Shahmiri v Allianz Australia Insurance Limited

DETERMINATION OF MERIT REVIEW PANEL
CITATION:	Shahmiri v Allianz Australia Insurance Limited [2021] NSWPICMRP 2
CLAIMANT:	Owjan Shahmiri
INSURER:	Allianz Australia Insurance Limited
MERIT REVIEW PANEL MEMBERS:	Katherine Ruschen Brett Williams Terence O’Riain
DATE OF DECISION:	9 August 2021
CATCHWORDS:	MOTOR ACCIDENTS- statutory benefits; pre-accident weekly earnings; earner; earnings; earnings as an earner; panel review; majority decision; minority reasons; PIC Rule 128(6); Covid 19; Transports Accident Act 1986 (Vic); Workers Compensation; Regulated Costs; Held- merit review decision is confirmed; claimant’s costs assessed in accordance with the Motor Accident Injuries Act 2017.

Majority Reasons

Background

The Claimant was injured in a motor vehicle accident on 24 October 2020 (the accident). The other vehicle involved in the accident was at fault, having crossed over to the wrong side of the road and collided with the Claimant who was travelling on his scooter. The Claimant subsequently lodged a claim for statutory benefits with the Insurer of the at-fault driver (the Insurer).
On 1 December 2020, when assessing the Claimant’s entitlement to weekly payments of statutory benefits under Division 3.3 of the MAI Act, the Insurer determined that the Claimant’s pre-accident weekly earnings (PAWE) were $473.44.
The Claimant sought an internal review of the Insurer’s decision in relation to his weekly payments. On 17 December 2020 the internal reviewer set aside the Insurer’s earlier decision and determined the Claimant’s entitlement to weekly payments on the basis that his PAWE were $462.73 (the IR decision).
On 21 December 2020 the Claimant lodged a merit review application with the Dispute Resolution Service seeking a review of the IR decision in relation to his PAWE. On 26 February 2021 the merit reviewer set aside the internal review decision and determined that the Claimant’s PAWE were $829.72 (the merit decision).
On 23 March 2021 the Insurer applied to the Commission for a review of the merit decision (the application). On 13 May 2021, having found that there was reasonable cause to suspect that the merit decision was incorrect in a material respect, the President’s delegate accepted the application and referred it to a merit review panel (the Panel). Together with merit reviewer Ruschen the application has been referred to us to review the merit decision in accordance with s 7.15 of the MAI Act.
Having considered the subject matter of the dispute, the submissions and documents relied on by the parties together with s 52 of the Personal Injury Commission Act 2020 and Procedural Direction PIC2 we find that the proceedings can be determined on the papers. We are satisfied that sufficient information is available in connection with the proceedings to allow us to determine the dispute without holding any formal hearing. The parties were advised that the Panel proposed to take this course. No objection was raised by either party.
We have had the benefit of reading in draft the decision of merit reviewer Ruschen, who has determined that the merit decision should be set aside and that a decision in substitution for that decision should be made. We have arrived at a different conclusion. In our view the merit decision should be confirmed. In accordance with Rule 128(6) of the Personal Injury Commission Rules our decision, representing a determination of the majority of Panel members, is taken to be the determination of the Panel.

Submissions

The Claimant argues that as he was an ‘earner’ from 23 October 2019 – 10 May 2020, a period of 29 weeks, his PAWE should be calculated on the basis of his gross earnings during the 12 months immediately before the accident divided by 29, representing the number of weeks he was actually an earner in this 12 month period.
In short, the Insurer argues that the Claimant’s PAWE should be calculated by dividing the gross earnings received by the Claimant during the 12 months immediately before the accident by 52, representing the number of weeks in a 12 month period. We will engage more fully with the Insurer’s submissions in the reasons that follow.

Reasons

Although the Claimant was unemployed when the accident occurred, he had been employed for 29 weeks during the 12 months immediately before the date of accident. Accordingly, he fell within the definition of ‘earner’[1] and is entitled to weekly payments of statutory benefits for the first two entitlement periods[2].
[1] Schedule 1 cl. 2(a) MAI Act.
[2] Division 3.3 MAI Act, specifically ss 3.6 & 3.7.

Schedule1 clause 4 of the MAI Act is central to these proceedings. The clause is in the following terms:
“4 Meaning of “pre-accident weekly earnings”—general
(1)Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.
(2)In the following cases, pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means—
(a)if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months—the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,
(a1) if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period—the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,
(b)if subclause (3) applies—the weekly average of the gross earnings 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 parties agree that the Claimant’s PAWE is to be determined in accordance with Schedule 1 cl. 4(1). The critical issue for determination by the Panel is the proper construction of that provision.
In Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28 at [69] the High Court held that:
“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 [45]. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole"[46]. In Commissioner for Railways (NSW) v Agalianos [47], 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.”
As recorded above, the merit reviewer accepted the approach contended for by the Claimant and determined his PAWE accordingly.
The Insurer argues that if the merit reviewer’s interpretation were to be adopted by all insurers, earners could be entitled to statutory benefits correlating with, for example, earnings that they had earnt once off, even if they had only worked for one week over the preceding 12 month period, as opposed to those earnings being averaged over 52 weeks. Such an outcome, the Insurer argues, could hardly have been the legislature’s intention.
In our view, this submission seems to ignore the exceptions found in Sch 1 cl. 4(2), the application of which may result in an outcome the Insurer argues is contrary to the legislature’s intentions. For example, cl. 4(2)(a) would allow PAWE to be determined by reference to a period of less than 12 months and, subject to cl. 4(4), in some cases a much shorter period, including a single week.
Further, sub-cl. 4(2)(c) allows PAWE to be determined by reference to earnings that were never actually received by an injured person. That provision allows PAWE to be determined on the basis of the average weekly gross earnings that an earner could reasonably have been expected to earn, but for the injury, in employment under an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person. That provision applies to an injured person who is an ‘earner’ as a result of Sch 1 cl. 2(b), namely a person who, before a motor accident, had entered into an arrangement (whether or not an enforceable contract) with an employer or other person to undertake employment, or to commence business as a self-employed person, at a particular time and place.
At paragraph 17 of its’ submissions, the Insurer argues that:
“As is objectively evident upon a reading of clause 4, … [the merit reviewer] should only subsequently have, after determining that no exceptions applied, simply calculated 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 (subclause 4(1)). That is, divided the total gross earnings for the 12 month period by 52 weeks…”
By reference to the exceptions to sub-cl. 4(1) that are found in sub-cl. 4(2), the Insurer poses the following question in its submissions: What would be the point of having exceptions if they were not required because the principle to which they pertain could be manipulated without them? In the Insurer’s submission, the exceptions in cl. 4(2) exist because 4(1) is fixed. There is force to this submission. However, it does not in our view account for the words ‘as an earner’ in sub-cl. 4(1) or the construction of sub-cl.4(1) that we prefer, matters to which we will return.
The Insurer submits that:
“… if anything cl. 4(2)(a) confirms that 4(1) requires the earner to have been earning continuously for 12 months, namely, for the whole of the 12 months. The Insurer submits that is because 4(2)(a) provides for an alternative situation, that being where the earner ‘had not been earning continuously for at least 12 months’, this would indicate that the converse is required pursuant to subclause 4(1) (i.e., that the earner had been earning continuously for 12 months)”.
But sub-cl.4(1) does not require an earner to have been earning continuously for 12 months. That is not what the sub-clause says. While the term ‘earning continuously’ is used in sub-cl. 4(2)(a), it is not found in sub-cl. 4(1). Further, the Insurer’s submission is not consistent with sub-cl. 4(4), which states that:
“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”.
In our view, critical to the resolution of the dispute is the work done in sub-cl. 4(1) by the term ‘as an earner’.
It is arguable that the term ‘as an earner’ is a qualification on the earnings to be taken into account and not a qualification of the period fixed by sub-cl. 4(1). This argument proceeds on the basis that, as there is no definition of ‘earnings’ in the MAI Act, if the qualification on earnings ‘as an earner’ were not included in sub-cl. 4(1) the gross earnings for the purpose of sub-cl. 4(1) might include earnings from both employment or self-employment and from other sources such as earnings from investments. In this way, it may be argued, the term ‘as an earner’ in sub-cl. 4(1) has work to do as a qualification or limitation on the type of earnings that can be included in the calculation required by the clause.
While persuasive, this argument does not appear to take into consideration Sch.1 cl.3, which is in the following terms:
“3   Meaning of “loss of earnings”
(1)Loss of earnings means a loss incurred or likely to be incurred in a person’s income from personal exertion.
(2)A person’s income from personal exertion is—
(a)  the amount that is the income of the person consisting of earnings, salaries, wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered, and
(b)  the proceeds of any business carried on by the person either alone or in partnership with any other person, and
(c)  any amount received as bounty or subsidy in carrying on a business.
(3)A person’s income from personal exertion does not include—
(a)  interest, unless the person’s principal business consists of the lending of money, or unless the interest is received in respect of a debt due to the person for goods supplied or services rendered by the person in the course of the person’s business, or
(b)  rents or dividends, or
(c)  any employer superannuation contributions, or
(d)  the monetary amount of any annual, sick or other leave entitlement.”

Although cl. 3 defines the term ‘loss of earnings’, as opposed to ‘earnings’, so as to construe Division 3.3 and Schedule 1 in a cohesive way, it is appropriate to proceed on the basis that, as ‘loss of earnings’ means ‘a loss incurred or likely to be incurred in a person’s income from personal exertion’, ‘earnings’ should be taken to mean ‘a person’s income from personal exertion’. ‘A person’s income from personal exertion’ is income of the type referred to in Sch 1 sub-cl. 3(2) and excludes income of the type referred to in Sch 1 sub-cl. 3(3). In our view, this approach results in a construction of ‘earnings’ that is cohesive and consistent with the language and purpose of the statute.
That being the case, the term ‘earnings’ used in sub-cl. 4(1) does not require qualification and the term ‘as an earner’ must be included in the provision for a different purpose.
We have concluded that the work done by the term ‘as an earner’ in sub-cl. 4(1) is to define the period over which the gross earnings received by an earner, during the 12 months immediately before the day on which the accident occurred, are to be averaged by reference to the number of weeks the earner was actually earning income from personal exertion during that 12 month period.
In our view, the words ‘during the 12 months immediately before the day on which the motor accident occurred’ in sub-cl. 4(1) establish the period during which gross earnings received by an earner are to be quantified, as opposed to defining the period over which the weekly average of the gross earnings received by an earner is to be calculated.
In summary, we have concluded that, for the purposes of sub-cl.4(1), PAWE is calculated by:
(a)   determining the earner’s gross earnings received during the 12 months immediately before the day on which the motor accident occurred;
(b)   determining the number of weeks during the 12 months immediately before the day on which the motor accident occurred that the earner was earning as an earner, and
(c)   averaging the sum arrived at in answer to (a) by the number of weeks arrived at in answer to (b).
During the 12 months immediately before the day on which the accident occurred the Claimant received earnings as an earner from 23 October 2019 – 10 May 2020, a period of 29 weeks. From 11 May 2020 – 23 October 2020 he was not receiving earnings as an earner as he was unemployed. His gross earnings were $24,062. Accordingly, his PAWE were $24,062/29 = $829.72.
Having regard to the other provisions in cl. 4, and Schedule 1 more broadly, the construction of sub-cl. 4(1) that we prefer is compatible with both when construed as a whole.
We consider that the construction of sub-cl. 4(1) that we prefer is consistent with the overall scheme of Part 3 Division 3.3 and the objects of the MAI Act, which include providing early and ongoing financial support for people injured in motor accidents.
This construction does not offend the other objects of the MAI Act found in s 1.3. As recorded earlier in these reasons, there are other sub-clauses in cl. 4 that would result in the same, or similar, outcomes.
Finally, we note that our decision results in an outcome that is consistent with the decision under review and a number of other merit review decisions that address the construction of Sch 1 cl. 4(1) and the basis upon which PAWE is to be determined in accordance with that provision. In this regard, see for example ACT v AAI Ltd t/as GIO [2018] NSWSIRADRS 72, APX v AAMI [2020] NSWSIRADRS 220, ARH v QBE [2020] NSWSIRADRS 260 and AAD v AAI Ltd t/as AAMI [2021] NSWPICMR 2.
In light of the conclusions we have reached in relation to the construction of sub-cl. 4(1) we find that the merit decision should be confirmed.

Costs

The Claimant’s legal representatives seek the maximum regulated costs in connection with this application. Sch 1 cl. 1(3) of the Motor Accident Injuries Regulation 2017 allows for the payment of costs for legal services provided in connection with a review of any merit review decision by a review panel. We find that the Claimant’s reasonable and necessary legal costs in connection with the review are $1,660 plus GST.

Brett Williams Terence O’Riain
Merit Reviewer Merit Reviewer
Personal Injury Commission

Minority Reasons

I have read the majority decision of merit reviewers Williams and O’Riain and disagree with that decision for the reasons set out below.
This Panel Review concerns the claimant’s entitlement to weekly benefits for the first 78 weeks after the motor accident.
Sections 3.6 and 3.7 of the MAI Act make provision for weekly payments of statutory benefits during the first 78 weeks to 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. Payments during the first 78 weeks under sections 3.6 and 3.7 are based on the difference between the person's pre-accident weekly earnings (PAWE) and the person's post-accident earning capacity (if any). A percentage reduction is then applied, which varies depending on whether payments fall under section 3.6 or 3.7.

In order to calculate the amount of weekly benefits to be paid under section 3.6 or 3.7 Mr Shahmiri’s PAWE must first be calculated.
Mr Shahmiri was involved in a motor accident on 24 October 2020. The insurer calculated pre-accident weekly earnings in the sum of $462.73 per week by taking the gross earnings of the claimant over the 12 month period preceding the date of the accident and dividing that figure by 52 weeks. This calculation does not take into account that Mr Shahmiri’s gross earnings were received during the first 29 weeks of the 52 week period. For the remainder of the 52 weeks Mr Shahmiri did not receive any earnings as an earner because of the COVID-19 pandemic.
The issue for consideration is whether Schedule 1, clause 4(1) of the Act requires the earnings of an injured person received during the relevant 12 month period to be averaged over the whole of that 12 month period, or whether any period in which no earnings were received should be excluded such that the average is taken over only the number of weeks in which earnings as an earner were received (in Mr Shahmiri’s case, 29 weeks).
A fundamental principle of statutory interpretation is that the Act is to be construed as a whole. As the High Court said in Project Blue Sky v Australian Broadcasting Authority (S41-1997) [1998] HCA 28 (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[45]. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole"[46]. In Commissioner for Railways (NSW) v Agalianos [47], 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.”
In other words, you cannot construe the meaning of a specific provision in an Act without considering the sections which surround it, and the structure and meaning of the Act as a whole. The Act should be construed so as to operate coherently, consistently, and harmoniously, as a whole.
With the above in mind, the provisions set out and discussed below are relevant and informative in so far as clause 4(1) is concerned.

Meaning of “earner”

There is no dispute that the claimant is an earner under clause 2(a). Clause 2(a) defines “earner” as:
“2 Meaning of ‘earner’
A person who is injured as a result of a motor accident is an
"earner" if the person is at least 15 years of age and who--
(a) was employed or self-employed (whether or not full-time)--
(i)at any time during the 8 weeks immediately preceding the motor accident, or
(ii) during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident, or
(iii) during a period or periods equal to at least 26 weeks during the 2 years immediately preceding the motor accident,
and, at the date of the accident, had not retired permanently from all employment…
(emphasis added)”
Clearly, clause 2(a) provides that a person is still considered an “earner” for the purpose of weekly benefits and the Act generally, even if they did not generate income for the whole of the relevant 12 month period. The threshold is a minimum of 13 weeks to be an “earner” for the purpose of weekly benefits.
It is also implicit in the inclusion of the words “and, at the date of the motor accident, had not retired permanently from all employment” that a person may not be receiving income as at the date of the accident (and income may have ceased up to 39 weeks prior, having regard to the 13 week threshold) but is still an “earner” on the date of the accident and at all material times for the purpose of the Act.
This is reinforced in sections 3.6 and 3.7 which both state the following:
“Note : Only a person who was an earner when injured is entitled to statutory benefits under this section--see Schedule 1.”
(emphasis added)
As noted, under clause 2(a) a person does not need to be in receipt of earnings from employment or self-employment at the time of the accident to meet the definition of “earner”. However, they “must be an earner when injured to be entitled to statutory benefits”. It follows from this that once a person meets the definition of “earner” under clause 2(a) they are then an “earner” at all material times under the Act, including for each and every week of the relevant 12 month period under clause 4(1), including any period within the 12 months where there were no earnings.
To say an injured person is an “earner” only at those times when they actually receive earnings from employment or self-employment when they have not retired permanently from all employment is inconsistent with the definition of “earner” in clause 2(a) and the wording of sections 3.6 and 3.7. A person’s status as an “earner” under the Act is not intermittent such that it stops when earnings cease and starts when earnings begin again and so on. A person’s status as an “earner” under the Act clearly does not wax and wane as and when income is received in the relevant period. Once an injured person meets the definition of “earner” under the Act their status as an “earner” is fixed in every practical sense and for all material times for the purpose of the Act.
The fixed status of “earner” is apparent when one considers the use of the word “earner” in sections 3.6 and 3.7. If an “earner” is only an “earner” at a point in time when they are actually in receipt of earnings a literal reading of sections 3.6 and 3.7, which require Mr Shahmiri to be an earner on the date of the accident, would result in Mr Shahmiri, who was not working on the date of the accident, having no entitlement to weekly benefits under section 3.6 or 3.7
Accordingly, once Mr Shahmiri establishes he is an earner under clause 2(a) he continues to be an “earner” at all material times during the pre-accident period for the purpose of clause 4(1), even if there are periods within the pre-accident period when he did not earn. To say otherwise would require that “earner” be given two different meanings:
(a) one for the purpose of clause 4(1) that is, a definition that says a person is only an “earner” at the times or during the periods they are actually in receipt of earnings from employment or self-employment; and
(b) another for the purpose of sections 3.6 and 3.7 that is, that a person is an earner on the date of the accident, even if they are not in receipt of earnings from employment or self-employment as at that date, provided they have not retired permanently.
The definition required to give the intended effect to sections 3.6 and 3.7 is the definition that exists in the Act at clause 2(a) and is the only definition, which must be applied uniformly to all provisions of the Act.
To say, for the purpose of sections 3.6 and 3.7, that Mr Shahmiri is an “earner” as at the date of the accident despite his unemployment status at that time but is not an “earner” at any time he was unemployed for the purpose of clause 4(1) of the Act is, in my view, a false premise which is not maintainable under the Act.

Clause 4(1) – “earnings as an earner during the 12 months”

Schedule 1, Clause 4(1) of the Act provides that the meaning of “pre-accident weekly earnings” is:
“4 Meaning of "pre-accident weekly earnings"--general
(1)"Pre-accident weekly earnings" , in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.”
(emphasis added)
It follows from the reasoning above in relation to the definition of “earner” that the words in clause 4(1) “earnings as an earner” do not prescribe that the period over which the weekly average is to be calculated is the total sum of the number of weeks in which the earner actually earned. As discussed above, to do so would be inconsistent with the definition of “earner” in clause 2(a) and the wording and intention of sections 3.6 and 3.7.
The qualification in clause 4(1) that it be the average of earnings “as an earner” can only be a qualification on the nature of earnings to be taken into account and not a qualification in relation to the period fixed by clause 4(1). A person is an “earner” under clause 2(a) by reason of “employment or self-employment”. Accordingly, their “earnings as an earner” for the purpose of clause 4(1) are their earnings from “employment or self-employment” (clause 2(a)) and not from any other source such as investments.
There is no definition of “earnings” in the Act. Accordingly, if the qualification on earnings “as an earner” were not made in clause 4(1) the gross earnings for the purpose of clause 4(1) might include earnings from both employment or self-employment and from other sources such as earnings from investments. In this sense the wording “as an earner” in clause 4(1) has work to do as a qualification or limitation on the type of earnings that can be included in the calculation required by the clause.
Whilst it is tempting to take the definition of “loss of earnings” in schedule 1 as also a definition of “earnings” the position remains that if clause 4(1) is given the effect desired by Mr Shahmiri the definition of “earner” for the purpose of clause 4(1) would not be reconcilable with the use of the term “earner” in other provisions of the Act.
In any event, “loss of earnings” and “earnings” are not the same. The term “loss of earnings” does not appear in clause 4(1) which does not concern actual or anticipated loss or any loss at all, but the opposite. Clause 4(1) concerns positive earnings in the relevant period preceding the accident. “Loss of earnings” on the other hand becomes a relevant term once the injured person has met the definition of earner and has had their PAWE calculated under clause 4. It then becomes necessary to look at actual loss in the post-accident period for the purpose of making payments under section 3.6 or 3.7 of the Act. If, for example, a person is an “earner” and has had their PAWE calculated at say $500 but they are able to continue to earn $500 in any week after the accident (or have been paid sick leave in this sum) then they have not suffered a “loss of earnings” (sick leave being excluded in the definition of loss of earnings). As such, even though they have been found to be an “earner” and had their PAWE calculated, weekly benefits would not be payable in any such week.
Clearly, “earnings as an earner” means earnings from employment or self-employment. The definition of “loss of earnings” particularises the types of payments that are included in or excluded from actual post-accident loss of earnings for the purpose of calculating the extent to which weekly benefits become payable under sections 3.6 and 3.7 which is distinct from the calculation to be carried out under clause 4(1).
As stated by Lord Mersey in Thompson v Goold & Co [1910 AC 409, 420 it is “a strong thing and generally a wrong thing” to imply into an Act of Parliament words which are not there. The Act does not suggest in any way that the definition of “loss of earnings” is to be taken as a definition of “earnings”. Nor is “loss of earnings” included in or relevant to clause 4(1).
If “earnings” were given the same definition as “loss of earnings” then for the purpose of clause 4(1) all annual leave, sick leave or any other leave entitlements (which are excluded from the definition of “loss of earnings) paid in the relevant pre-accident period would need to be deducted from a claimant’s gross earnings before calculating their PAWE, which is clearly not what is required of clause 4(1). This reinforces that “earnings” and “loss of earnings” are not the same and it cannot be implied into the act that the definition of “loss of earnings” is also to be taken as the definition of “earnings”. That would be a “strong thing” and a “wrong thing” to do.
If the words “earnings as an earner” were considered to somehow also fix the period for calculation of the weekly average (in addition to limiting the type of earnings) such that the period over which the weekly average is calculated is limited to the total number of weeks in which earnings were actually received it would result in overcompensation in many circumstances. Take for example the seasonal worker who ordinarily works only 13 weeks per year (meeting the threshold to be an earner under clause 2(a)) during fruit picking season or at a ski resort in ski season. If that worker were injured and their PAWE calculated as the average earnings over the 13 week earning period only, the weekly benefits payable would amount to a windfall.
Similarly a casual worker who works in after school day care only during school terms and therefore does not receive earnings during school vacation periods would also be overcompensated if the school vacation weeks were excluded from the calculation of their PAWE.
However, neither the seasonal worker nor the casual school term only worker has retired permanently from all employment. Accordingly, their status as an “earner” continues under clause 4(1):
(a) for the seasonal worker: during any period in between seasons that falls within the 52 week pre-accident period, and
(b) for the school term only worker, during any school vacation periods caught by the 52 week pre-accident period.
The words “earnings as an earner” in clause 4(1) limit the earnings that can be taken into account to earnings obtained through “employment or self-employment” only. The period over which the average of those earnings is then taken is “during the 12 months”. By reason of the definition of “earner” discussed above, Mr Shahmiri is considered an earner for each and every day of this 12 month period, even if he did not obtain earnings from employment or self-employment during some of this period. It follows that the words “during the 12 months” fixes the period for the purpose of calculating the average at 52 weeks.
Words in a statute are to be given their ordinary meaning. The ordinary meaning of “during” is “throughout the duration” of the specified period, which in this case is the 12 month period preceding the date of the accident. Mr Shahmiri’s PAWE is therefore his total gross earnings from employment or self-employment received throughout the duration of the 12 month pre-accident period, divided by 52 weeks.
In reaching the above conclusion regard has also been had to the entirety of clause 4. Clause 4(1) is one of a number of subclauses dealing with calculation of the PAWE in different circumstances. An injured person who is an earner falls under subclause (1) unless they fall under one of subclause (2)(a) to (c).
Clause 4(2)(a) accommodates injured persons who first began to earn as an earner less than 12 months prior to the accident. However, whilst the 12 month period is adjusted to the period from when the earner first began to earn continuously, as with Clause 4(1) it continues up to the day before the accident. For the same reasons in relation to clause 4(1) discussed above, this subclause also does not provide for any further adjustment, for example to accommodate periods of interruption (when there were no earnings, regardless of the reason).
Subclause (2)(a1) accommodates injured persons who worked during the first year of the two year pre-accident period but did not obtain any earnings at any time during the second year of the pre-accident period. Even if they did not earn each week for the whole of the first year (they only need to have earned for at least 26 weeks) and did not earn over consecutive weeks, their PAWE is nonetheless calculated based on “average weekly gross earnings received … during the first year…”. In other words, like the second year of the two year pre-accident period under Clause 4(1), any PAWE calculated under (2)(a1) is the gross earnings in the first year of the two year pre-accident period, divided by 52 weeks.
Clause 4(2)(b) allows the period over which the average is calculated to commence from the date of the change of circumstances, until the accident. Other than an adjustment to the beginning of the relevant period, Subclause (2)(b) also does not allow for any other adjustment to the relevant period. The average must still be taken over the period up to the date of the accident and therefore is inclusive of any periods, within this period, where there was an interruption to earnings.
In short, regardless of whether an injured person’s PAWE is assessed under Clause 4(1) or one of the subclauses under Clause 4(2) there is no provision for any adjustment to be made to the period specified under the applicable subclause to accommodate interruption to employment or earnings during the relevant period, regardless of the reason.
There may be many circumstances in which an earner’s pre-accident earnings have been interrupted during the relevant period. It may be because, as is the case for
Mr Shahmiri, Covid-19 impacted their ability to earn or it may be because other circumstances required them to take leave of absence without pay (for example a pre-accident illness or injury, maternity leave or a need to care for an injured or sick family member). It may be because they were made redundant or their employer went out of business and several weeks or months passed before they were able to secure a new job.
Whilst the COVID pandemic is an entirely new circumstance (and no doubt unpredicted at the time the Act came into force), which has interrupted the earnings of many earners there is no flexibility in Clause 4(1) to vary the calculation of an injured person’s PAWE to accommodate an interruption or variation in earnings for any reason, including COVID-19, other than those prescribed in subclause (2) (noting subclause (2) adjusts the relevant pre-accident period in certain circumstances but also does not then allow for further adjustment, if there is an interruption to earnings during the adjusted period).
Unfortunately, under the current regime Mr Shahmiri’s COVID-19 circumstances are not distinguishable from other circumstances such as the seasonal worker who does not work a full year or the after school care casual worker who only works during school terms and does not receive any income in school vacation periods.
As noted in paragraph 27 above it is “a strong thing and generally a wrong thing” to imply into an Act of Parliament words which are not there. Until and unless the Act is amended to accommodate the specific circumstances of COVID-19 clause 4(1) has uniform application to any circumstance of an interruption in earnings, whatever the reason for the interruption.

Other considerations

The Workers Compensation Act1987 (the WC Act) contains similar provisions regarding calculation of an injured worker’s pre-injury average weekly earnings (PIAWE). The Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020 specifically amended the WC Act to factor in COVID-19 circumstances into calculation of a worker’s PIAWE. The amendments to the WC Act mean:
(a) in calculating PIAWE, an adjustment may be made to the relevant earning period if a worker has had a financially material reduction in earnings due to the pandemic, and
(b) only earnings for work performed may be included in the calculation of PIAWE.
Whilst there are similarities between parts of the WC Act and parts of the Motor Accident Injuries Act 2017 (the MAI Act), they are distinctly different schemes, having different purposes. Unlike the WC Act, Parliament has not taken steps to amend the MAI Act to accommodate the impact Covid-19 may have on an injured person’s PAWE.
Accordingly, the relevant provisions in Schedule 1 continue to apply. Clause 4(1) is clear in its terms that there is to be a calculation of 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”. Earnings “as an earner” are the earnings received from employment or self-employment, as distinct from earnings obtained in some other capacity, and (for the purpose of PAWE) may include annual leave, sick leave or other leave entitlements that were paid in the pre-accident period. The weekly average is the average of all earnings from employment or self-employment throughout the duration of the relevant 12 month period and is therefore calculated on the basis of the gross earnings received throughout the 12 month period divided by 52 weeks.

It is also informative to consider the position in Victoria. Section 4(1) of the Transport Accident Act 1986 (Vic) is in the same terms as clause 4(1) of the NSW Act and provides:
“In this Act, pre-accident weekly earnings, in relation to an earner (other than a self-employed person) who is injured as a result of a transport accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the [day of the accident], unless subsection (2) applies.”
Section 4(1) was inserted into the Victorian Transport Accident Act in 2004 and therefore precedes the NSW Act, which came into force in 2017.
The Victorian equivalent to clause 4(1) in the NSW Act was considered in the matter of Jansz v Transport Accident Commission (General) [2010] VCAT 1098 (21 June 2010) (Jansz). In that matter, Ms Jansz had taken eight weeks leave without pay during the relevant 12 month period preceding the accident for her wedding and an extended honeymoon. She received no income during this eight week period whereas in any other given year she would have worked those eight weeks and received an income. However, the Victorian Civil and Administrative Tribunal affirmed the Transport Accident Commission’s decision that Ms Jansz’ PAWE is the weekly average of her earnings over the 12 months/52 weeks before the accident, inclusive of the eight weeks when she did not receive any income.
Whilst the Review Panel is not bound by a decision of the Victorian Civil and Administrative Tribunal, this decision has persuasive value particularly in circumstances where the relevant provisions are in identical terms and the Victorian provision has been in force for some time prior to the NSW provision.
It is also relevant to note that once the first 78 weeks after the accident expires, any entitlement to ongoing weekly benefits is assessed under clause 3.8. To the extent it might be considered that clause 4(1) could produce an inequity for a person such as Mr Shahmiri this is rectified for any person who continues to be entitled to weekly benefits after the first 78 weeks. Section 3.8 of the Act deals with weekly benefits after the first 78 weeks. It calculates weekly benefits based on the “…difference between the person's pre-accident earning capacity [rather than PAWE] and the person's post-accident earning capacity (if any)...”. Accordingly, an earner’s PAWE no longer forms the basis of assessing weekly benefits. In this case, for the purpose of section 3.8,
Mr Shahmiri would only need to demonstrate he had the capacity to earn on a full-time basis before the accident, even though he did not earn every week due to COVID-19.
In the circumstance of this claimant the inclusion of weeks of no income due to COVID-19 in the calculation of his PAWE under clause 4(1) may seem inequitable. On the other hand, it may not be. Mr Shahmiri was not working at the time of the accident due to COVID-19. The motor accident injuries scheme is designed to compensate in circumstances where an injured party would not have suffered a loss but for the accident. In Mr Shahmiri’s circumstances it is quite possible that he would have continued to be out of work due to the pandemic for some or all of the first and second entitlement periods under the Act, even if he had not been injured in a motor accident.
Section 33 of the Interpretation Act (NSW) 1987 requires the Review Panel to prefer an interpretation of statutes which would promote rather than retire to the purpose of the relevant statute. As observed in Jansz [at 19] statutes rarely have one simple purpose. Their purposes are often complex and to understand the entirety of the purpose one must look at the entirety of the text. A compensation act such as the MAI Act has a general objective of compensation. However, it does not seek to compensate to the highest level of theoretical perfection every loss that has been suffered at every point. Similarly, taxing statutes seek to raise tax. They do not at every point seek to raise the maximum amount of tax from the taxpayer at every point.
Compensation statutes such as the MAI Act include compromises which give less than full compensation. As noted in the Motor Accident Injuries Bill second reading speech on 9 March 2017 “the new defined benefits scheme has been introduced with a step-down in loss of weekly earnings and time frames where compensation is scaled back and ceases” (emphasis added). Accordingly, the Act is not designed to compensate a claimant to perfection and it is certainly not designed to over-compensate. If the Act were interpreted so as to compensate Mr Shahmiri in the way he desires it may very well overcompensate if, for example he would have continued to be without work due to COVID-19 and therefore suffered a loss, even if the accident had not occurred. It would most certainly overcompensate the case of the seasonal worker or casual employee working in school holiday periods only.
It is not possible to draw a distinction between COVID-19 affected earners and seasonal or casual earners in the Act, as currently worded even though one might be tempted to have sympathy for Mr Shahmiri’s position. To the extent it might be considered unfair or inequitable to not take into account those weeks where a person such as Mr Shahmiri did not work because of COVID-19 rather than circumstances of their own choosing in the calculation of his PAWE the Act would need to be amended to specifically accommodate such circumstances, as has been done with the WC Act.
Whilst there are previous single merit review decisions which interpret clause 4(1) in the way desired by Mr Shahmiri, this Review Panel is not bound by those decisions and I consider those decisions to be wrongly decided.

Conclusion

My conclusion, on the basis of the above reasoning is that pursuant to clause 4(1)
Mr Shahmiri’s PAWE is his gross earnings as an earner in the 12 month period preceding the accident divided by 52 weeks. Accordingly, I am of the view that the merit review decision of 26 February 2021 should be set aside and the insurer’s internal review decision dated 17 December 2020 that Mr Shahmiri’s PAWE is $462.73 be reinstated.

Katherine Ruschen
Merit Reviewer
Personal Injury Commission

[2021] NSWPICMRP 2

9 August 2021