Upper Tribunal Judge Citron. Application for a variation to a child support maintenance calculation under regs 69 or 69A of the Child Support Maintenance Calculation Regulations 2012. Interpretation of s 8(6) CSA 1991. Error of law immaterial when liability exceeds statutory cap anyway.

First-Tier Tribunal

The First-Tier Tribunal in this case allowed the mother to appeal the decision of the Secretary of State, finding that father was liable to child maintenance for two children from 18 June 2021 at an amount to be recalculated by the Child Maintenance Service, based on the maximum income figure of £3,000 a week.

The tribunal found that father had a total income figure of £346,301.76. This was made up of a current income figure of £9,540 and a variation of:

1. the 8% statutory rate of income applied to the value of father’s reg 69A assets exceeding £31,250; this came out as:
   1. £3,089.61 in respect of cash held in a Santander and Virgin Money account;
   2. £5,076.08 in respect of a Halifax stocks and shares ISA;
   3. £56,000 in respect of 50% of the Crows Nest property (this was the ‘Crows Nest variation’)
   4. £138,964 in respect of a director’s loan to Walnuts Investments Ltd – referred to as the ‘Walnuts Investments variation’;
   5. £109,436.07 in respect of shares held in a Halifax shares account; and
2. reg 69 unearned income of £24,196 from Father’s Assetz account – referred to as the ‘Assetz variation’.

Father’s evidence was that was that the income received from the business was split 95% to his wife and 5% to him. The First Tier-Tribunal found that the Crows Nest property was jointly owned by father and his wife; father had a 50% interest; and father’s wife was running Crows Nest as a holiday let on a day-to-day basis with minimal involvement with father.

Permission to appeal

The Upper Tribunal gave permission to appeal the First-Tier Tribunal’s decision limited to an error of law in respect of the Crows Nest variation, which is referred to within the judgment as ‘the permission decision’, on the basis that the tribunal did not expressly address the question of whether father’s 50% interest in Crow’s Nest was being used in the course of a trade or business of father’s. Additionally, on the basis that it seemed reasonably arguable that:

• The inference could be made from the factual findings that the Crows Nest property was being used for a business which was partly father’s as he took 5% of the income received.
• The First-Tier Tribunal decision erred in not addressing this question and/or in failing to explain, adequately, how it reached the view that father’s 50% interest in Crows Nest was not excluded from reg 69A(1) by reason of reg 69A(4)(b).
• Even if no legal error in failing to exclude father’s 50% interest in Crows Nest from reg 69A(1), the First-Tier Tribunal decision erred in law by not explaining, adequately, why it was in all the circumstances just and equitable to make the variation by reference to 50% of the value of Crows Nest, when it appeared to accept that Father was entitled to only 5% of the income received.
• The variation in relation to father’s 50% interest amounted to £56,000 and the overall correct income figure was just over £346,000, meaning even if the Crows Nest variation had not been made, the income figure would have been over £290,000 per year, and so over £5,500 per week – well in excess of the capped amount therefore any errors of law with respect to Crows Nest are not material to the First-Tier Tribunal decision in that they do not affect the outcome that the child maintenance support is based on.

The Secretary of State supported the appeal on the permitted ground. They asked the Upper Tribunal to set the First-Tribunal Tier decision aside and remit the appeal for rehearing by a differently constituted First-Tribunal Tier. Father sought to set aside the decision for permission to appeal and sought to introduce a new ground of appeal.

The law

Section 8(6) sets out three conditions to be satisfied if the court is to exercise ‘any power which it has to make a maintenance order in relation to a child’:

1. A maintenance calculation is in force with respect to the child.
2. The non-resident parent’s gross weekly income exceeds the figure in para 10(3) of Schedule 1.
3. The court is satisfied that the circumstances of the case make it appropriate for the non-resident parent to make or secure the making of periodical payments under a maintenance order in addition to the child support maintenance payable by him in accordance with the maintenance calculation.

Reference to gross weekly income means income determined by the Secretary of State not by the court: Dickson v Rennie [2014] EWHC 4306 (Fam).

Judgment/appeal by the Upper Tribunal

Upper Tribunal Judge Citron refused the father’s applications for set-aside of the permission decision, which was the decision to allow the appeal, and to introduce a new ground of appeal. To set aside the permission decision requires some procedural irregularity in the Upper Tribunal proceeding and a determination that it is in the interests of justice to set aside the relevant decision, which was not the case here.

The application for permission to appeal was made three months after the deadline and there was nothing to explain why it had not been made with the original application. This was deemed a significant degree of ‘lateness’. As to the merits of the new ground of appeal, the First-Tier Tribunal was clearly alive to the issue of double counting and took steps to avoid it, it is not the task of the appeals tribunal to revisit and re-evaluate the detailed evidence, and the prospects of success as a material error of law are low. Overall, it was not deemed fair and just to admit this new ground.

In relation to the Crows Nest calculation, the judge held that mother had conceded that father’s 50% holding in the Crows Nest property was being used in the court of his trade or business, therefore the First-Tier Tribunal erred in law in making the Crows Nest variation. However, the only question is whether the legal error was material given that, even without the Crows Nest variation, father’s gross weekly income exceeded £3,000 (the maximum income figure), as found by the First-Tier Tribunal. The judge decided that this was not a material error, as it had no effect on the child support maintenance payable, which is the matter as to which the First-Tier Tribunal has jurisdiction because father’s gross weekly income exceeded the capped amounts regardless.

The judge held that s 8(6) is concerned with whether the non-resident parent’s gross weekly income exceeds the capped amount (£3,000). If it does, the court has power to ‘top-up’ the child support maintenance payable. However it is not concerned with ‘by how much’ the non-resident parent’s gross weekly income exceeds £3,000. Therefore, there is nothing that would change or affect the initial conclusion: increasing gross weekly income to a larger figure also in excess of the capped amount is not a material error because it has no effect on the child support maintenance payable, which is the matter on which the First-Tier Tribunal has jurisdiction.

For this reason, the judge declined to set the First-Tier Tribunal decision aside.