Borg v Garnville Pty Limited

[2003] NSWWCCPD 30

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
__________________________________________________________________

CITATION:	Sam Borg v Garnville Pty Limited [2003] NSW WCC PD 30
APPELLANT:	Sam Borg
RESPONDENT:	Garnville Pty Limited
INSURER:	GIO Workers Compensation (NSW) Limited
FILE NO:	WCC 8509-2003
DATE OF ARBITRATOR’S DECISION:	1 September 2003
DATE OF APPEAL DECISION:	4 November 2003
SUBJECT MATTER OF DECISION:	Application for Leave to Appeal against a decision relating only to costs, threshold issues, subsection 352 (2) of the 1998 Act.
PRESIDENTIAL MEMBER:	Deputy President Dr Gabriel Fleming
HEARING:	On the Papers
REPRESENTATION:	Appellant: P K Simpson & Co
Respondent: Moray & Agnew, Solicitors
ORDERS MADE ON APPEAL:	Leave to appeal against the decision of the Arbitrator is refused.

THE APPEAL

1.On 16 September 2003, Garnville Pty Limited (‘the Appellant’), lodged an ‘Application for Appeal Against a Decision of an Arbitrator’ (‘the Appeal’) in the Workers Compensation Commission (‘the Commission’) against a decision dated 1 September 2003.  The Respondent to the appeal is Garnville Pty Limited, (‘the Respondent’) and the Insurer is GIO Workers Compensation (NSW) Limited (‘the Insurer’).

2.The Appeal, as filed, did not comply with Practice Direction No. 6, issued by the President of the Commission on 13 August 2003.  Further submissions were received on 23 September 2003 and the Appeal was registered on 24 September 2003. 

3.An unsigned and undated Certificate of Service of the Appeal was received at the Commission on 25 September 2003.

4.The Appellant states in the Application that he seeks orders “under Section 350 or Section 352” of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). This decision concerns an application to appeal against the decision of an Arbitrator pursuant to section 352. Any reconsideration of the matter is for the Arbitrator, not the Presidential member on appeal.

5.The Appeal was referred to me for review on 29 October 2003.

THE DECISION UNDER REVIEW

6.The Certificate of Determination issued by the Commission on 1 September 2003 sets out the decision of the Arbitrator as follows:

The determination of the Commission in this matter, made with the consent of the parties, is as follows:

1.That the proceedings be discontinued.

2.That the requirement to file an agreement to discontinue be dispensed with.

3.That the Applicant pay the costs of the Respondent as agreed or assessed.

4.That Gary Koutzoumis indemnify the Applicant against the whole of the costs ordered to be paid by the Applicant.

7.Gary Koutzoumis was the Appellant’s solicitor, who signed the original Application and had the carriage of the matter before the Arbitrator.

8.The Appellant seeks orders:

. . .  to set aside the costs orders made by the arbitrator and to make the following orders:-

i.By consent matter discontinued.

ii.  Each party to pay their own costs.

9.A brief statement of reasons for the decision was attached to the Certificate of Determination.  This identified orders 1 and 2 above, as consent orders.  The reasons set out the history of the conduct of the Application in the Commission, in particular the failure to file a statement by the worker, and then states as follows:

From the history of the matter it can be seen that the Application was made without proper justification and was never to be successful without the Statement of the Applicant. In accordance with Section 341(4) of the Workplace Injury Management and Workers Compensation Act I am therefore not precluded from ordering that the Applicant pay the costs of the Respondent and as the Respondent has unnecessarily incurred those costs I intend to make such an order.

The explanation given for the failure to file the Statement was that a solicitor from the firm of the Solicitors for the Applicant had left the firm.  That is no fault of the Applicant and is hardly a good excuse for the failure to file the Statement and the failure to have someone ready to appear for the Applicant at the Conciliation/Arbitration.

The circumstances as described make it clear that the conduct of the solicitor for the Applicant was seriously neglectful in failing to file the Statement when given the opportunity to do so and the provisions of Section 344 of the Workplace Injury Management and Workers Compensation Act apply.

I think that this is a case where the Solicitor for the Applicant should indemnify the Applicant for the Costs Order that I make.

ON THE PAPERS REVIEW

10.Subsection 354(6) of the 1998 Act provides:

354    Procedure before Commission

(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.

11.The Appellant requested an oral hearing on the issues in the appeal.

12.The Respondent submitted that a determination ‘on the papers’ was “. . . the most efficient method of determining the appeal”.

13.Having considered the information provided in the appeal documents and the Commission’s file of the arbitration proceedings, I am satisfied that I have sufficient information to proceed “on the papers”, in accordance with section 354 of the 1998 Act and the President’s Practice Direction No 6, without holding any conference or formal hearing.  In the circumstances of this matter leave to appeal is refused, therefore it has not been necessary to review the substantive matters in relation to alleged errors in the Arbitrator’s decision.

JURISDICTION AND THRESHOLD ISSUES

14.Before proceeding to hear the appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act, as follows:

352Appeal against decision of Commission constituted by Arbitrator

(1)A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.

(2)The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:

(a)    at least $5,000 (or such other amount as may be prescribed by the regulations), and

(b)    at least 20% of the amount awarded in the decision appealed against.

(3)If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.

(4)An appeal can only be made within 28 days after the making of the decision appealed against.

(5)An appeal under this section is to be by way of review of the decision appealed against.

(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.

(7)On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.

(8)In this section, decision includes an award, interim award, order, determination, ruling and direction.

15.The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with subsection 352(4) of the 1998 Act.

16.Whether the Appellant can meet the threshold requirements of subsection 352(2) of the 1998 Act is in dispute.  There is no dispute that the substantive proceedings, being Mr Borg’s claim for compensation, are to be discontinued and the decision under review concerns an award of costs.

THE ISSUES IN DISPUTE

17.In relation to the threshold issue of whether leave to appeal should be granted the Appellant submitted that the appeal was “. . . in relation to an order by the arbitrator regarding the payment of costs in the proceedings so that no amount of compensation is in issue and s352(2) is not relevant to a decision to grant leave to appeal on this issue (sic)”.  The requirements of section 352 of the 1998 Act are discussed below.  Alternatively, as noted above, the application is made for reconsideration of the decision by the Arbitrator, pursuant to subsection 350(3) of the 1998 Act. 

18.The Appellant claims that the Arbitrator’s decision should be revoked on the following grounds:-

1.The Arbitrator erred in ordering the claimant (applicant) pay the costs of the respondent (employer) as agreed or assessed as he had no grounds upon which to hold that the claimant had made a claim that was frivolous, vexatious, fraudulent or made without proper justification and therefore had no jurisdiction under Section 341(4) of the Workplace Injury Management and Workers Compensation Act, 1998 to make such orders.

2.The Arbitrator erred in finding that the claimant’s solicitors had committed acts or omissions which represented serious neglect, serious neglect (sic), serious incompetence or serious misconduct and therefore had no jurisdiction to make orders under Section 344 of the Workplace Injury Management and Workers Compensation Act, 1998.

19.The Respondent submitted that leave to appeal should be refused as “. . . there is no significant question of law raised and a relatively minor sum ($2,530.00) is in issue”.  In relation to the substantive issues in the appeal, the Respondent submitted that the grounds of appeal had not been made out and that the Arbitrator had properly exercised his discretion pursuant to subsection 341(2) of the 1998 Act and Rule 69 of the Workers Compensation Commission Rules 2003 (‘the Rules’). The Respondent submitted that the decision should be confirmed.

DISCUSSION AND FINDINGS

20.It is clear from a review of the proceedings before the Arbitrator, and the orders sought on appeal, that the fact that the worker intended to discontinue the proceedings before the Arbitrator is not contentious.  I note that the Appellant seeks to have the orders relating to the discontinuance framed in a different way.  In my view there is no error made in the terms of the Arbitrator’s orders, number 1 and 2 above, and to substitute the Appellant’s preferred expression of those orders adds nothing to their legal force and effect.  The real dispute in this appeal is about the orders for costs, number 3 and 4 above. 

21.The question of whether an Arbitrator’s order for costs, in circumstances where the original application is discontinued, is a decision that meets the threshold test in subsection 352(2) of the 1998 Act was also the subject of the decision in Grimson v Integral Energy [2003] NSW WCC PD 29 (‘Grimson’). 

22.There are two parts to the threshold test for leave to appeal under subsection 352(2) of the 1998 Act.  Subsection 352(2)(b) has no application where a ‘decision’ does not involve an actual monetary award of compensation (Mawson v Fletchers International Exports Pty Limited [2002] NSW WCC PD 5). However subsection 352(2)(a) must still be satisfied, with the amount of compensation at issue on the appeal being relative to the amount specified in the referral of the dispute to the Registrar for determination by the Commission (Ingram v Norco Co-operative Limited [2003] NSW WCC PD 1).

23.An order for costs does not concern an “amount of compensation”, either in the appeal, or in the original claim.  The costs associated with an application to the Commission are not themselves an amount of compensation under the Workers Compensation Acts (section 4 of the 1998 Act; see comments of Kirby ACJ, in Westpac Banking Corporation v Tomassian [1993] 32 NSWLR 207). In the circumstances of this case there was no “amount of compensation at issue on the appeal” as the substantive proceedings were to be discontinued. 

24.Where a matter has been discontinued, and there is effectively no dispute before the Commission about compensation between the parties, the application of the threshold test for leave to appeal, in subsection 352(2) of the 1998 Act is problematic.  This was discussed in Grimson, as follows:

Where a matter has been discontinued, and there is effectively no dispute before the Commission about compensation between the parties, its application is more problematic.  To interpret subsection 352(2) as having application only to decisions that concern an amount of compensation results in the unintended consequence of allowing review of all decisions where no compensation is in issue on the appeal, yet restricting review where less than $5,000 and 20% of the award is in issue.  It is difficult to conceive of other circumstances where no amount of compensation would be in issue in an appeal, other than the circumstances of this case, namely where the substantive matter is discontinued and an order for costs is made. 

Granting leave to appeal an Arbitrators’ decision, regardless of whether it concerns an “amount of compensation”, by reference to that decision or the worker’s claim, is inconsistent with the plain words of the section.  It is a general principle of statutory construction that all words in a statute are significant and should be given meaning and effect (Project Blue Sky Inc v Australian Broadcasting Authority [1998] 194 CLR 355).

An approach that gives little or no meaning to subsection 352(2) is also inconsistent with the clear intention of the legislature, and the purpose of the specific provision (section 352), namely to restrict the right of appeal from a decision of an Arbitrator to a Presidential Member (section 33 of the Interpretation Act 1987 provides that regard must be had to the purpose of an Act when interpreting its provisions).

This is not to say that the decision of an Arbitrator in relation to the costs of proceedings before them cannot be the subject of review by a Presidential Member.  Once the threshold test in subsection 352(2) is met, and other matters such as the time for filing of the appeal are addressed (352(4)) , the whole of the decision of the Arbitrator is then properly the subject of review. 

The preferred interpretation, in my view, is that the Commission, constituted by a Presidential Member, may grant leave only to appeal against a decision of an Arbitrator where there is an amount of compensation at issue on the appeal that is (a) at least $5,000, and, if a monetary award has been made, (b) at least 20% of that award.  The “. . . amount of compensation at issue on the appeal” is determined by reference to the amount of any monetary award made by the Arbitrator or, where no monetary award is made, the amount of the claim as particularized by the Applicant.

25.It is clear from the above discussion that subsection 352(2)(b) of the 1998 Act has no application where a ‘decision’ does not involve an actual monetary award of compensation.  However subsection 352(2)(a) must still be satisfied, with the amount of compensation at issue on the appeal being relative to the Arbitrator’s order, or the amount specified in the referral of the dispute to the Registrar for determination by the Commission. 

26.The anomaly created by the proposition that subsection 352(2) of the 1998 Act applies to a costs order, where the substantive proceedings have been discontinued, and without application of the monetary limitation in subsection 352(2)(a), is well illustrated by the facts of this case.  The Respondent submits that the costs in dispute in this matter amount to $2,530.  Were this “an amount of compensation at issue on the appeal”, leave would be refused.

27.The application for leave to appeal the decision should, for the reasons set out above, be refused.  It is therefore unnecessary to address the other issues in the appeal.

DETERMINATION OF LEAVE TO APPEAL

28.Leave to appeal against the decision of the Arbitrator is refused.

COSTS IN ARBITRATION PROCEEDINGS IN THE COMMISSION

29.I note that even in the event that leave to appeal should be granted, pursuant to subsection 352(2) of the 1998 Act, I would not interfere with the Arbitrator’s decision in this matter.

30.While the determination to refuse leave to appeal means that the substantive orders as to costs are not the subject of review, this appeal highlights the importance of legal practitioners being aware of the statutory provisions in relation to the awarding of costs in the Commission. 

31.The Commission is a non-adversarial dispute resolution environment where a legal practitioner’s lack of preparedness to proceed in a timely manner, and in accordance with the Rules, may attract an order for costs (see ADCO Constructions Pty Ltd v Ferguson [2003] NSW WCC PD 21). Part 8 of Chapter 7 of the 1998 Act provides for costs in relation to the ‘New claims procedures’ under the 1998 Act, including costs in relation to disputes referred to the Registrar for determination by the Commission pursuant to section 288 of the 1998 Act. Section 341 provides as follows:

341    Costs to be determined by Commission

(1)Costs to which this Division applies are in the discretion of the Commission.

(2)The Commission has full power to determine by whom, to whom and to what extent costs are to be paid.

(3)The Commission may order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 (or in relevant regulations under Division 4 of this Part) or on an indemnity basis.

(4)The Commission may not order the payment of costs by a claimant unless the Commission is satisfied that the claim was frivolous or vexatious, fraudulent or made without proper justification.

Note. A claimant can be ordered to pay the costs of an unsuccessful appeal. See section 345.

(5)If the Commission is satisfied that a part only of a claim was frivolous or vexatious, fraudulent or made without proper justification, the Commission may order the claimant to pay the costs relating to that part of the claim.

(6)Any party to a claim may apply to the Commission for an award of costs.

32.Section 344 of the 1998 Act provides as follows:

344    Liability of legal practitioner for client’s costs in certain cases

(1)The Commission may, at any stage of a matter, make one or more of the following orders in respect of a legal practitioner whose serious neglect, serious incompetence or serious misconduct delays, or contributes to delaying, the matter:

(a)   an order disallowing the whole or any part of the costs between the legal practitioner and his or her client,

(b)   an order directing the legal practitioner to repay to his or her client the whole or any part of the costs that the client has been ordered to pay to any other party,

(c)   an order directing the legal practitioner to indemnify any party other than his or her client against the whole or any part of the costs payable by the party indemnified.

(2)The Commission may refer a matter to a costs assessor for inquiry and report before making such an order.

(3)The Commission may order that notice of such an order against a legal practitioner is to be given to the legal practitioner’s client in a specified manner.

(4)A legal practitioner is not entitled to demand, recover or accept from his or her client any part of the amount for which the legal practitioner is directed by the Commission to indemnify a party pursuant to such an order.

(5)This section does not limit any other provision of this Part.

33.The Arbitrator thus had discretion in relation to the making of an award of costs pursuant to sections 341 and 344 of the 1998 Act.  As with any administrative discretion, this discretion must be exercised lawfully and fairly, taking into account the scope of the discretion and the objects or purpose for which it was conferred (Swan Hill Corporation v Bradbury [1937] 56 CLR 746 at 758; R v Australian Broadcasting Tribunal; ex parte 2HD Pty Ltd [1979] 144 CLR 45 at 49).

34.The Arbitrator set out the history of the proceedings in this matter in his brief statement of reasons.  A number of matters were clearly significant to the orders that were made, namely that:

·The Application did not include a statement of the worker, which meant that the worker was not permitted to give evidence in the proceedings (in accordance with Rule 16 (2) of the Interim Workers Compensation Commission Rules 2001. These Rules have now been replaced by the Workers Compensation Commission Rules 2003; the equivalent provision is Rule 38(2).)

·At the telephone conference on 15 July 2003, the Arbitrator made a number of Directions, including:

1.That the Applicant have leave to file and serve an amended Application to include a claim in regard to both arms at or above the elbow.  The Applicant to file and serve the amended application on or before 4.00pm on 29^th July 2003.

2.That the Applicant have leave to rely on a Statement of the Applicant to be filed and served on or before 4.00 pm 29^th July 2003.

·The Applicant failed to comply with the Directions made on 15 July 2003.  The Arbitrator noted in his reasons that “ [t]he explanation given for the failure to file the Statement was that a solicitor from the firm of Solicitors for the Applicant had left the firm”.

·The matter was listed for a conciliation/arbitration on 26 August 2003 at 10 am.  On that day the Solicitor for the Applicant failed to appear.  The Arbitrator notes in his reasons that: “[E]ventually someone from P K Simpson & Co did appear and sought an adjournment of the proceedings, which adjournment was refused.  The Applicant then sought to Discontinue, that Discontinuance was not opposed by the Respondent.”

35.Taking the above matters into account I am satisfied that the Arbitrator did not err in the exercise of the discretion to determine costs, pursuant to sections 341 and 344 of the 1998 Act. 

COSTS OF THE APPEAL

36.The appeal has been unsuccessful and costs of the appeal fall to be determined in accordance with section 345 of the 1998 Act.  That section provides, relevantly, that:

345Costs penalties where appeal unsuccessful

(1)On an appeal from the Commission constituted by an Arbitrator to the Commission constituted by a Presidential member:

(a)   if the appellant is the claimant and is unsuccessful on the appeal, the Commission must not make an order for the payment of the appellant’s costs on the appeal by any other party to the appeal, or

(b)   if the appellant is an insurer (other than a licensed insurer that maintains a statutory fund under the 1987 Act) and is unsuccessful on the appeal, the Commission may order the insurer to pay to the Authority for payment into the WorkCover Authority Fund an administration fee of $1,000 or such other amount, as may be prescribed by the regulations.

(2)If the appellant in any such appeal is a licensed insurer that maintains a statutory fund under the 1987 Act and is unsuccessful on the appeal:

(a)    the insurer’s costs on the appeal, and

(b)   the costs of any other party to the appeal that the insurer is ordered to pay,

are not to be paid out of the statutory fund.

(3)If an appeal concerns lump sum compensation, weekly payments of compensation or medical expenses compensation, the appellant is considered to be unsuccessful on the appeal unless the decision on appeal results in a change in favour of the appellant in the amount awarded or ordered to be paid in the decision appealed against of at least $5,000 (or such other amount as may be prescribed by the regulations) and at least 20% of the amount awarded or ordered to be paid.

(4)An administration fee that an insurer is ordered to pay is recoverable   as a debt due to the Authority.

(5)The Registrar is to notify the Authority of an order to an insurer under this section to pay an administration fee.

37.The parties are urged to come to an agreement as to costs in accordance with the above provisions.

Dr Gabriel Fleming
Deputy President

I certify that that this is a true and accurate record of the reasons for decision of Deputy President Dr Gabriel Fleming, Workers Compensation Commission

Registrar

Date: