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  4. City Fertility Sydney CBD Pty Ltd v Reims Investments Pty Ltd - [2025] QSC 210

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City Fertility Sydney CBD Pty Ltd v Reims Investments Pty Ltd[2025] QSC 210

City Fertility Sydney CBD Pty Ltd v Reims Investments Pty Ltd[2025] QSC 210

SUPREME COURT OF QUEENSLAND

CITATION:

City Fertility Sydney CBD Pty Ltd v Reims Investments Pty Ltd & Anor [2025] QSC 210

PARTIES:

CITY FERTILITY SYDNEY CBD PTY LTD (FORMERLY CFC GLOBAL PTY LTD)

(ACN 146 707 708)

(applicant)

v

REIMS INVESTMENTS PTY LTD (ACN 128 900 390) AS TRUSTEE FOR THE MCPHERSON FAMILY TRUST

(ABN 25 289 926 062)

(first respondent)

and

SIMONE JACQUELINE SUTTON CAMPBELL

(second respondent)

FILE NO/S:

BS 1029/25

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

28 August 2025

DELIVERED AT:

Brisbane

HEARING DATE:

6, 7, 8 and 27 May 2025

JUDGE:

Copley J

ORDER:

The applicant is directed to bring in a minute of an order that reflects these reasons by 1.00 pm on 2 September 2025

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – REPUDIATION – GENERAL PRINCIPLES – where the applicant entered into a contract with the respondents for the second respondent to provide IVF clinician services – where contractual terms provided for termination in the event of an unremedied breach – where contractual terms provided for post-termination restraint of trade – where contractual terms provided no restraint of trade applied in the event of an unremedied breach – where the respondents terminated the contract for an impugned breach of terms relating to fees and charges to be paid to the clinician by the applicant – where the applicant alleges there was no breach of contract, and subsequently seeks to enforce post-termination restraints – whether fees paid exceeding a yearly prescribed contractual minimum increased the base upon which the next year’s fees are calculated – whether there was a breach of contract

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – REPUDIATION – ELECTION AND RESCISSION – GENERALLY – where the respondents purportedly terminated a services contract for an impugned breach – where the applicant alleges the notices to remedy given prior to termination were invalid on the basis that they posited incorrect underpayment calculations – whether underpayment miscalculations rendered the termination invalid –  whether the notices to remedy were valid

TRADE AND COMMERCE – OTHER REGULATION OF TRADE AND COMMERCE – RESTRAINTS OF TRADE – ROLE OF PUBLIC INTEREST OR POLICY – where a contract for the provision of IVF clinician services contained restraint of trade clauses – where the restraints sought to prevent the respondents from establishing a competing practice within a 50 kilometre radius of the applicant’s clinics and from soliciting clients of the applicant for a one-year period – whether the restraints were reasonable as between the parties – whether the restraints are no more than reasonably necessary to protect the business interests of the applicant – whether the restraints were contrary to public policy

EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INJUNCTIONS FOR PARTICULAR PURPOSES – TO RESTRAIN BREACH OF CONTRACT – NEGATIVE STIPULATIONS – GENERALLY – where the applicant entered into a contract with the respondents for the second respondent to provide IVF clinician services – where contractual terms provided for post-termination restraint of trade – where the applicant seeks injunction to enforce the restraint of trade clauses – where the respondents contend damages are an adequate remedy as damages could be readily ascertained – effect of injunction on third parties – whether an injunction should be granted – whether damages afford an adequate remedy

Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564

Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Pty Ltd (1973) 133 CLR 288

Angel-Honnibal v Idameneo (No 123) Pty Ltd (2003) 59 IPR 184

Ashcoast Pty Ltd v Whillans [2000] 2 Qd R 1

Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219

Buckley v Tutty (1971) 125 CLR 353

Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404

Emeco International Pty Ltd v O'Shea [2012] WASC 282

John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995

Just Group Pty Ltd v Peck (2016) 344 ALR 162

Kerr v Morris [1987] Ch 90

Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) (2015) 329 ALR 1

Monash IVF Pty Ltd v Mooring [2024] NSWSC 1651

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

Orton v Melman [1981] 1 NSWLR 583

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1

Sherk v Horwitz [1972] 2 OR 451

Vision Eye Institute Ltd & Anor v Kitchen & Anor [2014] QSC 260

WorkPac Pty Ltd v Rossato (2020) 278 FCR 179

COUNSEL:

A C Stumer KC with F Lubett for the applicant

S J Wood KC with S Hogg (6-8 May), E Gisonda and R Haddrick (27 May) for the respondents

SOLICITORS:

Ashurst for the applicant

Gadens for the respondents

  1. [1]
    Pursuant to an application filed on 17 March 2025 the applicant sought both interlocutory and final relief.  The final relief sought was: (i) an injunction restraining the respondents from doing any of the acts specified in clauses 19.4(a) and 19.5(a) of the Clinician Services Contract (“the contract”), (ii) a declaration that the applicant did not breach clause 8 of the contract,[1] and (iii) a declaration that the first respondent’s purported notice of termination of the contract dated 24 February 2025 was invalid and of no effect.
  2. [2]
    The interlocutory relief sought was an interlocutory injunction in the same terms as set out at (i) above.  On 21 March 2025 the Court granted the application for the interlocutory injunction up to trial and at the end of the trial the interlocutory injunction, as further varied, was continued up until judgment.  The terms of the varied interlocutory injunction permitted the second respondent to continue to treat some patients she had been treating in the period between 1 January 2025 and 17 March 2025.
  3. [3]
    In points of counterclaim the respondents sought a declaration that the restraints in clause 19 of the contract were void and unenforceable against both respondents and sought payment in such amount as the Court determined the applicant had failed to pay to the first respondent, being a debt.  At the trial the respondents did not press for the relief sought in the counterclaim.
  4. [4]
    For the reasons which follow, an injunction will be granted restraining the second respondent from doing any of the acts specified in clauses 19.4(a)(1)-(3) and 19.5(a) of the contract.

The context of the dispute

  1. [5]
    The applicant operates in vitro fertilisation (IVF) clinics at a number of places, including in Brisbane at Newstead and Sunnybank. 
  2. [6]
    The second respondent is a medical practitioner.  She has worked in the area of IVF for the past 18 years.  From around January 2013 she provided IVF services to the applicant through the first respondent.
  3. [7]
    The second respondent is the sole director of the first respondent and of Sillery Pty Ltd.  By 2017 Sillery Pty Ltd owned a small number of shares in the applicant.
  4. [8]
    Since 28 February 2018 the applicant has been wholly owned by CHA SMG Australia Corporate Pty Ltd (the corporate company).  This company is wholly owned by CHA SMG Australia Holding Pty Ltd (the holding company).
  5. [9]
    On 28 February 2018 the corporate company purchased all the shares in the applicant, including the shares Sillery Pty Ltd owned.  Sillery was paid $978,368.98 for those shares and was issued 978,283 shares in the holding company. 
  6. [10]
    On the same day the applicant and the first respondent entered into the contract mentioned above and the second respondent signed a Business Protection Deed Poll in favour of the applicant.  By clause 3 of the Deed Poll, the second respondent covenanted to observe and perform the provisions of the contract as if named in the contract as the “Clinician Entity”.
  7. [11]
    Between 28 February 2018 and about 24 February 2025 the second respondent provided services as a clinician under the contract.  By February 2025 she had been the Medical Director of the applicant’s Newstead clinic for about five years.
  8. [12]
    On 24 February 2025 the first respondent gave notice to the applicant purporting to terminate the contract pursuant to clause 18.3 of the contract due to an alleged breach of clause 8.  Clause 8 concerned the applicant’s obligation to pay fees to the first respondent, including Egg Pick Up fees and Frozen Embryo Transfer fees.  On 28 February 2025 the applicant’s solicitor replied, denying the applicant breached clause 8, and therefore the first respondent could not terminate the contract under clause 18.3.  The applicant regarded the contract as remaining on foot.
  9. [13]
    On 10 March 2025 the second respondent commenced working with Queensland Fertility Group, another company which provides IVF services in Brisbane.  On 17 March 2025 the applicant’s solicitors wrote to the respondents’ solicitors informing them that the first respondent had repudiated the contract and that the applicant accepted the repudiation and elected to terminate the contract with immediate effect.

The nature of the dispute

  1. [14]
    Prior to the letter of 24 February 2025 the second respondent, on behalf of the first respondent, wrote to the applicant on 17 January 2025 asserting that the applicant had breached clause 8 of the contract due to the applicant’s underpayment of fees, in particular Frozen Embryo Transfer fees, between 1 January 2023 and the date of the letter.  The applicant replied denying any breach of clause 8 or any underpayment and asserted that the correspondence dated 17 January 2025 was not a valid notice of breach or notice to remedy under clause 18 of the contract.
  2. [15]
    Clause 18.3 provided that the first respondent could terminate the contract if it gave a written notice to remedy a breach of clause 8 and if the applicant failed to remedy the breach to the first respondent’s satisfaction within 20 business days. 
  3. [16]
    The restraint of trade clause (clause 19) has no application if the contract was terminated by the first respondent under clause 18.3.  As clause 18.3 only allowed for termination for an unremedied breach of clause 8 the primary relief the applicant ultimately sought – a final injunction to enforce clauses 19.4(a)(1)-(3) and 19.5(a) – is premised on there having been no basis for the first respondent to terminate the contract under clause 18.3.  That in turn depends on there having been no breach by the applicant of clause 8.
  4. [17]
    The applicant submits, relying on the terms of clauses 8.4 and 8.6, that as long as it paid the first respondent an amount equal to the total amount that was owed to the first respondent for Egg Pick Up and Frozen Embryo Transfer procedures performed by the second respondent then the applicant complied with clause 8.
  5. [18]
    The respondents submit that clause 8, understood in conjunction with the reference schedule (clause 1.1), obliged the applicant to pay the applicable minimum amount for each Egg Pick Up or Frozen Embryo Transfer procedure the second respondent performed.  The respondents submit that the applicant failed to pay the first respondent the required minimum amount for Frozen Embryo Transfer fees.
  6. [19]
    It is not disputed that in relation to each invoice submitted for Egg Pick Up and Frozen Embryo Transfer the applicant paid the first respondent a sum of money that either equalled or exceeded the total owed for both fees.  However, the respondents submit that notwithstanding the total sum equalling or exceeding the total owed for both fees, the applicant was in breach of clause 8.  The respondents submit that because the portion the applicant attributed to Frozen Embryo Transfer fees was less than the contractual minimum it is not legitimate for the applicant to deny a breach of clause 8 by subsequently re-designating its breakdown of the total fees paid to notionally say the minimum Frozen Embryo Transfer fee was paid.  Put another way, payments above the minimum for Egg Pick Up fees cannot be set off against failures to pay the minimum Frozen Embryo Transfer fees.

The issues in the trial

  1. [20]
    The first issue to determine is whether the applicant breached clause 8.  If the applicant did so, the second issue to determine is whether the first respondent gave a valid notice to remedy the breach under clause 18.3.  It is only if there was no breach of clause 8 and/or no valid notice to remedy that breach under clause 18.3 that it becomes necessary to consider clause 19, the restraint of trade clause.  In view of an undertaking given by the respondents at the trial this will only require consideration of the enforceability of clauses 19.4(a)(1)-(3) and 19.5(a).[2]  Consideration of these clauses involves two issues.  One concerns whether they are no more than reasonably necessary to protect the legitimate business interests of the applicant.  The other concerns whether they are reasonable in the public interest.   In these reasons, they are the third and fourth issues that will be considered.  The fifth issue to determine, if an injunction is warranted, is whether this form of relief should be withheld having regard to the effect that an injunction may have on third parties.
  2. [21]
    The trial proceeded substantially upon affidavit evidence.  The affidavits constituted the evidence in chief of each deponent.  The applicant’s case relied mainly on affidavits provided by David Nathan.  Mr Nathan was the chairman and director of the holding company and a director of the applicant.  He was not required for cross-examination.  The respondents mainly relied on affidavits provided by the second respondent and two patients.  The second respondent was cross-examined.  The applicant did not suggest to the second respondent that anything contained in her affidavit was incorrect or inaccurate.  The parties tendered affidavits dealing with sums of money paid by the applicant to the first respondent and about how those sums had been calculated.  However, the parties agreed that it was not at all necessary for the Court to determine which side’s calculations were correct.  The case was conducted by the parties on the basis that whether there was any shortfall in either Egg Pick Up or Frozen Embryo Transfer fees paid by the applicant to the first respondent depended only on the proper construction of clause 8.[3] 

The relevant contractual provisions

  1. [22]
    The provisions of the contract relevant to the determination of the five issues in this case are set out below.  In the contract the applicant is referred to as “CFC” and the first respondent is referred to the “Clinician Entity”.

“Parties

CFC Global Pty Ltd ACN 146 707 708 (CFC)

Reims Investments Ply Ltd ACN 128 900 390 as trustee for the McPherson Family Trust ABN 25 289 926 062 (Clinician Entity)

Background

  1. CFC carries on CFC's Business.
  2. The Clinician Entity carries on the Clinician Entity's Business.
  3. This agreement records the fact that:
  1. CFC will provide the CFC Services to Patients: and
  1. the Clinician Entity will provide Clinician Services to Patients in connection with the provision by CFC of the CFC Services to Patients.
  1. As part of the Clinician Services, the Clinician Entity will perform Ultrasound Services. This document sets out the basis upon which CFC will pay certain amounts to the Clinician Entity in connection with the performance of Ultrasound Services.

It is agreed

1.   Reference Schedule, definitions and interpretation

1.1ReferenceSchedule

Where a term used in this agreement appears in bold type in the Reference Schedule, that term has the meaning shown opposite it in the Reference Schedule.

CFC’s Business

Owning and operating clinics at the Locations that:

  1. provide the CFC Services;
  1. provide accredited laboratory, nursing, administrative and other support services required to support a Patient, excluding the Clinician Services;
  1. accept Patient referrals from the Clinician Entity or the Clinician in relation to the provision of CFC Services.

Clinician Entity’s Business

  1. Providing the Exclusive Clinician Services and Non-Exclusive Clinician Services;
  1. supporting Patients through the provision of the CFC Services by CFC;
  1. accepting Patient referrals from CFC in relation to the provision of Clinician Services.

Clinician

Simone Jacqueline Sutton Campbell

Commencement Date

28 February 2018

Initial Term

5 years from the Commencement Date

Term

The Initial Term and continuing thereafter unless terminated in accordance with clause 18.

CFC Services

  1. The following services that currently comprise the following Medicare service numbers:
  1. 13200 Initial Fully Stimulated IVF cycle in a calendar year (global);
  2. 13201 Subsequent Fully Stimulated IVF cycle in a calendar year (global);
  3. 13202 Cancelled IVF prior to oocyte collection;
  4. 13206 Minimal stimulated IVF cycle (global);
  5. 13218 Preparation of embryos for transfer (FET) (global);
  6. 13221 Sperm Preparation for Insemination (IUI);
  7. 13251 Intracytoplasmic Sperm Injection (ICSI);
  1. The following services that currently do not attract a Medicare service number:
  1. PGD and PGS;
  2. TESA/PESA (lab work);
  3. Egg freezing;
  4. Surrogacy;
  5. ART for single females and same sex couples;
  6. Services associated with facilitation of EDA;
  7. Services associated with facilitation of SDA;
  8. Services associated with patients accessing Rainbow Fertility;
  9. Services associated with patients accessing First Step Fertility; and
  10. Services associated with foreign domiciled patients accessing fertility services under any CFC business.

Exclusive Clinician Services

The following services that currently comprise Medicare service numbers:

  1. 13203 Ovulation Monitoring Services (IUI) (global);
  1. 13209 Planning and Management Fee;
  1. 13212 Oocyte Retrieval (EPU);
  1. 13215 Transfer of Embryo;
  1. 37605 Closed biopsy; and
  1. 37606 Open biopsy.

Ultrasound Services

Performing ultrasounds on Patients.

Non-exclusive Clinician Services

General obstetric and gynaecological services that are not

included in the definition of Exclusive Clinician Services,

including the performance of Ultrasound Services.

Fees

  1. EPU Cycle Management Fee:
  1. where the Patient is billed by CFC under Medicare Item Number 13200 or 13201:
  1. $0 - where the patient is bulk billed other than due to oncology or professional courtesy;
  1. $0 - where the services are provided through CFC's low cost offering "First Step Fertility";
  1. $250.00 - in the case of minimal gap cycles;
  1. $500.00 - where the patient is bulk billed in circumstances involving oncology or professional courtesy; and
  1. in all other cases, $500.00;
  1. where the Patient is billed by CFC under Medicare Item Number 13206:
  1. $0 - where the patient is bulk billed;
  1. $0 - where the services are provided through CFC's low cost ofering “First Step Fertility”; and
  1. $0 - in the case of minimal gap cycles;
  1. in all other cases, $250.00.
  1. FET Cycle Management Fee – where the Patient is billed by CFC under Medicare Item Number 13218:
  1. $0 - where the patient is bulk billed;
  1. $0 - where the services are provided through CFC's low cost offering "First Step Fertility";
  1. $102.50 - in the case of minimal gap cycles;
  1. $102.50 where the FET is after CGH; and
  1. in all other cases, $205.00.
  1. The Fees referred to in items 1 and 2 shall be increased annually pro-rata with the increase, if any, in fees charged by CFC to Patients for the relevant CFC Services.

Locations

Locations means:

  1. City Fertility Centre Sydney - Level 1, 1 Moore Street, Liverpool NSW 2170;
  1. City Fertility Centre Brisbane - Brisbane Private Hospital, Level 8, 259 Wickham Terrace, Brisbane QLD 4000;
  1. City Fertility Centre Brisbane South - Level 1, 309 Mains Road, Sunnybank QLD 4109;
  1. City Fertility Centre Gold Coast - Suite 2, Ground Floor, 232 Robina Town Centre Drive, Robina QLD 4226;
  1. City Fertility Centre Adelaide - Western Hospital, Level 1, 168 Cudmore Street, Henley Beach SA 5022;
  1. City Fertility Centre Melbourne - 493 St Kilda Road, Melbourne VIC 3004;
  1. City Fertility Centre Melbourne North - 240 Plenty Road, Bundoora VIC 3083; and

any other clinics owned and operated by CFC at which CFC provides the CFC Services.

Invoice Period

Calendar month

Payment period

14 days form the date of invoice

1.2  Definitions

In this agreement:

Business Protection Deed Poll means a deed poll in the form set out in Attachment 1 to be signed by the Clinician in favour of CFC pursuant to which the Clinician covenants to observe and perform the following provisions of this agreement as if the Clinician was named in this agreement as the Clinician Entity:

  1. …

…

  1. clause 19 (Post-termination restriction).

Clinician Services means the Exclusive Clinician Services and Non-exclusive Clinician Services.

EPU means egg pick up.

EPU Cycle Management Fee has the meaning given to it in the “Fees” section of the Reference Schedule.

FET means frozen embryo transfer.

FET Cycle Management Fee has the meaning given to it in the “Fees” section of the Reference Schedule.

IVF means invitro fertilisation.

Patient means a person to whom:

  1. CFC provides the CFC Services; and
  1. the Clinician Entity provides Clinician Services, in connection with the provision of CFC Services by CFC .

Personal Information has the meaning given to it in the Privacy Act 1988 (Cth) and includes Patient medical information.

Reference Schedule means the schedule in clause 1.1.

Relevant Medicare Item Numbers means the following current Medicare item numbers – 13200, 13201, 13206, 13202 and 13218.

2.  Performance of Clinician Services

2.1  Performance of Clinician Services for the Term

  1. The parties acknowledge and agree that, during the Term, the Clinician Entity will perform the Clinician Services in connection with the provision by CFC of the CFC Services to Patients on the terms set out in this agreement.
  1. To avoid doubt, this agreement may be terminated at any time under clause 18, including during the Initial Term, unless clause 18 provides that a particular termination right only applies after the end of the Initial Term.

2.2  Performance of Clinician Services after expiry of Initial Term

The Clinician Entity will continue to perform Clinician Services in connection with the provision by CFC of the CFC Services to Patients after expiry of the Initial Term in accordance with the terms of this agreement until terminated in accordance with clause 18.

3.  Relationship of parties

3.3  Non-exclusive

  1. Subject to clauses 3.3(b) and 3.3(c), the arrangements between CFC and the Clinician Entity as set out in this agreement are not exclusive and during this agreement the Clinician Entity is free to work for others, subject only to discharging its obligations to CFC under this agreement.
  1. The Clinician Entity agrees that it shall only provide Exclusive Clinician Services to Patients through CFC, and in connection with the provision by CFC of CFC Services.
  1. The Clinician Entity will refer (and will ensure that its Clinician refers) Patients who require any services that comprise the CFC Services to CFC.
  1. The parties acknowledge and agree that nothing in this agreement shall restrict the Clinician Entity from providing any services that are not Exclusive Clinician Services (including any Non-exclusive Clinician Services) to any person.

5.  CFC’s obligations

5.1  Referrals

  1. CFC will accept referrals of Patients from the Clinician Entity in respect of the performance by CFC of the CFC Services.
  1. If the Clinician Entity refers a Patient to CFC, CFC will have the Clinician Entity provide the Clinician Services to that Patient in connection with the performance by CFC of the CFC Services.
  1. CFC may, in its absolute discretion, refer Patients to the Clinician Entity for the performance of Clinician Services.

5.2  CFC Services

In connection with the performance of the CFC Services, CFC will:

  1. engage directly with Patients in respect of the performance of CFC Services under an agreement, the terms of which will be determined by CFC in its discretion from time to time:
  1. perform the CFC Services:
  1. in accordance with CFC's policies, procedures and guidelines as notified by CFC to the Clinician Entity;
  1. taking reasonable care and in a safe, thorough and professional manner; and
  1. in accordance with all applicable Laws, Approvals, Codes and Standards.

8.  Fees

8.1  Clinician Services

  1. Clinician Entity will:
  1. be entitled to all fees and other charges payable by the Patient, or recoverable through Medicare, in connection with the provision of the Clinician Services to Patients; and
  1. be solely responsible for invoicing and collection of all amounts referred to in clause 8.1(a).
  1. Clinician Entity acknowledges and agrees that:
  1. it has no entitlement to amounts referred to in clause 8.2(a); and
  1. it will not invoice, collect or otherwise attempt to recover any amounts referred to in clause 8.2(a), which are the sole property of CFC.

8.2  CFC Services

  1. CFC will:
  1. be entitled to all fees and other charges payable by the Patient, or recoverable through Medicare, in connection with the provision of CFC Services to Patients; and
  1. be responsible for invoicing and collection of all amounts referred to in clause 8.2(a).
  1. CFC acknowledges and agrees that:
  1. it has no entitlement to amounts referred to in clause 8.1(a); and
  1. it will not invoice, collect or otherwise attempt to recover any amounts referred to in clause 8.1 (a), which are the sole property of the Clinician Entity.

8.3  Ultrasound Services

  1. The parties acknowledge and agree that:
  1. the Clinician Entity will provide Ultrasound Services in connection with the provision by CFC of CFC Services to Patients;
  1. the Relevant Medicare Item Numbers, which are billed by CFC, include all ultrasounds that are required to be performed during a Patient's 30 day cycle;
  1. as a result of matters referred to in clause 8.3(a)(2):
  1. the Clinician Entity is unable to charge a Patient for the provision of Ultrasound Services in connection with the provision by CFC of CFC Services under the Relevant Medicare Item Numbers; and
  1. CFC has therefore agreed to pay certain amounts to the Clinician Entity in consideration of the Clinician providing Ultrasound Services to Patients who have been billed by CFC under the Relevant Medicare Item Numbers.
  1. CFC will pay for Ultrasound Services provided by an external provider (being someone other than the Clinician Entity or the Clinician) (External Provider) if:
  1. a Patient:
  1. resides interstate or overseas; or
  1. lives more than 70km from the Location at which the CFC Services are provided; or
  1. has a pre-existing medical condition where specialised equipment is required to perform the Ultrasound Services; or
  1. CFC and the Clinician Entity have separately agreed that CFC will pay for the Ultrasound Services to be provided by an External Provider.
  1. In the circumstances referred to in clause 8.3(b), CFC will pay the costs of the External Provider in addition to the amounts payable by CFC to the Clinician under clause 8.4.
  1. If an External Provider provides Ultrasound Services to a Patient of the Clinician Entity other than in the circumstances referred to in clause 8.3(b), the Clinician Entity will be responsible for paying the fees and costs of the External Provider.

8.4  Payment by CFC to Clinician Entity

  1. Each time:
  1. CFC provides to a Patient CFC Services that currently comprise any of the following Medicare numbers:
  1. 13200 Initial Fully Stimulated IVF cycle in a calendar year (global);
  1. 13201 Subsequent Fully Stimulated IVF cycle in a calendar year (global);
  1. 13206 Minimal stimulated IVF cycle (global); and
  1. the Clinician Entity provided Ultrasound Services to that Patient in connection with the provision of the CFC Services referred to in clause 8.4(a)(1 ),

CFC will pay the EPU Cycle Management Fee to the Clinician Entity.

  1. Each time:
  1. CFC provides to a Patient CFC Services that currently comprise Medicare number 13218 Preparation of embryos for transfer (FET) (global); and
  1. the Clinician Entity provided Ultrasound Services to that Patient in connection with the provision of the CFC Services referred to in clause 8.4(b)(1),

CFC will pay the FET Cycle Management Fee to the Clinician Entity.

8.6  Invoicing and time for payment

CFC will pay the Clinician Entity the Fees within the Payment Period, after first receiving and approving the accuracy of a Tax Invoice from the Clinician Entity, specifying the Clinician Services to which the invoice relates.

8.7  Timing of invoices

The Clinician Entity will deliver Tax Invoices to CFC in arrears at or about the end of each Invoice Period.

18.  Termination

18.2  Termination by CFC for Clinician Entity Default

CFC may terminate this agreement at any time if CFC has given the Clinician Entity twenty Business Days written notice to remedy a breach of this agreement by the Clinician Entity, and the Clinician Entity has failed to remedy the breach to the satisfaction of Board (acting reasonably).

18.3  Termination by Clinician Entity for CFC default

The Clinician Entity may terminate this agreement at any time if the Clinician Entity has given CFC twenty Business Days written notice to remedy a breach by CFC of clause 8 of this agreement, and CFC has failed to remedy the breach to the satisfaction of the Clinician Entity.

19.  Post termination restriction

19.1  Survival

This clause 19 shall apply and continue to be valid for the Restraint Period notwithstanding the termination of this agreement.

19.2  No restriction in certain circumstances

This clause will have no application in the event that this agreement is terminated:

  1. …
  1. by Clinician Entity under clause 18.3;
  1. …
  1. …

19.3  Additional definitions

In this clause 19:

Restricted Patient means any person who is or was at any time a Patient:

  1. to whom CFC has provided CFC Services; and
  1. with whom the Clinician Entity or Clinician had any direct and substantial dealing in the course of performing the Clinician Services, at any time during the last 2 years of the Term.

Prospective Patient means any person who is or was at any time in discussion with CFC about becoming a client, patient or customer of CFC and in relation to whom, in the course of performing the Clinician Services during the last 2 years of the Term, the Clinician Entity or Clinician became privy to Confidential Information or Personal Information.

Restraint Period means each of the following periods commencing on the date on which this agreement is terminated:

  1. 12 months;
  1. 9 months;
  1. 6 months;
  1. 3 months.

Restrained Activity means performing the Exclusive Clinician Services.

Restraint Area means an area within a:

  1. 50km;
  1. 25km;
  1. 10km;
  1. 5km, radius of any Location which is located in a state or territory in which the Clinician Entity or the Clinician has, in connection with the provision of CFC Services by CFC, provided Clinician Services during the last 2 years of the Term.

19.4  No Interference

  1. The Clinician Entity agrees that, following termination of this agreement, the Clinician Entity shall not, for each Restraint Period, directly or indirectly, on its own account or for any other person:
  1. canvas, solicit or entice away from CFC any Restricted Patient or Prospective Patient in connection with the supply by the Clinician Entity of Exclusive Clinician Services; or
  1. in competition with CFC, approach or accept any approach from any Restricted Patient or Prospective Patient in connection with the supply by the Clinician Entity of Exclusive Clinician Services; or
  1. perform or provide Exclusive Clinician Services to any Restricted Patient or Prospective Patient; or
  1. …
  1. …
  1. Clause 19.4(a) is to be read and has effect as the separate restrictions that result from combining each sub-clause of it with each Restraint Period. The validity of each separate restraint is not affected by the invalidity of any other restraint.

19.5  Non competition

  1. The Clinician Entity agrees that, during the Restraint Period it will not, in competition with CFC, directly or indirectly, on its own account or for any other person, carry out or perform a Restrained Activity inside the Restraint Area.
  1. Clause 19.5(a) is to be read and has effect as the separate restrictions that result from combining it with each Restrained Activity, combining each of those combinations with each Restraint Area and combining each of those combinations with each Restraint Period. The validity of each separate restraint is not affected by the invalidity of any other restraint.

19.6  Services that are not Exclusive Clinician Services

Nothing in this clause 19 shall restrict or otherwise prohibit the Clinician Entity or the Clinician from carrying out or performing any services that are not Exclusive Clinician Services (including the Non-exclusive Clinician Services).”

The services provided to patients

  1. [23]
    The applicant and the first respondent, through the services provided by the second respondent, jointly provided patients with procedures that were necessary to achieve or hopefully achieve pregnancies for the patients.  This case concerns the payment of fees associated with two procedures the parties jointly provided:  Egg Pick Up procedures and Frozen Embryo Transfer procedures.  The Egg Pick Up procedure involved collecting eggs from a patient’s ovaries.  This was a procedure the second respondent performed and for which she charged the patient a fee.  The applicant also charged the patient fees for this service under Medicare Item Numbers 13200, 13201 and 13206.[4]  The eggs collected were processed in the applicant’s laboratory to create embryos in vitro.  If or when that process was completed, the second respondent might perform a fresh embryo transfer procedure by which an embryo is transferred to the patient’s uterus.  A Frozen Embryo Transfer procedure involved the second respondent transferring previously frozen embryos into the patient’s uterus.  The second respondent charged the patient a fee for the Frozen Embryo Transfer procedure.  The applicant also charged the patient a fee for the services it provided before and during this procedure under Medicare Item Number 13218.
  2. [24]
    The contract (clause 8.4(a)) required the applicant to pay the first respondent a payment for the services the second respondent provided during the Egg Pick Up procedure that the applicant had charged the patient for, and for which the second respondent could not separately charge the patient.  The contract (clause 8.4(b)) required the applicant to pay the first respondent a payment for the services the second respondent provided during the Frozen Embryo Transfer procedure for a similar reason.  The contract describes these fees as the EPU Cycle Management Fee and the FET Cycle Management Fee respectively (clauses 8.4(a) and 8.4(b)).
  3. [25]
    The letter of 17 January 2025 had been preceded by correspondence from the first respondent on 23 December 2024.  On that date the first respondent wrote to the applicant and asserted the applicant was in breach of clause 8 of the contract and demanded the applicant remedy the breach to the first respondent’s satisfaction within 20 business days.  After referring to clause 1.1 and the definition of fees, and in particular to item 3 of that definition, the letter asserted the fees paid to the first respondent by the applicant were not all increased “annually pro rata with the increase … in fees charged by [the applicant] to patients”.  The letter asserted that having regard to the increases in the fees billed to patients in 2023 and 2024 for Medicare Item Numbers 13200, 13201 and 13218, the first respondent should have been paid an additional $18,048.80 up to and including 30 November 2024.  The letter demanded the breach of the contract be remedied by the applicant paying the amount of $18,048.80 within 20 business days. 
  4. [26]
    On 9 January 2025 the applicant wrote to the first respondent and denied there had been any underpayment. 
  5. [27]
    In the letter of 17 January 2025 the first respondent commenced by acknowledging the calculations that had been enclosed with the letter of 23 December 2024 did not use the correct underlying patient fees for Frozen Embryo Transfer and therefore acknowledged the shortfall sought was the sum of $6,924.50.  The first respondent asserted this underpayment constituted a breach of clause 8 in respect of the fees paid for Frozen Embryo Transfer from 2021 to 2024 but only sought recompense for the shortfall between the period January 2023 to November 2024.  The letter asserted that clause 8 had been breached by the applicant “failing to pay the ‘EPU Cycle Management Fee’ and the ‘FET Cycle Management Fee’ to [the first respondent] reflecting annual increases pro-rated to [the applicant’s] own increase in patient fees”.  The letter gave notice that the applicant had failed to remedy its breach of clause 8 to the first respondent’s satisfaction.

First issue – did the applicant breach clause 8, relevantly clauses 8.4 and 8.6?

Applicant’s submission

  1. [28]
    The applicant submits that the following construction of clauses 8.4 and 8.6 leads to the conclusion that the applicant did not breach clause 8.
  2. [29]
    Clause 8.4(a) stated that each time the applicant provided a patient with services that comprised any of the Medicare numbers 13200 and 13201 the applicant would pay “the EPU Cycle Management Fee” to the first respondent.  Clause 8.4(b) stated that each time the applicant provided a patient with services that comprised Medicare number 13218 the applicant would pay “the FET Cycle Management Fee” to the first respondent.
  3. [30]
    Clause 8.4 had to be understood in context.  The context included clauses 8.6 and 8.7.  The clause 8.6 requirement for the applicant to pay the first respondent “the Fees within the Payment Period” required the applicant to pay the first respondent an amount equal to the sum total of the EPU Cycle Management Fee and FET Cycle Management Fee calculated as owing to the first respondent each month, and the payment was to be made within 14 days after an invoice was issued at the end of each month.
  4. [31]
    The expressions “EPU Cycle Management Fee” and “FET Cycle Management Fee” in clauses 8.4(a) and 8.4(b) were each defined in clause 1.2 as having “the meaning given to it in the ‘Fees’ section of the Reference Schedule”.  Next to the word ‘Fees’ in the Reference Schedule appeared items 1, 2 and 3.  Item 1 set out the fixed amounts payable for the categories of “EPU Cycle Management Fee”.  Item 2 set out the fixed amounts payable for the categories of “FET Cycle Management Fee”.  Item 3 provided “The Fees referred to in items 1 and 2 shall be increased annually pro-rata with the increase, if any, in fees charged by [the applicant] to Patients for the relevant CFC Services”.  The “Fees” definition was not an operative provision, rather clause 8.4 was the operative provision and items 1 and 2 were definitions to be inserted into clause 8.4.  Item 3 was not an operative provision.  It provided the formula for calculating increases to the fees defined in items 1 and 2.
  5. [32]
    When the contract commenced (on 28 February 2018) the amount of each fee was fixed in the amounts set out in the subparagraphs to items 1 and 2.  An example was item 1(a)(5), “in all other cases, $500.00”.  For each subsequent year the amount of the fees was fixed by applying the pricing formula (item 3).  That formula was  “increased annually pro-rata with the increase, if any, in fees charged by [the applicant] to Patients for the relevant CFC Services”.
  6. [33]
    To apply the formula the “inputs” were (i) the patient fee for the relevant CFC service in the previous year; (ii) the increase, if any, to the patient fee for the relevant CFC service; and (iii) the amount of relevant fee as defined in item 1 or item 2.  So, to calculate the fee within item 1(a)(5) for 2019, the formula required (i) the patient fee for 2018, which was $8,100.00, then (ii) the patient fee for 2019, which was $8,800.00 (an increase of 8.64%) and then (iii) the fee for item 1(a)(5) became $543.00 which was $500.00 increased by 8.64%.

Respondents’ submission

  1. [34]
    The respondents advanced two arguments about the proper construction of clause 8.4.
  2. [35]
    The primary argument was that if the fees paid to the first respondent in any given year exceeded the prescribed contractual minimum (as in fact had been the case for every year since 2019), in the following year any subsequent increase was to be applied by reference to the fees that had actually been paid to the first respondent rather than the hypothetical minimum amount that could have been paid to the first respondent.
  3. [36]
    To illustrate the point the respondents posited the following example.  Suppose that in Year 1 the fee for the relevant CFC service had been $500.00 and the EPU Cycle Management Fee had been $100.00.  Suppose that in Year 2 the fee for the relevant CFC service was increased to $525.00 (an increase of 5%), then the contract required the EPU Cycle Management Fee to be increased to at least $105.00 (an increase of 5%) but in fact the EPU Cycle Management Fee was instead gratuitously increased by the applicant to $110.00 (an increase of 10%).  Thus, the increase in the EPU Cycle Management Fee paid by the applicant to the first respondent in Year 2 was more than that which was contractually required by item 3.  Item 3 only obliged the applicant to increase the EPU Cycle Management Fee to $105.00 (a 5% increase, the same as the increase in the fee for the relevant CFC service).  If in Year 3 the fee for the relevant CFC service was increased to $535.00 (an increase of 2% on $525.00) the correct amount of EPU Cycle Management Fee the applicant had to pay was $112.20, an increase of 2% on the fee of $110.00 (in fact paid the previous year).  However, on the applicant’s construction, the first respondent’s Year 3 entitlement was to be determined by applying the 2% increase to the hypothetical minimum of $105.00 which would result in a Year 3 fee of only $107.10.
  4. [37]
    Support for the respondents’ construction was said to derive from item 3 – “The fees referred to in items 1 and 2” (that is the EPU Cycle Management Fee and the FET Cycle Management Fee) are “to be increased annually pro-rata with the increase, if any, in fees charged by [the applicant] to patients for the relevant CFC Services”.  Nothing in the contract prevented the applicant from increasing the fees by more than the contractual minimum.  It accorded with the natural commercial reading of item 3 that whenever the EPU Cycle Management Fee or FET Cycle Management Fee was increased, whatever the amount of the increase became the new EPU Cycle Management Fee or FET Cycle Management Fee.  Item 3 required those fees to be increased by at least the same percentage as the relevant CFC fees.  Were it to be otherwise, item 3 would have said “The hypothetical minimum fees are to be increased …”.
  5. [38]
    This construction of item 3 was said to accord with how a reasonable businessperson would interpret the contract.  This is supported by the fact that each year, when the applicant informed the second respondent and other clinicians of the increases to EPU Cycle Management and FET Cycle Management Fees, the applicant expressed percentage increases by reference to the actual fees payable and paid in the preceding year.  For example, on 27 January 2020 the applicant sent an email stating that the new EPU Cycle Management Fee of $620.00 was “up 3% from $600.00”.  In fact $600.00 had been the fee paid in the preceding year, rather than $543.20 (the hypothetical minimum).  Also, when Mr Nathan wrote to the second respondent in the context of the current dispute about allegedly outstanding fees, he too expressed the percentage increases from year to year by reference to the amounts actually paid in the previous year rather than the hypothetical minimum.
  6. [39]
    The subsidiary argument was that even if the applicant’s construction was correct, the applicant breached clause 8.4 because it underpaid the FET Cycle Management Fee.  Clause 8.4 created separate obligations to pay EPU Cycle Management Fees and FET Cycle Management Fees.  A failure by the applicant to pay the EPU Cycle Management Fee would breach clause 8.4(a).  A failure to pay the FET Cycle Management Fee would breach clause 8.4(b).  Clauses 8.4(a) and 8.4(b) were not definitional clauses.  Each imposed separate obligations and entitlements.  Clause 8.6 was only concerned with the timing for payments.  It did not create the obligation to pay.  If understood this way, the applicant did not seem to dispute it had underpaid the FET Cycle Management Fee every year except for 2025.
  7. [40]
    The respondents submitted in support of the primary and subsidiary arguments that the applicant could not retrospectively reallocate funds it had allocated to the payment of EPU Cycle Management Fees to overcome the breach of clause 8.4(b) by underpaying FET Cycle Management Fees.[5]  Any suggestion that this submission  was founded on there being either another contract or that there had been a variation to the contract (the Clinician Services Contract) was ultimately disavowed. 
  8. [41]
    To demonstrate how the applicant allocated the fees and the underpayment of FET Cycle Management Fees for 2023 and 2024 the respondents again relied on the following dealings between the parties.  First, correspondence sent at the beginning of each calendar year in which the applicant announced what the EPU Cycle Management Fees and the FET Cycle Management Fees would be for that year.  Second, the applicant’s provision of monthly tables which set out separate fees for EPU Cycle Management Fees and FET Cycle Management Fees.  Third, correspondence sent to the second respondent in December 2023 showing EPU Cycle Management Fees but which made no reference to FET Cycle Management Fees for the same period in response to the second respondent’s letter which had alleged a shortfall in the payment of both fees.

The correct construction of clauses 8.4 and 8.6

  1. [42]
    In Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd the principles applicable to the interpretation of a commercial contract were:[6]

“The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose.

In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.

Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning.” (Footnotes omitted)

  1. [43]
    The operative provision in a contract is ordinarily to be read by reading the defined term into it.[7]
  2. [44]
    Things said or done after a written contract has been made cannot be legitimately used as an aid in construing the contract.[8]
  3. [45]
    The correct construction of clause 8.4 must be reached by considering the text of the clause and by reading into clause 8.4(a) and 8.4(b) the definitions of EPU Cycle Management Fee and FET Cycle Management Fee respectively.  As is apparent from the summaries of the parties’ submissions, the relevant context for the consideration of clause 8.4 was largely confined to the definition of ‘Fees’ and clause 8.6.  However, clause 8.4 was not the only clause that provided for payments.  Clause 8.1 concerned fees payable to the first respondent by patients.  Clause 8.2 concerned fees payable to the applicant by patients.  Clause 8.3 concerned payments to the first respondent by the applicant in recognition of the first respondent’s inability to charge patients for some Ultra Sound Services.  The “Background” provisions A-D at the start of the contract, the definitions of each parties’ business in the Reference Schedule and the provisions of clause 8 reveal a purpose of the contract.  It was to provide for how the parties were to be reimbursed for the provision of services to patients which required their mutual resources and expertise in order to provide patients with the chance to achieve pregnancies through in vitro fertilisation.
  4. [46]
    The exercise of construing the text of clause 8.4 can proceed by focusing on either clause 8.4(a) or 8.4(b) because both clauses contain the same language, except that clause 8.4(a) is concerned with Medicare service numbers relevant to Egg Pick Up procedures whereas clause 8.4(b) is concerned with a Medicare service number relevant to Frozen Embryo Transfer procedures.  Otherwise, both clauses provide, “Each time CFC provides to a patient CFC Services that currently comprise” a specified Medicare number “CFC will pay the” relevant “Cycle Management Fee to the Clinician Entity”.  Each clause is concerned to provide for when a fee is payable by the applicant to the first respondent and what that fee will be.  However, ascertaining the amount of the fee, whether it be EPU Cycle Management Fee or FET Cycle Management Fee, is determined by incorporating the relevant definition.
  5. [47]
    Focusing on clause 8.4(b), each time the applicant provided a patient a service that was comprised in Medicare number 13218 it would pay the FET Cycle Management Fee to the first respondent.  Where the patient was billed by the applicant under Medicare number 13218 and that patient was bulk billed, the fee payable to the first respondent was $0.  This is clear from item 2(a) in the Reference Schedule.  A higher fee ($102.50) was payable by the applicant to the first respondent if a patient was billed by the applicant under Medicare number 13218 and it was a case of “minimal gap cycles”, or if the Frozen Embryo Transfer was after “CGH”.  This is clear from item 2(c) and (d).  Then in all other cases, so in the remainder of cases not covered by item 2(a), (b), (c) or (d), where the applicant billed a patient under Medicare number 13218 the fee was $205.00.  This is clear from item 2(e).  Relevantly to clause 8.4(b), item 3 said the fees referred to in item 2 would be increased “annually pro-rata with the increase, if any, in fees charged” by the applicant “to Patients for the relevant CFC Services”.  As the Reference Schedule defined “CFC Services” to comprise 7 Medicare service numbers, one of which was 13218, as well as 10 services that did not attract a Medicare service number, it is clear that the relevant CFC Service for the purposes of items 2 and 3 was Medicare number 13218.
  6. [48]
    The language used in item 3 clearly directs attention to the fee the applicant charged a patient for the service covered by Medicare number 13218 and to the fee the applicant intended to charge the patient for that service in the following year.  These two fees are relevant because they provide the foundation from which to consider the quantum of the fee payable, for example in item 2(e).  The item 2(e) fee will increase each year “pro-rata with the increase, if any, in the fee charged to” the patient for the service.  There shall then be a proportionate increase in the item 2(e) fee.  Nothing in the text of item 3 suggests that regard is to be had to the fee the applicant in fact paid the first respondent in the previous year when determining the level of the fee to be paid for the subsequent year.  The same outcome must apply in relation to items (2)(a) to (d) and to items 1(a)(1) to (5) and 1(b)(1) to (4).
  7. [49]
    Considered in the context of clause 8.6, the correct construction of clauses 8.4(a) and 8.4(b) when read with the definition of “Fees” is as follows.
  8. [50]
    An obligation arose to pay the first respondent the amount set out in item 1(a) increased annually pro-rata with the increase in any fee charged to the patient depending on which one of five categories the patient fell into when billed under Medicare Item Number 13200 or 13201.  An obligation arose to pay the first respondent the amount set out in item 1(b) increased annually pro-rata with the increase in any fee charged to the patient depending on which one of four categories the patient fell into when billed under Medicare Item Number 13206.[9]  Any of these nine amounts constituted the EPU Cycle Management Fee. 
  9. [51]
    An obligation arose to pay the first respondent the amount set out in item 2 increased annually pro-rata with the increase in any fee charged to the patient, depending on which one of five categories the patient fell into when billed under Medicare Item Number 13218.  Any of these five amounts constituted the FET Cycle Management Fee.
  10. [52]
    Neither clause 8.4 nor clause 8.6 obliged the applicant to allocate amounts to the EPU Cycle Management Fee as opposed to the FET Cycle Management Fee.  In paying these Fees  the obligation on the applicant was just to pay at least the total amount of ‘Fees’ claimed in any invoice “within the Payment Period” (clause 8.6).
  11. [53]
    A reasonable businessperson would understand these clauses in the way just set out above.  This construction accords with that put forward by the applicant. 
  12. [54]
    In the event that the Court upheld the applicant’s construction of clauses 8.4 and 8.6 the respondents accepted the correctness of the calculations performed by Mr Schweitzer, the applicant’s chief financial officer, about how much had been paid to the first respondent in 2023 and 2024.[10]
  13. [55]
    The applicant did not breach clause 8.4 of the contract by paying the first respondent those fees.  The fees were calculated in accordance with what I find to be the correct construction of clauses 8.4 and 8.6.
  14. [56]
    On what I have found to be the proper construction of clauses 8.4 and 8.6 the principle the respondent relies on from Workpac Pty Ltd v Rossato[11] is not engaged.
  15. [57]
    The respondents initially took another point: that the applicant repudiated the contract in not paying the correct fees, denying a breach of contract on 9 January 2025 and in failing to pay the first respondent the money demanded in either December 2024 or January 2025.  Ultimately, repudiation was not maintained as an independent issue by the respondents because it was only relied on in the event that the respondents’ construction of clause 8 was correct.[12]  As I have concluded that the applicant was not in breach of clause 8, the applicant’s responses to the first respondent’s demands of December 2023 and January 2024 did not amount to repudiation of the contract.

Second issue – the validity of the notices of termination

  1. [58]
    The applicant submitted that if the Court concluded it had breached clause 8, either by underpaying both the EPU Cycle Management Fee and the FET Cycle Management Fee, or only because it underpaid the FET Cycle Management Fee, the first respondent’s correspondence dated 23 December 2024 and 17 January 2025 did not constitute valid notices to remedy under clause 18.3.
  2. [59]
    The correspondence of 23 December 2024 asserted there had been an underpayment of fees (both EPU Cycle Management Fee and FET Cycle Management Fee) for 2023 and 2024 of $18,048.80, that this underpayment constituted a breach of clause 8 and demanded the applicant remedy the breach by paying $18,048.80 within 20 business days.
  3. [60]
    The correspondence of 17 January 2025 acknowledged the calculations enclosed in the earlier correspondence were wrong, yet maintained there had been an underpayment of both fees for 2023 and 2024 of $6,924.50 and this underpayment was a breach of clause 8.  The correspondence enclosed a tax invoice for $6,924.50.
  4. [61]
    The applicant submitted the error in the amount claimed on 23 December 2024 was large enough that it rendered the first notice invalid.  The applicant submitted the second notice was invalid because the respondents had not proven at trial that this amount was correct.  Further, if the Court found a breach of clause 8 due only to underpayment of the FET Cycle Management Fee, neither notice identified that breach with sufficient specificity and did not sufficiently specify the remedy sought.  Put another way, in this event, the notices did not confine the breach to a failure to pay FET Cycle Management Fees, they each also alleged underpayments of EPU Cycle Management Fees.
  5. [62]
    In view of the conclusion that the applicant did not breach clause 8, no valid notices to remedy were sent under clause 18.3.  However, had it been that the applicant was in breach of clause 8, either by underpaying the EPU Cycle Management Fee and the FET Cycle Management Fee, or the FET Cycle Management Fee alone, I would have regarded the notices as valid for the reasons following.
  6. [63]
    The notices specified the years in which an underpayment of fees occurred.  The notices specified the nature of the Fees in both cases allegedly underpaid.  The notices also specified the shortfall and identified the remedy sought, namely, the payment of the alleged shortfall.  There was a discrepancy between the notices about the extent of the shortfall.  However, that is not of itself fatal to validity.  In a case the applicant relied on, Thomas J said:[13]

“An error in specification of the appropriate sum will not be the end of the matter. A question of fact and degree is involved in every case. The most relevant factors in determining validity will be the extent of the error, and the capacity of the notice to give the mortgagor a reasonable opportunity to do what he is obliged to do.”

  1. [64]
    The applicant also relied on Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6)[14] for the proposition that the recipient should not be left to speculate about how a breach could be remedied.  In the present case, the extent of the discrepancy was not substantial.  The applicant could clearly appreciate from the notices the period the breach concerned and what was required of it to remedy the alleged breach – the payment of the sum sought in the correspondence of 17 January 2025.
  2. [65]
    Whether the applicant validly terminated the contract on 17 March 2025 had significance as the restraint clauses only apply in the event of termination.  There was no issue that if the first respondent had not properly terminated the contract for a breach of clause 8, the second respondent had repudiated the contract by emptying her office and ceasing to work at the Newstead clinic by early March 2025.[15]  I find that repudiatory conduct entitled the applicant to terminate the contract, as it did on 17 March 2025.  On that date the applicant’s solicitors wrote, “… our client considers that [the first respondent] has repudiated the Clinician Services Contract.  Our client accepts that repudiation, and elects to terminate the Clinician Services Contract with immediate effect”.
  3. [66]
    A declaration is a discretionary remedy.  No submissions were made by the applicant about why a declaration that the first respondent’s notice of termination was invalid and of no effect was necessary. A declaration would seemingly produce no foreseeable consequences if granted[16] in view of the consequences following from the grant of an injunction.   The claim for a declaration is refused.

Third issue – are the restraint of trade clauses no more than reasonably necessary to protect the business interests of the applicant?

  1. [67]
    Evidence relevant to the reasonableness of the restraint of trade clauses was provided by Mr Nathan.  Some evidence given by the second respondent was also relevant to this issue.

Evidence of Mr Nathan

  1. [68]
    Mr Nathan said in the months leading up to February 2018 a working group comprised of a small number of then clinician shareholders in the applicant cooperated to settle on a version of the Clinician Services Contract.  Mr Nathan said the restructure which preceded the signing of contracts in February 2018 allowed the then nine shareholders in the applicant, one being Sillery, to sell their shares in the applicant and as a consequence of that, the corporate company became the sole shareholder in the applicant.  Eighteen entities, including Sillery, became participating shareholders in the holding company on 28 February 2018.  Seventeen of the participating shareholders represented some but not all of the clinicians aligned with the applicant.  Each of the 17 clinician entities signed a Clinician Services Contract on materially the same terms as that signed by the first respondent, except for one clinician entity where the clinician was planning an imminent retirement.  At the time of the corporate restructure Sillery held 533 shares in the applicant.  As part of the restructure, Sillery disposed of those shares in the applicant for a cash consideration of $978,368.98, as well as being issued with 978,283 shares in the holding company.
  2. [69]
    Mr Nathan said in his experience it is very difficult for a clinician practising on their own to operate an IVF clinic due to the costs of establishing and operating such a clinic.  He said that as at 2025 it would cost approximately $6m to fit out 1000 m² for a new clinic and an additional $1.5m would be required for equipment. 
  3. [70]
    Mr Nathan said that it was very common for a patient to have to undergo multiple Egg Pick Up cycles and/or multiple Frozen Embryo Transfers before a successful pregnancy was achieved, culminating in a live birth.  This meant, he said, that the relationship between the applicant, the second respondent and the patient commonly extended beyond a year.  Also, sometimes a patient who had undergone a treatment resulting in a successful pregnancy and the birth of a baby decided to undergo further treatments in order to have another child.  He said this meant that the relationship between the applicant, the second respondent and the patient might extend over several years.
  4. [71]
    Mr Nathan said if a clinician was to cease working with the applicant company and begin working with a competitor to the applicant, the clinician would be able to attract existing and prospective patients of the applicant to the competitor.  Also, the clinician could attract to the competitor new patients who would otherwise have become patients of the applicant.  In these circumstances, the applicant would lose the benefit of the fees that could be charged to those new patients who would otherwise have become patients of the applicant company. 
  5. [72]
    Mr Nathan’s evidence also went to the proximity of many of the patients’ residences to the clinics.  The second respondent had worked mainly at the Newstead clinic and occasionally at the Sunnybank clinic.  His evidence was that approximately 80 per cent of patients who attended the Newstead clinic lived within a 50 kilometre radius of it.  His evidence was that as many as 90 per cent of patients who attended the Sunnybank clinic lived within 50 kilometres of that clinic.

Evidence of second respondent

  1. [73]
    The second respondent said she began working with the Queensland Fertility Group on 10 March 2025 through rooms at Spring Hill which was about five kilometres from the Newstead clinic.  When she moved to Spring Hill she changed the address on her website.  She said some of the patients she had been treating at the applicant’s Newstead clinic found out where she had moved to.  She had taken on 36 new patients since moving to her new premises.  These patients were not patients she had previously seen while working at Newstead, or they were patients she had not seen in the course of the last two years of working at Newstead.  She said that since starting at Spring Hill she had provided services to approximately 18 patients who were either patients she was seeing at the time she left Newstead or patients she had seen within the last two years before she left Newstead.  She said she did not take any of these patients with her from Newstead.  She did not inform them of her new location.

The restraint clauses 

  1. [74]
    A contractual restraint of trade clause is presumed to be void as against public policy,[17] but this presumption may be displaced if it is shown to be reasonably necessary to protect the legitimate interest of a party and if it is reasonable in the public interest.[18]
  2. [75]
    The enforceability of a restraint of trade clause is to be determined as at the date of its creation.[19]
  3. [76]
    It was not in issue that as at 28 February 2018 the applicant had legitimate business interests that were capable of protection and that clause 19 was directed towards the protection of those interests.  The issues in dispute concerned the reasonableness and therefore the enforceability of clause 19.4(a)(1)-(3) and clause 19.5(a).  A further issue concerned whether those clauses properly construed were reasonable in the public interest.  The respondents submitted that the clauses went beyond what was reasonably necessary to protect the applicant’s interest and also that they were not reasonable in the public interest. 
  4. [77]
    The onus is on the applicant to establish that these clauses were reasonably necessary to protect its legitimate interests.  The onus is on the respondents to establish that the restraints were unreasonable in the public interest.  The matter of whether the restraints were reasonable in the public interest is dealt with below under the heading “fourth issue”.
  5. [78]
    The effect of these clauses, briefly stated, is as follows.  Clause 19.4(a)(1)-(3) restrains the respondents for a period of 12 months from when the contract was terminated, from supplying, performing or providing Exclusive Clinician Services to any Restricted Patient or Prospective Patient or from soliciting, enticing away or accepting any approach from such patients in connection with the supplying of, performance of or provision of such services.  Clause 19.5(a) restrains the respondents for a period of 12 months from when the contract was terminated, from carrying out or providing Exclusive Clinician Services within a 50 kilometre radius of any location in Queensland at which the first or second respondents had provided Clinician Services during the two years preceding the termination of the contract.  It is accepted by both sides that the clauses do not restrain the second respondent from providing general obstetric and gynaecological services anywhere to any patient.

Clause 19.4(a)(1)-(3)

  1. [79]
    I am persuaded that clause 19.4(a)(1)-(3) is reasonably necessary to protect the applicant’s legitimate business interest in maintaining its relationship with persons who fall within one of two categories.  The clause prevents the respondents from providing Exclusive Clinician Services to either a Restricted Patient or a Prospective Patient and it prevents the respondents from attracting either type of patient away from the applicant, and from accepting an approach from either type of patient with a view to providing Exclusive Clinician Services to either type of patient.  It only operates to protect the applicant’s interest in customer connection for 12 months from the time the contract is terminated.  It only protects relationships which the applicant had with either type of patient if that relationship was one which also involved a relationship with the respondents in the two years prior to the termination of the contract.  In the case of a Restricted Patient the connection has to be “any direct and substantial dealing” and in the case of a Prospective Patient the connection is confined to patients about whom the respondents became “privy to Confidential Information or Personal or Information”.  Therefore, it can be seen that the protection for the applicant is limited by time and limited to those patients in relation to whom the respondents had had particular types of association.
  2. [80]
    The reasonableness of the limited restraint provided by this clause is demonstrated by the following.  In the approximately four years period up to February 2018, Mr Nathan said the applicant had engaged in extensive marketing of its clinicians, including the second respondent.  These clinicians had been marketed to general practitioners in conjunction with the applicant’s services.  The marketing also involved marketing to the general public through outdoor advertising and promotion of the clinicians on its website.  He said in early 2018 the second respondent promoted her connection as a clinician with the applicant on her own website.  Mr Nathan’s evidence was that in the case of a person who became a patient of the second respondent for IVF treatment, that patient was typically a patient for between 42 and 52 weeks, though in 2018 he said the length of the typical relationship with the second respondent may have been about six weeks shorter.  However, he said it was “not uncommon” for this relationship to exceed 52 weeks with some patients.  Some patients had to undergo a number of Egg Pick Up Cycles and/or Frozen Embryo Transfers before a successful pregnancy was achieved and this was a reason the relationship could commonly exceed 52 weeks.  So far as the two year prior period was concerned, Mr Nathan said that a patient who had undergone a treatment which resulted in the birth of a baby might return to the applicant and the second respondent in an endeavour to have another child.  The second respondent’s evidence was that older women might desire to have a second baby in less than two years.  She said that she had had patients who had seen her repeatedly over a period as long as a decade.
  3. [81]
    Mr Nathan said a restraint of 12 months would prevent the second respondent from attracting existing patients to another clinic.  Mr Nathan said that in 2017 the second respondent generated $2.17m of revenue for the applicant. 
  4. [82]
    If the second respondent could commence working with another clinic (as the evidence shows is the more common way practitioners with her skills now work) then the applicant would stand to lose patients and thereby lose business.  A period of 12 months allows a reasonable time for the applicant to find a replacement for the second respondent and for it to transfer patients to its other clinicians in circumstances where the applicant went to the expense of marketing the second respondent as one of its clinicians.  In view of this conclusion it is not necessary to consider whether clause 19.4(a)(1)-(3) would be reasonable having regard to the shorter periods in the definition of Restraint Period.
  5. [83]
    That the applicant’s clinicians’ standing is more significant to a patient’s decision to come to the applicant’s clinic than the reputation of the clinic itself is borne out by the second respondent’s evidence.  She said her patients primarily sought her services.  This also demonstrates the reasonableness of a restraint on the second respondent’s activities in view of what the applicant stood to lose upon the sudden departure of the second respondent.  The second respondent’s evidence that only about 10 per cent of her patients came to her via a referral from the applicant demonstrates the reasonableness of a restraint on the second respondent accepting approaches from Prospective Patients.
  6. [84]
    The respondents advanced a number of submissions concerning why the Court should not conclude that the applicant had discharged its burden of showing that both clause 19.4(a)(1)-(3) and also clause 19.5(a) were reasonable as between the parties.
  7. [85]
    First, as the contract was for a term of five years after which the first respondent could terminate it upon giving notice, the respondents submitted the Court should find that the parties’ intention was to protect goodwill for five years and that it was unreasonable for the restraints to operate after five years.  However, the contract did not contain any clause supportive of this intention, and also, the validity of the restraint is to be judged as at the date of its creation.  The parties to this contract determined that a 12 month restraint was reasonable.  That is an indication of what was reasonable as between them.[20]  Also, Mr Nathan’s evidence was that the form of this contract was settled on by a number of clinician shareholders.  Mr Nathan said that 17 of the clinician entities signed a contract on materially the same terms as the first respondent.  That is evidence that the restraint was considered by the clinicians to be reasonably necessary.  The applicant’s contention that the longer a clinician worked in conjunction with the applicant the greater the importance of protecting the applicant’s legitimate interests has force and militates in favour of the reasonableness of these clauses.
  8. [86]
    Second, the respondents contended that the reasonableness of the clauses is to be considered by taking into account the effect on the value of the shares owned by Sillery Pty Ltd if it is designated a “bad leaver”.  Sillery may be regarded as a “bad leaver” under another contract because the first respondent repudiated the Clinician Services Contract.  As Sillery now owns over 1.2m shares, recently valued at $2.15 per share, the respondents assert Sillery will suffer a penalty of at least $1.3m and this outcome shows the applicant has not discharged its onus of proving the reasonableness of the restraints as between the parties.  If such a result comes about, it is due to another contract (the Shareholders Agreement) between different parties and it is therefore not a relevant consideration.  Also, the reasonableness of a restraint is to be determined as at the date of its creation.
  9. [87]
    Third, the respondents submit that it is not reasonable that the second respondent, a clinician who received a lesser consideration in the form of shares in the holding company and cash, should be subject to the same period and terms of restraint as clinicians who received many more shares and far more cash.  This submission, however, overlooks the explanation for the difference in the consideration paid which was that those other clinicians had more to sell. 
  10. [88]
    Fourth, the absence of any geographical restraint on the operation of clause 19.4(a)(1)-(3) tended towards illustrating the unreasonableness of the clause.  If the second respondent moved interstate she would be restrained from providing Exclusive Clinician Services to a former patient who had moved interstate.  This argument fails to heed the second respondent’s evidence about her position at the time the restraint was entered into.  In 2013 she and her husband decided to return to Brisbane.  Her intention was to build her professional and personal life in Brisbane.  By late January 2018 she had established her professional practice in Brisbane and their children attended schools in Brisbane.  She then had no intention of relocating her professional practice from Brisbane or moving her family from Brisbane.  Accepting this evidence, the absence of any geographical restraint in clause 19.4(a)(1)-(3) does not support the unreasonableness of this restraint which is directed towards the protection of good will.  In making this observation I am mindful that the onus does not rest on the respondents to demonstrate unreasonableness as between the parties. 

Clause 19.5(a)

  1. [89]
    The applicant submitted that clause 19.5(a), which it acknowledged was not confined to Restricted or Prospective Patients, was necessary to protect the applicant’s market share.  It relied on Mr Nathan’s evidence that the second respondent could attract to a competitor clinic new patients who otherwise would have come to the applicant’s clinic.  In that event, Mr Nathan said the applicant would lose the benefit of the fees that could be charged to those new patients.  The applicant submitted it was reasonable for a former business owner to be restrained from establishing a competing business in the “same locality” as that would undermine the value and goodwill of the applicant’s business which had involved the purchase of the first respondent’s business.  The applicant submitted the restraint in clause 19.5(a) is to be understood as operating within a radius of any location in Queensland where the second respondent had worked.  However, if understood as the respondents urged it should be, it would be at risk of being regarded as unreasonable. 
  2. [90]
    The respondents submit that the restraint was unreasonable because in restraining the second respondent from providing services anywhere in the State of Queensland the protection went much further than protecting the legitimate business interest of customer connection.  At the time the contract was entered into the second respondent had been based in Brisbane for some years.  At that time the applicant provided services at three locations in Queensland – at Wickham Terrace Brisbane, at Sunnybank and at Robina.  The contract contemplated that the applicant’s business would expand.  As matters turned out, the business expanded to Toowoomba.  Clause 19.5(a), when read with the definition of Restraint Area, restrains the respondents for a period of 12 months from carrying out or performing Exclusive Clinician Services inside an area within a 50 kilometre radius of any location which is located in a State or Territory in which either respondent had, in connection with the applicant, provided clinician services during the last two years.  The respondents said that the result was that the second respondent was restrained from providing Exclusive Clinician Services anywhere in Queensland.  They said that in view of Mr Nathan’s evidence that roughly 80 per cent of the patients who attended the Wickham Terrace clinic and the Newstead clinic (after the applicant shut the former and opened the latter) lived within a 50 kilometre radius of the clinics, a restraint confined to the protection of customer connection in the area of Brisbane might be reasonable because such a restraint would have some connection to patients likely to seek out the second respondent. 
  3. [91]
    I consider that clause 19.5(a) is to be construed as restraining the second respondent for a period of one year from the date of termination of the contract from carrying out Exclusive Clinician Services within a radius of 50 kilometres of any place in Queensland where the first or second respondents provided Exclusive Clinician Services during the last two years prior to the termination of the contract.  On the evidence this means within a 50 kilometre radius of Newstead and a 50 kilometre radius of Sunnybank.  I consider that upon this construction clause 19.5(a) is reasonable to protect the applicant’s legitimate business interests having regard to Mr Nathan’s evidence about the costs involved in establishing an IVF clinic and the willingness of the majority of patients to travel up to 80 kilometres to see the specialist they desire to see.  Having reached this conclusion I do not consider it is necessary to decide whether the clause would be reasonable having regard to the reduced radii in the definition of Restraint Area or whether the clause would be reasonable having regard to the shorter periods in the definition of Restraint Period.

Fourth Issue – are the restraints reasonable in the public interest?

  1. [92]
    In support of the contention that the restraints are unreasonable in the public interest the respondents rely on the bonds of trust and confidence between a patient with complex problems inhibiting pregnancy and an IVF specialist skilled in dealing with complex cases.  The second respondent specialised in highly complex cases.  Many of her patients have particularly complicated problems such as genetic conditions.  The second respondent’s evidence was that only four or five other specialists in Brisbane deal with a significant number of these patients.  The waiting period to see such specialists is usually three or four months, although the passing of time, even only a month, can be the difference between achieving a pregnancy or not.  The evidence of  Dr Jarvis was that there were only a ‘few’ clinicians in Brisbane and the Gold Coast who provide IVF services to patients with complicated problems.
  2. [93]
    The respondents said that the restraints were unreasonable in the public interest in view of these circumstances and more generally in view of what was said to be the much more personal and intense relationship the second respondent had with such patients when considered against the doctor/patient relationship in other areas of specialty.  It was therefore unreasonable in the public interest to restrain the second respondent from providing Exclusive Clinician Services to such patients. 
  3. [94]
    The respondents placed reliance on Sherk v Horwitz.[21]  There a restraint on an obstetrician and gynaecologist was held to be unreasonable in the public interest due to a shortage of such specialists in the part of Ontario where the doctor wished to practice and due to patients’ entitlement to have the benefit of their specialist’s continuing care.  However, the conclusion about the restraint being unreasonable in the public interest was reached not just in reliance on the scarcity of specialists and patients’ wishes.  Reliance was also placed on provincial legislation that entitled the public to the widest choice in the selection of their medical practitioners and to a resolution of the provincial medical association disapproving of restrictive covenants.
  4. [95]
    The respondents also relied on Monash IVF Pty Ltd v Mooring.[22]  There, an interlocutory injunction to enforce a restraint against an IVF specialist had been refused.  The respondents relied on the judge’s description in this decision of the doctor/patient relationship as confidential and personal.  However, there were a number of reasons why an interlocutory injunction was refused in that case, including undue delay in seeking the interlocutory injunction.  The description of the doctor/patient relationship was not made in the context of considering whether restraints were unreasonable in the public interest. 
  5. [96]
    The respondents further pointed to an observation made by Applegarth J in Vision Eye Institute Ltd & Anor v Kitchen & Anor[23] that it might be regarded as contrary to public policy to enforce a restraint against a specialist obstetrician if it would deprive patients of treatment during or after pregnancy.
  6. [97]
    On this fourth issue the applicant drew attention to cases which declined to hold that restraints on doctors were unreasonable in the public interest.[24]
  7. [98]
    Indeed, as the authorities state, if restraints are reasonable as between the parties it is very difficult to establish unreasonableness in the public interest.[25]
  8. [99]
    The respondents’ submissions promoted the need to respect or protect the specialist/patient relationship as the decisive consideration in determining whether the restraints are unreasonable in the public interest.  Accepting that this relationship is a relevant consideration, and also an important consideration, there are nevertheless other matters that must be brought into account and they are next considered.
  9. [100]
    The second respondent deposed that IVF practices require the support of laboratories and the support services of the kind offered by the applicant.  She acknowledged that the applicant had provided the first respondent with access to nursing staff to accommodate her IVF services and with an operating theatre necessary for Egg Pick Up procedures and some Frozen Embryo Transfer procedures.  She acknowledged the applicant provided the services of storing and freezing embryos for use in the Frozen Embryo Transfer procedures.  She said that over approximately the last 30 years a significant number of specialists and doctors had moved from being sole practitioners or members of small practices to join larger “corporate groups” which enabled the specialists and doctors to share the costs associated with the types of services provided by the applicant and to allow doctors to obtain efficiencies of scale.  She said that the move to a corporate model had attracted the interest of non-medical investors.
  10. [101]
    Mr Nathan deposed that discussions with potential investors had preceded the arrangements arrived at in February 2018.  For patients undergoing IVF treatment he said the applicant provided nursing support, administrative support and the laboratory and scientific services necessary to create embryos in vitro.  IVF laboratories are required to obtain and maintain licences issued by the Reproductive Technology Accreditation Committee (RTAC).  The benefits of clinicians being aligned to a business like the applicant’s include that it enables the clinician to provide the full range of IVF services for the clinician’s patient by accessing an RTAC licenced clinic and Medicare rebates which can only be claimed if IVF services are performed in an RTAC certified facility.
  11. [102]
    Mr Nathan said that as at 2025 it could cost about $6m to fit out a new RTAC licenced clinic.  Prior to fitting out such a clinic the applicant is concerned to find clinicians committed to using it, a necessity to at least recoup the investment made in fitting out the clinic.
  12. [103]
    The evidence of the second respondent and Mr Nathan demonstrates the need for collaboration between clinicians and those providing clinics so that patients can obtain IVF treatment.  It is in the public interest that those who agree to collaborate honour their obligations to each other so that patients can have the services of specialists in RTAC certified clinics.  
  13. [104]
    There is a very clear public interest in investment in enterprises which provide the facilities and services necessary to enable and assist doctors to provide IVF services to those who need them.  Clearly, those who fund these enterprises are required to make significant capital investments. 
  14. [105]
    As to the scarcity of specialists in Brisbane, the evidence does not establish that if the second respondent is restrained from providing exclusive clinician services for up to 12 months from the date of termination of the contract there will not be other specialists to care for patients residing in Brisbane who have complex IVF problems.
  15. [106]
    In Vision Eye Applegarth J said[26] that a patient’s supposed right to see a doctor of their choice had to be:

“… balanced against important matters which served the public interest.  These include the public interest in the enforcement of contracts, including bargains where persons pay substantial amounts for goodwill on the understanding that the seller will not compete for a reasonable period with the party to whom the goodwill is sold.  The sale of interests in professional practices so as to allow parties to realise the value of their endeavour and the preservation of value in practices that are sold in the public interest.  Without facilitating such transactions by upholding parties’ bargains, the value of professional practices could not be preserved and professional succession encouraged.  The public interest generally requires such bargains to be honoured.  In making this observation about the public interest in the performance of contracts I do not wish to overstate the sanctity of contracts.” (Footnote omitted).

  1. [107]
    Taking into account all of these considerations the respondents have failed to establish the restraints are unreasonable in the public interest.  The public interest involves the consideration of the range of matters canvassed above, not merely the doctor/patient relationship.

Fifth Issue – whether an injunction should be granted

  1. [108]
    In the event the Court concludes the restraints are enforceable the second respondent submits the Court should nevertheless decline to exercise its discretion to grant an injunction restraining her from performing Exclusive Clinician Services.
  2. [109]
    The second respondent deposed that, subject to being enjoined, she intended to perform, provide or supply Exclusive Clinician Services (as defined in the contract) on her own behalf and/or on behalf of the Queensland Fertility Group but not on behalf of the first respondent.  She deposed that the first respondent will not perform, provide or supply Exclusive Clinician Services to any patients and she deposed that the first respondent had not done so since 24 February 2025.  In these circumstances the parties agree that if an injunction is issued it need only concern the second respondent.
  3. [110]
    The second respondent submits an injunction should not be granted because: damages are an adequate remedy (though the applicant has not sought damages); and, the interests of third parties (patients) would be seriously affected in a situation where damages would be an adequate remedy.  As the contract was one for exclusive referral (clause 3.3(c)) damages could be readily ascertained.  Any patients for whom the second respondent provided Exclusive Clinician Services after termination of the contract and who lived within the relevant radius could in due course be easily identified and calculations could be performed to ascertain how much the applicant would lose from those patients being treated by the second respondent at the new clinic instead of at the applicant’s clinic.  Any restricted or prospective patients seen by the second respondent after termination of the contract could in due course be easily ascertained and again the applicant could easily calculate how much it would have earned from those patients had laboratory services been provided by the applicant instead of at the clinic where the second respondent now works.
  4. [111]
    As to the effect on patients, the second respondent relied on affidavits provided by FH and MH, current patients of the second respondent, as well as a number of letters from patients annexed to the second respondent’s affidavit.[27]  Those affidavits and letters demonstrate the second respondent is a very highly regarded clinician so far as the deponents and authors of the letters are concerned.  Some are patients who have complex fertility problems.  All of the deponents and letter writers refer to their desire to continue to be treated by the second respondent, and to their reluctance to seek out the services of another IVF specialist having regard to the relationship of trust and confidence that the second respondent had engendered in each of them.
  5. [112]
    In furtherance of the submission that the rights of the applicant and the second respondent were not the only rights to be considered in determining whether an injunction should issue, the second respondent referred to Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia.[28]  In that case the majority said:[29]

“His Lordship cited with approval a passage from Dr Spry’s Equitable Remedies.  We too adopt the author’s statement:

‘the interests of the public and third persons are relevant and have more or less weight according to the other material circumstances.  So it has been said that courts of equity ‘upon principle, will not ordinarily and without special necessity interfere by injunction, where the injunction will have the effect of very materially injuring the rights of third persons not before the courts’.  Regard must be had ‘not only to the dry strict rights of the plaintiff and the defendant, but also the surrounding circumstances, to the rights or interests of other persons which may be more or less involved.’ So it is that where the plaintiff has prima facie a right to specific relief, the court will, in accordance with these principles, weigh the disadvantage or hardship that he would suffer if relief were refused against any hardship or disadvantage that might be caused to third persons or the public generally if relief were granted, even though these  latter considerations are only rarely found to be decisive.  (Conversely, detriment that might be caused to third persons or to the public generally if an injunction were refused is taken into account.)’.” (Footnote omitted).

  1. [113]
    As to the respondents’ argument about damages, the applicant relied on the evidence of Mr Nathan concerning the difficulties in calculating the loss of goodwill.  Mr Nathan said a post termination restriction mitigates the loss of revenue the applicant may suffer upon the departure of a clinician because if there is a period of time in which the departing clinician cannot attract existing and prospective patients away from the applicant the applicant has time to transition its existing and prospective patients to one or more other clinicians associated with the applicant.  He also said a post termination restriction allowed the applicant time to recruit a new clinician if necessary to meet the needs of existing or prospective patients.  Mr Nathan said it takes time to recruit a new clinician and to market and promote the new clinician in alignment with the applicant’s marketing and promotion arrangements.  The applicant’s counsel submitted that “the questions of goodwill and the loss of the ability to recruit new patients and build up their reputation, while they’re not required to compete with the departing doctor, all of those types of losses are very, very hard to quantify in damages.”[30]
  2. [114]
    As to the effect on patients, the applicant submits that none of the patients who provided affidavits or letters asserted that it had been impossible for them to be treated by another specialist.  The applicant pointed to evidence given by the second respondent about the abilities of other clinicians to provide IVF treatment to patients.  Although the evidence was given in the context of patients’ attitudes towards the temporary unavailability of the second respondent I regard the evidence as also being relevant to the matter of the availability of IVF specialists in Brisbane.  In this regard the second respondent deposed:[31]

“If a patient was unable to see the clinician they had previously been consulting with (assuming the clinician had prepared a treatment plan for the patient) then another clinician would be able to provide IVF treatment to that patient in accordance with that plan.  All clinicians who specialise in IVF are able to provide the services or perform the procedures required for an IVF cycle or fertility treatment, including the Exclusive Clinician Services.”

  1. [115]
    The applicant pointed to Mr Nathan’s evidence that as at May 2025 the following clinics in Brisbane had affiliations with IVF practitioners.  The Queensland Fertility Group websites for its three Brisbane clinics referred to there being four IVF and fertility specialists at its Everton Park clinic, ten IVF and fertility specialists at its Wharf Street clinic and six IVF and fertility specialists at its Spring Hill clinic.  However, some of those at the Spring Hill clinic worked at more than one Queensland Fertility Group clinic.  Eleven IVF and fertility specialists operated from the Monash Brisbane clinic.  Eight IVF and fertility specialists operated from the Eve Health clinic in Brisbane.  Four doctors provided IVF services for Care Fertility Brisbane.  Seven IVF fertility specialists operated from Life Fertility.  Two doctors provided IVF services for Genea in Brisbane and two doctors provided IVF facilities for Adora Fertility.
  2. [116]
    Weighing the disadvantage or hardship the applicant would suffer if an injunction is refused against the hardship or disadvantage that some of the second respondent’s patients may suffer if an injunction is granted I consider that injunctive relief should be granted.  Absent injunctive relief the applicant would suffer loss in circumstances where the loss of goodwill would be very difficult to quantify in terms of damages.  The applicant would confront difficulty proving any patients treated by the second respondent at Queensland Fertility Group would represent business that otherwise would have come to it had she remained with the applicant.  Damages are “rarely a sufficient remedy”[32] in restraint of trade cases.  Although patients of the second respondent will not be able to receive Exclusive Clinician Services from her prior to 17 March 2026 and although some of these patients are reluctant to or will decline to engage with other IVF specialists, the evidence does not establish that these patients will be deprived of the services of other IVF specialists if they seek such specialists out.

The form of orders

  1. [117]
    As reflected in these reasons, I intend to order:
  1. That an injunction be granted restraining the second respondent from doing any of the activities referred to in clauses 19.4 (a)(1)-(3) and 19.5(a) of the Clinician Services Contract for a period of 12 months from the date of termination of the contract.
  1. [118]
    Accordingly, the applicant is directed to bring in a minute of an order that reflects these reasons by 1.00 pm on 2 September 2025.
  2. [119]
    Upon the making of the order I will hear the parties as to costs.

Footnotes

[1]The claim for this declaration was not pressed at the trial, Transcript 7 May 2025 p 3-55 line 45.

[2]Transcript 8 May 2025 p 4-15 lines 34-36.

[3]Transcript 6 May 2025 p 2-67 lines 18-26 and Transcript 8 May 2025 p 4-11 line 35 – p 4-12 line 25.

[4]Sometime prior to 2023 Medicare ceased use of Item Number 13206.

[5]WorkPac Pty Ltd v Rossato (2020) 278 FCR 179 at [865].

[6](2015) 256 CLR 104 at [46]-[48].

[7]Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 at [42].

[8]Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570 at [35].

[9]Medicare ceased use of Item Number 13206 prior to 2023.

[10]Transcript 8 May 2025 page 4-11 lines 15-43.

[11](2020) 278 FCR 179 at [865].

[12]Transcript 7 May 2025 p 3-34 line 3 and transcript 8 May 2025 p 4-12 line 27 – 4-13 line 11.

[13]Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 at 413.

[14](2015) 329 ALR 1 at [827].

[15]Amended Points of defence para 28(b).

[16]Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582.

[17]Just Group Pty Ltd v Peck (2016) 344 ALR 162 at [30].

[18]Buckley v Tutty (1971) 125 CLR 353 at 376; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Pty Ltd (1973) 133 CLR 288 at 315.

[19]Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Pty Ltd (1973) 133 CLR 288 at 318.

[20]Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Pty Ltd (1973) 133 CLR 288 at 316; Ashcoast Pty Ltd v Whillans [2000] 2 Qd R 1 at 3.

[21][1972] 2 OR 451.

[22][2024] NSWSC 1651.

[23][2014] QSC 260 at [356].

[24]Kerr v Morris [1987] Ch 90 at 106-107 and 116; Orton v Melman [1981] 1 NSWLR 583 at 588; Vision Eye Institute Ltd & Anor v Kitchen & Anor [2014] QSC 260 at [357].

[25]Vision Eye Institute Ltd & Anor v Kitchen & Anor [2014] QSC 260 at [353]; Angel-Honnibal v Idameneo (No 123) Pty Ltd (2003) 59 IPR 184 at [27].

[26]Vision Eye Institute Ltd & Anor v Kitchen & Anor [2014] QSC 260 at [357].

[27]The letters were admitted for the truth of their contents pursuant to ss 83-85 of the Evidence Act 1977 (Qld).

[28](1998) 195 CLR 1.

[29]At [65].

[30]Transcript 27 May 2025 p 1-28, lines 27-30.

[31]Affidavit of Dr S Campbell (exhibit 2) affirmed on 30 April 2025.

[32]John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995 at [45]; also Emeco International Pty Ltd v O'Shea [2012] WASC 282 at [20].

Close

Editorial Notes

  • Published Case Name:

    City Fertility Sydney CBD Pty Ltd v Reims Investments Pty Ltd & Anor

  • Shortened Case Name:

    City Fertility Sydney CBD Pty Ltd v Reims Investments Pty Ltd

  • MNC:

    [2025] QSC 210

  • Court:

    QSC

  • Judge(s):

    Copley J

  • Date:

    28 Aug 2025

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570
2 citations
Jump To
Cite 1 - (2008) 238 CLR 570
Cite 2 - (2008) 238 CLR 570
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
2 citations
Jump To
Cite 1 - (1992) 175 CLR 564
Cite 2 - (1992) 175 CLR 564
Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288
4 citations
Jump To
Cite 1 - (1973) 133 CLR 288
Cite 2 - (1973) 133 CLR 288
Cite 3 - (1973) 133 CLR 288
Cite 4 - (1973) 133 CLR 288
Angel-Honnibal v Idameneo (No 123) Pty Ltd (2003) 59 IPR 184
2 citations
Jump To
Cite 1 - (2003) 59 IPR 184
Cite 2 - (2003) 59 IPR 184
Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219
2 citations
Jump To
Cite 1 - [2016] WASCA 219
Cite 2 - [2016] WASCA 219
Buckley & Ors v Tutty (1971) 125 CLR 353
2 citations
Jump To
Cite 1 - (1971) 125 CLR 353
Cite 2 - (1971) 125 CLR 353
Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404
2 citations
Jump To
Cite 1 - [1984] 1 Qd R 404
Cite 2 - [1984] 1 Qd R 404
Emeco International Pty Ltd v O'Shea [2012] WASC 282
2 citations
Jump To
Cite 1 - [2012] WASC 282
Cite 2 - [2012] WASC 282
Group Ltd v Peck (2016) 344 ALR 162
2 citations
Jump To
Cite 1 - (2016) 344 ALR 162
Cite 2 - (2016) 344 ALR 162
John Fairfax Publications Pty Ltd v Birt [2006] NSWSC 995
2 citations
Jump To
Cite 1 - [2006] NSWSC 995
Cite 2 - [2006] NSWSC 995
Kerr v Morris [1987] Ch 90
2 citations
Jump To
Cite 1 - [1987] Ch 90
Cite 2 - [1987] Ch 90
Mineralogy Pty Ltd v Sino Iron Pty Ltd (No. 6) [2015] 329 ALR 1
2 citations
Jump To
Cite 1 - [2015] 329 ALR 1
Cite 2 - [2015] 329 ALR 1
Monash IVF Pty Ltd v Mooring [2024] NSWSC 1651
2 citations
Jump To
Cite 1 - [2024] NSWSC 1651
Cite 2 - [2024] NSWSC 1651
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
2 citations
Jump To
Cite 1 - (2015) 256 CLR 104
Cite 2 - (2015) 256 CLR 104
Orton v Melman [1981] 1 NSWLR 583
2 citations
Jump To
Cite 1 - [1981] 1 NSWLR 583
Cite 2 - [1981] 1 NSWLR 583
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1
2 citations
Jump To
Cite 1 - (1998) 195 CLR 1
Cite 2 - (1998) 195 CLR 1
Sherk v Horwitz [1972] 2 OR 451
2 citations
Jump To
Cite 1 - [1972] 2 OR 451
Cite 2 - [1972] 2 OR 451
Vision Eye Institute Ltd v Kitchen [2014] QSC 260
5 citations
Jump To
Cite 1 - [2014] QSC 260
Cite 2 - [2014] QSC 260
Cite 3 - [2014] QSC 260
Cite 4 - [2014] QSC 260
Cite 5 - [2014] QSC 260
Whillans v Ashcoast Pty. Ltd.[2000] 2 Qd R 1; [1998] QCA 34
2 citations
Jump To
Cite 1 - [2000] 2 Qd R 1
Cite 2 - [2000] 2 Qd R 1
WorkPac Pty Ltd v Rossato (2020) 278 FCR 179
3 citations
Jump To
Cite 1 - (2020) 278 FCR 179
Cite 2 - (2020) 278 FCR 179
Cite 3 - (2020) 278 FCR 179

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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