Michael v QBE Insurance (Australia) Limited
[2023] NSWPICMR 61
•14 December 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Michael v QBE Insurance (Australia) Limited [2023] NSWPICMR 61 |
| CLAIMANT: | Jack Michael |
| INSURER: | QBE |
| MERIT REVIEWER: | Katherine Ruschen |
| DATE OF DECISION: | 14 December 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; dispute about payment of weekly benefits under division 3.3 of; meaning of earner; schedule 1, clause 2; meaning of pre accident weekly earnings; schedule 1, clause 4; duty to co-operate; section 6.24; sufficient evidence to determine the validity of the claim; insufficient evidence; onus of proof; Held – the reviewable decision is affirmed. |
| DETERMINATIONS MADE: | CERTIFICATE Issued under s 7.13(4) of the Motor Accident Injuries Act2017 DETERMINATION 1. The reviewable decision is affirmed. |
STATEMENT OF REASONS
INTRODUCTION
There is a dispute between Jack Michael (the claimant) and the insurer about the amount of weekly payments of statutory benefits payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
The insurer has also raised a dispute as to whether the claimant has complied with the insurer’s reasonable request for further information and documents pursuant to s 6.24 of the MAI Act.
The claimant was involved in a motor accident on 15 January 2023.
On 23 January 2023, the claimant made an Application for personal injury benefits (claim form) under the MAI Act.
The insurer paid weekly statutory benefits for the first entitlement period on the basis of interim payments under s 3.6(5) as there was insufficient information upon which to calculate pre-accident weekly earnings (PAWE).
On 17 May 2023, the insurer determined weekly statutory benefits were not payable after the first entitlement period because there was insufficient information to determine whether the claimant was an earner (the reviewable decision). The insurer has since clarified the reference to whether the claimant was an earner was incorrect. The insurer now says they accept the claimant is an earner for the purpose of the MAI Act. It appears what the insurer intended to convey was that weekly statutory benefits are not payable after the first entitlement period because there continues to be insufficient information upon which to calculate PAWE for the purpose of s 3.7 and interim payments are not available after the first entitlement period.
On 3 October 2023, the claimant requested an internal review of the insurer’s decision of 17 May 2023.
On 26 October 2023, the insurer refused to conduct an internal review of their decision dated 17 May 2023 because the claimant had provided insufficient information for the purpose of determining the amount of statutory benefits payable. The insurer’s letter of 26 October 2023 erroneously refers to statutory benefits payable under s 3.4 of the MAI Act. However, this dispute is about weekly statutory benefits under Division 3.3.
The claimant has made an application for a merit review of the reviewable decision dated 17 May 2023 (the Application).
SUBMISSIONS
The claimant is legally represented. The claimant has not provided any submissions. The Application simply states the claimant seeks an “assessment of wages”. The documents suggest that by this the claimant seeks a review of his PAWE amount. Presumably this is for the purpose of challenging interim payments in the first entitlement period under s 3.6 and/or claiming weekly statutory benefits after the first entitlement period, under s 3.7. Calculation of PAWE is relevant to the amount payable under both ss 3.6 and 3.7.
The insurer submits this is a miscellaneous claims assessment about the insurer’s liability to pay statutory benefits where the claimant has failed to comply with the insurer’s reasonable request for further information. The insurer submits that a direction ought to be issued to the claimant under s 6.6(1) of the MAI Act for production of the information and documents requested by the insurer.
The insurer has to date made repeated requests for the claimant to produce further information and documents including bank statements of the claimant and relevant companies, lodged tax returns and notices of assessment. To date, these documents have not been provided by the claimant.
ISSUES
On the information before me the following issues arise:
(a) whether the claimant is an earner under schedule 1, cl 2 of the MAI Act (whilst the insurer concedes the claimant is an earner the documents before me put this in issue);
(b) the amount of the claimant’s PAWE under schedule 1, cl 4, and
(c) whether the claimant has complied with their duty to co-operate under s 6.24 and if not, whether the claimant has a reasonable excuse for the failure to comply.
JURISDICTION
The insurer submits this is a miscellaneous claims assessment under Schedule 2, cl 2(n) on the basis it is a dispute about whether the insurer has a liability to pay weekly statutory benefits in circumstances where the claimant has not complied with their duty under s 6.24. The insurer submits “there is no dispute about the amount of statutory benefits payable”.
The contention there is no dispute about the amount of weekly statutory benefits payable is not supported by the documents. Clearly, there is a dispute about this. The insurer paid interim payments in the first entitlement period because it could not determine the amount payable as it was unable to calculate PAWE. The insurer ceased payments after the first entitlement period because interim payments are no longer available and there continued to be insufficient information upon which to calculate PAWE. This means that the insurer is unable to calculate the amount, if any, payable under s 3.7. It is therefore incorrect to submit “there is no dispute about the amount of statutory benefits payable”. Clearly, this is the dispute.
Whilst errors in the insurer’s communications to the claimant (erroneous references to s 3.4 and whether the claimant is an earner) may have caused some confusion it is clear that the ongoing dispute has been calculation of PAWE and in turn, the amount payable under Division 3.3 of the MAI Act for weekly statutory benefits. The Application requests an “assessment of wages”. In the context of the documents this can only be a request for a merit review about PAWE.
A dispute about PAWE is a merit review matter under Schedule 2, cl 1(a). A dispute about whether the claimant has complied with s 6.24 is a merit review matter under schedule 2, cl 1(x). I therefore have jurisdiction as a merit reviewer to determine this dispute.
REASONS
Background facts and analysis of evidence
The claimant is 67 years of age.
Pursuant to s 23(5A) of the Social Security Act 1991 (Cth) the claimant, born in November 1955, reached retirement age (66 years and 6 months) on 5 May 2022. Pursuant to s 3.13(2) of the MAI Act, the claimant is not entitled to payment of weekly statutory benefits after the expiration of 12 months after the motor accident. Accordingly, his entitlement to weekly benefits, if any, ceases on 14 January 2024.
The claimant declared on 20 January 2023, by signing his claim form, that he was away from work as a result of the accident until 2 February 2023. However, as at the date the claimant signed the claim form this was a future date and was therefore speculation at the time.
In his claim form the claimant declared he was employed as an accountant at the time of the accident on a self-employed basis through Sydney Tax & Superannuation Services Pty Limited earning “$30,000”.
The claimant has since contended that at the time of the accident he was a self-employed accountant and also a handyman trading under “J & V Michael”.
Sydney Tax & Superannuation Services Pty Limited (Sydney Tax) and J & V Michael Pty Limited (J & V) are registered corporations. It is understood the claimant is a shareholder of both companies, but I have not seen evidence of this. Australian Securities and Investments Commission (ASIC) company extracts identifying directors, other officeholders and shareholders of the companies have not been provided to me.
The claimant has provided an incomplete copy (page 9 of 9 is missing) of an unsigned, undated individual tax return for 2021 (the 2021 draft tax return). The document is not declared by the claimant or his tax agent and there is no evidence the claimant lodged a tax return identical to the 2021 draft tax return. The claimant has not provided a copy of the notice of assessment issued by the Australian Taxation Office (ATO) for the 2021 tax year, which might verify his declared earnings for 2021.
The claimant has provided a partial copy of his 2022 individual tax return (page 8 of 8 is missing) (the 2022 draft tax return). Again, the information in the tax return is unverified as the document is not signed or dated by either the claimant or his tax agent and the corresponding 2022 notice of assessment has not been provided. Of note, the 2022 draft tax return was prepared on 3 March 2023 that is, after the motor accident. Accordingly, caution is to be exercised regarding its contents particularly in circumstances where the claimant has failed to provide any source documents whatsoever to verify receipt of the alleged wages recorded in the 2022 draft tax return.
The 2022 draft tax return contends that in the period 1 July 2021 to 30 June 2022 the claimant received $10,000 in earnings from Sydney Tax. There are no documents in support of this contention.
There is a payslip dated 27 January 2023 from Sydney Tax purportedly paying earnings to the claimant in the sum of $15,000 for the period 20 January 2023 to 26 January 2023. The year to date (YTD) earnings recorded on this payslip are also $15,000. Therefore, according to the payslip the claimant received no income from Sydney Tax in the period from 1 July 2022 to 14 January 2023 being the day before the accident. However, in the period after the accident from 15 January 2023 to 27 January 2023 the claimant received earnings of $15,000 said in the payslip to represent 40 hours (that is, full time work) in the period 20 January 2023 to 26 January 2023. The following concerns arise from this evidence:
(a) the claimant’s speculation in his claim form which he signed on 20 January 2023 that he would be away from work as a result of the accident until 2 February 2023 did not transpire as according to the payslip the claimant had returned to full-time work by 20 January 2023 (the same date the claimant signed the declaration in the claim form declaring he would be away from work as a result of the accident until 2 February 2023), and
(b) the claimant’s subsequent contention he did not return to work until 3 February 2023 appears to be untrue, as Sydney Tax paid him full-time wages for the week 20 January 2023 to 26 January 2023.
Based on the payslip it appears the claimant may not be entitled to weekly statutory benefits under s 3.6 on the basis there is no loss of earnings, as he was paid $15,000 on 27 January 2023, which appears to be more than he had earned from Sydney Tax in the two years preceding the accident (noting for example that in the 12 months from 1 July 2021 to 30 June 2022 total gross earnings from Sydney Tax were only $10,000 according to the 2022 draft tax return and in the 2021 draft tax return there is no active income/wages from either Sydney Tax or J & V).
An email from Mustafa Timmimi, principle accountant and tax agent of Sydney Tax also raises questions about the veracity of information provided by the claimant.
The claimant contends in December 2022 he received $25,000 in gross wages from Sydney Tax. When asked by the insurer to provide source documents verifying this payment Mr Timmimi provided the payslip dated 27 January 2023 referred to above which does not support a contention the earnings were received before the accident. The payslip records that the earnings were paid after the accident on 27 January 2023. The YTD earnings recorded in the payslip confirm there had been no previous wages paid to the claimant in the period 1 July 2022 to 26 January 2023 and therefore no December 2022 wages, as contended by the claimant.
Mr Timmimi contends the $10,000 balance of the alleged $25,000 December 2022 payment by Sydney Tax to the claimant was a “share of the profit”. However, neither the claimant nor Sydney Tax has provided any source documents such as company resolutions or bank statements confirming a dividend payment to the claimant during the 12 months before the accident.
The 2022 draft tax return, prepared after the motor accident, contends earnings of $10,000 gross from Sydney Tax in the period 1 July 2021 to 30 June 2022. However, the are no documents to verify this contention. Perhaps this sum is the profit share referred to by Mr Timmimi.
There are no ATO statements of income. There is no notice of assessment verifying a tax return was lodged in the form of the 2022 draft tax return, or at all. There are no bank statements of the company or the claimant to show payment by Sydney Tax or receipt by the claimant of this sum.
Even if the 2022 draft tax return was accepted as reliable evidence there is no evidence to establish the date(s) on which the claimant received $10,000 in wages from Sydney Tax. There is no evidence to establish it was received in the 12 month pre-accident period commencing from 15 January 2022. As the tax return also covers the period prior to this from 1 July 2021 to 14 January 2022 the claimant must establish he received the payment on or after 15 January 2022 for it to be included in PAWE under Schedule 1, cl 4(1) of the MAI Act.
The 2022 tax return contends $47,206 was received in wages by the claimant from J & V. However, there are no source documents whatsoever to verify any income of this company let alone any payment to the claimant in the 12 month pre-accident period.
An Australian Business Number (ABN) lookup reveals J & V does not have any trading name other than the company name “J & V Michael Pty Limited” also being the trading name. It is not registered for Goods and Services Tax (GST) so it can be assumed, if the company does trade, that the annual gross turnover is less than $75,000.
There is no evidence that J & V runs a handyman business. Employment with J & V is not mentioned by the claimant in his claim form. There is nothing in the company and trading name (which are the same) to suggest to consumers this is a business available to provide handyman services. The company does not appear to have any social media or business presence on the internet and no documents have been provided that might demonstrate the company operates a handyman (or any) business.
There are no tax returns, profit and loss statements or other financial records of J & V to establish whether J & V received trading income from a handyman business or investment only income through rental properties or other investments (or any income at all).
The amount recorded as earnings from J & V in the 2022 tax year is said to be broken down as follows:
(a) $28,324 from handyman services, although this appears to be a guestimate based on 60% of total income of the business, and
(b) $18,882 from passive income through rental investment properties.
It is unclear why the claimant, an accountant, would need to provide a guestimate as to the breakdown. The claimant ought to have proper records of the precise breakdown for the company’s and his own tax purposes and ought to be in a position to provide such records to the insurer. It also seems unusual that as an accountant the claimant would include dividend payments by J & V from investment properties as salary and wages in the 2022 draft tax return instead of properly categorising dividend payments separately.
Pursuant to Schedule 1, cl 3(1) “loss of earnings” means a “loss… in a person’s income from personal exertion”. It follows that where the word “earnings” is used in the MAI Act including in cl 4 (and where it is not otherwise defined) it means income from personal exertion. Pursuant to cl 3(3)(b) “income from personal exertion” does not include “rents or dividends”. Accordingly, there is a distinction in the MAI Act between active and passive income. Rents or dividends earned by a person amount to passive income and are excluded from “earnings” for the purpose of the MAI Act. Accordingly, the investment income from J &V is excluded from PAWE.
There is no evidence the balance of the amount said to be from J & V in the 2022 draft tax return was received by the claimant as wages, if at all. There is no evidence that J & V had any trading income from a handyman business such that it was able to pay wages to the claimant from trading profit as distinct from rental income. There is no evidence that the portion of the J & V amount in the 2022 draft tax return said to be wages was received by the claimant on or after 15 January 2022. It may have been received by the claimant before 15 January 2022 given the period covered by the draft tax return includes the earlier period from 1 July 2021 to 14 January 2022.
The claimant has provided unverified 2021 and 2022 company tax returns and some business activity statements for Sydney Tax. He has also provided profit and loss statements for Sydney Tax. However, the claimant is not a sole trader. The alleged businesses from which the claimant contends he derived income before the accident are conducted by Sydney Tax and J & V. Both Sydney Tax and J & V are registered companies.
Pursuant to s 1.5.1 of the Corporations Act 2001 (Cth):
“As far as the law is concerned, a company has a separate legal existence that is distinct from that of its owners, managers, operators, employees and agents. A company has its own property, its own rights and its own obligations. A company's money and other assets belong to the company and must be used for the company's purposes. A company has the powers of an individual, including the powers to: * own and dispose of property and other assets * enter into contracts * sue and be sued. Once a company is registered, its separate legal status, property, rights and liabilities continue until ASIC (Australian Securities and Investments Commission) deregisters the company."
Accordingly, as the Company is a separate legal entity the claimant’s PAWE comprises the earnings he received from these companies in the relevant period and not the net profit of the companies, which may have notionally been available for distribution to shareholders. The question is what amount did Sydney Tax and/or J & V in fact pay to the claimant during the relevant pre-accident period that is, what amount did the claimant, as an individual earner, receive from these companies. This can only be answered by examining the claimant’s own records, including his bank statements.
Other than verifying the availability of company funds to pay the claimant, evidence of income of the company is not relevant to calculation of the claimant’s PAWE. This is because this evidence does not establish that any payment was made by Sydney Tax to the claimant. Accordingly, tax records and profit and loss statements belonging to Sydney Tax do not assist in determining the claimant’s PAWE. The company’s bank statements might assist, as if payments were made to the claimant they ought to appear as withdrawal transactions in the company bank statements. However, bank statements have not been provided despite being requested by the insurer. No source documents have been provided to support the contentions in the unverified company tax returns and profit and loss statements.
What earnings did the claimant receive before the motor accident?
The insurer presently accepts the claimant is an earner under the MAI Act.
There is no suggestion by the claimant or in the documents that any of the exclusions under schedule 1, cl 4(2) apply to the claimant. Accordingly, PAWE falls under cl 4(1).
Under cl 4(1) the claimant’s PAWE is “the weekly average of the gross earnings received by the [claimant] as an earner during the 12 months immediately before the day on which the motor accident occurred”. Accordingly, the claimant’s PAWE is the weekly average of the earnings he received in the period 15 January 2022 to 14 January 2023.
The onus is on the claimant to establish on the balance of probabilities the amount in gross earnings he received in this period. Based on the above analysis of the evidence I am not satisfied on balance the claimant received any earnings in the period 15 January 2022 to 14 January 2023.
The only evidence of earnings received by the claimant in the 12 months before the accident is the 2022 draft tax return. However, this covers only a portion of the 12 month pre-accident period. It does not include the period 1 July 2022 to 14 January 2023. Further, for the reasons set out above I consider the 2022 draft tax return is unreliable and, in any event, there is no evidence to establish the earnings contended in the 2022 draft tax return were received in the 12 month pre-accident period under cl 4(1). It is possible the earnings contended in the 2022 draft tax return were received by the claimant before 15 January 2022 that is, in the earlier period 1 July 2021 to 14 January 2022 covered by the tax return.
There is no evidence of any earnings received by the claimant in that part of the relevant pre-accident period from 1 July 2022 to 14 January 2023 (that is, after the period covered by the tax return ends on 30 June 2022. In fact, the evidence is that no earnings were received in this period from Sydney Tax as the only payslip provided is for payment on 27 January 2023 which is after the 12 month pre-accident period ended on 14 January 2023. The YTD earnings in the payslip are recorded as the same amount purportedly paid on 27 January 2023 which confirms Sydney Tax did not pay any earnings to the claimant for the period 1 July 2022 to 14 January 2023.
In summary:
(a) there is a draft 2022 tax return contending earnings from Sydney Tax and J & V in the period 1 July 2021 to 30 June 2022, but no source documents and no evidence that any part of the amounts in the 2022 draft tax return were received by the claimant on or after 15 January 2022, if at all;
(b) there is no evidence of any earnings received by the claimant from J &V in the period 1 July 2022 to 14 January 2023, and
(c) there is a payslip confirming the claimant did not receive any earnings from Sydney Tax in the period 1 July 2022 to the end of the 12 month pre-accident period on 14 January 2023.
Accordingly:
(a) there is insufficient evidence to establish the claimant received earnings from any source in the first part of the 12 month pre-accident period from 15 January 2022 to 30 June 2022, and
(b) the current evidence establishes the claimant did not receive any earnings from any source in the balance of the 12 month pre-accident period from 1 July 2022 to 14 January 2023.
It follows from the above that there is insufficient information upon which to determine PAWE, given the absence of evidence to support any earnings in the 2022 draft tax return were received after 15 January 2022 rather than before or alternatively, that the claimant’s PAWE under cl 4(1) is nil.
Either way, in so far as the claimant challenges interim payments in the first entitlement period under s 3.6 to the extent the insurer has refused to pay anything other than interim payments, the reviewable decision is affirmed as a result of the above outcome.
In so far as the reviewable decision concerns the insurer’s refusal to pay weekly statutory benefits under s 3.7, after the first entitlement period, it also follows from the above that the reviewable decision is affirmed because:
(a) there is insufficient information to determine PAWE and interim payments are not available under s 3.7 where there continues to be insufficient information to determine PAWE, and/or
(b) in the alternative the claimant’s PAWE is nil and he therefore has no entitlement to weekly statutory benefits under s 3.7.
Is the claimant an earner?
Relevantly, under Schedule 1, cl 2 of the MAI Act the claimant is an earner if he had not retired from all employment as of the date of the accident and he was employed or self-employed (whether or not full-time):
(a) at any time during the eight weeks immediately preceding the motor accident, or
(b) during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(c) during a period or periods equal to at least 26 weeks during the two years immediately preceding the motor accident.
As to (a) above, the 2022 draft tax return only extends to 30 June 2022. The payslip records no wages were paid to the claimant by Sydney Tax thereafter, until after the accident. Accordingly, the evidence establishes the claimant did not receive any earnings from Sydney Tax at any time during the 8 weeks immediately preceding the motor accident. There is no evidence of any earnings received by the claimant from J & V in the eight weeks immediately preceding the accident. Accordingly, there is a question as to whether (a) above is satisfied.
As to (b) above, I have concluded there is no evidence of the receipt of earnings in the 12 month period before the accident. It follows from this that a question arises as to whether (b) in the alternative is satisfied.
As to (c), the only evidence of earnings in the relevant period is the 2021 and 2022 draft tax returns, which include the earlier pre-accident year from 15 January 2021 to 14 January 2022. However, In the absence of documents such as income statements, notices of assessment and bank statements confirming payment to the claimant by one or both companies in the period 15 January 2021 to 14 January 2023 I cannot be comfortably satisfied that the claimant received earnings for a period of at least 26 weeks in the two years before the accident. Accordingly, a question also arises as to whether (c) is satisfied, in the alternative to (a) or (b) above.
The lack of evidence of earnings received in the periods relevant to whether the claimant is an earner under Schedule 1, cl 2 puts into question whether the claimant is an earner. I do not know the basis upon which the insurer accepts the claimant is an earner.
Given the claimant’s age of 67 years at the time of the accident (now 68) it is possible he had retired from employment as of the date of the accident. It is possible he may have continued to receive dividend payments as a non-working shareholder of one or both companies. The ad hoc way in which the claimant was paid and the limited amounts he was paid, according to the documents relied on by the claimant, suggests the claimant was not in full-time employment at the time of the accident and had not been for some time. It is possible that the ad hoc amounts the claimant contends he was paid are dividend payments following the claimant’s retirement from practice either as a continuing shareholder or as a past shareholder where past profits were distributed after retirement. For the reasons set out above, any such dividends would be passive income and excluded from earnings for the purpose of PAWE.
In my view, the claimant has not provided sufficient or adequate information to enable a proper determination as to whether he is an earner. However, the insurer does not presently dispute that the claimant is an earner. Given it is not raised as an issue by either party in this merit review, I do not make any final determination on this issue.
The claimant’s duty to co-operate under s 6.24
The insurer has made repeated requests for certain financial records to be provided by the claimant. The claimant has not complied.
The claimant does not make any submission about his failure to co-operate with the insurer’s requests for further information and documents. He does not submit, for example, that the insurer’s request is unreasonable. Nor does he submit he has a reasonable excuse for his failure to comply.
The insurer raises a dispute about compliance by the claimant under s 6.24 of the MAI Act in their submissions.
Under s 6.24 of the MAI Act the claimant has a duty to fully co-operate with the insurer. Section 6.24(1) relevantly provides:
“Duty of claimant to co-operate with other party
(1) A claimant must co-operate fully in respect of the claim with the other party to the claim (being the insurer on the claim or, if there is no insurer, the person against whom the claim is made) for the purpose of giving the other party sufficient information--
(a) to be satisfied as to the validity of the claim and, in particular, to assess whether the claim or any part of the claim, may be fraudulent, and
(b) to be able to make an early assessment of liability, and
(c) to be able to make an informed offer of settlement in the case of a claim for damages.
…” (emphasis added)
The claimant’s obligation to cooperate under s 6.24 is mandatory. Where a claimant fails to provide sufficient documents and/or fails to provide relevant documents requested by the insurer they potentially do so at their own peril given they bear the onus of establishing a valid claim for statutory benefits. Pursuant to s 6.24(1)(a) the claimant must provide sufficient information for the insurer “to be satisfied as to the validity of the claim” and to assess whether the claim may be fraudulent.
The information needs to be sufficient to be satisfied the claimant is an earner for the purpose of the MAI Act and as to the amount of gross earnings received in the 12 months before the accident for the purpose of calculating PAWE.
Even if the 2022 draft tax return was accepted as reliable evidence, it does not assist in determining the amount of gross earnings received in the pre-accident period from 15 January 2022 to 14 January 2023 for the purpose of PAWE under cl 4(1) because:
(a) the 2022 draft tax return includes the period 1 July 2021 to 14 January 2022, which falls outside the 12 month pre-accident period under cl 4(1), and
(b) there is no evidence to establish whether any part of the earnings contended in the 2022 draft tax return were received by the claimant on or after 15 January 2022.
Further, as outlined above, questions arise as to the validity of this claim that in my view, reasonably require further investigation by the insurer. For example, there is an inconsistency in the contention the claimant received wages from Sydney Tax in the sum of $15,000 in December 2022 and the email from Mr Timmimi under cover of which the payslip was provided recording that this payment was not made until after the accident, on 27 January 2023.
The claimant’s inability to provide adequate financial records is peculiar in circumstances where the claimant purports to be a qualified accountant running two businesses one of which is said to be a profitable accounting business. This also raises concerns about the validity of the claim.
The documents provided by the claimant are wholly inadequate for the purpose of determining relevant matters such as whether the claimant is an earner and PAWE.
In the above circumstances it is appropriate and reasonable for the insurer to request source documents such as income statements, notices of assessment and bank statements of both companies and the claimant to verify the amounts paid to, and received by, the claimant as earnings (and to distinguish passive income from earnings) in the 12 months before the accident.
As there is also evidence of earnings received after the accident, contrary to the claimant’s contention he did not work until 3 February 2023, it would be prudent for the insurer to require the claimant to provide ongoing bank records, the claimant’s 2023 tax return, notice of assessment and income statement(s) in the event the insurer determines the claimant is entitled to weekly payments under s 3.7 in order to be satisfied there has in fact been a loss of earnings.
For the reasons outlined above I conclude the insurer’s request for further information is reasonable for the following purposes:
(a) to determine whether the claimant is an earner and if so the claimant’s PAWE, and
(b) to be satisfied as to the validity of the claim and that no part of the claim is fraudulent.
The claimant has not provided any reasonable excuse (or any excuse at all) for failing to provide the documents requested by the insurer. Provision of the documents ought not be onerous to the claimant. They are documents of a kind that ought to be readily available to the claimant.
The claimant purports to be a qualified accountant and managing director of an accounting firm. He purports to run two companies. He is legally represented. It would be extraordinary in these circumstances if the claimant did not have immediately to hand the documents requested by the insurer. I conclude the claimant does not have a reasonable excuse for failing to comply. Accordingly, the claimant is in breach of s 6.24 of the MAI Act.
I have considered whether a direction should be made for the claimant to produce the outstanding documents. However, there have been multiple requests by the insurer in circumstances where the claimant is an accountant and is legally represented yet the claimant has failed to provide the documents without reasonable (or any) excuse. An inference might be available from the claimant’s conduct to date in this regard that contemporaneous source documents in support of the contentions in the draft tax returns and the payslip do not exist. I therefore question the utility of a direction.
The claimant has had ample opportunity to comply with the insurer’s request. The insurer has set out in some detail in correspondence to the claimant why they require the documents. The claimant has not challenged the reasonableness of the insurer’s request. As an accountant the claimant must understand the importance of reliable financial records in connection with his claim. The claimant has the onus of proving on balance the amount he received in gross earnings in the 12 months before the accident. The claimant’s failure to provide sufficient evidence in all of the circumstances of this matter must be at the claimant’s own peril. I therefore decline to issue a direction for production of documents.
Should the claimant provide the outstanding information and documents to the insurer in the future, the insurer may then undertake an internal review in relation to PAWE noting at present the insurer has reasonably refused to do so because of the outstanding information.
In the meantime, the claimant has sought this merit review for an “assessment of [pre-injury] wages” that is, PAWE. As an accountant who is also legally represented, he chose to rely on the limited documents provided in this merit review. The claimant makes no submission regarding his failure to comply with the insurer’s request for further information. He does not submit the request is unreasonable. Nor does he submit he has a reasonable excuse for failing to comply. I have therefore conducted this merit review on the information before me, as required.
CONCLUSION
For the reasons set out above:
(a) there is a question as to whether the claimant is an earner under the MAI Act but as the insurer has not put this in dispute in this merit review, I make no final determination about this issue;
(b) there is insufficient information to determine PAWE in which case the claimant’s entitlement under s 3.6 is limited to interim payments, which have been paid by the insurer;
(c) as there continues to be insufficient information to determine PAWE and interim payments are not available under s 3.7 the claimant presently has no entitlement to weekly statutory benefits under s 3.7;
(d) in the alternative, the claimant’s PAWE is nil in which case he is not entitled to payment of weekly statutory benefits under s 3.6 or 3.7;
(e) the claimant is in breach of his obligation under s 6.24 to comply with the insurer’s reasonable request for further information and documents, and
(f) should the claimant comply with the insurer’s request for further information and documents in the future the insurer should then conduct an internal review of their decision of 17 May 2023 (noting an internal review is currently refused due to the outstanding request for further information and documents).
Accordingly, the reviewable decision is affirmed.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· the Application, Reply and supporting documentation;
· MAI Act;
· the Motor Accident Guidelines, and
· the Motor Accident Injuries Regulation 2017.
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