Tindal v QBE Insurance (Australia) Limited

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
Citation:	Tindal v QBE Insurance (Australia) Limited [2023] NSWPICMR 21
ClaimanT:	Avinsh Tindal
Insurer:	QBE Insurance (Australia) Limited
Merit Reviewer:	Ray Plibersek
DATE OF DECISION:	3 April 2023
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; merit review; pre accident weekly earnings (PAWE); claimant operated business as a Uber driver; claimant and insurer made different estimates of vehicle income and expenses; disagreement over the interpretation of the data, financial and business records; claimant worked as an Uber driver for 39 weeks out of 52 weeks; revised decision; documents missing not initially considered by decision maker; insurer application alleging jurisdictional error; decision reviewed under Minister for Immigration and Multicultural Affairs v Bhardwaj; late documents admitted and considered in revised decision; Held- claimant’s PAWE calculated based on the late second forensic accounting report; claimant did not work due to interruption from COVID -19; despite claimant only working as an Uber driver for 39 weeks out of 52 weeks his PAWE must be calculated over whole 52 week period; unfair result inconsistent with workers compensation legislation; remitted to the Insurer for reconsideration and recalculation of the claimant’s PAWE; COVID-19 disaster payments are excluded from calculation of PAWE; claimant to repay excess weekly benefits; sub-section 3.20(3); legal costs; a merit review dispute under Division 3.3 about weekly payments of statutory benefits is not “regulated merit review matter”; legal costs under section 8.10(1) not available; no exceptional circumstances; legal costs $NIL; Alliance Insurance Australia Limited v Shahmiri, Mackary v Allianz Australia Insurance Limited at [22]-[24] and Conde v Insurance Australia Limited t/as NRMA Insurance followed and applied.
Determinations made:	Revised Certificate Issued under s 7.13(4) of the Motor Accident Injuries Act2017 Revised Certificate of Determination The certificate of this review determination is as follows: 1. The reviewable decision dated 20 September 2022 is set aside. 2. The claimant’s pre-accident weekly earnings are determined under sub-cl 4 (1) of Schedule 1 of the Motor Accident Injuries Act 2017 (the MAI Act) to be $417.76 per week. 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. 4. When the insurer makes its reconsideration or recalculation of the weekly payments of statutory benefits made to the claimant, I direct that any overpayments should be adjusted in accordance with these reasons and sub-s 3.20 of the MAI Act. 5. The amount of legal costs awarded in this case is $NIL.

REVISED REASONS FOR DECISION

BACKGROUND

On 3 June 2022 Avinash Tindal, (the claimant) was injured in a collision when his vehicle was hit on the rear driver’s side door by another car who had driven through a red light at the intersection of Ross Smith Avenue and George Drive, Mascot.
The claimant reported injuries included, neck, back, shoulder and arm, (A 1).
In the period before the accident the claimant was self-employed as an Uber driver and also a Didi driver.
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 19 July 2022 the insurer issued a pre-accident weekly earnings (PAWE) Determination Notice which calculated the claimant’s PAWE to be $558.61 (R2). The insurer’s determination was based on business and tax documentation provided by the claimant to the insurer and as advised in a report by PKF Forensic Accountants, (R 5).
On 19 July 2022 the claimant applied for an internal review of that decision.
On 27 July 2022 the insurer issued their internal review Certificate of Determination which affirmed the original decision that the claimant’s PAWE was $558.61 (R 2). The internal review reasons set out the insurer’s calculations of the claimant’s PAWE.
The claimant disputes the way the insurer has calculated his PAWE. In his application dated 8 August 2022 the claimant’s solicitors wrote that:
“The amount calculated by the insurer is incorrect…… The amount to be reviewed and corrected.”
The claimant seeks a merit review of the insurer’s internal review determination dated
27 July 2022.
On 2 November 2022 I issued a Certificate and Reasons determining the merit review.
By a decision dated 16 March 2023 the President’s delegate noted that on 9 March 2023, a review and investigation into the matter indicates that the additional documents lodged by QBE Insurance on 26 September 2022 were not successfully shared with Member Plibersek, as a result of issues with the Personal Injury Commission’s (Commission) electronic case management system.
The President’s delegate decided, in accordance with s 7.15 of the MAI Act, to dismiss the insurer’s application to refer the merit review decision dated 2 November 2022 for review by a review panel.
The President’s delegate referred this matter back to me to consider re-visiting the decision dated 2 November 2022, in accordance with the jurisdictional error claimed by QBE Insurance and the principles enunciated in Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (Bhardwaj).
In an email dated 20 September 2022 the insurer wrote to the claimant’s solicitors indicating that it had recalculated the claimant’s PAWE to be $417.76. The email advised that all of the documents recently provided by the claimant to PKF Forensic Accountants indicated that the claimant’s 52 week salary is $53,440 less total expenses of $31,717 giving a net figure of $21,724 divided by 52 weeks which gives a weekly rate of $417.76. The insurer advised this decision would take effect on 18 October 2022.
In accordance with the decision of the President’s delegate and the decision in Bhardwaj I have decided to consider the additional documents filed by the insurer and the claimant and then revise my original certificate, reasons and decision.
My reconsideration and reasons are set out below.

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.
In addition to the documents and submissions considered in the original decision I have now considered the following additional documents which have become available after the original decision was made on 2 November 2022. These documents include: A1-Tindal - 2022.12.01 - insurers Application; AD2-Tindal - 2022.09.26 - Application to Admit Late Documents – including PAWE report and R1-claimant's submissions to the Commission in response to insurer's Application for Review Panel dated 22 December 2022.
I also note that on 24 March 2023 I requested that a message be sent in the Commission’s portal requesting a further one page submission from the parties about whether or not I should consider awarding legal costs for exceptional circumstances. Both parties filed submissions dated 29 March 2023 restating some submissions about PAWE. The claimant’s solicitor filed a one page submission about the calculation of PAWE. The insurer’s solicitor also filed a one page submission about the calculation of PAWE and attached another copy of the second PKF Forensic Accountants report dated 7 September 2022 which totalled 192 pages. Neither party made submissions about the exceptional circumstances legal costs issue which is the issue for which I requested submissions. I have also taken these further submissions into consideration when determining these reasons.
The insurer made an application to admit late documents dated 26 September 2022. This application was only brought to my attention after 2 November 2022 after I had issued my initial certificate and reasons for the merit review. In this application the insurer lists three documents totalling 196 pages which includes a second report from PKF Forensic Accountants, numerous taxation and banking records supplied by the claimant and finally a further PAWE decision by the insurer dated 20 September 2022. I note that the claimant solicitors do not consent to the inclusion of late documents. The claimant’s solicitors set out in detail in their submissions dated 22 December 2022 why they oppose the admission of these late documents. I’ve set out these objections and detail later in these reasons. Having considered all the submissions from the insurer and the claimant I’ve decided that in the interests of justice I will admit the late documents. If not for a computer system error the documents would have been brought to my attention prior to the initial certificate and determination I made dated 2 November 2022. The parties should not be prejudiced or disadvantaged through no fault of their own by the failure of the Commission’s computer system.

SUBMISSIONS

The claimant submits in his submissions dated 1 August 2022, (A 1), that the issue in dispute is the calculation of the claimant’s PAWE.
The claimant relies on his income and expense summary, collated with reference to the claimant’s bank statements. His submission is that the insurer has overestimated his work expenses and that his PAWE exceeds the sum of $558.61.
For the 39 week period considered by the insurer in the period 3 June 2021 to 2 June 2022, the claimant says he was required to pay an average sum of $20,476.05 excluding GST for work-related expense, as outlined below:
·        telephone at a cost of $1,049.64 excluding GST;
·        fuel at a cost of $6,844.40 excluding GST;
·        tolls at a cost of $5,498.56 excluding GST, and
·        car hire at a cost of $7,084.09 excluding GST.
The claimant submits that after deducting his work related expenses, his total income for the 39 week period considered by the insurer between 3 June 2021 to 2 June 2022 is $29,156.95.
In light of the above, the claimant submits that his PAWE is $747.61 per week.
In its submissions in Reply dated 26 August 2022, (AD 1), the insurer submits that:
(a)   The report of PKF Forensic Accountants dated 14 July 2022 (R5) should be accepted and the claimant’s PAWE amount should be assessed at $558.61.
(b) The claimant is an earner for the purposes of Schedule 1, s 2(a) of the MAI Act as he was working continuously for the 12 months immediately preceding the motor accident.
(c)   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.
(d)   The claimant’s total income for the calculation period amounted to $49,634 and total expenses equalled $27,848.
(e)   Earnings from self-employment totalled $21,786 and was calculated based on the difference between total income and total expenditure.
(f)    PAWE was calculated by dividing $21,786 by 39 weeks, which equals $558.61.
(g)   The claimant does not dispute the calculation of his income prior to the deduction of his expenses as calculated by QBE/PKF. What is in dispute is the calculation of his business expenses.
(h)   The insurer also notes the decision of her Honour Harrison AsJ in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 and its application to the calculation of PAWE.
(i)    The calculation of work related expenses, the following methodology was applied by PKF in their report:
(i) fuel and tolls were considered a variable expense, with increases/decreases according to increases/decreases in revenue. The estimate was based on the ratio of these costs (full year) as advised to the total revenue generated in the 52 weeks prior to the date of the accident;
(ii)telephone expenses were regarded as a fixed expense, with costs estimated based on the expense provided by the claimant on a pro-rata basis for the number of days in the assessment periods, and
(iii)the car rental expense was based on the costs advised by the claimant in relation to the four hire cars that he used over the relevant periods.
(j)    The insurer acknowledges the lack of clarity in the Forensic Accounting report pertaining to the calculation of the car rental expenses. The underlying assumptions in the report should be provided by the relevant expert.
(k)   The insurer denies the claimant’s assertion that his work expenses were overstated in the calculation of PAWE, with it being appropriate and necessary for the telephone and car rental expenses to be calculated over a pro-rata basis for the relevant periods.
(l)    In light of the calculation methods which are required to be followed, it is submitted that the correct figure for PAWE is $558.61 for the purposes of the Motor Accident Injuries Act 2017 (the MAI Act).
I interpolate noting that in the first PKF report and the insurer submissions referred to above, they both based their calculations on 39 weeks. The insurer submissions also referred to the decision of her Honour Harrison AsJ in Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481 (Shahmiri). These insurer submissions are at odds with the decision in Shahmiri which decided in that case that the claimant’s PAWE should have been calculated by taking his earnings over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 (and not over the 29 weeks when he worked) reflecting the number of weeks during the whole 12-month period.
In its further submissions dated 1 December 2022, (A 1), the insurer submits that:
(a)   these further submissions from the insurer’s solicitor are expressed to be an application for a panel review of the merit review decision;
(b)   the submissions refer to the previous review decision dated 2 November 2022;
(c)   the grounds for review are that there was a failure to determine and communicate insurer’s application to admit late documents, the review alleges there was a failure to take into consideration the forensics accounting report dated
7 September 2022 and the insurer’s updated decision dated 20 September 2022, it’s also alleged the Member failed to properly identify the essence of the dispute between the parties;
(d)   the Member’s failure to take into account the relevant consideration of the updated PKF Forensic Accountants report amounts to a jurisdictional error;
(e)   the Member’s failure to take into account the relevant consideration of the insurer’s updated PAWE decision again amounts to a likely jurisdictional error;
(f)    the Member erroneously formed the conclusion that there is broad agreement between the parties when the claimant’s total income for the relevant period;
(g)   the Member failed to reconcile the clearly differing positions of the parties in terms of the calculation of average income per week, and
(h)   the Member failed to take into consideration the updated forensic accounting report dated 7 September 2022 and the insurer’s updated decision dated
20 September 2022.
The claimant’s solicitors made further submissions dated 22 December 2022 (R 1) in response to the insurer’s application for a merit review. The submissions include the following:
(a)   the claimant opposes the insurer’s Application for Review Panel of a Merit Review Decision of Member Plibersek dated 2 November 2022;
(b)   the insurer’s initial decision dated 19 July 2022 calculated the claimant’s PAWE as $558.61 which was confirmed on the insurer’s internal review;
(c)   on 27 September 2022 the insurer made an application to admit late documents which was opposed by the claimant;
(d)   in a certificate dated 2 November 2022 Member Plibersek determined that the insurer should recalculate the claimant’s PAWE based on the figure of $653.13 making a finding that an appropriate figure for expenses to be approximately mid-way between the figures given by both parties;
(e)   the insurer’s review application should be dismissed because they do not demonstrate error in the original decision of the Member;
(f) sections 3 and 42 of the Personal Injury Commission Act 2020 emphasises the need for quick cost-effective and just decision-making;
(g)   the insurers reply, application to admit late documents and application for merit review total approximately 600 pages of material and submissions;
(h)   the insurer’s reasons for the lateness of the document, pursuant to cl 28 of Procedural Direction PIC 3, were not in the interests of justice, nor provided adequate reasons for the delay in lodging the documents, would prejudice the claimant and would affect the timely resolution of the dispute noting the claimant’s continuing financial stress;
(i)    the information in the first accountant’s report dated 14 July 2022 and the updated report dated 7 September 2022 is identical i.e. there was no new information and it was basically a recalculation of PAWE by the insurer and it’s accountants;
(j)    the insurer’s “revised” PAWE figure of $417.76, is based on the second report was not relevant to the dispute and the reviewable decision that was the subject the merit review;
(k)   the insurer complains that the failure to consider the updated insurer’s accountant’s report has resulted in a clear misrepresentation by the Member of the insurer’s position pertaining to the calculation of PAWE;
(l)    the reviewable decision for the Member was the insurer’s decision dated
19 July 2022 and affirmed by a Certificate of Determination, decided that the correct PAWE amount was $558.61;
(m)     the claimant would be prejudiced as the insurer would have the benefit of two accountant’s reports and the claimant none;
(n)   the essential difference is that the calculations are based over a 52 week period whereas it is submitted it should be calculated over a period of 39 weeks. If the figures provided by the insurer are divided by 39 weeks rather than 52 weeks, then this gives a PAWE of $557.03;
(o)   the claimant instructs that he was not working the full 52 weeks prior to the accident due to COVID-19 lockdowns;
(p)   it was not appropriate for the insurer to seek to substitute a further reviewable decision when a decision was currently under merit review by the Member;
(q)   the Member considered both the PAWE of the claimant together with expenses;
(r)    at paragraph 4.17 of the insurer’s original submissions dated 26 August 2022 states that what is in dispute between the claimant and the insurer is not the calculation of his income prior to the deduction of expenses. What is in dispute is the calculation of the claimant’s business expenses;
(s)   the real issue in dispute between the parties was correctly identified by the Member as being the calculation of the claimant’s expenses;
(t)    the claimant is experiencing dire financial consequences as a result of the accident;
(u)   the insurer has failed to establish that there is any reason to suspect that the decision of Member Plibersek is incorrect in any material respect, and
(v)   the insurer’s application should be dismissed.

The insurer’s solicitors made further submissions dated 29 March 2023 (AD 4). The submissions include the following:
(a)   the insurer relies on the revised report of PKF Forensic Accountants dated
7 September 2022 [R2], and submits that the claimant’s PAWE amount should be assessed at $417.76;
(b)   the insurer seeks to rely upon the revised PKF Forensic Accountants report as opposed to the original report dated 14 July 2022, which incorrectly calculated PAWE over 39 weeks instead of 52 weeks;
(c) the claimant is an earner within the ambit of sch 1 cl (2)(a) of the MAI Act as he was working continuously for the 12 months immediately preceding the subject accident;
(d)   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 or from rendering services. As such, these payments should be excluded from the calculation of PAWE as per Merit Reviewer Ruschen in Mackary v Allianz Australia Insurance Limited [2022] NSWPICMR 35 at [22]-[24], and
(e) the claimant’s PAWE should be calculated in accordance with Schedule 1, cl 4(1) of the Act being the weekly average of the gross earnings received by the claimant as an earner during the 12 months immediately prior to the day on which the subject accident occurred. Notably, the exceptions provided under Schedule 1, cl 4(2) of the Act are not applicable to the claimant’s circumstances and therefore his PAWE should be calculated over a 52 week period as opposed to 39 weeks. The total number of weeks from 3 June 2021 to 3 June 2022, which forms the basis for the calculation of PAWE, should not be reduced to accommodate an interruption to earnings due to the COVID-19 lockdown. The insurer relies upon the reasoning of Harrison AsJ in the NSW Supreme Court decision of Allianz Australia Limited v Shahmiri [2022] NSWSC481, which was endorsed by Merit Reviewer Ruschen in Mackary at [19]-[20].

The claimant’s solicitors made further submissions dated 29 March 2023 (AD 5). The submissions include the following:
(a)   regarding the insurer’s further submissions dated 29 March 2023, the claimant again objects to the consideration of the report of PKF Forensic Accountants dated 7 September 2022;
(b)   the claimant notes the insurer’s further submissions in relation to COVID-19 disaster payments during the 52-week period prior to the subject accident;
(c)   the insurer submits that the COVID-19 payments should be excluded from the calculation of PAWE;
(d)   the COVID-19 payments were received by the claimant as an earner to compensate him for lack of personal exertion as a result of the government enforced lockdown;
(e)   if the COVID-19 disaster payments are to be excluded from the calculation of PAWE, the relevant period over which PAWE should be calculated is 39 weeks;
(f) the claimant falls under the exceptions provided under Schedule 1, cl 4(2) of the MAI Act and the relevant period over which the PAWE should be calculated should adjusted accordingly, and
(g) clause 4(2)(a) applies.

REASONS

This is a dispute between the claimant and the insurer about the calculation of the claimant’s 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-cl 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 then 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.
(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.”
For the reasons set out below, I am satisfied that in this claimant’s case sub-cl 4 (1) does 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-cl 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.

The effect of COVID-19 payments in the calculation of PAWE

As detailed above both the claimant and insurer’s solicitors initially argued that the claimant’s PAWE should be calculated over a 39 week period because the COVID-19 interruption should not be counted as part of the claimant’s earnings.
The insurer then changed its position. In its fourth attempt to calculate the claimant’s PAWE dated 20 September 2022, the insurer relied upon the second PKF forensic accounting report and argued that the whole 52 week period (including the period when the claimant wasn’t earning due to the COVID-19 shutdown) should be used to calculate the claimant’s PAWE. In its submissions the solicitors for the insurer rely upon the reasoning of Harrison AsJ in the NSW Supreme Court decision of Allianz Australia Limited v Shahmiri [2022] NSWSC481 (Shahmiri) and the decision of Merit Reviewer Ruschen in Mackary v Allianz Australia Insurance Limited [2022] NSWPICMR 35 at [22]-[24] (Mackary).
On the other hand, the claimant submits that the COVID-19 payments made to him should be by excluded from the calculation of PAWE by the insurer. Alternatively, the claimant’s solicitors argued that the claimant falls under the exceptions provided under Schedule 1,
cl 4(2) of the MAI Act.
The cases referred to by the insurer’s solicitors strongly support the insurer’s argument that, despite the weeks when the claimant wasn’t working due to the COVID-19 lock-down, those weeks are to be included when calculating the claimant’s PAWE over a 52 week period. Both Shahmiri and Mackary and a number of other decisions refer to the apparent injustice, unfairness or inconsistency of how Schedule 1, sub-cls 4(1) and 4 (2) have been interpreted to operate.
The brief facts in the Shahmiri case were that during the 12 months before the day of the accident (on 24 October 2020), the claimant was employed from 23 October 2019 to
10 May 2020 (29 weeks) and was then unemployed from 11 May 2020 to 23 October 2020. Mr Shahmiri argued that his earning period for the purposes of calculating his PAWE should only be calculated over the 29 week period where he was employed.
I note in passing that this interrupted employment period is similar to that experienced by the claimant Mr Tindal in this case (29 weeks compared to 39 weeks).
Her Honour Harrison AsJ said in Shahmiri at [69]-[71], that:
“69    …….the Workers Compensation Act 1987 (NSW) (‘1987 Act’) had a similar provision to that in Sch 1 cl 4 of the MAIA, but was amended to achieve the result that the majority of the Merits Review Panel here wished to achieve, and one must infer that the failure to similarly amend the MAIA is deliberate. The Workers Compensation Amendment (COVID-19 Weekly Payment Compensation) Regulation 2020 (NSW) inserted a new cl 8EA into Sch 3 cl 2(3)(a) of 1987 Act, which allows for adjustment of the relevant earning period where there had been a change to the worker’s employment arrangements as a direct result of the impact of the COVID-19 pandemic.
70     Curiously, though the dissenting member’s decision was circulated amongst the other members of the Merits Review Panel there is no reference to this point in the majority decision. It may be that the other members were attempting to cure what appears to be an unfairness on the face of the legislation. Here we have an injured party who only worked for a 29-week period over the 12 months previous to the accident due to the effects of COVID-19, and who may have worked the whole 52-week period had it not been for COVID-19, but by application of the statute may have those 29 weeks of earnings averaged across the whole
12-month period to arrive at a determination of his ‘pre-accident weekly earnings’. This ostensibly produces an unfairness. However, one cannot construe an act to accommodate a particular circumstance, no matter how unfair that circumstance may be.
71     In accordance with my above reasoning, I accept the insurer’s submission that the Merits Review Panel has made an error in their calculation of the first defendant’s pre-accident weekly earnings. The first defendant’s pre-accident weekly earnings should have been calculated by taking his earnings over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 reflecting the number of weeks during the whole 12-month period.”
I also note the decision of Conde v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPICMR 28 (Conde). That review decided that COVID-19 disaster payments received during the relevant period are excluded from PAWE. In Conde, Merit Reviewer Ruschen commented about the decision in Shahmiri that:
“Whilst Mr Shahmiri’s PAWE calculation fell under clause 4(1) and I have concluded the claimant’s falls under clause 4(2)(b), the language of clauses 4(1) and 4(2)(b) in so far as is relevant in the Shahmiri appeal is the same. The findings of Harrison AsJ turn on the wording in clause 4(1) that PAWE is to be calculated based on the ‘weekly average of the gross earnings received by the earner as an earner during’ the relevant period, which is the same wording in clause 4(2)(b).
It follows from the use of the language, ‘gross earnings received by the earner as an earner during …’ in both clause 4(1) and 4(2)(b) and the reasons in the Shahmiri appeal that the decision of Harrison AsJ also applies to clause 4(2)(b).
[T]he claimant achieves earner status for the purpose of the MAI Act by reason of being in receipt of earnings from employment or self-employment as per the definition of earner in Schedule 1, clause 2. Pursuant to clauses 4(3) and 4(2)(b) only earnings received by the claimant ‘as an earner’ can be included in calculation of PAWE.
The claimant did not receive Centrelink COVID-19 disaster payments ‘as an earner’. She did not perform any work for those payments. The claimant is not in a relationship of employee and employer with Centrelink and did not render services to Centrelink. Accordingly, the claimant did not receive the payments in the capacity of employee or for any services rendered.
Accordingly, COVID-19 disaster payments are not earnings received by the claimant as an earner and are therefore excluded from PAWE.”
Based on the Supreme Court decision in Shahmiri, I find that in this claimant’s case there cannot be an adjustment of the relevant earning period where there had been a change to the claimant’s employment arrangements as a direct result of the impact of the COVID-19 pandemic. Based on the review decision in Conde, I also find that COVID-19 payments are not earnings received by the claimant in this case as an earner and are therefore excluded from the calculation of his PAWE.
The review of the above cases shows that the law as interpreted by the NSW Supreme Court requires that PAWE of the claimant should be calculated by taking his earnings over the whole of the 12-month period immediately before the day of the accident and dividing it by 52 to reflect the number of weeks during the whole 12-month period.

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 the parties now dispute the calculation of the claimant’s income, expenses and the number of weeks to be included when calculating the claimant’s PAWE.
In the written submissions the claimant says he was required to pay an average sum of $20,476.05 for expenses while the insurer calculates his total expenses were $27,848.
I have collated the parties’ figures based on their submissions and reports in the following table:

Item

Claimant’s submissions

First PKF report

14 July 2022

Second PKF report

7 September 2022

Total income

$49,633

$49,634

$53,440

Total expenditure or expenses

$20,476.05

$27,848

$31,717

Total income or earnings

$29,156.95

$21,786

$21,724

Weeks calculated

39 weeks

39 weeks

52 weeks

PAWE

$747.61

$558.61

$417.76

I note that in the first PKF Forensic Accountants report dated 14 July 2022 (R5), the report states, at page 15, that the calculation of the claimant’s expenses were based on the summary that was provided by the claimant. PKF write in their report that the calculation of expenses for fuels and tolls and also for telephone expenses was an estimate.
I also note that in Annexure 1 of the first PKF Forensic Accountants report dated
14 July 2022 the calculation of income and expenses are made over three periods. The first period is from 3 June to 26 July 2021 (54 days). The second period is from 27 July to
28 October 2021 (94 days) which shows nil income and nil expenses with a notation saying COVID-19 affected. The third period is from 29 October 2021 to 3 June 2022 (218 days).
Significantly, Annexure 1 of the first PKF Forensic Accountants report dated 14 July 2022 makes it clear that the weeks used to calculate the PAWE period is 39 weeks.
Page 15 of the report details how they made their calculation:
“The Claimant has provided a summary of his expenses incurred in the period 3 June 2021 to 3 June 2022. We have based our assessment of the expenses on the summary provided as follows:
1. Fuel & Tolls are considered variable expenses increasing / decreasing with
increases/decreases in revenue. We have estimated these costs on based on the ratio of
these costs (full year) as advised to the total revenue derived in the 52 weeks prior to the
DOA;
2. Telephone expenses are considered a fixed expense, and we have estimated these costs based on the expense provided by the Claimant pro-rated for the number of days in the assessment periods;
3. The Claimant has advised he rented the following vehicles over the pre accident period which we have adjusted for:
a. 23rd March 2021 to 8th June 2021 - Lexus NX300H 2016 @ $420 per week
b. 2 July 2021 to 22 October 2021 - Toyota Camry 2015 @180 per week
c. 22 October 2021 to 3rd February 2022 - Toyota Camry 2019 @ $260 per week
d. 3rd February 2022 to 9th May 2022 - Toyota Camry 2019 @ $300 per week
e. 10th May 2022 to 3rd June 2022 - Lexus ES300H 2019 @ $500 per week.”
The second PKF Forensic Accountants report dated 20 September 2022 (AD 2) states that PKF have been requested by the insurer to amend their assessment of PAWE to take into account the 52 weeks prior to the claimant’s date of accident. The general background of the PKF review states that the claimant was a self-employed Uber driver for 52 weeks prior to the accident and also a self-employed Didi driver. The report notes that the claimant was in receipt of COVID-19 disaster payments from 27 July to 28 October 2021 and again in February 2022 to March 2022. The report notes that COVID-19 disaster payments are excluded from an assessment of PAWE as they are not income from the claimant’s exertion.
The second PKF report notes that it has had regard to cl 4(1) of Schedule 1 of the MAI Act. The second PKF report states that it has not identified that any of sub-cl 2 or 3 applies in the claimant’s case. The report notes that the claimant did not commence self-employment at a date later than 12 months prior to the accident as he was self-employed at 14 June 2021. The report says the claimant received earnings in the period 52 weeks prior to the accident. Nor was there any evidence that the claimant took action under which he might regularly earn more than on a weekly basis prior to that action. Accordingly the second PKF report says they have assessed the claimant’s PAWE over the 52 weeks prior to the accident.
The second PKF report writes that they have calculated the claimant’s income based upon the statements from Uber and the claimant’s bank statements showing Uber deposits. The report notes that the periods used to consider the claimant’s PAWE was from 3 June to
26 July 2021 and 29 October 2021 to 3 June 2022. I note these are the same dates as the first and third periods referred to in the PKF report.

The second PKF report also writes that they have calculated the claimant’s income based upon the statements from Didi and the claimant’s bank statements showing Didi deposits.
The second PKF report states that based upon the summary of expenses in the period
3 June 2021 to 3 June 2022 and the analysis set out in Annexure 1 the claimant’s PAWE is calculated at $417.76.
I note that in Annexure 1 of the second PKF Forensic Accountants report dated
7 September 2022 the calculation of income and expenses are made over one period of 52 weeks. This is a significantly different methodology from the first PKF report which calculated the claimant’s income and expenses over three periods including the second period where there are no income and expenses shown because there is a note that period was COVID-19 affected.
Comparing the calculations in Annexure 1 in the first PKF report to Annexure 1 in the second PKF report the two annexures differ in a number of ways. First, the two annexures differ in the periods of income and expenses. In the first PKF report the period used is 39 weeks compared to 52 weeks used in the second report. The total income, expenses and earnings calculated in Annexure 1 in the first PKF report are lower than the total income, expenses and earnings calculated in Annexure 1 in the second PKF report.
In their further submissions dated 22 December 2022 the claimant solicitors refer to the second PKF Forensic Accountants report dated 20 September 2022 calculated the claimant’s PAWE as $417.76. The claimant submits that it was not appropriate for the insurer to seek to substitute a further reviewable decision when a decision was currently under merit review by the Member.
Having carefully reviewed and considered the above two PKF reports, the bank statements, source material and all the initial and then later review submissions I make the following findings.
Initially there was broad agreement between the parties on the claimant’s total income for the relevant period: for the claimant it is $49,633 and for the insurer $49,634. Initially, as can be seen from the above table, the key point of disagreement between the parties was the dispute over the amount of expenses. This is referred to in both the claimant’s letter review submissions and the insurer’s earlier submissions.[1] The difficulty is that the expenses are based on records and estimates provided by the claimant. It appears that the claimant and the PKF report have relied on the same primary data and estimates and come to different conclusions. Given the hundreds of expenses listed in the financial documentation it would be difficult to come to a consensus view on the exact amount of expenses.
[1] See paragraph 4.17 of the insurer’s original submissions dated 26 August 2022 (R1) and paragraph 8.4 on page 5 of the claimant's solicitors further submissions dated 22 December 2022 (R 1).
It is also clear from the two PKF reports that the calculation of total income, expenses and earnings are different in both reports. The claimant’s calculations for the claimant’s income is similar to that of the first PKF report, however the expenses calculated by the claimant’s submissions differ from those in both of the PKF reports and the various insurer’s decisions and reviews.

In my original certificate and reasons dated 2 November 2022 I noted that the disagreement over the interpretation of the data and financial documentation before me, and the acknowledgement by the parties that their determination of expenses is based on estimates. In my previous decision I had decided that the best way to calculate the expenses is to take the two figures estimated by both parties and make a finding that an appropriate figure for expenses to be approximately mid-way between the figures given by both parties.
I also previously noted in the first certificate and reasons dated 2 November 2022 that the claimant calculates his expenses as $20,476.05 and the insurer calculates his total expenses as $27,848. The approximate mid-way point between the two figures for expenses is: $24,162.03. Thus I had previously calculated the claimant’s PAWE as follows: total income of $49,634 less total average expenses of $24,162.03 = $25,471.97 net income. I had previously concluded that the PAWE is total net income of $25,471.97 divided by 39 weeks = $653.13.
Having reviewed my previous decision, all the previous evidence and now the subsequent second PKF report and the multiple further submissions from the claimant and insurer I have reached a different conclusion.
In my previous decision I found that the claimant’s PAWE be calculated under sub-cl 4 (1) and sub-cl 4 (2) does not apply because he had been earning continuously for over 12 months in his own driving business. This previous position now accords with the second PKF report and the further decision of the insurer set out in its email dated 20 September 2022 where the claimant’s PAWE was calculated over a 52 week period.
Having reviewed again all the bank statements, statements from Uber and Didi and all of the submissions and the two PKF reports and also the decisions of Shahmiri, Mackary and Conde I have concluded that the claimant was earning over a continuous 12 month period therefore sub-cl 4 (1) does apply. In their submissions the claimant’s solicitors state that the claimant only worked for 39 weeks prior to his accident. This 39 week figure was initially accepted by both the insurer and in the first PKF report as I referred to in detail above. The second PKF report notes that the periods used to consider the claimant’s PAWE was from
3 June to 26 July 2021 and 29 October 2021 to 3 June 2022 (which are the same dates as the first and third periods referred to in the PKF report). The second PKF report also notes that the claimant received Centrelink payments for COVID-19 disaster payments from
27 July to 28 October 2021 and again in February 2022 to March 2022. The second report notes that COVID-19 disaster payments are excluded from an assessment of PAWE as they are not income.
In their submissions dated 29 March 2023 the insurer solicitors have now emphasised that the claimant’s PAWE should be calculated over 52 weeks and not 39 weeks. The insurer’s solicitors have now for the first time explicitly resiled from insurers earlier decisions and the first PKF forensic accounting report.
Based upon the evidence of the payments received by the claimant and also the submissions made by both parties it is clear that there was a period of time where the claimant was not working due to COVID-19. Despite the COVID-19 interruption to his earning income, the claimant is still treated by the law as if he earnt continuously over the 12 month period immediately before his motor accident. Accordingly, in the circumstances of this claimant’s case, sub-cl 4 (1) does apply because he taken to have been earning continuously for over 12 months in his own driving business. The claimant’s PAWE must be calculated under sub-cl 4 (1).
When calculating the claimant’s PAWE I have decided to use as my starting point the total income, expenses and earnings calculated in Annexure 1 in the second PKF report. I have decided to use the data and calculations from the second report because its analysis of the income expenses and taxation data appears to be the most detailed and based upon the most up-to-date and available taxation, financial records and data. The fourth insurer PAWE decision and the conclusion of the second PKF report that the claimant earned continuously during the 12 months immediately before the day of the accident and his PAWE was to be calculated over a 52 week period under sub-cl 4 (1) is the legally correct decision based on the cases I have referred to above.
Initially the claimant, insurer and the first PKF report all agreed that the claimant’s gross income was earned over a 39 week period because there were periods of time where he was unable to work and did not earn income due to the COVID-19 pandemic. It was only in the second PKF report and the latest insurer’s decision dated 20 September 2022 that used the 52 week figure to calculate the claimant’s PAWE. Despite the apparent unfairness and inconsistency with the workers compensation legislation, I am bound by legal precedent to accept that the appropriate period to calculate the claimant’s PAWE is 52 weeks although he did not work over that entire period. There was a period of some weeks where he was unable to work as a self-employed driver due to the COVID-19 outbreak. I am legally required to determine his PAWE and calculate his income and expenses during the 52 week period despite the claimant being unable to work for all of that period.
Thus I calculate the claimant’s PAWE based upon the data in the second PKF report as follows: total income of $53,440 less total average expenses of $31,717 = $21,724 net income. Then the PAWE is total net income of $21,724 divided by 52 weeks = $417.76.
I find that the insurer should recalculate and pay the claimant’s PAWE and statutory benefits based on the figure of $417.76.
I note the insurer’s solicitors most recent submission that I direct any overpayment to the claimant be repaid. In my certificate I have determined that any overpayments should be adjusted in accordance with sub-s 3.20 of the MAI Act.
There is currently no evidence or submissions before me as to the claimant’s current work status or the alleged amount of overpayment. This makes it difficult to give directions for any possible repayment by the claimant to the insurer of any alleged overpayment of statutory benefits. If the insurer seeks to re-claim any alleged overpayment of statutory benefits it should closely follow the statutory scheme is set out in subsection 3.20 of the MAI Act. In accordance with subsection 3.20 ,if the claimant is still being paid weekly payments of statutory benefits, any amounts sought to be recovered by the insurer should be a small amount that should try and minimise any adverse impact upon the claimant’s weekly income. Alternatively, if the claimant has returned to or commenced paid employment or self-employment, the parties should attempt to reach an agreement for the refund of any overpayment of statutory benefits under sub-clause of 3.20 (7) (b) of the MAI Act.

LEGAL COSTS

In their written submissions, (A 1), the claimant’s solicitors make an application for the maximum amount of regulated costs allowable by the Motor Accident Injuries Regulations 2017, (the Regulation).
In its further submissions the claimant's solicitors further submissions dated
22 December 2022 (R 1) the claimant seeks an order for costs as per scale.
For the following reasons, regulated legal costs are not available to the claimant in this case.
Section 8.3 of the MAI Act provides for the fixing of maximum costs recoverable by Australian legal practitioners. Sub-section 8.10(1) provides that a claimant for statutory benefits is (subject to that section) entitled to recover from the insurer ‘reasonable and necessary’ costs in connection with the claim. This is qualified by sub-ss (3) and (4) which provide that the recovery of costs is allowed if payment is permitted by the Regulations or the Commission, if satisfied that the claimant is under a legal disability or exceptional circumstances exist.
Under Schedule 2, Part 1, sub-cl 1 (a) of the MAI Act the matter in dispute is declared to be a merit review matter for the purposes of Part 7 of the MAI Act.
Under Schedule 1, Part 1, cl 1 (1) of the Regulation, the maximum costs for legal services provided to a claimant or an insurer in connection with a merit review under Division 7.4 of the Act involving a dispute about a regulated merit review matter are 16 monetary units (to a maximum of 60 monetary units per claim).
The definition of the term “regulated merit review matter” does not include a merit review dispute under Division 3.3 about weekly payments of statutory benefits to injured persons.
As this dispute is under Division 3.3 it is not a “regulated merit review matter”. Accordingly, I have no power to award legal costs unless I am satisfied that the claimant is under a legal disability or exceptional circumstances exist under sub-s 8.10 (4).
As referred to above I requested on 27 March 2023 that both parties supply brief one page written submissions as to whether I should consider awarding legal costs if I find that exceptional circumstances exist. Neither party addressed me on this issue. Instead they provided submissions repeating earlier arguments about the calculation of PAWE.
I had been open to hearing submissions on whether exceptional circumstances exist for the payment of legal costs because of the complex nature of this matter and also the repeated submissions made by the parties.
Unfortunately there were no submissions or evidence from either solicitor claiming that exceptional circumstances exist under sub-s 8.10 (4).
In this case, in the absence of any submissions, I find that no exceptional circumstances exist under sub-s 8.10 (4).
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 $417.76.
The insurer is entitled to reclaim from the claimant any overpayments which should be adjusted in accordance with these reasons and sub-s 3.20 of the MAI Act.
The amount of legal costs awarded in this case is $NIL.

Item	Claimant’s submissions	First PKF report 14 July 2022	Second PKF report 7 September 2022
Total income	$49,633	$49,634	$53,440
Total expenditure or expenses	$20,476.05	$27,848	$31,717
Total income or earnings	$29,156.95	$21,786	$21,724
Weeks calculated	39 weeks	39 weeks	52 weeks
PAWE	$747.61	$558.61	$417.76

[2023] NSWPICMR 21

3 April 2023