Haouli v Insurance Australia Limited t/as NRMA Insurance

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
Citation:	Haouli v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPICMR 26
ClaimanT:	Spiro Haouli
Insurer:	Insurance Australia Limited t/as NRMA Insurance
Merit Reviewer:	Brett Williams
DATE OF DECISION:	21 April 2023
CATCHWORDS:	MOTOR ACCIDENTS- Motor Accident Injuries Act 2017; determination of pre-accident weekly earnings (PAWE) in accordance with Schedule 1 clause 4; where there was a gap in earnings in the 12 months prior to the accident due to Covid-19 lockdown; claimant earning at the time of the accident; claimant argues PAWE should be determined in accordance with Schedule 1 clause 4(2)(a) or, in the alternative, clauses 4(2)(b) and (3); insurer argues PAWE should be determined under Schedule 1 clause 4(1); Mackary v Allianz Australia Insurance Limited, Conde v IAG, Wannous v QBE Insurance (Australia) Limited and Allianz Insurance Australia Limited v Shahmiri considered; Held – the term ‘earnings circumstances’, as used in Schedule 1 clause 4(3), refers to circumstances involving an earner who is earning at the time the change in circumstances occurs; if the earner is not earning, there are no ‘earnings circumstances’, and the sub-clause does not apply; as the claimant was not earning at the time he returned to work, there was no change in ‘earnings circumstances’ and Schedule 1 clause 4(3) did not apply; that an individual was not earning because they were in lockdown is a relevant fact when determining which sub-clause in clause 4 applies, but it is one fact to be taken into consideration together with all other relevant facts; PAWE to be determined in accordance with clause 4(2)(a); insurer’s decision set aside and remitted back to insurer to determine entitlements.
Determinations made:	CERTIFICATE OF DETERMINATION 1. The insurer’s decision of 16 November 2022 is set aside. 2. The matter is remitted to the insurer to determine the claimant’s entitlements under Division 3.3 of the Motor Accident Injuries Act 2017 in accordance with these reasons. 3. The claimant is entitled to recover from the insurer his reasonable and necessary costs incurred in connection with the proceedings.

STATEMENT OF REASONS

BACKGROUND

Spiro Haouli (claimant) was injured in a motor accident on 28 May 2022. Following the accident he made a claim for statutory benefits under the Motor Accident Injuries Act 2017 (MAI Act) on Insurance Australia Limited t/as NRMA Insurance (insurer).
Liability to pay statutory benefits for up to 26 weeks was admitted by the insurer[1], as was liability to pay statutory benefits after 26 weeks[2].
[1] Liability notice dated 24 June 2022.
[2] Liability notice dated 30 August 2022.
On 2 August 2022, the insurer determined that the claimant’s pre-accident weekly earnings (PAWE) were $1,527.32. The claimant sought an internal review of that decision. On 16 November 2022, an internal reviewer made a decision in substitution of the insurer’s PAWE decision, determining that the claimant’s PAWE was $942.31. The parties agree that the internal reviewer’s decision is the ‘reviewable decision’[3] in these proceedings.
[3] See Division 7.4 MAI Act.
The claimant continues to dispute the basis upon which the insurer has determined his PAWE should be calculated under Sch 1 cl 4 of the MAI Act (the dispute). These proceedings were commenced by the claimant on 23 December 2022. The dispute falls within the terms of Sch 2 cl1(a) of the MAI Act, and is a merit review matter.
In short, the claimant argues that his PAWE should be determined in accordance with Sch 1 cl 4(2)(a) or, in the alternative, cls 4(2)(b) and (3).
The insurer’s case is that the claimant’s PAWE should be determined under Sch 1 cl 4(1) of the MAI Act.

STATUTORY FRAMEWORK

The claimant’s entitlement to weekly payments of statutory benefits is determined in accordance with the provisions found in Division 3.3 of the MAI Act.
Schedule 1 of the MAI Act contains definitions relating to earnings for the purposes of weekly payments of statutory benefits under Division 3.3. The Schedule includes definitions of ‘earner’, ‘loss of earnings’, and ‘pre-accident weekly earnings’. As has been noted in other decisions of the Commission, there is no definition of ‘earnings’.
The focus of the dispute in these proceedings is the definition of ‘pre-accident weekly earnings’ contained in Sch 1 cl 4. That clause is in the following terms:
“4 Meaning of ‘pre-accident weekly earnings’—general
(1)     Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.
(2)     In the following cases, pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means—
(a) if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months—the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,
(a1) if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period—the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,
(b) if subclause (3) applies—the weekly average of the gross earnings the earner received as an earner, or could reasonably have been expected to receive, during the 12 months after the change of circumstance referred to in the subclause occurred,
(c) if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person—the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.
(2A) The pre-accident period, in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.
(3)     This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred.
Note—
Examples of a change of circumstances to which this subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards.
(4)     For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.”

EVIDENCE

The parties have provided a joint bundle that contains all material they rely on in the proceedings. I have considered that material. Among other material, the bundle includes a statement from the claimant dated 15 February 2023 and written submissions. As will be seen, facts critical to the resolution of the dispute are agreed.
The claimant’s statement dated 15 February 2023 records, relevantly, that prior to the accident he was self-employed as a boilermaker and primarily worked at Sydney Airport. He states that due to the COVID-19 lockdowns, he ceased working on 21 July 2021. He was not able to return to any type of work until 6 October 2021. During this period, he was not earning an income, and received a COVID-19 supplement.
The claimant states that had it not been for the COVID-19 lockdowns, he would have been working and earning his average weekly income between 21 July 2021 and 6 October 2021.

SUBMISSIONS

Claimant’s submissions

The claimant relies on written submissions dated 23 February 2023. He submits that on a clear reading of Sch. 1 cl4(2) sub-cl 4(2)(a) applies. He argues that, in accordance with sub-cl 4(2)(a), on the day of the motor accident he was ‘earning continuously’, but had not been ‘earning continuously for at least 12 months’. This, it is submitted, is because there was a significant hiatus in his earnings due to the requirement to obey lockdown laws and stop working. For the purposes of sub-cl 4(2)(a), he argues that the weekly average of the gross earnings received by him as an earner during the period from when he started to earn continuously to immediately before the day of the motor accident, should have been used.
With respect to cl 4(3), he argues that, whilst examples are given in the note to the subclause, the list of examples is non-exhaustive. In his submission, applying the clear words of cl 4(3), returning to active work after a Covid lockdown is an ‘action taken by the earner’ which results in the earner becoming entitled to earn more than he was earning before that action occurred.
The claimant argues that at the time of the accident he was ‘earning continuously’, and had been since returning to self-employment work from lockdowns in or about October 2022. Those earnings, in his submission, were likely to continue.
The claimant submits that to the extent that a similar argument to those he seeks to mount in these proceedings was rejected in Mackary v Allianz Australia Insurance Limited [2022] NSWPICMR 35 (Mackary), and Conde v IAG [2022] NSWPICMR 28 (Conde), those cases were wrongly decided, and/or the point taken in these proceedings was not argued in those cases. In oral submissions the claimant argued that these decisions were not binding on me, and were not persuasive.
It is convenient to record at this point that the facts and circumstances in Conde were different to those in these proceedings. In that case the claimant was not earning on the day of the accident, and had not earned for some five months prior to the accident[4]. On those facts, cl 4(2)(a) could not have been engaged; the claimant was not, on the day of the motor accident, earning continuously. Likewise, Mackary turned on the facts found in that case. It was found that the claimant had been earning continuously in his business for at least 12 months. Accordingly, it was found that cl 4(2)(a) did not apply.[5]
[4] Conde at [16].
[5] Mackary at [14].
During the course of the hearing, the insurer’s solicitor agreed with the proposition that, with respect to Sch 1 cl 4, there is no “COVID rule” on the face of the provisions. That is, cl 4 does not state, in terms, that if an earner is not earning due to the imposition of a lockdown, that “fact” is determinative in terms of how that clause is applied. If an individual did not earn income because they were in lockdown, that is a relevant fact. But that fact has to be taken into consideration together with other relevant facts that are found. And clause 4 is to be applied to the facts that are found.
I also observe that, while there were no modifications to the MAI Act similar to those made to the Workers Compensation Act 1987 (WC Act) by the Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020 (Covid regulation), the provisions in the WC Act that do similar work to Sch 1 cl 4 in the MAI Act, are in different terms. And there are no provisions in the WC Act that are in the same terms as Sch 1 cl 4(2) – (4).[6] That may explain why the Covid regulation was required, and no similar amendment made to the MAI Act.
[6] See WC Act Sch 3
It is argued that the merit reviewer in Mackary took an overly narrow view of the words in cl 4(3) and the reference to ‘action taken by the claimant’. It is submitted that the statement in that decision that “[w]hilst it is expected that the claimant’s earnings would likely increase post lockdown as compared to during lockdown this is not the result of an action taken by the claimant”, is logically and literally incorrect.
The claimant argues that the lockdown may have forced him to stop working and earning, but the lifting of lockdowns did not force or compel him to re-commence working. He had to choose or elect to do so, and thus took an ‘action’ which resulted in him recommencing earning after a period of ceasing to earn. It is argued that, applying the clear words of cl 4(3), returning to active work after a Covid lockdown is an ‘action taken by the earner’ which results in the earner becoming entitled to earn more than he was earning before that action occurred. I agree with this submission. However, as will be seen, I do not agree that cl 4(3) (and therefore cl 4(2)(b)) applies on the facts.
The claimant submits that his case can be distinguished from Allianz Insurance Australia Limited v Shahmiri (Shahmiri). He argues that in Shahmiri, both parties agreed that the case fell to be decided under Sch 1 cl 4(1), and the claimant did not seek to argue that cl 4(2) was engaged. Thus, the claimant submits, the court’s decision rested on giving cl 4(1) its literal and proper meaning, which could not be construed to accommodate a Covid related hiatus in working.
The claimant submits that on a clear reading of Sch 1 cl4(2), sub-cl 4(2)(a) is applicable. He argues that, in accordance with cl 4(2)(a), on the day of the motor accident, he was ‘earning continuously’, but had not been ‘earning continuously’ for at least 12 months, because there was a significant hiatus in his earnings due to his requirement to obey lockdown laws and stop working.
The claimant also submits that Sch 1 cl 4(3) is relevant and applicable to a Covid related hiatus from work on a plain reading of the words of that sub-clause.
With respect to Shahmiri, the claimant argues that the decision was not binding with respect to the application of Sch 1 cl 4(2), (3), and (4). This is because, it was argued, Shahmiri only involved Sch 1 cl 4(1), and the other subclauses were considered “as an afterthought” or obiter dicta.
It was argued that cl 4(1) applies unless one of the “exceptions” in cl 4(2) applies, and that the purpose of sub-cl (2)(a) is to arrive at a fair figure. It was submitted that the “exceptions” clearly exist to address situations where it would be unfair to simply apply cl 4(1).
The claimant reiterated his submission that, with respect to cl 4(3), the term ‘as a result of any action taken by the earner’ included the claimant’s decision to resume his business after the lockdown was lifted. He argued that he had a choice as to whether or not he returned to work and he made the choice to do so; he wasn’t forced to, and he didn’t have to. In this context, it was submitted that the reasons to the contrary given in Wannous v QBE Insurance (Australia) Limited [2023] NSWPICMR 11 (Wannous), at [21]-[22], were wrong.
Wannous involved a claimant who had worked for a brief period early in the 12 months prior to the accident, ceased working and earning between July and December 2021 because of the Covid lockdown, and resumed working and earning after the lockdown was lifted. The claimant argued, and the insurer accepted, that on those facts, the claimant’s PAWE was to be determined in accordance with Sch 1 cl 4(2)(a). On the basis of the insurer’s “concession”, the merit reviewer in Wannous determined the claimant’s PAWE in accordance with cl 4(2)(a).[7]
[7] Wannous at [30].
In these proceedings, the claimant argued that, on the facts, his PAWE should be determined in accordance with cl 4(2)(a) or, in the alternative, cl 4(2)(b), the latter on the basis that cl 4(3) was engaged.
I will address the claimant’s submissions in relation to costs later in these reasons.

Insurer’s submissions

The insurer relies on written submissions dated 9 March 2023. The insurer’s submissions record that the parties agree the claimant is an earner in accordance with Sch 1 cl 2 of the MAI Act.
The insurer argues that the issues raised by the claimant were resolved in Shahmiri. The insurer submits that Sch 1 cl 4(2) does not apply to the claim because the claimant did not first earn as an earner less than 12 months prior to the accident. It is argued that between 28 May 2021 and July 2021, the claimant clearly ‘earned as an earner’. However, as I discuss later in these reasons, if this period were taken on its own in the 12 months prior to the accident, the claimant would not satisfy the definition of ‘earner’ in Sch 1 cl 2.
The submissions record that there was a period of disruption between July and October 2021, after which the claimant continued to ‘earn as an earner’ through until the date of accident.
It is argued that cl 4(2)(a1) would not apply as it required an absence of earnings from any source during the pre-accident period of two years prior to the motor vehicle accident.
The insurer submits that cl 4(3) is not applicable as there was no specific action taken by the claimant which resulted in a significant change in his earnings. It is argued that a return to work at the conclusion of the COVID-19 lockdown would not come within that definition.
The insurer argues that, in taking into account the full 52 week period when it determined PAWE, it correctly applied cl 4(1).
It is submitted that there is nothing within the claimant’s submissions that would suggest any error on the part of the insurer in its calculation of the claimant’s net business profit.
The insurer argues that the claimant’s submission that:
“[48] In accordance with 4(2)(a) on the day of the motor accident, [he] was ‘earning continuously’, but had not been ‘earning continuously’ for at least 12 months, because there was a significant hiatus to those earnings due to his requirement to obey lockdown laws and stop working.”
would appear to be contrary to the findings of the court in Shahmiri, in particular at [68].
In oral submissions, the insurer argued that if the circumstances of a claim fall within the terms of cl 4(1), the other subclauses in cl 4 do not arise for consideration. Because, in the 12 month period before the accident, the insurer argued that the claimant had been earning as an earner, cl 4(1) applied. It was submitted that the particular sub-clauses in cl 4 cannot be considered in isolation because they are all intertwined. It was argued that cl 4(2) would apply in situations where, for example, a person didn’t have a job within the full 12 month period, and obtained a position prior to the accident.
It was argued that cl 4(3) reflects a consideration that it would be manifestly unfair for earnings to be average over a 12 month period in circumstances where a claimant had secured a new job with a significant pay rise.
To the extent that the application of cl 4(1) produced “inherent unfairness”, the insurer argued that Parliament had not taken steps to address the unfairness, and any unfairness must be considered to be intentional. To the extent relevant to this submission, I have addressed the changes made to the WC Act by the Covid regulation earlier in these reasons.
In short, the insurer’s primary submission was that, if a claimant fell within cl 4(1), the other sub-clauses in cl 4 do not apply.

DETERMINATION

The dispute in these proceedings is about the basis upon which the claimant’s PAWE is to be determined under Sch 1 cl 4 of the MAI Act. The case must turn on its own facts.
In these proceedings the following facts are agreed, and I find:
(a)    the claimant worked as a self-employed boilermaker during the period 28 May 2021 until 20 July 2021;
(b)    between 21 July 2021 and 6 October 2021 the claimant did not work;
(c)    during the period 21 July 2021 and 6 October 2021 the claimant was in receipt of Covid disaster payments, and
(d)    during the period 7 October 2021 and 27 May 2022 the claimant worked as a self-employed boilermaker.

There is no dispute that, during the periods he was working as a self-employed boilermaker, the claimant received earnings. Those earnings were derived from his personal exertion, and are ‘earnings’ for the purposes of the MAI Act.
Nor is there a dispute that the claimant was not receiving ‘earnings’ during the period 21 July 2021 and 6 October 2021. In this period he received payments from the Government. Neither party sought to argue that those payments constituted ‘earnings’ for the purposes of the MAI Act. Accordingly, I find that the claimant was not earning during the period 21 July 2021 and 6 October 2021.
I find that from 7 October 2021 the claimant was earning continuously. His earnings records support a finding that he was obtaining earnings from a source that, on the day of the accident, was likely to continue for a period of at least six months to provide earnings to him on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.
I do not accept the insurer’s submission that, when determining PAWE, the starting point is cl 4(1), and that if the claimant falls within that sub-clause, the other sub-clauses in cl 4 cannot apply to the claim. I have reached this conclusion because cl 4(1) states that PAWE is determined in accordance with that subclause “unless subclause (2) applies”. Further, cl 4(2) commences with the words “[i]n the following cases, pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means…”. In my opinion, this language makes it clear that if the circumstances of a claim come within any of the sub-clauses that follow, PAWE is determined in accordance with that sub-clause. In all other cases, PAWE is determined in accordance with cl 4(1).

Shahmiri

The insurer argues that Shahmiri applies to the circumstances of this case and should be followed. The claimant’s position is that it is distinguishable on the facts. In Shahmiri the Court was dealing with the construction of cl 4(1). I am bound by the decision as it relates to the construction of that clause.
In Shahmiri, there was no dispute between the parties as to whether one of the other sub-clauses in cl 4 applied. In this regard, at [59], it is recorded that “[t]he parties agree that the first defendant’s weekly payments are to be determined in accordance with cl 4(1), but disagree on that clauses’ proper construction.”
At [48] Harrison AsJ recorded the insurer’s submission that “…the potential unfairness of giving literal effect to cl 4(1) for a person who was in "continuous employment" at the time of the accident, but had not been in employment for the whole of the 12 months preceding the accident, is cured by cls 4(2)(a) and 4(4).” At [68] Her Honour said as follows:
“[68] Turning specifically to subclause 4(2)(a). This subclause applies to claimants who were earning continuously at the date of their accident but not for at least 12 months and specifies that the period over which their earnings are to be averaged is only that from when they began to earn continuously until the date of the accident…”
Harrison AsJ found as follows at [61]:
“[61] The first defendant falls within the ambit of sch 1 cl 2(a) of the MAIA as he was injured as a result of a motor accident, is over 15 years of age, was employed for 29 of the 52 weeks of the year immediately preceding the accident and had not permanently retired at the date of the accident. The wording of cl 2, in my opinion, makes it plain that once it is established that a claimant fits within the definition of an earner, they are to be considered an earner at all material times during the pre-accident period, even if they are not earning for the entirety of that period.”
These findings were made in the context of cl 4(1). The interplay between the definition of ‘earner’ and sub-cl 4(2)(a) was not addressed on my reading of the decision. If I proceed on the basis that the claimant was an ‘earner’ at all material times during the pre-accident period, arguably that does not prevent sub-cl 2(a) from applying. That is because cl 4(2)(a) employs a different test to cl 4(1). That test introduces the term ‘earning continuously’. I will return to this term shortly.
A further matter that I have taken into consideration in terms of the ‘earner’ issue is that the period between 28 May 2021 and 20 July 2021, during which the claimant was self-employed, amounts to 7.57 weeks. If this period were taken on its own in the 12 months prior to the accident, the claimant would not satisfy the definition of ‘earner’ in Sch 1 cl 2.

It is only when his self-employment from 7 October 2021 is taken into account that the definition is satisfied.
Because he was unemployed on the day of the accident with respect to which his claim related, Mr Shahmiri could not rely on sub-cl 4(2)(a), as that clause commences with the words “if, on the day of the motor accident, the earner was earning continuously”. Unlike Mr Shahmiri, the claimant in these proceedings was working on the day of the accident. As a result, he satisfies that requirement.
The claimant submitted at the hearing that the idea that an earner is an earner at all times, even when they're not earning, “might be fine for [cl4(1)], but when you come to [cl4(2)], there's a new concept of earning continuously, which means actually obtaining earnings”.
Clause 4(2)(a) is in different terms, and addresses different circumstances, to cl 4(1). It imposes a different test, and introduces the term ‘earning continuously’. That term has to be applied to the facts of the claim under consideration. The term ‘earning continuously’ is not used in cl 4(1). Its meaning is not considered in Shahmiri.
Because the facts in these proceedings are different to those in Shahmiri, in particular the claimant in these proceedings was, on the day of the accident earning continuously, and because the Court’s attention was focused on the operation of cl 4(1) and the application of that clause to the facts in that case, I have concluded that the claimant in these proceedings is not precluded from relying on sub-cl 4(2)(a) as a result of Shahmiri.

Sub-clause 4(3) does not apply

Schedule 1 cl 4(3) provides that if, during the 12 months immediately before the day of the accident, there was, as a result of any action taken by an earner, a significant change in their earnings circumstances that resulted in them regularly earning, or becoming entitled to earn, more on a weekly basis than they were earning before the change occurred.
The note to Sch1 cl 4(3) states that “[e]xamples of a change of circumstances to which th[e] subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards.” The examples in the note are non-exhaustive. There may be other changes of circumstances to which the sub-clause would apply. That being said, what the examples have in common is that they all involve circumstances in which an earner has been earning. None of the examples involve circumstances where an earner goes from earning nothing to earning something. Accordingly, I find that the term ‘earnings circumstances’, as used in Sch1 cl 4(3), refers to circumstances involving an earner who is earning at the time the change in circumstances occurs. If the earner is not earning, there are no ‘earnings circumstances’, and the sub-clause does not apply. Put another way, for there to be ‘earnings circumstances’ there must be earnings.
In this case, between 21 July 2021 and 6 October 2021 the claimant was not working. Nor was he earning. When he returned to work after 6 October 2021, there was a change in circumstances, in that he went from receiving no earnings to receiving earnings. I accept that the change was a result of action taken by the claimant, namely returning to work as a self-employed boilermaker. I accept the claimant’s submission that he had a choice as to whether or not he returned to work and he made the choice to do so. I agree that he wasn’t forced to, and didn’t have to, return to work.
However, in my view there was no change in ‘earnings circumstances’, as the claimant was not earning immediately before he returned to work after 6 October 2021, and had not been earning since 21 July 2021. That being the case, Sch1 cl 4(3) does not apply.

Sub-clause 4(2)(a)

I find that on the day of the accident the claimant was earning continuously. He had been in receipt of earnings from his work as a self-employed boilermaker since returning to that work after 6 October 2021, when the Covid lockdown was lifted.
During the period 21 July 2021 and 6 October 2021 the claimant was neither working nor earning. He was, however, both working and earning during the period 28 May 2021 until 20 July 2021. The relevance of this period is that it commences 12 months prior to the date of the accident.
There is no provision that states, in terms, that if an individual is not earning due to a Covid lockdown, they cannot bring themselves within a sub-clause in cl 4 other than sub-cl 4(1). That an individual was not earning because they were in lockdown is a relevant fact when determining which sub-clause in cl 4 applies. But it is one fact to be taken into consideration together with all other relevant facts.
I find that on the day of the accident the claimant had not been earning continuously for at least 12 months. This is because he was not earning during the period 21 July 2021 and 6 October 2021. He started to earn continuously from 7 October 2021. That being the case, I find that the claimant’s PAWE is to be determined in accordance with cl 4(2)(a).

CONCLUSION

The claimant’s PAWE is to be determined in accordance with Sch 1 cl 4(2)(a) of the MAI Act.
The insurer’s decision of 16 November 2022 is set aside.
The parties agreed that if I set aside the insurer’s decision about the claimant’s PAWE, I should remit the matter to the insurer to make a decision in accordance with my reasons. I consider that to be the appropriate course to take.
I remit the matter to the insurer to determine the claimant’s entitlements under Div 3.3 of the MAI Act in accordance with these reasons.

COSTS

The dispute about the claimant’s PAWE is a merit review matter, falling within the terms of Sch 2 cl1(a). No costs are payable to the claimant under the regulations in relation to a dispute of this nature.
At the hearing I raised the question of costs with the parties. The claimant sought an order that the insurer pay his costs in accordance with s 8.10(4)(b) of the MAI Act (costs application). That provision states, relevantly, that the Commission can permit payment of legal costs incurred by a claimant but only if satisfied that exceptional circumstances exist that justify payment of legal costs incurred by the claimant.
The insurer opposed an order under s 8.10(4)(b). Accordingly, there is a costs dispute.
I raised with the parties at the hearing that I was determining the PAWE dispute in my capacity as a merit reviewer. While a merit reviewer is not the Commission, a senior member is: see ss 8, 31, 32 and 34 Personal Injury Commission Act 2020 and Allianz Australia Insurance Limited v Rymer [2022] NSWPICMRP 6 at [9]-[23]. Because a merit reviewer is not the Commission, I cannot allow costs under s 8.10 in that capacity. However, I informed the parties that I would determine the costs application in my capacity as a member of the Commission. I am satisfied that to do so will facilitate the just, quick and cost effective resolution of the costs dispute. If I do not take this course a separate application will need to be filed, and either I or another member will be required to determine the costs dispute. This would result in additional time being expended, and costs incurred, by the parties.
Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional: Ho v Professional Services Review Committee No 295 [2007] FCA 388 at [26], and San v Rumble (No 2) [2007] NSWCA 259 at [67].
I am satisfied that exceptional circumstances exist that justify payment by the insurer of the reasonable legal costs incurred by the claimant in connection with these proceedings. I find that, when taken together, the following circumstances constitute ‘exceptional circumstances’ for the purposes of s 8.10(4)(b) of the MAI Act:
(a)    the nature of the legal issues in the proceedings, including issues that arose in connection with decisions of the Commission and a decision of the Supreme Court, together with the applicable statutory provisions;
(b)    the work involved in the preparation of written submissions, and the matters addressed in those submissions;
(c)    the preparation required by the parties in connection with the hearing;
(d)    that the issues were, for a merit review matter, of such complexity that both parties were represented by very experienced practitioners, and
(e)    a hearing was required, as opposed to the proceedings being determined on the papers. This is not the usual course for a merit review matter.
In these circumstances, the Commission permits the payment by the insurer of the legal costs incurred by the claimant in connection with these proceedings in accordance with s 8.10(4)(b) of the MAI Act.
If they cannot be agreed, the parties can take appropriate steps to have the quantum of the costs determined.

[2023] NSWPICMR 26

21 April 2023