Health Services for Men and Ors v D'Souza and Ors [1999] NSWSC 969 (24 September 1999)

Last Updated: 27 September 1999

NEW SOUTH WALES SUPREME COURT

CITATION: HEALTH SERVICES FOR MEN & ORS v D'SOUZA & ORS [1999] NSWSC 969

CURRENT JURISDICTION: EQUITY

FILE NUMBER(S): 3563 of 1999

HEARING DATE{S): 10.9.99

JUDGMENT DATE: 24/09/1999

PARTIES:

Health Services for Men & Ors v Dr Oscar D'Souza & Ors

JUDGMENT OF: Bryson J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

J.W. Stevenson with M. White for Plaintiffs

M. Cashion SC with T. Thawley for Defendants

SOLICITORS:

Turtons Lawyers for Plaintiffs

D.F.F. Morgan & Associates for Defendants

CATCHWORDS:

MEDICINE - medical clinics - medical records - ownership of records - company medical clinics provide services to medical practitioners operating on premises - no written agreement between clinic and doctors relating to ownership of medical records - clinics owned paper on which medical records written - whether intention of clinic to transfer ownership of papers in medical files to medical practitioners - held that intention that ownership of papers transfers to doctor when papers are used - Passing off - medical practitioners use of phone numbers previously used by medical clinic - injunctions granted to restrain use of phone numbers.

ACTS CITED:

DECISION:

See para 54

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

BRYSON J.

Friday 24 September 1999

3563/99 HEALTH SERVICES FOR MEN PTY LTD & ORS v OSCAR D'SOUZA & ORS

JUDGMENT

1 HIS HONOUR: These proceedings relate to the affairs of medical clinics which are widely distributed around Australia and conducted under the name "Health Services for Men". Their primary focus is treating sexual dysfunction in male patients. The first, second and third defendants are medical practitioners who until 9 August 1999 carried on medical practice in clinics owned and operated by the plaintiffs. The issues relate to ownership and control of files relating to patients and of confidential information in the files, and to the use of telephone numbers which were formerly used in association with the plaintiffs' clinics.

2 The plaintiffs are four related companies. They have different functions in the conduct of the clinics. The plaintiffs claim that all four plaintiffs own and operate the clinics; the defendants did not admit this in terms but the identity of the particular companies which conduct the clinics was not an important issue. At present, there are said to be 21 clinics which are widely distributed around Australia. Until 9 August 1999 ten different medical practitioners worked in them.

3 The first three defendants, Dr D'Souza, Dr Condoleon and Dr Wadan, are medical practitioners. All three practiced from clinics before March 1998 when the plaintiffs began to operate them. Since 9 August 1999 these defendants have continued to practice in the same field, but not in clinics conducted by the plaintiffs.

4 The fourth defendant Australian Momentum Health Pty Limited is a company in some way associated with the professional work of Dr D'Souza and Dr Condoleon; it is the subscriber with Telstra for telephone services for clinics at Norwood, South Australia and Upper Mount Gravatt, Queensland. Australian Momentum Health Pty Limited was formed on 23 June 1999 and its only director and secretary is Forhad Ahmed Khan, who was formerly an officer of the plaintiffs. The fifth defendant is a practice company associated with conduct by Dr D'Souza of his professional affairs.

5 The plaintiffs are the successors in business to other organisations which conducted the same group of clinics since April 1994 when Dr Condoleon began to work in this field, and possibly earlier. In April 1994 clinics were conducted by a company called On-Clinic Pty Limited. In 1996 the clinics began to be conducted by Australian Men's Health Pty Limited; it is said in evidence that On-Clinic Pty Limited sold its clinics to Australian Men's Health Pty Limited although no details of the transaction and no real proof that there was a sale have been put in evidence, and the terms on which the business changed hands are not known. It is then said, again without any real proof of what in detail happened, that Australian Men's Health Pty Limited went into receivership about March 1998 and that after that the plaintiffs took over the clinics which that company had previously conducted. The dates of these events are not clearly established and slightly different dates are given at different places in evidence.

6 Doctors D'Souza, Condoleon and Wadan have not been the only medical practitioners to work in the clinics; some other doctors have done so and some continue. In 1996 On-Clinic Australia Pty Limited made written consultancy agreements with a number of medical practitioners who then worked in its clinics. Mr Mark Ryan who at that time was Managing Director of On-Clinic Australia Pty Limited has produced in evidence an agreement between On-Clinic and another practitioner, Dr Short. Mr Ryan said in evidence to the effect that about August 1996 a number of medical practitioners including the first to third defendants signed agreements in the same form as Dr Short. There is some difficulty about this statement as Dr Short's agreement is dated 7 June 1997. The consultancy agreement signed by Dr Short contains clauses relating to preserving the confidentiality of confidential information, not using confidential information otherwise than for the benefit of the principal after termination and not removing confidential information from the clinic without written consent; the practitioner is expressly required to ensure that records are not removed from the clinic. There are also restrictive covenants before and after termination. No written agreement of On-Clinic Australia with any of these defendants has been produced in evidence, and each has denied making one; according to their evidence, they indicated to Mr Ryan modifications which they required to the form, and the project of making a written agreement did not go any further. In any event there is no evidence that the benefit of any such agreement has passed through a chain of assignments from On-Clinic Australia Pty Limited to the plaintiffs. The obligations undertaken by both sides were such that the benefit of the contract would not be assignable. These defendants are not parties to any express or implied arrangement for compliance with provisions like those in the form produced by Mr Ryan; nor are the plaintiffs.

7 Each of these defendants made a written agreement with the first plaintiff on a standard form headed "Short Form of Agreement". Dr D'Souza's Short Form of Agreement is an example. It was dated 15 April 1998 and its material terms were:

"I hereby authorise Health Services For Men Pty Limited (HSM) to deposit all of my consultation, consumables and medication receipts into the HSM Doctors Fees Holding Account (the Trust Account) and to manage on my behalf these funds. The monies will be deposited either by the Staff of Medical Intergrated Services Pty Ltd (MIS) attending to the Clinics serviced by me and/or Medical Admin Services Pty Ltd (MAS). The monies in the Trust Account will be sourced from the daily Clinic payments and all payments received from Medicare under the Providor numbers included below and any extra Providor numbers that may be added at a later date and group linked to P.O. Box 273 Edgecliff.

I am aware that HSM has an obligation to pay MIS, MAS and Asire Pty Ltd for services provided to HSM. I consent to payments being made out of the Trust Account directly to these services companies as long as the payments do not exceed the charges which I am liable to pay HSM for services, consumables and medication."

8 There is no other written arrangement between these defendants and the plaintiffs, so that no express contractual terms are established between them relating to ownership of medical records, control of confidential information or use of telephone numbers. It should be taken that the arrangements actually followed in conducting the clinics were authorised by the parties. The general effect of those arrangements and the way they operated are as follows. The clinics are conducted from premises leased and staffed by one or other of the plaintiffs. The plaintiffs decide when and where to establish or to close or to move a clinic and make all arrangements to do so. Patients at the clinics are given a variety of treatments for sexual dysfunction, and in many cases erectile dysfunction is treated by self-injection therapy. A patient using self-injection therapy is in need of and receives medical advice relating to the suitability of the therapy and the quantity of medication required, and is also in need of medical supplies such as an auto-injector, medication and a self-injection video. The plaintiffs advertise very extensively, particularly in metropolitan Sunday newspapers and are said to spend approximately $30,000 per week on advertising. They solicit business from the public by way of a 1300 telephone number which is shown prominently in the advertisements. Business is largely generated by the newspaper advertisements, but there are also repeat consultations from established patients, and consultations initiated when patients establish contact with particular practitioners in other ways.

9 When prospective patients telephone a clinic, they speak to a staff member, who enters the prospective patient's name, address and contact details in a computer system and asks a series of questions about his medical condition; the answers give a general indication of the prospective patient's problem. If the responses given are regarded as indicating that a consultation at a clinic is appropriate, the staff member makes an appointment, and records it in the computer system for the clinic which the patient is to attend. Particulars of appointments are transmitted to clinics by facsimile. Clinic staff prepare a hard copy (cardboard and paper) file for a new patient using various pro-formas which the plaintiffs prepare. Exhibit A is a copy of a typical file but without material identifying the patient. A new patient attending on such an appointment sees the doctor rostered to be present at the clinic at that time. If a patient attends again he may attend on appointment to see the same doctor; however that does not always happen. Sometimes patients see another doctor, and sometimes they attend at another clinic. Most repeat attendances are attendances to obtain further medication or equipment. At an initial consultation, which takes approximately an hour, the doctor takes a medical history from the patient, makes a physiological examination and if in the judgment of the doctor it is appropriate, may give a metered test injection and ascertain the dosage which is regarded as appropriate. The doctor then prescribes medication for the patient if appropriate. In the majority of cases repeat visits are brief.

10 The staff of the plaintiffs prepare rosters setting out which clinic each doctor is to attend and the times of attendance. Sometimes the roster sets out arrangements for a particular doctor to travel interstate or otherwise to attend clinics requiring lengthy journeys. Roster arrangements are made co-operatively between the plaintiffs' staff and particular doctors, and doctors are not required to attend the clinics except in accordance with their own wishes and convenience; they are not under discipline. On the other hand they have apparent motivations to contribute to successful operation of the clinics. Dr D'Souza usually attended at clinics in and near Melbourne, Dr Condoleon at clinics in Melbourne and Southport and Dr Wadan at a clinic conducted at one time at Edgecliff and later at Bondi Junction. Each of them has at times attended elsewhere, not however while the plaintiffs were operating the clinics.

11 In New South Wales fees for medical practitioners' attendance are bulk-billed. That is to say, a claim is made to Medicare in the name of the doctor and with the patient's authority for a payment to which the doctor is entitled. The Short Form Agreement recognises that the fees are the medical practitioner's fees. Fees when received are paid into the HSFM Fee Holding Account as authorised by the Short Form Agreement. In other States the plaintiffs directly charge the patients for consultation and the fees received are paid to the HSFM Fee Holding Account. Presumably patients who are charged in this way receive some documentation nominating the medical practitioner as service provider to whom the fee is payable, so that the patient can obtain whatever payment is available from Medicare.

12 Patients pay the plaintiffs directly for prescribed medication and equipment, and those payments are also paid into the HSFM Fee Holding Account. Arrangements between the plaintiffs and each doctor establish the proportion of the money received into the HSFM Fee Holding Account which is paid out to the plaintiffs and to the medical practitioners; proportions vary and are related to the number of consultations which the doctor conducts, and are typically about 78% to the first plaintiff and 22% to the medical practitioner. Fees for consultations give rise to about 15% of the plaintiffs' total income and sale of medication and equipment gives rise to about 85%.

13 In the clinics overall there are medical records for about 300,000 patients. Many of these relate to patients who have not attended the clinics while the plaintiffs have conducted them and have not attended for some years. Mr Meehan, an officer of the plaintiffs, estimated that approximately 100,000 files are active.

14 The typical file - Exhibit A - consists of a manilla folder bearing the patient's name, and slips recording particulars of the dates of attendance and materials supplied are stapled to the folder. There is also a two page Examination Sheet, a pro forma completed in handwriting by the medical practitioner. The pro forma provides for an array of social and medical information. When completed the sheet constitutes a comprehensive relevant medical history. It also contains records of treatment prescribed and matters observed on examination. The file also contains an Informed Consent form, relating to the self-treatment therapy. This is a standard form signed by the patient and its terms show that it is directed to the medical practitioner. Exhibit A also contains a Pathology Report from a consultant pathologist directed to the medical practitioner. The last document in Exhibit A is a sheet completed by the patient giving personal particulars and stating whether the patient is on medication.

15 In describing the operation of the clinics Mr Meehan spoke in terms which attributed all acts and events to the plaintiffs and treated the conduct of the medical practitioners as if it were conduct on behalf of and in an agency relationship with the plaintiffs. The defendants' evidence speaks from a different viewpoint in which the medical practitioners conduct their medical practices and see their patients with the benefit of services supplied by the plaintiffs which support their conduct of medical practice. These services include premises, furniture and office equipment, clerical and other staff to attend to arranging rosters and appointments and notifying doctors of these arrangements. In the plaintiffs' point of view the doctors function as part of the plaintiffs' organisation and the plaintiff is providing medical services through their agency, and in the defendants' point of view the doctors are practising medicine and providing professional services, and receiving very full assistance from the plaintiffs in their practical needs as they do so.

16 There is in my finding nothing in the nature of an employment relationship or employment discipline between the plaintiffs and the medical practitioners. Support given by the plaintiffs to the doctors in their work is very full indeed, even extending to paying their travelling and other expenses of attending at clinics, it may be interstate, to fulfil the rosters. There is no indication in evidence that doctors are ever constrained by the plaintiffs' direction to do anything otherwise than exactly as the doctors choose to act. There is no indication of any source for a right to control them in any such way.

17 My interpretation of what takes place accords with the view put forward by the defendants. The essence of what is taking place is that patients who need medical treatment are consulting medical practitioners and obtaining the opinion and advice of the medical practitioners; the patients are not interested in consulting persons who are not medical practitioners but conduct clinics through the agency of medical practitioners who form part of their organisation. It would be unlawful for persons who are not medical practitioners to give medical advice and prescribe treatment. The medical practitioners do not receive and prescribe to a standardised chain of patients with standardised conditions; patients and medical practice are just not like that, and the need for individual personal judgment on the medical practitioner's professional responsibility presents itself anew for each patient. It would not be possible for consultations to be bulk-billed to Medicare unless they were consultations with medical practitioners for which medical practitioners were entitled to charge the patients. In my interpretation it is the plaintiffs' business to provide services to medical practitioners to support their practising medicine and in so doing to enhance, I would think greatly, the medical practitioners' opportunity to receive and treat patients in numbers.

18 On or about 9 August Dr D'Souza arranged for the removal, by a courier company which he engaged, of some thousands of patient files. Dr Condoleon similarly arranged for the removal of some thousands of patient files from the premises of clinics conducted by the plaintiffs. Within a few days the medical files so removed were returned to the control of the plaintiffs under interlocutory orders which, of course, were not based on any decision about the entitlement of a party to own or have the custody of the files.

19 The circumstances in which the clinics were conducted and the nature of the professional work of medical practitioners makes it obvious that the patients have a right to confidentiality of the information in their files and to restriction of access to the information and use of it to purposes related to the interests of the patients. The plaintiffs' case is that the plaintiffs are entitled as against the doctors to confidentiality with respect to information in the files. The plaintiffs claim to be entitled to control use by the doctors of information identifying the patients and recording medical histories and particulars of consultations, diagnoses and prescriptions. There is no express arrangement between the parties dealing with this subject. By contrast, the form of contract between On-Line Australia Pty Limited and another doctor did create express restrictions of that kind. In the absence of express contractual restrictions there is in my view no circumstance of any kind which would impose an obligation of confidence on the doctors towards the plaintiffs with respect to use of information obtained during their association.

20 To address the remaining issues it is necessary to consider the law relating to ownership and possession of medical records. The plaintiff makes a claim to recover possession of files based on a right to own or retain and recover possession of the patient files. There was no express agreement between the parties about ownership or possesion. As a matter of first principles, the ownership of the files, which are pieces of paper, can, assessing the events with reference to the probabilities, be taken first to have been with the person conducting the clinic when the files were created; the probability is that that person used manilla folders and pieces of paper which that person had purchased. A manilla folder, file and pieces of paper in it would remain the property of their owner until they were dealt with in some way which transferred ownership to someone else according to the intentions of the owner.

21 Observations relating to ownership of medical records were made in the judgments in the Court of Appeal and also in the High Court in Breen v. Williams (1994) 35 NSWLR 522 and (1996) 186 CLR 71, and in my unreported judgment at first instance. That case was principally concerned with the right of a patient to have access to the patient's medical records, and ownership questions were considered only incidentally. This is not a field in which there is a large or clear body of judicial opinion and regard must be paid to expressions of opinion even though they were not grounds for decision.

22 Breen v Williams related to papers held by a medical specialist in private practice, including notes made by the medical specialist himself, and the plaintiff did not establish any right which would overcome the medical specialist's entitlement as owner to control access to the papers. The case did not turn on a disputed claim to ownership or possession. There was nothing in the facts with any analogy to a conflict as to ownership between the medical practitioner and the institution in which he worked.

23 In the High Court (1996) 186 CLR 71 the question of ownership of the documents was raised in argument: see p75. Brennan CJ dealt with property in records at p80 in these words:

"Property

The appellant concedes that the property in the records as chattels is in the respondent. The concession is rightly made. Documents prepared by a professional person to assist the professional to perform his or her professional duties are not the property of the lay client; they remain the property of the professional (Leicestershire County Council v. Michael Faraday & Partners Ltd [1941] 2 KB 205 at 216; Chantrey Martin v. Martin [1953] 2 QB 286"

24 Dawson & Toohey JJ also approved the concession: see 88-90, and said at 88:

"The appellant did not claim ownership of the actual documents comprising her medical records. It is understandable that she did not do so, because they do not include any documents obtained on her behalf and paid for by her, such as X-ray photographs or pathology reports, the ownership of which she may well be able to claim."

25 This is an obiter dictum on a subject which did not call for decision. I am impressed with the force of the consideration that as pathology reports are prepared on behalf of the patient and paid for by the patient, the patient ought to be able to claim ownership of them; the patient ought to be able to do that because the intention which as a matter of probability should be attributed to the consultant supplying the report, in the absence of any other evidence, is that the medical practitioner to whom the report was supplied was to receive it and use it only in the interest of the patient, and payment for it and the relationship of the report to the patient's interests support imputing that intention. The alternative, that the intention to be imputed to the consultant is that the recipient should own the report, also has claims for consideration but seems to be less probable. By way of a test, it could be asked what intention should be imputed to the consultant for the possibility that the patient decided to show the consultant's report to some other practitioner to obtain a further opinion; it seems improbable that the consultant would intend that the recipient practitioner would be entitled to withhold it.

26 See also the observations of Gaudron and McHugh JJ at 101. At 126 Gummow J treated the concession as correctly made.

27 If the transfer of ownership is dealt with by a contractual term, it can be taken, as a matter of probability, that the owner intended to comply with the term, and intended that ownership should pass in the way which compliance with the contractual term would require. Consideration of the intention to be imputed to an owner who expressed no intention leads on to consideration of what contractual terms existed: the significance of the contractual term is attenuated when the term itself is also unexpressed and must be ascertained by a process of implication. In Breen v Williams Gummow J referred to the implication of a term in a contract, and referred to Hawkins v Clayton (1988) 164 CLR 539-573 and Byrne v Australian Airlines Ltd (1995) 185 CLR 401 at 420-423, 440-447. At 123-124 his Honour said:

"Where, as here, the contract was not reduced to any complete written form, the question is whether the implication of the term was necessary for the reasonable or effective operation of the contract in the circumstances of the case; only where this can be seen to be so will the term be implied."

28 The views of Brennan CJ Dawson and Toohey JJ in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 422 were:

"Implied term

The implication which the appellants seek to make is based upon the presumed or imputed intention of the parties. In that context, the remarks of the majority in the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings are frequently called in aid: `(1) [the implication] must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that `it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.' In laying down those criteria, it was recognised that there was a degree of overlap. Further, as Deane J has observed, (See Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 at 12), the cases in which the criteria in BP Refinery (Westernport) Pty Ltd v Shire of Hastings have been applied in this Court are cases in which there was a formal contract, complete on its face. He pointed out that a rigid approach should be avoided in cases, such as the present, where there is no formal contract. In those cases the actual terms of the contract must first be inferred before any question of implication arises. That is to say, it is necessary to arrive at some conclusion as to the actual intention of the parties before considering any presumed or imputed intention. And the test to be then applied was in a later case formulated by Deane J in these terms (See Hawkins v Clayton (1988) 164 CLR 539 at 573):

`The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contact, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties.'"

29 McHugh and Gummow JJ said at 446: "In contracts of this nature, apparently lacking written formality and detailed specificity, it is still necessary to show that the term in question would have been accepted by the contracting parties as a matter so obvious that it would go without saying."

30 The tests for implication of a term into a contract stated in the opinion of the majority of the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 have been applied in Australia many times, most notably in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 351-352, 404. The nature of the subject shows that the criteria given by their Lordships cannot be applied in an inflexible way; it remains necessary to establish, so far as possible, what the parties did expressly agree on and to consider the operation of the supposed implication in relation to that, and it is less easy to apply formally expressed criteria where the parties' agreement is itself informal and there is no complete expression of it. That is the present case; the Short Form Agreements were obviously not intended to be a complete expression of the parties' relationship. I should consider whether the contractual relationship between the plaintiffs and the doctors contained an implied term dealing with whether the ownership of the Examination Sheets was to pass to the doctors when they used them. The test which I am required by authority to apply is whether the implication of a proposed term is necessary for the reasonable and effective operation of a contract of the nature which was actually made.

31 In my unreported decision in Breen v Williams on 10 October 1994 at page 19 and following I dealt with ownership of records in these terms:

"Ownership of the records.

On first principles, a person who brings into existence a document by writing on a piece of paper which he owns continues to be its owner, and it passes into other ownership according to its earlier owner's conduct and intentions. It can usually be taken that he intended to pass ownership to another if he had a contractual obligation to do so.

Cases relating to ownership by professional persons of papers which come to existence in the course of their work were reviewed in the judgment of Hope JA in Wentworth -v- de Montfort (1988) 15 NSWLR 348.

Many considerations have influenced these decisions, but the most important consideration for documents produced or created while doing professional work appears to be the express or implied terms of the contract under which the work was performed, and documents prepared by the professional person for his own benefit and protection while doing the work are usually held to be the property of the professional person. There are fairly well established broad categories of documents relating to solicitors, but the decisions are not without their difficulties, and other professions have not produced a corresponding body of judicial experience.

In Leicestershire County Council -v- Michael Faraday & Partners Ltd [1941] 2 All ER 483 the Court of Appeal of England dismissed a claim that documents prepared collected and held by valuers retained by it under contract were the property of the council after the contract retaining the valuers expired.

The claim was put in terms of an assertion of ownership and a right to possession of the papers and was rejected by the Court of Appeal on that basis. MacKinnon LJ (at 487) distinguished between the papers of a professional man to whom a client resorts for advice and the papers of an agent who brings documents into existence while in the employment of a principal.

In Chantrey Martin -v- Martin [1953] 2 QB 287 an auditor's working papers were held by the Court of Appeal to be the property of the auditor.

Ownership of a document received from another person depends on the intention of the person who brought it into existence and sent it. The fact that a professional person's client or patient paid for a document is an indication that it was intended that the patient should own it, but not an unequivocal or exhaustive indication, and the question cannot be answered without evidence of what was intended, conceivably including evidence of practice.

Medical records often include test results and reports from medical practitioners such as consultants, pathologists, and radiologists, or from medical ancillaries. As the evidence does not show that there are such documents, I make no decision about them. A patient who has been charged for and has paid for such documents has a stronger claim to own them and hence to be entitled to access to them, than a patient's claim to access to notes made by the treating doctor, and to correspondence for which the patient has not been charged passing between the treating doctor and others.

Legal ownership of a document is a strong claim to have access to it and indeed to have possession of it; this is the strength of the defendant's claim in respect of notes made by him.

Analogies based on judicial decisions for other professions and occupations, such as preliminary and final plans produced by architects, letters and copies of letters sent to and from solicitors, solicitors' diary notes and counsel's advices are imperfect and not readily applicable to medical practice.

On the evidence I do not find that the defendant or any other person whose intentions are relevant has ever intended that ownership of any of the documents in the defendant's possession should pass to the plaintiff. This is particularly clear for hand-written notes made by the defendant on his own sheets of paper and photographs taken by the defendant himself for his own use. Dr MacDougall is not a consultant to the defendant and chose to write to him about the plaintiff and her treatment, and it is extremely unlikely that he intended that that letter should become the property of the plaintiff."

32 In the Court of Appeal (1994) 35 NSWLR 522 it was accepted that the papers were exclusively the medical specialist's property. See 529-530. In the majority, Mahoney JA summarised the matters in dispute (at 551) in a way which did not include any question of ownership. While considering (at pp559 and following) the right of a patient as such to inspect the medical file Mahoney JA addressed how the ownership of documents produced by professional persons has been determined. At 559D his Honour said:

"In considering the ownership of such documents, it is, I think, of assistance to consider at least three things: the nature of the relationship between the parties; the purpose to be achieved by that relationship; and the particular terms of a contract between them."

At 559 and 560 his Honour reviewed case law relating to documents produced by professional persons and at 560E to 561F said:

How do these considerations apply to the case of a general medical practitioner of the present kind? A medical practitioner is ordinarily not a mere agent for the patient. He is a professional. The purpose of the professional relationship is ordinarily to diagnose, to recommend treatment, and to treat the patient. What the doctor does, and the documents he creates, are ordinarily directed essentially ot the achievement of these purposes. Subject to what I shall say, the documents are created for the purpose of such diagnosis and treatment and they are merely what the doctor uses to achieve those purposes. Accordingly, in my opinion, prima facie, a medical file kept by s doctor is the property of the doctor.

However, the position is, of course, more complicated. It is necessary to examine the circumstances surrounding the creation of each document. Documents created merely for the purposes of the doctor, for example, as records of his practice, as material from which to assess charges and the like will be the property of the doctor. On the other hand, some documents created for the purpose of enabling the doctor to diagnose and to determine the treatment to be recommended may be the property of the patient. Thus, a document, though held by the doctor, may be the property of the patient because it was procured by or for the patient and has been paid for by her. X-rays, pathology reports and some reports by consultant specialists may be such: cf as to the case of a solicitor Wentworth v De Montfort (at 356B). Correspondence with consultant specialists or with treating hospitals may, if of this kind, be the property of the patient.

More difficult questions arise in relation to matters such as those particularly referred to by Dr Cashman in the present case, namely, notes taken by the doctor to record the patient's medical history and her signs and her symptoms. In one sense, such records are made for the purposes of the patient; the making of them is one of the things which the doctor, by his engagement, may undertake to do. In this sense, the document is created so that there may be a record of what the patient has told the doctor and her signs and symptoms at the time. The record may not merely help in the instant diagnosis and a selection of treatment; it may provide a valuable resource for future purposes. Considered in isolation, a record of this kind, if it were contained in a separate document, would, I think, be the property of the patient.

On the other hand, the doctor may - as Dr Williams has said he ordinarily will - include with the record of the history and the signs and the symptoms of the patient, comments and observations which are made and recorded for the purpose of helping the doctor form the diagnosis and the opinion to be formed as to treatment. There may be observations - Dr Williams used the term `musings' - which, if standing alone, would ordinarily be the property of the doctor and not of the patient. It is the fact that these things are combined in the documents which illustrates the nature of the problem in a case such as this.

The combination of such things: the history, signs and symptoms on the one hand and the `musings' and other things on the other hand; may be accidental in the sense that the combination of the two in the one record is not inherent in the process of medical knowledge. But the thrust of Dr Williams' evidence is, I think, that such a combination is not accidental. His evidence suggests that the combination of the two things is inherent in the way medical practice is conducted or, at least, in the way he conducts his practice. The trial judge accepted this portion of the judge's evidence.

If the records kept by the doctor be in this form, then, in my opinion, the records remain the property of the doctor. In so far as the purpose of the making of the records may be, as I have said, one of the things which the contract between the doctor and the patient requires the doctor to do, it will ordinarily be implied that information as to the relevant portion of it, viz, that relating to history, signs and symptoms, will be made available to the patient as and when required for medical purposes. But, by reason of the nature of the record and the circumstances of its creation, the record is in my opinion in principle the property of the doctor."

33 Meagher JA adopted the reasons at first instance (569F) and did not deal with the question of ownership.

34 Counsel took me through a number of references in learned publications relating to law and the medical profession. I was referred to Law of Doctor and Patient, Speller, London 1973. This work relates to practice in England. Its author, a member of the English Bar, held a position as Director of Education at the Institute of Health Service Administrators which gave him advantages in expounding practice. Chapter 10 dealing with ownership of medical records pp154 and following opens with the following statement of general principle:

"In general terms it may be said that if a professional man in independent private practice makes notes for his own guidance in advising his patient or client or in treating his illness or dealing with his affairs, those notes ordinarily become the property of the maker, nor is that the less true because he may be under a duty to his patient or client as to the use he may make of those notes."

Doctor Speller went on to address a number of special situations relating to hospital and specialist practice and the influence of United Kingdom legislation. At 157 he discussed property in radiologist's reports X-ray films and prints, and his tentative views do not accord with the present state of opinion in New South Wales. At pp159 to 161 he discussed questions relating to medical records, including hospital records contributed to by several practitioners, and in partnership practice. At 160-161 he said:

"Notes made by assistants and locum tenentes

Notes made by an assistant in medical practice or by a locum tenens in the course of his duties ordinarily become the property of his employer or principals."

The plaintiffs' counsel also referred me to "Law for the Medical Profession", Dix, Errington, Nicholson and Powe, Sydney 1988. All its authors have legal qualifications and Messrs Dix and Errington have associations with medical practice. At pp136-139 they address questions of ownership of medical records in various situations, and their essential view is that a medical practitioner in private practice owns a medical record which he has created, although fuller statement is required for records in public hospitals, private hospitals, corporations or government bodies, and for X-rays and consultant's reports.

35 Counsel also referred to Medical Law: Text with Materials 2nd ed, Kennedy and Grubb, London 1994. Professor Kennedy was then Professor of Medical Law and Ethics and head of the School of Law at King's College, London, and Mr Grubb was Reader in Medical Law also at King's College. Their expressions of view are related to United Kingdom practice and legislation. In Ch8 at pp610-611 they discussed and illustrated the difficulty of determining ownership of medical records prepared by a medical practitioner where the patient contracts with the clinic or institution in which the medical practitioner works. They said that there was no clear law on the terms to be implied, and expressed the classic view that ownership follows ownership of the paper used.

36 I was also taken to Law and Medical Practice, Skene, Sydney 1998 which contains the following paragraphs at 184 and 185:

"8.12 Medical records are generally owned by the treating doctor or the institution in which they were prepared: Breen v Williams (1996) 186 CLR 71; 138 ALR 259 (HCA) per Brennan CJ at CLR 80; ALR 264. The documents `remain the property of the professional': ibid. This is because the notes were prepared by the doctor or institution for their use in caring for the patient, rather than for the patient's use. There seems to be a limited exception in the case of some reports ordered by the doctor for the patient and paid for by the patient (or the patient's insurer) to help diagnose the patient's condition: for example, `X-ray photographs or pathology reports, the ownership of which [a patient] may well be able to claim': Breen at CLR 88; ALR 270 per Dawson and Toohey JJ.

8.14 Ownership of records also entitles the owner to dispose of them like any other asset, subject to an undertaking by the transferee to keep their contents confidential. Thus, if a doctor dies, the ownership of the medical files passes to the executor: Gummow J in Breen at CLR 127; ALR 300; citing Estate of Finkle 395 NYS 2d 343 at 344-5 (1977). Similarly, if the doctor retires and the practice is sold to someone else, that person may acquire the records with the rest of the doctor's `stock in trade', and may offer the patients the opportunity either to become patients of the new doctor or practice or to request that their records be sent to another doctor nominated by the patient.

8.15 Similarly, if a patient moves to another district or to another doctor, or wants the medical records for any other reason, the first doctor cannot be compelled to hand them over; that doctor owns the records and is entitled to retain them. The patient may, however, request a report of the contents of the records, for which the doctor may charge (the preparation of such a report is a Medicare item for which the doctor may claim reimbursement)."

37 Text writers appear to me to support the view that ownership of medical notes is determined by ownership of the paper on which they are made, and that ownership passes according to the intentions and acts of the owner. They do not discuss any situation which appears to me to be close to the present facts. In particular, experience relating to public or private hospitals which are themselves governed by medical practitioners appears to me to be distant from the present facts, because it is much easier in cases like those to impute to all concerned an intention that the institution is to own and control the medical records.

38 It is necessary to consider what intention it should be found that the plaintiffs had with respect to retaining ownership or transferring ownership of papers in the files. The finding must be based on the intentions to be imputed to the plaintiffs in the circumstances, as there is no expression of any actual intention. The circumstances which are relevant include the manner in which the plaintiffs dealt with the files, and also the manner in which medical practitioners dealt with them, the purposes for which they existed and their utility to one side and to the other.

39 The manner in which the files were dealt with was that each file was kept in a clinic for use in the business and professional services conducted in the clinic. Clinic staff had access to and wrote in the files for the purpose of recording formal details relating to patients, their treatment, medications and goods supplied to them, their charges and payment. The medical practitioners also had access to that information in the files, but they are unlikely to have made much use of it. Other papers in the files were obviously prepared for the purpose of use by medical practitioners for purposes in which the plaintiffs had no direct concern. The first example is the Examination Sheet, the form of which shows that it was brought into existence for the doctor to use, to write on, and to have available on the next occasion when the patient was seen. An Examination Sheet is a record of a kind which, to do his professional work properly, the doctor must make and keep, and the doctor has a duty to the patient and a professional responsibility to maintain the record while it remains useful, and to have it available when and if resort to it is needed for further treatment. In addressing the probabilities about what the plaintiffs and also the medical practitioners intended should happen to ownership of the Examination Sheets these circumstances seem to me to make it on the whole improbable that it was intended by both sides, and in particular that it was intended by the plaintiffs, that the plaintiffs should continue to own the Examination Sheets; the plaintiffs had, it seems to me, no real use for Examination Sheets on any proper basis while medical practitioners did have a real use for them.

40 While the first, second and third defendants have practised in clinics conducted by the plaintiffs they have continued, as they did before, to use in the course of practice paper supplied to them and make notes in files, call for the files when they wish to use them and be supplied with them to the plaintiffs' staff for filing and for action relating to payments. These defendants have not been subject to any controls by staff of the plaintiffs over their access to files for purposes relating to the affairs of patients, and the files have been available for use by other medical practitioners who worked in the clinics in some circumstances such as that the doctor who held the initial consultation was not in attendance when a patient wished to make a repeat appointment, or a patient presented without an appointment or at another clinic.

41 I cannot see any proper purpose which would be served if the relationship operated in such a way that the plaintiffs provided paper for doctors to use in their medical practices, doctors used it to create records which the doctors needed to have in the future, yet the plaintiffs continue to own the paper. Each piece of paper has been completely transformed in utility and value by the writing on it, and it would be a strange outcome indeed if the paper was supplied so that it would go through this process, and went through it, yet the plaintiffs should still own it. From the plaintiffs' point of view the paper is used up and gone, as much as the services they supplied to the doctors.

42 My view of the intention which as a matter of probability should be imputed to the original owner of the papers in the absence of any expression of intention is shaped by my overall view of the nature of the relationship to which I earlier referred. The paper was supplied to the defendants so that they could function as doctors; they could not function well and appropriately unless they owned the paper they were using and had a owner's legal right to control its disposition. My view of the probabilities is that it was intended by the plaintiffs that when an Examination Sheet was used by a doctor for the purposes of examining a particular patient, the examination sheet should become the property of the doctor. The Informed Consent form speaks, at some length, in terms of advice which it was appropriate for the medical practitioner to give the patient - including "by advising you of any potential problems much can be done to avoid complications." Then it speaks about potential side effects and about care of the medication, and gives advice which it would be appropriate for a medical practitioner to give to a patient. The consent expressed in the form and signed by the patient should be understood to be directed to the medical practitioner - "I confirm that I have read and understand the above information all of which was explained fully prior to my signing." That document too, when used, was also in my finding intended to become the property of the medical practitioner.

43 Also in the file Exhibit A is a pathology report relating to the patient but directed to the medical practitioner. In my opinion, in the absence of any indication of a different intention, reports of tests of this kind, for which the patient pays, directly or indirectly, are the property of the patient. They are directed to the medical practitioner, and although the patient is entitled to call for them and take them, until the patient does so the intention to be imputed to the patient is that they are to remain in the possession of the medical practitioner.

44 The last sheet in the typical file is a sheet headed ("Must be completed by the patient") with some personal particulars of the patient. It is also has a space for information about whether the patient is on medication. Finally, there is a space for office use with a record of medications prescribed on visits. The use intended for this piece of paper which should be understood from its terms leads me to the finding that it was not intended that ownership of this piece of paper should move away from the plaintiffs.

45 With respect to any one patient who was first seen by any of these defendants at any time, I am of the view that material in the patient files corresponding to the Examination Sheet and to the Informed Consent form is the property of that defendant, and that the defendant is entitled to possession of any report from a pathologist.

46 With respect to the telephone numbers the circumstances in which two of the defendants came to be using the telephone numbers are not well explained by evidence. In the first two weeks of August 1999 the clinics conducted by the plaintiffs in Brisbane and Adelaide were relocated and obtained new telephone numbers. Australian Momentum Health then made applications to Telstra for the old telephone numbers, and is now the subscriber for those two numbers for clinics at Norwood, South Australia, and at Upper Mt Gravatt, Queensland, which are conducted by Australian Momentum Health.

47 Doctor Condoleon caused about 12350 files to be removed from the plaintiffs' Brisbane and Gold Coast Clinic and took them to premises at Upper Mount Gravatt where he now conducts his practice; these premises had earlier been occupied by the plaintiffs, which left them within the previous two weeks and set up its clinic in the premises of Ashley & Martin in Brisbane City. The Upper Mount Gravatt Clinic is conducted by Australian Momentum Health and the telephone number formerly used by the plaintiffs there and recently surrendered is now connected to a telephone at the Upper Mount Gravatt Clinic. Doctor Condoleon does not have any interest in Australian Momentum Health and his relationship with it as a contractor is generally similar to the relationship he formerly had with the plaintiffs. Doctor Condoleon did not make any arrangements for the telephone number to be transferred.

48 Doctor D'Souza arranged for the removal of about 5500 files from premises in Albert Road where the plaintiffs had until recently conducted their clinic; the clinic there had closed and the operation was moved to premises of Ashley & Martin in Exhibition Street in Melbourne City. He sent the files to premises in St Kilda Road where he now conducts a medical practice.

49 On 17 August Dr D'Souza asked Telstra for access to telephone number 03 98792 which had until a short time earlier been used by the plaintiffs for their clinic at Albert Street, and had been given up by the plaintiffs at about the time the plaintiffs left the Albert Street premises. Doctor D'Souza arranged for his practice company to become the subscriber and for calls to that number to be diverted to his own mobile telephone.

50 The effect is that if patients or prospective patients know of the former telephone number for the Brisbane Clinic, from advertising or from business cards and stationery on which it has appeared, those persons will telephone the number wishing to contact the plaintiffs and will in fact make contact with Australian Momentum Health and its clinic. For all I know they may be given a full and clear explanation when they do so, but the use of the telephone number appears to me to be inappropriate because in a way it is use of the business methods, public presentation, get-up and reputation of the plaintiffs. I infer that similar events would follow if a person used the number which Australian Momentum Health has now obtained for its Norwood Clinic, or the number which Dr D'Souza's practice company has obtained for his clinic in St Kilda Road. In my view the conduct of defendants in taking up and using telephone numbers which until recently were used by the plaintiffs and must be widely known for their association with the plaintiffs is a form of passing-off and should be restrained.

51 Dr Wadan did not remove any files, and has not been shown to have used any telephone numbers formerly used the plaintiffs. It is difficult to understand why he was joined as a defendant at all. There does not seem to be any kind of case against him for adjudication.

52 Not all the files removed have been brought into existence since the plaintiffs began to conduct the clinics on or about 23 March 1998. For patient files prepared before 23 March 1998 the plaintiffs have not produced any evidence of substance establishing that they have acquired title to the files from whoever may have been their owner before then, and the plaintiffs do not have a right based on ownership of the files to any order under which they would recover possession of them. The plaintiffs are in my opinion entitled to protection of their possession of old files, even though the files may be the property of others, except against the first second and third defendants and in respect of documents owned by these defendants.

53 Where a patient first consulted one of the defendants that defendant is entitled to have possession of the Examination Sheets Informed Consent forms and pathology reports. Where another doctor later saw the same patient and, as is likely, wrote on the same sheet or perhaps added other sheets, the question whether ownership of papers passed to the other doctor in its turn depends on the intention of the doctor who was first consulted. Ownership would not leave that doctor unless that doctor so intended. If a medical practitioner saw another medical practitioner's patient in the character of a locum tenens or to meet some situation where the first doctor was not available, or where the patient attended at a place where the first doctor was not in attendance and a fax copy was sent there, it is not probable that it was intended that ownership of the medical records should change. On the other hand if a patient was in some way definitively referred from one doctor to another in the contemplation that the first doctor would no longer see the patient and control of the medical records would pass it might be right to infer that it was intended that ownership would also pass. There is no evidence dealing with particulars of any such cases, the subject is speculative and in any event the first doctor would have a better right to the documents than the plaintiffs.

54 For these reasons I am prepared to make injunctions restraining use of the telephone numbers. I am also prepared to make orders appointing a referee who is to examine all the files in question and allocate the files, or parts of the files, to the person entitled to each sheet in accordance with the views I have expressed. I would hope that the parties could carry out the process by agreement, but the remedy available is a reference under Part 72. Counsel should submit draft minutes of an order and nominate a suitable referee.

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LAST UPDATED: 24/09/1999