Dixon v National Engineering Pty Ltd

[2006] NSWWCCPD 300

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS

CITATION:Dixon v National Engineering Pty Ltd [2006] NSWWCCPD 300

APPELLANT:  Matthew Dixon

RESPONDENT:  National Engineering Pty Ltd

INSURER:Royal & Sun Alliance Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC 8813-05

DATE OF ARBITRATOR’S DECISION:          25 October 2005

DATE OF APPEAL DECISION:  8 November 2006

SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs; agency fees and fee for investigator’s report; claims under Items 2.05, 9.01 and 10.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003.

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: McCabe Partners Lawyers

Respondent: Royal & Sun Alliance Workers Compensation (NSW) Ltd

ORDERS MADE ON APPEAL:  The Registrar’s determination of Mr Dixon’s claim for costs in this matter, dated 25 October 2005, is amended in accordance with these reasons.

The Respondent, National Engineering Pty Ltd, is to pay the Appellant, Mr Dixon $275.00 inclusive of GST in respect of his costs in this appeal.

BACKGROUND TO THE APPEAL

1. On 8 November 2005, Matthew Dixon filed an appeal against a costs determination made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 25 October 2005. The Respondent to the appeal is National Engineering Pty Ltd, whose workers compensation insurer is Royal & Sun Alliance Workers Compensation (NSW) Ltd (‘Royal & Sun Alliance’). Neither National Engineering nor Royal and Sun Alliance have responded to service of the appeal, nor made submissions in relation thereto.

1. Mr Dixon was born on 23 March 1969 and is aged 37. He was employed by National Engineering as a labourer in Young between 1997 and 2000. Mr Dixon claims to have injured his right thumb in the course of his employment on 25 February 1998 and 7 March 1998. By letter dated 23 December 2002, Mr Dixon’s solicitors made a claim on his behalf against Royal and Sun Alliance for (1) compensation for permanent impairment, and (2) medical expenses.

1. The Commission registered Mr Dixon’s ‘Application to Resolve a Dispute’ on 25 March 2003. National Engineering’s ‘Reply’ was filed on 15 April 2003, nominating medical and legal issues in dispute, especially permanent impairment, but not factual issues. At a first teleconference conducted by an arbitrator on 7 July 2003, the parties came to an agreed resolution of the issues in dispute whereby National Engineering agreed to pay Mr Dixon $6,000 in respect of the permanent impairment of his right thumb, together with costs as agreed or assessed. The Commission subsequently issued a Certificate of Determination reflecting these terms dated 21 July 2003.

1. The parties being unable to agree to the costs payable, on 8 June 2005, Mr Dixon’s solicitors lodged an ‘Application for Assessment of Costs’ with the Commission in respect of their Bill of Costs dated 13 August 2003. Royal & Sun Alliance was invited to make submissions but did not do so.

1. The Registrar delegated the assessment to a Commission Arbitrator who made a determination dated 25 October 2005. The Certificate of Determination stated:

“1. Pursuant to a Determination made of [sic] the Commission on 21 July 2003, 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 $6,019.00.

3. There is no order as to costs of the assessment.

4. The Respondent is to pay the amount of $6,019.00 to the Applicant if those costs have not already been paid.”

ISSUES IN DISPUTE

1. Mr Dixon’s solicitors submit the Arbitrator made errors of law in disallowing their claim for the following:

(1) Item 2.05 - $100.00
(2) Item 10.01 - $187.50
(3) Disbursement – for agency fees of $178.50
(4) Disbursement – for private investigator’s report of $1,725.35
(5) Item 9.01 - $500.00

The total amount in dispute, including GST of $78.75 in respect of Items 2.05, 10.01 and 9.01, amounts to $2,770.10.

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, Mr Dixon’s solicitors having made no submission on this issue and there being no submissions from National Engineering, 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’), 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. 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 to 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. Mr Dixon’s solicitors submit the Arbitrator made an error of law by ignoring relevant material, namely their written submissions, in relation to specific claims made in their Bill of Costs. These claims are discussed below.

Professional Costs

Item 2.05

1. Mr Dixon’s solicitors maintain their claim for $100.00 under this Item in respect of briefing St George Registration and Investigation Services Pty Ltd (‘St George’) to prepare a factual and liability report. In the Bill of Costs at page 18, they contended “The Applicant is entitled to the cost of briefing a factual investigator to obtain evidence under item 2.05”. They suggested that because the matter proceeded to hearing, it should be regarded as complex.

1. The Arbitrator commented in relation to the claim made under Item 2.05:

“Claimed for briefing factual investigator (St George) at $100. There is no material before the assessment supportive of this element of the claim. The proceedings were determined by the Arbitrator on 21 July 2003 including under Direction that if a s66A Agreement was not filed within fourteen (14) days (of 21 July 2003) the matter would be struck out. This apparently immediately followed a Teleconference Consent Orders to that effect. The Applicant has put a lot of broad historic submissions to the assessment, much dealing with the assessment process in broad terms, as distinct from pertinent to the history of this matter. There is no foundation for this element of claim and it is disallowed.”

1. In McManus v Gosford City Council [2004] NSW WCC PD 61, at paragraph 21, Deputy President Fleming said:

“Item 2.05 does not encompass briefing a factual investigator to take a statement from a worker/applicant. The costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01, “Obtaining instructions from client ...”

I note that Deputy President Fleming has confirmed this in Berger at paragraph 141, where she said:

“Item 2.05 does not permit a claim for briefing a factual investigator to obtain witness statements, which includes a statement from the worker.”

1. Given the relatively straightforward nature of the claim in this matter, I am not persuaded that a factual investigation was reasonably necessary and, in my view, the Arbitrator correctly exercised his discretion. I therefore reject this ground of appeal.

Item 9.01

1. Mr Dixon’s solicitors submit that contrary to the assertion of the Arbitrator that neither party made any submission as to the costs of the assessment, on page 3 of their submissions attached to the ‘Application for Assessment of Costs’, they sought to recover “an additional amount of $500.00, pursuant to Item 9.01 of the Workers Compensation Regulations 2003”.  They now seek to recover an additional $625.00 in respect of their costs on lodging the appeal. With the applicable GST of $112.50, they now claim a total of $1,237.50 under this Item.

1. The Arbitrator commented on the $625.00 (rather than $500.00) claimed in the Bill of Costs under Item 9.01:

   “Claimed for ‘Preparing submissions’. This is not requisite to substantive legal issues which qualifies under this Item nor in the circumstances of this matter. The claim at $625 is disallowed.”

1. As the Arbitrator recognised, I note that at page 26 of the submissions attached to their Application, Mr Dixon’s solicitors claimed $625.00 for “Preparing submissions which involved substantive legal issues including preparatory work”. It is not clear to what substantive legal issues they are referring and, given the relatively straightforward nature of this matter, a claim as to “substantive legal issues” requires, in my view, some brief supporting statement. Mr Dixon’s solicitors are, however, entitled to claim their costs in preparing the application for assessment, and the Arbitrator made an error by not allowing any amount for this cost. I note they claimed total costs and disbursements of $9,413.45, of which the Arbitrator allowed $6,019.00. In my view, it would be fair and reasonable to allow $375.00 (plus GST of $37.50) representing the equivalent of approximately one and a half hours of work in respect of Item 9.01. Mr Dixon’s solicitors’ claim in respect of their costs in this appeal is dealt with below.

Item 10.01

1. Mr Dixon’s solicitors claimed $187.50 under this Item in respect of “All work associated with instructing an agent [St George] to act on re: claim”. The Arbitrator disallowed this because “This asserted agency attendance has no basis of claim in this matter”.

1. Item 10.01 is described in Column 2 of the Table as “All work associated with instructing an agent to act on a claim or a matter relating to a claim”. I am satisfied that St George is an ‘agent’ as defined in section 356(6) of the 1998 Act.

1. I have already rejected Mr Dixon’s solicitors’ submission in relation to their claim under Item 2.05 for instructing St George to prepare a factual and liability report. I am not satisfied from their submissions that there is any difference between the work for which they have claimed under that Item and that for which a claim was made under Item 10.01. In any event, as I have already explained, I am not persuaded that such a report was reasonably necessary. I therefore reject this ground of appeal.

Disbursements

Agency Fees

1. Mr Dixon’s solicitors dispute the Arbitrator’s determination on two disbursements, the first being for “Agency Fees”. Mr Dixon’s solicitors claimed $178.50 in respect of St George’s (1) “filing” on 21 March 2003, 1 April 2003, and 21 July 2003 (at $20.00 per occasion plus GST, a total of $66.00), and (2) photocopying of 96 pages at $1.00 per page ($96.00) plus a $15.00 service fee plus GST, a total of $112.50).

1. The Arbitrator noted the claim was “relative to filing and photocopying fees. There is no basis in the circumstances of this matter for this element of claim to be made. It is not fairly or reasonably claimable here. Disallowed.”

1. I note that the Arbitrator accepted Mr Dixon’s solicitors’ claim for $300.00 under Item 4.01 for the lodging of documents with the Commission, and for $100.00 under Item 4.02 for service of the material under Item 4.01. I am not therefore satisfied from Mr Dixon’s solicitors’ submissions that they are entitled to a further sum for an agent’s filing fees under Item 10.01. The appeal in relation to filing fees of $66.00 is therefore rejected.

1. With regard to the photocopying charges, an examination of the file indicates this was in respect of copying the ‘Application to Resolve a Dispute’, which is 32 pages in length. These fees of $112.50 appear to be reasonable and should have been allowed.

Private Investigator’s Fees

1. Mr Dixon’s solicitors also dispute the Arbitrator’s determination in respect of their claim for Investigator’s Fees. Mr Dixon’s solicitors claimed $1,725.35, being the fee for the Private Investigator’s Report prepared by St George. The Arbitrator, who said he had studied closely St George’s invoice, commented:

“... There is nothing reliable in the assessment information before me which grounds any fair or reasonable basis supportive of “investigatory” elements necessarily involved in these proceedings. Many Item activities have been allowed already at Table maximums, some relative to instructional activity of the solicitor at 2.01. That is the proper allocation in the circumstances of this matter for the instructional and advisory activity of the solicitor (McManus v Gosford City Council [2004] NSWWCCPD 61). I do not propose to traverse the more finite details of the Invoice itself (16 April 2003). Many of its components are simply not fair or reasonable upon any solicitor or client basis either for example “secretary typing statement”, “Client Service Agreement” and a number of other entries purporting to raise charges. This disbursement should be disallowed.”

1. Mr Dixon’s solicitors submit that to obtain the necessary information to support their client’s claim required that they employed “the services of a private investigator experienced in obtaining statements from witness’s [sic] in compliance with the Workers Compensation Commission’s orders”. Thus, they contend they were entitled to recover the cost of the private investigator’s report as fair and reasonable.

1. 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.”

2. Mr Dixon’s case appears to have been a reasonably straightforward matter, which was settled at the first teleconference. Having examined St George’s Memorandum of Costs and Disbursements dated 16 April 2003, I am unable to see how the work they undertook contributed in any significant way to preparation for the presentation of Mr Dixon’s case. It appears the only potential witness interviewed was Mr Dixon himself, who had, of course, already been interviewed by and given instructions to his solicitors. A significant number of items in the account relate to perusal of documents by the agent (which would also have been undertaken by Mr Dixon’s solicitors, including medical reports in respect of which a claim was allowed by the Arbitrator under Item 1.01), correspondence, client service agreement, dictation and typing of client statement, which seem to contribute little to Mr Dixon’s case beyond what should already been occasioned in his giving instructions to his solicitors. I am not therefore satisfied that given what appears to have been a relatively straightforward case, a factual investigation was reasonably necessary. Thus, I am not satisfied that the Arbitrator made an error in the exercise of his discretion to disallow this disbursement of $1,725.35, and I therefore reject this ground of appeal.

Summary

1. The outcome of my review of the Arbitrator’s decision in relation to the professional costs and disbursements challenged by Mr Dixon’s solicitors is as follows:

Professional Costs
• Item 2.05: the Arbitrator’s disallowance of the claim for this Item is confirmed.
• Item 9.01: it would have been fair and reasonable for the Arbitrator to have allowed $375.00 (plus GST of $37.50, gives a total of $412.50) for preparation of the ‘Application for Assessment of Costs’.
• Item 10.01: the Arbitrator’s disallowance of the claim for this Item is confirmed.

Disbursements
• Agency fees: photocopying fees of $112.50 appear to be reasonable and should have been allowed. The Arbitrator’s disallowance of claimed filing fees is confirmed.
• Private Investigator’s Report: the Arbitrator’s disallowance of the claim for this disbursement is confirmed.

1. The Arbitrator’s award of $6,019.00 should therefore be increased by $525.00 ($412.50 plus $112.50) to $6,544.00.

DECISION

1. The Registrar’s determination of Mr Dixon’s claim for costs in this matter, dated 25 October 2005, is amended in accordance with these reasons.

COSTS

1. Mr Dixon’s solicitors have been only partially successful in this appeal. In my view, it is reasonable to order that National Engineering pay Mr Taylor’s costs in this appeal in the sum of $275.00 inclusive of GST, representing the equivalent of approximately one hour of work. The appropriate order, therefore, is: “The Respondent, National Engineering Pty Ltd, is to pay the Appellant, Mr Dixon $275.00 inclusive of GST in respect of his costs in this appeal.”

Robin Handley

Acting Deputy President  

8 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.

ASSOCIATE