Brisbane Northside Hospital breaks free from ‘forever’ ED contract
A private hospital on Brisbane’s north has won the right to end a 20-year contract to run its busy emergency department after the Supreme Court found the deal wasn’t meant to last forever.
QLD News
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A large private hospital on Brisbane’s northside has won a legal victory, allowing it to end a decades-old contract with a private company that has run its emergency department for more than 20 years.
The Supreme Court ruling allows St Vincent’s Private Hospital Northside at Chermside to sign a new contract with a different provider after long-time emergency department head Dr Phillip Kay sold his majority stake in the management company.
Dr Kay, who had led the Holy Spirit Northside Emergency Centre since the late 1990s, founded Impact Healthcare Pty Ltd, the company contracted to handle staffing, administration, and billing.
Although he retired from clinical work in June 2023, Dr Kay remained in charge of the emergency department through Impact.
But when he moved to sell 70 per cent of his shares in the company to PEHA Holding, questions about the future of the agreement arose.
The proposed sale led to a legal dispute over whether the hospital had unreasonably withheld consent for the change in ownership and whether the hospital had the right to end the contract, which had no set expiry date and only limited options for termination.
The hospital, which is owned by St Vincent’s Private Hospitals, argued that the agreement was never intended to last forever and must include an implied right for either party to terminate it with reasonable notice.
Impact Healthcare disputed this, claiming the contract was effectively perpetual unless very specific conditions were met.
After careful consideration, the Supreme Court agreed with the hospital’s position.
The court ruled on May 26 that while the contract did not explicitly state a right to end the agreement on notice, such a term should be implied.
Judge Melanie Hindman found no reasonable person, at the time the contract was signed, would have expected the hospital to be locked in indefinitely, regardless of changes in personnel or circumstances.
“I consider it most unlikely that the parties intended that the agreement be perpetual save for its express rights of termination,” Judge Hindman said.
“I also consider it unlikely that the parties intended that the express clauses dealing with termination were intended to be exhaustive.
“It could not have been contemplated that the agreement would continue in perpetuity regardless of other circumstances that might arise outside of the specific termination rights.
“I conclude that the parties objectively intended that the agreement could be terminated by the hospital on the giving of reasonable notice.”
Because the contract heavily relied on Dr Kay’s involvement and reputation, the court found it reasonable that the hospital should not be bound forever to Impact Emergency Group, when he stepped down.
The ruling provided the hospital with the legal clarity it needed to transition emergency department services to a new provider.
The ruling ends uncertainty for North West St Vincent’s Hospital, which claimed it had been unable to plan effectively for the future of its emergency department while the dispute remained unresolved.
Although the court did not specify how much notice must be given to terminate the contract, it emphasised that some reasonable notice period would be necessary to make the contract workable.
In a written statement, a spokesman for the hospital said the Emergency Department at St Vincent’s Private Hospital Northside said it had been an important part of the health services at Chermside for more than two decades.
“Our intent is for St Vincent’s Private Hospital Northside to continue offering emergency care to our patients and community as part of our comprehensive suite of services.”
Dr Kay said he did not want to comment but was planning to appeal.
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Originally published as Brisbane Northside Hospital breaks free from ‘forever’ ED contract
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