IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
Common Law Division
Employment and Industrial List
S ECI 2020 03703

AUSTRALIAN CARDIOLOGY SERVICES PTY LTD (ACN 621 294 068) 	Plaintiff	
		
v  		
		
NIMA RUDD	Defendant	

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JUDGE:	Ierodiaconou AsJ	
WHERE HELD:	Melbourne	
DATE OF HEARING:	24 and 30 September 2020	
DATE OF RULING:	1 October 2020	
CASE MAY BE CITED AS:	Australian Cardiology Services Pty Ltd v Rudd	
MEDIUM NEUTRAL CITATION:	[2020] VSC 645                                     (revised 5 October 2020)	

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PRACTICE AND PROCEDURE – Application for an interlocutory injunction – Alleged breach of equitable obligations of confidence in respect of patient records – Whether there is a serious question to be tried – Whether the balance of convenience weighs for or against the granting of the injunction – Whether the plaintiff is disentitled to relief on the basis it allegedly does not have clean hands – Injunction granted.

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	Mr J Castelan	Logie-Smith Lanyon	
			
For the Defendant	Mr M Felman	Sparke Helmore	

TABLE OF CONTENTS

Summary	1
Evidence	2
Background	2
Is there a serious question to be tried?	11
Plaintiff’s submissions	12
Defendant’s submissions	13
Analysis	15
Does the balance of convenience weigh for or against granting an injunction?	18
Plaintiff’s submissions	18
Defendant’s submissions	20
Analysis	23
Is the plaintiff disentitled to relief on the basis it does not have clean hands?	25
Defendant’s submissions	25
Plaintiff’s submissions	26
Analysis	26
Conclusion	27

HER HONOUR:
1	The plaintiff operates a cardiology clinic in Mildura.  The defendant is a cardiologist who previously worked at the plaintiff’s clinic.  He recently established his own cardiology clinic in Mildura.  Since then, the defendant has accessed a database used by the plaintiff, Health Track.  It contains patient records and contact details.  The defendant has also caused posters to be placed in Mildura regarding the opening of his new clinic and referring to the plaintiff.  The plaintiff seeks interlocutory injunctions and other orders against the defendant, alleging that he has breached equitable obligations of confidence in respect of patient records, and engaged in misleading or deceptive conduct in respect of the posters.  The defendant rejects the allegations of unlawful conduct.
Summary
2	Most, but not all of the orders sought by the plaintiff will be made.  There will be an order that the defendant not use or disclose the contact details of patients on the plaintiff’s Health Track database, and that he deliver up documents from that database.  There will be an exclusion for patients who have already consulted the defendant at his new practice, providing that he deposes an affidavit containing a list of such patients, and an exclusion for patients who have provided a consent that the plaintiff provide their health information to the defendant.  As for the affidavit of documents sought, these orders need not be made now, save for category 5(a), which relates to documents that the plaintiff will need to deliver up.  The orders seeking to restrain the defendant from soliciting, canvasing, contacting or approaching patients will not be made.  The orders restraining the defendant from publishing, representing or causing to publish or represent the plaintiff clinic being closed and / or owned by Tristar Medical group will be made by consent.
Evidence
3	The plaintiff relies on the affidavits of:
(a)	Dr Vivek Mutha, a cardiologist and a director and part-owner of the plaintiff, sworn on 23 September 2020 (‘first Mutha affidavit’) and 29 September 2020 (‘second Mutha affidavit’);
(b)	Patricia Margaret Lauder, a cardiac sonographer and cardiac technician employed by the plaintiff, sworn on 22 September 2020 (‘first Lauder affidavit’) and 30 September 2020 (‘second Lauder affidavit’);
(c)	Alaiza Diez, a receptionist employed by the plaintiff, sworn 22 September 2020 (‘Diez affidavit’).
(d)	Stacey Marie Johnson, a communications manager employed by the plaintiff, sworn 22 September 2020 (‘Johnson affidavit’).
4	A signed statement of a patient of the plaintiff was provided to the Court during the hearing on 30 September 2020.  However, given the lack of evidence concerning it, and because it is not deposed, it is disregarded for the purposes of this application.
5	The defendant relies upon his affidavit affirmed on 29 September 2020 (‘the defendant’s affidavit’).
Background
6	The following facts are not in dispute unless indicated otherwise.
7	In 2016, Dr Mutha established a business, Heart of Melbourne.  It operates a number of cardiology clinics around Melbourne.  At times the defendant has provided services as a contractor to Heart of Melbourne. 
8	The plaintiff was incorporated in August 2017.  Its registered directors were, and are, Dr Mutha, Dr Muhammad Asrar Ul Haq (‘Dr Asrar’) and Dr Khaled El-Sheik.  Its shareholders were, and are, El-Sheik Family Holdings Pty Ltd and Heart Ventures Pty Ltd.
9	The plaintiff’s consulting rooms are located above a general practice operated by interests associated with Dr El-Sheik and known as Tristar Medical Group.
10	The defendant was never an employee of Heart of Melbourne or the plaintiff.  The defendant did not work exclusively for Heart of Melbourne and the plaintiff.  For instance, he also worked at the Mildura Base Hospital.
11	There was no written agreement signed by both the plaintiff and the defendant that governed their working arrangement.  Tax invoices were generated by the plaintiff and the defendant was paid as a contractor.  In dispute between the parties is whether there was ever an oral agreement giving the defendant part ownership of the plaintiff.  The defendant says he identified himself as a director of the plaintiff and Heart of Melbourne on his LinkedIn account.  The defendant says that in 2017 Dr Mutha and Dr Asrar asked him to join them as a co-director and co-owner of Heart of Melbourne.  The defendant says in late 2017 there were discussions and the three of them agreed he would join as co-director and co-owner of the plaintiff and Heart of Melbourne and that he would “retain my own patients”.  He says some of the fees that he generated were used to build the plaintiff and pay off debts of Heart of Melbourne.  The plaintiff denies these allegations.  It says the defendant pushed for shares but nothing was ever agreed and he was paid the full reporting fee for cardiologists according to industry standards.  The defendant contributed $30,000 towards a new Heart of Melbourne clinic and the plaintiff refunded that money after he ceased working for it.
12	The plaintiff uses a cardiology patient management system known as Health Track and pays a licence fee to do so.  It shares its use of the database with the Heart of Melbourne business.  Health Track is accessible online.  It contains confidential patient information.  Doctors and staff, including the defendant, had a password.  Doctors and staff entered referral information onto the Health Track database.  Some referrals were to the plaintiff’s doctors generally, and some were addressed specifically to the defendant.
13	The defendant says that he took a copy of the referral forms and uploaded them to his own computer.  He says that he also made his own notes and kept a hard copy file in respect of patients that he saw while working at the plaintiff’s clinic.  The defendant says that he owns the information and records he maintained for the patients who consulted him while he worked at the plaintiff’s clinic.  He says this was consistent with the verbal agreement with Dr Mutha and Dr Asrar that he retain his own patients.  The plaintiff says there was no such arrangement.
14	The defendant retains information on patients that he created while working at the plaintiff’s clinic.  In his affidavit, he identifies which patients he treated at the plaintiff’s clinic based on notes that he has in his possession.
15	The plaintiff owns the confidential information in the Health Track database that relates to its clinic.
16	On 14 July 2020, the defendant was ‘suspended’ by the plaintiff and Heart of Melbourne.  His access to the plaintiff’s Health Track account was also suspended from that date.  There is a dispute between the parties as to the circumstances of the suspension.  The defendant says on 30 July 2020, during his suspension, Dr Asrar asked him to treat a patient.  Other than that, he did not see patients from 14 July 2020 to 31 August 2020.
17	There is a dispute between the parties as to whether there was a discussion about the defendant becoming a shareholder of the plaintiff during his period of suspension.  The defendant says he signed a consultancy agreement.  It is common ground that Dr Mutha and Dr Asrar did not sign such an agreement, and that there is no written agreement executed between the plaintiff and defendant.  There is also a dispute between the parties as to what was said to third parties concerning the defendant’s absence from the clinic.
18	On 27 August 2020, the defendant registered the business names ‘Dr Rudd Cardiology’ and ‘Heart of Mildura’.  His website contained reference to ‘Heart of Melbourne’ although he no longer worked there, stating: “Telehealth consultations are available at Heart of Melbourne.  To organise please call [defendant phone number]”.
19	On 27 or 28 August 2020, the defendant purchased a licence to use Health Track and does so.
20	On 31 August 2020, the defendant leased premises in Mildura.  On 9 September 2020, he opened his own practice, Dr Rudd Cardiology.  The defendant says he then contacted 30 – 40 pre-existing patients, namely patients he treated while at the plaintiff’s clinic, to inform them he had opened his own clinic.  The defendant says that patients also walked into his clinic.  He said that the patients provided a written consent for their records at the plaintiff’s clinic to be transferred to him.
21	The plaintiff’s IT consultant detailed 18 times between 3 and 7 September 2020 when the defendant accessed the plaintiff’s Health Track database using Ms Lauder’s account.  The account was accessed using Ms Lauder’s password.  The client name for access was given as ‘Nima iPad pro 1’.  The defendant admits accessing the plaintiff’s Health Track database during this time.  He deposes that it was accidental if he did so and he believed he was logging in using his own account.  There is a dispute between the parties as to how the defendant would have Ms Lauder’s password on his iPad.
22	The plaintiff is concerned that the defendant has copied its Health Track data.  The defendant denies this.  The defendant says that he has used his own key patient notes and test results. 
When I first opened my practice, I contacted patients using the contact details I had maintained in my own electronic and hard files, on my phone and/or provided to me on new referral forms/letters from GPs or the Mildura Base Hospital.
I was unaware if or when patients had appointments with ACS. I was told by some of patients that they had appointments booked with ACS. I asked these patients whether they wanted to continue to see me, but I did not actively encourage them to cancel their appointment(s) with ACS.
Over the course of several days in early September, I sent a group text message to my patient base advising I no longer worked at ACS at the Tristar premises and had opened a new practice. I provided the address for the new practice.
Some of the patients who received my text messages called me and said words to the effect, ‘I have an appointment with you at ACS’. I told them I was no longer working at ACS and had started my own practice in Mildura. Other patients told me they had received a message from ACS to see me at Tristar's premises. I told them I was no longer at that location.
I did not actively encourage my patients to leave ACS. I did not want to put them under any kind of stress or pressure. I left this decision to them.
…
It has been alleged at paragraph 35 of the Mutha Affidavit that there is no way I could have known the contact details of my patients unless I had access to ACS' Health Track database. This is not true. As previously stated, I retained hard copy key notes containing my patient's contact information, kept photographs of hand-written notes on my phone and computer (as typing them would have been time consuming) and was otherwise able to refer to referral forms/letters. I also had my patient's phone numbers on my own mobile phone because I had contacted them in the past to inform them of their test results or to conduct a phone consultation.
ACS was not prepared to transfer any of the patient notes I had uploaded to Health Track. I wanted access to these notes so I could continue to effectively treat my patients at their request.
23	Since establishing his own business, the defendant has contacted patients who had attended the plaintiff’s clinic and with whom he had contact while he worked there.  There is a dispute between the parties as to whether he has also contacted patients of the plaintiff’s clinic who he had not previously met since establishing his own clinic.
24	Eight patients (patients A – H) have provided statements that they have never seen the defendant but were contacted by him.  Some have signed their statements.  None have provided affidavits.  Their statements are contained in or exhibited to the Diez affidavit.
(a)	Patient A stated:
I received a message (text) from Dr Rudd, but I have never been a patient of his, but he was trying to get me to be his patient. He wanted me to go the surgery in 13th Street.
(b)	The defendant says in response to patient A’s statement:
I cannot recall seeing [patient A]. I have no patient notes for [patient A].
If I contacted [patient A] then I may have obtained his number from his next of kin or a relation…
(c)	Patient B stated:
I got the text Sunday night, 13th September 2020. Then I rang him (Dr Rudd), Monday morning. I asked him what was happening. He said to forget his appointments here (Australian Cardiology) as it has been cancelled. I’ve never seen him. I am aware that my GP, Dr Kazi sent my referral to Australian Cardiology.
(d)	The defendant says in response to patient B’s statement:
I saw [patient B] at Rudd Cardiology in mid-September 2020 for a consultation and electrocardiograph.
[Patient B] had been referred to me by his GP, so I already had his contact details on the referral form and was able to contact him. I did not tell [Patient B] to “forget his appointment with ACS as it has been cancelled”.
(e)	In relation to patient C, the plaintiff says:
[Patient C] was another patient who had never seen any of the cardiologists at the ACS Clinic but was referred by Dr Shanth Ram and was booked on for an appointment on 7 September 2020. She did not attend ACS on that day and I telephoned her. She told me that she had already seen the defendant and had received a call/SMS from him telling her to come to the clinic at 240a Thirteenth Street.
(f)	In relation to patient C, the defendant says:
[Patient names including patient C] are pre-existing patients of mine. I did not direct these patients to come to my clinic or advise that their appointment with ACS has been cancelled.
…
[Patient C] walked into my clinic with a valid referral to see me.
(g)	In relation to patient D, the plaintiff says:
[Patient D] was a new patient who had never been to the ACS Clinic but was referred by Dr [name of Dr] and was scheduled for an appointment to see a cardiologist, Dr Balakrishnan [who works for the plaintiff] on 10 September 2020. On the day, the patient did not arrive for his appointment, so I phoned him. He told me that he was very confused as the defendant had rung him on 10 September 2020 and told him to come to the clinic at Thirteenth Street. He attended there.
(h)	In relation to patient D, the defendant says:
[Patient D] was a walk-in patient. He attended at my clinic to ask if he could have an appointment with me or Dr Shanth Ram (Dr Ram), who operates the clinic in front of mine. [Patient D] told me the Mildura Base Hospital had referred him. I asked him to get a formal referral before he could see me. I later received a referral and he is now a patient of Rudd Cardiology.
(i)	In relation to patient E, the plaintiff says:
[Patient E] was another new patient where the referral had been received on 7 September 2020 and an appointment was made for 11 September 2020 with Dr Balakrishnan. The patient cancelled but did not provide any further information.
(j)	In relation to patient E, the defendant says:
[Patient E] walked into my clinic, which is not unusual. There is a sign at the front of my clinic informing patients that I provide bulk-billing cardiac services. My clinic is located at the front of the hospital and surrounded by multiple GP and specialists clinics. People often walk-in by accident. I never asked [Patient E] why she came to see me.
(k)	In relation to patient F, the plaintiff says:
[Patient F] is a patient who was seen by Dr Mutha on 8 August 2020. When she attended at the ACS Cardiology Clinic, she told ACS's practice nurse, Doreen Diez. that she was rung by the defendant for her consult. She had never previously had any consultation with the defendant. I am aware of this as Doreen told me.
(l)	In relation to patient F, the defendant says:
[Patient F] was not my patient when I was at ACS. I saw [patient F’s husband], [patient F]'s husband. If [patient F] was called or contacted in any way, which I cannot recall, it was likely because I already had [patient F’s husband]'s contact details. [Patient F] decided to come and see me with her husband, , and they both continued to be my patients.
(m)	In relation to patient G, the plaintiff says:
[Patient G] is a patient who was never seen by the defendant but was rung by the defendant. On 14 September 2020, Jaana Kivi, called [patient G] to confirm her appointment scheduled for the 15 September 2020 and made a note in the clinic's diary. The note said that she told Jaana that she was contacted by the defendant, but wanted to continue seeing Dr Asrar. After the conversation with Jaana and due to the confusion, Lorraine Mitsikas contacted her to settle the confusion. Lorraine called me afterwards and informed me of this conversation. Lorraine is the Operations Manager at Heart of Melbourne.
(n)	In relation to patient G, the defendant says:
The following patients were also pre-existing patients of mine… [patient G].
(o)	In relation to patient H, the plaintiff says:
[Patient H] saw Dr Balakrishnan on 10 September 2020 and wanted to book another appointment. I called him on the week of 14 September 2020 to inform him of his appointment. I told the patient that if he receives any confusing messages or calls to ignore it or let me know. This is when he informed me that the defendant had called him.
…
As for paragraph 125 and the patient, [patient H], who the defendant does not recall, he received a text message from the defendant saying that his appointment with ACS was no longer happening. Now produced and shown to me and marked with the letters “VM-7” is a true copy of a screenshot from the Plaintiff’s Health Track Database relating to that patient. The note dated 9 September 2020 states:
I called to confirm appt with patient and they were very confused as they had received a text message from a different cardiologist (Dr. Rudd) saying that the appointment was no longer happening and to call Dr. Rudd’s [sic] rooms to book in an appointment – I explained to him that this appointment was still going ahead and that Australian Cardiology was the Company that he was referred to. The patient was upset that some other doctor was able to get his contact information. I explained that we would never give out patient information without consent and that his information was not given to Dr. Rudd by us. I apologised to the patient that he received this message and explained that if he would like to talk to the cardiologist about it, he is more than welcome. I have told Dr. Bala about this patient’s situation so that he is aware before the consultation.
(p)	In relation to patient H, the defendant says:
I cannot recall [patient H]. However, if I called [patient H], I would have already had his contact number through a referral form or family member as described above.
25	In dispute between the parties is what representations have been made to patients and the community regarding the defendant’s departure from the plaintiff and the plaintiff’s operations.
26	Since establishing his own business, the defendant has caused posters to be erected at various sites around Mildura.  They state, amongst other things: “Dr Rudd is no longer working at Tristar Medical Group (Australian Cardiology)…”  Tristar Medical Group and the plaintiff are separate entities.  The plaintiff says general practitioners do not refer to other general practitioners, so if they believe Tristar is the same as the plaintiff then it will discourage referrals to the plaintiff.  Moreover, as the first bulk billing clinic in Mildura, Tristar is considered to be a disruptor within the Mildura general practice community.  The defendant deposes that his intention in creating the posters was to provide information that he was no longer working at the Tristar premises and had opened a new clinic at a new location.
27	The proceeding was commenced by writ with indorsement of claim filed on 23 September 2020.  The plaintiff filed its summons seeking interlocutory relief that day.  On 24 September 2020, there was a hearing of the application.  The defendant had not yet had time to file materials.  The following orders were made that day:
6.	Until 4.00pm on 30 September 2020, the defendant, whether by himself, his servant, agent or otherwise not use or disclose the contact details of patients on the Plaintiff’s Health Track database as set out in annexure ‘VM-2’ to the Dr Mutha affidavit.
7.	Until 4.00pm on 30 September 2020, the defendant, whether by himself, his servant or agent, is restrained from publishing, representing or causing to publish or represent:
a.	that the ACS Cardiology Clinic at Level 1, 87-89 Langtree Avenue, Mildura, Victoria  3500 (‘the ACS Clinic’) is closed; and/or 
b.	that the ACS Clinic or ACS is owned by Tristar Medical Group.
8.	The defendant make reasonable endeavours to remove or otherwise dispose of any copies of the poster identified at page 43 of annexure ‘VM-1’ to the Dr Mutha affidavit.
28	At the next return of the summons, namely on 30 September 2020, the interim orders in paragraphs 6 and 7 were extended until midnight on 1 October 2020.
Is there a serious question to be tried?
29	The legal principles applicable to interlocutory injunctions are well-established and not in dispute.  The first issue is whether there is a serious question to be tried.  This issue shall be primarily examined in respect of the plaintiff’s allegations that there is a prima facie case that the defendant has breached his equitable obligation of confidence in respect of patient records and non-solicitation.
30	There is a second question, which concerns whether or not the defendant has engaged in misleading or deceptive conduct regarding the posters discussed above.  However, the defendant has consented to paragraphs 7 and 8 of the orders above concerning the posters and is prepared to consent to a further order in the form of paragraph 7.  Accordingly it is unnecessary to deal with that issue further here.
31	I shall now address key submissions of the parties.
Plaintiff’s submissions
32	The patient list (contained in Exhibit ‘VM 2’ to the first Mutha affidavit) contains the details of 1105 patients whose contact details are on the Health Track database.  This is the confidential information that the plaintiff says has been misused by the defendant.  There is a cause of action being breach of confidence in equity.
33	The defendant has argued that some of the patients on the list were his patients.  They were not and this is a matter for trial.  It misses the point.  The information on the Health Track database belongs to the plaintiff.  The defendant misused the information.  That is the end of it.  It was a breach of confidence.
34	The defendant says he kept his own medical records.  The plaintiff queries whether they belong to it, not the defendant.  Nevertheless, the plaintiff is well over the hurdle for establishing a serious question.
35	The defendant says that logging onto Health Track using Ms Lauder’s password was inadvertent.  This explanation is not plausible.  Ms Lauder gives evidence that she never used the defendant’s iPad.  Moreover, his password would be on his iPad, not hers.  He logged on more than 18 times.  The defendant’s affidavit shows that he looked at the daily calendar of patient appointments.  This links in with the evidence of patients contacted by him.  They largely all had appointments coming up in that week.  He also admits to sending out a raft of text messages to people.
36	The evidence is that the defendant has contacted at least 25 patients.  In his affidavit, he says he contacted 30 to 40 patients.  The evidence is that many had appointments coming up in that week or so.  He would often contact patients the day before.  There is no reason for any patient to lie or make this up.  The evidence in the Diez affidavit is compelling.  The defendant’s explanations for contacting them are not plausible.  The evidence is that four patients were told by the defendant that they should go to his clinic because their appointment with the plaintiff’s clinic was cancelled.  The defendant contacted new patients of the plaintiff.  People that he had never met. He seemed to be aware when their appointments were.  There are statements of people, who are patients that he had no contact with while working at the plaintiff, that the defendant contacted them.  The defendant ought not to continue to have access to the plaintiff’s Health Track database.
37	The defendant here is using the Health Track database to springboard his business to have patients go to him instead of to the plaintiff.  The contents of the database are confidential.  He cannot use the confidential information to get a head start for his new business.
Defendant’s submissions
38	The plaintiff has not grappled squarely with the issue: as he saw patients [while he was working for the plaintiff], the defendant made his own medical notes regarding the patients, and would take photographs of the referral forms from their general practitioners.  Sometimes general practitioners made referrals directly to the defendant.  He would have direct contact with the general practitioner.
39	The second Mutha affidavit disputes that the defendant made his own notes when seeing patients, but how could Dr Mutha know this?
40	The defendant is prepared to consent to an order not to access the plaintiff’s Health Track database.  The defendant says that he did not copy the information that he looked at it.  He looked at it for his patients and to review patient notes.  The defendant says that Ms Lauder did use his iPad to login and that she has not given direct evidence responsive to his affidavit.  The Court should draw an adverse inference from her failure to give evidence.  It is however a side issue because the defendant admits logging onto the database.  He says there was nothing wrong with contacting his patients.  It was from his own notes.
41	The defendant still has contact information that he made from his own notes and records.  He has a physical hard copy file.  He also would type up notes on his computer.  The defendant has contact details of patients from his independent files that he made while seeing these patients.
42	There is no question that the patient information is confidential.  The Health Records Act 2001 supports that.  The question is whether the information is confidential as between the plaintiff and the defendant.  There was an agreement for Dr Rudd to retain his own patients.  Dr Asrar has not given any evidence in this proceeding and it would have been interesting to see what he would have to say about the agreement.  There is no documentation about it and no written contract that governed the relationship.
43	Here, the plaintiff has not established that the information was received by the defendant in circumstances so as to import an obligation of confidence as between the plaintiff and defendant.  It is not confidential information as between those two parties.  The information was not received by the defendant so as to import an obligation of confidence.  There is no written contract.  There was never any agreement that the patients were not his patients.  Authority in which there was a contractual agreement may be distinguished on that basis.
44	There was no allegation of a breach of the Health Records Act.  The issue here is whether or not there is a serious question to be tried on breach of an equitable obligation of confidence.  If there is no prima facie case, that is the end of the matter.
45	Taking all the circumstances together, the plaintiff has not established a prima facie case that the information patients gave to the defendant was received by him in circumstances to import confidence such that he could never use the information again for proper purposes.  There is no property in a patient.  True it is that the information in the Health Track database may be confidential information belonging to the plaintiff, but that is not an issue because the defendant is prepared to consent to orders not to access the Health Track database.  The issue is whether or not the notes taken by the defendant are also confidential information.  It was always open to the plaintiff to tell him in writing or verbally that the patient information was theirs and it never did.  The consequence of that is that the defendant was able to take patient notes and take them away with him [after he ceased working for the plaintiff] and use those notes in the course of consulting with patients who want to go and see him at his new practice.
Analysis
46	In Mid-City Skin Cancer & Laser Centre Pty Ltd v Zahedi-Anarak (‘Mid-City’), the plaintiff medical practice sought relief in respect of its former employee, the defendant doctor, and information taken to his new medical practice.  Although it concerned a contractual relationship, the New South Wales Supreme Court considered the nature of confidential information and the equitable obligation of confidence.
47	The following principles in Mid-City apply.
…Any treating doctor is under a duty not to voluntarily disclose, without the consent of his or her patient, information which the doctor has gained in his or her professional capacity, save in very exceptional circumstances…
A similar duty of confidentiality would, in my view, be owed to the patient by everyone who worked at the practice and in the course of their work came across information which had been provided by the patient for the purpose of medical consultation. That obligation extends, it seems to me, to details of the patient’s name, address and telephone number…
While that particular obligation of confidentiality is one which is owed to the patient, the proprietor of a medical practice has a clear interest in conducting the practice in such a way that confidential information disclosed by patients in the course of the practice remains confidential…. For the law to regard it as an ordinary incident of being engaged in the work of a medical practice that the person so engaged has an obligation to the proprietor of the practice to maintain this patient confidentiality is a proper way of ensuring that this interest of the proprietor of the practice is protected, and also provides a more effective way of ensuring that the obligation of an individual medical practitioner to the patient is adhered to….
…
Equitable obligation of confidence?
If I were wrong in concluding that Dr Zahedi [defendant doctor] was bound by that implied contractual obligation, Dr Zahedi would be bound by an obligation arising in equity’s exclusive jurisdiction relating to the use which could be made of patient names, addresses and telephone numbers. I adopt the formulation of the requirements for an equitable obligation of confidence advanced by Gummow J in Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73 at 87:
“…(i) the plaintiff must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question, and must be able to show that; (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge); (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence, and (iv) there is actual or threatened misuse of that information, without the consent of the plaintiff.”
Here, the information alleged to be confidential is identified with specificity, namely the patient names, addresses and telephone numbers contained in the pathology reports and booking sheets which Dr Zahedi retained.
The patient names and addresses were ones which had, it seems to me, the necessary quality of confidence, and were imparted in circumstances importing an obligation of confidence. Both these matters arise from the factors which I  have referred to (at 597 [135] ff supra) as being ones which led to the implication of a contractual term. That information was not information which Dr Zahedi was authorised to use for the purposes of conducting a practice other than a practice that used the facilities of the Clinic. In using it to contact patients after he had left the Clinic, Dr Zahedi had misused it, without the consent of the Kernot Co [plaintiff operating medical clinic].
If it were the case that the only restriction to which Dr Zahedi is subject, concerning the patient names, addresses and telephone numbers, is an equitable obligation, it would, in my view, have the same limits as the implied common law obligation concerning the limits of the restriction upon Dr Zahedi’s use of patient names, addresses and telephone numbers upon leaving the practice. Both the common law and equity take into account, in formulating the extent of obligations they impose in a situation like the present, the public interest that there is in people who have acquired skills and knowledge while working in one situation, such that those skills and that knowledge is part of the mental equipment they carry around with them, being able to use those skills and that knowledge when they take up a later situation. For the same reasons as apply concerning the implied common law obligation, those limits upon the obligation of confidentiality concerning patient names, addresses and telephone numbers do not prevent the conclusion that Dr Zahedi has breached his obligation, in the present case.
48	In Titan Group Pty Ltd v Steriline Manufacturing Pty Ltd, the Federal Court of Australia considered the use of confidential information.
Lord Greene MR said in Saltman Engineering Co. Ltd v Campbell Engineering Co Ltd [1948] RPC 203 at 213: “‘If a defendant is proved to have used confidential  information, directly or indirectly obtained from a plaintiff, without the consent, express or implied, of  the plaintiff, he will be guilty of an infringement of the plaintiff's rights’.”
Later Roxburgh J introduced the concept of a “spring-board” when he said in Terrapin Limited v Builders' Supply Company (Hayes) Ltd [1967] RPC 375 at 391: “As I understand it, the essence of this branch of the law, whatever the origin of it may be, is that a person who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential communication, and springboard it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public.”
Both these statements were quoted and approved by Lord Denning MR in the Court of Appeal in Seager v Copydex Ltd [1967] 2 All ER 415 at 417 where he said that the confidee must “not be in a better position than if he had gone to the public source. He should not get a start over others by using information which he received in confidence”.
49	I find there is a serious question to be tried in respect of the plaintiff’s allegations that the defendant has breached his equitable duty of confidence.
50	Firstly, he has admitted accessing the plaintiff’s Health Track database after ceasing work there.  It is common ground that the database contains confidential information.
51	Secondly, I reject the defendant’s contention that the patient information was not received in circumstances so as to import an obligation of confidence.  It was received in the context of the doctor-patient relationship.  The defendant says that there was an oral contract that he could retain patients and there was no written contract to the contrary, and no written contract prohibiting him from retaining medical notes that he made.  However, the plaintiff disputes that there is such an agreement.  Moreover, the defendant does not depose that there is an agreement that, after ceasing work with the plaintiff, he be permitted to retain medical notes he made of patients.  Importantly, there is no evidence that any patient consented to this arrangement.  The Health Records Act requires such consent (unless another prescribed circumstance applies).
52	Thirdly, the defendant accessed the plaintiff’s Health Track database after he had been suspended and while he did not have access in his own name.  He used Ms Lauder’s password to access the database after establishing his own clinic.  She denies giving him her password.  There is a dispute about whether she ever used his iPad.
53	Fourthly, the evidence suggests that the defendant contacted eight persons who had never been his patients.  This is consistent with him being aware of their appointments with the plaintiff.  It is consistent with the defendant using, as well as accessing, the Health Track database after he established own clinic.
54	Ultimately these will be matters for trial but together they establish a serious question to be tried.
Does the balance of convenience weigh for or against granting an injunction?
Plaintiff’s submissions
55	Damages are not an adequate remedy.  In Mildura, a small community, the reputational harm, the grapevine effect, is far-reaching and that needs to be taken into account.
56	Dr Mutha deposes as to the following.
I am very concerned that the defendant's conduct is having immediate and severe consequences on ACS. They include:
(a) 	financial damages caused by the defendant's misuse of the Health Track Database;
(b) 	there is significant confusion among patients of ACS who have been contacted by the defendant and told to cancel their appointments with ACS or told simply to attend at the defendant's premises instead. This confusion diminishes ACS' reputation for patient-doctor confidentiality and for its level of professionalism generally;
(c) 	there is damage to ACS reputation caused by the Tristar Misrepresentations; and
(d) 	the fact that the defendant has been telling people that ACS has closed also has a severe impact on ACS.
I instructed ACS' solicitors to write to the defendant in relation to his conduct. Pages VM44 to VM48 of the Exhibit Book are copies of the letter written to the defendant dated 17 September 2020 and his response.
If ACS did nothing and allowed the defendant to continue conducting himself in this matter then there will be untold damage caused to ACS and that damage may never be able to be repaired. I estimate that ACS would lose a significant number of its patients and there would be ongoing reputational damage to ACS among the Mildura community and its general practitioners.
I am also concerned that patients are confused and that they may not be getting the medical care that they need, as a result of all of the defendant's activities. This also has a significant impact on ACS's reputation and I am concerned for the wellbeing of all of the patients.
…
I am particularly concerned because Mildura is a small community and everyone knows everyone. If a patient is told that their appointment with ACS is cancelled, then this reflects very badly on ACS. If an ACS patient becomes confused about their appointment at all, then this reflects very badly on ACS. Its reputation is damaged, not just with that patient, but with the patient’s family and all of the people who that patient speaks with, including the patient’s general practitioner. It is impossible to assess the true financial impact of this conduct by the defendant, particularly in a rural community such as Mildura. The grapevine effect can be devastating.
Consequently, if the defendant were allowed to continue to use the Plaintiff’s Health Track Database and were allowed to continue to solicit, canvas and approach patients of ACS, then it would be impossible to quantify the reputational impact on ACS in terms of financial loss.
57	The Health Records Act provides that the plaintiff is a health services provider and holds the health information of patients under the Act.  They are subject to Health Privacy Principles (‘HPPs’).  HPP 2.2 contains obligations on use and disclosure.  HPP 4.1 requires health services providers to take reasonable steps to protect the health information.  Section 18 of the Act contains an offence for interference with privacy.  These do not impact upon the cause of action against the defendant.  They are, however, highly relevant to the balance of convenience and how third parties could be impacted by the conduct of the defendant as he continues to use their medical records and contact details.
58	The plaintiff seeks an order that the defendant not use or disclose contact details of patients on its database.  Moreover, it seeks an order that the defendant be restrained from soliciting or canvassing or approaching any of the patients referred to in the plaintiff’s patient list discussed above.  It does not wish for the defendant to cold-call patients.  The defendant should not have a springboard advantage [by using the plaintiff’s confidential information to grow his new business].
59	The plaintiff seeks an order for the defendant to provide an affidavit of documents describing the documents in his possession, custody or control.  That includes: confidential information belonging to the plaintiff from its Health Track database relating to patients named on the patient list, and all of the documents created since 27 August 2020 relating to any approach or communications the defendant has made to any patient on the patient list, including their responses, attendances, payments; and the number of times the defendant has accessed the plaintiff’s Health Track database with details of each instance of access.  The plaintiff seeks delivery up of all the documents related to that.  The plaintiff’s concern is that the defendant has accessed their database and copied it over to his new Health Track database.  However, the plaintiff does not know if he also retains a hard copy.  At any rate, the plaintiff would be entitled to such material in the course of discovery so it ought be done now while the defendant still has the materials.  The plaintiff is not however seeking preservation of evidence orders.
Defendant’s submissions
60	The balance of convenience does not favour granting an injunction.  There is a possibility of detriment being suffered by patients.  It is important that patients have continuity of care.
61	The defendant has given the following evidence:
If the Orders in the Amended Summons filed by the Plaintiff's lawyers on 25 September 2020 are made, I will be unable to contact any patient on the ACS patient list whose patient information I allegedly extracted from ACS' Health Track database. If this list includes any of my current patients, it will affect my practice generally and (more importantly) patient care.
If I cannot contact patients as a result of orders made by this Honourable Court, they may not seek follow-up medical care from an alternative cardiologist, which may have a negative impact on their heart health. ACS does not have a cardiologist based in Mildura and their attendance is only a monthly rotational basis.
Further, it is important for patients to have access to a local based cardiologist and to have continuity of care (that is, to continue to see me for follow up consultations if they have already seen me as a patient when they initially presented with a referral). It is well established that continuity of care is an important factor in the successful treatment of heart conditions and problems.
When I see a patient, I book a follow up appointment for three or six months after the consultation. If they are not told that I have started a new practice, they will simply attend ACS expecting to see me, but I will not be there. In this way, I will likely lose a lot of my patients, who may keep using ACS cardiologists.
I am currently treating on average of 10 new patients per week, so I would gradually be able to re-build my patient base. However, I will face significant financial losses if I cannot continue to consult my pre-existing Mildura patient base of over 800 patients. A cardiology clinic is not profitable until it has a base of approximately 500 patients who need ongoing care.
Finally, it is also important that I remain able to contact my pre-existing patients to assure them the rumours spread by ACS about me are incorrect (discussed below) and that they can continue seeing me if they choose to do so.
62	There are three categories of patients.  Firstly, those who saw the defendant while he worked at the plaintiff and that he has seen again in his new practice.  If the order that is sought by the summons to restrain the defendant from using or disclosing contact details of patients on the plaintiff’s database is made, then it would stop the plaintiff from contacting the first category of patients, namely those he has already seen.  It might also interfere with reminder text messages to patients.
63	Secondly, there are patients that the defendant saw while working at the plaintiff that he has not yet seen in his new practice.  Of those, there are two sub-categories: (a) those that approached the defendant after he set up his new practice saying they wanted to see him but did not yet have an appointment booked in; and (b) those who have not done that.  The defendant has those patients in his diary based on notes that he took while working at the plaintiff.  Those patients think they have follow-up appointments.  They might think it is with the defendant or they might think it is with the plaintiff.  They will have been sent a general text message from the defendant that he probably sent all his patients.  The defendant cannot now differentiate between those two sub-categories.  They will all get a reminder that there is an appointment coming up in two days.  If the defendant has already seen those patients [at the plaintiff’s clinic], then he ought be free to contact them now so they have continuity of care.
64	Thirdly, there are patients of the plaintiff who the defendant has never seen.  It is accepted that these patients could not suffer any detriment from the orders made.
65	The plaintiff needs to establish that an award of damages at trial is not a sufficient remedy.  The plaintiff has not identified any inconvenience to which it could not ultimately receive an award of damages.  If the plaintiff is successful, it would not be a difficult exercise to work out the damages, which will be the lost fees of patients that are improperly contacted and went to see the defendant, which may be reduced by a percentage given that perhaps they would have seen the defendant anyway.  Discovery will establish that.  In the meantime, the patients will be able to see the same cardiologist.
66	The orders sought by the plaintiff to restrain the defendant from soliciting, canvassing, contacting or approaching any of the patients referred to in its patient list as extracted from its Health Track database are too broad.  They are the type of orders one would normally see in a restraint of trade case.  They are so broad they would stop the defendant from approaching a patient if he saw them in a hospital or having a heart attack at a milk bar.  They would stop the defendant from advertising to patients.  They are not supported by any possible breach of the defendant.  This is another aspect of the cold-calling issue.
67	The plaintiff seeks an order that the defendant not use or disclose contact details of patients on its Health Track database.  This is trying to stifle competition.  The defendant has the patient details because he took notes in the plaintiff’s clinic during the course of treating patients.  Moreover, this order does not seek to exclude patients who have already seen the defendant since his new clinic was established in the last three or four weeks.  There is no evidence from the defendant as to which patients he has seen since establishing his clinic.  The orders sought by the plaintiff are so wide that they would stop him from telephoning and giving patients test results.  This order is about restricting the defendant’s ability to compete with the plaintiff.
68	The affidavit of disclosure sought by the plaintiff is in the nature of a mandatory injunction.  It requires special circumstances.  There is no need for an affidavit to protect the interests of the plaintiff at the moment.  In truth, the plaintiff is trying to establish what use the defendant has made of the information so it can calculate the quantum of damages it can obtain.  This is appropriate for discovery, not an injunction.  Moreover, the orders seek information on how many times the defendant accessed the Health Track database.  He has already deposed to this and accepted that he used Ms Lauder’s login details.  There will be a fight at trial as to the circumstances of this.  However, he has been candid about it in his affidavit.
69	The delivery up order sought by the plaintiff would require the defendant to hand back all his medical notes.  He has a case that there was an agreement that he retain his patients.  The Court ought not require him to hand over those files unless it determines he is wrong.
Analysis
70	Turning now to an analysis of the balance of convenience.  That is, whether the inconvenience or injury that the plaintiff would suffer if the injunction were refused is outweighed by the injury the defendant would suffer if the injunction were granted.
71	I refer to Dr Mutha’s evidence outlined above.  Here, damages are not an adequate remedy.  In Epichealth Pty Ltd v Yang, J Dixon J stated and I adopt:
The plaintiff submits that, when considering whether damages would be an adequate remedy, the proper question is whether it is just in all the circumstances that the plaintiff should be confined to a remedy in damages. As Edelman J noted in Emeco International Pty Ltd v O’Shea: 
It has often been said, in the context of injunctive relief for apprehended breach of a restrictive covenant that ‘where what is involved is the enforcement by injunction of a contractual negative stipulation, it is a rare case in which relief will be declined on the basis that damages are a sufficient remedy’.
The reasons why damages are often inadequate in these cases includes (i) the difficulty of detection of breaches of the obligations; (ii) the difficulty of establishing causation between any loss of business with customers and any actions of the ex-employee; and (iii) the difficulty of the calculation of the quantum of any damage arising from loss of business.
(Citations omitted)
I agree.
The defendant submitted that the plaintiff had not shown why damages would not be an appropriate remedy… The nature of a medical practice and the characteristics of customer loyalty in a medical business are complex. Inevitably the courts will be required to make the best possible assessment on evidence that may be characterised by a degree of uncertainty and there is no doubt, as Macaulay J observed in Brunswick Family Dental Pty Ltd v Enged, that damages have often been assessed by courts for the loss sustained by the wrongful transfer of custom from one business to another. That is why the issue of the adequacy of damages is best understood as a question of the remedy to which the plaintiff ought justly be confined in the circumstances. In the present case, this is a consideration that favours the plaintiff when considering the balance of convenience.
72	I find that the balance of convenience weighs in favour of making orders for an interlocutory injunction that the plaintiff not use or disclose confidential information of the plaintiff, being contact details on its Health Track database.  Similarly, such information should be delivered up to the plaintiff.  There will be an exclusion for patients who have already consulted the defendant at his new practice, providing he deposes an affidavit containing a list of such patients, and an exclusion for patients who have provided a consent that the plaintiff provide their health information to the defendant.
73	Any disadvantage to the defendant by reason of financial loss (reduction in income to his new practice) is outweighed by the potential for injury to the plaintiff of which damages would be an inadequate remedy.
74	As to the restraint order sought in respect of soliciting, canvassing, contacting or approaching patients, I decline to make that order.  The balance of convenience does not favour it.  It would, I accept, stop the defendant from advertising his new practice.  I am conscious of the springboard effect, however such an order goes beyond legitimate protection of the plaintiff’s confidential information at this interlocutory stage.
75	As for the affidavit of documents, this can be done during the discovery process, save for category 5(a), which relates to the plaintiff’s Health Track database.  The defendant will also be required to deliver up that information.  As above, there will be an exclusion for patients who have already consulted the defendant at his new practice, providing that he deposes an affidavit containing a list of such patients, and an exclusion for patients who have provided their consent that the plaintiff provide their health information to the defendant.
Is the plaintiff disentitled to relief on the basis it does not have clean hands?
Defendant’s submissions
76	The defendant asserts that the plaintiff has unclean hands and this should be taken into account in determining the relief sought here.  The plaintiff admits that it told patients that the defendant was unwell or had taken extended leave.  This is plainly wrong.  There is evidence that comments have been made about the defendant, for instance that Ms Diez said to a patient that he was a bad doctor.  Dr Mutha denies this, however Ms Diez does not give evidence directly about it.  The Court ought draw an adverse inference.  It is a very important part of the case and one reason that the defendant needs to contact patients is to dispel rumours and myths.  There is a connection between with plaintiff’s misconduct that comprises unclean hands and the relief it seeks.  Moreover, the unfair and unsatisfactory manner in which the investigation was conducted during the defendant’s suspension is another element of unclean hands.
Plaintiff’s submissions
77	The plaintiff denies the allegations of unclean hands.  It says there is no impropriety.  Moreover, even on the defendant’s own case, none is material because it is not in relation to the equitable breach of confidence action.
Analysis
78	Both parties agree the following principle is applicable.
It is trite law that equity may refuse relief to a plaintiff whose conduct in a transaction has been improper provided that the impropriety has ‘an immediate and necessary relation to the equity sued for’...
79	The issue of unclean hands is not a factor for this application.  The relief sought is in respect of breach of confidence.  The allegations concerning what the plaintiff told patients while the defendant was suspended do not affect whether or not orders should be made restraining the defendant from using its confidential information.  Moreover, there is no evidence to date that the reason that the defendant has contacted patients is to dispel the alleged myths and rumours.  The evidence is that he has contacted them regarding the provision of health services in his new business.  In respect of how the investigation, if any, was conducted while the defendant was on suspension, the same analysis applies.  Finally, there is a factual dispute between the parties as to exactly what has been said regarding the defendant and his new business.  This is an issue more appropriately determined at trial, if relevant.
Conclusion
80	The plaintiff, by its Counsel, has given an undertaking as to damages.  The usual undertaking as to damages is contained at paragraph 11.20 of Commercial Court Practice Note SC CC1 and follows:
To abide by any order the Court may make as to damages, in case the Court shall hereafter be of the opinion that any person shall have sustained any loss, by reason of this order, which the party giving the undertaking ought to pay.
81	The following orders will be made.
1.	Until final determination of this proceeding or further order, the defendant, whether by himself, his servant, agent or otherwise not use or disclose the contact details of patients on the plaintiff’s Health Track database as set out in annexure ‘VM-2’ to the affidavit of Dr Vivek Mutha sworn 23 September 2020 (‘the ACS Patient List’), save for:
a.	patients who have already consulted the defendant at Dr Rudd Cardiology and are identified in an affidavit to be deposed by the defendant and filed and served by 4pm on 2 October 2020; and / or
b.	patients who have provided a consent to the plaintiff to provide their health information to the defendant.
2.	By 4.00pm on 9 October 2020, the defendant file and serve an affidavit of documents which describes and identifies all of the documents, including documents in hard copy or electronic form, in his possession, custody or control, from the plaintiff’s Health Track Database, relating to patients named on the ACS Patient List.
3.	By 4.00pm on 9 October 2020, the defendant deliver up all of the documents, including documents in hard copy or electronic form, in his possession, custody or control, from the plaintiff’s Health Track Database, relating to patients named on the ACS Patient List, save for:
a.	patients who have already consulted the defendant at Dr Rudd Cardiology and are identified in an affidavit to be deposed by the defendant and filed and served by 4pm on 2 October 2020; and / or
b.	patients who have provided a consent to the plaintiff to provide their health information to the defendant.
4.	Until final determination of this proceeding or further order, the defendant, whether by himself, his servant or agent, is restrained from publishing, representing or causing to publish or represent:
a.	that the ACS Cardiology Clinic at Level 1, 87-89 Langtree Avenue, Mildura, Victoria  3500 (‘the ACS Clinic’) is closed; and/or 
b.	that the ACS Clinic or ACS is owned by Tristar Medical Group.
5.	The defendant bear his own costs of, incidental to and occasioned by the plaintiff’s summons filed on 23 September 2020.
6.	The plaintiff’s costs of, incidental to and occasioned by its summons be costs in the proceeding.