England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CIVIL DIISION
(LORD JUSTICE WARD)

		Royal Courts of Justice Strand London, WC2 Wednesday, 30th October 2002

1. LORD JUSTICE WALLER: On 18th April 1996 the claimant, Mr Kanu, was injured in a motor accident. It was agreed between him and the other driver that the other driver was 75 per cent to blame and that Mr Kanu would be liable for 25 per cent. Thus it was that the trial before HHJ Hordern QC on 24th and 25th June 1999 related to quantum only. The judge awarded £3,250 general damages and certain special damages relating to travel and the loss of a Ntron machine, but he dismissed any claim for loss of earnings. That claim he dismissed on the ground that Mr Kanu's claim related to earnings which he was receiving, but not declaring to the Benefit Agency. Mr Kanu, it seems, was in receipt of Income Support, which he must have obtained by making a false declaration as to the earnings he was receiving.
2. Mr Kanu applied for permission to appeal from the London County Court, but that was refused, and he thus applied to this court for permission to appeal. He needed an extension of time for making that application, and he ultimately received permission limited to one point: the judge's refusal to award loss of earnings.
3. There was then considerable delay in setting the appeal down. The respondents do not consent to an extension of time for setting the appeal down, they pointing out that Mr Kanu had already received considerable indulgence from the court when extending time for permission to appeal. Directions have, however, been given that the question whether there should be an extension of time granted should be listed with the appeal to follow, and thus it is that we are here today.
4. As indicated to counsel at the commencement of this hearing, obviously the merits of an appeal will always play a part in the court's considerations as to whether an extension of time should be granted. We thus thought it right to hear Mr Livesay, representing Mr Kanu, on the merits first. Having heard him, we have concluded that the appeal should be dismissed, and it thus did not seem a productive use of time to consider the facts relating to whether an extension of time should be granted.
5. So far as the merits of the appeal are concerned, Mr Kanu's case was that but for the car accident, he would have continued to earn from the National League for Human Rights and Democracy £600 a month, but that as a result of his accident he had been dismissed by them by letter dated 30 April 1996. He further suggested that he might have continued to be able to earn money from driving a lorry but for his accident. However, both his earnings from the National League and his earnings as a lorry driver were earnings he had received prior to the accident, and they were earnings which he had kept secret from the Benefit Agency so that he could draw Income Support.
6. Some attempt has been made by Mr Livesay on Mr Kanu's behalf to suggest that that was not a state of affairs that was going to continue post the accident. He suggests, by reference to a note in the file at page 172, that there appears to have been some break between the receipt of Income Support and the claiming of Unemployment Benefit. But that note certainly does not record, as it were, repentance on Mr Kanu's behalf, or an apology to the Benefit Agency, or an offer to repay any sum, and it is a slender basis on which to ask this court to reverse the finding of the judge, that the same state of affairs would have continued after the accident. It seems plain to me that if this accident had not occurred, Mr Kanu would have continued to receive the earnings from the National League, but would equally have continued not to tell the Benefit Agency about those earnings, and indeed would have been representing to the Benefit Agency that he did not have any earnings.
7. The judge held in reliance on Hunter v Butler [1996] RTR 396 that undisclosed earnings such as these could not form the basis for a claim. That case, it is right to say, was concerned with a claim by a wife for dependency. That was a case in which the deceased had operated in the black market and had drawn benefits on a dishonest basis, and the wife was claiming a dependency based on the black market earnings and those benefits. What Waite LJ said was this:

"It offends public policy in two respects. First it assumes that someone who had committed fraud in the past would continue to do so in the future; ignoring the possibilities of repentance or detection. Secondly it treats the proceeds of illegally concealed earnings as providing a valid head of recovery by way of damages for loss of injury. When due account is taken of the need for judges to avoid subjective moral judgments and to accept the realities of life in the modern welfare state, there remain certain fundamental principles essential to any just and civilised society which provide the rails within which in unruliest horse may safely run. When Lord Wright in Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601, 617 spoke of 'damages proportioned to the injury' for which provision is made by what is now Section 3(1) of the Act of 1976 as being

'a hard matter of pounds, shillings and pence, subject to the element of reasonable future probabilities'.

The pounds of which he spoke were those derived from wages honestly earned or income honestly received."

Hobhouse LJ agreed with Waite LJ, and the passage in the judgment which supports Waite LJ is at page 405.

8. Mr Livesay has suggested that Hunter v Butler is not the last word, and that to suggest simply that undisclosed incomes cannot form the basis of a claim is to put the matter too broadly. He has referred us to a decision of Garland J in Newman v Folkes, of which we have a transcript. It was decided on 25th May 2001. That was a case in which the plaintiff had not declared his earnings to the Inland Revenue, and the fact that he had not declared them to the Inland Revenue was held not to be an embargo against recovery of loss by reference to those earnings, and Hunter v Butler was distinguished. When that case came to the Court of Appeal, the finding of the judge in that regard was not challenged. The appeal transcript is 3rd May 2002, and that appears from a passage in the judgment of Ward LJ at paragraph 14. I for my part would accept that it is putting the matter too broadly just to say that undisclosed earnings such as these could not form the basis of a claim, but in my view the judge was clearly right in the decision that he reached.
9. Mr Kanu was committing a fraud on the Benefit Agency. He was choosing to conduct his affairs pretending that he was not earning money. As it seems to me, he should not be entitled, when it comes to seeking damages in a court of law, to suggest that he has lied over the years and can now establish that he was in fact an earner, and he should not be entitled to recover damages in relation to earnings which he would have continued to say to the Benefit Agency he was not earning. The public policy considerations recognised in Hunter v Butler are relevant, but it seems to me that this is a rather different case from that which Garland J and the Court of Appeal in Newman v Folkes had to consider.
10. In my view, thus, there is no merit in Mr Kanu's appeal, and I would dismiss that appeal.
11. LORD JUSTICE LAWS: I entirely agree. I think that ordinary, honest people would be dismayed if this appeal were to prosper.
ORDER: Appeal dismissed.