CCS/1131/2005

DECISION OF THE CHILD SUPPORT COMMISSIONER

1.		My decision is that the decision of the tribunal is wrong in law.  I set aside the tribunal’s decision and refer the case for rehearing before a differently constituted tribunal.  

2.	This is an appeal by the parent with care, brought with the leave of Mr Commissioner Henty, from the decision of the tribunal allowing the non-resident parent’s appeal against a decision of the Secretary of State made on 19 August 2003, making a departure direction on the ground of the non-resident parent’s partner’s contribution to housing costs.  I held an oral hearing of the appeal on 20 March 2006 at which the parent with care appeared on her own behalf and Mr Leo Scoon, Solicitor, appeared on behalf of the Secretary of State.  The non-resident parent did not appear and was not represented.  

3.	The application by the parent with care for a departure direction, made on 5 June 2003, was based on the effect of the current assessment and was made on the grounds of diversion of income, life-style inconsistent with declared income, unreasonably high housing costs, partners contribution to housing costs and travel costs to be disregarded.   On 19 August 2003 the Secretary of State made a departure direction on the ground of the non-resident parent’s partner’s contribution to housing costs alone, determining that it was reasonable for the non-resident parent’s partner to pay 28% of his housing costs from 7 September 2002, and 34% of those costs from 2 November 2002.

4.	Following two letters challenging the Secretary of State’s decision, the non-resident parent appealed on 7 October 2003.  In his letters he referred to the costs which he expected to incur in connection with the baby which his partner was then expecting and the cost of buying clothes for his children on contact visits.  In his appeal form, he set out the travel costs of his contact visits.  Prior to the hearing of the appeal, a chairman gave careful directions, which included the following:

	“It is assumed that the only issue for the appeal is the degree to which the (non-resident parent’s partner) should contribute to her husband’s housing costs.  If that is not correct, any party who takes a different view is within 28 days to file…a schedule setting out the facts which they seek to assert and the arguments upon which they intend to rely at the final hearing.”

5.	The parent with care states that she was advised not to attend the hearing, and did not do so for that reason.  The tribunal reduced the decrease in exempt income by £20 per week to reflect contact costs, on the ground that it was just and equitable to do so under section 28F of the Child Support Act 1991, having regard to regulation 30 of the Departure Direction and Consequential Amendments Regulations 1996 (“the 1996 Regulations”).   The statement of reasons gives the following reasons for that decision:

	“In the submission at p75 there was a letter from the appellant referring to the costs to be incurred for the baby then “on the way”, travel costs for contact and the costs he had incurred in clothing his children at contact.  This was confirmed in evidence.  In considering the above mentioned statutory provisions, the tribunal took no account of expenditure actual or anticipated in respect of the baby or the travel costs associated with contact.  That is a matter that can be considered in the context of a departure application which it is for the appellant to make if he so decides.  However, the tribunal decided to accept what the appellant said with regard to other costs and to reflect this in the reduction given above.   The respondent did not attend the hearing but was aware from the submission of the assertions made by the appellant in the letter but made no comment.”

6.	The parent with care appealed on the grounds, among others, that she had understood that the only issue to be considered at the hearing was the extent of the non-resident partner’s contribution to housing costs.  The Secretary of State supports the appeal on the ground that the non-resident parent did not have an opportunity of challenging the evidence with regard to contact costs, and I agree that the appeal must be allowed on that ground.  Although the directions given by the tribunal chairman prior to the hearing gave warnings to the parties as to the possible effect of non-attendance, I agree that any party reading the direction set out above would be entitled to assume that the scope of the hearing would be limited to the extent to which the non-resident parent’s partner should contribute to his housing costs.  While it may be true that technically that issue embraced the question of whether it would be just and equitable to reduce the decrease in exempt income to reflect contact costs, I agree with the Secretary of State’s representative that any ordinary person reading the direction could not reasonably be expected to realise that the non-resident parent’s contact costs might be relevant to the amount of a departure direction on the ground of partner’s contribution to housing costs.  I therefore consider that there was an unfairness in the way in which the proceedings were conducted and that, accordingly, the tribunal’s decision is wrong in law.  I therefore set the decision aside.

7.	It then becomes necessary to consider whether the tribunal were, in fact, entitled to alter the amount of the departure direction to take account of contact costs.  In  granting leave to appeal, the learned Commissioner raised the question of whether the “just and equitable” provisions confer a power to adjust the end figures for exempt income of a departure direction under regulation 27 of the 1996 Regulations to reflect contact costs, and,  on that basis, the Commissioner queried whether the tribunal erred in law by adding back £20 to the exempt income figure.  The Commissioner also raised the question of the relevance of regulation 40(7) of the 1996 Regulations.

8.	In a written submission dated 10 June 2005, the Secretary of State submitted that the tribunal was entitled to take into account contact costs when determining the amount of a departure direction under regulation 27 of the 1996 Regulations on the basis of the decision of Mr Commissioner Jacobs in CCS/3543/98.  In that case the Commissioner held that the “just and equitable” requirement is not a final step to be applied when all the other requirements for a departure direction have been considered, but is to be considered at the same time as any discretion which must be exercised when deciding whether the requirements for the departure direction have been satisfied.  At the oral hearing, Mr Scoon substantially maintained that position.

9.  In Horton v Sadler [2006] 2 WLR 1346 Lord Hoffmann said ( at p.1361 E) that it was with a “reluctance verging on disbelief” that he was driven to conclude that the deliberate opinions of Lord Wilberforce and Lord Diplock in Walkley v Precision Forgings [1979] 1 WLR 606 were wrong, and it is in much the same spirit that I venture to express my doubts about the approach taken by Mr Commissioner Jacobs in CCS/3543/98.  However, section 28F(1) of the Child Support Act 19991 confers power to give a departure direction where the case falls within one or more of the specified cases (paragraph (a)) and (my emphasis) it is just and equitable to give a departure direction (paragraph (b), and in my view the structure of the subsection strongly suggests that the requirements that the case falls within one of the specified categories, and that it is just and equitable to give a departure direction, are separate and cumulative.

10.  It seems to me that many of the matters to be taken into account in considering whether it is just and equitable to make a departure direction may be difficult to take into consideration at the stage of deciding whether the conditions for the making of a departure direction are satisfied. For example, a departure direction can be made under regulation 27 of the 1996 Regulations if it is reasonable for the non-applicant’s partner to contribute to the non-resident parent’s housing costs.  In making that decision, regard must of course be had to what is just and equitable, but at that stage the main focus of the inquiry will inevitably be on the circumstances of the non-applicant and his (or her) partner.  However, when considering whether it is just and equitable to give a departure direction, section 28F(2)(b) of the 1991 Act requires regard to be had to the financial circumstances of the parent with care.  Although it may be perfectly possible to conclude that it is reasonable for the non-applicant parent’s partner to contribute to housing costs on the basis that they both contribute to the household’s income, it may also be possible to conclude that it is nevertheless not just and equitable to give a departure direction if, for example, the parent with care has just won the first prize in the National Lottery.

11.  The Commissioner in CCS/3543/1998 considered that to separate the discretions which have to be exercised when deciding whether the conditions for a departure direction are satisfied and the discretion which must be exercised when deciding whether it would be just and equitable to give a departure direction was “analytically unattainable”. However, in my view, the restricted scope of some of the discretionary matters which have to be considered when deciding whether the conditions for the making of a departure direction have been satisfied make it analytically much more difficult to take into account the very broad range of matters which may have to be considered when deciding whether it is, in fact, just and equitable for the direction to be given.  I consider that the purpose of the “just and equitable” provision is to give decision makers a very broad discretion to take into account matters which affect the fairness of the decision whether to make a departure direction and which may not have been taken into account when deciding whether the conditions for the making of a direction were satisfied.  If that is correct, then the just and equitable requirement must be considered as a separate and additional stage in the determination.  

12.  I have, however, come to the conclusion that it is not necessary for me to pursue my doubts about CCS/3543/1998 to the point of dissent because it seems to me that the real question in this case is not the stage in the adjudication process at which contact costs can be taken into account under the just and equitable provisions, but whether they can be taken into account at all.  If they can be taken into account, then it seems to me to be immaterial whether the just and equitable provisions operate so as to modify the effect of regulation 40(7), in accordance with the approach in CCS/3543/1998, or whether they come into play after regulation 40 has been applied so as to modify the overall effect of the direction.  However, since regulation 14 of the 1996 Regulations makes specific provision for an absent parent to apply for a departure direction in respect of contact costs, it seems to me to be necessary to consider whether a departure direction should be modified under the “just and equitable” provisions so as to benefit a parent who has not availed himself of  its provisions.  

13.	I consider, however, that in applying the “just and equitable” provisions, regard can be had to matters for which specific provision is made elsewhere in the child support scheme. Under section 28F(2)(a) of the Child Support Act 1991, regard must be had to the financial circumstances of the absent parent concerned.  In deciding what is just and equitable, it will no doubt be relevant to consider why a party has not taken advantage of a procedure which was available to that party to reduce his or her maintenance liability.  The broad discretion conferred by the “just and equitable” provisions should not be used in such a way as to create an alternative child support scheme, and it will therefore be relevant to consider in this case why the non-resident parent did not apply for a departure direction under regulation 14.  However, there seems to me to be no reason to restrict the scope of section 28F, and in so far as contact costs have an overall impact on the financial circumstances of the non-resident parent, there seems to me no reason why regard should not be had to that impact under section 28F(2).

14.	Since the absent parent did not attend the hearing before me, I have not been in a position to make the findings of fact which are necessary to determine this appeal.  I therefore refer the case for rehearing before a differently constituted tribunal.  Both the absent parent and the non-resident parent should attend the hearing so that the tribunal can resolve the dispute between them with regard to contact costs, the necessity for the absent parent to provide clothing on contact visits and the other matters which have been raised by the parent with care, in so far as they are relevant to the exercise of the tribunal’s discretion under section 28F of the 1991 Act.

15.	For those reasons, my decision is as set out in paragraph 1.

	

	(Signed)	E A L Bano
		Commissioner
	
	(Date)	5 July 2006