Proctor v QBE Insurance (Australia) Limited

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	Proctor v QBE Insurance (Australia) Limited [2025] NSWPICMR 23
CLAIMANT:	Graeme Proctor
INSURER:	QBE Insurance (Australia) Limited
MERIT REVIEWER:	Katherine Ruschen
DATE OF DECISION:	20 August 2025
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; dispute about payment of weekly benefits under Division 3.3; pre-accident weekly earnings (PAWE); meaning of PAWE; Schedule 1, clause 4(1) and 4(2)(a1); partnership earnings and sole trader earnings; whether loss of partnership to be taken into account when calculating PAWE; Held – the reviewable decision is set aside.
DETERMINATIONS MADE:	CERTIFICATE Issued under s 7.13(4) of the Motor Accident Injuries Act2017 The reviewable decision is about the amount of weekly payments of statutory benefits 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. 1. The reviewable decision is set aside. 2. The claimant’s pre-accident weekly earnings (PAWE) amount is $651.71. 3. The matter is referred back to the Personal Injury Commission for determination of the parties’ application for costs under s 8.3(4) of the MAI Act.

STATEMENT OF REASONS

INTRODUCTION

There is a dispute between Graeme Proctor (the claimant) and the insurer about the amount of the claimant’s pre-accident weekly earnings (PAWE) for the purpose of weekly payments of statutory benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
The claimant was involved in a motor accident on 15 November 2024.
The claimant lodged an application for personal injury benefits on 26 November 2024.
On 9 April 2025 the insurer determined that the claimant was an earner for the purpose of the MAI Act but calculated his PAWE as nil.
On 6 May 2025 the claimant requested an internal review of the insurer’s decision dated
9 April 2025.
On 21 May 2025 the insurer issued their internal review decision in which the insurer varied their PAWE decision by calculating the claimant’s PAWE amount as being $596.46.

The claimant has requested a merit review of the insurer’s internal review decision dated
21 May 2025 (the Application).

DIRECTIONS

In his original submissions for this merit review the claimant submitted his PAWE falls under cl 4(2)(a). The claimant also stated the insurer agreed with this. This understanding appears to be based on the insurer’s internal review decision which stated cl 4(2)(a) applies. However, the insurer’s submissions in reply to this merit review now state the insurer’s position is that the claimant’s PAWE falls under cl 4(2)(a1).
As the insurer’s position has changed, as a matter of procedural fairness interim directions were issued to the parties on 15 July 2025, which provided:
(a) the claimant with an opportunity to clarify which sub-clause in cl 4 he relies on for calculation of his PAWE and to make further submissions and/or provide further documents;
(b) the insurer with an opportunity to provide any further reply, and
(c) the parties with an opportunity to request a preliminary conference if they considered this should occur as part of conduct of the merit review.
On 29 July 2025 the claimant was granted an extension of time, by consent of the parties, to comply with the directions.
Both parties have complied with the directions. Neither party requested a preliminary conference. The matter is therefore determined “on the papers”.

SUBMISSIONS

At all material times the claimant generated earnings as a self-employed farmer and from a farming partnership (his business partner died in September 2024). In his application for personal injury benefits the claimant stated he earned $1,374 per week before the accident based on the combined weekly average as a sole trader and in partnership calculated by his accountant over a three-year period (the 2021, 2022 and 2023 financial years).
When requesting the internal review, the claimant submitted that:
(a) taking a weekly average over 12 months does not accurately represent the nature of a farming business where earnings fluctuate year to year as a result of a range of circumstances, including flooding and that his PAWE should therefore be averaged over a three to five year period (as his accountant did), and
(b) income received from cattle sales in 2025 should be included in calculation of PAWE as this represents delayed income that would have been received in 2024 but for the death of his business partner.
It is understood from final submissions received from the claimant in this merit review that the claimant no longer presses his points at paragraph 13 above, having accepted the insurer’s position (given in the context of the internal review process) that the MAI Act does not permit either of these things. I agree with the insurer’s position in this regard. For completeness I will give brief reasons why when addressing cl 4 below.
Further submissions received from the claimant in response to the interim directions state the claimant agrees with the insurer’s revised position that cl 4(2)(a1) applies (not cl 4(2)(a)). The first 12 months of the two-year pre-accident period under cl 4(2)(a1) is 15 November 2022 to 14 November 2023. The claimant contends for the following methodology to calculate PAWE over this period under cl 4(2)(a1):
(a)    earnings for the period 15 November 2022 to 30 June 2023 should be calculated based on average weekly earnings over the financial year ending 30 June 2023;
(b)    income during the 2022/2023 financial year as a sole trader was $99,357;
(c)    the loss of $46,387 in that same financial year sustained by the partnership is for tax purposes only and should be disregarded for the purpose of PAWE;
(d)    average weekly earnings in the 2022/2023 financial year were $1,910.71 ($99,357 divided by 52) which equates to earnings received 15 November 2022 to 30 June 2023 in the sum of $61,142.72 ($1,910.71 x 32 weeks);
(e)    earnings from 1 July 2023 to 14 November 2023 (20 weeks) should be based on the weekly average from sole trader income in the 2023/2024 financial year;
(f)    sole trader income in the 2023/2024 financial year was $43,103.83 which equates to a weekly average of $828.90 and equals earnings of $16,578 from
1 July 2023 to 14 November 2023 ($828.90 x 20 weeks), and
(g)    total earnings in the period 15 November 2022 to 14 November 2023 were therefore $77,720.72 ($61,142.72 + $16,578) which equates to PAWE in the amount of $1,494.62.
The claimant submits if his position above is not accepted then in the alternative, PAWE is as per the insurer’s calculation of $651.71.
The insurer submits the claimant’s PAWE falls under cl 4(2)(a1) on the basis that in the second year of the two-year pre-accident period the claimant’s combined income as a sole trader and from the partnership resulted in a net loss meaning he did not receive earnings from any source in the second year of the two year pre-accident period.
The insurer submits the partnership loss must be taken into account, which results in gross earnings received by the claimant in the 2022/2023 financial year in the sum of $52,970 giving a weekly average of $1,018.65. Accordingly, in the period 15 November 2022 to
30 June 2023 earnings were $32,596.80 ($1,018.65 x 32 weeks).
As to the remaining 20 weeks of the relevant 12-month period under cl 4(2)(a1) the insurer submits the claimant’s weekly average should be based on his 2024 tax return which declares income (excluding interest) in the sum of $3,359. This equates to a weekly average of $64.90 which equals earnings of $1,292 over 20 weeks. The insurer submits the claimant’s gross earnings from 15 November 2022 to 14 November 2023 were therefore $33,888.80 ($32,596.80 + $1,292.00) which equates to PAWE in the sum of $651.71.

REASONS
Legislation

Schedule 1, cl 4 of the MAI Act provides:
“(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.
(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.
(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.”

Consideration

The effect of cl 4 is that cl 4(1) applies, unless one of the exceptions in cl 4(2) applies.
The original PAWE decision of the insurer was based on cl 4(1). This position was revised in the internal review which determined cl 4(2)(a) applied. However, the insurer has since further revised their position. Neither party contends in this merit review that cl 4(1) (or cl 4(2)(a)) applies to the claimant’s circumstances. Both parties now contend cl 4(2)(a1) applies.
There is a difficulty with the methodology of both parties under cl 4(2)(a1). By taking the weekly average of earnings extending beyond the first year of the two-year pre-accident period (that is, to 30 June 2024) both methodologies infer the claimant continued to receive earnings from his farming business in the second year of the two year pre-accident period under cl 4(2)(a1) (that is, on or after 15 November 2023). The claimant also states in his final submissions that he continued to receive earnings in the second year of the two-year pre-accident period from his farming business, but not from any other source.
For cl 4(2)(a1) to apply, however, the claimant must not have obtained earnings from “any source at any other time during the pre-accident period…”. That is to say, he must not have obtained earnings at all, including from his farming business, at any time from 15 November 2023 to 14 November 2024.
If the claimant’s position that the partnership loss should be disregarded for the purpose of PAWE were to be accepted, cl 4(1) would clearly apply because he continued to receive earnings as a sole trader during the second year of the two-year pre-accident period.
The insurer’s position that they accept the claimant did not receive earnings from any source during the second year of the two-year pre-accident period is based on calculation of PAWE by PKF Forensic Accountants (PKF) under cl 4(1) in their report of 19 March 2025. PKF conducted a detailed analysis of various financial records (not limited to tax returns) and calculated combined gross earnings as a sole trader and from the partnership received by the claimant in the 12 months before the day of the accident (that is, from 15 November 2023 to 14 November 2024) to be a net loss of $21,060.
To my mind, there remains a question as to whether cl 4(1) applies having regard to the ongoing sources of income from sole trading and the partnership in the second year of the two-year pre-accident period. There is also a distinction in the wording in cl 4(2)(a1) regarding “obtaining” earnings from any source and earnings actually “received” for the purpose of calculating PAWE. Having regard to the ongoing source of earnings and this distinction in the wording it may be that cl 4(1) applies.
As Merit Reviewer, however, my role is to determine the correct and preferable decision based on the information before me and in a manner consistent with the guiding principle in s 42 of the Personal Injury Commission Act 2020 (PIC Act). I do not consider the role of a Merit Reviewer is to conduct an extensive forensic accounting exercise. The material before me is insufficient in any event to determine precisely when the earnings declared in the 2024 tax return were received (that is, the extent to which any of it was received on or after
15 November 2023).
There is expert forensic accountant opinion by PKF that when the second year of the two-year pre-accident period is taken as a whole the claimant’s combined sole trader and partnership earnings resulted in a net loss. Although the insurer does not address whether anything turns on the distinction between “obtaining” and “received” in cl 4(2)(a1) the insurer accepts cl 4(2)(a1) applies as a result of this net loss.
Although there is a statement contrary to the application of cl 4(2)(a1) in the claimant’s final submissions that he continued to receive earnings as a sole trader in the second year of the two-year pre-accident period this is potentially only if the partnership loss is disregarded (it is not clear if any of the earnings of $3,359 in the 2024 tax return, after accounting for the partnership loss, were received after 14 November 2023). The claimant otherwise agrees cl 4(2)(a1) applies.
Having considered the above, in particular the agreement of the parties that cl 4(2)(a1) applies and s 42 of the PIC Act, I consider this merit review should proceed on the basis that the dispute is limited to the question: what is the claimant’s PAWE amount under cl 4(2)(a1)? Accordingly, it is not necessary for me to determine the applicability of cl 4(1).
As the claimant previously raised cl 4(2)(a) and also used language found in cl 4(2)(3) (“significant change in earning circumstances”) in his initial submissions, for completeness, I will address cl 4(2)(a) and cl 4(2)(b) briefly.
Clause 4(2)(a) applies where an earner was earning continuously on the day of the accident but had not been earning continuously for at least 12 months. The claimant previously relied on cl 4(2)(a) and submitted this sub-clause allowed PAWE to be calculated over any earlier, selected, 12 month period. However, it is clear the relevant period under cl 4(2)(a) must end on the day before the day of the accident and starts on the date within the 12 months before the accident on which the earner started to earn continuously. Clause 4(2)(a) allows for a shorter period over which to average weekly earnings rather than over the full 12 months, but the period remains contained within the 12 months before the accident. Clause 4(2)(a) does not apply to the claimant’s circumstances and even if it did, it does not permit the claimant to select an earlier 12 month period.
Clause 4(2)(b) applies where there has been a significant change in earning circumstances as a result of action taken “by the claimant” which results in the claimant regularly earning or becoming entitled to earn “more” than he had been earning before the change. The change referred to in the claimant’s initial submissions was the death of his business partner. This is not a change as a result of any action taken by the claimant. Nor did it result in him earning or becoming entitled to earn more (the financial records show the partnership continued to suffer a loss and the sole trader business went on to suffer a loss). Accordingly, cl 4(3) is not triggered and therefore cl 4(2)(b) does not apply.
Lastly, for the internal review the claimant contended earnings received after the accident should be included in PAWE. This appears to be in the context of the insurer applying cl 4(1) at the time. In any event, like cl 4(1), cl 4(2)(a1) concerns only earnings that were in fact “received” by the claimant in the relevant pre-accident period. If they were received after that period or after the accident they are excluded from PAWE even if the earnings represent delayed payment of earnings attributable to personal exertion carried out before the accident/within the relevant pre-accident period. The insurer has therefore correctly excluded these payments.

What is the claimant’s PAWE under cl 4(2)(a1)?

Clause 4(2)(a1) requires PAWE to be calculated over the first year of the two-year period before the accident. This period is 15 November 2022 to 14 November 2023.
I have not received sufficient information from the parties to be in a position to determine precise earnings received in this period. As noted above, I do not consider it the role of a Merit Reviewer to undertake a detailed forensic accounting exercise in any event. The nature of some businesses may also mean that any such calculation is imprecise. In this particular matter, parties agree earnings received in the period 15 November 2022 to 14 November 2023 should be based on the weekly average received in the nearest financial years that is:
(a) earnings for the first 32 weeks from 15 November 2022 to 30 June 2023 should be based on the weekly average received in the financial year ending
30 June 2023, and
(b) earnings for the remaining 20 weeks from 1 July 2023 to 14 November 2023 should be based on the weekly average received in the financial year ending
30 June 2024.
The parties agree, if the partnership loss of $46,387 is excluded, the claimant’s gross earnings in the financial year ending 30 June 2023 were $52,970. The dispute is whether the partnership loss should be taken into account for PAWE. The claimant contends this loss is for “tax purposes only”.
However, the claimant had two sources of income – his sole trader business and the partnership. As such, the claimant’s gross earnings are the combined proceeds he ultimately receives as an individual earner from both businesses. They cannot be uncoupled for the purpose of PAWE. In the same way the claimant’s share of any profit of the partnership is included in PAWE (to the claimant’s benefit), the claimant’s share of any partnership loss must also be factored in (even though circumstances of a loss would be to the claimant’s detriment).
The documents indicate the claimant was a 50% partner in the partnership meaning he bore 50% of the business expenses and in turn, 50% of any net loss. Where there are two sources of income they must be reconciled to determine the ultimate earnings received by the claimant as an individual earner. For the period in question there is a net loss from the partnership (the partnership being a source of earnings for the claimant) which must be accounted for when calculating PAWE. The claimant’s gross earnings as an individual in the financial year ending 30 June 2023 were therefore $52,970, which is a weekly average of $1,018.65.

Gross earnings received by the claimant from his combined sources of earnings in the first 32 weeks of the period 15 November 2022 to 14 November 2023 were therefore $32,596.80 ($1,018.65 x 32 weeks).
As to the remaining 20 weeks in this period the claimant says his gross earnings were $43,103.83 for the financial year ending 30 June 2024. This is the stated gross income of the sole trader business (after expenses) in the profit and loss statement provided by the claimant for the discreet period from 15 November 2023 to 30 June 2024. It does not cover the whole financial year from 1 July 2023 to 30 June 2024. More importantly, the figure pertains to a period which falls wholly within the second year (not the first year) of the two-year pre-accident period. As a stand-alone document this profit and loss statement is irrelevant to the question as to what earnings the claimant received in the 12 months ending 14 November 2023 as all of these earnings are stated in the profit and loss statement as being received after 14 November 2023. If the profit and loss statement is correct it raises the question as to whether cl 4(1) applies, as it shows earnings received in the second year of the two-year pre-accident period.
If PAWE were calculated on the profit and loss statements for the sole trader business and partnership provided by the claimant for the 12 months before the accident from
15 November 2023 to 14 November 2024 PAWE would be nil based on an overall net loss of around $27,000 (taking into account the sole trader business loss from 1 July 2024 to
14 November 2024 of $ 36,357.58 and applying 50% of the net profit of $1,199.12 from the partnership from 15 November 2023 to 30 June 2024 and 50% of the net loss of $55,962.77 of the partnership from 1 July 2024 to 14 November 2024). In any event, I have resolved above that the merit review should proceed on the basis the parties agree cl 4(2)(a1) applies and have not gone on to consider whether cl 4(1) applies. Accordingly, these comments are made by way of observation only.
As the profit and loss statement quarantines earnings received on or after 15 November 2023 being after the end of the first year of the two-year pre-accident period it has no probative value in connection with cl 4(2)(a1), which concerns earnings received in the 12 month period before the period in the profit and loss statement. It is therefore disregarded.
In the circumstances, I consider it appropriate, as the insurer has done, to look to the 2024 tax return which overlaps with the first year of the two-year pre-accident period. After reconciling the partnership loss in the same tax year and excluding interest (which is not income from personal exertion and expressly excluded from the definition of “loss of earnings” in the MAI Act with the word “earnings” to be given the same meaning throughout the MAI Act) the claimant’s gross earnings in the financial year ending 30 June 2024 were $3,359, which gives a weekly average of $64.60.
The claimant’s gross earnings in the period from 15 November 2022 to 14 November 2023 were therefore $33,888.80 broken down as follows:
(a) $32,596.80 from 15 November 2022 to 30 June 2023 (32 weeks), and
(b) $1,292 from 1 July 2023 to 14 November 2023 (20 weeks).
I therefore conclude the claimant’s PAWE is $651.71, as calculated by the insurer in their submissions lodged in this merit review.

COSTS

Both parties seek costs pursuant to s 8.3(4) by seeking an order from the Personal Injury Commission (Commission) permitting payment of their costs in circumstances where such costs are not permitted by the regulations.
Section 8.3(4) provides:
“An Australian legal practitioner is not entitled to be paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits (whether the claimant or the insurer) in connection with the claim unless payment of those legal costs is permitted by the regulations or the Commission.”
Relevantly, s 8.3(4) only provides for costs to be permitted by the “Commission”. As Merit Reviewer, I am not the Commission and therefore do not have jurisdiction to consider whether costs outside costs permitted by the regulations should be permitted by the Commission pursuant to s 8.3(4). Accordingly, the matter is referred back to the Commission for determination of the question of costs under s 8.3(4).

CONCLUSION

For the reasons set out above I conclude the insurer’s revised calculation of PAWE in the sum of $651.71 is correct. However, as this is the revised figure in the insurer’s submissions and the internal review decision that is, the reviewable decision the subject of this merit review, differs I determine that:
(a)    the reviewable decision is set aside;
(b)    the claimant’s PAWE is $651.71, and
(c)    the matter is referred back to the Commission for determination of the question of costs.

LEGISLATION AND GUIDELINES

In making this decision, I have considered the following:
· the Application, Reply and supporting documentation;
· MAI Act;

·        Motor Accident Guidelines;
·        the Regulation, and
·        the PIC Act.

[2025] NSWPICMR 23

20 August 2025