Lisica v NRMA (Motor Accident Injuries) - [2022] ACAT 98

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

LISICA v NRMA (Motor Accident Injuries) [2022] ACAT 98

MAI 2/2022

Catchwords: MOTOR ACCIDENT INJURIES – application for review of insurer’s decision pursuant to section 193 of the Motor Accident Injuries Act 2019 – calculation of applicant’s pre-injury weekly income (PIWI) – whether applicant was self-employed – whether common law principles of employment law apply to consideration of applicant’s employment status – onus of proof in procuring information about employment status – calculation of PIWI for self-employed persons – intent and application of “significant improvement in profitability of the business” in Guideline 5.2.4 of MAI (Income Replacement Benefit) Guidelines
Legislation cited: Fair Work Act 2009 (Cth) ss 12, 13, 14
Motor Accident Injuries Act 2019 ss 81, 82, 193

Subordinate
Legislation cited: Motor Accident Injuries (Internal Review) Guidelines 2019
Motor Accident Injuries (Income Replacement Benefit) Guidelines 2021

Cases cited:Coco v R [1994] HCA15
Commonwealth Bank of Australia v Barker [2014] HCA 32
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1
Fair Work Ombudsman v Jooine (Investment) Pty Ltd [2013] FCCA 2144
Neish v Insurance Australia Limited Trading as NRMA [2022] ACAT 24
Potter v Minahan (1908) 7 CLR 277
Thompsonv Australian Capital Television Pty Ltd (1994) 54 FCR 513
WorkPac Pty Ltd v Rossato [2021] HCA 23

Tribunal:Acting Presidential Member T Kyprianou
Date of Orders:  23 November 2022
Date of Reasons for Decision:       23 November 2022
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          MAI 2/2022

BETWEEN:

BELMA LISICA
Applicant
AND:

INSURANCE AUSTRALIA LIMITED ACN 000 016 722 TRADING AS NRMA

Respondent

TRIBUNAL:Acting Presidential Member T Kyprianou

DATE:23 November 2022

ORDER

The Tribunal orders that:

The Reviewable Decision dated 6 April 2022 be set aside and the matter be remitted to the respondent for reconsideration in accordance with the Motor Accident Injuries Act 2019 (MAI Act), the relevant Motor Accident Injuries (Income Replacement Benefit) Guidelines (Guidelines) and the directions made in the reasons for decision.
The same time periods for making the reconsideration decision apply as if order 1 was an application for internal review of the decision to reject liability received by the respondent received on the day after the date of these orders.
The applicant is to lodge with the tribunal and give to the respondent any application she wishes to make in relation to costs along with an itemised list of costs she has incurred, in accordance with regulation 6(2) of the Motor Accident Injuries (ACAT Costs Orders) Regulation 2020 by 14 December 2022.
The respondent is to lodge with the tribunal and give to the applicant any submissions it wishes to make, if any, in relation to any application by the applicant for costs and the applicant’s list of costs, or alternatively advise the tribunal and the applicant that it does not propose to make any submissions by 21 December 2022.
………………………………..

Acting Presidential Member T Kyprianou

REASONS FOR DECISION

The application for review of the insurer’s decision in this matter seeks review of an internal review decision made by the respondent on 6 April 2022 which affirmed an earlier decision by the respondent dated 14 March 2021 that the applicant’s pre-injury weekly income (PIWI) was $491.33.
Pursuant to section 54 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) and with the agreement of the parties, this matter has been decided on the papers without holding a hearing.
In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ refers to the Member who heard the application.

Background

The applicant was injured in a motor accident on 27 November 2021 on the Barton Highway in the Australian Capital Territory. She was a passenger in a motor vehicle which left the roadway and collided with a tree.
As a result of the injuries she sustained in that motor accident, she was unable to return to work. She applied to the respondent for payment of income replacement benefits.
At all material times, the applicant was a resident of Western Sydney. On the day of the accident, she travelled to Canberra with the owner of the company she was working with as a cleaner, her husband, and another colleague to carry out a commercial cleaning job. The motor accident occurred at about 8:30pm when they were on their way home to Sydney.
The applicant has stated that she started work as a cleaner with Waterblue Pty Ltd (Waterblue) in December 2020.[1] Prior to that she had been out of the workforce caring for her children. She had a history of work as a trainer and assessor teaching business management.[2]
[1] Email from applicant to respondent dated 16 March 2022 at 11:06am, MAI docs, page 198
[2] Benchmark Rehabilitation Initial Needs Assessment report, MAI docs, page 150
Between 4 December and 9 July 2021, the applicant worked 40 hours per week with Waterblue on 26 weeks. For the weeks that she worked, she invoiced Waterblue on a fortnightly basis for 40 hours of her labour per week at $35 per hour using an Australian Business Number (ABN) registered in her name. The owner of Waterblue, Mr Admir Arnautovic, who is the applicant’s brother, deposited $2,800 per fortnight in the applicant’s National Australia Bank account. These payments were all labelled “wages”.[3]
[3] See applicant’s NAB bank statements, invoices to Waterblue and remittance notices from Waterblue in MAI documents
These payments stopped on 9 July 2021.[4] The applicant has stated that she ceased work at that time because Western Sydney was put in lockdown by the NSW Government due to the COVID-19 pandemic.[5] She was unable to work again until November 2021 when the lockdown was lifted.
[4] NAB statement, MAI docs, page 67
[5] Email from applicant to respondent dated 16 March 2022 at 11:06am, MAI docs, page 198
The payments from Waterblue resumed on 12 November 2021 on a weekly basis. The applicant was paid $1,400 per week on 12, 19 and 26 November 2021.[6]
[6] NAB Statement, MAI docs, pages 72-74
After the motor accident of 27 November 2021, the applicant did not return to work and was no longer paid by Waterblue. Her last payment was on 26 November 2021.
It is agreed that as a result of the injuries the applicant suffered in the subject motor accident, she was unable to work at all from the date of the accident for a period. The inability to work continued at the time the applicant lodged her application with the tribunal.

Summary of the dispute between the parties

Both parties lodged submissions outlining their position in relation to the application for review.
The applicant’s primary submission is that the reviewable decision is wrong because the applicant’s PIWI was calculated on the assumption that the applicant was self-employed and thus the wrong test under the Motor Accident Injuries Act 2019 (MAI Act) was applied in calculating her PIWI. The applicant submitted further that had the respondent obtained sufficient information to ascertain the true status of the applicant’s employment, they would have found that the applicant was an employee and not a self-employed person. The applicant submitted that the respondent ought to have considered the contractual terms between the applicant and Waterblue and applied the test set out in a number of common law decisions to determine whether the applicant is self-employed or an employee. It was further submitted that there is insufficient information before the Tribunal for the Tribunal to determine the applicant’s employment status and the matter must therefore be remitted to the respondent for reconsideration.
The respondent made the following submissions:
(a)It did not err in fact or in law in determining the applicant’s PIWI as $491.33 as set out in the report of Mr Gwynne, forensic accountant from PKF(NS) Forensic Accountants Pty Limited (PKF).
(b)There has been no error of fact or law in the information gathered by the respondent in reaching that decision as they followed the Motor Accident Injuries (Income Replacement Benefit) Guidelines (Guidelines) in seeking that information.
(c)The applicant had the opportunity to submit information through her solicitor supporting the proposition that she was either an employee or fixed term contractor but did not do so.
(d)The documents sought from the applicant and obtained by the respondent were sufficient to establish the nature of her relationship with Waterblue and further investigations would have gone beyond the parameter of inquiry anticipated by the Guidelines.
(e)There was no error in establishing the applicant was self-employed because she carries on a business, to which she provides her labour, skills and knowledge; the applicant’s income and expenses from cleaning are conflated with those from conducting a training business; she has an ABN; she issues invoices to Waterblue for services rendered and she characterises her income as business income on her tax returns.
(f)The fact that she derives her income from providing her labour to her business is supported by the invoices she issues to Waterblue.
(g)There is no evidence that there is a fixed term contract between her and Waterblue.
(h)The fact that she provides invoices for services from time to time means that she is not an ongoing employee.
(i)The elements of being an employee at common law are not relevant to the definitions of ongoing employee/fixed term contractor/self-employed in the MAI Act as those terms are defined in the MAI Act and they make no reference to the “multifactorial approach” the common law has adopted in establishing whether a person is an employee/contractor/self-employed.
(j)The applicant has not provided any evidence that her work situation was ongoing.
(k)The applicant has deliberately chosen to structure her financial circumstances for tax purposes as a self-employed business owner and satisfies the MAI Act definition of self-employed businessperson. The Tribunal therefore does not have to look further than the applicant’s own self-characterisation. To classify her as an ongoing employee is inconsistent with her business structure and artificial.

Consideration of issues in dispute

Can the applicant’s employment status be determined solely by reference to the MAI Act and Guidelines?

The MAI Act defines self-employed person in section 82 to mean:
A person injured in a motor accident who was, on the date of the motor accident, self-employed.
Section 74 of the MAI Act defines self-employed as follows:
self-employed—a person is self-employed if the person derives income from providing labour, skills or knowledge to a business carried on by the person.
Under the above definition, for the applicant to be self-employed, the decision maker needs to be satisfied that on the date of the motor accident she carried on a business to which she provided her labour, skills or knowledge.
In some cases, establishing that a person carries on a business to which they provide labour, skills or knowledge is straight forward either because there is no dispute about the issue or because the documentary evidence overwhelmingly supports that they do so. However, in other cases establishing that a person provides labour, skills or knowledge to a business they carry on, is by no means easy.
In my view in the latter cases, it is necessary for the decision maker to reach a conclusion about the person’s employment status by considering the relevant facts in light of the provisions made in the MAI legislative scheme as well as the common law principles of employment law. This is because the MAI Act and Guidelines do not alter the common law doctrines of employment law, nor do they purport to define the terms ‘employee’ and ‘self-employed’ to the exclusion of common law doctrines.
Establishing the status of a person’s employment is necessary because the MAI Act and the Guidelines make different provisions for calculating a person’s PIWI depending on their employment status.[7]
[7] See sections 81-88 of the MAI Act
In order to determine whether a person is an employee or self-employed, one needs to look beyond the definition of those terms as defined in the MAI Act. The common law in Australia has dealt with the definition of the words ‘employee’, ‘self-employed’ and ‘contractor’ over many decades. There is nothing in the MAI Act which suggests that the Legislature intended to displace the complex principles developed over the years by the common law in defining those terms. In statutory interpretation, there is a presumption against alteration of common law doctrines.[8]
[8] See statement of O’Connor J in Potter v Minahan (1908) 7 CLR 277 at [304], cited with approval more recently in Coco v R [1994] HCA 15; Thompson v Australian Capital Television Pty Ltd (1994) 54 FCR 513 at [526]
I do not agree with the respondent’s submission that the indicia of establishing whether a person is an employee at common law are not relevant to the definitions of ongoing employee/fixed term contractor or self-employed person set out in the MAI Act, though those definitions make no reference to the “multifactorial approach” the common law has adopted in establishing whether a person is an employee, a contractor or self-employed.
In Commonwealth Bank of Australia v Barker,[9] their Honours French CJ, Bell and Keane JJ said:
The employment relationship, in Australia, operates within a legal framework defined by statute and by common law principles, informing the construction and content of the contract of employment.
[9] [2014] HCA 32 at [1]
The Fair Work Act 2009 (Cth) (FWA) regulates employment relationships for a large number of employers and employees in Australia including employers who are constitutional corporations[10] and their employees. The terms ‘employer’ and ‘employee’ are defined in that Act to “have their ordinary meaning”.[11] Their Honours Gageler and Gleeson JJ in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (trading as Construct)[12] (Construct) said in relation to those definitions:
The “ordinary meanings” to which that foundational definition refers are not grammatical meanings of the legislatively chosen words purposively construed in their statutory context. The reference in the definition is instead to the meanings ascribed to “employer” and “employee” at common law. ….
The meanings ascribed to “employer” and “employee” at common law have been formulated over the past two centuries principally in the context of drawing, for the purpose of tortious liability, “the distinction between employees…and independent contractors”… The common law distinction which has been drawn for that purpose has been said in this century in this country to be “too deeply rooted to be pulled out”.
[10] Section 14(1) of FWA
[11] See sections 12, 13, and 14 of FWA
[12] [2022] HCA 1 at [93]-[94]
Just as the common law definitions of employer/employee are relevant to the interpretation of the FWA, they are also relevant to the interpretation of the terms employee/self-employed in the MAI Act.
Is there sufficient information to conclude that the applicant is self-employed?
From the information available in the MAI documents and the respondent’s submissions, the evidence that suggests that the applicant may have carried on a business as a cleaner is the following:
(a)She had an Australian Business Number (ABN).
(b)She gave invoices to the Waterblue director once a fortnight initially and more recently once a week for 40 hours of her labour for each week that she worked.
(c)She described her income on her personal tax return as business income.
(d)She prepared profit and loss statements for the two financial years prior to the motor accident.
The income the applicant earned as a cleaner was the only income she claimed income replacement benefit for, following the motor accident.[13] I do not consider that the above evidence is sufficient to establish that the applicant earned her income as a cleaner through a business she owned as distinct from being an employee of another business, or to establish that she satisfies the definition of a self-employed person set out in the MAI Act.
[13] Defined Benefits Application, MAI docs, page 90
Having an ABN does not of itself establish that a worker is self-employed.[14] There is no information available to the Tribunal, nor was any available to the decision maker of the internal review decision, as to the reason the applicant gave Waterblue invoices with an ABN on them for the hours she worked each week. It may be that she was required by Waterblue to have an ABN in order to receive payment, or it may be that she was indeed conducting a cleaning business of her own and it was appropriate for her to use an ABN to earn her income. However, the information available to date cannot meaningfully establish the existence of a business owned by the applicant to which she provided her labour as a cleaner. Further, even if the applicant was conducting a business of her own to which she was supplying her labour as a cleaner, there is no information available to establish whether she was providing services to Waterblue, or Waterblue’s clients, under a fixed term contract. This needs to be established because if she was a fixed term contractor her PIWI would need to be calculated pursuant to section 81 and paragraph 5.1.4 of the Guidelines and not under section 82 of the MAI Act and paragraph 5.2 of the Guidelines.
[14] See for example Fair Work Ombudsman v Jooine (Investment) Pty Ltd [2013] FCCA 21[44 ](Jooine)
The invoices the applicant provided to Waterblue for the cleaning services she provided do not offer any support for the proposition that she was either an independent contractor or self-employed. She invoiced Waterblue for 40 hours of work for each week that she worked at $35 per hour. That is, she was paid a wage per hour rather than a fee for completing a job. This method of payment does not support that the applicant’s contract or agreement with Waterblue was a contract for service. It suggests instead that it was a contract of service and that she was working for Waterblue’s business.[15]
[15] See Construct at [158] and Jooine at [41]
The description by the applicant of her income in her tax return as small business income[16] is at best marginally helpful in determining whether she was self‑employed or an employee or both. The applicant appears to have received income from her coaching business at some stage during the 2020 and 2021 financial years. Both her 2020 and 2021 profit and loss statements are labelled “Coaching Profit and Loss Statement”.[17] However, she has not claimed that she lost any income as a result of the injuries she sustained in the motor accident from that business.
[16] MAI docs, page 31
[17] MAI docs, pages 14 and 63
She appears to have used the same ABN number as the coaching business to invoice Waterblue for her labour for cleaning work. She also described the income she earned from Waterblue in her 2021 income tax return as business income earned through that ABN. That description is consistent with the fact that the applicant was receiving her income by rendering invoices for her labour with the ABN on them, but it does not provide evidence of the existence of a cleaning service business.
Contrary to how her income is described in her tax return, the applicant has described herself as an employee both in her defined benefit application[18] where she nominated Waterblue and not herself as her employer and in her interview with Benchmark Rehabilitation.[19] In that interview she nominated Waterblue as her employer and listed her duties as cleaning duties without including any tasks pertaining to the conduct of a business, such as administrative or entrepreneurial tasks. During the interview, she also said that she had plans of running her own cleaning company one day[20] which indicates that she did not consider that she was conducting a cleaning business at the time of the motor accident.
[18] MAI docs, page 90
[19] MAI docs, pages 149-150
[20] MAI docs, page 150

How a worker labels their employment status is hardly relevant to the characterisation of that status. As the plurality stated in Construct:
To say that the legal character of a relationship between persons is to be determined by the rights and obligations which are established by the parties’ written contract is distinctly not to say that the “label” which the parties may have chosen to describe their relationship is determinative of, or even relevant to, that characterisation.[21]
[21] Construct at [79]
The characterisation by the applicant of her income as business income and her inconsistent description of herself as an employee cannot be determinative factors in deciding her employment status.
The PKF forensic accountants report commissioned by the respondent[22] states under the heading “Income and Expenses in 52 weeks prior to DOA”: “there are additional bank deposits that appear to relate to business income derived, however, we have not been provided with copies of invoices [for that income].” Further, the applicant’s 2021 tax return and profit and loss statement list business expenses which are more consistent with a coaching business rather than a cleaning business. These include “teaching resources and courses” and “printing and stationery”. It does not appear that any inquiries were made of the applicant as to whether the income which was not supported by the Waterblue invoices/remittances, and the expenses declared in the tax return related to her work as a cleaner or income she had earned and expenses she incurred through another business she conducted before the date of the accident. This is important because section 82(3) of the MAI Act states that self-employed person means a person injured in a motor accident who was, on the date of the motor accident, (emphasis added) self-employed. If the applicant conducted a business before the motor accident, which ceased operating by the time of the motor accident, then she may not be self-employed for the purposes of section 82 of the MAI Act.
[22] MAI docs, pages 170-173
The respondent has submitted that the applicant had conflated her cleaning business with her training or coaching business. However, apart from the documents and information set out in the paragraphs above, which in my view are not sufficient to establish that the applicant was self-employed as a cleaner, there is no other information supporting that the applicant conducted a cleaning business at the time of the motor accident.
Similarly, there is insufficient information to lead comfortably to the conclusion invited by the respondent’s submission that the applicant has deliberately chosen to structure her financial circumstances for tax purposes as a self-employed business owner. Her business’s profit and loss statements, include the income she has earned as a cleaner, however, they are labelled as the profit and loss statement of the coaching business. It is not clear which, if any of the expenses she has listed on that statement relate to the cleaning services she provided to Waterblue. In my view, further inquiries need to be made and information obtained before a decision can be made as to whether the applicant conducted a business to which she provided labour, skills or knowledge at the time of the motor accident.
What information is required to establish the applicant’s employment status?
The MAI Act defines ongoing employee or fixed term contractor in section 81(2) as follows:
ongoing employee or fixed term contractor means a person injured in a motor accident who was, on the date of the motor accident engaged in ongoing employment or under a fixed term contract.
The starting point in determining whether a person is an ongoing employee or fixed term contractor under the definition above would be the written contract, if one exists, between the person and the entity which pays the person their income. The documents available to the Tribunal do not include any such contract, nor is there any evidence that the respondent asked the applicant to produce the contract between her and Waterblue. Prior to the application for external review, the applicant and her legal representative also made no reference to any such contract. Counsel for the applicant has asserted in submissions that no written contract exists. This may be so. However, given the importance of a written contract in establishing the true nature of the employment status of the applicant, which I discuss below, I consider it is essential that actual evidence, as distinct from a submission, be procured about its existence or lack of it.
Even if the applicant was at the relevant time self-employed, which for the reasons I set out above the available information so far does not establish, she may have sub-contracted to Waterblue for a fixed term. A written contract if one exists should establish this. On the other hand, if there is no written contract, inquiries ought to have been made as to the agreed terms of any oral agreement between the applicant and Waterblue about the arrangement between them including the length of time Waterblue proposed to offer the applicant work.
In order to establish whether the applicant was employed by Waterblue as an on-going or a casual employee or in the alternative was self-employed and subcontracting to Waterblue, the terms of the agreement between them needs to be examined closely and assessed against the doctrines established in common law which determine whether a worker is an employee or an independent self‑employed contractor.
Those doctrines were analysed and to a certain degree reconstituted in Construct. In that case, the worker was a backpacker on a working holiday in Australia. He entered into an agreement with the respondent, Construct, which was a labour supply company. Under the terms of that agreement, the worker was engaged as a “self-employed contractor” to supply his labour to builders. He was offered work on a building site. The builder at the building site had an agreement with Construct to supply workers to its building sites. After he was dismissed by Construct, the worker, Mr McCourt, sought damages for contraventions of the FWA from Construct. He submitted that he was in fact an employee of Construct and not a self-employed contractor. Like the applicant in this matter, Mr McCourt provided invoices to Construct on a weekly basis and he was paid at an hourly rate. Six of the seven justices of the High Court held that Mr McCourt was an employee despite the agreement between him and Personnel describing him as self-employed. Kiefel CJ, Keane and Edelman JJ, held that:
Where the parties have comprehensively committed the terms of their relationship to a written contract the validity of which is not in dispute, the characterisation of their relationship as one of employment or otherwise proceed by reference to the rights and obligations of the parties under the contract….
…
The foregoing should not be taken to suggest that it is not appropriate, in the characterisation of a relationship as one of employment or of principal and independent contractor, to consider “the totality of the relationship between the parties” by reference to indicia of employment that have been identified in the authorities”.[23]
[23] Construct at [59] and [61]
Their Honours Kiefel CJ, Keane and Edelman JJ in that case found that despite the written contract naming him as self-employed the worker was an employee because under the terms of the agreement with Construct he was obliged to work for Construct’s customer and was entitled to be paid by Construct. Construct, had the right to fix his remuneration, was responsible for paying him, had control over him and could terminate the agreement between them if he did not obey directions issued by Construct or the builder who was Construct’s customer.[24]
[24] Construct at [71]
In the same case, Gageler and Gleeson JJ held that Mr McCourt, was an employee for the following reasons:
First, Mr McCourt was engaged by Construct under the ASA to supply nothing but his labour to Hanssen, which he in fact did and for which he was paid an agreed hourly rate by Construct. Second, by supplying his labour to Hanssen, Mr McCourt was at the same time supplying his labour to Construct for the purpose of Construct’s business. He was not in any meaningful sense in business for himself. Third, and most importantly, when supplying his labour to Hanssen, Mr McCourt was subject to the direction and control of Hansenn through the back to back operation of his obligation to Construct under the ASA and Construct’s obligation to Hanssen under the LHA. Those aspects of the relationship made it a relationship of employment.[25]
[25] Construct at 158
Turning to this case, the information available establishes that the applicant supplied her labour to clients of Waterblue and was paid an hourly rate for that labour by Waterblue.[26] By supplying her labour to Waterblue’s clients, she was at the same time supplying her labour to Waterblue so that it could conduct its business. As was the case in Construct, there is no evidence available so far that the applicant was in any meaningful sense in business for herself as a cleaner at the time of the motor accident. It is not entirely clear to what extent she was subject to the direction and control of the director of Waterblue in carrying out her tasks as no inquiries have been made in relation to this issue.
[26] Benchmark Rehabilitation report and invoices/remittances to and from Waterblue, MAI docs, pages 149-150
The majority in Construct held that the control and direction that the putative employer had over the worker was a very important factor in determining whether the worker was an employee or self- employed. Kiefel CJ, Keane and Edelman JJ, put it in these terms:
Th[e] promise to work for Construct’s customer, and his entitlement to be paid for that work, were at the core of Construct’s business of providing labour to its customers. The right to control the provision of Mr McCourt’s performance of work for, and at the direction of, Hanssen was a direct result of the deployment by Construct of this asset in the course of its ongoing relationship with its customer.
In these circumstances, it is impossible to conclude other than that Mr McCourt’s work was dependent upon, and subservient to, Construct’s business. That being so, Mr McCourt’s relationship with Construct is rightly characterised as a contract of service rather than a contract for services.[27]
[27] Construct at [89] and [90]
It is clear from the passages in Construct set out above that in order to ascertain whether the applicant was self-employed or an employee at the time of the motor accident information needs to be obtained from the applicant and Waterblue about the terms of the agreement between them. If there is a written contract, its terms will be crucial in establishing the relationship between the parties. If there is no written contact, information needs to be procured as to the agreed terms between the applicant and Waterblue including whether the agreement between them was entirely oral or partially oral and partially written. Central to those inquires is whether Waterblue exercised control over the applicant in the way she carried out her work for Waterblue’s customers or whether she was autonomous in the way she worked. In other words, was she supervised by Waterblue or its director in the way she carried out her work? Did Waterblue have the right to control the work of the applicant? Was she directed where to work each week and what tasks to carry out? Could Waterblue terminate the agreement between it and the applicant if Waterblue or its customers were dissatisfied with the standard of her work? To what extent did the applicant act in the business of, and under the control and direction of Waterblue?[28] For how long was the agreement between them to continue and how could it be terminated by either party?
[28] See paragraph 62 in Construct where the court cited with approval the test first formulated in WorkPac Pty Ltd v Rossato [2021] HCA 23.
The applicant also needs to be asked to provide information about the setting up of her business, including when she set it up, whether it was trading at the time the motor accident occurred, what was the nature of that business, which of the expenses she claimed in her 2020/2021 tax return related to the cleaning work she performed, why she rendered invoices with her ABN to Waterblue, and why she declared her income from Waterblue as business income in her tax return, if, as she has stated, she was employed by Waterblue.
The first step in assessing the applicant’s PIWI is to ascertain the applicant’s employment status as self-employed, ongoing employee, fixed term contractor, or casual employee. The information necessary to make that assessment is currently insufficient. The respondent relied on the report of PKF which calculated the applicant’s PIWI on the assumption that she was self-employed. That assumption was based partly, on the erroneous fact that she had disclosed that she was a self-employed cleaner in her application for defined benefits.[29]
[29] MAI docs, page 170
Further information needs to be obtained from the applicant and Waterblue about the agreement between them which led to the applicant providing cleaning services to Waterblue and its clients and receiving payment from Waterblue for those services. This is a necessary prerequisite to a determination of the applicant’s PIWI.
Does the applicant’s failure to provide information establishing her employment status mean the reviewable decision is correct?
In my view, the short answer to the above question is no.
The respondent has submitted that the applicant had the opportunity to submit information through her solicitor supporting the proposition that she was either an employee or fixed term contractor but did not do so. She also did not provide any information that she had an ongoing contract with Waterblue. Neither the applicant nor her solicitor provided such information to the respondent before the reviewable decision was made. However, this does not mean that the respondent’s decision is correct in fact and law.
The role of the Tribunal is to determine whether the decision is correct on the facts and the law.[30] As stated earlier, in my view, the respondent was in error in assuming that the definitions of self-employed and employee as they appear in the MAI Act are exclusive of the common law principles defining those terms.
[30] See section 193 of the MAI Act and [2022] ACAT 24 at [17]-[20]
Further, the respondent relied on the PKF report the respondent commissioned which proceeded on the assumption that the applicant was self-employed. The information the applicant was asked to produce was insufficient to establish her employment status and the kind of relationship she had with Waterblue through which she derived income from personal exertion at the time of the motor accident.
The MAI Act does not impose an onus of proof on either party. The applicant has a duty under section 20 of the Act to disclose all relevant information in relation to her claim and to provide information reasonably requested by an insurer. There is no suggestion that the applicant has failed to provide any of the information she was asked to provide by the respondent.
The lawyer who represented the applicant at the time should have been aware of the significance of providing more information about her employment status, especially when an internal review of the decision was sought. However, the MAI legislative scheme envisages that injured people will lodge their claims without the need for legal representation and that the relevant insurer will guide the procurement of whatever information is necessary to assess a claim. Applicants for defined benefits cannot recover legal fees incurred in obtaining legal advice and representation in relation to their claims prior to the external review stage. Under these circumstances, I am not prepared to dismiss the applicant’s application on the basis that her lawyer did not provide any pertinent information to challenge the respondent’s finding that the applicant was self-employed at the internal review stage.
The respondent had a duty to obtain information pertinent to the review of the decision. The internal review Guidelines, which were applicable at the time of the internal review, provide at paragraph 4.2.5 that the insurer should request the applicant to provide any information or documents reasonably required for the review. There is no evidence before the Tribunal that the respondent raised with the applicant that she needed to provide any further information about her employment status during the review process. The fact is that neither party turned their mind to the employment status of the applicant in conducting the review, despite the glaring shortcomings in the process engaged to determine her employment status in the first instance decision.
Was the PIWI correctly calculated if the applicant is self-employed?
Though I propose to set the decision aside because it was made on the assumption that the applicant was self-employed and that assumption is not supported by the facts, or by the common law doctrines which establish who is a self-employed person, I do not consider the decision was correctly made even if the available information was sufficient to conclude that the applicant was self-employed.
The PIWI of a self-employed person is calculated pursuant to section 82 of the MAI Act. That section states:
pre-injury weekly income, for a self employed person, means the average weekly amount of the sum of the following amounts from all paid work undertaken by the person in the 52 weeks immediately before the date of the motor accident:
i. the person’s gross income as an employee;
ii. the person’s net income as a self-employed person.
Section 88 of the MAI Act provides that the MAI guidelines[31] may make provision in relation to the matters to be taken into account to determine an injured person’s PIWI or pre-injury earning capacity.
[31] The MAI Commission may make guidelines about any matter required or permitted by the MAI pursuant to section 487 of the MAI Act. An MAI Guideline is a disallowable instrument - section 487(5)
In order to calculate the average weekly amount, one must therefore turn to the Guidelines. I note that the PKF report upon which the respondent relied to make the reviewable decision refers to the MAI (Income Replacement Benefit) Guidelines 2019. Those Guidelines had been repealed and replaced by the MAI (Income Replacement Benefit) Guidelines 2021 on 9 December 2021. However, the effect of the 2019 Guidelines set out in the PKF report are no different to the 2021 Guidelines. Those Guidelines provide advice to insurers about a number of matters including how to work out the amount of a benefit payment.[32]
[32] Paragraph 1 of the Guidelines
Paragraph 5.2 of the Guidelines deals with the calculation of PIWI for self‑employed persons. Relevantly, paragraph 5.2.1 provides that an insurer will need to work out the net income a self-employed person derives, or will derive, from the personal services (labour, skills or knowledge) the person provides, or will provide to a business to calculate the person’s PIWI or pre-injury earning capacity. Paragraph 5.2.3 provides that the insurer is to base their calculation of net income of a self-employed person using the net income figure in the last tax return of the business (emphasis added), to determine the person’s pre-injury weekly income. It provides further that an insurer should use the 12-month period for the tax return to determine the person’s PIWI rather than the 52 week period immediately prior to the accident.
In this case, there was no business tax return. If the applicant was self-employed, she was a sole trader. The only available tax return was the applicant’s personal tax return which declared all of the income she earned through the invoices for her labour which she provided to Waterblue.

Paragraph 5.2.4 of the Guidelines relevantly states that if a tax return has not been lodged, or there has been a significant improvement in profitability of the business, a weekly income figure is to be calculated using recent financial statements, accounting records and business activity statements for the business. If a person is starting a new business, the insurer is to base the calculation of financial projections for the business prepared prior to the accident.
As the applicant was a sole trader, she did not need to lodge a business tax return because all of the income earned through the business was declared in her personal tax return. Her personal tax return was therefore treated by PKF as the tax return in respect of the business.
PKF reasoned that there had not been an improvement in the profitability of the applicant’s business in the 52 weeks prior to the motor accident date when compared with the applicant’s profitability in the 2021 financial year. Accordingly, they assessed the applicant’s PIWI based on the income and expenses declared in the 2021 tax return.
In my view, this reasoning is not in accordance with the advice provided in Guideline 5.2.4. The Guideline does not stipulate that the improvement in profitability of the business must be compared to the 52 weeks prior to the accident. In fact, there is no period stipulated over which a significant improvement in profitability must be shown. All that needs to be established is that there has been a significant improvement in profitability as compared to the average weekly income derived from the last tax return prior to the motor accident.
The applicant has stated that she did not work between July 2021 and early November 2021 because of a COVID-19 lockdown imposed by the health authorities in NSW which prevented her from working or leaving the local council area she lived in.[33] This statement has not been challenged by the respondent.
[33] Email from applicant to respondent, MAI docs, page 198
The applicant’s business’s profitability improved significantly initially on 4 December 2021 because she started what appears to have been reasonably regular work with Waterblue. The information available suggests that the business’s income was interrupted by the COVID-19 lockdown between 10 July and 12 November 2021. The profitability of the business improved again in early November when the applicant could return to the work provided by Waterblue once the COVID-19 lockdown restrictions were lifted.
The author of the PKF report did not make any adjustment for the significant profitability of the business of the applicant which occurred in December 2020 due to the arrangement entered into with Waterblue, nor for the improved profitability following the lifting of the COVID-19 lockdown in early November 2021. He merely used the income earned by the applicant over the 2021 financial year, even though the information available supports that prior to December 2020 she was not conducting a business as a cleaner and the business she had conducted in the past as a trainer had either been dormant or much less profitable than cleaning.
The applicant’s business’s financial position improved significantly when she entered into the arrangement with Waterblue to provide cleaning services in December 2020. That arrangement was interrupted by the COVID-19 lockdown for some months but it resumed once the lockdown was over. The applicant’s business was then earning the same amount as it was prior to the lockdown. The financial records which showed the improved profitability from 4 December 2020 to 30 June 2021 ought to have been used to calculate the applicant’s weekly income. Averaging those earnings over 52 weeks defeats the purpose of paragraph 5.2.4 of the Guidelines which is to ensure that an injured self-employed person who can demonstrate that their business would have provided them with a higher income going forward can receive the benefit of that higher income despite their injury.

Conclusion

For the reasons set out above the decision under review is set aside and remitted to the respondent for reconsideration. I make the following directions in relation to the reconsideration:
(a)The respondent must obtain from the applicant and Waterblue Pty Ltd information pertaining to the terms of contract or agreement between the applicant and Waterblue, relevant to establishing the applicant’s employment status, including but not limited to, the information set out in paragraphs 48 and 49 of these Reasons.
(b)The applicant must provide to the respondent any information the respondent requests which is reasonably required to establish her employment status and any documents in her possession or control which are relevant to her employment and/or her business.
………………………………..

Acting Presidential Member T Kyprianou

Date(s) of hearing:	In chambers on the papers.
Counsel for the Applicant:	Mr B Jullienne
Solicitors for the Applicant:	Mr S Dalliwall, Gajic Lawyers
Solicitors for the Respondent:	Ms S McJannett, HWL Ebsworth