in relation to any recommendations for remediation which accompany any variation to the applicant's clinical privileges, only adopt such recommendations as are reasonably capable of being carried out by Dr Wheelahan, act with reasonable expedition and provide reasonable assistance to Dr Wheelahan in relation to any such recommendations. (2) In connection with the varied contract, the North Coast Area Health Service shall pay John Bernard Wheelahan compensation for the period 14 December 2005 to 30 June 2008 plus interest. The compensation shall be calculated on the basis of average annual hospital earnings of $160,000. From the resulting amount shall be deducted any monies earned by the John Bernard Wheelahan between 14 December 2005 to 14 March 2006 in connection with those remaining patients on the applicant's waiting list and whom the applicant felt obliged to deal with before he closed his consulting rooms. (3) The North Coast Area Health Service shall pay John Bernard Wheelahan an amount of $10,000 in relation to stress and suffering arising in the course of Dr Wheelahan's employment. (4) In consultation with the respondent, the applicant shall prepare draft short minutes of order to reflect the decision in this matter. The draft minutes shall be filed within 21 days of the date of this decision, together with any submissions by the applicant as to costs. The respondent shall have a further 14 days to file any submissions in reply both as to the draft order if there is any disagreement and as to costs. The applicant will have a further seven days to reply. Unless either or both parties request to be heard further on the terms of a final order and costs, these matters will be dealt with on the papers and a final order will be made in due course. ______________________________________

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