Hanna v QBE Insurance (Australia) Limited

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	Hanna v QBE Insurance (Australia) Limited [2023] NSWPICMR 58
CLAIMANT:	Layal Hanna
INSURER:	QBE
MERIT REVIEWER:	Katherine Ruschen
DATE OF DECISION:	29 November 2023
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; dispute about payment of weekly benefits under division 3.3; meaning of earner; schedule 1, clause 2; arrangement to undertake employment at a particular time and place; clause 2(b); whether arrangement commenced during 8 week period before the motor accident; clause 2(a)(i); contractual interpretation; absence of earnings received before motor accident; incomplete evidence; pre-accident weekly earnings (PAWE) under schedule 1, clause 4(c) or clause 4(1) or clause 4(2)(a); onus of proof; Held – the reviewable decision is set aside.
DETERMINATIONS MADE:	CERTIFICATE Issued under s 7.13(4) of the Motor Accident Injuries Act 2017 DETERMINATION The reviewable decision is about the amount of weekly benefits that are payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act), and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act. 1. The reveiwable decision is set aside. 2. The claimant is determined to be an earner under Schedule 1, cl 2(a)(i).

STATEMENT OF REASONS

INTRODUCTION

There is a dispute between Layal Hanna (the claimant) and the insurer about the amount of weekly payments of statutory benefits payable under Division 3.3 of the Motor Accident Injuries Act 2017 (MAI Act).
The claimant was involved in a motor accident on 12 May 2023.
On 26 May 2023, the claimant lodged an application for personal injury benefits.
On 24 August 2023, the insurer determined that the claimant was not entitled to payment of weekly statutory benefits because the claimant did not meet the definition of “earner” in the MAI Act.
The claimant requested an internal review of the insurer’s decision dated 24 August 2023.
On 29 August 2023, the insurer issued their internal review decision in which the insurer affirmed their decision that the claimant was not an earner under the MAI Act and therefore not entitled to payment of weekly statutory benefits.
The claimant requested a merit review of the insurer’s internal review decision dated 29 August 2023 (the Application).

SUBMISSIONS

The dispute is about whether the claimant is an earner within the meaning of the MAI Act.
The claimant submits she is an earner pursuant to Schedule 1, cl 2(b) of the MAI Act on the basis she contends that before the motor accident she had entered into an arrangement to undertake employment which was to commence after the motor accident.
The claimant relies on a contract entered into with The MAS Agency on 20 April 2023 (the Contract) as evidence of an arrangement made before the accident. The claimant contends that because of this her pre-accident weekly earnings (PAWE) fall under Schedule 1, cl 4(c) of the MAI Act. Clause 4(c) provides that 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 their PAWE is 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 claimant has provided a copy of a letter to The MAS Agency requesting The MAS Agency’s opinion as to her expected earnings under the Contract. However, no further evidence, including no reply from The MAS Agency has been provided.
The insurer submits the claimant does not satisfy the definition of “earner” in the MAI Act on the basis the arrangement made was not one pursuant to which it had been arranged, before the motor accident, for the claimant to commence employment at a particular time and place after the motor accident. In the alternative, the insurer submits PAWE is nil because there is no reasonable basis to assume the claimant would have derived income, or continuous income, from the arrangement with The MAS Agency.

REASONS
Legislation

The definition of “earner” is set out in Schedule 1, cl 2 of the MAI Act as follows:
“A person who is injured as a result of a motor accident is an ‘earner’ if the person is at least 15 years of age and who--
(a) was employed or self-employed (whether or not full-time)--
(i) at any time during the 8 weeks immediately preceding the motor accident, or
(ii) during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii) during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,
and, at the date of the motor accident, had not retired permanently from all employment, or
(b) before the motor accident, had entered into an arrangement (whether or not an enforceable contract)--
(i) with an employer or other person to undertake employment, or
(ii) to commence business as a self-employed person,
at a particular time and place, or
(c) was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987.”
(emphasis added)

Is the claimant an earner under cl 2(b)?

The claimant relies on Schedule 1, cl 2(b) as the basis upon which she says she is an earner for the purpose of the MAI Act. The clamant contends that before the motor accident she had entered into a contract of employment with The MAS Agency.
The Contract, however, is a subcontract arrangement pursuant to which the claimant would be self-employed, providing services as a contractor to The MAS Agency from time to time. There is no evidence before me that the claimant had entered into an arrangement with The MAS Agency or any other employer to commence employment (as distinct from self-employment) after the accident. Accordingly, Schedule 1, cl 2(b)(i) does not arise.
However, there is a question as to whether the contractual arrangement with The MAS Agency falls under Schedule 1, cl 2(b)(ii) on the basis of an arrangement to undertake self-employment.
Schedule 2, cl 2(b)(ii) requires that before the motor accident the claimant had arranged to:
(a) commence business as a self-employed person, and
(b) that such self-employment would commence at a particular time and place.
The Contract was executed by both contracting parties before the accident, on 20 April 2023. The “Key Agreement Details” record that, at the time of provision of the Contract to the claimant for execution:
(a) the claimant’s ABN details were yet to be provided, and
(b) the “Commencement Date” is “TBC”.
However, the Contract must be considered as a whole as a matter of basic principles of contractual interpretation, which require:
(a)   giving effect to what the parties intended;
(b)   assessing what the parties intended objectively, not subjectively, and
(c)   determining the meaning of the terms of a commercial contract by what a reasonable businessperson would understand those terms to mean.
The starting point is the words actually used. Contractual interpretation requires giving express terms their plain and ordinary meaning, unless doing so would result in manifest absurdity. Where a word or phrase is defined in a contract that word or phrase is given the special meaning, as defined in the contract.
In applying the principles of contractual interpretation, the first consideration is that the words “Commencement Date” are capitalised at the beginning of each word in the Contract which indicates “Commencement Date” is a defined phrase in the Contract.
This is confirmed in the “DEFINITIONS” clause 17 of the Terms and Conditions (Terms) of the Contract which provides that:
“In addition to capitalised terms defined in the Key Agreement Details above, capitalised terms used in this agreement will have the following meanings…” (emphasis added).
Accordingly, capitalised terms in the Key Agreement Details are defined terms in the Contract.
The Key Agreement Details include a signing page on page 4 of the Contract where the executed contract reads as follows:
“Executed as an agreement on: ____04/20/2023____ (Commencement Date)”
It is clear that this is where the defined term “Commencement Date” is defined in the Contract. “Commencement Date” is defined to mean the date on which the agreement is executed, which in this case is 20 April 2023 (it is apparent the date of execution is written in the Contract in American format that is, month, day, year rather than day, month, year).
Clause 1 of the Terms provides that:
“This agreement commences on the Commencement Date and will continue indefinitely, unless terminated in accordance with its terms (the Term).”
This makes clear that the Contract commenced on the date on which it was executed by the contracting parties as an agreement between them. It is likely that “TBA” is written next to “Commencement Date” on the first page of the Key Agreement Details because it is not until the Contract is signed that the “Commencement Date”, being defined within the Contract terms as the date of execution of the Contract, is known.
Accordingly, as per the definition of “Commencement Date” in the Contract, the Contract commenced on 20 April 2023 being the date on which it was executed by the parties to the Contract.
The Contract required the claimant to submit invoices under an Australian Business Number (ABN). The claimant obtained an ABN on 26 April 2023, shortly after commencement of the Contract on 20 April 2023. This is consistent with the Contract commencing before the accident.
Schedule 1, cl 2(b)(ii) requires that the claimant had arranged before the motor accident to commence business as a self-employed person at a “particular time and place” after the motor accident. Whilst the words “after the motor accident” do not appear in cl 2(b) they are necessarily inferred in order to give proper meaning and intent to the provision. Relevantly, cl 2(b) requires that there is, before the accident, an “arrangement” as distinct from commencement of employment or self-employment. It follows from the word “arrangement” that the employment or self-employment is to commence after the motor accident. Otherwise, the circumstances would fall under cl 2(a). The intention of cl 2(b) is clearly to include alternative circumstances in which an injured worker may be considered an earner for the purpose of the MAI Act, if they do not fall within any of the circumstances in cl 2(a). The requirement that the arrangement is made before the accident, but the employment or self-employment is to commence after the accident is reinforced by Schedule 1, cl 4(c) which calculates PAWE on expected earnings that is, on the basis of earnings the earner could have expected to receive after the accident because at the time of the accident the employment or self-employment had not yet commenced.
The evidence establishes on the balance of probabilities that the arrangement with The MAS Agency was not an arrangement under which it had been arranged for the work to first commence after the accident. The arrangement had already commenced on 20 April 2023 when the Contract was executed. Accordingly, the circumstances do not fall under Schedule 1, cl 2(b). Instead, as the arrangement with The MAS Agency had commenced on 20 April 2023, during the eight week period before the accident on 12 May 2023, the claimant is likely an earner under cl 2(a)(i).
The above interpretation of the Contract regarding its commencement date is clear. There is no absurdity in that interpretation. On the other hand, if the capitalisation in “Commencement Date” making it a defined term under cl 17 were ignored where those words appear on page 1 before “TBA” there would be an absurdity when one then comes to the definition of “Commencement Date” on the signing page of the Contract, the definition being the date on which the contract is executed.
The conclusion that the claimant had already commenced self-employment before the accident (during the eight weeks immediately preceding the accident) is evidenced by:
(a)   correct interpretation of the Contract that the “Commencement Date” of the Contract was 20 April 2023 which is before the accident;
(b)   the obtaining of an ABN on 26 April 2023, also before the accident, and
(c)   the statement declared by the claimant as true and correct in her application for personal injury benefits that, at the time of the accident, she was already engaged in employment with The MAS Agency.
If “Commencement Date” was not defined in the Contract to mean the date of execution of the Contract and instead, it was to be accepted that the commencement date was yet to be confirmed the claimant would not meet the definition of earner under cl 2(b) in any event. This is because cl 2(b) requires that the arrangement before the accident was one pursuant to which the claimant was to commence self-employment at a “particular time and place” after the accident.
For the reasons set out in paragraphs 17 to 21 in Du v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPICMR 38, there needs to be a sufficient degree of specificity in the arrangement made before the accident for there to be an “arrangement” to commence self-employment. If specifics such as time and place and/or rate of pay, for example, where yet to be agreed when the accident occurred then there is no arrangement for the purpose of Schedule 1, cl 2(b).
In this case, the “arrangement” contains details as to how the claimant would be remunerated. However, accepting for the moment that the commencement date was to be confirmed, there was no arrangement to commence providing services to MAS Agency at a particular (that is specific) time. Accordingly, there is no “arrangement” for the purpose of cl 2(b).
In any event, the claimant’s contention that she had arranged to first commence work under the Contract at some (unspecified) time after the accident is inconsistent with the Contract commencement date of 20 April 2023. It is inconsistent with the terms of the contract that the claimant would only provide services from “time to time”, as requested by The MAS Agency and not at any particular or specific time or on any regular basis. It is also inconsistent with the claimant’s declared evidence in her personal injury benefits application that as of the day of the accident she was already working for The Mas Agency.
The claimant has requested a letter from The MAS Agency about anticipated earnings under the Contract. No response from The MAS Agency has been provided. In any event, this evidence is not relevant given I have concluded on balance that the contract commenced before the motor accident.

Absence of evidence of earnings received before the accident

It is not known whether the claimant received any earnings from The MAS Agency (or any other source) before the accident. The claimant has not provided bank statements for the period 19 March 2023 to the date of the accident on 12 May 2023. The claimant only provided bank statements up until 18 March 2023. As bank statements for any period after the Contract commenced on 20 April 2023 have not been provided by the Claimant, it is possible earnings were received from The MAS Agency in this period. This possibility must be considered, given the Contract’s stated pre-accident commencement date, the absence of bank statements covering the relevant period and the claimant’s declared statement in her application for personal injury benefits that she was already working for The MAS Agency as at the date of the accident.
Given the payment terms of the Contract it is also possible that work had been carried out before the accident, but at the time of the accident payment had not yet been received by the claimant. Alternatively, given the speculative nature regarding when work might be available to the claimant (that is, from “time to time” as directed by The MAS Agency) it is also possible that The MAS Agency had not yet required the claimant’s services.
The Contract is one where the claimant provides services to The MAS Agency to assist The MAS Agency, a recruitment company, to find potential candidates to place into roles with client employers of The MAS Agency. The payment terms under the Contract are highly speculative and provide for a delayed payment regime. The payment terms do not permit the claimant to invoice for any work unless and until The MAS Agency successfully places a candidate referred by the claimant into a role.
Whether and when the claimant will be asked to provide any services under the Contract is also speculative. The terms of the Contract do not guarantee any work to the claimant. Instead, The MAS Agency may request the claimant’s services from “time to time”. There is no guarantee of work, minimum or otherwise.
The terms of the Contract provide that the claimant will provide services “from time to time” to The MAS Agency and only “as [and when] directed” by The MAS Agency. Under the Contract the claimant’s services (if requested by The MAS Agency) are to source or identify potential candidates for The MAS Agency. If a candidate is sourced or identified by the claimant but ultimately not converted to placement into a role by The MAS Agency there is nil payment to the claimant for this work. The claimant is only paid if a candidate she refers is successfully placed by The MAS Agency into a role. It is likely that time will lapse between when the claimant identifies a suitable candidate and when the claimant can invoice for that work, as the claimant can only invoice once the candidate is successfully converted by The MAS Agency into a placement. It is also likely that there would be times when the claimant is not remunerated because the referral is not converted to a placement.
Where there is a successful placement, the claimant receives a fixed fee akin to a “finder’s fee” based on a sliding scale determined by the placement’s salary. The fixed fee per placement ranges from $480 to $710 exclusive of GST.
It may be that:
(a)   work carried out by the claimant from commencement of the Contract on 20 April 2023 until the day of the accident had not converted into a placement by The MAS Agency and therefore, nil payment to the claimant; or
(b)   the claimant was yet to invoice because she was awaiting notification of a successful placement;
(c)   or the claimant had invoiced before the accident but not yet received payment from The MAS Agency; or
(d)   although the contract had commenced on 20 April 2023, The MAS Agency had not yet required the claimant’s services noting the “time to time” basis upon which they may request the claimant’s services.
Alternatively, earnings may have been received before the accident but not disclosed given the absence of bank statements for any date after commencement of the Contract.
Regardless of the reasons, the absence of evidence of earnings received before the accident is not determinative as to whether the claimant is an earner under Schedule 1, cl 2(b). If the arrangement had already commenced before the accident, cl 2(b) does not apply even if earnings had not yet been received.

Is the claimant an earner under cl 2(a)?

The circumstances fall under Schedule 1, cl 2(a)(i) because the claimant had commenced the Contract on 20 April 2023, during the eight week period before the accident. On balance, the claimant is therefore an earner under cl 2(a)(i).
For the reasons outlined above, it may be that income had not yet been received before the accident. However, like cl 2(b), cl 2(a)(i) is only concerned with the threshold issue of whether the claimant is an earner and is not concerned with whether a person had actually received any earnings from employment or self-employment before the accident. Schedule 1, cl 2(a)(i) is only concerned with whether the person was “employed or self-employed” at any time during the 8 week period before the accident. Accordingly, where the claimant commenced the Contract for the provision of services as a self-employed person on 20 April 2023, she became self-employed from that commencement date even if, as at the day of the accident, she was yet to receive income from that self-employment.

The claimant may perceive an unfairness if she is an earner under cl 2(a) and not cl 2(b) on the basis the contract had only recently commenced and she had not yet gained momentum in the work and as a result had not, in turn, generated any or any significant earnings before the accident. However, as stated by Harrison AsJ in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 at [70] “…one cannot construe an [A]ct to accommodate a particular circumstance, no matter how unfair that circumstance may be”.
The evidence establishes on balance that the claimant was self-employed during the eight week period before the accident by reason of commencing the Contract with The MAS Agency on 20 April 2023. Accordingly, I conclude the claimant meets the definition of an earner pursuant to Schedule 1, cl 2(a)(i).

PAWE

As I have concluded the claimant is not an earner under Schedule 1, cl 2(b) the claimant’s PAWE does not fall under Schedule 1, cl 4(2)(c) of the MAI Act. The claimant’s PAWE falls under Schedule 1, cl 4(1) or potentially cl 4(2)(a).
I have not been provided with sufficient information to determine whether cl 4(1) or 4(2)(a) applies or the amount of PAWE under either. As noted, the claimant has not provided complete bank statements for the relevant period. I have been provided with part of bank statement number 27 which is said to be a 19 page statement for the period 9 March 2022 to 8 September 2022. However, I have only been provided with the first three pages up to 13 June 2022. I have been provided with part of bank statement number 28 which is said to be a 14 page statement for the period 9 September 2022 to 18 March 2023. However, I have only been provided with the first three pages up to 19 September 2022. I surmise from the documents that the insurer has a complete copy of statements 27 and 28 for the period 9 March 2022 to 18 March 2023 but no statements for any period thereafter.
In any event, this dispute concerns only the threshold issue as to whether the claimant is an earner within the meaning in the MAI Act.
Going forward, the parties should now resolve between them the question of the claimant’s PAWE on the basis she is an earner under cl 2(a)(i) and if a dispute about this arises, the claimant may request an internal review and in turn, a merit review about the PAWE amount.
The onus is on the claimant to establish whether her PAWE falls under cl 4(1) or cl 4(2)(a) and the PAWE amount. For this purpose, the claimant ought to at least provide complete bank statements that include the current missing period 19 March 2023 to 12 May 2023 together with any invoices issued to The MAS Agency to date. The claimant should also provide to the insurer a copy of her 2023 tax return.
Given the payment regime under the contract with The MAS Agency, if the claimant is assessed as being entitled to weekly statutory benefits by reason of being an earner under cl 2(a)(i) the insurer should also require ongoing bank statements to determine whether any income was received from The MAS Agency (or any other source) after the accident. This is of course relevant to whether there has been any loss of earnings. Enquiries might also be made by the insurer with The MAS Agency and/or the claimant’s accountant.

CONCLUSION

For the reasons set out above I have determined that the claimant is not an earner within the meaning of Schedule 1, cl 2(b) of the MAI Act. However, I have determined she is an earner under cl 2(a)(i).
This dispute is about whether the claimant is an earner. It follows from my conclusions above that the reviewable decision that the claimant is not an earner is set aside and, in its place, the claimant is determined to be an earner under Schedule 1, cl 2(a)(i).
On the current evidence, PAWE would appear to be nil (noting that it follows from this decision that Schedule 1, cl 4(2)(c) does not apply). Accordingly, the claimant ought to provide further evidence to the insurer including complete bank statements that extend at least until the date of the accident on 12 May 2023 so that the insurer can make a PAWE decision under Schedule 1, cl 4. I do not make any directions about this. It is a matter for the claimant to provide the relevant information, noting the claimant has the burden of proof and also an obligation under the MAI Act to give full disclosure to the insurer of all relevant information. The insurer may also request relevant information and if so, the claimant has a duty under the MAI Act to co-operate with any reasonable request by the insurer for further information or documents.
For the reasons set out above, the reviewable decision is:
(a) set aside; and
(b) the claimant is determined to be an earner under Schedule 1, cl 2(a)(i).

LEGISLATION AND GUIDELINES

In making this decision, I have considered the following:
· the Application, Reply and supporting documentation;
· the MAI Act;

· the Motor Accident Guidelines, and
· Motor Accident Injuries Regulation 2017.

[2023] NSWPICMR 58

29 November 2023