Duncan v Moree Plains Council t/as Moree Plains Shire Council
[2007] NSWWCCPD 8
•9 January 2007
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Duncan v Moree Plains Council t/as Moree Plains Shire Council [2007] NSWWCCPD 8
APPELLANT: Leslie Duncan
RESPONDENT: Moree Plains Council t/as Moree Plains Shire Council
INSURER:Allianz Australia Workers’ Compensation (NSW) Ltd
FILE NUMBER: WCC9723-05
DATE OF REGISTRAR’S DECISION: 20 December 2005
DATE OF APPEAL DECISION: 9 January 2007
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claims under Items 1.01, 2.05, 2.06, 4.07, 4.08, 4.12, 9.01 and 10.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003; whether maximum costs specified in the Table before 17 March 2006 are inclusive of GST; disbursement – fee for private investigator’s report.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Ellison Tillyard Callanan Solicitors
ORDERS MADE ON APPEAL: The Registrar’s determination of Mr Duncan’s claim for costs in this matter, dated 20 December 2005, is amended in accordance with these reasons.
The Respondent, Moree Plains Council, is to pay the Appellant, Mr Duncan $175.00 inclusive of GST in respect of his costs in this appeal.
BACKGROUND TO THE APPEAL
On 19 January 2006, Leslie Duncan filed an appeal against a costs determination made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 20 December 2005. The Respondent to the appeal is Moree Plains Council t/as Moree Plains Shire Council (‘the Council’). On 9 February 2006, the Council filed a ‘Notice of Opposition’ to the appeal. The Council’s workers compensation insurer is Allianz Australia Workers’ Compensation (NSW) Ltd (‘Allianz’).
Mr Duncan was born on 12 November 1941 and is aged 65. He was employed by the Council as a labourer, and claims to have suffered back pain, left leg pain, right arm pain and impairment to sexual organ as a result of the nature and conditions of his employment with the Council between February 2001 and April 2003. Mr Duncan gave notice of the injury and lodged a claim for workers compensation on 2 April 2003.
On 17 September 2003, the Commission registered Mr Duncan’s ‘Application to Resolve a Dispute’ in respect of his claim for (1) weekly compensation, (2) medical, hospital or related expenses, and (3) compensation for permanent impairment and pain and suffering. The Council lodged its ‘Reply’ on 3 October 2003. On 12 January 2004, an Arbitrator conducted a teleconference with the parties, following which, on 15 January 2004, he issued directions requiring, among other things, the parties to file and serve written submissions regarding the amount to be deducted for previous injuries in the assessment of loss, pursuant to section 68B(3) of the Workers Compensation Act 1987.
Mr Duncan’s solicitors appealed against these directions but failed to file a Certificate of Service as required by Rule 77(4) of the Workers Compensation Commission Rules 2003. On 20 July 2004, Deputy President Fleming struck out the application for leave to appeal pursuant to Rule 6(4).
On 30 December 2004, the Registrar referred Mr Duncan to two Approved Medical Secialists (‘AMS’s) for assessment of his permanent impairment. The Commission issued the Medical Assessment Certificates of the AMSs, Dr Stuart Taylor, Urologist, and Dr Robin Mitchell, Occupational Physician, on 28 February 2005.
On 14 April 2005, an Arbitrator conducted a telephone conference with the parties at which the parties came to an agreed resolution of the issues in dispute. On 18 April 2005, the Arbitrator issued a Certificate of Determination in the following terms:
“1. The Respondent is to pay the Applicant the sum of $6,250 in respect of a 5 percent whole person impairment in accordance with the Medical Assessment Certificate of Dr Mitchell.
2. The Respondent is to pay the Applicant’s costs as agreed or assessed.”
On 23 June 2005, the parties having failed to agree on the costs payable, Mr Duncan’s solicitors lodged an ‘Application for Assessment of Costs’ with the Commission in respect of their Bill of Costs dated 6 May 2005. The Council’s submissions were received on 14 July 2005, and Mr Duncan’s solicitors’ response on 29 July 2005.
The Registrar delegated the assessment of costs to a Commission Arbitrator (‘the Delegate’) who made a determination dated 20 December 2005. The Certificate of Determination stated:
“1. Pursuant to Consent Orders of 18 April 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 $5360.00.
3. The Applicant’s costs of the assessment are not allowed.
4. The Respondent is to pay the amount of $5360.00 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.
ISSUES IN DISPUTE
Mr Duncan’s solicitors submit the Delegate erred in his determination of their claims in respect of Items 1.01, 2.05, 2.06, 4.07, 4.08, 4.12, 9.01 and 10.01, and in disallowing their claim for a disbursement in respect of a private investigator’s fee. They also submit he erred by failing to allow recovery of an additional amount in respect of GST payable on their professional costs. 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 the Council that the matter can be dealt with ‘on the papers’, Mr Duncan’s solicitors having not 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’), 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.
Mr Duncan’s solicitors identify a number of professional costs Items and one disbursement as being in dispute, each of which I will deal with in turn, together with the issue of whether an additional amount in respect of GST payable on their professional costs should be allowed.
Professional Costs
Item 1.01
Item 1.01 is described in column 2 of the Table as “Obtaining and reviewing medical reports”. Mr Duncan’s solicitors claimed the maximum of $600 permitted for this activity or event. The Delegate allowed $150. He noted that the Respondent objected on the basis that all except one of the reports had been obtained in relation to previous proceedings, and that only one report was annexed to the ‘Application to Resolve a Dispute’. The Applicant contended that it was necessary to peruse all medical reports as to the history of the back injury claim. The Delegate said Item 1.01 is for “Obtaining and reviewing” and he was not satisfied that there had been any effective obtaining of historic reports for the present proceedings. Moreover, he concluded that the claim of $600 was not fair and reasonable in circumstances where a 5% whole person impairment had been determined.
Mr Duncan’s solicitors maintain their claim for $600. They state they perused 11 medical reports for the purpose of these proceedings and that the Delegate’s reference to the claim not being fair and reasonable in relation to the 5% whole person impairment was an irrelevant factor. The Council submits that it was open to the Delegate to find as he did and there has been no error of law. It referred to the decision in Berger, at paragraph 95, where Deputy President Fleming noted:
“Item 1.01 reports must be in relation to a claim for permanent impairment and lump sum compensation, not in relation to a claim for some other entitlement, for example, weekly benefits compensation.”
The Council contends that reports obtained prior to the date of injury in relation to a claim against a prior employer (Compensation Court of NSW proceedings resolved on 24 October 2000) cannot have been obtained in relation to the current proceedings. The fact that the Council attached to its ‘Reply’ the Short Minutes of Order of Judge Hughes with two medical reports, does not entitle the Applicant to claim for reviewing those reports since this did not occur in relation to the ‘making’ of the claim.
I have reviewed the ‘Application to Resolve a Dispute’ registered by the Commission on 17 September 2003. Attached to the Application are three medical reports from Dr Peter Conrad, Surgeon, all dated 29 January 2003 (a principal report of two pages and two supplementary reports of one page each) obtained in relation to Mr Duncan’s claim for permanent impairment. There is also a one page report of a CT scan of Mr Duncan’s spine from Dr J McGuire, dated 13 December 2002 (to whom Mr Duncan appears to have been referred by his treating doctor Dr L Steffen). I note Mr Duncan’s solicitors claimed for obtaining and reviewing Dr Conrad’s medical reports under Item 2.04 ($150 for one report and $75 each for the two other reports), and claimed $100 for reviewing Dr McGuire’s report under Item 1.01. The Delegate allowed Mr Duncan’s solicitors the maximum of $600 permitted under Item 2.04.
I am not satisfied that the Delegate made any error of law in exercising his discretion to allow $150 under Item 1.01. Clearly, with reference to Berger, the historic reports in relation to previous Compensation Court proceedings cannot be said to be specifically in relation to the subject proceedings claiming compensation for permanent impairment. The Delegate had a discretion in terms of what he considered fair and reasonable pursuant to clause 110 of the 2003 Regulation, and I am not satisfied that he did not exercise the discretion properly. He was entitled to take into consideration all relevant circumstances in relation to the proceedings, including the outcome in terms of the 5% whole person impairment assessed by the AMS, Dr Mitchell. I therefore reject this ground of appeal.
Item 2.05
Item 2.05 is described in column 2 of the Table as “Briefing a factual investigator or other investigator to obtain evidence other than witness statements (not including the investigator’s fee)”. Mr Duncan’s solicitors’ claimed for the maximum of $100 permitted under this Item in respect of briefing St George Registration and Investigation Services Pty Ltd (‘St George’) to prepare a factual and liability summary report.
The Delegate did not accept that the matter was complex and disallowed the claim. He commented that having studied the subject ‘investigation’ fee statement of 14 April 2003:
“There is nothing of conviction in it which leads to any conclusion that the intervention of ‘investigation services’ was, in the circumstances of this matter either fair or reasonable, or indeed necessary.”
Mr Duncan’s solicitors maintain their claim for $100 and submit it was fair and reasonable for them to brief St George: a number of issues were in dispute and the documents referred to the AMSs included the reports prepared by St George. In its submissions on the costs assessment, the Council said it did not believe the involvement of a factual investigator was warranted, particularly in view of the fact that Mr Duncan’s solicitors had acted for Mr Duncan in previous proceedings. It doubted that that the report contained any material not already within Mr Duncan’s solicitors’ knowledge or possession which served to advance the current proceedings. In its submissions on the appeal, the Council also referred the Commission to the decision in Berger at paragraph 133.
I have examined the Factual and Liability Summary Report prepared by St George dated 24 June 2003. I am in general agreement with the Delegate’s comments and I am not satisfied that there is any evidence to suggest that the Delegate exercised his discretion unfairly or unlawfully in disallowing Mr Duncan’s solicitors’ claim under Item 2.05.
I note what Deputy President Fleming said in McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’), at paragraph 21:
“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 ...”
She 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.”
With regard to other material contained in the Report, and given Mr Duncan’s solicitors’ background in dealing with Mr Duncan’s previous compensation claims, in my view, it adds little if anything to the supporting material required for the presentation of his case. I therefore reject this ground of appeal.
Item 2.06
Item 2.06 is described in column 2 of the Table as “requesting a review of the claim from the insurer, prior to referral of the matter to the Commission”. At the relevant time, the amount that could be claimed was $250 per hour subject to a maximum of two hours. Mr Duncan’s solicitors’ claimed $500 under this Item. The Delegate, commenting on the Applicant’s submissions, said Item 2.06: “is for the activity of requesting a review. There is one singular activity, of 14 July 2003, with reference to that on the material before me.” He allowed $125 for the letter to Allianz dated 14 July 2003.
Mr Duncan’s solicitors maintain their claim for $500, stating that the Delegate was incorrect. Item 2.06 provides for a time-based allowance; the letter to Allianz dated 14 July 2003 enclosed a four page letter to the Council dated 4 July 2003 requesting a review.
I note the letter to the Council dated 4 July 2003 and the letter to Allianz dated 14 July 2003 were attached to the ‘Application to Resolve a Dispute’ registered by the Commission on 23 August 2004. The letter of 4 July 2003 enclosed copies of four medical reports, and both asked the Council to review its file, and requested further information from the Council, including details of its workers compensation insurer and of the relevant policy. The one page letter to Allianz dated 14 July 2003 enclosed the letter to the Council dated 4 July 2003.
In my view, Mr Duncan’s solicitors were entitled to claim in respect of both letters, since the work undertaken for the letter dated 4 July 2003 was the foundation of the letter to Allianz dated 14 July 2003. However, I note that most of the letter dated 4 July 2003 appears to be of a standard form requesting further information. I doubt that the work involved in the two letters would have taken any more than one hour at most. I therefore allow the sum of $250 under this Item rather than the $125 allowed by the Delegate.
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...”. The Delegate disallowed Mr Duncan’s solicitors’ claim for $200 under this Item, noting that the claim exceeded the allowable maximum for this type of activity/event of $100, and relying on the decision in Berger, on the ground that the work relating to the referral to the AMSs “was all done within the singular ambit of the subject telephone conference” so that the activity was subsumed into Item 4.09.
In their submissions on the appeal, Mr Duncan’s solicitors submit the Delegate made an error of law, and refer to the NSW Court of Appeal decision in Orellana-Fuentes v Standard Knitting Mill Pty Ltd (2003) 57 NSWLR 282 (‘Fuentes’). They also note that in cases such as Mr Duncan’s, “it may be necessary for a worker to refer to different specialists for consideration of different parts of the body”.
The Council submits that, pursuant to Berger, it is clear that a claim may not be allowed under Item 4.07 when the event occurred in the course of a teleconference.
In Berger, at paragraph 108, Deputy President Fleming said:
“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.”
I note that in this case the referral to two AMSs was made by the Registrar in December 2004, following a teleconference by the Arbitrator with the parties on 12 January 2004, directions given by the Arbitrator on 15 January 2004, submissions made by the parties, and Deputy President Fleming’s determination of an appeal by Mr Duncan on 20 July 2004. Thus, following Berger, Mr Duncan’s solicitors’ costs in this regard are subsumed into Item 4.09 in respect of which the Delegate allowed the $250 claimed.
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 this general principle, as Deputy President Fleming recognised in 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.)
The Delegate’s disallowance of Mr Duncan’s solicitors’ claim under this Item is therefore confirmed.
Item 4.08
Item 4.08 is described in the Table as “Preparing for a conference (including providing advice to client”. At the relevant time, the maximum total for that type of activity or event was $500. In their Bill of Costs, Mr Duncan’s solicitors listed two conferences (11 January 2004 [sic – 12 January 2004], and 14 April 2005), and claimed $500 in respect of each. The Delegate only allowed a claim in respect of the first teleconference on the ground that $500 was the maximum allowed for that type of activity or event. Mr Duncan’s solicitors therefore claim an additional $500 under this Item in respect of the second teleconference.
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. Thus, in respect of Item 4.08, Mr Duncan’s solicitors’ claim for an additional $500 must be disallowed.
Item 4.12
This Item is described in the Table as: “Reporting to the client on the outcome of a conference or arbitration ...”. The maximum total for the type of activity/event at the relevant time was $190. As stated above, while the general principle is that only the maximum total for an activity/event type may be claimed regardless of the number of individual activities that may take place under the event heading, in Fuentes, the NSW Court of Appeal recognised an exception in respect of Item 4.12 so that the column 4 maximum of $190 may be allowed in respect of each conference or conciliation/arbitration. (See also McManus, especially at paragraph 24.)
Mr Duncan’s solicitors claimed $190 under this Item in respect of reporting to their client on each of the teleconferences on 12 January 2004 and 14 April 2005. Despite the Council conceding the claim, the Delegate disallowed the claim for the second teleconference, apparently on the basis that the claim under Item 4.12 had been exhausted by the $500 claim in respect of the conference on 12 January 2004. In their submissions on the appeal, Mr Duncan’s solicitors submit it is an error of law to limit the costs recoverable to one conference. The Council does not dispute this.
In my view, the Delegate has misinterpreted the law. Generally, a solicitor needs to report to the client after each teleconference or conciliation/arbitration. It is clear from Deputy President Fleming’s discussion of this in McManus, at paragraphs 22 to 28, that the claim is not limited to one teleconference or one conciliation/arbitration. On occasion there may be more than one of each. Thus, the Delegate should have allowed a further $190 under this Item in respect of the teleconference on 14 April 2005.
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. Mr Duncan’s solicitors claimed $625 under this Item for preparing submissions involving substantive legal issues. The Delegate disallowed this claim on the ground that there is no provision for a claim for the activity of written submissions in the Table.
Mr Duncan’s solicitors submit they are entitled to claim $625 for preparing written submissions, concerning the determination of substantive legal issues, at the direction of the Arbitrator on 15 January 2004, following the teleconference on 12 January 2004. They submit that ‘proceedings’ should be defined as “a particular action or course of action”, or “the act of one who or that which proceeds”, or a “legal step or measure”. The proceedings in this matter occurred when the Arbitrator requested the parties to prepare written submissions – this was a legal step or measure resulting in the determination of the applicant’s entitlements. The Council submits there were no ‘other proceedings’ issued by either party, and there is no Item in the Table which refers to the preparation of submissions in the teleconference stage. Thus, it submits the claim must be disallowed.
In my view, the preparation of written submissions at the direction of the Arbitrator did not involve conducting or preparing for “any other proceedings before the Commission”. There were no other proceedings – merely the proceedings then before the Arbitrator. I agree with the Delegate that there is no separate provision in Table 6 for the activity of preparing written submissions, and Mr Duncan’s solicitors’ claim under this Item must therefore be disallowed.
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”. The Delegate disallowed Mr Duncan’s solicitors’ claim for $187.50 under this Item for “All work associated with instructing an agent to act on re: claim”, on the basis that:
“any documentary examination is covered under Item 4.05, already allowed at the Table maximum ... The ‘agency’ asserted work for a party to attend upon filing or copying at the Commission is not agency work encompassed within Item 10.01.”
In their submissions on the appeal, Mr Duncan’s solicitors submit the Delegate made an error of law because the agency work associated with the agent filing and copying documents at the Commission clearly is agency work under Item 10.01. The Council submits the Delegate was correct, and refers to the decision in Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD 33 (‘Dunn’).
I note Mr Duncan’s solicitors’ claim appears to be in respect of instructing the agent (St George) to file documents on five occasions and inspect and photocopy documents on one occasion. 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.
The inspection and photocopying of documents is covered under Item 4.05 (“Reviewing documentation produced under a direction of the Commission...”). I note that Mr Duncan’s solicitors have claimed and been allowed the maximum amount permitted under Item 4.05. In 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.
Thus, I am not persuaded that the Delegate made any error in disallowing the claim under Item 10.01. I therefore reject this ground of appeal.
Disbursement
Fee for Private Investigator’s Report
Mr Duncan’s solicitors claimed $2,113.10 in respect of St George’s fees for preparing a factual and liability summary report. The Council submitted the proceedings did not warrant the involvement of a factual investigator. The Delegate disallowed the claim. He said:
“Many of the items [listed in St George’s invoice] are simply not reasonably claimable in any context, and equally, a number simply appear not to be relevant to the immediate proceedings or their outcome. Further, in any event, I determine in assessment that this investigatory disbursement is not reasonably incurred or reasonable in amount.”
In their submissions on the appeal, Mr Duncan’s solicitors draw attention to the fact that the Respondent, while objecting to the claim for this disbursement, itself obtained a private investigator’s report. The Council relies on its submissions on the assessment and refers to Berger at paragraphs 128 to 144.
I have reviewed St George’s Report and its invoice dated 14 April 2003. The invoice includes fees for a client service agreement ($140), for “Perusal of correspondence from McCabe Partners Lawyers” ($300.00), for “Perusal of correspondence provided by claimant” ($120) and “Perusal of wage slips” ($45.00), for researching the factual and liability summary, dictating the summary and “Secretary typing summary” - a total of $412.50, and for a letter to a barrister ($20) and the copying of a brief for him ($30). Part of the invoice – probably in relation to obtaining a statement from Mr Duncan - also appears to have been obscured in the process of photocopying.
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 Mr Duncan, which one would expect to see prepared by his solicitor subsequent to taking instructions from him. 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 $465 claimed for perusal of correspondence and documents, the $421.50 for researching, dictating and typing the report, and $50 for copying the brief and sending it to the barrister. Thus, I am not satisfied that the Delegate made any error in disallowing the claim.
GST
Mr Duncan’s solicitors also claimed GST in respect of their professional costs claimed under Items in the Table. The Delegate stated: “There is no provision that expressly allows GST to be awarded in addition to the ‘maximum costs’ allowable in the Table”.
Whether the maximum costs specified in the Table are inclusive of GST is an issue I addressed in Chapman v Gosford City Council [2006] NSWWCCPD 4. I stated there, at paragraphs 14 to 18:
“ 14. 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.”
15. 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)...”
16. 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.”
17. 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).)
18. 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.”
I note that since this decision, with effect from 17 March 2006, clause 123(1) of the 2003 Regulation has been specifically amended to permit costs recoverable in compensation matters to be increased “by the amount of any GST payable in respect of the service to which the cost relates, and the cost as so increased is taken to be the cost fixed by this part”.
In the current matter, the services were performed and the Delegate’s assessment was made before the above amendment took effect, and the Delegate was therefore correct in disallowing a claim for GST to be added to the costs claimed in respect of Items in the Table.
Summary
The outcome of my review of the Delegate’s decision is as follows:
Professional Costs
Item 1.01: the Delegate’s determination under this Item is confirmed.
Item 2.05: the Delegate’s disallowance of the claim under this Item is confirmed.
Item 2.06: a further $125 should be allowed.
Item 4.07: the Delegate’s disallowance of the claim under this Item is confirmed.
Item 4.08: the Delegate’s determination under this Item is confirmed.
Item 4.12: a further $190 should be allowed.
Item 9.01: the Delegate’s disallowance of the claim under this Item is confirmed.
Item 10.01: the Delegate’s disallowance of the claim under this Item is confirmed.GST: no additional amount in respect of GST may be claimed.
Disbursement
Private investigator’s fee: the Delegate’s disallowance of the claim in respect of this fee is confirmed.
Thus, I have determined that a further $315 ($125 + $190) in professional costs should be allowed. The Delegate’s determination of $5,360.00 should therefore be increased to $5,675.00.
DECISION
The Registrar’s determination of Mr Duncan’s claim for costs in this matter, dated 20 December 2005, is amended in accordance with these reasons.
COSTS
Mr Duncan’s solicitors have been partly successful in this appeal. In my view, it is reasonable to order that the Council pay Mr Duncan’s costs in this appeal in the sum of $175 inclusive of GST, representing the equivalent of approximately 40 minutes of work. The appropriate order, therefore, is: “The Respondent, Moree Plains Council, is to pay the Appellant, Mr Duncan $175.00 inclusive of GST in respect of his costs in this appeal.”
Robin Handley
Acting Deputy President
9 January 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.
ASSOCIATE
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