Secretary of State for Work & Pensions v Menary-Smith

An appellate court should decide real issues on established or properly assumed facts, rather than hypothetical or academic questions. Where the facts, the parties’ practical interests and the operation of a statutory scheme remain uncertain, it may decline to give a definitive construction of disputed provisions after hearing argument. A specialised statutory scheme must be construed on its own terms; common-law accounting rules cannot supply the meaning. Reasoning unnecessary to a lower decision’s operative order is not precedent and should not dictate the rehearing. In unusual circumstances, the Court of Appeal may remit the case to the appropriate specialist appellate tribunal under its procedural powers.

The respondent, a parent with care receiving income support, also received irregular lump-sum child support maintenance payments from the absent parent, who was in arrears. The Secretary of State treated a payment as current maintenance and reduced weekly income support. An Appeal Tribunal held that payments should reduce arrears and be treated as capital. Commissioner David Williams allowed the Secretary of State’s appeal and remitted the matter to a different tribunal in CIS/2455/2004. The Court of Appeal was asked to determine issues concerning the statutory definition and weekly calculation of maintenance payments, and the Secretary of State’s power to attribute payments under regulation 9. The relevant facts and practical significance remained uncertain.

1. Disposition. The court unanimously dismissed the appeal in substance, but varied the practical disposal. The matter was remitted to the Chief Social Security Commissioner, or his nominee, rather than to a tribunal whose intended role was unclear. The Secretary of State agreed to bear the costs of the appeal regardless of its outcome.
2. Hypothetical issues. May LJ and Carnwath LJ applied the principle in R v Home Secretary, ex parte Wynne [1993] 1 WLR 115 that appellate courts decide real issues arising on established or properly assumed facts, not academic questions. The court therefore declined to give final answers on the challenged statutory issues. It also considered that the Commissioner’s reasoning on those issues had been unnecessary to his operative order and was not binding precedent.
3. Statutory scheme. The tribunal had erred by invoking the rule in Clayton’s Case (1816) 1 Mer. 572; the regulations had to be construed on their own terms. The court considered the Commissioner almost certainly wrong to treat a lump-sum payment as outside regulation 60B of the Income Support (General) Regulations 1987, but withheld a final ruling without full opposing argument. Regulation 60C(5) remained obscure. The Commissioner had also apparently overlooked regulation 60D(2), which concerned when payment was transmitted rather than when it was due, so related reasoning may have rested on a false premise.
4. Attribution. Carnwath LJ’s provisional view was that regulation 9 gave the Secretary of State power to attribute payments to arrears as he thought fit. On the evidence, no legal reason had been shown why a valid attribution should not operate for income-support purposes, and the presumption was that the decision was valid, following Standard Commercial Property Ltd v Glasgow City Council [2006] UKHL 50. The issue still required proper factual and legal consideration.
5. Further disposal. Under CPR 52.10, the Court of Appeal had sufficient power, in the unusual circumstances, to remit the matter to the Chief Social Security Commissioner or nominee. The parties were expected to identify any remaining factual or legal issues and resolve them as simply and speedily as possible.

• Court of Appeal (Civil Division) — In [2006] EWCA Civ 1751, dismissed the Secretary of State’s appeal in substance and varied the disposal by remitting the matter to the Chief Social Security Commissioner or nominee.
• Social Security Commissioner — Commissioner David Williams allowed the Secretary of State’s appeal against the Appeal Tribunal’s decision and remitted the matter to a different tribunal in CIS/2455/2004.
• Appeal Tribunal, Barrow — The tribunal held that the payments should be applied to maintenance arrears and treated as capital until the arrears were discharged.