Graziani v Burrangong Pet Food Pty Ltd
[2007] NSWWCCPD 215
•23 October 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Graziani v Burrangong Pet Food Pty Ltd [2007] NSWWCCPD 215
APPELLANT: Andrew Simon Graziani
RESPONDENT: Burrangong Pet Food Pty Ltd
INSURER:CGU Workers Compensation (NSW) Ltd
FILE NUMBER: WCC2989-07
DATE OF ARBITRATOR’S DECISION: 13 July 2007
DATE OF APPEAL DECISION: 23 October 2007
SUBJECT MATTER OF DECISION: Leave to appeal; preliminary or interim orders of an interlocutory nature; section 352(8) of the Workplace Injury Management and Workers Compensation Act 1998; costs against a legal practitioner
PRESIDENTIAL MEMBER: Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Moray & Agnew
ORDERS MADE ON APPEAL: Leave to appeal is refused.
No order as to the costs of or incidental to the appeal.
BACKGROUND TO THE APPEAL
Andrew Simon Graziani (‘the Appellant Worker/ Mr Graziani’) first sought compensation from his former employer, Burrangong Pet Food Pty Ltd (‘the Respondent Employer’), in proceedings in the Commission in matter number 2907-05. He alleged injuries to his “neck, back, left shoulder with pain radiating down the left arm, impairment to sexual function and depression” as a result of:
(a)an incident in March 2000;
(b)an incident on 5 May 2004;
(c)his employment duties generally between 1990 and 31 December 2001, and
(d)his employment duties generally between 1 January 2002 and 16 August 2004.
In the Application to Resolve a Dispute (‘the first Application’) Mr Graziani sought weekly compensation from 1 February 2004 to date and continuing, medical expenses and lump sum compensation.
At a teleconference on 4 May 2005 an issue was raised about the fact that the first Application had not been served on the relevant insurer. An order was made that that be done.
At a second teleconference on 27 May 2005 issues were raised as to the correct dates of the injury or injuries.
At the arbitration on 20 June 2005 the first Application was amended (‘the amended first Application’) to allege injury to the “neck, back, left shoulder with pain radiating down the left arm, right arm and right leg” as a result of:
(a)an injury on 18 February 2000, and
(b)the nature and conditions of employment from 2 December 1994 to 18 February 2000;
In respect of any disease allegation, the ‘deemed date of injury’ was 18 February 2000.
On the basis of the amendments made, the Respondent Employer agreed to reinstate weekly compensation and compensation for hospital and medical benefits. Those parts of the claim were discontinued. Mr Graziani’s claim for lump sum compensation was referred to an Approved Medical Specialist (‘AMS’) for assessment of his losses resulting from the “nature and conditions of employment from 2 December 1994 to 18 February 2000 with an agreed deemed date of injury as 18 February 2000 (as a result of disease or aggravation of disease)”.
An AMS (Dr Silver) examined Mr Graziani and a Medical Assessment Certificate (‘the first MAC’) was issued on 8 August 2005 in which, among other things, Mr Graziani was assessed to have nil permanent impairment of his back. That MAC was the subject of an appeal by Mr Graziani to a Medical Appeal Panel (‘the MAC appeal’).
In support of his MAC appeal Mr Graziani sought to introduce as fresh evidence an MRI scan of Mr Graziani’s lumbar spine from Dr Stephenson dated 26 August 2005. That application was considered by the Appeal Panel and refused in reasons given on 13 June 2006. At page three of the Appeal Panel’s reasons it was held:
“In the Panel’s view the Appellant’s submissions to the effect that the failure to admit the document [Dr Stephenson’s report] would be contrary to the objectives of the Commission fails to address the prohibition in section 328(3) of the 1998 Act or the common law principles that might guide the admission of fresh evidence in this Appeal. In particular the Appellant has not addressed why the report could not have been obtained before the medical assessment and has not identified how the report is of such probative value that it might well change the outcome in the case. In these circumstances the Panel is not satisfied that the report of Dr Stephenson should be accepted into this Appeal.”
For reasons not relevant to this appeal, the Appeal Panel revoked the first MAC and issued a second MAC on 13 June 2006 assessing Mr Graziani to have a 4.5% permanent loss of efficient use of his left arm at or above the elbow and a 13.5% permanent impairment of his neck. Both assessments were given after allowing for a 10% deduction for pre-existing conditions. However, the second MAC confirmed the earlier certification that Mr Graziani had a nil permanent impairment of his back.
The Commission issued a Certificate of Determination on 5 July 2006 making the following orders:
“1.That the Respondent pay the Applicant, as lump sum compensation under section 66 of the Workers Compensation Act 1987;
(1)$5,400 in respect of 13.5% permanent impairment of the neck, attributable to the date of injury of 18 February 2000;
(2)$3,375 in respect of 4.5% permanent loss of efficient use of the left arm at or above the elbow, attributable to the date of injury of 18 February 2000.
2.That the Applicant suffers 0% permanent impairment of the back, attributable to the date of injury of 18 February 2000.
3.That the Applicant suffers 0% permanent loss of efficient use of the right leg at or above the knee, attributable to the date of injury of 18 February 2000.
4.That the Applicant suffers 0% permanent loss of efficient use of the right arm at or above the elbow, attributable to the date of injury of 18 February 2000.
5. That the Respondent pay the Applicant’s costs as agreed or assessed.”
On 27 July 2006 the Respondent Employer’s solicitors (Moray & Agnew) forwarded a cheque to Mr Graziani’s solicitors, McCabe Partners, for 90% of the amount due after making a deduction for 10% advance payment to Medicare Australia.
On 31 July 2006 McCabe Partners returned that cheque stating, “we are lodging an appeal”.
On 7 August 2006 the cheque was returned to McCabe Partners, pending the outcome of any appeal and was presented on 12 August 2006.
Moray & Agnew enquired by letters dated 7 August and 23 October 2006 whether an appeal had been lodged but no response was received.
By letter dated 27 September 2006 addressed to CGU Workers Compensation (NSW) Ltd (‘CGU’) McCabe Partners gave notice of intention to claim lump sum compensation on behalf of Mr Graziani in respect of 20% permanent impairment of his back and 15% permanent loss of use of his right leg at or above the knee. These amounts had previously been claimed in the first Application and had been the subject of the first MAC and the Appeal Panel decision of 13 June 2006.
Moray & Agnew wrote to McCabe Partners on 23 October 2006 advising, among other things, that the claims made in the letter of 27 September 2006 and set out in a draft application attached to that letter had been finalised by the Certificate of Determination issued by the Commission on 5 July 2006. As no evidence had been provided certifying that Mr Graziani had suffered a deterioration in his condition and as the only evidence relied on in support of the application was evidence relied on in the first Application (reports from Dr Mahony dated 21 December 2004), liability was denied and notice was given that “if the claim is pursued, our instructions will be to seek costs orders against both the applicant and your firm”.
A second Application to Resolve a Dispute (matter number 18443-06) (‘the second Application’) was registered in the Commission on 28 December 2006 seeking lump sum compensation in respect of a 20% permanent impairment of the back and a 15% permanent loss of efficient use of the right leg at or above the knee as a result of the same injuries set out in the amended first Application. The second Application was discontinued at a teleconference on 27 February 2007.
A third Application to Resolve a Dispute (matter number 2989-07) (‘the third Application’) was registered in the Commission on 30 April 2007 and served on Moray & Agnew on 4 May 2007.
The third Application is in identical terms to the second Application save that on page one the following is added:
“The Applicant seeks the Workers Compensation Commission to reconsider its determination dated 05.07.2006, pursuant to Section 350(3) and Section 378 of the Workplace Injury and Management Act 1998 [sic].
The Applicant seeks the Workers Compensation Commission to refer the matter back to either the Approved Medical Specialist, Dr Silver, or the Medical Appeal Panel, Ms Nicholl, Dr Niall, Dr Kapila to rescind, alter or amends [sic] its determination not to allow the MRI scan dated 26.08.2005 into evidence.”
By letter dated 21 May 2007 Moray & Agnew wrote to McCabe Partners and stated, among other things:
(a)apart from the applications made under sections 350(3) and 378 of the 1998 Act, the allegations and claims made in the third Application are identical to those set out in amended first Application;
(b)those claims have been determined;
(c)at the teleconference in matter 18443-06 on 27 February 2007 McCabe Partners were informed that there is no prescribed form for an application for reconsideration under section 350(3) and/or section 378 and that all that is required is a letter. An email to that effect and dated 27 February 2007 from the then Registrar of the Commission is attached at page 225 of the third Application;
(d)any application under section 350(3) and/or section 378 should be made in the form of a letter setting out the orders sought and the submissions made in support, and
(e)the third Application should be discontinued forthwith, failing which “our instructions are to seek the same costs orders which were foreshadowed in our letter to you dated 19 January 2007”.
By its Reply filed on 21 May 2007 the Respondent Employer disputed liability on the following grounds:
(a)the allegations and claims made in the application are identical to those made in the application in previous proceedings;
(b)pursuant to a Certificate of Determination dated 5 July 2006 and issued in matter number 2907-05, the claims made in the present matter were determined;
(c)these proceedings are not maintainable by operation of issue estoppel and/or res judicata;
(d)no dispute has arisen under section 60;
(e)the claim made in these proceedings is frivolous or vexatious and/or made without proper justification, such that an order should be made that the Applicant pay the Respondent’s costs, and
(f)the actions by the Applicant’s solicitor in filing this application constitutes serious neglect and/or serious incompetence, such that it is appropriate that an order be made that the Applicant’s solicitor repay to the Applicant the whole of the costs ordered to be paid by him to the Respondent.
The matter was listed for teleconference before a Commission Arbitrator on 4 June 2007. The Arbitrator expressed his understanding of the third application at T1.29 as follows:
“There’s an application for reconsideration of a determination of the Commission of 5 July 2006 under section 350 subsection (3) and there’s also an application for the claim to be referred back to an Approved Medical Specialist or a Medical Appeal Panel to determine this matter, to rescind or to amend its determination not to allow an MRI scan dated 26 August 2005 into evidence.”
The Arbitrator concluded that he did not have the power to make such an order because the matter had been completed (T1.55) and he therefore dismissed the application. He also noted that the claim for medical expenses had been discontinued (T2.2). The Respondent Employer sought an order for costs, which was refused.
On 13 July 2007 the Commission issued the following Certificate of Determination:
“At the teleconference in this matter on 4 June 2007 the Commission ordered that pursuant to section 354(7A)(c) of the 1998 Act and Rule 15.8:
that the Application is dismissed."
By an appeal filed on 28 June 2007 but rejected by the registry and re-filed on 23 July 2007, the Appellant Worker seeks leave to appeal the Arbitrator’s determination dated 13 July 2007 dismissing the third Application.
PRELIMINARY MATTERS
Section 354(6) Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(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 that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, 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.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the appeal meets the thresholds in section 352 of the 1998 Act and, if it does, whether the Arbitrator was in error in dismissing the third Application.
The Respondent Employer argues that the third Application was misconceived and the appropriate way to proceed by way of reconsideration was by letter to the Registrar. It seeks costs of the proceedings before the Arbitrator and on appeal on the ground that both the third Application and the appeal were “frivolous or vexatious” and/or “made without proper justification” within the meaning of section 341(4) of the 1998 Act. It is also argued that those costs should be paid by Mr Graziani’s solicitor on the grounds that the third Application and the appeal resulted from that solicitor’s “serious incompetence” within the meaning of section 344(1) of the 1998 Act.
An issue also arises as to whether the Respondent Employer is entitled to rely on its Notice of Opposition, filed out of time on 26 September 2007 and the costs of the application to extend time in which to file that document.
LEAVE TO APPEAL
Before proceeding to deal with an appeal the Commission must determine whether the application meets the thresholds in section 352 of the 1998 Act.
Section 352, as amended by the Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act 2005 (‘the amending Act’), provides:
“352 Appeal against decision of Commission constituted by Arbitrator
(1) A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(1A) An appeal is to be made by application to the Registrar. The appeal is not to proceed unless the Registrar is satisfied that the requirements of this section and any applicable Rules and regulations as to the making of the appeal have been complied with.
(2) The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a) at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b) at least 20% of the amount awarded in the decision appealed against.
(3) If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4) An appeal can only be made within 28 days after the making of the decision appealed against.
(5) An appeal under this section is to be by way of review of the decision appealed against.
(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7) On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
Alternatively, the matter may be remitted back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions of the Commission.
(7A) Section 345 of the Legal Profession Act 2004 applies to and in respect of the provision of legal services in connection with an appeal to the Commission under this section in the same way as it applies to and in respect of the provision of legal services in connection with a claim or defence of a claim for damages referred to in that section.Note: Section 345 of the Legal Profession Act 2004 prohibits a law practice from providing legal services in connection with a claim or defence unless a legal practitioner associate responsible for the provision of those services believes, on the basis of provable facts and a reasonably arguable view of the law, that the claim or defence has reasonable prospects of success.
(8) In this section, ‘decision’ includes an award, interim award, order, determination, ruling and direction, but does not include any award, order, determination, ruling or direction of an interlocutory nature prescribed by the regulations.” (emphasis added)
The amendments effected by the amending Act were the inclusion of subsections (1A), (7A) and the amendment of subsection (8) to exclude orders of an interlocutory nature from the definition of ‘decision’. Subject to the regulations and transitional provisions, these amendments commenced on 1 November 2006.
Time
An Arbitrator’s decision is made when the Commission issues a certificate as to the determination of the dispute as require by section 294(1) of the 1998 Act (see Part 16 Rule 16.2 of the Workers Compensation Commission Rules 2006).
In the present matter the Certificate of Determination was issued on 13 July 2006 and the appeal re-filed on 23 July 2006. The appeal was therefore lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Monetary Threshold
Before leave to appeal can be granted it is necessary that “the amount of compensation at issue on the appeal” is both “at least $5,000.00” and “at least 20% of the amount awarded in the decision appealed against”. The amount of compensation at issue on the appeal must be determined by reference to the amount of compensation at issue in the proceedings before the Arbitrator at first instance. In Grimson v Integral Energy [2003] NSWWCCPD 29 at [30] Deputy President Fleming held:
“The preferred interpretation, in my view, is that the Commission, constituted by a Presidential Member, may grant leave only to appeal against a decision of an Arbitrator where there is an amount of compensation at issue on the appeal that is (a) at least $5,000, and, if a monetary award has been made, (b) at least 20% of that award. The ‘. . . amount of compensation at issue on the appeal’ is determined by reference to the amount of any monetary award made by the Arbitrator or, where no monetary award is made, the amount of the claim as particularized by the Applicant.”
In Fletchers International Exports Pty Limited v Regan [2004] NSWWCCPD 7 (‘Regan’) it was held at [27] that:
“The decision must have a real capacity to put the amount of compensation, determined by reference to the decision or the claim (Sheridan v Coles Supermarkets Australia Pty Limited [2003] NSWWCC PD 3), in issue in the appeal (as in the case of the filing of a ‘Reply’ (ADCO Constructions Pty Ltd v Ferguson [2003] NSWWCC PD21)).”
As no compensation has been awarded in this matter the amount of compensation at issue on appeal is determined by reference to the compensation claimed in the proceedings before the Arbitrator. The only compensation that is potentially “at issue” is the claim for lump sum compensation, alleged to total $63,250.00 (see page 26 of the third Application).
Therefore, the amount of compensation “at issue” in the appeal is in excess of the threshold in section 352(2) of the 1998 Act and the whole of that amount is at issue.
Interlocutory
The authorities of Little v State of Victoria (1998) 4 VR 596 (‘Little’) and Wickstead v Browne (1992) 30 NSWLR 1 at 11 (‘Wickstead’) provide clear statements of principle that are applicable to the present matter. In Little, an order striking out proceedings because they did not disclose a cause of action was held to be interlocutory. In Wickstead, an order for summary dismissal under Part 13 Rule 5 of the NSW Supreme Court Rules 1970 was held to be interlocutory. In my view, the order made by the Arbitrator was clearly a preliminary or interim order of an interlocutory nature (see clause 200B of the Workers Compensation Regulation 2003) as it was not a decision on the merits and has not disposed of or determined any of the parties’ rights.
Therefore, the Arbitrator’s order was, in the circumstances of this case, interlocutory in nature and is not a ‘decision’ against which leave to appeal can be granted.
Leave to appeal must be and is refused.
OTHER MATTERS
The Arbitrator’s Order
The Certificate of Determination records that the Arbitrator’s order dismissing the matter was made under section 354(7A)(c) of the 1998 Act and Part 15 Rule 15.8 of the Workers Compensation Commission Rules 2006 (‘the 2006 Rules’). Subsection 7A of section 354 provides:
“(7A) The Commission may dismiss proceedings before it before or during the conduct of proceedings:
(a) if it is satisfied that the proceedings have been abandoned, or
(b) if it is satisfied that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance, or
(c) for any other ground of dismissal specified in the Rules.”
Rule 15.8 of the 2006 Rules provides:
“Failure by an applicant to prosecute the proceedings with due despatch is a ground of dismissal for the purposes of section 354(7A) of the 1998 Act.”
The Arbitrator’s reason for dismissing the third Application was that he did not believe he had power to make the order sought or to reopen and reconsider the Appeal Panel decision. I agree that an Arbitrator does not have the power to reopen or reconsider an Appeal Panel decision and no power to deal with reconsiderations under section 378 of the 1998 Act. However, the Commission does have power to “reconsider any matter that has been previously dealt with” (emphasis added) by it (section 350(3) of the 1998 Act). That includes the power to reconsider any Certificate of Determination. Mr Graziani sought a reconsideration of the Certificate of Determination of 5 July 2006. In addition, the Commission has the power to refer matters for further assessment by an AMS (section 329(1)(b) of the 1998 Act).
These powers, however, can only be used in the appropriate circumstances. The circumstances in which the Commission will entertain an application for reconsideration under section 350(3) were considered in Samuel v Sebel Furniture Limited [2006] NSWWCCPD 141 and Nan v Country Road Freight Services Pty Limited [2006] NSWWCCPD 160. Those cases both referred to and applied the principles discussed in Maksoudian v J Robins & Sons Pty Limited (1993) 9 NSWCCR 642, where Bishop J said at 645D:
“The legal basis for a reconsideration for an award of the Court as laid down in section 36 of the previous legislation and section 17 of the present is well settled. There is no doubt that the discretion of this Court to reconsider is wide and far reaching. The task of the Court is to balance the policy requirement of finality of litigation with the obligation to rectify any clear cut injustice. The cases do not comprehensively indicate how the Court is to approach this task, but it does seem that two broad requirements are laid down. The first of these is that the material leading to an application for reconsideration must be what can broadly be described as ‘fresh evidence’, namely material that with reasonable diligence could not have been put before the Court at the time of the original proceedings and the application for reconsideration has to move with appropriate speed and diligence to bring that matter to the Court's attention. The second point is that the fresh evidence must be of such a nature that if it had been before the Court when the original proceedings were heard it would more likely than not have affected the outcome of the proceedings: Hardaker v. Wright & Bruce Pty Ltd (1962) 62 SR (NSW) 244 and Hilliger v. Hilliger (1952) 52 SR (NSW) 105.”
The application for reconsideration in the present matter was based on the MRI scan prepared by Dr Stephenson on 26 August 2005. That scan was not, on any view of the matter, ‘fresh evidence’. It was available well before the Certificate of Determination of 5 July 2006. The application to rely on it as fresh evidence before the Appeal Panel was refused for reasons set out at pages two and three of the Appeal Panel’s Statement of Reasons. There is no power to appeal to an Arbitrator or a Presidential member against an Appeal Panel’s decision.
In these circumstances the application to the Arbitrator was unsupported by any evidence or material that could be described as ‘fresh evidence’. Therefore, the application was “misconceived or lacking in substance” (section 354(7A)(b) of the 1998 Act) and the Arbitrator would have been justified in dismissing the third Application on this ground.
Whilst I agree with the Respondent Employer that the filing of an Application to Resolve a Dispute was not the appropriate method by which to bring an application for reconsideration under section 350(3) of the 1998 Act before the Commission, that error in itself was not an impediment to the Commission determining the application, if it was otherwise properly founded. Section 354(1) of the 1998 Act makes it clear that the proceedings in the Commission are to be conducted with as little “formality and technicality as the proper consideration of the matter permits”. The Commission is not a court and is not bound by strict rules of pleadings. As there is currently no form for an application for reconsideration under section 350(3), it is appropriate to bring such an application by way of a letter addressed to the Registrar with all necessary supporting evidence and submissions. Such applications must be made as soon as practicable after the person making the application becomes aware of any ground on which it is made and, usually, before any fresh step in the proceedings after becoming so aware. Any delay in filing the application may well be prejudicial to the successful outcome of the reconsideration.
Whilst the filing of the third Application was inappropriate, that error in itself was not fatal to the claim. There is simply no evidence in support of the application for reconsideration. For that reason, the Arbitrator was not in error in dismissing the third Application.
In respect of Applications to the Commission in general, I note that the third Application, together with annexures, is 227 pages in length. The overwhelming majority of the material in it was totally irrelevant to the issue before the Arbitrator. This represents a significant waste of time and resources for all concerned. If this practice continues it may well result in section 344 of the 1998 Act being used (in the appropriate case) and a costs order being made against the legal practitioner concerned for delaying the proceedings through “serious incompetence or serious misconduct”.
COSTS
The Respondent Employer seeks costs of the proceedings before the Arbitrator and on appeal.
Costs Before the Arbitrator
Before the Arbitrator, the Respondent Employer submitted that Mr Graziani should pay its costs and that his solicitor should be ordered to pay those costs under section 344(1)(b) of the 1998 Act. The Arbitrator declined to make that order and ordered “No order as to costs” (T3.41). On appeal it is submitted that that order should be revoked and “an order should be substituted that the appellant’s solicitor pay the respondent’s costs” (Respondent Employer’s submissions, paragraph 15).
The fundamental difficulty with this application is that leave to appeal has been refused. Therefore, the appeal is not properly before me to enable any orders to be made in respect of the proceedings before the Arbitrator. Had Mr Graziani not sought leave to appeal, the Respondent Employer could not have appealed the Arbitrator’s costs order because ‘costs’ are not ‘compensation’ (see Holmes v Rodney S & Susan Cooper [2006] NSWWCCPD 281).
Therefore, I have no power to make any orders in respect of the proceedings before the Arbitrator and I decline to make any order as to costs of those proceedings.
Costs of the Appeal
The Commission’s power to order costs is set out in Division 3 of the 1998 Act. Sections 340 and 341 provide:
“340 Application of Division
This Division applies to costs payable by a party, or by a party’s insurer, in or in relation to a claim for compensation.
341 Costs to be determined by Commission
(1) Costs to which this Division applies are in the discretion of the Commission.
(2) The Commission has full power to determine by whom, to whom and to what extent costs are to be paid.
(3) The Commission may order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 (or in relevant regulations under Division 4 of this Part) or on an indemnity basis.
(4) The Commission may not order the payment of costs by a claimant unless the Commission is satisfied that the claim was frivolous or vexatious, fraudulent or made without proper justification.
(5) If the Commission is satisfied that a part only of a claim was frivolous or vexatious, fraudulent or made without proper justification, the Commission may order the claimant to pay the costs relating to that part of the claim.
(6) Any party to a claim may apply to the Commission for an award of costs.” (emphasis added)
The Respondent Employer submits that the appeal is “frivolous or vexatious” and/or “made without proper justification” within the meaning of section 341(4) and has resulted from the actions of Mr Graziani’s solicitor which constitute “serious incompetence” within the meaning of section 344(1) of the 1998 Act, “with the result that an order should be made that the appellant’s solicitor should pay the Respondent Employer’s costs of the appeal” (Respondent Employer’s submissions, paragraph 14). In respect of the appeal, no costs order is sought against Mr Graziani.
“344 Liability of legal practitioner for client’s costs in certain cases
(1) The Commission may, at any stage of a matter, make one or more of the following orders in respect of a legal practitioner whose serious neglect, serious incompetence or serious misconduct delays, or contributes to delaying, the matter:
(a) an order disallowing the whole or any part of the costs between the legal practitioner and his or her client,
(b) an order directing the legal practitioner to repay to his or her client the whole or any part of the costs that the client has been ordered to pay to any other party,
(c) an order directing the legal practitioner to indemnify any party other than his or her client against the whole or any part of the costs payable by the party indemnified.
(2) The Commission may refer a matter to a costs assessor for inquiry and report before making such an order.
(3) The Commission may order that notice of such an order against a legal practitioner is to be given to the legal practitioner’s client in a specified manner.
(4) A legal practitioner is not entitled to demand, recover or accept from his or her client any part of the amount for which the legal practitioner is directed by the Commission to indemnify a party pursuant to such an order.(5) This section does not limit any other provision of this Part.” (emphasis added)
Costs on appeal to a Presidential member are dealt with in section 345 of the 1998 Act which provides:
“345 Costs penalties where appeal is unsuccessful
(1) On an appeal from the Commission constituted by an Arbitrator to the Commission constituted by a Presidential member:
(a) if the appellant is unsuccessful on the appeal, the Commission is to order that the appellant’s costs on the appeal are not to be paid by any other party to the appeal, and
(b) if the appellant is an insurer (other than a licensed insurer that maintains a statutory fund under the 1987 Act) and is unsuccessful on the appeal, the Commission may order the insurer to pay to the Authority for payment into the WorkCover Authority Fund an administration fee of $1,000 or such other amount as may be prescribed by the regulations.
(2) A costs agreement within the meaning of Part 3.2 of the Legal Profession Act 2004 is of no effect to the extent to which it relates to costs the subject of an order in force under subsection (1) (a).
(3) If an appeal concerns lump sum compensation, weekly payments of compensation or medical expenses compensation, the appellant is considered to be unsuccessful on the appeal unless the decision on appeal results in a change in favour of the appellant in the amount awarded or ordered to be paid in the decision appealed against of at least $5,000 (or such other amount as may be prescribed by the regulations) and at least 20% of the amount awarded or ordered to be paid.
(4) An administration fee that an insurer is ordered to pay is recoverable as a debt due to the Authority.
(5) The Registrar is to notify the Authority of an order to an insurer under this section to pay an administration fee.”
Whilst section 341(2) states that the Commission has power to determine “by whom” costs are to be paid, that provision is subject to section 340 which makes it clear that the Division only applies to “costs payable by a party” (see Weereratne v Railway Services Authority (NSW) (1999) 18 NSWCCR 135). Therefore, except in the very limited and specific circumstances set out in section 344, I do not believe the Commission has a general power to order costs against a legal practitioner.
Section 344 gives the Commission a discretion, at any stage of a matter, to make certain orders in respect of a legal practitioner whose “serious neglect, serious incompetence or serious misconduct delays, or contributes to delaying, the matter”. There are two points to note about section 344. First, it only operates after an order for costs has been made against the legal practitioner’s client. As noted above, no such order is sought against Mr Graziani on appeal. Second, the present matter does not concern the ‘delaying’ of a matter, but concerns the making of an application without any proper support and the bringing of an appeal that had no prospect of success. The terms of section 344 do not cover the situation before me. The appeal is without merit and leave to appeal is refused. However, no conduct by Mr Graziani’s solicitor contributed to the ‘delaying’ of the matter. Therefore, there is no basis for ordering costs against Mr Graziani’s solicitor in respect of the appeal and I decline to do so.
The Respondent Employer’s Late Notice of Opposition and the Costs Relating to the Extension of Time for the Filing of That Document
The Respondent Employer’s submissions should have been filed and served on or before 5 September 2007 but were not filed until 26 September 2007, three weeks late. By letter dated 11 September 2007 the Respondent Employer’s solicitors sought an extension of time in which to file their submissions. By letter dated 12 September 2007 Mr Graziani’s solicitor opposed the Respondent Employer being allowed to file its submissions late and argued that if time for filing of the Respondent Employer’s Notice of Opposition was extended, the costs of the application to extend time should be paid by the Respondent Employer.
A respondent to an appeal must file and serve a Notice of Opposition within 28 days from being served with the appeal (Part 16 Rule 16.2 of the 2006 Rules). The Commission has power under Part 1 Rule 1.6 of the 2006 Rules to dispense with compliance with any requirement of the Rules. The authorities relied on by the Appellant Worker’s solicitor in his letter of 12 September 2007 relate to applications to extend time to appeal and are of limited, if any, relevance to the present matter. No reference was made to the relevant Rules and the submissions were of no assistance. The Respondent Employer’s application merely sought an extension of time in which to file its Notice of Opposition, not an extension of time in which to appeal.
Whilst it is important that all parties comply with the time limits in the Rules relating to the filing and service of documents, in the present case the delay involved was short, no prejudice was occasioned to the Appellant Worker and an explanation has been offered for the delay. I therefore extend the time for the filing of the Respondent Employer’s submissions until 26 September 2007.
The Appellant Worker’s application for costs in respect of the extension of time application is refused.
OTHER MATTERS
McCabe Partners filed further submissions in a letter addressed to the Commission on 16 October 2007. These submissions refer to three additional authorities: Tran v J Robins and Sons Pty Limited [2006] NSWSC 1013, Riverina Wines Pty Limited v The Registrar of the Workers Compensation Commission of NSW & ors [2007] NSWCA 149 and Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124. None of these cases deal with any of the issues before me.
CONCLUSION
McCabe Partners’ conduct in this matter has been most unsatisfactory. The third Application had no merit, included hundreds of pages of totally irrelevant material and should not have been filed. The appeal was also without merit, had no reasonable prospect of success and should not have been filed. On the face of it, there was no basis for the certification signed by David McCabe on 26 June 2007 in Part 3 of the Appeal Against Decision of Arbitrator. Practitioners should be aware that the provision of legal services by a legal practice without reasonable prospects of success is capable of being unsatisfactory professional conduct or professional misconduct by a legal practitioner (section 347 of the Legal Profession Act 2004).
DECISION
Leave to appeal is refused.
COSTS
No order as to the costs of or incidental to the appeal.
Bill Roche
Deputy President
23 October 2007
I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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