Smith v TBC Walker Waterloo Partners

[2006] NSWWCCPD 314

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS

CITATION:Smith v TBC Walker Waterloo Partners [2006] NSWWCCPD 314

APPELLANT:  Judith Anne Smith

RESPONDENT:  TBC Walker Waterloo Partners

INSURER:Allianz Australia Workers’ Compensation (NSW) Ltd

FILE NUMBER:  WCC 9736-05

DATE OF REGISTRAR’S DECISION:             28 September 2005

DATE OF APPEAL DECISION:  20 November 2006

SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs; fee for private investigator’s report; claims under Items 2.05, 9.01 and 10.01 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003

PRESIDENTIAL MEMBER:  Acting Deputy President Robin Handley

HEARING:On the papers

REPRESENTATION:  Appellant: McCabe Partners Lawyers

Respondent: Goldbergs Lawyers

ORDERS MADE ON APPEAL:  The Registrar’s determination dated 28 September 2005 is confirmed.

There is no order as to the costs of this appeal.

BACKGROUND TO THE APPEAL

1. On 24 October 2005, Judith Smith filed an appeal against a costs determination made by the Registrar of the Workers Compensation Commission (‘the Commission’) on 28 September 2005. The Respondent to the appeal is TBC Walker Waterloo Partners (‘the Walker Partners’) and their workers compensation insurer is Allianz Australia Workers’ Compensation (NSW) Ltd (‘Allianz’). On 23 November 2005, Allianz lodged its Notice of Opposition to the appeal.

1. Ms Smith was born on 14 March 1966 and is aged 40. On 4 November 1988, Ms Smith was employed with the Walker Partners as a farm labourer at a property called ‘Waterloo’, near Narromine, when she was injured while riding a farm motorbike in the course of checking water troughs. As a result of the accident, in which she collided with a sheep, Ms Smith claims to have suffered injuries to her neck, back and both legs, together with severe bodily disfigurement.

1. On 22 July 2003, the Commission registered Ms Smith’s ‘Application to Resolve a Dispute’, and on 12 August 2003 Allianz filed its ‘Reply’. Following a teleconference with a Commission Arbitrator on 4 December 2003, the parties agreed to terms of settlement on 20 January 2004, and, on 31 March 2004, the Arbitrator issued a Certificate of Determination setting out Consent Orders, including an order “[t]hat the Respondent pay the Applicant’s costs (including one qualifying fee), forthwith after they have [sic].agreed or assessed”.

1. On 23 June 2005, the parties having failed to agree on the costs payable, Ms Smith’s solicitors lodged an ‘Application for Assessment of Costs’ with the Commission in respect of their Bill of Costs dated 29 April 2004. Allianz’s submissions were received on 14 July 2005.

1. The Registrar delegated the assessment to a Commission Arbitrator (‘the Delegate’) who made a determination dated 28 September 2005. The Certificate of Determination stated:

“1. Pursuant to Consent Orders of the Commission of 16 April 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 $6338.97.

3. There is no order as to the costs of the assessment.”

ISSUES IN DISPUTE

1. Ms Smith’s solicitors submit the Delegate made errors of law in relation to the following professional costs and disbursement claimed:

Professional Costs
Item 2.05 - $100.00
Item 9.01 - $500.00
Item 10.01 - $187.50

Disbursement
Private investigator’s report - $2,459.36

1. The total amount in dispute, including GST, is $3,325.61.

ON THE PAPERS REVIEW

1. 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.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents before me, and the submission by Allianz that the matter can be heard ‘on the papers’, Ms Smith’s solicitors having made no 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. 

1. No application to adduce fresh evidence was made.

SUBMISSIONS, DISCUSSION AND FINDINGS

1. 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’), has recently been 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, at paragraph 19 (‘Nebauer’); Berger, at paragraph 136.

1. 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. Schedule 6 sets out the maximum costs recoverable in workers compensation matters by reference to the Compensation Costs Table (‘the Table’) at the end of the Schedule. The Table identifies particular activities or events with an item number. It is these item numbers that are referred to below.

1. Ms Smith’s solicitors submit the Delegate made an error of law by ignoring relevant material, namely their written submissions, in relation to specific claims made in their Bill of Costs. These claims are discussed below.

Professional Costs

Item 2.05

1. 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 Smith’s solicitors maintain their claim for $100.00 under this Item in respect of briefing St George Registration and Investigation Services Pty Ltd (‘St George’) (by letter dated 11 November 2002) to prepare a factual and liability summary report.

1. The Delegate did not accept that the matter was as complicated as Ms Smith’s solicitors had submitted. He commented that none of the matters referred to in the letter of instruction to St George “would appear to be particularly ‘investigatory’, as distinct from background chronology, largely within the parameter of the provision of normal client instructions. Specific Table Items make provision for allowances for such activities”. The Delegate mentioned by way of example, claims under Item 2.01 in respect of obtaining instructions from the client and under Item 4.05 for obtaining further instructions from the client after reviewing documentation produced under direction. Ms Smith’s solicitors claimed the maximum allowed under each of these Items.

1. The Delegate referred to the decision in McManus v Gosford City Council [2004] NSWWCCPD 61, where, at paragraph 21, Deputy President Fleming said:

“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 ...”

I note that Deputy President Fleming 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.”

1. The Delegate said:

“Here, the substantive attendances, at least so far as pertinent to the proceedings, effectively represented a replication of solicitors’ allowances, and where those allowances have already been made including at Items 2.01 and 4.05 and elsewhere. Here, and again as to reasonableness, effectively, the Applicant has claimed, and the Respondent has conceded, $1000, or 4 hours, at Items 2.01 and 4.05, for instructional activity. If this is said, in effect, to be relative to an ‘initial’ statement of the Applicant, and then a ‘further’ statement from her ... those conceded allowances are regarded here as eminently fair and reasonable overall, and without more. The Item is disallowed.”

1. Ms Smith’s solicitors contend that the investigation report did not solely deal with obtaining a witness statement – it also included a factual investigation and business name search. Allianz submits that the evidence obtained by the factual investigator comprised information which is properly covered by Item 2.01. It did, however, note that although there is no provision for payment for the costs of the company search under the Table, it had agreed to recommend payment for this.

1. I have examined the private investigator’s report dated 4 April 2003. It includes a factual summary, a business names search and ASIC company extract for Walker Pastoral Co Pty Ltd, and a statement by Ms Smith. Essentially, I agree with the Arbitrator’s comments. Apart from the business names search and ASIC company extract obtained via Lawpoint, the information contained in the report should have been available to Ms Smith’s solicitors as a result of taking her instructions, for which her solicitors have claimed under Items 2.01 and 4.05 at the maximum amount. I note the cost of the Lawpoint search ($20.13) was agreed to by Allianz and was not in dispute. Thus, I am not satisfied that the Delegate made any error in his assessment in relation to Item 2.05, and I reject this ground of appeal.

Item 9.01

1. The activity/event for which a claim may be made under Item 9.01 is described in Column 2 of the Table as “Conduct of any proceedings before the Commission involving the determination of substantive legal issues, including preparatory work”. This includes a claim for the cost of a costs assessment. Ms Smith’s solicitors submit they are entitled to costs of the assessment of $500, plus GST. The Delegate said:

“It is noted here that the Applicant has not succeeded on the substance of the profit costs activity or disbursement claims which remained outstanding. In the exercise of my discretion, I make no allowance as to the costs of the assessment.”

1. Ms Smith’s solicitors contend that Allianz’s solicitors failed to enter into meaningful negotiations as to the Applicant’s costs, when they replied with “recommend payment”. Allianz rejects this and submits its solicitors listed those “professional costs in agreement” in respect of which it was accepted between the parties that there was no issue.

1. I note that the outcome of the disputed claims before the Delegate was as follows:

Professional Costs
Item 2.05: $100 claimed by Ms Smith’s solicitors, Delegate allowed $Nil
Item 2.06: $500 claimed, allowed $500

Item 4.08: $500 claimed twice ie $1,000 (for a teleconference and a conciliation), Allianz conceded $500, Delegate allowed $500

Item 9.01: $500 claimed, allowed $Nil
Item 10.01: $187.50 claimed, allowed $Nil

Disbursements
Private investigator’s fee of $2,459.36, allowed $Nil
Applicant’s travel expenses of $662.34, allowed $662.34

1. In my view, the Delegate was correct in commenting that where matters of (legal) substance were involved – that is in relation to Items 2.05, 4.08, 10.01 and the private investigator’s fee - Ms Smith’s solicitors were unsuccessful. I am not therefore satisfied that the Delegate made any error in the exercise of his discretion in not allowing costs under Item 9.01.

Item 10.01

1. Item 10.01 is described in Column 2 of the Table as “All work associated with instructing an agent to act on a claim or a matter relating to a claim”. Ms Smith’s solicitors claimed $187.50 under this Item in respect of “All work associated with instructing an agent [St George] to act on re: claim”.

1. The Delegate disallowed this because Ms Smith’s solicitors had already claimed the maximum allowable under Item 4.05, and to allow for the instruction of an agency under Item 10.01 would effectively allow for the same activity twice.

1. Although apparently disputing the Delegate’s decision in relation to this Item, Ms Smith’s solicitors do not specifically address this in their submissions on the appeal, although they did discuss Item 4.05 in relation to the claim under Item 2.05, discussed above. Allianz notes “The Appellant has made no submissions” in relation to Item 10.01, but states that if the claimed instructions to the agency were in relation to photocopying documents produced under direction, then that is covered by Item 4.05.

1. I have reviewed Ms Smith’s solicitors’ Bill of Costs. I note the agency fees [in respect of St George] claimed are in relation to filing (two occasions at $20 each plus GST), photocopying (five occasions at $60 each plus GST), and preparation of costs and disbursements ($289.85). No further explanation is given. In the absence of submissions on this Item, and noting that, in my view, there is no reason why the documents could not have been filed and served through the post or via DX, that the photocopying may have been in relation to activity covered under Item 4.05, and that preparation of costs and disbursements is not claimable under clause 82 of the 2003 Regulation, I am not persuaded that the Delegate made any error in disallowing the claim under Item 10.01. I therefore reject this ground of appeal.

Disbursement

1. Ms Smith’s solicitors also dispute the Delegate’s determination in respect of their claim for the private investigator’s fee of $2,459.36 for preparing the Factual and Liability Summary Report. The Arbitrator referred to his observations in relation to Item 2.05 and said:

“It is not regarded as fair or reasonable in the circumstances of this matter for an asserted ‘investigatory’ invoicing to emerge at $2459.36 for, essentially a ‘further’ statement of the Applicant, and surrounding matters, as discussed at Item 2.01 and more especially, where maximum allowances have already been made under other Table Items and conceded. It is not regarded as fair or reasonable for any further allowance to be made including in the context of this Item. It is disallowed.”

1. Ms Smith’s solicitors state St George prepared an “Applicant’s Schedule of earnings, which went from 1987 through to 2003” requiring a thorough search of her financial records. They also rely on submissions made in their letter dated 2 August 2005. These submissions seek to draw parallels with a number of other matters, and note that St George made a factual investigation, obtained wage information and obtained a statement from a witness.

1. Allianz relies on the decision in Nebauer, where, at paragraph 18, Deputy President Fleming said “the costs involved in obtaining a worker’s statement are encapsulated and absorbed by Item 2.01”.

1. I note that in Berger at paragraph 142, Deputy President Fleming said:

“The fee for an investigator’s report, whether to obtain witness statements or other factual investigations (including a statement from the worker), may be claimed pursuant to clause 82(b) of the WC Regulation. 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 those statements, either at the time of taking instructions or at a later time, being before an application to the Commission is filed.”

1. I am not satisfied that the Delegate made any error of law or exercised his discretion unfairly or unlawfully in disallowing Ms Smith’s solicitors’ claim for this disbursement. In terms of the work undertaken by St George set out in their report, I agree with the Delegate that much of this appears to duplicate work undertaken by Ms Smith’s solicitors for which a claim was made under Item 2.01 (“Obtaining instructions from client”). No further evidence was provided by Ms Smith’s solicitors concerning the wages schedule, it was not included in the report dated 4 April 2003, and no supplementary report from St George appears to have been supplied to the Commission, nor any breakdown of St George’s fee. Apart from a statement from Ms Smith, the only additional information included with the 4 April 2003 report is the result of the business names search and the ASIC company extract obtained via Lawpoint, the cost of which has been separately conceded by Allianz. I therefore reject the appeal in relation to this disbursement.

Summary

1. The outcome of my review of the Delegate’s decision in relation to the professional costs and the disbursement disputed by Ms Smith’s solicitors is that I am not satisfied that the Delegate made any error in his decision, which should, therefore, be confirmed.

DECISION

1. The Registrar’s determination dated 28 September 2005 is confirmed.

COSTS

1. There is no order as to the costs of this appeal.

Robin Handley

Acting Deputy President  

20 November 2006

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.

ASSOCIATE