Mir v QBE Insurance (Australia) Limited
[2025] NSWPICMR 3
•17 February 2025
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
CITATION: | Mir v QBE Insurance (Australia) Limited [2025] NSWPICMR 3 |
CLAIMANT: | Fayaz Ali Kamal Mir |
INSURER: | QBE Insurance (Australia) Limited |
MERIT REVIEWER: | David Ford |
DATE OF DECISION: | 17 February 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Miscellaneous claims assessment; claimant’s application for merit review in respect of insurer’s determination the claimant’s pre-accident weekly earnings (PAWE) was $579.83; claimant is a self-employed delivery driver; claimant subsequently submitted his business expenses were significantly reduced and accordingly lodged an amended taxation return; despite requests from the insurer to provide receipts for such expenses and also provide a copy of the amended notice of assessment for the financial year 2023 such documentation was not produced; claimant relied upon various bank statements submitting such payments were evidence of business expenses; insurer relied upon the decision in Muzammil v QBE Insurance (Australia) which stated the onus is on the claimant to provide sufficient evidence of his pre accident earnings including the expenses of any business; claimant has a legal obligation to retain such records; requirement of the insurer for the claimant to produce receipts and a copy of the Amended Notice of Assessment is not unreasonable in the circumstances; Held – decision of the insurer is affirmed; claimant’s PAWE is $579.83. |
DETERMINATIONS MADE: | CERTIFICATE Issued under s 7.13(4) of the Motor Accident Injuries Act 2017 The findings of the assessment of this dispute are as follows: 1. The reviewable decision concerns the amount 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. 2. The reviewable decision is affirmed. 3. The claimant’s pre-accident weekly earnings amount is $579.83. |
PERSONAL INJURY COMMISSION
STATEMENT OF REASON
INTRODUCTION
Fayaz Ali Kamal Mir (the claimant) was injured in a motor vehicle accident on
8 November 2023. He was stationary at a set of traffic lights at Campsie, when the motor vehicle being driven by the insured driver, collided with the rear of the claimant’s bike. He sustained injuries to his right shoulder, elbow, arm and right ankle. His injuries were determined to be non-threshold. He is self-employed as an Uber driver.
He lodged an Application for personal injury benefits on 15 November 2023. The insurer admitted liability for the payment of statutory benefits, and a dispute has arisen in the claim concerning the amount of the claimant’s pre-accident weekly earnings (PAWE). The PAWE amount forms the basis of the number of weekly benefits to be paid by the insurer to the claimant. The claimant has referred the dispute to the Personal Injury Commission (Commission) for determination.
LEGISLATIVE FRAMEWORK
Sections 3.6 and 3.7 of the Motor Accident Injuries Act 2017 (the MAI Act) provide that:
“An earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits.”
Schedule 1 to the MAI Act provides a series of definitions which apply to the determination of weekly payments of statutory benefits:
(a) “earner” is defined in cl 2 as a person who was employed or self-employed at any time during the eight weeks immediately before the motor accident.
(b) loss of earnings is defined in cl 3 as “loss incurred or likely to be incurred in a person's income from personal exertion”, and
(c) PAWE is defined in cl 4 as “the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred.”
An injured person's “income from personal exertion” is explained in cl 3(2) as being:
“(a) the amount that is the income of the person consisting of, earnings, salaries wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered, and
(b) the proceeds of any business carried on by the person either alone or in partnership with any other person, and
(c) any amount received as bounty or subsidy in carrying on a business”
Sub-clause (3) provides that an injured person’s income from personal exertion does not include interest, rents dividends, superannuation contributions or leave entitlements.
PAWE DETERMINATION OF THE INSURER AND INSURER’S SUBMISSIONS
The insurer has lodged submissions in reply dated 3 September 2024, 7 November 2024, and 24 January 2025. Firstly, I refer to the submissions dated 3 September 2024 and in particular, I note the following paragraphs,
“1.1 On 19 March 2024 the insurer determined the claimant’s pre accident weekly earnings (PAWE) where $467.39. The insurer’s determination was based on a report by Procare Forensic Services (ProCare) dated 18 March 2024, which in turn was based on the evidence of earnings the claimant provided to QBE and Procare.
1.2 On 28 March 2024, the insurer’s PAWE determination of 19 March 2024, was affirmed by internal review.
1.3 On 20 August 2024 the claimant lodged an Application for merit review of the insurer’s internal review decision. The issue in dispute is the amount of weekly payments of statutory benefits that are payable to the claimant under Division 3.3 of the Motor Accident Injuries Act 2017. (the Act) a merit review matter under Schedule 2 Clause 1(a) of the Act.
1.4 The claimant disputes the insurer’s determination of PAWE on the basis that the insurer’s determination does not consider an amended individual tax return for the 2023 financial year
1.5 The insurer highlights that the claimant’s amended individual tax return is dated 16 May 2024 and thus postdates the insurer’s internal review decision. The insurer further highlights that the amended 2023 tax return contains insufficient information to explain why the claimant’s reported business expenses are lower than that was reported in the original 2023 tax return.
1.6 Notwithstanding the above, the insurer concedes that the PAWE calculated by the insurer and affirmed by internal review is incorrect, and respectfully submits that the claimant’s PAWE is $527.37 based on the financial evidence currently available.
3.6 The insurer submits that only earnings” received” by the claimant during the relevant pre accident period of 8 November 2022 to 7 November 2023 can be included in the calculation of the claimant’s PAWE. Earnings received before or after the period are excluded including earnings received after 7 November 2023, even if they represent payment for work carried out during the pre-accident period.
3.7 The insurer submits that the claimant’s Commonwealth bank statements are the most reliable evidence of earnings received by the claimant in the 12-month pre accident period.
3.8 The claimant’s Commonwealth bank statements demonstrate in the 12-month pre accident period, the claimant received income as a self-employed food delivery driver for Uber Eats, DoorDash, Menulog, and Sherpa (Aust) Pty Limited as set out in the insurer’s excel spreadsheet.
3.17 The insurer refers to and relies upon the decision in ACL v CIC Allianz Insurance Limited [2018] NSWDRS MR 364, in which it was held.
‘for the purposes of clause 4(1) of the Sch 1 of the Act” ‘gross earnings” meant the net profit earned by a self-employed claimant after accounting for business expenses but before tax.’
3.18 The insurer also refers to and relies on the decision in Muzammil v QBE Insurance (Australia) Limited [2022] 22 NSWPICMR 25 in which it was noted by Merit Reviewer Katherine Ruschen,
(26) Adopting the net business income as the claimant’s gross earnings for the purposes of the MAI Act is also consistent with the presentation by the claimant of his individual earnings to the ATO. It is also consistent with the treatment and assessment of such income by the ATO and is consistent with the method of calculation in previous merit review decisions.
(34) The onus is on the claimant to provide sufficient evidence of his pre accident earnings including the expenses of any business. As a sole trader the claimant ought to be able to provide reliable records not only of the total sales of the business but for business expenses. He has a legal obligation to retain such records.’
3.19 Before its PAWE Determination of 19 March 2024, the insurer requested various additional documents from the claimant to accurately calculate his business expenses, including
(a) His notice of assessment for the 2023 financial year and
(b) A breakdown of his business expenses for the 12-month pre accident period
3.32 The insurer highlights that there are no explanatory markups on the claimant’s, Commonwealth bank statements to indicate the expenses that he contends reflect the business expenses incurred during the 12-month pre accident period, nor any receipts to verify the claimant’s alleged business expenses.
3.33 The insurer further highlights that the claimant has not produced any submissions, evidentially statement, or documentation requested by the insurer to clarify the issues, uncertainties and questions raised in this dispute despite, it being entirely in his power to do so.
3.34 While the claimant’s solicitor confirmed in an email to Procare dated 6 December 2023, that the claimant does not have detailed records, as noted above, the claimant has a legal obligation to retain such records of his business expenses.
3.35 As the insurer cannot independently verify the claimant’s alleged business expenses during the 12-month pre accident period, the insurer cannot comfortably rely on the $9,360 calculated by ProCare for the claimant’s business expenses for the 12-month relevant and reported in the amended 2023 tax return.
3.36 The insured respectfully request that the claimant provide his Notice of Assessment for the 2023 financial year, a breakdown of his business expenses for the 12-month pre accident period, and submissions or an evidentiary statement to clarify the disputed business expenses, before the primary teleconference with Merit Reviewer David Ford on 17 September 2024.
3.37 Until such time as the claimant provides the requested documentation to verify that expenses incurred during the 12 months pre accident period, the insurer submits on balance, that they reported expenses of $20,820 in the 2023 tax return are more likely to be similar to the business expenses the claimant incurred in the 12-month pre accident period.”
I refer to the further submissions dated 7 November 2024, and in particular the following paragraphs,
“2.2 The insurer highlights paragraph 4 of the claimant’s further submissions dated
9 October 2024, wherein it is stated that the claimant has not retained any receipt and relies on his bank statements.
2.9
Notwithstanding the above, the insurer acknowledges that the claimant has provided an amended individual tax return for the 2023 financial year dated
16 May 2024 and acknowledges the claimant’s submission that the 2023 tax return was amended on the basis of error.
2.11 In the claimant’s further submissions dated 30 September 2024, it was submitted that the claimant's business expenses for 12 months pre accident was $9,360.00
2.12 Then in the claimant’s further submissions dated 6 October 2024, it was submitted that the claimant’s business expenses for the 12-month pre accident period were $3,552.83 with reference to the claimant’s bank statements
3.8 As noted in the insurer’s initial submissions, the insurer has consistently requested a copy of the claimant’s Notice of Assessment for the 2020 financial year and any other financial records, to assist the insurer in verifying his business expenses.
3.9 The insurer highlights that the claimant has failed to comply with this request only providing a breakdown of business expenses as recently as 9 October 2024, without any further financial documents that would have been lodged with the 2023 tax return.
3.10 The insurer respectfully submits that such a significant discrepancy between the claimant’s income and business expenses for the 12-month pre accident period, In comparison to the claimant’s reported income and business expenses in 2023 financial year, should lead the Merit Reviewer to be uneasy with accepting that $3,552.83 is the extent of the claimant’s expenses for the 12 month pre accident period.
3.12 As highlighted in the submissions above; the claimant is legally required to retain these financial records for a minimum of five years from the date the tax return is lodged, and further signed declaration to the ATO that the information and claimed expenses provide to the claimant’s accountant is true and correct.
3.13 Again, the insurer respectfully requests that the claimant provide his Notice of Assessment for the 2023 financial year and the financial records that were lodged with the original and amended 2023 individual tax returns, to verify the business expenses that the claimant would have incurred in the 12-month pre accident period.”
I also refer to the further submissions dated 24 January 2025, and in particular the following.
The amended income tax return lodged by the claimant followed the insurer’s expert’s assessment of the claimant’s expenses (albeit on incomplete records).
The claimant now contends in the absence of any source documents other than bank statements, that his business expenses for 12 months prior to the day of the accident total $3,552.83.
It is apparent the claimant has incomplete records and is unable to substantiate the variances in business expenses. On that basis, the insurer submits caution must be exercised not to overcompensate the claimant.
The insurer adheres to its submission dated 3 September 2024 regarding the adoption of the claimant’s initially declared business expenses for the 2023 financial year to the Australian Taxation Office (ATO) as an accurate measure of the expenses likely incurred in the claimant’s business between 8 November 2023 and 7 November 2024.
At the time of lodging the 2023 income tax return, the claimant’s knowledge of his business expenses incurred in the financial year was more contemporaneous, and the disclosure of business expenses in the income tax return can be inferred to more likely reflect the actual expenses incurred.
I agree with the further submission by the solicitor for the insurer that I should accept the findings of the Merit Review Panel in the matter of Iskander v Insurance Australia Limited trading as NRMA insurance [2024] NSWPICMRP dated 26 November 2024. In summary the Merit Review Panel determined business expenses should be deducted from the business income for the purposes of a PAWE calculation.
The solicitor for the insurer then made a concession the claimant’s PAWE is $579.83.
SUBMISSIONS BY THE CLAIMANT
The solicitor for the climate lodged submissions dated 13 September 2024, 9 October 2024 and 19 December 2024. It was submitted the claimant’s business expenses were $3,552.83, based on his bank statements which were itemised and attached to the submissions. It was further submitted the claimant’s PAWE is $859.43 per week. I note the amended income tax assessment notice for the year ending 2023 was not attached to these submissions nor were any receipts for such business expenses produced.
REASONS
I concur with the decision of Merit Reviewer Ruschen in the decision of Muzammil v QBE Insurance Australia [2022] NSWPICMR 25. I accept there is an obligation on the part of the claimant to produce receipts for business expenses, especially in circumstances where there has been an amended income tax return lodged with the ATO.
Secondly, despite being requested by the insurer to produce the amended notice of assessment for the financial year 2023, the claimant has failed to submit this document. The insured was prepared to reconsider its determination upon receipt of this documentation; however the claimant has failed to to comply with this request, which I consider to be reasonable in the circumstances.
I am satisfied, on the information before me, the claimant’s PAWE, for the purposes of the MAI Act is $579.83.
The decision of the insurer as to the claimant’s PAWE is affirmed.
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