Family Law Hub

Donaghy v DWP [2018] EWFC B73

CSA liability order was set aside.

  • TRANSCRIPT OF PROCEEDINGS

    Ref. LV17P01529

    IN THE FAMILY COURT AT LIVERPOOL

    Vernon Street

    Liverpool

    Before HIS HONOUR JUDGE GREENSMITH

    IN THE MATTER OF JAMIE DONAGHY v DWP

    The Appellant appeared in person

    MR DARNBOROUGH, solicitor, appeared on behalf of the Respondent

    JUDGMENT

    5th June 2018, 11.16 - 11.38

    (FOR APPROVAL)

    __________________

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    JUDGE GREENSMITH:

    1. This is an appeal against a liability order made at a hearing before the lay bench of magistrates sitting in Liverpool. The hearing was on 14th March 2017. The liability order itself was issued on 4th April 2017 and was for the sum of £4,653.59. The appeal is brought by Jamie Donaghy who is the person against whom the assessment was made, and the respondent is the DWP. For the purpose of this judgment, for ease of reference, the respondent will be referred to as the CSA.

    2. Before the court is the appellant Mr Donaghy who is a litigant in person. The respondent is represented by a solicitor with higher court rights, Mr Darnborough, and he is accompanied by a representative from the CSA.

    3. This appeal has a long chronology. I do need to outline this to explain the length of time this matter has been before the court.

    4. Initially Mr Donaghy sent to court a letter which was deemed to be a notice of appeal. The letter was dated 5th April 2017. As a result of that letter the matter was listed for an appeal hearing on 3rd July 2017. That appeal was adjourned until 12th July. A transcript of the hearing before the magistrates was ordered. On 12th July the appellant failed to attend, and the appeal was dismissed. On 14th July the appellant applied for the dismissal to be set aside, and that application was listed on 5th October. On 5th October the dismissal was set aside, and the appeal was relisted for 25th October 2017. On 25th October the appeal was adjourned until 20th November. On 20th November, the appeal was dismissed again in the absence of the appellant, but that order has been set aside, and the matter has been listed for appeal before myself today, 5th June 2018. That is as much as I intend to go into the detail of the reasoning why, but at least it gives a context for the lengthy period the matter has been before the court.

    5. The appeal is made under section 111A of the Magistrates' Courts Act 1980 which ssays:

    (1) This section applies in relation to proceedings under the Child Support Act 1991 in a magistrates' court.

    (2) Any person who was a party to any proceedings before the court, or is aggrieved by the order, determination or other proceeding of the court, may question the proceeding on the ground that it is wrong in law or is in excess of jurisdiction by appealing to the family court.

    6. In considering the appeal, I have regard to the lead case of Alec Farley v The Child Support Agency [2006] UKHL 31, a House of Lords decision. The lead judgment was given by Lord Nicholls of Birkenhead who made it clear that section 33(4) Child Support Act 1991 precludes the justices from investigating whether a maintenance assessment - or "maintenance calculation" in the current terminology - is a nullity. His Lordship went on to say (para 33:

    "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."

    7. The magistrates made their order under section 33 of the Child Support Act. Section 33 says in respect of liability orders:

    "This section applies 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

    (i) it is inappropriate to make a deduction from earnings order against him (because, for example, he is not employed); or

    (ii) although such an order has been made against him, it has proved ineffective as a means of securing that payments are made in accordance with the maintenance assessment in question."

    8. The appellant's notice of appeal has been accepted by the court as being his letter of 5th April 2017, and the following grounds of appeal can be discerned from that letter:

    (a) that the appellant was coerced into agreeing to something he did not agree with;

    (b) the appellant has been misinformed as to his rights to contest the original assessment;

    (c) the CMS has failed to provide documentary evidence to support the liability;

    (d) the fees for enforcement should not have been added;

    (e) that the original assessment has been miscalculated;

    (f) that the appellant has been misinformed as to the registration of a liability order;

    (g) that the appellant refuses to make any payments, as to do so would be to accept the debt; (h) that the appellant has been misled by the CMS as to whose liability it was to ascertain whether the parent with care was claiming child benefit;

    (i) that there was an agreement not to impose fees for enforcement;

    (j) that due process has not been followed before depriving the applicant of life, liberty or property; and

    (k) that the whole process has been based on lies by the CMS.

    9. The respondent has filed a statement in response to that, dated 5th June 2017.

    10. As this hearing has been conducted as an appeal hearing, further evidence has not been either invited or admitted. At the commencement of the hearing, I explained to Mr Donaghy that the court had some concerns which needed addressing and that I would invite representations on those concerns before returning to him for his representations.

    11. I have addressed the concerns of the court with Mr Darnborough, who has been assisted by the representative from the CSA. Mr Darnborough has - considering he has not been given notice of these concerns - given his best attempts and made a sterling job of trying to defend the position of the CSA. However, the court still remains troubled by certain aspects of how the magistrates have dealt with the liability order application.

    12. I have explained that to Mr Donaghy, and I have said to him that having heard from Mr Darnborough I am satisfied that the appeal is going to be successful. I have explained that I see no reason in pursuing any other aspects of his appeal, and he has accepted that position.

    13. My analysis of this appeal is as follows. During the hearing before the magistrates, I accept the respondent's case that the magistrates are restricted as to how they can approach the application under section 33. However, I make the following points.

    14. Firstly, in the transcript of the judgment, there is reference to the original calculation. I refer to page 2 of the judgment, index No. 4, which reads as follows: "A maintenance inquiry form was issued to Mr Donaghy on 29th March 2015. Maintenance assessments have been calculated, and the current assessment against Mr Donaghy is an assessment of £53.55 per week. This is currently under review." I asked Mr Darnborough to explain what he thought that meant, and his considered view is that it is likely to be the case that the assessment at the time of the hearing was under an automatic review.

    15. In my judgment, the representation which was made to the magistrates is ambiguous and is entirely suggestive of the fact that the assessment at the time of the hearing was not fixed. In other words, that it was in the process of review, exactly as the word says, that it is currently under review. In those circumstances, in my judgment the magistrates should have looked into this more carefully and should have considered - as a matter of law - whether it was appropriate to adjourn the hearing for the review to have been finalised. I accept that the precedent to which I have referred - the case of Farley - refers only to an appeal, where a notice of appeal has been lodged. However, I am satisfied that it is within the range of trigger events which the magistrates should have considered that a review falls into that range, and they should at least have made it clear whether they had considered adjourning pending the review and applied the authority of Farley. There is no reference to the case of Farley in the decision of the magistrates, and it is my view that in that respect the magistrates have erred in law in reaching their decision.

    16. My second concern over the presentation of this case is the magistrates' failure to comply with their obligation to make a decision as to whether a deduction of earnings order was an inappropriate means of securing payment. The transcript says this, on page 2.

    "Mr Donaghy has explained to me today that he has now set up his own limited company, so obviously he will be a director of that company. But that in itself will probably mean that he has control of the payroll and, as such, we will be saying that the deduction of earnings order will be an inappropriate means of securing payment."

    There are many problems with this assertion.

    17. Firstly, the representations are made in respect of a future event. They are all said in the future, and I quote, "will probably mean" and, "will be an inappropriate means of securing payment". For the magistrates to reach their decision, they should have been clear as to why a deduction from earnings order was an inappropriate means of securing payment at the date the order was made, not in the future.

    18. Secondly, the contention that Mr Donaghy will have control of the payroll and thereby be able in some way to create a situation where a deduction of earnings order was inappropriate is wholly without evidence, and the magistrates - as a matter of law - should have considered that properly and carefully.

    19. Thirdly, I make the point that there is nothing obvious about the fact that Mr Donaghy would be a director of that company. Setting up a company does not automatically mean that you are going to be a director. But in any event, a director is usually an employee of the company in addition to being an officer. These are matters which the magistrates should have looked into more carefully, and have erred in law in not doing so.

    20. Thirdly, I am concerned that the amount of assessment as claimed by the CSA clearly includes collection and enforcement charges, because it is says they do in margin 12 which reads:

    "The arrears period that the agency are looking at, your Worships, is from 29th March 2015 up to and including 28th October 2016. Now the amount outstanding - including collection and enforcement charges during that period - amount to £5,153.58. There have been payments being made by Mr Donaghy, and that is a total of £500. The balance outstanding therefore and requested is in the form of this liability order: £4,653.58."

    21. I have made the point to the CSA that section 33 does not specifically include collection and enforcement charges.

    22. Mr Darnborough has submitted that the law has changed and that there is some legislative provision which enables the collection and enforcement charges to be included. If that is the case, that law has not been put before the court, and its date of inception has certainly not been put before the court. On the law that the court is aware of, and taking the date of the hearing as being the relevant date, on the information I have, it appears to me that the magistrates have erred in law in including the collection and enforcement charges.

    23. It may be that I have misapplied the law by not being referred to it. If that is the case, then I can say no more other than that would not affect the outcome of this case in any way, as I am clear that this appeal will succeed on the first of the two grounds that I have mentioned, and I include the third subject to the question of law being interpreted correctly.

    24. I will make just a final point that the liability order is stated wrongly. It is only a penny. However, that is a matter which - had it been proceeded with - should be regularised. The liability order is for £4,653.59, whereas the judgment was for £4,653.58.

    25. For all those reasons, I find that the magistrates did err in law in reaching their conclusion, and therefore the appeal succeeds and the liability order is set aside.


Judgment, published: 05/12/2018

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Published: 05/12/2018

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