[2024] UKUT 343 (AAC)

I agree with Mr Atkinson’s submission that the FtT did not have power to direct the Secretary of State to make a decision under the Child Support Act. The judge relied on rule 5(1) of the Tribunal Procedure (First-tier Tribunal)(Social Entitlement Chamber) 2008 which allows the Tribunal to regulate its own procedure. However, procedural powers cannot authorise a direction to a party to exercise a substantive statutory function. The FtT’s only power to require the Secretary of State to make a decision under the Child Support Act is that contained in section 20(8)(b) of the Act and that power is exercisable only when the FtT has allowed an appeal.

However, that is not the end of the matter. Where a party raises an issue in the course of an appeal, the FtT may invite another party to consider that issue. Doing so carries no peremptory force. If the tribunal had invited the Secretary of State to consider a variation, it would have been open to the Secretary of State to refuse to do so and the tribunal could have done nothing about it.

Although the FtT overstepped its powers in making a direction to exercise a statutory function, the effect was to invite the Secretary of State to consider the matter. In any event, the Secretary of State did not need to be invited to consider the matter. Regardless of whether the FtT had power to do what it did, the Secretary of State could at any time have considered a variation if an application was made. That is what occurred here.

In R(CS) 2/06 the PWC appealed against the calculation of the NRP’s maintenance liability. The PWC had not sought a variation until she appealed. In her letter of appeal, she referred to the NRP having rental income. The Secretary of State invited her to apply for a variation, she did so, the Secretary of State rejected it on preliminary consideration and the tribunal allowed the appeal by making a variation. Commissioner Jacobs, as he then was, considered whether the PWC’s letter of appeal could be treated as a variation application (paragraphs 25-29).

Commissioner Jacobs referred to the approach by the Commissioners in the social security jurisdiction to allow letters to be treated as applications for whatever course of action is most appropriate in the circumstances of the case, and that letters from claimants should be dealt with by reference to their substance rather than form. He said the same considerations apply in child support, but taking into account that in child support there will usually be contentions involvement by the two parties in addition to the Secretary of State and that an interpretation of a letter that works to the benefit of one of the parties may be to the detriment of the other. Therefore a greater degree of restraint is appropriate. He went on to say:

“26.

… I suggest that in applying this approach in child support two qualifications are appropriate.

27.

First qualification: It is appropriate to interpret letters by reference to their substance rather than their form. This is especially so if the writer is not represented and is not familiar with the child support adjudication procedures. However, it is not appropriate simply to treat any point of contact as an application just because that will be advantageous to the person concerned. To do so may operate to the disadvantage of the other party.

28.

Second qualification: The approach can only be applied within the limits allowed by the legislation. In the case of an application for a variation, that means that it must be applied consistently with the Variations Regulations…

29.

Bearing that in mind, it is possible that the Secretary of State could have treated the letter of appeal as an application for a variation.”

In the present case, the PWC had asserted that there should be a variation on the ground of diversion of income and provided submissions as to this. She did not do this by making an application to the Secretary of State. She did it by way of submissions in the appeal which were directed to the tribunal and the other parties, including to the Secretary of State. The submissions stated the grounds of the application and so were consistent with the legislative requirements of a variation application. It was appropriate for the Secretary of State to treat these submissions as an application for a variation.

The Secretary of State provided a supplementary submission to the FtT addressing the variation application. The submission stated that the Secretary of State had been requested to make preliminary consideration of the application and referred to section 28B and summarised the grounds upon which the application could be rejected. The submission then stated that the Secretary of State had decided to “refuse” the application for variation. As this was a decision under section 28B(2), the decision should have been expressed as one to “reject” the application. Nonetheless it is clear from the content of the supplementary submission that the Secretary of State had made a decision under section 28B(2). Furthermore, although the Secretary of State did not frame the decision in the terms of the statutory grounds for rejection, the finding that the PWC had not provided sufficient evidence of a diversion amounted to a finding that the facts alleged did not bring the case within the ground or did not support the ground.

Having decided to reject the application, the Secretary of State had no power to refer the application to the FtT. That power is found in section 28D. It only arises if the application has not “failed”. Failure is defined in section 28D(2) as including where an application has been rejected under section 28B. In this case, the application had been rejected and therefore had failed and so it follows that the power to refer the application to the FtT did not arise.

However, that error by the Secretary of State (and the corresponding error by the FtT in accepting that the Secretary of State had made a valid referral) was not material if the FtT was in any event entitled to consider the variation application. This brings me to the nub of the issue in this appeal: in this appeal by the NRP against the assessment of his income, did the FtT have jurisdiction to consider the PWC’s case regarding a variation?

R(CS) 2/06 assists in this regard. As Commissioner Jacobs observed at paragraph 12, a variation decision is not freestanding but takes effect as a decision on the calculation. If the Secretary of State rejects the application, the tribunal is entitled to decide whether that was correct (paragraph 32). However, there is then a question as to what the tribunal can do if it decides that the rejection was not correct. The Commissioner explained at paragraphs 33 to 36 that section 28D can only apply if the application has not “failed” and so cannot apply if the application has been rejected under section 28B. As the Commissioner said, “there can be no determination if an application is rejected”.

Commissioner Jacobs went on to consider the tribunal’s powers on appeal. He said that the tribunal’s powers depend on the form of the Secretary of State’s decision. If the application was made under section 28G(1), the Secretary of State must revise or not revise or supersede or not supersede the maintenance calculation decision. In that case, the Secretary of State had decided not to revise the decision and there was no appeal against that decision, but the PWC had already made an appeal against the decision as originally notified and so was not required to add to it.

Commissioner Jacobs noted that the appeal had not been updated to take into account the rejection of the variation application and that section 20(7)(a) entitles a tribunal to limits its consideration to issues that are raised in the appeal. So he said that the Secretary of State may wish to consider whether to allow an appeal to be supplemented before it is forwarded to the Appeals Service. I note that that is no longer an option as appeals are now lodged with the tribunal and so the correct approach now would be for the FtT to consider whether to allow an appeal to be supplemented.

Finally, the Commissioner said that once the appeal is before the tribunal, it can substitute a determination under section 28D for a rejection under section 28B, and it can substitute a supersession for a revision. This is because section 20(8)(a) authorises a tribunal to make such a decision as it considers appropriate and because, as decided by the Tribunal of Commissioners in R(IB) 2/04, a tribunal stands in the shoes of the Secretary of State and can make any decision that the Secretary of State could have made.

How does the Commissioner’s reasoning in R(CS) 2/06 assist in the present case? R(CS) 2/06 was a case where the variation application had been made by the appellant. But the reasoning is not limited to such a situation. The position is the same where the variation application has been made by the respondent. This is because the tribunal is seized of the maintenance calculation that is under appeal, and any variation would affect that calculation.

The FtT in the present case was considering an appeal against a maintenance calculation. The NRP set out grounds for arguing that the calculation was wrong. The PWC was also entitled to argue that the calculation was wrong. She was not limited to the grounds set out by the NRP. She could raise any issue which was relevant to the maintenance calculation decision. As I have set out, a variation is relevant to a maintenance calculation.

Section 20(7)(a) provides that the tribunal need not consider any issue that is not raised in the appeal. An issue is raised in an appeal if it is raised by one of the parties at or before the appeal tribunal’s decision: see SC v CMEC (CSM) [2011] UKUT 458 (AAC) at paragraph 13. So in the present case the issue of the variation raised by the PWC in her submissions and addressed by the Secretary of State under section 28B was an issue raised in the appeal even though it was raised after the appeal was commenced.

I do not consider that DE v SSWP assists Mr Atkinson. In that case, the tribunal had, “out of the blue”, ignored the variation issue raised in the appeal and instead addressed the income calculation under the usual rules. Due to that decision being set aside by the FtT and the next decision being set aside by the Upper Tribunal on appeal, there were two further decisions by the FtT, the second of which came before the Upper Tribunal in DE. The Upper Tribunal allowed the appeal on undisputed grounds. In the course of re-making the decision, the Upper Tribunal commented on the approach taken in the FtT. Upper Tribunal Judge Mitchell said as follows:

“46.

…I should record that I am not comfortable, taking into account the proceedings on all three First-tier Tribunal decisions, with the way in which the proceedings were conducted, or to put it another way the dynamics of that process. The tribunal was dealing with an appeal brought by Mrs E yet the papers give the impression that it was Mr E who was being required to make good his case. During the First-tier Tribunal proceedings, Mr E supplied, in response to First-tier Tribunal directions, some 1,000 pages of documentary evidence and submissions. By contrast, Mrs E’ s documentary input was limited to no more than 10 pages or so comprising vaguely expressed arguments and assertions, much of which concerned the non-issue of shared care, and a handful of receipts for meals purchased during Mr E’ s holiday in West Wales (which Mr E claimed were improperly obtained).

47.

Now I am fully aware that the First-tier Tribunal has an inquisitorial function but that does not permit it to transform a respondent into a de facto appellant. I am concerned that this may have happened in this case. At no point did the First-tier Tribunal require Mrs E, nor for that matter the Secretary of State, to set out a case concerning the correct calculation of Mr E’ s income for the purposes of his child maintenance calculation.”

Mr Atkinson makes too much of these passages. In essence, the Judge was saying no more than that it had been unfair of the tribunal to introduce new issues without giving the parties an adequate opportunity to address them. It is not clear what the judge meant when he talked of transforming a respondent into a de facto appellant and, in any event, those observations are obiter.

In any event, the position in the present appeals was entirely different to that in DE. As I have set out, the variation issue had been clearly set out and the tribunal gave directions enabling all the parties to address it. There was no unfairness in the procedure adopted.

In AB v SSWP and RS, the mother appealed against the FtT’s failure to agree an additional income variation. The FtT allowed the appeal not only on that basis but also on the basis of diverted income. One of the father’s grounds of appeal to the Upper Tribunal was that it had not been open to the FtT to determine issues not raised in the notice of appeal and he relied on DE.

Judge Poynter opened his consideration of this ground of appeal as follows:

He then went on to address regulation 56(4) of the 2012 Regulations which allows the Secretary of State to treat an application for a variation made on one ground as made on another ground. That was pertinent to the case before Judge Poynter, although Judge Poynter observed that the power would have little if any practical function by the time an appeal reaches a tribunal because, by the that time, any issue that would lead the tribunal (standing in the shoes of the Secretary of State) to exercise that power would clearly be apparent from the evidence and so would be an issue raised by the appeal – see Mongan. The decision in AB did not turn on regulation 56(4).

In SC v CMEC [2011] UKUT 458, referred to by Judge Poynter in AB, the father was the appellant but the mother raised additional grounds in regard to the maintenance calculation. Upper Tribunal Judge Poynter said at paragraph 16:

“If the result of considering the additional mother’s grounds was that the maintenance calculation would increase rather than reduce, then that is the decision which the judge, in the exercise of his inquisitorial jurisdiction, should have given even though the Father had appealed and the Mother had not. In Gillies v SSWP [2006] UKHL 2 at [41] (a case concerned with the social security system) Baroness Hale of Richmond observed that “the system is there to ensure, so far as it can, that everyone receives what they are entitled to, neither more nor less”. In my judgment, the same principle applies to child support. The Tribunal’s role is to decide the issues before it in such a way as to ensure, as far as it can, that non-resident parents are assessed as liable to pay the amount of maintenance for which the law provides, neither more nor less.