Kirwan v AAI Limited t/as GIO

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	Kirwan v AAI Limited t/as GIO [2024] NSWPICMR 13
CLAIMANT:	Roger Kirwan
INSURER:	AAI Limited t/as GIO
MERIT REVIEWER:	Belinda Cassidy
DATE OF DECISION:	26 June 2024
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; claim for statutory benefits and request by claimant for payment of expenses incurred by him in providing documentation and information to the insurer to assist them in calculating his pre-accident weekly earnings; claimant self-employed owner of four companies; accountants determined his earnings, completed Business Activity Statement and tax returns; claimant gave permission to the insurer to contact his accountants; accountants rendered invoice in the sum of $500 plus GST which the insurer refused to pay; Held – the invoice was an expense within the meaning of section 8.10(1) that could be recovered; it was incurred by the claimant in connection with his claim for statutory benefits and was reasonable and necessary; insurer’s decision set aside; insurer to pay the invoice substituted.
DETERMINATIONS MADE:	CERTIFICATE OF DETERMINATION Issued under Division 7.4 of the Motor Accident Injuries Act 2017 Having considered the evidence and the submissions from the parties, I determine: 1. The reviewable decision is set aside. 2. The invoice in dispute is for a reasonable and necessary expense incurred by the claimant in connection with the claim and is payable by the insurer.

STATEMENT OF REASONS

INTRODUCTION

Roger Kirwan was involved in a motor accident on 25 March 2024. He was riding his own motor bike when the rear tyre blew out and he lost control of it, and he was injured.
On or about 9 April 2024, Mr Kirwan made a claim for statutory benefits under the Motor Accident Act 2017 (the MAI Act). The claim was made against GIO the third-party insurer of Mr Kirwan’s motor bike.
A dispute has arisen in the claim about whether the claimant can recover the cost of an invoice from his accountants, in respect of work done to provide documents and information to the GIO, to assist them in determining the claimant’s pre-accident weekly earnings.
After the insurer declined to undertake an internal review of its decision, the claimant referred the dispute about the invoice to the Personal Injury Commission (the Commission) for assessment and determination in accordance with Division 7.4 of the MAI Act.
The proceedings were allocated to me on 28 May 2024. I conducted a short teleconference on 25 June 2024 with the parties and decided to determine the matter on the papers.

LEGISLATIVE FRAMEWORK

Statutory benefits generally

Mr Kirwan’s accident, and his claim for statutory benefits are governed by the provisions of the MAI Act.
The MAI Act has two broad purposes. It provides:
(a) a scheme for the compulsory insurance of all motor vehicles registered in NSW and the regulation of the insurers that provide that insurance, and
(b) a scheme for the payment of statutory benefits and lump sum compensation for persons injured in motor accidents in NSW.
Mr Kirwan’s claim is a claim for statutory benefits under Part 3 of the MAI Act. I note that statutory benefits include weekly income replacement type benefits pursuant to Division 3.3 and treatment and care benefits pursuant to Division 3.4 of the MAI Act.
Sections 3.6(1), 3.7(1) and 3.8(1) provides that an “earner” who is injured in a motor accident and suffers “a total or partial loss of” earnings or earning capacity as a result of their injuries “is entitled to weekly payments of statutory benefits.”
Sections 3.6(2), 3.7(2) and 3.8(2) essentially provide for the calculation of statutory benefits by reference to the difference between the injured person’s pre-accident weekly earnings or earning capacity and their post-accident earnings or earning capacity subject to maximums (s 3.9) and minimums (s 3.10).
Schedule 1 of the MAI Act includes definitions of “earner”, “loss of earnings” and sets out the method by which “pre-accident weekly earnings” or PAWE are to be calculated.

Costs and expenses

Section 8.10(1) provides that a claimant can recover legal costs and other costs and expenses in a statutory benefits claim. Section 8.10(2) provides for the making of regulations concerning costs and expenses.
The Motor Accident Injuries Regulation 2017 (the Regulation) provides, in Part 6, for the regulation of some costs and expenses incurred in connection with claims.

Dispute resolution

Schedule 1, cl 1 of the MAI Act declares certain matters to be merit review matters including:
“(aa) whether for the purposes of section 8.10 … the costs and expenses incurred by the claimant are reasonable and necessary.”
Division 7.4 of the MAI Act provides for the resolution of declared Merit Review matters as follows:
(a)    subject to the Regulation, the insurer must conduct an internal review before a merit review application can be made in accordance with s 7.11. Clause 10(d) of the Regulation states that a dispute about costs and expenses does not have to be referred for internal review before it is referred to the Commission;
(b)    a claimant can apply to the President of the Commission for a review in accordance with s 7.12(1) and the President is to arrange for the application to be dealt with by a merit reviewer (s 7.12(2));
(c)    the claimant and insurer must provide information that the merit reviewer may reasonably require (s 7.12(5));
(d)    the merit reviewer determines an application by deciding the “correct and preferable decision” in relation to the factual material before the reviewer and “any applicable written or unwritten law.” (s 7.13(1)), and
(e)    the merit reviewer may decide to affirm, vary or set aside the insurer’s reviewable decision (s 7.13(3)). If the insurer’s decision is set aside the merit reviewer may substitute a decision or remit it to the insurer for reconsideration.

REVIEW OF THE EVIDENCE

Documentary evidence

The claimant submitted an online application form for statutory benefits. In it he disclosed:
(a)    the accident occurred shortly before his 53^rd birthday;
(b)    the accident occurred at 2.00pm on the Burley Griffin Way on the highway at Barellan (near Griffith) in country NSW;
(c)    he was riding his motorcycle when the rear tyre blew out and he lost control of the bike;
(d)    he sustained eight left rib fractures, a fracture of his left tibial plateau and a left shoulder injury, and
(e)    the claimant was taken to Griffith Base Hospital and then Northern Beaches Hospital and has had surgery and physiotherapy.
The claimant says he was self-employed working full time as a director for Murray Marshall Pty Limited and advised the insurer of his annual earnings. The copy I have of this document has the amount blanked out. The amount was also blanked out in the copy Ms Miles had. Mr Kirwan could not remember exactly what figure he inserted into the claimant form but considered it was in the order of $28,000.
The claimant indicated on the form that he did not agree to the insurer obtaining his earnings information from his employer.
On 12 April 2024, GIO wrote to the claimant setting out the decision-making process in respect of whether Mr Kirwan was an “earner” and the amount of his PAWE. He was asked to identify “the type of work you do [employee / self-employed / about to start work or receiving benefits] and provide as much information as you can.” The information required for someone like the claimant who was self-employed was:
(a) the claimant’s individual tax return and notice of assessment for the last financial year along with information about income and expenses for the last 52 weeks, and
(b) tax invoices and other relevant information “to confirm your income and expenses.”
On 16 April 2024 the claimant emailed GIO and referred to discussions before requesting GIO contact his accountants (Mazars) directly and he provided details of two relevant persons (who were also copied in on the email). He also:
(a)    identified the four companies he owns;
(b)    described the nature of the work he does for each of those four companies;
(c)    indicated that in the 2024 financial year he had invoiced $6,000 for work done for one of the companies;
(d)    he relies on Mazars to calculate his remuneration each year;
(e)    he foreshadowed profits of $150,000 and $90,000 for two of the companies and losses for the other two, and
(f)    he foreshadowed an income of “at least $45,000” but he did not know until Mazars advised him.
On 18 April 2024, an officer of GIO wrote to Mazars requesting information and documents.
In an email dated 22 April 2024, the claimant responded to a question from GIO and advised there were no employees in any of the companies but there are two contractors who provide day to day and strategic help.
On 22 April 2024, Mr Cook from Mazars advised GIO of the details of each of the companies (ABN and date of establishment) and provided a copy of the last quarter’s Business Activity Statement (BAS) statement and the 2022 income tax return noting they were still working on the 2023 tax return. They also provided the claimant’s draft income tax return for 2023 and advised that the claimant was paid a monthly wage.
On 29 April 2024, GIO wrote to the claimant accepting liability to pay statutory benefits for the first 52 weeks after the accident. In that letter GIO:
(a)    accepted the claimant was an earner;
(b)    accepted the claimant has sustained a loss of earnings as a result of the accident;
(c)    said it was unable to determine his PAWE, and
(d)    advised the claimant would be paid the interim payment set out in the legislation of $572.88 gross per week.
A second letter was sent to the claimant on 29 April 2024 asking for further information namely the claimants “full and completed 2022/2023 tax returns.”
On 30 April 2024, an officer of GIO wrote to the claimant asking for further information:
(a) the tax returns of his businesses were requested as GIO said, “we must take all potential earnings streams into account.” Mr Kirwan responded by suggesting that if he received income from BHP as a shareholder, he would not be required to supply BHP’s tax returns, and
(b) his bank statements since the motor accident to confirm no earnings had been received since the accident. The claimant says his bank statements contain transactions in the form of loans and advances which are not income related and that his accountants will advise GIO of his income.
The claimant has provided an invoice from his accountants Mazars (NSW) Pty Limited dated 30 April 2024. It reads as follows:
“On account of professional services rendered for the period ended 30 April 2024, including:
Roger Kirwan
-        Analysis of wage position for Roger Kirwan in relation to workers compensation pay, including calculation of additional superannuation, PAYG, and income tax.
-        Providing documents requested by GIO including details of each of Roger's four companies - ABN. financial statements and tax returns.
-        Generally acting as and when required.”
On 6 May 2024 the claimant wrote to the insurer advising that the invoice had not been paid and asked for it to be paid as, “this expenses was required to be incurred as a direct result of my accident and your requirement for my proof of income.”
GIO wrote to Mr Kirwan on 16 May 2024 in what appears to be a template letter for use in relation to treatment expenses. It advised the claimant that in order to assess the request for payment of the accountant’s fees, the insurer had to assess whether it was reasonable and necessary, directly related to the accident, was appropriate for his injury, would benefit his injury, is the most suitable and was cost effective.
The insurer advised “we have concluded that the proposed request did not pass all of these tests. As a result, we decline to pay.”
Further reasons were provided as follows:
“We deem you an earner, but cannot quantify what your pre-average weekly earnings would be, based on the position that we have not been able to clarify your NET proceeds from your businesses. We advise that we will not be paying for the invoice of Mazars, for the fact that you were already engaged with your accountant for your business’ as indicated in your conversation with your claims advisor, and that they are the ones that complete your documents and provide you with your earnings. It is an everyday requirement for those undertaking business that their tax return must be completed and is not an expense incurred because of the motor vehicle accident – you would be required to lodge for tax regardless.”
Later in the letter the insurer says under the heading “paying for treatment” that “we’ve declined to pay these costs. As we haven’t pre-approved these costs, you’re responsible for paying them.” The insurer then invites the claimant to ask for an internal review if he disagrees with the decision.
The claimant requested an internal review, it would appear by telephone. An officer of GIO advised the claimant on 21 May 2024 that the insurer had no power to conduct an internal review advising the claimant as follows:
“1. Schedule 2 of the Act allows for Internal Reviews of decisions relating to 'treatment and care' pursuant to 3.24 and 3.28 of the Act. However, 'accounting fees' does not fall within the definition of 'treatment and care' provided under section 1.4(1) of the Act.
2. Your matter may be considered as a recovery of costs and expenses in relation to statutory benefits under 8.10 of the Act. However, regulation 10 of the Motor Accident Injuries regulation states a merit review [sic] is not required for the purposes of 8.10.
3. Therefore, you may proceed with an application at the Personal Injury Commission to review your claimed expenses.”
The insurer provided copies of the claimant’s certificates of fitness at my request before the preliminary conference.
The first certificate is dated 9 April 2024 and was completed by Dr Andrew Ho. He certified the claimant had no capacity for work and was non-weight bearing for six weeks.
The next certificate is from Dr O’Hara and is dated 19 April 2024. He refers to the claimant’s left tibial plateau fracture which had an open reduction and internal fixation (ORIF),Mr Kirwan’s fractured ribs and his hemopneumothorax. He certified the claimant unfit for any form of work until 3 May 2024.
Further similar certificates were completed by Dr O’Hara on 29 April 2024, 3 May 2024, and 17 May 2024. On 7 June 2024, Dr O’Hara certified the claimant fit for two hours of work per day, four days per week. He further states the claimant is fit for eight hours of officer work per week, working from home and states “emails only.”

Oral evidence from Mr Kirwan

Mr Kirwan explained that he was the owner of four companies:
(a)    Lanolin Beauty Pty Limited which was involved in the wholesaling of toiletries;
(b)    Beaue Pty Limited an investment company and parent of some of the claimant’s other businesses;
(c)    Marshall Murry Pty Limited (formerly Foxcil) which concerned the printing of stickers and labels, and
(d)    Lililia Skin Pty Limited (formerly Roller Poster) which was involved in wholesale cosmetics.
Mr Kirwan said he was the sole director and before the accident he worked full time in the businesses theoretically 40 hours a week. He had no other job or employment. Mr Kirwan said he has always had accountants preparing his books, BAS statements and tax returns. Mazars were his new accountants as his former accountant had become ill.
Mr Kirwan confirmed that the invoice in dispute was not an invoice in respect of the preparation of his taxation returns but an invoice in respect of the work done by his accountants in providing information and copies of his taxation returns to the insurer.
Mr Kirwan said he was back at work and that until two weeks ago he was not certified fit for any form of work including administrative work.

SUBMISSIONS

Claimant’s submissions

The claimant’s submissions lodged with his application say:
(a)    the claimant has been certified as unable to do any work (including work of an administrative nature) from the date of the accident;
(b)    GIO have requested information about the claimant’s annual income so they can determine his weekly benefits;
(c)    he is self-employed and uses accountants to prepare his tax returns;
(d)    he asked GIO to contact his accountants (“especially given my medical incapacity”)
(e)    GIO requested permission to talk to Mr Kirwan’s accountants, and
(f)    his accountants have sent him an invoice for $500 plus goods and services tax (GST) for the time taken dealing with GIO.
Mr Kirwan says the invoice was incurred directly because of the accident, he has requested reimbursement from GIO, and it has refused to pay it.

Insurer’s submissions

The insurer’s submissions dated 12 June 2024 say:
(a)    the dispute is a dispute about reasonable and necessary costs and expenses;
(b)    clause 20 of the Regulation provides that “fees for accountant’s reports” are unregulated but that no report has been provided by Mazars, and
(c)    the costs were not incurred in connection with the claim as required by s 8.10(1) because “the costs and expenses … [the preparation of drafts of the claimant’s individual taxation return and his company tax returns] were incurred in connection with the claimant running his company and business entities”.

CONSIDERATION OF THE ISSUES

What is the reviewable decision?

The reviewable decision is the GIO’s refusal to pay the invoice of Mazars (NSW) Pty Limited dated 30 April 2024 in the sum of $550 inclusive of GST.
The GIO decision was made in a letter dated 16 May 2024.

Was the Mazars work done in connection with the claim?

The insurer has declined to pay the Mazars invoice because the insurer submits the invoice covers the preparation of drafts of Mr Kirwan’s individual taxation return and the tax returns of his companies. GIO submits the Mazar expense was incurred in connection with the running of Mr Kirwan’s company and business entities.
With respect, a plain reading of the Mazars invoice, as confirmed by Mr Kirwan at the preliminary conference is that the disputed invoice is not for the preparation of draft taxation returns. The dispute invoice is for work done in providing to GIO information and documentation, including taxation returns already drafted but not yet finalised and not yet lodged. While the invoice refers to “workers compensation pay,” that appears to be a mistaken reference to motor accident benefits.
I am satisfied that the work done by Mazars was done in connection with the claim namely to assist the claimant in providing information about his earnings to GIO to assist them in the calculation of his PAWE.

Is the invoice reasonable and necessary?

The amount of the invoice has not been challenged by the insurer.
Clause 20(b) of the Regulation provides that costs associated with an accountant’s report are unregulated but is silent as to the costs and expenses associated with any other type of work done by an accountant in connection with a claim.
The invoice does not have a breakdown of who did the work and how much they charged per hour (for example) to do the work. My view is that it would have taken someone about an hour or two to respond to the request from the insurer. While not strictly comparable, I note the Regulation provides an hourly rate for a qualified lawyer to perform advocacy work in a claim at about $360 an hour.[1] When considering that hourly rate, and my estimation of the time taken to perform the work, I am satisfied that the sum invoiced by Mazars is reasonable.
[1] Schedule 1, clause 4 provides for 3 monetary units per hour for the legal costs of a conference related to the assessment of a claim. A monetary unit is currently worth close to $120.
The insurer has provided copies of the claimant’s certificates of fitness. The claimant was certified as having no capacity to work until early June at which stage he has been limited to eight hours a week and “emails only” type work. The claimant in his submissions and at the preliminary conference said that he was unfit to do even administrative work due to his physical and emotional health.

Noting the complexity of the claimant’s businesses (four separate companies), the arrangements in place before the accident (accountants who provided him with expert financial and business advice) and the claimant’s unfitness for work, I am satisfied that it was necessary to have Mazars provide the information and documentation to the insurer that they have now provided.
Overall, it was both reasonable and necessary for this particular claimant to seek the assistance of his accountants. Without the assistance from his accountants, the claimant would have had further delays and difficulties associated with obtaining the weekly statutory benefits to which he is entitled.

Is the work done by Mazar’s, fees for “an accountants’ report”?

The insurer appears to be arguing that while fees for accountants’ reports are unregulated and can be allowed in a claim, Mazars have not provided a report and therefore the expense claimed cannot be allowed.
The accountant’s response to GIO of 22 April 2024 would have required work to be done: to read the request for information and understand it; retrieve files and find the information requested, and then provide it to the insurer in a logical fashion. The accountant has certainly “reported” to the insurer about the claimant, his companies and their earnings.
There is no definition of “report” in the MAI Act or the Regulation. The fundamental principle of statutory interpretation is that words are to be given their ordinary or “natural” meaning bearing in mind the context and purpose of the legislative provision. The overall purpose of Part 6 of the Regulation is to control certain legal and medical costs and other costs and expenses. The context of the Regulation is that it fits into a scheme made up of a finite sum of compulsorily levied insurance and the payment of limited statutory benefits and compensation.
There are other costs and expenses listed in clause 20 that are unregulated, for example at (a), fees for accident investigators’ reports and accident reports usually requested in contested liability cases. The Regulation also allows at (c) for reports from health practitioners (not being medical practitioners) and at (d) for “professional reports” relating to other aspects of treatment or rehabilitation provided to an injured person after an accident. The “reports” in these instances are usually requested by a party to the claim and involve the briefing of an expert to advise. Their expert opinion is sought which can then be tendered as evidence in a hearing or assessment.
There are costs and expenses listed in clause 20 that do not appear to be those sorts of expert evidence related “reports”. For example, clause 20(g) provides for “fees for police reports.” Those reports do not provide expert police opinion but document the circumstances of an accident, the persons involved and recording any action taken by the police.
The Regulation also recognises at (f) costs associated with the provision of services (not reports or records) by interpreters or translators.
The Regulation importantly distinguishes between “reports” from health practitioners (c) and fees for clinical “records” of treating health practitioners (e). The former would encompass a report providing expert opinion evidence on medical issue and the latter usually involves the administrative task of providing copies of clinical notes.
I agree with the insurer’s submission that the response from Mazars to the insurer’s request for documentation and information is not the provision of a report from an accountant. Mazars were not providing an expert opinion on the claimant’s earnings. What Mazars has provided are clearly factual pieces of information and copies of documents in their possession.
In my view the invoice rendered by Mazars for the work associated with providing documentation and information to GIO does not appear to come within the meaning of “fees for accountants’ reports” as set out in clause 20(b) of the Regulation. The clause in this particular Regulation appears to be addressed at fees associated with obtaining a forensic accountant’s report for the purposes of providing an expert opinion on economic loss or loss of earnings in a statutory benefits or damages claim.

What costs and expenses can be recovered?

Having considered the Mazars’ invoice is reasonable and necessary and incurred in connection with the claim but is not “fees for an accountant’s report”, the question remains whether it is a cost and expense that can be recovered from the GIO by Mr Kirwan.
Section 8.10(1) provides that a claimant can recover costs in a claim as follows:
“A claimant for statutory benefits is (subject to this section) entitled to recover from the insurer against whom the claim is made the reasonable and necessary legal costs, and other costs and expenses, incurred by the claimant in connection with the claim. Other costs and expenses include the cost of medical and other tests and reports” (emphasis added).
Section 8.10(3) and (4) relate only to legal costs incurred and provide that a claimant can recover legal costs only if those costs are permitted by the Regulation or allowed by the Commission (and the Commission can only permit legal costs if the claimant lacks legal capacity or if there are exceptional circumstances in the claim). Mr Kirwan has not sought legal representation and therefore s 8.10(3) and (4) do not relate to this matter.
Section 8.10(2) is important and says:
“The regulations may make provision for or with respect to fixing the maximum costs and expenses recoverable by a claimant under this section (including any matters for which no costs and expenses are recoverable from the insurer).”
When section 8.10 is read as a whole, it clearly establishes:
(a) legal costs can only be recovered if they are reasonable and necessary and incurred in connection with the claim and if the Regulation or the Commission permits or allows them to be recovered, and
(b) other costs and expenses can be recovered without permission. The costs have to comply with s 8.10(1) and be reasonable and necessary, incurred in connection with the claim and the amount can be limited or not allowed by the Regulation but no permission is required from the Regulation or the Commission in order for the insurer to pay them.
Part 6 of the Regulation, concerns costs and expenses. Division 1 of Part 6, includes clause 20 which lists a number of costs and expenses that are not regulated and do not have a “maximum” or cap as contemplated by s 8.10(2), but clause 20 does not identify the matters in the list as not recoverable from the insurer[2].
[2] Clause 23 and 23A in Division 2 provides circumstances where no legal costs are recoverable from the insurer.
Divisions 2, 3 and 4 regulate legal costs, medico-legal fees and expert witness’ fees. Division 5 regulates other costs matters and expenses as follows:
(a)    the recovery of costs incurred in respect of a failure to attend a medical assessment or cancelling the assessment (clause 32);
(b)    private motor vehicle expenses when attending medical examinations and assessments (clause 33), and
(c)    treatment and care expenses (clause 34).
There is nothing in Division 5 or elsewhere in the Regulation that regulates the fees that might be charged by an accountant for providing copies of taxation returns and information that might be requested by an insurer when determining an injured person’s PAWE. There is nothing in Division 5 or elsewhere in the Regulation that says no costs or expenses for work of that nature can be recovered from the insurer.
As there is no relevant provision in the Regulation that would prevent the recovery by Mr Kirwan, from GIO of the Mazar invoice, I must return to s 8.10(1) of the MAI Act.
Other costs and expenses are said in s 8.10(1) to include the cost of “medical and other tests and reports.” The Mazars invoice is not a medical test or medical report. This prompts the question, does the phrase, “... include the cost of medical and other tests and reports” restrict or expand the scope of the words “costs and expenses”?
In my view, the words “medical and other tests and reports” are examples of costs and expenses that could be allowed, but it is not an exhaustive list of the types of costs and expenses that can be allowed in a statutory benefits claim. I am satisfied that the invoice from Mazars is an “other cost and expense” contemplated by s 8.10(1).

CONCLUSION

In summary, I am satisfied that the invoice from Mazars dated 30 April 2024 is:
(a)    an expense within the meaning of s 8.10(1) that can be recovered by the claimant from the insurer;
(b)    an expense that was incurred by the claimant in connection with his claim for statutory benefits, and
(c)    and expense that is reasonable and necessary.
It follows therefore that the GIO’s decision of 16 May 2024 should be set aside. Pursuant to s 7.13(3)(a) of the MAI Act, I substitute a decision that the GIO should pay the disputed invoice.

[2024] NSWPICMR 13

26 June 2024