Lee v QBE Insurance (Australia) Limited

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
Citation:	Lee v QBE Insurance (Australia) Limited [2023] NSWPICMR 27
ClaimanT:	Se il Lee
Insurer:	QBE Insurance (Australia) Limited
Merit Reviewer:	Katherine Ruschen
DATE OF DECISION:	15 May 2023
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; dispute about weekly payment of statutory benefits under Division 3.3; dispute about pre-accident weekly earnings (PAWE); change in earning circumstances; Schedule 1 clause 4(1), clause 4(2)(b) and clause 4(3); onus of proof; veracity of evidence; credibility; duty of disclosure and to act honestly and not mislead; sections 6.3 and 6.24; compliance with directions; sections 42 and 54 of the Personal Injury Commission Act 2020; rule 77 of the Personal Injury Commission Rules 2021; power to dismiss proceedings; Held – the application for a merit review is dismissed.
Determinations made:	CERTIFICATE OF DETERMINATION Issued under section 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. Pursuant to s 54(c) of the Personal Injury Commission Act 2020 and rule 77(b)(ii) and/or in the alternative, rule 77(b)(iii) of the Personal Injury Commission Rules the application for a merit review is dismissed.

STATEMENT OF REASONS

INTRODUCTION

There is a dispute between Se Il Lee (the claimant) and the insurer about the amount of weekly payments of statutory benefits payable under Division 3.3 of the MAI Act.
The claimant was involved in a motor accident on 3 April 2021 which is the subject of a separate application for personal injury benefits to another insurer, GIO.
On 6 June 2021 the claimant was involved in the motor accident that is the subject of the application for personal injury benefits that gives rise to this merit review.
On 24 December 2021 the insurer in respect of the subject accident and respondent to this merit review determined the claimant’s pre-accident weekly earnings (PAWE) in the sum of $399.85.
The claimant requested an internal review of the insurer’s 24 December 2021 decision.
On 8 February 2022 the insurer issued their internal review decision in which the claimant’s PAWE amount was revised to $1,408.79.
The claimant requested a merit review of the insurer’s internal review decision dated 8 February 2022.
On 19 April 2022 I issued a merit review decision in relation to the insurer’s internal review decision dated 8 February 2022 in which I set aside the reviewable decision and remitted the matter to the insurer for redetermination pursuant to directions set out in the decision.
The previous merit review decision of 19 April 2022 included directions requiring the claimant to provide further information to the insurer.
The claimant provided partial further information to the insurer after 19 April 2022 and on 25 May 2022 the insurer issued their further PAWE decision in which the insurer redetermined PAWE in the sum of $834.77.
The claimant requested an internal review of the insurer’s 25 May 2022 PAWE decision.
On 14 September 2022 the insurer issued their internal review decision in which the insurer affirmed their decision of 25 May 2022 that PAWE is $834.77.
The claimant has requested a merit review of the insurer’s internal review decision dated 14 September 2022.

SUBMISSIONS

The claimant submits his PAWE should be calculated under Schedule 1, cl 4(2)(b) of the MAI Act on the basis commencement of employment with a second employer, Donny Tiling Pty Limited (DT) on 8 February 2021 in addition to working through his own company, IBS, amounted to a significant change in earning circumstances for the purpose of Schedule 1, cl 4(3). On this basis, the claimant submits PAWE should be calculated over the period 8 February 2021 to 5 June 2021 based on earnings received in this period from DT and IBS.
The claimant contends in this period he received total earnings of $26,090.20 broken down as follows:
(a) from DT: $22,275.86, and
(b) from IBS: $3,814.34.
The period 8 February 2021 to 5 June 2021 is 16.86 weeks. On this basis, the claimant submits his PAWE is $1,321.23 ($22,275.86 divided by 16.86 weeks).
The insurer submits:
(a) the claimant was employed by DT between 8 February 2021 to 4 April 2021, being a closed period of 55 days;
(b) given the short period of closed employment it is not “permanent” and “continuous”, as defined in Schedule 1, cl 4(4) of the MAI Act, and
(c) in circumstances where the claimant was not employed by DT for a permanent or continuous period of at least six months, it is correct to determine the claimant’s PAWE in accordance with Schedule 1, cl 4(1) of the MAI Act and average the claimant’s earnings over 52 weeks.

PROCEDURAL HISTORY

The claimant’s PAWE was the subject of previous merit review determination M10490051/22 issued 19 April 2022.
In the previous decision I expressed concerns about the veracity of the claimant’s evidence and contentions, including:
(a)    IBS, a company in respect of which the claimant is the sole director and shareholder, charged consumers GST when not registered to do so (the question arises as to whether the claimant has failed to remit that GST to the Australian Taxation Office);
(b)    possible fictional employment of the claimant’s wife for the sole purpose of maximising IBS’s entitlement to Jobkeeper payments;
(c)    a contention total earnings of $84,900 in the 30 June 2021 tax return were received on or before 5 June 2021, which is inconsistent with source documents suggesting payments after 5 June 2021, and
(d)    the veracity of payslips from DT.
The state of the evidence was such that I did not consider the claimant’s witness statement to be reliable.
Questions also arise from the claimant’s evolving/inconsistent contentions as to his PAWE. The claimant’s representations regarding PAWE range from $1,321 to $2,307 in the context of this claim. In the context of the GIO claim he contended PAWE of approximately $4,000 being almost double his highest contention in this matter. There is no reasonable explanation for this having regard to the fact the claimant also alleges he was totally incapacitated for work and therefore received no earnings in the period between the two accidents from 4 April 2021 to 6 June 2021.
There is a vast difference between the two PAWE amounts contended by the claimant in the current claim (and an even greater difference in contrast to contentions to GIO). Of note, the claimant pressed the greater sum up to and including the previous merit review. It is likely the lower sum is now only contended because the claimant’s evidence has been scrutinised as a result of which issues have been raised, which the claimant has been unable to explain.
The claimant’s earlier contention his PAWE was around $1,000 higher than the sum now contended after his evidence was scrutinised is not readily explainable having regard to the claimant’s obligations under ss 6.3 and 6.24, particularly the duty to act honestly and not mislead. The $1,000 difference is significant. There is no reasonable explanation for the significant shift in the claimant’s position to a much lower sum other than the probability that the claimant had attempted to manipulate information with a view to maximising his entitlement to compensation under the MAI Act when he previously asserted PAWE in the higher sum of $2,307 (and indeed when he made assertions to GIO).
Further inconsistencies arise between the claimant’s contentions and material that has become available since the previous merit review, for example the claimant’s bank statements. The bank statements are not reconcilable with either the DT payslips or the claimant’s contentions regarding his earnings through IBS.
A question also arises from the bank statements as to whether the claimant fully disclosed all earnings received after 4 April 2021 to GIO, noting the extent to which GIO made weekly payments after this date and evidence in the bank statements that the claimant continued to receive wages after 4 April 2021 whilst in receipt of weekly payments from GIO.
It also appears probable the claimant misled GIO regarding the amount of gross earnings received from IBS in the period 8 February 2021 to 4 April 2021 given his current contentions. GIO calculated PAWE on the basis the claimant received average weekly earnings from IBS in this period in the sum of $1,628.31 in addition to average weekly earnings from DT of $2,307. This resulted in GIO calculating PAWE in the sum of approximately $3,950. Contrary to his contentions to GIO, the claimant contends in this matter earnings received from IBS from 8 February 2021 to 4 April 2021 totalled only $3,814.34, a figure that appears more plausible than the figure put to GIO. The period 8 February 2021 to 4 April 2021 over which earnings were received from IBS (noting the claimant’s 11 November 2021 statement that no earnings were received from IBS after 4 April 2021 due to total incapacity) is eight weeks. This makes the weekly average from IBS for the purpose of the GIO claim only $476.79. That figure falls far short of the weekly average of $1,628.31 contended by the claimant to GIO in respect of the same period. The claimant’s duties (and those of his solicitors, including under the solicitor conduct rules) under ss 6.3 and 6.24 require the claimant to immediately correct the position with GIO, even if it were a genuine mistake by the claimant (which I find difficult to accept on the evidence).
An issue to be determined is whether employment with DT is a significant change in earning circumstances under Schedule 1, cl 4(3) of the MAI Act and if so, the amount of gross earnings received by the claimant in the period commencing from the date he first commenced employment with DT until the day before the subject motor accident. The claimant contends this period is 8 February 2021 to 5 June 2021.
Contrary to the claimant’s contention all earnings from DT were received in this discreet period, there is evidence the claimant received payments from DT both before 8 February 2021 and after 5 June 2021. The claimant contends payment by DT before 8 February 2021 was a personal transaction and not wages noting the transaction description in his bank statement does not include the word “wages”. However, other transactions alleged to be wages, for example one on 2 June 2021, also does not include the word “wages” in the transaction description in the bank statements. The claimant’s contention about the earlier payment suggests it is also possible that payments after 8 February 2021 may also be personal transactions, not wages, given the deposit amounts cannot be reconciled with the payslips either by date or amount.
The claimant contends payments shown in his bank statements as having been received after 5 June 2021 (on 11 and 24 June 2021[1]) represent payment of wages for work carried out prior to 5 June 2021. That may be so, however, cl 4 is not concerned with when the work was performed or carried out. Clause 4 is concerned with when the earnings that were “received” by the claimant before the accident. Only earnings “received” by the claimant in the relevant pre-accident period under cl 4(1) or 4(2) count towards the claimant’s gross earnings for the purpose of calculating PAWE. Accordingly, payments made by DT to the claimant on 11 and 24 June 2021 are excluded from PAWE regardless of whether the payments represent work performed before 5 June 2021.
[1] There may be further payments after 5 June 2021 given the bank statements cannot be reconciled with the payslips but the claimant has failed to comply with directions requiring him to provide bank statements beyond 30 June 2021.
Given the contentions of the claimant that wages were paid belatedly after 5 June 2021 the DT payslips are clearly not a reliable means of determining the earnings “received” by the claimant before the accident, which is the concern of cl 4.
Any payments “received” after 5 June 2021 would need to be considered in determining the extent of loss of earnings for the purpose of calculating whether weekly payments are payable under Division 3.3 of the MAI Act. The claimant would also not be entitled to weekly payments from both GIO and the insurer in this matter in respect of the same loss of earnings period. It is unclear the extent to which GIO payments continued after the second accident on 5 June 2021, as the claimant has failed to comply with directions to provide bank statements to date. The two insurers should liaise regarding the extent to which weekly payments are being made/were made by each of them since 5 Jun 2021. It is also unclear whether the claimant disclosed earnings received from DT and IBS after 4 April 2021 (evidenced by the bank statements) to GIO for the purpose of GIO calculating whether he suffered a loss of earnings in any given week and if so, to what extent.
Having regard to the continuing unsatisfactory state of the claimant’s evidence and the inconsistencies, including a significant inconsistency as to what the claimant told GIO regarding his average weekly earnings from IBS from 8 February 2021 to 4 April 2021 in contrast to what he contends in this matter, I am of the view the claimant’s credit is in issue. As a result, the evidence is insufficient to determine:
(a)    whether the claimant first commenced work with DT on 8 February 2021;
(b)    if so, whether this amounted to a significant change in earning circumstances, and
(c)    if yes, the amount of income received by the claimant in the period 8 February 2021 to 5 June 2021.
On the current evidence, where the veracity of the DT payslips and the claimant’s credit is in question, one cannot even be certain if amounts paid into the claimant’s bank account represent wages or personal transactions. Even if accepted as wages, one cannot be comfortably satisfied that the amounts represent net wages rather than gross wages.
Documents required by the further directions (but not provided) would assist in determining the veracity of the payslips and the precise terms of any employment arrangement between the claimant and DT. For example, if the claimant was an employee of DT whereby DT deducted pay as you go tax and made superannuation contributions (as contended in the payslips) on behalf of the claimant rather than a “cash in hand” or subcontractor arrangement, the claimant’s superannuation statement should provide evidence in support of this. The claimant’s superannuation statement ought to be readily available to him through his MyGov account. There should also be a statement of income from DT lodged with the ATO available through the claimant’s MyGov account. The claimant ought to also be readily able to provide complete bank statements for the requested period.
On 21 February 2023 I issued directions which required the claimant to:
(a) comply in full with the directions of 19 April 2022, and
(b) provide further specified documents.
In the directions of 21 February 2023, the claimant was reminded that pursuant to ss 42 and 49 of the Personal Injury Commission Act 2020 (PIC Act) compliance with the directions is mandatory.
The claimant was required to comply with the directions of 21 February 2023 by 7 March 2023. The claimant failed to comply.
On or about 22 March 2023 the relevant Personal Injury Commission (Commission) officer sent a message to the claimant regarding the non-compliance. The claimant failed to respond to that message.
On or about 29 March 2023 the relevant Commission officer followed up the claimant again, by way of a telephone call with the practice manager from the claimant’s solicitor’s office. There has been no response from the claimant to this follow up.
On 18 April 2023 I issued further directions to the parties which extended time for compliance by the claimant with the directions of 21 February 2023 to 26 April 2023. The further directions again reminded the claimant that compliance was mandatory and put the claimant on notice that if the directions were not complied with and there is no request for an extension of time that the matter will be determined immediately on or after 27 April 2023 without further notice to the parties.
The claimant failed to comply with the directions of 18 April 2023. The claimant has not made any request for an extension of time and has not offered any explanation for the non-compliance.
In summary:
(a)    the claimant is in partial breach of directions issued 19 April 2022 in the previous merit review;
(b)    the claimant is wholly in breach of the directions dated 21 February 2023;
(c)    the claimant is wholly in breach of the directions dated 18 April 2023;
(d)    the claimant was indulged by way of two informal follow ups regarding non-compliance on or about 22 March 2023 and on or about 29 March 2023;
(e)    the claimant has not requested an extension of time;
(f)    the claimant has not offered any explanation for the breach of directions dated 19 April 2022, 21 February 2023 and 18 April 2023;
(g)    the claimant is legally represented, and
(h)    the claimant has had over 12 months to fully comply with directions dated 19 April 2022 and almost three months to comply with directions dated 21 February 2023.
Compliance with the directions ought not be onerous for the claimant. The documents ought to be readily available to the claimant.

CONSIDERATION

Given the claimant’s credit is in issue as is the veracity of his documentary evidence I am not comfortably satisfied there is a reliable method of calculating the claimant’s PAWE on the material before me. I am not comfortably satisfied on balance as to:
(a)    when the claimant first commenced earning with DT (if at all);
(b)    the circumstances of employment with DT and whether payments into the claimant’s bank account are net or gross wages, or whether they are wages at all;
(c)    the extent of earnings, if any, received from DT prior to 5 June 2021, and
(d)    the extent of earnings received from IBS in the 12 month period from 6 June 2020 to 5 June 2021 or in the discreet period 8 February 2021 to 6 June 2021.
Importantly, the claimant has the onus of proof in relation to establishing his PAWE.
By directions issued to the parties on 21 February 2023 the claimant was directed to provide further information. The directions were extended on 18 April 2023.
Pursuant to the guiding principle in s 42 of the PIC Act the claimant and their solicitors are both under a duty to cooperate with the Commission, including by complying with directions. Accordingly, compliance with the directions is mandatory.
The claimant failed to comply with the directions of 21 February 2023 despite indulgences he was given including an extension of time until 26 April 2023. None of the information required by the directions has been provided. No extension of time to comply with the directions has been sought by the claimant and no explanation as been offered by the claimant for their failure to comply with the directions. Accordingly, the claimant is in breach of the directions. The claimant and his solicitors are in breach of their duty under s 42 of the PIC Act.
Pursuant to s 54 of the PIC Act the Commission may at any stage dismiss proceedings:
(a)    if it is satisfied that the proceedings have been abandoned, or
(b)    if it is satisfied that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance, or
(c)    for any other ground of dismissal specified in the Commission rules.
The grounds specified under Rule 77 of the Personal Injury Commission Rules 2021 (the PIC Rules) for the purpose of s 54(c) of the PIC Act include:
(a) the applicant has failed, without reasonable excuse, to comply with a direction given by the Commission or the President; or
(b) the applicant has failed to prosecute the proceedings with due despatch.

Pursuant to PIC Rule 114(1)(d) section 54 applies to merit review proceedings.
Pursuant to PIC Rule 114(2) “a function given to the Commission in section 42 … of the PIC Act is to be read as being given to the merit reviewer conducting the merit review proceedings.”
Pursuant to PIC Rule 114(3) “a function given to the Commission in section … 54 of the PIC Act is to be read as being given to the President”.
Pursuant to PIC Rule 9:
“A non-presidential member or merit reviewer to whom applicable proceedings are referred may make any order relating to the procedure to be followed in the proceedings, including an order striking out the proceedings or any step in the proceedings, that could be made by the President.”
Pursuant to Rule 5(2)(d) applicable proceedings for the purpose of PIC Rule 9 include merit review proceedings.
Pursuant to PIC Rule 5 “merit review proceedings" are “are proceedings before a merit reviewer under enabling legislation”. Accordingly, these proceedings are merit review proceedings for the purpose of s 54 of the MAI Act and PIC Rule 114.
Accordingly:
(a) pursuant to PIC Rule 114 as merit reviewer I have power to issue directions to the parties and for compliance with the directions by the parties to be compulsory under s 42 of the PIC Act, and
(b) pursuant to PIC Rules 114 and 9 I have power to strike out the proceedings or to take any step in the proceedings that could be made by the President. This includes the power to dismiss the proceedings under s 54(c) of the PIC Act and PIC Rule 77.
The claimant has failed to comply with the directions issued on 21 February 2023 and extended on 18 April 2023, without reasonable excuse. As a result, the claimant has failed to prosecute the proceedings with due despatch.
In the circumstances I have determined that pursuant to s 54(c) of the PIC Act and PIC Rule 77(b)(ii) and/or (iii) the proceedings should be dismissed.

CONCLUSION

For the reasons set out above the proceedings are dismissed on the basis:
(a) the claimant has failed, without reasonable excuse, to comply with a direction given by the Commission or the President (PIC Rule 77(b)(ii)), and/or
(b) the claimant has failed to prosecute the proceedings with due despatch (PIC Rule 77(b)(iii)).

LEGISLATION AND GUIDLINES

In making this decision, I have considered the following:
· the Application, Reply and supporting documentation;
· MAI Act;

·        Motor Accident Guidelines,
· Motor Accident Injuries Regulation 2017;
·        PIC Act, and
·        PIC Rules.

[2023] NSWPICMR 27

15 May 2023