R(CS) 2/01
(Denson v. Stevenson and Anor)
Mr. H. Levenson CCS/3640/1999
29.7.99
CA (Simon Brown and Mummery LJJ)
27.6.00
Tribunal practice - request for adjournment by absent parent allegedly unable to attend on account of migraine in default of direction by earlier tribunal to attend and to produce documentary evidence - whether refusal to adjourn unlawful
Tribunal practice - Company Secretary failing to attend tribunal to give evidence relating to company's financial affairs and to produce relevant documentary evidence in default of witness summons - whether tribunal able to make findings of fact on such issues
Departure direction - earlier county court order on financial provision ancillary to divorce proceedings - whether doctrine of estoppel applies
On 15 January 1997 the person with care of two qualifying children applied for a departure direction in respect of a maintenance assessment relying on regulations 24 (diversion of income) and 25 (inconsistent life-style) of the Child Support Departure Direction and Consequential Amendment Regulations 1996. She alleged that the absent parent had been a partner in and then sole proprietor of a firm DG, which had been acquired by a different firm DG Limited, in which the absent parent was an employee, for less than its value. She further alleged the absent parent was living with a woman who was the company secretary of DG Limited, and his father was a director, and substantial assets were under the control of or available to the absent parent, although through a variety of methods he had disguised this. The Secretary of State referred the application to a child support appeal tribunal for determination. Meanwhile, on 22 July 1997 a consent order was made by a District Judge in the county court in relation to financial matters ancillary to the divorce between the parties. On 25 November 1997 the chairman of the tribunal issued directions requiring documentary and other evidence in relation to DG and directing both parties to attend the tribunal hearing, warning that if the directions were not followed the tribunal may draw adverse inferences. On 25 March 1998 all parties attended a tribunal but certain papers were submitted at the hearing and the tribunal decided to adjourn so that it and the parties could consider them and to arrange for a witness summons to be served on the Company Secretary requiring her to attend and produce the company accounts and documentary evidence of her own income. She applied for the witness summons to be set aside on the grounds that if both she and the absent parent were away from DG Limited on the same day the firm would have to be shut for that day which was "unacceptable". On 13 May 1998 the chairman refused to set it aside and on 26 May 1998 she sought leave to appeal to the Commissioner against that decision, which was refused by the chairman on 11 June 1998 on the ground that the Commissioner had no jurisdiction to entertain it.
The adjourned hearing by the tribunal was set for 12 June 1998 and at 9.30am on that date the absent parent's neighbour telephoned the tribunal and spoke to a clerk saying the absent parent had a migraine and his doctor has been called but that he wanted to attend the hearing, and requested a postponement. The clerk made a note of the call and referred it to the chairman who refused to postpone the hearing. The parent with care attended but the absent parent and the Company Secretary did not. The parent with care stated that she had seen the absent parent the previous day, he had seemed well, he had no history of migraine attacks, she regarded his absence as intentional and a friend of his had done a similar thing in the context of a court appearance. She pointed out that he had failed to comply with the chairman's directions and that the Company Secretary had ignored the witness summons. The Secretary of State's representative was content to proceed and the tribunal decided to proceed, noting the history of delay and evasion and the failure of the Company Secretary to attend or to send in the papers she was required to produced. It concluded that the alleged migraine attack was the sort of illness that could be relied on to persuade a doctor to issue a certificate and that the whole scenario was unconvincing. It also concluded that there was probably sufficient information available for a proper decision to be reached but if necessary the question of adjournment could be reconsidered in the course of the hearing. In the event no adjournment was found necessary. The tribunal allowed the Departure application. The absent parent appealed to the Commissioner.
Held, dismissing the appeal, that:
(1) regulation 11(6) of the Child Support Appeals Tribunal (Procedure) Regulation 1992 provided that if a party to the proceedings to whom notice had been given failed to appear at the hearing the tribunal may "having regard to all the circumstances including any explanation offered for the absence" proceed with the appeal notwithstanding the absence, that the tribunal did consider all relevant circumstances, including the directions given by the chairman of the tribunal on 25 October 1997 which had warned of the possible consequences of non attendance and the fact that hearing had already been adjourned once, and the tribunal had acted lawfully and reasonably and there was no breach of the rules of natural justice or of the requirements of fair procedure (Rose v. Humbles [1972] 1 All ER 314 distinguished) (para.15);
(2) the tribunal was not estopped from reaching their decision by virtue of the county court order because the court did not make any findings of fact, the proceedings before the child support appeal tribunal did not involve the same cause of action as the proceedings before the county court and whether relevant facts had been established for the purposes of regulations 24 and 25 were different issues from those litigated in the county court (para.16);
(3) the tribunal was entitled to proceed without the oral testimony of the Company Secretary even though a witness summons had been issued in relation to that witness (para.17).
The absent parent applied for permission to appeal to the Court of Appeal.
Held, dismissing the application for permission to appeal, that:
- it was not even arguable that the Commissioner had erred in law in holding that the tribunal were not in error of law by refusing to adjourn (para. 19);
- the county court order did not operate as an estoppel by convention to preclude a departure direction because the tribunal's jurisdiction was entirely separate from that of the county court and they were considering a separate issue, the county court had made no findings of fact, and there was neither inconsistency between its order and that of the tribunal nor was there any inhibition upon the tribunal reaching their own conclusion on the question of child support liability (para.20);
- the tribunal were entitled to have regard to the true situation underlying the corporate façade and were not limited to establishing the facts from an officer of the company or by way of witness summons (para. 21).
DECISION OF THE CHILD SUPPORT COMMISSIONER
- This appeal by the absent parent does not succeed. I confirm the decision given by the child support appeal tribunal on 12 June 1998 to the effect that the effective date of the child support assessment is 8 July 1996 initially but that from 2 December 1996 the assessment is amended to £113.90 weekly.
- During the course of this appeal the parties have found it difficult to focus on the issues in question. Several matters have been raised or considered which are not relevant for the purposes of my decision. These include difficulties in relation to access to or contact with the children, the business and personal activities of the absent parent's representative, the professional career and activities of the tribunal chairman and the contents or effect of an affidavit from the absent parent's brother (who is a solicitor) which appears never to have been produced in relation to these proceedings. At one stage there was a challenge to the accuracy of the tribunal's arithmetic and a suggestion that weekly and monthly figures had been confused. As I understand it, this suggestion has not been pursued and the accuracy of the calculations (as opposed to the accuracy of the facts found by the tribunal on which they are based) is no longer challenged.
- By virtue of the provisions of section 28A of the Child Support Act 1991 where a maintenance assessment is in force, the person with care or the absent parent may apply to the Secretary of State for a departure direction to be made under section 28F. There are various matters which must be taken into account but the principal issues are whether the case falls within one or more of the specified categories and, if it does, whether it would be just and equitable in all of the circumstances of the case to give a departure direction. The specified categories relevant to this appeal are set out in regulations 24 (diversion of income) and 25 (inconsistent life-style) of the Child Support Departure Direction and Consequential Amendment Regulations 1996. The grounds of appeal relate principally to procedural matters and it is not necessary for me to review in my decision all of the evidence in this case, although I have considered it all in relation to the findings made by the tribunal. However, it is necessary to set out the procedural history.
- The absent parent is the father and the person with care is the mother of two boys who are qualifying children for child support purposes. The parents were married to each other but separated at the end of 1994 and after briefly living together again, finally separated at the beginning of March 1995. On 8 July 1996 an order was made that the absent parent pay £4.80 weekly child support maintenance. On 15 January 1997 the person with care applied for a departure direction in respect of several of the specified categories. (The tribunal subsequently decided that no case had been made in respect of any of the categories except for regulations 24 and 25, the person with care has not challenged that decision, and I make no further comment in relation to those other categories.) In accordance with the provisions of section 28D(1)(b) of the Child Support Act 1991 the Secretary of State referred the application to a child support appeal tribunal for determination.
- Meanwhile, proceedings were pending in the County Court in relation to financial matters between the absent parent, the person with care and certain third parties. The absent parent and the person with care each swore affidavits in relation to their means and other financial matters. On 22 July 1997 a detailed order was made by the District Judge. The order was made by the agreement and with the consent of the parties and contains no findings of fact made by the court which are relevant for the purposes of the tribunal's decision.
- The essence of the mother's case in relation to regulations 24 and 25 is that the father had been a partner in and then sole proprietor of a firm DG, which had been acquired by a different firm DG Limited, at a price which was substantially below its true value. The absent parent was an employee of DG Limited. The absent parent was living with a woman to whom I shall refer as TT who was the company secretary of DG Limited, of which the fathers own father was a director, and substantial assets were in fact under the control of or available to the father (i.e. the absent parent), although through a variety of methods he had disguised this. The absent parent denied any impropriety and denied the specific allegations made by the mother.
- On 25 November 1997 the chairman of the tribunal issued detailed directions. Amongst other matters these required documentary and other evidence in relation to DG and directed both parties to attend the tribunal hearing. The chairman's directions included the statements that "if the directions are not followed the tribunal will draw such inferences as the actual evidence supports. Adverse inferences may be drawn from a failure to comply ... in particular the tribunal wish to question [the absent parent]. Adverse inferences may be drawn from a failure to attend in compliance with this direction".
- The tribunal met on 25 March 1998 to consider the matter. All parties attended. Papers were submitted at the hearing and the tribunal decided to adjourn so that it and the parties could consider these papers and to arrange for the attendance of TT in her capacity as company secretary and employee of DG Limited and to produce the company accounts as well as documentary evidence of her own income. A witness summons was served on TT in accordance with regulation 10 of the Child Support Appeal Tribunal (Procedure) Regulations 1992 and TT acknowledged service by letter of 5 May 1998. In that letter she applied for the summons to be set aside on the grounds that if both she and the absent parent were away from DG Limited on the same day this would mean that the firm would have to be shut down for that day which "is unacceptable". On 13 May 1998 the chairman refused to set aside the witness summons. In my view the chairman was quite right to refuse this application. A witness summons issued by legal authority is not to be regarded as unacceptable or treated in a less than serious manner.
- On 5 May 1998 the mother executed a change of name deed in which she relinquished and abandoned the use of the surname that she had shared with the father and adopted and assumed a different surname. On 26 May 1998 TT wrote to say that "I hereby wish to appeal and seek leave to appeal to the Commissioner" against the chairman's refusal to set aside the witness summons. The Commissioner has no jurisdiction to entertain such an application or appeal and on 11 June 1998 the chairman of the tribunal refused the application.
- The adjourned hearing by the tribunal was set for 12 June 1998. At 9.30 am on that date the clerk to the tribunal took a telephone call on behalf of the father to say that he "has a migraine and his doctor has been called. He wants to attend the hearing and requests a postponement". Technically an application for a postponement has to be in writing (regulation 8 of the Child Support Appeal Tribunals (Procedure) Regulations 1992) but the clerk put the telephone message in writing and referred it to the chairman who refused to postpone the hearing. However, quite apart from any power in the chairman to postpone the hearing at any time before it has started, the tribunal has the power under regulation 12(1) to adjourn the hearing at any time on the application of any party to the proceedings or of its own motion. The hearing of the appeal commenced as listed. The mother attended with a relative. Neither the father nor TT nor anybody to represent either of them, or anybody from DG or DG Limited attended. The tribunal raised the question of whether the hearing should be adjourned in view of these absences. The mother stated that she had seen the father the previous day, he had seemed well, he had no history of migraine attacks, a friend of his had done a similar thing in the context of a court appearance, she regarded his absence as intentional and she pointed out that he had failed to comply with the chairman's directions and that TT had ignored the witness summons. The Secretary of State's representative (inaccurately referred to as a child support officer) was content to proceed. In the absence of the parties the tribunal considered the matter and decided to proceed. It is recorded that:
"It noted the history of delay and evasion and the failure of [TT] to attend or to send in the papers she was required to produced. It concluded that the alleged migraine attack was the sort of illness that can be relied on to persuade a doctor to issue a certificate and that the whole scenario was unconvincing. It concluded that there was probably sufficient information available for a proper decision to be reached; if necessary the question of adjournment would be reconsidered in the course of the hearing. In the event no adjournment was found necessary".
- The tribunal made detailed findings of fact. In relation to regulation 24 it was satisfied that the account and explanation given by the mother was essentially correct. In relation to regulation 25 it made findings in respect of evidence relating to the lifestyle of the father. In my view the tribunal was entitled to make these findings on the basis of the evidence before it. £68.40 weekly income of the father had been taken into account in the original assessment. On the basis of regulations 24 and 25 the tribunal found that a further £379.00 weekly should be taken into account. The effect of this was to increase the maintenance assessment to £113.90 per week from 2 December 1996.
- On 14 August 1998 the father applied for leave to appeal to the child support Commissioner against the decision of the tribunal. On 18 August 1998 the chairman of the tribunal refused leave to appeal. The application was renewed before the Chief Commissioner who, after an oral hearing on 11 December 1998, gave leave to appeal.
- The father requested an oral hearing of the appeal. On 18 May 1999 I issued a direction giving all parties until 14 June 1999 to make final written submissions, including views on whether (and if so, why) I should hold an oral hearing of this appeal. The mother opposed an oral hearing on the basis that there was no evidence to support an appeal and that the father was trying to delay matters and cause further upset to her. The father dated his final submissions 15 June 1999 but they were not received in the Commissioner's office until 21 June 1999. This certainly did nothing to challenge the suggestion that throughout the history of this matter he has been seeking to delay proceedings. On 16 June 1999 I issued a direction refusing the request for an oral hearing on the basis that I was satisfied that the proceedings could properly be determined without a hearing.
- The father argues that the tribunal erred in law in refusing to adjourn and "erred in fact seeking to contravert the medical diagnosis of a professional general practitioner who had examined the [absent parent] on the morning of the hearing and his recommendations were known to the tribunal". There is no basis for saying that the recommendations of anybody who had examined the absent parent that morning were known to the tribunal. The chairman (and subsequently the tribunal) had received a message that the father was stating that he had a migraine and that his doctor had been called. On 16 December 1998 Dr. Brewer reported that he had attended the father on 12 June 1998 who had "a severe incapacitating headache probably migraineous. He was therefore unable to attend work or court". Even this document was not sent to the Commissioner's office until 14 January 1999. In my view, and in the circumstances, the tribunal was entitled to be dubious about the reason for the absent parent not attending and not wishing the matter to go ahead. There has been some discussion of whether he had sought a postponement or adjournment and on the technical difference between the two, but that does not affect the main point.
- Regulation 11(6) of the Child Support Appeals Tribunal (Procedure) Regulation 1992 provides that if a party to the proceedings to whom notice has been given fails to appear at the hearing the tribunal may "having regard to all the circumstances including any explanation offered for the absence" proceed with the appeal not withstanding the absence. In the present case the tribunal did consider all relevant circumstances, the directions given by the chairman of the tribunal on 25 October 1997 had warned of the possible consequences of non attendance, and the hearing had already been adjourned once. I agree with the comments made on behalf of the Secretary of State in paragraph 5 of the submission of 17 February 1999. The tribunal acted lawfully and reasonably and there was no breach of the rules of natural justice or of the requirements of fair procedure. The father has stated that he is relying on the Court of Appeal decision in Rose v. Humbles (Inspector of Taxes) [1972] 1 WLR 33. However, the Court of Appeal decision is irrelevant to this point and I suspect that the intended reference is to the decision of Mr. Justice Buckley in the hearing of that case in the Chancery Division reported at [1970] 2 All ER 519. The judge ruled that the adjournment of the hearing by any tribunal is a matter prima facie [on the face of it or in the first place] for the discretion of the tribunal and the exercise of that discretion will not be interfered with by a appellate court in normal circumstances. If the discretion has been exercised in such a way as to cause what can properly be regarded as an injustice to any of the parties effected, then the proper course for an appellate court to take is to ensure that the matter is further heard. In that case it was difficult to see why the Commissioners had found it inappropriate to allow for an adjournment for the taxpayers evidence to be taken. However, the case before me does not involve a dispute between one private individual and a government or national or public department or agency. The interests of the qualifying children and of the mother also have to be considered and (unlike in the case before Mr. Justice Buckley) it is abundantly clear why the tribunal thought it inappropriate to adjourn the matter any further. Were the law to be otherwise, the father would have been in a position to prevent the tribunal ever reaching a determination adverse to him.
- The father's next ground of appeal was that the tribunal erred in law in that its finding of fact overturned the findings of the County Court and that only the Court of Appeal had the power to overturn the County Court's findings of fact. I observe that the County Court is not a "superior tribunal" as suggested by the absent parent. As I have indicated above, the County Court did not make any findings of fact and its order was made by consent. There is a legal doctrine known as res judicata, part of which is "cause of action estoppel". This arises where the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties and having involved the same subject matter. In such a case there is an absolute bar on bringing the same cause of action unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment. There is another form of estoppel known as "issue estoppel" which arises where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue (Lord Keith in Arnold v. National Westminster Bank PLC [1991] 2 AC 93 at 104-5). The proceedings before the child support appeal tribunal do not involve the same cause of action as the proceedings before the County Court and whether relevant facts had been established for the purposes of regulations 24 and 25 were different issues from those litigated in the County Court. There is no substance to this ground of the appeal.
- The father also argues that having issued a witness summons the tribunal was wrong to proceed to make findings of fact without hearing that witness. However, I agree with the submission from the representative of the Secretary of State (paragraph 9) that the tribunal was entitled to proceed without the oral testimony of a particular witness, even though a witness summons might have been issued in relation to that witness, and that the chairman of the tribunal had made clear the consequences should that witness fail to attend and/or give evidence.
- I have considered various other points put forward by or on behalf of the absent parent, but they are all either detailed examples of the general grounds of appeal or relate to the matters that I have indicated I regard as irrelevant.
- For the above reasons this appeal by the absent parent does not succeed.
Date: 29 July 1999 (signed) Mr. H. Levenson
Commissioner
The absent parent applied for permission to appeal to the Court of Appeal. The decision of the Court of Appeal on that application follows.
DECISION OF THE COURT OF APPEAL
The Applicant appeared in person.
Mr. D. Forsdick (instructed by the Social Security Commissioner, Court Service, Office of Social Security and Child Support Commissioners, 5th Floor, Newspaper House, 8-16 Great News Street, London EC4A) appeared on behalf of the 1st Respondent.
The 2nd Respondent did not appear and was not represented.
Judgment
- LORD JUSTICE SIMON BROWN: This application arises in the context of child support assessment. The applicant and his ex-wife, Mrs. Stevenson, had two sons who are qualifying children for child support. He is the absent parent, she the parent with care. On 8 July 1996, on the basis of a declared weekly income of £68.40, the applicant's liability for child maintenance support was assessed at £4.80 per week. Before the court today is the applicant's application for permission to appeal against the decision of Mr. Commissioner Levenson of 29 July 1999, by which he dismissed the applicant's appeal against the decision of the child support appeal tribunal ("CSAT") of 12 June 1998, amending his assessment from £4.80 per week to £113.90 per week with effect from 2 December 1996, that increased assessment being based upon a weekly income of £379.
- The circumstances in which the application arises can be sufficiently described as follows. On 15 January 1997 Mrs. Stevenson applied for a departure direction on various grounds, including most materially those of diversion of income and inconsistent life style. In a sentence, Mrs. Stevenson alleged that the applicant was living with a Mrs. Tina Turner; that he had manipulated his financial arrangements, including selling his company at an under value, in order to reduce his child support obligations; and that he had a high standard of living which showed his financial declarations to be false.
- The application was duly referred by the Secretary of State to the CSAT. On 25 October 1997 a CSAT chairman gave a number of directions to the parties involved. These included clear orders that the applicant provide very extensive documentation and information, and also that he attend the subsequent appeal hearing in order that he could be questioned by the tribunal. The direction documents expressly stated "Adverse inferences may be drawn from a failure to attend in compliance with this direction". As to the particular documents and information required, let me read the eight categories with regard to which Mr. Denson was required to assist.
"i Documentary evidence in relation to the sale of Deka Gifts, including the correspondence leading the sale, all valuations, whether of the business or of assets of the business and including evidence of the sale price and of evidence of payment of the sale price.
ii Statements in respect of all and any accounts in his name or held on his behalf whether solely or jointly with others in bank or building society or other institution whether current or deposit accounts for the period the 1.1.96. to the 1.6.97.
iii An explanation of his occupation and the terms of occupation of the following addresses, with dates and documentary evidence in support [and then there are listed three addresses].
iv Details of the business address of Deka Gifts prior to the sale of the business, supported by documentary evidence.
v The address at which he currently works, supported by documentary evidence.
vi Details of his personal expenditure and domestic outgoings with documentary evidence for the period from the 1.1.96 to the 1.6.97.
vii The accounts of Deka Gifts for the two complete years before the sale and the closure accounts.
viii Tax returns and assessments for the two tax years before the sale of Deka Gifts and the subsequent tax year."
- The appeal hearing was set for 25 March 1998. Because by that date Mr. Denson had failed to produce any documents whatsoever with regard to any of those eight categories, the tribunal concluded that they had no alternative but to adjourn that particular hearing. They directed that it be relisted before the same tribunal for hearing at 10.00 am on 12 June with half a day allowed. They further directed that a witness summons for attendance at that adjourned hearing should be served on Mrs. Turner:
"
in her capacity as Company Secretary and employee of Deka Gifts Limited and to produce the company accounts for financial years to 30.6.97 and documentary evidence of her income for the tax years to April 98 including her bank statements to show income credited."
- In the event, when the appeal hearing was due to start on 12 June neither Mr. Denson nor Mrs. Turner, nor anyone on their behalf, was present; and nor, I may add, had Mr. Denson even by that date provided a single document under any of the eight categories which he had been ordered to produce some eight months previously.
- What happened was this. When the witness summons had been served on Mrs. Turner, she had applied to have it set aside. The ground of application had been that if both she and Mr. Denson were away from the business, it would have to be shut down for the day which "is unacceptable". On 13 May the chairman refused her application - quite rightly, as the Commissioner was later to say and as seems to me perfectly obvious. On 26 May Mrs. Turner sought permission to appeal to the Commissioner against that ruling. That application, however, was inevitably refused. There was indeed no jurisdiction in the Commissioner to entertain such an appeal. True it is that the notice refusing that application for permission to appeal did not reach Mrs. Turner before the hearing date. But it need hardly be said that that gave her no possible reason to assume that she could therefore ignore the summons.
- As for Mr. Denson himself, what happened was that at about 9.30 on the morning of the hearing, someone, Mr. Denson tells us today that it was a Miss Sue Gunstone, who was a neighbour but is now an employee of his, telephoned the tribunal on his behalf. The note taken by the tribunal clerk was that he:
"Has a migraine and his doctor has been called. He wants to attend the hearing and requests a postponement".
- When the tribunal convened they raised the matter of Mr. Denson's absence and considered whether or not to adjourn the hearing. Let me read the tribunal's own account of this matter, as it appears in their written determination:
"Mrs. Stevenson indicated that she had seen Mr. Denson the day before and he seemed well, he had no history of migraine attacks and she said that a friend of his had done a similar thing in the context of a court appearance. She was not surprised by his absence which she regarded as intentional. She pointed out that he had still failed to comply with the Directions and that Ms. Turner had ignored the witness summons. The CSO [the child support officer] was content to proceed in Mr. Denson's absence. The parties left the room and the tribunal considered the situation and decided to proceed. It noted the history of delay and evasion and the failure of Ms. Turner to attend or to send in the papers she was required to produce. It concluded that the alleged migraine attack was the sort of illness that can be relied on to persuade a doctor to issue a certificate and that the whole scenario was unconvincing. It concluded that there was probably sufficient information available for a proper decision to be reached; if necessary the question of adjournment could be reconsidered in the course of the hearing. In the event no adjournment was found necessary."
- The hearing therefore took place in Mr. Denson's absence.
- I can go at once to the tribunal's conclusions on the two central issues, namely Mr. Denson's diversion of income and his inconsistent lifestyle, passing over a number of detailed factual findings by the tribunal:
"Diversion of income. The tribunal has no difficulty in concluding that Mr. Denson and Mrs. Turner live together in one household as husband and wife and have done so from the time of the purchase of 28 Oakwood Avenue, although probably ever since he moved to Brockenhurst to "lodge" at her previous home. Other subsequent arrangements have been short term designed for the needs of the time to mislead the court and others. The tribunal does not rely on the evidence of Mrs. Stevenson to reach this conclusion although it accepts what she says. There is ample evidence from the enquiry agent and the neighbour apart from the length and nature of the association, both personal and business.
As indicated by its findings, the tribunal is satisfied that the establishment of Deka Gifts Ltd was a device to mislead and conceal the financial position of Mr. Denson. He was able to hide behind the "company veil" something not open to him to the same extent as a sole proprietor. Although Mr. Denson has no legal control over the company it is clearly his creature. It took over from Deka Gifts without interruption which must have been to preserve goodwill, and he does the same job now as he did then. Nothing has changed in relation to him except the legal vehicle for the business. Without the skill, experience and time of Mr. Denson, the company would be nothing. He does accordingly have the ability to control the amount of income he receives. The control exists because of the factors above mentioned and the fact that the officers of the company are Mrs. Turner and his elderly father. In the context of the regulation the word, 'ability' indicates that it is the reality of control that is important. He has an ability to control the amount of income he receives from Deka Gifts Limited. The failure of Mrs. Turner to answer the witness summons and the bogus reason given in support of her application to set it aside is confirmation of the control and influence exercised by Mr. Denson. If she were a free agent there would have been no reason for her not to comply or at the least to send in the documents in question when seeking to have the summons set aside. The tribunal is satisfied that he has by virtue of his control unreasonably reduced the amount of his income which would otherwise be taken into account for the purposes of the normal assessment. The income has been diverted to Mrs. Turner and/or others so as to avoid provision of income for himself.
Reg. 25, Lifestyle inconsistent. Mr. Denson's behaviour indicates expenditure on daily living well in excess of the cash available to him on his declared figures. The level and nature of socialising in pubs and at the club requires a substantial amount of ready cash. He has been spending money on the house by the purchase of double glazing units and bricks of demolition sites. This requires cash as does the purchase and running of the cars and caravan together with the foreign holidays. There is no evidence that this is financed by capital belonging to him or Mrs. Turner. If it is financed by her, for the reasons given in relation to diversion of income Mr. Denson is able to control and influence the amount of income she receives. In this case as before Mr. Denson has had the opportunity to account for his financial circumstances but has wilfully declined to do so in order to make the situation as difficult as possible for the CSA and Mrs. Stevenson in the hope that he can avoid liability to support his children. The tribunal approaches this issue in the same way as that for diversion of income. The case is established and it is appropriate to use the same figures in both cases to create one level of departed income."
- The tribunal then considered whether in those circumstances it was just and equitable to make the direction and duly concluded that it was.
- The applicant then obtained permission to appeal to the social security Commissioner; an appeal which, of course, just like any further appeal to this court, is confined to errors of law. The Commissioner dealt with the appeal on the documents in a very full and careful written determination extending to seven pages. Having set out the history, he then turned to the principal ground of appeal, which was the tribunal's refusal to have adjourned the hearing on 12 June 1998. As to that his determination reads as follows:
"The father argues that the tribunal erred in law in refusing to adjourn and erred in fact seeking to contravert the medical diagnosis of a professional general practitioner who had examined the [absent parent] on the morning of the hearing and his recommendations were known to the tribunal. There is no basis for saying that the recommendations of anybody who had examined the absent parent that morning were known to the tribunal. The chairman (and subsequently the tribunal) had received a message that the father was stating that he had a migraine and that his doctor had been called. On 16 December 1998 Dr. Brewer reported that he had attended the father on 12 June 1998 who had a severe incapacitating headache probably migraineous. He was therefore unable to attend work or court. Even this document was not sent to the Commissioner's office until 14 January 1999. In my view, and in the circumstances, the tribunal was entitled to be dubious about the reason for an absent parent not attending and not wishing the matter to go ahead. There has been some discussion of whether he had sought a postponement or adjournment and on the technical difference between the two, but that does not affect the main point.
- Regulation 11(6) of the Child Support Appeals Tribunal (Procedure) Regulation 1992 provides that if a party to the proceedings to whom notice has been given fails to appear at the hearing the tribunal may "having regard to all the circumstances including any explanation offered for the absence" proceed with the appeal not withstanding the absence. In the present case the tribunal did consider all relevant circumstances, the directions given by the chairman of the tribunal on 25 October 1997 had warned of the possible consequences of non attendance, and the hearing had already been adjourned once. I agree with the comments made on behalf of the Secretary of State in paragraph 5 of the submission of 17 February 1999. The tribunal acted lawfully and reasonably and there was no breach of the rules of natural justice or of the requirements of fair procedure. The father has stated that he is relying on the Court of Appeal decision in Rose v. Humbles (Inspector of Taxes) [1972] 1 WLR 33. However, the Court of Appeal decision is irrelevant to this point and I suspect that the intended reference is to the decision of Mr. Justice Buckley in the hearing of that case in the Chancery Division reported at [1970] 2 All ER 519. The judge ruled that the adjournment of the hearing by any tribunal is a matter prima facie [on the face of it or in the first place] for the discretion of the tribunal and the exercise of that discretion will not be interfered with by a appellate court in normal circumstances. If the discretion has been exercised in such a way as to cause what can properly be regarded as an injustice to any of the parties effected [sic], then the proper course for an appellate court to take is to ensure that the matter is further heard. In that case it was difficult to see why the Commissioners had found it inappropriate to allow for an adjournment for the taxpayers evidence to be taken. However, the case before me does not involve a dispute between one private individual and a government or national or public department or agency. The interests of the qualifying children and of the mother also have to be considered and (unlike in the case before Mr. Justice Buckley) it is abundantly clear why the tribunal thought it inappropriate to adjourn the matter any further. Were the law to be otherwise, the father would have been in a position to prevent the tribunal ever reaching a determination adverse to him."
- He then turned to certain subsidiary grounds of appeal and rejected them too.
- The essential basis of the present application is that the Commissioner himself erred in law in failing to regard the tribunal's refusal of an adjournment as unfair and as having resulted in Mr. Denson suffering a substantial injustice. Allied to the application for permission to appeal is an application to produce fresh evidence, consisting of a large bundle of documents including, at last, some of the documents originally ordered to be produced by the tribunal's directions of 25 October 1997 which, it is suggested, tend to show that Mr. Denson would have been able to give evidence of some value on his own behalf and to have cross-examined his ex-wife and her witnesses so as, perhaps, to influence the tribunal's factual findings.
- I have to say, however, that I find these documents entirely unpersuasive on any point. On the contrary, I cannot but note the striking continuing omission from the court's papers of any affidavit from the doctor who attended the applicant on 12 June 1998 describing in detail the events of that day, let alone confirming what Mr. Denson says, both as to having suffered a history of migraine attacks and indeed (by way of explanation for his failure over very many months to produce a single document as he had been ordered to do) that he was on the verge of a breakdown. Certainly there is a document of 1988 suggesting a whiplash injury, but there is nothing more recent. That aside, one knows from one's own experience that, if an occasion is regarded as sufficiently important, even a migraine attack will not prevent the sufferer's attendance.
- Against the background of this applicant's recurrent failure to produce any single document such as he had been ordered to provide; the adjournment which for that very reason had already been forced upon the tribunal on 25 March 1998; Mrs. Turner's inexcusable failure to attend in response to the witness summons served upon her, a failure yet more remarkable given that Mr. Denson was in the event not going to attend; and the clear evidence of business manipulation which underlay these proceedings in the first place, I find myself entirely in sympathy with the CSAT's own conclusion:
"That the alleged migraine attack was the sort of illness that can be relied on to persuade a doctor to issue a certificate and that the whole scenario was unconvincing."
- I may add that such limited interchange as the court had with Mr. Denson today reinforced me in that view. This tribunal were perfectly entitled to say that enough was enough. The interests of others besides this applicant were at stake. The applicant could in those circumstances properly be adjudged to be a scheming parent playing the system.
- The facts of this case, I may add, could hardly be more different from those of Rose v Humbles, (reported in the Court of Appeal at [1972] 1 All ER 314, but more usefully at first instance before Buckley J at [1970] 2 All ER 519) where the applicant, Mr. Rose, had suffered a coronary thrombosis which had prevented his attending the first hearing, and had then had to undergo a further operation before the second hearing, so that he had plainly been unable to attend that second hearing although he would probably have been able to attend had the hearing been adjourned for some two or three months. Although, as I said, it is clear that Mr. Rose could not attend that second hearing, it is noteworthy that his doctor, his accountant and his son all did attend and, indeed, all gave evidence. It is perhaps unsurprising in those circumstances that the High Court adjudged the tribunal's refusal to adjourn to have produced a substantial injustice.
- For the reasons given, I take a wholly different view in the circumstances of the present case. It is not even arguable that the Commissioner here, on the appeal to him, erred in law by failing to accede to the applicant's request that he direct a fresh tribunal hearing.
- The other proposed grounds of appeal are, if anything, yet more ill-judged. I need mention only two. A county court order had been made by consent by the district judge in the Bournemouth County Court on 22 July 1997 by which financial arrangements between the parties were agreed. It is suggested that this order operated as an estoppel by convention to preclude Mrs. Stevenson from seeking, or the tribunal from making, a departure direction, ie an increase in child maintenance. The proposition is absurd. The tribunal's jurisdiction is entirely separate from that of the county court and they were considering a quite separate issue. The county court had made no findings of fact and there is neither inconsistency between its order and that of the tribunal, nor was there any inhibition upon the tribunal reaching their own conclusion on the question of child support liability.
- The other ground I just touch upon is the suggestion that the tribunal here was not entitled to pierce the corporate veil. Mr. Denson submits that the only way that the tribunal were entitled to establish the facts was from an officer of the company or by way of witness summons. Putting aside the irony of Mrs. Turner's failure to attend in response to just such a summons, the proposition is simply wrong. The tribunal were perfectly entitled to have regard to the true situation underlying the corporate facade and this is what they did.
- The other proposed grounds of appeal are all simply attempts to reopen the facts. That, of course, is something upon which this court will not embark. I would accordingly refuse the application for permission to appeal.
- LORD JUSTICE MUMMERY: I agree.
Order: Application to produce further evidence allowed. Application for permission to appeal refused.
