England and Wales Court of Appeal (Civil Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
His Honour Judge Vincent
Sitting at Truro County Court
BS09P00759

		Royal Courts of Justice Strand, London, WC2A 2LL
		30/03/2010

LORD JUSTICE THORPE:

1. The Child Support Act 1991 removed the assessment and collection of periodical payments for children from the realm of judicial proceedings, establishing an administrative body responsible for the assessment of liability applying a formulaic yard stick. The subsequent collection and enforcement of the weekly sum assessed was also in the hands of the agency.
2. To ease the administrative process, paternity was presumed where a married woman gave birth to a child, a presumption that the husband could rebut by seeking declaratory relief.
3. The operation of this administrative system has not enjoyed a good press. Statistics reveal that over the years many have been wrongly assessed. By contrast very many due assessments have simply gone uncollected.
4. There have been many attempts to remedy these deficiencies by statutory reform or evolution. Certainly the powers of enforcement have been amplified and fortified. Thus it is not surprising to find that the administrative body (hereinafter the Commission) has powers to levy arrears by way of distress, charging order or third party debt order.
5. However there will be not a few liable parents who have no visible assets against which such orders could be directed. So there is an additional weapon in the hands of the Commission, namely an application for a committal order alternatively a driving disqualification order.
6. This then is the statutory framework:
7. The 1991 Act established a structure and mechanism 'for the assessment, collection and enforcement of periodical maintenance payable by certain parents with respect to children of theirs who are not in their care'. [Preamble to the Act].
8. The basic principles enshrined in the Act are set out at sections 1 and 2 of the Act as follows:

1.—(1) for the purposes of this Act, each parent of a qualifying child is responsible for maintaining him.

(2) For the purposes of this Act, a non-resident parent shall be taken to have met his responsibility to maintain any qualifying child of his by making periodical payments of maintenance with respect to the child of such amount, and at such intervals, as may be determined in accordance with the provisions of this Act.

(3) Where a maintenance calculation made under this Act requires the making of periodical payments, it shall be the duty of the non-resident parent with respect to whom the calculation was made to make those payments.


2. Where, in any case which falls to be dealt with under this Act, the Secretary of State is considering the exercise of any discretionary power conferred by this Act, he shall have regard to the welfare of any child likely to be affected by his decision.

9. A 'qualifying child' is defined as one with a non-resident parent, or parents (section 3). Section 4(1) provides that a person with care for a 'qualifying child' may apply to the Secretary of State for 'a maintenance calculation to be made under this Act with respect to that child'.
10. Section 4(2) provides that:

Where a maintenance calculation has been made in response to an application under this section the Secretary of State may, if the person with care or non-resident parent with respect to whom the assessment was made applies to him under this subsection, arrange for—

(a) The collection of the child support maintenance payable in accordance with the calculation;

(b) The enforcement of the obligation to pay child support maintenance in accordance with the calculation.

11. In R (Kehoe) v. Secretary of State for Work and Pensions [2005] 1 AC 42, the House of Lords held that that the 1991 Act had established a comprehensive scheme for the recovery of child maintenance under which a parent with care of a qualifying child was deliberately given no right to recover or enforce a claim for maintenance against a non-resident parent and that this was vested in the Commission.
12. The various mechanisms for collection and enforcement of child support maintenance are set out at sections 29 to 41 of the 1991 Act, and Regulations issued thereunder.
13. Section 33 of the Act provides for 'Liability orders'. Section 33 provides as follows:

(1) This section applies where—

(a) a person who is liable to make payments of child support maintenance ("the liable person") fails to make one or more of those payments; and

(b) it appears to the Secretary of State that—

(i) it is inappropriate to make a deduction from earnings order against him (because, for example, he is not employed); or

(ii) although such an order has been made against him, it has proved ineffective as a means of securing that payments are made in accordance with the maintenance calculation in question.

(2) The Secretary of State may apply to a magistrates' court or, in Scotland, to the sheriff for an order ("a liability order") against the liable person.

(3) Where the Secretary of State applies for a liability order, the magistrates' court or (as the case may be) sheriff shall make the order if satisfied that the payments in question have become payable by the liable person and have not been paid.

(4) On an application under subsection (2), the court or (as the case may be) the sheriff shall not question the maintenance calculation under which the payments of child support maintenance fell to be made.

14. A liability order does not of itself have any specific legal effect. It is merely a necessary pre-requisite, or gateway, to other modes of enforcement where a deduction from earnings order has proved, or is likely to prove, ineffective.
15. Section 39A of the 1991 Act provides as follows:

(1) Where the Commission has sought–

(a) in England and Wales to levy an amount by distress under this Act; or

(b) to recover an amount by virtue of section 36. . .,

and that amount, or any portion of it, remains unpaid it may apply to the court under this section.

(2) An application under this section is for whichever the court considers appropriate in all the circumstances of–

(a) the issue of a warrant committing the liable person to prison; or

(b) an order for him to be disqualified from holding or obtaining a driving licence.

(3) On any such application the court shall (in the presence of the liable person) inquire as to–

(a) whether he needs a driving licence to earn his living;

(b) his means; and

(c) whether there has been wilful refusal or culpable neglect on his part.

(4) The Commission may make representations to the court as to whether [it] thinks it more appropriate to commit the liable person to prison or to disqualify him from holding or obtaining a driving licence; and the liable person may reply to those representations.

. . .

(6) In this section "the court" means–

(a) in England and Wales, a magistrates' court . . . '

16. It can be seen that an application made pursuant to s39A can only be made after the Commission has 'sought to levy an amount by distress' or 'to recover an amount by virtue of section 36' (garnishee proceedings or a charging order), and that amount or a portion of it remains unpaid.
17. Section 40 of the 1991 Act sets out the approach that the Justices must take if they are considering committal:

'(3) If, but only if, the court is of the opinion that there has been wilful refusal or culpable neglect on the part of the liable person it may—

(a) issue a warrant of commitment against him; or

(b) fix a term of imprisonment and postpone the issue of the warrant until such time and on such conditions (if any) as it thinks just.

(4) Any such warrant—

(a) shall be made in respect of an amount equal to the aggregate of—

(i) the amount mentioned in section 35(1) or so much of it as remains outstanding; and

(ii) an amount (determined in accordance with regulations made by the Secretary of State) in respect of the costs of commitment; and

(b) shall state that amount.

. . .

(6) A warrant issued under this section shall order the liable person—

(a) to be imprisoned for a specified period; but

(b) to be released (unless he is in custody for some other reason) on payment of the amount stated in the warrant.

(7) The maximum period of imprisonment which may be imposed by virtue of subsection (6) shall be calculated in accordance with Schedule 4 to the Magistrates' Courts Act 1980 (maximum periods of imprisonment in default of payment) but shall not exceed six weeks.

. . . '

18. Section 40B of the 1991 Act sets out the approach that the Justices must take if they are considering disqualification from driving:

(1) If, but only if, the court is of the opinion that there has been wilful refusal or culpable neglect on the part of the liable person, it may–

(a) order him to be disqualified, for such period specified in the order but not exceeding two years as it thinks fit, from holding or obtaining a driving licence (a "disqualification order"); or

(b) make a disqualification order but suspend its operation until such time and on such conditions (if any) as it thinks just.

(2) The court may not take action under both section 40 and this section.

(3) A disqualification order must state the amount in respect of which it is made, which is to be the aggregate of–

(a) the amount mentioned in section 35(1), or so much of it as remains outstanding; and

(b) an amount (determined in accordance with regulations made by the Secretary of State) in respect of the costs of the application under section 39A.

(4) A court which makes a disqualification order shall require the person to whom it relates to produce any driving licence held by him, and its counterpart (within the meaning of section 108(1) of the Road Traffic Act 1988).

(5) On an application by the Commission or the liable person, the court–

(a) may make an order substituting a shorter period of disqualification, or make an order revoking the disqualification order, if part of the amount referred to in subsection (3) (the "amount due") is paid to any person authorised to receive it; and

(b) must make an order revoking the disqualification order if all of the amount due is so paid.

(6) The Commission may make representations to the court as to the amount which should be paid before it would be appropriate to make an order revoking the disqualification order under subsection (5)(a), and the person liable may reply to those representations.

(7) The Commission may make a further application under section 39A if the amount due has not been paid in full when the period of disqualification specified in the disqualification order expires.

(8) Where a court–

(a) makes a disqualification order;

(b) makes an order under subsection (5); or

(c) allows an appeal against a disqualification order,

it shall send notice of that fact to the Commission; and the notice shall contain such particulars and be sent in such manner and to such address as the Commission may determine.

(9) Where a court makes a disqualification order, it shall also send any driving licence and its counterpart, on their being produced to the court, to the Commission at such address as it may determine.

(10) Section 80 of the Magistrates' Courts Act 1980 (application of money found on defaulter) shall apply in relation to a disqualification order under this section in relation to a liable person as it applies in relation to the enforcement of a sum mentioned in subsection (1) of that section.

. . ."

19. The present appeal requires the consideration of some of these statutory provisions in the context of the Mitchell family. The relevant factual background is as follows.
20. Mr. Mitchell and the former parent with care (Sonia Clements – formerly Mitchell) have three children. The children were born on 12^th July 1984, 10^th June 1986 and 10^th November 1988. Ms. Clements made an initial application for maintenance from Mr. Mitchell in 1993. Since that time, Mr. Mitchell has made payments of maintenance for his three children in the total sum of £9 (in 1995, he made 3 payments of £3 each).
21. On 24^th January 2002, the Commission obtained a liability order against Mr. Mitchell in the sum of £15,339.68, reflecting maintenance arrears that had built up over the period of 28^th February 1996 to 7^th November 2001 (although the amount under the liability order was later reduced to £13,722.06 due to a change in assessment). The total amount of child maintenance arrears owed by Mr. Mitchell is £14,592.07.
22. After obtaining the liability order, the Commission made a number of attempts to obtain the sums covered by the liability order: see witness statement of Mr. Steven Inglis (court presenting officer) prepared for the purposes of the hearings before East Cornwall Justices.
23. On a number of occasions a Deduction from Earnings warning was sent to Mr. Mitchell. No payment was received in response. On 25^th July 2007, a warning letter was sent to Mr. Mitchell informing him that the matter had been referred to bailiffs. On 13^th December 2007, Mr. Mitchell spoke to the bailiffs and informed them that he had made himself bankrupt to avoid paying the Commission. A charging order was not appropriate as Mr. Mitchell did not own a property. A third party debt order was not appropriate as the Commission was unable to obtain bank details from Mr. Mitchell.
24. On 7^th August 2008, the bailiffs returned a 'nulla bona', as recovery was unsuccessful.
25. On 2^nd February 2009, a summons was served on Mr. Mitchell. Various hearings were adjourned. East Cornwall Justices considered an argument made on behalf of Mr. Mitchell by Mr. Burrows, Solicitor-Advocate, that the application/summons should be struck out on the basis that it was barred by the Limitation Act 1980.
26. On 19^th October 2009, the East Cornwall Justices rejected the argument based on the Act. They decided that Mr. Mitchell had culpably neglected to pay some of the maintenance arrears due to the Commission, but lacked the current ability to pay. They adjourned the matter until 19^th November 2009.
27. At the November hearing the Justices made an order disqualifying Mr Mitchell from driving for 12 months, suspended on the ground that he pay £5 per week in child maintenance arrears.
28. Mr. Mitchell appealed to the County Court, pursuant to section 111A of the Magistrates Court Act 1980. The matter was heard by His Honour Judge Vincent on 23^rd November 2009. Mr. Mitchell was represented by Mr. Burrows at the hearing.
29. His Honour Judge Vincent allowed the appeal, deciding that the application was barred by the Limitation Act. His Honour Judge Vincent relied on both section 24 of the Act (deciding that the liability order was a 'judgment' for the purposes of that provision) and section 9 (deciding that the application made pursuant to s39A was, in the circumstances, an action to recover a debt).
30. The judgment of His Honour Judge Vincent is commendably brief and I will therefore cite it in full:

"1. JUDGE VINCENT: This is an appeal against a decision made by the Eastbourne magistrates on an application for issue of a committal warrant by the agency that I shall call the Child Support Agency, albeit that they may at some stage operate under a different name. The justices found in respect of an undefined amount of past maintenance liability that Mr Mitchell had culpably neglected to pay. That finding ostensibly gave them the power to accede to the application for the issue of a committal warrant or, in the alternative, to make a driving disqualification. They elected to make a driving disqualification and then suspend that disqualification on payment terms in respect of the past liability.

2. The first argument that has been mounted against their decision is that the application for the warrant for committal offends the Limitation Act 1980. Section 9(1) of that Act says:

'An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.'

3. Section 24 of the same Act says:

'An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.'

4. The liability order in this matter is now very historic and t was a liability order made by the justices. They had limited alternative but to make it, however it was on any basis a judgment for the purposes of section 24 of the Limitation Act 1980. In other words, whilst their hands may have been tied as to what steps they could take, nonetheless it involved a judicial decision and the sanctioning of an application for the liability order.

5. By the same token, looking at section 9 of the Limitation Act, it seems to me that the issue of an application for a committal warrant does, in the circumstances, amount to an action to recover any sum recoverable under the child support legislation. It has two purposes; it can be a simply punitive jurisdiction based on default, and the culpable neglect or wilful refusal has to be found before the jurisdiction is invoked.

6. Nonetheless I am in no doubt that its source purpose is to achieve payment of the liability and that is a view reinforced by the specific power in the justices in dealing with any such application to suspend any order that they make on such terms as they see fit. Those terms conventionally would include terms of a monetary nature involving discharge of the liability.

7. It follows that the application for a warrant for committal falls squarely within the terms of section 9(1) of the Limitation Act as well. In a sense it does not matter which of those two provisions of the Limitation Act 1981 one considers. On both points, given the age of the liability order and the due maintenance payments under it, the application for a warrant of committal would offend section 9(1) or section 24(1) of the Limitation Act 1980 and that application for a warrant is therefore statue barred.

8. That, in a sense, is enough to dispose of the appeal because it means that the justices were without jurisdiction to make the orders that they made and it therefore follows that I set aside their decision of 19^th November and nothing else remains."

31. In his grounds of appeal and supporting skeleton argument, Mr Sheldon contends that as a matter of law the Limitation Act 1980 does not apply to an application pursuant to section 39(a) of the Child Support Act 1991.
32. If he fails in that submission then he advances alternative submissions as to the date upon which the limitation period commences. If he is right in his first submission it is not necessary to consider his alternative grounds.
33. Judge Vincent allowed Mr Mitchell's appeal holding that the application to obtain an order under section 39A was either "an action" to enforce a sum recoverable by virtue of any enactment, within section 9 of the Limitation Act 1980; or an action upon a judgment, within section 24 of the Limitation Act 1980. During the course of his submissions Mr Burrows conceded that section 24 is not applicable. His reliance was therefore solely upon section 9, and particularly the wide definition given to "action" by Lord Goddard CJ, in China v Harrow UDC [1954] QB 178, when considering proceedings for the recovery of rates.
34. Mr Sheldon's submission throughout was that the section 39A procedure fell without the express wording of section 9, namely "an action to recover any sum recoverable by virtue of any enactment".
35. In the end the present appeal boils down to that short point.
36. In my judgment Mr Sheldon succeeds in his submission on the proper construction of section 9, despite the wide language of Lord Goddard CJ in China v Harrow UDC.
37. That is because neither of the two possible orders that can be obtained under section 39A will result directly in the recovery of the sums due by way of child maintenance. The available orders will either commit the parent in default to prison or will prevent him from having or obtaining a driving licence. Even if "action" is to be construed as meaning "proceedings" it must still be limited to proceedings for money claims made in a court. The application under section 39A is not for a money claim but for a committal order or a disqualification order.
38. Of course it may lead indirectly to the recovery of sums due by way of child maintenance, as here where the Justices made an order suspended conditionally upon payment of the sum of £5 per week. But the additional power which section 39A provides is to pressurise the parent who is wilfully refusing or culpably neglecting either to meet his financial obligations or to suffer a distasteful alternative. As my Lord, Lord Justice Aikens, put it during the course of argument, section 39A is essentially a stick and carrot provision rather than one that permits "proceedings" to recover a sum of money.
39. For those brief reasons I would decide this short point in favour of the Commission and allow the appeal from the court below.

Lord Justice Moore-Bick

40. I agree.

Lord Justice Aikens

41. I agree that this appeal must be allowed. The application to the Magistrates was for an order under section 39A of the Child Support Act 1991 as amended. The Magistrates have power under that section to make an order to commit the "non – resident" parent to prison, or to ban him from driving. Before they can do so they have to be satisfied of three things: (a) that the Agency has obtained a "liability order"; (b) that the Agency has tried to recover the arrears (either by distress or by getting a garnishee or charging order; and (c) that the respondent was guilty of deliberate refusal to pay or culpable refusal. Even so there is a discretion on whether to impose either order or none at all.
42. The necessity for those three requirements arises from a combination of five stages in the 1991 Act. First, under section 1(2), a non-resident parent shall be taken to have met his responsibility to maintain any "qualifying child" by making periodic payments of maintenance for the child. Where a "maintenance assessment" has been made under the 1991 Act, it is the duty of the absent parent to make the payments. However, it is to be noted that, at that stage, there is no automatic power to enforce the payment of the sums due.
43. Secondly, by section 4(1), a person who has care of a "qualifying child" may apply to the Secretary of State for a "maintenance calculation" to be made in respect of the child. Under section 4(2) the Secretary of State, upon application, may make arrangements to enforce the obligation to make the maintenance payments.
44. Those means of enforcing are set out in sections 29 – 41 of the 1991 Act. The third provision of the Act that is relevant to the section 39A powers is section 33, which is applicable where a person liable to make payments of child support maintenance fails to make one or more of the payments, see section 33(1), and it appears either inappropriate or it is ineffective to make a deduction from earnings order against the person liable. In that case the Secretary of State can apply to a Magistrates' court for a "liability order": section 33(2). That is not, itself a positive weapon for enforcement; it is simply the pre- condition for using other methods of enforcement.
45. The fourth step is that under section 35 of the 1991 Act where a liability order has been made against a person then the Secretary of State may levy the appropriate amount by distress and sale of the liable person's goods. Alternatively, the liability order can be enforced, under section 36, by means of a third party debt order (what used to be a garnishee order) or a charging order, which can be obtained in the county court.
46. Fifthly and lastly, section 39A comes into play at the stage where attempts to levy an amount by distress (under section 35) or to recover by means of an order from the county court (under section 36) have failed and the sums payable remain either wholly or in part outstanding. At that stage the Commission can apply to the Magistrates' Court for a warrant committing the liable person to prison; or an order for that person to be disqualified from holding or obtaining a driving licence: section 39A(2)(a) and (b).
47. The judge held that the application to obtain an order under section 39A was either "an action" to enforce a sum recoverable by virtue of any enactment, within section 9 of the Limitation Act 1980; or an action upon a judgment, within section 24 of the Limitation Act 1980. The respondent now accepts that section 24 is not applicable.
48. So the only question is whether the application for an order under section 39A is "an action to recover any sum recoverable by virtue of any enactment" within section 9 of the 1980 Act. If it is then such an action "shall not be brought after the expiration of six years from the date on which the cause of action accrued".
49. In my view the application to the Magistrates' Court under section 39A is not an "action to recover any sum recoverable by virtue of any enactment". That is because neither of the two possible orders that can be obtained under section 39A will result in recovery of the sums due by way of child maintenance. The orders will either commit the person to prison or prevent him from having or obtaining a driving licence.
50. I accept that in the Divisional Court judgment of Lord Goddard CJ in China v Harrow UDC [1954] QB 178 at 185-6, the Lord Chief Justice gave a very wide definition to "action" for the purposes of section 2(1)(d) of the Limitation Act 1939, which effectively contains the same wording as in section 9 of the 1980 Act. Lord Goddard said that, in the context, "action" meant "proceedings" and so can apply to all proceedings for money claims made in a court. But that does not help the respondent, because any application under section 39A is not for a money claim. It is for committal or to restrain the use or obtaining of a driving licence. I would not give the words "to recover any sum recoverable by virtue of any enactment" the wide meaning for which Mr Burrows, on behalf of Mr Mitchell, contends. A section 39A order can be called a "wake up" call, as Mr Sheldon called it in argument, or a "stick and carrot" provision, as I called it, but it is not a provision that permits "proceedings" to recover a sum of money.
51. I think that this conclusion fits in well with the statutory framework. It was held by Andrew Collins J in R (Sutherland) v Sec of State for Work and Pensions [2004] EWHC 800 (Admin) that legal liability to pay maintenance is established when a maintenance assessment is made under section 1(3) of the 1991 Act (with time beginning to run for limitation purposes when the parent is notified of the assessment). There used to be a Regulation 28 of the Child Support (Collection and Enforcement) Regulations 1992 (No 1989) which stipulated that no application for a "liability order" could be made more than six years after the day on which payment of the amount in question became due. Therefore, once there had been a maintenance assessment and sums became due periodically thereafter, the Commission had six years to obtain a Liability Order. Obtaining that Liability Order was the precondition to taking steps such as distress or getting a charging order or a third party Debt Order in the county court. So, up until the time that Regulation 28 was revoked (we were told that was in 2000), the person subject to a maintenance assessment order was protected because if the Commission failed to get its Liability Order within six years, then it could not move onto the next steps (including a s.39A order). We were told that the Regulation 28 was not revoked retrospectively, so that it would still apply to all cases where the amounts in question had become due before 2000.
52. That regime applies in this case because the maintenance assessment was obtained in 1996 and the Liability Order was obtained on 24 January 2002. It was in time, even if only just. We do not need to decide whether the Limitation Act 1980 will apply to "proceedings" to obtain a Liability Order after Regulation 28 has ceased to have effect. In that context, Mr Sheldon's argument that the Limitation Act does not apply at all to the 1991 Act may become relevant. That is an argument for another day.
53. In this case, I cannot see any injustice in the Commission applying for a s.39A order when it has (if only just) got its Liability Order in time, at least in respect of all sums due after 24 January 1996. There is a discretion in the Magistrates' Court on whether to grant an order under section 39A. I can see that it might be possible to argue that an application which comes after 6 years from the date when a Liability Order was obtained would constitute an abuse of process. But we do not need to deal with that argument either, as it was not raised.
54. I would allow the appeal.