De Jesus v Sargents Pty Ltd

[2006] NSWWCCPD 328

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS

CITATION:De Jesus v Sargents Pty Ltd [2006] NSWWCCPD 328

APPELLANT:  Maria Ramos De Jesus

RESPONDENT:  Sargents Pty Ltd

INSURER:QBE Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC9020-05

DATE OF REGISTRAR’S DECISION:             9 May 2006

DATE OF APPEAL DECISION:  29 November 2006

SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claims under Items 1.01, 2.04, 4.01 and 9.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003; disbursements – fees for medical reports and private investigator’s report.

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: McCabe Partners Lawyers

Respondent: Gillis Delaney Lawyers

ORDERS MADE ON APPEAL:  The Registrar’s determination of Ms De Jesus’ claim for costs in this matter, dated 9 May 2006, is amended in accordance with these reasons.

The Respondent, Sargents Pty Ltd, is to pay the Appellant, Ms De Jesus $385 inclusive of GST in respect of her costs in this appeal.

BACKGROUND TO THE APPEAL

1. On 6 June 2006, Maria Ramos De Jesus filed an appeal against a costs determination made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 9 May 2006. The Respondent to the appeal is Sargents Pty Ltd. Sargents’ workers compensation insurer is QBE Workers Compensation (NSW) Ltd (‘QBE’). On 27 June 2006, QBE filed their response to the appeal. Ms De Jesus’ solicitors made further submissions received on 4 August 2006.

1. Ms De Jesus was born on 9 March 1970 and is aged 36. On 19 June 2002, she suffered a crush injury to her right hand while working as a process worker with Sargents at its premises in Colyton. On 8 December 2003, the Commission registered her ‘Application to Resolve a Dispute’ in respect of her claim for medical expenses and compensation for permanent impairment and pain and suffering. No ‘Reply’ was filed by QBE. On 9 March 2004, the Commission registered an agreement between the parties under section 66A of the Workers Compensation Act 1987 (‘the 1987 Act’) whereby QBE agreed to pay $65,000 compensation under sections 66 and 67 of the 1987 Act in respect of a 25% whole person impairment, together with the “Applicant’s costs as agreed or assessed”.

1. On 10 June 2005, the parties having failed to agree on the costs payable, Ms De Jesus’ solicitors lodged an ‘Application for Assessment of Costs’ with the Commission in respect of their Bill of Costs dated 22 January 2004. QBE did not file submissions.

1. The Registrar delegated the assessment of costs to a Commission Arbitrator (‘the Delegate’) who made a determination dated 9 May 2006. The Certificate of Determination stated:

“1. Pursuant to the Registration of Section 66A Agreement dated 9 March 2006 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 $4,413.50.
3. There should be no Order as to Costs of the Assessment.
4. The Respondent is therefore to pay the Applicant a total amount of $4,413.50 if those costs have not already been paid.”

1. The relevant parts of the Delegate’s Statement of Reasons for his decision are referred to below.

ISSUES IN DISPUTE

1. Ms De Jesus’ solicitors submit that the Delegate made a jurisdictional error of law on the face of the record by failing to allow (1) their costs of the assessment, (2) the costs of medical reports prepared by Dr Preketes ($1,100), Dr Gabrael ($339) and Nepean Hospital ($33), and (3) the cost of the private investigator’s report ($2,999.81). In their response, QBE also questions the Delegate’s assessment under Items 1.01, 2.04 and 4.01. The parties’ submissions are discussed below.

ON THE PAPERS REVIEW

1. 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.”

1. Having regard to Practice Directions Numbers 1 and 6 and the documents before me, neither party 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. 

1. No application to adduce fresh evidence was made.

SUBMISSIONS, DISCUSSION AND FINDINGS

1. 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’), 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, at paragraph 19; Berger, at paragraph 136.

1. 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.

1. Ms De Jesus’ solicitors’ submissions and those of QBE are considered below in relation to the specific Items or disbursements in respect of which there is a disputed claim.

Professional Costs

Item 1.01

1. Item 1.01 is described in column 2 of the Table as “Obtaining and reviewing medical reports”. Ms De Jesus’ solicitors claimed the maximum of $600 permitted for this activity or event, which was allowed by the Delegate. QBE submits the $600 allowed should be reduced because Ms De Jesus’ solicitors “never indicated what reports were obtained and reviewed”. Ms De Jesus’ solicitors submit that they clearly indicated what reports were obtained and reviewed in their letter to QBE dated 1 February 2005.

1. I have examined Ms De Jesus’ solicitors’ letter dated 1 February 2005 and confirm that the reports reviewed are listed there. The $600 allowed by the Delegate is therefore confirmed.

Item 2.04

1. Item 2.04 is described in column 2 of the Table as “Obtaining and reviewing medical reports (other than where Item 1.01 applies)”. Ms De Jesus’ solicitors claimed $300 under this Item, which was allowed by the Delegate. QBE’s submission and Ms De Jesus’ solicitors’ response is the same as that for Item 1.01.

1. I have examined Ms De Jesus’ solicitors’ letter dated 1 February 2005 and confirm that the medical reports requested and reviewed are listed there. The $300 allowed by the Delegate is therefore confirmed.

Item 4.01

1. Item 4.01 is described in column 2 of the Table as: “Lodging any of the following with the Commission: (a) an application for resolution of a dispute, (b) a response to an application, (c) an application for expedited assessment, and (d) an application for joinder of another party.” Ms De Jesus’ solicitors claimed the maximum of $300 for this activity or event, which was allowed by the Delegate. The Delegate said:

“The Insurer denies that either it or the Respondent received a copy of the Application. If it is the case it seems difficult to accept how the dispute came to be determined. Like the Applicant, I am mystified by this objection and believe that as the matter patently involved the issuing of proceedings. [sic] The Applicant must be entitled to this amount.”

1. QBE again submits that neither it nor Sargents: “directly ever receive [sic] an actual copy of the Application to Resolve a Dispute. Evidence of service should be provided.” In response, Ms De Jesus’ solicitors submit: “There is an affidavit of service attached to the file and the Respondent has filed a Reply”.

1. I have reviewed the Commission’s file. A ‘Certificate of Service’ in respect of service of the Application and attached documents on Sargents on 10 December 2003 was filed with the Commission on 17 December 2003. A ‘Direction for Production’ addressed to Sargents was also issued by the Commission on 9 December 2003 at the request of Ms De Jesus’ solicitors received on 8 December 2003. There is no evidence on the Commission’s file for this matter of any ‘Reply’ ever being received by the Commission.

1. Having reviewed the Commission’s file, I am satisfied from evidence of the ‘Certificate of Service’ of the Application that it was fair and reasonable for the Delegate to allow Ms De Jesus’ solicitors’ claim for $300 under this Item.

Item 9.01

1. Item 9.01 is described in column 2 of the Table as “Conduct of any proceedings before the Commission ...”. A claim for the cost of a costs assessment is covered by this Item. Ms De Jesus’ solicitors claimed their costs of the assessment in the sum of $687.50, the maximum permitted. The Delegate stated in disallowing this claim:

“I consider that the limited issues upon which the Applicant has succeeded do not, when the net result achieved by the matters determined in this Application are considered, do not [sic] entitle the Applicant to the Costs of the Assessment.”

1. Ms De Jesus’ solicitors state that they sought professional costs of $3,460 plus GST, QBE had made an offer in their letter dated 29 June 2004 of $1,685, and the Delegate allowed $3,085 plus GST. Therefore, the amount allowed by the Delegate exceeded QBE’s offer by 49%.

1. QBE submit that the only documentation received by it from Ms De Jesus’ solicitors in relation to costs is a letter dated 1 February 2005 which was a response to QBE’s letter dated 29 June 2004. However, as Ms De Jesus’ solicitors point out, the letter dated 29 June 2004 refers to Ms De Jesus’ solicitors’ letter dated 22 January 2004 to which it appears QBE was responding with comments on the professional costs claimed.

1. I have reviewed the Delegate’s Statement of Reasons for his decision. With regard to professional costs, I note he allowed all but $375 (Item 2.06 - $500 claimed, $125 allowed) of the amounts in dispute claimed. With regard to the disbursements in dispute, the Delegate disallowed three of the medical reports for which a claim was made on the basis that there is no evidence that these reports were served on QBE. He also disallowed the claim in respect of the fee for the private investigator’s report on the ground that such a claim was not reasonable, and noting Deputy President Fleming’s comments in Berger.

1. In my view, on the basis of this outcome, and noting my decision, below, in relation to the medical reports, it would have been fair and reasonable for the Delegate to allow a part of the costs of the assessment claimed. Thus, the Delegate should have allowed the sum of $412.50 (plus GST), reflecting approximately one and a half hours of work.

Disbursements

Fees for Medical Reports

1. Ms De Jesus’ solicitors maintain their claim for (1) $1,100 for a medical report from Dr Angelo Preketes, Treating Plastic Surgeon, dated 5 November 2003, (2) $339 for medical reports from Dr Atef S Gabrael, General Practitioner, and (3) $33 for clinical notes from Nepean Hospital, where Ms De Jesus was admitted after the accident and spent nine days in the care of Dr Preketes, who, it appears, operated on Ms De Jesus’ hand. Copies of accounts from Dr Preketes and Dr Gabrael were attached to the ‘Application for Assessment of Costs’. The Delegate did not allow the claims for Dr Gabrael and Nepean Hospital, although he made no mention of the claim in respect of Dr Preketes. He stated that QBE disputed that Dr Gabrael’s report or the clinical notes supplied by Nepean Hospital were ever served on it or Sargents. In fact, in their letter dated 29 June 2004, QBE also stated that neither it nor Sargents had ever been served with a copy of Dr Preketes’ report. The Delegate said Ms De Jesus’ solicitors’ submissions had not addressed this issue and “in the absence of evidence that these reports were served I am not prepared to allow them”.

1. Ms De Jesus’ solicitors submit that on 7 October 2005, “our office was advised by the Commission that there were no submissions filed on behalf of the Respondent and therefore there was no need for the Applicant to file and serve any further submissions”. They submit these reports could be treated as “claimed management phase reports”.

1. Generally in respect of the disbursements in dispute, QBE questions whether Ms De Jesus’ solicitors have already recovered for these disbursements in their claim for costs and disbursements pursuant to Schedule 7 of the 2003 Regulation, which QBE has paid in relation to the recovery of work injury damages. In response, Ms De Jesus’ solicitors provided a copy of their account to Ms De Jesus dated 25 January 2006 in respect of the work injury damages claim. I note this does not include any claim in respect of the disbursements in dispute in the current matter.

1. I have reviewed the Commission’s file in respect of the ‘Application to Resolve a Dispute’. I note that at Part 5.2 this refers to intended reliance on documents from Nepean Hospital, Dr Gabrael and Dr Preketes which are not yet available. I note that the report from Dr WGD Patrick, Surgeon, dated 2 September 2003, which was attached to the Application, refers to Dr Preketes, Dr Gabrael and to Ms De Jesus’ admission to Nepean Hospital. QBE did not file any ‘Reply’ in response to this Application with the Commission. I also note that QBE did not file any submissions with the Commission in respect of the ‘Application for Assessment of Costs’ received by the Commission on 10 June 2005, despite a follow up letter from the Commission dated 31 August 2005 inviting submissions within 14 days. By letters dated 7 October 2005, the Commission notified QBE and Ms De Jesus’ solicitors that the matter had been referred to a costs assessor for determination and noting that no submissions had been filed by QBE.

1. In my view, QBE must bear some responsibility for the lack of service of the reports by reason of their failure to respond to the applications filed by Ms De Jesus’ solicitors with the Commission. The three reports/clinical notes in issue were patently relevant to Ms De Jesus’ claim and, notwithstanding that these were not served, in the circumstances, it would have been fair and reasonable for the Delegate to allow the claims in respect of these disbursements.

Fee for Private Investigator’s Report

1. Ms De Jesus’ solicitors also dispute the Delegate’s determination in respect of their claim for the private investigator’s fee of $2,999.81 for preparing the Factual and Liability Summary Report. The Delegate commented that Ms De Jesus’ solicitors’ submissions of 9 June 2005 “are general and unhelpful”. In those submissions [attached to the ‘Application for Assessment of Costs’], Ms De Jesus’ solicitors contended that a factual investigation report, including a statement from Ms De Jesus and other material, was necessary. QBE, in their letter dated 29 June 2004, stated that it did not understand how the factual investigation was relevant or required.

1. The Delegate referred to Deputy President Fleming’s comments in Berger and concluded that the claim was not reasonable, being “very much out of proportion to the issues and entitlements involved in this matter, particularly in the context of the limited number of issues in dispute”.

1. I note that in Berger at paragraph 142, Deputy President Fleming said:

“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.”

1. I have reviewed the Factual and Liability Summary Report dated 18 September 2003 prepared by St George Registration & Investigation Services Pty Ltd (‘St George’), which was attached to the ‘Application to Resolve a Dispute’. I note this includes statements by Ms De Jesus and her husband, Herminio Ramos De Jesus, a business names search for Sargents, a Schedule of Earnings for Ms De Jesus, and other material concerning the accident including photographs. In my view, a significant amount of the material would ordinarily have been gathered by Ms De Jesus’ solicitors in the course of their obtaining instructions from their client. There is therefore the question of duplication, since Ms De Jesus’ solicitors have also made a claim under Item 2.01 (“Obtaining instructions from client”), which was conceded by QBE.

1. I note the Delegate’s comment about the claim for St George’s fee being “out of proportion to the issues and entitlements in issue” which, in my view, has substance. I have also examined St George’s ‘Memorandum of Costs and Disbursements’ dated 3 October 2003. This includes $480 for “Perusal of correspondence from McCabe Partners Lawyers”, which in my view is not fair and reasonable, $140 for a client service agreement and $40 for a letter to Ms De Jesus about this, which does not fall within clause 82(b) of the 2003 Regulation, and approximately $500 in total in relation to the statement from Ms De Jesus. There are also a large number of minor costs, such “Letter to Barrister enclosing Factual Report for advice”, which should not be included or are not fair and reasonable. In my view, the only costs which are fair and reasonable are those associated with the additional witness statement, the Schedule of Earnings and the business names search. For these I allow the sum of $500.

Summary

1. The outcome of my review of the Delegate’s determination in relation to the professional costs and disbursements in issue is as follows:

Professional Costs
• Item 1.01: the amount of $600 allowed by the Delegate is confirmed.
• Item 2.04: the amount of $300 allowed by the Delegate is confirmed.
• Item 4.01: the amount of $300 allowed by the Delegate is confirmed.
• Item 9.01: it would have been fair and reasonable for the Delegate to allow $421.50 plus GST.

Total additional costs allowed: $421.50 plus $42.15 GST = $463.65

Disbursements
• Fees for medical reports: the Delegate should have allowed $1,100 in respect of the fee for Dr Preketes’ report, $339 in respect of the fee for Dr Gabrael's reports, and $33 in respect of Nepean Hospital’s fees, a total of $1,472.
• Fee for private investigator’s report: it would have been fair and reasonable for the Delegate to allow $500 in respect of this report.

Total additional disbursements allowed: $1,972.00

1. The Delegate’s determination of $4,413.50 should therefore be increased by $2,435.65 ($463.65 + $1,972.00) to $6,849.15.

DECISION

1. The Registrar’s determination of Ms De Jesus’ claim for costs in this matter, dated 9 May 2006, is amended in accordance with these reasons.

COSTS

1. Ms De Jesus’ solicitors have been partially successful in this appeal. In my view, it is reasonable to order that Sargents pay Ms De Jesus’ costs in the appeal in the sum of $385.00 inclusive of GST, representing the equivalent of approximately one and a half hours of work. The appropriate order, therefore, is: “The Respondent, Sargents Pty Ltd, is to pay the Appellant, Ms De Jesus $385 inclusive of GST in respect of her costs in this appeal.”

Robin Handley

Acting Deputy President  

29 November 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.

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