Northern Ireland - Social Security and Child Support Commissioners' Decisions

[1996] NISSCSC CSC4/96 (6 May 1997)

 


Decision No: CSC4/96

THE CHILD SUPPORT (NORTHERN IRELAND) ORDERS 1991 AND 1995

CHILD SUPPORT

Appeal to the Child Support Commissioner

on a question of law from the decision of the

Child Support Appeal Tribunal

dated 5 June 1996

DECISION OF THE CHILD SUPPORT COMMISSIONER

1. This is an appeal by the absent parent, Mr C..., against the decision of the Child Support Appeal Tribunal sitting at Belfast, dismissing his appeal against the Child Support Officer's maintenance assessment dated 25 October 1995.
2. One of the matters considered by the Appeal Tribunal was whether the Child Support Officer had been correct in deciding that, in the calculation of Mr C...'s exempt income, allowance should not be made for a property/capital settlement. The relevant terms of the settlement in question, made by deed dated 3rd March 1993, were that the net proceeds of the sale of the matrimonial home, owned jointly by Mr C... and the parent with care, Mrs C..., should not be divided evenly between the parties; but that instead, Mrs C... would receive two-thirds and Mr C... one-third. The net proceeds came to £16,217.16, of which Mrs C... received £10,811.44 and Mr C... £5,405.72.
3. The provisions concerning property/capital settlements are to be found at regulation 9(1)(bb) of the Child Support (Maintenance Assessment and Special Cases) Regulations 1992, (the CS (MASC) Regs), and at paragraphs 1 and 10 of Schedule 3A thereto. So far as relevant, they are as follows:-

"Exempt income: Calculation or estimation of E

9.-(1) For the purposes of paragraph 5(1) of Schedule 1 to the

Order, the amount of E (exempt income of absent parent) shall,

subject to paragraphs (3) and (4), be the aggregate of the

following amounts -

(a) ...

(b) ...

(bb) where applicable, an amount in respect of a qualifying transfer

of property determined in accordance with Schedule 3A;

...

Schedule 3A

"Amount to be allowed in respect of transfers of property

Interpretation

1.-(1) In this Schedule -

"property" means -

(a) an estate in land; or

(b) a sum of money which is derived from or represents capital,

whether in cash or in the form of a deposit with -

(i) the Bank of England;

(ii) an authorised institution or an exempted person within

the meaning of the Banking Act 1987(a);

(iii) a building society incorporated or deemed to be

incorporated under the Building Societies Act 1986 (b);

(c) any business asset as defined in sub-paragraph (2) (whether

in the form of money or an estate in land or otherwise);

(d) any policy of insurance which has been obtained and retained

for the purpose of providing a capital sum to discharge a

mortgage or charge secured upon an estate in land which is

also the subject of the transfer (in this Schedule referred

to as an endowment policy);

"qualifying transfer" means a transfer of property -

(a) which was made in pursuance of a court order made, or a written

maintenance agreement executed, before 5th April 1993;

(b) which was made between the absent parent and the parent with

care or a relevant child;

(c) which was made at a time when the absent parent and the parent

with care were living separate and apart;

(d) the effect of which is that the parent with care or a relevant

child is beneficially entitled (subject to any mortgage or

charge) to the whole of the asset transferred; and

(e) which was not made expressly for the purpose only of

compensating the parent with care for the loss of any right

to apply for or receive periodical payments or a capital sum

in respect of that parent with care;

..."

4. At the hearing before the appeal Tribunal the Adjudication Officer argued that the property/capital settlement in question had correctly been left out of account because it was made "for spousal maintenance and not child maintenance". In his submission it was excluded by the terms of paragraph (e) of the definition of a "qualifying transfer" as set out above. The Tribunal did not accept this argument, but held that the settlement had properly been left out of account because the parent with care had only received two-thirds of the proceeds of the sale of the matrimonial home. In their view, in order to constitute a qualifying transfer it would have been necessary for Mrs C... to have been given the whole of such proceeds. In reaching their decision on this aspect of the case the Tribunal no doubt considered that they were applying paragraph (d) of the definition of "qualifying transfer", as set out above.
5. Having held that the property/capital settlement had correctly been left out of account, the Appeal Tribunal confirmed the Child Support Officer's decision and disallowed the appeal. In doing so it seems that they overlooked the final paragraph of the child Support Officer's written submission in which he had drawn attention to a minor error in the calculation of Mr C...'s net income, and had requested that the case be referred back to the Child Support Officer "to enable the appropriate corrections to be made."
6. Mr C...'s grounds of appeal to the Commissioner all concern the Tribunal's decision in relation to the property/capital settlement. He maintains that the legislation has been incorrectly interpreted and that there has been a miscarriage of justice.
7. Mrs P McCann, the Child Support Officer now concerned with this case, was invited to comment upon what was, at that stage, an application by Mr C... for leave to appeal against the Appeal Tribunal's decision. In her letter of reply dated 2 October 1996 Mrs McCann expressed the opinion that the Appeal Tribunal had erred in law in that (a) their reasons for stating that the absent parent was not entitled to a property/capital settlement allowance were incorrect, and (b) that they had failed to enquire adequately into whether the maintenance assessment was correct.

In Mrs McCann's submission the Tribunal had failed to identify the asset in question and had been wrong to hold that the whole of that asset had not been transferred. Under the terms of the agreement, Mrs C... received two-thirds of the net proceeds of the sale of the matrimonial home (£10,811.44), instead of the half (£8,108.58) to which she would otherwise have been entitled. The effect was that "the asset" which was being transferred was the sum of £2,706.86, and the whole of this had been received by Mrs C.... In Mrs McCann's view, there had been a "qualifying transfer" within the definition set out in paragraph 1(1) of Schedule 3A to the CS (MASC) Regs. She submitted however that, albeit for the wrong reason, the Tribunal had been right to hold that Mr C... was not entitled to any allowance in respect of the qualifying transfer. This was because paragraph 10 of Schedule 3A to the CS (MASC) Regs provides that, where the relevant amount of a qualifying transfer is less than £5,000, the amount to be allowed is nil. Mrs McCann further submitted that the Tribunal had erred in law in confirming the Child Support Officer's maintenance assessment, despite the fact that their attention had been expressly drawn to a minor error therein.

8. Following the grant of leave to appeal, Mrs McCann stated that she did not wish to add to her observations on the case, as set out in her letter of 2 October 1996.
9. Mr C... and Mrs C... have been given the opportunity of commenting upon Mrs McCann's written observations; but there has been no response from either of them.
10. Having considered this matter, I accept that in this case the Appeal Tribunal erred in law in the respects identified by Mrs McCann. For the reasons which she has given, I agree that the transfer effected by the agreement between Mr and Mrs C... dated 3 March 1993 was a "qualifying transfer", as defined in paragraph 1(1) of Schedule 3A to the CS (MASC) Regs, but that because the value of that transfer was less than £5,000, Mr C... was not entitled to any allowance in respect thereof in the computation of his exempt income. I should perhaps add that my decision on this issue is unaffected by Mr C...'s reference to the fact that Mrs C... also "got all the contents of the house". I do not know the value of the contents, or whether they were previously jointly owned by the parties, and I acknowledge that it might be possible to argue that the total value of the property received by Mrs C... exceeded £5,000. However, the agreement dated 3 March 1993 between Mr and Mrs C... is only concerned with the division of the net proceeds of the sale of the matrimonial home. There is no mention of the contents, and accordingly they do not fall to be considered in the calculation of the value of the "qualifying transfer". The Tribunal's reasoning was at fault; but they were nevertheless correct in holding that the claimant was not entitled to any allowance in respect of a property/capital settlement in the computation of his exempt income. I am further satisfied that the Appeal Tribunal erred in law in confirming the decision of the Child Support Officer. As I have indicated, I assume that they simply overlooked the reference in the Child Support Officer's written submission, to the minor error in the calculation of Mr C...'s net income. As Mrs McCann has pointed out, they should have found as a fact that there was an error in the calculation of the maintenance assessment; and I therefore make that finding.
11. For the reasons given in paragraph 10 above I allow this appeal, set aside the decision of the appeal Tribunal and refer the case to a Child Support Officer for correction of the error in the maintenance assessment calculation. In doing so, I confirm that Mr C... is not entitled to any allowance in respect of the qualifying transfer of property because the value thereof was less than £5,000.
12. Mr C... requested an oral hearing of his appeal; but having considered the circumstances of the case and the reasons put forward for the request I am satisfied that the case can properly be determined without a hearing. The request has therefore been refused.

(Signed): R R Chambers

CHIEF COMMISSIONER

6 May 1997