Lorkovic v Goulburn Wool Scour Pty Ltd
[2006] NSWWCCPD 185
•14 August 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Lorkovic v Goulburn Wool Scour Pty Limited [2006] NSWWCCPD 185
APPELLANT: Nicholas Lorkovic
RESPONDENT: Goulburn Wool Scour Pty Limited
INSURER:Allianz Australia Worker’s Compensation (NSW) Ltd
FILE NUMBER: WCC20415-04
DATE OF REGISTRAR’S DECISION: 13 April 2005
DATE OF APPEAL DECISION: 14 August 2006
SUBJECT MATTER OF DECISION: Costs; Investigator’s report
PRESIDENTIAL MEMBER: Acting Deputy President Julian Martin
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: A.O. Ellison & Co
ORDERS MADE ON APPEAL: 1. The decision of the Registrar dated 13 April 2005 is confirmed.
2.No order as to costs of the appeal.
BACKGROUND
On 21 January 2003 Nicholas Lorkovic (‘Mr Lorkovic’) commenced proceedings against Goulburn Wool Scour Pty Limited (‘Goulburn Wool Scour’) in the Workers Compensation Commission (‘the Commission’) seeking lump sum compensation. Liability was not in issue.
The matter was resolved between the parties during a telephone conference and a Certificate of Determination dated 17 September 2003 was issued. The Certificate noted the consent of the parties that the Respondent (‘Goulburn Wool Scour’) pay the Applicant’s (‘Mr Lorkovic’) costs as agreed or assessed.
On 30 September 2003 the agreement pursuant to section 66A of the 1987 Act was registered. This agreement included the costs order referred to above.
On 10 December 2004 Mr Lorkovic filed an Application for Assessment of Costs.
On 14 December 2004 the Registrar sent a copy of Mr Lorkovic’s Application for Assessment of Costs to Goulburn Wool Scour’s solicitor pursuant to Clause 101 of the Workers Compensation Regulations 2003 (‘the Regulations’). Goulburn Wool Scour was advised that written submissions in reply to the Application for Assessment of Costs were to be filed within 14 days and must be served on Mr Lorkovic at the same time as, or prior to, filing with the Commission.
On 14 December 2004 (mistakenly typed 14 September 2004) a letter was sent to Mr Lorkovic’s solicitor enclosing a copy of the letter sent to Goulburn Wool Scour and stating that Mr Lorkovic has 7 days from the date of service of Goulburn Wool Scour’s written submissions in reply to file and serve written submissions in reply. The letter informed Mr Lorkovic’s solicitor that costs will be determined by review of the Application for Assessment of Costs and written submissions.
On 22 December 2004 Goulburn Wool Scour’s solicitor filed written submissions in Reply.
Mr Lorkovic’s solicitor made no response to the written submissions in Reply from Goulburn Wool Scour’s solicitors and an assessment of costs was determined by the Registrar’s delegate, a Commission Arbitrator, resulting in a decision handed down on 13 April 2005.
On 6 May 2005 Mr Lorkovic lodged an appeal against the Registrar’s assessment of costs. Goulburn Wool Scour filed a Notice of Opposition to the appeal, together with written submissions on 24 May 2005.
THE REGISTRAR’S DECISION
The Registrar’s decision by her delegate, a Commission Arbitrator, made on 13 April 2005 is as follows:
“1. Pursuant to an Agreement dated 30 September 2003 the Respondent employer 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 $5,430.15.
3. The Applicant’s costs of the assessment are not allowed.
4. The Respondent is to pay the amount of $5,430.15 to the Applicant if those costs have not already been paid.”
ON THE PAPERS
Goulburn Wool Scour submit that the matter should be dealt with ‘on the papers’, whilst Mr Lorkovic is silent on this issue.
Section 354(6) of the 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.”
I have both the Commission file regarding the costs dispute and the appeal file which contains submissions on appeal from both Mr Lorkovic and Goulburn Wool Scour. In addition I have the substantive file and 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.
PRELIMINARY
Part 19 of the Regulations govern both the procedure for assessment of costs and appeals against such an assessment.
Clause 103(1) of the Regulations provides:
“(1) The Registrar must not determine an application for assessment unless the Registrar:
(a)has given both the applicant and any legal practitioner, agent, client or other person concerned a reasonable opportunity to make written submissions to the Registrar in relation to the application, and
(b)has given due consideration to any submissions so made.”
FRESH EVIDENCE
Mr Lorkovic did not respond to the Registrar’s invitation to file written submissions in reply to Goulburn Wool Scour and the Registrar proceeded to deal with the Application.
Enclosed with the submissions on appeal Mr Lorkovic has annexed copies of correspondence in support of these submissions. No explanation for those annexures is provided, but in effect it represents an attempt to introduce fresh evidence.
Clause 119 of the Regulations provides that an appeal against an assessment of costs is on a matter of law only. There is no provision for the admission of fresh evidence, unless the Presidential Member “remits its decision on the question to the Registrar and orders the Registrar to re-determine the application”. Clause 119(4) then provides:
“(4) On a re-determination of an application, fresh evidence, or evidence in addition to or in substitution for the evidence received at the original proceedings, may be given.”
Goulburn Wool Scour submit that Mr Lorkovic had the opportunity to file submissions in reply when invited by the Registrar on 14 December 2004 and should not be allowed to introduce fresh evidence at this late stage.
I agree with this submission by Goulburn Wool Scour as the annexures Mr Lorkovic seeks to rely on in his submissions are copies of correspondence, presumably part of his solicitor’s file, pre-dating the Application for Assessment of Costs and as such were available at the time when the Registrar invited Mr Lorkovic to file submissions in reply. I disallow the introduction of this fresh evidence.
SUBMISSIONS AND FINDINGS
In the Application for Assessment of Costs filed by Mr Lorkovic on 10 December 2004, total costs and disbursements claimed were $10,088.73. Goulburn Wool Scour submitted in Reply that Mr Lorkovic’s costs should be limited to the sum of $2,145.00 because the matter eventually settled for $250 more than the original offer. Goulburn Wool Scour submitted in the alternative that if this submission was rejected, Mr Lorkovic is entitled to costs in the sum of $5,315.75.
The Registrar rejected the first submission by Goulburn Wool Scour and proceeded to assess Mr Lorkovic’s costs. Goulburn Wool Scour have not appealed from this determination by the Registrar.
Item 1.01
Item 1.01 provides costs for “obtaining and reviewing medical reports” prior to “making claim for permanent impairment compensation or pain and suffering compensation”.
In the submissions annexed to the Application for Assessment of Costs, Mr Lorkovic stated that Item 1.01 was agreed at $600. Goulburn Wool Scour in their Reply disputed this sum and as I stated above Mr Lorkovic failed to file any submissions in reply. At paragraphs 23 and 24 of the Reasons for Decision the Registrar stated:
“23.The Respondent points out that prior to the issuing of proceedings the Applicant was in receipt of two reports of Dr Conrad and two reports of Dr Stubbs and therefore is entitled to only $500.00.
24.I agree that the Respondent’s submission is correct and accordingly I allow $500.00.”
In his submissions on Appeal Mr Lorkovic submits that in his bill of costs, which was annexed to his Application for Assessment of Costs, his solicitor “…had to peruse quite a number of medical reports and therefore is entitled to the full cost of $600.00.” These medical reports as set out in the bill of costs were:
16.5.01Dr Stubbs
24.5.01Dr Stubbs
30.9.02Dr Conrad
Dr Conrad – supplementary one
Dr Conrad – supplementary two
9.9.02Dr Stubbs
29.1.03Dr Stubbs
24.02.03Dr Stubbs
27.4.03 Dr Constentine
I do not see any error of law on the part of the Registrar in this determination. Mr Lorkovic made no submissions in reply to the assertions of Goulburn Wool Scour and the Registrar determined the matter on the available evidence. Mr Lorkovic further submits in the Appeal that in addition to the medical reports obtained and reviewed which are set out in the bill of costs (see paragraph 25 above) there were medical certificates and a discharge summary report from Calvary Hospital to be reviewed. This evidence was not before the Registrar when he determined the matter on 13 April 2005 and is disallowed for the reasons referred to above.
Item 1.02
Mr Lorkovic submits that he is entitled to the sum of $100.00 for “lodging a claim with the insurer if the insurer has not made an offer of settlement”. In support of this submission he submits “the Respondent confirmed in their submissions in reply that the Applicant was entitled to $100.00”.
In the Application for Assessment of Costs and the Bill of costs, Mr Lorkovic did not claim under this item and therefore the Registrar did not allow for this item in his determination. As I stated above, Goulburn Wool Scour made two alternative submissions in reply. In their first submission of $2,145.00 they did allow for Item 1.02. The Registrar rejected this submission and Goulburn Wool Scour in their second alternative submission in reply did not address Item 1.02 as Mr Lorkovic had not claimed it in either his Application for Assessment of Costs or in his Bill of costs. I see no error of law here on the Registrar’s part as no claim was made under this Item by Mr Lorkovic in the Application for Assessment of Costs.
Item 2.03
In the bill of costs annexed to the Application for Assessment of Costs, Mr Lorkovic claimed $40.00 for referring insurer’s reports to doctors. Goulburn Wool Scour in their Reply submitted this “….did not occur as the Insurer’s report was not received until 10.2.03. At paragraphs 27 and 28 of the Reasons for Decision the Registrar stated:
“27. The Respondent asserts that this attendance did not occur as the Respondent’s report was not received until 10 February 2003.
28. In the absence of any submissions in reply from the Applicant I disallow the claim for $40.00.”
Mr Lorkovic’s solicitor now seeks to introduce fresh evidence in support of his claim under this item. The fresh evidence consists of correspondence, presumably from Mr Lorkovic’s file, that pre-dates the Application for Assessment of Costs. For the reasons stated above, I disallow this fresh evidence and see no error on the part of the Registrar who correctly determined the matter on the available evidence.
Item 2.04A
Mr Lorkovic in the bill of costs sought $150 for preparing witness statements on 18 February 2003. The Registrar at paragraphs 30 and 31 of the Reasons for Decision stated:
“30. The Respondent’s solicitor asserts that no witness statements were served in the course of the proceedings.
31. In the absence of any submissions from the Applicant this claim cannot be maintained.”
Again Mr Lorkovic seeks to introduce fresh evidence consisting of correspondence that pre-dates the Application for Assessment of Costs. I disallow the fresh evidence and see no error on the part of the Registrar who correctly determined the matter on the available evidence.
Item 2.05
The bill of costs claims $100 for briefing a factual investigator on 17 January 2003. At paragraphs 32 and 33 of the Reasons for Decision the Registrar stated:
“32.The Respondent’s solicitor asserts that no factual report or witness statement was served or tendered.
33. In the absence of any submissions fro the Applicant this claim cannot be maintained.”
Mr Lorkovic seeks to introduce fresh evidence that pre-dates the Application for Assessment of Costs which is not allowed and accordingly the Registrar made the correct determination on the available evidence.
Item 4.02
Mr Lorkovic sought the sum of $60 for the “service of material re – Item 4.01(2 parties) on 31.01.03.” At paragraph 36 of the Reasons for Decision the Registrar stated:
“36. The Respondent’s asserts that only the employer was served with the Application and in the absence of any evidence to the contrary this amount is reduced to $40.00.”
Mr Lorkovic seeks to introduce fresh evidence that pre-dates the Application for Assessment of Costs which is disallowed. There is no error here as the Registrar made the correct determination on the available evidence.
Item 4.07
In the Application for Assessment of Costs Mr Lorkovic sought the sum of $100 for referring the matter to an Approved Medical Specialist on 2 June 2003. Goulburn Wool Scour in their submissions in Reply pointed out that the referral took place during the course of a teleconference on 2 June 2003 and accordingly the Registrar did not allow this cost.
Mr Lorkovic’s solicitor submits that he is entitled to the cost, because he received the notice of the referral from the Commission and then notified Mr Lorkovic of the appointment and claimed his travelling expenses to attend. Additionally Mr Lorkovic’s solicitor received the report from the Approved Medical Specialist. As Deputy President Fleming stated in Berger’s case “…the activity must in fact be undertaken by the legal representative in order to claim the cost”. I see no error of law on the part of the Registrar as the additional activity that Mr Lorkovic’s solicitor refers to occurred within Item 4.09 and “…is encompassed in the costs awarded for that Item.” (Berger v Moree Plains Shire Council [2005] NSWWCCPD152 (‘Berger’s case’)).
Item 4.08
This Item allows $250 per hour for preparing for a conference (including providing advice to client). The maximum sum allowed is $500. Mr Lorkovic’s solicitor in the Application for Assessment of Costs claimed $500 for preparing for the first teleconference on 2 June 2003. A further claim for $500 was then made for preparing for the second teleconference on 11 September 2003 (incorrectly claimed as 3 September 2003). In their submissions in Reply Goulburn Wool Scour submitted that this was a simple medical assessment in respect of one frank injury where liability was not in issue. Goulburn Wool Scour further submitted that a two-hour conference had already been allowed at the initial instructions and they (Goulburn Wool Scour) had served only one medical report in the proceedings. In regards to the second teleconference Goulburn Wool Scour submitted that this took place just over three months later and the only subsequent issue was the Approved Medical Specialist assessment.
In the absence of any submissions in Reply by Mr Lorkovic’s solicitor, the Registrar allowed the total sum of $500 for preparing for the two teleconferences. The assessment of Item 4.08 is a matter of discretion for the Registrar’s delegate. As Deputy President Fleming said in Nebauer v Hunter Area Health Service [2004] NSWWCCPD60 (‘Nebauer’s case’):
“This is clearly a matter for the Delegate’s discretion. Only where the discretion can be said to have miscarried because it has been exercised unfairly and unlawfully, taking into account the scope of the discretion, and the objects or purpose for which it is conferred, would it be an error of law (Swan Hill Corporation v Bradbury (1937) 56 CLR 746 at 758; R v Australian Broadcasting Tribunal; ex p 2HD Pty Ltd (1979) 144 CLR 45 at 49; Sheridan v David Anthony Clarke t/as Freestyle Marine Sports [2003] NSWWCCPD9).”
In so far as the first teleconference is concerned I see no error on the part of the Registrar in the exercise of his discretion, as the claim was for lump sum compensation alone where liability was not in issue and involved one frank injury alone. I also note that a two-hour conference with Mr Lorkovic had been allowed in respect of the initial instructions.
Mr Lorkovic’s submissions on Appeal in regard to the second teleconference also included a submission that his solicitor spent two hours in preparation for this teleconference. Again I see no error on the part of the Registrar as this conference took place a little over three months after the first teleconference and only involved the additional component of the Approved Medical Specialist assessment.
Mr Lorkovic makes a further submission in relation to Item 4.08. He submits that in accordance with Schedule 6 Rule 2(3)[sic] of the Regulations, his solicitor “…when commencing this claim, could not have foreseen that a 2nd telephone conference would have been required in this matter” and therefore the sum of $1,000.00 is claimed in respect of the two telephone conferences.
As I stated above the maximum amount allowed under Item 4.08 is $500.00. The further submission relying on Clause 2(3) of Schedule 6 of the Regulations “…involves the exercise of discretion and requires the Registrar to turn his or her mind to the relevant considerations in the particular matter” (Berger’s case). Clause 2(1) of Schedule 6 states:
“(1) In the event that more than one claim is made in respect of a particular injury, or more than one dispute arises in respect of a claim, the maximum total costs for a type of activity or event in respect of the injury, regardless of how many times the activity or event is carried out, is the maximum set out in Column 4 of the table in relation to that type of activity or event.”
Clause 2(3) of Schedule 6 states:
“(3) The Registrar may, on application, order that subclause (1) does not apply to costs incurred in respect of a claim or dispute if satisfied that the need for the costs to be incurred could not have been foreseen at the time that costs for the type of activity or event concerned were first incurred in connection with the injury.”
As I have confirmed the Registrar’s assessment of the maximum amount of $500 for Item 4.08, there is no need for me to consider this further submission based on Clause 2(3) of Schedule 6 of the Regulations.
Private Investigator’s Report
In the Application for Assessment of Costs, Mr Lorkovic’s solicitor sought the sum of $3,593.23 as a disbursement to cover the cost of a Private Investigator’s Report. In his submissions annexed to the Appeal he asserted that it would be inequitable if an insurer was able to recover the costs of an investigator’s report but an Applicant was not able to do so. Goulburn Wool Scour in their submissions in Reply to the Assessment of Costs asserted that no such investigator’s report had been served, lodged with the Commission or relied on by the Applicant in these proceedings. At paragraph 55 of the Reasons for Decision the Registrar stated:
“55. It is of serious concern that the Applicant has not sought to disagree with the Respondent’s assertion that no such investigation report has been served, lodged with the Commission or relied on by the Applicant in these proceedings.”
The Registrar disallowed this disbursement and stated at paragraph 58:
“58. The Respondent’s solicitor points out that there was no dispute as to liability and in the absence of any reasons as to the nature of the investigation and why it was not served, this amount is disallowed.”
I have looked through the substantive file and no Private Investigator’s Report was annexed to the Application to Resolve a Dispute or filed later in the proceedings. Mr Lorkovic’s solicitor in his submissions on Appeal has annexed a copy of “Factual and Liability Summary Report dated 19.3.2003 by St George Registration & Investigation Services Pty Limited”. For the reasons stated above I disallow this fresh evidence.
When considering the private investigator’s report, the Registrar in the Reasons for Decision correctly stated that investigation costs “…are not regulated pursuant to Regulation 82(b)” of the Regulations, however, he then proceeded to (by her delegate a Commission Arbitrator) consider the costs pursuant to “Section [sic] 105 of the Regulations.”
Clause 82 of the Regulations excludes certain costs, including investigator’s reports and witness statements or other evidence obtained by investigators, from Part 19 of the Regulations. These items must be assessed in accordance with the Legal Profession Act 2004 (‘the LP Act’) and the Legal Profession Regulation 2005 (‘the LP Regulation’) (Berger’s case).
It was an error of law in purporting to assess the costs of the investigation report pursuant to Clause 105 of the Regulations. As stated above, these items must be assessed in accordance with the LP Act and the LP Regulations. As Deputy President Fleming stated in Berger’s case:
“The correct test is whether the disbursement was ‘reasonably incurred or was reasonable in amount’ and whether the total amount allowed was a ‘fair and reasonable’ amount in relation to the value of the service provided.”
There being an error of law, in accordance with Clause 119 of the Regulations, I am entitled to make such determination in relation to the application, as in my opinion, should have been made by the Registrar.
As I stated above liability was not disputed in the substantive proceedings, the only issue being the degree of impairment/loss. There was no need for an investigator to make general enquiries into the circumstances of the injury and prepare a factual liability summary. There was no explanation from Mr Lorkovic’s solicitor as to the substance of the Private Investigator’s Report and why it was not served and accordingly I disallow this disbursement.
In his submissions on Appeal, Mr Lorkovic submits that the “Respondent whom has the wealth of the workers compensation insurance company and who is reimbursed by the very wealth [sic] WorkCover Authority of NSW, can request factual investigations which they can use to the detriment of injured workers, when they file that document with their Reply.” Mr Lorkovic supports this submission by reference to several cases where insurers had outlaid substantial amounts on investigations.
The test is essentially one of reasonableness (Berger’s case) having regard to the circumstances of these proceedings and an insurer’s conduct in another claim is not relevant to my determination in this case.
Mr Lorkovic further submits that “the costs of the private investigator are not subject to the Legal Professional Act 1987 [sic] because they are not legally qualified and the Legal Professional Act 1987 [sic] only applies to the legal professionals”. Presumably this is a general submission as the Registrar in the Reasons for Decision made no reference to the Legal Profession Act 2004. Nonetheless legal costs are defined in the LP Act as:
“Legal costs means amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services including disbursements but not including interest.”
In Berger’s case Deputy President Fleming stated:
“Clause 113 of the LP Regulation, applies to the assessment of costs for” fees for investigator’s reports or other material produced or obtained by investigators (such as witness statements or other evidence).
Travelling Expenses
In the Application for Assessment of Costs no travelling expenses were sought and the matter was not canvassed by Goulburn Wool Scour in their submissions in Reply. Accordingly the Registrar made no allowance for this disbursement. In his submissions on Appeal Mr Lorkovic’s solicitor now claims travelling expenses in the total sum of $647.00 and submits that Goulburn Wool Scour did not dispute them. There is no error of law in regard to this disbursement as there was no submission for the Registrar to determine.
DECISION
Although there was an error of law identified in the Registrar’s determination of the Private Investigator’s Report, the final assessment has remained the same. Accordingly the decision of the Registrar dated 13 April 2005 is confirmed.
COSTS
I make no order as to the costs of the appeal.
Julian Martin
Acting Deputy President
14 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JULIAN MARTIN, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
1
3
0