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Federal Court of Australia |
COURT
IN THE FEDERAL COURT OF AUSTRALIACATCHWORDS
Trade Practices - Supply by hospital to applicant of HIV- infected blood - Blood supplied to hospital by New South Wales Division of Australian Red Cross Society - Whether respondents were each a "trading corporation" - Whether supply "in trade or commerce" - Whether the hospital was an emanation of the New South Wales Crown - Claim of implied misrepresentation amounting to misleading conduct - Reliance on implied terms as to merchantability and fitness for disclosed purpose - Whether claims made within the prescribed time.Negligence - Adequacy of screening notices used by NSW Division in collecting blood donations - Whether respondents should have adopted surrogate testing at earlier date - Time taken to implement decision to adopt surrogate testing.
Trade Practices Act 1974 - ss4, 4B, 52, 55A, 71, 74, 82.
HEARING
SYDNEYCounsel for the Applicant: J. Poulos, QC and M. Cashion
Solicitors for the Applicant: J.M. Caruana Kay and Barry
Counsel for the 1st Respondent: L.M. Morris, QC, J.A. Timbs, QC and
A.
Robertson
Solicitors for the 1st Respondent: Arthur Robinson and Hedderwicks
Counsel for the 2nd Respondent: T.K. Tobin, QC, P. Dwyer and A.(NSW) Intervening:
RobertsonSolicitors for the 2nd Respondent: Tress Cocks and Maddox
Counsel for the 3rd Respondent: P.R. Garling and R. Gambi
Solicitors for the 3rd Respondent: Audrey Lee
Counsel for Attorney General P. Taylor
Solicitor for Attorney General Crown Solicitor(NSW) Intervening:
ORDER
The Application be dismissed.The applicant pay to the respondents their costs of the proceeding.Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
DECISION
This case concerns one of the major health problems of our time: acquired immune deficiency syndrome ("AIDS"). It is a tragic case, of AIDS contracted by the recipient of a post-operative blood transfusion. Because of its contamination, the transfusion which saved the applicant's life in 1984 threatens now to shorten his life.2. Before dealing with this particular case, it is desirable for me to say something about the large number of AIDS claims now confronting the Court.
3. During the afternoon of 8 November 1989 an application was made to me in chambers by counsel and his instructing solicitor. The solicitor was about to file 30 Applications, on behalf of 30 separate clients, each seeking damages from the Australian Red Cross Society ("the Society"), the New South Wales Division of that Society ("the NSW Division") and one or more other respondents. Each of the proposed applicants, I was informed, was a person infected with the human- immuno deficiency virus ("HIV") who claimed to have become so infected as a result of receiving whole blood, or one or more products made from whole blood, garnered from donors at a blood bank operated by the NSW Division. Counsel asked that, in each case, I make an order under s.50 of the Federal Court of Australia Act 1976 prohibiting publication of the name of the applicant. He gave as his reason the stigma which, in our community, still attaches to persons who are known to be HIV positive and the likely prejudice and embarrassment to the applicants and their families of any publicity about the proceedings. I acceded to the request, reserving until the trial of each matter the position which should then apply.
4. The 30 Applications were filed on the day the confidentiality order was made. Subsequently, a further 12 similar Applications were filed. The same confidentiality order was made in respect of these matters. At the directions hearings the matters were listed as "Various applicants v Australian Red Cross Society and others", references being made to the proceeding number where it was necessary to distinguish one case from the others. The 42 cases presented the Court with a management problem. It was obviously impossible to expect the parties' advisers to prepare all matters for trial simultaneously. But because the life expectancy of people infected with HIV is considerably less than normal, it was especially important to expedite the final disposal of the cases.
5. One of the cases was dismissed by consent. The remainder are unconcluded. They have many features in common. In each case, reliance is placed upon provisions in the Trade Practices Act 1974. With minor exceptions, in each case all the respondents dispute the application of those provisions. They deny that they are corporations to which the Act applies and also that the supply of blood to the various applicants was an act "in trade or commerce". By a notice of motion heard on 5 April 1990, an application was made for trial of those questions as preliminary issues. I refused that application, taking the view that this course would cause unnecessary delay in the final resolution of the cases; particularly if there was an appeal against the decision on the preliminary issues. I had in mind that, irrespective of the application of the Trade Practices Act, there were other causes of action relied upon by each applicant, notably negligence. These issues would, in any event, require an investigation of many of the facts which were relevant to the Trade Practices Act claims. On 1 May 1990 the Full Court refused the respondents' application for leave to appeal against my decision on the notice of motion.
6. The legal issues concerning the application of the Trade Practices Act are not the only common features of the various claims. Fundamental to each is the sufficiency of the steps taken by the respondents, especially the Society and the NSW Division, to protect the donated blood supply from HIV contamination. In particular, questions arise in each case as to the adequacy of the steps taken to screen donors - by such means as notices, questionnaires and interviews - and whether hepatitis B surrogate testing ought to have been adopted earlier or more widely. In the present case these issues have generated a considerable body of evidence. But the evidence stops at October 1984, the month of the subject donation and transfusion.
7. If there were in force in this Court provisions relating to grouped proceedings, such as those recommended by the Australian Law Reform Commission in its report "Grouped Proceedings in the Federal Court" (ALRC 46), it would have been possible for the Court to determine all common questions of fact or law at a single hearing in such a manner as to make the result binding on all applicants and all respondents. Those questions could have included not only the Trade Practices Act issues but also, with very little additional evidence, the issues regarding screening and surrogate testing at dates after October 1984. The result would have been to avoid the repetition in each of the later cases of most of the evidence in this case, with consequential savings in costs and the earlier finalisation of the whole litigation. But that recommendation has not become law. So it will be necessary to deal with each of the cases separately. Perhaps the parties in the later cases will choose to be bound by the ultimate result of the present case, in respect of relevant issues. To that end and even though it may be strictly unnecessary to do so, I propose to make findings on all of the issues of fact and law which were litigated in this proceeding.
8. Despite the common elements in the claims, there are differences in the circumstances under which the various applicants, on their allegations, became HIV infected. Some applicants claim to have become infected as a result of a single post-operative or post-parturition transfusion. Some claim to be haemophiliacs who have received blood products on numerous occasions. The applicant whose case was discontinued, and who has since died, was an infant infected as a result of breast feeding by her mother, who had received the virus in a post-parturition transfusion. Moreover, the date at which the particular applicants allegedly received the blood or blood product is an important matter. Most, if not all, claims relate to donations received during the years 1983, 1984 and 1985. During this period there was a steady growth in scientific knowledge about the virus and in awareness, both in scientific circles and amongst the public generally, of the devastating nature of its final form, category 1 or "full" AIDS. During this period the NSW Division made changes to its screening and testing procedures in order to reduce the likelihood of HIV contamination. The adequacy of those changes is a matter of controversy in this proceeding. At this stage, I merely make the point that it is impossible to evaluate these cases - at least the claim of negligence in each of them - without paying careful attention to the date or dates of the relevant donation or donations.
9. The increase in knowledge and awareness did not stop in 1985. The danger
of applying hindsight occurs in most litigation; but
it is particularly
pertinent to these cases. Since the relevant dates there has been a
significant advance in the scientific understanding
of AIDS, combined with
massive publicity in the popular media. Everyone involved in this case has
had constantly to remember the
necessity of going back to the circumstances
applicable at the time of the subject donation, as revealed by the evidence.
The issues
10. The legal issues in this case are complex. They have caused the parties to adduce a considerable body of detailed evidence. My account of that evidence must necessarily be lengthy. In the hope that it may assist an understanding of the significance of matters mentioned in that account, I immediately summarise the issues raised between the parties.
11. The claim of the applicant is that, on 12 October 1984, there was administered to him at The Royal Prince Alfred Hospital, Sydney, a transfusion of fresh frozen blood plasma which was HIV infected. He brings his claim against three respondents: the Society, the NSW Division and the Central Sydney Area Health Service. As their names suggest, the first and second respondents are closely related; the second respondent is actually a component of the first respondent. Yet each is a separate corporate entity capable of being sued in its own name. The applicant claims that the Society is responsible for, and supervised, the blood collection activities of the NSW Division. This claim is not admitted. The applicant further claims that the NSW Division at material times engaged in the collection and fractionation of blood and its distribution to The Royal Prince Alfred Hospital, a claim which is, in substance, admitted. The applicant further claims that each of the Society and the NSW Division was, at material times, a "trading corporation" within the meaning of the Trade Practices Act. This claim is contested by each respondent. The issue thus created is critical to the question whether the provisions of that Act are available against those respondents. It has caused the tender of a considerable body of evidence concerning the nature, history and operations of those two respondents.
12. The Central Sydney Area Health Service did not exist in October 1984. It was created by legislation enacted in 1986. But that legislation made the Service responsible for the liabilities of a corporation which was then dissolved: The Prince Alfred Hospital. So the critical question, insofar as this respondent is concerned, is the liability of the abolished corporation. As to that matter, the applicant says that the abolished corporation was also a 'trading corporation' - a proposition which is denied. Furthermore, this respondent says that the abolished corporation was an emanation of the Crown in right of the State of New South Wales; so that, in any event, it was not bound by the Trade Practices Act. Once again, these issues have resulted in a deal of evidence regarding the hospital, its history, finances and activities. For convenience, I will use the term "the respondents", in some contexts, so as to include The Prince Alfred Hospital.
13. The allegation that the applicant became HIV infected as a result of the blood transfusion was not admitted on the pleadings. But it was not actively contested at the trial. However, the respondents disputed each of the bases of liability advanced against them by the applicant.
14. As against all three respondents, the applicant alleges negligence. Although the matter was pleaded in wider terms, in their opening address counsel for the applicant confined themselves to two heads of negligence. First, they said that the procedures adopted by the NSW Division for the exclusion from the blood donor pool of persons within the known AIDS high risk categories were inadequate. In particular, they criticised the form of the warning notice given to donors, the failure to provide face-to-face questioning and counselling of donors and the lack of any system permitting an embarrassed donor anonymously to request the discarding of his or her donation.
15. Secondly, conceding that no specific test for HIV infection was then available, counsel contended that the first and second respondents ought, by the date of the donation, to have had in place a surrogate test, for hepatitis B core antibodies ("anti-HBc"), which would have identified many of those persons in high risk groups who gave blood despite the warning. They said that, if an anti-HBc test had been applied to the donation which infected their client, that donation would probably have been discarded and the infection avoided. Counsel suggested that the Society is answerable for the negligence of the NSW Division; either on the basis that the NSW Division is part of the Society, so that the acts of the Division are the acts of the Society, or on conventional agency principles. Each of the contentions of negligence is contested by counsel for the Society and the NSW Division.
16. It is not suggested that the hospital had anything to do with the collection of the blood donation or its processing into fresh frozen plasma. The claim against the hospital is that it was negligent in transfusing the plaintiff with blood plasma which had not been collected in accordance with proper procedures, as identified in the submissions already mentioned.
17. The applicant also relies on a series of representations said to have been made to him on behalf of the various respondents. I will set them out later. For the moment, it is enough to say that counsel for the applicant do not suggest that any express representations were made. They say that the representations were implied by the circumstances of the transfusion. They seek to use those representations to support three claims: negligent misrepresentation, that the various respondents engaged in misleading conduct in breach of s.52 of the Trade Practices Act and that they engaged in conduct that was liable to mislead the public as to the nature, characteristics or suitability for its purpose of the plasma, in breach of s.55A of that Act. The last two claims each raise the question whether the respondents, or any of them, acted "in trade or commerce" in making any relevant representations; only conduct in trade or commerce is caught by these sections.
18. Finally, the applicant relies on two sections of the Trade Practices Act, ss.71 and 74, which imply into certain types of contacts particular conditions and warranties regarding merchantability and fitness for purpose. The applicant says that these sections apply to his case and that the respondents, or one or more of them, breached those implied terms. Alternatively to s.71, the applicant relies on s.19 of the Sale of Goods Act 1923 (NSW).
19. More than three years elapsed between the date of the transfusion and the commencement of the proceeding. Pointing to s.82(2) of the Act, the respondents say that the claims under the Trade Practices Act are made out of time. There is no suggestion that the common law claims are statute-barred.
20. At one stage of the proceedings one of the respondents thought that a
question might arise as to the meaning of "trading corporation"
in s.51(xx) of
the Constitution. Accordingly, notice of the case was given to the various
Attorney Generals pursuant to s.78A of the Judiciary Act 1903. Only the
Attorney-General for New South Wales chose to intervene. He appeared by
counsel to put submissions regarding the meaning
of "trading corporation" in
the Trade Practices Act. Counsel argued that, as the meaning of this term in
the Act was the same as that in s.51(xx), any question regarding construction
of the statutory definition was a matter involving the interpretation of the
Constitution. I have reservations about this process of reasoning; but
nonetheless I was happy to accept the proffered assistance of counsel in
connection with the meaning of both "trading corporation" and "in trade and
commerce". I will not normally need to refer separately
to those submissions.
They were generally consistent with the submissions made by the respondents
and may be considered in that context.
The nature of AIDS
21. AIDS is a condition in which the body's immune system is seriously weakened, rendering the person vulnerable to diseases which he or she would normally fight off. It is now known that the condition is caused by a virus, originally called human t-lymphothatic virus-3 (HTLV-3) but now generally referred to as HIV. It is also known that this virus affects people in different ways. In the incubation stage there may be little or no effect upon the general health or feeling of well-being of the patient. Even today, when there is a reliable test for the presence of the virus, the virus will not normally be detectable for some two to four months after infection. At one stage it was thought that any HIV infection would progress to full AIDS within a very short period, perhaps no more than a year or so. But it is now known that this does not always occur. A small proportion of the persons known to have contracted HIV in the early 1980's still do not exhibit any serious symptoms. Some patients with HIV infection exhibit the lymphadenopathy syndrome, sometimes called "the AIDS-related syndrome". The immune system is impaired, but not so completely as for full AIDS, and the effect is not so devastating. The patient may or may not go on to develop full AIDS.
22. The major characteristic of full AIDS is that, because of the collapse of
the immune system, the patient develops an opportunistic
infection which
causes a debilitating, and ultimately fatal, illness. These illnesses include
an otherwise unusual form of pneumonia,
Pneumocystis carinii pneumonia, a rare
cancer, named Kaposi's sarcoma, a form of herpes known as cytomegalovirus
infection and premature
senile dementia. As I understand the position, death
usually ensues within about two years of the onset of full AIDS, although
there
is now reason to believe that the drug AZT may extend this period.
AIDS in America
23. The occurrence of AIDS has been monitored since 1981. In the developed world, at least in the period to October 1984, the country most affected by the virus was the United States of America. Much of the research regarding the disease was performed in that country and it is common ground between the present parties that Australians charged with the duty of combating the virus looked to, and were entitled to look to, United States' scientific knowledge and experience. Parties on both sides of the record called a United States' expert witness and relied on United States' publications. So it is useful to attempt a brief account of the evidence regarding the position in that country.
24. The bundle of extracts from scientific publications which has been tendered in evidence includes some early articles discussing occurrences in America of infections which are now known to be associated with AIDS: see "Prevalence of Cytomegalovirus Infection in Homosexual Men", Journal of Infectious Diseases, February 1981; "Pneumocystis Pneumonia - Los Angeles", Morbidity and Mortality Weekly Report ("MMWR"), 5 June 1981; "Kaposi's Sarcoma and Pneumocystis Pneumonia Among Homosexual Men - New York City and California", MMWR 4 July 1981; "Kaposi's Sarcoma in Homosexual Men - A report of eight cases", The Lancet, 19 September 1981. But, so far as the evidence reveals, the earliest article in which a link was made between these illnesses and immune deficiency was one published in the issue of "The New England Journal of Medicine" ("NEJM") of 10 December, 1981. This article, entitled "Pneumocystis Carinii Pneumonia and Mucosal Candidiasis in Previously Healthy Homosexual Men - Evidence of a new acquired cellular immunodeficiency", described four case histories. The authors noted that each patient had a marked imbalance of peripheral-blood T-cell subsets. The normal ratio of T helper cells to T suppressor/cytotoxic cells was inverted. In the light of later knowledge, there is little doubt that the patients described in this article were suffering from what now would be described as full AIDS.
25. "The Lancet" of 12 December 1981 contained an editorial note, headed
"Immunocompromised Homosexuals", which noted that the Centers
for Disease
Control ("CDC") in Atlanta, Georgia, were currently aware of nearly 180 cases
of Kaposi's sarcoma and/or pneumocystis
pneumonia "and the numbers are
increasing at 7-10 a week". The note went on:
"The epidemic seems to be largely confined to urban26. The note went on to refer to the reversal of the normal ratio of T helper to T suppressor cells in the patients suffering cytomegalovirus infection.
areas of New York and California. Most of the patients
are young white males (95% aged less than 50) and 94%
of them are homosexual or bisexual. The case fatality
rate, due to the effects of the tumour or overwhelming
infection, has been an alarming 40%".
27. Over the following year or two, there was a plethora of learned articles
describing aspects of the new disease. It is not necessary
to refer to them
individually. But it is interesting to note a comment in the 21 May 1982
edition of MMWR regarding the incidence
of lymphadenopathy among homosexual
males. The author did not connect that condition to the more serious illnesses
previously reported.
However, by the end of the year, it was realised that
all of those illnesses were related, in this context; and the name "acquired
immune deficiency syndrome" was being used to describe the new disease. The
10 December 1982 issue of MMWR contained a report of
a possible
transfusion-associated case of AIDS, the patient being an infant transfused
during the first month of his life with blood
donated by a male donor who had
since died of AIDS type infections. An editorial note was added to the
report:
"The etiology of AIDS remains unknown, but its reported28. The note concluded with a comment that the report, and continuing reports of AIDS among persons with haemophilia, "raise serious questions about the possible transmission of AIDS through blood and blood products. The Assistant Secretary for Health is convening an advisory committee to address these questions".
occurrence among homosexual men, intravenous drug
abusers, and persons with hemophilia A suggests it may
be caused by an infectious agent transmitted sexually
or through exposure to blood or blood products. If the
infant's illness described in this report is AIDS, its
occurrence following receipt of blood products from a
known AIDS case adds support to the infectious-agent
hypothesis."
29. This committee met in January 1983. At about that same time, NEJM quoted a report from CDC of three cases of AIDS amongst haemophiliacs. The deliberations of the advisory committee were reported in the "Journal of the American Medical Association" ("JAMA") of 4 February 1983 under the heading: "Preventing AIDS transmission: should blood donors be screened?" The report included a reference to two adults "who may have acquired AIDS through whole blood transfusions during surgery". But its main function was to record the views expressed at the committee meeting. Some people expressed doubt whether AIDS was transmissible by whole blood transfusion, some were not even sure that haemophiliacs receiving factor VIII concentrate were in danger. But, according to the report: "Many public health officials ... were convinced that there is a risk, although its magnitude cannot yet be estimated, and that swift action must be taken".
30. However, JAMA reported that "(w)hen it came to recommending preventative
measures ... disagreement was strong". One of the possibilities
which was
mentioned was a "laboratory test, such as measurement of antibody to hepatitis
core antigen, that will identify persons
at high-risk of having AIDS".
Another was "asking all persons in high-risk groups donating blood to identify
themselves so that their
plasma could be excluded from factor VIII
preparations". The rationale of the first suggestion - which is one pressed
by the applicant
in this case - was explained in the report:
"Since there currently is no test to detect persons31. Reference was made to cost factors and the difficulty of explaining to "those 5% of the normal population who will be positive for anti-HBc ... (that) their blood is no good, but they're healthy". Under the heading "Excluding High-Risk Plasma ... or Trying to" the report recorded a variety of views about the reasonableness and practicality of asking homosexual blood donors to identify and exclude themselves. There was no consensus at the meeting. As the report put it: "Faced with these conflicts, CDC officials returned to their offices to try to devise recommendations".
with AIDS or its prodromal illness, another approach is
to see whether any test will detect a person at
increased risk of having AIDS.
CDC immunologist Thomas Spira, MD, described the
results of evaluating several such 'surrogate' tests in
persons with AIDS or its prodromal illness. The most
successful was measurement of antibody to hepatitis B
core antigen. The reason: Hepatitis B is prevalent in
the same populations that are at high risk for AIDS.
Antibody to core antigen remains elevated even after
recovery from acute hepatitis B, so it identifies all
persons who have had hepatitis.
This test yielded positive results in 90% to 100% of
AIDS patients in various groups (homosexuals, IV drug
abusers, Haitians). Results also were positive in 80%
of persons with lymphadenopathy, a prodrome of AIDS.
In contrast, among first-time contributors to a
voluntary blood bank, results were positive in 5%.
Spira said the assay could be introduced into routine
laboratory testing. There is only one manufacturer of
commercial kits, however, and some people wondered
whether the supply of reagents could be increased
rapidly. Others thought this would not be a major
problem."
32. However, agreement was reached amongst a different group of people,
representing the American Association of Blood Banks, the
American Red Cross
and the Council of Community Blood Centers, with assistance from the American
Blood Commission, National Gay Task
Force, the National Hemophilia Foundation
and representatives of the American Blood Resources Association, CDC and the
Food and Drug
Administration ("FDA"). That group issued a joint statement on
13 January 1983, which was published in the March-April issue of
"Transfusion". It contained seven recommendations. They included donor
screening, including specific questions to detect possible
AIDS or exposure to
patients with AIDS. "In particular, all donors should be asked questions
designed to elicit a history of night
sweats, unexplained fevers, unexpected
weight loss, lymphadenopathy, or Kaposi's sarcoma." But the statement stopped
short of recommending
questions about sexual preferences and habits, the
exclusion of members of high risk groups or surrogate testing:
"6. A major area of concern is whether attempts to33. Neither CDC nor its advisory committee ever made a recommendation in favour of surrogate testing. But in March 1983 CDC called on blood collecting agencies to request that "members of high-risk groups, including sexually active homosexual or bisexual men with multiple partners, voluntarily refrain from donating blood." The June issue of "The Journal of Anesthesiology" reported that these recommendations "were accepted quickly by the blood collecting sector, and appropriate measures for voluntary screening now are in place in almost all areas of the country".
limit voluntary blood donation by individuals from
groups with a high prevalence of AIDS are appropriate
at present. This question has medical, ethical, and
legal implications.
a. The presently available medical and scientific
evidence that AIDS can be spread by blood components
remains incomplete. Fewer than 10 cases of AIDS with
possible linkage to transfusion have been seen despite
approximately 10 million transfusions per year.
Ongoing epidemiologic studies of all cases of AIDS are
being conducted at this time. Should evidence of a
clearly implicated donor population become apparent,
specific recommendations to the blood banking community
will be made promptly.
b. There is currently considerable pressure on the
blood banking community to restrict blood donation by
gay males. Direct or indirect questions about a
donor's sexual preference are inappropriate. Such an
invasion of privacy can be justified only if it
demonstrates clear-cut benefit. In fact, there is
reason to believe that such questions, no matter how
well-intentioned, are ineffective in eliminating those
donors who may carry AIDS.
7. While there is no specific test for AIDS, there are
laboratory and clinical findings that are present in
nearly all AIDS patients. The use of these
non-specific markers - for example, lymphopenia, immune
complexes, and anti-HBc - are being evaluated in those
areas of the country where AIDS is prevalent. We do
not advise routine implementation of any laboratory
screening program for AIDS by blood banks at this time."
34. As 1983 went on, the AIDS articles in the medical literature continued:
studies showing the incidence of AIDS amongst intravenous
drug abusers, blood
product recipients, haemophiliacs, children in high risk households and the
female sexual partners of AIDS infected
men and reports of the relationship
between abnormal T-cell ratios and the incidence of AIDS. Sometime between
March and May 1983,
the Stanford Medical School Blood Center, a centre
associated with the School of Medicine at Stanford University in California,
introduced
the first surrogate testing program for AIDS. This was done at the
instance of Professor Edgar Engleman, the Director of the centre
and the
Associate Professor of Pathology and Medicine within the university.
Professor Engleman chose not to adopt anti-HBc tests,
but rather a test which
measured the ratio between the T4 and T8 cells. In evidence in this case he
explained why he took that course:
"We felt that the T cell abnormality was in all35. But he explained that Stanford had special advantages in deciding to adopt the T4:T8 test:
likelihood resulting from the disease itself, from the
condition itself. In contrast we thought the hepatitis
B core antibody test positivity was a lifestyle
reflection, if you will."
"...we had a substantial research effort and interest36. Nonetheless, Professor Engleman saw value in anti-HBc
in white blood cells, human white blood cells and we
had the machinery, the equipment, the technologist to
do that test. Once the decision was made we were able
to institute it within a matter of days."
tests for other blood banks:37. Consistently with his opinion, Professor Engleman pressed other blood banks to introduce anti-HBc surrogate testing. The Stanford Medical School Blood Center was not able to supply all of the blood required at the Stanford University Hospital, with which Professor Engleman was also associated. The remainder came from the Peninsula Memorial Blood Bank and the American Red Cross blood bank in San Jose. Beginning in October 1983, Peninsula Memorial Blood Bank sent about half the blood it supplied to Stanford University Hospital to the Stanford Medical School Blood Center for T4:T8 testing. This was all that the centre could take. But this was only a temporary measure. As from 1 April 1984 the Peninsula Memorial Blood Bank applied an anti-HBc test to all blood. The American Red Cross blood bank at San Jose took a similar course at about the same time, so that, thereafter, all the blood used at Stanford University Hospital was surrogate-tested.
"I think for most blood banks whether they are larger
than ours or not the hepatitis B core antibody test was
more practical. It utilized equipment that was on hand
already. At most blood banks it used a format
technology that was already a common place in blood
banks. It was quite similar to the pre-existent
hepatitis B surface antigen test so the technologists
really needed minimal additional training. Reagents
were available commercially; it is a semi-automated
test relatively inexpensive and lastly it could be
performed on blood that was not fresh. The T cell test
required blood that was less than three days old.
Q. When consideration of costs was taken into account
what was the differential between the T4T8 and the
hepatitis B core antibody test in 1983?
A. Well, we estimated the cost of the T4:T8 test to be
approximately $6 per blood component derived from a
donation, roughly $12 to $15 per donor, if you will.
The hepatitis B core antibody test was for the testing,
reagents equipment and the like was probably $2 or $3
per test."
38. The issue of NEJM of 8 September 1983 published an editorial article by
Dr James Curran of CDC headed "AIDS - two years later".
This article
contained the information that, by August 1983, a total of 2,008 United
States' AIDS cases had been reported, using
as the criterion the otherwise
unexplained presence of one or more of the "marker" conditions such as
Kaposi's sarcoma and Pneumocystis
carinii pneumonia. Dr Curran said:
"Most of the patients in the United States fit a39. In this article, Dr Curran referred to the "widespread acceptance of the hypothesis that AIDS is caused by a transmissible agent". But the identity of that agent was still unknown.
pattern with regard to suspected risk factors: 1429 (71
per cent) were homosexual or bisexual men, 339 (17 per
cent) were men or women who abused intravenous drugs,
and 15 (1 per cent) were patients with hemophilia. Of
the other 225 patients with AIDS (11 per cent), 105
were Haitians, 20 were heterosexual sexual partners of
persons in an AIDS risk category, and 19 were adults
without other identified risk factors who had received
blood or blood products within five years before their
illness. None of the donors of the blood involved in
the last-mentioned cases have been reported to have
AIDS, but further investigations are underway."
40. Two months later, in November 1983, a French scientist, a Dr Montagnier, spoke at a meeting in Geneva convened by the World Health Organisation. He presented what one listener, Professor Ian Gust, the then Director of the Virus Laboratory at Fairfield Hospital, Melbourne, described in evidence in this case as "the first tentative evidence that he had identified the agent responsible for AIDS". But, Professor Gust said, there was no consensus at the meeting that Dr Montagnier had been successful. So a program of confirmatory research was commenced in the United States under the leadership of a Dr Gallo.
41. In the meantime, the surrogate testing debate continued. It seems that Professor Engleman was a leading participant. At a number of meetings in the latter half of 1983 Professor Engleman argued for anti- HBc surrogate testing. These meetings included a large meeting convened by FDA in Bethesda, Maryland on 15 and 16 December 1983. But, although some other speakers favoured anti-HBc testing, many were opposed. They thought that the degree of correlation between anti-HBc positivity and being at high risk of carrying the putative virus was insufficient to justify the tests. Some speakers were concerned that the results could be misleading. Some were worried about the costs of an anti-HBc screening program; both financial cost and the waste of usable blood. (Blood is not unsuitable for transfusion or processing into blood products merely because it contains hepatitis B core antibodies. It was accepted on all sides that many people who tested anti-HBc positive would not in fact be HIV carriers.) No consensus was reached at the meeting. At no stage did FDA make any recommendation in favour of surrogate testing.
42. The 12 January 1984 issue of NEJM focussed its attention upon the relationship between AIDS and blood transfusion. The journal published a study by a team of researchers, led by Dr Curran, regarding 18 adults without other risk factors in whom AIDS had developed after transfusions. The researchers pointed out that these cases represented only about 1% of the United States' AIDS cases reported over the same period, approximately one year. But they also observed that "most of these patients received their transfusions between 1979 and early 1982, a time when the prevalence of AIDS - and presumably of donors affected by the putative AIDS agent - was much lower than during late 1982 and early 1983".
43. The journal also published, in the same issue, an editorial comment by Dr Joseph Bove, Director of the blood bank at the Yale University School of Medicine. It was entitled "Transfusion-Associated AIDS - A Cause for Concern". Although he noted the absence from the Curran paper of any information about what happened to recipients of other blood components from the suspect donors - most donations are divided into components administered to different patients - Dr Bove did accept that "Curran's data provide substantial evidence that transfusion-related AIDS does occur". He noted the steps already taken to exclude high risk donors and emphasised the importance of physicians weighing carefully the necessity to administer blood. But, otherwise, Dr Bove made no recommendations. In particular, he said nothing about surrogate testing which - we know from the evidence of Professor John Dwyer, who was then his colleague at Yale - he did not favour.
44. Others shared Dr Bove's view. The division of opinion about surrogate
testing which had characterised the FDA December 1983
meeting also occurred in
the deliberations of a working group set up by the Council of Community Blood
Centers to review the issues
there discussed. The study group included
representatives of the commercial and non-commercial fractionation industry,
the plasma
pheresis community, non-profit blood collection and processing
organisations and FDA. In a statement published on 16 March 1984 the
Chairman
of the study group said, amongst other things:
"The study group was divided in its position on testing45. Notwithstanding the majority opinion, some blood centres did introduce surrogate testing in the first half of 1984. Reference has already been made to two of them, the Peninsula Memorial Blood Bank and the American Red Cross blood bank at San Jose. About three other blood centres, all in San Francisco, also introduced anti-HBc testing during the first half of 1984. They included the Irwin Institute, directed by Dr Herbert Perkins. Dr Perkins had run a pilot anti-HBc HBc test program during 1983. But he then decided not to proceed with a full program; indeed, he expressed reservations about anti- HBc testing at the December 1983 FDA meeting. Also, at a stage which is not identified by the evidence, some blood banks in the New Orleans district of Louisiana introduced T4:T8 testing. The evidence does not reveal the number of banks that took this step, but I gather that they were only a few.
for anti-HBc as a means of identifying AIDS high risk
group members, with the majority believing that such
testing was not appropriate for that purpose. However,
members of the majority group indicated that they would
likely be compelled to follow suit if any of the
organizations represented initiated anti-HBc testing
programs. The report to be prepared will contain
certain position papers summarizing the majority and
minority opinions on this issue. It was clearly
recognized by the study group that a positive finding
of anti-HBc in an individual was not necessarily
indicative of AIDS or the future development of the
disease state. Rather, it was viewed as a possible
mechanism of identifying high risk group members, a
number of whom are positive for this serologic marker.
It was the prevailing opinion of the study group that
if testing programs for anti-HBc are employed, they
should not be confined to the plasma donor population
but should extend to whole blood donors as well."
46. On 23 April 1984 a press conference was called in Washington DC by Mrs Margaret Heckler, Assistant Secretary of Health, to announce that the research team led by Dr Gallo had confirmed Dr Montagnier's identification of the agent responsible for AIDS. This was the virus now known as HIV. Mrs Heckler announced that pedigreed strains of the virus would be supplied to five pharmaceutical companies to enable them to develop a test which was specific to the identified virus. She promised that the test would be commercially available within six months.
47. In the meantime, blood bank operators had the continuing problem of how best to protect the blood supply from contamination. But there was no rush to adopt surrogate testing. So far as I can make out from the evidence, no more than about ten blood banks in the United States, out of some 2000, ever adopted surrogate testing. No blood banking or governmental organisation ever recommended the adoption of surrogate testing, of any kind.
48. The cause of surrogate testing suffered a set back by the publication of
an article by Drs Toby Simon and Arthur Bankhurst, both
of the University of
New Mexico School of Medicine, entitled "A pilot study of surrogate tests to
prevent transmission of acquired
immune deficiency syndrome by transfusion".
This article was accepted for publication in February 1984, although it was
not actually
published until the September/October issue of "Transfusion".
The gist of the article is conveyed by its abstract:
"Because of reports that acquired immune deficiency49. The conclusion expressed in the last sentence of the abstract has been criticised in this case. Dr John Ziegler, a senior lecturer in paediatrics at the University of New South Wales and a person with a long interest in immunology, said that he thought that the authors had "asked themselves the wrong question". He did not see any significance in the fact that there was little correlation between the results of the various tests. He thought that the relevant question was whether any one of those tests would provide reliable guidance as to the likelihood of HIV infection. If one would do so, it could hardly matter that the other tests provided no such assistance; that as between themselves they showed no consistent correlation. Dr Ziegler thought that the data revealed in the article actually supported the utility of the anti-HBc test. He referred to the finding that 38.5% of the tested male homosexuals were anti-HBc positive. I see the force of these criticisms. But, whatever the logic of the article's final conclusion, it was published in a respected, peer-reviewed journal which specialised in matters relating to blood transfusion. Apparently, it helped to entrench opposition to surrogate testing.
syndrome (AIDS) might be transmissible by blood
transfusion, we studied potential surrogate tests that
could be used for screening donors. Male donors at one
volunteer blood center and two plasma centers were
screened for total lymphocyte count, OKT3, OKT4, OKT8,
OKT11, LEU-7, LEU-M2, antibodies to hepatitis B core
(anti-HBc), cytomegalovirus (CMV), and herpes and
circulating immune complexes. Total lymphocyte counts
and the OKT11 were significantly lower in one plasma
center. No significant differences were found for the
other lymphocyte or monocyte tests. Low T4/T8 ratios,
found in 20 percent of donors, did not correlate with
other abnormalities. A small percentage (3.3%) of
volunteer donors, 15.4 percent at one plasma center and
20.8 percent at a second plasma center, and 38.5
percent of the male homosexual donors were positive for
anti-HBc (significant when comparing the male
homosexuals to the volunteers at p=0.032). Positive
CMV and herpes titers were similar in the groups.
Circulating immune complex levels greater than two
standard deviations above the mean were found in 20
percent of the volunteer donors, 7.7 percent at one
plasma center and 8.3 percent at the second plasma
center, and none in the male homosexual population.
Pearson product moment correlations showed reasonably
good agreement among the lymphocyte tests. However, the
anti-HBc, CMV, and herpes antibodies and circulating
immune complex levels did not correlate with any of the
other tests. Surrogate tests for AIDS are nonspecific
and unlikely to be helpful in screening blood donor units."
50. As is sometimes the way with the undertakings of politicians, the six months promise made by Mrs Heckler proved too optimistic. The new HIV test did not become commercially available, in the United States, until March 1985; although, in the meantime, some laboratories had been able to carry out limited testing, using cultured cells of the virus. When the commercial test became available, it was immediately widely adopted. The debate on the suitability of anti-HBc testing lapsed, except in the law courts.
51. As October 1984 is a critical month for the purpose of this case, before concluding this account of the position in the United States it is worth noting the then most recently published statistics as to the incidence of AIDS in that country, at least as revealed by the evidence. The 22 June issue of MMWR records that, as of 8 June 1984, 4,918 patients had been reported as meeting the CDC surveillance definition for AIDS. The number of new reports had increased in each quarter since the beginning of 1982. In the January-March quarter of 1984, the last full quarter available, the figure was almost 900. Of all reported patients, 45% were known to have died. More than 76% of the patients diagnosed before July 1982 were dead. Homosexual and bisexual men accounted for 72% of all patients, intravenous drug users a further 17%. Fifty two adults (about 1% of all patients) had been transfused with blood or blood products within two years of the illness onset and had no other known risk factor`for AIDS; of them, 27 had died.
52. By way of footnote to these figures, and illustrating the point I made at
the outset of these reasons about events since 1984,
I add that - according to
an article by Dr Susan Leitman and others, published in NEJM on October 5,
1989, and to which I will return
in another context - in the further four
years to June 1988 the total number of reported American cases multiplied
sixteen times
to 79,823, of which about 3% (2144) were blood
transfusion-associated cases.
AIDS in Australia
53. The evidence shows that the major American medical journals circulated widely in Australia. I have no doubt that practitioners in relevant specialist areas, including immunology and blood banking practice, were aware of the reports in the American literature. But, so far as the evidence reveals, there was no article on AIDS in any Australian medical journal until 11 June, 1983. On that day "The Medical Journal of Australia" published five articles. One article, written by Professor Ronald Penny of the University of New South Wales and St Vincents Hospital, Sydney, and others, reported the illness of a 27 year old American homosexual man who was treated in St Vincents Hospital for AIDS-like symptoms in late 1982. The authors indicated their belief "that this patient represents the first Australian case of a new disease which has become known as the acquired immune deficiency syndrome (AIDS)", which they went on to describe in some detail.
54. Two articles concerned the prodromal form of AIDS (lymphadenopathy). One was written by six members of the Department of Clinical Immunology at The Royal Prince Alfred Hospital, Sydney, including Dr Paul Gatenby, a witness in this case. They reported case studies "of two homosexual men whose symptoms may represent early examples of prodromal AIDS in Australia". Only one of the patients was reported as having visited the United States. The other dealt with two prodromal cases treated at Concord Hospital. A further article, by Dr David Cooper of St Vincents Hospital contained a report of an AIDS symposium at the New York University Medical Center which he had attended during the previous March.
55. These articles were introduced by a leading article written by Dr Mutton
and Professor Gust, of Fairfield Hospital. They referred
to the "growing
feeling that a novel agent is involved" and said that "transmission via blood
and blood products seems likely".
Their article concluded:
"Homosexual persons, or others seeking advice about56. Reading these contributions to "The Medical Journal of Australia", it seems to me that their combined effect was to supply readers with a comprehensive understanding of the aetiology and epidemiology of the disease, insofar as these were known, together with an understanding of its extent and morbidity within the United States. But none of the articles made suggestions for preventative measures, except for the suggestions about homosexuals restricting sexual activities and the avoidance of recreational drug use. However, some thought was being given to these matters, at least in connection with blood transfusion. Even before the publication of the 11 June articles, but after he learned of Professor Penny's case, Dr Gordon Archer, the Director of the Blood Transfusion Service ("BTS") of the NSW Division, made a public statement - apparently in early May 1983 - requesting homosexual men not to donate blood. The evidence does not reveal the terms of this statement, but whatever they were, the statement was given prominence in the media. It brought upon Dr Archer the wrath of some people within Sydney's homosexual community. The blood bank in Clarence Street, Sydney was picketed for a time. A pamphlet entitled "Ban the Bigots Not Blood" was distributed. This pamphlet described Dr Archer's move as "alarmist and irresponsible". It quoted Dr Bove, in his capacity as chairman of the American Association of Blood Banks ("AABB"), as saying that "the evidence is that ordinary blood transfusions are not transmitting AIDS". The burden of the pamphlet appears from what was said under the heading "What is Wrong with Dr Archer's Proposed Banning of Gay Donors":
personal risk, should be advised to restrict their
number of sexual contacts and avoid recreational drug
exposure. The predictive value of screening for T-cell
subset abnormalities and other possible markers, such
as serum thymosin a, and serum b, microglobulin levels,
is unclear."
"First of all, it is the blood and not the donors that57. In his evidence in this case, Dr Archer was taken to this pamphlet. He said that he read it at the time. He telephoned Dr Bove who said that he "had no idea what SBA means". Dr Archer added: "and I have not been able to find out anybody else who has. SGPT is a liver enzyme test" now called ALT "and hepatitis, of course would refer to hepatitis B markers. He (Dr Bove) did not know how that got into the pamphlet though ... and it was not from his mouth that these suggestions had come". Dr Archer added that Dr Bove told him that AABB was not recommending the tests.
needs to be screened. In the USA it has been
discovered that two tests - Hepatitis B and SBA and
SGPT - when taken together, show a hundred per cent
corellation with AIDS risk. The tests cannot identify
if some-one actually has AIDS, but they do identify
accurately all at risk blood. The blood that has been
so identified could then be used for research purposes.
By discouraging donors and not screening the blood, we
lose valuable opportunities to discover more about AIDS.
Secondly, homosexuality as such is not a risk factor.
The question of whether some-one is at high risk with
AIDS can only be determined on the basis of each
individuals medical history and environment. The best
way of ensuring this sort of screening is to provide
accurate information at the blood bank for the donors
themselves to assess.
Finally, a media campaign is likely to be counter
productive for effective screening. Many homosexual men
could feel they must now give blood, irregardless of
their particular risk factors, to prove to their
friends and colleagues that they are not gay.
The fact of the matter is that if Dr Archer is
concerned about the risks of homosexual men contracting
AIDS he should take action on the single greatest
stumbling block to an effective health policy - the
continued criminalisation of gay men in NSW."
58. To go ahead for a moment, the evidence suggests that Dr Archer made significant efforts to persuade members of the homosexual community to accept his request that they not donate blood. He established contact with a number of homosexual organisations, supplying them with information for their publications. He attended a public meeting at Paddington Town Hall on 15 August 1983 organised by some prominent members of the homosexual community. Some hundreds of people were present. The speakers included Professor David Penington who was then Chairman of the National Health and Medical Research Council ("NHMRC") Working Party on AIDS, Chairman of the National Blood Transfusion Committee of the Australian Red Cross and also Dean of the Faculty of Medicine in the University of Melbourne. Professor Penington spoke about the risk of transmitting the infection by blood donations. Dr Cooper pointed out the similarities between Sydney and San Francisco. I gather that the meeting went well and that Dr Archer had cause to believe that his request was being understood.
59. On 9 June 1983, Dr Archer attended a meeting convened by the New South
Wales Department of Health to discuss the scientific aspects
of AIDS. Also
present were representatives of many of Sydney's leading hospitals, including
Professor Penny of St Vincents and Dr
Gatenby of Royal Prince Alfred. There
was discussion about the known cases, apparently those which were to be
reported in "The Medical
Journal of Australia" two days later. The minutes of
the meeting record Dr Archer as having confirmed "that blood bank has acted
on
Commonwealth's advice and is not taking blood from male homosexuals
irrespective of whether they have had 'multiple partners'.
Blood Bank's
message is to be circulated to all hospitals". The minutes of the meeting
also contained the note:
"There is no single surveillance nor any single60. The minutes contain no reference to the possibility of surrogate screening for AIDS.
diagnostic test for A.I.D.S. but the regular immune
status tests are available at all immunology units and
haematology and virology units at the major centres are
adequately equipped for the work they may have to do on
A.I.D.S. specimens."
61. However, surrogate testing was the subject of lengthy discussion at an AIDS symposium in Perth on 23 July 1983. That symposium was attended by many Western Australian medical scientists and also by some visitors from the eastern States, including Professor Penny and Professor Penington. One of the local scientists present was Dr M. Whisson, the Director of the Western Australian BTS.
62. The symposium reviewed at some length the available information about the
incidence of AIDS. Although Dr Montagnier had yet to
announce his
identification of the AIDS virus, Dr Penington made this statement:
"The evidence that AIDS is transmitted by blood and63. There was discussion about the extent of the problem, Dr Whisson giving some calculations to the effect that there could only be "about 0.025 donors with AIDS per year - or one donation in 50 years in Australia". His calculations were made by reference to the United States. Dr Whisson assumed that, in the United States, there were only 800 AIDS affected people who were well enough to survive the usual blood bank inquiries as to recent health. He applied to that figure the usual ratio of donors to population (5%), giving 40 AIDS affected potential donors. He assumed that 90% of those donors would respond to the request for high risk people not to donate, so that only four AIDS affected people would actually donate blood. He then assumed that each would donate blood once per year, so that there would be four affected donations each year of which three would be used. Dr Whisson then applied the result to Australia, on a population basis; but, in doing so, he made a ten times error. On his own figures he should have concluded that there would be one infected donation in Australia each five years. Nobody at the meeting questioned his assumptions or pointed out the mathematical error.
blood products is, in my view, beyond reasonable
question. The haemophiliacs in the United States have
been closely followed medically over many years.
Although they have a variety of complications from the
haemophiliac lifestyle, including the intermittent
administration of concentrate, cases of rapidly
progressive immune deficiency, associated with
life-threatening infective illnesses, are new.
I believe there are now fourteen cases reported, all of
whom received concentrate rather than cryoprecipitate
(the concentrate originating in either the New York or
the San Francisco area). These have occurred over a
relatively short period and when one looks at that
evidence one cannot ignore that the concentrates do
transmit an agent that causes a disease which leads to
high risk of death from opportunist infection, and that
this is new."
Professor Penington made the observation, as a
haemotologist, that "where one is administering
products to large groups in the population, one has a
responsibility to make a decision as to the probability
of risk and an obligation to keep risk to an absolute
minimum based on such evidence that is available,
whether good or indifferent".
64. In fairness, Dr Whisson did recognise the significance of even one infected donation. He said that, having regard to the practice of pooling donations, "one donation in a 2,000 donor pool can make the whole lot infective".
65. Professor Penington accepted the need to keep the problem in perspective
but reiterated his opinion about blood transmissibility.
He added:
"We would be irresponsible if we did not take sensible66. The discussion turned to preventative action. Dr Whisson mentioned some problems which he had encountered after the Western Australian BTS requested that active homosexuals with multiple partners not donate blood. He said that the request had led some homosexuals to attend in order to demonstrate their normality. Others had attended in the belief that tests will be done by the BTS, so if "they do not receive a letter saying something is wrong they presume that they do not have AIDS". He said that there were aggressive donors whose attitude was: "We will donate come what may" or "No one is going to tell us that we cannot be donors"; cf. the statement in the "Ban the Bigots" pamphlet about "the stumbling block" of "continued criminalisation of gay men in New South Wales".
precautions to minimise the risk of transmission of the
disease into this country, and to minimise the risk of
spread of disease from the high risk groups (the
intravenous drug users and homosexuals) to others in
the community. We have to make decisions on rather
more nebulous criteria than scientific proof."
67. Dr Whisson also thought that a public appeal did not reach all homosexuals and that publicity linking the blood bank with AIDS was deterring some non-homosexual donors.
68. The discussion turned to the possibility of surrogate screening. Professor R Dawkins, a clinical immunologist, favoured T4:T8 screening. Professor Penny raised the possibility of anti-HBc screening. He suggested that the matter could be examined in a study. There was support for this suggestion. Professor Penington said that "it would be extremely valuable to identify any donors where there is an immunological abnormality but no overt disease or no high risk association, and follow through to see whether there are any ill effects on recipients". He said that the matter would be discussed by NHMRC on the following Monday.
69. On the following Monday NHMRC established a Working Party on AIDS under the chairmanship of Professor Penington. The Working Party included Dr R.W. Beal, the Director of the South Australian BTS, Professor Penny and Professor Gust.
70. The evidence does not reveal whether Professor Dawkins' suggestion of T4:T8 testing was ever discussed by NHMRC. If so, it was not taken up. The suggestion that there should be a research program was discussed at a meeting of the Red Cross BTS Executive Sub-Committee in October. But this was rejected on the ground that it would not be acceptable to transfuse blood of such donors without fully informing the patient and obtaining formal consent. There was no discussion about anti-HBc testing.
71. The documents discovered by both the first and second respondent include notes of a report to the meeting of the National BTS Committee on AIDS Working Party on 16 February 1984. The Committee included all Divisional BTS Directors. The composition of the Working Party is not disclosed by the evidence. It was reported that, in the United States, there had been 3,000 cases of full AIDS to 19 December 1983, with a mortality rate of 43%. Of these cases 71% were homosexuals or bisexuals, 17% were intravenous drug users, 1% were haemophiliacs and 1% other blood recipients. In Australia, to 16 February, there were eight cases of full AIDS (five in New South Wales and three in Victoria) of whom three patients had died and two "returned home to USA and NZ". In addition, one patient had AIDS related complex and 27 exhibited lymphadenopathy syndrome. The report of the meeting contained an item "screening tests" followed by the names of five possible tests, including anti-HBc. But there is no evidence as to whether these tests were discussed at that meeting.
72. The evidence does not reveal any significant events, in Australia, over
the following four months. Some additional AIDS cases
were reported. The
minutes of a meeting on 29 June 1984 of the Working Party on Factors VIII and
IX Concentrates - of which Dr M
Willis, the Director of Blood Transfusion, at
the national level, of the Society, and Dr J.P. Morris, the Director of the
Victorian
BTS, were members - contain the information that, by then,13 cases
of AIDS had been identified in Australia or were under investigation.
They
also reveal that Dr Morris reported "a 4% drop in donors during the height of
the AIDS scare and it was understood that the
NSW service had also suffered a
drop in donor numbers. So far no local haemophiliac had contracted AIDS nor
had any blood products
been implicated in Australia".
The Lokar case
73. Unfortunately, this position was not to last. On 12 July 1984, on the eve of Dr Archer's departure for Munich to attend a meeting of the International Society of Blood Transfusion, Dr Cooper reported to him the possibility that a patient at St Vincents Hospital, a man named Lokar, was suffering post-transfusion AIDS. Mr Lokar had received a blood transfusion in July 1983. His transfusion consisted of blood taken, from four separate donors, after the request to homosexuals not to give blood. By coincidence, one of those donors made a fresh donation on the very day Dr Cooper reported his tentative diagnosis. A sample of that donation was immediately sent to Dr J. Levy in San Francisco, with a request that he test it against cells of the virus which had been supplied to him by Dr Gallo's research team. The results came to hand on 21 July, whilst Dr Archer was in Munich. His deputy, Dr Helen Bashir, telephoned the news that the test had revealed the presence in the donor's blood of the HTLV3 virus, as it was then known. Dr Archer immediately disclosed this news at the conference. It became a topic of conversation. But, he said in evidence, nobody suggested that he should institute a system of surrogate screening. (In fact, anti-HBc screening would not have led to the discarding of the donation which infected Mr Lokar. Whilst he had the sample available, Dr Levy also subjected it to an anti-HBc test. The result was negative.)
74. Whilst Dr Archer was still in Munich, Dr A Lovric, the Country Blood Bank Director, called in the infected donor for interview. The donor attended on 23 July. Another blood sample was taken. It also was sent to Dr Levy, and tested HTLV3 positive but anti-HBc negative. According to a note made by Dr Lovric at the time, the donor told him that he had always been homosexual; that he did not consider himself promiscuous, but had had "quite a few relationships for the last few years". He had apparently seen the warning notices about giving blood and now "considered (himself) irresponsible to have given blood".
75. On the following day a meeting was held of the BTS (House and Finance) Committee. Dr Archer was still overseas but Dr Bashir reported the facts of the recent case.
76. Even before receipt of the test result, the Chief Health Officer of the Department of Health, Dr A. I. Adams, had been informed of the position. Upon its receipt, BTS notified the Commonwealth Serum Laboratories, to whom a part of the infected donation had been supplied for Factor VIII manufacture, and the New South Wales Minister of Health. On 26 July the Minister made a statement at a Press Conference attended by Dr D. M. Storey, Chairman of the NSW Division, and Dr Lovric.
77. Dr Archer returned to Australia on 31 July. He immediately revised the information form distributed to persons intending to donate blood. The revised form went into use on 2 August. It identified the "at-risk" groups as "homosexual or bisexual persons", "intravenous drug users (present or past)" and "sexual partners of the above". Persons in any of the "at risk" groups were urged, in emphatic terms, not to give blood.
78. On 16 August there was a meeting of the BTS Technical Committee. Reference was made to the recent case and to a request by the Government Insurance Office that donors be asked to sign a statement before each donation that they were not in one of the "at risk" categories. It was agreed that this course should be followed until a specific screening test became available. At the time, this was expected to be in early 1985.
79. There were already notices in the blood bank reception area drawing attention to circumstances under which blood donation was inadvisable. One of them contained the question: "Have you read our statement on AIDS". On 28 August, a donor acknowledgment form, requiring donor signature, was introduced on a trial basis at Clarence Street. It was accepted by donors and, shortly afterwards, the form was used at all blood centres. At about the same time, at the request of the Minister, the form was referred to the Privacy Committee. That committee wrote on 13 September 1984 advising that no form should be used, because it invaded the privacy of the potential donor and "cannot accurately achieve its purpose of elimination (of) at risk donors and so cannot be justified". But, against the possibility that the Red Cross did not accept that advice, the committee suggested some amendments. BTS decided that it should continue to use a form. Pending consideration of the Privacy Committee's suggestions, a revised version of the form was introduced on 24 September. One of the changes made in the new form was to modify the description of the first "at risk" group so as to refer only to males. The AIDS Action Committee had pointed out that there was no medical reason to reject lesbian donors.
80. This version of the form was the one used on 3 October 1984 when a donor,
identified in the evidence only as "D9", made the donation
a portion of which
was transfused into the body of the applicant nine days later. As the wording
of that form is a matter relied
upon by the applicant in relation to his
negligence claim, I quote it in full:
"AN IMPORTANT NOTICE TO ALL BLOOD DONORS REGARDING :81. D9 signed the form before he made his donation on 3 October.
AIDS (Acquired Immune Deficiency Syndrome)
IN THE LIGHT OF PRESENT KNOWLEDGE OF AIDS (ACQUIRED
IMMUNE DEFICIENCY SYNDROME) WE HAVE NO OPTION BUT TO
ASK THE KNOWN 'AT-RISK' PEOPLE TO REFRAIN FROM GIVING
BLOOD.
THESE PEOPLE ARE:
(1) HOMOSEXUAL OR BISEXUAL MALES
(2) INTRAVENOUS DRUG USERS (PRESENT OR PAST)
(3) SEXUAL PARTNERS OF THE ABOVE
IF ANY OF THIS APPLIES TO YOU PLEASE DO NOT GIVE BLOOD.
IF YOU HAVE ANY DOUBT OR WOULD LIKE FURTHER INFORMATION
OR ADVICE, PLEASE ASK TO SEE A MEDICAL OFFICER.
G.T. ARCHER
DIRECTOR.
STATEMENT
I have read this notice and am not one of the people
described in paragraphs 1, 2 and 3 above.
Signed ....................
Date ...................."
82. The form was revised again in November 1984, in the light of the comments of the Privacy Committee. At some time before June 1985 it was replaced by a questionnaire which included a signed certificate relating to AIDS risks.
83. Shortly after he returned from Munich, Dr Archer moved to adopt anti-HBc surrogate testing in the New South Wales BTS. Dr Archer was aware that Cutter Laboratories, a leading United States plasma fractionator taking blood from paid donors, had recently instituted anti-HBc screening. He had learned at the Munich conference that the German commercial fractionators had decided to take the same course. But there was a general belief in the blood bank industry, shared by Dr Archer, that there was a qualitative difference between voluntary donors and paid donors; voluntary donors being generally more altruistic, informed and responsible than paid donors. So the major influence on Dr Archer's thinking seems to have been the knowledge, gained at this time, that Dr Perkins had recently introduced anti-HBc testing at the Irwin Memorial Blood Bank. Dr Archer also believed - wrongly, as it turned out - that FDA had recommended this form of testing to all American blood banks and that most were proposing to implement the recommendation.
84. Dr Archer said in his evidence that he was aware that the utility of the test was controversial; and that he has never believed that it was a suitable test for the detection of HIV-infected donors. But, notwithstanding his own opinion, Dr Archer decided to use the test. The explanation, I think, lies in his then general attitude. As he repeatedly made clear in his evidence, Dr Archer's tendency was to follow the lead of the American blood bank industry; he taking the view that his American counterparts were more aware of the problem, and knowledgeable about solutions, than he could hope to be.
85. By 9 August the number of reported New South Wales cases were: full AIDS 9 (4 deaths), AIDS related 1, lymphadenopathy syndrome 47. In addition, there were four Victorian (2 deaths), and one Western Australian, AIDS cases and four lymphadenopathy cases from these two States; an overall total of 68 cases.
86. At about this time, Dr Archer had some conversations with Mr Len Wisdom, the manager of Tuta Laboratories Pty Limited, a Sydney distributor of medical products. Mr Wisdom contacted a Belgian company, Organon Teknika, which manufactured anti-HBc test kits. On 10 August that firm telexed prices for two different anti-HBc test kits. Mr Wisdom also contacted Cutter Laboratories who, on 14 August, telexed a price for the Abbott Laboratories "Corzyme" anti-HBc test.
87. Dr Archer was attracted to one of the Organon Teknika tests, which would give a speedier result than the Abbott test and would involve the use of the same technique as the laboratory staff would have to use when a specific test was available. At his request, on 15 August, Mr Wisdom telexed Organon Teknika for technical information, stating that "the situation with Australian Red Cross is urgent". Organon Teknika responded immediately and, on 20 August, Mr Wisdom telexed a suggested price, pitched to undercut the Abbott price. There were two further exchanges of telexes but, by 28 August, a price was agreed. On 29 August, an employee of Tuta Laboratories notified Organon Teknika that he would arrange an import licence through the Commonwealth Department of Health and requested the urgent dispatch of a trial shipment.
88. Tuta Laboratories did make the necessary arrangements for an import licence. There was an unexpected short delay in the dispatch of the kits; but 3,000 kits arrived in Australia on 10 September. Arrangements were made for the supply of a further 20,000 kits each month. At the time the New South Wales BTS was collecting approximately 5,000 donations per week. There was never any decision to introduce anti-HBc testing in the other Australian blood transfusion services. When Dr Archer reported his decision at a meeting of the national BTS committee, containing the Directors of each State BTS, it was resolved that the New South Wales initiative should be treated as a "pilot study".
89. The supply of the kits having been arranged, Dr Archer set about procuring the necessary finance. He reported his actions to the BTS (House and Finance) Committee on 31 August. The Committee agreed that a submission should be made immediately to the New South Wales Department of Health "for additional funding so that this test may be given to all blood donors in New South Wales for the next six months, by which time it is hoped the definitive test will be available". The Executive Director wrote to the Department that same day, the estimated cost being $443,320. (No reply was received to that letter. But the NSW Division went ahead with the importation and use of the kits, anyway. It was eventually reimbursed by the Department.)
90. In anticipation of the arrival of the new kits, the New South Wales BTS
advertised for three additional technical officers.
The kits arrived before
the new technical officers commenced work and some preliminary evaluation was
made by existing staff. At
first there were many errors, up to 20% of tests
resulting in false positives. But the errors were sorted out. The new
technical
officers commenced work in early October; respectively on 2, 3 and 8
October. On 5 October regular testing began, but at that stage
the officers
were able to handle only about 200 tests per day. They concentrated on new
donations. The donation given by "D9" on
3 October went untested. Had it
been tested, it may have been discarded. When "D9" next gave blood, on 21
March 1985, the anti-HBc
test program was in full operation. His blood tested
anti-HBc positive and was discarded. Although nobody can be certain, "D9"
may
also have been anti-HBc positive on 3 October 1984. I will return to that
question.
The applicant
91. Shortly before the commencement of the hearing I raised with counsel the continuation of the s.50 order in respect of the present applicant. The applicant's immediate family were aware of his HIV infection and its cause. Some of his more distant relatives were not. Moreover, there was a concern that the applicant's son might be embarrassed in his employment by any publicity in which the applicant was named. Consequently, I continued the s.50 order. I directed that, during the trial, the applicant be referred to as "E".
92. The affidavit of the applicant contains a considerable personal history. The repetition of this detail might lead to identification of the applicant, so it is undesirable for me to set it out. Moreover, it is unnecessary to do so. None of the respondents challenged any of the information disclosed by the applicant. So it is sufficient to make a general summary of it.
93. The applicant is now in his early sixties. Until the onset of symptoms of breathlessness in late 1983, he enjoyed good health. The applicant had been employed since the age of 16 years in a variety of occupations, one of which involved him in contact with members of the medical profession. In that occupation, he acquired some knowledge of medical matters, although only at a rudimentary level. He has no formal medical or para-medical qualifications. The applicant has been married to his present wife for over 30 years. It seems that he is a community-minded and gregarious person. Over the years he has been actively involved in several community organisations. In his affidavit the applicant denied that he was, or had ever been, a homosexual and that he had ever engaged in male-to-male sex. He stated that he had never been an intravenous drug user or been involved in needle sharing. The applicant said that, during the whole of his marriage, he had been monogynous and that he believed that his wife had had no sexual partner other than himself during that period. Although both the applicant and his wife gave oral evidence, no challenge was made to any of these statements.
94. In late 1983 the applicant noticed breathlessness on exertion. He consulted his local general practitioner. He was advised to lose weight. But the breathlessness continued and, in mid 1984, he was referred to a consultant physician and cardiologist, Dr Nidhi Patel. Dr Patel referred him for coronary angiography. It was found that the applicant was suffering from lesions in three arteries, including a 75% occlusive lesion to the left main artery. Dr Patel discussed the case with a cardiothoracic surgeon, Dr Douglas Baird, who agreed that surgery, a triple bypass operation, was urgently required. On 12 September Dr Baird saw the applicant. He told him his opinion. In giving evidence in this case, Dr Baird, understandably, could not recall exactly what advice he had given the applicant. But he had no doubt that he had recommended a bypass operation. He agreed with the suggestion of counsel that, in the absence of the operation, he "would have quoted him a 50 percent mortality within one year". The applicant's recollection of the conversation, according to his evidence, was that Dr Baird said a lesser period; he thought six months. It does not matter. Dr Baird clearly expressed his view in strong terms. It was a view shared by Dr Patel and the applicant accepted it. Dr Baird booked the operation for the earliest available date, later than he would have wished.
95. In accepting the advice of Dr Baird and Dr Patel, the applicant was aware, as he agreed in cross-examination, that there were some risks involved in this type of surgery and that the risks included the possibility of needing a blood transfusion. The applicant had been a regular blood donor for many years. He was aware, both from this experience and his occupational contact with medical people, that any blood transfusion involved some risk, including the risk of receiving contaminated blood. The applicant was asked to sign a blood transfusion authority. Before the operation a sample of blood was taken for cross-matching purposes. But he said that he could not really remember any discussion on blood transfusion; he was certainly not warned about the risk of contracting AIDS as a result of the operation. It seems that the applicant did not turn his mind to this question at all. There was no discussion about using screened blood, or postponing the operation until screened blood was available. In this connection Dr Baird said that, although he was "uncomfortable about any delay because the patient's condition was serious and the need for the operation was urgent", he would have accepted an additional short delay - he mentioned a week - if this had been necessary to enable a test on any blood that might be transfused into him.
96. As I have said, these matters were not in fact discussed. The applicant was admitted to The Royal Prince Alfred Hospital, as a private, fee-paying, patient on 10 October. On 12 October Dr Baird performed the operation. The required procedures were satisfactorily completed. But the applicant developed serious post-operative bleeding. Blood tests showed that he had a coagulopathy, a blood-clotting deficiency. Fresh frozen blood plasma was administered. The bleeding stopped. Dr Baird said that, without the transfusion of fresh frozen plasma or whole blood, the applicant would have bled to death.
97. The applicant made a generally uneventful recovery from his surgery. However, a few days after the operation, he started to feel nauseous, light headed and feverish. It was the subsequent opinion of Dr Gatenby that these complaints may have been symptoms of acute AIDS infection. But the complaints were relatively short-lived and the applicant was discharged from hospital on 1 November.
98. After Christmas 1984 the applicant took casual employment for about three months. In May 1985 he commenced a new full-time job, working in a clerical capacity. But he did not feel well. He found that a full day's work left him feeling tired and lethargic. He felt stressed and had difficulty in concentrating. Prompted by these symptoms and media publicity about AIDS, he attended at the Albion Street Centre where he requested an AIDS test. By that time the HIV specific test was available. It was administered to the applicant. It proved positive. The applicant was referred to Dr Gatenby, who had treated several AIDS patients at The Royal Prince Alfred Hospital. Dr Gatenby found a depressed T-cell ratio, but he thought that otherwise the applicant "is quite well". Notwithstanding this, he expressed a guarded prognosis in a letter he wrote to the applicant's general practitioner on 21 November 1985.
99. The applicant found it necessary to resign his employment and restrict
his community activities. He took the invalid pension.
He continued to see
Dr Gatenby, who furnished regular reports to the general practitioner. Those
reports are in evidence. It is
not necessary to refer to them in detail. It
is sufficient to say that the applicant has progressed better than Dr Gatenby
expected.
Although Dr Gatenby has discussed with the applicant the
commencement of AZT drug therapy, he has not yet taken that course. In
an
affidavit dated 6 July 1990, Dr Gatenby gave this prognosis:
"7. The applicant will be considered to have AIDS when100. The applicant is fortunate to have a very supportive wife. She gave evidence of her willingness to care for her husband, should this become necessary; including by driving him to and from hospital as required and by nursing him at home. During the hearing counsel for the third respondent, the Central Sydney Area Health Service, which operates a number of major Sydney hospitals including The Royal Prince Alfred Hospital, offered an undertaking to the applicant on behalf of his client that, regardless of the outcome of the case, the Service would provide hospital and medical care to the applicant, in connection with any problem arising out of his HIV infection, at its hospitals as may be required from time to time free of charge. This offer was accepted. Even so, significant costs will arise if full AIDS develops. The applicant's wife is in her sixties. She has a cholesterol problem for which she takes medication. She may require assistance in nursing the applicant. If the applicant is entitled to succeed, these matters will have to be taken into account in considering the matter of damages.
he develops a major opportunistic infection or one of
certain well defined neoplasms and I would expect this
to occur within the next 24 months. AZT treatment may
delay this, and I would expect the delay to be up to 18
months.
8. Having developed an opportunistic infection and if
it were pneumocystis carinii pneumonia then I would
expect him to survive for up to two years from that
date and if he developed some other infection, or
cancer, and there is approximately a twenty-five
percent probability of this, then he may not survive
beyond twelve months."
101. I have already mentioned the legal curiosity of the second respondent,
the NSW Division, being a part of the first, the Society;
although each are
separately incorporated. This unusual situation is a result of their history.
Apparently, it only occurs in New
South Wales. The other State Divisions are
unincorporated. The Australian Red Cross Society was formed in 1914 as an
element of
the British Red Cross Society. Initially, separate branches were
established in each State, with some co-ordination by a national
executive
based in Melbourne. But neither the Society itself nor its State branches
were incorporated until, in 1929, the New South
Wales Parliament enacted the
Australian Red Cross Society New South Wales Division Incorporation Act 1929.
Section 3 of that Act
incorporated, under that name, the members of the
executive committee of the Division, and their successors from time to time.
Section
4 stated the objects of the corporation. Those objects included:
"(f) to promote the improvement of health, the102. Section 6 gave to the corporation the powers necessary for the carrying out of its objects. Section 7 vested in the corporation all property then held, or thereafter acquired, for the benefit of the Society or any Branch or Division in New South Wales. Yet the legislation plainly envisaged that the Division would continue to be part of the larger national entity, the Society.
prevention of disease, and the mitigation of suffering
in New South Wales or elsewhere."
103. The Society itself was not incorporated until 1941, when a Royal Charter
was granted. That Charter conferred power on the newly-incorporated
Society
to take over all the assets of the earlier, unincorporated Society. It
provided for a Division in each State and in such
Territories as the Council
might determine. The objects of the Society are discernible from the terms of
its first recital:
"... its primary objects are the furnishing of aid to104. The New South Wales Act was amended in 1943 and a Supplemental Royal Charter was granted in 1956. These events did not affect the structure of either corporation.
the sick and wounded irrespective of nationality, the
rendering of assistance in the case of any great public
disaster calamity or need and the improvement of health
the prevention of disease and the mitigation of
suffering in Australia and elsewhere ... "
105. Blood transfusion is easily the most significant activity carried out by the Red Cross in Australia, accounting for some 80% of all its activities. As a matter of administration, there is a separate blood transfusion service in each State, under the control of the State Division and an appointed Director. But there is a legal distinction between the States which reflects the fact that only the NSW Division is separately incorporated. In New South Wales the BTS is funded directly by the NSW Division, in the manner I will describe. In the other States, the entity which conducts the service is the national society itself, although it allows a considerable degree of autonomy to the local Division and Director and relies on the local Division for the provision of the necessary funds.
106. The BTS funding situation is set out in the affidavit of Miss Noreen Minoghue, a former Deputy Secretary-General of the Society. It appears that, initially, the Society completely funded its blood services from its own resources. This situation continued until the mid-1940's when, due to the increased demand for blood, it became impossible. From 1946 onwards, occasional grants were made to the Society by the Commonwealth through the State governments. This arrangement was put on a formal basis in 1953 when the Commonwealth agreed to grant each year to each State an amount equal to 30% of the operating expenses incurred by the Society in the conduct of the BTS in that State. This agreement was made subject to satisfactory accounting arrangements and the relevant State agreeing to pay to the Society an amount equal to 90% of the cost of the BTS in that State. The effect of this agreement was that, thereafter, the Commonwealth contributed 30%, and the State 60%, of the total cost of each BTS.
107. This arrangement was varied in 1975. The Society was experiencing difficulty in meeting its 10% share; so the Commonwealth agreed to raise its contribution to 35%. Two years later, the formula had again to be reviewed. Such was the growth in the cost of the service that, within two years, the new 5% contribution exceeded the amount of the 1973 10% contribution. So it was agreed that the Society should contribute 10% of its previous year's income from specified donations and appeals or 5% of the cost of the BTS, whichever might be the lesser. I gather that the lesser sum is usually the former amount; but that does not matter. What may be important is that, whilst the funding formula ensures that the Society will not be much out of pocket because of its operation of the BTS in each State, it is impossible for it to make a profit out of that operation. The Society does not make any charge for its blood products. Its only income is from governments, and the formula prevents that income ever matching its costs.
108. The evidence discloses that the first respondent raises revenue from a multitude of sources: social functions, sporting events, field days, raffles and lotteries, other minor events, the sale of goods in permanent shops, at temporary venues such as stalls, fairs and markets and through merchandising programs. The Society does make some charges: for training courses, for medical equipment, in its homes for the aged and for some community services such as home-help and meals-on-wheels. The Society also receives income from rented properties and investments. In the 1983-1984 financial year it received a total income of $11,633,890; not including government grants. The income was made up of donations of $5,325,992, legacies of $1,497,161, investments $1,104,453 and other receipts $3,706,224. In the following year total receipts were $13,400,776; again not including government grants. The break up was much the same.
109. The Society's annual report does not reveal the components of the item "other receipts". To learn this, it is necessary to go to the annual reports of the various Divisions, which are in evidence. They do not each itemise their income in the same way. So it is not possible to be precise. But it seems to be clear that, in the year ending 30 June 1985, the various Divisions raised more than $2,000,000 from trading activities, at kiosks, shops, street stalls or by direct sale of merchandise to the public.
110. Like the other State Divisions, the NSW Division makes an annual contribution to the Society. Contributions are assessed by reference to the population of each State. In 1984-1985 the NSW Division contributed $585,000. In addition the NSW Division runs its own activities: the Bodington Hospital at Wentworth Falls, a day-care program, some community welfare centres and two children's homes. It also "tops up" the cost of the New South Wales BTS, after receipt of the government grants. In 1984-1985 this last item cost $83,915.
111. The expenses incurred by the Division are met by donations from Branches, which operate opportunity shops, street stalls and other fund raising activities - in 1984-1985, $1,193,024 - charges for attendances at first aid courses - $65,121 - the annual door knock appeal - $532,175 - direct mail appeals - $896,971 - profits of the Clarence Street gift shop - $307,082 - legacies - $625,776 - and investments - $308,323.
112. The Central Sydney Area Health Service is the successor of the entity which conducted The Royal Prince Alfred Hospital at the time of the applicant's blood transfusion. At that time the hospital was vested in a corporation known as "The Prince Alfred Hospital": see The Prince Alfred Hospital Act 1902 (NSW). (The name of the corporation was never changed, notwithstanding that in 1903 the name of the hospital itself was enlarged to include the honorific "Royal".) But it was also a hospital included in the Third Schedule to the Public Hospitals Act 1929 (NSW), and so subject to some of the provisions of that Act. I will refer to those provisions in considering whether the corporation was, at October 1984, an emanation of the Crown in right of the State of New South Wales, so as to be excluded from the operation of the Trade Practices Act.
113. In 1986 the position relating to The Royal Prince Alfred Hospital
changed markedly, with the enactment of the Area Health Services
Act 1986
(NSW). That statute enabled the creation of corporate area health services by
Gazette order. Pursuant to a Gazette order
made on 26 September 1986, The
Royal Prince Alfred Hospital was transferred to an area health service known
as "Royal Prince Alfred
Hospital and Area Health Service" whereupon, pursuant
to cl.3 of Schedule 6 of the Act, the old corporation, The Prince Alfred
Hospital,
was dissolved. But by cl.6(g) of the Schedule all claims against
that corporation became recoverable against the area health service.
On 29
July 1988 the name of the health service was changed to "Central Sydney Area
Health Service". Accordingly, the third respondent
is liable to the extent,
and only to the extent, that the earlier corporation would have been liable.
The application of the Trade Practices Act: "trading corporation"
114. Fundamental to the application to this case of any of the provisions of the Trade Practices Act is the question whether any of the persons argued to be in breach of its provisions - the first two respondents and the earlier corporation, The Prince Alfred Hospital - was a "corporation" within the meaning of that Act. Generally speaking, the scheme of the Act is to regulate the conduct of, and impose obligations upon, corporations, as defined. There are some provisions for the extended application of the Act but none of them applies to the facts of this case.
115. Each of the three entities - I will call all of them "respondents" - was
a corporation in the usual sense of that word. But,
for constitutional
reasons, the Trade Practices Act adopts a limited definition of corporation.
By s.4 the word is defined as follows:
"'corporation' means a body corporate that116. None of the respondents fell within para.(a), para.(c) or para.(d) of this definition. None was a "financial corporation". In the case of each of them, the question is whether it was a "trading corporation formed within the limits of Australia." Each was formed in Australia. Each traded. But was any of them a "trading corporation"?
(a) is a foreign corporation;
(b) is a trading corporation formed within the limits
of Australia or is a financial corporation so formed;
(c) is incorporated in a Territory; or
(d) is the holding company of a body corporate of a kind
referred to in paragraph (a), (b) or (c);"
117. In The Queen v Trade Practices Tribunal; ex parte St George County
Council [1974] HCA 7; (1974) 130 CLR 533, the High Court of Australia held, by majority,
that a county council established under a statute "for local government
purposes"
and empowered within its district to supply electricity and
electrical appliances was not a "trading corporation", so as to be a
"corporation" for the purposes of s.5 of the Restrictive Trade Practices Act
1971. All members of the Court agreed that the mere
fact that a corporation
engaged in trade was not enough to constitute it a "trading corporation".
McTiernan J held that the county
council was not a "trading corporation"
because the statutory context showed that the term was not intended to embrace
publicly-owned
corporations: see pp 546- 547. Menzies and Gibbs JJ, the other
members of the majority, enquired as to the essential character of
the
corporation: see Menzies J at pp 553-554 and Gibbs J at p 562. In contrast,
the test adopted by the minority related to the
nature of the council's
activities: see Barwick C.J. at pp 542- 543 and Stephen J at p 568. In a
passage at pp 569-570 which has
some relevance to the present case, Stephen J
said:
"As to s.419(1) it can no doubt be said that there is a118. Upon the next occasion that the High Court had to consider the meaning of "trading corporation", a different result ensued. That was in The Queen v Judges of the Federal Court of Australia; ex parte The Western Australian National Football League ("Adamson") [1979] HCA 6; (1979) 143 CLR 190. That case arose under the 1974 Act, the question being whether certain corporations concerned with Australian League football were "trading corporations". By majority, the Court held that they were. The test favoured by Barwick C.J and Stephen J in St George County Council, the activities of the corporation, was adopted by all except Gibbs J; although Stephen J, with whom Aickin J. agreed, differed with the majority as to the application of that test to the facts of the case.
strong element of profit-making present in the concept
of trading and that this element will usually be
possessed by a trading corporation. This is, perhaps,
only because, traditionally, in societies organized
upon capitalist lines, the undertaking of trading
activities has been left substantially to private
enterprise rather than to government intervention; in
these circumstances the common incentive for entry into
those activities has necessarily been the profit
motive. Hence the conduct of a trading activity has
commonly come to be associated with the gaining of
profits, that being the motive leading to the
undertaking of those trading activities.
However if some other motive actuates a corporation or
individual to engage in trading activities those
activities will not themselves be altered in character
and, if they consist of what is properly described as
trading, a corporation which undertakes them as its
sole or principal business will, in my view, be a
trading corporation. Since it is the activity carried
on or intended to be carried on that is described by
the participle 'trading' it would not matter, if such
were the case, that the County Council so arranged the
margin between the price it paid for electricity in
bulk and the price at which it supplied it to consumers
as to ensure that it derived no surplus after making
the provisions referred to in s.419(1). It might be
otherwise if it distributed electricity free of charge
but so long as its activity is that of buying and
reselling rather than distributing by way of gift it
is, in my view, engaged in trading and since this is
its only activity it is properly described as a trading
corporation. In In re Duty on Estate of Incorporated
Council of Law Reporting for England and Wales (1888)
22 QBD, at p 293, Lord Coleridge C.J. said of the
phrase 'established for any trade or business' that 'it
is not essential to the carrying on of a trade that the
person engaged in it should make, or desire to make, a
profit by it' - see also British Institute of
Preventive Medicine v Styles (1895) 11 TLR 432.
It is the acts of buying and selling that are at the
very heart of trade; as Lush J. said in Higgins v
Beauchamp (1914) 3 KB 1192, at p 1195, 'a trading
business is one which depends on the buying and selling
of goods'. The word 'trade' was said by their Lordships
in Commissioners of Taxation v Kirk (1900) AC 588, at
p 592, to mean primarily 'traffic by way of sale or
exchange or commercial dealing'. The Shorter Oxford
English Dictionary gives, as meanings of 'trading', the
'carrying on of trade; buying and selling; commerce,
trade, traffic.'"
119. For the majority, Barwick C.J. at p 208 pointed out that, under modern
conditions, "the nature of a company may not be discernible
from a perusal of
its memorandum". He went on:
"The only sure guide to the nature of the company is a120. Mason J, with whom Jacobs J agreed, expressed agreement, at p 233, with the minority approach in St George County Council. He said that "trading corporation" is "a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation". Murphy J went a little further, saying at p 239:
purview of its current activities, a judgment as to its
nature being made after an overview of all those activities.
I remain of the firm conviction that for constitutional
purposes a corporation formed within the limits of
Australia will satisfy the description 'trading
corporation ' if trading is a substantial corporate
activity. Its activities rather than the purpose of
its incorporation will designate its relevant
character. But so to say assumes that such trading
activities are within its corporate powers, actual or
imputed. It is the corporation which satisfies the
description which is the subject matter of the power.
Thus its corporate capacity or incapacity cannot be
ignored. But once it is found that trading is a
substantial and not a merely peripheral activity not
forbidden by the organic rules of the corporation, the
conclusion that the corporation is a trading
corporation is open."
"A trading corporation may also be a sporting,121. Adamson was referred to in two cases decided in 1982. In the first, Actors and Announcers Equity Association of Australia v Fontana Films Proprietary Limited [1982] HCA 23; (1982) 150 CLR 169, Brennan J at p 221 referred with approval to the test adopted by Mason J in Adamson. In the other, State Superannuation Board V Trade Practices Commission [1982] HCA 72; (1982) 150 CLR 282 at pp 303-304, Mason, Murphy and Deane JJ applied the Adamson approach to the determination of what constituted a "financial corporation". After quoting the tests adopted by each of Barwick CJ, Mason and Murphy JJ in Adamson, their Honours added:
religious, or governmental body. As long as the
trading is not insubstantial, the fact that trading is
incidental to other activities does not prevent it
being a trading corporation. For example, a very large
corporation may engage in trading which though
incidental to its non-trading activities, and small in
relation to those, is nevertheless substantial and
perhaps exceeds or is of the same order in amount as
the trading of a person who clearly is a trader."
"The point is that the corporation engages in trading122. At p 305, in the course of a discussion about the meaning of "financial corporation", they said:
activities and these activities do not cease to be
trading activities because they are entered into in the
course of, or for the purpose of, carrying on a primary
or dominant undertaking not described by reference to
trade. As the carrying on of that undertaking requires
or involves engagement in trading activities, there is
no difficulty in categorizing the corporation as a
trading corporation when it engages in the activities."
"However, just as a corporation may be a trading123. It is convenient to deal immediately with a submission made on behalf of the applicant that, in applying these principles to the first and second respondents, account should be taken of their blood supply activities. The applicant accepts that neither respondent makes any charge for the blood which it supplies. Neither "trades" in blood, in the usual sense of that term. But, say counsel, the reality is that the blood transfusion activities of the respondents constitute substantial businesses by which they supply valuable commodities, blood and blood products, in return for large payments. In the year 1984-1985, the Society (including its Divisions) received from Governments a total of $44,965,328 in respect of its blood transfusion services. Of this, the NSW Division directly received more than $10,000,000. (The exact figure is not ascertainable from the Division's annual report). These were, of course, substantial sums. They were earned only because the respondents are prepared to carry on blood transfusion services at a scale, in terms of labour and resources, greater than that of many organisations which are undoubtedly "trading corporations". But I do not think that it is appropriate to describe the gratuitous provision of a public welfare service, substantially at government expense, as the conduct of a "trade". It is pertinent to recall the words of Stephen J. in St George County Council: "It is the acts of buying and selling that are at the very heart of trade", and also to remember the distinction he made in respect of the distribution of electricity free of charge. In relation to the supply of blood, it seems to me that the first and second respondents do not engage in trading activities. They engage in a major public welfare activity pursuant to agreements with the Commonwealth and the various State governments under which they will be reimbursed most of their costs.
corporation , notwithstanding that its trading
activities are entered into in the course of carrying
on some primary or dominant undertaking, so also with a
corporation which engages in financial activities in
the course of carrying on its primary or dominant undertaking."
124. But, leaving out of account the blood transfusion income, the first and second respondents each earn considerable sums of money from the sale of goods. It is not easy to ascertain the precise figures from the annual reports. But, as I have said, in 1984-1985 the Society earned over $2,000,000 in this way.
125. According to the evidence of Mr John Smith, the Executive Director of the NSW Division, in 1984-1985 the Division received $1,193,024 from "donations from Branches which operate opportunity shops, street stalls and other fund raising activities", $65,121 for charges made for attendance at its first aid courses and a further $307,082 from its Clarence Street gift shop. Perhaps not all the money received from Branches emanated from trading activities but trading was plainly a major contributant to the Division's income. The scale of the Division's trading activities amply meets any of the tests enunciated in Adamson. It is true that the trading activities were not motivated by the hope of private gain but purely to earn the revenue which the Division needed for its charitable activities. But, as Mason, Murphy and Deane JJ made clear in State Superannuation Board, motive does not matter.
126. In my opinion, it should be held that each of the first and second respondents is a "trading corporation" within the meaning of s.4 of the Trade Practices Act.
127. I turn to the position of The Royal Prince Alfred Hospital. It does not matter that the corporation was incorporated by statute and publicly-owned: cf. The Commonwealth of Australia v Tasmania ("Tasmanian Dam") [1983] HCA 21; (1983) 158 CLR 1 at pp 155-157, 179-180, 240, 269-270. Counsel for the third respondent do not suggest otherwise. But they say that - despite the High Court's more recent preference for the "activities", rather than the "essential nature", test - it is still necessary to take into account the purpose for which the corporation was created. When this matter is considered, say counsel, it is found that the Prince Alfred Hospital Act created a corporation under the name of a hospital which was to have a close association with the University of Sydney, and especially the Faculty of Medicine of that university: see ss.4, 6 and 22 of that Act. They say that the hospital was not created as a trading corporation.
128. No objectives were stated in the Prince Alfred Hospital Act. But the
1985 annual report of the hospital contains a statement
of its objectives, as
follows:
"1. To provide medical and surgical care to129. Counsel argue that, as the annual report shows, the predominant activity of the hospital in 1984-1985 was the provision of medical and surgical care. This activity was not profitable. On the contrary, it required what counsel describe as an "enormous subsidy from the public purse". Counsel also refer to the facts that the hospital was not free to fix either its own charges or the amount which it pays to its staff and that donations to it were deductible for the purposes of the Income Tax Assessment Act 1936; but I do not think that either of these last two matters has much bearing upon the matter.
patients.
2. To undertake teaching.
3. To provide an appropriate environment for medical
research."
130. I accept counsel's submission that, despite the adoption of the "activities" test, the purpose for which the corporation was formed retains some relevance. Barwick C.J. said as much in the passage in Adamson which I set out above. But, in the light of Tasmanian Dam, it is difficult to see that the matters mentioned by counsel stand in the way of a finding that The Prince Alfred Hospital was a trading corporation if, in fact, it traded on a substantial scale at the relevant date. The Tasmanian Hydro-Electric Commission was a statutory corporation established to undertake important public functions at public expense. It was subjected to a high degree of Ministerial control, although it had previously been held not to be a servant or agent of the Crown. Yet it was held to be a trading corporation because of the extent of its trading activities. In this connection, and as an indication of how far the pendulum has swung, it is interesting to compare the result in Tasmanian Dam with the almost derisory comment of Menzies J in St George County Council at p 553: "A body such as the Snowy Mountains Authority sells electricity but I hardly think that it would be natural to call it a 'trading corporation'. That body and many other corporations which do trade are in essence public authorities".
131. It seems to me that the critical question is the nature of The Prince Alfred Hospital's activities at the relevant time. Accepting that its predominant activity was the provision of medical and surgical care to patients, they were not objectives antithetical to the notion of trade. Many trading corporations supply services rather than goods. Many privately owned hospitals provide medical and surgical care for reward with the purpose of thereby trading profitably. There was nothing in the intrinsic nature of The Prince Alfred Hospital's activities to disqualify it as a trading corporation.
132. If the question be asked whether the scale of the corporation's trading activities was "substantial", "a sufficiently significant proportion of its overall activities" or "not insubstantial" - to apply the tests adopted in Adamson - it is relevant to note that, in the financial year ended 30 June 1985 it received $14,584,456 in patients' fees in return for services rendered by it. It also received $3,736,662 from "business activities". It is true that these amounts were dwarfed by its State government subsidy of $112,127,706. But that does not matter. Trading activities yielding some $18 million per year can only be described as substantial. It seems to me that the scale of the hospital's trading activities in 1984-1985 was such that it should be regarded as then being a trading corporation.
133. I should add that the evidence of Mr K R Barker, the Executive Director
- Finance and Administration of the New South Wales
Department of Health
disclosed that charges made to non-public patients at public hospitals are
fixed by the Minister by reference
to the allowable health insurance rebate
under Commonwealth legislation. Mr Barker said that "at no time has the daily
accommodation
fee exceeded or approximated the actual cost of delivery of
those services for each day". Basing himself upon this evidence, counsel
for
the New South Wales Attorney General submits that it follows that the hospital
is not engaged in trading activities in servicing
private patients, so that
the corporation conducting the hospital cannot be regarded as a trading
corporation. But, of course, this
does not follow; the corporation might
qualify as a trading corporation because of its other activities. In any
event, as Stephen
J made clear in St George County Council, it is not
necessary that trading activities be profitable, or even intended to be
profitable,
to constitute the trader a "trading corporation".
The application of the Trade Practices Act: emanation of the Crown
134. The next question, relevant only to the position of the third respondent, was whether The Prince Alfred Hospital was an emanation of the Crown in right of the State of New South Wales. If it was, it is clear that it was not bound by the Trade Practices Act; see Bradken Consolidated Limited v Broken Hill Proprietary Company Limited [1979] HCA 15; (1979) 145 CLR 107, Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 76 ALR 173, Bourke v State Bank of New South Wales (1989) ATPR 40-924 at p 49,995.
135. Despite the lengthy period of time over which The Prince Alfred Hospital managed The Royal Prince Alfred Hospital, it seems never to have been judicially determined whether the corporation was an emanation of the Crown. Moreover, so far as counsel have been able to ascertain, the question has never arisen in respect of any of the other major public hospitals.
136. The issue whether a particular entity is "the Crown", for the purposes of the relevant rule of construction normally raises questions of degree upon which minds may differ: see Superannuation Fund Investment Trust v Commissioner of Stamps (SA) [1979] HCA 34; (1979) 145 CLR 330, State Superannuation Board at pp 306-308. A number of matters have to be considered. Perhaps the three most important are: the function of the corporation, the extent to which it is subject to Ministerial control and whether or not its property and funds are held independently of government.
137. Although they were evenly divided as to the result of that consideration, the consideration of function was the major question for each of the four Justices in Superannuation Fund who considered Crown immunity. Aickin J thought that the function of the appellant Trust was not one "which could be regarded as an ordinary or usual function of government, or of a means by which such functions may conveniently be performed". On the other hand, Mason J, with whom Barwick C.J. agreed, was influenced by the fact that the Trust was concerned with the provision of superannuation benefits to Crown employees, a function linked to the obligations of the Crown as an employer.
138. In the present case, counsel for the third respondent argue that the provision of medical and surgical services was, in Australia in 1984, widely regarded as an ordinary and usual function of State governments; the conduct of The Royal Prince Alfred Hospital through the corporation was simply a means by which the New South Wales government discharged this responsibility.
139. I see the force of this submission but I do not think that it should be regarded as conclusive. I accept that, during the 1980's, most Australians would have regarded the provision of health care, including medical and surgical services, as a usual function of government; at least insofar as that care was furnished to people who could not afford to provide it for themselves. But successive governments, both at federal and State level, have chosen to provide health care by a variety of means. A major portion of that care - including hospital services - has been furnished by the private sector, although much of it ultimately at public expense. Another portion has been furnished by government agencies acting directly as elements of the executive. Health care providers in the latter category would indisputably be "the Crown". Those in the former category would not. So little is gained by application of general notions about the usual role of government.
140. In 1984 The Royal Prince Alfred Hospital fell between the extremes of the two cases I have mentioned. On the one hand, it was not privately owned. It was a public institution, established by a special Act of Parliament for public purposes and subjected to a deal of Ministerial control. On the other hand, it was not a mere component of a government department. It was a statutory corporation with its own objectives and a degree of autonomy in the manner of their attainment. It held property in its own name and managed its own funds, although subject to some control by government. I think that the critical factor, in determining whether the corporation was, at that time, "the Crown" is the extent of Ministerial and State bureaucratic control. Contrary to the submission of counsel, I put little weight upon the circumstance that the ultimate source of most of its income was the government; the same might be said of numerous private hospitals, medical practitioners, drug manufacturers and, perhaps, even pharmacists.
141. Section 6(1) of the Prince Alfred Hospital Act put the hospital and its property in the governance and management of the Board of Directors, subject to the hospital's By-laws, rules and regulations. The power to make By-laws, rules and regulations was vested in the Board of Directors - see s.10 - except that, in relation to its teaching functions, the Senate of the University had a role: see ss.21 and 22. Section 6(2) provided that the Board of Directors shall consist of 15 directors. Ten of them were to be elected by "members" of the Hospital; that is subscribers under s.4. The Chancellor of the University of Sydney and the Dean of the Faculty of Medicine within that university were to be ex officio directors. The remaining three directors were to be appointed by the Governor. By s.20 the body corporate constituted by the Act was to hold the land, described in the Second Schedule to the Act, on which the hospital stood subject to certain conditions, including the hospital being open "for the reception of all persons without any distinction whatsoever". The Governor was empowered to resume the land upon breach of any condition.
142. In 1915 s.6(2) was amended. The total number of directors was increased to 22. All of the additional seven directors were to be appointed by the Governor; giving to the Executive the power of appointment of ten out of the total 22 directors.
143. Section 6(2) is the only provision of this Act which confers any rights on the State government. Although the power to appoint ten directors might give the relevant Minister some influence in the affairs of the hospital, it seems to me to be indisputable that, if the Prince Alfred Hospital Act stood alone, the corporation could not be regarded as an emanation of the Crown.
144. But, by 1984, the Prince Alfred Hospital Act did not stand alone. It had become subject to some of the provisions of the Public Hospitals Act. I do not see any conceptual difficulty in a conclusion that a corporation which was initially not "the Crown" has become so subject to Crown control that, at a later stage of its life, it should be regarded as "the Crown" for the purposes of the rule of construction. Counsel argue that this is what happened in the present case.
145. In October 1984 The Royal Prince Alfred Hospital was a "Third Schedule hospital"; that is, it was named in the Third Schedule to the Public Hospitals Act. The consequence was that Parts II, III, VC, VD, VI, VIB, VII and VIII of that Act applied to it. But, in reading those Parts, it is necessary to note that the hospital was a "separate institution", within the meaning of s.3; because it was mentioned in the Third Schedule. Similarly, although the hospital was incorporated, it was not an "incorporated hospital" within the definition in s.3. So not all of the provisions even of those Parts applied to it.
146. Picking my way through Part II, entitled "Administration", with those matters in mind, I find that s.11 confers upon the Secretary of the Department of Health a duty to facilitate the achievement and maintenance of adequate standards of patient care and services, to facilitate the efficient and economic operation of hospitals consistent with those standards, to make enquiries into the standards of administration and management of hospitals and their services, to arrange inspections of hospitals from time to time and to make reports and recommendations to the Minister concerning subsidies. All of these duties would seem to apply to The Royal Prince Alfred Hospital. Although a "separate institution", the hospital apparently received a subsidy from the Hospital Fund: see s.11(1A). Section 13(1)(c) and (d) allow the Governor, by Gazette notification, to authorise or require the Board of any hospital to establish and maintain institutions for the treatment of particular types of patients or district nursing services. Section 13(3) authorises the Minister by Gazette order to authorise and direct the adoption of systems of preventative medicine and to promote research and investigation. For that purpose, the Minister may utilise the staff and facilities of any hospital. The Minister may also "authorise and direct arrangements between hospitals for the transfer of patients and nurses". Section 13(4) provides that the Minister "may, from time to time, determine the role, functions and activities of any hospital" and notify the hospital accordingly.
147. Part III of the Act deals with the Hospital Fund. That fund is to be opened within the Treasurer's accounts, to be fed mainly from moneys appropriated by Parliament. The Minister is empowered to grant subsidies to hospitals out of that fund, criteria being specified: see s.17(5) and (7). Conditions may be attached: see s.17(8).
148. Part VC deals with visiting medical officers and Part VD with visiting practitioners. Their effect is to subject those officers to the conditions and remuneration determined by the Minister. Part VIB permits an appeal to the Minister against a decision of a hospital Board in respect of the appointment of a visiting practitioner.
149. Part VI of the Act is headed "Liability of Patients". Section 30 limits the liability of patients to the fees determined by the Minister from time to time. By s.30(6) it is provided that: "No destitute person shall be refused relief at any hospital by reason only of his inability to pay therefor". Section 40B, which is in Part VII, requires the Secretary's approval of the appointment by any hospital of a chief executive officer or matron or to any such other position as may be specified in a Gazette notification from time to time.
150. Section 42 of the Act, which is contained within Part VIII, confers upon the Governor power to make regulations upon a miscellany of subjects. They include finance and visiting practitioners and some minor aspects of administration: the establishment of laboratories and the disposal of unclaimed property of patients. However, in contrast to the position in relation to Second Schedule hospitals - see s.42(1)(i) and (j) - the regulations may not extend, in the case of Third Schedule hospitals, to such matters as the admission and discharge of patients, the payment and collection of fees, "the construction, use, and management ... of buildings, and the carrying out of additions, alterations, and repairs thereto, the regulation of accommodation, and the provision and use of plant, appliances, and equipment".
151. As the above summary demonstrates, at the relevant time the Public
Hospitals Act imposed significant fetters upon the freedom
of action of The
Royal Prince Alfred Hospital's Board of Directors. It appears that, by 1984,
the hospital was substantially funded
from the Hospital Fund. So it is not
surprising that there were statutory provisions giving the Minister some
control over financial
matters. Necessarily, this extended to visiting
medical officers and visiting practitioners. The 1985 annual report shows that
66.48%
of all expenditure went on salaries and wages. The legislation also
gave to the Secretary powers of inquiry and inspection to enable
him or her to
be satisfied as to the manner in which these public funds were expended and as
to the standards achieved by the hospital.
But it seems to me that, at least
in relation to Third Schedule hospitals, the legislation stopped short of such
a degree of control
as would make the hospital an emanation of the Crown. The
Public Hospitals Act did not affect the legal structure of the hospital.
It
left intact the Board of Directors, and their method of appointment. The
Governor retained the right to nominate ten directors,
but an equal number
continued to be elected by the members of the hospital and the remaining two
directors held ex officio positions
not in the gift of the Crown. No
legislation gave power to the Governor or the Minister to remove the Board or
generally to interfere
in their management of the hospital. It is true, as
counsel point out, that s.4(4) of the Public Hospitals Act conferred on the
Governor a power to amend the Third Schedule, inter alia, by omitting the name
of an institution. If that had been done in relation
to The Royal Prince
Alfred Hospital, it could then have been listed on the Second Schedule: see
s.4(3). If this step had been taken,
the Minister would have acquired a
greater degree of control over the management of the hospital. Whether that
degree of control
would have been sufficient to constitute the hospital "the
Crown", it is not necessary to determine. That step had not been taken
by 12
October 1984, when the blood plasma was administered to the applicant. It
seems to me that, on that day, the hospital was
not subject to such a degree
of Executive control that it might properly be described as an emanation of
the Crown. I think that
the corporation governing the hospital at that time
was not excluded from the operation of the Trade Practices Act.
The representations claims: ss.52 and s.55A and negligent misrepresentation
152. As I have mentioned, the applicant alleges the making to him by the
respondents of various representations. The claimed representations
are
specified in para.11 of the Statement of Claim as follows:
"(a) that the blood or blood product was the most153. The applicant does not claim that any of these representations were made to him in express terms. He says that they were implied from the circumstances of his blood transfusion. But it seems to me that there is no basis for holding that any representations were made.
efficacious mode of treatment available;
(b) that the treatment offered was safe and effective;
(c) that all reasonable precautions had been taken to
ensure the safety and well-being of the Applicant;
(d) that the mode of treatment was free of blood borne
viruses;
(e) that the Applicant was not exposed through the mode
of treatment offered to injury by a blood borne virus."
154. I accept that there may exist circumstances from which a representation
may be implied: see Rhone-Poulenc Agrochimie SA v UIM
Chemical Services Pty
Ltd (1985) 10 FCR 567 at pp 587-588; (1986) 12 FCR 477 at pp 489-490, 504 and
508 and Collins Marrickville Pty Ltd v Henjo Investments Pty Limited (1987) 72
ALR 601 at p 609-610; [1988] FCA 40; (1988) 79 ALR 83 at p 95. Examples of those
circumstances were given by Bowen C.J. in Rhone-Poulenc in this way:
"Dealing with the question of misrepresentation155. In the present case there was no omission to qualify an absolute statement. There was no subsequent change. No relevant representation had ever been made. There was no contact whatever between the applicant and either of the first two respondents in connection with the blood transfusion. The only contact between him and the hospital concerning the blood transfusion related to matters of detail; taking a blood sample in advance of the operation and procuring his consent to the transfusion of blood, if this should become necessary. There was certainly no representation concerning the characteristics of any blood which might be required. Nor was there any representation when the plasma was transfused. The applicant was apparently unconscious at that time. It seems to me that the case is precisely covered by the general rule quoted by Bowen C.J.
constituted by silence, there are cases which show, for
example, that an omission to mention a qualification,
in the absence of which some absolute statement made is
rendered misleading, is conduct which should be
regarded as misleading. So too is the omission to
mention a subsequent change which has occurred after
some statement which is correct at the time has been
made where the result of the change is to render the
statement incorrect so that thereafter it becomes
misleading. This also may be regarded as constituting
misleading conduct. However, the general position
between contracting parties has been expressed in the
following way:
'The general rule, both of law and equity, in respect
to concealment, is that mere silence with regard to a
material fact, which there is no legal obligation to
divulge, will not avoid a contract, although it
operates as an injury to the party from whom it is
concealed.' (Smith v Hughes (1871) LR6 QB 597 at 604)."
156. Counsel for the applicant contend that, if a person lulls another into a false understanding by failing to give all the material facts, this is misleading conduct. They say that, if the respondents had informed the applicant that the blood which might be administered to him had not been tested, but that tested blood would soon be available, he could have considered whether to arrange a postponement of the operation until tested blood was available. No doubt that is so, but the failure of the respondents to so advise the applicant does not necessarily make their conduct misleading. It may merely mean that they failed to disclose information which, in retrospect, it would have been useful for the applicant to have. The issue of misleading conduct cannot be resolved by language such as "lulls ... into a false understanding". If the lulling is effected by a half-truth, the luller's conduct may be misleading; if it occurs simply because it does not occur to either party to advert to the subject, it is unlikely to amount to misleading conduct.
157. Even if it were possible to spell out from the circumstances a representation which amounted to misleading conduct, the applicant would face two further difficulties in respect of the claims under ss.52 and 55A of the Trade Practices Act. In the first place, ss.52 and 55A only apply to conduct "in trade or commerce". Whether or not the first and second respondents are "trading corporations", by reason of other activities, it is clear that, in supplying blood to hospitals for administration to patients, they act gratuitously. Although they are reimbursed most of the cost of the operations which enable them to provide the blood, they are not paid for the blood. They do not "trade" in blood. Their supply of blood is not an act "in trade and commerce".
158. This objection may not be open to the third respondent. Although the hospital did not charge for the blood itself, it did charge the applicant hospital fees. The hospital fees were paid in consideration of the supply to the applicant of nursing services; and the blood was supplied in the course of post-operative nursing. It is therefore strongly arguable that, if any representation had been made on behalf of the hospital, it would have been conduct "in trade or commerce": see the discussion of these terms in Re Ku-ring-gai Co-operative Building Society (No.2) Ltd (1978) 35 FLR 134 at pp 139,159. But the question is academic.
159. The second difficulty facing the applicant extends to all three
respondents. Section 82(1) of the Trade Practices Act confers
a right of
action upon a person who suffers loss or damage "by conduct of another person
that was done in contravention of a provision"
of, inter alia, Part V of that
Act. Sections 52 and 55A are, of course, included in Part V. But s.82(2)
requires any such action
to be commenced within three years after the date on
which the cause of action accrued. In Jobbins v Capel Court Corporation Ltd
(1989) 91 ALR 314 the Full Court assimilated the function of that subsection
to "familiar concepts of the law in respect of the limitation of actions".
The Court went on, at p 317:
"There is every reason to understand this language in160. In Do Carmo v Ford Excavations Proprietary Limited [1984] HCA 17; (1984) 154 CLR 234 at p 245 Wilson J explained the concept of "cause of action" as "simply the fact or combination of facts which gives rise to a right to sue. In an action for negligence, it consists of the wrongful act or omission and the consequent damage". The same statement may be made about causes of action arising under s.82 in respect of a contravention of s.52 or s.55A. The only person who may obtain damages in respect of a contravention of either of those sections is a person who has suffered loss or damage by reason of the contravention. Damage is a necessary element in the cause of action. Once it is suffered, the cause of action is complete.
the sense in which it has come to be understood in
statutes of limitations. For the purposes of those
statutes, a number of principles have been worked out.
In the first place, where the incurring of damage is an
essential element of a cause of action, the suffering
of some damage (the other elements of the cause of
action having already occurred) will, in general, start
time running even although the damage continues to
grow. The running of time is not suspended until all
the damage which will be suffered has ceased to flow,
nor does further damage constitute a fresh cause ofaction."
161. The evidence shows that the infected blood was part of a number of units
which was administered to the applicant immediately
after the operation; on 12
October 1984 and early the following day. As the process of sero-conversion
was then inevitable, it is
strongly arguable that the relevant loss or damage
was sustained at that time. But it is not necessary to decide that point.
The
applicant had an illness consistent with sero-conversion between 13
October and his discharge from hospital on 1 November. He reacted
positively
to two HIV tests in October 1985. On any view, damage had been sustained by
then. So the cause of action was complete.
Yet the proceeding was not
commenced until 8 November 1989, over four years later. It is clear that the
claims under ss.52 and 55A
are out of time.
Sections 71 and 74
162. Before dealing with the detail of ss.71 and 74 of the Trade Practices Act, it is important to note a fundamental difference between the scheme of Division 1 of Part V of the Act, which includes ss.52 and 55A, and that of Division 2, which includes ss.71 and 74. This is relevant to the submission of counsel for the third respondent that s.82(2) also bars the claims under ss.71 and 74.
163. Division 1 is entitled "Unfair Practices". In relation to its subject matter, the course taken by Parliament was to proscribe the various practices which were thought to be unacceptable. Almost every section commences with the words "A corporation shall not ...", followed by a description of particular conduct. But the mere proscription of particular conduct would not confer any right of action for damages upon a person damaged by such conduct. It was the purpose of s.82(1) to confer that right of action.
164. By contrast, Division 2 - which is entitled "Conditions and Warranties in Consumer Transactions" - does its work, not by proscribing unacceptable practices but by imposing, by force of statute and regardless of the wishes of the parties, additional contractual terms. These terms each improve the position of the weaker party; typically, but not necessarily, a consumer. But they do so by force of contract law; not by conferring a right of action for breach of a statutory prohibition. The circumstances which attract the operation of each section include the prior existence of a contract. Consequently, a person who sues in reliance upon a section in Division 2 does not do so in reliance upon s.82(1). That subsection is inapplicable. There is no "contravention of a provision of ... Part V"; but rather a breach of a contractual term imposed by a provision of Part V.
165. At least until recent times, the distinction I have made was critical to the jurisdiction of this Court. Until it was recast in 1987, s.86 of the Act conferred upon the Court jurisdiction "to hear and determine actions, prosecutions and other proceedings under this Part". Those proceedings included claims under s.82(1) in respect of "conduct ... in contravention of a provision of Part IV and V." But occasionally cases were brought to the Court in which an applicant sought to enforce a term implied into a contract by a provision contained in Division 2. The Court repeatedly held that s.86 did not confer any jurisdiction to hear such a claim, unless it was appended to some other claim which was within jurisdiction: see Arturi v Zupps Motors Pty Ltd [1980] FCA 164; (1980) 49 FLR 283, Zaravinos v Dairy Farmers Co-operative Ltd [1985] FCA 77; (1985) 7 FCR 195 and Hjertum v Ahern (1987) ATPR 40-823. See also the decision of Rogers J in Zalai v Col Crawford (Retail) Pty Ltd (1980) 2 NSWLR 438. The reason was that such a claim was not a claim "in respect of conduct in contravention of a provision" of Part IV.
166. By parity of reasoning s.82(2), which imposes the three year time limit, does not apply to an action for breach of a statutory contractual term. Subsection (2) applies only to "An action under subsection (1)".
167. The Trade Practices Act provides no limitation period in respect of claims based on a statutory contractual term. Accordingly, the usual limitation period, relevant to claims in contract, applies. That period is six years. As this proceeding was commenced within six years of the applicant's transfusion, his claims under ss.71 and 74 are within time.
168. Section 71 relevantly provides:
71.(1) Where a corporation supplies (otherwise than by169. I do not think that this section is applicable to the cases against any of the respondents. Even if it is appropriate to regard the blood plasma as "goods", a proposition which the respondents dispute, the assumption underlying each subsection is that there is a contract, onto which the implied condition is to be grafted, for the supply of those goods. But there was never a contract for the supply of the blood plasma to the applicant. He had no contract with either the first or second respondent. He did have a contract with the third respondent. But it was for the provision of nursing services; perhaps also medical attention. There was no contract for the supply of the blood plasma, which was intended - if necessary - to be supplied, and was supplied, free of charge.
way of sale by auction) goods to a consumer in the
course of a business, there is an implied condition
that the goods supplied under the contract for the
supply of the goods are of merchantable quality, except
that there is no such condition by virtue only of this
section -
(a) as regards defects specifically drawn
to the consumer's attention before the contract is
made; or
(b) if the consumer examines the goods
before the contract is made, as regards defects which
that examination ought to reveal.
(2) Where a corporation supplies (otherwise
than by way of sale by auction) goods to a consumer in
the course of a business and the consumer, expressly or
by implication, makes known to the corporation or to
the person by whom any antecedent negotiations are
conducted any particular purpose for which the goods
are being acquired, there is an implied condition that
the goods supplied under the contract for the supply of
the goods are reasonably fit for that purpose, whether
or not that is a purpose for which such goods are
commonly supplied, except where the circumstances show
that the consumer does not rely, or that it is
unreasonable for him to rely, on the skill or judgment
of the corporation or of that person.
(3) ..."
170. The respondents raise other points concerning the applicant's reliance on s.71. It is not necessary to deal with them. The claim under that section must fail.
171. Section 19 of the Sale of Goods Act (NSW), upon which the applicant alternatively relies, is couched in terms very similar to those of s.71. That section also presupposes a contract for the supply of goods. For the same reason the claims under that section must also fail.
172. Section 74 of the Trade Practices Act was amended in 1986; in a way
which is important to its application to this case. As
it stood in 1984 the
section read:
"74.(1) In every contract for the supply by a173. Although the contrary was suggested, I do not think that subs(2) could have any application to this case. However, but for one matter, there would be much to be said in favour of the view that subs(1) applied as against the third respondent. The subsection could have no application against either of the first two respondents; once again, this subsection assumes a contract between the consumer and the person who is to supply services to the consumer. The applicant never had a contract with either the first or second respondent. However, the position is different in relation to the third respondent. There was a contract between the applicant and The Prince Alfred Hospital. The applicant entered the hospital as a private, free-paying patient. Under that contract there was, at least, an implied term that the corporation, The Prince Alfred Hospital, would provide to him nursing services; perhaps other services as well. Those services were to be supplied to him by the corporation in the course of its business.
corporation in the course of a business of services to
a consumer there is an implied warranty that the
services will be rendered with due care and skill and
that any materials supplied in connexion with those
services will be reasonably fit for the purpose for
which they are supplied.
(2) Where a corporation supplies services to a
consumer in the course of a business and the consumer,
expressly or by implication, makes known to the
corporation any particular purpose for which the
services are required or the result that he desires the
services to achieve, there is an implied warranty that
the services supplied under the contract for the supply
of the services and any materials supplied in connexion
with those services will be reasonably fit for that
purpose or are of such a nature and quality that they
might reasonably be expected to achieve that result,
except where the circumstances show that the consumer
does not rely, or that it is unreasonable for him to
rely, on the corporation's skill or judgment.
(3) In this section, 'services' means services
by way of -
(a) the construction, maintenance, repair,
treatment, processing, cleaning or alteration of goods
or of fixtures on land;
(b) the alteration of the physical state
of land; or
(c) the transportation of goods otherwise
than for the purposes of a business, trade, profession
or occupation carried on or engaged in by the person
for whom the goods are transported."
174. The third respondent disputes that the applicant was a "consumer". There is now no direct definition of that term; cf. s.4(3) of the original Act. But reference should be made to s.4B of the Act which sets out the circumstances under which "a person shall be taken to have acquired particular" goods or services "as a consumer". In the case of services, the condition is that the price of the services did not exceed the prescribed amount or, where it did, "the services were of a kind ordinarily acquired for personal, domestic or household use or consumption": see s.4B(2). In 1984 the "prescribed amount" was $15,000. Although there is no evidence on the matter, it may safely be assumed that the charges made to the applicant for his 20 odd days hospitalisation did not exceed $15,000. In any event the services were acquired for the applicant's personal use.
175. Counsel for the third respondent submit, in relation to s.71, that the notion of "consumer" evident in s.4B is "of being able to fix a purchase price of the goods or alternatively a money value". They say, rightly, that in Australia it is not possible to put a price on blood plasma. Blood products are not sold in Australia. At least in New South Wales, a sale of blood plasma would probably be unlawful: see s.32 of the Human Tissue Act 1983 (NSW). When they turn to s.74, they simply repeat their s.71 submission. But, under s.74, the relevant contract is for the supply of services. It is possible to put a monetary value on nursing services. Moreover, the gratuitous supply of a blood product in the course of providing nursing care does not involve the entering into of "a contract or arrangement under which any person agrees, for valuable consideration ... to the sale or supply of (human body) tissue"; the action proscribed by s.32 of the Human Tissue Act.
176. The notion of a "consumer" of services may be unfamiliar to some. But once that notion is accepted, I do not see why a hospital patient who receives nursing services in return for payment of fees should not be regarded as a "consumer" of those services within the ordinary meaning of that term. There is nothing in s.4B to make that meaning inapplicable.
177. Then it is said that the nursing services were not supplied "in the course of a business". The argument is that these words, like "in trade or commerce", do not extend to all activities in which a trading corporation may be engaged. Reference is made to Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 64 ALJR 293. However, this authority is of little relevance. Nelson concerned an "internal" dealing, between a corporation and its employee. The present issue concerns an "external" dealing, between a corporation and its customer. In Nelson, Mason C.J., Deane, Dawson and Gaudron JJ said at p 295 that s.52 of the Trade Practices Act is concerned with "the conduct of a corporation towards persons, be they consumers or not, with whom it ... has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character". The "trade" of a hospital is the provision of services to patients. That is its business. I see no reason to doubt that its contract with the applicant was made "in the course of a business".
178. The applicant does not suggest that there was any breach by the hospital of the implied warranty that its services will be rendered with due care and skill. His case is that "materials" supplied in connection with those services were not reasonably fit for the purposes for which they were supplied.
179. Counsel for the third respondent dispute two aspects of this
formulation. Firstly, they say that fresh frozen plasma cannot
properly be
described as "materials". They cite two definitions of the word "materials"
contained in the Macquarie Dictionary viz:
"anything serving as crude or raw matter for working180. I do not read the words "crude or raw matter" as suggesting that only unprocessed goods may constitute "materials". To so suggest would be to overlook the fact that many items which are habitually called "materials" are processed goods; for example, building materials such as bricks and concrete pipes or cooking materials such as flour and butter. So it does not matter that fresh frozen plasma is a processed item, separated from the whole blood by a centrifugal process and snap-frozen. The second half of the quoted definition refers to "articles of any kind requisite for ... doing something". Fresh frozen plasma is an article designed to do something; to achieve coagulation of the blood of the recipient.
upon or developing" and "articles of any kind requisite
for making or doing something."
181. No doubt there was a time when most people would have rejected the notion that human tissue might constitute "materials". But that was because medical science had not yet developed techniques for making available to one person the tissue of another. Once that can be done, there is no more reason to deny to reusable human tissue the description "materials" than there would be to deny that description to leather, intended to be made into shoes, or cat gut, intended for sutures.
182. Finally, it is said that the blood plasma supplied to the applicant was, in fact, "reasonably fit for the purpose for which (it was) supplied". The purpose, say counsel, was to achieve coagulation, to stop the applicant's life-threatening bleed. It did succeed in achieving coagulation. The bleeding stopped. They add that the requirement is only that the materials be "reasonably" fit for their purpose. The quality of fresh frozen plasma cannot be guaranteed; its use in medical science is to deal with problems of an immediate and more serious kind. The word "reasonably" imports a balancing process, setting the immediate benefits of the material against a possible adverse long-term effect.
183. I think that most people would be surprised at the suggestion that HIV infected blood was "reasonably fit" to be used as a coagulant. So far as I am aware, there is no authority upon the meaning of the description "reasonably fit", where used in s.74. But the expression has a substantial history, having been used in sale of goods legislation since the law on that subject was first codified in 1893: see Sale of Goods Act 1893 (UK) s.141. In Kendall v William Lillico and Sons Ltd (also called "Hardwick Game Farm v SA PPA")(1969) AC 31, the House of Lords considered that subsection in connection with a claim arising out of the supply of compounded meal. Unknown to both the buyer and seller, the meal contained traces of a substance which rendered it toxic to poultry, although not to cattle. The House held that the meal was not "reasonably fit" for use as poultry food. There was much discussion about the particularity of purpose at the time of the purchase, but it does not seem to have occurred to anyone that the meal should be regarded as "reasonably fit" to be supplied to poultry since it was suitable for the immediate purpose of providing nourishment, although it would ultimately kill them.
184. However, as I have said, there is one fatal defect in the applicant's s.74 case. As it stood in 1984, subs.(3) of s.74 provided a special definition of "services", for use only in that section. It commenced with the words "'services' means services by way of"; so the general definition of "services", contained in s.4, remained relevant. That definition included "any rights ... benefits, privileges or facilities that are ... granted or conferred in trade or commerce" and, in particular, "a contract for or in relation to the performance of work (including work of a professional nature), whether with or without the supply of goods". The s.4 definition clearly covered nursing services rendered in the course of running the business of a hospital.
185. However, the effect of s.74(3) was to limit the application of the section to only some kinds of s.4 "services". It did so by providing that the relevant "services" had to fall within one of the three categories described in paras.(a), (b) and (c). None of those paragraphs refers to services such as those supplied to this applicant at The Royal Prince Alfred Hospital. Accordingly, the s.74 claim must also fail.
186. In my judgment, the applicant is unable to make out a case against any
of the respondents in relation to any of the provisions
of the Trade Practices
Act upon which he relies. The case comes back to a common law negligence
action.
Negligence: general principles
187. The respondents do not dispute that they each owed a duty of care to the
applicant in connection with the transfused plasma.
The question is whether
any of them breached that duty. In that connection it is helpful to recall
the words of Mason J (with whom
Stephen and Aickin JJ agreed) in Wyong Shire
Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 at pp 47-48:
"In deciding whether there has been a breach of the188. There is no doubt that, in October 1984, a reasonable person in the position of the respondents would have foreseen the possibility of HIV infection from the transfusion supplied to the applicant. Even before it was established that AIDS was caused by a virus, it was believed that the agent responsible for the disease was transmissible by blood transfusion. Professor Penington had expressed this opinion at the meeting held in Perth on 23 July 1983. His opinion was amply supported by the evidence of AIDS amongst American haemophiliacs and transfusees, being persons not otherwise at high risk of contracting the disease. The whole debate about surrogate testing arose because of the participants' awareness of the risk of transfusion-infection, although they regarded the chance of infection in any particular case as extremely small. And, of course, by October 1984 the causative agent had been identified as a virus and described. Consequently, in the present case, the first question posed by Mason J must be answered in the affirmative. The next task is the difficult one: to determine what a reasonable person would do by way of response to that risk. In that connection, it is salutary to recall the warning of Barwick C.J. in Maloney v Commissioner for Railways (1978) 52 ALJR 292 at 292-293:
duty of care the tribunal of fact must first ask itself
whether a reasonable man in the defendant's position
would have foreseen that his conduct involved a risk of
injury to the plaintiff or to a class of persons
including the plaintiff. If the answer be in the
affirmative, it is then for the tribunal of fact to
determine what a reasonable man would do by way of
response to the risk. The perception of the reasonable
man's response calls for a consideration of the
magnitude of the risk and the degree of the probability
of its occurrence, along with the expense, difficulty
and inconvenience of taking alleviating action and any
other conflicting responsibilities which the defendant
may have. It is only when these matters are balanced
out that the tribunal of fact can confidently assert
what is the standard of response to be ascribed to the
reasonable man placed in the defendant's position.
The considerations to which I have referred indicate
that a risk of injury which is remote in the sense that
it is extremely unlikely to occur may nevertheless
constitute a foreseeable risk. A risk which is not
far-fetched or fanciful is real and therefore
foreseeable. But, as we have seen, the existence of a
foreseeable risk of injury does not in itself dispose
of the question of breach of duty. The magnitude of
the risk and its degree of probability remain to be
considered with other relevant factors."
"It is easy to overlook the all important emphasis upon189. Coming closer to the facts of this case, and because of the respondents' reliance on American practice as an answer to the negligence claims, it is necessary to refer to the controversy as to whether, in determining the question of breach of duty by a medical practitioner, the practitioner is entitled to exoneration if it appears that he or she has acted in accordance with ordinary professional practice. McNair J said so in Bolam v Friern Hospital Management Committee (1957) 1 WLR 582 at p 587:
the word 'reasonable' in the statement of the duty.
Perfection or the use of increased knowledge or
experience embraced in hindsight after the event should
form no part of the components of what is reasonable in
all the circumstances. That matter must be judged in
prospect and not in retrospect. The likelihood of the
incapacitating occurrence, the likely extent of the
injuries which the occurrence may cause, the nature and
extent of the burden of providing a safeguard against
the occurrence and the practicability of the specific
safeguard which would do so are all indispensable
considerations in determining what ought reasonably to
be done."
"I myself would prefer to put it this way, that he is190. The Bolam test, as it has been called, has often been applied. But it has also been criticised. At least without significant qualification, it is at odds with the principle applied in master and servant negligence cases. Dealing with an accident on a ship which was said to have occurred despite adherence to accepted practice, in Morris v West Hartlepool Steam Navigation Co Ltd (1958) AC 552 at p 574, Lord Reid said:
not guilty of negligence if he has acted in accordance
with a practice accepted as proper by a responsible
body of medical men skilled in that particular art."
"I would agree that, if a practice has been generally191. In Sidaway v Board of Governors of the Bethlem Royal Hospital and the Maudsley Hospital [1985] UKHL 1; (1985) AC 871, the House of Lords divided upon the adequacy of Bolam. The major question in the case was the extent of a patient's right to be informed of the possible consequences of treatment; in United States' parlance, "informed consent". But that issue was discussed in terms of Bolam. The majority took the view that, in fixing the extent of that right, the courts should be guided by expert medical evidence as to usual practice. Lord Scarman thought that the law should impose its own test, requiring the court to answer the question "what would a reasonably prudent patient think significant if in the situation of this patient": see p 888. As his Lordship made clear, the "prudent patient" was not a real patient, certainly not the particular patient, but a norm like the man on the Clapham omnibus.
followed for a long time in similar circumstances and
there has been no mishap, a reasonable and prudent man
might well be influenced by that, and it might be
difficult to say that the practice was so obviously
wrong that to rely on it was folly. But an employer
seeking to rely on a practice which is admittedly a bad
one must at least prove that it has been followed
without mishap sufficiently widely in circumstances
similar to those in his own case in all material
respects."
192. Lord Scarman's reasons for regarding Bolam as inadequate were given at p
882:
"Responsible medical judgment may, indeed, provide the193. Similar sentiments have been expressed in Australia. In Albrighton v Royal Prince Alfred Hospital (1980) 2 NSWLR 542 one question was the admissibility of the evidence of an English medical practitioner concerning the procedures undertaken in an operation in Sydney. In the course of discussion of that matter, at pp 562-563, Reynolds JA, with whom Hope JA agreed, said:
law with an acceptable standard in determining whether
a doctor in diagnosis or treatment has complied with
his duty. But is it right that medical judgment should
determine whether there exists a duty to warn of risk
and its scope? It would be a strange conclusion if the
courts should be led to conclude that our law, which
undoubtedly recognises a right in the patient to decide
whether he will accept or reject the treatment
proposed, should permit the doctors to determine
whether and in what circumstances a duty arises
requiring the doctor to warn his patient of the risks
inherent in the treatment which he proposes."
"It also, in my view, is based on a wrong assumption194. Three years later, in F v R (1983) SASR 189, also an "informed consent" case, King C.J. rejected the conclusiveness of evidence of accepted practice. In language which anticipated the view expressed by Lord Scarman in Sidaway, he said at p 194:
that a jury should be directed that, if what is charged
as negligence is shown to have been done in accordance
with the usual and customary practice and procedure
then prevailing in what was called a particular
'medical community', they cannot find negligence."
"In many cases an approved professional practice as to195. F v R has been followed by Australian first instance judges on at least three occasions: see Battersby v Tottman (1985) 37 SASR 524, Ellis v Wallsend District Hospital (Cole J, New South Wales Supreme Court, 16 September 1988, not reported) and Whitaker v Rogers (Campbell J, New South Wales Supreme Court, 3 August 1990). It is one of the authorities cited by Fleming, in the following comment upon evidence of common practice in medical negligence cases in "Law of Torts" (7th ed) at p 110:
disclosure will be decisive. But professions may adopt
unreasonable practices. Practices may develop in
professions, particularly as to disclosure, not because
they serve the interests of the clients, but because
they protect the interests or convenience of members of
the profession. The court has an obligation to
scrutinize professional practices to ensure that they
accord with the standard of reasonableness imposed by
the law. A practice as to disclosure approved and
adopted by a profession or a section of it may be in
many cases the determining consideration as to what is
reasonable. On the facts of a particular case the
answer to the question whether the defendant's conduct
conformed to approved professional practice may decide
the issue of negligence, and the test has been posed in
such terms in a number of cases. The ultimate
question, however, is not whether the defendant's
conduct accords with the practices of his profession or
some part of it, but whether it conforms to the
standard of reasonable care demanded by the law. That
is a question for the court and the duty of deciding it
cannot be delegated to any profession or group in the
community."
"Common practice plays its most conspicuous role in196. It seems to me that, for the reasons they give, the view expressed by Reynolds J.A. in Albrighton, by King C.J. in F v R and by Lord Scarman in Sidaway is to be preferred to a rigid reliance upon common practice. Whilst evidence of the practice usually adopted by persons in the position of a defendant will generally be of great assistance, and often decisive, the way must be left open to a plaintiff to persuade the court that the practice does not ensure an adequate standard of care. Adopting that philosophy, I turn to the heads of negligence which are pressed in the present case.
medical negligence actions. Conscious at once of the
layman's ignorance of medical science and apprehensive
of the impact of jury bias on a peculiarly vulnerable
profession, courts have resorted to the safeguard of
insisting that negligence in diagnosis and treatment
(including disclosure of risks) cannot ordinarily be
established without the aid of expert testimony or in
the teeth of conformity with accepted medical practice.
However there is no categorical rule. Thus an accepted
practice is open to censure by a jury (nor expert
testimony required) at any rate in matters not
involving diagnostic or clinical skills, on which an
ordinary person may presume to pass judgment sensibly,
like omission to inform the patient of risks, failure
to remove a sponge, an explosion set-off by an
admixture of ether vapour and oxygen or injury to a
patient's body outside the area of treatment."
197. As I have recounted, at the date of D9's donation, 3 October 1984, the practice of the New South Wales BTS was to give to each donor the document entitled "An Important Notice to All Blood Donors regarding AIDS (Acquired Immune Deficiency Syndrome)" which I quoted earlier. Each donor was asked to sign the statement "I have read this notice and am not one of the people described in paragraphs 1, 2 and 3 above". D9 did so and gave blood.
198. According to his subsequent statement to Dr Lien, D9 was the sexual partner of an intravenous drug user. If this was correct, he fell within para.3 of the notice. Yet he gave blood. Under those circumstances, the applicant understandably questions the sufficiency of the screening process.
199. The major element in this aspect of the applicant's case was a criticism of the wording of the statement. For that purpose the applicant sought to adduce evidence from Professor Philip Ley, who recently retired as Professor of Psychology within the University of Sydney. But objection was taken to Professor Ley's evidence upon two grounds: that the matters addressed by him in his affidavit were matters for determination by the Court and that the matters in respect of which he offered opinions were not matters which partook of a science. Reference was made to Clark v Ryan [1960] HCA 42; (1960) 103 CLR 486.
200. I indicated to counsel that I did not think that the first objection was valid. This question was discussed in a recent Full Court judgment to which I was a party, Arnotts Limited v Trade Practices Commission (29 November 1990, not yet reported). I need not elaborate on what was there said. As to the second matter, I permitted counsel for the respondents to question Professor Ley on the voir dire, after which I admitted his evidence. At the time I gave short reasons, indicating that I would elaborate the matter in my reasons for judgment in the proceeding.
201. In Clark v Ryan at pp 491-492 Dixon C.J. quoted several formulations of the circumstances under which expert opinion is admissible: "the opinion of witnesses possessing peculiar skill is admissible whenever the subject-matter of inquiry is such that inexperienced persons are unlikely to prove capable of forming a correct judgment upon it without such assistance, in other words, when it so far partakes of the nature of a science as to require a course of previous habit, or study, in order to the attainment of a knowledge of it"; "expert witnesses may give in evidence statements based on their own experience or study"; "no one should be allowed to give evidence as an expert unless his profession or course of study gives him more opportunity of judging than other people".
202. The evidence showed that Professor Ley graduated as a Bachelor of Arts at the University of Manchester in 1955. He attained an Academic Postgraduate Diploma in Psychology (Abnormal) at the University of London in 1956. He became a Doctor of Philosophy, University of Liverpool, in 1969. He worked as a clinical psychologist at various hospitals and institutions from January 1957 until November 1962 when he became Senior Research Psychologist at the Nuffield Research Unit within the Department of Psychiatry at the University of Liverpool. In 1965 he became Lecturer in Clinical Psychology within that Department. He remained at the University of Liverpool until 1977, progressively holding positions as Senior Lecturer and Acting Head of the Sub-Department of Clinical Psychology. In March 1977 Professor Ley came to Australia, taking an appointment as Reader in Psychology at the University of Queensland. He was appointed Professor of Psychology at the University of Sydney in August 1980 and retained that appointment until the end of 1989. During his academic career Professor Ley accepted a number of temporary appointments, as a Visitor or Consultant, at other institutions.
203. Of particular relevance to the witness' qualifications to give evidence in this case was the fact that, since about 1970, his major research interest has been, in his words, "how best to transmit information to patients, both orally and in writing". He has published extensively on that subject and has been retained from time to time to advise persons active in the health field, including both government instrumentalities and research organisations. He gave examples: the most useful form of written information to be given to people who wish to lose weight, written information for psychiatric patients about their medication, the most effective form of label for dangerous substances etc. Professor Ley said that it is "only recently that the field has coalesced as it were and now there are courses, and I think some Departments even, in America ... called Information Design and textbooks have come out on that subject".
204. To a degree, everyone has expertise in communication. Accordingly, it may not readily be apparent that communication may constitute a skilled science. Moreover, as Professor Ley said, his speciality is one of relatively recent origin, with few practitioners. No doubt both of those matters contributed to counsels' strong objection to the admission of Professor Ley's opinion evidence.
205. However, I do not think that the fact that others in the community have some insight into a particular matter means that a person who has made a special study of the subject should be denied the status of an expert in the field. Professor Ley's evidence showed that he had made a much more extensive study of communication with individuals, especially on medical and health matters, than would be made by ordinary people. He had acquired special expertise in the most effective way of making people aware of important information, especially in that area. Although inexperienced persons might make some sort of judgment about the matters addressed by Professor Ley, such as the effectiveness of the warning notice, it seems to me that this judgment would at least be assisted by the views of an expert in health communication. It is easy for people, who comfortably communicate with colleagues in their field, to overlook the comprehension difficulties of strangers to their area, especially people with a different linguistic, cultural or social background. Even a stranger to the field, such as a judge, might not readily appreciate the extent to which such factors reduce the effectiveness of a communication to people coming from a different background. And there was no doubt that, over a period of almost 20 years, Professor Ley had devoted considerable time and study to the very area of knowledge about which he was asked to depose. Accordingly, it seems to me that his evidence would meet any of the tests enunciated in Clark v Ryan.
206. Professor Ley annexed to his affidavit a document which he called a "critique" of the donor information form signed by D9. I need not set this out in full. He made the point that there were a number of reasons why "at risk" people might choose not to identify themselves as falling within one of the specified classes. In substance, his comments were similar to those made by Dr Whisson in the July 1983 symposium to which I have already referred. He also referred to studies which established that "written materials presented to patients in health care contexts are often too difficult for many of them to understand". Percentages were quoted.
207. Professor Ley thought that interviews would have been likely to be more effective than a notice or questionnaire. He also criticised the form of the reference to homosexuality; making the point that - unlike the reference to intravenous drug using - it did not include the words "present or past". He said that, as the first group (homosexuals) was confined to males, some people might assume that the second group (intravenous drug users) was also confined to males. He thought that the words "of the above" might be understood by some donors as referring only to the second group, rather than both the first and second group, as intended. Professor Ley went so far as to question the document's reliance upon the word "homosexual", suggesting that the message might have been better understood if a question had been asked which included a description, in explicit terms, of the homosexual act; although he conceded that this course might have affronted many blood donors and deterred them from returning.
208. I have no doubt that there is substance in some of Professor Ley's criticisms. No doubt the form could have been improved. In fact, it was later revised and, eventually, superseded by a questionnaire to be completed at interview. But I do not think that the imperfections of the form, such as they were, amounted to actionable negligence. The form was relatively short and explicit. Although it used a number of polysyllabic words, the critical words were well known in the community at that time. In particular, I remain unconvinced that, in 1984, there were many Sydney adults who did not understand the meaning of the word "homosexual", especially males who were in fact practising homosexuals. It must be remembered that, over the preceding couple of years, there had been intense publicity about the possible decriminalisation of male homosexual acts and the relationship between homosexuality and AIDS. This publicity penetrated all forms of the media.
209. A more substantial criticism, as it seems to me, is that, for some people, there might be an element of ambiguity in the description "homosexual males". Cases were postulated in argument of men who had followed a homosexual lifestyle but who, more recently, had been heterosexual. Counsel suggested that they might not have continued to regard themselves as homosexuals. Counsel might be correct; I cannot judge the likelihood of that situation. But it must also be remembered that the form invited donors to seek advice from a medical officer. A person who was in doubt about the application of the words "homosexual or bisexual males" to himself or to her sexual partner could easily have clarified the position.
210. (As an aside, such an enquirer would probably have been told that, if the homosexual acts had ceased more than a couple of years ago, there was no difficulty about donating blood. At that time, it was generally accepted that anyone who had been infected for more than about two years would have already developed full AIDS. This is now known to be incorrect.) As it seems to me, the most significant criticism made by Professor Ley concerned the lack of a "discard box", a receptacle into which a donor might secretly place a card identifying his or her donation and asking that it not be used. The argument is that a donor in a high risk category might be embarrassed about declining to give blood, especially if he or she had been accompanied to the blood bank by someone else. Even a request to see a medical officer might attract the curiosity of a companion. If there were a discard box, the donor could give blood - and be seen to give blood - in the usual way, but quietly indicate that it was not to be used.
211. In evidence, Dr Archer said that at one stage, I gather in 1983, he considered the use of a discard box. He contacted the Director of a New York blood bank which he knew to have introduced such a system. In the New York blood bank, apparently, donors were given the opportunity to nominate their blood for "laboratory" use, thus ensuring that it would not be transfused. Dr Archer was told that a large number of people had taken this course. In the belief of the New York Director, many people who were not in high risk AIDS categories regarded the use of their blood for research purposes as a badge of honour and nominated it notwithstanding that there was no reason to doubt its suitability for transfusion. Accordingly, the idea was regarded as a failure.
212. I would have thought that the solution to the New York problem was to change the form of the notice so as to invite use of the discard box only where a donor was in a high risk category and to indicate that the blood would be discarded. But Dr Archer was so discouraged by this report that he abandoned the notion of a discard box altogether. He said in evidence that he reorganised the exits of the blood bank in such a manner as to enable people discreetly to withdraw. Whether this really solved the problem I do not know; the matter was not followed up by counsel.
213. Professor Ley did not claim that his suggestions would necessarily have
eliminated the problems which he identified. In the
summary of his critique
he said:
"Overall, it is my opinion that the document could have214. In cross-examination, Professor Ley emphasised the importance of empirical testing. He said that, on some occasions, he had found that the application of his ideas about the framing of documents had led to a marked increase in comprehension; on other occasions there was no improvement. By the time that Professor Ley was consulted, in 1990, it was impossible to carry out an empirical testing exercise which would provide results indicative of the position in 1984. Too much had happened in the meantime. In this situation, the most that can be said is that, if in 1984 the advice of someone like Professor Ley had been taken and followed, there may have been an increase in the number of people who understood, and responded responsibly to, the notice.
been better worded and constructed. I think that if it
had been improved along the lines suggested above, it
would probably have led to fewer people who were in
at-risk groups giving blood. However, I do not know how
effective the document as it stands actually was. Nor
can I estimate how many fewer at-risk donors would have
given blood.
It is clearly my opinion that the balance of
probabilities makes it likely that a better constructed
document would have been a better screening device.
However, it has to be admitted that only an empirical
comparison of the effectiveness of the document in
question with an 'improved' document could conclusively
decide the issue."
215. Even if the adoption of such advice had led to an increase in the number
of people who understood the document, it is not clear
that this would have
affected this case. There is nothing to suggest that D9 suffered any problem
of comprehension when he gave blood
on 3 October 1984. He claimed to be the
sexual partner of an intravenous drug user, and there was no ambiguity in the
notice about
this category. Furthermore, he gave blood on two subsequent
occasions, 21 March and 5 June 1985, when the notice had been replaced
by a
questionnaire. The form of questionnaire completed at his interview on 21
March referred to "Males who have engaged in homosexual
activity within the
past five (5) years"; "Intravenous drug users, now or within the past five (5)
years"; and "sexual partners of
the above". By 5 June the form had become even
more explicit. The donor was required to sign, and D9 did sign, a
"Declaration relating
to A.I.D.S" which was in the following terms:
"I hereby certify that to the best of my knowledge all216. It is difficult to see how the descriptions in this declaration of the unacceptable donor classes could have been made more clear. Yet D9 signed the form and donated HIV infected blood. It seems to me that either he did not fall within any of those classes, contrary to his statement at a subsequent interview, or he was determined, for his own unexplained reasons, to give blood despite the requests. If he was prepared to take that course in 1985, there is no reason to ascribe his donation on 3 October 1984 to ignorance of the request then made.
of the following statements are true:
1. I have not engaged in male to male sexual activity
during the past five years:
2. I have not injected myself, or been injected with,
any drug not prescribed by a qualified medical
practitioner within the past five years:
3. I am not suffering from night sweats, weight loss,
persistent fever, diarrhoea or swollen glands:
4. I have no reason to believe that I am suffering
from AIDS (Acquired Immune Deficiency Syndrome) or any
disease related to it:
5. My spouse or any sexual partner does not come
within the categories described above.
I am signing this statement in the presence of a member
of the staff of the Blood Transfusion Service."
217. Accordingly, even if it were possible to say that the form of the notice
signed on 3 October 1984 fell short of what was necessary
to discharge the
first and second respondents' obligation to take reasonable care not to injure
the applicant, it would not be possible
to find that there was any causal
connection between that omission and the infection of the applicant. This
ground of negligence
must fail.
Negligence: failure to make an earlier decision regarding surrogate testing
218. I turn now to the final ground of liability argued on behalf of the applicant: the failure of the first and second respondents to introduce, and the failure of the third respondent to insist upon, timely anti-HBc surrogate testing. Much of the evidence relating to this ground has already been recounted. The argument in favour of anti-HBc surrogate testing depends upon the circumstance that hepatitis B infection is relatively common amongst male homosexuals, the most prominent sub-group of AIDS sufferers. From their earliest days, AIDS statistics consistently showed over 70% of all patients to be homosexual or bisexual males. The pre-October 1984 literature was clear as to the relationship between male homosexuality and hepatitis B infection. In February 1982, "Annals of Internal Medicine" published a short paper by Reiner and others in which the authors set out to explain "Why active and passive oral-anal and genital-anal intercourse correlate strongly with hepatitis B virus (HBV) infection in homosexual men". In an article published in "The Journal of Infectious Diseases" in July 1982, a group of CDC researchers led by Dr MT Schreeder reported a study of 3,816 homosexual men who were examined in five sexually transmitted disease clinics. The rate of HBV seropositivity was 61.5%. In Australia, the link between homosexuality and HBV infection was also known. On 12 November 1983 the "Medical Journal of Australia" published an article by Dr Christopher Burrell and others - including Dr Beal, the Director of the South Australian BTS - entitled "Hepatitis B reservoirs and attack rates in an Australian community". That article reported the results of HBV testing amongst four sub-groups of the South Australian community. It showed that, of 163 homosexual men recruited at an Adelaide "gay" club, 37% proved positive to a hepatitis B surface antibody test. (Interestingly, and this is relevant to the argument on the other side, 45% of 709 tested Asians and 66% of 327 tested Aboriginals also tested positive.) 4.85% of a sample of 453 routine South Australian blood donors were positive to this same test.
219. The same issue of the "Medical Journal of Australia" carried a letter from three researchers at the Fairfield Hospital, including Professor Gust. This letter reported hepatitis B markers in 46.8% of a group of 496 homosexual men who had attended a particular general practice between September 1981 and April 1982. The practice was described as "known to be sympathetic to the homosexual community", so perhaps the sample was biased towards those who were more integrated into, and perhaps sexually active amongst, the homosexual community.
220. Although it came rather late in the day, so far as this case is concerned, the Adelaide and Melbourne findings were confirmed for Sydney in a paper published in the August 1984 issue of the "Australia and New Zealand Journal of Medicine". This paper, written by Dr P J Christopher and others, dealt with the incidence of HBV infection among patients of a sexually transmitted disease clinic in Sydney. It revealed that of 210 male homosexuals 64.3% had an HBV marker; 60% were positive to the anti-HBc test. A sample of 34 male bisexuals showed 47.1% anti-HBc positivity compared with 10.9% for male heterosexuals and 9.5% for female heterosexuals. Of course, all those figures may be higher than the average for their groups, given that the sample population was taken from people who perceived themselves to have a sexually transmitted disease problem.
221. Those who were concerned with the operation of blood banks, both in America and in Australia, were well aware of the link between male homosexuality and HBV infection. They were also well aware of the massive over-representation of homosexual males amongst AIDS patients. Yet, overwhelmingly, they did not favour surrogate anti-HBc testing at blood banks. There appear to have been three main reasons for this attitude: the non-specific nature of the test, the "magnet" problem and the effect on the blood supply.
222. There is no medical correlation between HBV and HIV. The two viruses are quite distinct. They induce different diseases. A particular individual may become infected with either virus without becoming infected with the other. Accordingly, there is no "scientific" basis for using an HBV test as an indication of HIV. A positive result to an anti-HBc test does not establish that the person has contracted HIV. A negative result does not negative HIV. There is no doubt that the "unscientific" nature of the test repelled many scientists. This repulsion is discernible in the transcripts of both the Bethesda meeting of 15-16 December 1983 and the Perth symposium of 23 July 1984. It was a reaction expressed in evidence by Dr Archer, Professor Paul Holland of Sacramento and Professor Gust. The reaction is understandable. Any scientist is likely to be more comfortable with a test which has a scientifically-demonstrated connection with the condition under search. The use of anti-HBc as a test for AIDS had no such connection. It depended upon the social, rather than the scientific, fact that a particular sub-group of the population suffered disproportionately highly from both conditions.
223. The "magnet" problem was eloquently expounded in this case by Professor Holland. Professor Holland was Director of the Blood Bank Department of the Clinical Center of the National Institutes of Health ("NIH"), in Maryland, between 1974 and August 1983. Since then he has been the Medical Director and Chief Executive Officer of the Sacramento Medical Foundation Blood Center in California and, since 1984, Clinical Professor in the Division of Hematology and Oncology at the University of California, Davis Medical School. Professor Holland has published extensively on immunological and haemological matters. He has served on numerous committees dealing with those topics and blood banking generally, including the NIH Hepatitis Coordinating Committee, from 1973 to 1983, the Scientific Council of the American Red Cross Blood Program, from 1980 to 1984, the Transfusion Transmitted Diseases Committee of the American Association of Blood Banks, from 1982 to the present time, the Ad Hoc Committee on AIDS Related Issues and Scientific Program of the Council of Community Blood Centers and the transfusion committees of several hospitals and commercial fractionators. Professor Holland has been Chairman, from its establishment in June 1984 until the present time, of the Transfusion Safety Study Committee of the National Heart, Blood and Lung Institute. That committee was charged with reviewing the results of a $22 million government financed study at several blood centres and hospitals which provided data relevant to surrogate tests. As his achievements might suggest, Professor Holland is a highly intelligent and articulate person. I have no doubt that, during at least the last decade, he has been an influential figure in American blood banking. During 1983-1984 he was resolutely opposed to anti-HBc surrogate testing, despite the fact that his Sacramento blood bank immediately adjoined the areas served by the five Californian blood banks which did introduce that test. He made his views known at the time and I think it probable that they significantly influenced the American debate.
224. Professor Holland held the view that there was no evidence that anti-HBc
testing was effective or even potentially effective.
In his affidavit he
expressed the matter in this way:
"The suggestion that the hepatitis B core antibody test225. He pointed out in evidence that, although hepatitis rates were high amongst sexually active homosexuals, less than half of such people would return a positive result to such a test. He held the view that it would be impossible to conceal a practice of performing such tests from blood donors. Indeed, he thought that American law compelled such a disclosure. He was concerned that, once the word got about that the blood bank was "testing for AIDS", many people in high risk AIDS groups would donate blood for the specific purpose of ascertaining whether they had an AIDS infection. It was put to Professor Holland that it could have been explained to donors that the test was not specific to AIDS, so that the result did not indicate whether the donor had AIDS. But Professor Holland felt that this distinction would be too subtle for most people.
or any other test for hepatitis B should have been used
as a surrogate test depends, in my view, on the
assumption that there was (and is) a correlation
between those groups at 'high risk' of carrying the
AIDS condition and those who had hepatitis B or
contracted hepatitis B in the past but were not
presently infective. Persons testing positive for
hepatitis B do not necessarily have the AIDS condition.
In fact, according to my own experience in 1984 and
1985, most individuals with a reactive test for anti-HBc
are not infected with the AIDS virus and most
individuals with anti-HIV are not also anti-HBc
reactive. Moreover, I did not regard the AIDS
condition as being qualitatively similar to the
hepatitis B virus and did not advise the exclusion or
discarding of blood found to contain hepatitis B core
antibodies."
226. During the course of Professor Holland's evidence reference was made to an article published in NEJM in 1989, to which a passing reference has already been made. This article, by Leitman and others, concerned a sample of Washington DC voluntary blood donors who had tested HIV positive. It appears that, out of 693,000 donors between July 1985 and December 1988, 284 tested HIV positive. The research team evaluated the cases of 236 of these donors. They asked 98 of the donors, all of whom were from high risk groups, why they had given blood despite requests not to do so. Twenty-five donors gave as their reason the desire for an HIV-antibody test. A further 14 donors said that they knew that their blood would be tested and not used if HIV positive.
227. The Leitman article was published, of course, long after 1984. But, when shown the article, Professor Holland commented that it showed that "40 percent of the people donated because the test was there. If the test had not been there they would not have donated".
228. One problem in using the Leitman article as a retrospective justification of the "magnet" argument is that it related to an HIV specific test. After July 1985 it was well known that the blood banks used a specific test. It was that test, on Professor Holland's reasoning, that the 39 donors were seeking. Whether they would have taken the same course in relation to an anti-HBc surrogate test is unknowable; so much depends on what they would have been told.
229. Professor Engelman did not share Professor Holland's concern about the magnet effect. He, of course, carried out T4:T8 testing at Stanford for about two years, until the HIV test became available. He denied any knowledge of a "magnet" effect. Indeed, he said that he did not even hear the term at the time.
230. The Stanford Blood Bank did not inform donors, in advance of their donation, that their blood would be tested. About 2% of all donations showed abnormal T cell ratios and was discarded. But the donors were not immediately informed of this fact. They were called in for interview only where a subsequent donation also showed an abnormal T cell ratio. The donors were then asked about high risk AIDS behaviour. If they denied any such behaviour, they were reassured. If they admitted high risk behaviour they were warned against giving blood in the future and advised to consult their physician. Professor Engleman readily agreed that an intelligent person who was given this advice might guess that he or she had an HIV infection. But he discounted the likelihood that this information would "get out amongst the community in which he lived". It is Professor Engleman's strong view that any disadvantage in having the test, from the point of view of its attracting undesirable blood donors, was outweighed by its potential to identify donors who might belong to high risk categories. Professor Engleman accepts that an anti-HBc surrogate test is "unscientific", in the sense that I have mentioned, but he maintains that nonetheless it happened to be a useful marker of high risk donors.
231. The Court was fortunate to have the arguments about the "magnet" effect expounded by such impressive witnesses as Professor Holland and Professor Engleman. Professor Engleman is also highly intelligent and articulate. Each of these witnesses sincerely holds the view he expressed, as is evident from the fact that each propounded that view in America in 1983-1984. The major difference between them does not arise out of any matter of scientific fact or reasoning but from a difference in perception about the balance between two factors which are probably impossible to determine, which certainly have never been determined: the extent to which high risk persons would be attracted as donors because of their knowledge that a particular blood bank used an anti-HBc test as a surrogate test for AIDS and the number of HIV infected donations which would be discarded as a consequence of testing anti-HBc positive.
232. In relation to the effect of anti-HBc surrogate testing on the blood supply, there was no real disagreement between Professor Holland and Professor Engleman. Both accepted that a policy of discarding anti-HBc positive blood would lead to a loss of 3-5% of all donations.
233. Surprisingly, and this is a criticism made by counsel for the applicant, the United States debate about surrogate testing substantially by-passed Australia. As I have mentioned, surrogate testing was briefly discussed at the Perth symposium of 23 July 1983, Dr Whisson making reference to what Professor Holland called the "magnet" effect. There was some discussion as to how this effect might be off-set. But, so far as the evidence reveals, surrogate testing was not further discussed, in Australia, until after Dr Archer made his decision in August 1984. Further, although there was a general understanding that, as in America, up to 5% of all donations would be anti-HBc positive, nobody appears to have assessed the effects of this wastage on the adequacy of the donor blood supply. Australian blood bankers and health authorities appear to have been content simply to follow the American practice, without asking themselves whether there were relevant differences between the positions in the two countries. Dr Archer said in evidence that he did not consider or discuss the use of an anti-HBc test until August 1984, after the Lokar case. He said that he was not aware "of the kinds of theories that had been discussed in the United States about ... surrogate testing"; although he said that in 1983 and early 1984 he was aware that there had been discussions leading to the conclusion "that nothing was effective".
234. Even in August 1984, although the Lokar case triggered Dr Archer's
inquiries as to the possibility of doing something more,
his decision to
introduce anti-HBc testing was directly influenced by his perception of what
was happening in America. He gave this
evidence:
Q: "Doctor, in August 1984 you made your decision,235. As I previously mentioned, at this time Dr Archer also believed that the American FDA was recommending anti-HBc surrogate testing, a belief which he later discovered to be incorrect.
almost by yourself if I might suggest that to be the
case from listening to your evidence, to introduce
surrogate testing by way of core antibody to Sydney, is
that right?
A: "No, that is not correct. The decision was made
on the basis of what the American plasma fractionaters
were doing, particularly on that Cutter internal
leaflet which suggested that all plasma fractionaters
were going to do this, and the information I got from
the Irwin Memorial Blood Bank."
Q: "Well, you did not get any input from the
Australian Red Cross about that, did you?"
A: "No, or the American Red Cross."
Q: "And you had not made any enquiries of the
Australian Red Cross, or the American Red Cross, you
took the Cutter leaflet and decided to pull New South
Wales up by its own bootstraps as it were?"
A: "No, I think - what you said before - I considered
that Sydney was a high risk area as far as Australia
was concerned, and in that respect comparable to San
Francisco, they had taken these steps in their blood
bank, it seemed very reasonable that we do the same in
Sydney."
236. In their final address, counsel for the applicant were critical of what they called the "disorganized nature" of the Australian Red Cross' response to the AIDS problem. They say that, long before the Lokar case, Dr Archer should have assessed for himself the desirability of introducing anti-HBc surrogate testing. They suggest that the first and second respondents should have decided to adopt anti-HBc surrogate testing before August 1984 - indeed, as early as February 1984 - and that, had they done so, the test would have been in place before the making of the donation which infected their client.
237. Dr Archer recognised that he had an obligation to make his own decision
about surrogate testing. As he put the matter in one
answer: "My job is to
ensure the safety of my blood supply, yes". The evidence continued:
Q: "And it does not matter what two thousand blood238. Notwithstanding that, at a later point of his evidence he said "in this case I think you ... follow the Americans".
bankers are doing in the United States, if they are
making the wrong decision you have still got to make
your decision, is that right?"
A: "That is correct."
Q: "And they are not going to be responsible for you
in the final analysis, they are going to say, well,
tough luck, you are responsible for your blood bank, we
are responsible for ours?"
A: "Correct."
239. I think that there is force in counsels' criticisms of Dr Archer's failure directly to address the issue of surrogate testing before August 1984. But this criticism might equally be made of all those people in Australia who bore responsibility for the integrity of the Australian donated blood supply. Although it could never be contended that anti-HBc was a specific test for the agent now known as HIV, and in that sense it was an "unscientific" test, it was well known that a large proportion of the people in the major high risk group for AIDS were anti-HBc positive. Even more significantly, as long ago as February 1983, JAMA had reported that tests conducted by Dr Thomas Spira of CDC had shown that various categories of AIDS patients had anti-HBc positivity ranging from 90 to 100%. Upon the basis of those figures, a policy of discarding all blood which tested anti-HBc positive would have eliminated a huge proportion of such infected donations as might be received notwithstanding the request for high risk persons not to donate.
240. Of course, it would not be rational to make a decision to institute anti-HBc surrogate testing on the basis only of the JAMA report. The report gave no detail about the tests. In particular, it did not disclose the number of patients involved. But, especially having regard to the source of the study, it surely justified some inquiry about these tests and as to whether any other studies had been conducted. Indeed, it might have been possible to test known Australian AIDS and lymphadenopathy syndrome sufferers for anti-HBc. The number of such persons was small in 1983; but by January 1984 there were 33 reported patients, of whom, apparently, 30 were still alive. Given that any donation of HIV-infected blood was likely to result in the death of all recipients, and that there was more than one recipient of most donations, any measure holding out the prospect of reducing the supply of HIV-infected blood warranted serious examination. It is true that the calculation made by Dr Whisson at the Perth symposium supposed only one infected donation in Australia each 50 years. But its fundamental assumption was that there were only 800 AIDS affected people in the United States not presently in ill-health. If that assumption was ever valid, it could not rationally have survived the rapid increase in reported American cases in the latter half of 1983. Moreover, Dr Whisson's reasoning led to the result that there would be only three infected donations per year in the United States. Yet the August 1983 CDC figures included 19 known transfusees and 15 haemophiliacs with full AIDS. So anybody thinking about the matter should have realised that, if American experience was any guide, the problem in Australia was likely to be much more serious then Dr Whisson had assumed. And there remained his point that one donation used in blood concentrate could infect up to 2,000 people.
241. The benefit of anti-HBc testing would have had to be weighed against its costs. As will emerge, I am not satisfied that, if a rigorous cost-benefit analysis had been made, the preferable decision before August 1984 would have been to embark upon anti-HBc surrogate testing. But I find it remarkable that no such analysis was made; the more so because earlier events would have led an observer to predict that a serious examination of surrogate tests would be made. In their article of 11 June 1983, Dr Mutton and Professor Gust had referred to the possibility of screening, a matter taken up at the Perth symposium in the following month, when there was general support for an investigation of the merits of anti-HBc surrogate testing. Yet it seems that there never was such an investigation. No doubt the NHMRC Working Party on AIDS did much valuable work. But, despite Professor Penington's statement that opinions had to be made "on rather more nebulous criteria than scientific proof", the NHMRC does not appear to have taken up this subject at all. And, although there were Red Cross representatives at the Perth symposium, neither did the Australian Red Cross.
242. I think that Dr Archer's evidence gives clues to the reasons why anti-HBc testing was never considered by the Australian Red Cross. Firstly, Dr Archer said that he believed "the donors would honestly read the information and declare themselves". Although he was worried that the American experience could happen in Australia, he was hopeful that the steps which he had taken would be effective in preventing high risk donors giving blood. Upon several occasions, during the course of cross-examination, he said that, until the Lokar case, there was no "evidence" of a problem in Australia.
243. Dr Archer's attitude is understandable, up to a point. Scientists are accustomed to seek scientific evidence before changing established procedures. They tend to distrust intuitive judgments; perhaps without seeing that, as here, the decision not to change an established procedure is itself the product of an intuitive judgment that the problem will prove manageable. But Dr Archer is more than a scientist. He is, and was in 1983-1984, the administrator of the largest Australian BTS, whose main collecting area was the city with the greatest number of known AIDS sufferers in the country. Where the sufficiency of a precautionary measure is uncertain, the path of prudence is to consider what other steps (if any) might usefully be taken in order to minimise the risk which remains; and at what cost. Dr Archer recognised that there was no certainty that the measures already taken would suffice. He agreed that he would not have been "silly enough ... to say that the risk of somebody being infected through the blood supply would not happen". He agreed that Professor Penny had drawn attention to the similarities between Sydney and San Francisco and that he "had to assume that the same things that were happening in San Francisco might happen in Sydney". He believed that the problem in America was about "two years ahead" of that in New South Wales; and there was "plenty of evidence" by the beginning of 1984 of pollution of the donor blood supply.
244. Secondly, as I have already said, Dr Archer's attitude was that he should "follow the Americans". That attitude may have been shared by others. Once again, the attitude is understandable to a point. There is no doubt that, in 1983-1984, the AIDS problem was much greater in the United States than here. The United States was the centre of AIDS research and the location of much practical experience. It was eminently reasonable for people in Australia who were confronted with problems regarding AIDS to look to the United States for information and advice. They would have been remiss if they had failed to do so. But it is one thing to seek information and advice from another country. It is another thing simply to follow the course taken elsewhere without considering whether factors exist in that country which do not apply in Australia. If any inquiry had been made, Dr Archer would have learned that a major argument put against anti-HBc testing was the "magnet" argument, arising out of a perceived necessity to inform donors of the test. That argument had much less weight in Australia where, as Dr Archer accepted, there was no need to disclose the test. The other major disadvantage of the test was its effect on the blood supply. The loss of up to 5% of all donations was a disadvantage common to both countries. But the effect of such a loss, in terms of enabling hospitals and others to avert loss of life, was not necessarily the same in each country.
245. It seems to me that the information possessed by Dr Archer should have caused him to consider, earlier than August 1984, the desirability of introducing anti-HBc surrogate testing. However, in saying that, I wish to emphasise that my criticism is not directed solely towards Dr Archer. If there was complacency about the effect of AIDS on the blood supply, Dr Archer may have suffered less of it than others. It was he who made the courageous decision of May 1983 to request high risk donors not to donate. It was he who, without any enthusiasm from his colleagues, made the August 1984 decision to adopt anti-HBc testing. Any criticism of Dr Archer applies also to all the other people whose responsibility it was to see that the Australian donor blood supply was kept free from avoidable contamination.
246. But it is one thing to say that anti-HBc testing should have been investigated. It is another thing to say that the failure of the first and second respondents to introduce anti-HBc testing before August 1984 was a breach of their duties of care towards blood recipients. Before I could so conclude I would have to determine, upon the basis of the evidence before me, that "the magnitude of the risk and the degree of probability" of HIV blood-transfusion infection would outweigh "the expense, difficulty and inconvenience" of adopting an anti-HBc program; see Mason J in Shirt.
247. There is no question about the magnitude of the risk, for any particular
blood-recipient. As was appreciated at the time, any
person who received
blood infected by the agent now known as HIV, would be likely to contract an
ultimately-fatal disease. But there
was considerable difficulty in predicting
the chances of infection from a blood transfusion. Although the similarities
between Australia
and the United States - and especially between Sydney and
San Francisco - had been widely noted, Professor Gust said that, for some
time, there was a belief that the epidemiology of the disease would be
different in Australia. He said:
"In the early stages of the epidemic in Australia, theProfessor Gust elaborated:
first cases that we saw were largely imported cases.
People who had clearly acquired their infection
outside. There was a lot of debate at that time as to
whether or not that was the pattern that we would
continue to see. That is, that it would be largely an
exotic, an imported disease or whether or not we would
develop a local endemic focus of infection."
"You will recall that the original cases that were248. There is some ambiguity about the time referred to in the last answer. Professor Gust may have used the pronoun "we" as a reference to the world scientific community, in which case the period to which he referred presumably came to an end about the time of the Gallo announcement in April 1984. He may have meant to refer to Australian researchers, in which case the relevant date was some time later; perhaps as late as August 1984.
described in Australia were people who had a clear
history of contact with the United States and there
were many people who at that time believed that that
was the pattern that we would continue to see."
Q: "But they were rapidly disabused of that notion,
were they not?"
A: "It took quite some time for many of them to be
disabused of that."
Q: "A matter of months?"
A: "No. I think longer than that, not until we had
an antibody test and were able to do some
sero-epidemiology were they disabused of that."
249. As I understand this evidence, there was, until that time whenever it was, a belief amongst some qualified people that Australian AIDS cases would be confined to people who had acquired the infection abroad. In our present knowledge, this belief appears quaint, even absurd; but Professor Gust was speaking of a period when little was known about the disease. He is undoubtedly including a period when it was not even clear that the responsible agent was a virus. There was no reported Australian blood transfusion AIDS case until Mr Lokar's diagnosis in July 1984. In contrast to the United States, where haemophiliac AIDS cases emerged at the very beginning of the epidemic, there was no reported Australian haemophiliac AIDS case until the end of 1984. I do not think that these differences sufficiently explain the failure of the Australian authorities even to investigate the possibility of surrogate testing. But, in determining what decision about anti-HBc testing ought to have been made, if the issue had been discussed, it is relevant to remember that there was then a mood of optimism about the extent of the problem in this country. As late as December 1984, a publication of the AIDS Task Force quoted the risk of contracting AIDS through blood transfusion at about one in 100,000. Dr Gatenby described this as "a widely used figure". He added that "only in retrospect we realised that it was incorrect". It is now obvious that it was very incorrect, but my judgment on the question what would have been the responsible decision in early 1984 has to be made by reference to the facts as understood at that time. Even so, the New South Wales BTS received nearly 300,000 donations in 1983-1984. So a rate of one in 100,000 implies two or three HIV transfusion-infections each year; leaving out of account the position of the haemophiliacs put at risk if any one of 2,000 concentrate contributors is infected. In any given year, more than one person was likely to become infected with a fatal disease through the blood donation system. Even having regard to the limited, and erroneous, knowledge of the day, and although anti-HBc could only reduce, not eliminate, the risk, there was a case for its adoption.
250. But the case for adoption of the test had to be set against its disadvantages. The "magnet" factor is extremely difficult to assess; so much would depend upon the way in which testing was handled. The factor cannot be excluded from consideration but I would not give it much weight. There was no legal obligation on Australian blood banks to notify donors that their blood would be subjected to an anti-HBc test. Donated blood was already subjected to a number of tests of which donors were not informed, at least as to the details. To introduce anti-HBc testing would be merely to add one more test. When it did introduce anti-HBc testing, the New South Wales BTS did not tell its donors of that fact. If, nevertheless, the fact became known, it apparently did not cause any influx of undesirable donors. There is no suggestion in the evidence of an actual "magnet" effect in Australia.
251. Anti-HBc testing would, of course, have involved an additional financial cost. But the amount was fairly small. As Professor Holland remarked, the financial cost of surrogate testing was not really an issue in the debate. The real cost would have been the wastage of useable blood.
252. There is not a lot of evidence about the ramifications for the blood supply of anti-HBc testing. According to figures produced by Dr Archer, in the period from 1 July 1983 to 30 June 1984, the twelve months which followed the first Australian AIDS case and the request that homosexual men and intravenous drug users not donate blood, Sydney donations fell by 4,776 (2.45%), as compared with the previous year. Part of this loss was, no doubt, caused by high risk people heeding the request. The remainder was probably occasioned by the unfounded fear of some donors that, in giving blood, they were putting themselves at risk of contracting AIDS. No doubt the loss would have been greater but for a campaign by the New South Wales BTS to recruit new donors, with an emphasis on women. New South Wales country donations rose by 354 units in 1983-1984. So the overall loss was 4,422 units (1.47%).
253. Expressed as a percentage, the 1983-1984 loss is not large. But that loss must be assessed in the context of Dr Archer's unchallenged evidence that, ever since the establishment of the New South Wales BTS, "there has been ... a constantly increasing demand for blood and blood components as a result of the steady rise in the population of New South Wales combined with the greater use of blood and blood components in complicated surgery". Dr Archer explained that the problem was not primarily one of coping with major emergencies, such as the Granville rail disaster. He said that, at such times, large numbers of people come forward to give blood. The problem was to keep up the supply on a day-to-day basis during ordinary times. In that regard he referred to a meeting of the National Blood Transfusion Technical Committee of 22 September 1983 which had set a factor VIII target for each State BTS equal to two units per head of population. This target required the New South Wales BTS to produce over ten million units of factor VIII per year. Dr Archer said that the target was not attained, or ever within reach, in 1984.
254. Dr Archer believed that about 5% of all blood donated in New South Wales would prove positive to an anti-HBc test. The reasonableness of this belief is not challenged. It compares with the already mentioned finding by Burrell and others, reported in November 1983, that 4.85% of 453 routine South Australian blood donors tested positive for hepatitis B surface antibodies. So, a pre-August 1984 decision to introduce anti-HBc tests, and to discard positive donations, would have meant the likely loss of 5% of all donations, on top of the 1.47% already lost. How serious would that situation have been?
255. As Dr Baird commented in his evidence, blood is a "precious resource". Any inadequacy in the supply is a matter of major concern. If blood is not available for transfusion, operations will be postponed. Some postponements may cause mere inconvenience; others may lead to more serious consequences, even death. And of course, hospitals must have enough blood to cope with emergencies, especially accident cases; otherwise deaths will result. But how critical was the last 5% of the supply? In practice, would the loss of a further 5% of blood have caused any problem; and, if so, to what degree? Surprisingly, the evidence does not provide answers to these questions.
256. I have been troubled as to the attitude I should take regarding the lack of evidence about the practical effect of anti-HBc testing on the adequacy of the blood supply. On the one hand, it might have been expected that, if there was a basis for real concern, detailed evidence to that effect would have been adduced by one or more of the respondents. But, on the other hand, there was no challenge to the general statements made by Dr Archer. It was never suggested to him that, whatever the theoretical inadequacy of the available number of units, there was no real practical problem. So, although I would have preferred to rest my judgment on more precise information than is available, I think that I should interpret Dr Archer's general statements as an indication of his perception that any reduction in the available blood supply would have had serious practical effects.
257. Upon that basis, the problem for a person in the position of Dr Archer in, say, February 1984 would be to weigh the concern that contaminated blood will be received by the BTS, despite its appeals to high risk persons not to give blood, against the supply difficulties which would follow the introduction of anti-HBc testing. The Court could only uphold the applicant's claim that the first and second respondents were negligent in failing to introduce surrogate testing at that time if it were satisfied that a prudent person in the position of those respondents would have determined that the concern for contamination outweighed the difficulties which would ensue from reducing the blood supply.
258. When the matter is stated in this way, it seems to me to be apparent that the claim cannot succeed. Although there was ample reason for concern, before the Lokar case there was not yet any known Australian transfusion-related AIDS case. It was not yet certain that there would be a contamination problem. But it was clear that any serious practical effects upon the blood supply might cost lives. Upon the material before the Court, and in the absence of evidence which establishes that a 5% reduction in the blood supply would not have endangered any lives, I cannot be affirmatively satisfied that the first and second respondents breached their duty towards people in the position of the present applicant in failing to decide, in February 1984 or at any later time before August 1984, to adopt anti-HBc surrogate testing.
259. The conclusion which I have just expressed is not in conflict with the opinion of any witness in this case, even any witness called by the applicant. Indeed, to the extent that the witnesses dealt with the time when surrogate testing should have been introduced, their evidence supports the proposition that it was not unreasonable for the first and second respondents to wait until after a transfusion AIDS case had appeared.
260. Counsel for the applicant called four witnesses on surrogate testing. The first of them, Dr Ziegler, gave a deal of helpful evidence, especially with regard to the published literature and the possible surrogate tests. But he was not asked to specify a date by which, in his opinion, it would have been reasonable to adopt surrogate testing. He did say that, in 1981-1982, he himself "erroneously thought that it was unlikely that this problem was going to be a problem in Australia". At the other extreme he criticised an article by Professor Merlin Sayers of the Seattle Blood Bank which, in Dr Ziegler's description, contended that an anti-HBc surrogate test "was unsuitable in the light of the impact that such test might have on the blood supply". Dr Ziegler said of Dr Sayers' article: "That is a value judgment that he made at that time. I think most of us now can see that he was wrong". But Dr Sayers' article followed the Simons and Bankhurst article published in September-October 1984. So Dr Ziegler was not saying anything about the position before August 1984. Dr Ziegler's evidence does not disclose at what time he moved from his 1981-82 belief, when he clearly thought surrogate testing to be inappropriate, to the position expressed in his criticism of Dr Sayers.
261. The second witness to deal with surrogate testing was Dr Gatenby. Dr
Gatenby's primary function was to give evidence about
his treatment of the
applicant. However, he was asked some questions about surrogate testing in the
course of which it emerged that
Dr Gatenby did not give "any serious thought"
to anti-HBc surrogate testing until August 1984, when he learned of Dr
Archer's decision
at a meeting they attended. He said that, at that time, Dr
Archer explained the reason for the test. Dr Gatenby accepted this reason.
He said in evidence: "I believe that there was a logical, scientifically
based reason for the introduction of that test" but "it
was not something
that I had thought about of my own accord". Dr Archer's contention was "that
it might be helpful in the overall
efforts to exclude the dangers of HIV
infection in the blood supply". The failure of Dr Gatenby to form any earlier
opinion in favour
of anti-HBc surrogate testing is particularly significant,
since he was involved in the treatment of AIDS cases from an early date.
Also, he represented The Royal Prince Alfred Hospital on the Medical
Scientific Committee on AIDS established by the New South Wales
Health
Department. By May 1984 he had published at least two papers relating to
AIDS.
262. Dr John Dwyer, Professor of Medicine and Head of the School of Medicine
at the University of New South Wales, was also called
on behalf of the
applicant. Professor Dwyer is an immunologist. Between the years 1978 and
1988 he was Chief of the Clinical Immunology
Section of the Departments of
Medicine and Paediatrics at the Yale University School of Medicine.
Simultaneously, he held positions
within the university, first as an Associate
Professor and subsequently as Professor of Medicine and Professor of
Paediatrics. Professor
Dwyer returned to Australia in 1985 to take up his
present position. He has since served on a number of committees dealing with
AIDS.
263. There is no doubt that Professor Dwyer is well-informed about the nature and dimensions of the current AIDS problem in Australia. However, in addressing the question whether surrogate testing ought to have been introduced in Australia before August 1984 - and, if so, when - he suffers the significant disadvantage that he was then living outside Australia. Living in America, he followed the American debate about surrogate testing. In his affidavit he said that, at the time, it was his belief "that there was potential for this test to be useful" as a"reductionist approach to this problem". In cross-examination Professor Dwyer was challenged on this answer, reference being made to some evidence which he had recently given in Melbourne, during the course of which he said that none of the suggested surrogate markers was reliable and that he was concerned that the use of these might lead to some false sense of security. Professor Dwyer explained that, in the Melbourne case, he was speaking about a time earlier than mid-1984. During the course of this explanation, Professor Dwyer made it clear that his support for surrogate testing in this country was related to the circumstances, as he understood them, that by July 1984 there had been several blood transfusion HIV cases, the first in about January 1984, and that the Australian Red Cross wished to take every means possible to minimise the spread of the disease. Of course, this understanding of the facts was erroneous; July 1984 being the date of the very first Australian case. However, Professor Dwyer's indication of his reasoning shows that his opinion provides no support for the proposition that surrogate testing should have been introduced before the first reported transfusion case.
264. The remaining applicant's witness to deal with surrogate testing was, of
course, Professor Engleman. Professor Engleman claimed
no knowledge of the
Australian scene in 1983-1984 and he was not asked to comment upon the date
when it would have been reasonable
for Australian blood bankers to introduce
surrogate testing. As I have already recounted, Professor Engleman adopted
T4:T8 surrogate
testing at Stanford in the first half of 1983 and thereafter
urged other blood banks to use anti-HBc. But he did not suggest that
a blood
bank would be remiss in failing immediately to adopt his precept. During the
course of cross-examination, he was asked whether
he thought that it was a
violation of reasonable and prudent medical conduct for blood banks in the
United States to fail after January
1984 to introduce surrogate testing. He
responded that this depended on location "but certainly in high risk areas I
would have
felt it was a violation". His evidence continued:
Q: "Not universally?"265. Asked about the particular information which had become available, Professor Engleman referred to the NEJM article of January 1984 dealing with AIDS and haemophilia. He commented that, by the beginning of 1984, CDC had recognised approximately 50 cases of transfusion transmitted AIDS. His evidence went on:
A: "No, and I am sorry for being fuzzy on this point
but I feel fuzzy on it. I feel that mid 84 was really
the cut-off for the entire country for surrogate testing."
Q: "For high risk parts of the country?"
A: "No, for all parts of the country by mid 84. For
high risk areas certainly by the beginning of 84."
Q: "So in the four or five months between February 84
and June of 84 do you say that there was a change in
medical information such that you would regard it as
unreasonable and imprudent of any blood bank not to
have a surrogate test, is that right?"
A: "Yes, although it is not merely the change of
information. It is a reflection of how much time has
passed during which information was available and
increasing amounts of information became available."
Q: "What I am really asking you is this: what is it266. It is not easy to fit New South Wales, and in particular Sydney, into Professor Engleman's range of risk areas. In 1983-1984 Sydney had a substantial homosexual and intravenous drug-user population. No doubt Sydney had, and has, characteristics similar to those of San Francisco. But in 1983-1984 Sydney had nothing like the number of reported AIDS cases which had occurred in San Francisco. If a list of reported cases per city had been compiled, it seems certain that Sydney would have ranked below a large number of American cities. I think that it would not be reasonable to treat Sydney as falling within Professor Engleman's "high risk" category. Moreover, as the above extracts from his evidence make clear, Professor Engleman's reasoning was greatly influenced by his knowledge of the CDC figures on reported transfusion and haemophilia-related AIDS cases. There was no such reported case in Australia until July 1984. Accordingly, I do not think that Professor Engleman's evidence supports the proposition that the failure of the New South Wales BTS to introduce surrogate testing before the Lokar case was a violation of prudent medical practice.
that happened in 1984, or December 83 or earlier, that
you say required them, in effect, to see the light?"
A: "In my view it was a combination of factors.
There was an acknowledgement of the increasing
frequency, geometrically increasing frequency of
transfusion transmitted AIDS cases that were
paralleling the growth in the epidemic as a whole.
There was knowledge of an ever lengthening period of
latency between the time of exposure and the time of
disease manifestations. There was knowledge, at least
amongst blood bankers, of surrogate testing as an issue
and the availability of the Hepatitis B core antibody
test for example. And there was knowledge that the
disease AIDS was a terminal illness from which there
was no defined agent, even thought everyone felt - I
should say almost everyone felt that there was an
infectious agent, a new infectious agent. It had not
been identified, there was no treatment. So I think
those are the issues on which I argue that there was a
transition, or should have been."
Q: "When do you say that those different factors had
matured sufficiently to expect your colleagues to have
responded to them?"
A: "Approximately the middle of 1984."
267. The claim that the first and second respondents ought to have decided to adopt anti-HBc surrogate testing earlier than August 1984 suffers from the handicap that it is opposed to the practice which predominated in the United States, the country with the greatest experience of AIDS cases. That handicap is formidable; but, as I have indicated, I would not be prepared to regard it as decisive. If I felt that, upon the evidence available to the Court, the only prudent course for persons in the position of the first and second respondents - in the light of their then knowledge - was to introduce anti-HBc, I would uphold the claim of breach of duty, whatever the American practice. But such a course would involve the Court in making the judgment, without any supporting expert evidence, that a prudent blood banker should have determined that it was better to accept the loss of 5% of the blood supply rather than the mere risk of HIV contamination of the blood supply. Particularly in the absence of evidence as to the consequences of losing 5% of the blood supply, I cannot make that judgment.
268. So far as the third respondent is concerned, it seems to me that it is
an even stronger position than the first and second respondents.
The Royal
Prince Alfred Hospital had no source of blood other than the New South Wales
BTS. The New South Wales BTS was an organisation
of high reputation with
which the hospital had dealt for many years. It had a specialist interest in
the maintenance of blood quality.
I think that the hospital was entitled to
rely upon the judgment of the BTS as to the tests appropriate to be applied to
the blood
which it supplied.
Negligence: delay in implementing the surrogate testing decision
In the alternative, counsel for the applicant argue that, even if it was not imprudent for the respondents to fail to make an earlier decision about surrogate testing, they were unduly tardy about implementing their decision. They point out that the full testing program, for Sydney donations, was in place by 25 October 1984, only three weeks after the taking of D9's donation. Counsel say that, with greater speed of implementation, that donation would have been tested, found anti-HBc positive and discarded. The last step in this argument is challenged by counsel for the respondents. They point out that the evidence does not establish, with any degree of certainty, whether or not D9 would have tested anti- HBc positive on 3 October 1984.
I accept that there is no certainty as to whether D9 was anti-HBc positive on 3 October 1984. He was anti-HBc positive at the time of his next donation, on 21 March 1985. But he could have become HBV infected after 3 October 1984 or, being infected on that day, have not provided a positive result, either to the hepatitis B surface antigen test which was then made, in accordance with the usual routine, or to any anti- HBc test which might have been put into place.
However, it is now known that the donation given by D9 on 21 September 1983 was HIV positive. As one of the medical witnesses observed, that positivity provides a clue to his lifestyle at that time; the probability being that he was then either a homosexual, an intravenous drug user or a sexual partner of an intravenous drug user. Hepatitis B is common amongst all these groups of people. It is common ground that hepatitis B core antibodies remain within the blood stream for many years after infection. So the hepatitis B antibodies detected in March 1985 could be the result of an infection in 1983 or earlier. Purely upon the basis of opportunities for infection, it is more likely than not that D9 was anti-HBc positive on 3 October 1984.
However, I am unable to accept the earlier propositions in the applicant's alternative argument. I have already detailed the steps taken to implement Dr Archer's decision to introduce anti-HBc testing. I do not think that either he or the NSW Division may reasonably be criticised for delay. Implementation of the decision involved the selection and importation of new equipment and the recruitment and training of three additional technicians. The contemporaneous documents show that a sense of urgency pervaded the procurement of the equipment and there is no reason to think that it was otherwise in relation to the new staff. The period which elapsed from the date of Dr Archer's return from Munich on 31 July 1984, when he set about making his inquiries as to current United States practice, until there was full testing of all Clarence Street donations was about 12 weeks. Bearing in mind all that had to be done, I do not think that this period exceeded what was reasonable.
Finally, counsel for the applicant point out that limited testing was taking place during the period of nine days which elapsed between the taking of D9's donation and the supply of part of that donation, in the form of fresh frozen plasma, to the applicant. The plasma was frozen shortly after the blood was taken from D9. Nonetheless, according to the evidence, it would have been possible to test its anti-HBc positivity, after first thawing a small portion of it. Counsel say that this should have been done. When testing commenced, the BTS should have started with the stock in store. Had it done so, counsel argue, D9's donation would have been tested and discarded.
274. I do not think that this is a reasonable criticism. When regular
anti-HBc testing began on 5 October the BTS technical officers
at Clarence
Street could handle only about 200 tests per day. They were inexperienced.
The third new officer had yet to commence.
The Clarence Street blood bank was
taking about 400 donations each day. So at that stage the testers were not
even coping with
the new donations. It took about three weeks before they were
able to do so. In the meantime, unless substantial quantities of blood
were
to be held unused, some untested blood would have to be supplied to hospitals.
If the officers had tested the blood in store,
a greater proportion of new
blood would have been left untested. This would have made no sense; especially
in the light of Dr Archer's
evidence that the testing of already frozen plasma
is a much more complicated and time-consuming process than the testing of a
new
donation in conjunction with its other routine tests. The desirable
object was to test as many donations as possible each day, recognising
that
some donations must, for a time, go untested. Moreover, it was important to
guard against errors. Dr Archer said that to take
samples out of order "would
have caused utmost confusion. If you do not have samples in serial order, you
get hopeless confusion
for identification". This evidence was given with some
feeling. It makes sense and I accept it unhesitatingly.
Conclusion
275. My findings against the applicant, in relation to each of the bases of liability argued on his behalf, require me to dismiss his Application. There being no legal reason to the contrary, the applicant must be ordered to pay the respondents' costs. The question whether that order is enforced depends on matters outside my control.
276. In one sense, it is a cause of satisfaction to reach the conclusion that institutions with the respondents' reputations and history of service to the community have not been proved derelict in their duty towards the applicant. In another sense, the result gives me no satisfaction. During their addresses, counsel for each of the respondents expressed the concern of their client about the future of the applicant. I am sure that, in so doing, they spoke also for themselves and their instructing solicitors. Nobody could have sat through this case without developing a deep sympathy for the applicant and his wife and an admiration for the stoical manner in which they have borne their affliction. No amount of money could compensate them for the injury they have suffered, but a monetary award would have made it easier for them to cope with the problems that lie ahead. However, I must decide the case according to law, and the evidence establishes no basis upon which the respondents may be required to pay damages.
277. Nonetheless, I cannot forebear the comment that this applicant, and any other people who are in a like position, have a strong moral claim upon the community for some financial assistance in coping with their illnesses. Upon the probabilities, the earlier introduction of anti-HBc surrogate testing would have led to the discarding of the donation which caused the applicant to become HIV infected. The only substantial argument against the earlier introduction of anti-HBc testing is that it would have led to the wasting of something like 5% of all donations, most of which were in fact suitable for use. Although surrogate testing was not considered before August 1984, I must dismiss the claim because I am not satisfied that, had it been considered, a reasonable person in the position of the respondents would have decided to introduce anti-HBc testing at an earlier date. This is not because I doubt the foreseeability of HIV infection from a blood transfusion or that anti-HBc surrogate testing had a useful role to play in reducing the risk of such infection. The reason for my conclusion is the possibly serious effect on the blood supply. In the absence of that possibility, I would certainly hold the applicant entitled to recover damages.
278. But this is where the moral claim arises: to take into account the effect upon the blood supply is to say that a person in the position of the first and second respondents was entitled to give priority to the interests of all blood users - and everyone in the community is a potential blood user - over the interests of the relatively small number of individuals who might receive infected blood. To so say is to make the present applicant bear the burden of protecting the wider public interest. In some other areas of activity, in which individuals are sacrificed for the wider public good, the community recognises an obligation to provide some recompense; for example, under war veterans' legislation. Perhaps the same attitude ought to be taken towards those people who contracted AIDS as a result of a blood transfusion or haemophilia treatment. I do not have in mind any extravagant award of money, but something to make up for the income which they have lost or will lose - after taking into account any social service entitlements - and their out-of-pocket expenses. I am aware that a fund has already been established but its adequacy is a matter of controversy. I say nothing about that matter. I merely express the hope that the extent of the benefits available to people in the position of the applicant will be reviewed in the light of these reasons. Apart from anything else, agreement upon a sufficient level of assistance might eliminate the need to determine most of the cases which remain pending in this Court and in other courts; whose litigation will divert into legal costs many millions of dollars which might better be spent on the victims of the problem.
279. The formal order of the Court will be that the Application be dismissed with costs.
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