Moltmann v Insurance Australia Limited t/as NRMA Insurance
[2023] NSWPICMR 12
•6 January 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Moltmann v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPICMR 12 |
| ClaimanT: | Peter Moltmann |
| Insurer: | Insurance Australia Limited t/as NRMA Insurance |
| Merit Reviewer: | Ray Plibersek |
| DATE OF DECISION: | 6 January 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; motorcycle; pre accident weekly earnings (PAWE); COVID-19 payments (payments); dispute over calculation the claimant’s PAWE and whether payments can be included as earnings; Held – no adjustment to claimant’s earning period where a change to his employment arrangements as a result of the COVID-19 pandemic; payments are not earnings received by the claimant as an earner and are excluded from the calculation of PAWE; claimant not earning continuously for over 12 months; claimant’s PAWE should be calculated under sub-clause 4(2)(a) of Schedule 1; weekly average of gross earnings received from when the earner started to earn continuously to immediately before the day of the motor accident; remitted to the insurer for reconsideration and recalculation of the Claimant’s PAWE and statutory benefits; decisions followed: Alliance Insurance Australia Limited v Shahmiri;Conde v Insurance Australia Limited t/as NRMA Insurance. |
| Determinations made: | Certificate Issued under s 7.13(4) of the Motor Accident Injuries Act2017 Certificate of Determination The certificate of this review determination is as follows: 1. The reviewable decision is set aside. 2. The claimant’s PAWE is determined under sub-cl 4 (2) (a) of Schedule 1 of the MAI Act to be $88,896.76 / 49.43 weeks = $1,798.44 3. The matter is remitted to the insurer for reconsideration and recalculation of the claimant’s entitlement to weekly payments of statutory benefits in accordance with these reasons and Division 3.3 of the Motor Accident Injuries Act 2017 (MAI Act). |
Reasons for Decision
Issued under s 7.13(4) of the Motor Accident Injuries Act2017
BACKGROUND
On 25 June 2022 Peter Moltmann, (the claimant) was riding his motorcycle on Yaouk Road, Yaouk NSW when he was injured in a collision with a kangaroo that jumped out in front of him. He reported that his went over the handlebars of his motorcycle.
The claimant’s reported injuries included: broken ankle, cracked sternum, broken rib , suspected soft tissue injury to shoulder and skin grazing, (R 2).
In the period before the accident the claimant was employed as an full-time senior consultant.
The dispute is is a merit review application about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Act.
On 7 July 2022 the insurer issued a Liability Notice – Benefits up to 26 Weeks which accepted liability for the payment of statutory benefits up to 26 weeks from the date of the accident, (R 3).
On 11 July 2022 the insurer assessed the claimant’s PAWE to be $1,709.55, (R 4).
On 13 July 2022 the claimant applied for an internal review of that decision, (R 5).
On 14 July 2022 the insurer issued their internal review Certificate of Determination which affirmed the original decision that the claimant’s PAWE was $1,709.55. The internal review reasons set out the insurer’s calculations of the claimant’s PAWE.
The claimant disputes the way the insurer has calculated his PAWE by excluding COVID payments.
On 22 July 2022 the claimant applied for a merit review of the Insurer’s internal review determination.
DOCUMENTS CONSIDERED
The documents I have considered are those listed in, referred to, or attached to, the application for merit review and the insurer’s reply together with all the attachments.
SUBMISSIONS
The claimant submits that his yearly salary figures submissions dated 6 July 2022, (R 7), that his yearly salary should be calculated as follows:
“Background on yearly salary figures
• I started with Risk Management Essentials (RME) on 12/7/2021
12/7 - 26/8: $100k + $15k vehicle allowance (used my own car for work)
• Into COVID lockdown
27/8 - 30/9: $100k + $15k vehicle allowance, pro-rata for 18hrs/wk, plus $750 Gov. COVID payment
1/10 - 21/10: $100k, pro-rata for 18hrs/wk, plus $750 Gov. COVID payment ($15k vehicle allowance gone, replaced by a company van with private use)
22/10 - 28/10: 100k, pro-rata for 18hrs/wk, plus $450 Gov. COVID payment
29/10 - 04/11: 100k, pro-rata for 30hrs/wk, plus $350 Gov. COVID payment
• Out of COVID lockdown05/11 - now: $100k + company van with private use”
In light of the above, the claimant submits that his PAWE should be calculated to include his COVID payments.
In its submissions in Reply dated 9 August 2022, (R 1), the insurer submits that:
· Mr Moltmann provided COVID-19 Disaster payment statements that confirmed that he was in receipt of COVID-19 Disaster payments for the period from 20 August 2021 to 4 November 2021;
· there is no dispute that the claimant is an earner for the purposes of the MAI Act;
· the claimant’s PAWE is $1,709.55 gross per week;
· the insurer calculated the claimant’s PAWE in accordance with cl 4(1) of Schedule 1 of the MAI Act;
· “as the subject accident occurred on 25 June 2022, ‘the 12 months immediately before the day on which the motor accident occurred’ is the period from 24 June 2021 to 24 June 2021 [sic] ”[1];
· the insurer assessed Mr Moltmann’s PAWE as his gross earnings in the year prior to the subject accident as a full-time senior consultant with a total income as noted in the ATO Income Statement 2021 – 2022 of $88,896.76. Thus the insurer calculated Mr Moltmann’s PAWE as follows: $88,896.76 / 52 = $1,709.55;
· the insurer notes that Mr Moltmann’s COVID-19 Disaster payment (20 hours or more) statements for the period from 20 August 2021 to 4 November 2021 demonstrated that Mr Moltmann had received payments of $750 from 20 August 2021 to 21 October 2021; $450 from 22 October 2021 to 28 October 2021 and $320 from 29 October 2021 to 4 November 2021;
· in accordance with cl 3(2) and (3) of Schedule 1 of the MAI Act COVID-19 Disaster payments are essentially leave entitlements for workers who would not be entitled to leave. Therefore, cl 3(3) (d) of Schedule 1 of the MAI Act cannot be classified as “income from personal exertion”;
· there are no provisions under the MAI Act, Motor Accident Injuries Regulation or the Motor Accident Guidelines that permit adjustment of PAWE to account for impact of the COVID-19 pandemic on a person’s ability to earn during the pre-accident period;
· the insurer also notes the decision of her Honour Harrison AsJ in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 which held that PAWE is to be calculated based on the weekly average of the gross earnings received by the earner as an earner during the relevant period and that the MAI Act does not allow any adjustment to this by reason of the COVID-19 pandemic or other break or reduction in employment or earnings;
· Mr Moltmann was in receipt of COVID-19 Disaster payments for the period from 20 August 2021 to 4 November 2021 which are excluded from the PAWE calculation. Additionally, as per Conde v IAG [2022] NSWPICMR28 PAWE cannot be adjusted under cl 4(2)(b) to account for interruption in earnings during the pre-accident period by reason of the COVID-19 lockdown, and
· it is submitted that the correct figure for PAWE is $1,709.55 for the purposes of the MAI Act.
[1] The insurer has written the date as 24 June 2021 but as it refers to a 12 month period. I expect the insurer meant the period to be “…to 24 June 2022”.
REASONS
This is a dispute between the claimant and the insurer about the calculation of the claimant’s PAWE and whether or not COVID payments should be included.
Nature of merit review
This matter is a merit review of the decision of the insurer about the amount of weekly payments of statutory benefits in accordance with s 7.13 of the MAI Act. This decision is a reviewable decision as it is listed in Schedule 2 sub-cl 1 (a) of the MAI Act. This review is not a review of the insurer’s processes in making the weekly statutory benefits and/or internal review decision. The review requires that I decide what the correct and preferable decision is having regard to the material then before me including any relevant factual material and any applicable law.
Legislation
In this merit review, the relevant applicable legislation commences with Division 3.3 of the MAI Act which deals with weekly payments of statutory benefits.
Many of the words used in with Division 3.3 are defined in Schedule 1 of the MAI Act. Schedule 1 defines: “earner”; “loss of earnings”; “pre-accident weekly earnings”; “pre-accident earning capacity” and “post-accident earning capacity”. The terms “gross earnings” and “earning capacity” is not separately defined in Schedule 1.
Definition of PAWE
PAWE is defined in cl 4 of Schedule 1 of the MAI Act as:
“4 Meaning of ‘pre-accident weekly earnings’—general
(1) Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means 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, unless subclause (2) applies.
(2) In the following cases, pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means—
(a) if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months—the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,
(a1) if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period—the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,
(b) if subclause (3) applies—the weekly average of the gross earnings the earner received as an earner, or could reasonably have been expected to receive, during the 12 months after the change of circumstance referred to in the subclause occurred,
(c) if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person—the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.
(2A) The pre-accident period, in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.”
I am satisfied that in this claimant’s case sub-cl 4 (1) does not apply because he had not been earning continuously for over 12 months as a senior consultant. Accordingly, the claimant’s PAWE must be calculated under sub-cl 4 (2).
The terms “earner” and “loss of earnings” are defined in Schedule 1, cls 2 and 3 as follows:
“2 Meaning of ‘earner’
A person who is injured as a result of a motor accident is an earner if the person is at least 15 years of age and who—(a) was employed or self-employed (whether or not full-time)—
(i) at any time during the 8 weeks immediately preceding the motor accident, or
(ii) during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii) during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,
and, at the date of the motor accident, had not retired permanently from all employment, or
(b) before the motor accident, had entered into an arrangement (whether or not an enforceable contract)—
(i) with an employer or other person to undertake employment, or
(ii) to commence business as a self-employed person,
at a particular time and place, or
(c) was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987.
3 Meaning of ‘loss of earnings’
(1) Loss of earnings means a loss incurred or likely to be incurred in a person’s income from personal exertion.
(2) A person’s income from personal exertion is—
(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.
(3) A person’s income from personal exertion does not include—
(a) interest, unless the person’s principal business consists of the lending of money, or unless the interest is received in respect of a debt due to the person for goods supplied or services rendered by the person in the course of the person’s business, or
(b) rents or dividends, or
(c) any employer superannuation contributions, or
(d) the monetary amount of any annual, sick or other leave entitlement.”
There is no dispute between the parties that the claimant is an ‘earner’ as defined in Schedule 1, cl 2 of the MAI Act, (R 1). I am satisfied that the claimant is an ‘earner’ as defined.
Calculation of weekly benefits
The issue in dispute is about the calculation of the claimant’s PAWE and whether COVID payments can be included as earnings as defined under the MAI Act or other legislation.
In my view the insurer is mostly correct in it submission that COVID payments cannot be considered as earnings as defined under of the MAI Act.
However, also in my view the insurer is mistaken in the interpretation and application of cl 4 of Schedule 1 of the MAI Act and hence in its method of calculating the claimant’s PAWE is in error.
Can COVID payments be included as earnings?
Mr Moltmann submits that the COVID payments made to him during 2021 should be treated as his earnings and be included by the insurer when calculating his entitlement to the payment of his lost earnings.
Unfortunately (and possibly unfairly for Mr Moltmann), the insurer’s submission finds support in the Supreme Court decision in Shahmiri.
The brief facts in the Shahmiri case were that during the 12 months before the day of the accident (on 24 October 2020), the claimant was employed from 23 October 2019 to 10 May 2020 (29 weeks) and was then unemployed from 11 May 2020 to 23 October 2020. Mr Shahmiri argued that his earning period for the purposes of calculating his PAWE should only be calculated over the 29 week period where he was employed.
Her Honour Harrison AsJ said in Shahmiri at [69]-[71], that:
“69 …….the Workers Compensation Act 1987 (NSW) (‘1987 Act’) had a similar provision to that in Sch 1 cl 4 of the MAIA, but was amended to achieve the result that the majority of the Merits Review Panel here wished to achieve, and one must infer that the failure to similarly amend the MAIA is deliberate. The Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020 (NSW) inserted a new cl 8EA into Sch 3 cl 2(3)(a) of 1987 Act, which allows for adjustment of the relevant earning period where there had been a change to the worker’s employment arrangements as a direct result of the impact of the COVID-19 pandemic.
70 Curiously, though the dissenting member’s decision was circulated amongst the other members of the Merits Review Panel there is no reference to this point in the majority decision. It may be that the other members were attempting to cure what appears to be an unfairness on the face of the legislation. Here we have an injured party who only worked for a 29-week period over the 12 months previous to the accident due to the effects of COVID-19, and who may have worked the whole 52-week period had it not been for COVID-19, but by application of the statute may have those 29 weeks of earnings averaged across the whole
12-month period to arrive at a determination of his ‘pre-accident weekly earnings’. This ostensibly produces an unfairness. However, one cannot construe an act to accommodate a particular circumstance, no matter how unfair that circumstance may be.71 In accordance with my above reasoning, I accept the insurer’s submission that the Merits Review Panel has made an error in their calculation of the first defendant’s pre-accident weekly earnings. The first defendant’s pre-accident weekly earnings should have been calculated by taking his earnings over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 reflecting the number of weeks during the whole 12-month period.”
In its written submissions the insurer refers to the decision of Conde v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 28 (Conde). That review decided that COVID-19 disaster payments received during the relevant period are excluded from PAWE. In Conde, Merit Reviewer Ruschen commented about the decision in Shahmiri that:
“Whilst Mr Shahmiri’s PAWE calculation fell under clause 4(1) and I have concluded the claimant’s falls under clause 4(2)(b), the language of clauses 4(1) and 4(2)(b) in so far as is relevant in the Shahmiri appeal is the same. The findings of Harrison AsJ turn on the wording in clause 4(1) that PAWE is to be calculated based on the ‘weekly average of the gross earnings received by the earner as an earner during’ the relevant period, which is the same wording in clause 4(2)(b).
It follows from the use of the language, ‘gross earnings received by the earner as an earner during …’ in both clause 4(1) and 4(2)(b) and the reasons in the Shahmiri appeal that the decision of Harrison AsJ also applies to clause 4(2)(b).
[T]he claimant achieves earner status for the purpose of the MAI Act by reason of being in receipt of earnings from employment or self-employment as per the definition of earner in Schedule 1, clause 2. Pursuant to clauses 4(3) and 4(2)(b) only earnings received by the claimant ‘as an earner’ can be included in calculation of PAWE.
The claimant did not receive Centrelink COVID-19 disaster payments ‘as an earner’. She did not perform any work for those payments. The claimant is not in a relationship of employee and employer with Centrelink and did not render services to Centrelink. Accordingly, the claimant did not receive the payments in the capacity of employee or for any services rendered.
Accordingly, COVID-19 disaster payments are not earnings received by the claimant as an earner and are therefore excluded from PAWE.”
Based on the Supreme Court decision in Shahmiri, I find that in this claimant’s case there cannot be an adjustment of the relevant earning period where there had been a change to the claimant’s employment arrangements as a direct result of the impact of the COVID-19 pandemic. Based on the review decision in Conde, I also find that COVID payments are not earnings received by the claimant in this case as an earner and are therefore excluded from the calculation of his PAWE.
Calculating the claimant’s PAWE
The insurer submits that the claimant’s PAWE is $1,709.55 gross per week. The insurer calculated the claimant’s PAWE in accordance with cl 4(1) of Schedule 1 of the MAI Act. The insurer argued that because the subject accident occurred on 25 June 2022, cl 4(1) applied so that the 12 months immediately before the day on which the motor accident occurred is the period from 24 June 2021 to 24 June 2022.
The difficulty with the insurer’s reasoning is that the claimant’s evidence is that he did not commence his employment with Risk Management Essentials until 12 July 2021. Accordingly the claimant was not earning continuously for over 12 months as a senior consultant with Risk Management Essentials prior to his accident.
In reviewing this matter and considering the operation of sub-cl 4(2)(a), I have had regard to the reasoning of her Honour Harrison AsJ in Shahmiri at [68] :
“68 Turning specifically to subclause 4(2)(a). This subclause applies to claimants who were earning continuously at the date of their accident but not for at least 12 months and specifies that the period over which their earnings are to be averaged is only that from when they began to earn continuously until the date of the accident. It is unclear what reason there would be for including this subclause if the majority’s interpretation of the statute is correct. If where a claimant falls within clause 4(1) the period over which their pre-accident weekly earnings are to be averaged is only the period during which they were earning, there would be no reason to specify in subclause 4(2)(a) that the relevant period to be considered is ‘... from when the earner stated to earn continuously to immediately before the day of the motor accident.’ The only difference between cls 4(1) and 4(2)(a) on the majority’s interpretation of the statute is that in subclause 4(2)(a) there is an erroneous specification that the claimant had to be earning at the time of the accident, otherwise the method of calculation is the same. This cannot have been the intention of parliament.”
Having carefully reviewed and considered the available evidence, I find that in this claimant’s case sub-cl 4 (1) does not apply because he had not been earning continuously for over 12 months as a senior consultant with Risk Management Essentials. As the claimant worked from the commencement of his job on 12 July 2021 until the date of the accident on 25 June 2022 he had not been earning continuously for at least 12 months. He was earning continuously for a period of 49 weeks and three days (or 49.43 weeks). Thus his PAWE must be calculated under sub-cl 4 (2) (a) which provides that the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident.
In this claimant’s case the best available evidence is his ATO Income Statement 2021 – 2022 (R 6), which shows his gross income for that financial year to be $88,896.76. As there is no evidence or submissions to the contrary, I have taken that income figure to be his total earnings from his employment with Risk Management Essentials but not including interest, rent, dividends or any annual, sick or other leave entitlement.
Accordingly, as I have found that the claimant’s PAWE must be calculated under
sub-cl 4 (2) (a) I would not include the two week period before he started work with Risk Management Essentials. In this claimant’s case I find that he earnt continuously from 12 July 2021 until the day before the accident which is 24 June 2022. Because the claimant did not earn continuously for the full 12 month period but only worked for 49 weeks and three days (or 49.43 weeks ) sub-cl 4 (2) (a) specifies that the period over which his earnings are to be averaged is from when he began to earn continuously until the date of the accident.Accordingly, I find claimant’s PAWE calculated under sub-cl 4 (2) (a) is his gross earnings for the relevant period divided by the 49 weeks and three days (or 49.43 weeks) of earnings from the commencement of his job on 12 July 2021 until the day before the accident which was 24 June 2022. The claimant’s PAWE is determined under sub-cl 4 (2) (a) of Schedule 1 of the MAI Act to be $88,896.76 / 49.43 weeks = $1,798.44.
I find that the insurer should recalculate the claimant’s entitlement to statutory benefits based on the PAWE figure of $1,798.44.
CONCLUSION
The reviewable decision is set aside and is remitted to the insurer for reconsideration and recalculation of the claimant’s entitlement to weekly payments of statutory benefits in accordance with Division 3.3 of the MAI Act.
The insurer is to recalculate the amount of the weekly payments based on the claimant’s pre-accident weekly earnings of $1,798.44.
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