Upper Tribunal (Administrative Appeals Chamber)

DECISION OF THE UPPER TRIBUNAL

(ADMINISTRATIVE APPEALS CHAMBER)

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

The decision of the Bristol First-tier Tribunal dated 09 July 2014 under file reference SC260/13/00422 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 parties to this appeal

1. The Appellant is the parent with care (or “the mother”). The Second Respondent is the non-resident parent (or “the father”). They are the parents of three “qualifying children” for the purposes of the Child Support Act 1991 (although, because of their ages and the length of time these proceedings have carried on, one or more may not be “qualifying children” by now). The Second Respondent is the Secretary of State for Work and Pensions (for practical purposes the Child Support Agency, or CSA).

The general background to this case

2. There were bitterly fought ancillary relief proceedings in the county court. Although those proceedings now appear to be concluded, the parties’ dispute has continued in the Child Support Agency and the First-tier Tribunal (“the Tribunal”). The relationship between court and Tribunal proceedings is potentially complex. Suffice to say that in broad terms the county court is concerned with capital adjustments and provision as between the divorcing parents while the Tribunal is focussed on income maintenance for children. One of the complications of the inter-relationship between the two systems is that in certain circumstances a non-resident’s capital assets can be used on a variation to adjust the amount of child support maintenance that would otherwise be payable.

The particular background to this appeal

3. The Child Support Agency made a series of decisions about the father’s child support liability. On 6 March 2013 it made a decision with effect from 4 May 2012 that the father was liable to pay £38 a week in child support. This was a substantial reduction from the previous award. The reason for the reduction was that the CSA had removed a variation based on the father’s assets. The mother understandably lodged an appeal against the Agency’s decision.

4. The Tribunal held an initial hearing on 24 February 2012 and made various directions. These were followed by further case management directions on 8 May 2014. I note the mother’s argument that the father had failed properly to disclose relevant information. However, by the time the Tribunal got to the final hearing the appeal bundle ran to over 350 pages. This was a very experienced Tribunal panel (District Tribunal Judge (DTJ) A.D. Walker and financial member Mr A.W. Perrin). If they considered that they needed further information, I am sure that they would have considered whether a further adjournment was necessary.

5. The final hearing took place on 9 July 2014. The Tribunal’s decision was to allow the appeal, effectively in part at least (see decision notice at p.377). In short, the Tribunal reinstated the assets variation and remitted the case to the CSA for the father’s liability to be reassessed on the basis it set out. The Tribunal declined to make a variation on any other ground. The Tribunal later set out its full reasons for its decision (pp.380-383). On 7 October 2014 DTJ Walker refused both parents permission to appeal to the Upper Tribunal (p.390).

The permission proceedings in the Upper Tribunal

6. Both parties separately renewed their applications for permission to appeal against the First-tier Tribunal (FTT)’s decision direct to the Upper Tribunal, as they are entitled to do.

7. I dealt first with the father’s application under the separate case reference CCS/5506/2014. The father’s application was a challenge to the Tribunal’s conclusions on the assets variation ground. On 7 April 2015 I refused the father permission to appeal in the following terms:

“What the Applicant [here the father] is really doing is taking issue with the FTT’s conclusion on the facts, which is not an issue that can be appealed to the Upper Tribunal. His arguments relate to the valuation of the two properties at […] Court and […] Drive. It is well known that valuation is an art not a science. So far as […] Court is concerned, the FTT opted for a valuation that was a rough and ready compromise and which was open to it on the evidence. As regards the land at […] Drive, it might have been better for the FTT to have dealt with the development gain point, but there was no hard evidence on this and the matter appears to have been raised relatively late. It is also unlikely that the development gain point would have much if any impact on the outcome overall.”

8. In his subsequent submissions to the Upper Tribunal on the mother’s appeal, the father has reiterated his arguments about the valuation of the properties. If I were to allow the appeal and then either re-decide the matter myself, or send the case back for re-hearing, it might have been relevant to consider those arguments. However, I have already refused the father permission to appeal and the mother’s appeal has been unsuccessful, so there is nothing more to be said on this point.

9. I did, however, give the mother permission to appeal on the same date that I dealt with the father’s application. In broad terms the mother’s main grounds of appeal were that the Tribunal had failed to act sufficiently inquisitorially, and in particular with regard to her arguments for a variation based on either diversion/income not taken into account and/or “inconsistent lifestyle” under the Child Support (Variations) Regulations 2000 (SI 2001/156, as amended) (pp.394-396).

10. When giving permission to appeal, I explained why the arguments based on diversion/income not taken into account were not persuasive:

“I doubt there is much in the point made about dividends; it seems no dividend was in fact paid and the company’s cash balances were modest. Nor does there seem to me to be much in the argument about the director’s loan account; drawings are payments of capital, not income, and so fall outside the formula assessment (see the case of Chandler, reported as R(CS) 2/08). Likewise there seems to be at best a slim evidential basis for an argument based on diversion as regards the employment of the non-resident parent’s mother in the company.

11. I see no reason to change my mind as regards that preliminary assessment, notwithstanding the further submissions received, which are almost wholly devoted to factual issues.

12.  However, when giving the mother permission to appeal, I did remark as follows:

“7. The mother’s strongest argument, or so it seems to me on a preliminary review, is the issue of inconsistent lifestyle. Has the FTT found sufficient facts and adequately explained its decision on this point? Should the FTT have gone through the budgeting form, established which items should be added or increased and made a clear identifiable decision as to the size of the ‘gap’? Having done that, should it have made findings as to the amounts from other sources, so as to decide if they ‘filled the gap’? Having re-read the FTT’s statement of reasons, it is almost as though the Judge decided that ‘one variation is enough’ [based on assets], and then dealt rather cursorily with the lifestyle issue.”

The evidence in the Upper Tribunal proceedings

13. Before dealing with the main legal issue arising on this appeal, I should just mention three matters about the further evidence provided by both parties on this appeal to the Upper Tribunal.

14. First, I entirely understand why both parents, who are litigants in person and presumably now acting without the benefit of professional legal advice, are anxious that I see as much evidence as possible that, in their eyes, supports their case. However, the basic rule is that the FTT, not the Upper Tribunal, is the judge of the facts – it follows that the hearing before the Tribunal below is where relevant evidence should be introduced. The new further evidence might become relevant if I were to decide that the Tribunal had erred in law and it was appropriate for the Upper Tribunal to re-make the decision under appeal. But new evidence as to the facts that was available and could have been produced at the time of the original Tribunal hearing cannot be used now to show that the Tribunal below erred in law.

15. Second, and in particular, the mother has provided further evidence marked “private and confidential”, which she does not wish to have disclosed to the father. I entirely accept that she took this step on the advice of the Upper Tribunal clerk. It is, of course, the position that only a Judge can decide on the admissibility of evidence, and the basis on which it is admitted, and not a clerk, which is why the clerk gave the advice she did. I have not had regard to that extra evidence, as I simply cannot accept it on the basis sought. As I explained in my case management directions of 24 August 2015:

“I simply cannot accept evidence on that basis. She [the mother] would doubtless be upset and would have every right to be upset if the father tried to introduce evidence on his behalf about her without giving her the chance to rebut that evidence. The same principle applies the other way round. The extra evidence must be returned to her un-copied and not admitted or issued. I will only consider such evidence on an open basis giving all parties the chance to comment. Justice must not only be done, it must be seen to be done.”

16. The third matter relates to evidence from the earlier ancillary relief proceedings in the county court. The Tribunal had before it some of the documentary evidence about the father’s resources that had been before the county court. The only official Court Order that the Tribunal had before it was the Order of HH Judge Marston, dated 10 May 2013 (p.87), which gave the mother permission to disclose Form E and any other documentary evidence about the father’s income for the purpose of the CSA proceedings. In his first submission to the Upper Tribunal, however, the father included 3 non-sequential pages from what was headed a “draft judgment” in the county court along with a page from another court document. The mother telephoned the Upper Tribunal office to complain that the father had included court documents which he did not have permission to re-use, as she had herself obtained (p.87).

17. As I explained in my case management directions of 24 August 2015, the mother’s complaint was based on a misunderstanding. Private family court papers can obviously be communicated to others where the court gives permission (Family Procedure Rules 2010 (SI 2010/2955, as amended), rule 14.14(a)). In addition, rule 14.14(b) provides that such information can be communicated “unless the court directs otherwise, in accordance with Practice Direction 14E” (which deals with “Communication of information relating to [family] proceedings”). Paragraph 1.3 of Practice Direction 14E expressly allows a party to communicate such information without the permission of the court to (amongst others) tribunals in connection with child support appeals. So the father did not need the court’s express permission to produce the court documents.

18. However, that was not the end of the matter. The pages provided by the father were as already noted (a) incomplete and (b) part of a draft judgment only; furthermore (c) one page seemed to come from a different court document altogether. As I further explained in my case management directions of 24 August 2015, “I am not reading or relying on (i) draft and (ii) incomplete court documents; there may be other relevant material in the rest of the judgements. I can only admit them and rely on them as evidence if I see the whole document, not a selected extract.”

19. The father has now provided full copies of both documents. The first is the complete 11-page draft judgment of District Judge (DJ) Daniel dated 10 April 2012 (pp.460-471). I have not had sight of his final judgment, but for the reasons that follow that is immaterial. I accept that as litigant in person the father may have had difficulty in laying his hands on the final version. The second is the complete 5-page judgment of HH Judge Marston dated 28 August 2012, in which the Judge refused the mother permission to appeal against the final decision by DJ Daniel dated 30 May 2012. From reading HH Judge Marston’s ruling it is clear there was little significant difference (if any) between the District Judge’s draft and final judgment. Two matters are clear. First, there was a protracted and bitterly contested 4-day hearing before DJ Daniel. Second, both Judges formed an adverse view of the mother’s conduct of the ancillary relief proceedings. However, none of this really impacts very much (if at all) on the issue I have to determine.

The submissions in the Upper Tribunal proceedings

20. The Secretary of State’s representative, Mr Kevin McClure, makes what is, with respect, a somewhat curious submission (pp.402-404). He does not actually say outright whether or not the Secretary of State supports the appeal. He seems to adopt an air of studied neutrality. He suggests that if I find the Tribunal’s decision to be wrong in law, then there may be enough evidence to re-make the decision at Upper Tribunal level. He agrees that the Tribunal dealt “only briefly with the issues of a possible diversion of income and an allegedly inconsistent lifestyle”. However, he says that he is not convinced “that the tribunal was wrong in law either not further analysing these issues during the hearing, or in not deciding on a making of a variation in this respect.” He characterises the mother’s grounds of appeal as “very much a product of hindsight”. He then, however, rather proceeds on the assumption that the Upper Tribunal will allow the appeal, and considers some of the evidential matters that arise. His own conclusion is that “there is little evidence that the father, at the relevant date, had a lifestyle which was clearly inconsistent with his declared income.”

21. Both parents’ various submissions, understandably, are focussed on the merits of the case as they see it, rather than on the narrower issue as to whether the Tribunal went wrong in law.

The Upper Tribunal’s analysis

22. In my initial Observations on this appeal, I indicated that the test I had to apply for giving permission to appeal was whether there was “a realistic prospect of the appeal succeeding.” My conclusion was that the mother’s grounds of appeal were arguable. However, I cautioned that “whether they actually succeed is another matter, to be decided later after everyone else has had their say.” I also observed that both parents were unhappy with the First-tier Tribunal’s decision “which might, of course, suggest that its decision was right”.

23. I also indicated when giving permission to appeal that the mother’s strongest point was the ground of appeal relating to the Tribunal’s treatment of the claim for a variation based on inconsistent lifestyle. Having reviewed all the submissions, I remain of the view that it is her best point. However, the fact that it is arguable does not necessarily mean that it is determinative. For the reasons that follow, I am not satisfied that the Tribunal erred in law.

24. The starting point is that a tribunal does not have to make specific findings of fact and give reasons for all the matters in dispute between the parties. What the Tribunal must do is make sufficient findings of fact and give adequate reasons for its decision as a whole, explaining why it is that one party won and the other party lost. The test for reasons is context-specific and is one of adequacy, not optimality – the fact that another tribunal might have gone into more detail is neither here nor there, providing the fact-finding and explanation of reasons is adequate.

25. The Tribunal certainly made ample findings of fact and gave perfectly adequate reasons for its decision to reinstate the assets variation on the terms it stated. The father still seeks to challenge that, but I have explained above why that challenge is going nowhere (see paragraph 8 above).

26. The Tribunal undoubtedly devoted less attention to the possibility of a variation on the basis of inconsistent lifestyle. However, it would be wrong to focus solely on the Tribunal’s reasons for making no other variation as set out in paragraph [19] of its decision. The reasoning there must be read in the context of the decision as a whole, and in particular the Tribunal’s findings of fact at paragraphs [4], [6], [8], [11] and [12] about the father’s income.

27. The Tribunal was certainly entitled to find that the father’s business in mortgage brokerage was not one that lent itself to cash transactions. The Tribunal was also entitled to find that there was a downturn in that line of work at the relevant time (as is a matter of common knowledge). The Tribunal’s findings that various deposits were the result of sale of various items (by implication without him being in business as a trader) or by way of support from his mother were ultimately again issues of fact for it to determine on the evidence. On balance, the Tribunal’s treatment of the inconsistent lifestyle point, while concise, was adequate, given the circumstances of the case. There was no real persuasive evidence that the father was living a lavish lifestyle way beyond his declared means. I also recognise that the Tribunal had considered the assets variation with care, and explained in some detail how it had arrived at the conclusion that a variation on the basis was just and equitable, including a slight abatement of the statutory rate of interest. All that also suggests that the prospects for an inconsistent lifestyle variation were at best rather limited.

28. In that context I also agree with Mr McClure’s assessment that “there is little evidence that the father, at the relevant date, had a lifestyle which was clearly inconsistent with his declared income.” That further suggests that even if the Tribunal’s fact-finding or reasons on this point were inadequate, it had no material effect on the outcome of the appeal.

29. I also bear in mind that there are limits to the extent to which the Tribunal is expected to pursue an inquisitorial approach in child support cases, particularly in appeals of this type. Although both parties were acting in person, it is clear from the past history and from the correspondence on file that they are both resourceful, determined and articulate. As Mr Commissioner (now Judge) Rowland, commented, the proceedings as between the parents are essentially adversarial, even if the role of the CSA (and on appeal the Tribunal) is investigatory (unreported Commissioner’s decision CCS/2861/2001 at paragraph 7). However, that inquisitorial role may be tempered by the adversarial prism of the dispute between the parents.

30. There is, in any event, something of a problem with the type of challenge being mounted by the mother. She has devoted considerable time and effort to seeking to show that the father has additional and undisclosed sources of income. Even if this were the case, it would not actually assist her case on a variation application for inconsistent lifestyle. This is because any income stream identified which was not earnings would have no effect on the formula assessment, and would only go to show how the father had made up any deficit shown by comparing his declared income with his budgeting form.

31. Although I have not relied on their judgments in reaching this conclusion, I note that the Tribunal’s findings and reasoning are broadly consistent with the more detailed analysis provided by DJ Daniel and HH Judge Marston in the ancillary relief proceedings, even though those judgments were not before the Tribunal.

Conclusion

32. For the reasons above the First-tier Tribunal did not err in law in reaching its decision and so the mother’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. It is unclear what steps, if any, the CSA has taken to implement that decision. It is entirely possible the Agency has postponed taking any steps pending the outcome of this appeal. In any event, the First-tier Tribunal’s decision should be implemented.

Signed on the original Nicholas Wikeley

on 22 October 2015 Judge of the Upper Tribunal