A man who suffered post-traumatic stress disorder (PTSD) as a result of witnessing a fatal shooting in the West Australian Wheatbelt town of Koorda has been awarded more than $33,000 in compensation.

In February 2013, Harry Farmer was a boarder at the home of former Rebels bikie member Gavin McMaster.

Mr Farmer was present when McMaster was shot three times by his former friend James Callaghan.

The shooting happened after McMaster set fire to Callaghan's ute and attacked him with a tomahawk.

Last year Callaghan, a Vietnam veteran, was found guilty of manslaughter and sentenced to eight years' jail.

Mr Farmer was initially awarded more than $22,700 compensation after he was found to be suffering PTSD.

That included him having "horrific" nightmares and flashbacks, as well as feelings of guilt for not intervening earlier in the confrontation between the two men.

A psychologist said Mr Farmer suffered physical symptoms when recounting events such as grinding his teeth, wringing his hands and hyperventilating.

She also found that since the shooting, Mr Farmer had become reclusive, withdrawn and lacked the capacity for joy or happiness in his daily life.

The psychologist recommended he undergo counselling and therapy.

Mr Farmer appealed against the initial payout arguing it was inadequate "considering the severity and permanency of his psychological injury".

In his decision, District Court Judge Michael Bowden allowed the appeal saying he was satisfied Mr Farmer did suffer PTSD as a result of witnessing the shooting and that it had affected his working capacity.

Judge Bowden increased Mr Farmer's payout to $33,685 which included allowances for Mr Farmer's economic loss and his further psychological treatment.