Spence v QBE Insurance (Australia) Limited

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	Spence v QBE Insurance (Australia) Limited [2023] NSWPICMR 60
CLAIMANT:	Heydan David Spence
INSURER:	QBE Insurance (Australia) Ltd
MERIT REVIEWER:	Elizabeth Medland
DATE OF DECISION:	11 December 2023
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review about the amount of weekly payments of statutory benefit that are payable under division 3.3; dispute as to the amount of the claimant’s pre-accident weekly earnings (PAWE); after an initial denial, insurer accepted the claimant is an “earner” for the purposes of division 3.3.; later accepted liability on basis the claimant was an earner, however, calculated PAWE under schedule 1 clause 2(a)(ii), and claimant submits the correct provision is clause 2(b)(i) on the basis that he had entered an agreement to undertake employment by way of seasonal harvesting work with a pastoral company; insurer denies an agreement had been entered into; Held – PAWE to be calculated pursuant to clause 2(b)(i) on basis an agreement had been entered t; no requirement to average the expected earnings for a closed period under the arrangement over a period of 12 months; reviewable decision set aside and PAWE calculated as $1,977.36.
DETERMINATIONS MADE:	CERTIFICATE Issued under s7.13(4) of the Motor Accident Injuries Act 2017 The reviewable decision 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), and is therefore a merit review matter under Schedule 2(1)(a) of the MAI Act. 1. The reviewable decision is set aside. 2. The claimant’s pre-accident weekly earnings amount is $1,977.36.

STATEMENT OF REASONS

BACKGROUND

The determination relates to a merit review dispute between the parties, under Schedule 2,

cl 1(a) of the Motor Accident Injuries Act2017 (MAI Act) which deals with the amount of statutory benefits payable under Division 3.3 of the MAI Act.
Specifically, the dispute centres on the calculation of the claimant’s pre-accident weekly earnings (PAWE).
Mr Heydan David Spence (the claimant) suffered injury as a result of a motor accident occurring on 12 August 2019.
He subsequently lodged an application for personal injury benefits (the claim) with the insurer on or about 20 December 2019 seeking payment of statutory benefits under Part 3 of the MAI Act.
The insurer initially denied liability to make payment of weekly statutory benefits on account of the insurer’s determination that the claimant was not an “earner” for the purposes of Div 3.3 of the MAI Act.
By way of an amended notice dated 30 September 2022, the insurer indicated acceptance of liability to pay weekly statutory benefits on the basis that it was accepted the claimant was in fact an “earner” for the purposes of Div 3.3 of the MAI Act. The claimant’s PAWE was calculated as being $177.75.
After quite a period of delay, the claimant emailed the insurer on 17 March 2023 disputing the calculation made in respect of weekly payments of statutory benefits. The insurer responded on 20 March 2023 reiterating it’s decision and advised the claimant he could seek an internal review.
I understand that no internal review has been requested or conducted.
Through his legal representatives, the claimant has lodged an application with the Personal Injury Commission (Commission) seeking a determination of the dispute.
I held a teleconference with the parties’ legal representatives on 25 October 2023. The parties were provided with the opportunity to lodge written submissions. Submissions from both parties have been received in compliance with directions in this regard. The parties agreed that it was appropriate for me to determine the dispute “on the papers”.
Despite the application being originally lodged as a miscellaneous claims dispute, it was noted and agreed by the parties that the dispute relates to the amount of weekly statutory benefits to which the claimant is entitled and is therefore a Merit Review dispute.

DOCUMENTS CONSIDERED

I have considered the documents provided in the application and reply and all other documents, including updated submissions, provided by the parties.

LEGISLATIVE FRAMEWORK

Division 3.3 of the MAI Act deals with an injured person’s 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 injured person’s “pre-accident weekly earnings”.
Schedule 1 of the MAI Act sets out the definitions relating to earnings for purposes of weekly payments of statutory benefits under Division 3.3.
Clause 2 of Schedule 1 of the MAI Act provides as follows:
“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 preceeding the motor accident, or
(i)during a period or periods equal to at least 13 weeks during the year immediately preceeding the motor accident, or
(i)during a period or periods equal to at least 26 weeks during the 2 years immediately preceeding the motor accident,
and, at the date of the motor accident, had not required 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
(i)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.”
Clause 4 of Schedule 1 of the MAI Act provides as follows:
“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.
(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.”
Schedule 2, cl(1)(a) provides that a dispute as to the amount of statutory benefits that is payable under Division 3.3 (weekly payments of statutory benefits to injured persons) is a merit review matter.
Section 7.12 of the MAI Act provides that a merit review matter may be referred to the President of the Commission for determination.

SUMMARY OF EVIDENCE AND SUBMISSIONS

There is no dispute that the claimant is entitled to payments of weekly statutory benefits. The dispute relates to the amount of those payments.
There is no dispute that the claimant is an “earner” for the purposes of Div 3.3 of the MAI Act. However, there is a dispute as to which provision of cl 2 of Schedule 1 of the MAI Act qualifies the claimant as an “earner”.
The insurer says the correct provision under which the claimant is to be considered an earner is cl 2(a)(ii) of Schedule 1.
The claimant submits that the correct provision under which he is to be considered an earner is cl 2(b)(i) of Schedule 1.
The claimant submits this is the case on the basis that he had entered an agreement to undertake employment. This expected employment was with Emerald Grain. Emerald Grain appears to be a pastoralist company, and the claimant asserts he would have been employed by them for the 2019 and 2020 harvest, if it were not for the accident.
The claimant has previously undertaken employment with Emerald Grain in prior harvest years.
Included in the material before me is a “contract” from Emerald Grain under cover of letter addressed to the claimant dated 18 September 2019. The contract offers employment to the claimant from 21 October 2019 to 28 February 2020 or earlier. The employment is listed as “country site employee – level 2” on a casual basis. The description of duties includes operation of the country storage site facilities.
An email from “Sandy Newman” of Emerald Grain to QBE claims, states that the claimant “would have been employed” for the harvest in 2019 and 2020 if he had been capable of working. For the 2019 harvest it is stated the employment would have been from the start of harvest until 20 December 2019 with an average of 6 days a week of work at 10 hours a day. For the 2020 harvest starting on 9 September 2020, employment would have been 8 hours a day, 5 days a week until 30 October and then from 2 November 2020 until

11 December 2020 at 10 hours a day, 7 days a week on average.
In the claimant’s statement dated 3 August 2023, the claimant gives details of conversations with “Sandy”, presumable, Sandy Newman about his prior employment with Emerald Grain during harvesting periods in the years 2016 and 2017. He received a letter in 2018 from Emerald Grain stating that there was no work for that year because of the drought.
The claimant states that he ran into Sandy again in May 2019, and asked about employment. The claimant states Sandy stated that there was no work at that time, however, he could do harvest and possibly pre-harvest. She stated that she would contact the claimant when it starts.
The claimant states that he received a text message from Sandy on 14 August 2019 (2 days after the subject accident). The claimant advised that he had suffered an injury. The claimant states that he received a further text message from Sandy on 15 October 2019 asking him to attend the induction that day. The claimant advised that he was not able to due to his injuries.
The statement also notes that between 15 and 28 February 2018 he worked for “Armstrong’s” driving a water truck. Between November 2018 and March 2019 the claimant worked with ACAR Pty ltd as a leading hand supervising contract workers on an almond farm.
The insurer submits the claimant is an “earner” on the basis that he was employed for a period of 13 weeks in the year immediately preceding the motor accident. This is on the basis that the claimant had been employed by “ACAR”. The insurer states in their submissions that although the earnings material suggests only 11 weeks of earnings, the insurer has nonetheless conceded that the claimant is an “earner” and raises no issue in this regard.
Despite a disagreement as to which clause applies, the parties nonetheless agree that the claimant is an “earner” for the purposes of Div 3.3 of the MAI Act.
The next step in the process comes under cl 4 of Schedule 1 of the MAI Act. This provision, as set out above, provides guidance as to the meaning of PAWE, and how to calculate same.
The insurer’s submissions do not venture into the application of cl 4 of Schedule 1 of the MAI Act, and instead focus on a submission that the insurer has correctly applied cl 2 of Schedule 1 in classifying the claimant as an earner.
It would appear that on the basis of the insurer’s classification of the claimant as an earner under cl 2(b)(i) the insurer has “carried over” their conclusion in this regard to the application of cl 4 of Schedule 1. I do not agree with this approach. Once the claimant is considered an “earner” under cl 2 of Schedule 1, the calculation of PAWE is a separate step, or a “fresh” step, under cl 4 of Schedule 1.
In any event, for the reasons set out below, I find that the claimant is an “earner” under cl2((b)(i) on the basis that at the time of the accident he had entered into an arrangement with an employer to undertake employment. In my view, this is the correct clause particularly when it appears the claimant had not worked a total of 13 weeks in the 12 month period preceding the accident.
On the basis of the claimant being considered an earner by the insurer under cl 2 (a)(ii) the insurer appears to have applied cl 4 (1). In this regard, the insurer has taken the earnings from ACAR Company Pty Ltd over the 12 months prior to the accident.
On the basis of the payslips of ACAR for the period 3 December 2018 to 3 March 2019, the insurer calculates a total earnings of $9,243 for the 12 months prior to the accident, which translates to gross weekly amount (PAWE) of $177.75.
The claimant, however, submits that cl 4 (2)(c) of Schedule 1 should be applied in calculating PAWE.
The claimant submits that the PAWE should be the average of likely earnings with Emerald Grain over the agreement period. It is further submitted that the clause specifically refers to the earnings under the agreement and does not state over a 12 month period. It is submitted that this is appropriate given that otherwise it would call for speculation about the future.
On the basis of payslips from previous harvest employment with Emerald Grain, the claimant submits that a rate of $28.25 per hour should be applied for the first 40 hours of work in a week, and thereafter at time and a half ($42.37).
With reference to the email of Sandy Newman, the claimant calculates 8.57 weeks between 21 October 2019 and 20 December 2019 with earnings calculated as follows:
· 40 hours (ordinary time), 8.57 weeks x 40 hours x $28.25 per week = $9,684.10, and
· 20 hours (overtime) x 8.57 weeks x 20 hours x $42.37 = $726.18.
The claimant submits therefore that likely earnings over 8.57 weeks was $16,946, translating to a PAWE of $1,977.36.

FINDINGS

As noted above, the insurer seems to suggest that because they have determined the claimant to be an earner under cl 2 (b)(i), the calculation of PAWE is to be made on the basis of past earnings.
The claimant submits that the PAWE should be calculated on the basis of expected earnings with Emerald Green. The insurer disagrees and submits that there was no agreement in place as required by Schedule 1, and the email from Sandy Newman dated

29 November 2022 is not sufficient evidence to come to a determination that the claimant had entered an agreement, as there is no evidence that Sandy Neman had the authority to offer employment.
In addition, it is noted that the contract provided is dated 18 September 2019 and therefore is dated after the accident. It is further submitted that there is no evidence that the claimant entered any contract or agreement “before the motor accident’ or that he had, prior to the subject accident ‘entered into an arrangement (whether or not an enforceable contract)’ to work for Emerald Grain.
I disagree with this submission. I am satisfied on the basis of the claimant’s statement that Sandy Newman was authorised to arrange employment for the Harvest, noting that arrangements are said to have been made through her on previous harvest years.
I accept the claimant’s evidence that he had a conversation with Sandy in May 2019 in respect of the upcoming harvest wherein he was told that he could obtain work at that time and that he would be contacted. I also accept that the claimant received communication from Sandy shortly after the accident about commencing work.
This evidence is entirely consistent with the claimant’s work at harvest time with Emerald Grain in prior years in 2016 and 2017 and I note that the drought prevented employment in the 2018 harvest period.
I am sufficiently satisfied that the claimant had entered into an agreement to work the 2019 harvest on the terms set out by Sandy Newman in her email of 29 November 2022. Noting the background of prior work in the years prior, and the various previous arrangements through Sandy Newman, I accept the evidence of Sandy Newman that the claimant “would have been” employed in the 2019 harvest year.
My finding in this regard is made on the basis of the statement of the claimant and the email of Sandy Newman. However, I also reject the insurer’s suggestion that the contract should not be taken into account noting that it post dates the accident. I find that this is merely a formalisation of the arrangement that was already in place. Noting the claimant’s evidence as to the text messages from Sandy Newman after the accident, it is consistent that she would have sent a contract, given that after the date of the contract she requested the claimant attend induction in October.
Accordingly, I consider the relevant subclause of cl 4 of Schedule 1 of the MAI Act to be (c) for the purposes of calculating the PAWE.
The calculation therefore to be applied is: “the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.”
I accept the claimant’s submissions that the wording of the subclause does not require that average weekly earnings be averaged out over a period of 12 months and instead is to be calculated with reference to the arrangement.
With reference to the email of Sandy Newman dated 29 November 2022, I accept the claimant’s calculations as set out above.
I therefore determine that the correct PAWE is $1,977.36.

CONCLUSION

On the basis of the above:
(a) the reviewable decision is set aside, and
(b) the claimant’s PAWE is $1,977.36.

[2023] NSWPICMR 60

11 December 2023