Issued under Division 7.4 of the Motor Accident Injuries Act 2017

Having considered the evidence before the Commission and the submissions of the parties, I determine:

1. The reviewable decision is affirmed.
2. The claimant's pre-accident weekly earnings are assessed at $nil.

A statement setting out the reasons for the decision is included with this certificate.

1. Philip Sidebottom was involved in a motor accident on 11 September 2024. He was riding a motorbike on the "Harbour bridge freeway, near Anzac Bridge" when a vehicle to his left pulled out from the left lane knocking the claimant across the lane, onto a concrete divider and back into the traffic.
2. He was injured and made a claim for statutory benefits (including weekly income support benefits) against AAMI. AAMI has accepted liability to pay Mr Sidebottom the statutory benefits to which he is entitled.
3. A dispute has arisen in the claim about the amount of weekly statutory benefits to be paid to Mr Sidebottom. Mr Sidebottom has referred the dispute to the Personal Injury Commission (Commission) for determination.
4. The proceedings have been allocated to me to conduct the review. I have held three preliminary conferences with the representatives of the parties. At the third, on 11 April 2024 a timetable was set for the determination of the dispute and the delivery of these reasons.

General background to statutory benefits and entitlement to weekly payments

1. Mr Sidebottom's claim is governed by the provisions of the Motor Accident Injuries Act 2017 (the MAI Act). This legislation provides a scheme for the compulsory third-party insurance of all motor vehicles registered in New South Wales and a scheme of statutory benefits (under Part 3) and compensation by way of lump sum damages (under Part 4) for persons injured in motor accidents in New South Wales.
2. Statutory benefits payable by the "relevant insurer"[1] in accordance with Part 3 of the MAI Act include:

(a) weekly loss of income benefits for "earners" under Division 3.3, and

(b) treatment and care benefits under Division 3.4.

1. Section 3.6(1) provides the entitlement to the weekly loss of income benefits as follows:

"An earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits under this section during the first entitlement period."

1. Section 3.6(2) provides for the calculation of the weekly payment of statutory benefits during the first entitlement period as follows:

"... the rate of 95% of the difference between the person's pre-accident weekly earnings and the person's post-accident earning capacity (if any) or post-accident earnings, whichever is the greater..."

1. There is a minimum payment set, a maximum payment set and if additional documentation or information is required the insurer is required to pay the claimant at the minimum rate.
2. Section 3.5 defines the various entitlement periods. The first entitlement period is the first 13 weeks after the accident.
3. Sections 3.7 provides for a second entitlement period (65 weeks after the first 13 weeks) on the same basis as the first (although the rate is different) and s 3.8 provides for payments during the third entitlement period (after week 78) on the basis of a loss of earning capacity not a loss of actual earnings.

The calculation of loss of earnings and quantum of statutory benefits

1. Schedule 1 to the Act provides definitions for various words and expressions found in Division 3.3 relevant to statutory benefits for loss of earnings.
2. As weekly payments can only be paid to an earner, there is a definition of "earner" at cl 2 and that is a person who is over the age of 15 and who:

"(a) was employed or self-employed (whether or not full-time) ...

(b) before the motor accident, had entered into an arrangement (whether or not an enforceable contract) [for employment or self-employment] ... , or

(c) was, immediately before the motor accident, receiving a weekly payment or other payment in respect of loss of earnings under this Act or the Workers Compensation Act 1987."

1. Because weekly payments can only be paid to an earner who has lost earnings, at cl (1)3, the phrase "loss of earnings" is defined and explained as, "... a loss incurred or likely to be incurred in a person's income from personal exertion."
2. A person's income from personal exertion is stated in cl 3 (2) to be:

"(a) the amount that is the income of the person consisting of earnings, salaries, wages ... allowances and gratuities received in the capacity of employee or in relation to any services rendered, and

(b) the proceeds of any business carried on by the person either alone or in partnership with any other person, and

(c) any amount received as bounty or subsidy in carrying on a business."

1. As the calculation of the loss of earnings requires depends upon the claimant's "pre-accident weekly earnings", that phrase is defined and explained in cl 4 of the Schedule as follows:

"(1) Pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies.

(2) In the following cases, pre-accident weekly earnings, in relation to an earner who is injured as a result of a motor accident, means -

(a) if, on the day of the motor accident, the earner was earning continuously, but had not been earning continuously for at least 12 months - the weekly average of the gross earnings received by the earner as an earner during the period from when the earner started to earn continuously to immediately before the day of the motor accident,

(a1) if the earner was employed or self-employed during a period or periods equal to at least 26 weeks during the first year of the pre-accident period, but was not obtaining earnings from any source at any other time during the pre-accident period - the average weekly gross earnings received by the earner as an earner during the first year of the pre-accident period,

(b) if subclause (3) applies - the weekly average of the gross earnings the earner received as an earner, or could reasonably have been expected to receive, during the 12 months after the change of circumstance referred to in the subclause occurred,

(c) if the earner is an earner by reason of having entered into an arrangement with an employer or other person to undertake employment or to commence business as a self-employed person - the average weekly gross earnings that the earner could reasonably have been expected to earn, but for the injury, in employment under that arrangement.

(2A) The pre-accident period, in relation to a motor accident, is the period of 2 years immediately preceding the motor accident.

(3) This subclause applies if, during the 12 months immediately before the day of the motor accident, there was, as a result of any action taken by the earner, a significant change in his or her earnings circumstances that resulted in the earner regularly earning, or becoming entitled to earn, more on a weekly basis than he or she was earning before the change occurred.

(4) For the purposes of this clause, an earner earns continuously if he or she obtains earnings from permanent employment or from a source that, on the day of the motor accident, was likely to continue for a period of at least 6 months to provide earnings to the earner on the same, or a similar, basis to the basis on which the earnings were being provided as at that day."

1. Part 7 of the MAI Act provides for medical assessments, claims assessments and merit reviews by the Commission's Medical Assessors, Members and Merit Reviewers.
2. The dispute in issue between Mr Sidebottom and NRMA is a declared Merit Review matter pursuant to Schedule 2(1)(a) of the MAI Act that is "the amount of statutory benefits that is payable under ... Division 3.3 (Weekly payments of statutory benefits to injured persons)."

1. The claimant's application for personal injury benefits (the claim form) was dated

19 September 2024. 2. On 15 November 2024 AAMI wrote to the claimant advising that his pre-accident weekly earnings (PAWE) had been determined at $0 per week based on a report from Procare, its forensic accountant, the claimant's taxation returns and the claimant's banks statements. 3. On 15 November 2024, the claimant sought an internal review of that decision saying:[2]

"The decision not to pay me any income reimbursement is wrong. I earn a wage and work very hard for it."

"I was working 5 - 6 days a week just prior to my accident as is evidence in my bank Statement. The money is clearly going into my accounts and all my personal direct debits come out. This is not rocket science. Two previous CTP claims have been processed with no issues as all and independent reviews done as well."

1. The insurer issued its internal review decision on 29 November 2024[3] affirming the original decision. The insurer again relied on the claim form, several emails and a report from its forensic accountants. This is the reviewable decision in the current proceedings.
2. The insurer stated:

(a) the claimant was the sole director and shareholder in Dekonstruct Creating Space Pty Limited (Dekonstrukt);[4]

(b) deposits from the company into the claimant's bank account was not "income from personal exertion" because it was not salary but may be profit distribution or transactions between the claimant and the company;

(c) no salary, income or fringe benefits were declared in the company records; no tax was withheld, no superannuation contributions were made, deposits are not described as salary or wage payments, the payments were not regular fixed payments;

(d) no salary was declared in his tax returns, and

(e) a government pension was paid in the 2024 financial year.

1. The insurer also noted that the claimant's personal and work expenses were paid by the company, and it appears funds were drawn on the company bank account or holding bank account to meet personal expenses.
2. After noting the letter from the claimant's accountant and citing the definitions in the Act, the insurer cited the decision of El Ayoub v QBE Insurance[5] (El Ayoub) and says "the profit or loss (earnings) of the company do not represent your earnings."

1. Mr Sidebottom's claim form was dated 19 September 2024. He says his home address is in an inner west suburb of Sydney. He disclosed a previous injury which had occurred on 1 October 2022 identifying the claim number and other insurer (Allianz). On 15 November 2024 the claimant advised NRMA he had been involved in two previous accidents. In a message provided to the Commission on 1 April 2025, the claimant has provided the claim number and insurer (also Allianz) of the other earlier accident but no further details (such as the date of the claim or any statutory benefits paid in the claim) were provided.
2. The claimant describes the accident and lists his injuries (broken 5th finger left hand, broken ribs 3 - 8 on the left side, lacerations, puncture wounds, multiple stitches and bruising). He says he was taken to St Vincents Hospital and discharged on

17 September 2024. He says he was not suffering from any illness or injury affecting the same or similar parts of his body at the time of the accident. 3. The claimant discloses under "employment details" that he was the "manager / demolition" of Dekonstrukt earning $4,950 per week and that he was not receiving Centrelink benefits at the time.[6]

1. There is an email from the claimant to the insurer dated 3 October 2024 which says:

"BAS and notice of assessments were not a true indication of my earnings because they have obviously been prepared for taxation purposes and minimising tax where possible"

1. Mr Sidebottom also says he did not work at all from the middle of February to the beginning of June 2024 saying, "this was the very first holiday break I have had from my company and work in many years."
2. The claimant had provided the insurer with bank statements and details of his "mandatory" bills and mortgage payments saying that "All of these reports together paint the exact picture of my income".
3. The claimant sent an email to Procare (the insurer's forensic accountant) on

24 October 2024. He says he is the only owner and director and the sole person in, and working for the company. He says all money that comes into the company is earnt by him and "pays me and all my personal and business expenses". 4. He says in this email that he is a site manager and also "on the tools". He said he manages personnel, all safety reporting, budgeting, time lines, cleanliness, rubbish removal, site tidying, inductions, briefings, site walks and safety inspections. He also does labouring on the tools where necessary. 5. There is an email from the claimant to Procare dated 28 October 2024. Mr Sidebottom says he has three accounts, a company account, a holding account and a personal account. He says, "All the money [is] treated as my personal income". 6. Mr Sidebottom says if he is required to lodge reports with the Australian Taxation Office (ATO) this will take months and:

"... the result, which I have already stated will be a next to zero income for company and individual income as well. This is exactly as it has been for years deliberately so to minimise tax obligations."

1. There is an email from the claimant to the insurer's expert dated 30 October 2024 which says in answer to a question "you take drawing from Dekonstrukt which are applied to meet your monthly outgoings / obligations":

"Yes, if I need money to pay bills or for my own personal use I take whenever necessary, it is transferred to the holding account ... then transferred again to my personal account."

1. The claimant also says in this email he has not lodged his 2023 and 2024 taxation returns. The claimant's legal representative advised at one of the preliminary conferences that these taxation returns had now been lodged with the ATO. No notices of assessment have been provided.
2. Mr Sidebottom provided a signed statement dated 21 January 2025. He says:

(a) he is self-employed operating two businesses. His main business is a demolition company called Dekonstrukt Creating Space Pty Limited, and another business called Philip James Styling which is a hobby bespoke clothing and styling business [4] and [14];

(b) he described the accident at [6] - [7] and his injuries in [8];

(c) he says he has been certified unfit to work by his general practitioner (GP);

(d) before the accident he worked 5 - 6 days a week and earned at least $990 per day [15];

(e) he has two bank accounts, a business and a personal account [15];

(f) income earned by Dekonstrukt is paid into his business account and he "would transfer money to my personal account for my personal and living expenses". He says in March and April 2024 Dekonstrukt earned about $77,500 "which I transferred and, or withdrew for my personal living expenses" [16];

(g) his accountant's letter from 28 November 2024 shows he ran a viable business invoicing over $29,414 a month [17];

(h) he is the sole director of the company and "there are no other employees in the business" [18];

(i) according to his accountant his business earned income of $214,134 plus GST in the 12 months before the accident which is consistent with his expenditure of about $18,000 per month [19] which he lists at [20] and which includes his mortgage, insurance, car (and motorbike) costs, two car loans, parking, rates and utilities and monthly haircuts. He says at [21] there are other living expenses such as groceries, petrol and the basics, and

(j) his business relies upon his ability to work and as he has no capacity to work, he has received no income and cannot meet his personal expenses and is in significant financial difficulty [22].

1. Mrs Pascoe, of Licorice Accounting and Finance Solutions sent an email to the insurer's expert on 30 October 2024. She said:

"Phillip has continued to run his business ... even in times ... where he has been hired as an employee, deriving income, having tax withheld and superannuation paid by the employer.

Over the years Phillip has increased his Director's Loan, as he has privately [subsidised] the company.

Therefore, over the last two years, he has not drawn a wage as he is drawing down his director's loan, thus no PAYG withheld, nor superannuation is needed to be paid.

If this facility was not available to him, he would be drawing wages, and then the company would certainly [be liable] for PAYG Withholding and Superannuation."

1. Mrs Pascoe wrote a "to whom it may concern letter" dated 28 November 2024.
2. Mrs Pasco says her firm has been the claimant's accountant since July 2009. She says he is the sole director and by his own personal exertion has run a "viable business" which invoices on average $29,414 plus GST per month.
3. She says:

"The claimant has been able to pay himself from his company earnings, utilising cashflow, effective drawings from his director's loan to satisfy the following personal monthly debts."

1. She lists the same expenses as the claimant in his statement.
2. She says, "Mr Sidebottom has over the years built up a loan account, where he has decided to withdraw from that loan. Therefore, he is not at this time taking wages but will be in the near future, once the loan is paid back to him."
3. She also says that without the claimant's personal exertion there would be no means of paying Mr Sidebottom's personal expenses or the expenses of the company.
4. She refers to Mr Sidebottom's "agreements with the entity" being his company.
5. Mrs Pascoe wrote a further letter which is dated 18 December 2024 and is addressed to the claimant's solicitor. She says:

(a) the claimant is the sole director of the company which operates his business and "there are no other employees in the business";

(b) that it is more appropriate to look at the reduction of gross business income of the company rather than the claimant's wage;

(c) that the company earned $214,134 plus GST from 11 September 2023 to 11 September 2024;

(d) the company operated for 48 weeks in that time, which is average weekly earnings of $4,461 plus GST, and

(e) the claimant's inability to work would reduce the business income and in fact without him the business generates no income.

1. Mrs Pascoe wrote a further letter to the claimant's solicitor dated 22 April 2025 in which she says:

(a) the wages of $48,778 were paid to an employee and there are now no employees;

(b) "As a tax [effective] decision, it was decided that Mr Phillip Sidebottom draw down on a loan account whereby [the company], owed Mr Sidebottom a sum of money lent to it in his capacity as a director/shareholder of the company", and

(c) she restates the other matters, and that the reduction of gross business is the way the claimant should be compensated.

1. Paul Croft of Procare was qualified by the insurer to provide a report to the insurer. The report is provided under cover of a letter dated 5 November 2024. The insurer has relied on this report in making its PAWE decision.
2. Mr Croft confirmed he has complied with the professional requirements associated with being a chartered accountant and that he has prepared the report in accordance with the Commission's procedural directions for expert witnesses.
3. Mr Croft's conclusion was that the deposits made to the claimant's personal account are not income from personal exertion because:

(a) they are not consistent with the definition of "salary", but

(b) they may be a profit distribution or associated with transactions between the claimant and the company.

1. Mr Croft says at [24] that "salary" is "the annual sum of a fixed, recurring (age) and non-discretionary payment made on a consistent periodic basis". Mr Croft's opinion is [25] that the deposits in the accounts do not satisfy this definition because:

(a) they are not declared as salary from the company in the claimant's taxation returns for 2023 and 2024;

(b) no tax has been withheld, or superannuation contributions made in relation to these payments;

(c) the deposits are not described in a way that would indicate they are "salary" or "wage payments", and

(d) the payments are not consistent or fixed amounts and are not paid on a recurring or periodic basis.

"It appears to me possible that deposits received from the Company may be in the nature of a profit distribution or associated with transactions between the Claimant (as owner) and the Company ... on the basis of statements made by the Claimant describing the payments received from, or made by the Company, and being for the purpose of paying the Claimant's expenses."

(a) the claimant's taxation returns do not indicate the claimant received salary or wages and did not derive any other net business income [27];

(b) his work and personal expenses are paid by the Company, he draws funds from the company bank account or holding account to meet his personal expenses, no superannuation contributions are made, and no tax is paid by the company [28];

(c) the claimant's expenses paid by the company could be a fringe benefit, but they are not included in his taxation return [29], and

(d) the bank statements do not identify any deposits as "salary" or "wage", the amounts transferred between the claimant's accounts are not recurring or regular periodic payments and vary in amounts [30].

1. Mr Croft also notes there are no payments made by Allianz in these bank statements and no income declared in the claimant's 2023 or 2024 taxation returns in respect of any statutory benefits paid by Allianz in respect of the October 2022 accident.

1. Mr Sidebottom provided bank statements and a list of his monthly mandatory expenses including his mortgage, phone, a Bentley Mulsanne motor vehicle, a Landcruiser motor vehicle, home and contents insurance, utilities and haircuts and so on which total about $18,000.
2. The claimant's 2023 personal tax return declared the claimant's postal and home address to be in Glen Waverley, a suburb of Victoria. He declared no salary or wages, no allowances, earnings, tips or director's fees, no pensions and no personal services income. He also declared no interest, dividends or employee share scheme amounts. He did declare his private health insurance membership. He declared no deductions. If this return was lodged and assessed, no tax would be payable.
3. The claimant's 2024 personal tax return also declared his postal and home address to be in Glen Waverley, and again he declared no income or deductions but he did declare a tax-free government pension of $18,005. He also declared his private health insurance. He declared no deductions. If this return was lodged and assessed, no tax would be payable.
4. The claimant has provided copies of some of his bank statements both from his business account and his personal account.
5. The claimant's quarterly BAS statement for January to March 2024 declared the address of Dekonstrukt to be in Glen Waverley. This document advised the ATO that the business:

(a) had total sales of $66,033;

(b) collected GST on those sales of $5,957;

(c) spent $6,578 in GST on purchases for the business, and

(d) sought the sum of $621 from the ATO.

(a) total sales of $22,046 and non-capital purchases of $79,405;

(b) GST on sales in the sum of $2,004;

(c) the business spent $6,656 in GST on purchases, and

(d) the sum of $4,652was owed from the ATO to the business.

1. The profit and loss statement of Dekonstrukt for 1 January 2023 to 15 January 2024 show:

(a) total income of the business $371,821;

(b) the cost of sales (said to be materials, sub contactor and tip fees) of $267,253;

(c) a gross profit of $104,568 (income less the cost of sales);

(d) wage expenses of $48,778;

(e) total expenses of the business $341,647 (profit less expenses), and

(f) a loss for the business of $246,359.

1. The profit and loss statement does not indicate anything was paid in director's fees or that any amount was paid out in respect of any loan to the business from

Mr Sidebottom. 2. The profit and loss statement from June to August 2024 shows:

(a) total income of the business $71,675;

(b) the cost of sales (materials and sub contactor) of $61,374;

(c) a gross profit of $10,301 (income less the cost of sales);

(d) no wage expenses;

(e) total expenses of the business $14,008 (profit less expenses), and

(f) a loss for the business of $6,545.

1. The claimant documents the accident and his physical injuries at [3], [4] and at [8] says he has developed a psychological injury following the accident.
2. The claimant notes at [6] that he returned to part time work in March 2025 and was "paid $660 per day" and at [7] refers to a report from Dr Conrad dated 26 March 2025[7] which suggests he is able to work 20 hours a week with restrictions.
3. The claimant discloses at [9] he is in receipt of a pension from the Australian Defence Force worth $18,000 per year.
4. The claimant takes issue with the insurer's accountant's report.
5. At [17] he submits he is self-employed and has operated "a profitable business for more than 27 years".
6. The claimant refers at [18] to letters from his accountant and that the claimant has operated Dekonstrukt as a sole director and that no one else is involved in the business and submits that the amount of income generated by the company depends solely on the claimant's work in the company.
7. The claimant submits at [19] that the "business proceeds" of Dekonstrukt should be considered income from personal exertion and the loss of Dekonstrukt's income (due to the claimant's accident) should be considered the claimant's loss of earnings.
8. The claimant submits at [20] that the "income generated by the claimant" is not a dividend and is not interest, rent, superannuation benefit or sick leave entitlement and is therefore not excluded from his earnings from personal exertion.
9. The claimant submits at [21] that the case of El Ayoubi is distinguishable as it involved two people in a business, particulars had been requested by the insurer and the Merit Reviewer but never received. The claimant submits the decision refers to the Corporations Act 2001 (Cth), addresses issues of "earner" (not in issue in

Mr Sidebottom's case) and does not address the definitions or exceptions of "personal exertion" and is not binding. 10. The claimant submits at [22] and [23] that the claimant's PAWE should be calculated on the basis of the income Dekonstrukt generated ($214,134) which is $4,461 a week which is an amount over the maximum weekly benefit prescribed by s 3.9 of $3,853. 11. The claimant submits at [12]:

"In conclusion, in following the speculative reasoning of [the insurer's expert] leads to the absurd finding that there is no PAWE notwithstanding that the claimant is the only person that "goes off to work", is the person 'that is' Dekonstrukt and is person that is remunerated by those he performs work for."

1. The insurer refers in its submissions at [2.1 - 2.5] to the claim form, the emails from the claimant to the insurer and Procare and his taxation returns. The insurer at [2.6] - [2.11] relies on the report of Mr Croft. The insurer notes the claimant's statement and Mrs Pascoe's correspondence.
2. The insurer notes at [4.1] the claimant has filed no submissions and says he has not explained the basis for the amount of $3,853 or $3,568 claimed in his schedule of earnings.
3. The insurer says at [4.5] the claimant's company is a separate entity from the claimant and that the company's money is not the claimant's money until the Company passes them on. The insurer relies on three cases in the Commission at [4.6] and says at [4.7] there is no evidence that the claimant's company has passed on any money to the claimant by paying wages, director's fees or dividends.

1. The claimant's application for internal review had not provided submissions addressing the legislation or the case law. The claimant's application to the Commission for Merit Review was not accompanied by any submissions either. It was therefore not clear on what basis the claimant was submitting that the insurer's decision was not the correct or preferable decision.
2. On 24 January 2025, the parties were notified that I requested submissions from the claimant, and I directed they be filed by 31 January 2025. The claimant's legal representative requested an extension, and the time was extended to 7 February 2025. The time for the insurer's reply was extended to 17 February 2025.
3. The preliminary teleconference was held on 21 February 2025. Ms Hill for the insurer was present as was Mr Sciglitano, counsel for the claimant. At that time no submissions had been lodged by the claimant. Discussion occurred, the legislation and case law were discussed and a timetable was set for the lodgement of the claimant's submissions and any additional supporting evidence.
4. A further preliminary conference date was set for 1 April 2025. Again, Ms Hill and

Mr Sciglitano represented the parties. The claimant's submissions had not yet been filed which was in breach of the previous directions and a further timetable was set. 5. While the claimant's submissions (which were dated 6 February 2025) had been received, it should be noted that they were not received in the Commission until

10 April 2025. 6. The insurer's submissions were filed with the Commission on 6 February 2025. While the insurer reserved the right to make further submissions upon receipt of the claimant's submissions, the insurer advised the Commission on 28 April 2025 that it did not wish to make any further submissions. 7. At the final preliminary conference on 11 April 2024, the claimant's counsel suggested that I would be assisted by oral evidence from the claimant and sought a hearing in person. 8. I noted that I had a statement from the claimant, material from his accountant and detailed submissions. I asked what additional evidence or information Mr Sidebottom would be able to provide to me. The claimant's counsel advised that there was no new evidence that Mr Sidebottom was likely to provide. 9. In the timetable I set after that preliminary conference I gave the claimant the opportunity to provide additional documentary evidence and both parties the opportunity to provide additional submissions. 10. I received some additional information from the claimant but no further submissions from either party and remain of the view that the Merit Review can be conducted on the papers.

1. The claimant has sent a number of emails to the insurer and the insurer's expert and has provided a statement. I have concerns about the reliability of his evidence for the following reasons:

(a) the claimant says his address is in inner west Sydney and works in Sydney yet his tax return says he lives in Melbourne and his BAS return says the business operates out of Melbourne;

(b) the claimant said in his statement he had two accounts, a business account and a personal account. The email to Procare on 28 October 2024 suggests he had three (not two) accounts;

(c) on 24 October 2024, Mr Sidebottom told Procare that he was the only person working in the company and at paragraph [18] of his statement he said there are no employees in the business. However, the January 2023 to January 2024 profit and loss statement identifies $48,000 paid as wages and his accountant advised that was wages paid to an employee of the company;

(d) on 3 October 2024, in an email to the insurer, Mr Sidebottom says the financial documents including his tax returns "are not a true indication of my earnings". On 28 October 2024 the claimant confirms that his company and personal tax returns reflect "zero income" which is a deliberate strategy to "minimise tax";

(e) Mrs Pascoe says the business operated for 48 weeks from

11 September 2023 to September 2024 however the claimant says he took a four-month holiday from February to June 2024 which suggests the business may have been operating for much less than 48 weeks;

(f) Mr Sidebottom said in his application for internal review that he had made two claims in respect of two previous accidents and had no problem with either of them (including internal reviews) which indicates payments had been made by Allianz. The insurer's accountant cannot point to any payments from Allianz in either of the claimant's bank accounts and the claimant has provided no evidence in response suggesting Allianz has paid the claimant any benefits on the basis of a loss of earnings, and

(g) the claimant's account said the claimant has run a viable business and at paragraph 17 of the submissions the claimant says he has run a "profitable" business. In the profit and loss statement to January 2024 the company is shown as having incurred a loss of close to $250,000. In the June to August 2024 profit and loss statement the business has also run at a loss of $6,500. The evidence presented by the claimant is not of a viable or profitable business.

1. There are inconsistencies between the documents and the claimant's statement and therefore I will approach the evidence relied on by Mr Sidebottom carefully.
2. The claimant relies on a number of letters from Mrs Pascoe. She appears to be a chartered accountant but is not a forensic accountant. She has not prepared her letters or given her opinions having regard to the Commission's expert code of conduct and she has provided a number of disclaimers to her opinions. I do however accept that she has familiarity with Mr Sidebottom's financial arrangements and accept her evidence about them as his current accountant. I do not however accept her opinions as to her interpretation of the law and how it is to be applied.
3. The claimant takes issue with the report of Mr Croft saying the claimant has not been provided with the letter of instructions.
4. I note Mr Croft has provided a list of the documents he was given and refers to the request to assist the insurer with calculating the claimant's PAWE. There is no evidence before me to suggest the claimant has requested the letter of instructions or that the insurer refused to provide it. I do not consider the letter of instruction is necessary in order to undertake this Merit Review and do not propose deferring my decision to wait for it to be provided.
5. The claimant also submits that Mr Croft did not prepare the report on his own and "was assisted by members of his staff" and that their identifies are not disclosed.
6. I note the covering letter to the Procare report refers to "our findings" but the report signed off by Mr Croft refers throughout to what he has done, who he is and what his qualifications are. He has clearly stated the report contains his opinions. I note all of the emails in evidence before the Commission appear to be sent by and from Mr Croft himself. There is no indication in any of this material that he did not prepare the report on his own and that the opinions expressed in the report are not his own. I accept the evidence in this report is expert evidence from Mr Croft based on the information and documentation he had before him at the time he wrote that report.

1. The starting point in a PAWE dispute is s 3.6(1) of the MAI Act:

"An earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits under this section during the first entitlement period."

1. The insurer does not appear to dispute that the claimant has not been able to work for a period of time after the accident because of the injuries resulting from the motor accident, and the insurer does not appear to dispute that the claimant is entitled to weekly payments.
2. The parties agree that the claimant is an earner.
3. I note that the claimant would be an earner within the definition in Schedule 1, cl (2) if he was receiving weekly payments from Allianz in respect of his earlier accident.[8]
4. What is clearly in dispute between the parties is the amount of the weekly payments payable to Mr Sidebottom. In resolving such a dispute, I am required to consider:

(a) whether the claimant suffered a loss of earnings, and

(b) in calculating the loss of earnings, what is the PAWE?

What is the relevance of the corporate structure?

1. The definition of "earner applies" to both employed persons and self-employed persons. Self-employed persons may be sole traders, they may be a partner in a business, or they may run their business through a corporate structure.
2. In a number of merit review decisions referred to by the insurer including BAH v QBE Insurance (Australia) Limited,[9] El Ayoub[10] and Liu v QBE Insurance (Australia) Limited[11] Merit Reviewer Ruschen dealt with disputes about a claimant's PAWE in circumstances where the claimant ran a business through a corporate structure. She referred in all the cases to s 1.5.1 of the Cth and relied on the fact that a company is a separate entity with a "separate legal personality from the claimant" and that monies received by the Company are not monies received by the claimant unless and until they are passed onto the claimant by the company.
3. It is not disputed that the claimant is self-employed. Mr Sidebottom runs his own businesses (the demolition business and the hobby clothing business) and he runs them through a company structure. This creates a corporate entity distinct from

Mr Sidebottom who is the owner and operator of this business. 4. Statutory benefits accrue to the injured person, and an injured person is defined in s 1.4 of the Act as a person who sustains "personal or bodily" injury. A company cannot maintain a claim for statutory benefits because the corporate entity sustains no personal or bodily injury. The focus therefore is on Mr Sidebottom and his loss of earnings.

1. Sections 3.6 (1) and 3.7(1) provide that if an injured earner "suffers a total or partial loss of earnings as a result of the injury" they are entitled to weekly benefits.
2. Schedule 1, cl 3(1) explains that a loss of earnings is a loss incurred or likely to be incurred in a person's income from personal exertion.
3. There are three options provided in Schedule 1, cl(3)(2) depending upon the individual circumstances of the particular claimant as follows:

(a) "the amount that is the income of the person consisting of earnings, salaries, wages, commissions, fees, bonuses, pensions, retiring allowances and retiring gratuities, allowances and gratuities received in the capacity of employee or in relation to any services rendered";

(b) "the proceeds of any business carried on by the person either alone or in partnership with any other person", and

(c) "any amount received as bounty or subsidy in carrying on a business".

1. The first option applies to employed persons and the second to persons who are self-employed. Neither party has made any submission about the third option, Schedule 1, cl 3(2)(c) (bounties or subsidies) and there is nothing to suggest it could or would apply to Mr Sidebottom's situation. The other options are discussed below.

Has the claimant sustained a loss of earnings as an employee?

1. Mr Croft has clearly considered whether the claimant has lost earnings from personal exertion in accordance with Schedule 1, cl 3(2)(a) and expressed the opinion that the money the claimant takes out of his business is not a form of salary or wages.

Mr Sidebottom has made no submissions to the contrary. 2. Mr Sidebottom has said he has managerial duties and is also onsite and "on the tools". 3. I am not satisfied that the claimant has a loss of earnings from personal exertion in accordance with Schedule 1, cl 3(2)(a) for the following reasons:

(a) the claimant and his accountant maintain he was not an "employee" but was self-employed;

(b) the claimant is the director of the company that operates two businesses;

(c) there is no contract of employment in evidence, the claimant did not receive payslips, no tax was deducted from any payments made and no superannuation was paid to any fund on behalf of Mr Sidebottom;

(d) the wages identified in one of the profit and loss statements were not wages paid to the claimant;

(e) the claimant has not declared any wages or salary in his tax return filed with the ATO, and

(f) the bank records as analysed by Mr Croft do not indicate any regular payments or regular amounts and the claimant says he draws money out of the company as and when he needs it.

Has the claimant sustained a loss of earnings as a self-employed person?

1. The claimant appears to argue that the claimant's income from personal exertion comes within Schedule 1, cl 3(2)(b) and should be "the proceeds of any business carried on by the person either alone or in partnership with any other person". The insurer has not provided any submissions to the contrary, but Mr Croft appears to address this although he has not stated so directly.
2. The claimant argues that Mr Croft's report contains "speculative reasoning". Mr Croft has said that the deposits received in the claimant's personal bank account may possibly be profit distribution from the company or payments made in accordance with an arrangement between the claimant and the company.
3. Mrs Pascoe has referred to there being a director's loan between Mr Sidebottom and his company. If Mr Sidebottom lent money to the company to establish or "subsidise it" as she said and was drawing down on that as repayments of that loan, there would need to be a loan agreement between the company and Mr Sidebottom, the loan would appear as an asset on the company's balance sheet and there would be a director's loan account recording the payments made to Mr Sidebottom. No evidence has been presented by the claimant to support the existence of this loan, the terms of it or the way it has been treated in the company's balance sheet, the profit and loss statement and the company's tax returns.
4. Mr Croft's "speculation" concerning there being a profit distribution is reasonable bearing in mind his report shows he has been given no documentation concerning the director's loan and had not been provided with the profit and loss statements, no company documents or company tax returns. The "speculation" is also reasonable bearing in mind the claimant's business is not generating a profit and is in fact running at a loss and the profit and loss statement does not include any reference to payments made to Mr Sidebottom or any loan repayments.
5. There is, as has been stated, no dispute that Mr Sidebottom is self-employed. He says, and his accountant supports him, that what the company earns is what he earns, that he takes what he needs from what the company earns, when he needs it.
6. On the basis of this evidence, any loss of earnings experienced by Mr Sidebottom must be based on Schedule 1, cl 3(2)(b) and is a loss related to "the proceeds of any business carried on by the person either alone or in partnership with any other person".

How is that loss of earnings to be calculated - what is the claimant's PAWE?

1. An injured person's loss of earnings which forms the basis of the weekly payment of statutory benefit is determined by considering the claimant's PAWE. This is defined and explained in Schedule 1, cl 4(1) and is:

"... the weekly average of the gross earnings received by the earner as an earner during the 12 months immediately before the day on which the motor accident occurred, unless subclause (2) applies."

1. I have received no submissions as to whether any of the options in cl 4(2) may or may not apply.
2. I do not believe that cl 4(2)(a) applies. The evidence from the claimant and his accountant is that he has been in business operating his company for many years and that the four months in which he or his company did not generate sales or "earn" any income was because of a holiday he took (as the owner of the business) from February to June. While he may not have been physically working in the business from February to June 2024, Mr Sidebottom remained as the sole owner and director of the business and was therefore "earning continuously" within the meaning of cl 4(4) in the 12 months before the accident.
3. Clause 4(2)(1a) does not apply because there is no evidence that in the two years (104 weeks) before the accident (the pre-accident period) the claimant only worked for 26 weeks and obtained no earnings from any source in the other 78 weeks.
4. Clause 4(2)(b) does not apply because it is clear that cl 4(3) does not apply. While there may have been a significant change in the claimant's circumstances (the holiday from February to June 2024) this did not result in the claimant (or his company) earning more. Therefore cl 4(2)(b) does not apply.
5. It is clear that cl 4(2)(c) does not apply as there is no evidence of the claimant entering into any arrangement with any employer or other person to commence new employment or start a new business.
6. As none of the options in cl 4(2) apply, the claimant's loss of earnings must be calculated in accordance with Schedule 1, cl 4(1) which means "the weekly average of the gross earnings received ... during the 12 months immediately before" the date of the accident.

What does "during the 12 months" before the motor accident mean?

1. The claimant relies on the opinion expressed by Mrs Pascoe (on 18 December 2024) that the company operated for 48 weeks and not 52 and she calculates the claimant's loss (adopted by the claimant in his submissions) by dividing the income of the business in that 48-week period $214,134 by 48 weeks to arrive at her figure of $4,461.
2. In Allianz Australia Insurance Limited v Shahmiri[12] it was held that the meaning of "earnings" (in the context of earnings as an earner) is not defined in the MAI Act and cannot be extrapolated from the definition of "loss of earnings". Harrison Ass J found the claimant's earnings for the whole of the 12 months before the accident was to be divided by 52 even though Mr Shahmiri did not work for 23 of those weeks because of COVID-19.
3. Mrs Pascoe's approach is therefore not, at law, correct and she should have divided the total figure by 52 weeks which generates the weekly average of $4,117.
4. The claimant has submitted that the figure calculated by Mrs Pascoe is over the maximum amount provided for in s 3.9 of the Act and has limited his claim to that maximum amount which he says is the sum of $3,853.
5. The claimant is not correct because s 3.9(2)-(7) provides for the maximum amount to be indexed every year. The maximum amount on 1 December 2017 when the MAI Act was proclaimed was the sum of $3,853 but it is currently, from 1 October 2024 the sum of $4,835. The claimant could therefore be entitled to statutory benefits in the sum of $4,117 being the earnings of the company (in the 12 months before the accident) divided by 52 weeks.

What does "gross earnings received by the earner as an earner" mean?

1. In Insurance Australia Limited t/as NRMA Insurance v Iskander,[13] a Merit Review Panel determined that, in the case of a business owner and operator that:

"... the income from personal exertion refers to the claimant's share of the proceeds of the business, not the entire proceeds of the business without any deductions."

1. That claimant's PAWE was then calculated on the earnings of the business less the expenses of that business. Mr Iskander operated his business as a sole trader not as a corporation.
2. The parties' attention was drawn to the Panel decision in Iskander at the 11 April 2025 preliminary conference report as stated in the report issued to the parties after that preliminary conference. I have received no submissions from the claimant in relation to the Iskander case and response to the matters raised in the preliminary conference report.
3. In my view, a self-employed person's loss of earnings should not differ or vary according to the type of structure adopted for their business. If two business earn the same "income", the owner, operator and sole trader should receive the same statutory benefits as the owner, operator and director of the business. It is their share of the proceeds of the business that forms the basis of their statutory benefits and their share of the proceedings of the business should be interpreted in the same way. Therefore, adopting the reasoning from Iskander, Mr Sidebottom's income from his personal exertion refers to his share of the proceeds of the business less expenses of that business and not the entire proceeds of the business without any deductions.

Are the monies taken out of the business to be taken into account?

1. I note that Mrs Pascoe has not provided any work sheet or justification for her figure of the income of the company being $214,134 plus GST. The claimant has not provided any calculations of his own for this figure. Mrs Pascoe says this sum is the earnings of the company for September 2023 to September 2024. The profit and loss statements provided by the claimant are for January 2023 to January 2024 and from June 2024 to August 2024. It would appear from her letters and emails that the figure of $214,134 (plus GST) is the gross earnings (sales) of the business before the cost of those sales or expenses associated with those sales are deducted.
2. The claimant has provided to the insurer, the insurer's expert and his own accountant a list of his regular monthly expenses and says he also incurs expenses associated with living (such as groceries and petrol). The claimant has provided his business bank accounts which shows that money is being transferred to the claimant's personal bank account. The claimant has provided statements from his personal bank account which support his claimed pattern of spending. While it is clear where the money comes from, (in terms of the bank accounts) it is not clear to me whether the money spent by the claimant on his personal and living expenses is proceeds from the company within the meaning of the legislation.
3. The claimant has said that he treats the income of the company as his own income and takes from the company bank account what he wants, when he needs it, to pay for his personal expenses as well as the business expenses.
4. The claimant's personal and living expenses obviously do not appear on the profit and loss statement of the company because they are not business expenses. The claimant's taxation returns suggest he receives no money from the company by way of wages, dividends, distribution of profit or for services because he declares no income at all in his tax returns. Mr Sidebottom has estimated he spends about $18,000 per month on personal recurring expenses and on top of that, living expenses such as groceries and fuel which he has not estimated and he cites this as the evidentiary basis for his loss of earnings.
5. The business expenses for the year January 2023 to February 2024 total $341,647 according to the profit and loss statement. If, in that same period (January 2023 to February 2024) the claimant was taking $18,000 out of the company to pay for his personal and living expenses (the sum of $216,000 for the year), the total income of the company should be at least $557,647. The company would need to earn that much in sales in order for it to pay both the expenses of the business and the claimant's personal and living expenses.
6. The total earnings of the company during that period however are stated to be only $371,821 and out of that is deducted the cost of sales ($267,253) and the expenses of the company ($341,647) resulting in a loss to the company of $246,359. If the company operates at a loss, then there is no money "left over" for the claimant to take out and spend on his personal and living expenses. There is no evidence in the company documents that appears to explain how the claimant's living and personal expenses could be funded by sales of only $371,821.
7. The report of Mr Croft says what the claimant takes out of the company may be a distribution to him from the company or payments made pursuant to some agreement (such as a director's loan) from the company. If what the claimant takes out of the company is a distribution of profits from the company, it might be expected to be disclosed by the claimant as income in his taxation returns and it is not (presumably because there, on paper, no profit and therefore nothing to distribute).
8. Mrs Pascoe suggests there may be a director's loan, and the claimant has been drawing down from it, however neither she nor the claimant have provided any evidence as to the terms and conditions of this loan or provided copies of the director's loan account, the company balance sheet or its taxation returns. If the payments made to the claimant are the repayment by the company to him of a loan of money made by him to that company, it is not clear whether this should be treated as earnings from his personal exertion because the loan would need to be repaid whether the claimant was exerting himself in the business or not.
9. If the claimant's personal and living expenses are being paid out of monies earned by the company, further evidence and explanation of the corporate structure and its operations are required in my view to explain how the company can afford to pay the claimant's living and personal expenses in the light of the stated level of its earnings and the stated level of its loss. In the absence of such explanation, it could be concluded the company is earning more than is disclosed or there is some other (undisclosed) source of funds from which the claimant is paying his living and personal expenses.

What are the proceeds of the Dekonstrukt businesses?

1. If the proceeds of the Dekonstrukt business are to be used as the basis for the claimant's PAWE then the Iskander case suggests it is the earnings of Dekonstrukt less the expenses of Dekonstrukt that must be considered. Mrs Pascoe has based her calculation on the gross earnings of the business and has not taken into account the cost of sales or the expenses of the business.
2. Two profit and loss statements of the claimant's business are in evidence before the Commission. In both documents, the expenses of the business are greater than the income of the business and the business has run at a loss.
3. If the claimant's loss of earnings is based on his share of the proceeds of the business in the year before the accident, then he has no loss of earnings because the business appears to have no proceeds (after expenses) to share with the claimant for the 12 months before the accident. Mr Sidebottom's PAWE would therefore be calculated as $nil.

1. The current documentary evidence does not satisfy me that the money the claimant is taking out of the business should be treated as proceeds from the business within the meaning of Schedule 1, cl 3(2)(b). The claimant has not established that he personally has sustained a loss of earnings based on the lost proceeds from a business.
2. It may be that the claimant can provide further evidence to the insurer and that the insurer will then obtain a further report from Mr Croft to explain how that loan account is being treated in the books and records of the business and presented to federal government agencies. Mr Croft may also be able to explain how the company can operate at a loss yet fund Mr Sidebottom's personal and living expenses.
3. In the light of the delays that have already occurred in this matter I do not propose to defer to await this material. The claimant may, should he choose, marshal the additional evidence and seek a further decision from the insurer before referring any further dispute to the Commission.
4. I am satisfied on the basis of the information before me that the insurer's decision concerning the claimant's PAWE is currently the correct and preferable decision. I affirm the decision made by AAMI on 28 November 2024 and that the claimant's PAWE is $nil.
5. In terms of costs, the claimant makes no claim for the costs of his counsel and solicitor. I note a dispute about the amount of the claimant's statutory benefits is not a declared merit review matter in accordance with Schedule 1(1) of the Motor Accident Regulation 2017 and therefore no costs would be payable under the Regulation had Mr Sidebottom made a claim for costs.

[1] The "relevant insurer" is determined in accordance with s 3.2 of the MAI Act.

[4] There are various spellings of the name of the company in the documents. I have not been provided with any formal documents from the company and have adopted the name provided by the claimant in his claim form "Dekonstrukt Creating Space" through these reasons.

[5] [2022] NSWPIC MR 66.

[6] The question posed by the claim form is specific to Centrelink benefits not other pensions.

[7] A copy of this report cannot be located in the documentation provided.

[10] [2022] NSWPIC MR 66.

[11] [2024] NSWPIC MR 65.

[12] [2024] NSWSC 481.

[13] [2024] NSWPICMRP 5.