UK Social Security and Child Support Commissioners' Decisions

[2003] UKSSCSC CCS_1626_2002 (27 January 2003)

 


File no: CCS 1626 2002

DECISION OF THE CHILD SUPPORT COMMISSIONER

1. I dismiss the appeal. For the reasons below, I do not accept that the tribunal's decision as wrong in law.
2. The appellant (to whom I refer as A) is the absent parent and father of a qualifying child for whom a child support maintenance assessment has been made. The first respondent is the Secretary of State. The second respondent (to whom I refer as C) is the parent with care and mother of the child. A is appealing against the decision of the Bolton appeal tribunal on 5 October 2001 under reference C 40 122 1998 02366.

The appeal

3. This is now a very old appeal. It starts with a letter of appeal from C in July 1998 against the assessments made against A for periods starting in February 1997 and continuing through April 1998. It first went to a tribunal in June 1999. That tribunal adjourned and directed that A produce specified information. The record shows that C both attended and was represented at that hearing. A was neither present nor represented. The case was heard by another tribunal on 23 September 1999. Again, C was both present and represented and A was neither. A appealed the decision of the tribunal to the Commissioner. On 8 August 2001, under decision CCS 872 2000, I upheld the appeal and set aside the tribunal decision, giving full reasons. My decision made a recommendation that the new tribunal panel to rehear the case be constituted with a financially qualified panel members, a recommendation that was accepted. I directed the new tribunal to "look into" the issues about A's income and tax coding that had given rise to the appeal to the Commissioner. I directed A to produce certain information to the tribunal.
4. The case went to a new tribunal on 5 October 2001. C was present and represented. A was not present but was represented by an accountant. In its decision the tribunal noted my direction to A to produce information, and ruled that it was not satisfied that the direction had been complied with fully. On that basis and for other reasons it concluded that it could not rely upon any of the evidence put forward by A. It went on to consider the accounts of the company of which A was a director and directed that the child support agency should recalculate A's income on the basis of gross earnings and dividend totalling £25,000.
5. A applied to have the decision of the tribunal set aside. This was refused in January 2002, but permission to appeal was granted by a chairman. In order to avoid confusion, I asked when I then saw the papers that the formal record of the tribunal be clarified as there was a possible doubt about the references to the parties in the decision being misleading. That was done in July 2002, and the submissions of the parties invited. I now have submissions from A and from the secretary of state's representative, who supports the appeal. I have had no submission from C, but now propose to decide the case without that submission.

Grounds of appeal

6. I take the following to be the grounds of appeal. The tribunal was wrong to conclude that A had not met the requirements of my direction about producing further evidence. The tribunal had misunderstood the submissions made to it about A's earnings. The tribunal had not been told, as it said it had, that A had previously withheld information about other income (expressly, dividends). There was no evidence to support the finding that A had a gross income of £25,000. The finding amounted to a departure direction, but there was no reference to the relevant regulations.
7. The secretary of state's representative supported the appeal because of the following. The tribunal did not make further findings of fact about the tax code. It erred in concluding that the directions of the Commissioner had not been complied with. It recorded, without evidence, that A did not have a bank account. It did not make further findings of fact to apportion the directors' remuneration. There is insufficient explanation of the figure of £25,000.

My decision

8. I do not accept any of these grounds. The starting point is my previous decision. That gave specific indications to A and those representing him about information to be produced for the rehearing. The tribunal concluded that A had not fully complied with that direction. I see no reason to go behind that decision of the tribunal (which included both a legally qualified member and a financially qualified member). That is a decision fully within the competence of a tribunal and one which is difficult to question in the context of an appeal on points of law only. Its relevance in this case is as one aspect of the basis for the view the tribunal took of the credibility of A's evidence. That is also an issue for the tribunal on the facts. I do not see any error in law by the tribunal on this point.
9. I do not accept that the tribunal made insufficient findings about the tax code and other points in my previous decision. My decision told the tribunal to "look into" the issues, and it did. Its decision did not depend on answers to those issues alone because it decided that it could not rely on A's evidence. Similarly, I do not consider that any error that the tribunal made about A's bank accounts was such as to call the legality of the tribunal decision into question. Again, this is one of the points about credibility of evidence. Even if the tribunal was wrong in fact on this point, I do not see that as undermining the tribunal's approach.
10. The submission that the tribunal was making a departure direction but not doing so properly is also rejected. It is clear that the tribunal was trying to get at the income on which A should have been assessed in the periods in question. That was the issue on which C appealed, and that was the issue on which the tribunal decided the matter. I see nothing in the record of these proceedings to suggest otherwise.
11. The crucial questions are whether the tribunal had evidence to support the £25,000 figure and whether it explained its decision adequately. There is an inherent problem for tribunals faced with questions like these. A tribunal is expected to determine the incomes of individuals who are prepared to mislead about, refuse to give, or actively conceal, the evidence on which the tribunal must operate if it is to give a full and accurate answer about income. Yet only the individual has the information to tell the tribunal what his or her income is. No one else has it. The tribunal has to rely on the individual to give it that information in full. If the individual does not do so, then the tribunal must use such other sources of information as are available to reach a decision.
12. A claimant or parent who fails to inform a tribunal fully about his or her income cannot later complain that the tribunal has produced the wrong figure. Typically, such an individual is "too busy" to attend a tribunal hearing while at the same time he or she provides the tribunal with limited written or indirect information suggesting a low level of income. The tribunal must then use its best judgment to assess a figure for income on the available evidence. When it does so, the individual complains that the tribunal is acting without finding out the full facts, or that it has made inadequate findings of fact. Yet the precise reason why the tribunal does not have the full facts is that the individual has not given them to the tribunal. In such cases, the tribunal should use all reasonable endeavours to get full evidence. It should then act to the best of its judgment in establishing a probable level of income based on all the available evidence and record its decision accordingly.
13. This tribunal had a financially qualified panel member in addition to the legally qualified member. Its judgment was therefore informed on financial matters as well as on the law. That, in my view, puts the tribunal in the same broad position as a tribunal with a medically qualified member. The tribunal is entitled to draw on that expertise when making its decision, just as a tribunal with a medical member draws on its own medical expertise. Similarly, while the tribunal must reach clear findings and conclusions, it cannot be expected to explain how it balances every aspect of a financial problem in reaching its conclusions any more than a tribunal with a medical member has to explain every detail in reaching a medical conclusion about that individual. In either case, the tribunal can use its expert judgment. And it only goes wrong in law if it ignores evidence , reaches a conclusion that cannot reasonably be reached on the evidence, or fails to set out its decision and reasoning.
14. I test the main ground of A's appeal on that basis and by reference to the papers in the file. The first point that the tribunal noted was an acceptance by A's accountant that "both dividends and benefits in kind were not previously disclosed". I take that(including the underlining) from the contemporary note prepared on the day by the chairman. I find it inherently unlikely that a chairman would have written this in this form if it had not been said or that the tribunal misunderstood what the accountant said. I also find nothing in the papers to suggest otherwise. A's replies on the CSA3 received in October 1997 indicated that he was an employee working as an electrician for a named employer. Two wage slips were enclosed, both indicating gross pay of £1,095.00 with deductions. I see nothing anywhere in that form or any other papers in the appeal files indicating that A was also a director and shareholder of that employer, or that he was receiving dividends, benefits or any other income from the employer. The arguments at that stage were about mortgages and housing costs.
15. The directorship and shareholding came to light when C handed the results of a company search to the child support agency a year later. These showed A with a shareholding of 10,000 £1 nominal shares in the company and as one of two directors of the company. A only produced information about the company when directed to do so by the tribunal in June 1999. That tribunal was told by an officer that the child support agency knew nothing about the directorship, fees or company bonuses until C told it. The company car only came into the picture when the second tribunal heard the case in September 1999. A was asked in writing at that time what dividend he received for the period 1.10.96 to 30.9.97, and replied "no dividend payed in that year". That was not the question asked. The accounts show that a dividend was paid for that year. It is against that history that the tribunal recorded the views expressed about the dividends and benefits in kind. I see nothing in the papers to support A's contention that he did disclose the dividends or benefits at any time before he was specifically required to do so.
16. The company accounts for the company of which A was employee, director and part-owner show a company with £30,000 paid up shares and retained shareholder value of £66,000 at the end of the 1997 year. Dividends paid in 1997 totalled £8,000, and directors' remuneration totalled £38,999 for the year, with £35,000 also being paid out in wages. Against that, the earnings A disclosed in his CSA3 were £1,095 a month for the same period (or £13,000 a year). Nothing else was disclosed. The wages department of the company later wrote to say that A's remuneration was £13,000 a year and the dividend £3,333 (both before tax) for that year. This increased to nearly £16,000 for the following year, and the gross dividend increased to over £4,000.
17. The tribunal had before it evidence that: (a) A had only declared income of £1,095.00 as an employee in 1997; (b) A had received undeclared dividends exceeding £3,000 gross that year and £4,000 in the next; (c) A had failed to declare that he was one of two directors of his employer (a company that paid directors' fees of £39,000 in 1997) and had not disclosed any share of the directors' fees; and (d) A had not disclosed any benefit, such as his company car and petrol, from his employment or directorship. The tribunal was correct in adding the dividends into the income to be assessed, so increasing the £13,000 to over £16,000. It was not acting unreasonably or without evidence in increasing total income to £25,000 to cover undisclosed earnings, fees or other benefits from the company. Nor, from the very nature of the exercise being undertaken, could the tribunal state an exact income figure or exactly why it felt £25,000 to be right. Its task was to act to the best of its judgment and on the balance of probability. I can only interfere with that if I consider that the tribunal did not undertake that task reasonably. I see no basis for such a conclusion in this case. It was only after the tribunal reached its decision that the accountant gave what were said to be full figures for the year in question together with an offer that A would attend for questioning. But that was too late.

David Williams

Commissioner

27 January 2003

[Signed on the original on the date shown]