Iskandar v Insurance Australia Limited t/as NRMA Insurance

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	Iskandar v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMR 11
CLAIMANT:	Sarkis Iskandar
INSURER:	Insurance Australia Limited t/as NRMA Insurance
MERIT REVIEWER:	Brett Williams
DATE OF DECISION:	12 June 2024
CATCHWORDS:	MOTOR ACCIDENTS - Merit review; determination of pre-accident weekly earnings (PAWE) in accordance with schedule 1 clause 4(1) of the Motor Accident Injuries Act 2017; claimant self-employed; agreed that he is an “earner”; meaning of “gross earnings received by an earner as an earner”; ABZ v QBE Insurance (Australia) Ltd, ACL v CIC Allianz Insurance Limited, ABQ v NRMA Insurance, ADP v CIC Allianz, AGZ v NRMA Insurance Pty Ltd, AHS v Allianz Australia Ltd, AOL v QBE Insurance, Shahmiri v Allianz Australia Insurance Limited, Brewer v Insurance Australia t/as NRMA, Aktop v Allianz Insurance, Glover v GIO, Le v Insurance Australia Limited t/as NRMA Insurance, Walker v QBE Insurance (Australia) Limited, Nezovic v Minister for Immigration & Multicultural & Indigenous Affairs (No2) considered; Project Blue Sky v Australian Broadcasting Authority, Thiess v Collector of Customs, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue, Allianz Insurance Australia Limited v Shahmiri applied; Held – “gross” means “gross” not “net”; “the gross earnings received by an earner as an earner during the 12 months immediately before the day on which the motor accident occurred” means the whole of the income, without any deduction, received by an earner in return for labour or services provided by them; decision in substitution made.
DETERMINATIONS MADE:	CERTIFICATE 1. The insurer’s decision of 11 March 2024 is set aside. 2. For the purposes of Sch 1 cl 4(1) of the Motor Accident Injuries Act 2017, Mr Iskander’s pre-accident weekly earnings are $1,197.25. The date of effect is 11 March 2024.

STATEMENT OF REASONS

BACKGROUND

Sarkis Iskander was injured in a motor accident on 22 January 2024. On 21 February 2024 Insurance Australia Limited t/as NRMA Insurance (insurer) accepted his claim for statutory benefits under the Motor Accident Injuries Act 2017 (MAI Act) for 52 weeks from the date of the accident.
These proceedings involve a dispute between Mr Iskander and the insurer about

Mr Iskander’s pre-accident weekly earnings. There is no dispute that

Mr Iskander is an “earner” as defined by Sch 1 cl 2 of the MAI Act; at the time of the accident he was self-employed as a Pest Control Technician. On 11 March 2024 the insurer determined that Mr Iskander’s PAWE were $531.38. Mr Iskander disputes the insurer’s decision; he says his PAWE should be in the order of $1,500-$1,600.
The dispute is a merit review matter: Sch 2 cl 1(a) of the MAI Act. The decision under review is the insurer’s PAWE decision of 11 March 2024. As the dispute has been the subject of an internal review s 7.11(1) has been satisfied, and the Commission’s jurisdiction engaged.

STATUTORY FRAMEWORK

If the injury to a person results from a motor accident in this State, statutory benefits are payable in respect of the injury as provided by Part 3 of the MAI Act. Division 3.3 of Part 3 deals with weekly payments of statutory benefits. 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 ss 3.6 and 3.7 of the MAI Act.
Under both ss 3.6 and 3.7 “pre-accident weekly earnings” (PAWE) are used to determine the amount of weekly payments to which an injured person is entitled.
Definitions relating to earnings for the purposes of weekly payments of statutory benefits under Division 3.3 are contained in Sch 1 of the MAI Act.
The term “earner” is defined in Sch 1 cl 2 as follows:
“2 Meaning of ‘earner’
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).”
Schedule 1 cl 3 contains the following definition of “loss of earnings”:
“3   Meaning of ‘loss of earnings’
(1)    Loss of earnings means a loss incurred or likely to be incurred in a person’s income from personal exertion.
(2)    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.
(3)    A person’s income from personal exertion does not include—
(a)interest, unless the person’s principal business consists of the lending of money, or unless the interest is received in respect of a debt due to the person for goods supplied or services rendered by the person in the course of the person’s business, or
(b) rents or dividends, or
(c)any employer superannuation contributions, or
(d)the monetary amount of any annual, sick or other leave entitlement.”
The meaning of “pre-accident weekly earnings” is contained in Sch 1 cl 4, and is, relevantly, 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.”
There is no definition of “earnings” or “gross earnings” in the Act.

EVIDENCE

Mr Iskander’s application for personal injury benefits records that he is a self-employed Pest Control Technician, and that he was earning $6,600 a month at the time of the accident.
The liability notice dated 21 February 2024 states that Mr Iskander’s claim for statutory benefits has been accepted for 52 weeks from the date of the motor accident, and that he is entitled to weekly payments of statutory benefits for up to 52 weeks if he has experienced a loss of earnings because of the accident.
A certificate of capacity dated 6 February 2024 records that Mr Iskander suffered injury to his neck and back as a result of the accident. He was certified as having no capacity for work between 25 January 2024 and 28 January 2024, and capacity for some type of work between 29 January 2024 and 13 February 2024 eight hours a day five days a week.
There is a report of Mr Gwynne of PKF(NS) Forensic Accountants (PKF) dated

5 March 2024 (PKF Report). PKF determined that, on the basis of the records provided by the claimant, including the profit and loss statement for the period 22 January 2023 – 22 January 2024, the claimant’s earnings in that 52 week period were $27,632, resulting in PAWE of $531.38.
Annexure 1 to the PKF Report is a summary of the income and expenses of Mr Iskander’s business for the period 21 January 2023 – 21 January 2024. The summary discloses as follows:
·        total income  $76,963
·        cost of goods  $14,706
·        gross profit  $62,257
·        expenses  $34,625
·        earnings from self-employment                $27,632
The expenses include such things as advertising, bank fees, computer expenses, depreciation, tax expenses, insurance, motor vehicle expenses (insurance, fuel and registration), rent, software expenses, subscriptions, telephone and internet costs, tolls, parking and uniforms.
The insurer’s PAWE decision dated 11 March 2024 records that it calculated

Mr Iskander’s PAWE to be $531.38 on the basis of the methodology adopted by PKF in their report of 5 March 2024. On 26 March 2024 an internal reviewer affirmed the insurer’s PAWE decision.

SUBMISSIONS

Mr Iskander’s submissions

Mr Iskander’s case is that his PAWE should be determined on the basis of the gross income of his business, without any deduction to reflect business expenses. His application to the Commission records that he seeks the following outcome:
“A review for PAWE considering my expenses not only my net income so it can cover my work expenses as sole trader as car loan, work insurance, car insurance and other expenses payed [sic] on monthly bases [sic].”
Mr Iskander’s written submissions record that his business incurs fixed expenses that are not dependent on his turnover, including accounting costs, depreciation, work insurance, electricity, gas, motor vehicle insurance, motor vehicle registration, rent, software expenses, subscriptions, telephone and internet expenses.
Mr Iskander notes that there is no definition of “gross earnings”, and argues that “gross earnings” should be calculated on the basis of turnover or sales less the cost of goods, in his case chemicals. Mr Iskander questions the basis of the determination made in AHS v Allianz Australia Ltd [2019] NSWDRS MR 206, and has provided material that, in his submission, supports the methodology he says should be adopted to calculate his PAWE.
The material provided by Mr Iskander includes a document produced by MYOWNBUSINESS Institute titled “Costs: Fixed Costs, Variable Costs, and Volume”. The article addresses cost management, and provides examples of both fixed and variable costs.
Mr Iskander relies on an article titled “Gross earnings definition” dated 27 December 2023 published on The article states, among other things, that “[g]ross earnings refers to the total earnings of an individual, prior to deductions for income taxes and other taxes, as well as any deductions imposed by the employer”, and provides an example by reference to the earnings of an employee.
An article by Melissa Horton dated 3 December 2023 titled “Gross Income vs. Earned Income: What's the Difference?” published on is also relied on by Mr Iskander. Among other things, the article states that gross income is “all income an individual earns during the year both as a worker and as an investor”. The article states:
“Gross income includes all the income that constitutes earned income—namely, wages or salary, commissions, and bonuses, as well as business income net of expenses if the person is self-employed.”
Ms Horton’s article was evidently written for an American audience; it refers to “social security”, “alimony”, and “IRS regulations”, and is of limited assistance when it comes to the proper construction of Sch 1 cl 4(1). The same may be said for the other articles relied on by Mr Iskander.

The insurer’s submissions

The insurer argues that Mr Iskander’s PAWE is to be calculated in accordance with

Sch 1 cl 4(1) of the Act, on the basis of his weekly average gross earnings.
The insurer notes that “gross earnings” is not defined in the MAI Act, and that the Act does not refer to “gross business income” (i.e. before expenses) or “net business income” (i.e. after expenses). The insurer refers to AGZ v NRMA Insurance Pty Ltd [2019] NSWDRS MR 184 and AHS v Allianz, decisions where the phrase “gross earnings” has been interpreted to mean the net profit/income earned by a self-employed claimant after accounting for all business expenses incurred to run their business. The insurer also relies on the following decisions: ACL v CIC Allianz Insurance Limited [2018] NSWDRS MR 064; ABQ v NRMA Insurance [2018] NSWDRS MR 043; AGZ v NRMA Insurance Pty Ltd [2019] NSWDRS MR 184; Brewer v Insurance Australia t/as NRMA [2021] NSWPICMR 14 and Glover v GIO [2022] NSWPICMR 7.
The insurer relies on the PKF Report to support its determination that Mr Iskander’s PAWE are $531.38. This sum is arrived at by averaging over 52 weeks “earnings from self-employment” of $27,632.
The insurer argues that the conclusions contained in the PKF Report should be accepted as the reasoning provided is logical, reasonable, persuasive, and based on accounting principles.
The insurer was given, and declined, an opportunity to respond to the written submissions lodged by Mr Iskander in accordance with a direction made at the preliminary conference.

PREVIOUS DECISIONS – PAWE AND SELF-EMPLOYED EARNERS

As recorded above, the insurer has referred to a number of decisions it relies on to support the approach it has taken to determining Mr Iskander’s PAWE.
AGZ v NRMA Insurance Pty Ltd[1] involved a dispute about the PAWE of a self-employed carpenter. The Merit Reviewer determined that “gross earnings” meant net profit earned by a self-employed claimant after accounting for business expenses but before tax. The Merit Reviewer deducted expenses from the gross income of the business in order to calculate the PAWE. The reasons refer to the insurer’s reliance on a Guidance Note from the State Insurance Regulatory Authority (SIRA) that stated: “Weekly benefits during the first entitlement period refers to “...net income derived from a business...” (i.e. net business income) which is to be used to calculate PAWE”.
[1] [2019] NSWDRS MR 184.
AHS v Allianz Australia Ltd[2] was a decision about the PAWE of a claimant who operated both an entertainment business and a real estate business. In that case, the Merit Reviewer determined that “gross earnings” meant “income from earning capacity after deducting all business or work related expenses but before tax”. In this regard, the Merit Reviewer agreed with an “interpretation” provided by a forensic accountant in a report relied on by the insurer.
[2] [2019] NSWDRS MR 206.
ACL v CIC Allianz Insurance Limited[3] was a PAWE dispute involving a self-employed taxi driver. While the Merit Reviewer referred to the Oxford Dictionary definition of “earnings”,[4] they did not refer to the definition of “gross”. The Merit Reviewer determined at [18] that for a self-employed worker “earnings or the return for labour or services are the profits of the business – that is, income less expenses”.
[3] [2018] NSWDRS MR 64.
[4] “money obtained in return for labour or services”.
In ABQ v NRMA Insurance,[5] the Merit Reviewer determined that the PAWE of a self-employed hairdresser was to be determined on the basis of business income after all expenses of the business are accounted for, but before tax. The Merit Reviewer said this:
“[22] I do not accept the Claimant’s submission that her PAWE should be assessed on the basis of the gross takings of her business, before deducting expenses. The Claimant’s gross earnings received as an “earner” are derived from the income of her business, after accounting for business expenses including chair rent. That is, the Claimant’s earnings are the income she derives from the business, after all expenses of the business are accounted for, but before tax.
[23] An individual’s earnings from self employment do not include the expenses of the business required in order to generate those earnings. It seems clear that PKF (NS) Forensic Accountants required evidence of expenses to be able to calculate the Claimant’s personal earnings for the purpose of assessing her PAWE. This is because business expenses must first be deducted in any calculation of the Claimant’s personal earnings derived from her sole trader business. This approach is consistent with basic accounting principles. I note it is also consistent with the method of calculation in previous Merit Review decisions MA01/18 and MA06/18.”
[5] [2018] NSWDRS MR 43.
In Brewer v Insurance Australia t/as NRMA,[6] I determined that for the purposes of Sch 1 cl 4(2)(c) the average weekly gross earnings the claimant could reasonably have been expected to earn, but for the injury, under arrangements he had made to commence business as a self-employed martial arts trainer, required business expenses to be deducted from the likely income of the business. This case involved a different statutory test to that found in Sch 1 cl 4(1).
[6] [2021] NSWPICMR 14.
In Glover v GIO[7] the Merit Reviewer referred to dictionary definitions of “earning”, “earn” and “profit”, and reasoned that:
“[30] If earning equates to profit, then the term gross earnings has the same ordinary meaning as gross profits. That is, gross earnings are gross receipts (or income) less the immediate cost of production, or variable cost. It appears to me that gross earnings in the context of the self-employed is not net profit after accounting for all business expenses but before tax, as the insurer contends. In my view, this ordinary meaning of gross earnings supports the claimant’s submission that gross earnings should be interpreted as gross receipts less variable costs, or the immediate cost of production.”
[7] [2022] NSWPICMR 7.
There are other decisions, including those referred to below, that illustrate the divergent approaches taken by Merit Reviewers to determining the PAWE of self-employed earners.

The Merit Reviewer in ABZ v QBE Insurance (Australia) Ltd[8] was required to determine the PAWE of a self-employed bricklayer and beef farmer. The Merit Reviewer found at [19] that:
“…the cost of sales should be counted as expenses against the sales derived or ‘proceeds’ of a business carried on by the person when considering the Schedule1 definition of income from personal exertion…”
[8] [2018] NSWDRS MR 52.
The Merit Reviewer went on to say at [20] that gross earnings as an earner must take into account the cost of sales to arrive at a “Gross Profit figure”. While the Merit Reviewer proceeded to determine PAWE by deducting the cost of stock from the gross profits of the business, he did not deduct other business expenses including interest and motor vehicle costs.
ACT v AAI Limited trading as GIO[9] involved a self-employed taxi driver. In that case, it was determined that the claimant’s gross earnings did not include any amounts he received for GST, and that business expenses in connection with his self-employment were to be deducted from his total sales.
[9] [2018] NSWDRS MR 72.
In ADP v CIC Allianz,[10] a decision involving the PAWE of a self-employed “sub-contractor”, the Merit Reviewer determined that, in relation to self-employed workers, the term “gross earnings” in cl 4(1) refers to the net profit or the personal proceeds received by the self-employed earner after deducting business expenses and before taxation. The underlying rationale underpinning this approach was not addressed.
[10] [2019] NSWSIRADRS 93.
AOL v QBE Insurance[11] involved a dispute about the PAWE of a director and sole employee of a company. The Merit Reviewer noted that the term “gross earnings” was not defined in the MAI Act, and referred to the definition of “gross” in the Macquarie Dictionary: “whole, entire, or total, especially without having been subjected to deduction, as for charges, loss, etc.: gross profits”. The Merit Reviewer reasoned as follows:
“[58] A strict reading of clause 4.1 of Schedule 1, clearly dictates that calculation of the pre-accident weekly earnings requires consideration of ‘the weekly average of the gross earnings received by the earner as an earner’. This means that I must consider what the claimant as a self-employed earner, earned or received [sic] from his efforts, skills and labour when calculating his pre-accident weekly earnings. In the context of the present case, I do not consider that any provision of the Act allows for consideration of ‘net profits or the personal proceeds received by a self-employed earner after deducting business expenses but before taxation’ as submitted by the insurer. The intent of the Act is quite clear, in that the average gross earnings are to be used.
[59] I find that consideration of net profits or the proceeds from any business received after deducting business expenses, even if considered before tax has been applied to the proceeds or net profits, is inconsistent with the provisions of the Act. I find that the provision of the clause 4.1 of Schedule 1 is straightforward and it dictates that the weekly average of the gross earnings is to be included in the calculation of the claimant’s pre-accident weekly earnings.”
[11] [2020] NSWSIRADRS 179.
The Merit Reviewer went on to deduct the cost of goods sold from the total sales to determine the claimant’s PAWE.
Aktop v Allianz Insurance[12] involved a dispute about the PAWE of a self-employed taxi driver. The claimant argued that his gross earnings should not be net of business expenses. The insurer argued that the phrase “gross earnings” in the context of self-employed earners means the income under the control and at the disposal of the person from exercising their earning capacity after accounting for all business or work related expenses but before tax. The Merit Reviewer determined the claimant’s PAWE on the basis that the ordinary meaning of gross earnings is income adjusted for the cost of revenue, and the cost of revenue includes variable costs but not fixed costs. The Merit Reviewer reasoned as follows:
“[33]…the ordinary meaning of gross earnings is to be applied to the claimant because it gives effect to the purpose of compensating them for their economic loss. To interpret the expression as either of the parties have submitted do not do so because:
(a) The claimant would receive less than their economic loss if their income included adjustments for their fixed costs as the insurer submits. This is because the claimant would still be required to meet those fixed costs out of the statutory benefits that they receive from the insurer.
(b) The claimant would receive more than their economic loss if, as the claimant submits, no adjustments were made to their income. In this regard, I accept the insurer’s submission that not to adjust the claimant’s income for their variable expenses would leave the claimant in a better position than they would have been but for the accident. The statutory benefits that the claimant receives from the insurer would include an amount for variable costs that they would not have to meet.”
[12] [2021] NSWPICMR 33.
The Merit Reviewer considered, but did not follow, the approach taken to determining PAWE in ACL v CIC Allianz Insurance Limited.
In Le v Insurance Australia Limited t/as NRMA Insurance[13], a decision about the PAWE of a self-employed wardrobe installer, the Merit Reviewer found that “gross earnings” includes all relevant earnings less all business and work related expenses but before tax payable. At [40] the Merit Reviewer said this:
“I accept that there may be circumstances where a differing approach could be adopted. On the material before me I do not see any basis has been established as to why in the particular circumstances depreciation and interest should not be included as a business expense.”
[13] [2022] NSWPICMR 47.
In Walker v QBE Insurance (Australia) Limited[14], the reasons record the Merit Reviewer’s express disagreement with the approach taken in Aktop to determining PAWE. The Merit Reviewer determined that all business expenses, fixed and variable, are to be deducted from the gross income of the business for the purpose of calculating PAWE in the circumstances of self-employment. The Merit Reviewer said this at [22]:
“I do not agree with the claimant’s contention that only “variable costs” should be deducted, being only those expenses that would be incurred as part of the immediate supply of services. Regardless of the nature of the business expense, the claimant’s gross earnings as an “earner” can only be the net (but before tax) income of the business, after deducting all of the business expenses. That is to say, all business expenses must be deducted in order to calculate the claimant’s individual earnings from the business. Whilst there may be ongoing administrative, maintenance or other “fixed” expenses despite no work being carried out, this is irrelevant as PAWE is calculated based on pre-accident earnings, when the business was an ongoing concern and all expenses had to be paid to run the business.”
[14] [2023] NSWPICMR 40.
The Merit Reviewer said this about Aktop (and other decisions that followed the same approach):
“[26]It may be that the Merit Reviewer in Aktop was attempting to cure what might be perceived as an unfair position for small business owners on the face of the legislation where they continue to pay certain business expenses in order to hold on to a business even though they are not actively trading. However, as stated by Harrison AsJ in [Shahmiri] at [70], ‘one cannot construe an Act to accommodate a particular circumstance, no matter how unfair that circumstance may be’”.
The Merit Reviewer went on to say that:
“[30]… the quarantining of fixed costs from other business expenses for the purpose of calculating PAWE in relation to self-employment is likely to give rise to enrichment and is therefore inconsistent with the objects of the MAI Act.”
Taking into account the potential for “enrichment” might equally be considered an attempt to cure what might be perceived as an unfair outcome. The reasons did not include a reference to a relevant object of the MAI Act namely, to provide early and ongoing financial support for persons injured in motor accidents.

CONSIDERATION

At the preliminary conference held on 23 May 2024 Mr Iskander confirmed, and I accept, that: he was self-employed in the 52 weeks before the accident; he had a week off work after the accident and then returned to work; and he continues to work.
Although Mr Iskander has returned to work, his PAWE may become relevant at some time in the future.
Mr Iskander is an “earner” for the purposes of the MAI Act because he comes within the terms of Sch 1 cl 2(a); he was earning continuously as a self-employed Pest Control Technician in the 12 months immediately before the day on which the accident occurred.
I find, and the parties agree, that the summary of income and expenses in Annexure 1 to the PKF Report is accurate[15]; relevant financial records that underpin the summary are found in Annexure 2 to the PKF Report. The period with respect to which the summary relates[16] is, for the purposes of Sch 1 cl 4(1), the 12 months immediately before the day on which the accident occurred.
[15] At the preliminary conference held on 23 May 2024 Mr Iskander confirmed that the summary of income and expenses in Annexure A to the PKF Report is accurate.
[16] 21 January 2023-21 January 2024.
As none of the provisions in Sch 1 cl 4(2) are engaged, Mr Iskander’s PAWE are to be determined in accordance with Sch 1 cl 4(1) of the MAI Act. That being the case, his PAWE is the weekly average of the gross earnings received by him as an earner during the 12 months immediately before the day on which the accident occurred.
As illustrated by the decisions of the Dispute Resolution Service (DRS) and the Commission to which reference has been made earlier in these reasons, different approaches have been taken by Merit Reviewers to the interpretation of Sch 1 cl 4(1), and determining the PAWE of self-employed earners in accordance with that provision. To the extent that “accounting standards” or “basic accounting principles” are referred to in some of those decisions, neither the source nor the content of those standards have been identified.
The previous decisions of the DRS and the Commission do not establish any principle, and are not binding. However, previous decisions concerning the same legislative provision have strong persuasive authority on the interpretation to be placed on a provision.[17] Comity is a consideration that is as relevant to a decision maker in the Commission (such as a Merit Reviewer) as it is to a judge. In Nezovic v Minister for Immigration & Multicultural & Indigenous Affairs (No2) [2003] FCA 1263 French J said this:
“[52] … Judicial comity does not merely advance mutual politeness between judges of the same or co-ordinate jurisdictions. It supports the authority of the courts and confidence in the law by the value it places upon consistency in judicial decision-making and mutual respect between judges. Where questions of law and in particular statutory construction are concerned, the view that a judge who has taken one view of the law or a statute is ‘clearly wrong’ is not likely to be adopted having regard to the choices that so often confront the courts particularly in the area of statutory construction…”
[17] D Pearce, Statutory Interpretation in Australia (LexisNexis, 9th ed, 2019) 10.
Neither “gross earnings” nor “earnings” are defined in the MAI Act. This is unfortunate as these are critical terms in the statutory framework.
In Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28 (Project Blue Sky) at [69] the High Court said this:
“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.” (citations omitted)
In Shahmiri v Allianz Australia Insurance Limited [2021] NSWPICMRP 2 the majority sought to form the meaning of “earnings”, as that term is used in Sch 1 cl 4(1), from the definition of “loss of earnings” found in Sch 1 cl 3. The majority reasoned as follows:
“[25] Although cl. 3 defines the term ‘loss of earnings’, as opposed to ‘earnings’, so as to construe Division 3.3 and Schedule 1 in a cohesive way, it is appropriate to proceed on the basis that, as ‘loss of earnings’ means ‘a loss incurred or likely to be incurred in a person’s income from personal exertion’, ‘earnings’ should be taken to mean ‘a person’s income from personal exertion’. ‘A person’s income from personal exertion’ is income of the type referred to in Sch 1 sub-cl. 3(2) and excludes income of the type referred to in Sch 1 sub-cl. 3(3). In our view, this approach results in a construction of ‘earnings’ that is cohesive and consistent with the language and purpose of the statute.”
However, in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 (Shahmiri), Harrison AsJ determined that the meaning of the term “earnings” in Sch 1 cl 4(1) could not be derived from the definition of “loss of earnings” contained in Sch 1 cl 3 of the MAI Act: Shahmiri at [64]-[66]. Among the reasons given for this was that “loss of earnings” and “earnings” are not the same: Shahmiri at [65].
So what does the term “earnings” mean in the context of Sch 1 cl 4(1)?
In Thiess v Collector of Customs [2014] HCA 12 at [23], the High Court cautioned against making a fortress out of the dictionary.[18] However, while caution must be exercised, a dictionary definition may assist in establishing the meaning of a term that has not been defined in an Act.[19]
[18] Quoting Learned Hand J in Cabell v Markham 148 F 2d 737 at 739 (1945).
[19] Pearce (n17) 110-112.
I take “earn” to mean “to gain by labour or service”,[20] and “earnings”, as that term is used in Sch 1 cl 4(1), to mean income gained in return for labour or services provided by an earner. The meaning I have ascribed to “earnings” reflects the common usage and understanding of the term, and is consistent with the context in which it appears.
[20] Macquarie Dictionary (5th ed, 2009) ‘earn’ (def 1)
In Project Blue Sky the High Court said this:
“[71]Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume [43] Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".(citations omitted)
The words and expressions defined in Schedule 1 apply for the purposes of Division 3.3 of the MAI Act[21]. Division 3.3 deals with weekly payments of statutory benefits to people injured in motor accidents. Sections 3.6 and 3.7 provide that 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 those sections during the first and second entitlement periods. These provisions give effect to one of the stated objects of the MAI Act: to provide early and ongoing financial support for people injured in motor accidents.[22] In the interpretation of a provision of the Act, a construction that would promote the objects of the Act or the provision is to be preferred to a construction that would not promote those objects.[23]
[21] Section 3.5(2) of the MAI Act.
[22] Section 1.3(2)(b) of the MAI Act.
[23] Section 1.3(4) of the MAI Act.
Schedule 1 cl 4(1) includes the word “gross”. The Macquarie Dictionary defines “gross” as meaning:[24]
“whole, entire, or total, especially without having been subjected to deduction, as for charges, loss, etc.: gross profits.”
[24] Macquarie Dictionary (5th ed, 2009) ‘gross’ (def 1).
The term “gross” as it is used in Sch 1 cl 4(1) is to be given its natural and ordinary meaning. That meaning is reflected in the dictionary definition that is set out above.
Having regard to the context, the general purpose and policy of the provision, “the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred” means the whole of the income without any deduction received by an earner in return for labour or services provided by them as an earner during the 12 months immediately before the day on which the motor accident occurred.
Both classes of earner (employed or self-employed) may incur, in the course of deriving their earnings, expenses associated with things such as insurance, the operation of a motor vehicle, software, subscriptions, tolls, parking and uniforms. Further, as employees are increasingly working from home, additional expenses, such as the cost of electricity, telephone, and internet services, are also likely to be incurred.
The gross earnings of an employed earner are not reduced on account of expenses they have incurred to determine their “gross earnings” under Sch 1 cl 4(1). It is not clear why a different approach would be taken to determining the “gross earnings” of a self-employed earner for the purposes of that provision, where the same statutory test applies to both classes of earner.
If Parliament intended that the gross earnings of self-employed earners was to be determined by a different methodology, provisions that achieved that end could have been included in the MAI Act.
By way of example, the Victorian Parliament included in the Transport Accident Act 1986 (VIC) a separate definition of “pre-accident weekly earnings for self-employed people”: s 5.[25]
[25] “Pre-accident weekly earnings—self-employed persons
In this Act, pre-accident weekly earnings in relation to an earner who is a self-employed person who is injured in or dies as a result of a transport accident means the amount assessed by the Commission having regard to the earnings of the person during the three years immediately preceding the accident, costs incurred by the person in obtaining the services of persons in connexion with the business on account of the earner's incapacity and any amounts the earner could have earned from any other occupation.”
The task of statutory construction must begin with a consideration of the text itself: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 at [47]. The language used in Sch 1 cl 4(1) does not support an approach to determining the PAWE of a self-employed earner on the basis of gross earnings less all expenses. The provision refers to “gross earnings”. The term “gross” in the definition should not be read down to mean “net”. Further, the term “profit” is not used, and that term should not be interpolated into the provision in place of “earnings”.
It follows that I decline to follow those decisions in which the gross earnings of a self-employed earner for the purposes of Sch 1 cl 4(1) have been found to be the gross income of the business less all expenses. Those decisions are not consistent with the terms of the provision.
Determining the weekly average of the gross earnings received by an earner as an earner during the 12 months immediately before the day on which a motor accident occurred is a question of fact that must be determined on a case by case basis.
As recognised by the Merit Reviewer in Le, there may be circumstances where a differing approach could be adopted. The approach adopted may differ because of the type of self-employment in which an earner was engaged. By way of example, determining the PAWE of an earner who is self-employed in a partnership, or through a company structure, may differ to the approach taken to an individual self-employed earner.

I am not satisfied that the approaches taken in AOL v QBE and ABZ v QBE are clearly wrong. Further, Mr Iskander argues that his gross earnings as an earner should be calculated on the basis of the turnover or sales of his business less the cost of goods.
On the facts in this case, I find that:
a.The income gained by Mr Iskander as a self-employed earner during the 12 months immediately before the day on which the accident occurred was $76,963.
b.The cost of goods incurred by Mr Iskander during that period was $14,706.
c.The gross earnings received by Mr Iskander as an earner during the 12 months immediately before the day on which the accident occurred were $62,257.
d.The weekly average of the gross earnings received by Mr Iskander as an earner during the 12 months immediately before the day on which the accident occurred were $1,197.25.
e.For the purposes of Sch 1 cl 4(1) of the MAI Act Mr Iskander’s PAWE are $1,197.25.
Given these findings, the insurer’s decision of 11 March 2024 is set aside. In substitution for the decision the claimant’s PAWE are determined to be $1,197.25.
As may be seen from these reasons, interpreting Sch 1 cl 4(1) is not a straightforward task. Different decision makers have taken different approaches. In Shahmiri Harrison AsJ referred at [17] to the words in Sch 1 cl 4(1) giving rise to difficulties in interpretation. Consideration should be given to ameliorating these difficulties.

[2024] NSWPICMR 11

12 June 2024