Cheung v Taiyun Oceania Travel Pty Ltd

[2022] NSWPIC 549

CERTIFICATE OF DETERMINATION OF MEMBER 

Citation:

Cheung v Taiyun Oceania Travel Pty Ltd [2022] NSWPIC 549

APPLICANT:

Terry Cheung

RESPONDENT:

Taiyun Oceania Travel Pty Ltd

Member:

John Wynyard

DATE OF DECISION:

5 October 2022

CATCHWORDS:

WORKERS COMPENSATION - Pre-Injury Average Weekly Earnings (PIAWE) dispute; applicant sole income earner for respondent company which applicant formed at request of supplier of delivery work; whether the figure appearing in respondent tax return for his work as ‘contractor’ the measure of his PIAWE; Held – sections 44C and 44E as preserved of the 1987 Act considered; DPP v Olsen, Cage Developments Pty Ltd v Schubert, Litigation Lending Management Pty Ltd v Powell and Winfield v Kelly’s and Young trucking co Pty Ltd considered; ordinary earnings were those earned by the applicant as shown in respondent’s tax returns as ‘receipts’; reference to ‘contractor’ an accounting exercise and not accurate reflection of applicant’s ‘reward for labour’; Cage Developments Pty Ltd v Schubert applied; but evidence of deductions in tax returns not explained and submission that deductions immaterial where worker supplied  all the respondent’s income rejected; cost of replacement worker to do delivery driving and administration of respondent applied.

determinations made:

1. Pursuant to ss 44C and 44E of the Workers Compensation Act 1987 (1987 Act) as preserved, the pre-injury average weekly earnings for the period is $1,000. I note that the Application to Resolve a Dispute claimed a continuing award, but that the entitlement period ceased on 26 May 2021. The parties have leave to approach in that regard if necessary, as I make awards only pursuant to ss 36 and 37.

2.     Accordingly, the respondent will pay to the applicant the sum of:

(a)    $950 per week from 26 November 2018 to 25 February 2019 pursuant to s 36 of the 1987 Act, and

(b)    $800 per week from 26 February 2019 to 26 May 2021 pursuant to s 37 of the 1987 Act.

3.     The respondent to have credit for payments made, if any.

4.     Leave granted to the parties to approach if necessary as outlined.

STATEMENT OF REASONS

BACKGROUND

1. Terry Cheung, the applicant, brings an Expedited Assessment Application against Taiyun Oceania Travel Pty Ltd, the respondent, to determine the amount of the pre-injury average weekly earnings (PIAWE), following the issue of a dispute notice on 22 August 2019.

2. Dispute notices were duly lodged.

3. The Application to Resolve a Dispute (ARD) and Reply were issued.

ISSUES FOR DETERMINATION

1. The parties agree that the following issue is in dispute:

   (a) the quantum of the PIAWE for 52 weeks pursuant to s 44C as preserved.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION (the Commission)

1. At the teleconference on 4 July 2022, I issued directions for written submissions as set out below. The applicant was represented by Mr Bruce McManamey of counsel instructed by Mr Hong Liu of Messrs HY Solicitors. The respondent was represented by Mr Nathan Buyers from Messrs Turks, lawyers.

2. I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

1. The following documents were in evidence before the Commission and considered in making this determination:

   (a)    ARD and attached documents, and

   (b)    Reply and attached documents.

Oral evidence

1. No application was made with regard to oral evidence.

FINDINGS AND REASONS

1. On 4 July 2022 I issued directions for written submissions, which were duly received.

2. Mr Cheung was born in 1965. He migrated to Australia in July 1988, having obtained an accounting degree in China.[1] He worked as a taxi driver until he returned to China in 2000 to work as an office administrator. He returned in 2012 and looked after his daughter for two years before obtaining work for a labour hire company. He injured himself and was off work receiving weekly payments until July 2017. He then was in receipt of Centrelink support, where he found a position advertised online.

   [1] Statement dated 10 June 2022: ARD p 2.

3. The position was advertised on behalf of Easy Connect Courier, and on enquiry Mr Cheung was advised that he would be provided with delivery jobs if he would register a company and provided his own van. Mr Cheung registered the respondent company, Taiyun Oceania Pty Ltd on or about 6 October 2017 and purchased a van. He did not have any employees.

4. Mr Cheung did some work for Easy Connect Courier for four weeks and was then told to wait for further work. He was referred by a friend to a company called NSW Liquor Logistics (NSW Liquor), who offered Mr Cheung delivery work at $300 plus GST per day. Mr Cheung accepted and was working between three and five days per week. The work involved principally delivering alcohol, but there were other deliveries he had to make, and on 26 November 2018, as Mr Chong was lifting a boat part with a co-worker, he suffered injury to his back.

5. Liability was accepted for weekly payments, and Mr Cheung eventually found work with another employer on or about 1 February 2022, working about 20 hours per week as a school bus driver transporting children with disabilities.

6. On 22 August 2019 the respondent through its insurer notified Mr Cheung that his weekly payments would be reduced to $639.62 from 4 December 2019. In fact it would appear that the weekly payments were reduced to $511.70 after the s 37 calculation was done. The insurer calculated that Mr Cheung had earned $33,260 in the 52 weeks prior to his injury, a sum of $639.62 per week.

7. A review was requested and on 4 March 2021 a further dispute notice issued.[2] The insurer said:

   “On 18/2/21 you requested a review of the calculation of your PIAWE and weekly payments. You provided a further PIAWE Form indicating gross weekly earnings as $1,750.00.

   In accordance with the icare PIAWE Handbook, use of an individual tax return is appropriate for determining PIAWE for a working director. Your individual tax return for the year ended 30/6/18 shows a taxable income of $33,260.00. This equates to a weekly gross amount of $639.62. Any business earnings (and expenses) are excluded from the PIAWE calculation.

   We are of the view the recalculation of your PIAVVE to $639.62 is correct.”

   [2] ARD p 9.

8. The net payment was now said to be $525.60 on account of indexation.

9. The applicant lodged a schedule of the income he had received over the past 52 weeks, based on the total income that NSW Liquor had paid to Mr Cheung’s business, the respondent. This was compiled from the respondent’s bank statements, and were based on the invoices presented to NSW Liquor by the respondent. The statements were also in evidence, and it has not been suggested that the schedule is inaccurate, or that the bank statements on which the schedule is based is incomplete.[3]

   [3] The schedule appears from ARD p 14; The bank statements appear from ARD p 16.

Commonwealth Bank Credit from NSW Liquor for 52 weeks prior to the accident
Account NO.:06 2006 12863057
Account Name: Taiyun Oceania Travel Pty Ltd
Address: Unit 1312/ 149 Cope St, Waterloo NSW 2017
Date	Transaction From	Amount
08/12/2017 (working 24/11/2017-01/12/2017 from the notebook)	NSW Liquor Logis inv 001	$1980.00
15/12/2017	NSW Liquor Logis inv 002	$1650.00
22/12/2017	NSW Liquor Logis inv 003	$1650.00
29/12/2017	NSW Liquor Logis inv 004	$1650.00
05/01/2018	NSW Liquor Logis inv 005	$330.00
12/01/2018	NSW Liquor Logis inv 006	$1320.00
19/01/2018	NSW Liquor Logis inv 007	$1650.00
25/01/2018	NSW Liquor Logis inv 008	$1320.00
01/02/2018	NSW Liquor Logis inv 009	$990.00
07/02/2018	NSW Liquor Logis inv 010	$1320.00
16/02/2018	NSW Liquor Logis inv 011	$1320.00
23/02/2018	NSW Liquor Logis inv 012	$1320.00
02/03/2018	NSW Liquor Logis inv 013	$1320.00
09/03/2018	NSW Liquor Logis inv 014	$1320.00
16/03/2018	NSW Liquor Logis inv 015	$1320.00
23/03/2018	NSW Liquor Logis inv 016	$1320.00
29/03/2018	NSW Liquor Logis inv 017	$1540.00
06/04/2018	NSW Liquor Logis inv 018	$990.00
13/04/2018	NSW Liquor Logis inv 019	$990.00
17/04/2018	NSW Liquor Logis reimburse for van	$800.00
20/04/2018	NSW Liquor Logis we 130418 (inv 020 from the notebook)	$1320.00
27/04/2018	NSW Liquor Logis inv 021	$1320.00
04/05/2018	NSW Liquor Logis inv 022	$990.00
11/05/2018	NSW Liquor Logis inv 023	$1320.00
18/05/2018	NSW Liquor Logis inv 024	$1320.00
25/05/2018	NSW Liquor Logis inv 025	$1320.00
01/06/2018	NSW Liquor Logis inv 026	$1320.00
08/06/2018	NSW Liquor Logis inv 027	$990.00
15/06/2018	NSW Liquor Logis inv 028	$1320.00
22/06/2018	NSW Liquor Logis inv 029	$990.00
28/06/2018	NSW Liquor Logis inv 030	$1320.00
06/07/2018	NSW Liquor Logis inv 031	$1320.00
13/07/2018	NSW Liquor Logis inv 032	$1320.00
20/07/2018	NSW Liquor Logis inv 033	$1320.00
27/07/2018	NSW Liquor Logis inv 034	$990.00
03/08/2018	NSW Liquor Logis inv 035	$1210.00
10/08/2018	NSW Liquor Logis inv 036	$1320.00
17/08/2018	NSW Liquor Logis inv 037	$1540.00
24/08/2018	NSW Liquor Logis inv 038	$1540.00
31/08/2018	NSW Liquor Logis inv 039	$1540.00
07/09/2018	NSW Liquor Logis inv 040	$1540.00

14/09/2018	NSW Liquor Logis inv 041	$1540.00
21/09/2018	NSW Liquor Logis inv 042	$770.00
28/09/2018	NSW Liquor Logis inv 043	$1540.00
05/10/2018	NSW Liquor Logis inv 044	$1320.00
12/10/2018	NSW Liquor Logis inv 045	$1283.72
19/10/2018	NSW Liquor Logis inv 046	$1540.00
26/10/2018	NSW Liquor Logis inv 047	$1540.00
02/11/2018	NSW Liquor Logis inv 048	$1540.00
09/11/2018	NSW Liquor Logis inv 049	$1540.00
16/11/2018	NSW Liquor Logis inv 050	$1540.00
23/11/2018	NSW Liquor Logis inv 051	$734.89
30/11/2018 (working to 23/11/2018)	NSW Liquor Logis inv 052	$1595.00
Total: $69,753.61
NOTE: Working period 24/11/2017-23/11/2018, totalling 52 weeks received by Taiyun Oceania Pty Ltd’s account from 08/12/2017-30/11/2018

1. The respondent’s tax returns were lodged with Mr Cheung’s personal tax returns for the 2018 and 2019 tax years. Also lodged were about 50 pages of Mr Cheung’s invoice books which demonstrated that he invoiced NSW Liquor for $300 per week. Each book was headed with the respondent’s ACN number and the handwritten words “NSW Liquor Logistics.”[4]

   [4] The tax returns appear from ARD p 124. The invoice books appear from ARD p 72.

2. The tax returns showed that the applicant’s individual tax return for the year ended 30/6/18 showed a taxable income of $33,260.

3. The tax return for the 2018 year for the respondent showed receipts of $38,994.36. Of that sum, an amount of $38,863.84 was shown for expenditure. Of that $23,000 was in respect of “Contractor” expenditure, which it was agreed was the total of Mr Cheung’s invoices rendered during that year.

SUBMISSIONS

Applicant

1. For the applicant, Mr McManamey submitted that the receipts by the respondent immediately preceding the injury showed an income of $69,753.61, less the GST paid of $6,341.21, which was not claimed as part of the PIAWE.

2. Mr McManamey submitted that s 44C as preserved contained the statutory power in relation to the disputed calculation.

3. I was referred to Office of the DPP v Olsen[5], Cage Developments Pty Ltd v Schubert[6] and Litigation Lending Management Pty Ltd v Powell[7]. Mr McManamey argued that the “ultimate question” for determination was:

   “What is the value of the applicant’s work to the respondent’s business?”

   [5] [2009] NSWWCCPD 26.

   [6] (1983) 151 CLR 584.

   [7] [2010] NSWWCCPD 70.

4. Mr McManamey submitted that such value should be determined by the income the respondent received during the preceding 52 weeks, less the GST component. The deductions claimed, although not properly identified, were mostly for the expenses that the respondent would have incurred in any event, Mr McManamey said. The value of the supply of Mr Cheung’s labour was not diminished by the fact that the respondent had expenses it had to attend to, in respect of which it used Mr Cheung’s income to defray.

5. The resultant calculation would therefore indicate a PIAWE of $1,219.47.

6. The alternative method would be to calculate the cost of a replacement driver to supply the labour, Mr McManamey said. He referred to a number of factual issues that might thereby arise. In all the circumstances Mr McManamey argued, the proposed PIAWE was the appropriate figure.

7. The reliance by the respondent on the amount of $23,000 as being the appropriate figure did not support a fair reflection of the PIAWE, it was contended. The calculation was no more than an accounting exercise, Mr McManamey claimed.

Respondent

1. I was referred to ss 44C to 44I of the Workers Compensation Act 1987 (the 1987 Act) and the definitions contained therein. The PIAWE accordingly could not be calculated on the basis of the ordinary hours worked, as there was no evidence to that effect. Accordingly the calculation had to be made on the basis of the actual earnings paid or payable to the worker respect of that week, it was argued.

2. The respondent referred to Winfield v Kelly’s and Young trucking co Pty Ltd[8] in support of its submission that the appropriate PIAWE calculation would be to take the applicant’s net earnings, after the deduction of expenses. The respondent noted that Member Wright in Winfield was dealing with the same statutory regime.

   [8] [2021] NSWPIC 192.

3. The respondent submitted that no evidence regarding the business expenses claimed by the respondent had been lodged. The business invoices may have contained indicators as to the extent to which they were payable for services of the applicant as opposed to other expenses, it was claimed. The calculation proposed by the applicant accordingly could not be supported.

4. The appropriate amount was that calculated by the insurer, the respondent submitted. It had based its calculation on the individual tax return for the 2018 financial year. Having extrapolated the percentage of income to expenses as shown in the respondent’s 2018 financial year (59%), the respondent advised that it had applied that percentage to the gross receipts less GST received by the respondent over the 52 weeks prior to the injury – that is to say, 59% of $63,412.37 - which gave the total of $719.49 (80% being $575.59).

5. The respondent submitted that it was appropriate to presume that the proportion of overall receipts paid to the applicant’s wages would remain consistent into the 2019 financial year, due to the stability of the company operation.

6. Alternatively, the respondent submitted the applicant’s submissions could not displace the insurer’s calculation in the absence of any supporting evidence establishing the basis of Mr Cheung’s submissions.

Respondent’s further submissions

1. The respondent lodged a further set of submissions regarding the application. I granted leave to do so nunc pro tunc.

2. With regard to s 44E, the applicant’s contention that he had been paid a base rate of pay on a calculation of the ordinary hours worked could not apply, as the evidence indicated that he was to be paid a flat daily rate. The definition of “ordinary earnings” accordingly fell into a calculation of the actual earnings paid in respect of his weekly income.

3. The applicant’s reliance on Litigation Lending overlooked that the relevant legislation then was different to that which applies in the present case, it was submitted. The definition of the phrase “ordinary earnings” in s 44E stood “in stark contrast” to the provisions of s 40(2) of the 1987 Act which was applied in Litigation Lending, and accordingly the authority was distinguishable.

4. Further, the reliance by the applicant on the concept of a “reward for labour” had also been “appropriately referenced” by Member Wright in Winfield, the respondent submitted.

5. With regard to the alternative method of calculating the cost of a replacement driver, the respondent also referred to the factual difficulties such a method would cause. The respondent submitted that it would not be appropriate to estimate the cost of a replacement driver on a full-time basis when the applicant had indicated that he was working about four days per week and it was not clear whether he was working a full day on those four days. There was no evidence as to the amount of administrative duties the applicant performed and no formal invoices had been produced.

DISCUSSION

1. It is common ground that the relevant legislation is preserved by the transitional provisions contained in cl 7 of Part 19L of Schedule 6 of the 1987 Act.

1. Section 44C of the 1987 Act as preserved provided relevantly:

   “44C Definition—pre-injury average weekly earnings

   (1)     In this Division, pre-injury average weekly earnings, in respect of a relevant period in relation to a worker, means the sum of:

   (a)the average of the worker’s ordinary earnings during the relevant period (excluding any week during which the worker did not actually work and was not on paid leave) expressed as a weekly sum, and

   …..”

2. Section 44E provided:

   “44E Definitions applying to pre-injury average weekly earnings—ordinary earnings

   (1)     Subject to this section, in relation to pre-injury average weekly earnings, the ordinary earnings of a worker in relation to a week during the relevant period are:

   (a) if the worker’s base rate of pay is calculated on the basis of ordinary hours worked, the sum of the following amounts:

   (i) the worker’s earnings calculated at that rate for ordinary hours in that week during which the worker worked or was on paid leave,

   (ii) amounts paid or payable as piece rates or commissions in respect of that week,

   (iii) the monetary value of non-pecuniary benefits provided in respect of that week, or

   (b) in any other case, the sum of the following amounts:

   (i)the actual earnings paid or payable to the worker in respect of that week,

   (ii) amounts paid or payable as piece rates or commissions in respect of that week,

   (iii) the monetary value of non-pecuniary benefits provided in respect of that week.

   ...”

3. In Olsen, DP Roche considered a situation in which the dispute arose with regard to a solicitor’s entitlement. From [31] he said:

   “31    …..the authorities of Nelson and Schubert make it clear that more than one approach is open to the calculation of post injury earnings under section 40(2)(b) of the 1987 Act when a worker is engaged in his or her own business ….

   32.   The first method requires a determination of the net remuneration being received by the worker for his or her labour. This is done by examining the business accounts and making all proper allowances for overhead expenses, costs of materials and other labour, maintenance and depreciation of plant, return on capital invested and the like (Glass JA (Reynolds JA agreeing) at 230G in Schubert in the Court of Appeal, citing Gibbs J at 652 and Windeyer J at 643 in Nelson).
   The second method requires a calculation of the worth of the worker’s labour to the business, but without reference to the business accounts. This second method has three possible approaches. First, a determination may be made of the cost to the business of employing someone to do the reduced work the worker is performing (Glass JA (Reynolds JA agreeing) in Schubert at 231A). In the alternative, it may be determined by reducing from the cost of employing someone whose work capacity is unimpaired the cost of supplementing the reduced efforts of the applicant so as to produce for the business the services of one fully capable worker (Glass JA in Schubert at 231, citing Barwick CJ in Nelson at 631-632). The third method is to ‘determine what his work would have been worth in wages if he had been employed by another to do the work’ (per Barwick CJ in Nelson at 631).

   33.   The High Court endorsed these approaches when it unanimously dismissed the employer’s appeal in Schubert, and added (at 587) that:

   ‘As Glass and Mahony JJA pointed out in the Court of Appeal, there is no single way in which actual or potential earnings of such a former worker must be determined. The circumstances of the particular case will indicate what way or ways are open and what evidence is relevant for that purpose and it is undesirable to confine the Commission within the strict limits of artificial rules laid down in advance by an appellate court. …. Where, for example, a business consists essentially of the provision of personal services by the former worker (e.g. a business of a sole plumber or casual gardener) and no significant investment of capital is involved, the actual net earnings of the business might properly be seen as representing the actual ‘reward for (the) labour’ of the former worker (see J. & H. Timbers Pty. Ltd. v. Nelson (1972) 126 CLR, at p 652) during a period of partial incapacity. In such a case, if the former worker is carrying on business solely on his own account, the net earnings of the business might properly be seen as representing the ‘amount he is earning’ in a business; if he is carrying on business in partnership or as an employee of a family company, the net earnings might properly be seen as representing the ‘amount he ... is able to earn’ either in employment or in a business. (at p 588)’.”

1. Curiously, DP Roche did not address in terms the plurality’s example of where a business consists essentially of the provision of personal services. The learned Deputy President analysed the facts and stated that the wrong test (attributing a weekly amount to the value of the applicant’s labour) had been applied in those particular circumstances. He said at [43]:

   “…..It is clear from the above discussion that further evidence will need to be tendered in order to properly apply either of the methods suggested in Schubert. That evidence will include an analysis of the financial records (if method one is adopted) or evidence of the value of Mr Olsen’s labour (if the second method is adopted).” 

2. DP Roche considered that an analysis of the respondent’s records should have been undertaken, as there were deductions (such as that for Ms Olsen’s wife) that, along with other aspects of the financial records, needed to be properly explained.

3. In Winfield Member Wright was concerned with a situation where the applicant was earning around $1,874.52 from his horticulture business, in which he worked for about 15-20 hours per week. The applicant was injured whilst doing a second job working as a truck driver in which he worked 35-45 hours per week, earning $1,467.54 per week. The injury prevented him from participating in his horticulture business.

4. The insurer applied s 44E in calculating the PIAWE, in particular Schedule 3, which deals with concurrent earnings, and has no application to the current circumstances. The issue before Member Wright was whether the earnings from the horticulture business should have been included in the insurer’s calculation.

5. I agree with the respondent’s submission that Member Wright had appropriately referenced the concept of “reward for labour” in his reference to Schubert. However his finding was in a different factual context to the present, and the calculation by reward for labour method remains that described by the Plurarity in Schubert.

6. The facts in Schubert concerned the insurer’s objection to the manner in which Judge Westcott of the then Workers’ Compensation Commission calculated the weekly amount the worker would probably have been earning but for his injury in comparable employment. The Plurality stated at [2] the import of the relevant legislation at that time:

   “2.     Section 11(1)(a) of the Act provides that, in a case of partial incapacity, the weekly payment of compensation shall in no case exceed the difference between ‘the weekly amount which the worker would probably have been earning as a worker but for the injury and had he continued to be employed in the same or some comparable employment’ and ‘the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury’". 

7. The object of each statutory provision is concerned with the same issue – the method of calculating the value of pre-injury earnings. It is now described in Schedule 3 of the current 1987 Act, and was described by s 44E in the repealed Act as the “ordinary earnings” in the PIAWE. In s 11(1)(a) of the 1926 Act, as stated by the plurality, the issue was described as “the weekly amount which the worker would probably have been earning” as described. (These were known colloquially as “probables”).

8. The respondent submitted that the provisions of s 40(2)(b), which was the section of the 1987 Act under consideration in Litigation Lending (and Schubert) stood in “stark contrast” to s 44E, the provisions applicable in Winfield.

9. Section 40(2)(b) of the 1987 Act provided that a worker’s entitlement was to be calculated by:

   “…the average weekly amount which the worker is earning, or would be able to earn in some suitable employment, from time to time after the injury.”

10. Section 44E of the 1987 Act is also concerned with the definition of an applicant’s entitlement, as can be seen. The relevant definition of ordinary earnings in Mr Cheung’s case is that defined in s 44E(1)(b). The provisions of ss (1)(a) are inapplicable, Mr Cheung not having calculated his base rate of pay on the ordinary hours worked.

11. I do not view the contrast between the definitions as being of any moment. Section 11(1)(a) of the 1926 Act, s 40(2)(b), ss 44C and 44E, and Schedule 3 of the 1987 Act in force at their various times, were all concerned with defining weekly entitlement, and the actual earnings paid to a worker at the relevant time has long been the hallmark of such a definition.

12. Mr Cheung based his invoices on a flat daily rate, as was shown by his notebooks, and the definition contained in s 44E(1)(b) thus becomes applicable. Mr Cheung’s ordinary earning are therefore defined relevantly as “the actual earnings paid or payable to the worker in respect of that week.” The additional matters in s 44E(1)(b)(ii) and (iii) have no application on the evidence.

13. Accordingly, the dicta in Schubert reproduced by DP Roche in Olsen, remains good law. In Olsen, Litigation Lending and Winfield, the method of calculation by subtracting from the worker’s income the expenses incurred by the worker’s company was considered, but rejected for different reasons.

14. In Olsen DP Roche discussed the method proposed by the applicant in the present case, but found that the company financial records needed to be explained, as they contained deductions which suggested the receipt of income from other sources, and an analysis of the company financial records had not been undertaken.

15. In Litigation Lending, DP O’Grady considered a situation in which the injured worker had been earning two incomes. In revoking the Arbitrator’s decision, the learned Deputy President noted the method of calculating the net earnings by examining the business accounts and making all proper allowances for overhead expenses, costs of materials and other labour, maintenance and depreciation of plant, return on capital invested and the like, but adopted the method of assigning a hypothetical hourly value to the claimant’s work.

16. The issue thus is whether it is possible to apply the dicta of the Plurality in Schubert to these provisions, as advanced by Mr McManamey. The Plurality in fact described a similar factual situation to Mr Cheung’s case in the passage referred to by DP Roche in Olsen, cited above at [46]. The circumstances of this particular case is of a business, Taiyun Oceania Travel Pty Ltd, essentially consisting of the provision of personal services by the former worker (Mr Cheung). He was not a sole plumber or casual gardener, but a sole delivery driver, and it was his personal services that provided the income for the respondent. There was no significant investment of capital, and the actual net earnings of the business can properly be seen as representing the actual “reward for labour” discussed in Schubert. Mr Cheung was carrying on business solely on his own account and the net earnings of the business can properly be seen as representing the amount he was earning, or, to adapt the provisions of s 44C, his “ordinary earnings during the relevant period”.

17. The Plurality however spoke of “net earnings” in the passage I have just paraphrased, and the respondent submitted that this figure was not before the Commission. The respondent submitted that the chart reproduced above did not contain the invoices between NSW Liquor and the respondent, and there may have been “indicators as to the extent to which the invoices were payable for services of the applicant as opposed to other expenses.” I had some difficulty in comprehending that submission, with respect. The evidence shows that all the income received in the 2018 tax return was from Mr Cheung’s services. The expenditure showed, to use Mr McManamey’s phrase, “where the respondent spends the money.” As I understood him, the items listed under “expenditure” were not to be deducted from the total receipts earned by the applicant, as that income could properly be seen as the actual reward for Mr Cheung’s labour and there was no suggestion that the respondent obtained any other form of income.

18. Whilst conceding that the deductions claimed in the respondent’s tax return were not properly identified, Mr McManamey argued that it could be seen nonetheless that the deductions would have been incurred in any event by the respondent, and the income to pay them came from the applicant’s earnings.

19. There is some merit in that approach, with respect. Mr Cheung had only incorporated the respondent because his first employer, Easy Connect Courier, then his sole source of income, asked him to do so. The operational nature of Mr Cheung’s relationship with first Easy Connect Courier and (after a few weeks) NSW Liquor, which then became Mr Cheung’s sole source of income, did not change after incorporation.

20. The depiction of Mr Cheung’s earnings as “contractor” did not satisfy the provisions of s 44C which required the ordinary earnings of the applicant to be averaged to a weekly sum during the 52 weeks, thus establishing the relevant PIAWE. In applying the “reward for labour” test as discussed above, the ordinary earnings constituted the entire income of the respondent.

21. However, I do not read Schubert quite as beneficially as Mr McManamey urges. Whilst the Plurality recognised that a situation such as the applicant’s might arise, it nonetheless spoke of “net earnings.” Without an analysis of the expenditure items, it is impossible to gauge whether the company has received a benefit as well. I note that in the 2018 return, items of depreciation and maintenance of plant and equipment are claimed, as is the maintenance of the motor vehicle and borrowing costs, amongst other things. In the 2019 tax return there is an expense claimed entitled “EML Claim” of $32,257.53, which one assumes is an extraneous expense, and in respect of which no explanation has been given.

22. As was the case in Olsen, Litigation Lending and Winfield, this method of calculation cannot be deployed due to the evidentiary shortcomings concerning the definition of Mr Cheung’s net earnings. The fairest way to make this calculation is to assess the cost of hiring a driver to do the applicant’s work in the business. Mr McManamey submitted that the hourly rate for delivery drivers was $20.33 increasing to $21.38 per hour during the relevant time, the current rate being $25.48, but that value should also be given for the extraneous duties a replacement would have to do by way of administration.

23. The calculation by the insurer of $300 per week as the basis for the equation applied to find a PIAWE of $719.49 I reject. The assumption that the ordinary earnings were $300 per week I have rejected above, and I agree appears to be somewhat artificial, and an accounting convenience. The submission that precise evidence as to the administrative duties actually performed by the applicant had not been given, I also reject. The circumstances under which Mr Cheung came to his working situation I have outlined above, and although not detailed, an allowance should be made for the administrative duties that he would have had to perform.

24. I find, doing the best I can with the evidence, that a figure of $25 per hour should be the measure of Mr Cheung’s ordinary weekly earnings, which is made up of $22 for delivery driving and $3 with regard to his administrative duties.

Decision

1. I find that the average of the applicant’s ordinary earnings during the relevant period was $63,412.40, or $1,219.47 per week. The relevant period was from 26 November 2017 to the date of injury, 26 November 2018, but I am not satisfied that the amount of $1,219.47 is applicable pursuant to s 44C as preserved. For the reasons given above the PIAWE for the period is $1,000. I note that the ARD claimed a continuing award, but that the entitlement period ceased on 26 May 2021. The parties have leave to approach in that regard, as I make awards only pursuant to ss 36 and 37.

2. Accordingly, the respondent will pay to the applicant the sum of:

   (a)    $950 per week from 26 November 2018 to 25 February 2019 pursuant to s 36 of the 1987 Act;

   (b)    $800 per week from 26 February 2019 to 26 May 2021 pursuant to s 37 of the 1987 Act;

   (c)    the respondent to have credit for payments made, if any, and

   (d)    leave granted to the parties to approach as outlined.