Pinkerton v Coles Supermarkets Australia Pty Ltd
[2007] NSWWCCPD 34
•6 February 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Pinkerton v Coles Supermarkets Australia Pty Ltd [2007] NSWWCCPD 34
APPELLANT: Jenny Pinkerton
RESPONDENT: Coles Supermarkets Australia Pty Ltd
INSURER:Gallagher Bassett Services Pty Ltd
FILE NUMBER: WCC12429-05
DATE OF REGISTRAR’S DECISION: 23 January 2006
DATE OF APPEAL DECISION: 6 February 2007
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: professional costs - claims under Items 1.02, 2.03, 2.04, 2.05, 7.01 and 10.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003; disbursements – fee for private investigator’s report, and applicant’s travelling expenses.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Hicksons Lawyers
ORDERS MADE ON APPEAL: The Registrar’s determination of Ms Pinkerton’s costs in this matter, dated 23 January 2006, is amended in accordance with these reasons.
The Respondent, Coles Supermarkets Australia Pty Ltd is to pay the Appellant, Ms Pinkerton $175 in respect of her costs of the appeal.
BACKGROUND
On 21 February 2006, Jenny Pinkerton filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator. The Respondent to the appeal is Coles Supermarkets Australia Pty Ltd (‘Coles’). Coles’ workers compensation insurer was formerly Allianz Australia Workers’ Compensation (NSW) Ltd (‘Allianz’) and is now Gallagher Bassett Services Pty Ltd.
Ms Pinkerton was born on 7 August 1961 and is aged 45. She is married with two children aged 10 and 8. Ms Pinkerton was employed by Coles as a part-time grocery filler from 30 May 2000 to 26 April 2001. She claimed to have suffered injuries to her back and left shoulder and impairment to sexual organs as a result of the nature and conditions of her employment. On 13 August 2002, she lodged a claim for workers compensation.
Ms Pinkerton’s claim for compensation for injuries to her back and left arm was settled. On 25 November 2004, the Commission registered a section 66A lump sum agreement between the parties (in matter no 19300-04), detailing the agreement as being for the payment of compensation totalling $29,000, comprising $9,000 in respect of a 15% permanent impairment of her back, $7,500 in respect of 10% loss of efficient use of her left arm, and $12,500 for pain and suffering, with costs to be paid by the Respondent as agreed or assessed. Ms Pinkerton’s solicitors had, in fact, accepted Coles’ offer of settlement on 2 July 2004, and on 6 July 2004, sent Allianz their Bill of Costs dated 2 July 2004.
On 26 July 2005, the parties having failed to agree on the costs payable, Ms Pinkerton’s solicitors lodged an ‘Application for Assessment of Costs’ with the Commission. (This was registered as matter no 12429-05.) Coles lodged its submissions in reply on 17 August 2005. The Registrar delegated the assessment of costs to an Arbitrator (‘the Delegate’) who made a determination dated 23 January 2006. The Certificate of Determination stated:
“1. Pursuant to Agreements [sic] and Order dated 25 November 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 $4,000.00 (inclusive of GST) are determined as fair and reasonable.
3. The Applicant’s costs of the assessment are not allowed.
4. The Applicant is to repay the amount of $1,140.82 to the Respondent.”
The relevant parts of the Delegate’s Statement of Reasons for his decision are referred to below under the heading ‘Submissions, Discussion and Findings’.
On 30 June 2005, the Commission registered Ms Pinkerton’s ‘Application to Resolve a Dispute’ in respect of her claim for weekly compensation and compensation for permanent impairment and pain and suffering (as matter no 10363-05). On 15 July 2005, Coles lodged a ‘Reply’. On 13 September 2005, an Arbitrator conducted a teleconference with the parties, following which the Registrar referred Ms Pinkerton to an Approved Medical Specialist (‘AMS’), Dr Frank Breslin, for assessment of permanent impairment. Dr Breslin examined Ms Pinkerton on 8 November 2005 and assessed a permanent loss of efficient use of her sexual organs of 25%.
On 24 January 2006, the Arbitrator conducted a further teleconference with the parties in the course of which the parties came to an agreed resolution of the issues in dispute. On 24 January 2006, the Arbitrator issued a Certificate of Determination in the following terms:
“1. That the Respondent pay the Applicant as lump-sum compensation under s 66 of the Workers Compensation Act 1987 $11,750 in respect of 25% permanent loss of efficient use of the Applicant’s sexual organs.
2. That the Respondent pay the Applicant as further lump-sum compensation under s 67 of the Workers Compensation Act 1987 $4,500 in respect of further pain and suffering.
3. That the Respondent pay the Applicant weekly compensation at the rate of $135 from 1/7/02 to 24/1/06 under s 40 of the Workers Compensation Act 1987.
4. Award for the Respondent with respect to the Applicant’s claim for weekly payments of compensation for the period 2/4/01 to 30/6/02.
5. That the Respondent pay the Applicant’s costs as agreed or assessed.”
There has been no ‘Application for Assessment of Costs’ in respect of matter no 10363-05.
By letter dated 28 April 2006, Ms Pinkerton’s solicitors requested that the issue of the disputed disbursement in respect of the fee for the private investigator’s report, a report which relates to both matter 19300-04 and matter 10363-05, should be considered in the context of both matters.
ISSUES IN DISPUTE
Ms Pinkerton’s solicitors submit the Delegate erred in his determination of their claims in respect of Items 1.02, 2.03, 2.04, 2.05, 7.01 and 10.01, and in disallowing their claim for disbursements in respect of the fee for the private investigator’s report and the Applicant’s travelling expenses. Coles rejects these submissions and submits the Delegate made no error of law and that the decision should be confirmed. Coles also seeks costs under Item 9.01 in respect of the appeal on the ground that the Appellant acted frivolously in bringing the appeal and caused delay in the finalisation of the matter. The parties’ submissions on these issues are considered below.
ON THE PAPERS REVIEW
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.”
Having regard to Practice Directions Numbers 1 and 6, the documents before me, and the submission by Coles that the matter can be dealt with ‘on the papers’, Ms Pinkerton’s solicitors not having made any 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.
No application to adduce fresh evidence was made.
SUBMISSIONS, DISCUSSION AND FINDINGS
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’) applicable at the time of the Delegate’s assessment, 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 (‘Nebauer’), at paragraph 19; Berger, at paragraph 136.
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.
As stated above, Ms Pinkerton’s solicitors identify a number of costs Items and disbursements as being in dispute. These are considered below.
Professional Costs
Item 1.02
Item 1.02 is described in column 2 of the Table as “Lodging claim with insurer if the insurer has not already made an offer of settlement”. Ms Pinkerton’s solicitors claimed $100 under this Item in respect of their letter of claim addressed to Allianz dated 13 October 2003. Coles have made no submissions in relation to this Item, which the Delegate failed to address in his Statement of Reasons. I have reviewed the letter to Allianz, which was provided to the Delegate. In my view, the Delegate erred by not addressing the claim under this Item, which should have been allowed.
Item 2.03
Item 2.03 is described in column 2 of the Table as “Referring insurer’s reports to a medical specialist or the claimant’s nominated treating doctor for review”. Ms Pinkerton’s solicitors claimed $40 under this Item in respect of their letter dated 20 April 2004. In its submissions in response to the ‘Application for Assessment of Costs’, Coles submitted there was no evidence of such referral. The Delegate failed to address this Item in his Statement of Reasons.
In their submissions on the Appeal, Ms Pinkerton’s solicitors attached a copy of their letter to Dr Endrey-Walder dated 20 April 2004 enclosing a copy of a medical report by Dr Mastroianni, obtained by the insurer, for review. Coles submits details of the correspondence were not provided with the ‘Application for Assessment of Costs’ and Ms Pinkerton’s solicitors should be disentitled from relying on it.
I note that in their Bill of Costs dated 2 July 2004, Ms Pinkerton’s solicitors did specifiy the date of the letter (20 April 2004) against the notation “Referring insurers reports to Doctors”. In my view, the Delegate erred by not addressing this Item of which there is sufficient evidence to support the claim. The claim should be allowed.
Item 2.04
Item 2.04 is described in column 2 of the Table as “Obtaining and reviewing medical reports (other than where Item 1.01 applies)”. Ms Pinkerton’s solicitors claimed $450 under this Item in respect of two reports by Dr Endrey-Walder, dated 28 August 2003 ($150 claimed) and 27 April 2004 ($100 claimed), and a report by Professor Day dated 4 February 2004 ($150 claimed). Coles noted, in relation to Item 1.01, that “There is no evidence of any medical reports obtained or reviewed for the purposes of Item 1.01”, but made no specific submission in relation to Item 2.04. The Delegate disallowed the claims under Item 2.04 in respect of two of the reports, stating:
“Professor Day’s report was obtained before there was a dispute and is included in the reports claimed under Item 1.01. It cannot also be claimed under item 2.04. The first report of Dr Endrey-Walder was also obtained before there was a dispute.”
In a letter to the Commission dated 20 October 2005, Ms Pinkerton’s solicitors listed seven doctors and nine reports in respect of their claim for obtaining and reviewing medical reports under Item 1.01. The Delegate allowed Ms Pinkerton’s solicitors’ claim for the $600 maximum amount allowed under Item 1.01. However, the medical reports listed included that of Professor Day dated 21 January 2004, in respect of which a claim was also made under Item 2.04. In their submissions on the appeal, Ms Pinkerton’s solicitors submit the Delegate made an error of law in his determination in relation to Item 2.04 because there was “no evidence in his assessment to formulate any such view and therefore the Applicant is entitled to the full amount as claimed”. They acknowledged that the claim under Item 2.04 should not have included Professor Day’s report dated 21 January 2004. However, two other reports by Professor Day should have been included (dated 16 July 2003 and 1 September 2004) and two reports by Dr Mastroianni (both dated 17 March 2004).
In its submissions on the appeal, Coles submits the Delegate did not make any error of law in relation to Item 2.04.
Claims under both Items 1.01 and 2.04 must be in respect of medical reports requested, obtained and reviewed before the ‘Application to Resolve a Dispute’ is filed. For claims under Item 1.01, the medical reports must be related to the making of the claim for permanent impairment or pain and suffering – in Ms Pinkerton’s case, this was made on 13 October 2003. For claims under Item 2.04, in Berger (at paragraph 96), Deputy President Fleming held that a claim can only be made under this Item if the obtaining and reviewing of medical reports occurred following the making of a claim and prior to referring a dispute to the Commission.
Thus, Ms Pinkerton’s solicitors could not claim under Item 1.01 for Professor Day’s report dated 21 January 2004 or Dr Mastroianni’s reports dated 17 March 2004 and, under Item 2.04, could not claim for Dr Endrey-Walder’s report dated 28 August 2003, but could have claimed for Dr Mastroianni’s reports dated 17 March 2004. This does not affect the overall amount allowed under Item 1.01 since the amount claimed was $1,000, well in excess of the maximum of $600 allowed under that Item which can still be justified. However, in respect of Item 2.04, it would have been fair and reasonable for the Delegate to have allowed $150 for Dr Mastroianni’s two reports (which were made on the same day so that, presumably, the content of both could have been included in the one report), and $75 each Dr Endrey-Walder’s supplementary report dated 27 April 2004 and Professor Day’s supplementary report dated 1 September 2004. In my view, therefore, it would have been fair and reasonable for the Delegate to allow a total of $300 under Item 2.04.
Item 2.05
Item 2.05 is described in column 2 of the Table as “Briefing a factual investigator or other investigator to obtain evidence other than witness statements (not including the investigator’s fee)”. Ms Pinkerton’s solicitors claimed the maximum of $100 permitted under this Item in respect of briefing St George Registration and Investigation Services Pty Ltd (‘St George’) to prepare a factual and liability summary report.
The Delegate disallowed the claim. He stated the work undertaken by St George was essentially that of taking instructions and it was not fair and reasonable to allow such a claim when this was covered under the Table. The time allowed for taking instructions was sufficient since this “was a relatively straightforward Section 66 claim”.
Ms Pinkerton’s solicitors maintain their claim for $100 on the basis that the private investigator’s report assists the lawyer in deciding the nature of the claim that should be made. Coles submits the Delegate’s determination was correct.
I have examined the Factual and Liability Summary Report prepared by St George dated 1 October 2003. I am in general agreement with the Delegate’s comments and I am not satisfied that there is any evidence to suggest that the Delegate exercised his discretion unfairly or unlawfully in disallowing Ms Pinkerton’s solicitors’ claim under Item 2.05.
I note what Deputy President Fleming said in McManus v Gosford City Council [2004] NSWWCCPD 61 (‘McManus’), at paragraph 21:
“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 ...”
She confirmed this in Berger at paragraph 141, where she said:
“Item 2.05 does not permit a claim for briefing a factual investigator to obtain witness statements, which includes a statement from the worker.”
With regard to other material contained in the Report, I am not satisfied that the business names search, the schedule of earnings, or copies of correspondence with Allianz add anything significant to the supporting material required for the presentation of Ms Pinkerton’s case. I therefore reject this ground of appeal.
Item 7.01
Item 7.01 is described in column 2 of the Table as “All work associated with registration of an agreement under section 66A of the 1987 Act”. The Delegate disallowed this claim because “no proceedings were commenced. The costs of the settlement documents are included in item 2.06 above”.
Ms Pinkerton’s solicitors maintain their claim referring to the section 66A agreement registered on 25 November 2004. Coles submits the Delegate made no error of law in disallowing the claim.
In my view, the Delegate should have allowed this claim and he made an error of law by not doing so. Although I note this matter was not ultimately referred to the Commission (no ‘Application to Resolve a Dispute’ was filed in matter no 19300-04), this does not exclude a claim under Item 7.01 in respect of a section 66A agreement. In my view, this activity is not covered by a claim under Item 2.06 is respect of “Requesting a review of a claim from an insurer ...”.
The Delegate should therefore have allowed a claim for $120 under this Item.
Item 10.01
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 Delegate disallowed Ms Pinkerton’s solicitors’ claim for $187.50 under this Item for “All work associated with instructing an agent to act on re: claim”, on the basis that “[n]o proceedings were commenced, no agent was appointed”.
In their submissions on the appeal, Ms Pinkerton’s solicitors agree to delete this claim. Coles maintain the Delegate made the correct decision consistent with the authority in this area.
I reject this ground of appeal, there being no basis for a review.
Disbursements
Fee for Private Investigator’s Report
Ms Pinkerton’s solicitors claimed $2,252.09 in respect of St George’s fees for preparing a factual and liability summary report. Coles submitted the report was not reasonable or necessary, this being a straightforward partial section 66 claim, the work performed consisting primarily of the taking of the Applicant’s statement, and the proceedings not warranting the involvement of a factual investigator. The Delegate disallowed the claim on the same basis that he disallowed the claim under Item 2.05, namely that the work undertaken by St George was essentially that of taking instructions, and it was not fair and reasonable to allow such a claim when the taking of instructions was covered under the Table. The time allowed for taking instructions was sufficient since this “was a relatively straightforward Section 66 claim”.
In their submissions on the appeal, Ms Pinkerton’s solicitors maintain their claim and state that St George’s report contains a detailed factual investigation which could not have been achieved within the two hours permitted for taking instructions under Item 2.01. Coles submits the Delegate correctly disallowed the claim and refer to the decision in McManus, cited in relation to the claim under Item 2.05, above.
In Berger, at paragraph 142, Deputy President Fleming, recognising that the fee for an investigator’s report may be claimed pursuant to clause 82(b) of the 2003 Regulation, noted:
“The test of whether such a report is claimable will, as discussed above, essentially be one of ‘reasonableness’. In most cases, it will not be reasonable to obtain witness statements by way of an investigator’s report, where the legal practitioner or agent has already obtained such statements, either at the time of taking instructions or at a later time, but before an application to the Commission is filed.”
The Deputy President confirmed that where an activity may be claimed as a cost for which provision is made in the Table, a separately claimed disbursement in respect of that activity by a private investigator would not be considered reasonable. In McManus, at paragraph 21, Deputy President Fleming noted that “the costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01”, where the activity/event is described as “Obtaining instructions from a client”.
Thus, no disbursement may be claimed in respect of the statement from Ms Pinkerton, which one would expect to see prepared by her solicitor subsequent to taking instructions from her. In my view, having reviewed St George’s “Factual and Liability Summary Report” dated 1 October 2003, and having noted the content other than Ms Pinkerton’s statement (for example, the business names search, the schedule of earnings, the copies of correspondence), I am not satisfied that such an investigation and report was required in what appears to have been a relatively straightforward claim. Thus, I am not satisfied that the Delegate made any error in exercising his discretion in disallowing the claim. I therefore reject this ground of appeal.
By letter dated 28 April 2006, Ms Pinkerton’s solicitors requested that the issue of the disputed disbursement in respect of the fee for the private investigator’s report should be considered in the context of both the matter which is the subject of this costs assessment and appeal (matter no 19300-04) and matter no 10363-05, referred to in paragraph 6, above. However, I note that no ‘Application for Assessment of Costs’ having been lodged in respect of matter no 10363-05, the Registrar has no jurisdiction to make a determination in respect of the Applicant’s costs in that matter. Moreover, there having been no assessment of costs by the Registrar in that matter and no appeal against the Registrar’s determination, the Commission, as constituted for the purpose of an appeal by a Presidential member, also has no jurisdiction. I therefore decline Ms Pinkerton’s solicitors’ request on the ground that I have no jurisdiction to do as they request.
Applicant’s Travelling Expenses
Ms Pinkerton’s solicitors claimed a disbursement of $84 in respect of the Applicant’s travelling expenses for attending a medical examination by Dr Endrey-Walder in Sydney on 22 August 2003, comprising $59 for travelling 100 kms (Oyster Bay to Sydney return) at $0.59 per km, and $25 for sustenance. The Delegate disallowed this disbursement on the ground that the expenses were “not allowed in Schedule 6”.
In their submissions on the appeal, Ms Pinkerton’s solicitors do not press this claim, and Coles submits the Delegate’s decision was correct and in accordance with authority in this area. I reject this ground of appeal, there being no basis for a review.
Summary
I have made the following determinations in respect of the Items in Dispute:
Professional Costs
Item 1.02: allow $100
Item 2.03: allow $40
Item 2.04: allow $300 (rather than $175 allowed by the Delegate)
Item 2.05: the Delegate’s determination is confirmed
Item 7.01: allow $120
Item 10.01: not pressed, the Delegate’s determination is confirmedDisbursements
Fee for private investigator’s report: the Delegate’s determination is confirmed
Applicant’s travelling expenses: not pressed, the Delegate’s determination is confirmed
Thus, the costs of the proceedings allowed by the Delegate must be increased by $385.00 to $4,385.00 (inclusive of GST), and the amount Ms Pinkerton must repay to Coles is reduced to $755.82.
I note that Ms Pinkerton’s solicitors submit that Coles initially agreed to pay their itemised Bill of Costs in the sum of $5,140.84, and should, therefore, be bound by that acceptance and required to pay their Bill of Costs in the correct amount of $7,167.85, there having been a mistake in the addition in the Bill of Costs as originally drawn. In my view, Coles’ original acceptance was vitiated by what was a significant mistake, and their acceptance is not, therefore, binding.
DECISION
The Registrar’s determination of Ms Pinkerton’s costs in this matter, dated 23 January 2006, is amended in accordance with these reasons.
COSTS
Coles submits that the Appellant has acted frivolously in bringing this appeal, has caused delay in finalising this matter, and should be required to indemnify the Respondent for its costs.
Ms Pinkerton’s solicitors have been partially successful in this appeal, my having made a determination in their favour in relation to claims made under four costs Items, their not having pressed two appeal grounds and their having been unsuccessful on two grounds. However, the degree of their success in monetary terms is small relative to the overall amount in dispute, and, in my view, in those circumstances, it is fair and reasonable to allow an amount of $175 (inclusive of GST) in respect of their costs of the appeal, representing the equivalent of approximately 40 minutes work. The appropriate order, therefore, is: “The Respondent, Coles Supermarkets Australia Pty Ltd is to pay the Appellant, Ms Pinkerton $175 in respect of her costs in the appeal.”
Robin Handley
Acting Deputy President
6 February 2007
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.
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