Chakti v H&B Construction Services Pty Limited
[2006] NSWWCCPD 358
•20 December 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Chakti v H&B Construction Services Pty Limited [2006] NSWWCCPD 358
APPELLANT: Fady Chakti
RESPONDENT: H&B Construction Services Pty Limited
RESPONDENT’S INSURER: CGU Workers Compensation (NSW) Ltd
FILE NUMBER: WCC12062-05
DATE OF REGISTRAR’S DECISION: 4 November 2005
DATE OF APPEAL DECISION: 20 December 2006
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claim under Items 2.06, 4.08, 4.09, 4.12 and 10.01 of the Compensation Costs Table in Schedule 6 of the WorkersCompensation Regulation 2003; disbursements - investigator’s report and solicitor’s travel expenses.
PRESIDENTIAL MEMBER: Acting Deputy President Julian Martin
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Moray & Agnew
ORDERS MADE ON APPEAL: 1. The Registrar’s determination of a Claim for Costs in this matter, dated 4 November 2005 is amended in accordance with these reasons.
2.H&B Construction Services Pty Limited is to pay Fady Chakti $275 inclusive of GST in respect of his costs of the appeal.
BACKGROUND
Substantive Proceedings
On 14 February 2005 Fady Chakti (‘Mr Chakti’) commenced proceedings in the Workers Compensation Commission (‘the Commission’) against H&B Construction Services Pty Limited (‘H&B Construction’) claiming weekly benefits compensation, medical and related expenses and lump sum compensation.
A teleconference was held with the parties on 26 April 2005 and as the matter was unable to be resolved it was set down for arbitration hearing on 18 May 2005. The Arbitrator issued a Certificate of Determination on 15 June 2005 wherein he certified that the matter was complex for the purposes of the Compensation Costs Table.
The parties did not agree on costs and Mr Chakti’s solicitor lodged an Application for Assessment of Costs on 20 July 2005.
The costs were determined by the Registrar’s delegate, a Commission Arbitrator (‘the Delegate’) on 4 November 2005. The decision is as follows:
“1.Pursuant to an order for costs made on 15 June 2005, the Respondent is liable to pay the Applicant’s costs as agreed or assessed.
2.The Applicant’s costs of the substantive proceedings are assessed in the sum of $10,807.45.
3.No order as to the costs of the assessment.
4.The Respondent is, therefore, to pay to the Applicant a total amount of $10,807.45, if those costs have not already been paid.”
On 25 November 2005 Mr Chakti lodged an appeal from the Delegate’s decision.
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.”
H&B Construction submit that the matter should be dealt with ‘on the papers’ whilst Mr Chakti is silent on this issue.
I have both the Commission file regarding the cost dispute and the appeal file. In addition I have the substantive file and am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.
ISSUES IN DISPUTE
Mr Chakti’s solicitor submits that the Delegate erred in relation to professional costs and claim under Item 2.06, Item 4.08, Item 4.09, Item 4.12 and Item 10.01.
Mr Chakti’s solicitor further submits that the Delegate erred in relation to the following disbursements:
·Private investigator’s report costs, and
·Solicitor’s travel expenses.
PRELIMINARY
Part 19 of the Workers Compensation Regulation 2003 (‘the Regulations’) govern both the procedure for assessment of costs and appeals against such an assessment.
Clause 119(1) of the Regulations limits the grounds on which an appeal may be made against the determination of the Registrar on an assessment of costs to a matter of law. As Deputy President Fleming stated in Berger v Moree Plains Shire Council [2005] NSWWCCPD152 (‘Berger’s case’):
“The determination of these questions by a costs assessor, is a matter of discretion and, as I said in Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 (at para 19):
“Only where the discretion can be said to have miscarried because it was exercised unfairly and unlawfully, taking into account the scope of the discretion, and the objects or purpose for which it is conferred, would it be an error of law (Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at 758; R v Australian Broadcasting Tribunal; ex p 2HD Pty Ltd (1979) 144 CLR 45 at 49; Sheridan v David Anthony Clarke t/as Freestyle Marine Sports [2003] NSWWCCPD9).””
SUBMISSIONS, DISCUSSION AND FINDINGS
Professional costs
Item 2.06
Item 2.06 allows a maximum amount of $500 (at the relevant time) for ‘requesting a review of the claim from the insurer, prior to referral of the matter to the Commission’. Mr Chakti’s solicitor in the bill of costs claimed $500. In the Determination the Delegate noted that H&B Construction objected to Mr Chakti’s claim under this Item on the basis that no request for review was made. The Delegate disallowed the claim as Mr Chakti’s solicitor provided no evidence in support.
Mr Chakti submits on appeal that the Delegate erred because he should have requested copies of his solicitor’s correspondence in order to determine if a review had been sought. I do not agree with this submission as it is the responsibility of Mr Chakti’s solicitor to make out an entitlement to costs and as the Delegate stated, there was no evidence to support the claim.
It is further submitted by Mr Chakti that a review was sought by letter dated 16 December 2004 and that a copy of this document was attached to the Application to Resolve a Dispute filed in the Commission on 11 February 2005. Mr Chakti’s solicitor submits that it was an error of law for the Delegate to make a determination without considering the record of the Commission.
I do not agree with this submission. As stated above Mr Chakti’s solicitor has the responsibility for making out an entitlement to the cost Item in question. In the Application for Assessment of Costs which was before the Delegate, Mr Chakti’s solicitor presented lengthy submissions in his claim under Item 2.06, but at no stage referred to the copy of the correspondence annexed to the Application to Resolve a Dispute.
In his submissions on appeal Mr Chakti’s solicitor has annexed a copy of this correspondence dated 16 December 2004 and addressed to H&B Construction. No explanation is provided as to why this material is lodged at this late stage. In my view this effectively represents an attempt to introduce fresh evidence.
As stated above, Clause 119 of the Regulations provides that an appeal against an assessment of costs is on a matter of law only. There is no provision for the admission of fresh evidence, unless the Presidential Member “remits its decision on the question to the Registrar and orders the Registrar to re-determine the application”. Clause 119(4) then provides:
“(4) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.”
I disallow this fresh evidence. For the reasons stated above I am not satisfied there was any error on the part of the Delegate, as he determined the matter on the available evidence.
Item 4.08
This Item provides a maximum amount of $500 (at the relevant time) for ‘preparing for a conference (including providing advice to client)’. Mr Chakti’s solicitor claimed a total of $750 in respect of both the teleconference and the conciliation/arbitration. The Delegate reduced the claim to $500 on the authority of Orr v Direct Couriers (Australia) Pty Ltd [2004] NSWWCCPD 28 (‘Orr’). In this matter Deputy President Fleming considered the maximum amount allowed for events and stated:
“The monetary values set out in Column 4 of the Table, are the maximum total for an event type in any particular claim, regardless of the number of individual activities that may take place under that event heading.”
Mr Chakti’s solicitor submits that it is an error of law to limit the costs recoverable to one conference (or two) to resolve a particular dispute when that is not provided for in the Regulations. Having regard to the authority of Orr I see no error of law in the Delegate’s determination to allow the sum of $500 under this Item.
Item 4.09
This Item allows $250 per hour, up to a maximum of $1,000, for ‘attending and participating in a conference with an Arbitrator (other than an arbitration hearing or where Item 4.10 applies)’.
Mr Chakti’s solicitor claimed $250 and the Delegate allowed $187.50. It is submitted that the actual telephone conference involving the Arbitrator and H&B Construction lasted 45 minutes. H&B Construction’s solicitor stated the telephone conference lasted only 34 minutes. The Delegate in allowing $187.50 calculated the allowance on the basis of 45 minutes ($4.166 per minute).
In his submissions on appeal Mr Chakti’s solicitor maintains the claim for $250 stating that the telephone conference continued on after the Arbitrator and H&B Construction’s solicitor went off line. In their submissions in reply, H&B Construction submit that Item 4.09 allows for costs for the formal telephone conference only and that Mr Chakti and his solicitor’s discussion after the telephone conference is recoverable under other Items in the Table.
I agree with the submission by H&B Construction that Item 4.09 provides costs for ‘attending and participating in a conference with an Arbitrator’ and accordingly I see no error of law or discretion in the Delegate’s determination under this Item.
Item 4.12
This Item provides for a maximum amount of $190 (at the relevant time) for ‘reporting to the client on the outcome of a conference or arbitration’. Mr Chakti’s solicitor claimed the sum of $570 in respect of three reports to the client and the Delegate allowed the amount of $380 on the authority of Orellana-Fuentes v Standard Knitting Mill Pty Ltd (2003) 57 NSWLR 282 (‘Fuentes’).
In McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’ case) Deputy President Fleming followed Fuentes and determined that so far as Item 4.12 is concerned, the maximum amount of $190 may be allowed after the telephone conference and a further $190 allowed after the conciliation/arbitration.
H&B Construction submit that the Delegate was correct in his determination and in accordance with the decision of McManus I can see no error of law or discretion on the part of the Delegate.
Item 10.01
The Table (at the relevant time) allowed a maximum amount of $187.50 under this Item for ‘all work associated with instructing an agent to act on the claim or a matter relating to the claim’.
Mr Chakti’s solicitor claimed $187.50 for instructing an agent to file documents at the Commission and to inspect and photocopy documents. The Delegate disallowed the claim stating that documents can be filed at the Commission by mail and the activity of filing comes under Item 4.01, for which Mr Chakti’s solicitor has recovered the maximum amount. The Delegate also stated that the inspection and photocopying of documents cannot be claimed as a disbursement over and above the allowance under Item 4.05.
On appeal Mr Chakti’s solicitor states that on 10 February 2005 and again on 15 February 2005 he wrote to St George Registration & Investigation Service Pty Limited instructing them to file documents at the Commission. On reviewing the files in this matter it appears that the first occasion involved the filing of the Application to Resolve a Dispute and Directions for Production. The second occasion appears to relate to the filing of a Certificate of Service.
In his submissions Mr Chakti’s solicitor states that Item 4.01 does not cover this activity, however I disagree as this Item specifically relates to, among other things, the lodging of an Application to Resolve a Dispute.
I also disagree with Mr Chakti’s solicitor’s submission that Item 4.05 refers to work done by the solicitor after the photocopied material is received from the Agent. Item 4.05 specifically refers to, among other things, reviewing documentation produced under direction of the Commission. To allow Mr Chakti’s solicitor to recover fees paid to an agent for the inspection and photocopying of documents in addition to costs under Item 4.05 would involve recovery of an amount exceeding the maximum (Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD33).
For the above reasons I am not satisfied that there was any error of law or discretion on the part of the Delegate under this Item.
Disbursements
Private Investigator’s Fee
In the Application for Assessment of Costs, Mr Chakti’s solicitor claimed the sum of $3,015.99 as a disbursement to cover the cost of a Private Investigation Report.
The Delegate reduced the claim to $917.50 and in his Reasons stated that “fees for an investigator are claimable under Clause 82(b) of the Workers Compensation Regulation 2003”.
It is submitted by Mr Chakti’s solicitor that as Clause 82(b) of the Regulations specifically excludes fees for investigator’s reports from Part 19 of the Regulations, there is no limit on the fees associated with an investigator’s report. It is further submitted that the Delegate erred because he determined $917.50 as a fair and reasonable amount and this suggests the Delegate considered the matter under Rules 105 and 106 of Part 19 of the Regulation.
H&B Construction submit that there was no error on the part of the Delegate in his determination.
Although I agree with the submission that Clause 82(b) of the Regulations does exclude investigator’s fees from Part 19, I do not accept the further submissions. The costs of an investigation report must be assessed in accordance with the Legal Profession Act 2004 (‘the LP Act’) and the Legal Profession Regulation 2005 (‘the LP Regulation’) (Berger’s case). Deputy President Fleming in Berger’s case stated the test in the LP Regulation is as follows:
“The correct test is whether the disbursement was ‘reasonably incurred or was reasonable in amount’ and whether the total amount allowed was a ‘fair and reasonable’ amount in relation to the value of the service provided.”
I see no error in the Delegate’s use of the terminology ‘fair and reasonable amount’ having
regard to the test as referred to above in Berger’s case.
The Delegate, after correctly stating that fees for an investigator are claimable under Clause 82(b) of the Regulation further stated:
“It is not appropriate to claim for work performed by an investigator that was in fact legal work covered by and encapsulated in the events and activities set out in the Table.
Thus, for example, the costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01: Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 at [18] [Nebauer’s case]. Similarly, advising the Applicant on the legislation or merits of the claim is legal work recoverable only by the solicitors under the items in the Table. On the other hand, it is legitimate to retain an investigator to gather other information not otherwise obtainable from the employer or the Applicant.”
The Delegate then disallowed the statement of Mr Chakti which was prepared by the investigator.
Deputy President Fleming in Berger’s case took the “opportunity to revisit” her decision in Nebauer where she disallowed a worker’s statement prepared by an investigator on the basis that it was encompassed by Item 2.01. In Berger’s case the Deputy President said (paragraphs 141 and 142):
“The reasoning in Nebauer as to whether the worker is to be considered a ‘witness’ for the purpose of 2.05 is not correct when the costs regime of Items 2.01, 2.04A and 2.05 is considered together. The better view is that the worker is included in the term ‘witness’ in the table…
The fee for an investigator’s report, whether to obtain witness statements or other factual investigations (including a statement from the worker), may be claimed pursuant to clause 82(b) of the WC Regulation. The test of whether such a report is claimable will, as discussed above, essentially be one of ‘reasonableness’. In most cases, it will not be reasonable to obtain witness statements by way of an investigator’s report, where the legal practitioner or agent has already obtained those statements, either at the time of taking instructions or at a later time, being before an application to the Commission is filed.”
The cost of obtaining a witness statement, including that of the worker, is normally covered under Item 2.01 or Item 2.04A of the Regulations. In the Application for Assessment of Costs, the claim under Item 2.01 did not include the cost of witness statements, and as Mr Chakti’s statement was taken by an investigator it was not claimed under Item 2.04A.
It was an error of law for the Delegate to disallow the worker’s statement prepared by the investigator and accordingly it is appropriate that I make such determination in relation to the application as in my opinion, should have been made by the Delegate (Clause 119 of the Regulation).
The statement of Mr Chakti took 1 hour. As a guide, Item 2.04A allowed (at the relevant time) $100 per hour for taking a witness statement up to a maximum of $150. Having regard to the circumstances of the case including:
·Liability was in issue;
·The investigator is not a legal practitioner, and
·The time taken for the interview.
I consider it reasonable to allow the additional sum of $100 (plus GST of $10) for the time taken in relation to Mr Chakti’s statement.
Except for the worker’s statement I am of the opinion that the Delegate exercised his discretion both fairly and lawfully in awarding the sum of $917.50 inclusive of GST. The Delegate considered that was “a reasonable amount” for the work in the investigator’s report which included a business name search, the investigation of employment and wages matters, and a statement from Mrs Chakti.
Solicitor’s travel costs and expenses
Solicitor’s travel expenses are claimed under Item 10.02 and the costs of accommodation under Item 10.03. At the relevant time travelling expenses were allowed at $0.59 per km except for the first 50kms and accommodation allowed at $120 for each night.
Mr Chakti’s solicitor claimed the following amount to travel from Young to Sydney and return in order to attend the conciliation/arbitration:
850km @ $0.59 per km = $501.50
Accommodation = $120.00
Sustenance = $ 75.00
$696.50
After noting a number of objections by H&B Construction including that there is no allowance provided under the Table for sustenance and that the first 50km was not deducted from the calculation, the Delegate allowed the claim as follows:
Travel = $442.50
Accommodation = $120.00
$562.50
In his submissions on appeal Mr Chakti’s solicitor conceded that the Delegate was correct in reducing the amount claimed having regard to there being no allowance for sustenance and that the first 50km had not been deducted. It was submitted that the Delegate had nonetheless erred because the return trip from Young to Sydney is 850km and when the first 50km is deducted the entitlement is $472.00 (800km @ $0.59 per km).
It appears that the Delegate’s calculations are incorrect and the amount of $472 claimed by Mr Chakti’s solicitor on appeal is correct and accordingly I allow an additional $29.50 ($472 less $442.50).
The Delegate’s decision not to allow costs
The Delegate did not order H&B Construction to pay Mr Chakti’s costs as he was “…largely unsuccessful in this appeal”.
Mr Chakti’s solicitor submits that he is entitled to costs because there was an increase of 62% in his fees compared to the offer made after proceedings commenced. H&B Construction submit that there was no error by the Delegate and that his order was consistent with the result.
I fail to understand this calculation by Mr Chakti’s solicitor, as he wrote to the Registrar on 28 July 2005 (after proceedings commenced) and stated the total costs and disbursements in dispute were:
$2650.87
and H&B Construction had offered:
$1800
whilst the Delegate allowed for the items specified in Mr Chakti’s solicitors letter:
$1167.50
I am not satisfied that the Delegate failed to exercise his discretion fairly on the issue of costs of the Application.
DECISION
As a result of my review the Delegate’s determination in relation to disbursements is increased as follows:
·Private investigator’s fee; an additional $110
·Solicitor’s travel expenses; an additional $29.50
The Delegate’s determination of $10,807.45 should therefore be increased by $139.50 to $10,946.95.
The Registrar’s determination of a Claim for Costs in this matter, dated 4 November 2005 is amended in accordance with these reasons.
COSTS
Mr Chakti has been partially successful in this appeal and in my opinion it is appropriate that H&B Construction pay Mr Chakti’s costs in the appeal in the sum of $275 inclusive of GST, being approximately one hour’s work.
H&B Construction Services Pty Limited are to pay Fady Chakti $275 inclusive of GST in respect of his costs of the appeal.
Julian Martin
Acting Deputy President
20 December 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JULIAN MARTIN, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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