Decision of the Upper Tribunal
(Administrative Appeals Chamber)
As the decision of the First-tier Tribunal (held at Blackpool on 4 March 2009 under reference 064/07/01581) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007 and the case is REMITTED to a differently constituted First-tier Tribunal (Social Entitlement Chamber).
DIRECTIONS:
The tribunal must undertake a complete reconsideration of the issues that are raised by the appeal and, subject to the tribunal’s discretion under section 20(7)(a) of the Child Support Act 1991, any other issues that merit consideration. 

Reasons for Decision
A.	The issue
1.	The issue in this case is the meaning of ‘with a view to’ in paragraph 27 of Schedule 1 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (SI No 1815):
‘27. Subject to paragraphs 28 to 30, where the Secretary of State is satisfied that, otherwise than in the circumstances set out in paragraph 26, a person has intentionally deprived himself of-
(a)	any income or capital which would otherwise be a source of income;
(b)	any income or capital which it would be reasonable to expect would be secured by him,
with a view to reducing the amount of his assessable income, his net income shall include the amount estimated by the Secretary of State as representing the income which that person would have had if he had not deprived himself of or failed to secure that income or, as the case may be, that capital.’
B.	How the issue arises
2.	This case concerns the child support maintenance payable in respect of Rebecca by her father who, in the terms of the child support legislation, is her absent parent. He is a respondent before the Upper Tribunal. The other respondent is the Child Maintenance and Enforcement Commission, which has replaced the Child Support Agency. Rebecca’s mother is her parent with care and the appellant before this tribunal.
3.	The absent parent’s liability was assessed at £29.21 a week from the effective date of 31 July 2007. The parent with care exercised her right of appeal against that decision. One of her grounds of appeal was that the absent parent had deprived himself of income by leaving his second job at Tesco. At first, he had worked for Tesco full-time. He then took a different job, but continued to work at Tesco on Sundays. However, he left that work shortly after marrying. I have, as I always do in child support cases, limited myself to the bare, undisputed facts and refrained from any reference to the contentious issue, which in this case is the absent parent’s purpose or intention in giving up the work.
4.	The tribunal decided that the absent parent’s housing costs required investigation, but that he had not deprived himself of income. It did not consider that a change of job amounted to deprivation. Otherwise, it argued, it would be necessary to investigate whenever a parent changed jobs, reduced overtime or gave up work. It distinguished between leaving a job and depriving oneself of the income from that job.
5.	On appeal to the Child Support Commissioner, Mr Commissioner Gamble set aside the tribunal’s decision and directed a rehearing. As part of his directions for the rehearing, he referred the tribunal to the decision of Mr Commissioner Mesher in R(CS) 3/00. This contains the only reported discussion of ‘with a  view to’:
‘19.	However, it should be stressed that the conditions for the application of paragraph 27 are strict, although it is not very helpfully drafted. Where capital is spent it is almost inevitable that the person has intentionally deprived himself of the capital. In the case of a lump sum contribution under a personal pension scheme or a retirement annuity contract (which will normally be made out of capital, in the form of savings from past income), the contribution goes to increase the value of the person’s rights under the scheme or arrangement, but there has been a deprivation of the capital in a form in which it could immediately yield income. The crucial factor is whether or not that deprivation was “with a view to reducing the amount of his assessable income”. That makes the test the person’s intention, which can be determined on direct evidence or by inference from all the circumstances of the transaction constituting the deprivation. I have not had any detailed submissions on this point, but, for the guidance of the new appeal tribunal I should say that my view is that the intention which has to be shown is to reduce income which might be relevant to a child support assessment which is being made or is reasonably expected to be made. That makes the timing of any deprivation important. I also draw attention to the authority on a similar phrase (“with a view of”) in the now-repealed section 44 of the Bankruptcy Act 1914, on when a fraudulent preference was given to one creditor over others. It was held that that phrase required it to be established what the person’s dominant intention was (e.g. Peat v. Gresham Trust Ltd [1934] AC 252, Re Cutts (a bankrupt) [1956] 1 WLR 728 and Re FLE Holdings [1967] 1 WLR 1409).’
6.	At the rehearing, the tribunal applied the ‘dominant purpose’ test and found that the absent parent had not deprived himself of income. However, the tribunal gave the parent with care permission to appeal on the meaning of ‘with a view to’ in paragraph 27. Both parents have asked for an oral hearing of this appeal. That was not necessary, as the submissions on the legal issue were clear. However, they will be able to attend an oral hearing when the case is reheard by the First-tier Tribunal.
C.	The parent with care’s argument
7.	The parent with care has relied on two decisions to show that test under paragraph 27 is not the dominant purpose test.
MacDonald (Inspector of Taxes) v Dextra Accessories Ltd [2005] 4 All ER 107
8.	This is a decision of the House of Lords. The issue was the meaning of ‘amounts or benefits … held … with a view to their becoming relevant emoluments’ in section 4(11)(a) of the Finance Act 1989. Lord Hoffmann gave the only speech and said at [18] that he would dismiss the appeal ‘largely for the reasons given by Jonathan Parker LJ’ in the Court of Appeal, which he had summarised as:
‘15.	… if Parliament had intended that the funds should be held, as the Special Commissioners thought, for the sole purpose of paying emoluments, or as Neuberger J thought, with the principal or dominant intention of paying emoluments, Parliament would no doubt have used such expressions, which are by no means unfamiliar in tax legislation. …’
R v Dooley [2006] 1 WLR 775
9.	This is a decision of the Court of Appeal. The issue was the meaning of ‘have in his possession such indecent photographs or pseudo-photographs, with a view to their being distributed or shown by himself or others’ in section 1(1)(c) of the Protection of Children Act 1978. The Court of Appeal referred to the discussion in a criminal law textbook :
‘14.	… It is stated that, whilst it is probably not necessary to show that the defendant's primary purpose in making a demand was to make a gain for himself or another, it must [be] one of his objectives. We agree that it need only be one of his objectives. …’
D.	The Commission’s argument
10.	The Commission’s representative has argued the dominant purpose test applies to paragraph 27. In addition to R(CS) 3/00, she refers in support to: CCS/2342/2007 (now R(CS) 9/08), in which Mr Mesher referred at [30] to his earlier decision; and CCS/4056/2004, in which Mr deputy Commissioner Wikeley applied that interpretation at [30]. She makes the point that the former decision was made after the House of Lords had decided the MacDonald case. She also points out that that case is not decisive, as the meaning of words depends on their context. 
E.	The absent parent’s argument
11.	The absent parent has made a short reply to the appeal. He has not addressed the legal issue, but has repeated that his decision to give up his Sunday work at Tesco was not taken in order to deprive the parent with care.
Commissioners’ decisions
12.	No Commissioner ever decided that the test under paragraph 27 was the parent’s dominant purpose. In R(CS) 3/00, Mr Mesher said only that he was drawing attention to a line of authority. He did not analyse the language, context or function of paragraph 27. Nor did he consider the bankruptcy legislation and the caselaw in order to consider why ‘dominant intention’ had been adopted as the appropriate interpretation in that context. In CCS/2342/2007 (R(CS) 9/08), his language was guarded:
‘30.	… If the new appeal tribunal is considering that condition it should take into account the authorities mentioned in paragraph 19 of Commissioner's decision R(CS) 3/00 suggesting that that phrase might require the identification of a person's dominant intention, as well as what is said in paragraph 24 above about purpose/intention. …’
And in CCS/4056/2004, Mr deputy Commissioner Wikeley quoted from R(CS) 3/00 and went on, also in guarded terms:
‘30.	This would suggest that the test in paragraph 27 is set at a higher threshold than the rule governing notional income and capital in the income support scheme.  In that context it is sufficient that the aim of securing entitlement to benefit (or increasing the amount of benefit) is a significant operative purpose – it need not be the sole or even the main reason.’
13.	The Commission’s representative is correct to say that CCS/2342/2007 (R(CS) 9/08) was made after MacDonald. However, there is nothing to suggest that Mr Mesher was aware of that decision. I do not accept that he gave his decision in knowledge of, and despite, MacDonald. 
MacDonald and Dooley
14.	These cases were decided on particular legislation. They are not decisive on the interpretation of paragraph 27. What they do show, however, is that ‘with a view to’ is not limited to ‘dominant purpose’. It is capable of a wider meaning in an appropriate context. 
The bankruptcy authorities
15.	The context of these decisions, cited in R(CS) 3/00, was the avoidance of fraudulent preferences by which someone who was insolvent sought to favour one creditor at the expense of the rest. The law had to strike a balance between protecting the creditors as a whole from having the debtor’s resources depleted and protecting the individual creditor from having a completed transaction set aside. The balance was struck in the legislation by reference to the state of mind of the debtor: ‘with a view of’. As interpreted by the courts, it was limited to cases where the debtor’s principal or dominant purpose or intention was to prefer the individual creditor. This excluded cases in which favouring the creditor was a consideration, but of less significance to the debtor. This secured the maximum protection for completed transactions and the beneficiaries of those transactions. 
16.	The context of paragraph 27 is different. It is clear from its content that that paragraph (and, for that matter, paragraph 26) serves two functions. First, it deters parents from depriving themselves of income that is available to them. In its terms, it does not prevent a parent from exercising freedom of decision; it merely imposes a consequence if that freedom is exercised for an improper purpose. In practice, though, that consequence may be sufficient to deter the parent. Second, the paragraph protects qualifying children by ensuring that the income by reference to which their maintenance is assessed is not depleted. There is a balance to be struck between deterrence and protection by reference to the state of mind of the parent: ‘with a view to’. 
17.	Paragraph 27 and the fraudulent preference legislation therefore share the common objectives of deterrence and protection. They are both anti-avoidance measures. But they differ in that the effect of the latter was to set aside a completed transaction, whereas the effect of the former is to attribute income to a parent in the calculation of child support liability. The difference means that the two are not directly comparable. I do not consider that the matter is concluded by the bankruptcy authorities. The protection for completed transactions was a significant factor that justified narrowing the scope of fraudulent preferences to those in which preference was the debtor’s dominant purpose. With that element removed, it may be that the balance between the parent’s freedom of action and the child’s right to maintenance should be struck more in favour of the child. 
The approach to interpreting paragraph 27
18.	The discussion so far is prologue. I now need to decide what paragraph 27 means. I bear in mind two decisions of the House of Lords.
19.	First, ‘with a view to’ is an ordinary expression in regular use. As Lord Hoffmann explained in Secretary of State for Work and Pensions v Moyna (reported as R(DLA) 7/03) at [24], its proper interpretation ‘depends not only upon the conventional meanings of the words used but also upon syntax, context and background.’ I accept the Commission’s argument on that point. 
20.	Second, paragraph 27 must be considered as a whole. As Lord Bridge explained in In re Woodling, Woodling v Secretary of State for Social Services [1984] 1 WLR 348 at 352, referring to the attendance allowance legislation:
‘The language of the section should, I think, be considered as a whole, and such consideration will, I submit, be more likely to reveal the intention than an attempt to analyse each word or phrase separately.’
In particular, I need to take account of the whole phrase ‘a person has intentionally deprived himself of [income] with a view to reducing the amount of his assessable income’. The word ‘intentionally’ must qualify the whole phrase; it is difficult to imagine a deprivation that occurs negligently or accidently. For brevity, however, I will continue to refer simply to ‘with a view to’. 
Paragraph 27
21.	Coming at last to paragraph 27, it clearly imposes a subjective test. It depends on the parent’s actual state of mind. That has to be identified as a fact, either by direct evidence or inference. There is no scope for attributing to a parent the natural or probably consequences of a deprivation. Objective considerations such as those are only relevant as evidence of the parent’s actual state of mind. They must be assessed in the context of the evidence as a whole and the circumstances of the case, in order to decide what inferences may properly be drawn as to the parent’s actual state of mind.
22.	The test depends on the state of the parent’s mind with regard to the reduction of assessable income. That must form part at least of the intention or purpose of the deprivation. It follows that it does not cover a deprivation just because the parent is aware that it may or will result in a reduction. The test is not one of knowledge. Nor does it cover a case in which the parent will be satisfied or pleased with a particular result. The test is not one of the parent’s attitude towards a particular outcome. The reduction must be the result that the deprivation is intended to achieve. For example: if the parent reduces income solely in order to reduce tax liability, paragraph 27 does not apply even if the parent is aware of the effect the decision will have on assessable income and is pleased with that result. 
23.	This is not to say that the parent’s knowledge of, or attitude towards, a reduction in assessable income is irrelevant to paragraph 27. They are relevant, but only in so far as they are evidence of the parent’s intention or purpose. 
24.	The issue in dispute in this case is the precise degree of influence that the reduction in assessable income must have in the parent’s decision. If it is to have any application, it must cover cases where the reduction is the parent’s sole purpose or intention. 
25.	If the paragraph were limited to sole purpose or intention, it would have some effect but it would effectively be emasculated as an anti-avoidance provision. Decisions are often made not for a single reason but for a number: see Lord Evershed MR in In re Cutts (a bankrupt) [1956] 1 WLR 728 at 733-734. There may be parents who are so single-minded that they will deprive themselves of income for no other purpose and with no other intention than to reduce the maintenance they have to pay for their children. But even those parents will usually be able to present some other plausible consideration as their purpose or intention. It must, therefore, cover cases in which the reduction of assessable income was one of a package of considerations. This will include cases in which that was the dominant motive. But I can see no reason to limit it to those cases. I can see no reason to exclude any case in which the reduction of assessable income was an operative purpose or intention behind the deprivation. Whenever a parent intentionally acts to bring about the reduction in assessable income, paragraph 27 applies. This is a permissible meaning for ‘with a view to’, it is an appropriate interpretation for the language of paragraph 27 as a whole, it strikes a fair balance between the interests of parents and their children, and it gives effect to the twin functions of deterrence and protection. In addition, there is support for this interpretation from the wording of paragraph 26 and the decision-making context. 
Relationship with paragraph 26
26.	Paragraph 26 of Schedule 1 to the Regulations may be relevant on account of the specific reference to ‘principal purpose’ in subparagraph (d):
‘(d)	that the principal purpose of the person undertaking the service without receiving any or adequate remuneration is to reduce his assessable income for the purposes of the Act; …’
This is in contrast to paragraph 27, which does not refer to ‘principal purpose’. That suggests that, whatever ‘with a view to’ means in the latter, it is not the same as ‘principal purpose’. Otherwise, why the different language in provisions that are adjacent and related in their subject matter? And, in the context, ‘with a view to’ can hardly be narrower than ‘principal purpose’. If it were, paragraph 27 would be limited to cases where the reduction was the sole purpose of the deprivation. 
27.	Paragraph 27 is also expressly subordinate to the paragraph 26, as it applies only if the other does not. That suggests that it is wider in its scope than paragraph 26. This in turn provides some support for ‘with a view to’ being wider than ‘principal purpose’. However, I do not consider that this point is of much assistance in the interpretation of paragraph 27. Paragraph 26 contains a number of elements, of which the ‘principal purpose’ requirement is only one. It may be in respect of some or all of those other elements that paragraph 27 is wider than paragraph 26.
Inferring a mental state
28.	It is easy to refer to sole, dominant and operative intentions. It is easy to say that they differ from cases in which a parent is merely satisfied or pleased at a particular result. These are valid conceptual distinctions. However, they are not so easy to draw in practice. In the real world of the decision-makers for the Commission and of tribunals, there are no bright lines that can easily be drawn.
29.	Parents have the chance to explain why they deprived themselves of income. However, in the absence of an admission, this will not be decisive. If a parent is found to have the necessary purpose or intention, that will usually be done by drawing an inference. 
30.	The parent’s explanation will have to be assessed in the context of the evidence as a whole and the circumstances of the case. If it is not accepted, it may be possible to infer the parent’s state of mind. In deciding what inference, if any, is permissible, it may be relevant to consider factors such as: (a) the timing of the deprivation; (b) any pressures that the parent was under from third parties such as a bank or a partner; (c) the probabilities. 
31.	My interpretation of paragraph 27 will avoid the need to undertake the task of distinguishing between different degrees of influence that the reduction in assessable income may have had on the parent’s decision. It will still be necessary to decide whether a parent acted (i) to reduce assessable income or (ii) merely with the knowledge and, perhaps, the satisfaction that this would or might happen. I do not underestimate the practical difficulties in drawing that distinction, but it cannot be avoided, as it is one that has to be drawn under the clear terms of paragraph 27. 
32.	This point is reinforced by the consideration that the vast majority of decisions made under paragraph 27 are taken, not by judges in tribunals, but by decision-makers in the Commission. They have the chance to speak to parents by telephone or to interview them face-to-face. However, the decisions will mostly be made on the basis of limited information that was provided in writing. As Mr Commissioner Rowland said in a different context in R(CS) 14/98:
‘16.	… Indeed, there might, be a case for drawing such a distinction. However, it seems to me that, in the context of this legislation, it is inconceivable that the Secretary of State intended that such fine distinctions should be drawn when they would, in many cases, be highly contentious. No one could describe this legislation as simple, but it does seem designed to produce fairly clear cut answers to most cases so that a relatively junior child support officer is able to apply the law. …’
Those comments are equally applicable to distinctions as to the various states of mind a parent may have in relation to a reduction in assessable income.
F.	Significant operative purpose 
33.	I have considered whether the test should be one of the parent’s significant operative purpose. That test applies for the purposes of notional income and capital in social security benefits: see R(SB) 40/85 at [10]. However, I do not consider this an appropriate formulation. First, although that interpretation of the social security legislation is well-established, the reason for adopting it was not analysed in the authorities. Second, I am not sure that ‘significant’ adds much, if anything, to ‘operative’. The possibility of an operative reason that is not significant is more theoretical than real. If the reduction of assessable income was operative, it will in practice have been important enough to be significant. And if it is not that important, it will probably be simply something that gave satisfaction rather than caused the parent to act. Third, it would require decision-makers and tribunals to draw inferences with a degree of precision that will usually be unrealistic given the sort of evidence that is usually available in cases such as this. 
G.	Disposal
34.	In my case management directions, I asked whether any misdirection by the tribunal had affected its decision. I had in mind that the tribunal may have been correct to find that the absent parent had not acted to reduce his assessable income whatever the correct interpretation of paragraph 27. The Commission’s representative has drawn attention to some factors that justify the facts being reconsidered: see paragraphs 21 and 22 on pages 163-164. Accordingly, I set aside the tribunal’s decision and direct a rehearing.
Signed on original
on 6 August 2009	Edward Jacobs
Upper Tribunal Judge