Gray v Insurance Australia Limited t/as NRMA Insurance

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
Citation:	Gray v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 54
ClaimanT:	Stephen Gray
Insurer:	Insurance Australia Limited t/as NRMA Insurance
Merit Reviewer:	Katherine Ruschen
DATE OF DECISION:	23 September 2022
CATCHWORDS:	MOTOR ACCIDENTS - Merit review; dispute about payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (2017 Act); failure to provide certificate of fitness under section 3.15 of the 2017 Act; clause 4.63 Motor Accident Guidelines Version 8.2 Effective from 8 April 2022; first entitlement period, sections 3.5 and 3.6 of the 2017 Act; merit review where no internal review section 7.11 of the 2017 Act; purpose of merit review; power of merit reviewer, section 7.13 of the 2017 Act; meaning of loss of earnings: schedule 1, clause 3 of the 2017 Act; meaning of post-accident earning capacity; schedule 1, clause 8 of the 2017 Act; income from personal exertion; whether interest payable on statutory benefits; Held – the reviewable decision is affirmed.
Determinations made:	The reviewable decision is about the amount of statutory benefits that are payable under Division 3.3 of the MotorAccident Injuries Act2017 (the MAI Act), and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act. 1. The reviewable decision is affirmed.

STATEMENT OF REASONS

INTRODUCTION

The claimant was involved in a motor accident on 18 February 2022.
The claimant made a claim for statutory benefits under the MAI Act, including payment of weekly benefits under Division 3.3.
On 19 July 2022 the insurer determined the claimant’s pre-accident weekly earnings (PAWE) in the sum of $1,305 and determined that weekly benefits are payable from

8 March 2022 on the basis of a certificate of fitness from Dr Stephen Howe stating the claimant is unfit from 8 to 22 March 2022.
On 25 July 2022 the claimant requested an internal review of the that part of the insurer’s 19 July 2022 decision to commence payment of weekly benefits from

8 March 2022.
On 26 July 2022 the insurer declined to conduct an internal review.
The claimant has requested a merit review of the 19 July 2022 decision of the insurer to commence weekly payments from 8 March 2022. In addition, the claimant raises various other issues in the merit review.

SUBMISSIONS

The claimant raises the following contentions in the merit review:
(a)    that the insurer’s PAWE handling was not transparent, accurate or timely;
(b)    that the insurer did not take into account Covid and didn’t follow guidelines;
(c)    that he disagrees with the start date for weekly payments;
(d)    that he disagrees with the insurer’s PAWE calculation;
(e)    that he disagrees with the “pay slip extension” of PAWE that it underpays him, and
(f)    that he has been adversely affected by the insurer’s tardy processing of PAWE.
The claimant seeks the following outcome in the merit review:
(a)    that weekly payments commence from the date of accident (Issue 1);
(b)    that his PAWE figure be adjusted to $1,475.90 based on his “contracted pay rate plus commission earned to overcome the Covid Lockdown anomaly” in his pay (Issue 2);
(c)    that there be an investigation into the insurer’s conduct and that the insurer be instructed to “correct and not repeat serious errors with extended calculations in the PAWE pay slip” (Issue 3);
(d)    that there be an investigation and the insurer be instructed to “correct the under payment without fault” (Issue 4);
(e)    that the insurer be instructed to pay interest on “delayed payment as compensation for their tardiness and mathematical errors” (Issue 5), and
(f)    that PAWE and/or weekly payments be calculated to include loss of superannuation (Issue 6).
The claimant has provided written submissions regarding his contentions above, which have been considered together with the claimant’s supporting documents.
The insurer submits the merit review is limited to whether weekly payments should commence prior to 8 March 2022 and says that weekly payments are payable from the day after the accident that is, from 19 February 2022 subject to provision of a valid certificate of capacity/fitness at all material times. The insurer submits there is no certificate of capacity/fitness for the period 19 February 2022 to 7 March 2022 and therefore weekly payments cannot be made. If a valid certificate of capacity/fitness is provided the insurer agrees weekly payments are payable from 19 February 2022.

REASONS

The claimant raises a number of issues for merit review and seeks the outcomes set out under paragraph 8 above. Each of these contended outcomes are considered below.

Issue 1: that weekly payments commence from the date of the accident

There has not been an internal review of Issue 1. However, pursuant to s 7.11(2) of the MAI Act the claimant may seek a merit review if he has requested an internal review and the insurer has declined to conduct an internal review.
The claimant requested an internal review on 25 July 2022. On 26 July 2022 the insurer declined to conduct an internal review. Accordingly, I have jurisdiction to determine Issue 1 pursuant to s 7.11(2) of the MAI Act.
As Issue 1 is about the amount of weekly payments payable under Division 3.3 of the MAI Act, specifically the amount payable in the period 18 February 2022 to

7 March 2022, it is a merit review matter under schedule 2(1)(a) of the MAI Act.
Pursuant to s 3.6 of the MAI Act:
“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” (emphasis added).
Pursuant to s 3.5 of the MAI Act “first entitlement period” means “the period of 13 weeks that starts on the day after the day of the motor accident”. Accordingly, any entitlement to weekly payments commences from the day after the day of the motor accident and not the day of the motor accident, as contended by the claimant. As the accident occurred on 18 February 2022 the claimant’s entitlement, if any, commences from 19 February 2022 pursuant to ss 3.5 and 3.6 of the MAI Act.
Weekly payments under s 3.6 are made based on the difference, if any, between the claimant’s PAWE and post-accident earning capacity.
Pursuant to Schedule 1, cl 8(1) of the MAI Act “post-accident earning capacity” for the first (and second) entitlement period relevantly means:
“The weekly amount that the person has the capacity to earn in the employment in which the person was engaged immediately before the motor accident, determined on the basis of the person's fitness for work in that employment…”
Pursuant to Schedule 1, cl 8(2) a person's fitness for work during the first (and second) entitlement period is to be determined having regard to the following:
(a)    the nature of the injury and the likely process of recovery;
(b)    treatment and rehabilitation needs, including the likelihood that treatment or rehabilitation will enhance earning capacity and any temporary incapacity that may result from treatment;
(c)    any earnings of the person in any employment engaged in by the person after the motor accident, and
(d)    any medical certificate provided by the injured person as to the person's fitness for work.
The matters set out above are factors upon which the extent to which an injured person has or does not have a post-accident capacity to earn.
Section 3.15 of the MAI Act and the Motor Accident Guidelines (the Guidelines) set out minimum requirements of the claimant before he is entitled to be paid weekly payments, even if he is able to otherwise establish the extent of his post-accident earning capacity based on other factors in Schedule 1, cl 8(2).
In this regard, s 3.15(1) of the MAI Act provides:
“(1) An injured person must provide to the insurer--
(a)certificates of fitness for work in accordance with this section in respect of the period in respect of which the person is entitled to weekly payments of statutory benefits under this Division…”
(emphasis added)
Where the word “must” appears in legislation, as it does in s 3.15(1), as distinct from “may” the requirement in the legislative provision is mandatory. That is, there is no discretion to relieve a person of their obligation under the legislation.
In this case, s 3.15 provides that the claimant “must” provide a certificate of fitness in respect of the period “in respect of which the person is entitled to weekly payments”. Accordingly, it is mandatory under s 3.15 that the claimant provide a certificate of fitness for each and every week that he is entitled to weekly payments. This requirement of the claimant is reinforced in the Guidelines, which state in cl 4.63 that:
“A claimant must provide to the insurer a certificate of fitness for work to be eligible for weekly payments. The required form of a certificate given under section 3.15(3) of the Act is a Certificate of Fitness (including the declaration of employment)” (emphasis added)
Pursuant to cl 4.64 of the Guidelines:
“The first certificate of fitness for work must be given by the claimant’s treating medical practitioner.” (emphasis added)
The Guidelines also use the word “must” which again means the obligation that the claimant provide a certificate of fitness for each week that he is entitled to weekly payments is mandatory. The Guidelines state the certificate must be provided for the claimant “to be eligible for weekly payments”. It follows from this that for any period in respect of which there is no certificate of fitness the claimant is not eligible for weekly payments in respect of that period pursuant to cl 4.63 of the Guidelines.
Certificates of fitness have been provided by the claimant for the period 8 March 2022 to 7 August 2022. The claimant has not provided a certificate of fitness for the period 19 February 2022 to 7 March 2022.
As noted above, pursuant to s 3.15 of the MAI Act and cl 4.63 of the Guidelines a certificate of fitness for the period in issue from 19 February 2022 to 7 March 2022 is mandatory before the claimant is entitled to be paid weekly payments in respect of this period.
In his request for an internal review about this issue the claimant makes submissions about his capacity in the period 19 February 2022 to 7 March 2022 and says he asked the doctor to backdate the certificate issued 8 March 2022 to the date of the accident but that the doctor declined on the basis he had not seen the claimant prior to

8 March 2022.
This claimant’s self-reported statement about his capacity in the period

19 February 2022 to 7 March 2022 is not supported by any medical evidence. Accordingly, the claimant’s fitness for work from an expert medical point of view in this period is unknown. Of note, the certificate of fitness commencing from 8 March 2022 records that the claimant’s injuries were limited to soft tissue injuries.
The claimant’s report that the doctor refused to provide a certificate covering fitness for work prior to 8 March 2022 is hearsay and not supported by any direct evidence from the doctor. Accordingly, it is of limited weight.
In any event, as set out above the requirement for a certificate in respect of each period that the claimant expects to be paid weekly payments is mandatory regardless, before the claimant is entitled to be paid weekly payments. Accordingly, the insurer’s decision to decline payment of weekly payments for the period 19 February 2022 to

7 March 2022 on the basis the claimant has failed to comply with his obligation under

s 3.15 of the MAI Act and cl 4.63 of the Guidelines to provide a certificate for this period is affirmed.

Issue 2: that PAWE be adjusted to $1,475.90 based on his “contracted pay rate plus commission earned to overcome the Covid Lockdown anomaly”

On 19 July 2022 the insurer determined the claimant’s PAWE in the sum of $1,305. There is no evidence that this decision has been the subject of a request by the claimant for an internal review. The documents provided evidence that the claimant has not requested an internal review of the insurer’s decision dated 19 July 2022 in so far as it concerns determination of the claimant’s PAWE.
Pursuant to s 7.11 of the MAI Act:
“(1) A merit review application may not be made in relation to a reviewable decision until the decision has been the subject of an internal review by the insurer under Division 7.3.
(2) A merit review application can be made without an internal review of the reviewable decision by the insurer if the insurer has failed to complete an internal review and notify the claimant of the decision on the internal review as and when required to do so or has declined to conduct a review.
(3) This section does not apply to a reviewable decision about a merit review matter of a kind prescribed by the regulations.”
As noted, there has been no request for an internal review and therefore no failure or refusal to conduct an internal review by the insurer. Accordingly, s 7.11(2) does not apply.
Whilst the claimant requested an internal review on 25 July 2022 he made clear in that request that his request for an internal review was limited to an internal review in respect of the insurer’s decision to commence weekly payments from 8 March 2022 instead of from 19 February 2022 by stating only the following, in answer to the question in the application form “what decision(s) do you want reviewed”:
“Start date of PAWE reviewed”.
Under the next question “Why do you believe the decision should be changed” the claimant only addressed the issue of the start date for payment of weekly payments. Under the next question “what would you like to be the outcome of the review” the claimant only stated one outcome, that the “start date should be the day of the accident 18/2/2022”. No other outcome was sought.
There is nothing in the claimant’s request for an internal review dated 25 July 2022 that would have put the insurer on notice that the claimant also sought internal review of the insurer’s decision that his PAWE is $1,305. The claimant’s internal review request dated 25 July 2022 is not a request for an internal review of a dispute about the PAWE calculation. Such dispute has not been the subject of a request for an internal review by the claimant.
Issue 2 about calculation of PAWE is also not a reviewable decision about a merit review matter of a kind prescribed by the Motor Accident Injuries Regulation (the Regulations) as being exempt from an internal review under s 7.11(3) of the MAI Act. Accordingly, s 7.11(3) also does not apply.
This leaves s 7.11(1) which provides that a merit review application may not be made about a reviewable decision until the decision has been the subject of an internal review by the insurer. As the insurer’s decision that the claimant’s PAWE is $1,305 has not been the subject of an internal review and ss 7.11(2) and (3) which would exempt the matter from internal review do not apply I do not have jurisdiction to conduct a merit review regarding the insurer’s decision that the claimant’s PAWE is $1,305. The claimant would need to first request an internal review of this decision and allow the insurer to conduct that review (unless the insurer refuses upon his request), before he may lodge an application for a merit review about his PAWE calculation.
The claimant’s request for a merit review regarding the PAWE calculation is therefore declined.
By way of observation only, it seems the claimant seeks an adjustment of his PAWE on the basis that his pre-accident earnings in the relevant pre-accident period were impacted by the COVID-19 pandemic and associated lockdowns. However, the Supreme Court has made clear in the decision of Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 (Shahmiri) that the MAI Act does not permit any such adjustment and that PAWE is to be calculated under Schedule 1, cl 4(1) by taking actual earnings (not theoretical earnings, if COVID had not occurred) over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 reflecting the number of weeks during the whole 12-month period, regardless of whether there was any interruption to, or decline in, earnings during this period because of COVID or for any other reason.

Issue 3: that there be an investigation into the insurer’s conduct and that the insurer be instructed to “correct and not repeat serious errors with extended calculations in the PAWE pay slip”

To the extent the claimant seeks and “investigation” into any issue I do not have jurisdiction or power to conduct or direct any investigation as a merit reviewer.
A merit review is a process by which a person or body, other than the primary decision-maker, reconsiders the facts, law and policy aspects of the original decision and determines what is the correct and preferable decision. The merit review process does not involve investigation into an insurer’s conduct or investigation of a complaint by the claimant. It involves consideration of the material put forward by the parties for the merit review process and is limited to re-determination of the insurer’s original decision based on what is considered the correct and preferable decision.
Pursuant to s 7.13(3) of the MAI Act, as merit reviewer I may decide:
(a)    to affirm the reviewable decision;
(b)    to vary the reviewable decision;
(c)    to set aside the reviewable decision and make a decision in substitution for the reviewable decision the merit reviewer set aside; or
(d)    to set aside the reviewable decision and remit the matter for reconsideration by the insurer in accordance with any directions of the merit reviewer.
Section 7.13 does not permit me to decide to conduct an investigation or direct that there be an investigation into the insurer’s conduct. Accordingly, the claimant’s request for an investigation is declined.
As to the contention in Issue 3 there are “repeat serious errors with extended calculations in PAWE pay slip” the claimant’s submissions do not clearly articulate the specific calculation error(s) said to have been made by the insurer and the supporting documents do not clearly show any error.
Reading between the lines I understand the error contended by the claimant is the failure to include Covid-19 disaster payments made by the government to the claimant in calculation of his PAWE and/or a failure to adjust PAWE based on the impact of COVID-19. The claimant points to cl 4.6(f) of the Guidelines, which provides that the insurer is to:
“take into account the health emergency caused by the COVID-19 pandemic on a claimant’s circumstances when making decisions about a claim, including decisions related to disputes, and the claimant’s ability to comply with obligations or timeframes under the Act, regulations or these Guidelines.”
Clause 4.6(f) of the Guidelines is a claims handling principle. That is, it applies to the claims handling and decision making process. It does not permit a decision itself to be altered in a manner that is inconsistent with the relevant legislative provision(s). This is made clear by the Supreme Court in the decision of Shahmiri referred to above.
In relation to COVID-19 disaster payments I have previously issued merit review decisions in which I concluded that such payments are excluded from pre-accident gross earnings for the purpose of calculating PAWE.
In relation to adjustment of pre-accident earnings to account for the impact of COVID-19 on earnings I have observed above that the principles in Shahmiri apply and as such, no such adjustment is available under the MAI Act.
In any event, Issue 3 contends the insurer has made errors in their PAWE calculation. As such, Issue 3 is a sub-issue of the substantive dispute raised by the claimant in Issue 2 that his PAWE calculation is incorrect. As I do not have jurisdiction to conduct a merit review about PAWE for the reasons set out under Issue 2 above I also do not have jurisdiction to conduct a merit review as to whether there are any errors in the PAWE calculation.

For the reasons set out above the claimant’s request for a merit review in respect of Issue 3 is declined.

Issue 4: that there be an investigation and the insurer be instructed to “correct the under payment without fault”

For the reasons set out under Issue 3 above I do not have power or jurisdiction to conduct or order an investigation.
The request in Issue 4 that the insurer be instructed to correct the “under payment without fault” is a sub-issue of the claimant’s substantive dispute in Issue 2 that the insurer’s PAWE calculation is incorrect. For the reasons set out under Issue 3 above and in turn, under Issue 2 I do not have jurisdiction to conduct a merit review about any issue arising under a dispute bout the PAWE calculation.
Accordingly, the claimant’s request for a merit review of Issue 4 is declined.

Issue 5: that the insurer be instructed to pay interest on “delayed payment as compensation for their tardiness and mathematical errors”

Assuming the “delayed” payment is a reference to payments for the period

19 February 2022 to 7 March 2022 I have affirmed the insurer’s decision above. Accordingly, at present the insurer is not liable to pay weekly payments for the period 19 February 2022 to 7 March 2022, as a certificate of fitness has not been provided for this period. It follows from this that there is no delay on the part of the insurer. Rather, any delay is attributable to the claimant’s failure to comply with his obligations under

s 3.15 of the MAI Act and cl 4.63 of the Guidelines to provide a certificate as to his fitness for work during the period 19 February 2022 to 7 March 2022.
If the delay is in relation to any alleged underpayment based on an allegation that the claimant’s PAWE has been incorrectly calculated, then I do not have jurisdiction to conduct a merit review about calculation of PAWE for the reasons set out under Issue 2 above.
In any event, the MAI Act does not permit payment of interest on statutory benefits, even if the claimant were to establish a delay.
Section 4.16 sets out the limited circumstances in which a claimant is entitled to interest under the MAI Act and limits the entitlement to interest on damages payable in relation to a motor accident. Accordingly, statutory benefits such as weekly payments, which are separate to “damages” under the MAI Act do not attract interest in any circumstance.

Issue 6: that PAWE and/or weekly payments be calculated to include loss of superannuation

Under Division 3.3 of the MAI Act the claimant may be entitled to weekly payments if he has suffered a “loss of earnings”.
Pursuant to Schedule 1, cl 3(1) of the MAI Act “loss of earnings” means “a loss incurred or likely to be incurred in a person's income from personal exertion”. Pursuant to cl 3(3) “income from personal exertion” does not include employer superannuation contributions. Accordingly, superannuation is excluded when determining the extent of the claimant’s entitlement to weekly payments under Division 3.3.
In any event, as Issue 6 has not been the subject of an internal review, for the reasons set out under Issue 2 above I do not have jurisdiction to make any determination in relation to Issue 6.

CONCLUSION

For the reasons set out above, Issues 2 to 6 raised by the claimant in this merit review are not the subject of a reviewable decision for the purpose of this merit review, as the claimant did not first request an internal review. I therefore do not have jurisdiction to determine Issues 2 to 6 and therefore decline to make any determination in respect of Issues 2 to 6.
Accordingly, this merit review is limited to a merit review in relation to Issue 1 raised by the claimant. Issue 1 raises a dispute about the insurer’s decision dated 19 July 2022 in so far as it determined that weekly payments are not payable for the period

19 February 2022 to 7 March 2022 on the basis the claimant has failed to provide a certificate of fitness for this period (the reviewable decision). Issue 1 is the only reviewable decision permitted under s 7.11 of the MAI Act to be the subject of a merit review and for the reasons set out under Issue 1 above:
(a) the reviewable decision is affirmed.

LEGISLATION AND GUIDELINES

In making this decision, I have considered the following:
·     the application, reply and supporting documentation;
· MAI Act;
·     the Guidelines, and
·     the Regulations.

[2022] NSWPICMR 54

23 September 2022