Resolution Life Australasia Limited v Mitchell [2024] ALL FCA 310
On 28 March 2024, Justice Wigney of the Federal Court delivered a decision which was critical of the manner in which the Australian Financial Complaints Authority (AFCA) had dealt with a complaint lodged by one Albertus Mitchell in respect of his entitlement to payment of benefits under an income protection policy of insurance, secondary to membership of a superannuation fund connected with his employment.
Resolution Life was the owner of a Group Superannuation Policy with AMP Superannuation Ltd, in its capacity as trustee of the AMP Superannuation Savings Trust. Employees of employers who participated in superannuation plans that were part of the Trust could apply for and be offered insurance under the Policy. Nova was a participating employer in one of those plans, being the Defence Contractors Superannuation Plan, (‘the Plan’).
History
Mr Mitchell commenced employment with the Department of Defence in October 2006 and was dismissed in October 2009. In December 2009 he lodged a workers compensation claim alleging he had suffered psychiatric injury in the course of his employment and subsequent dismissal. In 2011 Comcare accepted that it was liable to make compensation payments to him.
Following a medical review of his condition in January 2016, Comcare decided that Mr Mitchell was no longer entitled to compensation and his payments were stopped.
An internal review of Comcare’s decision affirmed the initial determination, and shortly after that Mr Mitchell lodged an application for review of the determination lodged with the AAT.
In the meantime, on 23 May 2016 Mr Mitchell commenced employment with Nova. His employment contract stated that employer funded superannuation contributions would be made into a fund nominated by Mr Mitchell or, failing such nomination, into Nova’s default superannuation fund. The employment contract also stated that Mr Mitchell’s continuing employment with Nova was subject to him “continuing to satisfy the Australian Department of Defence security requirements whenever required”. On 24 May 2016, Nova requested the Department to reactivate Mr Mitchell’s security clearance. On 14 June 2016 the Department advised Mr Mitchell that Nova’s request had been rejected because his last security clearance process had been conducted in 2003 and he had not held any level of security clearance since October 2009; that period was said to exceed the time allowed for a security clearance to be reactivated without a “fullvetting process”.
The Department advised Mr Mitchell that it had sent him a link to enable him to complete the paperwork for a security assessment, but he did not do so. Instead, he took sick leave on 15 and 16 June and on 17 June 2016 he sent a letter to Nova, claiming that the Department was “interfering” with his “re-employment with Nova Systems” by “blocking” his security clearance and he therefore would not be able to obtain the clearance. He also claimed that his inability to get a security clearance had aggravated his “condition” to the point that he was unfit to work and would not be returning to work.
The period during which Mr Mitchell was employed with Nova was just over three weeks from 23 May 2016 to 17 June 2016.
During his brief period of employment with Nova, Mr Mitchell did not nominate his own superannuation fund; as a result “employer funded superannuation payments” were to be made into Nova’s default superannuation fund. However, Nova did not submit an application for Mr Mitchell to become part of the Plan until 26 July 2016, over a month after Mr Mitchell’s employment had ceased.
On the next day, the Trustee sent a “welcome” letter to Mr Mitchell which indicated that the Trustee had “set up” Mr Mitchell’s superannuation account “as of 23 May 2016”, i.e., the date Mr Mitchell’s employment with Nova had commenced. The Trustee’s letter was accompanied by information about the Plan. That information included information concerning the insurance cover that was “automatically” provided as part of the Plan if the eligibility requirements were met by the member.
On 4 November 2016, the AAT handed down its decision, setting aside Comcare’s decision and determining that Mr Mitchell continued to be entitled to compensation from Comcare in accordance with its original determination of 2011.
Comcare then wrote to Mr Mitchell and provided him with the details of the periods of “compensation leave and incapacity payments (compensation amounts)” that Comcare had determined he was entitled to. The compensation periods commenced on 27 January 2016 and ended on 17 May 2017. For the period 25 April 2016 to 30 June 2016, (which covered the brief period that Mr Mitchell was employed at Nova), Comcare determined Mitchell was entitled to receive compensation totaling $14,338.28. Comcare’s letter also informed Mr Mitchell that he was required to advise Comcare of all employment undertaken by him and any superannuation payments received.
On 3 June 2018, almost 18 months after the AAT’s decision, Mr Mitchell lodged a claim under the Policy for a total and permanent disablement benefit and temporary salary continuance, claiming that he suffered from a “mixed adjustment disorder with severe anxiety and depression”. Details of Mr Mitchell’s employment with the Department and Nova were provided, but it was stated he was no longer able to work.
On 20 November 2019, the insurer wrote to Mr Mitchell and informed him that he was not entitled to receive any payment of benefits under the Policy, stating that for him to be entitled to benefits, it was necessary for him to be entitled to “Automatic Cover” as defined, noting that the terms of the Policy were such that Automatic Cover only applied to employees who, inter alia, were “at work” on the date that the application for cover was made. The definition of “at work” included that the employee was not “in receipt of or entitled to claim income support benefits from any source”. The letter went on to refer to the AAT’s decision that Mr Mitchell continued to be entitled to receive compensation from Comcare, and that following the AAT’s decision, Comcare had retrospectively paid Mr Mitchell benefits for the period 23 May 2016 to 17 June 2016, when he was employed with Nova. Mr Mitchell requested an internal review of the Insurer’s decision to reject his claim and on 23 October 2020 he was informed that the Insurer’s initial decision was Insurer confirmed, on the basis of reasoning essentially the same as the reasoning for the original decision.
On 6 November 2020 Mr Mitchell submitted a complaint to AFCA. AFCA determined the complaint favourably to Mr Mitchell and adversely to the Insurer and the Trustee.
The Policy
The terms of the Policy were set out in an Amending Deed between the Trustee and the Insurer executed on 28 April 2015.
Clause 1.1 of Schedule 1 provided, in effect, that the Insurer and the Trustee would agree on the types of insurance cover that will be available to “eligible persons”, which included total and permanent disablement cover (TPD Cover) and temporary salary continuance cover (TSC Cover), with the definition of “eligible person” appearing in clause 11 of Schedule 1.
Clause 1.4(a)(vi)(a) and (b) of Schedule 1 provided, in effect, that the Trustee was obliged to advise the Insurer of information material to the granting of Automatic Cover under clause 2.1 of Schedule 1 and that, after considering that information, the Insurer would decide whether, and if, on what terms, it would issue insurance cover in respect of an eligible person.
Clauses 2 and 3 of Schedule 1 defined four types of insurance cover that may be available and clause 2 dealt with automatic cover. Clause 3 dealt with default cover, additional cover, and interim cover.
Under the terms of a Policy a person may be entitled to Automatic Cover without having to go through any underwriting processes; but if a person was not eligible for Automatic Cover, they may be able to obtain default cover (and additional cover and interim cover) but that would generally require an underwriting process.
The critical question in Mr Mitchell’s case was whether he was eligible for or entitled to Automatic Cover.
Automatic Cover?
Clause 2.2 of Schedule 1 was entitled “When Automatic Cover Applies”. By virtue of paragraphs (a) and (b) Automatic Cover would only apply in respect of eligible employees who applied, or for whom the Trustee applied, for default cover within three months of first becoming eligible for cover, and who, relevantly were “at work” on the date that the application was made.
The definition of “at work” meant
“In respect of an employee in the service of the participating employer, actively performing all that employee’s normal duties of his … usual occupation during that employee’s normal work hours and not being in receipt of or entitled to claim income support benefits from any source including, without limitation, Workers’ Compensation, statutory transport accident benefits and disability income benefits …”.
Clause 2.3 of Schedule 1 provided that employees of a participating employer who were eligible for Automatic Cover as identified in clause 2.2 would be eligible for Automatic Cover “provided all of the criteria set by [the Insurer] for eligibility for Automatic Cover are met and continue to be met”.
Accordingly, the Insurer was only liable to pay Mr Mitchell a TPD benefit if he was an “insured person” because he was an eligible person who had insurance cover under Schedule 1. Mr Mitchell was only an eligible person with insurance cover if he met the eligibility criteria for Automatic Cover under clause 2.2 of Schedule 1. Mr Mitchell only met the eligibility criteria if, relevantly, he was “at work” (as defined) on the date that an application for Default Cover was made by him or the Trustee on his behalf.
His Honour went on to describe the legislative basis of the formation of AFCA and its Complaint Resolution Rules which set out how AFCA conducts and resolves complaints.
Rule A.2.1(c)(ii) provides that AFCA will consider complaints submitted to it in a manner which provides procedural fairness to the parties.
Rule A.12.2 provides that AFCA must inform the parties to the complaint that they can either accept the preliminary assessment or request a determination.
On 6 November 2020, Mr Mitchell submitted his complaint to AFCA and on 19 January 2021 AFCA joined the Insurer to the complaint. AFCA sent letters to both Mr Mitchell’s solicitor and the Insurer setting out its understanding of the complaint and indicating that the issues it would investigate were whether Mr Mitchell met the “at work” definition in the policy and whether the Insurer was entitled to decline the claim. The letters also requested information or submissions from Mr Mitchell and the Insurer.
Both the Insurer and Mr Mitchell’s solicitor provided submissions. On 4 March 2021 AFCA conducted a Conciliation Conference by telephone which did not resolve the matter. AFCA then advised the parties it would proceed with the “next step” which involved the provision of a preliminary assessment.
On 8 June 2021, AFCA advised the parties that it had made a “recommendation”, in relation to the complaint to the effect that Mr Mitchell did not meet the “at work” definition in the policy and the decision to decline the claim was fair and reasonable; AFCA’s recommendation was therefore “in favour of the Trustee and the Insurer” and no further action was required.
AFCA also provided reasons for its “recommendation”.
Mr Mitchell’s solicitor advised AFCA that Mr Mitchell did not accept its recommendation and requested AFCA to issue a determination.
On 21 June 2021, AFCA wrote to both Mr Mitchell’s solicitor and the Insurer and advised that in light of Mr Mitchell’s rejection of AFCA’s recommendation, AFCA would proceed to determine the complaint. AFCA’s letters invited Mr Mitchell and the Insurer to provide any further information or submissions. Neither party did so.
Nothing occurred for some months, then AFCA sent an email to the Insurer requesting a copy of the Policy, which was provided. AFCA then sent a copy of the Policy to Mr Mitchell’s solicitor and invited him to make any submissions concerning the Policy. Mr Mitchell’s solicitor emailed AFCA advising he did not wish to make any further submissions concerning the Policy, attaching a copy of a decision of the AAT of 17 September 2021, and asserting that the decision indicated that Mr Mitchell was “not entitled to workers compensation in any event”.
AFCA contacted the Trustee and requested additional “comments and documents” on the topic of whether Mr Mitchell satisfied the “first part” of the “at work” definition. The Trustee responded to AFCA’s request submitting that Mr Mitchell did not meet the first part of the “at work” definition because while he was employed by NOVA during the period 23 May 2016 to 17 June 2016, the fact that he had not satisfied the department’s “security requirements” which was a condition of his employment meant he would have been prevented performing all the “normal duties of his usual occupation during his normal work hours”; the letter also reiterated the Trustee’s submission that Mr Mitchell did not meet the second part of the “at work” definition because he was entitled to receive Comcare benefits during the period 23 May 2016 to 17 June 2016. The Trustee’s letter asserted that the AAT decision forwarded to AFCA by Mr Mitchell’s solicitor, was irrelevant.
AFCA then emailed Mr Mitchell’s solicitor attaching a copy of the Trustee’s submission and requesting Mr Mitchell provide submissions concerning the question whether he met the first part of the “at work” definition. Mr Mitchell’s solicitor responded indicating that while employed by NOVA, Mr Mitchell had performed his “normal duties with that employer as a system engineer.”
Shortly thereafter, it seemed AFCA twigged to the importance of the date on which Mr Mitchell was required to meet the “at work” definition, having not previously adverted to the issue at all.
AFCA emailed the Trustee and the Insurer noting that clause 2.2(b) of the policy required the “member” to be “at work” as defined and “on the date the application for cover was made.” AFCA stated that it had not been provided with any evidence as to the date the application for cover was made and requested the Trustee and the Insurer to confirm the date the application for cover was made and provide all supporting evidence.
The Trustee provided its response to AFCA’s query by letter stating that NOVA submitted an application to the Trustee for Mr Mitchell to become a member of the plan on 26 July 2016; it followed that the relevant “application” for the purposes of clause 2.2(b) was made on 26 July 2022, i.e., after Mr Mitchell’s employment with NOVA has ceased. It submitted that Mr Mitchell was not relevantly “at work” as defined on that date.
AFCA Determination
On 16 March 2022, AFCA made its determination in respect of Mr Mitchell’s complaint, essentially that the decision by the Insurer to decline Mr Mitchell’s TPD claim and the Trustee’s decision to agree with the Insurer’s decision were unfair and unreasonable. AFCA set aside those decisions and remitted them, with certain directions.
However, AFCA’s reasons hinged on two findings that had not been the subject of any of the parties’ submissions and had not been adverted to at all in any of the communications between AFCA and the parties or, perhaps more significantly, in AFCA’s preliminary assessment or recommendation.
The first finding was that it would be a breach of the Insurer’s duty of utmost good faith to decline Mr Mitchell’s claim because NOVA did not apply for cover on its behalf until after he ceased employment. Mr Mitchell had not referred to the duty of utmost good faith in any of his submissions nor had AFCA ever identified that as an issue or potential issue.
The second finding was that Mr Mitchell was not entitled to Comcare payments during the period 23 May to 17 June 2016 because when the formula in s.19(2) of the Compensation Act was applied to figures derived from Comcare’s payment summary and one of Mr Mitchell’s payslips from NOVA, Comcare’s “liability” to Mr Mitchell was nil. Mr Mitchell had not made any submission concerning any calculation pursuant to s.19(2) based on his payslip, nor had AFCA identified that as an issue for consideration in respect of the complaint.
In making these two findings, AFCA appeared to accept and proceed on the basis that no application for cover by or on behalf of Mr Mitchell was made for the purposes of clause 2.2(b) of the policy until 26 July 2016, i.e., after Mr Mitchell had ceased employment with NOVA. It followed that he did not meet the “at work” definition in the policy and did not meet the eligibility criteria for Automatic Cover in clause 2.2(b). Accordingly, he was not eligible for or entitled to Automatic Cover.
However, AFCA went on to find that in declining Mr Mitchell’s claim, the Insurer had not acted in accordance with its duty of utmost good faith.
In relation to the second finding, AFCA accepted that the AAT’s decision in November 2016 reinstated Comcare’s initial determination that it was liable for a compensable injury sustained by Mr Mitchell when he was employed at the Department. AFCA also accepted that following the AAT’s decision, Comcare paid workers compensation benefits to Mr Mitchell, including in respect of the period when he was employed at NOVA. However, AFCA concluded that Mr Mitchell was not in receipt of Comcare benefits during the period he was employed at NOVA because the benefits were not actually paid until 23 November 2016. AFCA also found that Mr Mitchell was not entitled to receive any Comcare benefit during the period he was employed at NOVA. That conclusion was based on AFCA’s own calculation of the benefits that Comcare was liable to pay Mr Mitchell having regard to the formula in s.19(2) of the Act.
AFCA was not persuaded by the Trustee’s submission that Mr Mitchell did not meet the first part of the “at work” definition because the fact that he had not obtained security clearance precluded him from performing his normal duties.
Having made these findings, AFCA concluded that the “appropriate remedy” was to “set aside and remit the decision” to the Trustee and the Insurer with three directions including that the Trustee and the Insurer were to assess Mr Mitchell’s total and permanent disablement claim within a reasonable time on the basis he met the eligibility criteria for a total and permanent disablement benefit.
An appeal
The Insurer appealed, identifying five errors of law made by AFCA, as follows:
- AFCA either found or assumed that Mr Mitchell was eligible for or entitled to Automatic Cover under the policy in circumstances where upon a proper construction of the policy he was not eligible for cover on the uncontested or undisputed facts.
- In finding s.13 of the Insurance Contracts Act (ICA) applied and the Insurer had acted in breach of its duty of utmost good faith, AFCA denied the Insurer procedural fairness because it did not give the Insurer any opportunity to adduce evidence or make submissions regarding the application of s.13.
- AFCA erred in law in finding the Insurer owed Mr Mitchell a duty of utmost good faith by reason of s.13, submitting it could only owe Mr Mitchell a duty of good faith pursuant to s.13 if he was a party to the Policy, which he was not because he was never entitled to any cover.
- AFCA denied the Insurer procedural fairness in finding that Comcare was not liable to pay workers compensation benefits to Mr Mitchell during the period he was employed at NOVA, because the Insurer was never given an opportunity to adduce evidence or make submissions in respect of AFCA’s calculation pursuant to s.19(2) of the Compensation Act, which led it to conclude that Comcare was not liable to pay any workers compensation benefits to Mr Mitchell in respect of the period he was employed at NOVA and that the payments that were made were made in error.
- AFCA erred in law in finding that Mr Mitchell met the second part of the “at work” definition because he was not in receipt of or entitled to claim workers compensation benefits from Comcare at the time the application for cover was made on 26 July 2016. The effect of the AAT’s decision in November 2016 was that Mr Mitchell was in receipt of or entitled to claim benefits from Comcare on that day.
Considering firstly questions 2 and 4, His Honour noted that AFCA’s own Rules required it to consider complaints in a manner which provides procedural fairness to the parties and that this would be implied in any event, given the nature of AFCA’s complaint resolution processes and the determinations AFCA may make. He noted that the relevant principles in respect of procedural fairness were well established and may be shortly stated, referring to Szbel v Minister for Immigration &c (2006) 228 CLR 152, in which the High Court approved a statement made by the Full Court in Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576.
The Judge considered there was no doubt that AFCA’s finding that s.13 of the ICA applied to the circumstances of Mr Mitchell’s complaint was a critical finding in respect of its determination of the complaint and noted that neither Mr Mitchell’s complaint nor submissions made any reference at all to the application or potential application of s.13. Further, AFCA never identified to the Insurer or Trustee that the application of that provision was an issue which may be important to its determination, and it could not be said that the issue concerning the potential application of this section to the complaint was apparent from the nature of the complaint; further, AFCA said nothing at all about the application of s.13 in its preliminary assessment and recommendation or in any of its communications with the parties.
Accordingly, His Honour found that AFCA’s reliance on s.13 in those circumstances was fundamentally unfair and constituted a denial of procedural fairness. It was a critical issue on the determination of the complaint and procedural fairness required AFCA to identify that critical issue and give the parties (including the Insurer) an opportunity to be heard. There was no doubt that had the Insurer been put on notice by AFCA that the potential application of s.13 was a critical issue, the Insurer would have made submissions concerning that issue. His Honour considered that had the Insurer been given the opportunity to make submissions concerning s.13, there was a realistic possibility that a different decision could have been made, citing MZAPC v Minister for Immigration &c (2022) 273 CLR 506. AFCA’s denial of procedural fairness was material and constituted a jurisdictional error.
As to ground 4, none of the communications emanating from Mr Mitchell or AFCA following AFCA’s preliminary assessment suggested that the precise calculation pursuant to s.19(2) of the Comcare benefits Mr Mitchell was entitled to under the Compensation Act, was an issue, let alone a critical issue. In those circumstances the Insurer was entitled to proceed on the basis it was not required to address that issue in its submissions.
Accordingly, it was found that AFCA denied the Insurer procedural fairness when it made its determination based, in part, on its own calculation (purportedly pursuant to s.19(2)) of the amount that Comcare was liable to pay Mr Mitchell while he was employed by NOVA. In any event, there was good reason to believe that AFCA’s calculation was erroneous. Accordingly, there was a realistic possibility that there could have been a different outcome if the Insurer had been given the opportunity to make submissions in relation to that issue.
The conclusion that AFCA denied the Insurer procedural fairness in material respects meant that its determination was set aside, and the complaint remitted to AFCA to be determined in accordance with law.
His Honour went on to address questions 1, 3 and 5 together. Whilst they related to different aspects of AFCA’s reasoning for determining the complaint in favour of Mr Mitchell, they each raised the central question of whether AFCA misconstrued the terms of the Policy or made a finding which was inconsistent with the terms of the Policy. Questions 1 and 3 also raised the question whether AFCA misconstrued or misapplied s.13 of the ICA.
His Honour considered there were fundamental problems with AFCA’s reasoning in finding that s.13 applied to the circumstances of Mr Mitchell’s case and entitled it to treat the application as if had been made on 23 May 2016, i.e. the date upon Mr Mitchell had commenced employment with NOVA, stating that s.13 can only apply between parties to a contract of insurance. In Mr Mitchell’s case the Insurer only owed him a duty of upmost good faith if he was a party to the Policy, and Mr Mitchell could only be said to have been a party to the Policy (which was a deed between the Trustee and the Insurer) if he was taken to be a party by reason of s.13(3), i.e. if he was a third party beneficiary under the policy, noting the term “third party beneficiary” is defined by s.11 of the ICA.
The question whether Mr Mitchell was a third party beneficiary under the policy was, in effect, the central issue in the complaint. He could only have been a third party beneficiary under the policy if he had insurance cover under the policy and he could only have had insurance cover under the policy if he met the eligibility criteria for Automatic Cover in clause 2.2(b) of the policy.
The Court found Mr Mitchell did not and could not meet the eligibility criteria of the policy on the uncontested and undisputed facts as found by AFCA. This was because the application for cover which was made on Mr Mitchell’s behalf was not made until after he had ceased working for NOVA so he could not satisfy the “at work” definition on that date as required by the policy because, among other things, he was not in the employ of NOVA at that date.
AFCA had construed or applied s.13 in such a way as to effectively deem the relevant application as having made at or around the time Mr Mitchell commenced his employment with NOVA even though, in fact, it was made well after the employment had ceased.
His Honour found AFCA’s reasoning to be hopelessly circular, involving an erroneous interpretation of s.13. Mr Mitchell was not a party to the Policy and was not a third party beneficiary, stating that s.13 could not be applied so as to effectively deem Mr Mitchell to be a party to the policy so that s.13 could apply to him and the Insurer as parties to the policy.
AFCA’s reasoning also misconstrued the terms of the policy in effectively rewriting the terms.
Clause 2.2(b) provided, in effect, that to be eligible for Automatic Cover, a person must be “at work” as defined on the date that the application for cover was made by or on behalf of the person. Noting that s.1055(7)(c) of the Corporations Act relevantly provides that AFCA must not make a determination of a superannuation complaint that would be contrary to the terms of the contract of insurance, AFCA’s reasoning and finding was contrary to the policy because it essentially involved a rewriting of clause 2.2(b).
AFCA’s reasoning largely relied on a finding that was unsupported by any evidence and was not open on the material before it. AFCA’s reasoning that in dealing with Mr Mitchell’s claim, the Insurer breached its duty of utmost good faith because it “back dated” Mr Mitchell’s cover and premiums to 23 May 2016, and then later said the application for cover was not made until 23 July 2016; however, there was no evidence the insurer did any such thing.
The “welcome letter” of 27 July 2016 from the Trustee (not the Insurer) stated that it had “set up” Mr Mitchell’s superannuation account as of 23 May 2016. It was made clear that the insurance cover was only provided as part of the Plan if the eligibility requirements were met. It was also made clear that if there was any inconsistency between the information that accompanied the letter and the terms of the Policy, the terms and conditions of the Policy would prevail.
AFCA erred in law in effectively finding that Mr Mitchell’s circumstances fell within the first part of the “at work” definition and that he was therefore eligible or entitled to Automatic Cover under the policy. AFCA’s reasoning and finding involved a misconstruction and misapplication of s.13 of the ICA, a misconstruction of the terms of the policy and was inconsistent with the terms of the policy.
AFCA found that Mr Mitchell met the second part of the “at work” definition because he did not receive and was not entitled to claim any Comcare benefits during the period he was employed at NOVA, which was based on AFCA’s own purported calculation of the benefits which Comcare was liable to pay Mr Mitchell pursuant to s.19(2) of the Act, utilising the figures in Comcare’s payment summary in one of Mr Mitchell’s payslips from NOVA.
Clause 2.2(b) and the “at work” definition required that Mr Mitchell not be in receipt of or entitled to workers compensation benefits on the date that the application for insurance cover was made on his behalf. That date was 26 July 2016 on which date he was not receiving any income from NOVA.
AFCA’s calculation of the benefits Comcare was liable to pay Mr Mitchell based on the formula in s.19(2) was based on the legally erroneous premise that the calculation was to be performed in respect of the period Mr Mitchell was employed by NOVA, whereas it should have been performed in respect of the date the application was made, namely 26 July 2016.
Whilst the AAT’s decision that Comcare remained liable to Mr Mitchell in respect of a compensable injury under the Compensation Act was not made until November 2016, the decision clearly operated retrospectively by reason of s.43(6) of the Administrative Appeals Tribunal Act 1975 (Cth). It was unnecessary to reach a concluded view as to whether AFCA’s simplistic calculation was erroneous because the figure that AFCA should have used for Mr Mitchell’s weekly earnings was zero because Mr Mitchell was not employed at NOVA nor earning any income as at 26 July 2016, which was the critical date.
His Honour concluded that each of the five questions of law raised by the Insurer’s appeal were to be resolved in favour of the Insurer. The appropriate orders in the circumstances were that AFCA’s determination and Mr Mitchell’s complaint be set aside and the matter be remitted to be determined again by AFCA in accordance with law and the findings made in the judgment.
