Cui v Allianz Australia Insurance Limited
[2023] NSWPICMR 5
•27 January 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Cui v Allianz Australia Insurance Limited [2023] NSWPICMR 5 |
| ClaimanT: | Jingjing Cui |
| Insurer: | Allianz Australia Insurance Limited |
| Merit Reviewer: | Maurice Castagnet |
| DATE OF DECISION: | 27 January 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; dispute about the amount of weekly payments of statutory benefits under Division 3.3; whether the determination of pre-accident weekly earnings (PAWE) should be made under Schedule 1 clause 4(1) or clauses 4(2) and 4(3); where the claimant received gross earnings as a self-employed cleaner; whether there was a significant change in the claimant’s earnings circumstances within the meaning of Schedule 1 clause 4(3); whether exceptional circumstances exist to warrant the Personal Injury Commission permitting the claimant’s costs under sub-s 8.10(4)(b); Held – the reviewable decision is varied with no order made for the payment of the claimant’s legal costs. |
| Determinations made: | CERTIFICATE OF DETERMINATION Issued under s 7.13(4) of the Motor Accident Injuries Act 2017 (the MAI Act) The reviewable decision concerns the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the MAI Act, and is therefore a merit review matter under Sch 2 cl (1)(a) of the MAI Act. 1. The reviewable decision is varied. 2. The claimant’s pre-accident weekly earnings (PAWE) are determined to be $445.80. 3. The insurer is to apply PAWE of $445.80 when determining the claimant’s entitlements under Division 3.3 of the MAI Act. 4. The effective date of this decision is 5 April 2022. 5. No allowance is made for the claimant’s legal costs. |
STATEMENT OF REASONS
INTRODUCTION
There is a dispute between the claimant, Jingjing Cui and the insurer concerning the amount of weekly payments of statutory benefits that is payable to the claimant under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
BACKGROUND
The claimant is a 34-year-old woman who was injured in a motor accident on 5 April 2022.
At the time of the accident, the claimant was working as a cleaner.
On 21 April 2022, the claimant made a claim to the insurer for statutory benefits. The claim included an application for weekly payments for loss of earnings.
In her claim form, the claimant indicated that she would later advise the insurer of her employment details, including the amount of her gross earnings at the time of the accident.
On 12 May 2022, the insurer notified the claimant that it accepted liability to make weekly payments for the first 26 weeks. The insurer also notified the claimant that such payments would be made in the interim amount of $550.38 per week for at least 13 weeks, pending the receipt of further information from the claimant to calculate her pre-accident weekly earnings (PAWE).
The actual amount of the claimant’s weekly payments is based on her PAWE, subject to the usual reductions imposed by Division 3.3 of the MAI Act.
On 17 May 2022, the claimant provided the insurer with further information about her employment and earnings. The claimant informed the insurer that she started work with J.Q. Hong Pty Ltd in March 2021 and that from “early January 2022” to the date of the accident, she was earning $1,000 “net per week”. The claimant provided the insurer with her individual tax return 2021, notice of assessment for the year ended 30 June 2021 and a letter from J. Q. Hong Pty Ltd, which was undated.
On 6 June 2022, the insurer notified the claimant that it had calculated her PAWE in the amount of $201.92.
The claimant disagreed with the insurer’s decision. On 24 June 2022, she sought an internal review of the decision.
On 7 July 2022, the insurer issued a review decision, affirming its original decision.
It appears that the claimant subsequently provided the insurer with a copy of her individual tax return 2022. On 19 October 2022 the insurer notified the claimant that it had revised the calculation of the claimant’s PAWE to $429.99.
The claimant also disagreed with the insurer’s revised review decision. On 1 December 2022, the claimant made an application to the Personal Injury Commission (the Commission) seeking a merit review of that decision.
The application was accepted by the Commission. The insurer lodged a reply with the Commission on 20 December 2022.
The application is now before me for determination.
DOCUMENTS CONSIDERED
In making my decision, I considered the documents and submissions provided to the Commission by the claimant in her application and by the insurer in its reply. I also considered additional documents provided by the insurer to the Commission at my request.
LEGISLATION
In making my decision, I considered the following:
· the MAI Act;
· Motor Accident Guidelines 2017 (Version 8.2) (the Guidelines), and
· Motor Accident Injuries Regulation 2017 (the regulations).
THE DISPUTE
It is common ground between the parties that the claimant is an earner within the meaning of Sch1 cl 2(a) of the MAI Act and therefore entitled to weekly payments of statutory benefits under Division 3.3 of the MAI Act.
The insurer has applied the provision of Sch1 cl 4(1) of the MAI Act to calculate claimant’s PAWE. The claimant says that the insurer was incorrect in doing so and her PAWE should have been calculated by applying the provisions of Sch 1 cl 4 (2) and cl 4(3).
THE CLAIMANT’S POSITION
The claimant’s submissions may be summarised as follows:
(a) In the circumstances of this case, the Commission should consider and apply Sch1, cl 2 and cl 3 of the MAI Act in determining her PAWE.
(b) The claimant says she started to work with J.Q. Hong Pty Ltd as a subcontracted casual cleaner in March 2021 and earned approximately $750 net per week until the end of the financial year on 30 June 2021.
(c) Due to COVID-19 lockdown restrictions, the claimant did not work from 1 July 2021 until 17 October 2021. The claimant then started to work again on or about 18 October 2021.
(d) From 18 October to 31 December 2021, the claimant says she was earning approximately $500 net per week due to lack of work.
(e) The claimant says that in late December 2021, J.Q. Hong Pty Ltd offered her 40 hours per week for a remuneration of $1,000 net per week.
(f) The claimant says that from early January 2022 until the date of the accident, she was earning $1,000 net per week.
(g) The claimant's individual tax return 2021 shows that her gross taxable income was $10,720. The claimant's individual tax return 2022 shows that her gross taxable income was $20,700. The claimant submits that the gross earnings from those tax returns only establish that she was an earner but those earnings should not be applied to calculate her PAWE.
(h) The claimant submits that the letter provided by her employer, J.Q. Hong Pty Ltd, confirms that in early January 2022, there has been a significant change in her earnings circumstances resulting in her being entitled to earn more on a weekly basis.
(i) The claimant submits the correct calculation of PAWE should therefore be “$1,000.00 net per week”.
THE INSURER’S POSITION
The insurer’s submissions may be summarised as follows:
(a) The letter provided by J. Q. Hong Pty Ltd[1] indicates that, from early January 2022, the claimant started to work 40 hours per week and was earning $1,000 net per week. The insurer submits that this information is not corroborated by the claimant’s bank statements which do not reflect regular wage deposits or any increase in her regular earnings. The claimant has not provided any payslips to show any regular weekly earnings or increase in wages during the assessable period.
(b) The insurer submits that in the absence of any corroborating evidence from the bank statements, the only accurate and reliable evidence of the claimant’s earnings is contained in her individual tax returns for 2021 and 2022.
(c) The insurer submits that Sch1 cl(4)2 is not applicable in the circumstances of this case. The claimant’s bank statements show that during the period that the claimant was affected by the Covid lockdown, she received income payments from Centrelink. On that basis, the insurer submits that the claimant was earning continuously for the 12 months prior to the motor accident.
(d) The insurer therefore submits that Sch 1 cl 4(1) should be applied to calculate the claimant’s PAWE as she was earning continuously from 5 April 2021 to 4 April 2022.
(e) Based on the claimant’s gross income of $10,000 in her individual tax return 2021, the insurer calculates the claimant’s earnings for the period from 5 April 2021 to 30 June 2021 (12.29 weeks) to be $2,481.60.
(f) Based on the claimant’s gross income of $26,634 in her individual tax return 2022, the insurer calculates the claimant’s earnings for the period from 1 July 2021 to 4 April 2022 to be $20,700.
(g) The insurer submits that the total gross earnings for the relevant pre-accident assessment period is $23,181.60. That figure divided by 52 weeks equals $445.80. Therefore, the claimant’s PAWE is $445.80.
[1] A7.
RELEVANT LEGISLATION
PAWE is defined in Sch1 cl 4(1) of the MAI Act, subject to the qualifications in sub-cls (2), 2A, (3) and (4).
Schedule 1 cl 4 provides:
“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.
…
(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.”
DISCUSSION
Schedule 1 cl 4 provides that PAWE should be determined in accordance with sub-cl 4(1) unless any of the circumstances in sub-cls 4(2) and 4(3) exist.
The insurer has determined the claimant’s PAWE in accordance with sub-cl 4(1) by taking into account the weekly average of the claimant’s gross earnings received by the claimant as an earner during the 12 months immediately before the day of the accident.
In this case, the period of 12 months immediately before the day of the accident is from 5 April 2021 to 4 April 2022 (the relevant period).
The claimant disagrees with the insurer’s determination on that basis and submits that the provisions of sub-cl 4(2)(b) and sub-cl 4(3) apply to her circumstances.
Sub-cl (4) (3) applies if, during the relevant period, there was, as result of an action taken by the claimant, a significant change in her earnings circumstances that resulted in the claimant regularly earning or becoming entitled to earn more on a weekly basis than she was earning before the change occurred.
Sub-cl (4)(2)(b) provides that, if sub-cl (3) applies to the claimant’s circumstances, her PAWE should be calculated from the date of the significant change to the day before the accident.
The claimant submits that there was a significant change in her earnings circumstances during the relevant period that resulted in her being able to earn more on a weekly basis than she was earning before the date of the change. This change occurred in early January 2022 when she started to earn $1,000 net per week based on the offer made by J.Q. Hong Pty Ltd in late December 2021.
It is appropriate to set out the contents of the letter which states:
“To Whom It May Concern
RE: JINGJING CUI
I am the Director of J.Q. Hong P/L.
I confirm Ms Jingjing Cui commenced employment with J.Q. Hong P/L in March 2021.
Ms Jingjing Cui was employed as a casual cleaner.
From early January 2022, she has been working 40 hours per week and was paid $25.00 per hour. Her weekly renumeration was $1,000.00 net per week.
Her position was stable and her 40 hours work per week was permanent.
Jingjing would occasionally perform approximately 5 hours of overtime every fortnight.
I understand Jingjing was injured in a motor vehicle accident on 5 April 2022.
Given her injuries and the physical nature of the duties she has to perform, I have informed Jingjing that we will not be able to employ her until she has a medical clearance certificate as this is a risk to the Company.
…”
The claimant’s submissions together with the contents of the letter from J.Q. Hong Pty Ltd appear to suggest that J.Q. Hong Pty Ltd was the claimant’s employer and that in early January 2022 there was “significant change” in her earnings circumstances in early January 2022 in that the claimant was offered increased hours of work for a renumeration of $1,000 net per week.
I find however, that this proposition is inconsistent with the balance of the evidence before me.
First, the claimant’s individual tax returns from 2021 and 2022 show that the claimant was self-employed and provided cleaning services. She carried on business under the business name ‘Jingjing Cui’ and traded with an ABN. All of the claimant’s earnings were declared as business income. This is consistent with the claimant’s own evidence that she provided her cleaning services to J.Q. Hong Pty Ltd as a subcontractor. This would also explain why the claimant did not provide any ‘payslips’ to the insurer.
Secondly, there is no evidence to corroborate that the claimant received regular earnings on a weekly basis from early January 2022 to 4 April 2022 or that there was a substantial increase in her earnings during that period.
While I accept that the claimant may have been offered more work hours by J.Q. Hong Pty Ltd from early January 2022, I do not accept that this offer amounted to “a significant change in the claimant’s earning circumstances” within the meaning of sub-cl 4(3). At best, it appears to be an offer to work more hours following the easing of the COVID-19 pandemic restrictions.
Considering all the available evidence, I find that the claimant’s PAWE should be determined in accordance with the provision of sub-cl 4(1) based on the claimant’s earnings declared in her individual tax returns 2021 and 2022. I note in its submissions to the Commission that the insurer has revised its calculation of PAWE on that basis, to be $445.80. I adopt that calculation.
I therefore find that the amount of the claimant’s PAWE for the purposes of weekly payments of statutory benefits under Division 3.3 of the MAI Act is $445.80.
In conformity with s 7.13(1) of the MAI Act, my role is to decide what the correct and preferable decision is, having regard to the material before me and any applicable written or unwritten law. I have made my determination based on the material before me and having considered the facts and circumstances of the matter.
COSTS
The claimant seeks an allowance for legal costs under s 8.10(4) of the MAI Act. The exceptional circumstances are said to be that no less than seven hours of legal work has been performed in obtaining instructions, reviewing decisions, conducting investigations, researching, and preparing complex issues.
I have determined this dispute in my capacity as a merit reviewer pursuant to Sch 2 cl 1(a) of the MAI Act. The regulations do not allow for legal costs to be paid in a dispute of a merit review matter that is dealt with under this clause.
Legal costs under sub-s 8.10(4)(b) of the MAI Act can only be permitted by the Commission if the Commission is satisfied there are exceptional circumstances for doing so. Merit reviewers are not members of the Commission and, accordingly, do not have the power to permit legal costs under this provision of the MAI Act.[2]
[2] See ss 8, 31, 32 and 34 Personal Injury Commission Act 2020.
In my capacity as a member of the Commission, I have the power to permit the payment of legal costs in accordance with sub-s 8.10(4)(b).
In AAI Ltd trading as GIO v Moon [2020] NSWSC 714 Wright J observed that s 8.10(4) can be seen as designed to deal with particular, unusual situations where the maximum costs fixed by the regulations may not be adequate.[3] Some cases can be envisaged as exceptional and thus fall under the provision of s 8.10(4) because they involve an unusual degree of factual or legal complexity or for some other reason, and this requires the incurring of more substantial legal costs by a claimant.[4]
[3] At [97].
[4] At [99].
In this case, I am not satisfied that there was an unusual degree of factual or legal complexity that would warrant the exercise of my discretion under sub-s 8.10(4)(b).
Alternatively, the claimant further submits that if I am not minded to exercise my discretion under sub-s 8.10(4(b)), I should allow the claimant a “section 6.21 penalty for an increase of 25% costs to be … imposed for the unreasonable denial of liability”.
This submission must be rejected because it is in my view, misconceived. First, according to s 6.21(1) of the MAI Act, the Commission, may, in assessing costs on a claim, impose a costs penalty if the Commission is of the opinion that there was no reasonable basis for a denial of liability for a claim. This matter did not concern a denial of liability for the claim by the insurer. Liability was admitted promptly by the insurer and weekly payments to the claimant followed. Rather, the matter concerned a dispute between the parties about the amount of those payments. Secondly, it is futile in my view, to make an alternative submission under s 6.21 for a costs penalty (to be imposed by increasing an award for costs) where there was no award made for costs in the first instance.
CONCLUSION
The reviewable decision is varied.
The claimant’s PAWE is determined to be $ 445.80.
The insurer is to apply PAWE of $ 445.80 when determining the claimant’s entitlements under Division 3.3 of the MAI Act.
The effective date of this decision is 5 April 2022.
I make no allowance for the claimant’s legal costs.
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