Nepotism, defamation claims and millions of taxpayer dollars spent on “indefensible” legal proceedings are at the centre of a scandal at Australia’s largest hospital service.
Alex Stewart says it was the most aggressive letter he’s seen in his legal career.
Coming from Australia’s largest hospital service to a former mental health patient, “it was certainly outlandish”, according to Mr Stewart — the service’s then senior commercial lawyer.
Within hours of learning Susan* had been interviewed by the ABC in 2017, Metro North Hospital and Health Service warned her that a blog post claiming she had been unlawfully held in a mental health unit was “seriously defamatory” of five of its psychiatrists.
Metro North gave the disability pensioner 24 hours to scrub the blog, or risk being sued for defamation and reported to police for harassment, stalking and breaking telecommunications laws.
In 2018, four of the psychiatrists made good on their employer’s threat.
They sued Susan for defamation in Queensland’s Supreme Court, claiming $700,000 in personal damages, plus interest and legal costs.
But those legal costs were covered by taxpayers. An invoice shows their barrister billed Metro North for work on the case over two years.
“The use of the state’s resources to go gunning for a patient is unconscionable,” Mr Stewart said.
Speaking out publicly for the first time, Mr Stewart has been a key whistleblower within Metro North — a $2.3-billion-a-year organisation which runs five hospitals including Australia’s largest, the Royal Brisbane and Women’s Hospital.
It has a workforce of more than 15,000, making it the state’s third-largest bureaucracy behind the education department and the police.
As its senior commercial lawyer, Mr Stewart was instrumental in uncovering a 2014 scandal that has founding Metro North chief executive, Malcolm Stamp CBE, still wanted on nepotism-related corruption charges.
For the past 18 months, the Crime and Corruption Commission (CCC) has inched towards what appears to be a move to extradite Mr Stamp from the UK over an alleged secret scheme to give his daughter a job.
Meanwhile, Mr Stewart has pressed for the investigation of two other matters.
One he cannot legally disclose.
The other is Metro North bankrolling the psychiatrists’ defamation case.
Mr Stewart said it was not just a breach of the legal unit policy he established, that patients not be pursued for defamation, but raised real questions about corrupt conduct, misuse of public funds and fraud.
“From my perspective as an experienced government lawyer, the matter involves an executive body using employees as a vehicle to conduct a sham proceeding before the courts,” he said.
Following Mr Stewart’s disclosure to the ABC, Metro North’s Right to Information unit said it could not release documents related to funding the defamation case.
This was because they were part of an investigation into “suspected corrupt conduct”, it said.
Mr Stewart said in the shadow of the scandal surrounding Mr Stamp, Metro North had developed an “extremely dangerous” culture of legal bullying and cover-ups.
“It is aggressively litigating to avoid responsibility and hammer people who get on its wrong side,” he said.
Former Queensland assistant minister for health, Dr Chris Davis, says it is an approach that can cost taxpayers dearly.
Last year, the Queensland Civil Administrative Tribunal found Metro North unlawfully discriminated against Dr Davis when it denied him a job over his political activity against the then-Newman government.
Expecting to encounter a model litigant, Dr Davis said he found Metro North instead bent on “defending the indefensible” long after the man behind the decision — Mr Stamp — had returned to the UK in disgrace.
Mr Stamp was suspended over the nepotism allegations just six days after his decision to shun Dr Davis.
Dr Davis said a Metro North barrister took him aside early in the case and told him “in no uncertain terms: ‘you know you can’t win, don’t you?’.”
The witness that swung the case in Dr Davis’s favour was a hospital boss with medico-legal expertise.
QCAT called him to give evidence after Metro North excluded the executive from their witness list.
He had refused to put his name to a witness statement prepared by Metro North’s lawyers.
Dr Davis said that “should have sent alarm bells right through the organisation”.
Instead Metro North’s “brinksmanship” continued “well down the line”, he said.
“I was getting things like, ‘why don’t you walk away now?’ in writing, and ‘all you will be responsible for is your own legal fees and not ours’,” Dr Davis said.
“I wouldn’t be surprised if their legal fees were well north of $500,000.”
Taxpayers wore that, plus about $2 million in damages and costs to Dr Davis.
In Dr Davis’s case, QCAT invited Mr Stamp — by now subject to an arrest warrant held by the CCC — to give evidence from the UK.
Mr Stamp declined in writing, saying he had no memory of the events.
“If he had an ability to clear his name, you think he’d come back,” Dr Davis said.
Judge urges end to legal dispute
Last year, Supreme Court Justice Peter Applegarth urged Metro North and a suspended cardiologist to resolve their dispute out of court, ordering them back to mediation.
Justice Applegarth said in a judgement that this could “spare the parties the anxiety and uncertainty of litigation and the collective damage done to reputations as allegations and counter-allegations are played out in public”.
He said it would enable Metro North to “devote resources to the health care of Queenslanders and reducing hospital waiting lists, rather than to litigation”.
Justice Applegarth said chief executive Shaun Drummond could also “devote his time and energy to the challenging task of [his job] … rather than … spending an inordinate amount of time in the company of lawyers”.
In the court judgement he also urged the withdrawal of allegations from an internal Metro North report that the cardiologist had neglected administrative duties.
“I imagine that many members of the public would be curious as to why … it was thought necessary to suspend the [doctor] from his important clinical work,” he said.
The judge’s urging to settle the dispute out of court was in vain.
The parties wound up back before another judge seven months later.
That judge ordered the report findings be set aside, along with Mr Drummond’s decision to suspend the cardiologist.
‘Whistleblowers subject to reprisals’
The fallout from nepotism allegations against Mr Stamp has been ongoing.
One former Metro North executive, Scott McMullen, received a suspended jail sentence over his role in the scheme to give Mr Stamp’s daughter an unnecessary job through a health contractor.
Mr McMullen was convicted after pleading guilty to corruptly giving a favour and providing a misleading account.
The ABC has been told by a source familiar to the case that the CCC is now preparing to extradite Mr Stamp from the UK.
The source said this was linked to a last-minute postponement in sentencing of another co-accused of Mr Stamp in the District Court last month.
The barrister for the health contractor, sought a four-month adjournment because of “matters at hand involving an investigation”.
Barrister Russell Pearce told the court: “The arraignment’s been done, the statement of facts is agreed, everything is locked in place but there are these other steps in the investigation.”
The contractor is listed for sentencing in May on charges of corruptly giving a favour and providing a misleading account.
The CCC has declined to comment.
Mr Stewart has accused Metro North of putting a lid on corruption and misconduct complaints by tying them up in lengthy internal investigations.
“In relation to those other things which I can’t talk about, I have some real concern that there are time urgencies involved, and we’re now over a year and a half after they were first raised within the service,” he said.
Mr Stewart said whistleblowers, including himself, have been subject to reprisals including secret internal misconduct investigations.
Before he quit Metro North last year, Mr Stewart was investigated over allegations that were found to be baseless.
The ABC has spoken to other Metro North insiders familiar with legal matters who agreed there was a problem.
“It’s shown it’s a bureaucracy that can misuse power and is willing to misuse power and harm individuals,” said one on condition of anonymity.
“It’s a culture of bullying and harassment, with knee-jerk reactions to negative media and political pressure,” another said.
In July last year, lawyers for the psychiatrists sought to withdraw the defamation case against Susan, who had lodged a counterclaim.
In a statement Metro North said they were unable to comment on investigations for legal, privacy, and confidentiality reasons.
“The public can be assured that legal proceedings are only ever taken after careful consideration of all available evidence and on the advice of expert legal opinion.”
*The ABC has chosen to change Susan’s name and used a stand-in for photographs.
- Reporting: Josh Robertson
- Producers: Nick Wiggins and Heidi Rexa
- Illustrations: Nick Wiggins
- Digital Editor: Heidi Davoren