England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		St Dunstan's House 133-137 Fetter Lane London EC4A 1HD
		28 November 2005

1. MR JUSTICE JACKSON: This judgment is in five parts, namely

Introduction	Part 1
The facts	Part 2
The present proceedings	Part 3
The correct interpretation of the consent order	Part 4
Conclusion.	Part 5

.

Part 1: Introduction
1. This is an appeal by way of case stated against a liability order made under section 33 of the Child Support Act 1991. The appellant, who was the subject of that order, is Mr Kenneth Warring-Davies. The respondent is the Secretary of State for Work and Pensions. The Child Support Agency (to which I shall refer as "the CSA") operates under the aegis of the Secretary of State for Work and Pensions. In this judgment I shall refer to the Child Support Act 1991 as "the 1991 Act".
2. Section 6 of the 1991 Act provides:

"(1) Where income support, family credit or any other benefit of a prescribed kind is claimed by or in respect of, or paid to or in respect of, the parent of a qualifying child she shall, if,

(a) she is a person with care of the child; and

(b) she is required to do so by the Secretary of State

authorise the Secretary of State to take action under this Act to recover child support maintenance from the absent parent."

3. Section 11 of the 1991 Act provides that the amount of child support maintenance shall be assessed by a child support officer.
4. Section 29 of the 1991 Act provides:

"(1) The Secretary of State may arrange for the collection of any child support maintenance payable in accordance with a maintenance assessment where—-

(a) the assessment is made by virtue of section 6 ...

(2) Where a maintenance assessment is made under this Act, payments of child support maintenance under the assessment shall be made in accordance with regulations made by the Secretary of State.

(3) The regulations may, in particular, make provision—-

(a) for payments of child support maintenance to be made—-

(i) to the person caring for the child or children in question;

(ii)to, or through, the Secretary of State; or

(iii)to, or through, such other person as the Secretary of State may, from time to time, specify ..."

5. Pursuant to section 29 of the 1991 Act the Secretary of State made the Child Support (Collection and Enforcement) Regulations 1992. I shall refer to these regulations as "the 1992 Regulations".
6. Regulation 2 of the 1991 Regulations enables the absent parent to make payments direct to the parent with care. Such payments are treated as payments made to the Child Support Agency.
7. Section 33 of the 1991 Act provides:

"(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 assessment in question.

(2) The Secretary of State may apply to a magistrates' court ... for an order ('a liability order') against the liable person.

(3) Where the Secretary of State applies for a liability order, the magistrates' court ... 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 ... shall not question the maintenance assessment under which the payments of child support maintenance fell to be made."

8. That is a sufficient outline of the statutory framework. It is next necessary to outline the facts.
Part 2: The Facts
9. Following the breakdown of his marriage the appellant and his wife separated. They had two sons who remained in the care of the appellant's wife. The wife applied to the CSA for child support maintenance under section 6 of the 1991 Act. The CSA is expected to carry out its assessments within a period of six months. In this case, unfortunately, the assessment took just over two years.
10. On 21st September 2000 the CSA issued its assessment. The CSA assessed the sum which the appellant owed in respect of the period 21st September 1998 to 1st November 2000 ("the initial payment period") as £10,874.91 gross. I say gross because this figure did not represent the actual sum owed by the appellant as it did not give credit for mortgage payments, insurance payments and so forth. Therefore the actual sum due in respect of arrears for the initial payment period was not known at that time.
11. The CSA also made an assessment of the regular payments which the appellant should make to the CSA in respect of the period after 1st November 2000.
12. On 3rd October 2000 there was a hearing in the matrimonial proceedings between the appellant and his wife. Both parties were represented by counsel. There was discussion between counsel at the door of the court. This resulted in a consent order which was made by District Judge Rhodes in the following terms:

"1. The Petitioner do within 42 days of the date hereof convey and transfer to the Respondent all her estate and interest in the dwelling-house at 7 Coll Place, Odsal Top, Bradford subject to the outstanding mortgages thereon to Lloyds Bank Plc and Alliance and Leicester.

2. The Respondent do simultaneously with the transfer referred to at paragraph (1) herein convey and transfer to the Petitioner all his estate and interest in 1 Flockton Avenue, East Bowling, Bradford, subject to the mortgages to the Bradford and Bingley Building Society.

3. So soon as practicable the Petitioner shall take all steps necessary to convey and transfer to the Respondent all her interest in the property known as 'Le Bigayer' Paraillan, France subject to all borrowings secured thereon.

4. Save as aforesaid but without prejudice to the operation of section 31 of the Matrimonial Causes Act 1973 and except as set out in the schedule of chattels to be transferred within 14 days as between the parties annexed hereto, each party shall retain as his or her sole property all chattels, vehicles, pensions, policies or any other personal, real or intellectual property whatsoever as is presently in his or her respective name or possession, to the intent that a capital clean break shall hereby be attained between the parties, to which end all claims by either party for lump sums or transfer of property shall stand dismissed upon completion of paragraphs 1, 2 and 3 above.

5. The Respondent do pay periodical payments to the Petitioner at the rate of £900 per calendar month for 6 months commencing on 1st November 2000 and thereafter at the rate of £600 per month, providing that such maintenance (at either rate, or any varied rate) shall be reduced pound for pound pro tanto by any Child Support Agency assessment ordered against and paid by the Respondent in respect of any of the children of the family.

6. No order as to costs save that the costs of the Petitioner be assessed on a standard basis in accordance with Regulation 96 and 97 of the Civil Legal Aid (General) Regulations 1989. That the dwelling-house at 1 Flockton Avenue aforesaid is to be retained by the Petitioner as a home for herself and the children of the family."

13. It can be seen that this consent order resolved a substantial number of issues between the parties. As is not uncommon in this situation, the wife was going to remain in one property, which had previously been jointly owned - indeed the wife was going to acquire title to that property - and the wife was going to live there with the children of the family. So the appellant's wife would become the parent with care and, in the language of the 1991 Act, the appellant would become the absent parent.
14. Thereafter the appellant made payments to his wife in accordance with paragraph 5 of the consent order made by District Judge Rhodes. Pursuant to section 29 of the 1991 Act and regulation 2 of the 1992 Regulations those payments have been treated as discharging liabilities in equivalent amounts to the CSA in respect of maintenance payments due after September 2000.
15. There came a time when the consent order of 3rd October 2000 was set aside. However, the order was subsequently reinstated with inconsequential manuscript changes. For present purposes, it is not necessary for this court to go into that chapter of the story. During 2004 the CSA concluded that the appellant was substantially in arrears. By an undated complaint form issued in June 2004 the CSA applied for a liability order against the appellant. The hearing of that matter was adjourned on several occasions. It finally came before District Judge Thomas sitting at the Bradford Magistrates' Court on 13th May 2005. The District Judge made an order in the following terms:

"On the complaint of the Secretary of State for Social Security that the sums specified below are due from the defendant under the Child Support Act 1991 and Part IV of the ... 1992 Regulations and are outstanding, it is adjudged that the defendant is liable to pay the aggregate amount specified below.

Sum payable and outstanding

child maintenance £5,065.34."

16. The appellant was aggrieved by the making of that liability order. Accordingly he commenced the present proceedings.
Part 3: The present proceedings
17. By a notice of appeal dated 22nd July 2005 the appellant appealed to the High Court by way of case stated against the order of 13th May on the grounds that (1) the District Judge had misinterpreted the consent order of 3rd October 2000 and (2) the District Judge had made various errors in calculating the arrears due.
18. As requested, the District Judge stated a case for the opinion of the High Court. The material parts of the case stated by the District Judge read as follows:

"The Respondent's case

It was contended by the Respondent that their statement of account showed three occasions when payments were in arrears:

During the Initial Payment Period from 21.9.98 - 1.11.00

During this period the Appellant should have paid a total of £10,874.91. The Respondent allowed mortgage and house insurance payments totalling £8,723.25 and £966.46 respectively to be off-set against this amount leaving arrears of £1,185.20.

During the period from the beginning of August 2001 to the end of April 2002

The Respondent's statement of account showed that during this nine-month period payments should have been at the rate of £416.22 per calendar month to a total of £3,745.98 but no payments were made. The statement of account then records that the appellant paid a lump sum of £3,029.76 in May 2002 and a further lump sum of £551.34 in June 2002 making a total of £3,581.10.

Although there was some initial confusion about the apportionment of the first lump sum the Respondent subsequently accepted that the whole of the sum should be appropriated to the arrears of child maintenance.

The Respondent allowed a total sum of £418.20 out of the second lump sum giving a total of £3,497.96.

During the period from 25.3.03 - August 2003

Arrears accrued during this period because the appellant continued paying at the rate of £416.22 per month (the equivalent of £96.50 per week) despite the fact that on 25.3.03 his liability had increased to £128.22 per week with effect from 18.3.02.

The Appellant's Case

The Appellant's response to the Respondent's case was a simple one. He contended that he could not be in arrears provided that the maintenance payable under the County Court consent order made on 3.10.00 was more than the Respondent's Child Support assessment and provided he paid that maintenance. The basis of this contention was clause 5 of the consent order.

...

The Initial Payment Period

The Appellant contended that the effect of this clause was retrospective as well as prospective. Accordingly the whole of his initial payments under the consent order should be appropriated towards paying the current instalments under the Child Support assessment with the balance being used to pay off any arrears that had already accrued. Only when there were no payments of Child Support outstanding should the balance of the payments be applied towards the spousal maintenance element of the consent order.

During the hearing the Respondent reduced the arrears by £317.14 to reflect amounts the Appellant identified as payments he had made towards house insurance premiums. This resulted in a new arrears figure of £5,065.34.

August 2001 - April 2002

The Appellant pointed out that provision was made for the repayment of these arrears in an order of the County Court made on 4.2.02. ...

In his oral evidence the appellant contended that a mortgage payment of £330.20 which he made on 31.3.02 should also be offset against any outstanding arrears.

25.3.03 - August 2003

The Appellant again contended that the 'pro-tanto clause' in the consent order made on 3.10.00 prevented any arrears accruing during this period. During the months of April-July 2003 inclusive when he continued paying £416.22 per calendar month to the Respondent rather than the revised monthly rate of £555.62 (£128.22 per week) the Appellant maintained that the shortfall should have been made up from the maintenance he was paying to his former wife under the consent order.

...

FINDINGS

Interpretation of Consent Order

I did not accept the Appellant's contention that provided the amount payable under the consent order of 3.10.00 was more than the Respondent's Child Support assessment and provided he paid the order he could not be in arrears. The effect of this interpretation would be to absolve him from any responsibility for ensuring his maintenance payments were correctly apportioned between the Respondent and his former wife. I found that the wording of the order was not capable of bearing this interpretation.

Arrears accrued during the Initial Payment Period

Similarly I found that clause 5 of the consent order made by District Judge Rhodes was incapable of bearing the interpretation, which the Appellant contended it should be given, in relation to arrears that had accrued prior to the making of the order. The order was clearly intended to deal with future payments of maintenance by the Appellant and did not seek to address arrears under the Child Support assessment that had already accrued.

Arrears accrued during the period August 2001 - April 2002

I found that as a matter of simple mathematics even if both the Appellant's lump sum payments were appropriated in their entirety to paying off the arrears of child maintenance there would still be a shortfall of £164.88 - the amount remaining when the lump sum of £3,029.76 and £551.34 are taken from the accrued arrears of £3,745.98.

I rejected the Appellant's contention that the mortgage payment of £330.20 should be offset against any outstanding arrears as the payment was made outside the initial Payment Period and therefore could not be taken into account.

I noted that in their letter dated 3.9.03 the solicitors acting for Mrs Warring-Davies confirmed they had closed their file in relation to the court proceedings but do not find that this was in any way suggestive of the fact that the arrears must have been paid in full.

For the reasons I set out under 'Interpretation of Consent Order' above I found that the shortfall could not be made up from the Appellant's subsequent payments under the consent order.

Arrears accrued during the period 25.3.03 - August 2003

I found that the Respondent's statement of account clearly showed that the Appellant continued paying at the rate of £416.22 each month (the equivalent of £96.50 per week) until July 2003 despite the fact that on 25.3.03 his liability had increased to £128.22 per week with effect from 18.3.02.

Again for the reasons I set out under 'Interpretation of consent order' above I found that the shortfall during this period could not be made up out of the Appellant's subsequent payments under the consent order.

ORDER

Having therefore found that the Appellant was a person who was liable to make payments of child support maintenance and that he had failed to make one or more of those payments I made a liability order in the sum of £5,065.34."

19. The District Judge then stated two questions for the opinion of the High Court. They are as follows:

1. Whether clause 5 of the consent order made by District Judge Rhodes on 3.10.00 was capable of bearing the meaning contended for by the appellant.

2. Whether on the above facts there was evidence on which I could come to the conclusion that the appellant had failed to make one or more payments of maintenance due to the respondent.

20. The appellant's appeal has come on for hearing today. The appellant appears as a litigant in person. The appellant has presented his case clearly, concisely and courteously. The respondent is represented by Mr Clive Sheldon. He too has presented his case similarly clearly, concisely and courteously. He has also assisted the court with those matters of law upon which the appellant relies where counsel was better able to assist the court in thumbing through the regulations and statute to find the precise passages which were relevant. I am grateful to both advocates for their considerable assistance today.
21. At the start of the hearing I raised a number of questions. It must be confessed that I had some difficulty in marrying up the documents in the bundle with the reasoning of the District Judge and I had considerable difficulty in understanding how the liability order in the sum of £5,065.34 was arrived at. Mr Sheldon took time to liaise with the appellant at the start of the hearing. He also took instructions on a number of matters, and after an adjournment of half an hour or so (which was used most productively) Mr Sheldon was in a position substantially to cut down the issues between the parties.
22. After the period of adjournment Mr Sheldon did not respond to my individual queries and seek to justify the entire build up of the £5,065.34. Instead he put the respondent's case in this way: the CSA and the Secretary of State accept that, apart from the initial period and the arrears alleged in that period, the remaining payments of child support maintenance owed by the appellant were in fact made by one means or another, save for a sum of £300 which the Child Support Agency still believes to be due. So far as the initial payment period is concerned, the respondent contends that a sum of £902.45 is still due. The respondent arrives at that figure in this way: the respondent gives various credits for mortgage payments and insurance payments. The respondent deducts these sums from the initial figure of £10,876.91 mentioned earlier in this judgment. That leaves a balance of £902.45. Mr Sheldon went on to say that, if the appellant were to succeed on the issue of principle in respect of the initial payment period, the respondent would not seek to uphold a liability order or to enforce a liability order in the residual sum of £300. That is such a small figure that it does not justify the effort of going through many transactions over a number of years where there must be a possibility of some errors having crept in. It clearly would be unreasonable for the CSA to press on for such a small sum derived over such a long period, and the respondent and Mr Sheldon very sensibly did not seek to do that.
23. So far as the initial payment period is concerned, Mr Sheldon accepts that a payment of £900 made by the appellant during October 2000 pursuant to the consent order dated 3rd October 2000 is to be taken into account because that payment was made during the initial payment period. However, submits Mr Sheldon, one does not use any other £900 payments made under the consent order for the purposes of reducing or extinguishing arrears due to the CSA which had accrued before October 2000.
24. Following that very helpful submission by Mr Sheldon after the adjournment, the appeal then proceeded and the ground between the parties was very substantially narrowed. The argument at today's hearing centred upon the proper interpretation of the consent order. I must now therefore give my decision on that issue.
Part IV: The correct interpretation of the consent order
25. Paragraph 5 of the consent order expressly provides that any sums paid by the appellant to the CSA shall be deducted from the monthly maintenance payments to the wife. It follows from this that, however how much or little the CSA may demand, that sum has the first claim on the appellant's resources. It is only after that sum has been paid that any balance is treated as maintenance for the appellant's wife. What happened in practice was that the appellant made certain payments direct to his wife which took effect under section 29 of the 1991 Act and regulation 2 of the 1992 Regulations. The same principles must apply in apportioning these payments: the top slice is referable to the children, the balance, if any, constitutes maintenance for the wife. The CSA now accepts this principle. Mr Sheldon contends, however, that the payments of £900 were not "designed to pay off arrears that had accrued during the initial payment period".
26. Let me now summarise the arguments as put today at the hearing. The appellant says that the words "any Child Support Agency assessment" in paragraph 5 of the consent order must include an assessment in respect of arrears which accrued during the initial payment period. He relies in support of this interpretation on the fact that it had taken the CSA some 25 months to complete their statement of assessment. He also relies upon the fact that the CSA's internal guidance provides that the proper period for such assessment is in the region of 26 weeks. Given the length of time which the assessment covered, when it came to drafting the order it must have been contemplated that there would be arrears payable in respect of the initial payment period although the precise amount was unknown. The appellant says that it was for this reason that the broad phrase "any Child Support Agency assessment" was used and that accordingly the phrase must include the assessment of sums due in respect of the initial payment period.
27. Secondly, the appellant relies on the fact that the periodical payments to be made pursuant to the order were in the sum of £900 per calendar month for the first six months (commencing on 1st November 2000) and were then reduced to £600 per calendar month thereafter. The appellant submits that the higher figure payable for the first six months was designed to cover indebtedness to the CSA in respect of the initial payment period.
28. In response to these arguments Mr Sheldon for the CSA submits that, if the intention of the parties to the consent order was to cover arrears, the order would have expressly stated this to be the case. He points out that the CSA, when presented with such an order, cannot be expected to know the background to the drafting of that order. If the parties had intended the clause to apply to arrears in respect of the initial payment period they should have expressly said so. Furthermore, this is an order which is not simply the product of the parties' negotiations; it is also an order which was made and approved by the Bradford County Court.
29. Having considered the competing arguments, I prefer and accept the submissions of the appellant. The monthly payments of £900 reducing to £600 were intended to be appropriated, so far as necessary, to paying off any arrears due to the CSA which had accrued during the initial payment period. I reach this conclusion for three reasons:

(1) The phrase "any Child Support Agency assessment" is a broad one. On a natural reading, those words encompass any assessment made in respect of outstanding arrears.

(2) The consent order was negotiated by the parties and approved by the court at a time when it was known that the appellant owed some arrears to the CSA but the amount of those arrears was not easily calculatable and was not known. Given that factual matrix, paragraph 5 of the order only makes sense if it includes the existing undefined liability to the CSA.

(3) The obvious purpose of the higher payments for the first six months (£900 per month) was to pay off arrears.

30. I have studied the reasoning of the District Judge set out on pages 8 and 9 of the case stated. For my part I find it extremely helpful that the District Judge has set out his reasoning so fully and clearly. It will be seen from the foregoing that I do not agree with the reasoning and I do not accept the interpretation of the order which results from it. The District Judge uses the phrase "absolve the appellant from responsibility for ensuring his maintenance payments were correctly apportioned between the respondent and his former wife". I do not think under the terms of the consent order the appellant did have such a responsibility for apportionment.
31. Likewise the District Judge concludes that the order was intended to deal only with future payments of maintenance and did not seek to address past arrears. I do not think that there is anything either in the express words or in the implication of the consent order which leads to that conclusion.
32. So although I appreciate the clarity with which the District Judge has set out his reasons, I have come to the opposite conclusion from the District Judge. In the result, therefore, I consider that the District Judge erred in his interpretations of the consent order.
Part 5: Conclusion
33. For the reasons stated in Part IV above, my interpretation of paragraph 5 of the consent order accords with that contended for by the appellant. I therefore hold that the answer to question 1 as formulated in the case stated is 'yes'. The consequence of this holding is that the CSA's claim for £902.45 fails. In those circumstances, having regard to the concession made by Mr Sheldon at an early stage of the hearing, the CSA does not seek to enforce or uphold any liability order for the residual sum alleged to be due, namely £300. In those circumstances my answer to question 2 as set out in the case stated is 'No'.
34. It follows from the foregoing that the appellant succeeds in his appeal. The liability order made on 13th May 2005 is quashed.
35. Are there any ancillary matters anybody wishes to raise?
36. MR WARRING-DAVIES, THE APPELLANT: My Lord, please, may I ask for costs in the matter?
37. MR JUSTICE JACKSON: Yes. Now, you are a litigant in person and Mr Sheldon will assist us, I expect, as to the precise entitlement of a litigant in person.
38. MR WARRING-DAVIES, THE APPELLANT: Thank you. And may I thank you and the court for looking after me?
39. MR JUSTICE JACKSON: You are most welcome.
40. MR SHELDON: My Lord, I do not seek to oppose an application for costs. I do not know the precise --
41. MR JUSTICE JACKSON: There are regulations which deal with this.
42. MR SHELDON: And they set out how much can be claimed by the appellant.
43. MR JUSTICE JACKSON: Yes.
44. MR SHELDON: I think maybe it is a matter the parties can agree between themselves without recourse to the court if there was an order that payments should be made.
45. MR JUSTICE JACKSON: Yes. Where do you travel back to today, Mr Warring-Davies?
46. MR WARRING-DAVIES, THE APPELLANT: Back to Yorkshire, my Lord.
47. MR JUSTICE JACKSON: So you will want to get it sorted out before you go. The sensible course might be for you to get the relevant regulations and to look them up. Most of them are in volume 2 of the White Book.
48. MR SHELDON: Yes.
49. MR JUSTICE JACKSON: Could you sort it out now, the precise wording of the costs order? I will say that in principle I make an order for costs in favour of the appellant. What I request is that you look up the regulations, Mr Sheldon, and work out precisely what Mr Warring-Davies is entitled to, and then, provided he agrees with your phraseology, would you draw up an appropriate order to set out the answers to the questions, the allowing of the appeal and the costs order?
50. MR SHELDON: Yes.
51. MR JUSTICE JACKSON: If you could draw it up in manuscript and bring it in to me or send it in to me after it has been agreed by Mr Warring-Davies, I will initial it. Then Mr Warring-Davies can go back to Yorkshire armed with a photocopy of the order and perhaps you could then get it typed up.
52. MR SHELDON: Yes.
53. MR JUSTICE JACKSON: And then lodged with the court and a copy in due course sent to Mr Warring-Davies. Is that a sensible way to proceed?
54. MR WARRING-DAVIES, THE APPELLANT: That is fine. I do not mind, my Lord, if it is not done today. There is no horrific rush.
55. MR JUSTICE JACKSON: I am afraid I do mind. I have had some unfortunate experiences of orders not being drawn up on the day they are made. While I am quite sure you and Mr Warring-Davies would deal with matters expeditiously, the safest course is to get it sorted out before anybody leaves the building. If there is a misunderstanding later, it is almost impossible to resolve.
56. MR WARRING-DAVIES, THE APPELLANT: Thank you, my Lord.