Singh v Allianz Australia Insurance Limited
[2023] NSWPICMR 14
•10 March 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Singh v Allianz Australia Insurance Limited [2023] NSWPICMR 14 |
| ClaimanT: | Gagandeep Singh |
| Insurer: | Allianz Australia Insurance Limited |
| Merit Reviewer: | Ray Plibersek |
| DATE OF DECISION: | 10 March 2023 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; pre-accident weekly earnings (PAWE); sub-clause 4(1) of Schedule 1; claimant worked as a consultant; claimant also operated business as a Uber and Ola driver; calculation of PAWE; dispute over calculation of income and business expenses; claimant and insurer made several different estimates of income and vehicle expenses; disagreement over the interpretation of the data and financial and business records; Held – claimant’s PAWE determined on the basis of recalculated income and expenses; claimant’s PAWE should be calculated for 12 month period immediately before the accident; tax returns not useful because calculated over different financial year period; remitted to the insurer for reconsideration and recalculation of the claimant’s entitlements; Lovett v QBE Insurance (Australia) Limited, Mula v NRMA, Moltmann v Insurance Australia Limited t/as NRMA Insurance and Conde v Insurance Australia Limited t/as NRMA Insurance cited and applied; Alliance Insurance Australia Limited v Shahmiri noted. |
| Determinations made: | Certificate of Determination Issued under s 7.13(4) of the Motor Accident Injuries Act2017
1. The reviewable decision is set side. 2. The claimant’s pre-accident weekly earnings for the 12 month period between 3. The matter is remitted to the insurer for reconsideration and recalculation of the claimant’s entitlement to weekly payments of statutory benefits in accordance with these reasons and Division 3.3 of the MAI Act. |
REASONS FOR DECISION
BACKGROUND
On 30 December 2020, Gagandeep Singh, (the claimant) was injured in a motor vehicle accident.
The claimant reported injuries included: post-traumatic stress disorder, depression, anxiety and stress.[1]
[1] See application documents including allied health recovery request dated 31 March 2021.
In the 12 month period before the accident the claimant was self-employed as an Uber driver, Ola driver and was also employed for a short time by Better Staff as a project coordinator. He was also in receipt of Job Keeper.
The dispute is is a merit review application about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act).
On 15 February 2021 the insurer issued a pre-accident weekly earnings (PAWE) determination notice which calculated the claimant’s PAWE to be $604.55 (AD 1). The insurer’s determination was based on business and tax documentation provided by the claimant to the insurer.
The claimant applied for an internal review of that decision.
On 11 March 2021 the insurer issued their internal review Certificate of Determination which varied the original decision and assessed the claimant’s PAWE as $496.94 (AD 1). The internal review reasons set out the insurer’s calculations of the claimant’s PAWE.
The parties commenced a merit review application in the Personal Injury Commission (Commission). After hearing submissions from the parties on 17 September 2021, Member Williams made the following orders by consent, (AD 3):
“1. The reviewable decision dated 11 March 2021 is set aside.
2. The matter is remitted to the insurer for reconsideration.”
The claimant disputes the way the insurer has calculated his PAWE. In his application form dated 1 November 2021 the claimant wrote that the insurer made a mistake and that his weekly income is about $1,900 per week.
The claimant seeks a merit review of the insurer’s internal review determination dated
11 March 2021.
DOCUMENTS CONSIDERED
The documents I have considered are those listed in, referred to, or attached to, the application for merit review and the insurer’s reply together with all the attachments, bank statements and financial records produced by the claimant and the insurer.
I also note the spreadsheet produced by Mr Singh is filed in the portal as AD 4 and contains a detailed list of weekly income from Uber, Ola, Better Staff and government payments and also expenses. These expenses and payments are listed but there are no explanations, reconciliations or totals. Accordingly the spreadsheet was of limited assistance in calculating Mr Singh’s PAWE.
I further note that a teleconference was conducted between the parties on
14 November 2022. The teleconference record includes the following notation:“I asked [the insurer’s representative] to send Mr Singh a copy of AD 2 and for
Mr Singh to send the insurer his two most recent tax returns for y/e 2019 and 2020. I indicated I would allow both parties 2 weeks to send to each other all further documents or submissions and then two weeks to recalculate and make submissions on the weekly earnings amount. I specifically advised Mr Singh that he must show where he says the insurer has made any error in its calculations for the Commission to rule in his favour.”
SUBMISSIONS
The claimant submits in his application form dated 1 November 2021 that the insurer has made a mistake and that his weekly income was $1,900.
The claimant writes in his application form as follows:
“Income records we prepared as attached and insurance agreed that they have made a mistake but again insurance has not provided me with income what was agreed upon
in conversation with PIC officer MR. BRETT Williams.
Below document was prepared for income earnings and calculations as suggested by
MR. Williams [spreadsheet attached]
As per calculations income was calculated arousing $1900/week with bank statements
submitted and insurance representative Natasha agreed on call but later have adjusted
it to only $756/ week.
I have attached a decision letter by PIC as well which was sent to insurance.
Please find attached dispute resolution form over a claim for Car accident with no fault of mine.
Below are further details:
1. Firstly, my Professional income should be considered by the insurance company
while calculating my weekly wages as I was step down because of COVID (Once in a
lifetime situation) and was on job keeper at that time.
2. Secondly, Insurance company considered my uber earnings only as full time uber
driver. Even if, my uber earnings are considered, they should have considered my
uber earning which involved my full 40-50 hrs work as uber driver and not minimum
wages which I earned for 10-20 hrs for the week.
3. I have attached my uber earnings for 40-50 hrs for week prior to the accident which
was $1761. Insurance company should consider this income as my weekly wages if they are considering uber as my full time job.
I have attached all uber earnings and my professional offer letters as well. Please look
into and consider my full 40-50 hrs/ week earnings as my weekly wages.
Kindly look into this matter.”The claimant has calculated his income by collating his income and expenses records, bank statements and his taxation records. In his submissions he nominates a number of figures for his weekly income including $1,900 and his Uber earnings of $1,761. In his submissions the claimant did not identify or show where he said the insurer made any errors in its calculations. Nor did the claimant put forward any alternative calculations supported by detailed data as to what his actual income and expenses were showing his PAWE.
In its submissions in Reply dated 15 November 2021, (AD 2), the insurer submits that:
(a) the claimant is an earner for the purposes of Schedule 1, s 2 of the MAI Act as he was working continuously for the 12 months immediately preceding the motor accident;
(b) the claimant’s PAWE should be calculated in accordance with cl 4, sub-clause (1) of Schedule 1 of the MAI Act;
(c) for the period before the accident the claimant was self-employed as an Uber driver, Ola driver and was also employed by Better Staff;
(d) based upon the claimant’s bank statements and statements from Uber and Ola, the insurer has calculated the claimant’s income for the 12 month period between 29 December 2019 until 29 December 2020, as $6,315.72 for Uber and $1,975.09 for Ola;
(e) based upon the claimant’s bank statements, the insurer has calculated the claimant’s income for the 12 month period between 29 December 2019 until
29 December 2020, as $37,349.75 for Better Staff;(f) the claimant provided the insurer with three different calculations for his expenses as an Uber and Ola driver: $583, $476.53 and $11,434;
(g) the claimant received COVID-19 disaster payments from Centrelink during the 52-week period prior to the subject accident. These payments were not received by the claimant as an earner from personal exertion, the payments do not constitute a loss of earnings and therefore may be excluded from the calculation of PAWE;
(h) the insurer calculated the claimant’s total income for the 12 month period between 29 December 2019 until 20 December 2020 to be $45,640.56 and total expenses equalled $6,671.41;
(i) net earnings from all three employment sources totalled $38,969.15 and was calculated based on the difference between total income and total expenditure, and
(j) PAWE was calculated by dividing $38,969.15 by 52 weeks, which equals $749.40 per week.
After receiving copies of the claimant’s tax returns the insurer’s solicitors made further written submissions and calculations dated 19 December 2022, (AD 8), attempting to re-calculate the claimant’s PAWE.
The insurer’s further submissions can be summarised as follows:
(a) the claimant has now produced his tax returns for the 2019/2020 and 2020/2021 financial years;
(b) as a sole trader in his work as a self-employed ride share driver that his PAWE must be calculated “on the basis of the net profit of his business, after deducting business expenses but before tax”, see Lovett v QBE Insurance (Australia) Limited [2022] NSWPICMR 18 (26 March 2022);
(c) this approach has been applied in circumstances similarly involving a ride share driver, see Mula v NRMA [2022] NSWPICMR 9;
(d) based on the decision in Mula, the purpose of cl 4(1) of Schedule 1 of the MAI Act, the claimant’s PAWE is the weekly average of the net earnings of his business that is, the gross earnings less business expenses;
(e) the claimant’s PAWE is based of the claimant’s self-reported expenses rather than the actual expenses of his self-employed business. The insurer submits now that the claimant has provided their tax returns evidencing their actual business expenses that the claimant’s PAWE ought to be based on the tax return;
(f) the tax returns from 2019/2020 and 2020/2021 both fall within the assessable period, being six months each, it is submitted that the earlier tax return ought to be used to assess the claimant’s PAWE as it does not involve any payments from the insurer or the post-accident period;
(g) based on the 2019/2020 tax return, the claimant’s total income for this period was $30,298 from the below sources:
(i)Best staff (ABN: 67131847811): $15,969;
(ii)Oncore Contractor Solutions: $3,470;
(iii)net small business income: $4,276, and
(h) the insurer submits that the claimant’s PAWE is most accurately assessed as: $30,298 ÷52 weeks = $582.65.
REASONS
This is a dispute between the claimant and the insurer about the calculation of the claimant’s PAWE. Because of the uncertainty and difficulty with accurately calculating the claimant’s business expenses for his self-driving business these types of cases are notoriously difficult to accurately assess the claimant’s business expenses and then accurately determine his PAWE.
Nature of merit review
This matter is a merit review of the decision of the insurer about the amount of weekly payments of statutory benefits in accordance with s 7.13 of the MAI Act. This decision is a reviewable decision as it is listed in Schedule 2, sub-clause 1 (a) of the MAI Act. This review is not a review of the insurer’s processes in making the weekly statutory benefits and/or internal review decision. The review requires that I decide what the correct and preferable decision is having regard to the material before me including any relevant factual material and any applicable law.
Legislation
In this merit review, the relevant applicable legislation commences with Division 3.3 of the MAI Act which deals with weekly payments of statutory benefits.
Many of the words used in with Division 3.3 are defined in Schedule 1 of the MAI Act. Schedule 1 defines: “earner”; “loss of earnings”; “pre-accident weekly earnings”; “pre-accident earning capacity” and “post-accident earning capacity”. The terms “gross earnings” and “earning capacity” is not separately defined in Schedule 1.
Definition of PAWE
PAWE is defined in cl 4 of Schedule 1 of the MAI Act as:
“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 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.”
I am satisfied that in this claimant’s case sub-clause 4 (2) does not apply because he had been earning continuously for over 12 months in his own driving business. Accordingly, the claimant’s PAWE must be calculated under sub-clause 4 (1).
The terms “earner” and “loss of earnings” are defined in Schedule 1, cls 2 and 3 as follows:
“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 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.
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.”
There is no dispute between the parties that the claimant is an ‘earner’ as defined in Schedule 1, cl 2 of the MAI Act, (R1). I am satisfied that the claimant is an ‘earner’ as defined.
Calculation of weekly benefits
The issue in dispute is about the calculation of the claimant’s PAWE.
Based on written submissions from the claimant and the insurer it seems that both parties dispute the calculation of the claimant’s income and the amount of the deduction of his expenses as a driver for Uber and Ola.
PAWE is defined in sub-clause 4(1) of Schedule 1 of the MAI Act to mean 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.
In this case the subject motor accident occurred on 30 December 2019. Thus the relevant 12 month period in the claimant’s case is from 29 December 2019 until 29 December 2020.
A number of cases have now determined that in cases involving a self-employed ride share driver, their PAWE must be calculated on the basis of the net profit of their business, after deducting business expenses but before tax.[2]
[2] See: Lovett v QBE Insurance (Australia) Limited [2022] NSWPICMR 18; Mula v NRMA [2022] NSWPICMR 9; Moltmann v Insurance Australia Limited t/as NRMA Insurance [2023] NSWPICMR 12.
A number of other cases have also determined that government payments to support people over the COVID-19 pandemic are excluded when determining a claimant’s PAWE.[3]
[3]See: Conde v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 28; and her Honour Harrison AsJ in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481.
Accordingly in this case, Mr Singh’s PAWE is to be determined over the relevant 12 month period on the basis of his job as an employee plus the net profit of his business, after deducting business expenses and before the payment of income tax.
The parties have widely divergent views of Mr Singh’s income and expenses based upon available evidence.
Mr Singh has produced his taxation records from the Australian Taxation Office (ATO), which show his taxable income less expenses for the financial year 2019 – 2020 to be $30,298, (AD 6). Mr Singh has produced his taxation records from the ATO, which show his taxable income less expenses for the financial year 2020 – 2021 to be $69,297, (AD 7).
Both the claimant and the insurer give a number of different calculations of the claimant’s PAWE, gross income, net income and expenses.
Having carefully reviewed and considered the above evidence, including taxation records, bank statements, source material and all the submissions I make the following findings.
The claimant calculates his income at about $1,900 per week. Based upon the evidence referred to above, the insurer has calculated the claimant’s PAWE variously at: $604.55, $496.94, $747.61 and $653.13.
Although the claimant has provided a large number of bank statements, copies of expenses, taxation records and a detailed spreadsheet his claim of $1,900 per week is an estimate based upon the material he has supplied. The claimant has not shown how he arrived at that exact figure simply states that it is around $1,900 per week. Nor does the claimant explain in any detail exactly where he disagrees with the insurer’s calculations and where the insurer has made mistakes in his submission. For these reasons I do not accept the claimant’s estimate of his weekly earnings.
As set out in detail above, the insurer has made numerous attempts to calculate the claimant’s PAWE. Each of these calculations are based upon different income and expenses data. The most recent calculation made by the insurer which finds the claimant’s PAWE to be $653.13 is derived from information contained in the claimant’s 2019/2020 tax return. I do not accept this calculation because it is based upon financial year data not the required period which is from 29 December 2019 until 29 December 2020.
I also do not accept two other PAWE calculations put forward by the insurer of $604.55 and $496.94 because they appear to be based upon incomplete information about income and expenses produced by the claimant in his occupation as a self-employed Uber and Ola driver.
In my review of all the evidence, submissions and calculations by the parties what appears to have most correctly assembled and analysed the available evidence is the figure of $747.61. I find this figure is derived from the most reliable methodology and calculation. This figure is based upon the correct period from 29 December 2019 until 29 December 2020. It also takes into account the claimant’s earnings (less expenses) as a self-employed Uber and Ola driver and also his work with Better Staff as a project coordinator. This calculation also (correctly) explicitly excludes COVID-19 disaster payments from the calculation of the claimant’s PAWE.
Accordingly, I find that the correct and preferable figure for the claimant’s PAWE is $747.61 and the insurer should recalculate and pay the claimant’s PAWE based on the figure of $747.61.
LEGAL COSTS
No submissions or any application has been made for the maximum amount of regulated costs allowable by the Motor Accident Injuries Regulations 2017, (the Regulation).
Regulated legal costs are not available to the claimant in this case.
Accordingly, I find that amount of legal costs payable to the claimant in this case are $NIL.
CONCLUSION
The reviewable decision is set aside and is remitted to the insurer for reconsideration and recalculation of the claimant’s entitlement to weekly payments of statutory benefits in accordance with Division 3.3 of the MAI Act.
The insurer is to calculate the amount of the weekly payments based on the claimant’s PAWE of $747.61.
The amount of legal costs awarded in this case is $NIL.
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