Hunter Wholesale Confectioners Pty Ltd v Moylan

[2006] NSWWCCPD 323

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS

CITATION:Hunter Wholesale Confectioners Pty Ltd v Moylan [2006] NSWWCCPD 323

APPELLANT:  Hunter Wholesale Confectioners Pty Ltd

RESPONDENT:  Richard Moylan

INSURER:CGU Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC6303-06

DATE OF REGISTRAR’S DECISION:             4 August 2006

DATE OF APPEAL DECISION:  28 November 2006

SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: claims under Items 2.01, 2.06, 4.05, 4.07, 4.08, 4.09, and 10.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003; effect of clause 125(3) of the 2003 Regulation

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: Sparke Helmore Lawyers

Respondent: Attwood Marshall Lawyers

ORDERS MADE ON APPEAL:  The Registrar’s determination of Mr Moylan’s claim for costs in this matter, dated 4 August 2006, is amended in accordance with these reasons.

There is no order as to the costs of this appeal.

BACKGROUND TO THE APPEAL

1. On 10 August 2006, Hunter Wholesale Confectioners Pty Ltd (‘Hunter’) filed an appeal against a costs determination made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 4 August 2006. Hunter’s workers compensation insurer is CGU Workers Compensation (NSW) Ltd (‘CGU’). Hunter filed further submissions on 17 August 2006. The Respondent to the appeal is Richard Moylan. On 31 August 2006, Mr Moylan’s solicitors filed a ‘Notice of Opposition’ to the appeal.

1. Mr Moylan was born on 28 September 1961 and is aged 45. On 20 September 2004, the Commission registered Mr Moylan’s ‘Application to Resolve a Dispute’ in respect of his claim for medical expenses and compensation for permanent impairment and pain and suffering. Mr Moylan claimed to have injured his back and legs when unloading cartons of cordial on 30 December 2003 while working as a truck driver with Hunter. An Approved Medical Specialist (‘AMS’) assessed Mr Moylan as having an 8% whole person impairment of the lumbar spine of which 4% was attributable to his employment with Hunter. Mr Moylan appealed against the assessment to a Medical Appeal Panel who, on 24 February 2006, confirmed the assessment.

1. On 20 March 2006, the Registrar decided to determine the matter on the papers and the Commission issued a Certificate of Determination in the following terms:

“In accordance with the medical assessment certificate issued under section 325 of the Workplace Injury Management and Workers Compensation Act 1998, the Commission determines:

1. That the Respondent pay the Applicant, as lump sum compensation under section 66 of the Workers Compensation Act 1987, $5,000 in respect of 4% permanent impairment assessed as a percentage of whole person impairment, attributable to the date of injury of 30 December 2003.

2. That the Respondent pay the Applicant’s costs as agreed or assessed.”

1. On 24 April 2006, the parties having failed to agree on the costs payable, Mr Moylan’s solicitors lodged an ‘Application for Assessment of Costs’ with the Commission in respect of their Bill of Costs dated 22 March 2006. On 17 May 2006, Hunter filed its response and, on 24 May 2006, Mr Moylan’s solicitors filed their further submissions.

1. The Registrar delegated the assessment of costs to a Commission Arbitrator (‘the Delegate’) who made a determination dated 4 August 2006. The Certificate of Determination stated:

“1. Pursuant to Agreement and Order dated 20 March 2006 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 $7,164.22 (inclusive of GST) are determined as fair and reasonable.
3. The Applicant’s costs of the assessment (inclusive of GST) are allowed in an amount of $605.00.
4. The Respondent is to pay the amount of $7,769.22 to the Applicant if those costs have not already been paid.”

1. The relevant parts of the Delegate’s Statement of Reasons for his decision are referred to below.

ISSUES IN DISPUTE

1. Hunter submits the Delegate made errors of law in relation to his assessment of Mr Moylan’s solicitors’ professional costs claimed under the following Items: 2.01, 2.06, 4.05, 4.07, 4.08, 4.09 and 10.01.

ON THE PAPERS REVIEW

1. 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.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents before me, and the submission by Hunter that the matter can be heard ‘on the papers’, Mr Moylan’s solicitors having made no 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. 

1. No application to adduce fresh evidence was made.

SUBMISSIONS, DISCUSSION AND FINDINGS

1. The relevant legislation concerning appeals to the Commission against an assessment of costs, set out in the 1998 Act and the Workers Compensation Regulation 2003 (‘the 2003 Regulation’), was discussed by Deputy President Fleming in Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 (‘Berger’). I note, in particular, that clause 119(1) of the 2003 Regulation limits the grounds on which an appeal may be made against the decision of the Registrar on an assessment of costs “to a matter of law” arising in the proceedings to determine the costs application. Where the exercise of the Registrar’s or her delegate’s discretion in determining what is fair and reasonable is challenged, only where that discretion has miscarried because it has been exercised unfairly or unlawfully would this constitute an error of law: Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60, at paragraph 19 (‘Nebauer’); Berger, at paragraph 136.

1. 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.

1. Hunter’s principal submission is that because the claim resolved in February 2006, the increased rates set out in the Table, which were effective from the date of gazettal on 17 March 2006, do not apply in relation to Mr Moylan’s solicitors’ costs. The increased rates only apply if an activity/event was undertaken on or after 17 March 2006: Neville Cowling v Southside Tiles & Lights (matter no WCC 6994-06). The Delegate therefore made an error of law by applying the increased rates.

1. Mr Moylan’s solicitors submit the Delegate must apply the costs scale available to him at the date of conducting the assessment process. The Commission’s Certificate of Determination was dated 20 March 2006, and Mr Moylan’s solicitors’ Bill of Costs was served on Hunter on 22 March 2006, after the commencement of the amendment to the 2003 Regulation on 17 March 2006, which increased the maximum costs payable under Table 6. It is immaterial when the work was performed.

1. In my view, the ordinary plain meaning of clause 125(3) of the 2003 Regulation clearly resolves the principal issue in dispute. Clause 125(3) states:

“(3) An amendment of Schedule 6 applies only to an activity or event carried out or occurring wholly after the commencement of the amendment.”

As stated by the Arbitrator in Neville Cowling v Southside Tiles & Lights (matter no WCC 6994-06), the amendment to the 2003 Regulation increasing the maximum costs permitted for various Items in the Table was made by the Workers Compensation (Costs in Compensation Matters) Regulation 2006 (‘the 2006 Regulation’), which was gazetted and took effect on 17 March 2006. Thus, applying clause 125(3) of the 2003 Regulation, the increased maximum costs can only be claimed in respect of activities or events carried out or occurring on or after 17 March 2006.

1. Hunter also makes other submissions in relation to particular Items. These submissions and those of Mr Moylan’s solicitors are discussed below.

Item 2.01

1. Item 2.01 is described in column 2 of the Table as “Obtaining instructions from client”. The Arbitrator allowed the increased maximum rate of $550.00 under this Item. Hunter submits the maximum allowable at the time the activity or event occurred was $500, which was the amount originally claimed by Mr Moylan’s solicitors. Thus, no more than $500 should be allowed.

1. In my view, Mr Moylan’s solicitors clearly obtained instructions from their client long before the amending 2006 Regulation was gazetted and took effect. The maximum that can be allowed under this Item is therefore $500 rather than the $550 allowed by the Delegate.

Item 2.06

1. Item 2.06 is described in column 2 of the Table as “Requesting a review of the claim from the insurer ...”. The Arbitrator allowed the increased maximum rate of $137.50 under this Item. Hunter submits the maximum allowable at the time the activity was undertaken was $125, which was the amount originally claimed by Mr Moylan’s solicitors. Thus, no more than $125 should be allowed.

1. Again, this activity was undertaken before the 2006 Regulation took effect. The maximum that can be allowed under this Item is therefore $125 rather than the $137.50 allowed by the Delegate.

Item 4.05

1. Item 4.05 is described in column 2 of the Table as “Reviewing documentation produced under a direction of the Commission ...”. The Arbitrator allowed the increased maximum rate of $550 under this Item. Hunter submits the maximum allowable at the time the activity was undertaken was $500, which was the amount originally claimed by Mr Moylan’s solicitors. Thus, no more than $500 should be allowed.

1. Again, this activity was undertaken before the 2006 Regulation took effect. The maximum that can be allowed under this Item is therefore $500 rather than the $550 allowed by the Delegate.

Item 4.07

1. Item 4.07 is described in column 2 of the Table as “Applying to refer a matter to an approved medical specialist, or responding to such an application ...”. The Arbitrator allowed $100 under this Item. Hunter submits the Arbitrator did not address this issue although clearly in issue. It submits, relying on the decision in Berger, that this Item is not claimable where a referral to an AMS is made during a teleconference as Item 4.07 is effectively subsumed into Item 4.09 (“Attending and participating in a conference with an Arbitrator...”). In Berger, at paragraph 108, Deputy President Fleming said:

“The first point to make about Item 4.07 is that the activity it describes must in fact be undertaken by the legal representative in order to claim the cost. When an application to refer a matter to an AMS is made in the course of a telephone conference, without any evidence of other activity by the legal representative, then Item 4.07 is effectively subsumed into Item 4.09. It is not intended that Item 4.07 be claimable regardless of whether the discrete activity it describes was carried out or not.”

1. Mr Moylan’s solicitors state that in their further submissions to the Arbitrator on the assessment of costs dated 19 May 2006, they pointed to their application to the Commission for nomination of an AMS on 2 September 2004, having previously written to the CGU proposing three AMSs for assessment of Mr Moylan’s condition (letter dated 26 August 2004). In my view, they have provided sufficient evidence to support their claim, and the Delegate’s decision to allow their claim for $100 under this Item is therefore confirmed.

Item 4.08

1. Item 4.08 is described in column 2 of the Table as “Preparing for a conference (including providing advice to client)”. Mr Moylan’s solicitors claimed $550 for two hours preparation for a teleconference on 10 January 2005. The Arbitrator allowed the increased maximum rate of $550 under this Item. Hunter submits the maximum allowable at the time the activity was undertaken was $500, which was the amount originally claimed by Mr Moylan’s solicitors. Thus, no more than $500 should be allowed.

1. Again, this activity was undertaken before the 2006 Regulation took effect. The maximum that can be allowed under this Item is therefore $500 rather than the $550 allowed by the Delegate.

Item 4.09

1. Item 4.09 is described in column 2 of the Table as “Attending and participating in a conference with an Arbitrator ...”. From 17 March 2006 the maximum hourly rate was increased from $250 to $275 per hour. Mr Moylan’s solicitors claimed $137.50 for participating in a 20 minute a teleconference on 27 January 2005. The Arbitrator allowed this amount. Hunter submits the maximum allowable for the teleconference, which was of 22 minutes duration, at the time the activity was undertaken, was $125, and no more than $125 should be allowed.

2. Again, this activity was undertaken before the 2006 Regulation took effect. The maximum that can be allowed under this Item is therefore $250 per hour rather than $275. In my view, the sum allowed should be reduced to $125.

Item 10.01

1. Item 10.01 is described in column 2 of the Table as “All work associated with instructing an agent to act on the claim or a matter relating to the claim”. The Arbitrator allowed Mr Moylan’s solicitors’ claim of $206.25 for “City agent to inspect and photocopying documents”, stating: “It is reasonable for the solicitors who are in Coolangatta to use agents to attend the Workers Compensation Commission to inspect documents.”

1. Hunter submits Mr Moylan’s solicitors are not entitled to recover costs under this Item because the costs of inspecting, photocopying or claiming privilege over documents is absorbed by Item 4.05: Dunn v Port Macquarie RSL Club Ltd [2004] NSWWCCPD 33 (‘Dunn’); McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’). Mr Moylan’s solicitors referred to two arbitral decisions to support a claim under this Item where the solicitors are in Queensland.

1. I note that Mr Moylan’s solicitors have claimed the maximum amount permitted under Item 4.05 (see above). In Dunn, at paragraph 41, Deputy President Fleming held 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.

1. Pursuant to these decisions, in my view the Delegate’s decision was incorrect and the claim under this Item should have been disallowed.

Summary

1. The outcome of my review of the Delegate’s decision is as follows:

• Item 2.01: the Delegate should have allowed $500 rather than $550.
• Item 2.06: the Delegate should have allowed $125 rather than $137.50.
• Item 4.05: the Delegate should have allowed $500 rather than $550.
• Item 4.07: the Delegate’s decision to allow $100 is confirmed.
• Item 4.08: the Delegate should have allowed $500 rather than $550.
• Item 4.09: the Delegate should have allowed $125 rather than $137.50.
• Item 10.01: the claim for $206.25 should have been disallowed.

1. The Delegate’s determination of $7,769.22 should therefore be reduced by $419.37 ($381.25 plus $38.12 GST) to $7,349.85.

DECISION

1. The Registrar’s determination of Mr Moylan’s claim for costs in this matter, dated 4 August 2006, is amended in accordance with these reasons.

COSTS

1. There is no order as to the costs of this appeal.

Robin Handley

Acting Deputy President  

28 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