IpsofactoJ.com: International Cases [2007] Part 7 Case 1 [HL]


HOUSE OF LORDS

Coram

Child Support Agency

- vs -

Farley

LORD NICHOLLS OF BIRKENHEAD

LORD HOPE OF CRAIGHEAD

LORD HOFFMANN

LORD WALKER OF GESTINGTHORPE

LORD MANCE

28 JUNE 2006


Judgment

Lord Nicholls of Birkenhead

  1. This appeal raises a question of interpretation of the Child Support Act 1991 ('the 1991 Act'). This statute introduced a new child maintenance scheme. The scheme was intended to provide an effective, cheap and speedy means to enforce parental support obligations. Another aim, of considerable importance, was to reduce dependence on social security and the cost to the taxpayer. The new system has had a chequered history. The 1991 Act has been much amended, first by the Child Support Act 1995 ('the 1995 Act') and then by the Child Support, Pensions and Social Security Act 2000 ('the 2000 Act').

  2. The statutory provisions relevant on the present appeal can be summarised briefly as follows. Section 1 of the 1991 Act provides that each parent of a 'qualifying child' is responsible for maintaining him. A qualifying child is a child one or both of whose parents are 'absent parents', now known as non-resident parents. An absent parent meets his responsibility to maintain a qualifying child by making periodical maintenance payments in accordance with the provisions of the Act. An absent parent is under a duty to make the periodical payments required from him by a maintenance assessment. A maintenance assessment is now known as a maintenance calculation.

  3. Maintenance assessments are made on application to the Secretary of State. There are two principal routes by which applications are made. The first is where a person with care or an absent parent chooses to apply to the Secretary of State. That is under section 4. When an assessment has been made the applicant may apply to the Secretary of State to arrange collection of the child support maintenance and request the Secretary of State to enforce payment. The provisions of section 4 have largely survived the changes made by the 1995 Act and the 2000 Act.

  4. The second route, under section 6 as it stood at the relevant time, is where a parent is required to apply to the Secretary of State for a maintenance assessment. This applies where a person with care of a child is claiming or receiving income support or other prescribed state benefits in respect of the child. Then, if so required by the Secretary of State, she - the applicant is usually the mother - must apply to the Secretary of State for a maintenance assessment to be made in respect of the child and for the Secretary of State to take steps on her behalf to recover the amount of child support maintenance so assessed. Section 6 has been extensively amended by the 2000 Act. The main difference is that under the new provision the Secretary of State may treat the parent with care of a child who is claiming or receiving a prescribed benefit as having applied for a maintenance calculation. In such a case the Secretary of State may also take action to recover the maintenance from the non-resident parent. In the case of both the section 4 route and the section 6 route the amount of child support maintenance to be fixed by a maintenance calculation is determined in accordance with the provisions in Schedule 1 to the Act and regulations: section 11.

  5. Making a maintenance assessment is one matter, obtaining payment is quite another. The 1991 Act contains detailed provisions regarding the collection of child support maintenance payable in accordance with a maintenance assessment. These provisions include power for the Secretary of State to make a 'deduction from earnings' order in respect of arrears and future instalments of child support maintenance. Section 33(1) makes further provision for cases where '(a) a person who is liable to make payments of child support maintenance ("the liable person") fails to make one or more of those payments' and (b) it appears to the Secretary of State that the deduction from earnings procedure has proved ineffective or is not appropriate, for instance, where a person is self-employed. Then the Secretary of State may apply to a magistrates' court for a 'liability' order against the liable person: section 33(2). Section 33(3) imposes an obligation on the magistrates' court to make a liability order where the Secretary of State applies for an order if the court is 'satisfied that the payments in question have become payable by the liable person and have not been paid'.

  6. Section 33(4) is the crucial provision on this appeal. This subsection limits the matters the court may investigate on an application for a liability order. It takes away a jurisdiction the court would otherwise have. The subsection is in these terms:

    On an application under subsection (2), the court .... shall not question the maintenance assessment under which the payments of child support maintenance fell to be made.

    The question raised by this appeal concerns the extent of the limitation thus placed on the matters the magistrates' court may investigate before making a liability order.

  7. The effect of a liability order is to trigger a range of enforcement powers. The Secretary of State may levy execution on a liable person's goods. The unpaid amount may be the subject of garnishee proceedings or a charging order. As a last resort the liable person may be committed to prison if guilty of wilful refusal or culpable neglect. A liable person may also be disqualified from driving.

    THE PRESENT CASE

  8. The background facts placed before the House are sparse in the extreme. On 15 July 2003 an officer acting on behalf of the Secretary of State for Work and Pensions laid a complaint before the North Somerset Magistrates' Court that the amount of 32,639.94 was due from Mr Alec Farley by way of payments of child support. Mr Farley was required to show cause why a liability order should not be made under section 33. Apparently Mr Farley was self-employed, so there was no prospect of recovering payments under a deduction from earnings order.

  9. Before the magistrates Mr Farley accepted that the amounts of maintenance set out in three maintenance assessments, dated 28 November 2002, 29 November 2002 and 3 December 2002, were outstanding and unpaid. These amounts totalled 32,639.94. The House was told that this total amount has since been reduced to 28,134.84. For present purposes the exact amount of the assessments and the payments outstanding is not material.

  10. Mr Farley's case before the magistrates was that these three maintenance assessments were not lawfully made. Section 4(10) precluded an application for a maintenance assessment under section 4 if there was in existence a written maintenance agreement made before 5 April 1993. That, it was said, is the position in the present case. A prerequisite to an application for a maintenance assessment by the other route, under section 6, is that a parent of the child is claiming or receiving income support or another prescribed state benefit. In the present case the Secretary of State produced no evidence this was so. Accordingly, Mr Farley submitted, the magistrates should hold that he was not a liable person and that they could not be satisfied the payments alleged to be outstanding had become payable.

  11. The justices rejected this submission and made the liability order as sought. They decided they had no power to enquire whether the Secretary of State had authority to make the maintenance assessments sought to be enforced by him. The issue on this appeal is whether the justices' conclusion was correct.

  12. Mr Farley appealed by way of case stated to the High Court. The justices stated two questions: (1) Do we have any adjudicative function under section 33(1)(a) of the Child Support Act 1991 as to whether or not a non-resident parent is a liable person? (2) When dealing with an application for a liability order are we required to receive evidence that the parent with care was claiming a benefit which authorised the Secretary of State to recover child support maintenance?

  13. On 12 July 2004 Keith J sitting as a judge in the Administrative Court rejected the appeal, answering 'no' to each question: see [2004] EWHC 1655 (Admin). Keith J reached the same conclusion on section 33(4) as Latham J had earlier reached on similar wording in section 32(6) regarding an appeal to the magistrates court against the making of a deduction from earnings order: Secretary of State for Social Security v Shotton [1996] 2 FLR 241, 244. The magistrates' court was precluded from entertaining a challenge to the quantification or validity of a maintenance assessment.

  14. Mr Farley appealed to the Court of Appeal. On 25 January 2005 the Court of Appeal, comprising Lord Woolf CJ, Lord Phillips of Maltravers MR and Lord Slynn of Hadley, allowed the appeal: [2005] EWCA Civ 778. The Court of Appeal ruled that under section 33 the magistrates' court has an adjudicative function on whether the non-resident parent is a liable person and that, where appropriate, the court is required to seek evidence to show that liability unless there is a concession by the non-resident parent.

  15. Some months later, on 22 June 2005, the matter returned to the Court of Appeal. The court, comprising Lord Woolf CJ and Lord Phillips of Worth Matravers MR, re-opened its judgment of 25 January 2005. The court held that Keith J's decision on the appeal by way of case stated was final. No appeal lay from his decision. In these unusual circumstances, more fully described in its judgment [2005] EWCA Civ 869, the Court of Appeal set aside its earlier judgment. The court granted Mr Farley leave to bring an application for judicial review of the magistrates' decision, granted that application, and declared that the decisions of Keith J and of the magistrates' court were wrong in law for the reasons set out in the Court of Appeal's earlier judgment. The Court of Appeal quashed the decision of the magistrates' court. Before your Lordships' House is an appeal by the Secretary of State from that decision of the Court of Appeal.

    THE MEANING AND EFFECT OF SECTION 33(4)

  16. To my mind the language of section 33(4), read in the context of the section as a whole, on its face admits of only one interpretation: on an application for a liability order the magistrates' court must proceed on the basis that the maintenance assessment in question was lawfully and properly made. The court is precluded from questioning that assessment. It is precluded from questioning any aspect of the assessment. The magistrates' court function is to check that the assessment relates to the defendant brought before the court and that the payments in question have become payable and have not been paid. The court is not required to receive evidence that the assessment was made pursuant to an application satisfying the prerequisites set out in sections 4 to 6.

  17. That the magistrates' function should be limited in this way is readily understandable. Quite apart from any other considerations, it would be surprising if a challenge to the jurisdiction of the Secretary of State to make a maintenance assessment could be left to such a late stage as an application for a liability order. One would expect a challenge of this nature to be made at an earlier stage. Consistently with this, one would expect to find provision elsewhere in the statute enabling such a challenge to be made at an earlier stage.

  18. I pause to note that in the absence of such an enabling provision elsewhere in the 1991 Act section 33(4) would fall to be interpreted differently. In the absence of such a provision section 33(4) would be interpreted with the strictness appropriate to a provision which purports to exclude the jurisdiction of the court to determine whether an order made by a government minister is a nullity. The need for a strict approach to the interpretation of an ouster provision of this nature was famously confirmed in the leading case of Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147: see, for example, Lord Reid at 169-170. This strict approach, however, is not appropriate if an effective means of challenging the validity of a maintenance assessment is provided elsewhere. Then section 33(4) is not an ouster provision. Rather, it is part of a statutory scheme which allocates jurisdiction to determine the validity of an assessment and decide whether the defendant is a 'liable person' to a court other than the magistrates' court.

  19. This is where the Court of Appeal perceived difficulty. Lord Woolf CJ said it is 'at least unclear' that Mr Farley would be able to take advantage of the statutory right of review, and judicial review was hardly an appropriate alternative remedy in this field. Lord Woolf was not satisfied that, under the legislation as it existed at the relevant time, there was a satisfactory alternative to challenging the Secretary of State's jurisdiction before the magistrates: [2005] EWCA Civ 778, paras 25-26 and 30. Lord Slynn of Hadley expressed similar concern. He said it clearly cannot have been intended that no challenge to the validity of a maintenance assessment could be made in any way by anybody at any stage: para 47. Lord Phillips of Worth Matravers MR took a different view from the opinion I have expressed above on the natural meaning of section 33, but he found reinforcement for his view in the absence of a clear alternative right of appeal against a decision under article 6: para 42.

  20. As already noted, I agree with the Court of Appeal that the absence of an effective means of challenging the Secretary of State's jurisdiction to make a maintenance assessment under sections 4 or 6 would be a powerful argument in favour of that court's interpretation of section 33(4). I also agree that judicial review would not always provide a wholly satisfactory means for determining such a challenge. A challenge could involve disputed questions of fact, for instance, on whether a child is a qualifying child, or whether there was in existence a maintenance agreement precluding the Secretary of State from making a maintenance assessment by reason of section 4(10).

  21. Where I respectfully part company with the Court of Appeal is that I do not consider it is appropriate in this case to leave unresolved the doubts to which the Court of Appeal referred. When the proper interpretation of one statutory provision (A) depends upon the proper interpretation of another provision (B) in the same statute the appropriate course for a court concerned to interpret provision (A) will normally be that the court should resolve the doubts about the interpretation of provision (B) in the course of interpreting provision (A). Unless there is some compelling reason for doing so, the court should not enunciate a definitive interpretation of provision (A) on the basis that doubt exists on the true meaning of provision (B).

    RIGHTS OF APPEAL: CHALLENGING THE SECRETARY OF STATE'S JURISDICTION

  22. I turn therefore to consider the rights of appeal conferred by the 1991 Act. On this your Lordships' House had the advantage of much fuller argument than the Court of Appeal. There have been three versions of these rights: the original version, the 1998 version, and the current version. The current version is straightforward. Section 11 of the 1991 Act, as substituted by the 2000 Act, provides that an application made to the Secretary of State for a maintenance calculation shall be dealt with by him in accordance with the provision made by or under the Act. Unless he decides not to make a maintenance calculation in response to the application he is obliged to decide whether any child support is payable and, if so, how much. Section 20, again as substituted by the 2000 Act, gives a 'qualifying person' a right of appeal to an appeal tribunal against a decision made by the Secretary of State under section 11. For this purpose a qualifying person includes the non-resident parent with respect to whom the Secretary of State made the decision. Thus, the current version of the rights of appeal under the 1991 Act enables a person in Mr Farley's position to challenge the Secretary of State's jurisdiction to make a maintenance calculation. He can do so by way of appeal to an appeal tribunal.

  23. It is not possible to stop at this point. The current version of a non-resident parent's rights of appeal provides little or no assistance in the present case. This is because section 33 has remained aloof from the vicissitudes affecting this legislation. Save for immaterial amendment, section 33 remains as originally enacted. So, on the point now under consideration, what primarily matters is the original form of the rights of appeal, that is, the version contained in the 1991 Act when section 33 was itself enacted. Subsequent amendments to these appeal rights can hardly have changed, by implication, the extent of the jurisdiction conferred on the magistrates' court by section 33. Neither party has suggested otherwise in your Lordships' House.

  24. In its original form the 1991 Act divided certain functions between the Secretary of State and a child support officer. Section 11(1) provided as follows:

    Any application for a maintenance assessment made to the Secretary of State shall be referred by him to a child support officer whose duty it shall be to deal with the application in accordance with the provision made by or under this Act.

    Section 18 made provision for the review of decisions of child support officers. Under section 18(2) the absent parent with respect to whom a maintenance assessment was in force might apply to the Secretary of State for the assessment to be reviewed. Unlike a review under section 17, which was confined to a review of the amount of child support maintenance fixed by an assessment, under section 18 (2) an application could be made for a review of the assessment itself. Further, on an application under section 18(2) it was not necessary to show a change of circumstances. The Secretary of State was obliged to refer a review application to a child support officer who had played no part in taking the decision which was to be reviewed: section 18(7). A person aggrieved by the decision of a child support officer on a review under section 18 had a right of appeal to a child support appeal tribunal: section 20.

  25. In my view these provisions, when in force, provided an effective means by which an absent parent could challenge the Secretary of State's jurisdiction to make a maintenance assessment. There is thus no justification for reading section 33 as requiring or permitting the magistrates' court to entertain such a challenge. Quite the contrary. Given the existence of this statutory right of review and appeal, it would be surprising and undesirable if the magistrates' court were to have a parallel jurisdiction to adjudicate upon the same question.

    FURTHER TWISTS

  26. There are further twists in the history of this matter. The first relates to a submission made on behalf of the Secretary of State in Secretary of State for Social Security v Harmon [1999] 1 WLR 163. There, in three appeals heard together, mothers having care of children were in receipt of income support to which the absent fathers claimed the mothers were not entitled. The issue was whether for the purposes of section 4(10)(b) and section 6(1) receipt of income support, as distinct from entitlement to income support, sufficed. In his judgment Millett LJ noted, at pages 169-170, that leading counsel for the Secretary of State accepted that the decision-making process under section 6(1) is vested solely in the Secretary of State and that neither the child support officer nor the Child Support Appeal Tribunal nor the Child Support Commissioner had any jurisdiction to question such a decision.

  27. The submission made by the Secretary of State in that case is of course flat contrary to the case advanced by the Secretary of State on this appeal. Before your Lordships' House the position adopted by Mr Giffin QC on behalf of the Secretary of State was that the submission made in the Harmon case was simply wrong.

  28. The next twist in the story is to be found in the second of the three versions of the rights of appeal under the 1991 Act. The second version was introduced by the Social Security Act 1998. This was the version in force when Mr Farley's three maintenance assessments were made. As amended by the 1998 Act, section 11(1) of the 1991 Act provided that an application for a maintenance assessment made to the Secretary of State should be dealt with by him in accordance with the provision made by or under that Act. The child support officer thus dropped out of the picture. Section 20(2), as substituted by the 1998 Act, provided that where a maintenance assessment was in force, the absent parent should have a right of appeal to an appeal tribunal 'against the amount of the assessment or the date from which the assessment takes effect'.

  29. This language undoubtedly provides some support for Mr Farley's case. It seems unlikely that the 1998 version of section 20 was intended to cut down an absent parent's appeal rights. But if the original version of the appeal rights is interpreted as I have set out above, the 1998 version did have that effect. The 1998 version had that effect because it prescribed a right of appeal against the 'amount' of an assessment or its starting date, and in its context this language cannot be read as encompassing a challenge to the Secretary of State's jurisdiction to make an assessment at all. Hence the submission of Mr Drabble QC, that the 1998 version supports the view that from the outset the 1991 Act drew a distinction between decisions made by the Secretary of State and decisions made by a child support officer. This distinction, submitted counsel, mirrors a feature of the social security adjudication scheme on which the adjudication provisions of the 1991 Act were plainly based. Decisions of child support officers were subject to review, decisions of the Secretary of State were not. If the original version of the rights of appeal is so interpreted there would be no discord between it and the 1998 version. There would then be no question of the 1998 version having cut down an absent parent's appeal rights.

  30. This is an attractive argument, but I am unable to accept it. I agree that while the 1998 version of the rights of appeal was in force an absent parent had no statutory right of appeal in respect of the Secretary of State's assertion of jurisdiction to make a maintenance assessment. The language of section 20(2) ('the amount of the assessment or the date from which the assessment takes effect') does not permit a wider interpretation. During this period an absent parent's remedy was confined to an application for judicial review. Even so, this unsatisfactory position for this period does not suffice to displace my preferred interpretation, set out above, of sections 18 and 20 as originally enacted. Here again, in its context the language of these two sections as originally enacted is unambiguous. It is too clear to admit the narrower interpretation required to bring them into line with the more limited rights of appeal set out in the later, 1998 version.

  31. Nor does the concession made on behalf of the Secretary of State in the Harmon case lead anywhere. The reality seems to be that, at the time, a degree of confusion prevailed. In October 1995 Commissioner Rice decided that a child support tribunal had jurisdiction to determine a challenge to the jurisdiction of the Secretary of State to make a maintenance order under section 4: Case R(CS) 1/96. Commissioner Goodman reached the same conclusion in February 1996, in Case R(CS) 3/97. In May 1998 the appeal tribunal's jurisdiction to decide such an issue was assumed, in Case R(CS) 6/98. These rulings still prevailed when the Secretary of State made the (contrary) concession less than a month later in the Harmon case.

    CONCLUSION

  32. My conclusion, therefore, is that section 33(4) precludes the justices from investigating whether a maintenance assessment, or maintenance calculation in the current terminology, is a nullity. That has been the position ever since section 33 was enacted in 1991. Such an investigation is a matter to be pursued today through the statutory appeal structure. I would allow this appeal. I would set aside the order of the Court of Appeal of 22 June 2005 insofar as it granted relief on Mr Farley's application for judicial review. I would dismiss this judicial review application and declare that the decisions of the magistrates and Keith J were correct in law.

  33. I add a brief postscript. The House was told that sometimes applications for liability orders are made and granted, and liability orders are enforced, even though at the time appeals against the validity of the relevant maintenance calculations are pending. Clearly there are circumstances where this may be justified; for instance, where it is necessary to take steps to prevent assets from being put beyond reach. Equally clearly there may be circumstances where it would be oppressive to follow this course. I wish to note only that when faced with an application for a liability order where an appeal is pending against the validity of the underlying maintenance calculation the magistrates should consider whether it would be oppressive to make a liability order. If they consider it would be oppressive they should adjourn the hearing, pending the outcome of the appeal or for such shorter period and on such terms as may be just. The magistrates have this power under section 54 of the Magistrates' Courts Act 1980.

    Lord Hope of Craighead

    My Lords,

  34. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Nicholls of Birkenhead. I agree with it, and for the reasons he gives I would allow the appeal and make the order that he proposes.

    Lord Hutton

    My Lords,

  35. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Nicholls of Birkenhead. I agree with it, and for the reasons which he gives I would allow the appeal and make the order that he proposes.

    Lord Walker of Gestingthorpe

    My Lords,

  36. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Nicholls of Birkenhead. I agree with it, and for the reasons he gives I would allow the appeal and make the order that he proposes.

    Lord Mance

    My Lords,

  37. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Nicholls of Birkenhead. I agree with it, and for the reasons he gives I would allow the appeal and make the order that he proposes.


Cases

Secretary of State for Social Security v Shotton [1996] 2 FLR 241

Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147

Secretary of State for Social Security v Harmon [1999] 1 WLR 163

Legislations

Child Support Act 1991: s.1, s.4, s.6, s.11, s.18, s.33

Child Support Act 1995

Child Support, Pensions and Social Security Act 2000: s.20

Representations

Nigel Giffin QC & Tim Ward (instructed by Solicitor - Department for Work and Pensions) for the appellant.

Richard Drabble QC & David Burrows (instructed by David Burrows & Co) for the respondent.


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