England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHILD SUPPORT COMMISSIONER ANGUS
SITTING AT THE CHESTER CHILD SUPPORT APPEAL TRIBUNAL

		14th December 1999

Lady Justice Hale:

1. Mr Huxley appeals against the decision of Child Support Commissioner Angus dated 31 July 1998, dismissing his appeal from the Chester Child Support Appeal Tribunal on 18 October 1996, which had itself dismissed his appeal from the refusal dated 22 April 1996 of a child support officer (CSO) to review a decision not to cancel an interim maintenance assessment (IMA) under the Child Support Act 1991. The Commissioner himself gave leave to appeal to this court. Technically the question is whether there was unavoidable delay by Mr Huxley in completing and returning a maintenance enquiry form (MEF). In substance, however, the question is whether the child support officer was entitled to ask him for certain information. Mr Huxley objects to divulging the income of his second wife, and also his housing costs, if this information will be disclosed to his first wife.
2. Background
3. The first Mrs Huxley is the parent with care (PWC) of their son Sean, who was born on 10 August 1982. Mr and Mrs Huxley separated in 1989 and were divorced in August 1991. Mr Huxley tells us that there was a 'clean break' order between them in March 1994. He paid her a lump sum. Her claims to periodical payments were dismissed. He agreed to pay £60 per month for Sean. This he had paid from the separation until 1996 when it was increased to £80 per month.
4. Meanwhile, however, on 21 September 1993 Mrs Huxley had applied to the Child Support Agency (CSA) for a maintenance assessment. Technically, as she was claiming income support at the time she will have authorised the CSA to make an assessment under section 6 of the Child Support Act 1991. Her application form reveals the existence of two other children living with her, twins born on 18 November 1990, of whom Mr Huxley is not the father. Mr Huxley tells us that a maintenance enquiry form was first issued to him on 22 April 1994, very shortly after the clean break order had been made. He would not be the first to find that situation upsetting, to say the least.
5. There were then exchanges between him and the CSA in which he sought an assurance that they would not pass on financial details about his income and outgoings and his second wife's income to his first wife. By a letter dated 31 May 1994 they refused to give that assurance. Eventually, on 17 January 1995 he was issued with another form and on 2 February 1995 the CSO notified both parties that he intended to make an interim maintenance assessment if the form was not returned within 14 days. Under section 12 of the 1991 Act a CSO has power to make an IMA if it appears to him that he does not have sufficient information to enable him to make an assessment. Mr Huxley did not return the form. On 24 March 1995, the CSO issued an IMA for £43.92 per week effective from 21 February 1995. This was reviewed on 24 January 1996. The CSO refused to cancel the IMA and the sum was raised to £56.28 per week with the same effective date. Mr Huxley responded on 3 February 1996:
6. 'I would like to appeal your decision refusing to lift this assessment because in the calculation of the amount you have included an amount for the carer of the child, who is my ex-wife, whom I have no liability to maintain.'
7. On 22 April 1996 a different CSO refused to review the earlier decision and on 29 April Mr Huxley appealed. The second CSO found that there were no new facts to consider and thus no grounds for supposing that the decision (a) was made in ignorance of a material fact, (b) was based upon a mistake as to a material fact; or (c) was wrong in law. Under section 18(6) of the 1991 Act, these are the grounds for reviewing an earlier decision. Under regulation 8(6) of the Child Support (Maintenance Assessment Procedures) 1992, as they were in force at the relevant time:
8. 'Where a child support officer is satisfied that there was unavoidable delay by the absent parent in completing and returning a maintenance enquiry form . . . he may cancel an interim maintenance assessment which is in force.'
9. Mr Huxley in his written submissions to the tribunal complained of the discrimination involved in asking him for information about his new family while his ex-wife was not being asked for information about hers. He also complained about the inclusion of an allowance for the parent with care in the maintenance requirement on the ground that he had no liability to maintain his ex wife. He further objected to the inclusion of an element to reflect the lone parent premium as he believed that she was not a lone parent. The tribunal did not refer to the last but found the argument that the first two made Mr Huxley's delay unavoidable 'unsupportable'. The Commissioner agreed that there had been no unavoidable delay.
10. The grounds of appeal
11. Mr Huxley has again provided the court, as he did the tribunal and the Commissioner, with very full, clear and closely reasoned submissions which would do credit to many lawyers. His principal argument is that a CSO is not entitled to ask for information about the absent parent's new family at the outset but only after there has been at least one completed maintenance assessment. The purpose of asking about the new family's income is not to calculate the initial liability. This is calculated according to paragraphs 1 to 5 of Schedule 1 to the 1991 Act and their associated regulations. These require, first, the calculation of the child's maintenance requirement, then the calculation of the assessable income of both parents, and then the application to both those calculations of a general rule which, in most cases, produces an 'amount of maintenance payable by the absent parent for that child' consisting of a basic element and, where appropriate, an additional element. Information about the income of any new family is relevant only because of paragraph 6 of Schedule 1. Its purpose is to check whether or not the sum produced by the initial calculation will reduce the absent parent's disposable income below his protected level and to make an adjustment if it does so.
12. This argument has echoes of what is known to family lawyers as the 'millionaire's defence'. If the respondent to an application for ancillary relief can say that he is able to meet any order that the court might properly make to provide for applicant's reasonable requirements, he may avoid giving full disclosure of his assets and income. Similarly, it might be said, if the assessment is made and it is clear that it will not take the absent parent's disposable income below the protected rate, there is no need to ask about any other income coming into the household. To do so is an unacceptable intrusion into his new wife's privacy.
13. Mr Huxley draws considerable support from the wording of paragraph 6(1) of Schedule 1 to the 1991 Act. The relevant parts of paragraph 6 read as follows (with emphasis supplied):
14. '(1) This paragraph applies where -
15. (a) one or more maintenance assessments have been made with respect to an absent parent; and
16. (b) payment by him of the amount, or the aggregate of the amounts, so assessed would otherwise reduce his disposable income below his protected income level.
17. (2) The amount of the assessment, or (as the case may be) of each assessment, shall be adjusted in accordance with such provisions as may be prescribed with a view to securing so far as is reasonably practicable that payment by the absent parent of the amount, or (as the case may be) aggregate of the amounts, so assessed will not reduce his disposable income below his protected income level.
18. (4) The amount which is to be taken for the purposes of this paragraph as an absent parent's disposable income shall be calculated, or estimated, in accordance with regulations made by the Secretary of State.
19. (5) Regulations made under sub-paragraph (4) may, in particular, provide that, in such circumstances and to such an extent as may be prescribed - . . .
20. (b) where the absent parent is living together in the same household with another adult of the opposite sex (regardless of whether or not they are married) income of that other adult,
21. is to be treated as the absent parent's income for the purposes of calculating his disposable income.'
22. Regulation 12(1) of the Child Support (Maintenance Assessment and Special Cases) Regulations 1992 provides that, for the purpose of paragraph 6(4) above, the disposable income of an absent parent is the aggregate of his income and any income of any member of his family.
23. Under regulation 2 of the Child Support (Information, Evidence and Disclosure) Regulations 1992, an absent parent may be required to provide the Secretary of State or a CSO with information or evidence with respect to the matters listed in regulation 3. Regulation 3(3) provides that the information or evidence to be furnished in accordance with regulation 2 may in particular include information and evidence as to (among many other things) '(l) the persons living in the same household as the absent parent or living in the same household as the parent with care . . . ', '(m) the matters set out in subparagraphs (g) and (h) in relation to the persons specified in paragraph (l) . . . ', '(g) the name and address of any current or recent employer . . . and the gross earnings and deductions from those earnings deriving from each employment,' '(h) the address from which [that person] who is self employed carries on his trade or business, the trading name, and the gross receipts and expenses and other outgoings of the trade or business,' and '(n) income other than earnings of the persons living in the same household as the absent parent or the parent with care' and so on.
24. Regulation 3(2) of those same Regulations provides that a CSO 'may require information or evidence under the provisions of regulation 2 only if that information is needed to enable . . . (f) the amount of child support maintenance payable by an absent parent to be assessed.' (Emphasis supplied.) The Commissioner held, therefore, that the information was required in order to assess the actual 'amount payable' by the absent parent.
25. As I understand his argument, Mr Huxley does not dispute that there may come a time when such information can lawfully be required. But he argues that paragraph 6(1) makes it quite clear that the power to adjust an assessment in paragraph 6(2) only comes into play 'where' there has already been one or more maintenance assessments. He argues that 'applies' is a use of the historic present meaning 'applies or applied at the relevant time', that 'where' often means 'when', and that two conditions set out in paragraph (a) and (b) must be true before the provisions of paragraph 6 come into play.
26. Attractive though it undoubtedly is, this arguments begs the question of what is meant by a 'maintenance assessment' in paragraph 6(1) of the schedule. Does it mean a completed process of assessment, in which a calculation has been made (and perhaps also notified to the parties under regulations 10(1) of the Child Support (Maintenance Assessment Procedure) Regulations 1992)? Or does it mean a preliminary calculation of what would be payable were it not for the provisions of paragraph 6? If it means the former, the CSO would presumably have to go through the whole process of inquiry and calculation without reference to the new partner's income, then ask himself whether it looked as if this would bring the absent parent below the protected income level (for which he only needs to know the numbers, not the income of other family members), and then seek further information to find out whether other family members have income which should be aggregated with his for the purpose of calculating his disposable income.
27. This may be sensible enough when viewed from the perspective of absent parents whose income will always keep them above the protected earnings rate. But it is much less sensible when viewed from the perspective of those absent parents who are likely to be on or below the borderline. It is also much less sensible when viewed from the perspective of a large organisation handling a large number of investigations and assessments which does not want to have to make two inquiries where one would do. For them the latter interpretation would be preferable.
28. The Act itself is not much help. In section 54, it provides that '"maintenance assessment" means an assessment of maintenance made under this Act and, except in prescribed circumstances, includes an interim maintenance assessment'. It may, however, be helpful to turn to the provisions under which such assessments are made.
29. Under section 4(1), either a person with care or an absent parent may apply for a 'maintenance assessment' to be made; and under section 4(2), 'where a maintenance assessment has been made' the Secretary of State may, again on application, arrange for 'the collection of the child support maintenance payable in accordance with the assessment' and 'the enforcement of the obligation to pay child support maintenance in accordance with the assessment'. Under section 6(1) a parent with care of a qualifying child or children who is in receipt of income support and certain other benefits must, if required, 'authorise the Secretary of State to take action under this Act to recover child support maintenance from the absent parent.' Under section 6(5) that authorisation must be given by completing an application '(a) for the making of a maintenance assessment with respect to the qualifying child or qualifying children; and (b) for the Secretary of State to take action under this Act to recover, on her behalf, the amount of child support maintenance so assessed.' Under section 11(2), 'The amount of child support maintenance to be fixed by any maintenance assessment shall be determined in accordance with the provisions of Part I of Schedule 1.'
30. These provisions, like regulation 3(1)(f) of the Child Support (Information, Evidence and Disclosure) Regulations 1992 referred to earlier, draw a clear distinction between, on the one hand, the concept of 'child support maintenance', which is a sum of money which is 'to be fixed' or is 'payable', and on the other hand, the 'maintenance assessment', which is the process of arriving at that sum.
31. However, there are also provisions in the Act which refer to a maintenance assessment being 'in force'. These include section 4(9), which precludes an application under that section if there is already in force an assessment made in response to a section 6 application, and section 6(14), which in contrast does not prevent a new assessment under section 6 where there is another assessment in force. In similar fashion, paragraph 11 of Schedule 1 talks about a maintenance assessment 'taking effect' and paragraph 16 talks about it ceasing 'to have effect'.
32. It is impossible to avoid the conclusion that the term 'maintenance assessment' is capable of referring to a different part or stage of the assessment process depending upon the context in which the words are used. While it may sometimes mean a completed assessment which has been notified to the parties, it may sometimes mean a particular stage in the assessment leading to the eventual determination of the amount due. Each of the two (or more) possible interpretations of paragraph 6(1) of Schedule 1 involves the artificiality that it must refer to a calculation done without reference to the remaining provisions of paragraph 6. But the artificiality is that much greater if it is taken to refer to a completed and notified calculation. I conclude, therefore, that it means the calculation up to the point at which the protected earnings level comes into play. It does not mean a completed calculation leaving that paragraph out of account.
33. Further support for that construction can be drawn from Schedule 1 itself. Having dealt with the 'maintenance requirement' in paragraph 1, the 'general rule' in paragraph 2, the 'basic element' in paragraph 3, the 'additional element' in paragraph 4, 'assessable income' in paragraph 5, it goes on in paragraph 7 to deal with the 'minimum amount of child support maintenance', in paragraph 8 with 'housing costs' (which may be relevant to assessable income or to disposable income) and in paragraph 9 with 'regulations about income and capital' (which may obviously be relevant at any time). Some of these paragraphs may obviously be relevant to the calculations under paragraphs 1 to 5. This does not suggest a two stage process with a cut off point between paragraphs 5 and 6 of the Schedule.
34. It is worth bearing in mind that the person who wishes to invoke this version of the millionaire's defence has two possible courses of action other than that taken by Mr Huxley. Like Mr Huxley, he might refuse to return the form, but unlike Mr Huxley, he might accept that the consequence was that he paid one and a half times the maintenance requirement for the child in question. This is the amount provided by regulation 8(2) of the Child Support (Maintenance Assessment Procedures) Regulations 1992 (as then in force) in respect of a 'category A' IMA. A 'category A' IMA is one where the absent parent has not provided the necessary information about his own income. Alternatively he might return the form but refuse to answer questions about his new partner. The consequence would then be that he paid the amount calculated by reference to Schedule 1 without any adjustment to take account of his protected income. This is the amount provided by regulation 8(2C) in respect of a 'category B' IMA where the required information about the income of the partner has not been provided.
35. This seems quite fair. The protected earnings adjustment is an indulgence open only to those whose household incomes would otherwise fall below an acceptable level. If they do not feel able to provide the information about their household income then they should not be able to claim the indulgence. But neither should they be obliged to pay more than they would otherwise have to pay under the general rule. That is only allowed where the absent parent has failed to provide the information about his own income which is required to operate that general rule.
36. It follows that in my view the CSO was entitled to make an IMA on the basis that he did.
37. Mr Huxley also argues that he was justified in withholding the information because the CSO did not have legal authority to disclose it to his former wife and he had reason to believe that they would do so. He has two concerns special to his particular circumstances.
38. First, the standard form of notification to the PWC gives details of the net income of the absent parent and then calculates his assessable income taking into account housing costs. He objects to his housing costs being disclosed to his ex-wife because he works from home and her new partner is in business in the same street.
39. Secondly, the letter dated 31 May 1994 from the CSA declined to undertake that details of the income of his second wife would not be disclosed to his first.
40. His argument is based upon section 50 of the 1991 Act. Section 50(1) makes it an offence for any CSO, among others (see section 50(5)), without lawful authority to disclose any information relating to a particular person which was acquired by him in the course of his employment as a CSO. Section 50(6) provides that
41. 'For the purposes of this section a disclosure is to be regarded as made with lawful authority if, and only if, it is made -
42. (a) by a civil servant in accordance with his official duty . . . '
43. Mr Huxley argues that the only statutory duty to disclose is in regulation 10(2) of the Child Support (Maintenance Assessment Procedure) Regulations 1992. Regulation 10(1) deals with notification of maintenance assessments to relevant parties and regulation 10(2) states what such notifications must contain. At the relevant time, regulation 10(2)(c) referred only to 'the absent parent's assessable income and, where relevant, his protected income level'. His point is that the parent with care needs only to know the outcome but not the route by which that outcome was reached. Hence she did not need to know what his housing costs were for the purpose of calculating his assessable income, nor did she need to know what his second wife's income was for the purpose of calculating his disposable income. He argues that it is for the CSO to seek the information and pursue any points which concern him.
44. It is important to bear in mind that the child support scheme is not simply a method for the State to recoup part of its benefit expenditure from the absent parent. It is a replacement both for the former method of doing this and for the courts' powers to make orders between individuals for periodical payments for the maintenance of children. The person with care may or may not be on benefit and may move between the two. The calculation may differ in such cases but the formula does not. She therefore has a very direct interest not only in the outcome of the calculation but also in the method by which it is reached. She needs to have confidence in the result. She has the right to ask for a review and to appeal if she is not satisfied. The Child Support Agency, and through them the public in general, also has an interest in the product of its inquiries being subjected to proper scrutiny by someone much closer to the facts of the case than the CSO could ever be.
45. There is nothing to suggest that the information prescribed in regulation 10(2) of the Child Support (Maintenance Assessment Procedure) Regulations 1992 is other than the minimum to be provided on notification of an assessment. The rules of natural justice require that the information needed to explain the end product is communicated to both parties to a maintenance assessment. There is nothing to suggest that this is not part of the CSO's duty for the purpose of section 50(6) of the Act.
46. In any event, this cannot amount to 'unavoidable delay' within the meaning of what was then regulation 8(6) of the Child Support (Maintenance Assessment Procedure Regulations 1992. Mr Huxley could have provided the information. He simply chose not to do so. Even if he could not practicably have provided the information relating to his wife, he could have provided the information about himself. This would have brought a different and probably more favourable IMA. He could also have pursued with the CSO, either then or later, the other factual matters which were troubling him.
47. Mr Huxley has been concerned about what he sees as discrimination between the enquiries made of the absent parent and the enquiries made of the parent with care. He believes that his former wife is not a lone parent and therefore that the maintenance requirement should not include the lone parent premium. He is quite right that income support lone parent premium should only be included in calculating the maintenance requirement in the formula 'where the person with care of the qualifying child or children has no partner': see regulation 3(1)(d), Child Support (Maintenance Assessment and Special Cases) Regulations 1992. He also suggested that his son may have an income from working in his first wife's partner's business. He further argues that he should be given credit for the sums he has been paying under the 1994 court order. Again he is right that such income should be taken into account in the calculation if it exists.
48. Miss Lieven, on behalf of the respondent, argues that the CSO is entitled to take the information provided by the parent with care at face value unless provided with other information which calls it in question. While I accept that as far as it goes, it would obviously be wrong for the absent parent to be faced with any sort of presumption arising from the decisions of the benefit authorities to pay a particular benefit to the PWC. This is not analogous to the case of Secretary of State for Social Services v Harmon [1999] 1 WLR 163, CA, where the CSO was entitled to rely upon the fact that the PWC was in receipt of benefit for the purpose of requiring her co-operation under section 6: there what is relevant is whether or not she is on benefit, not whether or not she is rightly so. Here what is relevant is whether or not the PWC 'has no partner' or has other undeclared income. The absent parent is not party to the decisions of the benefit authorities and has no standing to challenge them save in the capacity of an informer. It must be open to him to challenge, in a way which will affect his own liability, the basis upon which the child support calculations have been made, just as it must be open to the parent with care to do so.
49. If these allegations can be established, they are obviously matters which would in principle justify the CSO in reviewing the assessment under section 18(6). It may that there is a time limit problem which would now make this difficult or impossible but that is the route which should have been taken. They are obviously matters of fact for a fact finding body. This appeal is simply concerned with whether the decision not to cancel the IMA was correct in law. Any complaint that the appellant was not provided with the basis for the calculations until he had appealed to the tribunal cannot alter that. But it is to be hoped that any route available to him to ask for a review of the factual basis of the assessment will be held open. The fact that, as a layman, he was concerned with legal issues which have turned out to be misconceived should not prevent his pursuing factual issues which may (although of course I do not know) have some merit.
50. Finally I should mention Mr Huxley's argument that the maintenance assessment should not include an element for the parent with care because the absent parent has no duty to maintain her. However, as the Commissioner clearly demonstrates, the formula prescribed by section 11(2) and Schedule 1, paragraph 1(3) of the Act does include 'such amount or amounts (if any) with respect to the person with care of the qualifying child or qualifying children as may be prescribed'; and regulation 3(1)(b) of the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 prescribes such an amount by reference to the income support personal allowance for a single claimant aged not less than 25. It cannot sensibly argued for the purpose of these proceedings that the discretion involved in the words 'if any' in paragraph 3(1)(b) means that Secretary of State had no power to make these regulations. He plainly did have that power. Mr Huxley accepts that the court cannot address what he sees as the conflict of principle. He merely asks us to record the position for possible future argument elsewhere.
51. In doing so I should also record that I myself do not see any conflict of principle. The poor law, followed by the National Assistance Act 1948, followed by the Supplementary Benefits Act 1976, and followed by the Social Security Administration Act 1992, laid down the duties which all citizens owed to the public purse: under section 78(6) of the 1992 Act, '(a) a man shall be liable to maintain his wife and any children of whom he is the father; (b) a woman shall be liable to maintain her husband and any children of whom she is the mother;' former spouses are not included.
52. Private law followed a different course. A man did not owe a common law duty to support his former spouse such as would have enabled her to take advantage of the wife's agency of necessity. But the Matrimonial Causes Act 1857 and later such Acts, carrying on the former practice of Parliament, enabled the courts to award maintenance for divorced spouses, initially by an annual sum but later by periodical payments. This they did and have continued to do, even after the statutory encouragement of a clean break in section 25A of the Matrimonial Causes Act 1973. The court now has power to dismiss such claims without consent. If they are dismissed then no liability arises nor can it be resurrected later (unless the possibility of a claim under the Inheritance (Provision for Family and Dependants) Act 1975 is preserved). Presumably this is what happened in this case.
53. But that does not end the matter. There remains the duty to maintain one's child. Once the limit on the amount of maintenance which could be awarded for children of unmarried parents (under the old affiliation orders) was lifted, the courts recognised that children needed to be looked after. There is ample authority for the proposition that the carer's maintenance could therefore be taken into account in assessing their needs: see Haroutunian v Jennings (1977) 1 FLR 62 (Sir George Baker, P and Balcombe J), A v A (A Minor: Financial Provision) [1994] 1 FLR 657 (Ward J), J v C (Child: Financial Provision) [1999] 1 FLR 152 (Hale J). There is no reason to confine that approach to the children of unmarried parents: the policy of the law is to avoid discrimination as between the children of married and unmarried parents.
54. The child support system has elements of private and public law but fundamentally it is a nationalised system for assessing and enforcing an obligation which each parent owes primarily to the child. It replaces the powers of the courts, which can no longer make orders for periodical payments for children save in very limited circumstances. Unless she can secure a voluntary agreement at least as high as that which the CSA would assess, the parent with care is expected to look to the Agency to assess her child support according to the formula, whether or not she is on benefit. The fact that it does her no direct good if she is on means tested benefits, and that much CSA activity so far has been in relation to parents on benefit, does not alter the fundamental characteristics of the scheme. If the private law which it replaced recognised that the child's needs might encompass at least some of the needs of the person looking after him, then there is no reason in principle why the new scheme should not do so.
55. In fact, however, it may be about to abandon that stance. It will be little comfort to Mr Huxley, but the reforms proposed in the recent White Paper, A New Contract for Welfare: Children's Rights and Parents' Responsibilities (1999, CM 4349), would avoid many of his complaints. Child support would be assessed as a percentage of net income. The housing costs of the absent parent would not be deducted. Those on lower incomes would be protected by a lower percentage rate rather than a protected earnings rate. There would also be a percentage reduction for each child or step-child in the second family. But there would not be an element in the percentage for the parent with care. Her income would be ignored but so would her needs. Someone has been heeding the complaints made by Mr Huxley and others even if, under the law as it now stands, we are unable to do so.
56. I would dismiss this appeal.
57. Lord Justice Pill:I agree.
58. Lord Justice Auld:I also agree.

Order:appeal dismissed; leave to appeal to the House of Lords refused.