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Home > Judgments > 2015 archive

NG v Sec of State for Works & Pensions and Another (Child support: receipt of benefit) (CSM) [2015] UKUT 20 AAC

Successful appeal brought by a father concerning the interplay between child benefit and liability for child support

The father successfully appealed a decision of the First-tier Tribunal in respect of the date upon which his liability to pay child support for his daughter ceased. The father's case at first instance was that his daughter had finished full-time education on a date earlier than asserted by the mother and the mother had fraudulently claimed child benefit during this period.

The appeal succeeded because it was accepted that there had been an error on a point of law. The appellate tribunal (the Upper Tribunal), which has an inquisitorial jurisdiction, identified that the First-tier Tribunal had concluded that it was bound by HMRC's decision as to the end date of the child benefit award and that accordingly the HMRC decision determined the child support decision.  This was not the correct test. The proper test is set out in JF v Secretary of State for Work and Pensions (SSWP) [2014] AACR 3 (also known as CCS/506/2012), namely it is not whether child benefit had actually been paid but if child benefit was "properly or lawfully payable".

In considering this issue it was accepted that the father had no way to challenge the HMRC decision on child benefit even though it had a direct bearing on his child support liability. Therefore, the First-tier tribunal should have considered whether to invite HMRC to be joined as a party or whether the Agency (previously the Child Maintenance and Enforcement Commission) should have been directed to obtain further specified information from HMRC on the issue.

The Upper Tribunal made no observations on the facts of the case but set aside the decision of the First-tier tribunal and remitted the case to be re-heard by a different First-tier Tribunal.

Case summary by Alison Easton, barrister, Coram Chambers


_________________


DECISION OF THE UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)

The DECISION of the Upper Tribunal is to allow the appeal by the Appellant ("the father"). The decision of the Stoke-on-Trent First-tier Tribunal dated 16 October 2013 under file reference SC049/12/01902 involves an error on a point of law. The tribunal's decision is therefore set aside.

The Upper Tribunal is not in a position to re-make the decision on the father's appeal against the decision of the Secretary of State dated 12 November 2010. It therefore follows that his original appeal against the Secretary of State's decision is remitted to be re-heard by a different First-tier Tribunal, subject to the Directions below.

There is to be no publication of the confidential annex to this decision (beyond the parties and HMRC) or of any matter likely to lead members of the public to identify the persons mentioned therein.

This decision is given under section 12(2)(a) and (b)(i) of the Tribunals, Courts and Enforcement Act 2007 and rule 14 of the Tribunal Procedure (Upper Tribunal) Rules 2008.

DIRECTIONS

The following directions apply to the re-hearing:

(1) The re-hearing should be at an oral hearing.

(2) The new tribunal should not involve the District Tribunal Judge who sat on the last tribunal on 16 October 2013.

(3) If either parent has any further written evidence to put before the tribunal, this should be sent to the regional office of HM Courts and Tribunals Service in Birmingham, within one month of the issue of this decision. Such evidence will have to relate to the position as it was at the time of the Agency's original decision under appeal.

(4) A copy of the submission to the Upper Tribunal by Mr Kevin O'Kane, the Secretary of State's representative, dated 05 November 2014 (docs 140-149 of the Upper Tribunal file), should be provided to the next tribunal. 

(5) The Secretary of State should be represented at the new hearing by a presenting officer.

(6) A copy of this Upper Tribunal decision should be sent to HMRC. Within one month of this decision being so sent, HMRC should inform the First-tier Tribunal's Birmingham Appeals Service Centre office whether it wishes to be joined as a party to the appeal.

(7) The District Tribunal Judge responsible for making listing directions for the re-hearing should consider (1) whether HMRC should be joined as a party to the appeal and/or (2) whether HMRC should be required to produce documents in accordance with rule 16.

(8) The new tribunal must consider all the evidence afresh and is not bound in any way by the decision of the previous tribunal. 

These directions may be supplemented as appropriate by later directions by a District Tribunal Judge in the First-tier Tribunal (Social Entitlement Chamber).
 
REASONS FOR DECISION

The Upper Tribunal's decision in summary
1. I allow the father's appeal to the Upper Tribunal against the decision of the First-tier Tribunal. The decision of the First-tier Tribunal ("the Tribunal") involves an error on a point of law. The Tribunal's decision is therefore set aside as having no effect.

2. Unfortunately the Upper Tribunal is not in a position to re-make the original decision under appeal. It follows that there will need to be a fresh hearing in Stoke (or other convenient venue) of the father's original appeal against the Agency's decision, but before a different tribunal.

3. It is important that both parents understand the scope of this decision by the Upper Tribunal. I repeat that my ruling is that the Tribunal's decision involves an error of law. It may be that the last Tribunal came to the correct decision on the facts. That remains to be seen and will be decided by the new Tribunal in Stoke (or wherever).

The parties to this appeal
4. For convenience I refer to the three parties in this case as simply the father, the mother and the Secretary of State. The father is the non-resident parent and is the Appellant before both the Tribunal and the Upper Tribunal. The mother is the parent with care and technically the Second Respondent. The Secretary of State is the First Respondent but sometimes I refer to the Secretary of State (previously the Child Maintenance and Enforcement Commission) as just "the Agency".

The father's application for an oral hearing of the appeal to the Upper Tribunal
5. The father has asked for an oral hearing of his appeal before the Upper Tribunal. Neither the mother nor the Secretary of State's representative has requested such a hearing. I have considered all parties' views under rule 34 of the Tribunal Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698; "the UT Rules"). I refuse the father's application for an oral hearing of the appeal before the Upper Tribunal for the following reasons.

6. First, it is important to realise that the Upper Tribunal's role is confined to correcting the tribunal below on issues of law (see also paragraph 3 above). It is not the job of the Upper Tribunal to embark on a further investigation of the facts of the case.

7. Second, an oral hearing before the Upper Tribunal is both unnecessary and disproportionate. It would cause further delay and inconvenience, in a case which has certainly suffered more than its fair share of delay with the stress that causes to all concerned. Both parents will, of course, have the opportunity, as is just and fair, to have their say at a re-hearing before a differently constituted tribunal as a result of my decision.

8. In that context I remind both parents of the wise words of District Tribunal Judge Thomas who heard this appeal at the Tribunal. The final note on his record of proceedings – which, I have to say, is legible, whatever the father says – was as follows:

"J[udge]: I'm not prepared to listen to comments about one another unless relates to the appeal and the law."

The issue on the appeal to the First-tier Tribunal
9. There is quite a long history to this matter. The relevant chronology is helpfully set out by Mr Kevin O'Kane, the Secretary of State's representative, in his written submission to the Upper Tribunal dated 05 November 2014 (docs 140-149 of the Upper Tribunal file; see especially at paragraph [5]). I need not repeat it here in any detail.

10. The fundamental issue in this case was the correct date on which the father's liability to pay child support for his daughter Connie ended. The Agency's decision of 12 November 2010, which was the decision under appeal to the Tribunal, was that the case was closed and so his liability ended on 1 September 2010.

11. The father's argument all along has been that she finished full-time education at an earlier date. He has alleged that the mother was fraudulently claiming child benefit for a period. The father did not actually state in his letter of appeal when he thinks the CSA case should have been closed. However, from correspondence between the Agency and his MP, the father's case appears to be that the case should have been closed in January 2010.

12. The mother's case, naturally, is that she was properly in receipt of child benefit for Connie at all material times and that the father's case is completely without merit. She is understandably frustrated at how this matter has dragged on for so long and seeks closure.

The First-tier Tribunal's hearing and decision
13. District Tribunal Judge Thomas heard the father's appeal on 16 October 2013 at the Tribunal in Stoke. Both parents attended. The Agency was also represented. The Judge kept a clear and full record of proceedings. The Tribunal issued a short Decision Notice on the Day, confirming the Agency's decision and dismissing the father's appeal. The Judge recorded that the last payment of child benefit had been for the week ending 30 August 2010 and the child support case was properly closed from the effective date of 1 September 2010.

14. The Tribunal later issued an extended Statement of Reasons. The Judge set out the factual background with care along with the parties' arguments. He made a finding of fact about the last date for which child benefit was actually paid, a finding that was plainly open to him and correct on the evidence. The key reasoning for his decision is contained in paragraph [8] of the statement of reasons. In effect, the Judge regarded himself as bound by the HMRC decision as regards payment of child benefit.

15. The father then appealed to the Upper Tribunal.

The proceedings before the Upper Tribunal
16. I gave the father permission to appeal. In doing so, I commented as follows:

'The father's grounds of appeal in this case
5. This is an application by the father for permission to appeal against the FTT's decision dated 16 10 2013. The issue, in a nutshell, was whether the correct date (01 09 2010) had been identified by the Agency as the date to close the child support assessment. The father's argument, in short, is that his daughter had not been attending college full-time and so an earlier closure date should have been selected. The FTT took the view, in essence, that it was bound by HMRC's decision as to the end-date of the child benefit award, and that that HMRC decision accordingly determined the child support decision.

6. Not all of the father's argument are persuasive. For example, he argues that the FTT referred to counter-evidence presented by the mother which he did not have access to. This ground seems to be based on a misunderstanding. The FTT said that the mother had "provided written information which counters this contention" (i.e. the father's contention). However, the tribunal bundle, presumably available to all parties, includes the mother's response to the appeal (letter 14.02.2013, p.35) and her e-mail of 04.10.2013 (p.96). Those documents were plainly evidence, just as the mother's statements at the hearing were. What the FTT made of them is a matter for the tribunal below.

7. This is an inquisitorial jurisdiction, meaning that I can raise other points where relevant. The main reason I am giving permission to appeal is because the FTT may not have taken account of my decision in JF v Secretary of State for Work and Pensions (SSWP) [2014] AACR 3 (also known as CCS/506/2012). A copy of that decision should be added to the file for this appeal. I held there that "payable" in this context means "properly or lawfully payable".'

17. Mr O'Kane, on behalf of the Secretary of State (for the Agency) has provided a detailed written submission on the father's appeal. He supports the appeal to the Upper Tribunal on the legal issue involved (he makes no comment on the merits of the case on the actual facts). His argument can be summarised thus: the Tribunal should have considered whether child benefit was properly or lawfully payable, not simply whether it was actually paid. However, the father had no way of challenging the HMRC decision on child benefit, even though it had a direct bearing on his child support liability. Accordingly, the Tribunal should have considered whether to invite HMRC to be joined as a party to the appeal or directed the Agency to obtain further specified information from HMRC on the issue. To that extent the Tribunal had erred in law.

18. Both parents have also made further written submissions which I have taken into account. Understandably they both refer to the factual merits of the dispute rather than address this legal issue.

The Upper Tribunal's decision and directions for the re-hearing
19. I agree with the careful analysis of Mr O'Kane. I adopt his reasoning. It follows that the Tribunal's decision involves an error of law for the sole reason identified above in paragraph 17. I therefore set aside the Tribunal's decision. The case will have to go back for a fresh hearing before a new Tribunal at an appropriate local venue. It is to be hoped that this can be arranged as soon as possible, given the considerable delays that the parents have already had to endure.

20. The new Tribunal must decide the father's appeal against the Agency's decision of 12 November 2010 afresh. It is not bound by any of the findings of the previous Tribunal. It may come to the same ultimate decision on the facts or a different decision.

21. A copy of the helpful submission to the Upper Tribunal by Mr O'Kane should be made available to the next Tribunal, as it will doubtless assist the Tribunal in its analysis.

22. The District Tribunal Judge responsible for making listing directions may also wish to consider whether to make further directions to ensure that the relevant information is obtained from HMRC. There are a number of ways in which this might be done, each of which has its own pros and cons. Indeed, there are at least three possibilities.

23. The first is that HMRC is invited to become a party to the appeal. The advantage of this course of action is that HMRC will have all the rights of a party and indeed be subject to the duty under rule 2(4) of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (SI 2008/2685; "the SEC Rules") to help the Tribunal further the overriding objective and to co-operate with the Tribunal generally. However, it is difficult to contemplate circumstances in which a person or body such as HMRC can be joined as a party to an appeal against their wishes.

24. The second is that, even if HMRC does not have party status, the Tribunal may direct HMRC to produce relevant documentation. The Tribunal has wide powers to do so where e.g. documents "relate to any issue in the proceedings" (see SEC Rules, rule 16(1)(b)).

25. A third possibility (an indirect version of the second option) is that the Tribunal directs the Agency to obtain further specified information from HMRC. The Agency may well have official channels to obtain data from HMRC. However, a possible disadvantage of this route is that it may increase delays, especially if queries are raised by HMRC which then have to be directed back to the Tribunal via the Agency rather than directly.

26. In order to try and reduce the delays in this case, I make the following direction and further observation.

27. The direction is as follows. I direct that a copy of this Upper Tribunal decision is sent to HMRC. Within one month of this decision being sent out by the Upper Tribunal office, HMRC should inform the First-tier Tribunal's Birmingham Appeals Service Centre office whether it wishes to be joined as a party to the appeal under reference SC049/12/01902. There is a confidential annex to this decision which states the mother's name and National Insurance number, and Connie's date of birth, to enable HMRC to trace the case in question. That confidential annex should be sent to the parties and HMRC but is not to be released publicly (rule 14(1) of the UT Rules).

28. The further observation is as follows. At present the only hard information on the child support appeal file about the child benefit award is that the last payment of child benefit for Connie was for the week ending 30 August 2010 and that she was excluded from 6 September 2010. There is no information about any investigations made or evidence relied on by HMRC in connection with the award of child benefit before those dates. The father's statutory child support liability depends on that information and so the Tribunal has a proper interest in that information being made available in its proceedings. To date HMRC's position has been (letters dated 11 April 2012 and 20 April 2012) that it cannot disclose the information without the written permission of the "customer" (here the mother). That is presumably a reference to the duty of confidentiality imposed on HMRC by section 18(1) of the Commissioners for Revenue and Customs Act 2005. However, this duty of non-disclosure does not apply where the disclosure is "made for the purposes of civil proceedings ... relating to a matter in respect of which the Revenue and Customs have functions" or "which is made in pursuance of an order of a court" (section 18(2)(c) and (e)).

29. The precise form of any further directions to HMRC as regards disclosure of information is a matter for the District Tribunal Judge. However, I would suggest that at the very least he or she should direct HMRC to produce the following:

(i) copies of all decisions taken after January 2009 in relation to the child benefit claim for Connie and in particular a copy of the last operative award of child benefit in respect of Connie;

(ii) copies of all correspondence after January 2009 between HMRC and the mother about the child benefit award for Connie;

(iii) copies of any other evidence relied upon (e.g. whether documents or information obtained by telephone) to support the award of child benefit for Connie after she reached the age of 16, and in particular copies of any evidence relied upon to support the conclusion that she was in full-time (non-University) education in 2009 and 2010 (prior to September 2010).

A reminder of the issues that are before the First-tier Tribunal
30. The Tribunal is concerned with the father's appeal against the Agency's decision of 12 November 2010, which was that the case was closed and his liability ended on 1 September 2010. That decision was taken on the basis that Connie ceased to be a "qualifying child" within section 55 of the Child Support Act 1991 as from that date. By law she remained a qualifying child while over 16 and under 19 so long as she was receiving full-time non-advanced education (section 55(1)(b)).

31. However, a young person may also remain a qualifying child for a period even if she no longer meets the conditions set out in section 55(1). This is because paragraph 1A of Schedule 1 to the Child Support (Maintenance Calculation Procedure) Regulations 2000 (SI 2001/157, as amended by regulation 4(2) of the Child Support (Miscellaneous Amendments) (No 2) Regulations 2009 (SI 2009/2909) provides as follows (emphasis added):

"Where a person ("P") has ceased to fall within section 55(1) of the Act, P is to be treated as continuing to fall within that subsection for any period during which P is a person in respect of whom child benefit is payable."

31. In JF v Secretary of State for Work and Pensions and DB (CSM) [2014] AACR 3 I ruled that "the word 'payable' in the phrase 'a person in respect of whom child benefit is payable' in paragraph 1A means 'properly or lawfully payable'" (at [28]).

32. It follows that the new Tribunal will have to ask itself the following two questions. First, at the material time in 2009/2010 was Connie aged over 16 but under 19 "and receiving full-time education"? If so, she remained a qualifying child under section 55(1)(b). Second, if she did not qualify under section 55(1)(b) for any period, was she nonetheless "a person in respect of whom child benefit" was properly or lawfully payable within paragraph 1A? If so, she was to be treated as still being a qualifying child.

Observations on the child benefit rules
33. The child benefit legislation is more complex than the picture the father paints. It is certainly the case that a typical way in which a young person above 16 continues to qualify for child benefit is if they are in full-time education, being defined as averaging more than 12 hours a week during term time. The basis for this is not the HMRC internet guidance at CCM18030. Rather, the proper basis is regulation 1(2) and 3 of the Child Benefit (General) Regulations 2006 (SI 2006/223). However, this is not the only basis on which a young person can qualify for child benefit. For example, even if they are not at college, they may continue to qualify e.g. up until the "terminal date" or through interruptions due to illness (regulations 6 and 7). There are other special rules.

Final comment
34. There is various correspondence on file from the father's MP. For the avoidance of doubt I should make it clear I have not relied on that correspondence in making my decision. The father's MP is not his representative in these proceedings. Nor does that correspondence address the technical legal issues which arise on this appeal.

Conclusion
35. For the reason explained above, the Upper Tribunal allows the father's appeal. The decision of the First-tier Tribunal is set aside. The Upper Tribunal directs a re-hearing of the case before a new First-tier Tribunal subject to the directions above. The fact that this appeal has succeeded on a point of law should be taken as no indication either way as to the outcome of the re-hearing on the facts. 

Signed on the original   Nicholas Wikeley
on 15 January 2015    Judge of the Upper Tribunal