Fry v Accident Compensation Corporation

IN THE DISTRICT COURT AT WHANGAREI [2014] NZACC 152 ACR 497/12 UNDER THE ACCIDENT COMPENSATION ACT 2001 IN THE MATTER OF AN APPEAL UNDER SECTION 149 OF THE ACT BETWEEN KAREN FRY Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent Hearing: On the papers at Auckland Judgment: 30 June 2014 JUDGMENT OF JUDGE L G POWELL AS TO COSTS [1] This is an application for costs on behalf of the appellant. The appellant successfully appealed a decision of Gallagher Bassett New Zealand on behalf of the respondent which had found the appellant to be vocationally independent. In my reserved judgement dated 7 March 2014 I determined that: ... for the reasons given above, the failure to take into account a number of relevant documents ... coupled with my conclusions on the accuracy with which the appellant's pain and mental state were addressed, together leads me to conclude the VIMA did not appropriately reflect the appellant's vocational capacity at the time of the assessment. Instead I conclude that there was ample evidence to show that despite the appellant's best efforts there was no way the appellant could sustain 30 hours or more per week in the work types identified. Accordingly, the appellant was not vocationally independent as at November 2011. [2] As a result of the successful appeal I indicated that the appellant was entitled to costs, which if the parties could not reach agreement upon I would determine. No agreement has been reached and both parties have now filed submissions. Submissions of the Parties [3] Both parties accept that the starting point for determination of costs in this jurisdiction is the decision of Judge Barber in P v Accident Compensation Corporation which (as summarised by Ms Becroft) provided: . The Court has a complete discretion in respect of costs. . Each case must be determined on its own particular facts. An award for costs on appeal was confined to costs that are incurred in that appeal proceeding. The normal award for a successful can't find a fully argued appeal in this jurisdiction is in the range of $2,000 - $2,500 ("although I add that it could rise to $3,000 or more if there has been more extensive evidence or submissions which were warranted"). Although a party may incur legal expenses considerably greater than the range normally awarded, a higher award will not be made unless there is something exceptional or unusual that warrants a higher award. Where an appeal has been settled prior to the hearing, an award should not exceed the normal award of costs for successful appellants following a full hearing unless, again there is something exceptional or unusual that warrant such an award. [4] Ms Woods on behalf of the appellant noted that the actual costs incurred by the appellant totalled some $8898.23 plus disbursements (expert witness report) of $1242.00. The disbursements sought are not challenged. Ms Woods submitted the appeal was 'particularly complex and warrants costs beyond the typical scale in this jurisdiction". In particular Ms Woods noted that she had in the course of preparing for the appeal filed two sets of submissions and three affidavits on behalf of the appellant, while the bundle of documents was extensive. As result Ms Woods sought costs on a 2B scale in terms of the District Court Rules 2009 as follows: Commencement of Appeal $620.00 Preparation, including submissions $1937.50 Appearance at the hearing $1550.00 [2008] NZACC 152 at paragraphs 15-21 and 39 Memoranda x 2 $725.00 Total $4882.50 [5] Ms Becroft on behalf of the respondent submitted that an award of $3500 plus disbursements was fair and reasonable, and indeed had already been offered to the appellant. Ms Becroft accepted that this was a complex case but submitted that this had been reflected in the amount offered by the respondent. In support of her submission Ms Becroft provided a useful analysis of recent costs awards in this jurisdiction which was not challenged by the appellant. This schedule showed that there had been no award of costs, of which Ms Becroft was aware, above $3000.00 in the cases she had identified dating from 2012 onwards. [6] In addition Ms Becroft submitted that due to the nature of the ACC appeals jurisdiction, scale costs under the District Court Rules 2009 were not appropriate, and referred particularly to the rehearing nature of the jurisdiction, the fact that appellants are generally entitled to costs at review even if unsuccessful, that costs orders are generally not made against appellants in the District Court, the fact that ACC pays the administrative costs of appeals to the Ministry of Justice, and the fact that there are no Court filing fees in the District Court. Taking these matters into account Ms Becroft submitted that: ... the current practice of making awards within a limited band is the best fit because of the above identified features. It recognises the fact that litigants bear little, if any risk, on costs if unsuccessful. At the same time it is sufficiently pragmatic to permit upward adjustments the cases that a more complex than the norm, or require significant additional work. [7] Finally, Ms Becroft took issue with the amounts claimed by the appellant purportedly pursuant to scale in the District Court Rules, noting that the hearing was two hours rather than a day, and disputing the amounts claimed for the filing of both the Notice of Appeal and memoranda. In Ms Becroft's submission when those amounts were adjusted the net figure payable according to the scale would be very close to the amount offered by the respondent, albeit while continuing to maintain that such scale costs were not an appropriate departure point . Discussion [8] In this case having considered the submissions of counsel I consider the amount offered by the respondent be appropriate in the circumstances. While it was a relatively complex appeal it was not significantly more complex nor document intensive than other comparable appeals, particularly those involving assessments of vocational independence. Based on the analysis of costs provided by Ms Becroft I am of the view that the amount offered by the respondent fairly reflects the level of complexity of the case as a whole, as well as the substantive success achieved by the appellant. [9] I also agree with Ms Becroft that the costs scale in the District Court Rules is not generally helpful, and that it is important to retain flexibility in this jurisdiction. Likewise I accept that if scale costs were to be applied I would not have awarded the full costs sought by the appellant for the reasons submitted by Ms Becroft. I am however somewhat sceptical of the relevance of some of the unique features of the ACC jurisdiction identified by Ms Becroft as a basis for not applying the scale costs, as matters such as the costs payable on review and the lack of filing fees, let alone the administrative expenses paid to the Ministry of Justice cannot assist in determining the appropriate measure of an award of costs in any particular appeal. Decision [10] The appellant is entitled costs in the sum of $3,500.00 plus disbursements. Judge L G Powell District Court Judge