THE SUPREME COURT

Denham, J.                                                                                               No. 196/99	
Murray, J.
Geoghegan,J.

BETWEEN
JOHN DOWNING
	                        Plaintiff/Respondent
        AND

SEAMUS O'FLYNN
                                     Defendant/Appellant

Judgment of the Hon. Mrs. Justice Denham delivered the 14th day of April, 2000 

                [*2] This appeal raises an issue of law. The question for the court is whether a claim for loss of dependency may be successful on undeclared income, whether such a claim is contrary to public policy. This is an appeal by Seamus O'Flynn, the defendant/appellant (hereinafter referred to as the defendant) against the order and judgment of the High Court (McGuinness J.) delivered on the 5th May, 1999. The plaintiff is the administrator of the estate of Patrick Paul Downing (known as Paul Downing) who died intestate on the 28th May, 1995. The plaintiff brought this action on his own behalf and on behalf of all the dependants of the deceased.
On the 28th May, 1995 Paul Downing was a passenger in a car driven by the defendant which  collided with a tree on the boundary of a road as a consequence of which he was injured and as a result of which he died. The dependants of the deceased are Maureen Downing, mother; John Downing, brother; Joseph Downing, brother; Caroline Downing, sister; Clodagh Downing, sister and Katie Halpin to whom the deceased was in loco parentis.
          Liability was not in issue. It was accepted that the accident and the death of Paul Downing were caused by the negligence of the defendant in the driving of his motor vehicle. The case proceeded as an assessment of damages only. The High Court ordered that the plaintiff recover against the defendant the sum of £56,862.50p and the costs of the action when taxed and ascertained. The sum of £56.862.50p was ordered to be apportioned among the dependants of the deceased as follows:
To Maureen Downing (mother of the deceased)

In lieu of support	£10,000
Special Damages	£10,000
Distress and suffering	£7,500
	Total	£27,500

To Katie Halpin (a minor to whom the deceased
acted in loco parentis)	£29,362.50

[*3] As to the sums to be paid to the mother McGuinness J. held:

"As far as the money for distress and suffering is involved the £7,500 which is the maximum allowable it has been agreed and generously agreed by Mr. Downing's siblings that that should go to his mother and I think that is indeed a fair decision. Mr. Downing appears to have also given support both in cash and in kind to his mother. She says in or about £1,000 per year and according to Mr. Tennant, if that continued up to a possible marriage date it would amount to £11,094.

Mrs. Downing senior says that her son said he would never marry and that he would continue to look after her and Katie. On the other hand people often say that kind of thing and you could not [sic]. He was a young man, he might very well have developed another relationship so that I am not really prepared to make an assumption that he would never have married. Also, I have to take into account in that context that it wasn't a sort of regular payment of the type that was made to Ms. Halpin.. I think that if I award a sum of £10,000 to the mother in lieu of support that that is a fair enough amount to deal with what support she was getting from her son."

On the issue of the payment to the child's mother McGuinness J. found:

"Ms. Halpin's evidence is that he regularly gave her a sum of £150. 00 per week towards the family in general.

There is no evidence to contradict what Ms. Halpin says other then the query thrown on it by the defence on account of the income which shows up in the accounts which Mr. O'Donnell gave evidence about. Mr. O'Donnell himself specifically admits that these accounts were not complete and this would be a fairly common experience, I would think, in a small retail business like this, that the accounts are not all that terribly reliable. Indeed, it is not unknown, I am sure to counsel on all sides, for money in this type of small business to be extracted from the till in cash which does not always go accurately through the accounts and this I think is what Mr. Tynan was suggesting.

I feel that on the evidence that must have happened to some extent as Ms. Halpin says that there was never any shortage of money and while, obviously she is not talking in terms of enormous sums of money at all, as she says, a £150 a week seems good money to her but also that Paul Downing gave her extra, bought extra for the family and so on. I think I must accept that there was a contribution of £150 per week for the family. 

At times Ms. Halpin also had lone parents allowance or made some increment from working herself. She says that of that £150, £50 to £100 per week was [*4] spent on Katie and this does seem to me to be somewhat high since there were four people in the household .... I think it would be fair to assume that one quarter should be attributed to Katie rather than more than that.
It seems to me that the fairest thing is to divide the £150 per week by four as there were four people in the household and that leaves a sum of £37.50 a week for Katie. I also feel that on Mr. Tennant's evidence, the actuarial evidence, that it is perhaps going somewhat far as to knowing the uncertainties of life that to attribute maintenance right up to the 22nd birthday and I think an 18 year old, maintenance up to 18 is fair enough. The multiplier in that case would be £783 and the total of that would be £29,362.50."

Against that judgment the defendant appealed. The notice of appeal set out the following grounds:

“1. That the Learned Trial Judge erred in law and in fact in holding that
there was [sic] sufficient funds whereby the deceased (Patrick Paul
Downing) could draw fluids [sic] from his business for the support and
maintenance of Dependants to the level claimed.
2. That the finding by the Learned Trial Judge that the deceased took
monies from the till for the maintenance and support of Dependants
 was against the evidence and that she erred in law in so holding.
3. That the finding by the Learned Trial Judge were [sic]against public
  policy and unsound in law.
4. That the finding by the Learned Trial Judge were [sic] against the
 evidence and the weight of the evidence.
5. That the totality of the award in the sum of £56,862.50 was excessive
 and exorbitant and against the evidence and the weight of the evidence
 in all the circumstances."

Submission

            The appeal proceeded on a single issue. On this matter being opened in the Supreme Court Mr. Fleck, S.C., counsel for the defendant, said that there was one issue for the Court and that was whether a claim for loss of dependency can be successful when based on [*5] undeclared income. He referred to Fitzpatrick v. Furey and Motor Insurers Bureau of Ireland (Unreported, High Court, Laffoy J., 12th June, 1998). In the instant case, referring to the evidence of the accountant, it was submitted that on that evidence the gross profit was 
£12,000, on which income tax would be £3,000 and a possible PRSI liability of £1,000. Thus, the disposable net income was either £9,000 or £8,000 per year depending on whether or not the PRSI was deducted. This was a sum of either £173 or £153 per week. The claim on behalf of the dependants was that the deceased gave Ms. Halpin £150 per week. It was submitted that that would leave the deceased with either £23 or £3 per week to support himself.
          Counsel submitted that Ms. Halpin received £150 per week from money on which tax was not paid. Thus, a public policy issue arose. The £150 per week was paid out of untaxed income and thus the claim for loss was tainted and the court should not support it. Counsel argued, on behalf of the defendant, that in considering a claim for loss of dependency it is contrary to public policy to take into consideration income that has not been taxed. 
In the alternative it was submitted that compensation should be based on the net income the deceased would have received if he had paid tax. Counsel conceded that £150 had been paid per week to Ms. Halpin but argued that it had not been £150 net of tax, that in considering a payment on a loss of dependency it must be from a net income. In this case there was no evidence of net disposable income. If the starting block of funds for calculating the sum is not net of tax it is an inappropriate basis for calculating a dependency figure. The figure of £150 in this case is not net disposable income and so it is an inappropriate figure on which to base dependency figures.
Counsel asked the court to adjudicate a method for assessing loss of dependency when there had been a failure to pay tax or where a sum was not net of tax. [*6]
Counsel for the plaintiff, Mr. Kevin Cross, S.C., submitted that Fitzpatrick v. Furey and Motor Insurers Bureau of Ireland (Unreported, High Court, Laffoy J., 12th  June 1998) does not govern this case. He argued that there had been an incorrect assumption on behalf of the defendant that the accounts as given to the court: (i) were the complete picture, and (ii) would have been the basis for a fraudulent taxation declaration. The Revenue Commissions had agreed a nil liability in this case. It was submitted that the accounts  which show a net profit of £12,000 were not the full picture. It was submitted that the court must assume that if he had survived Paul Downing would have made full accounts and declarations. The fact that he may have taken cash from the till is not unlawful in itself, his obligation was to account to the Revenue. It was a thriving business. It was submitted that even if the £150 per week paid to Ms. Halpin was not recorded that is not important; the accounts were not accounts prepared for the Revenue with the purpose of defrauding the Revenue. It was submitted that to base the appeal on the book of accounts is not valid. There is no suggestion that had the deceased made a settlement with the revenue that he would not still have paid Ms. Halpin £150 per week. He agreed that it might be implied in the High Court judgment that the learned trial judge assumed it was untaxed income. That is a possible inference. Counsel submitted that even if it is accepted that it is a small business which would only give £8,000 off the top the future must be considered. It was open to the learned trial judge to accept future improvement would continue and that £150 would continue to be paid even if the deceased paid tax. He submitted that the judgment of the learned trial judge should stand.

The Accounts

The accounts in this case were not accounts which had been prepared by the deceased. [*7] The situation is described in the evidence given on 5th May, 1999 in the High Court by Mr. Gerard O'Donnell as follows:

“215     Q.	I think you were not Mr. Downing's accountant prior to his death, is that correct?
                                     A.	That's correct.
 216     Q.       You were engaged by his solicitor, Mr. Foley to do the
                        best  you can in relation to what records were available to 
                        you in relation to his accounts in the three years prior to 
                       his death  is that correct?
                                    A.	That would be correct, yes.
217      Q.	I think are you aware that, if I may lead you on this, that
                        his solicitor Mr. Foley had agreed previous to your 
                        engagement with the Revenue, a nil liability for Paul's ... 
                        (interjection).
A.	Yes, Mr. Foley informed me of that, yes.
218	Q.       Revenue position. Had he got full books and accounts?
	A.       He did have books but they were not complete.
219	Q.	You obviously were not able to discuss with him, what 
                       did you base your accounts on?
	A.	I based the accounts on the records which I had.
220	Q.	Which you had, yes?
	A.	I also had to make some estimates in order to produce the
		accounts.
221	Q.	In now doing that you prepared and I will hand that in to
                         your Lordship, books of accounts for the years ending
                         December  1992, 1993 and 1994, is that correct?
	A.	That's correct, yes.
222	Q.	Taking one year with another. first of all, how was the
                        business according to the books that you had in that
                        period?
	A.	According to the books which I had taking 1993 with 1994
                        the turnover, what he actually took in sales increased. [*8]
                       223	        Q.        What sales have you got for 1993?
	             A.        £186,296
           224	        Q.        Yes and 1994?
	             A.         £208,328
           225	        Q.         Of sales, yes?
	             A.         Yes
           226	Q.          What drawings could you find from the books?
A.	Drawings, the figure for 1993 amounted to £13,422 and for  1994 amounted to £17,790.
           227	Q.          If Ms. Halpin is correct that she was getting £150 per 
                                      week  from Paul, is that reflected in the books that you  
                                      were able to find?
	            A. 	         I wasn't aware of any such figure, the drawings could have
		              been used for any of his personal living expenses."
On cross examination it was stated:

                                 "A.          	The profit figure, for the last 2 years approximately 
                                                      £12,000
         234       Q.           What does that come out on a weekly basis?
          A.	           £230.70
                     235       Q.           Does that figure take into account the tax liability?
A.	No, it does not.
       236         Q.          What would the tax liability be on £12,000.
 A.         Tax and PRSI would be approximately £3,000 for 
               1993/1994  tax year."[*9]
         
There was evidence regarding a further liability to tax of £1,000 for that year. In
discussing the net profit it was queried whether that would bring the net profit down to
£8,000 a year. The evidence followed that:

"252	Q.	That would bring it down to £8,000, would it not?
A.	If you deducted his own personal liability of 3 [sic] and if 
you assumed that there was a liability of £1,000 then would bring it down to approximately £8,000, yes.
253	Q.	In those circumstances where he was living in 
                        circumstances where he was maintaining two residences
                        and living apart, if he  was paying £150 a week to Ms.
                        Halpin there would be little or nothing left for him would 
                        there?
	A.	Based on those accounts that is correct, yes.
254	Q.       Would there be anything left for him?
	A.       There would be very little.
255	Q.	How much?
A.	If we divide the £8,000 by 52, that is £153 per week.
256	Q.	That would be £3 a week left for him?
	A.	Based on those accounts, yes.
257	Q.	Because as night follows day if this tragic accident hadn't
		happened, the tax liability would have caught up on him, 
                       would it not?
A.	It is likely that it would have, yes.
258	Q.       More likely than not I suggest?
	A.       Yes [*10]
Decision

The circumstances of this case are tragic. Paul Downing was born in 1965 and was killed in a road traffic accident in 1995. He was a young entrepreneur who had worked as an assistant manager in a supermarket and then decided to set up a fruit and vegetable door to door round. This was successful and he moved on to taking a shop in a shopping centre in Limerick City and commencing business there. The business progressed successfully. 
However, he had not prepared formal accounts or made a declaration for tax from this
business at the time of his death.
Arising out of his death this dependency action was taken. Paul Downing had been helping his mother by giving her support valued at approximately £1,000 per annum. He had also been giving £150 each week to Ms. Halpin. Ms. Halpin's household consisted of herself, her two children, and Katie to whom Paul Downing acted in loco parentis. It is these sums which, with other matters, were the basis for the High Court ruling of £56,862.50.
A legal matter arises for determination because of the fact that the deceased had no formal accounts, nor had he made returns to the tax authorities nor had he paid tax. The issue for determination is whether a claim for dependency may be successful on undeclared income. Further, if it may be successful what method of adjudication should there be for assessing loss of dependency when there has been a failure to pay tax? On what should the compensation be based?

Income not illegally obtained

            The income of the deceased was not obtained illegally. Thus, the circumstances of [*11] this case are not similar to Burns v. Edman [1970] 2 Q.B. 541. In that case the 
plaintiff s husband had been killed in a motor accident. Home Office records disclosed that he had received two prison sentences, one for robbery and another for being an accessory to a felony, and there was nothing to show that during his lifetime he had had any honest employment and he possessed no capital assets. The plaintiff was aware that such money as
her husband had given her came from proceeds of crime. The plaintiff sued, inter alia, on
behalf of herself and the other dependants of the deceased. Crichton J. held at page 546:

 "Now one has to examine in this case what the injury is ‑ first of all to the plaintiff and secondly to the children. Counsel for the defendant argued that the injury in the case of each of the dependants really amounts to this on examination: that he or she is saying that 'I have been deprived of my, share of other people's goods, brought to me by the deceased', and brought from the proceeds of dishonesty ‑ dishonestly obtained, and in so far as that is the inquiry, it is a mala causa or turpis causa and is not maintainable under Lord Campbell's Act. I agree with counsel for the defendant in this argument, and in my judgment neither the widow nor any other dependant is entitled to damages under the Fatal Accidents Act for that reason."

Payment to dependents not contested

         The payment of £150 per week made to Ms. Halpin is not contested on this appeal. There is no contest on this fact. There is no issue of credibility. Thus, no question arises as to the truth of the evidence of Ms. Halpin. McKenna v. McElvaney, McElvaney and MIBI (Unreported, High Court, Johnson J., 24th July, 1998) is distinguishable.

Accounts

       Counsel for the defendant referred the court to Fitzpatrick v Furey and the Motor [*12] Insurance Bureau of Ireland (Unreported, High Court, Laffoy J., 12th June, 1998). There the case was advanced on the basis that for the year ended 31st July, 1994 Mr. Fitzpatrick earned £6,000 more than was declared to the Revenue Commissioners.

"Mr. Daly, on behalf of the first Defendant, submitted that as a matter of public policy the Court should have regard only to the income level reflected in the income tax returns made by or in respect of Mr. Fitzpatrick. Mr. Whelehan, on behalf of the Plaintiff, while conceding that, if Mr. Fitzpatrick had survived, he would have had considerable difficulty in advancing a claim in which the future loss of earnings element was predicated on an income level different from that which had been returned to the Revenue Commissioners historically, submitted that in this claim, which is a representative action on behalf of the dependants of Mr. Fitzpatrick different considerations apply. During Mr. Fitzpatrick's lifetime his dependants had a lifestyle supported by his actual income. The Court, it was submitted, should find a balance between what was the reality of a situation and the income as declared to the Revenue Commissioners. The plaintiff and her children would be prejudiced if any other approach was adopted because the loss of support and the lifestyle they enjoyed would not have happened but for the wrongdoing of the first Defendant. The quantification of the dependants' loss should ensure the replacement of the level of support and the lifestyle they were deprived of by Mr. Fitzpatrick's death."

On this Laffoy J. held:

“I have found it very difficult to resolve this issue. I can see the merit of the approach advocated by Mr. Whelehan. On the other hand, I am faced with the fact that the Plaintiff, who herself is entitled to the 'lion's share' of the dependency claim, has made a declaration to the Revenue Commissioners which she now says is false. I accept that the Plaintiff, when making the declaration, did the best she could in the circumstances then prevailing. I also understand why she has not been able to address outstanding taxation issues while these proceedings are pending. Nonetheless, I have come to the conclusion that public policy considerations preclude me from quantifying the dependency claim on the basis of Mr. Fitzpatrick's declared and undeclared income for the accounting year prior to his untimely death." [*13]

I am satisfied that this may not be the correct approach in assessing loss for dependants on declared and undeclared income. Of course the circumstances of each case should be considered. However, in general it would appear appropriate to calculate the loss to the dependants (which has been sustained because of the action of the defendant) on the actual income. If the income, or part of it, has not been declared or taxed then the sum should be analysed to achieve a net figure, net of tax. This net figure would then be the basis on which the loss to the dependants may be calculated.

Determination

      The learned trial judge calculated damages having regard to the overall income of the deceased. The accounts in this case were not full, they were drawn up for the Court by an accountant "doing the best" he could. They were not drawn up by the deceased. The accountant had difficulty making up the accounts because of the absence of records. Even though the accounts were not full it is quite clear that the deceased's new business was successful and was growing. There is no reason why this business would not have continued to develop and grow were it not for the untimely death of the deceased. It is appropriate to take into account such future considerations. It is probable that in due course the deceased would have made formal accounts and paid taxes. No matter what might be said of the figure of £150 it is difficult to imagine a sum for the child being less than £37.50. On any view the £37.50 would have been available to the child and I would not interfere with that award. It is reasonable to assume, in view of the fact that the business was developing, that even on tax being paid the deceased would have been in a position to continue to pay £37.50 per week to Ms. Halpin for the child. Also, that the deceased would have continued to benefit his mother [*14] to the value of £1,000 per annum. Consequently, I am satisfied that on the probable net profits the sums of £37.50 per week for the child and £1,000 per annum for the mother are reasonable sums. I would not disturb the award made by the High Court It would be preferable to have exact figures for gross income, tax liabilities and projections for the future. However, in the circumstances of this case I would not remit the matter to the High Court to obtain precise figures.

For these reasons I would dismiss the appeal.

Judgment delivered the 14th day of April, 2000 by Murray, J.

This is an appeal against the damages as assessed by the High Court in proceedings where the Plaintiff/Respondent, as the administrator of the estate of Patrick Paul Downing, deceased, claims damages on his own behalf and on behalf of all other dependants of the deceased against the Defendant/Appellant. The claim arises out of death of the deceased which occurred on the 28th May, 1995 when he was a passenger in a car driven by the Defendant which collided with a tree. The essential facts of the case and the nature of the award made in the High Court are detailed in the judgment of Mrs Justice Denham and it is not necessary for me, except in a limited way, to refer to them. I propose to focus on the central point of law raised by the Appellant in the appeal.
The submissions of Counsel for the Appellant centred on the basis on which the learned trial judge assessed damages for future loss which she awarded to a child in [*2] respect of whom the deceased stood in loco parentis. The award was based on regular payments which had been made by the deceased to the child's mother out of gross income on which tax had not been paid. Counsel contended that the learned trial judge was incorrect in only having regard to the deceased's gross income when calculating the child's future loss. It was common case that the deceased had not made tax returns nor paid income tax on his income. He submitted that in determining the amount of continuing future contributions which the deceased would have made to the upkeep of the child the learned trial judge was not entitled to ignore the fact that the due and proper payment of income tax on his gross earnings would have reduced his disposable income from the gross figure to a net after tax figure and thereby affect the amount of such financial contribution.
He contended that it would be contrary to public policy if damages for future loss of income or, as in the case, a dependant's loss, were determined without taking into account income tax payable on that income or on the source of that income.
In support of his submission Counsel cited the judgment of Laffoy J. in Fitzpatrick v. Furey and the Motor Insurers Bureau of Ireland (12th June , 1998, unreported). In that case Laffoy J. appears to have determined that in assessing damages for future financial loss to be awarded to the dependant's of a deceased, income undeclared for income tax purposes should, as a matter of public policy, be entirely excluded from such an assessment, and should be based solely on the income which had been declared for tax purposes [*3]
In this case the deceased had not declared any part of his income although his estate subsequently reached a nil settlement with the Revenue Commissioners. Counsel for the Appellant did not go so far as to adopt completely the approach of Laffoy J. He did not argue that the entire amount of an undeclared income should be excluded when damages for loss of income or a dependant's loss are being assessed. Counsel submitted that such losses must be determined on the basis of the net income after tax which the deceased would have received. In this I think he is quite correct and it is an approach which is consistent with the approach which is, as I understand it, generally followed by the courts in cases of this nature.
If the full import of Laffoy J,'s judgement is as stated above I am of the view that it is not the appropriate basis for assessment of such damages. Nor do I consider gross income a correct basis for such assessment.
The 'dominant' principle, as it has often been described, in the award of damages is restitutio in integrum. In other words, the court should award the injured party such damages as will put him or her in the same position as he or she would have been if he or she had not suffered the wrong complained of. The corollary to this is that in a claim for financial loss the injured party is, in principle, not awarded damages which exceed his or her actual loss. (I leave out of consideration such heads of damage as exemplary damages which are irrelevant here and not generally relevant in cases of this nature).
[*4] In cases where damages for future loss of earnings is a component of the claim, this Court has held that it is the 'take home pay', after lawful deductions such as income tax and PRSI, and not the gross pay which should be the basis of the calculation of such damages (see Cooke v. Walsh [1984] I.L.R.M. 208).
            It seems to me that public policy intends that persons who have suffered financial loss as a result of the wrongful act of another be compensated for their actual loss and no more. In my view, therefore the application of the fundamental principle of restitutio in integrum is a sufficient basis to exclude in assessing claims for loss of future income, including those which incorporate an element of undeclared earnings, any element based on gross rather than net income after all lawful deductions.
         In short damages in personal injury or fatal accident cases are, in principle, simply compensation for actual loss and this is particularly evident in the case of special damage. In this context, once liability and actual financial loss have been established the duty in law of the wrongdoer to compensate the injured party by way of damages cannot be abated by the fact that the claim is based, in whole or in part, on undeclared income, once the actual future loss is calculated by reference to the net income after tax. Moreover, it could be said that answerability of the taxpayer to the Revenue authorities for the sole fact of a failure to make a return of income (as opposed to taking account of the tax liability) is truly res inter alios acta. [*5] Public policy considerations may arise in a different way should the trial judge, in the exercise of his or her discretion having regard to all the circumstances of a case involving undeclared income, consider a matter sufficiently grave as to warrant papers being referred to the appropriate Revenue authorities.
In the course of his submissions, Counsel for the Appellant drew the courts attention to a number of authorities concerning the assessment of damages for loss of income where the source of that income has been some form of illegal or criminal activity. In this case the deceased had a perfectly legitimate business as the owner of a fruit and vegetable shop. It is not necessary, therefore, to review those authorities.
            For the foregoing reasons, I conclude that the appropriate approach to the assessment damages for loss of earnings or financial loss suffered by a deceased's dependant, whether the claim is based in whole, or in part, on undeclared income, is on the basis of net income after the tax and other lawful deductions which have or should be made in respect of such income.
It follows that in this particular case the learned trial judge should have approached the assessment of damages of future loss of financial contribution to the child in question on the basis of the deceased's net income after deduction of the amount of income tax which, having regard to the evidence before her, he would have been liable to pay.
[*6] The remaining question is what implication that has for the award made. The High Court award was made on the basis that out of total weekly sum of £150.00 contributed by the deceased to the mother of the child, the child would have continued to receive a benefit to the value of £37.50. I agree with the conclusions of Mrs Justice Denham, for the reasons set out in her judgment , that the deceased's contribution towards the upkeep of the child in respect of whom he stood in loco parentis would, on any view of the facts of this particular case, probably have remained in or about the sum of £37.50. For similar reasons I would also agree with her conclusions regarding the award to the deceased's mother. Therefore, I see no reason to interfere with the actual amount of the award made by the learned High Court judge.
Accordingly I would dismiss the appeal.

JUDGMENT OF MR JUSTICE GEOGHEGAN DELIVERED THE 14TH DAY OF APRIL, 2000

This is an appeal from a judgment of the High Court (McGuinness J) in a fatal injury action. There are good and sensitive reasons for not going into the facts in too much detail. It is sufficient to state that the deceased contributed £150 per week to the household of a girlfriend with whom he had previously been living and with whom he was still in constant contact at the time of his death. That household consisted of the girlfriend, two children of hers by a previous broken marriage and a third child, Katie Halpin, who it is agreed was a "dependant" of the deceased within the meaning of Part IV of the Civil Liability Act, 1961. It is also not seriously in dispute that the deceased was particularly devoted to that child.

The deceased, Paul Downing, was also helping his mother by giving her approximately £1,000 per annum. [*2]

As far as loss of dependency is concerned the claim was confined to the losses of the child Katie Halpin and the mother Maureen Downing.

McGuinness J awarded £29,362.50 for the loss of dependency of Katie Halpin and £10,000 for the loss of support to Maureen Downing. These figures were calculated on the assumption that the respective payments of £150 per week in the case of the Halpin household and the £1,000 per annurn to the mother would have continued. The learned trial Judge took the view that £37.50 being one quarter of the £150 was an appropriate assessment of Katie's weekly loss and she also held that as a matter of probability that would have remained a loss until Katie attained the age of 18 years.

          There was no precise mathematical calculation done in the case of Mrs Downing's loss because the Judge considered that she had to take into account the possibility of the deceased marrying even though the mother had given evidence that she did not think that the son would have ever married. In all the circumstances the trial Judge considered that a sum of £10,000 to the mother would be reasonable. At the time of his death the deceased had been running a small retail business. Accounts were prepared since his death for the respective years ending 31st December 1992, 31st December 1993 and 31st December, 1994. It would appear there had never been returns made to the Revenue Commissioners but on foot of the accounts prepared after the death the Revenue Commissioners agreed a nil liability. If the accounts accurately reflected the income of the deceased he could not have afforded to have made the payments to the Halpin household or indeed to his mother. The finding of fact that those payments were made is [*3] accepted by the Appellant but what is suggested is that they must necessarily have been paid out of undeclared income. The issue on the appeal and it is the only issue is whether the learned High Court Judge was entitled to take the view that those payments in those amounts would have continued or whether she should only have awarded sums net of tax with the necessary corollary that the amount of tax would have been properly proved before her. Counsel for the Defendant Mr Fleck, SC, makes the latter argument on two alternative fronts. On the one hand he says that the Court as a matter of public policy cannot take income which ought to have gone to the Revenue Commissioner into account and alternatively, he says that even if a public policy point does not arise the Court is still obliged to assume that tax would have been paid had the deceased survived. As I understand his argument, he did not go so far as to adopt the view taken by Laffoy J in Fitzpatrick .v. Furey (unreported judgment delivered 12th June, 1998) that as a matter of public policy no account at all can be taken of untaxed income even including the net income which would have been available if tax had been paid. That may be an overstatement of the view taken by Laffoy J as the facts in the Fitzpatrick Case are quite different from the facts in this case. I will return to it later on in the judgment.

         It is quite clear to me that Mr Fleck's argument in the abstract is absolutely correct though I would prefer to put it on the second alternative basis. It would seem to me that the true principle is that in assessing loss of contribution for the future in a fatal injury action the Court must assume that had the deceased lived he would have properly paid his taxes as and from his death whatever might have been his conduct before his death. If, therefore, a judge, as in this case, believed that a payment of £150 per week was made to the Halpin household and also believed that payments amounting to approximately £1,000 per annum were made to [*4] the deceased's mother then prima facie the judge was entitled to take the view that such payments would have continued. However if it was demonstrated as in this case that such payments could only have been made out of untaxed income the Judge must then take that into account and must assume that tax on all income would have been paid from the death. This does not necessarily mean however that the Judge would then arrive at the view that the contributions would have been reduced by reference to the tax paid. It entirely depends on the overall facts which the Judge accepts. In this case it is quite clear that McGuinness J took the view that as a matter of probability income was to use her words "extracted from the till in cash”. She points out in her judgment that the accountant who gave evidence, Mr O'Donnell, admitted that the accounts were not complete and that this would be a fairly common experience in a small retail business such as the type of business being run by the deceased. She accepted the evidence that in the case of such a business "the accounts are not all that terribly reliable”. She goes on to express the view that she was satisfied on the evidence that money was taken out in cash and she backs up this view by pointing to the evidence of Ms Halpin to the effect that "there was never any shortage of money”. It follows therefore that although the argument put forward by Mr Fleck is correct in principle there is no evidence that the trial Judge neglected to apply the correct principles in this case. She merely took the view that there was plenty of surplus money in reality and that contributions of the amount alleged could have been afforded by the deceased and would have been likely to have been paid. The trial Judge was entitled to take that view having regard to the evidence as a whole. I would therefore dismiss the appeal.
             As heavy reliance was placed by the Defendants on the judgment of Laffoy J in Fitzpatrick v. Furey cited above I think that I should make some observations on it. The case was a fatal [*5] injury claim arising out of the death of a dental technician and a specialist in prosthetics. In that case the amounts of the contributions to the members of his family were being calculated by reference to his income. I do not think that there was any evidence in that case of the amounts of actual contributions made in the lifetime except presumably in a very general way. That is the first point of distinction on the facts between that case and this case. 
It emerged in the evidence that the profit earned by the deceased exceeded by £6,000 the sum declared to the Revenue Commissioners. The second distinguishing factor between that case and this case is that in that case a false declaration had been made by the deceased to the Revenue Commissioners and indeed a further false declaration had been made by his widow, the plaintiff, after his death. The fact that false declarations were made by the deceased and the plaintiff would seem to have strongly influenced the decision of Laffoy J. The learned Judge acknowledged that there was some force in an argument apparently put up by Counsel for the Plaintiff that while in the ordinary way there might be considerable difficulty in advancing a claim in which the future loss of earnings element was predicated on an income level different from that which had been returned to the Revenue Commissioners historically the position was different in relation to dependants in a fatal injury claim. Counsel had submitted that the Court should find a balance between what was the reality of the situation and the income as declared to the Revenue Commissioners. Otherwise he pointed out that the Plaintiff and her children would be prejudiced because of the loss of support and the lifestyle they enjoyed would not have happened but for the wrongdoing of the Defendant.
Nevertheless, Laffoy J came down in favour of the Defendant observing as  follows: [*6]

"Nonetheless, I have come to the conclusion that public policy considerations
 preclude me from quantifying the dependency claim on the basis of Mr. Fitzpatrick's 
 declared and undeclared income for the accounting year prior to his untimely death.”

If I understand the judgment of Laffoy J correctly she took the view that the whole of the £6,000 should be disregarded. I would respectfully disagree with this approach. I think that in the Fitzpatrick Case both sides wrongly argued it on foot of "public policy consideration” whereas the true analysis should have been as to whether the trial Judge had before her sufficient evidence in relation to undeclared income that she could quantify what would have been the net amount of that income if tax were paid. I think that the learned trial Judge should have assumed that the deceased would have paid tax had he survived. Public policy considerations did not dictate that the entire of the £6,000 if properly proved should be disregarded. It is not necessary for the Courts to take such a severe view as apart from anything else it could work great hardship and injustice in other hypothetical cases. The true principle is that a defendant should never have to compensate for alleged loss of monies which ought to have gone to the Revenue Commissioners and should not have been retained by the deceased. But the principle does not go beyond that. I have already expressed the view that there is no evidence before this Court which would indicate that McGuinness J applied the wrong principles.