“Agreement to a variation. 28F.-(1) The Secretary of State may agree to a variation if— (a) the Secretary of State is satisfied that the case is one which falls within one or more of the cases set out in Part I of Schedule 4B or in regulations made under that Part; and (b) it is the Secretary of State’s opinion that, in all the circumstances of the case, it would be just and equitable to agree to a variation. (2) In considering whether it would be just and equitable in any case to agree to a variation, the Secretary of State— (a) must have regard, in particular, to the welfare of any child likely to be affected if the Secretary of State] did agree to a variation; and (b) must, or as the case may be must not, take any prescribed factors into account, or must take them into account (or not) in prescribed circumstances…” (a) the Secretary of State is satisfied that the case is one which falls within one or more of the cases set out in Part I of Schedule 4B or in regulations made under that Part; and (b) it is the Secretary of State’s opinion that, in all the circumstances of the case, it would be just and equitable to agree to a variation. (2) In considering whether it would be just and equitable in any case to agree to a variation, the Secretary of State— (a) must have regard, in particular, to the welfare of any child likely to be affected if the Secretary of State] did agree to a variation; and (b) must, or as the case may be must not, take any prescribed factors into account, or must take them into account (or not) in prescribed circumstances…”
“Assets exceeding a prescribed value 69A.—(1) Where this paragraph applies, the other cases prescribed under paragraph 4(1) of Schedule 4B to the 1991 Act are cases where the Secretary of State is satisfied that there is an asset in which the non-resident parent has a legal or beneficial interest and the value of that interest exceeds the prescribed value. (2) In this regulation “asset” means— (a) money, whether in cash or on deposit, including any money which is due to a non-resident parent where the Secretary of State is satisfied that requiring payment of the monies to the non-resident parent immediately would be reasonable; (b) gold, silver or platinum bullion bars or coins; (c) a virtual currency which is capable of being exchanged for money; (d) land or rights in or over land; (e) shares within the meaning ofsection 540 of the Companies Act 2006 ; (f) stock and unit trusts within the meaning ofsection 6 of the Charging Orders Act 1979 ; (g) gilt edged securities within the meaning of paragraphs 1 and 1A of Part 1 of Schedule 9 to theTaxation of Chargeable Gains Act 1992 ; or (h) a chose in action which has not been enforced on the date of an application for a variation under regulation 56 and where the Secretary of State is satisfied that such enforcement would be reasonable. (3) In this regulation “asset” includes any asset which is subject to a trust where the non-resident parent is a beneficiary. (4) Paragraph (1) does not apply in the case of any asset which— (a) has been received by the non-resident parent as compensation for personal injury suffered by the non-resident parent; (b) is being used in the course of the non-resident parent’s trade or business; (c) the Secretary of State is satisfied could have been purchased from the gross weekly income of the non-resident parent which has been taken into account for the purposes of a maintenance calculation; (d) will need to be sold in order to meet any additional maintenance payment required as a result of a variation under paragraph 4(1) of Schedule 4B to the 1991 Act where the Secretary of State is satisfied that the sale of that asset would cause hardship to a child of the non-resident parent, or would otherwise be unreasonable having taken into account all relevant circumstances; or (f) is a legal or beneficial interest in land where the land in question is the primary residence of the non-resident parent or any child of the non-resident parent. (5) The “prescribed value” is£31,250 . (6) In the case of an asset which is subject to a mortgage or charge, the value of that asset will be its value after a deduction is made for any amount owing under the mortgage or charge. (7) The Secretary of State shall calculate the weekly value of an asset by applying the statutory rate of interest to the value of the asset and dividing by 52. (8) For the purposes of this regulation— “statutory rate of interest” means interest at the statutory rate prescribed for a judgment debt or, in Scotland, the statutory rate of interest included in or payable under a decree in the Court of Sessions applicable on the date upon which the variation takes effect; “virtual currency” means a digital representation of value which is not issued by a central bank or a public authority; is accepted by natural or legal persons as a means of payment; and can be transferred, stored or traded electronically.”
“[PE] has a Director’s Loan Account with [M Limited]. That account stands at£748,858 which, if treated as an asset under Reg 69A, would at 8% create a notional income of£59,908.64 . Even allowing for the reductions in respect of the relevant other child and for shared care of [M], that would still make a substantial difference to the maintenance assessment. i. We cannot make such a variation. This is not because we accept [PE]’s argument that it would not be just and equitable to do so because the loan consists of borrowings in his sole name which he has then reloaned to [M Limited]. It is rather because of the wording of Reg 69A. ii. We are not convinced that the DLA is a chose in action coming under Reg 69A(2)(h) rather than being money due to [PE] under Reg 69(2)(a). It does not matter as the same difficulty arise[s] under either regulation. iii. Both provisions require that enforcement of the chose or of the debt “would be reasonable”
“64. UTJ Poynter said at paragraph 121 of AB, “On the face of that evidence, the companies should have paid the necessary dividend to the Father and his fellow shareholders from the cash they had at the bank. Moreover, the calculation is a notional one. The Father would not in fact have to finance any variation by withdrawing money from the companies: it was only necessary for him to find (at most) slightly less than£10,000 to finance the actual amount of additional maintenance that would become due during the year to the next annual review. Given the high priority that is accorded to maintaining one’s children when reasonableness is considered, the inference of unreasonableness would be compelling in the absence of further evidence from the father.” 65. [PE] could not take the whole of his DLA from [M Limited]. It would require much more information than we had to make a finding of fact that [PE] could safely withdraw the deemed income from his DLA of£758,000 at the 8% contribution charge which in this case would be£59,908.64 . On the accounts available, it seems improbable.” “On the face of that evidence, the companies should have paid the necessary dividend to the Father and his fellow shareholders from the cash they had at the bank. Moreover, the calculation is a notional one. The Father would not in fact have to finance any variation by withdrawing money from the companies: it was only necessary for him to find (at most) slightly less than£10,000 to finance the actual amount of additional maintenance that would become due during the year to the next annual review. Given the high priority that is accorded to maintaining one’s children when reasonableness is considered, the inference of unreasonableness would be compelling in the absence of further evidence from the father.”
“67. That would give an annual liability of£5,465.84 . Even allowing that our calculations may have some error, [PE] would be liable to pay something around£5,500 . We have no doubt that [M Limited] could fund [PE] to that extent. [PE] said in evidence that [M Limited] had funded him 10,000 when he needed it. 68. The principle that UTJ Poynter sets out in paragraph 121 of AB could be construed as having universal application. All that is required of a non-resident parent is that they pay the maintenance assessment and how they organise the remainder of their finances is a matter for them. The obstacle for us coming to that conclusion with regard to the DLA came in the wording of Reg 69A…”
“What is meant by ‘requiring payment’ and by ‘enforcement’?”
“70. Repayment and enforcement can only have two meanings in this context. Either it means repayment or enforcement of the whole sum due or the whole value of the chose in action. Alternatively, if the principle in AB applies, then repayment or enforcement means to the extent required merely to meet the maintenance liability. 71. We were unable to extrapolate UTJ Poynter’s dicta as he was speaking in the specific circumstances of the case before him in a Reg 71 diversion appeal. It is certainly arguable that a more robust approach to finding the wherewithal to fund a maintenance assessment is appropriate in diversion appeals. Equally the larger the debt or the chose in action, the less reasonable it will be to require enforcement of the whole sum as, the larger the debt or the chose in action, the less likely that achieving full payment or enforcement would be. That could put the wealthier person with the greater asset in a better position to avoid a Reg 69A variation than someone with a small entitlement. That seems to run against the whole principle of the child support scheme as set out in section 1 of the [1991 Act] that every parent has a duty to maintain their child.”
“75. As we were satisfied that the maintenance assessment under 69A could be funded by [M Limited] to the extent necessary to meet the required payment, we did not see any reason to apply a different rate to the 8% stipulated in Reg 69A. The amount assessed was affordable and will clearly benefit [M]. We were satisfied that no reduction in the percentage rate was appropriate. 76. For the avoidance of doubt, if we had interpreted AB as applying to Reg 69A, then we were satisfied and found as a fact that [M Limited] could meet the additional payments required of [PE]. In that circumstance, we were satisfied that making that variation would be just and equitable.”
“It is certainly arguable that a more robust approach to finding the wherewithal to fund a maintenance assessment is appropriate in diversion appeals.”
“46. … In my view … enforcement must take its meaning from the context of the type of chose in action in question in each particular case. Where the chose in action is a debt of the kind represented by the father’s director’s loan account in the present case, which he was apparently free to draw on at will just as he would have been able to do on a personal bank account, my view is that “enforced” must mean something more like “realised.” … 47. In my judgment, as at1 January 2007 it was reasonable for the father not to seek to realise the entirety of the chose in action, by requiring repayment of the whole of his director’s loan account … However, again it is not an all or nothing question, as shown in the context of assets and choses in action by decisions CSCS/1/2005 and DGH v SSWP (CSM) [2013] UKUT (AAC) … The father felt able to start drawing quite substantial amounts from his director’s loan early in January 2007 (partly as a result of his choice to take an artificially low salary) and his accountants have explained how the cash was actually available for the withdrawals throughout the year. It was therefore, even at the beginning of January 2007, not reasonable for the father to be retaining some proportion of the chose in action. It could not be said at that point that it was reasonable to realise the whole of the year’s drawings. That would depend on the cash flow during the year. So at each date through the period from1 January 2007 to26 September 2007 , as the balance in the account reduced, it would have been reasonable for the father to have realised some additional amount that could realistically be regarded as available in the next few months.”