Misallocating payments and ignoring email to exploit Magistrates court costs

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

From: [outlawlgo]
To: enquiries@rossendales.com
Cc: Various
Sent: Tuesday, July 12, 2016
Subject: Council Tax - North East Lincolnshire Council, Reference Number: 28628956


Dear Sir/Madam

Re: Council Tax - North East Lincolnshire Council, Reference Number: 28628956


Recovery Officers at North East Lincolnshire Council have engaged in a vendetta that has and continues to waste resources of numerous public services costing taxpayers hundreds of thousands of pounds. Those responsible are clearly abusing their positions and wouldn't think twice about using any means available to further their campaign. Clearly they see Rossendales as a way of doing this by having its bailiffs harass me to attempt recovery of a debt which the council only has permission to enforce as a result of misleading the court by submitting false evidence.

It is worth pointing out that the vendetta was sparked off by my objection to the council's mishandling of a complaint a number of years ago into Rossendales application of several hundred pounds in fees for such things as phantom visits, levying randomly on a vehicle in a residential car park (surprisingly not owned by myself) and negligently handling sensitive personal information relating to enforcement.

North East Lincolnshire Council has appointed Rossendales knowing full well that none of its bailiffs will be successful in obtaining any monies from myself and so the work undertaken amounting to £310 accruing so far in fees will have to be written off.

Despite not owing the debt, I do happen to know that the success of a bailiff obtaining fees from the debtor relies solely on the taxpayer being unaware that there is no obligation to engage with the enforcement company.

I suggest that if Rossendales want to recover its losses it does so by demanding compensation from those officers at the council who have abused their position by instructing Rossendales to further their personal vendetta.


Yours sincerely

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Incidentally, It might be worth noting that no element whatsoever of my payments made since the account has been with Rossendales has been diverted to the £310 which has accrued so far in bailiff charges.

[Milo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

An excellent notice and one that demonstrates very clearly that even at this very late stage, it is possible to set up a payment arrangement with Rossendales by making a initial payment of just 10% of the debt.

It may well be the case that you consider that you do not owe the debt. That is of no consequence at all to the enforcement agent. He cannot go 'behind' the Liability Order and his role is now to enforce the debt.

PS: The Taking Control of Goods Regulations 2013 provides a range of statutory notices that must be used by the enforcement company. If an enforcement agent attends a property and is unable to make contact with the debtor (as appears to have happened here) the regulations do not provide for a statutory notice to be left. Each company will draft their own 'advisory notice'. Accordingly, there is no requirement to provide a breakdown of fees or provide a time and date that the visit was made.

I cannot see any fault at all with this advisory notice. No doubt you will though.

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Rossendales turned up today. Whoever it was, presumably Keith Grice, managed to get through the security door without me letting him in (flats with security system).

There is no breakdown of debt, fees etc, only a total (£521) and no time of visit. However, he is good enough to allow me (even at this late stage) to pay what I DON'T OWE in instalments.

FOR NON PAYMENT OF COUNCIL TAX / NATIONAL NON DOMESTIC
RATES / ROAD TRAFFIC TMA
ENFORCEMENT AGENT ATTENDANCE

I have attended today with the intention of Taking Control of your goods to discharge the above debt.

AMOUNT OUTSTANDING £ 521.0O If you cannot pay this amount in full you should be aware that even at this late stage with an initial payment of £50.00 you can still pay by installments.

You may pay by Postal Order, Cash, Bank Draft or Debit/Credit Card. Payment should be made direct to the Enforcement Agent below to avoid unnecessary action

DO NOT DISREGARD THIS NOTICE

Enforcement Agent in Charge: KEITH GRICE

Contact Number: 07515050577

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

From: Hanmer, Peter
To: outlawlgo ; Res - Customer Services
Cc: various
Sent: Friday, July 01, 2016
Subject: RE: False statement to defraud through council tax liability application

Dear Mr outlawlgo,

Thank you for your email. I can confirm that a detailed investigation was carried out by members of the audit and assurance team and its work was reviewed by myself. As per my correspondence dated 23 June we have made our position clear, based on the evidence of the review, and will not be corresponding any further on the issue.

Kind regards

Peter Hanmer

Peter Hanmer, Head of Audit and Assurance, Northern Lincolnshire Business Connect
Municipal Buildings, Town Hall Square, Grimsby, DN31 3HU
Telephone (01472) 323799 peter.hanmer@NLBusinessConnect.co.uk

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

From: outlawlgo
To: Hanmer, Peter ; Res - Customer Services
Cc: various
Sent: Monday, June 27, 2016
Subject: Re: False statement to defraud through council tax liability application

Dear Mr Hanmer

It won't come as any surprise that I am completely dissatisfied with your response and consider it wholly unacceptable. Though I anticipated the council's dealing with the matter would be a sham, that makes it no less acceptable.

Of course, you provide no evidence whatsoever to support your decision because it would be impossible to do so as you are contending, without any grounds, the concrete evidence provided you which is not only beyond reasonable doubt but beyond all doubt.

The decision is simply indefensible and the fact that the guilty parties have been protected by the process is evident that the [redacted].

It is the role of the Council's Monitoring Officer to report on matters he believes are, or are likely to be illegal and is responsible to ensure that the Council, its Officers and elected members maintain the highest standards of conduct. Clearly by turning a blind eye in this matter he has failed in discharging his statutory duty, causing not only gross injustice to me as the taxpayer affected by continual harassment of officers pursuing a vendetta, but has also resulted in damaging the reputation of the Council.

Officers should not, but are being allowed to abuse their positions in pursuit of personal vendettas, costing hundreds of thousands of pounds of taxpayers money, over a relatively insignificant sum which in any event has been criminally engineered as a debt that is not owed by those officers purely for their own perverse satisfaction. There is no place within a local authority for individuals of this kind and it is of paramount importance that when such practices are highlighted, the person within the council with responsibility acts on the information by dismissing those guilty and has the matter reported to the police.

Separate but related issue

There is another failure of the Monitoring Officer discharging his statutory duty, which until now has not been dealt with, but nevertheless needs investigating as it has had a material impact on the present issues. The matter relates to 2013 when [redacted], as Monitoring Officer was the person responsible for ensuring that the Council's decision making was within the law.

Background

Grimsby Magistrates Court had been obstructing the progress of an application to state a case for an appeal to the high court in the matter of NELC's application for a council tax liability order. It was looking unlikely that the court would produce the document as was required for the case to continue because of the failure to cooperate.

In line with pre-action protocol for a claim for mandatory order, alternative remedies were suggested in an email to the Justices' Clerk with the council copied in on 6 February 2013 (see attached). In the case of the council, the remedy suggested was to apply to the Magistrates court under section 82 of the Local Government Act 2003 to either quash the liability order for £60 obtained on the 2nd November 2012, or apply for a lesser amount than that for which the original order was made that was equal to the sum that had already been paid (in respect of reasonable costs).

On 8 February 2013 (also attached) the council replied stating it was not prepared to apply to the Magistrates Court to quash the liability order as it claimed it had been correctly obtained.

I disputed this in a letter dated 14 February 2013 (attached) on the grounds that the application should have ceased when the aggregate of the sum outstanding and an amount equal to the costs reasonably incurred by the authority was paid. In any event, the letter dated 5 February 2013 attached the email (6 February 2013), pointed out that the court issued a liability order where there was no evidence on which the Magistrates could have found their decision. Consequently, one of the questions in law asked in the application was whether the costs being disputed as unreasonable should have been awarded by the court without evidence from the council to support them.

We now know that they shouldn't have; it was unlawful to award costs without proof of how they had been arrived at. This has been confirmed in the case between Tottenham Magistrates and the Reverend Paul Nicolson (see case attached). It was therefore incorrect for the council to state in its letter of 8 February 2013 that the liability order had been correctly obtained (See para 61 in R (Nicolson) v Tottenham Magistrates [2015] EWHC 1252 (Admin), attached):

" 61. This application for judicial review of the decision taken by the Magistrates must therefore succeed. I was told that since the hearing the order for costs against the Claimant has been withdrawn, but that does not render the proceedings academic; as I have said, it raises issues of wider public importance. Had the order not been withdrawn, I would have quashed it. Since it has been withdrawn, I will declare that the order was unlawful, because:

i) the Magistrates did not have sufficient relevant information before them to reach a proper judicial determination of whether the costs claimed represented costs reasonably incurred by the Council in obtaining the liability order; "

Moreover, the council has since produced a calculation which proves that expenditure it was claiming was not actually incurred by the council in respect of my case. It is evident from the breakdown that those costs were attributable to activities such as officers who engaged with customers (telephone calls etc) to negotiate payment arrangements and to monitor them, and therefore completely irrelevant to my case and unlawfully claimed.

It was the person appointed Monitoring Officer at that time who was responsible for the decision made not to apply to the Magistrates court as suggested in the pre-action protocol as informed in the 8 February 2013 letter on the basis that the liability order had been correctly obtained.

Consequences

This failure to apply lawful and proportionate decision making, hence not taking the correct remedy has led to years of injustice as it has enabled the Council to misallocate payment to the sum subject to appeal when payments have clearly been intended for the year's council tax account which was current when paid. Having balances outstanding for different years and the opportunity that has given the council to engineer payment arrears, this has led to recovery being taken through the court each year since with further costs added in the proceedings considered here. That in turn has led to time consuming and fruitless disputes i.e., formal complaints, escalation of issues to the LGO, police, police appeals and entering into a private prosecution against the police for negligence by improperly exercising police powers under Section 26 of the Criminal Justice and Courts Act 2015.

Objective

I would like in addition to having a proper response, with names of those involved in the investigation and findings properly documented, that this correspondence serves as a formal complaint about the Chief Executive, Monitoring Officer and all others involved in the investigation process. Naturally as my complaint alleges irregularity, my expectation is that in accordance with the Council's 'Fraud Response Plan' the matter is referred to the Audit, Risk, Insurance and Corporate Fraud team immediately on receipt, despite those who may be referred the matter being some of the officers (elected members) who are the complaint's focus.

Yours sincerely

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Can't help thinking that this person had too much to lose (like his contract), by properly conducted the investigation, hence why it was a sham.

Peter Hanmer CPFA CMIIA

Financial Services
Current Northern Lincolnshire Business Connect

Experience

Head of Audit and Assurance
Northern Lincolnshire Business Connect
April 2016 – Present (3 months)

Member of the management team of Northern Lincolnshire Business Connect which provides a range of support services (including ICT, HR, Financial Services, legal, audit) to public organisations in Northern Lincolnshire including two unitary councils.

As Head of Audit and Assurance I am responsible for leading a team of 23 staff providing internal audit, risk management, insurance, anti fraud and governance assurance and support. In particular I am the Chief Internal Auditor at both North lLincolnshire Council and North East Lincolnshire Council.

[Adamna]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Literally, persona non grata https://en.wikipedia.org/wiki/Persona_non_grata

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

The only surprise is the Council determining the outcome to its internal investigation so quickly, but other than that there are no revelations, i.e., it's a complete load of bo!!ock$:

From: Hanmer, Peter
To: outlawlgo
Cc: Maione, Tony ; Res - Customer Services
Sent: Thursday, June 23, 2016
Subject: False statement to defraud through council tax liability application

Dear Mr outlawlgo

As set out in previous correspondence from Mr Maione, the Council’s monitoring officer, the audit team has now reviewed the allegations contained in your email to me dated 22 April 2016 under the auspices of the Council’s whistleblowing policy. A review of all relevant correspondence, court papers and interviews with key officers has taken place as part of this process. It has been concluded that the actions taken by officers regarding your Council Tax account were correct based on the information and correspondence made available to them at the time, and we have found no evidence that any fraudulent activity has taken place.

I note your comments around the complaints policy and the fraud response plan in relation to the handling of complaints involving allegations of fraud and corruption and these will be considered when the Council updates both policies during 2016/17.

Kind regards

Peter Hanmer

Peter Hanmer, Head of Audit and Assurance, Northern Lincolnshire Business Connect
Municipal Buildings, Town Hall Square, Grimsby, DN31 3HU
Telephone (01472) 323799 peter.hanmer@NLBusinessConnect.co.uk

[Adamna]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Outlawlgo,

The question that I asked of you could not have been simpler. It was this:

Finally, I have finished reading all of the posts and articles and FOI requests.

I have a query (and it's one that I notice that nobody has ever asked you before).

Your entire dispute centres solely upon your own decision in 2012 that the summons cost of £70 was too much. You considered that £10 was all that North East Lincs Council should legally charge you.

Accordingly, you paid £10 and deliberately left a balance remaining of £60. Would you mind explaining how you came to the decision that £10 was justifiable?

£10 is as good a sum as any other. It's a one-off assessment unlike theirs of £70 applied to thousands of people, and Outlawlgo is asking for a similar justification. They have not given it. The offer was also an invitation to negotiate a justified amount, outside of the rigged court process. I have calculated that my council's actual costs are £6.12 per summons, so in fact it could be seen as rather generous.
I am sure there were grounds for arriving at that figure. Why is it so important to you?

[Adamna]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

The subject of 'summons costs' etc has already been subject to a very high profile court case initiated by the Reverend Nicholson. He lost his case. He appealed and that case was also lost and sadly, he has been ordered to pay over £50,000 in costs.

Why would you say that Milo? The Rev Nicolson WON his case regarding costs, with his very substantial pro bono QC costs awarded. The more recent case was against the auditors, Grant Thornton, and the losing position will no doubt be appealed. If you know Paul so well, you would be fully aware of this, and his collaboration with Outlawlgo. I really do not understand your interest in all this, your continued undermining of Outlawlgo, who must now be considered the country's leading authority on 'court costs' for summonses and liability orders, outside of those that benefit from them. Of course without the process bailiffs could not be engaged, and then neither you as an advisor. Is this why you don't seem to like the perfectly legitimate and well researched challenge? Do you have anything to contribute other than to cast aspertions on the person who has?

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Another Rossendales threat.

Isn't it usual for enforcement to be halted whilst the debt is in dispute? The council's internal audit committee should be conducting an investigation into the allegations.

Rossendales

PO Box 324
Rossendale
BB4 0GE

enquiries@rossendales.com

Client: North East Lincolnshire Council - Council Tax
Outstanding Amount: £286.00
Reference Number: 550xxxxx
Our Reference: 28628956
Date: 16th June 2016

Notice of Enforcement Agent Visit - Please Do Not Ignore

Dear Mr [outlawlgo]

As you have ignored all previous correspondence on this matter I now inform you that your debt has been allocated to an Enforcement Agent to visit your address to recover the amount detailed below, relating to Council Tax and costs outstanding to North East Lincolnshire Council for a court order issued against you on 30/10/2015.

	North East Lincolnshire Council amount		£211.00
	Enforcement Costs incurred		£75.00
	Paid		£0.00
	Total Amount Due:		£286.00

When the Enforcement Agent visits your address, this will immediately result in further costs of a minimum of £235.00 being added to your bill.

To avoid these costs the total amount due shown above needs to be paid in full direct to Rossendales Ltd., NOT THE COUNCIL immediately and before the visit is made.

Any goods that you own are now at risk of being removed and sold, all potential costs are shown on the back of this notice.

The details on how to pay the amount shown are on the back of this notice.

If you cannot pay in full or dispute the amount due then you need to contact us immediately; details on how to do this are shown on the back of this notice.

Please note that any other amounts you may owe to the Council that are not covered by this court order need to be paid as previously advised.

For and on behalf of

Rossendales Limited

[Milo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Some of this is set out in the drafted Grounds of appeal (from paragraph 61):Evidence materialising of significant relevance whilst appeal held in abeyance 61. The Magistrates’ court has prevented these proceedings (as of December 2015) from reaching conclusion for over three years and as a consequence new evidence has materialised of significant relevance in the meantime. Since instituting these proceedings, pressure from various quarters has been the trigger for the Council to keep under review its level of court costs and to produce a breakdown annually supporting them. The first published set of accounts [Ex1] appeared on the Council’s website, based on activity in 2012/13 informing the standard costs charged during 2013/14.62. The Council had before giving this undertaking provided a general description of expenditure that accounted for its annual Revenues budget which had been disclosed as £1.1 million (2011/12). This sum represented the limit up to which it considered its costs income would be lawful and presumably formed the basis upon which it was satisfied a breakdown was unnecessary. This idea is underpinned; for example, as a final safeguard in a series of checks to be satisfied its costs are claimed lawfully, the Council consistently refers to ensuring that the monies raised from costs do not exceed the cost of the service. Its website which provides information relating to council tax recovery, states with relevance to its standard summons costs, as follows:

“This figure is determined based on comparisons with the fees charged by neighbouring Councils and the national average. A check is made to ensure that the monies raised from applying costs are not greater than the actual cost of the service”

The Information Commissioner records in para 14 of Decision Notice (ref: FS50400874) relating to a Freedom of Information request made to the Council to obtain a breakdown for the calculation of the £70 summons costs:

“....NELC says it does not hold a breakdown for the calculation of the £70.00 fee, as it was based on comparisons with the fees charged by neighbouring authorities....NELC says the figure of £70 was then compared against national averages, and as previously identified checked to ensure that the monies raised from costs would not be greater than the cost of the service.”

In paragraph 6 of the same Decision Notice the Council implies that because court costs income is within its annual budget (£1.1 million) for all activity associated with recovery of Council Tax etc., it considers that its claim is lawful:

“...The [Regulations] do not require the Council to justify the amount charged to each individual, only that the costs have been reasonably incurred by the authority in connection with the application up to the time of payment or tender. The annual budget for all activity associated with recovery of Council Tax and Business rates amounts to approximately £1.1 million.”

63. The soundness of this approach – would as a starting point – have to rely on all its costs which make up its Revenues budget being permissible with reference to the Regulations which they are not. Expenditure is attributed to activities including, but not limited to processing attachments of earnings, responding to complaints, liaising with bailiffs, monitoring payment arrangements etc. All theses costs, along with others not listed (see below para 108), relate to actions carried out after the liability order has been obtained and can therefore not be described as the Regulations provide ‘an amount equal to the costs reasonably incurred by the applicant in obtaining the order’.64. However, the costs breakdown, which has since these proceedings been policy to produce, does not assist the Council’s defence; instead it provides evidence that expenditure additional to that which the law provides was included in the £70 summons costs. Policy to review court costs and produce annual breakdown65. The breakdown attributed the vast majority of expenditure to instituting the complaint (the summons). Only 5% of what was accounted for as the Gross Recoverable costs was estimated as being attributed to further work in obtaining a liability order. The breakdown shows, in apparent compliance with the law, that the estimated 5% was deducted from the gross figure before dividing that sum by the number of summonses issued to arrive at the average cost per summons. 66. In accounting terms therefore, the relatively small cost attributed to additional work in obtaining a liability order after a summons has been issued is absorbed by the taxpayer. This matter has been considered recently in judicial review proceedings. Whilst the present case has been ongoing, another with significant relevance to matters raised here has been determined. In R (Nicolson) v Tottenham Magistrates [2015] EWHC 1252 (Admin) (“Nicolson v Tottenham Magistrates”) the claimant sought judicial review of the decision of justices to make an award of costs in favour of the Interested Party, London Borough of Haringey (“LBH”) following the granting of a council tax liability order concerning unpaid council tax. 67. It was agreed in Nicolson v Tottenham Magistrates (§50) that ‘In principle there is no reason why a local authority should not decide to limit the costs it claims to the costs in connection with issuing the summons’.68. The breakdown allowed the Council to demonstrate, in theory at least (or to an acquiescent body willing to endorse the figures), that the requirements of the Regulations were met. Under proper scrutiny however, validation would require further proof that the expenditure was reasonably incurred and the ‘gross recoverable costs’ were in fact lawfully recoverable. The very minimum that would be expected from the court to be satisfied of this would be that:

a) estimated further work attributed to obtaining the liability order was not determined as negligible, merely to justify charging all costs up front, b) average costs do not include subsidy for bad debt arising from waived or unrecoverable costs,c) costs do not include subsidy for administration expenditure arising from setting up payment plans, dealing with queries etc, (see Consent Order-Annex A, §128)d) costs claimed do not include any element attributable to the expenditure of enforcing the order after it is obtained

a) Further work to obtain liability order determined as negligible69. The calculation would have to be dismissed on the basis that it provides nothing at all that could satisfy the court that the expenditure attributed to obtaining the liability order only represented 5% of the gross recoverable costs, based as it appeared to be on an arbitrary estimate. In any event, the Council’s claim to incur the vast majority of expenditure in respect of instituting the complaint conflicts entirely with Chiltern District Council’s 16 March 2010 Cabinet report into Court costs which would reinforce justification for the court to require evidence. The essential point being made in the report is that, the majority of costs it incurs arise from the court hearing to obtain the order and the additional work required to secure payment thereafter. Paragraph 4 of the report is as follows:

“The level of costs should be realistic but reflect the fact that we do not believe in principle that it is fair to pass on the costs of recovery from the few people who default on payment of Local Taxes to the vast majority who do not. Most of the costs the Council incurs arise from the application for a liability order at Court and the additional work required to secure payment once we have the liability order.”

70. The probability that the split is random is reinforced further by the fact that the Council once weighted costs contrary to how they are applied now. In 1998/99 there were no summons costs applied; only debtors against whom liability orders were obtained had costs added. From then on the weight shifted until after the April 2011 review, the entire costs were applied on instituting the complaint (see above paras 28-29).b) Subsidising bad debt arising from waived or unrecoverable costs71. The calculation would have to be dismissed similarly because it could not be established whether the standard costs included a subsidy for bad debt. It is clear from subsequent breakdowns relating to 2013/14 and 2014/15 that the standard sum recharged to customers in respect of summons costs include a significant element of bad debt brought about by defendants, who for example, may have no means to pay. Those debtors are then being subsidised by those from whom payment is more easily recovered. The Council’s Cabinet report, Review of Council Tax court costs, dated 17.2.14 confirms this, as follows:

“The Council recognises the difficulties some residents have encountered in paying Council Tax as a result of Welfare Reform changes, and as a result has been more flexible with instalment arrangements. In cases where residents owe a modest amount, and have subsequently made an arrangement which clears the balance within the financial year, costs have not been applied. It is anticipated that such action will continue into 2014/15.”

72. The impact this has on the individual ‘standard cost’ can be appreciated by comparing the estimate of summonses in the calculation with the figure submitted to the Chartered Institute of Public Finance and Accountancy (CIPFA) relating to the number of Council Tax summonses issued³. It is indicated from the Council’s breakdown (and number of summonses issued in 2013/14) that at least 42% of taxpayers against whom complaint was made were summonsed without costs applied. The CIPFA figure was 17,197 and the dividing figure used in the Council's 2013/14 calculation was 10,000. From this it is seen that the defendants actually paying the costs are paying an inflated sum to subsidise the costs of those others having them waived.73. Put in context, at least £25 was added to the standard sum for the remaining debtors, which is conservatively estimated because no element of bad debt has been factored in to account for unrecoverable costs in those cases where they were applied. 74. The calculation confirms that the average cost per summons is determined by dividing its gross recoverable expenditure by an estimated number of summons requested where costs are applied. The recorded number of summons issued (17,197) was significantly higher than the estimated number of summons requested where costs were applied (10,000) used in the Council's 2013/14 calculation. The relevant part of the Council’s breakdown is presented as follows:

	Gross Recoverable costs		597,160
	Estimated number of summons requested in 2013/14, where costs applied		10,000
	Cost per summons		59.72
	Cost rounded to nearest £		60

_________________³ A substantial number of householders summonsed were not included in the estimated number of applications, therefore artificially inflating the individual ‘standard cost’75. Clearly if the true number of summons issued (17,197) was substituted for the 10,000 figure above, the cost per summons, based on the Council’s method of calculating the sum (disregarding other questionable expenditure), would return a sum of £34.72.76. The disparity between the number of summonses issued and the figure used has almost certainly arisen from the effects of the Welfare Reform Act 2012 (see above paras 51-60). However, even before the Act’s introduction in April 2013 (albeit to a lesser degree), the average cost included expenditure attributable to instituting the complaint, which in a percentage of cases could not be recovered from the person summonsed. That element of expenditure was therefore subsidised by those from whom payment was obtained.c) Subsidising administration cost for customer contact77. The calculation would be impermissible because it includes a disproportionate amount of staff time attributable to customer contact under the budget category, ‘Council Tax’. This expenditure arises from dealing with queries/calls etc. as a consequence of issuing summonses. A second category, ‘Debt Recovery’, also includes a disproportionate amount of staff time that accounts for expenditure in negotiating, setting up and monitoring payment arrangements etc. The vast majority of this expenditure will not have been incurred by the Council in a proportion of cases, for example where the application does not proceed (by virtue of payment or tender) or where it does proceed it does simply without staff contact.78. The gross recoverable costs under the ‘Council Tax’ budget is £260,912. Based on the Council’s computing method, this adds £25 to the cost per summons, though an element of this would arguably be legitimate only in cases where the debtor had taken up resources by engaging staff in matters connected with the summons, as this is the basis upon which the expenditure is justified.79. The breakdown explicitly sets out that its recoverable costs (after deducting 30% for routine billing activity from the ‘Council Tax’ budget) is in the ratio of calls arising from summonses to calls arising from reminders that do not result in a summons. The final recoverable costs for those proceeding to summons is a sum estimated as 50% (£260,912) with the other half attributed to what the Council categorises as ‘those paying on time’.

80. None of the expenditure could have lawfully been incurred by the Council in respect of the Appellant’s summons simply because the assumptions on which the calculation was based were that each person against whom complaint is made would take up resources by engaging with staff in one way or another in matters connected with the summons.81. Gross recoverable costs under the ‘Debt Recovery’ budget are £327,806 and add £31 to the cost per summons. A £3 fixed cost is budgeted for in this category and payable on making complaint to the justices for each application. This element is therefore justly claimed in respect of every summons issued and so in the present case can have been considered reasonably incurred by the Council.82. With the account having been settled on receipt of the summons, none of the other expenditure could have been incurred by the Council in respect of the Appellant’s summons because there was no outstanding liability. No resources were therefore called upon to negotiate, re-schedule or monitor any payment plan and the whole element of costs relevant to the ‘Debt Recovery’ budget, except £3 court application fee would be impermissible.83. In broader terms, the majority, if not all (see below paras 93-96) of the costs appear questionable even in those cases where resources are required to re-schedule and set up payment plans etc.84. Additional to the statutory Regulation’s instalment scheme, regulation 21(5) provides for an agreement to be made between the billing authority and the liable person either before or after the annual bill is issued. In such cases, a debtor may, if the agreement is kept, avoid incurring summons costs. However, this is enabled by, and at the cost of the Council re-scheduling and monitoring the plan which must exceed any that would have been incurred from simply allowing the pre-set parameters in its council tax processing system trigger the appropriate action uninterrupted by recovery staff.85. Additional administration costs incurred by the Council due to the interruption of the automated process cannot lawfully be included in the recoverable costs from which the average summons is computed because the extra recovery work caused is unrelated to those cases that result in a summons. Neither can the cost be recovered from customers, for whom the re-scheduled payments are made (see Consent Order-Annex A, §101), because the measure is taken to prevent (or instead of) taking recovery action.86. This expenditure must therefore be absorbed by the Council in a way consistent with other administrative functions – processing benefit claims for example. The line of reasoning that follows removes any ambiguity that the Regulations might allow for this administration cost to be subsidised by those against whom complaint is made to the Magistrates’ court:

• in order for a billing authority to recharge costs to the debtor, it is required first to make complaint to the Magistrates’ court; but• where applications to the court are not made (by virtue of flexible payment plans being arranged), potential rechargeable administrative costs in those cases are rendered unrecoverable from those for whom the concessions are made• expenditure can therefore only be met by inflating the standard sum or alternatively having the cost borne by the taxpayer; however• where complaint is made, the amount claimed must not exceed what is reasonably incurred by the authority in an individual case. Clearly no expenditure attributable to assisting the debtor avoid recovery is incurred by the Council which is referable to those debtors summonsed because none of those for whom concessions are made are proceeded against;• to that end, it would have to be treated as an unavoidable cost in administering council tax as it would be unlawful to have this element of expenditure subsidised by inflating the standard costs.

87. Notwithstanding that there is no legislative provision to recover this cost, the sheer size of the estimated recoverable component, indicates that it must be funding far more resource intensive functions than merely an automated process, upon which instituting the summons relies. Engaging with customers for example, would far outweigh the demand on resources and it likely that even expenditure in respect of work done after securing the order is included, as almost a third of a million pounds annually is accounted for.88. Even before the Welfare Reform changes the Council has implied through various documents, reports etc., that its standard costs include subsidy for bad debt and/or for administration expenditure attributable to assisting the debtor avoid recovery. In a budget consultation in 2010 (see Consent Order-Annex A, §§120-131) particularly §125 the Council stated that ‘the number of summons issued has reduced over the last 2 financial years due the work that is being done to make more flexible arrangements with debtors at an early stage’.89. On 29.11.12, the Grimsby Telegraph published an article informing readers how council tax arrears are recovered. At the final notice stage it stated ‘the council gives the opportunity to bring the account up to date and continue with instalments if the customer agrees to a direct debit’.

90. The Council has a ‘Debt Management Strategy’ which provides more insight into how the subsidy element of court costs is increased to fund the Council’s campaign to secure a greater take-up of account holders who pay by direct debit. Paragraphs 10.7 & 10.8 state so far as is relevant as follows:

“10.7 When recovery action has commenced payment arrangements will only be entered into when the debt is secured by a liability order or the debtor agrees to make payment by direct debit...... ......................10.8 In exceptional circumstances special payment arrangements may be made by authorised staff prior to a liability order being obtained and without the debtor agreeing to pay by direct debit.”

91. This raises two issues; one that expenditure is incurred by the Council for work attributed to customer contact in setting up payment arrangements, for example, where payment is agreed by direct debit, and as a consequence, no order is obtained nor court costs incurred by the debtor. The other concerns the Council’s application for an order to protect its interest where circumstances are not exceptional, and where no agreement is made to pay by direct debit (thus costs are incurred by the debtor).92. Inflating the standard sum for the purpose of subsidising bad debt has been asserted already to be unlawful. However, there is also an exploitative element linked to the offer of having court costs withdrawn as bargaining power to persuade taxpayers to sign up to the Council's preferred payment method. This goes beyond just subsidising bad debt as it exploits those against whom costs are applied by inflating summons costs to directly fund the Council’s campaign to secure a greater take-up of direct debit. The success of which depends entirely on the volume of costs that are waived.93. Where the Council allows for an arrangement to be entered into, conditioned upon obtaining a liability order to protect its interests, those debtors are liable for costs so theoretically that expenditure is recovered from those driving the level of activity. It is however contested, even under these circumstances, that the law makes no provision for its recovery. In that case, no cost referable to the Regulations, whether attributable to bad debt or subsidising arrangements before recovery has begun, will be recoverable.94. As a simple matter of statutory construction, it is evident that the Regulations do not condition that a liability order may be applied for where there has been tendered to the authority the aggregate of the two sums described in parts (a) and (b) of sub-paragraph 34(5), as follows (emphasis added):

“(5) If, after a summons has been issued in accordance with paragraph (2) but before the application is heard, there is paid or tendered to the authority an amount equal to the aggregate of—

(a) the sum specified in the summons as the sum outstanding or so much of it as remains outstanding (as the case may be); and(b) a sum of an amount equal to the costs reasonably incurred by the authority in connection with the application up to the time of the payment or tender,

the authority shall accept the amount and the application shall not be proceeded with.”

95. Considering the relevant provisions of the Regulations in the context of a payment arrangement being agreed once recovery action had commenced, it is a reasonable understanding that the re-scheduling is made as a consequence of a formal offer or proposal. It is also a reasonable understanding of the terminology used in regulation 34(5) that a “tender” is used in the context of a formal offer, in response to which the authority must accept and the application not be proceeded with.96. In that case, it would not simply mean there was no longer a lawful avenue to proceed further and request a liability order, but also that the cost attributable to the work involved in making the arrangement could not lawfully be included in the costs claimed. Expenditure may only be recharged that has been incurred by the authority up to the time of the tender and clearly resources called upon by engaging staff in the matter would occur after the payment was tendered.97. It follows therefore that the associated costs, even in cases were payment plans are re-scheduled (pre or post enforcement commencing), can not include any element of expenditure which is attributable to controlling or monitoring those plans as this activity must logically follow reschedulement. Gross recoverable costs under the ‘Control & Monitoring’ budget are £143,215 and add £14 to the cost per summons and would, if referring to rescheduled payment plans (in whole or in part) be unrecoverable in the appropriate proportion.98. If the recoverable amount under the ‘Control & Monitoring’ category budgets for checking account details before instituting recovery, then that would be wholly unjustifiable because there are no demonstrable checks. All papers served on the defendant in connection with the application are generated as a consequence of settings in the council tax software. Parameters are agreed in advance by the relevant manager and set in its Council Tax processing system relating to the number of days behind and the monetary value etc., and summonses issued on this basis.99. If any doubt arises that the Council does not totally rely on the automated procedure and there may possibly be staff double checking the bulk court applications, then this can be disproved beyond all reasonable doubt. It is provable that the Appellant has, where all payments have been up to date, been subjected to recovery by the Council due to a deficiency in its Council Tax processing system which would have been highlighted if a manual check into payments made on the account had been carried out prior to instituting the complaint.

100. In explaining how the recovery action had wrongly been instituted it is helpful if some background is provide into the payment system relied upon by the Council to automatically allocate payments when the council is owed money for past years as well as the current year.101. The Council’s software has built in allocation rules to ensure, so far as is practical in an automated system, that the law with respect to specified payments is met. Case law from 1814 (Peters v Anderson (1814) 5 Taunt 596) still relevant, held that "A person who is indebted to another on two several accounts, may, on paying him money, ascribe it to which account he pleases...and his election may either be expressed....or may be inferred from the circumstances of the transaction.”102. In respect of payment allocation for different year’s accounts, processing systems rely on transactions matching exactly the instalment amount set for the relevant year in the software’s parameters. Inevitably payments for various reasons will not always be made in the exact manner that the system requires to function correctly, so the system can not be claimed to provide a fail safe solution to ensuring the law is complied with.103. If a payment is made which doesn't exactly match an instalment amount, where a taxpayer has more than one account with an outstanding balance, then the system automatically allocates payment to the oldest debt. If payment was intended for the current year’s liability then potentially that account will go unpaid and may lead to instalment withdrawal, demand for the whole balance immediately and ultimately being charged court costs.104. During the period in which the defendant court has unreasonably protracted proceedings, the Appellant’s liability has included an additional sum ‘subject to court proceedings’ which appears on the bill as a separate balance from the current liability. Complexities have caused the Council’s system to misallocate payments to the additional sum on three occasions because parameters have triggered payment to reduce the previous year’s liability. In respect of the first misallocation, recovery was halted before a summons was served because the Local Government Ombudsman intervened. For the subsequent mistakes, recovery did proceed further and resulted in a summons being served on both occasions.105. Checks would have verified that payment was made in full and that the balance against which payment was allocated incorrectly, related to court costs that were in any event suspended until the outcome of the proceedings. The absence of manual checks is an obvious concern as is the unreliable way payment allocation relies on exact sums matching set parameters; however, these are secondary to the matters in the present case. It is not the issue that there are no manual checks, rather, there can be no justifiable expenditure attributable to debt recovery officers monitoring accounts in respect of checks that are not carried out.d) Administration cost of enforcing the order after it is obtained106. The judgment in Nicolson v Tottenham Magistrates goes a step further than clarifying the position regarding recharging expenditure for obtaining the liability order in respect of the costs which are applied in connection with serving the summons (the second question of law on which opinion is sought). Paragraph 35 of the judgment states as follows (emphasis added):

“It is clear that there must be a sufficient link between the costs in question and the process of obtaining the liability order. It would obviously be impermissible (for example) to include in the costs claimed any element referable to the costs of executing the order after it was obtained, or to the overall administration of council tax in the area concerned.”

107. At around £0.3m, the ‘Debt Recovery’ budget which adds £31 to each summons has been shown to be disproportionate for processes that are largely automated. The most feasible explanation would be that expenditure in respect of work done after securing the order is included. Administrative work at this stage does not seem to lend itself to automation and is much more likely to be performed manually considering the type of activities which are undertaken. This would give credence to Chiltern Council’s claim (see above para 69) that the work to secure payment once having obtained the liability order is one of the stages from which most costs arise.108. To put the additional recovery expenditure incurred into context, staff engage in activities ranging from notifying the debtor of possible further action to applying to the court for commitment to prison. Information must be obtained about the debtor’s circumstances in order to assess whether accounts are more suitable for attachments of earnings, deduction from benefits or referral to bailiffs. Where those measures fail to obtain payment then staff might engage in further recovery work, for example applying to the court for charging orders or instigating bankruptcy. Similarly to pre court action arrangements, terms of mutually acceptable payment plans might simply be agreed, albeit still requiring resources to correspond with debtors, re-schedule instalments and then monitor accounts until settled. For all stages, staff must be available for dealing with queries whether by telephone or written correspondence.109. It is therefore believed, that on the balance of probabilities (regardless of the Regulations), these costs are recharged to the debtor in a bid to minimise the financial burden on the taxpayer in general, which would appear to be the ends for which disregarding the law is justified.

CONCLUSION110. The Magistrates had no information before them with which to reach a proper judicial determination of whether the costs claimed represented costs reasonably incurred by the Council to obtain the liability order. The ruling in Nicolson v Tottenham Magistrates is unambiguous that the decision to grant an order for costs in those circumstances is unlawful. It is therefore inconceivable what line of defence could be mounted against an appeal asserting that the order for costs had been unlawful in the present case. 111. It follows with the Council’s inability to provide relevant information to support the costs claimed to obtain a liability order, it would be unable to verify that the costs claimed were properly referable to the enforcement process. That is to say it would be unable to verify that the sum, which it claims identically to obtain the order, represents exclusively the expenditure incurred by the Council in connection with instituting the complaint.112. It is nevertheless contested that enforcement should have never proceeded to the stage where the Council applied for a liability order as to do so once an amount has been paid or tendered would be in breach of the law which states that “the authority shall accept the amount and the application shall not be proceeded with”. However, the fact that the Council did proceed does not render the appeal invalid as the Magistrates’ actions and the Council’s approach to supporting its costs raises matters of general public importance.Case for impermissible costs113. It is established that the Council sets its standard costs at a level to ensure that no cost of recovery is borne by the taxpayer in priority to complying with the Regulations that restrict the amount that can be recharged in costs to the court application. It is therefore contended that an element of the standard £70 costs can not be compliant with the Regulations, based as they are on the premise that any expenditure considered attributable to recovery and enforcement activity (however tenuously linked) is recoverable by recharging it to the defendants through costs claimed in an application for a Liability Order.114. The breakdown of costs which the Council has undertaken to keep under review provides evidence that in the circumstances relating to this case the vast majority of expenditure it claimed was not incurred so contended that the Magistrates granted costs in a sum outside that which the law provides. Moreover it is contended that under any circumstances where the Council makes use of the court (whether to obtain an order, or merely institute the process) the costs detailed in its breakdown are not properly referable to regulation 34 of the Regulations.115. There is nothing in the calculation that could remotely satisfy the court that the expenditure attributed to its standard costs was referable to the court application at the prescribed time, neither in the Appellant’s individual case nor as an average of those against whom complaint was made. The spreadsheet is however indicative of a breakdown of the Council’s expenditure for council tax enforcement and recovery which would incorporate impermissible costs. The application, for which the Council may claim costs, simply involves a process to obtain the court’s permission to enforce payment and nothing more. There is no vehicle through which a billing authority may lawfully recharge expenditure it incurs to the defendant beyond that process.116. The law further restricts costs with the provision for incrementally applying them, first in a sum for making complaint and the further amount (if required) on making the application. Singly applying standard costs in respect of making complaint would be lawful only if the authority were to forfeit the element of expenditure it incurs subsequently in respect of the court application.117. The amount claimed by way of costs in any individual case must be no more than that reasonably incurred by the billing authority. Therefore, if the Council wanted to take advantage of streamlining the administration process by applying a standard sum in all cases, in order for it to be done lawfully, it would need to forfeit each element of expenditure it incurs that is not common to every application (the majority accounted for in its breakdown).118. Put another way, a standard sum could not exceed that incurred by the Council in a case where the least expenditure is attributed, which would in practice relate to a taxpayer settling his outstanding debt on receipt of a summons without contacting the Council on any issue. Deriving a figure therefore from the ‘Gross Recoverable costs’ which is split between an estimated number of summons, is not referable to the Regulation; less so if the number of summons is reduced to factor in an estimate for those withdrawn, waived and those in respect of unrecoverable costs. 119. The least cost case is the only basis on which to determine a standard sum if the aim is to eliminate the administrative burden of calculating the costs in each case, whilst at the same time complying with the Regulations which require that the costs be no more than that incurred by the authority in any individual case.

120. If the costs were applied in accordance with the Regulations, the consequences would be that the majority of ‘Council Tax’ (£260,912), ‘Debt Recovery’ (£327,806) and the ‘Control & Monitoring’ costs (£143,215) would not be permissible in respect of re-charging expenditure for instituting the complaint. The Council has itself provided the relevant evidence to satisfy the court that the Council's claim is not reasonable in the Regulation’s context and should therefore seek to award lower costs accordingly.

Outlawlgo,

The question that I asked of you could not have been simpler. It was this:

Finally, I have finished reading all of the posts and articles and FOI requests.

I have a query (and it's one that I notice that nobody has ever asked you before).

Your entire dispute centres solely upon your own decision in 2012 that the summons cost of £70 was too much. You considered that £10 was all that North East Lincs Council should legally charge you.

Accordingly, you paid £10 and deliberately left a balance remaining of £60. Would you mind explaining how you came to the decision that £10 was justifiable?


Your very lengthly response (above) consists of over 60 paragraphs and yet, with almost NO EXCEPTION, all of the above paragraphs relate to documentation/FOI requests etc that postdate your decision that a summons costs of just £10 was all that North East Lincs Council should legally charge you.

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

...The police have also finally provided the outcome to its sham appeal process and predictably upheld its original decision not to investigate the crime on the basis that fraud/perjury is a civil matter.

Appeal Outcome - 8 June 2016

HUMBERSIDE POLICE
APPEAL BODY
Police Headquarters
Priory Road
Hull HU5 5SF

This matter is being dealt with by:
Judi Heaton
Humberside Police Appeal Body

8 June 2016

Dear Mr [outlawlgo]

This letter is about your appeal against Humberside Police which was received on 25 January 2016.

Before outlining my decision I should explain that my role is not to re-investigate your complaint but to review the Local Resolution outcome into your complaint.

As part of the review I have looked carefully at:

Complaint File CO/461/15 and associated appeal papers.

After considering all the information available I have now made a decision about your appeal. I have not upheld your appeal and the reasons for this decision are set out in the attached report attached report.

I appreciate this decision will be disappointing for you, however I assure you that the appeal has been dealt with objectively and independently.

You are not able to appeal against the assessment of your appeal. Humberside Police Appeal Body decisions are final. This means that any decision made and communicated to those involved can usually be overturned only by the courts through judicial review process.

If you intend to pursue this course of action you should seek legal advice.

Yours sincerely

Judi Heaton
Humberside Police Appeals body

Encl ...............report continues

Report submitted to Humberside Police on 8 November 2015:

North East Lincolnshire Council produced a false witness statement (thereby committing perjury) with regards a council tax liability hearing at Grimsby Magistrates' Court. The District Judge (Daniel Curtis) was aware that the evidence surrounded a false and corrupt statement, but nevertheless granted the council a liability order to enforce a fraudulent sum which presently stands at £120.00. This sum is likely to increase if the council appoints its criminal firm of bailiffs, Rossendales. My allegations are that the council has committed perjury with the intent to fraudulently obtain money from me by the use of Grimsby Magistrates court and that Judge Daniel Curtis has perverted the course of justice by being complicit to that crime.

[outlawlgo]

Re: Misallocating payments and ignoring email to exploit Magistrates court costs

Another threatening letter from Rossendales. I assume by this that the investigation into the fraud allegations by the council's internal audit committee is destined to be a sham. The police have also finally provided the outcome to its sham appeal process and predictably upheld its original decision not to investigate the crime on the basis that fraud/perjury is a civil matter.

Rossendales

PO Box 324
Rossendale
BB4 0GE

enquiries@rossendales.com

Client: North East Lincolnshire Council - Council Tax
Outstanding Amount: £286.00
Reference Number: 550xxxxx
Our Reference: 28628956
Date: 6th June 2016

REMINDER Notice of Enforcement - Please Do Not Ignore

Dear Mr [outlawlgo]

We wrote to you recently advising of the intention to make a visit to your property for the purpose of taking control of your goods for the unpaid amount below, relating to Council Tax and costs outstanding to North East Lincolnshire Council for a court order issued against you on the 30/10/2015.

	North East Lincolnshire Council amount		£211.00
	Enforcement Costs incurred		£75.00
	Paid		£0.00
	Total Amount Due:		£286.00

To avoid this action you were required to make contact or make arrangements to pay this account, to date suitable arrangements have not been made and your account still remains outstanding. If you do not deal with this matter now, an enforcement agent will visit your property for the purpose of taking control of goods.

The total amount due shown above needs to be paid in full direct to Rossendales Ltd., NOT THE COUNCIL immediately otherwise further action will be taken to recover the amount due. Additional costs of a minimum of £235.00 will be applicable if we are required to take further action to secure payment, which may include goods being removed and sold. Details of these costs are detailed on the back of this notice

Request for Payment Arrangement

If you need extra time to pay, please complete the income and expenditure form sent with this letter and return the information to us immediately. Please note that your offer of payment may not be accepted and we may require you to pay a higher amount than you have offered. We will write to you and let you know if your payment offer has been agreed, or whether it will have to be increased.

For and on behalf of

Rossendales Limited