Williams v Wilgarleigh Pty Limited as trustee for Neville Roberts Family Trust trading as Neville Roberts Family Settlement
[2007] NSWWCCPD 62
•22 February 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Williams v Wilgarleigh Pty Limited as trustee for Neville Roberts Family Trust trading as Neville Roberts Family Settlement [2007] NSWWCCPD 62
APPELLANT: Robert Edward Williams
RESPONDENT: Wilgarleigh Pty Limited as trustee for Neville Roberts Family Trust trading as Neville Roberts Family Settlement
INSURER:GIO Workers Compensation (NSW) Pty Limited
FILE NUMBER: WCC9821-05
DATE OF REGISTRAR’S DECISION: 16 March 2006
DATE OF APPEAL DECISION: 22 February 2007
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s assessment of costs; GST; denial of procedural fairness; costs of disbursements; Items 2.01; 2.05; 2.06; 4.04; 4.05; 4.08; 4.09; and 10.01 of Schedule 6 of the Workers Compensation Regulation 2003.
PRESIDENTIAL MEMBER: Acting Deputy President Tydd
HEARING:On the papers
REPRESENTATION: Appellant: McCabe Partners Lawyers
Respondent: Salk & Associates
ORDERS MADE ON APPEAL: 1.The decision of the delegate dated 16 March 2006 is confirmed.
2. No order is made as to the costs of the appeal.
BACKGROUND
Prior proceedings
On 1 December 2003 Robert Edward Williams (‘Mr Williams’) lodged an ‘Application to Resolve a Dispute’ in the Workers Compensation Commission (‘the Commission’) matter WCC 19068-04. Mr Williams claimed to have suffered injuries to his back left leg and sexual organ as a result of the nature and conditions of his employment as a wool presser from 6 May 2002 to 7 May 2002. Mr Williams named Wilgarleigh Pty Limited as trustee for Neville Roberts Family Trust trading as Neville Roberts Family Settlement (‘Wilgarleigh’) as the Respondent employer and sought: $17,000.00 lump sum compensation pursuant to section 66 of the Workers CompensationAct 1987 (‘the 1987 Act’); $25,000.00 compensation pursuant to section 67, and medical and related expenses pursuant to section 60 of the 1987 Act.
On 12 January 2004 Wilgarleigh filed a Reply to the Application in which it disputed all aspects of the claim.
On my review of the Commission’s files a teleconference was scheduled for 30 March 2004. However this was cancelled on 29 March 2004 following requests from Mr Williams’ solicitor dated 19 and 29 March 2004. A teleconference was conducted by a Commission arbitrator (‘the Arbitrator’) on 2 April 2004 and the dispute was resolved by consent on that day.
The Arbitrator issued a ‘Certificate of Determination – Consent Orders’ dated 5 April 2004 ordering that: the Application be amended to delete the claim relating to the nature and conditions of employment; the Applicant discontinue proceedings and dispensing with the requirement to file a Notice of Discontinuance and Wilgarleigh to pay Mr Williams’ costs of the Application as agreed or assessed. The Orders also noted the parties’ consent to filing an agreement pursuant to section 66A of the 1987 Act in respect of the claim made pursuant to section 66 and section 67 of the Act. That agreement was registered by the Commission on 1 May 2004 giving effect to the parties’ terms of settlement that Wilgarleigh pay a total of $30,000.00 to Mr Williams.
On 22 June 2005 Mr Williams’ solicitor lodged an ‘Application for Assessment of Costs’. Wilgarleigh did not file submissions in reply.
The Registrar’s decision in relation to this application, by her delegate, a Commission arbitrator, (‘the delegate’) was made on 16 March 2006. The delegate’s decision was accompanied by a ‘Statement of Reasons’. The decision is set out as follows:
“1.Pursuant to a Certificate as to Determination issued on 5 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 $5,992.52.
3.The Applicant’s costs of the assessment are assessed at $375.00.
4.The Respondent is to pay the amount of $6,367.52 to the Applicant if those costs have not already been paid.”
Lodgement of the appeal
On 13 April 2006 Mr Williams’ solicitor lodged an ‘Appeal from the Registrar’s Determination on Costs’.
On 9 May 2006 the solicitor for Wilgarleigh lodged submissions in reply to the Appeal. Wilgarleigh is insured by GIO Workers Compensation (NSW) Pty Limited.
ON THE PAPERS
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.”
Neither party has made submissions in respect of the requirement for a formal hearing. Neither party has sought to adduce fresh evidence. Following my consideration of all of the 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, DISCUSSION AND FINDINGS
Issues in dispute
In correspondence dated 24 May 2006 addressed to the Commission Mr Williams’ solicitor submitted that the Insurer “is illegally using the services of costs consultants” and in his view “costs consultants do not come under section 337 of the [1998 Act] and therefore whatever they state in their letter dated 09.05.2006, is irrelevant.” As I understand the submissions they take issue with the Insurer’s provision of instructions to act in the appeal proceedings to “Salk & Associates Legal Costs Consultants” and the filing of submissions in reply made by Belinda J Salk, solicitor on behalf of the Insurer.
Section 337 provides:
“337 Maximum lawyer and agent costs
(1) The regulations may make provision for or with respect to the following:
(a) fixing maximum costs for legal services or agent services provided to a claimant, an employer or an insurer in or in connection with any workers compensation matter or work injury damages matter,
(b) fixing maximum costs for matters that are not legal services or agent services but are related to a claim for compensation or work injury damages (for example, expenses for witnesses or medical reports).
(2) Regulations under this section can fix costs and amounts by reference to costs and amounts fixed by regulations under the Legal Profession Act2004 .
(3) A legal practitioner is not entitled to be paid or recover for a legal service or other matter an amount that exceeds any maximum costs fixed for the service or matter by the regulations under this section.
(4) An agent is not entitled to be paid or recover for an agent service or other matter an amount that exceeds any maximum costs fixed for the service or matter by the regulations under this section.
(5) This section does not entitle a legal practitioner to recover costs for a legal service or matter that a court or costs assessor determines were unreasonably incurred.
(6) The power under this section to make regulations fixing maximum costs for services or matters includes power to make regulations to provide that no amount is recoverable for a particular service or matter or class of services or matters, with the result that a legal practitioner or agent is not entitled to be paid or recover any amount for the service or matter concerned.”
I have considered section 337 of the 1998 Act and I am unable to identify the ‘illegality’ asserted by Mr Williams’ solicitor nor do I consider the submissions relevant to my determination of the issues raised on appeal. Proceedings before the Commission do not require legal representation and the provision relied upon permits the payment of costs to an agent. I note that the Insurer was self represented in the substantive proceedings and it has now appointed a representative to act in these proceedings. Whilst I am not satisfied on the evidence before me that the representative has filed a Notice of Representation as required under Part 7 of the Workers Compensation Commission Rules 2006 (‘the Rules’) I have determined that this omission is an irregularity only and I exercise my discretion to dispense with compliance with Rule 7.1 of the Rules. I also note that Mr William’s solicitor served his correspondence dated 24 May 2006 on the Insurer and not the Insurer’s representative. In correspondence dated 20 February 2007 the representative advised Mr William’s solicitor, and the Commission, that she had not been served and accordingly she could not provide submissions in reply. Ultimately the Commission provided the Insurer’s representative with a copy of Mr Williams’ solicitor’s correspondence and the representative provided submissions in reply dated 22 February 2007 in which she asserted that the correspondence was irrelevant to the matters raised on appeal. For the reasons set out above I accept this submission. I will now consider the matters raised on appeal relevant to the delegate’s assessment of costs.
Mr Williams’ solicitor submits that the delegate erred in law in not allowing an increase in costs in respect of items 2.01; 2.06; 4.05; 4.08 and 4.09 of the Compensation Costs Table (‘the Table’) set out in Schedule 6 of the Workers Compensation Regulation 2003 (‘the WC Regulation’). Mr Williams’ solicitor also submits that the delegate denied him natural justice in determining the application of GST in the absence of submissions from the parties. It is further submitted that the delegate erred in determining the items claimed pursuant to the Table and disbursements. These submissions are set out below. Wilgarleigh’s solicitor’s submissions are set out below.
Following consideration of the relevant legislation I will deal with each disputed item in turn. The following matters are in dispute:
·whether the delegate erred in determining Items 2.01; 2.05; 2.06; 4.04; 4.05; 4.08; 4.09 and 10.01 of the Table;
·whether the delegate erred in determining the costs of disbursements, and
·whether the delegate erred in determining the application of GST.
The relevant legislation
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 decisions: Orellana Fuentes v Standard Knitting Mills Pty Ltd & Anor [2003] NSWCA 146 (‘Fuentes’); Berger v Moree Plains Shire Council[2005] NSWWCCPD 152 (‘Berger’); Orr v Direct Couriers (Australia) Pty Ltd [2004] NSW WCCPD 28 (‘Orr’); Flegerbein v Tom B Blackburn Pty Ltd [2006] NSWWCCPD 30 (‘Flegerbein’), and Chapman v Gosford City Council [2006] NSWWCCPD 4 (‘Chapman’) and need not be canvassed again in this decision.
I find that the WC Regulation and Legal Profession Regulation2002 (‘the LP Regulation’) apply as the order for the payment of costs was made on 5 April 2004 (see discussion in Woodbury v Miles [2006] NSWWCCPD 55). Additionally I note that the delegate’s assessment was conducted on 16 March 2006. Of particular relevance to the matters raised on appeal is clause 84 of the WC Regulation which fixes the maximum costs recoverable by legal practitioners and agents to those set out in the Table. The maximum permissible under the Table has been considered by the Commission in a number of decisions including Berger and Orr. These decisions set out the Commission’s reasoning and application of the authority provided in Fuentes in respect of the maximum amount allowable under the Table being the maximum total for the type of activity/event set out in Column 4.
Clause 110 provides the Registrar with 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 of costs for the work concerned. Clause 119(1) 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. An error of law arises only where the discretion can be said to have miscarried because it has been exercised unfairly and unlawfully (see discussion in Flegerbein at paragraphs 27 – 29).
The claim for disbursements must be assessed pursuant to Schedule 2, Pt 1, Item 10 of the LP 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.” 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).
Did the delegate err in determining Items 2.01; 2.05; 2.06; 4.04; 4.05; 4.08; 4.09, and 10.01 of the Table?
Items 2.01; 2.06; 4.05; 4.08, and 4.09
Mr Williams’ solicitor submits on appeal that the delegate erred in his determination of these items as he applied the WC Regulations and failed to take into account the amendment to the WC Regulation made in 2006. Wilgarleigh submits that the delegate’s decision is correct. The amendment which increased the allowance for these items was the Workers Compensation Amendment (Costs in Compensation Matters) Regulation 2006. The amendment was gazetted and commenced on 17 March 2006. The delegate’s assessment is dated 16 March 2006. Accordingly the amendments took effect after the delegate’s assessment and they have no application (see discussion at paragraph 17 of this decision). I therefore reject this ground of appeal.
Item 2.05
Mr Williams’ solicitor claimed $100.00 pursuant to Item 2.05 for the costs of briefing a factual investigator. The delegate considered the proceedings; the nature of the dispute; the limited facts which could have been elicited at the time Mr Williams’ solicitor obtained instructions, and relied upon the authority provided in Berger in disallowing the claim.
On appeal Mr Williams’ solicitor submits that: in the absence of submission from Wilgarleigh the claim should be allowed; the delegate failed to review the file and consider the Report as required; briefing a factual investigator was necessary; it would be inequitable not to allow the costs of briefing a factual investigator as the Commission has allow reports in other matters, and insurers also obtain such reports and they are not subject to review. Wilgarleigh submits that engaging an investigator was not justifiable and the fees claimed are excessive. I have reviewed the file in its entirety and the Report. The claim was confined to lump sum compensation and medical expenses. On my assessment the matter was relatively straightforward. In my view it was not reasonable to carry out the work to which the costs relate. Further I have considered Mr William’s submissions on appeal that in the absence of an objection from the Respondent the delegate should allow the full costs claimed and I find them to be misconceived (see discussion in McCaffery v JG 7 DG Harris [2006] NSWWCCPD 317 at paragraph 25). I find no error in the delegate’s determination of this item. Therefore I reject this ground of appeal.
Item 4.04
Mr Williams’s solicitor claimed $60.00 for lodging an objection to a subpoena. The delegate disallowed the claim on the basis that “There is no evidence in the file of an objection being lodged to a Direction for Production…” On appeal Mr William’s solicitor submits that as there was no objection from Wilgarleigh the delegate should have allowed the claim and that an inspection of the Commissions would reveal that privilege was claimed over a number of documents. Wilgarleigh submits that unless there is evidence of lodgement of an objection the claim should not be allowed.
Item 4.04 of the Table applies in relation to the costs incurred in “Lodging an objection to a request for a direction for the production of documents”. I have reviewed the Commissions files and I confirm the delegate’s finding that there is no evidence that an objection was filed to establish an allowance under Item 4.04 of the Table. I therefore reject this ground of appeal.
Item 10.01
Mr Williams’ solicitor claimed $187.50 for all work associated with instructing an agent to act and provided a list of eight dates in support of the claim. However no details of activities were specified. The delegate determined that “There is no evidence of an Agent being instructed.” The delegate also relied upon the authority provided in Dunn v Port Macquarie RSL Club Limited [2004] NSWWCCPD 33 (‘Dunn’) in disallowing the claim.
On appeal Mr Williams’ solicitor submits that the agency fees were claimed in respect of filing and inspecting documents and claiming privilege. Wilgarleigh submits that Mr Williams’ solicitor is attempting to make a claim that is not encapsulated under Item 10.01 and no allowance should be made. As set out I have not located any objection ‘lodged’ by Mr Williams’ solicitor or his agent to substantiate the activity in relation to a claim for privilege or any determination by the Arbitrator of that claim. In respect of the claim for inspecting documents Deputy President Fleming held in at Dunn at paragraph 41 that to allow the recovery of fees paid to an agent for inspection and photocopying of documents produced under direction fell within the type of activity envisaged under Item 4.05 of the Table and to allow the claim would lead to recovery of an amount exceeding the maximum allowable. I see no error in the delegate’s determination in circumstances where the claim under Item 4.05 was allowed in the maximum.
In relation to the claim as it relates to lodgement again I note that Item 4.01 was allowed in the maximum and I am satisfied that the Commission’s procedures permit lodgement by a less costly means than that claimed by Mr Williams’ solicitor. Therefore I do not view the costs claimed as ‘fair or reasonable’. I apply the reasoning set out in Dunn and Flegerbein in rejecting this ground of appeal.
Did the delegate err in determining the costs of disbursements?
The Report
Mr Williams’ solicitor sought $4,129.07 for the costs incurred in obtaining a factual and liability report (‘the Report’). The delegate disallowed the claim and relied upon the authority provided in Commission’s decision in Berger. The delegate considered the nature of the claim, and the issues in dispute between the parties and determined that it was not reasonably necessary to obtain the Report. Further the delegate found that “There is no evidence that the Report contains factual or investigative information other than what could have been obtained by the Applicant’s solicitor when obtaining instructions.”
On appeal Mr Williams’ solicitor again submits that in the absence of objections the costs should be allowed as claimed. I have considered this submission at paragraph 22 of this decision and for the reasons set out I reject this ground of appeal. Additionally Mr Williams’ solicitor again refers to his submissions made in relation to Item 2.05 in stating that it was necessary to instruct an agent to act. I have also considered this submission at paragraph 22 of this decision and for the reasons set out I reject this ground of appeal. Mr Williams’ solicitor also submits that the delegate failed to consider the Commission’s files in conducting his assessment. I find evidence to the contrary. The delegate’s reasons clearly state under Item 2.05 that he perused the Report.
On my review I note that Mr Williams’ solicitor instructed the agent 11 months prior to filing the ‘Application to Resolve a Dispute’ clearly at that time Mr Williams’ solicitor was not apprised of the issues disputed by Wilgarleigh. Further, in my view much of the Report is unnecessary to the claim made with the exception of Mr Williams’ statement. However that statement is unsigned and not witnessed and it contains details of the symptoms Mr Williams experienced nine months prior to the lodgement of the Application. In my view, the statement as filed has limited value and could not be seen as ‘necessary’ in pursuit of the claim. Mr Williams’ solicitor did not claim the taking of a statement under Item 2.01 or 2.04A in circumstances where the Commission’s procedures require the filing of all relevant material at the time of lodgement. I note that when compared to the costs of commissioning the Report these items provide a more reasonable cost for obtaining a statement from the injured worker. Additionally Mr Williams’ solicitor’s failure make a claim under the Table does not of itself satisfy me that the costs of the Report were ‘necessarily incurred’.
I have considered the relatively straightforward nature of the claim; the issues in dispute; the contents of the Report (including a substantial amount of information relevant to Mr Williams’ wages which were not in issue), and the delegate’s reasons for disallowing the Report. In my view, the delegate’s reasons demonstrate a proper application of the test required by the LP Regulation. Item 10 of the LP Regulation requires that in the event that the disbursement was not found to be ‘necessarily incurred’ the issue is to be resolved in favour of the receiving party. The delegate resolved the dispute in favour of Wilgarleigh.
I am not satisfied from the submissions on the appeal that there is any proper basis for interfering with the exercise of the delegate’s discretion (see discussion in Nebauer v Hunter Area Health Service [2004] NSWWCCPD 60 at paragraph 19 and Green v Chris McLeod Cotton Picking Pty Limited [2006] NSWWCCPD 51 at paragraphs 24-26). I therefore reject this ground of appeal.
Did the delegate err in determining GST?
The delegate referred to the Commission’s decision in Berger as authority that GST on the items set out under the Table is not allowable.
On appeal Mr William’s solicitor submits that he was denied natural justice by the delegate who determined the issue in the absence of submissions from the parties and that the delegate erred in law in finding that the award of costs could not be increased by the amount of any GST payable. Further it is submitted that “section 109 of the Australian Constitution” provides that Commonwealth legislation prevails over state legislation to the extent of any inconsistency and as GST is a Federal tax it should be applied automatically by the delegate.
In my view the legal representatives were or should be aware of the issues arising in relation to the assessment. They were provided with the opportunity to make submissions and Mr Williams’ solicitor availed himself of that opportunity. The applicable law was, or should be well known to the legal representatives. Accordingly I see no error in the delegate’s determination of this issue in the absence of specific submissions. Further, Mr William’s solicitor’s submissions seeking to raise constitutional grounds are misconceived as in my view no inconsistency arose. The WC Regulations were silent in respect of an allowance for GST and accordingly the delegate followed the authority provided in the decision of Fuentes that the maximum allowable as set out in the Table was permissible. The maximum allowance under the Table has been held to be a discretionary allowance based on what is a fair and reasonable allowance (see discussion in Dunn). Since the date of the decision the WC Regulation has been amended to specifically provide for the addition of GST to the professional costs incurred (Clause 123(1)). The amendment took effect from 17 March 2006. The application of GST has been considered by the Commission in a number of decisions including Chapman at paragraphs 14-18 and Willis v SPL Group Ltd [2007] NSWWCCPD 32 at paragraphs 32-36. I adopt the reasoning set out in these decisions in finding that the work was performed and the delegate assessed the costs before the relevant amendment took effect. Accordingly I find no error in the delegate’s determination not to allow GST. I therefore reject this ground of appeal.
Summary
I have determined the disbursements and professional costs challenged by Mr Williams’ solicitor as follows:
Professional Costs
The delegate’s allowance of the maximum of $500.00 for the claim under Item 2.01 is confirmed.
The delegate’s disallowance of the claim under 2.05 is confirmed.
The delegate’s allowance of the maximum of $500.00 for the claim under Item 2.06 is confirmed.
The delegate’s disallowance of the claim under 4.04 is confirmed.
The delegate’s allowance of the maximum of $500.00 for the claim under Item 4.05 is confirmed.
The delegate’s allowance of the maximum of $500.00 for the claim under Item 4.08 is confirmed.
The delegate’s allowance of $250.00 for the claim under Item 4.09 is confirmed.
The delegate’s disallowance of the claim under 10.01 is confirmed.Disbursements
The delegate’s disallowance of the costs of the Report claimed as a disbursement is confirmed.
The delegate’s disallowance of GST is confirmed.
DECISION
The decision of the delegate dated 16 March 2006 is confirmed.
COSTS
Mr Williams’ solicitor seeks the costs of the appeal in the amount of $687.50. Wilgarleigh submits that the costs should not be allowed and that the Respondent should be awarded costs as the submissions filed by the Applicant are mostly irrelevant and unnecessary and the appeal has had the effect of unnecessarily increasing the costs and the length of the matter.
The Appellant has not been successful on appeal. However, pursuant to section 341(4) of the 1998 Act, the Commission may not order the payment of costs by a claimant unless satisfied that the claim was frivolous or vexatious, fraudulent or made without proper justification. I have considered the submissions made on appeal and I am not satisfied that the claim falls into any of these categories. In my view, it is appropriate that I make no order as to the costs of this appeal.
Elizabeth Tydd
Acting Deputy President
22 February 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ELIZABETH TYDD, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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