Kipkorir v Insurance Australia Limited t/as NRMA Insurance

[2024] NSWPICMR 3

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER

CITATION:

Kipkorir v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMR 3

CLAIMANT:

Franklin Kipkorir

INSURER:

NRMA

MERIT REVIEWER:

Katherine Ruschen

DATE OF DECISION:

30 January 2024

CATCHWORDS:

MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; dispute about payment of weekly benefits under division 3.3; meaning of pre-injury average weekly earnings; schedule 1, clause 4; schedule 1, clause 4(2)(a), earn continuously; evidence; onus of proof; earnings from undocumented employment arrangement; earnings received on cash in hand basis; Held – the reviewable decision is set aside.

DETERMINATIONS MADE: 

CERTIFICATE

Issued under s 7.13(4) of the Motor Accident Injuries Act2017

DETERMINATION
The reviewable decision is about the amount of weekly payments of statutory 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 reviewable decision is set aside.

2.     The claimant’s pre-accident weekly earnings amount is $460.60.

STATEMENT OF REASONS

INTRODUCTION

1. There is a dispute between Franklin Kipkorir (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 (the MAI Act).

2. The claimant was involved in a motor accident on 25 September 2023.

3. On 3 October 2023 the claimant made an application for personal injury benefits.

4. On 13 November 2023 the insurer determined the claimant’s pre-accident weekly earnings (PAWE) in the sum of $762.21.

5. On 13 November 2023 the claimant applied for an internal review of the insurer’s decision of the same date.

6. On 28 November 2023 the insurer issued their internal review decision in which the insurer affirmed their decision that the claimant’s PAWE amount is $762.21.

1. The claimant has requested a merit review of the insurer’s internal review decision dated 28 November 2023 (the Application).

SUBMISSIONS

1. At the time of the accident the claimant was studying full time on a student visa and was also employed by Chandler Macleod as a casual freight handler. The insurer calculated PAWE based on earnings the claimant received as a casual freight handler. However, the claimant contends his PAWE should also include earnings he received on a “cash in hand” basis working as a labourer. The claimant contends at the time of the accident he was also employed as a labourer and for this work he was paid $250 to $300 per day on a cash in hand basis. The claimant has provided bank statements showing various deposits from a third party described as payment for “labour” in support of his contention that he also received earnings from labouring work.

2. The insurer submits that absent other documentary evidence to corroborate the bank statements it cannot be satisfied that transactions recorded as payment for “labour” represent receipt of earnings by the claimant.

REASONS

1. There is no dispute that the claimant is an earner pursuant to Schedule 1, cl 2 of the MAI Act.

2. The dispute is about the claimant’s PAWE amount under Schedule 1, cl 4 of the MAI Act, which provides:

   “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.”

3. At the time of the accident the claimant was studying in Australia under a student visa (subclass 500) granted on 19 July 2023 and requiring the claimant to enter Australia by 30 August 2023. A condition of the visa is that the claimant must not work more than 48 hours per fortnight during study terms.

4. It is not clear when the claimant first entered Australia or when he first commenced employment in Australia. However, bank records show the claimant had entered Australia before 4 August 2023, as he had commenced receiving earnings as a labourer by this date.

5. The claimant first commenced working as a casual freight handler on 12 September 2023, as evidenced by a letter from his employer.

6. The insurer has calculated PAWE pursuant to Schedule 1, cl 4(2)(a) on the basis the claimant had not been earning continuously before he arrived in Australia. There does not appear to have been any enquiry into the claimant’s overseas earning circumstances prior to 4 August 2023 and in turn, no consideration as to whether the claimant’s PAWE might in fact fall under Schedule 1, cl 4(1). However, given the parties appear to agree cl 4(2)(a) applies and neither party has put this in dispute I will proceed on the basis that PAWE falls under cl 4(2)(a).

7. Accepting the parties’ position that cl 4(2)(a) applies, the claimant’s PAWE is “the weekly average of the gross earnings received by the earner as an earner during the period from when the earner first started to earn continuously to immediately before the day of the motor accident” (emphasis added). Accordingly, cl 4(2)(a) is only concerned with earnings actually “received” by the claimant “before” the motor accident. Any earnings received on or after the day of the motor accident are excluded by the wording of cl 4(2)(a) regardless of whether the work was carried out before the day of the motor accident. Earnings received on or after the day of the motor accident are only relevant to whether the claimant has suffered a loss of earnings for the purpose of weekly payments under Division 3.3 in any relevant period.

8. Evidence of the claimant’s earnings as a freight handler comprises a payslip for payment of earnings to the claimant after the motor accident, on 27 September 2023 and the claimant’s bank statements. The payslip records that on 27 September 2023 the claimant received gross earnings in the sum of $776.20 and that by this date he had received year to date (YTD) gross earnings of $1,197.76. The bank statement records a single payment of earnings to the claimant before the day of the accident in the sum of $284.56 net on 20 September 2023. A reconciliation of the bank statement and payslip demonstrates the gross payment on this date was $421.56 ($421.56 gross paid 20 September 2023 plus $776.20 gross paid 27 September 2023 equals the YTD figure as of 27 September 2023 in the payslip of $1197.76).

9. Accordingly, gross earnings received by the claimant from Chandler Macleod before the day of the accident for the purpose of PAWE under cl 4(2)(a) are $421.56. The balance of the YTD amount ($776.20) recorded in the payslip was received by the claimant on 27 September 2023. As this date is after the accident on 25 September 2023 this amount is excluded from PAWE.

10. A letter from the employer establishes the claimant first began earning as a freight handler from 12 September 2023. This is a period of 13 days from and including 12 September 2023 up to and including 24 September 2023 being the day before the accident.[1] In the period 12 September 2023 to 24 September 2023 the claimant received gross earnings of $421.56 as a freight handler. If these were his only earnings his PAWE under cl 4(2)(a) would be $227.01 ($421.56 is $32.43 on average per day which equates to a weekly average of $227.01).

    [1] It is unclear how the insurer calculated this period to be 11 days.

11. However, there is evidence of additional earnings received by the claimant for labour work in respect of which the claimant was paid “cash in hand” or “off the books” with the arrangement not documented.

12. Whilst the claimant has the burden of proof in relation to earnings received pre-accident, the standard of proof is the civil standard of proof which requires the claimant to establish the earnings he received on the balance of probabilities. There are bank statements that record payments by a third party named Benjamin Figueira who is said to be the employer, which are made on a consistent basis (weekly from 4 August 2023 to 2 September 2023) and which are described in the bank statements as payment for “labour”. Absent any evidence to refute this evidence and given the amounts, the payment pattern and transaction description, I am satisfied on balance that payments from Benjamin Figueira described as “labour” are earnings received by the claimant for the purpose of PAWE. These payments are as follows:

Date	Amount
4 August 2023	$250
19 August 2023	$500
26 August 2023	$500
2 September 2023	$750
23 September 2023	$1,000
Total	$3,000

1. The claimant has also highlighted in his bank statements cash deposits on 14 August 2023 and 20 August 2023 (x2). However, there is no pattern to these payments. There is no third party payer identified and no description suggesting the payments represent wages. There are no documents to verify these transactions as being income. I am therefore not satisfied on balance that any of the cash deposits represent earnings received by the claimant.

2. The pattern of payments for labour by Mr Figueira demonstrates the claimant began to earn continuously through Mr Figueira from at least 4 August 2023. Accordingly, the period over which the claimant’s PAWE is to be calculated under cl 4(2)(a) is 4 August 2023 to 24 September 2023. This is a period of 52 days. In this period the claimant received gross earnings of $3,421.56 being $421.56 received as a freight handler on or before 24 September 2023 and $3,000 received from Mr Figueira in the period 4 August 2023 to 24 September 2023. This equates to a daily average over the 52 day period of $65.80 which equates to gross average weekly earnings of $460.60. The claimant’s PAWE is therefore $460.60.

3. Given the undocumented/”off the books” arrangement between the claimant and Mr Figueira it would be prudent for the insurer to require the claimant to produce ongoing bank statements to determine whether any earnings have been received from Mr Figueira (or any other employer) since the date of the accident on 25 September 2023 for the purpose of determining the extent of any loss of earnings and in turn, the amount of any weekly benefits payable under Division 3.3 in any relevant period. At present, the claimant has only provided bank statements up until the day before the accident that is, up until 24 September 2023.

CONCLUSION

1. For the reasons set out above I have determined:

   (a)    the claimant first began earning continuously on 4 August 2023 when he commenced receiving regular payments in return for labour provided to Mr Figueira;

   (b) the period over which the claimant’s PAWE is to be averaged under cl 4(2)(a) is therefore 4 August 2023 to 24 September 2023, being the day before the motor accident, which is a period of 52 days, and

   (c)    in this 52 day period the claimant received gross earnings of $3,421.56 which equates to a weekly average that is, PAWE in the sum of $460.60.

2. Accordingly:

   (a)    the reviewable decision is set aside, and

   (b)    the claimant’s PAWE is $460.60.

LEGISLATION AND GUIDELINES

1. In making this decision, I have considered the following:

   ·        The Application, Reply and supporting documentation;

   · MAI Act;

·        Motor Accident Guidelines, and

· Motor Accident Injuries Regulation 2017.