Alzate v Insurance Australia Limited t/as NRMA
[2023] NSWPICMR 51
•10 October 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Alzate v Insurance Australia Limited t/as NRMA [2023] NSWPICMR 51 |
| CLAIMANT: | Angelica Alzate |
| INSURER: | NRMA |
| MERIT REVIEWER: | Katherine Ruschen |
| DATE OF DECISION: | 10 October 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; dispute about payment of weekly benefits under division 3.3; whether interim payments available after the first entitlement period, after 13 weeks; sections 3.6, 3.7, and 3.8; meaning of earner; schedule 1, clause 2; whether arrangement to commence employment or self-employment at a particular time and place; meaning of pre-accident weekly earnings; schedule 1, clause 4(b); whether sufficient information to determine pre-accident weekly earnings, Held – the reviewable decision is affirmed. |
| DETERMINATIONS MADE: | CERTIFICATE Issued under s 7.13(4) of the Motor Accident Injuries Act2017 DETERMINATION 1. The reviewable decision is affirmed. |
STATEMENT OF REASONS
INTRODUCTION
There is a dispute between Angelica Alzate (the claimant) and the insurer about the amount of weekly payments of statutory benefits payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
The claimant was involved in a motor accident on 18 May 2023.
On 3 June 2023 the claimant made an application for personal injury benefits under the MAI Act.
The insurer determined that insufficient information was available upon which to determine the claimant’s pre-accident weekly earnings (PAWE) and determined that interim payments would be made under s 3.6(5) of the MAI Act until such time as sufficient information is provided by the claimant to enable PAWE to be calculated.
On 7 June 2023 and again on 31 July 2023 the insurer requested further information relevant to PAWE such as tax returns, pre-filing statements, payslips and in relation to any self-employment, invoices issued by the business, Australian Business Number (ABN) details and a summary of business expenses. To date, this complete information has not been provided.
On 10 August 2023 the insurer determined that interim payments would cease on 18 August 2023 being 13 weeks after the motor accident.
On 27 August 2023 the claimant requested an internal review of the insurer’s decision of 10 August 2023.
On 1 September 2023 the insurer issued their internal review decision in which the insurer affirmed their original decision that interim payments under s 3.6 would cease on 18 August 2023.
The claimant has requested a merit review of the insurer’s internal review decision dated 1 September 2023.
SUBMISSIONS
In her application for personal injury benefits the claimant states she was unemployed as of the date of the accident and in receipt of Centrelink parenting benefits. The claimant subsequently advised the insurer she had started a business shortly before the accident. In her application for a merit review the claimant clarifies that the business had not received any income in “the previous weeks” prior to the accident but had “work lined up to start in June”. The applicant submits she was unable to carry out this work as a result of the motor accident.
The insurer relies on a report from PKF forensic accountants dated 14 August 2023 and submits:
(a) there is insufficient information upon which to determine whether the claimant is an earner within the meaning in the MAI Act;
(b) even if the claimant were an earner, there is insufficient information to determine the claimant’s PAWE;
(c) in the circumstances, the claimant’s entitlement to weekly payments is limited to interim payments under s 3.6 of the MAI Act;
(d) interim payments totalling 13 weeks have been paid to the claimant in accordance with s 3.6(5) of the MAI Act, and
(e) there is no entitlement to interim payments beyond the first entitlement period that is, beyond the first 13 weeks after the motor accident.
REASONS
Issues
There following issues arise:
(a) whether the claimant is an earner within the meaning of the MAI Act;
(b) whether the claimant has provided sufficient information to determine PAWE, and
(c) whether there is any entitlement to interim payments beyond the first 13 weeks after the accident.
If the claimant is not an earner for the purpose of the MAI Act, she is not entitled to weekly payments at all, including that there is no entitlement to interim payments under s 3.6 of the MAI Act. That issue, however, is not expressly the subject of this merit review. Whilst it appears the insurer does not concede the claimant is an earner, the insurer decided to pay interim payments in any event.
Nonetheless, I consider the question of whether the claimant is an earner relevant to determination of any ongoing entitlement to weekly payments after the first 13 weeks. I have therefore addressed this issue on this basis.
Is the claimant an earner?
“Earner” is defined in Schedule 1, cl 2 of the MAI Act as follows:
“A person who is injured as a result of a motor accident is an ‘earner’ if the person is at least 15 years of age and who--
(a) was employed or self-employed (whether or not full-time)--
(i) at any time during the 8 weeks immediately preceding the motor accident, or
(ii) during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii) during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,
and, at the date of the motor accident, had not retired permanently from all employment, or
(b) before the motor accident, had entered into an arrangement (whether or not an enforceable contract)--
(i) with an employer or other person to undertake employment, or
(ii) to commence business as a self-employed person,
at a particular time and place, or
(c) was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987.”
The following evidence establishes on balance that the claimant was not employed at any time in the eight week period preceding the accident or for a period equal to at least 13 weeks in the year preceding the accident or a period equal to at least 26 weeks in the two years preceding the accident and is therefore not an earner under any of cl 2(a)(i) to (iii):
(a) the claimant declared in her application for personal injury benefits that she was unemployed at the time of the accident;
(b) in raising the issue of an arrangement to commence a business after the accident the claimant conceded there had been no income before the accident;
(c) notices of assessment for the claimant show nil income in the 2020 and 2021 tax years and only $18 in income in the 2022 tax year (the source of this income is unknown and may have been from a source other than earnings as an earner such as interest on investments. In any event it can be inferred from the nominal amount that the claimant was not employed for 8, 13 or 26 weeks in any period preceding the accident, as required respectively by cl 2(a)(i) to (iii)), and
(d) there is no evidence of any income received in the period after the period covered by the 2022 notice of assessment that is, from 1 July 2022 to the date of the accident on 18 May 2023.
There is no evidence to suggest the claimant is an earner under cl 2(c). This leaves cl 2(b) pursuant to which the claimant may be considered an earner if, before the accident, she had entered into an arrangement to undertake employment or commence business as a self-employed person “at a particular time and place”.
There is no evidence of any arrangement for the claimant to commence business as a self-employed person “at a particular time and place” (or at all) after the date of the motor accident. Accordingly, the claimant is not an earner under cl 2(b)(ii).
As to cl 2(b)(i), the claimant has provided documents showing that a company named “Boomerang Poker Pty Limited” was registered on or about 8 May 2023 (10 days prior to the accident) This company also obtained a tax file number, registered a business name, obtained GST registration, opened a bank account and established a mobile phone connection/account on or about 8 May 2023.
There is no evidence that the claimant has any involvement in this company. The documents from the Australian Taxation Office, bank etcetera are addressed to the same address as that provided by the claimant in her application for a merit review. However, it is not known who else resides at that address and may have set up the company.
In any event, pursuant to s 1.5.1 of the Corporations Act 2001 (Cth) Boomerang Poker Pty Limited is:
“[a]s far as the law is concerned, a company has a separate legal existence that is distinct from that of its owners, managers, operators, employees and agents. A company has its own property, its own rights and its own obligations. A company's money and other assets belong to the company and must be used for the company's purposes.”
Accordingly, regardless of whether the claimant is a director or shareholder of Boomerang Poker Pty Limited the claimant and the company are separate legal entities. An arrangement to earn income through a company structure is therefore not self-employment where one trades through their own name, under a business name registered to their individual name.
Accordingly, the circumstances fall for consideration under cl 2(b)(i). As such, the claimant must establish on the balance of probabilities that before the accident, she had arranged to commence employment with Boomerang Poker Pty Limited at a “particular time and place” and there is simply no evidence of this. For example, there is no documentary evidence to support the contention that the company “had work lined up to start in June”. If this were the case one would expect there to be contemporaneous written records of such arrangements having been made before the accident that would show the time(s) and date(s) of the work “lined up” the location(s).where this work had been arranged to take place, the identity of the party to whom the company intended to provide the services on the arranged dates at the arranged locations and the amount that had been agreed to be paid to the company.
The claimant has the onus of establishing on the balance of probabilities that she had arranged, before the accident, to commence employment with Boomerang Poker Pty Limited “at a particular time and place”. Documents that simply show a company was set up prior to the accident are not sufficient. At best, the claimant’s potential employment with Boomerang Poker Pty Limited, including when she would commence that employment and where is speculative. Clause 2(b) requires, however, specificity in relation to the arrangement for employment, including that a “particular time and place” had been arranged before the accident. I am therefore not comfortably satisfied on balance that the claimant is an earner under cl 2(b) of the MAI Act.
Accordingly, as none of the circumstances in cl 2 have been established, I conclude on the balance of probabilities that the claimant is not an earner as defined in Schedule 1, cl 2 of the MAI Act.
PAWE
If the claimant were an earner under Schedule 1, cl 2(b) her PAWE would fall for assessment under Schedule 1, cl 4(2)(c) of the MAI Act, which provides that PAWE means:
“…if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person--the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.”
Accordingly, to be able to determine PAWE the claimant would need to provide evidence of the employment arrangement she had entered into with Boomerang Poker Pty Limited, including how and when she expected to be paid income by Boomerang Poker Pty Limited. There would also need to be evidence of the reasonably expected income of Boomerang Poker Pty Limited against which to test whether the claimant could have “reasonably” expected to be paid by a newly established company/business in accordance with the pre-accident arrangement. Clause 4(2)(c) requires not only an assessment of the amount the claimant could have expected to earn under the arrangement but also an assessment as to whether that expectation is reasonable.
As noted above, there is no evidence of what, if any arrangement had been made regarding the commencement of employment with Boomerang Poker Pty Limited. There is no evidence as to how the company intended to pay the claimant for example, as an employee of the company or by way of a director’s fee or shareholder dividend payments potentially available from the company’s net profit (assuming the claimant is a director or shareholder of the company).
There is no evidence of the nature of the business intended to be conducted by Boomerang Poker Pty Limited or the manner in which it expected to generate income. There is no evidence of anticipated income of the business and no evidence of expenses of the business (whether already incurred or anticipated) so as to enable an assessment of the reasonably expected net profit (that is, after accounting for business expenses) of the business.
Whilst the claimant contends the business had “work lined up” to commence on an unspecified date in June 2023 there is no evidence in support of this contention, including no evidence of the payment(s) the business could expect to receive for this work or the expenses that would be incurred in connection with the work or running of the business. It may be, for example, that the business expected to incur a loss for the immediate foreseeable future, as is the case with many start up businesses, in which case the claimant could not reasonably expect to receive earnings from the company (whether as an employee or shareholder) in the immediate foreseeable future.
In any event, there is simply no evidence upon which any assessment of PAWE could be undertaken under cl 4(2)(b) or otherwise. It follows that for the purpose of whether ongoing weekly payments are available under s 3.7 the MAI Act that the claimant’s PAWE is nil.
Interim payments
Section 3.6 of the MAI Act prescribes the basis upon which weekly payments may be available for the first 13 weeks after the motor accident that is, the first entitlement period and provides:
“(1) 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 under this section during the first entitlement period.
Note: Only a person who was an earner when injured is entitled to statutory benefits under this section--see Schedule 1.
(2) A weekly payment of statutory benefits under this section is to be at the rate of 95% of the difference between the person's pre-accident weekly earnings and the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, for the first entitlement period.
(3) A weekly payment of statutory benefits to a person under this section is not to exceed the maximum weekly statutory benefits amount less the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, for the first entitlement period.
(4) A weekly payment of statutory benefits to a person under this section is not to be less than the minimum weekly statutory benefits amount or the person's pre-accident weekly earnings, whichever is the lesser.
(5) If a weekly payment of statutory benefits is payable under this section, but further information is required to determine the amount of the payment, interim payments are to be made in accordance with the Motor Accident Guidelines until the correct amount of the payment can be determined and paid.”
Section 3.6(5) is relevant to this matter and provides for interim payments to be made in circumstances where further information is required to determine the amount otherwise payable. Section 3.6(2) clearly requires a determination of PAWE before the amount payable under s 3.6 can be determined. Further information is required to determine the claimant’s PAWE in which case, further information is required to determine the amount payable under s 3.6.
Whilst I have concluded on balance above that the claimant is not an earner for the purpose of the MAI Act the insurer decided to make interim payments under s 3.6. The insurer has paid interim payments for a total of 13 weeks that is, for the whole of the first entitlement period under s 3.6.
The information provided remains insufficient to determine PAWE. Interim payments are only available under s 3.6 for the first entitlement period. Sections 3.7 and 3.8 prescribe the basis upon which weekly payments may be available in the second and third entitlement periods, that is, after the first entitlement period comes to an end. There is no provision in ss 3.7 or 3.8 for interim payments. Accordingly, the claimant’s entitlement to interim payments ceases 13 weeks after the accident under s 3.6. As the claimant has received interim payments for the full 13 weeks after the accident, she has no further entitlement to such payments.
Is the claimant otherwise entitled to weekly payments?
Section 3.7 of the MAI Act deals with weekly payments in the second entitlement period that is, weeks 14 to 78 after the motor accident and provides:
“(1) 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 under this section during the second entitlement period.
Note: Only a person who was an earner when injured is entitled to statutory benefits under this section--see Schedule 1.
(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 earnings--80%, or
(b) in the case of partial loss of earnings--85%,
of the difference between the person's pre-accident weekly earnings and the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, after the first entitlement period.
(3) A weekly payment of statutory benefits to a person under this section is not to exceed the maximum weekly statutory benefits amount less the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, after the first entitlement period.
(4) A weekly payment of statutory benefits to a person under this section is not to be less than the minimum weekly statutory benefits amount or the person's pre-accident weekly earnings, whichever is the lesser.”
Section 3.8 deals with the third entitlement period that is, after 78 weeks after the motor accident and provides:
“(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, but only if the person--
(a) is at least 18 years of age (whether or not the person is an earner), or
(b) is under 18 years of age and is an earner.
Note: The person's age after the second entitlement period is relevant to determining entitlement to statutory benefits after the second entitlement period. A person's age at the date of the motor accident is not relevant. Schedule 1 defines when a person is an earner.
(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) or post-accident earnings, whichever is the greater, after the second entitlement period.
(3) A weekly payment of statutory benefits to a person under this section is not to exceed the maximum weekly statutory benefits amount less the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, after the second entitlement period.
(4) A weekly payment of statutory benefits to a person under this section is not to be less than the minimum weekly statutory benefits amount or the person's pre-accident earning capacity, whichever is the lesser.”
Section 3.7(2) requires determination of the difference between the person's PAWE and the person's post-accident earning capacity (if any) or post-accident earnings before there is any entitlement to weekly payments. The claim is currently within the second entitlement period under s 3.7. As with s 3.6, the claimant’s PAWE must be capable of determination before she has any entitlement under ss 3.7. As the claimant’s PAWE cannot be determined, the claimant is not entitled to weekly payments under s 3.7. As noted, s 3.7 does not permit interim payments where PAWE cannot be determined.
Where there is insufficient evidence to determine PAWE it follows that for the purpose of whether weekly payments are available under s 3.7 the claimant’s PAWE is nil, meaning weekly payments are not available as there can be no loss of earnings as a result.
Further and in the alternative, I have concluded on balance that the claimant is not an earner within the meaning of Schedule 1, cl 2 of the MAI Act. An injured person is only entitled to weekly payments if they are an earner within the meaning in the MAI Act. As I have concluded the claimant is not an earner, she has no entitlement to weekly payments under Division 3.3 of the Act in any event.
CONCLUSION
For the reasons set out above:
(a) on the balance of probabilities, the claimant is not an earner within the meaning in Schedule 1, cl 2 of the MAI Act and is therefore not entitled to weekly payments;
(b) even if the claimant were an earner, there is insufficient information upon which to determine the claimant’s PAWE such that the claimant’s entitlement to weekly payments under s 3.6 of the MAI Act is limited to interim payments (which have been made by the insurer);
(c) there is no entitlement to interim payments beyond the first entitlement period under s 3.6, and
(d) even if the claimant were an earner for the purpose of the MAI Act there continues to be insufficient evidence upon which to determine PAWE and accordingly, as interim payments are no longer available the claimant’s entitlement to weekly benefits under s 3.7 is nil.
Accordingly, the reviewable decision is affirmed.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· The Application, Reply and supporting documentation;
· MAI Act;
· Motor Accident Guidelines, and
· Motor Accident Injuries Regulation 2017.
0
0
0