AAW v GIO Ltd
[2021] NSWPICMR 10
•18 May 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | AAW v GIO Ltd [2021] NSWPICMR 10 |
| APPLICANT: | AAW |
| RESPONDENT: | GIO Ltd |
| MERIT REVIEWER: | Kriesen Seeneevassen |
| DATE OF DECISION: | 18 May 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; amount of weekly payments of statutory benefits under Division 3.3 of the Motor Accident Injuries Act 2017; earner; receiving jobseeker payments; not demonstrated a loss of earnings due to the accident; earning income from her business; legal costs; exceptional circumstances; Centrelink payments are not income from personal exertion; issued orders for the claimant to produce documents; none were produced; income earned as a Director of a company constitutes income from personal exertion; Held- unlikely to have incurred a loss of earnings; no exceptional circumstances; decision affirmed. |
| DETERMINATIONS MADE: | 1. The reviewable decision is affirmed. 2. The amount of the claimant’s costs assessed in accordance with the Personal Injury Commission Regulation 2020 is $ 1,660 plus GST. |
STATEMENT OF REASONS
Background
There is a dispute between AAW (the claimant) and GIO (“the insurer) about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Act.
The claimant was involved in a motor vehicle accident (MVA”) on 9 June 2020. Her application for personal injury benefits claim form is dated 15 June 2020.
In a decision letter to the claimant dated 11 December 2020, the insurer has determined the claimant to be a non-earner as she was receiving jobseeker payments at the time of the MVA.
The claimant applied for the insurer to conduct an internal review of their determination in an application form dated 21 December 2020. In an insurer Certificate of Determination dated 4 January 2021, the insurer accepted that the claimant was an earner but that she was not entitled to weekly payments of statutory benefits because she had not demonstrated a loss of earning due to the accident.
In her application, the claimant says that the dispute is about her not being entitled to weekly payments of statutory benefits as a result of this accident. The outcome that the claimant’s request of the Merit Review is for her to be found to be entitled to weekly payments of statutory benefits as a result of this accident.
Submissions
The claimant
The insurer erred to have conducted the internal review in accordance with Schedule 2 Clause 1(a) of the Act. The internal review was in relations to loss of earning and not statutory benefits under either section 3.4 or Division 3.3.
An entitlement to statutory benefits under Division 3.3, require claimants to:
(a) meet the definition of an earner under Schedule 1, clause 2 of the Act, and
(b) meet the definition of loss of earnings according to Schedule 1, clause 3 of the Act.
It is not disputed that the claimant is an earner.
The claimant has suffered from loss of earning, according to clause 3(1) of Schedule 1 of the Act because it was likely that a loss would had been incurred to the claimant’s income from personal exertion.
The claimant should be assessed according to section 4(1) of Schedule 1 of the Act because supporting documents show that:
(a) She had been earning income from her business: XXXX Pty Ltd (XXXX) from 1 October 2019 to 30 June 2020, including the period from 1 April 2020 to 30 June 2020.
(b) She had received the jobseeker payments from 28 April 2020 to 4 June 2020, and from 1 July 2020 to 26 August 2020.
(c) She had resumed her business on 3 June 2020, prior to the MVA. She had informed Centrelink of having returned to work, so that there was a reduction in her jobseeker payments for the period from 3 June 2020 to 17 June 2020.
The claimant was employed on 9 June 2020 when the MVA happened. But for the accident, she would have continued with her business and making a stable earning. The injuries caused by the accident had resulted in the claimant’s inability to return to work.
The claimant resorted to seeking jobseeker payments from Centrelink from 1 July 2020 because the insurer failed to accept that the claimant suffered from a loss of earning.
The claimant’s legal representative has spent no less than 10 hours to obtain instructions, reviewing decisions, conducting investigations, researching, and preparing for complex issues.
Sections 7.42 and 8.10(4) allows for the claimant to claim legal costs other than as permitted by the Regulations. Exceptional circumstances exist that justify payment of legal costs due to the insurer’s denial of the invoice and considering the legal work undertaken.
Consideration should be given to the decision and rates in AFH v AAI Limited trading as GIO [2019] NSW DRS CA 134.
Pursuant to section 6.21 of the Act, consideration should be given to costs penalty of 25% for the insurer’s unreasonable denial of liability.
Pursuant to clause 7.27 of the Motor Accident Guidelines and section 1.3 of the Act, a DRS officer can exercise a discretion that would best promote the objects of the Act. Exercising this discretion would best promote the objects of the Act in all the circumstances of the claim. The following subclauses of clause 1.3 of the Act may be applicable to this matter:
(a) to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities, and
(b) to provide early and ongoing financial support for persons injured in motor accidents.
The insurer
Sections 3.6 and 3.7 of the Act state that an earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits.
The insurer’s internal review contains the basis on which the insurer found that:
(a) The claimant is an earner.
(b) The claimant has not demonstrated a loss of earning due to this accident.
(c) The claimant is not entitled to weekly payments of statutory benefits as a result of this accident.
The claimant has not provided any further information that would alter the insurer’s determination.
A claimant who does not demonstrate a loss of earning due to the MVA is not entitled to weekly payments of statutory benefits.
The evidence shows that the claimant received Centrelink payments from at least 6 May 2020, up until the accident and after. Centrelink payments are not income from personal exertion. Additionally, the claimant’s Centrelink statement shows that these payments were ongoing for months after the accident, with no demonstrated reduction. The insurer considers that the claimant has neither demonstrated earnings from personal exertion, nor loss due to the accident.
Teleconference
I held a teleconference with the parties on 10 March 2021 where I issued orders for the claimant to produce the following documents to me with copies to the insurer representative by 13 April 2021:
(a) Copies of XXXX bank statements showing income from personal exertion, particularly any such income during the period of 3 to 8 June when the claimant alleges that she resumed work for XXXX.
(b) Copies of the source documents that the accountant had used to prepare the claimant’s 2019/20 tax return, and XXXX financial statements for the financial year ended 30 June 2020. In particular, those showing income from personal exertion during the period 3 June to 9 June 2020.
(c) A statement from the claimant, particularly indicating which entries in her bank statements relate to her earnings.
(d) A copy of the claimant’s declaration to Centrelink that would have led to a reduction in her Jobseeker allowance in the fortnight of 18 June 2020.
None were produced by the due date. On 20 April 2021, the claimant sought an extension of time to lodge these documents by 27 April 2021. Still, none were produced.
Reasons
The claimant submits that the insurer erred to have conducted the internal review in accordance with Schedule 2 clause 1(a) of the Act. I cannot find any reference to Schedule 2 clause 1(a) neither in the insurer’s Certificate of Determination, nor in their statement of reasons.
Statutory benefits payable under Division 3.3
Sections 3.6 and 3.7 of the Act state that weekly payments of statutory benefits during first and second entitlement periods are available to an earner who is injured as a result of a MVA and suffers a total or partial loss of earnings as a result of the injury.
Earner
There is no dispute that the claimant is an earner.
Loss of earnings
Schedule 2 clause 3 defines Loss of Earnings as follows:
"Loss of earnings"means a loss incurred or likely to be incurred in a person's income from personal exertion.
A person's "income from personal exertion"is--
1.the amount that is the income of the person consisting of earnings, salaries, wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered, and
2.the proceeds of any business carried on by the person either alone or in partnership with any other person, and
3.any amount received as bounty or subsidy in carrying on a business.
Income from personal exertion
On the one hand, the insurer’s statement of reason states that “The evidence you have provided overwhelmingly supports that your business existed and you as the Director of the business earned in the 37 weeks or so prior to the accident”. On the other hand, the insurer found that the claimant did not have income from personal exertion because:
(a) Centrelink payments are not income from personal exertion, and
(b) the claimant was receiving Centrelink payments at the time of the MVA.
I accept that the claimant was receiving Centrelink payments, but that does not preclude a claimant from also having had income from personal exertion. The Act’s definition of income from personal exertion does not require it to have been derived at the time of the MVA. Income earned as the Director of a company constitutes income from personal exertion under the Act. I find that the claimant derived income from personal exertion.
Loss incurred or likely to be incurred as a result of the injury
The use of the words “likely to be incurred” requires a wider consideration than the single word “incurred”. According to Lord Nicholls of Birkenhead the word “likely” involves consideration of a real possibility that ought not to be ignored (Re H (Minors) [1996] 1 AC 563).
The claimant submits that she was in the process of her employment at the time of the MVA. She had resumed her business on 3 June 2020 and informed Centrelink of her return to work therefore there was a reduction in her jobseeker payments for the employment period from 3 June 2020 to 17 June 2020. She further submits that this is supported by her declaration statement and economic statements submitted with the application.
The documents that I have received include the following relevant ones:
(a) A statement from the claimant dated 15 September 2020 saying that she has been self-employed for about a year, running a business selling gifts for different seasons via a corporate entity called XXXX Pty Limited. She gets paid a fixed amount of $1300.00 each week. She had to stop work because of the injuries she sustained as a result of the MVA.
(b) Evidence that the claimant’s jobseeker payments dropped from $1,134.50 on 3 June 2020 to $15.29 on 18 June 2020.
(c) Four (4) ANZ bank statements in the claimant’s name, dating from 23 October 2019 to 18 June 2020, that included the following transactions:
28 April 2020
Payment from Transfer
$ 2,000.00
11 May 2020
Payment from Transfer - Service NSW
$ 10,000.00
9 March 2020
Payment from Transfer
$ 2,000.00
14 April 2020
Payment from Transfer
$ 2,000.00
31 October 2019
Payment from Transfer
$ 2,000.00
2 December 2019
Payment from Transfer
$ 1,000.00
23 January 2020
Payment from Transfer
$ 2,000.00
19 February 2020
Payment from Transfer
$ 2,000.00
(d) Two (2) Commonwealth bank statements in the claimant’s name, dating from 5 February 2020 to 4 August 2020, that included the following deposits:
13 February 2020
Payment from PayPal
$700.00
19 February 2020
Payment from Transfer
$2,000.00
18 March 2020
Transfer from CommBank
$1,000.00
18 March 2020
Transfer from YY
$3,432.00
9 April 2020
Transfer from NetBank Inv 51 Sanfa
$1,800.00
18 April 2020
Transfer from YY
$1,144.00
26 April 2020
Credit Economic Support
$750.00
28 April 2020
Jobseeker payment
$1,252.50
6 May 2020
Jobseeker payment
$1,134.50
9 May 2020
Transfer from CommBank
$1,000.00
20 May 2020
Transfer from CommBank
$600.00
21 May 2020
Jobseeker payment
$1,134.50
3 June 2020
Jobseeker payment
$1,134.50
4 June 2020
Transfer to Transfer
$2,400
5 June 2020
Transfer from YY
$1,144.00
18 June 2020
Jobseeker payment
$15.29
(e) A copy of the XXXX activity statement for the period 1 April 2020 to 30 June 2020 showing an amount of $28,446.00 as “Total Salary, wages and other payments”.
(f) A copy of a rental invoice from WWW Pty Ltd (WWW) for the period 18 May 2020 to 30 May 2020.
(g) A copy of the claimant’s tax return for the period 1 July 2019 to June 2020 and the corresponding Notice of Assessment showing that the claimant had gross income of $34,448.00 in addition to Jobseeker payments of $4,286.00.
I accept that the claimant was an earner and that she had income from personal exertion. However, I find that that on the balance of probabilities, the claimant had not incurred, or was unlikely to have incurred, a loss of earnings because:
(a) The claimant states in her statement that her remuneration from XXXX is $1,300 per week. I am unable to find any deposits in her bank statements showing $1,300 or multiples thereof.
(b) I am unable to trace any of the descriptions on the deposits in the claimant’s ANZ or CBA bank statements to any payments from XXXX.
(c) The claimant’s reduction in Jobseeker payments from $1,134.50 on 3 June 2020 to $15.29 on 18 June 2020 is inconclusive of her employment at the time of the MVA. A reduction in jobseeker payments may be due to circumstances unrelated to the claimant’s income, such as a change in their partner’s income.
(d) I accept that the XXXX Activity Statement demonstrates that the claimant derived earnings of $28,446.00 during that period but I am unable to attribute any it specifically to the claimant’s alleged employment in early June 2020.
(e) The WWW rental invoice show that the claimant may have been trading between 18 May and 30 May 2020, but I have not been given any documents to show that XXXX may have been trading at the time of the MVA.
(f) Other than establish that the claimant had earned $34,448for the financial year ending 30 June 2020, the claimant’s tax return and Notice of Assessment do not establish that any of that income relate to employment on the day of the MVA.
Cost
The claimant references AFH v AAI Limited trading as GIO [2019] NSW DRS CA 134 (AFH), and seeks:
(a) Exceptional costs under section 8.10(4) without quantifying the amount sought.
(b) A cost penalty of 25% under section 6.21 of the Act for the insurer’s unreasonable denial of liability.
The insurer has not made any submissions as to costs.
In AFH, Assessor McTegg found that section 8.10(4) entitles the DRS to permit payment of legal costs other than as permitted by the Regulations and in excess of the maximum costs permitted by Schedule 1 of the Regulation but only if satisfied that the claimant is under a legal disability or exceptional circumstances exist.
In AAI Ltd trading as GIO v Moon [2020] NSWSC 714, Wright J said:
At 97: “When regard is had to s 8.10(4), the DRS’s power to permit payment of legal costs can be seen as designed to deal with particular, unusual situations where the maximum costs fixed by the regulations may not be adequate”.
At 99: “…cases can be envisaged which are exceptional, because they involve an unusual degree of factual or legal complexity or for some other reason, and this requires the incurring of more substantial legal costs by a claimant. These cases fall within s 8.10(4). It would be consistent with the objects and other provisions of the MAI Act, including for example s 7.46, and the express terms of s 8.10(3) and (4), to permit the amount of legal costs recoverable under s 8.10 in such exceptional cases to exceed the maximum fixed by regulation, where that was reasonably required to prevent injustice, hardship or some other relevant adverse consequence”.
I do not accept that exceptional circumstances exist in this matter. The claimant’s legal representative was required to demonstrate that their self-employed claimant had incurred or was likely to incur a loss of earnings. The legal work that they undertook in attempting to do so was not of such complexity as to be unusual or out of the ordinary.
Section 6.21(1) requires me to be satisfied that the insurer did not have a reasonable basis for denying liability if I am to impose a cost penalty on them. Section 6.21(2) stipulates that the insurer is considered to have a reasonable basis for denying liability if the denial was based on provable facts and a reasonably arguable view of the law.
I am not satisfied that the insurer did not have a reasonable basis for denying liability. Their statement of reasons show that they had considered the information that the claimant had provided to them. They found Centrelink payments not to be income from personal exertion and therefore that the claimant had failed to demonstrate a loss of earnings. In my view their denial of liability was based on provable facts and a reasonably arguable view of the law.
Having regard the work that was required of the claimant’s legal representative I consider it appropriate to award professional costs of $1,660 plus GST.
Conclusion
The reviewable decision is affirmed.
The amount of the claimant’s costs assessed in accordance with the Personal Injury Commission Regulation 2020 is $ 1,660 plus GST.
Legislation and Guidelines
In making this decision, I have considered the following:
· The application, reply and supporting documentation.
· Motor Accident Injuries Act 2017 (NSW) (the Act).
· Motor Accident Guidelines.
· Motor Accident Injuries Regulation 2017 (NSW) (the Regulation).
Kriesen Seeneevassen
Merit Reviewer
Personal Injury Commission
2