UK Social Security and Child Support Commissioners' Decisions

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[2008] UKSSCSC CCS_1141_2008 (25 July 2008)

CCS/1141/2008

DECISION OF THE CHILD SUPPORT COMMISSIONER

I accept the father's application for leave to appeal for consideration despite his delay in applying to the tribunal chairman for leave. I grant leave to appeal and, all parties having given their consent to me treating the application as the appeal if I were minded to grant leave, I allow the father's appeal. I set aside the decision of the Ashford appeal tribunal dated 3 September 2007 and refer the case to a differently constituted appeal tribunal for determination. Subject to a further direction by a tribunal chairman, there must be an oral hearing before a tribunal consisting of a legally qualified panel member and a financially qualified panel member.

REASONS

I held an oral hearing of this case. The father appeared in person, the Secretary of State was represented by Mr Leo Scoon of the Office of the Solicitor to the Department of health and the Department for Work and Pensions. The mother was represented by an uncle of hers.

The case concerns the father's liability for child support maintenance in respect of his two children, who live with their mother. The first maintenance calculation was made on 13 June 2005 and was to the effect that the father was liable to pay child support maintenance at the rate of £155 per week from 18 March 2005. On 19 July 2005, the father informed the Child Support Agency that he had become self-employed and he subsequently produced evidence that his previous employment had come to an end on 30 June 2005 and had become the sole shareholder and director of his own company. This seems not to have resulted in a new decision immediately but he made a formal application for supersession on 22 February 2006 and on 15 April 2006 the Secretary of State superseded the decision of 13 June 2005 and decided that the father's liability for child support maintenance from 15 July 2005 was nil.

Perhaps unsurprisingly, the mother complained. The father was requested to attend an interview. He had previously expressed concern about the Child Support Agency's failure to record evidence given orally and so declined both that request and another one, while stating his preparedness to provide information in writing. He was perhaps unwise to decline to be interviewed but it is equally unfortunate that the Child Support Agency did not put into writing the questions its representatives had intended to ask him. Instead, it obtained bank statements directly from his bank and used those to calculate his income. On 8 January 2007, the Secretary of State assessed the father's liability for child support maintenance at £233 per week from 15 July 2005 and £87 per week from 31 March 2006. Following an unsuccessful application for a further revision, the father appealed. On 10 July 2007, the case came before the tribunal but was adjourned part heard, the tribunal deciding that the case before them should be treated as both the father's appeal following the revision of 8 January 2007 and an appeal by the mother in respect of an application for a variation on the ground that the father's lifestyle was inconsistent with his declared income. On 3 September 2007, the tribunal decided that the father's liability for income support should remain at £155 per week from 18 March 2005 and should not have been revised or superseded on 8 January 2007 so as to substitute a different decision. However, it suggested that its decision should be superseded with effect from 28 April 2007, when the Child Support Agency received the father's company's accounts for the year ending 30 June 2006.

The father wrote to the clerk to the appeal tribunal on 11 March 2008, stating the he wished to appeal. That was taken as a late application for leave to appeal and was presumably put before the chairman although no copy of her ruling appears in the tribunal's file. On 28 March 2008, the father was sent a letter stating that his application had been rejected because it had been received more than one month after the issue of the tribunal's decision and a statement of reasons had not been prepared. In fact, the decision notice dated 3 September 2007 was three pages long and expressly stated that it was to be considered as a statement of reasons, so I presume that leave was refused simply on the ground of delay. The father promptly made an application to a Commissioner for leave and asked for an oral hearing of his application, which I granted.

Regulation 11(3) of the Child Support Commissioners (Procedure) Regulations 1999 (S.I. 1999/1305) has the effect that a Commissioner may accept an application for leave to appeal in a case where the application to the chairman was rejected on the ground of delay only if there are special reasons to do so. Mr Scoon drew my attention to what I said when refusing to accept a late application for leave to appeal in CCS/2064/1999.

"3. Time limits are particularly important in child support cases. Prolonged litigation between parents can affect relationships with children and is not to be encouraged. Furthermore, once a decision has been made as to the amount of child support maintenance to be paid or received and the time for appealing has passed, a parent is generally entitled to rely on that decision and to budget on the basis that the decision will not be disturbed with retrospective effect. I consider that a Commissioner should therefore be slow to accept a late application for leave to appeal. On the other hand, justice may sometimes demand that he or she does accept a late application. Reliance on a technical time-bar to preserve a clearly wrong decision is not always appropriate. Relevant factors that may fall to be taken into account when considering whether there are special reasons for accepting a late application seem to me to include the strength of the grounds of appeal, the amount of money involved, whether the decision affects a continuing liability, whether there is an adequate alternative remedy, the difficulties that the lapse of time might create for making any further findings of fact and the way in which the parties have conducted the litigation, including their respective contributions to delay."

Eight years later, those comments still seem appropriate. Of particular relevance in this case are the explanation for the delay, the amount of money involved and the strength of the ground of appeal.

The father accepts that he was informed in material he received with the decision of the tribunal that, if he wished to appeal, he should do so with a month. What he says is that, having been told that he could appeal only on a point of law, he understood that it was necessary for him to identify a point of law and that he was unable to obtain the necessary legal advice. I am prepared to accept that that is so. He is not the first person to appear before a Commissioner and say that he has had difficulty finding advice and he has provided some circumstantial evidence to support his assertion. People often assume that only lawyers can give legal advice and it seems not to occur to solicitors holding themselves out as practising in the field of family law that, if they are not familiar with child support law, they should obtain advice from counsel who is. On the other hand, the delay in this case is very substantial and, knowing of the time limit, the father could reasonably have been expected to submit an application for leave to appeal with a request that it not be considered until he had obtained advice. The explanation for the delay is not one that would lead me to admit the application for consideration in the absence of other factors.

The amount of money involved is substantial. I am told that the Child Support Agency is seeking recovery of over £14,500 in consequence of the tribunal's decision. This is money that the mother has not had so there is no question of taking away from her anything more than an expectation. If that expectation was based on a clear error by the tribunal, the amount of money is such that, in my judgment, it would not be right to continue to pursue the father for the payment merely because of his delay.

The tribunal clearly did err in law. The Secretary of State's assessment had been based on the claimant's bank statements but the tribunal accepted the claimant's explanations for the various entries with the consequence that it found that his income was not simply the aggregate of the deposits in his accounts. However, the tribunal took the view that, until the father provided the accounts for the first year of trading of his business, there were no grounds for superseding the existing assessment of child support maintenance, based upon his earnings in his previous employment. I accept the submissions of both the Secretary of State and the father, to which the mother's representative had no answer, to the effect that, as the father had informed the Child Support Agency of his change of employment, the assessment fell to be superseded with effect from the date of the change, on the ground of change of circumstances. The fact that a person's income in one year is often based on accounts from the previous year, is not a reason for assuming either that the person has no income before the first accounts are produced or that his income remains as they were in a previous employment.

The problem, of course, was determining what the father's income was from the date of the change and the Secretary of State doubtless faced a difficulty in making that determination in July 2005. However, the tribunal had the advantage of hindsight, which it was perfectly entitled to use.

The father sought an assessment on the basis of the salary disclosed in the accounts. However, the mother has argued that that did not represent the true position and, indeed, none of the entries in the father's bank statements can be related to that salary and the tribunal found that the salary had been treated as an increase in the director's loan to the company. Some of the entries in the bank statements did represent payments from the company but the tribunal accepted that they were repayments of his loans to the company. The first question for the tribunal was therefore whether those repayments could be treated as income in the father's hands, rather than capital. If, as the tribunal appears to have found, they were capital payments, the next question was whether there was a diversion of income such as might support a variation decision. It might be regarded as inconsistent with the father's argument that the business might have gone under had he taken a larger salary that the company was making payments to him in the form of repayments of loans. The tribunal clearly had such a variation in mind but considered that it would not be appropriate to make such a variation in respect of the period before it. (Once all the evidence had become available to the tribunal, the tribunal was right, in my judgment, to consider that a variation on the ground that the father's lifestyle was inconsistent with his declared income was not appropriate. The mother cannot be blamed for making an application broadly on that ground but when the true source of funding of a lifestyle becomes apparent, consideration must be given to making a variation on one of the other permissible grounds.)

Although the father might escape any liability for child support maintenance in respect of the relevant period if this appeal succeeds, there is also the distinct possibility that he might face an even larger liability if a variation decision were made. I warned him that that might be so but he said he was prepared to run the risk and he did not wish to withdraw his application.

The mother's representative said that she did not want any further delay and wished to be able to enforce the decision of the tribunal. However, I have come to the conclusion that there is so much involved in respect of such a long period that it would be wrong to let a plainly wrong decision stand, notwithstanding the father's delay in seeking leave to appeal. Indeed, I was told that there had been a further assessment at the rate of £5 pw since the tribunal's decision so the outcome of these proceedings might have some bearing on future assessments, although there must be a separate challenge to those assessments if they are not accepted..

Accordingly, I give the decision set out in paragraph 1 above. I remind the tribunal that it is not obliged to make a single assessment at the same rate in respect of the whole period in issue before it or in respect of any one year: it may make a stepped assessment if that appears appropriate because, for example, it considers that the pattern of payments received by the father varied. However, although the tribunal is entitled to have regard to evidence that came into existence only after the relevant Secretary of State's decision was given, it is not entitled to take account of any change of circumstances since that date.

(signed on the original) MARK ROWLAND

Commissioner

25 July 2008