Chapman v Gosford City Council

[2006] NSWWCCPD 4

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS

CITATION:Chapman v Gosford City Council [2006] NSWWCCPD 4

APPELLANT:  Allan Chapman

RESPONDENT:  Gosford City Council

INSURER:Gosford City Council

FILE NUMBER:  WCC 3677-04

DATE OF REGISTRAR’S DECISION:             16 September 2004

DATE OF APPEAL DECISION:  23 January 2006

SUBJECT MATTER OF DECISION: Appeal against Registrar’s determination in respect of costs, whether maximum costs specified in Schedule 6 of the Workers Compensation Regulation 2003 are inclusive of GST.

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Whitelaw McDonald, Solicitors

Respondent: Hunt & Hunt, Lawyers

ORDERS MADE ON APPEAL:  The Registrar’s determination of Mr Chapman’s claim for costs is confirmed.

No order is made as to the costs of the appeal.

BACKGROUND TO THE APPEAL

1. On 8 October 2004, Allan Chapman filed an appeal against a costs determination made by the Registrar of the Workers Compensation Commission (‘the Commission’) dated 16 September 2004. The Respondent to the appeal is Gosford City Council, a self-insurer under the Workers Compensation Act 1987 (‘the 1987 Act’).

1. The dispute to which the costs determination relates was finalised in the Commission on 15 December 2003 by registration of an ‘Agreement to Discontinue Proceedings in the Commission’, pursuant to section 66A of the 1987 Act. The parties’ terms of settlement included an agreement that the Council pay Mr Chapman’s costs as agreed or assessed.

1. The parties having failed to come to an agreement as to costs, on 27 February 2004, Mr Chapman applied to the Registrar for an assessment of costs. The Registrar delegated the assessment to a Commission Arbitrator who made a determination dated 16 September 2004. The Certificate of Determination stated:

“1. Pursuant to an Agreement registered with the Commission on 15 December 2003 the Respondent Employer is liable to pay the Applicant’s costs of the proceedings as agreed or assessed.
1. [sic] The Respondent agreed to pay the Applicant’s costs as agreed or assessed.
2. The Applicant’s disputed costs of the substantive proceedings are assessed in the sum of $4,226.30, which sum includes GST.
3. No order as to costs.  
4. The Respondent is, therefore, to pay to the Applicant a total amount of $4,226.30, which sum includes GST.”

1. In his ‘Statement of Reasons for Decision’, the Arbitrator found:

“the negotiations in the correspondence were without prejudice, and the Respondent is entitled to put all or any of the items claimed in issue in the assessment. I invited the Applicant to make any further submissions it wished, in respect of the disputed items, but he did not take the opportunity to do so.”

The Arbitrator then addressed the disputed items, setting out his reasons for allowing or disallowing each, and summarising his decision in an attached schedule.

ON THE PAPERS REVIEW

1. Section 354(6) of the 1998 Act states:

“(6)     If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. While neither party sought to adduce fresh evidence, Mr Chapman’s solicitors sought to rely on their submissions to the Arbitrator dated 28 June 2004. The Council states that it never received a copy of these submissions and there is no indication on the Commission’s file that it ever received these submissions.

DISCUSSION

1. The relevant legislation concerning appeals to the Commission against an assessment of costs contained in the 1998 Act and the Workers Compensation Regulation 2003 (‘the 2003 Regulation’) has recently been discussed by Deputy President Fleming in Berger v Moree Plains Shire Council [2005] NSW WCC PD 152 (‘Berger’). I note, in particular, that clause 119(1) of the 2003 Regulation limits the grounds on which an appeal may be made against the decision of the Registrar on an assessment of costs “to a matter of law” arising in the proceedings to determine the costs application.

1. Mr Chapman’s solicitors submit that the Arbitrator (1) failed to consider their written submissions dated 28 June 2004, (2) incorrectly decided that previous negotiations were entered into “without prejudice”, and (3) made an error of law in deciding that the Compensation Costs Table in Schedule 6 of the 2003 Regulation provides for amounts inclusive of GST.

1. With regard to the first ground of appeal, the Arbitrator’s alleged failure to consider Mr Chapman’s solicitors’ submissions, the Council responds that it did not receive a copy of Mr Chapman’s submissions to the Arbitrator dated 28 June 2004. There is also no indication on the Commission’s file that the submissions were ever received. The Arbitrator had made the following Direction in this matter on 8 June 2004:

“1. The Applicant is to file and serve, on or before 26 June 2004, any written submissions in reply to the Respondent’s written submissions dated 1 April 2004.
2. This Direction is to be issued to the parties.”

1. Mr Chapman’s solicitors, by their own admission, did not comply with the terms of the Direction: their submissions were dated 28 June 2004 and they did not file a Certificate of Service certifying service of the document on the Council. Had they filed a Certificate of Service, even if the submissions sent to the Commission on 28 June 2004 had been lost, then at least the Commission would have been alerted to their existence. I am not therefore satisfied that there was any breach of procedural fairness by the Arbitrator, there being no evidence that he was aware of Mr Chapman’s solicitors’ submissions. There being, in my view, no error of law with regard to this first ground of appeal, it is unnecessary for me to consider Mr Chapman’s solicitors’ submissions on the disputed claims and disbursements. However, even if I am wrong in so concluding, a review of the submissions of both parties on the items in dispute does not persuade me that I should interfere with the exercise of the Arbitrator’s discretion.

1. With regard to the second ground of appeal, the submission that the Arbitrator incorrectly decided that previous negotiations were entered into “without prejudice”, the Council contends its negotiations were clearly undertaken on a “without prejudice” basis. I note the Council’s solicitors, Hunt & Hunt’s letters to Mr Chapman’s solicitors dated 12 December 2003, 15 January 2004 and 13 February 2004 are all marked “Without Prejudice Save as to Costs” and not as stated in the Council’s submissions “without prejudice as to costs”.

1. Although it is not entirely clear, it would appear that the actual wording used was intended to permit Hunt & Hunt to draw attention to their correspondence as evidence of their willingness to try and reach an agreement on costs incurred in relation to the substantive matters, so that this might be taken into account in any award of costs in relation to the costs assessment process itself. The “without prejudice” would therefore have effect in respect of any concessions that Hunt & Hunt might make in relation to individual costs items in the negotiation process. In my view, the Arbitrator was therefore correct and did not err in finding that the negotiations in the correspondence were without prejudice.

1. The third ground of appeal is that the Arbitrator made an error of law in deciding that the Compensation Costs Table in Schedule 6 of the 2003 Regulation provides for amounts inclusive of GST. The Council acknowledges that the majority of reported Commission decisions allow GST in addition to the Schedule 6 maximum amounts, but comments that it appears no issue has been taken by parties requiring a determination by the Commission on this matter, and contends Schedule 6 fees are GST inclusive.

1. As Deputy President Fleming noted in Berger at paragraph 156:

“The 1998 Act and the WC Regulation are silent in relation to the power of an Assessor to increase the award of costs pursuant to the Compensation Costs Table by the amount of any GST payable. Costs regulated by Schedule 6 are expressed to be the ‘maximum costs that are recoverable’ (clause 84 of the WC Regulation). There is no provision that expressly allows GST to be awarded in addition to the ‘maximum costs’ allowed in the Table.”

1. Section 337 of the 1998 Act states relevantly:

“337 Maximum lawyer and agent costs

(1) The regulations may make provision for or with respect to the following:
(a) fixing maximum costs for legal services or agent services provided to a claimant, an employer or an insurer in or in connection with any workers compensation matter or work injury damages matter,
(b) fixing maximum costs for matters that are not legal services or agent services but are related to a claim for compensation or work injury damages (for example, expenses for witnesses or medical reports).
(2) ...
(3) A legal practitioner is not entitled to be paid or recover for a legal service or other matter an amount that exceeds any maximum costs fixed for the service or matter by the regulations under this section.
(4) An agent is not entitled to be paid or recover for an agent service or other matter an amount that exceeds any maximum costs fixed for the service or matter by the regulations under this section.
(5) ...
(6)...”

1. Clause 84(1) of the 2003 Regulation states:

“84 Fixing of maximum costs recoverable by legal practitioners and agents

(1) The costs that are recoverable, and the maximum costs that are recoverable, for:

(a) legal services or agent services provided in or in relation to a claim for compensation, and
(b) matters that are not legal or agent services but are related to a claim for compensation,

are the costs set out in Schedule 6, except as otherwise provided by this Part.

Note. The effect of this clause is that a legal practitioner or agent cannot recover any costs in relation to a claim for compensation unless those costs are set out in Schedule 6, except as otherwise provided in this Part.”

1. By contrast, clause 123 of the 2003 Regulation specifically provides for costs recoverable in work injury damages matters to be increased by the amount of any GST payable in respect of the service to which the costs relates. Similarly, GST on costs excluded from Part 19 of the 2003 Regulation and Schedule 6, but regulated by the Legal Profession Act 2004, may be added pursuant to clause 115 of the Legal Profession Regulation 2005. (The relevant provisions of the 2004 Act and 2005 Regulation are similar to those contained in the now repealed Legal Profession Act 1987 and Legal Profession Regulation 2002 (see clause 50).)

1. In my view, the ordinary meaning of the wording of clause 84 of the 2003 Regulation is that the maximum amount allowable for a particular activity or event in the Compensation Costs Table of Schedule 6 must be interpreted as being inclusive of GST. The inclusion of clause 123 of the 2003 Regulation applicable to costs in work injury damages matters, specifically allowing the maximum amount to be increased by the amount of GST payable, indicates that had it been intended that the maximum amounts for the items in the Compensation Costs Table could be increased to take into account any GST payable, then specific provision would have been made for this.

1. In conclusion, I am not satisfied that Mr Chapman’s solicitors have made out any error of law by the Arbitrator, acting as a delegate of the Registrar, in the three grounds of appeal raised, and the decision of the Registrar must therefore be confirmed.

DECISION

1. The Registrar’s determination of Mr Chapman’s claim for costs is confirmed.

COSTS

1. The Council seeks payment of its costs in the appeal, assessing them in the amount of $320.00 pursuant to item 8.01 of the Compensation Costs Table in Schedule 6 of the 2003 Regulation. However, pursuant to section 341(4) of the 1998 Act, the Commission may not order the payment of costs by a claimant unless satisfied that the claim was frivolous or vexatious, fraudulent or made without proper justification. I am not satisfied that the claim falls into any of these categories and, in my view, it is appropriate that I make no order as to the costs of this appeal.

Robin Handley

Acting Deputy President  

23 January 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE