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Motor Vehicles Insurance (PNG) Trust v Job Builders Pty Ltd [1993] PNGLR 272 (31 July 1992)

PNG Law Reports 1993

[1993] PNGLR 272 - MVIT v Job Builders Pty Ltd 

[1993] PNGLR 272

SC457

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

MOTOR VEHICLES INSURANCE (PNG) TRUST

V

JOB BUILDERS PTY LTD

Waigani

Los Sheehan Brown JJ

23 March 1992

31 July 1992

INSURANCE - Workers' compensation dependents' claim - Indemnity by workers' compensation insurer sought from motor vehicles compulsory third-party insurer - Old workers' compensation legislation repealed after death but before payment to dependants - Effect of new legislation - Whether right to indemnity accrues at time of death or payment - Effect of Statutes of Frauds and Limitations Act Ch 330 s 20 - Interpretation Act Ch 2 s 63(1)(c) - Workers' Compensation Act 1958 (the old act) - Workers' Compensation Act Ch 179 (the new act).

Facts

An employee of the respondent was killed in 1982 as a result of an accident incurred during the course of employment. Subsequently, the respondent's, workers' compensation insurer paid money to the man's dependants. The final payment was made in 1986 and the employer sought an indemnity from the motor vehicle insurer. On 1 January 1984, the Workers' Compensation Act Ch 179 (the new act) came into force and repealed the Workers' Compensation Act 1958 (the old act). The repealed act gave a right to indemnity, but a limitation period of two years affected that right. The National Court found that the Motor Vehicles Insurance (PNG) Trust was liable to indemnify the employer in the amount paid to the dependants. The Trust appealed from that order.

Held

1.       The employer was entitled to an indemnity notwithstanding that, at the time of the payment of compensation, the two-year limitation period had expired.

2.       Notwithstanding the repeal of the earlier act, the new Workers' Compensation Act provided that such repeal shall not affect any right acquired under any enactment so repealed. The compensating employer had established the conditions of his right of indemnity.

3.       The right of indemnity arises at the time of the motor accident and is an inchoate right, the final condition for recovery from the trust being the payment of compensation to those entitled, viz. the dependants - adopting the reasoning in Tuckwood v Mayor of Rotherham [1921] 1 KB 526.

Cases Cited

Papua New Guinea cases cited

Fletcher Morobe Construction Pty Ltd v Minister for Lands [1988-89] PNGLR 25.

Lakunda Plantation Pty Ltd v Maluvil [1981] PNGLR 252.

Tonava v Electricity Commission of PNG [1987] PNGLR 81.

Other cases cited

Abbott v Minister for Lands [1895] UKLawRpAC 18; [1895] AC 425.

Cowell v General Motors-Holdens Ltd (1977) 17 SASR 148.

Dering v Earl of Winchelsea [1775-1802] All ER 140.

Hamilton Gell v White [1922] 2 KB 422.

Legal and General Assurance Society v Drake Insurance [1992] 1 All ER 283.

M'Cafferty v MacAndrews & Co Ltd [1930] ACT 599.

Seatainer Terminals v Dunn (1981) 27 SASR 21.

Tickle Industries Pty Ltd v Hann [1974] HCA 5; (1974) 130 CLR 321.

Tuckwood v Mayor, Etc, of Rotherham [1921] 1 KB 526.

Williams v Usher [1955] HCA 60; (1955) 94 CLR 450.

Counsel

R Thompson, for the appellant.

P Payne, for the respondent.

31 July 1992

LOS J:  An employee of the respondent was killed as a result of a motor traffic accident in Lae on 27 November 1982. The deceased, Sam Nonden Nopi, was travelling as a passenger in the course of his employment. His employer, the respondent, paid workers' compensation to the dependants of the deceased in two parts. The first part was paid in 1985 and the second part was paid in 1986. The total sum was K16,444.50. The respondent then sought indemnity from the appellant, the Motor Vehicles Insurance (PNG) Trust (hereafter, the Trust). The Trust denied liability, and so the respondent initiated National Court proceedings on 19 June 1987. On 30 May 1991, the Court decided that the Trust was liable and ordered it to indemnify the respondent in the exact sum paid by the respondent to the dependants of the deceased. This appeal is from that decision.

At the time of the accident and the death, the relevant workers' compensation legislation in force was the Workers' Compensation Act 1958 as amended, (hereafter, the old act). This act was published in the Revised Laws in 1982. A new act was passed in 1978 but it did not come into force until 1 January 1984 (the new act). Up until 1 January 1984, therefore, the old act applied. The first question, therefore, is, what is the correct legislation under which liability of the trust must be determined. The respondent says the old act applies because the cause of action arose in 1982, when the old act was in force. The appellant says the new act applies because the cause of the action as against the trust was not the death but the payment of compensation to the dependants of the deceased. The appellant seeks to rely on the new act because particular words and phrases in the old Act have been substituted by new expressions in the new Act. Ms Thompson argues that the underlying meaning, as seen from a line of decisions on the old act, has been materially affected by the coming into operation of the new act. She says that material change is favourable to her client's case on these facts. But if the court should apply the provisions of the old act, Ms Thompson seeks to distinguish that line of reasoning in the decisions (mainly Australian) on overseas provisions which are similar to our old Workers' Compensation Act.

In arguing that the liability for indemnity arises under the old act, the respondent relies on s 63(1)(c) of the Interpretation Act Ch 2. The section says:

"(1)     The repeal of a provision does not:

(c)      affect any right, privilege, obligation, or liability acquired, accrued or incurred under the repealed provision;

and any such investigation, legal proceeding, or remedy may be instituted, continued or enforced, and any such penalty, forfeiture, or punishment may be imposed, as if the repeal had not been made."

The respondent also relies on a number of decided cases on this point. For example, an old English case of Hamilton Gell v White [1922] 2 KB 422 and the decision of the Supreme Court of PNG in Fletcher Morobe Construction Pty Ltd v Minister for Lands [1988-1989] PNGLR 25.

The appellant says that the Trust's liability for indemnity must be determined under the new act because the cause of action for indemnity arose when the payments were made to the dependants in 1985 and 1986. If the cause of action is to be based on the death in 1982, as the respondent argues, then the appellant submits that the claim for indemnity is time barred by the operations of Statutes of Frauds and Limitations Act Ch 330 s 20. The section says:

"20.    Limitation of certain actions of debt, etc

All actions of debt for rent upon any indenture of demise

all actions of covenant or debt upon any bond or other specialty and

all actions of debt or scire facias upon any recognizance and

all actions of debt upon any award where the submission is not by specialty or for money levied under fieri facias and

all actions for penalties damages or sums given to the party grieved by any law now or hereafter in force in the country

shall be commenced and sued within the time and limitation hereinafter expressed but not afterwards that is to say

the said actions of debt for rent or covenant or debt upon any bond or other specialty and actions of debt or scire facias upon recognizance within twenty years after the cause of such actions

the said actions by the party grieved within two years after the cause of such actions and

the said other actions within six years after the cause of such actions

Provided that nothing herein contained shall extend to any actions given by an enactment where the time for bringing such action is or shall be thereby specially limited."

The appellant relies on the two-year limitation period. The limit runs from the date on which cause of action arose. Accordingly, it is argued that if the cause of action for indemnity arose in 1982, the date of death, it would have become time-barred in 1984, even before the workers' compensation payments were made. I consider that, while it is true that the right to indemnity and right to workers' compensation were triggered by the same act, ie by the death of the deceased worker, the right to claim indemnity was not enforceable from the date of death but from the date of payment of workers' compensation. At any rate, it is questionable whether time limitation applies to a claim for indemnity. It is my view that as soon as the worker was killed, his employer accrued a right to claim indemnity, but the right was not enforceable until the employer had paid the compensation to the dependants of the deceased worker. I think that the statements by three Lord Justices in Tuckwood v Mayor of Rotherham [1921] 1 KB 526 support this view. Bankes LJ at p 532 said:

"It is a statutory right of indemnity which only arises under that sub-section, and in order to establish the right to that indemnity the person claiming it has to establish that the workman has recovered compensation under the Act, that he is the person by whom compensation was paid, and that the person against whom he claims the indemnity was liable to pay damages to the workman".

And at p 533, he said:

"To accept any other interpretation of the statute would lead to this result, that in a very large number of cases, if not the great majority of cases, a person who sought to take advantage of the indemnity clause in s 6 of the Workmen's Compensation Act, 1906, would find that he would be out of time, because the proceedings instituted by the workman might very probably not be concluded by the establishment of the workman's right to recover compensation within six months of the date of the accident."

Scrutton LJ at p 536 said:

"It is true that negligence is one of the ingredients of the liability to indemnity, but there are several other ingredients of the liability--namely, that the person asking for indemnity has, under the Workmen's Compensation Act, either paid or been compelled by an order to pay the compensation provided by the Act, which may be something quite different from the damages which would follow at common law for an act of negligence."

Atkin LJ at p 538 said:

"He derives his right to make a claim against the defendants, not because of their act or default, but because the Act of 1906 has imposed a liability upon them to indemnify him if he has had to pay compensation to his injured workman by reason of that neglect or default. So that is doubly removed, if I may say so, from the act or default. First, the plaintiff has to rely upon the statutory right to indemnity, and, secondly, he does not acquire that statutory right to indemnity unless the workman has recovered compensation from him."

I consider that the view of the PNG Supreme Court in Fletcher Morobe's case applies here. At p 27, Amet J said:

"The appellant has submitted that the trial judge erred in his interpretation of the 'right' (assuming it to be properly so called) conferred by s 54 of the Land Ordinance 1911. It was argued that s 54 only conferred a 'potential right' and not a right referred to in the saving provisions of s 4(1) of the Land Ordinance 1962. The right referred to in s 4(1) was one created by, acquired under or existing under the Land Ordinance 1911, and the s 54 right was not such a right. It was only potential.

I agree. In my view s 54 created potential rights only, contingent or conditional upon future events taking place for the rights to accrue or be realised. For instance, the first proviso is that if a lease is forfeited, then no compensation shall be paid for any improvement. Secondly, the condition for the payment of compensation for improvements is upon the expiration of the lease by effluxion of time. Both of these were events in the future. In my view, the right to compensation is created, acquired or comes into existence when the lease expires, and not before. It is only enforceable upon and after the expiry of the lease. Prior to that, it is only a potential or contingent right. It had not yet been acquired."

I agreed with the same interpretation, and I said at p 30:

"By virtue of s 4(2), the provisions of the 1962 Ordinance do apply to the rights saved in s 4(1). But the application is subject to two requirements: first, some provisions cannot apply to the rights saved by s 4(1) where that intention appears; and secondly, some provisions do not apply because of s 4(2A). Section 4(2A) specifically excludes all the provisions of Pt V except for ss 53, 54, and 54(A).

By this construction the appellant cannot rely on s 55(2) of the 1962 Ordinance because s 4(2A) excludes the application of s 55 in relation to any of the rights saved by s 4(1).

The appellant argues, however, that the rights saved by s 4(1) of the 1962 Ordinance are accrued rights, not potential rights. The need to claim compensation did not arise when the 1911 Ordinance was still in force. The need arose when the lease expired. And the lease expired after the 1911 Ordinance had been repealed by the 1962 Ordinance. Hence the right to claim compensation became accrued under the 1962 Ordinance. In support of that argument, the appellant relies on Abbott v Minister for Lands [1895] UKLawRpAC 18; [1895] AC 425, and Hamilton Gell v White [1922] 2 KB 422 at 431."

And I concluded at p 32 that:

"Having read those cases, I think the appellant's contention is correct. If the saving clause in the 1962 Ordinance refers to potential rights, there would be no need for the 1962 Ordinance itself."

The respondent, as the employer, had acquired right to indemnity when the worker was killed, but the right only became enforceable when the respondent paid compensation to the dependants in 1985 and 1986. In my view, therefore, the controlling legislation is the old 1958 act. Section 23(1)(2)(e) say:

"23(1) Remedies against both the employer and a stranger. For the purposes of this section, 'compensation' includes a payment under Section 19.

(2)      Where an injury in respect of which compensation is payable under this Act is caused under circumstances that appear to create a legal liability in some person other than the employer to pay damages in respect of the injury:

(e)      where the worker has received compensation under this Act, but no damages or less than the full amount of damages to which he is entitled, the person liable to pay the damages shall indemnify the employer against so much of the compensation paid to the worker as does not exceed the damages for which that person is liable."

The appellant urges the Court to interpret s 23 of the old act in the way the Supreme Court of Northern Territory had done, with a further reliance on the terms of the new act. With respect, the Australian High Court in Tickle Industries Pty Ltd v Hann [1974] HCA 5; (1974) 130 CLR 321 has persuasively tackled the issue. The High Court emphasised the purpose of the Northern Territory Workers' Compensation Act, the relevant section of which is equivalent to s 23(2) of the old act. These issues which Ms Thompson argues have been summarised by King CJ in Seatainer Terminals v Dunn (1981) 27 SASR 21. At p 23, he says:

"Certain questions relating to the construction of the section which are pertinent to the question before us have been settled by authority. The right conferred on the employer is a statutory right to indemnify conditioned upon the existence of the matters set out in the section: Tuckwood v Rotherham Corporation, per Bakes L J at p. 532, per Atkins L J at p. 538; Tickle Industries Pty Ltd v Hann. The cause of action which the section creates in the employer is independent of the injured worker's cause of action for damages and is in no sense in the control of the injured worker: Tickle Industries Pty Ltd v Hann, per Barwick CJ at p. 327; Cowell v General Motors-Holdens Ltd., per Wells J at p. 164. Moreover although the right to indemnify is conditioned upon an original liability of the third party to the injured worker arising out of the accident, it does not depend upon the continued existence of that liability. Thus the employer has been held to be entitled to enforce the indemnity notwithstanding that the third party's liability to the worker has been extinguished by the death of the worker (Smith's Dock Company v John Readhead & Son), or by lapse of time (Tickle Industries Pty Ltd v Hann), or has become statute-barred (Cowell v General Motors-Holdens Ltd). The expression 'is entitled' in sub-s. (d) is not temporal in connotation, but relates to the entitlement flowing from the original liability referred to in the opening words of the section. The words 'still liable' likewise are not temporal in connotation, but connote the balance of the original entitlement after deducting any amount which the worker has received by way of damages: Cowell v General Motors-Holdens Ltd."

The judgments of the majority in that case (Zelling and Mohr JJ), while holding differently from the Chief Justice on the principal question, agreed in fact with the Chief Justice's summation of the reasoning in those decisions which he quotes. It is that interpretation with which I agree. With respect, this interpretation gives a purpose and meaning to s 23(2)(e) of the 1958 act and, therefore, I accept it and apply it to this case.

In the light of the interpretation and summation, I accept that the Statutes of Frauds and Limitations Act can have no application. At least one National Court decision has gone this way. That was the decision of Miles J in Lakunda Plantation Pty Ltd v Maluvil [1981] PNGLR 252. At p 255, His Honour said:

"Part III of the 1951 Act is entitled 'Statute of Limitations' and the provisions of that part, I think it is fair to say, are expressed in outmoded and archaic language. The Act itself formally repeals and re-enacts those provisions of the Courts and Laws Adopting Act 1899 of the former Territory of Papua and those provisions of the Laws Repeal and Adopting Act 1921 of the former Territory of New Guinea which adopted as part of the law of this country the Statute of Frauds and of Limitations of 1867 of Queensland (hence the reference to 'this colony' in s 23). The difficulty lies in applying a colonial statute of limitations over one hundred years old to a right arising under another statute of a type that could hardly have been conceived of at the time the statute of limitations first came into existence. Being as liberal as one might in the application of the language employed, I cannot see any way in which the statute of limitations in force in this country can be said to apply to a right under the Workers' Compensation Act to refer a matter to arbitration. Both s.17 and s.23 of the 1951 Act refer to limitation of 'actions'."

His Honour also directed his mind to a possibility of dire consequences on employers and insurance industry generally in PNG if an employee did nothing for years because he was not forced by any time limit to act fast. To answer this reservation, His Honour at page 255 quoted the most pertinent part of the unanimous decision of the House of Lords in M'Cafferty v MacAndrews & Co Ltd [1930] AC 599 at 614.

"Counsel for the respondents argued that it would permit the workman to make a claim, then do nothing more, and perhaps put off the action for several years, thus keeping his claim alive all the time. The answer is easy. If a workman makes a claim and does nothing, the employer may apply for arbitration so as to put an end to the claim one way or the other".

Ms Thompson has argued with great skill and logic and has relied heavily on the language of the new act and has urged this Court to depart from the interpretation and views taken by the Australian High Court in Tickle Industries v Hann and others that have followed that case. Section 86(1)(2)(d) of the new act says:

"86.    Remedies against employer and stranger.

(1)      In this section 'the third party' means a person other than the employer having a legal liability to pay damages in respect of an injury for which compensation is payable under this Act.

(2)      Where the injury for which compensation is payable under this Act was caused by a third party:

(d)      if the worker has received compensation under this Act, but no damages or less than the full amount of damages to which he is entitled:

(i)       the third party shall be liable to indemnify the employer against so much of the compensation paid to the worker as does not exceed the damages for which the third party is still liable; and

(ii)      the employer may enforce the indemnity against the third party by action by the employer."

The counsel argues that the PNG Parliament has intended to give a new meaning to the Workers' Compensation Act by deleting certain phrases and words and, instead, enacting new ones. The old act referred to "circumstances creating a legal liability" whereas the new act refers to a person "having a legal liability". It is argued that the old act referred to liability at the date of the accident. The new act refers to the liability at the time of enforcing the indemnity. The new enactment adds to the phrase "that person is liable" the word "still" and it becomes "is still liable". It is contended that, with the inclusion of the word "still", the meaning has changed. It means that the third party's legal liability must be determined at the time when the employer's action is being enforced, not what the legal liability may have been at the date of the accident. The result intended by the counsel is, of course, obvious: that is for some reason a third party may no longer be liable at the time when the employer's action is being enforced. For instance, the claim may be time-barred. The counsel, in this respect, relies heavily on the majority decision in Seatainer Terminals v Dunn.

Because of my view that the old act applies, the application of the new act is irrelevant. But if it did apply, I consider that the inclusion of the new words and phrases has not changed the intention to maintain the right of the employer to claim indemnity. I accept the view of King CJ in Seatainer Terminals that "is still liable" means so much of the original entitlement which remains unpaid. I would add that "having a legal liability" would have the same supportive meaning as "is still liable".

DAMAGES AND INTEREST

In a sense that proceedings for indemnity are proceedings for reimbursement, there may not be any dispute. But a party is entitled to know what the reimbursements are about. The party claiming indemnity must show the details of the award made to each dependent and the basis of assessment, which may be shown in various schedules under the relevant Workers' Compensation Act. Also, the Trust may be interested to know what reductions, if any, might have been made and may be relevant for consideration under the general policy of workers' compensation (see Williams v Usher [1955] HCA 60; (1955) 94 CLR 450 and Tonava v Electricity Commission of PNG [1987] PNGLR 81).

Further, it is the accepted practice that a claim for liability and a claim for damages are distinct parts of a case and, if there is a dispute on damages, evidence must be produced to support the claim. Apparently, the dispute by the appellant extended to the extent of the indemnity. Evidence was, therefore, necessary to be called in this respect. There is yet another reason that I noted from Brown J's draft judgment since drafting my judgment. That is that a question as to the right amount of indemnity could be referred to an arbitrator under the circumstances described in section 23 of the old act.

The Judicial Proceedings (Interest On Debts and Damages) Act Ch 52 gives the National Court a discretionary power to award interest on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of the judgment. The Supreme Court can only interfere if there is an error in the exercise of the discretionary powers. The National Court awarded the interest at the usual rate of 8%. The court decided to apply the interest from 20 November 1985, the date when the insurer of the respondent first made the claim for indemnity after the whole of the compensation had been paid. In principle, the National Court did not fall in any error.

I would dismiss the appeal against the finding of liability in the appellant to pay indemnity. On the other hand I would uphold the appeal against the assessment of damages.

SHEEHAN J: I have had the benefit of reading my brother Judge Los' judgment and reached the same conclusion.

BROWN J: I have had the benefit of reading my brother Judge Los' judgment. I agree with his reasonings and his finding that the Trust is liable to indemnify the respondent. I wish to make some comments. The facts of the case are adequately set out in his judgment. The respondent is the original employer, who paid workers' compensation to the deceased's dependants. The respondent contends that it should be indemnified. Los J's reasons explain why this is so.

Both the Trust and the employer bear a risk. Workers' compensation legislation imposes the obligation on the employer to insure against his risk. The Trust is the defendant in proceedings involving motor accidents where claims for damages for negligence arise. It is the insurer of motor vehicles.

Where an injured person may simultaneously claim under both legislation, s 86(2)(d) of the Workers' Compensation Act Ch 179 affords the employer (and by subrogation the insurer) the right to indemnity from the Trust. Insurance in these circumstances is analogous to co-insurance, with the important difference that there is no common assured. On the one hand, the employer is protected by his compulsory insurance. On the other, the motor vehicle owner is protected by his insurance with the Trust. Equitable principles can illuminate why the Trust, the insurer for common law damage claims, should be held liable to indemnify, in this case. The equitable principle that the burden should be shared between co-insurers, or qui sentit commondum sentire debet et onus, as discussed in Dering v Earl of Winchelsea [1775-1802] All ER 140 at 143, is sufficiently analogous to this claim for indemnity for me to find support in its application.

The trust's liability to indemnify on the one hand and pay damages to an injured motor vehicle accident victim on the other arises at the time of accident, under the old act. The injured person's rights to damages at common law are extinguished upon failure to claim or give notice within a prescribed period, however, but the employer is not affected by such failure. While a right to contribution between co-insurers arises by virtue of equitable principles, the liability to indemnify in an amount attaches by statute. Section 86(2)(d) extends the right to contribution in the employer's insurer beyond a share or contribution to indemnity. Secondly, it seeks to quantify such indemnity. The claim that Job Builders Pty Ltd (indirectly its insurer by its subrogation provisions) brings against the Trust is its own action, and the rights to be ascertained are its own, not those of the dependants of the deceased.

Such rights are ascertained at the time of the accident. That is the incident which gave rise to the claim on the employer for compensation, although Ms Thompson argues that such right to indemnity could not then arise until some later event, the payment of workers' compensation.

I do not agree, for there is an inchoate right in the employer to indemnity when it entertains the dependants' claim on injury or death, a right which crystallises when compensation is paid.

In Legal and General Assurance Society v Drake Insurance [1992] 1 All ER 283, the English Court of Appeal had occasion to consider whether a right to contribution between insurers of the same risk was excluded by the insured's failure to notify the co-insurer of the potential claim within a specified time. A pedestrian had claimed damages, for injuries received, from a car owner. The owner had, in fact, two policies covering the same risk. A claim was settled by one of the insurers, who subsequently discovered the existence of the other insurer. No claim had been made on the other insurer, within the time prescribed. The Court held that where one of two insurers who were independently and unconditionally liable to the same assured for the whole of his loss accepted sole liability for settling the claim, that insurer had an undoubted right of contribution in equity against the co-insured. Of course the present appeal is not one involving co-insurers, there being no common assured, but the principles do help to illustrate why the right to indemnity arises at the time the claim is entertained by the workers' compensation insurer. The risk is the same, the risk of injury or death.

Lord Justice Nourse said at p 291:

"Why should that equity be displaced simply because the assured has failed to give the notice which is necessary to make the other insurer liable to him? At the moment of the accident either insurer could have been made liable for the whole of the loss. Why should he who accepts sole liability for settling the claim be deprived of his right to contribution by an omission on the part of the assured over which he has no control? As between the two insurers the basis of the equity is unimpaired. He who has received a benefit ought to bear his due proportion of the burden.

While accepting that a line must be drawn somewhere, I am of the opinion that a denial of the right to contribution in circumstances such as these would be unduly restrictive and indeed inequitable. An attempt to state in general terms where the line ought to be drawn is neither necessary nor desirable. For present purposes it is enough to say that it ought not to be drawn so as to exclude the right to contribution in a case where, at the moment of the accident, each insurer is potentially liable for the whole of the loss."

Those principles were similarly expressed by Lloyd LJ.

The fact is that the Trust, while not a co-insured, has accepted a premium for the risk of injury or death through use of a motor vehicle. It would be inequitable to deny the employer the right to indemnity because of some omission on the part of the deceased workers dependants who owe the employer no obligation to do anything in so far as notice to the Trust is concerned. The employer may take steps envisaged in s 23(2)(b) of the old Workers' Compensation Act and sue in the name of those dependants, but that is a cause of action entirely separate to its right to indemnity. Although the burden between co-insurers should be shared, because the statutory indemnity imposes the obligation primarily on the Trust, the principle expressed clearly sheets home liability to contribute as at the time of the incident giving rise to the damage. With that principle I agree and apply it to the facts here so that the right to indemnity, an inchoate right, arises at the time of the motor vehicle accident.

The Trust is, accordingly, liable to pay, but is it liable to pay the K16,444.50? Ms Thompson says in the absence of a judicial determination, whether by judgment entered by consent or otherwise, in the absence of agreement between the insurers, an assessment should be ordered as to the amount. Since it is the Trust's money which the employer's insurance company is expending, it would be inequitable if some review of the extent of the indemnity could not be had, when considering the cases. They all recognise the right in the injured worker to compromise, for instance, his claim for damages, so that the compensation paid may exceed the compromise, but the compensation insurer is precluded from recovering the difference paid in compensation from the worker. Conversely, is the Trust precluded from querying the amount that the workers' compensation insurer pays for "dependency"? Subsections (2)(e) and (3) of s 23 of the old act deal with the question:

2(e)    "...[W]here the worker has received compensation under this Act, but no damages or less than the full amount of damages to which he is entitled, the person liable to pay the damages shall indemnify the employer against so much of the compensation paid to the worker as does not exceed the damages for which that person is liable.

3.       All questions as to the right to and amount of any indemnity for which a person other than the employer is liable under this section shall, in default of agreement, be settled by action or, by consent of the parties, by arbitration under this Act."

The Trust, then, is not precluded from seeking an arbitration under the Act restricted to the question of dependency and the extent of such dependency.

The Court orders that the appeal against the finding of liability in the Trust to indemnify the respondent is dismissed. The appeal against the finding that the appellant pay interest on the sum of K16,444.50 from 20 November 1985 is dismissed.

The appeal against the finding of the trial judge refusing to allow assessment of damages is allowed. The appellant shall have leave to seek arbitration under the provisions of s 23 of the Workers' Compensation Act 1985. The balance of the appeal is dismissed. The respondent shall have 2/3 costs of the appeal.

Lawyers for the appellants: Young & Williams.

Lawyers for the respondents: Blake Dawson Waldron.