Upper Tribunal (Administrative Appeals Chamber)

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[2009] UKUT 33 (AAC) (10 February 2009)
Main Category: Child support

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

The DECISION of the Upper Tribunal is as follows.

I give the father permission to appeal against the decision of the Colchester appeal tribunal 30 August 2007 under file reference 132/060/00353. I allow that appeal and set aside the decision of the tribunal as involving an error of law (that tribunal had no jurisdiction to hear the appeal).

I give the mother permission to appeal against the decision of the Colchester appeal tribunal dated 13 February 2007, also under file reference 132/060/00353. I allow that appeal and set aside the decision of the tribunal as involving an error of law (that tribunal gave inadequate reasons for its decision).

It is appropriate for the Upper Tribunal to re-make the decision that the Colchester appeal tribunal should have made, rather than remit the case for yet another hearing. The decision is as follows:

The mother's appeal against the decision of the Secretary of State dated 18 August 2006 to make a variation is allowed. There is no basis for the father's child maintenance liability to be reduced on the basis of a variation as from 22 November 2005.

This decision is given under section 12(2)(b)(ii) of the Tribunals, Courts and Enforcement Act 2007.

REASONS FOR DECISION

The decision in summary

The decisions of the Colchester appeal tribunal dated 13 February 2007 and 30 August 2007, both under file reference 132/060/00353, each involves a separate error on a point of law. I give permission to the Second Respondent to appeal the tribunal decision of 13 February 2007 ('the first tribunal') and permission to the Appellant to appeal the tribunal decision of 30 August 2007 ('the second tribunal'). I set aside both tribunal decisions as involving (different) errors of law. I re-make (or substitute) my own decision, as set out above, for the decision of the first tribunal.

The parties to this appeal and the CSA's two schemes

In the technical 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 for Work and Pensions and the Second Respondent is the parent with care. I refer to the parties 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 were carried out by the Child Support Agency (the CSA) and are now performed by the Child Maintenance and Enforcement Commission (CMEC). In the language of child support, this is a so-called "new scheme" case, as the CSA only become involved after 3 March 2003. In other ways, however, this is a very old case, as it concerns the father's child support liability for the couple's only child, a daughter (now aged 18), who lives with her mother.

The relevant background to the appeal to the tribunal

I can only summarise the very protracted and bitter history of this case. For present purposes the relevant background is as follows. The parents married in 1972 and had one child, a daughter born in March 1990. However, the couple's marriage was already deteriorating and in June 1991 the mother petitioned for divorce. The divorce proceedings were clearly acrimonious and sadly little has changed for the better in the meantime.

In the course of ancillary relief negotiations the parents agreed a draft consent order under which the father transferred his interest in the former matrimonial home to the mother and agreed to pay £20 a week in child maintenance. The final consent order in December 1991, as approved by the court, was in the same terms as the draft order, except that the child maintenance obligation was reduced to a nominal £1 per annum.

At the time of the divorce the mother was self-employed, running her own business, and not claiming means-tested social security benefits. She remarried in 1993. It seems she made no application at any time to the courts to vary the nominal amount of child maintenance in the consent order. More recently the mother's second marriage broke down, she fell ill and had to claim income support. As a result she was treated as making an application for child support.

The CSA (after some considerable delay) eventually made a maintenance calculation with an initial effective date of 9 March 2004. In November 2005 the father applied for a variation of that assessment, on the ground that there had been a relevant transfer of property under the 1991 consent order.

In August 2006 the CSA agreed to make a variation. The decision maker accepted the father's valuation of the house at £85,000 as at the date of the court order with an outstanding mortgage of £43,000, leaving an equity of £42,000. Half of this sum was attributed to each spouse. The father was therefore regarded as having transferred £21,000, of which half was in lieu of spousal maintenance. The value of the transfer in lieu of child maintenance was therefore calculated at £10,500, with a weekly equivalent value of £34.55. As the basic child support liability was £51 a week, the result was to reduce that sum to £16.45 a week.

The mother appealed the variation decision. An appeal tribunal consisting of a legally qualified chairman and a financial member sat at Colchester on 13 February 2007 ('the first tribunal'). Both parents attended and gave evidence on oath. The tribunal allowed the mother's appeal in part. According to the Decision Notice issued on the day, the tribunal decided that the house was worth only £65,500 at the relevant time, subject to a mortgage of £42,200, so the equity was only £23,300. However, the tribunal also found that there had been a transfer of contents from the father to the mother worth £5,000. The overall transfer in lieu of child maintenance was therefore lower, with the result that the child support liability was £27.72 per week.

The father requested a statement of reasons for the first tribunal's decision, 'particularly regarding the effective date of 22/11/05 for the variation'. The tribunal chairman issued a short Statement of Reasons dealing solely with the effective date. Both parties then applied for permission to appeal to the Child Support Commissioner.

A District Chairman considered the applications on 29 May 2007. He set aside the first tribunal's decision, giving the following reasons:

'In this matter the two parents of the relevant children [sic] have sought leave to appeal on different grounds. In the case of [the father] he asked for a statement on what were limited grounds and now complains of other matters. Because the Secretary of State has remained silent there is no power to set aside under section 23A(3) of the 1991 Act. I therefore set the decision aside under section 23A(2) for inadequacy of reasons with no criticism of the lady chairman who did as requested and provided a statement addressing the one issue one of the three parties to the proceedings queried.'

The mother's appeal was then reheard at a fresh hearing before the same District Chairman who had set aside the decision of the first tribunal, but sitting with a different financial member to the first tribunal. The second tribunal sat on 30 August 2007. Again, both parties attended and gave evidence.

The second tribunal allowed the mother's appeal. It decided that there was no basis to reduce the father's child support liability at all on the basis of a variation as from 22 November 2005. The Decision Notice included three pages of detailed reasons. In summary, the second tribunal took the view that the property transfer was not in lieu of child maintenance and so a variation was not appropriate. In case it was wrong on that point, the second tribunal also made detailed findings on the value of the transfer involved. It concluded that the net value of the transfer in lieu of child maintenance (if so it was) was 'very close to £6,000' (i.e. just above the £5,000 threshold). The second tribunal decided, however, that it would not be just and equitable to order a variation in all the circumstances of the case. The father then applied to the Child Support Commissioner for permission to appeal.

Mr Commissioner Rowland granted the father's request for an oral hearing of his application for permission to appeal against the decision of the second tribunal. The Secretary of State made a written submission supporting the father's application on the basis that the second tribunal acted without jurisdiction, as the decision of the first tribunal had not been validly set aside. I issued case management directions indicating that I was minded, if possible, to consider together applications for permission to appeal against both tribunal decisions. The Secretary of State then made a further written submission dealing with the points raised in the directions.

I held an oral hearing of the father's application for permission to appeal at the Asylum and Immigration Tribunal at Field House in Bream's Buildings, London on 26 January 2009. Mr Leo Scoon represented the Secretary of State and the Commission. The father attended and was represented by his partner, Miss H. I am grateful to both Mr Scoon and Miss H for their careful and well-crafted submissions. The mother did not attend, but had written to say she did not feel well enough to do so.

The issues on this appeal

Given this background, the following three issues arise on this appeal.

(1) Did the District Chairman have the standing to set aside the decision of the

first tribunal?

(2) If he did not, is the decision of the first tribunal open to challenge before the

Upper Tribunal?

(3) If so, how should the Upper Tribunal dispose of the variation appeal?

Did the District Chairman have the standing to set aside the decision of the first tribunal?

I appreciate that this first procedural issue is of limited interest to the parents involved in this appeal, but it may have repercussions in other cases and so requires some attention. The District Chairman who set aside the decision of the first tribunal purported to rely on section 23A of the Child Support Act 1991. This provision was inserted by section 11 of the Child Support, Pensions and Social Security Act 2000 and reads as follows:

'23A Redetermination of appeals

(1) This section applies where an application is made to a person under section 24(6)(a) for leave to appeal from a decision of an appeal tribunal.

(2) If the person who constituted, or was the chairman of, the appeal tribunal considers that the decision was erroneous in law, he may set aside the decision and refer the case either for redetermination by the tribunal or for determination by a differently constituted tribunal.

(3) If each of the principal parties to the case expresses the view that the decision was erroneous in point of law, the person shall set aside the decision and refer the case for determination by a differently constituted tribunal.

(4) The "principal parties" are—

(a) the Secretary of State; and

(b) those who are qualifying persons for the purposes of section 20(2) in relation to the decision in question.'

The District Chairman correctly identified that section 23A(3) was unavailable in this case, given that the Secretary of State (one of the 'principal parties': see subsection (4)(a)) had expressed no view on the matter. The District Chairman therefore sought to rely on section 23A(2). However, this vests the power to set aside in 'the person who constituted, or was the chairman of, the appeal tribunal' concerned.

The Secretary of State submits quite simply that the District Chairman had no standing to apply section 23A(2), as he was not the chairman of the first tribunal. By analogy with the decision of the Tribunal of Commissioners in reported decision R(I) 7/94, it is said that the second tribunal therefore lacked jurisdiction and its decision is a nullity. In an initial written submission, the Secretary of State's representative suggested that the matter should now be remitted to the particular individual who was chairman of the first tribunal to consider afresh the applications for a set aside or for permission to appeal.

Miss H argues that the decision of the first tribunal should not have been set aside at all, given the overriding objective of dealing with cases fairly and justly. Strictly, however, that statutory goal has been in place only since 3 November 2008, although I am confident that the considerations set out in rule 2 of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (SI 2008/2685) would have been to the fore of the minds of tribunal chairmen considering such applications prior to that date.

The matter was put before the District Chairman by a tribunal clerk on a combined application form for a set aside and for permission to appeal to the Child Support Commissioner. An appeal to the Commissioner requires the leave (or permission) of either 'the person who constituted, or was the chairman of, the appeal tribunal when the decision appealed against was given or of such other person as may be determined in accordance with regulations made by the Lord Chancellor' or a Child Support Commissioner (Child Support Act 1991, section 24(6), following amendments by the Social Security Act 1998, emphasis added).

At the relevant time, regulation 10(6) of the Child Support Commissioners (Procedure) Regulations 1999 (SI 1999/1305) further provided as follows:

'(6) Where an application for leave to appeal against a decision of an appeal tribunal is made -

(a) if the chairman was a fee-paid panel member, the application may be determined by a salaried panel member; or
(b) if it is impracticable or would be likely to cause undue delay for the application to be determined by the chairman, the application may be determined by another panel member.'

As the chairman of the first tribunal was a part-time fee-paid panel member, and the District Chairman was a full-time salaried panel member, I am entirely satisfied that the District Chairman would have had the standing to determine the application as an application for permission to appeal to the Commissioner.

The difficulty, however, is that the District Chairman did not expressly grant permission to appeal to the Commissioner under section 24(6) of the 1991 Act. He purported to set aside under section 23A(2). It is true, of course, that the District Chairman was seised of the application to set aside by virtue of section 23A(1), which applies 'where an application is made to a person under section 24(6)(a) for leave to appeal from a decision of an appeal tribunal' (as there had been here). In my view, however, the language of section 23A(2) is clear, and the District Chairman was neither 'the person who constituted' nor 'the chairman of' the first tribunal. He therefore had no standing to set aside the first tribunal's decision. It follows that both his purported set aside determination and the decision of the second tribunal were made without jurisdiction.

In passing I note that this problem would not arise in the parallel social security jurisdiction. Section 14(10) of the Social Security Act 1998 is in the same terms as section 24(6) of the Child Support Act 1991. However, section 13 of the 1998 Act is expressed in less restrictive terms than section 23A of the 1991 Act. Instead of referring to the specific individual who chaired the tribunal, it refers more generally to 'the person' (which might include any District Chairman) to whom the application for permission to appeal was made under section 14(10).

At the oral hearing Mr Scoon suggested that the difference in terminology may well have been deliberate, indicating that a different approach was considered appropriate for child support cases. I am not convinced by that submission. I note that the official Explanatory Notes (paragraphs 131-133) accompanying the Child Support, Pensions and Social Security Act 2000 explain that, due to an oversight, the Child Support Act 1991 was not amended in line with section 13 of the 1998 Act. The Explanatory Notes then assert (at paragraph 136) that 'New section 23A(2) allows the person who constituted the tribunal, or otherwise a tribunal chairman to set aside the tribunal decision if he decides it was wrong on a point of law' (emphasis in bold added).

The Explanatory Notes suggest that those responsible for drafting the 2000 Act thought that they were simply replicating the set aside provisions in section 13 of the 1998 Act in the 1991 Act by the insertion of the new section 23A. But the Explanatory Notes are no more than an informed guide to the legislation. The task of courts and tribunals is to interpret and apply the legislation. Whatever the original policy intent, I am satisfied that section 23A(2) admits of only one possible interpretation. It does not allow a chairman who has not sat on the original appeal to set aside that tribunal's decision for redetermination on the basis of an error of law. If that was and is the policy intent, section 23A of the Child Support Act 1991 needs to be amended by primary legislation as a matter of urgency.

Is the decision of the first tribunal open to challenge?

The District Chairman and the second tribunal both acted without jurisdiction, in other words outside of their legal powers. This means that the decision to set aside and the second tribunal's decision are both of no legal effect. The inevitable consequence is that the decision of the first tribunal still stands, as it was not validly set aside. However, it is clear that both parents applied for leave to appeal against the first tribunal's decision, although those applications did not formally need to be resolved at the time given the District Chairman's set aside determination. I indicated in my pre-hearing directions that I was not minded to follow the proposal of the Commission's representative to remit those applications to the chairman of the first tribunal, given the inordinate passage of time involved.

At the oral hearing Mr Scoon, building on the helpful further written submission by the Commission's representative, argued that the District Chairman had in effect already by implication granted permission to appeal against the decision of the first tribunal, on the basis of 'inadequacy of reasons' (which amounts to an error of law). However, Mr Scoon also argued that there was no power under the Tribunal Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698) for the Upper Tribunal to waive the requirement to apply for permission if the tribunal chairman had made no determination at all.

Applications to the Upper Tribunal for permission to appeal are governed by rule 21 of the Upper Tribunal Rules. Rule 21(2) provides that:

'(2) A person may apply to the Upper Tribunal for permission to appeal to the Upper Tribunal against a decision of another tribunal only if—

(a) they have made an application for permission to appeal to the tribunal which made the decision challenged; and

(b) that application has been refused or has not been admitted.'

In addition, rule 7(1) and (2) of the Upper Tribunal Rules provide as follows:

'Failure to comply with rules etc.

7.—(1) An irregularity resulting from a failure to comply with any requirement in these Rules, a practice direction or a direction, does not of itself render void the proceedings or any step taken in the proceedings.

(2) If a party has failed to comply with a requirement in these Rules, a practice direction or a direction, the Upper Tribunal may take such action as it considers just, which may include—

(a) waiving the requirement;

(b) requiring the failure to be remedied;

(c) exercising its power under rule 8 (striking out a party's case); or

(d) except in mental health cases, restricting a party's participation in the proceedings.'

I am not wholly convinced by Mr Scoon's argument that the District Chairman had impliedly granted permission to appeal against the decision of the first tribunal on the basis of 'inadequacy of reasons'. The reality was that the District Chairman undoubtedly would have done so but for the fact that he believed he could 'short-circuit' the need for an appeal to the Commissioner by purportedly exercising the power to set aside under section 23A(2).

To that extent my view is that the District Chairman either implicitly refused both parties' applications for permission to appeal against the decision of the first tribunal within the meaning of rule 21(2) or alternatively left those applications in abeyance. Neither party has formally renewed those applications before the Commissioner, but doubtless this was thought to be unnecessary given that the decision of the first tribunal was set aside and overtaken by the decision of the second tribunal, which the father has since sought to appeal.

However, I made it clear in case management directions that I proposed at the oral hearing to revisit the decision of the first tribunal, if necessary. Both the father and the Secretary of State have made detailed submissions on that issue. Bearing in mind the overriding objective of dealing with cases fairly and justly, I waive the requirement for a further formal application for permission to appeal to be renewed before the Upper Tribunal. The arguments about the correctness of the first tribunal's decision are well known and have been fully rehearsed. I regard the mother's application for permission to appeal against the decision of the first tribunal as either having been rejected by the District Chairman or left in abeyance and so not admitted. In my judgment it is appropriate now to grant her permission to appeal against the decision of the first tribunal.

I regard this as fair and just as the mother's challenge to the decision of the first tribunal has effectively been left in limbo for nearly two years, through no fault of hers (or, indeed to be fair, of the father's). The mother (and, more importantly, the qualifying child) should not be prejudiced by the fact that the decision of the second tribunal – which was, in fact, more advantageous to her – has now been found on the father's application for leave to appeal to have been made without jurisdiction.

I have taken into account Miss H's point that the father had only ever challenged one narrow aspect of the decision of the first tribunal. The father's request was for a Statement of Reasons 'particularly regarding the effective date of 22/11/05 for the variation'. However, the mother had evidently challenged the substance of the first tribunal's decision on its merits. Moreover, in an inquisitorial jurisdiction it is not possible for a party to isolate one narrow aspect of a tribunal decision, to appeal on that aspect alone, and expect to be able to retain whatever advantage is gained from the rest of the decision.

I also bear in mind that on any reckoning the Statement of Reasons of the first tribunal was inadequate (as the District Chairman recognised in his set aside determination). The Statement of Reasons is for all the parties to the appeal, not just the party making the request. The father may have been principally concerned with the issue of the effective date, but the same Statement of Reasons was also sent to the mother and to the Secretary of State, both of whom might well have had other concerns about the tribunal's decision. Indeed, one of the purposes of a tribunal's Statement of Reasons is to provide all the parties (not just the party who applies for the statement) with an informed basis on which to decide whether to seek permission to appeal. On that basis alone the first tribunal's Statement of Reasons was wholly deficient.

Finally, given everything that has elapsed in this case, I am not satisfied that it would be fair and just to go back to the chairman of the first tribunal and invoke the case management powers under rule 5(3)(n) to 'require any other tribunal whose decision is the subject of proceedings before the Upper Tribunal to provide reasons for the decision'.

My conclusion is therefore to waive any irregularity in the proceedings, to grant the mother permission to appeal against the decision of the first tribunal and to set aside that decision for inadequacy of reasons under Tribunals, Courts and Enforcement Act 2007, section 12(1).

How should the Upper Tribunal dispose of the variation appeal?

Having set aside the decisions of the first and second tribunals, my options are either to remit the case to the First-tier Tribunal with directions for its reconsideration, or to re-make the decision (Tribunals, Courts and Enforcement Act 2007, section 12(2)). This appeal has already been the subject of two lengthy hearings at first instance, both back in 2007, the most recent of which was 18 months ago. The case concerns, in part at least, some events that took place nearly 20 years ago. The appeal bundle is now over 400 pages long (albeit many of the papers are duplicated and/or in the wrong order, through no fault of the parties) and there is little if any prospect of any new information emerging that would be material to the issues to be determined. The case has dragged on for years. All considerations point towards the Upper Tribunal re-making rather than remitting the appeal to be reheard by yet another tribunal.

In terms of re-making the decision under appeal, there are three main issues that have to be resolved. The first is whether or not the consent order involved a qualifying property or capital transfer in lieu of child maintenance. The second, assuming that it does, is the value of any such qualifying transfer. The third is whether it is just and equitable to make a variation on that basis.

Did the consent order involve a qualifying property or capital transfer in lieu of child maintenance?

An application for a variation based on a property or capital transfer must satisfy the terms of paragraph 3 of Schedule 4B to the Child Support Act 1991, as amended by the 2000 Act:

'Property or capital transfers

3 (1) A variation may be agreed in the circumstances set out in sub-paragraph (2) if before 5th April 1993—

(a) a court order of a prescribed kind was in force with respect to the non-resident parent and either the person with care with respect to the application for the maintenance calculation or the child, or any of the children, with respect to whom that application was made; or

(b) an agreement of a prescribed kind between the non-resident parent and any of those persons was in force.

(2) The circumstances are that in consequence of one or more transfers of property of a prescribed kind and exceeding (singly or in aggregate) a prescribed minimum value—

(a) the amount payable by the non-resident parent by way of maintenance was less than would have been the case had that transfer or those transfers not been made; or

(b) no amount was payable by the non-resident parent by way of maintenance.

(3) For the purposes of sub-paragraph (2), "maintenance" means periodical payments of maintenance made (otherwise than under this Act) with respect to the child, or any of the children, with respect to whom the application for a maintenance calculation has been made.'

The 'prescribed minimum value' for the purpose of paragraph 3(2) is £4,999 (Child Support Variations Regulations 2000 (SI 2001/156, regulation 16(4), as amended). Accordingly the value of the transfer (as calculated in accordance with the statutory assumptions in regulation 17) must amount to £5,000 or more.

The only live issue in this case is whether or not 'the amount payable by the non-resident parent by way of maintenance was less than would have been the case had that transfer or those transfers not been made' (within paragraph 3(2)(a) of Schedule 4B). Regulation 17(1) of the 2001 Regulations further provides that

'the value of a transfer of property for the purposes of that paragraph shall be that part of the transfer made by the non-resident parent (making allowances for any transfer by the person with care to the non-resident parent) which the Secretary of State is satisfied is in lieu of periodical payments of maintenance.'

The first tribunal did not directly address this question in either its Decision Notice or its Statement of Reasons, but it must have concluded or assumed that this requirement was satisfied (its failure to explain why is, of course, itself an error of law). The second tribunal took the contrary view, for the following reasons:

'There is no express provision in the Order and by December 1991 District Judges in the County Court dealing with ancillary relief would have been well aware that Child Support was going to take over responsibility for child maintenance. The tribunal therefore had a doubt about whether the order approved by the Court did in reality reflect an intention to buy out the father's liability in respect of maintenance. In R(CS) 4/00 the Commissioner ruled that a transfer of a parent's interest in the home to provide a stable home for the child was not maintenance as defined by paragraph 3(3) of Schedule 4B. On the available evidence the tribunal had a real doubt that the transfer of the Respondent father's interest was intended to reduce child maintenance liability despite the fact that negotiations over undisclosed assets of the mother Appellant meant that an earlier draft agreement had the level of proposed periodical payments reduced. It appears that the level of maintenance was dropped to preserve the agreed transfer of assets and not a capital payment by the father to reduce his liability. In 1991 the housing market was very troubled due to the property slump following the end of the property price boom caused in part by the advance notice of the intention to end MIRAS and this may well have been the reason that neither spousal nor child maintenance were pursued with vigour.'

Miss H, for the father, takes strong exception to this analysis. She draws attention to the observation of Mr Commissioner Jacobs in R(CS) 4/00 (at paragraph 20) that it is 'unlikely that the effect of a transfer of property on maintenance payments will be spelt out' in the court order. She argues that both the contemporaneous evidence and subsequent events demonstrate that the capital transfer was in lieu of periodical payments of maintenance, as the reduction in child maintenance from £20 p.w. in the draft consent order to £1 p.a. in the final order reflected the imbalance in the capital provision. Furthermore, she contends that the fact that the mother never returned to court to vary the child maintenance element, despite her lower income, corroborates the father's account.

The Secretary of State's representative takes a different view, arguing that the reduction in child maintenance was not a consequence of the property transfer but rather a result of the non-disclosure by the mother of her full financial circumstances. It is also suggested that the transfer was to indemnify the mother for the overdraft and because the mother had to provide a home for the qualifying child.

Like the second tribunal, I harbour 'a real doubt' that the transfer of the father's interest was intended to reduce his child maintenance liability. Of course, I acknowledge Miss H's point that court orders are often silent on the rationale for a particular provision. I also certainly accept that the passage of time means that contemporaneous correspondence has now been quite understandably destroyed in accordance with normal office procedures. However, I am not persuaded by the reference in the father's solicitors' bill of costs to non-disclosure by the mother. I bear in mind Mr Commissioner Jacobs's observation in R(CS) 4/00 that such a document is 'likely to be less partisan' than the parties' own correspondence 'but cannot be treated as an entirely reliable basis for determining the effect of a transfer'.

The father's solicitors' bill of costs stated that the father had 'sought to re-negotiate the terms of the financial settlement with the Petitioner on the grounds that there had been a non-disclosure of sum [sic] material facts. The client stated that the Petitioner had not disclosed all documentation, so that the respondent formed the wrong view of the petitioner's financial position.' It continued to the effect that it had been necessary to consider complex documentation 'particularly so, given the discrepancies in particulars supplied by the petitioner whom, it was believed, was deliberately supplying misleading information'. This document is clearly written from the perspective of the father ('The client stated' and 'it was believed'). It undoubtedly demonstrates that the father thought the mother was concealing her assets. It does not demonstrate to my mind that she actually was. I also take into account that parties to bitter and contested ancillary relief applications adopt all sorts of negotiating positions.

In this context it is plain from the bills of costs prepared by the parents' respective solicitors that the negotiations were difficult even before the father withdrew his agreement to the draft consent order. The father's solicitors refer to 'protracted negotiations' and the mother's solicitors to 'long negotiations'. The latter also records that 'intense pressure was applied by the petitioner who needed to complete the re-financing deal [with the bank] quickly'.

According to R(CS) 4/00, I should also have regard to the wider legal context, including the range of orders that may be made and the factors to which a judge must have regard when making particular orders. This was a case involving a long marriage, a very young child and divorcing parents who were clearly on very poor terms (making a clean break as between them all the more desirable). The main element of the transfer was the former matrimonial home, which was itself heavily mortgaged, to provide a home for the child. I also acknowledge, as Miss H argued, that this does not appear to have been a case where the level of child maintenance payments was limited by the father's income at the time.

However, on balance I am not satisfied that 'the amount payable by the non-resident parent by way of maintenance was less than would have been the case' had the capital transfer not been made. Although there was a considerable reduction in the level of child maintenance, there was no difference in the capital transfer provisions as between the draft and final consent orders. I would not go so far as Mr Scoon, who argued that the link with child maintenance was 'conspicuously absent'. However, it seems to me at least as likely that the pressure generated by the mother's refinancing deal, along with her desire to have as little as possible to do with the father in the future, were the factors that explained the change in the child maintenance provision. I therefore reach the same conclusion as the second tribunal on this point, namely that the level of child maintenance was dropped to preserve the agreed transfer of assets, and not to reflect a capital payment by the father in lieu of his child maintenance liability.

What was the value of any such qualifying transfer?

In case I am mistaken on that point, I must also consider the value of the transfer in the event that it was in fact a qualifying transfer for the purposes of paragraph 3 of Schedule 4B to the 1991 Act. In the course of these proceedings there has been lengthy and detailed disagreement between the parties over the valuation of the house at the material time (and hence the resulting net value of the transfer), as well as the value of other assets divided up at the time of the divorce. There are obvious difficulties in making such assessments nearly two decades after the events in question.

The first tribunal ruled that the value of the house at the date of the order was £65,500, subject to a £42,200 mortgage. At the second tribunal the father argued the house was worth £66,500 and the mother claimed it was worth £65,000, a difference of just £1,500. The parties seemed to accept that the mortgage was in fact £42,000. The second tribunal decided to split the difference – as it put it, being 'devoid of a crystal ball' – and assessed the value at £65,750. House price valuation is never an exact science and the second tribunal's assessment seems to me the fairest way to split this particular hair. This produces a net equity of £23,750.

The first tribunal found the equity to be £23,300 and added to that a sum of £5,000 by way of the estimated insured value of the contents retained by the mother, making a capital transfer of £28,300 in all. The second tribunal refused to make any such adjustment, reasoning that 'the division of chattels was not part of the consent order. In the recital it was recorded that the parties had agreed the division of the chattels and the tribunal takes the view that there was no basis to treat these as falling within the property transfer provisions at all.' In my view that was the correct and indeed the only proper construction of the consent order. The first tribunal gave no reasons for its finding in respect of the £5,000 worth of contents (another error of law on its part). I therefore agree with the findings and conclusion of the second tribunal on this matter too.

The net equity and capital transfer of £23,750 must then be converted into a weekly equivalent sum to factor into the maintenance calculation. Regulation 17(2) of the 2001 Regulations sets out three statutory assumptions which are to apply in the absence of any contrary indication, namely that:

'(a) the person with care and the non-resident parent had equal beneficial interests in the asset in relation to which the court order or agreement was made;
(b) where the person with care was married to the non-resident parent, one half of the value of the transfer was a transfer for the benefit of the person with care; and

(c) where the person with care has never been married to the non-resident parent, none of the value of the transfer was for the benefit of the person with care.'

In the present case we know from the conveyance on file that the parents were indeed beneficial joint tenants of the former matrimonial home, so assumption (a) is in fact unnecessary. This means that each parent had a nominal share in the equity of £11,875 and so this was the total value of the father's transfer (leaving to one side the legal and equitable niceties involved in severing beneficial joint tenancies). The assumption in regulation 17(2)(b) means that this figure has to be halved as between the transfer to the parent with care and the sum in lieu of child maintenance for the qualifying child. This results in a figure of £5,937.50 (or, as the second tribunal put it, a figure 'very close to £6,000').

This figure exceeds the statutory threshold and so in principle may impact on the maintenance calculation. The equivalent weekly value is obtained by multiplying the net value of the qualifying transfer by the appropriate factor in the Table in the Schedule to the 2001 Regulations. As the statutory rate at the material time was 15 per cent, and the number of years of liability was 15, the prescribed factor is 0.00329. This calculation (£5,937.50 x 0.00329) produces a weekly equivalent value of £19.53 (rather than the £34.44 determined by the CSA), to be set against the baseline weekly child support liability.

Is it just and equitable to make a variation in respect of the qualifying transfer?

In deciding whether it would be just and equitable to make a variation in this instance, assuming that there was a qualifying transfer, I am required by statute to have regard to the general principle that 'parents should be responsible for maintaining their children whenever they can afford to do so' (Child Support Act 1991, section 28E(2)(a)). I am also required to have regard to the welfare of the qualifying child (section 28F(2)(a)), there being no other relevant child who might be affected by any decision on a variation. The first tribunal did not explain its reasoning on the just and equitable issue (a further error of law). In contrast the second tribunal set out its considerations with some care before concluding that it would not be just and equitable to make a variation.

Regulations also require me to have regard to a range of factors and to disregard others. For example, I must bear in mind 'the extent, if any, of [the non-resident parent's] liability to pay child maintenance under a court order or agreement in the period prior to the effective date of the maintenance calculation' (regulation 21(1)(b)), in this case £1 per annum. I must on the other hand ignore various other mostly fault-based factors, such as who was responsible for the breakdown of the relationship, the existence (if any) of contact arrangements and any 'failure by a non-resident parent to make payments of child support maintenance, or to make payments under a maintenance order or a written maintenance agreement' (regulation 21(2)).

I also take into account the various circumstances identified in detail by the second tribunal – for example, that the mother is unwell, that the father's economic position is substantially better than the mother's and that he has no other obligatory responsibilities to any ex-wives or other children. I would therefore exercise my discretion in exactly the same way as the second tribunal. In other words, even if there was a qualifying capital transfer in this case, in my judgment it would not be just and equitable to make a variation.

In re-making the decision of the first tribunal I would therefore hold that there is no basis on which to reduce the father's child support liability as from 22 November 2005 and so allow the mother's appeal against the decision of the first tribunal.

Conclusion

For the reasons explained above, the decisions of both tribunals involve different errors of law. I must therefore allow both appeals and set aside both tribunal decisions for different reasons. My decision is as set out above.

Finally, I note with regret that this matter has dragged on so long that the couple's daughter is no longer a qualifying child simply by the passage of time. A computer print-out suggests that she ceased to be a qualifying child on 9 September 2008. The Commission's second written submission argues that the proper date was in fact 8 September 2008, given the reasoning in the decision of the Child Support Commissioner in CCS/2384/2004. However, this very narrow point relates to matters after the decision under appeal and so I make no ruling on the point.

Signed on the original Nicholas Wikeley

on 10 February 2009 Judge of the Upper Tribunal