ACD v QBE Insurance

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	ACD v QBE Insurance [2021] NSWPICMR 31
APPLICANT:	ACD
RESPONDENT:	QBE Insurance
MERIT REVIEWER:	Maurice Castagnet
DATE OF DECISION:	26 July 2021
CATCHWORDS:	MOTOR ACCIDENTS- Merit Review; dispute between the claimant and the insurer about the amount of weekly payments of statutory benefits payable under section 3.8, Division 3.3, Part 3 of the Motor Accident Injuries Act 2017 after the second entitlement period; insurer submitted that claimant was able to return to work provided he was not required to do any heavy lifting or carrying; claimant submitted he did not have any current earning capacity; pre-accident earning capacity and post-accident earning capacity considered; Held- claimant has no post-accident earning capacity and therefore has suffered a total loss of earning capacity; reviewable decision set aside; insurer to make weekly payments to the claimant pursuant to section 3.8 accordingly.
DETERMINATIONS MADE:	1. The reviewable decision is set aside. 2. The claimant has no post-accident earning capacity as at the date the reviewable decision takes effect. 3. The insurer is to make weekly payments of $712.48 to the claimant pursuant to section 3.8 accordingly. 4. This decision takes effect on 13 November 2020.

Statement of Reasons

INTRODUCTION

There is a dispute between the claimant and the insurer about the amount of weekly payments of statutory benefits payable under s 3.8, Division 3.3, Part 3 of the 2017 Act after the second entitlement period.

THE CLAIMANT’S BACKGROUND

The claimant is a 36-year-old man who was injured in a motor accident on 7 March 2019.
He was born in India where he completed high school.
In 2005, he completed a three year full time Diploma in Hotel Management and Catering Technology in India.
He then worked in accounts for the Taj Hotel Group in India for about two years.
In 2009, the claimant came to Australia. For a period of about three months, he worked as a part-time waiter in a restaurant earning $21 per hour.
In the same year, he obtained a certificate in English for academic purposes and commenced a two-year Certificate IV in Small Business Management at the Australian College of Technology in Sydney. He completed that course in September 2011.
In December 2011, he obtained a Provisional Certificate in Master of Business Administration (Human Resource Management) from the Eastern Institute for Integrated Learning in Management University in Sikkim in India.
From March 2009 to January 2014, he worked as a part-time console attendant/operator and store manager at a service station outlet for United Petroleum.
Since November 2014 to the date of the motor accident, he worked as a full-time assistant manager/caretaker manager with Coles Express. He initially worked in Darwin and then at various service station outlets in Sydney.
At the time of the accident, he was working eight hours per day, five days per week at different outlets. He was doing morning shifts commencing at 5:00am and sometimes evening shifts.
At the time of the motor accident, he was earning on average, $1,079.60 gross per week.

THE CLAIM FOR STATUTORY BENEFITS

On 12 March 2019, the claimant made a claim for statutory benefits under Division 3.3, Part 3 of the 2017 Act.
Statutory benefits include weekly payments for lost earnings and payments for reasonable treatment and care. The insurer accepted liability for the claim.
To determine the claimant’s weekly payments, the insurer calculated his “pre-accident weekly earnings” (PAWE) in the amount of $1079.60 gross per week.
The claimant accepted the insurer’s calculation of his PAWE.
Based on the claimant’s PAWE, the insurer made applicable weekly payments to the claimant pursuant ss 3.6 and 3.8 of the 2017 Act for the first 78 weeks from the date of the accident. This represented weekly payments of statutory benefits during the “first entitlement period” and the “second entitlement period” after the date of the motor accident.

THE DISPUTE

The dispute arose when the insurer issued a decision on 2 September 2020 about the amount the claimant would receive in weekly payments after the first 78 weeks, that is, after the end of the second entitlement period commencing on 28 October 2020.
The insurer’s decision may be summarised as follows:
(a)    the claimant’s weekly payments after the second entitlement period will be calculated on the basis of loss of earning capacity;
(b)    the insurer has assessed the claimant as having capacity to earn as of 2 September 2020 and has determined that weekly payments are to be calculated at the rate of 85% of the difference between his pre-accident earning capacity and his post-accident earning capacity;
(c)    his pre-accident earning capacity is $869.96 net per week based the gross earnings of $1,079.60 per week in full-time employment as a store manager with Coles Express prior to the accident;
(d)    in his Certificate of Fitness dated 5 August 2020, Dr Ijaz Khan certified the claimant as having a work capacity for 8 hours per day, 3 days per week or 24 hours per week;
(e)    the claimant’s hourly rate of pay with Coles Express was $27.79864 and his current capacity equals $667.17 gross or $594.17 net per week, and
(f)    the claimant’s weekly payment effective from 28 October 2020 is $234.42 which is 85% of the difference between the claimant’s pre-accident earning capacity of $869.96 net per week and his post-accident earning capacity of $594.17 net.
On 12 November 2020, the claimant sought a review of the insurer’s decision. In support of his application, the claimant provided the insurer with a Certificate of Fitness issued by Dr Khan on 9 November 2020. In this certificate, Dr Khan certified that the claimant had capacity for some type of work from 9 November 2020 to 18 January 2021 of three hours per day, three days per week or nine hours per week.
On 4 December 2020, the insurer issued its review decision confirming the insurer’s original decision.
The claimant makes this application to the Personal Injury Commission (the Commission) to review the insurer’s review decision.

DOCUMENTS AND INFORMATION

In making this decision, I have considered the application, reply and supporting documentation.
I have also considered further submissions and documents provided by the parties during the review process.
Those documents include:
(a)    the documents considered by the insurer during its internal review process and listed in Certificate of Determination- Internal Review;[1]
(b)    the report of Dr Uthum K Dias, Occupational Physician, dated 18 January 2021;
(c)    the report of Dr Horace Ting, Occupational Therapist and Vocational Assessor, dated 1 April 2021;
(d)    the report of Ms Jane Bell, Rehabilitation Consultant, Rehab Focus, dated 23 December 2020, and
(e)    Schedule of Earnings dated 15 March 2021.
[1] See A4

INSURER’S SUBMISSIONS

The insurer’s submissions to the Commission may be summarised as follows:
(a)    the insurer relies on the Certificate of Fitness issued by Dr Khan on 5 August 2020 to maintain its position that the claimant has a post-accident earning capacity to work 24 hours per week after the second entitlement period;
(b)    the Commission should give no weight to Dr Khan’s opinion expressed in his Certificate of Fitness issued on 9 November 2020 because he has not provided any clinical reasons for the decrease in the claimant’s work capacity from 24 hours per week to 9 hours per week;
(c)    Dr Khan has not provided any explanation why the claimant’s ability to work at 20 months after the motor accident has deteriorated and, on that basis, the recent downgrade in work capacity to 3 hours a day, 3 days per week is not an accurate depiction of the claimant’s ability to work;
(d)    the payslips during the period from July 2019 to October 2019 demonstrates the claimant’s capacity to work after the accident and these are summarised as follows:

(i)15/7/19 - 21/7/19 – 24 hours.
(ii)22/7/19 - 28/7/19 – 29 hours.
(iii)5/8/19 – 11/8/19 – 24 hours.
(iv)12/8/19-18/8/19 – 20 hours.
(v)19/8/19 – 25/8/19 – 16 hours.
(vi)26/8/19 –1/9/19 – 24 hours.
(vii)2/9/19 – 8/9/19 – 20.5 hours.
(viii)9/9/19 -15/9/19 – 24 hours.
(xi)16/9/19 - 22/9/19 – 24 hours.
(x)23/9/19 – 29/9/19 – 16 hours.
(xi)30/9/19 - 6/10/19 – 21 hours.

(e)    the insurer relies on the opinion of Dr Mark Burns, Occupational Physician, expressed in his report dated 24 November 2020, that as at that date, the claimant was able to return to work at Coles Express provided he was not required to do any heavy lifting or carrying. The insurer notes that the claimant was certified fit to work within these restrictions during the period from July 2019 to October 2020;
(f)    Dr Burns also believed that the claimant’s injuries to the neck and right shoulder would not be causing him significant problems as his range of movement was essentially normal and his physical findings were not consistent with a cervical spine nerve root injury, and
(g)    the insurer relies on the opinion of Associate Professor Michael Shatwell, Orthopaedic Surgeon, expressed in his report dated 13 December 2020, that the claimant could manage his work as it is mainly managerial and does not involve any regular overhead lifting work. He considered the claimant was fit for the pre-accident managerial duties.

CLAIMANT’S SUBMISSIONS

The claimant’s submissions to the Commission may be summarised as follows:
(a)    his recent downgrade in work capacity to three hours per day and three days per week, certified by Dr Khan, is an accurate reflection of his fitness for work;
(b)    in the Certificate of Fitness dated 18 January 2020, Dr Khan certified that the claimant was fit for work as a console operator at Coles Express for 8 hours per day for three days per week and he was advised to increase the graduated trial by two hours per fortnight over the next eight weeks with an aim to be working 40 hours per week at the eight week mark. The claimant was advised to cease the trial if he was unable to cope;
(c)    weight and consideration should be given to the claimant’s treating doctor’s evidence;
(d)    the Commission should consider the matters referred to in clause 4.55 of the Guidelines when determining “employment reasonably available” to the claimant after the second entitlement period;
(e)    the claimant relies on the opinion of Dr Uthum K Dias, Occupational Physician, expressed in his report dated 18 January 2021, in particular:
(i)at the time of his examination, Dr Dias believed that the claimant was totally unfit for any form of employment that he would be qualified for by virtue of his previous education, training, and experience as a result of the injuries to his neck, right shoulder and chest wall.
(ii)the claimant’s symptomology and reduced functional tolerances will be an unacceptable risk of aggravation if he were to return to any job role he would be qualified to perform by virtue of his previous education, training, and experience at the present time.
(iii)it is likely that the claimant’s total incapacity for employment will continue an ongoing basis into the medium-term future over the next 1 to 2 years.
(h)    the claimant does not have any current earning capacity. This is reflected by the withdrawal of duties by his pre-injury employer;
(i)    the claimant accepts that his pre-accident weekly earnings of $1,079.60 gross per week also represents his pre-accident earning capacity, and
(j) for the period commencing 13 November 2020 and continuing, the claimant’s weekly payments under of s 3.8 of the 2017 Act should be calculated as follows: $1,079.60 x 80% - $0.00 = $863.68 gross per week = $695.98 net per week.

LEGISLATION AND GUIDELINES

In making this decision, I have considered the following:
• the 2017 Act
• Motor Accident Guidelines 2017 (Version 7 - March 2021) (the Guidelines)
• Motor Accident Injuries Regulation 2017 (the Regulation)

CONSIDERATION

Under Part 3, Division 3.3 of the 2017 Act, an injured person is entitled to receive weekly payments of statutory benefits in respect of loss of earnings and loss of earning capacity.
The 2017 Act provides for three separate periods of entitlement from the date of the motor accident.
The first 13 weeks is the first entitlement period. The second entitlement period is from weeks 14 to 78. The third period is from week 79.
A weekly payment of statutory benefits payable during the first and second entitlement periods is based on the claimant’s loss of earnings.
The insurer has made applicable weekly payments to the claimant for his loss of earnings during the first and second entitlement periods in accordance with the provisions of ss 3.6 and 3.7 of the 2017 Act.
In the third period, in accordance with s 3.8 of the 2017 Act, a weekly payment of statutory benefits is payable based on the claimant’s loss of earning capacity. The payment is treated as damages and therefore expressed as a net figure as it is not subject to tax. (See AllianzInsurance Ltd v Jenkins [2020] NSWSC 412).
The insurer considers that the claimant has suffered a partial loss of earning capacity and has determined that the weekly payment payable to the claimant under s 3.8 of the 2017 Act is $234.42. In making that determination, the insurer maintains that the claimant has the capacity to work 24 hours per week in his pre-injury employment.
The claimant says that the weekly payment should be $695.98 net per week, being 80% of his pre accident earning capacity, on the basis that he has no capacity to earn in his pre-injury employment or any employment reasonably available to him.
Although the third period commences on 28 October 2020, I note the claimant’s Schedule of Earnings indicate that the period of disputed weekly payments commences on 13 November 2020 and continuing.

It is appropriate to set out the provisions of the 2017 Act that govern the way weekly payments of statutory benefits are determined in the third period.
Section 3.8 relevantly provides:
“3.8   Weekly payments after second entitlement period (after week 78)
(1)     A person who is injured as a result of a motor accident and suffers a total or partial loss of earning capacity as a result of the injury is entitled to weekly payments of statutory benefits under this section after the end of the second entitlement period,
…
(2)     A weekly payment of statutory benefits under this section is to be at the rate of--
(a)in the case of total loss of earning capacity – 80%, or
(b)in the case of partial loss of earning capacity – 85%,
of the difference between the person's pre-accident earning capacity and the person's post-accident earning capacity (if any) after the second entitlement period.
[emphasis added]
…”
Clause 7 of Schedule 1 of the 2017 Act defines “pre-accident earning capacity” as follows:
“7     Meaning of ‘pre-accident earning capacity’
(1)     “Pre-accident earning capacity” of an injured person means the weekly amount a person had the capacity to earn before the motor accident concerned in employment reasonably available to the person in view of the person’s training, skills and experience.
(2)     If the amount of an injured person’s pre-accident earning capacity cannot be determined, the amount is deemed to be the amount that is equal to 80% of the average weekly total earnings of adults in full-time employment in New South Wales last published by the Australian Statistician.”
Clause 8 of Schedule 1 of the 2017 Act defines “post-accident earning capacity” as follows:
“8 Meaning of "post-accident earning capacity"
(1) "Post-accident earning capacity" of an injured person means –
(a)for the first and second entitlement periods – the weekly amount that the person has the capacity to earn in the employment in which the person was engaged immediately before the motor accident, determined on the basis of the person's fitness for work in that employment, or
(b)for any period after the second entitlement period – the weekly amount the person has the capacity to earn in any employment reasonably available to the person, determined on the basis of the person's fitness for work in any such employment.
(2) A person's fitness for work during the first and second entitlement periods is to be determined having regard to the following:
…
(3) A person's fitness for work after the second entitlement period is to be determined having regard to the following –
(a)the nature of the injury and the likely process of recovery,
(b)treatment provided and rehabilitation undertaken and the potential for further treatment and rehabilitation,
(c)the person's training, skills and experience,
(d)the age of the person,
(e)any medical certificate provided by the injured person as to the person's fitness for work.

(4) The Motor Accident Guidelines may make provision for the matters to be taken into account for the purposes of determining the employment reasonably available to a person in any period after the second entitlement period.”

For the purposes of determining the “employment reasonably available” to a claimant, Clause 4.55 of the Guidelines essentially repeat the provisions of Subclause 8(3) (a) to (e) but provides that the claimant’s education, the extent of his injuries, the nature of his pre-injury employment, his place of residence at the time of the motor accident and the length of time he has been seeking employment, are also relevant matters to be considered.
According to s 3.8 of the 2017 Act, a weekly payment of statutory benefits payable in the third period is the difference between the claimant’s pre-accident earning capacity and his post-accident earning capacity (if any) after the second entitlement period.
It is common ground between the parties that the claimant’s pre-accident earning capacity for the purposes of s 3.8 and Clause 7 of Schedule 1 is based on the average gross weekly wage of $1,079 .60, he received in his pre-injury employment with Coles Express.
To resolve the dispute about the weekly payment of statutory benefits payable the claimant in the third period, I am required to make a finding about the claimant’s post-accident earning capacity.
I have considered the extensive medical and other evidence, the provisions of s 3.8 of the 2017 Act, the relevant matters in Clauses 8 (1) (b) and 8 (3) of Schedule 1 of the 2017 Act and Clause 4.55 of the Guidelines.
The evidence reveals that the claimant suffered significant injuries in the motor accident.
The claimant was transported by ambulance to Westmead Hospital. The hospital clinical notes show that he sustained a right first lateral rib fracture, injuries to the neck, right clavicle, right anterior chest wall and right scapula. He was discharged the next day.
The diagnoses for his injuries include a C5/6 disc prolapse, right cervical radiculopathy with right C5/6 nerve root impingement, acute right parasternal costochondritis, features of multidirectional laxity and secondary impingement syndrome in his right shoulder, right elbow acute medial epicondylitis and right supraclavicular fossa swelling.
The claimant was off work for about four months after the accident, returning to work in July 2019 on restricted duties for eight hours a day, three days per week.
Since September 2019, the claimant has been treated by an orthopaedic shoulder specialist, Dr Jonathan Herald for neck and right shoulder problems.
In November 2019, the claimant was referred to a spinal surgeon, Dr Anil Nair, for the treatment of his neck.
Dr Nair believed that surgery was a possibility, and he considered that an anterior cervical discectomy and fusion of C5/6 and C6/7 was “on the cards”.
Dr Nair advised the claimant that he should initially proceed with a right C5/6 transforaminal corticosteroid injection and the claimant underwent this procedure in December 2019.

Between April 2019 and October 2020, the claimant underwent other forms of conservative treatment including physiotherapy, massage and electrotherapy to his neck, right shoulder, and sternum.
Since October 2020, the claimant has not had any further such treatments because the insurer has declined funding. He has relied on pain killers such as Panadol, Brufen and Nurofen. He also uses Voltaren gel several times a day and does gentle exercise.
In October 2020, the claimant sought a second opinion from neurosurgeon Dr Renata Abraszko about the need for surgery to his neck.
Dr Abraszko was also of the opinion that the claimant requires neck surgery. She recommended a C5/6 and right C6/7 posterior foraminotomy to avoid adjacent level disease and long segment fusion.
The claimant has decided to have neck surgery, but the insurer has not approved the funding.
On 12 November 2020, Dr Khan issued a further Certificate of Fitness after the claimant reported that he had to take about three sick days due to aggravation of his injuries. Dr Khan downgraded the claimant’s work capacity to three hours for three days a week on restricted duties.
On 24 November 2020, the claimant was examined by Dr Mark Burns, Occupational Physician, on behalf of the insurer. Dr Burns provided a report of the same date.
Dr Burns believed that neck surgery would not be considered reasonable and necessary. He saw no reason why the claimant could not return to his pre-injury role as a console operator/assistant manager at Coles Express, provided he did not have to do any heavy lifting or carrying. He believed that a functional assessment should be carried out and that the claimant should be able to return to work on a graded return to work plan.
In December 2020, Dr Herald recommended to the claimant that he undertake a CT guided cortisone injection for the right shoulder. This was done on 6 December 2020. The injection has not provided significant relief.
The insurer organised for the claimant to attend a functional assessment with Ms Jane Bell, Rehabilitation Consultant on 10 December 2020. The claimant attended the assessment. Ms Bell issued her report on 16 December 2020, and it was received by the insurer on 23 December 2020. The insurer did not provide the report to the claimant or to the Commission in its reply to this application. Pursuant to my direction under s 49 of the Personal Injury Commission Act 2020, the insurer has produced the report to the Commission and the claimant.
In her report, Ms Bell expressed the opinion that based on his current demonstrated capacity, the claimant did not meet the physical demands of his pre-injury duties as an Assistant Store Manager with Coles Express, therefore he was not capable of resuming all his pre-injury duties. Ms Bell believed that the claimant could undertake suitable light positions for eight hours per day three days per week within his assessed capabilities.
On 4 December 2020, the claimant was examined by Associate Professor Michael Shatwell on behalf of the insurer, and he provided a report dated 13 December 2020.
Associate Professor Shatwell believed that there was no indication for neck surgery and that the claimant’s ongoing symptoms should be managed conservatively. He believed the MRI findings for the claimant’s right shoulder was within normal limits and that there was no indication for surgery.
Associate Professor Shatwell believed that the claimant could manage his work as it was mainly managerial and did not involve any regular overhead lifting work. He considered the claimant fit for the usual managerial duties he did prior to the accident.
In his report dated 11 January 2021, Dr Herald expressed the opinion that the claimant’s shoulder pain was referred from his neck, and that he was developing a chronic pain syndrome.
On 18 January 2021, the claimant was examined by Dr Uthum Dias, Occupational Physician and he provided a report of the same date.
Dr Dias noted that the claimant’s duties as an assistant manager included customer service to clients, administrative tasks as well as physical tasks such as cleaning the shop, cleaning the footpath, organising stock, unloading pallets and stacking shelves in the store.
Dr Dias noted that the claimant’s job role involved prolonged standing, prolonged walking, lifting of store items weighing up to 20kg, occasional overhead work, intermittent bending and twisting of the lower back, intermittent kneeling and crouching and a minor degree of computer based administrative tasks. He would normally work alone and reported to a manager. He lived approximately a 60-minute drive from work and that he would drive to and from work as required.
Dr Dias believed that the claimant (as at the date of his examination) is totally unfit for any form of employment that he would be qualified for by virtue of his previous education, training and experience as a result of his injuries affecting his neck, right shoulder and chest wall.
In Dr Dias’ opinion, the claimant’s chronic symptomatology and reduced functional tolerances will be an unacceptable risk of aggravation if he were to return to any job role that he will be qualified to perform by virtue of his previous education, training and experience at the present time.
In Dr Dias’ opinion, the claimant is a likely candidate for surgical intervention in relation to his cervical spine condition due to his persisting significant right upper limb radicular symptomatology and signs. He believed that it is unlikely that the claimant would be fit to return to any form of gainful employment on the open labour market until he has made a reasonable recovery from cervical spine surgery over the course of the next one to two years.
In his Certificate of Fitness dated 15 February 2021, Dr Khan certified the claimant as fit for restricted duties for three hours per day, three days per week. Those restrictions included:
“the avoidance of all manual handling duties with the right upper limb distant from trunk and above shoulder height; all manual handling with right upper limb to be waist to shoulder and close to trunk; maximum lifting with right upper limb 5 kg waist to shoulder and close to trunk; pushing/ pulling with left arm only; travelling 30 minutes each way, then requires a rest and stretch break”.

Findings

Section 7.13(1) of the 2017 Act provides that in determining a merit review application, the merit reviewer is to decide what the correct and preferable decision is having regard to the material then before the reviewer.
Having regard to all the material that is now before me, I accept Dr Dias’ opinion and find that the claimant has no post-accident earning capacity and therefore has suffered a total loss of earning capacity since 13 November 2020 to date and continuing.
Dr Dias has reached his conclusion after considering the claimant’s injuries, the history of his treatment and rehabilitation, the treatment recommended by Dr Herald and
Dr Abraszko and the comprehensive details of the claimant’s duties and job role as an assistant manager in his pre-injury employment.
The claimant was not able to return to his pre-injury employment with Coles Express on the reduced hours and restricted duties for which he has been certified fit by Dr Khan. The employer advised him not to return to work until he was fully fit for all duties to avoid any risk of further injury.
This was also reflected in Dr Dias’s opinion, that the claimant’s chronic symptomatology and reduced functional tolerances will be an unacceptable risk of aggravation if he were to return to any job role that he will be qualified to perform by virtue of his previous education, training and experience.
This is indeed what occurred in October 2020 when the claimant was trying to perform some of his duties on reduced hours.
Dr Burns and Ms Jane Bell were also of the view that the claimant was fit only for light duties. Unfortunately, the claimant’s employer has declined to employ the claimant unless he is able to do all of the duties of his position.
Dr Shatwell expressed the opinion that the claimant could manage his work as it is mainly managerial and does not involve any regular overhead lifting work. He considered the claimant was fit for the pre-accident managerial duties. I do not accept that opinion because it is based on the premise that the claimant’s work was mainly managerial. It is apparent from the evidence that it is not.
Using the Weekly Tax Table issued by the Australian Taxation Office,[2] my calculation of the net figure for the gross amount of $1,079.60 is $890.60.
[2] ATO Website, Weekly Tax Table for payments made on or after 13 October 2020
Pursuant to ss 3.8(2)(a) of the 2017 Act, I find that the weekly payment of statutory benefits payable to the claimant is 80% of $890.60 which equals $712.48.

Conclusion

The reviewable decision is set aside.
The claimant has no post-accident earning capacity as at the date the reviewable decision takes effect.
The insurer is to make weekly payments of $712.48 to the claimant pursuant to section 3.8 accordingly.
This decision takes effect on 13 November 2020.

[2021] NSWPICMR 31

26 July 2021