Sparke Helmore's MAD (Motor Accidents Division) Weekly - Issue 49
10 May 2022
Welcome to the 49th 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.
Claims Assessment
Rehman v Allianz Australia Insurance Ltd [2022] NSWPIC 171
Member: Maurice Castagnet
MOTOR ACCIDENTS—miscellaneous claims assessment—whether claimant wholly or mostly at fault for accident—claimant collided into a parked car—vision impaired by sunlight.
The claimant was driving a taxi at dawn on 28 March 2020. He was in the left-hand lane and says that as he negotiated a bend in the road, sunlight shone into his eye and impaired his vision. He says that the sunlight rendered him unable to see a parked car in front of him and that as a result, he drove into the parked car.
The insurer declined to pay statutory benefits beyond 26 weeks after the date of the accident, under ss 3.11 and 3.28 of the Act, having determined that the accident was caused wholly or mostly due to the fault of the claimant. The claimant disputed the decision in the Commission and asserted that the accident was a no-fault accident within the meaning of s 5.1 of the Act.
Findings: The Member did not accept that the accident was a no-fault accident. He reasoned that morning light at daybreak was an ordinary challenge faced by road users and that parked cars on the roadside was foreseeable. The Member concluded that in the circumstances, the claimant was negligent in having failed to account for those possibilities when driving in the left-hand lane. He accordingly affirmed the insurer’s fault decision.
Merit review
George v AAI Limited t/as AAMI [2022] NSWPICMR 22
Merit Reviewer: Katherine Ruschen
MOTOR ACCIDENTS—merit review—claimant failed to comply with insurer’s direction issued under s 6.26 of the Act to provide particulars of common law claim—application for reinstatement of claim—whether application for reinstatement a merit review matter—whether Merit Reviewer has jurisdiction to reinstate claim.
The claimant initially failed to comply with the insurer’s direction under s 6.26 of the Act to provide particulars of the common law claim, and the claim was therefore deemed to be withdrawn. The claimant subsequently lodged a merit review application to reinstate his claim for damages.
The principle issue the Merit Reviewer was required to determine was whether she, as a Merit Reviewer as opposed to a Commission Member, was able to determine the application.
The Merit Reviewer noted that s 8 of the Personal Injury Commission Act 2020 (PIC Act) provides that the Commission consists of the President, Deputy President, Principal, Senior, and General Members. She noted that in contrast, Merit Reviewers did not constitute part of the Commission, but rather, were decision makers appointed by the Commission to determine certain disputes.
The Merit Reviewer further observed that s 34 of the Personal Injury Commission Act 2020 conferred Merit Reviewers with specific powers to determine certain disputes. Relevantly, schedule 2(1) of the Motor Accident Injuries Act 2017 empowered Merit Reviewers to determine disputes about whether the claimant had provided adequate particulars under s 6.25 of that Act, and whether the insurer was entitled to give a direction under s 6.26.
Findings: The Act only permitted the Commission to reinstate a claim for damages deemed to be withdrawn under s 6.26 of the Act. The Member reasoned that as a Merit Reviewer, she did not have the jurisdiction to determine the application for reinstatement. She accordingly refused to determine the claimant’s application as a merit review matter.
Caine v AAI Limited t/as GIO [2022] NSWPICMR 23
Merit Reviewer: Katherine Ruschen
MOTOR ACCIDENTS—merit review—calculation of claimant’s pre-accident weekly earnings (PAWE)—whether Act permits adjustment of PAWE calculation to take into account interruption to earnings in pre-accident period.
The claimant lodged a claim for statutory benefits following a motor accident he was involved in on 1 July 2021. The insurer calculated his PAWE to be $459.66 and this assessment was confirmed on internal review.
The claimant disputed the insurer’s calculations in the Commission. He said that his PAWE should be adjusted to account for the downturn in his pre-accident income due to COVID-19 restrictions, and a 13 week break he took from work whilst assisting his daughter.
The Merit Reviewer observed that, as decided by Merit Reviewer Koya in APR v Allianz [2020] NSWSIRADRS 213 and by herself in Shahmiri v Allianz Australia Insurance Limited [2021] NSWPICMRP 2, there were no provisions in the legislation that allowed an adjustment in PAWE calculations to take into account the effects of the COVID-19 pandemic or any other interruption to earnings. The Merit Reviewer also noted that her reasons in Shahmiri were affirmed by her Honour Associate Justice Harrison on judicial review (Allianz Insurance Australia Limited v Shahmiri [2022] NSWSC 481).
Findings: Consistent with Shahmiri, the Merit Reviewer determined that the Act precluded her from adjusting the claimant’s PAWE to take into account the interruption to the claimant’s earnings in the year before the accident.
However, she did recalculate the claimant’s PAWE to be $460.90. She noted that the insurer had erroneously divided the claimant’s gross earnings in the 12-month period prior to the accident by 52.14 weeks, rather than 52 weeks. She said:
The calculation required by clause 4(1) is by reference to the “weekly” average, not the daily average. It is universally understood and accepted that a period of one year is 52 weeks, not 52.14 (or 52.28 in a leap year).
View decision
Zia v AAI Limited t/as AAMI [2022] NSWPICMR 24
Merit Reviewer: Katherine Ruschen
MOTOR ACCIDENTS—merit review—whether costs of internal review payable—whether costs payable for treatment dispute before Commission not yet determined payable.
The claimant lodged a statutory benefits claim in connection to an accident he was involved in on 20 May 2020. He claimed the cost of physiotherapy, but the insurer determined that this treatment was not reasonable and necessary. The decision was affirmed on internal review, and the claimant lodged a treatment dispute in the Commission. At the same time, the claimant lodged a merit review application, seeking payment of legal costs.
By the time the merit review matter concerning payment of costs was decided, the treatment dispute had yet to be determined.
Findings: The Merit Reviewer observed that r 23 of the Motor Accident Injuries Regulation 2020 prevented claimants recovering any costs incurred in connection to internal review application. She accordingly declined to award costs incurred in connection to the internal review application, and remitted the balance of the costs application, being costs associated with the treatment dispute before the Commission, to the insurer for determination.
Muzammil v QBE Insurance (Australia) Limited [2022] NSWPICMR 25
Merit Reviewer: Katherine Ruschen
MOTOR ACCIDENTS—merit review—calculation of claimant’s PAWE—claimant earned income from multiple sources—claimant worked as an employee and also in self-employment—claimant failed to declare income and expenses from working as a food delivery drive to ATO and calculation of gross income in those circumstances—calculation of gross income from self-employment.
The claimant lodged a statutory benefits claim in connection to an accident on 6 July 2021. The insurer determined his PAWE to be $464.69 and this determination was affirmed on internal review.
The claimant disputed the insurer’s PAWE calculation in the Commission. He said that his PAWE should be calculated by examining only the income he received in June 2021.
The claimant otherwise adduced evidence showing that, in the 12 month period prior to the accident, he earned income from working with McDonalds, a company called CC Frenchman, from the Trustee for Charlies of Lane Cove Trust, as a self-employed delivery driver for Menulog, and through a company called Smart Ware.
It became apparent during the course of the proceedings that determination of the claimant’s PAWE would be difficult, in circumstances where the claimant’s income and expenses from his work with Menulog was not declared on his tax returns and where his income received from Smart Ware was not properly declared.
Findings: Having regard to the nature of the claimant’s employment before the accident, the Merit Reviewer determined that the claimant’s PAWE was to be calculated in accordance with clause 4(1) to Schedule 1 of the Act – that is, by dividing the claimant’s total gross earnings by the 52-week pre-accident period.
In calculating total gross earnings, the Merit Reviewer took into account the claimant’s gross earnings as an employee of McDonalds, CC Frenchman, and the Trustee for Charlies of Lane Cove Trust.
Given the claimant’s failure to declare his income and expenses—including providing evidence of his expenses—from Menulog the Merit Reviewer assumed that his expenses were 16% of income, which she noted was the ‘ATO benchmark for delivery services’.
In terms of the claimant’s income from Smart Ware, the Merit Reviewer determined that his income, net of expenses and exclusive of tax, should be taken into account.
Findings: Having regard to the above, the Merit Reviewer subsequently calculated the claimant’s total gross income in the 52-week pre-accident period to be $27,505.15, and divided it by 52 weeks, to give a PAWE figure of $528.98.
Given the claimant’s assertion that his PAWE was $1,450 ‘net’ per week, and her findings above, the Merit Reviewer also commented on the claimant’s and his solicitors’ failure to provide adequate information to provide sufficient evidence to address the dispute. She said:
The claimant is legally represented. Something should be said about the presentation of the claimant’s case in the context of his obligations to the insurer to ensure the information he provides is true and correct. In his application for personal injury benefits the claimant declared that his pre-accident average weekly income was $1,450 “net” per week... The claimant’s solicitors also contend pre-accident earnings of a similar amount and a total incapacity since the date of the accident…
However, none of these statements are borne out by the evidence. Having regard to the evidence, the suggestion the claimant enjoyed average weekly earnings (whether gross or net) of around $1,450 pre-accident is fanciful.
Byrne v AAI Limited t/as GIO [2022] NSWPICMR 26
Merit Reviewer: Katherine Ruschen
MOTOR ACCIDENTS—merit review—whether costs of internal review payable—whether costs payable for treatment dispute before Commission not yet determined payable.
The claimant was involved in an accident on 15 December 2017 and lodged a claim for statutory benefits. During the course of that claim, the insurer declined to fund proposed treatment with a neurologist. The decision was affirmed on internal review and the claimant lodged a treatment dispute with the Commission. At the same time, she also lodged a merit review application, seeking payment of legal costs.
By the time the merit review matter concerning payment of costs was decided, the treatment dispute had yet to be determined.
Findings: Consistent with her reasons in Zia (above), the Merit Reviewer found that regulation 23 of the Motor Accident Injuries Regulation 2020 prevented claimants recovering any costs incurred in connection to internal review application. She declined to award costs incurred in connection to that internal review application and remitted the balance of the costs application, being costs associated with the treatment dispute before the Commission, to the insurer for determination.
