Nimbin Hotel Pty Limited v Dalton

[2007] NSWWCCPD 17

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS

CITATION:Nimbin Hotel Pty Limited v Dalton [2007] NSWWCCPD 17

APPELLANT:  Nimbin Hotel Pty Limited 

RESPONDENT:              Shane Edward Dalton

INSURER:CGU Workers Compensation (NSW) Limited

FILE NUMBER:  WCC19908-05

DATE OF REGISTRAR’S DECISION:             6 April 2006

DATE OF APPEAL DECISION:  18 January 2007

SUBJECT MATTER OF DECISION: Appeal against the Registrar’s Assessment of Costs: Items 2.01, 2.06, 4.05, 4.08, 4.09, 4.11 and 4.10 of Schedule 6 of the Workers Compensation Regulation (2003); disbursements – agency fees.

PRESIDENTIAL MEMBER:  Acting Deputy President Deborah Moore

HEARING:On the papers

REPRESENTATION:  Appellant:      Sparke Helmore Lawyers

Respondent:   Attwood Marshall Lawyers

ORDERS MADE ON APPEAL:  1.        The Registrar’s determination of Mr

Dalton’s claim for costs in this matter, dated 6 April 2006 is amended in accordance with these reasons.

2.        No order as to costs of the appeal.

BACKGROUND TO THE APPEAL

1. On 4 May 2006 Nimbin Hotel Pty Limited (‘Nimbin Hotel’) filed an ‘Appeal Against a Cost Determination’ made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 6 April 2006. The Respondent to the appeal is Shane Edward Dalton (‘Mr Dalton’). On 30 May 2006 Mr Dalton filed a ‘Notice of Opposition’ to the appeal.

1. Mr Dalton commenced proceedings in the Commission on 23 November 2004 seeking compensation benefits as a consequence of a number of injuries he sustained in a motor vehicle accident on 29 January 2003.

1. The parties attended an arbitration hearing on both 1 April 2005 and 12 October 2005. On 17 October 2005 a ‘Certificate of Determination- Consent Orders’ was issued which set out the terms of the agreed resolution of the issues in dispute between the parties. Those terms included an order that Nimbin Hotel pay Mr Dalton’s costs “as agreed or assessed”. It is noted that the Arbitrator certified the matter as “complex” stating as follows:

“This was a journey claim which ran over two days. At issue was whether the Applicant’s injury was attributable to the Applicant’s own serious and wilful misconduct, arising from his allegedly being under the influence of alcohol … there were complex issues of fact and law to be determined …”

1. On 22 November 2005, the parties having failed to agree on the costs payable, Mr Dalton’s solicitors filed an ‘Application for Assessment of Costs’ with the Commission in respect of their Bill of Costs dated 17 October 2005. By Notices dated 9 January 2006, the Commission invited the parties to file and serve written submissions. The parties remained in dispute as to certain Items.

1. The Registrar delegated the assessment of costs to a Commission Arbitrator (‘the Delegate’) who made a determination dated 6 April 2006. The ‘Certificate of Determination’ stated as follows:

“1. Pursuant to an Order dated 17 October 2005 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 $11,709.26 (inclusive of GST) are determined as fair and reasonable.

3.   The Applicant’s costs of the assessment are allowed at $605.00 (inclusive of GST).

4.   The Respondent is to pay the amount of $12,314.26 (inclusive of GST) to the Applicant if those costs have not already been paid.”

1. The relevant aspects of the Delegate’s ‘Statement of Reasons’ for his decision will be dealt with below.

ON THE PAPERS REVIEW

1. Nimbin Hotel submits that the matter is suitable for a determination ‘on the papers’. Mr Dalton submits that “… should the Presidential Member require that the matter be set down for further submissions in Sydney and [sic] that the matter is not to be determined on the papers”.

1. I have before me the Commission files in both the substantive matter and the cost dispute together with the parties’ submissions on appeal.

1. 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, DISUSSION AND FINDINGS

1. Nimbin Hotel’s submissions are essentially confined to two principal areas: Firstly, that the Delegate incorrectly allowed certain costs Items at an increased rate in accordance with Schedule 6 of the Workers Compensation Regulation 2003 (‘the Regulation’) and secondly, that the Delegate incorrectly allowed agency fees.

1. Nimbin Hotel submits that the increased rates allowed by the Delegate for certain Items do not apply since any increased rate for an activity and/or event is to be applied only if such an activity and/or event is undertaken after the commencement of those rates, namely 17 March 2006.

1. Mr Dalton submits that the Delegate “… correctly applied the costs scale Items at the increased rate in accordance with Schedule 6 … [and] indicated the reasoning behind the increase in the scale costs.”

1. Nimbin Hotel points out in its submissions that, in a number of the Items it disputes, the Delegate allowed more than the amount which had been claimed by Mr Dalton and indeed apparently agreed to between the parties.

1. The following Items have been identified as being in dispute:

Professional Costs

Item  Claimed  Allowed
  _______________________________________________________

2.01   $500.00  $550.00
  4.05  $500.00  $550.00
  4.08  $500.00  $550.00
  4.09  $250.00  $275.00
  4.11  $250.00  $275.00
  4.10  $500.00  $550.00

Disbursements

Agency Fees - $979.00

The increased fees in Schedule 6 of the Regulation

1. The Workers Compensation Amendment (Costs in Compensation Matters) Regulation 2006 came into operation on 17 March 2006, and increased rates for various Items in Schedule 6 of the Regulation applicable to work performed after 17 March 2006.

1. Mr Dalton’s solicitors forwarded their Bill of Costs to Nimbin Hotel under cover of a letter dated 17 October 2005. By letter dated 8 November 2005 Nimbin Hotel noted that: “We are prepared to recommend payment to our client subject to the following: …” There followed a list of Items disputed by Nimbin Hotel. Items 2.01, 4.05, 4.08 and 4.10 were not disputed.

1. In its submissions to the Delegate dated 18 January 2006, Nimbin Hotel specifically stated that “… The Respondent has not and does not dispute …” payment of Items 2.01, 4.05, 4.08 and 4.10, all in the sum of $500.00 as claimed by Mr Dalton’s solicitors.

1. In these circumstances, it is clear that these Items were not in dispute between the parties prior to the Delegate’s determination dated 6 April 2006, and clearly prior to 17 March 2006.

1. In its submissions to the Delegate dated 27 January 2006, Mr Dalton’s solicitors stated that “Item 2.01 – noted as agreed”. As to Items 4.05 and 4.08, Mr Dalton’s solicitors stated: “The Applicant notes the Respondent’s agreement.”

1. As to Item 4.09, Mr Dalton’s solicitors claimed the sum of $250.00. In their submissions dated 27 January 2006 they stated: “The Applicant notes the Respondent’s agreement.”

2. No reference was made by Mr Dalton’s solicitors in their submissions dated 27 January 2006 to Item 4.11. The sum of $250.00 had been claimed by Mr Dalton in respect of this Item. In submissions to the Delegate dated 18 January 2006, Nimbin Hotel stated: “The Respondent submits that the Applicant is entitled to costs for this Item as the matter did not proceed on 1 April 2005, but was stood over to the further arbitration date of 12 October 2005.” In submissions on appeal, Nimbin Hotel states that “… No more than $250.00 should be allowed.”

1. Thus, none of the Items now disputed by Nimbin Hotel on appeal were ever in dispute before the Delegate.

1. Recently, in O’Neill v Homecare Services of NSW [2007] PD7 ADP Handley considered the question of GST in light of the amendments which came into effect on 17 March 2006. He concluded at paragraph 37 as follows:

“In the current matter, although the services were performed before the above amendment took effect, the GST payable could not be ascertained until the value of the services supplied had been determined. Since there was no agreement between the parties as to the value of the services supplied, that value was not determined until the Delegate’s determination dated 29 May 2006. Because this took place after the amendment to clause 123(1) took effect, Ms O’Neill’s solicitors are, therefore, entitled to recover GST in respect of their professional costs. The Delegate therefore made an error of law by disallowing their claim for GST to be added to the costs claimed in respect of Items in the Table.”

1. In this case, there was agreement between the parties as to the “value” of the activity or event prior to the Delegate’s determination. In those circumstances, it is not appropriate to award an increased rate, and the Delegate has erred in this respect.

1. Thus the correct amounts for the Items in dispute are as follows:

Item 2.01  $500.00

Item 4.05  $500.00

Item 4.08  $500.00

Item 4.09  $250.00

Item 4.11  $250.00

Item 4.10  $500.00

Agency Fees

1. In his Bill of Costs, Mr Dalton claimed $979.00 (inclusive of GST) in respect of an investigation report undertaken by ‘API Investigations’.

1. As to this claim, the Delegate stated as follows:

“I have analysed the investigation activity, in the circumstances of these proceedings, at length, under reference Item 2.05 above … The Item comprises a proper disbursement claim in the circumstances of this particular matter and is allowed (including GST). Any costs of such Report is assessed in accordance with Schedule 3, Part 1, Item 10 ‘disbursements’ under the Legal Profession Regulation 2005. The test is whether the disbursement was ‘reasonably incurred or was reasonable in amount’. Any amount determined must be determined as representing a ‘fair and reasonable’ value for the service provided (refer Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 including at paragraph 132). I am satisfied that in the circumstances of this matter the investigation Report was reasonably incurred and was reasonable in amount and, as to its costing for the service provided, is fair and reasonable in the amount claimed.”

1. In his reasons for allowing Item 2.05 (briefing a factual investigation) the Delegate noted these points:

“Liability was stridently in issue. This was a journey claim which ultimately involved a two-day Arbitration hearing process. The Arbitrator’s Consent Orders of 17 October 2005 note these and other features, including the complex issues of fact and law involved, and noting also that the Respondent introduced, including relatively late, expert scientific evidence. Further, this was a case where there were no witnesses and where there was conflicting evidence challenging any Arbitration or resolution of it … I have noted, indeed read, the full content of the API 25 February 2004 Report. I believe its entire content, in the circumstances of this matter, had integrity and probity in the proceedings and was in evidence in the proceedings. This API Report went far beyond the mere obtaining of the Applicant’s statement in the circumstances of this matter … The Report is dated 25 February 2004. The dispute Application here was filed on or about 12 November 2004 such that the briefing was long prior to any dispute filing. The Item qualifies on that basis. This is a discretionary allowance … [the Report] encapsulates a host of pertinent investigation content … this is not a replication of instructional or allowances for the solicitor as already granted at 2.01, for example. Further, this was it seems a reasonable and necessary, and confined, Report obtained in a timely and proper fashion, obtained relatively conservatively as to costs … and not, as in some other presentations a case of an automated commissioning of an investigator for any broad purpose … It is reasonably allowable and is allowed.”

1. I have read the API Investigation Report and concur with the Delegate’s remarks.

1. As Deputy President Fleming said in Berger (supra) at paragraph 91:

“As a general proposition there can be no argument that the Registrar must, in exercising the discretion to determine what costs are ‘fair and reasonable’, consider the evidence and submissions on the matters referred to in clause 110 and clause 111. Clearly this discretion cannot be exercised on a whim. It must be exercised fairly and lawfully.”

1. In my view, the Delegate has fairly and lawfully exercised his discretion in determining that the amount of $979.00 in respect of the Investigator’s Report was a ‘fair and reasonable’ disbursement and it is allowed.

SUMMARY

1. The Delegate’s determination is amended in accordance with my reasons stated above. The amount of professional costs claimed by Mr Dalton’s solicitors are reduced by $275.00 inclusive of GST calculated as follows:

Item 2.01        $50.00
Item 4.05        $50.00
Item 4.08        $50.00
Item 4.09        $25.00
Item 4.11        $25.00
Item 4.10        $50.00

$250.00
Plus GST        $ 25.00

Total:             $275.00

DECISION

1. The Delegate’s determination of $11,709.26 is set aside and the sum of $11,434.26 substituted in lieu thereof.

COSTS

1. In the circumstances of this case, I make no order as to costs of the appeal.

Deborah Moore

Acting Deputy President

18 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