Dunn v Port Macquarie RSL Club Ltd

[2004] NSWWCCPD 33

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Dunn v Port Macquarie RSL Club Ltd [2004] NSW WCC PD 33

APPELLANT:  Neville Dunn

RESPONDENT:  Port Macquarie RSL Club Limited

INSURER:GIO Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC 14044-03

DATE OF ARBITRATOR’S DECISION:          14 November 2003

DATE OF APPEAL DECISION:  22 June 2004

SUBJECT MATTER OF DECISION: Appeal against Registrar’s Assessment of Costs, Application of Clause 5 of Schedule 6 of the Workers Compensation Regulation 2003; Compensation Costs Table, Item 4.05, Agents Fees, Appeal on Matter of Law

PRESIDENTIAL MEMBER:  Dr Gabriel Fleming, Acting President

HEARING:On the papers.

REPRESENTATION:  Appellant:  Whitelaw McDonald Solicitors and Attorneys

Respondent:  Hunt and Hunt Lawyers

ORDERS MADE ON APPEAL:  The decision of the Registrar is confirmed.

CONTENTS

THE APPEAL  PARAGRAPHS  1-4
ISSUES IN DISPUTE  PARAGRAPHS  5-7
JURISDICTION  PARAGRAPHS  8-12
THE RELEVANT LAW  PARAGRAPHS  13-23
THE MULTIPLE INSURER ERROR  PARAGRAPHS  24-37
THE AGENT’S FEES ERROR  PARAGRAPHS  38-43
DECISION  PARAGRAPH    44

THE APPEAL

1. On 21 November 2003 Neville Dunn (‘the Appellant’) sought leave to bring an ‘Appeal from Registrar’s Determination on Costs’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 14 November 2003.

1. The Respondent to the Appeal is Port Macquarie RSL Club Limited (‘the Respondent’).  The relevant insurer, for the purposes of the appeal, is GIO Workers Compensation (NSW) Ltd.

1. The appeal was referred to me on 9 June 2004.

1. I am satisfied that I have sufficient information to determine the appeal ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances (section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’)).

ISSUES IN DISPUTE

1. The appeal concerns an award of costs made by the Registrar (through her delegate), in relation to proceedings before an Arbitrator.  The award was for an amount of $8260.00 in costs to be paid to the Appellant by the Respondent, plus the costs of the assessment.

1. The Appellant (the Applicant in the original proceedings) submits that the Registrar’s Delegate was wrong in his interpretation of Schedule 6 of the Workers Compensation Regulation 2003 in two respects, namely:

·     In exercising his discretion to award the Appellant only a 100% increase in costs, due to the existence of four insurers in the matter before the Arbitrator (‘the Multiple Insurer Error’, and

·     In refusing to allow the Appellant to claim an agency fee for a report by the ‘Kerry Nicholson Consultancy’ (‘the Agent’s Fees Error’).

1. The Respondent submits that the decision of the Registrar’s delegate should be confirmed.

JURISDICTION

1. Although the Appellant properly brought the appeal under Clause 142 of the Workers Compensation (General) Regulation 1995, (now Clause 119 of the Workers Compensation Regulation 2003 (‘the Regulation’)), the Respondent filed submissions in reply addressing section 352 of the 1998 Act. Submissions on this section, in particular on the threshold requirements applicable to an appeal against a decision of an Arbitrator, are irrelevant. Section 352 of the 1998 Act does not confer jurisdiction upon a Presidential Member to determine this matter. The reasons for this may be set out briefly, as follows;

·The determination was made by the Commission constituted by the Registrar, (through her delegate) (pursuant to Clause 114 of the Regulation), not by the Commission constituted by an Arbitrator.

·The fact that the Registrar delegated her power, under Clause 114, to an Arbitrator does not alter the constitution of the Commission for the purpose of a determination of costs pursuant to Clause 119. Section 352 of the 1998 Act therefore is not applicable.

·This reasoning is supported by the terms of Clause 118 of the Regulation, which provides that: “The Registrar’s determination of an application is binding on all parties to the application and no appeal or other review lies in respect of the determination, except as provided by this Division”.

·Section 352 of the 1998 Act does not permit an appeal in relation to costs, Sam Borg v Garnville Pty Limited [2003] NSW WCC PD 30.

1. I note that the Respondent’s confusion was not assisted by the fact that the Commission issued the ‘Determination of Costs’, dated 14 November 2003, under the certification of the Arbitrator, rather than the Registrar.  In addition the ‘Determination of Costs’ refers, properly, on its face, to the Workers Compensation Regulation 2003, whereas the reasons that follow appear to rely upon the Workers Compensation (General) Regulation 1995. The 1995 Regulation was replaced by the 2003 Regulation with effect from 1 September 2003. I refer to the 2003 Regulation in this decision and note that the relevant, substantive provisions are unchanged, albeit re-numbered.

1. Part 19 of the Regulation (made pursuant to section 347 of the 1998 Act) provides for the assessment of ‘costs’ in matters before the Commission. Subdivision 5 of Division 4, Clause 119 provides as follows:

   119Appeal against decision of Registrar as to matter of law

   (1)A party to an application who is dissatisfied with a decision of the Registrar as to a matter of law arising in the proceedings to determine the application may, in accordance with the Rules of the Commission, appeal to the Commission constituted by a Presidential member against the decision.

   (2)The appeal is to be in the form approved by the Commission and be accompanied by the fee approved by the Commission from time to time.

   (3)After deciding the question the subject of the appeal, the Commission constituted by a Presidential member may, unless it affirms the Registrar’s decision:

   (a)     make such determination in relation to the application as, in its opinion should have been made by the Registrar, or

   (b)     remit its decision on the question to the Registrar and order the Registrar to re-determine the application.

   (4)On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.

1. The Workers Compensation Commission Rules 2003 do not make provision for the making of an appeal pursuant to Clause 119 of the Regulation.

1. I am satisfied that I have jurisdiction to hear the appeal, pursuant to Clause 119 of the Regulation.

THE RELEVANT LAW

1. Costs in Commission proceedings are governed by the 1998 Act and the Regulation. Section 337 of the 1998 Act provides that:

   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) Regulations under this section can fix costs and amounts by reference to costs and amounts fixed by regulations under the Legal Profession Act 1987.

   (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)     This section does not entitle a legal practitioner to recover costs for a legal service or matter that a court or costs assessor determines were unreasonably incurred.

   (6)     The power under this section to make regulations fixing maximum costs for services or matters includes power to make regulations to provide that no amount is recoverable for a particular service or matter or class of services or matters, with the result that a legal practitioner or agent is not entitled to be paid or recover any amount for the service or matter concerned.

2. Clause 84 of the Regulation provides, where relevant, that:

84     Fixing of maximum costs recoverable by legal practitioners and agents

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

(a)legal services or agent services provided in or in relation to a claim for compensation, and

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

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

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

1. Schedule 6 of the Regulation sets out the maximum costs that may be recovered in a compensation matter brought under the Workers Compensation Acts (the Workers Compensation Act 1987 (‘the 1987 Act’) and the 1998 Act). For the purpose of such costs the Compensation Costs Table divides the dispute resolution process in the Commission into stages and then into discreet events or activities. This allows for costs to be claimed in relation to events as the matter progresses through the Commission’s processes.

1. Clause 1(2) of Schedule 6 of the Regulation provides, inter alia, that “[t]he maximum costs for an activity or event described in a Part of the table and carried out in or in relation to a claim made or to be made in respect of a particular injury are as” set out in clause (2)(a)–(i), which follow. Schedule 6 refers to ‘the Table’, being the Compensation Costs Table appearing at the end of the Schedule, which is set out in columns.

1. Clause 2 of Schedule 6 of the Regulation concerns ‘Multiple Claims or Disputes in Respect of an Injury to be Treated as a Single Claim or Dispute’, and provides, (subject to some specified exceptions in Clause 2(2)):

2     Multiple claims or disputes in respect of an injury to be treated as a single claim or dispute

(1)   In the event that more than one claim is made in respect of a particular injury, or more than one dispute arises in respect of a claim, the maximum total costs for a type of activity or event in respect of the injury, regardless of how many times the activity or event is carried out, is the maximum set out in Column 4 of the table in relation to that type of activity or event.

1. Clauses 3 and 4 of Schedule 6 provide for certain restrictions on costs including restrictions on when costs are payable and restrictions on travelling and accommodation costs.

1. Clause 5 of Schedule 6 (previously Clause 4 of Schedule 6 of the 1995 Regulation and in dispute in this matter) provides that:

5Costs where multiple insurers party to claim

If more than one insurer (or any combination of insurers) is a party to a claim or a dispute or other matter in relation to a claim, the maximum costs in respect of the matter are the total of the following:

(a)the costs for the matter calculated in accordance with the table,

(b)50% of that amount per party (other than the party who made the claim),

and payment of the costs is to be shared equally among the insurers who are parties to the matter.

Note. Clause 81 provides that in Part 19 (Costs) and Schedules 6 and 7, the term insurer includes an employer.

1. Clause 9 of Schedule 6 (previously Clause 8 of Schedule 6 of the 1995 Regulation and in dispute in this matter) provides that:

9Certain agents not entitled to costs

(1)An agent who is not an agent within the definition of agent in section 356 (6) of the 1998 Act is not entitled to be paid or recover any costs.

(2)Nothing in this clause prevents an agent who is a legal practitioner from being entitled to be paid or recover any costs

1. Section 356 of the 1998 Act provides that:

356Representation before Commission

(1)A person who is a party to proceedings before the Commission is entitled to be represented by a legal practitioner or by an agent.

(2)The Commission may refuse to permit a party to be represented by an agent if of the opinion that the agent does not have sufficient authority to make binding decisions on behalf of the party.

(3)In proceedings in respect of a claim, the Commission may refuse to permit an insurer to be represented by a legal practitioner if the claimant is not represented by a legal practitioner.

(4)A party to proceedings before the Commission is entitled to such representation or assistance (for example, the assistance of an interpreter) as may be necessary to enable the party to communicate adequately at any conference or hearing.

(5)The Commission must take into account any written submission prepared by a legal practitioner acting for a party to proceedings and submitted by or on behalf of the party (whether or not the party is represented by a legal practitioner at any conference or hearing in the proceedings).

(6)In this section, agent means:

(a)an officer of an industrial organisation of employers or employees registered under the Industrial Relations Act 1996, or

(b)an officer of an association of employers or employees registered under the Workplace Relations Act 1996 of the Commonwealth, or

(c) a person employed by a licensed insurer or former licensed insurer or by a self-insurer, or

(d)a person employed by a solicitor, solicitor corporation or incorporated legal practice.

1. The claim in relation to the Kerry Nicholson Consultancy, made pursuant to Item 4.05 of the Compensation Costs Table in Schedule 6 of the Regulation, is in dispute in this matter. This item is as follows.

Compensation Costs Table
Column 1	Column 2	Column 3	Column 4
Item No	Activity or event	Maximum	Maximum total
amount for	for type of
individual	activity/event
activity/event
4.05	Reviewing documentation produced under a direction of the Commission, exchanging information with the other parties and obtaining further instructions from client	$250 per hour	$500

1. The Court of Appeal decision in Orellana Fuentes v Standard Knitting Mill Pty Limited & Anor; Carey v Blasdom Pty Limited T/as Ascot Freightlines & Anor [2003] NSWCA 146 (‘Fuentes’) is the only matter where the Court has considered the statutory costs regime in the Commission (specifically the validity of Item 4.11 of Schedule 6 of the Regulation). Ipp JA, with whom Spigelman CJ and Handley JA agreed, observed that:

. . . The costs regime contained in Sch 6 is part of the scheme of procedural mechanisms and other incentives designed to promote the settlement of disputes before formal hearings take place. This explains why Sch 6 provides for substantially more recoverable costs for proceedings than precede formal hearings. (at [73])
and further:

. . . With regard to the Commission . . . Parliament has placed considerable emphasis on conciliation proceedings and informal hearings in an attempt to provide mechanisms and incentives for settlement of disputes before the disputes are formally disposed of in the traditional way by the adversarial process. Workers compensation is well suited to this policy. The costs structure contained in Sch 6 is part of this system and creates an additional incentive to parties, lawyers and agents to strive for consensual settlements prior to formal hearings... I am not persuaded that this policy offends the interests of justice. (at [108])

THE MULTIPLE INSURER ERROR

1. The Appellant may only appeal against a determination of costs on a ‘matter of law’ (Clause 119 of the Regulation).

1. The Registrar’s delegate sets out his reasons and findings on the claim made under Clause 5 of Schedule 6 of the Regulation as follows (at paragraph 13 of the reasons):

a.The Respondent contended both in its submissions and in correspondence that this clause refers to costs claimable by a solicitor acting for an Insurer.

b.The Applicant relied on the decision of Arbitrator Lanken [sic] in Pavan v Country Energy matter number WCC2431-2002 where he found that “the Clause is intended to apply in situations where there is more than one insurer as to allow some extra costs to the Applicant for the extra work required.

c.I had independently reached the same conclusion in a matter of Ohlsen and Eurobadalla Shire Council WCC 14041-2003 where I concluded “the provisions of Schedule 6, Clause 4 are to make provision for the increased legal costs caused by a number of insurers pursuing separate issues and interests”.

d.In my view the Respondent’s submissions ignore the words at the commencement of Clause 4 that costs would be “the total of the following”.  The balance of the clause sets out the mechanism of calculating the total by reference to the following subparagraphs. Clause 4 can only make sense if one adopts the interpretation that the two components of Clause A & B be added together to form the total of the costs which are available to the Applicant - it seems clear that Clause 4 can have no other meaning.

e.However I accept the Respondent’s submission that this clause does refer to “maximum costs”.  Although there were four Respondents involved this would appear to me to be one of the more straight forward cases involving multiple insurers as there is only one employer with the various insurers being on risk for discreet periods of time.

f.As there are four Respondents the Applicant is entitled to claim an additional 200% for costs although it has only made a claim for 150%.

g.There is no doubt additional costs have been involved and there is material attached to the Application which bears out the additional work the Applicant has had to perform because of multiple insurers.

h.However as pointed out in paragraph 8 the number of Respondents was as the result of different insurers being on risk for different periods albeit with the same Respondent.  It would appear the maximum amount allowed under this clause would be in circumstances where there are different respondents as well as different insurers, involving a more complex legal matrix.  Taking those matters into account an allowance of an additional 100% would seem to be appropriate in the circumstances.

1. The Appellant submits that the Registrar’s delegate did not have a discretion in relation to the award of costs under Clause 5 of Schedule 6, where there were multiple insurers. The Appellant also argues that the costs award in this matter should, in accordance with Clause 5 of Schedule 6, have been increased by 4 x 50%, to a total of $9,900.00.

1. The Respondent submits the Registrar’s delegate has a discretion in making an award subject to Clause 5 of Schedule 6 by the reference to “maximum costs” that may be awarded pursuant to Schedule 6.  The Respondent submits the Registrar’s delegate did not err and that “ the professional costs submitted by the Appellant as being reasonable in this matter are grossly disproportionate to the nature of the proceedings and the work performed by the Appellant’s solicitors.  The Respondent endorses paragraphs 13(e), (g) and (h) of the Arbitrator’s Statement of Reasons.”

1. The Registrar’s delegate in the matter of Pavin v Country Energy WCC 2431–02 correctly identified two difficulties with the interpretation of Clause 5 of Schedule 6. The clause does not clearly state which parties’ costs are effected by its application, and is expressed to “limit the increase in costs rather than define that extra costs entitlement”.  In my view the Registrar’s delegate in that matter properly resolved those two difficulties by finding that the clause applied to costs claimed by an Applicant worker, and that there was a discretion in relation to the amount of the increase in costs to be given under the Clause.  These issues are discussed further below.  

1. Clause 5 of Schedule 6 of the Regulation is intended to provide for additional costs to be claimed by an applicant worker where there is more than one insurer that must be a party to the claim. As the Registrar’s delegate noted in Pavin, this allows for compensation to an applicant worker for the additional costs that may be involved in pursuing a claim against more than one respondent. The term ‘insurer’ in the clause includes an employer. Clause 5 of Schedule 6 does not apply to an insurer respondent’s costs.

1. The Respondent’s argument that the Registrar has no discretion in relation to an award of costs under Clause 5 must also fail. As with other provisions in Schedule 6, Clause 5 refers to ‘maximum costs’. ‘Maximum costs’ are not always incurred, nor should they be awarded in every case. An award of costs is relative to the work performed and not based upon a maximum award regardless of whether the activity or event has actually been carried out, or carried out to the full extent of the time that attracts the ‘maximum amount’ that may be awarded. The Registrar’s discretion in relation to an application to determine costs payable as a result of an order made by the Commission is contained in Clause 110 of the Regulation. This directs the Registrar to consider:

   (a)whether or not it was reasonable to carry out the work to which the costs relate, and

   (b)what is a fair and reasonable amount of costs for the work concerned.

1. The facts of this matter well illustrate the appropriateness of the Registrar’s discretion in relation to an award of costs pursuant to Clause 5 of Schedule 6. The original application, registered by the Commission on 21 May 2002 identified only one insurer, namely GIO Workers Compensation (NSW) Limited, as the relevant insurer for the purposes of the dispute. On 29 May 2002 a Certificate of Service was filed, attesting to service on only the GIO. The Reply by GIO , registered by the Commission on 13 June 2002 noted that “we have no details of the relevant earlier insurers at this time”.  The parties agreed upon the appointment of Dr Pillemer, Approved Medical Specialist, to examine and report on the worker.  Dr Pillemer reported on 19 September 2002 and again on 11 November 2002 (as a result of further medical evidence being sent to him).  As a result of Dr Pillemer’s report the worker’s legal representative wrote to the Commission, on 19 December 2002, advising that it was now seeking to find out the details of earlier insurers, who were on risk for the period during which Mr Dunn’s injury was alleged to have occurred.  Dr Pillemer again reported on 10 February 2003.

1. The documents before me (contained in the Commission’s file), do not identify any insurer as a party in this matter, other than the GIO, until 6 February 2003, when an ‘Amended Application to Resolve a Dispute’ was received in the Commission.  This identified three additional insurers as Respondents: NEM General Insurance, Guardian Assurance, and Zurich Australian Workers Compensation.  Telephone conferences were held with all parties on 9 May 2003, and 6 June 2003, and consent orders were issued setting aside the dispute on 23 June 2003. 

1. In my view the history of this matter illustrates that it is simplistic to claim that because four insurers were joined as parties to the claim after February 2003, the Applicant Worker was put to additional work in relation to the whole of the costs claimed. The filing of the original application and evidence did not involve additional work as there was only one insurer joined at that time. To multiply the whole of the costs claimed by the Appellant pursuant to the Table, by four (pursuant to Clause 5 of Schedule 6), only because, ultimately, there were four insurers joined to the claim at the point that it was determined, is not a fair and reasonable method of assessing the costs in this matter.

1. To claim that the total of the costs claimed by the Appellant be multiplied by four also ignores the fact that, as the Registrar’s delegate notes in the reasons, the matter was not overly complicated by joining the further three insurers to the claim as each insurer was on risk for a different period, but with the same employer/Respondent. 

1. In my view the Registrar has an overriding discretion to award costs in accordance with what is fair and reasonable for the work performed. When considering the application of Clause 5 of Schedule 6 of the Regulation the ramifications for the costs incurred, in joining multiple insurers, must be taken into account.

1. In this matter the Registrar’s delegate exercised his discretion to allow an additional 100% pursuant to Clause 5 of Schedule 6. He gave adequate reasons for coming to this view. There is nothing to suggest that his discretion was exercised arbitrarily or capriciously, and there are no grounds upon which it should be overturned.

1. The Arbitrator did not err in awarding costs pursuant to Clause 5 of Schedule 6 of the Regulation.

THE AGENT’S FEES ERROR

1. The Registrar’s delegate sets out his reasons and findings on the claim made for ‘Kerry Nicholson Agency Fees/Disbursements totalling $297.00’ (at paragraph 14 of the reasons). He accepted that these fees were provided for under Item 4.05 of Schedule 6 of the Regulation but found that the maximum had already been allowed under that Item and that “the regulations as presently drafted to (sic) not entitle the Applicant to separately recover agency fees for this activity, particularly when photocopying costs are not provided for in the regulations”.

1. The Appellant Worker submits that the Registrar’s Delegate erred in his view and that “attendances by an agent before the Commission to inspect documents produced under direction do represent representation before the Commission”. 

1. The Respondent argues that the Registrar’s Delegate did not err and applied the Regulation strictly so as to deny the claim for the Kerry Nicholson Agency fee.

1. The Appellant claimed an amount of $500.00 pursuant to Item 4.05 for ‘Reviewing Documentation Produced Under Direction of the Commission’. This is the maximum cost that may be claimed for that Item under the Compensation Costs Table in Schedule 6. All individual ‘activities or events’, described in Column 2 of the Table, that come under that event type, described in Column 3 of the Table, must not exceed the maximum total for the ‘type’, as prescribed in Column 4 of the Table. Clause 1(2) provides that, “the maximum costs for an activity or event described in a Part of the Table and carried out in or in relation to a claim made or to be made in respect of a particular injury ”.  The claims of $253.00 for “Fees paid by Whitelaw McDonald re agents fee to the Kerry Nicholson Consultancy” plus $44 for “Fee due to the Kerry Nicholson Consultancy re copying of records of Port Macquarie Base Hospital & Royal Newcastle Hospital on 10.06.2003”, are also encompassed by Item 4.05. To allow the Appellant in this matter to claim Item 4.05 twice, in relation to the work of a legal representative and of an agent, would amount to exceeding the maximum allowable, and the items allowable, under the Regulation. This would be an error.

1. Schedule 6 of the Regulation is the comprehensive means for the assessment of costs in the Commission and does not permit the claiming of costs for matters not prescribed in the Schedule, including ‘copying of records’.

1. For these reasons I find that the Registrar’s Delegate did not err in refusing to allow the Appellant’s claim for the costs of the Kerry Nicholson Agency Fees and Disbursements. 

DECISION

1. The decision of the Registrar is confirmed.

Dr Gabriel Fleming

Acting President  

22 June 2004

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DR GABRIEL FLEMING, ACTING PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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