Leslie v P Cusick & A Cusick t/as Rosemont Endoscopy Centre [2003] NSWIRComm 39 (21 February 2003)

Last Updated: 7 March 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Leslie v P Cusick & A Cusick t/as Rosemont Endoscopy Centre [2003] NSWIRComm 39

FILE NUMBER(S): IRC 4734

HEARING DATE(S): 11/11/2002

DECISION DATE: 21/02/2003

PARTIES:

APPLICANT

Simon Leslie

RESPONDENT

Peter Cusick & Anita Cusick T/as Rosemont Endoscopy Centre

JUDGMENT OF: Boland J

LEGAL REPRESENTATIVES

APPLICANT

Mr P Newall of counsel

Solicitor: Mr Corbett

Haydon Fowler Corbett Jessop

RESPONDENT

Mr J N West QC with Mr D Chin of counsel

Solicitor: Mr W T Ellicott

Peedoms Lawyers

CASES CITED: AIS Pty Ltd v Najdovska [1988] 12 NSWLR 587

Barham v Stevenson [1975] 1 NSWLR 31

Cosgrove v International Opal Pty Ltd [1977] AR (NSW) 751

Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98

Hall v Alison Clint Floral Delivery Pty Ltd [1971] AR (NSW) 56

Legal & General Assurance Society Limited v Stock [1993] 49 IR 464

Maxwell v Murphy (1956-57) 96 CLR 261

Mestrom and Alison Clint Floral Delivery Pty Ltd Re(No 2) [1971] AR (NSW) 216

Production Spray Painting & Panelbeating v Newnham (1991) 27 NSWLR 644

Smith v Craig Mostyn & Co Pty Ltd [1984] 2 NSWLR 393; 8 IR 344

Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 99 IR 69

Victrawl Pty Ltd v Telstra Corporation Ltd (1995) 131 ALR 465

Westfield v Adams (2001) 114 IR 241

LEGISLATION CITED: Industrial Relations Act 1996

Industrial Relations Amendment (Unfair Contracts) Act 2002

Interpretation Act 1987

JUDGMENT:

- 2 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

CORAM: Boland J

Date: 21 February, 2003

Matter No IRC 4734 of 2000

SIMON LESLIE v PETER PATRICK CUSICK AND ANITA CECELIA CUSICK t/as ROSEMONT ENDOSCOPY CENTRE

Application under s 106 of the Industrial Relations Commission 1996

JUDGMENT

[2003] NSWIRComm 39

1 Simon Leslie, the applicant in these proceedings, is a medical practitioner. From 1993 to 1999 he performed the professional medical work of a sedationist at the Rosemont Endoscopy Centre in West Wollongong, New South Wales. The Centre is owned and operated by the respondents, Dr Peter Cusick and his wife Anita.

2 On or about 18 September 1999 Dr Leslie informed Dr Cusick that he was thinking of volunteering to go to East Timor for three months to perform medical services in response to the humanitarian crisis that had developed in that country at the time. Dr Cusick expressed his disapproval of the idea because of the disruption and inconvenience it would cause to him and to the medical practice.

3 On 21 September 1999 Dr Leslie informed Dr Cusick that he was going to East Timor, leaving as early as the next evening. Dr Cusick asked Dr Leslie to stay until at least the end of the week, which he did. Dr Cusick had indicated to Dr Leslie that the arrangement involving him working at the Centre as a sedationist would be threatened if he went to East Timor. Dr Leslie departed for East Timor on 24 September 1999.

4 Dr Leslie returned to Australia between 23 and 26 October 1999. He attended the Centre on 24 or 25 October. Dr Cusick was alleged to have informed the applicant that there was no longer a position available to him at the Centre. Dr Leslie returned to East Timor. In December, after he returned to Australia, Dr Leslie tried to phone Dr Cusick but was told Dr Cusick was not available to speak with him. Dr Leslie never returned to work at the Centre.

5 In a summons for relief under s 106 of the Industrial Relations Act 1996 filed on 25 September 2000, Dr Leslie sought various orders in relation to the alleged contract with the respondents including orders to the effect that:

· The contract was unfair.

· The contract was void ab initio in so far as it permitted the respondent to terminate the contract without any, or any adequate, notice.

· The contract could be terminated by the respondent only by the provision of 12 months' notice.

· In circumstances where the respondent terminates the contract by the provision of less than 12 months' notice, a payment in lieu of notice representing the difference between 12 months' notice and the period of notice actually given be made upon termination of the contract.

· In circumstances where the respondent terminates the contract unfairly or breaches the terms of the contract, the respondent pay to the applicant a further sum equivalent to 12 months' pay additional to any payment in respect of notice.

The evidence

6 Dr Cusick commenced his professional career in 1980. In 1991 he moved to Wollongong to commence practice on his own account as a specialist consultant gastroenterologist. At the time, Dr Cusick approached the applicant and asked him:

Would you be interested in accepting referrals from me to sedate patients on whom I perform endoscopic procedures at my consulting rooms in Wollongong? I can't guarantee this is going to work. We'll both bill patients separately. I plan to bulk bill patients initially. Would you be happy to do the same?

7 The applicant agreed and initially commenced to do the sedationist work on Tuesdays and Fridays each week and then later on Wednesdays as well.

8 In 1993 Dr Cusick decided to open the Rosemont Endoscopy Centre ("REC") as a licensed day endoscopy facility. This occurred on 13 May 1993. Dr Cusick and his wife Anita are the directors and shareholders of Felpet Pty Limited, which is the registered proprietor of the business name "Rosemont Endoscopy Centre". Dr Cusick took the position of "Medical Director" at REC. Mrs Cusick is the Financial Director and responsible for the day-to-day administrative work of REC and Felpet. REC employs a Nurse Unit Manager (Sister Karen Dawson) and a Practice Manager (Ms Linda Dorahy).

9 In seeking accreditation of the REC from the Australian Council of Health Care Standards in 1995, REC established a Quality of Care Committee ("QCC") and Medical Advisory Committee ("MAC").

10 Dr Leslie continued to work as a sedationist with Dr Cusick in the REC. In 1995 Dr Leslie was formally appointed by the MAC as a Visiting Medical Officer ("VMO"). The process of appointment of VMOs at REC is contingent upon an application being received from a potential VMO. This application is then assessed by the medical director and then by the QCC and MAC. Dr Leslie's original application for appointment as a VMO was accepted on the recommendation of the MAC which at the time included Dr Cusick, Dr Mackay, an external medical advisor, and other medical practitioners. VMO appointments are renewed every three years. Every year VMOs are required to provide proof of their current medical registration with the New South Wales Medical Board and proof of current professional indemnity insurance. Dr Cusick said in his evidence that:

VMOs at the REC, including the applicant, were required to submit a renewal application to the MAC for its approval every three years. In practice, applications for VMO renewals were approved by the MAC as a matter of course, absent any extraordinary circumstances.

11 Dr Leslie's VMO status was due for renewal on 5 February 2002. It was the custom at REC to remind VMOs of the need to renew their accreditation as the renewal date approached. Dr Leslie was not reminded of the need for renewal. Dr Leslie's accreditation was not renewed.

12 Dr Cusick said in his evidence that because of Dr Leslie's unavailability on Mondays he began referring patients to other sedationists who visited REC. In 1995 Dr David Brewster, who had been the regular Monday sedationist, was appointed a VMO. In 1996 Dr Stephen Williams and Dr Warwick Adams commenced working as VMO procedurists at REC.

13 Appointment as a VMO at the REC provides the VMO with the right to use the facilities of the REC to carry out his or her professional practice. The VMO contract covering the applicant provided for the payment of a fee in respect of the use of the premises and facilities. It also provided for termination of the accreditation of the VMO by the Governing Body of REC without the necessity of providing any reason and:

[I]n any such event the right of the Practitioner to use the Rosemont Endoscopy Centre shall immediately cease upon notification to the Accredited Practitioner subject to his continued use of the Rosemont Endoscopy Centre to day procedure prior to such time up to a maximum of 3 months or such longer period as the Governing Body may agree to and the Accredited Practitioner being otherwise lawfully entitled to do so.

14 In his evidence Dr Leslie stated that after he started work at the REC he was provided with a number of documents that he understood formed part of the contract under which he worked at the Centre including:

· Rosemont Endoscopy Centre Philosophy Policies and Hospital By Laws.

· Rosemont Endoscopy Centre Terms of Appointment Medical Practitioners. This document represented the applicant's VMO appointment terms.

· Rosemont Endoscopy Centre Policy and Procedure Anaesthetist's Information Package.

· Rosemont Endoscopy Centre Job Specification and Description. This document outlined the qualifications and major functions required of an anaesthetist. The major functions referred to: prior to procedure; during procedure; after the procedure; safety; quality control. It was said in the document that remuneration would be by arrangement with the medical director and the anaesthetist would be responsible to the medical director.

15 Dr Leslie said that in addition to carrying out the work of a sedationist at the Centre and as the Director of Anaesthetic Services for the Centre, he wrote documents for accreditation of the Centre and for training staff in medical emergencies. He also said he assisted Dr Cusick in designing and fitting out the layout of the Centre's operating theatre.

16 The sedationist work performed by Dr Leslie involved him presenting at the Centre on particular pre-arranged days where he would carry out sedation according to the procedurist's list which was put together by REC. Dr Leslie did not select the patients he treated but simply sedated those whom the procedurist had elected to treat on that day. Dr Leslie carried out three lists per week for Dr Cusick and one list per fortnight for Dr Williams. Dr Leslie used the REC to bill the patients he treated. For billing, debt collection and use of telephone and facsimile services, Dr Leslie was charged an administrative fee of 15 per cent of gross fees earned.

17 Prior to the East Timor incident Dr Cusick said in his evidence that his confidence in the applicant's reliability to attend to Dr Cusick's patients began to be eroded by a number of incidents. These included:

· In June 1999 Dr Leslie taking telephone calls regarding personal financial matters during a procedure. The applicant was indignant and resentful on being questioned about the appropriateness of taking such calls.

· The applicant bringing personal reading material into the procedure room which he would occasionally read during longer procedures.

· The applicant's frequent lateness which caused Dr Cusick to have to perform some of the applicant's pre-procedure tasks. The applicant was indignant and resentful about the questioning of his punctuality.

· The applicant bringing a large box containing birds to the Centre which Dr Cusick regarded as "totally inappropriate and unprofessional".

· The applicant being absent on leave for 7 weeks between 18 June 1997 and 9 November 1997. Dr Cusick regarded this length of absence as being inconsistent with the practice of other VMOs at REC. As a consequence of these absences it was agreed between Dr Cusick and the applicant that in future the applicant would give four weeks' notice of taking leave.

18 In relation to East Timor, it would appear from the evidence that Dr Leslie first raised the prospect of going there in a phone call to Dr Cusick on Saturday 18 September 1999. On Dr Leslie's account of the conversation, on being informed of Dr Leslie's idea, Dr Cusick said "I don't want you to go. It would cause me great inconvenience and I can't manage with David (Brewster)." Dr Leslie said he replied by saying "I will organise other doctors to do my work while I am gone" and that Dr Cusick replied "I will agree with that."

19 On Dr Cusick's version of the conversation he said

I am not happy about it Simon. We have a large workload and I am concerned that if you leave you will cause significant disruption to the procedure lists and to patients. The patients have already been booked for 2-3 weeks in advance on lists that you are supposed to attend.

And further that

Simon this is totally unacceptable. If you decide to go you will cause enormous disruption to Rosemont and you will place a significant strain and burden on me and my practice. This is not fair. If you go off like this you cannot expect to receive referrals from me when you return.

20 Dr Leslie said that Dr Cusick did not say "If you go off like this you cannot expect to receive referrals from me when you return."

21 On Tuesday 21 September a further conversation occurred between the applicant and Dr Cusick. According to Dr Cusick Dr Leslie informed him he had decided to go to East Timor and that he might have to go as early as the next evening. Dr Cusick said he asked Dr Leslie to stay until at least the end of the week and Dr Leslie agreed to that. Dr Cusick then said:

Simon, this departure of yours is totally unacceptable to me. Your action threatens my practice and will put me under great stress. I can't physically stop you from doing this but I certainly won't be referring my patients to you if and when you return.

22 Dr Leslie is said to have replied:

I am sorry but you just have to realise this is something I feel I have to do. I hope you change your mind when I get back. I have arranged to introduce three medical practitioners to you and the REC to help cover my absence.

23 According to Dr Leslie's version of the conversation Dr Cusick did not say "I can't physically stop you from doing this but I certainly won't be referring my patients to you if and when you return." Dr Leslie said he had never heard Dr Cusick use the expression "refer patients" in the context of Dr Leslie's arrangements with him.

24 When asked in cross examination what he meant when he said in his affidavit "I hope you change your mind when I get back", Dr Leslie said that:

I was referring to a suggestion that Peter (Cusick) made to me that he may have to consider reviewing my work on my return and he said because of what he described as the excessive absences from my work that he may have to get another anaesthetist in and reduce my work and he said he would consider that on my return.

25 Dr Leslie said that he felt that after he left Dr Cusick "would understand the situation" and there would be no change to his arrangements with Dr Cusick.

26 Dr Leslie departed for East Timor on 24 September 1999. Before doing so he had arranged replacement sedationists but Dr Cusick found that only one proved suitable to him and REC in terms of availability and performance. Dr Cusick said the applicant's departure caused significant disruption and inconvenience to his practice and to the REC. He said he was placed under considerable strain as a result of the applicant withdrawing his services at short notice. It could not be said on the evidence, however, that patients' care was compromised or that REC suffered any loss of income.

27 It may be seen that there is a significant difference in the evidence of the applicant and Dr Cusick about whether or not Dr Cusick would be referring any more patients to the applicant. The applicant conceded that there was the prospect of a change in the arrangement on his return but he did not concede that he was told by Dr Cusick there would be no more patients referred to him by Dr Cusick. In this respect the evidence suggests at the very least that the professional arrangement between Dr Cusick and Dr Leslie was under threat and that Dr Leslie understood that to be the case but, nevertheless, felt that Dr Cusick would get over his objection to Dr Leslie going to East Timor and that the professional arrangement would be maintained.

28 Whether or not Dr Leslie was on notice from 21 September that Dr Cusick would not be referring any more patients to him, there is no suggestion in the evidence that as from 21 September Dr Leslie understood there would be no more work for him at REC. In her evidence Sister Dawson said that her understanding from a conversation with Dr Leslie was that Dr Leslie intended to come back to work at REC on his return from East Timor although she had said to him "I would not expect you to have a job when you come back. Peter will not be happy with this". Ms Dorahy said in her evidence that there was nothing to make her think that Dr Leslie would not be returning to practice at REC after East Timor and no one had told her otherwise. Dr Brewster appears to have been under the impression that he was only filling in for Dr Leslie for a short time until his return. That is, until he was told by Dr Cusick after Dr Leslie visited the Centre on 24 or 25 October that "Dr Leslie wouldn't be working at Rosemont again." Dr Mackay knew nothing of Dr Leslie not returning to work with Dr Cusick until late October when Dr Cusick told him that "I will not be referring any further patients to Simon." Dr Williams, one of the other procedurists at the REC, had an understanding (although he was not sure) in September whilst Dr Leslie was away, that Dr Leslie would be returning to the REC.

29 The only evidence of Dr Cusick telling someone else in September 1999 that he no longer wished Dr Leslie to work on his lists was from Mrs Cusick. Mrs Cusick asserted that Ms Dorahy was told by Dr Cusick before the incident on 24 or 25 October that Dr Leslie would no longer be working on Dr Cusick's lists. Ms Dorahy denied any such knowledge. Mrs Cusick also said in her evidence that Dr Cusick was told on more than one occasion by Sister Dawson and Ms Dorahy that Dr Williams told them he longer wished to work with Dr Leslie. Both Sister Dawson denied this to be the case. I found Mrs Cusick's evidence to be unreliable.

30 Between 23 and 26 October Dr Leslie returned to Australia for a short visit. He attended the Centre on 24 or 25 October for the purpose, he said, of informing Dr Cusick that he would be able to return to work one month earlier than planned. Dr Leslie had a discussion with Dr Cusick who on Dr Leslie's account told Dr Leslie that "There's no job for you to come back to." According to Dr Cusick, he said to Dr Leslie "I no longer want you to attend to my patients ... You chose to ignore the implications that I warned you about before you left ... I no longer want you to attend to my patients on my lists. I don't have any confidence in your reliability to attend to my patients and I will no longer be referring patients to you."

31 It was common ground that Dr Leslie then swore strongly at Dr Cusick and, on my view of the evidence, Dr Leslie pushed Dr Cusick from behind on the shoulder causing him to break his stride. Dr Cusick then asked Dr Leslie to leave the Centre. Dr Leslie did not refer to his use of foul language in his original affidavit or to the push he gave to Dr Cusick and only admitted to doing so in his affidavit in reply.

32 Dr Leslie returned to East Timor. After returning to Australia Dr Leslie telephoned REC to have a further discussion with Dr Cusick but was told that Dr Cusick did not wish to speak to him. Dr Leslie had no further contact with the REC except with Ms Dorahy regarding financial matters. Dr Leslie tried to speak with Dr Williams for whom he had acted as a sedationist for some three years but Dr Williams refused to take his calls. Further, Dr Williams took no steps to advise Dr Leslie that he no longer wished to work with him, saying in his evidence that he was satisfied that Dr Leslie must have been told "by someone" that he was no longer required to work on Dr Williams' lists.

33 Dr Williams said in his evidence that he decided that he would no longer work with Dr Leslie after being told by Dr Cusick of the altercation that occurred between Dr Cusick and Dr Leslie on 24 or 25 October. Dr Williams said he felt the whole situation - physical violence and verbal abuse - was "unprofessional". He said that he thought his refusal to take the applicant's telephone calls implied that he no longer wished to work with the applicant and, in any event, he was happy to work with Dr Brewster as the sedationist.

34 After the altercation between Dr Cusick and Dr Leslie on 24 or 25 October 1999, Dr Cusick informed Drs Williams and Brewster that he did not want Dr Leslie back at REC. Dr Brewster was told on the day of the altercation that "Dr Leslie wouldn't be working at Rosemont again" and that he understood from Dr Cusick that he "didn't want Dr Leslie on the place." Dr Brewster said that Dr Cusick had told him "many times in subsequent conversations that he reaffirmed that he did not want Dr Leslie to work there again and he seemed very definite about it". Despite somewhat contradictory evidence on his part, Dr Williams also eventually agreed that he was told by Dr Cusick after the events of October 1999 that he "did not and does not want Dr Leslie on his premises."

35 Dr Cusick said in his evidence, however, that he did not obstruct Dr Leslie working with Dr Williams, with the implication being that he had no objection to Dr Leslie working at REC except as a sedationist working on Dr Cusick's lists. This is a significant issue because the applicant contended that it was on 24 October that the contractual arrangement with Dr Leslie that involved him working at REC as a sedationist was terminated and there was no opportunity for him to continue working with any of the procedurists at REC, including Dr Williams. I will return to this issue later but I observe at this point that there was no formal consideration within REC, for example, through the governing body, the QCC or MAC, of Dr Leslie's future with REC and no formal decision was taken to terminate his services, either as a VMO or on any other basis.

36 Expert evidence was called by the respondents from Dr Ross Holland, Professor of Anaesthesia and director of the departments of anaesthesia at Lidcombe, Westmead and John Hunter Hospitals. Professor Holland said in his evidence that:

· The relationship between operator and anaesthetist is unique and professional. Its initiation and continuation depends upon individual mutual professional confidence. Patient safety and welfare is the overriding principle and consideration governing the relationship.

· A high level of cooperation between operators and anaesthetists is vital in endoscopy procedures. Fluent communications and good relations between the two professionals are essential to ensure this high degree of interaction takes place smoothly.

· Any adverse personal issues may impact on the performance of either or both practitioners. Under such circumstances it is inappropriate for the relationship to continue and it is at the discretion of either party to terminate the relationship at will.

37 Dr Graham Storey, a specialist anaesthetist, was called by the applicant. Dr Storey gave evidence of the limited opportunities in the Illawarra area for work as a sedationist. He also believed there were limited opportunities for such work in the Sydney region.

38 Evidence was also tendered as to Dr Leslie's earnings for the period he was working with REC and thereafter. It was submitted that when the service fee of 15 per cent charged by REC was deducted from earnings for the period 1998, 1999 and 2000, Dr Leslie's earnings for the five year period 1998-2002 were as follows:

1998: $193,948.85

1999: $187,075.84

2000: $185,710.19

2001: $198,779.00

2002: $192,480.00

Applicant's submissions

39 Mr P Newall of counsel appeared for the applicants. Mr Newall's submissions may be summarised as follows:

1. The applicant performed work under a contract within the meaning of s 105 of the Act for REC over a period extending from 1993 to 1999. The contract was an unusual one within the medical profession and has to be seen on its own terms.

2. The contract was the whole of the contract whereby Dr Leslie performed sedation work at REC for Dr Cusick and others. It contained terms relating to bulk-billing, the taking of leave and the manner in which Dr Leslie was to conduct himself professionally and administratively.

3. The contract was underpinned by the grant of privileges to Dr Leslie as a VMO at REC. The terms and conditions applying to VMOs at REC formed part of the contract. The VMO-related terms of the contract were contained within the contract as a whole and did not stand apart from it.

4. The contract was akin to a contract of employment. Dr Leslie's attendance at REC and the performance of his work there were treated and regarded by REC as akin to a job. Dr Leslie was subject to a substantial degree of control in the performance of his actual professional work and in the arrangement of that work.

5. On the evidence it cannot be said that in practice Dr Leslie operated under an arrangement as an independent medical professional in practice at REC. He did not select those patients that he was to treat but simply sedated those whom the procedurist had elected to treat on that day and was to a degree directed - both orally and in writing - as to how to do that.

6. The proposition that patients were in some removed and formal way "referred" to Dr Leslie is a myth.

7. The contract as it operated clearly contemplated notice on both sides if it was to be terminated. That is clear from the VMO arrangements which specified three months' notice. Dr Cusick conceded that in the ordinary course of events a VMO could expect his ability to perform work at REC would continue until the end of the triennium or at worst on the basis of three months' notice of termination.

8. The fact that Dr Leslie's work at REC was under a contract regarded by Dr Cusick as akin to a job was confirmed by Dr Cusick's reference to Dr Leslie's position at REC as being 'redundant'.

9. It is clear on the evidence that the contract was ended unilaterally by the REC on 24 October 1999 in respect of all Dr Leslie's work at REC and was on that day ended by the unilateral decision of Dr Cusick alone for and on behalf of the REC. It is also clear that this termination was not foreshadowed by Dr Cusick prior to that date.

10. It was not the case that despite the fact Dr Cusick told Dr Leslie he would no longer refer patients to him that this had no effect on Dr Leslie's ability to otherwise practice at REC. It beggars belief that Dr Leslie could have continued to work with other procedurists at REC given that Dr Cusick was and is the owner, operator and medical director of REC to whom Dr Leslie reported and was 'responsible'.

11. Whilst the usual arrangement between procedurist and sedationist is that it is an individual professional relationship severable by the two professionals as they saw fit, this was not the case at REC. If it were the case that the contractual situation was simply one of professionals working together at will it is inconceivable that Dr Williams would not have told Dr Leslie as one professional to another, that he no longer wished to work with him. That was not what occurred because that was not the arrangement at REC.

12. Dr Cusick's evidence in general must be treated with scepticism. He was evasive, his evidence was contradicted by other witnesses, he exaggerated. The evidence of Mrs Cusick fabricated evidence and she was not to be believed.

13. Given that the nature of the contract was akin to an employment contract it should in fairness be so treated when it comes to termination. The contract should be paid out to the end of the triennium or at least the three months' notice ought be paid.

14. It was conceded by the respondents that neither the MAC nor any other body at REC gave any consideration to the termination of Dr Leslie's contract. Given the 'governing body' of REC was Dr and Mrs Cusick it was not to be expected there would be any formal decision in relation to termination. In that circumstance Dr Leslie cannot be criticised for failing to appeal against REC's decision.

15. The reason for the termination of the contract and the conduct of the respondents towards Dr Leslie are clearly relevant. They reflect how the contract operated in practice and, if unfair, render the contract unfair for that reason alone.

16. The purpose of Dr Leslie's absence was to render aid in East Timor as an emergency medical volunteer. It was a genuine, selfless and valuable humanitarian act for Dr Leslie to go to East Timor.

17. It was only Dr Leslie's absence which caused termination of the contract, not any criticism of his professional work as a sedationist. It was not even the fact that he was absent that caused termination but it was for the reason that he volunteered to go to East Timor.

18. The reason's for Dr Leslie's departure are also relevant when considering the shortness of notice given by Dr Leslie balanced against the inconvenience caused to Dr Cusick.

19. Dr Leslie believed that Dr Cusick would understand the humanitarian and medical reason for which he felt compelled to go to East Timor. It was not appropriate to delay his departure and give four weeks' notice of his intention to go to East Timor and no reasonable person would have insisted on it or held it against him that he did not give notice in those particular circumstances.

20. There was no compromise to patient welfare by Dr Leslie's absence and no loss of income to REC or to Dr Cusick. The only difficulty was that Dr Cusick was inconvenienced in having to work with sedationists with whom he was not familiar. Dr Leslie tried to minimise the inconvenience.

21. Dr Leslie's conduct on 24 October was not the reason for the decision by REC to end the contract. Further, Dr Leslie had just returned from the stress of heavy and dangerous medical work in a war zone. His conduct, however, reinforces Dr Leslie's case that it shows the unexpectedness of the termination and Dr Leslie's expectation that the contract did not operate so as to be able to be terminated in the way that it was.

22. The contract was unilaterally and summarily terminated by Dr Cusick for and on behalf of REC. The reasons for terminating the contract were capricious and unfair. No notice or payment was made in respect of the termination. Accordingly, the contract was unfair and a remedy, of which can be gathered from the contract itself or alternatively a provision of reasonable notice should be provided.

23. Mitigation is not an issue. The decision in Westfield v Adams does not provide that the Commission will approach notice payments with "the ordinary application" of principles of mitigation. Rather, that decision provides that the issue is "whether it would be just in the circumstances of the case to reduce any payment in lieu of notice."

24. Section 106(6) of the Act does not apply. Section 106(6) is not properly to be regarded as procedural: Maxwell v Murphy (1957) 96 CLR 261 at 268-9 per Dixon CJ. The presumption against retrospectivity holds good.

Submissions for the respondents

40 Mr J N West QC with Mr D Chin of counsel appeared for the respondents. The submissions for the respondents may be summarised as follows:

1. The evidence discloses only two possible and relevant contracts or arrangements:

a. Firstly, the contract between the applicant and the respondents as proprietors of the REC whereby the applicant attained the status of Accredited Medical Practitioner or VMO pursuant to the terms of appointment; or

b. Secondly, the professional arrangement between the applicant and Dr Cusick whereby the applicant provided anaesthetic services in respect to Dr Cusick's patient lists at the REC.

2. As to the VMO contract, the Commission lacks jurisdiction in that it is not a contract whereby the applicant performed work in any industry. The Commission's jurisdiction under s 106 is only enlivened in respect of contracts that, under or pursuant to their terms, lead directly to the performance of work in an industry. Mere indirect, remote or consequential work performed in connection with a contract is not sufficient: Production Spray Painting & Panelbeating v Newnham (1991) 27 NSWLR 644 at 657.

3. The VMO contract provided the applicant with nothing more than a contingent right to use the facilities of the REC to carry out his own professional practice as a sedationist. Similar to the sale of business in Production Spray Painting the VMO contract did not require the applicant to practise at the REC or to employ others to do so. Although the applicant did perform work in connection with the use of REC facilities, he did so on his own account as an independent medical practitioner and not in fulfilment of any contractual obligation to the REC. In no sense was the applicant working for the proprietors of the REC.

4. In the alternative, even if the Commission finds jurisdiction with respect to the VMO contract, the applicant's VMO status survived the breakdown of the professional arrangement; and that Dr Cusick's decision was confined to the professional arrangement.

5. The professional arrangement is not contractual in nature, there being no consideration passing from Dr Cusick to the applicant for services. The relationship was in the nature of a professional association whereby the applicant agreed to provide anaesthetic services for Dr Cusick's patients. The applicant's "reward" came from the various medical funds and Department of Veteran Affairs, which he billed for his independent services.

6. Professor Holland's evidence supports the proposition that the relationship between procedurists and anaesthetists may be terminated without notice at the absolute discretion of either party.

7. The applicant's own actions belie the employment analogy which he urges on the Commission in these proceedings: the applicant concedes that a surgeon has every right to refuse to work with any given anaesthetist and that whether an anaesthetist is used by a surgeon is a matter for the surgeon; it was essentially a matter for Dr Leslie whether he worked with Dr Adams at the REC in 1997; the applicant felt free throughout his period as VMO at the REC to provide a substitute anaesthetist in circumstances where he was unable to attend; the applicant became indignant, resentful and abusive towards Dr Cusick's questioning about his punctuality; prior to departing for East Timor the applicant knew Dr Cusick regarded his absence from the REC as being unacceptable, but that it would be a sacrifice that both Dr Cusick and Dr Williams would have to make; the applicant was going to do what he thought he had to do and the surgeons had to just go along with it.

8. Despite the sense of his own professional independence and autonomy, the applicant unjustifiably asserted that he was subject to Dr Cusick's 'control'.

9. The circumstances of the applicant's departure to East Timor did not render Dr Cusick's subsequent termination of the professional arrangement unfair: Despite having previously agreed to give four weeks' notice of his taking leave the applicant raised with Dr Cusick his intention to go to East Timor a mere six days before completing his final list with Dr Cusick prior to his departure; the applicant confirmed his availability to depart "immediately" for three months, to the organisation with which he was to attend East Timor, on the same day but after Dr Cusick told him that his departure was unacceptable; the applicant presented Dr Cusick with a fait d'accompli despite acknowledging that his absence would cause Dr Cusick strain and sacrifice; the applicant took a calculated risk in leaving for East Timor despite Dr Cusick's express disapproval and he merely hoped to dissuade Dr Cusick from terminating the professional arrangement on his return; the applicant's departure did in fact result in significant inconvenience to Dr Cusick and his patients in terms, inter alia, of extended recovery times.

10. Irrespective of the East Timor issue, the applicant's conduct upon his return to the REC on 25 October of itself justified the termination of the professional arrangement in the circumstances.

11. The applicant's lack of candour in respect of the altercation on 25 October 1999 together with the obfuscation about his knowledge of the consequences of his departure to East Timor amounts to a pattern of self-serving distortion on key factual issues that reflects adversely against his credit.

12. The applicant has failed to establish any relevant unfairness pertaining to either the VMO contract or the professional arrangement.

13. The principle of mitigation applies: Westfield v Adams (2001) 114 IR 241. The sum claimed in the nature of payment in lieu of notice should be discounted against monies earned after termination. Section 106(6) applies. The amendment introducing s 106(6) is procedural in nature and thus the common law rule against retrospectivity has no application: s 30(1)(c) of the Interpretation Act 1987; AIS Pty Ltd v Najdovska [1988] 12 NSWLR 587 at 620-21 per Priestley JA; Maxwell v Murphy (1956-57) 96 CLR 261; Victrawl Pty Ltd v Telstra Corporation Ltd (1995) 131 ALR 465 at 469.

14. The evidence discloses that the applicant suffered no real loss in earnings after the professional arrangement was terminated in October 1999.

Consideration

41 The first issue to be determined is the nature of the contract or arrangement between the applicant and the respondents. The applicant asserts there was only one contract, akin to a contract of employment, whereby he performed sedation work at REC for Dr Cusick and others. This contract was said to have been underpinned by the grant of privileges to Dr Leslie as a VMO at REC.

42 The respondents asserted there were two relevant contracts: the VMO contract; and, the professional arrangement between the applicant and Dr Cusick whereby the applicant provided anaesthetic services in respect of Dr Cusick's patient lists at the REC.

43 The relationship between Dr Cusick and Dr Leslie commenced in 1991 when Dr Cusick asked Dr Leslie whether he would be interested in sedating patients on whom Dr Cusick performed endoscopic procedures. Dr Leslie agreed to do so. If this had been all there was to the relationship I would have been inclined to agree with the respondents' submission that the relationship between the two doctors was merely professional and in accordance with the established custom and practice within the medical profession the relationship could be terminated without notice at the absolute discretion of either party.

44 This is consistent with Professor Holland's opinion to the effect that any adverse interpersonal issues between operators and anaesthetists could impact on the performance of either or both practitioners. Under those circumstances he said, it was inappropriate for the relationship to continue and this gave rise to the accepted practice in the medical profession that either practitioner could terminate the relationship at will.

45 It may well be the case that if Dr Cusick or Dr Williams lost confidence in Dr Leslie's professional ability to carry out the work of a sedationist, they would have been entitled to say to him that they no longer wanted him to sedate their patients. In those circumstances, consistent with the profession's practice, Dr Cusick and Dr Williams would have been entitled to end their professional relationship with Dr Leslie there and then. This is, in effect, what the respondents' contended; that Dr Cusick lost confidence in Dr Leslie because of his absence and Dr Williams apparently also lost confidence in him because of what he regarded as his unprofessional conduct on 24 or 25 October 1999. Accordingly, the respondents asserted that consistent with the medical profession's custom, they were entitled to terminate the relationship at will.

46 In my opinion, however, the relationship with which I am concerned in these proceedings was more than simply a procedurist/sedationist professional relationship terminable at will. When Dr Cusick and his wife set up REC in 1993 Dr Leslie continued to perform sedationist work but it seems to me his role altered. He was appointed as the Director of Anaesthetic Services for REC; he wrote documents for accreditation of the Centre and for training staff in medical emergencies. He assisted Dr Cusick in designing and fitting out the layout of the Centre's operating theatre. He also had an arrangement with Dr Cusick that he would give four weeks' notice of the taking of any leave. Dr Leslie was provided with a job specification and description and he was to be responsible to the medical director, Dr Cusick.

47 It is clear that Dr Leslie was an independent medical practitioner and by no means could he be described as an employee of the Centre. Nevertheless, Dr Leslie's position at REC had an air of semi-permanency about it, he having worked continuously at the Centre for six years.

48 Whilst Dr Leslie was an independent practitioner REC, in effect, organised his work to the extent of his availability. That is, he presented for work on particular pre-arranged days and when there carried out sedation on patients on the procedurist's lists. However many patients were on the lists Dr Leslie would deal with them pursuant to a roster drawn up by REC.

49 Dr Leslie was arranged by REC to work as Dr Williams' sedationist. Dr Williams could, of course, have refused to work with Dr Leslie and vice-versa but the point is the arrangement was made by REC without advance consultation indicating, in my opinion, that REC did exercise some limited control over the work performed by Dr Leslie.

50 Another indicator of the relationship between REC and the applicant was Dr Brewster's evidence that he had been told by Dr Cusick that "Dr Leslie wouldn't be working at Rosemont again" and that he understood from Dr Cusick that he "didn't want Dr Leslie on the place." Thus, Dr Cusick was not only indicating a decision about not wanting Dr Leslie to sedate his patients, he was also indicating, in my opinion, that he had had made a decision as the medical director and owner/operator of REC that Dr Leslie would not work at Rosemont again. Dr Williams also agreed that he was told by Dr Cusick that he "did not and does not want Dr Leslie on his premises." In other words, Dr Cusick was conveying to Drs Brewster and Williams that the relationship between the applicant and REC was finished.

51 As part of his arrangement with REC, Dr Leslie was required to be accredited as a VMO and, therefore, was accorded certain privileges and assumed certain obligations common to such arrangements. His appointment as a VMO was not made until 1995, some two years after his arrangement with REC commenced. In relation to the VMO contract I agree with the respondents that it was not a contract whereby work is performed in any industry but it was, nevertheless, part of the overall arrangement between the applicant and REC that he be accredited as a VMO. In any event, notwithstanding what occurred in October 1999, Dr Leslie's accreditation as a VMO continued until February 2002 when it lapsed because it was not renewed by him. Dr Leslie, however, appears to have been of the belief that as Dr Cusick and Dr Williams did not want him to perform sedationist work on their patients, his status as a VMO at REC was meaningless from October 1999 onwards. Dr Cusick had the same view, stating in his evidence that after October 1999 Dr Leslie's VMO status was "redundant" because none of the procedurists at REC would work with him.

52 Even if one discounts the VMO contract as having little relevance or disregards it entirely as not being a contract whereby work is performed, there is still to be considered the remainder of the overall arrangement between the applicant and REC. This is because Dr Leslie represented something more to REC than merely a VMO and his relationship with the Centre was more than the evanescent arrangement asserted by the respondents. In this regard, I note that on an organisation chart, approved by Dr Cusick, it shows sedationists as separate from VMOs and having a reporting line to Dr Cusick.

53 An "arrangement" under s 105 of the Act encompasses a wide range of transactions as noted by the Full Bench in Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 99 IR 69 at 75-76:

17 The extension of the section to cover an "arrangement" and the consequent effect on transactions within its scope have been referred to on many occasions in the cases, as illustrated by what was said by a Full Court (Hill, Maidment and Peterson JJ) of the former Industrial Court in Legal & General Assurance Society Limited v Stock [1993] 49 IR 464. It is instructive to recall what their Honours there observed (49 IR at pp 480-481) :

The authorities make clear that the term "arrangement" where used in the section is a wide one and encompasses transactions or plans which are not legally enforceable agreements. The following principles may be drawn from decided cases in the matter in relation to the ambit and reach of the term "arrangement" where used in the section (Unconscionable Contracts and Economic Duress - Peter M Hall, at 55-56).

"(1) The word 'arrangement' in its ordinary meaning and particular statutory context is a word of much wider import than the word 'contract'.

(2) An 'arrangement' will be found to exist where there is a bilateral or multilateral plan or concerted action to bring about a particular result.

(3) An 'arrangement' may envisage a transaction in the nature of a bargain which may not be legally binding or enforceable, something in the nature of an understanding between two or more persons.

(4) The section speaks of an arrangement of a particular kind, namely, an arrangement whereby a person performs work in an industry, that is, a transaction which directly leads to the performance of work in an industry.

(5) The term 'arrangement' possessing a broad and extensive meaning may be found disclosed in a document comprising or specifying its terms, or there may be no document specifying the arrangement in which event resort will be had to oral evidence of discussions whilst in other cases an arrangement may be implied or inferred from the circumstances or the conduct of the parties. An arrangement may be discovered in a combination of documentary or verbal communications and the conduct of the parties. The relationship between the parties may itself manifest an arrangement.

(6) There may exist two separate contracts each forming part of a specific arrangement and together constituting the means by which it is effectuated so as to produce particular results and whereby a person performs work in an industry.

(7) The section accordingly comprehends not only the initial plans but all transactions by which the arrangement is carried into effect. It applies to any dealing the purpose or the effect of which is to achieve a situation as a consequence of which or wholly or partly in fulfilment of which a person performs work in an industry.

(8) The term 'arrangement' embraces a situation where there exists two or more separate contracts which, notwithstanding their separateness, are, in a particular factual context, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a constituent part.

(9) The arrangement, including the relationship leading to the performance of work and another contract, need not necessarily have sprung into existence at the same time."

(See Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98 at 131; Hall v Alison Clint Floral Delivery Pty Ltd [1971] AR (NSW) 56; Re Mestrom and Alison Clint Floral Delivery Pty Ltd (No 2) [1971] AR (NSW) 216; Cosgrove v International Opal Pty Ltd [1977] AR (NSW) 751; Barham v Stevenson [1975] 1 NSWLR 31 and Smith v Craig Mostyn & Co Pty Ltd [1984] 2 NSWLR 393; 8 IR 344.)

54 I consider the overall arrangement between Dr Leslie and REC involved the following:

1. The performance of sedationist's work on pre-arranged days at REC on patients on the patient list of Dr Williams and Dr Cusick and other procedurists from time to time in accordance with rosters drawn up by REC;

2. Bulk billing of patients;

3. Seeking and maintaining accreditation as a VMO;

4. Carrying out the duties of Director of Anaesthetic Services;

5. Being responsible to the medical director of REC;

6. Writing documents for the successful accreditation of REC;

7. Training staff;

8. Assisting in designing and fitting out REC's operating theatre;

9. Four weeks' notice to the medical director of an intention to take leave.

55 I consider that on 24 or 25 October 1999 Dr Cusick terminated the arrangement between Dr Leslie and REC. I accept Dr Brewster's evidence that Dr Cusick said to him that "Dr Leslie wouldn't be working at Rosemont again" and the clear inference to be drawn from that statement is that the relationship between the applicant and REC was finished.

56 It was submitted for the respondents that Dr Cusick only terminated the relationship between himself and Dr Leslie and that Dr Williams and other procedurists were free to continue with Dr Leslie as their sedationist using the facilities of REC in Dr Leslie's capacity as a VMO. I do not accept this was the case. I have had regard to Dr Williams' evidence that he decided not to continue using Dr Leslie because of his unprofessional conduct in the altercation with Dr Cusick. Dr Williams did not tell Dr Leslie this; he simply refused to take Dr Leslie's telephone calls and said he thought that thereby Dr Leslie would get the message. This explanation is inadequate. In my opinion, Dr Williams well knew that Dr Cusick was not going to have Dr Leslie working again at REC. Dr Williams avoided any discussion with Dr Leslie most probably because he did not want to become involved in the issue of why Dr Cusick would terminate the relationship over Dr Leslie's absence in East Timor.

57 It remains to be considered whether the arrangement between the applicants and the respondents was unfair, either by its terms or because it was rendered unfair by the conduct of the respondents.

58 I do not find this an easy issue to determine. The applicant is a medical practitioner who had a longstanding arrangement with a licensed day endoscopy facility whereby he performed the work of a sedationist. The applicant was not an employee of the facility and to a large extent was independent. As the situation in East Timor developed into a humanitarian crisis the applicant genuinely and sincerely felt that he should volunteer to perform emergency medical work for a period of three months and, on short notice to REC, left for East Timor. He did so knowing that the owner and operator of REC strongly disapproved of the absence and knowing that he was placing his longstanding arrangement to perform sedationist's work with REC in jeopardy.

59 Despite his manifest insistence of professional independence the applicant contended that the arrangement he had with the respondents was akin to a contract of employment, so much so that reasonable notice of termination ought to have formed part of the arrangement. Yet Dr Leslie considered that despite the fact he had agreed to give four weeks' notice of an intention to take leave, he considered it reasonable to give just six days' notice of an absence of up to three months. If the arrangement between the applicant and the respondent had in fact been a contract of employment, in the absence of any special provision allowing for extended periods of leave at short notice, it is difficult to see how the applicant could have successfully pleaded unfairness if he had been summarily dismissed. One possible outcome of such a claim, in the context of an employment contract, would have been that the applicant had repudiated the contract.

60 The arrangement between the applicant and the respondents was not, however, an employment contract and the question of unfairness must be considered in the light of the particular circumstances of the arrangement and having regard to the conduct of all of the parties.

61 Dr Cusick was clearly the person in a position to terminate the relationship between Dr Leslie and REC. With his wife, he was the owner and operator of the Centre and its medical director to whom Dr Leslie reported. Dr Cusick was satisfied with Dr Leslie's professional/technical ability. Indeed, he preferred Dr Leslie as his sedationist. Dr Cusick, however, was not entirely happy with all aspects of Dr Leslie's work, including the use of a telephone by Dr Leslie during procedure to attend to personal business, Dr Leslie's lack of punctuality and what Dr Cusick regarded as excessive leave taking. Before announcing his intention to go to East Timor, possibly for three months, Dr Leslie had taken leave between 14 and 22 May 1999 and 7 and 29 August 1999.

62 When Dr Leslie first raised with Dr Cusick on 18 September 1999 the prospect of going to East Timor, I do not accept that Dr Cusick said to Dr Leslie that he could not expect to receive referrals when he returned. Dr Cusick did, however, make it quite clear to Dr Leslie that he found the prospect of Dr Leslie's absence to be "unacceptable" and that it would cause disruption to the practice and place a strain on Dr Cusick. Dr Leslie could have been under no misapprehension that Dr Cusick strongly disapproved of the possible absence.

63 Nonetheless, on Tuesday 21 September 1999 Dr Leslie confirmed his intention of going to East Timor and was set to do so the following evening except that he agreed to stay until the end of the week. I do not consider that Dr Leslie was told by Dr Cusick on 21 September that there would be no further work for him at REC when he returned from East Timor. I do consider, however, that he was aware of Dr Cusick's strong disapproval and he was told by Dr Cusick that Dr Cusick would be reviewing the arrangement between Dr Leslie and REC. In my opinion, Dr Leslie left for East Timor knowing there was, at least, the possibility that Dr Cusick would reduce the amount of work available to Dr Leslie at REC but hoping that the nature of the applicant's absence would ultimately represent too much of a hurdle against any recrimination or punishment in the form of a reduced workload let alone termination of the arrangement.

64 It seems to me that at some time between 24 September 1999, when Dr Leslie left for East Timor and prior to the altercation on 24 or 25 October 1999, Dr Cusick decided that he no longer wanted Dr Leslie working at Rosemont again. That is, not only did Dr Cusick no longer wish Dr Leslie to sedate his patients but that the arrangement whereby Dr Leslie performed any work at REC was terminated. What caused Dr Cusick to toughen his position is not clear from the evidence but it could have been the inconvenience caused to him by having to work with the new sedationists arranged by Dr Leslie, two of whom proved unsuitable; Dr Cusick's general sense of dissatisfaction with Dr Leslie which had been building up over a period of time; and, the prospect of Dr Leslie at some time in the future taking leave of absence at short notice and again causing inconvenience and disruption to Dr Cusick and the practice. It could also have been that Dr Cusick decided that Dr Leslie no longer had what Dr Cusick considered was the necessary degree of commitment to REC.

65 Dr Leslie was, I consider, genuinely surprised by Dr Cusick's announcement that Dr Cusick no longer wanted Dr Leslie to work with him. The degree of surprise, coupled most likely with the tensions of his experiences in East Timor, probably contributed to Dr Leslie's outburst of profanity and his shove to Dr Cusick's back. Perhaps he would have been even more surprised if he had understood on 24 or 25 October 1999 that not only had Dr Cusick decided he no longer wanted Dr Leslie to sedate his patients but also Dr Cusick's intention was that Dr Leslie no longer perform any work at REC. It was only later, after Dr Williams refused to return his calls, Dr Leslie came to the realisation that, indeed, there was no more work for him at REC.

66 Thus, the position was that the applicant genuinely felt the need to volunteer to provide medical aid in East Timor. The applicant believed that aid was needed urgently and it was impracticable, in the circumstances, to give four weeks' notice of his intended absence from REC. The applicant considered that any inconvenience caused to Dr Cusick and to Dr Williams by his absence was a sacrifice they would both have to make and one they would "just have to live with". The applicant took steps to arrange substitute sedationists as a measure of "damage control" in order to minimise the stress on Dr Cusick but two of these proved unsuitable. In any event, Dr Leslie appears to have considered that whether or not the substitute sedationists were suitable was a matter for Dr Cusick and his responsibility ended with offering the names of the substitutes.

67 Even taking into account the reason for his absence, I do not consider that Dr Leslie's conduct was entirely reasonable. As I earlier observed, in these proceedings he wants to take advantage of the nature of the longstanding arrangement with REC, referring to it as akin to an employment contract, but he does not want the fetters that normally apply in respect of such contracts; he wanted to be free to unilaterally absent himself for up to three months on very short notice and expected that when he returned he would resume work with REC as normal despite being told before he left that the arrangement he had with REC would be reviewed with the prospect of his work being reduced. Dr Leslie did not give reasonable consideration to the impact of his absence on his arrangement with REC and merely regarded it as something they had to live with in the interests of him being able to leave at short notice to render medical aid in East Timor. Dr Leslie did arrange for substitute sedationists but took no responsibility to ensure that they would be suitable and to that extent his contribution to lessening any disruption to the practice or additional stress on Dr Cusick was minimal. The applicant submitted that his absence in East Timor was a "selfless and valuable humanitarian act". That is no doubt true, but his treatment of REC and the procedurists with whom he worked reflected a strong degree of self-interest rather than any real effort to consider the mutual interest.

68 For his part, Dr Cusick clearly did not want Dr Leslie to go to East Timor, concerned that the absence would increase the strain on him and disrupt the practice. Dr Cusick expressed his disapproval with Dr Leslie absenting himself and warned him that he would review the arrangement with REC. Dr Cusick's concern at the prospect of his principal sedationist being absent for three months is quite understandable but like Dr Leslie he too does not seem to have given the matter any further consideration beyond his own self-interest. Dr Cusick does not appear to have given the purpose of Dr Leslie's absence the slightest consideration in his decision to terminate Dr Leslie's arrangement with REC. In particular, there was no attempt by Dr Cusick to come to some mutually agreeable arrangement to accommodate Dr Leslie's absence which, in the circumstances, presents itself as a reasonable alternative to simply opposing Dr Leslie volunteering to give valuable emergency medical aid and eventually terminating Dr Leslie's arrangement with REC for absenting himself to go to East Timor.

69 Moreover, in weighing up the conduct of the parties in the context of considering whether there was unfairness, Dr Cusick did not make it clear to Dr Leslie before he left to go to East Timor that if he did go he would not work at REC again. Dr Cusick certainly warned Dr Leslie that there was the prospect of his work being reduced at REC but Dr Leslie did not make his decision to absent himself knowing there would be nothing to come back to at REC.

70 Further, whilst Dr Cusick relied on the custom in the medical profession to terminate at will, I observe that this was not a situation where Dr Cusick had lost confidence in Dr Leslie's professional/technical ability as a sedationist and, therefore, there was an urgent imperative to end the arrangement with REC. This was a situation where, essentially, Dr Cusick came to the view, after Dr Leslie defied him by going to East Timor, that Dr Leslie was not sufficiently committed to working with REC that he would give the necessary priority to REC and to Dr Cusick. A reasonable course of action in those circumstances would have been to give notice of termination to Dr Leslie or payment in lieu of notice so that he could withdraw with some dignity and have reasonable opportunity to make alternative arrangements in relation to work and income.

71 I also observe that whilst there was some inconvenience and disruption caused by Dr Leslie's absence the extent of it was not great; the practice did not lose any income, and whilst Dr Cusick may have been personally inconvenienced and some patients may have been slightly inconvenienced, overall the impact was minimal.

72 I said earlier that the issue of whether there was unfairness was not easy to determine. Nevertheless, I have decided that, on balance, it was unfair to summarily terminate the arrangement between REC and Dr Leslie. In coming to this conclusion I have also had regard to the evidence that the availability of work for a sedationist, which for six years was a major source of income for the applicant, is in short supply in the Illawarra region.

73 Accordingly, I find that the contract between the applicants and the respondents was unfair within the meaning of ss 105 and 106 of the Industrial Relations Act 1996.

74 The question arises as to the form of any relief. The summons claimed relief by way of a monetary payment in the nature of 12 months' remuneration in lieu of notice and a further sum equivalent to 12 months' remuneration for basis for which is unspecified. I see no basis for providing relief in the nature of the latter sum.

75 In any event, the claim in the summons was superseded by the applicant's submission that he should be paid out to the end of the triennium of the VMO contract or at least three months' notice or reasonable notice ought be paid.

76 I consider that the applicant should have been given one month's notice. Given the applicant's conduct, an order varying the contract by requiring more than one month's notice would not be an appropriate outcome.

77 As to the question of whether the Court should make an order as to the payment of money in connection with the varied contract, that is a matter for the Court's discretion. The respondents submitted that if unfairness were found there should be no relief in the form of a money sum because Dr Leslie had mitigated his loss. In this respect, the respondents submitted that s 106(6) of the Act applied.

78 Section 106(6) was introduced by the Industrial Relations Amendment (Unfair Contracts) Act 2002 in June 2002, in the following terms:

In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss.

79 The amendment embodied in s 106(6) makes it clear that the Commission in Court Session must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss. However, the statute does not specify what course the Commission is to take once it has taken into account any action to mitigate loss. That is left to the discretion of the Commission.

80 The applicant contended that s 106(6) had no application to these proceedings because the subsection is to be properly seen as substantive and the common law rule against retrospectivity applies. The respondents contended that the amendment was merely procedural and the common law rule had no application.

81 Whether or not s 106(6) has application to these proceedings is something of a moot point because consistent with the Full Bench decision in Westfield Holdings v Adams (2002) 114 IR 241 I propose to take into account the applicant's actions in mitigating his loss. In that case the Full Bench determined that:

...in making an appropriate monetary order under s 106(5) it is proper to have regard to the common law principles relating to mitigation but recognising that in particular cases it will be inappropriate to apply mitigation. Ordinarily, where an employee has been successful in avoiding his or her loss, or has failed to take reasonable steps to avoid loss in the period following dismissal, the Court, in determining what is just in the circumstances of the case, should give consideration to whether, and to what extent, any money amount in respect of notice of termination that is contemplated to be the subject of an order under s 106(5), should be reduced by monies earned, or imputedly earned, in the relevant post-termination period. We emphasise that the application of the principle of mitigation in cases brought under s 106 represents one aspect of the consideration of what orders are "just in the circumstances of the case".

82 The evidence indicates that the applicant was successful in mitigating his loss, with the income he lost from REC being largely made up in 2000, 2001 and 2002 by income from the Illawarra Area Health Service and from other sources. The question, therefore, is whether, notwithstanding the mitigation of his loss, it would be just in the circumstances of the case to make a money order in the applicant's favour.

83 I have decided against the making of any money orders in the applicant's favour. The applicant has mitigated his loss and there are no circumstances of this case that would otherwise cause me to make such money orders.

Orders

84 I make the following orders:

1. The Court declares that the contract between the applicant and the respondents which is described in this judgment as "the overall arrangement" is an unfair contract within the meaning of s 105 of the Industrial Relations Act 1996.

2. The overall arrangement between the applicant and the respondent is varied from 18 September 1999 by inserting the following provision:

a. In the event that the overall arrangement between Dr Simon Leslie and Rosemont Endoscopy Centre is terminated by the principals of the Centre or either one of them, the principals shall give Dr Leslie one month's notice of termination of the arrangement.

3. The respondents shall pay the applicant's costs of the proceedings in an amount as agreed or, failing agreement, as assessed.

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LAST UPDATED: 21/02/2003