Ramsay v Lightning Ridge Mining & Steel Pty Limited

[2006] NSWWCCPD 302

WORKERS COMPENSATION COMMISSION

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

CITATION:Ramsay v Lightning Ridge Mining & Steel Pty Limited [2006] NSWWCCPD 302

APPELLANT:  Carol Anne Ramsay

RESPONDENT:  Lightning Ridge Mining & Steel Pty Limited

INSURER:Allianz Australia Workers Compensation (NSW) Limited

FILE NUMBER:  WCC8343-05

DATE OF REGISTRAR’S DECISION:             2 September 2005

DATE OF APPEAL DECISION:  9 November 2006

SUBJECT MATTER OF DECISION:                Appeal against the Registrar’s assessment of costs; fees for an investigation report.

PRESIDENTIAL MEMBER:  Acting Deputy President Tydd

HEARING:On the papers

REPRESENTATION:  Appellant:      McCabe Partners

Respondent:   Sparke Helmore Lawyers

ORDERS MADE ON APPEAL:  1. Paragraphs two and four of the decision of the delegate dated 2 September 2005 are revoked and the following orders are made in their place:

“(i) The Applicant’s costs of the substantive proceedings are assessed in the sum of $2752.75.

(ii) The Respondent is to pay to the Applicant a total amount of $3027.75 if those costs have not already been paid.”

2. Paragraph one of the delegate’s decision referring to the order for costs contained in the ‘Certificate of Determination’ and paragraph three of the delegate’s decision, awarding costs of the assessment in the sum of $275.00 were not raised on appeal and are confirmed.

3. No order as to the costs of the appeal.

BACKGROUND

Prior proceedings

1.On 29 August 2003 Carol Anne Ramsay (‘Ms Ramsay’) lodged an ‘Application to Resolve a Dispute’ in the Workers Compensation Commission (‘the Commission’), (WCC16241-03). Ms Ramsay sought weekly benefits compensation pursuant to sections 37, 38, 39 and or 40 of the Workers CompensationAct 1987 (‘the 1987 Act’). Ms Ramsay claimed that she had developed carpal tunnel syndrome affecting her left and right wrists in the course of her employment between 1996 to 25 August 2000. Ms Ramsay named Lightning Ridge Mining and Steel Pty Limited (‘LR Mining’) as the Respondent employer.

2.On 14 January 2004 LR Mining lodged a Reply to the application in which it did not dispute the injury or liability. However LR Mining disputed the quantum of the claim for weekly compensation and submitted that Ms Ramsay had “at least a partial capacity for employment and her ability to earn would not entitle [her] to a full award at the statutory rate but a lesser amount pursuant to section 40”. LR Mining also referred to the award of the NSW Compensation Court (‘the Court’) made on 14 May 2003 which required LR Mining to pay Ms Ramsay compensation pursuant to section 66 of the 1987 Act for 11% loss of use of her left arm below the elbow; 6% loss of use of her right arm below the elbow, and $10,300.00 pursuant to section 67.

3.On 19 January 2004, a teleconference was conducted before a Commission Arbitrator (‘the Arbitrator’) at which time the dispute was resolved by consent. On 13 February 2004 the Arbitrator issued a ‘Certificate of Determination – Consent Orders’ confirming that the application was discontinued and ordering LR Mining to pay Ms Ramsay’s costs as agreed or assessed. The orders also noted LR Mining’s agreement to pay Ms Ramsay an unspecified amount of weekly payments from 6 August 2001 to date and continuing.

4.On 1 June 2005, LR Mining’s solicitor lodged an ‘Application for Assessment of Costs’ and on 14 June 2005 Ms Ramsay’s solicitor lodged submissions in reply. The only issue in dispute between the parties was the costs of a Factual and Liability Summary Report (‘the Report’) provided by St George Registration & Investigation Service Pty Limited (‘SGRIS’).

5.The Registrar’s decision in relation to this application, by her delegate, a Commission Arbitrator, (‘the delegate’) was made on 2 September 2005. The decision is set out as follows:

“1.Pursuant to a Certificate of Determination dated 13 February 2004, the Respondent is liable to pay the Applicant’s costs as agreed or assessed.

2.The Applicant’s costs of the substantive proceedings are assessed in the sum of $3,559.88.

3.The Respondent is to pay the Applicant’s costs of the assessment, assessed at $275.00

4.The Respondent is, therefore, to pay the Applicant a total amount of $3,834.88, if those costs have not already been paid.”

6.The delegate’s decision was accompanied by a ‘Statement of Reasons’ which provided a: background; reference to the relevant authorities, and a summary of the issues in dispute together with an assessment, in respect of each item claimed in table format and a determination of the application.

Lodgement of the appeal

7.On 4 October 2005, Ms Ramsay’s solicitor lodged an ‘Appeal from the Registrar’s Determination on Costs’.

8.On 20 October 2005 LR Mining’s solicitor lodged submissions in reply. LR Mining’s insurer is Allianz Australia Workers Compensation (NSW) Limited (‘the Insurer’). 

ON THE PAPERS

9.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.”

10.Neither party has made submissions in respect of the requirement for a formal hearing. Additionally neither party sought to adduce fresh evidence. Having regard to the parties submissions, Practice Directions Numbers 1 and 6 and the documents that are before me 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.

SUBMISSIONS

Ms Ramsay’s solicitor’s submissions

11.Ms Ramsay’s solicitor’s submissions are wide ranging and include references to authorities regarding the approach to be adopted in interpreting legislation and the requirement for an applicant to demonstrate an error of law on appeal.  Ms Ramsay’s solicitor submits that the Report provided by SGRIS should be allowed in the full amount. The submissions can be summarised as follows:

·LR Mining’s solicitor was aware of the Report which was annexed to the Application to Resolve a Dispute and “should have objected to it when the matter was listed for teleconference.”;

·the delegate erred in law in not allowing the cost of $21.01 incurred in respect of the Lawpoint disbursement (Reid v Wattyl Australia Pty Ltd (2004) NSWWCC27);

·fees for investigators’ reports are not regulated by Part 19 of the Workers CompensationRegulation 2003 (‘the WC Regulation’) (Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 (‘Nebauer’)) and ultimately it is for the Registrar to determine if the costs incurred are fair and reasonable in accordance with clauses 105 and 106 of the WC Regulation;

·the applicant is a witness and the costs of obtaining a statement from the applicant should be allowed (Caress Annasson v The Hills Association for the Intellectually Disabled Limited and Rose v Bilo Pty Limited (2005) NSWWCC 32), and

·in the alternative the matter was complex, novel and “extremely difficult”, the “quality of the work was extremely high and that the incident occurred in country NSW and therefore the costs are fair and reasonable.”

12.Ms Ramsay’s solicitor submits that in the present case the Report was required as the Compensation Costs Table (‘the Table’) envisages the costs of briefing a factual investigator at Item 2.05 to obtain the extensive information required in workers compensation proceedings. The cost of briefing a factual investigator is included in the Table in between the legal activities requiring extensive legal work contained in Items 2.01 and 2.06 of the Table. Ms Ramsay’s solicitor submits that item 2.06 requires the “Applicant to provide” information in accordance with “Part 1 Rule 5.1 of the WorkCover NSW Guidelines, effective from 1 January 2002”. The extract provided by Ms Ramsay’s solicitor under the heading Criteria 1 – Minimum identifying information:” then sets out the information to be gathered by the insurer. Further it is submitted that the delegate erred in determining that the preparation of “…an Applicant’s Schedule of Earnings is legal work, encapsulated and absorbed by items in the table.” as there is no item in the table which allows for the preparation of an applicant’s schedule of earnings and it is reasonable to gather wage records and prepare a wages schedule therefore the costs should be allowed.

13.Ms Ramsay’s solicitor submits that the Report was attached to the Application to Resolve a Dispute and dated 25 July 2003. Ms Ramsay’s solicitor referred to the report as being very detailed and extending over some 76 pages and containing a business name search “of the defendant from page 17 through to 22”. However, contrary to these submissions the Report attached to the application is addressed to Ms Alicia Howlett and dated 3 July 2003. The Report commences with an acknowledgement that instructions to prepare the report were forwarded by Ms Ramsay’s solicitor in correspondence dated 20 May 2003 and concludes at page 8 with the heading “Conclusion”. The report does not contain the business name search as submitted. The Report also refers to an attached statement and wages schedule. However following my consideration of the evidence I am unable to identify any annexure to the Report.

14.A copy of the eight page Report dated 3 July 2003 described above was also annexed to the submissions made in reply by LR Mining’s solicitor. Following my examination of the files I am satisfied that the delegate considered this Report in determining the application for assessment of costs. Further in my examination of all relevant files I cannot locate a factual and liability summary provided by SGRIS which is dated 25 July 2003 and encompasses at least 76 pages as described by Ms Ramsay’s solicitor. Given that Ms Ramsay’s solicitor lodged the application to which the Report was annexed and that submissions in reply have been served I am satisfied that Ms Ramsay’s solicitor has been provided with an opportunity to address the issue of identifying the correct Report. In my view Ms Ramsay’s solicitor was in the best position to address this issue and he has failed to avail himself of that opportunity. Accordingly I will proceed to determine the issues raised on appeal with reference to the Report attached to the Application to Resolve a Dispute.

LR Mining’s solicitor’s submissions

15.LR Mining’s solicitor submits that Ms Ramsay’s solicitor is not entitled to recover the costs of the Lawpoint search fee (Duffy e/b Sundowner Motor Inns Limited WCC18444-03; Zingel b/b Employment Company No 1 Pty Ltd – WCC9983-03, and Reis e/b Corso De Fiori Pty Limited – WCC7171-03). Further LR Mining’s solicitor submits that Ms Ramsay’s solicitor is not entitled to recover any other fees claimed in relation to the Report for the following reasons:

·     “it was not necessary to brief an investigator to obtain [a statement from Ms Ramsay] and any such cost in obtaining a statement from the applicant is encapsulated and absorbed by item 2.01.”(Nebauer);

·     SGRIS is affiliated with Ms Ramsay’s solicitor’s firm and this is evidenced by the fact the company search attached to the submissions reveals that the company’s principal place of business is the same address as Ms Ramsay’s solicitor’s Sydney office;

·     the Commission permits filing by mail or Australian Document Exchange and therefore the costs of instructing an agent to file documents cannot be considered reasonably necessary (Franey e/b Casino Paint & Hardware – WCC4327-2004).Furthermore, any such fees are to be encapsulated and absorbed by items 10.1 and 4.05.;

·     the miscellaneous fees contained in the investigator’s account are not claimable under the current regulations, and

·     injury and liability were not in issue as Ms Ramsay had only months prior to filing the claim for weekly compensation received an award from the Court.

Issues in dispute

16.The issue raised on appeal is as follows:

·Did the delegate err in his determination of the costs of disbursements relating to the investigation report?

DISCUSSION

17.The relevant legislation concerning appeals to the Commission against an assessment of costs contained in the 1998 Act and the WC Regulation has been considered in a number of recent decisions (Berger v Moree Plains Shire Council[2005] NSWWCCPD 152 (‘Berger’); Chapman v Gosford City Council [2006] NSWWCCPD 4; Flegerbein v Tom B Blackburn Pty Ltd [2006] NSWCCPD 30 (‘Flegerbein’); Moore v PM & JH Turner [2006] NSWWCCPD 110; Orr v Direct Couriers (Australia) Pty Ltd [2004] NSW WCCPD 28 ; Canham v Kenna Investments Pty Limited[2006] NSWWCCPD 202 (‘Canham’) and Green v Chris Mc Leod Cotton Picking Pty Ltd [2006] NSWWCCPD 51 (‘Green’) and need not be canvassed again in this decision.  In Woodbury v Miles [2006] NSWCCPD 5 (‘Woodbury’) the Commission considered the date at which the law is to be applied in determining an appeal against the Registrar’s assessment of costs and held that “the applicable law is that in effect at the time the Commission issued the Certificate of Determination, including the costs order [14]”. I adopt the reasoning applied in Woodbury.

18.The matters raised on appeal require reference to clauses 82, 84, 110, 119(1) of the WC Regulation and as the cost of an investigator’s report are not regulated by Part 19 of the WC Regulations it is necessary to consider clauses 46 and 48 of the Legal Profession Regulation2002 (‘LP Regulation’) which was in force at the time of the issue of the ‘Certificate of Determination’, being 2 September 2005 (see Berger and Woodbury).

19.Clause 84 of the WC Regulation fixes the maximum costs recoverable by legal practitioners and agents to those set out in the Table contained at Schedule 6 except where otherwise provided in Part 19.

20.Pursuant to clause 110 of the WC Regulation the Registrar has discretion to determine whether or not it was reasonable to carry out the work to which the costs relate, and what is a fair and reasonable amount (emphasis added) of costs for the work concerned.

21.Of particular relevance to this matter is clause 119(1) of the WC Regulation. Clause 119(1) specifically 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.

22.Clause 82(b) of the WC Regulation specifically excludes from the costs regulated by Part 19 “fees for investigators’ reports or for other material produced or obtained by investigators (such as witness statements or other evidence)”. Clause 113 of the LP Regulation applies to the assessment of costs for investigator services (see Berger and Green). Accordingly, when claimed as a disbursement as in the present case the investigators’ fee must be assessed pursuant to Schedule 2, Pt 1, Item 10 of the LP Regulation which provides:

“SCHEDULE 2 – Costs for legal services in workers compensation matters

(Clause 46)

Part 1 - Schedule of practitioners’ costs

10 Disbursements

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.” (Emphasis added)

23.It is not reasonable to claim a cost as a disbursement that has already been the subject of a claim under Schedule 6 of the WC Regulation (Berger).

24.Clause 48 the LP Regulation contains the prescribed costs for non-legal services in workers compensation matters. The provision is set out below.

“48 Prescribed costs for non-legal services in workers compensation matters: section 196 (1) (c)

(1) This clause applies to costs for a matter that is not a legal service but is related to proceedings in any workers compensation matter.

(2) The amount of costs fixed for a service specified in Schedule 4 is the amount specified in relation to that service in that Schedule, calculated in accordance with that Schedule.

Note: Section 208O (2) of the Act requires an assessment of costs for a non-legal service to be made having regard to the costs fixed by this clause. (Section 196 (2) of the Act does not regulate the amount that a barrister or solicitor may charge a client for such a non-legal service.)”

Did the delegate err in his determination of the costs of disbursements relating to the investigation report?

25.Ms Ramsay’s solicitor sought $3,062.23 for the Report provided by SGRIS. Ms Ramsay’s solicitor’s submissions can be briefly summarised as follows: the costs of the private investigator are not subject to the Legal Profession Act 1987; the Report attached to the application was “vitally needed in regards to this case.”, and it “would seem that based upon the report” LR Mining agreed to pay Ms Ramsay the statutory rate claimed. Ms Ramsay’s solicitor also referred to a number of cases in support of its claim including Nebauer which it is submitted implied “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”. Ms Ramsay’s solicitor also submitted that it would be inequitable not to allow recovery of the investigator’s fee when insurers are able to recover these fees from the WorkCover Authority.

26.LR Mining’s solicitor confirmed that the Report was attached to the application served on 17 October 2003. However LR Mining submitted that the Report was not admitted or relied upon in proceedings. The remainder of the submissions are in similar terms to those made on appeal and set out above.

27.In determining the costs of the Report the delegate considered a number of invoices submitted to Ms Ramsay’s solicitor by SGIRS. The invoices were for “delivery” to the Commission and a “Memorandum of Costs and Disbursements Re: Carol Anne RAMSAY” dated 25 July 2003 which itemised the costs of each separate activity undertaken in preparing the Report.

28.The delegate allowed the claim in respect of the following activities because they “might fall within Clause 82(b)” of the WC Regulations:

·perusal of correspondence;

·letter to client;

·perusal of material from client;

·telephone conference with client;

·obtaining business names search;

·factual and liability summary report, and

·letter to “MPL”.

29.Accordingly the delegate allowed the claim for the costs of the Report in the reduced amount of $807.13 (including GST). The delegate disallowed all other items as “either falling outside Clause 82(b) or as not fair and reasonable (emphasis added) in the circumstances because, in summary:

·the majority of the work performed fell outside clause 82(b) of the WC Regulations;

·it is not appropriate to claim for work performed by an investigator that was in fact legal work covered by and encapsulated in the events and activities set out in the Table, and

·the preparation of an applicant’s “schedule of earnings is legal work encapsulated and absorbed by items in the Table. On the other hand, it is legitimate to retain an investigator to gather wage records, not otherwise obtainable from the employer”.

30.As set out Clause 46 of the LP Regulations requires consideration of the cost of any disbursement as ‘necessarily incurred’. Accordingly, the Report must be considered as a disbursement ‘necessarily incurred’ to be allowed. The meaning of ‘necessarily incurred’ was considered by the Commission in Asimus v J.J. Walker, A.D. Walker & Temple Pty Ltd t/as Templemore Partners [2006] NSWWCCPD 113 (‘Asimus’).

“The New Shorter Oxford Dictionary defines ‘necessarily’ to mean “by force of necessity; unavoidably; indispensably; in accordance with a necessary law or operative principle”. And ‘necessary’ is defined as “that which is indispensable; an essential, a requisite; a basic requirement of life, as food, warmth, etc” and “that which is required for a given situation [19]”.

31.As was determined in Asimus, the application of a test of ‘fair and reasonable’ by the Registrar’s delegate in determining the claim for the costs of the Report was more consistent with the terms of clause 110 of the WC Regulation than with an application of Schedule 2 of the LP Regulation. In applying clause 110 of the WC Regulation to the claim for the cost of the Report the delegate, in my view committed an error of law. Further, the delegate concluded that if the work performed by the investigator fell outside clause 82(b) of the WC Regulation it was “therefore not recoverable”. In my view this interpretation of clause 82(b) is not sustainable as the exclusion of the costs of an investigator’s report from the WC Regulations does not prohibit recovery of costs (see discussion in Berger and Asimus).

32.Having found that the decision was infected by an error of law I am entitled to determine the application as, in my opinion, it should have been determined by the delegate (clause 119 (3)(a) of the WC Regulation).

33.In my view it is necessary to consider the contents of the Report, the nature of the claim and the issues in dispute in determining whether the cost of the Report was ‘necessarily incurred’ (see discussion in Asimus and Canham).

34.The Report it contains information which can be summarised as follows:

·names, addresses and contact details for Ms Ramsay, LR Mining, the Insurer, Ms Ramsay’s medical practitioners and medico-legal specialist, and the medical practitioners appointed by LR Mining; 

·a factual and liability summary which details Ms Ramsay’s age, dependants, employment history and duties; earnings in the financial year ending 30 June 2000; receipt of a disability pension from 30 December 2001; medical history, condition, treatment and current symptoms;

·a summary of each of the medical reports filed by Ms Ramsay’s solicitor in proceedings being Drs Aalders, Arnott and Patrick; a reference an appointment having been made by the Insurer for Ms Ramsay to consult with Dr Walker; summary of the report of Dr Matheson dated 11 April 2003 relied upon by LR Mining which provided assessments of Ms Ramsay’s impairment, and a summary of Ms Ramsay’s current symptoms;

·observations of Mr Ramsay and the authenticity of the claim , and

·commentary and opinion regarding common law and workers compensation entitlements.

35.Ms Ramsay’s claim was for weekly compensation. The application contained attachments including the terms of settlement of the Court dated 14 May 2003; the medical reports of Drs Aalders, Arnott and Patrick, and a schedule of earnings prepared by Alicia Howlett and dated 20 May 2003. 

36.In the present case I am satisfied that the names, addresses and contact details set out above would be readily available to Ms Ramsay’s solicitor given that six days prior to him issuing instructions to SGRIS he had obtained an award of the Court in respect of the same client against the same employer and insurer. Accordingly, on the material available to me I am unable to accept that the costs of duplicating this material were ‘necessarily incurred’. Likewise summaries of medical reports and which were available to Ms Ramsay’s solicitor and had been filed in the Commission proceedings. In my view the provision of summaries of the medical reports and commentary regarding Ms Ramsay’s symptoms duplicates the material filed in proceedings and accordingly the costs associated with the preparation of this material was not ‘necessarily incurred’ (see discussion in Berger; Asimus and Flegerbein). Further in my view it is not reasonable for a solicitor to incur costs associated with the provision of written summaries of medical reports to be relied upon in proceedings by non-professional. I also note, in passing that Ms Ramsay’s solicitor did not contest LR Mining’s refusal to pay the costs he claimed for reviewing these same reports under item 1.01 of the Table as the claim was not brought pursuant to section 66 and 67 of the 1987 Act.

37.I do not consider the costs incurred in obtaining the Report as it relates to common law entitlements relevant or necessary in support of the claim for weekly benefits compensation made in the Commission. Further, in my view the observations of a non-professional regarding the authenticity of the claim cannot be determined to be necessary in support of the present claim particularly in circumstances where instructions to prepare the Report were provided six days following an award of the Court.

38.Provision of information in the Report as it relates to Ms Ramsay’s earnings may be necessary in some circumstances. However following my consideration of the Report I have not identified any attached Schedule of Earnings. Rather, the Wage Schedule attached to the ‘Application to Resolve a Dispute’ is dated 20 May 2003 and signed by Angelica Howlett. Accordingly I can find no evidence in support of the submission that the Report contains a Schedule of Earnings prepared by SGRIS and the costs of this work should be allowed.

39.The remaining issues for consideration are the details of Ms Ramsay’s employment history age and dependents. For the reasons set out I find the provision of instructions to a factual investigator to obtain these details six days following the Courts award pursuant to sections 66 and 67 of the 1987 Act and in circumstances where there was no evidence of any change in Ms Ramsay’s employment or dependents since that time was not necessary. On the evidence before me I am satisfied that these costs were unreasonably incurred. 

40.Following my consideration of the claim as a whole and the Report I have concluded that much of the Report either duplicates the documents filed in proceedings or was irrelevant to the claim pursued. Accordingly the costs of obtaining the Report were, in my view, unreasonably incurred.

DECISION

41.Paragraphs two and four of the decision of the delegate dated 2 September 2005 are revoked and the following orders are made in their place:

“(i) The Applicant’s costs of the substantive proceedings are assessed in the sum of $2752.75

(ii) The Respondent is, therefore, to pay to the Applicant a total amount of $3027.75 if those costs have not already been paid.”

42.Paragraph one of the delegate’s decision referring to the order for costs contained in the ‘Certificate of Determination’ and paragraph three of the delegate’s decision, awarding costs of the assessment in the sum of $275.00 were not raised on appeal and are confirmed.

COSTS

43.The Appellant has been largely unsuccessful on appeal. I make no order as to costs of the appeal.

E Tydd

Acting Deputy President

9 November 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF E TYDD, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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