Eyles v Patrick Stevedores No 1 Pty Ltd
[2007] NSWWCCPD 51
•14 February 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Eyles v Patrick Stevedores No 1 Pty Ltd [2007] NSWWCCPD 51
APPELLANT: Edward Eyles
RESPONDENT: Patrick Stevedores No 1 Pty Ltd
INSURER:Allianz Australia Workers’ Compensation (NSW) Ltd
FILE NUMBER: WCC7081-06
DATE OF REGISTRAR’S DECISION: 17 August 2006
DATE OF APPEAL DECISION: 14 February 2007
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claims under Items 2.07 and 2.08 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: Turner Freeman Lawyers
Respondent: Allianz Australia Workers’ Compensation (NSW) Ltd
ORDERS MADE ON APPEAL: The decision of the Registrar dated 17 August 2006 is confirmed.
There is no order as to the costs of this appeal.
BACKGROUND
On 15 September 2006, Edward Eyles filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator. The Respondent to the appeal is Patrick Stevedores No 1 Pty Ltd (‘Patricks’). Patricks’ workers compensation insurer is Allianz Australia Workers’ Compensation (NSW) Ltd (‘Allianz’). Neither Patricks nor Allianz have lodged a Notice of Opposition or any submissions in reply.
Mr Eyles was born on 12 January 1936 and is aged 71. He claimed workers compensation for weekly payments, medical expenses, and permanent impairment and pain and suffering in respect of severe facial and bodily disfigurement associated with skin cancers caused by exposure to sunlight. By letter dated 24 November 2005, the Commission notified the parties that following settlement of the issues in dispute, the Commission had registered a section 66A lump sum agreement between the parties pursuant to which Patricks was to pay compensation to Mr Eyles for 14% whole person impairment in the amount of $18,500, together with $8,500 for pain and suffering, and costs as agreed or assessed.
On 8 May 2006, the parties having failed to agree on the costs payable, Mr Eyles’ solicitors lodged an ‘Application for Assessment of Costs’ with the Commission. Allianz filed its submissions in reply on 1 June 2006. The Registrar delegated the assessment of costs to an Arbitrator (‘the Delegate’) who made a determination dated 17 August 2006. The Certificate of Determination stated:
“1. Pursuant to Agreement and Order dated 24 November 2005, the Respondent employer is liable to pay the Applicant’s costs of the Application as agreed or assessed.
2. The Applicant’s costs of the proceedings assessed in the sum of $4,467.00 (inclusive of GST) are determined as fair and reasonable.
3. The Respondent is to pay the amount of $4,467.00 to the Applicant if those costs have not already been paid
4. That there be no order as to the costs of the assessment.”
The relevant parts of the Delegate’s Statement of Reasons for his decision are referred to below under the heading ‘Submissions, Discussion and Findings’.
ISSUES IN DISPUTE
Mr Eyles’ solicitors submit the Delegate erred in his determination of their claims for professional costs under Items 2.07 and 2.08 in respect of agreeing terms of settlement with the insurer. 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, 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.
No application to adduce fresh evidence was made.
SUBMISSIONS, DISCUSSION AND FINDINGS
The relevant legislation concerning appeals to the Commission against an assessment of costs, set out in the 1998 Act and the Workers Compensation Regulation 2003 (‘the 2003 Regulation’) applicable at the time of the Delegate’s assessment, was discussed by Deputy President Fleming in Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 (‘Berger’). I note, in particular, that clause 119(1) of the 2003 Regulation limits the grounds on which an appeal may be made against the decision of the Registrar on an assessment of costs “to a matter of law” arising in the proceedings to determine the costs application. Where the exercise of the Registrar’s or her delegate’s discretion in determining what is fair and reasonable is challenged, only where that discretion has miscarried because it has been exercised unfairly or unlawfully would this constitute an error of law: Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 (‘Nebauer’), at paragraph 19; Berger, at paragraph 136.
Clause 84 of the 2003 Regulation fixes the maximum costs recoverable by legal practitioners and agents at those set out in Schedule 6, except where otherwise provided in Part 19. Schedule 6 sets out the maximum costs recoverable in workers compensation matters by reference to the Compensation Costs Table (‘the Table’) at the end of the Schedule. The Table identifies particular activities or events with an item number. It is these item numbers that are referred to below.
The sole issue in dispute is whether Mr Eyles’ solicitors’ claims under both Items 2.07 and 2.08 should be allowed. In their Bill of Costs dated 29 December 2005, they claimed the maximum amount permitted under Item 2.07 of $300 in respect of settlement of Mr Eyles’ claim for medical, hospital or related expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’), and the maximum amount permitted under Item 2.08 of $750 in respect of the settlement of Mr Eyles’ claim for compensation under sections 66 and 67 of the 1987 Act. Allianz objected to claims being made under both Items 2.07 and 2.08, contending (in a letter to Turner Freeman Lawyers dated 22 March 2006) that:
“the agreement to include in the settlement worker reimbursement of medical expenses under s 60 is incidental to the basic thrust of the claim. The claim was never primarily about s 60 medical expenses but rather about the worker’s entitlement to lump sum compensation for permanent impairment and pain and suffering under s 66/67 of the Act.
... It remains our contention that you are not entitled to payments under both 2.07 and 2.08, at least in this instance, and we will only approve one or the other.”
In submissions to the Registrar on the costs assessment, dated 1 June 2006, Allianz submitted:
“We believe that the intention underlying the costs regulations is to provide the $300.00 incentive in claims where a claim is being made solely or mainly in respect to medical treatment or some other compensation service. It is our contention that to provide the applicant solicitor with both incentive payments ($750.00 and $300.00) is to overcompensate for the work performed and to unreasonably increase the legal costs of the Scheme. We consider that the $750.00 payment under 2.08 is more than an adequate reward for agreeing/achieving settlement prior to the disputation involving the Commission.”
In submissions in reply dated 8 June 2006, Mr Eyles’ solicitors maintained that there were two separate claims, one under sections 66 and 67 and the other under section 60:
“3. The claim pursuant to section 60 was not ... simply incidental to the claim pursuant to sections 66 and 67. It was imperative that the claim pursuant to section 60 was independently resolved, and specific time was spent calculating the extent of the claim in order for it to be resolved. If it had not been resolved, the applicant would have needed to pay his medical expenses in relation to his skin cancer condition (including his relevant Medicare Australia notice of charge) from his settlement monies in his claim pursuant to sections 66 and 67.
4. It is important to note that the claim pursuant to section 60 was raised in the applicant’s initial letter claiming compensation in this matter. Then, when that claim was not addressed as part of the respondent’s first settlement offer in the matter, the applicant specifically included the claim in his subsequent counter-offer. The respondent finally settled the matter, specifically on the basis of the claims pursuant to both section 60 and sections 66 and 67 being resolved.”
Mr Eyles’ solicitors enclosed copies of the relevant correspondence. Their letter to Patrick’s dated 7 April 2005 specifically refers to the claim being in respect of medical expenses, weekly compensation and compensation under sections 66 and 67. A letter from Allianz to Mr Eyles’ solicitors dated 15 August 2005 containing an offer of settlement makes no reference either to the claim for medical expenses or to the claim for weekly compensation. Mr Eyles’ solicitors letter to Allianz dated 30 August 2005, in response to the offer of settlement and containing a counter-offer, specifically includes in that counter-offer a section 66 claim for whole person impairment, a section 67 claim for pain and suffering, and a section 60 claim for “up to $2,000.00 on production of appropriate documentation”. Allianz responded to this by fax dated 28 September 2005 with a handwritten agreement to the proposed terms in respect of sections 66 and 60, making a counter-offer in respect of the section 67 claim, and including a fourth term: “Allianz to have no liability for weekly payments”.
The Delegate disallowed Mr Eyles’ solicitors’ claim under Item 2.07. He noted that only one agreement was reached between the parties:
“though it did incorporate both Section 66 and Section 60 elements. It is not the intention of the Schedule or the tables that costs be recovered twice for the same work.
Further it is not fair and reasonable for the Applicant to recover $300.00 plus GST in relation to work already compensated under Item 2.08.”
In their submissions on the appeal, Mr Eyles’ solicitors submit the Delegate erred (1) in failing to determine that the Applicant was entitled to costs under both Items 2.07 and 2.08, (2) in failing to determine that two separate claims were resolved in this matter (section 60, and sections 66 and 67), (3) in concluding that the same work was performed in resolving both claims, (4) in determining that the Applicant had already been compensated under Item 2.08 for resolving the claim pursuant to section 60, and (5) in concluding that to allow the claims under both Items 2.07 and 2.08 would involve compensating the Applicant twice for the same legal work. Allianz has made no submissions in response.
The activity/event in respect of which legal costs can be recovered under Item 2.07 is described in column 2 of the Table as “Agreeing terms of settlement with the insurer following a review of the claim by the insurer for a dispute (not being a claim for compensation under section 66 or 67 of the 1987 Act)”. The activity/event for recovery of costs under Item 2.08 is described in column 2 as “Agreeing terms of settlement with the insurer in the case of a claim for compensation under section 66 or 67 of the 1987 Act following a review of the claim by the insurer”.
Clause 105 of the 2003 Regulation states that when considering an application relating to a Bill of Costs, the Registrar must consider:
“(a) whether or not it was reasonable to carry out the work to which the costs relate, and
(b) whether or not the work was carried out in a reasonable manner, and
(c) the fairness and reasonableness of the amount of costs in relation to that work.”
In assessing what is fair and reasonable, clause 106 requires the Registrar to have regard to a number of matters, including the “skill, labour or responsibility” displayed by the legal practitioner or agent, and the “complexity, novelty or difficulty of the matter”.
Section 33 of the Interpretation Act 1987 (NSW) states:
“In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.”
The 2003 Regulation was made by the Governor pursuant to the power contained in the 1987 and 1998 Acts. Section 3 of the Subordinate Legislation Act 1989 (NSW) defines a ‘statutory rule’ as including a regulation made by the Governor. Thus, section 33 of the Interpretation Act 1987 is applicable to the 2003 Regulation and the provisions of the Table in Schedule 6 must be interpreted so as to give preference to a construction that would promote the purpose or object of the 2003 Regulation and the 1987 and 1998 Acts. Section 3 of the 1998 Act sets out the objects of the workers compensation system. These include establishing a system that is (paragraph (d) “fair, affordable and financially viable”.
I accept that Mr Eyles’ solicitors would have spent time in calculating the claim for medical expenses and pursuing that component of the overall claim. Nevertheless, in Mr Eyles’ case, the most significant component of the claim in monetary terms was the claim under sections 66 and 67, and it is likely that significantly more of his solicitors’ time would have been spent in pursuing this component because of the need to establish permanent impairment and pain and suffering in accordance with the provisions of the legislation. However, I also note that column 2 of the Table for both Items 2.07 and 2.08 describes the activity/event as “Agreeing terms of settlement with insurer ...”. The emphasis is on the process of reaching agreement rather than the process of formulating and making a claim in respect of which a claim for costs can be made under other Items in the Table. For example, Mr Eyles’ solicitors made claims under Item 1.02 “Lodging claim with insurer ...”, and Item 2.06 “Requesting a review of the claim from the insurer, prior to the referral of the matter to the Commission”. I accept that when Mr Eyles’ solicitors made a counter-offer in their letter to Allianz dated 30 August 2005, one of the amendments to Allianz’s original offer dated 15 August 2005 was the inclusion of a term requiring the payment of medical expenses. But the legal costs associated with the inclusion of this one line term would have been relatively insignificant.
In my view, the intention of the 2003 Regulation is not to encourage the making of separate claims for compensation in respect weekly compensation, medical expenses or compensation for permanent impairment and pain and suffering. Rather, the 2003 Regulation encourages, where appropriate, the making of a single claim for workers compensation, but one specifying particular heads of compensation (weekly compensation, medical expenses or compensation for permanent impairment and pain and suffering) in respect of which the claim is made. Commonly, a claim for workers compensation will include compensation under several of these heads and it would make no sense if a party were encouraged to pursue separate claims to enable the recovery of additional costs under Items 2.07 and 2.08.
My view is that Item 2.08 should be interpreted as referring to settling a claim for workers compensation that includes a claim for compensation under sections 66 and 67 of the 1987 Act. Consequently, where a claim for workers compensation does not include a claim under sections 66 and 67, then Item 2.07 applies. It would also not have been the intention of the legislation to allow costs to be recovered twice in respect of work performed in achieving the same settlement. An interpretation that allows recovery of legal costs under either Item 2.07 or Item 2.08 accords more closely with the objects of a system that is fair, affordable and financially viable.
Even if I am wrong in my interpretation of these Items, my view is that it would not be fair and reasonable to allow recovery of costs under both Items 2.07 and 2.08 because this would involve an element of double dipping.
In conclusion, my view is that the Delegate’s determination was correct and should therefore be confirmed.
DECISION
The decision of the Registrar dated 17 August 2006 is confirmed.
COSTS
There is no order as to the costs of this appeal.
Robin Handley
Acting Deputy President
14 February 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
0
2
0