Ricketts v JG & DG Harris

[2006] NSWWCCPD 333

WORKERS COMPENSATION COMMISSION

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

CITATION:Ricketts v J G & D G Harris [2006] NSWWCCPD 333

APPELLANT:  Paul Vincent Ricketts

RESPONDENT:  J G & D G Harris

INSURER:QBE Workers Compensation (NSW) Ltd

FILE NUMBER:  WCC9892-05

DATE OF REGISTRAR’S DECISION:             16 November 2005

DATE OF APPEAL DECISION:  5 December 2006

SUBJECT MATTER OF DECISION: Appeal against the Register’s decision in relation to costs; professional costs – claim under Item 2.06 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003; disbursements - investigator’s report

PRESIDENTIAL MEMBER:  Anthony Candy, Acting Deputy President

HEARING:On the papers

REPRESENTATION:  Appellant:      McCabe Partners Lawyers

Respondent:   QBE In-house Legal

ORDERS MADE ON APPEAL:  The decision of the Registrar dated 16 November 2005 is confirmed.

BACKGROUND

1. On 9 December 2005 Paul Vincent Ricketts (‘the worker’) filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator.

2. The Respondent to the Appeal is the partnership of J G and D G Harris (‘the employer’), insured by QBE Workers Compensation (NSW) Ltd (‘QBE’)

3. The Registrar’s decision, by her delegate, a Commission Arbitrator, (‘the delegate’) made on 16 November 2005, is as follows:

   “1.Pursuant to the Registration of a Section 66A Lump Sum Agreement on 26 June 2004 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 $6,433.94 inclusive of GST.

   3.The Applicant’s costs of the assessment are assessed at $550 inclusive of GST.

   4.The Respondent is to pay the amount of $6,983.94 inclusive of GST to the Applicant if those costs have not already been paid.”

ON THE PAPERS

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act1998 (‘the 1998 Act’) provides:

   “If the Commission is satisfied that sufficient information has been supplied to it in connection with the proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

2. No submissions have been made by the parties that the matter should be listed for oral submissions on this appeal. I have before me the whole of the substantive file, the costs file and the appeal file.

3. Having regard to Practice Directions Nos. 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.

PRELIMINARY

1. An appeal from a decision of the Registrar, by her delegate, is under clause 119 of the Workers Compensation Regulation 2003 (‘the WC Regulation’). This provides:

   “(1)A party to an application who is dissatisfied with a decision of the Registrar as to a matter of law arising in the proceedings to determine the application may, in accordance with the Rules of the Commission, appeal to the Commission constituted by a Presidential member against the decision.

   (2)The appeal is to be in the form approved by the Commission and be accompanied by the fee approved by the Commission from time to time.

   (3)After deciding the question the subject of the appeal, the Commission constituted by a Presidential member may, unless it affirms the Registrar:

   (a)make such determination in relation to the application as, in its opinion, should have been made by the Registrar, or

   (b)remit its decision on the question to the Registrar and order the Registrar to re-determine the application.

   (4)On a re-determination of an application, fresh evidence, or evidence in addition to or substitution for the evidence received in the original proceedings, may be given.”

GROUNDS OF APPEAL

1. The worker appeals on the following grounds:

   –No allowance was made under Item 2.06 of the Compensation Costs Table in Schedule 6 of the WC Regulation for a request for a review of the claim from the insurer prior to referral of the matter to the Commission.

   –The cost of the factual investigation report dated 16 October 2003 ought to have been allowed in full.

BACKGROUND TO THE APPEAL

1. An Application to Resolve a Dispute was registered with the Commission on 9 January 2004 (465-05). This sought lump sum compensation in respect of an injury received by the worker on 13 December 2001 and as a result of the nature and conditions of his employment with the employer from 1 July 1987 up to 13 December 2001. It is not necessary  to deal with the circumstances of that injury. No claim was made for weekly compensation and it appears that QBE has made payments of weekly compensation for all relevant periods.

2. On 29 April 2002 the worker was seen by Dr W G D Patrick, surgeon, at the request of the worker’s solicitor. He subsequently reported on 17 September 2002. In two separate reports that doctor made assessments of permanent impairment of the back and whole person impairment, in the alternative.

3. On 14 October 2002 the worker’s solicitor wrote to the employer and QBE enclosing a draft Application to Resolve a Dispute said to be dated 9 October 2002. That draft Application is not with the papers. The worker’s solicitor states that in response to this QBE made an offer of $6,000 in settlement on 6 December 2002.

4. On 10 February 2003 Dr Patrick again saw the worker and on 3 March 2003, in two separate reports, made assessments as to; impairment of the back and loss of use of the left and right legs, and ; whole person impairment. There is no evidence of anything happening between that date and the next event which was on 1 October 2003.

5. On 1 October 2003 the worker’s solicitor wrote to the employer and QBE requesting the insurer to review its file prior to the issue of an Application to Resolve a Dispute. Enclosed were a further draft Application to Resolve a Dispute of the same date and Dr Patrick’s reports dated 3 March 2003. The insurer was asked to respond to an offer made by that letter to settle the lump sum claim in the sum of $50,500.

6. On the same day the worker’s solicitors wrote to St George Registration & Investigation Service Pty Limited (‘the investigator’) asking for a factual investigation. Pursuant to this request the worker was interviewed on 14 October 2003 and a statement was obtained dated 16 October 2003.

7. On 30 October 2003 QBE made an offer of $20,500 in settlement of the lump sum claim and the worker’s solicitor responded on 10 November 2003 with a counter offer of $34,500.

8. On 13 November 2003 the investigator reported to the worker’s solicitor enclosing the unsigned statement of the worker.

9. On 17 November QBE made an offer of settlement in the sum of $23,750 to which the worker’s solicitor responded on 3 December 2003 with an offer of $28,000. On 11 December 2003 QBE advised that there would be no increase in its offer.

10. Accordingly on 9 January 2004 the Application to Resolve a Dispute was registered. The matter was allocated to a Commission Arbitrator and a teleconference was held on 23 April 2004 at which agreement was reached to settle the matter. The Arbitrator made the following directions:

    “(1)That the parties file with the Commission within 14 days an agreement pursuant to s.66A.

    (2)Parties to file Notice of Discontinuance within 21 days.

    (3)If neither document is filed as directed then the matter is to be struck out.”

11. On 10 May 2004 the worker’s solicitor prepared an assessment of costs in the sum of $10,739.84 which was forwarded to QBE. On 15 June 2004 QBE wrote to the Registrar requesting that the matter be listed for teleconference to discuss costs sanctions, no doubt as a result of its offer of 17 November 2003 being ultimately accepted. This was referred to the Arbitrator who conducted the teleconference to which I have referred. The question of such sanctions was not however pressed.

12. On 26 June 2004 the section 66A agreement was registered.

13. The parties entered into negotiations regarding the worker’s solicitor’s entitlement to costs and when agreement could not be reached the worker’s solicitor made an application to assess costs on 24 June 2005. Submissions were made by QBE and also the worker’s solicitor in relation to these costs and on 16 November 2005 the delegate assessed costs at $6,433.94 inclusive of GST plus $550 inclusive of GST being the cost of the assessment, making a total of $6,983.94.

14. Most of the matters in dispute between the parties in relation to costs were either agreed or resolved and there were only two matters which remained outstanding following the assessment of costs by the delegate. These are specified in paragraph 8 of this determination. I will deal with them in order.

ITEM 2.06

1. This Item in the Table to Schedule 6 relates to “requesting a review of the claim from the insurer, prior to referral of the matter to the Commission”. A claim for $500 is made on the basis that 2 hours was required to request this review. As I have earlier indicated clause 119 of the W C Regulation 2003 limits an appeal against a decision of the Registrar to a matter of law. With a view to meeting this requirement the worker’s solicitor has made submissions as to matters of law by referring to a number of well known cases. Regrettably none of these decision is in my view applicable to the facts of this case. In relation to the item in question the delegate made the following ruling:

   “This item requires the Applicant’s Solicitor to request a review of the claim from the insurer. To trigger this item a request to review an offer or some other determination made by the insurer is required. There is no evidence from the Applicant’s Solicitors of any request for review and the claim is disallowed.”

2. In relation to this matter the worker’s solicitor refers his letter of 1 October 2003 to QBE which encloses the draft Application to Resolve a Dispute and says in part the following:

   “We request that you review the claim of the Applicant prior to the referral of the matter to the Commission.”

3. QBE has made no submissions in relation to this appeal but in the assessment by the delegate of the worker’s costs did enclose copies of correspondence dealing with them. Against the worker’s solicitor’s bill of costs for this item has been written “unnecessary, no dispute”.

4. It is clear from a perusal of the papers that a smaller claim for lump sum compensation was made on the basis of the first two of Dr Patrick’s reports. On the later occasion when the doctor saw the worker he additionally assessed loss of use of both legs which he hadn’t done earlier and further claim was then made.

5. 1 October 2003 was the first occasion on which the worker’s increased claim was advised to the insurer and the employer. The delegate disallowed the item on the basis that there was no evidence of a request for review. I infer that the delegate did not have the whole of the substantive file before him when making that statement. Such statement may have been correct on the material before the delegate however it is clear to me that such a request was made. However on closer examination, I consider that the conclusion reached by the delegate to disallow the costs of this item was correct. It is not appropriate in my view to request a review of an offer made in settlement of a lump sum compensation claim while at the same time making an increased offer based on fresh evidence. I am not persuaded that the delegate erred as a matter of law in making the determination in respect of this item.

INVESTIGATOR’S REPORT

1. The worker’s solicitors sought the sum of $2,310.49 as a disbursement in relation to services rendered by the investigator. In relation to this the delegate said the following:

   “I have perused the Memorandum of Costs and Disbursements from St George Registration & Investigation Services for $2,310.49. The Applicant’s Solicitor is not entitled to claim the costs for obtaining instructions or a Statement from the Applicant. See Nebauer v Hunter Area Health Service [2004] NSW WCC PD 60. I will allow the Applicant the cost of obtaining details of the Applicant’s earnings and in that regard I allow a maximum of $500 plus GST as fair and reasonable.”

2. It is alleged that the delegate failed to take into account the factual investigation into the alleged injury and did not allow any costs for that. The worker’s solicitor refers to a number of unrelated matters where insurers obtained factual investigations. These references are of doubtful relevance. The worker’s solicitor further submits that the costs of the private investigator are not subject to the Legal Profession Act 1987 because they are not legally qualified and the Legal Profession Act 1987 only applies to legal professionals. It is said that not only was a statement obtained from the worker but there was also a business name search done and the Applicant’s wage schedule prepared. It is said to be inequitable if an applicant could not recover such costs yet an insurer with its wealth could do so in order to dispute a worker’s entitlement to compensation. It is further submitted that it was ultra vires for the Registrar to consider whether it is necessary to obtain the investigation report and also the Registrar does not have power to disallow or modify such a claim. Once again having consulted the documents provided by QBE I am unable to see the basis on which this item was objected to, however it is clear that it was.

3. I have had regard to the memorandum of costs and disbursements rendered by the investigator to the worker’s solicitor. This deals with work carried out from 1 October 2003 to 18 November 2003. Apart from obtaining the statement from the worker and having that statement typed it appears a business name search was done as well as a schedule of earnings. There is also reference to a letter to a barrister enclosing that factual report for advice. One of the disbursements claimed by the investigator is $500 plus GST in respect of that barrister’s fees.

4. In respect of this disbursement I do not accept any of the submissions made on behalf of the worker. The claim made was as I have earlier indicated a matter of no complexity at all and it was settled for a figure which QBE had offered well before the teleconference and before the Application to Resolve a Dispute was registered. The question of the cost of investigators’ reports has been dealt in a number of Presidential decisions. In Asimus v J J Walker, A D Walker and Temple Pty Limited t/as Templemore Partners [2006] NSWWCCPD 113 (‘Asimus’), Acting Deputy President Roche considered a similar claim by the same solicitor. The learned Acting Deputy President followed the decision of Deputy President Fleming in Berger v Moree Plains Shire Council [2005] NSWWCCPD 152 (‘Berger’). He held that clause 113 of the LegalProfessionRegulation 2005 was applicable and that also Schedule 3 Part 1 Item 10 of the Regulation which provides that:

   “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.”

5. Contrary to the submissions made on behalf of the worker in this regard it is necessary to look at whether the investigator’s fees were necessarily incurred, of an unreasonable amount or unreasonably incurred. I am quite unable to see that in a case of this sort the cost of the services of a private investigator could have been necessarily incurred. Additionally, I would regard such costs as being both unreasonable in amount and unreasonably incurred. I am of the view that the allowance made by the delegate in this regard namely $500 for obtaining details of the worker’s earnings cannot be supported since there was no claim for weekly compensation. Had there been an appeal by QBE in relation to these costs in my view the worker would have been entitled to nothing in relation to the investigator’s fees. There is however no such appeal. The obtaining of a business name search could easily have been done with minimal cost and effort by the solicitor, if that were required given the documents available to the worker in relation to details of his employment. Arguably the cost of taking a statement from a worker is recoverable although this was not the view taken by Deputy President Fleming in Nebauer. The same Deputy President came to a different conclusion as to this matter later in Berger. It should be noted that the delegate determined costs in this matter before Berger was decided. Following Berger it is conventionally, it seems, permitted to allow some modest amount for taking a witness statement from a worker pursuant to Item 2.04A. Were the matter free from authority, I would be reluctant to hold that the cost of taking a statement from a worker was within Item 2.04A.  However the allowance which had been made by the delegate is in my opinion more than adequate. I am not satisfied that an error of law has been established.

DECISION

1. The determination of the Registrar’s delegate dated 16 November 2005 is confirmed.

COSTS

1. I make no order as to costs of the appeal.

Anthony Candy

Acting Deputy President  

5 December 2006

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

ASSOCIATE