Ford v QBE Insurance (Australia) Limited
[2023] NSWPICMR 16
•13 March 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Ford v QBE Insurance (Australia) Limited [2023] NSWPICMR 16 |
| ClaimanT: | Michael Ford |
| Insurer: | QBE Insurance (Australia) Limited |
| Merit Reviewer: | Katherine Ruschen |
| DATE OF DECISION: | 13 March 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; dispute about payment of weekly benefits under Division 3.3; pre-accident weekly earnings (PAWE); meaning of PAWE, schedule 1, clause 4(1); whether prior PAWE decision in relation to a different accident is relevant; whether weekly payments of statutory benefits are earnings received as an earner for the purpose of PAWE Held – the reviewable decision is set aside. |
| Determinations made: | CERTIFICATE OF DETERMINATION Issued under s 7.13(4) of the Motor Accident Injuries Act2017 DETERMINATION 1. The reviewable decision is: (a) set aside, and (b) the claimant’s pre-accident weekly earnings is $480.20. |
STATEMENT OF REASONS
introduction
There is a dispute between Michael Ford (the claimant) and the insurer about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
The claimant was involved in a prior motor accident on 3 February 2022, which was the subject of a separate application for personal injury benefits to another insurer, NRMA.
On 17 October 2022 the claimant was involved in the motor accident that is the subject of the application for personal injury benefits that gives rise to this merit review.
On 8 November 2022 the insurer in respect of the subject accident and respondent to this merit review determined the claimant’s pre-accident weekly earnings (PAWE) in the sum of $615.57.
The claimant requested an internal review of the insurer’s 8 November 2022 decision.
On 13 December 2022 the insurer issued their internal review decision in which the claimant’s PAWE amount was revised down to $358.22.
The claimant has requested a merit review of the insurer’s internal review decision dated 13 December 2022.
SUBMISSIONS
On lodging the application for a merit review the claimant requested additional time to provide submissions and documents in support.
By directions issued on 9 February 2022 the claimant was required to provide further submissions and documents by 23 February 2022. The claimant complied with these directions. However, the submissions provided are brief and provide limited assistance. The documents provided are also limited, consisting of two letters issued by NRMA regarding the claimant’s PAWE in connection with the prior motor accident, payslips issued by NRMA for payment of weekly benefits under the MAI Act in relation to the prior accident and payslips issued by the claimant’s employer.
The letters from NRMA state that on 21 March 2022 NRMA determined the claimant’s PAWE in the amount of $813.06 and on 21 April 2022 NRMA revised the claimant’s PAWE in the amount of $1,058.14. The letters from NRMA provide no insight into how NRMA calculated PAWE or why PAWE was revised on 21 April 2022.
In any event, the claimant’s submission is that in respect of the subject accident, PAWE should be calculated in the same amount determined by NRMA on
21 April 2022 that is, $1,058.14. Although not expressly contended in submissions, it is inferred that the claimant possibly also contends that weekly payments of statutory benefits made by NRMA during the 12 month period prior to the subject accident ought to be included in calculation of PAWE.The insurer submits that weekly payments of statutory benefits made by NRMA are not earnings received by the claimant as an earner but are passive income and therefore excluded from PAWE.
For the purpose of their internal review decision the insurer excluded payment of annual leave and sick leave from calculation of PAWE. However, for the purpose of this merit review the insurer does not press this position and submits that PAWE should be calculated on the basis of gross earnings received by the claimant in the 12 month period prior to the subject accident (inclusive of sick leave and annual leave), averaged over the number of weeks in that period being 52 weeks.
REASONS
Issues
There is no dispute that the claimant is an earner within the meaning in the MAI Act. There also does not appear to be any dispute that the claimant’s PAWE falls under Schedule 1, cl 4(1) of the MAI Act. The claimant does not contend for a different position in his submissions and there is no evidence before me that would suggest any of the exceptions under cl 4(2) may be triggered.
The issues in dispute are:
(a) whether weekly benefits paid by NRMA during the pre-accident period should be included in calculation of PAWE;
(b) whether NRMA’s PAWE determination in connection with a prior motor accident has any bearing on calculation of PAWE in connection with the subject motor accident, and
(c) the amount of the claimant’s PAWE under cl 4(1).
Whether weekly benefits paid by NRMA are PAWE
A fundamental principle of statutory interpretation is that the MAI Act is to be construed as a whole. As the High Court said in Project Blue Sky v Australian Broadcasting Authority (S41-1997) [1998] HCA 28 (Project Blue Sky) (at [69]):
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined by reference to the language of the instrument viewed as a whole. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.”
The principles of statutory interpretation, as set out by the High Court in Project Blue Sky relevantly require that:
(a) the words in the statute must be interpreted in a way that is consistent with the language used in that statute;
(b) words of a statutory provision are given the meaning that the legislature is taken to have intended them to have, and
(c) the same wording used throughout the statute carries the same meaning.
Pursuant to cl 4(1) PAWE relevantly means “the weekly average of the gross earnings received by the earner as an earner…”.
“Gross earnings” is not defined in the MAI Act. “Earnings” is also not defined. However, “loss of earnings” is defined in Schedule 1, cl 3(1) of the MAI Act to mean “a loss incurred or likely to be incurred in a person's income from personal exertion”. It is clear from this definition that the word “earnings” is intended to mean “income from personal exertion”.
The meaning of “income from personal exertion” is contained in cl 3(2) as follows:
“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.”
Whilst the word “earnings” does not have a specified definition in isolation to the definition of the phrase “loss of earnings” it is a word that is used throughout the MAI Act. Pursuant to principles of statutory interpretation it must be taken to have the same meaning throughout the MAI Act. Accordingly, “earnings” should be given the same meaning when used in phrases such as “gross earnings” and “earnings as an earner” as it is given by the definition of “loss of earnings” in Schedule 1, cl 3 of the MAI Act.
Under cl 3 “loss of earnings” means a loss of “income from personal exertion”. It follows that the word “earnings” is intended to mean “income from personal exertion” wherever the word appears in the MAI Act.
It is clear from the definition of “loss of earnings” from which a definition of “earnings” can be derived, being “income from personal exertion” that there is a distinction in the MAI Act between passive and active income. Passive income is excluded from the consistent meaning to be given to the word “earnings” wherever it appears in the MAI Act that is, that “earnings” means “income from personal exertion” as provided for in the definition of “loss of earnings”. Accordingly, only active income counts as loss of earnings that is, income from “personal exertion” being income from employment or from services rendered or from carrying on a business.
The claimant is not an employee of NRMA. He did not receive the NRMA payments for any services rendered. He did not receive the NRMA payments from carrying on a business. The NRMA payments are passive income, which falls outside the meaning of earnings based on principles of statutory interpretation which can only lead to the conclusion that “earnings” means “income from personal exertion”.
Accordingly, the NRMA payments which are passive income and not income derived from personal exertion are excluded from PAWE.
NRMA’s PAWE decision
The MAI Act is specific in relation to the period over which PAWE is calculated under Schedule 1, cl 4(1). That period in relation to the subject accident is not the same as the period in relation to the prior accident in respect of which NRMA calculated PAWE. Accordingly, NRMA’s PAWE decision has no bearing on a PAWE decision arising from a separate motor accident. NRMA’s decision was based on the facts, matters and circumstances as made known to NRMA at the time of their decision and in relation to a different pre-accident period.
Each decision must be based on the facts, matters and circumstances specific to the matter. The facts, matters and circumstances, as known, may differ at any given time. The information made known to NRMA, the extent to which NRMA considered that information reliable and the basis on which NRMA calculated PAWE is not known. It may be that NRMA erred in their PAWE decision. Regardless, as Merit Reviewer I am required to make the correct and preferrable decision on the information before me in relation to the motor accident that occurred on 17 October 2022.
The NRMA decision is nothing more than the opinion of the NRMA decision maker at the time having regard to a different pre-accident period. It is not a binding decision. Indeed, NRMA’s decision may be found not to be the correct and preferable decision, if scrutinised. In this regard I note payslips available in this merit review for earnings received prior to the motor accident on 3 February 2022 do not suggest the claimant’s average weekly earnings prior to 3 February 2022 were $1,058.14, as determined by NRMA. Payslips for the period 13 October 2021 to 2 February 2022 total $9,587.46. The number of weeks in the period 13 October 2021 to 2 February 2022 is 16 weeks. This produces a weekly average of only $599.22 ($9,587.46 divided by 16 weeks) which is not consistent with NRMA’s PAWE decision. A weekly average of $599.22 is, however, consistent with payslips evidencing a fluctuation in earnings from fortnight to fortnight such that the claimant did not consistently earn over $1,000 every week. On many occasions, the claimant earned significantly less.
For example, in the fortnight ending 7 November 2021 the claimant earned a weekly average of only $470.09. In the fortnight ending 5 December 2021 the claimant’s weekly average was $300 and, in the fortnight ending 19 December 2021 his weekly average was $284.31. Unless there was reliable evidence before NRMA that earnings between 3 February 2021 and 12 October 2021 (noting I do not have these payslips) exceeded a weekly average of $1,058.14 by a considerable amount such that it brought the average over 52 weeks to $1,058.14 despite a weekly average from
13 October 2021 to 2 February 2022 of only $599.22, it is difficult to see how NRMA’s PAWE decision could be correct.As noted, the documents considered and how NRMA reached their determination is not known. Whilst on the information before me the correctness of NRMA’s decision is questionable, the NRMA decision is not the subject of this merit review. The NRMA decision therefore cannot be reviewed as part of this merit review to determine whether it is the correct and preferable decision. Given the analysis undertaken above, however, it seems likely the NRMA PAWE decision was incorrect.
In the above circumstances it is not appropriate to have regard to or be influenced by the NRMA decision when determining the current merit review involving a separate motor accident on a different date.
Calculation of PAWE under cl 4(1)
Under Schedule 1, cl 4(1) PAWE means:
“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.”
(emphasis added)The 12 months immediately before the day on which the motor accident occurred for the purpose of cl 4(1) in this case is 17 October 2021 to 16 October 2022.
PAWE under cl 4(1) concerns earnings “received” by the claimant during the 12 month pre-accident period as distinct from work carried out or performed by the claimant in that period. It is apparent from the insurer’s submissions that the insurer has determined PAWE based on the latter by adopting the “period end” date in the payslips rather than the “pay date” and in relation to the first relevant payslip for the period ending 24 October 2021 (paid on 27 October 2021), discounting the gross payment by 50% for work carried out in that pay period prior to 17 October 2021. To this extent the insurer’s position is incorrect, as cl 4(1) concerns earnings “received” in the relevant period regardless of when the work that generated those earnings was carried out or performed.
Clearly, under cl 4(1) any earnings received by the claimant prior to commencement of the 12 month period on 17 October 2021 are excluded as are any earnings received after the end of the 12 month pre-accident period on 16 October 2022 even if earnings received after this date reflected payment for work performed prior to this date.
I have determined above that weekly payments made by NRMA under the MAI Act in respect of a prior accident are excluded. This leaves the earnings received by the claimant from his employer, SGS Australia Pty Limited in the period 17 October 2021 to 16 October 2022 evidenced by the payslips as follows:[1]
[1] As cl 4(1) concerns earnings “received” in the relevant period I have adopted the “Pay Date” rather than the “Period End” date in the payslips.
Date paid/received by claimant Gross amount 27 October 2021 $1,880.24[2] 10 November 2021 $940.18 8 December 2021 $600 22 December 2021 $568.61 5 January 2022 $1,124.43 19 January 2022 $679.52 2 February 2022 $197.92 2 February 2022 $1,481.92 16 February 2022 $1,153.35 2 March 2022 $940.12 24 April 2022 $376.05[3] 25 May 2022 $185.55 8 June 2022 $738.08 22 June 2022 $942.59 6 July 2022 $1,234.85 20 July 2022 $758.76 3 August 2022 $1,400.28 17 August 2022 $1,945.75 31 August 2022 $2,186.43 14 September 2022 $1,931.95 14 September 2022 $191.52 28 September 2022 $1,736.55 12 October 2022 $1,775.59 Total gross earnings received $24,970.24 [2] Whilst some of the work was carried out prior to 17 October 2021 the whole of this earnings amount was received by the claimant after 17 October 2021.
[3] I have not been provided with a copy of this payslip, but it is referenced in the insurer’s submissions. I therefore assume it was made available to the insurer.
Accordingly, the claimant received gross earnings in the 12 month pre-accident period under cl 4(1) of $24,970.24. The number of weeks in the period is 52 weeks. Pursuant to the decision of Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 there can be no adjustment to this 52 week period under cl 4(1) to allow for an interruption in earnings such as those weeks that the claimant was not working and in receipt of weekly payments from NRMA by reason of the prior motor accident. Accordingly, the claimant’s PAWE is the gross earnings of $24,970.24 received in the period 17 October 2021 to 16 October 2022 divided by 52 weeks. This produces PAWE in the amount of $480.20.
CONCLUSION
For the reasons set out above:
(a) NRMA payments are excluded from calculation of PAWE;
(b) the NRMA PAWE decision is irrelevant to determining the claimant’s PAWE in relation to the subject accident on 17 October 2022;
(c) the claimant’s PAWE is the total of gross earnings received from his employment in the pre-accident period 17 October 2021 to
16 October 2022 averaged over the 52 weeks in that period, and(d) the claimant’s PAWE amount is $480.20 under cl 4(1) based on gross earnings of $24,970.24 received in the period 17 October 2021 to
16 October 2022.Accordingly:
(a) the reviewable decision is set aside, and
(b) the claimant’s PAWE amount is $480.20.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· The Application, Reply and supporting documentation;
· MAI Act;
· Motor Accident Guidelines, and
· Motor Accident Injuries Regulation 2017.
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