Fakhouri v Insurance Australia Limited ACN 000 016 722 Trading as NRMA Insurance (Motor Accident Injuries)

[2021] ACAT 119

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

FAKHOURI v INSURANCE AUSTRALIA LIMITED ACN 000 016 722 TRADING AS NRMA INSURANCE (Motor Accident Injuries) [2021] ACAT 119

MAI 15/2021

Catchwords:               MOTOR ACCIDENT INJURIES – application for review of insurer’s decision pursuant to section 193 of the Motor Accident Injuries Act 2019 – income replacement benefit calculation – whether applicant is self-employed under section 74 of the Act – calculation of pre-injury weekly income for a self-employed person under section 82(1) of the Act – meaning of ‘net income’ of injured person who is self-employed under section 77 of the Act

Legislation cited:        Motor Accident Injuries Act 2019 ss 74, 76, 76, 80, 77, 81, 82, 96, 487, 488

Subordinate

Legislation cited:        Motor Accident Injuries (Income Replacement Benefit) Guidelines 2019 guidelines 3.1.3, 5.1.1, 5.1.2, 5.1.4, 5.2.1, 5.2.2, 5.2.3, 5.2.4, 5.2.5

Cases cited:Thompson v Gould & Co [1910] AC 409

Marshall v Waters (1972) 124 CLR 640
Taylor v Owners Strata Plan No 11564 [2014] HCA 9

Tribunal:Acting Presidential Member T Kyprianou

Senior Member M Sinclair

Date of Orders:  7 December 2021

Date of Reasons for Decision:      7 December 2021

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          MAI 15/2021

BETWEEN:

ANTOINETTE FAKHOURI

Applicant

AND:

INSURANCE AUSTRALIA LIMITED ACN 000 016 722 TRADING AS NRMA INSURANCE

Respondent

TRIBUNAL:Acting Presidential Member T Kyprianou

Senior Member M Sinclair

DATE:7 December 2021

ORDER

The Tribunal orders that:

1. The respondent’s decision dated 15 July 2021 that the applicant’s pre-injury weekly income is calculated to be $352.13 is set aside, pursuant to section 197(1)(c) of the Motor Accident Injuries Act 2019, and is substituted with the following decision.

2. The applicant’s pre-injury weekly income is $1,316.93. This amount is to be used by the respondent to calculate the applicant’s income replacement benefits pursuant to section 96 of the Motor Accident Injuries Act 2019.

   ………………………………..

Acting Presidential Member T Kyprianou
For and on behalf of the Tribunal

REASONS FOR DECISION

1. This matter was listed for hearing on 20 October 2021 conducted via Webex. The applicant was represented by her son Jacob Fakhouri and the respondent was represented by Andrew Schofield of counsel. The following paragraphs set out the Tribunal’s reasons for the decision made in the matter.

Background

1. The applicant was injured in a motor accident in the Australian Capital Territory on 24 September 2020. Pursuant to the Motor Accident Injuries Act 2019 (MAI Act) the applicant lodged a Defined Benefits Application with the respondent dated 5 October 2020. In that application she claimed benefits for lost income as a result of the motor accident and declared herself to be a ‘sales rep/director’. She stated her income to be $1,029 weekly.

2. The respondent considered the applicant to be self-employed and engaged the services of PKF Forensic Accountants (PKF) to calculate the applicant’s pre‑injury weekly income (PIWI) as provided for in the MAI Act. PKF asked the applicant to provide a number of documents evidencing her income and the income of the business . After reviewing those documents PKF issued a report dated 27 May 2021 (the PKF report) which concluded that the applicant’s PIWI was $352.13 per week. Relying on the PKF report on 4 June 2021 the respondent determined the applicant’s PIWI to be $352.13. This decision was affirmed after internal review by the respondent. The original internal review decision was dated 11 June 2021, however that decision and another subsequent version of the internal review decision, made references to the wrong legislation. Those references were ultimately completely removed from the decision after correspondence was received from the applicant pointing out the incorrect references. The final version of the internal review decision is in a letter dated 15 July 2021 (the reviewable decision). As in the earlier versions of the decision it determined the applicant’s PIWI to be $352.13 per week.[1]

   [1] Pages 6-9 of the documents lodged by the respondent in response to order 2 of the orders dated 29 July 2021 (the MAI documents)

3. The applicant lodged at ACAT an application dated 16 July 2021 for review by the tribunal of the reviewable decision.

Summary of the dispute between the parties

1. Both parties agree that at the time of her injury the applicant was an ongoing employee of the business known as Perfume Box. However, the applicant submits that she was not a self-employed person but an ongoing employee of that business as defined by the MAI Act and, therefore, only her income as an employee should be taken into account in determining her PIWI.

2. The respondent on the other hand submits that the applicant is a ‘self‑employed person’ as defined by the MAI Act and that her pre‑injury weekly income must be calculated under section 82(1) of the MAI Act to include the net income the applicant earned as a self‑employed person of the business she was operating. The respondent further submits that the term ‘net income’ must be interpreted to include any loss the applicant incurred as a result of operating that business during the relevant period and any such loss must be deducted from the applicant’s gross income as an employee of the business when calculating her pre-injury weekly income. This submission is broadly consistent with the methodology used, in the PKF report, to arrive at the applicant’s PIWI.

Legislative framework

1. Part 2.4 of the MAI Act sets out the framework under which persons injured in motor accidents can claim income replacement benefits, including the determination of pre-injury weekly income.

2. Also relevant to the issues in dispute between the parties are the Motor Accident Injuries (Income Replacement Benefit) Guidelines 2019 (MAI Guidelines) which have been made under the MAI Act (see sections 487 and 488). MAI Guidelines 3.1.3 and 5.2.1-5.2.5 set out guiding advice for making decisions under the MAI Act concerning the issues in dispute between the parties.

Is the applicant a self-employed person?

1. Section 74 of the MAI Act defines a self-employed person as follows:

   self-employed—a person is self-employed if the person derives income from providing labour, skills or knowledge to a business carried on by the person.

2. MAI Guideline 3.1.3 provides that a person may carry on a business as a sole proprietor through a partnership, a trust or a company.

3. In this case the applicant is an employee of a trust known as JSMarrts Trust (the Trust). She has submitted that the Trust does the trading for the business known as Perfume Box and employs the applicant to sell perfume. There is no dispute between the parties in relation to this. The trustee of the Trust is a company known as Perfume De Fragrance Pty Ltd ACN 166 031 787. The applicant is the sole director of that company.[2] As such she has absolute discretion as to how the trust distributes any income it derives from trading. Paragraph 61 of the Trust deed expressly provides that the trustee may exercise a power or discretion by a resolution of the trustee or of its director.[3] The applicant is also the only named beneficiary of the Trust, though the Trust also has classes of beneficiaries listed, all of whom are relatives of the named beneficiary, that is the applicant.

   [2] MAI documents, page 32

   [3] MAI documents page 27

4. According to the Trust’s financial records, lodged with the tribunal, she is the only employee of the Trust. The applicant accepts that she derives income as a sales representative from the Trust, but submits that she does not perform any other of the tasks that are necessary for the Trust to trade and she is therefore not self-employed because the business the Trust conducts cannot operate solely by the personal services she provides to it.

5. We do not accept this submission. It is clear from the documents available to the Tribunal that the applicant derives income from providing labour skills and knowledge both as a sales representative selling perfume and as a director to the business which sells perfume. The fact that she may not perform all tasks required for the business to operate is not relevant. She has chosen to carry on her business using a trust with a corporate trustee and to employ herself through that business structure. As such she is a self-employed person as defined by the MAI Act.

What is the applicant’s pre-injury weekly income?

1. Having determined that the applicant is a self-employed person her PIWI must be determined by reference to section 82(1) of the MAI Act.

2. Section 82 of the MAI Act sets out the meaning of PIWI for self‑employed persons as follows:

   82(1)pre-injury weekly income, for a self‑employed person, means the average weekly amount of the sum of the following amounts from all paid work undertaken by the person in the 52 weeks immediately before the date of the motor accident:

   (a)the person’s gross income as an employee;

   (b)the person’s net income as a self-employed person.

The applicant’s gross income as an employee

1. Both parties agree that the applicant derived income as an employee of the Trust. Her PIWI, according to section 82(1) of the MAI Act, is the sum of her gross income as an employee and her net income as a self‑employed person for the 52 weeks prior to the motor accident.

2. Section 76 defines gross income of an injured person who is an employee. It includes wages and allowances or salary sacrifice arrangements but not superannuation contributions made by the employer for the benefit of the employee. The section reads as follows:

   76.    Meaning of gross income—pt 2.4

   For this part, gross income, of an injured person who is an employee—

   (a)     includes the following:

   (i)any amount paid to the injured person as wages, bonuses, commissions or allowances;

   (ii)any amount paid to the injured person as overtime;

   (iii)any amount paid to the injured person as penalty payments for shift work;

   (iv)any amount paid to the injured person if the person was on paid leave;

   (v)any amount otherwise payable to the injured person under a voluntary salary sacrifice arrangement;

   (vi)any amount paid for loss of income under a workers compensation scheme; but

   (b)     does not include the following:

   (i)any contribution paid or payable on behalf of the person by the person’s employer to a superannuation scheme for the benefit of the person;

   (ii)any redundancy or voluntary early retirement payment received by the person from the person’s employer;

   (iii)any amount paid for unused leave on termination of employment;

   (iv)any other amount paid as a lump sum as a consequence of termination of employment;

   (v)any allowance or benefit prescribed by regulation received by the person from the person’s employer.

3. Subparagraph 82(1)(a) of the MAI Act provides that the relevant period for determining the injured person’s PIWI is the 52 weeks immediately before the date of the motor accident.

4. MAI Guideline 5.1.1 provides that a PAYG summary or a tax return of the person is to be treated as bona fide primary evidence of the person’s gross income as an employee over a period of up to 52 weeks before the accident. MAI Guideline 5.1.4 provides that if a person is an ongoing employee and has worked for the same employer for the 52 weeks prior to an accident, an insurer may estimate their PIWI based on their last PAYG summary. In these circumstances the estimated amount is to be used to calculate the person’s PIWI unless the person is able to substantiate that their actual gross income over the period was higher.

5. The applicant is an ongoing employee of the Trust and she has worked for the Trust for the 52 week period prior to the motor accident. She provided to the respondent her last tax return prior to the accident, that is for the financial year ending 30 June 2020.[4] Her PAYG summary for the year was not included in the documents provided. However, the tribunal notes that the amount shown on the PAYG summary, which employers are obliged to provide to the employee and declare the details of to the Australian Taxation Office, is recorded at Item 1 in the applicant’s 2020 tax return.[5] The applicant has not claimed that her actual income as an employee was higher than that shown in her last tax return. Consistent with MAI Guideline 5.1.1 the Tribunal finds that what is shown in applicant’s 2020 tax return, being the last tax return the applicant lodged prior to the motor accident, is bona fide primary evidence of her gross income as an employee. According to that document the applicant derived gross income, as an employee of the Trust for that period, in the sum of $68,857.

   [4] Pages 178-183 of the documents lodged pursuant to the order made 28 September 2021 (the MAI Supplementary Documents)

   [5] MAI Supplementary Documents page 179

6. The MAI Supplementary Documents include the income tax return for the Trust for the year ended 30 June 2020.[6] At page 190, item 46, label T of this return is declared an amount of $7,739, recorded as “Fringe benefit employee contributions”. This evidences that the Trust provides taxable fringe benefits to employees. However, according to the profit and loss statements of the Trust, no fringe benefits tax was paid for those benefits, because contributions were made by employees to the Trust to the value of the benefits.

   [6] MAI Supplementary Documents pages 184-196

7. As the applicant is the only employee shown in the financial records of the Trust, the Tribunal inquired of the applicant during the hearing whether the fringe benefits shown in the documents relate to a fringe benefit provided to the applicant. The Tribunal was informed by the applicant’s representative that the fringe benefit relate to two vehicles supplied by the business for the use of the applicant and one of her sons. The Tribunal inquired further whether there was any evidence within the documents before the Tribunal that the applicant’s gross income as an employee included a defined value for the supply of the vehicle she uses. If such evidence existed the amount of the applicant’s gross wage, under section 76(a) of the MAI Act, may need to be increased to include an allowance for the value of the vehicle. The applicant’s representative submitted that the fringe benefits shown in the financial records of the Trust related to both vehicles supplied by the business to the applicant and her son. Mr Fakhouri also submitted that the Trust’s financial records included bank repayments for the vehicle provided to the applicant and those repayments could be used to determine the value of her car benefit. There is no clear evidence in the documents available to the Tribunal or in the documents which were available to the reviewable decision‑maker which can be taken to be bona fide primary evidence or secondary evidence as set out in the MAI Guideline 5.1, supporting that the applicant’s gross income as an employee for the relevant period included an identifiable amount for a vehicle allowance. Further, the fact that employee contributions were made to the Trust, sufficient to offset the fringe benefit supplied, supports the conclusion there was no car allowance required to be included under section 76(a) of the MAI Act.

8. The Tribunal therefore finds that on the information and evidence the Tribunal has available, the applicant’s gross income as an employee in the 52 weeks prior to the accident was $68,857.

9. To determine the PIWI of the applicant section 82(1) of the MAI Act provides that, the applicant’s net income as a self-employed person must be added to her gross income as an employee and the sum of the two amounts is used to calculate the weekly average.

The applicant’s net income as a self-employed person

1. Section 77 of the MAI Act defines ‘net income’ of an injured person who is self‑employed:

   77.    Meaning of net income—pt 2.4

   In this part:

   net income, of an injured person who is self-employed, means the net income the person derives [emphasis added], or will derive, from carrying on a business, to the extent that the income is attributable to labour, skills or knowledge the person provides, or will provide, to the business.

2. MAI Guideline 5.2.3 states:

   An insurer is to base their calculation of net income of a self-employed person, using the net income figure in the last tax return of the business. An insurer should use the 12 month period for the tax return to determine the person’s pre‑injury weekly income, rather than the 52 week period immediately prior to an accident.

3. The Trust’s tax return for the financial year ending 30 June 2020, being the last tax return of the business prior to the motor accident, shows that the business made a loss of $104,014 for the year.[7]

   [7] MAI Supplementary Documents pages 184-196

4. The respondent has submitted in its written submissions, as well as in oral submissions before the Tribunal, that to determine the applicant’s PIWI under section 82(1) of the MAI Act the loss made by the business should be equated to the applicant’s ‘net income’ derived from carrying on the business and should be subtracted from the applicant’s gross income as an employee. The effect of this submission is that the term ‘net income’ as it appears in Part 2.4 should be interpreted as ‘net income or loss’.

5. The reviewable decision relies, in part, on this interpretation as well as a statement made by the author of the PKF report in which he concludes that the PIWI of the applicant cannot be completely based on the wages she received from the business, as the wages are paid with the cash flow of the business and they are not a true reflection of the net profits she derives from the business.[8]

   [8] MAI Documents page 8 at [18], and page 158

6. The Tribunal does not accept the respondent’s submission in relation to the interpretation of the words ‘net income’. Nor does it accept that the basis upon which PKF determined the applicant’s PIWI is supported by the provisions of the of the MAI Act and the MAI Guidelines.

7. Turning first to the PKF Report[9] we note that it sets out at Annexure 1 of the Report, the calculations the author made in assessing the applicant’s PIWI at $352.13 per week.[10] MAI Guideline 5.2.2 requires the insurer to have regard to the income and deductions for the business in the last tax return lodged in respect of the business prior to the accident. Guideline 5.2.3 requires the insurer to base the calculation of net income of a self‑employed person using the income figure in the last tax return of the business. The notes to the calculations in Annexure 1 of the PKF Report advise that the calculations are “Per the Trust’s 2020 Financial Statements”. No explanation has been offered as to the reason the figures in the financial statements have been used, instead of the figures shown in the last business tax return as is required by the MAI Guidelines. The figures used in the calculations, which the author of the report says were taken from the financial statements vary significantly from those in the tax return. The income in the financial statements ($169,527) was less than in the tax return ($177,267), as was the loss ($25,247 in the financial statements and $113,115 in the tax return).

   [9] MAI Documents pages132-141

   [10] MAI Documents page 138

8. These differences in the net income/loss figures of the business arise partly because the calculations in the PKF Report did not take into account the effect the difference between the ‘Opening and the Closing Stock’ figures shown in the tax return of the Trust has on the net profit/loss figure of the business. Further, the income included in the Trust’s tax return which came from the employee contribution was not included in the PKF calculation.

9. Finally, the author of the PKF report did not adjust the deductions figure for the amount of interest ($7,347 in the financial statement and $14,800 in the tax return) which clearly does not relate to the provision of personal services to the business, as the respondent rightly acknowledged during the hearing. MAI Guideline 5.2.5 requires the insurer to make adjustment for any income or deductions that do not relate to the provision of personal services to the business when calculating the net income of the business.

1. For the reasons set out above the Tribunal has not found the PKF report useful in its review of the reviewable decision.

2. At this juncture it is worth noting that section 81(1) of the MAI Act sets out the meaning of pre-injury weekly income for an ongoing employee or fixed term contractor who is not exclusively self-employed. In other words, for an ongoing employee or fixed term contractor employed by an independent employer. Section 81(1) makes provision for circumstances where such an employee also earns income from self-employment. It is worth noting that both sections 81(1)(a) and 82(1) define the expression ‘pre-injury weekly income’ in the same terms and both include the person’s net income as a self-employed person.

3. We note that the definition of the expression ‘net income’ in section 77 of the MAI Act makes no reference to profit or loss. That definition refers to net income derived by the person from carrying on business. The respondent’s submission invites the Tribunal to read that definition as ‘net income or loss’. It is only in exceptional circumstances that a court or tribunal can read words into legislation which are not there. We do not consider that such circumstances present themselves in this case.

4. As stated by Lord Marsey in Thompson v Gould & Co [1910] AC 409 at 420 “It is a strong thing to read into an Act of Parliament words which are not there and in absence of clear necessity”. In this case we do not consider that there is a clear necessity to assume that the legislature intended to reduce the income a self-employed person pays themselves as an employee of their own business by any loss made by the business.

5. Section 81(1) of the MAI Act provides a definition of the PIWI for an ongoing employee or fixed term contractor. The section defines ‘ongoing employee or fixed term contractor’ to mean a person who was, on the day of the accident, engaged in ongoing employment or under a fixed term contract. Such a person could work for any employer. The PIWI of such a person is the person’s gross income as an employee and the person’s net income as a self-employed person. This section is clearly directed at/concerned with persons who may be employed by independent employers and not their own business. However, if they also carry on a business of their own, then the income they derive from that business is taken into account in working out their PIWI. It would be extraordinary if the legislature, without explicitly stating so, intended that the injured person’s gross income as an employee of an independent employer would need to be reduced by any loss made by a business they conducted. If we were to import the words ‘or loss’ into the term ‘net income’, as it appears in Part 2.4 of the MAI Act, this would be the effect of the operations of section 81(1).

6. Similarly, a self-employed person may earn income as an employee of an entity independent of their own business. Such income would need to be included in the amount of gross income in sub‑paragraph 82(1)(a) of the MAI Act. We doubt that the legislature intended that the income should be reduced by any loss made by the self‑employed person’s business. No distinction is made in section 82(1) between the income derived from employment by the person’s own business or another independent employer.

7. Even if we considered that there is a need to interpret ‘net income’ to mean ‘net income or loss’, which we do not, the authorities make it clear that adding the missing words in the definition provided in the Act is not to be done lightly. In Marshall v Waters (1972) 124 CLR 640 at 649 Stephen J stated:

   Granted that there may seem to be lacking in the legislation powers which it might be thought the legislature would have done well to include, it is no [part] of the judicial function to fill gaps disclosed in legislation, as Lord Simonds said in Magor and St Mellows RDC v Newport Corp (1952) AC 189 at 191, if a gap is disclosed, the remedy lies in an amending Act and not in the usurpation of the legislation.

8. We do not consider that conditions present themselves in this case to allow the Tribunal to read the proposed additional words, i.e. ‘or loss’, into section 77 of the MAI Act, as it is not at all clear that the added words are necessary to achieve the purpose of the Act,[11] being to compensate an injured person for the loss of their pre-injury income, which is defined in section 80 of the MAI Act to mean the person’s pre-injury weekly income or pre-injury earning capacity.

   [11] See Taylor v Owners Strata Plan No 11564 [2014] HCA 9 [37]-[39]

9. Further, the MAI Guidelines were made to provide advice about payments to compensate people for income lost due to an injury as a result of a motor accident. The MAI Guidelines also make it clear that the income derived by a self-employed person from their business is not the same as the income or loss of the business itself.

10. MAI Guideline 5.2.2 provides:

    In determining the net income, a self-employed person derives from a business the insurer is to have regard to:

    ·        the income and deductions for the business in the last tax return lodged in respect of the business prior to the accident;

    ·        the personal services the injured person provided, or proposes to provide, to the business;

    ·        any loss incurred or likely to be incurred as a result of the injured person not working in the business; and

    ·        any costs incurred in employing substitute labour for the business.

11. It is clear from MAI Guideline 5.2.2 that the income and deductions in the tax return of the business is only one of the considerations that should be taken into account in determining the net income of the injured person. The income of the business as shown in the tax return of the business is not the same as the injured person’s net income as a self-employed person. The MAI Guideline makes no mention of the income paid to the self-employed person as an employee of the business under subparagraph 82(1)(a) of the MAI Act. It merely provides guidance on how to derive the proportion of the net income of the business the self‑employed person is entitled to, due to personal services they provided to the business. If the business made no net income during the relevant period provided for in the MAI Act and MAI Guidelines, then the applicant cannot derive any income as a self-employed person under subparagraph 82(1)(b) of the MAI Act.

12. MAI Guideline 5.2.3 states that an insurer is to base their calculation, of the net income of a self‑employed person, on the net income figure in the last tax return of the business. However, MAI Guideline 5.2.3 deals with the period an insurer must use to determine the net income of the self‑employed person, that is, the 12 months of the business’ tax return for the financial year before the accident, rather than the 52 weeks immediately prior to the accident. It does not, in our view, invite the insurer to treat the net income figure in the tax return of the business as the net income of the injured person. In any event, this Guideline also refers to the net income figure and not the net income or loss from the business.

13. The ordinary meaning of ‘net income’ as it is used in day‑to‑day language refers to a person’s or an entity’s earnings. We do not consider that the term encompasses any loss the person or entity might incur. The definition of the word ‘net’ in the eighth edition of the Macquarie dictionary includes the following definition when the word is used in the term ‘net income’: “5. Net income, profits or the like”. The dictionary definition of net income does not include loss. The respondent was unable to refer the Tribunal to any authority which has interpreted the phrase ‘net income’ to mean income or loss.

14. The respondent submitted during the hearing that the effect of calculating the applicant’s PIWI by taking into account her gross income as an employee of the business but not the loss made by her business, effectively provides a ‘windfall’ to the applicant, because the applicant has been funding her wages by incurring debt in the business, for which she will ultimately be responsible.

15. The financial records of the Trust indicate that the applicant’s business has made a loss every year since the financial year ended 30 June 2017.[12] The Tribunal is not in a position to ascertain whether the applicant will be better off by having her PIWI determined in accordance with section 82(1)(a) of the MAI Act, as part of the process of calculating her income replacement benefit payable due to her injury. Further, this consideration is not relevant to the task of reviewing the reviewable decision. The Tribunal’s role is to review that decision by interpreting the provisions of the legislative framework. The information available to the decision‑maker of the reviewable decision and any further information or evidence accepted by the tribunal on application by a party, is then considered within that interpretation. In this case the relevant provisions are those which establish whether the applicant was a self-employed person before she was injured and those which deal with the meaning of PIWI.

    [12] MAI Supplementary Documents page 193

16. Having decided that the applicant was a self-employed person prior to the accident, her PIWI must be determined in accordance with section 82(1) of the MAI Act. The first limb of section 82(1) requires consideration of the amount of the applicant’s gross income as an employee. MAI Guidelines 5.1.1 and 5.1.4 provide that the person’s lodged tax return for the financial year immediately preceding the motor accident is to be used as bona fide primary evidence of their gross income as an employee. That document was made available by the applicant and discloses her gross income pre-injury as an employee. There is therefore no need to refer to documents described in MAI Guideline 5.1.2 as secondary documents to ascertain the applicant’s gross income.

17. The second limb of section 82(1) of the MAI Act requires consideration of the person’s net income as a self-employed person. MAI Guideline 5.2.3 and 5.2.4 provide that the relevant period for ascertaining the net income of the business, which is one of the factors to be considered in working out the person’s net income as a self-employed person, is the period covered by the business’ last tax return prior to the motor accident, unless a tax return had not been lodged or there is evidence that the business’ financial position improved in the period between the end of that financial year and the date of the accident. The Trust’s last tax return for the financial year prior to the accident indicates that it had no income. It suffered a loss. We are not satisfied that there is evidence that the Trust’s financial position in the period between the end of that financial year and the date of the accident improved such as to have made a profit. The applicant could therefore not have derived any income distribution from the business as a self-employed person.

18. The applicant’s PIWI under section 82(1) of the MAI Act is her gross annual income as an employee, that is $68,857. In order to calculate an average weekly amount the annual income must be multiplied by the factor 364/366 and divided by 52 weeks. We note that the financial year ending 30 June 2020, which is the period used to ascertain the applicant’s gross income as an employee, was a leap year and thus her annual income must be multiplied by the factor 364/366 rather than 364/365. This calculation provides a weekly amount of $1,316.93. This conversion of the annual gross income of the applicant to a weekly amount is made in accordance with the examples provided in section 96 of the MAI Act and the examples provided under MAI Guideline 5.2.7.

19. Having determined the applicant’s PIWI to be $1,316.93, the respondent must use this amount to calculate the applicant’s income replacement benefits pursuant to section 96 of the MAI Act.

    ………………………………..

Acting Presidential Member T Kyprianou

For and on behalf of the Tribunal

Date(s) of hearing	20 October 2021
Applicant:	Mr J Fakhouri, authorised representative
Counsel for the Respondent:	Mr A Schofield