Hristovski v Menzies Business Services Pty Limited
[2007] NSWWCCPD 30
•31 January 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Hristovski v Menzies Business Services Pty Limited & Ors [2007] NSWWCCPD 30
APPELLANT: Zoran Hristovski
RESPONDENT: Menzies Business Services Pty Limited
INSURER:GIO Workers Compensation (NSW) Limited
FILE NUMBER: WCC1377-06
DATE OF REGISTRAR’S DECISION: 5 July 2006
DATE OF APPEAL DECISION: 31 January 2007
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s Assessment of Costs: Clause 5 of Schedule 6 of the Workers Compensation Regulation 2003
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: Barwick Boitano Lawyers
Respondent: TurksLegal
ORDERS MADE ON APPEAL: 1. The Registrar’s determination of Mr
Hristovski’s claim for costs in this matter, dated 5 July 2006, is amended in accordance with these reasons. The Registrar’s determination of $4,480.00 is set aside and the sum of $6,944.00 substituted in lieu thereof.
2.The Respondent, Menzies Business Services Pty Limited is to pay the Appellant, Mr Hristovski, $385.00 inclusive of GST in respect of his costs in this appeal.
BACKGROUND TO THE APPEAL
On 21 July 2006 Zoran Hristovski (‘the Appellant’) filed an ‘Appeal Against a Cost Determination’ made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 5 July 2006. The Respondent to the appeal is Menzies Business Services Pty Limited (‘the Respondent’). On 7 August 2006 the Respondent filed a ‘Notice of Opposition’ to the appeal.
The Appellant initially commenced proceedings in the former Compensation Court by Application for Determination filed on 19 November 2001. The proceedings were eventually transferred to the Commission and formally filed on 5 December 2003. Whilst the initial proceedings named one Respondent only, ultimately, before the Commission, four Respondents were joined together with three insurers. At a Teleconference on 21 June 2005, proceedings were partially resolved to the extent that the Appellant would proceed against the First Respondent only. On 22 June 2005 a ‘Certificate of Determination’ was issued. The Certificate noted that the Respondent to the appeal, the First Respondent in proceedings before the Arbitrator, would pay the Appellant certain lump sum compensation. The Application was dismissed as against the Second, Third and Fourth Respondents with no order as to costs. The ‘Certificate of Determination’ included an order as follows:
“The First Respondent is to pay the Applicant’s costs to date as agreed or assessed. Such costs are to include any additional costs allowed under Clause 5 of Schedule 6 of the Workers Compensation Regulation 2003 occasioned by the involvement in the proceedings of additional parties …”
On 2 February 2006, the parties having failed to agree on the costs payable, the Appellant filed an ‘Application for Assessment of Costs’ with the Commission in relation to a ‘Bill of Costs’ apparently dated 24 October 2005. In the Application, the Appellant had included Bills dated 5 September 2005, 24 October 2005 and 2 December 2005. On 23 May 2006, the Commission wrote to the Appellant noting that: “It is not clear from the Application which of the bills is to be assessed.” In reply, the Appellant wrote to the Commission on 24 May 2006 advising that: “… The bill dated 24 October [2004] is the bill in which the Applicant seeks to be assessed.” Submissions were filed by the Respondent on 27 February 2006.
The Registrar delegated the Assessment of Costs to Commission Arbitrator (‘the Delegate’) who made a determination dated 5 July 2006. The ‘Certificate of Determination’ stated as follows:
“1.Pursuant to Agreement and Order dated 22 June 2005 the Respondent Employer is liable to pay the Applicant’s costs of the Application as agreed or assessed.
2.The Applicant’s costs of the proceedings assessed in the sum of $4,480.00 (inclusive of GST) are determined as fair and reasonable.
3.The Respondent is to pay the amount of $4,480.00 to the Applicant if those costs have not already been paid.”
The relevant aspects of the Delegate’s ‘Statement of Reasons’ for his decision will be dealt with below.
ON THE PAPERS REVIEW
No submissions have been made by the Appellant on this issue. The Respondent submits that the matter is suitable for a determination ‘on the papers’.
I have before me numerous Commission files in both the substantive matter and the cost dispute together with the parties’ submissions on appeal.
Having carefully read this material, I am satisfied that I have sufficient information to proceed ‘on the papers’ in accordance with the provisions of section 354 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) and Practice Direction No. 1, and that this is the appropriate course in the circumstances.
SUBMISSIONS, DISCUSSION AND FINDINGS
The only issue in dispute between the parties is the application of Clause 5 of Schedule 6 of the Workers Compensation Regulation 2003 (‘the 2003 Regulation’). That Clause is in the following terms:
“5.If more than one insurer (or any combination of insurers) is a party to a claim or a dispute or other matter in relation to a claim, the maximum costs in respect of the matter are the total of the following:
(a) The costs for the matter calculated in accordance with the Table,
(b)50% of that amount per party (other than the party who made the claim),
and payment of the costs is to be shared equally among the insurers who are parties to the matter.”
It is noted that Clause 81 of the 2003 Regulation provides that in Part 19 (costs) and Schedule 6 and 7, the term ‘insurer’ includes an employer.
The Delegate disallowed any additional sum pursuant to Clause 5 of Schedule 6 stating as follows:
“14. I have assumed that the Bill of 24 October sets out all of the work done by the Applicant’s solicitor.
15.Dunn [Dunn v Port Macquarie RSL Club Limited [2004] NSWWCCPD 33] referred to above is authority for the proposition that Clause 5 of Schedule 6 operates only to increase the maximum that a party can recover for costs in proceedings. Clause 5 does not entitle the Applicant to an automatic ‘uplift’ of costs of 50% for each additional Respondent or insurer.
16.In the Bill, the Applicant claims more than the maximum allowable for Items 2.01 and 4.0 (claimed twice). These additional costs are allowed pursuant to Clause 5.
17.In the absence of other information as [sic] any other work actually performed I am unable to allow the Applicant any further costs. Clause 5 does not entitle the Applicant’s solicitor to recover costs that were not incurred or that were not fair and reasonable. I have therefore reduced the Bill of the ‘uplift’ of $13,440.00 claimed”.
The Appellant’s submissions are summarised in the following terms:
“The Applicant submits that the work performed involves skill, labour and responsibility above that of a normal matter due to the complexity and difficulty of the matter, which arose from having multiple Respondents attached to the proceedings. The Applicant submits that the quality and quantity of work done in a limited amount of time, substantiates the claim for the uplift fee and can be evidenced by the file. The file is available to the Commission should it be necessary in order to determine a fair and reasonable amount of costs.”
In its ‘Notice of Opposition’, the Respondent submits that the Appellant has failed to provide an itemised list of extra work performed as a result of the extra parties involved. The Respondent submits that, in line with a number of authorities to which it has referred, in order for payment to be provided for any extra work as a result of multiple parties, the Appellant must “… Provide evidence of all work attended to and then this work was attended to. The Respondent notes that up until the filing of this appeal the Applicant has provided no such evidence.”
The Respondent also notes that some work was done in the Compensation Court for which payment had already been provided and further states:
“As stated in the Applicant’s submissions, on 23 May 2006 the Workers Compensation Commission requested time sheets from the Applicant in order to make a fair assessment of costs, however, the Applicant was unable to provide any evidence in this regard.”
In its letter to the Appellant’s solicitors dated 23 May 2006 to which I have referred previously, the Commission wrote as follows:
“Further, the major dispute relates to the impact of Clause 5 of Schedule 6 of the Regulations. In [Dunn] …Deputy President Fleming made it clear that Clause 5 only operates to increase the maximum amount allowable, a bill can only be for work reasonably performed on the matter.
I therefore ask that the Applicant provide details of all the work carried out on the matter (timesheets of activities would be of great assistance), so that the Costs Assessor can conclude the assessment. Please respond within 14 days of the date of this letter.”
By letter dated 24 May 2006 to the Commission, the Appellant made a number of further submissions and concluded as follows:
“We submit that this Bill remains within the constraints of Clause 5 of Schedule 6 of the Regulations and the decision of Deputy President Fleming in [Dunn] … as referred to you by you.”
The Appellant again reiterated that the “…Bill and Invoice dated 24 October 2005 is the account to be the subject of assessment.”
The Relevant Authorities
In Dunn v Port Macquarie RSL Club Limited [2004] NSWWCCPD 33 (‘Dunn’) the Appellant (the Applicant in the original proceedings) submitted that the Delegate was incorrect in his interpretation of Schedule 6 in exercising his discretion to award the Appellant only a 100% increase in costs although there were four insurers in the proceedings before the Arbitrator.
Deputy President Fleming made the following observations:
“30.The Respondent’s argument that the Registrar has no discretion in relation to an award of costs under Clause 5 must also fail. As with other provisions in Schedule 6, Clause 5 refers to ‘maximum costs’. ‘Maximum costs’ are not always incurred, nor should they be awarded in every case. An award of costs is relative to the work performed and not based upon a maximum award regardless of whether the activity or event has actually been carried out, or carried out to the full extent of the time that attracts the ‘maximum amount’ that may be awarded. The Registrar’s discretion in relation to an application to determine costs payable as a result of an order made by the Commission is contained in Clause 110 of the Regulation. This directs the Registrar to consider:
(a) whether or not it was reasonable to carry out the work to which the costs relate, and
(b) what is a fair and reasonable amount of costs for the work concerned.
33.In my view the history of this matter illustrates that it is simplistic to claim that because four insurers were joined as parties to the claim after February 2003, the Applicant Worker was put to additional work in relation to the whole of the costs claimed. The filing of the original application and evidence did not involve additional work as there was only one insurer joined at that time. To multiply the whole of the costs claimed by the Appellant pursuant to the Table, by four (pursuant to Clause 5 of Schedule 6), only because, ultimately, there were four insurers joined to the claim at the point that it was determined, is not a fair and reasonable method of assessing the costs in this matter.
34.To claim that the total of the costs claimed by the Appellant be multiplied by four also ignores the fact that, as the Registrar’s delegate notes in the reasons, the matter was not overly complicated by joining the further three insurers to the claim as each insurer was on risk for a different period, but with the same employer/Respondent.
35.In my view the Registrar has an overriding discretion to award costs in accordance with what is fair and reasonable for the work performed. When considering the application of Clause 5 of Schedule 6 of the Regulation the ramifications for the costs incurred, in joining multiple insurers, must be taken into account.
36.In this matter the Registrar’s delegate exercised his discretion to allow an additional 100% pursuant to Clause 5 of Schedule 6. He gave adequate reasons for coming to this view. There is nothing to suggest that his discretion was exercised arbitrarily or capriciously, and there are no grounds upon which it should be overturned.
37.The Arbitrator did not err in awarding costs pursuant to Clause 5 of Schedule 6 of the Regulation.”
The Appellant has also made reference to a decision of Susan Anani v South Eastern Area Health Service [2004] NSWWCC C31 (‘Anani’) submitting that:
“… Although the evidence as to what additional work was precisely occasioned by the additional parties may be unspecific, brief or vague, the Registrar still has the discretion to award an uplift fee.”
In Anani, the Delegate made the following remarks:
“17.The decision in Dunn makes it clear that Clause 5 of Schedule 6 is merely a mechanism for increasing the maximum total of an Applicant’s costs as calculated under the Table, in cases where there is more than one insurer. The multiplier merely serves to establish the ceiling for costs. An Applicant is still required to establish that additional costs have been incurred, and if so what the additional work was. Having established what the additional work was, the next step is to determine a fair and reasonable amount for that additional work, to be paid in addition to the costs calculated in accordance with the Table.
18.The evidence as to precisely what additional work was occasioned by the involvement of additional insurers was not very specific. It was of a general, generic nature, but it is reasonable to conclude that some additional time was required in considering documentation, correspondence, communications with parties and their solicitors, additional procedural steps, and additional work to prepare the matter, gather evidence, give advice and take instructions.”
19.I considered it reasonable to allow additional time by reason of the involvement of an additional party.”
In that particular case, the Delegate considered that additional work would not have exceeded two hours and determined that additional costs allowed by reason of clause 5 of Schedule 6 should be $500.00.
In the present case, it is clear from the Appellant’s ‘Bill of Costs’ that very little information has been provided in relation to any additional work occasioned by the involvement of additional parties.
In a letter to the Appellant’s solicitors dated 30 November 2005 from the Respondent, the Respondent confirmed that it was prepared to pay “Schedule 6(5)(50%) of the Commission costs up to and including the Teleconference on 20 June 2005. At that Teleconference the other insurers were let out of the proceedings.”
In a further letter to the Appellant’s solicitors dated 9 January 2006, the Respondent stated as follows:
“In respect to Schedule 6(5) my client is willing to pay a maximum of 50% loading on top of the professional fees. This allows only for four parties (as there were 4 Respondents party to the proceedings) at 12.5% per party.”
In an undated document headed “Submissions” attached to the ‘Notice of Opposition’, the Respondent said this:
“… As the employers subgrogated their rights to the insurers, in effect, there were four Respondents in this matter not six. The Respondent further submits that the amount of extra work as a result of the extra parties would have been minimal due to a great deal of duplication. The Respondent submits that 12.5% per extra party is more than fair and would thus entitle the applicant’s solicitors 50% of the professional fees on top of the total.”
Despite the lack of any details as to additional work undertaken by the Appellant, I have noted that the Commission files in relation to both the substantive proceedings and the costs assessment comprise 9 files. The files in the substantive proceedings are substantial. I am inclined to the view expressed by the Delegate in the decision of Anani that it is reasonable to conclude that additional time was required by reason only (regardless of specific details) of the involvement of the additional parties. Given the objectives of the Commission, as set out in section 367 of the 1987 Act in particular the objective: “To provide a fair and cost effective system for the resolution of disputes …” and further, “… To reduce administrative costs …” it seems to me inappropriate to require a solicitor to provide time sheets of activities unless this was a system employed by a solicitor and information readily and easily obtainable. Having said that, I am of the view that some information or evidence as to the activities undertaken as discussed by the Delegate in Anani should be provided if an applicant seeks a substantial uplift fee.
In the present case, the Appellant identified the parties to the proceedings as follows:
1.Menzies Property Services.
2. Berkeley Challenge Pty Limited
3.Government Cleaning Service.
4.Menzies Business South Pty Limited.
5.GIO Workers Compensation (on behalf of Respondents 1, 3 and 4).
6.CGU Workers Compensation (on behalf of Respondent 2).
7.Allianz Australia Insurance (on behalf of Respondent 2).
In all of the circumstances of the present case, and in line with the principles set out in Section 106 of the 2003 Regulation, and in the absence of any specific information from the Appellant as to the nature and extent of additional work undertaken, I consider that the approach submitted by the Respondent is reasonable such that I would allow a 50% ‘uplift fee’ on the total assessed by the Delegate.
SUMMARY
The Delegate’s determination is amended in accordance with my reasons stated above. In my view, the Delegate took too narrow an approach to the provision of Clause 5 of Schedule 6 requiring detailed information as to work “actually performed” in circumstances where it was clear from the extensive Commission files that certainly some additional work was required in order to properly present the Appellant’s case.
The Delegate allowed the claim by the Appellant in the Bill of Costs dated 24 October 2005 totalling $4,480.00. To that amount I would add a further 50% ($2,240.00) in line with my reasons stated above, a total of $6,720.00.
The Delegate’s assessment of $4,480.00 was expressed to be inclusive of GST. The Appellant’s bill dated 24 October 2005 did not seek GST on the costs assessed but sought GST in relation to costs claimed in accordance with Clause 5 of Schedule 6. GST is therefore allowed in the sum of $224.00 in respect of the additional costs.
DECISION
The Registrar’s determination of $4,480.00 is set aside and the sum of $6,944.00 substituted in lieu thereof.
COSTS
The Appellant has been successful on appeal, and I am of the view that it is reasonable to order that the Respondent pay the Appellant’s costs of the appeal in the sum of $385.00 inclusive of GST.
I therefore order that:
“The Respondent, Menzies Business Services Pty Limited is to pay to the Appellant, Mr Hristovski, $385.00 inclusive of GST in respect of his costs of this appeal.”
Deborah Moore
Acting Deputy President
31 January 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE