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The impact of this case on ATO policy is discussed in Decision Impact Statement: Primary Health Care Ltd v Commissioner of Taxation (Published 4 July 2011).
PRIMARY HEALTH CARE LIMITED v FC of T
Judges:Stone J
Court:
Federal Court, Sydney
MEDIA NEUTRAL CITATION:
[2010] FCA 419
STONE J
Introduction
1. These reasons concern six separate applications appealing under Part IVC of the Taxation Administration Act 1953 (Cth) (Administration Act) in respect of objection decisions made by the respondent, the Commissioner of Taxation. The Commissioner disallowed the objections of the applicant, Primary Health Care Limited made in respect to income tax assessments deemed to have been made by the Commissioner for the years of income ending 30 June 1999 through to 30 June 2004.
2. Primary Health Care Limited (PHC) is a public company whose shares are listed on the Australian Securities Exchange (ASX). At all material times it was the sole beneficial owner of all issued units in the Artlu Unit Trust (Trust) of which Idameneo (No 123) Pty Ltd was the trustee. The issues in the present applications arise out of the purchase by Idameneo of certain medical and dental practices and concern whether it is entitled to claim income tax deductions arising from its acquisition of copyright interests as part of its purchase of the practices. If these deductions were to be allowed the net income of the Trust would be reduced and therefore the assessable income of PHC.
3. Because of the substantial similarity in the fundamental issues for determination in each of the applications made by PHC, the six proceedings have been consolidated and were heard together. The brief summary of each proceeding given below is taken from the Commissioner's outline of submissions.
Proceeding VID 911 of 2005
"PHC lodged its return for the 1999 income year on 24 January 2000. It included in its assessable income the amount of $7,929,138, being distributions of the Artlu Trust. By a notice of objection dated 19 December 2003, PHC objected against the assessment deemed to have been made on 24 January 2000, claiming that its taxable income should be reduced.
Proceeding NSD 1790 of 2005
PHC lodged its return for the 2000 income year on 6 February 2001. It included in its assessable income the amount of $8,675,111, being distributions of the Artlu Trust in the amount of $7,787,690, and distributions of the Sydney Diagnostic Services Unit Trust ("SDS Trust") in the amount of $887,471. By a notice of objection dated 13 July 2004, PHC objected against the assessment deemed to have been made on 6 February 2001, claiming that its taxable income should be reduced in respect of the distributions of the Artlu Trust and the SDS Trust.
Proceeding NSD 2169 of 2005
PHC lodged its return for the 2001 income year on 14 June 2002. It included in its assessable income the amount of $13,574,609, being distributions of the Artlu Trust in the amount of $9,122,065, and distributions of the SDS Trust in the amount of $4,452,544. By notice of objection dated 13 July 2004, PHC objected against the assessment deemed to have been made on 14 June 2002, claiming that its taxable income should be reduced in respect of the distributions of the Artlu Trust and the SDS Trust.
Proceeding NSD 2467 of 2005
PHC lodged its return for the 2002 income year on 13 December 2002. It included in its assessable income the amount of $18,333,563, being distributions of the Artlu Trust in the amount of $12,516,956, and distributions of the SDS Trust in the amount of $5,816,607. By a notice of objection dated 13 July 2004, PHC objected against the assessment deemed to have been made on 13 December 2002, claiming that its
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taxable income should be reduced in respect of the distributions of the Artlu Trust and the SDS Trust.Proceeding NSD 195 of 2006
PHC made a choice to form a consolidated group for income tax purposes under Pt 390 of the Income Tax Assessment Act 1997 … with effect from 1 July 2002. From that date, the Artlu Trust and the SDS Trust became subsidiary members of PHC's corporate group. PHC lodged its return for the 2003 income year on 31 March 2004. It included in its taxable income the amount of $26,619,671 an amount which it now claims to have been incorrectly included as taxable income. By a notice of objection dated 13 July 2004, PHC objected against the assessment deemed to have been made on 31 March 2004, claiming that its taxable income should be reduced.
Proceeding NSD 193 of 2006
PHC lodged its return for the 2004 income year on 11 January 2005. It included in its taxable income the amount of $38,169,081 an amount which it now claims to have been incorrectly included as taxable income. By notice of objection dated 15 April 2005, PHC objected against the assessment deemed to have been made on 11 January 2005, claiming that its taxable income should be reduced."
4. Pursuant to O 29 r 2 of the Federal Court Rules the Court has ordered that certain preliminary questions be separately tried and decided before the remaining issues arising under the applications. The applications involve contracts for the sale of approximately 300 medical practices. In the course of pre-trial preparation the parties agreed and, on 7 August 2007, the Court ordered, that the preliminary questions be determined in relation to a representative sample of the contracts in issue, pursuant to which Idameneo acquired the practices of identified general medical practitioners and one dental practitioner. In broad terms the preliminary questions concern issues pertaining to whether the applicant is entitled to claim deductions with respect to intellectual property rights, namely copyright in patient records, allegedly acquired by it. The preliminary questions do not address the trust issues and the consolidation issues.
Factual background
5. By way of background it is necessary to understand something of the nature of PHC's business and its development. The following overview is drawn from the applicant's amended outline of submissions filed on 22 May 2009 supported by the affidavit evidence (uncontested on these issues) of PHC's managing director, Dr Edmund Bateman and its chief technology officer, Mr Matthew John Bardsley.
6. Before PHC listed on the ASX in 1998, it had opened a number of medical centres in New South Wales. Within the years of income relevant to the determination of the preliminary questions it opened additional medical centres in New South Wales, including in Campsie, Castle Hill, Fairfield, Leichhardt, Mount Druitt, Wentworthville and Wyoming. At the beginning of 2009, PHC had approximately 43 large-scale medical centres and 45 smaller medical centres in all States and Territories with the exception of Tasmania and the Northern Territory.
7. Initially, PHC's medical centres offered mainly general practitioner services. Subsequently, additional medical and ancillary services were offered including dentistry, pharmacy, radiology, physiotherapy, podiatry and multiple specialist services. A feature of the PHC centres is that patients cannot make appointments. If they wish to see a particular doctor they can wait until that doctor is available. Otherwise they are seen by whichever doctor is available at the relevant time. Under this arrangement it is necessary for each doctor at the medical centre to have access to all the patient records held at the centre. In addition, certain of PHC's management, information technology and archive personnel have access to the patient records held in every PHC medical centre.
8. At first PHC established a standardised hard-copy (paper) system of patient records throughout its medical centres. In 2000 it introduced a computerised record-keeping
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system known as the "Medtech computer system" which, by 2002, was in all PHC medical centres. The Medtech system was used to store patient records electronically so that they could be easily accessed and reproduced by different doctors at any one centre and by PHC management. There were apparently, some differences in respect of dental records but it is not necessary to consider those differences at this point.9. Part of PHC's business strategy is to purchase, through the Trust, established medical practices in the areas in which, or near which, it intends to open a medical centre. In addition to entering into a sale agreement Idameneo also entered into a contract with the relevant general practitioner (practitioner contract) or, if that practitioner had incorporated his or her medical practice, with the relevant practice company. It is clear from the evidence that both the sale agreement and the practitioner contract were integral to the arrangement for the acquisition of a practice by PHC. Dr Bateman was quite clear that PHC would not have entered into one without the other.
10. The practitioner contract obliged Idameneo to provide services and facilities necessary for the practitioner to practise medicine from the relevant PHC centre. It obliged the doctor to render medical services (or the practice company to ensure that the doctor rendered the medical services) from that centre for a specified period. In each case, either the practitioner contract or the sale agreement stipulated that the doctor was not an employee of PHC. In the four cases where the practitioner had incorporated the medical practice the practitioner contract was with the practice company. In two of those cases there was also a Performance Guarantee whereby the doctor guaranteed that the practice company would carry out its obligations under the practitioner contract. On or about the time of completion of the sale the sample doctor commenced work in a PHC medical centre and the patient records from the sample practice were taken in some form or other to the PHC centre and were used in that centre.
Refining of issues at the hearing
11. The Court orders referred to at [4] above applied to the contracts for the sale of 23 practices (being 22 medical practices and one dental practice) however, in its written submissions, PHC stated that it would not be pressing any claim that copyright or copyright of any material value was acquired in respect of the acquisition of the medical practices of the following general practitioners:
- (i) Dr Duraid Salem Haddad;
- (ii) Dr Victor Robert Goleby Critoph and VR Critoph Pty Ltd;
- (iii) Dr Michael Roy Wunsh and MR Wunsh Pty Ltd;
- (iv) Dr Jeremy Kai Sing Lee and Jeremy Lee Pty Ltd;
- (v) Dr George Abouyani;
- (vi) Dr John Frank Perica;
- (vii) Dr Mukteshwar Prasad Singh;
- (viii) Dr Kheang Chheang Heang;
- (ix) Dr Emerlita Merlie Gallardo and JM Gallardo Pty Ltd; and
- (x) Dr Umesh Chandra Kamkolkar and UC Kamkolkar Pty Ltd
12. PHC also elected not to press any claim that copyright or copyright of any material value was acquired in respect of the acquisition by Sydney Diagnostic Services (NSW) Pty Ltd of any medical practices. The effect of these decisions is that in respect of the acquisitions from the doctors listed in [11] and the acquisitions by Sydney Diagnostic Services (NSW) Pty Ltd, there is no effective challenge to the Commissioner's objection decisions. It follows that the preliminary questions in respect of these acquisitions should be answered as proposed by the Commissioner.
13. The preliminary questions in proceeding NSD 195 of 2006 (in respect of the 2003 tax year) were amended to remove any reference to Dr Thakur Niranjan Panwar and those in proceeding NSD 193 of 2006 to remove any reference to Dr Bharati Anilkumar Mundkur. Furthermore the preliminary questions in all six proceedings were amended to remove the reference to the amount of each deduction claimed in accordance with the agreement of the parties that the valuation issues were not be
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dealt with at the hearing of the preliminary questions but were to be postponed for later consideration.14. PHC's decision not to press some of the claims made in the individual applications left for consideration the sale of 12 practices (the sample practices). One of the sample practices, that of Dr O'Shannessy, was a dental practice, the other eleven were medical practices. Unless otherwise indicated, in these reasons, reference to the sample practices includes the dental practice. The table in Schedule 1 to these reasons identifies for each sample practice, the relevant proceeding and year of income, the parties (other than Idameneo) to the sale agreement, the date of the sale agreement and the date on which each doctor (sample doctor) commenced working in a PHC Medical Centre. The table in Schedule 2 sets out the key features of the agreements for the sale of the sample practice. These are discussed in more detail later in these reasons.
The legislation
15. The legislative provisions relevant to PHC's claims are:
- • Division 373 of the 1997 Act in relation to the income years ending 30 June 1999, 2000 and 2001. This provision applies in relation to copyright acquired on the purchase of the practices of Sample Doctors di Michiel, Galati, Urquhart, Tang, Fitch, Parissis and O'Shannessy.
- • Division 40 of the 1997 Act in relation to the income years ending 30 June 2002, 2003 and 2004. This provision applies in relation to copyright acquired on the purchase of the practices of Sample Doctors Ginnane, Panwar, Lyons, Sabag and Mundkur.
At a general level Division 373 and Division 40 both permit a deduction for depreciating or writing off an interest in copyright that was acquired and used or available for use, in the course of carrying on a business and producing assessable income. In relation to any copyright acquired on the purchase of Dr di Michiel's practice, the provisions of Division 10B of the Income Tax Assessment Act 1936 (Cth) (1936 Act) must also be considered because that practice was acquired in 1996. This was before Division 373 commenced, however, the transitional provisions of the Income Tax (Transitional Provisions) Act 1997 (Cth) (Transitional Act) apply to bring the acquisition under Division 373.
Division 10B of the 1936 Act and the Transitional Act
16. Section 124L(1) of Division 10B provides that the Division applies to the "owner of a unit of industrial property" who incurred capital expenditure on the purchase of that unit and has used the unit (or the subject matter to which it relates) for the purpose of producing assessable income in the year of income or a previous year of income. The definition of a "unit of industrial property" in s 124K includes the rights under Australian law of the owner or licensee of copyright and equitable rights in respect of copyright. An owner to whom the Division applies is entitled to deduct an amount equal to the residual value of the unit divided by the number of whole years in the effective life of the item.
17. Section 124S(1) of Division 10B provides for the determination of the residual value of a unit of industrial property as follows:
"Subject to this section, the residual value of a unit of industrial property at any time in relation to the owner of the unit shall, for the purposes of this Division, be ascertained by deducting from the cost of the unit to the owner the sum of:
- (a) any deductions allowed or allowable under this Division in respect of the unit in assessments in respect of income of the owner of a year or years of income which ended prior to that time; and
- (b) the consideration receivable by the owner in respect of any disposal by him of the unit in part prior to that time."
18. Depreciation of the capital investment in intellectual property begun under Division 10B may be continued under Division 373 pursuant to the provisions of the Transitional Act. The provisions of Division 10B and the Transitional Act are relevant to PHC's claim for a deduction in the 1999 year of income arising out of the acquisition of the medical practice of Dr di Michiel in 1996. At the end of the 1998 year of income (that is after allowing for any deduction for that year) the residual value of any copyright acquired on the acquisition of Dr di
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Michiel's practice becomes the unrecouped expenditure on that copyright for the 1999 year of income; Transitional Act s 373-10.Division 373 of the 1997 Act
19. Division 373 is entitled 'Intellectual property'. For present purposes, there is no material difference between the definition of a "unit of industrial property" under Division 10B and an "item of intellectual property" under Division 373; s 373-15. The Division applies to assessments for the year ending 30 June 1999 and later years. The guide to Division 373 states:
"This Division creates a capital allowance for expenditure on an item of intellectual property that you use (or have used) for the purpose of producing assessable income."
20. To obtain a deduction under Division 373 for expenditure on an item of intellectual property, an entity must have used the item or "the invention, design, work or other subject matter to which the item relates" for the purpose of producing assessable income; s 373-10(1). The deductible amount is equal to the "unrecouped expenditure on the item at the end of the current year divided by the number of income years from the start of the current year to the end of the item's effective life"; s 373-20.
Division 40 of the 1997 Act
21. Division 40 applies to income years ending 30 June 2002 and later. The definition of intellectual property in s 995.1 is the same as in s 373-15. Section 40-15 includes the following as objects of Division 40:
- "(a) to allow you to deduct the cost of a depreciating asset; and
- (b) to spread the deduction over a period that reflects the time for which the asset can be used to obtain benefits …"
22. Subject to exceptions not presently relevant, a depreciating asset is an asset "that has a limited effective life and can reasonably be expected to decline in value over the time it is used"; s 40-30(1). Items of intellectual property are specifically included as depreciating assets; s 40-30(2)(c).
23. The amount of a deduction is determined with respect to the decline in value of a depreciating asset for the relevant income year; s 40-25. The section provides for a reduction in the amount of the deduction where the asset is used other than for a taxable purpose. A taxable purpose includes the purpose of producing assessable income; s 40-25(7). The Division provides for the determination of the amount that the owner is taken to have paid "to hold a depreciating asset". Given the scope of the revised preliminary questions, which are set out below, it is not necessary to consider those provisions at this stage.
The preliminary questions
24. The preliminary questions all take the form of asking in respect of each sale of practice agreement (a) whether in consequence of the sale of practice agreement, Idameneo holds rights as the owner of copyright comprising an item or items of intellectual property within the relevant legislation; and (b) if so, whether Idameneo was entitled to a deduction in the relevant year of income under s 373-10(1) of the 1997 Act?
25. The result of the decision not to press some claims is that there remain for decision 12 separate two-part questions. Omitting reference to the amount of any deduction, I have adopted the applicant's summary of the questions:
- "(a) In consequence of each of the following agreements, did Idameneo hold rights as the owner of copyright comprising an item or items of intellectual property within the meaning of s 373-15 of the 1997 Act:
- 1. Sale of Practice Agreement dated 16 September 1996 between Idameneo and Peter Umberto di Michiel;
- 2. Sale of Practice Agreement dated 13 August 1998 between Idameneo and Joseph Galati and Reyima Pty Limited;
- 3. Sale of Practice Agreement dated 5 May 2000 between Idameneo and Ronald Stephen Fitch;
- 4. Sale of Practice Agreement dated 24 February 2000 between Idameneo and Ton Kuawn Lee, Siam Nai Tang and Lee & Tang Pty Ltd;
- 5. Sale of Practice Agreement dated 19 October 1999 between Idameneo and Peter William Urquhart Pty Ltd and Moremint Pty Ltd;
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6. Sale of Practice Agreement dated 30 June 2000 between Idameneo and John Parissis;- 7. Sale of Practice Agreement dated 2 August 2000 between Idameneo and Kieran O' Shannessy and Dr Kieran O'Shannessy Pty Limited.
- (b) If yes to question (a), in respect of each such item of intellectual property was Idameneo entitled to a deduction under s 373-10(1) of the 1997 Act …:
- 1. in respect of (a)(1) and (2) for the year of income ended 30 June 1999;
- 2. in respect of (a)(3) to (5) for the year of income ended 30 June 2000;
- 3. in respect of (a)(6) and (7) for the year of income ended 30 June 2001.
- (c) In consequence of each of the following agreements, did Idameneo hold copyright which constituted a depreciating asset or depreciating assets within the meaning of s 40-30(2) of the 1997 Act:
- 1. Sale of Practice Agreement dated 11 January 2000 to between Idameneo and AC Ginnane;
- 2. Sale of Practice Agreement dated 7 November 2002 between Idameneo and James Lyons;
- 3. Sale of Practice Agreement dated 15 July 2002 between Idameneo and Promila Singh Panwar;
- 4. Sale of Practice Agreement dated 27 October 2003 between Idameneo and Juan Sabag;
- 5. Sale of Practice Agreement dated 12 February 2004 between Idameneo and Anilkumar Manjunath Mundkur.
- (d) If yes to question (c), in respect of each such depreciating asset was Idameneo entitled to a deduction under s 40-25(1) of the 1997 Act …:
- 1. in respect of (c)(1) for the year of income ended 30 June 2002;
- 2. in respect of (c)(2) and (3) for the year of income ended 30 June 2003;
- 3. in respect of (c)(4) and (5) for the year of income ended 30 June 2004."
Onus of proof
26. Pursuant to s 14ZZO of the Taxation Administration Act 1953 (Cth), the Commissioner expressly puts PHC to proof of all facts upon which it seeks to rely to establish that the assessments which are the subject of these proceedings, are excessive; see
McCormack v Federal Commissioner of Taxation (1979) 143 CLR 284 per Jacobs J at 314 and Gibbs J at 303.
27. In
Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81 at 89, Mason J (dissenting) expressed the view that there was no statutory requirement for the Commissioner to provide evidentiary support for his assessment. In
Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 624-5, Brennan J, (with whom Mason CJ, Deane, Dawson, Gaudron and McHugh JJ agreed) accepted the view that Mason CJ had expressed in Gauci. In contrast, however, the taxpayer is required to establish the facts relied upon to displace the Commissioner's assessment especially since the facts concerning the taxpayer's income are peculiarly within the taxpayer's knowledge:
Trautwein v Federal Commissioner of Taxation (1936) 56 CLR 63 at 87 per Latham CJ.
Issues
28. The issues raised by the preliminary questions are:
- 1. Whether copyright subsists in the patient records or any part of the patient records of the sample practices acquired by Idameneo and, if so, who owned the copyright prior to the sale.
- 2. Whether Idameneo, pursuant to a contract between it and the vendor, acquired ownership (legal or equitable) of any such copyright, or a licence to use any such copyright. This issue involves the construction of the relevant sale agreement including whether the agreement is subject to an implied term. It may also involve construction of the relevant practitioner contract.
- 3. Whether Idameneo gave any consideration for any acquisition of copyright from a vendor and whether any such consideration was monetary.
-
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4. How, if at all, was any such copyright used or available for use by Idameneo for the purpose of producing assessable income; and whether any works in which such copyright subsisted were used for that purpose? This involves a distinction between the use of copyright, the use of a work in which copyright subsists and the use of information in a work in which copyright is claimed.
Some general principles
29. Copyright subsists in original literary and artistic works pursuant to Part III of the Copyright Act 1968 (Cth). Relevantly, s 32(1) provides that the work must be "an original literary … work that is unpublished and of which the author was a qualified person". A qualified person is an Australian citizen or a person who is protected or resident in Australia; s 32(4). Section 35 of the Copyright Act provides that, subject to exceptions provided in the section, the author of the work in which copyright subsists is the owner of the copyright. For present purposes only the exception in s 35(6) is relevant. It provides:
"Where a literary, dramatic or artistic work to which neither of the last two preceding subsections applies, or a musical work, is made by the author in pursuance of the terms of his or her employment by another person under a contract of service or apprenticeship, that other person in the owner of any copyright subsisting in the work by virtue of this Part."
30. Section 10(1) of the Act defines "literary work" as including: "(a) a table, or compilation, expressed in words, figures or symbols; and (b) a computer program or compilation of computer programs". This broad definition expands the meaning of a "literary work"; it does not provide the basic or core meaning. For that, it is necessary to look to the long line of authorities in which this issue has been considered; see for instance
Exxon Corporation v Exxon Insurance Consultants International Ltd [1982] Ch 119, RPC 69;
University of London Press Limited v University Tutorial Press Limited [1916] 2 Ch 601;
O'Brien v Komesaroff (1982) 41 ALR 255,
Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty Ltd (1985) 84 FLR 101.
31. It is clear that the use of the word "literary" is not a reference to high-quality or style but rather to the fact that the work is expressed in print or writing;
University of London Press at 608 per Peterson J. The protection of copyright law is given to "the particular form of expression in which an author convey[s] ideas or information to the world";
Hollinrake v Truswell [1894] 3 Ch 420 at 424 per Lord Herschell LC, quoted with approval in
IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458 at [26] per French CJ, Crennan and Kiefel JJ. Their Honours emphasised at [28] that copyright protection focuses on the form of expression:
"Copyright does not protect facts or information. Copyright protects the particular form of expression of the information, namely the words, figures and symbols in which the pieces of information are expressed, and the selection and arrangement of that information. That facts are not protected is a crucial part of the balancing of competing policy considerations in copyright legislation. The information/expression dichotomy, in copyright law, is rooted in considerations of social utility. Copyright, being an exception to the law's general abhorrence of monopolies, does not confer a monopoly on facts or information because to do so would impede the reading public's access to and use of facts and information. Copyright is not given to reward work distinct from the production of a particular form of expression."
32. Copyright arises when a work is made. For the purposes of the Copyright Act the work is "made" when it is "first reduced to writing or takes some material form"; s 22(1). Material form includes any forms of storage of a work, whether or not that form is visible and whether or not it can be reproduced; s 10(1). Paragraph 28 of the explanatory memorandum to the Copyright Amendment Act 1984 (Cth) supports the view that storage in a computer memory by direct keying into the computer is sufficient to "make" a work within the meaning of s 22(1).
33. In IceTV the subsistence of copyright in the weekly schedule of television programs supplied by the Nine Network Australia Pty Ltd
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had been conceded by IceTV. Despite this concession the case has much to say of relevance to the questions of subsistence of copyright that arise in this proceeding. Indeed, in their joint judgment, Gummow, Hayne and Heydon JJ commented, at [95], that the concession made by IceTV appeared to have distracted attention from two fundamental principles of copyright law namely, authorship and material form. In particular their Honours remarked that the authors of the work in question had not been identified although there was no dispute that they were qualified persons. Their Honours emphasised, at [105], the importance of identifying the authors:"The exclusive rights comprised in the copyright in an original work subsist by reason of the relevant fixation of the original work of the author in a material form. To proceed without identifying the work in suit and without informing the enquiry by identifying the author and the relevant time of making or first publication, may cause the formulation of the issues presented to the court to go awry."
34. In
Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCA 44 Gordon J emphasised the centrality of authorship at [35]:
"[A]uthorship is central to the determination of whether copyright subsists. To suggest that copyright does not require the identification of authors where a work is sufficiently original (howsoever that question of originality is to be answered) puts the cart before the horse. It ignores the fact that it is the original work of an author or authors who contribute to the particular form of expression of the work and reduce the work to a material form that is the act giving rise to the statutory protection of copyright. The Applicants' approach appears to relegate the role of an author or authors in determining subsistence of copyright to some minor variable, useful only in '[showing] that an author is a qualified person' where the work is unpublished, establishing 'the duration of exclusive rights comprised in the copyright' of 'old works' 'where competing claims of ownership are made' or where 'doubt exists as to the identity of the work'. Such a contention is surprising and untenable. It is contrary to the express words of the Copyright Act and the copyright regime described by all judges of the High Court in IceTV 254 ALR 386."
35. Authorship and originality rank together as essential elements of copyright; it is necessary to prove both. The nexus between originality and authorship was clearly stated by French CJ, Crennan and Kiefel JJ in IceTV at [33]:
"Originality … requires that the literary work in question originated with the author and that it was not merely copied from another work. It is the author or joint authors who bring into existence the work protected by the Act. In that context, originality means that the creation … of the work required some independent intellectual effort, but neither literary merit nor novelty or inventiveness as required in patent law."
36. The Full Court of the Federal Court succinctly explained the concept of originality in
Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436 at [17], saying that the requirement was "directed not to originality of ideas but to their expression". As Latham CJ observed in
Victoria Park Racing & Recreation Grounds Company Limited v Taylor (1937) 58 CLR 479 at 498, it also does not give a person "an exclusive right to state or to describe particular facts". The comments of the Full Federal Court and Latham CJ are consistent with further observations made by French CJ, Crennan and Kiefel JJ in IceTV where, in the course of a discussion about standards of originality and creativity, their Honours commented at [48]:
"It may be that too much has been made, in the context of subsistence, of the kind of skill and labour which must be expended by an author for a work to be an 'original' work. The requirement of the Act is only that the work originates with an author or joint authors from some independent intellectual effort."
37. As these comments indicate, it is not sufficient, and in many cases it is probably not possible, to establish that a work is an original product of independent intellectual effort
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without identifying the author. The Copyright Act does not define "author" but it is accepted that the author is the person who brings the copyright into existence in its material form. This definition has its limitations especially where the products of relational databases are concerned; seeTelstra Corporation Limited v Phone Directories Company Pty Ltd at [29]-[30].
38. One further point must be made about the requirement of independent intellectual effort. Given that copyright protects the expression of an idea not the idea itself, it is necessary to bear in mind that the independent intellectual effort that is required to produce an original literary work must be effort directed to the expression of the idea. In the case of patient records, even the barest statement of a medical diagnosis, say "hypertension" or "urticaria", will have behind it considerable skill and expertise in reaching that diagnosis. Similarly the decision to prescribe certain medication is an exercise of the professional expertise of the doctor, however, merely writing the name of the medication, for instance "Amoxil" or "Adalat", in the patient record does not involve any effort directed to the expression of an idea. The medical expertise lies behind the formulation of the idea; it is not, however, directed to the expression of the idea.
Compilations
39. As already mentioned, the definition of a literary work included a compilation. A compilation may be an original literary work but only if it has been created through the exercise of skill and judgment; IceTV. An example of such a compilation is to be found in
Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465. The House of Lords found that a coupon designed to record football wagers was an original literary compilation involving considerable skill, judgment, experience and labour reflected in the way the coupon expressed and presented the chosen wagers for the eye of the customer; see Lord Reid at 470; Lord Evershed at 472; Lord Hodson at 477; Lord Pearce at 481. PHC has not contended that the patient records or any part of them are original literary compilations. This may be, as the respondent suggests, because a compilation of facts would not constitute an original work. In any event it is not necessary for me to consider further the question of compilations.
Works of joint authorship
40. The Copyright Act recognises the possibility of joint authorship. Section 10(1) provides that a "work of joint authorship" is:
"A work that has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author or the contributions of the other authors."
41. Works of joint authorship are dealt with in Division 9 of Part 3 of the Copyright Act. It provides in s 78 that a reference in the Act to the author of a work shall, in the case of a work of joint authorship be a reference to all the authors of the work. Thus s 35(2) when applied to a work of joint authorship provides that the joint authors own any copyright subsisting in the joint work. Where, however, one or more (but not all) of the joint authors is an unqualified person s 35(2) applies "as if the author or authors, other than unqualified persons, had alone been the author or authors, as the case may be, of the work"; s 82(1).
42. The applicant did not make any submission that the patient records or any parts of them are works of joint authorship. Presumably the applicant accepted that the patient records did not have the qualities required by the definition above, however, for completeness it is appropriate to make some comment on this issue; see below at [121]-[122].
Copyright in the sample doctors' patient records
43. The question of copyright in the sample doctors' patient records is the first of the issues identified at [28] above. PHC must show that copyright subsisted in part or all of the patient records of each sample practice and that the vendor was the owner of that copyright or had a transferable interest in that copyright. The general principles relating to the subsistence and ownership of copyright are brought into sharp focus in IceTV. The elements that,
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following IceTV, it is necessary for PHC to establish were formulated by the respondent in its written submission as being to:
- "(a) identify with precision the work or works in which it says copyright subsists (' alleged copyright work ') and the author of the alleged copyright work;
- (b) establish that the author of the alleged copyright work was a 'qualified person' for the purpose of the Act;
- (c) establish that the alleged copyright work is a 'work' for the purpose of the Act;
- (d) establish that the alleged is an 'original' work; and
- (e) prove the foundation of the vendor's claim to own that work (eg as an employer of the author)."
44. In
Breen v Williams (1996) 186 CLR 71 at 127, Gummow J commented that the composition of the medical records under consideration by the defendant, Dr Williams,
"may have involved the authorship by him of what, whilst not of literary quality, were nevertheless literary works for the purposes of copyright law."
It was not necessary in Breen v Williams for his Honour to decide the point and his Honour did not purport o do so. However his Honour's comments have been relied on by PHC as authority for the proposition that a medical (or dental) practitioner may have copyright in material authored by the practitioner and forming part of the practitioner's patient records.
45. As a statement of principle the proposition is, with respect, clearly correct however, whether copyright subsists in particular medical records can only be determined after careful examination of the records in question. As the extracts from the medical records tendered by the sample doctors show, there is considerable variety of style and content in the records in evidence in these proceedings. In this regard it is helpful to note the context in which Gummow J made the comment quoted above, namely Dr Williams' approach to record keeping which his Honour described at 117, as follows:
"It is the practice of the respondent to maintain a file with respect to each patient. Usually this will include handwritten notes containing a variety of information bearing upon such matters as the description provided by the patient of the patient's medical condition, the circumstances in which the patient was referred to the respondent, the respondent's notes of his observations upon examination of the patient and conclusions in relation thereto (including what the respondent called his 'medical musings' about the patient's condition), and communications with other practitioners treating the patient and with the family and friends of the patient. Further, where the respondent has reason to believe or suspect that there may be criticism of his treatment or advice, he keeps short notes of any information or developments which may bear upon any such future dispute. All of these notes are written in an abbreviated fashion which conveys meaning to the respondent but which might be difficult for others to follow."
46. The Commissioner has not conceded that copyright subsists in the patient records of the sample doctors and it is therefore necessary to consider the records of each sample practice. For PHC to show that copyright subsisted in the patient records of the sample practices it must not only identify the works in which it says copyright exists but must also show that those works were original literary works of identified authors who are qualified persons. These questions of subsistence and ownership of copyright in the patient records under consideration here must be addressed in respect of the records of each sample practice. The fact that the same principles apply in respect of each practice does not necessarily yield the same answer in each case. The individual circumstances pertaining to each practice must be considered.
Composition of the patient records in respect of which copyright is claimed
47. The documents kept on file in the sample practices for each patient include not only records created in that practice but also
ATC 10925
documents created by third parties and sent to the practice such as reports from specialist practitioners as well as procedural and test reports such as radiology and pathology reports. PHC does not assert its claims in respect of these third party reports.48. According to the written submissions of PHC the patient records in respect of which it claims copyright include, in respect of all the sample doctors other than Dr O'Shannessy, "a health summary sheet ("summary sheet"), consultation notes (including prescriptions for medicines) (collectively, "consultation notes") and specialist referral and other letters written in respect of the patient ("referral letters")". In some cases those records were paper records, generally handwritten. In some, the records were electronic, deploying software known as "Medical Director" and used mainly for prescriptions. In others they were a mixture of electronic and handwritten records. Given that PHC does not claim copyright in the documents referred to in [47], subsequent reference to patient records in these reasons refers only to the records in respect of which PHC claims copyright and not to the third party reports described above. PHC puts its claim in the strongest terms. In its written submissions it states in respect of both the medical and the dental records that the subsistence of copyright in these records is "uncontroversial".
49. PHC submits that, within the meaning of the Copyright Act, each referral letter is an original literary work. In relation to the summary sheets and consultation notes, its primary submission is that for each patient they comprise one original literary work however, in the alternative, it submits that they consist of separate original literary works. In relation to the patient records from Dr O'Shannessy's sample practice, PHC submits that the dental charts for each patient are original and/or literary works and the clinical treatment notes for each patient are original literary works.
50. PHC also submitted that copyright subsisted in the patient lists of each sample practice. Patient lists are mentioned only in PHC's written submissions. They are not referred to in PHC's Statement of Facts, Issues and Contentions or in the respondent's Appeal Statement. The respondent's Note of Issues in Dispute lists the question of whether the patient lists are original literary works as one of the issues. The respondent notes however that PHC had not produced any lists. At the hearing when I questioned senior counsel for PHC, Mr J W de Wijn QC, about his client's position on the point he said that PHC does claim copyright in the patient lists and was not abandoning that claim however
"… as a matter of substance the value lies in the patient records because … the efficiencies that are gained through the Primary Health model are gained through computerising the patient records and we would say that's where the real value lies."
51. Be that as it may, the fact is that PHC did not produce any examples of such lists, there was no evidence on the point and it was not addressed in submissions. As I have already pointed out the definition of a literary work includes a table or compilation which would seem, in principle, to cover patient lists, however without further evidence as to whether the other requirements for copyright have been met I am not in a position to make any finding on the issue.
Patient records from sample practices - the evidence
52. As previously mentioned, it is necessary to consider individually the evidence relating to the records of each of the sample practices in order to assess the claim that copyright subsists in those records and to determine the ownership of any copyright. Because many of the records, in particular the handwritten consultation notes, are difficult to decipher the transcriptions in the following summaries may not be entirely accurate, nevertheless in most cases the overall sense is sufficiently clear for present purposes. The following summaries relate to the consultation notes and health summaries for the sample practices. Prescriptions and referral letters are discussed separately below at [135] and [136] respectively.
Dr P di Michiel
53. Dr di Michiel is a general medical practitioner. An extract from his passport annexed to his affidavit of 19 December 2008, indicates that he is an Australian citizen and
ATC 10926
therefore at all relevant times he was a qualified person within the meaning of s 32 of the Copyright Act.54. As can be seen from the summary in Schedule 1 to these reasons, Dr di Michiel was the sole vendor of the sample practice to PHC. The sample practice was carried on at Jacob Street, Bankstown where he was in partnership with Dr Albert Cheung. In the period from 1977 to 1996 Dr Cheung and Dr di Michiel together employed 6 reception staff however they each had their own patients with whom they had individual consultations. There was no evidence of patient records authored in whole or in part by Dr di Michiel's former partner Dr Cheung. There were no other medical practitioners employed at the sample practice.
55. Dr di Michiel also was involved (with four others) in a medical practice at Rickard Road, Bankstown where he saw patients about one evening per week. This practice was not the subject of the sale to PHC and is distinct from the sample practice.
56. In the sample practice Dr di Michiel kept hardcopy records on cards which were about one-third the size of an A4 page and which were filed alphabetically. He instructed the reception staff that for each new patient they should record the patient's name, address, Medicare number, pension number, date of birth and marital status on a card. Dr di Michiel would add his consultation comments to that card. Dr di Michiel did not refer to the use of a health summary which was separate from the consultations notes and it would appear that the patient's medical history was recorded on the cards with the consultation notes.
57. Two examples of those hardcopy records, both in the form of handwritten consultation notes, were tendered in evidence. On cross-examination, however, Dr di Michiel emphatically denied that the record of di Michiel's patient No 1 was a record of a patient from his sample practice. He denied that the handwriting was his and was not able to identify the handwriting. I am satisfied that Dr di Michiel was speaking the truth and the Commissioner did not suggest otherwise. Consequently, no assistance can be gained from this record.
58. The second record described as di Michiel patient No 6, was accepted by Dr di Michiel as the record of one of his patients. The record consisted of consultation notes that extended over a long period. The patient first saw Dr di Michiel one week after birth in 1981 and the record continued to 1996, the last entry being dated 2 September 1996. A typical series of entries commencing with an entry made on 13 April 1982 give the sense of a developing picture of the patient's health and form a continuous narrative. The entries read:
"13/4/82 frequent wheezes - a little distressed - Dr Tonk [paediatrician to whom the patient was referred] - Ventolin 1½mls 6/24
Nuolin 6mls 6/2430/4/82 URTI - cough - no rhonchi - Drixine nose drops - … syrup 2/8/82 Developed wheeze yesterday - chest … rhonchi …Nuolin syrup … Ventolin … 31/8/82 Vomiting …. 6/9/82 Vomiting has settled - now diarrhoea … 6/1/83 Cough - URTI - wheeze - … syrup 20/1/83 URTI - acute wheezy bronchitis - Bactrim syrup - ventolin syrup…"
59. The notes appeared to be all in the same handwriting which Dr di Michiel identified as his handwriting. He added that, despite the patient not being named he knew which patient it was. Although brief and succinct the entries could have been expressed by another doctor quite differently.
Dr J Galati
60. 60 Dr Galati's sample practice was in Pittwater Rd, Manly. He bought that practice, including the medical records, in 1975 from Dr Brian Clarke. Dr Galati's patient records were kept in hardcopy form on cards, 9"x4" in size, and filed in alphabetical order under the patient's name. Dr Galati employed reception staff who would enter a new patient's details on
ATC 10927
the card. Those details included name, address, date of birth, Medicare number, any allergies and, in the case of elderly patients, the name and phone number of a contact person. Dr Galati said that his custom was to make notes on a patient's card during consultations.61. The respondent tendered 2 examples of patient records from Dr Galati's sample practice. These records, although kept in similar hardcopy form, were very different from those described above for Dr di Michiel patient 6. The handwritten record for the first patient (Galati patient 1) consisted of what were obviously 5 cards (or sides of cards). There were numerous date stamps - presumably corresponding to consultation dates. The handwriting varied from difficult to impossible to read and I could decipher only odd words such as, "Rt breast abscess"; "flu vac", "blood", "joint pains", "losing weight". The occasional longer entry could be read such as, "fell down steps at work" and "well for 6 years".
62. The handwritten record for Galati patient 5 was similar. Only two pages were tendered. The first page showed evidence of two different hands, one of which Dr Galati identified as that of Dr Blatchford. The other he could not identify but surmised that it was probably a locum engaged when he was on holidays. In any event it was not Dr Galati's handwriting. On the second page Dr Galati identified some of the handwriting as his but could not identify the other handwriting. That page contained two entries dated prior to Dr Galati moving to the PHC practice with the remainder of the entries being dated after the move which was in August 1998. The style of entry is similar (although somewhat more legible) than that in respect of Galati patient 1.
Dr P Urquhart
63. Dr Urquhart's sample practice, which he opened in January 1987, was at Castle Hill. In his affidavit sworn on 19 December 2008, Dr Urquhart said that initially he practised as a solo practitioner but at the time of the sale to PHC he had "recruited" ten other general practitioners to work in the practice.
64. The respondent tendered a copy of a practice agreement dated 9 May 1997, between one of the ten doctors, Dr Allan Mak, and Moremint Pty Ltd, a service company that provided services to Dr Urquhart and "other doctors". The agreement provides for Dr Mak to conduct his medical practice in the same premises as the sample practice and for Moremint to provide various services to facilitate the conduct of Dr Mak's practice. Clause 9 of that agreement stated that nothing in it should be construed as giving rise to "an agency, partnership or employer/employee relationship between the parties". There is no reference in the agreement to the patient records created by Dr Mak or to the copyright in those records. In cross-examination Dr Urquhart agreed that, with the exception of a trainee doctor, all the doctors who worked in his practice were engaged on similar terms to those for Dr Mak.
65. In his oral evidence Dr Urquhart attempted to fill the gap in the evidence stating that, after the sale of his sample practice to PHC, all the patient records, whether authored by him or by the other doctors, were transferred to PHC. He also said that whenever a patient requested a copy of part of their patient record he would decide whether to provide the copy without reference to the other doctors.
66. From 1987 to 1991 Dr Urquhart kept patient records in hardcopy form on green cards. He described the procedure as follows:
"I would instruct my receptionist to record at the top of the card a patient's demographic details, including his or her name, date of birth, address and contact phone number. Underneath this information, I would record notes of the consultation and other diagnostic information next to the date of the patient's visit. I would often record a summary of the patient's medical history and any allergies and medication on the very front card of their file and would simply add further cards as was necessary."
67. In 1991 when he moved to different premises in Castle Hill, Dr Urquhart began to use the record keeping system of the Royal Australian College of General Practitioners (GP System) which included a health summary sheet and consultation notes kept in a manila folder under the patient's name. Dr Urquhart described his use of the GP System as follows:
ATC 10928
"During a patient's first visit, it was my usual practice to make notes on the … health summary sheet of his or her relevant medical details including, but not limited to, his or her previous medical history, family medical history, any operations or any allergies that he or she might have and his or her current medications. I would then write the notes of the consultation, diagnosis and treatment on the patient's progress notes."
These records were kept in filing cabinets with the original "green card", any specialist reports, pathology and radiology reports.
68. As an example of the patient records in Dr Urquhart's sample practice, the applicant tendered a record of a patient referred to as Urquhart patient 5. The record consisted of a summary sheet and history followed by 17 pages of consultation notes made by the consulting doctor (generally, but not always, Dr Urquhart) interspersed by extracts from, or summaries of, reports from other doctors, probably specialists, which had been copied by the clerical staff into the record. A few short extracts will illustrate the point. The first page of the record has notes of 6 consultations with Dr Urquhart as follows:
"PU - 9/11/88 140/90 ↓ Inderal to ¼ (100) mane
When she went off them before she got too exhausted and developed palp
PU - 18/11/88 stop Inderal and change to Renitec 10mg ½ m. Still on Catapres …
Aim : to stop Catapres & …
PU - 23/11/88 160/100 ↑ increase Renitec say 10mg m to …mg day and ↓ Catapres to tm and tn
PU - 30/11/88 160/110 HS… ↑ Renitec to 20mg (2x10mg) and stop Catapres
PU 6/12/88 Attended W H… on Adalat 20mg bd & Tenormin x 1.
HS 160/95 11 am R Scan 12/12 and spec appointment 19/12
PU - 12/12/88 160/100 HS ✓ chest ✓"
69. Dr Urquhart confirmed that all the handwriting on this card was his. It appears from his identification of his handwriting and that of others that he typically preceded his entries on the records with his initials, (PU) and that other doctors generally adopted a similar practice. A few pages later in the record of the same patient there is the following:
"Pu - 17.1.89 140/90 HS✓
On Terormin …m adalat 20 mg bd
Report: Simon Roger 22.12.88 Double atenolol to 100mg daily - If her blood pressure does not come under control then double her nifedipine dosage also. Low protein diet
Pu - 9/2/89 140/90 HS ✓ Tenromin x …
Pu - 3/4/09 1 w ago severe bilat leg cramps.
140/90 HS ✓ Chest ✓ rev HW
Report J Stewart (Westmead Hospital) 18-4-89 - 'renal scan showed only that she had diffuse renal parenchymal disease, slightly raised serum calcium (2.8, 2.9 mmol/l) parathyroid hormone level, it too was slightly raised (1.23.mg/ml normal these two findings together do suggest primary hyperparathyroidism, which however must be mild'
Pu - 12/5/89 140/90 HS ✓ Adalat 20 mg TAB … bd
Tenormin … m"
70. The health summary for this patient listed "Penicillin, Lumotil, Stemitil" under the printed heading, "allergies". It also listed medications by name and dose. Under "Admissions" was written, "Hysterectomy - ov intact, Appx 75, Lumps L breast - benign". Another example of a health summary was annexed to Dr Urquhart's affidavit of 19 December 2008. It has only three entries: "hypocholesterolaemia", "mild sleep apnoea" and "on Beconase".
Dr S Tang
71. Dr Tang's sample practice, which she and her husband purchased in 1987, was at Nelson Street, Fairfield. At those premises she worked as a general practitioner in partnership with her husband, Dr Ton Kuawn Lee. In her affidavit affirmed on 13 February 2009 she stated that "As the practice got busier" they were joined by Dr Boon Soo Lee although she did not give a date. Dr Tang referred to Dr Boon Soo Lee as "an independent contractor" however, while this may have been her
ATC 10929
understanding of the relationship, there is no evidence on this point and Dr Tang's opinion does not establish the point.72. All doctors who worked at the sample practice adopted a standard procedure in creating and maintaining handwritten patient records. Those records consisted of the cards used by the doctor from whom Dr Tang and her husband purchased the practice, along with a consultation card manufactured by Optiplan and the GP system; see above at [67]. On a patient's initial visit the reception staff would enter on a card the patient's name, address, date of birth, contact telephone number, Medicare number and pension number if relevant. This card was then placed at the front of the new patient's file.
73. During the first consultation Dr Tang would note details of the patient's personal and family medical history, any allergies, smoking, alcohol consumption and medication. She would also record her diagnosis and treatment plan for that patient. Notes of subsequent consultations were entered in a similar manner on the same card. Patient records were stored in alphabetical order in a filing cabinet. Pathology, x-ray and specialist reports were stored in a separate file created for that purpose and marked with the patient's name. The records were not filed with the cards however, Dr Tang would note results from these reports onto the patient's card in red pen.
74. Examples of records from Dr Tang's sample practice were tendered in evidence. The first example, which was tendered by the respondent, was Tang patient 1. The same record, with additional pages, was annexed to Dr Tang's affidavit. On cross-examination, Dr Tang stated that this patient was seen mostly by her husband and only 10% of the time by her. The patient's first visit was at age 1 month in 1992 and the last notation was in 1999. The notes over this period consist mainly of brief notes of symptoms, diagnoses and the medications prescribed with the occasional more expansive comment about the patient's condition. For example the notes of the patient's first visit are: "1/12 old - c/o URTI, fever, oral thrush, sneezing" followed by the prescribed medication. Other typical examples from this patient's records are as follows:
"4.5.92 7 kg - growing well. On fresh milk and vitamins … 1.7.93 URTI - Rx Amoxil … 15.7.93 cough and wheezing, can't sleep at night, ronchi generalised … 15.2.94 URTI - tonsillitis Fever 38°C - chest ✓ - Rx Pen … 25.7.94 - Fever 38° Coughing 7 1/52 off food - generally unwell … chest ✓ ENT ✓ Rx Amoxil, Panadol"
75. Sample records of a patient known as Tang patient 4 were also tendered. In cross-examination Dr Tang said that this patient was also not one of her patients although the record came from her sample practice. This record appeared to have been written in several different hands but, in form, was similar to that of Tang patient 1.
Dr Fitch
76. Dr Fitch's sample practice was in Smithfield NSW where, from 1981, he was in partnership with Dr Jack Spillane. Dr Fitch and Dr Spillane each had their own patients in the sample practice. After Dr Spillane retired in 1990 Dr Fitch continued to carry on the sample practice as a sole practitioner. The evidence is not specific about what happened to Dr Spillane's medical records. The implication is that they remained with the sample practice and, presumably for those patients who continued to visit the sample practice, they were added to by Dr Fitch.
77. From time to time Dr Fitch engaged locum doctors on a sessional basis as needed. Dr Fitch's evidence of the locums' terms of engagement was vague. He could not recall whether he paid them holiday pay or superannuation although he said that tax was deducted from their pay. The respondent tendered a profit and loss statement from the sample practice for the year ended 30 June 1997 . The statement showed the amounts of $31,025 as "Locums Salary" for 1997 respectively. In a separate entry for "Salaries"
ATC 10930
it showed the amount of $60,835 for the same year. Dr Fitch agreed that the latter amount related to the salaries of the secretarial and administrative staff. The statement also showed an amount paid for "Superannuation contributions - employees" which the respondent suggested was also for the secretarial and administrative staff. Dr Fitch said he was unable to recall if this was so but volunteered that "It was all done according to law".78. Patient records at the sample practice were handwritten on small paper cards. They were created and maintained in a manner not materially different from that described above in respect of Dr Tang's sample practice with the exception that Dr Fitch said he had a regular practice at the end of each day, of writing more detailed notes of the consultations he had had that day. No examples of these more detailed notes are to be seen in the patient records that were tendered. Patient files were stored alphabetically.
79. Three examples of patient records from the sample practice were tendered. In the record for Fitch patient 1 the medical history listed four conditions and one medication. The handwritten consultation notes for this patient commence with an entry for 8 August 1983. The first page is reasonably typical although some parts are illegible:
"8/8/83 6.57 Ear Syringe
10/8/83 - 6.35
13.8.83 - 12.22 [illegible] (? Needs audiogram ? L ear ↓
19.8.83
7.9.88 … RTI Rx Ergenso … R ear syringe
3.10.89 Cholesteoma [sic] L ear ? (awaiting surgery) BREAK… [illegible] L ear ache - BP 130/88"
80. The handwritten consultation notes for Fitch patient 2 had entries made by several different hands. The handwriting is difficult to decipher however it is possible to discern notes of symptoms as well as of diagnoses and treatment. While the notes read as memory prompts rather than a narrative, they would undoubtedly have had meaning for the doctors making the notes.
81. As with patient 2 the consultation notes in the records of Fitch patient 4 appear to show entries made by several different hands. The entries are, however, more terse consisting, more often than not, of a brief note of diagnosis and medication.
82. The consultation notes of the sample practice record for Fitch patient 6 are similarly brief. The entries commence on 26 July 1996 and the last is dated 7 March 2000. The entries for the first 8 consultations consist almost entirely of blood pressure measurements and other test data. Throughout the 11 pages of the record there is the occasional comment such as "90 minutes of extreme vertigo" on 31 August 1998 and "mole check on back" on 28 July 1999. Overall the records consist largely of entries data.
Dr Parissis
83. In 1977 Dr Parissis commenced work as a general practitioner in two locations, Dulwich Hill and Belmore. After six months Dr Parissis was joined by a partner, Dr Alan Hor and together they shared the running expenses of the practice at these two locations but for the most part they saw their own patients. In 1996, the partnership was dissolved and thenceforth Dr Hor practised at Dulwich Hill and Dr Parissis at Belmore. Dr Parissis retained all medical records of the Belmore practice including the records of those patients who had previously consulted Dr Hor at Belmore. The Belmore practice (sample practice) was sold to Idameneo in 2000. In his second affidavit sworn on 24 May 2009, Dr Parissis said that he recognised that some parts of the consultation notes that were acquired by PHC were written by his former partner, Dr Hor.
84. Dr Parissis described the method of keeping patient records in the sample practice. From 1977 to some time in 1997 patient records were handwritten on cards which were approximately one third the size of an A4 page. Reception staff would record each new patient's name, address, date of birth, Medicare number and pension number on the top of a new card. During a patient's initial consultation Dr Parissis would check with the patient the accuracy of the information recorded by reception staff and also make a record of the patient's personal and family medical history.
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Consultation notes (including the date of the consultation) were handwritten on the cards which were then filed in alphabetical order.85. In 1997 or 1998, Dr Parissis began using the Medical Director software to issue prescriptions. Over a period (unspecified) in which Dr Parissis became more familiar with computers he increasingly used the computer to make electronic records of diagnoses and treatment and eventually he included the results of patient consultations with him. At the same time he continued to use handwritten cards. Dr Parissis annexed a copy of a handwritten card to his affidavit sworn on 23 December 2008. The copy is very difficult to read because of the quality of the copy and the handwriting. Sample records for four patients were in evidence. An extract from the record tendered for Parissis patient 1 is as follows:
"30/3/94 | Hep B (2nd) … vacc No complic with 1st vac | |
17/4/94 | 4/52 "Diarrhoea" - on SR no [illegible] 8/52 try Nutramigen … thriving well | |
28/4/94 | [illegible] | |
1/6/94 | Hib titre vacc - nasal cong - saline nasal tixylix [illegible] No further diarrhoea | |
15/6/54 | URTI S/S C° [illegible] Runny nose | |
16/7/94 | Triple Ag/Polio; no S/S | |
5/8/94 | Hib titre on S26 - doing ok | |
27/8/94 | cough [illegible] (Hep B) vacc - | |
19/9/94 | Triple Ag/polio Serum - wheezing Ventolin [illegible] | |
27/9/94 | C° [illegible] Hib titre (3rd)" |
86. The above extract is typical of the entries in the sample practice patient records in evidence for Parissis patient 1, 2, 3 and 4.
Dr O'Shannessy
87. Dr O'Shannessy's sample practice was a dental practice that he first opened in 1972 in Beames Avenue, Mount Druitt. In 1973 he moved to premises in what later became Westfield, Mount Druitt. He continued to practise in that Centre until August 2000 when he sold the sample practice to Idameneo. Dr O'Shannessy was a sole practitioner although he said that he occasionally "employed" other dentists to work for him. He estimated that at the time of the sale he had created records for approximately 20,000 patients.
88. The patient records were handwritten and kept on cards on which Dr O'Shannessy would enter identification details and relevant details of the patient's medical history. Dr O'Shannessy also recorded the date of the consultation, diagnosis and treatment on the card. Specialist and x-ray reports were attached to the cards which were filed in alphabetical order.
89. Dr O'Shannessy started using computer records in about 1979. The software he initially used was primarily to enable easy and efficient billing of patients. He commenced using the "ATS software system in about 1989 and said that by the early 1990s he was using "a sophisticated computer system to store all patient medical and dental information" alongside his paper card system. In 1995 he moved to "Dental for Windows" which, he said, "includes all my patient dental records". With this software Dr O'Shannessy is able to write his own notes directly into the computer as well as on paper cards. In 1995, or thereabouts, Dr O'Shannessy moved many of his older paper card records to microfilm. As a result of these changes by 1998 Dr O'Shannessy's patient records consisted of paper cards, microfilm records, electronic records as well as x-ray and specialist reports.
90.
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Dr O'Shannessy annexed to his affidavit of 19 December 2008 a sample of a paper card record and a sample of a computerised record. The card records have 4 columns of information being, the date, the treatment, the fee and the payment. While I have no doubt that the treatment recorded on the card would be meaningful to the dental expert, it is enigmatic to the lay person. What can be said, however, is that it consists largely of technical shorthand notations as in the following extracts for successive dates in 1995:"6/ MO CH
5/ DO CH FII/ LED / CAV
7/ MO CH
6/ MO CH/FLC
8/ OB CH/FLC/(…BL)
Cons re "cold sens + (?) bite high [illegible] Pt specifying 'old fill' (7) [illegible] + cold sens test → Rx watch Rx /6 + Scapol NV"
91. The computer record is, again to the lay eye, more expansive. A short extract from 8 October 2001 is sufficient to illustrate the style of the sample record:
"Further detailed explanation re residual infection periapical mesial root and need for intra-radicular A/B dressings and long term and also reassurance re long term A/B intra-rad is not like long term I/O.
Also re obstructed/closed apical sections of canals.
Rx Appts 1-2 mths apart for several visits
38 ML rci removed … MB; ML and pulp chamber led …fic/c'wool … 1 mD"
92. In his second affidavit sworn on 27 May 2009 Dr O'Shannessy referred to the records of two patients (O'Shannessy patient 2 and O'Shannessy patient 6) that have been tendered by the applicant. He stated:
"For each patient, I recognise that parts of the records were created during the course of my practice before it was acquired by Primary Health Care … and other parts of the records were created on behalf of Primary Health Care when the patient visited Mount Druitt Medical and Dental Centre …"
93. In relation to those parts of the records of O'Shannessy patient 2 and O'Shannessy patient 6 that related to his sample practice, Dr O'Shannessy said that some parts (not identified) were written by dentists "employed by me on a part time basis". They included three named dentists.
Dr A Ginnane
94. Prior to moving to the PHC centre, Dr Ginnane practised at Leichhardt in a practice that he purchased from Dr Eric Barber in 1984. All Dr Barber's existing medical records were included in the purchase. Initially he continued the paper card system of record keeping that Dr Barber had used however in 1984 he started to use the GP system described above at [67]. In about 1999 he started using the Medical Director software system to provide prescriptions and letters of referral to specialists. Dr Ginnane annexed to his affidavit of 19 December 2008 examples from his sample practice of a health summary sheet and 9 pages of consultation notes. The applicant also tendered sample patient records from three patients, Ginnane patients 1, 2 and 5. The respondent tendered a sample of the record of Ginnane patient 4. Dr Ginnane explained that the computer records for each of these patients had been destroyed after his move to the PHC centre having been transferred onto the PHC computer system.
95. In his affidavit sworn on 20 May 2009 Dr Ginnane said that Drs Barber, Weaver, Cox, Martine Walker and Irene Walker were employed by him at the sample practice which was at Perry Street, Leichhardt. Dr Ginnane testified that these doctors were paid wages each week. They were paid superannuation, holiday pay and long service leave, where appropriate. On the basis of that evidence I find that the doctors were employees and not independent contractors. Dr Ginnane was not sure whether the employer was Dr Ginnane personally or his company, A Ginnane Pty Ltd. It appears, however, from the taxation returns of both Dr Ginnane and his company that the doctors' salaries were paid by the company and, on the balance of probabilities, I find that the doctors were employed by the company.
96.
ATC 10933
The records tendered for Ginnane patient 1 extended for 256 pages and included consultation notes, letters to and from specialist doctors, prescriptions, pathology reports and x-ray reports. The specialist reports were mainly addressed to Dr Ginnane or Dr Martine Walker. Some were addressed to Dr Cox. The handwritten consultation notes showed evidence of entries in several hands, some of which are more legible than others. In cross-examination Dr Ginnane was questioned about the authorship of some entries. He was able to identify his own handwriting but, except for some instances of Dr Martine Walker's handwriting he was unable to identify other handwriting with any certainty. The handwriting in large parts of the consultation notes for this patient are difficult to decipher and only the odd word or phrase is legible. Doing the best I can, however, the following extract of successive consultations in 1994 (the rest of the date is obscured) is reasonably typical of the style of entry for this patient and for the other Ginnane patients:
"1 Cough continues but clearing with [illegible]
Headache
Chest ears2 loss of voice
wants to find cause of this as she gets it ea year
[illegible] feels it might be reflux
wants second opinion Luchese Five Dock → Vibramycin3 still sick dizzy drowsy Luchese next Wed (7/9)
120/80 [illegible] Chest Stemetil …4 PR 80 130/80 HS Chest Rulide
Mild Laryngitits [illegible]5. Neck pain → right arm J → L finger - winter coming on, cough, chest, ROM neck 45° [illegible]"
Dr Panwar
97. In July 2002, PHC purchased Dr Panwar's sample practice at Wyoming, New South Wales. Dr Panwar had acquired the practice, including the patient records, in 1982 from another practitioner, Dr Khanna. Dr Panwar did not employ any other doctors to work in the sample practice however, her husband who is also a general practitioner and had his own practice at Wamberal, New South Wales, held consultations two days per week at the sample practice. Similarly, Dr Panwar practised two days per week at her husband's Wamberal practice, the purpose of this arrangement being to give patients at both practices the option of seeing a female or a male doctor.
98. For two years after she acquired the sample practice Dr Panwar continued the system of record keeping that Dr Khanna had used. This entailed the use of cards on which Dr Panwar made notes during consultations. After two years, Dr Panwar modified the system slightly in order to tailor it to her "specific needs" however she did not describe the modifications.
99. At a patient's first consultation at the sample practice the reception staff would open a new file and record relevant personal information on a new card. This information included the patient's name, contact details, date of birth, occupation, Medicare number, marital status, blood group and whether the patient was privately insured, was a war veteran or a pensioner. The patient's personal and family medical history was entered by Dr Panwar during the first consultation. Reports received from specialists or in relation to pathology, were stapled to the record card or kept in a separate manila folder when they became more numerous. In 1998, Dr Panwar began issuing computer generated prescriptions using the Medical Director software however, patient records continued to be handwritten on cards.
100. Around 2000 Dr Panwar began using the GP system for keeping patient records. This is the same system used by Dr Urquhart and is described above at [67]. Dr Panwar said that she adopted a practice of highlighting medical conditions and other important details in different colours to assist in identifying information. In about 1998 she began to use the software program, Medical Director, to complete prescriptions. She also occasionally used it to write referral letters but not for consultation notes. Neither in her affidavit nor
ATC 10934
in oral evidence at the hearing, did Dr Panwar address the question of entries in the patient records that may have been made by her husband or by Dr Khanna. Similarly, there is no evidence as to whether Dr Panwar ever utilised the services of locum doctors.101. Dr Panwar annexed to her affidavit examples of the records she kept at the sample practice. Other examples were tendered by the respondent. Irrespective of the form of the record keeping, all examples of records from the sample practice were handwritten and difficult to decipher as well as being, generally, terse and monosyllabic. The records of both Panwar patient 1 and Panwar patient 2 appeared to have been written in several different hands. Some cards were almost entirely lists of data such as blood pressure readings and medications. The following example from the record of Panwar patient 2, with some gaps where the writing is illegible, illustrates the point:
"13 Feb 1981 BP 140/90 Script Inderal, Enduron
5 Mar 1981 BP 130/88 … Enduron, Inderal, Zadine, Panamax
21 April 1981 BP 120/86 … for Inderal , Enduron, Panamax ….
27 April [illegible]
25 May 1981 BP 120/86… for Inderal , Enduron, Panamax
25 Jun 1981 BP 140/90… for Inderal, Enduron, … Panamax
2 Jul 1981 flu … Amoxil, …. Panamax
[illegible]
31/8/81 BP 140/94 … for Inderal , Enduron, Panamax
1 Sept [illegible]
[date illegible] BP 124/80 …for Inderal, Panamax
Nov 1981 BP 132/84 …for Inderal, Panamax
10 Dec 1981 BP 112/72 … for Inderal, Panamax
12 Jan 1982 130/85, Doing well, Rpt Inderal, … Enduron, Panamax, next … ESR … electrolytes, … E.C.G. - …
15 Jan 1982 Blood sent - … for cold and headache
22 Jan 1982 Uric acid ↑ Triglyceride ↑ Rx Zyloprim 300mg x 30
12/2/82 [illegible]"
102. Throughout the records there could be seen a very few instances of slightly more extended comments recording the details of a consultation. For instance, in the records produced in respect of Panwar patient 1, the following comments could be discerned:
- • "Now c/o diarrhoea - possibly antibiotic induced
- • V upset about son - in jail - alcoholic
- • V upset about son - feels fluey
- • Urticaria appears to be in control [with] antihistamines and …"
Dr Lyons
103. From 1989 to 1997 Dr Lyons practised as a general practitioner in partnership with Dr Edmund Barbour from premises in Five Dock. Dr Lyons had purchased his share in the partnership from Dr Roper. After Dr Barbour retired in 1997 Dr Lyons continued in sole practice. When Dr Lyons joined the practice patient records were kept on cards however in 1990 the practice adopted the GP system of record keeping which uses a health summary sheet and separate consultation notes sheets; see [67] above. Dr Lyons' reception staff would fill in a patient's identification details and Medicare number on the health summary sheet. During the first consultation Dr Lyons would record the patient's medical history on the health summary sheet and make notes of any diagnosis and treatment in the consultation notes. Specialist notes and reports would be attached to the patients' files which were kept in alphabetical order in filing cabinets. From about 1997 Dr Lyons began using Medical Director software in conjunction with his paper records. His receptionist was instructed to type the patients' demographic details including their age, date of birth and address directly into the computer for the purpose of preparing prescriptions. He began to use the computer to write prescriptions from about 1998.
104. The patient records from Dr Lyons' sample practice showed evidence of having been written by more than one person. For
ATC 10935
instance, Dr Lyons agreed that the consultation notes for Lyons patient 3 had been written by 3 doctors including himself. An example of a typical page of entries in the consultation notes is as follows:
"25/6/02 Reports nausea much improved, although still gets Taking Losec … BD as was getting symptoms GORD in bed and needing to take milk in middle of night since operation Continue Losec BD - Raise head of bed - Avoid coffee tea … at night - Check LFTs
BP 146/90
Pulse 64 regular
Wt 79Kg
Abdo soft non tender no masses7/8/02 LFTs normal, BSL 4.2
Reports no nausea last 3/52
Now on Losec … daily
Wt 80 KG Appetite normal
BP 148/9423/9/02 Last 2/12 notices wheezy breathing if lies flat - associated with dry irritant cough. Says doesn't feel SOB
Pulse 80reg
BP 156/84 /palpated/44/
Chest clear20/10/02 No cough if on pillows - Has reduced Losec to … daily … to BD - CxR - Tritace 2.5 mg daily initially ½ daily
CxR Mild cardiomegaly Lungs clear
On Tritace 2.5 mg daily - 80 Kg
Has stopped using salt -
BP 152/90 - Tritace to 5 mg daily
No further wheezy breathing … [illegible]"
105. There were four health summary sheets annexed to Dr Lyons affidavit of 19 December 2008. In general they consisted of lists of the patient's previous and existing illnesses, medications and procedures as well as other details of the personal and family history.
Dr Sabag
106. Dr Sabag opened his sample practice in Nelson St, Fairfield in 1980. From 1980 to 2003 he practised in Fairfield as a sole general practitioner although occasionally he employed locum doctors. The practice was purchased by PHC in 2003.
107. Dr Sabag recorded and stored his patient records in accordance with the GP System; see [67] above. At the first consultation for each patient the reception staff would enter the patient's name, date of birth, address, phone numbers and Medicare number on the front of the file and on the top of the health summary sheet. During the first consultation Dr Sabag would enter details of the patient's individual and family medical history and current medical condition and current medication in the health summary. During consultations Dr Sabag would enter any diagnosis, recommended treatment and other relevant details on the consultation notes sheet which was then added to the patient's manila folder.
108. Dr Sabag annexed examples of a health summary and consultation notes to his affidavit. The health summary sheet contained lists of diagnoses (eg. tonsillitis), problems (appendix, gall bladder, prolapsed uterus, hernia etc) and medications (sulphur, penicillin, codeine etc). The handwritten consultation notes showed entries made by different hands with marked difference in the legibility of the handwriting, some entries being entirely indecipherable. Dr Sabag did not identify, and on cross-examination was not asked to identify, the different authors. Many of the entries consisted only of a reference to the medication prescribed or data such as a blood pressure reading. Others listed symptoms such as the entry for 12 November 1987: "puffy eyes, blurred vision, body ache BP 180/100". A small proportion of the entries were somewhat more expansive. For instance the entry for 7 June 1980 reads
"Laparoscopy → Massive adhesions
Condition explained - Advised against open surgery
Librax … B.D. Review 6/12"
Dr A Mundkur
109. Dr Mundkur's sample practice operated from premises in Victoria Road, Ermington. Dr Mundkur practised there as a general practitioner from August 1973 to February 2004. He stated that he worked as a sole
ATC 10936
practitioner however "the practice was owned and run in partnership with my wife, who is also a GP, and she worked part-time to assist me". The records of the sample practice were paper based. On a patient's initial visit to the sample practice the receptionist would open a new patient file having first asked the patient to fill in a general information form giving details such as name, date of birth, address, phone number, occupation, employer and next of kin or emergency contact details. At the first consultation Dr Mundkur would take a personal and family medical history and enter it and other pertinent details on the inside cover of the file.110. Dr Mundkur initially used 6x8 inch cards for his records but from 1995 onwards he used consultation notes sheets. In 2000, using the Medical Director software program, Dr Mundkur began to keep a record of prescriptions given to patients in electronic form. In "later years", in addition to keeping consultation notes in paper form, he expanded his electronic record keeping to include this information. Examples of Dr Mundkur's paper records, including consultation notes and a medication sheet, were annexed to Dr Mundkur's affidavit of 18 December 2008 however, the writing was almost completely indecipherable. This reflected not only the nature of the writing itself but, in some small measure, the quality of the copy that was provided. It was possible to see, however, that at least two entries in the 4 pages of consultation notes were not in the handwriting that Dr Mundkur identified as being his handwriting. In addition it was clear that for each consultation the notes generally consisted of one or two line entries in which a symptom or diagnosis was recorded often with a note of medication prescribed. In any event, the records were of little assistance in supporting a claim that copyright subsisted in the records.
111. Among the records tendered by the respondent were handwritten consultation notes in relation to a patient, known as Mundkur patient 4. The entries covered the period from April 1995 to late 2003. In these records although the writing was also difficult to read, it was possible to read parts of it. The following two extracts from the record of this patient illustrate both points:
"Apr 1995 [illegible] pain BP 140/90 [illegible] Discussed Path Reports, Medications, BGL level Adv regular medications & review - Script Zocor 20 mg … nocte
Oct 1995 Discussed path reports BP 145/90 … feeling well … Zocor 20 mg…
Dec 1995 BP 145/90 …[illegible] Path results satisfactory - Script [illegible]
April 1996 BP 150/95 Pt … feeling well → Tab Zocor 20 mg [illegible]
April 1996 Cholesterol 5.7 Trigly 2-3 BGL fasting 7.7 pp 7.1 Counselling adv ↓ [illegible]… BP 150/85 [illegible] Counselling re hypo management
July 1996 - URTI 1/52 Throat [illegible] Ronchi & mucus … Tab … 300 mg … daily
July 1996 - Not seen
July 1996 - Feeling better Throat [illegible] ↓ BP 145/90 [illegible]…
Sept 1996 - BP 150/90 [illegible] feeling well - Scripts
Nov 1996 - c/o pain in leg [illegible] claudication type o/e no calf tenderness → [illegible] BP 150/90 [illegible]Counselling - ? peripheral vascular disease Pt still smoking adv arterial scan
… 1996 - Arterial scan - extensive diffuse atheroma/narrowing throughout common femoral, superficial femoral and popliteal artery - counselling at length
****** Dec 2001 (H/V)… Discussed path results HbA/C 6.6%… cholesterol 6.6 Trigl 2.2 HDL 1.3 LDL 4.3 - Counselling - pt wishes to try diet control x 3/12 - discussed - repeat lipids/HDL in March 2002 -
6/7 hiccups: ? cause Rx [illegible] Stemetil - goes in drinks*
… 2002 …. 6/52 … Heartburn - BP 140/80 … epigastric tenderness → tab … review
March 2002 (H/V) hiccoughs - settled [illegible] ✓ 140/80 [illegible] fall 4/3/02 -
ATC 10937
abrasions (L) temporal region. Bruising of arm - counselling. alcohol consumption ++ discussed.April 2002 (H/V)… good [illegible] feeling well - discussion re leg prothesis - script
June 2002 (H/V) good 140/80 … ref to Dr NI re prothesis - letter - medical form completed re carer allowance."
[*the entry in italics appears to be in a different handwriting from the other entries]
112. The applicant also tendered some examples of records from Dr Mundkur's sample practice being records for patients identified as Mundkur patient 3 and Mundkur patient 6. The records for Mundkur patient 3 appeared to have been written in Dr Mundkur's handwriting however those for Mundkur patient 6 showed evidence of a number of different hands. The entries for both patients (including the summary sheets) were largely one or two line entries similar in style to those extracted above. In his affidavit of 25 May 2009, Dr Mundkur stated that he recognised that some parts of the patient records that were tendered by the applicant were written by his wife, Bharati Mundkur "or possibly one other doctor whose handwriting I cannot recognise". On cross-examination by Mr Moshinsky Dr Mundkur also identified some handwriting in the consultation notes as being that of Dr Raja Gopal, a cardiologist, who worked on a sessional basis in the sample practice seeing patients with cardiology problems.
Referral letters and prescriptions
113. Examples of prescriptions from some, but not all, of the sample practices were tendered at the hearing. All examples were similar in style, stating, as one would expect, only the medication, the dosage and directions for use. Two examples of prescriptions, which are typical of those tendered in evidence, will suffice. The first example is from Dr Lyons and is dated 27/05/2002. It is a computer generated prescription, presumably using the Medical Director software:
AUTHORITY No 00072505 | |
Dr James H Lyons | |
7 Garfield Street, Five Dock 2046 | |
PRES. NO - 650194 | Ph: 9713 6363 |
[patients name obscured] | |
RENITEC 20 TABLET 20 mg | |
1 b.d. ½ nocte | |
Qty: 60 | 5 repeats |
Phone Approval No: N7328WB | |
Previous Authority? [N] | |
Indication for use of item: hypertension |
114. The second example is from Dr Mundkur. It is handwritten on a standard pharmaceutical benefits prescription pad and dated 18 February, the year being illegible. The prescription sheet is printed with Dr Mundkur's name and address. In handwriting there appears: "Rx [illegible] Havrix 1440" followed by the signature.
Referral letters
115. Examples of referral letters written by the sample doctors and tendered in evidence came from the practices of Drs Ginnane, Lyons, Mundkur, Fitch, Urquhart and Panwar. The following is the text of a letter written by Dr Lyons and dated 11 September 2002:
"Dear Dr Cunningham,
Thank you for seeing [patient's name obscured] who you saw recently whilst he was an inpatient in RGHC following a TIA. It was noticed in hospital at the time that he had a mild lymphopenia. Follow up blood tests have confirmed a continuing mild lymphopenia but now also an anaemia. On 24/6/02 Hb was 12.5 but by 26/7/02 it was 10.6. On 9/8/02 Hb was 10.5 with ESR 40 Ferritin 53 B12 76. RBC folate 793….
I have given him a B12 injection today.
Could you assess?
Regards
James"
116. Dr Ginnane's referral letters were on a standard form and letterhead from his practice. The handwritten letters are difficult to decipher but, typically, were brief. The following is an example:
ATC 10938
"Dear Jeff,Thank you for seeing [patient's name obscured] with temporal atereitis. Had headache after [illegible] (enc) → Ryde Hosp. who noted ↑ ESR however ESR ∼ 50-70 for > 12 month (? 2° renal impairment.
VAR 6/7.5 VAL 6/12 & glasses
(c) temple [illegible] tender.
Diabetes
Hypertension
Papilloedema
Rx enc
I refer for management
having trouble organising [illegible] I shall ring Prof [illegible] tomorrow
Yours
Tony G"
117. An example of a referral letter from Dr Fitch was tendered. It was also on a standard form and letterhead from his practice and was part printed and part handwritten and was as follows (the handwriting is shown in italics) :
"To Dr Roxanas
Thank you for seeing [patient's name obscured] D.O.B …./…/…
Presenting complaints
Post traumatic stress disorder
Past history and medications
Your further assessment and management will be appreciated.
Yours Sincerely
[Signature illegible]"
Analysis
118. The above summary of the evidence concerning the records kept in each of the sample practices shows that the record keeping of the practices have much in common. In the light of this summary it is appropriate to make some general comments.
Multiple contributors to patient records
119. With the exception only of the patient records of Dr di Michiel, all of the records that were tendered showed input by a number of persons. In some (all except those of Urquhart, Ginnane and O'Shannessy) the receptionists and/or clerical staff had some input. That input was limited to identifying material such as the patients' names and addresses, Medicare numbers, date of birth etc however, in others (Drs Galati, Tang, and Fitch) details such as patient allergies were noted. In the case of Dr Urquhart's records clerical staff had copied extracts from specialist reports into the consultation notes. Such entries can be seen in the extract at [69] above.
120. Except for those of Dr di Michiel, the patient records of all the sample doctors that were tendered in evidence had input from other doctors. In Dr di Michiel's case it seems reasonable to assume that some records would have been wholly or partially written by Dr Cheung but no such record was in evidence. It is clear, however, that Drs Galati, Tang, Fitch, Parissis, Ginnane, Panwar and Lyons continued the use of the patient records of the doctors from whom they bought their practices or with whom they were previously in partnership. Dr Urquhart's records showed entries by multiple doctors who were not identified. Although in its written submissions PHC stated that the patient records were created by the relevant sample doctor "or his or her employees", the evidence does not support this conclusion. With few exceptions the doctors, other than the sample doctors, who had contributed to the patient records were not identified. Only in the case of Dr Ginnane is there evidence to support the claim that the doctors he had engaged to help him in the sample practice were, in the strict legal sense, employees rather than independent contractors.
Works of joint authorship
121. The fact that all except one of the sample practice patient records have multiple authors warrant some comments as to why these records cannot be regarded as works of joint authorship. The definition of works of joint authorship is set out at [40] above. As the statutory definition indicates, it is central to the concept of joint authorship (as opposed to co-authorship) that the product of the collaboration between the authors is a joint work, not one in which the individual contributions are separate.
122.
ATC 10939
Although in some cases the consultation notes and history of a patient where entries made by more than one doctor, could be seen as forming a continuous narrative with the patient as its subject, the individual entries are separate and distinct and, on the evidence, not the result of collaboration between the doctors. The description of the process given by the doctors both in their affidavit evidence and in cross-examination indicates that each entry in the consultation notes is created by the doctor using his or her individual expertise and intellectual effort to form and record an opinion as to the patient's condition and treatment. Whether or not the individual doctors collaborated in their care of a patient, there is no evidence of collaboration in the production of the patient records.The copyright status of individual entries in the consultation notes
123. Where there are multiple individual entries in the consultation notes issues concerning the copyright status of the individual contributions are raised. They include identification of each work for which copyright is claimed, the identity of the author, whether the author is a qualified person and whether the work is an original literary work.
The identification of each work
124. The applicant submitted that the summary sheet and consultation notes for each patient comprise one (or in the alternative, two) original literary work. It also submits that each referral letter comprises one original literary work. The referral letters are considered below at [136]. The submission concerning the consultation notes, and the alternative, must be rejected. With the possible exception of the records of Dr di Michiel's sample practice there is more than one author of the entries in the consultation notes for all the sample practices that are in evidence. As the patient records are not works of joint authorship and are not compilations, the consultation notes cannot be regarded as one work for the purposes of copyright. It is therefore necessary to identify each work for which copyright is claimed; IceTV at [15] per French CJ, Crennan and Kiefel JJ and [105] per Gummow, Hayne and Heydon JJ. This has not been done.
The author of each work
125. Assuming for the moment that each individual entry in the consultation notes and summary sheets is an identified work, it would be necessary for the author of each work to be identified. The summary of the patient records for each doctor shows that this has not been done. Even if it has been established that each author of entries in the consultation notes and summary sheets was an employee of the sample doctor or (where relevant) the owner of the sample practice, the statutory vesting of copyright in an employee under s 35(6) operates only where the relevant work "is made by the author in pursuance of the terms of his or her employment". For this requirement to be met the individual authors need to be identified.
126. Furthermore, it is also necessary to prove that each author is a qualified person. Although the evidence establishes that each sample doctor is an Australian citizen and therefore a qualified person there is no such evidence in relation to the other authors of the medical records.
Whether the individual entries are original literary works
127. The respondent submits that the individual contributions consisting in the most part of no more than a word or a few words naming medical conditions are not sufficiently substantial or original to qualify as original literary works and therefore do not attract copyright. The respondent's written submissions set out, from the records of Dr Fitch, Dr Tang and Dr Ginnane respectively, the following examples:
- "(a) Triferne 28 Microgynon 20 C&N
- (b) H/T, NIDDM, Asthma
- (c) Hypertension, Uterine Fibroids, Pagets D, Lumbar Disc Deg"
These notes convey information but, as French CJ, Crennan and Kiefel JJ commented in IceTV at [45], "Not every piece of printing or writing which conveys information will be subject to copyright". Many more examples can be seen in the discussion of the patient records tendered in respect of each sample practice.
128. In support of this submission, the respondent cited the decision in
Noah v Shuba [1991] FSR 14 where the plaintiff claimed that
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a short extract taken from a publication entitled A Guide to Hygienic Skin Piercing in which he held the copyright constituted a work in its own right. The extract was: "Follow clinic procedure for aftercare. If proper procedures are followed, no risk of viral infections can occur". As it happened, it was not necessary for Mummery J to decide the issue however his Honour, having heard argument from both sides, said, at 33, that he would have rejected the submission that the extract was a work in its own right as "Those two sentences on their own do not afford sufficient information, instruction or literary enjoyment to qualify as a work".129. Invariably, findings as to whether an extract such as Mummery J considered is an original literary work will involve fine distinctions and an obiter dictum should not be scrutinised too carefully. Nevertheless, the case for copyright existing in the entries put forward as examples by the respondent is much less persuasive than for the extract considered by his Honour.
130. In
John Brodel v Telstra Corporation [2004] FCA 505, Kenny J held at [13], that the word "Smartfax" did not constitute an original literary work in which copyright was capable of subsisting. A similar view was expressed about the word, "Exxon" in
Exxon Corporation v Exxon Insurance Consultants International Ltd [1982] Ch 119. In Exxon Stephenson LJ commented at 143, that "a literary work would be something which was intended to afford either information and instruction, or pleasure in the form of literary enjoyment" and that the word, "Exxon" was neither a work nor literary, despite the admitted originality in its creation. Other relevant examples referred to by Kenny J in John Brodel include
Francis Day and Hunter Ltd v Twentieth Century Fox Corporation Ltd [1940] AC 112 where the song title "The Man who Broke the Bank at Monte Carlo" was held not to be an original literary work and
Green v Broadcasting Corporation of New Zealand (1983) 2 IPR 191 which took the same view of the title of a talent quest show, "Opportunity Knocks".
131. As Stephenson J accepted, "Smartfax" and "Exxon" being invented words are undoubtedly original expressions, however, that very novelty detracted from any argument that they could inform, instruct or entertain. Entries in medical records even where they are limited to clinical data and names of medications have a greater capacity to inform and instruct (if not to entertain) than the expressions in these examples. This, however, is not sufficient to support a claim for copyright in those entries. The clinical data and names of medications are not expressions that originate with the doctor who has recorded them.
132. Even entries that contain some comment are not sufficiently substantial to qualify as works the product of independent intellectual effort directed to expression. The following examples taken from the records of Dr Tang, Dr Panwar and Dr Lyons respectively, illustrate the point:
- • 7 kg - growing well. On fresh milk and vitamins
- • Now c/o diarrhoea - possibly antibiotic induced …
- • Last 2/12 notices wheezy breathing if lies flat - associated with dry irritant cough - Says doesn't feel SOB
133. None of this denies the intellectual effort and professional skill needed to form the diagnoses, to select methods of treatment or to understand the significance of clinical data that is recorded, however, copyright protects a form of expression not this underlying expertise.
Conclusions as to subsistence of copyright
134. As mentioned above, PHC claims copyright in the patient records of the sample practices as described above at [48]. As the summaries above show, in evidence in this proceeding were examples of consultation notes for all the sample doctors, some examples of summary sheets and a few examples of referral letters and prescriptions. Applying the principles identified above, and contrary to PHC's submission that the subsistence of copyright in these records is "uncontroversial", I have found little evidence to support a finding that copyright subsists in them. In fact, as explained below, I find copyright only in the referral letters and in the consultation notes for di Michiel patient 6. I have not found any instances of copyright in prescriptions written in the sample practices or in health summaries.
ATC 10941
Prescriptions and health summaries
135. The prescriptions consisted only of the names of medications, dosage and standard directions, such as "nocte" or "10 mg ½ m". There were only a few examples of health summary sheets that were distinct from the consultation notes. Often the health summaries were merely noted at the beginning of the consultation notes as for instance in the case of Drs di Michiel and Galati; see above at [56] and [60]. Those doctors who used the GP System of record keeping (Drs Urquhart, Panwar, Lyons and Sabag) used the separate summary sheet that is part of that system. Irrespective of the method of recording health summaries, however, they generally contained only a list of previous illnesses and procedures; see for instance the summary for Urquhart patient 5 at [70] above. These records were not sufficiently substantial to qualify as original literary works embodying independent intellectual effort directed towards expression.
Referral letters
136. While I have seen few instances of referral letters from the sample practices written in respect of patients of those practices, those in evidence showed independent intellectual effort of some (occasionally minimal) substance. I am satisfied that copyright would subsist in the letters which are in evidence before me and which were written by the sample doctors. There was considerable similarity of style and content in those letters. As the style and content were driven by the purpose of the letters, being to explain to the recipient of the letter why the patient was being referred, it is reasonable to assume that the referral letters in general would follow a similar pattern. It would, however, be only in the case of those letters identified as having been written by the sample doctors that I can find, on the basis of evidence, that the authors were qualified persons within the meaning of s 32(4).
Consultation notes
137. The consultations notes in respect of di Michiel patient 6, described above at [58], were wholly written by the identified author, Dr di Michiel, who is a qualified person. As there was only one author it is possible to regard the accumulated record as forming a single work rather than having to consider individual entries. That being so it was possible to discern a continuous narrative showing independent intellectual effort expended in expression. While that effort was probably minimal, taken as a whole, I find that these notes constitute an original literary work authored by Dr di Michiel. The notes in respect of di Michiel patient 6 provided the only evidence in respect of the records of this sample practice. How representative this is of the records of this practice as a whole is, of course, not something on which I am able to express an opinion. I can say, however, that (in the absence of any assignment, of which there has been no suggestion) Dr di Michiel would not have had copyright in the records of his former partner, Dr Cheung and, to the extent that any records had multiple entries by the two doctors, the problems affecting the records of the other practices would apply to those records.
138. In relation to the records in evidence for the other sample practices, I am not satisfied that the consultation notes are original literary works in which copyright subsists. In summary, the entries in the notes are largely restricted to notations of the names of medical conditions and medications as well as physiological and pathological data such as blood pressure and blood count readings. As such their expression does not display the independent intellectual effort in their expression necessary for copyright protection.
139. These comments apply to entries made by the sample doctors and other doctors who had made entries in the consultation notes. In respect of the other doctors there is also the obstacle that, with few exceptions, they were not identified and/or the specific entries they authored were not identified. Where the doctors were identified, as for instance, the entries made by Dr Blatchford in respect of Galati patient 5, there was no evidence to show that the author was a qualified person; see, for example [93] above in relation to the dentists who worked for Dr O'Shannessy and [75] in relation to Dr Tang's records.
140. In the case of Dr Parissis (see [83]-[86] above) it would seem that records of patients who attended the Belmore practice and who had been seen by Dr Hor were continued by Dr Parissis after the dissolution of the partnership
ATC 10942
with Dr Hor. Although Dr Parissis recognised some entries as having been written by Dr Hor there was no precise identification of those entries.141. The difficulties occasioned for PHC's claims that copyright subsists in the consultation notes arose in relation to the records of all the sample practices except for that of Dr di Michiel. This much can be seen from the summaries for each practice.
Transfer of copyright interests to PHC
142. I have found only very limited subsistence of copyright in the patient records of the sample practices. Nevertheless, in case I am wrong, I shall consider PHC's claim that Idameneo obtained an interest in the copyright in the patient records of each of the 12 sample practices on the assumption that there was copyright, at least in part, in the patient records of each of the sample practices. The question requires an examination of the title of the vendor in any such copyright and raises the question whether an interest in it passed under the agreement for the sale of each practice. It necessarily involves a construction of the sale agreements into which the various vendors entered with PHC.
143. Any discussion of the transfer of an interest in copyright must take place with full cognisance of the nature of copyright as a proprietary interest and the distinction between that interest and a proprietary interest in the medium in which the copyright subsists. Thus it is legally possible for property in the patient records of the sample practices to be held by PHC and any copyright in those records to be held by other persons;
Pacific Film Laboratories Pty Limited v The Commissioner of Taxation of the Commonwealth of Australia (1970) 121 CLR 154 at 163 per Barwick CJ and 165-170 per Windeyer J. In Breen v Williams at 127, Gummow J drew attention to this distinction between ownership of copyright and ownership of "the material thing which is the subject of the copyright" and referred to Pacific Film Laboratories and also to
Re Dickens [1935] Ch 267, which, Gummow J observed, illustrated the distinction between the manuscript of an unpublished work (bequeathed to Charles Dickens' sister-in-law) and the copyright in the work which was included in the residuary estate left to the author's children.
144. In
Re Dickens the manuscript in question was of a story Charles Dickens had written for his children but had never published. The Court of Appeal held that, not having been published, the manuscript was included in the "private papers" which, on the proper construction of the author's will, he had left his to his sister-in-law.
Vendors' title to copyright
145. As can be seen from the summary in Schedule 2, four of the agreements for sale of the sample practices (the Galati, Urquhart, Tang and O'Shannessy practices) had corporate vendors. In each case the corporate vendor was described as being for the purpose of providing superannuation to the relevant practitioner. The corporate vendors were wholly owned either by the practitioner (Dr O'Shannessy) or by the practitioner and his or her spouse (Galati, Urquhart and Tang). In no case is there any evidence as to how copyright in the patient records might have vested in the corporate vendor. However, as each corporate vendor was wholly controlled by the sample doctor or the sample doctor and his or her spouse, for present purposes I am prepared to assume that if, on its proper construction, the agreement for sale purported to assign copyright in the patient records to PHC, the corporate vendor would have been able to discharge that obligation.
146. Except for the four sample practices that had corporate vendors, the vendors under the agreements for sale were the sample doctors personally. As such, they were in a position to assign any copyright that subsisted in the patient records.
Express provision for assignment of copyright - Dr Urquhart's sample practice
147. The only sale agreement that expressly provides for the assignment of copyright is the agreement for the sale of Dr Urquhart's sample practice. In that agreement the vendor is defined as Peter W Urquhart Pty Ltd and Moremint Pty
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Limited "jointly and separately". Clause 2.1(c) of the agreement includes among the assets that comprise the practice:"[T]he records of patients of the practice (owned by Moremint) and to the extent that it is owned by either Vendor, copyright in handwritten components of those records …"
148. Clause 5.2 of the agreement provides for the delivery of all the patient records from Dr Urquhart's sample practice to PHC. Clause 5.4 referred to "assets stored electronically" however there is no evidence that Dr Urquhart kept any electronic patient records. As is shown in the summary of Dr Urquhart's record keeping practices at [63] to [70] above, health summaries and consultation notes of that practice were handwritten. On the assumptions I have made as to the subsistence of copyright and its ownership by the vendors, that copyright would have passed to PHC under the sale agreement. It is therefore not necessary for me to discuss this agreement for sale further.
Assignment or licence in the absence of express provision
149. Apart from the Urquhart contract discussed above, none of the sale agreements mentions copyright. In its written submissions PHC distinguished between sale agreements entered into pre-July 2001 and those entered into post-July 2001 however it submitted in respect of both categories that:
"[E]ach of the Sample Doctors, by virtue of an implied term in the … agreements and/or the surrounding circumstances assigned, in law or in equity, or, alternatively, licensed, the copyright subsisting in the Summary Sheets, Consultation Notes, Referral Letters, Dental Chart, Clinical Treatment Notes and Patient Lists to Primary Health Care."
150. I have taken this submission to involve an invitation to the Court to construe the relevant sale agreement taking into account for that purpose the surrounding circumstances and if necessary, to imply such a term into it. PHC includes in the surrounding circumstances, the practitioner contracts between Idameneo and either the sample doctor or the doctor's incorporated medical practice.
151. A legal assignment of copyright must be in writing signed by or on behalf of the assignor; Copyright Act s 196(3). A promise to assign is not an actual assignment and does not meet the requirements of s 196(3) however it may give rise to an assignment in equity such that the promisee is entitled to require the legal title to be assigned in accordance with the statutory provisions. While s 10(1) requires an exclusive copyright licence to be in writing and signed by or on behalf of the owner or the prospective owner of the copyright, a non-exclusive licence does not have to meet those requirements. An assignment of copyright would exclude even the author from its use whereas a licence merely permits what would otherwise be a breach of copyright.
152. PHC does not submit that its use of the copyright in the patient records in the PHC clinics needs to be exclusive. The statutory definitions of a "unit of industrial property" and an "item of intellectual property include both equitable interests and licences in copyright as well as ownership; see [16]-[19] above. It is therefore sufficient for PHC's purposes for it to show that either ownership or a licence passed under each sale agreement.
153. In the absence of an explicit provision, an interest in copyright could only have passed under the agreements for sale if, (a) properly construed, the description of one or more of the assets subject to the sale includes an interest in copyright; or (b) the implication of a term to that effect is necessary to give business efficacy to the contract. The difference between these two approaches to filling a perceived gap in contractual provisions is that in the former case, on a proper construction of the words the parties have used, it can be seen that they actually agreed to including copyright in the sale. In the latter case it is not a term they have agreed upon; it is a term which it is presumed the parties would have agreed upon had they turned their minds to it;
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 346 per Mason J. The distinction between the two approaches is often confused and they may overlap. In many cases the question posed could be answered by either approach, nevertheless, analytically they are distinct.
154.
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In relation to the transfer of an interest in copyright, the first question is that posed in (a) above, namely whether, properly construed, the description of one or more of the assets subject to the sale includes an interest in copyright. This requires the Court to ascertain the meaning that the agreement would convey "to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract";Maggbury Pty Limited v Hafele Australia Pty Limited (2001) 210 CLR 181 at 188. The High Court again emphasised the importance of the objectivity principle in
Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 at 179:
"It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction."
155. Where commercial contracts are concerned the courts have focussed on giving the contract a businesslike interpretation. In
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151 at 160, Gleeson CJ said (omitting footnotes):
"In giving a commercial contract a businesslike interpretation, it is necessary to consider the language used by the parties, the circumstances addressed by the contract, and the objects which it is intended to secure. An appreciation of the commercial purpose of a contract calls for an understanding of the genesis of the transaction, the background, and the market."
156. It is, however, necessary to remember the limits that apply to consideration of surrounding circumstances as expressed by Mason J in Codelfa at 352:
"The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract is made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties …"
157. Consideration of the matrix of circumstances is particularly important when it is sought to imply "a crucial term which the parties have not expressed";
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151 at 272. In BP Refinery, speaking on behalf of the majority of the Privy Council, Lord Simon of Glaisdale at 283, also specified the conditions which must be satisfied for a term to be implied:
"(1) it 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."
158. In
Philips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472 at 481, the English Court of Appeal commented that the passage quoted above distilled "the essence of much learning on implied terms" but added that "its simplicity could be almost misleading". This comment was not a criticism of the views expressed in the Privy Council rather it warned that the formulation should be understood in the context of the circumstances their Lordships were
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considering and should be applied with due consideration to the circumstances of the instant case.159. In
Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd (2005) 225 ALR 57 at 78, Crennan J demonstrated a similar recognition of individual complexity when she observed that a dispute as to the assignment of copyright in circumstances where no formal contract had been concluded between the parties warranted "a more flexible approach to the question of implying terms" than was laid down in
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 in the passage quoted above. The contract in question was partly in writing and partly oral. Her Honour continued:
"In this kind of case all that is necessary is to show that the term to be implied is necessary for the reasonable or effective operation of the contract in all the circumstances."
160. The complexities involved in the consideration of whether terms should be implied into a contract were the subject of a considerable exposition in Philips Electronique. Although lengthy, the Courts observations, at 481-482, warrant repetition:
"The courts' usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning to the language in which the parties themselves have expressed their contract. The implication of contract terms involves a different and altogether more ambitious undertaking: the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision. It is because the implication of terms is so potentially intrusive that the law imposes strict constraints on the exercise of this extraordinary power.
There are of course contracts into which terms are routinely and unquestioningly implied. If a surgeon undertakes to operate on a patient a term will be implied into the contract that he exercise reasonable care and skill in doing so. It is inconceivable that any patient would in any imaginable circumstance commit his bodily well-being to the ministrations of a surgeon who did not undertake that obligation, or that a surgeon could hope to remain in practice without professing to discharge it. Again, quite apart from statute, the courts would not ordinarily hesitate to imply into a contract for the sale of unseen goods that they should be of merchantable quality and answer to their description and conform with sample. It is hard to imagine trade conducted, in the absence of express agreement, on any other terms.
But the difficulties increase the further one moves away from these paradigm examples. In the first case, it is probably unlikely that any terms will have been expressly agreed, except perhaps the nature of the operation, the fee, and the time and the place of operation. In the second case, the need for implication usually arises where the contract terms have not been spelled out in detail or by reference to written conditions. It is much more difficult to infer with confidence what the parties must have intended when they have entered into a lengthy and carefully-drafted contract but have omitted to make provision for the matter in issue. Given the rules which restrict evidence of the parties' intention when negotiating a contract, it may well be doubtful whether the omission was the result of the parties' oversight or of their deliberate decision; if the parties appreciate that they are unlikely to agree on what is to happen in a certain not impossible eventuality, they may well choose to leave the matter uncovered in their contract in the hope that the eventuality will not occur.
The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong. For, as Scrutton LJ said in Reigate v Union Manufacturing Co (Ramsbottom) Limited [1918 1 KB 592 at 605 :
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'A term can only be implied if it is necessary in the business sense to give efficacy to the contract; that is, if it is such a term that it can confidently be said that if at the time the contract was being negotiated some one had said to the parties, "What will happen in such a case", they would both have replied, "Of course, so and so will happen; we did not trouble to say that; it is too clear". Unless the Court comes to some such conclusion as that, it ought not to imply a term which the parties themselves have not expressed …'In the familiar cases already mentioned there could be little room for doubt what the parties' joint answer would have been had the question been raised at the outset. There would, almost literally, have been only one possible answer. But this may not be so where a contract is novel, known to involve more than ordinary risk and known to be more than ordinarily uncertain in its outcome. And it is not enough to show that had the parties foreseen the eventuality which in fact occurred they would have wished to make provision for it, unless it can also be shown either that there was only one contractual solution or that one of several possible solutions would without doubt have been preferred: Trollope & Colls Limited v North West Metropolitan Regional Hospital Board [1973] 2 All ER 260; [1973] 1 WLR 601 at 609-10; 613-14."
161. The comments of the Court of Appeal as to the importance of the particular nature of the contract under consideration are pertinent here. There are, as PHC pointed out, numerous cases in which the courts have held that copyright should be included by implication in an agreement to sell property. Many of those cases involve the commissioning of the copyright work with no express provision in respect of copyright. An example is to be found in
Ray v Classic FM PLC (1998) 41 IPR 235 in which Lightman J held, at 248, that where an implied term is necessary
"a minimalist approach is called for … accordingly if it is necessary to imply some grant of rights in respect of a copyright work, and the need could be satisfied by the grant of a licence or an assignment of the copyright, the implication will be of the grant of a licence only". .
162. PHC cited
Murray v King (1984) 4 FCR 1 as an example of an implied assignment of copyright however the case is really an example of the Court finding that on its proper construction, the contract provided for the assignment of copyright. The contract in question expressed the subject of the sale as being, "all the right title and interest of the vendor" in a business whose principal activity was the publication of a magazine entitled "Wot's Happening on the Gold Coast". The Court held that the copyright was an asset of the business owned by the vendor and without it the goodwill of the business, which was specifically assigned, was virtually non-existent. All members of the Full Court found that copyright was assigned under the contract. As Spender J expressed it, at 13:
"[T]he wording of the agreement was effective to assign the copyright, as one of the assets of the business, to King. He was therefore entitled to succeed in the action upon the basis that the copyright had been assigned to him."
163.
Greenfield Products Pty Ltd v Rover-Scott Bonnar Ltd (1990) 17 IPR 417 was a case where, as here, the question of whether copyright passed under a contract of sale related to a contract between the applicant and a non-party to the proceedings. The applicant's claim to ownership of the copyright that the respondent was alleged to have breached depended upon his rights under the contract pursuant to which it had purchased the business from a company controlled by a Mr Reinhold. The subject of the sale, as set out at 422 of the Court's reasons, was all the property described in a schedule as follows:
"The goodwill, motor vehicles, plant and equipment, patents, loose tools, trade debtors and stock of the business conducted by the vendor as manufacturer and distributor of industrial mowers conducted by the vendor at 1101 Beaudesert Rd, Archerfield."
164. The respondent submitted that the description of the property sold made no reference to assignment of copyright, express or
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implied to intellectual property other than patents and therefore the applicant did not have title to the copyright. Pincus J did not accept that submission, observing, at 422:"It is absurd to suppose that the true intention was to assign the business including goodwill and patents, but leave copyright with the assignor. Looking at the agreement broadly, in the way one is encouraged to construe commercial documents, there can be no doubt that its general intention was that all the assets used in the business should go over; the omission particularly to mention a certain asset could prima facie be remedied by implying a term the omission particularly to mention a certain asset could prima facie be remedied by implying a term."
165. In Greenfield Products the copyright in issue subsisted in a design for a drive mechanism for the applicant's mowers. Pincus J held, at 420, that the respondent had "imitated the applicant's design to a considerable extent". In fact it had adopted the design for its "auto drive" although it had made a number of changes. Given that the applicant was a manufacturer of mowers (the respondent was a competing manufacturer) it is not surprising that his Honour held that copyright had passed under the contract. I note, however that his Honour commented, at 422, that "the making of this implication must be close to the limit of the law concerning contractual implications". In Gold Peg International Pty Ltd there was a similar business imperative for an implied assignment of copyright.
The agreements for sale
166. The table in Schedule 2 to these reasons summarises the terms of each sale agreement that may be of particular relevance to the question whether an interest in copyright was assigned under the contract. As can be seen from this summary, to a very large extent, the sale agreements entered into by each of the sample medical practitioners are identical. They follow what appears to be a standard form and use standard terms. Some differences were, however, identified by counsel and these differences provide a basis for categorisation. For the purposes of this analysis, the agreements for the sale will be considered in two categories being (1) those that were entered into before July 2001 ( di Michiel agreements ); and (2) those entered into after July 2001 ( Ginnane agreements ). The di Michiel agreements are those for the sample practices of Drs di Michiel, Galati, Tang, Fitch, Parissis and O'Shannessy. The Urquhart sale agreement, being made before July 2001, also falls into the category of di Michiel agreements however as it provided specifically for passing of copyright much of the following analysis is irrelevant to that agreement. The Ginnane agreements are the agreements for the sale of the sample practices of Drs Ginnane, Panwar, Lyons, Sabag and Mundkur sample practices.
The practice as the subject of the sale
167. In every agreement the subject of the sale is expressed to be the relevant medical or dental practice. There is, however, one difference between the agreements for the sale of the sample practices of Drs Sabag and Mundkur, those of the other Ginnane agreements and also the di Michiel agreements which should be considered here. The Sabag and Mundkur agreements state that the practice includes "the goodwill of the practice and the items in Schedule 1". In all the other agreements, the practice is described as comprising specified assets such as the goodwill of the practice and the items in schedule 1 of the agreement. In all agreements the items in schedule 1 are such things as furniture and medical equipment which have no relevance to the issues in this case and they will not be further discussed.
168. This raises the question of whether, in the context of the sale agreements, the difference between "includes" and "comprising" is one of substance. The relevant meaning of "comprise" in the New Shorter Oxford English Dictionary is "Include, contain; extend to, encompass; consist of, be made up of". In the Macquarie Dictionary it is "1. to comprehend; include; contain. 2. to consist of; be composed of". The Macquarie Dictionary also gives "comprise" as one of the meanings of "include".
169. In
General Clutch Corporation v Sbriggs Pty Limited (1997) 38 IPR 359 Lindgren J considered in detail the meaning of "comprising" as used in the phrase "spring
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clutch comprising" occurring in claim 1 of a patent. His Honour considered the dictionary definitions set out in [33] and also the views of several experts on English usage and observed, at 373:"In the absence of context and authority, I would have approached the construction of the opening expression '[a] spring clutch comprising' in claim 1 as meaning 'a spring clutch [the "whole"] consisting of, made up of, composed of, or constituted by, the following [parts] as its essential elements as a spring clutch'. I would have done so on the basis of general linguistic usage."
170. Lindgren J found support for his construction in
Asahi Kasei Kogyo Kabushiki Kaisha v WR Grace & Co (1991) 22 IPR 491 and applied that meaning in the matter before him. In Asahi the invention was defined in claim 1 of the patent as "a thermoplastic multi-layer packaging film comprising at least an outer polymer layer, an inner heat sealing layer and optionally an oxygen barrier layer …". Heerey J rejected a submission that "comprising" meant "includes" and said, at 515:
"As to the meaning of 'comprise' in claim 1 … [the respondent] argued that the word simply meant 'consists of' and would not cover claims in respect of an infinite number of substances which might be added to the specified co-polymer. I agree. That seems to me to be the primary natural meaning of the word 'comprise' and in this context it gives a sensible and workable meaning."
171. Asahi and General Clutch both involved the construction of patent claims. Largely because of the monopoly conferred by patents, it is well established that, in construing claims the courts are cautious to ensure that the patentee obtains protection for the invention as claimed and no more, the function of the claims being "to define clearly and precisely the monopoly claimed":
Décor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 391 per Lockhart J. Those considerations do not apply with the same force to the construction of a contract inter partes where, as mentioned above, the task is to determine the objective intention of the parties taking into account the whole of the contract and its context;
Décor at 397 per Sheppard J.
172. As previously mentioned, in each agreement the subject of the sale is expressed to be, "the practice", which term is followed by a list of assets varying from the longer list in the case of the di Michiel agreements to the shorter list in the Ginnane agreements. In my view these lists do not evidence an intention to limit the primacy of the practice as the subject of the sale. Given the variety of meanings that may attach to the word, "comprising", I do not perceive an intention to exclude the transfer of an asset that is a part of the practice merely by the use of "comprising". I would construe the word as meaning "include" and therefore do not regard the difference between the Sabag and Mundkur agreements and the other agreements as substantive and shall include these agreements in the category of Ginnane agreements.
Goodwill and "going concern"
173. All the sale agreements provide for the sale to include the goodwill of the practice. I accept that goodwill may be an asset of the practice however it is not an asset that includes copyright. This much is clear from the comment of Gaudron, McHugh, Gummow and Hayne JJ in
Commissioner of Taxation of the Commonwealth of Australia v Murry (1998) 193 CLR 605 at 608-9:
"Goodwill is inseparable from the conduct of a business. It may derive from identifiable assets of a business, but it is an indivisible item of property, and it is an asset that is legally distinct from the sources - including other assets of the business - that have created the goodwill."
174. All the sale agreements also provide for the practice to be sold as a "going concern" and require it to be conducted as such until completion so as to preserve the goodwill of the practice. Only one of the sale agreements, that of Dr Ginnane, links this provision to the goods and services tax and the A New Tax System (Goods and Services Tax) Act 1999 (Cth) which provides, subject to some conditions not
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relevant here, that the supply of a going concern is GST-free; s 38.325(1). The supply of a going concern is defined in s 38.325(2) as follows:"A supply of a going concern is a supply under an arrangement under which:
- (a) the supplier supplies to the recipient all of the things that are necessary for the continued operation of an enterprise; and
- (b) the supplier carries on, or will carry on, the enterprise until the day of the supply …"
175. More generally, the term, "going concern" is used to describe a viable business or enterprise that can be expected to continue as such; see
Hope v The Council of the City Bathurst (1980) 144 CLR 1 at 8-9 where Mason J referred to "grazing activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis". The Oxford English Dictionary Online defines a going concern as "one in actual operation; a flourishing business; a profitable enterprise". The CCH Macquarie Dictionary of Accounting describes it as "one of the fundamental accounting assumptions underlying the preparation of financial statements".
176. It was submitted that the concept of the practice being sold as a going concern necessarily involves the supply of all that is required for the continued operation of the enterprise. It was further argued that the supply would therefore have included the sale of the patient records and the copyright. The latter submission is discussed below. In opposing this submission, the respondent submitted that the practices conducted at the PHC clinics are not continuations of the sample practice practices. In my view this is irrelevant. The express terms of all the sale agreements link the supply of the practice as a going concern to the obligation to conduct the practice until completion so as to maintain the goodwill of the practice. While that may have been in part for GST purposes it is also clear that the maintenance of goodwill was an integral part of attracting patients of the sample practice to the new PHC clinics.
177. The purpose of attracting patients to the PHC clinics can be implied from the transfer of the goodwill of each practice to PHC. It is explicit in the di Michiel agreements. Although, this objective is not stated in the Ginnane agreements, it is tolerably clear when the agreement is read in conjunction with the relevant practitioner agreements. The practitioner contracts form part of the context in which the agreements for sale are to be construed. I therefore accept that the vendor in each sale agreement was required to transfer whatever was required for the continued operation of the sample doctor's practice.
Patient records and patient lists
178. The di Michiel agreements specifically list patient records and patient lists among the assets which are included in sale of the practice. Consequently it is not necessary to rely on the concepts of "going concern" and "goodwill" to find that property in the patient records was transferred to PHC in accordance with the contract of sale. In the case of Dr O'Shannessy's sale, however, there is an inconsistency in the sale agreement in that cl 6 of the agreement specifically excludes patient records from the sale. Clause 6 is also inconsistent with clause 5 of the agreement which provides for delivery of certain assets included in the sale to be delivered to the PHC premises on completion and which specifically mention patient records.
179. In his affidavit sworn on 19 December 2008, Dr O'Shannessy recalled a conversation with Dr Bateman in which he stated that, for ethical reasons, he wanted to retain ownership of his patient records. He described Dr Bateman as responding:
"If you want to come on board we have to assume ownership of your dental records. However, you will have unrestricted access to your dental records and all patient information will reman confidential."
180. Dr O'Shannessy does not record his reaction to this response but in cross-examination he stated that his understanding was that the patient records "were to be sold to Idameneo and that actually took place". Dr Bateman expressed the same view and said that PHC would not have purchased the practice without the patient records being included. Given the views expressed by Dr O'Shannessy and Dr Bateman, the express inclusion of the records in the assets to be transferred and the
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confirmation of that position in clause 5, I have concluded that the mention of the records in clause 6 is an error and that the inconsistency should be resolved by severing, to the extent of the inconsistency, clause 6 from the contract.181. The Ginnane agreements do not make any mention of patient records. Mr Moshinsky, senior counsel for the Commissioner, submitted that patient records did not pass to PHC under these contracts. He attributed the failure to mention the records to the fact that amendments to the Privacy Act 1988 (Cth) were made in December 2001. He submitted that those amendments applied to health information of the kind contained in the patient records such that Idameneo would have required the consent of the patients concerned if the records had been transferred to it. Mr Moshinsky referred to Idameneo's privacy policy to support his contention that the use it proposed to make of the information in the records went well beyond the care of the individual patient and extended to business development, management and fee collection from the patients and health services.
182. Whether or not the Commissioner's contention as to why patient records were not listed in the Ginnane agreements is irrelevant. Similarly, it is not to the point whether the agreements gave rise to arrangements that did not comply with the Privacy Act. That is a separate issue on which it is not necessary for me to make any finding and I do not do so. The question whether the patient records were transferred is to be answered by construing the contracts in accordance with the established principles.
183. I am satisfied that the provisions concerning goodwill and the sale of the sample practice as a going concern required the vendor to transfer the physical patient records and the patient lists to PHC in order for the PHC clinics to be operated in the manner contemplated in the agreements between the parties. The sample doctors in their new PHC practice, and the other doctors in the PHC clinics, needed to be able to draw on the information in the patient records to maintain continuity of care for patients of the sample practice who chose to become patients at the relevant PHC clinic. The patient lists were required in order for PHC to develop the business of its clinics as contemplated by the sale agreements and practitioner contracts. It does not follow however that the transfer of an interest in any copyright in those patient records or the patient lists would be similarly required.
Assignment of copyright under the contract
184. As already noted, only the sale agreement in respect of the Urquhart sample practice specifically provides for the assignment of copyright, and that assignment is quite minimal; see [147] above. None of the other sale agreements make any mention of copyright.
185. It is beyond contention that the sale of a business may transfer an interest in copyright without there being an express mention of copyright in the contract. Both
Murray v King and Greenfield Products, among others, attest to that. It is trite law, however, that each case and each contract must be considered in the context of its own facts. As previously mentioned the distinction between the two approaches to filling a perceived gap in a contract, described above at [153], may not be clear and they may often overlap. For example, the concept of the business efficacy requirement referred to in BP Refinery is not only an essential precondition to the implication of contractual terms but may also be a relevant consideration in the construction of the actual terms of the contract. As with all questions of construction and the implication of terms principles articulated at a high level of generality cannot substitute for a careful examination of the contracts in issue.
186. PHC submits that both the di Michiel and the Ginnane agreements, in stating that the "practice" is the subject of the sale refer to the business of the sample doctor's practice and that, properly understood, the practice includes copyright or, in the alternative, that inclusion should be implied into the contract. PHC also submits that the specific references in the di Michiel and the Ginnane agreements support this construction and indicate that copyright is included in the sale. In relation to the di Michiel agreements they are:
- (a) the express inclusion in the sale of the patient records and the patient lists;
- (b) the express inclusion in the sale of "any other assets or benefits agreed to be sold or vested in the Purchaser" under the agreement;
-
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(c) the fact that consideration was required to be paid and was paid; - (d) the provision that on completion of the sale "title to and property in, the practice and all the assets included in the sale" vests in the purchaser;
- (e) the requirement for delivery of documents relating to the practice to the purchaser and for their retention by the purchaser as well as a similar provision in the practitioner contracts;
- (f) the expression of the fundamental objective to ensure that the patients of the sample practice transfer to the new PHC practice;
- (g) the sale of the sample practice as a going concern which, the applicant submits, requires that PHC be able to copy the patient records lawfully;
- (h) the fact that express exclusions in the sale do not include copyright; and
- (i) the fact that the vendor gives a warranty of title to the property included in the sale.
187. In relation to the Ginnane agreements PHC made similar submissions although there were fewer express provisions to which it could point in support of its position. The provisions mentioned in (a), (b), (e) and (f) above do not appear in the Ginnane agreements.
188. PHC submits, in relation to the di Michiel and the Ginnane agreements that the implication of a term for the passing of an interest in copyright would not contradict any express term of the contract. Moreover it submits that if the sample doctors were to retain copyright they would be in a position to undermine the operation of the PHC clinics by denying PHC and the other doctors in the clinic the right to reproduce important parts of the patient records. This, it submitted, would lead to an absurdity.
189. In opposing PHC's position the respondent in its written submissions made the following points the factual aspects of which find some support in the evidence, in particular that of Dr Bateman, PHC's managing director:
- "(a) there was no discussion of copyright in the [patient] records in the negotiations between Dr Bateman or [Dr] Monk and the vendor doctors;
- (b) Idameneo did not inspect any of the [patient] records before the transactions;
- (c) Idameneo did not carry out any assessment of the quality of the [patient] records before any of the transactions;
- (d) Because the doctor would have access to the [patient] records at the new premises, and therefore access to the information contained in the [patient] records, there was not need to assign copyright in the [patient] records;
- (e) If there was a need for the doctor to copy from his or her own notes at the new premises, he or she could do so if he or she continued to own copyright;
- (f) the Practitioner Agreement did not require Idameneo to provide the [patient] records nor did it require Idameneo to provide a licence of copyright in the [patient] records;
- (g) in none of the cases did Idameneo carry on the previous medical practice as a going concern - Idameneo did not carry on the practice."
190. In so far as the applicant's submissions rely on the express inclusion in the sale agreements of the patient records and lists, they add nothing to the enquiry whether the sale included the copyright as well as the physical records. Similarly it does not advance the argument to refer to the vendor's obligation to "documents"; the warranty of title to the property included in the sale or the provision of that title to that which is included in the sale vests on completion. For reasons given by the High Court in
Toll (FGCT) Pty Limited v Alphapharm Pty Limited (at [154] above) evidence of what the parties subjectively understood to be the effect of their contract is also not helpful.
191. I also do not accept that failure to find that PHC had acquired an interest in any copyright in the patient records would lead to an absurdity. The question of whether there was copying to the extent of infringing copyright unless PHC had some interest in the copyright
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is discussed below in the context of the claimed use of the copyright. Assuming for the moment that there was such copying, it is not for the Court to imply the transfer of an interest in copyright in order for PHC to resist a claim of infringement. In any event, there is no evidence even to suggest that any claim for infringement has been made and I make no finding on this point. It may be that, assuming (contrary to my view) that there is any relevant copyright, that authorisation (express or implied) has been given for such copying outside the terms of the sale agreements and the practitioner contacts.192. I do not see the relevance of the respondent's point that Idameneo did not carry on the sample practice as a going concern. Whether Idameneo in fact carried on the practice as a going concern is quite separate from and independent of the obligation of the vendor to convey title to a going concern. That obligation was not conditional on the practice being continued as a going concern whether by Idameneo or anyone else. The parties are entitled, if they wish, to agree to such a term.
193. I also do not give any weight to the evidence to which the respondent referred as to PHC's lack of interest in the quality of the patient records. It is not unlikely that PHC took the view that it wanted whatever patient records and lists that the sample doctor had and, as long as it achieved that, it had all the information that was available and that was sufficient. In fact a reasonable person considering the terms of the contract in the context of the whole of the arrangements and agreements made in respect of PHC's acquisition of the sample practices might well come to the conclusion that the strong emphasis on the title to and delivery of documents indicates that copyright was not important to the purchaser. In any event I am not persuaded that the contract properly construed makes any provision for the transfer of an interest in copyright.
194. Similarly, nothing in the evidence leads me to the view that assignment of copyright or the acquisition of any interest in copyright was necessary for the continued operation of the practice acquired by PHC or to give business efficacy to the contract. PHC does not claim to have acquired copyright in the documents created by third parties such as specialist reports or radiology and pathology reports. There is no evidence that it has been unable to use those reports by reason of not having copyright. It has not argued that the transfer of copyright in those documents is necessary to give business efficacy to the sale agreements. It has not argued that the vendors under the sale agreements were obliged to transfer copyright in those documents in order to meet the obligation to transfer the sample practices as going concerns. I see no reason why the position with regard to consultation notes, medical summaries, prescriptions and referral letters are any different.
195. It is also relevant that the sale agreements are formal agreements drawn up by PHC's solicitors and executed by Idameneo, each sample doctor and the relevant corporate entities. In the negotiation of these agreements many of the sample doctors were legally represented. Only one of the sample doctors, Dr Lyons, said that he had not been legally represented although he added that his wife is a lawyer and that she read the contract. Drs Urquhart, Ginnane, O'Shannessy, Mundkur, Panwar and Sabag all agreed in cross-examination that they were legally represented. There was no evidence either way in relation to Drs Galati, Parissis, di Michiel, Fitch and Tang.
196. There is no evidence of any relevant difficulties between the parties or in the operation of the new PHC practices. This may of course be because all parties believed that copyright had passed. The impression I have from the evidence of all the doctors is that the issue was just not important to them either before or after they sold their practices to PHC. Moreover the evidence is that the issue is only of comparatively recent concern to PHC and, so far as there is any dispute, it is not between the parties to the sale agreements or the practitioner contracts. The dispute is of an entirely different nature; it is a dispute between PHC and the Commissioner of Taxation.
197. As indicated above, I accept that it is necessary for PHC to be able to draw on the information in the patient records and, indeed, on the information in the third party documents in respect of which there is no claim for copyright. In so far as it was necessary for PHC to have control of the records it achieved that
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by its ownership of the physical records. It is not necessary for PHC to have copyright in the patient records for it to be able to carry on its business.198. I am confirmed in my view by the evidence discussed below as to the alleged use of copyright in the patient records after completion of the sale agreements; see below at 207 et seq. That evidence shows that little if any use was made of copyright as opposed to use of the physical patient records and the information contained in them. Given that the patient records were acquired by PHC and taken to the PHC centres it would hardly have been open to any of the sample doctors to try to prevent any copying of those records. It does not follow from this that any copyright the sample doctor owned had been assigned under the contract. It is equally consistent with the doctor giving, expressly or by implication and independent of the sale agreement, gratuitous permission (a licence) for the copying.
199. All the indications are that at the time of the sale the parties did not consider the use of copyright as opposed to the use of the physical records. Parties who are contemplating working together may prefer to rely on a measure of trust and goodwill between them to work out any difficulties that may arise in their relationship rather than to poison it at the outset by trying to provide contractual certainty for every issue. Whether or not that is the case here, I am nevertheless satisfied that only in the case of Dr Urquhart's sample practice would any copyright owned by the vendor have passed to PHC under the sale agreement.
Consideration
200. As I have found that copyright passed under the sale agreement only in the case of Dr Urquhart it is only in respect of that agreement that it is necessary to consider this issue. Nevertheless, as Dr Urquhart's contract is materially the same as the other di Michiel contracts, the reasoning and conclusion would equally apply to those contracts.
201. The issue arises because each set of provisions applicable to the relevant years of income requires some monetary consideration to be paid for a deduction to be available; see [15]-[23]. The table in schedule 1 to these reasons shows the relevant year of income for each sale agreement. For Dr Urquart's sale agreement it is the 2000 year of income to which Division 373 of the 1997 Act applies. Section 373-30 defines "expenditure" and sets out the method by which a taxpayer is to determine its expenditure. The respondent refers to case 5 of the table which makes provision for cases where an item is acquired for "no consideration". As the respondent's submits:
"The reference to 'nil consideration' in Case 5 indicates that the provision uses consideration in the sense of monetary consideration. Thus, when one turns to Case 4 in s 373-30, which applies where 'you bought the item with other property and no separate consideration was allocated to the item' it is apparent that this is referring tot a case where no separate monetary consideration was allocated to the item."
202. As can be seen from the summary of Dr Urquhart's contract in the second schedule, the purchase price of $1,061,618 was fully apportioned as between goodwill and the items in Schedule 1 to the sale agreement. There is no indication that this apportionment is in any way a sham. The fundamental objective of the sale is expressed to be that PHC should receive the benefit of the goodwill of the sample practice. The parties are entitled to allocate the monetary consideration in that way if they chose. Support for this proposition can be found in
Murray v King (1984) 4 FCR 1 in which cl 10 of the contract for the sale of the business of a partnership pursuant to an order of the Supreme Court of Queensland provided:
"The vendor and the purchaser hereby agree that the aforesaid purchase price of sixty-two thousand dollars ($62,000) abovementioned shall be apportioned as to
Goodwill $61,400 Furniture and Fittings 600 $62,000"
The appellants submitted that this clause supported their claim that only goodwill and the furniture and fittings (and not the copyright
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owned by the partnership assets) were to be sold under the contract. Sheppard J rejected this submission saying at 6-7:"[I]t is obvious that the clause was included for revenue purposes. It should not be allowed to control the construction of the contract. The parties were entitled, if they chose, to provide that the entirety of the consideration was for the goodwill and the furniture and fittings and that no part of the consideration was to be assigned to the copyright or any other asset."
203. The other members of the Full Court agreed on this point; at 12 per Morling J and at 17 per Spender J. A similar view was expressed by Hill J in
Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 503.
204. None of this is to say that there was no consideration for the copyright that was expressed to be sold under the sale agreement. That agreement was a valid contract supported by consideration passing between the parties in accordance with the requirements of the law of contract. It consisted of the mutual promises between the parties which included, for example, the purchaser's obligation to pay the purchase price, to enter into the practitioner contract and to collect the vendor's book debts. The vendor's obligations include the transfer of the property agreed to be sold, delivery of patient records, access to business records and the warranties. Consideration in that sense is inclusive of the promise to pay the purchase price but is distinct from the actual purchase monies. By agreement between the parties no part of that purchase price was allocated to aspects of the agreement other than goodwill and the items in schedule 1. It follows that no amount of the purchase price was allocated to copyright. There is no reason why the Court should interfere with the arrangement that the parties made on entering into the contract.
205. The Ginnane agreements do not contain any provision for apportionment of the purchase price. In those circumstances there is no basis for excluding copyright from the assets between which the price may be apportioned. Division 40 of the 1997 Act applies to copyright acquired pursuant to these agreements; see Schedule 1 to these reasons. As previously noted, s 40-30(2)(c) includes items of intellectual property as depreciating assets. A taxpayer may claim a deduction for an income year equal to the decline in value of a depreciating asset held during that year; s 40-175. The amount of the deduction is based on the cost of the asset. The cost has two elements; s 40-175. For present purposes it is only necessary to consider the first element of the cost. Section 40-180 provides a method of determining cost by way of a table setting out the cost of a depreciating asset in certain circumstances none of which appear to be relevant here. Neither party has suggested that this method should apply. Section 40-185 provides an alternative, namely that the first element of the cost is the amount the taxpayer is taken to have paid to hold the asset.
206. Under s 40-185(1)(b) that amount is "the sum of the applicable amounts set out in this table in relation to holding the asset or receiving the benefit". It has not been suggested that s 40-185(1)(a) applies. In summary the amount paid for the asset is the cost (s 40-185(b)) or, if the amount paid is for 2 or more items that include "at least one depreciating asset" then it is that part of the amount paid that is "reasonably attributable" to the depreciating asset. Where there has been no apportionment as in the Ginnane agreements, the monetary consideration paid for the copyright would be the amount of the purchase price of the sample practice that would be reasonably attributable to the copyright.
Use of copyright to produce assessable income
207. Use of copyright must be distinguished from use of the document in which the copyright material is embodied or the use of the information or ideas conveyed by that material. The concept of use of copyright is best approached from the perspective of infringement. That which would be infringement if not authorised by the copyright owner, will be use of the copyright where it is done by the copyright owner or with the permission of the owner. Such an action will be an "act comprised in the copyright"; see s 36(1) and [65] in IceTV. Section 31(1) of the Copyright Act provides that the copyright in relation to a particular work includes the right
ATC 10955
to do certain acts in relation to that work. In relation to the reproduction of the work this is to be read as a right to reproduce the whole or "a substantial part of the work"; s 14(1). It follows that there will not be an infringement unless there has been the reproduction of the whole of the work or a substantial part of it. As Hill J said inSkybase Nominees Pty Ltd v Fortuity Pty Ltd (1996) 36 IPR 529 at 531:
"There is a tension in policy between the monopoly rights which are conferred upon the owner of copyright in a literary, dramatic, musical or artistic work on the one hand, and the freedom to express ideas or discuss facts on the other. While there will be an infringement of the copyright of an owner in a literary, dramatic, musical or artistic work where there is a reproduction of that work or a substantial part of it, the fact that another work deals with the same ideas or discusses matters of fact also raised in the work in respect of which copyright is said to subsist will not, of itself, constitute an infringement. Were it otherwise the copyright laws would be an impediment to free speech, rather than an encouragement of original expression."
208. In
Autospin (Oil Seals) Ltd v Beehive Spinning [1995] RPC 683 at 700-1, Laddie J cautioned against failing to distinguish between different kinds of literary work when considering the question of substantial reproduction: "When the court has to decide whether a particular act constitutes a substantial reproduction of a copyright work in my view it must have regard to the nature of the copyright work in issue. … It should be borne in mind that it is not enough to say that the defendant has 'used' the plaintiff's work. He must have reproduced it".
209. In IceTV the High Court also stressed that in determining whether what has been copied is a substantial part, it is necessary to consider "not only the extent of what is copied: the quality of what is copied is critical,"; per French CJ, Crennan and Kiefel JJ at [31]. Their Honours added at [32] that "a factor critical to the assessment of the quality of what is copied is the "originality" of the part that is copied".
210. The problems to which the High Court alludes are greater where the works in which it claimed copyright subsists are themselves not much more than the slivers of information considered in IceTV. In this regard the following comment of Gummow, Hayne and Heydon at [157] is especially relevant:
"[T]he statutory requirement that the part of a work taken must be substantial assumes there may be some measures of legitimate appropriation of that investment."
Evidence as to use
211. In broad terms, to succeed in its appeal from the objections decision referred to in [1] above, PHC must show use or availability for use for a taxable purpose. In relation to taxable purpose, I am satisfied that after the sample doctors moved to the new PHC practices any use of the patient records or any copyright in them was directed to the conduct of the relevant PHC practice. I am satisfied that this was use for a taxable purpose.
212. In relation to use, the requirements of Division 373 differ from those of Division 40. Division 373 applies to the di Michiel agreements because they were entered into prior to 1 July 2001. The deduction provided for in Division 373 only applies if, inter alia, the taxpayer has used the item of intellectual property (in this case the copyright) or "the invention, design, work or other subject matter to which the item relates", in this case the physical patient records. Under Division 40 a taxpayer is entitled to a deduction in respect of an item of intellectual property the taxpayer holds however that deduction may be reduced if the taxpayer used the item of intellectual property or had it installed ready for use other than for a taxable purpose. Division 40 applies in respect of the patient records of the sample practices acquired after 1 July 2001, that is the practices of Drs Ginnane, Panwar, Lyons, Sabag and Mundkur. The evidence shows that in all of these cases the physical records were taken to the new PHC practice and were available for use, and were used, by the sample doctors in that practice. If PHC had acquired an interest in any copyright in those records then the availability of the physical records is sufficient to show that the copyright was available (installed) and ready for use. For that
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reason in the discussion of use in relation to the records of these doctors I have primarily discussed the use of the copyright.213. In assessing PHC's claims in relation to use, the evidence as to the use of the copyright in the patient records of each sample practice must be considered separately from any other sample practice and in the context of Division 373 or Division 40 as applicable.
Dr di Michiel - Division 373
214. As previously noted only one patient record from Dr di Michiel's sample practice was produced in evidence, namely that of di Michiel patient 6. That patient continued to see Dr di Michiel after he commenced work at the PHC practice. The first entry in the notes of the new practice, which again are handwritten, is dated 6 December 1996. There is no health summary and the entries appear to continue in chronological order in a similar manner as in the sample practice. The last entry is dated 13 January 2002.
215. The respondent also tendered a computer-generated patient record from the Primary Health Care practice which Dr di Michiel, after some confusion, identified as relating to di Michiel patient No 6. In that record there are no entries under the headings "Patient Family History", "Patient Social History", "Patient Personal History" or "Current and Ongoing (Problem List)". There are three entries under the heading "Current and Long Term Medications" which list Ventolin, Symbicort and Microgynon in specified doses. While these entries may have been informed by information in the earlier patient records they do not indicate any copying from those records. In cross-examination Dr di Michiel conceded that the information had not been transferred from the old records. He further agreed that no information had been copied from that record to the new PHC hardcopy record for that patient. He was also not able to point to any information that had been copied to the new PHC electronic record. In summary, there was no evidence of any use of copyright in respect of Dr di Michiel's patient records. However, it is clear that he used the physical patient records to retrieve information about his patients.
Dr Galati - Division 373
216. In the case of Dr Galati all the sample practice patient records were hardcopy as were the new PHC records. In his affidavit of 19 December 2008 Dr Galati said that he "would write in the Primary Health Care patient folder all of the important details from the [sample practice] files" however no instance of this practice was before the Court.
217. In relation to Galati patient 1 (see [61] above) there was no evidence of copying of the consultation notes. The new PHC record contained a list of current and ongoing problems which Dr Galati agreed had been made in February 2008, some years after he commenced working with PHC. The list may have drawn on information in the sample practice record for that patient however the fact that a particular disease is named in both records does not establish that copying occurred.
218. In relation to Galati patient 5 Dr Galati pointed out that the word, "sulphur" occurred in the old and new records although in the new record it was spelt "sulpha". Similarly, the diagnosis of "aortic stenosis" found its way into the new PHC record as "known aortic". I would regard the examples given in relation to Galati patients 1 and 5 as instances of using the information in the sample practice patient records but not as instances of copying. In retrieving this information from the patient records, Dr Galati was using the work to which the copyright relates.
Dr Urquhart - Division 373
219. In his affidavit of 19 December 2008, Dr Urquhart stated that at a first consultation with a sample practice patient after he moved to PHC he would take both the old and the new file for that patient into the consulting room and that, during the consultation, he would copy "a summary of the patient's medical history" from the old file to the new. Although Dr Urquhart uses the language of copying the evidence suggests that he was "copying" only the information and not the expression of the sample practice record. The only evidence that allowed comparison between the new and old records was in relation to Urquhart patient 5. The health summary for this patient included a reference to "hysterectomy - ov intact". The
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new PHC electronic record had no such entry. In cross-examination Dr Urquhart agreed that it would have been appropriate to include that reference on the front page of the PHC electronic record if one were endeavouring to copy the sample patient record exactly. While not sufficient to support PHC's claim to have used the copyright as opposed to the physical records, the evidence does show that Dr Urquhart used the physical records, that is the subject matter to which that copyright relates.
Dr Tang - Division 373
220. In her affidavit of 13 February 2009, Dr Tang gave evidence similar to that of Dr Urquhart, about taking both the old sample practice file and the new PHC file into the first consultation with a sample practice patient after she moved to PHC. She also testified that during the consultation, she would manually transfer "all important information" to the new file. Important information included the patient's medical history both family and personal as well as details of allergies and current medications. As described in the summary of Dr Tang's record keeping practices above at [72]-[75], there was some confusion in the records tendered between records made by Dr Tang and those made by others, in particular by her husband, Dr Lee. There was no reliable evidence as to the use made of the copyright in the sample practice records in the new PHC practice however the evidence is clear that Dr Tang used the physical records, that is the subject matter to which the copyright relates.
Dr Fitch - Division 373
221. Dr Fitch's record keeping in the sample practice was similar to that of Dr Tang. In his affidavits of 13 February 2009 and 25 May 2009 Dr Fitch gave evidence of the use he made of his sample practice records in the new PHC practice. He said that in the new practice his sample practice records were stored in a filing cabinet near reception and were available for him and the other doctors at the centre to use. Dr Fitch said that initially when he saw a patient from the sample practice in the new PHC practice he transferred (manually) the whole of the sample practice file to the new PHC file. When, in about 2002, the Medtech system of electronic record keeping was introduced into the new PHC practice he copied the most important parts of the health summary from the sample practice "by typing them directly into 'Medications' and 'Classification' tabs for the patient".
222. As noted above at [79]-[82] records of three patients of Dr Fitch were tendered. Dr Fitch was cross-examined about those records and the new PHC records for those patients. In none of the examples of new PHC practice records for these patients was there evidence of copying of any substance. In relation to Fitch patient 1, Dr Fitch explained the absence of significant information from the front page of the new records saying that the patient had specifically requested this "out of embarrassment". For this patient some of the entries in the new PHC practice health summary reflected entries in the sample practice record however slight differences in the wording suggested that in compiling the new record it was the information from the sample practice records that was used rather than there having been direct copying. For example "post traumatic stress" in the old record became "post traumatic stress syndrome" in the new. Dr Fitch confirmed that these entries recorded the same diagnosis.
223. In relation to the records of Fitch patient 2, in cross-examination Dr Fitch was taken to the records and it was put to him: "So there has been no evidence here of transfer of information from the old health summary to the new electronic record, has there?" to which Dr Fitch responded: "That's correct". Comparison of the old and new hardcopy records for Fitch patient 4 was similarly unhelpful. It showed some terms appeared in both records such as "Endoscopy, ulcerative, oesophagitis. Current medication: Zoton". After electronic records were introduced the ongoing problem appeared as "reflux, oesophageal".
224. The evidence concerning Dr Fitch's patient records fails to show that there was any use of copyright in records in the new PHC practice however there was evidence that the physical records, being the subject matter to which that copyright relates, were used.
Dr Parissis - Division 373
225. Dr Parissis swore two affidavits in the proceedings in which he gave evidence of his use of the sample practice patient records in the
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new PHC practice. In first consultations with sample practice patients at the new practice Dr Parissis would use the sample practice patient records to review the patient's history and then handwrite details of the consultation on the new file. Before PHC started to use computers he would type details of the consultation directly into the computer he had used at the sample practice. He used that computer to write prescriptions and update treatment records. He stated that he copied information about the patient's medical and family history from the sample practice file onto a summary sheet provided by PHC. This sheet would remain in the PHC file for use by other doctors. Once computers were introduced at the new PHC practice Dr Parissis said that electronic records from his sample practice were copied to the PHC computer system.226. The records of the four Parissis patients (see [83]-[86] above) did not include any health summaries or patient histories and no hardcopy records from the new PHC practice were produced. In comparing the records of his sample practice patients with the electronic records of the new PHC practice, in respect of Parissis patients 1 and 4, Dr Parissis was unable to point to any instance of copying from the old records to the new electronic records.
227. In relation to Parissis patient 2, the current and ongoing problems appearing in the sample practice patient records included items such as "severe COAD" (chronic obstructive airways disease), and "hypertension" however none of these items appeared in the new PHC records. The section for current and ongoing problems was blank. Similarly, for Parissis patient 3 entries in the sample practice record relating to poor eyesight and detached retina did not appear in the new electronic record.
228. In summary, Dr Parissis' evidence was consistent with use being made of the physical patient records from the sample practice in the new PHC practice. There was, however, no convincing evidence of copying of the records such as would amount to use of any copyright that may have subsisted in the sample practice records.
229. Dr Parissis also gave evidence about the transfer of his patient files to PHC's computer system. He said:
"When I was at the [sample practice] I created floppy disks of all the patient information stored on my computer at the [sample practice]. I recall that I handed these floppy disks to a persons [sic] at Primary Health Care, who [sic] name I cannot recall, and it is my understanding that Primary Health Care's IT staff copied the files from those disks directly to Primary Health Care's computer software system. Once this process was completed it was my understanding that all doctors working at Primary Health Care's Campsie practice had access to the computerised data that I had compiled for each of my patients."
230. I accept PHC's submission that this data migration from the sample practice patient records to the PHC computer system is a reproduction of the whole of the records and thus, by any standard, a use of any copyright that may have existed in the patient records. In summary, the evidence showed that both the physical records and any copyright in them was used in the new PHC practice.
Dr O'Shannessy - Division 373
231. Dr O'Shannessy's sample practice records were a mixture of hard copy and electronic forms. In his affidavit sworn on 27 May 2009, Dr O'Shannessy said that in 1999 he scanned a number of the older paper records into the computer at his sample practice. Initially, when he moved to the new PHC practice, he continued to use the same computer and software that he had used in the sample practice. Some time after he moved to the new PHC practice, he was given a new computer. He stated that PHC's information technology department copied all the patient records from the old computer that he used in the sample practice.
232. On cross-examination Dr O'Shannessy was asked about his statements in his affidavit of 27 May 2009 that, in relation to O'Shannessy patient 2 and 6, "all parts of the Pre-acquisition dental records have been reproduced in the Post-Acquisition dental records" and that he believed "the most important parts of my Pre-Acquisition records were copied into the Post-Acquisition records". Dr O'Shannessy commented that 'copied' might, perhaps, "be a bad choice of words". Presumably this
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concession was made in the light of his earlier affidavit in which he stated that when he started at the new PHC clinic he had continued to use the same computer and software as in the sample practice, merely adding to the sample practice records when a former patient came to see him in the new PHC practice. On re-examination by Mr de Wijn he confirmed that his pre-acquisition records were available on the PHC computer and that other dentists had access to those records through their PHC computers.233. As with Dr Parissis, PHC submitted that by the continued use of his old computer Dr O'Shannessy had used the copyright in the patient records from his sample practice. The respondent submits that Dr O'Shannessy's evidence does not support that submission and that what really happened was that Dr O'Shannessy took his records across to the sample practice and continued to use the electronic and paper records there, rather than making any use of them that might be characterised as a use of copyright.
234. While this appears to have been the case initially, no doubt was cast on Dr O'Shannessy's evidence concerning the migration of his old records onto the PHC system. Rather he confirmed this on re-examination. In my view this involved the reproduction of the sample practice records and would have been an infringement of any copyright that existed in the records. The evidence therefore shows that both the physical records and any copyright in them were used at the PHC practice.
Dr Ginnane - Division 40
235. In his sample practice Dr Ginnane kept both hardcopy and computer records. In his affidavit of 19 December 2008 he said that after he had signed the sale agreement and other contracts with PHC, an employee of PHC came to the sample practice premises and downloaded all the patient medical information from his computer system. He also said that relevant information (including health summaries) from his hard copy patient records was scanned into the PHC computer system. In his second affidavit affirmed on 20 May 2009, Dr Ginnane said that when he commenced working at the new PHC practice he "copied the most important parts of the summary sheet into the Front Page for the patient by copy typing into the Medtech system". He also copied the medication summary in the same way. The examples of patient records that were tendered do not confirm this account.
236. In relation to Ginnane patient 1 the entries in the front page of the new electronic record were said to show evidence of copying from the hard copy health summary in the patient records. The electronic record notes in the current and ongoing problem list, some conditions which, in similar form, are noted in the sample practice patient record. The electronic medical history shows, however that those entries were made between October 2005 (by Dr Claire Gabriel) and October 2007 (by Dr Margaret Bryce). That is, these entries were made some years after the first consultation with this patient at the PHC clinic which was in February 2002.
237. The records for Ginnane patient 2 show a similar pattern in that most of the entries in the front page of the PHC electronic record were made between 2004 and 2007. Furthermore, there were a number of conditions listed in the hard copy record of the sample practice that might have been expected to be in the electronic record but which do not appear. These include chronic pyelonephritis and lumbar spondylosis. The records for Ginnane patient 4 provided similarly unsatisfactory evidence of copying from the sample practice hard copy records to the PHC electronic record. I am unable to find in the records of these three patients evidence of copying at the first consultation from the sample practice records to the PHC electronic records.
238. If I assume, contrary to the conclusions I have reached, there was copyright in the sample practice records and that copyright was transferred under the contract of sale, I would accept that there was some extremely limited use of that copyright in the new PHC practice. I also accept that any copyright that subsisted in the patient records was available for use.
Dr Panwar - Division 40
239. After the move to the PHC clinic Dr Panwar, as well as using the computer supplied by PHC, continued to use her sample practice computer "to ensure that I copied all relevant
ATC 10960
information from the [sample practice] to the Primary Health Care computer". She said that she copied anything in the patient's medical history that she thought was important and that she thought other doctors should know before they treated one of her patients. She also began to type her treatment notes directly into the PHC computer as well as using it for prescriptions.240. The examples of the PHC electronic record do not support this account. For instance the hardcopy health summary for Panwar patient 1 records a number of conditions that do not appear in the new electronic record. In cross-examination Dr Panwar agreed that the entries in the current and ongoing problem list of the PHC record were added over time, between 2003 and 2008 as the patients came in for consultations. The comparison between the sample practice records for Panwar patient 2 and the new PHC record for this patient showed a similar pattern.
241. The evidence does not support the claim that any copyright in the Panwar sample practice records was used in the new PHC practice. Nevertheless the requirements of s 40-25(2) are satisfied as the availability of the patient records at the PHC practice meant that any copyright in them was available for use.
Dr Lyons - Division 40
242. Dr Lyons stated that before he started work at the PHC clinic a person from PHC came to the sample practice to download all the patient information stored on his computer. When he moved to the PHC clinic his patient records from the sample practice were available to be used by him and other doctors. Similarly, the information that had been on his sample practice computer was also available. I also note that in her affidavit of 6 February 2009, Vicki Fay Whiteley, the National Operations Manager for PHC referred to examples of documents from Dr Lyons sample practice that were scanned into the PHC computer system. The documents to which she refers are a specialist report and pathology results. As PHC is not claiming to have acquired copyright in such records that evidence is not relevant to its claim. Ms Whiteley also refers to referral letters from Dr Lyons' sample practice having been scanned.
243. Dr Lyons said that during the course of consultations at the new PHC practice he would copy as much as possible of the patient's medical history from the health summary sheets and consultation notes directly into the PHC computer. However, the evidence does not support this account. For example, the first consultation in the new PHC practice for Lyons patient 3 was on 3 January 2003. However entries in the PHC electronic record in respect of this patient that are similar to those in the hardcopy patient records from the sample practice, were not entered until 7 April 2005. The position in relation to Lyons patients 1 and 5 show a similar pattern. This suggests that entries in the electronic record were made as and when appropriate in relation to subsequent consultations with the relevant patient rather than as a result of copying.
244. In relation to the material transferred from Dr Lyons sample practice computer to the PHC computer, I note the limited use that Dr Lyons made of that computer. Nevertheless, I am of the view that if any copyright existed in that material or in the scanned referral letters to which Ms Whiteley referred, then the transfer to the PHC computer would involve use of the copyright. In relation to any patient records that were not scanned or otherwise transferred to the PHC computer the availability of the patient records at the PHC practice meant that any copyright in them was available for use.
Dr Sabag - Division 40
245. Dr Sabag used only hardcopy records in his sample practice. Those records were taken to the new PHC practice before he commenced working at that practice. When a sample practice patient first came to the new PHC practice the PHC receptionist would create a PHC computer file for that patient and insert the patient's name, address, date of birth, Medicare number and contact details.
246. Dr Sabag said that at the PHC practice he would type his consultation notes directly into the computer. He would also review the sample practice patient records and "reproduce important information such as long-term illnesses, current medications and allergies from that file by typing it directly into Primary Health Care's computer system". He stated that, if necessary, he would ask for "the
ATC 10961
patient's health summary sheet, pathology, radiology or specialist reports or any other documentation" from the sample practice file to be scanned into the PHC system.247. No examples of copying to which Dr Sabag referred were produced in evidence. It is not clear whether he actually copied from his sample practice records or merely made use of the information in them. Nevertheless the requirements of s 40-25(2) are satisfied as the availability of the patient records at the PHC practice meant that any copyright in them was available for use.
Dr Mundkur - Division 40
248. Dr Mundkur's patient records were in hardcopy and electronic form. Before he started working at the PHC clinic, all his hardcopy patient records and the computer he had used at the sample practice were relocated to the PHC practice. When a patient from the sample practice came to the PHC practice, the PHC staff would open a new PHC file for that patient.
249. Initially, Dr Mundkur used both the computer from his sample practice and the computer supplied by PHC in the new PHC practice. He stated that generally he would copy information from the hardcopy sample practice records and from the sample practice computer by manual entry into the PHC system. Usually he did this after the patient had attended the first consultation with him at the new PHC practice. The information included relevant details of the patient's medical history, immunisation, allergies, operations and long term medication.
250. On cross-examination with respect to the sample patient records tendered in evidence it became apparent that information was entered into the patient's PHC record gradually and over a period of several years. It was also apparent that some of the key information from the sample practice patient records was not entered at all.
251. There was some evidence, given by Ms Whiteley, that documents from Dr Mundkur's sample practice records had been scanned. On cross-examination however, the evidence was unclear. In particular Ms Whiteley was unable to confirm that the scanned documents exhibited to her affidavit were actually from Dr Mundkur's sample practice. Dr Mundkur did not identify any of his records as having been scanned. In any event, the requirements of s 40-25(2) are satisfied as the availability of the patient records at the PHC practice meant that any copyright in them was available for use.
Conclusion
252. The preliminary questions I am required to answer raised four main issues. The first is whether copyright subsists in the patient records of the sample practices acquired by Idameneo under the sale agreements and, if so, who owned that copyright prior to the sale. With some very limited exceptions I have concluded that copyright does not subsist in those records. Those exceptions are the record of di Michiel patient 6 and the referral letters written by the sample doctors in respect of their patients. In stating this conclusion I stress that it is a conclusion based only on the evidence before me in these proceedings and is confined to the patient records I have examined. It does not imply that copyright can never subsist in medical or dental records.
253. In the absence of evidence of any assignment or relationship of employment, the owner of the copyright in patient records for di Michiel patient 6 was Dr di Michiel and the owner of the copyright in referral letters written by the sample doctors, prior to the sale, the owner was the relevant sample doctor. The question of ownership of any copyright in the patient records is relevant to the capacity of the vendor under each contract of sale to transfer an interest in that copyright to Idameneo. For the purpose of the remaining issues I have assumed that the vendor under each contract of sale was in a position to discharge any obligation under the sale agreement to transfer an interest in the copyright.
254. The second issue was whether, pursuant to a contract between it and the vendor of the sample practice, Idameneo acquired ownership (legal or equitable) in any copyright or a licence to use that copyright. I have concluded that this question should be answered in the negative in all cases except in relation to handwritten referral letters written by Dr Urquhart. This is because the sale agreement for Dr Urquhart specifically provided for the assignment to
ATC 10962
Idameneo of any copyright that either vendor (Dr Urquhart or Moremint Pty Limited) had in handwritten components of the patient records.255. The third issue was whether Idameneo gave consideration for any acquisition of copyright and whether that consideration was monetary. Given my conclusions in relation to Idameneo's acquisition of copyright it was not necessary to answer this question except in relation to the limited acquisition of copyright in Dr Urquhart's patient records. However, in case I am wrong in my conclusions expressed above, I considered this issue in relation to the sale agreements of all the sample practices on the assumption that an interest in copyright had passed under each of the sale agreements. I concluded that there was no monetary consideration in respect of the di Michiel agreements (ie those for the sample practices of Drs di Michiel, Galati, Urquhart, Tang, Fitch, Parissis and O'Shannessy). I concluded that there was monetary consideration in respect of the Ginnane agreements (ie those for the sample practices of Drs Ginnane, Panwar, Lyons, Sabag and Mundkur).
256. The fourth issue relates to use in producing assessable income. Under Division 373 use of the copyright or the physical records is sufficient. The use of the physical records has been satisfied in relation to the patient records acquired under the di Michiel agreements. Under Division 40, the requirement that the copyright be available for use is satisfied by the availability of the physical records. In so far as the use of copyright is concerned I have concluded that there is evidence of such use only in the case of the patient records from the sample practices of Dr Parissis, O'Shannessy, Ginnane and Lyons.
257. In summary, I have found copyright only in the consultation notes for di Michiel patient 6 and in the referral letters written by the sample doctors. Idameneo acquired an interest only in the handwritten referral letters written by Dr Urquhart. However, as the purchase price under the sale agreement for Dr Urquhart's sample practice was fully apportioned between goodwill and the items in Schedule 1 to the agreement, Idameneo did not give any monetary consideration for the copyright. In view of these conclusions the preliminary questions should be answered as follows:
Proceeding VID 911 of 2005
Question :
- (a) In consequence of each of the following agreements:
- (i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd ("Idameneo") and Peter Umberto di Michiel dated 16 September 1996;
- (ii) Sale of Practice agreement between Idameneo and Joseph Leonard Galati and Reyima Pty Ltd dated 13 August 1998,
did Idameneo hold rights as the owner of copyright comprising an item or items of intellectual property within the meaning of s 373-15 of the Income Tax Assessment Act 1997?
Answer: No.
Question :
- (b) If yes to any part or parts of question (a), in respect of each such item of intellectual property was Idameneo entitled to a deduction in the year of income ended 30 June 1999 under s 373-10(1) of the Income Tax Assessment Act 1997?
Answer : Not necessary to answer.
Proceeding No NSD 1790 of 2005
Question :
- (a) In consequence of each of the following agreements:
- (i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd ("Idameneo") and Ronald Stephen Fitch dated 5 May 2000;
- (ii) Sale of Practice agreement between Idameneo and Duraid Salem Haddad dated 17 May 2000;
- (iii) Sale of Practice agreement between Idameneo and Victor Robert Goleby Critoph and V R Critoph Pty Ltd dated 30 March 2000;
-
ATC 10963
(iv) Sale of Practice agreement between Idameneo, Ton Kuawn Lee, Siam Nai Tang and Lee & Tang Pty Ltd dated 24 February 2000; - (v) Sale of Practice agreement between Idameneo and Michael Roy Wunsh and M R Wunsh Pty Ltd dated 20 June 2000;
- (vi) Sale of Practice agreement between Idameneo and Peter William Urquhart, Peter W Urquhart Pty Ltd and Moremint Pty Ltd dated 19 October 1999;
- (vii) Sale of Practice agreement between Idameneo and Jeremy Kai Sing Lee and Jeremy Lee Pty Ltd dated 29 November 1999,
did Idameneo hold rights as the owner of copyright comprising an item or items of intellectual property within the meaning of s 373-15 of the Income Tax Assessment Act 1997?
Answer : No, except in relation to the Sale of Practice agreement between Idameneo and Peter William Urquhart, Peter W Urquhart Pty Ltd and Moremint Pty Ltd dated 19 October 1999.
Question :
- (b) If yes to any part or parts of question (a), in respect of each such item of intellectual property was Idameneo entitled to a deduction in the year of income ended 30 June 2000 under s 373-10(1) of the Income Tax Assessment Act 1997?
Answer : No.
Proceeding No. NSD 2169 of 2005
Question :
- (a) In consequence of each of the following agreements:
- (i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd ("Idameneo") and John Parissis dated 30 June 2000;
- (ii) Sale of Practice agreement between Idameneo and George Abouyanni dated 28 June 2001;
- (iii) Sale of Practice agreement between Idameneo and Kieran O'Shannessy and Dr Kieran O'Shannessy Pty Ltd dated 2 August 2000;
- (iv) Sale of Practice agreement between Idameneo and John Frank Perica dated 30 May 2001,
did Idameneo hold rights as the owner of copyright comprising an item or items of intellectual property within the meaning of s 373-15 of the Income Tax Assessment Act 1997?
Answer : No.
Question:
- (b) If yes to any part or parts of question (a), in respect of each such item of intellectual property was Idameneo entitled to a deduction in the year of income ended 30 June 2001 under s 373-10(1) of the Income Tax Assessment Act 1997?
Answer : Not necessary to answer.
Question:
- (c) In consequence of the Agreement between Sydney Diagnostic Services (NSW) Pty Ltd (the "SDS Trustee") and Liu & Krausz dated 7 April 2001, did the SDS Trustee hold rights as the owner of copyright comprising an item or items of intellectual property within the meaning of s 373-15 of the Income Tax Assessment Act 1997?
Answer: No.
Question:
- (d) If yes to any part or parts of question (c), in respect of each such item of intellectual property was the SDS Trustee entitled to a deduction in the year of income ended 30 June 2001 under s 373-10(1) of the Income Tax Assessment Act 1997?
Answer : Not necessary to answer
Proceeding No NSD 2467 of 2005
Question:
- (a) In consequence of each of the following agreements:
- (i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd ("Idameneo") and Dr AC Ginnane dated 11 January 2002;
- (ii) Sale of Practice agreement between Idameneo and Mukteshwar Prasad Singh dated 28 September 2001;
-
ATC 10964
(iii) Sale of Practice agreement between Idameneo and Dr Kheang Chheang Heang dated 25 June 2002; - (iv) Sale of Practice agreement between Idameneo and Emerlita Merlie Gallardo and JM Gallardo Pty Ltd dated 11 April 2001,
did Idameneo hold copyright which constituted a depreciating asset or depreciating assets within the meaning of s 40-30(2) of the Income Tax Assessment Act 1997?
Answer : No.
Question:
- (b) If yes to any part or parts of question (a), in respect of each such depreciating asset was Idameneo entitled to a deduction in the year of income ended 30 June 2002 under s 40-25(1) of Income Tax Assessment Act 1997?
Answer : Not necessary to answer.
Proceeding No NSD 195 of 2006
Question:
- (a) In consequence of each of the following agreements:
- (i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd ("Idameneo") and Dr James Lyons dated 7 November 2002;
- (ii) Sale of Practice agreement between Idameneo and Dr Promila Singh Panwar dated 15 July 2002;
did Idameneo hold copyright which constituted a depreciating asset or depreciating assets within the meaning of s 40-30(2) of the Income Tax Assessment Act 1997?
Answer : No.
- (b) If yes to any part or parts of question (a), in respect of each such depreciating asset was Idameneo entitled to a deduction in the year of income ended 30 June 2003 under s 40-25(1) of the Income Tax Assessment Act 1997?
Answer : Unnecessary to answer.
Proceeding No. NSD 193 of 2006
Question :
- (a) In consequence of each of the following agreements:
- (i) Sale of Practice agreement between Idameneo (No. 123) Pty Ltd ("Idameneo") and Juan Sabag dated 27 October 2003;
- (ii) Sale of Practice agreement between Idameneo and Dr Anilkumar Manjunath Mundkur dated 12 February 2004;
did Idameneo hold copyright which constituted a depreciating asset or depreciating assets within the meaning of s 40-30(2) of the Income Tax Assessment Act 1997?
Answer : No.
Question :
- (b) If yes to any part or parts of question (a), in respect of each such depreciating asset was Idameneo entitled to a deduction in the year of income ended 30 June 2004 under s 40-25(1) of the Income Tax Assessment Act 1997?
Answer : Not necessary to answer.
258. The applicant is to pay the respondent's costs of the proceeding including reserved costs.
ATC 10965
Schedule 1: The ProceedingsProceeding | Year of Income | Parties (Sample doctor name in bold) | sale agreement (Date commenced at PHC) | |
1 | VID 911 of 2005 | 1999 | Dr Peter Umberto di Michiel | 16-09-1996
(2/11/1996) |
2 | VID 911 of 2005 | 1999 | Dr Joseph Leonard Galati & Reyima Pty Ltd | 13-08-1998
(11/08/1998) |
3 | NSD 1790 of 2005 | 2000 | Dr Peter William Urquhart , Peter W Urquhart Pty Ltd & Moremint Pty Ltd | 19-10-1999
(25/10/1999) |
4 | NSD 1790 of 2005 | 2000 | Ton Kuawn Lee, Dr Siam Nai Tang and Lee & Tang Pty Ltd | 24-02-2000
(13/03/2000) |
5 | NSD 1790 of 2005 | 2000 | Dr Ronald Stephen Fitch | 05-05-2000
(08/05/2000) |
6 | NSD 2169 of 2005 | 2001 | Dr John Parissis | 30-06-2000
(07/08/2000) |
7 | NSD 2169 of 2005 | 2001 | Dr Kieran O'Shannessy and Dr Kieran O'Shannessy Pty Ltd | 02-08-2000
(09/09/2000) |
8 | NSD 2467 of 2005 | 2002 | Dr AC Ginnane | 11-01-2002
(18/02/2002) |
9 | NSD 195 of 2006 | 2003 | Dr Promila Singh Panwar | 15-07-2002
(02/12/2002) |
10 | NSD 195 of 2006 | 2003 | Dr James Lyons | 07-11-2002
(25/11/2002) |
11 | NSD 193 of 2006 | 2004 | Dr Juan Sabag | 27-10-2003
(20/12/2003) |
12 | NSD 193 of 2006 | 2004 | Dr Anilkumar Manjunath Mundkur | 12-02-2004
(23/03/2004) ATC 10966 |
Sample Doctor
Date of sale |
Key contractual provisions |
Dr Di Michiel
16.09.1996 |
Parties
: Dr Peter Umberto di Michiel (owner); Idameneo (purchaser)
Sale of Practice cl 2: "The Doctor's practice ' comprising ' the following assets: (a) the goodwill of the practice (b) patient lists; (c) the records of patients of the practice; (d) the chattels, plant, equipment, fixtures and fittings itemised in Schedule 1; and (e) any other assets or benefits agreed to be sold or vested in the Purchaser under this Agreement" Title cl 4.1: Title to practice and assets included in sale to pass on completion. Going concern cl 4.5: Until completion practice is to be conducted as a going concern to maintain goodwill. Apportionment cl 3.2: $10,000 of purchase price of $100,000 apportioned to items in Schedule 1. Delivery of records cll 4.2&4.3: patient records, patient lists, financial records and all documents relating to the patients to be delivered to new practice and retained by the purchaser - if stored electronically delivery by disc and hard copy Express exclusions from sale cl 5 : the lease of the old premises; the arrangements with suppliers of services (except telephone); obligations to employees of the sample doctor; and debts owing to the old practice Practitioner contract cl 6.1: On completion Doctor to execute the Practioner Contract. Objective of sale cl 7 : Doctor to ensure "so far as possible" that patients of old practice transfer to PHC new practice. Notification of change cl 8: Procedure by which the Doctor is to notify patients of move Warranties cl 10.1(b): Vendor warrants that he has "absolute title" to the property included in the sale. |
Dr Galati
On or about 13 August 1998 |
Parties:
Reyima Pty Ltd, a company wholly owned by Dr Joseph Leonard Galati and his wife (as owner), Dr Galati; and Idameneo (purchaser).
Sale of practice cl 2.1: practice " comprising " the goodwill of the practice; patient lists; the records of patients of the practice; the chattels, plant, equipment, fixtures and fittings itemised in Schedule 1; all other medical goodwill of [Reyima] developed through the doctor; and any other assets or benefits agreed to be sold or vested in the Purchaser under this agreement. Title cl 5.1: Title to practice and assets included in sale to pass on completion. Going concern cl 5.5: Until completion practice to be conducted as a going concern to maintain goodwill. Apportionment cl 3.2: $199,000 of purchase price of $200,000 apportioned to "goodwill", $1,000 to items in Schedule 1; Delivery of records cl 5.2 & 5.3: patient records to be delivered to new practice - if stored electronically delivery by disc and hard copy Express exclusions from sale cl 6: the lease of the old premises; the arrangements with suppliers of services (except telephone); obligations to employees of the sample doctor; and debts owing to the old practice. Practitioner contract cl 2.2: On entering into sale agreement, Reyima to execute practitioner contract. Objective of sale cl 8: - Doctor and Reyima to ensure "so far as possible" that patients of old practice transfer to PHC new practice.. Notification of move cl 9: procedure by which the Doctor is to notify patients of move. Warranties cl 12.1(b): Reyima warrants that it has absolute title to property. |
ATC 10967 Dr Urquhart19.10.1999 |
Parties:
Peter W Urquhart Pty Ltd, a company wholly owned by Dr Urquhart and his wife (as vendor); Moremint Pty Limited a company that provides services to Peter W Urquhart Pty Ltd and "other medical practitioners … who render medical services at the Old Premises" (as vendor); Dr Urquhart; and Idameneo (purchaser).
Sale of practice cl 2.1: practice: " comprising " the goodwill of the practice; patient lists; the records of patients of the practice copyright in handwritten components of the patient records "to the extent that it is owned by either [Peter W Urquhart Pty Ltd or Moremint]; the chattels, plant, equipment, fixtures and fittings itemised in Schedule 1; all other medical goodwill of [Peter W Urquhart Pty Ltd] developed through the doctor; and any other assets or benefits agreed to be sold or vested in the Purchaser under this agreement. Going concern cl 12.3: until completion practice is to be conducted as a going concern to maintain goodwill. Apportionment cl 3.2 : $1,061,618 of purchase price of $1,224,984 is apportioned to the goodwill of the practice; $97,781 apportioned to the other medical goodwill developed through the Doctor; and $65,585 apportioned to the items in Schedule 1. Delivery of records cl 5.2: Patient records to be delivered to new practice - if stored electronically delivery by disc and hard copy ( cl 5.4 ) Express exclusions Cl 11: the lease of the old premises; the arrangements with suppliers of services (except telephone); obligations to employees of the sample doctor; and debts owing to the old practice- Sch 2 referred to but not tendered. Practitioner contract Objective of sale cl 15 : Fundamental that PHC receive benefit of medical goodwill developed through the Doctor; Peter W Urquhart Pty Ltd and the Doctor to ensure "so far as reasonably possible" that patients of old practice transfer to PHC - Notification of move cl 16: - procedure by which the Doctor is to notify patients of move. Warranties cl 19 : refers to warranties in Sch 5 which was not tendered. |
Dr Tang
24.02.2000 |
Parties:
Dr Ton Kuawn Lee, Dr Siam Nai Tang, Lee & Tang Pty Ltd, (as owner); Idameneo (purchaser).
Sale of practice cl 2.1 : practice " comprising " the goodwill of the practice; patient lists; the records of patients of the practice; the chattels, plant, equipment, fixtures and fittings itemised in Schedule 1; all other medical goodwill of [Lee & Tang Pty Ltd] developed through the doctor; and any other assets or benefits agreed to be sold or vested in the Purchaser under this agreement. Going concern cl 5.5: until completion practice to be conducted as a going concern to maintain goodwill. Apportionment cl 3.2 - $1,690,000 of purchase price of $1,700,000 is apportioned to the goodwill of the practice and the goodwill developed through the Doctor; and $10,000 apportioned to the items in Schedule 1. Delivery of records cl 5.2 - Patient records to be delivered to new practice - if stored electronically delivery by disc and hard copy ( cl 5.3 ) Express exclusions cl 6: the lease of the old premises; the arrangements with suppliers of services (except telephone); obligations to employees of the sample doctor; and debts owing to the old practice.. Objective of sale cl 10: Fundamental that PHC receive benefit of medical goodwill developed through the doctors; Lee & Tang Pty Ltd and the doctors to ensure "so far as reasonably possible" that patients of old practice transfer to PHC -. Notification of move cl 11 - procedure by which the Doctor is to notify patients of move. Warranties cl 14.1(d): Lee & Tang Pty Ltd warrants that it has "absolute title" to the property included in the sale. |
ATC 10968 Dr Fitch5.05.2000 |
Parties:
Dr Ronald Stephen Fitch (owner); Idameneo (purchaser)
Sale of practice cl 2.1 : practice " comprising " the goodwill of the practice; patient lists; the patient records; the chattels, plant, equipment, fixtures and fittings in Schedule 1; and any other assets or benefits agreed to be sold or vested in the Purchaser under this agreement. Going concern cl 5.5: until completion practice to be conducted as a going concern to maintain goodwill. Apportionment cl 3.2: $345,000 of purchase price of $350,000 is apportioned to the goodwill of the practice; $5,000 apportioned to the items in Schedule 1. Delivery of records cl 5.2 - Patient records to be delivered to new practice - if stored electronically delivery by disc and hard copy ( cl 5.3 ) Express exclusions from sale cl 6.1 : the lease of the old premises; the arrangements with suppliers of services (except telephone; obligations to employees of the sample doctor; and debts owing to the old practice. Objective of sale cl 8 : Fundamental that PHC receive benefit of medical goodwill; Vendor to ensure "so far as reasonably possible" that all patients of old practice transfer to PHC. Notification of move cl 9: : Procedure by which the Doctor is to notify patients of move Warranties cl 12.1(b): Vendor warrants that he has "absolute title" to the sale property. |
Dr Parissis
30.06.2000 |
Parties
: Dr John Parissis (owner); Idameneo (purchaser)
Sale of practice cl 2.1: practice " comprising " the goodwill of the practice; patient lists; the patient records; the chattels, plant, equipment, fixtures and fittings in Schedule 1; and any other assets or benefits agreed to be sold or vested in the Purchaser under this agreement. Going concern cl 5.5: until completion practice to be conducted as a going concern to maintain goodwill. Apportionment cl 3.2: $599,000 of purchase price of $600,000 is apportioned to the goodwill of the practice; and $1,000 apportioned to the items in Schedule 1. Delivery of records cl 5.2 & 5.3- Patient records to be delivered to new practice - if stored electronically delivery by disc and hard copy. Express exclusions from sale cl 6 : the lease of the old premises; the arrangements with suppliers of services (except telephone); and debts owing to the old practice. Objective of sale cl 9: PHC to receive benefit of medical goodwill and ensure "so far as reasonably possible" that patients transfer to new practice. Notification of move cl 10: - Procedure by which doctor is to notify Patients of move Warranties cl 13.1(b): Owner warrants that he has "absolute title" to the property included in the sale. |
ATC 10969 Dr O'Shannessy2.08.2000 |
Parties
: Dr Kieran O'Shannessy Pty Ltd (owner); Dr O'Shannessy; and Idameneo (purchaser)
Sale of practice cl 2.1: the dental practice comprising the following assets: (a) the goodwill of the practice (b) patient lists; (c) the records of patients of the practice; (d) the chattels, plant, equipment, fixtures & fittings in Schedule 1; (e) all other dental goodwill of the vendor developed through the dentist, and (f) any other assets or benefits agreed to be sold or vested in the Purchaser under this Deed" Going concern cl 3.4(b)(i): practice sold as a going concern and to be conducted as such until completion to maintain goodwill . Apportionment cl 3.2: $160,011 of purchase price of $200,000 is apportioned to the goodwill of the practice; and $39,989 apportioned to the items in Schedule 1. Delivery of records cl 5.2 & 5.3: Patient records to be delivered to new practice - if stored electronically delivery by disc and hard copy. Express exclusions from sale cl 6 : the lease of the old premises; the arrangements with suppliers of services (except telephone; and debts owing to the old practice and arrangements with employees. NOTE: patient lists and records of the practice are expressly excluded- inconsistent with clause 2.1(b) & (c). Objective of sale cl 8: PHC to receive benefit of dental goodwill of owner developed through the dentist; owner and dentist to ensure "so far as reasonably possible" that patients transfer to new practice. Notification of move cl 9: Procedure by which doctor is to notify patients of move Warranties cl 12.1(b): Owner and dentist warrants that owner has "absolute title" to the property included in the sale. |
Dr Ginnane
11.01.2002 |
Parties:
Dr AC Ginnane (owner) and Idameneo (purchaser)
Sale of practice cl 2.1: the practice " comprising " goodwill and items in Schedule 1. Going concern cl 2.7: practice is sold as a "going concern" and until completion in a manner is to be conducted so as to maintain the goodwill. Apportionment: no mention made Delivery of records: no mention and no mention of patient records as being included in the sale. Express exclusions cl 3 : the lease of the old premises; the arrangements with suppliers of services & employees; and debts owing to the old practice. Objective of sale: no mention Notification of move: no reference Warranties cl 6.1(b): Vendor warrants that he has "absolute title" to the property included in the sale. |
ATC 10970 Dr Panwar15.07.2002 |
Parties
: (1) Dr Promila Singh Panwar (owner); (2) Idameneo (purchaser)
Sale of practice cl 2.1 : practice " comprising " the goodwill and the items in Schedule 1. Going concern cl 2.7: practice is sold as a "going concern" and until completion is to be conducted so as to maintain goodwill. Apportionment: no mention made Delivery of records: no mention made and no mention of patient records as being included in the sale Express exclusions cl 3 : the lease of the old premises; the arrangements with suppliers of services & employees; and debts owing to the old practice. Objective of sale: no mention made Notification of move: no mention made Warranties cl 6.1(b): owner warrants that she has "absolute title" to the property sold. |
Dr Lyons
7.11.2002 |
Parties:
Dr James Lyons (owner); Idameneo (purchaser)
Sale of practice cl 2.1 : practice " comprising " the goodwill and the items in Schedule 1. Going concern cl 2.7: practice is sold as a "going concern" and until completion is to be conducted so as to maintain goodwill. Apportionment: no mention made Delivery of Records: no mention made and no mention of patient records as being included in the sale Express exclusions cl 3 : the lease of the old premises; the arrangements with suppliers of services & employees; and debts owing to the old practice. Objective of sale: no mention made Notification of move: no mention made Warranties cl 6.1(b): Owner warrants that he has "absolute title" to the property sold. |
Dr Sabag
27.10.2003 |
Parties:
Dr Juan Sabag (owner) and Idameneo (purchaser)
Sale of practice cl 2.1 : practice which " includes " the goodwill and the items in Schedule 1. Going concern cl 2.6: practice is sold as a "going concern" and until completion is to be conducted so as to maintain the goodwill. Apportionment: no mention made Delivery of records: no mention made and no mention of patient records as being included in the sale Express exclusions from sale cl 3 : the lease of the old premises; the arrangements with suppliers of services & employees; and debts owing to the old practice. Objective of sale: no mention made Notification of move: no mention made Warranties cl 6.1(b): Vendor warrants that he has "absolute title" to the property sold. |
ATC 10971 Dr Mundkur12.02.2004 |
Parties:
Dr Anilkumar Manjunath Mundkur (owner) and Idameneo (purchaser)
Sale of practice cl 2.1 : practice which " includes " the goodwill and items in Schedule 1. Going concern cl 2.6: practice is sold as a "going concern" and until completion is to be conducted so as to maintain the goodwill. Apportionment: no mention made Delivery of records: no mention made and no mention of patient records as being included in the sale Express exclusions from sale cl 3 : the lease of the old premises; the arrangements with suppliers of services & employees; and debts owing to the old practice. Objective of sale: no mention made Notification of move: no mention made Warranties cl 6.1(b): Vendor warrants that he has "absolute title" to the property sold. |
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