Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL Case No.  CCS/3628/2012

ADMINISTRATIVE APPEALS CHAMBER

 

Before Upper Tribunal Judge Rowland

 

Attendances:

 

For the Appellant: Mr Jody Atkinson of counsel, instructed through direct access

 

For the First Respondent: Mr Huw James, solicitor

 

The Second Respondent appeared in person.

 

 

Decision:  The father’s appeal is unsuccessful.  Although there are minor errors of law in the First-tier Tribunal’s decision, I am not satisfied that I should set its decision aside.

 

I refuse permission to apply for judicial review of the First-tier Tribunal’s decision because an appeal was the correct method of challenging the decision.

 

 

REASONS FOR DECISION

 

1. This is an appeal, brought with my permission by the father of the qualifying child, against a decision of the First-tier Tribunal dated 2 April 2012, whereby it allowed the mother’s appeal against decisions of the Secretary of State in respect of child support maintenance. 

 

2. The Appellant and the Second Respondent were married to each other but separated in 2002 and have since divorced.  The qualifying child is their son.  He was born in 1990 and therefore is now in his early 20s.  Moreover, in 2006, he ceased living with his mother and went to live with his father instead, with the consequence that this case is concerned, at most, only with the amount of arrears of child support maintenance due in respect of the period from 9 September 2002 to 18 December 2006.  Whether the First-tier Tribunal ought to have been determining in April 2012 the father’s liability to pay child support maintenance nearly ten years earlier is a matter I will consider below.

 

3. The prior question is whether I have any jurisdiction to hear this appeal at all or, to put it another way, whether the father has any right of appeal against the First-tier Tribunal’s decision.

 

 

Does being barred from taking further part in proceedings preclude an appeal?

 

4. The First-tier Tribunal issued case-management directions to the father in May 2010, October 2010 and December 2010, but he failed fully to comply with them.  On 27 June 2011, the First-tier Tribunal again directed him to provide a statement of case, a statement of facts and various documents and he was warned that, if he did not comply, the First-tier Tribunal would consider whether he should be barred from further participation in the proceedings and that it might also draw adverse inferences.  It was explained that drawing adverse inferences “means that where evidence is not provided to prove the facts of the case, the Tribunal can decide what the facts are, taking into account that there appears to be something hidden”.  Those directions were sent to the father, who was at the time represented by solicitors, on 5 July 2011.  He did not comply with the directions and, on 18 October 2011, the First-tier Tribunal barred him from further participation in the proceedings under rule 8(3)(a) and (7)(a) of the Tribunal Procedure, (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (SI 2008/2685, as amended) (“the 2008 Rules”).

 

5. So far as is relevant, rule 8 provides –

 

“8–(1) …

  (2) …

  (3) The Tribunal may strike out the whole or a part of the proceedings if—

(a) the appellant has failed to comply with a direction which stated that failure by the appellant to comply with the direction could lead to the striking out of the proceedings or part of them;

(b) …; or

(c) ….

  (4) ….

  (5) If the proceedings, or part of them, have been struck out under paragraph (1) or (3)(a), the appellant may apply for the proceedings, or part of them, to be reinstated.

  (6) An application under paragraph (5) must be made in writing and received by the Tribunal within 1 month after the date on which the Tribunal sent notification of the striking out to the appellant.

  (7) This rule applies to a respondent as it applies to an appellant except that—

(a) a reference to the striking out of the proceedings is to be read as a reference to the barring of the respondent from taking further part in the proceedings; and

(b) a reference to an application for the reinstatement of proceedings which have been struck out is to be read as a reference to an application for the lifting of the bar on the respondent from taking further part in the proceedings.

  (8) If a respondent has been barred from taking further part in proceedings under this rule and that bar has not been lifted, the Tribunal need not consider any response or other submission made by that respondent and may summarily determine any or all issues against that respondent.”

 

6. On 13 February 2012 the parties were informed that the hearing would take place on 2 April 2012.  The father said that he would not attend because he would be away.  However, in fact he appeared at the hearing, without the documents he had been directed to provide but wishing to give oral evidence.  The First-tier Tribunal refused to lift the bar on him from taking further part in the proceedings but he remained as an observer.

 

7. Following the hearing, the father, who no longer had legal representation, applied through his accountants for a statement of reasons and also asked that the letter be accepted “as an appeal”.  However, the judge directed that, because the father had been barred from taking further part in the proceedings, no statement would be issued.  When asked to confirm that the previous letter would be taken as an appeal, the judge directed that, due to the bar, the confirmation could not be given.  Notice to that effect was issued on 19 June 2012.  Clearly the judge took the view that a person barred from taking further part in proceedings had neither a right to a statement of reasons nor a right to appeal.

 

8. On 23 October 2012, the Upper Tribunal received from the father both an application for permission to appeal and an application for permission to apply for judicial review.  On 18 December 2012, I waived the requirement that an application for permission to appeal have been refused or not admitted by the First-tier Tribunal before such an application was made to the Upper Tribunal – although, upon reflection, it seems to me that the First-tier Tribunal judge must be taken not to have admitted what was clearly intended to be an application for permission to appeal – and I directed an oral hearing of the applications.  However, the hearing took some time to organise and was then fixed for 21 May 2012 and, in the light of written submissions, I decided on 25 March 2013 to grant permission to appeal and directed that the hearing already fixed should be the hearing of the substantive appeal and, if necessary, the application for judicial review, but without prejudice to the questions of jurisdiction and delay being raised in the appeal.

 

9. The Secretary of State supports the father in arguing that a person who has been barred from participating in proceedings nonetheless retains a right of appeal.  The mother, however, contends that there is no right of appeal in such circumstances.

 

10. The father submits that the words “the proceedings” in rule 8(7) refer to the proceedings before the First-tier Tribunal and he relies on Atos Origin IT Services Ltd v Haddock [2005] IRLR 20 in which the Employment Appeal Tribunal construed the same words in rule 3(3) of the Employment Tribunal Rules of Procedure set out in the Schedule to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (SI 2001/1171) as referring only to proceedings before the employment tribunal so that a respondent not entitled to take part in the proceedings as a result of failing to enter an appearance was not thereby deprived of its right of appeal.  I acknowledge that five of the eight grounds for taking that approach that the Employment Appeal Tribunal set out in paragraph 13 of its decision may not be applicable in the present case, but the other three can be applied with appropriate changes to the language and statutory references.

 

11. First, the natural construction of “the proceedings” in rule 8(7) of the 2008 Rules is to the proceedings in the First-tier Tribunal, since those are the proceedings with which the Rules are concerned.  Secondly, neither the Tribunals, Courts and Enforcement Act 2007 (“the 2007 Act”), section 11 of which provides for an appeal to the Upper Tribunal from a decision of the First-tier Tribunal, nor the procedural rules for either tribunal purports to restrict the right of appeal where a person has been barred by the First-tier Tribunal from participating in proceedings.  Thirdly, “[t]here must be some avenue by which a challenge to the decision of [the First-tier Tribunal] on the grounds that it has exceeded its jurisdiction or been guilty of bias can be made by a respondent who has [been barred]” and an appeal on a point of law is a more appropriate procedure than judicial review in the context of the 2007 Act.

 

12. The Secretary of State has referred me to London Borough of Hackney v Sivanandan [2013] EWCA Civ 22, but that is a less compelling authority both because there the claimant appears to have been “debarred from responding to the claim altogether” under rule 13(1)(b) of the Employment Tribunals Rules of Procedure set out in Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI 2004/1861), which is arguably a narrower bar, and because the Court of Appeal did not directly address the issue that arises in the present case.  Mummery LJ, with whom Rimer and Pitchford LJJ agreed, merely observed that “[a]s the Council was not debarred from appealing, it was apparently able to advance arguments on the appeal as to why the decision below was wrong in law”.

 

13. The mother, who is not represented, has understandably not referred me to any case law but she has referred to rule 38(7) of the 2008 Rules and submitted that the fact that the First-tier Tribunal did not admit the application for permission to appeal must show that the judge did not consider it to be in the interests of justice to do so.  I do not accept that submission because it seems to me that the application for permission to appeal was not admitted because the First-tier Tribunal considered that it did not have the power to admit it but, in any event, where an application for permission to appeal has not been admitted by the First-tier Tribunal, the applicant may make a fresh application to the Upper Tribunal which must exercise its own judgment as to whether it has jurisdiction and what the interests of justice require.

 

14. I respectfully agree with the approach to jurisdiction taken by the Employment Appeal Tribunal in Atos Origin IT Services Ltd v Haddock and I am quite satisfied that a person who has been barred by the First-tier Tribunal from taking further part in the proceedings is not thereby barred from appealing.  Moreover, since a major purpose of the duty to give reasons is to enable a party to see whether he or she has grounds for appealing and therefore to give practical effect to the right of appeal, it must follow that a person who is barred from taking further part in proceedings is not barred from applying for a statement of reasons for a decision.

15. On the other hand, it seems to me that, given the terms of rule 8(8), the fact that a person has been barred from taking further part in proceedings has a bearing on what need be included in a statement of reasons and therefore on what the consequence is of failing to provide one.  It may also have a bearing on how the Upper Tribunal should exercise the power under section 12(2)(a) of the 2007 Act to refuse to set aside a decision notwithstanding that it has found that the making of the decision by the First-tier Tribunal involved the making of an error on a point of law.  It is in this latter respect that the broad interests of justice may be relevant.

 

 

The procedural history of the case

 

16. I turn, therefore, to the merits of this appeal, which requires consideration of the procedural history of the case.

 

17. The mother first made an application for child support maintenance under the Child Support Act 1991 (“the 1991 Act”) in August 2002, shortly after she and the father had separated and at the same time as she claimed income support.  She was awarded income support from 9 August 2002 to 9 September 2002.  A maintenance enquiry form had by then been issued to the father on 6 September 2002 and it was returned by him on 16 September 2002, albeit uncompleted.  However, action on the application was “suspended” on 24 October 2002 when it appeared that the mother was no longer in receipt of income support and she had not responded to a CSA 112 enquiry form issued to her on 30 September 2002.

 

18. On 10 March 2003 (see doc 44), the mother telephoned the Child Support Agency and said she wished to “reclaim”.  She said that she had been told by her solicitor not to bother pursuing her first application for child support maintenance because her case was proceeding to court and the father had started to make payments.  However, he had only made three payments.  She was advised to complete a new maintenance application form and provide such information about the father’s income as she had obtained in matrimonial proceedings and was told that her “case can be re-opened”.  She duly submitted a new maintenance application form and, apparently on 28 April 2003, a maintenance enquiry form was issued to the father. 

 

19. On the following day, before he had had a chance to respond to that form if it really had been issued only the previous day, a decision was made to the effect that the father was liable to pay £84 p.w. child support maintenance with effect from 2 April 2003.  That decision was presumably made on the basis of the information supplied by the mother and it seems to have been made under the “new rules” – i.e., under the 1991 Act as amended by the Child Support, Pensions and Social Security Act 2000 (“the 2000 Act”) with effect from 3 March 2003 – and to have been based on the father’s taxable profit of £39.621 as shown in his tax return for the year ending 5 April 2002, or at least a figure of that order.   I do not have the details of the maintenance calculation before me but the father’s net weekly income, which would have been after the deduction of tax and national insurance liabilities, was shown as £562.28.  The issuing of a new maintenance enquiry form was presumably necessary in order to provide a date from which the decision on the mother’s second application could be effective, as well as being an opportunity for the father to provide more up-to-date information. 

 

20. Both parents did subsequently challenge the maintenance calculation.  The mother expressed some general unhappiness, mostly about the time taken to make an assessment, as early as 24 April 2003 (doc 147B) and the father had disagreed with the calculation by 16 June 2003 when he said he was awaiting more up-to-date accounts (doc 143B).  On 12 April 2004, it was recorded that the mother was currently challenging the assessment on the ground that it did not reflect the father’s lifestyle (doc 172B).  There is no evidence of any proper decision – i.e., a decision in writing that included information about rights of appeal (see regulation 15C(4) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 (SI 1999/991) (“the 1999 Regulations”) in new rules cases) – ever having been made on either the father’s challenge or the mother’s.  The father did not pay what was required and, on 24 November 2004, the Child Support Agency obtained a liability order in respect of £5,376.  Further calculations made for liability orders, apparently in March 2005, suggest that the father’s liability was £84 p.w. until 7 September 2004 but only £39 p.w. from 8 September 2004 and one of them suggests it had been further reduced to only £15 p.w. from 20 October 2004 (docs 154B and 155B) but, again, although those calculations are recorded on a “Record of Decisions”, there is no evidence of any proper supersession decision having been issued to the parents.  The mother complained about the delays in July 2005 (doc 228).

 

21. There is a record (doc 339B) that the mother asked on 13 March 2006 for a “review” and that the father was then asked to provide up-to-date accounts.  On 24 May 2006, it is recorded that the maintenance calculation was superseded with effect from 8 March 2006, and it was decided that the father was liable to pay £39 p.w.  However, it is quite possible that a decision to that effect was never issued; it was certainly overtaken by events.

 

22. On 6 June 2006, the Child Support Agency wrote to the father (and I expect also to the mother) as follows –

 

“Following a review of [the mother’s] application for child maintenance, errors have been identified.  The case was initially assessed effective from 2/4/03 (sic) using legislation that was introduced 3/3/03, commonly referred to as new rules.  This was incorrect, as a maintenance enquiry form had been sent to you prior to this date on 6/9/02.

 

The issue of a maintenance enquiry form sets the effective date of a case.  This means that the initial assessment should have been effective from 6/9/02 and assessed under the legislation at that date, commonly referred to as old rules.

 

All assessments have now been cancelled and new assessments will have to be calculated using old rules. …”

 

23. Consequently, on 13 July 2006, it was decided that the father was liable to pay child support maintenance at the rate of £63.87 p.w. from 9 September 2002, £5.50 p.w. from 7 April 2003, £62.58 p.w. from 12 April 2004 and £78.47 from 26 April 2004.  These assessments were based on the father having gross earnings (i.e., before deduction of tax and national insurance payments) of £17,215 p.a. from 9 September 2002, £8,314 p.a. from 7 April 2003 and £17,261 p.a. from 12 April 2004.  Despite this being an “old rules” case – i.e., one being decided under the 1991 Act before its amendment by the 2000 Act – those were the figures shown as his profits for tax purposes in the accounting years ending 31 March 2003, 31 March 2004 and 31 March 2005, respectively, as declared in his tax returns for the years ending 5 April 2003, 5 April 2004 and 5 April 2005 respectively.

 

24. That decision has been described as a revision of the decision of 29 April 2003.  However, the letter of 6 June 2006 referred, correctly from a procedural point of view, to two decisions although only one may have been notified in the proper form.  The first, which I will take as having been made on 6 June 2006 although it may actually not have been made until 11 August 2006 (see doc 339B), was a decision revising the decision of 29 April 2003 and cancelling the maintenance calculations.  The second, made on 13 July 2006, was not a revision decision at all but simply an initial maintenance assessment made on the earlier claim for child support maintenance, which is why different assessments could be made in respect of different periods before that date (see paragraph 15 of Schedule 1 to the 1991 Act), so as to take into account changes of circumstances during 2004.  All the procedural rules – those in primary legislation as well as secondary legislation – for new rules cases are different from those for old rules cases and it simply is not permissible to have a single decision revising a new rules decision and substituting an old rules decision.  It is necessary first to cancel the new rules decision on jurisdictional grounds under new rules procedures and then make a fresh old rules decision under the old rules procedure.

 

25. The mother promptly objected to the decision of 13 July 2006 – principally because £5.50 p.w. was so much lower than £84 p.w. and she did not accept that the father’s income had decreased – but, despite frequent telephone calls from the mother, the Secretary of State failed to issue any decision in respect of that objection (which was clearly capable of amounting to an application for revision “on any ground” or on the ground of official error) until after the Independent Case Examiner had criticised in January 2008 the Child Support Agency’s failure to enforce outstanding arrears and respond to the telephone calls.  Even then, it is unclear what exactly was formally decided.

 

26. Records suggest that, on 18 January 2008, it was decided within the Child Support Agency that the case should have been a “new rules” case after all but that the maintenance calculation should have been £5.50 p.w. from 28 April 2003, £62.58 p.w. from 12. April 2004 and £78.47 from 26 April 2004.  The calculation was obviously questionable because it retained the actual figures reached by applying an “old rules” assessment.  It seems probable that no decision in terms of either an assessment or a calculation was ever issued at that time, but a Child Maintenance Account Statement was issued on that date that was consistent with the record as to what had been decided.  It also showed that liability continued until 14 January 2007 and then stopped. Another Child Maintenance Account Statement was issued on 27 February 2008 showing that the father’s liability for child support maintenance ended on 2 October 2006 and yet another one was issued on 22 April 2008 showing that liability continued until 18 December 2006.  These latter statements each followed an objection to the previous statement by one parent or the other, there being a dispute as to the date from which the qualifying child, who was at a boarding school, should be taken to have gone to live with his father rather than his mother.  The last statement seems to have been based on a decision taken on 11 March 2008 (doc 284 and 286), but there is no evidence of a separate notification of that decision.

 

27. During that period, it appears that only one decision was formally issued as such and informed the parents of their rights of appeal, as was required in an old rules case by regulation 10(1) of the Child Support (Maintenance Assessment Procedure) Regulations 1992 (SI 1992/1813, as amended) (“the 1992 Regulations”) which, despite the heading to regulation 10, appears to apply not only to initial assessments but also to decisions in respect of revision or supersession.  That was a decision on 17 April 2008 refusing to revise an unidentified decision.  It was inconsistent with all three Child Maintenance Account Statements, unless it was a refusal to revise the decision last revised on 27 February 2008 that was later revised on 22 April 2008 (which is not suggested by anyone).  The Secretary of State says that it was a refusal to revise the decision of 13 July 2006.

 

28. In any event, both parents appealed, the mother’s appeal being brought on 9 May 2008 and the father’s on 21 May 2008.  Section 20 of the 1991 Act has always, in effect, provided a right of appeal against initial maintenance assessments (under the old rules) or initial maintenance calculations (under the new rules) and against supersessions of such decisions, but not against revisions of such decisions.  At the material time, the time limit for appeals was one month from the date of the decision by virtue of regulation 31(1) of the 1999 Regulations.  If the decision had been revised or, in some circumstances, if an application for revision had been refused, the time for appealing against the decision that had, or had not, been revised was extended until one month after the revision or refusal to revise (see regulation 31(2)).  Under regulation 32, the time limit could be extended by up to a year but no further.  An initial maintenance assessment or maintenance calculation or a supersession decision could be revised on any ground, provided the application was made within a month, although that time limit too could be extended by up to a year (regulations 17(1)(a) and 18 of the 1992 Regulations (for old rules cases) or regulations 3A(1)(a) and 4 of the 1999 Regulations (for new rules cases)).  However, this time limit was not automatically extended if an assessment was revised.  An initial maintenance assessment or maintenance calculation or a supersession decision could also be revised at any time on the ground of official error or where a decision unfavourable to one parent had been made on the basis of a misrepresentation or failure to disclose by the other (regulation 17(1)(c) or (d) of the 1992 Regulations or regulation 3A(1)(c) or (e) of the 1999 Regulations).

 

29. The mother’s grounds of appeal were, in effect, first that the effective date of the initial assessment should have been 9 September 2002 and secondly that the amount taken into account as the father’s income was too low, because it was inconsistent with the amount already taken into account by the court making the liability order and in the previous maintenance calculation and because it was inconsistent with the true amount of the father’s earnings in particular having regard to undisclosed income in the tax year ending 5 April 2007.  The father challenged the decision that his liability should continue until 18 December 2006 and also challenged the amount of the maintenance assessments or calculations.

 

30. The question arose as to whether the appeals were in time, which required the decisions against which the appeals were being brought to be identified, together with any revision or refusal to revise.  This in turn required an analysis of the adjudication history which had, as will by now be apparent, been only partially recorded.  The First-tier Tribunal did not at that stage even have all those details that had been recorded.

 

31. The Child Maintenance and Enforcement Commission, to which many of the functions of the Secretary of State under the 1991 Act were transferred from 1 November 2008 until 31 July 2012, seems initially to have regarded both appeals as being out of time but, when asked for a submission by the First-tier Tribunal, it resiled from that position. It adopted what might be described as a “formalist” analysis that took account only of decisions that had been properly issued as such.  It argued that the main decision under appeal was the decision of 13 July 2006 and that the only subsequent decision had been the refusal to revise that decision on 17 April 2008, which, because it arose belatedly out of an application by the mother for a revision “on any ground” made within a month of 13 July 2006, had the effect of extending the time for appealing against the earlier decision so that the mother’s appeal was in time, although the father’s was a few days late insofar as he was appealing against the amount of the maintenance assessments.  On the other hand, it was submitted that there had been a decision on 27 February 2008 to “close” the case and that that had been revised on 22 April 2008, so that the father’s appeal in respect of the date of termination of the assessment was in time. 

 

32. However, following an oral hearing on 27 November 2009, the First-tier Tribunal took what might be described as a “realist” approach on the basis that there must have been decisions underlying the Child Maintenance Account Statements, including a decision on or before 18 January 2008 that revised the decision of 13 July 2006, even if such decisions were not properly communicated to the parents.  Because it was satisfied that those decisions were not issued in the correct form, which would have included notifying the parents of their rights of appeal, it decided that the extended time for appealing against the decision of 13 July 2006 as a consequence of those revisions had not started to run and therefore both the appeals were in time.  It accepted that the father’s appeal in respect of the closure of the maintenance assessment or calculation was in any event within time simply because it was brought within a month of 22 April 2008.  (A fuller analysis might have recorded that the decision of 18 January 2008 was not only a revision of the decision of 13 July 2006 but also a supersession on the ground of change of circumstances – the qualifying child leaving his mother’s home – which supersession was revised on 27 February 2008 and further revised on 22 April 2008, but nothing turns on this.)

 

33. Between them, the appeals raised the following issues –

 

• The earliest effective date and whether child support maintenance should be calculated under the new rules or the old rules.
• The father’s income and, if this was an “old rules” case, his housing costs.
• If this was an “old rules” case, the mother’s income.
• The closure date.

 

Having identified those as the live issues, the First-tier Tribunal adjourned the appeals with directions to the Commission to provide further information.  The Commission was able to comply with those directions only to a limited extent due to the poor record keeping of the Child Support Agency.

 

34. On 11 May 2010, the First-tier Tribunal gave further case-management directions in which it identified the decisions under appeal more precisely as the decision dated 29 April 2003, as revised on 13 July 2009 and further revised on 17 April 2008 (sic – presumably it meant 18 January 2008), and the decision in respect of closure dated 27 February 2008, as revised on 22 April 2008.  Each parent was directed to provide a statement of case, a statement of facts and any evidence relied upon and the father was directed to provide certain specified evidence.  In her statement of case, the mother referred to property transactions by the father and his general lifestyle.  The father complied with the directions to the extent of providing business accounts.  The mother, in reply, drew attention to substantial movement of sums of money and, in particular, drew attention to the father’s net profit of £39,191 in his accounting year ending 31 March 2002 being followed by drawings in each of the five succeeding years of £25,899, £57,424, £107,668, £132.123 and £294.124 respectively.  She submitted that his profits had been artificially reduced from April 2002.  His accounts showed a net profit of £15,877 in the year ending 31 March 2003 and £8,485, £15,535, £17,073 and £24,800 in the following years.

 

35. By a solicitor’s letter dated 14 June 2011, the father withdrew his appeal, having reached an agreement with the Child Support Agency for the payment of arrears.  However, as the First-tier Tribunal pointed out when issuing its direction of 27 June 2011, that left the mother’s appeal to be determined.  As I have recorded, the father was subsequently barred from participating in that appeal.

 

36. The appeal was heard on 2 April 2012 by a panel of the First-tier Tribunal composed of the judge who had issued all the earlier case management directions and a financially qualified member.  It decided that the father’s liability for child support maintenance should be assessed on the basis that, from 9 September 2002, he had housing costs at £80.77 p.w. to be taken into account as exempt income and that his gross income, subject to deductions for the tax and national insurance properly payable was £62,822 p.a. and that, from 12 November 2004 onwards, he had no eligible housing costs and his gross income, subject to deductions for tax and national insurance properly payable, was £66,000 p.a.. 

 

37. Although no full statement of reasons was issued, the First-tier Tribunal recorded summary reasons in the decision notice, as follows –

 

“The Tribunal did not accept that [the father’s] accounts were properly drawn.  The income identified reflects the failure to report income properly, the figure being supported by the excess drawings made repeatedly without the expected consequences and the level of eventual borrowing for mortgages in 2005 and 2006.  The figure identified is consistent with the pattern of trade in his business and the lifestyle established, bearing in mind that while tax and national insurance are deductible as ‘payable’, those liabilities were not met, leaving larger sums in [the father’s] hands.

 

Housing costs are allowed in respect of the original flat over the shop, but both were sold 24.05.04.  The first reported change in the papers after this date is 12.11.04 and so the housing costs are removed from that date.

 

[The father] has not shown a basis for entitlement for housing costs to be included in his exempt and protected income thereafter so no further housing costs are allowed.

 

Throughout he had no dependent children living with him.

 

The increase in income from 12.11.04 reflects his ability to borrow for the purchase of the Clifton flat in December 2006.  That reflects the level of income he must have self-certified for that mortgage.”

 

 

Old rules or new rules?

 

38. The first ground of appeal advanced by Mr Atkinson at the hearing before me was that the First-tier Tribunal had erred in law in giving no reasons for deciding that this was an “old rules” case with an effective date of 9 September 2002.  It is true that the question whether this was an old rules case or a new rules case had been identified by the First-tier Tribunal in November 2009 as one of the issues in the appeals, that the case was clearly determined under the old rules and that no reasons were recorded for doing so.  However, it is apparent from the record of proceedings that this issue was not discussed at the hearing of the substantive appeal before the First-tier Tribunal and I infer that it simply did not address the issue at all.  The questions for me are therefore, not whether adequate reasons have been provided, but whether the First-tier Tribunal was entitled to proceed without considering whether this might be a new rules case and, ultimately, whether the First-tier Tribunal was right to decide the case under the old rules.

 

39. Mr Atkinson submitted that the First-tier Tribunal was bound to address all issues arising in the appeal and he suggested that the judge had probably forgotten that she had identified as an issue two and a half years earlier the question whether the old rules or the new rules applied.  It seems to me to be more likely that, rather than the judge having forgotten about the issue, the First-tier Tribunal took the view that the issue had ceased to be a live one when the father had withdrawn his appeal and for that reason it did not need to consider it.  However, if that was its approach, it forgot that, on the realist analysis that it had earlier adopted, there had been a revision in January 2008 so that it was the mother’s appeal, rather than the father’s, which raised the initial effective date as an issue, since he was content with the status quo under that revision.  Moreover, the Commission’s initial submission on the father’s appeal had been equivocal and had invited the First-tier Tribunal to decide whether or not this was a case that fell to be determined under the old rules or the new rules.  It had subsequently concluded that the case was an old rules case but only because, on its formalist analysis, the last effective decision was that of 13 July 2006, which had been to that effect.  In her statement of case, even the mother was equivocal on the question whether this was an old rules case or a new rules case.  Her principal concern was the calculation of the father’s income.

 

40. In my judgment, a tribunal may take either a formalist approach or a realist approach to the procedural history of a case and it is necessary to choose between them only if they produce different final outcomes, which usually they do not.  Here, the realist approach taken by the First-tier Tribunal had the virtue of reflecting the approach of the parents, who had understandably treated the Child Maintenance Account Summaries – which would, as the First-tier Tribunal observed, have been totally unlawful on the formalist approach – as being notices of maintenance calculations, which is why the mother’s first ground of appeal had been in respect of the initial effective date.  Having adopted that approach, the First-tier Tribunal was not entitled to take a wholly different approach without explanation. 

 

41. I therefore accept the submission on behalf of the father that the First-tier Tribunal ought to have considered whether this was properly an old rules case or a new rules case.  However, its failure to do so and its failure to give reasons are immaterial if the First-tier Tribunal was correct to decide the case on the basis that it was an old rules case. 

 

42. It is, I think, understood by all parties that this case is an old rules case only if the effective date of the initial maintenance assessment under an application for child support maintenance was before 3 March 2003 (see article 3(1)(a) of the Child Support, Pensions and Social Security Act 2000 (Commencement No.12) Order 2003 (SI 2003/192)).  Since the mother made two applications, the first resulting in a maintenance enquiry form being issued on 6 September 2002 and the second being received on 27 March 2003 (following initial telephone contact on 10 March 2003) and resulting in a maintenance enquiry form being issued on 28 April 2003, the question in this case is which application should be regarded as having been effective.

 

43. At the time that the mother made her earlier application for child support maintenance, she had made a claim for income support and her application for child support maintenance was therefore made under section 6 of the 1991 Act, which provided so far as is relevant –

 

“6.–(1) Where income support, an income-based jobseeker’s allowance or any other benefit of a prescribed kind is claimed by or in respect of, or paid to or in respect of, the parent of a qualifying child she shall, if—

(a)  she is a person with care of the child; and

(b)  she is required to do so by the Secretary of State,

authorise the Secretary of State to take action under this Act to recover child support maintenance from the absent parent.

…

  (5) That authorisation shall be given, without unreasonable delay, by completing and returning to the Secretary of State an application—

(a)  for the making of a maintenance assessment with respect to the qualifying child or qualifying children; and

(b)  for the Secretary of State to take action under this Act to recover, on her behalf, the amount of child support maintenance so assessed.

…

  (11) A person with care who has authorised the Secretary of State under subsection (1) but who subsequently ceases to fall within that subsection may request the Secretary of State to cease acting under this section.

  (12) It shall be the duty of the Secretary of State to comply with any request made under subsection (11) (but subject to any regulations made under subsection 13)).

 

Section 11(1) to (1C) provided –

 

 “11.–(1) Any application for a maintenance assessment made to the Secretary of State shall be dealt with by him in accordance with the provision made by or under this Act.

  (1A) Where—

(a)  an application for a maintenance assessment is made under section 6, but

(b)  the Secretary of State becomes aware, before determining the application, that the claim mentioned in subsection (1) of that section has been disallowed or withdrawn,

he shall, subject to subsection (1B), treat the application as if it had not been made.

  (1B) If it appears to the Secretary of State that subsection (10) of section 4 would not have prevented the parent with care concerned from making an application for a maintenance assessment under that section he shall—

(a)  notify her of the effect of this subsection, and

(b)  if, before the end of the period of 28 days beginning with the day on which notice was sent to her, she asks him to do so, treat the application as having been made not under section 6 but under section 4.

  (1C) Where the application is not preserved under subsection (1B) (and so is treated as not having been made) the Secretary of State shall notify—

(a)  the parent with care concerned; and

(b)  the absent parent (or alleged absent parent), where it appears to him that that person is aware of the application.”

 

44. I have set out subsections (1A) to (1C) of section 11 because the father has relied on them on this appeal and the Commission referred to them in its initial response to the father’s appeal to the First-tier Tribunal.  However, those subsections do not apply in this case because the mother’s claim for income support was neither disallowed nor withdrawn and so subsection (1A)(b) was not satisfied.  The claim was allowed, albeit for a limited period.  Therefore, unless the mother positively asked the Secretary of State to stop acting so that section 6(12) applied, the Secretary of State was required by section 11(1) to make a maintenance assessment following her application under section 6(5).  (The position would have been different under the new rules version of section 11 – see subsection (3) to which Mr Atkinson referred me at the hearing – but that is not the relevant version in this case.)

 

45. The evidence was that, although the mother had at one stage decided not to pursue her first application for child support maintenance, she had not informed the Child Support Agency of that fact and so had not asked them to cease action.  She had changed her mind by 10 March 2003 and so did not ask them to do so then.  Therefore, this was indeed an old rules case.  I suspect that was well understood when she was asked to complete a new maintenance application form as the simplest way of obtaining up-to-date information about her circumstances.  Unfortunately, it appears that the decision-maker dealing with the form when it was submitted did not appreciate the background.  In any event, there was no material error of law in the First-tier Tribunal proceeding on the basis that this was an old rules case.

 

The maintenance calculation – the father’s income

 

46. The father submits that The First-tier Tribunal has erred in law in failing to give any reason at all for its finding that his income was £62,822 p.a. from 9 September 2002 and that its reasons for finding that his income was £66,000 p.a. from 12 November 2004 are insufficiently detailed to exclude the possibility that it impermissibly presumed that his income then must have been the same as it was when he purchased his flat two years later. Mr Atkinson did accept that the conclusions reached could properly have been reached on the evidence before the First-tier Tribunal but he submitted that, quite apart from any inadequacy in the reasoning, the figures seemed high when the mother’s original complaint in July 2006 had simply been about the retrospective reduction in the amount payable to her and she had not then been seeking anything substantially more than a restoration of the original maintenance calculation based on an income of some £39,000 p.a.. 

 

47. The Secretary of State has suggested that the figure of £62,822 was based on the father’s drawings as shown in his company’s accounts for the year ending 31 March 2002, with £10,000 added to it.   

 

48. The Secretary of State may be correct as to the figures used to reach the sum of £62,822, but there is still no explanation as to why those figures were considered appropriate.  Because I am unable to see any answer to the question, I am satisfied that a reason should have been supplied when requested.

 

49. However, I am not satisfied that the date from which the figure of £66,000 was considered appropriate is inadequately explained.  The figure is not very different from the figure of £62,822.  The First-tier Tribunal clearly took the view that the father’s income had not varied much over the three and a half years in issue and that the lower figure was appropriate at the beginning of the period and the higher figure was appropriate at the end of the period in view of the mortgage obtained then.  In the absence of what it would have considered to be reliable evidence as to his income, the date from which the higher figure should have been regarded as appropriate was bound to be arbitrary to a certain extent and it was entitled to take the view that it should be the same as the date on which he ceased to be entitled to include housing costs in the calculation of his exempt income, which reduced the number of assessments that had to be made.

 

50. Moreover, although I accept that the figure of £62,822 is not fully explained and neither is the First-tier Tribunal’s comment that the father’s accounts were not “properly drawn” – which does not necessarily imply criticism of the accountant who no doubt relied to some extent on information provided by the father – I do not accept that the father has thereby suffered any injustice in the circumstances of this particular case.  Because he had failed to provide documentary evidence sufficient to prove that the funds he had available were derived otherwise than from an undisclosed source of income, the First-tier Tribunal was entitled to draw adverse inferences and clearly did so.  Moreover, because the father was barred from taking further part in the proceedings, the First-tier Tribunal was entitled under rule 8(8) of the 2008 Rules to determine the issue against the father summarily.  It is not disputed that the First-tier Tribunal was entitled to find that the father’s income exceeded £60,000 p.a. and it seems to me to be inconceivable that the provision of more detailed reasons would have disclosed any material error of law in this case.

 

51. I accept that the mother’s case had been put conservatively on the basis that the father’s income had not reduced from £39,000 and that she was recorded as saying on 21 January 2008 that she was only disputing the assessment of £5.50 p.w. (doc 278), but she had been complaining about the assessment of his income since at least April 2004 and she had not been required to suggest a particular figure because she obviously was not in a position to know exactly what the father’s financial position was.  The First-tier Tribunal, having rejected the father’s case that his income was no more than the profits shown in his accounts, was certainly not bound to assume that it had remained at the level shown in the accounts for the year ending 31 March 2002, even though the mother might have been content to accept such a figure.

 

 

The maintenance calculation – the mother’s income

 

52. The father argued that the First-tier tribunal erred in failing to take account of the mother’s income if this was an old rules case.  It was not in dispute that she did have an income but the issue had been identified as a alive one only because the father had challenged the amount of the mother’s income.  That challenge fell when the father withdrew his appeal.  The First-tier Tribunal was therefore not obliged to consider the amount of the mother’s income.

 

53. The assessment made after the First-tier Tribunal’s decision should nonetheless have taken the income into account if it was sufficient to make any difference to the assessment.  If it did not do so, the assessment should be revised.

 

 

The maintenance calculation – the father’s housing costs

 

54. Since the father had withdrawn his appeal, there was no issue between the parties as to the amount of his housing costs and the First-tier Tribunal merely adopted the figure used by the Secretary of State.  The Secretary of State, however, submits that the First-tier Tribunal erred in including the father’s housing costs in the assessment until 12 November 2004, when had he moved out of the relevant flat in May 2004.  I accept that submission.  The First-tier Tribunal’s error arose from its understanding that the assessment of 13 July 2006 was a revision of the decision of 29 April 2003, whereas it was really an initial old rules assessment made at the same time as a separate new rules revision of the earlier decision.  Consequently, as the Secretary of State submits, the change of circumstances should have been taken into account under paragraph 15 of Schedule 1 to the 1991 Act from the first day of the effective week in which the change of circumstances occurred, rather from the first day of the week in which the change was reported.  However, this was an error in favour of the father.

 

 

Termination of the maintenance calculation

 

55. The father submits that the First-tier Tribunal erred in law in not addressing, and giving a decision in respect of, the dispute between the parents as to the date from which the father’s liability for child support maintenance ended.  The mother argues that the First-tier Tribunal did not need to consider that issue because the father had withdrawn his appeal and the issue was not raised by her appeal.  The Secretary of State goes further and, referring to section 20(7)(b) of the 1991 Act, submits that, because the mother’s appeal was against the decision made in July 2006, the First-tier Tribunal was not entitled to take into account the departure of the qualifying child from the mother’s home which was, at the earliest, in September 2006.

 

56. I do not entirely accept the Secretary of State’s submission.  The mother’s appeal was brought after the Secretary of State had made, or can be taken to have made, a twice-revised supersession decision arising out of information it had received about the qualifying child’s change of residence.  It seems to me that the First-tier Tribunal could have treated the mother’s appeal as encompassing the question of the date from which the maintenance assessment should be terminated had it thought it necessary to do so. 

 

57. However, I am satisfied that it was not obliged to consider the date on which the maintenance assessment came to an end because it was only the father who had challenged the decision as in force at the time the appeals were lodged and so it was necessary to treat only him as having appealed against that decision.  I accept the mother’s submission that the date of termination of the maintenance assessment ceased to be a live issue when he withdrew his appeal.

 

 

Conclusion

 

58. I accept that the First-tier Tribunal erred in law in not providing a fuller statement of reasons for its decision and in its decision as to the date from which it decided that the father’s housing costs were no longer to be taken into account in the calculation of his exempt income.  However, I am not persuaded that he has suffered any significant injustice as a result and I therefore refuse to set aside the First-tier Tribunal’s decision.  Much fuller reasoning would have been impossible in view of the father’s own failure to comply with directions to produce documents and it seems most unlikely that the First-tier Tribunal erred in law in its approach to the case.  The error in respect of housing costs was to the father’s advantage.  Section 12(2)(a) of the 2007 Act expressly provides that, where the Upper Tribunal finds that the First-tier Tribunal has erred in law, it “may (but need not) set aside the decision of the First-tier Tribunal”.

 

59. I should record that, although there was some delay in applying to the Upper Tribunal for permission to appeal, I have not regarded that as being of great significance.  Had I thought that the father had suffered a significant injustice, I would have set aside the First-tier Tribunal’s decision.

 

 

Postscript

 

60. There are two matters arising out of this case to which I feel that I should draw attention.

 

61. The first is what appears to be a lack of any recorded connection between calculations made for the purpose of obtaining liability orders and any properly issued decisions in respect of maintenance assessments or maintenance calculations is a matter of concern.  Courts making liability orders assume that the person against whom the order is to be made has had the opportunity of appealing to an independent tribunal against the assessments or calculations on which the application for the order is based.  The history of this case raises the question whether that is always so and whether the Secretary of State would always be able to produce copies of the decisions on which an application is based if asked to do so.

 

62. My second observation is that, at least in this case, parents’ challenges to assessments have not led to proper decisions.  I accept that the Secretary of State is entitled to check whether a challenge made in general terms is intended to be an application for revision or supersession and is entitled to ask for evidence to be produced in support of a challenge.  However, it is then important that, if he is not satisfied that the challenge should succeed, the Secretary of State should issue a decision in terms of a refusal to revise or a refusal to supersede containing the necessary information about appeals.  Otherwise there is a risk that either a party will be deprived of a right of appeal altogether or else an appeal will be delayed and the other party may be faced much later with an appeal concerned with a long period in the past in respect of which he or she might have thought matters settled.  It is as important that proper decisions should be made (and recorded) in respect of unsuccessful applications as it is that they should be made in respect of successful applications.

 

 

 

 

Mark Rowland

30 July 2013