Asimus v J.J. Walker, A.D. Walker & Temple Pty Ltd t/as Templemore Partners

[2006] NSWWCCPD 113

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS

CITATION:Asimus v J. J. Walker, A. D. Walker & Temple Pty Ltd t/as Templemore Partners [2006] NSWWCCPD 113

APPELLANT:  John Thomas Asimus

RESPONDENT:  Jean Judith Walker, Arthur Dugald Walker & Temple Pty Ltd t/as Templemore Partners

INSURER:QBE Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC16433-04

DATE OF REGISTRAR’S DECISION:             22 March 2005

DATE OF APPEAL DECISION:  8 June 2006

SUBJECT MATTER OF DECISION: Costs; whether cost of investigator’s report necessary or reasonably incurred under Schedule 3 Legal Profession Regulation 2005

PRESIDENTIAL MEMBER:  Acting Deputy President Bill Roche

HEARING:On the papers

REPRESENTATION:  Appellant:      McCabe Partners

Respondent:   Diana Benk

ORDERS MADE ON APPEAL:  Paragraphs two and four of the decision of the Registrar’s delegate, dated 22 March 2005, are revoked and the following decision is made in their place:

“2.The Applicant’s costs of the proceedings are assessed at $5,923.25.

4.The Respondent is to pay the amount of $5,923.25 to the Applicant if those costs have not already been paid.”

No order as to costs of the appeal.

BACKGROUND

1. On 15 April 2005 John Thomas Asimus (‘the Appellant Worker/ Mr Asimus’) filed an appeal against the Registrar’s delegate’s assessment of costs in proceedings determined by a Commission Arbitrator. 

1. The Respondent to the Appeal is Jean Judith Walker, Arthur Dugald Walker & Temple Pty Ltd t/as Templemore Partners (‘the Respondent Employer’) who is insured by QBE Workers Compensation (NSW) Ltd (‘QBE’).

1. The Registrar’s decision by her delegate, a Commission Arbitrator made on 22 March 2005, is as follows:

“1. Pursuant to a registered Agreement with the Commission dated 27 August 2004 

the Respondent employer is liable to pay the Applicant’s costs of the proceedings
   as agreed or assessed.

2.  The Applicant’s costs of the proceedings are assessed at $5,813.25.
 3.  The Applicant’s costs of the assessment are not allowed.
 4.  The Respondent is to pay the amount of $5,813.25 to the Applicant if those costs

have not already been paid.”

ON THE PAPERS

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:

“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. The Appellant Worker submits that the matter should be listed before the Registrar [sic-Presidential member] for oral submissions on the grounds that it would be ‘inequitable’ if an insurer was able to commission an investigator to provide a factual report and a worker is not similarly able to do so.  This submission is dealt with in the body of the reasons set out below.  It does give rise to any special circumstances which would require an oral hearing.

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

PRELIMINARY

1. An appeal from a decision of the Registrar or her delegate is under clause 119 of the Workers Compensation Regulation 2003 (‘the WC Regulation’). Clause 119 provides:

“119Appeal against decision of Registrar as to matter of law

(1)A party to an application who is dissatisfied with a decision of the Registrar as to a matter of law arising in the proceedings to determine the application may, in accordance with the Rules of the Commission, appeal to the Commission constituted by a Presidential member against the decision.

(2)The appeal is to be in the form approved by the Commission and be accompanied by the fee approved by the Commission from time to time.

(3)After deciding the question the subject of the appeal, the Commission constituted by a Presidential member may, unless it affirms the Registrar’s decision:

(a)  make such determination in relation to the application as, in its opinion, should have been made by the Registrar, or

(b)  remit its decision on the question to the Registrar and order the Registrar to re-determine the application.

(4)On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.”

GROUNDS OF APPEAL

1. The Appellant Worker challenges the decision on three grounds:

(a)interest on costs were not allowed;

(b)the disallowance of the cost of the factual investigation report of 13 November 2003, and

(c)the disallowance of item 2.05, briefing a factual investigator.

SUBMISSIONS AND FINDINGS

Interest

1. The Appellant Worker seeks interest on professional costs from 27 August 2004 to date of payment.  The costs were assessed on 22 March 2005 and a cheque was drawn by QBE on 23 March 2005.  I infer that the cheque was forwarded to the Appellant Worker's solicitors within 21 days of 22 March 2005.  There is no evidence to suggest otherwise.  The entitlement to interest is dealt with in section 110 of the 1998 Act which provides:

“110Interest after order for payment

(cf former s 114)

(1)Unless the Commission orders in any particular case that interest be not payable, interest is payable on so much of the amount of any sum ordered to be paid by the Commission as is from time to time unpaid.

(2)Interest payable under subsection (1) in respect of any sum ordered to be paid:

(a)  is to be calculated as from the date when the order was made or from such later date as the Commission in any particular case fixes, and

(b) is to be calculated at the rate prescribed for the purposes of section 101 of the Civil Procedure Act 2005 or, if the regulations under this Act prescribe some other rate, at that other prescribed rate, and

(c)  forms part of the sum ordered to be paid, but not so as to require the payment of interest on interest.

(3)Despite subsections (1) and (2), where:

(a)  the amount of any sum ordered to be paid (excluding the amount of costs to be assessed) is paid in full within 21 days after the sum becomes payable, or

(b)  the amount of costs assessed is paid in full within 21 days after that amount is assessed, interest is not payable on the amount so paid, unless the Commission otherwise orders.”

1. In the present case the ‘amount of costs assessed’ ($5,813.28) was paid in full within 21 days after it was assessed.  In these circumstances ‘interest is not payable on the amount so paid, unless the Commission otherwise orders’.  No such order has been made in this matter and I therefore reject the Appellant Worker's claim for interest.

Cost of the factual investigation report of 13 November 2003

1. The cost of the investigation report of 13 November 2003 was disallowed by the Registrar’s delegate because liability was never in issue and the claim had never been declined.

1. The Application to Resolve a Dispute (‘the Application’) in this matter was filed on 1 April 2004 and sought lump sum compensation under sections 66 and 67 of the Workers Compensation Act 1987. The Reply filed on behalf of the Appellant Employer on or about 12 May 2004 stated that an offer of settlement had been made by letter by QBE on 18 March 2004 in the sum of $8,750.00 in respect of a 7% whole person impairment. The claim was settled in or about June 2004 with a section 66A agreement being filed with the Commission on 27 August 2004. The settlement was for $11,250.00 in respect of 9% whole person impairment.

1. The factual investigation report in dispute (‘the Report’) is attached to the appeal papers.  It is a report from St George Registration & Investigation Service Pty Limited dated 13 November 2003.  It was requested by the Appellant Worker's solicitor on 4 September 2003.  According to the Appellant Worker's solicitors letter of 27 September 2004 addressed to the Commission the investigators were requested to prepare a “factual and liability summary report”.  The Report sets out:

(a)     the back ground to the claim;

(b)    the nature and circumstances of the injury;

(c)     the Appellant Worker's wages;

(d)    medical treatment received;

(e)     details of the Appellant Worker's pain and anxiety as a result of the injury;

(f)      statements from Mr Asimus and his wife, and

(g)    attaches a business name search, medical reports that are addressed to the Appellant Worker's solicitor, correspondence between Mr Asimus and QBE about medical examinations, a wage schedule, and income tax returns for Mr Asimus for the financial years 2000 to 2003 inclusive. 

1. Including annexures, the Report is 122 pages long.  The cost of the Report is claimed in the sum of $2,236.13.

1. The Registrar’s delegate states in his reasons that it was “unclear…to what extent ‘investigatory’ elements were pertinent to [the] resultant settlement”.  He concluded that the claim for the cost of the Report was not ‘fair and reasonable’ in the circumstances of this case.

1. The Appellant Worker submits that as the Commission adopts a ‘front end loaded’ system it was necessary to have the evidence contained in the Report attached to the Application when it was filed on 1 April 2004.  Whilst it was necessary that all relevant evidence be attached to the Application, that does not mean that it was necessary or reasonable to instruct investigators in the circumstances of this case.

1. It is submitted that the cost of the Report is recoverable under Part 19 clause 82 of the WC Regulations. Clause 82 provides:

   “82Costs not regulated by this Part

   Costs referred to in this Part do not include any of the following:

   (a)  costs for legal services provided for an appeal under section 353 (Appeal against decision of Commission constituted by Presidential member) of the 1998 Act,

   (b)  fees for investigators’ reports or for other material produced or obtained by investigators (such as witness statements or other evidence),

   (c)  ….”

1. As the cost of an investigator’s report is not regulated by Part 19 of the WC Regulations the provisions of clauses 105, 106, 110 and 111 of the Regulations do not apply in determining whether those costs are recoverable.  It is necessary to look to the provisions of the Legal Profession Regulation 2005 (‘LP Regulation’) (see Berger v Moree Plains Shire Council [2005] NSW WCC PD 152 at [56], [68] and [71] (‘Berger’)). Clause 113 of the LP Regulation provides:

“113 Prescribed costs for services in workers compensation matters—section 329 (1) (a) and (f) of the Act

(1) This clause applies to:

(a) costs for legal services provided in any workers compensation matter, and
(b) costs for a matter that is not a legal service but is related to proceedings in any workers compensation matter.

(2) The fair and reasonable costs fixed for a legal service specified in Part 1, 2 or 3 of Schedule 3 are the costs specified in relation to that service in that Part, calculated in accordance with that Part.
(3) However, after calculating the costs for legal services specified in Parts 1 and 2 of Schedule 3, the total of all such costs is to be reduced by 10%.”

1. Schedule 3 provides in Part 1 Item 10:

“Any disbursement necessarily incurred is to be allowed except in so far as any such disbursement is of an unreasonable amount or has been unreasonably incurred and any doubts which the taxing officer/costs assessor may have as to whether any disbursement was reasonably incurred or was reasonable in amount are to be resolved in favour of the receiving party”.  (emphasis added)

1. The above item starts with the premise that if the disbursement has been ‘necessarily incurred’, it is to be allowed. The New Shorter Oxford Dictionary defines ‘necessarily’ to mean “by force of necessity; unavoidably; indispensably; in accordance with a necessary law or operative principle”. And ‘necessary’ is defined as “that which is indispensable; an essential, a requisite; a basic requirement of life, as food, warmth, etc” and “that which is required for a given situation”. If the disbursement has been ‘necessarily incurred’ it is to be allowed except in so far as the disbursement was for an ‘unreasonable amount’ or it was ‘unreasonably incurred’. Any doubt as to whether any disbursement was ‘reasonably incurred’ or was ‘reasonable in amount’ is to be resolved in favour of the ‘receiving party’. The term ‘receiving party’ is not defined in the LP Regulation but I assume it to be a reference to the party claiming the cost of the disbursement and therefore receiving the benefit of it.

1. In my view the language used by the Registrar’s delegate in disallowing the cost of the investigator’s report (‘fair and reasonable’) was more consistent with the terms of clause 110 of the WC Regulation than with an application of Schedule 3 of the LP Regulation. The application of clause 110 of the WC Regulation to a claim for the cost of an investigator’s report is an error of law. In these circumstances I am entitled to make such determination in relation to the application as, in my opinion, should have been made by the Registrar’s delegate (see clause 119 of the WC Regulation).

1. In the present case liability was never disputed and an offer of settlement was made prior to the Application being filed.  The claim was for lump sum compensation only.  There was no need whatsoever for investigators to be engaged to make general enquiries into the circumstances of the injury or the wage rate being paid to the Appellant Worker.  Further, the Report at page six discusses whether it was “reasonably foreseeable that any person riding a motor bike is at risk of suffering an injury”.  It also raises questions about:

·     whether proper training was given to the Appellant Worker;

·     whether a safe system of work was provided to the Appellant Worker,

·     and whether the motor bike being ridden at the time of the accident was in safe working order.

1. The above matters were not ‘necessary’ under Schedule 3 of the LP Regulation and the investigator’s report was not ‘necessary’, save for the statement taken from the Appellant Worker which I deal with below.

1. It is necessary that a statement be obtained from a worker before proceedings commence so it can be attached to the Application at the time of filing. The cost of obtaining that statement is normally covered under item 2.01 or 2.04A of Schedule 6 of the WC Regulation. In this case item 2.01 was allowed in the sum of $500.00, the maximum permitted at the relevant time. The Appellant Worker's solicitor submits that the two hours allowed under item 2.01 were taken up in advising the Appellant Worker of his rights. Where a claim “cannot be brought without a witness statement” there is provision for the cost of obtaining that witness statement in item 2.04A of Schedule 6. The present case was not one that ‘could not brought’ without a statement from Mrs Asimus and therefore no allowance could have been made for her statement under this item in any event. It was not necessary for investigators to be engaged to obtain a statement from her. Instead investigators were retained to conduct a wide ranging enquiry into the general circumstances of the Appellant Worker's employment and his accident. That was totally unnecessary in the circumstances of this matter.

1. In respect of the statement take by the investigators from the Appellant Worker it should be noted that the statement was taken during an interview over the telephone (see the Report page six).  It would have been better if the statement had been taken during the taking of initial instructions as envisaged under item 2.01.  Nevertheless, it is asserted that that was not done.  In these circumstances the cost of taking a statement from the Appellant Worker is recoverable (see Berger at [141]). As a guide, item 2.04A allowed (at the relevant time) $100.00 per hour for taking a witness statement up to a maximum of $150.00. I allow the sum of $100.00 (plus GST of $10.00) for the investigator’s report to allow for the time taken to take a statement from the Appellant Worker. In allowing this amount I take into account the fact that the investigator is not a legal practitioner and that the statement was taken over the phone and not in a face to face interview. I allow nothing for the statement taken from Mrs Asimus as that statement was not necessary in the circumstances of this case.

1. If I am wrong in my conclusion that the Report was not ‘necessary’ under Schedule 3 of the LP Regulation, the question remains whether the cost of obtaining it was ‘unreasonably incurred’ or was for an ‘unreasonable amount’. In my opinion the cost of obtaining the Report (‘the disbursement’) was unreasonably incurred (save for the statement from the Appellant Worker) because:

(a)liability was never in issue;

(b)it dealt at length with matters that were not in dispute (injury, employment and wages);

(c)it attached a wage schedule which was not needed in a lump sum claim;

(d)it attached tax returns which were not needed in a lump sum claim;

(e)it attached a copy of a medical report from Dr Meachin dated 15 September 2003 which was addressed to the Appellant Worker's solicitors, and

(f)it involved the taking of a statement from the Appellant Worker's wife which was not necessary.

1. In addition it is my view that the amount of the disbursement ($2,236.13) is unreasonable.  Had it been necessary to obtain an investigator’s report in a case of this kind (which it was not) the reasonable cost of that report would have been restricted to the cost of obtaining relevant and necessary witness statements.

1. The Appellant Worker submits that if the cost of an investigator’s report is disallowed then no insurer or respondent would be entitled to recover the cost of such a report. Reference is made to another matter in which QBE instructed investigators to conduct a factual investigation. The test in Schedule 3 of the LP Regulation is whether it was ‘necessary’ that the disbursement be incurred. Having regard to the nature of the claim made, the fact that liability was never in issue and to the early settlement of the case, it is my opinion that the Report was not ‘necessary’. The conduct of an insurer in another claim is irrelevant to the decision I have to make.

1. It is submitted that if the cost of the Report is refused that amounts to a denial of procedural fairness to the Appellant Worker and there is therefore an error of law.  A denial of procedural fairness can, in certain circumstances, amount to an error of law.  Procedural fairness relates to the conduct of proceedings before the tribunal concerned.  It does not relate to questions of costs.  For example, procedural fairness requires, among other things, that a party be given every reasonable opportunity to be heard and to make submissions (see Smith Family v Dafinis (1992) 8 NSWCCR 9).

1. There has been no denial of procedural fairness in the present case.  The Appellant Worker made his claim.  Negotiations took place.  An Application was filed.  The negotiations concluded in a manner agreed by both parties.  On the evidence available to me, nothing contained in the Report would have made any relevant contribution to the settlement that was finally achieved.  What is submitted is that if a worker has not obtained a “factual and liability summary report” (see Appellant Worker's submissions at page seven) then he or she could be in a worse situation than an insurer.  Reference is made to another matter where an insurer instructed investigators to carry out surveillance of the worker and claimed the cost of that surveillance.  Matters of that kind have no relevance to the matter before me which requires me to determine if the disbursement claimed was ‘necessarily incurred’ in the subject claim.  The answer to that question is: ‘no’, save for the taking of a statement from the Appellant Worker.  Had the answer been ‘yes’, the next question would be: though necessary, should the disbursement be disallowed because it was for an unreasonable amount or was unreasonably incurred.  The second question arises in respect to the Appellant Worker's statement and I have answered that question above.

Item 2.05: Briefing a Factual Investigator

1. This item was disallowed by the Registrar’s delegate because liability was never in issue in the claim and had never been declined. I agree with that conclusion. As noted above there was no need for a ‘factual and liability summary report’. In addition, as I have allowed part of the cost of the investigator’s report under clause 82 of the WC Regulation (to obtain a statement from the Appellant Worker), the cost of briefing a factual investigator is only recoverable where the investigator is obtaining evidence “other than witness statements” (see item 2.05 of the WC Regulation).

DECISION

1. Paragraphs two and four of the decision of the Registrar’s delegate of 22 March 2005 are revoked and the following orders made in there place:

“2.      The Applicant’s costs of the proceedings are assessed at $5,923.25.

4.The Respondent is to pay the amount of $5,923.25 to the Applicant if those costs have not already been paid.”

COSTS

1. I make no order as to costs of the appeal.

Bill Roche

Acting Deputy President

8 June 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE