[2007] UKSSCSC CSCS_20_2006 (20 July 2007)

DECISION OF CHILD SUPPORT COMMISSIONER

1.	My decision is that the decision of the tribunal given at Edinburgh on 1 September 2006 is erroneous upon a point of law.  I set it aside.  I make the decision I consider is appropriate under reference to the findings in fact noted below.  It is that the decision of the Secretary of State, which was intimated in a letter to the appellant at pages 12 – 14 is also erroneous in law, inept and of no effect.  It is set aside.  The matter is referred to the Secretary of State to consider whether, under and in terms of section 28J of the Child Support Act 1991 and the Child Support (Voluntary Payments) Regulations 2000, the payments by the appellant to the security holder of mortgage payments in respect of the second respondent’s home during the period 6 August 2003 until 11 February 2005 were voluntary payments.  In doing so, he should consider whether to make an invitation to a relevant person under reference to regulation 2(2) of the Child Support (Voluntary Payments) Regulations 2000 to make representations thereon.  In carrying out this exercise, he is directed to make a determination whether he agrees to the payments having been made to the security holder and whether he accepts that such payments , if he reaches the view that they were voluntary, were made under and in terms of s.28J(4) of the Child Support Act 1991.  Thereafter, the Secretary of State must make a decision on the appellant’s application under section 28G of the Act.

2.	This appeal came before me for an oral hearing on 21 June 2007.  The appellant, who is the father, represented himself.  The first respondent is the Secretary of State, who was represented by Mr Brodie, Advocate, instructed by Mr Brown, Solicitor, of the Office of the Solicitor to the Advocate General.  The second respondent, who is the mother, was represented by Mr Fotheringham, Solicitor, of Fyfe Ireland, Solicitors.  The appeal was adjourned at Mr Brodie’s request until 12 July 2007 when the hearing continued.  On this occasion, Mr Fotheringham did not appear and the second respondent was represented by a paralegal from his firm, Miss Fordyce.

3.	The appellant has appealed to the Commissioner against the decision of the tribunal.  The tribunal allowed an appeal by the second respondent against the decision of a decision maker who, in the calculation of child support maintenance on an application under section 28G for a variation, found that for the period 6 August 2003 until 28 March 2006, he had no arrears, as the payments by the appellant in respect of the second respondent’s mortgage for the period had been classed as voluntary payments.  The tribunal found that they were not voluntary payments.  Their decision was as follows:

“Appeal is allowed.

The payments made by [the appellant] were not ‘voluntary payments’ under section 28J of the Child Support Agency Act 1991 in that they were not on account of child support maintenance but rather to discharge a liability to pay a capital sum to [the second respondent] under their separation agreement.”

4.	The papers in the appeal before me are somewhat incomplete.  However, I managed to ascertain from the parties the following facts.  The second respondent had made an application for a maintenance calculation in respect of a qualifying child in 2003.  A calculation was made in terms of s.11 of the Child Support Act 1991 on 12 February 2005 in the sum of £23 per week.  The effective date was 4 September 2003.  Thereafter, the appellant made an application for a variation of the maintenance calculation.  The basis upon which the application for variation under s.28G of the Child Support Act 1991 was made was that he had been making voluntary payments.  It was that application which gave rise to the decision which was appealed against to the tribunal.  The only record of that decision is to be found in a letter to the appellant recorded at page 12 – 14.  In that letter, it is said inter alia:

“PAYING CHILD MAINTENANCE

We wrote to you recently about the amount of child maintenance you must pay to [the second respondent] for [child A].  
We have considered all parties’ views on how you should pay.  We have decided that you should make your payments to the Agency by standing order every month from 01/05/06.
If you want to give us any further information that could affect this decision, please let us know.

ARREARS DUE

Your arrears are from 06/08/03 to 28/03/06 at £30.50 per week.  The total arrears for this period are £4,209.00.  However, as you have paid [the second respondent’s] mortgage for this period these have been classed as voluntary payments.  The arrears due are now £0.00.”

5.	It is important, when considering the appeal that has been made to the Commissioner, to have regard to the relevant legislative provisions.  

6.	Voluntary payments are provided for in the scheme by s.28J of the Child Support Act 1991.  That statutory provision is in the following terms:

“(1) This section applies where‑
(a) a person has applied for a maintenance calculation under section 4(1) or 7(1), or is treated as having applied for one by virtue of section 6;
(b) the Secretary of State has neither made a decision under section 11 or 12 on the application, nor decided not to make a maintenance calculation; and
(c) the non-resident parent makes a voluntary payment.
(2) A ‘voluntary payment’ is a payment- 	
(a) on account of child support maintenance which the non-resident parent expects to become liable to pay following the determination of the application (whether or not the amount of the payment is based on any estimate of his potential liability which the Secretary of State has agreed to give); and	
(b) made before the maintenance calculation has been notified to the non-resident parent or (as the case may be) before the Secretary of State has notified the non-resident parent that he has decided not to make a maintenance calculation.

(3) In such circumstances and to such extent as may be prescribed- 	
(a) the voluntary payment may be set off against arrears of child support maintenance which accrued by virtue of the maintenance calculation taking effect on a date earlier than that on which it was notified to the non-resident parent;	
(b) the amount payable under a maintenance calculation may be adjusted to take account of the voluntary payment.
	
(4) A voluntary payment shall be made to the Secretary of State unless he agrees, on such conditions as he may specify, that it may be made to the person with care, or to or through another person.
	
(5) The Secretary of State may by regulations make provision as to voluntary payments, and the regulations may in particular-  	
(a) prescribe what payments or descriptions of payment are, or are not, to count as ‘voluntary payments’;	
(b) prescribe the extent to which and circumstances in which a payment, or a payment of a prescribed description, counts.”
	
The regulations made under subsection (5), insofar as material, are continued in regulations 2 and 3 of the Child Support (Voluntary Payments) Regulations 2000 and are in the following terms:

“2.‑(1)  A payment counts as a voluntary payment if it is‑ 
(a)	made in accordance with section 28J(2) and (4) of the Act;
(b)	of a type to which regulation 3 applies;
(c)	made on or after the effective date of the maintenance calculation made, or which would be made but for the Secretary of State’s decision not to make one, and for this purpose ‘effective date’ means the effective date as determined in accordance with the Child Support (Maintenance Calculation Procedure) Regulations 2000; and
(d)	a payment in relation to which evidence or verification of a type to which regulation 4 applies is provided, if the Secretary of State so requires.
(2)	Where the Secretary of State is considering whether a payment is a voluntary payment, he may invite representations from a relevant person.

Types of payment

3.	This regulation applies to a payment made by the non-resident parent‑
(a)	by any of the following methods‑
[No issue arises in respect of the method of payment.]

…

(b)	which is, or is in respect of,‑
…
(ii)	a mortgage or loan taken out on the security of the property which is the qualifying child’s home where that mortgage or loan was taken out to facilitate the purchase of, or to pay for essential repairs or improvements to, that property;
…”

7.	In the appeal before the tribunal the sole issue they directed themselves to was whether the undoubted payments made by the appellant in respect of the second respondent’s mortgage following upon their separation and an agreement dated 7 April 1999 set out at pages 17 – 22 following that separation, for the period 6 August 2003 to 28 March 2006, were voluntary payments in terms of the Act.  As will be seen from my disposal of this appeal, I consider that this approach was too simplistic, and by adopting it they erred in law.  I am not satisfied that the Secretary of State has made a proper decision as to whether there was a voluntary payment, and the tribunal fell into error when determining the appeal on the decision pursuant to the application under section 28G..  For the sake of brevity, my reasoning for this is contained in the part of my decision where I deal with the disposal of this appeal; I refer to paragraphs 12 – 14.  I will, however, deal with the issue the tribunal directed itself to first.

8.	The Secretary of State, in the letter sent to the appellant, had stated that the payments were voluntary payments.  However, before the tribunal he performed a complete volte face, did not support his own position and maintained that the payments in respect of the mortgage were not voluntary payments.  The tribunal, in approaching the appeal before them, went straight to the question as to whether the payments following the separation in respect of the claimant’s mortgage were voluntary payments by dealing only with the question as to whether that part of the definition of “voluntary payment” contained in section 28J(2)(a) was satisfied..  

9.	As can be seen from the terms of the tribunal’s decision, they took the view that it was not.  The tribunal said:  

“12.	The key question, therefore, is whether the payments under discussion were ‘made in accordance with section 28J(2) of the (1991) Act’.  In particular, section 28J(2)(a) lays down the fundamental condition for payment to be treated as a ‘voluntary payment’ under the version of the Child Support Scheme applicable to the parties in the present appeal.  That fundamental condition is that a payment in question ‘is a payment … on account of Child Support maintenance which the non-resident parent expects to become liable to pay’.  At the oral hearing, [the second respondent] submitted strongly that the payments in this case were not such payments.  Rather, she said, they were payments made under legal obligation which was owed to her personally and not to the children to provide her with a home on the separation of the parties.  That legal obligation rested on a contract freely entered into by [the appellant] and herself.  Further, she stated that they were essentially a substitute for a lump sum capital payment which could not actually be made due to the nature of [the appellant’s] capital assets which were mainly in the form of pension policies.  The presenting officer departed from the view taken by the decision maker and supported [the second respondent’s] position.  He invited me to allow the appeal on essentially the same arguments as those advanced by [the second respondent].

13.	After careful consideration I agree with the contentions of [the second respondent] and the presenting officer.  I have sought to read the Separation Agreement as a whole and not to concentrate on any one clause.  Doing that, however, I take the view that it is clear that clauses 31-36 are a distinct part of the agreement.  That part of the agreement relates to the provision of housing primarily for [the second respondent] herself and not directly for the children.”

10.	The appellant and the second respondent were not married to each other.  After their separation, they entered into the agreement referred to above which regulated a distribution of the capital held by them and made provision in respect of the children.  Apart from the division of capital, which was jointly owned by both parties to the agreement, the appellant obligated himself by contract to make provision which otherwise he was not bound by law to do.  It was his submission that what determined the settlement was that the children would be cared for on a shared 50/50 basis, that they would have an equivalent standard of accommodation when they were living with their mother as when they lived with him, that their schooling would not be disrupted by their having to change schools and that their two homes would be within reasonable distance of each other and the school attended by the children.  Whilst he indicated that he had perhaps not put the matter as succinctly or as clearly before the tribunal as he had to me today, these were issues which were raised in respect of the intention of the agreement by him.  He submitted that no reference to his contentions had been made.  The tribunal, in determining the appeal, had looked at the construction of the document itself and the intentions behind the document as expressed by the second respondent.  The effect of his submission was that the reasons given by the tribunal for their decision were defective, as they had not dealt with his contentions, and that, accordingly,  they had erred in law on these grounds.

11.	The matter was material in respect that it was accepted by both Mr Brodie and Miss Fordyce that, for the purposes of determining whether s.28J(2)(a) of the Act and regulations 2 and 3 (b)(ii) of the relevant regulations were satisfied, the tribunal were not restricted to consideration of the terms of the agreement alone but could have regard to the evidence as to underlying intentions given by the parties.  Indeed, the tribunal had had regard to the second respondent’s evidence as to intention.  It was accepted by Mr Brodie that at page 41 there is a reference in the record of proceedings, which is difficult to read, to the evidence by the appellant of the intention of providing a roof over the children’s heads.  It was, however, submitted by him and Miss Fordyce, the latter under reference to R(A)1/72,  that the tribunal’s reasoning was sufficient.  I find myself in disagreement with these submissions.  It does seem to me that the appellant’s position in relation to the intentions behind the agreement expressed to the tribunal were pertinent to the question as to whether the payment was one which fell within the parameters of s.28J(2)(a), as indeed were those of the second respondent.  Whether the appellant’s evidence was such that, if accepted, that it would or could have satisfied the statutory provision, I do not know, due to the illegibility of the record of proceedings.  It should, however, have been dealt with by the tribunal and it was not.  

12.	In respect of the disposal of the appeal, it was Mr Brodie’s submission that the case should be remitted to the Secretary of State rather than to a freshly constituted tribunal.  I accept that approach is appropriate for reasons which will become apparent.  The Secretary of State in his decision on the application under S.28G appealed against to the tribunal, made the variation on the basis that the appellant in this appeal had made voluntary payments but he included in that determination a period subsequent to the making of the maintenance calculation on 12 February 2005 under s.11 of the Act.  By virtue of s.28J(2)(b), the payment of the mortgage from 12 February 2005 until 28 March 2006 could not be a voluntary payment.  That was accepted by the appellant.  Thus, the variation for the latter period could not and should not have been made, as it was incompetent to do so.  In addition, the payments during the period 6 August 2003 until 11 February 2005 were made to the security holder and not the Secretary of State.  In terms of s.28J(4), a voluntary payment requires to be made to the Secretary of State unless he agrees that it may be made through another person. That approach is consistent with the whole scheme of the Act, which provides for payments to be made through the Secretary of State rather than directly from one parent to another or through a third party. In terms of regulation 2(1)(a) of the Voluntary Payments Regulations, a payment counts as a voluntary payment if it is made in accordance with section 28J(2) and (4).  Thus, the agreement of the Secretary of State to the payments being made to the security holder is an essential ingredient of the payment being a “voluntary payment”.  The appellant sought to persuade me that the letter sent to him on 5 September 2003, recorded at page 105, contained that agreement.  What is said in that letter is as follows:

“You can make voluntary payments until we work out how much you should pay.  This will avoid the amount you have to pay building up.  We can collect and pass on these payments, or you can pay them straight to the parent with care.

We may consider certain costs you pay towards a child’s home as voluntary payments, for example, mortgage or fuel bills.

We will ask for proof of any payments you make.  Please contact us if you want more information about this.”

In my view, the terms of this letter do not import agreement by the Secretary of State that the specific payments made by the appellant to the security holder had his agreement.  It goes no further than saying that the Secretary of State “may consider” certain costs, such as mortgage payments, as voluntary payments.  The mischief in this letter is that it does not specifically invite the appellant to seek such agreement.  If it had done so, and the appellant had taken up the invitation, and the Secretary of State had invited representations from the appellant and second respondent, the matter could have been properly determined at that stage.  The Secretary of State may wish, in these circumstances, to reflect on the terms of what is clearly a pro forma letter to avoid the difficulties which have arisen in this case in future cases.  The appellant and the second respondent were placed at a disadvantage as a result of the approach taken by the Secretary of State

13.	Mr Brodie sought to persuade me that the letter intimating the decision appealed against to the tribunal implied that such agreement had been given.  This was on the basis that, by making the decision on the basis that there were voluntary payments, the agreement of the Secretary of State could be inferred.  I am not prepared to accede to that submission either.  The fact that the Secretary of State presented a volte face to the tribunal is not indicative that he had given his agreement to the payments being made to the security holder.  There was no record produced to me of such a decision ever having been made.  The documents at pages 12 – 14 and 105 do not, on the face of them, demonstrate such agreement was specifically given.  I am not satisfied that there was.  The agreement of the Secretary of State has not been established and a valid decision by the Secretary of State in respect of voluntary payments has not been made. Thus, there was no valid basis for the variation which gave rise to the decision appealed against to the tribunal.  The tribunal, by not addressing this central issue, in my view, erred in law.

14.	I should add that Miss Fordyce sought to persuade me that the Secretary of State’s consent could not be granted retrospectively.  This submission was made on the basis that the language of the relevant statutory provisions is in the present tense.  I was, however, referred to what was said by Mr Deputy Commissioner Gamble in CCS/3864/2005, and I am persuaded, with the caveat that follows, by his reasoning at paragraph 7 and 8.  I consider that the Deputy Commissioner was wrong to say that the decision on voluntary payments could be taken by a tribunal or the Commissioner standing in the shoes of the Secretary of State.  The reason why I have taken the view that the case requires to be remitted to the Secretary of State rather than a tribunal is that the agreement of the Secretary of State that payments could be made to someone other than himself, could be not given by an appeal tribunal or a Commissioner standing in the shoes of the tribunal, as such agreement is an administrative not a judicial decision which does not fall within the scope of the statutory rights of appeal to a tribunal under the Child Support Act 1991.  What prompted the appeal was a decision on the appellant’s application for variation.  That application was successful upon the basis of the purported acceptance by the Secretary of State that the appellant had been making voluntary payments.  The decision on the application is appealable.  However, as indicated, there is no effective decision that the appellant had made voluntary payments.  In these circumstances, I have made the decision I have in paragraph 1.

15.	The appeal succeeds.

					(signed)
					D J MAY QC
					Commissioner
					Date:  20 July 2007