Willis v SPL Group Ltd
[2007] NSWWCCPD 32
•2 February 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE REGISTRAR IN RELATION TO COSTS
CITATION:Willis v SPL Group Ltd [2007] NSWWCCPD 32
APPELLANT: Leonard Willis
RESPONDENT: SPL Group Ld
INSURER:QBE Workers’ Compensation (NSW) Ltd
FILE NUMBER: WCC16466-05
DATE OF REGISTRAR’S DECISION: 20 February 2006
DATE OF APPEAL DECISION: 2 February 2007
SUBJECT MATTER OF DECISION: Appeal against the Registrar’s decision in relation to costs: lack of procedural fairness; adequacy of reasons; professional costs - claims under Items 2.01, 2.06, 4.05, 4.08 and 4.09 of the Compensation Costs Table in Schedule 6 of the Workers Compensation Regulation 2003; whether maximum costs specified in the Table before 17 March 2006 are inclusive of GST.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Maurice May Lawyers
Respondent: In-House Legal Department, QBE Workers’ Compensation (NSW) Ltd
ORDERS MADE ON APPEAL: The Registrar’s determination of Mr Willis’ costs in this matter, dated 20 February 2006, is amended in accordance with these reasons.
The Respondent, SPL Group Ltd is to pay the Appellant, Mr Willis $275 inclusive of GST in respect of his costs in the appeal.
BACKGROUND
On 2 March 2006, Leonard Willis filed an appeal against the Registrar’s assessment of costs in proceedings determined by a Commission Arbitrator. The Respondent to the appeal is SPL Group Ltd (‘SPL’) and SPL’s workers compensation insurer is QBE Workers’ Compensation (NSW) Ltd (‘QBE’). No ‘Notice of Opposition to the Appeal’ has been filed by QBE.
Mr Willis was born on 1 September 1947 and is aged 59. He is employed as a packer/leading hand with SPL at Smithfield. On 15 August 2002, in the course of his employment, Mr Willis tripped over a metal pole injuring his left knee. He subsequently made a claim for workers compensation.
On 12 February 2004, the Commission registered Mr Willis’ ‘Application to Resolve a Dispute’ in respect of his claim for weekly benefits. QBE lodged a ‘Reply’ on 3 March 2004. On 20 April 2004, an Arbitrator conducted a teleconference with the parties in the course of which the parties came to an agreed resolution of the issues in dispute. On 21 April 2004, the Arbitrator issued a Certificate of Determination in the following terms:
“1. That the Respondent pay the Applicant weekly compensation at the rate of $183.85 from 9 January 2003 to 9 March 2003 and from 18 June 2003 to 30 July 2003 (not including 25 and 26 June 2003) under s 40 of the Workers Compensation Act 1987.
2. That the Respondent pay the Applicant’s costs as agreed or assessed.”
On 21 October 2004, the Commission registered a section 66A Lump Sum Agreement pursuant to which SPL agreed to pay $1,250 to Mr Willis in respect of a 1% whole person impairment.
On 26 September 2005, the parties having failed to agree on the costs payable, Mr Willis’ solicitors lodged an ‘Application for Assessment of Costs’ with the Commission. The Registrar delegated the assessment of costs to an Arbitrator (‘the Delegate’) who made a determination dated 20 February 2006. The Certificate of Determination stated:
“1. Pursuant to the registration of a Section 66A Lump Sum Agreement on 21 October 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 $2,384.75.
3. There are no costs of the assessment.
4. The Respondent is to pay the amount of $2,384.75 to the Applicant if those costs have not already been paid.”
The relevant parts of the Delegate’s Statement of Reasons for his decision are referred to below.
ISSUES IN DISPUTE
Mr Willis’ solicitors submit the Registrar failed to accord them procedural fairness, failed to provide adequate reasons for the decision, and erred in the determination in respect of their claims under Items 2.01, 2.06, 4.05, 4.08 and 4.09. They also submit the Registrar erred by failing to allow recovery of an additional amount in respect of GST payable on their professional costs. As stated above, No ‘Notice of Opposition to the Appeal’ has been filed by QBE. Mr Willis’ solicitors’ submissions are considered below.
ON THE PAPERS REVIEW
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.”
Having regard to Practice Directions Numbers 1 and 6 and the documents before me, Mr Willis’ solicitors not having made any 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.
SUBMISSIONS, DISCUSSION AND FINDINGS
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’) applicable at the time of the Delegate’s assessment, was 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 (‘Nebauer’), at paragraph 19; Berger, at paragraph 136.
Clause 84 of the 2003 Regulation fixed the maximum costs recoverable by legal practitioners and agents at those set out in Schedule 6, except where otherwise provided in Part 19.
Mr Willis’ solicitors submit that the Registrar denied them procedural fairness and failed to give adequate reasons for the decision. In relation to the latter, they identify claims under a number of professional costs Items as being in dispute. Mr Willis’ solicitors also submit that an additional amount in respect of GST payable on their professional costs should be allowed. These submissions are considered below.
Procedural Fairness
Mr Willis’ solicitors submit the Registrar denied them procedural fairness by not inviting them to file written submissions. Mr Willis’ solicitors’ ‘Application for Assessment of Costs’ was received by the Commission on 26 September 2005. Attached to this was their Bill of Costs dated 2 June 2004. On 29 September 2005, the Commission wrote to Mr Willis’ solicitors requesting “a copy of the order or agreement that entitles the Applicant to assessment of costs, together with copies of all documentation relevant to the costs negotiations”. Mr Willis’ solicitors responded by letter dated 4 October 2005 enclosing a copy of the section 66A Lump Sum Agreement, the Certificate of Determination and copies of correspondence between themselves and QBE.
On receipt of this letter, the Commission wrote to QBE on 6 October 2005 requiring submissions in reply to be filed within 14 days, and noting that Mr Willis’s solicitors would be given a further seven days after service of QBE’s submissions to file and serve submissions in reply. On the same day, the Commission also wrote to Mr Willis’ solicitors enclosing a copy of the letter sent to QBE and advising that the Applicant would be given a further seven days after service of the Respondent’s written submissions to file and serve written submissions in reply. QBE responded by letter dated 24 October 2005, enclosing “all correspondence in respect of costs”, noting that “this document has been served on all parties today”, and enclosing a copy of the letter dated 24 October 2005 sent to Mr Willis’ solicitors. No submissions in reply were filed by Mr Willis’ solicitors and, on 9 January 2006, the Commission notified the parties that the matter had been referred to a costs assessor for determination.
In the Statement of Reasons for his decision, the Delegate stated:
“7. The principal issues in dispute are the Applicant’s claims for Items 2.01, 2.06, 4.05, 4.08 and 4.09. The parties were invited to file written submissions but no written submissions have been filed by either party and in those circumstances the claims by the Applicant do not have a basis on which I can make a determination and further there is no correspondence on the file with submissions on these items.
In the circumstances I allow the amount conceded by the Respondent.”
Mr Willis’ solicitors state they were “never invited to file Submissions in the absence of Submissions from the Respondent”. They contend it is factually incorrect for the Delegate to assert that the Applicant was invited to make written submissions. They were only invited to make written submissions as a response to written submissions from the Respondent, and since the Respondent did not file any written submissions, “[n]ot unnaturally, the Applicant did not file any written submissions”. They submit that “[i]f the Registrar felt that he or she lacked sufficient information to assess the matter, then Submissions should have been requested of the parties, as a matter of procedural fairness”.
Mr Willis’ solicitors also state they are:
“astonished that in circumstances where the Registrar feels there is a lack of information from both parties, the Registrar chooses to accept the concessions made by the Respondent as a matter of course. There is no basis for this in law. The Registrar provides no reasons for accepting the Respondent’s position over the Applicant’s claim ... The Applicant submits that the Registrar’s reasons are manifestly inadequate in that they give no consideration as to why the Respondent’s view should be preferred to the Applicant’s and give no consideration to such material as is available to the Registrar.”
Pursuant to clause 103(1) of the 2003 Regulation, the Registrar has an obligation not to determine an application for assessment of costs unless the Registrar has given the parties a reasonable opportunity to make written submissions in relation to the application, and the Registrar has given due consideration to any submissions made. In my view, the principal opportunity for the applicant to make submissions in respect of an ‘Application for Assessment of Costs’ is at the time of submitting the Application. It is implicit that in making the Application, the applicant would seek to support the claim for particular costs and disbursements by making a submission in relation thereto. This follows from the assessment of costs being a matter for the discretion of the Commission (section 341 of the 1998 Act) and, specifically, the requirement that the Registrar, in assessing a bill of costs pursuant to clause 105(1) of the 2003 Regulation, must consider (a) whether or not it was reasonable to carry out the work to which the costs relate, (b) whether or not the work was carried out in a reasonable manner, and (c) the fairness and reasonableness of the amount of the costs in relation to that work. While there is no formal burden of proof, the onus is clearly on the applicant to provide the information that will enable the Registrar to make an assessment and, presumably, the applicant will seek an award consistent with the applicant’s solicitors’ bill of costs. The first opportunity for the applicant to make a submission in relation to the costs claimed is clearly at the time of lodging the Application.
In this case, a second opportunity to make submissions was available to Mr Willis’ solicitors within seven days after service of QBE’s submissions. In this context, the word ‘submissions’ does not bear any technical meaning. QBE chose to respond to the Registrar’s invitation to make submissions by filing copies of the relevant correspondence. It was then open to Mr Willis’ solicitors to make further submissions in relation to that correspondence in accordance with the Registrar’s invitation. They did not do so.
For the above reasons, I am not satisfied that the Registrar denied Mr Willis’ solicitors procedural fairness. They had two opportunities to make submissions on the professional costs Items in dispute, but did not so beyond supplying copies of the relevant correspondence between themselves and QBE.
Adequacy of Reasons and Items 2.01, 2.06, 4.05, 4.08 and 4.09
Mr Willis’ solicitors also submit the Delegate failed to give adequate reasons for his decision in that the Statement of Reasons does not explain why the Respondent’s view should be preferred to the Applicant’s and gives no consideration to such material as was available to the Registrar.
Pursuant to clause 115 of the 2003 Regulation, the Registrar has an obligation to provide a statement of reasons for an assessment of costs. However, as Deputy President Fleming recognised in Orr v Direct Couriers (Australia) Pty Ltd [2004] NSWWCCPD 28, at paragraph 48, lengthy written reasons are not required.
In my view, the Delegate erred in stating that there was no basis on which he could make a determination of the claims “and further there is no correspondence on the file with submissions on these items”. There was such a basis, namely Mr Willis’ solicitors’ Bill of Costs dated 2 June 2004 and the subsequent correspondence between the parties. I note in particular, QBE’s letter dated 15 June 2004 in which it reduced (1) the amount of $500 claimed under Item 2.01 to $250, (2) the amount of $250 claimed under Item 2.06 to $ nil, (3) the amount of $500 claimed under Items 4.05 and 4.08 to $250 each, and (4) the amount of $250 claimed under Item 4.09 to $125. By letter dated 21 June 2004, Mr Willis’ solicitors conceded the reduction under Item 4.09, made counter offers in respect of Items 2.01 ($475), 4.05 ($490) and 4.08 ($475), and disputed the reduction under Item 2.06. By letter dated 23 August 2004, QBE stated that the offer contained in its letter dated 15 June 2004 was final. Mr Willis’ solicitors responded by letter dated 21 February 2005 advising that they were prepared to accept the outstanding reductions except that in respect of Item 2.06 and referring to their letters to QBE, “of 4 December and 9 December 2003, both seeking review of a decision made by your office. We believe this correspondence qualifies as an item under 2.06.”
Thus, in relation to Items 2.01, 4.05, 4.08 and 4.09, Mr Willis’ solicitors had conceded the reductions proposed by QBE, albeit on a ‘without prejudice’ basis. In their submissions on the appeal, Mr Willis’ solicitors state that in respect of Item 2.01, while previously they had agreed to reduce their claim to $475 for the purpose of attempting to agree costs, they had now withdrawn that offer. They state that they spent in excess of the two hours allowed as the maximum time for which a claim may be made under Item 2.01 (in respect of “Obtaining instructions from client”) “in initial conference with the Applicant and in subsequent conferences and telephone discussions with the Applicant”, and submit that $500 is modest in the circumstances. In my view, the Delegate failed to give adequate reasons for allowing the amount conceded by QBE rather than that claimed by Mr Willis’ solicitors. With the benefit of Mr Willis’ solicitors’ submission on the appeal, I am prepared to accept that such a claim under Item 2.01 is fair and reasonable and should be allowed.
In relation to Item 2.06, I note that the letters dated 4 and 9 December 2003 referred to by Mr Willis’ solicitors were attached to the ‘Application to Resolve a Dispute’. It is apparent that the Delegate was not provided with these letters by the Commission when asked to make the assessment. The letter of 4 December 2003 is a follow up letter to one addressed to QBE dated 30 October 2003 in which Mr Willis’ solicitors made a “formal claim” for compensation for their client. QBE responded by fax dated 30 November 2003, although not faxed until 8 December 2003, requiring a “comprehensive explanation”. Mr Willis’ solicitors’ letter dated 9 December 2003 was a response to this fax and provided further information concerning their wage calculations.
Item 2.06 is described in column 2 of the Table as “Requesting a review of the claim from the insurer, prior to the referral of the matter to the Commission”. The word “review” is not defined. In my view, it refers to the request for a review made in the process of negotiation between the applicant’s solicitor and the insurer once the applicant’s claim has been denied and before the matter is referred to the Commission. In Mr Willis’ case, there is evidence that his claim had been denied. In his statement dated 27 January 2004, he said: “I asked my company about receiving make-up pay and they told me I was not entitled to it.”
In my view, Mr Willis’ solicitors’ letters dated 30 October, 4 and 9 December 2003 are sufficient evidence to support a claim under Item 2.06, and the Delegate erred in failing to take into consideration relevant evidence (although, as noted above, the fault appears to have been that of the Commission rather than the Delegate) and not accepting that claim. A claim for $250 in respect of one hour of work was, in the circumstances, fair and reasonable and should have been allowed.
Item 4.05 is described in column 2 of the Table as “Reviewing documentation produced under a direction of the Commission, exchanging information with the other parties and obtaining further instructions with client”. Although Mr Willis’ solicitors claimed $500 under this Item, they acknowledge that they conceded $250 for this Item prior to referring the matter for assessment. This was the amount awarded by the Delegate and, in their submissions on the appeal, Mr Willis’ solicitors state they continue to make this concession. The claim under this Item is, therefore, not in dispute.
Item 4.08 is described in column 2 of the Table as “Preparing for a conference (including providing advice to client)”. Mr Willis’ solicitors make no further specific submission in relation to their claim for $500 under this Item, the Delegate having allowed $250 (which had in any event been conceded on a ‘without prejudice’ basis). I am not satisfied, therefore, that there is any basis on which any interference with the Delegate’s award can be justified. Thus, I confirm the Delegate’s award for this Item.
Item 4.09 is described in column 2 of the Table as “Attending and participating in a conference with an Arbitrator (other than an arbitration hearing or where Item 4.10 applies [where the Arbitrator determines that the matter is complex and the matter proceeds directly to arbitration]”. Mr Willis’ solicitors claimed $250 under this Item but, in their letter to QBE dated 21 June 2004, conceded a reduction to $125, the amount allowed by the Delegate. They make no further specific submission in relation to this Item in the appeal, and I am not satisfied, therefore, that there is any basis on which any interference with the Delegate’s award can be justified. Thus, I confirm the Delegate’s award for this Item.
In summary, I have allowed $500 instead of $250 under Item 2.01, I have allowed $250 instead of $nil under Item 2.06, the award by the Delegate under Item 4.05 is not disputed, and I confirm his awards under Items 4.08 and 4.09.
GST
Mr Willis’ solicitors also claimed GST in respect of their professional costs claimed under Items in the Table. The Delegate disallowed any additional amount in respect of GST, relying on the decision in Berger.
Deputy President Fleming stated in Berger, at paragraph 156:
“The 1998 Act and the WC Regulation are silent in relation to the power of an Assessor to increase the award of costs pursuant to the Compensation Costs Table by the amount of any GST payable. Costs regulated by Schedule 6 are expressed to be the ‘maximum costs that are recoverable’ (clause 84 of the WC Regulation). There is no provision that expressly allows GST to be awarded in addition to the ‘maximum costs’ allowed in the Table.”
Mr Willis’ solicitors submit that GST is not a legal cost and is not regulated by Part 8 of the 1998 Act and Schedule 6 of the 2003 Regulation. They refer to a letter dated 12 December 2005 from Jon Blackwell, the Chief Executive of WorkCover, to John McIntyre, the President of the Law Society of NSW, in support of their contention that the expression ‘costs’ cannot be interpreted as inclusive of any GST payable. In this letter, the Chief Executive Officer of WorkCover refers to a proposed change to the 2003 Regulation “to make it clear that GST may be added to appropriate items within the Costs Table”. I note that since the Registrar’s determination in this matter, with effect from 17 March 2006, clause 123(1) of the 2003 Regulation has been specifically amended to permit costs recoverable in compensation matters to be increased “by the amount of any GST payable in respect of the service to which the cost relates, and the cost as so increased is taken to be the cost fixed by this part”.
In relation to the law in effect prior to 17 March 2006, whether the maximum costs specified in the Table are inclusive of GST is an issue I addressed in Chapman v Gosford City Council [2006] NSWWCCPD 4, at paragraphs 14 to 18. I concluded there that the maximum amount allowable for a particular activity or event in the Table must be interpreted as being inclusive of GST. I remain of that view.
In the current matter, the services were performed and the Delegate’s assessment was made before the above amendment took effect, and the Delegate was therefore correct in disallowing a claim for GST to be added to the costs claimed in respect of Items in the Table.
Costs of the Assessment
Mr Willis’ solicitors submit the Applicant should be awarded his costs of the assessment. I have reviewed the awards made by the Delegate, whose awards in respect of the claims under Items disputed by Mr Willis’ solicitors were in favour of the Respondent. The lack of success of Mr Willis’ solicitors in relation to Item 2.01 was at least in part due to the lack of supporting documentation provided by them. However, I have agreed that they should also have succeeded in respect of their claim under Item 2.06. In my view, it would, in the circumstances be fair and reasonable to allow an amount of $125 (inclusive of GST) in respect of their costs of the assessment.
Conclusion
In conclusion, while no additional amount can be allowed in respect of GST, Mr Willis’ solicitors should be allowed an additional amount in respect of their professional costs under Items 2.01 and 2.06 totalling $500, increasing the costs of the proceedings awarded by the Registrar from $2,384.75 to $2,884.75, together with $125 (inclusive of GST) in respect of their costs of the assessment, giving a total of $3,009.75.
DECISION
The Registrar’s determination of Mr Willis’ costs in this matter, dated 20 February 2006, is amended in accordance with these reasons.
COSTS
Mr Willis’ solicitors have been partially successful on the appeal. In my view, it would be fair and reasonable to allow an amount of $275 (inclusive of GST) in respect of their costs on the appeal, representing the equivalent of approximately one hour of work. The appropriate order, therefore, is: “The Respondent, SPL Group Ltd is to pay the Appellant, Mr Willis $275 inclusive of GST in respect of his costs in the appeal.”
Robin Handley
Acting Deputy President
2 February 2007
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
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