Harvey v JJC Group Pty Limited
[2006] NSWWCCPD 329
•30 November 2006
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Harvey v JJC Group Pty Ltd [2006] NSWWCCPD 329
APPELLANT: Russell Harvey
RESPONDENT: JJC Group Pty Ltd
INSURER:GIO Workers Compensation (NSW) Ltd
FILE NUMBER: WCC9138-05
DATE OF REGISTRAR’S DECISION: 19 May 2006
DATE OF APPEAL DECISION: 30 November 2006
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claims under Items 2.05, 2.06, 4.03, 4.03A, 4.03B 4.05, 4.08, 4.10, 4.12, and 9.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003 and in respect of clause 5 of the Regulation; disbursements – agency fees, fee for private investigator’s report, solicitor’s travel expenses, fee for company search.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Hunt & Hunt Lawyers
ORDERS MADE ON APPEAL: The Registrar’s determination of Mr Harvey’s claim for costs in this matter, dated 19 May 2006, is amended in accordance with these reasons.
The Respondent, JJC Group Pty Ltd, is to pay the Appellant, Mr Harvey $385.00 inclusive of GST in respect of his costs in this appeal.
BACKGROUND TO THE APPEAL
On 6 June 2006, Russell Harvey filed an appeal against a costs determination made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 19 May 2006. The Respondent to the appeal is JJC Group Pty Ltd (‘JJC’). On 3 July 2006, JJC’s solicitors filed a ‘Notice of Opposition’ to the appeal.
Mr Harvey (also referred to as ‘the Applicant’) commenced proceedings in the Commission to recover workers compensation from JJC and two other respondents, Lynlock Pty Ltd and the WorkCover Authority of NSW. On 15 March 2005, an Arbitrator directed that the Applicant discontinue proceedings against Lynlock and the WorkCover Authority.
On 4 April 2005, an Arbitrator conducted a conciliation with the Applicant and JJC and assisted them to come to an agreed resolution of the issues in dispute. On 29 April 2005, the Arbitrator issued a Certificate of Determination including a clause requiring that JJC “pay the Applicant’s costs as agreed or assessed”. By letter dated 21 June 2005, the Commission notified the parties of its registration of an agreement pursuant to section 66A of the Workers Compensation Act 1987 (‘the 1987 Act’) whereby JJC agreed to pay Mr Harvey compensation totalling $35,000 in respect of permanent impairment of his back and legs and pain and suffering.
On 14 June 2005, the parties having failed to agree on the costs payable, Mr Harvey’s solicitors lodged an ‘Application for Assessment of Costs’ with the Commission in respect of their Bill of Costs dated 4 April 2005. JJC’s submissions were received on 12 August 2005. Mr Harvey’s solicitors state they responded with further submissions by letter dated 29 August 2005, although the letter, which they have copied and attached to their submissions on the appeal, refers to matter number 9136-05 rather than the current matter 9138-05.
The Registrar delegated the assessment of costs to a Commission Arbitrator (‘the Delegate’) who made a determination dated 19 May 2006. The Certificate of Determination stated:
“1. Pursuant to a Certificate of Determination issued on 29 April 2005 the First Respondent employer [JJC] is liable to pay the Applicant’s costs of the proceedings as agreed or assessed.
2. The Applicant’s costs of the proceedings are assessed at $13,481.38 inclusive of GST.
3. There are no costs of the assessment.
4. The First Respondent [JJC] is to pay the amount of $13,481.38 inclusive of GST to the Applicant if those costs have not already been paid.”
The relevant parts of the Delegate’s Statement of Reasons for his decision are referred to below.
ISSUE IN DISPUTE
Mr Harvey’s solicitors submit that the Delegate’s failure to take into account their further submissions dated 29 August 2005 “amounts to a jurisdictional error of law on the face of the record”. JJC’s solicitors state they “cannot comment on the issue of whether or not the cost assessor received all information”, and rely on their prior submissions with regard to the costs assessment.
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
As stated above, Mr Harvey’s solicitors submit that the Delegate made an error of law by failing to refer to their further submissions on the assessment dated 29 August 2005. As I have noted, there is no record of these submissions on the Commission’s file for this matter. The letter of that date containing the submissions, which refers to a different matter number - 9136-05, is also not located on the file for matter number 9136-05 or any of the files for related matters, and there is no record of the Commission ever having received it. This explains why the submissions were not provided to the Delegate. In my view, the appropriate course on this appeal is for me to review the Delegate’s determination with reference to these further submissions.
The relevant legislation providing for the assessment of costs in workers compensation matters is the 1998 Act and the Workers Compensation Regulation 2003 (‘the 2003 Regulation’). Clause 84 of the 2003 Regulation fixes the maximum costs recoverable by legal practitioners and agents at those set out in Schedule 6, except where otherwise provided in Part 19. Schedule 6 sets out the maximum costs recoverable in workers compensation matters by reference to the Compensation Costs Table (‘the Table’) at the end of the Schedule. The Table identifies particular activities or events with an item number. It is these item numbers that are referred to below.
Mr Harvey’s solicitors identify the following professional costs and disbursements as being in dispute, each of which I will deal with in turn:
Professional Costs
Item 2.05 - $100.00
Item 2.06 – $500.00
Item 4.03 - $200.00
Item 4.03A - $200.00
Item 4.03B - $140.00
Item 4.05 – $125.00
Item 4.08 - $2,000.00
Item 4.10 - $1,250.00
Item 4.12 - $570.00
Item 9.01 - $625.00
Clause 5 costs - $12,237.50 (total claimed)Disbursements
Agency fees - $528.00
Private investigator’s report - $3,259.30
Solicitor’s travelling expenses - $1,393.00
Lawpoint search - $16.83
Professional Costs
Item 2.05
Item 2.05 is described in column 2 of the Table as “Briefing a factual investigator or other investigator to obtain evidence other than witness statements (not including the investigator’s fee)”. Mr Harvey’s solicitors maintain their claim for $100.00 under this Item in respect of briefing St George Registration and Investigation Services Pty Ltd (‘St George’) by letter to prepare a factual and liability summary report, which included a company search, a statement by Mr Harvey and a schedule of earnings. JJC submitted this should be reduced to $62.50 in accordance with the decision in Stephen Mitchell v Pet Trading Pty Ltd (matter no 10103-04) where an Arbitrator allowed 15 minutes or $62.50 for the single letter by which the investigator was briefed.
The Delegate disallowed the claim on the ground that in his opinion briefing a private investigator to prepare such a report was not:
“reasonably necessary considering the issues that were in dispute between the parties. There is no evidence that the Report contains factual or investigative information other than what could have been obtained by the Applicant’s solicitor when obtaining instructions.”
I note that in McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’), at paragraph 21, Deputy President Fleming said:
“Item 2.05 does not encompass briefing a factual investigator to take a statement from a worker/applicant. The costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01, “Obtaining instructions from client ...”
She confirmed this in Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 (‘Berger’) at paragraph 141:
“Item 2.05 does not permit a claim for briefing a factual investigator to obtain witness statements, which includes a statement from the worker.”
With this in mind, and noting the Delegate’s comments about the issues in dispute, I am not persuaded by Mr Harvey’s solicitors’ submissions that the Delegate exercised his discretion unfairly or unlawfully in determining that a factual investigation was not reasonably necessary. I therefore reject Mr Harvey’s solicitors’ appeal in relation to Item 2.05.
Item 2.06
With regard to Item 2.06 (described in the Table as “requesting a review of the claim from the insurer, prior to referral of the matter to the Commission”), Mr Harvey’s solicitors claim $500 for requesting a review from the insurer (GIO Workers Compensation (NSW) Ltd) by their letter dated 19 June 2002, a similar letter being sent to JJC on the same date, and these letters being attached to their further submissions to the Delegate dated 29 August 2005. Mr Harvey’s solicitors state the letter dated 19 June 2002 enclosed a proposed ‘Application to Resolve a Dispute’ and a report from Dr Bentivoglio dated 28 March 2002. A search of the Commission’s files for related matters located these letters in the file for matter number 3070-02.
I am therefore satisfied that Mr Harvey’s solicitors did request a review from the insurer and should be allowed the $500 claimed under this Item (plus GST of $50).
Item 4.03
Item 4.03 is described in the Table as “Requesting the Commission to give directions for the production of documents”. Mr Harvey’s solicitors claim $200 under this Item for requesting the Commission to issue directions on JJC (served on 10 September 2004), the WorkCover Authority of NSW (served on 10 September 2004), Lynlock Pty Ltd, GIO Workers Compensation (NSW) Ltd, Bourke District Hospital and Dr Bentivoglio. A review of the Commission’s files confirms that, on 17 April 2003, Mr Harvey’s solicitors requested the issue of Directions for Production in respect of JJC, GIO, Bourke District Hospital and Dr Bentivoglio; on 18 August 2004, Mr Harvey’s solicitors requested the issue of Directions for Production in respect of JJC, GIO, WorkCover and Lynlock. I am therefore satisfied the claim under item 4.03 should be allowed.
Item 4.03A
Item 4.03A is described in the Table as “Serving a direction by the Commission for the production of documents”. Mr Harvey’s solicitors claim $200 under this Item for service of the six directions requested from and issued by the Commission. As with my decision in relation to Item 4.03, I am satisfied that the claim under this Item should be allowed.
Item 4.03B
Item 4.03B is described in the Table as “Paying conduct money to person served with direction for production of documents ...”. Mr Harvey’s solicitors claim $140 under this Item. As with my decision in relation to Items 4.03 and 4.03A, I am satisfied that the claim under this Item should be allowed.
Item 4.05
Item 4.05 is described in the Table as “Reviewing documentation produced under direction of the Commission, exchanging information with the other parties and obtaining further instructions from client”. Mr Harvey’s solicitors claim a further $125 under this Item, the Delegate having allowed $375 of the $500 claimed on the basis that JJC conceded that JJC and WorkCover produced documents. Mr Harvey’s solicitors submit:
“documents were produced in earlier proceedings by Bourke District Hospital and Russell Harvey and this material was then used in the subsequent hearing.
Once again, it was not the Applicant’s fault that two hearings had to occur.
It was the Respondent’s arguments at the first hearing that there were employers whom employed the Applicant after he finished work for JJC Group Pty Ltd, who should be joined to the proceedings.
This was done so at their request, how can the Respondent submit that these documents were of no importance.”
In their further submissions dated 29 August 2005, Mr Harvey’s solicitors note that “GIO Workers Compensation (NSW) Ltd did not decide [sic] to respond to the direction to produce documents”, meaning, I assume, that GIO did not respond to the direction. A review of the Commission’s files confirms that GIO did not respond to the Direction and did not therefore produce documents. The Commission did, however, issue Access Orders in respect of documents produced by Dr Bentivoglio, JJC and WorkCover. Bourke District Hospital and Russell Harvey produced documents in the related proceedings. On this basis, I am satisfied that Mr Harvey’s solicitors should be allowed the further $125 claimed under this Item.
Item 4.08
Item 4.08 is described in the Table as “Preparing for a conference (including providing advice to client”. At the relevant time, the maximum total for that type of activity or event was $500. Mr Harvey’s solicitors claim an additional $2,000 under this Item, the Delegate having allowed $500. In their Bill of Costs, Mr Harvey’s solicitors listed three conferences (2 November 2004, 22 November 2004, and 15 March 2005) and two conciliation/arbitrations (10 February 2005 and 4 April 2005), and claimed $500 in respect of each. The Delegate only allowed a claim in respect of the teleconference on 2 November 2004 on the ground that this was the maximum allowed for such an activity or event.
In Orr v Direct Couriers (Australia) Pty Ltd [2004] NSWWCCPD 28 (‘Orr’), Deputy President Fleming discussed the application of column 4 of the Table in Schedule 6. Column 4 bears the heading “Maximum total for type of activity/event”. With reference to clause 1(2) of Schedule 6, the heading for column 4, and the NSW Court of Appeal decision in Orellana-Fuentes v Standard Knitting Mill Pty Ltd (2003) 57 NSWLR 282 (‘Fuentes’), the Deputy President said, at paragraph 38:
“the monetary values set out in Column 4 of the Table, are the maximum total for an event type in any particular claim, regardless of the number of individual activities that may take place under the event heading.”
Thus, in respect of Items 4.08, the legal practitioner may not be allowed more than the column 4 maximum regardless of the number activities/events of that type. (However, as Deputy President Fleming recognised in McManus, there is an exception in respect of Item 4.12 where, following Fuentes, the column 4 maximum of $190 may be allowed in respect of each conference or conciliation/arbitration.)
Thus, Mr Harvey’s solicitors’ claim for the additional amount must be disallowed.
Item 4.10
The activity/event described in column 2 of the Table for Item 4.10 is: “Attending and participating in a conference with an Arbitrator where the Arbitrator determines that the matter is complex and the matter proceeds directly to arbitration.” At the relevant time, the maximum total for that type of activity or event was $1,500. Mr Harvey’s solicitors claimed $1,500 in respect of the arbitration on 11 February 2005 and $1,500 in respect of the arbitration on 4 April 2005. The Delegate allowed $1,000 ($250 per hour) in respect of a four hour arbitration on 11 February 2005, as particularised by JJC, Mr Harvey’s solicitors having not particularised the time involved, and $750 in respect of a three hour arbitration on 4 April 2005. Mr Harvey’s solicitors therefore now claim the additional $1,250.
However, the principle discussed by Deputy President Fleming in Orr, set out above in relation to Item 4.08, applies equally to Item 4.10. Thus, Mr Harvey’s solicitors are not allowed more than the maximum of $1,500 regardless of how many arbitrations took place. The Delegate made an error of law in allowing $1,750 under Item 4.10 and Mr Harvey’s solicitor’s costs must therefore be adjusted by deducting $250 from the total allowed. Thus, I also reject Mr Harvey’s solicitors’ appeal in relation to this issue.
Item 4.12
This Item is described in the Table as: “Reporting to the client on the outcome of a conference or arbitration ...”. The maximum total for the type of activity or event at the relevant time was $190. As stated above, there is an exception to the general principle in relation to the column 4 maximum total in respect of Item 4.12, following Fuentes, so that the maximum of $190 may be allowed in respect of each conference or conciliation/arbitration. Mr Harvey’s solicitors claimed $190 under this Item in respect of reporting to their client on each of the teleconferences on 2 November 2004, 23 November 2004 and 15 March 2005, and claimed $380 in respect of each of the conciliation/arbitrations on 11 February 2005 and 4 April 2005. The Delegate allowed the claims in respect of the three teleconferences but only allowed $190 in respect of one conciliation/arbitration because, he stated, the conciliation/arbitration on 11 February 2005 was adjourned until 4 April 2005.
Mr Harvey’s solicitors now claim an additional $570, that part of their claim disallowed by the Delegate. JJC disputed the claims in respect of the two conciliation/arbitrations although, in my view, their reasons are not clear. Equally, in my view, Mr Harvey’s solicitors’ reasons for claiming $380, rather than $190, in respect of each of the conciliation/arbitrations are not clear unless they are submitting that the conciliation/arbitration occurring on those days should each be treated as a separate activity, a submission I reject because only one report will be made to the client in respect of each occasion. With regard to the Delegate’s disallowing one of the two claims for the conciliation/arbitrations on the ground that the second occasion was a resumption from the first occasion when the proceedings were adjourned, in my view this is an unduly restrictive interpretation of the application of the Table. The solicitor would have needed to report to the client on each occasion, notwithstanding that, technically, the second occasion was a resumption of the first. Thus, the Delegate should have allowed a further $190 in respect of the second conciliation/arbitation on 4 April 2005.
Item 9.01
This Item is described in the Table as: “Conduct of any other proceedings before the Commission involving the determination of substantive legal issues, including preparatory work”. Mr Harvey’s solicitors claimed $625.00 under this Item. The Delegate noted that Mr Harvey’s solicitors claimed:
“for an attendance on 19 March 2003 being the preparation of submissions involving substantive legal issues including preparatory work. There is no evidence in the submissions as to the nature of the submissions or as to what substantive legal issues the submissions were directed to and in those circumstances the claim for this Item is disallowed.”
Mr Harvey’s solicitors maintain their claim under this Item. I note in their further submissions to the Delegate dated 29 August 2005, they stated:
“it is submitted the proceedings in this matter was where the Arbitrator requested all parties to prepare written submissions in regards to the Applicant’s claim. It is submitted that this amounted to a legal step or measure resulting in the successful conclusion of the Applicant’s entitlements to compensation.”
In their submissions on the appeal, Mr Harvey’s solicitors state: “The submissions by the Applicant’s Solicitor refers to cases, which were annexed to the Application to Resolve a Dispute, which went from page 143 to 167.”
JJC rejected the claim under Item 9.01, relying on the decision in Michelle Edwards v Mayne Logistic Courier Division (matter no 4031-04). In that case, the Arbitrator rejected a claim in respect of the preparation of written submissions:
“26. Clearly written submissions are recoverable under 4.08 by way of preparation for a conference. However, in the present case there was no conference being prepared for, as these written submissions came after the conference. Nor was it preparation for an arbitration hearing, as a determination on the papers is not a hearing.
27. I could find no other item in the Table covering this situation, including Item 9.01. It was my conclusion that no legal costs are recoverable for written submissions in this matter.”
I note Mr Harvey’s solicitors’ two submissions on the issue of written submissions appear to be contradictory. In their further submissions to the Delegate dated 29 August 2005 they refer to written submissions requested by the Arbitrator. It seems likely these written submissions would have been prepared prior to a conference in which case an allowance could be claimed for them under Item 4.08, subject to the maximum permitted for that activity or event. If the written submissions comprised cases attached to the ‘Application to Resolve a Dispute’, then an allowance could be claimed for them under Item 4.01. I am not satisfied from Mr Harvey’s solicitors’ submissions that the Delegate made any error in disallowing this claim.
Clause 5 costs in relation to the Second and Third Respondents
Clause 5 of Schedule 6 provides, relevantly, that if more than one insurer (defined in clause 81 of the 2003 Regulation to include an employer) is a party to a claim or dispute or other matter in relation to a claim, the maximum costs in respect of the matter are the total of the costs calculated in accordance with the Table and 50% of the amount per party (other than the party who made the claim). In Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD 33 (‘Dunn’), at paragraph 35, Deputy President Fleming said, in relation to a claim for costs under clause 5, “the Registrar has an overriding discretion to award costs in accordance with what is fair and reasonable for the work performed”. At paragraph 30, she emphasised that “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”.
Mr Harvey’s solicitors claim a further 50% of the costs assessed in relation to JJC for work done in proceedings against the WorkCover Authority of NSW, together with a further 50% of the costs for work done in proceedings against Lynlock Pty Ltd. They contend the basis for this is that all three respondents were involved in 4/5ths of the conferences including the conferences on 2 November 2004 and 22 November 2004, the first conciliation/arbitration on 10 February 2005, and the conference on 15 March 2005. The only conference in which Lynlock and WorkCover were not involved was the second conciliation/arbitration on 4 April 2005 after the Arbitrator had concluded that only JJC were liable, having reviewed the medical report of the Approved Medical Specialist, Dr Bodel. The Arbitrator issued a Direction dated 15 March 2005 following the conference on that day, directing that “the Applicant discontinue proceedings against the Second and Third Respondents”.
JJC submitted that because the proceedings were discontinued against both the Second and Third Respondents, “the Respondent is not liable for additional costs for those parties. Further, in the alternative, maximum of 50% in total [was] reasonable”.
The Delegate allowed “a maximum of 25% [for each of the Second and Third Respondents] as proceedings were discontinued against both the Second and Third Respondents at an early stage”.
In their submissions on the appeal, Mr Harvey’s solicitors state:
“The only reason why the 2nd and 3rd Respondents were joined in the proceedings, was because of the attitude taken by Messrs Hunt and Hunt in the earlier proceedings, being matter number 3070-02, where Messrs Hunt and Hunt on the 02.02.2004, received instructions to put an offer of settlement of $35,000.00 in full and final settlement of the Applicant’s claim ...
Then on 23.02.2004, ... they had received instructions to withdraw the offer of $35,000.00, because pursuant to the disease provisions, an additional Respondent had to be joined.”
Mr Harvey’s solicitors state that, as a result, those proceedings were discontinued, with no order as to costs, and new proceedings commenced with WorkCover being joined in the proceedings because Lynlock turned out to be uninsured. Ultimately, the Arbitrator directed that the proceedings be discontinued against the Second and Third Respondents, and JJC made the same offer of settlement ($35,000) as that made previously, which resulted in settlement of the proceedings. Since Mr Harvey’s solicitors were unable to obtain their costs in the earlier, discontinued proceedings because the Arbitrator decided he had no jurisdiction to make an order for the payment of costs, they submit they should be entitled to the maximum costs of 50% in respect of both WorkCover and Lynlock.
JJC has made no further submission in response to Mr Harvey’s solicitors’ submission on this issue. On the basis of Mr Harvey’s solicitors’ submissions, I am satisfied that it would be fair and reasonable given the late stage at which proceedings against the Second and Third Respondents were discontinued, and bearing in mind the history of these proceedings, to allow more than the 25% allowed by the Delegate. In my view, it is appropriate to allow an additional 35% in respect of costs incurred in these proceedings relative to each of the Second and Third Respondents.
Disbursements
Agency Fees
Mr Harvey’s solicitors claimed agency fees of $588.50 for work undertaken by St George Registration & Investigation Services Pty Ltd (‘St George’) comprising filing fees of $60.50 (on three occasions) and fees for “Inspection of documents, to claim legal professional privilege over and photocopying documents” (on eight occasions - $66.00 including GST per occasion, a total of $528). JJC submitted that this claim should be disallowed pursuant to the decision in McManus. The Delegate disallowed this claim:
“The Applicant has claimed the maximum amount under Item 4.05 of the Table and in accordance with the decision of Dr Gabrial Fleming in Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD 33 the Applicant cannot claim the maximum pursuant to Item 4.05 and also claim the cost of engaging an agent.”
In their submissions on the appeal, in which they maintained their claim for $528 in respect of the inspection of documents, Mr Harvey’s solicitors said St George attended the Commission, inspected and photocopied the documents produced, objecting to certain documents and claiming privilege.
In Dunn, where the applicant’s solicitors had claimed the maximum amount permitted under Item 4.05 for reviewing documents produced under a direction, Deputy President Fleming said, at paragraph 41, that to allow the recovery of fees paid to an agent for inspection and photocopying of documents produced under a direction would be to allow recovery of an amount exceeding the maximum allowable under Schedule 6 and would be an error. She confirmed this in McManus, at paragraph 30, where for similar reasons, she disallowed a claim for instructing an agent under Item 10.01. See also Flegerbein v Tom B Blackburn Pty Ltd [2006] NSWWCCPD 30, a matter involving agency fees claimed for filing and inspection and photocopying of documents.
In the current matter, Mr Harvey’s solicitors claimed the maximum of $500 under Item 4.05. In my view, for the reasons stated in Dunn, recovery of the claimed agency fees is not permitted because Ms Smith’s solicitors have already claimed and been allowed the maximum under Item 4.05.
Private Investigator’s Report
Mr Harvey’s solicitors claimed $3,259.30 in respect of St George’s fees for preparing a factual and liability summary report. JJC submitted this fee should be reduced “to $931.23, being an allowance of two-sevenths” pursuant to the arbitral decision in Stephen Mitchell v Pet Trading Pty Ltd (matter no 10103-04). The Delegate disallowed the claim. He said that in accordance with the decision in Berger, the report:
“was not in my discretion reasonably necessary considering the issues that were in dispute between the parties. There is no evidence that the Report contains factual or investigative information other than what could have been obtained by the Applicant’s Solicitor when obtaining instructions.”
In their submissions on the appeal, Mr Harvey’s solicitors draw attention to the long history of the proceedings, noting that St George conducted a detailed factual investigation, including a company search for JJC, and prepared a schedule of earnings for Mr Harvey.
I have reviewed St George’s account dated 17 April 2003. It includes fees for a client service agreement ($140), for a “telephone conference with the claimant” ($80), for dictating and typing her statement ($150), for “Perusal of correspondence from McCabe Partners Lawyers” ($1,815.00) and for a letter to a barrister ($20) and the copying of a brief for him ($101). Disbursements claimed include the Law Point Search of $16.83.
In Berger, at paragraph 142, Deputy President Fleming, recognising that the fee for an investigator’s report may be claimed pursuant to clause 82(b) of the 2003 Regulation, noted:
“The test of whether such a report is claimable will, as discussed above, essentially be one of ‘reasonableness’. In most cases, it will not be reasonable to obtain witness statements by way of an investigator’s report, where the legal practitioner or agent has already obtained such statements, either at the time of taking instructions or at a later time, but before an application to the Commission is filed.”
The Deputy President confirmed that where an activity may be claimed as a cost for which provision is made in the Table, a separately claimed disbursement in respect of that activity by a private investigator would not be considered reasonable. In McManus, at paragraph 21, Deputy President Fleming noted that “the costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01”, where the activity/event is described as “Obtaining instructions from a client”.
Thus, no disbursement may be claimed in respect of the statement from Mr Harvey, which one would expect to see prepared by his solicitor subsequent to taking instructions from him. In my view, other disbursements, for example in respect of a client service agreement, do not fall within clause 82(b) of the 2003 Regulation, or are not fair and reasonable - for example, the $1,815 claimed for perusal of correspondence from the solicitors. Thus, I am not satisfied that the Delegate made any error in disallowing the claim.
Solicitor’s Travelling Expenses
Mr Harvey’s solicitors claimed $1,393.00 for travelling expenses for the two conciliation/arbitrations ($696.50 for each occasion comprising 850 kms at $0.59 per km = $501.50, plus accommodation of $120 and sustenance of $75). JJC disputed this claim on the ground that Mr Harvey was represented on these occasions by counsel who resides in Sydney. The Delegate disallowed the claim on this basis, noting “The Regulations do not allow for a claim by the Solicitor and Counsel to attend a Conciliation/Arbitration”.
In their submissions on the appeal, Mr Harvey’s solicitors submitted:
“It is irrelevant that the Applicant’s Solicitor briefed Counsel to represent the Applicant at the hearing on both occasions. This is because the Respondent’s [sic?] Barrister fees come out of the Applicant’s professional costs and results in a lower benefit back to the Applicant’s Solicitor legal practice.
The Applicant’s Solicitor is thereby scarifying a part of their income, in order for the injured worker to obtain justice. The Barrister is instructed by McCabe Partners Lawyers, not by the Applicant.”
I note that Mr Harvey’s solicitors did not seek to recover the fees of the barrister who represented Mr Harvey at the conciliation/arbitrations. In my view, it is fair and reasonable in these circumstances where no claim is made in respect of the barrister’s fees, and where the client is resident in Bourke and the solicitor in Young, for the solicitor, who will have been the point of contact for the client throughout the proceedings, to attend the conciliation/arbitrations and claim for travelling and accommodation expenses in accordance with the Table.
Solicitor’s travelling expenses are claimable under Item 10.02 and the costs of accommodation under Item 10.03. Mr Harvey’s solicitors claim travelling expenses in respect of 850 kms and accommodation costs of $120 on each occasion, the latter being the maximum permitted for each night’s accommodation in the Table. Under Item 10.02, travelling expenses may be claimed at $0.59 per km except for the first 50 kms, so that travelling expenses for 800 kms (rather than 850 kms) are permitted for each of the two occasions, which at $0.59 per km amounts to $472, a total of $944. There is no provision for claiming sustenance under the Table. Thus, the expenses that may be claimed are $944 for travelling expenses under Item 10.02 and $240 for accommodation under Item 10.03.
Lawpoint Search
Mr Harvey’s solicitors claim $16.83 in respect of a Lawpoint search in respect of JJC. JJC submitted this is not recoverable under the 2003 Regulation. In my view, such a disbursement is fair and reasonable and should have been allowed as a cost covered by clause 82(b) of the 2003 Regulation.
Summary
The outcome of my review of the Delegate’s determination in relation to the professional costs and disbursements challenged by Mr Harvey’s solicitors is as follows:
Professional Costs
• Item 2.05: the Delegate’s disallowance of the claim under this Item is confirmed.
• Item 2.06: a claim for $500.00 (plus $50 GST = $550.00) for requesting a review of the claim from the insurer should be allowed.
• Item 4.03: a claim for $200 (plus $20 GST = $220) should be allowed.
• Item 4.03A: a claim for $200 (plus $20 GST = $220) should be allowed.
• Item 4.03B: a claim for $140 (plus $14 GST = $154) should be allowed.
• Item 4.05: a further $125 (plus $12.50 GST = $137.50) should be allowed.
• Item 4.08: the Delegate’s award of $500 is confirmed. The claim for an additional amount is disallowed.
• Item 4.10: the Delegate’s award is reduced by $250 (plus $25 GST = $275)
• Item 4.12: a further $190 (plus $19 GST = $209) should be allowed.
• Item 9.01: the Delegate’s disallowance of the claim under this Item is confirmed.
• Item 10.01: the Delegate’s disallowance of this claim is confirmed.Additional professional costs of $1,105 (exclusive of GST) in respect of JJC
• Clause 5 Costs: the Delegate allowed $6,527.50 (exclusive of GST) for the above professional costs in respect of JJC and an additional 25% ($1,631.88) in respect of each of the Second and Third Respondents, a total of $9,791.26.
I have determined that to the $6,527.50 must be added $1,105.00, to give $7,632.50. An additional 35% of this amount ($2,671.37) should be allowed in respect of each of the Second and Third Respondents, ie a total of $5,342.75.
Therefore the total professional costs allowed are $12,975.25 plus GST of $1,297.52 = $14,272.77. The Delegate allowed $10,770.38. Therefore, a further $3,502.39 is payable.
Disbursements
• Agency fees: the Delegate’s disallowance of this disbursement is confirmed.
• Private investigator’s report: the Delegate’s disallowance of this disbursement is confirmed.
• Item 10.02: $944 should be allowed for solicitor’s travelling costs.
• Item 10.03: $240 should be allowed for solicitor’s accommodation.
• Lawpoint search: $16.83 should be allowed.Total additional disbursements allowed on the appeal = $1,200.83
Total additional professional costs ($3,502.39) and disbursements ($1,200.83) = $4,703.22
The Delegate’s determination of $13,481.38 should, therefore, be increased by $4,703.22 to $18,184.60.
DECISION
The Registrar’s determination of Mr Harvey’s claim for costs in this matter, dated 19 May 2006, is amended in accordance with these reasons.
COSTS
Mr Harvey’s solicitors have been partly successful in this appeal. In my view, it is reasonable to order that JJC pay Mr Harvey’s costs in this appeal in the sum of $385 inclusive of GST, representing the equivalent of approximately one and a half hours of work. The appropriate order, therefore, is: “The Respondent, JJC Group Pty Ltd, is to pay the Appellant, Mr Harvey $385.00 inclusive of GST in respect of his costs in this appeal.”
Robin Handley
Acting Deputy President
30 November 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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