CCS_1871_2007 [2008] UKSSCSC CCS_1871_2007 (25 January 2008)

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[2008] UKSSCSC CCS_1871_2007 (25 January 2008)

CCS/1871/2007

DECISION OF THE CHILD SUPPORT COMMISSIONER

The Child Support Commissioner's decision

This appeal by the father to the Child Support Commissioner succeeds. The decision of the Brighton appeal tribunal sitting on 7 October 2005 is wrong in law. I must therefore set that decision aside under section 24(2) of the Child Support Act 1991.

I have decided to substitute my own decision under section 24(3)(a) of the 1991 Act as the one that the tribunal should have made, relying on the tribunal's findings of facts. My substituted decision is as follows:

The mother's appeal against the decision of 28 September 2004 regarding the basic maintenance calculation is allowed and the Secretary of State's decision revised. The father's formula-based net weekly income was £202.75, not £132.44. This applies to the liability from the effective date of 24 August 2004. As the father's net weekly income exceeds £200, the basic rate of 20 per cent applies given that there were two qualifying children at that date. Arithmetically this results in a child support liability of £40.55; this is rounded to £41 per week for two children from the effective date by virtue of regulation 2(3) of the Maintenance Calculations and Special Cases Regulations 2000.

The mother's appeal against the decision of 15 March 2005 on the variation application is dismissed. There are no grounds to agree a variation under regulations 18 and 19 of the Variations Regulations for the reasons given by the tribunal. The father's life-style at the effective date was £1,070 per week. The formula-based income is substantially lower than this. However, the father's life-style was funded in part by rental income and in part by drawings from the director's loan account. The former is excluded from consideration by regulation 20(3)(a). The latter is excluded from consideration by regulation 20(3)(c). It follows that regulation 20(1) does not apply and the mother's appeal against the refusal of the life-style variation application is dismissed.

Introduction

In the language of the child support legislation, the appellant is the non-resident parent under the maintenance calculation, the first respondent is the Secretary of State and the second respondent is the parent with care. For convenience, however, I shall refer to them in this decision as the father, the Secretary of State and the mother respectively. For all practical purposes the Secretary of State's functions in relation to child support are carried out by the Child Support Agency (the CSA).

The CSA is at present required by legislation to operate two child support schemes in parallel. The "old scheme" is governed by the provisions of the Child Support Act 1991 (and secondary legislation) as it was before amendment by the Child Support, Pensions and Social Security Act 2000 in March 2003. This case, however, is covered by the "new scheme", as the application for child support was made after that date. It is therefore covered by the 1991 Act as amended by the 2000 Act and the regulations made under those provisions. The "new scheme" formula is much less complicated than its old scheme predecessor. In particular, the new scheme applies a much narrower definition of "income". As will be seen, this difference has important implications for the present appeal.

The father now appeals against the decision of the Brighton appeal tribunal on 7 October 2005. The issue concerns the assessment of the father's child support liability as at August 2004 for his younger son, born on 16 August 1988 (and so who was then aged 16, now 19), and his daughter born on 21 June 1992 (and so who was then aged 12, now 15).

This appeal was the subject of an oral hearing on 22 January 2008, held at the Asylum and Immigration Tribunal venue in London (because of building works at the Commissioners' offices). The father attended the oral hearing, represented by his solicitor, Mr Fryer. The Secretary of State was represented by Mr Scoon of the Office of the Solicitor to the Department for Work and Pensions. The mother had indicated in correspondence that she would not be attending the hearing. Although she was not present, I have considered her written submissions carefully. Moreover, this is an inquisitorial and not an adversarial jurisdiction, so I have considered all the points that might conceivably be taken whether or not they have been raised by any of the parties. I am grateful to all parties for their assistance.

The background to the present appeal

7. The breakdown of the parents' marriage appears to have been accompanied by some acrimony and the financial arrangements have been the cause of further tension. There is a voluminous file of papers for this appeal. For the purposes of the present appeal I will confine myself to the issues particularly relevant to these proceedings.

The parents married in 1992. The father is a graphic designer and runs his own business through a company of which he is a director (his brother is the company accountant). The mother has an NVQ qualification in the field of finance. There are three children (only the younger two are relevant for present purposes). The parents separated in March 2002 and the mother petitioned for divorce in May 2002; the father cross-petitioned in August 2002. The decree absolute was issued on the father's petition in January 2003.

In February 2003 an FDR hearing was held in Brighton county court. The father agreed to pay £250 a month in maintenance for each of the three children pending the final hearing. A final hearing was held in July 2003 at the county court. As part of this process the parties exchanged standard form financial statements in the normal way. Those Form Es are on file in this appeal. It is evident on any reckoning that the parties led a comfortable middle-class life-style.

A copy of the July 2003 county court consent order is also on file (docs 108-110). The consent order dealt with a range of property adjustment, capital and income matters that do not need to be rehearsed here. However, as part of that order, the father undertook (undertaking 5):

"To pay maintenance for the children at the rate of £250 per calendar month per child for the parties' two youngest children as from 13 August 2003 until completion of the CSA assessment in relation to the said children and commencement of payment of the sums due under the said assessment."

It may be that the mother thought any CSA assessment would be "there or thereabouts" the figure of £250 per child per month. We do not know. But if that was her impression, subsequent events were to dash that expectation.

The history thereafter is a little murky as regards compliance with the terms of that consent order. According to the mother, the father paid the aggregate sum of £500 a month for some months but she then applied to the magistrates' court due to his poor payment record and in April 2004 he was ordered to pay £500 a month into court as from 1 February 2004 (doc 107). According to the father, the magistrates accepted that he was not in arrears and dismissed the mother's case (doc 111). The letter from the magistrates' court dated 19 April 2004 (doc 131) suggests that the mother's account of the outcome of those proceedings is the more accurate one.

The CSA's maintenance calculation

Whatever happened, a little over a year after the consent order had been made the father made an application to the CSA, which was received by the Agency on 24 August 2004 (docs 17-25). He stated that he was employed as a company director on a monthly salary of £1,086.25 (equivalent to £13,035 a year).

The CSA then processed the father's application (docs 27-33). This was done promptly with a maintenance calculation being issued on 28 September 2004. The effective date was identified as 24 August 2004 and the relevant week as the week ending 23 August 2004. However, based on the father's modest declared earnings as a company director on the CSA application form, the outcome was a maintenance calculation in the sum of just £16 a week for both children together (see docs 99-101). This amounts to a figure of around £69 (rather than £500) a calendar month.

Unsurprisingly, and doubtless with a degree of understatement, a CSA file-note of a telephone conversation on 30 September 2004 records the mother as being "not happy" about the level of this assessment and about the consent order being ignored (doc 32). The officer who took the call "explained about variations ref his dividends". The officer also spoke to the father the same day, mentioning that the mother might apply for a variation on this basis. The father's response was that "the divs have been kept low to improve the business".

The CSA's decision on the mother's application for a variation

The mother duly applied for a variation of the maintenance calculation on 1 November 2004 (docs 34-39). She applied on the grounds of the father's capital assets (doc 36), life-style inconsistent (37) and income not taken into account (doc 38). I note that the complete application form has not been included in the case papers. I do not think anything turns on this point, as these were the three grounds reiterated in the mother's covering letter (doc 40).

The mother also noted in her letter that the father had declared a nil dividend income for the financial year starting June 2004, although she also calculated that over £43,000 had gone into his bank account from the company in the previous year. She described the father's CSA-declared income as "nonsense" and the £16 maintenance calculation as "offensive", pointing out that "he has been paying child maintenance of £500 per month for some time and can clearly afford to keep doing so". She also reported that the court was due to hear her consent order variation application on 19 November 2004.

The mother later obtained the court's approval (doc 42) to disclose the father's sworn Form E (docs 43-62, dated 13 October 2004). The father disclosed interests in two properties, both subject to mortgages, a loan account of £72,000 with his company, and for the current year rental income of £13,000 and a director's salary of £13,035 gross. In all, the father estimated his current annual income as £38,112.16 and his income for the next year as £19,885.84. He also particularised his "reasonable future income needs", which he said totalled £61,275.78 a year (doc 57).

The father also made representations to the CSA about the mother's application to vary the formula assessment (docs 94-95). He reported that the mother's application to vary the consent order had been dismissed and referred to various alleged material omissions from her own Form E. (I should add these allegations were vehemently denied by the mother – see docs 105-106; fortunately they do not need to be resolved in the context of these proceedings). The father confirmed his director's salary as being £1,086.25 a month (see also payslip at doc 97). He also stated that he loaned his share of the divorce settlement to the company, which "repays me as and when cash-flow and trading allows".

The father also provided a copy of a letter he had sent to the mother on 14 November 2004 (doc 96). In that letter he referred to already having paid the £500 child maintenance up to the end of September that year because of the late notification of the CSA order, which was effective from 24 August 2004. He calculated that he had therefore already paid 39 weeks "on account", and was setting up a standing order as from 17 May 2005 at the new and much reduced CSA maintenance rate.

On 15 March 2005 a CSA officer decided not to make a variation on the mother's application and so the original maintenance calculation of £16 a week remained in place. The explanation for that decision was set out at docs 9-16 for the benefit of the tribunal, dealing with each of the three grounds in turn. The mother appealed on 23 March 2005 (docs 102-104), referring to her previous correspondence and describing the father's life-style as "lavish" and alleging moreover that he "has lied to you about his income and is intent on cheating his children out of their maintenance".

Before the mother's appeal came before the tribunal, there was further and extensive correspondence from both parties, involving an unseemly but predictable combination of point-scoring and mud-slinging on both sides (docs 111-130). Nothing is to be gained by referring to these various matters in any detail.

The first and abortive tribunal hearing

The mother's appeal was first listed for hearing at the tribunal on 1 August 2005. It was listed for 3.40 p.m. and came on for hearing at 4.20 p.m. The District Chairman concerned quite properly adjourned the hearing for lack of time and referred the file for directions. A week later the same District Chairman issued detailed and comprehensive directions to the CSA, both parents and to what was then the Appeals Service (now the Tribunals Service) (docs 136-140). As the District Chairman rightly pointed out on the adjournment notice, this step should have occurred before listing for hearing in the first place. The District Chairman's directions sensibly included one to the effect that the mother's appeal should be treated as an appeal both against the underlying formula calculation and against the refusal of the variation application.

The CSA prepared a supplementary submission in response to the District Chairman's directions (docs 143-144). This included a recalculation of the father's income of £13,035 a year, subject to tax and national insurance, producing a revised net weekly income of £202.75 a week. This contrasted with the original weekly net income, which had been assessed at just £132.44 (doc 100).

The father also responded to the District Chairman's detailed directions by letter and with a bulky folder of supporting documentation (docs 145-266). This included an expenditure questionnaire (which was directed to reflect outgoings at August 2004) on which the father had entered against child support the entry "500.00 – since reduced" (doc 149). The mother also replied to the directions by letter with supporting evidence (doc 267-307).

The father's documentation included a mortgage application form dated June 2004, which had stated his basic salary to be £35,000 a year (the tribunal was later told that this figure was an exaggeration by an IFA [independent financial advisor] in order to secure a mortgage: docs 315-316). The father's paperwork also reported dividend income of between around £90,000 and £105,000 annually for each of the three earlier years from 2000/01 to 2002/03 (doc 168). He declared his own total personal income to be £161,878 a year (doc 172). The father's self-assessment tax form for the year ending 5 April 2004 was also disclosed (docs 180-195). This reported his PAYE income as £13,065 and rental income of £22,882 gross, £16,523 net. It reported his dividend income as £1,182 (doc 182). For the previous tax year (2002/03), dividend income had been reported as £40,078.41 (doc 198).

The mother's further evidence included the father's October 2002 Form E, on which he had declared dividend income of some £35,000 or so gross for both the current and last financial years (doc 300). This evidence, however, clearly related to a time that predated the period in issue for these proceedings.

The appeal tribunal hearing and decision

The substantive hearing of the mother's appeal took place at the Brighton appeal tribunal on 7 October 2005 (the reference to Fox Court on the Decision Notice is a typographical error). The tribunal comprised a District Chairman and a financially qualified panel member. Both parents attended, as did a CSA presenting officer. The hearing began at 10.20 and went through till after 1 pm. There is a full, clear and commendably legible handwritten note of the proceedings (docs 308A-323). It seems plain that all the relevant issues were ventilated.

The tribunal's decision was to allow the mother's appeals both against the underlying formula calculation and against the refusal of the variation application. As to the former, the tribunal confirmed the formula assessment of the father's income in the CSA's supplementary submission, so finding his net weekly income for formula purposes to be £202.75 (not £132.44). As to the latter, the tribunal refused the mother's application for variations on the basis of assets (regulation 18 Child Support (Variations) Regulations 2000 (SI 2001/156)) and income not taken into account/diversion of income (regulation 19 of the 2000 Regulations).

However, the tribunal agreed in the mother's favour that it was just and equitable to award a variation on the basis of life-style inconsistent (regulation 20 of the 2000 Regulations). The tribunal found the father's life-style to cost at least £1,070.00 a week. Having disregarded income which it ruled was outwith the scope of the rules, the tribunal found the father's total net weekly income to be £450 a week for the purposes of a variation (not just the formula-based £202.75). This resulted in a child support assessment of £90 a week for the two children as against the £16 p.w. reached on the basis of the CSA's calculation of the original formula income.

The father's application to have the tribunal's decision set aside was dismissed (doc 330) by a different tribunal chairman. The father's application for leave to appeal was also dismissed (doc 329). After some delay, but for reasons that were not his responsibility, the father's renewed application for leave to appeal was granted by Mr Commissioner Rowland on 26 June 2007 (doc 350).

The tribunal's findings and reasoning are contained in two documents. The first is the comprehensive Decision Notice of 7 October 2005 (docs 324-327). The second is the Statement of Reasons issued over a year later on 20 October 2006. The delay involved is obviously regrettable. The Statement of Reasons is in fact a detailed Statement of Reasons for the tribunal's finding that the cost of the father's life-style was £1,070 a week, the remainder of the tribunal's reasoning on the substantive points under appeal being contained in the original Decision Notice.

The central issue in the tribunal's reasoning is as follows. The tribunal concluded that the difference between the cost of the father's life-style (£1,070 p.w.) and his formula income (£202.75 p.w.) could be accounted for in two ways. First, the difference was funded in part by the father's rental income. This was calculated at £12,888 a year net (a gross of £16,523 [doc 195] less tax at 22%). Secondly, the tribunal found that the balance was met by drawings from the director's loan account. In short, the tribunal ruled, as a matter of law, that in applying an inconsistent life-style variation it could not take into account the latter (drawings from the director's loan account) but it could take into account the former (rental income).

On that basis the tribunal had regard solely to the father's rental income for the purposes of the variation calculation. It concluded that £12,888 a year net was equivalent to £247.85 weekly. This was added to the weekly formula income – subject to a minor typographical error, which need not concern me – to arrive at a total weekly net income of £450. As the tribunal noted, 20 per cent of that figure resulted in a weekly child support liability of £90. I note in passing that this is about £390 a month, by comparison with the consent order of £500 a month.

The arguments on appeal in summary

The father's principal ground of appeal, as elaborated upon by Mr Fryer at the oral hearing, is simple. He argues that the tribunal was wrong to have regard to his rental income when applying the inconsistent life-style variation (doc 334). In short, he says that rental income is not treated as income for the purposes of the basic formula and so likewise cannot be taken into account when applying a life-style variation. He relies on regulation 20(3)(a) of the Variations Regulations.

The mother naturally resists the father's appeal. She does not purport to address the legal issues. She expresses her sense of hopelessness at the proceedings (doc 386). In summary, she says she has been fighting for a more realistic amount of child support for over three years. She points out that the father is now liable to pay £8 a week for the youngest child but even manages to underpay this minimal liability as she says that he pays £32 a calendar month (rather than four-weekly).

The Secretary of State's representative initially involved on the appeal to the Commissioner (broadly) supported the father's appeal (docs 353-357). She argued that the tribunal's decision was erroneous in law and invited me to set it aside and remit the case for rehearing before a fresh tribunal. It was her submission that the tribunal's decision and reasoning disclosed four errors of law.

First, she argued that the tribunal was wrong in law to include the father's earlier payments of £500 child maintenance under the consent order within his life-style assessment. She contended that this amounted to double counting. Secondly, and agreeing with the father, she submitted that the tribunal was wrong to have regard to the father's rental income (citing Commissioner's decision CCS/1320/2005). Thirdly – and here she parted company with the father – she argued that the tribunal was wrong to disregard the drawings on the director's loan account. If this is right, this would of course have the effect of increasing the father's child support liability, as this accounted for most of the substantial gap between the formula income and the life-style income. Fourthly and finally, it is said that in calculating the father's weekly net formula income the tribunal should have deducted the amount of tax actually deducted, rather than have relied on the notional income tax deduction contained in the CSA's supplementary submission.

The father's further written submission adopted the first and fourth of these points but predictably took issue with the third ground identified by the Secretary of State's representative (docs 365-366). For that reason Mr Commissioner Rowland directed an oral hearing of this appeal.

I hope I do no disservice to the careful submissions of Mr Fryer and Mr Scoon at the oral hearing if I summarise their positions as follows. In essence they both contend that the tribunal's decision and reasoning was flawed in view of the first, second and fourth points in the Secretary of State's written submission to the Commissioner and outlined at paragraph 38 above. They fundamentally disagree on the third point. In short, Mr Fryer argues that the tribunal was right not to have regard to the father's drawings from the director's loan account when assessing his income for the purposes of a life-style variation application. Mr Scoon argues that the tribunal erred on this point by failing to ask itself the right questions (and in the right order) about these drawings.

I will consider each of these four grounds of appeal in the order in which they appear in the Secretary of State's written submission, all grounds which were essentially adopted with some embellishment by Mr Scoon at the oral hearing. Mr Fryer, of course, vigorously resisted what he described as the Secretary of State's cross appeal on the third ground.

Does voluntary child maintenance count as part of the father's "overall life-style"?

The first question is whether the tribunal was right to include the father's earlier payments of £500 a month in child maintenance in his life-style income. Both representatives submitted that this necessarily (and wrongly) included an element of double counting as it increased the amount to pay for the life-style and thereby would increase the child support payable under a variation award. They both argued that the £500 a month was supporting the life-style of the children and the parent with care, not the non-resident parent, and that it would be unfair and contrary to the policy of the legislation to include that sum in the assessment of the father's life-style.

This point does not appear to have arisen for decision at this appellate level before. The reason is fairly obvious. The inconsistent life-style ground is typically used where a parent with care has been issued with a nominal or low formula-based maintenance calculation but where the non-resident parent is living a lavish way of life, well beyond the means of his formula-based income, and then compounding the parent with care's sense of injustice by making little or no contribution to the financial support of the child or children. So the typical respondent to an inconsistent life-style variation application is paying no or at best minimal child support. This case is a little unusual in that at the outset at least the father was paying relatively substantial child maintenance under the consent order. This ground of appeal raises at least three inter-related issues.

First, as a matter of law what was the relevant time that the tribunal was concerned with? Given that the whole point of a regulation 20 variation is to compare the life-style costs with the formula income, then clearly the relevant time is the effective date for the purposes of the underlying formula assessment. This interpretation is confirmed by the wording of paragraph 4(2)(b) of Schedule 1 to the Child Support Act 1991 and regulations 20(1)(b) and in particular 22(1) of the Variations Regulations 2000. This analysis is also supported by the decision of Mr Commissioner Howell QC in decision CCS/1440/2004. In the present case the effective date for the basic maintenance calculation was 24 August 2004 and so the District Chairman's directions quite properly required evidence relating to the father's average monthly expenditure as at August 2004. So the tribunal focussed on the right period.

The second issue is whether as a matter of fact the monthly £500 child maintenance was actually in payment at the relevant time. The tribunal's Statement of Reasons records its findings on the father's life-style in considerable detail, with itemised amounts referenced to evidence before the tribunal. On this point it records "Child support maintenance payments £500 [per month] as declared by [father] on page 149" (i.e. in response to the earlier directions). As Mr Fryer observed, the tribunal did not note the father's caveat "since reduced". But of course the father's statement at page 149 was made in September 2005. The tribunal, as we have seen, was concerned with the position at August 2004. There was other contemporary evidence before the tribunal that £500 per month was in payment at that time (see e.g. the father's letter at doc 96) and the tribunal was quite entitled to reach the decision it did on the fact of payment. There is no error on the part of the tribunal here.

The third issue is the critical one, and involves a further question of law – even if the £500 monthly was in payment in August 2004, was the tribunal right to take it into account in assessing the father's life-style costs? Regulation 20(1)(b) of the Variations Regulations 2000 refers in broad terms to "the overall life-style of the non-resident parent". The expert commentary in the annotated legislation volume by Jacobs and Douglas, Child Support: The Legislation (2007/2008), argues that "overall life-style" is "wide enough to cover all aspects of personal behaviour, activities, interest and choices" (at p.721).

The Secretary of State and Mr Fryer both contend that the statutory language must be subject to the implied qualification that any payment of child maintenance is excluded from consideration of "the overall life-style of the non-resident parent", as such monies are not supporting his life-style but rather that of the children and (by implication) the parent with care. I disagree, and prefer the broad construction advanced in Jacobs and Douglas, and not as qualified as the Secretary of State and the father argue here, for three reasons.

The first is the reason given in Jacobs and Douglas. It is difficult to envisage a more general and open-ended expression than "overall life-style" in a statutory scheme that is usually characterised by the use of precise (if sometimes densely drafted) language. It seems to me that as a matter of the plain meaning of the words that the phrase "overall life-style" rules nothing in and rules nothing out.

The second and related reason is that those responsible for drafting regulation 20 have made no attempt to cut down the generality of that expression. By way of contrast, as we shall see, there are detailed provisions specifying which types of resources must not be taken into account when calculating the income used to fund the life-style in question (regulation 20(3)(a)-(e)). Yet there are no statutory exceptions to the activities encompassed in the assessment of a person's life-style; had that been the intention, such exclusions could readily have been spelt out.

The third reason relates to the underlying intention of the legislation. The purpose of the variations scheme is to arrive at a fairer assessment of child support liabilities in cases that do not fit neatly into the standard formula. As regards the inconsistent life-style ground, the objective is surely to use the non-resident parent's actual expenditure to arrive at a more realistic picture of his (or sometimes her) overall life-style and so income than the ordinary formula process allows.

We need only consider the wider implications of the arguments advanced by both representatives. The fact is that in other situations a non-resident parent with a low formula income may be spending substantial sums on "wine, women and song". He or she may be wasting money on on-line gambling or buying illegal drugs at considerable cost to feed an addiction. As I suggested at the oral hearing, he or she may follow a football team up and down the country to home and away games alike at vast expense. On the other hand, he or she may be making massive weekly donations to charitable causes. Or he or she may be devoting a substantial proportion of their income to child maintenance payments, whether under an entirely private agreement or under a court consent order.

In my judgment, such expenditures are all part of the particular non-resident parent's life-style. It matters not whether the outlays are lawful or unlawful, wise or unwise, worthy or unworthy. An individual who donates sums to a charity for the homeless is primarily doing so as part of his or her "overall life-style", as Mr Fryer conceded, not as part of the actual or reformed life-style of rough sleepers. I am not convinced that this changes if the monies are paid in respect of child maintenance.

A hypothetical case, using a combination of child support jargon and somewhat dated language, might illustrate this. Let us assume that as well as providing some funds to support his "qualifying children" from his former marriage, a non-resident parent was also managing to support a current mistress, with whom he was not actually living, and her children (who are not part of any child support claim). In my judgment all these expenditures are part of his life-style. We cannot include the support to the mistress and her children but ignore the monies paid voluntarily to the ex-partner with the qualifying children when applying an inconsistent life-style variation. The fact is he could afford to do both despite his formula income. It matters not whether he is paying the mistress twice the amount he is paying the ex-partner or vice versa.

In my judgment to describe the payment of child maintenance under a consent order as "double counting" for the purpose of an inconsistent life-style variation is to miss the point and to misconstrue the legislation. The tribunal was entirely justified in including the monthly payments of £500 in child maintenance in the father's overall life-style as at August 2004. Indeed, in my judgment the tribunal would have erred in law if it had failed to do so. I therefore reject the first ground of appeal in relation to the tribunal's decision.

Is rental income excluded from consideration on a life-style variation?

The second ground of appeal concerns the tribunal's decision to have regard to the father's rental income when increasing his net weekly income for the purposes of the variation award. On this point the father and the Secretary of State's representative are at one. They both say that the tribunal could not rely on the father's rental income as part of the basis for an award of an inconsistent life-style variation. I agree with those contentions for the following reasons.

The tribunal concluded that the case had been made out for such a variation within regulation 20(1) of the Variations Regulations. However, regulation 20(1) is expressly stated to be subject to regulation 20(3). This states that regulation 20(1):

"shall not apply where the Secretary of State is satisfied that the life-style of the non-resident parent is paid for from –

(a) income which is or would be disregarded for the purposes of a maintenance calculation under the Maintenance Calculations and Special Cases Regulations;"

So does rental income fall within regulation 20(3)(a) with the result that it must be ignored on the variation application? The father and the Secretary of State's representative rely on the decision of Mr Commissioner Jacobs in CCS/1320/2005. There the Commissioner held that "disregarded for the purposes of a maintenance calculation" meant not taken into account in the formula assessment. The statutory language was not confined to the specific disregards set out in paragraph 2 of the Schedule to the Maintenance Calculations and Special Cases Regulations 2000 (see CCS/1320/2005, paragraph 15). Mr Commissioner Jacobs was concerned with dividend income in CCS/1320/2005. However, the same principle must logically apply to rental income – there is no reason for distinguishing it.

In CCS/1320/2005 Mr Commissioner Jacobs gave two reasons for adopting this construction. The first was that the narrow reading of "disregard" – confining it to currency conversion charges or funds held overseas which were barred from transfer to the United Kingdom, as set out in paragraph 2 – made no sense as "they are not sums on which a life-style could be supported". The second was that it would make no sense to exclude dividend income under the formula if it could then be taken into account on a variation, subject only to the just and equitable requirement. I have to say that for myself I am not persuaded by the second argument. However, the first of those arguments seems to me unassailable.

I note that rental income is taken into account in cases still governed by the old scheme formula. This is because for that purpose it counts as other periodical income within paragraph 15 of Schedule 1 to the Child Support (Maintenance Assessment and Special Cases) Regulations 1992 (SI 1992/1815), subject to possible disregards that may apply.

But this is a new scheme case. As a general principle, the Schedule to the Maintenance Calculations and Special Cases Regulations 2000 takes no account of rental income. Rental income is accordingly income that is "disregarded for the purposes of a maintenance calculation". It therefore falls within regulation 20(3)(a) of the Variations Regulations 2000 and cannot be relied on as part of a life-style variation application. Whether that outcome is wise as a matter of policy is not for a Commissioner to determine. As a matter of law the tribunal erred by having regard to the father's rental income. For that reason alone the decision of the tribunal must be set aside.

I should mention at this stage that there is a further issue in relation to the rental income which was raised at the oral hearing by Mr Scoon and which might conceivably have assisted the mother. That question is whether the rental income should actually be considered as part of the father's self-employed income. If so, then of course it should have been taken into account under the standard formula even in a new scheme case (see Part III of the Schedule to the Maintenance Calculations and Special Cases Regulations 2000).

In decision CCS/2128/2001, Mr Commissioner Mesher explained the position as follows:

"The mere ownership of property and the receipt of rent and payment of expenses or liabilities would not constitute employment as a self-employed earner. That situation is more properly looked at as the ownership of a capital asset, which produces income. But there will come a point, depending on the circumstances of individual cases, at which the amount of administration and/or activity involved even in the letting out of a single property would amount to the carrying on of self-employment" (paragraph 8).

Mr Commissioner Mesher was following the decision of Mr Commissioner Goodman in R(FC) 2/92, where it was held that "the ownership by an individual of a tenanted house, the collection of the rent, the execution of repairs and the carrying out of other landlord's duties" did not constitute the carrying on of a business (R(FC) 2/92, paragraph 12). Those authorities were also applied by Mr Commissioner Jacobs in R(CS) 2/06 (referred to by Mr Scoon as CCS/2045/2005).

How do those principles apply here? The father had interests in two properties at the time in question. One ("Property B") was a property he co-owned with his new partner and is not relevant here. The father was the sole owner of the other, "Property A", the ground floor of which was used by the company as an office; at one time the father lived in a flat above the office. He had previously co-owned this property with the mother, but her interest was transferred to him as part of the July 2003 consent order (doc 109).

According to the father (doc 95), Property A was let to the company for trading purposes, the rent paying for the mortgage. A copy of the lease is at docs 228-264. He declared this income to HMRC, and it was taxed under what was then known as Schedule A in the "Land and Property" section of the self-assessment tax return. This is confirmed (for the year to April 2004) by docs 194-195. This discloses a gross rent of £22,882 for the year (£16,523 net).

The tribunal here did not consider the possibility that the rental income was self-employed income. It should not be criticised for that. Given the weight of the case law authorities, and the inclusion of the father's rental income on the Land and Property rather than Self-Employed section of the tax return, I do not think that any tribunal on the facts of this case could reasonably have concluded that he was in business as a self-employed landlord. As Mr Fryer argued, the father was not conducting a business separate from the regulation of his own company – this was part and parcel of running the graphic design company. The charging of rent went back some way and was not a construct for avoiding a child support liability. So the rental income was not conceivably self-employed income. The fact remains that the tribunal wrongly took that income into account on the variation application.

Are drawings from a director's loan account excluded from consideration on a life-style variation?

The third ground in issue in the appeal, introduced by the Secretary of State and robustly contested by Mr Fryer on behalf of the father, concerns the tribunal's decision to exclude from consideration the father's drawings from the director's loan account. I note that in relation to the mother's appeal on the assets ground, the tribunal had found as follows:

"[The father] had an asset in the form of a debt owed to him by his company (the director's loan account). However, given that company's financial position, it was reasonable that he should retain that asset which represented the company's working capital. If he were to have realised the debt, he would no longer have had a vehicle with which to earn his living. The same is true of the capital value of [the father's] shares in that company."

The tribunal further reasoned in relation to the life-style ground that "to the extent that [the father's] lifestyle was financed from the director's loan account it was financed from his assets and the tribunal was not permitted to take it into account (see regulation 20(3)(c) and 18(2)(a) [respectively of the Variations Regulations]". In summary, regulation 20(3)(c) excludes consideration of assets as defined by regulation 18, and regulation 18(2)(a) defines assets to include "money, whether in cash or on deposit".

The Secretary of State's submission is that the tribunal erred in law here. That argument seems to run as follows, if I follow Mr Scoon correctly. A life-style inconsistent with declared income constitutes a case for a variation by virtue of paragraph 4(1) of Schedule 4B to the 1991 Act when it falls within (for present purposes) regulation 20(1) of the Variations Regulations. However, by virtue of regulation 20(3), it is conceded that regulation 20(1) does not apply if the Secretary of State "is satisfied that the life-style of the non-resident parent is paid for from….(c) assets as defined for the purposes of regulation 18, or income derived from those assets".

Furthermore, Mr Scoon argues, "asset" is defined for the purposes of regulation 18 by regulation 18(2). This refers in particular to "(d) a chose in action which has not been enforced when the Secretary of State is satisfied that such enforcement would be reasonable". In addition, however, regulation 18(2) does not apply in the situations set out by regulation 18(3). These include an exception "(b) in relation to any asset which the Secretary of State is satisfied is being retained by the non-resident parent to be used for a purpose which the Secretary of State considers reasonable in all the circumstances of the case."

Mr Scoon further argued that this tribunal had failed to go through these provisions in the staged manner set out by Mr Commissioner Powell in CCS/2262/2006 (see especially at paragraphs 15 and 16) and so erred in law. It is said that the tribunal here decided that the money in the director's loan account was a chose in action which it would not be reasonable to enforce (see regulation 18(2)(d)). As it did not fall within the definition in regulation 18(2), it could not be covered by regulation 20(3)(c). Accordingly, the tribunal was wrong to exclude these drawings in its consideration of the life-style variation.

Mr Commissioner Powell in CCS/2262/2006 was concerned with a case turning on the application of regulation 18, the assets ground, and not regulation 20, the life-style ground. I remind myself also that the tribunal in the present case had declined to make a variation on that ground. That aspect of this tribunal's decision has not been challenged on appeal and I do not think could seriously be questioned.

In my judgment the tribunal fundamentally reached the right decision on this point, albeit its decision and reasoning might have been more felicitously phrased. The key is to be found in the tribunal's reference to regulation 18(2)(a), which provides a partial definition of "asset", and which has not been addressed by the Secretary of State's representatives in their written and oral submissions.

In this context it is important to remember that in law the father and the father's company have separate legal personalities. This applies even though the company is essentially the father's one-man company. The tribunal's decision and reasoning on the assets ground makes it clear it was fully aware of this distinction. As a result, and in legal terms, the sum of money held in the director's loan account is liquid capital owned by the company, not by the father. To that extent the capital is the company's asset. But those funds also reflect a debt, or chose in action, which the company owes to the father. The chose in action is the father's asset. In my judgment the import of the tribunal's reasoning in relation to the assets ground was essentially two-fold.

First, the tribunal acknowledged that the father owned the asset being the chose in action represented by the debt. To the extent that this debt had not been enforced, the tribunal concluded that it was reasonable for the father not to do so given the company's position. As a result, the chose in action was not an asset within regulation 18(2)(d) and so did not enter into the tribunal's computation process for the £65,000 threshold.

Secondly, however, the tribunal implicitly accepted in its decision that the company had the capital assets represented by the funds in the director's loan account. Although they did not need to address the point, it is also implicit in the tribunal's decision and reasoning that the father had the ability to control that asset represented by the capital funds in the director's loan account (within regulation 18(1)(a) and (2)(a)). It is also consistent with its decision that the tribunal concluded that those funds (the company's working capital) fell within regulation 18(3)(b) and were thereby excluded from consideration as an asset in assessing whether the £65,000 threshold had been met. Moreover, those funds retained the character of capital when they were transferred to the father's personal account from the company account.

Turning to the inconsistent life-style ground, the tribunal stated that it relied on regulation 20(3)(c) as a reason for ignoring the drawings from the loan account. Mr Scoon argues that this was wrong – he submits that if the loan account was not an asset for the purposes of regulation 18, then in turn regulation 20(3)(c) cannot apply. However, the commentary in Jacobs and Douglas's annotated legislation volume suggests (at page 723), that only regulation 18(2) applies to the reference in regulation 20(3)(c), as that is the only place where types of asset are defined in regulation 18. The commentary suggests that regulation 18(3) is not included by the general reference to regulation 18 in regulation 20(3)(c).

Presumably the argument underlying the commentary runs thus. Regulation 18(2) is the definition provision "for the purposes of regulation 18" and so must be what regulation 20(3)(c) is referring to. Regulation 18(3) is not a defining provision; it is a disapplying provision and so is not incorporated by reference in regulation 20(3)(c). The counter-argument, of course, is that regulation 18(3) qualifies regulation 18(2) and so also applies for the purpose of regulation 20(3)(c). However, I do not think I need to resolve this conundrum for the purpose of the present appeal.

So what does all this all mean for the present case? True, the father's chose in action itself (or debt) in this case was not an asset for the purpose of regulation 18(2)(c) and so could not thereby be excluded from consideration on a life-style variation by regulation 20(3)(c). But it was not the chose in action itself that was helping him fund his life-style. Rather, it was drawings from the director's loan account in partial satisfaction of that debt that enabled him to do so. These were capital receipts in his hands, for the reasons discussed below. Moreover, the capital funds undoubtedly owned by the company were an asset over which the father had effective control so as to bring them within regulation 18(2)(a). As they fell within regulation 18(2)(a), they were in any event defined as assets for the purpose of regulation 18 and so the tribunal was right to say they were covered by regulation 20(3)(c), meaning that they could not be used as part of the life-style ground.

There is a more fundamental point still. The child support scheme is premised on an assessment of the non-resident parent's income. Capital – subject to the assets variation ground – is not the issue. In CCS/3387/2006 Mr Commissioner Jacobs held that withdrawals from a director's loan account "would normally be classified as capital not income" (para. 10). The Court of Appeal has recently approved that analysis in Chandler v Secretary of State for Work and Pensions [2007] EWCA Civ 1211, reversing the decision of Mr Commissioner Turnbull in CCS/2806/2006. The decision of the Court of Appeal is binding on me as a matter of precedent, unless it can be distinguished.

It is true, of course, that Chandler was an old scheme case and the present case is a new scheme case. However, in CCS/3387/2006 Mr Commissioner Jacobs was also concerned with a new scheme case. In my judgment the principle laid down by the Court of Appeal in Chandler is of general application. It is true that the Court's view was reinforced in part by the presence within the old scheme of certain anti-avoidance rules – which are not replicated in the new scheme – but this consideration does not alter the fundamental question of legal construction. As Mr Fryer argued, in Chandler the Court of Appeal was concerned with regular drawings from a director's loan account, and these were classed as capital repayments, not income. The argument applies even more forcefully where the drawings are irregular, as here.

I conclude therefore as a matter of law that the tribunal was right not to have regard to withdrawals from the director's loan account when determining the father's income for the purposes of an inconsistent life-style variation. There is no error of law in the tribunal's decision on this point.

The deduction of tax from the father's director's salary

The fourth and last ground of appeal is a relatively minor issue in the overall scheme of things. It relates to the income tax treatment of the formula-based income. It will be recalled that originally the father's formula weekly net income was calculated at £132.44. The District Chairman's directions pointed out that this was based on a PAYE code that resulted in a very high tax liability for such a modest salary.

In its decision the tribunal confirmed the formula assessment of the father's income as stated in the CSA's supplementary submission (£202.75). This figure had been calculated by deducting the annual personal allowance from the father's gross annual salary, notionally applying the 10 per cent and 22 per cent tax bands to the remaining income and finally deducting actual payments of national insurance contributions (doc 144). The tribunal therefore adopted the same approach.

The Secretary of State's representative (supported by Mr Fryer) now argues that this approach was wrong. She refers to paragraph 5 of the Schedule to the Child Support (Maintenance Calculation and Special Cases Regulations) 2000 (SI 2001/155). This states as follows:

Deductions
5. - (1) The deductions to be taken from gross earnings to calculate net income for the purposes of this Part of the Schedule are any amount deducted from those earnings by way of -

(a) income tax;
(b) primary Class 1 contributions under the Contributions and Benefits Act or under the Contributions and Benefits (Northern Ireland) Act; or
(c) any sums paid by the non-resident parent towards an occupational pension scheme or personal pension scheme or, where that scheme is intended partly to provide a capital sum to discharge a mortgage secured upon that parent's home, 75 per centum of any such sums.

(2) For the purposes of sub-paragraph (1)(a), amounts deducted by way of income tax shall be the amounts actually deducted, including in respect of payments which are not included as earnings in paragraph 4.

The Secretary of State's representatives, both on paper and at the oral hearing, rely in particular on the phrase in bold print above. In their view, therefore, the actual (and higher) income tax deduction should be applied. Mr Fryer agrees with that construction. The result, of course, would be to make an already low assessment of the father's income – and hence of his child support liability – even lower still. On any reckoning this is not an attractive prospect.

It may be galling for the tribunal to be told that the CSA may have said one thing to the tribunal (when the presenting officer accepted that the tax had been incorrectly calculated in the original assessment: doc 309) but that the Secretary of State is now submitting to the Commissioner that the CSA's concession at the hearing was wrong. It will certainly fuel the mother's sense of injustice. But is the Secretary of State now right?

The father's PAYE salary for August 2004 (and the preceding three months at least) was £1,086.25; yet in August 2004 alone his income tax deduction was a startling £436.68 – and there were similar tax deductions for the three previous months. An individual on a salary of just over £1,000 a month would not normally be paying income tax at over 40 per cent. However, the District Chairman's directions noted that the father's company accountant (also, as mentioned above, his brother) had informed the CSA that the tax code reflected the fact that the father had previously received benefits in kind (a company car) and the tax code had yet to be readjusted (doc 31). This was confirmed at the tribunal (doc 312).

Paragraph 5 of the Schedule cited above undoubtedly requires – at least as a starting point and indeed as an end point in the vast majority of cases – the deduction of the actual not notional amounts of income tax payments. To that extent the tribunal would appear at first sight to have fallen into error. However, in my judgment the decision discloses no error of law and it is certainly not of itself a justification for setting aside its decision. In my judgment the tribunal was relying on the fall-back discretionary power in paragraph 6(4) of the Schedule to the Maintenance Calculations and Special Cases Regulations 2000. Paragraph 6(4) enables the Secretary of State (and the tribunal) to estimate normal weekly earnings on a different basis if the standard method does not accurately reflect the father's normal earnings. In my view paragraph 6(4) is sufficiently broadly worded to justify the approach taken by the tribunal here.

It is true that the tribunal made no mention of paragraph 6(4) in its reasoning. However, a highly experienced tribunal such as that sitting on this appeal would inevitably have been well aware of that provision – indeed it had presumably prompted the District Chairman's original direction to the CSA to effect the recalculation. Moreover, the tribunal was then relying on a CSA recalculation, which had been advanced by the CSA and not challenged by the father at the hearing. A tribunal need not dot every "i" and cross every "t" in its decision by referring to its detailed reasoning and legal authority for every proposition, however self-evident. The tribunal simply did what was both lawful and sensible; it did not err in law in this regard.

I therefore conclude that the tribunal was right to include the £500 voluntary child maintenance as part of the father's August 2004 life-style costs. The tribunal was correct to disregard the father's withdrawals from the director's loan account in determining the life-style variation. The tribunal was also right to adopt the figure of £202.75 as the father's formula-based net weekly income.

The tribunal's sole legal error was to have regard to the rental income when making an award of a life-style variation. For that reason, and that reason alone, I have no option but to set aside the tribunal's decision under section 24(2) of the Child Support Act 1991.

The question then is how to dispose of the matter. There is a range of options open to me under section 24(3) of the 1991 Act. I can, where appropriate, make the decision that the tribunal should have made, with or without further findings of fact. Alternatively, I can refer the matter back to a tribunal (or indeed the Secretary of State) with directions for its redetermination.

The possible significance of the new regulation 19(1A) of the Variation Regulations 2000

At this point I should interpose that were this case to arise for decision on appeal for the first time at a tribunal today there is one obvious provision that might be relevant. Regulation 19(1A) of the Variations Regulations 2000 now reads as follows:

"(1A) Subject to paragraph (2), a case shall constitute a case for the purposes of paragraph 4(1) of Schedule 4B to the Act where –

(a) the non-resident parent has the ability to control the amount of income he receives from a company or business, including earnings from employment or

self-employment; and
(b) the Secretary of State is satisfied that the non-resident parent is receiving income from that company or business which would not otherwise fall to be taken into account under the Maintenance Calculations and Special Cases Regulations."

Regulation 19(2), which qualifies this provision, stipulates that the income concerned must amount to at least £100 a week.

This provision might well in principle apply to a case with similar facts to the present case assuming, of course, that it can be established that the father is drawing income (rather than capital) from his company in addition to the modest director's salary. However, regulation 19(1A) was quite properly not considered by the tribunal for the very simple reason that it was not in force at the time with which the tribunal was concerned. Regulation 19(1A) was inserted by regulation 8(5) of the Child Support (Miscellaneous Amendments) Regulations 2005 (SI 2005/785) with effect from 6 April 2005 – some six months or so after the period with which the tribunal was concerned.

According to the official Explanatory Memorandum that accompanied the change in April 2005, the new regulation was introduced because "The way in which some non-resident parents receive their income is reducing their liability for maintenance in the new child support scheme by an unacceptable degree" (Annex A, page 8). The mother will doubtless say that this is precisely the case here.

So, if I were to send the case back for rehearing, could a new tribunal now consider the potential application of regulation 19(1A)? The answer is no, as a new tribunal would have to stand in the position of the previous tribunal and hear the mother's appeal afresh. However, like the previous tribunal, it would be bound to consider the circumstances obtaining at the time of the effective date (August 2004) and at the date that the Secretary of State made the variation refusal decision (in March 2005). Both these dates predate the change in the law. Even though the tribunal here heard this appeal after the April 2005 change in the law, it had to apply the law in force before that date.

So what could the mother do? She could apply now to the CSA for what is technically known as a supersession. She might persuade the CSA that regulation 19(1A) applies to the present situation. However, the general rule is that a supersession takes effect from the week in which the application is made (Child Support Act 1991, section 17(4) and (4A)). There would not appear to be provision for backdating a decision in circumstances such as this, where the law has changed. By now, however, the horse has to a large extent bolted.

The Commissioner's decision on this appeal

I must therefore decide how to dispose of this appeal. Mr Scoon submits that this case needs to go back to a fresh tribunal for rehearing because of the errors of law he identifies. Mr Fryer submits that this matter has gone on for quite long enough, all the evidence was ventilated and considered below, and there is nothing to be gained by a remittal.

I agree with Mr Fryer on this matter, not least as I have found against Mr Scoon's submissions on the fundamental point that was in issue between the two representatives at the hearing (ground 3 in the appeal). If I had adopted Mr Scoon's submissions I think I would have been duty bound to remit this to a new tribunal including a financially qualified member. However, I do not believe that that is necessary given my findings on the law.

Insofar as they are relevant, I adopt all the findings of fact of the tribunal. I do not need to make any further findings of fact. I accordingly give the following decision, or rather decisions, as those that the tribunal should have given.

The mother's appeal against the decision of 28 September 2004 regarding the basic maintenance calculation is allowed and the Secretary of State's decision revised. The father's formula-based net weekly income was £202.75, not £132.44. This applies to the liability from the effective date of 24 August 2004. As the father's net weekly income exceeds £200, the basic rate of 20 per cent applies given that there were two qualifying children at that date. Arithmetically this results in a child support liability of £40.55; this is rounded to £41 per week for two children from the effective date by virtue of regulation 2(3) of the Maintenance Calculations and Special Cases Regulations 2000.

The mother's appeal against the decision of 15 March 2005 on the variation application is dismissed. There are no grounds to agree a variation under regulations 18 and 19 of the Variations Regulations for the reasons given by the tribunal. The father's life-style at the effective date was £1,070 per week. The formula-based income is substantially lower than this. However, the father's life-style was funded in part by rental income and in part by drawings from the director's loan account. The former is excluded from consideration by regulation 20(3)(a). The latter is excluded from consideration by regulation 20(3)(c). It follows that regulation 20(1) does not apply and the mother's appeal against the refusal of the life-style variation application is dismissed.

I make one final point on the facts. The decision above stands in the place of the Secretary of State's decisions of 28 September 2004 and 15 March 2005 and replaces the tribunal's decision. It may be subject to subsequent alteration if there are later decisions in place (e.g. as regards the parties' second child ceasing to be a qualifying child in the interminable time it has taken to resolve this matter).

Some concluding observations

Finally, however, and at the risk of making even longer what is already a lengthy decision, I cannot leave this matter without making the following observations. In many ways this appeal highlights four particularly problematic issues in the arcane world of child support. I simply draw attention to these points – they are ultimately questions of the policy underpinning the relevant law, and the Child Support Commissioner's writ runs to law but not to policy.

The first is the so-called "12 month rule". Under the old scheme a court consent order was binding on the parties and could not be overturned unless the parent with care claimed income support or income-based jobseeker's allowance. The position is different under the new scheme – a consent order locks the CSA out for a period of one year and no more (Child Support Act 1991, section 4(10)(aa)). It is sometimes argued that this was a retrograde change, in that it allows parents with care to agree a consent order under which they receive substantial capital but low child maintenance provision, which they can then unpick by applying to the CSA a year down the line.

This case shows that the boot may lie on the other foot. A non-resident parent may agree relatively generous child maintenance provision under a consent order and then apply a year later to the CSA for a maintenance calculation. If he has complex financial affairs, and the CSA fail adequately to investigate them, the CSA child support award may be substantially lower than the level of maintenance agreed in the consent order. Of course, the father's financial circumstances might have changed significantly for the worse in the meantime. But equally they might not.

There is, however, a further dimension to the 12 month rule in this case. In fairness to the father the original consent order did not envisage that the £500 a month was unlimited in time. It was not even limited to the children finishing full-time education. It was expressly stated to be subject to "completion of the CSA assessment in relation to the said children". As a matter of law the father was perfectly entitled to apply to the CSA after one year. It is unclear whether the mother was advised to this effect at the time that she agreed the consent order but that is not a matter for me.

The second problematic issue relates to the definition of income. The old scheme had a very broad definition of income (see Schedule 1 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (SI 1992/1815). It was certainly broad enough to include dividend income and rental income. The new scheme, designed to be simpler for the CSA to operate, has a much narrower definition of income – essentially earned income, self-employed income along with certain benefit, tax credit and pension income. The official thinking appears to be that where a non-resident parent enjoys the benefit of other forms of income, then that is best addressed through the variations scheme. This case illustrates the difficulty in attaining an appropriate balance between operational efficiency for the scheme as a whole and justice in the individual case.

The third point is this. The child support appellate machinery is subject to the limitations of section 20 of the Child Support Act 1991. No tribunal can act outside those boundaries. Section 20(7) of the 1991 Act provides that the tribunal "shall not take into account any circumstances not obtaining at the time when the Secretary of State made the decision". Tribunals cannot therefore take into account all matters down to the date of the hearing of the appeal. So this tribunal had no power to look at the possible application of regulation 19(1A) from a date after April 2005. Nor would any tribunal that I sent this case back to (several years down the line).

The final issue of note also relates to jurisdiction. These parents have, to date, litigated various aspects of their child maintenance dispute in the county court, the magistrates' court, the appeal tribunal and now before the Child Support Commissioner. True, they have not yet visited the Court of Appeal, but this is hardly a coherent dispute resolution system that suits users' needs.

I conclude with this observation. As the mother said to the appeal tribunal, £8 a week for each child "does not cover their bus fares" (doc 310). She described the tribunal's revised figure of £45 per week per child as "more realistic" (doc 386). I suspect an impartial observer might find it hard to dissent from either assessment. The mother in her most recent submission "trusts the Commissioners to make the right decision and that justice will be done".

The Commissioner's task is to decide the appeal and reach the right decision according to the law as laid down in the Child Support Act 1991 and the relevant regulations. Some might take the view, to echo the words of Johnson J in Phillips v Peace [1996] 2 FLR 230 at 231, that a child support maintenance calculation of £16 a week for two children in circumstances such as those in this case is "startling to the point of absurdity". However, on

my interpretation and application of the relevant law to the facts, the correct amount payable was £41 per week for two children as from the effective date. Whether that accords with the justice of the case, in terms of its intrinsic merits, is for others to judge.

(signed on the original) N J Wikeley

Deputy Commissioner

25 January 2008

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