Theories Pty Ltd v Holt and Another [2014] NTSC 40

In a recent decision in September 2014, the Supreme Court of Northern Territory delivered judgement in relation to a dispute in relation to contracts between two dentists, or at least a dentist and a dental company. Much of the judgement is in relation to procedures, but there are some relevant points for dentists or dentists who are employing or employed by dentists.

In short compass, the issues were that a dentist had worked for another dentist, reduced his hours and then resigned and the employing dentist, the principal dentist, had sought to obtain and seek damages from the employed dentist.

This was an appeal from an order of the Magistrate in Darwin.

It is a reasonably short judgement and although it has no import in general or dentists, it is worth reading for the reason that in factual disputes between dentists can get complicated when they are litigated in superior courts.

A recent decision of the ACT Supreme Court can be found here.

In  Robinson v Ng [2014] ACTSC 227, on 7 November 2014, judgement was handed down by Master David Mossop in the ACT Supreme Court. It was a claim of negligence bought by a patient against a dentist.

Briefly during the course of an extraction, part of the root of the tooth was pushed upwards and lodged into the plaintiff’s sinus. As a result, surgery was required and damages arose from those events.

The judgement is of significant length, but the important points in relation to this for dental practitioners are the damages due to the particular nature of the case. The general damages amounted to something over seven hundred thousand dollars ($700,000.00). There was a dispute in the evidence between what the Defendant dentist and the Plaintiff patient said. A large amount of it turned on the warnings and the circumstances before and after the extraction.

At some point, a second radiograph was taken after the tooth had fractured and it was held by the Court that the dentist had breached his duty by not ceasing to treat the patient at that point and referring her to an oral surgeon to have the root removed. The Court found that the Defendant had breached his duty of care to the patient and this breach had caused the wall of the maxillary sinus to be perforated.

Postoperative treatment as well as remedial treatment was performed, but the patient unfortunately suffered some adverse outcomes, including Bell’s palsy and a significant impact on her ability to work. At the time of trial, she was still taking analgesic (a type of painkiller) every four (4) hours and is unable to return to normal work as a veterinary surgeon.

A court found that the Bell’s Palsy that was suffered was more likely than not to be caused by the dental procedure. One hundred and seventy thousand dollars ($170,000.00) was awarded for general damages. Further, the loss of earning capacity was established to be two hundred and sixty-four thousand ($264,000.00) plus superannuation. There were also some out of pocket expenses for future and present and a significant amount was allowed for Griffiths v Kerkemyer damages which are in relation to domestic assistance. This amount was some forty-nine thousand, six hundred and ninety- eight thousand dollars ($49, 698.00).

The court made a particular comment about the fact that the notes were changed after the consultation when the defendant dentist was aware of having created the communication with the sinus and having pushed the tooth fragment into the sinus.

Practitioners should be aware that there were other documents produced, which were not part of the patient record, including the defendant’s account to his insurer and other comments by other staff members. The court found at [87] that the Defendant dentist’s evidence was based on a very careful and intelligent reconstruction of what had occurred, based on the available clinical notes and his recollection of what was likely to have occurred. The reconstruction was one which, although it was apparently detailed, was one that emphasised  matters favourable to the defendant’s case.

At [97], the court said that it considered that the dentist recognised, prior to the commencement of the extraction, the potential for tooth fracture and the need to consider referral if problems emerged. The court found that he was likely to have mentioned that is a possibility to the plaintiff, although not as forcefully or in as a direct a manner as he may have wished with the benefit of hindsight.

The court was not satisfied that there was any explanation other than at the most general level of the risks of continuing or the risks of complications if the extraction was carried out by someone without greater surgical experience.

The independent dentist, who gave evidence, said that the dentist should have ceased the attempted extraction no later than the point when he examined the second radiograph demonstrating the location of the broken root in the sinus.

The Court said, importantly, at [140]:-

The dentist allowed himself to …… to continue in circumstances where he should not have. I do not accept the submission made by the defendant that the defendant had an obligation to comply with the plaintiff’s wishes. That is particularly so when those wishes were formulated in the course of a long and difficult extraction in circumstances where the patient was recognised by the dentist to have become panicked. Therefore, even if I had accepted the defendant’s evidence I would nevertheless found that he fell below the standard of care expected of a reasonably competent general dentist.

It is important for practitioners to take away from this case that:-

1. When risks of adverse outcomes are high, explanations ought to be given to patients and given the opportunity for referral. Merely stating to the plaintiff that there might be a problem is not sufficient, particularly if that problem comes home;
2. When patients desire to have a tooth removed, it is important for practitioners to use their judgement and go against the patient’s wishes if the patient were to understand that the consequences of continuing would be dire. It would appear in the present circumstances that the dentist felt that he had to continue past the point of his ability and even though the patient may still have pressed him to continue to do it, it was up to the dentist to decide that he could not treat any further and arrange an earlier referral. It was clearly unfortunate that the timing of this event was around the Christmas period and specialists were not as available as readily as they might have been; and
3. When one is removing a tooth that has potential for difficulty or complications, if it is at all possible, then the patient should be escorted with a staff member or indeed the dentist to the oral surgeon or the relevant specialist to ensure that they get prompt, immediate attention.

Brunswick Family Dental Pty Ltd v Enegd [2014] VSC 325

Recently, an interesting case was decided in relation to an injunction in Victoria. The matter before the Court concerned an employer dentist seeking to restrain a contractor from engaging in dental practice within an area of alleged restraint.

FACTS

From about 14 years until May 2013, the principal dentist conducted a dental practice, trading as Brunswick Family Dental Surgery (the dental practice company) in Melbourne. In 2013, the dental practice company was incorporated and previously the principal dentist had engaged the dentist contractor as a subcontractor. The dentist contractor worked as a dentist until May 2014 in the practice, at which time she left to set up her own dental practice in North Carlton, about 3 km from the dental practice company. In the application, the dental practice company sought an injunction to restrain the dentist contractor from practicing as a dentist within 5 km of the Brunswick address.

What is relevant for dental practitioners, employers and independent contractors is that, apparently, a template was used for the restraint clause in the draft contract and this was not executed.

LAW

In a previous case[1], the Supreme Court of Victoria had approved a statement of principles in relation to restraint clauses, and they are reasonably well settled. It’s important for practitioners to understand that any contractual provision to restrain is prima facie void. This presumption can be rebutted if the restriction is reasonable. The validity of such a clause is judged at the date of the execution of the agreement that contains the restraint of trade clause. It is the case that a stricter view is taken in relation to restraint of trade for employment, as opposed to restraints in the sale of a business. The onus of proof in relation to those circumstances regarding the restraint is on the person seeking, or the corporation seeking, to enforce the covenant. As far as the interests of the parties are concerned, the restraint must impose no more than an adequate protection to the party who is seeking the restraint. The meaning of the restraint may be construed by reference to the facts, documents and any surrounding circumstances.

DECISION

This decision of McCauley J of the Supreme Court of Victoria, delivered on 8 July 2014, is in relation to an injunction only, and is not in any way determinative of the final issues. The matter is yet to go to trial. The critical aspects of the case that should be borne in mind by practitioners signing independent contracts or, indeed, employment agreements with dentists or clinicians, is that it is much easier for a party to enforce the agreement if the agreements are actually executed (signed). It is often the case that practitioners draft agreements in whole, or in part, without legal assistance – merely taking a template and drafting changes themselves-  and then leave the documents unexecuted. This case demonstrates the risks associated with non-execution of critical employment or contractor agreements that are not well drafted. Much of the case speaks about the detail in relation to correspondence between the parties and involves emails, draft contracts, and face-to-face meetings.

Ultimately, the Court found that, at least, on an interlocutory basis,  the dental practice company had established a prima facie case that there was an agreement with the dentist contractor. Even if that was the case, the Court said that there would be a number of hurdles at trial, which would pose a real threat to that success. And those were summarised as difficulties with oral agreements, implied agreements, and the issue of estoppel (where a party is stopped from a certain course because of an expectation induced by that person)

The whole construction of the restraint of trade clause was problematic. In essence, the restraint of trade clause, as inserted in the contract was unclear and perhaps mistaken. The Court ultimately agreed with the dentist contractor’s submission that the issues of construction and enforceability of the restraint of trade clause undermined the likelihood that the dental practice company would succeed at any trial.

Finally, the laws and policy against restraint are such that a successful plaintiff would need evidence that the protections were reasonable at the date of the agreement. The number of patients treated, the financial circumstances around the practice of the dentist contractor and the size of the practice of the dental practice company were all discussed.

Apparently the dentist contractor was only seeing 2-4 patients a week and, by contract, the dental practice company had seven other dental practitioners and a ‘very substantial client base’. The Court did not underestimate the possibility that there will be some flow of clients to the dentist contractor from the dental practice company practice but, even allowing for that, it would take some time before there would be serious inroads into the number of clients that had been provided service by the dentist contractor at the dental practice company ( some 7500). Ultimately the Court  was not satisfied that the dental practice company’s claims had sufficient probability of success, and so denied the injunction sought by the dental practice company.

DISCUSSION

There would seem to be a number of important considerations arising from this judgement for dental practitioners who seek to enforce restraints against other dental practitioners in contracts.

The first is that to rely on any contract, it should be executed and both parties should seek legal advice prior to and at the time of execution

Secondly, a restraint should be carefully drafted and checked by a legal practitioner and only formed on the basis of some notional template provided by any organisation.

Thirdly, careful thought needs to be given to what is reasonable in terms of restraint between the parties in both geographic area and time period.

Fourthly, unless the restraint arises from the sale of a practice, and, therefore, the goodwill that’s associated with it, it will be much more difficult to enforce restraints against previous employees or contractors, unless the contracts and agreements are drafted very carefully with consideration and that both parties have agreed that the terms of the restraint are reasonable.

The judgement, and that of Wallis Nominees (Computing) Pty Ltd v Matthew William Pickett is available on www.austlii.edu.au and should be read by practitioners who have employment or contractor agreements and seek to enforce restraints.

It is prudent for practitioners who employ clinicians, to seek appropriate legal advice and not to “cut and paste” draft restraint clauses from other documents: because to do so risks these clauses being inappropriate, unreasonable and to be struck out.

It is imperative to engage a lawyer to give you advice and to draft and settle your contract.

Brad Wright

Chambers July 2014

In this case, the orthodontist appealed to review the decision of the Board to caution him and to undertake education, and to refund patient fees. The decision was overturned, save on one count that there was an adverse finding about records and the  finding in relation to record keeping,and treatment planning , and the initial finding was upheld.

There was no order as to costs.

Practitioners should be aware of the need for adequate record keeping as published in the DBA guidelines.

The decision is interesting in that a Board decision (that had found the practitioner guilty of unsatisfactory professional conduct) was overturned in relation to a complex orthodontic case.

There is not any new law, rather the case turns on its facts and the evidence in paragraphs 10-16.

Brad Wright

April 1 2014

Many of you will have received notification that the pursuit of the CDDS debts for non compliance with Section 10 will ease. It will be interesting to see what the actual legislation looks like. The ADA Bulletin yesterday was not very comforting, as opposed to the Minister for Health’s Press release…..

PRESS RELEASE

The Abbott Government today introduced legislation to bring an end to the Rudd-Gillard Labor Governments’ vindictive pursuit of dentists who treated more than a million Australians under the Medicare Chronic Disease Dental Scheme (CDDS).

Health Minister Peter Dutton told Parliament the Dental Benefits Legislation Amendment Bill 2014 would relieve the uncertainty for dentists, who had faced demands for repayment of Medicare Benefits paid to them, by allowing the Chief Executive Medicare to waive debts of those dentists.

Mr Dutton said the dentists had done nothing more than make minor paperwork errors when treating patients under the CDDS.

“Labor had an ideological opposition to this scheme. The then Government sought to use the dentists’ technical oversights as a means of discrediting the scheme – it was a shameful act,” Mr Dutton said.

“Labor’s desire was simply to destroy a scheme helping Australians solely because its architect was Tony Abbott. In so doing they sought full recovery of all benefits paid to these dentists – an excessively severe punishment that caused huge anxiety. Dentists were simply used by Labor as political pawns.”

Mr Dutton said the CDDS set up in 2007 by the current Prime Minister and then Health Minister Tony Abbott was the biggest ever investment into dental care with concession card holders representing 80 per cent of people receiving treatment.

“When Labor finally admitted its pursuit of dentists, who treated these patients in good faith, for repayment of the Medicare Benefits they’d received; it set up a tortuous process to resolve the situation.

“This Bill will provide a better process for waiving those debts.”

Mr Dutton said the amendment would not excuse dentists who did not comply with other legal requirements of the CDDS or who committed fraud.

The Bill also introduces changes to Labor’s Child Dental Benefits Schedule (CDBS) to bring the compliance framework for the CDBS into alignment with Medicare and allowing the Independent Professional Services Review authority to examine suspected cases of inappropriate practice.

ADA INTERPRETATION

Debts for services post April 2010

• If the service had been provided after 1 April 2010, debts will be waived where the provider can provide evidence of intent to comply with section 10(2) of the Determination.  This will allow the current criteria for waivers to be applied more efficiently.

Cal me cynical but I don’t think its over….

Brad Wright

March 27 2013