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 CHILD SUPPORT COMMISSIONER

		Royal Courts of Justice Strand London, WC2
		28th July 2006

1. LADY JUSTICE SMITH: This is an adjourned application by Paul Milton for permission to appeal against the decision of the Child Support Commissioner, who dismissed Mr Milton's appeal from a decision of an appeal tribunal. As I have indicated, the application for permission to appeal was adjourned into court by Laws LJ on notice to the respondents, Mrs Judith Milton, the applicant's former wife, and the Secretary of State for Work and Pensions. On the hearing of this application, Mrs Milton has not appeared but the Secretary of State is represented by Mr Sheldon.
2. Paul Milton and Judith Milton were married for a considerable period of time and had three children. When the marriage ended their two daughters, who had been born in 1985 and 1986, lived with Mrs Milton. In 2000 Mrs Milton applied for an assessment of child support maintenance for the two daughters. An order was made on 6 April 2001 that Mr Milton, who was and still is a self-employed builder, should pay £5.30 per week for child maintenance. Mrs Milton appealed, and on 5 June 2002, that order was increased to £43.96 per week, but only with temporary effect; namely, from 17 April 2000 to 18 September 2000, thereafter payment was set at £5.30. Mrs Milton in due course lodged an appeal against that order.
3. However, in the meantime on 17 June 2002, Mrs Milton applied for what is known as a departure direction. A departure direction enables the Child Support Agency to depart from the usual formula by which child maintenance is assessed. The basis of Mrs Milton's application was her contention that Mr Milton's lifestyle was inconsistent with his declared income. Her application was accompanied by a letter, in which she gave numerous examples of Mr Milton's comfortable lifestyle. She also alleged that during the marriage Mr Milton had frequently done building work for cash in hand. The money received did not go through his bank account and the jobs did not go through his written records which formed the basis of his business accounts. Thus, his accounts did not reflect his true earnings.
4. The Secretary of State directed that the application for a departure direction should be referred to the appeal tribunal. The date of that referral is not clear from our papers, but it must have been before March 2003 because on that date the appeal tribunal gave directions for the preparation for the making of the decision on the departure direction. At about that time, Mrs Milton's appeal against the initial assessment was also received, and so the appeal tribunal was at that stage seized of two matters, Mrs Milton's appeal and the referred application for a departure direction.
5. There then followed a series of directions, adjournments and delays, caused by a variety of problems, including at one stage the loss of the files. One of the causes of the delay was that in May 2003, Mrs Milton wrote to the Child Support Agency at Plymouth in the following terms:

"I am writing to inform you that my ex-husband and I have come to a private arrangement with regard to his payments for our two daughters. I no longer wish you to collect money from him for weekly maintenance or for any arrears owing. Should this arrange [sic] fail to work, I understand that I can apply to yourselves to start action again."

6. However, it appears that this agreement between Mr and Mrs Milton broke down and Mrs Milton wished to reinstate her appeal and her application for a departure direction, which by that time had of course been referred to the appeal tribunal. Eventually, a hearing of both matters took place on 14 June 2004. The appeal was dismissed on the merits, but the departure direction application succeeded.
7. The tribunal held first of all that, contrary to the contention that was advanced by Mr Milton, that application had not been withdrawn. The tribunal found that Mr Milton's lifestyle was inconsistent with his declared income. They held that his true income was £33 per week greater than he had declared. Mr Milton appealed to the Child Support Commissioner. An appeal is only allowed on a point of law.
8. In dealing with the appeal, the Commissioner dealt first with what were listed as grounds 1 and 4. These alleged that the tribunal had been wrong to hold that the application for a departure direction had not been withdrawn. The appeal tribunal had held that there had been no formal request by Mrs Milton to withdraw the application. The Commissioner went into that issue in much greater detail. At page 83 of our bundle, paragraph 15 of his decision, the Commissioner referred to regulation 40 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999, which provides that the referral by the Secretary of State of an application may be withdrawn by the Secretary of State. The Commissioner held that even if Mrs Milton had indicated to the Child Support Agency a wish to withdraw the application, that withdrawal was not effective unless and until it was withdrawn by the Secretary of State. That had not happened, as he found, and he was satisfied that the application had still been live when it was considered by the appeal tribunal.
9. Grounds 2 and 3 of the appeal, and indeed ground 6, were dismissed and need not be mentioned because they are not germane to this appeal. As to ground 5, which is germane, Mr Milton contended that the hearing before the appeal tribunal had been unfair. The appeal tribunal had found as a fact that he had received cash payments which were not declared; they, he submitted, had given no adequate reasons for so finding. Also the tribunal found that he had had the benefit of a rent-free period for the flat which he had occupied for a period of ten months in 2000/2001 and that that rent-free period, in effect, amounted to the receipt of a financial benefit which should be treated as earnings. Mr Milton's complaint was that the evidence in relation to the rent-free period had been raised only at the end of the hearing and that he, Mr Milton, had had inadequate opportunity to deal with it. The Commissioner rejected this submission and held that Mr Milton had had an adequate opportunity to deal with the point; moreover, the commissioner observed that it had not been suggested to him, the Commissioner, that Mr Milton could have said anything further on the subject which might have made a difference. Accordingly, the Commissioner dismissed the appeal.
10. In the notice of application for permission to appeal to this court Mr Burrows, who appears today for Mr Milton, seeks to argue that the two points in the Commissioner's decision to which I have referred were wrongly decided. Before considering his argument, it is right that I should remind myself of the dicta of Hale LJ, as she then was, in the case of Cooke v Secretary of State for Social Security [2001] EWCA Civ 734. That was an appeal from a Social Security Commissioner, in turn on appeal from a specialist tribunal; a situation similar to that which prevails in the present case. Hale LJ referred to section 55 of the Access to Justice Act 1999, which provides:

"Where an appeal is made to a county court or the High Court in relation to any matter, and on hearing the appeal the court makes a decision in relation to that matter, no appeal may be made to the Court of Appeal from that decision unless the Court of Appeal considers that -

"(a) the appeal would raise an important point of principle or practice, or

"(b) there is some other compelling reason for the court to hear it."

11. Hale LJ then observed that although that section did not apply to an appeal from the   Social Security Commissioner, it was relevant in that the rationale underlying section 55 also applied to appeals from the Commissioner. In short, she was of the view that where there was a two-tier structure of appeals, independent of the parties, laid down by statute and where that appeal structure could deal expertly with a specialised area of law, this court, the Court of Appeal, should approach the granting of permission to appeal with special caution, recognising the expertise of the Commissioner in applying the principles of the relevant legislation. I bear that case in mind.
12. I turn now to the two issues on which Mr Burrows sought to persuade us to grant permission. On the issue of withdrawal, Mr Burrows submitted that Mrs Milton had clearly withdrawn her application. He referred to the letter that she wrote to the Child Support Agency. He invited the court's attention to section 28(D) of the Child Support Act 1991, which provides as follows:

"(1) Where an application for a departure direction has not failed, the Secretary of State shall –

"(a) determine the application in accordance with the relevant provisions of, or made under, this Act or

"(b) refer the application to [an appeal tribunal] for the tribunal to determine it in accordance with those provisions.

"(2) For the purposes of subsection (1), an application for a departure direction has failed if –

"(a) it has lapsed or been withdrawn; or

"(b) the Secretary of State has rejected it on completing a preliminary consideration under section 28B."

13. Mr Burrows submitted that that section contemplates withdrawal of an application by the applicant. However, it is clear to me that on its plain words that section is dealing with withdrawal of an application before the Secretary of State has given it consideration under subsection 1; in other words, in this case, before the matter has been referred to the appeal tribunal. That section and indeed the whole of section 28, is silent as to the existence of any power to withdraw an application that has already been referred to the appeal tribunal by the Secretary of State.
14. To find that, one has to look at regulation 40 of the Social Security and Child Support Regulations, to which I referred a moment ago. There one finds a provision relating to withdrawal after referral by the Secretary of State. Regulation 40 provides as follows:

"(1) An appeal may with be withdrawn by the appellant or an authorised representative of the appellant and a referral may be withdrawn by the Secretary of State, as the case may be, either –

"(a) at an oral hearing, or

"(b) at any other time before the appeal or referral is determined, by giving notice in writing of withdrawal to the clerk to the appeal tribunal."

15. From that it is clear that only the Secretary of State can withdraw an application after he has referred it to the appeal tribunal. In my judgment, the Commissioner was obviously and unarguably right in his conclusion on this issue and I cannot see that there is any prospect of persuading the Court of Appeal to the contrary.
16. Next, Mr Burrows challenges the fairness of the hearing. He complains that Mr Milton had no proper chance to give his evidence on the crucial issue, relating to the rent-free period. However, at the start of this morning's hearing we were shown a handwritten note of the proceedings before the appeal tribunal. On that occasion, Mr Milton attended in person. He was not represented. Mrs Milton did not attend. The handwritten notes demonstrate that Mr Milton gave evidence at some length. The notes record a great deal of detail about financial matters. On the very last page, there is the following note:

"At Sidwell Street SL did 10/11/M [which I understand to mean months] did work on building and not physically pay rent. Not happen at previous address. Nothing else to add."

17. Now Mr Burrows has very fairly accepted that everybody knew that Sidwell Street was the flat for which Mr Milton had had a rent-free period in 2000/2001. The fact that he had enjoyed that rent-free period was not disputed and had been referred to in various documents. In particular, a document described as J2 had said that the rental on that flat would have been £430 per month. The tribunal's conclusion in respect of this rent-free period is as follows, at paragraph 10 of the reasons:

"In the course of Paul Milton's evidence he acknowledged that from September 2000 he worked on the flat where he lived in lieu of paying rent. This lasted for a period of 10 months from September 2000. At the time the rent was £430 a month.

"11. In the last 4 months of the accounting period to 30.12.00 this amounted to £1720. The weekly equivalent figure was £33 per week.

"12. Paul Milton acknowledged that he spent the income he earned. Effectively, therefore, he would have been spending at the end of 2000, £33 per week more than he had declared. No Income Tax or National Insurance deductions were made in respect of this saving and it was not declared by Paul Milton to the Inland Revenue. It should therefore be treated as net income."

18. The tribunal then went on to consider Judith Milton's submission to the tribunal that during the marriage her husband had done work for cash and in circumstances where he did not declare his income. The tribunal's decision then continues in paragraph 13:

"The example identified above [that is the example relating to the rent-free period] gave the tribunal the view, on the balance of probabilities, that Paul Milton would, by one means or another, receive income which was not declared and did not form part of his accounts. For this reason the Tribunal, on the balance of probabilities, concluded that Paul Milton should be treated has having a lifestyle inconsistent with his declared income by £33 net income per week.

"14. Although the actual arrangement with the landlord ended after 10 months the Tribunal considered that it was reasonable to expect that other forms of such arrangement or cash work not declared would have been undertaken, Paul Milton was to be treated as having continuing net income of £33 per week in addition to the figure contained in the accounts on the grounds that his lifestyle was inconsistent with his declared income."

19. Today, Mr Burrows has put his complaints about that passage and the Commissioner's rejection of his complaints about that passage in two ways. First of all, he has complained that the hearing was unfair, in that Mr Milton did not have a sufficient opportunity to explain what he wanted to explain about this point.
20. I for my part can see no merit in that submission. The note, which I am prepared to -- indeed I must -- accept is accurate, concludes with the words that Mr Milton has nothing further to say. It is true that this matter arose at the end of the hearing, but it cannot be said that he did not have the opportunity to deal with it.
21. Second, Mr Burrows argued that there was insufficient evidence on which to base the tribunal's findings and accordingly, he submits, the decision was perverse.
22. I cannot accept that submission. It seems to me that there was abundant evidence for the appeal tribunal to find as a fact, as they did in respect of the rent-free period, and to draw the inference, bearing in mind Mrs Milton's evidence, that this was not the only occasion upon which Mr Milton had received an undeclared financial benefit. In the absence of any direct evidence as to the amount of that indirect benefit, on a continuing basis, it seems to me not at all unreasonable that they should infer that it was of the order of £33 per week. The Commissioner rejected the complaints about the fairness of the trial for reasons, which I have indicated, seem to me to have been entirely sound. In my view, there is no prospect of this ground of appeal succeeding before the full court.
23. Accordingly, I would propose that the application for permission should be refused.
24. LORD JUSTICE LAWS: I agree.
25. LORD JUSTICE LATHAM: So do I. Permission is therefore refused.

Order: Application refused.