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|Session 2005 - 06|
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Farley (FC) (Respondent) v. Child Support Agency and another (Appellants)
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:
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  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  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:  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  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  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:  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:
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.