Cavanagh v Manning Valley Race Club Limited

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Cavanagh v Manning Valley Race Club Limited [2023] NSWPIC 291
APPLICANT:	Anthony Cavanagh
RESPONDENT:	Moonee Valley Race Club Ltd
PRINCIPAL MEMBER:	Glenn Capel
DATE OF DECISION:	20 June 2023
CATCHWORDS:	WORKERS COMPENSATION - Assessment of costs; Court of Appeal ordered the respondent to pay the applicant’s costs in respect of the substantive proceedings in the District Court and in the Court of Appeal in accordance with Schedule 7 of the Workers Compensation Regulation 2016; parties unable to reach agreement before and after a preliminary conference; applicant withdrew claim for some disbursements and sought the maximum costs in accordance with Schedule 7; disbursements agreed apart from the fees for an engineer’s report and an accountant who calculated interest; itemised bill quantified professional costs of $151,990.85 inclusive of GST; bill on assessment reduced to $118,533.25 inclusive of GST; Held – it was reasonable for the applicant to retain an expert engineer and an accountant; their fees were fair and reasonable and not unreasonably incurred; respondent ordered to pay $93,694.40 inclusive of GST being the maximum payable for professional costs in accordance with Schedule 7, plus disbursements as agreed or assessed, including the applicant’s cost assessor’s fees; respondent ordered to pay the Personal Injury Commission’s costs of the assessment.
DETERMINATIONS MADE:	The Commission notes: 1. The Consent Orders filed in the Supreme Court, Court of Appeal, in matter no. 2021/00199371 ordered that the respondent pay the applicant’s costs in respect of the substantive proceedings in the District Court and of the appeal in accordance with Schedule 7 of the Workers Compensation Regulation 2016. The Commission orders: 2. The respondent to pay to the applicant’s solicitor the following within 28 days of this assessment: (a) professional costs in the sum of $93,694.40 inclusive of GST; (b) disbursements in the sum of $44,159.47 inclusive of GST, and (c) costs of the assessment in the sum of $11,833.53 inclusive of GST in respect of the fees of National Costing Lawyers Pty Ltd. 3. The respondent to pay to the Commission within 28 days of this assessment the following: costs of the assessment in the sum of $4,801.30.

(a)

STATEMENT OF REASONS

BACKGROUND

Anthony Cavanagh (the applicant) sustained injury to his neck and right shoulder during the course of his employment with Manning River Race Club Ltd (the respondent) between June 1999 and 25 February 2011. He was incapacitated for work until 27 July 2018.
Liability was accepted by Racing NSW (the insurer) and weekly compensation, lump sum compensation and medical expenses in the sum of $89,184.11 were paid.
The applicant commenced proceedings for lump sum compensation in the Workers Compensation Commission (the Commission) on 27 June 2019 in matter no. 3173/19.
In a Medical Assessment Certificate dated 22 October 2019, the applicant was assessed as having 27% whole person impairment of the cervical spine due to injury sustained on
25 February 2011.
On 20 January 2020, the applicant filed an Application for Mediation in matter no. 240/20 in the Commission. A mediation conference was convened before Mediator McIlwaine on
17 March 2020 but was unable to resolve.
A Certificate of Mediation issued on 30 March 2020 that certified the final offers of the parties as $800,000 clear of workers compensation payments made to date plus costs for the applicant, and $89,184.11 plus costs, inclusive of workers compensation payments made to date, for the respondent.
The applicant commenced proceedings in the District Court in matter no 2020/00122796. On 17 June 2021, Curtis ADCJ entered judgment in the respondent’s favour. The applicant lodged an appeal against this decision.
On 15 March 2022, the Court of Appeal in matter no. 2021/00199371 allowed the appeal and set aside the District Court judgment. Consent orders were filed on 17 April 2022 awarding damages, including interest, in the sum of $1,267,945.53, with credit for compensation of $89,184.11. In relation to costs, the parties agreed to the following orders:
1.“ The respondent to pay the appellant’s costs in respect of the substantive proceedings in the District Court and of this appeal in accordance with the Workers Compensation Regulation 2016 – Schedule 7, and
2.The respondent is to pay the appellant’s costs in respect of the Section 151D Notice of Motion in the District Court as agreed or assessed.”
On 27 September 2022, the applicant’s solicitor submitted a memorandum of costs and disbursements to the respondent’s solicitors in the sum of $137,853.87, comprising professional costs of $85,176.73 plus GST of $8,517.67, and disbursements of $41,637.10 plus GST of $2,522.37. This letter was apparently served on the respondent’s solicitor on
30 September 2022. The respondent’s response to this correspondence is not before me.
On 28 February 2023, the applicant’s solicitor filed an Application for Assessment of Costs in the Commission.
On 6 March 2023, a delegate of the President, Parnel McAdam, issued a Direction. He set a timetable for the filing of submissions in the event that costs had not been paid and directed that the matter would be referred to the Division Head of the Workers Compensation Division for further action.
The respondent filed submissions on 13 March 2023. The applicant filed submissions that attached some relevant documents on 21 March 2023. I also issued Directions for further submissions as detailed below.

PROCEDURE BEFORE THE COMMISSION

I convened a preliminary conference on 3 April 2023. Mr Abouchrouche, solicitor, appeared on behalf of the applicant, and Mr Marsh, solicitor, appeared on behalf of the respondent.
I clarified what items had been agreed or withdrawn, and those items that were in dispute. After the adjustments, the claim for disbursements amounted to $44,159.47 inclusive of GST.
The items that were agreed were as follows:
a. report of Dr Spittaler dated 31 May 2019 - $631.51, and
b. ASIC search - $139.96.
The items that were withdrawn were as follows:
a. Council of Law Case Record – $19.80 withdrawn, and
b. photocopying expenses - $13,640 withdrawn.
The items that were disputed were as follows:
a.     report of David Dubos Consulting dated 16 January 2019 - $5,486.80;
b.     report of Dolman Bateman dated 23 March 2022 - $5,967.50, and
c.     professional costs- $93,694.40.
I asked if there had been any discussions regarding a resolution of the dispute.
Mr Abouchrouche advised that his original costs and disbursements amounted to $154,275.31, and he confirmed that he had reduced this amount to $137,853.87 inclusive of GST.
Mr Marsh informed me that the respondent had responded with a global settlement figure of $101,303 inclusive of GST.
I encouraged settlement discussions and expressed some preliminary views about the items in dispute. Mr Abouchrouche indicated that he was prepared to reduce his professional costs by 10%, and the fee for the report of Dolman Bateman by 50%, giving a final figure of $125,484.07 inclusive of GST. I asked the respondent to consider an increase in its offer, I was told by Mr Marsh that the respondent maintained its position.
I issued a Direction in the following terms:
“The Commission notes:
a.     The parties have reached agreement regarding the disputed disbursements (inclusive of GST) as follows:
i.Report of Dr Spittaler dated 31 May 2019 - $631.51
ii.ASIC Search - $139.96
iii.Council of Law Case Record – $19.80 withdrawn.
iv.Photocopying expenses - $13,640 withdrawn.
b.    The matters in dispute are as follows:
i.Report of David Dubos Consulting dated 16 January 2019 - $5,486.80.
ii.Report of Dolman Bateman dated 23 March 2022 - $5,967.50
iii.Professional Costs- $93,694.40
The Commission directs:
c.     The applicant is to file and serve by 28 April 2023:
i.An itemised tax invoice from David Dubos Consulting.
ii.An itemised tax invoice from Dolman Bateman.
iii.A detailed bill of Professional Costs
d.    The respondent is to file and serve submissions by 22 May 2023.
e.     The applicant is to file any submissions in reply by 29 May 2023.
f.     The submissions of both parties are to address whether the applicant is entitled to claim the costs of the assessment in addition to the professional costs and whether the respondent should pay the Commission’s costs - Regulation 116(4) of the Workers Compensation Regulation 2016.
g.    At the conclusion of the time allowed for submissions the assessment of the applicant’s costs will be determined ‘on the papers’.”
Written submissions were filed by the applicant with a bill of costs and tax invoices from David Dubos Consulting and Dolman Bateman & Co Pty Ltd on 28 April 2023. Written submissions were filed by the respondent on 23 May 2023. Written submissions in reply were filed by the applicant on 29 May 2023.
After reviewing the submissions of the parties, I was not satisfied that there had been compliance with my Direction. Accordingly, I issued a further Direction on 30 May 2023 as follows:
“The Commission notes:
1.     The parties filed submissions on 28 April 2023, 23 May 2023, and 29 May 2023.
2. The submissions do not address whether the respondent should pay the Commission’s costs - Regulation 116(4) of the Workers Compensation Regulation 2016.
The Commission directs:
3.     The applicant is to file and serve submissions by 5 June 2023.
4.     The respondent is to file and serve submissions by 9 June 2023.
5.     Any submissions in reply are to be filed and served by 14 June 2023.
6.     At the conclusion of the time allowed for submissions the assessment of the applicant’s costs will be determined ‘on the papers’.”
Written submissions were filed by the applicant on 5 June 2023 and by the respondent on
9 June 2023.
Upon review of the respondent’s submissions, I was not satisfied that they addressed whether the respondent should pay the Commission’s costs. Accordingly, I arranged for an email to be sent to the parties, directing that the respondent file and serve submissions regarding this issue by close of business on 15 June 2023.
Written submissions were filed by the respondent on 15 June 2023.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
In considering this assessment, I will describe the plaintiff as the applicant, and the defendant as the respondent.

ISSUE FOR DETERMINATION

The parties agree that the following issue remains in dispute:
a. assessment of the applicant’s costs and disbursements.

EVIDENCE

I have reviewed the documents attached to the submissions filed on 13 March 2023,
23 March 2023 and 28 April 2023.
I do not have the benefit of the documents that were filed in the District Court or Court of Appeal, however, it is clear from the judgments that the respondent denied breach of duty, alleged contributory negligence, and denied that the applicant had suffered the losses as alleged.
The memorandum of costs and disbursements dated 27 September 2022 sets out the professional costs in the sum of $93,694.40 inclusive of GST and disbursements of $60,580.91 inclusive of GST. Some of the disbursements have already been reduced or withdrawn.
There are tax invoices from MA Financial Group Legal Funding in respect of the report of David Dubos Consulting Pty Ltd and the tax invoice from Dolman Bateman & Co Pty Ltd do not disclose any breakdown of the fees charged.
Fiona Bateman of Dolman Bateman & Co Pty Ltd provided a report in respect of interest on 23 March 2022. She calculated interest in the sum of $169,739.74. This figure was adopted when the parties executed consent orders.
Two reports by an independent costs assessor, Alan Adrian, of QICS (Australasia) Pty Ltd, quantified the applicant’s professional costs for work undertaken in the period
6 October 2017 to 3 May 2021, plus a four day hearing in the District Court, in the sum of $98,681.25 inclusive of GST.
The itemised bill of costs dated 28 April 2023 drafted by National Costing Lawyers Pty Ltd was attached to the applicant’s submissions filed on 29 May 2023. It identified the employees who undertook various tasks on behalf of the applicant from 11 October 2017 until
12 April 2022. The costs assessor quantified the applicant’s party/party costs in the sum of $151,990.85 including GST. The memorandum of fees for drafting the bill was $15,199.09 including GST, representing 10% of the professional costs.
The tax invoice from Dolman Bateman & Co Pty Ltd dated 13 April 2023 provided a breakdown of the invoice dated 23 March 2022. The hourly rate charged was $480 for a senior associate, $220 for a junior accountant and $580 for a partner. The total fees were $5,425 plus GST.
The tax invoice from David Dubos Consulting Pty Ltd dated 11 December 2018 was based on an hourly rate of $390, and the total fee was $5,486.80.

APPLICANT’S SUBMISSIONS

In his submissions dated 21 March 2023, Mr Abouchrouche submits that the Commission should allow the maximum entitlement under Schedule 7 of the 2016 Regulation because this would be consistent with the orders of the Court of Appeal and cl 110 of the 2016 Regulation. The maximum figure can be reduced in accordance with the criteria in cl 116 and cl 117 of the 2016 Regulation. He submits that the respondent bears the onus and the lack of an itemised bill is irrelevant.

Mr Abouchrouche submits that although cl 116 and cl 117 of the 2016 Regulation provide a discretion when assessing party/party costs to consider factors such as fairness and reasonableness, cl 110 fetters that discretion and encourages awarding maximum costs payable. Accordingly, the applicant should be entitled to the maximum costs.
Mr Abouchrouche submits that the Commission must give effect to Schedule 7 of the 2016 Regulation and the stage at which the proceedings were finalised. Other factors can then be taken into consideration in deciding whether a reduction is warranted. An itemised bill is not required given its cost.
Mr Abouchrouche submits that according to a short form cost assessment performed for internal purposes that is attached to his submissions, the work performed before the substantive hearing is evidence of the reasonableness of the fees claimed because the fees assessed then were similar to the fees being claimed now under Schedule 7 of the 2016 Regulation. The assessment did not include the additional work undertaken for the hearings in the District Court and Court of Appeal.
Mr Abouchrouche submits that the applicant is claiming stage 6 costs under Schedule 7 of the 2016 Regulation. The work that was carried out was the investigation, preparation and litigation of a work injury damages claim from initial instructions, investigation including the commissioning of expert and medical evidence, service of a pre-filing statement, attendance and participation in mediation, commencing proceedings in the District Court, a four day District Court hearing (plus one cancellation day due to the illness of the respondent’s counsel), an appeal to the Court of Appeal, a hearing of the Appeal before a full bench, a determination of that appeal through to judgment, the negotiation of pre-post judgment interest and an assessment of costs. The work undertaken was necessary and the maximum fees claim are appropriate.
Mr Abouchrouche submits that the respondent’s conduct should be considered when assessing the factors of fairness and reasonableness. The respondent put the applicant to task on every issue. It made no offer at the mediation apart from the past weekly payments made. The respondent did not make any formal offers to resolve the costs dispute at any time after the commencement of proceedings in the District Court and Court of Appeal. In the circumstances, the work undertaken was reasonable and absolutely necessary.
Mr Abouchrouche submits that the matter involved a nature and conditions of employment injury which occurred over a period of six years, with a deemed date of injury in 2010. It had a complex factual matrix where causation, the duty of care and breach were all disputed. The matter was heavily contested, and the applicant was put to the proof on every issue. Both junior and senior counsel were briefed to advise and appear at the substantive hearing and at the appeal.
Mr Abouchrouche submits that the full cost of the report of David Dubos Consulting Pty Ltd is pressed. The report was relied upon by the applicant and was tendered in evidence.
Mr Abouchrouche submits that the full cost of the report of Dolman Bateman & Co Pty Ltd is pressed. The report was relied upon in the proceedings and was provided to the respondent. It would have been tendered as evidence if the amount of interest was disputed.
Mr Abouchrouche submits that the interest calculation was complex and required accurate forensic accounting, given that the damages in dispute covered an 11 year period. He rejects the submission that the calculation of interest is within the skillset of a solicitor. The report was utilised by both parties to come to an agreed figure on interest and would have assisted the Court if a finding had to be made. The costs were reasonably incurred and the respondent was aware that it was being commissioned.
Mr Abouchrouche submits that the applicant should be awarded the cost of this application if he is successful in achieving the maximum fees for professional costs.
In his submissions filed on 28 April 2023, Mr Abouchrouche submits that the itemised bill of costs exceeds the maximum payable under the schedule by $60,000, so the applicant maintains that the maximum fees should be payable.
Mr Abouchrouche submits that cl 116(4) of the 2016 Regulation empowers the Commission to award the costs of the parties to the assessment, and the Commission. He submits that this means that the Commission can award costs separately concerning the work performed by the applicant’s solicitors.
Mr Abouchrouche submits that if the maximum costs are awarded, the applicant will not make a separate claim for legal professional costs associated with the assessment, otherwise the applicant will claim $4,600 plus GST (being $575 plus GST per hour for eight hours).
Mr Abouchrouche submits that the Commission has the power to award the payment of the costs assessment, including any disbursement incurred such as the cost of the itemised bill of costs. He submits that the respondent was aware of the anticipated cost and insisted on an itemised bill. It was reasonable for the applicant to incur this disbursement in the circumstances.
Finally, in the submissions filed on 29 May 2023, Mr Abouchrouche submits that the dispute and arguments raised by the respondent are not in the spirit of the scheme and not in keeping with the intent behind the costs provisions. Complaints regarding whether the partner undertakes the work and the use of 6-minute time recording units is inappropriate when it is the accepted legal practice without scale costs or regulated fees.
Mr Abouchrouche submits that the applicant presses for the maximum amount permissible, together with the disputed disbursements and the cost of the assessment, including the time applied by him to the cost assessment itself.
Mr Abouchrouche submits that the itemised bill of costs was commissioned as requested by the Commission and as demanded by the respondent. It was done in good faith and not as a claim for costs generally, so that the Commission had sufficient evidence and comfort to conclude that the work undertaken supported the maximum costs were payable under Schedule 7 of the 2016 Regulation.

Mr Abouchrouche submits that the itemised bill of costs was not commissioned so that the respondent could undertake a line-by-line objection to each item identified, a process that is inconsistent with an assessment under Schedule 7 of the 2016 Regulation. He submits that the applicant does not propose to reply in such a fashion to each objection but will respond to the respondent's global objections.
Mr Abouchrouche submits that the arguments against the use of time recording are irrelevant in an assessment that is subject to the maximum costs provisions. He challenges the respondent’s submissions regarding conglomeration, excessive time charged and who should have undertaken various tasks. He submits that such submissions are irrelevant to a cost assessment of regulated costs under Schedule 7 of the 2016 Regulation. He submits that cl 110 of the 2016 Regulation requires the cost assessment to take place in a way that gives effect to the maximum cost provisions.
Mr Abouchrouche submits that considerations such as fairness, reasonableness and necessity come into play in reviewing whether an item or work was done, whether it was done fairly and reasonably, and whether it was necessary for the progression of the matter. Even if some substantive items can be successfully disputed, this is insufficient to warrant an award below the maximum. Further, the amounts charged are fair and reasonable, and in any event, this is irrelevant given the maximum costs provisions provide for a global assessment of costs.
Mr Abouchrouche challenges the respondent’s submission regarding the lack of detail in the bill, but there can be no question that it was fair and reasonable to undertake the various tasks, irrespective of the time taken, which was not excessive.
Mr Abouchrouche maintains that the person who performed the work was the appropriate person to perform that work, and in any event, in the context of maximum costs, who does the work is far less important than whether the work done was necessary and conducted fairly and reasonably. The hourly rates claimed are consistent with "Guideline of Costs Payable Between Parties Under Court Orders" published by the NSW Costs Assessment Rules Committee, and the rates submitted by the respondent are significantly lower than these rates. The partner rate claimed is towards the lower end of the range recommend in the Guideline. It was appropriate for the partner to undertake the tasks.
Mr Abouchrouche submits that the applicant should not be punished in having to bear the cost of the assessment in circumstances where its provision was forced by the respondent. The Commission has the power to order the payment of the costs assessment, and the invoice for the preparation of the itemised bills falls squarely within the power under the 2016 Regulation.
In his submissions dated 5 June 2023, Mr Abouchrouche submits that cl 116(4) of the 2016 Regulation provides that the Commission has a discretion as to who and to what extent the costs are paid, including the costs of the Commission. The quantum and the recovery of the costs is governed by cl 119 and cl 122 (1) of the 2016 Regulation.
Mr Abouchrouche submits that the respondent should bear the Commission’s costs, rather than the applicant. The applicant had been willing to negotiate costs at the teleconference, but the first offer was rejected. The respondent made only one offer and was not prepared to negotiate.
Mr Abouchrouche submits that the applicant had no option but to proceed to a cost assessment process and had to obtain an itemised bill setting out the nature of the work performed as the respondent’s insistence. It was reasonable to carry out the assessment, that the work performed in carrying out the assessment was reasonable, and that the amount sought is also reasonable.
Mr Abouchrouche submits that the amounts claimed by the applicant were fair, reasonable, and reasonably expected in a matter which was heard in the District Court, proceeded to an appeal in the Supreme Court, and remains under consideration before the Commission. The maximum provisions already cap the applicant's fees, and it would be inequitable for those fees to be diluted further to pay for a cost assessment process that the applicant was forced into due to the rigid position employed by the respondent.

RESPONDENT’S SUBMISSIONS

The respondent’s submissions filed on 13 March 2023 include comments regarding items that are no longer in dispute. I will focus this summary of the disputed items.
Mr Marsh submits that it does not automatically follow that the applicant is entitled to the maximum costs in a work injury damages matter. This is subject to the benchmark of “fairness and reasonableness”, and the matters in cl 117 of the 2016 Regulation.
Mr Marsh submits that the applicant’s claim for maximum costs is not fair and reasonable. The applicant has not provided an itemised account of the work performed, identify who performed the work, the time spent on each task and the hourly rates claimed. He submits that in the absence of such information, the Commission should not allow more than $45,000 plus GST for professional fees, which is the equivalent of 90 hours at $500 per hour plus GST.
Mr Marsh submits that the invoice from David Dubos Consulting Pty Ltd does not provide a breakdown of the amount of work performed and the rate sought to be charged for the work. He submits that the respondent objects generally to the amount claimed of $5,486.80 as being fair and reasonable.
Mr Marsh submits that the respondent disputes the entire claim for the reports from Dolman Bateman & Co Pty Ltd in the amount of $5,967.50 (inclusive of GST), which relate to calculation of interest. The calculation of interest is a mathematical exercise and within the skills of a solicitor. Accordingly, these costs were not reasonably incurred.
In his submissions dated 23 May 2023, Mr Marsh takes issue with the 6-minute time units used by the applicant. Whilst he concedes that it is an industry standard, he submits that it is only fair and reasonable when applied correctly, otherwise it artificially inflates the time actually taken to undertake the task.
Mr Marsh submits that the applicant should only be able to recover an amount commensurate with actual time to undertake work done which produces a fair and reasonable amount of costs for the work concerned. He cites multiple entries on the same days in June and November 2018, December 2019, January 2020 and February 2020 which could have been consolidated into one entry.
Mr Marsh submits that throughout the itemised bill, there is a lack of detail provided in the description supporting the costs claimed. For example, the number of reports or size of the documents reviewed.
Mr Marsh submits that throughout the itemised bill, fee earners have charged for administrative tasks, such as a partner charging for “preparation, collation and settling tender bundle for hearing” in circumstances where the schedule for tender had already been settled by counsel.
Mr Marsh submits that the rates charged by the paralegals of $300 per hour, $250 per hour for a senior legal assistant and $200 per hour for a personal assistant and secretary are excessive for work performed. He submits a rate of $200 per hour for a paralegal, $125 per hour for a senior legal assistant and $100 per hour for a personal assistant are reasonable.
Mr Marsh has drafted an itemised bill in response to the applicant’s bill in an amount of $77,990.06 including GST. He submits that the Commission would not be persuaded to award the maximum amount payable pursuant to Schedule 7 of the 2016 Regulation 2016, based upon his objections.
Mr Marsh submits that the fees for preparing the bill of costs is not a disbursement which is recoverable under cl 86 of the 2016 Regulation.
Mr Marsh submits the rates claimed by the applicant for the assessment of costs do not explain why a partner at $575, plus GST, is required to prepare the submissions. He submits that an amount of $3,750 plus GST would be fair and reasonable in the circumstances.
In his submissions dated 9 June 2023, Mr Marsh submits that the applicant’s costs of the assessment are to be included in the costs which are to be assessed in accordance with Schedule 7 of the 2016 Regulation. The Commission has a discretion whether to determine the costs of the assessment, and if so, to what extent.
Mr Marsh submits that the applicant had not filed an itemised bill of costs to support that the maximum amount should be allowed as being fair and reasonable.
Mr Marsh submits that it should have been a fairly simple and cheap process to extract time ledgers to establish the quantum of the applicant’s professional costs so as to justify the maximum amount claimable. There should have been no need to engage a cost consultant to prepare an itemised bill of costs, which should have been provided at the time of the costs assessment being filed. Therefore, in the absence of an itemised bill of costs, the respondent could not have considered whether any offer made by the applicant was appropriate or represented a genuine compromise.
Mr Marsh submits that as an itemised bill was not provided when the assessment was filed, it was necessary for the applicant to obtain the assessment, and for the respondent to prepare a further set of submissions. Maintaining accurate records of time billed is part of proper practise management and not would cause the Commission to exercise its discretion and award costs for the costs assessment.
Mr Marsh submits that if the Commission was to exercise its discretion and order costs in the matter, where the only cost identified by the worker in seeking a costs assessment is “obtaining the itemised bill”, then any costs ordered would be minimal.
In his submissions dated 15 June 2023, Mr Marsh submits that the Commission has a discretion to determine by whom, and to what extent, the costs of the assessment be paid, and this would include the Commission’s costs.
Mr Marsh submits that he has been unable to find any authority from the former Workers Compensation Commission or the present Commission where any party has been ordered for the payment of the Commission’s costs of assessment. He submits that the Commission should not exercise its discretion and order the respondent to pay its costs of the assessment.
In the alternative, Mr Marsh submits that, subject to the final outcome, both parties have had some success. The applicant reduced the fees relating to the litigation funding and photocopying expenses. If an order is made, he submits that both parties should pay the Commission’s costs as both parties have had some success.

LEGISLATION

Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act)

The power to assess costs is contained in Pt 8 of Div 3 of the 1998 Act.
Section 335 of the 1998 Act deals with the assessment of costs. It provides that an assessment of costs is to be made so as to give effect to the provisions of Pt 8 of the 1998 Act. This is the task that I am presently undertaking.
Section 336 of the 1998 Act provides that the 2016 Regulation may make provision for or with respect to excluding any class of matters from any or all of the provisions of Pt 8 of the 1998 Act.
Section 337 of the 1998 Act provides that the 2016 Regulation may make provision with respect of fixing maximum costs in respect of any workers compensation or work injury damages matter, and a legal practitioner is not entitled to be paid any amount that exceeds any maximum fixed under the regulations. It also provides that a legal practitioner is not entitled to recover costs for a legal service or matter that a court or costs assessor determines are unreasonably incurred.
Section 338 of the 1998 Act deals with the costs of obtaining medical and other reports. It provides that to the extent that the 2016 Regulations provide, a legal practitioner or agent is not entitled to be paid or recover the cost of obtaining a medical report or other report obtained for use in connection with a workers compensation matter or work injury damages assessment.
Section 346 of the 1998 Act deals with costs in work injury damages proceedings. It provides that the regulations may make provisions regarding costs in such matters.
Section 347 of the 1998 Act provides that the regulations may make provision for the assessment or taxation of costs payable to a legal practitioner in a claim for work injury damages, and the regulations may make provision in respect of the assessment of such costs by the Commission, as well as appeals against the assessments of costs by the Commission.

Personal Injury Commission Act 2020 (the PIC Act)

Clause 5 of Schedule 3 of the PIC Act provides for the Commission to be constituted by one non-presidential Member assigned to the Workers Compensation Division when dealing with costs assessments under the regulations. Therefore, as a Principal Member of the Commission, I am able to assess the applicant’s costs and disbursements.

The 2016 Regulation

Part 17 of the 2016 Regulation deals with costs.
Clause 86 of the 2016 Regulation deals with costs that are not regulated. Relevantly, cl 86(b) provides that costs referred to in Pt 17 do not include fees for investigators’ reports, accident reconstruction reports and accountants’ reports. The note to the clause comments that costs referred to in the clause are recoverable under and may be regulated by other legislation such as the Legal Profession Uniform Law (NSW) or common law principles. This invokes the principles of fairness and reasonableness. Therefore, I will comment on these provisions below.
Clause 88 of the 2016 Regulation provides that the maximum costs that are recoverable are the costs set out in Schedule 6, except as otherwise provided by Pt 17.
Clause 92 of the 2016 Regulation fixes the maximum costs for legal services provided in or related to a work injury damages matter to those set out in Schedule 7.
Clause110 of the 2016 Regulation provides that an assessment of costs is to be made in accordance with, and so as to give effect to, orders of the Commission or a court, the Commission rules or rules of court, Pt 8 of Chapter 7 of the 1998 Act, this Part, and Schedule 6 and Schedule 7.
Clause 111 of the 2016 Regulation deals with the assessment of bills of costs. It provides:
“111 Assessment of bills generally
(1) When considering an application relating to a bill of costs, the Commission must
consider—
(a)whether or not it was reasonable to carry out the work to which the costs relate, and
(b)whether or not the work was carried out in a reasonable manner, and
(c)the fairness and reasonableness of the amount of the costs in relation to that work.
(2)     The Commission is to determine the application by confirming the bill of costs or, if the Commission is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in the Commission’s opinion, is a fair and reasonable amount.
(3)     Any amount substituted for the amount of the costs may include an allowance for any fee paid or payable for the application by the applicant.
(4) If a law practice is liable under section 204(2) of the Legal Profession Uniform Law (NSW) to pay the costs of the costs assessment (including the costs of the Commission), the Commission is to determine the amount of those costs. The costs incurred by the client are to be deducted from the amount payable under the bill of costs and the costs of the Commission are to be paid to the Commission.
(5)     The Commission may not determine that any part of a bill of costs that is not the
subject of an application is unfair or unreasonable
Note—
Clause 110 requires an assessment of costs to give effect to the maximum costs set out in Schedules 6 and 7, as well as to other matters.
Section 337(3) and (4) of the 1998 Act provide that a law practice or an agent is not entitled to be paid or recover for a legal service or agent service or other matter an amount that exceeds any maximum costs fixed for the service or matter by regulations under section 337.”
Clauses 116 and 117 of the 2016 Regulation sets out the provisions regarding the assessment of costs as follows:
“116 Assessment of costs—costs ordered by court or Commission or subject of agreement
(1)     When dealing with an application relating to costs payable as a result of an order made by a court or the Commission or as a result of an agreement referred to in clause 104(1)(b), the Commission must consider—
(a)whether or not it was reasonable to carry out the work to which the costs relate, and
(b)what is a fair and reasonable amount of costs for the work concerned.
(2)     The Commission is to determine the costs payable as a result of the order or agreement by assessing the amount of the costs that, in the Commission’s opinion, is a fair and reasonable amount.
(3)     If a court or the Commission has ordered that costs are to be assessed on an indemnity basis, the Commission must assess the costs on that basis, having regard to any relevant rules of the court or Commission.
(4)     The costs assessed are to include the costs of the assessment (including the costs of the parties to the assessment, and the Commission). The Commission may determine by whom and to what extent the costs of the assessment are to be paid.
(5)     The costs of the Commission are to be paid to the Commission.
Note—
Subdivision 2 of Division 3 of this Part limits the circumstances in which costs may be awarded on a party/party basis in relation to a claim for work injury damages.
Clause 110 requires an assessment of costs to give effect to the maximum costs set out in Schedules 6 and 7, as well as to other matters.
117 Additional matters to be considered by Commission in assessing costs ordered by court or Commission
In assessing what is a fair and reasonable amount of costs, the Commission may have regard to any or all of the following matters—
(a)the skill, labour and responsibility displayed on the part of the law practice or agent responsible for the matter,
(b)the complexity, novelty or difficulty of the matter,
(c)the quality of the work done and whether the level of expertise was appropriate to the nature of the work done,
(d)the place where and circumstances in which the legal services were provided,
(e)the time within which the work was required to be done,
(f)the outcome of the matter.”
Clause 119 of the 2016 Regulation deals with amount of costs payable. It provides:
“119 Court or Commission may specify amount etc
This Division does not limit any power of a court or the Commission to determine in any particular case the amount of costs payable or that the amount of the costs is to be determined on an indemnity basis.”
Clause 122 of the 2016 Regulation deals with the recovery of costs by the Commission. It provides:
“122 Recovery of costs of costs assessment
(1) This clause applies when the costs of the Commission are payable by a party to the assessment (under section 204(2) of the Legal Profession Uniform Law (NSW) or clause 111 or 116(5)).
(2)    On making a determination, the Commission may issue to each party a certificate that sets out the costs incurred by the Commission in the course of the costs assessment.
(3)    The certificate is, on the filing of the certificate in the office or registry of a court having jurisdiction to order the payment of that amount of money, and with no further action, taken to be a judgment of that court for the amount of unpaid costs.
(4)    A Registrar of the Commission may take action to recover the
costs of the Commission.”

Legal Profession Uniform Law Application Act 2014

Section 59(1)(a) of the Legal Profession Uniform Law Application Act 2014 (LPUL Act) provides that regulations may be made for fixing “fair and reasonable costs for legal services provided in any workers compensation matter”.

Section 59(2) of the LPUL Act provides that “a law practice is not entitled to be paid or recover for a legal service an amount that exceeds the fair and reasonable cost fixed for the service by the regulations under this section”.
The note to s 59(2) refers to s 172(3) of the Legal Profession Uniform Law (NSW) which provides that “[i]n considering whether legal costs are fair and reasonable, regard must also be had to whether the legal costs conform to any applicable requirements of this Part, the Uniform Rules and any fixed costs legislative provisions”.
Section 204 of the LPUL Act deals with the costs of a costs assessment. It provides:
“204 Costs of costs assessment
(1) Without affecting the powers of a court or tribunal to award costs in relation to a costs assessment, a costs assessor is, subject to this section, to determine the costs of a costs assessment and by whom they are payable….”
Clause 25(3) of the Legal Profession Uniform Law Application Regulation 2015 (the 2015 LPUL Regulation) provides the “fair and reasonable” costs fixed for a legal service are as specified in Pts 1, 2 and 3 of Schedule 2 to that Regulation.
Item 10 of Pt 1 of Schedule 2 to the 2015 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.”

REASONS

Fees for Dolman Bateman and David Dubos Consulting Pty Ltd

The applicant seeks payment for the reports of Dolman Bateman & Co Pty Ltd in the sum of $5,967.50 and for the report of David Dubos Consulting Pty Ltd in the sum of $5,486.80.
Mr Marsh submits that the respondent objects to the cost of these reports because the Dolman Bateman report was unnecessary, and the invoice from David Dubos Consulting Pty Ltd did not provide a breakdown of the amount of work performed and the rate sought to be charged for the work. Further, the respondent objected generally to the amounts claimed as being fair and reasonable.
It is apparent from the respondent’s defence, the judgments of the District Court and Court of Appeal and the applicant’s submissions that the matter was somewhat complex. The applicant had to establish a breach of duty and counter the allegation of contributory negligence. The respondent denied that the applicant had suffered the losses alleged and it also raised notice issues. The matter ran for four days in the District Court and for one day in the Court of Appeal. Therefore, it was not a simple matter.
Whether the respondent is liable for this cost of the reports of David Dubos Consulting Pty Ltd and Dolman Bateman & Co Pty Ltd depends on whether it was fair and reasonable for the applicant to retain these experts, having regard to the nature of the dispute between the parties.
The phrase “fair and reasonable” in costs applications was considered in Berger v Moree Plains Shire Council[1] and Nimbin Hotel Pty Limited v Dalton.[2]
[1] [2005] NSW WCC PD 152 (Berger).
[2] [2007] NSWWCCPD 17.
In Berger, Deputy President Fleming stated:
“As a general proposition there can be no argument that the Registrar must, in exercising the discretion to determine what costs are ‘fair and reasonable’, consider the evidence and submissions on the matters referred to in clause 110 and clause 111. Clearly this discretion cannot be exercised on a whim. It must be exercised fairly and lawfully. The costs assessment task may include perusal of the Commission file documenting proceedings before the Arbitrator and the evidence and submissions made on the application for assessment of costs.”[3]
[3] Berger, [91].
Whilst the Deputy President was referring to cl 110 and 111 of the Workers Compensation Regulation 2003, these clauses are in similar terms to cl 116 and cl 117 of the 2016 Regulation.
Further, although these decisions concerned the assessment of costs in workers compensation matters, the principles identified by the Deputy President equally apply to the assessment of costs in work injury damages proceedings.
The test of what is “fair and reasonable” needs to be considered in the context of the cl 116 and cl 117 of the 2016 Regulation and item 10 of Pt 1 of Sch 2 to the 2015 Regulation referred to above.
According to Berger, I have a discretion to determine what costs are “fair and reasonable” with respect to the reports of David Dubos Consulting Pty and Dolman Bateman & Co Pty Ltd. I need to consider whether the cost of the disbursements were unreasonable or were unreasonably incurred.
The applicant seeks that the respondent pay the sum of $5,486.80 for the cost of liability report provided by David Dubos Consulting Pty Ltd.
I have accessed a copy of the report that was attached to the Application for Mediation. The report was completed by Fiona Weigall, a highly qualified and experienced professional ergonomist, on 11 December 2018. The report is extensive and comprised 45 pages, although a number of pages described her qualifications and curriculum vitae.
Given the issues that were raised by the respondent’s former legal representative in the Defence, it was reasonable that an expert report on liability be commissioned.
The applicant also seeks that the respondent pay the sum of $5,967.50 for the report provided by Dolman Bateman and Co Pty Ltd. Whilst it is true that a solicitor can calculate interest, the report shows a degree of complexity, and I am mindful that both parties utilised this report when drafting the consent orders. Therefore, I consider that the retention of Dolman Bateman and Co Pty Ltd was reasonable.
I have been given no guidance as to whether the cost of these reports are fair, reasonable or otherwise. Nevertheless, having personally undertaken personal injury litigation in the District Court and Supreme Court for almost 30 years before being appointed as an arbitrator and later as a Member of the Commission, I am aware of the range of costs that can be charged by experts for their reports.
The itemised tax invoice from Dolman Bateman & Co Pty Ltd shows that most of the work was undertaken by a senior accountant and not a partner. The calculations were checked by a junior accountant. These fact and the rates charged were reasonable, given that it was a report that would be tendered in District Court proceedings
The itemised tax invoice from David Dubos Consulting Pty Ltd involved 13.5 hours at a modest hourly rate of $390 and two hours of travel at $140 per hour. Given that the report was extensive and involved travel, the number of hours claimed and the rates charged were reasonable.
In my view the fees charged by the two experts are not exorbitant and certainly within the range. Accordingly, I am satisfied that the fees charged by David Dubos Consulting Pty Ltd and Doman Bateman & Co Pty Ltd are fair and reasonable and were not unreasonably incurred.

Professional costs

The next question to consider is the applicant’s professional costs. In assessing what is fair and reasonable, I need to have regard to the skill, labour and responsibility displayed by the applicant’s solicitor and those who worked on the file, the complexity of the matter, the quality of the work, the place and circumstances where the services were provided, the time within which the work was undertaken and the outcome.
Mr Abouchrouche was first retained for the work injury damages proceedings on
6 October 2017. The consent orders in the Court of Appeal were filed on 17 April 2022, a period of a little under five years.
The memorandum of disbursements shows that the applicant’s solicitor obtained medical reports, clinical notes, issued subpoenas, retained experts, and the matter was hotly contested in the District Court for four days before judgement was delivered on a fifth day. The matter was the subject of an appeal that lasted one day, and the District Court decision was overturned.
According to Mr Abouchrouche, the matter had a complex factual matrix with issues on causation, duty of care and breach of duty. The fact that junior and senior counsel were briefed to advise and appear at the substantive hearing and at the appeal suggests to me that the matter was complex and required great care and skill to ensure a positive outcome for the applicant.
Mr Abouchrouche seeks that maximum costs payable in the sum of $93,694.40 inclusive of GST calculated in accordance with Schedule 7 of the 2016 Regulation.
In his initial submissions, Mr Marsh submits that the entitlement to maximum costs is subject to a consideration of “fairness and reasonableness”, and the matters in cl 117 of the 2016 Regulation. The thrust of his argument is that the applicant’s claim for maximum costs is not fair and reasonable, because the applicant has not provided an itemised account of the work performed and identify who did the work and how long it took them. He failed to address the other relevant matters identified in cl 117 such as the complexity of the matter and the fact that the matter was contested over a period of four days in the District Court.
Mr Marsh suggested a reduction of more than 50% and an allowance of 90 hours of work. In my view, such an assessment of the work undertaken over almost five years, whether at partner level or below, is unrealistic. My views are further reinforced when one has regard to Mr Marsh’s itemised bill attached to his more recent submissions in the amount of $70,900.06 plus GST.
According to the reports by the independent costs assessor, the applicant’s professional costs in the period 6 October 2017 to 3 May 2021, plus a four day hearing in the District Court, amounted to $98,681.25 inclusive of GST. It is clear from the assessor’s calculations that he took account of the level of the employment status of those who performed each activity.
I must confess that I was surprised when I received Mr Marsh’s submissions filed on
23 May 2023, particularly in regard to what Mr Abouchrouche described as a “a line-by-line objection to each item”. I understood that the request for an itemised bill would enable both the respondent and the Commission to gauge whether the applicant should be entitled to the maximum costs allowable under Schedule 7 of the 2016 Regulation.
Given that Mr Marsh has made submissions regarding many of the items claimed by the applicant, I consider that it is appropriate to consider his objections.
I do not accept Mr Marsh’s submissions regarding the 6-minute time unit. This is the current industry standard and was in existence when I was in private practice in the 1990s. It is true that this method of time recording can artificially inflate the time taken to undertake a task, but in my experience, most matters involve some “swings and roundabouts”, so it generally evens out over the course of a matter.
Further, the hourly rates claimed for the various employees who worked on the matter are not exorbitant or unreasonable. They are consistent with the Guideline referred to by Mr Abouchrouche and the rates suggested by Mr Marsh are without merit. I would be surprised if Mr Marsh’s firm charged professional costs based on such low rates.
Most of the items claimed for work undertaken by the employees, apart from the partner, were for one or two units. It is not difficult for two units to be achieved when dealing with any correspondence or task. It is also unreasonable to expect that an employee would hold back all tasks so that they could be attended to at the same time. That is not the nature of litigation. In the circumstances, I reject any submissions that seek to reduce the said rates and do not propose to reduce the rate claimed in respect of each employee.
Unless specifically referred to below, I will allow the items as claimed, because most issues that have been raised by Mr Marsh relate to consolidation of actions, the time taken, the rates claimed in numerous matters and the level of the employee who did the task, rather than questioning the need to undertake the tasks. Matters that are not the subject of an objection will also be allowed.
Further, I do not accept that different employees should have done the various tasks. I accept that the partner with carriage of the matter has appropriately undertaken the tasks for which he has claimed fees. Any decisions regarding the evidence and the drafting and filing of documents is the responsibility of the lawyer with carriage of the matter and these tasks should not be delegated to others, particularly administrative staff.
I do not have the benefit of reviewing the various documents, letters, evidence, emails and the like, but the descriptions in the itemised bill contain sufficient detail to allow me to properly assess the applicant’s costs. I also have more than 30 years of private practice experience in common law litigation and the assessment of costs. I have undertaken assessment of costs in the Commission and was a taxing officer in the Compensation Court.
In respect of the items that are not party/party costs, items where the claims are questionable and/or are the subject to objection, I advise:
a.11 October 2017 peruse s 126 reports: Allow $575 – number of reports from treating doctors in mediation file;
b.1 November 2017 telephone conversation with applicant: Allow $175 - relevant to claim for economic loss;
c.6 February 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
d.28 February 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
e.30 April 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
f.11 May 2018 – drafting Brief to counsel: Allow $575 - one hour by partner appropriate;
g.14 June 2018 – compiling and collating schedules: Allow $75 – 3 units by legal secretary;
h.18 June 2018 – telephone conversations (x2) with applicant: Allow $0 – not party/party costs;
i.18 June 2018 [sic] – perusing report of Dr Livsin: Allow $115 – 2 units by partner. Report of Dr Livsin dated 9 May 2018 in mediation file was only two pages;
j.21 June 2018 – letter to applicant: Allow $0 – not a party/party cost;
k.25 June 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
l.2 July 2018 – prepare and attend conference: Allow $1,725 – appropriate for partner to attend conference;
m.13 July 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
n.27 July 2018 – perusing counsel’s advice and draft notice of claim – Allow $1,725 – 30 units by partner;
o.6 August 2018 - perusing report of Dr Hyde Page 7/8/18 – Allow $230 – 4 units by partner. Report in mediation file is five pages;
p.2 October 2018 – letters to applicant: Allow $25 – execution of statement for evidence;
q.2 October 2018 – letters to applicant: Allow $0 – not party/party costs;
r.2 October 2018 – letter to Dr Spittaler – Allow $50 for 2 units;
s.2 October 2018 – letter to experts - Allow $575 for 10 units by partner;
t.6 November 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
u.6 November 2018 – letter to applicant: Allow $0 – not a party/party cost.
v.12 November 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
w.20 November 2018 – telephone conversation with applicant: Allow $0 – not a party/party cost;
x.1 December 2018 [sic] – perusing email from respondent and wage material - Allow $575 for 10 units by partner. Reasonable for the partner to review this material as it would have been relevant economic loss evidence;
y.11 December 2018 [sic] - perusing David Dubos report: Allow $575 for 10 units by partner. Reasonable for the partner to review this 45 page liability report;
z.2 January 2019 - perusing report of Dr Spittaler: Allow $287.50 for 5 units by partner. None of the reports by Dr Spittaler in the mediation file exceed 2 pages;
aa.2 January 2019 - perusing email from counsel, draft Statement of Claim etc: Allow $1,150 for 20 units for partner;
bb.2 May 2019– telephone conversation with applicant: Allow $0 – not a party/party cost;
cc.14 November 2019 – attending to file and draft per-filing statement: Allow $1,725 for 20 units for partner;
dd.15 January 2020 – draft Application for Mediation: Allow $125 as claimed;
ee.22 January 2020 – letter to applicant: Allow $0 – not a party/party cost;
ff.20 February 2020 – telephone conversation with applicant: Allow $0 – not a party/party cost;
gg.24 February 2020 – letter to applicant: Allow $0 – not a party/party cost;
hh.10 March 2020 – email to LVA: Allow $40 for 2 units;
ii.18 March 2020 – letter to applicant: Allow $40 for 2 units;
jj.2 April 2020 – draft Statement of Claim: Allow $575 for 10 units for partner;
kk.28 May 2020 [sic] – peruse letter from LVA: Allow $287.50 for 5 units by partner;
ll.1 June 2020 – telephone conversation with applicant: Allow $0 – not a party/party cost;
mm.3 July 2020 – letter to applicant: Allow $0 – not a party/party cost;
nn.9 November 2020 – attendance on file etc: Allow $150 for 5 units;
oo.10 November 2020 – review, finalise and enter orders: Allow $115 for 2 units by partner;
pp.25 November 2020 – telephone conversation with applicant: Allow $0 – not a party/party cost;
qq.15 December 2020 -draft brief to senior counsel: Allow $862.50 for 15 units by partner;
rr.15 January 2021 – Amend brief to senior counsel: Allow $862.50 for 15 units by partner;
ss.18 January 2021 – finalise brief to senior counsel: Allow $300 for 10 units;
tt.11 February 2021 – perusing clinical notes: Allow $345 for 6 units by partner;
uu.14 April 2021 – drafting index for court tender bundle: Allow $345 for 6 units by partner;
vv.14 April 2021 - collating certificates: Allow $402.50 for 7 units by partner;
ww.14 April 2021 – extracting and collating supporting documents: Allow $330 for 11 units by partner;
xx.20 April 2021 - amending index to Court, extracting documents etc: Allow $1,150 for 20 units by partner;
yy.20 April 2021 - review statement of Sinclair: Allow $575 for 10 units for partner;
zz.20 April 2021 – researching award rates and drafting schedule: Allow $575 for 10 units for partner as relevant to damages claim;
aaa.21 April 2021 - draft and send letter to LVA: Allow $60 for 2 units;
bbb.21 April 2021 – amending index: Allow $90 for 3 units;
ccc.21 April 2021 – amending schedule of damages: Allow $230 for 4 units by partner;
ddd.23 April 2021 - amending index: Allow $90 for 3 units;
eee.27 April 2021 - amending index: Allow $90 for 3 units;
fff.27 April 2021 - perusing notes of Pfeiffer: Allow $402.50 for 7 units by partner;
ggg.27 April 2021 - drafting chronology: Allow $230 for 4 units by partner.
hhh.27 April 2021 – telephone conversation with applicant: Allow $287.50 for 5 units by partner;
iii.30 April 2021 - perusing comparable earnings: Allow $1,035 for 18 units by partner. Appropriate for partner to undertake this task as relates to economic loss;
jjj.1 May 2021 - preparation, collation and settling tender bundle for hearing: Allow $4,312.50 for 75 units by partner. Appropriate for partner to undertake this task;
kkk.2 May 2021 - preparation, collation and settling tender bundle for hearing: Allow $2,300 for 40 units by partner. Appropriate for partner to undertake this task;
lll.3 May 2021 - preparation for final hearing including conference with counsel: Allow $3,737.50 for 65 units by partner;
mmm.4 May 2021 - draft a schedule of evidence and liability: Allow $300 for 20 units;
nnn.4 May 2021 - draft a schedule of pleadings: Allow $200 for 10 units;
ooo.4 May 2021 - draft a schedule of medicals: Allow $0 – not a party/party cost;
ppp.4 May 2021 - legal research: Allow $3,612.50 for 55 units by partner. Appropriate for partner to undertake this task;
qqq.4 May 2021 – attendance at hearing: Allow $3,737.50 for 65 units by partner. Appropriate for partner to undertake this task;
rrr.5 May 2021 – attendance at hearing: Allow $3,737.50 for 65 units by partner. Appropriate for partner to undertake this task;
sss.6 May 2021 – attendance at hearing: Allow $2,300 for 40 units by partner. Appropriate for partner to undertake this task;
ttt.18 May 2021 – research to obtain copies of defendant company returns etc: Allow $450 for 15 units;
uuu.18 May 2021 - perusing subpoenaed documents: Allow $3,737.50 for 65 units by partner. Appropriate for partner to undertake this task;
vvv.19 May 2021 - researching comparable earnings for economic loss: Allow $287.50 for 5 units by partner;
May 2021 - drafting submissions on comparable earnings: Allow $287.50 for 5 units by partner. Appropriate for partner to undertake this task;
xxx.19 May 2021 – legal research: Allow $1,035 for 18 units by partner. Appropriate for partner to undertake this task as relates to economic loss;
yyy.21 May 2021 – amending comparable earnings submissions: Allow $575 for 10 units for partner. Appropriate for partner to undertake this task. Not duplication;
zzz.26 May 2021 - amending comparable earnings submissions: Allow $287.50 for 5 units by partner. Appropriate for partner to undertake this task;
aaaa.26 May 2021 - collating into Court Bundle & Index: Allow $90 for 3 units;
bbbb.28 May 2021 - review and settle plaintiff's written submissions. Allow $2,300 for 40 units by partner. Appropriate for partner to undertake this task;
cccc.1 June 2021 - legal research and compiling case listed for hearing: Allow $600 for 20 units;
dddd.1 June 2021 – preparation for hearing: Allow $2,300 for 40 units by partner. Appropriate for partner to undertake this task;
eeee.1 June 2021 - perusing subpoenaed documents: Allow $1,437.50 for 25 units by partner. Appropriate for partner to undertake this task;
ffff.1 June 2021 – attendance at hearing: Allow $3,737.50 for 65 units by partner. Appropriate for partner to undertake this task;
gggg.2 June 2021 – attendance at hearing: Allow $3,737.50 for 65 units by partner. Appropriate for partner to undertake this task;
hhhh.3 June 2021 – attendance at hearing: Allow $3,737.50 for 65 units by partner. Appropriate for partner to undertake this task;
iiii.5 November 2021 - collating items for and preparation of Appeal Books: Allow $1,437.50 for 25 units by partner. Appropriate for partner to undertake this task;
jjjj.8 November 2021 - reviewing exhibits obtain from District Court, reconciling same with transcript of proceedings and compiling appeal book: Allow $2,300 for 40 units by partner. Appropriate for partner to undertake this task;
kkkk.24 January 2022 – peruse and consider respondent’s submissions: Allow $0 – duplication of 21 December 2021;
llll.17 February 2022 - preparation for final hearing of appeal: Allow $2,300 for 40 units by partner. Appropriate for partner to undertake this task;
mmmm.18 February 2022 – attendance at Supreme Court hearing: Allow $2012.50 for 35 units for partner. Appropriate for partner to undertake this task;
nnnn.17 March 2022 – draft email to accountant Dolman Bateman: Allow $862.50 for 15 units by partner. Appropriate for partner to undertake this task;
oooo.20 March 2022 – email to applicant: Allow $0 – not a party/party cost;
pppp.21 March 2022 – letter to applicant: Allow $0 – not a party/party cost;
qqqq.23 March 2022 - peruse email from Dolman Bateman enclosing forensic accounting report etc: Allow $230 for 4 units by partner, and
rrrr.23 March 2022 – drafting consent orders etc: Allow $115 for 2 units by partner.

According to my calculations, and having regard to the above adjustments, the applicant’s costs amount to $107,757.50 plus GST of $10,775.75, giving a total of $118,533.25 inclusive of GST. This assessment is approximately $25,000 more than the maximum, and well above the figure suggested by the respondent.
Having regard to the matters in cl 116 and cl 117 of the 2016 Regulation, I am satisfied that the applicant’s claim in the sum $93,694.40 inclusive of GST, calculated in accordance with Schedule 7 of the 2016 Regulation, is fair and reasonable. I propose to assess the applicant’s costs in that sum.

Costs of the assessment

Mr Abouchrouche submits that the respondent was aware of the anticipated cost and insisted on an itemised bill. He submits that was reasonable for the applicant to incur this disbursement in the circumstances.
Mr Abouchrouche indicated that he would not press his own costs for the assessment if the maximum professional costs are awarded. As I have allowed the maximum fees, I will not make any allowance for his professional costs. That leaves the disbursement for National Costing Lawyers Pty Ltd.
Mr Marsh submits that the fees for preparing the bill of costs is not a disbursement which is recoverable under cl 86 of the 2016 Regulation.
Whilst it is true that cl 86 of the 2016 Regulation does not refer to the disbursement relating to drafting an itemised bill of costs, when one has regard to s 204 of the LPUL Act, and
cl 25(3) and item 10 of Pt 1 of Schedule 2 of the 2015 LPUL Regulation, I have the power to award the costs incurred by the applicant for the itemised bill for assessment if the amount of the disbursement was reasonable, and the disbursement was reasonably and necessarily incurred.
The lack of an itemised bill of costs was raised by the respondent’s solicitor. Mr Marsh submitted that the assessment could not proceed until the bill was filed and served. The respondent then filed a detailed itemised bill in response with its objections.
It is true that an itemised bill should have been provided at the time that the bill was filed, but the respondent had access to the report of QICS (Australasia) Pty Ltd which could have been used as a guide.
Whilst Mr Marsh submits that the applicant’s solicitor could have had accessed their own time ledgers to justify that maximum costs would be payable, the first time that he raised this was in his submissions.
Given the history of this matter, I doubt that the respondent would have accepted the applicant’s assessment based on the time ledger, particularly if the quantum exceeded the statutory maximum, nor would it have agreed to pay the maximum.
It was at the respondent’s insistence that an itemised bill be filed and served, and the applicant complied with this demand. Even after receiving the itemised bill of costs, the respondent challenged many of the items in the bill, rather than attempt to reach a compromise and resolve the matter without a formal assessment by me.
In my experience, the most accurate and cost effective means of calculating costs is to retain a costs expert. Therefore, in those circumstances and given the respondent’s position, I am satisfied that it was both reasonable and necessary for the applicant to retain the costs assessor.
As the assessment conducted by me has resulted in costs of $107,757.50 (excluding GST),
I consider that the respondent should only be liable for 10% of this figure rather than 10% of the bill as calculated by the applicant’s costs expert.
Accordingly the respondent will be liable to pay the applicant’s costs of the assessment in the sum of $10,757.75 plus GST of $1,075.78, being the sum of $11,833.53.

Commission’s costs

Clause 116 of the 2016 Regulation provides the Commission with the discretion to order the respondent to pay the costs of the Commission if the circumstances warrant such an order. The fact that Mr Marsh has been unable to find any authority is not relevant. The discretionary power is in the 1016 Regulation.
In my Direction issued on 3 April 2023, I directed that the parties make submissions as to whether the respondent should pay the Commission’s costs. Neither party did so. I then issued a further Direction.
Clause 6 of Schedule 3 of the PIC Act provides that a non-presidential Member is not to make an award or otherwise determine a dispute referred to the Commission for determination without first using the Member’s best endeavours to bring the parties to the dispute to a settlement acceptable to all of them. With this statutory obligation in mind, I scheduled a preliminary conference on 3 April 2023.
I questioned the legal representatives about discussions and canvassed settlement of the costs dispute. Unfortunately, the respondent was not prepared to compromise, even though Mr Abouchrouche was prepared to accept 10% less than the maximum fees for his costs after withdrawing the claims for the litigation funding fees and photocopying. This meant that I had to order submissions more than once, review them and then issue a formal determination of the dispute. Even after an itemised bill was filed and served, no attempts were made to resolve the costs dispute.
Mr Abouchrouche submitted that the applicant should not be ordered to pay the Commission’s costs of the assessment and these should be borne by the respondent. The applicant had been willing to compromise, but the respondent was steadfast in its position and there was no alternative but to proceed to an assessment.
I agree that the applicant was placed in an unfortunate position and in the circumstances, I do not believe that the applicant should have to pay the Commission’s costs, despite
Mr Marsh’s submission that the respondent met with some success regarding some items.
Mr Marsh made no submissions as to whether the respondent should pay the Commission’s costs in his submissions filed on 13 March 2023 and 23 May 2023. I issued a further Direction on 30 May 2023, pointing out that the submissions did not address this. His submissions filed on 9 June 2023 still did not address my Direction. I issued yet another direction on 13 June 2023 and the respondent finally complied on 15 June 2023.
It is true that the itemised bill has been reduced by me, which is to the respondent’s benefit, but the total for professional costs still exceeded the maximum that can be paid under the 2016 Regulation. Further, the fact that there is no authority regarding such costs orders is irrelevant.
In my view, the actions of the respondent’s insurer has caused an excessive delay in the finalisation of the proceedings and has resulted in an unnecessary assessment of costs in circumstances where the option for agreement could have been explored. This has caused additional cost and inconvenience to the applicant, his solicitors, the Commission’s registry staff, dispute officers and me as a Principal Member and Division Head.
The respondent’s reluctance to resolve the costs dispute is inconsistent with the Commission’s objective to provide a timely, fair and cost-effective system for the resolution of disputes. Section 43 (3) of the PIC Act provides that the Commission is to act according to “equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms”.
Mr Marsh’s submissions do not persuade me to refrain from making a costs order against the respondent.
The Commission’s costs are hard to quantify. There were eight separate copies of written submissions filed by the parties. The assessment of this matter has personally taken me in excess of 40 hours to complete. Additional work was undertaken by registry staff. My task was not made any easier by the quality of the respondent’s submissions that did not address whether the respondent should pay the Commission’s costs.
Perhaps the fairest option is to consider what a fulltime General Member would be paid for the time taken to assess the costs, rather than what a Division Head, Principal Member or Senior Member would be paid.
The remuneration of the Commission’s Members is determined annually by the Statutory and Other Officers Remuneration Tribunal in accordance with the Statutory and Other Offices Remuneration Act 1975. The current salary for a fulltime general member is
$249,675. This equates to $4,801.44 per week, or $137.18 per hour.
If one was to allow the Member rate of one hour of preparation time for the preliminary conference, one hour for participation in the preliminary conference, and, say, 33 hours for reviewing the written submissions and evidence, reviewing the mediation file and documents filed with the submissions, reviewing case law and writing the decision, the Commission’s costs would amount to $4,801.30 (excluding GST).
I am satisfied that this amount is fair and reasonable. These costs were avoidable, but the insurer would not compromise in circumstances where common sense should have prevailed and a commercial decision made.
Details as to how the Commission’s costs can be paid will be provided by the disputes officer on request by the respondent’s solicitor.

ORDERS

The respondent to pay to the applicant’s solicitor within 28 days of this assessment the following:
i.professional costs in the sum of $93,694.40 inclusive of GST;
ii.disbursements in the sum of $44,159.47 inclusive of GST, and
iii.costs of the assessment in the sum of $11,833.53 inclusive of GST in respect of the fees of National Costing Lawyers Pty Ltd.
The respondent to pay to the Commission within 28 days of this assessment the following:
i.costs of the assessment in the sum of $4,801.30.

[2023] NSWPIC 291

20 June 2023