THE UPPER TRIBUNAL

Case No: CSCS/11/08

ADMINISTRATIVE APPEALS CHAMBER

Appellant:
1st Respondent:
2nd Respondent:

Heard at: Edinburgh
Date of Hearing: 30 August 2007

DECISION OF THE UPPER TRIBUNAL

A J GAMBLE
JUDGE OF THE UPPER TRIBUNAL
Oral Hearing

ON APPEAL FROM: Appeal tribunal

Tribunal Case No: 091/06/01906
Tribunal Venue: Edinburgh
Hearing Date: 30 August 2007

THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

DECISION OF THE UPPER TRIBUNAL JUDGE

Before: A J Gamble, Judge of the Upper Tribunal

Attendance: 

The Appellant appeared on her own behalf.

For the 1st Respondent: Jonathan Brodie, Advocate instructed by Miss McCurry, Solicitor, of the Office of the Solicitor to the Advocate General

The 2nd Respondent appeared on his own behalf.

DECISION OF THE UPPER TRIBUNAL

The appeal by the parent-with-care is allowed.

The decision of the Edinburgh appeal tribunal of 30 August 2007 is set aside.

The case is referred to the First-tier Tribunal (Social Entitlement Chamber) for a rehearing before a tribunal, diffrently constituted both from that of 30 August 2007 and that of 25 April 2007, in accordance with the directions set out in paragraph 15 of the Reasons.

REASONS FOR DECISION

1.	V J P and J G P are the father and mother respectively of a son SJP, born on 17 January 1991. They were formerly married to each other but were divorced in 2003. VJP is the non-resident parent and JGP is the parent-with-care of SJP.

2.	On 18 October 2005, the parent-with-care applied for what is now properly considered to be a departure direction. It is accepted by all parties that any departure direction given in response to that application should be applied to the non-resident parent’s child support maintenance liability of nil per week, calculated on 22 June 2006, with an effective date of 13 May 2005.

3.	On 14 August 2006, a decision maker, acting on behalf of the Secretary of State, refused to give a departure direction. That decision was confirmed on later reconsideration. The parent-with-care appealed. Her appeal was adjourned by an appeal tribunal of 25 April 2007 who gave detailed directions for the lodging of additional documentation. Her case was then heard by the appeal tribunal of 30 August 2007. They allowed the appeal by giving the parent-with-care a departure direction on the basis of the non-resident parent’s lifestyle being inconsistent with his declared income. They directed the Secretary of State to make a fresh assessment of the child support maintenance liability of the non-resident parent from 14 October 2005. For the purposes of that assessment, they estimated the non-resident parent’s net income at £12,500 per annum.

4.	Thereafter, there was a purported appeal to the Child Support Commissioner against the tribunal’s decision. However, on 20 August 2008 Mr Commissioner May QC (as he then was) held that he lacked jurisdiction to decide the merits of the appeal for the reasons laid out in decision, CSCS/04/2008. 

5.	On 29 August 2008, the chairman of the tribunal validly granted the parent-with-care leave to appeal to the Child Support Commissioner. There is thus no longer any doubt about jurisdiction in these appellate proceedings. The case was automatically transferred to the Upper Tribunal (Administrative Appeals Chamber) on 3 November 2008. The Secretary of State, whose functions in regard to child support adjudication have been transferred to the Child Maintenance and Enforcement Commission, supported the parent-with-care’s appeal. 

6.	On 18 December 2008, the Registrar granted an oral hearing to the parent with care. That hearing took place before me on 19 February 2009. The parent-with-care and the non-resident parent were both present. Neither was represented. The Child Maintenance and Enforcement Commission was represented by Mr J Brodie, Advocate, instructed and accompanied by Ms C McCurry, Solicitor, from the Office of the Solicitor to the Advocate General for Scotland. 

7.	At the oral hearing, I raised a preliminary issue at my own hand. In my former capacity as a District Chairman, I had issued interlocutory directions in the appeal tribunal proceedings. See documents 76 and 78. The parent-with-care had responded to one of those directions in a letter reproduced as document 77. The non-resident parent had referred to them in a letter appearing as document 83. Against the background of the contents of all of those documents, I indicated my provisional view that I did not consider that I was obliged to recuse myself, having regard to Article 6(1) of the European Convention on Human Rights and the common law on apparent bias. However, I did explain that I would recuse myself if any party specifically asked me to do so. A brief discussion then took place in which the non-resident parent expressed some concern at the contents of document 77. However, he professed himself content that I should continue to preside over the oral hearing and did not request that I recuse myself. The parent-with-care took exactly the same position as did Mr Brodie, on behalf of the Child Maintenance and Enforcement Commission. In these circumstances, I continued with the oral hearing and have gone on to decide the appeal. 

8.	The parent-with-care, although successful before the appeal tribunal of 30 August 2007, would have preferred that tribunal to have given her a more favourable result. With my permission, she read out the contents of documents 408-411, answered some brief questions from me and made a few further comments about the tribunal’s decision. She contributed little on whether the tribunal had made any mistake in law. Understandably, her concerns were with the underlying merits of the case. 

9.	The non-resident parent adhered to the position he had laid out on documents 386-388. He was content with the tribunal’s decision and did not wish me to set it aside. 

10.	The parent-with-care and the non-resident parent both raised various points of credibility relating to each other. I indicated to them that those were not issues which properly arose in these appellate proceedings which were restricted to points of law. In his oral submissions, Mr Brodie took pains to make exactly the same point. 

11.	Mr Brodie supported the parent-with-care’s appeal on two grounds. First of all, he elaborated on the written submission made in paragraph 7 of document 383. Secondly, he made an oral submission on an issue not mentioned in the written submissions made on behalf of the Secretary of State which I discuss in paragraph 13 below. 

12.	I reject Mr Brodie’s first submission. A careful reading of R(CS)3/01 to which he referred me and which is also cited in detail in paragraph 7 of document 383 indicates that that decision was based on a statutory text different from the one in force when the appeal tribunal reached its decision. I refer, in particular, to the text of regulation 40(5) of the Departure Direction Regulations 1996. That paragraph was amended with effect from 19 January 1998. In paragraph 18 of R(CS)3/01, Mr Commissioner Jacobs (as he then was) notes that amendment. I have carefully considered the text of Regulation 40(5) just referred to along with the text of Regulation 25 of the same Regulations as those texts stood at the date of the tribunal’s decision. In the light of that consideration, I hold that the tribunal did not make a mistake in law in their approach to the calculation of the non-resident parent’s income for the purposes of Regulation 25 which relates to lifestyle inconsistent with declared income. In my view, the tribunal’s decision reflects with the text of Regulation 40(5) which was in force at the date of their decision. They directed the Secretary of State to increase the net income of the non-resident parent to a figure (£12,500 per annum) specified in the departure direction they gave which was “part of the difference” between his assessed level of income (nil) and the level of income (around £22,000 per annum) which they considered was required to support his overall lifestyle. In regard to this aspect of the case, the tribunal did not make a mistake in law.

13.	Mr Brodie’s second submission, alluded to in paragraph 11 above, was based upon paragraphs 11 and 12 of Mr Commissioner May QC’s decision in CSCS/07/2007, reproduced in documents 416-417. I accept this submission and follow those paragraphs. Those paragraphs require a tribunal dealing with a departure direction appeal to make findings of fact in respect of the whole financial circumstances both of the non-resident parent and of the parent-with-care and specifically, to make such findings on the capital of each of them. The rationale behind that requirement, according to Mr Commissioner May QC, is that proper effect can be given to Section 28F(2)(a) and (b) of the Child Support Act 1991 which cannot be done without such findings. I agree. I also agree with Mr Commissioner May QC that the phrase “the financial circumstances” used in paragraphs (a) and (b) of sub-section 2 of Section 28F includes capital. That follows, in my view, from the ordinary meaning of the phrase “financial circumstances” which is very general and is not restricted to income. My interpretation of the above phrase is also consistent with its immediate statutory context. That context relates to “the just and equitable” discretion involved in the giving of a departure direction. The nature of that discretion clearly points in the direction of capital as well as income being included within the scope of the phrase “the financial circumstances”. Otherwise very relevant factors could be ignored in exercising that discretion. In this case, the tribunal made no findings of fact on the capital of the parent-with-care. In regard to her income they merely found, in finding of fact number 2 on document 250, as follows -

	“(the parent with care) is in receipt of a prescribed benefit and is therefore treated as 		having no assessable income”

That finding of fact is insufficient to comply with paragraphs 11 and 12 of CSCS/07/2007. Indeed, I consider from the Statement of Reasons, (documents 250-252), read as a whole, that the tribunal have not shown that they paid any real attention to the “financial circumstances” of the parent-with-care in exercising their just and equitable discretion when giving the departure direction they gave. In these regards, therefore, they made mistakes of law.

14.	I consider that the mistakes of law described in paragraph 13 above are of sufficient materiality for me to exercise my discretion under Section 12(2)(a) of the Tribunals, Courts and Enforcement Act 2007 to set the decision of the tribunal aside. However, I do not consider it appropriate to remake it. I rather remit the case to a freshly constituted First-tier tribunal for reconsideration in accordance with the directions given in paragraph 15 below. 

15.	My directions for the rehearing are as follows.

 (a) Steps should be taken within the First-tier Tribunal (Social Entitlement Chamber) to ensure that the new tribunal, like those of 25 April 2007 and 30 August 2007, includes an accountant member. 

 (b) The parent-with-care should make clear at the oral hearing if she wishes to persist in any grounds for a departure direction apart from that of the non-resident parent’s lifestyle being inconsistent with his declared income or whether, on the other hand, she wishes to restrict herself to that ground. 

 (c) The new tribunal should limit itself to a consideration of the circumstances prevailing on 14 August 2006, the date of the decision maker’s decision. 

 (d) In regard to inconsistent lifestyle, the new tribunal should carefully apply Regulations 25 and 40(5) of the Departure Direction Regulations 1996 to the facts as they find them to be on the basis of such of the evidence before them as they accept. 

 (e) They should only, however, give a departure direction on the above or any other ground if they are satisfied that it would be just and equitable to do so, taking account in excercising that discretion of the factors listed in Sections 28E(2) and 28(F)(2) of the Child Support Act 1991 and in Regulation 30 of the Departure Direction Regulations 1996. In regard to Section 28F(2), they should follow the approach emphasised in paragraph 13, above.

 (f) Any departure direction which they give should take effect from 14 October 2005. 

16.	The parent-with-care’s appeal succeeds. All parties should, however, be aware that the merits of the case are once again open for determination. They will be decided by the new tribunal applying the directions laid out in paragraph 15 above. 

(Signed)
A J GAMBLE
Judge of the Upper Tribunal
Date: 26 February 2009