AAI Limited t/as AAMI v Tayba
[2022] NSWPICMR 71
•5 December 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | AAI Limited t/as AAMI v Tayba [2022] NSWPICMR 71 |
| ClaimanT: | Abdel Karim Tayba |
| Insurer: | AAI Limited t/as AAMI |
| Merit Reviewer: | Katherine Ruschen |
| DATE OF DECISION: | 5 December 2022 |
CATCHWORDS: | MOTOR ACCIDENTS - Merit review; dispute about payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (2017 Act); insufficient evidence to establish pre-injury average weekly earnings (PIAWE); section 6.24 of the 2017 Act duty to co-operate; failure to co-operate; whether reasonable excuse; validity of the claim; whether any part of the claim is fraudulent; inconsistent evidence; section 6.3 of the 2017 Act duty to act honestly and not to mislead; duty to disclose all relevant information in a timely manner; Held – the reviewable decision is affirmed. |
| Determinations made: | CERTIFICATE OF DETERMINATION Issued under s 7.13(4) of the Motor Accident Injuries Act2017 The reviewable decision is about the claimant's failure to comply with the insurer's request or further information under s 6.24 of the Motor Accident Injuries Act 2017 (the MAI Act), and is therefore not a merit review matter under Schedule, cl 2(1)(x)of the MAI Act. 1. The reviewable decision is affirmed. 2. By on or before 13 December 2022 the claimant is to provide copies of the following documents and information to the insurer: (a) his Australian Business Number (ABN) number and profit and loss statements for the business operating under the ABN for the financial years ending 30 June 2020, 30 June 2021 and 30 June 2022; (b) the full name and address of his accountant; (c) his tax returns AND notices of assessment for the financial years ending 30 June 2020, 30 June 2021 and 30 June 2022; (d) his Australian Taxation Office (ATO) statements of income for the financial years ending 30 June 2020, 30 June 2021 and 30 June 2022; (e) if the claimant contends there are no tax/ATO records, a verified statement from the ATO confirming the claimant has not lodged any tax returns for the 2020, 2021 and 2022 financial years, and (f) complete bank statements for his bank account into which A Tayba Pty Limited made payments to the claimant for the period 1 July 2019 TO DATE. 3. If the insurer requests the claimant’s written authority to seek information and documents directly from any of the ATO, the claimant’s accountant, the Commonwealth Bank or other bank of the claimant, the claimant is to provide his written authority within seven days of receipt of the request from the insurer. |
STATEMENT OF REASONS
introduction
There is a dispute between Abdel Karim Tayba (the claimant) about whether the claimant has failed to comply with his duty to co-operate with the insurer under the MAI Act and whether the insurer’s request for further information is reasonable.
The claimant was involved in a motor accident on 14 June 2021.
The claimant lodged an application for personal injury statutory benefits under the MAI Act.
For the purpose of assessing the claimant’s pre-accident earning capacity (PAWE) under the MAI Act the claimant provided certain payslips allegedly issued to him by A Tayba Plumbing Pty Ltd, a company owned and operated by the claimant’s brother.
The insurer conducted a recorded interview with the claimant’s brother about the terms of the claimant’s employment with A Tayba Plumbing Pty Limited.
There are inconsistencies between the claimant’s evidence and the employer’s evidence that is, the evidence of the claimant’s brother. As a result, on 7 February 2022 the insurer requested further information from the claimant to be satisfied as to the claimant’s PAWE and determined that further weekly payments would not be made, until the claimant provided the further information.
On 10 February 2022, 18 February 2022, 25 March 2022 and 30 March 2022 the insurer sent further requests to the claimant for the information requested on 7 February 2022 to be provided to the insurer.
The claimant did not provide the requested information.
The insurer has lodged an application for a merit review in relation to the claimant’s duty to co-operate and whether the insurer’s request for further information is reasonable.
The claimant’s reply to the insurer’s merit review application was due 16 September 2022.
The claimant was previously legally represented. On 19 September 2022 the claimant’s solicitor advised the Personal Injury Commission (the Commission) that the claimant was overseas and requested an extension of time until 28 October 2022 to lodge a reply on the claimant’s behalf. The requested extension was granted.
On or about 14 October 2022 the claimant’s solicitor ceased to act for the claimant. At that time, no reply had been lodged by or on behalf of the claimant.
On 17 October 2022 the insurer wrote to the claimant, who was now self-represented, and provided a copy of the merit review application to the claimant. The insurer also informed the claimant that he should lodge his reply by 28 October 2022 pursuant to the direction made by me.
On 17 November 2022 the Commission’s disputes officer wrote to the claimant by email noting the claimant was no longer legally represented and asking the claimant to confirm whether he intended to lodge a reply.
On 23 November 2022 the Commission’s disputes officer spoke with the claimant by telephone and recommended that the claimant provide a reply to the disputes officer’s email of 17 November 2022.
On 23 November 2022 the disputes officer followed up their telephone call with the claimant by sending a further email to the claimant confirming the recommendation to reply to the 17 November 2022 email. The follow up email also referred the claimant to the Law Society if he wished to seek new legal representation and the Compulsory Third Party ( CTP) Assist number for assistance with completing the reply to the insurer’s merit review application.
To date, the claimant has not complied with the insurer’s request for further information and no explanation has been provided as to why he is unable to provide the information requested by the insurer.
The claimant has also not lodged a reply to the merit review application, despite being granted an extension of time to do so by 28 October 2022 and despite follow ups on 17 and 23 November 2022 by the Commission’s disputes officer.
SUBMISSIONS
The insurer submits:
(a) by failing to provide the documents requested, the claimant has failed to comply with his duty to co-operate under s 6.24 of the MAI Act;
(b) section 6.24 is clear in that the claimant must comply with any reasonable request by the insurer to furnish specified information to enable the insurer to assess whether part of the claim may be fraudulent, and
(c) the request for documents is reasonable given the inconsistencies in the evidence and the objects in s 1.3(2)(f) of the MAI Act to deter fraud.
No submissions or documents have been received from the claimant.
REASONS
The legislation
Pursuant to s 6.24 of the MAI Act the claimant has a duty to fully co-operate with the insurer. Section 6.24 relevantly provides:
“Duty of claimant to co-operate with other party
(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.”
(emphasis added)
The claimant also has a duty under s 6.3(2) of the MAI Act to act honestly, not to mislead and to disclose all relevant information in a timely manner.
The application for personal injury benefits also makes clear that the claimant must declare that all information he has provided in the claim form is true and correct in every respect. Under s 307C of the Crimes Act 1900, the claimant can be issued with a fine up to $22,000 or imprisoned for two years, or both for knowingly providing false or misleading information in the claim form.
Evidence in relation to PAWE
In his application for personal injury benefits dated 5 July 2021 the claimant declared under statutory declaration that prior to the motor accident he was a full time plumber employed by A Tayba Pty Limited earning $10,550 per month, which equates to $2,424.61 per week.
In his application for personal injury benefits the claimant also declared that he had not worked since 15 June 2021, which is the day after the motor accident.
The claimant provided monthly payslips said to be issued by A Tayba Pty Limited for the months ending 30 April 2021, 31 May 2021 and 30 June 2021. The payslips are purportedly prepared by the accountant for A Tayba Pty Limited. However, they are not signed by the accountant or any other person on behalf of the employer.
The payslips record that:
(a) the claimant was paid wages, with the employer withholding pay as you go tax (PAYG tax) and paying superannuation on behalf of the claimant, and
(b) the claimant did not suffer any loss of earnings in the period 1 to 30 June 2021, despite the claimant’s declaration in his application for personal injury benefits that he had not worked since 15 June 2021.
The director of A Tayba Pty Limited, who is the claimant’s brother, was interviewed by the insurer on 18 January 2022. The interview was recorded, and a transcript has been prepared.
There are inconsistencies between the claimant’s declared evidence and payslips and the evidence of the claimant’s brother, as follows:
Claimant’s evidence/information from payslips
The employer’s evidence
Comment
The claimant was an employee of A Tayba Pty Limited.
The employer did not have any employees, only subcontractors including that the claimant worked as a subcontractor.
The claimant has not provided any documents, other than the payslips to confirm he was an employee. If he was an employee, as alleged, he ought to be able to provide tax returns, notices of assessment and statements of income lodged with the Australian Taxation Office (ATO).
The employer withheld PAYG tax and paid superannuation.
As the claimant was a subcontractor, no PAYG tax was withheld by the employer and no superannuation was paid by the employer on behalf of the claimant. As a subcontractor the claimant was responsible for his own tax and superannuation.
As noted above, if the claimant was an employee as alleged, and the payslips are legitimate, he ought to be able to verify PAYG tax and superannuation in the payslips by providing his ATO statement of income and the transaction history for his superannuation account. Both documents ought to be readily available to the claimant through his MyGov online account.
The claimant had only been employed by A Tayba Pty Limited for eight weeks prior to the accident and had not worked prior to this[1]
The claimant had been a subcontractor of A Tayba Pty Limited for four to five years prior to the motor accident. Further, there had been a downturn of work during the 12 months prior to the motor accident by reason of COVID-19 and as a result, the work available to the claimant as a subcontractor during this period fluctuated.
Clearly, the claimant’s earning history in the full 12 months prior to the accident requires investigation to determine whether PAWE is to be properly assessed under Sch 1, cl 4(1) instead of cl 4(2). The employer’s evidence that there was a downturn in work is also inconsistent with the claimant’s contention that he consistently earned $10,550 gross per month.
The claimant earned $10,550 gross per month.
The claimant was paid a daily rate of $200 gross per day and typically worked four to six days per week when work was available.
The employer’s evidence of $200 per day for four to six days equates to a weekly gross payment of $800 to $1,200 per week, which equates to $3,466 to $5,200 per month. This is significantly lower than the claimant’s allegation he earned $10,550 per month/$2,434 per week.
The claimant’s year to date earnings as of 30 April 2022 show year to date earnings in the same amount as the amount paid for the month of April ($10,550)[2] consistent with a contention by the claimant that he only commenced work for A Tayba Pty Limited in April 2021.
The claimant had been working for A Tayba Pty Limited a s subcontractor for the past 4 to 5 years.
Leaving aside the fact the payslips are not consistent with the employer’s evidence regarding the basis upon which the claimant was paid by A Tayba Pty Limited, given the employer’s evidence the claimant had been working for the employer as a subcontractor since he arrived in Australia four to five years ago, the payslips ought to show much higher year to date earnings in April 2021 to reflect employment since 1 July 2020, being the relevant financial year.
The claimant is a plumber
The claimant is not qualified as a plumber. The claimant worked as an electrician overseas prior to becoming a subcontractor of A Tayba Pty Limited.
The claimant’s evidence that he was paid $10,550 per month (which is the equivalent of an annual salary of $126,600) is not plausible in circumstances where the claimant has no qualifications in plumbing. The employer’s evidence confirms this as the employer states the claimant was paid a lower daily rate than the amount paid to other subcontractors who were qualified plumbers. A daily rate of $200 is consistent with the daily rate of payment for labourers in the building and construction industry. This together with the fact the claimant does not have any qualifications to work as a plumber is consistent with the claimant being subcontracted as a labourer.
The claimant has not provided his bank statements for the 12 months prior to the date of the accident, despite these being requested by the insurer on multiple occasions.
The employer paid the claimant directly into the claimant’s bank account.
Clearly, the claimant’s bank statements are required. If the claimant was paid $10,550 gross, as alleged, then the net amount of $7,677 in the pay slips would appear as a deposit each month in the claimant’s bank statements. If there are no such deposits the only conclusion is that the claimant has provided false evidence.
If the claimant was paid $200 per day gross with no deductions because he was a subcontractor the bank statements should show the claimant’s actual earnings each week or month, which likely fluctuated given the employer’s evidence.
[1] Although this does not appear to have been expressly stated by the claimant on the evidence before me, it is represented in the payslips based on the year to date earnings in the first payslip that the claimant first commenced employment with A Tayba Pty Limited in April 2021, only eight weeks prior to the accident. The insurer has calculated PAWE over this limited period of eight weeks under Sch 1, cl 4(2) instead of taking the weekly average over 52 weeks under cl 4(1).
[2] The insurer’s submissions state no details have been provided regarding year to date earnings. However, the year to date earnings is recorded in the table on the right hand side of the payslips under the heading “Year to Date”.
Consideration
The inconsistencies between the claimant’s evidence and the evidence of his employer are concerning.
Of note, the payslips were not provided by the employer and have not been verified by the employer. The payslips were provided to the insurer directly by the claimant and are unsigned. If the payslips are genuine, one would expect them to have been signed by the accountant or other representative of the employer before being provided to the claimant and one would expect the employer’s evidence to be consistent with the content of the payslips. Neither is the case here.
The inconsistencies are significant and the only inference that can be drawn from the current information and the following is that the claimant has deliberately misled the insurer, including by falsifying documents to maximise his entitlement to weekly benefits under the MAI Act:
(a) that the claimant alleges income that is more than double the amount the employer says he was paid, and
(b) that despite repeat requests for further information over a period of 10 months since early February 2022, including during a period in which the claimant was legally represented, the claimant has been unable to provide any documentary evidence to verify the legitimacy of the payslips and has not provided any explanation, reasonable or otherwise, as to why he has been unable to do so.
The inconsistencies between the claimant’s evidence, which includes the payslips, and the employer’s evidence raises concerns such that clearly further investigation is required “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” as required by s 6.24. Under s 6.24 the claimant’s duty to co-operate with the insurer in relation to same is mandatory. Under s 6.3 of the MAI Act the claimant must do so honestly and in a timely manner.
Section 6.24 entitles the insurer to make a reasonable request for further information.
The insurer has requested copies of the claimant’s bank statements for the 52 weeks prior to the motor accident and details of the claimant’s ABN (the employer states the claimant was paid as a subcontractor under an ABN registered to the claimant). The insurer had also previously requested a copy of the claimant’s tax return for the financial year ending 30 June 2021.
In relation to the criteria in s 6.24(3) as to whether a request for further information is reasonable:
The amount of time the claimant needs to comply with the request:
(a) the claimant has had 10 months to comply, which is more than reasonable;
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:
(b) the information sought is cogent and clearly relevant to a determination of PAWE. It is pertinent to this issue of PAWE, as the bank records should disclose the claimant’s actual earnings and resolve the factual differences between the claimant’s evidence and the employer’s evidence. Given the striking inconsistencies in the evidence the further information is also relevant to the question of whether the claim is fraudulent;
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:
(c) the information provided by the claimant is scant, consisting of only three payslips. The claimant has not provided information to verify a contention he had not been working consistently for any period before the eight week period prior to the motor accident. He has not provided bank records, tax returns, statements of income or notices of assessment. The employer says the claimant was subcontracted as a sole trader. The claimant has not provided any evidence regarding the earnings of his sole trader business prior to the accident. Clearly, further information is required from the claimant;
How onerous it will be for the claimant to comply with the request:
(d) the request for further information ought not be onerous for the claimant. The information requested is current/recent and therefore ought to be readily available to the claimant. Presumably he can download bank statements through his online banking account, or request copies from his bank. He ought to have details of his ABN immediately to hand whether that be in records retained by him or his accountant. The tax return requested by the insurer is also recent and ought to be readily available to the claimant either through is MyGov online account or from his accountant if he has not kept a copy at home. The information requested by the insurer is not voluminous and does not traverse a significant period. It is limited to 12 months;
Whether the information is privileged:
(e) there is no basis for a claim of privilege over the information requested by the insurer;
Whether the information sought is sufficiently specified:
(f) the information sought is specified precisely, namely bank statements for the period 14 June 2020 to 13 June 2021, the claimant’s 2020/2021 tax return and his ABN, and
The time of the request and whether the claimant will be delayed in commencing proceedings for damages by complying with the request:
(g) there is no evidence that the claimant will be delayed in commencing proceedings for damages by complying with the request. Any delay is attributable to the claimant as it has now been 10 months since the request was made. The nature of the request is such that the claimant ought to have been about to readily comply within a very short period of one to two weeks.
Given the above I conclude the insurer’s request for further information is reasonable. I also consider, in the circumstances of this matter, that other information should be provided by the claimant to assess the validity of the claim and whether any part of it is fraudulent. This includes that information should be provided for the two year pre-accident period and not just for the 12 months prior. The additional information that I consider to be reasonably required for the purpose of assessing the validity of the claim and whether any part of it is fraudulent is detailed in the directions below.
Given the concerns about the authenticity of the payslips, the claimant is also to provide his written authority for the insurer to make a direct request for information and documents to the ATO, the Commonwealth Bank,[3] any other bank at which the claimant has an account and the claimant’s accountant to enable the insurer to verify the authenticity of documents provided by the claimant by receiving documents directly from these entities or persons. The insurer should also make a direct request to the ATO for documents in the event the claimant contends he did not lodge tax returns for 2020, 2021 and/or 2022 so that this can be verified by the ATO.
[3] The bank identified by the employer into which payments were made to the claimant.
The claimant is in breach of his duty under s 6.24. He is also in breach of his duty under s 6.3 to disclose all relevant information in a timely manner. On the material before me it also appears the claimant is in breach of his duty under s 6.3 to act honestly and not to mislead.
The claimant has not provided any excuse for his failure to comply with s 6.24. Given the straightforward request by the insurer for limited information that ought to be readily available to the claimant it is difficult to accept the claimant could have any reasonable excuse.
The claimant’s failure to comply with s 6.24 is continuing. Pursuant to s 6.24 the claimant cannot commence court proceedings in respect of the claim while the failure continues.
Conclusion
For the reasons set out above, I conclude:
(a) the insurer’s request for further information is reasonable;
(b) the claimant has failed to comply with the request and is in breach of his mandatory obligations under s 6.24 of the MAI Act;
(c) the claimant does not have a reasonable excuse for his failure to comply;
(d) the failure to comply is continuing and accordingly, the claimant cannot commence court proceedings in respect of the claim while the failure continues, and
(e) the claimant is required to provide the information requested by the insurer together with further information, as directed in the directions below, in a timely manner and by no later than 13 December 2022.
The circumstances of this matter are such that all further evidence provided by or on behalf of the claimant should be scrutinised, including any further evidence from the employer. The claimant has been put on notice of the inconsistencies between his evidence and that of his brother and the claimant and his brother have opportunity to collaborate in relation to their further evidence. Investigation into the validity of the claim and consideration as to whether any part of it is fraudulent is required, including whether the payslips have been falsified by the claimant or another person on the claimant’s behalf.
I therefore consider the insurer’s decision of 7 February 2022 to cease payment of weekly benefits pending the provision of further information by the claimant to be both reasonable and correct.
Accordingly, the reviewable decision is affirmed.
The claimant is to comply with the directions set out below.
By on or before 13 December 2022 the claimant is to provide copies of the following documents and information to the insurer:
(a) his ABN number and profit and loss statements for the business operating under the ABN for the financial years ending 30 June 2020, 30 June 2021 and 30 June 2022;
(b) the full name and address of his accountant;
(c) his tax returns AND notices of assessment for the financial years ending 30 June 2020, 30 June 2021 and 30 June 2022;
(d) his ATO statements of income for the financial years ending 30 June 2020, 30 June 2021 and 30 June 2022;
(e) if the claimant contends there are no tax/ATO records, a verified statement from the ATO confirming the claimant has not lodged any tax returns for the 2020, 2021 and 2022 financial years, and
(f) complete bank statements for his bank account into which A Tayba Pty Limited made payments to the claimant for the period 1 July 2019 TO DATE.
If the insurer requests the claimant’s written authority to seek information and documents directly from any of the ATO, the claimant’s accountant, the Commonwealth bank or other bank of the claimant, the claimant is to provide his written authority within seven days of receipt of the request from the insurer.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· the application and supporting documentation (no reply was received);
· the MAI Act;
· Motor Accident Guidelines, and
· the Motor Accident Injuries Regulation.
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