Rabiei v Insurance Australia Limited t/as NRMA Insurance
[2024] NSWPICMR 10
•24 May 2024
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Rabiei v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMR 10 |
| CLAIMANT: | Mehdi Rabiei |
| INSURER: | Insurance Australia Limited t/as NRMA Insurance |
| MERIT REVIEWER: | David Ford |
| DATE OF DECISION: | 24 May 2024 |
| CATCHWORDS: | MOTOR ACCIDENTS - Miscellaneous claims assessment; claimant’s application for merit review in respect of insurer’s determination the claimant’s pre accident weekly earnings (PAWE) was $1171.16; claimant is a self-employed landscaper and retail sales assistant; claimant submitted substantial payments of cash were made by his clients in respect of the landscaping work and submitted such cash payments should be taken into account by the insurer when assessing PAWE; the insurer required verification of such payments by the clients in the form of statutory declarations; claimant produced letters from clients verifying cash payments but was unable to obtain clients to sign statutory declarations; determined in view of the substantial amount of cash payments; the requirement of the insurer is not unreasonable in the circumstances and accordingly determined such cash payments could not be taken into account by the insurer when calculating PAWE; Held – decision of the insurer is affirmed; claimant’s PAWE is $1,171.16. |
| DETERMINATIONS MADE: | CERTIFICATE Issued under s.7.13(4) of the Motor Accident Injuries Act 2017 The findings of the assessment of this dispute are as follows. 1. The reviewable decision concerns the amount of statutory benefits that are payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the Act) and is therefore a merit review matter under Schedule 2 (1)(a) of the Act. 2. The reviewable decision is affirmed. 3. The claimant’s pre-accident weekly earnings amount is $1,171.16. |
STATEMENT OF REASON
INTRODUCTION
Mehdi Rabiei (the claimant) was injured in a motor vehicle accident on 3 February 2023. He was a passenger in a motor vehicle driven by the insured driver, who collided with the rear of another motor vehicle at the intersection of Gibbon Road and Old Windsor Road, Winston, Hills. He sustained injuries to his neck, lower back, both shoulders, left arm left leg and psychological injuries. He is a landscaper and retail sales assistant and has been unable to work since the accident.
He lodged an Application for Personal Injury Benefits on 22 February 2023 and the insurer admitted liability for payment of statutory benefits on 28 March 2023. A dispute has arisen in the claim concerning the amount off the claimant’s pre accident weekly earnings (PAWE). The PAWE amount forms the basis of the number of weekly benefits to be paid by the insurer to the claimant. The claimant has referred the dispute to the Personal Injury Commission (Commission) for determination.
LEGISLATIVE FRAMEWORK
Sections 3.6 and 3.7 of the Motor Accident Injuries Act 2017 (the MAI Act) provide that.
“An earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits”.
Schedule 1 to the MAI Act provides a series of definitions which apply to the determination of weekly payments of statutory benefits.
(a)“earner” is defined in cl 2 as a person who was employed or self-employed at any time during the eight weeks immediately before the motor accident.
(b)Loss of earnings is defined in cl 3 as “loss incurred or likely to be incurred in a person's income from personal exertion “and,
(c)Pre accident weekly earnings is defined in cl 4 as’ the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred.”
An injured person's “income from personal exertion” is explained in cl 3(2) as being.
“(a)the amount that is the income of the person consisting of, earnings, salaries wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered, and
the proceeds of any business carried on by the person either alone or in partnership with any other person, and
(b)any amount received as bounty or subsidy in carrying on a business”
Sub-clause (3) Provides that an injured person’s income from personal exertion does not include interest, rents dividends, superannuation contributions or leave entitlements.
PAWE DETERMINATION OF THE INSURER.
The insurer obtained a forensic accountant report from Mr Matthew Gwynne of PKF Forensic Accountants Pty Limited (PKF) dated 6 July 2023 which assessed the claimant’s PAWE to be $1,171.16. On 25 July 2023, the insurer issued a PAWE determination to the claimant indicating he was entitled to $1,171.16.
The solicitor for the claimant requested an internal review of this assessment on 21 August 2023 submitting the correct PAWE should be $2,630.18. An internal review was undertaken by the insurer on 28 August 2023, where it was affirmed the original decision was to remain, on the basis that additional invoices have not been provided and bank deposits that were identified did not have a corresponding invoice.
The solicitor for the claimant then requested a recalculation of the PAWE on 23 January 24, submitting the claimant had obtained signed correspondence from his various clients, verifying payment for work completed by him. On 30 January 2024, a supplementary report was issued by PKF and a revised PAWE determination was issued, providing further documentation be provided to the insurer, prior to the issuance of the amended amount.
The insurer on 12 February 2024 issued a pre accident weekly earning review stating the PAWE was to remain at $1,171.16 unless the claimant provided the documentation. In regard to the four letters dated 16 October 2023. The insurer required from each person a statutory declaration, stating the following:
(a)total cash paid.
(b)date cash payment made.
(c)confirmed address and date where job completed, and
(d)the statutory declaration is to be signed by the payee.
The solicitor for the claimant has not provided the above-mentioned statutory decorations. On 27 February 2024, the solicitor for the claimant requested a further internal review on the basis they had provided letters and information pertaining to pre-accident income that was previously not considered by the insurer. On 12 March 2024, the insurer affirmed the initial decision the PAWE was to remain at $1,171.16.
SUBMISSIONS BY THE CLAIMANT
At the preliminary conference on 1 May 2024, the solicitor for the claimant again submitted the PAWE should be calculated in the sum of $2,077. He further submitted the PKF report did not take into account money received as cash in hand as described in the claimant's request for review application. The clients who paid in cash to the claimant, have provided signed letters for the insurer, stating that fact, the date work was carried out, and in some circumstances, the address where the work was undertaken.
The solicitor for the claimant also provided a number of bank statements and letters signed by the claimant’s previous clients. The solicitor for the claimant provided details of bank transfers to the claimant’s ANZ bank account amounting to $110,552 and details of cash payments for landscaping work amounting to $53,430. The claimant asserts an income of
$163,982 for self-employment work completed between the period 3 February 2022 and
2 February 2023. This is the combined total of money paid into the claimant’s bank accounts, the invoices of the claimant and money accounted for in the signed letters of previous clients. After deduction of Goods and Services Tax (GST) payment, it is a sum of $147,556.80. The claimant also earned a sum of $39,190 working as a retail assistant during the same period.
As noted in the PKF report, the claimant incurred work expenses of $78,791 during the said period and therefore, earned a sum of $107,955 for the period 3 February 2022 and
2 February 2023, which results in a calculation of PAWE in the sum of $2,077.
SUBMISSIONS BY THE INSURER
The insurer submits the further documentation and information provided by the solicitor for the claimant was referred to PKF, and subject to receipt of the information which the insurer requested and which is referred to in paragraph 10 above. PKF concluded a recalculation of PAWE does result in an amount of $2,105.25 as set out in their further report dated
30 January 2024. I note paragraph 3.1 of the report which states as follows.
“3.1 In preparing our assessment we have made the following assumptions.
3.1.1In absence of all invoices for the period February 2022 to February 2023, we are unable to determine whether the exception under clause 4(3) of the Act applies to this claim. Accordingly, in absence of this information, we have adopted the general definition of PAWE as per clause 4. (1) of the Act
3.1.2That, unless otherwise stated by us, the information provided is materially correct.”
I note paragraph 5.1 of the report which states as follows.
“16.1 prior to releasing payment, it is recommended that.
16.1.1A signed statutory declaration is obtained from each of the parties signing the letters, attesting to work performed, cash payments made, and date paid.
16.1.2The Claimant provide a copy of his 2023 ITR and Notice of Assessment.”
At the preliminary conference, I was informed by the solicitor for the claimant he had endeavoured to obtain statutory declarations as requested by the insurer, however, whilst the claimant’s clients were prepared to provide letters confirming such cash payments, all were reluctant to sign statutory declarations.
REASONS
The amounts paid in cash to the claimant by his clients is a significant sum and it is reasonable for the insurer to require verification of such payments, which form part of the claimant’s taxable income.
I accept these clients may be reluctant to sign statutory declarations regarding such cash payments, but ultimately, I anticipate the claimant will be able to prove such payments have been made for the landscaping work undertaken by him. I note, on the basis such cash payments have been received, the insurer arranged for PKF to recalculate PAWE and the revised figure accords with the calculation made by the solicitor for the claimant.
However, the requirement by the insurer these cash payments be verified by statutory declaration is not unreasonable, having regard to the quantum of these cash payments, and therefore, I am satisfied, on the information before me, the claimant’s PAWE, for the purposes of the Act is $1,171.16.
The decision of the insurer as to the claimant’s PAWE is affirmed.
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