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AAR v NRMA Insurance Ltd [2018] NSWDRS MR 018

Jurisdiction: Merit review

Catchwords: Statutory benefits – Weekly payments – definition of earner – self employed – sole business owner – part time employee – pre-accident weekly earnings

Legislation cited:

  • Motor Accident Injuries Act 2017 (NSW) ss 7.13, Schedule 1 cl 2(a), Schedule 2
  • Motor Accident Injuries Regulation 2017
  • Motor Accident Guidelines effective 13 July 2018 cl 7.441

Parties:

  • AAR - claimant
  • NRMA Insurance Ltd - insurer

Disclaimer: This decision has been edited to remove all unique personal identification 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
ClaimantAAR
InsurerNRMA Insurance Limited
Claim NumberNWRTP180001801
The Reviewable Decision
Decision-makerNicolas Caballero
Date of decision13 June 2018
Nature of decisionIf AAR meets the statutory definition of “earner”
The Merit Review
Our Reference10038287
Merit ReviewerJames Lowe
Date of this Certificate3 August 2018

Merit Reviewer’s Determination

This determination relates to a merit review matter, which is a reviewable decision under Schedule 2(1)(a) of the Motor Accident Injuries Act 2017 (the Act).

The determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
    • AAR meets the definition an “earner” under the Act.
  • Effective Date: This determination has effect from the date of the reviewable decision, being 13 June 2018. A brief statement of my reasons for this determination are attached to this certificate.

Reasons

Background

1. AAR was injured in a motor accident on 17 January 2018.

2. On 13 June 2018, the insurer wrote to AAR and advised that “Injured people who are ‘earners’ are entitled to receive weekly income loss payments if they’re unable to work because of their injuries […] Unfortunately based on the information you provided you don’t meet the requirements of any of the earner categories [as listed in the letter to AAR]”.

3. AAR applied for an internal review by the insurer. On 28 June 2018, the insurer gave AAR written notice that it had affirmed the original decision.

4. AAR disputes the insurer’s decision and lodged an application for merit review with the Dispute Resolution Service on 10 July 2018. The application has been made in accordance with section 7.12(1) of the Act and the Motor Accident Guidelines (the Guidelines).

Documents and Information

5. I have considered the documents provided in and submitted with the application and the reply and any further information that has been provided to the Dispute Resolution Service and I am satisfied this information has been exchanged between the parties.

Submissions

6.In the application for merit review, AAR notes that the internal reviewer determined that she does not meet the requirements of an earner. AAR submits that this is not an accurate representation of her earning situation, which is:

“I rent a chair as a hairdresser in a salon, where I work part-time, 2 days per week since 2013. The Salon is (name omitted), located in Rose Bay. Prior to that, I worked in my own salon, (name omitted) for 27 years. It was located in Rose Bay North. I work based on my own clientele who pay me directly in cash for services rendered. Client appointments are taken throughout the week via telephone.”

7. In reply, the insurer submits that based on the information on file, there is insufficient evidence to establish that AAR meets the definition of an earner per the Act.

8. The insurer advises that to determine whether it could compensate AAR for lost wages, it has considered whether she is an earner at the time of accident, having regard to Clause 2 of Schedule 1 of the Act.

9. The insurer submits that in order to determine AAR’s eligibility as an earner and calculate her pre-accident weekly earnings, her 2017 Income Tax Return and Notice of Assessment, copies of bank statements and documentary evidence of weekly income was requested.

10. The insurer submits that in response to the requested documentation, AAR advised that she is unable to provide a Notice of Assessment as her 2017 Income Tax Return has not been filed. It is submitted that in addition to this, the letter from Hair Salon was the only evidence of her chair rental and her bank statements did not reflect any income or expenditure information.

11. The insurer submits that whilst the letter from the  salon confirms that AAR rents a chair, two days a week, it does not demonstrate that she was receiving any earnings. It is submitted that in the absence of further documents requested, particularly primary evidence of her income, the insurer is unable to determine that AAR was receiving weekly payment or other payments in respect of loss of earnings, and is therefore unable to verify that she is an earner per the definition outlined in the Act.

Legislation

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

  • Motor Accident Injuries Act 2017 (NSW) (the Act)
  • Motor Accident Guidelines effective 13 July 2018 (the Guidelines)
  • Motor Accident Injuries Regulation 2017 (NSW) (the Regulation)

Reviewable decision(s)

13. On 27 July 2018, the Dispute Resolution Service wrote to AAR and the insurer to confirm that the decision of the insurer referred for merit review is that AAR does not qualify as an earner under the Act. AAR and the insurer were advised that:  
Given the above submissions and those provided in the application and reply, the Merit Reviewer is of the understanding that there is no dispute AAR is a person who is injured as a result of a motor accident. Therefore, the Merit Reviewer proposes to proceed on the basis that decision of the insurer referred for merit review is about whether AAR qualifies as an earner having regard to sub-clauses (a), (b), or (c) provided in the definition of earner [under the Act].

14. AAR and the insurer were given the opportunity to respond to this information or provide further submissions. No response was received. As outlined above, I am satisfied that AAR has referred for merit review the insurer’s decision that she does not qualify as an earner under the Act.

Meaning of earner

15.Clause 2(a) of Schedule 1 of the Act defines the meaning of earner as:

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,

16. AAR is at least 15 years of age and there is no dispute she is injured as a result of a motor accident.

17. Also, I accept on the information before me that AAR was “self-employed”.

18. The information before me to support this includes a PAWE assessment report by PKF (NS) Forensic Accountants dated 16 May 2018. While expressing the difficulty in calculating AAR’s income and assessing her pre-average weekly earnings, it is noted that AAR is a self-employed hairdresser who rents a hairdressing chair from the Rose Bay salon for two days a week. This supports the information AAR has provided in her submissions.

19. Also, on 11 February 2018, AAR declared in her application for personal injury benefits (a CTP claim form) that she has been a self-employed hairdresser who rents a chair from a Rose Bay salon. The proprietor of the Rose Bay salon, confirmed by letter on 14 April 2018 that AAR rents a hairdressing chair two days a week in her salon for $220 per week.

20. I also accept on the information before me that AAR was self-employed “(whether or not full-time) at any time during the 8 weeks immediately preceding the motor accident, or during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident.”

21. For instance, before me is a profit and loss statement for the period 1 January 2017 to 19 January 2018. AAR details her weekly earnings in each of the 55 weeks covered in the statement, listing her “gross takings”, “rent paid” and “nett” amounts. She reports receiving earnings in all but one of those 55 weeks and submits she was paid in cash for her services rendered. AAR has also provided receipts showing that she purchased hairdressing products on several occasions. A receipt dated 9 October 2017 from “Turnelys” reveals that AAR purchased hairdressing products under her name with delivery to the Rose Bay salon, being the salon where she worked and rented a chair.

22. I note the insurer’s submission that whilst the letter from the Rose Bay salon confirms that AAR rents a chair, two days a week, it does not demonstrate that she was receiving any earnings and also the submission that in response to the requested documentation, AAR advised that she is unable to provide a Notice of Assessment as her 2017 Income Tax Return has not been filed.

23. However, AAR purchased hairdressing products that were sent to her place of work, she has produced a profit and loss statement (submitting that she was paid in cash) and she was a self-employed person who rented a hairdressing chair for two days a week. I consider this to be persuasive information that she was self-employed (whether or not full-time) at any time during the 8 weeks immediately preceding the motor accident, or during a period or periods equal to at least 13 weeks during the year immediately preceding the motor accident.

24. Finally, I have before me a receipt showing that AAR again purchased hairdressing products with delivery to the Rose Bay salon on 20 April 2018. This receipt and the salon owner’s letter confirming that AAR rents a chair in her salon, whilst dated after the accident, in my view is further information supporting that she was a self-employed hairdresser, drawing earnings from her business prior to her accident. Further, given that receipt and the salon owner’s letter, I am satisfied that “at the date of motor accident, [AAR] had not retired permanently from all employment.”

25. In light of the above, I am persuaded that AAR meets the requirement set by subclause (a) under the meaning of earner.

26. I therefore find that AAR meets the definition of an “earner” under the Act.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
o AAR meets the definition an “earner” under the Act.
  • Effective Date: This determination has effect from the date of the reviewable decision, being 13 June 2018.

James Lowe
Dispute Resolution Service Merit Reviewer