Council Tax Liability Order Applications Court Costs – Test Case

[outlawlgo]

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

North East Lincolnshire Council
Civic Offices Knoll Street
North East Lincolnshire
DN35 8LN

Ref: NG/CTR/12912

01 October 2012



Dear Ms ......

Re: Council Tax Reminder, Summons and Recovery – Account 550xxxxxxx

This letter will outline the concerns raised in my 28 September correspondence relating to Control & Monitoring. As mentioned, if any element of these costs is claimed with regards monitoring liability order applications, it will without doubt be done under false pretences.

It is a legal requirement for the council’s collection team to check the accuracy of all accounts before processing them to the enforcement stage. There is overwhelming evidence that the council does not meet this obligation. Data supplied by the council which relates to liability orders covering a five year period provides evidence that neither the local authority nor Magistrates’ court are monitoring liability order applications.

– 6,580 Liability Orders were issued for an initial debt of less than £100.

– For a debt less than £25 the number issued was 1,387. For outstanding balances under £15 the figure was 544, and 45 accounted for debts less than £5.

– 3 Liability Orders were even issued for an initial debt of only 1 penny.

Over this period, a total 3,528 Liability Orders were issued for initial debt of £50 or less. The authority has stated that the council's collection team checks the accuracy of all accounts before passing them to the enforcement stage and accounts are only progressed to enforcement for amounts over £50.

Against the council’s own guidelines, 3,528 householders incurred court penalties that shouldn’t have. They would then be subjected to having their possessions seized by bailiffs and incurring further extortionate fees.

The financial benefit for letting these cases progress to enforcement is obvious. The court is paid for each application the council makes. It therefore makes financial sense for it to turn a blind eye and authorise applications and grant the orders.

Whether or not orders are sought purposely to generate income is a matter in itself for investigation, though what is relevant here is the negligence of both the council and court staff who review these cases. The point being that the annual £101,400 attributable to ‘Control & Monitoring’ will be costs claimed under false pretences as there clearly is no effective monitoring of liability order applications.

The case between "Regina v. Brentford Justices, Ex parte Catlin" made a point that "a decision by magistrates whether to issue a summons pursuant to information laid, involves the exercise of a judicial function, and is not merely administrative."

Lord Chief Justice, Lord Widgery stated that:

....before a summons or warrant is issued the information must be laid before a magistrate and he must go through the judicial exercise of deciding whether a summons or warrant ought to be issued or not. If a magistrate authorises the issue of a summons without having applied his mind to the information then he is guilty of dereliction of duty and if in any particular justices' clerk's office a practice goes on of summonses being issued without information being laid before the magistrate at all, then a very serious instance of maladministration arises which should have the attention of the Authorities without delay....

There clearly then, exists in these liability order applications, at least a dereliction of duty, when so many are granted for insignificant amounts. Many of which would likely have originated from administration errors or oversight rather than non-payment. Whatever the cause, these small debts certainly don't warrant being grossly inflated by council's court costs and bailiff fees.

Defective Summons Documents

More evidence in this example reinforces the assertion that no Control & Monitoring exists in the liability order applications.



Having authorisation from the Magistrates’ court, the council’s recovery department sent out 3,361 flawed summonses containing incorrect and out of date information relating to costs for obtaining a liability order. The orders were for non-payment of either council tax or NNDR, with all alleged debtors scheduled to attend the same hearing of 2 June 2011.

Of greater concern is the Magistrates’ court had been informed by the council, in writing, that from 1 April 2011 it would be changing the composition of the costs by increasing the summons and no longer imposing £25 costs for obtaining the liability order – see September 17 letter.

The Magistrates courts' Legal Adviser is required to review applications which should have already been checked by the council's recovery staff beforehand. However, this had not prevented more than 3,000 of the defective summonses being sent out unnoticed to residents, stating that the council would apply for further costs of £25 if a liability order was granted. The obvious errors going unnoticed brings into question whether either of these procedures had even taken place.

Data obtained covering the five year period suggests it unlikely that any monitoring ever takes place.

A total £182,140 was incurred by 2,602 householders who were liable for the penalties in connection with a single council tax liability order hearing.

These court costs and any enforcement fees as a result of the recovery should not have been imposed. Firstly because the paperwork was flawed and secondly, it is unlikely applications had been checked by the council or reviewed by the court. Or, if they had this was done negligently.

In connection with enforcement, and as a follow-up to liability orders being issued by the Grimsby Magistrates’ Court on 2nd June 2011, the council had to re-send 2,207 letters which were sent out on the 3 June 2011. These documents, like the 3,361 summonses, were defective. If it was deemed necessary by the council to make corrections to these, then the summonses should have also been corrected and re-sent.

None of these defective summonses were corrected and re-sent when the council learned they were defective nor was any compensation made to residents in respect to costs incurred from this flawed judicial process.



Yours sincerely

[outlawlgo]

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

Just adding some information regarding my previous post.

The Summons which indicates that for last year's Council Tax liability there was an outstanding amount of £940.41. This in fact was not true. All payments had been made to the council before the "due by" date. The council had mistakenly sent my account for recovery and involved bailiffs, for which it later quashed the liability and court costs, but that is an entirely different issue.

For an update:

I was not able to make the payments by the 26 September, and so assume my instalment facility has been withdrawn and the balance of £437.52 is owing from that date.

It is unclear after comparing contents of the council's 12 September letter with information on its website, whether I should have received a summons by now.

Its website says "once instalments have been cancelled, a further seven days will be given to pay the full balance otherwise further recovery action will be taken". The letter says if payment is not made immediately a summons will be issued without any further notice and with £70 costs incurred.

Regardless of the above, no summons has been received yet. Maybe in the coming days it will arrive.

[outlawlgo]

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

From:
Sent: 04 October 2012 10:48
To: Public Enquiries
Subject: Local government

Dear Sir/Madam

There is a series of correspondence which I have sent to the Head of Income and Payments Services in regards to what seems to be fraudulent Magistrates' court costs charged to householders of North East Lincolnshire. The contents of the letters are the result of quite a bit of research into recent and past costs reviews with evidence from cabinet meeting minutes etc. Could you please advise me which is the most appropriate department to forward these correspondence to. The Head of Services I've already mentioned will not respond.

Yours sincerely

Dear Mr...

Thank you for your email.

I would suggest you send your correspondence to the Head of Audit or Director of Finance at the council concerned in respect of the precept for this magistrates court . Or alternatively contact the District Auditor who is John Prentice j-prentice@audit-commission.gov.uk who may be able to investigate as part of his remit.

Kind regards,

Public Enquiries Team

Audit Commission
1st Floor
Millbank Tower
Millbank
London SW1P 4HQ

[outlawlgo]

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



From:
To: j-prentice@audit-commission.gov.uk
Sent: Friday, October 05, 2012 12:29 PM
Subject: North East Lincolnshire Council - Fraud


Dear Mr Prentice

I have been given your email address after contacting the audit commission's public enquiries team to establish the most appropriate department to forward correspondence.

As per my October 4 email, the correspondence are in relation to alleged fraudulent Magistrates' court costs charged to householders of North East Lincolnshire. Evidence is contained within the series of letters and has been obtained largely from researching cabinet documents and as a result of Freedom of Information requests.

As stated in my email, North East Lincolnshire Council's Head of Income and Payments Services (to whom I've sent these), has responded by stating she is not prepared to enter into further correspondence regarding the matter.

I have further evidence contained in a report I'm preparing about North East Lincolnshire householders being systematically defrauded. In this instance the alleged fraud is in connection with a bailiff firm contracted to the council which the authority, who are completely aware of this fact, use criminal methods and are consequently, clearly abetting this fraud. Please note that none of these details have been included in the correspondence I'm attaching to this email.

I have experienced some difficulty in identifying which organisation or department has jurisdiction for dealing with these matters and realise it may or may not be in your remit to investigate allegations of Fraud. I would therefore ask if it is not your jurisdiction, that concerns I've raised are recommended for investigation through another channel, be that the Police or the Serious Fraud Office for example.

In the case of the Serious Fraud Office, it must be borne in mind that the scale of the fraud will be such that many millions of pounds will be involved if all councils are accounted for. I have no doubt if researched in the same way North East Lincolnshire Council have, they will all be guilty to a greater or lesser degree.



Yours sincerely

[outlawlgo]

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

The Summons arrived this morning, with notification that the hearing will be at Grimsby Magistrates' Court on Friday morning, November 2.

Oddly there's a 7 day interval between the date of issue and receiving the document through the post.

[outlawlgo]

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

North East Lincolnshire Council
Civic Offices Knoll Street
North East Lincolnshire
DN35 8LN


Ref: NG/CTR/12912


17 October 2012


Dear Ms ......


Re: Council Tax Reminder, Summons and Recovery – Account 550xxxxxxx

I have today paid £437.52 into North East Lincolnshire council’s bank account. This is the sum outstanding on my 2012-13 council tax liability, settled well before the statutory instalment arrangement dictates.

An additional £10 has been paid to cover summons costs. £3 to cover Magistrates court fees and the remainder is NELC’s costs. However, I consider £7 to be an over generous amount to cover those incurred by the council given they are mass produced documents.

I believe the authority must apply for an award of costs at each court hearing. I therefore expect any surplus credited to my account upon the Bench awarding the council less than £10 cost.

It is important you let me know in advance of the hearing whether or not the council will be requesting a liability order for the £60 shortfall of the stated amount payable on its summons.

The document I received today states on it a £70 summons cost payable.

I believe NELC have a policy of only progressing accounts to enforcement for amounts over £50. The position here is unclear if this relates to the liability order stage or any preceding it. However, the amount according to NELC is £60 and so will assume no response from the council will mean I’m required to attend the hearing if I wish to dispute costs.

A request made under the Freedom of Information Act gave North East Lincolnshire Council an opportunity to supply a breakdown of costs attributable to its recovery operations. It was unable to do this, only a fraction of the questions were reluctantly answered and only after attempting to circumvent the request by improperly citing exemptions under the Act.

It seems from the response that North East Lincolnshire Council has breached regulations 34(5)(b) of the Council Tax (Administration and Enforcement) Regulations 1992 which state that these costs need to have been reasonably incurred by the authority.

The inability demonstrated by North East Lincolnshire Council to determine these costs, is proof enough that the Magistrates' court will have had no basis to assess the reasonableness of the authority's claims.

It is therefore inconceivable that North East Lincolnshire Council, or the Magistrates' court for that matter, can lawfully state on the summons document that a predetermined £70 costs has been reasonably incurred.

For your reference, the Council tax practice note number 9 states on page 8:

3.18...The order will include the costs reasonably incurred by the authority in securing the order. Whilst it is likely that authorities will have discussed a scale of fees 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.

Regarding my concerns on this matter, I intend to put it to the Magistrates’ court that in light of the evidence, they do insist that the amount claimed in costs per individual, is no more than that reasonably incurred by the authority.

Yours sincerely

[outlawlgo]

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

Grimsby Magistrates Court
Victoria Street
Grimsby
North East Lincolnshire
DN31 1NH

Ref: NG/CTR/12912

26 October 2012



Dear Sir/Madam


Re: Council Tax Liability Order Hearing 2nd November 2012 – Account 550xxxxxxx

I will be attending Grimsby Magistrates’ court on 2 November unless notification is sent by the Council of an application withdrawal for a liability order.

The outstanding tax has been paid plus an amount covering court fees and the authority's anticipated award of costs which will be applied for at the hearing. However, there is a £60 shortfall to that stated on the summons. The council assumes the Bench is going to award total costs, which when split between the number of defendants, will be a round £70 for each individual. The discrepancy arises because I have budgeted for a maximum of £10.

I have sent details explaining why I believe these costs are unreasonable. I trust the evidence will be sufficient that the court will question the reasonableness of NELC’s claims and require that the council provide evidence to support the amount claimed by way of costs is no more than it reasonably incurs. The “Council Tax practice note number 9” is applicable here which is quoted in both 17 October and 28 September letters under reference NG/CTR/12912.

The main points raised are as follows:


1) Determining costs imposed before case is heard

These issues are covered in my 17 September letter and detail the difficulties, or rather impossibility of determining an award of costs in advance.

The main consideration in establishing the level is evaluating how many orders are applied for in respect of each hearing. This number varies, and so should the costs.

The inclusion of a letter from the council, highlights the nature of its relationship with the court, i.e., the council, on behalf of the Magistrates’ court, determines its own costs.


2) Increasing and Front Loading Penalties

My 17 & 18 September correspondence deals with the council’s decision to raise court costs to plug a gap in its finances. Cabinet documents reveal how in its budget proposals the council forecasted it could raise £752,000 additional revenue over a four year period by increasing the summons penalty.

A proportion of this increased revenue can be attributable to the council’s decision to front load the fees. The authority advised the court that it would no longer charge for the liability order. It is now included in the summons charge breaching Council Tax regulations – a detailed explanation is given.


3) Hiking Costs to Increase Revenue / Fund Additional Resources

Two costs reviews, further to the above are highlighted in the letters of 19 & 20 September. The first reveals how extra staff in Revenues & Benefits Service were funded by implementing a 50% increase in the summons penalty to clear up a backlog of work that had arisen due to changes in the IT system. The other review had two apparent functions. The penalty increase for both Council Tax and Business rates penalties intended to raise an additional income of £38,000 a year. In the case of Business rates, costs were raised disproportionately to council tax as a way of encouraging prompt payment. Hiking costs this way, i.e., creating a deterrent breaches the council tax regulations.

No evidence is apparent in any of the reviews that the council was obliged to submit evidence supporting claims it had incurred additional costs.


4) £1.13 million Incurred by Council – Attributable to Recovery

The letters dated September 21, 24, 25, 26 and 28 analyse the costs which the council claim to be around £1.13 million annually (2011/12 Revenues budget).

The total figure is broken down into three categories – Council Tax, Monitoring & Control and Debt Collection. A percentage of the total budget allocated to each category is attributed to recovery work. No further breakdown is given, and so no proof that the costs are incurred exclusively in the preparation of court applications. The indication is however, that most of this expenditure would account for normal day to day administration costs incurred to run the council tax department.

This has in fact been admitted by the council. Once by the Chief Executive, where in a response made about what costs covered he stated: “the wages of the staff employed to collect Council Tax and Business Rates”. Another, under the Freedom of Information Act: “the costs raised are to cover the cost of Council Tax collection and recovery”.


5) Relationship Between Summons and Liability Order Costs

The letter of September 27 concentrates less on the increases and overall costs charged to the alleged debtor but focuses on the proportion, i.e., the level of the summons penalty in comparison with the liability order costs.

The overall costs appear arbitrarily split between the summons and liability order, suggesting no costing is done to support it. Over several years, the summons went from being the lower of the two charges, gaining more weight until all cost (liability order) had been front loaded to it.

It’s therefore pretty much safe to say that these costs have been manipulated (in breach of council tax regulations) to maximise income.

In 2001-02 the summons penalty was 22 per cent of the overall costs, the following year 30. In 2004-05 it was up to 55 per cent and by 2011 the liability order cost was completely incorporated into the summons. All costs are now charged to the alleged debtor at this point with the liability order element incurred prematurely.


Additional information


Negotiating take-up of Direct Debit:

After recovery action has commenced, it seems council tax payers having agreed terms laid down by their respective councils are managing to get recovery action reversed. Concessions differ from one authority to another but include Summons and costs being withdrawn, reinstating instalments, and, agreeing not to apply for a liability order. Generally, the condition is that the account holder switches to Direct Debit, the council's preferred payment method.

The point was made that the level of costs charged to the individual is dependent on how many orders are applied for by the council in item 1. There are therefore far greater implications for the alleged debtor than simply whether or not a concession is given for the take-up of Direct Debit.

Because of this, total costs are being split between fewer account payers, thus a larger penalty is being charged to the householder as a direct consequence of councils campaigning for a greater take-up of Direct Debit.

As well as the added imposed burden this has on the rate payer, unless a specific clause in the legislation provides for the council to apply regulations discretionally, then the authority will almost certainly be breaching the Council Tax regulations.


A comparison between councils:

I have compared Summons costs between North East Lincolnshire Council and two other unitaries – Darlington Borough Council and Rutland County Council, to see if any logical link exists between the level of costs charged.

Data relates to 2011-12

If recovery methods don’t differ greatly between councils, and there’s no reason why they should, then some very serious questions need answering regarding why NELC require 16 times the expenditure of Rutland Council for the same work.

It could be argued that accounts raised by NELC far out-number those of Rutland Council. This is a factor, but automation will mean this is not so significant. However, factoring this in, a ratio of the number of accounts raised to total summons costs income, still raises serious concerns when Rutland scores 3.64 to North East Lincolnshire’s 11.44.

These examples do not necessarily demonstrate the greatest disparity between costs income claimed by local authorities. Further analysis, will I’m sure, reveal more supporting evidence of the arbitrary nature of costs charged to alleged debtors.

Looking provisionally at two London Boroughs we enter a whole different league. Both Harrow and Harringey charge £125 for a summons. The former edges it score above 21, whilst Harringey, with almost £3.5 million for 102,647 summonses, reaches almost 34 as its income ratio.

With Harringey claiming almost 70 times the expenditure of Rutland Council for the year, this I would have thought highlights the urgent need for the whole process to be regulated.



Yours sincerely

[outlawlgo]

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

Grimsby Magistrates Court
Victoria Street
Grimsby
North East Lincolnshire
DN31 1NH

Ref: NG/CTR/12912

28 October 2012



Dear Sir/Madam

Re: Council Tax Liability Order Hearing 2nd November 2012 – Account 550xxxxxxx

I will be submitting a claim for costs in addition to disputing the council’s costs.

There are no legal fees nor will costs be claimed through a Solicitor as I receive no income, neither employment nor benefits. The costs then will be in connection with time spent by myself and charged at an hourly rate of £18.00.

The claim is split into two categories:

1. Direct costs in connection with hearing.

2. Indirect costs due to council’s negligence in court applications and bailiff enforcement.

Much of the work involved researching legislation. For example, it had been necessary to look at the Data Protection Act 1998 and National Standards for Enforcement Agents to submit complaint(s) to the Information Commissioner for the council’s bailiff contractor mishandling personal data. Another was a lengthy report submitted to the Ministry of Justice as a consequence of NELC’s negligence. The Fraud Act 2006 and the Home Office circular 47/2004 had both been necessary for an understanding of the respective fraud definitions and police guidance.


Yours sincerely

[outlawlgo]

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

All done at court.

The verdict was as I expected. However, I had probably about just under an hour in the courtroom which I didn't expect. I will write up in detail but here's a basic account:

Appeared before two Magistrates this morning disputing NELC's summons costs. The Clerk to the Justices who directed the hearing and advised the pair on the bench about relevant points of law was clued up and seemed to agree with my written evidence which amounted to more than 40 pages.

Throughout the hearing the lead Magistrate displayed no understanding of the evidence I'd submitted nor any specialist knowledge of the relevant regulations which would be key to determining a fair verdict.

Regardless of the Clerk to the Justices pointing out the legal position, the Magistrates were hell bent on going their own way and siding with the prosecution (North East Lincolnshire Council).

After retiring for less than ten minutes to reach a decision, the Magistrates returned to give the verdict. Out of the forty pages of evidence I'd supplied, the Chair of the bench singled out one paragraph which was deemed, theoretically, to be contempt of court. This was focussed on and used as leverage to circumvent due process and conclude that the Councils summons costs were reasonable.

The Magistrate dismissed 40 pages of evidence, merely because he had been able to exploit a few words which either offended him or he claimed were offensive.

The paragraph he used:

This is almost certainly a revenue scam. The true costs incurred by the authority are clearly a fraction of those dishonestly being claimed through the court. It is also clear North East Lincs residents charged with these costs, are being exploited by the Magistrates' court and council's joint heist operation.

I stand by that as being truth, what was his problem?

[miliitant]

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

was it a lay magistrate or a Stipendiary Magistrate

stipendiary are the same as district judges now i believe

are you considering an "appeal" and getting case law

[outlawlgo]

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

I'll include the details when I get it all written up, but I can tell you there was no cooperation from any of the court staff when I asked for the names of the Magistrates and Clerk after the hearing. All female staff, Ushers etc., called security whenever I requested any information. Consequently they wouldn't give their names, so no way of finding out what type of Magistrates they were.

I left the courtroom saying it wasn't the end of the matter, so yes, I'll be looking at appealing the decision.

[labman]

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

I sincerely hope so. I doubt anyone else in the country has such a strong case for CT as you, and your knowledge is now immense.

[labman]

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

I'll include the details when I get it all written up, but I can tell you there was no cooperation from any of the court staff when I asked for the names of the Magistrates and Clerk after the hearing. All female staff, Ushers etc., called security whenever I requested any information. Consequently they wouldn't give their names, so no way of finding out what type of Magistrates they were.

I left the courtroom saying it wasn't the end of the matter, so yes, I'll be looking at appealing the decision.

I don't know the answer to this, but are they legally allowed to deny you this information?

[miliitant]

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

no labman, they cannot refuse to give out that info unless its for security reasons, terrorism case etc

its a fundamental right to know your accusers and who is to judge you in the court of the realm

look up the 1987 case of R v Felixstowe Justices, in which it was held that it was unlawful for a court to refuse to give the names of magistrates sitting in proceedings.


Held by Lord Justice Watson that :-" There is a right to know who sits in judgement, and denial of that right is unlawful, unwarranted and inimical to the proper administration of justice, further that there is no such person known to Law as 'the anonymous JP'.”
“The practice among some Magistrates of claiming anonymity has been declared unlawful (R v Felixstowe Justices (ex parte Leigh) [1987] 1 All ER. 551, DC).
Open justice, it was said, demands that the names of those who sit in judgment should be known."

i am glad my law studies are starting to produce results

[outlawlgo]

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

I don't know the answer to this, but are they legally allowed to deny you this information?

I asked three different people. The last person on the enquiry desk asked her supervisor (a fourth) and nobody would reveal who was in the court room. They reiterated to just state the courtroom number, date etc., on any correspondence. It's also unlikely they'll release details even on written request.