Dadisho v Insurance Australia Limited t/as NRMA Insurance
[2025] NSWPICMR 19
•25 June 2025
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
CITATION: | Dadisho v Insurance Australia Limited t/as NRMA Insurance [2025] NSWPICMR 19 |
CLAIMANT: | Dadisho |
INSURER: | Insurance Australia Limited t/as NRMA Insurance |
MERIT REVIEWER: | Terence O’Riain |
DATE OF DECISION: | 25 June 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; dispute over weekly statutory benefits payable under Division 3.3; Schedule 2(1)(a); issue concerning calculation of pre-accident weekly earnings (PAWE) and claimant’s gross contractor earnings; insurer amended PAWE twice in claimant’s favour based on updated information, insurer calculated gross profit after expenses relying on contractor earnings period; Insurance Australia Limited t/as NRMA Insurance v Iskander considered and followed; Held – insurer’s final reviewable decision affirmed. |
DETERMINATIONS MADE: | CERTIFICATE Issued under s 7.13(4) of the Motor Accident Injuries Act 2017 1. The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Act, and is therefore a merit review matter under Schedule 2(1)(a) of the Motor Accident Injuries Act 2017. 2. The reviewable decision dated 28 February 2025 is affirmed. |
REASONS
BACKGROUND
Joseph Dadisho (the claimant) was injured in a motor accident on 27 September 2023.
He subsequently claimed statutory benefits under Part 3 of the Motor Accident Injuries Act 2017 (MAI Act) on Insurance Australia Limited t/as NRMA Insurance (insurer). Liability for the claim has been admitted.
The claimant commenced these proceedings on 15 April 2024 to resolve a dispute about his pre-accident weekly earnings (PAWE). PAWE are used to determine the amount of weekly payments during the first and second entitlement periods: s 3.6 and s 3.7 MAI Act.
Shortly before the accident he had entered into an arrangement with Allied Express to operate delivery trucks on Allied Express' behalf guaranteeing a minimum weekly payment of $1,800 gross including GST. The claimant initially wanted the insurer to calculate his PAWE on that gross amount.
The dispute arose after the insurer determined on 25 March 2024 that the claimant’s PAWE was $56.56 based on the total earnings of the 12 months before the accident averaged over 52 weeks. The insurer was relying on a report from PKF forensic accountants dated 20 March 2024.
The insurer amended the PAWE to $114.58, which was the minimum amount which could be awarded; an internal review affirmed that decision on 11 April 2024. The insurer’s affirmation was the original decision under review. The dispute is a merit review matter: Sch 2 cl1(a) MAI Act.
The claimant initially submitted he was an earner under cl 2(b)(i) of Schedule 1 on the basis that he had entered into an agreement to undertake employment with Allied Express. If that was the case, then cl 4(2)(c) of Schedule 1 should apply to calculate the PAWE on the basis the clause specifically refers to the earnings under the agreement and does not state the earnings should be averaged over a 12-month period.
The insurer agreed Mr Dadisho was an “earner” under cl 2(a)(ii) of Schedule 1 but argued that his PAWE should be calculated under Schedule 1, cl 4 of the MAI Act being the weekly average of the gross earnings Mr Dadisho received as an earner during the 12 months immediately before the date of the accident.
Statutory framework
During the first entitlement period weekly payments of statutory benefits are payable in accordance with s 3.6. That provision states, relevantly, as follows:
“3.6 Weekly payments during first entitlement period (first 13 weeks after motor accident)
(1) An earner who is injured as a result of 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 under this section during the first entitlement period.
Note—
Only a person who was an earner when injured is entitled to statutory benefits under this section—see Schedule 1.
(2) A weekly payment of statutory benefits under this section is to be at the rate of 95% of the difference between the person’s pre-accident weekly earnings and the person’s post-accident earning capacity (if any) or post-accident earnings, whichever is the greater, for the first entitlement period.
(3) …
(4) …
(5) …”
Similarly, s 3.7 uses PAWE to ascertain the amount of payments during the second entitlement period.
The relevant definition of PAWE in this case is in Schedule 1, cl 4 as follows:
“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,
…
(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…
The term “loss of earnings” is defined in Schedule 1 cl 3 as follows:
“3 Meaning of ‘loss of earnings’
(1) Loss of earnings means a loss incurred or likely to be incurred in a person’s income from personal exertion.
(2) A person’s income from personal exertion is—
(a) the amount that is the income of the person consisting of earnings, salaries, wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered, and
(b) the proceeds of any business carried on by the person either alone or in partnership with any other person, and
(c) any amount received as bounty or subsidy in carrying on a business.
(3) A person’s income from personal exertion does not include—
(a) interest, unless the person’s principal business consists of the lending of money, or unless the interest is received in respect of a debt due to the person for goods supplied or services rendered by the person in the course of the person’s business, or
(b) rents or dividends, or
(c) any employer superannuation contributions, or
(d) the monetary amount of any annual, sick, or other leave entitlement.”
Preliminary conferences
The proceedings were the subject of two preliminary conferences. At the preliminary conference on 14 May 2024 the parties sought an opportunity to obtain further evidence, make further written submissions, and explore whether the dispute could be resolved.
The insurer's representative submitted that this matter was not ready to proceed, because the insurer had recalculated the PAWE to be $712.25, because of new information.
The claimant's lawyer sought time to advise his client and this matter may resolve between the parties. Philip Ferraro of Turner Freeman appeared at this teleconference but subsequently withdrew as the claimant’s lawyer on 15 July 2024.
I noted in the submissions that the insurer requested a copy of the contract between the claimant and Allied Express confirming the arrangement. This had not been provided yet, and the claimant sought time to write to that company to request a copy. This could result in the insurer recalculating the PAWE.
The parties requested directions for a timetable to provide further submissions and information to allow time to explore settlement. The parties agreed that I should decide this matter on the papers.
I directed that the claimant was to file further information and submissions via the portal no later than 4 June 2024, with the insurer to lodge its reply no later than 1
8 June 2024.
The parties had leave to inform me via the portal if they required an extension of time or directions for production.
Early in June 2024 the insurer sought leave to file a direction for production on Allied Express with a return date on 19 June 2024. I gave leave.
On 15 July 2024 I received notice that the parties had progressed in obtaining information that would comply with the earlier directions.
The second teleconference on 22 January 2025 included the claimant's current lawyer Karen Zhang of Littles Lawyers and the insurer's representative Ms Vitlina Pleskach.
On that occasion the claimant's representative informed me that this matter was not ready to proceed, because the claimant was not in a position to provide proper instructions.
The claimant's lawyer sought time to advise his client.
It appears that the claimant has not been able to prosecute this application, and I informed the claimant’s lawyer that it would be appropriate for the claimant’s lawyers to advise the claimant that discontinuing this application would allow the parties to obtain the outstanding information, attempt to resolve it informally and file another merit review application to resolve any aspect that the parties cannot agree on.
I had noted the insurer had recalculated the PAWE, but it would recalculate it again if it could receive the outstanding information about the claimant’s contract with the head carrier.
I stood this matter over for 56 days with a timetable for the production of the outstanding material. If the matter could not progress or the claimant did not discontinue this merit review then I would consider dismissing this application for want of prosecution under rule 77 of the Commission’s Rules after 19 March 2025.
Submissions
I received further submissions in response to the directions on 22 January 2025.
On 19 February 2025, the claimant submitted that the claimant claimed PAWE in the amount of $1,774.73, based on a change in circumstances, i.e. obtaining contracted work.
In the alternative, the claimant submitted based on earnings in the year before the accident, the claimant only started regular and continuing employment from around
29 May 2023 up until the date of accident being 27 September 2023. The claimant submitted that the appropriate period of weeks to divide the total earnings amount is 17 weeks from 29 May 2023 to 21 September 2023.
The total income amount was $14,256.32.
The total income amount free of GST was:
($14,256.32 / 11) x 10= $12,960.29
Following cl 4(2)(a) of Schedule 1 of MAI Act, PAWE could be calculated as:
$12,960.29/ 17 weeks = $762.37 nett per week.
The insurer submitted on 28 February 2025 that Mr Dadisho’s PAWE, which the insurer would apply was calculated on his actual earnings for the period from 6 July 2023 to
27 September 2023 (12 weeks) to be $725.12 per week before tax ($8,701.44 / 12 weeks).
This was calculated after deducting fuel expenses and depreciation, based on PKF's forensic accounting report dated 6 May 2024, which was included with the updated submissions. The insurer has confirmed that the insurer applied this revised PAWE to Mr Dadisho’s statutory payments since the date he became entitled to payments.
Consideration
The insurer and claimant have made considerable progress to resolve this matter so that the original reviewable decision has been reviewed and have substituted $725.12, which a difference of $37.25 in calculations from the claimant’s alternative calculation.
I do not accept the claimant’s PAWE in the amount of $1,774.73, based on a change in circumstances, i.e. obtaining contracted work because it is based on gross earnings without deductions.
I also do not accept the alternative calculation across 17 weeks because it is also based on gross earnings without deductions.
I prefer the insurer’s basis for calculating PAWE because it deducts fuel expenses and depreciation from the claimant’s income across the 12 weeks that he was earning income under the Allied Express contract.
A Merit Review Panel recently affirmed this insurer’s approach in Insurance Australia Limited t/as NRMA Insurance v Iskander [2024] NSWPICMR.
That Panel found that Schedule 1, cl 3(2)(b) of the MAI Act should be read together with Schedule 1, cl 3(1) which refers to loss of earnings as ‘a loss incurred or likely to be incurred in a person’s income from personal exertion’.
That Panel interpreted ‘income from personal exertion’ to mean the claimant’s share of business earnings rather than total earnings without deductions. The Panel found this to be consistent with Schedule 1, cl 4 of the MAI Act, which refers to the ‘weekly average of the gross earnings received by the earner as an earner’.
That Panel determined that deductions must be made from the total income of the business as earnings ‘must be received by the earner as an earner,’ i.e. the untaxed gross profits after expenses have been accounted for.
COSTS
This PAWE dispute is not a regulated merit review matter as defined under Schedule 1 Part 1(1) (2) of the Motor Accident Injuries Regulation 2017.
The claimant has also not sought costs under s 8.10(4) of the MAI Act permitting payment of the reasonable and necessary legal costs he has incurred in connection this PAWE dispute arising from a claim for statutory benefits.
The Commission could only make that order if it were satisfied that exceptional circumstances existed that justify payment of the costs he has incurred: s 8.10(4), MAI Act.
“(E)xceptional circumstances” must be unusual or out of the ordinary, whether as a result of qualitative or quantitative factors. The case need not be one that is unique, unprecedented, or very rare. The question is determined on the basis of the facts of the individual case.[1]
[1] San v Rumble (No 2) [2007] NSWCA 259 at [67].
Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional.[2]
[2] Ho v Professional Services Review Committee No 295 [2007] FCA 388 at [26].
In AAI Ltd trading as GIO v Moon [2020] NSWSC 714 (Moon) it was found that s 8.10(4) of the MAI Act can be seen as designed to deal with particular, unusual situations where the maximum costs fixed by the Regulations may not be adequate, and that:
“[99] …other cases can be envisaged which are exceptional, 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. These cases fall within s 8.10(4).”
Relevantly to this case at [82] of Moon the judge noted that s 8.10 or any other provisions of the MAI Act do not suggest that a claimant’s must be successful to recover legal costs under s 8.10.
This matter involved considerable work including submissions, providing additional information, reviewing further documentation from the insurer, and advising the claimant. The claimant’s lawyers provided substantial material to assist the insurer and this merit review.
The factual issues in dispute and the claimant’s lawyer legal work are considerable. These matters satisfy me that if the claimant had applied for costs, then it would have been open to me to find exceptional circumstances existed that would justify payment of the claimant’s costs limited to the 16 monetary units that would be available in a regulated merit review matter.
This decision will make me functus officio and unable to make additional directions. However, the claimant’s lawyers may rely on these comments if costs were sought directly from this insurer after this decision.
DETERMINATION
The reviewable decision based on the insurer’s submission on 28 February 2025 is affirmed.
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