Calleja v Real Foods Pty Limited

[2006] NSWWCCPD 175

WORKERS COMPENSATION COMMISSION

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

CITATION:Calleja v Real Foods Pty Limited [2006] NSWWCCPD 175

APPELLANT:  Francisco Javier Calleja

RESPONDENT:  Real Foods Pty Limited

INSURER:QBE Workers Compensation (NSW) Limited

FILE NUMBER:  WCC16446-04

DATE OF REGISTRAR’S DECISION:             13 April 2005

DATE OF APPEAL DECISION:  4 August 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:    No Appearance

ORDERS MADE ON APPEAL:  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 $5,983.11.

4. The Respondent is to pay the amount of $5,983.11 to the Applicant if those costs have not already been paid.”

No order as to costs of the appeal.

BACKGROUND

1. On 5 May 2005 Francisco Javier (‘the Appellant Worker’) filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator. 

1. The Respondent to the Appeal is Real Foods Pty Ltd (‘the Respondent Employer’).

1. The Registrar’s decision by her delegate, a Commission Arbitrator, made on 13 April 2005, is as follows:

“ 1.   Pursuant to an Agreement dated 29 June 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 as $3,566.36.

3.   The Applicant’s costs of the assessment are not allowed.

4.   The Respondent is to pay the amount of $3,566.36 to the Applicant if those costs have not already been paid.”

ON THE PAPERS

1. Section 354(6) of 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. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the Appellant Worker, 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. 

1. QBE Workers Compensation (NSW) Limited (‘QBE’) was served with the appeal papers on 11 May 2005 (Certificate of Service filed 17 May 2005) but has filed no documents and made no submissions in the appeal.

PRELIMINARY

1. An appeal from a decision of the Registrar or his delegate is under clause 119 of the Workers Compensation Regulation 2003 (‘the Costs 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 the grounds that the Registrar’s delegate erred in:

(a)allowing only $250.00 under item 2.06 of Schedule 6 of the Costs Regulation instead of $500.00, as claimed;

(b)allowing only $500.00 for two teleconferences under item 4.08 of the Costs Regulation;

(c)disallowing a claim for agency fees;

(d)disallowing a claim for the cost of a private investigators report;

(e)disallowing the Appellant Worker’s claim for lost wages expenses, and

(f)determining the total costs payable (regardless of the outcome of the appeal) to be $3,566.56 when the correct calculation was $5,789.11.

SUBMISSIONS AND FINDINGS

Item 2.06

1. This item in the Costs Regulation allows for the cost of “requesting a review of the claim from the insurer, prior to referral of the matter to the Commission”. The Appellant Worker has claimed the maximum amount recoverable under this item at the time the work was performed ($500.00) and has been allowed $250.00. The Statement of Reasons for Decision (‘Reasons’) indicate at paragraph 22 the Registrar’s delegate felt $250.00 was appropriate given that the claim was on for lump sum compensation only.

1. The Appellant Worker refers to and relies on a decision of Christian v Mayne Group Ltd WCC619-05.  In that decision the sum of $500.00 was allowed under item 2.06.  There is no statement of principle in that case that dictates that $500.00 should be allowed in every case where there has been a request for an insurer to review a claim.

1. There is no error of law in the approach or reasons of the Registrar’s delegate.

Item 4.08

1. This item deals with costs for “preparing for a conference (including providing advice to client)”.  The Appellant Worker claims $1000.00 for preparing for two conferences ($500.00 for each conference): the first, on 12 March 2004, and the second on 25 June 2004. 

1. In the Reasons at paragraph 26 no reference is made to the fact that there were two conferences but the sum of $500.00 was allowed. Schedule 6 Clause 2 (1) provides that “the maximum total costs for a type of activity or event in respect of an injury, regardless of how many times the activity or event is carried out, is the maximum set out in Column 4 of the table in relation to that activity or event”. It is submitted that the Registrar may, on application, order that that subclause (1) does not apply to costs incurred “if satisfied that the need for the costs to be incurred could not have been foreseen at the time that the costs for the type of activity or event concerned were first incurred in connection with the injury” (Schedule 6 Clause 2(3)).

1. No application was made to the Registrar under Schedule 6 Clause 2(3) and no order has been made pursuant to subclause (3). Therefore, the Registrar’s delegate was correct to allow only $500.00 for this item.

1. In addition, in Woodbury v Miles [2006] NSWWCCPD 55 it was noted at [22]-[23]:

“In Orr v Direct Couriers (Australia) Pty Ltd [2004] NSW WCC PD 28, Deputy President Fleming discussed the application of column 4 of the Table in Schedule 6. Column 4 bears the heading “Maximum total for type of activity/event”. With reference to clause 1(2) of Schedule 6, the heading for column 4, and the NSW Court of Appeal decision in Orellana-Fuentes v Standard Knitting Mill Pty Ltd (2003) 57 NSWLR 282 (‘Fuentes’), the Deputy President said at paragraph 38:
‘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 the event heading.’
23. Thus, in respect of Items 4.08 and 4.09, the legal practitioner may not be allowed more than the column 4 maximum regardless of the number activities/events of that type.  The column 4 maximum for Item 4.08 is $500 and for 4.09 is $1,000.”

1. Applying the above authority to the present case, I do not believe the Registrar has made any error of law in allowing the sum of $500.00 under this item even though there were two teleconferences.

Agency Fees

1. This item was claimed in the sum of $176.00 for work done by St George Registration and Investigation Services Pty Ltd (‘St George’) in attending at the Workers Compensation Commission’s (‘the Commission’) registry in Sydney to examine and copy documents.  The amount was disallowed by the Registrar relying on Dunn v Port Macquarie RSL [2004] NSWCCRPD 33 (‘Dunn’).

1. In Dunn it was held that the cost of reviewing documentation produced is covered under item 4.05. The Appellant Worker claimed the maximum under item 4.05 ($500.00) and agreed to accept the insurer’s offer of $125.00. It is submitted that it is illegal for a solicitor to pay an agent out of his professional costs. However, it is open to a solicitor to engage an ‘agent’ as defined in section 356(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). If a solicitor chooses to engage an agent who does not come within the definition of that term in section 356(6) that is entirely a matter for him/her. The Registrar’s delegate has made no error of law in refusing this item.

1. On appeal it is argued that the attendance by St George at the Commission to inspect documents produced and to “claim legal professional privilege comes under section [sic] 82 of the Regulation” (Appellant Worker’s submissions page eight). I assume this is a reference to clause 82(b) of the Costs Regulation which provides:

“82      Costs not regulated by this Part

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

(a) …

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

1. This regulation applies to enquiry or investigation work done into factual matters by investigators where that work is necessary in the particular case.  It does not apply to the examination of documents produced to the Commission with a view to advice being given on a question of legal professional privilege.  Work of that kind must be undertaken by a legally qualified person.  I therefore reject the submission that this cost is recoverable under clause 82.  It was not necessary or reasonable that the documents be examined by an investigator.

Private Investigator’s Report

1. As the cost of an investigator’s report is not regulated by Part 19 of the Costs Regulation, the provisions of clauses 105, 106, 110 and 111 of those 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 (‘Schedule 3’):

“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. The Registrar’s delegate was not satisfied that the cost of the investigators report was “fair, reasonable or necessary” (Reasons paragraph 44) and therefore disallowed the whole of the amount claimed. He did not consider the provisions of Schedule 3 above. He applied clause 105 of the Costs Regulation rather than Schedule 3 of the LP Regulation. The application of clause 105 of the Costs 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 Costs Regulation).

1. The first question in determining whether the cost of an investigator’s report is recoverable is to look at the nature of the claim and the matters in issue in the case. In this case the claim was for lump sum compensation for a back injury. The Application to Resolve a Dispute (‘the Application’) was registered in the Commission on 20 November 2003 and claimed 18% permanent impairment of the back under section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’) and $15,000.00 for pain and suffering. In its Reply to Application to Resolve a Dispute (‘Reply’) filed on 17 December 2003, QBE accepted liability and stated that arrangements had been made for an assessment by an orthopaedic surgeon

1. An assessment was arranged by an Approved Medical Specialist (‘AMS’) who issued a Medical Assessment Certificate (‘MAC’) on 28 May 2004 certifying the Appellant Worker to have a 10% permanent impairment of his back as a result of his work injury.  The case was settled in June 2004 for 10% permanent impairment of the back plus $1,541.52 for hospital and medical expenses under section 60.  An Agreement to Discontinue Proceedings was filed on 29 June 2004.

1. The disputed factual investigator’s report was requested by letter dated 10 September 2003.  The report includes a general summary of the Appellant Worker’s 11 pages statement which was taken in over the phone. 

1. The Workers Compensation Commission Rules (‘the Rules’) require in Rule 38 that all an Applicant must lodge and serve with his/her Application all information and documents on which he/she intends to rely.  In a claim for lump sum compensation it is essential that a statement be obtained from the Applicant and served with the Application.

1. The Appellant Worker’s solicitor makes no claim under item 2.04A of the Costs Regulation. That item allows $150.00 for the cost of preparing a witness statement “where a claim cannot be brought without a witness statement”. In my opinion it would have been preferable if the Appellant Worker’s 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.

Travelling Expenses

1. The Registrar’s delegate allowed travelling expenses of $132.36 for the Appellant Worker.  An amount of $216.40 claimed for lost wages was not allowed because no evidence was provided in support of that claim.  A letter alleged to have been attached to the original Application for Costs Assessment (‘the Costs Assessment’) was not attached.  On appeal the Appellant Worker has attached a letter from Ausscot Systems dated 24 June 2004 setting out the Appellant Worker’s income.  There is no provision for the admission of fresh evidence on an appeal from the Registrar on a question of costs.  Appeals are restricted to errors of law only.  The Registrar’s delegate made no error of law in not allowing the lost wages claimed.  If I am wrong on this point I would not allow the claim for lost wages in any event as the letter relied on does not provide any evidence that the Appellant Worker actually lost income as is claimed.

Interest

1. It is submitted that the “with regards to items 1.01 to item 4.09, the Applicant received back $2,875.00 and the Respondent was willing to pay $1,425.00” (Appellant Worker’s submissions page 14).  Therefore, it is submitted that the Appellant Worker “should be entitled to interest and costs of these proceedings”.

1. In the original Costs Assessment the Appellant Worker claimed a total of $13,487.23 for costs and disbursements.  The Registrar’s Delegate allowed $3,566.56.  On appeal I have allowed an additional $110.00 to allow for the necessary and reasonable cost of taking a statement from the Appellant Worker and recalculated the assessed costs to add items not in dispute (omitted by the Registrar’s delegate) giving a final assessment of $5,983.11.  In these circumstances I decline to allow interest or costs of the proceedings.

Correct Calculations

1. The Registrar’s delegate has in his calculations failed to allow for costs that were not in dispute (Reasons paragraph 10).  These were $1,687.50 plus GST of $168.75, totalling $1,856.25 which must be added to the costs assessed.

1. In addition, the Schedule on page seven of the Reasons contains an error in that it omits any allowance for item 4.08.  What was disallowed was the claim for $500.00 for the second teleconference.  The claim for $500.00 for the first teleconference was allowed (Reasons paragraph 24) and should have been included in the schedule. 

1. Of the items in dispute on appeal the Appellant Worker has failed on every item save that he has recovered $100.00 plus $10.00 GST for the cost of obtaining a witness statement.

1. Making these adjustments and recalculating the schedule the correct assessment is as follows:

(a)items not in dispute   1,687.50

(b)items allowed by the Registrar’s delegate  2,625.00

(d) Costs Allowed  4,312.50
(e)  GST on costs allowed  431.25
(f)  Disbursements Allowed  1,138.73
(g)  GST on disbursements allowed (but not on travel expenses)   100.63

Total Costs and Disbursements Assessed, including GST        $5,983.11

1. The disbursements allowed above are:

(a)Medical reports  830.00

(b)Travel Expenses  132.36

(c)Conduct Money  76.37

(d)Investigators Report  100.00

1,138.73

(e) GST (excluding GST on travel expenses of $132.36)              100.63

Total Disbursements allowed, including GST  $1,239.36

DECISION

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 $5,983.11.

   4.The Respondent is to pay the amount of $5,983.11 to the Applicant

   if those costs have not already been paid.”

COSTS

1. No order as to costs of the appeal.

Bill Roche

Acting Deputy President

4 August 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