Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Appeal No: CCS/69/2015

ADMINISTRATIVE APPEALS CHAMBER

Before: Upper Tribunal Judge Wright

DECISION

The Upper Tribunal disallows the appeal of the appellant.

Although, the decision of the First-tier Tribunal made in Taunton on 8 June 2014 under reference SC206/13/01492 involved an error on a point of law that error was not material to the decision as it has been implemented and I therefore decline to set the decision aside.

This decision is made under section 12(1) and 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007

REASONS FOR DECISION

1.                   This appeal is brought by the mother who, in child support language, is the “parent with care” of the children concerned and was the appellant in the appeal below. I will refer to her simply as “the mother”. The first respondent is the Secretary of State, and I shall refer to him as that.  The second respondent here and in the appeal below was the father.  In child support language he is the “non-resident parent” of the children. I will refer to him simply as “the father”.

2.                  The decision under challenge is encapsulated in the decision given by the First-tier Tribunal on 8 June 2014 (“the tribunal”). The Decision Notice set out, relevantly:

“The Appeal is allowed to the extent set out below.

The decision of the Child Support Agency dated 15^th April, 2013 is set aside.

Child maintenance payable by [the father] for the period 26/2/2013 to 3/6/2013 is to be recalculated by the CSA to take into account that the gross earned income from self-employment [i.e. before deduction of Income Tax and National Insurance] is £908.25.”

3.                  District Tribunal Judge Ponting gave the mother permission to appeal on 26 November 2014 on the basis that it was arguable that the tribunal had erred in a law in directing the Secretary of State to average the father’s self-employed earnings over an incorrect period of 26 February 2013 to 3 June 2013. Judge Ponting pointed out, correctly, that the tribunal had evidence of earnings from 26 February 2014 to 15 April 2013, and he queried whether the tribunal could go beyond that date, that being the date of the decision under appeal, given the strictures of section 20(7)(b) of the Child Support Act 1991. He asked “should the earnings not have been averaged over the period 26.02.13 to 15.04.13?”.

4.                  In giving permission Judge Ponting asked for the “opinion of the Upper Tribunal on [this] point”.  This limited the scope of the appeal to this point alone.  In her appeal to the Upper Tribunal the mother did not seek permission to appeal on any grounds other than the correct period to be taken into account. Indeed in her grounds to the First-tier Tribunal seeking permission to appeal she accepted that the costs of the car insurance, mobile phone and computer would all need to be deducted from the gross self-employed earnings (see page 152).  I therefore do not consider it is open to the Secretary of State to now seek to impugn the tribunal’s decision on the basis that it did not address adequately the expenses of the computer, mobile phone and car insurance. No permission has been given to raise these issues on this appeal.

5.                  Turing back then to the sole issue on which permission was granted, I consider there is considerable force in the Secretary of State’s submission that the tribunal left it unclear over which period the earnings were to be attributed, and thereby erred in law. This case was unusual in that the self-employed earnings taken into account by the tribunal in fact ended before 15 April 2015 (see pages 122 and 123).  The tribunal therefore had clear evidence of the self-employed father’s earnings that fell before the date of the decision under appeal.  There were then no further earnings from self-employment paid to the father after 15 April 2013.  The father became employed on or about 4 June 2013. As a consequence of him having no self-employed earnings between 15 April 2013 and 4 June 2013 the self employed earnings for the periods 26 February 2013 to 15 April 2013 and 26 February 2013 to 3 June 2013 are in fact in the identical sum of £3009.40 gross or £908.25 net.  How then are those earnings to be attributed? Put another way, over what period is the £908.25 to be averaged?

6.                  As I have already said, I consider the tribunal judge erred in law in not making the answer to the above question clear. In fact it is now clear that the Secretary of State implemented the tribunal’s decision by taking the £908.25 and spreading it over the 7 weeks from 26 February 2013 to 15 April 2013 (and then deducting tax and national insurance): see paragraph 9 on page 162 and page 171. In my judgment, and in agreement with the ground on which permission to appeal was given, as a matter of law that was the correct period to use as it properly ignores circumstances obtaining after the date of the decision under appeal: per section 20(7)(b) Child Support Act 1991. Judge Ponting had in fact sought this information before he gave permission to appeal (page 153) but was not provided with it. Had he been provided with this information within the 28 days he gave I suspect he may well not have given permission to appeal.

7.                  The injunction in section 20(7)(b) requires a First-tier tribunal not to “take into account any circumstances not obtaining at the time when the decision appealed against was made”. What this in effect requires the tribunal to do is stand in the shoes of the decision maker, on here 15 April 2013, and take an independent and expert view about what the decision ought to have been as at that date. The tribunal here, therefore was not concerned with the father’s self-employed earnings that arose after 15 April 2013, whether they went up dramatically or fell away, as it was not deciding the correct level of child support maintenance payable on 16 April 2013 or, for example, 1 June 2013. If the father’s circumstances changed after 15 April 2013 then the remedy was either for him or the mother to seek a supersession of the 15 April 2013 decision on the ground of change of circumstances under section 17 of the Child Support Act and regulation 6A(2)(a) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999.

8.                 This is not to say that evidence of self-employed earning that fall after the date of decision under appeal have to be ignored completely.  That evidence can be taken into account but only insofar as it relates to the self-employed earnings arising before that date: per paragraph 31 of CCS/1137/2006, paragraph 10 of CCS/1325/2006 and LW –v- CMEC & KW (CSM) [2010] UKUT 184 (AAC) at paragraph 37. Thus, for example, accounts filed after the date of a decision under appeal may usefully cast light on what a person in fact was earning in the relevant period prior to the date of the decision under appeal if the evidence absent those accounts is patchy and unclear as to the earnings at the relevant date. 

9.                  I do not read paragraph 9(3) in the Schedule to the Child Support (Maintenance Calculations and Special Cases) Regulations 2000 as leading to a contrary result, as the Secretary of State would seem to contend.  Broadly speaking paragraph 9(3) allows the Secretary of State to choose a different period over which to average self-employed earnings to the period of 52 weeks or, if less than 52 weeks, the period over which earnings were earned laid out earlier in paragraph 9, if by applying either such period would lead to an inaccurate figure for normal weekly income.  In such a case the Secretary of State may use such other period as will enable the normal weekly earnings to be calculated more accurately. However, I do not see this as enabling the choice of a period falling after the date of the Secretary of State’s decision. To start with, this would be illogical if not impossible as it would require the Secretary of State to choose a period which by definition he cannot know about at the time he makes his decision. Secondly, it would be contrary to section 20(7)(b) and the case-law cited above.  Thirdly, it would render the supersession powers effectively nugatory for these purposes. None of this means, as I have indicated,  that the tribunal on an appeal cannot look at accounts or other evidence falling after the decision date, but it seems to me that that can only be relevant if it better informs the self-employed earnings that were in fact earned in the relevant period falling before the decision date.

10.              I also do not agree with the Secretary of State’s submission that the decision in CCS/2474/2011 is authority for a First-tier Tribunal being able to consider earnings earned after the date of the decision under appeal.  It is perhaps ironic that Judge Wikeley in that decision rejected an argument from the Secretary of State that the First-tier Tribunal had erred by stepping beyond section 20(7)(b) by looking at an October 2008 valuation of an asset in respect of a June 2008 effective date.  However, in rejecting that argument Judge Wikeley was not endorsing the tribunal in terms of its arriving at an October 2008 valuation for the asset. As he made clear (paragraph 17), the share valuation may well have been the best evidence of the value of the asset in June 2008. His decision therefore is simply a restatement of the case-law set out in paragraph 8 above.

11.               In this case there was clear evidence as to the self-employed earnings the father had earned in the period before the date of the decision. Moreover, those earnings (the £908.25 net) provided a rational evidential basis for the father’s earned income over a seven week period which properly fell within paragraph 9(3) in the Schedule to the Child Support (Maintenance Calculations and Special Cases) Regulations 2000.

12.              The tribunal, however, erred in law by not making it clear which period the earnings were to be averaged over and/or in holding that they could be averaged in such a way that would have treated them as earnings falling after the date of the decision under appeal contrary to section 20(7)(b) of the Child Support Act 1991.

13.              However, as the Secretary of State has in fact properly averaged the earnings over a seven week period running up to the date of decision under appeal, there is no point in my setting the tribunal’s decision aside for material error of law as the implementation of the decision has as a matter of fact cured any of the errors the tribunal made. 

 Signed (on the original) Stewart Wright

Judge of the Upper Tribunal

Dated 28^th July 2015