Moore v PM & JH Turner
[2006] NSWWCCPD 110
•5 June 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Moore v PM & JH Turner [2006] NSWWCCPD 110
APPELLANT: Peter William Moore
RESPONDENT: PM & JH Turner
INSURER:QBE Workers Compensation (NSW) Limited
FILE NUMBER: WCC20418-04
DATE OF REGISTRAR’S DECISION: 2 March 2005
DATE OF APPEAL DECISION: 5 June 2006
SUBJECT MATTER OF DECISION: Recovery of costs pursuant to Clause 82 and Schedule 6 of the Workers Compensation Regulation 2003.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners, Lawyers
Respondent: QBE In-House Legal
ORDERS MADE ON APPEAL: 1. The decision of the Registrar dated 2 March 2005 is confirmed.
2. No order as to costs of the appeal.
BACKGROUND TO THE APPEAL
On 1 April 2005, Peter William Moore (‘the Appellant’) filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator.
The Respondent to the appeal is PM & JH Turner (‘the Respondent’). The relevant workers compensation insurer is QBE Workers Compensation (NSW) Limited (‘QBE’). Neither the Respondent nor insurer has filed an appearance or any submissions in the appeal. A ‘Certificate of Service’ filed by the Appellant on 8 April 2005 indicated that the appeal was served on QBE on 6 April 2005.
The Registrar’s decision (by her delegate, a Commission Arbitrator) made on 2 March 2005, is as follows:
“1. Pursuant to an Agreement and Order dated 3 April 2004 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 $3,697.00 (inclusive of GST) are determined as fair and reasonable.
3. Part of the Applicant’s costs of the assessment (inclusive of GST) are allowed in an amount of $125.00.
4. The Respondent is pay the amount of $3,822.00 to the Applicant if those costs have not already been paid.”
In making an assessment of costs, the Registrar noted that the parties had reached agreement with respect to a number of Items set out in Schedule 6 of the Workers Compensation Regulation 2003 (‘the Regulation’) but that Item 1.01 and Item 2.06 remained in dispute. In addition, the Registrar disallowed a number of disbursements sought by the Appellant’s solicitors.
The substantive file is not available however, it appears that the Appellant’s claim was for permanent impairment compensation. It is noted that an ‘Application for Registration of Agreement’ under section 66A of the Workers Compensation Act 1987 (‘the 1987 Act’) was completed on 5 February 2004.
The Appellant seeks payment of costs in respect of all events undertaken in connection with the preparation of the substantive claim.
ON THE PAPERS REVIEW
The Appellant submits that:
“This matter should not be dealt with ‘on the papers’ and should be listed for oral submissions before the Registrar. Any decision in regards to the payment of private investigator’s fees would have a significant consequence upon the Applicant and may result in an Appeal to the Court of Appeal.”
No submission is made by the Respondent on this issue.
I have before me the Commission file with respect to the costs dispute together with the appeal file and the Appellant’s submissions on appeal. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides that:
“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”.
It is noted that the Registrar is a member of the Commission (section 368 of the 1998 Act).
Having carefully read all the material before me, I am satisfied that I have sufficient information to proceed ‘on the papers’ and that this is not a denial of procedural fairness but the appropriate course in the circumstances.
THE ISSUES IN DISPUTE
The principal issue in dispute relates to two disbursements in particular, an “investigation report” and an “accountant’s statement”.
The Registrar’s determination on these issues was set out in paragraphs 14 and 15 of the ‘Statement of Reasons’ accompanying the ‘Certificate of Determination’ as follows:
“14. I disallow the investigator’s fee. I cannot see (a statement having been obtained from the applicant) what else the investigator could have done in this matter. Neither the investigator’s invoice or the application or the bill assist me. Reduce by $2,467.69.
15. I cannot see how an accountant’s report has any relevance in this matter and disallow the $40.00 claimed.”
It is noted that at paragraph 16 of the ‘Statement of Reasons’, the determination was “I disallow all miscellaneous disbursements as these are not allowed under the Regulations. Reduce by $550.00.” However, the Appellant submits that “the Applicant never sought the $550.00 for miscellaneous disbursements and [the Registrar] made an error when he put this Item in at Item 16.
The Appellant also disputes Item 1.01 and Item 2.06. The Appellant sought $500.00 in respect of Item 1.01 and $500.00 in respect of Item 2.06. The Registrar permitted these amounts as set out in paragraphs 12 and 13 of the ‘Statement of Reasons’ as follows:
“12. Item 1.01. I allow two hours ($500.00) for taking instructions throughout the matter. This is fair and reasonable. No reduction.
13. Item 2.06. I allow two hours for all steps necessary to request a review including considering the Respondent’s position, communication with the Respondent and client etc. No reduction.”
I am at a loss to understand why the Appellant submits that these Items are still in dispute when they were clearly included in the Registrar’s Determination.
Consequently, it seems that the only Items that remain in dispute are the investigation report and the accountant’s statement.
THE SUBMISSIONS AND FINDINGS
The Appellant submits that:
“The Applicant is entitled to the cost of the private investigator’s fees, under Part 19 Rule 82(b) which states that costs not regulated by the workers compensation costs include fees for investigator’s reports or for other material produced or obtained by investigators (such as witness statements or other evidence).”
The Appellant submits that he is entitled to the cost associated with the private investigator’s report since if it was disallowed, “… then no insurer or Respondent would be entitled to recover from WorkCover … the cost of investigations conducted by them …”.
The Appellant submits that, simply put, that if a factual investigation can be obtained by an insurer, then a worker ought be similarly entitled.
The Appellant further submits that if the payment of an investigator’s fee was disallowed, then that is “… clearly a denial of procedural fairness …” The Appellant goes on to submit that a denial of procedural fairness is an error of law, and that if the costs assessment is upheld, “… then the Applicant is in a worse situation than the Respondent.”
The Appellant goes on to submit that: “The Respondent whom [sic] has the wealth of the workers compensation insurance company and the WorkCover Authority of NSW, can request factual investigations which they can use to the detriment of the injured worker. The injured worker then cannot obtain their own factual investigation report in support of their claim.” The Appellant noted that in this particular case, the insurer had allowed for the cost of briefing a factual investigator.
As to the accountant’s fee, the Appellant submits that it was necessary to investigate whether he had suffered a wage loss from 1996 (the date of accident) through to 2005 to determine the nature and extent of his claim. For that purpose, it was necessary to obtain tax records, and the Appellant’s accountant was requested to provide copies of tax returns for the relevant period.
The Appellant submits that “the accountant’s fees are regulated by Part 19 Rule 82 of the Workers Compensation Regulations [sic] 2003” such that the account would be classified as fair and reasonable.
Clause 82 of the Regulation sets out various Items and fees not included in Part 19. They include clause 82(b) “fees for investigators’ reports or for other material produced or obtained by investigators (such as witness statements or other evidence), and clause 82(d) fees for accountant’s reports.”
These types of claims were considered by Deputy President Fleming in Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 (‘Berger’s case’). Deputy President Fleming considered the regulation of costs in the Commission noting that:
“Costs incurred after the commencement of the 1998 Act, on 1 January 2002, are governed by Part 8 of that Act, which establishes a comprehensive statutory regime for the regulation of costs in Commission proceedings. However, the 1998 Act, the WC Regulation, the Legal Profession Act 2004, the Legal Regulation 2005 and regulatory instruments (made from time to time) must be read together in order to fully understand and appreciate the costs regime applicable to disputes in the Commission.”
Of particular relevance to this claim is Clause 82 of Part 19 of the Regulation. As Deputy President Fleming pointed out at paragraph 48 in Berger’s case, “The removal of certain costs, referred to in Clause 82 of the WC Regulation, from the operation of Part 19 raises two questions, ie how are clause 82 costs to be assessed, and who is to assess them?” Following a detailed analysis of the relevant regulations and legislative provisions, Deputy President Fleming concluded at paragraph 56 that, in respect of fees for investigator’s reports:
“Clause 113 of the LP Regulation applies to the assessment of costs for these services. Where claimed as a disbursement, the fee for such a report must be assessed in accordance with Schedule 3, Part 1 Item 10 ‘Disbursements’ of the LP Regulation. This applies a test of whether the disbursement was “reasonably incurred or was reasonable in amount”. The determination of the total amount must also be a ‘fair and reasonable’ value for the service provided.”
A similar conclusion was reached in respect to fees for accountant’s reports where Deputy President Fleming determined that: “They must therefore be assessed in accordance with Schedule 3 of the LP Regulation, Part 4, Item 2 “Preparation of Reports”. The determination of the total amount must be a ‘fair and reasonable’ value for the service provided.”
As to the issue as to who would assess Clause 82 costs, Deputy President Fleming concluded at paragraph 68 of Berger’s case that:
“The Commission’s broad statutory power to determine “by whom, to whom and to what extent” costs are to be paid in the Commission (section 341 of the 1998 Act) is sufficient to enable the Registrar (who is a member of the Commission by virtue of section 368 of the 1998 Act) to assess the whole of the costs which are subject to an order in Commission proceedings … while Clause 82 of the WC Regulation excludes certain costs from Part 19 of the WC Regulation, it does not purport to exclude these costs from Part 8 of Chapter 7 of the 1998 Act.”
Ultimately, she concluded at paragraph 71:
“I am satisfied that the Items listed in Clause 82 of the WC Regulation are subject to the same assessment process as costs included in the Compensation Costs Table in Schedule 6, i.e assessments by the Registrar of the Commission and appeal to a Presidential Member as to a “matter of law”.”
It is noted that Berger’s case is the subject of an appeal to the Court of Appeal, yet to be determined. On 30 December 2005, the Commission wrote to the Appellant’s solicitors in the following terms:
“The recent decision of Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 addresses issues raised in the costs appeal. As the decision in Berger was delivered after lodgement of the appeal, there is some merit in reviewing the costs determination and the appeal grounds.
Having regard to the Berger’s case, you are requested to advise:
1. Whether you wish to discontinue the appeal application;
2. Whether you wished to amend the appeal application;
3. Whether you would consent to the original costs determination being referred to the costs assessor for review in accordance with the decision in Berger;
4. Whether you wished to proceed with the appeal.”
On 17 January 2005, [sic] the Appellant’s solicitors wrote to the Commission in response to that letter answering no to questions 1 to 3 and yes to question 4.
In those circumstances, I propose to determine the appeal in accordance with the existing authorities.
The Investigator’s Report
This report is annexed to the appeal application. It is described as a “Factual and Liability Summary Report” dated 15 January 2004 prepared by St George Registration and Investigation Services Pty Limited.
The subject matter of the report is silent on the medical issues simply noting “nil to hand”. As to the “Factual and Liability Summary” this appears to have been prepared as a consequence of a telephone interview with the Appellant only, as is disclosed in the investigator’s “Memorandum of Costs and Disbursements”. The substance of this “Summary” recites the date of injury, medical treatment, treatment at Dubbo Hospital, surgery, a list of ‘disabilities’ as a consequence of the injury, and discussion as to “hip replacement”. The notation there is that:
“The Applicant’s hip problems began in around early 1996 when he became aware of increased pain in his left and right hips. The repetitive bending and lifting of heavy weights in the workplace, as well as the requirement for him to be on his feet for long periods of time, caused his hip pain to deteriorate until the point in 2000 when Dr Stratton advised a hip replacement.”
It is noted that the subject matter of the claim before the Commission related to an injury to the Appellant’s left foot and little toe on 4 December 1996. In the absence of the substantive file however the relevance of the “hip replacement” comments is obscure.
At the conclusion of the report under the heading “authenticity of claim” the investigator stated:
“We are satisfied that as a result of the nature and conditions of the Applicant’s employment with the Respondent, that he has performed repetitive tasks requiring bending and lifting of heavy weights, which have caused significant stress and strain in the Applicant’s body to cause injury.
Resulting from the Applicant’s employment with the Respondent, he has suffered degeneration and strain of his hips, requiring him to have both a left and right hip replacement.
We are further satisfied that as a result of frank injury on 4 December 1996, the Applicant has suffered a significant injury to his left foot and little toe. This injury has had an effect on the Applicant’s ability to work and perform tasks at home.”
Given that the investigator admitted that he had no medical reports available at the time of preparing the report, his statements as to the “authenticity” of the Appellant’s claim seems remarkable to say the least. Nothing in the report disclosed any ‘liability’ or ‘factual issues’ independently assessed by the investigator.
The Appellant submits that:
“In Part 4 of the Application for Assessment Costs, we authorised the Registrar as follows: ‘I authorise the Registrar to have access to and inspect all documents of the Applicant that are held by the Applicant, or by the legal practitioner or agent concerned, in respect of the matter to which the application relates (in accordance with section 123(2) of the Regulations)’”.
The Appellant notes that the Registrar, by her delegate, “… did not require a copy of the factual investigation report.”
It is the Appellant’s submission that:
“It is noted in the factual and liability summary report, that [the investigator] prepared a thorough factual investigation report into the injury, provided details of frank injury, medical treatment, treatment at Dubbo Base Hospital, surgery, the ongoing affects that the Applicant suffered, return to work, hip replacements, restricted abilities, problems with his sexual organ, provided copies of statements by [the Appellant] … and a copy of statement by [witness] and then provided us with his observation of the Applicant and whether the claim was authentic.”
That is no more than a statement as to the Appellant’s solicitor’s interpretation of that report. It is difficult to see how many of the matters referred to in that quote could be seen to go to issues of “fact” or “liability”, for example, “problems with his sexual organ”. This is all information obtained as a result of a telephone interview with the Appellant and does not suggest any ‘independent’ investigation as to the facts and circumstances of the injury alleged.
Reference is made by the Appellant’s solicitor to the decision of Deputy President Fleming in Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 (‘Nebauer’s case’) in submissions apparently dated 8 December 2004. Those submissions form part of the application for assessment of costs and are repeated in the appeal application in the following terms:
“In that decision the Presidential Members [sic] makes it clear that because the cost involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01 (i.e obtaining instructions from the client) it would not be appropriate to allow fees for an investigation report, if the only purpose of that investigation report was to obtain a worker’s statement.
However, it is implied, from that decision, that it would be proper to allow an investigation report, if it was in fact an investigation report and not merely for the purposes of obtaining witness statements.”
In Nebauer’s case, Deputy President Fleming upheld the determination of the Registrar’s delegate that “all the investigator was doing was obtaining a statement from the Applicant. The Applicant has already claimed the maximum amount for obtaining instructions and the task of drafting a statement of the Applicant is included in this allowance. The scales specifically excludes the cost of briefing investigators to obtain ‘witness statements’”.
Deputy President Fleming accepted the Appellant’s submission that the worker should not be considered a ‘witness’ for the purpose of Item 2.05 but concluded that:
“… The events prescribed in Part 2A of the Compensation Costs Table followed a natural progression of preparation of a matter. In my view, the costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01.”
The investigation report the subject of this appeal is no more than a “statement from the worker”. There is simply no evidence whatsoever that any independent investigation was undertaken such that the Costs Assessor’s statement at paragraph 14 that: “I cannot see (a statement having been obtained from the Applicant) what else the investigator could have done in this matter” was a fair assessment of the facts of this particular case.
I can see no error by the Registrar on this issue.
The Accountant’s Fee
This is again an Item to be assessed under clause 82 of Part 19 such that it must be determined whether that disbursement was ‘reasonably incurred or was reasonable in amount’.
The Appellant’s claim was for lump sum compensation pursuant to section 66 of the Workers Compensation Act 1987. Agreement was reached between the parties on 20 January 2004 and the section 66A Agreement registered on 3 April 2004 in respect of 10% loss of use of the left leg below the knee in the sum of $7,000.00.
The accountant’s ‘fee’ is for photocopying the Appellant’s tax returns for the years 1995 to 2001, a total of $40.00 inclusive of GST. Whilst on the face of it that ‘fee’ does not seem unreasonable, the issue is more whether it was “reasonably incurred”.
There is no evidence before me that any enquiry was made of the Appellant himself as to whether he had copies of the relevant tax returns. This is an Item more properly covered by Item 2.01 in the Compensation Costs Table pertaining to the obtaining of instructions from the client “as to whether [he] had suffered a wage loss.”
In any event, I do not consider the accountant’s ‘Memorandum of Fees’ for photocopying taxation returns as being a “report” within the meaning of clause 82 of Part 19 such that its “reasonableness” or otherwise is not an issue to be determined. It was no doubt “reasonable” for the Appellant’s solicitor to enquire from the Appellant as to whether any wage loss had occurred, but as I have said, that is an event that falls properly within the ambit of Item 2.01.
CONCLUSION
Whilst the Appellant has not identified with any clarity any particular error of law, the thrust of the submissions are to the effect that the Registrar misinterpreted the relevant law in relation to the assessment of costs in Commission proceedings.
I am not satisfied that the Appellant has demonstrated any such error by the Registrar in light of the authorities to which I have referred.
DECISION
The decision of the Registrar dated 2 March 2005 is confirmed.
COSTS
No order as to costs of the appeal.
Deborah Moore
Acting Deputy President
5 June 2006
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
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