Ayache v Allianz Australia Insurance Limited
[2022] NSWPICMR 41
•18 July 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Ayache v Allianz Australia Insurance Limited [2022] NSWPICMR 41 |
| CLAIMANT: | Sam Ayache |
| INSURER: | Allianz Australia Insurance Limited |
| MERIT REVIEWER: | Kriesen Seeneevassen |
| DATE OF DECISION: | 18 July 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Refusal of payment of statutory benefits; workers compensation claim; Held — insurer’s duty to provide written reasons for decisions that materially affect entitlements to statutory benefits. |
| DETERMINATIONS MADE: | Certificate Determination 1. The reviewable decision is: a. set aside and the following decision is made in substitution for the reviewable decision: (i) The insurer may not refuse statutory benefits under Part 3 of the Act because the insurer did not communicate its decision in accordance with their obligations under s 6.3(3) of the Act. (ii) The insurer requires the claimant to make a claim for workers compensation for the injury with the relevant workers compensation insurer, in accordance with s 3.35(4) of the Act, within 14 days of the date on which the claimant receives this determination. The reasons given for this merit review determination are the reasons for this substituted decision of the insurer. 2. This decision takes effect on 18 July 2022. |
Background
There is a dispute between Sam Ayache (the claimant) and Allianz (the insurer) about whether the insurer is entitled to refuse payment of statutory benefits under s 3.35(2)(b) of the Act on the basis that the claimant failed to comply with the insurer’s request under s 3.35(4) of the Act to make a claim for workers compensation.
The claimant is a real estate agent who was injured in a motor vehicle accident (MVA) on 16 November 2021. At the time of the MVA he was allegedly the driver of a business registered vehicle during business hours.
The claimant lodged an application for personal injury benefits on 24 November 2021.
On 1 December 2021, the insurer emailed the claimant requesting him to lodge a workers compensation claim.
On 8 December 2021, the insurer sent another email to the claimant asking him to lodge workers compensation claim.
On 14 December 2021, the insurer yet again sent an email asking the claimant to lodge the workers compensation claim. On the same day, the claimant’s legal representative requested the insurer to proceed with the compulsory third party (CTP) claim because the claimant was not entitled to workers compensation claim.
On 22 December 2021, the CTP insurer declined liability for personal injury benefits on the basis that the claimant may be entitled to compensation under the Workers Compensation Act1987 and failed to lodge a workers compensation claim despite being asked to do so.
There is an email from the insurer to the claimant dated 25 January 2022 showing that they had conducted an internal review and maintained their decision of 22 December 2021 to deny liability for the CTP claim.
On 27 January 2021, the claimant lodged a merit review application requesting a review of the insurer’s decision with the Personal Injury Commission (the Commission).
Documents and information
On 17 March 2022, I advised the parties that I may proceed to make this decision on the papers. At the same time, I issued directions to the parties requesting them to lodge all the relevant material that they would like me to consider in reviewing the claimant’s pre accident weekly earnings (PAWE).
I have reviewed all the documents that the parties have made available.
Submissions
The claimant’s submissions are summarised below:
(a) The claimant does not wish to make a false or baseless claim on his workers compensation insurer.
(b) If the Commission directs the claimant to lodge a workers compensation claim, the claimant will make it clear to his workers compensation insurer that he is lodging a claim pursuant to a Commission’s direction and that he was not travelling for work on the date of the MVA.
The insurer’s submissions are as follows:
(a) There are reasonable grounds that workers compensation is or may be payable in respect of the claimant’s injury because:
(i)Payroll advices from AP Property Consultants Pty Ltd show that the claimant was receiving a salary, superannuation, and other employee benefits. This suggests that he is an employee who is entitled to workers compensation.
(ii)According to the claimant’s certificate of earnings, he works from 9.00am to 6.00pm, and the MVA happened on Tuesday 16 November 2021 at 1.27pm.
(iii)It is not unusual for real estate agents to travel via vehicles during their employment.
(iv)The MVA occurred within a five minute vicinity of the claimant’s office address.
(v)The claimant was in a business registered vehicle when the MVA occurred.
(vi)The insurer asked the claimant if he was in the course of his employment at the time of the MVA. The claimant responded that he is always working.
(b) The insurer has asked the claimant to make a workers compensation claim on multiple occasions. The claimant has failed to do so. Consequently, the insurer declined the claimant’s claim for statutory benefits on 22 December 2021 pursuant to s 3.35(2)(b) of the Act.
(c) The insurer is not pressuring the claimant to make a fraudulent workers compensation claim and refutes that they are directing the claimant to do so.
(d) It is not for the insurer to determine if a claimant is entitled to workers compensation. It is enough for the insurer to have reasonable grounds that workers compensation may be payable.
(e) In light of the above, the insurer has established that they have reasonable grounds that
Legislative Framework
Section 3.35 of the Act states:
No statutory benefits if workers compensation payable
(1) An injured person is not entitled to statutory benefits under this Part if compensation under the Workers Compensation Act 1987 ("workers compensation") is payable to the injured person in respect of the injury concerned (or would be payable if the liability for workers compensation had not been commuted).
(2) The relevant insurer for a claim for statutory benefits under this Part is not entitled to refuse payment of statutory benefits under this Part on the grounds that workers compensation is payable in respect of the injury unless--
(a)the injured person has made a successful claim for workers compensation in respect of the injury, or
(b)the injured person has failed to comply with a request by the relevant insurer under this section to make a claim for workers compensation in respect of the injury.
(3) A claim for workers compensation is considered to have been successful if liability for any workers compensation has been accepted by the insurer for the claim under the Workers Compensation Act 1987 . Liability is considered to have been accepted until liability is wholly denied (and for that purpose a denial of liability does not count while it is the subject of a dispute under that Act).
(4) If the relevant insurer for a claim for statutory benefits under this Part considers on reasonable grounds that workers compensation is or may be payable in respect of the injury concerned, the insurer may require the injured person to make a claim for workers compensation in respect of the injury.
(5) Statutory benefits are not payable under this Part in respect of any matter for which workers compensation was paid before liability for workers compensation was denied.
(6) Statutory benefits are not payable under Division 3.2 (Statutory benefits for funeral expenses) if workers compensation is paid or payable in respect of the death under Division 1 of Part 3 of the Workers Compensation Act 1987.
(7) A person who makes a claim for statutory benefits under this Part and a claim for workers compensation must inform both insurers of that fact (unless the insurers would already be aware of both claims having been made). Insurers under this Act and the Workers Compensation Act 1987 may exchange information for the purposes of facilitating the proper operation of this section.
(8) Nothing in this section affects the entitlement of an injured person to statutory benefits for treatment and care under Division 3.4 in respect of an injury if compensation under Division 3 (Compensation for medical, hospital and rehabilitation expenses etc) of Part 3 of the Workers Compensation Act 1987 previously payable in respect of the injury has ceased to be payable. The relevant insurer is not entitled to refuse payment of the statutory benefits on the grounds that workers compensation was previously payable under that Division.
The insurer’s communications with the claimant
On 1 December 2021, the insurer sent a letter by email to the claimant stating that they have reviewed the circumstances of the MVA and it appears that he may be entitled to workers compensation. In that letter, the insurer:
(a) Recommends (my emphasis) that the claimant lodges a workers compensation claim as he may not have an entitlement under the CTP scheme.
(b) Requests (my emphasis) that the claimant lodges a workers compensation claim within 14 days pursuant to s 3.35(4) of the Act.
(c) Advises (my emphasis) the claimant to lodge a workers compensation claim as a matter of urgency.
On 8 December 2021, the insurer sent another email to the claimant asking him to confirm whether he has lodged the workers compensation claim and requiring him to do so before 24 December 2021.
On 14 December 2021, the insurer sent yet another email to the claimant asking him to lodge his workers compensation claim that week. The claimant’s legal representative responded the same day that the claimant was not on a business journey at the time of the MVA, and that he is not making a workers compensation claim. The insurer was to proceed with the CTP claim.
Reasons and findings
Section 6.3(3) of the Act sets out the duty of insurers to act with good faith as follows:
(a) The duty to provide a claimant with information about entitlements to statutory benefits and damages,
(b) A duty to disclose all relevant information (including reports by health professionals) relied on to make a decision on a claim,
(c) The duty to provide written reasons for all decisions that materially affect a claimant’s entitlement to statutory benefits or damages,
(d) The duty to advise a claimant of any right under this Act to review any such decision of the insurer,
(e) The duty to make prompt payment of statutory benefits and damages.
A decision by an insurer to exercise its power to require a claimant to make a claim for workers compensation under s 3.35(4) of the Act is one which materially affects their entitlement to statutory benefits. The insurer had a duty to make the reasonable grounds on which they believed that workers compensation payments may be payable clear to the claimant. Further, they had a duty to provide reasons as to why it reached that view and to explain to the claimant the significance of this issue on the outcome of his claim for statutory benefits.
The insurer provided the claimant with the reasons for their decision in their letter dated 22 December 2021 denying liability for the claim, but I do not think that it is enough to meet their obligations under s 6.3(3) of the Act. In my view, they were obliged to do so at the time that they made the request to the claimant to lodge a workers compensation claim.
The insurer’s various communications with the claimant between 1 December and 14 December 2021 are vague and imprecise. They did not disclose the reasonable grounds on which they rely when considering that workers compensation is or may be payable. Other than making a reference to s 3.35(4), the insurer also failed to refer to the other relevant sections of the Act requiring a worker’s compensation claim to be lodged.
Ultimately, they failed to communicate their reasons for requesting the claimant to lodge a workers compensation claim in accordance with their obligations under s 6.3(3) of the Act because they did not discharge their duty to provide the claimant written reasons for all decisions that materially affect his entitlement to statutory benefits when they were required to do so. Consequently, I find that the correct and preferable decision in this matter is that the insurer cannot rely on s 3.35(2)(b) of the Act to refuse payment of statutory benefits, at this stage.
Nonetheless, under s 3.35(1) of the Act an injured person is not entitled to statutory benefits if compensation under the Workers Compensation Act 1987 is payable to the injured person in respect of the injury concerned.
The question remains as to whether workers compensation is payable to the claimant. While the claimant’s legal representative maintains that it is not payable, the matter is not for the legal representative, or for me, to decide. It must be put to the relevant workers compensation insurer for their decision.
The claimant should make a workers compensation claim and provide the details to the insurer to follow up and clarify, provision for which is made under s 3.35(7) of the Act.
Conclusion
The reviewable decision is:
(a) set aside and the following decision is made in substitution for the reviewable decision:
(i) The insurer may not refuse statutory benefits under Part 3 of the Act because the insurer did not communicate its decision in accordance with their obligations under s 6.3(3) of the Act.
(ii) The insurer requires the claimant to make a claim for workers compensation for the injury with the relevant workers compensation insurer, in accordance with s 3.35(4) of the Act, within 14 days of the date on which the claimant receives this determination. The reasons given for this merit review determination are the reasons for this substituted decision of the insurer.
27. This decision takes effect on 18 July 2022.
Legislation and Guidelines
28. In making this decision, I have considered the following:
· The application, reply and supporting documentation
· Motor Accident Injuries Act 2017 (NSW) (the Act)
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