Canham v Kenna Investments Pty Limited
[2006] NSWWCCPD 202
•25 August 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Canham v Kenna Investments Pty Limited [2006] NSWWCCPD 202
APPELLANT: Jillian Therese Canham
RESPONDENT: Kenna Investments Pty Limited
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC14575-04
DATE OF REGISTRAR’S DECISION: 22 March 2005
DATE OF APPEAL DECISION: 25 August 2006
SUBJECT MATTER OF DECISION: Costs – Investigation report, obtaining and reviewing medical reports, interest on costs.
PRESIDENTIAL MEMBER: Acting Deputy President Michael Snell
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: QBE Workers Compensation (NSW) Limited
ORDERS MADE ON APPEAL: Paragraphs 2 and 4 of the decision of the Registrar dated 22 March 2005 are varied, by deleting the figure of $4,198.28, and substituting a figure of $4,323.28 plus GST on the sum of $125.00. The decision of the Registrar is otherwise confirmed.
No order as to the costs of the appeal.
BACKGROUND
On 15 April 2005 Jillian Therese Canham (‘the appellant’) filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator.
The Respondent to the Appeal is Kenna Investments Pty Limited (‘the Respondent’).
The Registrar’s decision (by her delegate, a Commission Arbitrator) made on 22 March 2005, is as follows:
“1.Pursuant to an Agreement registered with the Commission of 1 July 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 $4,198.28.
3.The Applicant’s costs of the assessment are not allowed.
4.The Respondent is to pay the amount of $4,198.28 to the Applicant if these costs have not already been paid. This determination notes the apparent payment already made by the respondent of $3,125.78 within this assessment.”
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.”
The Appellant in its Appeal from the Registrar’s Determination on Costs, submits “The matter should not be dealt with on the papers and should be listed for oral submissions before the Registrar”. Clause 119 of the Workers Compensation Regulation 2003 (‘the Costs Regulation’) in fact provides for the appeal from the decision of the Registrar to lie to the Workers Compensation Commission (‘the Commission’) constituted by a Presidential member. The Respondent has not filed any documentation or submissions on the appeal, although a Certificate of Service confirms the insurer was served with the Appeal documentation on 20 April 2005. I have nine pages of written submissions by the Appellant’s solicitor, in support of the appeal. The Appellant has annexed to the Appeal a copy of the investigation report of St George Registration and Investigation Services Pty Ltd dated 23 December 2003, which represents one of the items the subject of the appeal. The scope of the appeal falls within relatively small compass.
Having regard to Practice Directions Numbers 1 and 6, and the documents that are before me, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
DISCUSSION
By way of background, the Appellant’s claim was one for lump sum compensation only, in respect of severe bodily disfigurement. The Appellant’s submissions on the appeal, at page 4, describe the Appellant as having a report of Dr Patrick, potentially entitling her to $9,000.00 for 18% severe bodily disfigurement. After some negotiation, the matter was resolved with the insurer direct, for $7,500.00, representing 15% severe bodily disfigurement. An agreement pursuant to section 66A of the Workers Compensation Act 1987 (‘the 1987 Act’) encapsulating this agreement was registered on 1 July 2004. An Application to Resolve a Dispute was never filed in the Commission. There is no indication liability was ever denied by the Respondent. The items the subject of this appeal fall within a few discrete areas, and it is convenient to deal with these in turn. The appeal to a Presidential member pursuant to Clause 119 of the Costs regulation lies as to matter of law.
Item 2.04
The first of the matters raised by the Appellant on this appeal relates to a disallowed claim of $375.00 for professional costs under Item 2.04. The item is described, in the original Application for Assessment of Costs, as occurring on 12 December 2003, and appears:
“Referring Applicant to medical practitioner:
-Dr Patrick
-Gerard Glancey
-Dr Patrick”
Item 2.04 provides for the recovery of costs for “Obtaining and reviewing medical reports (other than where Item 1.01 applies)”. Various sums are recoverable under this Item, to a maximum of $600.00.
The arbitrator, who determined the costs application as the Registrar’s delegate, had already made an allowance of $600.00 (the maximum available under the particular Item) for “Obtaining and reviewing medical reports” under Item 1.01. He dealt with the further claim under Item 2.04 in the following fashion:
“Claimed with reference to “Referring Applicant to medical practitioner” (Drs Patrick and Glancey). Item 2.04 is not a basis for a claim for “referring”. The utility or relevance of G Clancey (sic) in the proceedings is not apparent. In any event full allowance has already been made under the requisite heading at Item 1.01, and at the Table maximum; and further, in any event, allowances already made overall are regarded as fair and reasonable. This item claim is disallowed.”
On appeal, the claim in respect of G Glancey is not pressed, he being a psychologist who had provided a report dated 13 March 2002 (according to the Appellant’s submissions). It is conceded costs in relation to that report properly fell within Item 1.01, for which the maximum had already been allowed. However it is submitted Dr Patrick produced two reports both dated 12 December 2003, and sums of $150.00 (for the first report) and $75.00 (for the subsequent report) are recoverable for obtaining and reviewing these.
The claim for this item is inappropriately expressed in the original Application for Assessment of Costs. The Arbitrator was correct in observing Item 2.04 has no application to “referring Applicant to medical practitioner”. For current purposes, I will leave this deficiency to one side, and deal with the substance of the claim pursuant to Item 2.04, as it is dealt with in the submissions on the appeal.
The distinction the Appellant draws in her submissions between matters properly recoverable under Item 2.04, as opposed to Item 1.01, is to say Item 1.01 relates to medical reports a worker may give to her solicitor, for example from her general practitioner or addressed to an insurer, and Item 2.04 encompasses work relating to medico-legal reports.
Schedule 6 clause 1(2) of the Costs Regulation specifies the various costs recoverable, depending upon the purpose for which an activity is carried out, and by whom. It does so by reference to the Compensation Costs Table (‘the Costs Table’) contained in Schedule 6. Accordingly, in determining which of the various Items in the Table govern the costs recoverable for different activities, one must have regard to the purpose for which the activity is undertaken.
In Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 Fleming DP dealt, amongst other things, with the distinction between activities properly included pursuant to Item 1.01, as opposed to Item 2.04, in a claim for permanent impairment compensation. She found Item 1.01 had application to activities carried out prior to making a claim for the relevant compensation, and Item 2.04 applied to activities carried out after the claim had been made, but before the dispute was referred to the Commission (at [95] and [96]). The date on which the claim for permanent impairment compensation was made is set out in the original Application for Assessment of Costs, being 19 December 2003. Thus, the activity of obtaining and reviewing the medical reports of Dr Patrick occurred within the period during which such work was properly caught by Item 1.01, rather than Item 2.04. The Appellant having already recovered the maximum amount recoverable under Item 1.01, there are no further sums recoverable in connection with obtaining and reviewing the reports of Dr Patrick. Accordingly, the appeal in respect of Item 2.04 does not succeed.
Investigation Report
The balance of the Appellant’s submissions on this appeal deal with the investigation report of St George Registration and Investigation Services Pty Ltd dated 23 December 2003. The Appellant’s solicitors requested preparation of this report by letter of 22 October 2003 (before the claim was made) however the report post-dates the date of claim by four days. The disputed items are a sum of $100.00 pursuant to Item 2.05, together with the cost of the report itself, claimed as a disbursement at $2,385.63. Both of these items were disallowed.
The report (including annexures) is 108 pages in length. It includes a factual and liability summary, a statement of the Appellant, a business name search of the Respondent, multiple medical certificates and reports, copies of the Appellant’s taxation returns, a schedule of the Appellant’s earnings, photographs of the Appellant’s scarring, claim documentation, and (according to its index) original signed authorities.
Clause 82 of the Costs Regulation exempts “fees for investigators’ reports or other material produced or obtained by investigators (such as witness statements or other evidence)” from costs referred to by relevant Part of the Costs Regulation. Accordingly it is necessary to go to the Legal Profession Regulation 2005 (‘the LP Regulation’) (see Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 (‘Berger’) at [56], [68] and [71], Asimus v J.J. Walker, A.D. Walker & Temple Pty Ltd t/as Templemore Partners [2006] NSWWCCPD 113 (‘Asimus’) at [17] and [18]). 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%.”
Schedule 3 Part 1 Item 10 of the LP Regulation provides:
“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”.
In disallowing the item claimed for “briefing factual investigator” under Item 2.05, the Registrar’s delegate has effectively relied upon the following matters:
(i)the material in the investigation report was largely of a secretarial, administrative or clerical nature, and the “investigation” material was essentially with reference to a “statement” from the Applicant;
(ii)Item 2.05 refers to the factual investigation being for the purpose of obtaining evidence “other than witness statements”;
(iii)such investigatory matters must be, in overall allowances, fair and reasonable;
(iv)the appropriate allowance for taking a witness statement from a worker is found in Item 2.01 (obtaining instructions from client), which had already been allowed at the maximum of $500.00.
Although recovery of the sum claimed as a disbursement, for the cost of the investigation report, is governed by the provisions of the LP Regulation referred to at [18] and [19] above, the sum claimed for briefing the investigator is governed by Schedule 6 of the Costs Regulation. There is a further basis for disallowing the activity claimed under Item 2.05, in that the activity occurred on 22 October 2005, approximately two months before the claim was made. Applying the provisions in Schedule 6 clause 1(2) of the Costs Regulation, as explained in the passages of Berger referred to at [15] above, the activities described in Part 2A of the Costs Table (including Item 2.05) have no application as at 22 October 2005. The activity claimed under Item 2.05 would be properly disallowed for this reason alone.
The Reliance of the Registrar’s delegate on point (iv) referred to at [20] above is inconsistent with the reasoning in Berger at [141], and Asimus at [25]. I will return to this below. However overall I am in agreement with the Registrar’s delegate that briefing an investigator to produce this report was not, in the circumstances, fair and reasonable. Nor would I regard it as ‘necessary’, the term used in Schedule 3 Part 1 Item 10 of the LP Regulation, which governs the recoverability of the cost as a disbursement. The investigator carried out an interview of the Appellant by telephone (see page 6 of the report), and prepared a statement which is annexed to the report. The statement makes it clear the Respondent’s insurer had accepted voluntary liability at the time of the interview, and such liability had not been denied. The statement deals with some matters that are plainly irrelevant to the claim for lump sum compensation which was brought, such as instructing the investigator (sic) to make enquiries about bringing common law proceedings, and to write to WorkCover complaining about the state of the kitchen in which the Appellant was injured. The report includes a company search of the Respondent, not an activity it would normally be necessary to instruct an investigator to undertake. It annexes multiple documents the Appellant would already have been in possession of, such as the Appellant’s claim form, and WorkCover certificates from the Appellant’s treating medical practitioners. It includes copies of a number of the Appellant’s taxation returns, the oldest of which is for the year 1994/95. It includes a wages schedule. This in circumstances where liability for weekly compensation had been voluntarily accepted by the insurer, and the only action being pursued was for lump sum compensation pursuant to section 66 of the 1987 Act. The Appellant’s submissions also refer to the fact the investigators included photographs of the Appellant’s scarring, as justifying the incurring of this disbursement. Photographs were not, strictly speaking, necessary at that stage of the matter. Even if photographs were ultimately going to be of utility, there would be many cheaper and more efficient ways to arrange them, than having the investigators supply them as part of an investigation report.
Having regard to the nature of the claim available to the Appellant, the fact that liability was not in issue, and the nature of the investigation report, much of which was irrelevant to the claim pursued, the cost of obtaining it was, in my view, unreasonably incurred. It was properly disallowed by the Registrar’s delegate as a disbursement.
The Appellant’s submissions on the appeal include anecdotal reference to the recovery by insurers of their costs in arranging investigation reports in unrelated matters. Such matters are, in my view, plainly irrelevant to the question which had to be decided by the Registrar’s delegate, and which comes before me on this appeal, regarding the recoverability of the disbursement claimed for the cost of the investigation report, and the activity claimed pursuant to Item 2.05. There is an assertion at page 7 of the Appellant’s submissions that to deny the Appellant the cost of the investigation report as a disbursement would amount to a denial of procedural fairness. I can see no basis for an assertion the Appellant was denied procedural fairness. No proceedings were ever instituted in the Commission for recovery of compensation, the Appellant’s claim for lump sum compensation having been settled with relative promptness, after the claim was made. The only matter which has been before the Commission is the costs issues, dealt with by the Registrar’s delegate. The assertion that failure to allow the cost of the investigation report as a disbursement amounts to a breach of the rules governing procedural fairness is, in my view, misconceived.
Notwithstanding the above, the investigators did take a statement from the Appellant, albeit over the telephone. The statement would have been necessary for the purpose of annexure to an Application to Resolve a Dispute, if the matter had not resolved. As the date of the investigation report post dates (by a matter of days) the making of a claim, it is probably reasonable to regard Part 2A of the Costs Table as having application, at that point in time. As had been pointed out in Berger (at [141]) and Asimus (at [24] and [25]), the cost of preparing a witness statement is recoverable under Item 2.04A, where the claim cannot be brought without the statement. This is so even if the witness is the Applicant worker. This is so notwithstanding the allowance available under Item 2.01 for obtaining instructions. I am in agreement with the Registrar’s delegate that the obtaining of instructions (for up to two hours) under Item 2.01 will often be the item which covers costs involved in taking a statement from a worker, necessary for the filing of an Application to Resolve a Dispute. However, in so far as the Registrar’s delegate regarded the existence of Item 2.01 as necessarily being the item which must cover the activity of taking a statement of a worker, suitable for use in an Application to Resolve a Dispute, this is inconsistent with the passages of Berger and Asimus referred to, and amounts to error. Accordingly, whilst I confirm the disallowance by the Registrar’s delegate of both the cost of the investigation report as a disbursement, and the claim for an activity pursuant to Item 2.05, in my view it is appropriate to allow a sum pursuant to Item 2.04A, for preparing a witness statement of the Appellant.
Item 2.04A allows recovery at a rate of $100.00 per hour, to a maximum of $150.00. The Appellant’s Application for Assessment of Costs includes a breakdown of the costs charged by St George Registration & Investigation Services Pty Ltd. That reveals a telephone conference with the Appellant occupied forty-five minutes, the investigator spent thirty minutes dictating the statement, and a secretary spent one hour typing it. Excluding the typing, it is in my view reasonable to allow one hour and fifteen minutes at $100.00 per hour, a figure of $125.00, pursuant to Item 2.04A plus GST.
Interest
The Appellant at page 9 of her submissions makes a claim for “interest on the costs outstanding”. It is unclear whether the claim is one pursuant to section 109 or 110 of the Workplace Injury Management Act 1998 (‘the 1998 Act’). If it purports to be a claim for interest pursuant to section 109 (‘Interest before order for payment’), it has been held that such interest is discretionary, and must be claimed in any relevant application. In the absence of interest being claimed, there is nothing before the Commission to enliven the discretion to award it: Pasminco Ltd v Walters [2005] NSWWCCPD 30. In this instance, there was no claim for interest in the Application for Assessment of Costs, it was not a claim made before the Registrar’s delegate. Accordingly there was no order made for interest. There is no error in this, as the Registrar’s delegate would not have had jurisdiction to award interest, in the absence of it being specifically claimed.
It has been held in the Compensation Court of NSW that interest on costs and disbursements cannot be awarded unless they have been determined by the Court (Dyktynski v BHP Limited (1999) 18 NSWCCR 81), or agreed between the parties (Taylor v TNT (Aust) Limited (1999) 18 NSWCCR 6). Interest does not run on costs and disbursements until they have been quantified. Thus no order would have been available for interest on the Appellant’s costs (even if it had been claimed) prior to the determination made by the Registrar’s delegate.
If the Appellant’s claim for interest is properly understood as a claim pursuant to section 110 of the 1998 Act, then it runs as of right, unless the costs are paid within twenty-one days of assessment (section 110(3)(b)). There is no need for a further order of the Commission to achieve this result. The material filed by the Appellant does not indicate when the Respondent made payment of the sum previously assessed by the Registrar’s delegate. Thus it would be inappropriate for me to make any order, for the payment of interest pursuant to section 110 of the 1998 Act, on any sums which may have been outstanding from time to time, which formed part of the assessment made by the Registrar’s delegate on 22 March 2005.
DECISION
Paragraphs 2 and 4 of the decision of the Registrar dated 22 March 2005 are varied, by deleting the figure of $4,198.28, and substituting a figure of $4,323.28 plus GST on the sum of $125.00. The decision of the Registrar is otherwise confirmed.
COSTS
The Appellant’s appeal has largely failed. I make no order as to costs of the appeal.
Michael Snell
Acting Deputy President
25 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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