R(CS) 5/99
(Secretary of State for Social Security v. Henderson)

Mr. P. L. Howell QC	CCS/14368/1996
31.10.97 

CA (Brown, Gibson and Schiemann LJJ)
18.11.98

Maintenance assessment - qualifying transfer - meaning of “property” - whether an allowance should be made for the transfer of a part beneficial interest in property
The absent parent claimed an allowance under Schedule 3A of the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 for the transfer of part of his interest in the former matrimonial home pursuant to a divorce court order made before 5 April 1993. The property had been in the joint beneficial ownership of the two spouses so that their interests before the court order were of equal value. The order, made by consent, provided for the outright transfer of a further 20% of the beneficial interest to the parent with care, increasing her interest to 70% of the value. A further 10% was initially transferred to her but recoupable by the absent parent if he continued to pay the mortgage instalments on the property, and the remaining 20% was retained by him. It was common ground that the transfers to the parent with care were not made expressly for the purpose only of compensating her for maintenance rights in respect of herself. The question arose whether the transfer of a part beneficial interest met the condition in Schedule 3A paragraph 1(1)(d), that the effect of a “qualifying transfer” must be that the parent with care is beneficially entitled to the whole of the asset transferred.
The tribunal accepted the contention of the child support officer that the allowance was not applicable to a transfer of a part beneficial interest, as the condition required the whole beneficial interest in the property itself to be made over by the transfer. The Commissioner reversed this, holding that a part beneficial interest in real property or its proceeds of sale was an asset transferable in its own right and that there was a qualifying transfer of the 20% share transferred outright to the parent with care: the further 10% did not meet the condition as she did not become entitled to it absolutely. The “qualifying value” under the formula in Schedule 3A was accordingly half the value of 20% of the net equity subject to a due proportion of the mortgage debt on the property. The Secretary of State, who had intervened in the proceedings, appealed to the Court of Appeal on the ground that condition (d) could only be met where the entire beneficial interest in the property became vested in the parent with care by virtue of the transfer.
Held, dismissing the appeal and confirming the qualifying transfer of 20%, that:
1.	“asset” in condition (d) includes an undivided share or interest in land;
2.	the condition requires only that the parent with care becomes entitled to the whole of the asset transferred, not some larger asset of which it forms part;
3.	the parent with care was “entitled to the whole” of the 20% share transferred to her outright, but not the further 10% where the transfer was only conditional. 
____________________________________________________________________

DECISION OF THE CHILD SUPPORT COMMISSIONER
1.	My decision is that the child support appeal tribunal were wrong to direct in their decision of 7 March 1996 that no allowance should be made to the absent parent for the transfer of a share in the former matrimonial home under the court order dated 19 January 1990. I set the decision aside and exercise the powers in s. 24(3) Child Support Act 1991 to substitute my own decision. This is to remit the case to the child support officer to recalculate the assessment from 18 April 1995 making allowance for the transfer as a qualifying transfer under Schedule 3A Child Support (Maintenance Assessments and Special Cases) Regulations 1992 SI No. 1815 to the extent explained below, and in all other respects giving effect to the directions of the tribunal.
2.	This case concerns the maintenance for a young man now aged 16 whose parents divorced when he was seven. The appeal against the tribunal’s decision on the amount of his maintenance is brought by his father, who appeared and conducted his case in person at the oral hearing before me. The respondents were (1) the child support officer, who appeared by Daphne Thomas of the DSS solicitor’s office; (2) the boy’s mother, who sent in written submissions supporting his father’s appeal; and (3) the Secretary of State, who had applied to be joined as a separate respondent and appeared by Mark Shaw of Counsel, instructed by the solicitor to the Department of Social Security.
3.	Both parents obviously behaved well at the time of the divorce, and the settlement between them about the care and access for their son and on financial matters was an amicable one. This case concerns the impact of the child support legislation on the financial arrangements agreed and implemented under a court order dated 19 January 1990. The order itself was in evidence before the tribunal and a copy without the usual confusing obliterations is at pages 160‑162 of the appeal file. It recited that the two former spouses acknowledged its provisions to be accepted in full and final settlement of all claims they might have against each other for both capital and income or other property adjustment, and that the contents of the family home where the mother and son were continuing to live had been equitably divided, the father undertaking to pay the mortgage instalments, premiums on an endowment policy and all or most of the next two years’ gas, telephone and electricity bills. On those acknowledgements and undertakings, it was ordered by consent that:
1.	“The property continue to be held by the parties on trust for sale so that it shall be used by the [mother] as a house for herself and her dependants.”
2.	The terms of the trust for sale were to be that the mother was to have the full use, occupation and benefit of the property until sale, and that the trust for sale was not to be enforced until the happening of the first of a list of events including her death, remarriage or choosing to move, or the son attending the age of eighteen.
3.	On sale of the property the proceeds were to be applied in discharging the mortgage and subject to that divided between the father “as to his appropriate share as hereinafter defined” and the balance to the mother.
4.	The “appropriate share” was to be a percentage which would vary according to a formula, as follows:
“ (i)	20% from the date hereof until 31 August 1989
(ii) 	21% on 1 September 1989 and increasing thereafter on the first day of each month at the rate of 1/12 of 1% until sale or other disposal of the property in accordance with the terms hereof.”
with a provision that the change in percentage would be frozen if at any time the mother took over responsibility for the mortgage.
5.	The mother was given an option to buy out the father’s share at any time.
6.	The father was to pay monthly periodical maintenance to the son at the rate of 8% of his own gross salary rising to 10% until the son was 17 or later ceased to be in full‑time education.
7.	The father was to pay the mother “periodical payments at the rate of 5p. per annum or until further order.”
8.	On maturity of the policy the proceeds were to be divided two‑thirds to the father and one‑third to the mother.
4.	These terms were implemented and adhered to until September 1993 when the mother was required to make a maintenance application under s. 6 Child Support Act 1991 as she was claiming income support. This resulted in a maintenance assessment which it is now common ground should have become effective two days after it was actually made (and not earlier) as there was already a court maintenance order in force. It is also common ground that some corrections to the assessment are needed, and the tribunal’s careful and thorough decision of 7 March 1996 (at pages T137‑141) dealt with a number of issues on which directions were needed for the recalculation.
5.	The only question still in issue on the appeal to me is whether the tribunal were right to direct that no adjustment should be made to the father’s “exempt income” under Schedule 3A to the maintenance assessments regulations for any of the transfers and payments he made pursuant to the 1990 court order. This subdivides into: (1) whether there were any payments other than the transfer of beneficial interest in the house that could count under Schedule 3A; (2) whether that transfer could be a “qualifying transfer” as defined in Schedule 3A paragraph 1(1) or was excluded by sub-para. (d) because it was only partial; (3) whether sub‑para. (e) excluded it anyway as being for the mother’s own maintenance only; and (4) to the extent (if any) that it did count as a qualifying transfer, how its qualifying value should be calculated under Schedule 3A paragraph 4.
6.	The first question depends on the meaning of “property” in paragraph 1(1) of Schedule 3A. This bears a restricted meaning so that the only property and capital transfers which are allowed to affect the calculation of exempt income are those of
(a)	a legal estate or an equitable interest in land;
(b)	a sum of money derived from or representing capital, in cash or on deposit with an authorised financial institution;
(c)	a business asset, as defined; or
(d)	a mortgage endowment policy covering an estate or interest in land which is also the subject of the same transfer.
7.	The father seeks to argue that the “property” he is entitled to have taken into account under Sch 3A includes not only the beneficial interest in the house taken by the mother under the order but also the money he spent subsequently on keeping up the mortgage and paying the household bills, plus the endowment policy whose proceeds were in fact later divided between the two parents in accordance with the order.
8.	In my judgment the tribunal were right to reject these contentions. It is quite clear that the schedule is concerned with once for all capital transfers only. The reference in paragraph (b) to money “derived from” capital does not extend the definition to money used in paying mortgage instalments or regular household bills on a continuing basis, even if the money used from time to time happens to come out of a bank or building society deposit account. Nor is there any way in which a transfer of goods and chattels such as the family car or furniture on a divorce can be got within the definition of “property”, which is confined to the very restricted list of items at (a)‑(d) inclusive and leaves out many other forms of property (for example shareholdings) altogether. The transfer of an endowment policy can qualify under sub-para (d) only if specific conditions are met: it is not entirely clear whether this policy was the mortgage‑linked kind that alone could qualify, but in any case the order provided only for the transfer of a part beneficial interest in the ultimate proceeds which I do not think meets the condition as stated in (d).
9.	The only real question, it seems to me, is whether an allowance should be made for the transfer of a part beneficial interest in the house. Before turning to Schedule 3A itself it is necessary to be clear exactly what was transferred under the court order of 19 January 1990. The tribunal made no express finding about this, as they accepted the argument then put forward by the child support officer that the “qualifying transfer” provisions applied only where the whole beneficial interest in the underlying property was made over, which on any footing the terms of the court order did not do.
10.	However for the reasons given below I am not satisfied that that approach to tile meaning of “qualifying transfer” is right, and it therefore becomes necessary to determine what the effect of the court order was. It cannot have amounted (as the child support officer originally assumed: page T31) to as much as an 80% transfer of the beneficial interest, since it could only have had that effect if the house had up to then been in the father’s sole beneficial ownership. That was not so, as the reference in the order itself to a “continued” trust for sale shows; and the father himself has confirmed that he and the mother were joint owners and mortgagors of the property until the rearrangement of their beneficial interests on the divorce: see pages 150 and 182. On that basis which I see no reason to doubt, their interests before the severance and transfer under the court order were of equal value: cf. CIS/7097/1995 paragraph 14.
11.	The initial effect of the court order was therefore to transfer to the mother a further 30% of the beneficial interest in the property in addition to the 50% to which her previous right as joint owner already entitled her. However this 30% did not all become hers outright, because of the annual clawback to the father of 1% for each year from September 1989 while he continued to pay the mortgage and the property remained unsold. Under the terms of the order she had no right to insist on a sale for the next ten years while remaining at the property until their son reached 18 in 1999; so that if no other rearrangement took place the beneficial shares would revert from 80/20 to 70/30, reducing what she received under the court order from 30% to 20% before she could insist on a realisation. I think therefore that the fair and realistic interpretation to put on the somewhat complicated terms of this particular court order against these particular facts is that (to the nearest 1%) it effectively transferred a 20% interest in the property to the mother for her own absolute benefit, the further 10% not being wholly for her own immediate and absolute benefit because of the clawback provision.
12.	I should here interpose that at some later date in 1994 or 1995 the father made over to her the whole of the rest of his interest in the property so that she became the sole registered proprietor and took over responsibility for the mortgage: see the Land Registry entry at page T124. However as the tribunal correctly held these arrangements are of no relevance for Schedule 3A. They were quite separate from the court order.
13.	Schedule 3A was added to the maintenance assessments regulations with effect from 18 April 1995, by 1995 SI No. 1045. From that date, certain transfers of property or capital under court orders or maintenance agreements made before 5 April 1993 were for the first time to be brought into account to a limited extent in assessing the exempt income, and thus the weekly maintenance obligations, of an absent parent. By a simple banding system the exempt income is increased by £20 a week for a “relevant value” of £5‑10,000, £40 a week for £10‑25,000, and £60 a week for over £25,000: the “relevant value” being either half or the whole of the actual net value of the property or capital transferred. To get within this system at all however a transfer has to be a “qualifying transfer”, defined by paragraph 1(1) of Schedule 3A as follows:
“1. (1) In this Schedule “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 5 April 1993;
(b)	which was made between the absent parent and either 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 herself.”
14.	Thus if it appears expressly that the sole purpose of the transfer was to provide for the spouse’s own maintenance, (e) excludes it from counting as a “qualifying transfer” relevant for child support maintenance at all. Para. 6 deals with the converse situation where the evidence shows expressly that the sole purpose of the transfer was to replace periodic maintenance for the child: in that case its whole value is counted as “relevant”. To all other qualifying transfers a judgment of Solomon is applied by paragraphs 4 and 5: half the actual value is taken into account as “relevant” and the other half ignored. There is no attempt to reflect any true apportionment between spouse and child support.
15.	There is no dispute that subparagraphs (a), (b) and (c) are satisfied by the 1990 court order provisions increasing the mother’s beneficial interest in the house. Are conditions (d) and (e)? The father, supported by the child support officer in written submissions and by the mother, maintains that they are. The opposition comes from the Secretary of State, on the ground that condition (d) cannot be met as the mother did not end up with the entire beneficial interest in the house, and the father did not transfer the whole of what he had. For either or both of those reasons, Mr. Shaw argued that she did not become beneficially entitled under the order to “the whole of the asset transferred”.
16.	I accept the submissions of the father and the child support officer, and reject those of the Secretary of State. There cannot I think be any doubt that a percentage share of the net beneficial interest in a house is an asset transferable in its own right and “an equitable interest in land” within the definition of “property” in paragraph 1(1) of Schedule 3A. The fact that it is less than the whole does not therefore prevent it from being the subject matter of a “qualifying transfer”. The other part of the argument, that a transfer can only qualify if it was of the entirety of whatever beneficial interest the transferor had before making it, does not appear to me justifiable on the language actually used in sub-para. (d). The plain and unambiguous words of the condition are satisfied if the transferee becomes beneficially entitled to the whole of the particular property transferred. There is no extra condition about what that property has to be. I was urged to look at various pronouncements by government spokesmen as to the intended effect of the changes at the time the schedule was introduced, but I was not satisfied either that any occasion for using them as an aid to construction of the plain statutory words arose, or (when I did look at them, de bene esse) that they shed any helpful light on the point.
17.	For those reasons I hold that the condition in (d) is satisfied as regards any percentage equitable interest transferred under the court order of which it can be said that the mother thereby became entitled to it outright, absolutely and beneficially. In the context of the very simple structure intended, on its own internal evidence, by the schedule the expression “beneficially entitled to the whole” is in my judgment to be interpreted as requiring that the transferee must receive absolute beneficial entitlement in respect of the subject matter of the transfer, as distinct from a limited or qualified interest which it would not be easy to identify as “lump sum maintenance”. That condition appears to me to be satisfied in relation to the transfer of 20%, but not the further 10%: see paragraph 11 above. I can see no reason however in the wording of (d) or in principle why the existence of the 10% limited transfer should prevent the 20% absolute transfer from qualifying, any more than the existence of the residual 20% the father kept or the 50% the mother already had, neither of which was transferred by the order at all.
18.	I accept the united submissions of the father, child support officer and the Secretary of State that sub-paragraphs (e) does not prevent this transfer from being a qualifying transfer. Whatever the precise extent of the exclusion may be in more marginal cases it does not in my view apply here, having regard to (1) the express terms about the house which show a clear intention that the purpose is to continue to provide the son with a roof over his head as well as his mother, and (2) the lack of any express declaration in terms of condition (e) in the court order itself, and of anything in this or the other contemporaneous evidence from which it is possible to spell one out.
19.	In the result I hold that there was a transfer of a 20% beneficial interest in the house to the mother satisfying all the conditions (a) to (e). The “qualifying value” under paragraph 4 was half the value of 20% of the net equity after allowing for the mortgage, and as there were no compensating transfers, the “relevant value” to be used determine the band tinder Schedule 3A paragraphs 10 is the same as the “qualifying value”. Applying the formula in paragraph 4 to a percentage beneficial share in land on which there is a mortgage presents no difficulty as on normal equitable principles of apportionment each such share is subject to its due proportion of the overall burden.
20.	There was some mention at the hearing of the possibility of a “departure direction” but whether such a direction is justified is not an issue before me, and cannot be relevant to the interpretation of Schedule 3A which preceded the departure provisions.  Any relevant later changes of circumstances must of course be taken into account by the child support officer in his recalculations in the usual way. The appeal is therefore allowed and the case remitted to the child support officer to recalculate the assessment in accordance with the directions given by the tribunal, except that from 18 April 1995 there is to be taken into account the qualifying transfer of 20% of the net equity in the former family home in the way set out above.

Date: 31 October 1997	(signed) Mr. P.L. Howell QC
Commissioner

The Secretary of State appealed to the Court of Appeal. The decision of the Court of Appeals follows.

DECISION OF THE COURT OF APPEAL

Mr. S. Kovats (Instructed by the Solicitor to the Department of Social Security, 48 Carey Street, London WC2A) appeared on behalf of the Appellant.

The Respondent appeared in person.

LORD JUSTICE SIMON BROWN:
This is the Secretary of State’s appeal by leave of the single Lord Justice against the decision of a Child Support Commissioner, Mr. Commissioner Howell QC, dated 31st October 1997. The Commissioner set aside the decision of the Child Support Appeal Tribunal and remitted the case to the child support officer to recalculate the respondent’s child support maintenance assessment from 18 April 1995 to date in accordance with his ruling as to how to treat a transfer of a part beneficial interest in the former matrimonial home.   
The point of law arising on the appeal is said to affect at least 15,000 existing assessments under the child support legislation.   Plainly, therefore, it is one of some  importance.  Even so far as this respondent is concerned, it appears to be worth overall something in the region of £10,000, although I should make plain that this Court has not been in any way concerned with the detailed figures or calculations.
Let me at once set out the factual background to the appeal: the precise nature of the issue raised will then become clear.
The assessment in question relates to the respondent’s son, now aged 17, but aged only 6 when the respondent and his ex-wife divorced in 1987.  At issue is the effect upon the assessment of the financial arrangements made between the respondent and his ex-wife under a County Court Consent Order dated 19th January 1990 for the division of the matrimonial property.  As the Commissioner observed, both parents here obviously behaved well at the time of the divorce, and the settlement between them about the care and access for their son and on financial matters was an amicable one.  The Consent Order recited that the two former spouses acknowledged its provisions to be accepted in full and final settlement of all claims they might have against each other for both capital and income or other property adjustment, and that the contents of the family home where the mother and son were continuing to live had been equitably divided, the father undertaking to pay the mortgage instalments, premiums on an endowment policy and all or most of the next two years’ gas, telephone and electricity bills.   On those acknowledgments and undertakings it was ordered by consent that:
1.	“The property continue to be held by the parties on trust for sale so that it shall be used by the [mother] as a house for herself and her dependants.”
2. 	The terms of the trust for sale were to be that the mother was to have the full use, occupation and benefit of the property until sale, and that the trust for sale was not to be enforced until the happening of the first of a list of events including her death, remarriage or choosing to move, or the son attaining the age of eighteen.
3. 	On sale of the property the net proceeds were to be applied in discharging the mortgage and subject to that divided between the father “as to his appropriate share as hereinafter defined” and the balance to the mother.
4.	The “appropriate share” was to be a percentage which would vary according to a formula, as follows:
(i) 	“20% from the date hereof until 31 August 1989
(ii)	21% on 1 September 1989 and increasing thereafter on the first day of each month at the rate of 1/12 of 1% until sale or other disposal of the property in accordance with the terms hereof.”
with a provision that the change in percentage would be frozen if at any time the mother took over responsibility for the mortgage.
5.	The mother was given an option to buy out the father’s share at any time.
6.	The father was to pay monthly periodical maintenance to the son at the rate of 8% of his own gross salary rising to 10% until the son was 17 or later ceased to be in full-time education.
7.	The father was to pay the mother “periodical payments at the rate of 5p. per annum or until further order.”
8.	On maturity of the policy the proceeds were to be divided two-thirds to the father and one-third to the mother.

The effect of that Order was summarised by the Commissioner in terms accepted by the Secretary of State as follows:
“11.  The initial effect of the court order was therefore to transfer to the mother a further 30% of the beneficial interest in the property in addition to the 50% to which her previous right as joint owner already entitled her.   However this 30% did not all become hers outright, because of the annual clawback to the father of 1% for each year from September 1989 while he continued to pay the mortgage and the property remained unsold.   Under the terms of the order she had no right to insist on a sale for the next ten years while remaining at the property until their son reached 18 in 1999;  so that if no other rearrangement took place the beneficial shares would revert from 80/20 to 70/30 reducing what she received under the court order from 30% to 20% before she could insist on a realisation.   I think therefore that the fair and realistic interpretation to put on the somewhat complicated terms of this particular court order against these particular facts is that (to the nearest 1%) it effectively transferred a 20% interest in the property to the mother for her own absolute benefit, the further 10% not being wholly for her own immediate and absolute benefit because of the clawback provision.”

These terms were implemented and adhered to until September 1993 when the respondent’s ex-wife first claimed income support and for that purpose was required to make a maintenance application under s.6 of the Child Support Act 1991.   This resulted in a maintenance assessment which in certain respects not material to this appeal thereafter needed to be adjusted.
The only question still in issue on the appeal before the Commissioner was whether the Tribunal had been right to direct that no adjustment should be made to the respondent’s “exempt income” under Schedule 3A to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (as amended in 1995) for any of the transfers and payments he made pursuant to the 1990 Court Order.   On the appeal to this Court that question has been refined still further:  the sole issue now is whether the transfer of part of the respondent’s beneficial interest in the house was a “qualifying transfer” as defined in paragraph 1(1) of Schedule 3A, or whether it was excluded by sub-paragraph (d) of that definition.
It is convenient at this stage to set out the most material parts of Schedule 3A (a Schedule inserted into the 1992 Regulations in 1995):
“AMOUNT TO BE ALLOWED IN RESPECT OF TRANSFERS OF PROPERTY
Interpretation
	1(1)   In this Schedule - 
		“property” means -
(a)	a legal estate or an equitable interest in land; or
(b)	a sum of money ...
(c)	any business asset as defined in sub-paragraph 2 (whether in the form of money or an interest in land or otherwise );
(d)	any policy of insurance ...
“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 either 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 herself;  ...
(2)	For the purposes of sub-paragraph (1) “business asset” means an asset, whether in the form of money or an interest in land or otherwise which, prior to the date of transfer was used in the course of a trade or business carried on - 
(a)	by the absent parent ...”
There was no dispute before the Commissioner that sub-paragraphs (a) (b) (c) and (e) were satisfied.   It was and remains the Secretary of State’s case, however, that condition (d) could not be met as the mother “did not end up with the entire beneficial interest in the house.”
The critical passages in the Commissioner’s decision rejecting that argument are as follows:
“16.	I accept the submissions of the father and the child support officer, and reject those of the Secretary of State.   There cannot I think be any doubt that a percentage share of the net beneficial interest in a house is an asset transferable in its own right and “an equitable interest in land” within the definition of “property” in paragraph 1(1) of Schedule 3A.   The fact that it is less than the whole does not therefore prevent it from being the subject matter of a “qualifying transfer”. ... The plain and unambiguous words of the condition are satisfied if the transferee becomes beneficially entitled to the whole of the particular property transferred. There is no extra condition about what that property has to be. ...
17.	For those reasons I hold that the condition in (d) is satisfied as regards any percentage equitable interest transferred under the court order of which it can be said that the mother thereby became entitled to it outright, absolutely and beneficially.   In the context of the very simple structure intended, on its own internal evidence, by the schedule the expression “beneficially entitled to the whole” is in my judgment to be interpreted as requiring that the transferee must receive absolute beneficial entitlement in respect of the subject matter of the transfer, as distinct from a limited or qualified interest which it would not be easy to identify as “lump sum maintenance”.   That condition appears to me to be satisfied in relation to the transfer of 20%, but not the further 10% - see para. 11 above.   I can see no reason however in the wording of (d) or in principle why the existence of the 10% limited transfer should prevent the 20% absolute transfer from qualifying, any more than the existence of the residual 20%  the father kept or the 50% the mother already had, neither of which was transferred by the order at all.
19.	In the result I hold that there was a transfer of a 20% beneficial interest in the house to the mother satisfying all the conditions (a) to (e).”

The Commissioner then indicated how the further provisions of Schedule 3A applied so as to translate that conclusion into a formula for calculating the respondent’s “exempt income” with effect from 18th April 1995 when the Schedule came into effect.
The Secretary of State’s argument on the appeal is essentially this.   In order to satisfy condition (d) and constitute a qualifying transfer, the transfer here had to result in the respondent’s ex-wife holding the entire equitable interest in the former matrimonial home.   Plainly it did not:  rather the respondent retained an interest of 20% (plus a further, contingent and accumulating 10% interest arising from his payment of the monthly mortgage instalments).   This, therefore, was a partial, not a whole, asset transfer.   The words which the Secretary of State emphasises in condition (d) are “the whole of the asset.”   The word “asset”, Mr. Kovats points out, is used in distinction to the word “property”.   “Property” is defined to include “a legal interest or an equitable interest in land.”   The different word “asset”, therefore, is intended to refer by contrast to a physical item (here the house) in which it is possible to have legal and equitable interests.  The Commissioner is said to have erred in conflating the words “asset” and “property”.  Whilst it is true that the respondent’s ex-wife received the whole of the “property” transferred here - namely the 20% share transferred outright - the effect of that transfer was still not such as to leave her with the whole of the house.
The argument is in my judgment an impossible one.   At its heart lies the proposition that “asset” in condition (d) must refer to a physical item (here the matrimonial home).   Two difficulties immediately rise.   First, in the very same schedule, asset (in the context of “business asset”) is defined to include “an interest in land”;  the Secretary of State’s submission requires it to be given a wholly different meaning in condition (d).   Second, and perhaps more problematic still, what condition (d) requires is that the transferee be left with “the whole of the asset transferred” (emphasis added), not the whole of something else of which the asset transferred forms part.   To accommodate the Secretary of State’s contention the condition would need to be read as if it ended “... to the whole of the asset the whole or part of which is transferred.”   Here, as the Commissioner rightly pointed out, the respondent’s ex-wife has become beneficially entitled to the whole of the asset transferred, provided only that the asset transferred is recognised as a 20% beneficial interest in the house.
The Commissioner’s decision also clearly indicates the purpose served in condition (d) by the words “the whole of” - words which the Secretary of State’s written argument had suggested would be otiose on the respondent’s contended for construction - namely to exclude from the benefit of the schedule a limited or qualified or conditional transfer, such as here of the 10% interest in the house.
The Secretary of State’s final argument was that this Schedule was designed to provide a rough and ready means by which non-lawyers could administer the new scheme simply, and that this purpose would more easily be achieved if the child support officer needed only to concern himself with transfers which leave the parent with care with the whole house.   In this connection Mr. Kovats referred us to the January 1995 White Paper, one part of which, entitled “Broad-brush provision for property or capital settlements”, contains this paragraph:
“Where a transfer has taken place, it will be assumed that the ex-partners were in any case entitled to half each of the total value.   Only to the extent that the absent parent transferred some or all of his share of the property or capital to the parent with care will it count as a contribution to child maintenance.   For example, if a property worth £50,000, with a £30,000 outstanding mortgage, were transferred to the parent with care, then the absent parent would be assumed to have given up £10,000 of equity.”

There is, however, scope in that paragraph for arguments both ways: certainly the reference there to the absent parent transferring “some or all of his share of the property” appears to support the respondent’s view.   How, one asks, is the Secretary of State’s case consistent with an absent parent benefiting from the transfer of only “some of his share”?   That aside, it seems to me hardly more difficult and altogether more just to administer the scheme in the manner indicated by the Commissioner’s approach than that advocated by the Secretary of State.
These latter considerations, however, are secondary to the main question which is one  of construction. For the reasons given earlier, I have no doubt that the Commissioner was correct in his construction of this condition.   The use of the word “asset” instead of “property” in paragraph (d) may be a curiosity;  it cannot, however, begin to support the weight of argument which Mr. Kovats seeks to place upon it.
I would dismiss the appeal.

LORD JUSTICE PETER GIBSON:
I agree.

LORD JUSTICE SCHIEMANN:
I also agree.

Order: Appeal dismissed with costs. (Order not part of approved judgment)