Title: [2008] UKSSCSC CSCS_06_2008 (12 August 2008)
Author: sln330039
Last saved by: joe.ury
Company: ossc

Commissioner’s Case No:  CSCS/06/2008

DECISION OF CHILD SUPPORT COMMISSIONER
Decision

1.	The decision of a tribunal sitting in Edinburgh on 28 November 2007 (the second tribunal) is wrong in law.  I therefore set aside the decision of the second tribunal.

2.	The error of law of the second tribunal is that it failed to recognise that the direction given by another Commissioner in an earlier appeal between the same parties, referable to the same matter, had not been followed.  Whether or not I agree with the reasoning of the Commissioner in the earlier appeal, if his ruling is ignored in the very case where that ruling was made, this would wholly undermine the authoritative nature of the Commissioner’s determination of an appeal with respect to the parties before him.

3.	The Secretary of State did not follow the direction of Mr Commissioner May QC in CSCS/20/2006, an appeal from an earlier tribunal decision (the first tribunal), also held in Edinburgh but on 1 September 2006, which related to the same questions, and involving the same parties, as before the second tribunal.  Paragraph 1 of  CSCS/20/2006 read:

“My decision is that the decision of the tribunal given at Edinburgh on 1 September 2006 is erroneous upon a point of law.  I set it aside.  I make the decision I consider is appropriate ....  It is that the decision of the Secretary of State … is also erroneous in law, inept and of no effect.  It is set aside.  The matter is referred to the Secretary of State to consider whether, under and in terms of section 28J of the Child Support Act 1991 and the Child Support (Voluntary Payments) Regulations 2000, the payments by the appellant to the security holder of mortgage payments in respect of the second respondent’s home during the period 6 August 2003 until 11 February 2005 were voluntary payments.  In doing so, he should consider whether to make an invitation to a relevant person under reference to regulation 2(2) of the Child Support (Voluntary Payments) Regulations 2000 to make representations thereon.  In carrying out this exercise, he is directed to make a determination whether he agrees to the payments having been made to the security holder and whether he accepts that such payments , if he reaches the view that they were voluntary, were made under and in terms of s.28J(4) of the Child Support Act 1991.  Thereafter, the Secretary of State must make a decision on the appellant’s application under section 28G of the Act.” [my emphasis]

4.	However, the Secretary of State has still not intimated any determination as to whether or not he agrees that those payments could be made to the security holder.  The matter is now again therefore referred back to the Secretary of State, to do so as first instructed by Commissioner May in July 2007; thereafter, (if agreement is retrospectively given to the payments being made to the security holder), the Secretary  of State is to make a fresh decision on whether there has been a “voluntary payment” under s.28J(2) of the Child Support Act 1991 (the Act) and the Child Support (Voluntary Payments) Regulations 2000.  

5.	The Secretary of State has a power to consult the relevant parties in considering whether a voluntary payment has been made in accordance with the above cited statutory provisions, and all that is now stated by them with respect to the present appeal may be taken account of in that way.  If the Secretary of State does not agree that the payments may be made to the security holder, then, under CSCS/20/2006, such a determination is not appealable, but subject only to judicial review.  If there is such acceptance, so that a fresh decision is then made on the s.28J(2) matters, that latter decision is appealable.

6.	In CSCS/20/2006, Commissioner May referred to a decision under s.28J as following an application under s.28G of the Act.  However, s.28G is concerned with applications for variations.  S.28J of the Act is a free-standing provision allowing non-resident parents to seek an offset against arrears of child support maintenance.  The application under s.28J is not an application for a variation under s.28G of the Act.  Therefore, unless there was some separate application for a variation on a different matter, of which there is no evidence in the papers, the last sentence of paragraph 1 of CSCS/20/2006, as set out above, appears otiose.  

The legislation

7.	The Commissioner set out the relevant legislation at paragraph 6 of CSCS/20/2006:

“6.	Voluntary payments are provided for in the scheme by s.28J of the Child Support Act 1991.  That statutory provision is in the following terms:

“(1) This section applies where‑
(a) a person has applied for a maintenance calculation under section 4(1) or 7(1), or is treated as having applied for one by virtue of section 6;
(b) the Secretary of State has neither made a decision under section 11 or 12 on the application, nor decided not to make a maintenance calculation; and
(c) the non-resident parent makes a voluntary payment.
(2) A ‘voluntary payment’ is a payment-
(a) on account of child support maintenance which the non-resident parent expects to become liable to pay following the determination of the application (whether or not the amount of the payment is based on any estimate of his potential liability which the Secretary of State has agreed to give); and

(b) made before the maintenance calculation has been notified to the non-resident parent or (as the case may be) before the Secretary of State has notified the non-resident parent that he has decided not to make a maintenance calculation.

(3) In such circumstances and to such extent as may be prescribed-

(a) the voluntary payment may be set off against arrears of child support maintenance which accrued by virtue of the maintenance calculation taking effect on a date earlier than that on which it was notified to the non-resident parent;
(b) the amount payable under a maintenance calculation may be adjusted to take account of the voluntary payment.
(4) A voluntary payment shall be made to the Secretary of State unless he agrees, on such conditions as he may specify, that it may be made to the person with care, or to or through another person.
(5) The Secretary of State may by regulations make provision as to voluntary payments, and the regulations may in particular-
(a) prescribe what payments or descriptions of payment are, or are not, to count as ‘voluntary payments’;
(b) prescribe the extent to which and circumstances in which a payment, or a payment of a prescribed description, counts.”
The regulations made under subsection (5), insofar as material, are continued in regulations 2 and 3 of the Child Support (Voluntary Payments) Regulations 2000 and are in the following terms:

“2.‑(1)  A payment counts as a voluntary payment if it is‑ 
(a)	made in accordance with section 28J(2) and (4) of the Act;
(b)	of a type to which regulation 3 applies;
(c)	made on or after the effective date of the maintenance calculation made, or which would be made but for the Secretary of State’s decision not to make one, and for this purpose ‘effective date’ means the effective date as determined in accordance with the Child Support (Maintenance Calculation Procedure) Regulations 2000; and
(d)	a payment in relation to which evidence or verification of a type to which regulation 4 applies is provided, if the Secretary of State so requires.
(2)	Where the Secretary of State is considering whether a payment is a voluntary payment, he may invite representations from a relevant person.

Types of payment

3.	This regulation applies to a payment made by the non-resident parent‑
(a)	by any of the following methods‑
[No issue arises in respect of the method of payment.]

…

(b)	which is, or is in respect of,‑
…
(ii)	a mortgage or loan taken out on the security of the property which is the qualifying child’s home where that mortgage or loan was taken out to facilitate the purchase of, or to pay for essential repairs or improvements to, that property;
…”

Background

8.	As I commented in an earlier direction, it is scandalous that this appeal is concerned with an application made by the appellant in February 2005 to have certain payments accepted as “voluntary payments” under s.28J of the Act; yet the resolution of the dispute is still no further forward.  However, there appears to be no viable alternative in law, given the particular history of the case, but to start again from square one.

9.	For the purposes of the present appeal, the appellant is the non-resident parent and the second respondent is the parent with care of the relevant child.  From now on, for simplicity, I shall refer to the appellant as the father and the second respondent as the mother.  The appeal to the first tribunal was brought by the mother against the decision of a decision maker (DM), taken in the name of the Secretary of State and notified to her on 23 March 2006, that certain sums paid by the father fell to be treated as “voluntary payments”.  Both parties were present at the oral hearing held by the first tribunal; after very careful consideration of all of the evidence, the first tribunal allowed the appeal and held that the payments made by the father were not, in fact, voluntary payments under s.28J of the Act, reasoning that they were not made on account of child support maintenance but rather to discharge a liability to pay a capital sum to the mother under the terms of the separation agreement between them.  

10.	The father appealed to the Commissioner, and Commissioner May allowed his appeal.  The Commissioner held that there was no evidence that the Secretary of State had consented to the specific payments made by the father to the security holder, as required by s.28J(4).  He further held that this was an essential administrative step prior to an effective decision on whether there has been a voluntary payment in terms of s.28J of the Act and that (see paragraph 14 of CSCS/20/2006):

“…The reason why I have taken the view that the case requires to be remitted to the Secretary of State rather than a tribunal is that the agreement of the Secretary of State that payments could be made to someone other than himself, could be not given by an appeal tribunal or a Commissioner standing in the shoes of the tribunal, as such agreement is an administrative not a judicial decision which does not fall within the scope of the statutory rights of appeal to a tribunal under the Child Support Act 1991.”

11.	Unfortunately, as is now conceded on behalf of the Secretary of State, no subsequent determination by the Secretary of State, as directed by Commissioner May, was ever made, i.e. a specific agreement on behalf of the Secretary of State that the payments could be made to the security holder.  Therefore, the fresh, but now negative, decision by a DM on 22 August 2007 with respect to the quality of the payments as “voluntary payments” under s.28J(2), which was under appeal to the second tribunal, was also inept; the condition precedent, as required by Mr Commissioner May, of an administrative acceptance by the Secretary of State of the payment being made otherwise than to the Secretary of State, had not occurred.  

12.	The lack of this prior administrative determination, rendered essential under the terms of the Commissioner’s ruling, was not spotted by the second tribunal.  The second tribunal, after a further exhaustive analysis of the evidence, came to the same determination of fact as had the first tribunal on whether the criteria under s.28J(2) were satisfied:

“In particular, this Tribunal did not consider that Clause 56 of the Separation Agreement read together with the whole of the Separation Agreement was sufficient to qualify the primary purpose of the mortgage payments such that these payments fell to be treated as voluntary payments in lieu of Child Support Maintenance.”

My conclusion and reasons

13.	Even if the matter was open before me, I would not wish to re-visit the Commissioner’s reasoning, i.e. that the issue under s.28J(4) of the Act was an administrative decision, and thus one which can be taken only by the Secretary of State and not by a tribunal standing in his shoes: there appear to be no justiciable criteria on which a tribunal could proceed.  However, such action is, in any event, not competent in the present appeal.  It is a cardinal principle underlying the authority of a Commissioner’s decision that it is binding on the parties to the immediate dispute under consideration.  The Secretary of State was directed to make a preliminary determination whether he agrees with the payments having been made to the security holder, but has not done so.  That inevitably makes everything which follows wrong in law.  For present purposes, even if the same issue could successfully be re-litigated in proceedings between different parties, the direction that the present case is returned to the Secretary of State for his administrative acceptance of another recipient for the payment, or, alternatively, to refuse such agreement, must be followed; moreover, such administrative determination must occur prior to an effective decision whether there has been a voluntary payment in terms of s.28J(2) of the Act, which latter decision only can be appealed to a tribunal as a judicial decision, under the terms of the Commissioner’s ruling.

14.	I agree with paragraph 14 of CSCS/20/2006 that the Secretary of State’s consent may be granted retrospectively (as would have to be the situation now, if such consent is given).  However, retrospective consent cannot be effective after the date of the decision under appeal; this is because of the prohibition (s.20(7)(b) of the Act) against taking into account any circumstances not obtaining at the time of that decision.  Therefore, it is inevitable that the Secretary of State has to make a new decision, following the required determination, subject to fresh appeal rights.  This is highly regrettable, but there is no legal way it can be circumvented in present circumstances.  However, such a scenario should be avoided in the future.  

15.	As I said at paragraph 6 of an earlier direction, dated 28 March 2008:

“I appreciate the difficulties for the Secretary of State.  If a decision is taken for other reasons that the payments are not within s. 28J, for example, that such are not made on account of child support maintenance (an appealable decision), then this will presumably have to be preceded by a preliminary administrative determination in the following terms:  “If these payments otherwise fall within s. 28J as ‘voluntary payments’, I agree to them being made to the security holder”.  Otherwise, there is a vicious circle, and even if there is success in an appeal on the other issues, the case still has to be returned to the Secretary of State, as in CSCS/20/2006, on the basis that the decision under appeal was inevitably inept because the condition precedent of an administrative acceptance by the Secretary of State of payment otherwise than to the Secretary of State had not occurred.”

16.	The Secretary of State, in making the relevant fresh decision, (if he gets beyond the s.28J(4) issue which, if it were decided adversely to the father, would mean no further appraisal under s.28J of the Act was necessary), must then consider the factors under s.28J(2).  On those, he has extensive submissions from the parties.  The whole file should be read with care by a decision maker.  I must, however, point out that two successive tribunals, after careful consideration of all the evidence, and in particular having heard the parties and, as lawyers, having analysed the formal documents, have concluded that the payments were not made “on account of child support maintenance”.  

17.	Any fresh decision in this appeal arises only on the matters under s.28J.  Although referred to by Mr Commissioner May, s.28G of the Act is not relevant to the question of a “voluntary payment”; and, if there was any separate application on a different matter under s.28G, there has been no appeal about it.  The reference to s.28G has caused confusion.  The present appeal relates solely to the issue of voluntary payments under s.28J of the Act.  No variation application under s.28G was before either the second tribunal or before the Commissioner.  Although Mr Commissioner May directed that a decision be made under s.28G, such is accordingly not competent.  Therefore, while paragraph 1 of CSCS/20/2006 is the Commissioner’s direction which must be followed in the present appeal, the last sentence of that direction does not bite.

					(signed)
					L T PARKER
					Deputy Commissioner
					Date:  12 August 2008

FW/CSCS/06/2008