ABP v QBE Insurance

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	ABP v QBE Insurance [2021] NSWPICMR 19
APPLICANT:	ABP
RESPONDENT:	QBE Insurance
MERIT REVIEWER:	Steve Georgiadis
DATE OF DECISION:	15 June 2021
CATCHWORDS:	MOTOR ACCIDENTS- Merit review; the assessment of pre-accident weekly earnings under section 2(1)(a) of the Motor Accident Injuries Act 2017; limited verifiable documentation provided by the claimant; an earner; subcontractor doing painting work; average 30 hours per week; paid in cash; claimant never invoiced for hours worked; ATO Notice of Assessment; earning income from personal exertion; evidence and submissions not consistent; place weight on taxation records of earnings; Held- reviewable decision affirmed.
DETERMINATIONS MADE:	1. The reviewable decision is: (a) affirmed. 2. The Claimant’s Pre-Accident Average Weekly Earnings of statutory benefits rate is $203.46.

Background

The Claimant, ABP, was injured in a motor accident on 29 December 2019. He was a pedestrian involved in a collision with a vehicle insured by QBE Insurance (Australia) Limited in which he sustained injuries. He lodged a notice a claim for statutory benefits including weekly payments.

On 2 September 2020 the Insurer made an initial assessment regarding the claim for weekly statutory benefits in respect of the accident. The Claimant’s weekly payments were initially calculated to be $Nil on the basis, as submitted by the Insurer, of the limited verifiable documentation provided by the Claimant.

The Claimant sought an Internal Review by the Insurer and provided additional information and submissions through his legal representatives, Gerard Malouf & Partners.

The Insurer conducted an Internal Review of the original assessment decision and made a reviewable decision regarding PAWE calculated using the method set out in Schedule 1 cl (4) of the Act. The Insurer provided the Claimant written notice of its decision advising that it had reviewed the information available and varied the initial decision.

The Insurer conceded the Claimant is an earner and has an entitlement to weekly payments of statutory benefits pursuant to s 3.6 of the Act. The Insurer confirmed the Claimant’s PAWE rate was varied as follows:
“…QBE determined your Pre-Accident Weekly Earning (PAWE) rate to be $203.46 per week.”
On 17 September 2020 the Insurer issued a Certificate of Determination varying the original decision of 2 September 2020 from $Nil to the PAWE rate of $203.46.

The Claimant has disputed the PAWE rate of $203.46 in the Insurer’s reviewable decision of 17 September 2020 and lodged an application for Merit Review with the Personal Injury Commission. The application was made under section 7.12(1) of the Act and the Motor Accident Guidelines 2017 (the Guidelines).

I have considered the documents provided in the application and the Insurer’s response and any further information provided by the parties. This includes the Claimant’s written submissions dated 21 September 2020 and accompanying annexed documents, as well as the Insurer’s Reply dated 15 October 2020, submissions and attachments to the Reply.
There is a dispute between ABP and the Insurer about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Act, (weekly payments of statutory benefits to injured persons).

Submissions

Claimant’s submissions

The Claimant submits that the PIC DRS has jurisdiction to resolve disputes about merit review mattes under Schedule 2, clause 1(a) of the Act, as follows (in part):

… “Submissions
7. Schedule 1, clause 4(1) of the Act defines pre-accident weekly earnings as: “… the 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…”
8. The subject accident occurred on 29 December 2019; thus the insurer is required to look at the claimant’s earnings for the period between 29 December 2018 to 28 December 2019.
9. The claimant worked as a subcontractor doing painting work for JC, approximately during the period between March 2019 and December 2019 when the claimant was involved in the subject accident.
10. JC confirmed that the claimant worked an average of 30 hours per week, earning $30 per hour.
11. JC also confirmed that the claimant was paid in cash as he would withdraw money from an automatic teller machine. He also advised that the claimant did not invoice him for the hours worked and therefore could not produce those documents.
12. The insurer is required to look at the 12 months prior to the accident. While there is no documentation to cover the entire 12 months, it has been confirmed that for at least 10 months prior to the accident, the claimant was earning an average of $900.00 net per week.
13. The claimant is expected to provide the insurer with relevant documentation, which the insurer is to review and make a determination of the claimant’s PAWE.
14. There is no reason as to why the information provided by JC should be deemed as insufficient.
15. Previously, insurers have accepted correspondence from employers and/or potential employers regarding the claimant’s wages and have determined PAWE accordingly.
16. Annexed hereto and labelled “A3” is correspondence relating to another claimant whereby the insurer noted that there is no documented evidence to support the claim regarding gross earnings. We note that all confidential information has been redacted.
17. After being provided with a letter from the claimant’s potential employer which outlined the claimant’s expected wage, the insurer subsequently amended their decision and began paying weekly payments to the claimant according to the employer’s letter.
18. The present matter reflects similar circumstances, and the claimant submits that his PAWE should be revised to reflect his earnings as evidenced by his employer.
Conclusion
19. The insurer has insufficiently assessed the claimant’s PAWE and has failed to consider documents which have been provided on numerous occasions.
20. The insurer has been advised that the claimant earned approximately $900 gross per week for at least the 10 months prior to the accident.
21. Furthermore, the claimant’s own employer has verified the amount of the claimant’s pre-accident income.
22. Therefore, the claimant is entitled to a PAWE of $900 gross per week.
23. Accordingly, it is respectfully submitted that the insurer has made a significant error in their calculation, and that respectfully the DRS is empowered to revise the insurers decision.
Costs
24. The claimant’s legal representatives seek the maximum regulated costs for this application.
…”

Insurer’s submissions

The Insurer submits as follows in Reply (in part):
… “5. JC has advised by email dated 5 March 2020 (“A2”) that the claimant subcontracted to him on an “as needed basis from approximately March 2010 through to approximately December 2019.” JC further advised that he paid the claimant $30.00 per hour for a 40-hour week. Mr Craig Gregory from Procare sought further information from JC on 3 August 2020 (“A10”) for the purposes of calculating the PAWE for the claimant. JC has advised Mr Gregory the claimant worked on an “as needs basis” averaging 30 hours per week at $30.00 per hour between March and December 2019. JC advised that he paid the claimant in cash, that the claimant never invoiced him for hours worked, that he could not provide dates the claimant worked for him and that he did not know the amount he had paid the claimant between March and December 2019. While QBE does not dispute that the claimant has been paid some amount for performing some amount of work for JC, it is submitted that it is not possible to establish what income the claimant derived from this source during the period March through December 2019.
6. Notwithstanding the report commissioned by QBE from Procare dated 4th August 2020 that determined the claimant’s PAWE to be $0.00 (“R2”), QBE has preferred instead to rely upon the most recent evidence of the claimant’s income, the ATO Notice of Assessment for the year ending 30th June 2019 (“A7”), to calculate the claimant’s PAWE.
Conclusion
7. QBE has referred to and relied upon the claimant’s most recent verifiable documentary evidence to establish the claimant’s income and to calculate his PAWE.
8. QBE refers the Certificates of Reasons and Determination (“A8 & A9”) and maintains that the PAWE calculation is correct. …”

Reasons

I have considered all the parties’ material including that referred to in the Claimant’s written submissions and Review Application with all annexures A1 to A10, and also the Insurer’s Reply, submissions and all annexures R1 to R4.
I find that the PIC has jurisdiction to resolve disputes such as this about Merit Review matters relating to weekly payments of statutory benefits to injured persons. I find the dispute for Merit Review is a reviewable decision under Schedule 2, Clause 1(a) of the Act.
I am satisfied the Claimant’s Application has been made in accordance with section 7.12 (1) of the Act and the Guidelines.
In determining this Merit Review, under s 7.13(1) of the Act, I must reach the ‘correct and preferable decision’ after considering the relevant material before me. In undertaking this task I effectively, stand in the shoes of the Insurer to make a decision on the merits of the dispute as provided for under s 7.13(2). Under s 7.13(3) I may decide to:
·        affirm the reviewable decision
·        vary the reviewable decision
·        set aside the reviewable decision and make a decision in substitution for the reviewable decision
·        set aside the reviewable decision and remit the matter for reconsideration by the Insurer in accordance with any direction made by the Merit Reviewer.
The general background regarding this case is as discussed in the Claimant’s and Insurer’s respective written submissions set out above.
Given the motor accident occurred on 29 December 2019, I accept that the relevant 12-month period for the calculation of PAWE is the period between 29 December 2018 to 28 December 2019, (the material period).
From the material presented by the Claimant and the Insurer, I have proceeded to apply Schedule 1, cl.4(2)(a) of the Act as the method for calculating the Claimant’s PAWE. Clause 4(2)(a) of the Act sets out:
“pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means –
(a) if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months—the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident. …”
There is no dispute raised by either the Claimant or the Insurer that ABP is an earner having been working as a painter prior to the accident for the requisite period.
I find that for the purposes of cl.2(a) of Schedule 1 of the Act and the calculation of PAWE, the Claimant is ‘an earner who was injured as a result of a motor accident’. I have considered the basis for calculation of the weekly average of the gross earnings received by the Claimant as an earner during the relevant period spanning 12 months immediately before the day on which the accident occurred.
I find from the Claimant’s submissions and from the information provided by JC that the Claimant was not earning continuously for the entire 12 months immediately prior to the accident as the evidence is that he earned continuously over a 10-month period leading up to the date of the accident of 29 December 2019.
From the claim details, I accept ABP is a self-employed house painter located in Albury, NSW. He has an ABN (12345678910) but is not registered for GST. I accept that he has undertaken work as a sub-contractor for XYZ Painting (trading as JC Paining) operated by sole trader, JC.
I have considered the Claimant’s individual taxation returns ranging from financial years 2014 to 2019 as submitted. Relevantly, the 2019 taxation return shows the Claimant’s gross income was $10,580 for that year. This was made up of $9,814 gross salary together with $766 in allowances.
The written correspondence from JC dated 5 March 2020 records that the Claimant was sub-contracting to JC Paining on an “as needs” basis between March 2019 and December 2019. The information submitted is that over this 10-month period the Claimant was paid $30 per hour for a 40-hour week. This is contrasted with JC’s verbal information as provided to Procare Forensic Services for the report prepared for the Insurer dated 4 August 2020, of an average of $30 per hour for 30 hours per week or $900 per week gross earnings. The Claimant submits via his representative’s letter that he earned at the rate of $30 per hour, for 40 hours per week, being $1,200 per week over the 10-month period.
I am satisfied form the material available to me that the Claimant worked as a sole trader and earner for a period of greater than 13 weeks during the year immediately before the motor accident of 29 December 2019. I am further satisfied from this that the Claimant, as a painter, was earning income from personal exertion as defined in
s 3(2) and 3(3) of Schedule 1 of the Act.
I note the other earnings derived by the Claimant prior to the 12-month period immediately preceding the motor accident, such as from JS Painting Contractor Pty Ltd recorded in the 2018 financial year. However, these earnings cannot be counted towards the calculation of PAWE as I find they fall outside of the material period of 29 December 2018 to 28 December 2019.
I note the tax return to 30 June 2019 records less than the amount claimed to have been earned by ABP between March 2019 to the end of that financial year ($20,400) that I would expect if the claim of $1,200 earnings per week was substantiated ($1,200 per week for 17 weeks). Further, if I were to accept the claimed $900 per week ($30 per hour for 30 hours per week on average) as advised by JC to Procare Forensic Services for the Claimant’s “on and off” work over the 10-month period from March 2019 to December 2019, I would expect to see approximately $15,300 in earnings from JC Painting for that 17-week period worked in the 2019 financial year. However, in either instance the $10,580 earnings recorded in the 2019 taxation return falls well short of these amounts to corroborate evidence of higher earnings - whether at the rate of $900 per week or $1,200 per week.
The Insurer sets out in its written submissions in Reply that it does not dispute that the claimant has been paid some amount for performing some amount of work for
JC. The issue however, is establishing the quantum of those earnings. The Insurer submits in Reply that it is not possible to establish what income the claimant derived from this source during the period March through December 2019. In the Claim Form lodged, the Claimant noted that at the time of the motor accident he was working as a painter and decorator earning $1,000 per week. Relying on the Claimant’s subsequent information and submissions there is also a contrast between $1,200 earnings per week originally claimed; $900 gross earnings per week (Claimant’s submission at para 12); and $900 net earnings per week (Claimant’s submission at para 12).
I find the evidence and submissions of weekly earnings from the Claimant is not consistent and therefore, I consider this unreliable. There is also no taxation record provided for the 2020 financial year to establish reported earnings during that part of the year from 1 July 2019 to the date of accident of 29 December 2019.
I accept that any payments made to ABP in cash are not substantiated by any electronic records such as bank transactions. I note the Insurer’s reference to the case of AFC v NRMA [2019] NSWDRS MR 129 which discussed the notion that bank records alone did not afford sufficient evidence in that case of a self-employed graphics designer, of income from personal exertion as defined. I rely on JC’s information that he is unable to confirm that the Claimant was in receipt of any salary amounts from JC Painting in the 12-month period immediately prior to the motor accident. This is consistent with the Claimant not being an employee of that business. I accept from JC’s account that he did not receive any invoices rendered by the Claimant for any work undertaken for JC Painting. The notes of the conversation with Procare Forensic Services dated 3 August 2020 record JC’s inability to provide any global figure for the total contractor fees or any more precise dates other that the accepted “rough” estimate of work by the Claimant between March 2019 and December 2019. I accept also that JC does not have any bank or other records that reference payments made specifically to the Claimant for work.
I have discussed above the inconsistencies in the Claimant’s stated quantum of purported weekly earnings in the material period and therefore, the unreliability of information regarding average earnings for the purpose of calculating his PAWE. In the absence of documentary evidence, either by way of invoices rendered, or electronic transactions of payments made to the Claimant, or other documentary evidence of earnings to rebut the actual taxation records provided, I am unable to positively find with any confidence, that the earnings by the Claimant exceed those recorded on the taxation records available for the material period. I place weight on the taxation records of earnings including the ATO Notice of Assessment for the financial year ending 30 June 2019, to calculate the Claimant’s PAWE. This is the most recent documentary evidence of the Claimant’s income provided setting out earnings of $10,580 for that financial year. I prefer this evidence to the other evidence of earnings discussed above which I consider tenuous and inconsistent.
For the above reasons, I do not accept that the Claimant has established on balance, that he was earning greater than the $10,580 recorded in the taxation records over the material period. Accordingly, the calculation of his PAWE is $10,580 / 52 weeks or $203.46. This is consistent with the calculation of the PAWE set out in the Insurer’s consideration on Internal Review.
I accept the Claimant’s written submission at point 13 that the Claimant is expected to provide the insurer with relevant documentation, which the insurer is to review and make a determination of the claimant’s PAWE. In this particular case there is insufficient information provided to establish the greater earnings claimed. The notion proposed by the Claimant that other such cases have been decided on no documented evidence to support the claim regarding gross earnings and that the Insurer has accepted correspondence from employers and/or potential employers regarding the claimant’s wages, is not persuasive in my view, as each case is to be determined on its particular circumstances and the individual merits of each matter. As such, prior administrative action on the part of an Insurer does not necessarily bind a method for future decisions, although I acknowledge the importance of consistency in decision making on such matters.
I find the correct and preferrable decision in this case is that the Claimant’s PAWE is the rate as determined on Internal Review of $203.46 and confirmed in this Merit Review. Accordingly, I will affirm the reviewable decision of 17 September 2020.
The Insurer is to pay the Claimant any difference between what has been paid to the Claimant and what he is entitled to be paid in accordance with this Merit Review decision regarding his rate of PAWE of $203.46.

Costs

There is no dispute raised between the Claimant and the Insurer in respect of recovery of legal costs under section 8.10 of the Act.

The amount of the Claimant’s costs may be assessed in accordance with the Motor Accident Injuries Regulation 2017.

Conclusion

The reviewable decision is:
(a) affirmed.

The Claimant’s Pre-Accident Average Weekly Earnings of statutory benefits rate is $203.46.

Legislation and Guidelines

In making this decision, I have considered the following:

· The application, reply and supporting documentation
· The Act

· The Guidelines
· Motor Accident Injuries Regulation 2017, Personal Injury Commission Regulation 2020 (NSW) (the Regulations).

Steve Georgiadis

Merit Reviewer

Personal Injury Commission

[2021] NSWPICMR 19

15 June 2021