Butcher v QBE Insurance (Australia) Limited
[2021] NSWPICMR 46
•22 October 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Butcher v QBE Insurance (Australia) Limited [2021] NSWPICMR 46 |
| CLAIMANT: | Regina Butcher |
| INSURER: | QBE Insurance (Australia) Limited |
| MERIT REVIEWER: | Ray Plibersek |
| DATE OF DECISION: | 22 October 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit Review; Claimant’s back was injured while transported in the back of a police wagon in custody; amount of weekly payments under section 3.7 of the Motor Accident Injuries Act 2017 (MAI Act); what definition in clause 4 in Schedule 1 of pre-accident weekly earnings should apply to determine the Claimant’s weekly earnings; Claimant worked in a higher paying casual job for 10 weeks prior to motor accident; Held - Claimant is entitled to weekly payments of statutory benefits during the second entitlement period under section 3.7 and sub-clauses 4(2)(b) and 4(3) of Schedule 1 of the MAI Act; Claimant’s earnings to be calculated on the basis of higher earnings in a new higher paying job with a new employer; legal costs of nil; no exceptional circumstances. |
| DETERMINATIONS MADE: | 1. The reviewable decision is set aside and in substitution a decision is made that the Claimant is entitled to weekly payments of statutory benefits during the second entitlement period in accordance with section 3.7 and sub-clauses 4(2)(b) and 4(3) of Schedule 1 of the Motor Accident Injuries Act 2017. 2. The insurer is to calculate the amount of the payment based on the Claimant’s pre-accident weekly earnings she had as support worker with Aruma immediately before the accident. 3. The insurer is to calculate and pay the Claimant for her loss of earnings for the period from from 27 October 2020 to 19 January 2021. 4. The amount of legal costs awarded in this case is $NIL. |
Reasons for Decision
Issued under section 7.13(4) of the Motor Accident Injuries Act2017
Background
There is a dispute between the Claimant, Ms Regina Butcher, and the insurer about the payment of her lost wages when her back was injured while she was travelling in the back of a police paddy wagon. In practicle terms, the dispute is about how the Claimant's pre-accident weekly earnings (PAWE) should be calculated.
In legal terms, the dispute is a merit review application about the amount of weekly payments of statutory benefits that are payable to the Claimant under Part 3 Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
The Claimant’s back was jolted and injured while she was being transported in the back of a police wagon on 19 July 2020. At the time she was injured, the Claimant was working as a support worker with Aruma earning between $700 to $800 per week, (AD 4).
The Claimant lodged an Application for Personal Injury Benefits on 27 October 2020, (AD 4).
On 18 November 2020, the insurer wrote to the Claimant, advising that it had calculated the Claimant’s PAWE to be $289.43, (R2).
On 18 November 2020 the Claimant made an application for Internal Review for a decision about the calculation of her income, (R3). In her application she states that she did not work from 10 June 2019 to 18 October 2019 due to a broken leg. The Claimant also states that from 20 January 2020 to 5 May 2020 she did not work as she was engaged in full time study. She states that she was working for approximately three months at the time of the incident and her pay should be calculated from that job.
On 19 November 2020, the insurer wrote to the Claimant advising that it accepted liability for statutory benefits up to 26 weeks after the date of the accident.
On 3 December 2020, the insurer decided that the Claimant had sustained minor injuries and that it declined liability for ongoing benefits after 19 January 2021.
On 7 December 2020, the insurer advised the Claimant that it had completed her request for an internal review and that it had calculated the Claimant’s PAWE to be $289.38, (R4). The method of calculation of the Claimant’s PAWE used in the internal review was to rely on Schedule 1 sub-clause 4 (1). The Internal Review reasoned that because the Claimant had intermittent periods of employment over the 12-month period immediately before the accident her PAWE should be calculated from 19 July 2019 to 18 July 2020. The total income over that 52-week period then divided by 52 to give weekly earnings figure of $289.38, (R 4, page 4). This 52-week period included about 14 weeks where the Claimant was not earning an income but studying, (R1).
On 1 February 2021 the Claimant made an application for Internal Review concerning the minor injury decision.
On 23 February 2021 the insurer made an Internal Review decision affirming the original minor injury decision stating:
“1. For the purposes of the Act, you have sustained a minor injury because of the motor vehicle accident on 19 July 2020. 2. Your entitlement to statutory benefits ceased from 19 January 2021.”
In a certificate dated 10 September 2021 Medical Assessor Brian Parsonage found that the Claimant had an Adjustment Disorder with Depressed Mood which is a minor injury for the purposes of the Act.
Documents considered
The documents I have considered are those listed in, referred to, or attached to, the application for merit review and the insurer’s reply together with all the attachments.
Submissions
The Claimant’s solicitors made written submissions for merits review dated 1 July 2021, (AD 5). Those written submissions included the following arguments:
(a) the insurer should have paid the Claimant’s lost wages from 27 October 2020, (the date of the Application for Personal Injury Benefits), until at least 19 January 2021 when her statutory benefits cease if the insurer’s minor injury decision is upheld;
(b) the insurer has incorrectly calculated the Claimant’s PAWE to be $289.43 when it should be $666.42;
(c) the Claimant submits that her PAWE ought to be calculated in accordance with sub-clauses 4(2)(a) and 4(4) of the MAI Act;
(d) the Claimant’s letter of offer of employment from Aruma show her rate of pay was $34.33 per hour, (A1);
(e) the Claimant commenced work as a support worker with Aruma on 11 May 2020. She was on probation for a six-month period due to finish on 11 November 2020. She was performing her work well and expected to successfully complete her probation and continue to work in that role. The Claimant did not have any work performance related issues that would have affected her ongoing employment with Aruma;
(f) the Claimant submits that she worked for Aruma for 10 weeks before the accident earing a total of $6,664.15 so her weekly PAWE should be calculated as $666.42;
(g) on 14 October 2020 the Claimant obtained part-time work with Subee Newlake as a community support worker earning $24.74 per hour, and
(h) in the period from 27 October 2020 to 19 January 2021 she suffered a loss earnings.
The Claimant’s solicitors made further written submissions for merits review dated 23 September 2021, (AD 6). Included in those submissions were the following points:
(a) if the Member assesses and determines the matter on the papers this will allow the quick, cost-effective, just, and early resolution of the subject dispute. This is in accordance with the objects of the Act under section 1.3, and
(b) the Claimant has invited the insurer to partake in informal discussions regarding settlement of the subject PAWE dispute. However, given that the insurer has failed to comply with the directions of the Personal Injury Commission (the Commission) on two occasions, the Claimant is doubtful that the insurer will be willing to participate in any formal discussions and also be willing to compromise their position to agree on settlement for the subject dispute.
In its submissions in Reply dated 11 February 2021, (R1), the insurer’s solicitors submit that:
(a) the insurer has compiled and calculated the economic loss data for the Claimant’s employment over 10 periods from 7 August 2019 to 22 July 2020. According to the insurer’s calculation there were three periods during this time were there was no data showing any employment for the Claimant;
(b) the insurer revised its determination of the claimant’s PAWE from $289.43 to $289.39 based on the periods of employment referred to above;
(c) the insurer’s submissions summarise the Claimant’s employment history for the 12 months preceding the accident as: from May 2019 to 22 January 2020 employed by Connecting Families as a casual youth support worker; from 20 January 2020 to 5 May 2020 studying full time; 11 May to 18 July 2020 employed by Aruma as a casual disability support worker;
(d) the insurer referred to the Claimant’s statement that her pay should be what she was earning weekly at the time of accident not yearly as she had a fractured leg then was studying. The Claimant claimed she should be paid what she was earning at time of accident from Aruma;
(e) the insurer says that the Claimant’s PAWE ought to be calculated in accordance with clause 4(1) of the Act. (That is, the average earnings in the 12-month pre-accident period);
(f) the insurer also argues that clause 4(2)(a) applies only when the clause 4(4) have been satisfied. In this case the insurer says that clause 4(2)(a) and 4 (4) don’t apply because Claimant was not engaged in full-time employment and she was employed on a casual basis those sub-clauses do not apply in the Claimant’s case;
(g) the insurer submits that clauses 4(2)(b) and 4(3) do not apply to the Claimant’s situation. It is clear from the note to clause 4(3) that clause 4(2)(b) only operates in circumstances where there is a change in the nature of a Claimant’s employment, rather than situations in which a Claimant obtains work with a different employer, and
(h) the insurer had examined all of the categories of earnings in clauses 4 (1) and 4(2) and concludes that as sub-clause 4(2) of the MAI Act does not apply then the Claimant’s PAWE must be calculated in accordance with clause 4(1).
In its supplementary PAWE submissions dated 24 September 2021, (AD 7), the insurer’s solicitors submit that:
(a) the insurer maintains its position that PAWE ought to be calculated in accordance with clause 4(1) of schedule 1 of the Act;
(b) the Claimant had argued that the Claimant’s PAWE should be calculated under sub-clauses 4(2)(a) and 4(4). The insurer submits that determinations of whether a person was earning continuously turns upon the likelihood that that person’s employment was likely to continue for a period of at least six months. In the Claimant’s case they argue that ongoing employment was unlikely given that she was employed on a casual basis and due to her arrest for an alleged assault shortly prior to the motor accident, and
(c) the insurer revised its determination of the claimant’s PAWE from $289.43 to $289.39 based on the periods of employment referred to above.
Reasons
This is a dispute between the Claimant and the insurer about the amount of weekly payments of statutory benefits payable to the Claimant during the second entitlement period under section 3.7 of the MAI Act.
The insurer had advised the Claimant that the insurer had decided that she had sustained minor injuries and that it declined liability for paying ongoing benefits after 19 January 2021.
The essence of the dispute between the Claimant and the insurer is what clause of the definition pre-accident weekly earnings should be applied to determine the Claimant’s weekly earnings.
The Claimant contends that because she engaged in an ongoing higher paying job, her PAWE should be calculated that higher rate.
The insurer contends that because the Claimant had worked in a number of jobs over the
12-month period before the accident, her pre-accident weekly earnings should be calculated by averaging her jobs over 12 months under sub-clause 4 (1).
Nature of merit review
This matter is a merit review of the decision of the insurer about amount of weekly payments of statutory benefits in accordance with section 7.13 of the MAI Act. This decision is a reviewable decision as it is listed in Schedule 2 sub-clause 1 (a) of the MAI Act. This review is not a review of the insurer’s processes in making the weekly statutory benefits and/or internal review decision. The review requires that I decide what the correct and preferable decision is having regard to the material then before me including any relevant factual material and any applicable law.
Legislation
As the accident happened on 19 July 2020 and the application for Personal Injury Benefits was made on 27 October 2020 the second entitlement period applies.
In this merit review, the relevant applicable legislation commences with section 3.7 of the MAI Act which deals with weekly payments during second entitlement period (weeks 14–78 after motor accident).
An earner who is injured in 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 during the second entitlement period, sub-section 3.7(1). Sub-section 3.7 (2) then deals with the calculation of the weekly payment of statutory benefits. Sub-section 3.7 (2) prescribes the rate of the weekly payment of statutory benefits as: 80% of the PAWE in the case of total loss of earning capacity and; 85% of the PAWE in the case of partial loss of earning capacity.
Many of the words used in section 3.7 are defined in Schedule 1 of the MAI Act. Schedule 1 defines: “earner”; “loss of earnings”; “pre-accident weekly earnings”; “pre-accident earning capacity” and “post-accident earning capacity”. The term “earning capacity” is not separately defined in Schedule 1.
“Pre-accident weekly earnings” is defined in clause 4 of Schedule 1 of the MAI Act as:
“4 Meaning of “pre-accident weekly earnings”—general
(1)Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means the weekly 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, unless subclause (2) applies.
(2)In the following cases, 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,
(a1)if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period—the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,
(b)if subclause (3) applies—the weekly average of the gross earnings received by the earner as an earner during the period from when the change of circumstance referred to in that subclause occurred to immediately before the day of the motor accident,
(c)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.
(2A)The pre-accident period, in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.
(3)This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred.
Note—
Examples of a change of circumstances to which this subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards.(4)For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.”
Pre-accident weekly earnings
I turn now to determine the Claimant’s PAWE by reviewing the submissions in the context of section 3.7 and sub-clauses 4(1) and 4 (2) of Schedule 1 of the MAI Act.
In its written submissions, (R1) the insurer has methodically examined and considered every possible way of determining the Claimant’s PAWE and concluded that none of the categories in sub-clause 4(2) of the MAI Act does apply. The insurer submits that the Claimant’s PAWE must be calculated in accordance with clause 4(1). The insurer’s reasoning is that because the Claimant had worked in a number of jobs over the 12-month period before the accident, her PAWE should be calculated by aggerating all the earnings from those jobs and then dividing the total figure by 52 weeks to give a value for weekly earnings.
In its written submissions the insurer argued that sub- clauses 4(2)(a) and 4 (4) don’t apply because Claimant was not engaged in full-time employment and she was employed on a casual basis.
The insurer also argued that sub-clauses 4(2)(b) and 4(3) do not apply to the Claimant’s situation because those clauses only operate in circumstances where there is a change in the nature of a Claimant’s employment, rather than situations in which a Claimant obtains work with a different employer.
On the other hand the Claimant submits that sub- clauses 4(2)(a) and 4 (4) do apply to in the Claimant’s case. They note that, although the Claimant was a casual worker on probation for a six-month period, she had every expectation of continuing in that role. She was performing her work well and expected to successfully complete her probation and continue to work in that role. The Claimant did not have any work performance related issues that could have affected her ongoing employment with Aruma.
In regard to sub-clauses 4(2)(a) and 4(4), the Claimant’s solicitors submitted that she had worked in a higher paid job for Aruma for 10 weeks before the accident earing a total of $6,664.15 so her weekly PAWE should be calculated as $666.42.
I accept the Claimant’s solicitors submissions that sub-clauses 4(2)(a) and 4(4) could apply in the Claimant’s case as she worked in a higher paid job for Aruma for 10 weeks before the accident. However it is difficult to find precisely when the Claimant started to earn continuously because of the broken period of employment, study and period of sickness she had during 2019/2020. I also note the insurer’s submissions that earning continuously was unlikely given that she was employed on a casual basis and due to her arrest for an alleged assault shortly prior to the motor accident.
I have considered all of the evidence, relevant legislation and definitions detailed above together with the definition and categories of how pre-accident weekly earnings are determined. Having considered all of those factors I am satisfied that the definition of PAWE clause 4 of Schedule 1 of the MAI Act that best fits with the Claimant’s employment circumstances before her accident is the category set out in sub- clauses 4(2)(b) and 4(3).
Sub- clauses 4(2)(b) applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than she was earning before the change occurred.
In my view the wording in sub-clause 4(2)(b) applies in the Claimant’s case because the evidence shows that immediately before the accident she had changed her earnings circumstances into a higher paying job. When the accident occurred she had been working as a support worker with Aruma earning between $700 to $800 per week. Prior to that she had been studying and prior to that she had worked in a lower paying job employed by Connecting Families as a casual youth support worker. There is some evidence available on to the Claimant’s likely future prospects in a continuing job at Aruma. She was employed on a causal contract basis and was earning regularly. The Claimant’s solicitors submit that she was performing her work well and expected to successfully complete her probation and continue to work in that role. Her contract of employment allowed for her to continue in the role subject to satisfactory completion of her six-month probation. There was no evidence before me that the Claimant did not have any work performance related issues that would have affected her ongoing employment with Aruma. Her solicitors submit that the alleged assault did not impact on her ability to continue in her job with Aruma. I note from Medical Assessor Parsonage assessment that the Claimant was convicted of assault and given a Good Behaviour Bond but a conviction was not recorded. If no conviction was recorded, I do not expect that this outcome would have affected her ongoing job prospects.
Based on the submissions and available evidence, I am satisfied that the Claimant’s employment with Aruma was likely to continue and she would have continued to have been paid at the higher rate of earnings in that job.
My conclusion that sub- clauses 4(2)(b) and 4(3) apply in the Claimant’s case is supported by the wording of the note in sub- clauses 4(3). The note is to the effect that an example of a change of circumstances to which this subclause would apply includes a change of job. This is precisely the case with the Claimant. She went from a lower paying casual job with Connecting Families to a higher paying causal job with Aruma.
Her entitlement to the payment of benefits for pre-accident weekly earnings should be calculated at the higher amount she was regularly earning with Aruma immediately before the accident.
Legal Costs
Legal costs are not available under sub-sections 8.10 (2) and (3) of the MAI Act for this merit review as it is not a regulated merit review matter under Schedule 1 Part 1 clause 1 of the Motor Accident Injuries Regulation 2017.
The Claimant’s solicitors submitted that legal costs should be awarded on “exceptional circumstances” basis under sub-section 8.10 (4) of the MAI Act, (AD 6).
The Claimant’s solicitors submit that she had to employ lawyers to protect her rights to ongoing statutory benefits under the MAI Act. Without legal representation her rights would have been significantly comprised given the complex legal issues involved including statutory interpretation of the calculation of PAWE and insurer’s calculation of total weekly benefits to be paid to the Claimant. The Claimant’s solicitors submit that the insurer’s non-compliance with the Member’s directions on two occasions has hindered the cost-effective, just and early resolution of the dispute.
The insurer submits that legal costs should not be awarded as exceptional circumstances do not exist in this case, (AD 7). The insurer argues that although interpretating the relevant PAWE calculation provisions is an arguably complex exercise, the legislature did not prescribe a fee for disputes pertaining to PAWE calculation.
The insurer further argues that it can be inferred from the absence of a maximum regulated fee for PAWE disputes that the majority of such disputes would attract no award of costs. The award of costs would only be reserved for the most complex of cases. The insurer argues that this dispute concerned which of the sub-clauses in clause 4 in Schedule 1 of the MAI Act applied. The majority of disputes before the Commission concerning PAWE surrounds this same issue and thus this particular dispute cannot be considered especially complex.
Following Wright J in AAI Ltd trading as GIO v Moon [2020] NSWSC 714 at [99 -103] and Campbell JA in San v Rumble (No. 2) [2007] NSWCA 259 at [67], I do not find that exceptional circumstances exist in this dispute that would justify the award of legal costs in this case. I agree with the insurer’s argument that any dispute about which of the sub-clauses in clause 4 in Schedule 1 of the Act applies can involve some degree of complexity and statutory interpretation. However in my view this present dispute does not involve any exceptional circumstances or unusual degree of complexity which would justify a finding that legal costs should be awarded.
Conclusion
The reviewable decision is set aside and in substitution a decision is made that the Claimant is entitled to weekly payments of statutory benefits during the second entitlement period in accordance with section 3.7 and sub-clauses 4(2)(b) and 4(3) of Schedule 1 of the MAI Act.
The rate of the payment is to be calculated on the Claimant’s PAWE she had as support worker with Aruma immediately before her accident.
The insurer is to calculate and pay the Claimant for her loss of earnings for the period from from 27 October 2020 to 19 January 2021.
The amount of legal costs awarded in this case is $NIL.
Ray Plibersek
General Member and Merit Reviewer
(Motor Accidents Division)
Personal Injury Commission
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