JUDGE1 MOHR J. On the 27th September 1983 one Egidio Franze was employed by the respondent. He was injured in the course of his employment. He sued his employer, the respondent Gammon for damages. Gammon in turn joined Saccardo Construction Pty. Ltd. as a third party. 2. The matter was eventually listed for trial in the District Court to be heard on 13th September 1990. On 31st August 1990 the defendant (the present respondent) filed an offer to consent to judgment in the sum of $62,933,87. Franze accepted this offer on 7th September 1990. The offer to consent to judgment was made without the consent of the third party - the present appellant. 3. The matter proceeded to trial as between the appellant and the respondent both on the question of apportionment of liability as between them and secondly as the effect of the settlement reached between the respondent and Franze in so far as it related to quantum. 4. The appellant was in the result found to be 70 percent responsible for Franze's injuries and the settlement figure was held to be the basis for making an order that the appellant pay to the respondent 70 percent of that settlement figure. 5. The appellant abandoned its appeal on the question of apportionment and the appeal proceeded on the basis that the learned trial judge was not justified in finding that the amount of the consent judgment could be used to divide the amount to be paid by the appellant to the respondent. 6. The relevant section of the Wrongs Act 1936 (as amended) under which the respondent sort contribution from the appellant are:- "25. (1) Where damage is suffered by any person as a result of a tort (whether a crime or not) - (a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage: (c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would at any time have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought; (ca) a tort-feasor who, on or after the coming into operation of the Wrongs Act Amendment Act, 1959, becomes liable in respect of that damage may recover contribution from a third party as defined in subsection (2) of this section or commence proceedings for such recovery notwithstanding - (i) that judgment in an action founded on the tort has not been given determining the tort-feasor's liability in respect of that damage; or (ii) that the plaintiff as defined in that sub-section has released the third party from his liability to the plaintiff for that or any part of that damage; (iii) that the plaintiff has not duly given any notice that would be required if the plaintiff were to recover judgment against that person; or (iv) that the time within which the plaintiff may commence action against the third party has expired; (3) Any proceedings by a tort-feasor for the recovery of contribution from a third-party under this section must be instituted before the expiration of two years from the day on which the amount of damages or other compensation payable by the tort-feasor to the plaintiff is determined by the judgment of a court of competent jurisdiction, or by agreement between the plaintiff and the tort-feasor. In any proceedings for contribution under the last preceding section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable, having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity." 7. The point at issue turns on the question whether or not the consent judgment was "objectively reasonable". I take that phrase from the judgment of Wells J. in Bakker v. Joppich and Bitumax (1980) 25 SASR 468. In that case Wells J. was faced with a somewhat similar situation although in the result, as will be seen, he did not have to resolve the question. At page 475 he said:- "In my view, I should proceed by the following steps: first, I hold that because Mr. McCarthy's client submitted to judgment, or reached an accord and satisfaction, he qualified himself, in the point of law, as one entitled to claim some contribution, if the case for that claim can be made out. I further hold that the amount which he has agreed to pay on either legal foundation may be used as the basis for assessing contribution, by reference to the percentage of the third party's responsibility subject to such variation as may be called for if it clearly appears to the Court that the sum agreed upon is, for one reason or another, improvident or unreasonable. Up until 28th August, 1980, the issue on improvidence or unreasonableness was open, but, by reason of a concession that was formally made on that day, I am spared the task of taking that particular step in the judicial process; Mr. Anderson formally conceded that the principal sum fixed was objectively reasonable, though, of course, he made thereby no concession on fundamental legal issues. What I am obliged to do now, therefore, is to consider whether or not the defendant company failed in its duty to the plaintiff to take proper and reasonable steps for his safety and whether, by reason of that failure, it contributed to the accident. If it did so contribute, I must determine what percentage of agreed damages the Company should be responsible for." Earlier in his judgment he had referred to the judgment of the High Court in Bitumen and Oil Refineries (Australia) Limited v. Commissioner for Government Transport [1955] HCA 1; 92 CLR 200 when it said at pp 212-213:- "The Court, however, is required to find what is just and equitable as an amount of contribution having regard to the extent of the responsibility for the damage of the tortfeasor against whom the claim is made. There does not seem to be any valid reason why that tortfeasor may not say to the tortfeasor making the claim, if he has improvidently agreed to pay too large an amount or by unreasonable or negligent conduct in litigation has incurred or submitted to an excessive verdict, that the excess is due to his fault and not to that of the tortfeasor resisting the claim. It would be a matter for the Court to consider under the heading of 'just and equitable'." 8. Those two passages respectfully adopt setting out the appropriate test however, they leave open the question of how a court is to decide whether or not the offer to consent to judgment made by a defendant (in this case the respondent) was "objectively reasonable". 9. The appellant in the present case having not proceeded with the appeal in so far as it related to the apportionment of liability as between the appellant and respondent was left with the question of whether the amount of the consent judgment was "objectively reasonable" in regard to quantum. 10. Wells J. in the passage cited above left the question open when he said:- "I further hold that the amount which he has agreed to pay on either legal foundation may be used as the basis for assessing contribution, by reference to the percentage of the third party's responsibility subject to such variation as may be called for if it clearly appears to the court the sum agreed upon, is for one reason or another, improvident or unreasonable." (The emphasis is mine) 11. The matter was taken a step further by O'Loughlin J. in Anderson v. Haskins and Others 1989 8 MVR 425. His Honour there referred to Bawden v. Saint, Carthy and Southern Transport Pty Ltd 1988 141 LSJS 306 a judgment of Johnston J. who left the question open as whether or not a consent judgment could be used as the basis of third party proceedings on the facts before him but said at page 323:- "But it can be argued with much force that the word 'judgment' emphasized by me above refers to judgment following trial..." O'Loughlin J. went on to refer to Bakkers case (supra) and said:- "The words that I have underlined indicate that His Honour was not asserting that a judgment or an accord could never be challenged by a third party. One would start with the presumption that a defendant would not recklessly or inadvertently suffer a judgment incorrectly or suffer an inappropriate quantification in a judgment; nevertheless I see nothing in the remarks of Wells J. which suggest that such presumptions could not be rebutted. I feel compelled to say that I support the views expressed by Wells J.; they have, in their favour, the benefit of discouraging unnecessary and expensive litigation. If a judgment or an accord has been struck between parties who have been properly advised, and a third party, who may be affected, is not bound thereby but may seek to go behind that judgment or accord, it is not a matter of concern to me that he may face a difficult task in rebutting the presumptions to which I have referred. The onus will still remain on the party seeking contribution to prove that the third party is liable: (cf Bitumen and Oil Refineries (Australia) Limited v. Commissioner for Government Transport [1955] HCA 1; (1954-55) 92 CLR 200." 12. In the District Court the Learned Trial Judge said:- "In my opinion, I should follow the pronouncements of Wells J.

in Bakker and O'Loughlin J. in Anderson rather than the view of the law suggested but not conclusively decided by Johnston J. in Bawden. In those circumstances, I propose to take the following steps:- 1. I hold that the Defendant's submission to judgment or the accord and satisfaction in favour of the Plaintiff qualified him to claim contribution from the Third Party 'if the case for that claim can be made out'. 2. I hold that the amount of the settlement 'my be used as the basis for assessing contribution' (if any). There is a presumption that the agreed award or accord would not be reached recklessly, negligently or improvidently. That really is the same as saying that, prima facie, the sum agreed is reasonable etc. However, the presumption is capable of rebuttal." 13. The appellant's argument against this proposition was that the respondent while not carrying the onus of establishing precisely that the plaintiff's damages would have been assessed at precisely the amount of the consent judgment was nevertheless obliged to prove by admissible evidence that the agreed amount was within the bounds of a reasonable assessment. 14. In my opinion the words of the High Court in Bitumen Oil Refineries (supra) that:- "There does not seem to be any valid reason why that tortfeasor (the third party) may not say to the tortfeasor making the claim (the defendant), if he has improvidently agreed to pay too large an amount or by unreasonable or negligent conduct in litigation has incurred or submitted to an excessive verdict, that the excess is due to his fault and not to that of the tortfeasor resisting the claim." was putting the onus on the third party to establish "improvidence" or "negligence" or that the amount was "excessive" in the ordinary sense that a party making an allegation is requested to prove the allegation. I find myself in agreement with O'Loughlin J. in the passage cited from Anderson v. Haskins (supra). 15. The learned trial Judge considered all the material both documentary and oral before and since "it becomes quite clear to me that, far from being unreasonable, the settlement reached between the Plaintiff and the Defendant could well have been advantageous to the Defendant (and thus the Third Party)." He went on to say:- "The material put forward by the Third Party, which really comprises the cross examination of Mr. Carney (a specialist surgeon) and some aspects of the evidence of Third Party witnesses, does not convince me that the presumption of regularity and reasonableness has been rebutted.' 16. I have read the evidence and other material and find it unnecessary to go into details. Suffice to say I agree with His Honour. 17. The matter really comes down to this. The defendant in a situation such as has arisen in this case will be obliged to lay before the court the material it had before it and on which it based its decision to make the offer accepted, including if applicable, counsel's advice and with the presumption or reasonableness operating in its favour leave it to the Third Party to attack the settlement reached. 18. I should add that in ordinary cases it will be advisable for a defendant to consult with and if possible agree with the Third Party before making an offer. I add further that it would not be open to a Third Party, not a party to the offer, to lead evidence of facts or medical opinions not available to the defendant at the time of making the offer. It is the objective reasonableness of the offer in the state of knowledge of the defendant which will be relevant assuming always that the defendant cannot be shown to have been negligent in its conduct of the case, by for example failing to obtain a vital medical opinion or like conduct. 19. I think his Honour's apportionment of liability was justified on the evidence and I would not interfere with it. 20. I would dismiss the appeal.

JUDGE2 ZELLING A.J. The plaintiff in this action was a man named Franze and the third party Saccardo Constructions Pty Ltd (hereafter Saccardo) was his employer. 2. On 27 September 1983 the plaintiff was, in the course of his employment, working on a site at Technology Park Pooraka, when he was hit by a truck driven by the defendant Gammon and suffered personal injury. 3. Franze took proceedings against Gammon who served third party proceedings on Saccardo. 4. The case was listed for trial in the District Court on 13 September 1990. 5. The defendant on 31 August 1990 filed an offer to consent to judgment for $62,933.87. That offer was accepted by the plaintiff on September 7, so that the only question left for trial before the District Court Judge was the issue of indemnity. 6. The defendant proposed to prove its case against the other party by putting in the terms of settlement and the material the defendant had in its possession in making the offer, and calling a medical witness, so as to prove that the amount offered was reasonable. 7. The third party objected to this proffered mode of proof and put the defendant to proof on liability and quantum in the ordinary way. 8. The learned District Court Judge, relying on decisions at first instance in this Court which I will hereafter analyse, overruled the third party's objection and held that the issue of quantum could be proved as the defendant proposed to do. 9. From that decision an appeal has been brought to this Court. 10. By Section 25 of the Wrongs Act 1936 (so far as material) it is provided: "25. (1) Where damage is suffered by any person as a result of a tort (whether a crime or not) - ... (c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would at any time have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought: ..." 11. It must be said that a reading of Section 25(1)(c), unaffected by any case law, does not suggest that the defendant is relieved from the onus of proving liability and quantum in the ordinary way when he takes his contribution proceedings. 12. The first case that needs to be considered is the judgment of Wells J. in Bakker v. Joppich and Bitumax Pty Ltd (1980) 25 SASR. 468. In that case, as in the instant case, the plaintiff suffered injury in a motor vehicle accident and sued the driver of the car that hit him. The defendant brought in the plaintiff's employer by third party notice to obtain contribution. The defendant settled the plaintiff's claim by negotiation for $75,000 and then sought to recover contribution in respect of the settlement from the third party. 13. After answering two questions as to liability the learned judge turned his mind to the issue of damages. 14. He said at pp 474-5: "The answer to the third question, in my opinion, resolves the issues that were so hotly debated by counsel before me. In the first place, I am persuaded that the power to pronounce what is a just and equitable contribution enables the court to make due allowance for the factor of improvidence, unreasonableness, or negligence, on the part of the defendant whenever it appears. Accordingly, a court may, consistently with its duty under the Wrongs Act, hold and find that the defendant is liable (because, for example, he submitted to judgment, or reached an accord and satisfaction), but, at the same time, because the defendant was unreasonable or improvident, reduce the contribution that the third party would otherwise have been liable to make, having regard to the percentage equivalent of his share in responsibility for the plaintiff's damages, on the ground that apportionment on the basis of the agreed sum would not be just and equitable.

But a further refinement must be attempted. Mr Anderson's argument, under this head, was to the effect that the defendant's liability must be strictly proved, both as a matter of law and as a matter of quantum. He would assert, I apprehend, that, even if a court were to accept a consent judgment or an accord and satisfaction as giving to the defendant a right to claim contribution, and even if the third party were, or would if sued be, liable for the same damage as the defendant, the only sum to which the court may have regard, in order to determine what is a just and equitable contribution, is an award of damages precisely assessed by the same court upon evidence adduced or pointed to by the defendant. He would deny that a sum agreed on in an accord and satisfaction or a consent judgment would fill that role unless it happened to be identically the same as an award assessed in that way. It is at this point that I must respectfully part company with him. It appears to me that the amount of damages does not cease to be the proper basis for an apportionment that is just and equitable merely because it fails to hit identically the same figure as the court would be disposed to fasten upon in a case litigated to final judgment. I should regard it as absurd if the law compelled me to hold that, because, in such a case, I should fasten, by judicial process, upon an award of, say, $40,000 damages, after resolving the issues of liability, apportionment, and assessment, it had been improvident or unreasonable for the defendant to have agreed with the plaintiff to forestall such resolution by consenting to a judgment, or entering into accord and satisfaction, in the sum of say $43,000. A defendant who owned himself liable for the latter amount could well, in the circumstances, have acted wisely. I do not wish for a moment to

convey the impression that $3,000 in $40,000 represents the limits of reasonable tolerance; I should, speaking generally,

regard such limits as comparable with the limits allowed by a court, above and below an ideally correct figure, within which it may properly approve a settlement between parties, one of whom is under a disability, who agreed a figure other than that which was ideally correct. In my view, I should proceed by the following steps: first, I hold that because Mr McCarthy's client submitted to judgment, or reached an accord and satisfaction, he qualified himself, in the point of law, as one entitled to claim some contribution, if the case for that claim can be made out. I further hold that the amount which he has agreed to pay on either legal foundation may be used as the basis for assessing contribution, by reference to the percentage of the third party's responsibility subject to reference to the percentage of the third party's responsibility subject to such variation as may be called for if it clearly appears to the Court that the sum agreed upon is, for one reason or another, improvident or unreasonable. Up until 28th August, 1980, the issue of improvidence or unreasonableness was open, but, by reason of a concession that was formally made on that day, I am spared the task of taking that particular step in the judicial process; Mr Anderson formally conceded that the principal sum fixed was objectively reasonable, though, of course, he made thereby no concession on fundamental legal issues." 15. So the issue we now have to decide became moot in Bakker's case by reason of the concession made by counsel for the third party. However, the observations of Wells J. though obiter are important. 16. The first paragraph from the judgment of Wells J. which I have quoted is a proposition of obvious good sense but it only says what a court may use as a basis. If there was a presumption involved, the word "may" would have had to read "must". The objection taken in the case before us is different from the one taken by counsel in the case before Wells J., and what the learned judge would have ruled, had the objection been in identical terms, we of course do not know. 17. This part of the judgment of Wells J. was interpreted by O'Loughlin J. in the later case of Anderson v. Haskins and Ors (1989) 8 MVR 425 at 433 as creating a presumption in the contribution action in favour of the validity of the quantum of settlement between the plaintiff and the defendant to which the third party was not a negotiating party. 18. He said at p 433-4: "Later in his judgment his Honour applied his earlier answers to the issues then before him by saying (at 475): 'In my view, I should proceed by the following steps: first, I hold that because Mr McCarthy's client submitted to judgment, or reached an accord and satisfaction, he qualified himself, in the point of law, as one entitled to claim some contribution, if the case for that claim can be made out. I further hold that the amount which he has agreed to pay on either legal foundation may be used as the basis for assessing contribution, by reference to the percentage of the third party's responsibility subject to such variation as may be called for if it clearly appears to the court that the sum agreed upon is, for one reason or another, improvident or unreasonable.' (Emphasis added) " 19. The words that I have emphasised indicate that his Honour was not asserting that a judgment or an accord could never be challenged by a third party. One would start with the presumption that a defendant would not recklessly or inadvertently suffer a judgment incorrectly or suffer an inappropriate quantification in a judgment; nevertheless I see nothing in the remarks of Wells J. which suggest that such presumptions could not be rebutted. 20. I feel compelled to say that I support the views expressed by Wells J.; they have, in their favour, the benefit of discouraging unnecessary and expensive litigation. If a judgment or an accord has been struck between parties who have been properly advised, and a third party, who may be affected, is not bound thereby but may seek to go behind that judgment or accord, it is not a matter of concern to me that he may face a difficult task in rebutting the presumptions to which I have referred. The onus will still remain on the party seeking contribution to prove that the third party is liable: cf Bitumen and Oil Refineries (Aust) Ltd v. Commission for Government Transport [1955] HCA 1; (1955) 92 CLR 200." 21. With great respect to the learned Judge, I do not read Wells J.'s judgment as creating any such presumption and it would be surprising if it did. The position is that the defendant has to prove quantum as in any other action. If the third party is foolhardy enough to put the defendant to strict proof and the judge hearing the third party proceedings finds that the settlement was reasonable, the third party will be mulcted in costs. As Wells J. pointed out in the passage cited, the judge need not come to the exact figure of the settlement. It is sufficient if the settlement was within the limits of reasonable tolerance, looked at as a settlement. But there is no shifting of onus by the creation of a presumption, and Wells J. did not say so. Accordingly I think we should not follow Anderson v. Haskins. 22. If a contribution claim is to proceed and it is desired to obviate this necessity for the calling of all necessary evidence, which is usually a commonsense way of going about it, as Wells J. obviously envisaged, then directions should be sought before the matter is set down for trial, or the trial proceeds after settlement, as the case may be. 23. I think his Honour's apportionment of liability was justified on the evidence and I would not interfere with it. 24. The appeal should be allowed. I would hear the parties as to whether the matter should be remitted to the same or to another Judge.

JUDGE3 MATHESON J. I am in complete agreement with the reasons of Zelling A.J. and with the order he proposes.