UK Social Security and Child Support Commissioners' Decisions

[1999] UKSSCSC CCS_1_1998 (08 October 1999)


 


DECISION OF CHILD SUPPORT COMMISSIONER

1. These two appeals by the absent parent (hereafter "the appellant") fail. I see no error of law in the decision s of the Dundee child support appeal tribunal dated 20 March 1997 such as to require my interference. Accordingly both appeals are dismissed.
2. After the written submissions by the parties had been received and circulated, the appellant sought an oral hearing of his two appeals. That request was granted by a Legal Officer to the Commissioners. At the hearing the appellant neither appeared nor was represented. The Child Support Officer (the first respondent in each appeal) appeared by counsel, namely Mr Ian Armstrong, Advocate, instructed by the solicitor in Scotland to the Department of Social Security. The second respondent, the parent with care, appeared in person, but without representative. I am grateful to Mr Armstrong for his submissions, in part in elaboration of the first respondent's written submissions. The second respondent intervened only to seek to clarify one or two matters of fact. Although these are not really for me, I am grateful for the clarification although the outcome of the appeals was not thereby affected.
3. Case CSCS/2/98 started as an appeal by the present appellant against a child support officer's review decision dated 9 May 1996. Case CSCS/1/98 was an appeal by the present second respondent against the same review decision. In the event the tribunal allowed both appeals and returned the cases to the Secretary of State for review, and if appropriate revisal, of the maintenance assessment in question having regard to certain acts. These are set out, primarily, in their decision notice at document Y3 on file CSCS/2/98. The present, and accordingly related, appeals arise out of one of those findings, namely –

"5. The transfer of property in terms of the divorce decree dated 10 September 1992 was not qualifying transfer in terms of the CS MASC Regulations 1992, Schedule 3A."

In their reasons the tribunal gave an explanation as to why in their view that finding fell to be made: namely that criterion (e) of paragraph 1(1) of the Schedule referred to was not satisfied. It was upon that narrow point that the appellant launched his appeal, necessarily in respect of both cases which had been virtually conjoined, and in respect of which the Chairman of the tribunal granted leave. In the course of the written submissions the child support officer raised two further questions, not entirely directly related to this appeal but I will deal with them below.

4. Schedule 3A of the Child Support (Maintenance Assessment in Special Cases) Regulations 1992 [the MASC Regulations] deals with the amount to be allowed as exempt income of an absent parent where there has been "a qualifying transfer of property". And that concept according to paragraph 1(i) of the Schedule means a transfer of property which qualifies under the five conditions there in set out at (a) to (e). Only two of these arose for consideration before me. The first was in part at my instigation and the second was the one founded upon by the appellant. These two conditions require that the transfer was one –

"(a) Which was made in pursuance of a court order made, or a written maintenance agreement executed, before 5 April 1993;

(e) Which was not made for the purpose only of compensating the parent with care either for the loss of a right to apply for, or receive, periodical payments or a capital sum in respect of herself, or for any reduction in the amount of such payments or sum..."

The first question that arose therefore was whether the decree of divorce in this case, there being no written maintenance agreement, which was undoubtedly made before 5 April 1993 had resulted in the transfer in question.

5. The Sheriff Court decree, to be found at document V1, was pronounced on 10 September 1992. Apart from decree of divorce, the Sheriff –

"(7) decerned against the Pursuer for payment to the Defender of a capital sum of one Thousand Pounds payable by two instalments of Five Hundred Pounds the first payment being payable as at the date hereof and the second payment being payable on 18 December 1992:

(8) ordained the Defender to convey within one month of the date hereof his one half share of the heritable properly known as [illegible], the Pursuer to bear the burden of the legal expenses in respect thereof:

(9) found an declared that the contents of the matrimonial home shall be divided by agreement between the Parties...."

6. It is at once noticeable that the disposition was not effected within the period allowed, or even within one month of the date of extraction which was 25 September 1992. It appears at documents V3 and V4 and is dated 22 January 1993. Indeed it bears to have been granted –

"...CONSIDERING THAT differences have arisen between us a result of which we have separated and CONSIDERING THAT it has been agreed between us that the title to the subjects hereinafter disponed by made over to me the said [second respondent] as an individual THEREFORE in implement of the said agreement..."

Having regard to these factors, it could be said, superficially at least in my opinion, that the disposition had been disjoined from the Sheriff Court decree and its requirements. The connection which was required is contained in the words "in pursuance of" in sub-paragraph (a). It is a further possible pointer in the same direction that there is in the papers an exchange of correspondence between the solicitors concerned which in effect led up to that part of the Sheriff Court decree which dealt with the matters decreed other than divorce. Mr Armstrong assured me, and I accept, that the final version of the agreement was recorded in the decree, though whether upon a joint minute is a matter that the papers before me cannot show. Accordingly, on the face of it, this transfer was not even in pursuance of a written agreement. As I have indicated, it is at least arguable that it was not in the event in pursuance of the court order but was in pursuance of some underlying private but unwritten agreement between the parties.

7. Nonetheless Mr Armstrong submitted, and since it makes no difference to the outcome of this case I accept for the purpose of this decision only, that this disposition was made, "in pursuance of" the Sheriff Court decree. Mr Armstrong's submission was based upon the tribunal's acceptance of that connection, although in fairness to them their minds do not appear to have been directly focused on the point. But, as submitted by Mr Armstrong, it appears that the tribunal accepted the inferential connection between the disposition and the decree. For the reasons which follow, should the matter ever be important, which for the further reasons which follow it may never be, another tribunal in another but factually similar case might have to consider the issue more carefully.
8. Finally and in respect of sub-paragraph (a), I should record that the actual conveyance was done by both former parties to the marriage in respect of the whole property rather than, as required by the shrieval decree only of the appellant's one half share. That, as Mr Armstrong suggested, may have been a mechanism to avoid the result which might otherwise have arisen along the lines of that revealed in Gardners Executors v Rayburn 1996 SLT 745. There a survivorship clause in the original disposition to the marriage parties was held itself to have survived a simple disposition of one half of the property by one party to the other in normal terms. The result was that the survivorship clause had still some effect in favour of the disponer following the death of the disponee. That, I may add, may at least neutralise any point about the form of the disposition, its wording apart, from being used to interpret it as being not in pursuance of the court order.
9. I turn now to sub-clause (e). Mr Armstrong argued, and I accept, that the purpose of this sub-clause, in light of decision CCS/1554 and 1788/97, decided by Mr Commissioner Rowland and Mr Commissioner Mesher respectively is, under English domestic law, to allow as exempt income only a transfer of property which to some extend substituted for periodical payments or a capital sum in respect of children. Hence it was negatively expressed so that to qualify it must not have been made for the purpose only of compensating a parent with care for the loss of rights in those regards. I accept what the Commissioners have said in that regard without question but I have to apply the wording of the sub-clause in the context of Scottish domestic law. At this point I should note that whilst the tribunal's reasons for holding sub-clause (e) not satisfied were perfectly logical it is right to say that to a large extent they were contrary to what I am about to say. In short they looked to see whether there had been a transfer to any extent of satisfaction of any maintenance obligation to the children subject to the assessment. That was not the correct approach.
10. Mr Armstrong, in clarification of a submission by the child support officer, drew attention to the Family Law (Scotland) Act 1985. It bears, in terms of the preamble to be –

"An Act to make fresh provision in the law of Scotland regarding aliment; regarding financial and other consequences of decrees of divorce...".

That it had these two and separate purposes is borne out by the fact that section 1 is preceded by a heading –

"Aliment"

and section 8 by a heading –

"Financial provision on divorce etc.".

Section 1 then limits aliment to an obligation between husbands and wives and parents and children, subject to an exception which does not apply to this case at (1)(d). And of course aliment is a payment at regular intervals for the subsistence of the person in whose respect it is to be paid. It is defined in section 27(1) of the Act so as to mean what is known as permanent aliment rather than any interim or other award, but that does not affect its basic meaning. Then at section 8 start the provisions about capital sums and periodical allowances – (1)(a) and (b). Section 8(1) provides that in an action of divorce it is only the parties to the marriage which can apply for orders about capital sums or periodical allowances. Applying that restriction then to what is said at paragraph 1(1)(e) of the relevant part of Schedule 3(a) of the MASC Regulations means that the only compensation that could ever be paid to a parent in Scotland in respect of the loss of a right to apply for or to receive periodical payments or a capital sum would be in respect of him or herself and in respect of no other person. Accordingly, submitted Mr Armstrong, sub-paragraph (e) could never be satisfied in respect of a parent in Scotland whose divorce had been dealt with by a Scottish court applying the Act of 1985. That Act applied here. I agree. The result is that the appellant's contentions in support of the appeal, based as they largely are argument about fact rather than strict legal interpretation, could never have succeeded nor, indeed, could his appeals.

11. Mr Armstrong referred to a matter raised at paragraph 10 et seq at page 18 onwards of the child support officer's submission to the Commissioner. That concerned the status of the disposition already referred to which had been registered in the appropriate division of the Register of Sasines. He conceded that that submission, which referred to my decision CSCS/5/97 in which I consider the effect of an extract Minute of Agreement on whose extract were words of execution, was misconceived. As Mr Armstrong indicated, the submission was based, no doubt understandably, upon a confusion between the different parts of the Registers of Scotland. The Registers of Sasine deal with the holding of land and incidental rights. An extract from them can never have the effect of an extract from the Books of Council and Session which alone can carry a warrant for execution.
12. Finally I should note two matters. First, Mr Armstrong accepted from me a suggestion that, whatever might be otherwise construed from the wording of the disposition, since it achieved all that the court had required it might thereby be said to have been "in pursuance of'. As already indicated, I am not sure how important this matter will ever be again having regard to my views about the omnibus effect of sub-clause (e). I can only repeat that in my view a careful analysis will be required along the lines indicated should any such case arise.
13. The second matter is simply to emphasise that what I have said about sub-clause (e) never being satisfiable in Scotland relates only to cases where what has been done is taken as related to a decree of court. But sub-clause (a) applies also to written maintenance agreements executed before 5 April 1993. Whether any such will now arise is another issue. But it is perfectly possible, for all that is said herein, for a written maintenance agreement to require a transfer of property. There section 8 of the Family Law Act would not apply. In that situation it may be that it could be properly contended that a transfer in pursuance of an agreement had been made for the purpose of compensating both the parent with care and a child for the loss of a right to receive periodical payments or a capital sum. It may be more difficult to see how there could be a loss of a right to apply for them but it is conceivable that there might be such a right under an ante-nuptial marriage contract or settlement – thus to apply for such to the trustees thereunder. I mention these possibilities only to emphasise that what is said herein applies to transfers based upon court orders. I leave for future consideration transfers said to be made in pursuance of a written maintenance agreement.
14. For the foregoing reasons these appeals must be disallowed.

(signed)

W M WALKER QC

Commissioner

Date: 8 October 1999