Hayes v GIO

The matter of Hayes v GIO came before the court for a merit review of the insurer's decision regarding the payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (MAI Act). The claimant, Hayes, sought to challenge the insurer's calculation of his pre-accident weekly earnings (PAWE), arguing that the insurer had not properly accounted for his ongoing business expenses. Specifically, Hayes contended that only costs of materials and wages should be deducted from the gross earnings of his business, while all other operating expenses should not be deducted since he would continue to incur them despite being incapacitated.

The central legal issue before the court was whether the PAWE for a self-employed individual should be calculated based on the gross income of the business after deducting certain expenses, or the net income of the business after deducting all business expenses but before tax. This question required interpretation of the relevant provisions of the MAI Act, particularly Schedule 1, clause 4, which defines PAWE. The court had to consider whether operating costs should be included in the calculation of PAWE and how these costs should be treated under the Act.

The court determined that the insurer's approach was consistent with the proper interpretation of the MAI Act. It held that for the purpose of calculating PAWE, the income from the business of a self-employed individual should be the net income after deducting all business expenses, including operating costs, but before tax. The court reasoned that this interpretation aligned with the statutory definition of PAWE and proper accounting conventions. The claimant's argument that operating costs should not be deducted because they would continue to be incurred despite his incapacity was rejected. The court affirmed the insurer's decision, finding that the calculation of PAWE based on net business income was in accordance with the Act.

The court's decision resulted in the affirmation of the insurer's internal review decision, which had denied the claimant's request for a higher weekly benefit payment. The claimant's application for a merit review was dismissed, and the original decision stood.