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AAO v Allianz Australia Insurance Ltd [2018] NSWDRS MR 015

Overview

Jurisdiction: Merits Review

Catchwords: Statutory benefits – weekly payments – unemployed at time of accident – intention to commence work at time of accident – whether claimant suffered loss of earnings – PAWE – definition of earner

Legislation cited:

  • Motor Accident Injuries Act 2017 (NSW) ss 1.3, 3.6, 3.7, 7.13, Schedule 1 cl 3, 4 & 8, Schedule 2(1)
  • Motor Accident Guidelines effective 13 July 2018
  • Motor Accident Injuries Regulation 2017 (NSW)

Parties:

AAO – claimant

Allianz Australia Insurance Ltd – insurer

Disclaimer: This decision has been edited to remove Unique Personal Identification information including the name of the claimant.

Merit Review Certificate

View the certificate

Issued under section 7.13(4) of the Motor Accident Injuries Act 2017

The Claim
Claimant AAO
Insurer Allianz Australia Insurance Limited
Claim Number 75C000211
The Reviewable Decision
Reviewable decision‐makerAshley Barker
Date of Reviewable decision28 March 2018
Nature of Reviewable decisionWeekly payments of statutory benefits
The Merit Review
Our Reference10038150
Merit ReviewerTajan Baba
Date of this Certificate14 September 2018

Merit Reviewer’s Determination

This determination relates to a merit review matter about weekly payments of statutory benefits to injured persons. This is a reviewable decision under Schedule 2(1)(a) of the Motor Accident Injuries Act 2017.

My determination of the Merit Review is as follows:

1. The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:

o AAO is entitled to weekly payments of statutory benefits.

2. Effective Date: The reviewable decision referred for merit review by AAO is about her entitlement to weekly payments of statutory benefits payable by the insurer to AAO from the date of accident. It is the function of the Dispute Resolution Service on merit review to arrive at the correct and preferable outcome in respect of the weeks covered by the reviewable decision that is referred for review. Accordingly, this determination has effect from 28 March 2018. The insurer is to determine AAO’s entitlement to weekly payments of statutory benefits in accordance with the decision above.

A brief statement of my reasons for this determination are attached to this certificate.

Tajan Baba
Merit Reviewer, Dispute Resolution Service

Reasons for decision

Background

1. AAO was injured in a motor vehicle accident on 11 February 2018. She was not working at the time of the accident.

2. AAO was employed as a social worker in Ireland, before relocating to Australia in August 2017.

3. The insurer accepted AAO’s claim for medical treatment under the Motor Accidents Injuries Act 2017 (“the Act”) following the accident and advised of this decision in a notice dated 28 March 2018. It determined in the same notice, that she was not entitled to weekly payments of statutory benefits (“the reviewable decision”).

4. AAO applied for an internal review. She submitted that she was entitled to weekly payments of statutory benefits because she intended to commence work at the time of the motor vehicle accident. On internal review dated 4 May 2018, the insurer affirmed the reviewable decision. AAO received notice of the decision on 12 June 2018.

5. AAO applied for a merit review by the Dispute Resolution Service on 6 July 2018.

6. The dispute between the Insurer and AAO is in respect to whether AAO suffered a “loss of earnings”. This is a matter related to the amount of weekly payments of statutory benefits payable to AAO. It is a reviewable decision under Schedule 2(1)(a) of the Act.

Documents and information

7. I have considered the documents provided in the application and the reply and any further information provided and exchanged between the parties.

Submissions

8. AAO’s legal representatives, Bonura Legal, make the following submissions on her behalf:

a. The internal review decision finds that AAO held an intention to continue with job searching and commence employment in 2018, if successful. The decision-maker found that AAO would not have found employment on the balance of probabilities however no regard is had to her work history (employment in Dublin prior to coming to Australia), her skills or work experience.

b. On the balance of probabilities, AAO would have found employment, at around the time of the motor vehicle accident.

c. The decision-maker has also incorrectly interpreted the legislation as it relates to PAWE. It is not necessary for AAO to be in employment at the time of the accident. PAWE can be determined provided AAO was in employment for at least 13 weeks during the year preceding the motor vehicle accident. Under clause 4 of Schedule 1, this can be obtained by averaging AAO’s earnings during her period of employment.

9. The insurer submits:

a. In addition to the submissions below, the insurer relies upon the reasons set out in the Certificate of Determination – Internal Review.

b. Sections 3.6(1) and 3.7(1) of the Act provide that “an earner who is injured as a result of a motor accident suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits…”

c. These provisions provide a two step test before an entitlement to weekly payments of statutory benefits arises. Firstly, that the injured person meets the definition of “earner” under the Act, and secondly that they have suffered a total or partial loss of earnings as a result of the injury.

d. The test for an entitlement to statutory benefits in the first 2 entitlement periods is not one of “capacity” but instead of “loss of earnings”.

e.The insurer has not taken issue with AAO meeting the definition of “earner”.

f. The dispute arises from the question of whether AAO has suffered a total or partial loss of earnings as a result of the injury.

g. It is common ground that AAO was not in employment at the time of the motor accident.

h. AAO had relocated to Australia from Ireland in August 2017.

i. The date of accident is 11 February 2018.

j. In support of AAO’s assertion that she would have been in employment by the date of the insurer’s original decision of 28 March 2018, AAO has provided a rejection email from Queensland Health dated 1 February 2018. AAO has indicated that such a position was applied for in November 2017.

k. AAO has also provided evidence of applying for a position as a Medical Social Worker for the Mater Hospital in October 2017, however, she was unsuccessful in her application.

l. AAO has not provided evidence of any other position applied for prior to the accident.

m.In an email of 24 April 2018, AAO makes mention of a friend who advised that a position was availablein the Royal Women’s Hospital in February. Whilst AAO mentioned that the friend could have put in a CV and was familiar with the head of the Department, it is well known that government departments have scrupulous procurement processes that ensure candidates are chosen through strict protocols, rather than contacts.

n. AAO has not provided copies of job advertisements or positions that were vacant at the relevant times, that she alleges that she would have applied for but for the accident and set out how her experience and qualifications would match such positions.

o. AAO bears the onus to establish that she suffered a loss of earnings as a result of the accident, and hence that on the balance of probabilities she would have been successful in a job application and be in employment at the time of the insurer’s original decision.

p. On the information provided, it is submitted that on the balance of probabilities AAO would not have been in employment, but for the motor accident, at the time of the insurer’s original decision, and therefore it is not established that AAO has suffered a total or partial loss of earnings because of the accident.

q. The Insurer concedes that the issue of calculation of “PAWE” as discussed in the internal review certificate is possibly incorrect, however, such issues are immaterial to the outcome. In that regard, calculation of PAWE is only relevant if the AAO first establishes that there has been a loss of earnings.

Legislation

10. In conducting my review I have considered the following legislation and guidelines:

  • Motor Accident Injuries Act 2017 (NSW) (“the Act”)
  • Motor Accident Guidelines effective from 30 April 2018 (“the Guidelines”
  • Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)

Reasons

Weekly payments of statutory benefits

11. AAO suffered injuries as a result of a motor vehicle accident she was involved in on 11 February 2018.

12. AAO was not working at the time of the accident. She had moved to Australia from Ireland in August 2017. In Ireland, she was employed as a social worker.

13. AAO has submitted correspondence and information showing that she had made job applications in late 2017 and had generally been seeking employment in the period before the accident.

14. Following the accident, the insurer issued a notice to AAO on 28 March 2018 advising that her claim for medical treatment was accepted however it had determined that she was not entitled to weekly payments of statutory benefits. This is the ‘reviewable decision’, referred to by the Insurer as the original decision in the above submissions.

15. AAO submits that she should be entitled to weekly payments of statutory benefits as she intended to continue with job search and commence employment in 2018, if she had been successful. She submits that the insurer failed to take into account her work history in Ireland, skills or work experience when making its decision.

16. The insurer submits that AAO is not entitled to weekly payments of statutory benefits as she does not meet the test under sections 3.6(1) and 3.7(1) of the Act. It notes that these sections provide:
An earner who is injured as a result of a motor accident suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits…

17. The insurer submits that this is a two step test where it has to be established that AAO is an “earner” and that she suffered a “loss of earnings”.

18. The insurer does not dispute that AAO satisfies the definition of “earner”. This definition is provided at clause 2 of Schedule 1 of the Act.

19. The area of contention between AAO and the insurer is in respect to whether AAO suffered a “loss of earnings”.

20. The insurer submits that AAO did not suffer a loss of earnings and is therefore not entitled to weekly payments of statutory benefits. Its main submission is that on the balance of probabilities AAO would not have been successful in a job application and be in employment at the time of the insurer’s original decision. It submits that it is therefore not established that AAO has suffered a total or partial loss of earnings because of the accident.

21. The insurer further submits that on the balance of probabilities AAO would not have been in employment, but for the motor accident, at the time of the insurer’s reviewable decision.

22. I acknowledge that the information before me indicates that AAO had not been successful in gaining employment prior to the insurer’s reviewable decision. However, I note that the Act does not require an injured person to be in employment at the time of the accident or at the time of the reviewable decision for it to be established that an injured person has suffered a “loss of earnings”.

23. Like the definition of “earner”, the Act also provides a definition for “loss of earnings” in Schedule 1. Clause 3 of that schedule states:

Meaning of “loss of earnings”
(1) Loss of earnings means a loss incurred or likely to be incurred [emphasis added] in a person’s income from personal exertion.

24. As seen in the above definition, the Act provides that a loss of earnings can be established if the loss was incurred “or likely to be incurred”. In respect to people who did not suffer a loss of income at the time of the accident, as in AAO’s case, the Act does not stipulate that it must be determined that AAO was likely to have been in employment at the time of the insurer’s reviewable decision. This is the interpretation adopted by the insurer.

25. In my view, the Act does not provide a specific timeframe for when this “loss of earnings” is likely to be incurred by the injured person. It certainly does not state that at the time of the insurer’s reviewable decision it needs to be established that the injured person would have on the balance of probabilities been in employment.

26. At the time of the insurer’s reviewable decision, clause 3 of Schedule 1 of the Act required that the insurer determine whether AAO had incurred a loss of earnings or a loss of earnings was likely to be incurred.  In my view, that is whether AAO was likely to incur a loss of earnings going forward. Having regard to the objects of the Act, particularly the object “to provide early and ongoing financial support for persons injured in motor accidents” [section 1.3(2)(b) of the Act], I consider this to mean the period that AAO did not have fitness for work as a result of the injury.

27. I note that in determining an injured person’s fitness for work, there are a number of factors an insurer is required to have regard to under clause 8 of Schedule 1 of the Act This includes but is not limited to, any medical certificate provided by the injured person as to their fitness for work. I do not have a large amount of information before me in relation to the other factors, and I imagine that the insurer also did not at the time that it made the reviewable decision given the early stages of the claim.

28. The insurer would have however had copies of certificates of capacity/certificates of fitness submitted by AAO. I have before me copies of these certificates dating back to 21 February 2018. The certificates are issued by Dr Ruberry and all, but the most recent certificate dated 6 July 2018, certify that AAO has no current work capacity for any work. At the time that the insurer made the reviewable decision, on 28 March 2018, it had AAO’s first certificate of capacity certifying that she did not have capacity to work in any type of employment.

29. I note the insurer’s submission that the matter does not require determining capacity for employment however for the reasons outlined above, I consider that it was necessary for the insurer to have considered AAO’s fitness for work when determining whether a loss of earnings was likely to have been incurred by AAO, at the time that it made the reviewable decision.

30. The information before me indicates that AAO was in full-time employment as a social worker in Ireland in what appears to be a government agency before relocating to Australia. AAO has submitted information in relation to at least two job applications she made prior to her injury and correspondence between herself and others in relation to her job seeking intention and activity prior to the accident. There is nothing on the information before me to indicate AAO would not have gained employment as a social worker or another type of employment some time in 2018.

31. Having regard to AAO’s past employment, her demonstrated efforts in job-seeking and the certificate of capacity dated 21 February 2018, certifying she had no capacity for work, I consider the correct and preferable decision for the insurer at the time that it made the reviewable decision was that a loss of earnings was likely to be incurred by AAO.

32. In fact, AAO continued to be certified as having no current work capacity for any work up to the certificate dated 6 July 2018 which certifies a capacity to work 4 hours per day, 3 days per week.

33. On the information before me, I am satisfied that on the date of the insurer’s reviewable decision, a loss of earnings was likely to be incurred by AAO.

34. I find that a AAO suffered a “loss of earnings” within the meaning provided in clause 3, Schedule 1.

35. Given that AAO is an “earner” and suffered a “loss of earnings”, it follows that she is entitled to weekly payments of statutory benefits under the Act. The insurer needs to make a decision about the amount of this entitlement. This decision is also a reviewable decision, should AAO disagree and wish to refer it for review.

Determination

My determination of the Merit Review is as follows:

36. The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:

a. AAO is entitled to weekly payments of statutory benefits.

37. Effective Date: The reviewable decision referred for merit review by AAO is about her entitlement to weekly payments of statutory benefits payable by the insurer to AAO from the date of accident. It is the function of the Dispute Resolution Service on merit review to arrive at the correct and preferable outcome in respect of the weeks covered by the reviewable decision that is referred for review. Accordingly, this determination has effect from 28 March 2018. The insurer is to determine AAO’s entitlement to weekly payments of statutory benefits in accordance with the decision above.

Tajan Baba
Merit Reviewer, Dispute Resolution Service