File no: CCS 2742 2001 

DECISION OF THE CHILD SUPPORT COMMISSIONER

1	I dismiss the appeal. For the reasons below, the tribunal was not wrong in law in its decision.

2	The appellant (to whom I refer as A) is the absent parent and father of qualifying children for whom a child support maintenance assessment has been made. The first respondent is the secretary of state. The second respondent (to whom I refer as C) is the parent with care and mother of the children. A is appealing with my permission against the decision of the Sheffield appeal tribunal on 17 May 2001. 

Background to the appeal 

3	The tribunal heard an appeal by C against the decision of the Secretary of State that A was liable to pay £21.38 a week in respect of the three children from 26 July 2000. There were three grounds of appeal to the tribunal. The first was that A had “done something to double his housing costs” so reducing his maintenance. She objected to the standard 8 week deferment to absent parents. She alleged that A had fraudulently obtained a larger mortgage than he should have obtained had he declared his obligations to pay child support maintenance. The Secretary of State correctly pointed out to the tribunal that the last of these allegations was outside the jurisdiction of the tribunal, and I do not deal with it further. 

The tribunal decision 

4	The tribunal held an oral hearing of the appeal. C was present and represented by her husband. The Secretary of State was also represented. A was present with his partner. It recorded a decision on three points:

1	The effective date was 20. 9. 2000, not the earlier date in the Secretary of State decision.

2	A’s partner’s income was to be included in the assessment at a weekly figure of £100.82. 

3.	A’s housing costs were to be recalculated on the basis that he had a 25 year mortgage, and the mortgage interest payable at the effective date on such a term, and the increase in housing costs that occurred because A shortened his mortgage term from 25 years to 10 years was to be ignored.

The decision was supported by a full record of proceedings (since transcribed into type) and a full statement.  

Grounds of appeal 

5	A put in a lengthy statement of grounds of appeal.  One part is a comment that the chairman was not clear about the law, and that the secretary of state's representative could not or did not explain certain parts of the formal submission of the Secretary of State. Those are not grounds of appeal against the full decision of the tribunal.  The tribunal is not responsible for submissions of the Secretary of State or decision of the Secretary of State.  And the hearing was precisely in order to clarify the law and facts in issue. The advantage of the procedure of issuing a full statement (as here) is that it is that statement, and the stated view taken on the law after hearing all the submissions, on which the decision is judged if there is an appeal.  If the tribunal fails adequately to explain the decision it makes, then that is a ground for appealing against the decision. 

6	A also contends that the tribunal did not have enough evidence before it to take the decision taken. At the same time it is contended that the questions about A’s partner’s income were irrelevant. The grounds are supported by a restatement of A’s view of the issue of the 10 year mortgage, and also the reasons behind the financial decisions taken by A and his partner at the relevant time.  I read that as a contention that the tribunal misapplied the law on this issue.  

7	I granted leave to appeal on the issue of the 10 year mortgage. There was no challenge to the tribunal’s view of the effective date, and no substantive challenge about A’s partner’s income, so I do not consider those points further.

The submissions 

8	The secretary of state's representative supported A’s appeal.  The submission points out that the tribunal relied on “Schedule 3(1)(b) and paragraph 4(1)(a)” of the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 in making the decision about the housing costs. In the view of the secretary of state's representative, it was arguable that the tribunal did not fully consider the wording of those provisions. 

9	C put in a lengthy submission, restating her view of the relevant facts about the 10 year mortgage and rebutting the points made by C in the grounds of appeal.  She also raised a number of other issues that she saw as relevant to the overall assessment of maintenance for the children. Her view was that the tribunal decision was the only one that could be just and lawful.  The money was for the maintenance of the three children. 

10	A’s submission in response adopted the reasoning of the secretary of state's representative. A contended again that the sole reason for the shorter mortgage term was to secure possession of the home, a point ignored by the tribunal. A asked that what he termed C’s “emotional” submissions should be ignored. A also challenged C about her and her partner’s financial positions. 

11	A legal officer then directed that the attention of the parties be drawn to the Commissioners decision R(CS) 12/98 (previously CCS 11591 1995). This was about allowing the interest on a loan used to acquire a house, and discussed the meaning of “provision of a home”.  The secretary of state's representative however, took the view that R(CS) 12/98 did not assist in this case. But the point was stressed that the statutory test relevant here was the necessity of the incurring of the costs. A felt that the case helped his case, which he restated.  C did not agree. 

12	At one stage of the submissions parties had indicated that they would like an oral hearing of the appeal before I decided it. However, after reconsideration, the requests were withdrawn. As the background to the issue under appeal was discussed by all parties at the tribunal, and has now been focused by the submissions, I did not direct an oral hearing.  

Reducing the mortgage term

13	While the parties obviously have entirely different views of the motives behind A’s rearrangement of his mortgage, the key facts are not disputed. A completed a form for the local County Court about his income and expenditure on 5 June 2000. He stated that his mortgage payments were £254 a month. The court order drawn that day shows that the district judge dismissed the attachment of earnings order so that C could pursue her claim through the Child Support Agency. The mortgage loan was first made by a building society on 29 October 1998. It was a repayment mortgage with a 25 year term. On 1 July 2000 that term was shortened to 10 years. C applied for child support maintenance on 19 July 2000 and an enquiry form was sent to A on 26 July. When A completed the maintenance enquiry form on 21 August 2000 the monthly payment on the mortgage was £438.  The building society confirmed this in September 2000, showing that the monthly payment included £223 for capital repayment and £215 for interest. 

14	Schedule 3 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (the MASC Regulations) deals with eligible housing costs. The Schedule is made part of the MASC Regulations by regulation 14, but constitutes a self-contained set of rules together with regulations 15 to 18 of those regulations.  Under paragraph 1 of Schedule 3, the eligible costs that are or may be relevant in this case are “ the following payments in respect of the provision of a home… (b) amounts by way or mortgage interest …”.  Under paragraph 3(2) payments to reduce the capital secured by a mortgage or charge are eligible housing costs for the calculation of exempt income. 

15	 Paragraph 4 sets out the conditions applying to eligible housing costs. Paragraph (1) provides:

… the housing costs referred to in this Schedule shall be included as housing costs only where –

(a) they are necessarily incurred for the purpose of purchasing, renting or otherwise securing possession of the home for the parent and his family…

(b) the parent or, if he is one of a family, he or a member of his family, is responsible for the costs; and

(c) the liability to meet those costs is to a person other than a member of the same household.

Paragraph (3) provides:

… payments on a loan shall constitute an eligible housing cost only if that loan has been obtained for the purposes specified in paragraph (1)(a). 

16	R(CS) 12/98 is the only decision of a Commissioner on these provisions to date. The secretary of state's representative is right that the facts of this case and that are dissimilar. But the Commissioner usefully discusses the meaning of “provision of a home” in paragraph 1 of Schedule 3.  The Commissioner’s view of the meaning of “provision of a home” is as follows:

“9	I fully see that the provision of a home must mean something rather more than the mere initial acquisition. It must extent to take in matters which serve to preserve the home … But does it go further, and encompass acts done simply to consolidate, as distinct from initiate, the right to occupancy of the home?

10	It would seem to me that it is all a matter of degree. If a person has an unchallengeable right to the occupancy of a home, he has been provided with that home, and any unconnected action on his part resulting in the payment of mortgage interest is, as regards qualifying for housing costs (as that term is to be understood in the relevant provisions of the child support legislation) wholly unnecessary…”

The reference to “provision of a home” in paragraph 1 must be read subject to the conditions in paragraph 4. But the Commissioner’s decision emphasises that the issue is that the home is provided. Subsequent changes in the financial arrangements for that provision must be in respect of the provision, as well as meeting the other tests. The view taken by the tribunal in this case is entirely in accord with that view. 

Did the tribunal get the law wrong?

17	The tribunal’s reference to the MASC Regulations should, in my view, be correctly understood as references to Paragraphs 1(b) and 4(1)(a) of Schedule 3 to those Regulations. Those are precisely the provisions in point. The tribunal rejected an alternative submission to consider the point under the Departure Directions Regulations, and rightly so in my view. At paragraph 14 of the tribunal’s full statement, the tribunal considered the terms of paragraph 4(1)(a). The tribunal stressed the importance of the costs being incurred necessarily and also that the costs be incurred for the purpose of purchasing the home. The tribunal then states:

“On the evidence before me A asserts that the increased payments were to provide for his future in the event that some years down the line he could not longer go on working as a joiner and he would not then be able to afford the mortgage repayments had the term remained at 25 years. Some may say that his decision was prudent, others may say that it was overly cautious for who knows what the future may bring. The nature of his job may change, his back may not deteriorate to the extent he fears or indeed his circumstances may change for the better for any number of reasons. Suffice it to say that on the facts as I find them to be I am not satisfied that the increased payments were necessarily incurred within the terms of Schedule 3 paragraph 4(1)(a).”

18	Having heard the arguments of the parties at length, I am satisfied that the tribunal took a decision that it was fully entitled to reach on the evidence before it, and that it did not go wrong in law. R(CS) 12/98 emphasises that paragraph 4(1)(a) refers to “purchasing, renting or otherwise securing possession “ of the home.  The secretary of state's representative has rightly pointed out that in its reasoning the tribunal did not refer to the wording about “otherwise securing possession”. But I do not consider that this undermines the tribunal decision. The mortgage was taken out to finance the purchase of the house. When it was adjusted from 25 years to 10 years, it was still for the purpose of financing the purchase. There is no evidence of any immediate threat to possession from any third party.  As the tribunal observed, it is not as though the building society demanded a shorter term for some reason as an alternative to foreclosing.  The proposal to shorten the term came entirely from A and his partner. I therefore reject the submission of the secretary of state's representative that the tribunal erred in not finding facts about securing possession. That aspect of regulation 4(1) was not put in issue on the facts by the Secretary of State or any other party, nor is there any reason for the tribunal to consider it on those facts. 

19	Finally, did the tribunal adopt the right approach in ordering the recalculation of the maintenance on the basis stated (namely assuming that the mortgage still remained on a 25 year term). The secretary of state's representative made a submission on this point also, at my direction. It was submitted that A was obliged to pay the increased mortgage payments. But my attention was also drawn to Schedule 3 paragraph (6)(a) :

“For the purposes of sub-paragraphs (2) and (3), housing costs shall not include –

	(a) any payments in excess of those required to be made under or in respect
of a mortgage, charge or agreement to which either of those sub-paragraphs related;”

The tribunal had concluded that the mortgage was not necessarily changed to 10 years from 25 years.  The tribunal decision was that the payments to be taken into account were those relevant to a 25 year term only. I agree with the secretary of state's representative that paragraph (6) is relevant to this. It provides a full justification, in my view, for the decision of the tribunal given the facts it had found. If it was not necessary to shorten the term of the mortgage, then the higher mortgage payments were not required. The practical answer to the other point of the secretary of state's representative is, of course, that A and his partner could consider getting the period of the mortgage changed again. 

								David Williams
								Commissioner
								03 September 2002
[Signed on the original on the date shown]