Northern Ireland - Social Security and Child Support Commissioners' Decisions

[1999] NISSCSC CSC4/99 (24 May 2000)

 


Decision No: CSC4/99

THE CHILD SUPPORT (NORTHERN IRELAND) ORDERS 1991 AND 1995

Appeal to the Child Support Commissioner

on a question of law from the decision of

Belfast Child Support Appeal Tribunal

dated 18 June 1999

(arising out of a hearing dated 18 May 1999)

DECISION OF THE CHILD SUPPORT COMMISSIONER

1. This is an appeal by the appellant, the father of the relevant child, against the decision of the Tribunal to the effect that the matter was to be referred back to the Child Support Agency for calculation of a fresh maintenance assessment based upon the appellant's gross income of £130,000 per annum. The Tribunal also found that the application for departure by the second respondent did not fail.
2. In this case, which is very complicated, I take the unusual course of setting out at length the submissions of Mrs McRory of the Decision Making and Appeals Unit, who has, with considerable industry and learning, dealt with all the factual and legal issues in this case. She has set out the facts of the case (including its history before the Adjudicating Authorities) the legal background and the errors that, in her submission, the Tribunal has made and has also dealt thoroughly with the grounds of appeal set out on behalf of the appellant.
3. However at this stage I consider it necessary to set out the findings of fact material to the Tribunal's decision which were as follows:-

"1. On 26.6.97 the appellant (...) made and effective application for a departure direction in respect of assets capable of producing income or higher income, diversion of income and lifestyle inconsistent with declared income. The application did not fail - Child Support (Northern Ireland) Order 1991 Article 28D(1) and regulation 8(1) the Department have referred the application to the Child Support Appeal Tribunal for determination under Child Support (Northern Ireland) Order 1991 Article 28D (1)(b).

2. [The appellant] has various assets including 15-16 acres of land, an out door menage with dressage facility, pool, hill track, 36 loose horse boxes, indoor riding school, catering facilities and viewing gallery and that these assets are measured in access of £10,000 after the deduction of any amounts owing under any mortgage or charge upon these assets. This is an asset which is producing a limited income far below that which is declared.

3. [ The appellant] has the ability to control the amount of income he receives from the facilities mentioned in the previous paragraph and he has unreasonably reduced the amount of his income which would otherwise fall into account Regulation 7 or 8 of the Maintenance Assessment and Special Cases Regulations by diverting it to other persons or for purposes other than the provision of such income for himself.

4. The Tribunal cannot make a determination as to whether [the appellant] lives a lifestyle that is inconsistent with his income due to the absence of sufficient information thereon from either [the appellant] or [the second respondent]

5. The assets owned and controlled by [the appellant] are capable of producing an income of £100,000 per annum a (sic) net of income tax."

4. The Tribunal gave the following reasons for its decision:-

"1. The Tribunal considered all the evidence from both parties and accept that on the balance of probabilities the evidence submitted by [the second respondent] to be preferred so that the above findings of fact could be made.

2. [The appellant] did not attend to give evidence in spite of being requested by the Tribunal to do so as we considered there may have been an advantage gained from listening to his evidence. He elected not to attend.

3. Having looked at the more recent information given by [the second respondent] as to the numbers of horses, and their identities as they appear in the various race cars and newspapers cuttings and having considered further, the letter of McC... & Co dated 29 August 1997 addressed to the Child Support Agency we accept that [the appellant] is a very successful trainer and all the indications clearly... point to this. As a successful trainer his services will be sought after by many horse owners.

4. We also consider that many of these horse owners are truly successful in their own fields in that they can afford the luxury of owning and having a race horse trained. This is not a sport for the poor.

5. We consider that on the balance of probabilities [the appellant] is training more horses that he cares to admit and as a consequence earns money which he is not declaring and we consider these earnings to be in the region of £100,000 per annum, net of income tax. As these earnings are not declared, income tax therefore should not be calculated or taken into consideration when assessing a net income figure, this figure is important for the purposes of calculating his maintenance assessment under the departure regulations. For the purposes of assessing a gross income figure we consider that the figure £130,000 may be used. This is fair and reasonable figure based on the evidence which we have herd (sic). This figure is arrived at by calculating and average of 18 horses per week over a year = £83,600 and income from shows etc totalling £36,400.

6. We do not accept [the second respondent's] statement that up to 40 horses may have been in the stables all the time. It is likely that a number of horses were "in and out of training" we have taken this into consideration in assessing our figure of £130,000 gross income it therefore follows that [the appellant] had available to him more persons to carry out of work at his stables than he is prepared to admit. In particular we would cite the newspaper article referring to the stable lass B… V… from the News Letter, March 24 1999.

7. We consider it unlikely that [the appellant] only received £1.00 by way of income from D… Riding School for the number of events that were hosted in his premises. It is now also clear to us that he hosts other events regarding the dressage trials and we consider that he receives an income from these."

5. The unanimous decision of the Tribunal was in the following form:-

"Matter to be referred back to the Child Support Agency for calculation of a fresh maintenance assessment based upon [the appellant's] gross income of £130,000 per annum and that the application for departure by [the second respondent] does not fail."

6. A letter dated 8 July 1999 signed by the clerk to the Appeal Service was received by the parties in answer to a letter from the Child Support Officer. This letter stated that the Chairman had asked the clerk to confirm that the £100,000 net figure referred to in paragraph 5 of the reasons for decision should be used in the assessment calculation rather than a gross figure of £130,000. The status of this letter, which is not a formal correction of the decision, is somewhat doubtful. However, the representatives of the three parties to this appeal have taken no point about this letter and, in all the circumstances, I do not consider that it is necessary to assess the validity of this letter, as it is not relevant to my decision making process in this case.
7. The appellant, who is represented by E... McE... & Co, Solicitors, sought leave to appeal on the following grounds

"No reasonable tribunal could have come to the conclusions reached on the evidence given. The tribunal could not be satisfied on the evidence before it that it was just and equitable to make a direction for departure since any assessment based on an income of £100,000 per annum did not take into account :

The true value of the absent parent's property and encumbrance thereof.

The accounts submitted in evidence and the oral evidence of Mr. S... accountant and Mr. Mc... bookkeeper. The reasoning of the tribunal is flawed in that they have made a calculation of gross income which is wrong. They say the number of horses being trained weekly is 18 and that [the appellant's] income is £100 on each horse. They then say that the income is £83,600. This does not take account of any business expenses incurred in training horses.

The tribunal gives a figure of £36,400 as an income from "shows etc". This gives no indication of how that sum is arrived at. It is not clear whether this figure has been given as a figure which includes business costs in running the "shows etc". It does not make clear what is meant by "shows etc".

The tribunal reached its conclusions without having heard sufficient evidence to support those conclusions.

The conclusions reached by the tribunal are not reasonable given the evidence heard by the tribunal."

8. Leave to appeal was granted by the Chairman on 2 September 1999.
9. Having considered the circumstances of the case I am satisfied that the appeal can properly be determined without a hearing.
10. By letter dated 15 December 1999, Mrs McRory, on behalf of the first respondent made the following submission (already referred to at paragraph 2 above).

"... The issue before the Commissioner is whether the Tribunal was correct in deciding that a Child Support Departure Direction applied on the basis that [the appellant] has a net income of £100,000 per annum.

Facts of the Case

1. On 26 June 1997 [the second respondent] the person with care, applied for a departure direction from the current maintenance assessment made in respect of [the appellant], the absent parent, on the grounds that [the appellant] had:

Assets which were capable of producing higher income

Diverted income to another source

A lifestyle which was inconsistent with his declared income.

Evidence to support [the second respondent's] application are contained in her application form. (...)

2. The Department gave the application a preliminary consideration and did not reject it.

3. A letter dated 22 July was received from [the second respondent's] solicitors to confirm that their client has no documentary evidence to substantiate the claims made in the departure application form but pointed out that [the second respondent] could categorically state that [the appellant] had recently been on a two week holiday in Majorca and that this would appear to be inconsistent with his "means assessment". ..)

4. In a letter dated 29 August 1997 [the second respondent's] solicitors McC... & Company stated on behalf of their client that the land referred to in the application was at [the appellant's] home address from where he operates his business. The letter also listed the names of 18 people who allegedly left their horses with [the appellant] and listed the names of 25 horses [the appellant] allegedly trained "in recent times" and stated that [the appellant] was in a financial position to carry out renovations and building work. (...)

5. In response to the application [the appellant's] solicitors E... McA... & Co forwarded a copy of their client's income and expenditure account for the year ended 5 April 1995 which shows a net profit of £9,674.78. (...)

6. In a letter dated 31 October 1997 from [the second respondent's] solicitors there are counter arguments about a swimming pool for horses in [the appellant's] premises. There is also statement about a Miss F... alleging that monies from entries for shows at [the appellant's] indoor school are banked in an account in her name. It is also stated that [the appellant] has a 26 stable yard which is fully occupied, counter arguing a statement from [the appellant] that he has five horses. The names of five people who allegedly assist in riding out the horses are also listed. There is also allegations that [the appellant] deals in cash with his clients to avoid any VAT claims. (...)

7. The Department, rather then deciding the application referred the matter to a Child Support Appeal Tribunal to determine in accordance with Article 28D of the Child Support (NI) Order. (...)

8. An oral hearing of the application took place on 8 December 1998. [The second respondent] was represented by Ms E... from M... McC... & W... solicitors. [The appellant] was represented by Miss McK... from E McA... & Company solicitors. Also present as witnesses for [the appellant] were Mr. Mc..., book-keeper and Mr. J S... from S... and Company Accountants. [The respondent] was present, [the appellant] was not.

9. At the hearing further accounts were submitted on behalf of [the appellant] i.e. for the year ended 5 April 1996 showing a net profit of £7,478.71 and draft accounts for the 19 month period ended 31 October 1998 showing a net profit of £9,316. The hearing was adjourned due to time constraints. The Tribunal asked the following evidence to be provided at the next hearing:

Full details of the Department of Agriculture grant including any business plans proposals and copy application forms.

All documentation including details of registration with jockey club, Trainer's licences and related matters.

All documentation indicating associations with the governing authorities for the Pony Club, all Pony Clubs associated with the absent parent's riding school including any agreements which may have been executed between them.

All relevant documentation concerning the formation trustees, committee members and office holders of D... Riding Club.

[The appellant's] original passport.

Originals of any race cards or copies of any race entries for any horse that is entered for competition at any race course in Ireland over the last 24 months, from either party.

The Tribunal also expressed a desire to hear from [the appellant] at the next hearing.

10. In response to the Tribunal's request [the appellant's] solicitors wrote to the Independent Tribunal Service on 15 January 1999 and stated they were instructed as follows:

[The appellant] is unable to supply the information requested in the first two points above but a copy of his trainer's licence was enclosed.

[The appellant] is not registered with a pony club.

A copy of the argument between [the appellant] and D... Riding club was enclosed.

A copy of [the appellant's] passport was enclosed, it was confirmed that there are no endorsements on the passport.

The accounts for 1994/95 were the only ones prepared.

A copy of [the appellant's] bank statement was enclosed.

11. [The second respondent's] solicitor submitted two letters to the Independent Tribunal Service on 2 March 1999 in response to the earlier Tribunal hearing. The first letter had a lot of enclosures from newspapers with details of various races. The second letter referred to the first and gave some information on Point to Point cards and listed 12 horses and their owners which are allegedly trained by [the appellant].

12. The Tribunal Service listed the case for hearing again on 9 April 1999. [The appellant] requested a postponement as he was due to attend a meeting on that date, the request was refused by the Chairman. On receipt of a letter from [the appellant's] solicitor on 8 April 1999 a further request for postponement was made and granted.

Tribunal Hearing

13. The Tribunal hearing took place on 18 May 1999. [The appellant] was unable to attend due to work commitments but was represented by Miss McK..., Counsel for E McA... & Co, Solicitors. [The second respondent] was present but was not represented.

14. At the hearing Ms McK... submitted a letter from [the appellant] in which he stated the position regarding various horses he trained and those which he did not. The letter enclosed a bank statement for D... Riding Club which he claims to have no financial involvement in, copies of wages sheets of the two employees which he states were employed by him at the time of the previous hearing and P60's to refer. [The appellant] also explained that he ceased to be a sole trader on 1/11/98 and became an employee of D... Equestrian Centre Ltd. On the setting up of the new company a third employee was taken on, on a part time basis. He further stated that from Friday 14 May 1999 one employee was due to cease to be employed and that since the introduction of the minimum wage the company could not afford to pay the employees for a full week's work and the employees' hours of work had been reduced accordingly. The Tribunal also made very lengthy details of the oral evidence of [the second respondent] and Ms McK.... The Tribunal made the following findings of fact:

15. [Mrs McRory quoted the Tribunal's findings of fact, which have already been set out in substance by me at paragraph 3]

16. The Tribunal having made the above finding of fact then decided that the mater (sic) should be referred back to the Child Support Agency for calculation of a fresh maintenance assessment based upon a gross income of £130,000 per annum.

17. On receipt of the decision the Child Support Agency asked the Tribunal for clarification of the decision as they require a net income figure rather than gross income. It was confirmed that the £100,000 net figure referred to in paragraph 5 of the "Reasons for Decision" should be used rather than the gross figure of £130,000.

18 [The appellant] has raised a number of points in his appeal to the Commissioner, I propose to address those points later in my submission. At this point I consider it necessary to look at the relevant legislation governing departure directions and the full record of proceedings of the Tribunal's decision.

Background to Child Support Departure Directions

19. Articles 28A - I and Schedules 4A and 4B to the Child Support (Northern Ireland) Order 1991 ("the 1991 Order") gives the Department or a Tribunal discretion to depart from the standard formula for the assessment of child support in certain specified cases. In deciding applications referred to a Tribunal, the Tribunal has the same powers and is subject to the same duties as the Department [Article 28D(3)]. The regulations made under the 1991 Order are The Child Support Departure Directions and Consequential Amendments Regulations (Northern Ireland) 1996, "the Departure Regulations".

20. The Department or Tribunal may give a direction to depart from the standard formula where it is satisfied that the case is a specified case and, having considered all the evidence available, in particular the financial circumstances of both parents and the welfare of any child likely to be affected by the direction, so that a direction would be just and equitable [Article 28F].

21. The first ground in the application for a departure direction was on the basis that [the appellant] had assets capable of producing income or higher income. Regulation 23 of the Departure Regulations deals with this issue and states the following:

Assets capable of producing income or higher income

"23. - (1) Subject to paragraph (2), a case shall constitute a case for the purposes of paragraph 5(1) of Schedule 4B to the Order where -

(a) the Department is satisfied that any asset in which the non-applicant has a beneficial interest, or which he has the ability to control -

(i) is capable of being utilised to produce income but has not been so utilised;

(ii) has been invested in such a way that the income obtained from it is less than might reasonably be expected;

(iii) is a chose in action which has not been enforced where the Department is satisfied that such enforcement would be reasonable, or

(iv) has not been sold where the Department is satisfied that the sale of the asset would be reasonable;

(b) any asset has been transferred by the non-applicant to trustees and the non-applicant is a beneficiary of the trust so created; or

(c) any asset has become subject to a trust created by legal implication of which the non-applicant is a beneficiary.

(2) Paragraph (1) shall not apply where -

(a) the total value of any asset referred to in that paragraph does not exceed £10,000 after deduction of the amount owing under any mortgage or charge on that asset; or

(b) the Department is satisfied that any asset referred to in that paragraph is being retained by the non-applicant to be used for a purpose which the Department considers reasonable in all the circumstances of the case."

22 I submit that the Tribunal appear to have decided that sub paragraph (a)(ii) is applicable in this case, paragraph 2 of its findings refers (paragraph 15 of this submission). The Tribunal had due regard to sub-paragraph (2)(a) of regulation 23 which provides that a departure direction under that regulation shall not apply where the total value of the asset referred to does not exceed £10,000. The Tribunal listed all the assets owned by [the appellant] and although it was not specific regarding the amount charged against the business in the form of loans etc, the Tribunal did have details of bank accounts showing the loan account owing £38,461.83 and the business account showing a debit of £7,883.83 at the time the departure application was made (26 June 1997). As the assets owned by [the appellant] are substantial, I submit that in finding that the net value of the assets of the business exceeded £10,000, the Tribunal has not erred in that respect.

23. Although the Tribunal did not make a specific finding regarding regulation 23(2)(b), I submit that it did not err in failing to do so as it was obvious this provision did not apply. I submit that regulation 23(2)(b) would apply for example where a parent has money in a non-interest bearing account, which has been obtained from the sale of a home where it is the clear intention to use the money to buy a new home.

Error in Law

24. In the final sentence of paragraph 2 of its findings the Tribunal has stated:

This is an asset which is producing a limited income far below that which is declared."

I respectfully submit that the Tribunal has erred in law by failing to make clear findings of fact with regard to regulation 23. It is difficult to understand whether the Tribunal was saying that the business was producing more income than that which he declared, or if the Tribunal was saying that the business was producing less income than could be expected. The wording in paragraph 5 of the Findings of Fact state (sic):

"The assets owned and controlled by [the appellant] are capable of producing (my emphasis) an income of £100,00 (sic) per annum net of income tax."

25. In paragraph 5 of the Reasons for the Decision it is stated;

"[The appellant] is training more horses than he cares to admit and as a consequence earns money which he is not declaring (my emphasis) and we consider these earnings to be in the region of £100,000 per annum, net of income tax."

26. The above shows on the one hand what the assets are capable of producing and on the other hand what the assets are producing. If it is accepted that the Tribunal did decide that sub-paragraph (a)(ii) was appropriate then I submit that this sub-paragraph can only apply where the non-applicant has invested his assets in such a way that it produces less income than could reasonably be expected. The question of reasonableness was for the Tribunal to address which I submit it has failed to do. I further submit that in reaching any findings on regulation 23(a)(ii) the Tribunal would have to consider what the asset has obtained, it would not for instance apply where there is undisclosed income. I submit that for this ground of departure to apply it is not necessary to show that the non-applicant deprived himself of income with the deliberate intention of reducing his liability for child support but the Tribunal would have to consider what income the asset is capable of producing. Where an asset is actually producing less income than it is capable of producing a departure direction under regulation 23 may be appropriate. I submit the Tribunal's findings fall short of what is required by this regulation. I further submit that where a departure direction is appropriate under regulation 23 the Tribunal had insufficient evidence to follow through the effect of such a direction in accordance with regulation 40(2)(b) which states:

Effect of a departure direction in respect of additional cases

"40. - (1) This regulation applies where a departure direction is given for an additional case falling within paragraph 5 of Schedule 4B to the Order.

(2) In a case falling within regulation 23(1)(a) (assets capable of producing income or higher income), subject to paragraph (4), the net income of the non-applicant shall be increased by the amount specified in that departure direction, being the whole or part of an amount calculated by applying interest at the same rate as that prescribed for judgments by Order 42 rule 9 of the Rules of the Supreme Court (Northern Ireland) 1980(a) at the date on which the departure direction is given to -

(a) any monies falling within regulation 23(1)(a);

(b) the net value of any asset, other than monies, falling within regulation 23(1)(a), after deduction of the amount owing on any mortgage or charge on that asset, less any income received in respect of that asset which has been taken into account in the calculation of the current assessment."

27. That regulation provides that the departure direction should determine the value of the assets in question, deduct any outstanding mortgage and the income received from the business already into account in the calculation of the current maintenance assessment, and then apply the statutory rate of interest to the net value of the assets. Although it was reasonable to conclude that the net value of the asset was in excess of £10,000, there was no evidence regarding the actual value before making deductions for mortgages etc. In the alternative, if it is accepted that the Tribunal was referring to actual income obtained as opposed to what the asset is capable of producing, then I submit that a departure direction under regulation 23 would not be appropriate.

Diversion of Income

28. The second ground in the departure application was that [the appellant] diverts income to another source. Regulation 24 deals with this issue and states the following:

Diversion of income

"24. A case shall constitute a case for the purposes of paragraphs 5(1) of Schedule 4B to the Order where -

(a) the non-applicant has the ability to control the amount of income he receives, including earnings from employment or self-employment and dividends from shares, whether or not the whole of that income is derived from the company or business from which his earnings are derived; and

(b) the Department is satisfied that the non-applicant has unreasonably reduced the amount of his income which would otherwise fall to be taken into account under regulation 7 or 8 of the Maintenance Assessments and Special Cases Regulations by diverting it to other persons or for purposes other than the provision of such income for himself."

29. In paragraph 3 of the findings of fact the Tribunal stated:

"[The appellant] has the ability to control the amount he receives from the facilities mentioned in the previous paragraph and he has unreasonably reduced the amount of his income which would otherwise fall to be taken into account Regulation 7 or 8 of the Maintenance Assessment and Special Cases Regulations by diverting it to other persons or for purposes other than the provision of such income for himself."

30. In paragraph 7 of its reasons for the decision the Tribunal stated:

"We consider it unlikely that [the appellant] is only receiving £1.00 by way of income from D... Riding school for the number of events that were hosted in his premises. It is also clear that to us that he hosts other events regarding the dressage trials and we consider that he receives an income from these."

Error of Law

31. I submit that in considering if a departure direction was appropriate under regulation 24 the Tribunal was correct in determining that [the appellant] had the ability to control the amount of money he received from his business as he is the sole proprietor, the Tribunal was also at liberty to question the fact that he only received £1.00 per annum for the lease of premises to D... Riding School. I respectfully submit however that the Tribunal erred in law in failing to be more specific in its finding of fact with regard to diversion of income and the extent to which income was diverted. I submit that where it is decided that regulation 24 applies the Tribunal should have gone on to consider regulation 40(4) which states:

"(4) In a case to which regulation 24 (diversion of income) applies, the net income of the non-applicant who is a parent of a child in respect of whom the current assessment is made shall be increased by the amount specified in that departure direction, being the whole or part of the amount by which the Department is satisfied that that parent has reduced his income.."

This provides that the amount of the departure direction shall be the whole or part of the amount which the Tribunal is satisfied that the absent parent has reduced his income by. I would further submit that if the diversion of income is from more than one source it should be clear from the direction how much is attributed to each source.

Life-style inconsistent with declared income

32. The third and final ground in the application was on the grounds that [the appellant's] life-style was inconsistent with his declared income. Regulation 25 deals with this and states:

Life-style inconsistent with declared income

25. - (1) Subject to paragraph (2), a case shall constitute a case for the purposes of paragraph 5(1) of Schedule 4B to the Order where the Department is satisfied that the current assessment is based upon a level of income of the non-applicant which is substantially lower than the level of income required to support the overall life-style of that non-applicant.

(2) Paragraph (1) shall not apply where the Department is satisfied that the life-style of the non-applicant is paid for -

(a) out of capital belonging to him; or

(b) by his partner, unless the non-applicant is able to influence or control the amount of income received by that partner.

(3) Where the Department is satisfied in a particular case that the provisions of paragraph (1) would apply but for the provisions of paragraph (2)(b), it may, whether or not any application on that ground has been made, consider whether the case falls within regulation 27".

33. In paragraph 4 of its finding of fact the Tribunal recorded:

"The Tribunal cannot make a determination as to whether [the appellant] lives a lifestyle that is inconsistent with his income due to the absence of sufficient information thereon from either [the appellant] or [the second respondent]."

34. I submit it was incumbent on the Tribunal to determine the application under regulation 25, in failing to do so I respectfully submit the Tribunal has erred in law. Article 28D of The Child Support (Northern Ireland) Order 1991 deals with the determination of applications and states:

"28D - (1) Where an application for a departure direction has not failed, the Department shall -

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

(b) refer the application to a child support appeal tribunal for the tribunal to determine in accordance with those provisions.

(2) For the purposes of paragraph (1), an application for a departure direction has failed if -

(a) it has lapsed or been withdrawn; or

(b) the Department has rejected it on completing a preliminary consideration under Article 28B.

(3) In dealing with an application for a departure direction which has been referred to it under paragraph (1)(b), a child support appeal tribunal shall have the same powers, and be subject to the same duties, as would the Department if it were dealing with the application."

35. In this case as the application was referred to a Child Support Appeal Tribunal, the Tribunal has the same powers as the Department and should have determined all the grounds of the application accordingly. As decided in GB Commissioner's decision CCS/846/1998 the onus of establishing that a departure direction applies rests with applicant, in this case [the second respondent]. It is a matter for the Tribunal to consider all the evidence before it and either request more evidence or make a determination based on the available evidence. The Tribunal in this case made every effort to obtain all the relevant evidence. If the Tribunal decided that the applicant had not discharged the burden of proof then I submit it should have determined that a direction under regulation 25 was not appropriate.

Further error in law - Effective date

36. I would further submit that the Tribunal erred in law in failing to state the date the Departure Direction was effective from. In this case the appropriate legislation relating to the effective date is Regulation 47 of the Departure Regulations which provides:

"Transitional provisions - maintenance assessment in force prior to 2nd December 1996

47.Where

(a) maintenance assessment was in force on 2nd December 1996; and

(b) an application is made by any of the persons with respect to whom that assessment was made on the grounds set out in Article 28A(2)(a) of the Order (the effect of the current assessment) on or after that date and before 2nd December 1997, and departure direction given in response to that application shall take effect on the first day of the first maintenance period commencing on or after 2nd December 1996".

37. The papers before the Tribunal show that a maintenance assessment has been in force since Wednesday 10/04/96. The departure application was received on 26/06/97 therefore the effective date of the application is Wednesday 04/12/96.

Other issues

38. In paragraph 35 of my submission I indicated that the onus of proof rests with the applicant, however notwithstanding that the Tribunal in reaching a determination on the other grounds correctly weighed up all the available evidence and was within its rights to decide that preferred the evidence of [the second respondent] in favour of that submitted by or on behalf of [the appellant].

Ground of Appeal to the Child Support Commissioner

39. [The appellant] applied for leave to appeal to the Child Support Commissioner against the Tribunal's decision. The Chairperson granted [the appellant] leave to appeal. His grounds of appeal are as follows:

No Tribunal could have come to the conclusion reached on the evidence given. The Tribunal could not be satisfied on the evidence before it that it was just and equitable to make a direction for departure since any assessment based on an income of £100,000 per annum did not take into account:

The true value of the absent parent's property and encumbrance thereof.

The accounts submitted in evidence and the oral evidence of Mr. S... and Mr. Mc... bookkeeper.

The reasoning of the Tribunal is flawed in that they have made a calculation of gross income which is wrong. They say the number of horses being trained weekly is 18 and that [the appellant's] income is £100 on each horse. They then say that the income is £83,600. This does not take account of any business expenses incurred in training horses.

The Tribunal gives a figure of £36,400 as an income from hows etc". This gives no indication of how that sum is arrived at. It is not clear whether this figure has been given as a figure which includes business costs in running the "shows etc". It does not make clear what is meant by "shows etc".

The Tribunal reached its conclusion without having heard sufficient evidence to support those conclusions.

The conclusions reached by the Tribunal are not reasonable given the evidence heard by the Tribunal.

40. I would now like to address the points in the order in which they are listed above.

(a) As indicated earlier in my submission where a departure direction is appropriate under regulation 24 (diversion of income), in order to give effect to such a direction it is necessary to establish the value of the non-applicant's assets, I therefore agree with the point raised.

(b) The evidence of Mr. S... accountant and Mr. Mc... bookkeeper is recorded and there is nothing to suggest that the Tribunal did not take account of that evidence, I submit the Tribunal did not err in this respect.

(c) I accept that the Tribunal's calculation of income is incorrect. With regard to the £83,600 arrived at in paragraph 5 of the "Reasons for the decision" it would appear that the Tribunal have accepted the evidence put forward by [the second respondent] that training fees for horses are £100 per week plus vat, plus travel, plus vet bills. The Tribunal took an average of 18 horses over the year i.e. 18 x £100 = £1800 x 52 = £93,600, apparently having miscalculated by one digit mounting to £10,000. It is clear that using that basis the Tribunal did take account of some of the expenses as it was suggested that the travel etc was charged for in addition to the flat rate of £100 per horse, however I accept that the Tribunal erred in failing to take account of other expenses such as employees wages.

(d) I accept the point made with regard to the Tribunal failing to show how it arrived at the figure of £36,400. I respectfully submit this amounts to an error in law, it is not sufficient to say that this figure is from "shows etc". I would also submit that when taking account of income, expenses need to be considered. In any case as I have submitted earlier each ground of the application needs to be considered separately and where it is appropriate to issue a direction the relevant regulation needs to be considered.

(e) Again, as the evidence regarding the value of the assets was not known I agree that the Tribunal erred in law in this respect.

(f)I have no further comment to make on the conclusions reached by the Tribunal.

Conclusion

41. To conclude I submit that Tribunal has erred in law for the reasons stated above. If the Commissioner accepts my submission he may decide to refer the matter back to a differently constituted Tribunal to make the necessary findings of fact and determine the case accordingly."

11. The second respondent who is represented by M... McC... & W..., Solicitors, accepted through her solicitors by letter dated 11 January 2000 that the case ought to be referred back to a differently constituted Tribunal although the point was made that the second respondent continues to stand "by the representations made by her to the original constituted Tribunal".
12. The appellant, by means of his solicitor's letter dated 19 January 2000, also made it clear that Mrs McRory's submissions were accepted in addition to his own grounds of appeal and also submitted that the case should be referred back to a differently constituted Tribunal.
13. I am satisfied that the appellant through his solicitor has accepted all the submissions made by Mrs McRory save that there is an issue in one point which I will deal with below. It seems relatively clear that Mrs McRory has accepted all the points made on behalf of the appellant, except the point already referred to, and in addition has advanced further arguments to which I have already referred. It also is evident that the second respondent through her solicitor has not taken issue with any of the appellant's or Mrs McRory's submissions.
14. The one point at issue is that the appellant has submitted that the accounts and the oral evidence of Mr S..., Accountant, and Mr Mc..., Bookkeeper, were not properly taken into account. However the evidence of the Accountant and the Bookkeeper has been specifically recorded and, I do not accept that the Tribunal has not taken it into account as there is nothing in the case to suggest that it has not been taken into account. I therefore agree with Mrs McRory that the Tribunal has not rred in law in this respect.
15. However, for the reasons stated by Mrs McRory at sub-paragraphs 24, 26, 27, 31, 34, 35, 36, and 40(a)(c)(d)(e) of paragraph 10 of this decision, I conclude that the Tribunal has erred in point of law. At the same time I would make clear my sympathy for the Tribunal hearing the present reference as it had a most difficult task with a most complicated set of facts in light of most intricate and difficult legislation before coming to its decision. However in the circumstances I must allow the appeal, set the Tribunal's decision aside and refer the case back to a differently constituted Tribunal to redetermine the case in accordance with Article 28D of the Child Support (Northern Ireland) Order 1991. I hope that a Departmental Representative will be in attendance at any such Tribunal hearing as representation will make it less likely that a further appeal will be required in this case.

(Signed): J A H Martin

Chief Commissioner

24 May 2000