Puglisi v State of New South Wales (NSW Police Force)
[2022] NSWPIC 433
•3 August 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Puglisi v State of New South Wales (NSW Police Force) [2022] NSWPIC 433 |
| APPLICANT: | Mark Anthony Puglisi |
| RESPONDENT: | State of New South Wales (NSW Police Force) |
| PRINCIPAL MEMBER: | Glenn Capel |
| DATE OF DECISION: | 3 August 2022 |
| CATCHWORDS: | WORKERS COMPENSATION - Assessment of costs; applicant made claim for lump sum compensation in November 2021; liability for injury not in dispute; claim resolved with an agreement that the respondent pay the applicant’s costs as agreed or assessed; applicant claimed the cost of an engineer’s report commissioned in 2019; opposed by the respondent; Held — respondent not liable for the cost of the engineer’s report which was unreasonably incurred in order to address liability issues rather than the medical dispute regarding the degree of permanent impairment; no order as to the costs of the assessment. |
| DETERMINATIONS MADE: | The Commission determines: 1. The respondent is not liable to pay the cost of the report of Joy Consulting Pty Ltd dated 28 November 2019. 2. No order as to the costs of the assessment. |
STATEMENT OF REASONS
BACKGROUND
Mark Puglisi (the applicant) is 47 years old and was employed by the State of New South Wales (NSW Police Force) as a police officer. During the course of his employment, he sustained a number of injuries including the following:
(a) 15 August 2016 – injury to his right arm/elbow, and
(b) 19 May 2017 – injury to his cervical spine.
It appears that liability was accepted by Employers Mutual Ltd (the insurer) in respect of each of his injuries.
On 23 November 2018, the applicant filed an Application to Resolve a Dispute (the Application) in matter no. 6160/18, seeking lump sum compensation in respect 2% whole person impairment of the right upper extremity due to injury sustained on 15 August 2016, and 17% whole person impairment of the cervical spine due to injury sustained on
19 May 2017.The applicant’s claim was referred to an Approved Medical Specialist, Dr Oates, but this appointment was cancelled as the assessments of the qualified specialists of each party were identical.
On 4 January 2019, the insurer agreed to resolve the applicant’s claim for 15% whole person impairment of the cervical spine and 2% whole person impairment of the right upper extremity.
On 16 January 2019, the applicant filed an Agreement to Discontinue, and it was noted that the parties had executed a Complying Agreement reflecting the above settlement. There was also an agreement that the respondent pay the applicant’s costs. It appears that the parties also agreed to resolve the applicant’s claim for lump sum compensation for pain and suffering pursuant to s 67 of the Workers Compensation Act 1987 (the 1987 Act) in the sum of $15,000. The Complying Agreement that was executed in January 2019 is not in evidence.
On 30 August 2019, the applicant sustained a further injury to his cervical spine when he was involved in a motor vehicle collision during the course of his employment. Although it is not apparent from the evidence, it appears that the insurer accepted liability in respect of this injury in September 2019.
On 4 October 2019, the applicant’s prior solicitor, Mr Love, retained a consulting engineer, Alan Joy, of the Joy Consulting Group in Tweed Heads.
Mr Joy provided a Report of Traffic Engineering Investigation on 28 November 2019. He also submitted a tax invoice in the sum of $4,922.50 (inclusive of GST).
On 11 November 2020, the insurer qualified its own specialist, Dr Hopcroft. Dr Hopcroft’s report is not in evidence.
On 6 October 2021, the applicant’s current solicitor, Mr Bourke, sent a letter of instruction to a qualified specialist, Dr Oates. Dr Oates assessed the applicant via telehealth on
25 October 2021 and provided a report on 1 November 2021.On 17 November 2021, Mr Bourke served a notice of claim on the insurer in the sum of $3,300 due to injury sustained on 30 August 2019, based on 17% whole person impairment of the cervical spine, with credit for 15% whole person impairment of the applicant’s cervical spine due to injury sustained on 19 May 2017, pursuant to s 66 of the 1987 Act, and $10,000 for pain and suffering pursuant to s 67 of the 1987 Act.
On 9 March 2022, the parties entered into a Complying Agreement in respect of 2% whole person impairment of the cervical spine due to injury sustained on 30 August 2019. It was agreed that the respondent would pay the applicant’s costs as agreed or assessed.
On 23 March 2022, the applicant’s solicitor submitted a tax invoice to the respondent’s solicitor, Mr Khoshaba, in the sum of $3,443.97 (inclusive of GST) in respect of professional costs together with the following disbursements:
Date
Description
Amount
GST
Total
10/01/2022
Travel to IME Apt Dr Hopcroft East Ballina to Taree 864 km return @ $0.55/km
$475.20
$47.52
$522.72
05/12/2019
Joy Consulting Pty Ltd – Expert report
$4,475.00
$447.50
$4,922.50
Total
$4,950.20
$495.02
$5,445.22
On 23 March 2022, Mr Khoshaba requested an amended tax invoice that excluded the cost of the investigation report.
On 10 May 2022, the applicant’s solicitor lodged an Application for Assessment of Costs (the Costs Application) in respect of the above disbursements.
On 6 June 2022, a delegate of the President, Kathryn Camp, issued a Direction regarding the lodgment and service of written submissions in respect of the Costs Application.
The respondent filed written submissions on 20 June 2022 and the applicant filed written submissions on 24 June 2022.
ISSUE FOR DETERMINATION
In his submissions, Mr Khoshaba indicated that the respondent agreed to pay the applicant’s travel costs for attending the appointment with Dr Hopcroft in the sum of $522.72, even though the claim includes GST which is not payable. Therefore, this disbursement is not disputed.
The parties agree that the following issue remains in dispute:
(a) whether the respondent is liable to pay the cost of the report of Joy Consulting Pty Ltd dated 28 November 2019.
EVIDENCE
I have reviewed the evidence that is attached to the Costs Application, in addition to the letter of instructions to Dr Oates that was attached to the applicant’s submissions. I have already commented on some of this evidence above.
Joy Consulting Group investigation report
On 4 October 2019, Mr Love sought an opinion from Alan Joy, a consulting engineer of Joy Consulting Group, regarding the circumstances of the motor vehicle accident that occurred on 30 August 2019.
The letter of instructions enclosed copies of several documents, including a request for review of the Safe Driver Panel Decision, statements of various police officers, and photographs of the scene of the incident.
In the letter of instructions to Mr Joy, Mr Love stated:
“I would be grateful for you to prepare a report on the liability circumstances of the collision between police vehicle BLN-14 bearing plate number DXF-27L and private vehicle driven by Sergeant Kym McPherson bearing plate number BWG-09A that occurred at the intersection of Martin Street and Crane Street, Ballina on the 21st of September 2019.”
Letter to Dr Oates
Dr Oates was qualified by the applicant’s solicitor to provide assessments of whole person impairment of the applicant’s cervical spine and both upper extremities. The medical file included copies of diagnostic reports and reports from the treating neurosurgeon,
Dr Schwindack, the respondent’s qualified specialist, Dr Hopcroft, and the expert report from the Joy Consulting Group.In a letter of instruction to Dr Oates dated 6 October 2021, Mr Bourke provided a detailed history of the injuries sustained by the applicant during the course of his employment. He provided hearsay comments about the applicant’s recollections of the motor vehicle accident on 30 August 2019 and gave a commentary about the report of the respondent’s qualified specialist, Dr Hopcroft.
Mr Bourke commented:
“Luckily, you are not being asked to determine who was at fault for Mr Puglisi’s injury. However, we would like you to review the sections which we have highlighted in the attached Investigation report of Engineer Allan Joy dated November 2019 and to assume the following are correct, namely:
1. paragraphs 6.4 and 6.8;
2. paragraph 8.1 and 8.4;
3. paragraph 8.5 and 8.9;
4. paragraph 10.5, namely that Mr Puglisi collided with the Volkswagen Jetta at a speed of approximately 80 km/h.
If you find that Mr Puglisi’s neck and left upper limb (and possibly right upper limb) symptoms have worsened since 4 January 2019, we would like your opinion on whether the cause of the worsening was the motor vehicle accident of 30 August 2019.
…
To make it absolutely clear, we do not require your opinion on who passed who, who was on duty and who was off duty, who was driving the Volkswagen Jetta or what the driver was attempting to do at the time Mr Puglisi collided with him. We only require your opinion on whether Mr Puglisi’s neck injury has worsened or deteriorated based on an assumption that he was involved in a relatively high speed collision between his vehicle and a vehicle that was on the road in front of him.”
Mr Bourke made the following request:
“Please let us have your assessment of Whole Person Impairment (cervical spine and left and right upper limbs) arising out of the incident of 30 August 2019, taking into account the previously agreed assessment of 15% (cervical spine) +2% (left upper limb) on 4 January 2019.
In respect of the cervical spine, if it is your finding that radiculopathy is present, could you kindly make specific comment in relation to each of the six following areas namely...”
Mr Bourke also requested assessments of whole person impairment in respect of other injuries and body parts.
Report of Dr Oates
Dr Oates reported on 1 November 2021. He recorded details of the motor vehicle accident on 30 August 2019 and noted the following:
“On 30 August 2019, Mr Puglisi said he was carrying out his general duties, when he was called to assist in a police chase of a stolen car through Ballina streets. He cornered the vehicle and attempted to drive past it, causing a minor collision with damage to the front left area of the police vehicle and he was jolted by this, but he was running high on adrenalin at the time and didn’t notice any ill-effect. He then turned his vehicle and chased the stolen car and about three blocks later, an off-duty police officer joined the chase and overtook Mr Puglisi’s car at high speed and in the course of doing so, lost control of the vehicle, which started to spin and Mr Puglisi was unable to avoid a collision with the rear of the off duty officer’s vehicle at 80 kph. The other officer’s vehicle spun more but did not roll and the impact tore off the right front wheel on the police four-door, four-cylinder Hyundai sedan, driven by Mr Puglisi. He definitely felt that impact, as he had locked his left arm straight on the wheel to brace for impact. He felt a jolt of pain right up his left arm and the whole arm then went numb and stayed numb for most of the day. He had a recurrence of severe left neck pain, which took it back to the state it was in before he had ever had the nerve block. The report of Engineer, Mr Allan Joy, dated 28 November 2019 was helpful in identifying the mechanism of the aggravating injury…”
Remarkably, Dr Oates conducted his physical examination via an audio-visual link. He assessed 17% whole person impairment of the applicant’s cervical spine. This represented an additional 2% whole person impairment of the cervical spine due to the injury sustained on 30 August 2019.
SUBMISSIONS
Respondent’s submissions
Mr Khoshaba submits that no payment should be made for the report of the Joy Consulting Group as liability was not in issue and there was no reason to incur the cost of such a report.
Mr Khoshaba submits that the applicant’s suggestion that Mr Joy’s report was obtained to comment on mechanism of injury for the purpose of allowing Dr Oates to comment on the link between the motor vehicle accident of 30 August 2019 and the subsequent deterioration of his cervical spine condition is inconsistent with the letter of instructions to Joy Consulting Group dated 4 October 2019. This letter made no mention that the report was required to determine the mechanism of injury for medical or assessment related reasons.
Mr Khoshaba submits that the report was obtained for the purpose of establishing the applicant’s liability position with respect to negligence following the determination of the Richmond Local Area Safe Driver Panel which found the applicant was at fault in relation to the accident.
Mr Khoshaba submits that liability was not in issue in respect of the 2019 accident, and the applicant had previously settled a lump sum claim in respect of his neck injury sustained in 2017. The applicant was treated by Dr Schwindack, who would have been in a position to provide Dr Oates with any information required with respect to distinguishing between any pathology or mechanism of injury.
Mr Khoshaba submits that Dr Schwindack was best suited to provide an opinion on the mechanism of injury between the 2017 injury and 2019 injury, because he had treated the applicant for both injuries and he is a medical practitioner.
Mr Khoshaba submits that given the contemporaneous material available at the time prior to the investigation, Dr Oates would have had more than enough information from
Dr Schwindack’s clinical notes and reports, and a series of lay statements, to arrive at a sound medical opinion without the requirement for Mr Joy’s report.Mr Khoshaba submits that no payment should be made as the report was not reasonable. The evidence was already available, and the purpose of the report was inconsistent with the reasoning put forward in support of this application.
Applicant’s submissions
Mr Bourke submits that given the report of gross and significant exacerbation of pain, weakness, paraesthesia and restriction of movement in the applicant’s neck and left arm following the accident on 30 August 2019, it was critical to establish that this accident was causative of the need for surgery, rather than the pre-existing condition.
Mr Bourke submits that the respondent’s acceptance of liability for the applicant’s injury did not constitute an admission that this event had resulted in any whole person impairment.
Mr Bourke submits that at the time that Mr Joy was commissioned to provide a report on the circumstances of the injury, the extent of the applicant’s whole person impairment was unable to be determined, and it was unlikely to be determined for a further 12 months, given the high likelihood that the applicant would require surgery. Further, the respondent denied that the injury occurred in the manner alleged by the applicant.
Mr Bourke submits that at the time of commissioning the report of Mr Joy, the only two explanations for his injury were that the applicant lost control of his vehicle and crashed into the stationary vehicle of the other officer, or the other officer was driving at high speed and lost control of his vehicle, causing a high-speed collision, leading to the inescapable conclusion that the damage to the applicant’s cervical spine would have been much more significant.
Mr Bourke submits that the effect of accepting that the circumstances of the injury occurred as suggested by the respondent would be to deny, or render practically impossible, any claim that the applicant suffered a whole person impairment arising out of the incident on
30 August 2019.Mr Bourke submits that as the applicant has not undergone surgery, his maximum whole person impairment arising from the incident is 1%-3% (agreed at 2%). However, if he requires surgery in the future, his whole person impairment may be a further 15% or more, in which case he may have various remedies available to him.
Mr Bourke asserts that the applicant had to obtain the report from Mr Joy in order to protect his ability to make a claim for whole person impairment when his condition stabilised. The applicant denies that the purpose of the report was to establish “fault”.
Mr Bourke submits that it was more important for the applicant to establish the mechanism of injury to counter the respondent’s evidence. Mr Joy was retained to provide an opinion on the facts, and the cost of the report is reasonable and should be allowed.
Legislation
The 1998 Act
Section 335 of Pt 8 of the 1998 Act deals with the assessment of costs. It provides that an assessment of costs is to be made so as to give effect to the provisions of Pt 8 of the 1998 Act. This is the task that I am presently undertaking.
Section 336 of the 1998 Act provides that the 2016 Regulations may make provision for or with respect to excluding any class of matters from any or all of the provisions of Pt 8 of the 1998 Act.
Section 338 of the 1998 Act deals with the costs of obtaining medical and other reports. It provides that to the extent that the 2016 Regulations provide, a legal practitioner or agent is not entitled to be paid or recover the cost of obtaining a medical report or other report obtained for use in connection with a workers compensation matter or work injury damages assessment. This section would apply to expert engineering reports.
Section 347 of the 1998 Act provides for the 2016 Regulations to make provision for the assessment of costs payable in connection with a claim for compensation.
Personal Injury Commission Act 2020
Clause 5 of Sch 3 to the Personal Injury Commission Act 2020, provides for the Commission to be constituted by one non-presidential Member assigned to the Workers Compensation Division when dealing with costs assessments under the regulations. Therefore, as a Principal Member of the Commission, I am able to assess the applicant’s costs and disbursements.
The 2016 Regulation
Clause 86 provides for costs not regulated by Pt 17 of the 2016 Regulation. Relevantly, cl 86(b) provides that costs referred to in under Pt 17 of the 2016 Regulation does not include “fees for investigators’ reports or for other material produced or obtained by investigators (such as witness statements or other evidence)”. The expert report of Mr Joy falls into this category and thus is an unregulated disbursement.
Clause 88 of the 2016 Regulation provides that the maximum costs that are recoverable are the costs set out in Sch 6, except as otherwise provided by Pt 17 of the 2016 Regulation.
Clause 90(2) of the 2016 Regulation provides that no amount is recoverable for costs (including disbursements) other than those referred to in cl 86 or Sch 6 of the 2016 Regulation.
Clause 6 of Part 1 of Sch 6 of the 2016 Regulation provides that unregulated disbursements as identified by cl 86 “may be determined in accordance with the Legal Profession Uniform Law (NSW), or if that Law does not apply, then principles of fairness and reasonableness apply”. Therefore, I need to consider these provisions.
Legal Profession Uniform Law Application Act 2014
Section 59(1)(a) of the Legal Profession Uniform Law Application Act 2014 (LPUL Act) provides that regulations may be made for fixing “fair and reasonable costs for legal services provided in any workers compensation matter”.
Section 59(2) of the UPUL Act provides that “a law practice is not entitled to be paid or recover for a legal service an amount that exceeds the fair and reasonable cost fixed for the service by the regulations under this section”.
The note to s 59(2) refers to s 172(3) of the Legal Profession Uniform Law (NSW) which provides that “[i]n considering whether legal costs are fair and reasonable, regard must also be had to whether the legal costs conform to any applicable requirements of this Part, the Uniform Rules and any fixed costs legislative provisions”.
Clause 25(3) of the Legal Profession Uniform Law Application Regulation 2015 (the 2015 Regulation) provides the “fair and reasonable” costs fixed for a legal service are as specified in Pts 1, 2 and 3 of Sch 2 to that Regulation.
Item 10 of Pt 1 of Sch 2 to the 2015 Regulation provides:
“Any disbursement necessarily incurred is to be allowed except in so far as any such disbursement is of an unreasonable amount or has been unreasonably incurred and any doubts which the taxing officer/costs assessor may have as to whether any disbursement was reasonably incurred or was reasonable in amount are to be resolved in favour of the receiving party.”
REASONS
The applicant seeks that the respondent pay the sum of $4,922.50 for the cost of Joy Consulting Group investigation report.
I do not have the benefit of any correspondence that passed between the applicant and the insurer regarding the acceptance of liability with respect to the neck injury sustained on
30 August 2019. In his submissions, Mr Bourke indicated that the insurer accepted liability in September 2019.There is no evidence to suggest that the insurer disputed that the applicant had injured his neck in the accident. No claim was made for lump sum compensation until
17 November 2021, more than two years after the accident on 30 August 2019.The insurer qualified its own specialist Dr Hopcroft in November 2020. According to
Mr Bourke’s summary in the letter of instructions sent to Dr Oates, Dr Hopcroft reported that the applicant had suffered a significant injury to his cervical spine in the accident. Therefore, it is not surprising that the insurer accepted liability in September 2019, more than 12 months prior to Dr Hopcroft’s examination.Whether the respondent is liable for this cost depends on whether it was fair and reasonable for the applicant to retain Mr Joy, having regard to the nature of the dispute between the parties.
The phrase “fair and reasonable” in costs applications has been considered in several decisions.[1]
[1] Berger v Moree Plains Shire Council [2005] NSW WCC PD 152 (Berger) ; Nimbin Hotel Pty Limited v Dalton [2007] NSWWCCPD 17.
In Berger, Deputy President Fleming stated:
“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. The costs assessment task may include perusal of the Commission file documenting proceedings before the Arbitrator and the evidence and submissions made on the application for assessment of costs.”[2]
[2] Berger, [91].
The test of what is “fair and reasonable” also needs to be considered in the context of item 10 of Pt 1 of Sch 2 to the 2015 Regulation referred to above, namely whether the cost of the disbursement was unreasonable, or was unreasonably incurred.
Mr Bourke submits that it was critical to establish that the accident in 2019 gave rise to the need for surgery and that was a reason to retain the engineering expert. However, in my view, there is little merit to this submission.
There is no evidence before me that suggests that the applicant was intending to have surgery, although this was raised as an option by Associate Professor Sabet in
September 2020 and by Dr Schwindack in October 2020. Given that the insurer had accepted liability in respect of the neck injuries sustained in 2017 and 2019, and in the absence of any claim for the cost of surgery, whether the operation related to one or the other injury is irrelevant.In the absence of Dr Hopcroft’s report, it is difficult to make comment about Mr Bourke’s submission that the acceptance of liability did not mean that the insurer accepted that the applicant had suffered a whole person impairment. Whether there was an impairment is a medical dispute and in the absence of an agreement, it is a matter to be determined by a Medical Assessor. What we do know is that the insurer accepted liability for the applicant’s injury in August 2019, and ultimately paid compensation based on the views of Dr Oates.
Although Mr Bourke submits that at the time that Mr Joy was retained in October 2019, the extent of the applicant’s whole person impairment was unable to be determined, given the potential of surgery, the need to qualify an expert engineer is unclear.
With all due respect to Mr Bourke, there is no evidence before me that suggests that the applicant was intending to have surgery as early as October 2019. Whether the respondent denied that the injury occurred in the manner alleged by the applicant is irrelevant for the purposes of an assessment of impairment resulting from an accepted injury. Again the nature, severity, and extent of an injury and the degree of impairment is a matter for expert medical opinion.
There is no merit in the submission that the applicant needed the report from Mr Joy to protect his ability to make a claim for whole person impairment when his condition stabilised. The applicant did not obtain any qualified medical opinion in 2019 or 2020 which would have addressed any impairment at that time.
The applicant was able to and did in fact obtain an opinion from a qualified specialist,
Dr Oates in November 2021. The impact of any future surgery can be addressed after any operation is undertaken. Given that the applicant is an exempt worker, he is entitled to make multiple claims. It will be open to him to bring a further lump sum claim and perhaps seek Work Injury Damages.I have difficulty understanding Mr Bourke’s submission regarding the need to counter the respondent’s evidence with respect to the mechanism of injury. There was no dispute that the applicant injured his neck on 30 August 2019, and the mechanism of injury has been described in the medical evidence.
Dr Oates recorded a comprehensive history from the applicant, particularly in respect of the 2017 and 2019 injuries. Remarkably, Dr Oates was not provided with a written statement from the applicant, but he had access to medical and diagnostic reports from treating doctors that preceded and post-dated the 2019 injury. He also had a copy of the report of
Dr Hopcroft.Whilst Dr Oates indicated that Mr Joy’s report was helpful in identifying the mechanism of the aggravating injury, the doctor failed to explain why that was the case. He was asked by
Mr Bourke to assume the correctness of various facts in the report, but this could easily have been addressed in a statement from the applicant. The doctor was also directed to specifically advise whether the applicant’s neck injury had worsened or deteriorated based on a particular version of the events, so it is clear that the doctor was in no doubt as to what was asked of him.I am mindful of the letter of instructions to Mr Joy, particularly the request “to prepare a report on the liability circumstances of the collision”. This seems focussed on the question as to whether the applicant was at fault when his vehicle was involved in the collision. There was no suggestion that the report was required to address the “mechanism of injury” for the purpose of the applicant’s medical condition or for a lump sum claim.
According to Berger, I have a discretion to determine what costs are “fair and reasonable” with respect to the report of Mr Joy. I need to consider whether the cost of the disbursement was unreasonable or was unreasonably incurred.
I have been given no guidance as to whether the cost of the report is reasonable or otherwise, however, I am not satisfied that it was obtained for the purpose of the applicant’s lump sum claim which was not made until more than two years later. In my view, its purpose was for liability reasons as identified in Mr Love’s letter of instructions.
In the circumstances, I am of the view that the cost of the report of Mr Joy was unreasonably incurred, and the respondent should not be held liable to pay for this disbursement.
There has been no claim for the costs of the assessment. In the absence of such a claim, and given that no costs assessment has been undertaken, there will no order.[3]
[3] 2016 Regulation, cl 116(4).
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