DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

 

The DECISION of the Upper Tribunal is to dismiss the appeal by the Appellant (“the father”).

 

The decision of the Sutton First-tier Tribunal dated 09 April 2013 under file reference SC154/11/06145 does not involve an error on a point of law. The tribunal’s decision therefore stands.

 

This decision is given under section 11 of the Tribunals, Courts and Enforcement Act 2007.

 

 

REASONS FOR DECISION

 

The central issue in this appeal

1. The non-resident parent in this case entered into a private agreement to make a substantial capital transfer to the parent with care, in effect a commuted payment of future child maintenance. About two years later the parent with care applied to the Child Support Agency, which made a maintenance calculation taking no account of that transfer. An appeal against that decision was dismissed by the First-tier Tribunal. Two more years on the Agency conducted a review and made a further decision, refusing to change the original assessment. The county court subsequently embodied the private agreement in a consent order. A second First-tier Tribunal then upheld the Agency’s decision which had confirmed the original maintenance calculation.

 

2. This decision by the Upper Tribunal, dismissing the non-resident parent’s further appeal, explains why the First-tier Tribunal’s decision involves no error of law. Neither the informal agreement nor the consent order can affect the calculation of the non-resident parent’s child support liability. However, this does not prevent the Agency from taking account of the fact of that payment in any discretionary decision it may make as regards the collection and enforcement of that liability. However, there is no appeal to the tribunal on either collection or enforcement questions.

 

3. This result may appear counter-intuitive. However, the law is tolerably clear. Whether there are good policy reasons for amending the legislation, so that such transfers are taken into account as of right, rather than on a discretionary basis, is a matter for the Secretary of State and his advisors to consider. I simply note that the Court of Appeal drew attention to this very problem as long ago as 1998 (see paragraph 48 below).

 

The parties to this appeal

4. The Appellant is the non-resident parent (“the father”). The Second Respondent is the parent with care (“the mother”). They are the parents of a boy who is now aged 14. Both parents are lawyers; indeed, I understand the mother is a family lawyer. The father, it seems is not a family lawyer, which may well explain the difficulties he has got himself into in relation to his child support liability.

 

5. I must stress at the outset there is no suggestion that the father has sought to avoid his financial responsibility to support his son. Quite the contrary; as the Secretary of State’s representative puts it, on behalf of the First Respondent, the father “has obviously tried to do the right thing and provide for his son in a more than generous manner... (but) unfortunately the way in which he discharged himself of any further responsibility has led to a situation in which that discharge cannot be taken into account”. The method of discharge was by way of a capitalised child maintenance agreement, described in more detail below.

 

6. I must stress that all the information on the appeal file comes from either the Agency or the father. The mother took no active part in either the proceedings below or before the Upper Tribunal. It follows that much of the account that follows is based on the father’s evidence. The mother may not agree with it all. However, I am satisfied at least that the capital transfer described below took place. I say that as the mother (i) signed the original informal agreement; (ii) agreed to the county court consent order several years later; and (iii) has since failed to respond to a direction from the Upper Tribunal, which had indicated that unless she informed the Upper Tribunal otherwise, and within a specified period, it would be assumed that she had received payment under the agreement in question.

 

The capitalised child maintenance agreement

7. On 4 February 2007 the parents entered into a “home-made” accord described as a “Capitalisation of Child Maintenance Agreement”. In short, the father agreed to transfer a lump sum of £54,375 to the mother in lieu of monthly child maintenance payments for the 10 years from February 2007 to July 2017 (by when their child will have attained the age of 18). The figure of £54,375 was calculated by reference to 125 monthly payments of £435, being 15% of the father’s then net monthly income. The £54,375 was paid by way of a cash payment (£10,890) and the father’s release of a charge on what was presumably the former family home, the charge being valued at £43,485. In return the mother purportedly agreed that her claims for child maintenance stood dismissed and that until July 2017 she “shall not be entitled to make any further application for maintenance under the Child Support Act 1991.” It was also agreed that if the father’s liability to pay child maintenance was re-assessed by any statutory agency, “then this agreement should be recognised and taken into account in that assessment”. The legal effectiveness of those last two provisions is at best problematic.

 

8. The full document, which they each signed and dated, read as follows (appropriately anonymised):

 

IN THE MATTER OF THE CHILD SUPPORT ACT 1991

 

BETWEEN

[THE FATHER]

 

And

 

[THE MOTHER]

 

The purpose of this agreement is to enable [the father] of [the child] to make all his monthly child maintenance payments from 25^th February 2007 up to and including 25^th June 2017, being 125 months, to [the mother] in one lump sum of £54,375.

 

In making this agreement it is acknowledged that:

 

(a) £435 is 15% of [the father’s] current net monthly income;

(b) Since January 2002, when [the mother] first began to live on her own with [the child], until 25^th January 2007 [the father] has paid 15% of his net monthly income by way of child maintenance to [the mother];

(c) The lump [sum] will be made up by a cash payment of £10,535 ([the father] having already given [the mother] £355 in advance) and by releasing the Legal Charge that is currently registered against [their former property]; and

(d) The Legal Charge mentioned at (c) above is valued at 41/214.5ths of £227,500 (the value of the property agreed by [the father and mother]) which equals = £43,485.

 

On payment by [the father] to [the mother] of the agreed lump sum of  £54,375, which represents child maintenance at the rate of £435 per month for 125 months from 25 February 2007 to 25 June 2017, it is agreed that:

 

1. [The mother]’s claims for child maintenance payments in respect of [the child] shall stand dismissed until July 2017 and until that time [the mother] shall not be entitled to make any further application for maintenance under the Child Support Act 1991;

 

2. There shall be a further review of child maintenance on or before July 2017 to assess whether [the father] has any further responsibility to pay maintenance for [the child] from July 2017 onwards; and

 

3. If the Child Support Agency, or any other agency charged with the same or similar functions, should for whatever reasons wish to re-assess [the father]’s liability to pay child maintenance to [the mother] in respect of [the son], then this agreement should be recognised and taken into account in that assessment.”

 

The Child Support Agency’s first maintenance calculation and the first tribunal

9. Notwithstanding the capitalised child maintenance agreement, nearly two years later, in December 2008, the mother made an application to the Child Support Agency (“the Agency”). According to the father at least, she made that application “because I would not pay her share of school fees”. On 20 February 2009 the Agency made a maintenance calculation, requiring the father, after an allowance for shared care, to pay £79.71 a week in child support from the effective date of 23 December 2008 (in other words, about £345 a month, rather than the £435 agreed privately).

 

10. The father appealed to the First-tier Tribunal against the Agency’s decision of 20 February 2009. His appeal was dismissed at a hearing before Judge Anscomb in Sutton on 4 August 2009 and the Agency’s maintenance calculation confirmed. In his decision notice, the tribunal judge found the shared care allowance to be correct and then observed as follows:

 

“There is an agreement signed by [the mother] dated 04.02.07 (page 24 of the response) where she acknowledges substantial payments to her by [the father] on the understanding that she will not make an application to the Agency before July 2017. That she has done so is difficult to comprehend, but that being the case, the Regulations do not permit that a private arrangement be included in the calculation of the assessment. [The father] does not consider that the Regulations are fair in this regard, but that is not an issue that I can take into account in deciding that the assessment has been correctly made.”

 

11. There is no suggestion on file that any appeal to the Upper Tribunal was made against Judge Anscomb’s decision of 4 August 2009. Furthermore I have checked the Upper Tribunal’s records and can find no trace of any such application or appeal.

 

The Child Support Agency’s decision under appeal to the second tribunal

12. On 1 June 2011 the Agency conducted a review of the case. The decision maker decided not to supersede the original maintenance calculation of 20 February 2009 and wrote to the father accordingly. He replied on 29 June 2011, making several points about his current circumstances and adding “I have already paid CMP [child maintenance payments] until July 2017 under a capitalised maintenance agreement”. On 15 July 2011 the Agency wrote again, asking for further information. The father responded on 22 July 2011, stating that he wanted to appeal to an independent tribunal, not to have another internal review.

 

The county court consent order

13. In October 2011, while his second appeal to the tribunal was pending, the father made an application under the Children Act 1989 to Croydon County Court. In this application he referred to the capitalised child maintenance agreement and stated that the Agency “have refused to take the agreement and the money paid into account in assessing CMP because the agreement was not sealed by the court”. He concluded “I want the court to endorse and seal the agreement”. After several adjournments the matter was listed for a one-day hearing at the county court. It is unclear whether that hearing took place. What is clear is that the county court issued a consent order on 18 July 2012; as subsequently amended on 6 September 2012, the court’s order, said to be made under the Children Act 1989, simply read as follows:

 

“The Court Orders

1) By Consent the Court endorses the agreement of the parties dated 4^th February 2007.”

 

The father’s second appeal and the First-tier Tribunal’s second decision

14. The father’s appeal against the Agency’s decision of 1 June 2011 was initially adjourned to await the outcome of the county court proceedings. On 9 January 2013 the matter came (coincidentally) before Judge Anscomb, who further adjourned the case for a supplementary submission by the Agency dealing with the effect (if any) of both the original agreement in 2007 and the county court’s 2012 consent order. Judge Anscomb also made the following observations on adjourning: (1) his jurisdiction was limited to deciding whether the Agency’s decision of 1 June 2012 was correctly made; (2) he had no jurisdiction over collection and attribution of sums paid; (3) it appeared not to be in dispute that the sum of £54,375 had been transferred in accordance with the 2007 agreement; (4) the Agency might wish to consider regulation 9 of the Child Support (Management of Payments and Arrears) Regulations 2009 (“the 2009 Regulations”); (5) if the Agency treated the lump sum in that way, the father might withdraw his appeal, otherwise the matter would be re-listed.

 

15. The Agency’s supplementary submission argued that (i) the Agency had correctly assumed jurisdiction as from the initial effective date of 23 December 2008; (ii) the country court’s 2012 endorsement of the 2007 agreement had no effect on either the Agency’s jurisdiction or the present appeal proceedings; (iii) the tribunal had already decided the issue of the capitalised maintenance agreement at the first tribunal in 2009 and so the matter was “res judicata” (i.e. already decided as between the parties); (iv) questions as to payments and attribution were outside the tribunal’s jurisdiction. The father put in a further submission by way of reply, arguing (in summary) that “getting bogged down in jurisdictional arguments such as these will lead to an inequitable result”. He also referred to the problems he had encountered in getting a response from the Agency about offsetting under regulation 9 of the 2009 Regulations.

16. The First-tier Tribunal held a final hearing of the father’s second appeal on 9 April 2013. Only the father attended that hearing. Judge Anscomb confirmed the Agency’s decision of 1 June 2011 and dismissed the father’s appeal, holding that there were no grounds for changing the assessment and so the decision not to supersede the original maintenance calculation was correctly made. While making it plain that they were not formally part of his decision, the tribunal judge helpfully made three further observations. First, he acknowledged the mother’s letter dated 3 April 2013 (i.e. written in the week before the hearing) stating that she no longer wished to pursue any claim through the Agency against the father. Second, he repeated his suggestion that the Agency’s offset team consider whether the lump sum could be set off against any child support liability. Third, and if relevant, he noted that the father’s letter of 29 July 2011 could be seen itself as a request for a change of circumstances review, any decision on which would carry its own right of appeal.

 

The proceedings before the Upper Tribunal

17. Judge Williams gave the father permission to appeal against the First-tier Tribunal’s decision of 9 April 2013; the matter has since been transferred to me for decision. Ms Jennifer Tarver has made a detailed written submission on behalf of the Secretary of State, opposing the appeal. The father has made an equally if not more detailed submission in reply, developing his arguments further. I am grateful to them both for their arguments in this complex and unusual case. The mother has played no part in this appeal, just as she did not participate in the tribunal below. There is no need for an oral hearing of the appeal and none has been requested.

 

18. The written submissions made by Ms Tarver and the father, in response both to the original grounds of appeal and Judge Williams’s subsequent directions, have ranged over a number of issues. However, it seems to me that the father’s case may be best summarised as follows. He argues, essentially, that the First-tier Tribunal erred in law by (i) failing to take any or any proper account of the original capitalised maintenance agreement in 2007; (ii) failing to have regard to the county court’s endorsement of that agreement in the consent order in 2012; (iii) wrongly applying section 8(5) of the Child Support Act 1991; (iv) failing to exercise any discretion; and (v) failing to give adequate reasons. I will deal with each of these matters in turn.

 

The Upper Tribunal’s analysis

The nature and effect of the original capitalised maintenance agreement

19. As the father has been at pains to emphasise, both the government and the courts have encouraged “private ordering” in family law matters (see e.g. Smith v McInerney [1994] 2 FLR 1077 at 1081A per Thorpe J (as he then was)). The policy reasons for so doing need not be explored here; suffice to say that the principle of private ordering has been given a further boost by the enactment of section 136(1) of the Welfare Reform Act 2012, which inserts a new section 9(2A) into the Child Support Act 1991, enabling the Secretary of State to “take such steps as [he] considers appropriate to encourage the making and keeping of maintenance agreements.”

 

20. Yet, despite its reputation, the Child Support Act 1991 (“the 1991 Act”) has always provided a degree of support for private ordering. Thus written maintenance agreements entered into before the Act came into force (on 5 April 1993) in effect deprived the Agency of jurisdiction to make an assessment for all time, assuming (at least to start with) that the parent with care was not on benefit (see section 4(10)(a)). Furthermore, section 9(2) of the 1991 Act stipulates that “Nothing in this Act shall be taken to prevent any person from entering into a maintenance agreement”. However, section 9(3) provides that the mere existence of a (post 5 April 1993) maintenance agreement “shall not prevent any party to the agreement” from applying to the Agency for child support. This must be read in turn as subject to section 4(10)(ab), which provides that no application may be made where a maintenance agreement has been made on or after 3 March 2003 but has been in force for less than a year. In the present case the 2007 private agreement had been in force for almost two years before the mother applied to the Agency. On that basis, she was well within her rights to do so.

 

21. The above discussion assumes, however, that the informal capitalised maintenance agreement entered into by the parents in 2007 was indeed, for the purposes of sections 4 and 9 of the Child Support Act 1991, a “maintenance agreement”. Section 54(1) of the Child Support Act 1991 provides that that expression “has the meaning given in section 9(1)”. This provides as follows:

 

“Agreements about maintenance

9(1)– In this section “maintenance agreement” means any agreement for the making, or for securing the making, of periodical payments by way of maintenance, or in Scotland aliment, to or for the benefit of any child.”

 

22. The agreement made by the parents here was clearly for the child’s “maintenance”. The problem for the father, however, is that by no stretch of the imagination could it be described as an “agreement for the making, or for securing the making, of periodical payments by way of maintenance”. True, in one sense (and not the sense meant by the legislation) maintenance was secured, but under the statutory definition the agreement must be “for the making … of periodical payments”, i.e. regular payments defined by a set period (e.g. monthly). By its very terms this agreement provided for a lump sum payment, the very antithesis of periodical payments. The capital sum involved may well have been calculated by reference to what it was thought would otherwise be the appropriate child maintenance periodical payments in the future, but it remained a one-off capital transfer.

 

23. There is at least one situation in which legislation makes express provision that commuted maintenance can count as a “periodical payment”. This is the case in the context of the treatment of liable relative payments under the income support regime, where very different policy considerations apply. The definition of “periodical payment” in regulation 54 of the Income Support (General) Regulations 1987 (SI 1987/1967) is defined widely so as to include (in limb (d)) “any payment representing a commutation of payments” of a periodical nature. However, this broad definition applies solely for the purposes of Chapter VII of the 1987 Regulations. The legislator could have made similar provision under the 1991 Act and associated regulations, but chose not to. So under the Child Support Act 1991 “periodical payments” carries its normal meaning.

 

24. Indeed, the present case is in all material respects essentially on all fours with AMS v Child Support Officer [1998] 1 FLR 955, where a father had made a capital payment to the mother of some £35,000, as a result of a consent order made under the Guardianship of Minors Acts 1971 and 1973, that sum being calculated by what would have been a reasonable order for periodical payments for their young daughter. The Court of Appeal ruled that the consent order was neither a maintenance order not a maintenance agreement. The same fundamental principles apply in the present case.

 

25. It follows that the 2007 capitalised maintenance agreement was not a “maintenance agreement” within section 9 of the Child Support Act 1991. Nor was there anything either in section 4 of the 1991 Act to prevent the mother, who had received the benefit of what was in effect a commuted capital payment representing payment of future maintenance, from making an application for child support maintenance.

 

The county court’s consent order

26. The question then is whether the position was altered by the endorsement of the parents’ private agreement by the county court consent order made in 2012. There is a short answer to this, as Ms Tarver points out for the Secretary of State. Section 20(7) of the Child Support Act 1991 (as amended) provides that

 

“(7) In deciding an appeal under this section, the First-tier Tribunal –

(a)   need not consider any issue that is not raised by the appeal;

(b)   shall not take into account any circumstances not obtaining at the time when the Secretary of State made the decision or imposed the requirement.”

 

27. The Secretary of State’s decision under appeal before the tribunal below was taken on 1 June 2011. The consent order was not made until 18 July 2012. It was accordingly a circumstance “not obtaining at the [relevant] time” within section 20(7)(b). As such, the tribunal was barred from taking it into account. The father has no effective answer to this point in his submissions.

 

28. It is true, of course, that section 20(7)(b) of the 1991 Act (like its companion, section 12(8)(b) of the Social Security Act 1998) does not prevent a tribunal from taking into account evidence produced after the date of decision under appeal but which relates back to circumstances existing as at the date of that decision (see R(DLA) 2/01). For these purposes I will assume for the sake of argument – although it seems to me there are obvious difficulties with this approach – that the 2012 consent order not only ratified the informal accord with prospective effect, from the date of the court’s order, but also retrospectively with effect from the date it had been agreed in 2007. However, this does not assist the father either. The original capitalised maintenance agreement had no effect on his child support liability for the reasons set out above (at paragraphs 19-25). Cloaking the private accord with the official imprimatur of the county court, even if regarded as effective from the date of that informal agreement, makes no difference, for the reasons set out below (at paragraphs 29-35) as regards section 8(5) of the 1991 Act. I therefore agree with Ms Tarver that converting the private agreement into a consent order cannot have the effect of retrospectively removing the mother’s right to make an application for child support maintenance. It follows that the tribunal was correct to take the view that the consent order did not affect its decision.

 

Section 8(5) of the Child Support Act 1991

29. In his submissions to the tribunal below, the father placed great emphasis on section 8(5) of the Child Support Act 1991 and article 2 of the Child Maintenance (Written Agreements) Order 1993 (SI 1993/620; “the 1993 Order”). His argument was that this preserved the jurisdiction of the courts to make a child maintenance order and that as a result the capital payment he made should be taken into account in assessing his child support liability with effect from February 2007. Ms Tarver boldly submits that the county court had no jurisdiction to make the order it did in 2012. The position is actually rather more complicated than either party suggests.

 

30. Section 8 is designed to ensure the pre-eminence of the statutory child support regime over the courts’ powers to make maintenance orders. Although headed “Role of the courts with respect to maintenance for children” it might have been more aptly entitled “Residual role of the courts with respect to maintenance for children”. It applies in any case where, on an application for child support, the Secretary of State would have jurisdiction to make a maintenance calculation (section 8(1)). The general rule (subject to an exception which does not apply here) is that “no court shall exercise any power which it would otherwise have to make, vary or revive any maintenance order in relation to the child and non-resident parent concerned” (section 8(3)). A court may, of course, revoke such an order (section 8(4)). Section 8(5), on which the father relies, then provides as follows:

 

“The Lord Chancellor or in relation to Scotland the Lord Advocate may by order provide that, in such circumstances as may be specified by the order, this section shall not prevent a court from exercising any power which it has to make a maintenance order in relation to a child if–

(a) a written agreement (whether or not enforceable) provides for the making, or securing, by a non-resident parent of the child of periodical payments to or for the benefit of the child ; and

(b) the maintenance order which the court makes is, in all material respects, in the same terms as that agreement.”

 

31. Article 2 of the 1993 Order declares, by way of a belt and braces provision, that section 8 “shall not prevent a court from exercising any power which it has to make a maintenance order in relation to a child in any circumstances in which paragraphs (a) and (b) of section 8(5) apply.”

 

32. Section 8(5) undoubtedly provides statutory encouragement for consent orders. But just because a consent order has been made does not mean that its terms override the Secretary of State’s jurisdiction to make a maintenance calculation. There are at least three reasons why the father’s submissions on this point are fundamentally misplaced.

 

33. First, section 8(5)(a) presupposes a written agreement between the parties which “provides for the making, or securing, by a non-resident parent of the child of periodical payments to or for the benefit of the child”. As explained above, an accord for a lump sum payment representing commuted maintenance falls outside this definition (see paragraphs 21-25 above). In other words, the father cannot claim the benefit of whatever advantage is conferred by section 8(5) as he falls outside its terms.

 

34. Second, and reinforcing the first point, the expression “maintenance order” as used in section 8(5)(b) “in relation to any child, means an order which requires the making or securing of periodical payments to or for the benefit of the child” and which is made under specified legislation, including Schedule 1 to the Children Act 1989 (section 8(11)). In the present case, although no more precise authority was cited by the county court, the consent order was presumably made under paragraph 1(2)(c) of Schedule 1, which provides for lump sum orders, rather than paragraph 1(2)(a), which deals with unsecured orders for “periodical payments, for such term, as may be specified in the order”. It follows that, contrary to Ms Tarver’s submission, the county court did have jurisdiction to make the order it did. The consent order was in the nature of a lump sum order; it was not a maintenance order for the purposes of section 8 and so the court retained jurisdiction in any event.

 

35. Third, and in any event, even if the private accord had been a maintenance agreement, and/or even if the subsequent consent order had been a maintenance order within section 8(5) of the 1991 Act, it would not have had the effect on liability which the father claims. He argues that if he and his ex-partner had gone to court in 2007, or even gone to court on the day before the application was made to the Agency in 2008, then the agreement would have been recognised and taken into account. Not quite so. If they had obtained the consent order in February 2007, then the mother was perfectly entitled to claim child support in December 2008 as the one year “moratorium” had expired by then (see section 4(10)(aa)). Had they obtained the consent order in December 2008, then by the same token the mother would have had to wait till December 2009 before making an application. But that is not what actually happened. Moreover, in neither case would the terms of the original agreement or the subsequent consent order get factored into the calculation of the father’s child support liability. There is, very simply, no provision under either the standard formula or the variations scheme which provides for such an allowance.

 

The tribunal’s failure to exercise any discretion

36. The father argues that the tribunal erred in law by failing to exercise its discretion to take into account the informal maintenance accord (and by extension the consent order).  This argument goes nowhere. Under the Child Support Act 1991 the tribunal does not have some general discretionary power to disregard statutory provisions which may appear to result in injustice or unfairness. Nor does the Tribunals, Courts and Enforcement Act 2007 grant the tribunal any such power. There is, of course, the requirement to have regard to the welfare of any child likely to be affected by any decision (see section 2 of the 1991 Act), but this applies only where the Secretary of State (or, where appropriate, the tribunal in his stead) is “considering the exercise of any discretionary power conferred by the Act”, and no such relevant power is vested in tribunals. Section 2 may be highly relevant in the context of discretionary decisions on enforcement (see e.g. Brookes v Secretary of State for Work and Pensions and CMEC [2010] 2 FLR 1038), but enforcement issues are for the Secretary of State alone, and not the tribunal.

 

A failure to give adequate reasons?

37. This is the strongest of the father’s arguments. The tribunal’s reasons are, with respect, fairly summary. However, Ms Tarver draws to my attention the observations which I made in unreported decision CCS/201/2013 (at paragraph 21), and which in turn echoed the comments of Keene J, sitting in the Employment Appeal Tribunal in Derby Specialist Fabrication Ltd v Burton [2001] ICR 833 (at paragraph 32):

 

“It is fundamental that a tribunal’s statement of reasons must be read in context. It is not an explanation addressed to a stranger to the dispute. It is a set of reasons directed to the parties, who know the issues, the background and the documentation. This context is an important factor which affects the detail to be expected in terms of adequacy of reasoning.”

 

38. In the present case, the context clearly includes the proceedings before the first tribunal as well as the various directions and submissions on the appeal before the second tribunal. Given that context, I take the view that the tribunal’s reasoning is adequate, subject to one proviso.

 

39. The proviso concerns the second tribunal’s statement that there was no need to deal with the 2007 private agreement as “the question of the lump sum payment was decided by the [first] Tribunal on 4 August 2009”. That echoed the Agency’s submission to the second tribunal that the matter was “res judicata”. However, as the Upper Tribunal noted in RC v CMEC and WC [2009] UKUT 62 (AAC) (at paragraph 54), “there is little room for a strict application of the rules of ‘issue estoppel’” in child support appeals, not least because of section 46A of the 1991 Act. The Upper Tribunal went on to hold that “if there is no evidence to the contrary, tribunals may be entitled to conclude that the findings previously made are sufficient and reliable” (at paragraph 57).

40. In my view this is precisely what the second tribunal did here – it correctly took the view that there was no material to justify re-opening the issue of the effect of the 2007 private agreement. Rather, it focussed on the new point, namely the conversion of that accord into a court order by consent. However, that did not assist the father for the simple reason that, as the tribunal concisely but accurately explained, “the exception referred to in section 8(5) relates to the making of ‘periodic payments’ and not a lump sum.” Judge Anscomb also quite rightly explained that his jurisdiction on the appeal was limited to determining the correctness or otherwise of the Agency’s refusal to supersede on 1 June 2011. Thus, although the second tribunal might well have given more expansive reasons, in the context of these proceedings it gave adequate reasons.

 

The Upper Tribunal’s conclusion on the father’s grounds of appeal

41. I therefore conclude that the father has not demonstrated any error of law in the tribunal’s decision. The appeal is accordingly dismissed, and the tribunal’s decision stands. However, there are several other issues which merit comment.

 

Other issues

The mother’s request for the Agency to cease taking action

42. As Judge Anscomb noted, at the hearing before the second tribunal the father produced a letter, signed by the mother a few days previously, in which she stated that “further to the consent order sealed and endorsed by Croydon County Court on 6^th September 2012, I no longer wish to pursue any claim through the CSA against [the father]”. The letter was addressed to the Clerk to the Tribunal.

 

43. A person who has made an application for child support under section 4 of the 1991 Act “may at any time request the Secretary of State to cease acting under this section” (section 4(5)). The Secretary of State is obliged to comply with such a request (section 4(6)). It is unclear when exactly the Secretary of State received a copy of this request, given that there was no presenting officer in attendance at the second tribunal hearing. Furthermore, the request does not, of itself, authorise the cancellation of the maintenance calculation – it simply provides for the Secretary of State “to cease acting” (CCS/13/1994 at para. 5, per Mr Commissioner Goodman). It follows that the calculation remains valid and in force for the period up to the point at which the Secretary of State ceases action.

 

The father’s changes of circumstances

44. The only decision which was before Judge Anscomb was the Agency’s decision of 1 June 2011. This was the Agency-initiated decision not to supersede the original maintenance calculation of 19 February 2009. The father notified various changes in his circumstances in his letter of 29 June 2011. However, the second tribunal was right not to address these, as changes of circumstances can only be taken into account from the first day in the maintenance period in which they were notified to the Agency (Child Support Act 1991, section 17(4)). It follows that changes notified on 29 June 2011 cannot be taken into account when considering a decision taken on 1 June 2011; under the cumbersome child support decision-making machinery, they may result in a separate decision with separate rights of appeal. Judge Anscomb sensibly made a direction that the Agency consider the letter of 29 June 2011 as a change of circumstances review, if such an approach is still appropriate after the Agency has given further consideration as to whether it can give credit for the capital transfer.

 

The voluntary payments question

45. Judge Anscomb was understandably looking for some way in which the Agency might be encouraged to give appropriate credit for the capital transfer in 2007. He suggested that one possibility might be by way of recognition of voluntary payments under regulation 9 of the Child Support (Management of Payments and Arrears) Regulations 2009 (SI 2009/3151). This appears to be promising as regulation 9(1) enables the Secretary of State to “apply the amount of the voluntary payment to reduce any arrears of child support maintenance due”. As Judge Anscomb noted, this is a collection matter for the Secretary of State, which does not carry appeal rights to the First-tier Tribunal.

 

46. However, there is a more fundamental problem. The 2007 capital transfer was obviously in plain English both “voluntary” and a “payment”. However, it was not a “voluntary payment” under the child support scheme. Section 28J(1) of the 1991 Act provides that the voluntary payment rules apply in the interim period between an application for child support and the Secretary of State’s maintenance calculation. In effect, it is a scheme that gives credit for payments on account made after the effective date but whilst a live application is being processed by the Agency. In the present case the capital transfer was made well before the maintenance application, so the voluntary payment provisions simply do not apply.

 

Other collection issues

47. Even though the voluntary payments regime does not apply, that is not necessarily the end of the matter. Insofar as there is any amount of child support outstanding under the Agency’s maintenance calculation, the Secretary of State’s role in ensuring collection is governed by section 29 of the 1991 Act and regulation 2 of the Child Support (Collection and Enforcement) Regulations 1992 (SI 1992/1989). Certain of the Secretary of State’s powers in this respect are discretionary, meaning that section 2 of the Act applies (see paragraph 36 above). There is, of course, no right of appeal to the First-tier Tribunal on collection and enforcement issues, which must be pursued internally through the Agency (and in the last resort, failing a satisfactory resolution, challenged in the Administrative Court by way of an application for permission to apply for judicial review).

 

The wider policy question

48. The child support scheme, through both the departures and variation schemes, has made allowances for certain types of property transfer that took place between separated parents before the 1991 Act came into force (i.e. before 5 April 1993). It does not make express statutory provision for the type of post-1993 capitalised maintenance payment agreed in the present case, for the reasons set out above. One reason may be that it is assumed that separating parents will take professional advice and arrange their financial affairs accordingly “in the shadow of the Agency”. This case shows that even lawyers do not understand the child support scheme. It is a moot question as to whether cases such as the present (of which there are presumably very few) should be the subject of some specific statutory amendment or whether matters should be left to the Agency’s discretion in making collection and enforcement decisions. I indicated above that the circumstances of this case are effectively on all fours with those in AMS v Child Support Officer [1998] 1 FLR 955 (paragraph 24 above). I simply note that Thorpe LJ concluded his concurring judgment in that appeal with the following observation (at 964F):

 

“It seems to me that, if injustice is not to be repeated in cases such as this, payment of future maintenance by a commuted capital sum, whether by agreement or by order of the court, is a discharge of a liability that deserves to be fully recognised in the formulaic assessment process that the Child Support Act adopts.”

 

 

Conclusion

49. For the reasons above Judge Anscomb of the First-tier Tribunal came to the correct decision and so the father’s appeal to the Upper Tribunal is dismissed (Tribunals, Courts and Enforcement Act 2007, section 11). The decision of the First-tier Tribunal therefore stands. 

 

 

 

 

 

 

 

Signed on the original Nicholas Wikeley

on 19 February 2014 Judge of the Upper Tribunal