Brady v Moree Plains Shire Council
[2006] NSWWCCPD 167
•31 July 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Brady v Moree Plains Shire Council [2006] NSWWCCPD 167
APPELLANT: Daryl James Brady
RESPONDENT: Moree Plains Shire Council
INSURER:Gallagher Bassett Services (formerly Allianz Australia Worker’s Compensation (NSW) Ltd)
FILE NUMBER: WCC 20380-04
DATE OF REGISTRAR’S DECISION: 13 April 2005
DATE OF APPEAL DECISION: 31 July 2006
SUBJECT MATTER OF DECISION: Costs; procedural fairness
PRESIDENTIAL MEMBER: Acting Deputy President Julian Martin
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: A.O. Ellison & Co
ORDERS MADE ON APPEAL: 1. Paragraphs 2 and 4 of the Decision of the Registrar’s Delegate, dated 13 April 2005 are revoked and the following orders made in their place:
“2. The Applicant’s costs of the proceedings are assessed at $6,887.75.
4. The Respondent is to pay the amount of $6,887.75 to the Applicant if those costs have not already been paid.”
2.No order as to costs of the appeal.
BACKGROUND
On 28 May 2004 Daryl John Brady (‘Mr Brady’) commenced proceedings against Moree Plains Shire Council (‘Moree Council’) in the Workers Compensation Commission (‘the Commission’) seeking lump sum compensation. Liability was not in issue.
The matter was resolved between the parties during a telephone conference and a Certificate of Determination dated 26 August 2004 was issued. The Certificate included an order that the Respondent (‘Moree Council’) pay the Applicant’s (‘Mr Brady’) costs as agreed or assessed.
On 10 December 2004 Mr Brady filed an Application for Assessment of Costs.
On 14 December 2004 the Registrar sent a copy of Mr Brady’s Application for Assessment of Costs to Allianz Australia Worker’s Compensation (NSW) Ltd (‘Allianz’) pursuant to Clause 101 of the Workers Compensation Regulations 2003 (‘the Regulations’). Allianz was advised that written submissions in reply to the Application for Assessment of Costs were to be filed within 14 days and must be served on Mr Brady at the same time as, or prior to, filing with the Commission.
On 14 December 2004 a letter was sent to Mr Brady’s solicitor enclosing a copy of the letter sent to Allianz and stating that Mr Brady has 7 days from the date of service of Moree Council’s written submissions to file and serve written submissions in reply. The letter informed Mr Brady’s solicitor that costs will be determined by review of the Application for Assessment of Costs and written submissions.
On 22 December 2004 Moree Council’s solicitor filed written submissions in Reply and served a copy on Mr Brady’s solicitor on the same day.
Mr Brady’s solicitor made no response to the written submissions in Reply from Moree Council’s solicitors and an assessment of costs was determined by the Registrar’s delegate, a Commission Arbitrator, resulting in a decision handed down on 13 April 2005.
On 29 April 2005 Mr Brady filed an appeal against the Registrar’s assessment of costs. Moree Council filed a Notice of Opposition to the appeal, together with written submissions on 20 May 2005.
On 14 February 2006 Allianz advised the Registrar that Mr Brady’s claim had been moved from Allianz to Gallagher Bassett Services.
THE REGISTRAR’S DECISION
The Registrar’s decision by her delegate, a Commission Arbitrator, made on 13 April 2005 is as follows:
“1.Pursuant to an order dated 26 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 $7,176.50.
3.The Applicant’s costs of the assessment are not allowed.
4.The Respondent is to pay the amount of $7,176.50 to the Applicant if those costs have not already been paid.”
ON THE PAPERS
Mr Brady submits the matter should be dealt with by way of oral hearing “…because the cost of the private investigator is a cost, which the Applicant will have to bear”.
Moree Council submit that the matter should be dealt with ‘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.”
I have both the Commission file regarding the costs dispute and the appeal file which contains submissions on appeal from both Mr Brady and Moree Council. 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.
PRELIMINARY
Procedural Fairness
Part 19 of the Regulations govern both the procedure for assessment of costs and appeals against such an assessment.
Clause 100 of the Regulations provides for an application for assessment to be made in the approved form. Clause 100(2) of the Regulations states:
“(2)The application must authorise the Registrar to have access to, and to inspect, all documents of the applicant that are held by the applicant, or by any legal practitioner or agent concerned, in respect of the matter to which the application relates.”
Clause 103(1) of the Regulations provides:
“(1)The Registrar must not determine an application for assessment unless the Registrar:
(a)has given both the applicant and any legal practitioner, agent, client or other person concerned a reasonable opportunity to make written submissions to the Registrar in relation to the application, and
(b)has given due consideration to any submissions so made.”
Mr Brady submits that there was a denial of procedural fairness because the Registrar invited and allowed Moree Council to file written submissions in reply to the Application for Assessment of Costs. In support of this submission, Mr Brady submits that as the Commission adopts a ‘front end loaded’ system, the Registrar should have determined the issues aired in the Application for Assessment of Costs, and if undecided with regard to a particular issue, then sought documents from Mr Brady in accordance with clause 100(2) of the Regulations (see paragraph 16 above).
A denial of procedural fairness, if demonstrated, is an error of law. As Deputy President Fleming stated in Western Suburbs Leagues Club (Campbelltown) Limited v Bates [2006] NSWWCCPD 48:
“16.In Commission proceedings, the exact content of procedural fairness is determined by the provisions of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), the nature of the decision under review and the demands of the instant case (Kioa v West (1995) 159 CLR 550).”
I fail to see how there was any denial of procedural fairness here. The Registrar in accordance with clause 103(1) of the Regulations invited written submissions from Moree Council when forwarding a copy of Mr Brady’s Application for Assessment of Costs and at the same time invited Mr Brady to file written submissions in reply.
FRESH EVIDENCE
Mr Brady did not respond to the Registrar’s invitation to file written submissions in reply to Moree Council and the Registrar proceeded to deal with the Application.
Enclosed with the submissions on appeal Mr Brady has annexed copies of correspondence in support of these submissions. No explanation for those annexures is provided, but in effect it represents an attempt to introduce fresh evidence.
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.”
Moree Council submit that Mr Brady had the opportunity to file submissions in reply when invited by the Registrar on 14 December 2004 and should not be allowed to introduce fresh evidence at this late stage.
I agree with this submission by Moree Council as the annexures Mr Brady seeks to rely on in his submissions are copies of correspondence, presumably part of his solicitor’s file, pre-dating the Application for Assessment of Costs and as such were available at the time when the Registrar invited Mr Brady to file submissions in reply. I disallow the introduction of this fresh evidence.
On 10 October 2005 the Registrar received further submissions from Mr Brady’s solicitor in this appeal. These submissions again annexed further correspondence, presumably from Mr Brady’s solicitor’s file, that pre-dated the Application for Assessment of Costs. There is no indication that these further submissions and annexures have been served on Moree Council.
In the Appeal, the Registrar directed Mr Brady to serve a copy of both the Appeal and the Direction on Moree Council by 11 May 2005 and that Moree Council file a Notice of Opposition by 25 May 2005.
As these further submissions of Mr Brady’s received on 10 October 2005 were lodged well outside the timetable as directed by the Registrar, I disallow them. The fresh evidence annexed to those further submissions are disallowed for the same reasons as stated in paragraph 25 above.
SUBMISSIONS AND FINDINGS
Item 2.03
In the Application for Assessment of Costs, Mr Brady’s solicitor advised that item 2.03 was not in dispute. Enclosed with the Application for Assessment of Costs was a copy of the original bill of costs dated 24 August 2004 which was sent to Allianz on 29 September 2004. The bill of costs included Item 2.03 and claimed $40 for referring insurance reports to doctors on 30 March 2004.
In the Reasons for Decision the Registrar stated in paragraphs 8 to 13 as follows:
“8.The Respondent, in its solicitor’s submissions in reply dated 22 December 2004 pointed out that the Applicant’s solicitor had forwarded the Application for Costs directly to the Insurer despite the fact that the Insurer had instructed solicitors.
9.The Respondent therefore sought that the Respondent’s response to the Applicant’s claim for costs and disbursements dated 28 October 2004 and attached to the Application for Assessment of Costs should be disregarded as the Respondent was not aware of all of the activities that took place.
10.The Applicant’s solicitor made no reply to any of the matters raised in the Respondent’s submissions. In my view the circumstances set out by the Respondent’s solicitor warrant the Respondent’s own approach to costs and disbursements to be regarded in the light of the possibility that the Respondent Insurer may not have been aware of all that had transpired.
11.In the event the only Item which the Applicant’s solicitor recorded as being not in dispute which the Respondent’s solicitor put in issue was Item 2.03. In this regard the Respondent’s solicitor pointed out that none of the Respondent’s medical reports were forwarded to either the Applicant or the Applicant’s doctor for opinion, as the first medical report provided by the Respondent was that of Dr Oates of 11 March 2004 which was forwarded to the Applicant under letter dated 22 March 2004 and that the most recent report relied on by the Applicant was that of Dr Patrick of 27 January 2004.
12.It was submitted that no such reports were referred to doctors and this Item should be disallowed.
13.In the absence of any submissions from the Applicant’s solicitor and accepting the matters put forward by the Respondent’s solicitor as being correct it follows that the Applicant is not entitled to any award of costs under this item.”
In the submissions on Appeal, Mr Brady submits that in the bill of costs the Registrar was provided with the date the insurer’s reports were referred to doctors and the Registrar should have requested a copy of the letter. Mr Brady’s solicitor has annexed to the submissions, copies of correspondence that predate the Application for Assessment of Costs. This is in effect the same submission referred to above that there was a denial of procedural fairness. For the reasons stated above, I disallow this fresh evidence and do not accept this submission as Mr Brady was invited to file submissions in reply and failed to do so. As such I am of the opinion that there was no denial of procedural fairness and the Registrar correctly determined the matter on the available evidence.
Item 2.05
Mr Brady disputes Item 2.05 where the sum of $100 was sought. I fail to understand this submission because the amount sought was actually allowed. (see Schedule at page 7 of the Reasons for Decision).
Item 2.06
In the bill of costs, Mr Brady’s solicitor claimed $500 for requesting a review from the insurer on 21 April 2004. In his submissions annexed to the Application for Assessment of Costs Mr Brady’s solicitor stated:
“The Respondent’s insurance company has agreed to allow $250. In fact Allianz has stated that the previous Solicitor had made two attempts to get Allianz to review their determination.
Allianz had forced the Applicant’s previous Solicitors to make 2 attempts, the 2nd attempt, which should not have been made, and Allianz should pay for.
Further, when reviewing a file and requesting the insurer to review, it requires the Applicant to review all medical reports and other evidence before seeking a review of the claim by the insurer.
Therefore, we maintain the cost of $500.”
In the Reasons for Decision at paragraphs 23 and 24 the Registrar stated:
“23.The Respondent’s solicitor asserts that no such request was ever made and it invited the Assessor to have regard to any such letter.
24.No submission was received from the Applicant’s solicitor in this regard and in my view, given the emphatic assertion by the Respondent’s solicitor that no such request was made, the claim cannot be maintained.”
In the submissions on Appeal, Mr Brady’s solicitor has annexed copies of correspondence that predate the Application for Assessment of Costs. This is the same submission as for Item 2.03 and for the same reasons I disallow this fresh evidence and am of the opinion that the Registrar correctly determined the matter on the available evidence.
Agency Fees
Mr Brady sought the sum of $132 for St George Registration Investigation Services. The Registrar did not allow these fees on the authority of Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD33.
In the bill of costs the fees were claimed as a disbursement for photocopying at the Registry of the Commission. Mr Brady submits that the disbursement comes within clause 82 of the Regulations and as such are not regulated by Part 19 of the Regulations. Presumably it is suggested this represents an error of law. As Deputy President Fleming stated in Flegerbein v Tom B Blackburn Pty Ltd [2006] NSWWCCPD30 (‘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 Brady’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] NSWWCCPD33).”
Accordingly I am of the view the Registrar was correct in not allowing this disbursement.
Private Investigator’s Report
Clause 82 of the Regulations excludes certain costs, including investigator’s reports and witness statements or other evidence obtained by investigators, from Part 19 of the Regulations. These items must be assessed in accordance with the Legal Profession Act 2004 (‘the LP Act’) and the Legal Profession Regulation 2005 (‘the LP Regulation’) (Berger v Moree Plains Shire Council [2005] NSWWCCPD152 (‘Berger’s case’)).
In the Application for Assessment of Costs Mr Brady’s solicitor claimed the sum of $1,818.85 for a private investigator’s report. It is 25 pages long and includes a factual and liability summary and statements from Mr Brady and his wife.
Moree Council in their submissions in Reply stated that the issue in the case was the level of Mr Brady’s loss/impairment as liability was not in issue. Moree Council further submitted that there was no requirement for the obtaining of a factual report as Allianz had made an offer prior to the commencement of proceedings.
The Registrar in the Reasons for Decision stated that “It is clearly inappropriate in a matter where liability is not in issue that a factual investigation be commissioned by the Applicant.” The Registrar, however, allowed the sum of $250 for the cost of obtaining statements from Mr Brady and his wife.
Although the Registrar in the Reasons for Decision correctly stated that investigation costs “…are not regulated pursuant to Regulation 82(b)” of the Regulations, he then proceeded to (by her delegate a Commission Arbitrator) consider the costs pursuant to “Section [sic] 105 of the Regulations.”
It was an error of law in purporting to assess the costs of the investigation report pursuant to Clause 105 of the Regulations. As stated above, these items must be assessed in accordance with the LP Act and the LP Regulations. As Deputy President Fleming stated in Berger’s case:
“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.”
There being an error of law, in accordance with Clause 119 of the Regulations, I am entitled to make such determination in relation to the application, as in my opinion, should have been made by the Registrar.
As I stated above liability was not disputed in the substantive proceedings, the only issue being the degree of impairment/loss. There was no need for an investigator to make general enquiries into the circumstances of the injury and prepare a factual liability summary. There was also no need for a statement to be taken from Mrs Brady as liability was not in issue and an offer had been made prior to the commencement of proceedings. Except for the statement taken from Mr Brady, the investigator’s report was not reasonably incurred.
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 Brady’s statement was taken by an investigator it was not allowed under Item 2.04A.
The test of whether an investigator’s report, whether to obtain witness statements or other factual investigations (including a statement from the worker), is claimable will “….essentially be one of ‘reasonableness’.” (Berger’s case).
The statement of Mr Brady was taken over the phone by the investigator and took 1 hour 35 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 this case including:
· the fact that it was a telephone conference
· liability was not in issue
· the investigator is not a legal practitioner
· the time taken for the interview
I allow the sum of $150 (plus GST of $15) for the investigator’s report to allow for the time taken in relation to Mr Brady’s statement. As I consider the statement taken from Mrs Brady was not reasonably incurred in the circumstances there is no allowance for that statement.
In his submissions on Appeal, Mr Brady submits that the “Respondent whom has the wealth of the workers compensation insurance company and who is reimbursed by the very wealth [sic] WorkCover Authority of NSW, can request factual investigations which they can use to the detriment of injured workers, when they file that document with their Reply.” Mr Brady supports this submission by reference to several cases where insurers had outlaid substantial amounts on investigations.
As I stated above in paragraph 48 the test is essentially one of reasonableness having regard to the circumstances of these proceedings and an insurer’s conduct in another claim is not relevant to my determination in this case.
Mr Brady submits that “the costs of the private investigator are not subject to the Legal Professional Act 1987 [sic] because they are not legally qualified and the Legal Professional Act 1987 [sic] only applies to the legal professionals”. Presumably this is a general submission as the Registrar in the Reasons for Decision made no reference to the Legal Profession Act 2004. Nonetheless legal costs are defined in the LP Act as:
“Legal costs means amounts that a person has been or may be charged by, or is or may become liable to pay, to a law practice for the provision of legal services including disbursements but not including interest.”
In Berger’s case Deputy President Fleming stated:
“Clause 113 of the LP Regulation, applies to the assessment of costs for fees, for investigator’s reports or other material produced or obtained by investigators (such as witness statements or other evidence).”
Legal Costs of the Assessment
The Registrar stated in the Reasons for Decision at paragraph 44:
“The amount sought by the Applicant has been somewhat reduced, mainly by the disallowance of the investigator’s fees. In addition the matters that were in dispute became conceded by the Respondent’s solicitor. However, as the monetary value of these gains is very much out of proportion to the disallowance of the investigator’s fees, I believe the appropriate order is that each party bear their own Costs of the Assessment.”
Mr Brady submits that as he “succeeded on seeking the costs with regard to the legal solicitor’s professional fees”, he is entitled to costs of the proceedings. He further submits that as he is personally liable for the costs of the private investigator’s report, he is entitled to costs if he “beats the Respondent’s offer with regard to costs”. Moree Council submits that the costs order of the Registrar was appropriate.
Failure to exercise discretion according to the evidence, if demonstrated, is an error of law. I am of the view that the Registrar did not err in exercising the discretion to order that “…each party bear their own costs of the Assessment”, as Mr Brady overall had the amount sought reduced.
DECISION
A further issue arises in this matter, not raised by the parties to the appeal, but evident on the face of the Reasons for Decision. The Registrar at page 7 of the Decision set out in a Schedule the costs and disbursements allowed. There is an arithmetical error and the total amount should be $6,997.75 and not as stated, $7,176.50.
Having regard to my determination where the allowance for the investigator’s report was reduced from $250 plus GST to $150 plus GST, I make the following Decision.
Paragraphs 2 and 4 of the Decision of the Registrar’s Delegate, dated 13 April 2005 are revoked and the following orders made in their place:
“2. The Applicant’s costs of the proceedings are assessed at $6,887.75.
4.The Respondent is to pay the amount of $6,887.75 to the Applicant if those costs have not already been paid.”
COSTS
I make no order as to the costs of the appeal.
Julian Martin
Acting Deputy President
31 July 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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