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AHJ v AAMI [2019] NSWDRS CA 197

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
Jurisdiction Other Matters Assessment
CatchwordsPermanent loss of earnings – weekly payments of statutory benefits – injured person residing outside of Australia – physiotherapist – ongoing disability – loss of capacity
Legislation cited Motor Accident Injuries Act 2017 (NSW) ss 3.21(2)(a), 3.21(2)(b)
Motor Accident Injuries Regulation 2017
Motor Accident Guidelines 2017 cl 7.67.10, 7.70
Cases cited

ABO v QBE Insurance (Australia) Limited [2019] NSWDRS MR 041

Text cited N/A
Parties AHJ – Claimant
AAMI – Insurer 
Disclaimer This decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

'Other Matters' Assessment

Background

1.   There is a dispute between the claimant and the insurer about whether weekly payments of statutory benefits are payable to an injured person residing outside of Australia pursuant to  section 3.21 of the Motor Accident Injuries Act 2017 (‘the Act’).

2.   The claimant was injured in a motor vehicle accident in NSW on 27 October 2018 resulting in injuries to his right foot. The injuries required surgical intervention on 11 November 2018 and 30 April 2019.

3.   The claimant was required to return to his home country of XX on 6 August 2019 due to the expiration of his visa.

4.   Before leaving Australia, the claimant supplied the insurer with a certificate of capacity which indicated that he ‘has capacity for some type of work from 17 July 2019 to 6 December 2019 as tolerated’.

5.   Upon receipt of that certificate the insurer advised the claimant that did not ‘consider his injury to be permanent in nature’. Weekly payments were subsequently terminated on 6 August 2019.

6.   The claimant disputed the insurer’s position necessitating a determination by the Dispute Resolution Service.

7.   Throughout the life of this dispute, the claimant made attempts to return to employment in XX. He has only been able to return to work on five occasions (12/09/19, 20/10/19, 1/11/19, 19/11/19 and 24/11/19) for the period of 4 hours on each occasion.

8.   Since returning to XX, the claimant has also sought medical treatment from Dr Vanessa Delaguardia, a physiotherapist who reports ongoing disability associated with the motor accident injuries.

Documents and Information

9.   I have considered the documents provided in the application and the reply and any further information and submissions provided by the parties.

Submissions

The Claimant’s Submissions

10.   The claimant submits that he is entitled to weekly payment of statutory benefits pursuant to section 3.21 of the Act on the basis that the only requirement of section 3.21(2)(a) is that a permanent loss of earnings has occurred.

11.   In making this submission, the claimant specifically highlights that section 3.21(2)(a) of the Act does not refer to ‘loss of earning capacity’. It is the loss of earnings that has to be considered in terms of permanency rather than any permanent loss of earning capacity.

12.   The claimant submits that in order for him to succeed with this application, I only need to be satisfied that there has been a permanent loss of earnings in the sense that the claimant has lost earnings which he will never recover.

The Insurer’s Submissions

13.   The  insurer’s  submission dated 23 September 2019,  attached  in support of  its  DRS  reply, is twofold:

a.   The claimant is not entitled to weekly payments of statutory benefits when residing overseas.

b.   The legislation precludes claimants from receiving benefits, if they reside oversees and cannot establish that the payment of these benefits is likely to be of a permanent nature.

14.   The insurer’s supplementary submissions of 12 December 2019 show a revised position, summarised as follows:

a.   Section 3.21(1) of the Act allows for statutory benefits to be paid to an injured person who resides outside of Australia when a loss of earnings is likely to be of a permanent nature.

b.   Whether the loss of earnings is likely to be of a ‘permanent nature’ is to be determined by a DRS decision maker.

c.   Section 3.21(2) provides a mechanism that, in combination with the Motor Accident Guidelines, dictates the method and manner of payments and continuance of the weekly payments for an injured person residing outside of Australia.

d.   The insurer further submits that it maintains no position regarding the interpretation of the phrase ‘likely to be of a permanent nature’ within section 3.21 of the Act and in the circumstances of the present case.

Legislation

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

a.   Motor Accident Injuries Act 2017 (NSW) (“the Act”)

b.   Motor Accident Guidelines effective 1 December 2019 (“the Guidelines”)

c.   Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)

d.   Interpretation Act 1987 (NSW)

Reasons

Consideration of section 3.21

16.   To determine whether the claimant is entitled to weekly statutory benefits whilst residing outside of Australia, it is necessary to consider the requirements of Section 3.21 of the Act.

17.   Section 3.21 of the Act states:

3.21 WEEKLY STATUTORY BENEFITS TO PERSONS RESIDING OUTSIDE AUSTRALIA

(1)   An injured person who resides outside Australia is not entitled to receive any weekly payment of statutory benefits in respect of any period during which the person resides outside Australia, except as provided by this section when the loss of earnings in respect of which statutory benefits are payable is likely to be of a permanent nature.

(2)   An injured person residing outside Australia is entitled to receive on a quarterly basis the amount of the weekly payments accruing due during the preceding quarter if:

(a)   the Dispute Resolution Service has determined that the injured person's loss of earnings is likely to be of a permanent nature, and

(b)  the person establishes, in such manner and at such intervals as may be required by the Motor Accident Guidelines, the person's identity and the continuance of the loss of earnings in respect of which the weekly payment is payable.

18.   My interpretation of section 3.21 is as follows:

(i)   The purpose of section 3.21(1) is to prohibit the payment of weekly payments of statutory benefits that would ordinarily be payable pursuant to Division 3.3 of the Act to an injured person during any period in which they reside outside of Australia, unless the requirements of the section are met. The requirements of the section are contained within 3.21(2)(a) and (b).

(ii)   Section 3.21(2) of the Act determines that weekly payments are to be made to an injured person residing outside of Australia on retrospective basis. In essence, lost earnings must accrue over a preceding quarterly period before a payment is required to be made by the insurer.

(iii)   Section 3.21(2)(a) of the Act contains one of the section requirements referred to in section 3.21(1). To be eligible for weekly payments, a determination is required by the Dispute Resolution Service that the injured person’s loss of earnings is likely to be of a permanent nature.

(iv)   Section 3.21(2)(b) of the Act contains the other requirements that must be met in order for an injured person who resides outside of Australia to receive weekly payments. The requirements under section 3.21(2(b) are aligned with the manner and intervals of the Motor Accident Guidelines provisions and require the injured person to establish their identity and the continuance of the loss of earnings in respect of which weekly payments are payable. The requirements of section 3.21(2)(b) do not mandate that a determination is required from the Dispute Resolution Service in order for payments to be made. As such, if the insurer is satisfied that the requirements of section 3.21(2)(b) of the Act have been met, then a payment can be made.

Is the injured person’s loss of earnings likely to be of a permanent nature?

19.   For the claimant to be eligible to weekly payments whilst he is residing outside of Australia, I am required to be satisfied that his loss of earnings is likely to be of a permanent nature.

20.   I emphasise that the wording used in section 3.21 of the Act is ‘loss of earnings’ and not ‘loss of capacity’.

21.   Loss of earnings is a defined term in Schedule 1 of the Act meaning “a loss incurred or likely to be incurred in a person’s income from personal exertion”. Loss of capacity, however, is not a defined term within the Act.

22.   The claimant’s initial submissions refer to the decision of Assessor Ruschen. Though Assessor Ruschen’s previous determination is not reproduced in its entirety, they appear to be extracted from the determination of ABO v QBE Insurance (Australia) Limited [2019] NSWDRS MR 041. Whilst I am not bound by that decision, I do find the reasoning of relevance to this dispute.

23.   At paragraph 11, Decision Maker Ruschen summarises the difference between loss of earnings and loss of capacity:

The language of section 3.21 is “loss of earnings” not “loss of capacity”. An important distinction can be made between the terms: loss of earnings is a retrospective; loss of earning capacity is prospective. Loss of earnings refers to money the Claimant has already lost as a result of an injury. On the other hand, loss of earning capacity refers to the Claimant’s reduced ability to earn money in the future. The latter (loss of capacity) is addressed in the requirements of sections 3.6, 3.7, 3.8, 3.15 and 3.16 of the Act.

24.   I agree with the reasoning of Decision Maker Ruschen on this point. The phrase ‘loss of earnings’ is retrospective in nature. Had Parliament intended on a prospective assessment, the phrase ‘loss of capacity’ or ‘loss of earning capacity’ would have been used.

25.   I now turn to the meaning of the phrase ‘likely to be of a permanent nature’. The Insurer submits that it takes no position in this regard, whereas the claimant submits that I should give the word ‘likely’ its ordinary English meaning and that the word ‘likely’ could be used interchangeably with the word ‘probably’. No submission was offered on the interpretation of the word ‘permanent’. I also note that the phrase ‘likely to be of a permanent nature’ or the terms ‘likely’ or ‘permanent’ are not defined within the Act, the Regulation or the Guidelines.

26.   I agree that the ordinary English meaning should be used in such circumstances. Section 34 of the Interpretation Act 1987 (NSW) permits the use of extrinsic materials when attempting to determine the meaning of a provision.

27.   The Macquarie Dictionary defines the terms ‘likely’ and ‘permanent’ to mean:

Likely - “1. probably or apparently going or destined (to do, be, etc). 2. seeming like truth,

fact or certainty, or reasonably to be believed or expected; probable.”

Permanent – “lasting or intended to last indefinitely; remaining unchanged; not temporary; enduring; abiding.”

28.   When these definitions are applied to and used interchangeably with the wording of Section 3.21(2)(a) of the Act, it follows that:

An injured person residing outside Australia is entitled to receive on a quarterly basis the amount of the weekly payments accruing due during the preceding quarter if the Dispute Resolution Service has determined that the injured person’s loss of earnings is probably or apparently destined to be lasting or remain unchanged in nature.

29.   The claimant submits that this test involves a retrospective and a prospective element. The retrospective element is to establish the past loss of earnings, i.e. has a past loss of earnings occurred in the past quarter? The prospective element is limited to considering whether that past loss is likely to be of a permanent nature.

30.   I am not persuaded that this is the correct method of determining the entitlement pursuant to Section 3.21(2)(a) of the Act.

31.   In ABO v QBE Insurance (Australia) Limited [2019] NSWDRS MR 041, Assessor Ruschen outlines at paragraphs 13 and 14 the approach to be taken when determining whether the injured person’s loss of earnings is likely to be of a permanent nature:

… I do not accept the test is simply whether the Claimant has (or is likely to recover) the monetary loss of earnings. In my view, the question of whether the loss of earnings is likely to be of a permanent nature requires some consideration of the temporal nature of the loss. That is, whether the loss being suffered is temporary in the sense it is likely to cease in the near future, or whether it is likely to continue for an indefinite period and can therefore be considered permanent in nature.

14. Although, in the general sense loss of earnings is a retrospective, the question in section 3.21(2)(a) is whether the loss “is likely to be of a permanent nature”. “Likely” suggests some prospective assessment is required. The phrase “of a permanent nature” also suggests something more (in the prospective sense) is required than simply whether the money has been or will be recovered. Nothing in section 3.21(2)(a) suggests the test is limited to whether the monetary loss is likely to be physically recovered. In my view, the test requires consideration as to whether the Claimant’s loss of earnings has characteristics which suggest the loss will likely be permanent, in the sense that it is not expected to change for an indefinite time.

32.   I agree with the reasoning and the test adopted by Assessor Ruschen and prefer it to that submitted by the claimant.

33.   In the context of the current case, the claimant:

(i)   Has submitted a certificate of capacity which indicates that he ‘has capacity for some type of work from 17 July 2019 to 6 December 2019 as tolerated’.

(ii)   Has also submitted a NAATI Certified translated medial report from his physiotherapist in XX, Dr Vanessa Delaguardia dated 3 December 2019, which following a description of the claimant’s injuries indicates that “he is not capable of working, standing and perform [sic] sports activities in full capacity, having limitations and great discomfort due to constant pain and oedema.”

(iii)   Has also provided a statement 3 December 2019 which details that since the accident he required two surgical operations on his motor accident injuries, and that despite 12 weeks of physiotherapy, he has not been able to return to work in his field as an event producer due to the long hours standing and frequent travel. The statement depicts that typically the claimant would work a 10-12 hour day. Upon attempting to return to work on 12/09/19, 20/10/19, 1/11/19, 19/11/19 and 24/11/19, the claimant was only able to work 4 hours on each occasion due to being in pain and suffering from a swollen foot.

34.   The insurer offers no evidence or submission to contradict the Claimant’s assertions.

35.   It is important to acknowledge that section 3.21 of the Act does not require me to undertake an assessment of the claimant’s capacity for work. The issue of capacity for work must be considered by the insurer within the context of Division 3.3 of the Act the relevant provisions of the Motor Accident Guidelines when determining if the claimant has an entitlement to weekly payments. A determination by the Dispute Resolution Service that the injured person’s loss of earnings is likely to be of a permanent nature does not preclude the insurer from assessing the claimant’s capacity for work at a later date.

36.   Based on the evidence and submissions before me, I am persuaded, on balance, that the claimant sustained a loss of earnings that is likely to be permanent in nature. There is nothing before me that indicates that the claimant’s circumstances are likely to change in the foreseeable future.

37.   I therefore determine that the claimant’s loss of earnings is likely to be of a permanent nature for the purpose of Section 3.21(2)(a) of the Act.

38.   The claimant is therefore entitled to receive weekly payments of statutory benefits whilst residing outside of Australia subject to the insurer being satisfied that Section 3.21(2)(b) has been complied with.

Legal Costs

39.   A claim for legal costs was made by the claimant pursuant to Section 8.10 of the Act in the amount of $1,644 plus GST.

40.   The insurer has agreed to pay the costs claimed.

41.   I make no finding in respect of an entitlement to legal costs due to the agreement of the parties.

Determination

My determination of the Other Matter dispute is as follows:

  • The claimant’s loss of earnings is likely to be of a permanent nature for the purpose of Section 3.21(2)(a) of the Act.
  • Effective Date: This determination takes effect on 17 December 2019.

Leigh Davidson
DRS Decision Maker, Dispute Resolution Service