QBE Insurance (Australia) Limited v Spence
[2024] NSWPICMRP 4
•16 May 2024
| DETERMINATION OF MERIT REVIEW PANEL | |
| CITATION: | QBE Insurance (Australia) Limited v Spence [2024] NSWPICMRP 4 |
| CLAIMANT: | Heydan David Spence |
| INSURER: | QBE Insurance Australia Limited |
| MERIT REVIEW PANEL MEMBERS: | Hugh Macken Terence O’Riain Susan McTegg |
| DATE OF DECISION: | 16 May 2024 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; review of decision of Merit Reviewer (MR) Medland in respect of the calculation of pre-accident weekly earnings (PAWE); claimant injured in motor vehicle accident on 12 August 2019; claimant asserted if uninjured he would have undertaken seasonal work for the 2019 harvest with Emerald Grain; question of whether earner under schedule 1 clause 2(a)(ii) or schedule 1 clause 2(b)(i); assessment of pre-accident weekly earnings; does schedule 1 clause 4(2)(c) require the likely weekly earnings to be averaged over 52 weeks; MR Medland certified PAWE to be $1,977.35; Held – claimant was an earner under schedule 1 clause 2(b)(i) where before the accident he had entered into an arrangement to undertake employment with Emerald Grain commencing on 21 October 2019; claimants earnings to be assessed under schedule 1 clause 4(2)(c); schedule 1 clause 4(2)(c) not require pre-accident weekly earnings to be averaged over 52 week period; obiter comment of Harrison AsJ in Allianz Insurance Australia Limited v Shamiri cited; Project Blue Sky v ABA, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue, Newcastle City Council v GIO General Ltd, and R v PLV cited; certificate of MR Medland revoked only as to amount of PAWE; Panel certified PAWE to be $1,898.40. |
| DETERMINATIONS MADE: | CERTIFICATE Issued under s 7.13(4) of the Motor Accident Injuries Act, 2017 The Review Panel revokes the certificate of Merit Reviewer Medland dated 30 January 2024.1. The Review Panel certifies the claimant’s pre-accident weekly earnings to be $1,898.40.2. |
STATEMENT OF REASONS
INTRODUCTION
Heydan Davis Spence (the claimant) sustained injury in a motor vehicle accident on 12 August 2019 (the accident).
Mr Spence lodged an Application for Personal Injury Benefits dated 20 December 2019.
Calculation of the claimant’s pre-accident weekly earnings (PAWE) is used to determine the claimant’s entitlement to weekly payments of statutory benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
In a letter dated 3 August 2019 the insurer informed Mr Spence that he was not an “earner” for the purposes of receiving statutory benefits under Schedule 1 of the MAI Act.
On 11 August 2022 the clamant sought an internal review of that decision.
On 31 August 2022 the insurer issued an internal Review Certificate affirming the original decision that Mr Spence was not an earner.
In a reviewable decision dated 30 September 2022 the insurer accepted liability for payment of statutory benefits. The insurer assessed the claimant’s PAWE at $177.75 on the basis payslips from Acar Company Pty Ltd (ACAR) for the period 3 December 2018 to 3 March 2019 indicated the claimant’s total earnings were $9,243. The insurer stated the payslips from Emerald Grain, Ramps Ridge and Bindara Management Services were outside the 52 weeks period preceding the accident and therefore, were not considered.
Mr Spence lodged an application with the Personal Injury Commission (Commission) in respect of the PAWE dispute.
In a certificate dated 11 December 2023 Merit Reviewer Elizabeth Medland set aside the reviewable decision of the insurer and certified the claimant’s PAWE as $1,977.36.
The insurer has sought a review of the decision of Merit Reviewer Medland.
In a decision dated 7 February 2024 the President’s delegate referred the application for review of the decision of Merit Reviewer Medland to this Review Panel (Panel) pursuant to s 7.15 of the MAI Act.
THE EVIDENCE
Statement of Heydan Spence
Mr Spence provided a statement dated 3 August 2023.
He worked for Emerald Grain from approximately 8 October 2016 to 17 December 2016 as a casual harvest worker. He stated harvest runs from October for three to six months. His duties including operating hoppers, transfer/storage, loading and unloading of cereals, bunker maintenance and raking. Mr Spence states he had a good working relationship with his supervisor Sandy Newman, and he formed an expectation of working with Emerald Grain in the future.
Between March and July 2017 Mr Spence worked for Peter Salvestro as a tractor driver or operating plant and equipment.
In April 2017 Mr Spence stated he saw Ms Newman when she confirmed there would be work available for the upcoming harvest and she would call him when the harvest starts.
In mid-2017 Mr Spence failed to secure a full-time position at Emerald Grain but was advised by Ms Newman that he was still welcome to work the harvest.
Shortly before the harvest started Mr Spence was contacted by Ms Newman and secured harvest work from 21 October 2017 to 15 December 2017 and for one week in February 2018. In addition to the duties worked the previous year Mr Spence also operated a stacker, drove tractors, and undertook site maintenance/slashing. Mr Spence stated he did not work between 6 and 17 November 2017 due a foot injury. Mr Spence stated during this period he asked if he could operate the front-end loader telehandler and skid steer. Ms Newman advised he would have to be trained on site by an assessor and she would let him know when the assessor would be attending so he could be trained. Mr Spence stated he anticipated doing the training the following season.
Between 15 and 28 February 2018 Mr Spence worked for Armstrong’s driving a water truck to keep the dust down.
In April or May 2018 Mr Spence saw Ms Newman. He asked if there was any work at harvest time and she said she would contact him. In September 2018 Emerald Grain wrote to Mr Spence to say there was no work available for the 2018 harvest due to drought.
Mr Spence worked with ACAR between November 2019 and March 2019 as a leading hand supervising contract workers on an almond farm.
In May 2019 Mr Spence spoke to Ms Newman. He said, “I bet you can guess what I am going to ask you”. She replied “We don’t have work at the moment, but you can do harvest and there might be some pre-harvest work available. I’ll contact you when it starts.” Mr Spence says he understood from that conversation that he had an arrangement to work for Emerald Grain for the 2019 harvest.
Mr Spence was injured in the accident on 12 August 2019 rendering him unfit for work.
On 14 August 2019 Mr Spence received a text message from Ms Newman to say she was looking forward to having him back. Mr Spence advised he had two broken legs.
Mr Spence states on 15 October 2019 Ms Newman sent him a text message asking if he could attend the induction that day. Mr Spence stated he was still unfit due to his injuries. Ms Newman asked Mr Spence to let her know when he was fit to return to work.
Application for Personal Injury Benefits
In the Application dated 20 December 2019 Mr Spence documented multiple fractures sustained in the accident. In respect of employment, he described his occupation as farm labourer and the employer as Emerald Grain. He stated:
“I would of started working for Emerald Grain by 18/9/19. I had worked for them in the previous 3 seasons which runs August to January.”
Payslip from Ramps Ridge Services Pty Ltd
A payslip from Ramps Ridge Services Pty Ltd for the period 25 May 2017 to 7 June 2017 is for 66 hours at the hourly rate of $30 in the total sum of $1,980.
Payslip from Bindara Management Services Pty Ltd
A payslip from Bindara Management Services Pty Ltd for the period 4 April 2017 to 10 April 2017 is for 48.24 hours at the hourly rate of $23 in the total sum of $1,109.75.
Evidence from Acar Company Pty Ltd
Eleven payslips from ACAR for the period 3 December 2018 to 3 March 2019 show total earnings of $9,243 calculated at the rate of $26 per hour.
Period
Hours worked
Gross Wage
3/12/18 – 9/12/18
36
$936
17/12/18 – 23/12/18
42.5
$1,105
24/12/18 – 30/12/18
23
$598
31/12/18 – 6/1/19
34
$884
7/1/19 – 13/1/19
42
$1,092
14/1/19 – 20/1/19
28.5
$741
21/1/19 – 27/1/19
35
$910
4/2/19 – 10/2/19
36
$936
11/2/19 – 17/2/19
22.5
$585
18/2 /19 – 24/2 /1 9
16
$416
25/2 /19 – 3/3/19
40
$1,040
Evidence relating to Emerald Grain
The following payslips have been provided:
Period
Hours worked
Gross Wage
8/10 /16 – 14/10 /16
5 normal @ $27.44
$137.20
12/11 /16 – 18/11 /16
4 normal @ 27.44
$109.76
19/11/16 – 25/11 /16
19.17 normal @ $27.44
4.50 overtime @ $37.31
$693.94
26/11/16 – 2/12/16
26.34 normal @ $27.44
12 overtime @ $37.31
$1,170.55
3/12/16 – 9/12/16
12.42 overtime @ $37.31
$463.45
10/12/16 – 16/12/16
14.33 overtime @ $37.31
$534.72
14/10/17 – 20/10/17
4 normal @ $28.25
$113
21/10/17 – 27/10/17
38 normal @ $28.25
1.42 overtime @ $38.42
$1,128.06
28/10/17 – 3/11/17
16 normal @ $28.25
$452
18/11/17 – 24/11/17
8 normal @$28.25
3.50 overtime @ $38.42
$360.47
25/11/17 – 1/12/17
24 normal @ $28.25
24.08 overtime @ $38.42
$1603.15
2/12/17 – 8/12/17
16 normal @ $28.25
$452
9/12/17 – 15/12/17
22 normal @ $28.25
2 casual @ $35.03
1.50 overtime @ $38.42
$749.19
7/2/18 – 13/2/18
22 normal @ $28.25
2 casual @ $35.03
24 casual 24 @ $31.78
$71.19
In an email addressed “To Whom it May Concern” dated 9 August 2022 Sandy Newman, Training Coordinator stated:
“I met Heydan in Coles in the first half of 2019.
We had a short catch up as Heydan had previously worked for us during harvest.
I asked Heydan if he was interested in joining us for harvest again for the upcoming season. Heydan stated he was available and would apply when it was advertised later that year.
We were very sorry to hear about Heydan’s accident and really missed him that harvest as it was a big year for us.
Heydan had been interviewed for a full-time position in 2017 which he was unsuccessful for.
A full-time employee left the business while Heydan was injured, so he could not be considered for the position.”
In an email to the insurer dated 29 November 2022 Sandy Newman, Training Coordinator stated:
“Heydan Spence would have been employed by Emerald Grain for the below hours for harvest in 2019 and 2020 had he been capable of working.
There were various permanent advertisements that Heydan would have been eligible to apply for in this period also.
Harvest 2019
21st October 2019 would have been the start date for harvest and harvest ended 20th December 2019. The average was 6 days a week – 10 hours a day.”
A letter dated 18 September 2019 addressed to Mr Spence signed by Ms Newman as Site Manager – Goolgowi confirms an offer of employment as a casual employee from time to time. Attached to the letter was a contract of employment. The commencement date is 21 October 2019, and the end employment date is 28 February 2020 or earlier. The job description is as a harvest casual country site employee with the Supply Chain and Operations and the reporting responsibility is to the Site Manager – Goolgowi.
THE RELEVANT LEGISLATION
Division 3.3 of the MAI Act deals with an injured persons entitlement to weekly payments of statutory benefits.
Sections 3.6 and 3.7 sets out an entitlement to weekly payments calculated with reference to the “pre-accident weekly earnings”.
Schedule 1 of the MAI Act sets out the definitions relating to “earner” and “pre-accident weekly earnings” for the purposes of statutory weekly payments under Division 3.3.
Schedule 1, cl 2 of the MAI Act provides:
“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 4 of the MAI Act provides:
“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.
(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.”
DECISION OF MERIT REVIEWER MEDLAND
Merit Reviewer Medland issued a certificate and reasons for decision dated 11 December 2023.
Merit Reviewer Medland stated the parties agreed Mr Spence was an “earner” for the purposes of Div 3.3 of the MAI Act. There was a dispute as to which provision of cl 2 of Schedule 1 of the MAI Act applies.
The insurer argued the claimant was an earner under cl 2(a)(ii) of Schedule 1 on the basis he was employed for a period of 13 weeks in the year immediately preceding the accident.
Mr Spence submits that he was an earner under cl 2(b)(i) of Schedule 1 on the basis that he had entered into an agreement to undertake employment with Emerald Grain.
Merit Reviewer Medland found that the claimant was not an earner under cl 2(a)(ii) where he had not worked with ACAR for a period of 13 weeks in the year immediately preceding the accident but had only worked for 11 weeks.
Merit Reviewer Medland found that the claimant was an “earner” under cl 2(b)(i) on the basis at the time of the accident he had entered into an arrangement with an employer to undertake employment.
Merit Reviewer Medland agreed with the submission for the claimant that cl 4(2)(c) of Schedule 1 should be applied in calculating the PAWE on the basis the clause specifically refers to the earnings under the agreement and does not state the earnings should be averaged over a 12-month period.
Merit Reviewer Medland calculated the likely earnings with Emerald Grain over 8.57 weeks at $16,946 or a PAWE of $1,97736.
SUBMISSIONS
Insurer submissions
The insurer provided submissions dated 19 September 2023 in response to the initial merit review application. The insurer notes the claimant’s application is made on the basis:
(a) he had previously engaged in casual contracts with Emerald Grain during the harvest season, since 2016;
(b) he had a future agreement to work with Emerald Grain in the harvest season following the accident, and
(c) he was unable to undertake work with Emerald Grain as a result of the injury he sustained in the accident.
The insurer submitted that the evidence demonstrated that the claimant:
(a) had not worked for and been paid for work by Emerald Grain since February 2018 and therefore had not worked for Emerald Grain in the 12 months prior to the accident;
(b) had not worked for and been paid for work by Bindara Management Services since April 2017 and therefore had not worked for Bindara Management Services in the 12 months prior to the accident, and
(c) had not worked for and been paid for work by Ramps Ridge since June 2017 and therefore had not worked for Ramps Ridge in the 12 months prior to the accident.
The insurer applied Schedule 1, s 2(a)(ii) of the MAI Act to find that the claimant was an earner on the basis he was employed for a period of 13 weeks in the “year immediately preceding the motor accident”. Whilst the insurer concedes it raises no issue in this regard, it notes there is no evidence of earnings with ACAR between 10 December 2018 and 16 December 2018 and between 28 January 2019 and 3 February 2019, meaning the evidence only establishes the claimant worked 11 weeks in the year preceding the accident.
The insurer submits it had applied the correct test to determine whether the claimant was an “earner” and in calculating PAWE.
The insurer provided amended submissions dated 9 November 2023.
Relevantly, the insurer submits according to the email from Sandy Newman of Emerald Grain dated 29 November 2022:
(a) the claimant “would have been employed by Emerald Grain” during the 2019 and 2020 harvest, had he been capable of working, and
(b) the 2019 harvest lasted for eight weeks (21 October 2019 to 20 December 2019) working 6 days a week, 10 hours per day).
The insurer submits in assessing PAWE the claimant does not satisfy the definition of an “earner” within Schedule 1 cl 2(b)(i) or (iii). The insurer submits it has correctly applied Schedule 1 cl 2(b)(ii) of the MAI Act because:
(a) the claimant’s payslips demonstrate that the claimant was employed for a total of 16.5 weeks during the 23-month period to March 2019;
(b) there is no evidence the claimant was employed during the eight-week period prior to the accident to satisfy the requirements of Schedule 1 cl 2(a)(i);
(c) there is no evidence the claimant was employed “during a period or periods equal to at least 26 weeks during the two years immediately preceding the motor accident” to satisfy Schedule 1 cl 2(a)(iii) where payslips only confirm employment for 13.5 weeks during this period;
(d) the claimant has not provided any evidence that Ms Newman had the authority to make an offer of a casual contract;
(e) despite the apparent offer of a casual contract of employment by Emerald Grain the 2019 harvest season only lasted eight weeks. The insurer submits the claimant has not provided any evidence that Sandy Newman of Emerald Grain had the authority to offer a casual contract, notwithstanding the wording of her email. Further the insurer submits there is no evidence the claimant entered into any contract or agreement “before the motor accident” or that he had prior to the accident “entered into an arrangement (whether or not an enforceable contract)” to work for Emerald Grain. The insurer notes the contract post-dates the accident and it was a case of “wait and see” to determine if the harvest required workers, and
(f) the email from Sandy Newman dated 9 August 2022 did no more than invite the claimant to apply for a potential position.
The insurer provided submissions dated 22 December 2023 in support of the review application.
The insurer submitted Merit Reviewer Medland found the claimant would recommence work for Emerald Grain at the end of 2019 without having regard to the significant change in the claimant’s circumstances as follows:
(a) the claimant had not worked for Emerald Grain since working one week in February 2018, and
(b) the claimant worked on a casual basis with ACAR in November 2018 and March 2019, meaning the claimant had not worked with Emerald Grant since he worked as a casual with ACAR.
The insurer submits this change of circumstance means that Schedule 1 cl 4 (2A) will apply where there has been a “significant change in the claimant’s earning 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”. In these circumstances the insurer submits under sub-cl (2A) the pre-accident period “is the period of two years immediately preceding the motor accident”.
In not engaging with this change of circumstance the insurer submits Merit Reviewer Medland failed to engage with the evidence or provide her path of reasons for rejecting that evidence.
In relation to the calculation of PAWE the insurer submits the approach of Merit Reviewer Medland fails to have regard to the objects of the MAI Act and provides a windfall to the claimant noting he was a seasonal worker who did not earn an annual income but a seasonal income.
The insurer relies upon the decision of Shahmiri v Allianz [2021] NSWPICMRP 2 at [29] to submit that the manner in which the weekly average was calculated was a material error. The insurer notes if the claimant’s PAWE is assessed at $1,977 his yearly income would be $102,894, well in excess of the claimant’s income generally.
Claimant’s submissions
The claimant provided submissions dated 29 January 2024. The claimant submitted the evidence that he had entered into an agreement with Emerald Grain prior to the accident is overwhelming.
The claimant submitted once his earnings are to be determined under Schedule 4 cl (2)(c) the words “earnings under the agreement” demonstrates that the earnings are not required to be averaged over 52 weeks.
REVIEW PANEL FINDINGS
Was the claimant an earner.
Was the claimant an earner under Schedule 1 cl 2(a)(ii)
The insurer argued Mr Spence was an “earner” under cl 2(a)(ii) of Schedule 1 on the basis he had been employed during a period or periods equal to at least 13 weeks during the year immediately preceding the accident and at the date of the accident had not retired permanently from all employment.
The insurer conceded the evidence only established that the claimant worked 11 weeks with ACAR during the year preceding the accident. The claimant has not provided payslips for the two periods 10 December 2018 and 16 December 2018 inclusive and between 28 January 2019 and 3 February 2019 inclusive. The claimant’s evidence is otherwise silent as to whether he worked those two weeks. However, where the claimant has apparently been diligent in retaining his payslips, the Panel is satisfied that the claimant, in fact, only worked 11 weeks during the year preceding the accident.
Accordingly, the Panel finds the claimant was not an “earner” under cl 2(a)(ii) of Schedule 1 arising out of his employment with ACAR.
Where the claimant is at least 15 years of age but was not employed,
(a) at any time during the eight weeks immediately preceding the accident;
(b) during a period of periods equal to at least 13 weeks during the year immediately preceding the accident where the evidence only demonstrates employment for 11 weeks with ACAR;
(c) during a period or periods equal to at least 26 weeks during the two years immediately preceding the accident where the evidence demonstrates employment of only 13.5 weeks, and
had not retired permanently from employment the Panel finds the claimant was not an earner under cl 2(a) of Schedule 1 of the MAI Act.
Was the claimant an earner under Schedule 1 cl 2(b)(i)
The next question is whether the claimant, before the accident, had entered into an arrangement with an employer or other person to undertake employment at a particular time and place qualifying him as an “earner” under cl 2(b)(i) of Schedule 1 of the MAI Act.
The insurer submits there is no evidence to demonstrate that Sandy Newman had the authority to offer a casual contract of employment, that the conversation detailed in the email from Sandy Newman of 9 August 2022 did no more than invite the claimant to apply and, the 2019 harvest season only lasted eight eight weeks.
Mr Spence states he worked with Emerald Grain from 8 October 2016 to 17 December 2016 as a casual harvest worker, he formed a good working relationship with his supervisor Sandy Newman and he formed an expectation of working with Emerald Grain in the future.
The Panel accepts there was a good working relationship between Mr Spence and Ms Newman having regard to the following:
(a) the conversation between Ms Newman and Mr Spence in April 2017 when Mr Spence was advised he was still welcome to work the harvest when he failed to secure a full-time position in mid-2017;
(b) the contact between Ms Newman and Mr Spence when he was informed, he had secured harvest work shortly before the harvest commenced in October 2017;
(c) where Mr Spence worked the harvest for Emerald Grain from 21 October 2017 to 15 December 2017;
(d) where Mr Spence worked for Emerald Grain for one week in February 2018;
(e) the conversation between Ms Newman and Mr Spence in or about November 2017 in relation to undertaking training so he could operate a front-end loader telehandler and skid steer;
(f) the conversation between Ms Newman and Mr Spence in April or May 2018 when Mr Spence enquired about the availability of work at harvest time;
(g) the written advice Mr Spence received from Emerald Grain in September 2018 to say there would be no work available for the 2018 harvest due to drought;
(h) the conversation between Ms Newman and Mr Spence in May 2019 when Mr Spence enquired about the availability of work at harvest time and Ms Newman advised she would contact him when it starts, verified by the email from Ms Newman addressed to whom it may concern dated 9 August 2022;
(i) the text message Mr Spence received from Ms Newman on 14 August 2019 in which she said she was looking forward to having him back;
(j) the text message Mr Spence received from Ms Newman on 15 October 2019 asking if he could attend the induction that day, and
(k) the letter to Mr Spence dated 18 September 2019 attaching a contract of employment as a casual harvest employee for the period 21 October 2019 to 28 February 2020 or earlier.
The Panel notes the pattern of employment with Emerald Grain demonstrated by the claimant as follows:
·where he worked with Emerald Grain at harvest time between 8 October 2016 to 17 December 2016;
·where he worked with Emerald Grain at harvest time between 21 October 2017 to 15 December 2017;
·where he worked with Emerald Grain for one week in February 2018;
·where he had expectations of employment with Harvest Grain for the 2018 harvest which did not occur due to the drought; and
·where it is clear from the interactions between Mr Spence and Ms Newman in 2019 that casual work would have been made available to him for the 2019 harvest, had he not sustained injury in the accident.
The Panel is satisfied Ms Newman had the authority to extend an offer of casual employment to Mr Spence in 2019 where his earlier contracts of employment had been secured through Ms Newman and where it is apparent from her letter dated 18 September 2019 that she had become the site manager with reporting responsibility for the claimant as a casual employee.
The Panel finds, uninjured, Mr Spence would have taken up the offer of casual employment with Emerald Grain, in accordance with his usual pattern of employment. Whilst it is not necessary to establish that he had entered into a written enforceable contract before the accident, the Panel finds, in all likelihood, Mr Spence would have signed the contract of employment offered to him by Ms Newman on 18 September 2019.
The Panel finds having regard to the email from Ms Newman that Mr Spence would have worked the harvest for Emerald Grain between 21 October 2019 and 20 December 2019, working on average 6 days a week, 10 hours a day.
The Panel finds the claimant was an earner under Schedule 1 cl 2(b)(i) of the MAI Act where before the accident he had entered into an arrangement to undertake employment with Emerald Grain commencing on 21 October 2019.
The assessment of PAWE
Having concluded the claimant was an “earner” it is necessary to consider how his “pre-accident weekly earnings” should be calculated under Schedule 1 s 4 of the MAI Act.
The insurer submits the claimant’s employment with ACAR constituted a change of circumstances that resulted in the claimant regularly earning, or becoming entitled to earn, more on a weekly basis than he was earning before the change occurred in accordance with Schedule 1 cl 4(3) of the MAI Act.
Whilst the Panel acknowledges that the claimant had not worked with Emerald Grain since February 2018 and in the interim had worked as a leading hand with ACAR between December 2018 and March 2019 the Panel finds the employment with ACAR is consistent with the claimant’s pattern of undertaking short term casual employment when and where available.
The Panel notes the claimant’s earnings with ACAR were variable and does not accept the insurer’s submission that the claimant’s earnings with ACAR represent a “significant change in the claimant’s earning circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he was earning before the change occurred” in accordance with Schedule 1 cl 4(3).
In Thomas v Insurance Australia Limited t/as NRMA Insurance Merit Reviewer Williams concluded that the term “earnings circumstances” as used in cl 4(3) of Schedule 1 refers to circumstances involving an earner who is earning at the time the change in circumstances occurs.[1] He stated at [43]:
“The note to Sch1 cl4(3) states that ‘[e]xamples of a change of circumstances to which th[e] 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.’ The examples in the note are non-exhaustive; there may be other changes of circumstances to which the subclause would apply. However, what the examples have in common is that they all involve circumstances in which an earner has been earning. None of the examples involve circumstances where an earner goes from earning nothing to earning something. Accordingly, I consider that the term ‘earnings circumstances’, as used in Sch1 cl4(3), refers to circumstances involving an earner who is earning at the time the change in circumstances occurs. If the earner is not earning, there are no ‘earnings circumstances’, and the subclause does not apply. Put another way, for there to be ‘earnings circumstances’ there must be earnings.”
[1] Thomas v Insurance Australia Limited t/as NRMA [2023] NSWPICMR 24.
The Panel adopts this interpretation and finds schedule 1 cl 4(3) does not apply where Mr Spence was not earning before he commenced work with ACAR and did not work after he ceased work with ACAR in March 2019.
Having concluded the claimant was an “earner” in accordance with Schedule 1 cl 2(b)(i) the Panel finds that the claimant’s “pre-accident weekly earnings” should be assessed in accordance with Schedule 1 cl 4 (2)(c) on the basis Mr Spence had entered into an arrangement with an employer, Emerald Grain to undertake employment.
The calculation of the PAWE
In accordance with that section the “pre-accident weekly earnings” are “the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement”.
The evidence provided by Ms Newman is that work during the 2019 harvest would have been from 21 October 2019 until 20 December 2019 (8.57 weeks) for an average six days a week at 10 hours per day.
The claimant submitted that a rate of $28.25 should be applied for the first 40 hours of work in a week and thereafter at time and a half at the rate of $42.37. However, payslips provided by the claimant demonstrate $28.25 is the normal rate of pay and overtime was paid at the rate of $38.42 per hour. The Panel is satisfied this is the best available evidence and proposes to calculate the gross weekly earnings as follows:
· 40 hours (normal time) x $28.25 per hour $1,130
· 20 hours (overtime) x $38.42 per hour $768.40
· Total $1,898.40.
In relation to the calculation of the PAWE the insurer argues that having regard to the objects of the MAI Act the likely weekly earnings should be averaged over 52 weeks.
In Project Blue Sky v ABA Brennan CJ, McHugh, Gummow, Kirby, and Hayne JJ stated at [69]:
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed.”[2]
[2] Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355.
In examining the context of the provision, the Panel notes that Schedule 1 cl 4(1) specifically refers to PAWE 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 accident occurred, unless sub-cl (2) applies”. In other words, the definition of PAWE defined by sub-cls (2)(a), 2(a1), 2(b) and 2(c) are not governed by the limitations contained in cl 4 (1).
In Allianz Insurance Australia Limited v Shamiri Harrison AsJ considered the construction of Sch 1 cl 4(1) of the MAI Act.[3] The claimant had been employed for 29 weeks in the 12 months prior to the accident and the question was whether the earnings should be averaged over 29 weeks or 52 weeks. Harrison AsJ concluded the words “earnings as an earner” are intended to exclude earnings earned by the earner that do not fall within the ambit of cl 2(a) because they are not earnings from employment and not to define the period over which the earner’s gross earnings are to be averaged. In Shamiri Harrison AsJ found the PAWE should have been calculated by taking the earnings over the whole of the
12-month period immediately before the date of the accident and dividing it by 52 to reflect the number of weeks during that 12-month period.[3] Allianz Insurance Australia Limited v Sharmiri [2022] NSWSC 481.
In relation to the sub-cls (2)(a) -(c) of sch1 cl 4 of the MAI Act, Harrison AsJ stated:
“For completeness’ sake, regard should also be had to the other subclauses in sch1 cl4 of the MAIA. None of the subclauses 4(2)(a)-(c) suggest there should be an adjustment made to the period specified within those clauses to accommodate periods where the claimant was not earning”.
Whilst these comments may be obiter the decision of Harrison AsJ provides the only available judicial guidance in New South Wales as to the interpretation of Schedule 1 cl 4(2)(c) of the MAI Act.
The insurer submits if the annual gross earnings are not averaged over 52 weeks it would result in a windfall for the claimant resulting in annual gross earnings approaching $100,000, well in excess of the claimant’s usual earnings given his pattern of intermittent casual employment. Certainly, that would be the outcome for Mr Spence. However, the Panel notes the reverse is also possible. If the claimant had entered into an arrangement with an employer to undertake employment that was not seasonal and was expected to be ongoing he would be disadvantaged if his PAWE under Sch 1 cl 4(2)(c) were averaged over a 52 week period.
The decision of the Victorian Civil and Administrative Tribunal in Monga v Transport Accident Commission [2003] VCA 1730 relates to a casual fruit picker who was in the midst of a
10-week fruit picking season at the time of the accident. The Tribunal was considering s 4(3) of the Transport Accident Act, 1986 (VIC) which provides:“For the purposes of sub-section (1), if the period for which the earner has been employed by the same employer is less than four weeks, the earner's average weekly earnings may be calculated having regard to the weekly earnings which the earner could reasonably have been expected to have earned in that employment but for the injury at the earner's ordinary time rate of pay for the earner's normal number of hours per week.”
Deputy President Coghlan stated at [26]:
“This case raises difficult issues concerning the calculation of the amount payable for loss of earnings and the period during which they are payable. It is difficult, because the legislation does not make specific provision for someone in Mr Monga's position, a person who has had a series of part-time jobs with different employers in the 12 months preceding the accident. Whilst the Commission, in calculating the amount of ‘pre-accident weekly earnings’ as we can see, has taken account of what he had earned in the series of part-time jobs and what he was going to earn as a fruit-picker, it is clear that whilst the general approach may be reasonable, although the reason 52 weeks was chosen as the divisor is somewhat obscure, that approach is not authorised by the legislation.”
And at [39]:
“In his case, the rate he earned as a fruit-picker was higher than what he had earned in the other jobs he had had. He averaged $510.67 with Setleaf and $439.66 with Benson Group. The Commission was concerned that ongoing payment of benefits at the rate of $594 would be a windfall. One can imagine the opposite situation just as easily. A person injured might be gravely disadvantaged, where their pre-accident weekly earnings in a position just commenced before the accident had been very small, and where they only anticipated being in that employment for a short period. Are they to be left with that low rate just as unfairly? Considerations of that nature cannot affect how one must interpret the sections as was highlighted by Hedigen J in TAC v McRitchie [2001] VSC 151; (2001) 17 VAR 347 referred to by Mr Brett in his submissions.”
The Victorian Civil and Administrative Tribunal concluded s 4(3) was a section related to calculation, that is, to determine the amount of pre-accident weekly earnings and that the reference in s 4(3) to what he could have been earning “in that employment” did not place a limitation on the period of entitlement.
Whilst the provisions under interpretation are not identical and the decision of the Victorian Civil and Administrative Tribunal is not binding, the Panel finds the decision in Monga to be informative.
Section 1.3(4) of the MAI Act provides:
“In the interpretation of a provision of this Act or the regulations, a construction that would promote the objects of this Act or the provision is to be preferred to a construction that would not promote those objects.”
The objects of the MAI Act are set out in s 1.3(2) of the MAI Act and include:
(a) to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities, and
(b) to provide early and ongoing financial support for persons injured in motor accidents.
Arguably, the approach proposed by this Panel promotes the objects of the MAI Act, in providing financial support for persons injured in motor accidents.
In Newcastle City Council v GIO General Ltd McHugh J stated that, though legislation should be construed to promote the objects of the Act, in applying a purposive construction, “the function of the Court remains one of construction and not legislation”.[4] His Honour added at [109]:
“When the express words of a legislative provision are reasonably capable of only one construction and neither the purpose of the provision nor any other provision in the legislation throws doubt on that construction, a court cannot ignore it and substitute a different construction because it furthers the objects of the legislation.”
[4] Newcastle City Council v GIO General Ltd (1997) 191 CLR 85.
More recently, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue the High Court stated whilst regard is to be had to the context and purpose of a statute including the legislative history and extrinsic materials, such materials cannot displace the clear meaning of the text.[5]
[5] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) CLR 27; [2009] HCA 41 at [47].
In R v PLV it was argued that the phrase “unable to be aware of matters” in s 106(d) of the Evidence Act 1995 (NSW) should be interpreted as if it included the words “or recall” before the word “matters”.[6] Spigelman CJ refused to add words to the section, noting (at [743-4]) that he was “unaware of any authority in which a court has ‘introduced’ words to or ‘deleted’ words from an Act, with the effect of expanding the sphere of operation that could be given to the words actually used”. His Honour added that there were many cases where words have been “read down” but he knew of no case in which words have been “read up”. The introduction of the words “or recall” in s 106(d) would expand the “sphere of operation of that section” and that was not a “permissible process of statutory construction”.
[6] R v PLV (2001) 51 NSWLR 736.
The text is clear. The Panel notes the wording of the clause “the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement” in Schedule 1 cl 4(2)(c) does not include the words “averaged over the 12-month period immediately before the day on which the accident occurred” and any attempt to read the provision as if it did would not be “a permissible process of statutory construction”. Under Schedule 1 cl 4 (2)(c) the calculation of the PAWE only requires:
(a) the claimant to have entered into an arrangement with an employer or other person to undertake employment, and
(b) a calculation of average weekly gross earnings that he could reasonably have been expected to earn, but for the injury, in employment under that arrangement.
The Panel is satisfied that it was not the intention of the legislature to calculate the PAWE by averaging the claimant’s gross weekly income in the 12 months immediately before the day of the accident over a 12-month period having regard to the clear meaning of the text of Schedule 1 cl 4(2)(c) of the MAI Act.
The Panel finds Sch 1 cl 4(2)(c) applies where Mr Spence had entered into an arrangement with Emerald Grain to undertake employment and finds that he could reasonably have expected to earn the sum of $1,898.40 under that arrangement.
PANEL CONCLUSION
The Panel revokes the certificate of Merit Reviewer Medland.
The Panel certifies the claimant’s PAWE to be $1,898.40.
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