2. In August 1993 [the appellant] was the Work Health insurer for the Power & Water Authority ("the employer").

3. In August [sic, 9 November] 1993 the worker in the employ of the employer, one Serge Katarski ("the worker"), submitted a worker's compensation claim form in relation to an aggravation of an earlier injury sustained in the course of the employment with the employer on 8 October 1989. The said [earlier] injury being a crushed lower left leg. ...

4. The [appellant] on behalf of the employer initially deferred liability for the worker's claim in order to obtain further medical information. ... [In fact, I note that the employer's notice of 9 December 1993 simply denied liability, and this led the worker to institute proceedings in the Court for compensation, on or about 5 January 1994].

5. After further investigations and obtaining medical reports, the [appellant] on behalf of the employer accepted the worker's claim for compensation for his injury in August 1993 as being an aggravation of the earlier crush injury to the worker's lower left leg on 8 October 1989. As a result of the acceptance of the worker's claim, a Memorandum of Agreement [of 1 November 1994] was prepared and signed by the worker and the [appellant's] solicitors. The said Memorandum of Agreement was filed, approved and recorded by the Work Health Court [on or about 16 November 1994].

6. On or about 22 March 1994 [the appellant's solicitor] Elston & Gilchrist, on behalf of the [appellant], notified the respondent of its ... liability to indemnify the employer and the [appellant] for compensation paid [by them] in respect of the worker, pursuant to Section 126A(2)(a) of the Act. ... [see pp13,14]

7. On or about 2 April 1994, the respondent's solicitor denied liability on behalf of the respondent to indemnify the employer and the [appellant] pursuant to Section 126A of the Act. ...

8. The delay between the initial notification of the respondent [under s126A(2)(a)] on or about 22 March 1994 ... and the filing of the Memorandum of Agreement [see par5] which was recorded on or about 16 November 1994 was due to some difficulties in calculating the worker's entitlements to payments of weekly compensation. During the period of incapacity, the worker had been paid by the employer and then at some time part of his weekly earnings was mistakenly deducted by the employer. In addition the worker was paid some sick pay for certain periods of his incapacity. Much time was taken up with liaising with the employer's payroll section to ascertain the correct amount of payments of weekly compensation due to the worker.

9. Following the recording of the said agreement, payment of the sum agreed was made by the employer to the worker. The [appellant] has indemnified the employer for the said payments to the worker.

10. The [appellant's] proceedings [of 4 January 1995] for reimbursement pursuant to Section 126A against the respondent was not issued within the 6 month time period prescribed in the said Section [126A(2)(b)] as at that time the applicant was still considering the available medical evidence to decide whether or not liability for the worker's claim should be accepted and following acceptance some time was taken in finalising the actual amounts of compensation payable to the worker for the reasons as set out in paragraph 8 above." Ö"

5 medical reports were annexed; Ms Cheong deposed that they were relied on "in accepting the worker's claim for compensation". It can be seen that 2 reasons are given in par10 for not suing the respondent within 6 months of 22 March 1994: first, the appellant's need to obtain and consider information from medical practitioners (see pars4 and 5), the relevant medical reports being those of 18 January 1994 (Dr Goodhand) and 10 February 1994 (Mr Baddeley) at annexures "I" and "H"; and second, the need to calculate the worker's entitlements.

The respondent's submissions were accurately summarised by the Court in its reasons for decision of 15 August 1995, as follows:-

(1) Section 126A(2)(b)(i) enables proceedings such as those contemplated to be instituted only where a worker has not instituted proceedings under s126A(2)(b)(ii); that is, an approved insurer may not commence proceedings pursuant to s126A(2)(b)(i) where "other proceedings (for example, by the worker) in respect of the claim for compensation have been commenced" - s126A(2)(b)(ii);

(2) the applicant had failed to comply with s126A(2)(a) in that it did not notify the respondent "as soon as practicable after becoming aware of the [respondent's] potential liability";

(3) the material in support of the application is so vague and unsatisfactory that the applicant has failed to show why time to commence proceedings should be extended pursuant to s126A(2)(b); and

(4) public policy considerations - in particular, the need to ensure finality in litigation, to avoid multiple proceedings, and to prevent the same questions being tried twice with a possibility of different decisions on those questions being given by differently constituted courts - require that in all the circumstances the application to extend time be refused.

The appellant dealt with these 4 submissions seriatim, viz:

(1) Section 126A(2)(b), properly construed, enabled an approved insurer to institute contribution proceedings against another approved insurer pursuant to s126A(2)(b)(i), even though "other proceedings ... have been commenced", in terms of s126A(2)(b)(ii);

(2) the appellant had complied with s126A(2)(a) in that it had notified the respondent "as soon as practicable after becoming aware of the [respondent's] potential liability";

(3) the material in support of the application was sufficient to establish that an extension of time should be granted, particularly in light of the respondent's failure to establish that it would suffer any prejudice from such a grant apart from the usual prejudice of time and delay, which could be met by an award of costs; and

(4) the relevant public policy considerations - in particular, the need to settle claims between the worker and employer expeditiously, and the fact that in this case there was no question of the same questions being tried twice with a possibility of different decisions on the same issues being given by differently-constituted courts - required that in the circumstances the application for extension of time should be granted.

In reply, the respondent made 4 further submissions, viz:

(1) as to appellant's submission (2): the degree of awareness required of the appellant by the phrase "after becoming aware of the other insurer's potential liability" in s126A(2)(b), was very low; this meant that the appellant became "aware" in terms of s126A(2)(b) of the respondent's potential liability by August [sic, November] 1993, since the worker in his claim of 8 November 1993 had characterised his injury of August 1993 as an aggravation of his original injury of 8 October 1989;

(2) as to appellant's submission (3): the respondent would be prejudiced because costs would be substantially increased by the fact of separate proceedings, in particular because the respondent would have to obtain the evidence it would seek from the worker in the contribution proceedings secondhand through the appellant;

(3) as to appellant's submission (4): (a) there was no factual foundation for the submission that the need for expeditious resolution of the worker's claim pointed to its being determined before the appellant commenced contribution proceedings, viz:

... "[the Court] can't assume that because there is an insurance [contribution] issue ... it would necessarily be harder to settle with the worker ... the worker's position couldn't [sic, could] be attended to in the meantime, as so regularly happens, by interim orders"; and

(b) as to a contribution proceeding being separate to the worker's proceeding, the respondent's "main complaint is [the] duplicity of result that might arise".

I consider that on the basis of these submissions two general questions were squarely before the Court for resolution:

(1) whether the appellant had notified the respondent 'as soon as practicable' after becoming aware of the latter's 'potential liability', as required of it by s126A(2)(a); and

(2) whether pursuant to its discretionary power in s126A(2)(b) the Court should extend the time to the extent required, so that the contribution proceedings the appellant had in fact instituted on 4 January 1995 were properly instituted.

On 15 August 1995, the Court delivered its reasons for decision. As far as relevant, his Worship said:

"The [appellant's] claim to contribution is founded upon the principle of both the common law and equity that "persons who are under co-ordinate liabilities to make good the one loss ... must share the burden pro rata" ( Albion Insurance Co Ltd v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342 per Kitto J at 350). The joint judgment of Barwick CJ, McTiernan and Menzies JJ in the Albion Insurance case [which involved the right to contribution between insurers] contains the following passage at p345 [dealing with the concept of 'double insurance', where an assured is insured against the same risk by two independent insurers]:

"The insured may claim indemnity from either insurer. However, as both insurers are liable, the doctrine of contribution between insurers has been evolved. It began in the second half of the eighteenth century with Lord Mansfield's decisions with respect to marine insurers and there is no doubt that it now applies generally to insurance which provides the insured with an indemnity. There is no reason why the doctrine should not apply to insurance against liability to third parties, and there is every reason in principle that it should."

The provisions of Section 126A of the Work Health Act qualify an insurer's right to contribution in two ways. In order to commence contribution proceedings an insurer (a) must give notice as soon as practicable to another insurer [after becoming aware] of [that insurer's] potential liability and (b) must commence contribution proceedings within six months of becoming aware of another insurer's potential liability, or within such longer period as the Court allows.

The consequences of the respondent's interpretation [see submission (1) at p8] of Section 126A are twofold; firstly, an insurer loses its right to bring contribution proceedings if a third party, the worker, has instituted proceedings; secondly, an insurer loses its right to bring contribution proceedings if it becomes aware of another insurer's potential liability after a worker's action has concluded. Such an interpretation clearly offends the presumption that the legislature does not intend to abrogate a common law right ( Sargood Bros v Commonwealth [1910] HCA 45; (1910) 11 CLR 258) [at 279] or to alter common law doctrines ( Potter v Minahan [1908] HCA 63; (1908) 7 CLR 277) [at 304], unless the contrary intention is clearly expressed or implied. There is nothing in the provisions of Section 126A, express or otherwise, which indicates an intention to abrogate an insurer's right to contribution. In my view an insurer [seeking contribution] is entitled either to commence its own proceedings pursuant to Section 126A(2)(b)(i) or to join another insurer to a worker's claim commenced pursuant to Section 126A(2)(b)(ii).

As early as 9 November 1993 [in his claim] (Exhibit A) the worker refers to his previous condition in the following terms "the present condition caused by the work I do is an aggravation of the original injury. Original injury date 8.10.89" (Item 11) and he refers also to his [original] injury having occurred while employed with the POWER AND WATER AUTHORITY and how he was treated by Dr Schmidt at the Darwin Private Hospital (Items 21 and 22).

Dr Goodhand in his report dated 18 January [1994] and apparently received by [the appellant] in early February 1994 (see Exhibit I) refers to "this most recent exacerbation is a direct consequence of the original crush injury in 1989 exacerbated by the current work conditions." Dr Baddeley in his report of 10 February 1994 refers to a previous injury (Exhibit H).

On 22 March 1994 the solicitors for the [appellant], ELSTON & GILCHRIST, wrote to the respondent. [This was relied on by the appellant as the notification to the respondent for the purposes of s126A(2)(a)]. I quote this letter in full:

The Claims Officer Workers Compensation Business Unit TIO Finance & Insurance GPO Box 770 DARWIN NT 0801

We advise that we act on behalf of C.E.Heath Casualty & General (Workers Compensation) Pty Ltd in relation to workers compensation claim made by Serge Katarski, an employee of the Power and Water Authority, Claim Form No. 51356 dated 9 November 1993.

We are instructed that the present claim for incapacity is as a result of the injury the worker suffered in the course of his employment on 8 October 1989 , at which time the Territory Insurance Office was the approved workers compensation insurer of the Power and Water Authority. We believe that liability was admitted in relation to this claim, and that various payments have been made.

Liability for Mr Katarski's present claim was disputed by the employer, and it is presently before the Work Health Court . If it should transpire that the employer is liable, and that therefore our client is liable to indemnify the employer, then we believe that you may also be liable to indemnify the employer, and this letter is intended as notification of that potential liability pursuant to Section 126A(2)(a) of the Work Health Act.

Please note that in the event that you do not accept liability to indemnify the employer in relation to this period of incapacity, then it is our client's intention to join you as a party to the proceedings which are on foot in the Work Health Court .

Yours faithfully ELSTON & GILCHRIST" [underlining in judgment]

The [appellant] in these proceedings and a party to the recorded agreement in the worker's proceedings is HIH CASUALTY & GENERAL INSURANCE LTD not C.E HEATH CASUALTY & GENERAL (WORKERS COMPENSATION) PTY LTD. On the material before me there is no evidence that the Applicant HIH CASUALTY & GENERAL INSURANCE LTD or any of its duly authorised agents notified the Respondent TERRITORY INSURANCE OFFICE of any potential liability in accordance with the provisions of Section 126A(2)(a). On that ground alone this application must fail. Assuming that C.E HEATH CASUALTY & GENERAL (WORKERS COMPENSATION) PTY LTD is one and the same legal entity as HIH CASUALTY & GENERAL INSURANCE LTD however, I have considered the material in support of this application to determine the application on its merits." (emphasis added)

I interpose to note that neither counsel in the appeal disputed the accuracy of his Worship's assumption as to the identity of the appellant; they agreed that the point was not in issue. I proceed on the basis that the appeal should be decided on its merits. The Court continued:

"The [appellant] does not explain why notification [to the respondent] did not occur as soon as practicable after receipt of the worker's claim on 10 November 1993; nor does it explain the delay in notifying the respondent until 22 March 1994. There is no explanation for the [appellant's] failure to join the respondent as a party to the worker's proceedings despite written notice [in the letter of 22 March 1994] of its intention to do so (Exhibit D). The explanation for the [nine months plus] delay between notification on 22 March 1994 and the filing of this application [on 4 January 1995] - "Due to some difficulties in calculating the worker's entitlements ..." (paragraph 8 Affidavit of Peggy Cheong) [p9] is in my view insufficiently specific and unsatisfactory.

Had the respondent been joined in [the worker's] proceedings, or involved in negotiations, the many issues raised in its Answer may have been resolved without the need for further litigation, and without extra costs associated with the likely determination of the same issues by a differently constituted court.

On the material before me I consider the [appellant] has not complied with Section 126A(2) in that it failed to notify the respondent at all or 'as soon as practicable' after it became aware of the respondent's potential liability on or about 10 November. Further I consider that the material in support of this application [of 4 January 1995] is so vague and unsatisfactory that in all the circumstances, including considerations of public policy, time should not be extended to commence these proceedings. Accordingly this application is dismissed with costs." (emphasis added)

Mr Southwood of counsel for the appellant raised a preliminary matter of considerable significance. He conceded that several points he sought to argue in support of the appeal had either not been raised at all before the Court, or the submissions on those points had not been put to the Court in the "same detail" as they would be on the appeal. However, he submitted that as "all of the necessary evidence" relating to those points had been before the Court, they should now be entertained and dealt with on the appeal, in the interests of justice and expediency. In support of this approach, he relied on what was said in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7-8, and in the authorities there cited. He also correctly noted that s116(2) did not empower this Court to remit the points to the Court for decision: see Wormald International (Aust) Pty Ltd v Aherne (unreported, Supreme Court (NT) (Mildren J), 23 June 1995) at 3-4.

Mr Lindsay did not oppose, in general, the submission that this Court should deal with the points in question; however, he submitted that submissions should not be received as to the meaning of the phrase "Ö an approved insurer who has indemnified an employer", in s126A(2).

I bear in mind the proper approach to this aspect, stated by the majority of the High Court in Water Board v Moustakas [1988] HCA 12; (1988) 77 ALR 193 at 196-197, viz:

" Ö a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence below. Where all the facts have been established beyond controversy or where the point is one of construction or of law, then a court of appeal may find it expedient and in the interests of justice to entertain the point, but otherwise the rule is strictly applied; ... . In deciding whether or not a point was raised at trial no narrow or technical view should be taken. Ordinarily the pleadings will be of assistance for it is one of their functions to define the issues so that each party knows the case which he is to meet." (emphasis added)

See also Tyson v Brisbane Market Freight Brokers Pty Ltd (1994) 68 ALJR

304, and Ainsworth Nominees Pty Ltd v Crouch (1995) 11 NSW CCR 640.

Having regard to the pleadings (at pp4-5), accepting that all the evidence relating to the points in question was before the Court, and noting the respondent's general position on the issue, I consider that the points raised by the appellant for the first time in this Court should be entertained, in the interests of justice and expediency. The interpretation of the words in 126A(2) "Öan approved insurer who has indemnified an employer" clearly involves a point of construction or of law, in terms of what was said in Water Board v Moustakas (supra); I entertain and deal with it, because I consider it is expedient and in the interests of justice to do so.

Mr Southwood's submissions were directed at establishing 3 major matters: that the appellant's claim for contribution is soundly based; that the appellant had notified the respondent 'as soon as practicable', in terms of s126A(2)(a); and, finally, that time for the appellant to commence contribution proceedings should have been extended, under s126A(2)(b). I turn to these submissions.

"(1) Whether the claim for contribution is soundly based"

The appellant's claim for contribution rests on 2 bases, viz:

(a) The thrust of the whole of the medical evidence was summarized in Mr Baddeley's report of 29 August 1994 (annexure "F" to Ms Cheong's affidavit), that what the worker suffered in August 1993 was not an "acceleration of a condition caused by" the original injury of 8 October 1989; that condition had simply worsened over time, so that the presenting situation in August 1993 was of "a continued pathological process which was started by the injury of 1989". I accept that. I indicate that I understand "acceleration" to connote the hastening of the normal underlying condition, while "aggravation" connotes the increase in the severity of that condition - see Casarotto v Australian Postal Commission [1989] FCA 116; (1989) 17 ALD 321. In Mr Southwood's submission, the worker's work "may have exacerbated the underlying problem [from 1989] but to no very marked degree". Consequently, but for s126A(1), the respondent would have been liable to indemnify the employer, as its approved insurer in 1989, on the basis that it was the 1989 injury which solely gave rise to the worker's incapacity in 1993. The employer's liability therefor was determined in 1989 by s53; hence the respondent was liable, since the statutory indemnity Policy in Schedule 2 to the Act put it on risk in 1989 when the injury occurred, and was subject to the Act.

The effect of s126A(1), in circumstances such as this, was to create what amounted to a situation of 'double insurance', since it imposed on the appellant as the approved insurer at the time the claim was made in 1993 a statutory duty to indemnify the employer for its liability to the worker, notwithstanding that as the 1993 insurer it might allege that (apart from s126A(1)) the liability to indemnify was that of the 1989 insurer. The legal position was that the appellant was bound by statute to indemnify the employer, while the respondent was bound by its 1989 Policy to indemnify the employer for the same damage. Consequently, the principles set out by Kitto J in Albion Insurance Co Ltd v Government Insurance Office (NSW) (supra) at 350, apply to s126A; that is, "persons who are under co-ordinate liabilities to make good the one loss ... must share the burden pro rata."

I comment that 'double insurance' is the term used to describe the situation where an insured is entitled to be indemnified against the one loss, under 2 or more separate contracts of insurance by 2 or more separate insurers. He is not obliged to claim against all if he suffers loss, but may obtain indemnity for his entire loss from only one (to that insurer's limit). That insurer may require the other insurers on risk to contribute to the payment, the rationale being that expressed by Kitto J in Albion Insurance Co Ltd (supra) - thus ensuring that common burdens are not borne inequitable between co-obligors. Liabilities are "co-ordinate" when the insurers are each liable to insure the same insured against the same loss, and this founds the right to contribution; see Accident Compensation Commission v Baltica General Insurance Co Ltd [1993] VicRp 33; [1993] 1 VR 467 at 481-2. The locus classicus on 'double insurance' and contribution in Australia is Albion Insurance Co Ltd (supra). The law as to contribution developed in the context of co-obligors voluntarily assuming their obligations. In this case the obligation is imposed on the appellant by its statutory Policy and s126A(1), where it is expressly contemplated that the doctrine of contribution applies; even if that were not so, it still would. See Spika Trading Pty Ltd v Harrison (1990) 19 NSWLR 211 at 214-5 and Street v Retravision [1995] FCA 1197; (1995) 16 ACSR 780 at 784.

(b) In requiring that a claimant for contribution " has indemnified [the] employer", Mr Southwood submitted that s126A(2) in essence adopted the common law approach to contribution; that is, it was a precondition to bringing a claim for contribution that the claimant had actually indemnified, in the sense that it had actually paid, the employer - see McLean v Discount and Finance Ltd [1939] HCA 38; (1939) 64 CLR 312 at 341, per Starke J. Mr Southwood submitted that this construction of s126A(2) meant that it stood in contrast with the modern equitable basis for contribution as outlined in Mahoney v McManus

[1981] HCA 54; (1981) 36 ALR 545 at 549 per Gibbs CJ, and Borg Warner (Aust) Ltd v Switzerland General Insurance Co Ltd (1989) 16 NSWLR 421 at 429-432. See generally J.D. Lipton 'Equitable Rights of Contribution and Subrogation: Recent Judicial Approaches' (1995) 13 Aust Bar Rev 20 at 22-25 and 27-28. He submitted that the modern law governing the right to contribution meant that it is was not now necessary for the party seeking a declaration that it was entitled to contribution, to wait until it had actually paid. I consider that that is clearly correct; the right to contribution is founded in natural justice, and is intended to prevent inequitable outcomes between parties subject to a common obligation.

Against that background, Mr Southwood continued, the fact that s126A(2) reflects the older common law approach requiring actual payment before an action for contribution can be instituted, had a twofold significance. First, it was directly relevant to establishing when the appellant could have instituted proceedings for contribution; that time was crucial to both questions (see p11) raised for determination before the Court. The appellant could not have instituted its contribution proceedings within the 6 months limited by s126A(2)(b) after it notified the respondent on 22 March 1994 of the latter's potential liability, that is, by 22 September 1994, because the appellant did not repay (had not 'indemnified', in terms of s126A(2)) the employer for the compensation the employer had paid its worker, until after 16 November 1994, some 8 months after that notification. In support, Mr Southwood relied on Murray v Baxter [1914] HCA 78; (1914) 18 CLR 622, as establishing that the only period for which the appellant had to explain any delay was the 6 months after the appellant had become aware of the respondent's potential liability. I should say that I do not accept that submission; Murray v Baxter (supra) is distinguishable, being concerned with the interpretation of a quite differently-worded provision. Here, the language of s126A(2)(b) points clearly to the need for the appellant to explain the reasons for the whole period of any delay. Second, Mr Southwood submitted, the fact that s126A required actual payment was an additional factor to be taken into account on the merits of the appellant's application to extend time.

Mr Southwood sought to distinguish the decision in Manufacturers Mutual Insurance Ltd & Ors v National Employers' Mutual General Insurance Association Ltd (1990) 6 ANZ Insurance Cases 61-038, a case similar in some respects to this case. There the worker suffered injury no.(1) during year A when X was his employer's insurer; he suffered (a later) injury no.(2) during year B when Y had become the insurer. The worker became economically incapacitated - he was demoted - from the combined effect of both injuries, "the series of back aggravation"; this may distinguish it from the present case, where the appellant contends that the incapacity in 1993 resulted solely from the 1989 injury. Y paid the employer the compensation awarded, and sought a declaration that X was liable to contribute, relying on the doctrine of double insurance. It was held that the 2 policies, being consecutive in time, ex hypothesi could not be said to insure the employer against the same risk. X was never on risk for injury no.(2). Because the risk insured against was not the same, each insurer was not liable to pay the whole of the indemnity; and hence there was no right to contribution because there was no double insurance. The case turned on the construction of the statutory Policy, by which X indemnified the employer against its liability, from an injury occurring only during the currency of its Policy, "to pay compensation under the Act to Ö a worker".

"The employer's liability for the combined effect of two injuries is not congruent with the several liability flowing from each of two separate injuries."

"Ö the earlier insurer [X] was simply not promising [in its Policy] to do anything in relation to the risk arising in the later period."

In the result, insurer Y had no right to contribution from insurer X. Mr Southwood submitted that the Court of Appeal in that case had taken a conservative approach to the question of contribution; and the case was in any event distinguishable, on the basis that the Workers Compensation Act 1926 (NSW) has no provision equivalent to s126A which, he submitted, "essentially creates [a situation of] Ö double insurance."

He submitted that the foregoing arguments showed that the appellant clearly had an arguable case to recover contribution from the respondent, and this in turn favoured an extension of time to make its claim.

I turn to the second of Mr Southwood's 3 major matters (p17).

"(2) Whether notification was given 'as soon as practicable' in terms of s126A(2)(a)"

Mr Southwood submitted that the Court had made two errors of law in finding that the appellant had not explained (see p14):

"Ö why notification did not occur 'as soon as practicable' after receipt of the worker's claim on 16 November 1993; [or] Ö the delay in notifying the respondent until 22 March 1994."

The alleged errors were in the assumption in that finding, that the notification of 22 March 1994 was not a notification given 'as soon as practicable' in terms of s126A(2)(a); and in the conclusion that the appellant gave no adequate explanation for its delay in notifying. Anticipating the respondent's submissions, Mr Southwood further submitted that giving the notification required by s126A(2)(a) is not a precondition to the Court's allowing an extension of time under s126A(2)(b). I turn to the submissions directed to these 3 alleged errors.

(a) Assumption that notification of 22 March 1994 was not given 'as soon as practicable'

Mr Southwood submitted that the determination whether a notification was given "as soon as practicable" in terms of s126A(2)(a), is a question of law; see Farmer v Cotton's Trustees [1915] AC 922 at 932, per Lord Parker of Waddington. I accept that. He referred to the discussion of the phrase "as soon as practicable" in Maddalozzo v Maddick [1992] NTSC 46; (1992) 84 NTR 27 at 35-38, and in McMillan v Territory Insurance Office [1988] NTSC 58; (1988) 57 NTR 24 at 26-27. The former case related to the requirement in s80(1) of the Act that an injured worker notify his employer "as soon as practicable", if he was to be entitled to claim compensation, and the latter to the meaning of the phrase in s31(1) of the Motor Accidents (Compensation) Act, requiring that a claim for a benefit be made 'as soon as practicable' after the accident.

Mr Southwood relied on the following observations of Mildren J in Maddalozzo v Maddick (supra) at pp37-38:

"In my opinion the relevant reference point [after which notice must be given 'as soon as practicable'] will often be the date that financial loss begins to occur . If an injury is not immediately productive of financial loss, it may not be practicable for a worker to give notice if the injury appears to be minor and not likely to lead to a claim. So much was recognised by Atkin LJ in Albison v Newroyd Mill Ltd [(1925) 134 LT 171] at 177 when his Lordship observed: "It is quite plain that if claims for compensation by workmen, whenever they receive slight and most trivial injuries, depend on notice being given at once, the object of the Act would be defeated, and, more than that, the employers and their insurance companies would be worried with a great many notices which, I think, on the whole they would be sorry to receive. At any rate, that is not the law."" (emphasis added)

He submitted that this showed that there had to be some loss before it became "practicable" to give notice. I do not consider that the analogy holds, or that the submission is valid. In Albison (supra) at 177 his Lordship had posed as "the material question" to be answered -

"Ö whether at that time [the worker] had reasonable ground for supposing that the injury was such that she might have to make a claim under the Act for compensation." (emphasis added)

Mr Southwood submitted that similarly here the appellant had to have "reasonable ground", the material question for the purposes of s126A(2)(a) being: when did the appellant have some reasonable ground for supposing that the nature of the injury suffered by the worker was such that the appellant might have a claim for contribution against the respondent under the Act? I accept that formulation as correct.

In Maddalozzo v Maddick (supra) at 36 Mildren J distinguished the approach adopted in McMillan v TIO (supra) at 26-27 to determining whether a claim had been made "as soon as practicable". His Honour said:

"[Gallop J] was there dealing with a totally different statutory regime, and the requirement of s31 of the Motor Accidents (Compensation) Act, Ö was Öto make a claim under the Act "as soon as practicable after the accident". There is no requirement under that Act to give notice of an injury as well as to make a claim, similar to that contained in the Work Health Act."

Mr Southwood submitted in turn that the differences between ss80(1) and 126A(2)(a) were such that the approach in McMillan v TIO (supra) applied in the present appeal; the insurer who has indemnified the employer as required by s126A(1) has to make specific inquiries in order to obtain evidence, and to assess his position. I accept that. Further, unlike section 80(1), where failure to give notice "as soon as practicable" is expressed to be a condition precedent to an entitlement to compensation, the giving of notice under s126A(2)(a) is not expressed to be a condition precedent to instituting a claim under s126A(2)(b) for contribution. Consequently, Mr Southwood submitted that the approach of Gallop J in McMillan v TIO (supra) was relevant to this case; I accept that, generally. His Honour said at pp26-27:

"The phrase 'as soon as practicable' [in s31(1)] is designed to impose a reasonably practical time limit after the subject accident for making a claim under the Act. What is a reasonably practicable time must vary according to circumstances. No doubt all the surrounding circumstances relative to the claimant must be taken into consideration, as in every other case where it falls to a tribunal to decide what is 'reasonable'. Those circumstances would include the physical and mental capacity of the injured person at the time in question, his degree of business knowledge, the nature and time of his inquiries, the result of such inquiries, any difficulties encountered, the magnitude of any injuries, whether they had stabilised, and such similar matters." (emphasis added)

Mr Southwood submitted that in terms of s126A(2)(a) the critical consideration in this case was whether, in all the circumstances of this case, notice was given 'as soon as practicable' after the appellant became aware of the respondent's potential liability. As to what the relevant circumstances comprised, he submitted that regard should be had to the medical enquiries which the appellant would necessarily have had to make to ascertain if the employer was liable and if the respondent had a 'potential liability', the time necessary to obtain a response to those enquiries, and the nature of the actual response. I accept that.

He noted, in contrast, that the Court had found that it was as early as 9 November 1993, when the worker lodged his claim form which referred to his injury of August 1993 as "an aggravation" of his original injury of 1989, that the appellant became 'aware' of the respondent's potential liability, in terms of s126A(2); hence its conclusion that the appellant was therefore required by s126A(2)(a) to notify the respondent 'as soon as practicable' after 9 November 1993.

He submitted that in arriving at this finding the Court had erred in law in 3 ways:-

(i) The simple assertion by the worker on 9 November 1993 did not constitute evidence adequate for the appellant to conclude that the employer was liable, and the respondent potentially liable to indemnify. I agree.

(ii) Under s126A(2)(b) an insurer can claim contribution from another insurer only where it has indemnified the employer; consequently the appellant would have to have reached a conclusion that the employer was liable to pay compensation (and hence it was obliged to indemnify the employer under s126A(1)), and paid the employer, before it could assert that the respondent may be liable to indemnify the employer. I accept this, except insofar as it asserts a need to have actually paid the employer.

(iii) To enable a s126A(1) insurer to assess whether another insurer may be liable, it is first necessary that it make proper medical enquiries, await the results, and consider them. It could be, for example, that they would disclose that the 1993 incapacity was due to an aggravation in 1993 of the 1989 injury. In this connection, Mr Southwood submitted that the report of Mr Baddeley of 10 February 1994 (annexure "H") was the appropriate report on which the appellant could assess whether the respondent might be liable. Consequently, 10 February 1994 (and not 9 November 1993) was the appropriate reference point in determining whether notice had been given "as soon as practicable" thereafter, in terms of s126A(2)(a). As to that, Mr Southwood submitted that notification on 22 March 1994 was a short time after receipt of the medical information of 10 February 1994, and was given "as soon as practicable". I agree.

I turn to the second alleged error relied on by Mr Southwood (p23).

(b) The conclusion that the appellant had given no adequate explanation for the delay in notification

Mr Southwood noted that this point was not raised before the Court by the respondent. However, he rightly conceded that the respondent could raise it now; see Paspaley Pearls Pty Ltd v Johnston (unreported, Supreme Court (NT), Kearney J, 7 June 1995) at pp7-9. The factual matters are set out in Ms Cheong's affidavit at pp6-7, the appellant's relevant submissions are at p25-28.

I turn to the third alleged error relied on by Mr Southwood (p23).

(c) Whether notification under s126A(2)(a) is a condition precedent to instituting a claim under s126A(2)(b)

Mr Southwood affirmed the negative of this proposition. He submitted first, that the ordinary reading of the provisions supported his approach, and indicated the legislature's intention. Second, ss80(1) and 182(1) of the Act expressly make notification a precondition to entitlement to compensation and to instituting proceedings for compensation, respectively; accordingly, applying the 'expressio unius' maxim to this structural difference in the Act as an aid to the interpretation of s126A(2)(a), notification is not intended to be a precondition to the institution of proceedings under s126A(2)(b). Failure to comply with s126A(2)(a) makes the appellant liable to a penalty under s178 of the Act; further, arguably, it may be taken into account as a relevant factor in the exercise of the discretion to extend time, if it occasions prejudice to the other insurer. I consider it is a relevant factor.

I turn to the last of the appellant's 3 major matters (p17).

"(3) Whether time should have been extended under s126A(2)(b)"

The decision to grant or refuse an extension of time under s126A(2)(b) is a decision in the exercise of a general discretion, and an appeal against such a decision is determined in accordance with well-established principles as set out, for example, in House v The King [1936] HCA 40; (1936) 55 CLR 499 at 505. I accept that.

The Court erred in law in its decision not to extend time (pp14, 15), for 4 reasons. First, it did not give sufficient weight to some material considerations, particularly the fact that the respondent would suffer no prejudice; the question of prejudice lies at the heart of a decision whether or not to extend time. Second, it took into account extraneous matters. Third, it mistook the factual situation put before it, in concluding (p15) that the material before the Court was "vague and unsatisfactory"; and/or fourth, it erred as indicated in Ground (2)(a) on p3.

As to the material considerations the Court should have taken into account, its approach should have been similar to that taken when s44(3)(b) of the Limitation Act (NT) is being considered. Mr Southwood referred to the 8 touchstones in that regard referred in Forbes v Davies & Anor [1994] NTSC 40; (1994) Aust Torts Reports 81-279 at 61,400-61,401, including the length of the delay, the explanation for the delay, the hardship to the appellant if leave was not granted, the conduct of the appellant and respondent in the litigation, and particularly, in this case, the prejudice to the respondent if leave was granted. I accept that.

The respondent would suffer minimal prejudice if leave was granted; in particular, the respondent is not unfamiliar with this claim, since it had been on risk in relation to the 1989 injury. He submitted that on this ground alone the appeal should be allowed, on the basis that the Court had not given proper weight to the fact that the prejudice to the respondent would be minimal. However, I note that it was not formally admitted that the respondent had been on risk in 1989, though the Court was informed of it.

He submitted that the Court had failed adequately to consider the explanation for the delay, which the appellant had provided. There had been a need to obtain the further medical evidence obtained: first, the report in fact obtained on 10 February 1994 from Mr Baddeley, to determine whether the respondent might be liable before giving it the s126A(2)(a) notice; second, the critical report of Mr Baddeley dealing with the worker's condition, obtained on 29 August 1994 (annexure "F") before instituting proceedings. In addition, it had been important adequately to assess the extent of the claim; in that regard, Ms Cheong's affidavit sufficiently set out the difficulties encountered in finalising the issue of quantum with the employer (see p7).

Mr Southwood next submitted that the only relevant period of delay to be considered by the Court was the 6 months specified in s121A(2)(b); any delay thereafter before commencing proceedings could not be considered. He relied on Murray v Baxter (supra) at 623. I rejected this proposition at p21.

Mr Southwood submitted that par2 of the respondent's solicitor's letter of 2 April 1994 (annexure "E"), itself established that the appellant could not have commenced the proceedings within the 6 months period specified in s126A(2)(b) because it had not as at that date indemnified the employer, and so did not then fall within s126A(2) - because it was not at that time "an approved insurer who has indemnified an employer Ö".

Mr Southwood submitted that the Court took into account an irrelevant consideration, when stating (see p14) that there was "no explanation for the [appellant's] failure to join the respondent as a party to the worker's proceedings". He submitted that under s126A(2) the appellant had a choice as to how it would seek to enforce its claim against the respondent: it could either join the respondent as a party to the worker's proceedings under s126A(2)(b)(ii), or institute separate proceedings against it under s126A(2)(b)(i). If the appellant chose the former course, the convenience of the worker had to be considered. Given that it was likely that in this case there would be a protracted argument between two insurers, it may have been that an application to join the respondent as a party to the worker's proceedings would have been refused. He submitted that the affidavit material showed that as far as concerned the worker, his proceedings were never really contested.

Mr Lindsay of counsel for the respondent made various submissions directed at three broad issues: whether the appellant gave notice "as soon as practicable" under s126A(2)(a); the consequences of its failing to do so; and whether time should have been extended under s126A(2)(b). I deal with these submissions, seriatim.

"(1) Whether notice under s126A(2)(a) was given 'as soon as practicable"

The appellant's duty to notify the respondent pursuant to s126A(2)(a) arose when, having accepted liability to the employer under its policy of insurance and s126A(1) - at which time it "has indemnified" the employer within the meaning of s126A(2) - it became aware of the potential liability of the respondent. Whether or not it "has indemnified" the employer in the sense of having paid the employer, is irrelevant to that duty. I agree.

In support of this interpretation of s126A(2)(a), Mr Lindsay made the following 3 submissions.

(a) It is significant that s126A(2)(a) refers to "the employer's liability to pay", when referring to the indemnity by the insurer; this connoted that "has indemnified" did not mean "has paid the employer", but "has accepted liability under the policy of insurance". On this construction, when the appellant, having received the employer's claim, accepts that it is liable under its policy to indemnify the employer for compensation that may be payable, it "has indemnified" the employer for its liability to the worker, in terms of s126A(2). This approach views "liability" as meaning "obligation to pay", as opposed to payment. I note that this entails reading "has indemnified" as "has agreed to indemnify". I agree.

(b) The construction advanced in (a) above, is supported by s126A(2)(b)(ii). This provision contemplates that where there is a disputed proceeding between worker and employer (see the reference to Division 4 of Part VI - claims for compensation) as to liability, where no payment has been made by the employer, the "other insurer" (whom the s126A(1) insurer is "aware Ö may be liable to indemnify the employer") may be joined in that proceeding - though the s126A(1) insurer, ex hypothesi, has at that time neither accepted that it is liable to, or has paid, the employer. I agree.

Mr Lindsay noted that it has never been in issue that the appellant has, at all relevant times, accepted that it is obliged to indemnify the employer.

Mr Lindsay also submitted that "other proceedings" refers to proceedings between a worker and employer for compensation, a construction supported by the reference to Division 4 of Part 6 in s126A(2)(b)(i). I agree.

(c) The test laid down in Maddalozzo v Maddick (supra) at 37-38 (see p24) does not apply, because s80(1) does not have a reference point after which notice must be given "as soon as practicable", while s126A(2) has an internal reference point, namely, the appellant's "becoming aware of the [respondent's] potential liability". I agree.

Consequently, the matters relied on in Maddalozzo v Maddick (supra) to determine the reference point for "as soon as practicable" in s80(1), are not relevant to s126A(2)(a). Mr Lindsay submitted that for the same reason the approach in McMillan v TIO (supra) at p26 did not apply. He submitted that the test might be discerned in the observation by Fletcher Moulton LJ in Egerton v Moore [1912] 2 KB 308 at 315 cited in Maddalozzo v Maddick (supra) at 37, viz:

"Ö it is clear that the workman Ö was suffering from something which he might have to claim to be a consequence of the accident. It was his business, at once, to give notice. " (emphasis added)

He submitted that the words emphasized might indicate the test to be applied: as soon as the appellant became aware of the respondent's potential liability, it was the appellant's duty, at once, to give notice to the respondent. This construction would mean that "as soon as practicable" in s126A(2)(a) means "at once", when the necessary awareness is acquired. I reject such a construction.

Mr Lindsay conceded that the reference point in s126A(2)(a) - the point at which the s126A(1) insurer became "aware of the [other] insurer's potential liability" - did not mean awareness of the remotest possibility of such a liability existing. There was an elasticity in the 'reference point' of awareness. However, he submitted that on the facts of this case the 'reference point' was clearly established as 10 November 1993 (annexure "A"), when the appellant received the worker's claim form; that was because the worker there stated that -

"The present condition caused by the work I do is an aggravation of the original injury. Original injury [lower left leg, crush] dated 8/10/89".

Therefore it was the appellant's duty under s126A(2)(a) to give notice, at once, on 10 November 1993; it was not in fact given until 22 March 1994 (annexure "D"), over 4 months later. I reject the approach in this submission, and accept the appellant's submission (pp25, 26).

"(2) The consequences of failing to give notice 'as soon as practicable' under s126A(2)(a)"

Mr Lindsay submitted that there are two possible consequences of breaching s126A(2)(a):

(a) If the notice is a pre-condition to making a claim pursuant to s126A(2)(b), such a claim is barred, as in s80(1) of the Act.

(b) Giving (or failing to give) notice may be only a factor to be considered in the exercise of the Court's discretion under s126A(2)(b). This was the view taken by the Court. If so, it was a relevant factor in this case which the Court had properly taken into account (pp14, 15) in exercising its discretion not to extend the time to commence proceedings.

In support of consequence (a), Mr Lindsay made 3 submissions, acknowledging that what was involved was a matter of statutory construction with the object of giving effect to the legislature's intention.

(i) First, s126A(2)(a) is expressed in mandatory terms, "shall notify". Further, s126A pertains to a private right as opposed to a public right, and this provides some guidance as to whether strict compliance is required; see Hunter Resources Ltd v Melville [1988] HCA 5; (1987-88) 164 CLR 234 at 251-252. I consider that these matters do not go to support consequence (a) above.

(ii) Whereas s126A(2)(b)(i) and (ii) are clearly procedural in nature, s126A(2)(a) should be construed as a substantive provision, because of where it appears within s126A and because of its content. The structure of s126A(2)(a) is akin to the structure of s80 of the Act considered in Maddalozzo v Maddick (supra) where it was held that the giving of notice was a condition precedent to the right to claim compensation. I do not consider that the analogy with s80 holds.

Mr Lindsay conceded s126A(2)(a) did not expressly state that a claim under s126A(2)(b) is not maintainable if notice is not given; cf. ss80(1) and 182(1). I consider it a very important difference.

(iii) The context, and the scheme of the Act also pointed to this construction. See Maddalozzo v Maddick (supra) at 35 viz:

"Thus the Act seeks to prevent injuries from occurring, as well as to rehabilitate those who are injured and to provide for monetary compensation. The shift of emphasis, when compared with the former Act, is apparent when it is realised that the former Act provided solely for compensation for injured workers and for a compulsory insurance scheme to make sure that the compensation would be paid. Under the former Act, an employer could ignore the welfare of his injured worker and leave the whole problem, including the problems associated with compensation, to his insurers. This is plainly no longer the case. Consequently, the necessity for prompt notice of an injury is not, as it may have been under the former Act, to merely ensure that the employer (in reality the insurer) is protected from stale demands: cf Thompson v Gould & Co Ltd [1910] AC 409 at 413 per Lord Atkinson. It is directly in the interests of all the parties, worker, insurer and employer, that notice of injury is given as soon as is practicable"

I note that Maddalozzo v Maddick (supra) was concerned with s80(1) of the Act; s126A is directed to questions arising as between insurers, and s126A(1) is intended to ensure that a worker's rights are not affected by any such questions. It may be that entirely different considerations to those relevant to s80(1), apply. However, Mr Lindsay submitted that the amount of the compensation to be paid to a worker depends in part upon the steps an employer may take to rehabilitate the worker. Therefore an insurer such as the respondent has an active interest in the extent and degree of rehabilitation a worker requires. This pointed to the notice provision being a mandatory precondition to the right to claim contribution, as it enabled an insurer given such notice to deal with the issue of rehabilitation expeditiously. I do not regard this line of argument as persuasive.

"(3)""Whether time should have been extended under s126A(2)(b)"

Mr Lindsay submitted that Ms Cheong's affidavit did not refer to when in fact the appellant became aware of the respondent's potential liability, although that was a crucial matter for the appellant to prove in its application. He submitted that it must be assumed that the appellant became aware of the respondent's potential liability on 10 November 1993; accordingly, the 6 months time limit within which to commence proceedings pursuant to s126A(2)(b), expired on 10 May 1994. Accordingly, the extension of time required was from 10 May 1994 to 4 January 1995, some 8 months. I do not accept the initial assumption (see p35), and the rest falls with it.

Mr Lindsay agreed that the matters referred to by Mr Southwood were the relevant matters in assessing whether the application for extension of time should be granted; see p30. He submitted that the Court had considered those kinds of matters - delay, prejudice, conduct of the parties - in exercising its discretion, and gave appropriate weight to them; it applied the correct tests. The appellant had to show that it plainly erred in applying them; I accept that.

Mr Lindsay focused on two of the relevant factors, submitting -

(a) The appellant did not merely delay, but took positive steps in respect of another course during that period. Both the delay and the conduct of the appellant during that time have to be considered, particularly in light of the public policy of the Act which requires expedition.

(b) The respondent had suffered substantial prejudice from the delay in instituting proceedings.

As to the issue of delay in (a), Mr Lindsay submitted:

(i) The period of delay is not restricted to the 6 month period in s126A(2)(b); the Court was right in considering the whole period of delay. I consider that that is clearly correct.

(ii) The affidavit of Ms Cheong did not set out satisfactory reasons for the delay. The Court was not mistaken in the way it assessed the evidence placed before it.

Mr Lindsay submitted that the appellant had to explain the delay from the point of time when it first became aware of the respondent's potential liability, until it commenced proceedings against the respondent. As to this, the appellant had failed to assert and establish when it first became aware of the respondent's potential liability. In par8 of Ms Cheong's affidavit, an explanation of the delay from "on or about 22 March 1994" to "16 November 1994" is given. But that is not the relevant period, and consequently, the explanation is unsatisfactory, as the Court found. In any event, the explanation in par8 is unsatisfactory; for example, the time said to be taken in ascertaining the correct amount of compensation was not relevant to the question of giving notice under s126A(2)(a); and did not purport to be supported by the material in the affidavit, since what was involved was a closed period of some 8 weeks compensation from 22 September 1993 to 21 November 1993. Mr Lindsay submitted that even if the material in par8 was relevant, it did not adequately explain the delays.

He further submitted that par10 of Ms Cheong's affidavit was also a bald statement not supported by the evidence. It did not say when the appellant decided to accept the worker's claim. In addition, its contents were not relevant to the question of deciding whether to commence proceedings against the respondent. The report of Mr Baddeley dated 29 August 1994 (annexure "F"), did not add anything to his previous report dated 10 February 1994 (annexure "H"). As to that, I should say that the later report dealt with the relevant question of the significance of the 1989 injury, more specifically than had the earlier report.

Mr Lindsay submitted that the affidavit did not explain why a 6-month delay occurred between the 2 reports, 10 February 1994 and 29 August 1994. The affidavit did not expressly state that the appellant needed to obtain medical evidence to decide whether or not it would indemnify the employer, and to decide on the extent of the indemnity. Consequently, par5 of the affidavit does not support the contention that it was reasonable conduct by the appellant to await specialist medical opinion before notifying the respondent.

Consequently, it cannot be said the Court erred in law in not accepting the appellant's interpretation of the evidence, in its submissions.

Mr Lindsay also submitted that it was relevant for the Court to consider not only why the appellant did not commence its proceedings within time, but also why it apparently changed its intention as stated in its solicitor's letter of 22 March 1994 (annexure "D") to join the respondent into the then-current worker's proceedings. The latter course would have been more expeditious in the circumstances of this case, particularly in obtaining evidence from the worker; the respondent would have been party to the proceedings relating to the amount, as stated in its solicitor's letter of 22 March 1994 (annexure "D"). Mr Lindsay submitted that what the appellant had done, without explanation, could result in a longer and more protracted trial, which would be potentially more expensive.

In summary, on this aspect of delay, Mr Lindsay submitted that there were defects in the affidavit material, gaps that remain unexplained. The matters sought to be relied on are not relevant to the question in issue, and the Court was not in error in dealing with the affidavit material in the way it did.

As to factor (b) on p39, the question whether the respondent had suffered prejudice from the delay, Mr Lindsay submitted that both the respondent and the system of administration of justice generally - the latter in the sense of duplicitous litigation - would suffer prejudice. He submitted that as the Court had had regard, and gave appropriate weight, to both types of prejudice (p15), no error of law is disclosed.

In support, he submitted that the respondent would be prejudiced in that it cannot directly re-litigate the issues in the Agreement; rather it would have to do so in a roundabout way: it could not interrogate the worker, it could not have contemporaneous medical reports, it could not participate in decisions about the rehabilitation of the worker.

As to the prejudice suffered by the system of administration of justice, he submitted that the appellant's proceedings would in effect go behind the Agreement recorded in the Court and possibly create inconsistent decisions. If so, he submitted, the Agreement could be "opened up" by the Court hearing the contribution proceedings pursuant to s108(7) or (9); I do not consider that that can occur. Mr Lindsay specified that the real risk was of having conflicting decisions of the Court. Further, he noted that the Agreement released the appellant from all future liability, while the respondent faced a continuing liability.

(1) The 'reference point' for notification is, as the respondent submitted, the awareness by the s126A(1) insurer that another insurer is potentially liable. The key question is: at what point in time are there reasonable grounds for the relevant insurer to become aware of another insurer's potential liability? I accept that.

(2) The word "potential" is defined in the Macquarie Dictionary as "possible as opposed to actual", " capable of coming into being", "expressing possibility". Mr Southwood submitted that in the present context, the emphasized meaning was applicable. I agree. Similarly, in the Shorter Oxford Dictionary, the word "potential" is defined as "possessing potency or power, potent, commanding", "possible as opposed to actual", and "capable of coming into being, latent".

On this basis, Mr Southwood submitted that what is to be considered in s126A(2)(a) is whether the other insurer is capable of being liable. To ascertain that, first, some consideration has to be given to the preconditions in s126A(2); and second, the principles of law and equity must be considered.

He submitted that the critical precondition in s126A(2) is that the s126A(1) insurer "has indemnified" the employer or is likely or is capable of being required to indemnify the insurer. Consequently, if there is some proper ground for its disputing liability to the employer, that is an important factor in ascertaining what point of time is the 'reference point'. I agree.

In addition, there must be some evidence available to establish it is a 'double insurance' case. In this case there was no such evidence until the reports of Dr Goodhand and Mr Baddeley were obtained on 18 January 1994 and 10 February 1994. They indicated that the respondent was capable of being liable to the employer.

(3) As to the interpretation of "has indemnified" in s126A(2): it means "actually paid" as opposed to "accepting liability". This was supported by the public policy of the Act as set out in Maddalozzo v Maddick (supra), in particular the policy that workers should be paid expeditiously, and that rehabilitation should occur expeditiously. I disagree.

In this case, he submitted, the course adopted by the appellant ensured that the worker was paid expeditiously; in fact the worker's claim was resolved within 12 months of its commencement. If the respondent had been joined in the worker's proceeding, the worker would not have been paid as expeditiously, due to the plethora of procedural steps. In addition, the construction of "has indemnified" was not novel; it represents the earlier common law on contribution.

Mr Southwood further submitted, in essence, that this proposed construction of "has indemnified" extends to the (common) situation where an insurer makes funds available to the employer prior to the employer actually paying out money to the worker, and to the situation where the insurer pays the money directly to the worker. That is, it also embraces what is not strictly a reimbursement type of situation; what is being indemnified in these circumstances is the employer's liability. He submitted that this in turn supports the appellant's submission that "has indemnified" means "actually paid", as opposed to accepting liability. As an example of this type of situation Mr Southwood referred to the facts in Mahoney v McManus (supra) at p545.

(4) As to the explanation of delay, he submitted that it is delay in making the claim under s126A(2)(b) that the appellant must explain, not delay in giving notice under s126A(2)(a). I consider both are relevant.

(5) The purpose of s126A(2)(a) was simply to give the other insurer an opportunity to take over a claim, or to request further information. It is not a precondition to making a claim under s126A(2)(b); it is designed merely potentially to avoid litigation.

(6) As to prejudice to the respondent (p42), it is prejudice in defending the proposed claim that must be established; that is, loss of witnesses, fading memory of witnesses, and matters of that order. The respondent had not produced any evidence before the Court to establish such prejudice; for example, the worker remains equally available as a witness to both insurers. There was no hearing of the worker's claim; it was settled.

As to Mr Lindsay's complaint of a now present inability to obtain contemporaneous medical reports, Mr Southwood submitted that the respondent's solicitor's letter of 2 April 1994 (annexure "E"), in effect, barred the complaint. The letter set out a bare denial of liability, and was prior to the Agreement of November 1994; neither in that letter, or subsequently, had the respondent requested any medical reports or sought to have the worker medically examined. It could hardly now complain of being deprived of the opportunity to do so.

(7) As to prejudice suffered by the system of administration of justice (p42), Mr Southwood submitted that the contribution proceedings had no relevance to the Agreement, as the extent of the respondent's indemnity could not ever be greater than the sum actually paid by the appellant. Therefore, the contribution proceedings do not create the dangers of duplicity of result referred to by the respondent.

Mr Southwood also put submissions as to the effect of s108 of the Act; I have already indicated (p42) that there is no substance in the respondent's case on that point.

(8) As to the alleged multiplicity of proceedings, he submitted that it is not a factor that should be taken into account in exercising the discretion to extend time; the proper basis is the justice of the case.

(9) Mr Southwood made further submissions on the application of Murray v Baxter (supra) to the 6-month period in s126A(2)(b), but as I said at p21 I consider the case distinguishable, as turning on the interpretation of a particularly and differently-worded provision.

Mr Lindsay made the following 2 submissions in reply:

(1) The contents of the letter of 2 April 1994 were not a bar to the respondent. Rather, it had to be read in light of the letter of 22 March 1994 (Annexure "D") which states, inter alia:-

"... in the event that you do not accept liability to indemnify the employer ... then it is our client's intention to join you as a party to the proceedings which are on foot in the Work Health Court."

Subsequently, on 2 April 1994, the respondent did not accept liability, but the appellant's stated intention in that event to join the respondent as a party to the worker's proceeding, was never implemented. Consequently, the respondent had lost the opportunity of which it complained, because of the appellant.

(2) The general policy of the Act is to deal with workers' entitlements expeditiously, but that policy consideration must be balanced against other factors such as the ability of the worker to obtain an order for interim payment, and the need for expedition by dealing with all of the issues involved in a case, in one proceeding.

Mr Southwood submitted that the appellant's solicitor's letter of 22 March 1994 had not prevented the respondent from exercising its ability to ask for medical records, and other materials. The worker's ability to obtain an interim payment order is not a sufficient counterbalancing policy consideration, as he would still suffer ongoing prejudice in terms of the costs involved in maintaining litigation really of meaning only to both of the insurers.

At pp16-17 I ruled that the points raised by the appellant for the first time in this Court would be entertained. I accept the appellant's concession that the respondent can raise on appeal for the first time the question whether compliance with s126A(2)(a) is a precondition to instituting proceedings for contribution.

It is trite that the Act is a remedial statute, and like all such Acts should be construed beneficially in the spirit of its manifest purpose. See for example Bist v London and South Western Railway Company [1907] AC 209 at 211 and George Hudson Ltd v Australian Timber Workers' Union [1923] HCA 38; (1922) 32 CLR 413 at 436. I bear in mind the general observations of Mildren J in Maddalozzo v Maddick (supra) at 35, set out at p37. I also bear in mind in interpreting s126A the observations of Mason and Wilson JJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1980-81) 147 CLR 297 at 320-321.

I have commented on the various detailed submissions to some extent in the course of this judgment, so I will now be brief.

The effect of the medical evidence as it stood before the Court indicated that there was a sound basis for the appellant's claim for contribution: that is, that the worker's incapacity of 1993 was arguably wholly attributable to the injury of 1989. I accept Mr Southwood's submission to that effect at p18. Clearly, the appellant had an arguable case for contribution, as the evidence stood before the Court. This is a consideration which favours an extension of time; it had not been placed before the Court.

As to the question of 'double insurance' I refer to my comments at p19. I do not consider that this was a situation of 'double insurance', as that concept is known to the general law; the respondent was on risk as to the 1989 injury, and the appellant was on risk as to injuries occurring in 1993. Their liabilities are not co-ordinate. See the discussion in Manufacturers Mutual Insurance Ltd at p22, with which I respectfully agree. I consider that it is not particularly helpful to seek to apply the strait jacket of 'double insurance' to s126A of the Act. The question of what the appellant must prove remains to be argued at a substantive hearing, and I should say no more about it.

Although there are arguments of substance both ways, I consider that the better construction of the phrase "has indemnified the employer" in s126A(2) is not that the s126A(1) insurer must have actually paid the employer. Further, I consider that it is not a precondition to instituting proceedings under s126A(2)(b) that the s126A(1) insurer has actually paid the employer, and the appellant's consequential submissions at pp20-21 fail.

I have already indicated at p21 that the appellant's submission bolstered by Murray v Baxter (supra), that the only delay it had to explain as regards s126A(2)(b) related to the 6 months there specified, fails. An applicant under s126A(2)(b) for an extension of time beyond the 6 months which the statute allows, must as part of its case for the exercise of the discretion in its favour, explain the reasons why it should be granted leave; these will normally encompass the reasons for any delays that have occurred, over the whole period.

I consider that Mr Southwood's submissions (2)(a) at pp23-28, (2)(b) at p28, and (2)(c) at pp28-29 are correct, except where indicated to the contrary in the course of discussing them. It follows that the Court made the 2 errors of law mentioned at p23 in reaching its conclusion (p15) that the appellant had not explained why it had not notified the respondent "as soon as practicable" in terms of s126A(2)(a), and (p14) as to the 'delay' in notifying the respondent until 22 March 1994.

I consider that the Court was correct in its view that notification in terms of s126A(2)(a) is not a precondition to the grant of an extension of time under s126A(2)(b). I would not place any significant weight on the appellant's 'expressio unius' argument (pp28-29), but otherwise I consider its submissions (pp28-29) are correct.

The major question is whether the appellant has shown that the Court has clearly erred in reaching its decision, in the exercise of its discretion, that time should not be extended. I consider for the reasons earlier stated that the Court erred in its approach to determining the 'reference point' for notification under s126A(2)(a) of the Act; this led to error in assessing the delay involved for the purposes of s126A(2)(b), and in assessing the explanation for that delay, particularly in relation to the significance of the obtaining of the medical evidence. The fact that the appellant had an arguable case was not properly raised before the Court; hence it could not deal adequately with the question of hardship to the appellant, if leave was refused.

I do not consider that the respondent faces in reality the prejudice upon which it relies (p42).

In light of the foregoing, I allow the appeal on the basis of Grounds 1(a), 1(b) and 2(a) on p3.

I will hear the parties on the orders which should be made in the light of these findings, and on the question of costs.