POPOVIC and THE ELECTROLYTIC ZINC COMPANY OF AUSTRALASIA LTD

1 I agree that this appeal should be dismissed for the reasons prepared by Zeeman J

POPOVIC and THE ELECTROLYTIC ZINC COMPANY OF AUSTRALASIA LTD

2 I agree with the order proposed by Zeeman J and the reasons he has expressed.

POPOVIC and THE ELECTROLYTIC ZINC COMPANY OF AUSTRALASIA LTD

3 The first-named appellant (to whom I will refer to as "the appellant") was a plaintiff in the action. He claimed damages for personal injuries allegedly suffered by him whilst he was a passenger in a motor vehicle being driven by the first-named respondent. He alleged that the first-named respondent was acting as the agent of the second-named respondent and that as the result of the negligent driving of the vehicle by the first-named respondent it came into collision with another motor vehicle. The appellant claimed that he sustained personal injury in that collision. The second-named appellant (to whom I will refer to as "the employer") was the other plaintiff in the action. It sought to recover indemnity from the respondents in respect of the compensation paid by it to the appellant in respect of the injury so suffered by the appellant. That indemnity was sought pursuant to the provisions of s8H of the Workers' Compensation Act 1927.

4 Either expressly or by necessary implication the learned trial judge determined the issues relating to liability wholly in favour of the appellant, and those issues require no consideration. Upon this appeal, the appellant sought to attack the quantum of the damages awarded by the learned trial judge as being inadequate, and the employer contended that the extent of the indemnity granted to it was inadequate.

5 I deal firstly with the appeal in so far as it was brought on behalf of the appellant. The grounds of appeal which were argued on his behalf (after the notice of appeal had been amended by adding additional grounds and after counsel had indicated that he was abandoning certain of the original grounds) were as follows:

"2 The Learned Trial Judge erred in law and in fact in holding that the First-Named Appellant was not at any time following 12 June 1984 totally or partially incapacitated for work as the result of an injury of the 7th June 1983.

3 The Learned Trial Judge erred in law and in fact in that he gave insufficient or no weight to medical witnesses who despite doubts of the genuiness (sic) of the First-Named Appellant's complaints were still of the opinion that he was disabled by reason of the accident of 7th June 1983.

6 The Learned Trial Judge erred in fact and in law in that he gave no or insufficient weight to the evidence of medical witnesses who formed the opinion that the First-Named Appellant was suffering from pain and disability causally connected to the accident and arising therefrom by reason of psychological factors affecting the original injury and disability.

7 The Learned Trial Judge erred in fact and in law in rejecting evidence of expert witnesses as to bodily movements and substituting instead his own opinion."

6 At the trial, the credit of the appellant was very much in issue. The learned trial judge formed an adverse view of the credit worthiness of the appellant. In his reasons for judgment, he said this:

"I am not prepared to accept the plaintiff's evidence. In addition to the specific matters which reflected adversely on his credit to which I have already referred, his demeanour in the witness box also led me to seriously doubt the reliability of his evidence. Whilst making full allowance for his linguistic limitations, his tendency to prolixity and the possibility that he did not fully understand some questions, I am satisfied that the plaintiff deliberately attempted to evade giving direct answers to questions which he thought might be embarrassing to his case and that he was prepared to adapt his evidence to suit his own purposes. I find that the plaintiff attempted to mislead this Court and the doctors who examined him as to the disabilities and the pain from which he claimed and claims to be suffering."

7 Counsel for the appellant did not seek to challenge the finding by his Honour expressed in the last sentence of this passage from the reasons for judgment.

8 The appellant's submissions principally were directed towards ground 6 but at the same time encompassed grounds 2 and 3 which were not separately argued. Ground 6 assumes that there was before the learned trial judge evidence of medical witnesses who formed the opinion that the appellant was suffering from pain and disability causally connected to the injury sustained by the appellant as a result of his motor vehicle accident and arising therefrom by reason of psychological factors affecting the original injury and disability. In the light of the learned trial judge's unchallenged finding as to the appellant's credit, for that ground to have any possibility of succeeding there needed to have been before the learned trial judge evidence of such an opinion which was founded upon material other than that which the appellant had told the relevant medical practitioner. If the opinion of an expert witness relies on the existence or non-existence of some fact, that fact must be proved by admissible evidence. Such facts may be proved through the expert or in some other manner. An expert medical witness may have observed certain things upon the examination of a patient. He may express an opinion based on such observations. In such a case, the witness gives evidence not only of his opinion, but also of the primary facts upon which the opinion is based. On the other hand, a medical practitioner may rely upon symptoms or sensations described to him by the patient or upon the observations of others which are conveyed to him. His opinion is an opinion given on the assumption that what he has been told is true. The truth of what he has been told needs to be proved by admissible evidence. If the tribunal of fact does not find that the expressed symptoms or sensations existed or occurred, then the conclusions expressed by the expert based on the existence of those symptoms or sensations have no probative value.

9 In support of ground 6 the appellant relied upon opinion evidence given upon the trial by Dr Pargiter (a psychiatrist), Dr Gibbs (a general medical practitioner having a particular interest in musculo-skeletal injuries), Dr Jackson (a medical practitioner having a particular interest in pain management), Mrs Laver (a psychologist), Mrs Fish and Miss Nissan (both occupational therapists).

10 I have carefully examined the evidence of those witnesses. It is plain that each of them significantly relied upon what the appellant had told them. During argument, counsel for the appellant conceded, and in my view correctly conceded, that in order to succeed on ground 6, and indeed to succeed on this appeal at all, the appellant needed to be able to point to circumstantial evidence from which the only reasonable inference that could be drawn is that there was expert medical opinion evidence to the effect that, assuming that the appellant had misled the person giving the opinion with respect to the extent of the appellant's symptoms or disability, it was more probable than not that since about the end of 1985, the appellant had actually perceived disabling symptoms, that such symptoms were non-organic in origin and that their cause was exposure to identifiable psychological stressors during the period that the learned trial judge found the appellant to be disabled, and that the learned trial judge erred in failing to draw such an inference.

11 That concession was made after counsel had conceded that there was no direct evidence of any expert medical opinion to that effect.

12 None of the evidence to which counsel referred answered to the description of being such circumstantial evidence. I would go so far as to say that none of it remotely answered to the description of being such circumstantial evidence. Certainly there was evidence of medical witnesses answering to the description of the type of evidence referred to in ground 6 but, once it was accepted that those witnesses had been misled by the appellant as to his perceived pain and other symptoms, the basis for those opinions wholly or largely disappeared. In my view, the trial judge was perfectly correct in rejecting those opinions in so far as they related to any period beyond which the learned trial judge was not satisfied the plaintiff had suffered from a disability. Once the adverse finding as to the appellant's credit had been made, the substantial evidentiary basis for the opinions disappeared.

13 Whilst counsel appears to have conceded that that conclusion also had determined the appellant's appeal, I ought to mention several of the matters the subject of specific submissions, as it might be said that those matters were not necessarily determined by the answer to the proposition put. These matters are as follows:

(a) Drug addiction. The submission appears to be that the appellant became addicted to Valium prescribed for him during the period when the learned trial judge found that he was disabled as a result of the injury suffered in the accident. No basis for this can be found in the evidence. Small dosages of Valium were prescribed for the appellant at various times during this initial period. After that period there was a significant period when the appellant was not taking Valium. There was no evidence upon which a finding of addiction during the initial period could have been made.

(b) Bodily movements seen in the films in evidence. This is the subject of ground 7. In particular the complaint appears to be that his Honour did not adopt the views of Miss Nissan and Mrs Fish as to what they saw in the films. His Honour correctly observed, when speaking of opinions expressed by Miss Nissan, that he was in as good a position as she was to draw inferences from the video.

(c) The grant of an invalid pension to the appellant. This was relied upon by counsel but he did not develop any argument. The view formed by the decision maker responsible for determining that the appellant satisfied the criteria for the grant of an invalid pension is irrelevant. It was for the learned trial judge to form his own views and even if the materials before him had been the same materials as those before such decision maker the trial judge was required to come to his own conclusions. To the extent that the grant of the pension was said to have reinforced the appellant's perception of pain and disability and was therefore a psychological factor affecting the original injury and disability asserted in ground 6, it cannot properly be relied upon if, as the learned trial judge found, the appellant sought to mislead those examining him and if, as such finding would seem to indicate, his own deceit rather than any physical condition occasioned by the accident was the effective cause of his being classified as being eligible to receive such a pension.

(d) The extensive nature of medical treatment undergone by the appellant. Counsel submitted that the evidence of Dr Pargiter was that he considered the fact of treatment to be an important consideration in coming to his conclusions. I do not consider that that can advance the matter. The learned trial judge found that the appellant had endeavoured to mislead those treating him. It is a reasonable inference that much of the treatment undergone by the appellant was prescribed as the result of the treating doctors having been so misled.

14 In my view, the appellant's appeal has no merit.

15 I turn now to the appeal on the part of the employer. There is only one ground of appeal, which is expressed as follows:

"5 The Learned Trial Judge erred in law and in fact in holding that workers' compensation weekly payments and medical and other expenses were not payable beyond 12 June 1984 despite the Second Named Appellant having paid out further sums to which it was entitled to an indemnity from the Respondents."

16 There was no argument before the learned trial judge as to what the employer had paid to the appellant in purported compliance on the part of the employer with its obligations under the Workers' Compensation Act 1927, the accident having occurred whilst the appellant was travelling from his home to his place of employment with the employer.

17 The types of payments and the amount of each were as follows:

future weekly payments beyond 29 May 1984 15,500.00

18 In dealing with this claim, the learned trial judge said:

"The second plaintiff carries the burden of proving, inter alia, that the compensation it seeks to recover was paid in respect of an injury in respect of which the defendants had a liability to pay damages. The second named plaintiff argued that no evidence had been led by the defendants to suggest that the plaintiff had been fit to return to the type of work which he was performing prior to the accident. But the second named plaintiff carries the burden of proof and for the reasons which I have given, I am not satisfied that it has been affirmatively demonstrated that at any time following 12 June 1984 the first plaintiff was totally or partially incapacitated for work as a result of an injury in respect of which the defendants were liable to pay damages."

19 His Honour then assessed the employer's claim by allowing the whole of the weekly payments, part of the redemption amount, namely $1,373.00 (which he described as being the proportion attributable to the period 30 May to 12 June 1984), part of the medical and other expenses, namely $7,121.54 (being all those expenses paid to 12 June 1984), and none of the lump sum payment.

20 Counsel for the employer has submitted that the whole of the amount claimed under s8H of the Act should have been allowed. I did not understand him to challenge the conclusion reached by his Honour that it had not been affirmatively demonstrated that at any time following 12 June 1984 the appellant was incapacitated for work as the result of the injury sustained in the motor vehicle accident on any grounds other than those upon which the appellant based his appeal. Rather, his submissions proceeded upon the basis that assuming that his Honour's conclusions as to that matter of fact were correct, then, in the circumstances as they reasonably appeared to the employer at the time the relevant payments were made, as a matter of statutory construction, the employer was entitled to recover the whole of the amount claimed.

21 In order to consider that submission, it is necessary to look at the relevant statutory provisions. They are to be found in the Workers' Compensation Act 1927. Although that Act was repealed by the Workers' Compensation Act 1988, that repeal does not affect the employer's rights by virtue of s16(1) of the Acts Interpretation Act 1931.

22 The first provision which needs to be considered is s8H(1) which is in the following terms:

"8H - (1) Subject to this section, where an injury for which compensation is payable to a worker is caused under circumstances creating a liability in some person other than the employer to pay damages in respect thereof to that worker the employer may recover indemnity against that person in respect of the compensation paid by the employer to the worker in respect of that injury."

23 Section 8H is contained in Part II of the Act, which Part also contains the following provision:

"8F In this Part, unless the contrary intention appears -

'compensation', when used in relation to an injury, means any compensation or any such costs as are referred to in section 8A payable in respect of that injury under this Act or under a scheme certified under section 12;

..... "

24 I turn to the medical and other costs. Section 8A deals with such costs and inter alia contains the following provision:

"8A - (1) In any case where a worker suffers injury by accident .... arising out of and in the course of his employment, and the worker .... is .... entitled to compensation under section 5 in respect of such injury .... the employer shall, subject to this section, be liable to pay, in addition to the compensation, if any, otherwise payable by the employer in accordance with this Act -

(a) the reasonable costs of any medical, hospital, nursing and ambulance services reasonably incurred by the worker by reason of the injury .... on and after the date of disablement;

25 It is implicit from the conclusions arrived at by the learned trial judge that he was not affirmatively satisfied that the costs which he disallowed, ie those paid after 12 June 1984, were incurred by reason of the injury. That was a conclusion reasonably open to the learned trial judge.

26 If it is not established that the relevant costs were incurred by reason of the injury, then it has not been established that the relevant costs were payable under s8A. It follows that the relevant costs do not fall within the definition of "compensation" contained in s8F and that the employer is not afforded any indemnity in respect of those costs under s8H(1).

27 I turn to the lump sum payment. It appears that the evidence before the learned trial judge as to that sum was meagre to say the least. It appears to have been agreed that there was a payment described as a lump sum disability sum of $4,694.00. There does not appear evidence as to the basis upon which that was calculated. I infer that it was paid by reference of r.5 or r.6 of the First Schedule to the Act, which is given force by s5. The probability is that it was a sum calculated by reference to the considerations set forth in r6(1) and paid by an agreement authorised by s13.

28 The argument addressed to the court appears to proceed upon the basis that the payment was referable to a permanent disability on the part of the appellant resulting from the injury sustained in the accident. I will assume without deciding that that was a conclusion open upon the evidence. Even making that assumption, it is implicit from the conclusions reached by the trial judge that he was not satisfied that the appellant suffered any permanent disability resulting from the injury sustained in the accident.

29 Before the employer is entitled to an indemnity, it must be able to categorise the payment as compensation within the meaning of s8F. In the present context, that means that it must establish that it constituted compensation payable in respect of the injury suffered by the appellant in the course of the accident. As to whether or not it was payable requires a consideration of r.5 and r.6. Before the learned trial judge could have been satisfied that it was payable, he would have needed to have been affirmatively satisfied of the existence of facts which attracted the application of one or other of those rules. It is plain that he was not so satisfied. It might be thought that there was no evidence upon which he could have been so satisfied. On the hearing of the appeal counsel did not refer the court to any material upon which it would have been open to the learned trial judge to make the necessary findings of fact.

30 Finally, I deal with the question of the redemption payment. As I understood the submission on the part of counsel for the employer as finally refined, it went as follows. Upon the findings of fact made by the learned trial judge as to the accident and as to the initial period of disability suffered by the appellant as a result of that accident, the employer became liable to pay weekly compensation to the appellant. Having commenced to make those payments, the employer remained liable to continue making those weekly payments until relieved from that obligation by the operation of s21(1). At no time did s21(1) authorise the employer to cease weekly payments. Weekly payments were, therefore, still payable at the time the redemption was effected and the liability on the part of the employer to pay those payments was one in respect of which the employer was entitled to indemnity regardless of whether, as a matter of fact, the appellant was then disabled. In any event the employer was entitled to act upon the basis of the materials available to it, which indicated that the appellant was disabled. The redemption amount was paid in lieu of such weekly payments and therefore the employer was entitled to an indemnity in respect of that. It is necessary to examine this submission carefully.

31 Section 21(1) of the Act is in the following terms:

"21 - (1) An employer may terminate or diminish a weekly payment where the circumstances are such as to justify termination or diminution, as the case may be, in the following cases only:-

(a) Where a worker in receipt of a weekly payment in respect of total incapacity has returned to work;

(b) Where a worker in receipt of a weekly payment in respect of partial incapacity is receiving weekly earnings in excess of the amount upon which the amount of such weekly payment was determined;

(c) Subject to the provisions of this section, where a medical practitioner, after examining the worker, has certified as prescribed, that the incapacity of such worker is no longer due, or is no longer wholly due, to the accident in respect of which the weekly payment is being made;

(d) In pursuance of an order of a judge as hereinafter provided; or

(e) Where the worker ceases to be entitled to such payment under the provisions of this Act."

It has been held on a number of occasions that this provision lays down the bases, to the exclusion of all others, upon which weekly payments which have been lawfully commenced under the Act may be terminated or diminished (Barber v Associated Pulp and Paper Mills Ltd [1981] Tas R 387 (NC 21), Upston v Temco Pty Ltd Serial No 104/1982 and Carr v The Glenorchy Municipality Serial No 54/1988).

32 Section 21(1) does not require, as counsel seemed to suggest, a judicial determination before weekly payments may be terminated or diminished. A judicial determination may be made on a review under s22, and such a determination may authorise termination or diminution under s21(1)(d). If the provisions of s21(1)(c) are invoked, then there may be a requirement for a judicial determination by virtue of the provision of s21(3). Paragraphs (a), (b) and (e) do not depend for their operation on any judicial determination. In each case, it is a matter of fact whether the worker falls within the provision of such paragraph at any particular time. It is not correct to say, as appears to have been assumed by counsel for the employer, that an employer who asserts that a worker has fully recovered from his injuries must proceed under s21(1)(c). I understand that provision to relate to the case of a worker who is incapacitated but in respect of whom it is asserted that his incapacity is no longer due or is no longer wholly due to the relevant accident. Where there is no further incapacity, then paragraph (e) applies.

33 If, as a matter of fact, a worker ceases to suffer from incapacity for work then he ceases to be entitled to weekly compensation. Rule 3 of the First Schedule provides for compensation rates "in respect of a period of incapacity". In respect of any period during which there is no incapacity, no weekly payment is payable.

34 This question was considered by Burbury CJ in Gamble v Brown's Constructional Enterprises Pty Ltd [1962] Tas SR 368 (NC 9). At p12 of the judgment (unreported, Serial No. 281962), his Honour said:

"There is, in my opinion, nothing in Sec 21 of the Act which confers upon a worker any entitlement to weekly payments of compensation after his incapacity has in fact ceased. On the contrary, the Section provides that one of the cases in which an employer may terminate a weekly payment 'where the circumstances are such as to justify termination' is (v) 'where the worker ceases to be entitled to such payment under the provisions of this Act.' Counsel for the plaintiff submitted that para (v) should be construed as referring only to those cases in which the statute itself directly terminates or suspends weekly payments (ie Sec 25 (1) where a worker in receipt of a weekly payment ceases to reside in Tasmania and Sec. 26 (8) where a worker refuses to submit to medical examination). I can find no justification for reading down in this way the plain words of Sec 21 (v). A worker is only entitled to a weekly payment of compensation 'during the incapacity' (1st Schedule Rule (2)). When incapacity ceases the period of liability for compensation under the Act ceases (Gibson v Wishart (supra)). It follows as a matter of plain words that when the plaintiff's incapacity ceased (as I have found) on the 13th July, 1960 he 'ceased to be entitled to such payment (ie weekly payment of compensation) under the provisions of the Act'."

35 That passage was referred to by Neasey J in Barber v Associated Pulp and Paper Mills Ltd (supra) where his Honour saw no reason not to adopt the conclusion reached therein.

36 If the issue of such an entitlement is raised in proceedings by a worker to recover weekly payments of compensation, the fact that those payments have been lawfully commenced and then terminated is only relevant to the various evidentiary burdens which apply (see Carr v The Glenorchy Municipality (supra) which I consider correctly determined the evidentiary effect of s21 and is to be preferred to anything to the contrary said in Holmyard v Marine Board [1987] Tas R 187 (NC 3)).

37 In the present case, the learned trial judge was not satisfied that it had been established that the appellant suffered from any incapacity arising out of the injury suffered in the accident in respect of any period after 12 June 1984. It followed that his Honour was not satisfied that any payments of weekly compensation were payable to the appellant in respect of any period after 12 June 1984. The employer carried the onus of bringing his claim within the ambit of the indemnity afforded by s8H. It failed to discharge that onus. Had weekly payments continued beyond 12 June 1984, then the employer would not have been entitled to recover such weekly payments from the respondents.

38 It was submitted that notwithstanding what might have been the position with the weekly payments after 12 June 1984 had they been made, nevertheless the redemption payment was recoverable because it was payable under the Act. The argument was that the payment had been made pursuant to an agreement authorised by s24(1) of the Act, so that the amount was payable by the employer under the Act and that therefore the indemnity under s8H was available regardless of it not being established that the appellant was disabled after 12 June 1984. The simple answer to that argument might be that there was no evidence before the learned trial judge that the agreement had ever been registered as required by s24(1)(A), but I will deal with the submission on the assumption that registration was established. Counsel referred to a number of authorities. It will suffice to refer to one of them. In Bain v Frank G O'Brien Ltd [1976] HCA 29; (1976) 135 CLR 158, the High Court was concerned with a statutory provision whereby an employer who did not provide suitable employment for a partially incapacitated worker was required to pay compensation as if the worker was totally incapacitated for work. The question arose as to whether or not the statutory indemnity which was expressed to arise "if the worker has recovered compensation .... the person by whom the compensation was paid shall be entitled to be indemnified by the person .... liable to pay damages" extended to the whole of the payments made upon the basis of total incapacity. The court concluded that it did.

39 Barwick CJ, who agreed with Gibbs J expressed some further reasons including the following (at p160):

"The evident purpose of s64(1)(b) is to ensure that where a liability under the Act has fallen upon the employer of a worker injured by the wrongful act of another, he shall be indemnified by that other for what he, the employer, is required under the Act to pay to the worker. I agree with my brother Gibbs that the indemnity extends only to what by or under the Act he is required to pay."

40 In that case, the Workers' Compensation Commission had in fact made an award whereby the worker was held to be entitled to full compensation upon the basis of total incapacity notwithstanding that his actual incapacity was partial only. In this context, Gibbs J said (at p168):

"It may be accepted for the purposes of argument that the learned Judges of Appeal were correct in thinking that an employer would establish the relevant element of his case by proving that he had paid compensation pursuant to an award of the Commission. In other words, it may be assumed that a payment made in accordance with the provisions of an award must conclusively be taken to have been 'compensation under this Act' within s64(1)(b). However, when the Commission has made an award of compensation, it cannot be said that the payment of an amount greater than awarded is 'compensation under this Act', for the Act does not oblige the employer to pay more than the Commission has awarded. For example, an employer who has been ordered by the Commission to make payments of compensation in a specified amount each week, but who had made payments at a higher rate than that specified, could not recover from a tortfeasor under s64(1)(b) more than the amount which he had been ordered to pay. Similarly, if the Commission ordered payment of compensation to be made for a specified period, the employer who made payments over a longer period could not recover the whole amount paid. In each case, the employer could recover no more than he was obliged by the award to pay."

41 It should be borne in mind that the statutory right to indemnity provided for in the statute being considered by the court in that case was afforded if the worker recovered compensation under that Act. That provision may be contrasted with the provisions of s8H(1) which subsection in turn relies upon the definition of "compensation" contained in s8F.

42 For similar reasons I do not consider that the other authorities cited by counsel for the employer assist his client's case.

43 If the employer became liable to pay the redemption sum its liability derived from the agreement which was entered into by it voluntarily. Upon the findings of the learned trial judge it was under no obligation to pay weekly compensation in respect of the period to which the redemption related, except to an insignificant degree. Could the employer impose upon itself an obligation to pay by way of redemption of weekly payments a much greater amount than that which upon the findings of the trial judge might be expected to have become payable to the appellant by way of weekly payments and then assert that because the agreement providing for such a payment was entered into pursuant to the Act, the amount payable under it was compensation payable by it under the Act and therefore fall within the indemnity afforded by s8H? I consider that of the redemption amount the employer was entitled to recover no more than that sum to which, upon the findings made by the learned trial judge, it had been established the appellant was entitled by way of weekly payments but for the redemption.

44 There is support for that proposition. This matter was considered in Thompson & Sons v The North Eastern Marine Engineering Co Ltd [1903] 1 KB 428. The statutory provision there construed was s6 of the Workmen's Compensation Act 1897 (Imp) which was in the following terms:

"Where the injury for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof, the workman may, at his option, proceed, either at law against that person to recover damages, or against his employer for compensation under this Act, but not against both, and if compensation be paid under this Act, the employer shall be entitled to be indemnified by the said other person."

The action was one wherein the employer claimed a declaration as against the alleged tortfeasor that it was entitled to an indemnity in respect of amounts of weekly compensation which had been paid pursuant to an agreement entered into between the employer and the worker. A written memorandum of that agreement was filed in the manner prescribed by the Act. The compensation could have been recovered in proceedings under the Act and the principal question for determination was whether, having received payments of compensation pursuant to an agreement he had entered into with the employer, it could be said that the worker had proceeded against his employer. In the course of the judgment, Kennedy J made some observations as to the extent of the indemnity. At pp436-7, he said:

"I agree that it is not the same thing to indemnify an employer for an amount which he has settled by agreement with the workman and where the amount has been settled by the judge in the course of the legal proceedings which may follow a claim. It has been suggested that the agreement might be a collusive one, so that more compensation might be given to the workman than the Act would allow, or, at any rate, more than the judge would have given; and it is contended that it would not be fair to compel an indemnity in respect of such an amount. I feel the weight of that argument. Would it be open to the party from whom the employer seeks indemnity in either of the suggested cases, where a jury has found that he is to blame for the injury to the workman, to open the question of the liability of the employer, or the reasonableness of the amount of the compensation paid by the employer? Difficulties undoubtedly exist. I think that some defences must be open to the party from whom indemnity is claimed, as they would be in the case of an award where the employer has not availed himself of the provisions of rules 19 to 23 of the Workmen's Compensation Rules, 1898. Those rules provide for notice of the arbitration being given to the person from whom the employer claims an indemnity, so that he may if he pleases appear before the Court; and it is provided that if he does not appear he is to be deemed to admit the validity of the award as to any matter which the judge has jurisdiction to decide in the arbitration, 'whether such award is made by consent or otherwise'. Where, however, the amount of compensation is fixed by a voluntary agreement and not by any award, as is the case here, the third party has no chance of interposing, and it must, I think, remain open to him to contend in answer to the claim for indemnity, not only that the injury to the workman was not caused by his fault, but also that the compensation is not paid under the Act if the amount is, in fact, greater than the amount permitted by the Act; or that the employer here was not liable to pay compensation under the Act; and, further, I think he may also say that, although the amount of compensation fixed by the agreement is compensation paid under the Act - since the employer was liable and the amount is within the limits set by the Act - yet still it is not an amount which it was reasonable for the employer to agree to pay, having regard to the nature of the injury and the condition and circumstances of the workman. I think he would be entitled to ask the jury to say what would be a reasonable amount of compensation for the employer to have agreed to pay."

45 Further observations as to this matter were made by Phillimore J in Nettleingham & Co v Powell & Co [1913] 1 KB 113 where, in considering the then English provision whereby the tortfeasor could be served with a notice of the claim by the worker against the employer and whereby in default of appearing thereto the tortfeasor was deemed to admit the validity of any award made in favour of the worker against the employer, he said this (at p117):

"I can see nothing in that rule which says that the respondent, if he wants to claim indemnity, is bound to adopt this third party procedure. It is no doubt desirable that he should do so, and, if he does not, his claim may be open to very close scrutiny; he will have to prove everything de novo in his action, and if the third party can show that anything would have been saved by invoking him, the third party will be entitled to have that saving in reduction of the respondent's claim against him; but there is nothing in the rule which goes any further."

46 That judgment was affirmed by the Court of Appeal at [1913] 3 KB 209.

47 Both Thompson & Sons v The North Eastern Marine Engineering Co (supra) and Nettleingham & Co v Powell & Co (supra) were the subject of discussion in the judgment of Pape J in Caterpillar of Australia Pty Ltd v Flett [1967] VicRp 96; [1967] VR 770. His Honour distinguished those cases upon the basis that it was clearly part of the scheme of the English Act that the parties might agree upon the amount of compensation to be paid, and that agreement was one of the modes of settlement under that Act, whereas the Victorian provisions did not provide for agreement as a mode of settling compensation. The Tasmanian Act does make provision for agreement in each of s13 and s24 so that the basis for distinguishing those cases expressed by Pape J does not apply in the present case.

48 Upon the findings of fact made by his Honour, had weekly payments of compensation been continued beyond the date to which they were in fact paid, he would have been satisfied that they were payable under the Act up until 12 June 1984, so that the employer would have been entitled to an indemnity limited to the weekly payments paid up until that date. The approach adopted by his Honour was to provide an indemnity as to that portion of the redemption payment which amounted to a sum representing the weekly payments which would have been payable had there been no redemption. I consider that to be an appropriate approach.

49 It follows that I conclude that I can discern no error in the manner in which his Honour dealt with the claim under s8H.