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Welcome to the 45th edition of Sparke Helmore’s MAD Weekly.

The Personal Injury Commission (Commission) commenced on 1 March 2021 and, with it, the publication of the majority of decisions issued by the Commission.

To help you navigate the recent decisions of the Motor Accidents Division (MAD) of the Commission, we are publishing weekly the relevant headnotes of published decisions with a link to the decisions on the Australasian Legal Information Institute (AustLII) website. Please see this week’s edition below.

All references to legislation are to the Motor Accident Injuries Act 2017 unless otherwise noted.

Commentary and analysis of trends will be provided on more substantive decisions by our CTP team and will be separately published when necessary.

Merit review decisions

Hayes v GIO [2022] NSWPICMR 17

Merit Reviewer: Katherine Ruschen

MOTOR ACCIDENTS—merit review matter—calculation of Pre-Accident Weekly Earnings (PAWE)—claimant operated a business via a partnership—whether PAWE to be calculated as gross weekly income before expenses or income net of expenses—PAWE to be determined as weekly income net of expenses.

The claimant was working as a self-employed cabinet maker, operating in a partnership, at the time the accident occurred. He claimed weekly benefits and the insurer calculated his PAWE by adopting his gross salary, net of business expenses. The claimant disagreed and disputed the decision before the Commission. The claimant submitted that PAWE should only take into account variable costs of materials and wages incurred by his business but fixed operating costs, should be excluded.

Findings: Consistent with how the ATO defines personal income, and consistent with previous decisions in ABQ v NRMA Insurance [2018] NSWDRS MR 043; ACK v QBE Insurance Australia Limited [2018] NSWDRS MR 063 and AGZ v NRMA Insurance Pty Ltd [2019] NSWDRS MR 184, the Merit Reviewer concluded that the claimant’s business expenses are outgoings and do not form part of the earnings the claimant derived from his work. She also noted that ”as an individual earner, the claimant ultimately receives the net income of the business, after the partnership has accounted for all expenses, including operating costs”.

Using the claimant’s business’ profit and loss statement, which recorded a net business income of $130,599.43, the Merit Reviewer divided that figure by 52 weeks to derive a PAWE figure of $2,504.78.

View decision

Lovett v QBE Insurance (Australia) Limited [2022] NSWPICMR 18

Merit Rreviewer: Ray Plibersek

MOTOR ACCIDENTS—merit review matter—calculation of PAWE—claimant self-employed sole trader at time of accident—whether PAWE to be calculated as gross weekly income before business expenses or weekly income net of expenses—determined PAWE to be calculated as weekly income net of expenses.

The claimant was a mechanic, who operated as a sole trader. After an accident on 10 June 2021, he claimed weekly benefits. Based upon business records the claimant supplied and a forensic accountant’s report, the insurer determined the claimant’s PAWE to be $1,180.95. This PAWE figure constituted the claimant’s gross income, net of expenses, but before tax. The calculation was affirmed on internal review.

The claimant disputed the insurer’s decisions in the Commission. He argued that his PAWE should be calculated with reference to his total income, before expenses and taxes are taken into account. He said that because his expenses continued, notwithstanding the accident and his injuries, it would be unfair and unjust if his PAWE included his expenses, which would leave him worse off.

Another issue that arose was the insurer’s calculation of the quantum of weekly benefits payable in the first entitlement period. The insurer calculated the claimant’s residual earning capacity to be $1,066 per week. They reached that figure by multiplying the hourly rate the claimant invoiced his customers, $66 per hour, by the number of hours he was certified as capable of working.

Findings: The Merit Reviewer determined that the words “gross earnings received by the earner” in clause 4 of Schedule 1 to the Act “should be interpreted to mean earnings less business expenses or deductions”. He noted this was consistent with the approach taken in ABQ v NRMA Insurance [2018] NSWDRS MR 043, in which a self-employed hairdresser’s PAWE was calculated to be her income net of expenses. The Merit Reviewer accordingly affirmed the insurer’s PAWE calculation of $1,180.95.

On the second issue, the Merit Reviewer expressed concern with the inconsistencies in the insurer’s calculation. He noted that whilst the insurer calculated PAWE using the claimant’s income, net of business expenses, it assessed residual capacity as gross income, inclusive of expenses. The Merit Reviewer recommended the insurer adopt the former approach in calculating the residual capacity.

View decision

Claims assessment decisions

Jones v NRMA [2022] NSWPIC 126

Member: Maurice Castagnet

MOTOR ACCIDENTS—claims assessment—whether claimant used best endeavours to attempt to resolve claim pursuant to s 7.32(3) prior to referring the matter to the Commission for damages assessment.

The claimant sustained injury following an accident on 3 August 2018 and lodged a common law claim on 6 April 2020, for which the insurer admitted liability. On 9 October 2020, the claimant requested that the insurer concede he was entitled to non-economic loss. The insurer agreed to do so, and this decision was affirmed on internal review on 18 November 2020. On 15 January 2021, the claimant lodged an application for permanent impairment assessment with the Commission.

On 2 August 2021, a day before the 3-year anniversary of the accident, the claimant lodged an application for damages assessment with the Commission and requested that the matter be referred into the Stood Over List pending finalisation of the permanent impairment dispute. The insurer, noting that the parties had not engaged in settlement discussions, applied to have the claimant’s application dismissed, asserting that the claimant had not used his best endeavours to resolve the claim as required by s 7.32(3) of the Act.

Findings: Having regard to the Act, and relevant case law exploring the meaning of ‘best endeavours’, the Member accepted that notions of ‘reasonableness’ should be applied to considering whether a party has exercised best endeavours within the meaning of s 7.32(3) of the Act. He commented that the claimant had done all he reasonably could have done to progress his claim, and also noted that:

Clause 7.32(3) applies to both the claimant and the insurer. In circumstances where the insurer has not conceded the permanent impairment threshold and the claimant is awaiting the conclusion of the medical dispute of his whole person impairment by the Commission, there is no practical utility, in my view, in pursuing a settlement of his claim until that issue is resolved. Indeed, there is an air of unreality about the proposition that the claim could be settled in circumstances where the parties remain in dispute about the degree of permanent impairment suffered by the claimant (emphasis added).

The Member concluded that by preparing his claim as much as he feasibly could have, the claimant had used his best endeavours to resolve the claim.

View decision

Milla v Transport Accident Commission [2022] NSWPIC 127

Member: Maurice Castagnet

MOTOR ACCIDENTS—claims assessment—claimant a resident of the Australian Capital Territory (ACT), who lodged a compensation to relatives claim against the Transport Accident Commission (TAC), a Victorian statutory corporation—insurer alleged claimant failed to exercise best endeavours pursuant to s 7.32(3) of the Act prior to referral to Commission—whether determination of claim requires exercise of federal jurisdiction—whether claim can be dismissed due to claimant’s failure to exercise best endeavours.

The claimant, a resident of the ACT, had lodged a compensation to relatives against the TAC, the Victorian statutory corporation responsible for responding to all CTP claims in that State.

The claimant lodged an application with the Commission for damages assessment on 1 December 2021 but submitted as she was the resident of the ACT and the insurer is a Victorian statutory body determination of her application would require the exercise of federal jurisdiction. She accordingly sought for her application to be dismissed so that she could seek leave from the District Court to have her claim heard by that Court.

The insurer submitted that the application should be dismissed, but on the grounds that the claimant had not used her best endeavours to resolve the claim before it was referred to the Commission for determination.

The Commission, which is not a Court, does not have jurisdiction to determine matters concerning federal jurisdiction. Division 3.2 of the Personal Injury Commission Act 2020 (the PIC Act) sets out the procedure to have claims involving federal jurisdiction determined. Relevantly, s 25 of the PIC Act says that federal jurisdiction is defined as matters described by s 75 of the Constitution, particularly those “between States, or between residents of different States, or between a State and a resident of another State”.

Findings: Citing Sweedman v Transport Accident Commission [2006] HCA 8, the Member accepted that the TAC, as a statutory insurer, bore characteristics that brought it within the constitutional description of the State of Victoria for the purposes of the Constitution. However, he determined that because the claimant was a resident of a territory, and not a state, the matter did not require determination of a dispute ”between States, or between residents of different States, or between a State and a resident of another State”, and that the Commission therefore had jurisdiction to hear the claim.

Otherwise, the Member made no finding as to whether the claimant failed to comply with the best endeavours requirement of s 7.32(3). However, after reviewing s 54 of the PIC Act, which permitted the Commission to dismiss proceedings, and rule 77 of the Personal Injury Commission Rules 2021, the Member considered there were no grounds that permitted him to dismiss the application.

The Member accordingly referred the matter into the Stood Over List.

View decision

Fernandez v Insurance Australia Limited t/as NRMA [2022] NSWPIC 128

Member: Brett Williams

MOTOR ACCIDENTS—claims assessment—application for damages assessment lodged with the Commission four months late—whether claimant provided full and satisfactory explanation for the delay—definition of full and satisfactory explanation.

The claimant was the front seat passenger in a vehicle being driven by her friend on 27 May 2018. Their vehicle collided head on at speed with another vehicle and the claimant’s friend was killed as a result.

Section 7.33 of the Act required the claimant to commence proceedings for damages assessment with the Commission by 27 May 2021, but the claimant did not do so until 22 September 2021, some four months late. Having lodged his application late, that section required the claimant to provide a full and satisfactory explanation for his delay.

The claimant’s evidence was that he had not been made aware by his solicitors or anyone else of the 3-year time limitation for the commencement of proceedings in the Commission. He that he relied upon his solicitors to progress his claim and that he had only been made aware of the time limitation after his solicitors informed him that his application had been lodged, but outside of time.

The claimant’s solicitor wrote a statement confirming he had not informed the claimant of the 3-year time limitation, and that considering the claimant’s medical conditions was not stable, the majority of efforts were directed towards his treatment being attended to. The solicitor also informed the Commission that the claimant and the insurer had participated in settlement discussions in August 2021.

The only definition of a “full and satisfactory explanation” is contained in s 6.2 of the Act. That section provides:

  1. For the purposes of this Part, a full and satisfactory explanation by a claimant for non-compliance with a duty or for delay is a full account of the conduct, including the actions, knowledge and belief of the claimant, from the date of the accident until the date of providing the explanation.
  2. The explanation is not a satisfactory explanation unless a reasonable person in the position of the claimant would have failed to have complied with the duty or would have been justified in experiencing the same delay.

Part 6 of the Act contains the time limits for the making of statutory benefits and common law claims. The time limitation imposed by s 7.33 of the Act is contained in Part 7 to the Act.

Findings: The Member noted that contrary to the parties’ submissions, the s 6.2 definition of a full and satisfactory explanation did not expressly apply to matters concerning delay under s 7.33 of the Act. However, in order to interpret s 7.33 in a way that was ‘harmonious, logical and consistent’, with the balance of the Act, the Member adopt the s 6.2 definition as applying to disputes under s 7.33.

The Member rejected the insurer’s submissions that the claimant’s explanation was not full. He noted that the claimant, having set out his post-accident treatment, and having said that his solicitors had not advised him of time limits and having left the claim for them to progress, had adequately set out a full account of his actions, knowledge, and beliefs.

The Member also accepted the claimant’s explanation as being satisfactory. He concluded that a reasonable person, who corresponded frequently with their solicitors and provided them instructions, and who had left the claim to them to manage, who have experienced the same delay.

Having accepted that the claimant’s explanation as being full and satisfactory, the Member granted the claimant leave to proceed with his application for damages assessment.

View decision

Medical Review Panel decisions

Muradi v QBE Insurance (Australia) Ltd [2022] NSWPICMP 59

Review Panel members: Member John Harris, Dr Ian Cameron, Dr Trudy Rebbeck

MOTOR ACCIDENTS—Medical Review Panel decision—minor injury dispute—whether the claimant’s annular tears caused by the accident.

The claimant sustained injuries, after being thrown off from his motorcycle when it was rear-ended on 20 March 2020. The insurer determined the claimant’s injuries to be minor and the claimant disputed that decision before the Commission.

In a certificate dated 26 April 2021, Assessor Berry, concluded that the accident caused a soft tissue injury to the claimant’s neck and certified that the injury was a minor injury within the meaning of the Act. He noted that that imaging of the neck revealed annular tears at C5/6 and C6/7 but concluded that pathology was not caused by the accident. The claimant lodged an application for review of Assessor Berry’s assessment and asserted that considering he was only 23 years of age, the annular tears could not have been degenerative in nature and that the only possible cause of those tears was the accident.

The Panel considered there were two issues relevant to the dispute: whether the accident caused the annular tears and whether annular tears were non-minor injuries. The Panel noted the claimant bore the onus of proof in establishing that his injuries were non-minor. 

Findings: The Panel concluded that the claimant had not established that the accident was capable of or did in fact cause the annular tears seen on imaging of the neck. The Panel cited studies showing that annular tears can commonly arise in the younger population (aged in their 20s) and in circumstances where there was insufficient evidence demonstrating the cause of the tearing seen on the claimant’s scans, it could not be concluded that the accident either caused the tears or rendered them symptomatic.

Having concluded that the accident did not cause the annular tears and caused only a soft tissue (minor injury), the Panel did not consider it necessary to consider whether annular tears were a non-minor injury and affirmed Assessor Berry’s Certificate.

View decision


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