Lay v QBE Insurance (Australia) Limited
[2023] NSWPICMR 19
•29 March 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Lay v QBE Insurance (Australia) Limited [2023] NSWPICMR 19 |
| ClaimanT: | Peter Lay |
| Insurer: | QBE Insurance (Australia) Limited |
| Merit Reviewer: | Maurice Castagnet |
| DATE OF DECISION: | 29 March 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; whether the insurer is entitled to cease weekly payments of statutory benefits after 104 weeks under section 3.12, Division 3.3; whether the claimant’s injury is the subject of a pending claim for damages; Held – the reviewable decision is set aside. |
| Determinations made: | CERTIFICATE OF DETERMINATION The reviewable decision is about whether for the purposes of s 3.12 (Cessation of weekly payments to other injured persons after the maximum weekly payments period) an injured person’s injury is the subject of a pending claim for damages and is therefore a merit review matter under Schedule 2, cl (1)(b) of the Act.
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STATEMENT OF REASONS
INTRODUCTION
The dispute between the claimant, Peter Lay and the insurer in this matter is about the claimant’s entitlement to receive weekly payments of statutory benefits for loss of earnings after 104 weeks from the date of the motor accident under division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
BACKGROUND
The claimant is a 54-year-old man who sustained significant injuries in a motor accident on 6 September 2019. On that day, the claimant was driving his vehicle along the Hume Highway, Warwick Farm when a large tree suddenly fell on top of the vehicle, crushing it. No other motor vehicle was involved in the accident.
On 20 September 2019, the claimant made an application for payment of statutory benefits of weekly payments for loss of earnings as well as payments for treatment and care. The insurer admitted liability to make those payments.
On 9 August 2021, the insurer notified the claimant that his weekly payments of statutory benefits would cease on 6 September 2021. That is 104 weeks after the date of the accident.
The insurer also accepted that the claimant had suffered a non-minor injury as defined in s 1.6 of the MAI Act. Thus, the claimant is entitled to make a claim for damages.
The reasoning behind the insurer’s decision of 9 August 2021 appears to be that because the subject accident was a “no-fault motor accident” within the meaning of s 5.1 of the MAI Act involving a single motor vehicle, the claimant, as the owner and driver, was “precluded from making a claim for damages” under s 4.1 of the MAI Act.
As at the date of the insurer’s decision of 9 August 2021, the claimant had not made a claim for damages.
On 17 January 2022, the claimant sought a review of the insurer’s decision. This was on the basis that although he had not made a claim for damages, he was entitled to do so and “to make a potential claim for statutory benefits beyond 104 weeks”.
On 24 January 2022, the insurer issued a review decision affirming its original decision.
On 21 February 2022, the claimant made an application to the Personal Injury Commission (Commission) seeking a review of the insurer’s review decision. The matter was referred to me for determination.
On 12 April 2022, I issued a determination for the dispute. See Lay v QBE Insurance (Australia) Limited [2022] NSWPICMR 27. As at the date of my determination, the claimant had not made a claim for damages. Accordingly, for the purposes of sub-s 3.12(2)(a) of the MAI Act, I found that the claimant did not have a “pending claim for damages”. On that basis, I affirmed the insurer’s decision to cease payments of weekly payments to the claimant for loss of earnings after 104 weeks.
On 31 May 2022, the claimant made a claim for damages with the insurer.
On 4 July 2022, the insurer issued a notice to the claimant denying liability for the claim on the basis that the claimant is the driver who is deemed to be at fault for the motor accident pursuant to s 5.2(1) of the MAI Act.
The claimant made an application for mandatory exemption to the Commission on the basis that the insurer has declined to indemnify the claimant as owner and driver under the third-party policy. On 6 September 2022, the Commission certified that the claim is exempt from assessment by the Commission.
On 29 September 2022, the insurer wrote to the claimant advising him that liability for any weekly payments of statutory benefits beyond 104 weeks was denied for the same reasons.
On 12 October 2022, the insurer notified the claimant that it conceded that the degree of the claimant’s permanent impairment as a result of the injury caused by the motor accident is greater than 10%.
On 3 November 2022, the claimant sought a review of the insurer’s decision of 29 September 2022 in so far as that decision related to a denial to make weekly payments of statutory benefits beyond 104 weeks.
On 1 December 2022, the insurer issued a review decision affirming its original decision, expressed in the following terms:
“You do not have a lawful pending claim for damages, nor do you have [sic] cause for action for common law damages given this was a ‘no fault motor accident’ and [sic] unable to sue yourself or a third party.
Your ‘claim for damages’ should not be construed as pending as you do not have a claim soundly based in law that remains pending.
You have submitted a claim for common law damages knowing your claim will fail, knowing you do not have an entitlement to common law damages as per section [sic] 5.1, 5.2 and 5.4 of the Act. Your legal representative has generated legal costs for yourself, for QBE and for the NSW CTP claims scheme.
…
Based on the information available to me, I have determined that the injury is not subject to a pending claim for damages as it has been determined that the subject accident is a ‘no fault motor accident’ and therefore there is no entitlement to statutory benefits post 104 weeks. It is noted you do not have a lawful claim under the Act to issue a claim for common law damages. As a result, QBE, is entitled to cease weekly statutory benefits from 104 weeks after the accident as of 6 September 2021.”
DOCUMENTS AND INFORMATION
In making my determination, I have considered the documents and submissions provided to the Commission by the claimant in his application, and by the insurer in its reply and pursuant to my directions.
I am satisfied that I have sufficient information before me to proceed to determine the matter on the papers.
JURISDICTION
The insurer argued that, noting my decision of 12 April 2022, the appropriate avenue was for the claimant to have sought a review of that decision by a review panel pursuant to s 7.15 of the MAI Act. That is because the insurer’s reviewable decision had already been the subject of merit review.
I do not accept that submission. It is apparent that the insurer has made a further review decision on 1 December 2022 based on different circumstances. Indeed, the insurer advised the claimant that if he was dissatisfied with the further review decision, he was at liberty to seek a merit review by the Commission.
Accordingly, I consider that the claimant is entitled to seek a merit review of the review decision of 1 December 2022, and I am satisfied that I have jurisdiction to deal with the matter as a merit review under Schedule 2, cl (1)(b) of the MAI Act.
CLAIMANT’S SUBMISSIONS
The claimant says that there is a lawful basis for making a claim for damages under common law. In making the claim, the claimant’s injury became the subject of a pending claim for damages, entitling the claimant to recover weekly payments of statutory benefits for any period of loss of earnings or earning capacity beyond 104 weeks (whether or not the insurer has accepted liability for common law damages) pursuant to s 3.12 of the MAI Act.
THE INSURER’S SUBMISSIONS
The insurer accepts that the circumstances of the claim for damages have changed since my determination on 12 April 2022.
A claim for damages has since been made by the claimant which has been denied by the insurer.
However, the insurer contends that the claimant is not entitled to receive statutory benefits beyond 104 weeks pursuant to sub-s 3.12(2)(a) of the MAI Act, because his claim for damages cannot be sustained. As owner and driver in a single vehicle accident, the claimant cannot sue himself. A claim cannot, and should not, be construed as pending, merely because a claim is on foot when that claim has no prospect of success.
The insurer argues that whilst s 3.12 provides that weekly payments will cease if a pending claim for damages is withdrawn, settled or finally determined, any claim for damages must be founded on a legal cause of action or be legally valid. Since the claim for damages has no prospects of success, it would be inconsistent to accept that it is pending for the purpose of making weekly payments of statutory benefits.
The insurer submits that the interpretation of the MAI Act should have regard to a construction that is in keeping with the purpose and intention of the Act. Indeed, the enactment of the MAI Act was to assist in the efficient determination of compensation claims arising from motor accidents.
The insurer relies upon the observations of McHugh J at paragraph 43 in Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568:
“Although the Act establishes a compulsory third party insurance scheme for motor vehicle injuries, the Act does not and was never intended to provide a universal, comprehensive scheme to award damages to every person who sustains an injury that was in some way connected to a motor vehicle.”
The insurer submits that whilst the above case related to the construction of the Motor Accidents Compensation Act 1999 it retains relevance to the MAI Act. To construe that the claimant has a pending claim for damages merely because he has lodged a claim form in circumstances where that claim cannot succeed, is contrary to the object of the MAI Act.
The insurer seeks its internal review decision be upheld.
RELEVANT LEGISLATION
Part 3 of the MAI Act deals with statutory benefits.
Section 3.1 provides an entitlement to statutory benefits in respect of death or injury to a person from a motor accident in New South Wales, subject to the qualifications in this Part, whether or not the accident was caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle or even if the accident was caused by the fault of the person to whom the statutory benefits are payable.
Division 3.3 deals specifically with weekly payments of statutory benefits and provides the basis upon which there is an entitlement to those payments.
Section 3.11 provides that an injured person is not entitled to weekly payments of statutory benefits for any period of loss of earnings or earning capacity that occurs more than 26 weeks after the motor accident if the accident was caused wholly or mostly by the fault of the person, or if the person sustained only “minor injury” within the definition of s 1.6 of the MAI Act.
Section 3.12 sets out the circumstances in which other injured persons may be entitled to receive weekly payments of statutory benefits after 78 weeks. As the issue in this dispute centres on whether the claimant is entitled to weekly payments of statutory benefits after 104 weeks, it is appropriate to set out the terms of s 3.12 which are as follows:
“3.12 Cessation of weekly payments to other injured persons after maximum weekly payments period
(1)An injured person is not entitled to weekly payments of statutory benefits under this Division for any period of loss of earnings or earning capacity that occurs more than the maximum weekly payment period after the motor accident concerned.
(2)The maximum weekly payment period is as follows—
(a) 104 weeks, unless the person’s injury is the subject of a pending claim for damages (whether or not the insurer has accepted liability),
(b) 156 weeks if the person’s injury is the subject of such a pending claim and the degree of any permanent impairment of the injured person as a result of the injury is not greater than 10%,
(c) 260 weeks if the person’s injury is the subject of such a pending claim and the degree of permanent impairment of the injured person as a result of the injury is greater than 10%.
(3)The maximum weekly payment period ends if any such pending claim for damages is withdrawn, settled or finally determined after the period of 104 weeks after the motor accident concerned.”
DISCUSSION
Section 3.12(1) and sub-s 3.12(2)(a) of the MAI Act provide that the claimant is not entitled to weekly payments of statutory benefits after 104 weeks unless his injury is the subject of a pending claim for damages.
On 31 May 2022, the claimant made a claim for damages which is yet to be determined. I therefore consider that the requirements of s 3.12(1) and sub-s 3.12(2)(a) are satisfied.
On 4 July 2022, the insurer denied liability for the claim. The insurer argues that the claimant’s claim for damages cannot be sustained. As owner and driver in a single vehicle accident, the claimant cannot sue himself. On that basis, a claim cannot, and should not, be construed as pending, merely because a claim is on foot when that claim has no prospect of success.
I do not accept that argument for the following reasons.
First, there is nothing in the terms of s 3.12 to suggest that a claim for damages is no longer pending if the insurer does not accept liability. This is made apparent by the words “whether or not the insurer has accepted liability”.
Secondly, it cannot be said that a claim for damages is no longer pending on the mere assertion by the insurer that the claim is doomed to fail. Liability for the claim will be determined by others. As indicated by
s 3.12(3) the maximum weekly payment period ends if the pending claim finally determined, or otherwise withdrawn or settled.
COSTS
There are no regulated costs allowed for this merit review type. I therefore make no order as to costs.
CONCLUSION
The claimant’s injury is the subject of a pending claim for damages.
The insurer is not entitled to cease weekly payments of statutory benefits after 104 weeks.
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