McManus v Gosford City Council

[2004] NSWWCCPD 61

WORKERS COMPENSATION COMMISSION

APPEAL FROM REGISTRAR’S DETERMINATION ON COSTS

CITATION:McManus v Gosford City Council [2004] NSW WCC PD 61

APPELLANT:  Clint McManus

RESPONDENT:  Gosford City Council

FILE NUMBER:  WCC4169-2004

DATE OF REGISTRAR’S DECISION:               17 May 2004

DATE OF APPEAL DECISION:  1 September 2004

SUBJECT MATTER OF DECISION: Investigator fees, Attendance fees of agents, Clause 82, Items 4.12, 10.01 of Schedule 6 of the Workers Compensation Regulation 2003.

PRESIDENTIAL MEMBER:  Dr Gabriel Fleming

HEARING:On the papers

REPRESENTATION:  Appellant:  Whitelaw McDonald Solicitors & Attorneys

Respondent:  Hunt & Hunt Lawyers

ORDERS MADE ON APPEAL:  The assessment of the Registrar is amended in accordance with these reasons.

THE APPEAL

1. On 9 June 2004 Clint McManus (‘the Appellant/Mr McManus’) sought leave to bring an ‘Appeal from Registrar’s Determination on Costs’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 17 May 2004.

1. The Respondent to the Appeal is Gosford City Council (‘the Respondent’) who is a self-insurer, for the purposes of the appeal.

1. The Registrar delegated the assessment of costs to an Arbitrator pursuant to section 371(2) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). The Certificate of Determination of Applicant’s Costs, dated 17 May 2004, records the Registrar’s orders as follows:

“By agreement the Respondent employer is liable to pay the Applicant’s costs of the Application as agreed or assessed.

Assessment

The costs are assessed as follows:

1.   The Applicant’s costs of the proceedings are assessed at $3,993.00

2.   The Applicant’s costs of the Assessment are assessed at $Nil 

Determination

It is further determined that:

3.The Respondent is to pay the amount of $3,993.00 to the Applicant if those costs have not already been paid.”

1. The appeal was referred to me on 23 August 2004.

1. I am satisfied that I have sufficient information to determine the appeal ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances (section 354(6) of the 1998 Act).

ISSUES IN DISPUTE

1. The Appellant (the Applicant in the original proceedings) submits that the Registrar’s Delegate (‘the Delegate’) was incorrect in his interpretation and findings of various items in Part 2A of Schedule 6 of the Workers Compensation Regulation 2003 (‘the Regulation’). The Arbitrator’s reasons for decision were issued with the costs assessment. On the issues relevant to this appeal the Delegate found:

Item	Amount Claimed	Amount by which the bill should be reduced	Reasons
2.01	$500.00	$0	It is reasonable that the Applicant spent 2 hours taking instructions. I disallow the cost for the investigators report (see below). 2 hours is a reasonable time to take instructions which includes the time spent obtaining a statement.
2.05	$100.00	$100.00	I find below that the investigators account is not a disbursement and disallow it. It follows that the costs of obtaining the report are also not allowed.
4.12	$570.00	$380.00	The maximum allowed in the Schedule for this type of activity is $190.00. In any event the regulation requires the activity to take place before an item is allowed and it is absurd to suggest that there were 3 reports to the client about the activities that occurred on that day.
10.01	$250.00	$250.00	The Applicant claims and the Respondent allows the maximum allowable under the table for item 4.05. This is the task that the agent was being instructed to perform. This item is therefore not allowed. See below for further reasons.
Agents Fees Kerry Nicholson	$132.00	$132.00	This is the fee for this firm to attend and inspect documents produced on Direction. I believe that in the circumstances the firm is acting as the agent of the solicitors and therefore the Applicant in the proceedings for that purpose. Most of the fees are likely to be for photocopying. Photocopying is not allowed under the rules and the Applicant cannot claim a disbursement that is otherwise not allowed by calling it agents fees. The Applicant is therefore entitled to recover the cost of inspection and reviewing documents under Item 4.0. The job that the firm was doing was part of item 4.05. I do not think that the Regulation can be interpreted to allow the costs of review of documents produced to be claimed twice, once by the solicitor and again by an agent engaged to attend and even copy the documents. As the Applicant has claimed the maximum amount under Item 4.05 they should not be allowed the agents fees also.

1. The Appellant argues that the Delegate:

●Erred in finding that the investigator’s fee did not constitute an allowable disbursement (‘Investigator’s Fees’).

●Erred in finding that the maximum amount permissible under item 4.12 of Schedule 6 cannot be exceeded where separate solicitor’s advices were prepared following a teleconference phase, a conciliation phase and an arbitration phase (‘Item 4.12’).

●Erred in disallowing the amount permissible for a solicitor to engage an agent to attend and inspect documents at the Commission pursuant to item 10.01 of Schedule 6 (‘Item 10.01’).

●Failed to adequately address the Appellant’s detailed submissions in respect of the Cost Assessment process (‘Reasons’).

1. The Respondent submits that the decision of the Delegate should be confirmed.

JURISDICTION

1. Part 19 of the Regulation (made pursuant to section 347 of the 1998 Act) provides for the determination of ‘costs’ in matters before the Commission. The process for the assessment of costs, by the Registrar, is set out at Division 4 of Part 19. Subdivision 5 of Division 4, Clause 119 provides as follows:

   “119Appeal against decision of Registrar as to matter of law

   (1)A party to an application who is dissatisfied with a decision of the Registrar as to a matter of law arising in the proceedings to determine the application may, in accordance with the Rules of the Commission, appeal to the Commission constituted by a Presidential member against the decision.

   (2)The appeal is to be in the form approved by the Commission and be accompanied by the fee approved by the Commission from time to time.

   (3)After deciding the question the subject of the appeal, the Commission constituted by a Presidential member may, unless it affirms the Registrar’s decision:

   (a)make such determination in relation to the application as, in its opinion should have been made by the Registrar, or

   (b)remit its decision on the question to the Registrar and order the Registrar to re-determine the application.

   (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.”

THE RELEVANT LAW

1. Clause 82 of the Regulation prescribes the costs that are not regulated by Part 19, as follows:

“82Costs not regulated by this Part

Costs referred to in this Part do not include any of the following:

(a)costs for legal services provided for an appeal under section 353 (Appeal against decision of Commission constituted by Presidential member) of the 1998 Act,

(b)fees for investigators’ reports or for other material produced or obtained by investigators (such as witness statements or other evidence),

(c)fees for accident reconstruction reports,

(d)fees for accountants’ reports,

(e)fees for reports from health service providers,

(f)fees for other professional reports relating to treatment or rehabilitation (for example, architects’ reports concerning house modifications),

(g)fees for interpreter or translation services,

(h)fees imposed by a court or the Commission,

(i)travel costs and expenses of the claimant in the matter for attendance at medical examinations, a court or the Commission,

(j)witness expenses at a court or the Commission.

1. Clause 105 and Clause 106 of the Regulation directs the Registrar as to how an assessment of costs is to be made. These clauses provide as follows:

“105 Assessment of bills generally

(1)   When considering an application relating to a bill of costs, the Registrar must consider:

(a)whether or not it was reasonable to carry out the work to which the costs relate, and

(b)whether or not the work was carried out in a reasonable manner, and

(c)the fairness and reasonableness of the amount of the costs in relation to that work.

(2)   The Registrar is to determine the application by confirming the bill of costs or, if the Registrar is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in his or her opinion, is a fair and reasonable amount.

(3)   Any amount substituted for the amount of the costs may include an allowance for any fee paid or payable for the application by the applicant.

(4) If a legal practitioner is liable under section 182(3) of the Legal Profession Act 1987 to pay the costs of the costs assessment (including the costs of the Registrar), the Registrar is to determine the amount of those costs. The costs incurred by the client are to be deducted from the amount payable under the bill of costs and the costs of the Registrar are to be paid to the Commission.

(5)   The Registrar may not determine that any part of a bill of costs that is not the subject of an application is unfair or unreasonable.

“106 Additional matters to be considered in assessing bills of costs

In assessing what is a fair and reasonable amount of costs, the Registrar may have regard to any or all of the following matters:

(a)   whether the legal practitioner or agent complied with any relevant regulation, barristers rule, solicitors rule or joint rule,

(b) in the case of a legal practitioner—whether the legal practitioner disclosed the basis of the costs or an estimate of the costs under Division 2 of Part 11 of the Legal Profession Act 1987 and any disclosures made,

(c)   any relevant costs agreement (subject to clause 107),

(d)  the skill, labour and responsibility displayed on the part of the legal practitioner or agent responsible for the matter,

(e)   the instructions and whether the work done was within the scope of the instructions,

(f)   the complexity, novelty or difficulty of the matter,

(g)   the quality of the work done,

(h)   the place where and circumstances in which the legal services were provided,

(i)    the time within which the work was required to be done.

1. The Items relevant to this appeal are listed in the Compensation Costs Table found in Schedule 6 Maximum costs – compensation matters, which provides as follows:

Column 1 Item No	Column 2 Activity or Event	Column 3 Maximum amount for individual activity/event	Column 4 Maximum total for type of activity/event
2.01	Obtaining instruction from client	$250 per hour	$500
2.04A	Where a claim cannot be brought without a witness statement, preparing witness statements	$100	$100
2.05	Briefing a factual investigator or other investigator to obtain evidence other than witness statements (not including the investigator’s fee)	$100	$100
4.12	Reporting to the client on the outcome of a conference or arbitration (including finalising the applicant’s matter with the Health Insurance Commission or Centrelink (or both))	$190	$190

SUBMISSIONS

The Appellant

1. The Appellant submits that Part 19 Clause 82 of the Regulation deals with costs that are not regulated by Schedule 6. More specifically, the Appellant contends that Clause 82B “places no limits on fees for Investigator’s reports or for other material produced or obtained by Investigators such as witness statements or other evidence”. On this basis, the Appellant submits that the investigator’s fee should be an allowable disbursement.

1. The Appellant submits that the Delegate’s determination with respect to item 4.12 of Schedule 6 is incorrect. The Appellant refers to the decision of the Court of Appeal in Orellana-Fuentes v Standard Knitting Mill Pty Limited [2003] NSW CA 146 (20 June 2003) and maintains that the Appellant is entitled to provide the worker with advice “at the end of the initial telephone conference, the end of the Conciliation phase and at the end of the Arbitration phase”.

1. In relation to the recovery of agents’ fees pursuant to item 10.01 of Schedule 6, the Appellant submits that an attendance by an agent before the Commission to inspect documents produced under direction constitutes a “representation before the Commission”. Furthermore, the Appellant contends that disallowing these fees would be discriminatory against firms that are located outside the Sydney CBD as they would be unable to recover the costs for engaging agents for document inspection before the Commission.

The Respondent

1. The Respondent argues that Part 19 Clause 82 of the Regulation must be read in conjunction with Division 2 and Schedule 6. In the present case, the Respondent submits that the purpose for which the Appellant qualified an investigator was the provision of a witness statement. It is submitted that item 2.05 of Schedule 6 expressly prohibits the recovery of fees for briefing an investigator to take witness statements. The Respondent submits that the recovery of such costs is provided for pursuant to item 2.04A of Schedule 6.

1. In relation to item 4.12, the Respondent refers to Clause 105 of the Regulation and submits that the costs of more than one report are not reasonably incurred and that the Delegate exercised his discretion appropriately in the circumstances of the present case.

1. The Respondent submits that the issue of agent attendance fees has been sufficiently canvassed in the decision of Dunn v Port Macquarie RSL Club Limited [2004] NSW WCC PD 33. Essentially, the Respondent argues that “the Registrar’s Delegate in this matter has not erred in determining that the item 4.05 fee of $500 covers any attendance at the Commission whether by the solicitor themselves, or by an agent, to obtain copies of the documents produced”. It follows that to allow the Appellant for an additional amount under item 10.01 would be to allow the Appellant to claim the work done under item 4.05 twice.

DISCUSSION AND FINDINGS

Investigator Fees

1. Clause 82 provides that an ‘investigator’s report’ is not an item that is regulated by Part 19 of the Regulations. That is not to say that it is not an allowable disbursement and to this extent the Arbitrator erred.

1. It will be a matter for the Registrar, or her delegate, to determine whether a disputed amount of costs claimed for such a report is fair and reasonable in the circumstances of the particular case, pursuant to Clause 105 and 106. This is clearly a matter of discretion. Only where the discretion can be said to have miscarried because it was 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] NSW WCC PD 9). I do not accept that the Delegate erred in exercising his discretion to disallow the cost of the report.

1. 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” which provides for a maximum total of $500, as was allowed by the Delegate in this matter.  The Delegate specifically considered that this amount was fair and reasonable to allow for the time spent in obtaining a statement from the worker.

Item 4.12

1. Item 4.12 provides that the maximum amount that may be claimed for this activity is $190.  The Appellant has claimed this amount three times over on the basis that the task was repeated after the telephone conference, conciliation and arbitration.

1. The Court of Appeal decision in Orellana Fuentes v Standard Knitting Mill Pty Limited & Anor; Carey v Blasdom Pty Limited T/as Ascot Freight Lines & Anor [2003] NSW CA 146  (‘Fuentes’) is the only authority that has considered the Compensation Costs Table in the Regulations.  However the challenge in Fuentes was to the constitutional validity of Sections 248(1) and 337(1) of the 1998 Act. The Appellant argued that they were constitutionally invalid and that Item 4.11 of Schedule 6 of the Regulations was ultra vires the Regulation making power contained in section 337 of the 1998 Act. The Court rejected both submissions.

1. In Fuentes, Ipp JA took the view, obiter, that a party could recover $190 (the maximum cost recoverable for the event), by reporting back to a client after a conference and an additional $190 could be claimed for reporting to the client after the arbitration. However, Justice Ipp also noted that “[b]y reason of the lack of certainty in the information so given to the Court it is necessary to construe Sch 6 substantially by reference to its own terms, and not by reference to any longstanding or accepted practice adopted in proceedings before the Commission”. The construction of 4.12 given by the Court in Fuentes, turned on the specific words of 4.12, in particular, ‘conference or arbitration’. 

1. The Commission has issued a ‘Guideline for the Practice of Conciliation/Arbitration’ (‘the Guideline’) to assist Arbitrators, parties and legal practitioners, in the conduct of Commission proceedings. A telephone conference occurs prior to a conciliation/arbitration hearing. The conciliation and arbitration stages of the Commission’s process generally occur on the same day. Schedule 6 does not refer specifically to a ‘telephone conference’ however it is reasonable to assume that a ‘conference’ referred to in 4.12 covers the same process, as distinguished from a later conciliation/arbitration hearing.

1. The decision in Fuentes is binding on the Registrar, and on a Presidential Member on appeal.  While Justice Ipp’s comments on the interpretation of Item 4.12 were obiter, they are nonetheless clearly expressed and must be taken to be persuasive.  However, Justice Ipp’s view that the amount of $190 was recoverable under Item 4.12 after both a conference and an arbitration was, on his own account, not informed by the fact that both occurred on the same day and that the Commission’s processes provided for a transition from one part of the proceedings to another.  Taking into account Justice Ipp’s comments, and the Commission’s Guidelines, I am of the view that only one amount is recoverable under Item 4.12 after a conciliation and arbitration conference held on the same day.  The Arbitrator was correct to deny this claim.

1. The Appellant has also claimed an amount of $190 under Item 4.12 for reporting to his client following the telephone conference.  This amount should be permitted.  The term ‘conference’ is not otherwise restricted in Item 4.12 and, on the reasoning in Fuentes, a report to the client following the telephone conference, which is held some three weeks prior to the conciliation and arbitration, should be allowed. 

1. The approach to Item 4.12 set out by Justice Ipp in Fuentes appears to turn on the precise words of that Item.  In my view it is not intended that the “maximum total for type or activity/event” in Column 4 be exceeded for the Items set out in Column 1 of the Compensation Costs Table.  As I stated in Orr v Direct Couriers (Australia) Pty Ltd [2004] NSW WCC PD 28:

   “All individual ‘activities or events’, described in Column 2 of the Table, that come under that event/activity, described in Column 3 of the Table, must not exceed the maximum total for the ‘type’, as prescribed in Column 4 of the Table, not merely the totals for the individual ‘events’, as the Appellant suggests.  The words of Clause 1(2) are critical, “the maximum costs for an activity or event described in a Part of the Table and carried out in or in relation to a claim made or to be made in respect of a particular injury” (emphasis added).  Maximum costs attach to the event/activity in the Table for a ‘claim’ made in respect of a particular injury, not, as the Appellant suggests, for each time the event or activity is claimed.” 

1. In summary, the Delegate has erred in his interpretation of Item 4.12 of the Compensation Costs Table.  This error is a matter of law.  The assessment should be adjusted to allow an amount of $380 (in total) pursuant to Item 4.12.

Item 10.01

1. The issue of the agent’s fees was discussed in the matter of Dunn v Port Macquarie RSL Club Limited [2004] NSW WCC PD 33. Item 4.05 of the Compensation Costs Table, has already been claimed, and allowed, at the maximum of $500. To also allow the claim under Item 10.01 is to effectively allow for the same activity, by a legal representative and an agent, to be claimed twice. This is not permitted by the Regulations.

Reasons

1. The Appellant submits that the Delegate’s reasons are inadequate.  I do not accept this submission.

1. The failure to provide adequate reasons constitutes an error of law and may be a ground to set aside the Delegate’s decision.  However, to succeed on the ground of ‘inadequate reasons’ it will be necessary for the Appellant to demonstrate not only that the reasons are inadequate but that the inadequacy sufficiently demonstrates that the Delegate has failed to exercise his or her statutory duty to fairly and lawfully determine the application (YG v Minister for Community Services [2002] NSWCA 247, see discussion in Christopher Michael McMahon v Anthony Lagana and Joseph Lavella t/as the Vessel “Nimble II” [2003] NSW WCC PD 22).

1. It is not necessary for the Registrar, or her delegate, to set out lengthy written reasons for a decision in order to comply with the Act and the Rules.  To do so would be unreasonable and inconsistent with the objectives of the Commission in providing a speedy resolution to workers compensation disputes.  The Reasons given by the Delegate in this matter are brief, however in my view they meet the requirements of Regulation 115.  Each of the disputed items is identified and brief reasons given in relation to whether it was allowed.  The totality of the costs claim in this matter is $6314 of which about $2400 was seriously in dispute.  It is unreasonable to suggest that the Registrar should provide lengthy written reasons to support this decision.

DECISION

1. The assessment of the Registrar is amended in accordance with these reasons.

Dr Gabriel Fleming

Deputy President  

1 September 2004

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DR GABRIEL FLEMING, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE