Barber v BH & TF Knight
[2006] NSWWCCPD 350
•18 December 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Barber v BH & TF Knight and others [2006] NSWWCCPD 350
APPELLANT: Gary Leonard Barber
FIRST RESPONDENT: BH & TF Knight
SECOND RESPONDENT: Robert West t/as Murrumburrah Rural Services
THIRD RESPONDENT: Parkman Pastoral Co Pty Ltd t/as JR Parkman & Co
FIRST RESPONDENT’S INSURER: Allianz Australia Workers Compensation (NSW) Limited
SECOND RESPONDENT’S INSURER: CGU Workers Compensation
THIRD RESPONDENT’S INSURER: QBE Workers Compensation (NSW) Ltd
FILE NUMBER: WCC13054-05
DATE OF REGISTRAR’S DECISION: 19 December 2005
DATE OF APPEAL DECISION: 18 December 2006
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claim under Items 2.06, 4.08, 4.12, 10.01 and Clause 5 of Schedule 6 of the Workers Compensation Regulation 2003; disbursements - investigator’s report, agency fees and solicitor’s travel expenses.
PRESIDENTIAL MEMBER: Acting Deputy President Julian Martin
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
First Respondent: No Appearance
Second Respondent: No Appearance
Third Respondent: No Appearance
ORDERS MADE ON APPEAL: 1. The Registrar’s determination of a Claim for Costs in this matter, dated 19 December 2005 is amended in accordance with these reasons.
2.BH & TF Knight and Parkman Pastoral Co Pty Ltd t/as JR Parkman & Co are to pay Gary Leonard Barber $275 inclusive of GST in respect of his costs of the appeal.
BACKGROUND
Substantive Proceedings
On 21 January 2005 Gary Leonard Barber (‘Mr Barber’) commenced proceedings in the Workers Compensation Commission (‘the Commission’) against all three named Respondents claiming weekly benefits compensation, medical and related expenses and lump sum compensation.
A teleconference was held with the parties on 13 April 2005 and as the matter was unable to be resolved it was set down for conciliation/arbitration on 17 May 2005. On this occasion the dispute was resolved between the parties and a Certificate of Determination was issued on 19 May 2005 setting out the consent orders and notations agreed between the parties. The determination granted leave to Mr Barber to discontinue the proceedings against the Second Respondent (Robert West t/as Murrumburrah Rural Services) and included a consent order that the First and Third Respondents pay Mr Barber’s costs as agreed or assessed and that such costs be apportioned one-third to the First Respondent and two-thirds to the Third Respondent.
The parties did not agree on the costs and Mr Barber’s solicitor lodged an Application for Assessment of Costs on 1 August 2005.
The costs were determined by the Registrar’s delegate, a Commission Arbitrator (‘the Delegate’) on 1 November 2005. Due to an administrative error Mr Barber’s submissions in reply, enclosed in a letter dated 25 October 2005, were not considered by the Delegate and he was asked by the Registrar to review his costs decision having regard to those submissions.
An Amended Certificate of Determination of costs was issued by the Delegate on 19 December 2005. The decision is as follows:
“1.Pursuant to an order for costs made on 19 May 2005, the First and Third Respondents are liable to pay the Applicant’s costs as agreed or assessed.
2.The Applicant’s costs of the substantive proceedings are assessed in the sum of $11,932.35.
3.The First and Third Respondents are to pay the Applicant’s costs of the assessment, assessed at $550.00 inclusive of GST.
4.The First and Third Respondents are, therefore, to pay to the Applicant a total amount of $12,482.35, if those costs have not already been paid.”
On 25 November 2005 Mr Barber lodged an appeal from the initial decision. On 7 April 2006 Mr Barber lodged further submissions in response to the Amended Determination of Costs. Neither the First Respondent or the Third Respondent have lodged submissions in reply to the appeal.
ON THE PAPERS
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.”
Having reviewed the files in this matter I am satisfied that both the First and Third Respondents have been provided with an opportunity to file submissions in reply and have failed to do so. Mr Barber is silent on the issue of whether the matter should be dealt with ‘on the papers’. I have both the Commission file regarding the cost dispute and the appeal file. In addition I have the substantive file and 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.
ISSUES IN DISPUTE
Mr Barber’s solicitor submits that the Delegate erred in relation to professional costs and claim under Item 2.06, Item 4.08, Item 4.12, Item 10.01 and Clause 5 of Schedule 6.
Mr Barber’s solicitor further submits that the Delegate erred in relation to the following disbursements:
·Agency Fees;
·Private investigator’s report costs, and
·Solicitor’s travel expenses.
PRELIMINARY
Part 19 of the Workers Compensation Regulation 2003 (‘the Regulations’) govern both the procedure for assessment of costs and appeals against such an assessment.
Clause 119(1) of the Regulations limits the grounds on which an appeal may be made against the determination of the Registrar on an assessment of costs to a matter of law. As Deputy President Fleming stated in Berger v Moree Plains Shire Council [2005] NSWWCCPD152 (‘Berger’s case’):
“The determination of these questions by a costs assessor, is a matter of discretion and, as I said in Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 (at para 19):
“Only where the discretion can be said to have miscarried because it was exercised unfairly and unlawfully, taking into account the scope of the discretion, and the objects or purpose for which it is conferred, would it be an error of law (Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at 758; R v Australian Broadcasting Tribunal; ex p 2HD Pty Ltd (1979) 144 CLR 45 at 49; Sheridan v David Anthony Clarke t/as Freestyle Marine Sports [2003] NSWWCCPD9).””
SUBMISSIONS, DISCUSSION AND FINDINGS
Professional costs
Item 2.06
Item 2.06 allows a maximum amount of $500 (at the relevant time) for ‘requesting a review of the claim from the insurer, prior to referral of the matter to the Commission’. Mr Barber’s solicitor in the bill of costs claimed $500 under this item and the Respondents objected to this amount, but conceded $150.
In the original determination the Delegate allowed the amount conceded by the Respondents, as Mr Barber’s solicitor provided no evidence to support this claim.
In the Amended Determination the Delegate did not change the assessment as Mr Barber’s solicitor’s submissions in reply provided no further evidence.
In the first submissions on appeal, Mr Barber’s solicitor submits that the Delegate erred because the onus is on the Respondents to demonstrate that a review has not been sought. It is further submitted that it is not open to the Delegate to depart from the set rate in the Item unless he has evidence to the contrary. Finally it is submitted that the Delegate should have requested copies of Mr Barber’s solicitor’s correspondence in order to determine if a review had been sought.
I do not agree with these submissions as the responsibility for making out an entitlement to the costs Item rests with Mr Barber’s solicitor and as the Delegate stated, there was no evidence to support the claim.
In the further submissions in response to the Amended Determination, Mr Barber’s solicitor has enclosed copies of the correspondence supporting the claim under Item 2.06. No explanation is provided as to why this material is provided at this late stage. In my view this effectively represents an attempt to introduce fresh evidence.
As stated above, Clause 119 of the Regulations provides that an appeal against an assessment of costs is on a matter of law only. There is no provision for the admission of fresh evidence, unless the Presidential Member “remits its decision on the question to the Registrar and orders the Registrar to re-determine the application”. Clause 119(4) then provides:
“(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.”
I disallow the introduction of this fresh evidence. The copies of correspondence, presumably part of Mr Barber’s solicitor’s file, predate the Application for Assessment of Costs and as such were available at the time when the Registrar invited Mr Barber to file submissions in reply, which the Delegate considered before handing down the Amended Determination.
I am not satisfied that there was any error on the part of the Delegate, as he determined the matter on the available evidence.
Item 4.08
This Item provides a maximum amount of $500 (at the relevant time) for ‘preparing for a conference (including providing advice to client)’. Mr Barber’s solicitor claimed a total of $1,000 in respect of both the teleconference and the conciliation/arbitration. The Delegate reduced the claim to $500 on the authority of Orr v Direct Couriers (Australia) Pty Ltd [2004] NSWWCCPD 28 (‘Orr’). In this matter Deputy President Fleming considered the maximum amount allowed for events and stated:
“The monetary values set out in Column 4 of the Table, are the maximum total for an event type in any particular claim, regardless of the number of individual activities that may take place under that event heading.”
In wide ranging submissions Mr Barber’s solicitor submits that it is an error of law to limit the costs recoverable to one conference (or two) to resolve a particular dispute when that is not provided for in the Regulations. Having regard to the authority of Orr I see no error of law in the Delegate’s determination to allow the sum of $500 under this Item.
Item 4.12
This Item provides for a maximum amount of $190 (at the relevant time) for ‘reporting to the client on the outcome of a conference or arbitration’. Mr Barber’s solicitor claimed the sum of $570 in respect of three reports to the client and the Delegate allowed the amount of $380 on the authority of Orellana-Fuentes v Standard Knitting Mill Pty Ltd (2003) 57 NSWLR 282 (‘Fuentes’).
In McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’ case) Deputy President Fleming followed Fuentes and determined that so far as Item 4.12 is concerned, the maximum amount of $190 may be allowed after the telephone conference and a further $190 allowed after the conciliation/arbitration. However, Deputy President Fleming stated:
“I am of the view that only one amount is recoverable under Item 4.12 after a conciliation and arbitration conference held on the same day.
Mr Barber’s solicitor submits that he is entitled to $190 for the teleconference and $380 for the conciliation/arbitration as this represents two events, even though held on the same day. I reject this submission and respectfully agree with Deputy President Fleming that only one amount is recoverable under Item 4.12 after a conciliation/arbitration held on the same day. Accordingly I find no error of law on the part of the Delegate in regard to this item.
Item 10.01
In the initial Determination the Delegate disallowed Mr Barber’s claim under this Item, however upon review allowed the claim in the Amended Determination. Mr Barber’s solicitor in his further submissions on appeal maintains the claim which I fail to understand as the amount sought has been allowed.
Clause 5 of Schedule 6
This clause provides:
“5 Costs where multiple insurers party to claim
If more than one insurer (or any combination of insurers) is a party to a claim or a dispute or other matter in relation to a claim, the maximum costs in respect of the matter are the total of the following:
(a)the costs for the matter calculated in accordance with the table,
(b)50% of that amount per party (other than the party who made the claim),
and payment of the costs is to be shared equally among the insurers who are parties to the matter.
Note. Clause 81 provides that in Part 19 (Costs) and Schedules 6 and 7, the term insurer includes an employer.”
As the Delegate noted, Mr Barber’s solicitor claimed $3,771.75 under Clause 5 of Schedule 6 being 50% of his costs as calculated in accordance with the Table for each additional party. The Respondents objected and conceded no payment at all.
The Delegate noted that there were three Respondents, but Mr Barber only succeeded against two of them. On the authority of Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD 33, the Delegate determined an additional $1,000 having regard to what was a fair and reasonable amount for the additional work.
Mr Barber’s solicitor submits that the legislation provides for a particular activity to be costed at a particular rate up to a particular maximum and it is not open to the Delegate to substitute a different amount, unless he has evidence to the contrary. It is further submitted that the Delegate made no reference to the Commission file which would have indicated the necessary work involved in joining the additional parties to the proceedings and that this constitutes an error of law.
As Acting Deputy President Roche stated in Dring v Kurmala Home and anor [2006] NSWWCCPD 250:
“Clause 5 of Schedule 6 does not require that because of the presence of multiple parties the increase in costs must be 50%. The reference to 50% “per party” in Clause 5 is a reference to the “maximum costs in respect of the matter”. It is not a percentage that is allowed automatically regardless of the nature of the claim or the reasonableness of the costs incurred.”
In assessing costs the Delegate must consider what is a fair and reasonable amount of costs for the work concerned (Clause 110 of the Regulation).
The Delegate at paragraph 40 of the initial decision stated:
“The evidence as to precisely what additional work was occasioned by the involvement of the additional party was not very specific. It was of a general, generic nature, but it is reasonable to conclude that some additional time was required in considering documentation, correspondence, communications with parties and their solicitors, additional procedural steps, and additional work to prepare the matter, gather evidence, give advice and take instructions.”
The Delegate then considered that the additional work would not have exceeded 4 hours and as I stated above allowed additional costs of $1,000.
Having regard to the matters referred to above, I am not satisfied that there was any error of law in the Delegate’s application of Clause 5 of Schedule 6 or in the exercise of his discretion.
Disbursements
Agency Fees
Mr Barber’s solicitor sought the sum of $176 for St George Registration & Investigation Services P/L (‘St George’) to attend to filing of documents and inspection of documents produced under direction. It is submitted by Mr Barber’s solicitor that the agency fees fall within Clause 82(b) of the Regulation and therefore should be allowed. The Delegate held that such activities are not of an investigative nature and are not covered by Clause 82(b).
As Deputy President Fleming said in Flegerbein v Tom B Blackburn Pty Ltd [2006] NSWWCCPD 30 (‘Flegerbein’s case):
“However the costs referred to in clause 82, and therefore not regulated by Part 19 and Schedule 6, are specifically listed in sub-clauses (a) to (j) as, for example, is “fees for an investigator’s report”. All other costs that are recoverable by legal practitioners and agents in Commission matters are regulated by Schedule 6 (clause 84 of the WC Regulation). The fees claimed here are not for an investigator’s report (clause 82(b)). They are for photocopying and for other activities already covered, and claimed, under the Compensation Costs table in Schedule 6 of the WC Regulation.”
The maximum amount of $500 has already been claimed by Mr Barber’s solicitor under Item 4.05 for reviewing documentation and as Deputy President Fleming said in Flegerbein’s case:
“To allow this claim twice in relation to the work of a legal representative and of an agent would exceed the maximum allowable and would be an error (Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD 33).”
Accordingly I am of the view the Registrar was correct in not allowing this disbursement.
Private Investigator’s Fee
In the Application for Assessment of Costs, Mr Barber’s solicitor claimed the sum of $2,823.81 as a disbursement to cover the cost of a Private Investigation Report.
The Delegate reduced the claim to $917.50 and in his Reasons stated that “fees for an investigator are claimable under Clause 82(b) of the Workers Compensation Regulation 2003”.
Mr Barber’s solicitor submits on appeal that Clause 82(b) of the Regulation specifically excludes fees for investigator’s reports from Part 19 of the Regulation and accordingly the costs of such report are not regulated by Clause 110 of the Regulation (fair and reasonable). It is further submitted that as investigator’s reports are not regulated by Part 19 of the Regulation the Delegate has no power to disallow or modify such a claim and accordingly the amount claimed should be allowed in full.
I agree with Mr Barber’s solicitor’s submission that Clause 82(b) of the Regulations excludes fees for investigator’s reports from Part 19 of the Regulations, however the costs of an investigation report must be assessed in accordance with the Legal Profession Act 2004 (‘the LP Act’) and the Legal Profession Regulation 2005 (‘the LP Regulation’) (Berger’s case). Deputy President Fleming in Berger’s case stated the test in the LP Regulation is as follows:
“The correct test is whether the disbursement was ‘reasonably incurred or was reasonable in amount’ and whether the total amount allowed was a ‘fair and reasonable’ amount in relation to the value of the service provided.”
The Delegate, after correctly stating that fees for an investigator are claimable under Clause 82(b) of the Regulation further stated:
“It is not appropriate to claim for work performed by an investigator that was in fact legal work covered by and encapsulated in the events and activities set out in the Table.
Thus, for example, the costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01: Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 at [18] [Nebauer’s case]. Similarly, advising the Applicant on the legislation or merits of the claim is legal work recoverable only by the solicitors under the items in the Table. On the other hand, it is legitimate to retain an investigator to gather other information not otherwise obtainable from the employer or the Applicant.”
The Delegate then disallowed the statement of Mr Barber which was prepared by the investigator.
Deputy President Fleming in Berger’s case took the “opportunity to revisit” her decision in Nebauer where she disallowed a worker’s statement prepared by an investigator on the basis that it was encompassed by Item 2.01. In Berger’s case the Deputy President said (paragraphs 141 and 142):
“The reasoning in Nebauer as to whether the worker is to be considered a ‘witness’ for the purpose of 2.05 is not correct when the costs regime of Items 2.01, 2.04A and 2.05 is considered together. The better view is that the worker is included in the term ‘witness’ in the Table…
The fee for an investigator’s report, whether to obtain witness statements or other factual investigations (including a statement from the worker), may be claimed pursuant to clause 82(b) of the WC Regulation. The test of whether such a report is claimable will, as discussed above, essentially be one of ‘reasonableness’. In most cases, it will not be reasonable to obtain witness statements by way of an investigator’s report, where the legal practitioner or agent has already obtained those statements, either at the time of taking instructions or at a later time, being before an application to the Commission is filed.”
The cost of obtaining a witness statement, including that of the worker, is normally covered under Item 2.01 or Item 2.04A of the Regulations. In the Application for Assessment of Costs, the claim under Item 2.01 did not include the cost of witness statements, and as Mr Barber’s statement was taken by an investigator it was not claimed under Item 2.04A.
It was an error of law for the Delegate to disallow the worker’s statement prepared by the investigator and accordingly it is appropriate that I make such determination in relation to the application as in my opinion should have been made by the Delegate (Clause 119 of the Regulation).
The statement of Mr Barber took 1 hour 30 minutes. As a guide, Item 2.04A allowed (at the relevant time) $100 per hour for taking a witness statement up to a maximum of $150. Having regard to the circumstances of the case including:
·Liability was in issue;
·The investigator is not a legal practitioner, and
·The time taken for the interview.
I consider it reasonable to allow the additional sum of $150 (plus GST of $15) for the time taken in relation to Mr Barber’s statement.
Except for the worker’s statement I am of the opinion that the Delegate exercised his discretion both fairly and lawfully in awarding the sum of $917.50 inclusive of GST. The Delegate considered that was “a reasonable amount” for the work in the investigator’s report which included a business name search, the investigation of employment and wages matters, and a statement from a witness.
Having reviewed the investigator’s report prepared by St George, I note the inclusion of a Vocational Assessment Report. I do not consider the cost of this reasonably incurred as it was prepared by a licensed investigator, and not a professional with qualifications and expertise in an occupational health related area.
Solicitor’s travel costs and expenses
Solicitor’s travel expenses are claimed under Item 10.02 and the costs of accommodation under Item 10.03. At the relevant time travelling expenses were allowed at $0.59 per km except for the first 50kms and accommodation allowed at $120 for each night.
Mr Barber’s solicitor claimed the following amount to travel from Young to Sydney and return in order to attend the conciliation/arbitration:
850km @ $0.59 per km = $501.50
Accommodation = $120.00
Sustenance = $ 75.00
$696.50
The Delegate noted that there is no allowance provided under the Table for sustenance and that the first 50km was not deducted from the calculation and accordingly allowed the claim as follows:
Travel = $442.50
Accommodation = $120.00
$562.50
In his submissions on appeal Mr Barber’s solicitor conceded that the Delegate was correct in reducing the amount claimed having regard to there being no allowance for sustenance and that the first 50km had not been deducted. It was submitted that the Delegate had nonetheless erred because the return trip from Young to Sydney is 850km and when the first 50km is deducted the claim is $472.00 (800km @ $0.59 per km).
It appears that the Delegate’s calculations are incorrect and the amount of $472 claimed by Mr Barber’s solicitor on appeal is correct and accordingly I allow an additional $29.50 ($472 less $442.50).
DECISION
As a result of my review the Delegate’s determination in relation to disbursements is increased as follows:
·Private investigator’s fee; an additional $165
·Solicitor’s travel expenses; an additional $29.50
The Delegate’s determination of $12,482.35 should therefore be increased by $194.50 to $12,676.85.
The Registrar’s determination of a Claim for Costs in this matter, dated 19 December 2005 is amended in accordance with these reasons.
COSTS
Mr Barber has been partially successful in this appeal and in my opinion it is appropriate that BH & TF Knight and Parkman Pastoral Co Pty Ltd t/as JR Parkman & Co pay Mr Barber’s costs in the appeal in the sum of $275 inclusive of GST, being approximately one hour’s work.
BH & TF Knight and Parkman Pastoral Co Pty Ltd t/as JR Parkman & Co are to pay Gary Leonard Barber $275 inclusive of GST in respect of his costs of the appeal.
Julian Martin
Acting Deputy President
18 December 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JULIAN MARTIN, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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