AAF v QBE Insurance (Australia) Limited

DETERMINATION OF MERIT REVIEW PANEL
CITATION:	AAF v QBE Insurance (Australia) Limited [2021] NSWPICMRP 1
APPELLANT:	AAF
RESPONDENT:	QBE Insurance (Australia) Ltd
Appeal Panel:	Katherine Ruschen Kriesen Seeneevassen Elyse White
DATE OF DECISION:	26 March 2021
catchwords:	MOtor accidents- Review panel to consider whether Merit Reviewer erred by not including the sum of approximately $8,000 said to represent non-cash payments for services rendered by the applicant for the purpose of calculating PAWE; Held- merit review decision set aside; directions made; further information is required including accountant’s records; insurer is to recalculate the claimant’s PAWE.
DETERMINATIONS MADE:	1. The single merit review decision of Merit Reviewer Koya dated 22 December 2020 is set aside and in its place the following directions are made: (a) The Claimant is to provide to the Insurer all documents provided to his accountant for the purpose of preparing the Claimant’s 2020 Income Tax Return and Amended Income Tax Return, including the supplementary sections in those tax returns, within 14 days of the date of this decision. The Insurer may request an authority from the Claimant authorising the accountant to provide this information directly to the Insurer. (b) Should the Insurer be of the view any further information or documents are required, in addition to the accountant’s records covered in the above direction, the Insurer is to issue a request for that further information within 14 days of this decision. (c) The Claimant is to provide a response to any further request for information or documents issued by the Insurer within 14 days of receipt of that request. (d) If the Claimant wishes to provide any further information or documents to the Insurer for the purpose of assessing his PAWE, not covered by the above directions, the Claimant is to provide any such information or documents to the Insurer within 14 days of this decision. (e) Once the above directions have been complied with, the Insurer is to recalculate the Claimant’s PAWE based on the information available, including any further information obtained as a result of the above directions.

Statement of Reasons

Background

The single merit review decision determined by Merit Reviewer Roohi Koya dated 22 December 2020 was referred to this Review Panel for determination under section 7.15(3) of the Motor Accident Injuries Act 2017 (the Act).
The Review Panel members confirmed they had no previous involvement with this matter, or with the above injured person. All Review Panel members also confirmed that there was no conflict or any other reason why they would be unable to approach this review with an open mind.

Review Panel Conference

An initial conference of the Review Panel was held on 8 March 2021 at 4.00 pm. Merit Reviewer Ruschen acted as the Chairperson of the Review Panel. A final conference of the Review Panel was held 24 March 2021 at 2.00 pm.

Merit Review Decision under Panel Review

Merit Reviewer Roohi Koya determined the following in the single merit review decision:

· The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:-
a)The Claimant’s pre-accident weekly earnings is $124.68 payable from 30 June 2020.
b)This determination takes effect on 22 December 2020.
c)Legal costs: Nil.

Disputes identified by the Parties

The Review Panel considered the Application for Review by AAF (the Claimant) and noted that the following aspects of the single merit review decision were disputed:

(a) Whether Merit Reviewer Koya erred by not including the sum of approximately $8,000 said to represent non-cash payments for services rendered by the Claimant for the purpose of calculating the Claimant’s pre-accident weekly earnings (PAWE).

The Claimant’s submissions

The Claimant contends prior to the motor accident he earned income in the form of both cash and non-cash payments by completing online surveys and market research.
Merit Reviewer Koya made a finding at paragraph 18 of the single merit review decision of 22 December 2020 that “the non-cash payments are linked to the applicant’s income earning activity and should be included in the calculation of the Claimant’s PAWE” However, Merit Reviewer Koya went on to note that “Some of the evidence submitted, for example, Priceline or VISA reward cards, do not show a date when the non-cash payments were earned”.
Merit Reviewer Koya excluded non-cash payments received in the period more than 12 months prior to the accident or after the accident and any records that could not be verified as falling within the relevant period (see paragraph 19 of the decision of 22 December 2020).
Merit Reviewer Koya then calculated total earnings in the relevant 12 month period immediately before the accident (30 June 2019 to 29 June 2020) in the sum of $6,483.24. This is in contrast to the Claimant’s tax return for the period 1 July 2019 to 30 June 2020 in which the Claimant declared “other income” of $15,000.
Section 7.15(2) of the Act states an application for the referral of a decision to a Review Panel may only be made on the grounds that the assessment was incorrect in a material respect.
The grounds submitted by the Claimant are that the single merit review decision contains material error in that despite accepting non-cash payments are income for the purpose of the Claimant’s PAWE, the single merit review decision went on to disregard key evidence of non-cash payments earned in the relevant year, namely his tax return for the financial year ending 2020.

The Insurer’s submissions

The Insurer submits Merit Reviewer Koya considered all documents provided and therefore has performed all elements of the assessment in accordance with the Guidelines. Further, the Insurer submits the Claimant has not provided any source documents in support of the total “other” income of $15,000 declared in his tax return such that there is no evidence as to what types of income make up this other income and no evidence to verify the amount.

Summary of documents considered

The Review Panel members confirmed that they had received and considered the following documentation:

(a)    The single merit review decision issued by Merit Reviewer Koya on 22 December 2020.

(b)    The Application, the Reply and the documents provided by the parties for the purposes of the single merit review.
(c)    The Application for review and attached documents.
(d)    The Reply and attached documents.
(e)    The Statement of Reasons issued by the Proper Officer on 22 February 2021 referring this matter to a Review Panel.

Legislation and Guidelines

In making our decision, the Panel has considered the following legislation and guidelines:

(a)    The Act.
(b)    Motor Accident Injuries Regulation 2017 (Regulations).
(c)    The Motor Accident Guidelines 2017 (the Guidelines).

Factual background

The Claimant was injured in a motor accident on 30 June 2020.
There is no dispute that the Claimant is an “earner” for the purpose of the Act.
At the time of the accident, the Claimant generated income as an “earner” by completing online market surveys and research. He received income in the form of both cash and non-cash payments (e.g. reward cards/vouchers) for this work.
There is also no dispute that non-cash payments of the type received by the Claimant form part of his earnings “as an earner” and therefore, subject to verification of earnings, are to be included for the purpose of calculating the Claimant’s PAWE. ATO Interpretative Decision 2002/822 also supports the position that payment in cash or by way of a gift as an incentive to participate in market research is assessable income. It follows from this that it is to be included in calculation of an injured person’s PAWE.
For the purpose of calculating his PAWE the Claimant provided various documents including his “Amended Individual tax return 2020”, “Taxation Estimate” worksheet for the year ended 30 June 2020, a PayPal transaction history statement and details of various rewards/vouchers/earnings received in return for completing online surveys and market research.
Some of the rewards/vouchers/payments were received by the Claimant either prior to the relevant 12 month period (30 June 2019 to 29 June 2020), or after the end of the relevant 12 month period (the last date being 29 June 2020).
The Claimant’s PAWE is to be assessed under Schedule 1, Clause 4(1) (this does not appear to be in dispute). Pursuant to Clause 4(1) the Claimant’s PAWE is “the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred…” Accordingly, Merit Reviewer Koya properly disregarded rewards/vouchers/earnings received by the Claimant either prior to 30 June 2019 or after 29 June 2020 and any payments that could not be verified as falling within the relevant period.
Merit Reviewer Koya assessed total earnings during the relevant period to be $6,483.24. This produces a figure for the Claimant’s PAWE of $124.68 per week.
The Claimant’s Amended Individual Tax Return records:

(a)    The Claimant’s “Main salary or wage occupation” as “Interviewer-surveys or market research”.
(b)    The sum of $15,000 in the supplementary section as “Other income – Category 1 income”.
(c)    The tax return is prepared by his accountant, MLC Accountants.
(d)    The Taxation Estimate worksheet records the $15,000 as being “income/loss from other sources”.
The Claimant has now provided his MyGov generated income tax return 2019-20 which records:

(a) “Occupation where you earned most income” as “interviewer – surveys or market research”.
(b) His “other” income as “Category 4 Income” (not Category 1 as stated in the amended tax return).
To the extent the Claimant has provided source documents to support the amount declared as other income in his tax return, those documents only evidence earnings in the sum of $6,483.24 during the relevant period. This leaves the sum of approximately $8,000 as being an unverified amount, including whether any part of this amount was earned after 29 June 2020 (i.e. on 30 June 2020) and/or was obtained from sources other than work as an “earner” and is therefore to be excluded from calculation of the Claimant’s PAWE.

Consideration

The issue for consideration is whether the Claimant has established earnings “as an earner” for the purpose of calculation of his PAWE in the sum of $15,000 on the basis of his amended tax return or whether he has only established earnings “as an earner” in the relevant period in the sum of $6,483.24 (based on the available source documents).
Merit Reviewer Koya found:

(a) The amended tax return “is considered a relevant reflection of ‘earnings’ for the purpose of Schedule 1(4) of the Act” at paragraph 17 of the single merit review decision.
(b) Non-cash payments should be included in calculation of the Claimant’s PAWE at paragraph 19 of the single merit review decision.
However, Merit Reviewer Koya ultimately did not adopt the figure in the tax return as the Claimant’s gross earnings for the relevant period. Whilst the Claimant contends this is an error, it is clear from a reading of the decision as a whole that the amended tax return was considered but ultimately disregarded because there was no information “as to the details of what items or types of income make up the total $15,000” (see paragraph 17 of the single merit review decision).
The Review Panel agrees the tax return is a “relevant” document. Clearly this document was considered by Merit Reviewer Koya, as Merit Reviewer Koya went on to observe the difficulty that the global amount for income from “other” sources in the amended tax return cannot be analysed without further information/documents.
Whilst a tax return is a relevant document, this does not mean it is to be taken as definitive evidence of earnings “as an earner” for the purpose of calculating an injured party’s PAWE. In some cases, the tax return alone may be sufficient, for example when an injured person has only one source of income in the form of wages received from an employer and the relevant 12 month period is the same period as covered by the tax return. In other cases, it is not straightforward and it is necessary to look to the source documents in order to analyse the extent to which an amount declared as income represents income “as an earner” during the relevant period for the purpose of Schedule 1, Clause 4(1) of the Act.
For the reasons set out below the Review Panel is of the view that in this particular case, further information is required in order to be able to analyse the extent to which income from other sources in the Claimant’s 2020 amended tax return is income “as an earner” received during the period 30 June 2019 to 29 June 2020 and is therefore to be included in the calculation of the Claimant’s PAWE.
The Claimant submits that because he stated his “main” occupation as “interviewer – surveys or market research” in the amended tax return it follows that all of the “other” income is income derived from that work. The Review Panel does not agree. The ATO instructions for completing the relevant question in the tax return (question 1) is that the taxpayer is to write the occupation from which they earned most of their income from salary or wages. This does not mean that all income from “other” sources is akin to salary and wages derived from work as an interviewer. A taxpayer is only required to state their “main” occupation. This does not mean that all, or even a substantial amount of income from “other” sources is derived from that occupation. For example, a taxpayer may have a “main” occupation for the purpose of that part of their “other” income that is akin to salary or wages but earn substantially more in “other” income from investments.
The ATO’s instructions for completing the supplementary tax return in respect of other income lists types of income that are to be included as “other income” in the supplementary section. The “ATO Individual Tax Return Instructions Supplement 2020” identifies Category 1 other income as:

(a)    Lump sum payments in arrears except lump sum payments in arrears relating to superannuation income streams.
(b)    Foreign exchange gains.
(c)    Benefits or prizes from investment-related lotteries and some game-show winnings.
(d)    Reimbursements of tax-related expenses (not including ATO interest remitted) or election expenses.
(e)    Assessable balancing adjustments when you stop holding a depreciating asset.
(f) Gains, on the disposal or the redemption of traditional securities, that are assessable under section 26BB of the ITAA 1936.
(g)    Work-in-progress amounts assessable under section 15-50 of the Income Tax Assessment Act 1997.
If the income is Category 1 income, as stated in the amended tax return, it is unlikely that this income is income “as an earner” for the purpose of the Act.
Category 2 income is remission of an ATO interest charge claimed as a deduction and Category 3 is assessable FHSS released amounts.
Category 4 is “any income not described in category 1, 2 or 3.” The Claimant’s MyGov document suggests the income is Category 4, which is inconsistent with the amended tax return. If it is Category 4 then it might be income “as an earner” being the Claimant’s cash and non-cash payments as an interviewer or it might be a mix of income “as an earner” and income from other sources that is not income “as an earner”. Absent the source documents used by the Claimant’s accountant to prepare the amended tax return, this is not known. Without the source documents, it is also not known whether any of the $15,000 in the amended tax return was received after 29 June 2020 (i.e. on 30 June 2020) and is therefore to be excluded from calculation of the Claimant’s PAWE.
Whilst the Claimant has provided a signed statement regarding the $15,000 declared in his amended tax return the Review Panel is not satisfied that this statement is sufficient to verify the Claimant’s earnings “as an earner”. The Claimant’s statement acknowledges the amount of $15,000 is an estimate only and was not based on actual receipts or invoices. The Claimant states “it is possible the amount of $15,000 was actually accidentally underestimated, as I did not keep copies of all of the vouchers I received”. The Claimant does not provide any basis for the estimate in his statement in circumstances where he did not keep all relevant documents.
Lastly, the Panel notes that documents provided by the Claimant indicate the PayPal “cash” is not cash in the traditional sense (i.e. that can be withdrawn from the PayPal account in cash) but is an online form of “currency” that is “converted” into reward cards or vouchers through certain retailers. It is possible therefore that there is some duplication in the gross earnings assessed by Merit Reviewer Koya, which is based on the PayPal statement and the available evidence of reward cards and vouchers. This may also be why the Claimant did not “keep copies of all the vouchers” he received, as some of those vouchers likely represented conversion of PayPal currency and not separate payment for services rendered.
Section 6.24 of the Act provides:
(1) A claimant must co-operate fully in respect of the claim with the other party to the claim (being the insurer on the claim or, if there is no insurer, the person against whom the claim is made) for the purpose of giving the other party sufficient information—
(a)to be satisfied as to the validity of the claim and, in particular, to assess whether the claim or any part of the claim, may be fraudulent, and
(b)to be able to make an early assessment of liability, and
(c)to be able to make an informed offer of settlement in the case of a claim for damages.
(2) In particular, the claimant must comply with any reasonable request by the other party—
(a)to furnish specified information (in addition to the information furnished in the claim) or to produce specified documents or records, or
(b)to provide a photograph of and evidence as to the identity of the claimant.
(3) The reasonableness of a request may be assessed having regard to criteria including the following—
(a)the amount of time the claimant needs to comply with the request,
(b)whether the information sought is cogent and relevant to a determination of liability or quantum of loss, having regard to the nature of the claim,
(c)the amount of information which has already been supplied to or is available to an insurer to enable liability and quantum of loss to be assessed and an offer of settlement made,
(d)how onerous it will be for the claimant to comply with the request,
(e)whether the information is privileged,
(f)whether the information sought is sufficiently specified,
(g)the time of the request and whether the claimant will be delayed in commencing proceedings for damages by complying with the request.
(4) A duty under this section in respect of a claim for damages applies only until court proceedings are commenced in respect of the claim but if the claimant fails without reasonable excuse to comply with this section, court proceedings cannot be commenced in respect of the claim while the failure continues.
It is apparent to the Review Panel that further enquiry should be made of the Claimant by the Insurer pursuant to section 6.24(2) in relation to evidence of the Claimant’s pre-accident gross earnings during the period 30 June 2019 to 29 June 2020, particularly in circumstances where the Claimant has stated the sum of $15,000 is an estimate only.
Presumably the Claimant provided sufficient source documents to his accountant to enable the accountant to identify the type or types of income and their respective amounts, including the dates on which the income was received to enable his accountant to prepare the tax return, including the supplementary section and including the categorisation of “other” income. That same evidence ought to be made available to the Insurer for calculation of the Claimant’s PAWE.

Section 6.3 of the Act sets out each party’s duty to act with good faith:
(1) A claimant and an insurer each have a duty to act towards the other with good faith in connection with a claim.
(2) The duty of a claimant to act with good faith includes the following duties—
(a)a duty to act honestly and not mislead,
(b)a duty to disclose all relevant information (including reports by health professionals) in a timely manner,
(c)a duty to promptly do all things reasonably necessary to facilitate the resolution of any dispute involving the claim.
(3) The duty of an insurer to act with good faith includes the following duties—
(a)the duty to provide a claimant with information about entitlements to statutory benefits and damages,
(b)the duty to provide a claimant with all relevant information (including reports by health professionals) relied on to make a decision on a claim,
(c)the duty to provide written reasons for all decisions that materially affect a claimant’s entitlement to statutory benefits or damages,
(d)the duty to advise a claimant of any right under this Act to review any such decision of the insurer,
(e)the duty to make prompt payment of statutory benefits and damages.
(4) ...
The source documents that informed the tax returns are “relevant information” for calculation of the Claimant’s PAWE and ought to be provided by the Claimant under section 6.3(2)(b), even if the Insurer did not request same under section 6.24.
Pursuant to section 6.6 of the Act a merit reviewer may issue directions for compliance with duties under section 6.3. Section 6.6 relevantly provides:
(1)     The Commission, when undertaking a claims assessment or merit review under Part 7, may give directions to a party to a claim for the purpose of ensuring compliance by the party with a duty arising under this Division.
(2)     If a claimant fails to comply with such a direction without reasonable excuse, the Commission may direct the insurer to suspend weekly payments of statutory benefits to the claimant under Part 3 while the failure continues.
(3)     ...
The following directions are made by the Review Panel under section 6.6 of the Act:
(a)    The Claimant is to provide to the Insurer all documents provided to his accountant for the purpose of preparing the Claimant’s 2020 Income Tax Return and Amended Income Tax Return, including the supplementary sections in those tax returns within 14 days of the date of this decision. The Insurer may request an authority from the Claimant authorising the accountant to provide this information directly to the Insurer.

(b)    Should the Insurer be of the view any further information, other than the accountant’s records, is required then the Insurer is to issue a request for that further information within 14 days of this decision.

(c)    The Claimant is to provide a response to any further request for information issued by the Insurer within 14 days of receipt of that request.

(d)    If the Claimant wishes to provide any further information to the Insurer for the purpose of assessing his PAWE, the Claimant is to provide this information to the Insurer within 14 days of this decision.
Once the above directions have been complied with, the Insurer is directed to recalculate the Claimant’s PAWE based on the information available, including any further information obtained as a result of the above directions.

Determination and directions

The Review Panel’s determination is as follows:

(a) The single merit review decision of Merit Reviewer Koya dated 22 December 2020 is set aside and in its place the following directions are made:

48.1.1 The Claimant is to provide to the Insurer all documents provided to his accountant for the purpose of preparing the Claimant’s 2020 Income Tax Return and Amended Income Tax Return, including the supplementary sections in those tax returns, within 14 days of the date of this decision. The Insurer may request an authority from the Claimant authorising the accountant to provide this information directly to the Insurer.
48.1.2Should the Insurer be of the view any further information or documents are required, in addition to the accountant’s records covered in the above direction, the Insurer is to issue a request for that further information within 14 days of this decision.
48.1.3The Claimant is to provide a response to any further request for information or documents issued by the Insurer within 14 days of receipt of that request.
48.1.4If the Claimant wishes to provide any further information or documents to the Insurer for the purpose of assessing his PAWE, not covered by the above directions, the Claimant is to provide any such information or documents to the Insurer within 14 days of this decision.

(b) Once the above directions have been complied with, the Insurer is to recalculate the Claimant’s PAWE based on the information available, including any further information obtained as a result of the above directions.

Review Panel Certification

This certificate has been viewed by Merit Reviewer Katherine Ruschen, Merit Reviewer Kriesen Seeneevassen and Merit Reviewer Elyse White who have confirmed that they are in agreement.

[2021] NSWPICMRP 1

26 March 2021