UK Social Security and Child Support Commissioners' Decisions

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[2008] UKSSCSC CCS_3680_2007 (29 May 2008)

PLH Commissioner's File: CCS 3680/07

CHILD SUPPORT ACTS 1991-1995

APPEAL FROM DECISION OF APPEAL TRIBUNAL

ON A QUESTION OF LAW

DECISION OF THE CHILD SUPPORT COMMISSIONER

Appellant: [the parent with care]

Respondents: (1) Secretary of State

(2) [the non-resident parent]

Appeal Tribunal: Preston

Tribunal Case Ref: 075/06/00304

Tribunal date: 31 May 2007

Reasons issued: 20 July 2007

1. The decision of the Preston appeal tribunal sitting on 31 May 2007 was in my judgment erroneous in law as it was based on a material misdirection as to the proper scope of the appeal and the issues that could be raised in it. I set the decision aside and as a proper determination of the relevant issues will require further investigation of the evidence and the facts, refer the case under section 24(2)(d) Child Support Act 1991 to a freshly constituted tribunal for that to be done. As the course I am taking will enable both the parents involved in this case to have the further opportunity they desire to make further written or oral submissions about the facts and adduce any further relevant evidence they wish, I decline each of their applications for a separate oral hearing of this present appeal which is only concerned with questions of law.

2. This case concerns the maintenance for a young girl now aged seven, who lives with her mother, the parent with care and appellant in this appeal. The non-resident parent is her father, the second respondent, who now lives with his new partner and also has two older children by a previous relationship for whom he formerly also paid child maintenance. He is the proprietor of a car sales and repair business now run through the medium of a limited company. The girl's mother has a business cleaning and gardening for other people as well as looking after her.

3. The present appeal arose out of a decision made by the Secretary of State on 13 June 2006 determining the non-resident parent's child support liability for his daughter from the effective date of 15 June 2006 as a mere £2.50 a week. He had previously been paying at the rate of £15 a week under an informal arrangement but the parent with care had found this unsatisfactory and applied, as she was entitled to, for a proper maintenance calculation under the Act. She considered the £2.50 figure far too low and immediately sought to dispute it, completing and submitting on 26 June 2006 a form of application for "variation" provided to her by the Child Support Agency in response to her protests. The details she entered on that form alleged that her former husband had been diverting income away from himself and was pursuing a lifestyle with holidays, cars, etc. quite inconsistent with the income of only £83.75 per week attributed to him in the calculation; and also specifically alleged that the actual income he was receiving from his business must have been significantly greater than the figure declared by him and accepted by the Secretary of State for the purposes of the calculation.

4. On 13 July 2006 the Secretary of State gave a further decision refusing to make a variation of the child support maintenance liability under section 28F of the 1991 Act, on the ground that insufficient evidence of any relevant diversion of income or inconsistency of lifestyle had been provided by the parent with care. She appealed to the tribunal against the refusal to increase the child support liability from the original £2.50 a week and that was the appeal that came before the tribunal. The effective hearing took place on 31 May 2007, after a previous hearing some three months earlier had been adjourned for the non-resident parent to produce accounts and figures for his outgoings.

5. The tribunal's decision was to uphold the Secretary of State's refusal to exercise his powers of variation under section 28F and 28G, on substantially the same grounds; the tribunal recording in its decision notice that it could find no evidence to corroborate the allegation of a diversion of income by the non-resident parent and that it considered he had provided a reasonable explanation as to how his lifestyle was funded. Those conclusions were reiterated in more detail in the statement of reasons issued on 28 July 2007 at pages 168 to 170.

6. As the statement made clear, the tribunal's decision did not address or determine the question raised by the parent with care from the outset, of whether there was a more fundamental flaw in the formula calculation itself because the true income of the non-resident parent had been a lot higher than the amount declared and assumed. In paragraph 9 of his statement of reasons the chairman said:

"The Presenting Officer pointed out that the business accounts for the year ending 31/03/2005 would suggest that the drawings taken by [the non-resident parent] were something in the region of £9,000 for that year rather than £6,000 which was the figure mentioned by [him] as his drawings. However this was a matter for the main formula calculation. This appeal concerned variation applications and the matter of the main formula was not before the tribunal and not therefore within their jurisdiction at the hearing."

7. That there was indeed some evidence before the tribunal to support the suggestion that the non-resident parent's business income had been understated is apparent not only from that passage, but also from the bank statements showing regular weekly payments of £200 from the limited company's bank account into that of the non-resident parent himself.

8. In those circumstances it was in my judgment a clear error of law on the part of both the Secretary of State and the tribunal not to have addressed and determined the question of whether the income figure declared and used in the maintenance calculation was correct. This was an issue clearly raised the parent with care both when she initially disputed the calculation and in the course of her appeal; and because her application lodged on 26 June 2006 was well within the prescribed period of one month from the date of notification of the calculation decision itself, automatically invoked not only the specific provisions for variation under sections 28A to 28G of the 1991 Act but also the Secretary of State's much wider power of general revision of the calculation itself under section 16, even if it was right to construe her protest only as an application for "variation" under section 28G: see regulation 3A Social Security and Child Support (Decisions and Appeals) Regulations 1991 SI No. 911.

9. In my judgment this issue was one to be addressed by the tribunal as well as the Secretary of State, even though under section 20 of the 1991 Act there is no separate right of appeal against a refusal by the Secretary of State to exercise his power of revision when taken in isolation. It was not in dispute that on the appeal by the parent with care against the decision of 13 July 2006 refusing a variation under section 28G, the tribunal had and could exercise the Secretary of State's power to revise the maintenance calculation under section 16, with effect from its original date: see the Secretary of State's original submission to the tribunal at page 11. In my view that was correct and the effect was that the tribunal on the appeal had the power to make any decision that would have been open to the Secretary of State on the original application, including a full revision of the formula calculation under section 16: cf. R(IB) 2/04.

10. I therefore accept the substance of the first ground of appeal put forward by the parent with care when she says, at page 178, that the tribunal had erred in restricting itself to too narrow a ground on her appeal, when one of her main contentions was that the income figure used in the calculation itself had been understated: this according to her had been shown to be the case by the accounts and other evidence produced at the hearing itself and the tribunal had been wrong not to determine the issue.

11. I also accept, with one qualification, the submission by Mr B A Wilson on behalf of the Secretary of State dated 7 January 2008 at pages 186 to 188 in support of the appeal, that for practical purposes the appeal to the tribunal ought to have been treated as an appeal against the formula decision itself. The one qualification is that for the reasons I have already given the issue of the correctness or otherwise of the income figure used in the calculation was a necessary one for the tribunal to address and determine on the appeal, as for the Secretary of State on the original application; so I think the comment in paragraph 10 of the submission that "the tribunal in this case was not wrong in law to say that prima facie formula issues were not before it" too narrow in the context of the appeal in this case. I have noted the observations by the non-resident parent opposing this appeal dated 11 January 2008 at page 189 to 190 but as they concentrate entirely on the disputed questions of fact on which both parents will now have a full opportunity of a rehearing before a further tribunal I do not need to comment on them further. They do not touch on the issue of law or my decision to order such a rehearing for the reasons given above.

12. I therefore allow the appeal by the parent with care and remit the case to a freshly constituted tribunal which I direct to carry out a rehearing and redetermination of all relevant issues, including specifically the correctness of the income figure used in the formula calculation and whether that calculation should be revised either to correct the figure itself under section 16 or by way of a variation in consequence of the application made by the parent with care under section 28G.

(Signed)

P L Howell

Commissioner

29 May 2008

1.