Council Tax Liability Order Applications Court Costs – Test Case

[three rivers of corruption]

Re: Council Tax Liability Order Applications Court Costs – Test Case

"9. The question [see original] for the opinion of the High Court is:-

Were we entitled in the circumstances of this case to order payment of the full amount of the costs requested by the respondent and make the liability order which followed as a consequence thereof?"

No
This implicitly acknowledges that the full amount is the legitimate full amount.
The issue being queried is that the amount charged is wrong.
The respondent seems to be inclined to argue that the costs charged are what have allways been charged and nobody has ever objected before and therefore its ok.
That is not an acceptable arguement.
The issue at this point is that NELC should be required to substantiate their figure for costs.
Something that magistrates court should routinely do but clearly when the council have hired the court they overlook to do.

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

DRAFT(Redacted pdf)

In the High Court of Justice

Administrative Court

Between

......... Appellant

and

North East Lincolnshire Council Respondent

Case Stated by Justices in the County of Lincolnshire, acting in and for the Local Justice Area of Grimsby and Cleethorpes in respect of their adjudication as a Magistrates' Court sitting at Grimsby.

CASE

1. On 10 October 2012 a complaint was laid against the appellant on behalf of the respondent that for the period 1 April 2012 to 31 March 2013 at Grimsby in the County of Lincolnshire he was a person who was liable to pay the sum of £437.52, the balance of council tax he owed arising from his occupation of .................. , Grimsby, and application was therefore made to the court for a liability order to secure payment of that sum in accordance with regulation 34 of the Council Tax (Administration and Enforcement) Regulations 1992.


2. The court heard the complaint on 2 November 2012. The court did not hear evidence in the matter as the appellant admitted the following facts:-

a) The appellant was liable for the amount of council tax, namely £437.52, claimed against him by the respondent for the period 1 April 2012 to 31 March 2013.

b) The appellant had by the time of the court hearing paid the sum due to the respondent in respect of the outstanding council tax that was claimed by the respondent.

c) The appellant was liable to pay an amount in respect of the costs of the respondent in bringing proceedings before the court

d) The claim for costs in respect of the proceedings made by the respondent on the face of the summons served upon the appellant was in the sum of £70.00.

e) The appellant had by the time of the hearing paid £10.00 to the respondent in respect of the costs.

f) The appellant had not paid the full amount of the costs requested by the respondent and did not intend so to do so.


3. The following is a short statement of the representations made to us by the parties:-

a) The respondent stated that the amount of the claim for costs was the same as that sought in all similar proceedings commenced by the respondent, a sum which had previously been notified to the Grimsby and Cleethorpes Magistrates' Court under cover of correspondence dated 4 March 2011 for cases arising on or after 1 April 2011.

b) The level of costs sought by the respondent did not exceed the prescribed amount described in regulation 34(8) of the Council Tax (Administration and Enforcement) Regulations 1992.

c) The level of costs sought by the respondent in the proceedings was within the range of costs sought by other local authorities in similar proceedings for unpaid council tax

d) The level of costs sought had been calculated to reflect both administrative and legal costs in bringing the proceedings to court, including the court fees.

e) The appellant referred to correspondence he had had with the respondent in which he asserted that the level of costs claimed by the council was a means of raising additional revenue from the respondent.

f) The appellant referred to the respondent's 2011 budget and financial plan in which a majority was stated to be in favour of increased charges for summonses rather than charging for other council services such as replacement bins or garden waste collections.


4. It was contended by the appellant that:-

a) The level of costs requested by the respondent in the proceedings was disproportionate to and not commensurate with the true cost of bringing the proceedings before the court in that it was much higher than the actual cost.

b) The reason the respondent sought such a high level of costs in the proceedings was as a means for the respondent to raise additional revenue for the respondent.


5. It was contended by the respondent that:-

a) The level of costs sought in the proceedings was an amount that had previously been advised by the respondent to the court that would be sought by the respondent in each case in proceedings to recover unpaid council tax. This amount had been claimed in all cases before the court since that notification.

b) The sum requested was not a means to raise additional revenue for the respondent but a reflection of the broad average costs of bringing any individual case for unpaid council tax before the court.


6. We were not referred to any case authority.


7. We were of the following opinion:-

a) We recognise that in all cases where costs are claimed we always have a discretion as to whether to order them, and if so, in what sum. Although the appellant admitted the matter of complaint and costs would therefore normally follow the event, the fact that the respondent asked for the normal amount of amount of costs in this case did not prevent us from reducing the amount or refusing to make an order for costs at all.

b) The respondent, as with other council tax billing authorities, has taken a broad approach to the question of requests for costs and has sought a similar amount in this case as with all others in the in the same court list. In normal circumstances this is appropriate, although we accept we must look at each case individually. This means that the respondent could in principle have sought a greater amount of costs in an individual case where more costs were incurred, subject to any limitations set by regulations, had it chosen to do so.

c) The amount of costs requested in all cases before us for non-payment of council tax was a sum advised to the court in writing by the respondent well over a year before the current proceedings against the appellant were commenced, and the court in other such proceedings in the intervening period has considered that level of costs to be appropriate by making orders in favour of the respondent in that sum. That fact of course did not prevent us from considering the level of costs requested in the proceedings against the appellant.

d) The respondent had to pay a court fee in respect of every application for a liability order as well as cover the other administrative and legal costs of bringing the proceedings, and we therefore considered £70.00 was an amount reasonably incurred by the respondent in making the application before the court and obtaining the liability order.

e) On the basis of the information presented to us by both the appellant and the respondent, the contention that the amount claimed by the respondent was in the nature of general revenue raising by the respondent did not succeed and we were satisfied that it was instead an amount to cover the cost of bringing council tax enforcement proceedings to court.

f) This case had no features to distinguish it significantly from other cases in our list to suggest to us that a different level of costs should be considered in this case.

g) The appellant should pay the full amount of the costs sought. We could not see that it was just to order the appellant to pay less or we would have so ordered.


8. We ordered that £60.00 costs requested by the respondent should be paid by the appellant in the proceedings and made a liability order against him to enable that sum to be recovered by the respondent.

QUESTION

9. The question [see original] for the opinion of the High Court is:-

Were we entitled in the circumstances of this case to order payment of the full amount of the costs requested by the respondent and make the liability order which followed as a consequence thereof?



Dated the 22 day of July 2013



Mr ...... ....... JP
Mr ..... ........... JP


Justices' Clerk
for and on behalf of the Justices adjudicating.

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

The Magistrates' Court has drafted the case (details in a following post). Correspondence accompanying the case stated below:

"24 July 2013

Dear Mr .....


Re: North East Lincolnshire Council V ........

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012
Application to State a Case

I refer to your request for the Justices to state a case for the opinion of the High Court in respect of the above-mentioned proceedings.

Enclosed herewith is the draft case that has been prepared, together with a statement of the delay for production of same.

May I respectfully draw to your attention that in accordance with rule 77 (2) of the Magistrates' Courts Rules 1981 you have 21 days from receipt of the draft case to submit any written representations that you may have upon its content.

I shall be grateful if you kindly acknowledge receipt of this correspondence.

Yours sincerely

Justices' Clerk

STATEMENT IN ACORDANCE WITH RULE 79(1) OF THE MAGISTRATES'
COURTS RULES 1981

APPLICATION TO STATE A CASE MADE BY .... .....

It was not possible to comply with rule 77(1) of the Magistrates' Courts Rules 1981 for the following reasons:

1. The application to state a case was made on 22 November 2012. This was shortly before the Deputy Justices' Clerk who advised the Justices at Mr ....'s hearing on 2 November 2012 and the person who would ordinarily have advised the Justices in connection with the application to state a case left the service of Her Majesty's Courts and Tribunals Service.

2. The matter was escalated to the Justices' Clerk. This caused a delay as the Justices' Clerk had then to review the case papers and discuss the matter with the Justices to seek their views on whether it was it would be appropriate to state a case or to refuse to state a case on the grounds that the application was frivolous. The Justices decided that they would state a case but required a recognizance from Mr ...... before doing so.

3. On 24 January 2013 correspondence was sent to Mr ....... indicating that in accordance with section 114 of the Magistrates' Courts Act 1980, that before stating a case the Justices required a recognizance from to prosecute the appeal without delay. To date Mr ....... has not entered into such a recognizance.

4. On 29 April 2013 Mr ..... corresponded with the court indicating concern with the request for a recognizance and asking for a certificate of refusal to state a case, and that if the latter were declined, that he would seek permission for a Judicial Review.

5. On June 2013 Mr ..... made an application to the Administrative Court for permission to seek a Judicial Review of the court not to supply him with the draft case and to seek a mandatory order that the Justices state a case.

6. On 8 July 2013 the Court responded to the application for a Judicial Review by indicating it was still awaiting Mr ...... to enter into a recognizance before stating a case and had not refused to state a case at all. However, in the interests of avoiding any further delay in the case, and in an endeavour to save the costs of hearings in the Administrative Court of both an application for Judicial Review and an appeal by way of case stated, the Justices have decided to proceed to produce and deliver a draft case to Mr ......

Dated the 22nd day of July 2013

Justices' Clerk

Re: Council Tax Liability Order Applications Court Costs – Test Case

They couldn't!

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Very interesting. LA's are going to be hit with a real nightmare once people start to challenge this. Hopefully the bigger charities will challenge on an annual basis to ensure costs are kept accurate, and not just 'plucked out of thin air.'

The most obvious circumstances where it would be inconceivable (at a fair trial) to lose a challenge against costs would be where the defendant paid the outstanding liability in-between summons issue and liability order hearing. We know the process is automated so any action in connection with the authority's application to the court will be as a consequence of parameters set on the council's computer system. So how would the authority justify anything more than postage, stationary and the £3 fee paid to the court?

Re: Council Tax Liability Order Applications Court Costs – Test Case

Very interesting. LA's are going to be hit with a real nightmare once people start to challenge this. Hopefully the bigger charities will challenge on an annual basis to ensure costs are kept accurate, and not just 'plucked out of thin air.'

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

"3.4 Local Authorities are reminded that they are only permitted to charge reasonable costs for the court summons and liability order. In the interests of transparency, Local Authorities should be able to provide a breakdown, on request, showing how these costs are calculated.

Anyone having the recent document produced by the Department of Communities and Local Government may want to look at the amended version.

The document entitled "Guidance to local councils on good practice in the collection of Council Tax arrears", has, for anyone wanting to challenge the reasonableness of summons costs, an important addition at paragraph 3.4

"3.4 Local Authorities are reminded that they are only permitted to charge reasonable costs for the court summons and liability order. In the interests of transparency, Local Authorities should be able to provide a breakdown, on request, showing how these costs are calculated. While it is likely that authorities will have discussed costs with the Clerk to Justices it should be recognised that the Court may wish to be satisfied that the amount claimed by way of costs in any individual case is no more than that reasonably incurred by the authority.

One of the rare occasions where a FoI request served some useful purpose.

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

A letter from the council..........

19 July 2013

Dear Mr ....

Yourself v Grimsby Magistrates Court & NELC

I write further to the legal proceedings issued by yourself at Leeds High Court against Grimsby & Cleethorpes Magistrates Court, naming North East Lincolnshire Council as an interested party. The papers have been passed to me upon Mrs X's departure from employment with the Local Authority.

The purpose of my writing to you is to inform you that the £60 court costs, which you dispute, will be suspended until the outcome of the proceedings. At the completion of those proceedings, dependent on the Court's decision, the fee will either be withdrawn from your account or will remain outstanding to the Local Authority.

A copy of this letter has been sent to the Leeds High Court for their information.


Yours sincerely

for Group Manager Legal & Democratic Services

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Does that translate as they are overlooking the recognizance issue and are proceeding to serve the case (to state a case) to the defendant (Grimsby and Cleethorpes Magistrates'Court) within 14 days of 8. July. 13.

It seems that way, but you can only speculate as to the real reason that decision was made. It could be the claim for a mandatory order through judicial review has convinced the Magistrates' Court that the application (case stated) was serious. On the other hand, if the decision to state the case without recognizance, was made purely "in the interests of saving the Administrative Court time and public money on a matter that is likely to reach the Administrative Court via the route of an appeal by way of case stated", then it's logical to assume the court viewed it a possibility that the judicial review may have resulted with a mandatory order being made.

Considering the following submitted in the acknowledgement of service:

"To date the claimant has not appeared before the defendant court to enter into a recognizance. Had he done so the question of the appropriateness of the recognizance and/or the amount could have been considered by the court.

I'd gone to considerable lengths to address this and other issues beginning 5 February 2013, after learning the court would only state the case conditioned on agreeing recognizance to the sum of £500. However, there was never any response, and therefore no way of knowing the recognizance may be negotiable on its arrangement at the Magistrates court as suggested.

....In my opinion, the most recent contributor (three rivers of corruption) has spotted an error in the submission by the (substitute) Clerk to the justice's reply to the judicial review claim for mandatory order by highlighting (or hinting at) the magistrates' clerk mixing up who the defendant and appellant is, maybe as a subtle contribution I'd expect?

I see your point, though I'm unsure if there's been an error in the submission regarding mixing up who the defendant is. It's possible that the court, by using the term "defendant", is referring to me the defendant at the council tax liability order, who has now become the appellant (defendant on application to state a case) in the subsequent proceedings. Whether or not there's been a slip-up, the court, by "undertaking that the draft case will be served upon the defendant within fourteen days", have meant me, rather than Grimsby and Cleethorpes Magistrates' Court.

[Ref]

Re: Council Tax Liability Order Applications Court Costs – Test Case

I've been tracking this since the submission was made by the applicant to state a case to the high court. This was made clear by the clerk t.t.Justices at the original magistrates court to be the only avenue open to the defendant to appeal the benches decision to grant the order.

In my opinion, the most recent contributor (three rivers of corruption) has spotted an error in the submission by the (substitute) Clerk to the justice's reply to the judicial review claim for mandatory order by highlighting (or hinting at) the magistrates' clerk mixing up who the defendant and appellant is, maybe as a subtle contribution I'd expect?

[three rivers of corruption]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Does that translate as they are overlooking the recognizance issue and are proceeding to serve the case (to state a case) to the defendant (Grimsby and Cleethorpes Magistrates'Court) within 14 days of 8. July. 13.

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Getting back on track with the claim for Judicial Review.

Received confirmation today that the Magistrates' Court has lodged the Acknowledgement of Service with the Administrative Court at Leeds, in respect of the Claim form (N461) and submitted evidence.

The information most relevant to the stages expected to follow are detailed in the final paragraph of the court's submission at Section C of the response:

"The defendant to this matter is a magistrates' court.

The claimant has made an application to the Justices in relation to proceedings commenced against him by North East Lincolnshire Council (the interested party in this application for Judicial Review) for them to state a case in relation to their decision to make a liability order in respect of costs arising from the proceedings for non-payment of council tax.

In connection with that application the claimant was requested by the defendant magistrates' court in accordance with section 114 of the Magistrates' Courts Act 1980 to enter into a recognizance to prosecute his appeal in the High Court without delay. Statute makes provision for this step to be taken by the court and therefore the court is perfectly entitled to seek a recognizance prior to stating a case. In seeking a recognizance the defendant court was by definition prepared to state a case as this is implicit in the statutory provision allowing for a recognizance to be required. That remains the position of the defendant court.

A recognizance does not require any money to be paid 'up front' unlike court fees which are required to be paid before work on an application is undertaken. Indeed a recognizance is but a promise that the individual who enters into the recognizance makes to pay some or all of a sum of money determined by the court in the event that he/she fails to prosecute his/her case in the High Court without delay. Accordingly no money need ever be paid if the matter is pursued by the appellant in the High Court and even if the appeal were not pursued in the High Court, there would still need to be a hearing to determine whether in the fact some or all of the recognizance should be forfeit.

To date the claimant has not appeared before the defendant court to enter into a recognizance. Had he done so the question of the appropriateness of the recognizance and/or the amount could have been considered by the court.

Rather than formally responding to the claim for permission to apply for a judicial review, even though the Justices do not agree with the claim that has been made by the claimant, in the interests of saving the Administrative Court time and public money on a matter that is likely to reach the Administrative Court via the route of an appeal by way of case stated, the defendant court gives an undertaking that the draft case will be served upon the defendant within fourteen days of the date of this acknowledgement of service.

For a reminder, the original appeal, to which the draft case should now be served, is this application to state a case.

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

It requires an outstanding memory to retain credibility when telling porkies.

We know councils are pulling the wool over our eyes when they tell us the vast summs they charge in summons costs are incurred.

Can it cost all these millions for a process run by computer software, having parameters set which when criteria has been met, triggers automatically thousands of summonses to be sent out?

In this post, with a little help from FoI, we discover how Reigate and Banstead Borough Council tried but embarrassingly failed in its attempt to insult our intelligence.

It was asked of the authority for data covering a number of years in respect of Council Tax and Business Rates (NNDR) summons costs, in particular the costs charged to individual householders in respect of these and a justification for when they were increased. A second part asked for an account describing the difference (if any) between liability order applications, i.e., Council Tax and NNDR.

All can be seen here:(FoI 131409), but what led to the council being rumbled was the letter (17 March, 2009) applying to Redhill Magistrates Court wishing to increase its court summons costs. Incidentally, exactly the same paragraph was contained in another sent 29 February 2012 wishing to increase both Summons and Liability Order costs. It also found its way into a Cabinet Report of the Head of Revenue and Benefits in a review of court costs for Eastleigh Borough Council.

"It is apparent with the increase in the actual time spent in the preparation work, the time spent in court and with customers, the current charges are insufficient to cover the true cost of this area of work and therefore a review has been undertaken to avoid this cost falling on those majority of taxpayers who pay their bills on time.

The requester subsequently asked if it could be clarified with regards the letter, what the increases in "time spent" were a consequence of.

What needs to be considered in conjunction with the above was the response explaining why costs for Business rates had been on average 40% higher than Council Tax.

"With regard to your second question, the basic differences are that there are two separate teams dealing with the issuing of Council Tax and Non Domestic Rates summonses. As there are fewer Non Domestic Rates summonses the cost per summons is greater than Council Tax.

Note that fewer summonses make for higher costs per account. Presumably the logic being that issuing more summonses reduces the cost per unit owing to automation and is why the individual charge must be higher for Business rates – compensating for costs having to be split between fewer people.

Getting back to the question regarding the letter to the Magistrates' court; i.e., "It is apparent with the increase in the actual time spent in the preparation work, the time spent in court and with customers...."

Six months later after several prompts, Reigate and Banstead Council supplied its answer, which incidentally did not include the information asked for, but gave a general description of what work is carried out (or what should be carried out) in dealing with liability order applications.

"All our court summonses are manually checked before being posted, this includes checking against our Document Image System and our Revenues Software for each account where a Court Summons has been produced. In addition once a Court Summons has been posted our staff deal with all payment arrangements and associated queries. Our average court list will contain over 800 accounts. All our staff can potentially deal with a Summonsed account and my team will each spend approximately 40 hours per month dealing with summonsed accounts

It was put back in the council's court that it had not been explained what the increase in time spent was down to. Two months on, it supplied the answer, stating contrary to its earlier logic that the increase in time spent (therefore extra costs), was down to experiencing increased volume of summons & liability orders in comparison to a previous year.

"At the time the letter in question was sent (March 2009) we had just experienced a 7% increase in the number of summons & liability orders issued in 2008/09 compared to 2007/08.

As a result the time spent in preparation work increased accordingly.

So there it is, even before checking the figures, the council inadvertently dropped itself in it by wanting to have its cake whilst at the same time eating it. Whilst justifying higher costs per individual in NNDR applications it considered this to be down to fewer numbers incurring them. On the other hand, when applying to the Magistrates' court for an increase in costs, it justified this by the claim that higher court applications were being experienced.

On looking at the figures though, as the reply stated, liability orders had increased by 7%, however, the number of summons had increased by 50%. The interesting thing is in regards the other letter to the court applying for an increase in both Summons and Liability Order costs (29 February 2012) there was a corresponding decrease of around 14% in respect of both penalties. According to Reigate and Banstead Council's logic they should have been informing Redhill Magistrates Court that they wished to reduce its court summons and liability order costs. This of course didn't happen and the generic letter was in use again, i.e., "It is apparent with the increase in the actual time spent in the preparation work, the time spent in court and with customers...."

Even for someone having no understanding of what's involved – Magistrates' for example – the ploy should have been doomed for failure. It would take some front to tell a customer it made sense that 10 items cost £1 each but if they wanted 15 of them that would be £20 please. It doesn't work that way at the shops I go to.

Following is a more realistic estimate, using data before the 2009 increase in summons cost as a base. Although very unlikely, we will assume the figures were an accurate reflection of costs incurred.

In 2007-08 the summons incurred by each individual was £40, so costs raised according to the recorded 3,617 issued would be £144,680.

£40 will have been picked at random by the authority therefore bearing no relation to true expenditure, but for demonstration purposes we'll say this was equal to a sum reasonably incurred in producing the summons.

The following year (that which the estimation was based upon) summonses increased by 1,807 (50%) to 5,424. We know any costs which need adding in respect of this increase will be limited to those specific to each unit summons, i.e., Magistrates' court's fee (£3), postage, stationary etc., so £6 per summons would be a generous amount to add.

1,807 extra summonses at £6 = £10,842 to be added to the £144,680 costs raised in 07-08 (£155,522) split between the 5,424 defendants makes a cost per summons of £28.67. So instead of applying to Redhill Magistrates Court wishing to increase its court summons costs by 12.5% it should have been to inform it that the council had experienced a change in the number of summons which required a 28% reduction of the summons cost.

[bluebottle]

Re: Council Tax Liability Order Applications Court Costs – Test Case

If these new provisions have the teeth they are supposed to have, I am wondering just how long it will be before JBW loses its shiny new contract with Plymouth City Council? Capita/Equita/Ross & Roberts got the heave-ho on 30 April 2013. I had a call from Plymouth CAB about JBW and have offered to work with them on any complaints recieved against JBW. Although JBW claims to be ethical, in the words of Jim Royle, "Ethical, my arse."

Re: Council Tax Liability Order Applications Court Costs – Test Case

Things might be changing, as far as getting more transparency over these issues. Secretary of state for the Department of Communities and Local Government, Eric Pickles, is having his say on these matters.

Download a copy of his report here

Of particular relevance is Paragraph 3.4 of the report:

This link was also published the same day as the report as a sticky in the bailiff section - it's Number 10 under Useful Links. Hopefully that will raise awareness of it also.