Fenton v PD & GM Gardner Trading as v6 Conversions
[2006] NSWWCCPD 325
•28 November 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Fenton v PD & GM Gardner trading as V6 Conversions [2006] NSWWCCPD 325
APPELLANT: Craig Anthony Fenton
RESPONDENT: Patrick Douglas Gardner & Gina Marie Gardner trading as V6 Conversions
INSURER:Vero Workers Compensation (NSW) Limited
FILE NUMBER: WCC9470-05
DATE OF REGISTRAR’S DECISION: 2 September 2005
DATE OF APPEAL DECISION: 28 November 2006
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s assessment of costs; fees for an investigation report; attendance fees of agents; Items 4.08; 4.09; 4.10, 4.11 and 4.12 of Schedule 6 of the Workers Compensation Regulation 2003.
PRESIDENTIAL MEMBER: Acting Deputy President Tydd
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Lee & Lyons Lawyers
ORDERS MADE ON APPEAL: 1. Paragraphs two and four of the decision of the delegate dated 2 September 2005 are revoked and the following orders are made in their place:
“(i) The Applicant’s costs of the substantive proceedings are assessed in the sum of $9,634.03.
(ii) The Respondent is to pay to the Applicant a total amount of $9,634.03 if those costs have not already been paid.”
2. Paragraph one of the delegate’s decision referring to the order for costs contained in the ‘Certificate of Determination’ and paragraph three of the delegate’s decision making no order for the costs of the assessment were not raised on appeal and are confirmed.
3. No order as to the costs of the appeal.
BACKGROUND
Prior proceedings
On 4 May 2004 Craig Anthony Fenton (‘Mr Fenton’) lodged an ‘Application to Resolve a Dispute’ in the Workers Compensation Commission (‘the Commission’), (WCC 7194-04). Mr Fenton claimed that he suffered an injury to his back on 14 October 2002 in the course of his employment as a welder with Patrick Douglas Gardner & Gina Marie Gardner trading as V6 Conversions (‘V6 Conversions’), the Respondent employer. Mr Fenton sought weekly benefits compensation for the period 5 February 2003 to date and continuing; lump sum compensation pursuant to section 66 and 67 of the Workers CompensationAct 1987 (‘the 1987 Act’), and medical and related expenses in accordance with section 60 of the 1987 Act.
V6 Conversions lodged a Reply to the application on 24 May 2004 in which it disputed all aspects of the claim. V6 Conversions’ insurer is Vero Workers Compensation (NSW) Limited (‘the Insurer’).
On 26 July 2004, a teleconference was conducted before a Commission Arbitrator (‘the Arbitrator’). At the teleconference the Arbitrator made procedural directions including that the dispute be set down for conciliation/arbitration on 26 August 2004.
The dispute was resolved by consent at hearing on 26 August 2004 and the Arbitrator issued a ‘Certificate of Determination – Consent Orders’ on 30 August 2004 ordering V6 Conversions to pay Mr Fenton weekly compensation pursuant to section 40 of the 1987 Act from 5 February 2003 to 20 August 2003; medical and related expenses for treatment incurred up until 6 March 2003 and to pay Mr Fenton’s costs as agreed or assessed. The orders also noted an award for V6 Conversions in respect of weekly compensation from 21 August 2003 and for all claims as a result of an alleged injury on 14 October 2003 [sic 2002]. The orders required the parties to file a section 66A agreement within 14 days and certified that the matter was “complex for the purposes of the costs Regulation.”
On 20 June 2005, Mr Fenton’s solicitor lodged an ‘Application for Assessment of Costs’. V6 Conversions’ solicitor lodged submissions in reply on 6 July 2005.
The Registrar’s decision in relation to this application, by her delegate, a Commission Arbitrator, (‘the delegate’) was made on 2 September 2005. The delegate’s decision was accompanied by a ‘Statement of Reasons’. The decision is set out as follows:
“1.Pursuant to a Certificate of Determination dated 30 August 2004, the Respondent is liable to pay the Applicant’s costs as agreed or assessed.
2.The Applicant’s costs of the substantive proceedings are assessed in the sum of $10,816.21.
3.No order as to the costs of the assessment.
4.The Respondent is, therefore, to pay the Applicant a total amount of $10,816.21 if those costs have not already been paid.”
Lodgement of the appeal
On 4 October 2005, Mr Fenton’s solicitor lodged an ‘Appeal from the Registrar’s Determination on Costs’.
On 25 October 2005 V6 Conversions’ solicitor lodged submissions in reply to the Appeal.
ON THE PAPERS
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.”
Mr Fenton’s solicitor has not made submissions in respect of the requirement for a formal hearing. V6 Conversions’ solicitor submits that the matter is capable of being determined on the papers. Neither party has sought to adduce fresh evidence. Having regard to the submissions, Practice Directions Numbers 1 and 6 and the documents that are before me 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.
SUBMISSIONS
Mr Fenton’s solicitor’s submissions
Mr Fenton’s solicitor submits that the delegate erred in failing to take into account all relevant material (Minister for Aboriginal Affairs v Peko Wallsend Limited (1996) 162 CLR 24) and failed to adopt the correct approach to interpreting the Compensation Costs Table (‘the Table’) set out in Schedule 6 of the Workers Compensation Regulation 2003 (‘the WC Regulation’). The submissions in relation to the items claimed pursuant to the Table can be summarised as follows:
·Item 4.01 [sic Item 4.10] of the Table should be construed to allow the payment of travel time for a solicitor in addition to the travelling expenses under Items 10.2 and 10.3. Therefore the costs of travel time to attend and participate should be allowed under Items 4.08 and 4.10. A failure to allow the travel time for country solicitors would be in “breach of the Anti-Discrimination Act NSW 1977”;
·the delegate’s finding that the maximum amount allowable under Item 4.08 is $500.00 demonstrates a misunderstanding of the decision of Orellana Fuentes v Standard Knitting Mills Pty Ltd & Anor [2003] NSWCA146 (‘Fuentes’) as in applying that authority Schedule 6 of the WC Regulation should be constructed by reference to its own terms and the item claimed. Item 4.08 of the Table refers to “a” conference “a” client and “that type of activity” and therefore a solicitor is entitled to claim for preparation of a conference and also preparation of a conciliation/arbitration to a maximum of $500.00 for each of these activities, and
·the delegate’s finding that the decision in Fuentes restricts Item 4.12 of the Table to an allowance for two reports only is incorrect as an allowance should be made for reporting to the client in respect of the conciliation as well as the arbitration and the delegate failed to provide any reasons for his finding in this regard.
Mr Fenton’s solicitor disputes the delegate’s determination in relation to the costs of two disbursements: private investigator fees, and the Factual and Liability Summary Report (‘the Report’) provided by St George Registration & Investigation Service Pty Limited (‘SGRIS’). Mr Fenton’s solicitor submits that the worked performed by SGRIS is not professional legal work and as therefore if the fees are fair and reasonable, as they were in this case they are allowable (Michael John Hemphill v Clyde Agriculture Limited CA 2005-90713). Further, the fees were incurred in filing, inspecting, photocopying and claiming privilege over documents located in Sydney and the delegate should take into account the fact that the legal services were provided in Young.
Mr Fenton’s solicitor submits that fees for investigators’ reports are not regulated by Part 19 of the WC Regulation (Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 (‘Nebauer’)) and ultimately it is for the Registrar to determine if the costs incurred are fair and reasonable in accordance with clauses 105 and 106 of the WC Regulation. In the present case the delegate found that the costs were “fair and reasonable” and therefore the full cost claimed should be allowed. Further, the Report was required as the Table envisages the solicitor providing advice to the client under Item 2.01 and preparing a letter requesting a review under Item 2.06.However all “other information has to be obtained from a private investigator”. Mr Fenton’s solicitor submits in the alternative the matter was complex, novel and “extremely difficult”, the “quality of the work was extremely high and that the incident occurred in country NSW and therefore the costs are fair and reasonable.”
V6 Conversions’ solicitor’s submissions
In summary V6 Conversions’ solicitor submits that the Arbitrator’s determination is in accordance with established decisions previously handed down and subsequently relied upon.
Issues in dispute
The issues raised on appeal are as follows:
·Did the delegate err in determining the costs of disbursements?
·Did the delegate err in determining Items 4.08, 4.09, 4.10, 4.11 and 4.12 of the Table and fail to provide adequate reasons for his decision?
DISCUSSION
The relevant legislation concerning appeals to the Commission against an assessment of costs contained in the 1998 Act and the WC Regulation has been considered in a number of recent decisions (Berger v Moree Plains Shire Council[2005] NSWWCCPD 152 (‘Berger’); McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’); Asimus v J.J. Walker, A.D. Walker & Temple Pty Ltd t/as Templemore Partners [2006] NSWWCCPD 113 (‘Asimus’); Flegerbein v Tom B Blackburn Pty Ltd [2006] NSWWCCPD 30 (‘Flegerbein’); Orr v Direct Couriers (Australia) Pty Ltd [2004] NSWWCCPD 28 (‘Orr’), and Canham v Kenna Investments Pty Limited[2006] NSWWCCPD 202 (‘Canham’) and need not be canvassed again in this decision. In Woodbury v Miles [2006] NSWWCCPD 5 (‘Woodbury’) the Commission considered the date at which the law is to be applied in determining an appeal against the Registrar’s assessment of costs and held that “the applicable law is that in effect at the time the Commission issued the Certificate of Determination, including the costs order [14]”. I adopt the reasoning applied in Woodbury.
The matters raised on appeal require reference to clauses 82, 84, 99, 110, 119(1) of the WC Regulation and as the cost of an investigator’s report are not regulated by Part 19 of the WC Regulations it is necessary to consider clause 46 of the Legal Profession Regulation2002 (‘LP Regulation’) which was in force at the time of the issue of the ‘Certificate of Determination’, being 30 August 2004 (see Berger and Woodbury).
Clause 84 of the WC Regulation fixes the maximum costs recoverable by legal practitioners and agents to those set out in the Table contained at Schedule 6 except where otherwise provided in Part 19.
Clause 99 of the WC Regulation establishes the entitlement of a person to apply for an assessment of party/party costs. Pursuant to clause 110 of the WC Regulation the Registrar has discretion to determine whether or not it was reasonable to carry out the work to which the costs relate, and what is a fair and reasonable amount of costs for the work concerned and clause 111 sets out additional matters the Registrar may consider in assessing the costs claimed.
Clause 119(1) of the WC Regulation is of particular relevance to this matter as it specifically 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.
Clause 82(b) of the WC Regulation specifically excludes from the costs regulated by Part 19 “fees for investigators’ reports or for other material produced or obtained by investigators (such as witness statements or other evidence)”. Accordingly, when claimed as a disbursement as in the present case the investigators’ fee must be assessed pursuant to Schedule 2, Pt 1, Item 10 of the LP Regulation which provides:
“SCHEDULE 2 – Costs for legal services in workers compensation matters
(Clause 46)
Part 1 - Schedule of practitioners’ costs
10 Disbursements
Any disbursement necessarily incurred is to be allowed except in so far as any such disbursement is of an unreasonable amount or has been unreasonably incurred and any doubts which the taxing officer/costs assessor may have as to whether any disbursement was reasonably incurred or was reasonable in amount are to be resolved in favour of the receiving party.” (Emphasis added)
It is not reasonable to claim a cost as a disbursement that has already been the subject of a claim under Schedule 6 of the WC Regulation (Berger).
Did the delegate err in determining the costs of disbursements?
Private Investigator fees
Mr Fenton’s solicitor sought $396.00 for agency fees associated with lodgement, filing and photocopying of documents. V6 Conversions’ solicitor objected, but conceded the claim in the amount of $187.50 under Item 10.01 of the Table. The delegate noted V6 Conversions’ solicitor’s agreement to pay $187.50 under Item 10.1 and allowed $187.50 pursuant to this item. However he rejected the claim as a disbursement noting that the filing of documents is not recoverable as it is covered under Item 4.01 of the Table and the delegate relied on Dunn v Port Macquarie RSL Club Limited [2004] NSWWCCPD 33 (‘Dunn’) in rejecting the claim for inspection and photocopying of documents.
Deputy President Fleming held in Dunn, at paragraph 41 that to allow the recovery of fees paid to an agent for inspection and photocopying of documents produced under direction fell within the type of activity envisaged under Item 4.05 of the Table and to allow the claim would lead to recovery of an amount exceeding the maximum allowable under Schedule 6. I see no error in the delegate’s application of this authority in circumstances where the claim under Item 4.05 was allowed in the maximum. Additionally Item 4.01 for lodging and serving documents was allowed in the maximum and I apply the reasoning set out in Dunn and Flegerbein in rejecting this ground of appeal.
The Report
Mr Fenton’s solicitor sought $3,660.63 for the Report provided by SGRIS. V6 Conversions’ solicitor conceded the claim in the reduced amount of $1,000.00.
The delegate’s reasons demonstrate that he determined it necessary to examine the work performed by SGRIS to ascertain if that work fell outside Clause 82(b) of the WC Regulations. The delegate then considered if it was fair and reasonable to undertake the work which fell within Clause 82(b) before considering whether the time taken and the amount charged for that work was fair and reasonable.
The delegate allowed the claim for the costs of the Report in the reduced amount of $1,445.13 (including GST) for the activities he considered fell within clause 82(b) of the WC Regulation. These activities were:
·perusal of correspondence;
·letter to client;
·telephone conference with client;
·obtaining Business Names search;
·factual and liability summary;
·letter to MPL;
·investigation of earnings;
·further investigation of earnings;
·investigation and statement – J Haines, and
·investigation and statement – I Bartel
The application of a test of ‘fair and reasonable’ by the delegate in determining the claim for the costs of the Report was more consistent with the terms of clause 110 of the WC Regulation than with an application of Schedule 2 of the LP Regulation (see discussion in Asimus). In applying clause 110 of the WC Regulation to the claim for the cost of the Report the delegate, in my view committed an error of law.
It is necessary to consider the contents of the Report, the nature of the claim and the issues in dispute in determining whether the cost of the Report was ‘necessarily incurred’ (Asimus and Canham). Mr Fenton’s claim was for lump sum and weekly compensation together with medical and related expenses from 5 February 2003 to date and continuing. The claim in its entirety was disputed by V6 Conversions.
The index to the Report is at odds with the material annexed to the Report, dated 23 July 2003 and filed with the Application. The Report contains a seven page factual and liability summary which sets out the following information:
·names, addresses and contact details for Mr Fenton, V6 Conversions, the Insurer, and Mr Fenton’s medical practitioners;
·details of Mr Fenton’s age; dependants; employment history and duties; medical history; condition; treatment; current symptoms, and activities;
·observations of Mr Fenton and the authenticity of the claim, and
·commentary and opinion regarding common law and workers compensation entitlements.
The following documents were annexed to the Report: a statement taken from Mr Fenton his schedule of earnings and taxation return for the year ending 2003. Mr Fenton’s solicitor also filed a statement taken by SGRIS from Mr Ian Bartel, witness and a copy of a statement taken by Jo Hawke, a representative of Colgan, from Hayden (aka James) Haines, witness.
Information relating to the contact details of V6 Conversions, the Insurer; Mr Fenton’s age; his dependents, and medical practitioners cannot be considered to be ‘necessarily incurred’ when this material should be in the possession of Mr Fenton’s solicitor who I note was awarded the maximum under Item 2.01 of the Table and his claim under Item 2.04 for review of medical reports was allowed. Further information relating to Mr Fenton’s dependents, activities, employment history, and duties is contained in his statement. I find that the Report, in this respect, duplicates material filed in the proceedings and was not necessary to the claim (Berger; Asmimus and Flegerbein). Additionally I do not view the observations of the investigator or commentary in respect of common law entitlements necessary to the claim. Therefore the cost of the Report in this respect is not allowed.
In respect of the statement’s obtained by SGRIS from Mr Fenton I note that a statement from the worker is usually attached to the application at the time of filing and the cost of obtaining a statement is usually claimed under Item 2.01 or 2.04A of Schedule 6 of the WC Regulation (McManus). Mr Fenton’s solicitor did not claim the taking of a statement under Item 2.01 or Item 2.04A of the Table.
An applicant has been held to be a witness and in the present circumstances I conclude that Mr Fenton’s claim could not be brought without his statement (see discussion in Asimus at 24-25). The interview was conducted over the phone by a non professional over fifty minutes, it was then dictated by the investigator and typed. In my view it is reasonable to allow one hour and fifteen minutes for the costs of the statement and in applying the allowance for similar work under Item 2.04A I allow the claim in the amount of $137.50 (including GST).
The other statements filed in proceedings are that of Mr Bartel and Mr Haines. I have considered the statements and in my view they do not further the claim and accordingly these statements are not been determined to be necessary in pursuit of the claim. Further I noted that a copy of Mr Haines’ statement was obtained by facsimile by SGRIS from Mr Haines. I disallow the costs of the Report in respect of the witness statements as not necessarily incurred.
The remaining matter for consideration arising from the Report is the schedule of earnings. The schedule of earnings commences from 1 July 2000 and continues to 1 July 2003 to date. Both Mr Fenton’s statement and the schedule note that Mr Fenton had not earned any income from paid employment from 16 January 2003. Accordingly this information is a duplication of material filed in proceedings. In respect of his prior earnings I have considered Mr Fenton’s prior concurrent employment and in this respect I am satisfied that the costs incurred in obtaining information regarding earnings from 1 July 2000 to 16 January 2003 may on balance be relevant and necessarily incurred. Considering the claim and the memorandum of costs and disbursements totalling $382.80 for all costs associated with the schedule of earnings I allow the claim in the reduced amount of $194.20 (including GST) referable to cost of obtaining the information and producing the schedule for the period to January 2003.
Did the delegate err in determining Items 4.08, 4.09, 4.10, 4.11 and 4.12 of the Table?
Mr Fenton’s solicitor claimed a total of $1,000.00 for the costs of preparing for a conference and a conciliation/arbitration under Item 4.08 of the Table. V6 Conversion’s solicitor conceded the maximum provided under the Table of $500.00. The delegate allowed the claim in the maximum. The maximum permissible under the Table has been considered by the Commission in a number of decisions including Woodbury and Orr. In my view the delegate’s decision demonstrates the proper application of the Table. Therefore I reject this ground of appeal.
Mr Fenton’s solicitor claimed $250.00 for the costs of attending and participating in the teleconference conducted on 26 July 2004 and a further $250.00 for attending and participating in the conciliation/arbitration hearing under Item 4.09 of the Table. The delegate found that the matter was determined to be complex by the Arbitrator and disallowed the claim as Item 4.10 applied to complex matters.
The Arbitrator’s orders certify that the matter was complex. However the Arbitrator did not certify that the matter proceeded directly to arbitration and the consent orders issued by the Arbitrator note that a conciliation conference was conducted and the parties, assisted by the Arbitrator resolved their dispute. Item 4.10 of the Table requires two contingencies to be met (Fuentes at paragraph 63); that the Arbitrator determines the matter to be complex and the matter proceeds direct to arbitration. I have no evidence before me that the two contingencies required under Item 4.10 were met. Accordingly, in my view Item 4.10 has no application and the matter must be considered under Item 4.09. I find the Arbitrator erred in determining the claim pursuant to Item 4.10.
The evidence before me is that the teleconference took place over one hour and the conciliation conference occurred over two hours forty five minutes. Item 4.09 is calculated with reference to three hours forty five minutes in the sum of $937.50, an amount not exceeding the maximum, and I allow this amount plus GST.
Mr Fenton’s solicitor also claimed $250.00 under Item 4.11 of the Table for the costs of participating in the arbitration. I am not satisfied on the evidence before me that the matter proceeded to arbitration. Rather the orders reflect a consent agreement that was made during conciliation and in these circumstances Item 4.11 has no application.
I have considered Mr Fenton’s solicitor’s submissions regarding the cost of travel in relation to claims under items 4.09 – 4.11 of the Table. The Table refers to an activity and in cases requiring preparation for the activity preparation is specifically identified (see Items 4.08 and 4.08A of the Table). Travelling time is not identified as an activity and is provided for under Item 10.02 of the Table. Therefore I reject this ground of appeal.
Mr Fenton’s solicitor claimed $570.00 for the costs of reporting to the client on the outcome of three activities; the teleconference, the conciliation conference and the arbitration. The delegate determined that the proper application of the decision in Fuentes led to an allowance for two reports and allowed the claim in reduced amount of $380.00.
I am satisfied on the evidence before me that there were two activities of the type referred to under item 4.12 of the Table; the teleconference and the conciliation/arbitration hearing. The matter did not proceed to arbitration. The decision in McManus (at paragraphs 22-29) sets out the Commissions procedure for conducting the conciliation/arbitration on the same day and applies the obiter view expressed by Ipp JA in Fuentes to these procedures. In my view the delegate correctly applied these authorities in determining the claim. Therefore I reject this ground of appeal.
The inadequacy of reasons claimed by Mr Fenton’s solicitor relates to the delegate’s determination of a claim for $570.00. In the context of the Commission, where proceedings are conducted with as little formality and technicality as the proper consideration of the matter permits, lengthy written reasons will not generally be necessary to clearly and concisely convey to the parties, who are familiar with the case, the reasons for the decision. The decision refers to the authorities relied upon and clearly demonstrates that the delegate applied the mandatory considerations required of him in accordance with clause 110 of the 2003 Regulations. In my view, Mr Fenton’s solicitor should be aware that only two ‘activities’ occurred. In these circumstances I find that Mr Fenton’s solicitor has not demonstrated that the delegate’s reasons are inadequate and that their inadequacy sufficiently demonstrates that the delegate failed to exercise his statutory duty, to fairly and lawfully determine the application (Cargill Meat Processors Pty Limited v Clark[2005] NSWWCCPD 7). Accordingly I find no ‘matter of law’ arising in relation to the adequacy of the delegate’s reasons.
Summary
I have determined the disbursements and professional costs challenged by Mr Fenton’s solicitor as follows:
Disbursements
The delegate’s disallowance of the claim for agency fees for attendance, inspection and photocopying of documents is confirmed.
The delegate’s allowance for the costs of the Report in the reduced amount of $1,445.13 (including GST) is revoked.
I consider the cost of the Report in the amount of $331.70 (including GST) to be necessarily incurred.Professional Costs
The delegate’s allowance of the maximum of $500.00 for the claim under Item 4.08 is confirmed.
The delegate’s total allowance of $1000.00 (plus $100.00 GST being a total of $1100.00) under Items 4.09, 4.10 and 4.11 is revoked.
It is fair and reasonable to allow $250.00 (plus GST being an amount of $275.00) for participating in the teleconference under Item 4.09 of the Table.
It is fair and reasonable to allow $687.50 (plus GST being an amount of $756.25) for participating in the conciliation conference under Item 4.09.
Item 4.10 has no application and I disallow the claim.
Item 4.11 has no application and I disallow the claim.
The delegate’s allowance of $380.00 for Item 4.12 is confirmed.
The Delegate’s determination of $10,816.21 should therefore be decreased by $1182.18 to $9,634.03.
DECISION
Paragraphs two and four of the decision of the delegate dated 2 September 2005 are revoked and the following orders are made in their place:
“(i) The Applicant’s costs of the substantive proceedings are assessed in the sum of $9,634.03
(ii) The Respondent is, therefore, to pay to the Applicant a total amount of $9,634.03 if those costs have not already been paid.”
Paragraph one of the delegate’s decision referring to the order for costs contained in the ‘Certificate of Determination’ and paragraph three of the delegate’s decision, making no order for the costs of the assessment were not raised on appeal and are confirmed.
COSTS
The Appellant has been largely unsuccessful on appeal. I make no order as to costs of the appeal.
E Tydd
Acting Deputy President
28 November 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF E TYDD ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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