Patton v Allianz Australia Insurance Limited
[2023] NSWPICMRP 3
•11 August 2023
| DETERMINATION OF MERIT REVIEW PANEL | |
| CITATION: | Patton v Allianz Australia Insurance Limited [2023] NSWPICMRP 3 |
| CLAIMANT: | Jason Patton |
| INSURER: | Allianz Australia Insurance Limited |
| MERIT REVIEW PANEL MEMBERS: | Elizabeth Medland Hugh Macken Terrence Stern |
| DATE OF DECISION: | 11 August 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; Merit Review Panel review of a single Merit Reviewer regarding a determination in respect of the amount of statutory benefits payable as weekly payments under Division 3.3; specifically, the calculation of the claimant’s pre-injury average weekly earnings (PAWE); complex financial situation involving business structures including discretionary trust; dispute as to what should be considered as earnings; whether distributions to trust beneficiaries other than the claimant should be included in calculation of PAWE; dispute as to whether superannuation and leave entitlements should be included in PAWE; Held – original certificate issued by single merit reviewer is affirmed. |
| DETERMINATIONS MADE: | CERTIFICATE OF DETERMINATION Issued under s 7.15(4) of the Motor Accident Injuries Act 2017 1. In relation to the merit review decision by a single Merit Reviewer, the Merit Review Panel confirms the decision/certificate (M10539825/22) of the single Merit Reviewer dated |
STATEMENT OF REASONS
INTRODUCTION
There is a dispute between Jason Patton (the claimant) and Allianz Australia Insurance Limited (the insurer) about statutory benefits payable as weekly payments under Division 3.3 of the Motor Accident Injuries Act2017 (MAI Act).
The claimant was injured in a motor accident on 11 December 2020 and subsequently lodged an application for statutory benefits on the insurer.
There have been two separate disputes lodged with the Personal Injury Commission (Commission) by the claimant in respect of the amount of weekly statutory benefits he is entitled to. A determination (M10509282/22) was issued by Merit Reviewer Ruschen on
26 July 2022 which directed that the claimant provide further information and the insurer to re-determine the claimant’s pre accident weekly earnings (PAWE).
On 30 August 2022 the insurer re-determined the claimant’s PAWE as nil. An internal review decision of the insurer dated 30 August 2022 affirmed the original decision.
Thereafter, the claimant lodged a further application for merit review with the Commission. The application was allocated to Merit Reviewer Ruschen for determination. In a determination dated 21 December 2022 (M10539825/22), Merit Reviewer Ruschen set aside the reviewable decision and certified the claimant’s PAWE to be $1,080.62.
The claimant applied to the Commission for a review panel to reconsider the merit review.
The President’s delegate decided there was reasonable cause to suspect an error in the Merit Reviewer’s decision.
The Commission's President constituted a Review Panel (the Panel) to review the Merit Reviewer's decision.
REVIEW CONDUCT
The Merit Review Panel (the Panel) met on 3 March 2023. It was noted that the insurer’s representative had lodged further written submissions shortly prior, and as such it was determined that the claimant be provided with further opportunity to address the content of such submissions.
The claimant provided further written submissions.
The Panel met again on 20 April 2023.
DOCUMENTATION
As part of the merit review, the Panel has considered the application and reply and all further documentation provided by the parties.
LEGISLATION
The claimant’s application for review of his PAWE is made under the provisions of the MAI Act.
The MAI Act objects are found at s 1.3(2), which addresses among other things "the early resolution of motor accident claims and the quick, cost-effective and just resolution of disputes” and “to provide early and ongoing financial support for persons injured in motor accidents".
Section 1.3(4) provides that when interpreting the provisions of the MAI Act, a construction that would promote the objects of the Act is to be preferred over one that would not.
Section 1.3(5) provides that when exercising a discretion conferred by the MAI Act, that discretion must be exercised in a way that would also promote the objects of the MAI Act. Part 5 of the Personal Injury Commission Act 2020 (PIC Act) enables the Commission to make rules with respect to the practice and procedure before the Commission. This includes panel proceedings reviewing Merit Reviewers or Medical Assessors’ decisions.[1]
[1] Section 41(2) of the 2020 Act.
Rules 127 to 130 of the Personal Injury Commission Rules 2021 (PIC Rules) are made pursuant to Part 5 of the PIC Act. A Review Panel determines how it conducts and determines the proceedings and may determine the proceedings solely based on the written application.[2]
[2] Rule 128 of the PIC Rules.
The objects of the PIC Act are set out in s 1.3 and include ensuring that the Commission’s decisions are timely, fair, consistent and of a high quality and that the Commission is enabled to decide matters justly, quickly, cost effectively and with as little formality as possible.
Section 1.3(2)(b) provides that an object of the MAI Act is to “provide early and ongoing financial support for persons injured in motor accidents”.
Section 4 of the PIC Act echoes ss 1.3(4) and (5) of the MAI Act and requires interpretations of provisions that promote the objects of the PIC Act and the exercise of legislatively conferred discretions in a way which promotes the objects of the PIC Act.
Section 42(1) of the PIC Act and the Commission rules contain the Commission’s ‘guiding principle’ which is that the Commission must facilitate “the just, quick and cost-effective resolution of the real issues in the proceedings”.
Section 42(2) requires the Panel, to give effect to the guiding principle when exercising any power given to me under the PIC Act or the rules of when interpreting any provision of the PIC Act or the rules.
The merit review on the amount of PAWE is a fresh decision.
In determining a merit review, according to s 7.13(1) of the MAI Act, the Panel must decide what the "correct and preferable decision" should be, according to the material before the Panel.
The Panel is required to step into the shoes of the insurer and make its own decision on the merits of the dispute – s 7.13(2), based on the information provided rather than on identifying errors in the previous decisions.
Pursuant to s 7.13(3), the Panel may decide to:
(a) affirm the reviewable decision, or
(b) vary the reviewable decision, or
(c) set aside the reviewable decision and make a decision in substitution for the reviewable decision, or
(d) set aside the reviewable decision and remit the matter for reconsideration by the insurer in accordance with any direction made by the merit reviewer.
The Panel is satisfied that sufficient information has been supplied to the Commission in connection with these proceedings, so it may determine this merit review without holding a conference or formal hearing (see s 52(3) of the PIC Act) and can proceed on the papers in accordance with Procedural Direction PIC2.
In accordance with s 43 of the PIC Act the rules of evidence do not bind the Panel but it may inform itself on any matter in the manner it thinks appropriate and as the proper consideration of this matter permits.
What is an earner?
Schedule 1, cl 2 of the MAI Act states as follows:
“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.”
Schedule 1, cl 3 of the MAI Act states as follows:
“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.”
Schedule 1, cl 4 of the MAI Act states as follows:
“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 received by the earner as an earner during the period from when the change of circumstance referred to in that subclause occurred to immediately before the day of the motor accident,
(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.
(3) This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred.
[Note: Examples of a change of circumstances to which this subclause would apply include a change of job, a promotion, a move from part-time to full-time employment, or a pay increase arising from the achievement of performance standards.](4) For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day.”
THE REVIEWABLE DECISION
The Merit Reviewer in her determination certified that the reviewable decision was set aside, and the claimant’s PAWE amount is $1,080.62.
In doing so, the Merit Reviewer made a number of findings which are dealt with in more detail below.
SUBMISSIONS
In the sealed application document, the claimant submits the Merit Review is incorrect in a material respect and submits that the PAWE ought be determined at $3,529.61 “before indexing”.
The claimant has provided written submissions dated 18 January 2023. The submissions do correspond with the Merit Reviewer’s observations of submissions before her as being long winded.
It is submitted by the claimant that the Merit Reviewer was in error as she took a “narrow, prescriptive view” on the issue of earnings. The claimant appears to suggest that provisions of the Corporations Act 2001 ought to take precedence over provisions of the MAI Act.
The claimant submits that the Merit Reviewer has paid regard to a particular business structure, namely a business operating through an intermediate trust structure, generating an income for his benefit and his family that depend on him. In doing so, she has made a decision with a perverse outcome which is not in keeping with “…equity, good conscience and the substantial merits of the matter”.[3]
[3] PIC Procedural Direction MA2, paragraph 25.
Essentially, the claimant submits that whilst some of the trust distributions were allocated to family members, such amounts should be counted as his earnings. He submits:
“…I submit to get to CORRECT and PREFERABLE decisions, faithful adherence to the objects of the MAI Act compels a decision-maker to do the work of looking through such structures to the facts of the injured’s personal exertion and what moneys came to be ‘at the disposal’ of that person as a result.
It cannot have been the intention of the Act that a person who has clearly been the sole individual responsible for having generated an amount of income, and who has received amounts from clients into a trust account under his sole control, to be distributed at his sole discretion, can be denied that amount being considered in his PAWE, just for the fact of working via a trust and having not actually paid that income amount to himself out of the trust. This is perverse effect of Member Ruschen’s narrow, prescriptive view on earnings derived via a trust structure, making the decision inconsistent with the objects of the Act (particularly cl 1.3(2)(b)).”
The claimant asserts the Merit Reviewer was in error in declaring certain amounts as earnings. The claimant notes the Merit Reviewer declared credits in the bank statements as being profit distributions from the trust. The claimant submits that the credits could be something different than “net profit distribution” and could instead be loan repayments and expense reimbursements to the claimant. He states that “so the presumption should surely be that they are loans and expense reimbursements, pending any evidential clarification to the contrary”. He notes that loan repayments would not constitute income from personal exertion. Further in his submissions the claimant reiterates that any outgoing amounts visible on the trust bank account were not distributions. Not to him, and not to any other party.
The claimant notes the Annual Report, effectively the declaration of net profit, was signed on 5 October 2021 with the liabilities section of the distribution entitlements, shows “them continuing on the books of the trust, undisbursed”.
The claimant then states, “this means the net profit for the trust was only ‘declared’ on this date, 5 October 2021. Until this time – according to company/trust law – there simply did not exist any net profit to distribute”. Going onto submit: “with a diligent reading of the Annual Statements the Member would know that there was simply WAS NO declared profit capable of distribution prior to 05 October 2021”. The claimant then states that the evidence shows that the distribution amounts were simply not paid to the beneficiaries.
With reference to the Annual Statements, the claimant states:
“…This can be clearly seen in the Annual Statements under Liabilities >>Beneficiary Entitlements >> Non-Current Liabilities >> Beneficiary Entitlement. In 2020 the full $29,809 in nominal beneficiary distributions remained on the books as a liability – ie. It had NOT been paid out – and in 2021 this was added to by the full $59,987 in nominal beneficiary distributions for that year, yielding a (cumulative) $89,795 (or $89,796 - $1 off likely due to the accountant’s rounding protocols).”
The claimant notes that the Merit Reviewer had the relevant Annual Statements before her but “missed this glaring detail”.
The claimant submits that the distributions were effectively “set aside” and are “unpaid present entitlements” (UPEs). He describes this arrangement as legal and a conscious decision made by him.
The insurer’s submissions dated 10 February 2023 reject the claimant’s suggestion that the Merit Reviewer’s determination is incorrect in a material respect.
The insurer lodged further submissions dated 18 April 2023 effectively revising their earlier position that the Merit Reviewer’s decision did not contain a material error.
The insurer submits that the provisions of the MAI Act are prescriptive, and in some respects, arbitrary, and that not every injured person who may be rendered incapacitated for work will be entitled to receive statutory weekly benefits.
It is asserted by the insurer that distributions from a trust do not constitute earnings under the MAI Act. In this regard, the insurer refers to cl 3(2)(b) of Schedule 1 of the MAI Act wherein earnings by personal exertion are said to include ‘the proceeds of any business carried on by the person either alone or in partnership with any other person…”
The insurer suggests that such clause suggests the legislature did not intend to include the distribution of a trust as constituting earnings, given the specific mention of a “partnership” in the aforementioned clause. The insurer submits that had parliament intended for distributions to an injured person as a beneficiary under a trust be taken into account for the purposes of determining PAWE, appropriate wording would have been inserted into Schedule 1, cl 3 of the MAI Act.
It is submitted that it is not correct to treat the claimant himself and the corporate trustee of the trading trust and the trading trust itself as the same entity. It is submitted: “It is not a case of equity or fairness but rather a result of the process of statutory construction and applying the objects of the Act in that process, as required by s1.3(4)”.
Further, the insurer refers to s 174AA of the Workers Compensation Act 1987 which makes provision, subject to certain qualifications, for a distribution to a worker as a beneficiary under at trust to constitute wages. The insurer notes there is no analogous provision in the MAI Act.
The insurer also refers to the change in terminology in determining payments of weekly statutory benefits after 78 weeks. In this regard, s 3.8 of the MAI Act refers to ‘capacity’ rather than ‘earnings’ as used in ss 3.6 and 3.7. The insurer then submits:
“In the insurer’s submission, this change in terminology and the change in conceptual approach it signals reinforces its submission that the methodology to be used [to] calculate an injured person’s PAWE (i.e., in the pre-78 week period) is prescriptive.”
In respect of which sub-clause of Schedule 1, cl 4 of the MAI Act is relevant (i.e cl 4(1) or cl 4(2)(a1)) the insurer notes that the claimant’s argument, in effect is that cl 4(1) uses the word ‘received’ while clause 4(2)(a1) uses the word ‘obtaining’.
The insurer submits that there is no relevant distinction in the meaning of each of the words when considered in context, given the words are not defined in the legislation.
It is submitted that the ordinary meanings are effectively synonymous and there is no relevant distinction to be made.
The insurer submits:
“considered in context, the notion of the claimant coming into possession of something (i.e., receiving or obtaining), in this case a payment, is the most significant element to be considered and, in the insurer’s submission, is determinative of this aspect of the dispute.”
The insurer confirms that on the issue of which sub-clause of Schedule 1, cl 4 is relevant, the exception provided for in cl 4(2)(a1) cannot apply given the earnings from “Grow Super” on 12 December 2019. This is because the earnings were obtained or received during the period 11 December 2019 to 10 December 2020, on 12 December 2019.
The insurer notes that the Merit Reviewer in the reviewable decision (M10539825/22) found that certain trust distributions by BluJay Nominees Pty Ltd atf BluJay Investment Trust (the Family Trust) were also earnings that should be taken into account. The insurer notes that the claimant now submits that such amounts should not be considered ‘earnings’ for the purposes of Schedule 1 of the MAI Act. The insurer accepts that such amounts are not earnings from personal exertion and therefore should not be utilised in the calculation of the PAWE.
Instead, the insurer submits that the internal review assessment of PAWE of $398 under Schedule 1, cl4(1) should stand.
In supplementary submissions dated 28 April 2023 the claimant responds to the insurer’s further submissions.
The claimant rejects the suggestion that the MAI Act is prescriptive. The claimant contends that a decision maker is to exercise discretion afforded under the Act in a number of ways, inter alia; in a general way “in order that they might arrive at ‘better and preferable’ decisions in terms of promoting the Objects of the Act”.
In terms of prescriptive wording, the claimant notes that a number of generic terms are used within Schedule 1 of the MAI Act. In specific reply to the insurer, in respect of cl 3(2)(b), the claimant submits the terms used therein are generic rather than specific terms of ‘sole trader’ in accordance with Income Tax Assessment Act 1997 or ‘in legal partnership per the Partnership Act 1958’. He goes on to submit:
“…the consistent use of non-specific terms in these key clauses suggests that the legislators were looking to give considerable interpretive leeway to the eventual ‘decision-makers’ in the exercising of their discretion…”
The claimant then submits that he considers the MAI Act to be certainly prescriptive as to its objects. The object of providing early and ongoing financial support is referred to by the claimant by submitting it is “…contrary to s 1.3(2)(b) to defend a payment of only $391 a week to someone who was clearly deriving in the order of 10x that for his family through his personal exertion prior to the injury…”
It is submitted by the claimant that the correct and preferable decision would be to ‘look through’ the business structure and consider the earnings from ‘personal exertion’, and look at the whole of the income derived from his effort despite the trust distributions.
The claimant refers to the High Court case of Husher v Husher (1999) 197 CLR 138; [1999] HCA 47 (Husher), in submitting that PAWE should be calculated by reference to the whole of the income generated.
The claimant submits that the insurer has conflated the terms of ‘obtaining’ and ‘obtained’.
REASONS
Earnings
The claimant appears to contend that the distributions from the discretionary trust were never actually made and were instead “UPEs” and were effectively pending. It is apparent that the claimant makes a suggestion that he did not receive any earnings from the trust company in the 12 month period prior to the accident. However, on the other hand suggests that amounts generated by the trust be counted when calculating the PAWE.
The claimant seems to suggest that amounts paid to him from the trust represent loan payments and expense reimbursements.
The claimant makes this submission despite the fact that he declared profit distribution from the trust in his 2020 and 2021 taxation returns.
Despite the claimant’s lengthy sets of submissions, he has not addressed this fact, or the findings of the Merit Reviewer in respect of this evidence. Accordingly, on the basis of all of the material before the Panel, it finds that on the balance of probabilities the claimant did in fact receive profit distribution from the discretionary trust during the relevant period.
The Panel agrees with the Merit Reviewer’s summary of the material which identifies the distributions from the trust as set out from paragraph 38 of her determination.
Which sub-clause of Schedule 1(4) applies to the claimant’s earnings?
Having considered the evidence, submissions and the reviewable decision, the Panel is in agreement with the findings of Merit Reviewer Ruschen in that cl 4(2)(1) applies.
Specifically, the Panel agrees that cl 4(2)(a1) only applies with there were no earnings in the 12 months immediately before the day of the accident (being the period 11 December 2019 to 10 December 2020).
The claimant clearly obtained earnings from the trust company as set out in the documentation and accordingly cl 4(2)(a1) does not apply.
Superannuation and leave entitlements
Neither party specifically address the Merit Reviewer’s findings in respect of superannuation and leave entitlements. In essence, it was found that such amounts are not to be taken into account for the purposes of calculating PAWE.
The Panel has considered Merit Reviewer’s reasons in this regard, and adopts same. The Panel finds that superannuation payments and leave entitlements are not to be taken into account for the purposes of calculating PAWE.
Calculation of PAWE
The Panel has considered the findings of Merit Reviewer Ruschen from paragraph 55 as to the calculation of the PAWE, in the context of all material provided. The Panel finds no error in the reasons of the Merit Reviewer and accordingly adopts same.
Whilst the claimant suggests that the PAWE should be calculated on the basis of the whole of the income generated by the trust, the Panel does not accept that this is a proper interpretation of the legislation. The claimant appears to suggest that Schedule 1 should not be interpreted in a ‘prescriptive’ way and rather the objects of the Act should be read prescriptively and effectively the wording of the Schedule should be put to the side.
The Panel has confirmed the Merit Reviewer’s findings that Schedule 1, cl 4(1) of the MAI Act applies to the meaning of PAWE. Such subclause provides that the PAWE includes the gross earnings “received by the earner”.
The claimant suggests that the “received by the earner” should be construed to include the distributions to family members, as well as distributions to him.
The claimant refers to the case of Husher in making such submission. The case of Husher did not involve the application of a statutory benefits scheme, which is the case in this dispute. The calculation of PAWE is to be carried out in accordance with the wording contained within Schedule 1 of the MAI Act.
Whilst the claimant may well have a reasonable basis upon which to rely on such case in any claim for damages that he may have, given the wording of Schedule 1(4)(1) the Panel does not accept the claimant’s argument that all income derived by the trust should be utilised in the calculation of PAWE. In this regard, the Panel considers the words “received by the earner” to mean exactly that. That is, the distributions that have been received by the claimant. The Panel finds that the words “received by the earner” are not synonymous with “earned,” even if it were accepted that the claimant generated more income for the trust than what was distributed to him.
The Panel accepts that generally the meaning of a statute is the grammatical meaning, however, is not always the case.
In the leading case for statutory interpretation, Project Blue Sky v ABA [1998] 194 CLR 355 (Project Blue Sky) a para 78, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ found:
“The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning…But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.”
The Panel further accepts that statutory interpretation is not a “mechanical task”.[4]
[4] State of New South Wales v Avery [2016] NSWCA 147 at 50.
The provisions of the Interpretation Act 1987 have also been considered by the Panel. Specifically, it is noted that s 33 requires that when interpreting a certain statutory provision, a construction that would promote the purpose of the object underlying the Act is to be preferred to a construction that would not promote that purpose or object.
After carefully considering the wording of Schedule 1, cl 4(1), the Panel finds that the words should be given their grammatical meaning. In this regard, interpretation of “earnings received” by the injured person, as opposed to all amounts “earned” and distributed to others, does not, in the Panel’s view, fall foul of the object contained within s 1.3(2)(b) of the MAI Act. The findings of Merit Reviewer Ruschen result in the claimant being provided with early and ongoing financial support in the context of a statutory benefits scheme. The findings essentially ensure that the claimant receives, by way of weekly payments of statutory benefits, an amount which is commensurate with the distributions he received from the trust.
Distributions to other family members are received by them, and they would have control over how such funds are utilised.
Other matters
The Panel has considered the insurer’s argument in its most recent submissions that distributions from a discretionary trust do not constitute earnings for the purposes of PAWE calculation.
Essentially it is argued by the insurer that the words contained in Schedule 1, cl 3(2)(b) preclude such earnings.
The Panel does not agree with the insurer’s interpretation of such sub-clause.
To interpret the wording of such sub-clause in such a way would preclude earnings from any business structure other than a legal partnership or a business involving an injured person as a sole director or as a sole trader. The Panel does not consider that such interpretation is in keeping with the objects of the MAI Act in providing ongoing financial support to injured persons.
The Panel does not consider the wording of “in partnership with any other person” to be restricted to “partnership” in the terms of a legal business structure. When read with the words “any business”, the Panel considers that such sub-clause intends to include the income of an injured person from any business conducted by them, whether they conduct that business alone or with other persons.
In making this finding, the Panel has considered the statutory interpretation principles set out above, and find that to interpret the clause in a way suggested by the insurer would not be consistent with s 1.3(2)(b) of the MAI Act.
Certification
The Review Panel agrees with the Merit Reviewer’s decision and findings.
The outcome is the same as the Merit Review certificate dated 21 December 2022.
The Panel will affirm the outcome of that certificate.
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