Caine v AAI Limited t/as GIO
[2022] NSWPICMR 23
•22 April 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Caine v AAI Limited t/as GIO [2022] NSWPICMR 23 |
| CLAIMANT: | Milton Caine |
| INSURER: | AAI Limited t/as GIO |
| MERIT REVIEWER: | Katherine Ruschen |
| DATE OF DECISION: | 22 April 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; meaning of pre-accident weekly earnings, schedule 1(4)(1) of the Motor Accident Injuries Act 2017; pre-accident weekly earnings (PAWE); whether PAWE can be adjusted by reason of the COVID-19 pandemic or other interruption to earnings in the pre-accident period; earnings as an earner; Held– the reviewable decision is set aside. |
| DETERMINATIONS MADE: | The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act), and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act. 1. The reviewable decision is: (a) set aside, and (b) the claimant’s PAWE amount is $460.90. |
Issued under section 7.13(4) of the Motor Accident Injuries Act2017
BACKGROUND
There is a dispute between Milton Caine (the claimant) and the insurer about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the MAI Act.
The claimant was involved in a motor accident on 1 July 2021.
The claimant made an application for personal injury benefits under the MAI Act.
On 19 January 2022 the insurer determined the claimant’s pre-accident weekly earnings (PAWE) in the sum of $459.66 for the purpose of calculating whether the claimant is entitled to weekly payment of statutory benefits under sections 3.6 and 3.7 of the MAI Act.
The claimant requested an internal review of the insurer’s PAWE decision of 19 January 2022.
On 10 February 2022 the insurer issued their internal review decision in which the insurer affirmed their previous decision that the amount of the claimant’s PAWE is $459.66.
The claimant has requested a merit review of the internal review decision dated 10 February 2022.
SUBMISSIONS
The claimant is a self-employed taxi driver and submits his PAWE in the pre-accident period should be adjusted by reason of the following:
(a) that his income was directly affected by COVID-19 restrictions, and
(b) that he had a 13 week break from work whilst interstate assisting his daughter.
The insurer relies on APR v Allianz (Merit Review) [2020] NSWSIRADRS 213 and submits there are no provisions under the MAI Act that permit an adjustment of PAWE to account for the likely impact of the COVID-19 pandemic, or other factors that are not directly related to the motor vehicle accident and the claimant’s income earning activities.
REASONS
Issues
The following issues arise for determination in this merit review:
(a) whether the claimant’s PAWE is to be adjusted to account for the impact of the COVID-19 pandemic on earnings in the pre-accident period and/or by reason of the 13 week period when the claimant was interstate;
(b) if such adjustment is permitted by the MAI Act, what is the claimant’s PAWE?, and
(c) if such adjustment is not permitted by the MAI Act, what is the claimant’s PAWE?
Can the claimant’s PAWE be adjusted by reason of the COVID-19 pandemic and/or because the claimant went interstate for 13 weeks?
The claimant does not make any submission as to how he says the MAI Act permits adjustment of his PAWE by reason of COVID-19 or his decision to go interstate for 13 weeks. The claimant simply contends that as a self-employed person he is disadvantaged in comparison to an employee earning a regular wage.
The insurer relies on the decision of APR v Allianz (Merit Review) [2020] NSWSIRADRS 213 in which Merit Reviewer Koya determined that “there are no provisions under the [MAI] Act, Regulations or Guidelines to permit adjustment of PAWE to account for likely impact of the pandemic, or other factors that are not directly related to the motor vehicle accident and the claimant’s income earning activities.” I agree with Merit Reviewer Koya and my reasons for this are set out in detail in my dissenting reasons in the merit review panel determination of Shahmiri v Allianz Australia Insurance Limited [2021] NSWPICMRP 2 (9 August 2021) (Shahmiri).
In Shahmiri I concluded that there is no basis upon which the MAI Act permits an adjustment under Schedule 1, clause 4(1) to calculation of an earner’s PAWE by reason of the COVID-19 pandemic or any other interruption to earnings such as illness, maternity leave or in this case, the claimant’s decision to go interstate to assist family. Whilst the majority in Shahmiri found an adjustment can be made, I disagree.
The review panel decision in Shahmiri was the subject of an appeal to the Supreme Court. Judgement was handed down by the Supreme Court in the appeal in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 on 22 April 2022 (the Shahmiri appeal). In the Shahmiri appeal decision Harrison AsJ overturned the majority review panel decision and agreed with my dissenting reasons. Harrison AsJ held that pursuant to Schedule 1, clause 4(1) PAWE is to be “calculated by taking … earnings over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 reflecting the number of weeks during the whole 12-month period” and that the MAI does not allow any adjustment to this by reason of the COVID-19 pandemic or other break or reduction in employment or earnings.
Accordingly, the claimant’s PAWE cannot be adjusted under clause 4(1) to account for interruption or reduction in the claimant’s earnings during the pre-accident period by reason of COVID-19, the claimant’s absence from employment whilst he was interstate assisting family or for any other reason.
What is the claimant’s PAWE?
Pursuant to Schedule 1, clause 4 “PAWE’ means:
(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.
The claimant is an “earner” on the basis he falls within the ambit of Schedule 1, clause 2(a) of the MAI Act as he was injured as a result of a motor accident, is over 15 years of age, was employed for at least 13 weeks of the 52 weeks of the year immediately preceding the accident and had not permanently retired at the date of the accident.
There is no evidence to suggest any of the exceptions to clause 4(1) set out in clause 4(2) apply to the claimant’s circumstances. Accordingly, the claimant’s PAWE falls under Schedule 1, clause 4(1) of the MAI Act.
Pursuant to Schedule 1, clause 4(1) the pre-accident period is 1 July 2020 to 30 June 2021 being the 12-month period immediately before the date of the accident.
Pursuant to the decision of Harrison AsJ in the Shahmiri appeal, the claimant’s earnings received in this period are to be averaged over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 reflecting the number of weeks during the whole 12-month period regardless of whether there was any break or reduction in earnings because of the pandemic or other reasons.
The claimant’s profit and loss statement for the pre-accident period from 1 July 2020 to 30 June 2021 records total income of $47,452 and expenses of $23,485, which produces a pre-tax net profit of the business of $23,967. As a self-employed earner the gross earnings the claimant receives as an individual earner for the purpose of the MAI Act are the net profit of his business (before tax). Accordingly, the claimant’s total gross earnings in the pre-accident period under clause 4(1) were $23,967. Applying the decision in the Shahmiri appeal the claimant’s PAWE is therefore $460.90, being gross earnings of $23,967 divided by 52 weeks.
The insurer has divided gross earnings by 52.14 weeks on the basis that the number of days in a year (365) divided by 7 days in a week equals 52.14 weeks. However, the calculation required by clause 4(1) is by reference to the “weekly” average, not the daily average. It is universally understood and accepted that a period of one year is 52 weeks, not 52.14 (or 52.28 in a leap year). Accordingly, I consider that the correct and preferrable decision is that the gross earnings are to be divided by 52 weeks, not 52.14.
Accordingly, I conclude that save for adopting a period of 52.14 weeks instead of 52 weeks the insurer has approached calculation of the claimant’s PAWE correctly and consistent with the Shahmiri appeal. However, the claimant’s PAWE is to be adjusted to $460.90 to reflect a pre-accident period of 52 weeks (not 52.14) pursuant to the above reasons.
CONCLUSION
The reviewable decision is:
(a) set aside, and
(b) the claimant’s PAWE amount is $460.90.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· The application, reply and supporting documentation.
· The MAI Act;
· Motor Accident Guidelines, and
· Motor Accident Injuries Regulation 2017.
Katherine Ruschen
Merit Reviewer
Personal Injury Commission
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