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Notes:
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Variation – dividend – period in respect of which the conditions in regulation 19(1A) of the Variations Regulations 2000 must be satisfied
The father was paying child support maintenance under a maintenance calculation. On 30 March 2005 he received a dividend from his company. The mother became aware of that and on 20 December 2005 made an application for a variation of the calculation. The Secretary of State determined that, to take account of the dividend, the maintenance calculation should be varied under regulation 19(1A) of the Child Support (Variations) Regulations 2000, in force from 6 April 2005, which applies where the non-resident parent (a) has the ability to control the amount of income he receives from a company and (b) is receiving income from that company which would not otherwise fall to be taken into account. The Secretary of State superseded the assessment and decided that an increased amount of maintenance was payable for the period from the commencement of the week in which the application was made down to 29 March 2006, treating the dividend as paid by equal weekly instalments over the year from 30 March 2005. The father appealed to a child support appeal tribunal, which confirmed the decision. The father appealed to the Commissioner, who allowed his appeal, holding that the natural meaning of regulation 19(1A) was that one had to look at the period from the effective date of the application for a variation down to the date of the decision, and that, as the dividend had been declared in respect of the year ending 31 July 2005 the condition was not satisfied during any part of that period, and therefore the variation had not been properly made under regulation 19(1A). The Secretary of State appealed to the Court of Appeal, submitting that the year to which “the weekly amount” relates must necessarily be a year going forward from the date of the payment.
Held, allowing the appeal, that:
1. (per Arden LJ) the function of regulation 19(1A) is merely to identify a “case”, or state of affairs, on the basis of which the Secretary of State can exercise his discretion to direct a variation, and, provided the non-resident parent had control of the company at the time of receipt of the dividend, the conditions are fulfilled (paragraphs 13 and 14);
2. (per Arden LJ) the mechanism for ascertaining the weekly amount of additional income is provided by regulation 25 and merely involves dividing the amount of the dividend by 52 (paragraphs 15 to 18);
3. (per Arden LJ) it followed that there was no need for the Secretary of State to consider the period with respect to which the dividend was stated by the company to be paid or the fiscal year, and the weekly amount must be notionally related to the weeks succeeding the date of payment because it cannot otherwise be added to any future payment, as regulation 25 clearly contemplates (paragraph 19);
4. (per Arden LJ) regulation 19(1A) imposes no requirement that a dividend payment should be of a regular amount, and accordingly is capable of applying to a single payment of a dividend (paragraph 21);
5. (per Arden LJ) the application of regulation 19(1A) to dividend income received prior to the commencement date of regulation 19(1A) did not offend the principle against the retrospective application of legislation, since it only affected such income after the commencement date and therefore is taken to operate prospectively only (Wilson v First County Trust (No 2) [2003] UKHL 40, [2004] 1 AC 816 cited) (paragraphs 22 and 23);
6. (per Longmore LJ) the question for the purpose of regulation 19(1A)(b) was not in respect of what year was the dividend to be treated as paid but whether the non-resident parent was “receiving” income in the form of a dividend (paragraphs 26, 27 and 33);
7. (per Longmore LJ) “receipt” being a continuing concept, the regulation must be construed as applying to a period subsequent to the date of payment, and it would not be practicable for that period to be as short as a week or even a month (paragraphs 28 to 32);
8. (per Longmore LJ) in the present case, the non-resident parent was still “receiving” the income on the date of the application and it ought therefore to be brought into account (paragraph 34).
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