Cranston v JA & BM Bowden & Sons Pty Ltd
[2007] NSWWCCPD 43
•9 February 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Cranston v JA & BM Bowden & Sons Pty Ltd [2007] NSWWCCPD 43
APPELLANT: Pauline Anne Cranston
RESPONDENT: JA & BM Bowden & Sons Pty Ltd
INSURER:GIO General Ltd
FILE NUMBER: WCC5779-06
DATE OF REGISTRAR’S DECISION: 27 October 2006
DATE OF APPEAL DECISION: 9 February 2007
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claims under Items 4.04, 4.07, 4.08, 4.12, 5.02, 9.01 and 10.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003; disbursements – agency fees and fees for private investigator’s reports.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Sparke Helmore Lawyers
ORDERS MADE ON APPEAL: The decision of the Registrar dated 27 October 2006 is amended in accordance with these reasons.
The Respondent, JA & BM Bowden & Sons Pty Ltd is to pay the Appellant, Ms Cranston $165 inclusive of GST in respect of her costs of the appeal.
BACKGROUND
On 8 September 2006, Pauline Cranston filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator. The Respondent to the appeal JA & BM Bowden & Sons Pty Ltd (‘Bowdens’) and Bowdens’ workers compensation insurer is GIO General Ltd (‘GIO’). On 28 September 2006, GIO lodged a Notice of Opposition to the appeal.
Ms Cranston was born on 22 February 1951 and is aged 55. She worked as a manager for Bowdens on a fruit farm at Batlow. Ms Cranston lodged a claim for workers compensation in respect of an injury to her back, right leg and sexual organs on 1 February 1999 and as a result of the nature and conditions of her employment between 1996 and 1 February 1999.
On 19 May 2004, the Commission registered Ms Cranston’s ‘Application to Resolve a Dispute’ in respect of her claim for compensation for permanent impairment and pain and suffering. On 9 June 2004, GIO filed a ‘Reply’. On 13 September 2004, an Arbitrator conducted a teleconference with the parties following which he referred Ms Cranston to two Approved Medical Specialists (‘AMSs’), Dr James Bodel, Orthopaedic Surgeon, and Dr Edward Korbel, Urologist, for examination and assessment. Their Medical Assessment Certificates (‘MACs’) were issued on 24 June 2005. On 7 July 2005, Ms Cranston’s solicitors lodged an appeal against the medical assessment made by Dr Bodel, which was referred to a Medical Appeal Panel. On 17 November 2005, the Appeal Panel revoked Dr Bodel’s MAC and issued a new MAC.
On 7 December 2005, the Arbitrator conducted a further teleconference with the parties during the course of which the parties came to an agreed resolution of the issues in dispute. On 12 December 2005, the Arbitrator issued a Certificate of Determination in the following terms:
“1. In relation to the Applicant’s claim pursuant to section 66 the Respondent agrees to pay pursuant to the AMS determinations (including Appeal Panel determination) the following:
(a) In respect of a 20% permanent impairment of the back - $12,000;
(b) In respect of a 4% permanent loss of use of the right leg at or above the knee - $3,000;
(c) In respect of a 15% loss of sexual organs - $7,050.Total $22,500
2. The Respondent further agrees to meet the Applicant’s section 67 claim by payment of the sum of $17,500.
3. The Respondent to pay the Applicant’s costs as agreed or assessed.”
On 11 April 2006, the parties having failed to agree on the costs payable, Ms Cranston’s solicitors lodged an ‘Application for Assessment of Costs’ with the Commission. GIO filed its submissions in reply on 3 May 2006. The Registrar delegated the assessment of costs to an Arbitrator (‘the Delegate’) who made a determination dated 22 August 2006. GIO identified a mistake in the Certificate of Determination dated 22 August 2006 in relation to Item 2.05. The Delegate rectified this mistake and issued an amended determination dated 27 October 2006. The Certificate of Determination stated:
“1. Pursuant to the issue of a Certificate of Determination on 12 December 2005, the Respondent employer is liable to pay the Applicant’s costs of the proceedings as agreed or assessed.
2. The Applicant’s costs of the proceedings are assessed at $6,725.78 inclusive of GST.
3. The Applicant’s costs of the assessment are assessed at $605.00 inclusive of GST.
4. The Respondent is to pay the amount of $7,330.78 inclusive of GST to the Applicant if those costs have not already been paid.”
The relevant parts of the Delegate’s Statement of Reasons for his decision are referred to below under the heading ‘Submissions, Discussion and Findings’.
ISSUES IN DISPUTE
Ms Cranston’s solicitors submit the Delegate erred in his determination of their claims in respect of Items 4.04, 4.07, 4.08, 4.12, 5.02, 9.01 and 10.01, and in disallowing their claim for disbursements in respect of agency fees and fees for a private investigator’s reports. The parties’ submissions on these issues are considered below.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘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.”
Having regard to Practice Directions Numbers 1 and 6, the documents before me, and the submission by GIO that the matter can be dealt with ‘on the papers’, Ms Cranston’s solicitors not having made any submission on this issue, 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.
No application to adduce fresh evidence was made.
SUBMISSIONS, DISCUSSION AND FINDINGS
The relevant legislation concerning appeals to the Commission against an assessment of costs, set out in the 1998 Act and the Workers Compensation Regulation 2003 (‘the 2003 Regulation’) applicable at the time of the Delegate’s assessment, was discussed by Deputy President Fleming in Berger v Moree Plains Shire Council [2005] NSWWCCPD 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. Where the exercise of the Registrar’s or her delegate’s discretion in determining what is fair and reasonable is challenged, only where that discretion has miscarried because it has been exercised unfairly or unlawfully would this constitute an error of law: Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 (‘Nebauer’), at paragraph 19; Berger, at paragraph 136.
Clause 84 of the 2003 Regulation fixes the maximum costs recoverable by legal practitioners and agents at those set out in Schedule 6, except where otherwise provided in Part 19. Schedule 6 sets out the maximum costs recoverable in workers compensation matters by reference to the Compensation Costs Table (‘the Table’) at the end of the Schedule. The Table identifies particular activities or events with an item number. It is these item numbers that are referred to below.
Ms Cranston’s solicitors identify a number of professional costs Items and disbursements as being in dispute, each of which I will deal with in turn.
Professional Costs
Item 4.04
Item 4.04 is described in column 2 of the Table as “Lodging an objection to a request for a direction for the production of documents”. Ms Cranston’s solicitors claimed $120 under this Item for “lodging objection to subpoena” in respect of Dr Newcombe and Dr Haider. GIO objected that that they were unable to find any evidence of any objections to Directions to Produce Documents and Ms Cranston’s solicitors did not produce any evidence when GIO requested this. The Delegate disallowed this claim, stating: “The substantive file in this matter (8043-2004) does not disclose the lodgement of an objection to a request for a Direction for Production and in those circumstances the claim for this Item is disallowed.”
In their submissions on the appeal, Ms Cranston’s solicitors contend that legal professional privilege was claimed in respect of three letters amongst those produced by Dr Haider (all letters from McCabe Partners – to Dr Haider dated 1 May 2001 and 5 November 2003, and to Ms Cranston dated 6 February 2003), and two documents amongst those produced by Dr Newcombe (a report by Dr Newcombe to McCabe Partners dated 22 November 2003 and a letter from Dr Newcombe to McCabe Partners dated 22 November 2003). I am satisfied by this information that Ms Cranston’s solicitors did make these claims for privilege, although I note this information should have been detailed in the Bill of Costs.
In its submissions on the appeal, GIO submits that claims for privilege do not constitute objections to production. I have reviewed the 2003 Rules in effect at the time of the Delegate’s decision. A party to proceedings before the Commission could object to a direction to production prior to production (Rule 55) or after production (Rule 56). In the case of the latter, Rule 56(1) stated:
“(1) A party to proceedings who is entitled to first access to documents produced to the Commission in accordance with a direction for production may object to another party accessing those documents.”
The Rule then set out the procedure to be followed. In my view, an objection under Rule 56 could be made on the ground of legal professional privilege. Thus, I am satisfied that Ms Cranston’s solicitors’ claim under Item 4.04 is within the description of the activity/event for that Item and the Delegate made an error of law by disallowing that claim. I therefore allow a claim for $120 under Item 4.04.
Item 4.07
Item 4.07 is described in column 2 of the Table as:
“Applying to refer a matter to an approved medical specialist, or responding to such an application (including costs associated with agreeing on the approved medical specialist and review of the report by the approved medical specialist)”.
Ms Cranston’s solicitors claimed $200 under this Item in respect of referrals to the AMSs Drs Korbel and Bodel, “[i]ncluding receiving in letters [sic] from the Workers Compensation Commission, advising the client of the medical appointment, requesting the Applicant’s travelling expenses and finally reviewing the report of the Approved Medical Specialist”. GIO submitted that the maximum claimable under this Item is $100 but submitted that, in any event, the matter was referred to the AMSs in the course of a teleconference and therefore this activity is subsumed into Item 4.09 and not claimable, as stated in Berger. The Delegate disallowed the claim for $200 under this Item, relying on the decision in Berger.
In their submissions on the appeal, Ms Cranston’s solicitors submit that it is clear that Item 4.07 refers to “an” Approved Medical Specialist and does not refer to “Approved Medical Specialist”. They submit that as in the NSW Court of Appeal decision in Orellana-Fuentes v Standard Knitting Mill Pty Ltd (2003) 57 NSWLR 282 (‘Fuentes’), the use of the word “an” indicates that claims can be made in respect of each AMS referral. GIO submits the Delegate was correct in his determination.
I note that Deputy President Fleming said in Berger, at paragraph 108:
“The first point to make about Item 4.07 is that the activity it describes must in fact be undertaken by the legal representative in order to claim the cost. When an application to refer a matter to an AMS is made in the course of a telephone conference, without any evidence of other activity by the legal representative, then Item 4.07 is effectively subsumed into Item 4.09 [“Attending and participating in a conference with an Arbitrator...”]. It is not intended that Item 4.07 be claimable regardless of whether the discrete activity it describes was carried out or not.”
This was what happened in Ms Cranston’s case. The referral took place following a teleconference, when the Arbitrator directed that Ms Cranston be referred to two AMSs for assessment. Thus, following Berger, Ms Cranston’s solicitors’ costs with regard to the referral are subsumed into Item 4.09, in respect of which the Delegate allowed $375 ($250 for the first and $125 for the second teleconference).
With regard to whether the maximum under Item 4.07 may be claimed for more than one activity/event, in Orr v Direct Couriers (Australia) Pty Ltd [2004] NSWWCCPD 28 (‘Orr’), Deputy President Fleming discussed the application of column 4 of the Table in Schedule 6. Column 4 bears the heading “Maximum total for type of activity/event”. With reference to clause 1(2) of Schedule 6, the heading for column 4, and the NSW Court of Appeal decision in Fuentes, the Deputy President said, at paragraph 38:
“the monetary values set out in Column 4 of the Table, are the maximum total for an event type in any particular claim, regardless of the number of individual activities that may take place under the event heading.”
Thus, in respect of Item 4.07, the legal practitioner may not be allowed more than the column 4 maximum regardless of the number of AMS referrals. (The only exception to the general principle, as Deputy President Fleming recognised in McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’), is in respect of Item 4.12 where, following Fuentes, the column 4 maximum of $190 may be allowed in respect of each conference or conciliation/arbitration.)
However, I note Ms Cranston’s solicitors also seek to claim in respect of reviewing the reports of the AMSs. Presumably, it was following such review that Ms Cranston’s solicitors appealed against one of the MACs. Thus in my view, it is fair and reasonable to allow $50 under Item 4.07 for reviewing the MACs.
Item 4.08
Item 4.08 is described in the Table as “Preparing for a conference (including providing advice to client)”. In their Bill of Costs dated 15 December 2005, Ms Cranston’s solicitors listed two conferences and originally claimed the then maximum of $500 allowed for this type of activity/event for the first conference and $250 for the second conference. GIO objected that the amount claimed exceeded the maximum allowable under Item 4.08, regardless of the number of teleconferences. The Delegate, who noted that the matter was finalised by a Certificate of Determination dated 12 December 2005 so that pre-17 March 2006 rates applied, disallowed the claim in respect of the second teleconference.
In their submissions on the appeal, Ms Cranston’s solicitors submit that the Delegate failed to give adequate reasons for his determination in relation to this Item. Moreover, they contend it is an error of law to limit costs recoverable to one conference. GIO submits the Delegate’s determination was correct and that only the maximum allowed for that activity/event may be claimed regardless of the number of teleconferences that took place.
In my view, Ms Cranston’s solicitors appear to have misinterpreted Justice Ipp’s judgment in Fuentes. As stated above, the column 4 maximum is the maximum total that may be claimed for an event type in any particular claim, regardless of the number of individual activities that may take place under the event heading. The exception recognised in Fuentes was only in relation to Item 4.12. Thus, in respect of Item 4.08, the Delegate was correct in disallowing Ms Quinn’s solicitors’ claim for an additional $250 for the second conference, and the appeal in respect of this Item must be rejected.
I note that the Delegate’s statement of reasons in respect of this Item is not adequate. He did not explain the reason for disallowing Ms Cranston’s solicitors’ claim in respect of the second teleconference and, by not doing so, he made an error of law. However, I am satisfied from my review of their claim under this Item that the outcome was correct for the reasons stated by GIO. I therefore confirm the determination.
Item 4.12
Item 4.12 is described in the Table as “Reporting to the client on the outcome of a conference or arbitration ...”. Ms Cranston’s solicitors claimed the maximum amount of $190 in respect of each of the two teleconferences. GIO objected that only one column 4 maximum could be claimed regardless of the number of teleconferences. The Delegate agreed and disallowed the claim in respect of the second teleconference.
In their submissions on the appeal, Ms Cranston’s solicitors seek to rely on the decision in Fuentes. GIO reiterates its previous submission.
As stated above, pursuant to the NSW Court of Appeal decision in Fuentes, the only exception to the general principle that only one column 4 maximum can be claimed in respect of a particular activity/event is, as Deputy President Fleming recognised in McManus, a claim under Item 4.12 where the column 4 maximum of $190 may be allowed in respect of each conference or conciliation/arbitration. Thus, the Delegate made an error of law in disallowing Ms Cranston’s solicitors’ claim in respect of the second teleconference, in respect of which they should be allowed a further $190.
Item 5.02
Item 5.02 is described in the Table as “Attendance at a Medical Appeal Panel hearing”. Ms Cranston’s solicitors claimed $400 under this Item on the ground that the outcome of the Medical Appeal was more favourable to the applicant for the appeal. GIO objected that attendance at a Medical Appeal Panel hearing was not required and did not occur. The Delegate disallowed the claim on the ground that “there is no evidence that a Medical Appeal Panel Hearing was conducted in this matter”.
In their submissions on the appeal, Ms Cranston’s solicitors contend they prepared extensive submissions for the Panel, who were satisfied they had sufficient information to determine the appeal without holding a hearing. Ms Cranston’s solicitors submit that failing to allow costs for the successful party to an appeal in excess of the $100 permitted under Item 5.01, is contrary to common law principles and an infringement of a person’s fundamental right to legal representation. GIO submits the Delegate was correct in disallowing this claim, for the reasons he stated.
In my view, the Delegate was correct. The column 2 description of the activity/event in respect of which a claim may be made under this Item is quite clear – there must be attendance at a Medical Appeal Panel hearing. Ms Cranston’s solicitors acknowledge that no such Panel hearing was conducted and their claim must therefore fail. Thus, I reject this ground of appeal.
Item 9.01
The activity/event for which a claim may be made under Item 9.01 is described in column 2 of the Table as “Conduct of any other proceedings before the Commission involving the determination of substantive legal issues, including preparatory work”. This includes a claim for the cost of a costs assessment. In their Bill of Costs dated 15 December 2005, Ms Cranston’s solicitors claimed the maximum of $625 permitted under this Item. GIO submitted the Applicant should not be entitled to costs of the Application because their costs were excessive and unreasonable and did not properly conform to the 2003 Regulation.
The Delegate disallowed Ms Cranston’s solicitors claim under Item 9.01 but did award $605.00, inclusive of GST, in respect of the Applicant’s costs of the proceedings. This appears to have given rise to some confusion, as is apparent in the parties’ submissions on the appeal in respect of this Item, since the costs of the assessment appear to be those claimed by Ms Cranston’s solicitors under Item 9.01. The Delegate decided to award $550 plus GST rather than the amount of $687.50 claimed under Item 9.01. The Delegate gave as the reason for his determination that the Applicant succeeded in the assessment (paragraph 16 of his Statement of Reasons), recovering approximately $700 more than that offered by the Respondent. I am not satisfied that the Delegate exercised his discretion unfairly or unlawfully in making this award, which I therefore confirm.
Item 10.01
Item 10.01 is described in column 2 of the Table as “All work associated with instructing an agent to act on the claim or a matter relating to the claim”. In their Bill of Costs dated 15 December 2005, Ms Cranston's solicitors claimed $187.50 under this Item for “All work associated with instructing an agent to act on re: claim”. GIO objected to this claim, submitting that: “the Applicant is not entitled to recover costs under this item for instructing an agent to attend upon the Commission to inspect, photocopy or claim privilege over documents produced. The costs of the same are to be absorbed by item 4.05 ...” The Delegate appears to have disallowed the claim on the basis that the Factual Liability and Summary Report prepared by St George Registration & Investigation Services Pty Ltd (‘St George’) was unnecessary given the nature of the claim and the issues in dispute between the parties.
In their submissions on the appeal, Ms Cranston’s solicitors submit the Delegate failed to give adequate reasons for his decision. They submit it is fair and reasonable for a country practitioner to use the services of St George in filing and inspecting documents and claiming legal professional privilege on the applicant’s behalf. GIO submits Ms Cranston’s solicitors are not entitled to claim for such services, the costs of which are to be absorbed by Item 4.05.
I note the disbursement of $297 claimed in respect of agency fees for St George comprises $66 (including GST) for filing on three occasions (11 May 2004, 21 May 2004 and 23 August 2004), and $231 (including GST) for inspection, claiming privilege and photocopying documents on four occasions (11 May 2004 - $66, twice on 16 July 2004 - $33 and $66, and 1 September 2004 - $66).
The inspection and photocopying of documents is covered under Item 4.05 (“Reviewing documentation produced under a direction of the Commission...”). In Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD 33 (‘Dunn’), at paragraph 41, Deputy President Fleming held that to allow the recovery of fees paid to an agent for inspection and photocopying of documents produced under a direction would be to allow recovery of an amount exceeding the maximum allowable under Schedule 6, and would be an error. She confirmed this in McManus at paragraph 30, where for similar reasons, she disallowed a claim for instructing an agent under Item 10.01. See also Flegerbein v Tom B Blackburn Pty Ltd [2006] NSWWCCPD 30, a matter involving agency fees claimed for filing and inspection and photocopying of documents.
As stated above, Item 4.04 covers claiming privilege in respect of documents produced under direction. I have allowed Ms Cranston’s solicitors’ claim under Item 4.04 and the Delegate allowed the maximum amount permitted under Item 4.05. In my view, Ms Cranston's solicitors cannot also claim for instructing an agent to undertake this activity.
With respect to the instructions on filing, in my view, there is no reason why the documents could not have been filed through the post or via DX, and I do not therefore consider the instructions in respect of filing to be reasonably necessary.
I do agree that the Delegate did not give adequate reasons for his determination under this Item. He did not explain properly his reasons for disallowing Ms Cranston’s solicitors’ claim and, by not doing so, he made an error of law. However, I am satisfied from my review that the outcome was correct for the reasons stated above. I therefore confirm the determination.
Disbursements
Agency Fees
As stated above, Ms Cranston’s solicitors claimed agency fees of $297 for work undertaken by St George, comprising filing fees of $66 (for filing on three occasions, at $22, including GST, on each occasion) and fees of $231 for “Inspection of documents, to claim legal professional privilege over and photocopying documents” (on three occasions, at $66, including GST, per occasion, and one occasion at $33, including GST). GIO submitted that the Applicant is not entitled to recover such agency fees for the reasons give in relation to Item 10.01. The Delegate disallowed the claim in respect of agency fees on the ground that no allowance is made for agency fees either in the Schedule or in clause 82 of the 2003 Regulation. He also said: “[t]he Agent’s fees must be absorbed into Item 10.01”.
In their submissions on the appeal, Ms Cranston’s solicitors note that the Delegate said that such fees should be absorbed in Item 10.01, but he disallowed their claim under that Item. They contend that such fees may be claimed under clause 82(b) of the 2003 Regulation. GIO submits that the Applicant is not entitled to recover such agency fees for the reasons given by the Delegate in relation to the claim under Item 10.01.
I note that Deputy President Fleming pointed out in Flegerbein, at paragraph 34:
“the costs referred to in clause 82 [of the 2003 Regulation], and therefore not regulated by Part 19 and Schedule 6, are specifically listed in sub-clauses (a) to (j) as, for example, is ‘fees for an investigator’s report’. All other costs that are not recoverable by legal practitioners and agents in Commission matters are regulated by Schedule 6 (clause 84 of the WC Regulation). The fees claimed here are not for an investigator’s report (clause 82(b)). They are for photocopying and for other activities already covered and claimed, under the Compensation Costs Table in Schedule 6 of the WC Regulation.”
Similarly in Ms Cranston’s case, these agency fees cannot be claimed under clause 82(b) because they are not fees for an investigator’s report. As noted above, her solicitors have already claimed and been allowed the maximum amount permitted under Item 4.05 for reviewing documentation produced under direction, and I have allowed their claim under Item 4.04 for claiming privilege for documents produced under direction. As in Dunn, to allow this claim twice in relation to the same activity would be an error. In particular, I also note that claiming legal professional privilege is a legal service that can only be recovered if provided for pursuant to Schedule 6.
With regard to the filing of documents, as I stated above, there is no reason why the documents could not have been filed through the post or via DX. I do not therefore consider the fees claimed in respect of filing to be fair and reasonable.
Thus, I reject Ms Cranston’s solicitors’ appeal in relation to agency fees.
Fees for Private Investigator’s Reports
Ms Cranston’s solicitors claimed a total of $3,245.10 in respect of St George’s fees and disbursements for preparing a factual and liability summary report dated 5 April 2004 (invoice dated 6 April 2004), and a letter to Ms Cranston’s solicitors dated 5 August 2004 with a supplementary statement by Ms Cranston signed by her on 22 July 2004 (invoice dated 8 August 2004). GIO submitted that the Applicant was not entitled to recover these fees for the reasons given in relation to Item 2.05, that is that:
“It is clear that the main purpose for the involvement of the investigator was to obtain statements from the Applicant. The Respondent submits that gathering of information for the purpose of drawing a statement from the Applicant falls under ‘obtaining instructions’ as outlined in items 2.01 and 4.05, and it is neither reasonable nor necessary to brief an investigator for the purpose of gathering information and/or drawing statements, and further it is expressly disallowed as shown by the description for item 2.05.
Further the Applicant has previously received an award in the Compensation Court for the same injuries alleged in the Workers Compensation Commission proceedings, therefore, injury and liability were not in issue. The Respondent submits that a factual investigation was not reasonable or necessary since liability had been accepted and the claim was for lump sum compensation.”
The Delegate disallowed the claim stating:
“The Factual Liability & Summary Report consists of a summary by an investigator followed by a Statement by the Applicant and a Witness Statement by Sydney James Gillan together with a Business Names Search.
The contents of these Statements are such that it is unreasonable for an investigator to be engaged to obtain such a statement. I am of the view that the Applicant’s Solicitor could have obtained this information which is essentially evidence as to the Applicant’s injury and disability at the time of taking initial instructions and in those circumstances the claim for Item 2.05 and 10.01 together with the disbursement for the Factual & Liability Summary Report is disallowed.”
In their submissions on the appeal, Ms Cranston’s solicitors contend that St George prepared a detailed and thorough report and statements by the Applicant and Mr Gillan which were necessary to the Applicant’s case. A successful applicant who necessarily incurs a disbursement should be entitled to recover that disbursement. GIO reiterates its submissions to the Delegate, that the main purpose for the involvement of the investigator was to obtain statements from the Applicant, and it was neither reasonable nor necessary to brief an investigator.
I have reviewed St George’s reports and its invoices dated 6 April 2004 and 8 August 2004. The first invoice (for $2,843.88) includes fees for a client service agreement ($140) and letter to client ($40), for “Perusal of correspondence from McCabe Partners Lawyers” ($615.00), for “Telephone conference with claimant” ($230.00), for “investigator typing statement” ($150.00), for taking a statement from Mr Gillan [who stated he had been in a de facto relationship with Ms Cranston for the past 14 years] over the telephone, typing, copying, amending the statement, and sending it to Mr Gillan, etc (a total of $338.50), for investigator researching and typing a schedule of earnings for the Applicant ($150) [not in issue in these proceedings], for “Research Factual and Liability Summary” ($75.00), for “Investigator typing summary” ($150.00), and for collating and copying the Factual Report (a total of $148.50). The second invoice (for $401.22) includes further fees for “Perusal of correspondence from McCabe Partners” ($45.00), and fees associated with obtaining a supplementary statement from Ms Cranston, preparing and researching the supplementary statement, copying it and sending it to Ms Cranston and her lawyers (a total of $261.00).
In Berger, at paragraph 142, Deputy President Fleming, recognising that the fee for an investigator’s report may be claimed pursuant to clause 82(b) of the 2003 Regulation, noted:
“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 such statements, either at the time of taking instructions or at a later time, but before an application to the Commission is filed.”
The Deputy President confirmed that where an activity may be claimed as a cost for which provision is made in the Table, a separately claimed disbursement in respect of that activity by a private investigator would not be considered reasonable. In McManus, at paragraph 21, Deputy President Fleming noted that “the costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01”, where the activity/event is described as “Obtaining instructions from a client”.
Thus, no disbursement may be claimed in respect of the statement from Ms Cranston, which one would expect to see prepared by her solicitor subsequent to taking instructions from her. In my view, other disbursements, for example in respect of a client service agreement, do not fall within clause 82(b) of the 2003 Regulation, or are not fair and reasonable - for example, the total of $660.00 claimed for perusal of correspondence, and the fees connected with the taking of statements.
Noting that liability was not itself in issue and that the claim was for permanent impairment and pain and suffering, I am not satisfied that the Delegate exercised her discretion unlawfully or unfairly in disallowing the claim, and I therefore reject this ground of appeal.
Summary
The outcome of my review of the Delegate’s decision is as follows:
Professional Costs
Item 4.04: $120 should be allowed
Item 4.07: $50 should be allowed
Item 4.08: confirmed
Item 4.12: a further $190 should be allowed
Item 5.02: confirmed
Item 9.01: confirmed
Item 10.01: confirmed
Disbursements
Agency fees: confirmed
Fees for private investigator’s reports: confirmed
Thus I have determined that a further $360.00 in professional costs should be allowed. To this must be added GST of $36.00. The Delegate’s determination of $7,330.78 should therefore be increased to $7,726.78.
DECISION
The decision of the Registrar dated 27 October 2006 is amended in accordance with these reasons.
COSTS
Ms Cranston’s solicitors have only been partially successful in this appeal, with my allowing a further $360 of over $4,500 disputed. In my view, it would therefore be fair and reasonable to allow an amount of $165 (inclusive of GST) in respect of their costs on the appeal. The appropriate order, therefore, is: “The Respondent, JA & BM Bowden & Sons Pty Ltd is to pay the Appellant, Ms Cranston $165 inclusive of GST in respect of her costs of the appeal.”
Robin Handley
Acting Deputy President
9 February 2007
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.
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