Scottish Sheriff Court Decisions

SHERIFFDOM OF LOTHIAN AND BORDERS Case Number: B175/13
	Judgment by SHERIFF PRINCIPAL MHAIRI M STEPHEN in appeal by SECRETARY OF STATE FOR WORK AND PENSIONS, THE CHILD SUPPORT AGENCY, PO Box 20, Edinburgh, EH91 5BD Appellant against JOHN SCOTT ANDERSON, residing at 1/5 Margaret Rose Way, Edinburgh, EH10 7EP Respondent ___________________________

Act: Kerr, Solicitor, Harper Macleod

Alt: Thorley, Solicitor, Thorley Stephenson

EDINBURGH, 8 April 2014

The Sheriff Principal having resumed consideration of the cause refuses the appeal adheres to the sheriff's interlocutor of 21 May 2013 subject to the following amendment by inserting the words "for the period from 15 May 2009 to 24 January 2013" after the word "Sterling" where it appears in the fifth line of the interlocutor; thereafter finds the appellant liable to the respondent in expenses of the appeal and allows an account of expenses to be lodged and thereafter remitted to the Auditor of Court to tax and to report.

(signed) Mhairi M Stephen

NOTE:

1. The appellant is the Secretary of State for Work and Pensions, (as the Child Support Agency), in terms of the Child Support Act 1991 ("the 1991 Act"). The appellant applied to the sheriff for a liability order in respect of arrears of child maintenance said to be due and unpaid by the respondent, Mr Anderson, as father of two children under an assessment by the Child Support Agency in terms of s.33 of the 1991 Act.

2. The respondent is John Scott Anderson. He opposed the grant of a liability order but does not appeal the sheriff's decision to make a liability order in the sum of £9,828.88. Mr Anderson represented himself before the sheriff. He was represented by Mr Thorley, solicitor at the appeal hearing.

3. The parties are familiar adversaries. Mr Anderson disputes the grant of a liability order principally on the basis that he has made voluntary payments direct to the mother of his children Ms F. Mr Anderson has consistently asserted that he has paid any monies due under the Statutory Maintenance Assessment by way of these direct payments. Indeed, he insists that he has paid in excess of the sum claimed. There had been an earlier application involving the same parties to which the sheriff refers. A previous summary application for a liability order relating to a maintenance assessment to May 2009 proceeded to proof. At proof the respondent was successful in persuading the sheriff that he had made voluntary payments to Ms F in satisfaction of the maintenance assessment. Ms F gave evidence on behalf of Mr Anderson to that effect. Put another way the appellant in the previous case was unable to satisfy the sheriff that the sum in question "had not been paid" in terms of section 33(3) of the 1991 Act.

4. Section 33 of the Child Support Act 1991 sets out the first step in the process of collection and enforcement of child support maintenance. The application for a liability order is that first step. The granting of a liability order opens the door to a variety of enforcement measures. Apart from the usual diligence the liable person may face imprisonment or disqualification from driving. In terms of section 33(3) the court comes under a duty to make the order provided that the court is satisfied (1) that the sums in question had become payable, (2) by the defender as the liable person and (3) that those sums have not been paid. Sub-section 4 makes it abundantly clear that the sheriff cannot question the maintenance assessment under which the payment of child support maintenance falls to be made. In other words the sheriff cannot question the periodical payment of child support maintenance which is fixed by the maintenance assessment. That is the preserve of the Child Support Agency who are required to apply the statutory rules. If a liable person wishes to challenge the calculation of child support maintenance there is provision for appeal to the Child Support Appeal Tribunal. The sheriff's jurisdiction in determining applications for liability orders is in respect of enforcement.

5. The law is well settled and the authoritative interpretation of the court's function is set out by Lord Nicholls of Birkenhead in the House of Lords case of Farley v Secretary of State for Work and Pensions (No 2) [2006] 1 WLR 1817. The 1991 Act is UK legislation and no distinction applies between Scotland and England. Lord Nicholls considered the legislation in detail and at paragraph 16 stated:

"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 pre-requisites set out in sections 4 to 6."

6. Although the court's function is limited by the terms of the statute it does not mean that the court is precluded from looking at the amount sought in the liability order and determining whether that amount is payable and has not been paid. Indeed, it is precisely the court's duty to be satisfied on these points. The statutory basis for the liability order was not addressed in any detail in the appeal and there appeared to be consensus on the correct interpretation of the court's function. The only point in this appeal related to the sheriff's decision on the appellant's minute of amendment which sought to increase the sum sued for from £9,828 to £23,739 (being the sum originally sought by way of a liability order when the application was first lodged). The allowance or refusal of an amendment is essentially the exercise by the sheriff of his discretionary function.

7. In order to place the amendment procedure in context it is necessary to look briefly at the procedural history of this case.

8. On 29 January 2013 the appellant lodged this summary application seeking a liability order in the sum of £23,739 payable by Mr Anderson for the period 15 May 2009 to 24 January 2012 and still unpaid. The appellant immediately sought warrant to inhibit on the dependence which was refused prior to service. A further hearing was assigned on 15 February 2013 following service when Mr Anderson, the respondent, appeared to oppose the motion which was again refused. Mr Anderson lodged a defence or objection to the liability order on the basis that any sums due had been paid and, in any event, as at 24 January 2013 if any sums were due (which was denied) the sum at debit, according to the appellant's own calculation was £9,828.88. At a hearing on 3 April 2013 the appellant made a formal motion to the sheriff to amend the application by reducing the amount of the liability order to £9,828.88 on the face of it in line with this part of the respondent's defence. The amendment was allowed and proof fixed for 21 May 2013.

9. Prior to the proof the appellant lodged a further minute of amendment seeking to increase the sum sued for by reinstating the original figure of £23,739. The amendment also sought to amend the period of arrears up to 24 January 2013. The motion was opposed and was heard prior to the proof commencing. The sheriff sets out the argument for and against the motion and his decision and the reasons for his decision at paragraphs 11 to 13 of his note. The sheriff refused the amendment and proceeded with the proof on the application for a liability order for the restricted amount of £9,828 which after hearing evidence he granted. Nothing of significance turns on the sheriff's assessment of the evidence at proof. The issue on appeal is the refusal of the amendment which had the effect of limiting the appellant's application for a liability order to the amount which the appellant himself had decided on by formal amendment in April 2013.

10. It is against that procedural background that the appeal proceeds.

SUBMISSIONS FOR THE APPELLANT

11. Mr Kerr confirmed that the point of the appeal relates to the sheriff's decision on the minute of amendment which he refused on the day of proof. Mr Kerr is critical of the sheriff's reasoning in this regard.

12. If the sheriff refused the amendment due to the appellant being personally barred from so doing that would be an error in law. There was no submission on the matter of personal bar and the necessary requisites for personal bar are absent. In any event Mr Kerr posed the question what was the appellant personally barred from doing? Was it (1) from amending to reflect the higher and original amount of the liability order or (2) was he personally barred from seeking a liability order for the sum originally sought? Either proposition constitutes an error in law. There is a distinction to be drawn in law between the concept of personal bar and the exercise of discretion in respect of the amendment. I was referred to the pre-eminent authority on personal bar Gatty v MacLaine 1921 SC (HL) 1 and the dicta of the Lord Chancellor. Mr Kerr looked at the legal concept of personal bar with reference to his third authority Reid & Blackie on Personal Bar. All elements of personal bar must be met and the two principal elements being "inconsistency" and "unfairness". In particular, in the present case there was no question of prejudice to the respondent. At least no prejudice is mentioned by the sheriff in his note. Mr Kerr did not accept that the other elements had been met.

13. In any event Mr Kerr argued that the legal concept of personal bar or estoppel does not apply to a public authority in the discharge of its statutory duties. The public authority has to act in accordance with its statutory function and there is a public interest that it does so unfettered by the legal concept of bar. It was observed that there is no Scottish authority directly in point however the English decisions on estoppel suggest that the concept of personal bar or estoppel does not apply to public authorities. In this regard I was referred to the House of Lords decision in Reprotech 4 v East Sussex County Council [2003] 1 WLR 348. I was referred specifically to the dicta of Lord Mackay of Clashfern and Lord Hoffman who gave the leading opinion. It was submitted that a public authority cannot be "estopped" from exercising a statutory discretion or performing a public duty.

14. Whether personal bar does or does not apply to public authorities the necessary elements of personal bar are not made out in this case. Returning to the matter of prejudice Mr Kerr underlined that there was nothing on the matter of prejudice in the sheriff's note or reasoning. The respondent did not claim prejudice. He was objecting to the liability order no matter what sum was sought by the appellant. Where is the prejudice? There is no prejudice stated. The sheriff does not set out any of the ingredients necessary for personal bar.

15. I was reminded of the appellate court's function with regard to discretionary matters. The authorities are set out in Macphail Chapter 10. It is accepted that amendment and the allowance or otherwise of a minute of amendment is a matter within the discretion of the sheriff and will depend on the stage of the proceedings; the nature and substance of the amendment together with any question of prejudice. The nature of this amendment is far removed from stating a new case cf Thomson v City of Glasgow Council 1962 (HL) 36. The amount sought by way of a liability order was a simple computation of the amount of the assessment (which is not susceptible to challenge) multiplied by the number of weeks up to January 2013 when the rate of the assessment altered. Accordingly, even if personal bar does apply to public authorities the elements of personal bar not being satisfied, there is a clear error by the sheriff. He misdirected himself in law by taking account of an irrelevant consideration namely, personal bar. Accordingly, if I find that the personal bar is not made out and the sheriff wrongly took account of personal bar it is open to me to look at matters anew and decide on the amendment and allow decree for a liability order in the amended or higher sum. Otherwise, I may simply recall the sheriff's interlocutor and remit the matter back to the sheriff to consider the amendment anew.

SUBMISSIONS FOR THE RESPONDENT

16. Mr Thorley appeared for the respondent and had two main propositions firstly, the sheriff was entitled to refuse the amendment for the reasons which he states leaving aside the question of personal bar and the appeal should be refused. Secondly, and this was Mr Thorley's esto position, the ingredients of personal bar are present in this case.

17. Mr Thorley considered the complicated and confused background to the appellant's various applications for a liability order. The computations by the CSA were contradictory and unclear. The issue, as far as the respondent is concerned, relates to what, if anything, is payable and that is before taking account of the voluntary payments which he asserts he has made to the mother of his children.

18. On the matter of prejudice the respondent was entitled to believe that the CSA accepted his objection to the amount of the liability order originally stated. He produced the CSA computation in the sum of £9,828 which is significantly lower than the original figure of £23,379. This computation and statement is provided by the appellant and lodged by the respondent with his objection to the order. The previous proceedings against the respondent are highly relevant. The sheriff refused to make a liability order on the basis of voluntary payments made. The issue all along has been firstly, the amount allegedly outstanding on his account and the voluntary payments which the respondent makes. When the appellant amended the sums sought to the exact figure which corresponded with the information he had been provided with by the CSA, he was entitled to believe that the appellant had accepted that significant leg of his defence or objection. He was entitled to believe that having amended to £9,828 that was the maximum which could be sought by way of liability order and that would be the figure in issue at proof. This had been a significant concession and understandable due to the documentary evidence produced by the respondent. The amendment to £9,828 sent the clear message to the respondent that this was the amount that was at stake at proof and it is quite irrelevant that the respondent was prepared to argue that any amount was disputed by him. Had the higher amount been in his contemplation he would have taken the necessary steps to ensure that Ms F attended the proof even by citation. Accordingly, there is very significant prejudice to the respondent.

19. In any event the sheriff did exercise discretion. He looked at the interests of justice and the stage proceedings had reached. The respondent's position is that the sheriff did not mention personal bar in his oral decision.

20. The complicated background to these proceedings is relevant to the question of prejudice. The respondent has had more than 13 appearances in court over two processes. He has faced repeated motions to inhibit on the dependence of the proceedings. He has had various oral statements from the CSA as to the state of the account and has received a written statement showing a balance of £9,828.

21. The earlier proceedings had proceeded to a defended proof and the respondent's submissions had been accepted by the sheriff and the application for a liability order had been refused. These proceedings were again about voluntary payments and the sheriff's decision had not been appealed.

22. Mr Thorley drew my attention to the authorities which he had lodged on the matter of amendment and the discretionary powers of the sheriff or judge on amendments. I was also referred to Macphail Chapters 10 and 18.

DECISION

23. The sole issue in this appeal is the sheriff's decision to refuse the appellant's brief minute of amendment to increase the amount of the liability order sought by increasing the monetary figure from £9,828 to £23,739, being the original figure sought when the summary application was lodged in court. The amendment also sought to alter the period of assessment and the liability order up to January 2013. The motion to amend the crave was heard on the morning of the proof. The motion was opposed by the unrepresented respondent as the liable person in terms of the 1991 Act.

24. The sheriff in his note records that the only reason given in support of the motion was that a mistake had occurred - without further elaboration. Crucially, the respondent not only opposed the amendment but sought an adjournment of the proof irrespective of the sheriff's decision on the appellant's motion. The reason for seeking adjournment in the event of the motion being granted is easy to understand, however it is not immediately obvious from the sheriff's note what reason was given for adjournment otherwise. The sheriff records that "the respondent said that he had prepared for opposing the motion and did not understand the proof could take place immediately thereafter and sought an adjournment,".

25. The sheriff's reasoning can be found in paragraph [13]. That paragraph begins with what can be described as comment by the sheriff. The sheriff goes on to compare these proceedings with eviction cases where arrears of rent, are ongoing and fluctuating, whereas CSA liability order proceedings refer to a specific period in the past where the arrears are fixed when proceedings commence. It is reasonable to say that the respondent in such proceedings requires to know in precise terms the monetary figure for which a liability order is sought. That monetary figure represents in effect the statement of arrears on the child maintenance account. That being so in the normal course that sum should be readily ascertainable and certain. As I have observed these proceedings are such that the granting of the liability order opens up for the appellant a range of enforcement options including imprisonment. In such proceedings the liable persons are frequently unrepresented. There is therefore a need for simplicity, clarity and precision.

26. Returning to the sheriff's note paragraph [13] the sheriff goes on to mention personal bar or certainly the language of personal bar. The sheriff considers the previous amendment of the monetary value of the liability order downwards from £23,739 to £9,828 on 3 April 2014. Due to a combination of the decision to make a formal amendment to reduce the crave and the lack of an explanation for the late amendment to reinstate the original figure that the appellant was "personally barred from seeking to re-amend the pleadings in the way sought." The sheriff does not explain his reference to personal bar or discuss the requirements for personal bar as set out in Gatty v MacLaine. However, it appears that the sheriff in that part of his note is referring to inconsistency and unfairness. There is, however, no reference to actual or potential prejudice to the respondent.

27. It appears to me that the sheriff is using the language of personal bar but has not applied the legal concept of personal bar. If he had applied personal bar there would have been no need for him to carry on with his balancing exercise. He does so by considering and taking into account the appellant's public duty in enforcing maintenance payments by absent parents but balancing that with the interests of justice. The sheriff goes on to consider the stage in these proceedings that the amendment comes along. He observes that despite the stage of the case had reached ie proof that the amending party sought not only the amendment but preservation of the proof. Accordingly, this analysis indicates that the sheriff has undertaken a balancing exercise which is the function any judge or sheriff must undertake when applying judgment in a discretionary matter. The purpose of undertaking such a balancing exercise when amendments arrive at the time of proof is to make a decision which is in the interests of justice. The sheriff determined that the interests of justice pointed against allowance of the amendment. He had regard to the explanation or lack of for the appellant's ex facie inconsistent approach to the quantum of the liability order and on the other hand the respondent's position as an unrepresented litigant opposing the amendment and seeking an adjournment. The earlier minute of amendment to decrease the amount of the liability order is significant. This is a formal step in process and one which a party must carefully consider. The opponent is entitled to rely on this being the amending party's considered position on quantum. The sheriff had regard to the fact that the appellant was a public authority with a duty to enforce the maintenance payment regime. If the sheriff's reference to personal bar was intended as the application of the legal concept of personal bar or estoppel then there was no need for the sheriff to conduct a balancing exercise which he did.

28. At this stage it is worth saying a little about the Child Support Act 1991 and its purpose. As a result of that legislation the State took on a central role in child maintenance matters which had formerly been a private matter or certainly a private law matter between parents. The scheme has at its heart the need to provide for children and ensure their welfare. Lord Nicholls in Secretary of State for Work and Pensions v Farley referred to the scheme in this way:

"the scheme was intended to provide an effective, cheap and speedy means to enforce parental support obligation. Another aim, of considerable importance was to reduce dependence on social security and the cost to the tax payer. The new system has had a chequered history".

The scheme has indeed had a chequered history and it is noteworthy that court proceedings for enforcement of child maintenance have been beset with difficulties around the accurate calculation of arrears. That, of course, is fundamental to the application for a liability order and it is of critical importance that the respondent knows accurately what the statement of arrears is in order that he can either agree or contest it. Proceedings have been characterised by a lack of robust methodology as to these calculations and vouching. That is simply an observation. The child support regime and the enforcement scheme carries with it the weight of the State. It is publicly funded. The sheriff required to take into account the legitimate and important aims of the 1991 Act. The welfare of children is an important principle and the benefits budget should not support children where an absent parent has the means to do so.

29. That of course is one side of the coin. It is equally important that a public authority with the resources of the State proceed against liable persons in an open, straightforward and precise manner. The sheriff is likewise entitled to take account of the equality or inequality of arms. The appellant has the resources of the State behind him and retains experienced solicitors to represent his interests in court. The respondent is an unrepresented litigant albeit one who has faced such proceedings in the past and has successfully opposed a liability order in the past.

30. The appellant argued that as a public authority the legal concept of personal bar could not apply. I was referred to the case of Reprotech v East Sussex County Council (supra). Reprotech appears to be authority for the proposition that it is inappropriate to introduce the private law concept of estoppel into the public law area of planning control. Planning law involves decision making which affects the public at large and remedies against public authorities must take into account the interests of the general public which the authority exists to promote. I was referred to the dicta of Lord Mackay of Clashfern and Lord Hoffman. Lord Mackay of Clashfern had this to say at paragraph 6

"I would also wish expressly to agree that where public authorities are fulfilling statutory duties or exercising statutory discretions, the public interests in their activities and the effect on members of the public who are not parties to the particular process which the authority is conducting requires the law to differentiate clearly between such activities and those in which interests only of those directly involved must be considered."

31. The background to Reprotech is planning law. Reid and Blackie Chapter 5 consider Reprotech and its consequences and conclude:

"In consequence of the decision in Reprotech therefore, the ambit of estoppel appears much reduced, certainly in relation to planning law."

32. The background to Reprotech could not be further removed from the present case. It involved planning law. It involved the proposed sale by a Council enterprise of a waste treatment plant which was subject to a condition that no power driven machinery could be used or operated at night or on Sundays or bank holidays unless in an emergency. The issue was clearly one of noise and the potential nuisance that would cause to the neighbourhood. That is the direct public interest. Prospective purchasers enquired about using the waste plant to generate electricity and observed that it would be impracticable and not commercially viable to generate electricity other than 24 hours a day. No formal application under the Planning Acts was made nevertheless the Council, as planning authority, considered that matter and referred it to a planning sub-committee who heard advice from a county planning officer. They resolved to vary the condition by excluding "electricity generation" from the condition but subject to a suitable noise attenuation scheme. No formal determination was ever made under the Planning Act as no formal planning application had been made. The issue of estoppel or personal bar is discussed against that background. The Council appealed against the subsequent purchasers' (Reprotech) successful application for a declaration that the planning officer's statement and the resolution which followed that constituted a determination under the appropriate planning legislation. The appeal was allowed and it is clear why estoppel had no place in the decision making process of the planning authority where there is a direct public interest (both generally and particularly) with regard to planning decisions. The particular interest being of those residing in the vicinity of the waste treatment plant who vociferously opposed relaxation of the condition.

33. The public interest in Reprotech is clear and obvious. The public interest in the present case is tangential at best, that being the public interest in the welfare budget not being used where an absent parent should be providing support. However, in the circumstances of this case, the respondent is not an absent parent who neglects his duty to his children as the decision of the court in the earlier case demonstrates. In that case it was accepted that the respondent had made voluntary payments to his former partner for child support to the extent that there was no balance or arrears of child maintenance due.

34. As Mr Kerr observed there is no Scottish authority on the question of whether personal bar can apply to a public authority in Scotland. Lord Mackay of Clashfern makes a clear distinction between public authorities fulfilling statutory duties where the public have an interest in their activities as there is an actual or potential effect on members of the public who are not parties to the proceedings compared with proceedings involving public authorities which touch on the interests only of those directly involved in the proceedings. The circumstances of the current proceedings approach the latter category rather than the former. Accordingly, whilst acknowledging that there will be circumstances in which the concept of personal bar does not apply to public authorities I cannot say that this is one of them.

35. Accordingly, had the sheriff simply refused the appellant's motion to amend by virtue of the concept of personal bar then that would appear to be an error in law. That would be so because the ingredients of personal bar are not addressed and due to the lack of reference to prejudice by the sheriff. There is no mention of prejudice in the sheriff's note although at paragraph 13 of the note he clearly points to inconsistency and unfairness. Nevertheless, the prejudice to the respondent is not difficult to decern. The prejudice to the respondent as presented on his behalf on appeal is clear. His defence to the liability order had, in the main, two principle arguments firstly, the sum of money said to constitute the arrears is wrong and is at most the lower figure of £9,828 as per the statement produced to the respondent by the CSA. Secondly, that he made voluntary payments to his ex-partner such as to erode and exceed any arrears. His former partner had appeared as a witness in the previous proceedings. He had not compelled or cited her to attend the proof in May last year as he relied upon the appellant's decision to formally amend the amount of the liability order downwards from £23,000 and to £9,828. At proof he appeared to be arguing that there might be a balance of £8,435 from which voluntary payments ought to be deducted. Had he thought that the original figure of £23,739 was to be reinstated he would have taken steps to ensure Ms F attended as a witness despite her reluctance to attend court again. Given that the case has all along been about disputed balances and voluntary payments it is not difficult to see that the respondent required to have his former partner at the proof if he thought he was in for a liability order of more than £23,000. The legal concept of personal bar was not addressed before the sheriff nevertheless it cannot be said that the essentials of bar are absent from the overall circumstances of this case.

36. The appellant's answer to the issue of prejudice is that nothing has actually changed for the respondent. He is disputing whatever figure is placed before the court. He knows that he has to come to court for proof and he must be prepared. This, perhaps, explains the appellant's intransigence as to the respondent's motion to adjourn. However, it does not make the situation easier for the appellant. The appellant's deliberate decision to oppose the respondent's motion to adjourn places the sheriff in a difficult position with regard to the amendment and in fact forces the issue. Had the appellant conceded the need for adjournment to allow the respondent to reassess his approach to both representation and preparation for proof the "interests of justice" balance would perhaps have tilted in favour of the appellant. The sheriff still had the difficulty presented by the appellant's lack of an explanation far less a reasonable explanation for their vacillating approach to the amount of the liability order. I say that against the background of the appellant having the legal and administrative resources of this public organisation behind him. After all, the CSA possess all of the information on which maintenance assessments are made, payments monitored and arrears calculated. Administratively the CSA holds all the cards.

37. Accordingly, I take the view that the sheriff did perform a balancing exercise in order to reach his decision. He did exercise his discretion. His reference to personal bar is difficult to understand but not, in my view, fatal to his exercise of his judgment. He uses the language of personal bar. It is not difficult to see how he characterised the appellant's approach to these proceedings as both inconsistent and unfair given their privileged position. They are publicly funded, unchallengeable in terms of the maintenance assessment and ought to be in possession of the fullest administrative competence in these proceedings. I propose to refuse the appeal, adhere to the sheriff's interlocutor subject to the amendment in respect of the ambit in time of the liability order which I understand from the sheriff's note to be agreed by all parties. Expenses should follow success.

(signed) Mhairi M Stephen