FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Ramsay Health Care Australia Pty Limited [2020] FCA 308 File number: NSD 628 of 2017 Judge: GRIFFITHS J Date of judgment: 12 March 2020 Catchwords: COMPETITION – proposal to establish rival day surgery to existing day surgery and private hospital in Coffs Harbour – alleged misuse of market power and exclusive dealing in contravention of ss 46 and 47 respectively of the Competition and Consumer Act 2010 (Cth) – failure to establish to the requisite standard that the pleaded conduct, which related to certain conversations, involved contravening conduct EVIDENCE – application under ss 135 and 136 of the Evidence Act 1995 (Cth) to exclude or restrict parts of evidence given prior to retrieval of a sound recording – unfair prejudice not established in circumstances where relevant witnesses could be recalled and cross-examined on the basis of the sound recording Legislation: Competition and Consumer Act 2010 (Cth), ss 46, 47 Evidence Act 1995 (Cth), ss 135, 136, 140 Cases cited: ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1991) 27 FCR 460 Australian Competition and Consumer Commission v Air New Zealand Limited (No 10) [2013] FCA 322 Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 2) [2018] FCA 1459 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [2003] FCAFC 149; 129 FCR 339 Australian Competition and Consumer Commission v Boral Ltd [1999] FCA 1318; 166 ALR 410 Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2013] FCA 909; 310 ALR 165 Australian Competition and Consumer Commission v Flight Centre Travel Group Limited [2016] HCA 49; 261 CLR 203 Australian Competition and Consumer Commission v Little Company of Mary Health Care Limited [2015] FCA 1144 Australian Competition and Consumer Commission v Pfizer Australia Pty Limited [2018] FCAFC 78; 356 ALR 582 Boral Besser Masonry v Australian Competition and Consumer Commission [2003] HCA 5; 215 CLR 374 Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 64 FLR 238 Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 Eastern Express Pty Limited v General Newspapers Pty Limited (1992) 35 FCR 43 Jones v Dunkel [1959] HCA 8; 101 CLR 298 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361 Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [2001] HCA 13; 205 CLR 1 Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; 122 FCR 110 News Ltd v South Sydney District Rugby League Football Club Ltd [2003] HCA 45;215 CLR 563 NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 98; 219 CLR 90 Papakosmas v The Queen [1999] HCA 37; 196 CLR 297 Queensland Wire Industries Pty Limited v Broken Hill Pty Co Ltd [1989] HCA 6; 167 CLR 177 Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; 216 CLR 53 Seven Network Ltd v News Limited (No 8) [2005] FCA 1348; 224 ALR 317 Seven Network Ltd v News Ltd (2009) [2009] FCAFC 166; 182 FCR 160 Stirling Harbour Services Pty Ltd v Bunbury Port Authority [2000] FCA 1381; ATPR 41-783 SWB Family Credit Union Ltd v Parramatta Tourist Services Pty Ltd [1980] FCA 125; 48 FLR 445 Universal Music Australia Pty Ltd v ACCC [2003] FCAFC 193; 131 FCR 529 Watson v Foxman (1995) 49 NSWLR 315 Dates of hearing: 25, 26, 27 and 28 February 2019; 1, 4, 5, 6, 7, 11, 12, 13, and 14 March 2019; 2, 3, 4, 5, 6, 9, 10 and 12 December 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Economic Regulator, Competition and Access Category: Catchwords Number of paragraphs: 442 Counsel for the Applicant: N Hutley SC, R C A Higgins SC, with A d'Arville Solicitor for the Applicant: Baker & McKenzie Counsel for the Respondent: A J L Bannon SC, J R J Lockhart SC with I C Colquhoun Solicitor for the Respondent: Johnson Winter & Slattery ORDERS NSD 628 of 2017 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: RAMSAY HEALTH CARE AUSTRALIA PTY LIMITED (ACN 003 284 889) Respondent JUDGE: GRIFFITHS J DATE OF ORDER: 12 MARCH 2020 THE COURT ORDERS THAT: 1. The further amended originating application be dismissed. 2. Within 21 days hereof, the parties should seek to agree orders as to costs. If they are unable to reach agreement, within that period each should file and serve an outline of submissions not exceeding 10 pages in length, and any supporting affidavits, regarding their individual position on costs. 3. The Court will indicate in due course whether the issue of costs will be determined on the papers and without a further oral hearing. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT part a – introductIon [1] (a) The ACCC's case in broad outline [1] (b) Some unusual aspects of the proceeding [13] part b – SOME bACKGROUND MATTERs summarised [19] (a) Broad outline of Ramsay's operations [19] (b) Dramatis personae [42] (c) Plans for a new day surgery in Coffs Harbour [52] part c – outline of key issues [70] part d – findings on the primary factual issues concerning the pleaded CONTRAVENING CONDUCT [80] (A) The ACCC's case concerning the contravening conversations [80] (B) The four conversations said to involve contravening conduct [85] (a) Dr Joshi's conversation with Mrs Ruthnam on 25 August 2015 [86] (i) Dr Joshi's evidence summarised [88] (ii) Mrs Ruthnam's evidence summarised [109] (iii) Mrs Ruthnam's evidence is preferred [135] (i) Conclusion [153] (b) Conversation between Dr Sutherland and Mrs Ruthnam on 28 August 2015 [154] Conclusion [178] (c) Conversation between Dr Joshi and Mr Sims on 3 September 2015 [179] Conclusion [188] (d) Conversation between Dr Summersell and Mrs Ruthnam on 8 September 2015 [189] Conclusion [205] (C) Other conversations with surgeons not said to involve contravening conduct [206] (a) Conversation between Dr Sutherland and Mrs Ruthnam on 10 September 2015 [208] Conclusion [216] (b) Conversation between Dr Joshi and Mrs Ruthnam on 15 February 2016 [217] Conclusion [223] (c) Conversation between Dr Summersell and Mrs Ruthnam on 8 March 2016 [224] Conclusion [229] (d) Mrs Ruthnam's meeting with Dr Lim on 16 June 2015 [230] Conclusion [240] (e) Conversation between Dr Ross and Mrs Ruthnam on 31 August 2015 [241] Conclusion [254] (f) Conversation between Dr Roussos and Mrs Ruthnam on 1 September 2015 [255] Conclusion [261] (g) Dr Edmund Wong She [262] (h) Conclusion regarding alleged contravening conversations [264] Part E – DR SUTHERLAND'S SOUND RECORDING and ramsay's interlocutory application [265] (a) Retrieval of the sound recording [267] (b) Ramsay's application under ss 135 and 136 of the Evidence Act [272] (i) Introduction [272] (ii) Dr Sutherland recalled (12 March 2019) [277] (iii) Consideration and determination of Ramsay's interlocutory application [281] Part F – misuse of market power [316] (a) Statutory provisions as in force at the relevant time [317] (b) Elements of s 46 contravention [318] (c) The relevant market [319] (i) Some relevant legal principles on market definition [320] (ii) The appropriate market definition – issues in dispute [329] (iii) To whom are services provided? [339] (iv) The product that is provided by Ramsay [353] (v) Are there separate markets for "operating theatre services" and "post-operative care"? [359] (vi) Private patients in public hospitals [362] (vii) An evidentiary ruling [369] (viii) Conclusion in respect of market definition [371] (d) Did Ramsay have substantial market power? [372] (i) Substantial market power: some applicable principles summarised [373] (ii) Ramsay's substantial market power [376] (iii) Was Ramsay's conduct for a proscribed purpose? [388] (e) Did Ramsay take advantage of substantial market power? [391] (i) Scenario one [398] (ii) Scenario two [399] (iii) Scenario three [403] (iv) Did Ramsay have a legitimate business rationale for the alleged contravening conduct? [405] (f) Conclusions on misuse of market power [418] part G – EXCLUSIVE DEALING [419] (a) Statutory provisions as in force at the relevant time [419] (b) Elements of s 47 contravention [420] (i) Need for supply or offer to supply on condition [421] (ii) Did Ramsay's conduct have the purpose or likely effect of substantially lessening competition? [426] (A) Ramsay's purpose [428] (B) Likely effect of Ramsay's conduct [432] (c) Conclusions on exclusive dealing [437] part H – CONCLUSIONS [440] GRIFFITHS J: part a – introductIon (a) The ACCC's case in broad outline 1 The applicant (ACCC) alleges that the respondent (Ramsay) has contravened ss 46 and 47 of the Competition and Consumer Act 2010 (Cth) (CC Act). The alleged contraventions arise from four pleaded conversations which the ACCC says representatives of Ramsay had with three individual surgeons (Dr Neil Joshi, Dr Andrew Sutherland and Dr Peter Summersell) in mid-2015 when some surgeons were planning to establish a new day surgery in Coffs Harbour, in potential competition with Ramsay's then existing day surgery and separate private hospital in Coffs Harbour. 2 It will be necessary to elaborate further below on the key elements of the case as pleaded by the ACCC. At this introductory point, it is sufficient to emphasise the following features. First, the pleaded case is based on four separate conversations in August and September 2015 in which it is alleged that three individual surgeons were told certain things by senior officers of Ramsay as to the consequences for the surgeons if they were to carry out some or all of their day surgery procedures at the proposed new day surgery. The ACCC alleges that these conversations conveyed to those surgeons that their access to operating theatre time at Ramsay's private hospital in Coffs Harbour (Baringa) for the purpose of in-patient surgery procedures (which normally involve overnight stays) "would be substantially reduced or entirely withdrawn". 3 Secondly, the ACCC's case is that it was the same message that was conveyed to each of the three surgeons even though there may have been differences in the particular words which were used. 4 Thirdly, it is important to emphasise at the outset the fact that the pleaded conduct involves words which the ACCC claims were to a particular effect, as opposed to non-verbal conduct. This has particular implications for the burden of proof carried by the ACCC, especially bearing in mind the gravity of the allegations against Ramsay and the implications that has for that burden (see s 140 of the Evidence Act 1995 (Cth) (Evidence Act). It also highlights the difficulty which confronts the ACCC in making good its claims, which substantially depend upon oral conversations and where witnesses have given evidence of their best recollections of the words which were used some time after the conversations took place. There are, however, some relevant and relatively contemporaneous documents which relate to some of the conversations. 5 As Ramsay pointed out, the evidentiary difficulties are compounded by the possibility of there being "a finely nuanced linguistic distinction between a surgeon being told that their access to Ramsay's major operating theatres may change, and a surgeon being told that their access to operating theatre time for the purposes of in-patient surgery procedures would be substantially reduced or entirely withdrawn". 6 The evidentiary difficulties which can arise in a case which substantially turns on the Court making findings of fact in relation to what most probably was said in a conversation are well described by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 (emphasis added): Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not … attained or established independently of the nature and consequence of the fact or facts to be proved' including the 'seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding" … Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration ... 7 Fourthly, an unusual feature of this proceeding is that in the case of one of those conversations (the conversation which took place between Mrs Elizabeth Ruthnam, the CEO of Baringa and Dr Andrew Sutherland), it unexpectedly emerged during the course of the proceeding that there was a verbatim sound recording of their conversation. 8 Fifthly, Ramsay submitted that the case as pleaded against it is to the effect that, notwithstanding the four relevant and central conversations pleaded by the ACCC, Ramsay's alleged contravention of the CC Act involved a single course of conduct. In response, the ACCC submitted that insofar as the factual elements of its case were concerned, it was sufficient for it to persuade the Court that at least one of the pleaded conversations occurred. I have proceeded on that basis. 9 Sixthly, Ramsay raised various complaints relating to the ACCC's own conduct in the course of the proceedings. In brief, Ramsay raised the following two matters concerning the ACCC's conduct: (a) its failure to take appropriate steps to preserve and recover recordings of two of the pleaded conversations which recordings were made by two of the surgeons involved in those conversations; and (b) the ACCC's failure to disclose earlier than it did to Ramsay that it intended to deploy the recordings of the two conversations against Ramsay. 10 I will address these matters in the section of these reasons where I explain why I dismissed Ramsay's interlocutory application seeking orders under ss 135 and 136 of the Evidence Act (Pt E). 11 Seventhly, it should be noted that the trial related only to issues of liability, which the parties agreed should be heard and determined separately from any issue of relief in the event that liability is established. 12 As mentioned, those matters will be further elaborated upon below. (b) Some unusual aspects of the proceeding 13 It is desirable at this point to mention the significance of some unusual aspects of the case. One relates to the fact that two of the surgeons whom the ACCC alleges had conversations with Ramsay's representatives, during which alleged threats were made along the lines of the pleaded conversations, had surreptitiously made sound recordings of the conversations in which each was involved. Dr Joshi made a sound recording of a conversation he had with Ramsay's CEO (Mr Danny Sim) on 3 September 2015. It will be necessary to assess the significance of this conduct and any implications it has for Dr Joshi's credibility, as well as assess the significance of the fact that the recording was inadvertently deleted by Dr Joshi and was not available as evidence in the proceeding. 14 The second sound recording, which was referred to above, is one which was surreptitiously made by Dr Andrew Sutherland of the conversation he had with Mrs Ruthnam on 28 August 2015. Dr Sutherland subsequently prepared a file note based upon this sound recording, which file note was used by him in preparing his affidavit upon which the ACCC relied. It is also plain that the ACCC used the file note in drafting [108] of the Further Amended Statement of Claim (FASOC). Ramsay is highly critical of the ACCC's actions or inactions in respect of that sound recording and the related file note. When Dr Sutherland initially gave evidence in the proceeding, it is evident that he sincerely believed that the sound recording had been deleted from his smartphone. During the course of the hearing, and after Dr Joshi and other surgeons, including Dr Peter Summersell, had given evidence of their recollections of separate conversations they had had with Ramsay's representatives, a copy of Dr Sutherland's sound recording was retrieved and a full transcription was then put into evidence. 15 It goes without saying that this was important evidence because it necessarily established precisely what was said in one of the central pleaded conversations relied upon by the ACCC. It will be necessary to describe in greater detail the significance and implications of the belated production of the sound recording. These matters were raised by Ramsay in the interlocutory application referred to at [10] above, which sought to have the three relevant surgeons' evidence either excluded or restricted because it was given before discovery of the fact that the sound recording had not been deleted as previously thought. 16 When it emerged during the course of Dr Sutherland's cross-examination that the sound recording still existed and could be retrieved, various surgeons, including Dr Joshi and Dr Summersell, had already given their evidence. Ramsay complained that it was strongly prejudiced by the fact that it had cross-examined the three relevant surgeons without knowing the fact that the sound recording still existed, nor what it contained. This issue occupied a not insignificant amount of time in the course of the proceeding. As more fully detailed in Pt E of these reasons for judgment, the Court ruled that the prejudice could satisfactorily be addressed by having the three witnesses recalled to be further cross-examined in the light of the contents of the sound recording. This necessitated the hearing being adjourned. The adjournment was for an unfortunately long period of ten months to accommodate the availability of senior counsel of both parties. 17 Another unusual aspect of the proceeding is the fact that it emerged during the course of the cross-examination of two surgeons, namely Dr Liam Lim and Dr Joshi, that there had been collaboration in redacting certain parts of WhatsApp messages concerning the proposed new day surgery and which were required to be produced on subpoenas issued by Ramsay. These actions had potential adverse implications for those witnesses' credibility. 18 A final introductory observation should be made in relation to how the trial was conducted. Given that the pleaded conversations were at the heart of the ACCC's case, the Court ordered that evidence from any witness relating to those conversations had to be given orally and not in affidavit form (the parties were required, however, to provide proofs of evidence from any witness who would give evidence relating to any of the conversations). part b – SOME bACKGROUND MATTERs summarised (a) Broad outline of Ramsay's operations 19 Ramsay operates 66 hospitals, as well as 5 day surgeries and one free-standing chemotherapy treatment centre in Australia. One of those private hospitals is the Baringa private hospital in Coffs Harbour. As previously mentioned, Mrs Ruthnam is the CEO of Baringa and held that position at all relevant times. Baringa is licensed under the Private Health Facilities Act 2007 (NSW). At the relevant times it had 81 beds and 242 staff members, of whom 218 were nursing staff. It was licensed to provide a wide list of medical services, namely anaesthesia, chemotherapy, gastrointestinal, endoscopy, medical, mental health, paediatric, rehabilitation and surgical. 20 In 2015 and 2016, Baringa had three operating theatres and an endoscopy theatre. A fourth operating theatre became operational in January 2017. Both in-patient and day surgery were conducted at Baringa. A Day Surgical Unit was commissioned there in 2010. 21 In 2015, Ramsay also operated the Coffs Harbour Day Surgical Centre (CHDS). It had one operating theatre but it was licensed to provide only ophthalmic and plastic surgery. It had no licensed beds but was licensed to provide four recovery chairs. It employed 15 staff members, 10 of whom were nursing staff. It closed in or around 2017. As its name suggests, the CHDS did not provide over-night accommodation for patients. 22 At all relevant times, the only other hospital in Coffs Harbour was the Coffs Harbour Health Campus (CHHC), which provided both day and in-patient surgery services. It had 292 beds, 4 operating theatres, a procedure room, an emergency department and an intensive care unit (ICU). As will emerge, there were other hospitals in the region, all of which were public hospitals. There were no other private hospitals or day surgeries within 1.5-2 hours' drive from Coffs Harbour. 23 It is appropriate to say something now regarding the distinction between public and private patients. Public patients are those whose costs for a surgical procedure and related medical services are provided by the State and are generally free of charge to the patient. Public patients either do not have private health insurance or, if they do, they are unwilling to use that insurance or pay for the procedure themselves. In contrast, private patients have their medical fees paid by a private health insurer or some other third party, such as the Department of Veterans' Affairs. Some private patients pay their own medical fees from their own resources and are referred to as "self-funding" patients. Both Baringa and CHDS only provided services in respect of private patients. Private patients could also be admitted to public hospitals, including CHHC. Ramsay provided various services to patients who were admitted at Baringa or CHDS, including admission, clinical care, provision of medical consumables, medical record management and access to Ramsay's operating theatres. As noted, in the case of Baringa, the services also included over-night accommodation and ancillary services. 24 The operating theatre staff provided by Ramsay at Baringa included a scrub nurse, a scout nurse and an anaesthetic nurse. Ancillary services included the provision of a central sterile services department, a management structure, orderlies, reception staff, recovery staff and the operating theatre staff. 25 As will emerge, there could be different waiting times depending on whether a patient wished to have a procedure conducted at the CHHC or at either Baringa or CHDS. 26 It is convenient to say something about the utilisation of operating theatre time because it lies at the heart of the proceeding. The utilisation of operating theatres at Baringa and CHDS is important to the financial performance of the facility. This is mainly because if an operating theatre is not being fully utilised, other costs continue to be incurred and this has significant financial implications for Ramsay. 27 Mrs Ruthnam, as CEO of Baringa, was responsible for monitoring and managing operating theatre utilisation by individual surgeons who operated at Baringa. As will further be explained, this included a six-monthly review by Mrs Ruthnam of current and historical theatre utilisation data based upon information stored in Ramsay's IT system (Meditech). 28 Another factor contributing to Ramsay's profitability is the type of procedure carried out at Baringa and CHDS. That is because some procedures, particularly high turnover day procedures, are generally more profitable than others. In simple terms, some major surgery which requires over-night accommodation is less profitable than high turnover day procedures. As will emerge, however, the issue is more complex than that general summary may indicate. 29 It is desirable to now say something more concerning Ramsay's relationship with surgeons who operated at either Baringa or CHDS. Surgeons who use or access Ramsay's facilities must be accredited by Ramsay. During the relevant times, the process of accreditation was governed by Ramsay's facility rules dated 22 March 2011 (Facility Rules). The Facility Rules, which also contained provisions relating to the general operation of a Ramsay facility, also applied to the CHDS when it was operational. 30 To become accredited, a medical practitioner had to complete an accreditation application which was then submitted to Mrs Ruthnam. Any medical practitioner seeking accreditation had to agree to be bound by the Facility Rules and the relevant facility's policies. 31 In 2015 and 2016, Baringa and CHDS had approximately 133 accredited medical practitioners, 42 of whom were accredited surgeons. 32 Operating theatre times or sessions were generally allocated by Mrs Ruthnam on a half-day basis. The general practice was that only one surgeon would use each allocated list. As noted above, Ramsay's objective was to ensure a full allocation of sessions or lists and for those sessions and lists to be fully utilised. As mentioned, a six monthly review was conducted by Mrs Ruthnam of theatre list allocations. If a surgeon did not fully utilise his or her lists, there was a risk that their theatre list allocation may be reduced or varied. 33 Generally speaking, where a patient needs to stay overnight (as is normally the case with major surgery), surgeons prefer to be allocated lists or sessions earlier in the week. That is because it is less likely that the treating surgeon will be required to attend upon patients over the weekend. Another relevant consideration in the allocation of theatre lists is the need to avoid a conflict between theatre lists which a particular surgeon might have at various other facilities, including at the CHHC in Coffs Harbour. For completeness, it might also be noted that there was some capacity to allocate an ad hoc theatre list to any individual surgeon upon request. This could occur, for example, when another surgeon with a regular list is on leave or is unable to fill his or her lists, in which case another particular surgeon might seek an ad hoc theatre list at a preferred time, usually earlier in the week, even if that might involve cancelling the particular surgeon's allocated theatre list later in the week. 34 Ramsay submitted that it is the case that some surgeons think that they "own" particular operating lists at Baringa or CHDS, so as to give rise to a belief on the surgeon's part that they own the particular list. I will return to deal with Mrs Ruthnam's evidence on this matter. I will also deal with her evidence regarding the different relationship she had with individual surgeons, depending in part upon her assessment of the contribution the surgeon made to the financial success of either Baringa or CHDS. 35 It is convenient to note at this point that occasions may arise where Ramsay needs to take active steps to entice or encourage surgeons in particular fields to work in Coffs Harbour. That is where, for example, there is an unmet demand for a surgeon in a particular specialist field. One of the methods which Ramsay uses to entice surgeons to come to Coffs Harbour is to grant them access to regular and attractive operating theatre lists at either Baringa or CHDS (when it was operating). 36 I shall now briefly describe the arrangements for admitting and treating patients at Baringa and CHDS. As mentioned, most patients who were admitted at Baringa or CHDS, were either privately insured, self-funded or had the costs of their treatment paid by a third party, such as the Department of Veterans' Affairs. Ramsay obtains payment for services provided to private patients by issuing an invoice to the private health fund or to the patient directly in the case of a self-funded patient or to the third party provider. Private patients may be charged an excess fee in some circumstances. 37 The rates Ramsay receives from private health funds are negotiated by Ramsay and apply at a national level. 38 Separate invoices are issued to private patients at Baringa or CHDS by the surgeon who provided the particular surgical service. This can involve the surgeon charging additional "out of pocket" costs to the patient which are in addition to the amount contributed either by Medicare or the private patient's insurer. 39 From around March 2013, it was possible for public patients to be admitted at Baringa under a Surgical Services Agreement which was struck between Baringa and the Mid North Coast Local Health District. 40 It will be necessary to say something further later regarding the differences between the admission and treatment of private patients at Baringa or CHDS and at CHHC. Generally speaking, private patients in public hospitals get their choice of doctor, access to a single room where one is available, as well as other amenities. The evidence indicates that some public hospitals, including the CHHC, have been given revenue targets set by the NSW Department of Health which encouraged them to admit private patients. The evidence also indicates that where CHHC admits private patients this generates a higher margin than admitting public patients and helps the CHHC meet the revenue targets set by NSW Health. 41 As already noted, waiting times for private patients in public hospitals are generally shorter than is the case for public patients. I will say something further regarding waiting times later in these reasons for judgment. (b) Dramatis personae 42 Before descending into greater detail, it is desirable to describe the primary relevant persons in the proceeding. 43 At all relevant times, the key Ramsay personnel were as follows. As previously mentioned, Mrs Ruthnam was CEO of Baringa. She reported to Mr Malcolm Passmore, who was the Operations Executive Manager – NSW Regional Hospitals for Ramsay. In turn, Mr Passmore reported to Mr Danny Sims, the CEO of Ramsay's Australian operations. 44 Mr Michael Gray was the Commercial Manager – Coffs Harbour for Ramsay. He worked at Baringa. He was responsible for compiling the data from Meditech which he provided to Mrs Ruthnam to assist her in her half-yearly reviews of theatre list allocations for accredited surgeons who used operating theatres at Baringa. 45 Each of Mrs Ruthnam, Mr Sims and Mr Gray gave evidence and was cross-examined. Mr Passmore was scheduled to give evidence but in the events that occurred he was not called by Ramsay. As will emerge, the ACCC submits that this has evidentiary implications. 46 Ramsay called Mr Gregory Houston as an expert economics witness. He gave evidence concurrently with the ACCC's expert economic witness, Dr Geoffrey Edwards. 47 Ramsay also relied upon affidavits by Ms Lynne-Marree Edgerton and Mr Benjamin Avery, neither of whom was required for cross-examination. Ramsay also relied upon an affidavit by Dr Harvey Ward, an obstetrician and gynaecologist based in Coffs Harbour. 48 Turning now to the ACCC's witnesses, the following three surgeons were called as primary witnesses as each was involved in at least one of the four conversations which the ACCC claims gave rise to contravening conduct: (a) Dr Joshi (a urologist); (b) Dr Sutherland (a colorectal surgeon); and (c) Dr Summersell (an orthopaedic surgeon). Each had allocated lists at Baringa and CHDS during the relevant times, as well as having allocated lists at CHHC. 49 The ACCC relied upon evidence from other individual doctors notwithstanding that they were not directly involved in the pleaded contravening conduct, namely Dr Liam Lim (an ophthalmologist), Dr William Ross (a general surgeon), Dr David Ellis (a general practitioner), Dr Edmund Wong She (a general practitioner) and Dr Emmanouel Roussos (a general surgeon). Although neither was called as a witness there are also some references in the evidence to the wives of Dr Lim and Dr Joshi respectively, who are Dr Nani Kuswanto and Dr Devina Joshi. 50 The ACCC called two industry experts, namely Dr John O'Donnell and Ms Ann McHardy, as well as an economic expert, Dr Geoffrey Edwards. Both Dr O'Donnell and Ms McHardy were cross-examined. As noted above, Dr Edwards gave evidence concurrently with Mr Houston. 51 The ACCC also relied upon an affidavit by Mr Allan Went, Acting Executive Director, Health System Information & Performance Reporting Branch of the NSW Department of Health. He was not required for cross-examination. (c) Plans for a new day surgery in Coffs Harbour 52 From late 2014, a group of surgeons who had allocated operating theatre lists at Baringa commenced planning the development of a day surgery that would compete with Ramsay in Coffs Harbour. Initially, Dr Lim and Dr Joshi were the driving forces behind the proposal. Later, Dr Sutherland also became actively involved in the discussions concerning the creation of the new day surgery. These surgeons planned to create a day surgery with two operating theatres that would perform a range of speciality day surgery procedures, including ophthalmic surgery, urology procedures and endoscopies. It was not proposed that the day surgery would provide procedures which required a patient to stay overnight. 53 In or around April 2015, Mrs Ruthnam heard about the acquisition of land in Hall Road, Coffs Harbour for the purpose of building a new day surgery. The land had been purchased in March 2015 by an entity associated with Dr Joshi, Dr Lim and their respective wives. Dr Joshi and Dr Lim sought to identify other "high volume day case" surgeons, such as Dr Sutherland, Dr Ross and Dr Roussos, who might be enticed to either use the proposed new day surgery and/or possibly take up a financial interest in it. As will emerge, some of the surgeons involved in the proposal took advantage of their association with Baringa and CHDS to gather confidential information about Ramsay's operations which they thought might be helpful in developing their own day surgery. For example, on 27 May 2015, Dr Sutherland sent the following email to Dr Lim and Dr Joshi: I was scoping at baringa today and confirmed that they have 3 colonoscopes and 3 gastroscopes. Ideally they would have 4 colonoscopes in case something breaks during a list but we could start with 3 and 2. The steris machines cost about $30,000 each and we would need 2. I also looked at the record of procedures. For may the numbers were (include bookings for thurs/fri this week) Ross 81 Me 79 Wenman 38 Ramsay 24 Roussos 9 Kalmar 4 warrier 5 Abraham- not sure If there are 250 per month in private and a full day is 15-20 patients then it will be at best about 14-16 full days of scopes per month. I would expect, and support, Baringa doing 4-6 of those days which would leave 2-3 days of scopes per week at the day surgery. I think warrier was away but as far as i know none of the others were away in may. It gives an idea of numbers that we could expect. Also that Roussos would not expect to have a day of scopes everyweek - he did 2 lists in 4 weeks 6 and 3 patients 54 Dr Lim also engaged in conduct which saw him take advantage of his association with Baringa to obtain information which might assist in establishing the new day surgery. This included exploring with CHDS staff members their interest in being employed at the proposed new day surgery, asking all CHDS staff members about how particular equipment worked, taking photographs of the central sterilisation department at CHDS and asking CHDS about the dimensions of the central sterilisation department. This conduct caused Mrs Ruthnam to meet with Dr Lim on 16 June 2015 in which she asked whether Dr Lim was involved in developing a rival day surgery in Coffs Harbour. Dr Lim initially denied any such involvement, but then told Mrs Ruthnam that the new day surgery was to be in Grafton and that there would not be a day surgery in Coffs Harbour until after Mrs Ruthnam had retired. They then discussed whether Ramsay would spend $300,000 on equipment which Dr Lim had been trialling as a vitreoretinal surgeon, to which Mrs Ruthnam said she was not in a position to spend that amount of money on a machine that would be used only once a week. At this point Dr Lim threatened to speak to the ACCC about her lack of enthusiasm about purchasing the equipment. 55 I accept the accuracy of the contents of the email which Mrs Ruthnam sent to Mr Passmore on 17 June 2015 shortly after her meeting with Dr Lim: Had a meeting with Dr Lim and we discussed his conduct at CHDS (offering jobs; requesting information; taking photographs). He says there is to be a new day surgery in Grafton and that was all he was referring to. When questioned about his plans in Coffs he became very defensive, offensive and completely denied any involvement. He did say when ruffled at one point that there may be plans for next year or the year after in Coffs but he later denied that too. He is very cross indeed that we are not going to purchase new vitreoretinal equipment or allow him to purchase it for use at CHDS and threatened to inform the ACCC. I did very gently but firmly inform his (sic) that all Ramsay hospital executives are very well aware of all legislation surrounding the ACCC and we always work within this. He is very cross and will start causing all sorts of trouble I'm sure. 56 In cross-examination, Dr Lim accepted that he had misled Mrs Ruthnam by denying any involvement in the new day surgery and by denying that he had taken photographs of Ramsay's equipment and facilities. He also acknowledged that he sent an email to Mrs Ruthnam the day after their meeting in which he said that Ramsay was "truly jumping at shadows" and that while he was not saying that there will never be another day surgery in Coffs Harbour "there's nothing in the works at the moment". That was palpably false. 57 When Mrs Ruthnam heard about the rival day surgery proposal, she raised it with Mr Passmore. She tried to gather more information about who was involved in the proposal and what it entailed. 58 The ACCC alleged that Mr Passmore and Mrs Ruthnam then devised a "strategy" in response to the proposed competing day surgery. It relied upon a file note prepared by Mr Passmore of a meeting he had with Mrs Ruthnam on 5 May 2015. The file note included the following information: Divide + Conquer → Urology + Vascular 2 Singh + Lim will keep going. 59 The ACCC submitted that the obvious meaning of this file note is that Mr Passmore and Mrs Ruthnam planned to target two surgeons, namely Dr Tawadrous and Dr Joshi, in some way, in order to "divide and conquer". It submitted that it is evident that Mr Passmore also thought that Dr Singh and Dr Lim would "keep going" because they were ophthalmologists, with the consequence that if they built and were involved in the new day surgery, they would not need either of Ramsay's facilities any longer. 60 The ACCC placed heavy reliance upon another file note of Mr Passmore of a meeting he had with Mrs Ruthnam on 4 June 2015. That file note includes the following statements: Can we initiate the Hurstville/St George strategy → Urologist + Vascular → Out of Baringa ? Remove Lim from CHDS Actions to be taken - Meet with Danny + Katrina - ? OT in Baringa Centre. 61 The ACCC submitted, and I accept, that the reference in the file note to the "Hurstville/St George Strategy" is most probably a reference to the events which occurred in 2007 when various surgeons who carried out procedures at a Ramsay hospital in Sydney (St George Private) purchased a nearby hospital (Hurstville Community Hospital). In response, Ramsay removed those surgeons' access to lists at St George Private. 62 The ACCC submitted that the Court should find that Mr Passmore and Mrs Ruthnam planned a similar strategy in Coffs Harbour and that, in particular, they planned a strategy to target urology and vascular surgeons, who both required access to Baringa's in-patient facilities, and remove their access to Baringa. The ACCC submitted that this is reflected in the reference in the note to what the ACCC described as "Out of Baringa". 63 The ACCC further submitted that the strategy which was agreed between Mr Passmore and Mrs Ruthnam was implemented by around 19 August 2015. The ACCC relied on an email from Mrs Ruthnam to Mr Passmore on 19 August 2015, in which she said: I was hoping we could have a chat tomorrow. There is more buzz around the place about our competitor and I feel now is the time to visit some doctors. I would like an idea on what scale Ramsay Health Care would respond to such a threat. We discussed many strategies the strongest of which was to warn doctors that we may not be willing to support their major surgery if their day surgery was to go off site. The current contenders are Dr Joshi (urology), Dr Lim (ophthalmologist) and Dr Andrew Sutherland who is our colorectal surgeon. I believe we may have an opportunity to dissuade Dr Sutherland but I need to be able to explain the consequences of his current decisions on his future practice. Would appreciate some guidance in this. 64 I will explain below why I do not accept some of the ACCC's claims and its characterisation of what it described as Ramsay's strategy in respect of the proposed new day surgery. 65 Returning now to summarise the plans for the new day surgery, Dr Joshi and Dr Lim discussed the matter with an architect and various healthcare providers. The land which was purchased in March 2015 was selected by Dr Joshi and Dr Lim because they considered that they had received sufficient responses from other surgeons so as to encourage them to proceed with their plans for a new day surgery. Between April 2015 and August 2015, Dr Lim and Dr Joshi (and their respective wives who are also medical practitioners) worked with an architect to prepare plans for the new day surgery. In around June 2015, they also engaged Leith MacMillan, a day surgery consultant, to advise them on the plans. 66 By around mid-August 2015, Dr Lim, Dr Joshi and Dr Sutherland formed the view that there would be sufficient demand in Coffs Harbour to support a new day surgery. In July 2015, a company was established which would operate the day surgery (Coffs Coast Day Hospital Pty Ltd), with Dr Lim, Dr Joshi and Dr Sutherland as directors and one-third owners of the company. 67 By around August 2015, the three proponents considered that preparations for establishing the day surgery were "progressing well" and that some remaining tasks, such as obtaining regulatory approval and financing for construction were "surmountable hurdles". 68 In the proceeding, Ramsay submitted that the rival day surgery proposal was relatively undeveloped and was unlikely ever to be viable. Settlement of the land purchase at Halls Road did not occur until late September 2015. Ramsay also emphasised that, by August 2015, no design for the facility had been finalised, nor had a development application been submitted. While acknowledging the retention of Leith MacMillan, Ramsay emphasised that the proponents did not implement the recommendation that they undertake an extensive feasibility study. In particular, it draw attention to the fact that Dr Joshi considered that a feasibility study may not be required. Moreover, on 16 August 2015, Dr Sutherland commented that he had not seen a business plan to know at what point the proposed day surgery "would break even". 69 Another matter to which Ramsay drew attention as indicating that the plans for a new day surgery were relatively undeveloped is that the proponents made no inquiries with health funds about applicable rates even though they had been told by their architect that health funds were apparently resisting those types of development at that time. part c – outline of key issues 70 I accept the ACCC's submission that the primary factual issue in the proceedings is what was said (in the sense as pleaded of "words to the effect") by Mrs Ruthnam and Mr Sims to the three relevant surgeons (i.e. Dr Joshi, Dr Sutherland and Dr Summersell), in response to information that they and possibly other surgeons were interested in setting up a competing day surgery in Coffs Harbour. Although the ACCC also initially relied upon conversations between Mrs Ruthnam and Dr Roussos as giving rise to contravening conduct, at the hearing it did not press this aspect of its case. Accordingly, although Dr Roussos gave evidence and was cross-examined, the relevance of his evidence provides context for the determination of the primary factual issue and may also be relevant to Ramsay's purpose. The same may be said in respect of the evidence of other doctors, including Dr Lim and Dr Ross. 71 This primary factual issue, which is the subject of Pts D and (less so) E of these reasons, needs to be determined in the context of the particular conduct which the ACCC has pleaded gave rise to the two alleged contraventions. It is common ground that if the Court finds that the pleaded conduct did not occur, the proceeding must be dismissed. Strictly speaking, it would be unnecessary in that scenario for the Court to proceed to determine the additional issues. 72 Subject to that qualification, other issues (which are the subject of Pts F and G of these reasons), which may require determination are now summarised. First, the parties disagree as to what is the relevant market. The ACCC submitted that there is a market for services provided by Ramsay to surgeons, whereas Ramsay submitted that there is a market for services provided by it to patients. 73 Secondly, there is a question whether Ramsay had substantial market power in any market in which in-patient services are supplied. Ramsay denied that it had any such power. 74 Thirdly, and importantly, assuming that Ramsay had substantial market power, there is a question whether Ramsay took advantage of that substantial market power in the conversations which occurred between Mrs Ruthnam and Mr Sims and each of the relevant three surgeons. 75 In brief, the ACCC submitted that Ramsay did take advantage of its substantial market power because it could only be economically rational for it to withhold access to the operating theatres at Baringa if, and because, surgeons had no real alternative but to perform operations there. It added that, in a counterfactual world where Ramsay lacked substantial market power, this would not be so, and the alleged threats would be neither credible nor effective. 76 Fourthly, the question of whether Ramsay offered to supply services to surgeons on the condition that they not use the day surgery could also arise for determination and is linked to the primary factual issue. 77 Fifthly, there is the issue whether, in making the alleged threats to the surgeons, Ramsay had a substantial purpose of either preventing the new day surgery from entering the market or engaging in completitive conduct for the purposes of s 46 or to substantially lessen competition for the purposes of s 47 of the CC Act. The ACCC's case is that both Mrs Ruthnam and Mr Sims conversed with the relevant surgeons for the purpose of dissuading them from implementing their plans concerning the new day surgery, so as to prevent the competition with Ramsay ever occurring. 78 Sixthly, there is the issue whether Ramsay's conduct was likely to substantially lessen competition. The ACCC's case is that the conduct was likely to have that effect because it was likely to stop the development of the competing day surgery, with the consequence that a competitor to Ramsay would not enter the market. 79 Seventhly, there is the issue of the relevance, if any, of the ACCC's own conduct in relation to some aspects of the proceedings which are described at [9] above in Pt A. part d – findings on the primary factual issues concerning the pleaded CONTRAVENING CONDUCT (A) The ACCC's case concerning the contravening conversations 80 The ACCC claimed that in or around mid-2015, Ramsay devised "a strategy" in response to the rumours that some surgeons were planning to establish a rival day surgery in Coffs Harbour, the essence of which is outlined in [58] ff of Pt B above. The alleged strategy, which is said to have been agreed between Mrs Ruthnam and Mr Passmore, was that Mrs Ruthnam would speak to surgeons to deter them from having any involvement with the new day surgery. More specifically, as particularised in [104] of the FASOC, the ACCC claimed that the strategy was to the effect that Mrs Ruthnam would meet with certain surgeons who were accredited to operate at Baringa and CHDS concerning the new day surgery and convey to such of them as she considered appropriate that if they were to carry out some or all of their day surgery procedures in the planned new day surgery either: (a) their access to Ramsay's major operating theatres may change; or (b) their access to operating theatre time at Baringa for the purpose of in-patient surgery procedures would be substantially reduced or entirely withdrawn. 81 The ACCC further pleaded that between about June and October 2015 Mrs Ruthnam implemented this strategy by meeting with various individual surgeons, particularly Dr Joshi, Dr Summersell and Dr Sutherland. As noted above, the ACCC did not press its claim in the FASOC that what Mrs Ruthnam is alleged to have said to Dr Roussos involved contravening conduct. The ACCC claims that Mr Sims engaged in contravening conduct because of the things he said to Dr Joshi in the course of a restaurant dinner conversation they had on 3 September 2015. The ACCC also claims that Mrs Ruthnam conversed with other surgeons whose identities are set out in s 6.3 of Ramsay's response dated 27 May 2016 to the s 155 notice issued to it by the ACCC, which list included Dr Lim, Dr Ross, Dr Ward and Dr Roussos. Significantly, however, the ACCC did not claim that these other conversations involved contravening conduct. 82 In view of their significance to the pleaded case, it is necessary to set out [104] to [108] and [110] to [113] of the FASOC ([109] is omitted because it relates to that part of the ACCC's case concerning Dr Roussos which is no longer pressed): 104. In or around mid-2015, Ramsay devised a strategy by which Mrs Ruthnam would speak to Surgeons to deter them from being involved with the New Day Surgery. Particulars The strategy was to the effect that Mrs Ruthnam would meet with certain Surgeons accredited to operate at Baringa and CHDS regarding the New Day Surgery and convey to such of the Surgeons as she considered appropriate that if they were to carry out some or all of their Day Surgery Procedures in the New Day Surgery either: (i) their access to Ramsay's major operating theatres may change; or (ii) their access to operating theatre time at Baringa for the purpose of In-Patient Surgery Procedures would be substantially reduced or entirely withdrawn. That strategy was devised during discussions between (at least) Mrs Ruthnam and Mr Passmore in or around mid-2015. Further particulars of those discussions may be provided following evidence and discovery. 105. Between about June and October 2015, Mrs Ruthnam implemented that strategy by meeting with individual Surgeons accredited to operate at Baringa and CHDS, including as pleaded at paragraphs 106-109, below. Particulars Mrs Ruthnam met and discussed the possibility of the New Day Surgery with a number of Surgeons, including the four Surgeons referred to in paragraphs 106-109. Other than the Surgeons referred to in paragraphs 106-109, Mrs Ruthnam met and discussed the possibility of the New Day Surgery with the Surgeons set out in section 6.3 of the response by Ramsay dated 27 May 2016 to a notice under section 155 of the Act. Further particulars of Mrs Ruthnam's meetings and discussions with Surgeons may be provided following evidence and discovery. 106. On or about 25 August 2015 Mrs Ruthnam said words to Dr Joshi to the effect that if he was involved or had an interest in a doctor created facility he would not be able to work at Baringa and would need to do all his work elsewhere. 107. On or about 8 September 2015 Mrs Ruthnam said words to Dr Summersell to the effect that if he was involved in a new day surgery, he would not be able to do any operating at Baringa. 108. On or about 28 August 2015 Mrs Ruthnam said words to Dr Sutherland to the effect that if he chose to take his day surgery away from Ramsay, Ramsay would need to find a balance by stopping his main theatre cases and that Ramsay would need to look at the business case for his theatre time if he took his endoscopies away. … 110. On or about 3 September 2015 Mr Sims said words to Dr Joshi to the effect that Ramsay could not abide by a Surgeon having an interest in another medical facility and that Ramsay would not allow Dr Joshi to carry out day procedures at a new facility and carry out more complicated procedures at Baringa. 111. By the conduct referred to in paragraphs 106-110, Mrs Ruthnam and Mr Sims conveyed to those Surgeons that if they were to carry out some or all of their Day Surgery Procedures in the New Day Surgery, their access to operating theatre time at Baringa for the purpose of In-Patient Surgery Procedures would be substantially reduced or entirely withdrawn. 112. At all material times the conduct of Mr Sims, Mr Passmore and Mrs Ruthnam referred to in paragraphs 104-110 was engaged in on behalf of Ramsay within the scope of their actual or apparent authority. Particulars The Applicant relies on section 84(2) of the Act. 113. The conversations referred to in paragraphs 106-110 caused the Surgeons referred to in paragraph 100 to suspend their plans to establish a new private day surgery in Coffs Harbour in or around October 2015. 83 The following key points emerge from these pleadings: (a) The four conversations with the three particular surgeons are said to have involved the use of "words to the effect" of those set out in [106] to [108] and [110] of the FASOC. (b) The ACCC claims that despite some variance in the words used, Ramsay conveyed the same message to each of the three surgeons in the four conversations referred to in [106] to [108] and [110] of the FASOC. The message was that if the surgeon were to carry out some or all of their day surgery procedures in the new day surgery, their access to operating theatre time at Baringa for the purpose of in-patient surgery procedures would be substantially reduced or entirely withdrawn (see [111] of the FASOC and [5] and [45] of the ACCC's written opening). (c) Critically, and notwithstanding the broad terms of the pleaded strategy as particularised in [104] of the FASOC (which includes a reference to access to Ramsay's major operating theatres "may change"), the terms of [111] of the FASOC make plain that it is only the conduct pleaded in [106] to [108] and [110] which is said by the ACCC to involve contravening conduct. The significance of this distinction lies in the fact that although the ACCC claimed that Ramsay's representatives also told various surgeons that if they were to carry out some or all of their day surgery at the proposed new facility, their access to Ramsay's major operating theatres at Baringa "may change", the ACCC confirmed in a letter dated 28 July 2017 to Ramsay's solicitors that it does not allege that these conversations gave rise to contraventions of either ss 46 or 47 of the CC Act. 84 Significantly (and correctly), the ACCC acknowledged in its opening address that its case must fail if the Court is not satisfied to the relevant standard that the message pleaded at [111] of the FASOC was in fact conveyed. Necessarily therefore, the focus must be on fact finding in relation to the four pleaded conversations with the three particular surgeons, to which I now turn. (B) The four conversations said to involve contravening conduct 85 I will now address the four separate conversations which the ACCC relies upon in claiming that Ramsay engaged in contravening conduct. (a) Dr Joshi's conversation with Mrs Ruthnam on 25 August 2015 86 Mrs Ruthnam and Dr Joshi had a brief conversation on 25 August 2015 in Mrs Ruthnam's office at Baringa. The conversation was brief because Dr Joshi was about to operate and was under some time pressure. It is common ground that Mrs Ruthnam asked Dr Joshi if he was involved in the proposed new day surgery. 87 I will summarise the conflicting evidence given by Dr Joshi and Mrs Ruthnam as to that conversation before explaining why I strongly prefer Mrs Ruthnam's account. (i) Dr Joshi's evidence summarised 88 Dr Joshi's oral evidence in chief (which was given prior to Dr Sutherland's sound recording being retrieved) regarding the central part of the conversation he had with Mrs Ruthnam on 25 August 2015 was as follows: … So Elizabeth Ruthnam had invited me to come to her office to discuss things, but I did not know what the nature of what was going to be discussed. I – this was preceding an operating theatre list, so I was time pressured and I came in to find out what she wanted to talk about. She mentioned very soon after we sat down that she had heard from people, who she did not specify, that there was contemplation of a new day surgery being created and that I was the person to speak to about this. And she said that she had heard this from multiple sources. I then was taken aback because I wasn't expecting this line of questioning. I explained that I had heard that there may be a facility. I did not acknowledge at the time that I was an instigator of that facility, but I did say that if there was such a facility I would consider using it, but I followed that up by saying that I would still like to bring my overnight work, meaning work that would require patients to stay overnight or longer which I believed was profitable, to Baringa so that I could continue that relationship. She then replied that the Ramsay position was that if I was to use such a facility, that I would not be able – be welcome in Baringa to perform that type of work, and that I would have to take all my work to that competing facility. I was alarmed at that point and I explained but again emphasised that the work I would bring to Baringa I believe would still be profitable and that there would still be a reasonable case volume of what I brought and she declined that – she – well, she stated in response to that that – that didn't matter, that it was Ramsay's position, that I – that I could not be working at both places at once, and that she had planned to talk to other surgeons in the area to say exactly the same thing, and that she also said that this was Ramsay's view – official view at that point. She also mentioned that – she stated that, "I would hate to lose you" in terms of that's the expression that she used when she told me that I would not be able to work at Baringa anymore and she also said that Ramsay would seek to recruit other surgeons – other urologists working in my field to the area if they did lose me to another facility. At that point, she also mentioned that she wanted to talk about other equipment, laser equipment that I might use at Baringa, but I had said that at that point I was not willing to talk about it, partly because I had to attend an operating list later that day but also because that day surgery issue was far more concerning to me at that point, and troubled me greatly. Have you any other recollections of what was said during the course of that conversation?---I can't recall anything else. 89 Shortly thereafter, in his oral evidence in chief Dr Joshi recalled Mrs Ruthnam referring to Hurstville Community Hospital during their conversation on 25 August 2015. When asked to give his best recollection of what was said then on that subject, Dr Joshi said: … So that came up after I explained that I would still be willing to bring up work – bring work that was profitable to Baringa that did include an overnight stay or longer. She then responded that Ramsay's position is that, "We would not allow you to work at both facilities and that we would hate to lose you". She then mentioned in the context of that that there was a precedent, that in Sydney in Hurstville when doctors decided to set up Hurstville Community that the Ramsay facility in that area had – had declined their or revoked their privileges, and that they were then forced to work only at Hurstville Community and not at the Ramsay facility. 90 During his resumed cross-examination (i.e. after Dr Sutherland's sound recording had been retrieved and listened to by Dr Joshi), Dr Joshi gave an account of his conversation with Mrs Ruthnam on 25 August 2015. Aspects of this account differed from the evidence he had given in chief, with particular reference to Dr Joshi's recollection under cross-examination of what Mrs Ruthnam said about him not being able to rely on his lists for major cases. Dr Joshi made no mention in his oral evidence in chief of Mrs Ruthnam using the word "rely" or "lists". Dr Joshi's account of the 25 August 2015 conversation during his resumed cross-examination was as follows (noting that the references in the extract immediately below to 20 August should be references to 25 August): And if I could – on the – in August – in the 20 August conversation you told her that you would keep all your major surgeries at Baringa?---Yes, that's right. And she said, "You can't assume you can rely on it"?---Yes, that's right. In other words you can't assume you can rely on keeping your lists?---Yes, that's - - - Right?---Yes, I couldn't assume that I could rely on keeping list for major – or keeping any lists for major cases. In other words you couldn't – that if you took day surgery away you wouldn't be guaranteed to keep the list you had?---Yes, that's correct. And that's what she told on 20 August?---She - - - That's what she told you on - - -?--- - - - did not use those words. … Please answer?--- She did not use those words. But that's the effect of what she said was what I just put to you, wasn't it?--- The effect of what she had said was that I couldn't rely on being able to take non-day cases to Baringa if I took my day cases to another facility. In other words, what you understood that to mean, you couldn't rely on keeping the lists you had at Baringa if you took day cases to a day surgery?---I took it to mean that I could not rely on being able to do any cases that required inpatient stay at Baringa if I took my work elsewhere. But she didn't say that, did she?---She did. What she said, I suggest, that you couldn't rely on keeping your major lists, didn't she?---She did not – no, she didn't use those words, nor did she use words that effect that. Well, did she say you couldn't rely on your lists?---She said I could not rely on being able to use Baringa for major cases – or for cases that did not require day stay. And the major cases were based on you having lists at Baringa, weren't they?---No, my lists are made up of both day cases and non-day cases, so what I'm saying is that what she said to me had the effect of me understanding that if I had taken my day cases to another facility I could not rely on Baringa providing a session or a list availability to perform non-day cases. Okay. But I'm just trying to focus on what your recollection of what she actually said?---Yes. Your best recollection is that what she said if you took day cases away you couldn't rely on major list cases at Baringa?---I – that's not – it's an incorrect characterisation. I couldn't rely on being able to do my major cases at Baringa. And she didn't say you wouldn't be able to do your major cases at Baringa, did she?--- Well, she said that I would not be welcome there if I chose to go to the other facility, so I took that to mean that I would not be able to do my major cases at Baringa in that event. 91 There are some relatively contemporaneous written materials which are relevant to the 25 August 2015 meeting. They include a series of WhatsApp messages which were sent by Dr Joshi during the period 1:35 pm to 10:21 pm on 25 August 2015 to Dr Lim (and each of their respective wives, namely Dr Devina Joshi and Dr Kuswanto). These messages were sent after Mrs Ruthnam and Dr Joshi had met earlier that day. This series of messages commenced with the following message from Dr Joshi, which was sent at 1:35 pm: Just met Elizabeth. Ramsay is planning to kick us all out if another facility is set up (we will have to choose). Should chat soon. 92 Shortly thereafter (at 1:42 pm), Dr Joshi sent Dr Lim another message, in which he said "may need ACCC talk?". This indicates that Dr Joshi's turned his mind very early in the piece, and shortly after his meeting with Mrs Ruthnam, to the desirability of involving the ACCC. 93 In response to Dr Joshi's messages, Dr Lim sent Dr Joshi a series of WhatsApp messages during the same period on 25 August 2015. In one such message (at 1:45 pm), Dr Lim asked Dr Joshi whether Mrs Ruthnam was "as blunt as to threaten you? Seems a bit desperate". Dr Lim also messaged immediately thereafter and stated that he agreed that they should involve the ACCC. Shortly afterwards Dr Lim messaged that there would be a "financial impact if we are 'kicked out' before we have somewhere else to bring our patients to". Dr Joshi then messaged him back at 1:51 pm: I think the kick out would happen after cases are taken to the other facility. They said they would recruit others (like Hurstville private). May be worth Nani [i.e. Dr Kuswanto] calling ACCC. I did not admit starting a ds but said a DS is likely in coffs and grafton. 94 When Dr Joshi messaged that they may need to consider formal legal advice, Dr Kuswanto responded by asking: "ACCC & get AMA involved too?". 95 At 2:05 pm on 25 August 2015, Dr Lim sent a message to Dr Joshi asking what happened at Hurstville Private. He added that he was not worried about Ramsay recruiting other clinicians because Ramsay had no track record of success in that area and even if other surgeons came to Coffs Harbour he said that "we would recruit them ourselves". 96 Dr Kuswanto messaged Dr Joshi at 2:18 pm and asked him whether Mrs Ruthnam had told him "on what basis she's kicking you out?". Shortly thereafter, Dr Joshi responded as follows : She just said surgeons wiuld (sic) have to choose. They may deaccredit us or restrict ot (sic) time. I suspect they may be happy to shut surgeons down for a while. Also er [ie Mrs Rathnam] now in the process of talking to all other surgeons to tell them the same 97 At 2:31 pm, Dr Joshi messaged the others: We will need to talk together tonight if possible may be skype conf call. The basis for kicking us out is that they would be in competition with the us (sic) as owners of the competitors. Maybe worth anonymous talk to ACCC first before talking to AS [ie Dr Sutherland] tonight. 98 Dr Joshi, Dr Lim and Dr Kuswanto then exchanged various further messages on 25 August 2015 in which they agreed that it would be desirable for Dr Sutherland to record any future conversation with Mrs Ruthnam. This agreement between the doctors further highlights the prominence they gave even at this early point in time to engaging the interest of the ACCC. 99 After various further message exchanges on 25 August 2015 concerning the possibility of involving the ACCC, Dr Lim sent a message at 5:05 pm which stated that "It's hard to accuse Baringa of any anticompetitive behaviour at this stage" because Mrs Ruthnam had reminded him that she was very familiar with the rules that govern competition in the health sector. This is an apparent reference to a conversation between Mrs Ruthnam and Dr Lim in 16 June 2015 (see [230] ff below). Dr Lim messaged that Ramsay would not have broken the law unless they had actually done something and not merely threatened to expel a surgeon. Dr Joshi responded at 5.07 pm and stated that he thought that "threatening actually is enough to be illegal". 100 Dr Lim sent a message at 5.35 pm saying that, at that time, he was trying to contact the ACCC (it appears that Dr Lim first telephoned the ACCC hotline at approximately 5.11 pm on 25 August 2015). He added: "I think the subcategory of anticompetitive behaviour that this falls under is 'refusal to supply services'", and involved a breaking of the law because Ramsay was "misusing their market power". 101 Shortly thereafter, at 5:24 pm, Dr Lim messaged that he thought it would be more persuasive if "we argue that they are withholding supply of services illegally to prevent doctors from using a rival day surgery". This further illustrates the early concern as to how best to engage the ACCC's interest in the matter. 102 While Dr Lim continued to wait on hold with his call to the ACCC, he sent a message to Dr Joshi asking whether he could persuade Dr Sutherland and Dr Roussos to record any conversation they had with Mrs Ruthnam because "it would be valuable evidence". 103 Two days later, on 27 August 2015, Dr Joshi sent a WhatsApp message to Dr Lim saying that he had suggested to Dr Sutherland and Dr Roussos that they tape their meeting with Mrs Ruthnam. He then added that he had talked to "WR, AR and even MB only to say what ER told me. They all seem to object to the idea that Baringa could ask vmo's to choose. MB was unaware but was asked by ER today". It appears that the reference to "WR" is a reference to Dr Bill Ross, the reference to "AR" is to Dr Andrew Ramsay and the reference to "MB" is to Dr Miguel Bravo. 104 Shortly thereafter, at 10:20 pm, Dr Lim responded to Dr Joshi saying: "We want them to join us in seeking the involvement of ACCC". This further highlights the early importance which both Dr Joshi and Dr Lim saw in involving the ACCC. 105 There is other relatively contemporaneous material which may cast some light, either favourably or unfavourably, on the strength and reliability of Dr Joshi's recollection of what Mrs Ruthnam had said to him. It includes a series of emails drafted by Dr Joshi which he sent to Dr Lim on 26 August 2015 at 10:57 pm: I was thinking of writing an email to ER along the lines of... (baiting) Dear Elizabeth, I wanted to clarify the position of Baringa and Ramsay Health after our meeting yesterday. Is it that if a private day surgery was to open in Coffs Harbour and/or Grafton that any surgeon performing any operations in those facilities would be prevented from operating at all in Baringa? Obviously this affects my ability to work at another facility for private patients and I need the exact position clarified and on what basis any surgeon would be excluded from working at Baringa if they also worked at non Ramsay private day surgery. Also I would need to know when such a restriction (or is it deaccreditation?) would be applied on the services offered at Baringa (ie if cases are first taken there, or at some other point?). Does it apply to Grafton and Coffs Harbour equally ? What if I did non day surgery work at a non Ramsay hospital elswehere (sic) (eg for robotic prostatectomy). Please provide a detailed response for all these issues so I know where Baringa and Ramsay Health Care stands, as it may affect decisions moving forward. I understand these directives may have come from senior management outside Baringa but at the moment the implications for VMOs at Baringa are a bit vague. I am not aware of anywhere else (other than Strathfield private) where VMOs at a Ramsay hospital have been told they cannot also work at another private non Ramsay facility which has been established in a nearby area. Thanks Neil Joshi Alternatively... (stronger wording) After our meeting on Tuesday, I need written clarification as to exactly how Rasmay (sic) Health Care, via Baringa hospital, would restrict supply of their facilities to me if I was to do some day cases at a non Ramsay facility in Coffs. You stated that I would have to choose when there is no alternative for private patients who need an overnight stay, if I chose to do some day cases at a non Ramsay private day surgery in Coffs Harbour. On what basis would I be denied access to Ramsay facilities? Please provide a detailed response. Thanks Neil Joshi. 106 Although this material was never in fact sent to Mrs Ruthnam, the draft emails provide some evidence of Dr Joshi's state of mind at the relevant time and the second paragraph of the alternative draft email contains his relatively fresh perception or impression of the conversation which had occurred the previous day, including his uncertainty and stated need for clarification as to Ramsay's position. 107 There was a further exchange of emails between Dr Joshi, Dr Lim and Dr Sutherland on 28 August 2015, after Dr Sutherland had met earlier that day with Mrs Ruthnam. The emails relate to a letter which Dr Lim had drafted on 27 August 2015 with a view to sending it to the ACCC. The emails are relevant not only to the conversation on 25 August 2015, but also to the meeting between Mrs Ruthnam and Dr Sutherland which took place on 28 August 2015, i.e. three days after she had met with Dr Joshi. The emails (which have been edited to redact email addresses] are as follows: Subject: Re: a draft letter i dictated yesterday - feel free to edit From: Neil Joshi (...) To: [Dr Lim and Dr Kuswanto]; Cc: [Dr Sutherland]; Date: Friday, 28 August 2015, 19:09 I was fairly emphatic when I spoke to Elizabeth that there was a broad front of surgeons interested in both prospective day surgeries in Grafton and Coffs Harbour. I said I definitely would not be involved on my own. It is possible that she has backtracked because of ACCC warnings from other surgeons she spoke to. I know she was going to meet WR this week or early next and I had spoken to him beforehand and he independently brought up the ACCC. In terms of equity I would be open to sharing equity (proportionate to caseload, and only for the next 6-7 years he thinks he would like to do endoscopies for ) (sic) to high volume endoscopists like WR because we would still have to pay him some profits if he was not an equity holder, and having him as a holder tethers him not just to the DS but also the argument of anti-competitive behaviour and worsens Baringas position if they deny him operating rights at Baringa. On 28 Aug 20156:51 pm, "Liam Urn" <...> wrote: At the airport on my way to NZ.... It's possible that the change of tone has to do with her assumption that Neil is setting up the day surgery, whereas Andrew is an important client. She probably doesn't know Andrew has an equity interest. Neil - what are your thoughts about changing the day surgery ownership structure? Do you mean offering equity to all surgeons? Sent from my iPhone On 28 Aug 2015, at 18:19, Neil Joshi <...> wrote: I certainly was threatened. It sounds like her tune has changed slightly if you didn't get told that if you were to take day cases to another facility you would not be able to operate at Baringa, because that is exactly what she told me: "we would hate to lose you at Baringa". She even said that the prospective facility may need to be changed to accommodate overnight inpatient stays. There was no mention of the balance of day cases versus other cases with me. As far as the ACCC letter is concerned, I agree with its wording and sentiments and I do think it would have to be sent soon to prove that it (sic) we were threatened prior to the facility being built, to discourage it being built. We may be able to get other VMOs to sign the letter if that was thought to be helpful, or even show it to Ramsay before or as well as doing so, after thinking through the implications of these options. The other thing to think about is if the ownership structure of the day surgery business would have to be changed to lessen the ability of Baringa to carry out such a threat I would be open to considering that. Thanks Neil. On 28 Aug 2015 4:39 pm, "Liam Lim" <...> wrote: Andrew I wasn't threatened cos unlike general surgeons and urologists I don't have any use for inpatient beds. Neil felt I should draft a letter on our behalf before i left for NZ - there's no need to send the letter to ACCC at this stage. I think perhaps we could canvass the opinion of the other surgeons - a letter like this carries more weight if it is supported by most of the surgeons in coffs. Neil was basically told that any surgeon who brings any work to our day surgery will no longer have operating rights at Baringa. This is essentially blackmail and it's only purpose is to prevent a day surgery from becoming financially viable. The reason Ramsay is informing surgeons of this policy now rather than when our day surgery is in operation Is to prevent it from ever being built. Liam Sent from my iPhone On 28 Aug 2015, at 16:20, Andrew Sutherland <...> wrote: Liam and Neil Elizabeth came to see me today. She essentially said that it is a ramsay decision not Baringa. I didn't get a clear answer from her. She talked about balance between day procedures and major surgery. I pointed out that some surgeons are far less efficient with their time and perform less day procedures than I do but they are allowed to continue. So it is not just balance. What was the content of your discussions? Has there actually been a threat Andrew 108 The ACCC submitted that there is no reason to believe that these communications, which were sent shortly after the conversation with Mrs Ruthnam, did not accurately reflect Dr Joshi's recollection of their conversation on 25 August 2015, even when presented with a different experience by one of his colleagues, namely Dr Sutherland. (ii) Mrs Ruthnam's evidence summarised 109 In her oral evidence in chief, Mrs Ruthnam gave the following recollection of her conversation with Dr Joshi on 25 August 2015: … I asked Dr Joshi if he was involved in the proposed new day surgery on Halls Road in Coffs Harbour. I believe he said he was. I asked him the – I did say that I admired his enterprise, but there would be a consequence of doing that, and that if he were to remove his minor surgery from Baringa, then there would be a consequent change and he could not rely on his current major lists. I also said to Dr Joshi that should we lose surgeons, and I told him I was speaking to all the surgeons who performed day surgery, that it would be my job to recruit to our losses. 110 In her oral evidence in chief, Mrs Ruthnam flatly denied that she told Dr Joshi any of the following things: (a) if he or any surgeon took part of their work to a new day surgery, they would be kicked out of Baringa; (b) he would be de-credited or de-credentialed from Baringa; (c) his privileges would be revoked; (d) his operating time would be restricted; (e) he would not be allowed to work at Baringa; (f) he would not be welcome at Baringa; (g) he would have to choose between Baringa and the new day surgery; or (h) that she mentioned what had happened at Hurstville. 111 In her affidavit dated 1 December 2017, Mrs Ruthnam deposed that she had a telephone conversation with her superior, Mr Passmore, shortly after she had met with Dr Joshi on 25 August 2015. The context of the telephone call (which will be elaborated upon further below) is that on 19 August 2015 (i.e. prior to the meeting with Dr Joshi), Mrs Ruthnam had sought Mr Passmore's guidance on the "scale" on which Ramsay would respond to the proposal to create a rival day surgery. In an email dated 19 August 2015, which Mrs Ruthnam sent to Mr Passmore, she said: I was hoping we could have a chat tomorrow. There is more buzz around the place about our competitor and I feel now is the time to visit some doctors. I would like an idea on what scale Ramsay Health Care would respond to such a threat. We discussed many strategies the strongest of which was to warn the doctors that we may not be willing to support their major surgery if their day surgery was to go off site. The current contenders are Dr Joshi (urology), Dr Lim (ophthalmology) and Dr Andrew Sutherland who is our colorectal surgeon. I believe we may have an opportunity to dissuade Dr Sutherland but I need to be able to explain the consequences of his current decisions on his future practice. Would appreciate some guidance on this. 112 Mr Passmore responded the next day by an email in which he said: We need to be careful using "market power" in regard to doctors' lists but we have done it before. Katrina is meeting with us during Op Exec and I will raise with her, I assume Sutherland is going the (sic) Day Surgery to do scopes? 113 The reference to "Katrina" is to Ms Katrina Cunningham, who was Ramsay's General Counsel and Company Secretary. 114 Mrs Ruthnam responded by email on 20 August 2015, in which she said the following to Mr Passmore: Thanks Malcolm. Yes, I presume that's what Dr Sutherland is doing. Bill Ross told me this morning that Drs Lim and Joshi are offering doctors financial incentives to participate. They will be pushing hard. I understand our legal constraints but we need to define our legal competitive response and I believe foreshadow any future actions now. Dr Joshi and Lim have been telling the surgeons that Ramsay will not respond. In 2016 everyone needs to be re-credentialed. 115 Later on 20 August 2015, Mr Passmore sent an email to Ms Cunningham in which he forwarded his correspondence with Mrs Ruthnam and specifically sought her advice on his "position when meeting with doctors if I can advise that if you become a direct competitor your lists at Baringa will cease?". 116 In response, Ms Cunningham emailed Mr Passmore on 20 August 2015 starting that she would call him to discuss his request for advice. It is unclear when that discussion took place, but it is evident that Ms Cunningham provided advice to Mr Passmore sometime after Mrs Ruthnam met with Dr Joshi. 117 It is clear that when Mrs Ruthnam met several days later on 25 August 2015 with Dr Joshi, any legal advice provided by Ms Cunningham to Mr Passmore had not been passed on to her. This may be inferred from [152] of Mrs Ruthnam's affidavit dated 1 December 2017: 152. Shortly following my conversation with Dr Joshi, although I do not specifically recall when, I received a telephone call from Mr Passmore during which words to the following effect were exchanged: Passmore: "Hi Elizabeth, I have spoken to Katrina and whatever you do, don't say to the doctors that you are going to withdraw their major lists" Ruthnam: "I've already spoken to Joshi and told him that he shouldn't rely on keeping all of his major surgeries at BPH." Passmore: "Oh don't worry about that." 118 Mrs Ruthnam also gave evidence as to a subsequent meeting she had with Dr Joshi on 15 February 2016. It is desirable to summarise that evidence here, because it is relevant to the earlier conversation they had had on 25 August 2015. In her oral evidence in chief, Mrs Ruthnam said that she did not recall the principal purpose of the later meeting, but she recalled Dr Joshi asking her to reiterate the substance of the conversation they had had on 25 August 2015. She said that she responded as follows: … I explained again that for surgeons who choose to remove their minor surgery from Baringa, they could not rely on the same access to their current major lists, and that as a CEO of the business I would recruit to any losses of vacancy. 119 Mrs Ruthnam was cross-examined at some length regarding her evidence concerning the conversation with Dr Joshi on 25 August 2015. The key points may be summarised as follows. First, she was cross-examined about a file note prepared by Mr Passmore dated 5 May 2015, in which there is a reference to "divide and conquer" (see [58] of Pt B above). It was put to her that "divide and conquer" was a reference to a strategy to separate the group of surgeons thought to be behind the proposed new day surgery at Halls Road, by dissuading the surgeons who required in-patient facilities (namely Dr Joshi and Dr Tawadrous). Mrs Ruthnam denied that there was any discussion between Mr Passmore and herself about "dividing and conquering". I accept that evidence. It is true, as the ACCC pointed out, that Mr Passmore may have been able to explain his file note but he was not called as a witness by Ramsay (even though he had provided an affidavit in support of Ramsay's case). In my view, however, it is important not to attach undue significance to Mr Passmore's absence in circumstances where it is plain that whatever strategy he may have had in mind at that time, whether arrived at by himself or in discussion with Mrs Ruthnam, their respective contemporaneous file notes and emails indicate that both had a clear appreciation of the need to obtain legal advice on any competition law issues. This is in fact what Mr Passmore then did. When Mrs Ruthnam spoke to Dr Joshi she was well aware of the need for caution and to avoid anti-competitive conduct. It is most unlikely that, in those circumstances, she would threaten Dr Joshi as claimed by him even though she did not know at that time of Ms Cunningham's legal advice to Mr Passmore. 120 Mrs Ruthnam was cross-examined as to whether she recalled Mr Passmore raising the possibility of initiating the Hurstville/St George strategy, to which Mrs Ruthnam said she had no recollection. I accept that evidence. I also accept Mrs Ruthnam's evidence that, while she personally was aware of the Hurstville incident because it was part of the "Ramsay folklore", she had no detailed knowledge of it. 121 It was put to Mrs Ruthnam that she and Mr Passmore had a discussion on 4 June 2015 as to whether Ramsay could initiate the Hurstville/St George strategy in relation to Dr Joshi and Dr Tawadrous, to which she responded that she did not recall the substance of those discussions. I accept that evidence. 122 Mrs Ruthnam was cross-examined at some length regarding Ramsay's response dated 27 May 2016 to the ACCC's s 155 notice, as well as on the transcript of Mrs Ruthnam's own s 155 examination by the ACCC shortly thereafter on 21 July 2016. To avoid repetition, I will defer summarising that material and will deal with it at [130] of these reasons for judgment. 123 Mrs Ruthnam was cross-examined as to the email exchanges between her and Mr Passmore on 19 and 20 August 2015, particularly a passage in one of Mr Passmore's emails which said, "We need to be careful using "market power" in regard to doctors lists but we have done it before…" (see [112] above). She said that she did not know what Mr Passmore was referring to when he said in his 20 August 2015 email that, after needing to be careful using market power, "we've done it before". Mrs Ruthnam said that she could not say whether or not Mr Passmore was referring to the "St George Private Hospital strategy". I accept that evidence. The ACCC again drew attention to the fact that Mr Passmore was not called by Ramsay as a witness and that he would presumably have been in a position to explain what he meant by his email. That is true, but I repeat what is said at [119] above. 124 When Mrs Ruthnam was further cross-examined on what was attributed to her in Ramsay's s 155 response concerning her conversation with Dr Joshi, while she initially accepted that what was attributed to her there reflected her recollection at that time of that part of the conversation, she maintained that it did not reflect her present recollection of the conversation. I will return to address this important matter at [130] ff below. 125 When it was put to Mrs Ruthnam, that the account of her conversation with Dr Joshi in Ramsay's s 155 response was likely to be a more accurate account than what is recorded in [152] of her affidavit, Mrs Ruthnam said that the account in her affidavit was accurate and that she would never lie to Mr Passmore. I took this to mean that she wouldn't deliberately mislead Mr Passmore, including by omitting relevant matters which she had told Dr Joshi. The contents of [152] of Mrs Ruthnam's affidavit are set out at [117] above. It records her recollection as at 1 December 2017 of the conversation she had with Mr Passmore shortly after she had met with Dr Joshi on 25 August 2015. I found Mrs Ruthnam to be a truthful witness. I accept her evidence in respect of [152] of her affidavit. 126 When Mrs Ruthnam was cross-examined further concerning her recollection of the conversation she had with Dr Joshi on 25 August 2015, she remembered that Dr Joshi had told her not to worry because he would "continue to bring my major work to Baringa". It was put to Mrs Ruthnam that this fresh recollection was inconsistent with her oral evidence in chief when she said that the evidence that she had given reflected her full recollection of the meeting. When the inconsistency was drawn to her attention, Mrs Ruthnam did not deny that this was an additional recollection on her part, but she was adamant that she was answering the cross-examiner's questions honestly. I accept that explanation. 127 Mrs Ruthnam denied that she told Dr Joshi that he would not be welcome at Baringa. She also said that she did not recall saying anything along the lines of Dr Joshi having to take all of his work to the competing facility. I accept that evidence. 128 Mrs Ruthnam accepted that she may have told Dr Joshi that she would hate to lose him, but she explained that this was a figure of speech and reflected the fact that Baringa might lose most of Dr Joshi's work if his major lists were reduced. She added that she believed that she said the same thing to Dr Sutherland. I accept that evidence. 129 Mrs Ruthnam was cross-examined at some length on the transcript of Dr Sutherland's sound recording (Exhibit Q), particularly on the issue whether Ramsay had a policy which required "balance" from its accredited surgeons. Mrs Ruthnam responded by saying that it was her understanding of the Facility Rules that she, as the CEO, needed to achieve a balance in the sense of optimising the use of the operating theatres at Baringa. I accept that evidence. 130 The ACCC placed heavy emphasis on the following entry, provided by Ramsay in its response dated 27 May 2016 to the ACCC's s 155 notice: I'm sorry but if you remove your more lucrative high turnover surgery from Baringa then RHC won't facilitate that by having you work here. We would recruit to our losses. That won't be happening. You can't be working at two hospitals. That is not fair to Ramsay and Ramsay will not tolerate this. I'm just trying to make the business work and the business cannot work when someone rips part of the business out of it that is profitable. 131 The ACCC said this entry was Mrs Ruthnam's best recollection of the substance of her conversation with Dr Joshi on 25 August 2015. 132 The ACCC submitted that this should be viewed as a more accurate account of Mrs Ruthnam's recollection of the meeting, bearing in mind that it was provided approximately ten months after the conversation occurred and well before the oral evidence she gave in this proceeding. It submitted that there is "a remarkable correspondence" between this account and Dr Joshi's account of the conversation, which it said was supported by the various WhatsApp messages in which Dr Joshi was involved and which were sent shortly after his meeting with Mrs Ruthnam on 25 August 2015 (see [91] ff above). In support of that submission, the ACCC referred to observations in cases such as Foxman at 319 on how witnesses' recollections of events are affected by the passage of time. I will address this matter in the next section of these reasons for judgment. 133 As noted above, Mrs Ruthnam denied in her oral evidence in chief that there was any mention of Hurstville during the conversation with Dr Joshi on 25 August 2015. Mrs Ruthnam considered the events of Hurstville to be a piece of Ramsay "folklore". The ACCC submitted that the Court should not accept Mrs Ruthnam's denial that she mentioned Hurstville in the 25 August 2015 conversation. It submitted that there was no reason for her not to raise it, in the context of what she was seeking to communicate to Dr Joshi. I see no reason not to accept Mrs Ruthnam's denial. It is not without significance that in Dr Joshi's WhatsApp message he refers to Hurstville parenthetically (see [93] above), which suggests that he was not purporting to quote what Mrs Ruthnam had said, but rather was adding his own analysis. Dr Joshi was personally aware of the Hurstville episode before he met with Mrs Ruthnam on 25 August 2015. It is also notable that Mrs Ruthnam made no mention of Hurstville in her recorded conversation with Dr Sutherland on 28 August 2015. This has some significance because Mrs Ruthnam said that she gave the same message to each of the surgeons with whom she spoke. 134 For reasons which I will now explain in more detail, I strongly prefer Mrs Ruthnam's account of the conversation on 25 August 2015 to that of Dr Joshi. (iii) Mrs Ruthnam's evidence is preferred 135 The reasons why I strongly prefer Mrs Ruthnam's evidence of what was said at the 25 August 2015 meeting are as follows. 136 First, I found Mrs Ruthnam to be honest and truthful. She was a responsive witness in what turned out to be a lengthy and searching cross-examination by a very experienced cross-examiner. The highest point of the ACCC's case relates to the response attributed to her in Ramsay's s 155 response, but for reasons which I will later explain I accept her explanation regarding the differences between the account attributed to her in that document and her other evidence relating to the 25 August 2015 conversation. 137 Although, as indicated, I found Dr Joshi generally to be an honest witness, there are several reasons why I hesitate to accept and act upon all his evidence in the absence of strong corroborating material. Those reservations relate to the following matters. (a) Dr Joshi freely participated in an arrangement with Dr Lim and Dr Lim's wife, Dr Kuswanto, to make redactions from their WhatsApp messages in responding to Ramsay's subpoenas and without disclosing that those redactions had been made. Dr Joshi's evidence under cross-examination was to the effect that he agreed that because the WhatsApp transcripts were common to all who had sent or received the messages, he left it to Dr Kuswanto to decide for all of them which parts of the transcript should be redacted as not being relevant to the proceeding. It is true that many of the redactions are of a personal nature and are not relevant to the issues in the proceeding. Other redactions, however, plainly are relevant, including the redaction of Dr Joshi's message sent on 10 February 2016 at 10:11 pm when he told the others for the first time that he had recorded his dinner meeting with Mr Sims on 3 September 2015. The redacted messages also included Dr Joshi's statement that the ACCC "were excited to hear about the prospect of recordings but I didn't admit to it directly and they couldn't comment on the legality of it". In circumstances where Ramsay had had a subpoena issued to Dr Joshi which required the production of relevant WhatsApp transcripts, it was cavalier and irresponsible of him to delegate the task of determining what material was relevant to Dr Kuswanto and without proper supervision or control by Dr Joshi. These actions derogate from his reliability. (b) Dr Joshi did not take appropriate steps to preserve the sound recording which he made of his dinner conversation with Mr Sims on 3 September 2015, notwithstanding that he must, or at least should, have appreciated the potential significance of that recording to these proceedings, not the least because it is evident that the deletion occurred after Dr Joshi had met with the ACCC in February 2016. I do not suggest that the deletion was deliberate or made at the request of the ACCC. I accept Dr Joshi's evidence that the recording was inadvertently deleted when he performed a factory reset of his phone to enable its use in his medical practice. When this occurred, however, he had already met with the ACCC and must have been aware of the potential importance of the recording, not the least because, as he told his colleagues, the ACCC "were excited to hear about the prospect of recordings". He ought to have taken proper steps to preserve the recording. (c) I was left with a strong impression that, from an early stage, Dr Joshi believed that it was important to get the ACCC involved in the surgeons' plans to develop a rival day surgery. This is plainly reflected in the WhatsApp messages which he sent shortly after his meeting with Mrs Ruthnam in which there are several references to that matter. His suggestion of involving the ACCC was strongly supported by Dr Lim. Dr Joshi's willingness to engage in conduct in order to achieve a desired outcome in his self-interest is also reflected in the draft letter which he prepared to send to Mrs Ruthnam, which he candidly described at the top of the email as "baiting" (see [105] above). Similarly, Dr Joshi was prepared to lend his name in support of the letter of complaint which was sent to the ACCC. That letter stated that Mrs Ruthnam had told several surgeons that if they brought any of their patients to a competitor day surgery, their "operating privileges at Ramsay would also be revoked" and that Mr Sims had confirmed to Dr Joshi that Ramsay would indeed seek to "revoke" the operating rights of surgeons who bring their work to another day surgery in Coffs Harbour. This is to be contrasted with Dr Joshi's ultimate acceptance in cross-examination that Mrs Ruthnam did not use the words "privileges will be revoked" when she spoke with him on 25 August 2015. Furthermore, it is clear from Dr Joshi's WhatsApp message at 2:23 pm on 25 August 2015 that the topic of deaccreditation arose from his own conjecture as to what Mrs Ruthnam meant by saying "surgeons would have to choose". These matters show that at times Dr Joshi was prone to exaggerate or overstate matters if he believed that it was in his self-interest to do so. (d) My further impression is that important parts of Dr Joshi's evidence, including that relating to what was actually said during the conversation on 25 August 2015, were more reflective of Dr Joshi's perception of what had been said, rather than accurately recording or identifying the words which were actually used. As Ramsay submitted, this may have been because Dr Joshi frankly acknowledged that, prior to the conversation on 25 August 2015, he had not considered the implications of taking away all his day surgeries from Baringa, including his loss of priority and the possibility of Ramsay recruiting other surgeons. His perceptions or impressions also appear to have been affected by his prior knowledge of the events at Hurstville, a matter which Dr Joshi mentioned in his WhatsApp message which is set out at [93] above. The terms of that message (particularly the use of parentheses) suggest that the reference to Hurstville was something he recalled, rather than something which Mrs Ruthnam said to him on 25 August 2015. 138 Secondly, I do not accept Mr Joshi's evidence that, on 25 August 2015, Mrs Ruthnam told him that if he took his day surgery work away from Baringa he would not have any lists there, that he "would not be able to do any work at Baringa" or that he "could not rely on being able to do any cases that required inpatient stay at Baringa if I took my work elsewhere". The relatively contemporaneous WhatsApp messages do not record Dr Joshi telling his colleagues that Mrs Ruthnam had told him any of these things. Rather, they record him telling them that Mrs Ruthnam planned to kick them all out. When asked by Dr Lim to explain the basis for kicking them out, Dr Joshi responded by saying that Mrs Ruthnam said that surgeons would have to choose and that they "may deaccredit us or restrict o/t [i.e. operating theatre] time". Yet, as noted, Dr Joshi ultimately accepted in cross-examination on both 4 March 2019 and 3 December 2019 that Mrs Ruthnam did not use the specific words "deaccredit" or "kick out". Nor did he think that she used the specific words "restrict operating time". It is difficult to reconcile this evidence with the terms of Dr Joshi's own WhatsApp messages sent to his colleagues on 25 August 2015. 139 I do not accept Dr Joshi's evidence in cross-examination that by using the word "restrict" he meant that he would be given no operating time at all. This is inconsistent with the ordinary meaning of that term, which he used in his WhatsApp message, which is to reduce or limit his operating time and not to exclude it altogether. 140 Thirdly, Mrs Ruthnam sent an email to Mr Passmore on 15 February 2016, just before she met again with Dr Joshi, in which she told Mr Passmore that Dr Joshi was "still very upset at Ramsay's position re the security of his lists if he competes against us". This accords with Mrs Ruthnam's evidence that the conversation she had with Dr Joshi focussed on the topic of the security or priority of his lists if he were involved in the day surgery. I accept Ramsay's submission that, on its face this email is a reference to what was conveyed to Dr Joshi as to Ramsay's position on 25 August 2015. Mrs Ruthnam confirmed as much. The language of "security of lists" reflects the language used by Mrs Ruthnam in her conversation with Dr Sutherland on 28 August 2015 where she spoke of lists no longer being "guaranteed", as well as the language in the conversation with Dr Joshi of not being able to "rely" on continuing to have the same lists. The email underlines the likelihood that a message to the same effect as that conveyed to Dr Sutherland was conveyed to Dr Joshi on 25 August 2015. Dr Joshi accepted that the effect of his conversation with Mrs Ruthnam in February 2016 was that by taking away his day surgery work, he would be "risking the security of the existing lists" he had. 141 Fourthly, I accept Ramsay's submission that Dr Joshi may have either overreacted or misunderstood the message he received from Mrs Ruthnam on 25 August 2015. The issue of a potential loss of his priority came as a shock and surprise to him and may have coloured his perception of what Mrs Ruthnam was saying to him. Having reviewed Dr Joshi's evidence and demeanour, although I accept that generally he was an honest witness, as noted above at [137(d)] I consider that much of his evidence reflected his personal impression or perception of what he was being told by Mrs Ruthnam, rather than accurately reflecting the actual words which she used. This is well illustrated by the terms of the two draft emails which Dr Joshi prepared and sent to Dr Lim on 26 August 2015, the day after his meeting with Mrs Ruthnam (see [105] above). That draft letter refers twice to Dr Joshi wanting to clarify what Mrs Ruthnam had said, and includes a reference to the position being "a bit vague". I recognise that the draft letters were prepared by Dr Joshi as "bait" as referred to in the introductory part of his email, but it is also significant that Dr Joshi agreed in cross-examination that he wanted clarification following the 25 August 2015 conversation. This would be unnecessary if he had a clear recollection of what Mrs Ruthnam had said. 142 Fifthly, I do not consider that any particular significance attaches to the fact that on 28 August 2015 Dr Joshi sent an email to the other proponents in which he claimed that Mrs Ruthnam had told him that "we would hate to lose you at Baringa". As noted at [128] above, I accept Mrs Ruthnam's evidence under cross-examination as to what she meant by this expression. 143 It is notable that Mrs Ruthnam used a similar expression in her conversation with Dr Sutherland only three days after she had met with Dr Joshi. Dr Sutherland's sound recording contains the following exchange between Mrs Ruthnam and him on 28 August 2015 on the topic of "not losing him": No it won't hurt because you know we have a sustained approach to growing the business but we don't want to lose you… However, I just might end by saying we don't want to lose you and your business... 144 I accept Ramsay's submission that the expression "I would hate to lose you" was used by Mrs Ruthnam in respect of both Dr Joshi and Dr Sutherland to indicate that she didn't want Baringa to lose their valuable day surgery work, which could occur if the existing priority in their lists at Baringa was changed and they did less work at Baringa. This reading is consistent with evidence that Mrs Ruthnam raised the prospect of purchasing new equipment in seeking to retain both Dr Joshi's and Dr Sutherland's day surgery work at CHDS. 145 Sixthly, and critically, I do not accept the ACCC's submission that Dr Joshi's account of what he was told by Mrs Ruthnam on 25 August 2015 should be preferred because Mrs Ruthnam had effectively confirmed the accuracy of Dr Joshi's account of their conversation with reference to what was attributed to her in Ramsay's response dated 27 May 2016 to the s 155 notice. That response contained the following statements attributed to Mrs Ruthnam: I'm sorry but if you remove your more lucrative high turnover surgery from Baringa then RHC won't facilitate that by having you work here. We would recruit to our losses. That won't be happening. You can't be working at two hospitals. That is not fair to Ramsay and Ramsay will not tolerate this. I'm just trying to make the business work and the business cannot work when someone rips part of the business out of it that is profitable. 146 For the following reasons, I consider that the ACCC has overstated the significance of that response. (a) When Mrs Ruthnam's attention was drawn to Ramsay's s 155 response, she did not resile from her oral evidence regarding her conversation with Dr Joshi on 25 August 2015. She explained that she had provided information to Ramsay for the purposes of Ramsay responding to the s 155 notice. When pressed in cross-examination, Mrs Ruthnam acknowledged that she "must have" provided information which provided the foundation for that set out in the s 155 reply and that this must have been her best recollection at that time, but she stated in cross-examination that it wasn't her best recollection now. She said that her further recollection is that she gave Dr Joshi the same message as she did to the other doctors to whom she spoke, namely that "he couldn't rely on keeping all his major lists at Baringa". I accept that evidence. When reminded of the chronology of events, including her email dated 20 August 2015 in which she asked for guidance from Mr Passmore as to what to say to the surgeons, which request was made prior to her meeting with Dr Joshi, Mrs Ruthnam truthfully acknowledged that, as at 25 August 2015, she wasn't aware of Ms Cunningham's legal advice. Under cross-examination, however, Mrs Ruthnam stated that she had been instructed by Mr Passmore in his email dated 20 August 2015 of the need for caution in using market power. I accept that evidence. It is confirmed by the contemporaneous documents. I find that Mrs Ruthnam is by nature a cautious and truthful person. Her caution and appreciation of potentially relevant competition law constraints on what Ramsay could lawfully say to the proponents of the new day surgery is reflected in the fact that, several months before her 19 August 2015 email request to Mr Passmore for guidance (see [111] above), she sent him another email on 17 June 2015 (shortly after her meeting with Dr Lim regarding his involvement in the new day surgery), when she asked Mr Passmore: Have you had your meetings with Katrina and Danny regarding the Company's position regarding this threat to our business? The reference to "Katrina" is to Ms Cunningham and the reference to "Danny" is to Mr Sims. And in the email Mrs Ruthnam sent to Mr Passmore on 20 August 2015 (see [114] above), she said that "we need to define our legal competitive response". This was a matter which plainly was still at the forefront of Mrs Ruthnam's mind at that time, which was shortly before she met with Dr Joshi. (b) Mrs Ruthnam's email dated 17 June 2015 apparently stems from what is recorded in Mr Passmore's file note dated 4 June 2015 of his discussion that day with Mrs Ruthnam, which is set out at [60] of Pt B above). After noting "Can we initiate the Hurstville/St George strategy → Urologist → Vascular – out of Baringa?", Mr Passmore then made the following entry: "Actions to be taken – meet with Danny + Katrina – ?OT in Baringa Centre". (c) It may be inferred from this file note, together with Mrs Ruthnam's email dated 17 June 2015, that both Mr Passmore and she saw the need to obtain specific legal advice from Ms Cunningham on any relevant competition law constraints on how they should respond to the threat to Ramsay's business. In these circumstances, I think it most unlikely that Mrs Ruthnam would have cast aside the need for caution and pre-empt the legal advice which she knew was forthcoming by telling Dr Joshi the things he claims she said to him on 25 August 2015. (d) Mrs Ruthnam's evidence under cross-examination regarding the circumstances surrounding her provision of information for the purposes of Ramsay's s 155 response, as described above, is not new. She said substantially the same thing in her s 155 examination on 21 July 2016. She said then that she wasn't sure she had "actually interrogated" Ramsay's final response, but that she had edited "my content with the first draft, which wasn't in this format" (referring to the format of Ramsay's final s 155 response) and that she assumed that her comments had been recorded as provided by her. (e) The ACCC submitted that it was incumbent upon Ramsay to adduce relevant evidence to support any suggestion by it that Mrs Ruthnam's instructions regarding what she told Dr Joshi on 25 August 2015 were not faithfully recorded in the relevant entry in Ramsay's s 155 response. There is some force in that submission. For completeness, however, it should also be noted that in the course of the lengthy s 155 examination of Mrs Ruthnam, which occupied 129 pages of substantive text, Mrs Ruthnam was asked no questions at all by any of her examiners with a specific focus on the relevant entry in Ramsay's s 155 notice concerning her conversation with Dr Joshi on 25 August 2015. In particular, it is significant to note that she was asked no questions as to how she reconciled her repeated evidence in her s 155 examination that she gave the same message to each of the surgeons with the statements attributed to her in Ramsay's s 155 notice regarding what she told Dr Joshi on 25 August 2015. (f) Moreover, Mrs Ruthnam's further recollection of what she said to Dr Joshi, as opposed to what is recorded in Ramsay's s 155 notice, is broadly consistent with her evidence in her s 155 examination which was conducted on 21 July 2016. When she was asked to describe the message which she and Mr Passmore agreed should be conveyed to the doctors involved in the proposed new day surgery, Mrs Ruthnam said the following: So, the message was doctors do both - some doctors do only day procedures. Opthalmologists would normally only do day procedures, so they're in a slightly different category. Other surgeons usually do minor surgery and major surgery, the minor surgery being either in a day facility or in a hospital that admits the patient just for the day. So some of our minor surgery is done in our major theatres. So there is an effect not only on our numbers, so there's an effect on our theatre lists, which are regularly allocated and reviewed six-monthly. So there would be an effect of this, and I was asked to communicate to the doctors that the effect of the change in our list may not be to their advantage. (g) Later in her s 155 examination, after Mrs Ruthnam was asked to describe the substance of the conversations she agreed with Mr Passmore to have with the doctors, she said: Just what I said before – that we should try to establish who's involved, why are they involved, is it because of some deficit on our part, whether it's staff or equipment or space or access to theatre lists, as Dr Sutherland had stated. And to say - I did state to the doctors that I wasn't obliged to have this conversation, but I felt that it was a fair thing to do to say that there would be a consequence to them working in two or three different facilities at the same time, and it would have an effect on our business and that we would do those things and reorder our theatre lists and recruit to our losses. Those were actually the terms that I used. (h) Ramsay made the following submission regarding the significance which the ACCC ultimately attached to what was attributed to Mrs Ruthnam in Ramsay's s 155 response, as opposed to her evidence under cross-examination: Thus, the ACCC obtained two responses under compulsory process, one from the company and one from Mrs Ruthnam directly. During her s 155 examination, it did not seek to explore with Mrs Ruthnam any inconsistency between her direct response and the company response and indeed implicitly accepted her direct response. Yet when it comes to trial, in seeking to assist the Court in making factual findings as to what occurred, being findings on a serious charge, the ACCC cross-examines only on one part of the company response, chooses not to take her to her direct response, resists the Court learning about her full s 155 response and successfully resists Mrs Ruthnam being given the opportunity in re-examination to explain, as she inevitably would have, that her s 155 response, as the ACCC itself appeared to accept at that time, represented her honest and best recollection of the relevant conversations at about that time, and that one part of the company response, however it came to be prepared, did not. There is considerable force in that submission. 147 That Mrs Ruthnam conveyed to Dr Joshi that he could not rely on his major lists if he was to take all of his day surgery to another facility is also confirmed by an email she sent on 15 February 2016, just before she met with Dr Joshi again: Have usual periodic appointment to see him tomorrow. Will see what he tells me. Obviously still very upset at Ramsay's position re the security of his lists if he competes against us. 148 Seventhly, I do not accept the ACCC's submission that the "balance" and "policy" to which she repeatedly referred to in her evidence was a "confection", which was designed to disguise Ramsay's anti-competitive response to the threat posed by the proposed day surgery. I do not accept that the "policy" derives no support from the Facility Rules. In particular, I consider that cl 18 of the Facility Rules expressly provided that the availability or allocation of theatre sessions would be reviewed by the CEO and that the CEO had an "absolute discretion to allocate and to change the allocation of theatre sessions", taking into account a non-exhaustive list of factors, including in cl 18.2 "commercial strategies and priorities of the Facility and/or Ramsay Health Care" and, significantly, in cl 18.3 "the case mix of that Accredited Practitioner and the Facility". This adequately recognises the commercial desirability of the CEO maximising utilisation of Baringa's operating theatres for Ramsay's financial benefit. 149 The practical application of that factor or "policy" is well illustrated by an email which Mrs Ruthnam sent to one of Baringa's accredited surgeons (Dr Robert Kalmar) on 4 September 2015. Mrs Ruthnam sent that email in advance of a meeting the following week with Dr Kalmar which was for the purpose of discussing proposed changes in his theatre allocation times. Mrs Ruthnam said in her email: In our most recent theatre utilisation review your utilisation of your allocated theatre time has reduced to 58%. You have discussed your change of lifestyle and I applaud your ability to work less! However the executive team is required to make and report our efficiency strategies for the management of our theatres. The changes we are required to make are as follows: your main theatre list will remain on Thursday of week 2 but will be reduced from a full day to a half day so your new allocation will be on Thursday afternoon. This will not be operational until 22nd October to provide you with adequate notice. For your endoscopy list this will change from week 3 in the theatre cycle to week 2. This will be operational from Wednesday 21st October. 150 For the reasons explained by Mrs Ruthnam in her evidence, she had a natural concern as Baringa's CEO to maximise its financial profitability. This meant that, in allocating theatre lists, she took into account a range of factors, including the value of an individual surgeon's contribution to Baringa's profitability. She gave preference to the most valuable contributors, not only by allocating to them more attractive theatre lists in terms of their timing, but also by seeking to accommodate the medical needs of those surgeons' medical practices so that they continued to contribute to Ramsay's profitability. 151 Mrs Ruthnam's desire to give preference to surgeons who provide the most valuable work at Baringa is well illustrated in her dealings with Dr Sutherland, not only in respect of what is recorded in Dr Sutherland's sound recording of their conversation of 28 August 2015, but also in the email which Mrs Ruthnam sent to Dr Sutherland on 4 September 2015. There, she described in some detail how she could address some of the requirements relating to his practice as raised by him at their meeting on 28 August 2015, including improving his allocated lists. 152 Finally, I reject the ACCC's submission that [152] of Mrs Ruthnam's affidavit is consistent with [106] of the FASOC, with particular reference to her telling Mr Passmore that she had told Dr Joshi that he "shouldn't rely on keeping all of his major surgeries at BPH" (emphasis added). The position would be different if she had used the word "any". But the notion of Dr Joshi not relying on keeping all his major surgeries at Baringa is consistent with what Mrs Ruthnam told Dr Sutherland and the other surgeons with whom she spoke that there may be changes to their major theatre lists, in the sense of a loss of priority, if they took their day surgery away. Conclusion 153 For these reasons, I find that the ACCC has failed to make good its pleading in [106] of the FASOC. It has not established that words to the effect pleaded there were said by Mrs Ruthnam to Dr Joshi. I repeat what is said above in Pt A of these reasons for judgment concerning s 140 of the Evidence Act. (b) Conversation between Dr Sutherland and Mrs Ruthnam on 28 August 2015 154 There can be no debate about what was said in this conversation: the recording speaks for itself (see Exhibit 3 and Exhibit Q). It is convenient to set out the main relevant part of that transcript (without suggesting that the balance of the transcript is not relevant): 0:00:58 ER I know you're short of time so I won't tell you all the Ramsay news but I did hear you had an interest in a new day surgery in Coffs Harbour. I've obviously discussed this ... A lot of information comes to me. I can't discern what it really means but I do know Ramsay's Health's position. 0:00:19 AS Yes. 0:00:21 ER And the position ... their position is that I guess, let me tell you about the way the business runs. Some of the things we do don't make us money. 0:01:31 AS Yeah. 0:01:32 ER Some of the things we do, do make us money and there's a balance and in the surgical side of the business Andrew we need that balance to remain. So we need to do day surgery to be able to ... but you know 0:01:45 AS Mmm. 0:01:47 ER But we try not to bring the business into the clinical arena and we don't tell surgeons that some of the things that we do - that they do may be (sic) even regularly - I've seen surgeons, I've seen specialists. So when it comes to the balance between day surgery and major surgery, we need that balance. The effect on our business would be great and I know that's not your problem, if we lose the day side of the business which in many ways doesn't necessarily subsidise a big part of the business but our preference is that our surgeons use both. 0:02:20 AS Absolutely. 0:02:22 ER Yeah okay and so you know there are financial as well as organisational reasons for that. So if a doctor chooses to take a part of the business out, you know they fast hand over (sic) part of the business out then Ramsays would really require me to look for that balance - look for that balance elsewhere so it would mean that, umm ... that the major lists that our surgeons have would no longer be guaranteed because we need that balance. I find this a very very painful thing to pass to you Andrew. 0:03:06 AS I can see. Cause we had to do this --- 0:03:09 ER However, I've got a chance to do nothing --- 0:03: 11 AS 5 years ago or 4 years ago --- 0:03:12 ER I just wanted to tell you now rather than wait until some day surgery springs up and then I'm telling surgeons then. I think it's- I just want to be fair and transparent and explain my reasons and I'm speaking to all of your colleagues. 0:03:26 AS Yes. As I say - cause I think, I can't remember if it was Malcolm or someone else came in here last time and I was very --- 0:03:33 ER Oh yes yes yes that was years ago. 0:03:34 AS When the specialist medical centre was being built and the same --- 0:03:36 ER That's right. 0:03:37 AS Process was happening and the same sort of discussion. 0:03:39 ER Yes yeah. 0:03:41 AS So presumably you're saying if the colonoscopies go then the other surgery may not be sustainable. 0:03:48 ER That's right. Well yes. On balance that's, that's absolutely correct. 0:03:54 AS Yeah I mean obviously the town needs Baringa, the surgeons need Baringa so we, I think we all want Baringa to stay there. I don't think anyone would like to see Baringa go. 0:04:06 ER Oh sure and it won't. 0:04:09 AS No it won't. 0:04:10 ER No it won't because you know we have a sustained approach to growing the business but we don't want to lose you. 0:04:18 AS And I don't want to lose the relationship with Baringa either. Ummm, if - I mean I don't know which parts, apart from colonoscopies obviously quite profitable for Baringa and I do a lot of colonoscopies and Bill Ross does a lot of colonoscopies so the two of us probably do the vast bulk of the colonoscopies. 155 Immediately after the conversation, Dr Sutherland sent an email to Dr Lim and Dr Joshi regarding that discussion: Elizabeth came to see me today. She essentially said that it is a ramsay decision not Baringa. I didn't get a clear answer from her. She talked about balance between day procedures and major surgery. I pointed out that some surgeons are far less efficient with their time and perform less day procedures than I do but they are allowed to continue. So it is not just balance. What was the content of your discussions? Has there actually been a threat. 156 It is evident from Dr Sutherland's question at the end of this email that he did not think that Mrs Ruthnam had threatened him in the 28 August 2015 conversation. That is consistent with Dr Sutherland's later acknowledgment to Dr Joshi and Dr Lim that "saying that she has threatened may be a bit strong because she has been cautious with her language (with me anyway)…". Dr Sutherland was cross-examined at some length regarding this email. It was put to him that if he himself had felt threatened by Mrs Ruthnam, he would have told his colleagues that in the email. He said that while there was no specific threat nevertheless, when viewed in context, he saw Ms Ruthnam's logic about balance in Baringa's work as making no sense and was simply a made up concept to justify what was going on. When he was again asked why he did not tell his colleagues that he had been threatened he said that although that was not in the email he told them later. When he was again asked why he did not put it in the email he said that he felt threatened but it was not explicit. Dr Sutherland said that he believed that he told Dr Joshi later that he had been threatened. He could not recall the circumstances other than to say that he may have bumped into him in the corridor. When pressed even further as to why he did not put it in the email that he felt that he had been threatened, Dr Sutherland said that he was worried that he was "over interpreting things". I did not find this part of Dr Sutherland's evidence to be convincing. 157 Although I found Dr Sutherland generally to be a truthful and responsive witness, I have reservations about other aspects of his evidence. For example, his initial claim that his file note was "essentially verbatim" with the sound recording of his conversation with Mrs Ruthnam on 28 August 2015 was not accurate. Dr Sutherland acknowledged that the reference in his file note to "stopping main theatre cases" were not words that had been spoken by Mrs Ruthnam. He said that it was a "poor choice of words" when he wrote the file note. I reject this explanation. It is more likely that Dr Sutherland wanted to embellish what Mrs Ruthnam had said. As the transcript of the sound recording reveals, what Mrs Ruthnam said was that if a doctor chooses to take a part of the business away "the major lists that our surgeons would have would no longer be guaranteed because we need that balance". In the context of the ACCC's pleaded case in this proceeding, there is a significant difference between "stopping main theatre cases" and major lists no longer being guaranteed. 158 Returning to the chronology of events, on 1 September 2015, Mrs Ruthnam sent an email to Mr Passmore which referred to her discussion with Dr Sutherland on 28 August 2015: Competition: well speaking to all our surgeons (still in progress) has been enlightening. Dr Joshi and Dr Lim have targeted the high turnover fast paced day surgery VMPs. They really want the scopes. Their business model will include very strong marketing to uninsured patients and marketing to doctors by sharing the facility fee. There is still no DA but the plans are for a 2 theatre day surgery. In the main I am finding both a strong loyalty to Baringa and an aversion to be going into business with doctors who are perceived as having 'shonky' standards about business. However as we know money talks and the attitude may change. There are a couple of VMPs who would admit to an interest if it was in the best interests of their patients. The only one I am concerned about to date is our colorectal surgeon & endoscopist Dr Andrew Sutherland. I saw Andrew on Friday. He has been approached and was honest about his interest. He wants better equipment, more scope access and the ability to make a passive income by being an investor. He is also attracted to easy access to a reasonable self funded rate. It was all very amiable and having been told what our deficiencies were (buying a new scope every year is obviously not enough) I asked him what he wanted in general from work. He wants to spend more time with his family and ideally he would like to work private-only but due to Baringa's lack of an ICU he finds this impossible. He hadn't read his VMP newsletter last week announcing the endovascular service and the related upgrade of our SCU to ICU. He had been very generous with his time in meeting me on a Friday afternoon when he was still seeing patients and he agreed we could meet again and further discuss him having a greater role at Baringa. He said he had not yet finally committed to the competitor project. Andrew has accepted an invitation to dinner on Thursday. 159 The ACCC submitted that the concept of "balance" was concocted by Mrs Ruthnam after she was told that she could not take the direct approach which it claims she had taken with Dr Joshi. It referred to a report prepared by Mrs Ruthnam as CEO at the start of September 2015 in which Mrs Ruthnam wrote: • Competitor developments – 1:1 meetings ongoing with all surgeons regarding competitor developments. Our position discussed i.e. that we require a balance of major and minor surgery and we will continue to pursue this strategy of requiring this balance. Generally well received. Colorectal surgeon Dr Andrew Sutherland may invest in new day surgery – ongoing discussions re meeting his needs to stay at Baringa. 160 The ACCC submitted that there was "overwhelming evidence" that the strategy was "crafted by Mrs Ruthnam after the conversation with Dr Joshi on 25 August 2015 and prior to the conversation with Dr Sutherland on 28 August 2015". 161 The ACCC submitted that, for the following reasons, the Court should find that the conversation which occurred on 28 August 2015 was as pleaded at [108] of the FASOC. 162 First, Mrs Ruthnam repeatedly referred to not wanting to "lose" Dr Sutherland. The usual meaning of that phrase is that Dr Sutherland would be "lost" to Baringa – he would no longer be working there. Dr Sutherland had just told Mrs Ruthnam that he still planned to bring his in-patient surgery and some of his day surgery to Baringa. The ACCC contended that there was no logical reason that Dr Sutherland would be "lost" to Baringa, unless Mrs Ruthnam was indicating that he would no longer be welcome at Baringa once he took day surgery elsewhere. 163 I do not accept that submission for the reasons set out at [143] and [144] above. 164 Secondly, the ACCC relied on the fact that Dr Sutherland's immediate response to Mrs Ruthnam's first statement that "we don't want to lose you" was "And I don't want to lose the relationship with Baringa either". The ACCC submitted that Mrs Ruthnam did not contradict Dr Sutherland's understanding that she was saying he would lose his relationship with Baringa and said that Dr Sutherland pointed out the illogicality of Mrs Ruthnam's suggestion that he would be "lost" without any satisfactory response. Dr Sutherland said: Certainly the bowel resections would be going home well before national and state averages and all that sort of stuff so presumably there's some profit margin in those and what I – I wouldn't like to see some sort of spiteful type thing where if you've taken a bit of the work away, we'll just wipe you off altogether. 165 The ACCC submitted that this was a clear reference to being stopped from working at Baringa. If Mrs Ruthnam's message was merely that priority would be lost, the natural answer to this was to respond to say "no, of course not, you would still be able to come to Baringa, but we would need to assess your profitability against other surgeons", or something to that effect. Instead of such a response, Mrs Ruthnam did not address the issue, so contended the ACCC. 166 I reject that submission. It sits uncomfortably with what Dr Sutherland said in his email dated 10 September 2015 which he sent to Dr Joshi and Dr Lim shortly after his conversation with Mrs Ruthnam on that day. The email refers to the issue of "balance" which Mrs Ruthnam had previously raised with Dr Sutherland in their conversation dated 28 August 2015. Dr Sutherland told his colleagues that, based on what Mrs Ruthnam told him, there was an implication that he could continue to work at Baringa but that he "may lose theatre time" and that if "this was the case then there would not be an issue". Mrs Ruthnam described the 10 September 2015 email as a "rehash" of what had been discussed on 28 August 2015. I accept her evidence. 167 Thirdly, the ACCC submitted that if it was the case that Mrs Ruthnam saying was that if Dr Sutherland brought less work, he would lose priority, there would be nothing unusual about that. For that reason, it contended that it is difficult to understand why such a conversation would be a "very very painful thing" for Mrs Ruthnam to tell Dr Sutherland (see transcript of the recording at [154] above). The ACCC submitted that it was painful because Mrs Ruthnam was actually communicating that he would no longer be welcome at Baringa. 168 I do not accept that submission. Taking into account all of Mrs Ruthnam's evidence it is plain that she had a special relationship with Dr Sutherland and held him in high regard, possibly because of the valuable contribution which his day surgery and in-patient work brought to Ramsay. In my view, the reference to the conversation being a "very painful thing" refers to Mrs Ruthnam's regret that there would be any variation or adjustment in the strong relationship which she had with Dr Sutherland. Mrs Ruthnam's desire to maintain or even grow that professional relationship with Dr Sutherland to Ramsay's advantage is reflected in her discussions with him on 28 August 2015 and subsequently as to what Ramsay could do to further support Dr Sutherland in his medical practice at Baringa. 169 Fourthly, the ACCC submitted that the "balance" requirement would only have made economic sense if in-patient procedures were less profitable to Ramsay than day surgery procedures. It claimed that Mr Gray and Mrs Ruthnam both gave evidence that this was not the case. The key to profitability for Ramsay was utilisation of lists, not what type of procedure was carried out, so submitted the ACCC. 170 I reject that submission. In cross-examination, Mr Gray said that there was no general rule in Ramsay that day surgery was not as profitable as in-patient surgery, but he added that "it's quite a complex and intricate matter". Mr Gray then reaffirmed that, rather than generalising about the respective profitability of day surgery or in-patient surgery, it was necessary to look at the particular procedure. When further pressed as to whether the average profitability of day surgery procedures and in-patient procedures were basically the same, Mr Gray appeared to accept that proposition when "considered holistically", but he then immediately added that "but even service by service it is way too complicated". Mr Gray then confirmed that at least 80 percent of in-patient procedures for Ramsay were profitable for Ramsay at that time. When then asked whether the 80 percent figure broadly applied to day surgery procedures, Mr Gray responded by saying that "would be my similar guess, yes". When Mr Gray was then asked in cross-examination whether, from a commercial viewpoint, Ramsay would welcome a surgeon who utilised a full list at Baringa or CHDS and the list was filled only with in-patient procedures, Mr Gray responded by saying that there are "other complex limitations, but assuming you're not interested in the other limitations, then yes". He then explained those other limitations as relating to the fact that if everyone did entirely in-patient work, "you would run out of beds to accommodate them, and therefore they wouldn't be able to fill their – like, to complete their lists, which would not necessarily be welcome". This is consistent with Mrs Ruthnam's statements that Baringa needed to have a balance in the mix of day surgery and in-patient procedures. 171 It should be noted that when the Court asked Mr Gray to explain what is meant by the expression "major list", he said it referred to a list where a surgeon does their "high acuity cases", which involves higher complexity and that this could also include a mix of in-patient and day surgery cases. 172 Nor do I accept that Mrs Ruthnam gave evidence to the effect as asserted by the ACCC regarding the respective profitability of day and in-patient surgery. The assertion is not supported by the ACCC's reference to Mrs Ruthnam's evidence in her s 155 examination. Mrs Ruthnam agreed there that at a general level that Ramsay was most concerned with theatre list utilisation rather than whether the procedures were major or minor. However, that agreement did not go so far as to say that the mixture of day and in patient surgeries was commercially irrelevant. As Mr Gray explained, there are other complex limitations which affected profitability. There is no basis for any suggestion that the mixture of day surgery and in-patient work was irrelevant to these issues. 173 I consider that the evidence Mrs Ruthnam gave in her s 155 examination is supported by what she told Dr Sutherland on 28 August 2015 (see the extracts at [154] above). She told him that the day surgery "doesn't necessarily subsidise a big part of the business" but that Ramsay's preference is that surgeons do a mix of day surgery and in-patient work. She further explained that this was not only because of financial reasons, but there were "organisational reasons" as well. It is evident from the transcript of the sound recording that Dr Sutherland understood Mrs Ruthnam to say that if colonoscopies (which were normally done as day surgery and formed an important part of Dr Sutherland's practice) were taken away "then the other surgery may not be sustainable", to which Mrs Ruthnam responded by saying that, on balance "that's absolutely correct". 174 Mrs Ruthnam's reference to there being "organisational reasons", as well as financial reasons, for the need to have a balance between day surgery and in-patient surgery is consistent with what she said on this topic in her s 155 examination, as set out at [175] below regarding theatre list utilisation. 175 The transcript of Dr Sutherland's recording of the conversation on 28 August 2015 is broadly consistent with the evidence Mrs Ruthnam gave in her s 155 examination when she was asked to define the message which Mr Passmore asked her to give to the surgeons. Her description of that message was as follows: MRS RUTHNAM: So, the message was doctors do both - some doctors do only day procedures. Opthalmologists would normally only do day procedures, so they're in a slightly different category. Other surgeons usually do minor surgery and major surgery, the minor surgery being either in a day facility or in a hospital that admits the patient just for the day. So some of our minor surgery is done in our major theatres. So there is an effect not only on our numbers, so there's an effect on our theatre lists, which are regularly allocated and reviewed six-monthly. So there would be an effect of this, and I was asked to communicate to the doctors that the effect of the change in our list may not be to their advantage. 176 Mrs Ruthnam then responded to a subsequent question regarding the substance of what she agreed with Mr Passmore to say to the doctors as follows: MRS RUTHNAM: Just what I said before - that we should try to establish who's involved, why are they involved, is it because of some deficit on our part, whether it's staff or equipment or space or access to theatre lists, as Dr Sutherland had stated. And to say - I did state to the doctors that I wasn't obliged to have this conversation, but I felt that it was a fair thing to do to say that there would be a consequence to them working in two or three different facilities at the same time, and it would have an effect on our business and that we would do those things and reorder our theatre lists and recruit to our losses. Those were actually the terms that I used. 177 Finally, Mrs Ruthnam gave the following explanation of how she told surgeons that their access to the current allocation of theatre time could change: MRS RUTHNAM: No, it's in principle correct, but it depends on the surgeon. So different surgeons - some surgeons do only day surgery, like predominantly the ophthalmologists, and others do a mixture of major surgery and minor surgery. Sometimes the minor surgery is done at Coffs Harbour Day Surgery, like plastic surgery, and then the major surgery - for some other surgeons the minor surgery gets mixed in with the major surgery on our theatre lists. So it's a four-weekly cycle of theatre lists, and every session's got a doctor's name on that. And I review the utilisation of the theatre list six monthly. So I would say – and all the doctors know that I do this - well, the people who have their time changed. So people who over-utilise the theatre lists – they've got waiting lists, they're asking for more lists – I give them more lists, and for doctors who're using, let's say less than 50 per (sic) of their operating time, I give them fewer lists. So I might give them a fortnightly list instead of a weekly list. So there is a natural consequence, as part of our normal operating practices, where that would be disrupted. So because some of the minor surgery gets done in our main theatres, so for the surgeons who are doing minor and major cases on the same list, obviously their lists would decrease. In fact, if surgeons pulled out work there would be a reworking of the theatre lists so they may not get the same access into those prime lists that they have now because we would recruit. So that's my job to, as a CEO, keep the business buoyant. So let's take urology as an example. We've probably got about 1.5 urologists in Coffs Harbour. In Port Macquarie down the road, our sister hospital has double the number of urologists. So we're always looking at what's the tipping point, at what point is there enough work for different specialties to recruit another urologist. So if I lost a big chunk of urology work and you get left with less than 1.5 urologists, I know that there's a huge market share there and I would recruit another urologist. So that also would have an effect on - but that's not a threat; that's a normal consequence of the business. So when doctors work less - whether they're winding down to retirement or taking the work elsewhere - we need to look at replacing and keeping our theatres busy. MR GHALI: …what is the consequence on a doctor if they were to take the work otherwise scheduled in your facilities elsewhere? What is the actual consequence? … MRS RUTHNAM: Is that they may not have the same number of lists and they may not have the same day to operate on. That would be a consequence. Conclusion 178 For these reasons, I find that the ACCC has failed to make good its pleading in [108] of the FASOC. It has not established that words to the effect pleaded there were said by Mrs Ruthnam to Dr Sutherland. I repeat what is said above in Pt A regarding s 140 of the Evidence Act. (c) Conversation between Dr Joshi and Mr Sims on 3 September 2015 179 The next conversation which is claimed to involve contravening conduct involves Dr Joshi and Mr Sims on 3 September 2015, which took place during a dinner at the Horizons Restaurant, in the Opal Resort at Coffs Harbour. 180 Mr Sims did not recall the identity of the practitioner to whom he spoke to, but he now believed it to have been Dr Joshi. He recalled exchanging pleasantries with the practitioner and discussing the difficulties of running day surgeries and hospitals in general, specifically how difficult it is to get agreements from health funds, including the licensing and regulatory requirements to run such facilities. I accept that evidence. 181 Dr Joshi's evidence of the relevant part of conversation was as follows: …He responded after that by saying that day – the day surgery business is a – or the private hospital business, rather, is a difficult – is difficult financially to make viable. He mentioned specific issues with – that it is not particularly profitable, that it is difficult to get the higher rates required from health funds in order to make it profitable. He mentioned specifically second tier rates that apply to hospitals that don't have agreements with health funds in order to get the – which results in reduced remuneration, reduced profitability. He – and then I explained that, well, that I had heard that there are day surgery facilities that are – that do exist that are profitable. He then turned to the issue of talking about whether a doctor working at – doctors working at more than just a Ramsay facility. He then explained that Ramsay does not have a problem with a doctor working at a Ramsay hospital and other hospitals, but he – he does have an issue with a – with a doctor working at a Ramsay hospital and a hospital where the doctor has an interest in that hospital – a financial interest. Then he went on to describe a situation in Hurstville Community – Hurstville Community Hospital in Sydney. … The – he brought up in some detail about how the doctors at Hurstville – or who had set up Hurstville Community initially, wished only to perform day surgery at that competing facility. He said that after that hospital had been created that Strathfield Private, which was the Ramsay facility, was revoking the privileges of the surgeons involved in creating Hurstville Community. Some of those surgeons were urologists, so I knew them. The – he then went on to detail the court case involved with that, and said that the – the doctors involved with Hurstville Community tried to keep operating at Strathfield Private as well for their more complex cases. He – Danny Sims then said that the judge asked questions about the nature of their work at Strathfield Private and he said that, as Ramsay owned the facilities, as Ramsay provided the staff and employed the nursing staff directly in those facilities, that the doctors don't have any particular right to that operating time at Strathfield Private. And apparently, as he detailed that he was actually present in the courtroom at that time, he explained that the judge ended up finding that they couldn't revoke their privileges immediately, that there would have to be some delay, so three or six months, and then they would be able to institute that change and they would no longer be able to work at Strathfield Private and they would have to do all their work at Hurstville Community. I also knew that Hurstville Community did have facility to look after people overnight, or longer, so it seemed plausible to me that that had occurred. I then explained that in Coffs Harbour there is no other facility, there is no competing facility, and that if there was a day surgery, it would be just a day surgery, and not catered to more inpatients – to inpatients. And then he explained that he could not accept or Ramsay could not accept the situation where there was a competing facility down the road and he used the expression "creaming it down the road" and he – and doing their more complex work at Baringa Private Hospital that required overnight stay or longer. And he repeated the phrase "creaming it down the road" to say no, that that can't happen. I then became again uncomfortable about the way the conversation was heading. 182 On 10 September 2015, Dr Joshi referred to part of his conversation with Mr Sims in an email he sent at 7:34 am to Dr Sutherland and Dr Lim in which he said: I think conflict of interest will be used as the excuse as Danny Sims specifically said it would be if I were an investor that I would be excluded from Baringa. 183 Ramsay submitted that Dr Joshi's account of the conversation with Mr Sims is internally inconsistent: it is implausible that Mr Sims would tell Dr Joshi about the difficulties of operating day surgeries, before telling him that he and Ramsay could not abide by a competing facility "creaming it down the road". A day surgery which is incapable of obtaining agreements from health funds was not capable of "creaming it down the road". 184 Ramsay also submitted that, in any event, Dr Joshi clearly understood that the message was being conveyed to him related to a surgeon who had a "financial interest" in a competing day surgery, as opposed to someone who merely operated at that facility. 185 The ACCC emphasised that Mr Sims stated in cross-examination that he did not "recall much about this conversation at all". It also submitted that if the conversation was limited to the matters which Mr Sims does recall, Dr Joshi would have had no reason to write the email on 10 September 2015. It is difficult to understand that submission. Dr Joshi's email dated 10 September 2015 was sent to Dr Lim and Dr Sutherland in the context of a letter which Dr Lim had drafted with a view to sending it to the Ramsay Board. Dr Joshi sent a further email later that same day at 16:05 pm in which he suggested several changes to Dr Lim's draft letter of complaint to the Ramsay Board. Significantly, there is no mention in Dr Joshi's amendments to any part of his conversation with Mr Sims. 186 For the following reasons, I do not accept Dr Joshi's account of the conversation he had with Mr Sims on 3 September 2015 and I prefer Mr Sims' account. (a) I repeat what is said above at [137] regarding the reliability of Dr Joshi's evidence and the reservations I have with it by reference to the four matters there described. (b) As mentioned above, if Mr Sims told Dr Joshi the things that he claims as set out in his oral evidence in chief at [181] above, it is difficult to understand why Dr Joshi did not suggest that the draft letter to the Ramsay Board, which he reviewed and suggested some changes to only a week after he had met with Mr Sims, should also refer to their conversation on 3 September 2015 having regard to what Dr Joshi claims Mr Sims said. (c) I found Mr Sims to be a frank and truthful witness. He candidly acknowledged that he did not have a good recollection of his conversation with Dr Joshi which is perhaps unsurprising given the circumstances in which it occurred (as noted above at [179] and [180]). In cross-examination, Mr Sims denied saying the things as alleged by Dr Joshi. Mr Sims acknowledged, however, that it is likely that he would have said words to the effect that it is difficult financially to make a private hospital business viable, that it is not particularly profitable and that it is difficult to get the higher rates required from health funds in order to make it profitable. When Mr Sims was asked whether he recalled saying that Ramsay "does not have a problem with a doctor working at a Ramsay hospital and other hospitals", he said that he did not deny saying it but that he could not recall saying that. When it was then put to Mr Sims that he told the doctor to whom he was speaking that he did "have an issue with a doctor working at Ramsay Hospital and a hospital where the doctor has a financial interest in that hospital", he categorically denied saying that. Mr Sims also said that he did not recall any discussion about Hurstville. As noted, it was evident that Mr Sims did not have a strong recollection of his conversation with Dr Joshi on 3 September 2015. He could not recall Dr Joshi's name. Nevertheless, Mr Sims impressed me as an honest and responsive witness. He candidly acknowledged where his recollection was poor and I accept his evidence concerning his denial of having said that there was an issue with a doctor working at a Ramsay Hospital and also at another hospital where the doctor has a financial interest. I also accept his denial that he told Dr Joshi that Ramsay could not accept the situation where there was a competing facility "creaming it down the road" and the doctors doing more complex work at Baringa. (d) Finally, I do not accept the ACCC's submission that the principle in Jones v Dunkel [1959] HCA 8; 101 CLR 298 should apply, such that the Court should prefer Dr Joshi's account over that of Mr Sims concerning their 3 September 2015 conversation because of Ramsay's failure to call Mr Passmore, who was seated nearby and, according to Dr Joshi, joined at least part of the conversation. The principle was described by Heydon, Crennan and Bell JJ in Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361 at [63] in the following terms (footnotes omitted): The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party's case. That is particularly so where it is the party which is the uncalled witness. The failure to call a witness may also permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn. These principles have been extended from instances where a witness has not been called at all to instances where a witness has been called but not questioned on particular topics. Where counsel for a party has refrained from asking a witness whom that party has called particular questions on an issue, the court will be less likely to draw inferences favourable to that party from other evidence in relation to that issue. That problem did not arise here. The plaintiff's counsel did ask the plaintiff relevant questions. 187 I do not consider that the principle has any application here where, notwithstanding that Mr Passmore apparently interjected himself in part of the conversation between Mr Sims and Dr Joshi, it is left unclear whether he overhead all relevant parts of the conversation. Conclusion 188 For these reasons, I find that the ACCC has failed to make good its pleading in [110] of the FASOC. It has not established that words to the effect pleaded there were said by Mr Sims to Dr Joshi. I repeat what is said above Pt A regarding s 140 of the Evidence Act. (d) Conversation between Dr Summersell and Mrs Ruthnam on 8 September 2015 189 Mrs Ruthnam had a conversation with Dr Summersell on 8 September 2015. Dr Summersell had come to see Mrs Ruthnam to complain about something. 190 Dr Summersell's evidence was that their conversation included the following exchanges: Ruthnam: Are you involved in the proposed day surgery unit? Summersell: No, I am not involved and I have not heard of a – a unit being – being planned. Ruthnam: If you were involved in the proposed day surgery unit and operated on patients there you would lose your ability to operate on other patients at the – at the Ramsay facility. Summersell: I'm not involved in any proposed day surgery unit and I haven't heard of it before. 191 Mrs Ruthnam's evidence of the conversation was as follows: I said to him words in substance as I said to Dr Joshi, that I had heard of a proposed Day Surgery in Halls Road in Coffs Harbour. I asked if he had any interest or involvement in that. I believe he said he didn't, to the best of my recollection, but, nonetheless, I told him that I was speaking to all the surgeons who performed day surgery and that there would be an effect on their lists, their allocated theatre lists, should they choose to do that, and I would recruit doctors to the ..... of any losses. Are you able to recall anything he said to you -- Dr Summersell came in to complain about something, and I don't recall what that was, and I don't recall any response except that I believe that he said he wasn't involved or interested. 192 The ACCC submitted that Dr Summersell's account should be preferred for the following reasons. First, Dr Summersell explained why he remembered the conversation clearly, namely because he saw it as an unusual conversation to have. This is to be contrasted with Mrs Ruthnam's position because she was speaking to various surgeons around the same time and it would be unsurprising if her recollection of different conversations blended into each other. 193 Secondly, Dr Summersell's evidence was unwavering and he demonstrated a close attention to detail. 194 Thirdly, there is no reason to doubt the accuracy of Dr Summersell's recollection in circumstances where, whatever criticisms are made of other witnesses, none apply to Dr Summersell. The ACCC submitted that Dr Summersell's evidence did not alter during his cross-examination and it reflects what he told the ACCC in February 2016. 195 Fourthly, the ACCC submitted that Dr Summersell's account is supported by the file note of his conversation with Mrs Ruthnam in March 2016, where he recorded the following: I brought up the previous time we had spoken last year and her statement that if a surgeon operated at a proposed new day surgery center then they would not be welcome at baringa and would loose admitting rights she said she must not have explained it in adequately. Today she said that if a surgeon operated at the proposed day surgery center then they would be low on the priority list for theater time at baringa, and that baringa would actively recruit for alternative surgeons in that specialty to get someone who would operate on all of their cases at baringa, today she said no one would be decredentialed because of it. 196 Ramsay submitted that, in substance, Mrs Ruthnam said the same thing as she had said to Dr Joshi. She asked if he had heard of a proposed day surgery in Halls Road in Coffs Harbour, and whether he had any interest or involvement in that. Dr Summersell said that "he wasn't involved or interested". Nonetheless, she told him that "I was speaking to all the surgeons who performed day surgery and that there would be an effect on their lists, their allocated theatre lists, should they choose to do that, and I would recruit doctors to the ….. of any losses". 197 Dr Summersell's account differs in that he says that Mrs Ruthnam then went on to say that if he was involved in the proposed day surgery unit and operated on patients there then he would lose any ability to operate on other patients at the Ramsay facility. 198 I do not accept Dr Summersell's account of what Mrs Ruthnam told him on 8 September 2015 for the following reasons. 199 First, as Dr Summersell said, he was "surprised" that Mrs Ruthnam raised the issue with him because the "vast majority" of his procedures are in-patient procedures, not day procedures. Indeed, given his very small volume of day surgeries, Dr Summersell had no real interest in using a proposed day surgery at all. In particular: (a) the file note of his discussion with the ACCC on 5 February 2016 recorded that "most of [Dr Summersell's] patients are not day patients and … while he may use a new facility if it opened, he was not seeking any change"; (b) Dr Summersell admitted that he was "not currently interested in the proposed new day surgery"; (c) in an email, Dr Joshi records Dr Summersell telling him that he "would not use" the new day surgery; and (d) it appears that Dr Summersell was not even approached by Dr Lim or Dr Joshi to be a signatory to the email later sent by a group of surgeons to Mrs Ruthnam. 200 I think it most unlikely that Mrs Ruthnam would have said the things attributed to her by Dr Summersell, particularly as his account is inconsistent with the conversation Mrs Ruthnam had had with Dr Sutherland only a few days earlier and in circumstances where I accept her evidence that she gave the same message to all the surgeons with whom she spoke. That is supported by the evidence she gave in her s 155 examination. 201 Secondly, and significantly, Dr Summersell accepted in cross-examination that he had real difficulties in recalling the precise words used in the conversation: "Would you agree it's hard to recall with precision the words which are actually used when she opened the conversation? --- The exact words, yes." "Yes, because your recollection is just not good enough for that degree of precision. You agree?---Yes." "And to suggest you have an accurate recollection of it would be misleading, wouldn't it?---I don't have a word-for-word recollection of it." "Well, as you sit here now you – do you agree, you don't have a recollection of the exact words Mrs Ruthnam used in the conversation you had with her on 8 September?---As I said before, I don't have a recollection of the exact words." 202 That may be because, as explained above, the conversation had no relevance to Dr Summersell's practice. 203 Thirdly, Dr Summersell accepted in cross-examination that his conversation with Mrs Ruthnam on 8 September 2015 was to the same effect as his later conversation with her on 8 March 2016, just put in a more polite way: So the effect of what she told you on 8 March was the same effect as she told you in September 2015?---I said it was a more polite way of basically saying the same thing. You see what you said to the court earlier today is that in March 2016 Mrs Ruthnam said the same thing but in a more polite way?---Yes. Right. When you gave that answer you meant it, didn't you, as a truthful answer?---Yes. Right. And what I want to suggest to you is that last paragraph on your note represents what you regard as her telling you the same thing she told you in September but in a more polite way?--Yes. Right. And beyond that you're not able to articulate what precise words she used in September; do you agree?---Yes. 204 I strongly prefer Mrs Ruthnam's account of what she said to Dr Summersell. I need not repeat why I found her to be a truthful and honest witness. I also accept her evidence that she gave the same message to each of the surgeons with whom she spoke. I consider it most unlikely that she would give Dr Summersell a different message to that which she had given to Dr Sutherland only a few days earlier, the precise terms of which are incontestable because of the transcript of Dr Sutherland's sound recording. Mrs Ruthnam has consistently said that she gave the same message to the surgeons, including during her s 155 transcript. I accept that evidence. Conclusion 205 For these reasons, I find that the ACCC has failed to make good its pleading in [107] of the FASOC. It has not established that words to the effect pleaded there were said by Mrs Ruthnam to Dr Summersell. I repeat what is said above in Pt A concerning s 140 of the Evidence Act. (C) Other conversations with surgeons not said to involve contravening conduct 206 As noted, although the ACCC's pleaded case concerning the alleged contraventions was based on the four conversations addressed above, it also referred to other conversations which Mrs Ruthnam had with various surgeons, including the three particular surgeons, which conversations it says demonstrate that Mrs Ruthnam backed away from her initial threats. The ACCC submitted that these subsequent conversations involve a message being conveyed by Mrs Ruthnam to the surgeons involved that if they took some of their surgery to the new day surgery, the surgeon would fall lower on the priority for lists at Baringa. In effect, the ACCC submitted that the message which Ramsay had conveyed to surgeons in the earlier conversations referred to above changed. The ACCC submitted that the non-contravening conversations are also relevant to Ramsay's purpose. 207 I will now address each of those non-contravening conversations. (a) Conversation between Dr Sutherland and Mrs Ruthnam on 10 September 2015 208 Prior to the telephone call between Dr Sutherland and Mrs Ruthnam on 10 September 2015, Mrs Ruthnam had sent the following email to Dr Sutherland on 4 September 2015, being the day after the dinner meeting involving various surgeons and representatives of Ramsay at the Horizons Restaurant: Good afternoon Andrew Thank you for coming along to the dinner last night. It's a great way for the Ramsay senior executives to keep abreast of the thoughts and feelings of regional specialists. I have thought a lot about our discussion last Friday. We can address some of your issues immediately as they are already in the pipeline. As for the privacy screens, we waited to change the patient flow in the DSU. This means the privacy screens will be installed within the next few weeks. As to your request for more theatre time in the endoscopy suite, you may have a new permanent allocation of Thursdays of week 3. This will commence on Thursday 29th October. No matter what your future is Andrew we are happy to make these changes now. As discussed we have a plan to replace our Olympus equipment in minor theatre. I will be honest and say that an investment of $ 600,000 may not be justified if we were to lose your work (and the work of other endoscopists). I would like to discuss this with you and I would also like to explore the idea of you working predominantly in a private-only environment. When we establish the endovascular suite and Dr Tawadrous and Dr Clarke relocate to this operating environment we will have more available lists in our main theatres. As mentioned during our discussion, a Level 1 ICU is in the planning and at this stage we are looking at compliance issues in regard to the NSW Health Ministry licencing guidelines. We may have to reduce the bed numbers there to 3 in the first instance. We plan to have a full time Nurse Unit Manager with advanced cardiac and anaesthetic skills and we also intend to appoint a Director of ICU. I know this sounds a bit grand but we have made a decision to do it well. I understand your time is precious, especially your time with your family but when you are free I would like to talk again. Next week I will be away from Wed-Fri at the national Ramsay conference. After (or before) that I will be available at any time to meet you. I am happy to meet before or after work. Just let me know. 209 Dr Sutherland responded to Mrs Ruthnam's email on the same day: I do want to catch up with you about this. I'm sure that you realise it is not about you and not about Baringa. There are some issues that I would like addressed - and you have plans to address them - but I enjoy working at Baringa and I want to support Baringa. I am on call for a week from the 11th and then away for a week after that (but perhaps coming back early to do an extra case on the 25th). 210 On 10 September 2015, Dr Sutherland sent an email to Mrs Ruthnam regarding another discussion: I had hoped to speak to you about the day surgery etc. I realise that you are away but if you are free in the evening I don't mind a call. 211 Mrs Ruthnam responded: Hi Andrew. Am at annual Ramsay conference but will call after last session. Eliz 212 Mrs Ruthnam and Dr Sutherland spoke by telephone on 10 September 2015, when Mrs Ruthnam was at the Ramsay conference. Mrs Ruthnam described it as, "… a rehash of what we had discussed before". I accept that evidence. There was a discussion about the balance Ramsay may still have if Dr Sutherland removed only half of his scope list (gastroscopies and colonoscopies). 213 Dr Sutherland asked Mrs Ruthnam why she would not like him to leave. They discussed the staff in the operating theatres in the surgical ward, and Mrs Ruthnam's concerns about the staff being destabilised at that time because they were thinking, "If we have less work, would they have no job, would they be employed in a new day surgery?". Dr Sutherland went on to discuss about what he wanted, both personally and professionally, which was to have a balance in his life so he could spend more time with his children, and more operating theatre time, which had already been discussed and which had been given. They also discussed Dr Sutherland's desire for new equipment. Dr Sutherland said that he wanted to have a financial interest in a day surgery so he could make what he described as "passive income", but said that if Baringa had an intensive care unit, he would come to Baringa. They discussed again his plan to leave the public health system and work in the private sector only. 214 Dr Sutherland sent an email to Dr Joshi and Dr Lim shortly after this conversation, on 10 September 2015: I raised the issue of balance that she had discussed initially. The balance between lucrative day cases and less lucrative major surgery and I pointed out that I could easily take half of my scopes and still be more profitable than some other surgeons. She said that theatre time would preferentially be given to those surgeons who essentially provided the best balance and that they would aim to recruit surgeons to utilise the theatres. The implication being that I could continue but may lose theatre time. If this was the case then there would not be an issue. I am sure that I would have enough theatre time because there will be more than enough once the 4th theatre opens and they won't want it to stand empty. I said I hoped a friendly arrangement could be negotiated but she didn't think it likely because of the Rasay (sic) position and indicated she thought it should go to the ACCC to clarify the situation. 215 As mentioned, the conversation on 10 September 2015 is not said by the ACCC to involve contravening conduct. Dr Sutherland's email sent shortly after he spoke with Mrs Ruthnam confirms what in any event is set out in the sound recording of their meeting on 28 August 2015, namely that she told him that preference would be given to surgeons who provided the best balance and that this was related to considerations of profitability. Conclusion 216 I see no reason to doubt the truth of Mrs Ruthnam's account of this conversation or of Dr Sutherland's summary of it in his email dated 10 September 2015, which broadly confirms Mrs Ruthnam's account. Importantly, Dr Sutherland did not claim that Mrs Ruthnam told him that he would lose all his major lists at Baringa if he took any of his day surgery away. Rather, consistently with Mrs Ruthnam's evidence, she told him that preferential theatre time would be given to surgeons who provided Baringa with "the best balance". I do not consider that this conversation on 10 September 2015 advances the ACCC's case. (b) Conversation between Dr Joshi and Mrs Ruthnam on 15 February 2016 217 Mrs Ruthnam had a periodic meeting with Dr Joshi on 15 February 2016. This was after Dr Joshi had first met with the ACCC on 5 February 2016. Prior to the meeting with Mrs Ruthnam, she sent an email to Mr Passmore noting that Dr Joshi was "[o]bviously still very upset at Ramsay's position re the security of his lists if he competes against us". 218 Mrs Ruthnam recalls Dr Joshi asking her on 15 February 2016 to reiterate the substance of the conversation that they had had on 25 August 2015. Mrs Ruthnam explained that for surgeons who choose to remove their minor surgery from Baringa, they could not rely on the same access to their current major lists, and that as a CEO of the business she would recruit to any losses of vacancy. That is, it was the same message that she had conveyed to him on 25 August 2015. 219 Dr Joshi sent a WhatsApp message to Dr Lim shortly afterwards: I had a chat with Elizabeth today. Basically she retreated from revoking privileges to being treated less well in terms of lists etc and looking at the profitability of what I bring there. This doesn't bother me because what I bring is still profitable. So we should proceed as fast as possible and see what Nexus is up to 220 Dr Joshi and Mrs Ruthnam met again on 25 February 2016. On 29 February 2016, Dr Joshi made the following note of their meeting in an email to Dr Sutherland: Meeting with me in my rooms. She brought up equipment (a new $250K laser for laser TURPs). I said it (sic) worth purchasing provided I will be allowed to operate and admit patients I need to use it on. She then clarified that surgeons working at another day surgery could continue at Baringa but may not be afforded the same priority to theatre lists (eg another urologist who brought all their work there would get better lists). This doesn't particularly bother me as long as there is some access for my bigger cases. I would hope the same applies for you... 221 Dr Joshi accepted in cross-examination that he understood from that conversation that if he took all of his day surgery to the new facility, he would not be given the same priority and preference as someone who kept all of their work at Baringa. Significantly, during the course of his resumed cross-examination on 3 December 2019, Dr Joshi accepted that the effect of what Mrs Ruthnam told him in February 2016 was that if he took his work away he would not be guaranteed the same lists as he had at the moment. This acceptance was made after Dr Joshi was recalled for cross-examination and had an opportunity to listen to the entirety of the sound recording made by Dr Sutherland of his meeting with Mrs Ruthnam on 28 August 2015. 222 The ACCC does not contend that this conversation constituted contravening conduct. Nor does it suggest that the conversation was to a different effect to the conversation that took place on 25 August 2015 by reason of Mrs Ruthnam's knowledge of the ACCC's investigation (which was in its infancy) in February 2016. Conclusion 223 I do not consider that this conversation assists the ACCC's case. (c) Conversation between Dr Summersell and Mrs Ruthnam on 8 March 2016 224 On 8 March 2016, Mrs Ruthnam met with Dr Summersell in Dr Summersell's rooms. The discussion occurred in the context of a dispute about an afterhours case of Dr Summersell's. The conversation took place after Dr Summersell's meeting with the ACCC on 5 February 2016. 225 Mrs Ruthnam gave evidence that, during this conversation, she reiterated what she had said to Dr Summersell previously, that is, should doctors take some of their work out of Baringa, she would replace it with recruited doctors, and that doctors would not rely on having their current lists. 226 Ramsay submitted that Mrs Ruthnam's evidence is consistent with Dr Summersell's file note of this conversation, which recorded: I brought up the previous time we had spoken last year and her statement that if a surgeon operated at a proposed new day surgery center then they would not be welcome at baringa and would loose (sic) admitting rights she said she must have explained it in adequately (sic). Today she said that if a surgeon operated at the proposed day surgery center then they would be low on the priority list for theater time at baringa, and that baringa would actively recruit for alternative surgeons in that specialty to get someone who would operate on all of their cases at baringa, today she said no one would be decredentialed because of it. 227 The ACCC submitted that during the course of her s 155 interview with the ACCC in May 2016, Mrs Ruthnam gave a similar account of her conversation with Dr Summersell on 8 March 2016 as is recorded in Dr Summersell's contemporaneous file note. It submitted that Mrs Ruthnam changed her position in her oral evidence when she said that the discussion commenced with Dr Summersell asking her to "reiterate" what she had previously said. Nevertheless, the ACCC maintained that there was a significant similarity between Mrs Ruthnam's May 2016 account and Dr Summersell's file note. It further submitted that, to the extent that Mrs Ruthnam now disagrees with the remainder of Dr Summersell's file note, her evidence should be rejected and preference should be given to Dr Summersell's contemporaneous note. 228 The ACCC submitted that the file note "demonstrates that so far as Dr Summersell was concerned, Mrs Ruthnam had said that if Dr Summersell took his day procedures to the new day surgery, he would not be allowed to operate at Baringa". I do not accept this submission. I prefer Mrs Ruthnam's account of what she told Dr Summersell on 8 September 2015. As noted above, I found Mrs Ruthnam to be an honest and truthful witness. In particular, I accept her evidence that she told him that doctors could not rely on having their current lists if they took their day surgery away from Baringa. For the reasons given above at [198] to [204], I do not accept Dr Summersell's evidence about what Mrs Ruthnam told him on 8 September 2015. I find that Mrs Ruthnam was simply being polite to Dr Summersell when, during their subsequent meeting on 8 March 2016, she responded to his recollection of what she had said to him back on 8 September 2015, as being a case of her having explained the situation to him inadequately. Conclusion 229 I do not consider that this conversation assists the ACCC's case. (d) Mrs Ruthnam's meeting with Dr Lim on 16 June 2015 230 A conversation between Dr Lim and Mrs Ruthnam took place at Dr Lim's offices in Rose Avenue, Coffs Harbour on 16 June 2015. 231 Mrs Ruthnam's purpose in meeting with Dr Lim was to address some issues raised about Dr Lim's conduct and to caution him that that conduct was upsetting staff. That conduct included offering CHDS staff employment at the new proposed day surgery, asking CHDS staff members' questions about how the equipment worked, taking photographs of the central sterilisation department and asking CHDS staff members about the dimensions of the central sterilisation department. 232 During the meeting, Mrs Ruthnam raised the new day surgery with Dr Lim. Dr Lim initially denied that he was involved in a new day surgery, but then admitted that the new day surgery was to be in Grafton, and said that there would not be a day surgery in Coffs Harbour until after Mrs Ruthnam had retired. They then discussed some equipment that Dr Lim had been trialling as a vitreoretinal surgeon. Dr Lim asked Mrs Ruthnam to purchase the machine for him, and Mrs Ruthnam said that she was not in a position to spend $300,000 on a machine that was only used about once a week to do vitreoretinal surgery. Dr Lim threatened to speak to the ACCC about Mrs Ruthnam's lack of enthusiasm about purchasing the equipment. Mrs Ruthnam said she was perfectly aware of the provisions of the competition law, and it was not anticompetitive to not purchase a machine, which by Dr Lim's own admission, he would not be using for very long because he admitted he was in the throes of setting up a day surgery in Grafton. Dr Lim became very angry and quite abusive. Mrs Ruthnam terminated the meeting, and Dr Lim asked her to see herself out. 233 Mrs Ruthnam's account of this conversation in her oral evidence in chief is supported by a contemporaneous note she took of the meeting. It is also supported by a contemporaneous email she sent to Mr Passmore which recorded the following discussion: Had a meeting with Dr Lim and we discussed his conduct at CHDS (offering jobs; requesting information; taking photographs). He says there is to be a new day surgery in Grafton and that was all he was referring to. When questioned about his plans in Coffs he became very defensive, offensive and completely denied any involvement. He did say when ruffled at one point that there may be plans for next year or the year after in Coffs but he later denied that too. He is very cross indeed that we are not going to purchase new vitreoretinal equipment or allow him to purchase it for use at CHDS and threatened to inform the ACCC. I did very gently but firmly inform his (sic) that all Ramsay hospital executives are very well aware of all legislation surrounding the ACCC and we always work within this. He is very cross and will start causing all sorts of trouble I'm sure ... 234 Mrs Ruthnam's account is further supported by her June 2015 CEO report, which included the following note: Competitor Developments (if any) - Dr Lim has been discussing his new day surgery openly at CHDS. He has been questioning staff, taking photographs, enquiring re dimensions of CSSD etc as well as offering staff employment. Visited by CEO to establish facts. Dr Lim responded that this discussion was all in relation to his proposed day surgery in Grafton (one hour drive north of Coffs Harbour CBD). Initially vehement denial of day surgery development on Coffs but eventually said it wouldn't happen this year. I stated that this was an issue of concern under our Facility Rules and Dr Lim had not declared a conflict of interest at MAC (standing item on agenda). I believe a perceived conflict of interest exists and Dr Lim should stand down from the MAC. Agreed. 235 Under cross-examination, Dr Lim accepted that he had no real recollection about the conversation: "I don't really remember what I told her or did not tell her about plans of a day surgery". However, he did accept that he had misled Mrs Ruthnam in various ways, including by denying any involvement in the new day surgery, by denying that he had taken photographs of Ramsay's facilities and by referring to a proposed day surgery in Grafton as a "diversion". Dr Lim even sent an email to Mrs Ruthnam the following day, stating: You guys are truly jumping at shadows. I'm not saying there will NEVER be another day surgery in Coffs Harbour but there's nothing in the works at the moment. There's a good chance you might retire before a new day surgery opens up in Coffs Harbour. 236 Under cross-examination, Dr Lim also accepted that his own account of the conversation in his evidence in chief was misleading. His initial evidence to the Court was that he mentioned getting the ACCC involved in the context of a discussion about how Ramsay had tried to stop people from setting up a day surgery in Coffs Harbour. In contrast, he accepted in cross-examination that this was incorrect, and that the ACCC had been mentioned in the context of a discussion about the purchase of new equipment: And the reference to the ACCC, the threat that – your reference in the conversation about reporting her to the ACCC related only to the vetreoretinal equipment, didn't it?---At that time. Yes. But you told the court, when you were asked to give your recollection of the conversation, that you threatened her in relation to the ACCC about another matter, didn't you?---I mentioned the ACCC in the conversation. She got very animated about it. It was obviously a sore point for her. But if you're asking me what was the report to the ACCC about, it was just a sentence. I threw it into a conversation. I hadn't reported her. I hadn't formulated my report. I didn't know what I was going to report her about. The only reference you made to the ACCC was in connection with a discussion about the equipment, wasn't it?---I'm not sure how to answer that question. HIS HONOUR: Well, truthfully?---Could you just repeat the question again … The only reference you made to – about the – potentially reporting something to the ACCC related to the matter of the equipment?---I cannot think of any other thing to report to her about at that time. 237 Furthermore, it was only well into his cross-examination that Dr Lim ultimately accepted that he and Dr Joshi were in a position of conflict by seeking to advance the day surgery proposal, whilst still having access to Ramsay's facilities: "Because you had a plain conflict of interest, didn't you?---I think we had a conflict of interest". For this reason, Dr Lim agreed to step down from Baringa's Medical Advisory Committee (MAC), in accordance with Ramsay's Facility Rules. Prior to the meeting, Dr Lim had failed to disclose his conflict of interest in meetings of the MAC on 25 February 2015 and 8 April 2015. 238 Dr Lim was not an impressive witness. If it is necessary to determine whose account of the 15 June 2015 meeting should be preferred, I would have no hesitation in fully accepting Mrs Ruthnam's account. I would not accept Dr Lim's evidence on this, or any other matter, unless it was clearly corroborated by other independent evidence. My impression is that Dr Lim did not hesitate to tailor his evidence whenever he thought it was in his own best interest to do so, regardless of the truth. I also find that from mid-2015, Dr Lim was anxious to have the ACCC involved in the matter. He demonstrated a willingness to overstate or even misrepresent what Mrs Ruthnam had said in order to maximise the possibility of ACCC intervention. 239 For completeness, it might also be noted that Mrs Ruthnam met with Dr Lim again on 31 August 2017. It is unnecessary to make any findings in respect of that meeting in circumstances where the ACCC does not allege that it involved contravening conduct, nor does it advance the ACCC's case in any other way. Conclusion 240 The conversation with Dr Lim does not assist the ACCC's case. Indeed, because Dr Lim was such a poor witness whose evidence I do not accept, the ACCC's case was diminished to the extent that it sought to rely upon any part of Dr Lim's evidence. (e) Conversation between Dr Ross and Mrs Ruthnam on 31 August 2015 241 In his oral evidence in chief, Dr Ross recalled that he was visited by Mr Passmore in November 2010. He said that he greeted Mr Passmore in the reception area and took him into his consulting room. After Mr Passmore sat down, he said that Mr Passmore lifted his chair and moved it towards him and said in a strong tone: "If you go ahead Ramsay will take that very seriously and your business arrangements with Ramsay will change very dramatically". This was a reference to Dr Ross's possible interest at that time in setting up a rival day surgery. Dr Ross said that he responded by telling Mr Passmore that he did not think that Ramsay could do that because it was anti-competitive. He said that he also told him that he was aware of what happened at St George Hospital previously. Dr Ross then gave oral evidence that it was his understanding that Ramsay Health had stopped a group of surgeons' admitting rights at St George Private because they had purchased Hurstville Community Hospital, which was in close proximity to St George Private, and they wanted to admit patients there. Dr Ross said that Mr Passmore did not react when he mentioned St George Private and that he (i.e. Dr Ross) had no further recollection of any further discussion at that meeting. He also described Mr Passmore's body language as showing "an attempt to intimidate" him, noting Mr Passmore's tone of voice, facial colour and frowning facial expression 242 Dr Ross also gave oral evidence in chief regarding his meeting on 31 August 2015 with Mrs Ruthnam, which occurred in her office. He said that she told him that "Ramsay takes a dim view of doctors who compete against them" and that Ramsay "would take every step possible to protect our business". As noted, the ACCC does not claim that this statement involved contravening conduct and it is notable that it falls short of any of the pleaded threats. 243 Dr Ross said that he responded to Mrs Ruthnam by saying that Ramsay couldn't threaten him as they did in 2010, which he explained was a reference to the meeting he had had with Mr Passmore in November 2010. 244 It should be noted that Ramsay objected to Dr Ross's evidence concerning his conversation with Mrs Ruthnam on the basis of relevance. It contended that the conversation was not relevant because it was not identified in the FASOC as giving rise to contravening conduct. I disallowed the objection on the basis that the conversation might have some relevance to the ACCC's claim that Ramsay adopted different strategies depending on whether or not it considered that a particular doctor was actively involved in setting up the rival day surgery, including as an investor. 245 Although Dr Ross's evidence of his conversation with Mrs Ruthnam was admitted, I do not consider that it assists the ACCC's case. First, in my view the ACCC overstated the significance which should attach to the fact that Ramsay did not call Mr Passmore as a witness. It is true that if it had done so, Mr Passmore could have given evidence relating to his meeting with Dr Ross in 2010. But it is difficult to see the relevance of that matter in circumstances where the ACCC does not plead that Ramsay's conduct in 2010 involved contravening conduct. Moreover, the evidence fell short of establishing that Mrs Ruthnam was involved, or was present, when Mr Passmore met with Dr Ross. Dr Ross did not suggest that she was present in the meeting he had with Mr Passmore in November 2010. 246 Secondly, and in any event, even if Dr Ross's evidence was accepted that he was told by Mr Passmore in 2010 that Ramsay would take a serious view if Dr Ross went ahead with a competing day surgery and that his business arrangements with Ramsay would change very dramatically, it is difficult to see how those words, without more, would involve contravening conduct. 247 As to the meeting Dr Ross had with Mrs Ruthnam in her office on 31 August 2015, Dr Ross gave oral evidence in chief that Mrs Ruthnam said that she understood that he had been approaching doctors and discussing the new proposed day surgery. 248 As noted, he then added that she said that "Ramsay takes a dim view of doctors who would compete against them and would take every step possible to protect their business". Dr Ross said that he told her that "Ramsay cannot go and threaten doctors like they did in 2010, referring to the Malcolm Passmore conversation with myself". 249 It is common ground that Dr Ross then said that he was aware of the new day surgery, but that he had no intention to take his work to the new day surgery, and that he was quite happy to stay at Baringa. 250 I accept Mrs Ruthnam's evidence that the substance of the conversation on 31 August 2015 was along the lines of that which she had with Dr Sutherland only a few days earlier. This is consistent with Mrs Ruthnam's evidence that she gave the same message to each of the doctors with whom she met, a matter which she repeatedly referred to not only in her evidence in this Court, but also in her s 155 examination. 251 I find that Mrs Ruthnam asked Dr Ross if he was aware of or involved in the proposed new day surgery. Dr Ross said that he was aware of it. She told him although she was not required to do so, she was speaking to all the doctors who performed day surgery and informing them that if they relinquished their theatre lists, it would have an effect on their lists in the main operating theatre, and her intention was to recruit surgeons if she had to. 252 I accept Ramsay's submission that the only significant difference between the accounts of Mrs Ruthnam and Dr Ross as to their conversation on 31 August 2015 is that Dr Ross also says that Mrs Ruthnam told him that Ramsay takes a dim view of doctors who would compete against them and would take every step possible to protect their business. I accept Mrs Ruthnam's denial that she said this. That is because: (a) there is no contemporaneous note or record of their discussion, but as previously mentioned, I found Mrs Ruthnam to be an honest and truthful witness. (b) Dr Ross's account is inconsistent with Mrs Ruthnam's conversation a few days earlier with Dr Sutherland. (c) my impression was that Dr Ross's account of his conversation with Mrs Ruthnam on 31 August 2015 may have been distorted, or at least affected, by what he says Mr Passmore told him back in November 2010 and Dr Ross seems to have interpreted Mrs Ruthnam's words as having the same effect. 253 Even if Mrs Ruthnam did tell Dr Ross that Ramsay took a dim view of doctors competing against it and that they would take every step possible to protect their business, it is difficult to see how that statement involved anti-competitive conduct. It is scarcely surprising that Ramsay would look dimly at the prospects of competition and I would not infer from the reference to taking "every step possible to protect our business" that Mr Ruthnam was telling Dr Ross that Ramsay would act contrary to competition law constraints. This is flatly inconsistent with Mrs Ruthnam's keen awareness of the need to comply with competition law requirements. Conclusion 254 I do not consider that the conversation on 31 August 2015 assists the ACCC's case. (f) Conversation between Dr Roussos and Mrs Ruthnam on 1 September 2015 255 Dr Roussos and Mrs Ruthnam had a conversation on 1 September 2015 which, again, is substantially contemporaneous with her conversations with Dr Sutherland and Dr Ross. 256 Mrs Ruthnam again asked Dr Roussos if he was aware of the proposed new day surgery. Dr Roussos responded that he was not, but that he would like to have his own day surgery one day. Mrs Ruthnam then went on to give the same message as she had given the other surgeons. This included a discussion about the disruption of the operating theatre lists, should a surgeon take their minor surgery out, and that she would recruit surgeons to backfill Ramsay's losses. 257 Dr Roussos agreed that Mrs Ruthnam's message was worded in a professional way and not in a threatening manner, and was the same tone as Mrs Ruthnam's conversation with Dr Sutherland on 28 August 2015. He also understood that he was getting the same message that all other surgeons were getting. 258 Significantly, Dr Roussos also accepted that he was given the same message as had been given to Dr Sutherland. That is, he accepted Mrs Ruthnam had told him that: (a) Ramsay was looking for surgeons to provide a balance of day and minor work at Baringa; (b) if Ramsay lost the day surgery work that would have an effect on Ramsay because it was profitable work; (c) Mrs Ruthnam's preference was that surgeons use Ramsay for both day and major surgery; and (d) Ramsay would look to recruit other surgeons, including by possibly flying them in. 259 As Dr Roussos accepted in cross-examination: When you spoke to Ms Ruthnam, you understood what you were saying was that if you took work to another place, in effect, your lists as they currently stood, the full extent of them, couldn't be guaranteed going forward?---Yes. 260 Dr Roussos also accepted in cross-examination that he in fact did not have a recollection of Mrs Ruthnam saying to him that "any privileges may be withdrawn". That concession was contrary to his evidence in chief. Conclusion 261 I do not consider that the conversation on 1 September 2015 assists the ACCC's case. Indeed, it provides strong support for Ramsay's defence. (g) Dr Edmund Wong She 262 The following is a very brief summary of Dr Wong She's evidence because much of it was largely confirmatory of earlier evidence. Dr Wong She practised as a GP at Coffs Harbour for 14 years but no longer practices there. He said that approximately 10-20 per cent of his patients were private patients and that most were under-privileged or aged. He said that in 2015 over half of his referrals were for day surgery. He knew very little about the department's categorisation of patients, implicitly because this was a matter left for the surgeon. He said that not many of his private patients go to CHCH, with the exception of obstetrics and gynaecology because there is no facility for them at Baringa. 263 It was evident that Dr Wong She had only limited experience of private patients choosing to have elective surgery done at CHCH and not Baringa. Indeed, he could not recall any such case in his 14 years at Coffs Harbour (with the exception of obstetrics or gynaecology where there is no choice). It was also evident that he had very little knowledge about the right of a privately insured patient in a public hospital to have a doctor of their own choice. His experience of private patients going to CHCH is when they are admitted to the emergency department and require urgent surgery. If their private surgeon was not available the operation would be conducted by whoever was on duty at the Base Hospital. (h) Conclusion regarding alleged contravening conversations 264 For all these reasons, and applying s 140 of the Evidence Act, I find that the ACCC has failed to establish to the requisite standard the pleaded conversations which it contends constitute contravening conduct. Part E – DR SUTHERLAND'S SOUND RECORDING and ramsay's interlocutory application 265 It is convenient to now address the circumstances surrounding the retrieval of Dr Sutherland's sound recording of his conversation with Mrs Ruthnam on 28 August 2015 and Ramsay's interlocutory application under ss 135 and 136 of the Evidence Act to exclude or restrict parts of the evidence given by Dr Joshi, Dr Summersell and Dr Sutherland which had been given prior to the retrieval of the sound recording. 266 I shall first describe the circumstances in which the sound recording was retrieved and then explain why I dismissed Ramsay's interlocutory application. (a) Retrieval of the sound recording 267 In his oral evidence in chief given on 6 March 2019 on the voir dire (which was covered by a s 128 certificate), Dr Sutherland confirmed that he had surreptiously recorded his meeting on 28 August 2015 with Mrs Ruthnam on his telephone, which he had placed on his desk face down. He said that he listened to the recording and made a file note a week or two later. He initially said that the file was "essentially verbatim" the recording. Dr Sutherland confirmed that Mrs Ruthnam did not consent to the recording, nor was she aware at the time that their conversation was being recorded. 268 Dr Sutherland explained that he had been involved in a Family Court dispute in 2015 and that a solicitor friend had told him that he should not have made a recording of a telephone call he had had with his children, which he then sent to his ex-wife. He said that he then realised that the same could apply to the August 2015 recording. He said that he deleted the recording shortly after that time. Although he was uncertain about the exact date, he believed it was in early 2016. 269 Dr Sutherland said that when he spoke to the ACCC in March 2016 it was after he had deleted the recording. He was asked what he told the ACCC about the recording. He said that essentially the ACCC representative said that he or she was aware of the possibility of there being a recording and told him not to confirm or deny this at that stage. He said that more recently, in early 2019, he was asked by the ACCC whether he had recorded the meeting. He said that he told them then for the first time that he had and also that the recording had been destroyed. He then added that the ACCC had told him back in 2018 that if he did have a recording it would be "useful". He said that he told the ACCC of the existence of the file note prior to 12 September 2017 when he finalised his affidavit (and proof of evidence) but had only told them of the recording in early 2019 in preparing for the hearing. Dr Sutherland confirmed that he used the file note in preparing his affidavit to recall what had occurred at his meeting with Mrs Ruthnam. 270 During the course of his initial cross-examination on 6 March 2019, Dr Sutherland confirmed that he still possessed the phone on which the recording had been made. Although the recording had been deleted he accepted it was possible that it might be retrievable. He said that it might also possibly be retrieved from his computer. Dr Sutherland did not object to these devices being made available to see whether the recording could be retrieved in order to ascertain whether his file note accurately reflects the recording. 271 Dr Sutherland agreed in cross-examination that his first meeting with the ACCC officers was on 4 February 2016, in his office in Coffs Harbour. He said as best he could recall it was Mr Heydon Letcher (or the ACCC's external lawyers) who told him, probably in mid-2016, not to confirm or deny whether he had a recording. Dr Sutherland said he could not recall whether he told Dr Joshi that he had recorded the meeting, but that it was "entirely possible" that he had. (b) Ramsay's application under ss 135 and 136 of the Evidence Act (i) Introduction 272 On Monday, 11 March 2019, when the Court resumed expecting to hear evidence from Mr Marcus Bezzi, who had sworn an affidavit dated 8 March 2019 for the ACCC which explained the ACCC's handling of the sound recording, Mr Bannon SC said that he would not be calling Mr Bezzi as a witness in Ramsay's case, but he tendered parts of Mr Bezzi's affidavit and many of its attachments. Mr Hutley SC had indicated on Friday, 8 March 2019 that he would not be reading Mr Bezzi's affidavit in support of the ACCC's case after Ramsay indicated that it did not oppose the tender of the sound recording. 273 Mr Bannon SC then indicated that Ramsay wished to make an application under ss 135 and 136 of the Evidence Act to exclude or limit the use of part of the evidence given by Dr Joshi, Dr Summersell and Dr Roussos. Mr Bannon SC said that Ramsay also wished to draw attention to the ACCC's willingness to adduce in evidence the file note made by Dr Sutherland, notwithstanding that it was secondary evidence based upon the recording and without the ACCC having taken steps as at 22 February 2019 to seek to recover a copy of the recording. 274 Mr Hutley SC objected to the matter proceeding on 11 March 2019. After hearing argument, the Court indicated that the interlocutory application would be heard at 11:00 am on Wednesday, 13 March 2019 and directions were made for that to occur. 275 During the course of discussion, the Court raised its concerns about the late production of the file note of the conversation on 28 August 2015. It was confirmed that a copy was only provided to Ramsay for the first time in discovery in early April 2018. A copy was not produced in response to Ramsay's s 155(7) request, nor was a copy provided by Dr Sutherland in response to the subpoena he received from Ramsay. This meant that Ramsay did not have a copy of the file note when it finalised its lay witnesses' affidavits and proofs of evidence, particularly that of Mrs Ruthnam. 276 The ACCC indicated that some of the material it would provide in opposing the interlocutory application supported its contention that Ramsay made a considered election to proceed in the fashion that it did, including that it itself did not seek to recover copies of the recording. Mr Hutley SC indicated that the ACCC expected to provide an affidavit from a technician who would describe how the recording was recovered not from Dr Sutherland's phone, but rather from a computer which provided a back-up other than through the iCloud. Such an affidavit was subsequently provided. (ii) Dr Sutherland recalled (12 March 2019) 277 After the sound recording had been recovered, Dr Sutherland was recalled on 12 March 2019 to complete his cross-examination. The parties agreed that Dr Sutherland's previous evidence on the voir dire should go into evidence in the main proceeding. Cross-examination then proceeded after the recording of the conversation with Mrs Ruthnam on 28 August 2015 was played. The recording was accompanied by Exhibit Q, which is the transcript of the recording. It is convenient to address in this section Dr Sutherland's evidence relating to the file note and sound recording and his dealings with the ACCC on these matters. I address the other parts of Dr Sutherland's evidence in Pt D above. 278 During his resumed cross-examination on 12 March 2019, Dr Sutherland was taken to the ACCC's request made of him on 12 August 2016 that he provide the file note to them. Dr Sutherland said that he had referred to the fact that he had a file note in the teleconference with ACCC officers the day before, i.e. on 11 August 2016. Dr Sutherland sent a copy of the file note to the ACCC later on 12 August 2016. 279 In his resumed cross-examination, Dr Sutherland was taken to the notes taken by ACCC officers of his meeting with them on 18 January 2018, where his proposed evidence in this proceeding was discussed. The ACCC's notes of that discussion record Dr Sutherland as saying that he had obtained a copy of his file note from his computer. The ACCC's note of the meeting also records Dr Sutherland saying that he assumed that he produced his file note in response to Ramsay's subpoena. The ACCC's note records that Dr Sutherland was asked to check this. 280 When it was put to Dr Sutherland in cross-examination, that the file note was written by him to make Ramsay look bad and that he was misleading the ACCC, he said that it reflected his understanding at the time. I do not accept Dr Sutherland's denial. I consider that he, together with Dr Lim and Dr Joshi, were prepared to overstate or exaggerate matters in order to engage the ACCC's interest in their complaints regarding Ramsay. (iii) Consideration and determination of Ramsay's interlocutory application 281 Sections 135 and 136 of the Evidence Act provide as follows: 135 General discretion to exclude evidence The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing; or (c) cause or result in undue waste of time. 136 General discretion to limit use of evidence The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing. 282 The ambit of s 136 was discussed by Sackville J in Seven Network Ltd v News Limited (No 8) [2005] FCA 1348; 224 ALR 317. His Honour also drew attention to the common use of the expression "unfairly prejudicial" in both ss 135 and 136. Justice Sackville said at [20] (with which I respectfully agree), that the weight of authority "supports the view that a procedural disadvantage may mean that a particular use of evidence might be "unfairly prejudicial to a party, depending upon the circumstances of the particular case". Sackville J also said at [21] that "considerable care" should be exercised before s 136 is used to limit the use of evidence on the basis that its use might be unfairly prejudicial to a party of a procedural sense. That is particularly so where the judge is the trier of fact and not the jury, "since the danger of unfairness to a party might be expected to be mitigated by the judge attributing less weight to material that cannot adequately tested in cross-examination". In my view, these observations, although principally directed to s 136, also apply to s 135. 283 In Australian Competition and Consumer Commission v Air New Zealand Limited (No 10) [2013] FCA 322 at [83], Perram J said that prejudice will be unfair under ss 135 and 136 in at least two situations: (a) where the tribunal of fact may handle the evidence irrationally; and (b) where a party will be deprived of procedural entitlements such as the loss of the right of cross-examination. 284 In Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 2) [2018] FCA 1459, Bromwich J said at [28]-[30]: 28. As to the assertion that the probative value of Ms Walker's evidence was substantially outweighed by its unfair prejudice, AIPE accepted the observations of McHugh J in Papakosmas v The Queen [1999] HCA 37; 196 CLR 297 at [90]-[97] as to the material differences between the common law and the Evidence Act on this discretion, and submitted that the relevant prejudice was of the kind identified by Sackville J in Seven Network Limited v News Limited (No 8) [2005] FCA 1348 (C7) and Perram J in Australian Competition and Consumer Commission v Air New Zealand (No 7) [2013] FCA 83; 209 FCR 361 (Air Cargo case). There were a number of problems with this submission. 29. The first problem was that each of those cases involved evidence of a very different kind to the present. In each of C7 and the Air Cargo case, the evidence that was sought to be relied upon was potentially critical to a fundamental aspect of the case. 30. In C7, a contentious statement of opinion was sought to be relied upon that went to the heart of the dispute, but without making it clear how the opinion was arrived at, or how any relevant expertise had been relied upon to form that opinion. Cross-examination would have been a substantial burden. Even then, the evidence was not excluded but, rather, its use restricted under s 136(a) of the Evidence Act by reason of a particular use of the evidence being unfairly prejudicial. A typical way in which use may be restricted is to confine a representation to being evidence of it having been made, rather than being evidence as to the truth of an assertion contained within the representation. That is particularly apposite for second-hand hearsay within a business record, where a request pursuant to s 167 of the Evidence Act to call the maker of the record will not enable the truth to be ascertained or tested. In C7, the use of the disputed evidence was confined to being an expression of a belief, rather than as to the truth of the facts asserted. Importantly, the unfair prejudice arose from an inherent characteristic of the impugned evidence that was able to be cured by a restriction rather than by exclusion: see C7 at [5]-[6], [20]-[21], [26]. 285 Further, at [59] Bromwich J said (after referring to McHugh J's observations in Papakosmas v The Queen [1999] HCA 37; 196 CLR 297 at [92] and whether the provisions went beyond those recommended by the ALRC in its report which preceded the enactment of the Evidence Act): 59. McHugh J considered at [93], with express reservation, a number of intermediate appeal court cases dealing with procedural disadvantages as a potential aspect of unfair prejudice. However, each such procedural disadvantage was directed to the substance of the evidence, and potentially insurmountable obstacles to challenging the evidence due to its inherent characteristics in the particular circumstances in which it was to be adduced. Subsequent cases have addressed procedural disadvantages, but that has again been confined to features of the evidence itself, or the context in which it was to be adduced, making meaningful challenge impossible: see, for example, La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4; 190 FCR 299 at [62] to [73]; see also Director of Public Prosecutions (Vic) v Wearn [2018] VSCA 39 at [32]-[33]. To entertain purely financial considerations concerning capacity to afford to mount a cross-examination would have been a step too far in departing from the necessary consideration of the inherent features of the impugned evidence itself, even as possibly exacerbated by its form or by the way in which it was presented. The application of s 135(a) urged by AIPE exceeded the proper scope of that provision insofar as it concerned the issue of unfair prejudice arising from the evidence itself. 286 Ramsay sought to have excluded, or limited, evidence given by three doctors. The relevant evidence is that given by Dr Joshi as to his conversation with Mrs Ruthnam and his separate conversation with Mr Sims; Dr Peter Summersell and his conversation with Mrs Ruthnam and Dr Roussos concerning his conversation with Mrs Ruthnam. 287 In essence, Ramsay contended that there would be unfair prejudice to it because it did not have a copy of Dr Sutherland's sound recording when the other witnesses were cross-examined. It contended that the recording varied fundamentally from Dr Sutherland's file note. It also contended that it differed from the accounts of conversations with Mrs Ruthnam by Drs Joshi, Summersell and Roussos, in circumstances where the ACCC's case is that the message conveyed to each of the doctors was the same. Ramsay complained that the unavailability of the recording until Dr Sutherland gave his evidence meant that the recording could not be put to the other doctors in cross-examination. Ramsay claimed that even if the doctors were recalled for further cross-examination their evidence would be "coloured by the fact that they have already set out in Court what they have asserted to be their version of the relevant conversations". 288 I do not accept this submission. It overstates the matter. There may be an issue of degree, but the position is little different from when there is a cross-examination of the witness who has sworn an affidavit and, accordingly, already given a version of events from which they may be reluctant to budge. In any event, I consider that the risk that a party may be reluctant to move away from evidence which the witness has already given may be taken into account by the Court in assessing the weight to be given to that particular witness's evidence. That is the approach which I have taken here. 289 By reference to the historical documents, Ramsay contended that the ACCC made a forensic decision to deploy Dr Sutherland's file note (as set out in its solicitors' letter dated 22 February 2019 in which Ramsay was informed that a copy of the file note would be included in the ACCC's supplementary bundle and that Dr Sutherland would be asked to identify the file note during his oral evidence). Ramsay contended that the ACCC deliberately chose not to inform it that the file note was based upon a recording even though the ACCC knew that this was the case by 6 February 2019, yet the ACCC said nothing about that in its 22 February 2019 letter. Ramsay also invited the Court to infer that, notwithstanding that the ACCC believed as at 22 February 2019 that the recording had been deleted, it ought to have understood that there was a realistic possibility that the sound recording could be recovered, yet it did nothing in that regard. It was put that the ACCC could have issued a s 155 notice. Ramsay rejected the ACCC's suggestion that it was incumbent upon it to have pressed the issue further, including in the subpoena process, so as to see whether the recording had been backed-up. 290 The ACCC further submitted that, initially, Ramsay directed little attention to the withholding of the file note until it was discovered in April 2018. The focus was more on the deployment of the file note in conjunction with evidence to be elicited from Dr Sutherland as to the recording and the circumstances surrounding his preparation of the file note, as outlined in the ACCC's letter dated 22 February 2019. 291 In opposing Ramsay's interlocutory application, the ACCC emphasised the need to identify with particularity the precise nature of the alleged prejudice. It contended that Ramsay had to demonstrate that the evidence might be unfairly prejudicial to it and that this required Ramsay to establish that the ACCC had acted improperly. It submitted no such finding could be made on the basis of the evidence or by way of rational inference. The ACCC submitted that the focus of Ramsay's interlocutory application was on the deployment of the file note in conjunction with evidence to be elicited from Dr Sutherland as to the recording and the circumstances surrounding his preparation of the file note, as outlined in the ACCC's letter dated 22 February 2019. 292 The ACCC emphasised that the order in which the doctors was called had nothing to do with any forensic strategy on its part, but rather accommodated the doctors' availability. The ACCC said that its conduct should not be viewed in isolation from Ramsay's own conduct. In essence, the ACCC contended that there was no evidence to find that anyone on the Ramsay side or on the ACCC side ever believed that any sound recordings were still in existence or could be retrieved. This changed for the first time during the course of Mr Bannon SC's cross-examination of Dr Sutherland when he asked about back-up. 293 The ACCC took the Court at some length through the numerous attachments to Mr Bezzi's affidavit (noting that some of the attachments were subject to rulings which imposed limitations under s 136 of the Evidence Act) to demonstrate how Ramsay took several steps to challenge the adequacy of the responses of Drs Joshi and Sutherland to the subpoenas that were issued in October 2017. This included obtaining a draft affidavit from Dr Joshi concerning his deletion of the recording of his conversation with Mr Sim. In the case of Dr Sutherland, there was an exchange of correspondence on the very topic as to whether he had ever had a recording in his possession. Dr Sutherland cooperated with Ramsay's inquiries but simply told it to "ask me in Court". The ACCC emphasised that, ultimately, Ramsay decided not to press the matter. 294 The ACCC contended that the interlocutory application basically represented an after thought by Ramsay and that given what had occurred it was open to Ramsay to cross-examine Dr Joshi about the possibility of his recording being backed-up but it elected not to do so. 295 The ACCC contended that it did not have power under s 155 to interrogate the doctors after the proceedings had been commenced (i.e. 1 May 2017). Moreover, they said that its obligation under s 155(7) is confined to producing documents which assisted Ramsay's case and this would not catch the file note which is adverse to that case. 296 As to the Court's concern about the lengthy delay in divulging the existence of the file note (i.e. during discovery in April 2018) in circumstances where the ACCC had a copy of the file note from 12 August 2016, the ACCC relied upon [48]-[51] of Mr Bezzi's affidavit. It is explained there that an earlier proposal to include a reference to the file note in Dr Sutherland's draft affidavit was changed when the ACCC had doubts in late 2016 and early 2017 that the file note was in fact contemporaneous. 297 The ACCC emphasised that the subject of recordings of conversations was expressly referred to in the WhatsApp material which was provided to Ramsay and that it was this event which then effectively caused Ramsay to take over the running of establishing whether or not recordings still existed. In those circumstances, the ACCC said that it changed its intention to issue subpoenas, as foreshadowed in its letter dated 22 September 2017. That letter, which accompanied the service of the ACCC affidavits and proofs of evidence notified Ramsay that it would seek the Court's leave to examine in chief lay witnesses to be called by it "in relation to a matter which, subject to the responses of those witnesses, may be the subject of an application for a certificate pursuant to section 128 of the Evidence Act 1995 (Cth)". The ACCC further informed Ramsay's solicitors that it intended to seek leave "to issue subpoenas to ACCC lay witnesses in terms to require the production by those witnesses of documents, including recordings, which record or evidence conversations in August or September 2015 between those witnesses and Mrs Elizabeth Ruthman or Mr Danny Sims in relation to the prospect of a new day surgery in Coffs Harbour". 298 The ACCC placed particular emphasis on a letter dated 8 December 2017 which it received from Ramsay's solicitors in which the ACCC was advised that Ramsay would not be pursuing a foreshadowed challenge to the response to subpoenas which Ramsay had issued to doctors. The ACCC's affidavits and proofs, which previously had been placed in sealed envelopes, were released at that time. Ramsay had issued those subpoenas in October 2017 and they were in sufficiently broad terms to cover recordings contained within back-up files. But no recordings were provided by Dr Sutherland or Dr Joshi in response to those subpoenas. 299 The ACCC's position was that by 1 December 2017 Ramsay was well aware of the possibility that recordings existed and that Ramsay was pursuing that matter by way of the subpoenas it issued to Dr Joshi and Dr Sutherland. It was in this context that the ACCC said that Dr Sutherland told Ramsay's solicitors that he had responded to the subpoena completely and fulfilled his legal obligations, but that Ramsay could ask him about the matter in Court. Moreover, the ACCC emphasised that even though the Court had indicated at a hearing on 1 December 2017 that Ramsay could raise any issues regarding the adequacy of responses to subpoenas, Ramsay did not avail itself of that opportunity. 300 The ACCC contended that Ramsay had not established any unfair prejudice caused by the ACCC's conduct because no one on either side believed that there was a recording in existence. The ACCC sought to defend its position by saying that it was protecting Dr Sutherland from any criminal liability. It was not until 6 February 2019, that the ACCC was told by Dr Sutherland that he had produced his file note after listening to his recording and that he deleted the recording before he met with any ACCC officers. 301 There is force in the ACCC's submission that there is no probative basis for finding that anyone within the Ramsay or ACCC camps thought that any recording still existed when the letter dated 22 February 2019 was sent by the ACCC. That is notwithstanding that it was reasonable to assume that the fact that there had been a recording was to be acknowledged by Dr Sutherland, hence the reference to a s 128 certificate. 302 The ACCC also emphasised that there is no evidence from Ramsay to indicate what they would have done differently if they had been told about the recording in the 22 February 2019 letter. It submitted that it is notable that Ramsay did not cross-examine Dr Joshi on this subject. 303 In reply, Ramsay persisted with its criticisms of the ACCC's conduct and sought to justify its own conduct in relation to the file note and recordings. Mr Bannon SC emphasised the asymmetry of information between the parties. He contended that Ramsay was effectively flying blind when it sought to agitate in late 2017 recordings or notes of the relevant conversations, having regard to the terms of the ACCC's letter dated 22 September 2017. He emphasised that the letter dated 27 November 2017 and the reference to "not held by the ACCC" was misleading. Mr Bannon SC described Ramsay as trying to find out what would be used by the ACCC. If they had known about the existence of the file note, and that it was based on the around recording, Ramsay could have pursued the issue of the true availability of the recording, but all they had was the messages given by the ACCC which were without reference to the file note. It was not until April 2018 that Ramsay became aware of the file note during discovery. And it was not until 22 February 2019 that the ACCC indicated that it would be relying upon material which it would need Dr Sutherland to identify and against the background of a possible need for a s 128 certificate. 304 I accept Ramsay's submission that if it had known this earlier, they could have responded differently. 305 In summary, Ramsay's case in support of its interlocutory application was: (a) there is no equality of position between the parties on the issue of the retrieval of the recordings or disclosure of the file note; (b) the ACCC intended to rely upon the file note from an early stage yet it was not disclosed until April 2018; (c) instead of seeking to preserve any existing recording, the ACCC elected not to confront Dr Sutherland and sought to protect him from potential criminal liability; (d) Dr Sutherland's file note is pleaded in [108] of the July 2017 statement of claim; (e) that pleading is inconsistent with the terms of the recording which has now been retrieved; (f) the failure to give proper notice to Ramsay in the 22 February 2019 letter meant that Ramsay was unable to seek to retrieve the recording prior to the cross-examination of the other doctors. These "troubling events" caused Ramsay to suffer a prejudice. While acknowledging the option of recalling those witnesses, Ramsay emphasised that regard should be had also to the additional time required by the Court and the witnesses and that none of this was Ramsay's responsibility. The difficulty I have is that the hearing had to be adjourned in any event because of all the time taken up by this issue. 306 Dr Higgins SC (who appeared for the ACCC in respect of Ramsay's interlocutory application), made the following three points. (a) Mr Bannon SC raised for the first time at the hearing of the interlocutory application that if Ramsay had known of the file note as secondary evidence, the ACCC would have to prove the recording. There is no evidence of what Ramsay would have done if they had known of the recording earlier and such evidence was required in circumstances where Ramsay had not pursued the challenge to the subpoenas. (b) The Court was urged not to assess events with the benefit of hindsight and there is no evidence that anyone in the ACCC ever believed that the recording was retrievable. (c) Part of the ACCC's concern about the file note was that if it was based on an unlawful recording, it also would be unlawful. 307 Importantly, Dr Sutherland confirmed in his evidence that he did use the file note in preparing his affidavit. This evidence gives rise to a troubling matter. The ACCC relied upon [48] to [51] of Mr Bezzi's affidavit to explain why it did not divulge the existence of the file note, a copy of which it had received from Dr Sutherland on 12 August 2016, before it was identified in discovery much later in April 2018. The explanation is that ACCC officers were unsure in late 2016 and early 2017 that the file note was in fact a contemporaneous note, notwithstanding that Dr Sutherland told them on 12 August 2016 that the file note was "made at the time". Mr Bezzi's evidence was that the ACCC "did not want to present Dr Sutherland's File Note as a contemporaneous record of Dr Sutherland's conversation with Ms Ruthnam when it was not clear whether it was in fact a contemporaneous record". Mr Bezzi deposed that one ACCC officer (Mr Letcher) had told him that during discussions with Dr Sutherland in the course of preparing his affidavit, he asked Dr Sutherland to confirm whether he made the file note on 28 August 2015. He said that Dr Sutherland had responded by saying that, "it may have been a little while after", but he assured Mr Letcher that the file note was "based on an accurate record of the conversation". Mr Letcher apparently formed the impression at that point that the file note may have been based on an audio recording of the conversation, but the ACCC took no steps at that time to ascertain whether the sound recording still existed or could be retrieved. 308 The ACCC's decision not to refer to the file note in Dr Sutherland's affidavit which was affirmed on 12 September 2017 is troubling in circumstances where it knew at that time that Dr Sutherland himself had used the file note to refresh his memory in preparing his affidavit and proof of evidence in early September 2017. It is also of concern that the ACCC had clearly used the file note as the basis for its pleading at [108] of the statement of claim, which was filed in July 2017, i.e. well after the events which Mr Bezzi said gave rise to the ACCC's concerns about the contemporaneousness of the file note. It is revealing that the pleading there refers to Ramsay needing "to find a balance by stopping his main theatre cases", which plainly adopts Dr Sutherland's file note reference to the "need to find balance by stopping main theatre cases". 309 In my view, there was a failure by the ACCC to do what it should have done as a model litigant and reveal to Ramsay by at least September 2017 that Dr Sutherland had a file note of his conversation with Mrs Ruthnam, which he relied upon in preparing his affidavit. 310 I also accept Ramsay's criticisms of the ACCC, as a public regulator, for taking the position which it did of protecting Dr Sutherland from possible criminal liability relating to the fact that he had made a sound recording of the conversation. It is difficult to understand how this is a legitimate concern of a public regulator charged with responsibility for enforcing the law. It is also concerning that the ACCC took it upon itself to delete any reference in Dr Sutherland's affidavit or proof of evidence to the existence of the file note because of its concerns about whether it was contemporaneous with the 28 August 2015 conversation, notwithstanding that Dr Sutherland used the file note in preparing his affidavit. 311 Although I am troubled by these aspects of the ACCC's conduct, I do not suggest that they have had any bearing on my findings set out in Pt D above as to whether the ACCC has made good the pleaded conversations which are said to have given rise to contravening conduct. The reasons for those findings are set out in Pt D above. They do not include the ACCC's conduct in relation to the file note (or the sound recording). 312 As to the sound recording, I do not find any impropriety on the part of the ACCC. Nevertheless, the ACCC's concern to protect Dr Sutherland from possible criminal liability because he made the recording seems misguided for the reasons stated at [310] above. 313 I do not consider Ramsay was unfairly prejudiced by the events that have occurred notwithstanding some troubling aspects concerning the ACCC's conduct. As to the file note, its existence was revealed by the ACCC in the discovery process which occurred in April 2018. Consequently, Ramsay did not have that file note when it finalised Mrs Ruthnam's affidavit and proof of evidence. But the file note was available to Ramsay when Mrs Ruthnam gave her oral evidence in chief and it was also available to be used by Ramsay in cross-examining Dr Sutherland. 314 Notwithstanding the views I have expressed above regarding some aspects of the ACCC's handling of Dr Sutherland's sound recording, I do not consider that Ramsay was unfairly prejudiced by the belated retrieval of that recording. In arriving at that view, I gave considerable weight to the fact that three relevant doctors could be recalled and cross-examined on the basis of the recording. As noted above, it was open to the Court to take into account the events which have occurred in assessing the weight to be given to the doctors' evidence and, in particular, the danger of their evidence being "coloured" when they had already been cross-examined, but at a time when neither party had access to the sound recording. That is the approach I have taken in assessing that evidence. 315 These are the reasons why I dismissed Ramsay's interlocutory application. Part F – misuse of market power 316 In the light of my findings in Pt D it is strictly unnecessary to address other parts of the ACCC's case because I consider that the case should be dismissed on the basis that the ACCC has failed to establish that the pleaded conversations constituted contravening conduct by Ramsay. For completeness, however, I shall briefly address other relevant parts of the ACCC's case in Pts F and G of these reasons for judgment. (a) Statutory provisions as in force at the relevant time 317 In August-September 2015, s 46 of the CC Act relevantly provided: Misuse of market power (1) A corporation that has a substantial degree of power in a market shall not take advantage of that power in that or any other market for the purpose of: (a) …; (b) preventing the entry of a person into that or any other market; or (c) deterring or preventing a person from engaging in competitive conduct in that or any other market. (1AAA)-(2)… (3) In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the court shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that market is constrained by the conduct of: (a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or (b) persons to whom or from whom the body corporate or any of those bodies corporate supplies or acquires goods or services in that market. (3A) In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the court may have regard to the power the body corporate or bodies corporate has or have in that market that results from: (a) any contracts, arrangements or understandings, or proposed contracts, arrangements or understandings, that the body corporate or bodies corporate has or have, or may have, with another party or other parties; and (b) any covenants, or proposed covenants, that the body corporate or bodies corporate is or are, or would be, bound by or entitled to the benefit of. (3B) Subsections (3) and (3A) do not, by implication, limit the matters to which regard may be had in determining, for the purposes of this section, the degree of power that a body corporate or bodies corporate has or have in a market. (3C) For the purposes of this section, without limiting the matters to which the court may have regard for the purpose of determining whether a body corporate has a substantial degree of power in a market, a body corporate may have a substantial degree of power in a market even though: (a) the body corporate does not substantially control the market; or (b) the body corporate does not have absolute freedom from constraint by the conduct of: (i) competitors, or potential competitors, of the body corporate in that market; or (ii) persons to whom or from whom the body corporate supplies or acquires goods or services in that market. (3D) To avoid doubt, for the purposes of this section, more than 1 corporation may have a substantial degree of power in a market. (4) In this section: (a) a reference to power is a reference to market power; (b) a reference to a market is a reference to a market for goods or services; and (c) a reference to power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market. (4A) Without limiting the matters to which the court may have regard for the purpose of determining whether a corporation has contravened subsection (1), the court may have regard to: (a) any conduct of the corporation that consisted of supplying goods or services for a sustained period at a price that was less than the relevant cost to the corporation of supplying such goods or services; and (b) the reasons for that conduct. (5)-(6) … (6A) In determining for the purposes of this section whether, by engaging in conduct, a corporation has taken advantage of its substantial degree of power in a market, the court may have regard to any or all of the following: (a) whether the conduct was materially facilitated by the corporation's substantial degree of power in the market; (b) whether the corporation engaged in the conduct in reliance on its substantial degree of power in the market; (c) whether it is likely that the corporation would have engaged in the conduct if it did not have a substantial degree of power in the market; (d) whether the conduct is otherwise related to the corporation's substantial degree of power in the market. This subsection does not limit the matters to which the court may have regard. (7) Without in any way limiting the manner in which the purpose of a person may be established for the purposes of any other provision of this Act, a corporation may be taken to have taken advantage of its power for a purpose referred to in subsection (1) notwithstanding that, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the corporation or of any other person or from other relevant circumstances. (b) Elements of s 46 contravention 318 For the purposes of this alleged contravention, the parties were agreed that the ACCC needed to establish that: (a) Ramsay had a substantial degree of power in a market; (b) Ramsay took advantage of that substantial market power; and (c) Ramsay did so for the purpose of preventing the entry of a new day surgery into the market or deterring or preventing a new day surgery from engaging in competitive conduct. (c) The relevant market 319 The three elements of s 46 as described above all operate by reference to a relevant market. It is thus necessary to determine the relevant market(s) in which Ramsay operated. (i) Some relevant legal principles on market definition 320 Section 4E defines a market for the purposes of the CC Act, as meaning "a market in Australia and, when used in relation to any goods or serves, as including a market for those goods or services, and other goods or services that are substitutable for, or otherwise competitive with, the first-mentioned goods or services." 321 In Australian Competition and Consumer Commission v Flight Centre Travel Group Limited [2016] HCA 49; 261 CLR 203 at [66], Kiefel and Gageler JJ described a market as follows: A market is a metaphorical description of an area or space (which is not necessarily a place) for the occurrence of transactions. Competition in a market is rivalrous behaviour in respect of those transactions. A market for the supply of services is a market in which those services are supplied and in which other services that are substitutable for, or otherwise competitive with, those services also are actually or potentially supplied. 322 The classic statement of the Trade Practices Tribunal in Re Queensland Co-Operative Milling Association Limited; Re Defiance Holdings Limited (1979) 25 FLR 169 at 190 also describes the appropriate analysis of the relevant market and, in particular, the key question of substitutability. The Tribunal referred to the determination of the boundaries of the market being a question of what would happen if the firm were to "give less and charge more". That includes consideration of the firm "giving less" in addition to changes in price. A consideration of what would happen if the firm "gave less" is the form of analysis which applies to the transactions in these proceedings, which do not involve monetary flows between Ramsay and surgeons. 323 This statement has been referred to approvingly in numerous cases, including by the Full Court in Australian Competition and Consumer Commission v Pfizer Australia Pty Limited [2018] FCAFC 78; 356 ALR 582 at [264] per Greenwood, Middleton and Foster JJ. That Full Court decision contains a helpful summary of the relevant principles regarding market definition at [263] to [278] and [331] to [339]. 324 Market definition cannot be carried out in isolation from the particular statutory provision with which the analysis is concerned (see Queensland Wire Industries Pty Limited v Broken Hill Pty Co Ltd [1989] HCA 6; 167 CLR 177 at 187 by Mason CJ and Wilson J). As stated in Flight Centre at [69] by Kiefel and Gaegler JJ, market definition is a "purposive" or "instrumental" exercise designed to assist the analysis of competition and the sources of market power (references omitted): Because "[t]he economy is not divided into an identifiable number of discrete markets into one or other of which all trading activities can be neatly fitted", the identification and definition of a market for particular services will often involve "value judgments about which there is some room for legitimate differences of opinion". Identifying a market and defining its dimensions is "a focusing process", requiring selection of "what emerges as the clearest picture of the relevant competitive process in the light of commercial reality and the purposes of the law". The process is "to be undertaken with a view to assessing whether the substantive criteria for the particular contravention in issue are satisfied, in the commercial context the subject of analysis". "The elaborateness of the exercise should be tailored to the conduct at issue and the statutory terms governing breach". Market definition is in that sense purposive or instrumental or functional. 325 Although it is recognised in the authorities that the process of market definition is an analytical construct, commercial realities must be kept clearly in view. The analysis of the competitive process which the authorities require should not be such that economic theory does "violence to commercial reality" (see Flight Centre at [70]-[71] per Kiefel and Gageler JJ). For that reason, the "views and practices of those within the industry are often most instructive on the question of achieving a realistic definition of the market" (see Boral Besser Masonry v Australian Competition and Consumer Commission [2003] HCA 5; 215 CLR 374 at [257] per McHugh J). 326 Market power means the "capacity to behave in a certain way (which might include setting prices, granting or refusing supply, arranging systems of distribution), persistently, free from the constraints of competition" (see Melway Publishing Pty Ltd v Robert Hicks Pty Ltd [2001] HCA 13; 205 CLR 1 at [67] per Gleeson CJ, Gummow, Hayne and Callinan JJ). Moreover, a "substantial" degree of market power is one that is considerable or large, as Lockhart J observed in Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 at 139. Sub-section 46(3) of the CC Act directs that, in determining the degree of market power, the Court is to have regard inter alia to the extent to which the conduct of the respondent is constrained by the activities of competitors, potential competitors, suppliers and customers. 327 As Kiefel and Gageler JJ stated in Flight Centre at [67], the task of market definition is often assisted by considering the following different "dimensions" of the market: (a) Product dimension: the types of services supplied. (b) Geographic dimension: the physical area within which services are supplied. (c) Functional dimension: the level of the supply chain at which services are supplied. 328 In some instances, it is also important to consider the customer (or customers) to whom the product is supplied in order to identify with precision the product and functional level to which the analysis is directed (see Boral at [135] per Gleeson CJ and Callinan J). (ii) The appropriate market definition – issues in dispute 329 The ACCC relied on: (a) a report and reply report of Dr Geoffrey Edwards, an expert economist, in respect of the various economic issues in these proceedings, including market definition; and (b) reports of Ms Ann McHardy (who has experience operating private day surgeries) and Dr John O'Donnell (who has experience operating private hospitals). 330 Ramsay relied on a report of Mr Gregory Houston, an expert economist. Both parties also relied on a joint report of Dr Edwards and Mr Houston. 331 In broad terms, the ACCC pleaded three alternative markets in which it claims Ramsay had a substantial degree of power: (a) the Private In-Patient Surgery Market; (b) the Private In-Patient Theatre Market; and (c) the Alternate Private In-Patient Market. 332 Each of these pleaded markets is predicated on the claim that hospital or theatre services in the relevant market are supplied by Ramsay to surgeons. 333 The ACCC alleged that Ramsay supplied services to surgeons, being access to and use of the operating theatres in which surgeons could operate on patients and the various services which were necessary for the procedure to be carried out. For both in-patient and day surgery, that included theatre and nursing staff, medical equipment, pre- and post-operative care and other services necessary for or ancillary to the surgery. For in-patient surgery, it also included overnight care. 334 Dr Edwards concluded that the relevant market, for the purpose of determining whether Ramsay had substantial market power is: a market for the supply to surgeons of private in-patient surgery services at private hospitals in Coffs Harbour. 335 Mr Houston's approach was different from that of Dr Edwards. Mr Houston opined that there was only one relevant market, being the market for operating theatre services supplied to private patients within the Coffs Harbour and surrounding region. He acknowledged that there is an adjacent, but separate, product market for the supply hospital-based post-operative care, over the same geographic region. Mr Houston agreed that services in respect of public patients are not within the relevant market. Mr Houston also agreed that the geographic boundaries of the market are those of the Coffs Harbour region. 336 The three key disputes between Dr Edwards and Mr Houston in respect of market definition were as follows: (a) Whether services are supplied by Ramsay to surgeons (Dr Edwards' view) or whether, instead, the appropriate characterisation is that any service that Ramsay provides to surgeons should instead be characterised as part of the services being provided to the patient (Mr Houston's view); (b) Whether the product supplied by private hospitals is different from that which is supplied by public hospitals; (c) Whether there are separate markets for "operating theatre services" and "post-operative care". 337 Another matter of dispute is whether Mr Houston was correct in stating that private patients treated in the public hospitals in Coffs Harbour get favourable treatment in respect of waiting lists as compared to public patients. 338 I will now explain why I prefer Dr Edwards' view that the relevant market is that for the supply to surgeons of private in-patient surgery services at private hospitals in Coffs Harbour. (iii) To whom are services provided? 339 I consider that Dr Edwards' analysis correctly focused on the supply of services to surgeons. His analysis involves the application of a purposive approach, which properly focusses on the allegations in these proceedings. Dr Edwards considered that in workably competitive settings, private hospitals will compete to attract surgeons. In the exchange between Ramsay and surgeons, no money changes hands. But, that does not preclude a market being established. I accept that evidence. 340 In respect of the relevant customer dimension, Mr Houston considered that the patient is the relevant customer of Baringa and that surgeons are not. Critical to Mr Houston's approach is an assessment of the relevant economic relationships which demonstrates that patients are the clear recipients of the relevant service from the hospital: in particular, the patients are the genesis for demand, the patients (either directly or through their health funds on their behalf) pay for the service and the patients are the focal point for the measure of the service quality, such as clinical outcomes and patient satisfaction. Separately there is a supply of surgical procedure services by surgeons to patients, the cost of which is borne by a combination of the patients' insurers and the patients themselves. 341 Mr Houston described the relationship between private hospitals and surgeons as "symbiotic", i.e. one involving cooperative conduct for mutual benefit. Neither hospitals nor surgeons are sellers or buyers of services to or from the other, and no consideration passes between them. 342 Mr Houston's view is that, since there is neither supply to nor demand from surgeons, it is economically incorrect to describe the relationship between hospitals and surgeons as being formed in a market. 343 I accept the ACCC's criticism that Mr Houston's report adopted the proposition that the patient is the customer as an a priori assumption, rather than starting with the conduct the subject of the proceedings, as required by a purposive approach to market definition. That can be seen most specifically in the fifth full paragraph in section 4.3.1 at page 41 of Mr Houston's report: The hospital's conduct refers to the allocation of lists to surgeons, which is one element of the process of coordinating the various operating theatre services and related post-operative care as required, to serve primarily privately-funded patients at Baringa. The provision to patients of both theatre services and surgical procedure services should therefore form the starting point for the narrowest reasonable market definition process. 344 At page 88 of his report, Mr Houston said that "there is neither a supply of services by hospitals to surgeons nor a supply of services by surgeons to hospitals". However, during the concurrent evidence, Mr Houston disowned that part of his analysis. He accepted that there was a mutual exchange of services between hospitals and surgeons. Having stated in his report that there were no formal arrangements between surgeons and hospitals, Mr Houston then accepted in his oral evidence that accreditation was, at least, one such arrangement. I accept the ACCC's submission that the Facility Rules as a whole, which are binding on accredited surgeons at Baringa, are such an arrangement. 345 I cannot accept Mr Houston's view that surgeons are not in a demand-supply relationship with a private hospital where they operate because the exchange of services between a surgeon and such a hospital is not relevantly "a market transaction". 346 The concept of "a market transaction" is not one which Mr Houston referred to in his reports, nor is it defined in the Joint Report. The concept was understandably described by the ACCC as "opaque". Mr Houston's initial attempts to describe the concept was that it was one where a party supplies and another party demands, usually for financial consideration. However, despite his acceptance of the mutual exchange of services between surgeons and hospitals, Mr Houston did not accept that this amounted to a demand-supply relationship. When asked about that, Mr Houston's oral evidence was: But the - the fundamental principle is that a demand and supply relationship describes the passing of one thing from one person to another in a market for that whatever it is. And, here, I say that there are - there are two separate market transactions which are being undertaken adjacent to or in co-ordination with each other. That between surgeons and patients and between hospitals and patients. And those two things are brought together at the particular site, if you want to call it that, of the operating theatre. And I say that there's a mutual exchange of benefits at that site. But those two - but that is in a transaction which is - can properly be described as taking place in a market. It's a - it's a co-operative arrangement that is bringing into co-operation two other market transactions. 347 It appears from this passage that the fundamental matter for a "market transaction" is "the passing of one thing from one person to another in a market". As the ACCC pointed out, there is a degree of circularity in Mr Houston's analysis. He appears to accept that there is mutual exchange of services between a hospital and a surgeon, which means that the first part of his analysis above is made out. But Mr Houston opined that the exchange of services was not sufficient to amount to a market transaction because it did not occur "in a market". There is much to be said for the ACCC's submission that Mr Houston started with an assumption that the patient (not the surgeon) is the customer and his analysis proceeded from there. As the ACCC also pointed out, for there logically to be no market in respect of the services supplied to and by surgeons, a private facility would not be able to compete for a surgeon's services. This clearly is not the case. 348 I prefer Dr Edwards' approach to market definition, not only because of the difficulties I have with Mr Houston's approach, but also because it best reflects the commercial reality revealed in the evidence. 349 During 2015 and 2016, Mrs Ruthnam and her team prepared various documents containing proposals to the Ramsay Development Committee for the building of additional (or replacement) Ramsay capacity in Coffs Harbour. Those documents contained a description of the market conditions which applied. In July 2015, in a proposal to build a new day medical facility in the Specialist Medical Centre, Mrs Ruthnam's team referred to the "threat of introduced competition" being a key concern to operating margins as "it will lead us into the spiral of competing for surgeons by purchasing new equipment and consumables which is a negative sum gain for hospital operators". Similar statements are contained in later proposal documents in November 2015 and December 2015. 350 Mrs Ruthnam's monthly CEO Reports provide further support for the view that services are provided by Ramsay to surgeons. Those reports contain a recurring item "Business Development and Marketing/Competitor Developments". That section includes commentary about "Doctors lost and gained", "Key marketing initiatives", "Competitor Developments" and "Business Growth Initiatives". 351 Mrs Ruthnam's oral evidence on the topic, which I accept, was as follows: To set up a day surgery, one needs to attract doctors; correct?---Yes. They're the customers who you have to have to make the business work; correct?---Yes. They, in effect, bring in the patients; correct?---Yes. … You've agreed to me, your business is – involves seeking to get doctors to come to your hospital; correct?---Yes. Right. And any competitive business, you would have understood in 2015, would have a similar aim; correct?---Yes. 352 That surgeons are the relevant "customers" of Ramsay reflects not only a purposive approach to market definition, but is also consistent with the commercial realities of Ramsay's business. Dr Edwards' view that surgeons are Ramsay's relevant customers is also consistent with the evidence of the ACCC's industry experts that private hospitals and day surgeries provide services to surgeons. (iv) The product that is provided by Ramsay 353 Dr Edwards opined that the appropriate description of the product supplied by Ramsay is services provided to surgeons by private hospitals. That conclusion flowed from Dr Edwards' view that services provided by private facilities lack close substitutes. 354 Mr Houston considered that definition to be too narrow. His view is that services provided to private patients in public hospitals are substitutable with services provided in private hospitals. Mr Houston's view is based upon the following considerations: (a) The operating theatres at CHHC have essentially the same (or greater) capability and quality as Baringa. (b) Many surgeons routinely perform elective surgical procedures on private patients at CHHC. (c) Private patients are generally able to elect to have their elective surgery procedure undertaken at a private or public hospital, although some lower cost health fund policies require patients to have funded, elective surgery undertaken only at public hospitals. Whether a procedure is undertaken at a private or public hospital will depend on a patient's expected out of pocket expenses, expected wait times and service attributes such as quality of accommodation and food. (d) The existence of private patient revenue targets means that public hospitals are active in seeking to attract elective surgical procedures performed on private patients. One manifestation of this is the public hospital's waiving of private patients' excess charges or co-payments. 355 For the following reasons, I prefer Dr Edwards' view that the product supplied by Ramsay is services provided to surgeons by private hospitals. First, I accept that there are differences in services provided by surgeons in a private hospital, as compared to a public hospital. They include greater efficiency in scheduling and conducting procedures, more familiar nursing staff and a lower risk of the procedure being cancelled at short notice. 356 There are also the following differences in the services provided to patients: (a) For Category 3 patients (those requiring admission within one year), private patients have to wait significantly longer if they have their treatment in a public hospital. The waiting time for Category 3 in-patient surgery at CHHC averaged 279 days, whereas at Baringa it was approximately two to eight weeks. In respect of Category 1 and 2 patients (those requiring admission within 30 days and three months respectively), the differences in waiting time are not significant. (b) Private patients at Baringa receive better food, private rooms, better amenities, more attention from nursing staff and flexibility about the time at which surgery is allocated, as compared to CHHC. 357 Secondly, I accept the ACCC's submission that the differences for patients are relevant, because they are a relevant factor for a surgeon in determining whether to change facilities if there was a small but significant and non-transitory decrease in quality of the services. In my view, Mr Houston's analysis did not grapple with these differences. 358 Thirdly, I consider that there is some force in the ACCC's criticism of Mr Houston's approach, which involved his product market definition being "based on function performed". That is, because an operating theatre in a public hospital performs the same function for private patients as an operating theatre in a private hospital. The ACCC was critical of this approach because it involved a form of analysis which departs from the orthodox means of determining market boundaries, namely by considering what services are substitutable with the focal service being considered. Mr Houston recognised that functional equivalence is a different question from substitution and that it is not a recognised economic principle. (v) Are there separate markets for "operating theatre services" and "post-operative care"? 359 Mr Houston stated at page 42 of his report: All surgical procedures require pre- and post-operative care. Post-operative care is a separate market for services that are perfectly complementary to the provision of operating theatre services. 360 I do not accept that view. As Mr Houston recognised in his oral evidence a patient never receives post-operative care without having received theatre services in a hospital (whether it be that hospital or another hospital from which the patient has been transferred). 361 A further difficulty with Mr Houston's analysis is that it is not consistent with the principles of substitutability. Post-operative care for a day surgery procedure is not substitutable for post-operative care for an in-patient procedure. However, on Mr Houston's approach it would be possible to carry out major surgery (i.e., which would usually be considered in-patient surgery) in a day surgery environment and then transfer the patient to a different facility for the post-operative care. There is no evidence of any other facilities which do this (apart from unexpected medical emergencies where a day surgery patient has to be transferred to an in-patient facility) or of such a business model being realistic or cost effective, let alone as to whether it would be permissible under applicable regulations and licensing. (vi) Private patients in public hospitals 362 Dr Edwards and Mr Houston agreed that for patients who require Category 1 and Category 2 procedures, there is little difference in waiting times between Baringa and the public hospitals in Coffs Harbour. 363 Category 3 procedures are the lowest priority procedures and are sometimes referred to as elective surgery. As noted, the waiting times for these procedures at public hospitals are much longer than at Baringa. 364 With reference to public hospital data provided to both experts, Mr Houston suggested the following two propositions: (a) When a surgeon categorises a particular patient, the surgeon is more likely to identify the procedure as higher priority (Category 1 or 2) if the patient has private health insurance. (b) When a patient at a public hospital chooses to be treated as a private patient, their waiting time is likely to be lower than if they had chosen to be treated as a public patient. 365 For the following reasons, I do not accept either of those propositions. 366 Mr Houston's first proposition amounts to a suggestion that surgeons in Coffs Harbour are systematically ignoring their clinical responsibilities and incorrectly categorising patients' clinical priority. Whatever may occur at the national level, there is no evidence of that taking place in Coffs Harbour. No such evidence was led by Ramsay from any public hospital representative, nor from any Ramsay witness. The suggestion was put to Dr Roussos, who denied it. It was not put to the other five Coffs Harbour surgeons or to either GP. 367 As to Mr Houston's second proposition, it is also unsupported by the evidence. If there was some difference between waiting times at the public hospital depending on whether patients used their private health insurance, one would expect this to be known by surgeons in Coffs Harbour. None of them provided evidence of any differential waiting periods, nor was any cross-examined by Ramsay on the topic. 368 In any event, as the ACCC pointed out, Dr Edwards provided evidence that, even if Mr Houston's analysis was sound, it would have no real effect on the question of market definition. At least 94% of private patients who required in-patient surgery and who could have those procedures carried out at Baringa chose to have the surgery at Baringa. (vii) An evidentiary ruling 369 It is convenient to explain why I rejected Ramsay's contention that one of the documents adduced in evidence which may be relevant to market definition and other matters should not be subject to the limitation I imposed under s 136 of the Evidence Act. The document comprised certain extracts from the Commonwealth Ombudsman's website. The document showed that of 37 registered health funds offering private health insurance policies for residents of New South Wales as at December 2018, 20 had a policy that provided for the performance of elective surgical procedures only at a public hospital. As noted, that document was admitted into evidence, but subject to a s 136 limitation. 370 The parties each provided brief written outlines of submissions in support of their respective positions regarding the appropriateness of the s 136 limitation. I accept the ACCC's position that the limitation is appropriate in circumstances where the document relates to various dates between February and November 2018, whereas the conduct the subject of these proceedings occurred in August and September 2015. Ramsay's market power must be assessed at that time and I cannot see how the terms of private health insurance policies issued more than two years after that date could rationally affect the assessment of Ramsay's market power in 2015. (viii) Conclusion in respect of market definition 371 For these reasons, I prefer Dr Edwards' market definition. It supports each of the three alternative markets pleaded by the ACCC as described at [331] above. (d) Did Ramsay have substantial market power? 372 For the following reasons, I accept the ACCC's submission that Ramsay had a substantial degree of power in each of the three pleaded in-patient markets. (i) Substantial market power: some applicable principles summarised 373 Market power "is the capacity to act without constraint" or to "behave in a certain way... persistently, free from the constraints of competition" (see Boral at [137] per Gleeson CJ and Callinan J and Melway at [67] per Gleeson CJ, Gummow, Hayne and Callinan JJ). 374 In considering whether a corporation has "a substantial degree" of market power, the Court must consider inter alia the extent to which the corporation is constrained by the conduct of competitors and customers (s 46(3) of the CC Act). A corporation may have substantial market power despite not substantially controlling the market or having absolute freedom of constraint from competitors and customers (s 46(3C) of the CC Act). 375 In analysing a corporation's market power, it is relevant to consider the number of competitors, their strength and size, the height of barriers to entry and the stability or volatility of demand (see Boral at [168] per Gaudron, Gummow and Hayne JJ). The question of barriers to entry is particularly important, and has been described as a "primary consideration" in considering whether a corporation has market power (see Eastern Express Pty Limited v General Newspapers Pty Limited (1992) 35 FCR 43 at 62 per Lockhart and Gummow JJ); cited in Pfizer at [335]. The importance of barriers to entry was described in Queensland Wire at 189-190 by Mason CJ and Wilson J as follows: A large market share may well be evidence of market power …but the ease with which competitors would be able to enter the market must also be considered. It is only when for some reason it is not rational or possible for new entrants to participate in the market that a firm can have market power … There must be barriers to entry … Barriers to entry may be legal barriers - patent rights, exclusive government licences and tariffs for example. Barriers to entry may also be a result of large "economies of scale". Where the economies of scale in a market are such that the minimum size for an efficient firm is very large relative to the size of the market, it may be that potential competitors will be dissuaded from entering the market by the apprehension that only one firm would survive. (ii) Ramsay's substantial market power 376 Applying those guiding principles to the circumstances here, I shall explain why I consider that at the relevant times Ramsay had substantial market power in the three pleaded in-patient markets. 377 First, it had no close competitors in the relevant market. The public hospitals in the region provided no real constraint on its activities and it was the only private hospital in the Coffs Harbour region. Both Dr Edwards and Mr Houston concluded that the boundary of the market does not extend beyond that region. Apart from having no close competitors, there is no indication of any potential entrants to the in-patient market during the relevant period. The project proposed by surgeons in 2010 was to establish a day surgery. The project pursued by Drs Lim, Joshi and Sutherland was to establish a new day surgery. The Presmed facility which was later constructed is also a day surgery. There is no evidence of anyone considering entry to the Coffs Harbour market for in-patient services. 378 Secondly, the barriers to entry to the in-patient market are substantial. The evidence of Dr O'Donnell is that it costs on average approximately $750,000 per bed to construct a new private hospital, in addition to the cost of purchasing (or leasing) land in a suitable location, obtaining regulatory approvals and recruiting and training staff. There are substantial economies of scale involved such that a private hospital is unlikely to be viable with fewer than 50-60 beds. To operate a viable private hospital, it is also necessary to meet various regulatory requirements, attract surgeons and negotiate contracts with private health funds. These precursors to entry, and the uncertainty of the operator recouping its significant initial capital investment, constitute significant barriers to entry. 379 Thirdly, Ramsay was not constrained by surgeons. Baringa was the only real choice for surgeons in the Coffs Harbour Region to operate on their private patients. Although surgeons could seek to operate on their private patients at CHHC, that was a possibility which Dr Joshi and Dr Sutherland considered and concluded that it could only work as a "stopgap". Dr Ellis also gave evidence that if a surgeon was unable to operate at Baringa he would look to refer his private patients to a different surgeon. By contrast, Ramsay did have alternatives: it could seek to attract other surgeons to its facilities or could make more lists available to existing Coffs Harbour surgeons. I accept the ACCC's submission that surgeons did not have any real countervailing power. 380 Fourthly, Ramsay's internal documents confirm that Ramsay viewed itself as having substantial market power in the Coffs Harbour region. In documents prepared by Mrs Ruthnam and her team in July 2015, Ramsay's position in Coffs Harbour was described as follows (emphasis added in italics): f) Market analysis Currently we operate in a private monopoly in Coffs Harbour with competition only coming from the public system or referrals out of town based on clinical need, patient preference or historical referral patterns. The threat of introduced competition is a key concern to our operating margins as it will lead us into the spiral of competing for surgeons by purchasing new equipment and consumables which is a negative sum gain for hospital operators as well as the obvious decline in market share. At some point this may be an inevitability but it is seen that continued proactive expansion of services to ensure no attractive unmet demand is available will assist in delaying this as long as possible. Predominantly competition from the base hospital is at a minimum due to them having limited available capacity and prevailing patient/doctor preference to come to Baringa if they are insured as Baringa is a well-known brand in the community. These factors successfully mean our competition from the base is mostly limited to patients who are beyond our clinical capability as a regional provider or services which we do not offer. … g) Competitor analysis Our only current competition is the public system, though it is worth noting that there is an expectation that a consortium of doctors is currently planning a day surgery in competition to us also. … [Map of surrounding areas] As is shown by the map other private operators are too far away from us to be direct competition and as mentioned in the previous section the base hospital private capture is predominantly services we don't or are unable to provide as there is a strong awareness of choice and the doctors for the most part actively bring patients from the public to private where they see it appropriate. 381 At page 49 of his report, Mr Houston advanced four reasons as to why he did not consider that Ramsay had substantial market power. I shall explain why I do not accept any of those reasons. 382 First, I do not accept that Baringa had a limited ability to set prices in respect of its patients, because price is determined by negotiations with large health funds. There is no evidence of any lack of bargaining power by Ramsay, a national healthcare operation with 72 facilities throughout Australia, and who negotiates prices with health funds on a national and not a facility specific basis. 383 Secondly, I reject Mr Houston's claim that Baringa could not control total patient demand due to the surgeons' role in directing demand between facilities. The ACCC submitted that this suggests that surgeons had countervailing market power, but that should be rejected for the reasons given above. 384 Thirdly, Mr Houston said that there is no evidence of Ramsay allowing the quality of services at Baringa to fall below competitive levels. I do not accept that proposition in the absolute terms in which it was put. Dr Ross regularly wrote to Ramsay about problems with various equipment. Other surgeons, such as Dr Sutherland and Dr Lim, also had difficulties with equipment at Baringa. Mrs Ruthnam's internal documents acknowledged that competition would lead to new equipment being purchased to compete for surgeons. A central topic of discussion between Mrs Ruthnam and Dr Sutherland in August and September 2015 about the possibility of Dr Sutherland using the proposed rival day surgery was the question of equipment quality at Baringa. 385 Fourthly, I do not accept Mr Houston's view that Baringa was constrained by various policies and practices of the Ramsay group generally, so that it had no ability to reduce the quality of services it provided. There is no evidence to support that proposition. In particular, while it can be accepted that Ramsay published certain principles about how its hospitals would operate, there is no evidence concerning: (a) what those standards require, as a matter of practice; (b) whether Baringa complied with those standards; and (c) whether the standards were at or above a competitive level. 386 Mr Houston accepted that he was not aware of any of those matters. 387 For all these reasons, I find that Ramsay had substantial market power in each of the three markets pleaded by the ACCC. (iii) Was Ramsay's conduct for a proscribed purpose? 388 The purpose of conduct is the end sought to be accomplished by the conduct, and should be distinguished from motive (see News Ltd v South Sydney District Rugby League Football Club Ltd [2003] HCA 45; 215 CLR 563 at [18] per Gleeson CJ). Purpose is to be ascertained subjectively (see ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1991) 27 FCR 460 at 474-475 per Lockhart, Gummow and von Doussa JJ). However, pursuant to s 46(7), a corporation may be taken to have taken advantage of its power for a purpose referred to in s 46(1) notwithstanding that, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the corporation or any other person or from other relevant circumstances. 389 The ACCC alleged that Ramsay took advantage of its substantial degree of market power for a proscribed purpose, namely to prevent a new day surgery from entering the market or deterring or preventing a new day surgery from engaging in competitive conduct. Ramsay submitted that the evidence did not bear out such a purpose. 390 It is convenient to address this issue under the umbrella of the broader question of whether Ramsay took advantage of its substantial market power and, in particular, in considering whether or not there was a legitimate business rationale for the pleaded contravening conduct. (e) Did Ramsay take advantage of substantial market power? 391 The ACCC correctly accepted that, for a corporation to take advantage of substantial market power, it must "use" that market power to engage in the impugned conduct (see Queensland Wire at 190-191 per Mason CJ Wilson J and at 194 per Deane J). In other words, there must be a causal connection between the market power and the conduct (see Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; 216 CLR 53 at [51]-[56] per Gummow, Hayne and Heydon JJ, with whom Gleeson CJ and Callinan JJ relevantly agreed). Section 46(6A) of the CC Act provided various non-exhaustive means by which the Court may be satisfied that a corporation has taken advantage of market power for the purposes of s 46. In determining whether a firm is taking advantage of its substantial market power, the leading judgment remains that of Mason CJ and Wilson J in Queensland Wire. Their Honours said there at 192: In effectively refusing to supply Y-bar to the appellant, B.H.P is taking advantage of its substantial market power. It is only by virtue of its control of the market and the absence of other suppliers that B.H.P can afford, in a commercial sense, to withhold Y-bar from the appellant. If B.H.P lacked that market power — in other words, if it were operating in a competitive market — it is highly unlikely that it would stand by, without any effort to compete, and allow the appellant to secure its supply of Y-bar from a competitor. 392 The general principles are also helpfully summarised in Pfizer at [457]-[484]. 393 In determining whether there has been a taking advantage of a substantial degree of market power, the Court may take into account whether there is a legitimate business rationale for the conduct at issue (Australian Competition and Consumer Commission v Boral Ltd [1999] FCA 1318; 166 ALR 410 at [158], [175] per Heerey J; Boral at [148] per Gleeson CJ and Callinan J, at [196] per Gaudron, Gummow and Hayne JJ; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [2003] FCAFC 149; 129 FCR 339 at [329] per Heerey and Sackville JJ and Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2013] FCA 909; 310 ALR 165 at [1900] per Greenwood J (in a passage which as noted in Pfizer at [463] was not disturbed on appeal)). As the plurality emphasised in Rural Press at [51]: Conclusion on s 46. The words "take advantage of" do not extend to any kind of connection at all between market power and the prohibited purposes described in s 46(1). Those words do not encompass conduct which has the purpose of protecting market power, but has no other connection with that market power. Section 46(1) distinguishes between "taking advantage" and "purpose". The conduct of "taking advantage of" a thing is not identical with the conduct of protecting that thing. To reason that Rural Press and Bridge took advantage of market power because they would have been unlikely to have engaged in the conduct without the "commercial rationale" – the purpose – of protecting their market power is to confound purpose and taking advantage. If a firm with market power has a purpose of protecting it, and a choice of methods by which to do so, one of which involves power distinct from the market power and one of which does not, choice of the method distinct from the market power will prevent a contravention of s 46(1) from occurring even if choice of the other method will entail it. 394 It is well to remember, as Gleeson CJ and Callinan J stated in Boral at [87], that the CC Act (then the Trade Practices Act 1974 (Cth)) aims "to promote competition, not to protect the private interests of particular persons or corporations". More is needed than the mere co-existence of market power, conduct and proscribed purpose. It is necessary to also demonstrate a connection such that the entity whose conduct is impugned can be said to be taking advantage of its power (see Melway at [44] per Gleeson CJ, Gummow, Hayne and Callinan JJ). As the plurality observed in NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 98; 219 CLR 90 at [85] satisfying these criteria is a "notoriously difficult task". 395 Turning to the present case, the ACCC alleged at FASOC [115] that by Ramsay engaging in the conduct referred to in [106]-[108] and [110] of the FASOC, Ramsay "took advantage of its substantial degree of power in the Private In-Patient Surgery Market and/or the Private In-Patient Theatre Market, or the Alternate Private In-Patient Theatre Market, including by reason of the matters set out in paragraph 114". At FASOC [114], the ACCC addressed the matters set out in s 46(6A) of the CC Act. 396 For the purposes of considering whether a profit maximising firm in an otherwise similar situation, but operating in an effectively competitive market, would have the ability and incentive to engage in the alleged contravening conduct, Mr Houston and Dr Edwards considered the requirement of "taking advantage" by reference to the following three "scenarios": (a) Scenario one: communications to the effect that accreditation or access to surgery services at Baringa would be conditional upon the surgeons not utilising the surgery services of a rival day surgery; (b) Scenario two: communications to the effect that accreditation or access to surgery services at Baringa would be conditional upon the surgeons not having an ownership interest in a rival day surgery; (c) Scenario three: communications to the effect that the number or quality (including timing) of lists that the surgeons would be allocated at Baringa would be reviewed and be conditional on the incremental profitability from Ramsay's perspective of the mix of surgery services that the surgeon demands from Ramsay. 397 I will briefly address each of those scenarios in turn. (i) Scenario one 398 It is unnecessary to make findings in respect of scenario 1 because, for the reasons set out in Pt D, I have found that communications were not made to the effect described in this scenario. (ii) Scenario two 399 Mr Houston's view is that scenario two does not involve "taking advantage" conduct. Surgeons with an interest in another facility have a conflict of interest, and it is perfectly reasonable for a profit maximising firm to exclude such parties, in favour of others. This is particularly so in light of the evidence in this case of attempts by the surgeons involved to poach staff and to access confidential information, as described above. 400 Dr Edwards accepted that a hospital in a workably competitive market may very well be concerned about a surgeon gaining access to commercially sensitive information of the hospital. Dr Edwards stated that whether a hospital would have such a concern in a competitive market is something upon which he does not have any particular expertise and experience, nor any assumptions or materials upon which he could base a view. Accordingly he expressed no view as to whether or not communications to the effect that access to the hospital would be conditional on a surgeon not having an ownership interest in a rival day surgery would be a taking advantage. 401 Ramsay submitted that the ACCC's industry expert, Dr O'Donnell, accepted that there is a "risk" that surgeons who have an ownership interest in another facility "can access private hospital confidential information". Although he also sought to suggest that such a risk can be addressed by confidentiality agreements and secure log-ins, he agreed in cross-examination that such measures may not work. 402 It is unnecessary to make findings in respect of scenario 2 because, for the reasons set out in Pt D, I have found that communications were not made to the effect described in this scenario. (iii) Scenario three 403 Both Dr Edwards and Mr Houston agreed that this is not "taking advantage" conduct. According to Mr Houston, the allocation of theatre time according to its relative profitability is consistent with what any firm would do. 404 It is unnecessary to make findings in respect of scenario 3 because, for the reasons set out in Pt D, I have found that communications were not made to the effect described in this scenario. (iv) Did Ramsay have a legitimate business rationale for the alleged contravening conduct? 405 For the following reasons, I find that the ACCC has failed to establish that Ramsay did not have a legitimate business rationale for the alleged contravening conduct. 406 Baringa has a mix of day and overnight surgery and its theatres are allocated to surgeons well in advance on the basis of their mix of work and utilisation rate. I accept Mrs Ruthnam's evidence as to how that allocation works. The number of beds at Baringa governs the extent to which it can accommodate in-patient surgery. That number must also accommodate unpredictable demand generated by its accredited surgeons for beds when day surgery requires an overnight stay (as would be the case in a medical emergency) or one night becomes two. As Ramsay pointed out, there is no evidence that a private hospital model with a different balance of day and night work is economically rational, in particular one weighted more heavily towards in-patient work and the associated higher cost that entails because of the need to provide overnight accommodation and ongoing medical care. Economic rationality in a workably competitive environment presumes a reasonable rate of return on assets invested. 407 The importance of getting an appropriate mix was recognised by Dr Sutherland in his discussions with his colleagues about the planning for the new day surgery. He sent Dr Joshi and Dr Lim an email on 2 May 2016 and, in discussing which other surgeons they might recruit (including orthopaedic surgeons), he said: … I don't know about the other orthopods in terms of their case mix and volume of day cases or turn over and also whether it will need a whole lot of expensive equipment e.g. arthroscopy vs simple hand surgery. 408 In effect, Dr Sutherland appreciated the importance of there being a "balance". I reject the ACCC's contention that the notion of "balance" was a mere "confection" which was devised by Mrs Ruthnam and Mr Passmore in an attempt to disguise what the ACCC alleges was contravening conduct. The concept of "balance" was not a confection. It has a sound and rational economic basis. It also reflects commercial reality in operating a private hospital. This is supported by Dr O'Donnell's evidence where he agreed that in allocating theatre lists it was relevant to take into account whether a particular surgeon brings to the hospital a less profitable mix of work compared to another doctor and that this could affect the allocation of preferred lists. Dr Ross gave evidence to the same effect. 409 Any counterfactual positing two workably competitive firms could only posit firms which adopt a model similar to that of Baringa, with a similar need to achieve a similar balance of day and night surgery, allocating lists to its surgeons in advance and maintaining a capacity attuned to its expected demand. At the time of the alleged conduct, Baringa's lists were fully allocated, and its accredited surgeons frequently requested more lists, or lists on a more convenient day to the surgeon. There is no reason to suppose that in the counterfactual two workably competitive firms would operate materially differently. Although Baringa experiences "spare" theatre capacity due to underutilization of its lists from time to time (and where those lists are not filled on an ad hoc basis), that is not something that can be predicted in advance and is either an ex post facto phenomenon or one that is realised at short notice. 410 I accept Ramsay's submission that, in any counterfactual, a firm which lost the day work of three or four incumbent surgeons, would be expected to seek to seek that balance from elsewhere, namely other surgeons who were prepared to provide the requisite balance of day and night work. That could come from existing accredited surgeons who needed more lists. It could come from recruitment of new surgeons. Economic rationality would dictate that the lists of the departing surgeons would be allocated to other surgeons to recover the requisite balance and the firm would again have fully allocated lists. The ACCC case is not that the potentially departing surgeons needed "some" or "any" access to Baringa for in-patient work. The evidence indicates that the relevant surgeons wanted to preserve their existing allocated lists in which they could do major surgery and they did not want those lists varied in the sense of the lists being either reduced and/or allocated to a less convenient day, which is normally one towards the end of the week. I accept Ramsay's submission that surgeons are inclined to think that they "own" their theatre lists. That is the precise word which Mrs Ruthnam used several times in her s 155 examination, including when she said "some of the doctors believe that they own the list and that that list will sit there for their consumption whether it's full or not". I also accept its submission that ad hoc access to Baringa's major operating theatres held little attraction for the relevant surgeons. That was also Dr Edwards' understanding. 411 The ACCC has not demonstrated that it would have been economically rational for a firm in the counterfactual to maintain an allocation of lists for the departing doctors for their in-patient work only. On the contrary, maintaining such an allocation would likely deprive the firm of the ability to allocate requisite lists in order to attract or keep other surgeons who could provide the necessary balance to maintain the desired level of return on assets. There is nothing to suggest that it would have been economically rational for a firm in the counterfactual to increase its bed and theatre capacity by the investment of additional fixed costs required to accommodate both other replacement surgeons providing the balance as well as the in-patient surgery of the departing surgeons. Nor was there anything to suggest that such a different overall balance would have been economically rational. 412 The ACCC has not demonstrated that it would have been economically rational for a rival firm in the counterfactual to behave any differently from the way Ramsay acted here. Thus a firm in the counterfactual would not "fear" a rival doing something which the firm regarded as economically irrational. Moreover, absent evidence that it was economically rational to run an in-patient only private hospital, neither firm acting independently would wish to signal to its incumbent surgeons that they could take away profitable day work but remain comfortable in the knowledge that the private hospital would not change their major lists for in-patient work, which required higher capital investment and running costs. Indeed, it may be noted that a key motivator for Dr Joshi in pursuing a day surgery was the belief that he could charge lower prices for day surgery because of lower costs in the "absence of overnight care costs". 413 The ACCC has failed to prove that it was incrementally profitable or "economically rational" for Baringa or any firm to have only taken the three relevant surgeons' in-patient work. There is no evidence of the cost of or the revenue earned from the three surgeons' in-patient work which would demonstrate that such work was in and of itself incrementally profitable for Baringa. Dr Edwards agreed in cross-examination that he did not know whether in-patient work was profitable or not. 414 The evidence indicates that an assessment of whether any of the surgeons' in-patient work would or would not be incrementally profitable would be "a complex and intricate matter". Even if a particular procedure was to be considered on a stand alone basis the evidence of Mr Gray was that "it is way too complicated" to work out its profitability, which Ramsay submitted is likely to depend on a range of factors, such as the efficiency of the surgeon, the amount of consumables and the length of stay. Moreover, if a surgeon only undertook in-patient work, Baringa may not have sufficient beds to accommodate patients, which would affect Ramsay's ability to fully utilise Baringa's operating theatre lists. I accept Mrs Ruthnam's evidence on this matter: So we've got a finite number of beds to fit inpatients into. So in a week – and when we do our theatre utilisation review six monthly we do try and spread the inpatient work out, so we don't have a day when we have got, let's say, 60 admissions and they would all require a bed, because we couldn't manage to do that. 415 Dr Edwards' analysis that the hospital in the workably competitive market has excess capacity (spare lists and also it seems excess beds) is divorced from commercial reality. As Mr Houston explained, even in a workably competitive market a hospital would seek to allocate its theatre capacity so that its utilisation - assessed by reference to all potential surgeons it may be able to attract, as well as the potential to increase or reduce its theatre capacity - would maximise its profits. Maximisation of profit and operating theatre utilisation requires a hospital to attract surgeons who will bring the most profitable mix of procedures. It will always be preferable to attract a surgeon with complete and more profitable lists. In this regard, Ramsay's Facility Rules specifically permit the CEO to allocate theatre lists on the basis of the "case mix" of the surgeon. This can involve allocation of all existing lists to more profitable surgeons, leaving no list available to a plainly less profitable surgeon bringing only in-patient work. 416 This is consistent with the evidence concerning Baringa's list allocation and its analysis of the utilisation of its operating theatres, as described above. I accept Ramsay's submission that it is unrealistic to suggest a hypothetical which does not reflect the way a private hospital actually operates, i.e. highly efficient utilisation of its theatres, which are effectively the engine room of its surgery business. To the contrary, Mrs Ruthnam's evidence demonstrates that Baringa ensures so far as is practicable that its lists are highly utilised, fully allocated where possible, and allocated to surgeons who maximise the hospital's revenue. 417 I also accept Ramsay's submission that the ability to recruit new surgeons would be enhanced by the imposition of restrictions on existing surgeons who seek to split their lists. A potential new surgeon would be less interested in commencing practice in Coffs Harbour if existing specialists can meet most or all demand. As noted above, whilst there are challenges involved in recruitment of specialists to regional areas, there is also evidence that the offering of lists to new recruits is one way of enticing those surgeons to the region. (f) Conclusions on misuse of market power 418 For these reasons, even though I would have found that Ramsay had substantial market power, I do not consider that the ACCC has established that Ramsay took advantage of its substantial market power. part G – EXCLUSIVE DEALING (a) Statutory provisions as in force at the relevant time 419 In August-September 2015, s 47 of the CC Act relevantly provided: Exclusive dealing (1) Subject to this section, a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing. (2) A corporation engages in the practice of exclusive dealing if the corporation: (a) supplies, or offers to supply, goods or services; (b) … (c) … on the condition that the person to whom the corporation supplies, or offers or proposes to supply, the goods or services or, if that person is a body corporate, a body corporate related to that body corporate: (d) will not, or will not except to a limited extent, acquire goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of the corporation or from a competitor of a body corporate related to the corporation; (e)-(f) … (3)-(9) … (10) Subsection (1) does not apply to the practice of exclusive dealing constituted by a corporation engaging in conduct of a kind referred to in subsection (2), (3), (4) or (5) or paragraph (8)(a) or (b) or (9)(a), (b) or (c) unless: (a) the engaging by the corporation in that conduct has the purpose, or has or is likely to have the effect, of substantially lessening competition; or (b) the engaging by the corporation in that conduct, and the engaging by the corporation, or by a body corporate related to the corporation, in other conduct of the same or a similar kind, together have or are likely to have the effect of substantially lessening competition. (10A)-(13)… (b) Elements of s 47 contravention 420 The parties were agreed that to succeed in its s 47 case, the ACCC had to demonstrate that: (a) Ramsay offered to supply services to surgeons on the condition that they not acquire services from Ramsay's competitor, the new day surgery. (b) Ramsay did so for the purpose of substantially lessening competition in a market or that its conduct had the likely effect of substantially lessening competition in a market. (i) Need for supply or offer to supply on condition 421 As detailed above, section 47(2)(a) and (d) provide that a corporation engages in the practice of exclusive dealing if the corporation supplies, or offers to supply, goods or services on the condition that the person to whom the corporation supplies, or offers or proposes to supply, the goods or services will not, or will not except to a limited extent, acquire goods or services, or goods or services of a particular kind or description, directly or indirectly from a competitor of the corporation. 422 The practice of exclusive dealing does not necessarily involve the imposition of any condition; it involves supply upon condition (Re Ku-ring-gai Cooperative Building Society (No 12) Ltd [1978] FCA 50; 36 FLR 134at 167 per Deane J). A condition of the kind referred to in s 47(2) need not be legally binding but it must have "attributes of compulsion and futurity" (SWB Family Credit Union Ltd v Parramatta Tourist Services Pty Ltd [1980] FCA 125; 48 FLR 445 at 464 per Northrop J (see also Smithers J at 454)). Thus, the mere fact that a likely consequence is exclusion is insufficient (Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia [2002] FCAFC 197; 122 FCR 110 at [71] per Heerey J). 423 The ACCC's pleaded case is that by engaging in the conduct referred to in FASOC [106] to [108] and [110] i.e. the four conversations with the three surgeons referred to above, Ramsay supplied or offered to supply operating theatre time for use in relation to the performance of In-Patient Surgery Procedures on Private Patients and/or Private In-Patient Surgery Services to those surgeons on the condition that those surgeons would not acquire Private Day Surgery Services from a competitor of Ramsay in the Private Day Surgery Market, the Private Day Surgery Theatre Market or Alternate Private Day Surgery Theatre Market (FASOC [118]-[119], [137(a)]). The ACCC submitted that this conditional offer was conveyed to surgeons who relied on being allocated lists at Baringa by Mrs Ruthnam who was responsible for allocating those lists. It further submitted that this was the case in respect of Mr Sims' conversation with Dr Joshi on 3 September 2015, given his senior position and his statement to Dr Joshi that Ramsay would not abide surgeons using Ramsay's facilities while "creaming it" down the road. 424 Ramsay submitted that there was no such supply or offer to supply on condition. None of the central pleaded conversations was to the effect pleaded in the FASOC at [106]-[108] and [110]. In any event, none of conversations (which were to the effect that major lists "would no longer be guaranteed" or that surgeons "could not rely on" keeping such lists) had the necessary qualities of compulsion and futurity. 425 Ramsay submitted that the alleged contravening conduct was incapable of constituting a supply or offer to supply on condition. The ACCC did not allege that Ramsay intended to revoke or withdraw the surgeons' operating lists immediately. As noted above, the ACCC's case is that such a consequence would only occur upon the opening of a new day surgery. In August and September 2015 the new day surgery proposal was in embryonic form. There were doubts as to its financial viability (which Ramsay says proved prescient), and if it was to proceed, it would be at least two to three years before it was operational. There could be no supply or offer to supply services to surgeons on condition that the surgeons would not acquire services from a competitor in circumstances where there were no services to acquire and there was no competitor. (ii) Did Ramsay's conduct have the purpose or likely effect of substantially lessening competition? 426 Section 47(1) does not apply to practice of exclusive dealing constituted by a corporation engaging in conduct of a kind referred to in s 47(2) unless the engaging by the corporation in that conduct has the purpose, or is likely to have the effect, of substantially lessening competition (see s 47(10)). 427 To apply the concept of substantially lessening competition in a market, it is necessary to assess the nature and extent of the market, the probable nature and extent of competition which would exist therein but for the conduct in question, the way the market operates and the nature and extent of the contemplated lessening (Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 64 FLR 238 at 259 per Smithers J; Stirling Harbour Services Pty Ltd v Bunbury Port Authority [2000] FCA 1381; ATPR 41-783 at [12] per Burchett and Hely JJ). Assessing the element of substantiality requires a qualitative judgment (Rural Press at [41] per Gummow, Hayne and Heydon JJ), but must be adjudged to be of such seriousness as to adversely affect competition in the market place, particularly with consumers in mind (Universal Music Australia Pty Ltd v ACCC [2003] FCAFC 193; 131 FCR 529 at [242] per Wilcox, French and Gyles JJ). (A) Ramsay's purpose 428 The ACCC pleaded that the conduct referred to in [106] to [108] and [110] of the FASOC had the purpose of substantially lessening competition in the Private Day Surgery Market, the Private Day Surgery Theatre Market or the Alternate Private Day Surgery Theatre Market (FASOC at [134]). Ramsay's actual purpose must be established (Universal Music at [255]). Ramsay submitted that the Court would not find that this was Ramsay's actual purpose. 429 I accept the ACCC's submission that the reference to "purpose" in both ss 46 and 47 is a reference to an intention to achieve a particular result (Queensland Wire at 214 per Toohey J). Moreover, the proscribed purpose must be a substantial purpose of the company's conduct, but it need not be the only purpose (see s 4F(1)(b) of the CC Act). To be a substantial purpose, the purpose must be "real and not imaginary" (Seven Network Ltd v News Ltd [2009] FCAFC 166; 182 FCR 160 at [858] per Dowsett and Lander JJ). 430 Importantly, s 46(7) required that a corporation's purpose may be established by inference and the Court must take into account all relevant circumstances. 431 The ACCC submitted that Ramsay's purpose with regard to Mrs Ruthnam and Mr Sims speaking to the surgeons in the pleaded terms was to dissuade those surgeons from continuing with their plans to develop a new day surgery. It submitted that this purpose is clearly reflected in the terms of Mrs Ruthnam's email dated 19 August 2015, which she sent to Mr Passmore. (B) Likely effect of Ramsay's conduct 432 Whether or not conduct is likely substantially to lessen competition requires the Court to compare the positions "with" and "without" the proscribed conduct. The ACCC submitted that, in the "without" counterfactual, the Court should conclude that it was likely that the new day surgery proponents would have continued with their plans to build a day surgery and that it would have been built and become operational in circumstances where: (a) in late 2015, the proponents considered that preparations for the day surgery were "progressing well" and that other outstanding tasks (such as regulatory approval and construction financing) were "surmountable hurdles"; (b) the proponents' calculations indicated that they would attract enough work in order to make the day surgery viable; and (c) the ultimate reason why the project did not proceed were changes in Dr Sutherland's personal circumstances and the development of another day surgery by Presmed. 433 In the "with" counterfactual world, the ACCC submitted that, assessed at the time of the conduct, it was most likely that the development of the new surgery would not proceed. This was because: (a) the proponents were concerned about Ramsay's reaction and its effect on their access to Baringa; (b) as a matter of common sense, the project did not go ahead when the surgeons learned of the responses of Mrs Ruthnam and Mr Sims, noting that it was shortly after Mr Sims spoke with Dr Joshi on 3 September 2015 that planning for the new day surgery ceased; and (c) the ability to attract surgeons to use the new day surgery was a key matter underlying the viability of the proposed new day surgery and it was reasonable for the proponents to assume that what they were told by Mrs Ruthnam was also being conveyed to other surgeons with a view to discouraging them from using the proposed new day surgery. 434 The ACCC also pleaded that the alleged contravening conduct referred to in the relevant paragraphs of the FASOC was likely to have the effect of substantially lessening competition in the Private Day Surgery Market, the Private Day Surgery Theatre Market or the Alternate Private Day Surgery Market (FASOC [136]). The likely effect on competition is determined by assessing whether, at the date of the impugned conduct, it was likely, having regard to existing circumstances, that the conduct would effect a substantial lessening of competition in the market (Universal Music at [247]). 435 Ramsay submitted that the Court would not find that the conduct was likely to have the effect of substantially lessening competition. This was because the surgeons continued their plans for the day surgery very shortly after and seemingly unimpeded by the conversations. Having continued those plans, it became apparent to them that the day surgery as proposed would not be viable. Ramsay submitted that the ACCC's suggestion in [117] of its opening submissions that it was likely that the day surgery proponents would have continued with their plans to build the day surgery, it would have been built and business at the day surgery would have commenced, was fanciful. 436 Moreover, in circumstances where the treating doctors largely dictate where a patient is treated, and the evidence is that such doctors' motive was to earn more money, there is no a priori evidence of any likely material change to quality and price. Indeed, the opposite is likely, so submitted Ramsay, relying upon Mr Houston's evidence. According to Mr Houston, the likely effects on market outcomes were all sufficiently small or non-existent such that they could not give rise to a substantial lessening of competition in any market. This is because: (a) prevailing, nationally negotiated HPPA prices for operating theatre services at Baringa were already at the competitive level; (b) there is no basis to suggest there was potential for hospitals to compete by reducing prices below the pre-existing level; (c) there is no meaningful quality metric on which the new day surgery planned to offer improved service over that at Baringa; (d) there is no basis to suggest that surgery wait times would have reduced; (e) there is no basis to suggest the number of private surgeries performed in the Coffs Harbour region would have increased; and (f) the addition of another facility would only have translated into greater choice for patients in very limited circumstances. (c) Conclusions on exclusive dealing 437 The ACCC's s 47 case fails for the simple reason that it has not established the pleaded contravening conduct which it claimed gave rise to a contravention of s 47. That is enough to dismiss this part of the ACCC's case. But there are other reasons why that case would fail, including: (a) As Ramsay pointed out, the alleged contravening conduct was incapable of constituting a supply or offer to supply on condition. This was because it was not alleged that Ramsay intended to revoke or withdraw a surgeon's operating lists immediately. Rather the ACCC's case was based on the proposition that this would only occur after the new day surgery opened, which would not occur for at least two or three years assuming that all the obstacles could be overcome. It is difficult to see how there could be a supply or offer to supply services to surgeons on condition that they not acquire services from a competing day surgery in circumstances where, at the time the alleged contravening conduct occurred, there were no competing services to acquire and there was no competitor. (b) As to that part of the ACCC's s 47 case relating to "purpose", I repeat and adopt what is said above on that topic in response to the ACCC's s 46 case. (c) As to that part of the ACCC's s 47 case relating to "likely effect", I do not consider that the evidence establishes that the alleged contravening conduct was likely to have the effect of substantially lessening competition. Doctors Lim, Joshi and Sutherland continued to explore planning the new day surgery for many months after the relevant conversations occurred. Any suggestion that they did so because they were comforted by the ACCC's interest and involvement in their complaints against Ramsay does not explain why they then decided in mid-2017 not to pursue the matter, even though the ACCC was well and truly engaged by that time. Dr Sutherland said that plans for the new day surgery in Coffs Harbour resumed in around February or March 2016. He said that, from his perspective, this was mainly due to the meetings they had had with the ACCC, as well as the support for their position which they drew from a Federal Court decision which was published on 26 October 2015 concerning exclusive dealing at the Calvary Hospital in Wagga (see Australian Competition and Consumer Commission v Little Company of Mary Health Care Limited [2015] FCA 1144). Dr Sutherland said that in around late July 2017, he was asked to invest more money in the day surgery project but he had decided at that time to withdraw his support because of a change in his personal circumstances. Dr Sutherland said that Dr Lim told him that he had no hard feelings about Dr Sutherland's withdrawal from the project and added that if Dr Sutherland was not involved he was "not sure it's viable or something I would want to commit to". I accept that evidence. It indicates that the ultimate decision not to proceed with the rival day surgery was not because of Ramsay's conduct, but was rather because the proponents ultimately came to the view that it was not viable. 438 In these circumstances, I would not have concluded that the alleged contravening conduct was likely to have the effect of substantially lessening competition. This is the case whether viewed through the "without" counterfactual (i.e. asking whether, at the date of the alleged contravening conduct it was likely that the day surgery proponents would have continued with their plans to build a day surgery and that it would have been built and business there would have commenced had the alleged conduct not occurred) or through the alternative scenario in the "with" world, also assessed at the time of the alleged contravening conduct. 439 In referring to events which occurred post the impugned conduct, I have not overlooked the requirement to put aside hindsight knowledge, but rather have referred to those subsequent events as illustrating one potential outcome (see Universal Music at [247]). part H – CONCLUSIONS 440 For these reasons, the further amended originating application should be dismissed. Accordingly, there is no need to conduct a hearing on relief. 441 The parties should have an opportunity to provide written submissions on the issue of costs, having regard to these reasons for judgment. They should seek to reach an agreement on costs within 21 days hereof. If they are unable to reach agreement each should, within that time, file and serve an outline of submissions not exceeding 10 pages in length, and any supporting affidavits, regarding their individual position on costs. 442 The Court's tentative preference is to determine the issue of costs on the papers. If, however, either party opposes that course, it should indicate its opposition in its outline of submissions and say briefly why it considers that the issue of costs requires a further oral hearing. I certify that the preceding four hundred and forty-two (442) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths. Associate: Dated: 12 March 2020