Workers Rehabilitation and Compensation Corporation v Terence Mark Hillier & Barbara Van Wyk No. Scgrg-96-1953 Judgment No. 6274 Number of Pages 25 Workers' Compensation

[1997] SASC 6274

IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA

DOYLE CJ, MATHESON AND OLSSON JJ

Workers' compensation - appeal against dismissal, by a District Court Judge, of a claim by the appellant to maintain a charge for $34,910 on certain moneys payable by the first respondent to the second respondent in settlement of a claim in medical negligence - appellant granted an extension of time to bring the appeal - injury to back initially compensated by the appellant - the second respondent subsequently discovered that the first respondent had treated her incorrectly by operating on an asymptomatic area of her back and, as a result, the negligence proceedings were initiated - whether the appellant was entitled under section 54 of the Workers Rehabilitation and CompensationAct, to recover compensation paid by it to Mrs Van Wyk - whether the District Court Judge was correct in granting the appellant an extension of time within which to prosecute the action. Workers Rehabilitation and Compensation Act 1986s 54 and s 30, referred to. Paglia v Trice (1991) 56 SASR 62, discussed. Alsafe Industries Pty Ltd and Another v Workers Rehabilitation and Compensation Corporation and Another (1990) 54 SASR 320; Spry v Manser; Workers Rehabilitation and Compesnation Corporation (Intervenor) (1993) 60 SASR 586, considered.

ADELAIDE, 2 June 1997 (hearing), 25 July 1997 (decision)

#DATE 25:7:1997

#ADD 4:9:1997

Appearances :

Counsel for appellant: Mr S Walsh QC with Mr A Phelps

Solicitors for appellant: Piper Alderman

Counsel for respondent Terence Mark Hillier: Mr P W Eriksen

Solicitors for respondent Terence Mark Hillier: Wallmans

Counsel for respondent Barbara Van Wyk: Ms E F Nelson QC with Mr G N Allison

Solicitors for respondent Barbara Van Wyk: Tindall Gask & Bentley

Order: appeal allowed.

DOYLE CJ

Introduction

Section 54 of the Workers Rehabilitation and Compensation Act ("the Act") enables the WorkCover Corporation of South Australia ("the Corporation") or an exempt employer who pays compensation to recover compensation paid or payable under the Act in certain circumstances.

In particular, s54 provides for recovery of compensation from a person liable to pay damages in respect of the same compensable disability as gave rise to the right to receive payments of compensation.

Olsson J has set out in his judgment the relevant statutory provisions. I will not repeat them here. The central provisions for present purposes are sub-section (5) and sub-paragraphs (a), (b) and (c) of sub-section (7).

The interpretation of these provisions has already caused some difficulty: see Paglia v Trice (1991) 56 SASR 62. To say that is not to criticise the legislative drafting. It is not surprising that it should prove difficult to express with precision the extent of the right of recovery when an injury gives rise to rights to compensation under the Act and to a right of action in damages.

The case presents a new difficulty, and raises an issue which is of considerable importance for the purposes of s54.

At the risk of oversimplifying, the main issue is how one decides when "compensation is paid or payable ... in respect of a compensable disability." Is that question answered by examining only the basis upon which compensation was claimed by the worker and paid by the Corporation? Or, alternatively, is it answered by examining the facts and asking whether compensation could have been claimed by the worker in respect of a particular compensable disability, even if it was in fact claimed in respect of some other compensable disability. In the present case there is no doubt that the worker has received damages from another person, H, in respect of medical treatment that was performed negligently. Nor is there any doubt that the worker has received compensation in respect of a compensable disability. The issue under sub-section (5) is whether the compensable disability in respect of which compensation was paid is the disability in respect of which damages were paid and, under sub-section (7), whether the trauma which gave rise to the right to damages also gave rise to rights to compensation under the Act.

Facts and Findings

The facts are summarised in the judgment of Olsson J.

Although the District Court judge summarised the evidence, for much of the time he fails to indicate whether he is merely summarising evidence or making factual findings. That causes some difficulty. As will be apparent, this is a case that called for clear factual findings. In the end I have concluded that he has accepted the medical evidence put before him, and that what appears to be a summary is in fact intended to contain findings. It is desirable that judgments distinguish between findings and summaries of evidence.

There is a further difficulty. The District Court judge says nothing at all about the basis upon which compensation was paid by the Corporation. By this I mean, nothing at all specific. As will emerge, it is necessary to know what payments of compensation were made and in respect of what they were paid. Once again, I think that it is possible to form a conclusion on these matters, but it would have been helpful if the District Court judge had dealt with them.

I proceed on the following basis, which I consider is consistent with the factual basis accepted by Olsson J.

The worker (I will use this term to refer to the respondent) suffered a compensable disability on 9 July 1988. The compensable disability was an injury to her lower back. She claimed compensation, and the Corporation determined to accept her claim for compensation: see s53(4) and (5). Compensation was paid to the worker, including weekly payments in respect of incapacity for work (s35) and compensation for the costs of medical services and associated costs (s32).

The worker returned to work, but exacerbated her injury on 8 March 1989. She again claimed compensation, and the Corporation again determined to accept the claim and paid compensation to the worker.

Although this much can be deduced, in fairness to the District Court judge I should add that at the hearing before him evidence does not appear to have been given about the claims for compensation made by the worker under the Act, or about the determinations made by the Corporation. Only two determinations were put in evidence, and they related to claims for compensation for non-economic loss under s43 of the Act. I will return to this aspect of the matter later.

The worker was incapacitated for work for substantial periods of time. As best I can tell she has not returned to work since the second injury on 8 March 1989.

In February 1992 Dr H performed an operation on her back. The operation was performed in the course of treating the injury to her back which she sustained in the course of her employment. The treatment being received and the operation were appropriate. However, as a result of a mistake, Dr H operated on the wrong lumbar disc.

The operation carried out was a fusion. The fusion was carried out one level higher up than it should have been carried out. The disc which was fused had, prior to the operation, been asymptomatic.

Before this operation was carried out, the worker was not fit for her former work as an enrolled nurse. On the judge's finding she would never have been fit to return to that work. She was fit for some light duties, but there was no real prospect of obtaining appropriate work. She was either totally incapacitated for work, or, by operation of the Act, to be treated as totally incapacitated although only partially incapacitated: see s35. If the operation had been properly performed, it had reasonable prospects of success, although the risk of failure of a fusion is not insignificant. If the operation had been successful the worker would have been fit for limited light work, but in view of the factors referred to by Olsson J it is doubtful whether suitable employment was or would be available to the worker.

The operation worsened the worker's condition. Dr H performed a further operation. This was necessary because the damaged disc had not been dealt with, and because the fusion had failed. That fusion was also unsuccessful. The worker's condition worsened. Ultimately it was necessary for her to have a third operation at the hands of a different surgeon. That operation appears to have been successful.

The District Court judge found that the erroneous treatment had increased the extent of the permanent disability. He also found that the worker was permanently disabled from returning to her former work as an enrolled nurse. He found that she would have been permanently disabled from returning to that work even if the first operation had been successful. The judge seems to have proceeded on the basis that after the third operation the worker was or would be fit for a limited range of light work. But the effect of his findings appears to be, as Olsson J says, that even if the first operation had been successful, there was no real prospect of her obtaining other employment. In that practical sense, as far as capacity for work goes, the negligent operation had not increased the extent of the worker's incapacity for work.

While in this respect the District Court judge's findings are not clear, I agree with Olsson J that that is the effect of them.

The worker recovered damages from Dr H for the negligent treatment. The amount of the damages and their nature was not disclosed. That puts the Court in a curious position. I can only proceed on the basis that the damages must have been paid for pain and suffering, for expenses and for any economic loss attributable to the negligently performed operation.

The Corporation accepts that the compromise was a proper compromise.

The appeal was argued before us on the basis that the only claims by the worker for compensation, that had been determined in favour of the worker under s53 of the Act, related to the admitted compensable disabilities suffered in 1988 and 1989. As I have already said, no determinations by the Corporation, other than two for the purposes of s43, were proved.

I mention here that counsel for the Corporation made the point that although the Act provides for an approved form of claim, no particular form of claim has been approved: see s52(1). He made the point, which might be correct even if there was an approved form, that the Corporation can accept claims made informally if it wishes to do so and pay them. At the factual level he argued that there was nothing to say that the payments of compensation made after the first operation were not actually made in respect of a compensable disability constituted by the first operation.

On the limited and rather unsatisfactory information available, I proceed on the basis that all payments of compensation made to the worker were made upon the basis of determinations relating to the compensable disabilities in 1988 and 1989. By this I mean I proceed on the basis that, if the facts were fully investigated, it would be found that all determinations related to those compensable disabilities or, if there were no formal determinations, that the proper inference was that the payments were made on the basis that they were payments to which the worker was entitled as a result of having suffered those compensable disabilities. If the Corporation made any determination relating to the first operation, or considered that there was an entitlement to compensation arising from the first operation, it was up to the Corporation to prove that fact. It has not done so.

As will appear in due course, the factual basis upon which I proceed is not fatal to the claim now made by the Corporation.

The claim by the Corporation was for a declaration that the Corporation was entitled to a first charge over the damages payable by Dr H to the worker: see s54(7)(e).

The amount for which the charge was claimed was $34,910. The amount of compensation paid by the Corporation to the worker far exceeds that amount.

We were told the components of that amount and the amount attributable to each component. They are as follows (this is taken from a letter of 11 December 1995 written by the Corporation's solicitors):

"1 Hospital expenses $10,000.00 2 Past and future income maintenance payments/loss of earning capacity $7,500.00 3 Section 43 payments $7,510.00 4 Past medical and like expenses $7,850.00 5 Past travelling expenses $1,050.00 6 Future medical and like expenses $1,000.00 TOTAL $34,910.00"

I proceed on the basis that the various expenses are attributable to the operations and were all incurred after the operations were carried out. I assume that the income maintenance payments are in respect of periods of incapacity after the operations, but we know no more than that.

At the hearing in the District Court, the parties apparently reached an agreement about the amount to which the Corporation was entitled, if it had an entitlement at all. Olsson J has set out in his judgment the submissions made to this Court about that agreement. The effect of the agreement is unclear.

Time points

There are two preliminary issues that must be dealt with.

As Olsson J records, the action by the Corporation in the District Court was commenced out of time. The District Court judge extended the time.

That decision was challenged by the worker by filing a Notice of Alternative Contention. It is not necessary to decide whether such a decision can be challenged in that way, although I am inclined to think that it cannot. It is not necessary to decide that because I am satisfied that, in any event, the decision of the District Court judge is not shown to be erroneous.

The discretion that he exercised under s48(1) of the Limitation of ActionsAct is a wide one. The Court is to act "... as the justice of the case may require." It is clear that the judge understood the nature of the discretion that he was to exercise. The complaint relates to the manner in which he weighed the facts. In my opinion it is not shown that his conclusion was wrong. It was reasonable for the Corporation not to issue proceedings to enforce its rights as soon as it became aware that the worker had a cause of action against Dr H. The Corporation can be criticised for some of the delay that occurred, as the District Court judge recognised, but weighing everything up the conclusion that it was just to extend the time was open to the judge on the facts. In my opinion the attack upon the exercise of the discretion cannot succeed.

Despite that brush with procedural problems, the Corporation was again late in instituting its appeal to this Court. An affidavit shows that the solicitor handling the matter thought that an appeal could be instituted within one month of the District Court decision. In fact, it had to be instituted within fourteen days. The affidavit states that the Corporation always intended to appeal, but it did not advise the worker of the intended appeal until more than fourteen days had elapsed. On the other hand, no prejudice to the worker has been established, although no doubt the worker is disappointed to find that an appeal has been brought after she may have thought there would be no appeal. The appeal was instituted within one month of the District Court decision.

In view of the relatively short delay, and the absence of any prejudice to the worker, I would extend the time within which to institute the appeal to 20 September 1996, the date upon which the Notice of Appeal was filed.

Effect of the first operation on the entitlement to compensation

In my opinion the Corporation was correct in treating the costs of and associated with the first operation and subsequent operations, and the incapacity for work after the first operation as resulting from the compensable disabilities suffered in 1988 and 1989.

The first operation was a form of treatment directed to remedying the original injury or injuries, and was properly undertaken, although wrongly executed. There is hardly any need to refer to authority for the proposition that a worker's entitlement to compensation includes compensation for expenses associated with and for the consequences of misconceived medical treatment. This will not always be so, and in the end the question becomes one of fact. Cases will arise in which the error is so great, or the medical procedure is so unrelated to the compensable disability, that there is no longer a relationship with the compensable disability, but in my opinion this case is not such a case.

It follows, in my opinion, that the worker was entitled to claim compensation in respect of the consequences of the first operation and in respect of the expenses that flowed from that operation, as attributable to the compensable disabilities already referred to. The Corporation acted correctly in meeting those claims. This is so even if the first operation was itself a compensable disability in respect of which the worker could have made a successful claim for compensation: see Australian Eagle Insurance Company Ltd v Federation Insurance Ltd (1976) 15 SASR 282 and Wardleworth v Green
(1996) 66 SASR 421.

It is on that basis, and because of the absence of any evidence that in paying compensation the Corporation relied upon the first operation as a compensable disability, that I proceed on the basis that as a matter of fact all payments of compensation were made with reference to (to chose a neutral expression) the compensable disabilities of 1988 and 1989.

The operation of s54

The worker's right of action against Dr H was in respect of the injury that the worker suffered in the course of the first operation. That same injury was the "trauma" creating an entitlement to damages for the purposes of s54(7)(b). I mention in passing that "trauma" is defined as:

"An event, or series of events, out of which a compensable disability arises."

In view of my finding as to the basis upon which compensation has been paid to the worker, is that the end of the claim by the Corporation? Is the fact that the compensation was paid with reference to the compensable disabilities of 1988 and 1989, and the fact that the damages claim rests upon an injury sustained in 1992, fatal, because compensation was not paid and damages were not recovered in respect of the same compensable disability?

The Corporation argues that this conclusion is not fatal to its claim. It submission proceeded in the following stages. First, it argues that the first operation was itself a compensable disability for the purposes of the Act. Accordingly, the worker was entitled to claim payments of compensation under the Act in respect of that disability. Presumably the Corporation would identify the amounts set out above as the amounts that the worker could have claimed in respect of that disability. Then the Corporation argues that the compensation paid to the worker can be treated as paid in respect of the compensable disability constituted by the first operation, even though the payments were made at the time by reference to the compensable disabilities of 1988 and 1989.

In my opinion the central issue of the case now emerges.

Under s54(5) the entitlement to recover compensation arises when compensation is paid or payable and there is a right of action for damages, and each of these is in respect of the one compensable disability. When the right is exercised, by virtue of s54(7) it is exercisable if compensation is paid and damages have been received in pursuance of rights arising from the same trauma as gave rise to the right to compensation. That means that the right to compensation and the right to damages must arise from the one event or series of events.

How does one identify the compensable disability in respect of which compensation is paid? How does one identify the event in respect of which the right to compensation arose?

One possibility is that the enquiry is answered by identifying the determination or determinations upon which the payments of compensation were made. If they identify a particular compensable disability, it could be said that that is the end of the matter. If they do not, because an informal process was followed, one could then enquire into the compensable disability that must, at the time, have been the basis for the payment. This is an enquiry into the basis upon which the payment was made at the time it was made.

Alternatively, and this is the Corporation's argument, one could say that compensation is paid in respect of a compensable disability if the compensation actually paid could have been claimed by the worker with reference to the relevant compensable disability. The Corporation argues that one could say this even if, at the time the compensation was claimed and paid, the worker and the Corporation acted by reference to some other compensable disability. And so, in the present case, the Corporation argues that even though I have concluded that the Corporation in fact paid compensation in respect of the compensable disabilities of 1988 and 1989, the relevant compensation was paid in respect of the compensable disability of 1992 or, at the least, was payable in respect of that compensable disability. On that basis it argues that there is the necessary coincidence between the origin between the right to compensation and the origin of the right to damages.

The consequence of the argument for the Corporation is that the determination which led to the making of a payment of compensation is not decisive for the purposes of s54.

In the usual case, the problems presented by this case will not arise. Usually, I suspect, one and the same event will be the injury that causes the compensable disability and the event that gives rise to the right to damages. Nor, in the usual case, will there be another event which is arguably also an injury constituting a compensable disability in respect of which the compensation could have been paid. In the usual case, the causal link between the entitlement to compensation and the entitlement to damages will be found in one and the same "trauma" as defined: see Alsafe Industries Pty Ltd & Anor v Workers Rehabilitation and Compensation Corporation & Anor (1990) 54 SASR 320 at 329; Spry v Manser (1993) 60 SASR 586 at 593; Manser v Spry
(1994) 181 CLR 428 at 433-434.

But cases like the present are likely to arise from time to time. That is, cases in which, after the occurrence of a compensable disability, there is a further event which is said to be a compensable disability and which also gives rise to a right to claim damages.

At first, I was inclined to reject the argument advanced by the Corporation. I was inclined to the view that s54 directed attention to the basis upon which the Corporation acted when the payment of compensation was made. I was inclined to the view that the determination of the Corporation pursuant to which payment was made determined decisively the compensable disability in respect of which the compensation was paid. Some support for that view can be found in the fact that s52(2), which provides:

"Where notice of a disability is required under this Division, a claim for compensation may not be made in respect of that disability unless notice of the disability has been given in accordance with this Division."

s52(2) uses the expression "in respect of" to link the claim for compensation to the disability by reference to which compensation is claimed by the worker. The view to which I was at first inclined also has the undoubted merit of relative simplicity. The only enquiry is as to the basis upon which the payment of compensation was actually made. Usually that will be resolved by producing a determination. Even if the claim was dealt with informally, a reference to other determinations is likely to provide the answer.

But, on reflection, I have come to the conclusion that the submission by the Corporation should be accepted.

First of all, the terms of sub-sections (5) and (7) of s54 are capable of embracing the meaning for which the Corporation contends. The expression used in sub-section (5), "in respect of a compensable disability" uses words which denote a relationship between the entitlement to compensation and a compensable disability, but it is a relationship which has a wide meaning and depends very much upon the context in which it is used: State Government Insurance Office (Q) v Rees (1979) 144 CLR 549 at 561 and Technical Products Pty Ltd v State Government Insurance Office (Q) (1989) 167 CLR 45 at 47-48. I consider that it can be said that compensation is paid or payable in respect of a compensable disability if the compensation is an amount that is in fact payable in respect of a compensable disability, although not actually paid on that basis, and if the payment of the compensation in fact discharges the liability that would otherwise arise. Likewise, turning to sub-section (7), it can be said that the same trauma as gave rise to a right to damages gave rise to rights to compensation in monetary amounts equal to the compensation that was paid or payable. Accordingly, to put it shortly, the literal meaning of the words used embraces the situation now before the Court.

There are some practical arguments supporting this conclusion. I have already referred to the fact that a worker may have the ability to make a claim for compensation by reference to more than one compensable disability. I mean, by that, that a worker may be able to base the one monetary claim upon more than one compensable disability. If the submission by the Corporation is rejected, it follows that the manner in which the worker presents the claim for compensation will have the capacity to determine the Corporation's right to recover compensation under s54. If the worker bases the claim for compensation upon the compensable disability that is not the compensable disability in respect of which there is a right to damages, recovery will not be able to be made.

It also should be borne in mind that there are likely to be cases, from time to time, in which the Corporation will be unaware, when dealing with the claim for

payment, that a further compensable disability has been suffered by a worker. The present case is an illustration. Some time passed before the Corporation realised that the operation by Dr H was itself capable of being regarded as a compensable disability.

This is not to say that there will not be difficulties as a result of the approach that I have taken. In particular, if an entitlement to compensation can be attributed to more than one compensable disability, and a right of recovery is sought to be exercised, is the whole amount of the payment recoverable or only some part of it? I consider that the answer to that is that the whole payment is recoverable, because the Act does not provide for any process of apportionment. But I do not regard that as an unjust result, or one that suggests that my approach to the construction of the provisions must be wrong.

I should add, that as far as I am aware the point now under consideration has not been dealt with in any previous decision dealing with s54.

For those reasons I have come to the conclusion that the questions posed by sub-sections (5) and (7) of s54 are not to be answered by reference to the basis upon which the Corporation made the relevant payment at the time the payment was made. The Corporation is entitled to identify some other compensable disability for the purposes of its recovery action.

The operation as a compensable disability

It is then necessary for the Corporation to establish that the first operation performed by Dr H gave rise to a compensable disability.

In this operation Dr H fused a vertebra, that was previously asymptomatic. That fusion resulted in loss of movement of the back and, possibly because of the failure of the fusion, increased pain now attributable to the previously asymptomatic vertebra. As a matter of ordinary language I consider that to be a "injury", although I acknowledge that if the procedure had been carried out in the course of proper treatment it could not be so regarded.

The operation by Dr H is therefore a "disability" for the purposes of the Act. It is a compensable disability if, for the purposes of s30, it "arises from employment". As long as it is not a "secondary disability", it is sufficient that the disability arises "out of or in the course of employment." There is no difficulty in concluding that it arises in the course of employment. This is because, by s30(3)(e), which is set out in the judgment of Olsson J, the worker's employment includes attendance at a place to receive a medical service. The operation was performed when the worker was attending at the hospital in question to receive treatment by a medical expert, and so she was in the course of her employment when she sustained the injury.

However, if the disability is a secondary disability then it must meet the requirements of s30(2)(b), which is also set out in the judgment of Olsson J. A "secondary disability" is defined by s3 of the Act to mean:

"... a disability that is, or results from, the aggravation, acceleration, exacerbation, deterioration or recurrent of a prior disability."

In my opinion, in the present case, the operation performed by Dr H did not give rise to a secondary disability. Granted, the result of the operation was that the worker's back was worse that it was before, and it could be said, in terms of Schedule 3 of the Act, that the "total impairment of the lower back and lumbar spine" had increased. But the same might be said in relation to the arm of a worker who suffers a break of a bone above the elbow and, later, a break of a bone below the elbow. In my opinion, the fact that the operation by Dr H gave rise to damage and injury to a disc which was previously asymptomatic, and the fact that the procedure performed could not be regarded as proper treatment for the compensable disability which the worker had suffered, combined to lead to the conclusion that in this case the disability that resulted from the operation was not a secondary disability.

It follows that it is not necessary to consider whether the disability that resulted from the operation arose out of employment or whether the employment contributed to the disability.

It follows from all this that the operation performed by Dr H was itself a compensable disability. It follows in turn from that, that the worker had a right to compensation under the Act in respect of a compensable disability that resulted from the operation. That same disability gave rise to a right of action for damages against Dr H.

The compensation paid

It is next necessary for the Corporation to establish that the compensation, in respect of which it claims a charge, is compensation paid in respect of the compensable disability that resulted from the operation and that the compensation paid was paid pursuant to rights arising from the trauma that resulted from the operation.

In my opinion, for the reasons given by Olsson J, it has not been established, on the evidence, that the weekly payments paid during periods of incapacity for work were paid in respect of the compensable disability that resulted from the operation. This is so because, on the evidence, it appears that the worker was in any event totally incapacitated, or entitled to be treated as such. Accordingly, it has not been shown that any further or additional entitlement to weekly payments came into being as a result of the compensable disability suffered in the operation. Accordingly, the necessary nexus between that head of compensation and the compensable disability is not made out. To so hold is not to conclude that a worker's incapacity for work must necessarily be attributed exclusively to a single cause: cf Floreani Bros Pty Ltd v Woolscourers (SA) Pty Ltd (1976) 13 SASR 313 at 318-319; Australian Eagle Insurance Co Ltd v Federation Insurance Ltd (1976) 15 SASR 282 and Wardleworth v Green (1996) 66 SASR 421. It is simply to conclude that, in the present case, the disability that resulted from the operation did not affect the worker's entitlement to weekly payments of compensation.

But, as the list of items the subject of the claim, which list is set out above, demonstrates, compensation was paid to the worker under other heads. The hospital expenses, or at least those attributable to the second and third operations, appear to me to have been incurred as a result of the operation by Dr H. I would so conclude even though there is always a risk of a fusion failing. It also appears that the worker has received a lump sum payment under s43 of the Act, in respect of non-economic loss, specifically attributable to the effects of the operation. In addition, it is likely that there are medical and like expenses and travelling expenses that can be attributable to the disability that resulted from the operation performed by Dr H.

Although these amounts are, of course, recoverable by the worker as consequences of the compensable disabilities suffered in 1988 and 1989, it is likely that some or all of them are equally recoverable as consequences of the compensable disability that resulted from the operation.

Buried under these headings there may be some difficult issues. For example, the operation itself. Presumably, that falls to be regarded as a consequence of the original compensable disabilities. I do not think that the cost of the operation can be regarded as a cost "incurred by the worker in consequence of having suffered a compensable disability", the compensable disability being the result of the operation itself. It may also be that some of the other expenses will be shown, on closer scrutiny, to have nothing to do with the operation.

I return to the agreement made between the parties at the hearing in the District Court.

It may be that the parties overlooked the need to identify amounts, claimed to be the subject of a charge, as paid in respect of the compensable disability that resulted from the operation. Or, it may be that in some way not clear to me, the agreement was meant to resolve that.

I consider that the fair and appropriate course to follow is to remit the matter to the District Court. The outcome of the matter can there be considered in the light of the reasons of this Court, in the light of the agreed facts and in the light of the agreement between the parties. The parties will have to sort out the effect of their agreement and the appropriate outcome in the light of the judgment of this Court.

Conclusions

This case highlights some not insignificant difficulties that can arise in the practical operation of s54 of the Act, although hopefully they will arise only in relatively rare cases. They are difficulties which are likely to arise however the legislation is expressed, and some of them are probably capable of resolution only by reference to the specific facts of each case.

In my opinion the District Court judge erred. In my opinion his reasons for rejecting the claim by the Corporation for a first charge on the damages payable by Dr H to the worker were erroneous. On the facts of this case, it may be that the Corporation is entitled to a charge in respect of some of the amounts in respect of which it has claimed a charge. In my opinion, for the reasons given by Olsson J, it is not entitled to a charge in respect of the sum of $7,500.00 identified as "past and future income maintenance payments/loss of earning capacity".

The appeal should be allowed. The matter should be remitted to the District Court to determine, in the light of my conclusions and in the light of the agreement between the parties, whether the Corporation has a first charge on the damages payable to the worker for the amount of any of the payments (other than the amount of $7,500 paid for loss of earning capacity) made by the Corporation to the worker and identified by the Corporation in its letter of 11 December 1995 to the solicitors for the worker.

MATHESON J

I agree with the orders proposed by Doyle CJ and with his reasons.

OLSSON J

Preliminary

This is an appeal against the dismissal, by a District Court Judge, of a claim by the appellant to maintain a charge for $34,910 on certain moneys payable by the first respondent ("Hillier") to the second respondent ("Mrs Van Wyk"), in settlement of certain proceedings between those parties. The notice of appeal was filed out of time and the appellant sought an extension of time within which to prosecute the appeal. In resisting the appeal, Mrs Van Wyk seeks, inter alia, to argue that the extension ought not to be granted.

I first turn to the background facts.

The factual background

The second respondent is an enrolled nurse who, at relevant times, was employed at the Southern Cross Nursing Homes. She is 48 years of age and has no training or experience other than as an enrolled nurse.

It has not been in dispute that, on 9 July 1988, she suffered an injury to her lower back in the course of her employment, when she fell to the floor. She was confined to bed for some weeks, after which the pain in her back moderated, but did not fully resolve. She notified the relevant incident and claimed workers' compensation. This claim was accepted by the appellant and various moneys were paid to her from time to time, in accordance with the provisions of the Workers Rehabilitation and Compensation Act, 1986 ("the Act).

After eight or ten weeks she returned to light duties, although her lower back was causing her a good deal of pain. A few weeks later her employer insisted that she recommence normal duties. Her back symptoms worsened. It was accepted by the appellant that she sustained a second, work exacerbated injury on 8 March 1989. Though she became involved with a variety of medical practitioners and para-medical personnel, both before and after the exacerbation injury, her symptoms did not abate.

Ultimately, in early 1992, she was referred to Hillier, an orthopaedic surgeon. He arranged for various diagnostic techniques to be carried out, as a consequence of which he diagnosed a disrupted vertebral disc which, in her spine, was in fact at the L5-6 level.

The evidence before the learned trial Judge revealed that Hillier performed an anterior interbody spinal fusion of the L4-5 level on 10 February 1992. On 20 February 1992, he optimistically reported that she was "expected, ultimately, to make a good recovery from surgery, bearing in mind that this is a single disc problem with a healthy spine above and below ...". He stated, at the time, that her recovery and rehabilitation would occupy up to about nine months; and that it would be most unlikely that she could return to uncontrolled nursing for two years.

In the event that progress was never achieved. Quite apart from the fact that the fusion was unsuccessful, the medical evidence reveals that it was negligently performed at the incorrect level. It was in fact performed on an asymptomatic portion of the spine at one level above the appropriate level, bearing in mind the actual pathology in the back. It seems likely that Hillier had failed to note that, as is not uncommon, Mrs Van Wyk had six (and not the normal five) lumbar vertebrae.

It is common ground that, on 11 May 1992, Hillier performed a second operation - a post lateral fusion with a screw and plate fixation which involved both the L4-5 and L5-6 levels. That fusion also failed at the L5-6 level, with the consequence that her symptoms were worse than ever.

Mrs Van Wyk was referred to Professor Fraser, a leading orthopaedic surgeon, on 18 March 1993. At that point Hillier was recommending yet a third operation. She had demanded a second opinion. (No doubt this was a product of the fact that, on 12 January 1993, Mr P L Fry, an orthopaedic surgeon to whom Mrs Van Wyk had been referred for a medico-legal report, had, for the first time, identified to Mrs Van Wyk's solicitors that the operation of 10 February 1992 had been performed in the wrong location.)

On 13 August 1993 Professor Fraser carried out an anterior disc clearance and an interbody fusion at the L5-6 level, which was successful.

It was Professor Fraser's assessment (apparently accepted by the learned trial Judge) that the probabilities were that Mrs Van Wyk sustained internal disc disruption at the L5-6 disc, which was probably degenerate, but asymptomatic, prior to the fall at work. It was his opinion that she would never be able to return to nursing, due to her residual back disability.

The learned trial Judge also appears to have accepted the medical evidence that, even had a successful initial operation been conducted at the correct level, Mrs Van Wyk "was never going to be fit to work as an enrolled nurse", although she may well have achieved notional fitness for some other light work, if it was available to her. I pause to comment that, in practical terms, the likelihood of such work being available was extremely remote. At 48 years of age she had (as I have indicated) no training other than as an enrolled nurse. She would have presented to a potential employer as a person with significant, previously compensable back pathology, who could not lift significant weight, who ought not to indulge in repetitive bending or twisting and who had ongoing symptomatology.

It is to be noted that Professor Fraser's opinion was to the effect that, given the normal success rate of fusion operations, there was a 75% probability that the incorrect operation procedure had increased the recovery time by 18 months. It is also to be observed that it was his experience that, even had the original fusion been attempted at the correct level, practical experience indicated that such operative procedures normally had a 25% failure rate.

As was pointed out by the learned trial Judge, Mrs Van Wyk's physical situation was, over time, complicated by a psychiatric chronic adjustment disorder, with symptoms of anxiety and depression due to pain from her injury and also her domestic background - a situation which was exacerbated, to an extent assessed at 50%, by the unsuccessful surgery. His conclusion in that regard was based on the opinion of Professor Goldney, a specialist psychiatrist, that the onset of this psychological disorder preceded, but was compounded by,

the unsuccessful surgery. His evidence at trial was that such condition is now gradually improving.

In his reasons for decision the learned trial Judge appears to have accepted the evidence of a general practitioner, who provided day to day medical care to Mrs Van Wyk. He made these points -

(1) When the doctor first saw Mrs Van Wyk in September 1990, she was unable to pursue her normal work activities, because of her lower back problems related to her work accident in 1988; and

(2) A work hardening programme to which the appellant sent Mrs Van Wyk prior to the first operation only exacerbated her problems. At that time the doctor "could not foresee that ... [she] ... would be returning to full time work irrespective of whether any surgery was successful and certainly would never be able to return to work as an enrolled nurse".

The procedural background

On 11 January 1995 Mrs Van Wyk issued a summons (No 21 of 1995) in the District Court against Hillier, claiming damages against him in negligence in respect of the first abortive fusion operation. The appellant became aware of the existence of those proceedings on or about 31 July 1995. However, the appellant had earlier been aware of the negligence of Hillier by no later than December 1993.

By letters dated 11 December 1995 the appellant advised both respondents of its asserted right, pursuant to section 54 of the Act, to recover the amount of compensation paid by it to Mrs Van Wyk, from any damages that Mrs Van Wyk might recover against Hillier in action No 21 of 1995 ("the first action").

On 29 January 1996, that asserted right was rejected by Mrs Van Wyk, as to its validity, in relation to both liability and quantum.

As a consequence of that denial the appellant initiated an action No 167 of 1996 in the District Court against Hillier, seeking recovery from him, on the basis of his alleged negligence, pursuant to an asserted statutory right under section 54 of the Act, of $34,910 compensation said to have been paid by it to Mrs Van Wyk. It sought an extension of time within which to prosecute its claim and pleaded exculpatory facts said to excuse its failure to initiate proceedings within time. Such action had, clearly, been open to it when it first became aware of Hillier's negligence in December 1993.

In February 1996 an order was made to the effect that the two District Court actions be heard together, and that Mrs Van Wyk be granted leave to intervene in the action initiated by the appellant.

Both proceedings came on for hearing before the learned trial Judge on 15 April 1996, at which time it was announced by counsel for the parties in the first action that it had been settled, on Hillier paying an undisclosed, but substantial, sum. The appellant contended that it was taken by surprise by that announcement and was not, immediately, ready to proceed as dux litis. It sought an adjournment to prepare for trial, but was required to proceed with arguing its application for an extension of time - its action having been commenced some months after the time limited by section 54(7)(g)(ii) of the Act.

During the resultant debate the appellant unequivocally accepted that the quantum of the compromise arrived at in the first action was a reasonable and fair basis of compromise. It has not sought to resile from that stance.

It was pointed out by the learned trial Judge, in reasons separately published by him on 3 June 1996, concerning this aspect of the case, that the manner in which the relevant file had been handled reflected little credit on the responsible officers of the appellant. However, at the end of the day, he was constrained to grant the extension sought. The propriety of granting that extension is sought to be challenged in the Notice of Alternative Contention lodged by Mrs Van Wyk - a matter to which I shall return in due course.

On 2 August 1996 the appellant filed a revised statement of claim in its action (which action is the subject of this appeal), inter alia, to reflect the outcome of the first action.

The appellant's action came on for hearing before the learned trial Judge on the merits; commencing on 6 August 1996. He dismissed the claim, by order dated 21 August 1996, for written reasons published by him.

The present notice of appeal is directed to that order and was filed on 20 September 1996; i.e., almost two weeks beyond the statutory time within which appeals are to be instituted.

Issues arising on the appeal

The stance adopted by Mrs Van Wyk, at all stages, has been that, in the relevant historical circumstances, the appellant is not entitled to any charge on the settlement moneys in the manner which it asserts and seeks to enforce.

For his part Hillier concedes that, for the purposes of the Act, he is a "wrongdoer", who has conceded liability to pay damages to Mrs Van Wyk, in relation to the operation inappropriately performed on 10 February 1992.

It follows that what is here in issue is solely an alleged entitlement to attach the proceeds of settlement which were agreed to be paid in respect of a highly specific and discrete act of negligence - in respect of which a resultant disability has, it is said, given rise to a liability in the appellant to pay compensation to Mrs Van Wyk. The quantum of agreed damages is the subject of a suppression order. It is not known how that quantum was arrived at.

Before the learned trial Judge the parties essentially focused on the question of legal liability, there being some apparent agreement between the parties that the total quantum which could possibly be the subject of a charge was $34,910. However, on the hearing of the appeal, some dispute arose as to the precise terms of the agreement, which is not recorded in any transcript before the Full Court.

The relevant statutory provisions

It is convenient to commence a consideration of such provisions by going direct to section 54 of the Act.

So far as relevant for present purposes, this stipulates that -

" 54.(1) Subject to subsection (2), no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except -

(a) a liability under this Act;

*************** (2) ...

(3) ...

*************** (4a) ...

(4b) ...

(5) Where -

(a) compensation is paid or payable under this Act in respect of a compensable disability;

(b) a right of action exists against a person other than the employer for damages in respect of the disability,

the person by whom the compensation is paid or payable is entitled to recover from that other person the amount of the compensation in accordance with subsection (7).

(6) ...

(7) Where -

(a) compensation is paid or payable to a person ("the injured party") under this Act;

(b) the injured party has received, or is entitled to, damages from another person ("the wrongdoer") in pursuance of rights arising from the same trauma as gave rise to the rights to compensation under this Act;

(c) the person by whom the compensation is paid or payable under this Act ("the claimant") is entitled to recover the amount of the compensation by virtue of subsection (5) or (6),

then the following provisions apply:

(d) the claimant is entitled to recover the amount of compensation paid or payable under this Act from the wrongdoer or the injured party but subject to the following qualifications:

(i) no amount may be recovered from the wrongdoer's unsatisfied liability to the injured party; and

(ii) the claimant must exhaust its rights against the wrongdoer before recovering against the injured party; and

(iii) no amount may be recovered from the injured party in excess of the amount of the damages received by the injured party;

(e) the claimant shall, on giving notice to a wrongdoer of an entitlement to recover compensation under this section, have a first charge, to the extent of the entitlement, on damages payable by the wrongdoer to the injured party;

(f) any amount recovered by the claimant against a wrongdoer under this subsection shall be deemed to be an amount paid in or towards satisfaction of the wrongdoer's liability to the injured party;

(g) an action for the recovery of compensation under this subsection -

(i) may be heard and determined by the Tribunal (constituted of a presidential member); and

(ii) must be commenced within 3 years after the date of the trauma referred to in paragraph (b).

(7a) This section is intended to apply in relation to any action that arises out of the occurrence of a compensable disability -

(a) irrespective of where the disability occurred; and

(b) (i) irrespective of whether the action is brought before a court of this State or before a court of some other state, territory or country; and

(ii) notwithstanding that the court before which the action is brought would not (but for this subsection) apply, or take into account, South Australian law."

For the purposes of the section "damages" is defined as including any form of compensation payable, apart from the Act, in respect of a compensable disability. "Trauma" is defined as meaning "an event, or series of events, out of which a compensable injury arises".

The appellant's action was eventually prosecuted for the purpose of enforcing a charge said to arise under section 54(7)(e).

It follows that, to establish such charge, it was encumbent upon the appellant to prove that -

(1) compensation was paid by it to Mrs Van Wyk, under the Act, in respect of a compensable disability; and

(2) she has received, or is entitled to, damages from a third person, in pursuance of rights arising from the same trauma as gave rise to the right of compensation under the Act.

For the purposes of (1) above, it is to be noted that the appellant has paid compensation to Mrs Van Wyk in respect of all disability sustained by her since her initial injury. In this regard it is conceded that only two claims for compensation have, formally, been made by Mrs Van Wyk against the appellant, namely, one in respect of the primary injury sustained on 9 July 1988 and another in respect of the secondary "exacerbation" injury of 8 March 1989. No claim has ever been recorded by the appellant in respect of the sequelae of the negligent operation of 10 February 1992. Such a situation is patent from the fact that the appellant has only made two section 43 determinations on its file 02033742/02 (which appears to relate to both injuries), that is to say an interim determination of a 10% permanent residual disability of the lower back dated 12 May 1992 (arising from the 1988 and 1989 injuries) and a final 20% permanent disability (flowing from the exacerbation injury) dated 17 July 1995.

Section 30 of the Act governed the liability to pay compensation in respect of any primary or secondary disability. So far as applicable for present purposes, it stipulated that -

" 30.(1) Subject to this Act, a disability is compensable if it arises from employment.

(2) A disability arises from employment if -

(a) in the case of a disability (not being a secondary disability or a disease - it arises out of or in the course of employment;

or

(b) in the case of a disability that is a secondary disability or a disease -

(i) the disability arises out of employment;

or (ii) the disability arises in the course of employment and the employment contributed to the disability.''

(3) Subject to subsection (4), the employment of a worker includes -

(a) ...

(b) ...

(c) ...

(d) ...

(e) attendance by the worker at any place (which may include the worker's place of employment) for the purpose of -

(i) ...

(ii) receiving medical treatment for a compensable disability;

(iii) ...

(iv) ...

..."

It follows that any liability of the appellant to pay compensation to Mrs Van Wyk, if it arose in relation to the negligent operation, depended or whether or not the relevant disability arose out of or in the course of attendance by her at a place for the purpose of receiving medical treatment for a compensable disability.

In the instant case there is no doubt that it did, because the purpose of the negligent operative treatment was to treat the work-related symptomatology at the L5-6 level.

The issue between the parties

It was argued by counsel for Mrs Van Wyk that the damages which she was entitled to recover from Hillier were not damages "in pursuance of rights arising from the same trauma as gave rise to the right to compensation under ... [the] ... Act".

Bearing in mind that the damages agreed to be paid to Mrs Van Wyk were solely limited to common law damages to which she claimed to be entitled in respect of the performance of the unnecessary and inappropriate surgery on what Mr Fry described as the "innocent" L4-5 area of the spine, the learned trial Judge upheld counsel's contention. He said that "the surgery was on areas that were not part of her work injury, totally non-symptomatic areas". The surgery "could not be related to the trauma of the plaintiff's disc prolapse".

He went on to reject any proposition that section 30 of the Act in some way operated "to incorporate the negligent act of the surgeon to a part of the body unrelated to the prior compensable disability".

He further went on to say -

" No doubt by reason of the negligence the nature of the permanent disability of Mrs Van Wyk is now greater than it was prior to the surgery. The hypothetical matter I previously mentioned would no doubt have such an effect. It is also apparent that Mrs Van Wyk was totally and permanently disabled for performing her prior work before the unfortunate surgery of Mr Hillier.

In this case of course it is my view that Mrs Van Wyk's right to damages is not related to or connected with her right to compensation for her 1988 injury."

He held that the appellant was not, in the circumstances, entitled to a charge on the damages recovered by the secondnamed respondent pursuant to section 54(2) of the Act.

The issues on the Appeal

In essence the contentions of the appellant were as follows -

* when Mrs Van Wyk received treatment from Hillier she had attended for medical treatment for the compensable disability which stemmed from the work incident in 1988 and/or the exacerbation injury in 1989;
* when operated upon she was receiving medical treatment (within the meaning of section 30(3)) for a compensable disability, albeit that the treatment given her proved to be negligent;
* any disability which arose from the negligent operation was, thus, a primary, compensable disability, because the trauma giving rise to it was, within section 30(2)(a) of the Act, a trauma which arose in the course of what was deemed to be her employment. (It could not have been a secondary disability because it was not a disability to which "the employment contributed".)
* she was entitled to and did receive workers' compensation benefits in respect of the operative treatment and its sequelae, which are said to have totalled $34,910;
* the right to claim damages against Hillier arose from the trauma to Mrs Van Wyk's back as a result of the negligent surgery; i.e., both that claim to damages and also a liability to pay compensation to Mrs Van Wyk for any disability arising from the negligent back operation arose from a single trauma;
* a failure to apply the relevant statutory provisions on that footing would result in double compensation in a manner inconsistent with the plain intendment of the Act.

Counsel for Mrs Van Wyk pointed out that, although the appellant was, in effect, seeking to characterise the outcome of the first operation as either a primary disability or as a disability arising from an exacerbation of a pre-existing injury, the fact was that, immediately prior to the operation, payments of compensation were already being made to her, on her exacerbation claim on file 02033742/02, on the basis of total disability. Thus the negligent operation did not alter that situation - "it had no effect on the respondent's capacity to return to her former duties and there was no evidence that any other type of work for which she was suited was reasonably available to her".

It was said that the disability arising from the negligent operation did not alter her pre-existing actual or deemed total incapacity for work; and was not compensable per se, because her status was not changed by it. Even had this operation been successful she would, on the evidence, still have been (or have been deemed to be) fully incapacitated. The damages received simply reflected the extent to which the negligent operation had caused additional injury; and did not arise from the same trauma as actually founded the right to and payment of compensation under the Act.

These competing contentions fall to be considered in light of the reasoning of Cox J in Alsafe Safety Industries Pty Ltd and Another v Workers Rehabilitation and Compensation Corporation and Another (1990) 54 SASR 320. He there said (at 329) -

"I would interpret the phrase as linking in a causal sense the worker's dual entitlement to compensation and damages. In this context it simply means `in accordance with' a right to damages that has a common origin with the right to compensation and does not imply that the right to damages has actually been, or is being pursued by the worker ..."

A similar concept was articulated in Spry v Manser; Workers Rehabilitation and Compensation Corporation (Intervenor) (1993) 60 SASR 586 at 593 ("Spry") -

"The words `in pursuance of rights arising from the same trauma as gave rights to the rights to compensation under this Act' are words of definition or limitation qualifying the `damages' the receipt of which, or entitlement to which, by the injured party is made a condition of the claimant's recovery rights under par (d). This seems to be expressing, though perhaps not as clearly, the circumstances that conditioned the recovery provisions of the 1971 Act - that the one situation gave rise uno ictu to the employer's liability to pay the worker compensation and someone else's liability to pay the worker damages."

In that case Cox J went on to opine -

"... In this Act `trauma' is not simply a fashionable synonym for `injury', but is defined to mean `an event, or series of events, out of which a compensable disability arises' (53). I conclude that the notion that the same trauma in subsection (7) is conveying is that it will be one and the same event, or series of events, that has given rise both to the right to damages and the right to compensation. Mr Mansfield submitted that it would be enough if one event in a series founded the right to damages and another event in the same series, the right to compensation. Notwithstanding the duplex form of the `trauma' definition, I do not think that the respective rights could be said, in such a case, to arise from the same trauma."

That view was not rejected on appeal to the High Court.

Spry was a case in which neck and back injuries sustained in a motor vehicle accident, which had nothing to do with the victim's employment, were later exacerbated by an employment related incident, which gave rise to entitlement to compensation. The Full Court held that no section 54 charge arose in relation to a damages claim brought by the victim against the original tortfeasor.

Such a situation fell to be contrasted with that in Paglia v Trice (1991) 56 SASR 62, in which a single incident, at the one stroke, established both a common law right to damages and also a right to workers' compensation. There the section 54 charge was plainly enforceable.

In the instant case it seems to me to be beyond question that the negligent operation gave rise, uno ictu, to a common law damages claim against Hillier and, potentially, a liability in the appellant to pay compensation, if properly claimed by Mrs Van Wyk in respect of any disability resulting from it.

However, no such claim has ever been made, for the simple reason that the evidence established, and the learned trial Judge accepted, that the 1988 and 1989 injuries and their sequelae (including Mrs Van Wyk's psychiatric condition, albeit contributed to by the negligent operation) had already brought about a situation that Mrs Van Wyk was in fact (or, alternatively, at least deemed), permanently totally disabled from work. She was being paid compensation on that basis.

In practical terms the primary additional physical disability wrought by the negligent operation was one which, whilst it may have sounded in common law damages, was of no practical significance for the purposes of the Act, because it was not shown to operate, and could not, in practical terms, have operated so as to alter the then status of Mrs Van Wyk. Being already totally incapacitated for work as a consequence of her earlier injuries, the additional insult to her back could not (and did not) alter that existing situation. As Ms Nelson QC, of senior counsel for Mrs Van Wyk expressed the situation - "Nothing he ... [Hillier] did affected the [pre-existing] situation". One cannot logically produce a situation which is more "total" than "total".

Indeed, if the situation merely stood on the evidence alone, then the only reasonable inference was that the very actions of the appellant, in paying compensation under the original claims, spoke eloquently of a recognition of such a situation. By the date of its 1995 determination it well knew of the situation in relation to the negligent operation and it elected not to pursue any action against Hillier in respect of it. The plain fact of the matter was that, prima facie, no compensation was payable by the appellant to Mrs Van Wyk beyond that for which the appellant was already liable and was actually paying under its earlier determinations; and none was ever claimed by or paid to her. Section 54 of the Act therefore had no application on the facts.

In so saying I do not ignore the fact that the appellant paid the cost of all three operations. However, that does not alter the fundamental situation on the evidence as led. Bearing in mind the fact that it sanctioned the first operation (albeit in relation to the symptomatic area of the spine) and the relatively high failure rates of fusion operations, it has not demonstrated that any of the relevant expenditures would, more probably than not, not have been incurred. It did not even attempt to do so. Rather it sought to pitch its argument on an absolute statutory right to recoupment, based on an erroneous summation of the facts; and it was not demonstrated that any of the payments sought to be recouped were, in truth, paid in respect of a relevant compensable disability, for which the appellant has or could, properly, have made a determination of liability pursuant to section 53 of the Act - no claim ever having been made by Mrs Van Wyk.

However, a problem which arises on this appeal is that the waters have been considerably muddied by some concession said to have been made by counsel to the learned trial judge during the course of final addresses. Unfortunately, there now seems to be considerable doubt as to what that concession was, in specific terms.

Inter alia, the following exchange occurred during the course of the address of Ms Nelson QC on the hearing of the appeal -

"MR PHELPS: The matter proceeded on the basis, on my understanding of it, and I thought this was clear until today, that his Honour would pronounce on each of the heads of damage that were held by WorkCover as being recoverable. To save time and effort on the part of both parties, if he decided a particular head of loss was subject to recovery, that amount was agreed between the parties. There were individual amounts as per correspondence between the parties which made up the $34,910. It would be illogical for us to have advised the judge as we did in the closing argument that all he need do was make a pronouncement on each one and then leave a pronouncement on the amount. If what my friend says is correct, that is, that it was a maximum amount that could have been recovered, it would be a nonsense. There is just no purpose to agreeing an issue like that. It was agreed each one of those heads of damage were recoverable. There is the amount. You don't have to trouble yourself as to how it is made up or what the details of it were.

DOYLE CJ: I gather this isn't recorded in the transcript anywhere?

MR PHELPS: In my submission, and I can't put my finger on it at the moment, in my closing submissions to Judge Lowrie I advised him exactly that. I might be able to locate it.

DOYLE CJ: They don't usually type that up.

MS NELSON: Mr Allison has a file note which indicates that there was an agreement that if WorkCover did have recovery $34,910 would be the extent of the recovery. There was an agreement that WorkCover would not seek to offset any further amount against Mrs Van Wyk's ongoing payments under the Act. So I think that does indicate to me that there was an agreement if there was a right of recovery it was $34,910.

DOYLE CJ: I think Mr Phelps is conceding one thing your way, that the judge was to consider item by item these agreed amounts. Didn't follow recovery in respect of each item.

MS NELSON: I was saying the same thing in a different way.

OLSSON J: If hospital expenses were recoverable it is $10,000.

MS NELSON: That's right. The limit was $34,910. There didn't need to be evidence called of each individual item but there would be an argument at the end of the day about whether any individual item was payable."

This is a somewhat unsatisfactory state of affairs. It may well be that the "agreement" between the parties was not intended to have given rise to any inference contrary to that which naturally arises on the evidence and was merely intended to facilitate proof of quantum - but that is far from clear.

If that was so it would follow that, on the evidence as it stands, the appellant has simply failed to discharge its onus of proving an entitlement to recoupment of the moneys claimed. However, in the circumstances, I agree that this appeal should be allowed and the matter remitted to the District Court on the basis adverted to in the reasons published by the Chief Justice.

It only remains to say that, in so concluding, I agree with the reasoning of the Chief Justice in relation to the time points argued on the appeal.