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IN THE UPPER TRIBUNAL Appeal No. CCS/2999/2008

ADMINISTRATIVE APPEALS CHAMBER

1. This is an appeal by the parent with care (Mr R), brought with the permission of the chairman, against a decision of an appeal tribunal sitting at Brighton on 6 December 2007. For the reasons set out below the Tribunal's decision was in my judgment wrong in law. I set aside the Tribunal's decision and remit the matter for reconsideration by a differently constituted appeal tribunal in accordance with the directions in paragraph 30 below. I draw the attention of the parties and the new tribunal to, in particular, paras. 28 onwards below.
2. Mr R and the non-resident parent (Ms T) separated in November 2003. They have two sons, now aged 13 and 12, who live with Mr R.
3. The Tribunal's decision was to dismiss Mr R's appeal against a decision, made on 20 November 2006, refusing Mr R's application for a variation. The variation application had had been made on the ground that Ms T's lifestyle was claimed to be inconsistent with her declared income. The Tribunal took the view that it did not have jurisdiction to consider the correctness of the maintenance calculation, or the question whether a variation should be made, in respect of any period before, at the earliest, 8 August 2006. In the grounds of appeal to the Tribunal, and in this appeal, Mr R has contended that he ought to have been paid child support maintenance in respect of a period going back to 2004.
4. It was stated in the Secretary of State's submission to the Tribunal that it had not been possible for the submission writer to locate all the documents relating to the case, despite extensive efforts to locate them, and that the submission had been prepared using evidence held on the child support computer system. This absence of documentation has created considerable difficulty.
5. In para. 4 of his submission in this appeal (p.99), the Secretary of State's representative sets out the sequence of decisions revealed by the computer. Combining that with the chronology set out in the Secretary of State's written submission, and adding information from the documents in evidence before the Tribunal, as elaborated on in oral evidence to the Tribunal and in explanations given to me at the hearing, produces the following basic chronology.

(1) Prior to the separation Mr R and Ms T were living together in a house owned by Ms T in Peacehaven, on which she had a number of mortgages. The separation occurred in November 2003 when Ms T when to live in a flat in Kingston which her new partner, Mr G.R., was renting. As I understood what was said to me at the hearing, the children initially lived with Ms T, but later returned to live with Mr R, who had remained in the Peacehaven house.

(2) In about February 2004 Ms T was unfairly dismissed from her job.

(3) On 8 April 2004 an initial maintenance calculation of £84.88 per week was made, taking effect from 2 March 2004.

(4) Ms T says that in early November 2004 she gave Mr R written notice to leave the house, and then confirmed this in writing. Mr R says that he and the children were evicted from the house by Ms T in early 2006.

(5) In a letter to the Brighton County Court apparently written in about February 2005 Ms T said that in July 2004 she had formed a company with her new partner and "began to seek freelance work" (p.27) She asserts that she was paid a salary of £6,000 per annum. "With the help of my partner I managed to make ends meet and cover the mortgage."

(6) On 28 April 2005 the initial maintenance calculation was superseded and altered to nil, with effect from 20 April 2004. It appears likely that the reasons for that decision were (a) that initially the children were not living with Mr R and/or (b) that Ms T had no earnings.

(7) Ms T applied for JSA with effect from 20 January 2006. After an appeal to an appeal tribunal, in August 2006 income based JSA was awarded with effect from 18 August 2006 (pp. 54; 57). Ms T says that she had to appeal again in respect of a claim for a backdated payment in respect of the period from 21 January 2006 to 18 August 2006. (see p.84, reason 5). However, Ms T told me that no award for the backdated period had ever been made.

(8) On 9 August 2006 a decision was made to the effect that the child support maintenance liability remained at nil, with effect from 8 August 2006.

(9) On 13 October 2005, at a hearing of matrimonial proceedings in the Brighton County Court, an order was made requiring Ms T to disclose her P60 and last 3 wage slips.

(10) On 16 October 2006 Mr R applied for a variation on the ground of lifestyle inconsistent with declared income. No copy of that application is in the papers, presumably owing to the mislaying of the documents referred to above. Mr G.R. stated to me at the hearing that he had a copy of the application.

(11) There was a note on the CSA computer (pp 12-13), probably dated 2 November 2006, stating:

"Preliminary consideration.

Applicant states the non-applicant's lifestyle is significantly inconsistent with her declared income because she has worked as a freelance web designer for most of 2005 and as being employed she was able to go on long foreign holidays. Paid £2,000 cash for a car and £1500 for car repairs along with due to receive monies from a car accident i.e. compensation payment.

CS Variations Regulations 2000

Reasonableness

I consider it reasonable to send this to contest pending response."

The Secretary of State's submission to the Tribunal said that "the decision maker decided that [Mr R's] application for a variation passed preliminary consideration" and that Ms T's representations were then invited. No copy of any such representations was before the Tribunal.

(12) On 20 November 2006 a decision was made refusing the application for a variation, the reason given in the letter of that date to Mr R (p.10) being that the application failed "as a result of grounds failure."

(13) Ms T's JSA award ceased with effect from 1 December 2006, when she obtained salaried employment. (p.84)

(14) Mr R's appeal form was signed on 7 December 2006. It attached a copy of an e-mail from Ms T to him which spoke about the possibility of the sons going to private school, at a possible cost of £10,000 per annum each.

(15) On 20 February 2007 the existing maintenance calculation of nil was superseded and a new assessment of £91.71 per week with effect from 21 November 2006 was made. On 21 February 2007 that amount was altered, by a further supersession, to £61.16 per week with effect from 6 February 2007 (99).

(16) In a letter dated 16 March 2007, relating to ability to pay potential school fees, Ms T said that she and her new partner had "over £120,000 equity in the house and £50,000 in the flat, and that the sale of the flat was imminent."

(17) By letter dated 23 March 2007 from the CSA (p.15) Mr R was notified that the decision of 20 November 2006 had been reconsidered but not altered. "The reason for this decision is that because [Ms T] was in receipt of a prescribed benefit at the time of the application and because [Ms T] has shared care of your children the liability was nil. Under Regulation 7(2)(b) of the Child Support (Variations) Regulations 2000 an application for a variation made by a parent with care will be refused if at the time of the application the non-resident parent is liable to pay less than the flat rate."

(18) In a letter to the Tribunal received on 4 May 2007 (p.25) Mr R stated that at a hearing in the Brighton County Court in (I think) February 2005 Ms T told the Court she was working "and they needed proof of her earnings which turned out to be £28,000 a year. I had told the CSA about this and the address of her work place, but it seems they have lost this information." Mr R further contended that from 2004 down to the date of the letter (May 2007) "my ex partner has worked more or less continuously." The letter stated that she had also received two lump sum payments one for £10,000 for unfair dismissal from her job in 2004, and one for £10,000 from an insurance payout. Mr R complained that he had had numerous changes of case worker, resulting in a loss of some of the documents. See also Mr R's letter dated 9 August 2007 at p.36H of the papers.

(19) An initial hearing of the Tribunal on 20 August 2007 was adjourned for further evidence to be provided.

(20) The Tribunal hearing was on 6 December 2007, at which both Mr R and Ms T appeared and gave evidence at length. The Tribunal dismissed the appeal.

6. The Tribunal decided that the only period with which it was concerned was that from 8 August 2006 to 22 November 2006. It found that during that period Ms T was in receipt of income based JSA. It held that Regulation 7(c) of the Child Support (Variations) Regulations 2000 provided in those circumstances that an application for a variation should fail. The Secretary of State's representative apparently submitted at the hearing that an adjournment might be necessary to obtain further evidence directed to the question whether the Tribunal should "look behind" the award of JSA – i.e. in order to consider whether the award had been wrong because Ms T and/or her partner had income and/or capital which exceeded the relevant limits. The Tribunal referred to two Social Security Commissioners' decisions and said that no adjournment was required because Ms T's entitlement to JSA had been considered by an appeal tribunal. It considered that CH/4014/2007 supported that view. The Tribunal further said (as I interpret para. 10 of the "Reasons") that a variation on the ground of assets could in any event not have succeeded because Ms T's net assets were less than £65,000. It said that any monies received as a result of personal injury would not be taken into account. It recorded (para 14 of the Reasons) that Mr R stated that he had not been aware of the limited scope of the hearing, as regards the time period covered, and that his stronger concern was in relation to decisions made for the period 2004 to 2006.
7. In a letter dated 11 February 2008 (p.82), before he had seen the Statement of Reasons, Mr R said that he wanted to appeal owing to the fact that at the Tribunal hearing it became apparent that Ms. T was claiming JSA "either by mistake or fraudulently". He also said that this would also be true for the whole period from 2004 as she admitted to living with her partner who was working, and that she had also been working. He wanted the whole case looked at again, and not just the narrow period in 2006 which the Tribunal had considered.
8. In a letter written after receipt of the Statement of Reasons (p.86) Mr R made roughly the same points.
9. In his OSSC 1 form Mr R said that Ms T had received over £50,000 during the period 2004-6, and owned a house with over £60,000 in equity. (p.93)
10. I remind myself that the appeal to the Upper Tribunal can only succeed if the First-tier tribunal's decision was in some respect wrong in law. I held an oral hearing of the appeal, at which Mr R and Ms T appeared in person, Ms T being accompanied and assisted by Mr G.R, and the Child Support Maintenance and Enforcement Commission was represented by Mr Leo Scoon, of the Office of the Solicitor to the Department for Work and Pensions.

A. The decision(s) and period under appeal

11. Mr R has asked in a number of letters what he can do to get the period from early 2004 to August 2006 reconsidered. The main thrust of his submissions to me is that the correct amount of maintenance in respect of that period should also have been looked at. Mr R accepts that he did not formally (i.e. in writing) appeal against the decision of 28 April 2005. However, he says that he did make several telephone calls to the CSA in 2005 saying that the nil award was not correct, and supplying information to the CSA, and that it is not his fault that the CSA has lost its documents. He says that he was eventually advised by the CSA to make the variation application, which he duly did. It is of course not my function to advise Mr R how he should proceed. My only function is to decide the appeal actually before me.
12. It does appear, from what Ms T told me at the hearing, that she was for a period in 2005 employed at a salary of £28,000 a year. It therefore looks as though some child support maintenance would have been found to be payable by Ms T in respect of at least that period, if the matter had been properly reconsidered by the CSA at that time. Mr R contends that Ms T was, in addition, working freelance as a web designer in 2006, but Ms T's contention is that she earned only a very small amount from that.
13. However, on the face of it the only decision actually under appeal to the Tribunal was that dated 20 November 2006, refusing Mr R's application for a variation on the ground of lifestyle inconsistent with declared income. That application had been made on 16 October 2006. Mr R's appeal form (p.19) stated that the date of the letter telling him about the decision he wanted to appeal against was 20 November 2006.
14. As pointed out by the Secretary of State in his submission in this appeal (p.100), the only earlier decision which could possibly also have been under appeal was that dated 9 August 2006, which on the face of it was a decision refusing to supersede with effect from the previous day – i.e. 8 August 2006. The decision prior to that was that made on 28 April 2005. The absolute 13 month time limit for appealing against the decision of 28 April 2005 (i.e. the period after which no extension of the time for appealing could have been granted) had expired in about May 2006. The decision of 28 April 2005 could therefore not possibly have been under appeal to the Tribunal.
15. The only way, as I see it, in which any period before August 2006 could possibly have fallen for consideration by the Tribunal was if (i) the decision of 9 August 2006 was properly under appeal to it and (ii) the decision of 9 August 2006, although expressed to have effect only from 8 August 2006, should have considered the maintenance payable from a much earlier date because Mr R, by his telephone calls to the CSA from 2005 onwards, had in effect been requesting that the decision of 28 April 2005 be superseded. What the CSA must have been dealing with on 9 August 2006, so the argument would run, was an application for supersession which had first been made a long time previously.
16. The application for a variation which Mr R made on 16 October 2006 was made more than one month after the decision of 9 August 2006. It was therefore an application for a supersession, rather than a revision, of the decision of 9 August 2006. However, as the Secretary of State's representative has pointed out in his submission in this appeal, the Secretary of State would have had power, under reg. 4 of the Social Security and Child Support (Decisions and Appeals) Regulations 1999, to extend the one month time limit for applying for revision of the decision of 9 August 2006. The fact that the Secretary of State's submission to the Tribunal stated that the decision of 20 November 2006 was a refusal to revise (as opposed to a refusal to supersede) and that it had effect from 8 August 2006, might possibly indicate that that power was implicitly exercised (although see the submission in this appeal at p.99, indicating that the computer record of the decision states that it had effect from 3 October 2006). If the time for applying for revision was extended, the effect is that the decision of 20 November 2006 was a refusal to revise the decision of 9 August 2006. That means that Mr R's appeal was in substance an appeal against the decision of 9 August 2006, but that the one month time limit for appealing ran only from 20 November 2006 (reg. 31(2)(a) of the 1999 Regulations), which means that there will have been an appeal before the Tribunal against the decision of 9 August 2006.
17. However, on the face of it the decision of 9 August 2006 had effect only from 8 August 2006. However, I think that there was evidence before the Tribunal which required it at least to consider whether, in the decision of 9 August 2006, the CSA ought to have investigated the position back to early 2005. There was material before the Tribunal which indicated that Mr R may have been applying for supersession on the ground of a change of circumstances (i.e. that Ms T was working) for a long time for before 8 August 2006. An application for supersession does not have to be in writing; it can be made orally. I refer to the terms of Mr R's letter to the Tribunal received on 4 May 2007 (p.25), which I summarised in para. 4(18) above. In addition, the Record of Proceedings indicates that Mr R gave some evidence to the Tribunal about what happened in 2005 and 2006. Mr R's evidence to me was that he rang the CSA several times in 2005, and in his letter of 28 November 2008 (p.110) he had said that "I have asked the CSA and now the Tribunal to look into these matters repeatedly over a period from 2005 until the present day." Mr G.R told me at the hearing that he and Ms T had had a lot of contact with the CSA and had been keeping it up to date, and that they had sympathy with Mr R to the extent that the CSA's conduct had been thoroughly unsatisfactory; for example, it had issued confusing and apparently contradictory decision letters. If Mr R was in effect requesting a supersession from early 2005 onwards, there is no evidence that those requests were dealt with by any earlier decision than that made on 9 August 2006. It is therefore arguable that the decision of 9 August 2006 should have considered whether the nil assessment was correct as from a much earlier date than 8 August 2006.
18. In my judgment, therefore, and contrary to the provisional view which I stated in my Direction dated 19 February 2009 and at the hearing, the Tribunal's decision was wrong in law in that it did not properly consider the issue whether the correctness of the maintenance assessment should be looked at in respect of a period going back to 28 April 2005. The Tribunal's decision must therefore be set aside on that ground.

B. The correctness of the Tribunal's decision in respect of the period from 8 August 2006 onwards.

(1) The position on the footing that the Tribunal could not go behind the JSA awards

19. Reg. 6 of the Child Support (Variations) Regulations 2000 sets out circumstances in which the Secretary of State may "reject" an application for a variation "on completing the preliminary consideration." One of the circumstances in which reg. 6 applies is where "the application has been made in one of the circumstances to which regulation 7 applies." Reg 7(1)(a) applies where "the application [for a variation] is made by a relevant person and a circumstance set out in paragraph (2) applies at the relevant date." In my judgment para. (2)(b) applied. This applies where "the non-resident parent is liable to pay the flat rate of child support maintenance owing to the application of paragraph 4(1)(c) of Schedule 1 to the [Child Support Act 1991], or would be so liable but is liable to pay less than that amount, or nil, owing to the application of paragraph 8 of Schedule 1 to the Act …". Paragraph 4(1)(c) of Schedule 1 to the 1991 Act provides that the flat rate of £5 is payable if the nil rate does not apply and ["the non-resident parent"] or his partner (if any) receives any benefit prescribed for the purposes of this paragraph of this sub-paragraph." Income based JSA is prescribed for the purposes of para. 4(1)(c): see reg 4(2) of the Child Support (Maintenance Calculations and Special Cases) Regulations 2000. Para. 8(2) of Schedule 1 to the 1991 Act provides that if the flat rate is payable because the non-resident parent falls within para. 4(1)(b) or (c) or 4(2), and if (as in the present case) the care of a qualifying child is shared, the amount of child support maintenance is nil.
20. In my judgment Ms T would have been liable to pay the flat rate under para. 4(1)(c) of Schedule 1, but for the fact that care was shared, which made the amount of maintenance nil. Regulation 7(2)(b) of the Variations Regulations therefore applied.
21. The Secretary of State's submission to the Tribunal said that the decision maker should have rejected the variation application at the preliminary stage under reg. 6 of the Variations Regulations, because reg. 7(2)(b) of the Variations Regulations applied. In my judgment the application could have been rejected on that ground, but reg. 6(1) is merely permissive. It is clear that the decision maker decided not to reject it following preliminary consideration. I agree with Mr Scoon's submission that in those circumstances it is not open to a tribunal simply to say that the application ought to have been rejected under reg. 6, and to decide the appeal on that basis. The tribunal must go on to consider the substantive grounds of the application for variation. If the application must fail in any event, by reason of the factor which led to reg. 6 applying, then this will at the end of the day make no difference. In my judgment the Tribunal therefore erred in law in saying that the variation application had to fail simply because para. 7(2)(c) applied.

(2) Was the variation ground made out?

22. Regulation 20 of the Variations Regulations (lifestyle inconsistent with declared income) applies in two sets of circumstances, set out in reg. 20(1) and (2). As I see it, those paragraphs can only apply, in a case where the nil rate is payable, if the reason why the nil rate is payable is that either para. 5(a) or 5(b) of Schedule 1 to the 1991 Act applies. Para 5(a) did not apply. Para. 5(b) applies where the non-resident parent has a net weekly income of below £5. It is Mr R's contention that that was not the case either. The reason why the assessment was nil is that para. 8 of Schedule 1 applied. It therefore appears to me that reg. 20 of the Variations Regulations was not applicable: a variation ground under this regulation was not made out.

(3) Should the Tribunal have questioned the correctness of the JSA award?

23. It appears that the award of JSA, apparently made by an appeal tribunal, which took effect from 18 August 2006, was made under a mistake. From what Ms T and Mr G.R. told me at the hearing the position was that at the time when Ms T applied for JSA in January 2006 she was living at the house in Peacehaven, having obtained possession from Mr R, but Mr G.R. was working and living in London during the week and living with Ms T at the house at the weekends. By August 2006, however, Mr G.R. was living with Ms T throughout the week in the house at Peacehaven and commuting to London, in which case the award of JSA should not have been made, because Ms T was living with a partner who was in remunerative employment. Ms T did not appear at the tribunal hearing, which was determined on the papers.
24. I follow the decision of Mr Commissioner (as he then was) Levenson in para. 13 of CCS/3452/2007 that, in relation to the question whether a parent "receives" a relevant benefit within the meaning of provisions such as that in para. 4(1)(c) of Schedule 1 to the 1991 Act, an appeal tribunal cannot go behind (i.e. consider the correctness of) an award of benefit "unless there has actually been a criminal conviction (or, possibly, an admission of fraud) during the course of tribunal or court proceedings." In the present case there has been at most an admission that Ms T had some responsibility for the incorrect award of JSA being made by not informing the JSA appeal tribunal that she had started living with Mr G.R. But that is not in my judgment an admission of "fraud" for these purposes. The question for me is, strictly, not what decision should have been reached on the evidence before me, but whether the Tribunal erred in law in its approach. However, it is difficult to ascertain from the Record of Proceedings precisely what evidence was given in this respect. But even on the footing that the Tribunal ought to have ascertained the facts which I have referred to in para. 22 above, it was in my judgment right not to consider whether the JSA award was correct.
25. I would state that, in any event, Ms T's evidence is that during the material period August to November 2006 she had no income of her own, and that her lifestyle was funded entirely by Mr G.R. Mr R has not been able to produce any evidence to rebut that. Under reg. 20(3)((d) of the Variations Regulations a variation cannot be made on the "lifestyle inconsistent" ground where the non-resident parent's lifestyle is paid for from the income of a partner.

(4) Should the Tribunal have considered whether the ground of variation in reg. 18 of the Variations Regulations (assets) applied?

26. Reg. 18 of the Variations Regulations provides that a variation can be made where the non-resident has assets with a net value of £65,000, although certain types of asset are excluded.
27. In my judgment, looked at in the round, the material before the Tribunal did not raise, as an issue in the appeal, the question whether a variation ought to be made on the ground that Ms T had assets in excess of £65,000. The Tribunal therefore did not err in law in not considering this.
28. Even if the Tribunal ought to have considered it, on Ms T's evidence to me the only significant assets which she had during the period 8 August to 20 November 2006 were (a) the Peacehaven house, which is excluded for these purposes and (b) the Newhaven flat, which Ms T told me was sold in September 2007 for £120,000. After payment of a mortgage of £68 – £70,000, she was left with equity of about £50,000. I would therefore have found, on the evidence before me, that Ms T did not have net assets, of a nature counting for the purposes of reg. 18, of more than £65,000.

My conclusions

29. The overall effect of my decision is therefore as follows. First, as regards the position from 8 August 2006 onwards, although the Tribunal made an error of law, it reached the right result, and therefore that error does not justify setting aside the Tribunal's decision (paras. 18 to 27 above). Secondly, the Tribunal's decision must be set aside as wrong in law for failing, when considering whether it had jurisdiction in respect of a period before 8 August 2006, to consider whether the decision of 9 August 2006 should have dealt with the correctness of the maintenance calculation with effect from a much earlier date than 8 August 2006. It is particularly material here that (a) Mr R's evidence is that he complained to the CSA in 2005 that the nil award was not correct (para. 10 above) and (b) Ms T told me that she was for a period in 2005 employed at a salary of £28,000 a year (para. 11 above), which has never been taken into account in a maintenance assessment.
30. Mr R and Ms T both asked me, if I concluded that an earlier period should be looked at, to make my own decision on the correct amount of maintenance payable, in order to put an end to this matter, which has already involved three hearings. I am hugely sympathetic to that, in principle.
31. With that in mind, following the oral hearing before me I made a Direction on 11 May 2009 requiring copies of the entries on the CSA computer in 2005 and 2006 to be provided by CMEC. I considered that this might enable me at least to decide the question whether the decision of 9 August 2006 should have dealt with the correctness of the maintenance calculation from a much earlier date than 8 August 2006. (Contrary to what is stated on p.99, the Secretary of State's submission in this appeal (p.99) had not in fact attached copies of the computer printout of the decisions). Copies of the computer entries have been provided, but unfortunately I do not find them to be helpful. Initially, illegible copies were supplied. When legible ones were supplied, they appear to have included only copies of records of communications with Ms T, and not with Mr R. I am therefore not really any further forward, even on that limited point. If I had decided that an earlier period should be looked at, I would not have had the information available to made findings as to Ms T's earnings back to April 2005.
32. The new tribunal should in my judgment proceed as follows:

(1) It should make a finding as to whether, at some time before 8 August 2006, Mr R in effect applied for a supersession (on the ground of a change of circumstances) of the decision of 28 April 2005 by a request which was not dealt with until 9 August 2006. If it so concludes, it will have jurisdiction back to the date when the supersession application was first made. The thoroughly unsatisfactory position here has come about largely as a result of the loss of documents by the CSA, although it must be said that Mr R has not helped himself by not putting anything in writing to the CSA in 2005 and much of 2006, and by not keeping copies of what he received from the CSA. However, it is possible that further relevant documents may be forthcoming from the Secretary of State (e.g. computer entries), or from Ms T. Mr G.R. informed me at the hearing that they still had, for example, a copy of Mr R's completed October 2006 variation application form.

(2) If the new tribunal concludes that the continued correctness of the nil calculation should have been reconsidered by the Secretary of State with effect from a date earlier than 8 August 2006, it should then reconsider, in respect of that period, (i) the correctness of the calculation under the main formula, and (ii) whether either the lifestyle inconsistent or the assets ground of variation applied.

(3) As regards the period from 8 August 2006 onwards, the new tribunal should hold that a nil calculation is correct, unless any of the evidence which emerges in respect of the earlier period shows that the decision of the Tribunal which sat on 6 December 2007 was wrong for some reason.

33. The matter will therefore have to come to before a district Judge for directions in relation to the rehearing. The Directions will need to include at least a Direction that the Child Maintenance and Enforcement Commission prepare a further submission specifically addressing the question whether there was any contact by Mr R between April 2005 and August 2006 which amounted to a request by Mr R for a supersession of the subsisting maintenance calculation.
34. I can only conclude by again stating my regret that I have not been able to finally dispose of this matter.

Charles Turnbull

Judge of the Upper Tribunal

24 June 2009