State Government Insurance Commission (Respondent) v Switzerland Insurance Australia Limited (Trading as Federation Insurances) (Appellant) No. SCGRG 93/2028 Judgment No. 5118 Number of Pages 16 Insurance (1995)

[1995] SASC 5118

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA MOHR(3) BOLLEN(1) AND OLSSON(2) JJ

CWDS
Insurance - double insurance - ratable proportion conditions Employer effecting CTP policy on vehicle as well as common law extension to separate workers' compensation policy - personal injury by one employee to fellow employee - employer vicariously liable for negligent act of one employee - same happening covered by both policies - double insurance - each insurer to bear 50% of gross common law damages plus interest and costs. Motor VehiclesAct 1959 Fourth Schedule; Workers Compensation Act 1971-79 and Wrongs Act 1936 s27C. Albian Insurance Company Limited v Government Insurance Office of New South Wales (1969-70) 121 CLR 342; Commercial and General Insurance Company Ltd v Government Insurance Office of New South Wales (1972-73) 129 CLR 374; National Employers Mutual General Insurance Association Ltd v State Government Insurance Commission (1989) 51 SASR 584 and Ramsey v R B and K A Quinn (Reg'd) and Willis (1987) 137 LSJS 349, applied.

HRNG ADELAIDE, 12 May 1995 #DATE 14:6:1995 #ADD 4:9:1995

Counsel for appellant:     Mr R White

Solicitors for appellant:    Thomsons

Counsel for respondent:     Mr S Walsh QC with Mr M Livesey

Solicitors for respondent: Ward and Partners

ORDER
Appeal dismissed.

JUDGE1 BOLLEN J "Double Insurance" or not. That is the question here.

2. It is an appeal from the order of Judge Anderson, a Master of this Court. The unsuccessful defendant appeals.

3. On 27th January 1983 two men, one named Ramsay, the other Willis, were employed by a man named Quinn. Quinn owned a truck. Ramsay and Willis were employed by him as drivers of the truck. At the time there was a policy of insurance between the respondent (plaintiff below) and Quinn by which the respondent promised to indemnify Quinn against the (speaking loosely for the moment) bodily injury caused by, or arising out of, the use of the truck. That policy was issued pursuant to, and in compliance with, the relevant provisions of the Motor Vehicles Act 1969. It can be called "the CTP policy". That policy indemnified also the driver of the truck against liability for bodily injury to any person which was caused by, or arose out of, the use of the truck.

4. There was at that time another relevant policy of insurance. It was an employers' liability indemnity policy. There was a common law extension to it which indemnified Quinn "against" bodily injury to others. That policy was issued by the appellant (defendant below). As Judge Anderson correctly said:
    "Hence, both policies of insurance indemnified Quinn as to
    its liability at common law for injury."

5. On the 27 January 1983 Ramsay, whilst unloading the truck, was injured as a consequence of Willis' negligence. Proceedings issued by Ramsay against Quinn and Willis led to a finding in his favour against Willis and Quinn, the latter being held vicariously liable for the negligence of the employee Willis. The plaintiff here was required to indemnify Willis for his liability to Ramsay pursuant to the Motor Vehicles Act policy (CTP policy). Judgement was entered and has been satisfied as earlier described. At trial Willis and Quinn were represented by separate firms of solicitors."

6. Mohr J entered judgment in favour of Ramsay on 19th December 1986. His order was confirmed by the Full Court on 2nd July 1987. Mr White said that there was then an issue how judgment should be entered as between the two defendants. I do not think that here relevant.

7. The respondent (plaintiff below) has wholly satisfied the judgment in favour of Ramsay. In this action the respondent sought contribution of 50% of the amount that it had paid, interest and costs. It made the claim "upon the basis that, each having indemnified the defendant Quinn in the earlier action, the payment made should be rateable as between them" (words of Judge Anderson).

8. In this action Judge Anderson found in favour of the respondent. His Honour said:
    "I take the law to now be settled that in such cases where
    there are two insurers it is not appropriate to descend into
    a working out of the rights of the parties. That this is so
    is confirmed by the decision of Rogers J in Government
    Insurance Office of New South Wales v QBE Insurance Ltd
    (1985) 2 NSW LR 543 where, after accepting what was said by
    both the majority and Kitto J in Albion he declined to
    embark upon a working out of the rights of the parties as
    Scholl J had done in Dawson v Barker and Traders Insurance
Co Ltd 1957 VR 504-6. This latter course was that which
    Mr Lander QC urged me to follow. Rogers J accepted what was
    said in Commercial and General, citing the passage which I
    have set out above. His Honour concluded at p 548 by
    saying: `The principle that an action for contribution is
    inappropriate as a vehicle for "the full working out of the
    rights of parties" is couched in terms of complete
    generality in the unanimous judgment of the High Court.'

In my opinion the terms of the judgement pronounced by
    Mohr J and confirmed by the Full Court established that what
    the plaintiff has here met is a judgement related to its
    obligation to indemnify both defendants. Quinn was liable
    to pay because of the provisions of S27C(1) of the Wrongs
    Act 1936. Thus, both present parties were obliged to
    indemnify Quinn due to its common law liability. It is not
    appropriate here to work through what might have been and
    introduce notions of subrogation. Each policy indemnified
    Quinn in precisely these circumstances which attract the
    doctrine of contribution.

Accordingly, the plaintiff is entitled to an order that the
    defendant contribute 50% of the judgement sum which it has
    paid. A similar order is to be made in relation to the
    costs paid."

9. There was a claim of contribution in relation to post judgment interest paid to Ramsay in April 1993. The fact of that payment was acknowledged. But His Honour said as to this issue:
    "The plaintiff also seeks a like contribution in relation to
    the post judgement interest paid by it to Ramsay in April
    1993. Such an order is resisted by the defendant. I can
    discern no adequate reason for the plaintiff failing to pay
    the whole judgement sum in January 1987 when there was no
    substantial question of interest. There has never been an
    indication by the defendant that it agreed to contribute.
    Indeed, from the documents on this topic which came into
    evidence by consent, the opposite seems to have been so from
    the time of the plaintiff's first demand in January 1987.
    The plaintiff knew then, or should have known, that it had
    to indemnify its insured to the whole extent of the
    judgement. There was no point in paying half and hoping the
    defendant would do what the plaintiff saw as the correct or
    honourable thing. The claim in relation to late interest is
    refused."

10. The result in money was that the appellant was ordered to pay $148,794.88 plus interest plus costs. The question of interest came on later. The respondent (defendant), through counsel, made a detailed submission (in His Honour's words) "that I should reopen my reasons for the purpose of recalculating what the correct judgment sum is and how interest should be calculated and in part off-set in relation to workers' compensation payments paid by the defendant. None of this was in anyway alluded to by Mr Lander, QC, who was counsel for the defendant at the trial, by way of alternative submission". His Honour refused to do this. He was correct. He said:
    "To my mind the effect of what Mr Gilchrist wanted me to do
    as to calculation of the judgment sum went well beyond what
    Supreme Court Rule 84.12 may be used for in such
    circumstances as here where the fact of an appeal on the
    approach of the trier at first instance was well known.

I mean his submissions no disrespect but I do not intend to
    respond to them in detail here. To my mind they are for the
    appeal as to this topic and as much was agreed between he
    and Mr Livesey, for the plaintiff. I indicated to them that
    I would not reconsider the matter if the effect of so doing
    was simply to cause the complaint to shift from one notice
    of appeal to the other. It was plain from the response of
    counsel that that would be the net effect of any such
    reconsideration.

Thus, the method of calculation of the final figures
    together with what allowances, if any, should be made, and
    for how long, not having been agitated at trial, can come on
    in the appeal, assuming that fact not there to be fatal. I
    do not consider that this approach by the defendant is
    proper if its real purport is to give some further support
    to an appeal and the breadth thereof.

On the question of interest I must proceed on the basis of
    my reasons. I have dealt with one aspect of interest
    therein and so now am concerned only with the two payments
    of principal and one of costs. I can see no reason to
    change the broad approach which I indicated on 19 October,
    1994. As to the first payment in January 1987 the plaintiff
    is to have interest at 14%. As to the second instalment and
    costs the plaintiff is to have interest at 8% from February
    1993. I accept counsel's offer to do the arithmetic.

Nothing has been said as to costs. They should follow the
    event and be the plaintiff's to be agreed or taxed."

11. There is an additional issue before us about the amount allowed for interest.

12. The appellant appeals against the finding that the principles of double insurance apply here. I will not set out the various grounds of appeal. But before Judge Anderson and before this Court counsel for the appellant/defendant argued that there was no double insurance. Judge Anderson said of the submission offered to him by the defendant:
    "The essence of the defendant's position is that on the
    agreed facts there has been no indemnity supplied to Quinn
    by the plaintiff. That, as a consequence of the judgement,
    and the finding as interpreted in the appeal to the Full
    Court from the decision at first instance, the monies were
    paid on behalf of Willis in satisfaction of the judgement
    against him there then being nothing remaining against which
    to indemnify Quinn.

This position is predicated upon Willis being directly
    insured pursuant to the statutory policy and not being, for
    this insurance, in any way dependent upon Quinn. Hence
    Mr Lander QC submits, notwithstanding that there are two
    policies of insurance issued by the parties hereto in favour
    of Quinn, Willis has been indemnified separately consequent
    upon the statutory policy with SGIC. Thus, as there has
    been no indemnity there cannot be double insurance, nor,
    therefore, contribution."

13. I have quoted already the answer which the learned trial judge returned to this submission (see above). I repeat some of his words "... what the plaintiff has here met is a judgement related to its obligation to indemnify both defendants" and "... Each policy indemnified Quinn in precisely these circumstances which attract the doctrine of contribution". The doctrine of double insurance as part of general doctrine of contribution was conceived by Lord Mansfield. It began with marine insurance. But it spread to all forms of insurance. I refer to the judgment of Kitto J in the leading case of Albion Insurance Company Ltd v GIO of NSW (1969) 121 CLR 343 at 348-352. The whole judgment should be read for an understanding of the history of the matter. The majority in Albion Insurance stated the principle of contribution between co-insurers succinctly and authoritatively thus:
    "There is double insurance when an assured is insured
    against the same risk with two independent insurers. To
    insure doubly is lawful but the assured cannot recover more
    than the loss suffered and for which there is indemnity
    under each of the policies. 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
    doctrine, however, only applies when each insurer insures
    against the same risk, although it is not necessary that the
    insurances should be identical."

14. There is no doubt that that is the law.

15. There must be double insurance of the one risk, the same one risk. (See also Commercial and General Insurance Co Ltd v GIO of NSW (1973) 129 CLR 374 at 380. There, as the learned trial judge said and quoted, the majority said:
    "Accordingly, any claim that the appellant has against the
    respondent must depend upon the right to contribution
    arising from the double insurance of the one risk, i.e. the
    risk of the employer's liability in damages for the
    negligence of his servant for which he must bear the
    responsibility. Such a claim is, by its very nature, one to
    rateable relief and it is not immediately obvious how, when
    there is a double insurance, one of the insurers should be
    able, in proceedings for rateable relief, to throw the whole
    burden of the indemnity upon the other. Indeed, the purpose
    of the doctrine is to avoid this very thing. The doctrine
    is not concerned with working out the rights of insurers and
    third parties. It is concerned with distributing the
    indemnity to which the insured is entitled under policies of
    insurance with two insurers."

16. The learned trial judge found that the two insurers had insured the same, the one, risk. Of the argument addressed to him, the learned trial judge said:
    "It is crucial to the defendant's submissions that there be
    no link between what has been satisfied by the plaintiff's
    payment to Willis and the indemnity to which Quinn was
    entitled from both insurers to protect against common law
    liability. As Quinn could have retained from execution
    payments made as workers' compensation prior to judgement
    there could be no liability to pay the whole judgement sum.
    However, such an argument seems to ignore that the recipient
    is only entitled to receive the awarded sum and not more.
    Were such payments received by him not so taken into account
    upon execution more than is entitled would be received.
    This circumstance cannot destroy the concept of double
    insurance if it otherwise exists." I agree.

17. Mr White offered an earnest and interesting argument to the effect, in the end, that there was no co-insurance of the same risk here. He said, in his outline and expanded on what he had written, thus:
    "The LTJ found that the payments by SGIC were paid in
    indemnification of the liability of Williss and Quinn: not
    for Williss only. What SGIC had met was `a judgment related
    to its obligation to indemnify both defendants'.

This finding was one of fact (albeit one on which legal
    considerations did impinge). It is submitted that this
    finding is incorrect."

18. I append to these reasons the whole of the outline of Mr White's argument so that the substance of his argument can be seen as he put it. I was given pause by this argument but in the end I cannot accept that the learned trial judge fell into any error. I think that the findings of the learned trial judge were correct. I think that the payment out by the respondent was "in indemnification of the liability of Willis and Quinn." It satisfied the liability of each to Ramsay. I do not think that the provision of s27c(1)(b) of the Wrongs Act, the manner of entry of judgment in the Full Court or anything else, save the two policies themselves, matters here.

19. The principles of double insurance come into play only when the two policies cover the same loss or promise indemnity against the same risk. The essential nature of the principles was put by Olsson J in argument to Mr Walsh QC, for the respondent, thus:
    "You say it is not a question of who claims against whom,
    but what risks are being covered by what policies."

20. In answer, in part, Mr Walsh said "... that payment (ie by the respondent) means that Federation (the trading name of the appellant) no longer has a liability, and that is what Albion's case was talking about". Using, for the moment, the abbreviated names of the parties, the payment by SGIC of the whole judgment for Ramsay means that Switzerland has no obligation to pay Ramsay. The payment by SGIC discharged the liability of both insurers to indemnify Quinn.

21. Mr Walsh wrote in his outline, and spoke to what he had written, thus:
    "The Learned Trial Judge observed (p105.60) that the
    plaintiff has met a judgment related to its obligation to
    indemnify both defendants. Nevertheless, the payment
    extinguishes the liability of Quinn and thereby Switzerland
    Insurance Australia Ltd. As in the case of Commercial and
General Insurance Co Ltd v GIO (NSW) (1973) 129 CLR 374 a
    court should not be concerned to `descend into a working out
    of the rights of the parties'." And:
    "1.11 The Learned Trial Judge correctly concluded that the
    contribution by Switzerland Insurance Australia Ltd should
    be 50 per centum of the common law judgment. Once the
    judgment had been paid by SGIC, Switzerland Insurance
    Australia Ltd recovered the amount paid by way of worker's
    compensation. Thus at the present time Switzerland has
    suffered no loss. Therefore, it is now required to meet 50%
    of the common law claim. National Employers Mutual General
    Insurance Association Ltd v State Government Insurance
Commission (1989) 51 SASR 584.

1.12 The Learned Trial Judge correctly concluded that the
    right of subrogation provided by s.27(c)(2) is irrelevant.
    That sub-section deals only with the rights as between
    employer and employee and has nothing to say on the topic of
    double insurance. Secondly, if anything, it provides an
    additional insurance to the employer Quinn whereby Quinn can
    seek indemnity from SGIC. That it is not a `contract' of
    insurance is irrelevant: Eagle Insurance Co Ltd v Provincial
Insurance (1993) 3 All ER 1 at 6.G (Privy Council)." I agree with each submission.

22. There was "double insurance" here. The answer to the question which I posed at the very beginning is "Yes". Each policy promised Quinn indemnity against the same risk. That was the risk of liability to pay damages in common law for personal injury suffered by some other person or persons. The one risk was the risk that Quinn would suffer liability at common law for damages for injuries sustained by others. That is what each policy covered. The two insurers insured against the same risk. Nothing else, in my opinion, matters.

23. I believe that the learned trial judge came to the correct conclusion.

24. As to interest, the respondent had lodged a cross-appeal. Thus both parties were appealing in different senses about interest. But Mr Walsh said that he did not propose to argue his appeal unless this Court was of the opinion that the learned trial judge was "completely wrong about the issue of interest". In that event, the matter would be open for him to make submissions.

25. In the light of the attitude of Mr Walsh I do not think that we should interfere with the allowance for interest. I agree with the reasons of Olsson J in rejecting the appeal about interest.

26. I would dismiss the appeal and cross appeal.

JUDGE2 OLSSON J This court has before it an appeal and cross appeal against decisions of a Master encapsulated in reasons published by him on 19 October and 21 December 1994 respectively. To understand the issues involved it is first necessary to obtain a firm grasp of the relevant facts.

2. At all material times a firm known as R B and K A Quinn ("the employer") operated a trucking business in South Australia. It employed two men, named Ramsey and Willis respectively, as transport drivers.

3. On 27 January 1983 the two drivers were unloading a heavy spring assembly from a Volvo semi trailer ("the Volvo") owned by the employer. That vehicle was the subject of a statutory, compulsory third party insurance policy ("the CTP policy") issued by the State Government Insurance Commission ("SGIC") to the employer.

4. During the course of that activity Willis dropped one end of the assembly. The other end of it struck Ramsey's right knee, causing it serious injury. Following operative treatment Ramsey sustained what was assessed by the treating surgeon as a 1/3rd loss of function of the right leg as a whole, permanently disabling him from continuing his occupation as a truck driver.

5. Ramsey brought an action for damages against the employer. That action was tried before Mohr J, who, for reasons published by him, absolved the employer from any breach of duty to provide a safe system of work. However, he found that Willis had been guilty of negligence and that the employer was vicariously liable for such negligence.

6. In the event judgment was entered by Mohr J in favour of Ramsey, against both the employer and Willis for the sum of $284,589.76 (inclusive of interest) and costs to be taxed. The employer and Willis appealed to the Full Court against that judgment, both as to the quantum of the assessment and the entry of the judgment against both of them for the full sum above referred to.

7. The latter ground of appeal was based on the fact that, prior to trial, the employer had paid $65,092.78 for workers compensation. The employer contended that judgment ought to have been entered against it for $219,496.98 and against Willis for the full $282,589.76. Willis argued that there should have been judgment against both defendants for the lower amount.

8. The Full Court dismissed both grounds of appeal. As to the issue of workers compensation paid, it pointed out that sections 82 and 84 of the Workers Compensation Act did not affect the liability of joint tortfeasors to have a single judgment entered against them jointly for the gross amount of damages and interest assessed. They merely provided for a scheme, as between employer and employee, to adjust rights so as to avoid double compensation. This could be enforced by a stay of execution in appropriate terms, if necessary.

9. The relevant portion of the CTP policy issued by SGIC was that expressed, at the relevant time, in the Fourth Schedule of the Motor Vehicles Act, 1959 in these terms:-
    "1. The insurer insures the owner of the motor vehicle and
    any other person who at any time drives the vehicle, whether
    with or without the consent of the owner, in respect of all
    liability that may be incurred by the owner or other person
    in respect of the death of, or bodily injury to, any person
    caused by, or arising out of the use of, the vehicle in any
    part of the Commonwealth."

10. For the purposes of the proceedings before the Master it was accepted, as common ground, that the accident which gave rise to the injury to Ramsey was caused by or arose out of the use of the Volvo; and, thus, Willis (as the driver of that vehicle) was entitled to indemnity by SGIC in respect of any liability found against him.

11. SGIC duly paid to Ramsey the total amount of the damages and costs for which Willis was liable under the judgment entered against him. The actual payments made were:-
    - 19 January 1987 - $142,294.88, being half of the damages
    as assessed.
    - 18 February 1992 - $142,294.88, being the balance of such
    damages
    - 11 February 1992 - $15,000 being Ramsey's costs of action

12. It was pleaded that SGIC also paid $100,000, by way of post judgment interest, on 21 April 1993.

13. It should be mentioned that, in 1991, SGIC, having paid the initial one half of the damages, sought to obtain a stay of execution as to the other half, on the ground that it desired to recover the other half from the employer. This was because disputes had arisen between multiple insurers and Ramsey had delayed fully enforcing his judgment for a significant period of time. That stay was refused.

14. The problem which had arisen was due to the fact that, quite apart from the CTP policy above referred to, the employer had also effected another policy of insurance with Switzerland Insurance Australia Limited (trading as Federation Insurance) ("Federation"). That policy indemnified the employer against both its liability to its employees under the Workers Compensation Act, 1971-79 and also at common law for or in respect of personal injury sustained by its employees.

15. In the present proceedings SGIC sued Federation for contribution towards its liability to Ramsey, upon the footing that the judgment entered against Willis, which it was required to satisfy, related to circumstances to which the principles of double insurance applied - with the consequence that Federation is liable to contribute equally with SGIC to the judgment debt and post judgment interest.

16. It is to be noted that the relevant provision of the policy of insurance issued by Federation was expressed as under:-
    "NOW THIS POLICY WITNESSES that in consideration of the
    payment to the Company of the premium shown in the Schedule
    for the initial period of indemnity stated therein and of
    such further premium or premiums as may be imposed by the
    Company consequential upon any material alteration in the
    nature or extent of the risk hereby insured or in
    consequence of any amendment of the Acts referred to herein
    during the currency of the indemnity granted by this Policy
    or any renewal thereof (all of which premiums are also
    subject to adjustment as hereinafter provided) if during
    such period of insurance or renewal any Employee of the
    Insured shall sustain any personal injury while employed in
    the service of the Insured in the said business and the
    Insured is liable to pay compensation for such personal
    injury either under the Workers Compensation Act 1971-79 or
    the Wrongs Act 1936-59 or any amendment to either of the
    said Acts or at Common Law the Company shall indemnify the
    Insured against all sums for which the Insured shall be so
    liable and will in addition be responsible for all costs and
    expenses incurred with its consent in connection with any
    claim for such compensation."

17. The basis of the defence to the SGIC claim against Federation was succinctly summarised by the learned Master in these terms:-
    "The essence of the defendant's position is that on the
    agreed facts there has been no indemnity supplied to Quinn
    by the plaintiff. That, as a consequence of the judgment,
    and the finding as interpreted in the appeal to the Full
    Court from the decision at first instance, the monies were
    paid on behalf of Willis in satisfaction of the judgement
    against him there then being nothing remaining against which
    to indemnify Quinn.

This position is predicated upon Willis being directly
    insured pursuant to the statutory policy and not being, for
    this insurance, in any way dependent upon Quinn. Hence Mr
    Lander QC submits, notwithstanding that there are two
    policies of insurance issued by the parties hereto in favour
    of Quinn, Willis has been indemnified separately consequent
    upon the statutory policy with SGIC. Thus, as there has
    been no indemnity there cannot be double insurance, nor,
    therefore, contribution."

18. As the learned Master correctly identified, the current legal principles related to the rights of contribution between insurers are to be found in Albion Insurance Company Limited v Government Insurance Office of New South Wales (1969-70) 121 CLR 342. In essence, it was there held that it is not a comparison of types of insurance contract, per se, which is in issue. Double insurance exists when an assured is insured against the same risk with two independent insurers. Where that situation exists the doctrine of contribution as between insurers is applicable. In the majority judgment in the Albion Insurance Case it was said:-
    "... The element essential for contribution is that,
    whatever else may be covered by either of the policies, each
    must cover the risk which has given rise to the claim.
    There is no double insurance unless each insurer is liable
    under his policy to indemnify the insured in whole or in
    part against the happening which has given rise to the
    insured's loss or liability."

19. In the course of his reasons the learned Master noted the Federation contention that an important feature was that, because the employer could have retained payments made as workers compensation prior to judgment, there was never any practical liability for both defendants in the original action to pay the whole judgment sum.

20. It is fair to say that he concluded that this was essentially a distinction without a difference in the conceptual basis of liability. On the basis of what fell from the High Court in Commercial and General Insurance Company Ltd v Government Insurance Office of New South Wales (1972-73) 129 CLR
374 ("Commercial General") he pointed out that the doctrine of double insurance is not concerned with working out the rights of insurers and third parties - it is concerned with distributing the indemnity to which the insured is entitled under policies of insurance with two insurers.

21. So it was, he said:-
    "In my opinion the terms of the judgement pronounced by Mohr
    J and confirmed by the Full Court established that what the
    plaintiff has here met is a judgement related to its
    obligation to indemnify both defendants. Quinn was liable
    to pay because of the provisions of S27C(1) of the Wrongs
    Act 1936. Thus, both present parties were obliged to
    indemnify Quinn due to its common law liability. It is not
    appropriate here to work through what might have been and
    introduce notions of subrogation. Each policy indemnified
    Quinn in precisely these circumstances which attract the
    doctrine of contribution."

22. It is fair to say that, on the hearing of this appeal, a key feature of the case for Federation was its contention that the only liability of the employer was found to be its vicarious responsibility for the acts of Willis; and that it had been absolved from any direct, tortious breach of duty of care. On the other hand the liability of SGIC was a direct liability for the tortious acts of Willis, as driver of the insured motor vehicle. This was not, it was said, a claim for contribution by two joint tortfeasors.

23. Mr White, of counsel for Federation, contended that the consequent situation was not one which, in fact, attracted the doctrine of double insurance at all - it merely fell to be dealt with as a situation of equitable contribution (by way of recoupment) by one of two defendants subjected to a joint judgment, in circumstances in which one has paid more than the due proportion. It was not, he said, a case of joint fault, but one of shared obligation to pay - in which equity required each obligor to bear an appropriate proportion of the liability.

24. He submitted that the payment made by SGIC was not, relevantly, a payment made in satisfaction of any liability in indemnification of the employer's risk, but merely a liability which was repercussive from that of Willis, because of the statutory vicarious responsibility of the employer by virtue of section 27C(1)(b) of the Wrongs Act. Indeed, it was argued that, on the actual history of the proceedings, the payment was made to prevent execution being levied against Willis, whose liability was, in total, different from that of the employer, because of the workers compensation recoupment to which the employer was entitled.

25. Reference was also made by Mr White to what, he contended, were indicators that, as and when moneys were paid by SGIC, these were expended solely in discharge of the liability which it had to Willis and not the employer.

26. It is not an unfair summation of Mr White's argument in the above regard to say that the net effect of his submissions was that, under the CTP policy, the liability for the acts of Willis "was a several liability" and not a "joint liability" with the employer. "One ought not", he declaimed, "to confuse, as we say that his Honour has done, the effect of a payment with the character or purpose of the payment".

27. He went on to contend that, to succeed in its claim against Federation, the onus was on SGIC to demonstrate that it had been called upon by Quinn to indemnify it in respect of the same risk as that the subject of the Federation policy and that, in discharge of such a call, it had done so. He asserted that SGIC had simply not discharged such an onus.

28. It is at once to be seen that two key areas of consideration arise in the instant case. The first is as to the nature of the employer's liability in a case such as the present and the second is as to what liability was in fact accepted and satisfied by SGIC, given that, at the original trial, the employer and Willis were separately represented.

29. Under the CTP policy SGIC was required to accept the liability both for the employer as the owner of the relevant vehicle and the driver of it "in respect of all liability that the owner or driver may incur in relation to" relevant bodily injury caused by or arising out of the use of the vehicle. Judgment was entered by Mohr J against both the employer and Willis because the employer was, in law, vicariously responsible for the tortious act of his employee.

30. This was the very situation which arose in Commercial General. In the course of its judgment in that case (p380) the majority had no difficulty in concluding that the risk of the employer's vicarious liability in damages for the negligence of his employee towards a fellow employee resulting in injury to the latter, for which he must bear the responsibility, was the same risk as that for which indemnity was provided by the separate worker's compensation insurance policy which covered liability for incapacity in relation to the same injured worker. The common risk for which the employer was indemnified under both policies was the loss arising by reason of a liability for damages to a person injured as a consequence of a negligent act in circumstances covered by the policies.

31. In the instant case the loss attracting indemnity under both policies arose in respect of the same happening and was an identical loss, notwithstanding that the employer's loss was vicarious in nature. The same event gave rise to liability simultaneously under both policies.

32. Moreover, it seems to me quite artificial to argue, as Mr White sought to do, that some question of onus arises as to the basis upon which SGIC paid over moneys, once the joint judgment had been entered. Its attitude and corporate state of mind at that point seems to me to be a totally irrelevant consideration. The plain fact of the matter was that, at such point in time, there was established a clear legal liability of Willis, jointly with the employer, to meet the liability for damages to Ramsey.

33. In the event, SGIC was called upon or elected, initially, to satisfy the whole of the judgment, which both of its insured could each be required to pay, subject to subsequent rights of adjustment inter se. It matters not why SGIC paid or chose to pay - that did not affect the nature and extent of the liability which it was initially called upon to meet. Even if it be the "natural inference" that the payment was made merely "to preclude the plaintiff proceeding with the warrant of execution against Willis" that does not alter the fact that the very reason why Willis was susceptible to execution was that he and the employer were both jointly and severally liable to pay the whole of the damages awarded to Ramsey, even given that the employer was entitled to claim credit for moneys already paid by it for workers compensation.

34. By virtue of the relevant statutory provisions against double compensation, the practical result was that the employer was, in effect, deemed already to have paid moneys on account of damages to that extent. The fact that SGIC may not have intended to pay both for Willis and the employer - if that was its attitude - is beside the point. To seek to debate that issue is to ignore the fundamental nature of the liability of the parties under the judgment of Mohr J. In my opinion any subjective state of mind of the insurer is an irrelevant consideration. For present purposes the question is not related to what party actually claims against what other party but, rather, what risks materialize and are covered by what policies. So it is that qui sentit commodum sentire debet et onus - whoever enjoys the benefit must also share the burden.

35. Furthermore, I do not, in any event, accept that, on the material before the court, the "natural inference" was that relevant payments were made on behalf of Willis alone. A perusal of the letters revealed at pages 73 and 79 of the appeal books suggests that a strong argument can be mounted to the effect that they are consistent with a making of payment on behalf of both the employer and Willis. When read in the context of other correspondence produced in the appeal books it appears to me that any positive inference to be drawn is the exact opposite to that contended for by Mr White.

36. Mr White also sought to argue that section 27c(1)(b) of the Wrongs Act had no application to the case at bar because:-
    "... The employer's obligation to indemnify the employee
    only arises by force of that section where the employee is
    not otherwise entitled to indemnity. If the employee is
    otherwise entitled to indemnity, the employer is relieved.
    His Honour says Quinn was liable to pay because of the
    provisions of 27(c)(1) of the Wrongs Act. We say, on the
    contrary, Quinn was not liable because Willis had an
    entitlement to get indemnity from SGIC, and there was no
    other way by which Quinn became liable to indemnify Willis."

37. This contention cannot, I consider, withstand any serious scrutiny. Once more it totally overlooks both the nature and extent of the liability established by the judgment in the original action and the rationale for it. The judgment against the employer was expressly based on its vicarious legal liability for the acts of Willis. Had Ramsey elected to levy execution against the employer then it would have been entitled to seek indemnity from either of its insurers. Be that as it may one, nevertheless, necessarily keeps coming back to the fundamental fact that, contrary to the assertions proffered by Mr White, when the relevant payments were made by SGIC they were - in both legal and practical terms - payments in satisfaction of an obligation to indemnify the owner which was shared by Federation, notwithstanding that any liability of Willis was contemporaneously extinguished.

38. I would therefore reject the appeal, insofar as it seeks to challenge the basic right of SGIC to secure contribution against Federation.

39. On the reasoning of the Full Court in National Employers Mutual General Insurance Association Ltd v State Government Insurance Commission (1989) 51 SASR 584 the proper approach to a determination of contribution as between double insurers is to require each of them to bear 50% of the gross common law damages awarded to Willis, together with applicable costs and interest. The fact that workers compensation payments of $65,092.78 had been made by Federation on behalf of the employer simply meant that Ramsey was required, out of the total award of common law damages, to recoup that sum to Federation (Ramsey v R B and K A Quinn (Reg'd) and Willis (1987) 137 LSJS 349).

40. It follows that, in relation to the total damages award of $284,589.76, Federation is liable to contribute to SGIC $142,294.88 plus one half of the costs of action and interest properly paid. The costs totalled $15,000.

41. In the course of his argument Mr White sought to raise several issues as to the question of interest quantum.

42. First, he contended, the rate of 14% applied by the learned Master in relation to the first instalment of damages was too high. It should, he submitted, have been of the order of 10%. All that need be said on that score is that the calculation spanned a period of very volatile interest rates which peaked out on a figure of the order of about 20%. The figure actually selected, if applicable at all, reflected a broad axe approach which attempted some rough average compromise. I am unable to say that it was manifestly incorrect, if relevant.

43. Second, he argued that, because the first payment made was expressly disbursed in satisfaction of the SGIC contribution, then that was the sole responsibility of SGIC and the liability of Federation was restricted to any interest properly payable in respect of its proportion - given due allowance for the workers compensation already paid by it.

44. A series of quite complex figures were proffered by Mr White, based upon a series of alternative premises. There is no need to traverse these in detail.

45. As I understand the situation the learned Master allowed $92,327 against Federation, said to have been based on 14% applied to the initial payment of $142,294.88 and the costs paid in February 1992. Unfortunately, it does not appear just how the figure actually awarded on such a basis was computed. The cross appeal seeks to question the proper mode of computation of interest.

46. Bearing in mind that SGIC ultimately paid the $100,000 post judgment interest to Ramsey on 21 April 1993 and has been out of the total moneys paid by it in full settlement of the judgment ever since it seems to me that, in practical terms, it is entitled to recover interest from Federation as if it had paid the proportion due to be contributed by the latter at the outset and had secured a judgment against it at that point. That approach is something of a "broad axe" over-simplification but enables a relatively simple calculation to be made to check the validity of what is now sought to be argued by Federation.

47. Adopting that approach and an average rate of even simple interest which errs, if at all, on the side of being conservative, it at once becomes apparent that the quantum of interest actually allowed by the learned Master was quite modest - possibly unduly modest.

48. In so concluding I do not ignore the fact that the evidence seems to indicate that, for some reason not now readily apparent, Ramsey's solicitors may not have recouped Federation for the workers compensation payments made by it until about 28 February 1992, presumably following payment of the second judgment instalment by SGIC. However, it seems to me that this may well have been due to exchanges between Ramsey's solicitors and the solicitors for Federation, rather than any other factor. (See, for example, correspondence reproduced at pp91-92 of the Appeal Book.) It is apparent that Federation only had itself to blame for not enforcing its rights in this regard at any earlier time.

49. There is, therefore, no substance in the appeal on that score. I took Mr Walsh QC, of senior counsel for SGIC, to intimate that, if this court was not minded to disturb the award of interest made by the Master as a consequence of the appeal, then he was content not to press the cross appeal.

50. In the result I would simply dismiss the appeal and cross appeal.

JUDGE3 MOHR J I agree.