Council tax payment allocation in accordance with R. v Miskin Lower Justices [1953]

The request was partially successful.

Dear Thanet District Council,

The Council makes the statement quoted below from the link:
https://www.whatdotheyknow.com/request/a...

"There is no such policy which dictates where payments are allocated but the custom and practice is to allocate to the oldest debt where no details are specified."

The council's statement above does not agree with the judgment in the case of R. v Miskin Lower Justices (see below link to the judgment):

http://s000.tinyupload.com/index.php?fil...

The judgment clarifies the position in cases where a creditor has to make a decision as to which account payment should be allocated when a debtor has one account more burdensome for him than another and his payment is unspecified

Clearly the council's statement, if it were to agree with the judgment, would be.....

[[ Where the debtor does not make any reference as to where the payment should be allocated then the creditor must allocate the payment to the account which it is most beneficial to the debtor to reduce. ]]

Q. Where did the council obtain the information regarding the appropriation of payments case law which conflicts with the judgment in R. v Miskin Lower Justices [1953]?

Yours faithfully,

S Staffordson

TDC FOI, Thanet District Council

We acknowledge the receipt of your email.

If you have made a request for information, it will normally be dealt
with in the period stipulated by either the Freedom of Information Act
2000 or the Data Protection Act 2018.

Other requests or queries will be dealt with as quickly as possible.

Thank you.

Information Governance Officer

Dear Thanet District Council,

Response to this request is delayed. By law, Thanet District Council should normally have responded promptly and by 11 October 2019.

Yours faithfully,

S Staffordson

TDC FOI, Thanet District Council

We acknowledge the receipt of your email.

If you have made a request for information, it will normally be dealt
with in the period stipulated by either the Freedom of Information Act
2000 or the Data Protection Act 2018.

Other requests or queries will be dealt with as quickly as possible.

Thank you.

Information Governance Officer

Dear Thanet District Council,

Response to this request is long overdue. By law, under all circumstances, Thanet District Council should have responded by now

Yours faithfully,

S Staffordson

TDC FOI, Thanet District Council

Dear S Staffordson,
Could you send us the request so that we can locate it and respond to you
immediately?
Best Wishes,
Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577620

show quoted sections

Dear TDC FOI,

The Council makes the statement quoted below from the link:
https://www.whatdotheyknow.com/request/a...

"There is no such policy which dictates where payments are allocated but the custom and practice is to allocate to the oldest debt where no details are specified."

The council's statement above does not agree with the judgment in the case of R. v Miskin Lower Justices (see below link to the judgment):

https://tinyurl.com/vk2pwhn

The judgment clarifies the position in cases where a creditor has to make a decision as to which account payment should be allocated when a debtor has one account more burdensome for him than another and his payment is unspecified

Clearly the council's statement, if it were to agree with the judgment, would be.....

[[ Where the debtor does not make any reference as to where the payment should be allocated then the creditor must allocate the payment to the account which it is most beneficial to the debtor to reduce. ]]

Q. Where did the council obtain the information regarding the appropriation of payments case law which conflicts with the judgment in R. v Miskin Lower Justices [1953]?

Yours sincerely,

S Staffordson

TDC FOI, Thanet District Council

Receipt for FOI: 3338

Dear S.Staffordson,

Thank you for your Freedom Of Information  (FOI) dated (19/11/2019). 

I can confirm that we have received your request and are now processing
it. Our reference number for your request is FOI 3338. We will look to
make a full disclosure of the information requested by (22/11/2019) at the
latest. We will let you know if there are any issues processing your
request and if there will be any delays regarding collating the
information you have requested..

Best Wishes,
Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577620

show quoted sections

TDC FOI, Thanet District Council

Dear S. Staffordson,
One of my colleagues from the legal team, reviewed this and has asked for
clarification?
Could you specify your FOI question so that we can respond to you?
Best Wishes,
 
Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577620

show quoted sections

TDC FOI, Thanet District Council

Dear Mr Staffordson,

Thank you for your Freedom of Information request dated the 15th September
2019. 

The response to your request is set out below:

Q. Where did the council obtain the information regarding the
appropriation of payments case law which conflicts with the judgment in R.
v Miskin Lower Justices [1953]?

The council has referred the question to the subject matter experts in the
council’s Council Tax team, who have considered the question as follows;

PAYMENTS–APPROPRIATION

Where several accounts are payable to the local authority by one debtor,
the debtor may, when making a payment which is insufficient to discharge
all the debts, appropriate the money paid to a particular debt or debts
and if the payment is accepted as so appropriated it must be applied in
the manner directed by the debtor.

It may be, as frequently happens, that payments are received without any
indication of appropriations by the debtor and in these cases the creditor
may apply the payments as he best thinks fit (Peter v Anderson (1814) 5
TAUNT 596). The allocation will eventually have to be communicated to the
debtor but this is frequently done at the time of payment in the form of
the receipt.

The debtor has first choice but his right to appropriate must take the
form of a communication of his intention. This communication may be
express or implied but should be clear enough for the creditor to know
that his own right of appropriation cannot arise (Stepney Corporation v
Osofsky (1937) 3 All ER 289). It follows that it is not essential for
there to be a specific expression by the debtor as to which account is to
be credited. The intention may be gathered from other circumstances or
implied by the debtor's conduct. The amount paid may so obviously relate
to a specific liability that it would be an unwarranted assumption to
allocate it elsewhere (R v Miskin Lower Justices (1953) 1 QB 533).

Once an election is made by the creditor and communicated to the debtor,
it is irrevocable (Albermarle Supply Co Ltd v Hind and Co (1928) KB 307)."

Peter v Anderson (1814) held that where there is no indication from
the debtor, the creditor may apply payments as they think fit.

 Stepney Corporation v Osofsky (1937) held that the debtor has first
choice over allocation of payments; that the choice may be express or
implied, and that the creditor cannot exercise discretion unless there is
no indication by the debtor.

 Albermarle Supply Co Ltd v Hind & Co (1928) held that, once an election
as to where a payment should be allocated was made by a creditor,
and communicated to the debtor, that allocation of payment was
irrecoverable by the debtor

In summary the principles established by the Courts are:

 - if the amount of the payment identifies the debt, a specific
instalment etc., then it must be allocated accordingly

 - where the debtor states or implies that the payment should be
allocated to a specific debt, then the creditor must abide by that
statement

- where the debtor does not make any reference as to where the
payment should be allocated then it is up to the creditor to make the
choice.

 Payments received that do not identify the debt and where the debtor
does not make reference as to where the payment should be allocated are
put towards the oldest debt.

In the case of R v Miskin Lower  Justices (1953), I have reviewed this
case and it simply bears out the reasoning that, if a payment so obviously
relates to a specific debt, then it would be an unwarranted assumption (on
the part of the creditor) to allocate that payment elsewhere. The Miskin
case does not say that allocating a totally ‘random’ payment to the oldest
debt is an illegal practice.

 

What can our computer system do?

The cash allocation rules within the council’s computer system has 4
options;

·         Current: this will allocate payments to the current debt costs

·         Current – charge: this will allocate payments to the current
charge

·         Oldest: this will allocate payments to the oldest costs

·         Oldest – charge: this will allocate payments to the oldest
charge

 

 

The system is currently set to ‘Oldest’ .We believe this is firmly in the
majority of customers best interests.

The system setting is one that must apply to all cases, it cannot be
selected for each individual case.

Where a customer wants us to amend where the payment is allocated to we
will do so.

 

 

.

Further caselaw considered

·         Thomas v Ken Thomas Ltd

·         Khandanpour v Chambers

Both the above cases are around appropriation of funds, and confirm that
if a debtor expresses a wish to allocate a payment to a specific debt, the
creditor should adhere to the debtor’s wishes.  Also that a debtor’s
intention to appropriate funds to a certain debt can be inferred from
circumstances known to both parties.

Additionally:

Leeson v Leeson 1936 K.B156 (NELC13) confirms that an appropriation of a
payment cannot be inferred from an intention in the mind of the debtor
uncommunicated to the creditor. It can only be inferred from
circumstances known to both parties.

 

Conclusion

Taking into account all the caselaw listed above, and our current
procedures, we are satisfied that our existing operational practice
complies with the relevant law.

If you are unhappy with the way your enquiry has been dealt with, you may
ask for an internal review by submitting a request within one month of the
date of this response. Further information on the internal review process
can be found here:
[1]https://www.thanet.gov.uk/your-services/...

Your request should be addressed to the Information Governance Manager,
Thanet District Council, PO Box 9, Cecil Street, Margate, CT9 1XZ or by
emailing [2][email address].   

If you are still dissatisfied after an internal review, you may appeal to
the Information Commissioner, Wycliffe House, Water Lane, Wilmslow SK9
5AF.

Kind regards

Information Governance Officer

Thanet District Council

Margate

CT9 1XZ

01843 577620

-----------------------------------------------
Originating request

15 Sep
S Staffordson <[3][FOI #603715 email]> 2019,
09:00
to FOI

Dear Thanet District Council,

The Council makes the statement quoted below from the link:
[4]https://www.whatdotheyknow.com/request/a...

"There is no such policy which dictates where payments are allocated but
the custom and practice is to allocate to the oldest debt where no details
are specified."

The council's statement above does not agree with the judgment in the case
of R. v Miskin Lower Justices (see below link to the judgment):

[5]http://s000.tinyupload.com/index.php?fil...

The judgment clarifies the position in cases where a creditor has to make
a decision as to which account payment should be allocated when a debtor
has one account more burdensome for him than another and his payment is
unspecified

Clearly the council's statement, if it were to agree with the judgment,
would be..... 

[[ Where the debtor does not make any reference as to where the payment
should be allocated then the creditor must allocate the payment to the
account which it is most beneficial to the debtor to reduce. ]] 

Q. Where did the council obtain the information regarding the
appropriation of payments case law which conflicts with the judgment in R.
v Miskin Lower Justices [1953]?

Yours faithfully,

S Staffordson

References

Visible links
1. https://www.thanet.gov.uk/your-services/...
2. mailto:[email address]
3. mailto:[FOI #603715 email]
4. https://www.whatdotheyknow.com/request/a...
5. http://s000.tinyupload.com/index.php?fil...

Dear TDC FOI,

My request asked where the information had been obtained regarding the appropriation of payments case law. You have provided information which matches with an exhibit page from a book presumably entitled "Local Authority Revenues" https://www.whatdotheyknow.com/request/4... and the Institute of Revenues Rating and Valuation (IRRV) 10 October 2002 Insight magazine https://tinyurl.com/y3hoyx9v

My assumption is that the council had obtained the information from the above two sources?

Notwithstanding the above, I don't agree that the oldest debt would be considered 'in the majority of customers best interests' (it would have to entirely wipe out the debt for this to be remotely the case). This would almost certainly result in the Council's automated recovery procedure being triggered to the detriment of the taxpayer by way of unnecessary additional costs relating to the enforcement of the in-year account which would have fallen in arrears not as a result of the taxpayer failing to maintain his account but as a consequence of the billing authority misappropriating payment.

The customer would then face being burdened (financial and otherwise) in respect of two year's accounts because the council is most likely to have already obtained a liability order adding costs in respect of the older debt (the council cannot repeat this procedure adding more costs again for the same year's liability).

Additionally the following is stated which misses the point:

"The Miskin case does not say that allocating a totally ‘random’ payment to the oldest debt is an illegal practice."

I understand that the authority in the Miskin case generally clarifies that where an amount obviously relates to a specific liability, it would be an unwarranted assumption to allocate the payment elsewhere thus payment must be carried to that account (in that case to avoid prison) which is most beneficial to the debtor to reduce.

The case concerned maintenance payments in R v Miskin, so the Judgment's reference to the allocation of monies to the amount first accruing specifically referred to legislation governing the collection of arrears under a maintenance order. For context see the following commons web-page (Maintenance Orders Bill)

https://api.parliament.uk/historic-hansa...

In the Judgment, Pearson J inferred an appropriation from the particular circumstances, including that the debtor “would be likely to wish these payments to be utilized in discharge of the original debt so that he would secure his release from the committal order”. The inference that the debtor would likely have wished his payments to be utilized in discharge of the original debt was evidently because it was the debt which it was most beneficial to him to reduce. It was merely his circumstances that meant discharging the earliest debt was most beneficial to him. Thus in another case (perhaps not concerning Maintenance Orders) if those circumstances meant that discharging the later debt was most beneficial, then by the same reasoning a judge would have inferred an appropriation on the basis that the debtor would have likely wished his payments to have discharged the more recent debt.

Yours sincerely,

S Staffordson

TDC FOI, Thanet District Council

Dear Ms. Staffordson,

Ref: FOI 3338

I am writing in respect of your information access enquiry dated (
19/11/2019  ) . This request has been handled under the Freedom of
Information Act 2000.

Please find below/attached information in response to your request.

In regards to your FOI 3338, we do not have the information you have
requested.

Should you require any further information, or if you are not satisfied
with our response, please do not hesitate to contact me. You may also
request an internal review submitting a request within one month of the
date of this response. Further information on the internal review process
can be found here:
[1]https://www.thanet.gov.uk/your-services/...
Your request should be addressed to the Information Governance Manager,
Thanet District Council, PO Box 9, Cecil Street, Margate, CT9 1XZ or by
emailing [2][email address]

Alternatively you can use our Customer Comment Form which can be accessed
at our website [3]https://www.thanet.gov.uk.

In addition, if you are not satisfied with our response you may apply to
the Information Commissioner for an independent review at the following
address:

The Information Commissioner, Wyncliffe House, Water Lane, Wilmslow,
Cheshire SK9 5AF

Telephone 0303 123 1113 (local rate) or 01625 545 745 (national rate)

[4]www.ico.org.uk<[5]http://www.ico.org.uk/

There is no charge for making an appeal.

Best Wishes,
Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577247
The Council makes the statement quoted below from the link:
[6]https://www.whatdotheyknow.com/request/a...

"There is no such policy which dictates where payments are allocated but
the custom and practice is to allocate to the oldest debt where no details
are specified."

The council's statement above does not agree with the judgment in the case
of R. v Miskin Lower Justices (see below link to the judgment):

[7]https://tinyurl.com/vk2pwhn

The judgment clarifies the position in cases where a creditor has to make
a decision as to which account payment should be allocated when a debtor
has one account more burdensome for him than another and his payment is
unspecified

Clearly the council's statement, if it were to agree with the judgment,
would be.....

[[ Where the debtor does not make any reference as to where the payment
should be allocated then the creditor must allocate the payment to the
account which it is most beneficial to the debtor to reduce. ]]

Q. Where did the council obtain the information regarding the
appropriation of payments case law which conflicts with the judgment in R.
v Miskin Lower Justices [1953]?

Yours sincerely,

S Staffordson  

References

Visible links
1. https://www.thanet.gov.uk/your-services/...
2. mailto:[email address]
3. https://www.thanet.gov.uk/your-services/...
4. http://www.ico.org.uk/
5. http://www.ico.org.uk/
6. https://www.whatdotheyknow.com/request/a...
7. https://tinyurl.com/vk2pwhn

Dear TDC FOI,

The overwhelming evidence is that Thanet District Council does hold the information and to conceal it with the intention of preventing disclosure amounts to an offence under Section 77 of the Freedom of Information Act 2000.

Yours sincerely,

S Staffordson

Dear TDC FOI,

I have a query regarding the following:

"Additionally:
Leeson v Leeson 1936 K.B156 (NELC13) confirms that an appropriation of a payment cannot be inferred from an intention in the mind of the debtor uncommunicated to the creditor. It can only be inferred from circumstances known to both parties."

Where have you obtained the information regarding "Leeson v Leeson 1936 K.B156 (NELC13)" ?

Yours sincerely,

S Staffordson

TDC FOI, Thanet District Council

Receipt for FOI 3420

Dear Ms. Staffordson,

Thank you for your Freedom Of Information  (FOI) dated (19/12/2019). 

I can confirm that we have received your request and are now processing
it. Our reference number for your request is FOI 3420. We will look to
make a full disclosure of the information requested by (23/01/2020) at the
latest. We will let you know if there are any issues processing your
request and if there will be any delays regarding collating the
information you have requested..

Kind regards

Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577247

show quoted sections

TDC FOI, Thanet District Council

Dear Ms Staffordson,

Thank you for your Freedom of Information 3420 request dated 19/12/2019. 

The response to your request is set out below.

We do not hold this information.

If you are unhappy with the way your enquiry has been dealt with, you may
ask for an internal review by submitting a request within one month of the
date of this response. Further information on the internal review process
is can be found here:
[1]https://www.thanet.gov.uk/your-services/...

Your request should be addressed to the Information Governance Manager,
Thanet District Council, PO Box 9, Cecil Street, Margate, CT9 1XZ or by
emailing [2][email address].   

If you are still dissatisfied after an internal review, you may appeal to
the Information Commissioner, Wycliffe House, Water Lane, Wilmslow SK9
5AF.

Kind regards

Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577247
On Thu, 19 Dec 2019 at 09:17, TDC FOI <[3][email address]> wrote:

Receipt for FOI 3420

Dear Ms. Staffordson,

Thank you for your Freedom Of Information  (FOI) dated (19/12/2019). 

I can confirm that we have received your request and are now processing
it. Our reference number for your request is FOI 3420. We will look to
make a full disclosure of the information requested by (23/01/2020) at
the latest. We will let you know if there are any issues processing your
request and if there will be any delays regarding collating the
information you have requested..

Kind regards

Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577247

show quoted sections

Dear Thanet District Council,

Re: FOI request 3420

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Thanet District Council's handling of my FOI request 'Council tax payment allocation in accordance with R. v Miskin Lower Justices [1953]'.

Thanet District Council has cited "Leeson v Leeson 1936 K.B156 (NELC13)" and relied on this case as authority 'that an appropriation of a payment cannot be inferred from an intention in the mind of the debtor uncommunicated to the creditor. It can only be inferred from circumstances known to both parties.'

The council has responded to the request by stating it has no record of where it obtained the information. The overwhelming evidence is that Thanet District Council does hold the information and to conceal it with the intention of preventing disclosure amounts to an offence under Section 77 of the Freedom of Information Act 2000.

I have researched the cited authority and it is evident that the reference (NELC13) does not form part of the case. NELC is in fact North East Lincolnshire Council and 13 denotes Exhibit 13. Paragraph 40 in the representations below pretty much confirms this:

https://tinyurl.com/y5aeomuc (Perjury to Commit Fraud - 2 Dec 15)

" 40. Exhibit ‘NELC13’ which is referred to in para 72 of NELC’s Witness Statement relies on the case; ‘Leeson v. Leeson (1936) 2 K.B. 156’. The context of that case is not clear from what is detailed in its statement which is limited to the following: ‘an appropriation of a payment cannot be inferred from an intention in the mind of the debtor un-communicated to the creditor. It can only be inferred from circumstances known to both parties’. "

Unless NELC13 miraculously refers to something else, then Thanet District Council will have obtained the information from the above document or one of those referred to therein.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/c...

Yours faithfully,

S Staffordson

Dear TDC FOI,

Can you please let me know how this review is progressing.

Yours sincerely,

S Staffordson

TDC FOI Support, Thanet District Council

Internal Review FOI 3420

Dear Ms. Staffordson,

 

re: Email confirming the outcome of internal review - Freedom of
Information request No. 3420 .

 

We refer to your original FOI request email dated the 19th December 2019
where you requested the following information:

Dear TDC FOI,

I have a query regarding the following:

"Additionally: 
Leeson v Leeson 1936 K.B156 (NELC13) confirms that an appropriation of a
payment cannot be inferred from an intention in the mind of the debtor
uncommunicated to the creditor. It can only be inferred from circumstances
known to both parties."

Where have you obtained the information regarding "Leeson v Leeson 1936
K.B156 (NELC13)" ?

Yours sincerely,

S Staffordson

Our response was sent by email to you on the 24/12/2020 and this was the
response:

We do not hold the information that you are requesting

 

You then sent a further request for an internal review of our response and
here is your request:

Dear Thanet District Council,

Re:  FOI request 3420

Please pass this on to the person who conducts Freedom of Information
reviews.

I am writing to request an internal review of Thanet District Council's
handling of my FOI request 'Council tax payment allocation in accordance
with R. v Miskin Lower Justices [1953]'.

Thanet District Council has cited "Leeson v Leeson 1936 K.B156 (NELC13)"
and relied on this case as authority 'that an appropriation of a payment
cannot be inferred from an intention in the mind of the debtor
uncommunicated to the creditor. It can only be inferred from circumstances
known to both parties.'

The council has responded to the request by stating it has no record of
where it obtained the information. The overwhelming evidence is that
Thanet District Council does hold the information and to conceal it with
the intention of preventing disclosure amounts to an offence under Section
77 of the Freedom of Information Act 2000.

I have researched the cited authority and it is evident that the reference
(NELC13) does not form part of the case. NELC is in fact North East
Lincolnshire Council and 13 denotes Exhibit 13. Paragraph 40 in the
representations below pretty much confirms this: 

[1]https://tinyurl.com/y5aeomuc (Perjury to Commit Fraud - 2 Dec 15)

" 40. Exhibit ‘NELC13’ which is referred to in para 72 of NELC’s Witness
Statement relies on the case; ‘Leeson v. Leeson (1936) 2 K.B. 156’. The
context of that case is not clear from what is detailed in its statement
which is limited to the following: ‘an appropriation of a payment cannot
be inferred from an intention in the mind of the debtor un-communicated to
the creditor. It can only be inferred from circumstances known to both
parties’. "

Unless NELC13 miraculously refers to something else, then Thanet District
Council will have obtained the information from the above document or one
of those referred to therein. 

A full history of my FOI request and all correspondence is available on
the Internet at this
address: [2]https://www.whatdotheyknow.com/request/c...

Yours faithfully,

S Staffordson

We have now conducted an internal review and the decision has been upheld 
for the following reasons:

The point is that the request is hypothetical. TDC does not hold the
information she is seeking, moreover, as the information which appears to
be being pursued related to the interpretation of published case law, the
FOI exemption under section 21 applies i.e this is an absolute exemption
which means that there is no requirement to carry out the public interest
test if the requested info is exempt and the requester can obtain the
information she seeks from other sources. Specifically, a law library or
online resources.

 

If you are not content with the outcome of the internal review, you have
the right to apply directly to the Information Commissioner for a
decision.

 

The Information Commissioner can be contacted at: Information
Commissioner, Wycliffe House, Water Lane, Wilmslow SK9 5AF.

 

Yours sincerely,

Information Governance Officer

Thanet District Council

Margate

CT9 1XZ

01843 577247

Information Governance Officer
Thanet District Council
Margate
CT9 1XZ
01843 577247

References

Visible links
1. https://tinyurl.com/y5aeomuc
2. https://www.whatdotheyknow.com/request/c...

Dear TDC FOI Support,

Clearly Thanet District Council has obtained the information from the document below or one
of those referred to therein. The council's recovery department is relying on inappropriate information found on the internet to support legal decisions instead of consulting the Monitoring Officer.

https://tinyurl.com/y5aeomuc (Perjury to Commit Fraud - 2 Dec 15)

Yours sincerely,

S Staffordson

Dear TDC FOI Support,

In anticipation of you not responding, I have decided against pursuing this. However, when a decision is made with potentially legal implications the council is required to consult the Monitoring Officer and such procedures should be formally recorded. A decision that requires setting the parameters of a council tax payment processing system to automatically allocate non-specific payments to the oldest account rather than to the in-year account is one such decision.

If the proper legal process was followed when the decision was made then there will be a record of it comprising a background outlining the relevant legal requirements and risk assessment highlighting the degree to which the council would be exposed to legal challenge if not complied with. The following is an example of the kind of assessment that should have been documented.

https://democracy.npt.gov.uk/documents/s...

So my thoughts are that this issue should be put before the council's Monitoring Officer as it is his duty to ensure all decision making is lawful and the legal process described above should have been followed in arriving at the decision.

I understand that the software supplied to local authorities for the purpose of payment allocation has a parameter which can typically be set so that when a payment fails to match one of the rules it will, option 1, be applied to the in-year account, or option 2 , be applied to the oldest years account. Therefore, it is within the council's control to maximise the frequency with which non-specific payments would be correctly applied i.e. to maintain the in-year account as a priority.

Regarding the Miskin case law, despite being decided in 1953, it is obviously relevant to Council Tax or there would unlikely be guidance tailored specifically for the benefit of Local Authorities. For example, Ipswich Council demonstrates its awareness of the case and other case law relevant to Council Tax liability in the following page exhibited presumably from a book entitled "Local Authority Revenues" https://www.whatdotheyknow.com/request/4...

The relevant passage summarises a billing authority's obligations regarding the allocation of payments where a customer has several accounts payable to the council in the context of R v Miskin Lower Justices and associated case law. The Institute of the Revenues Rating and Valuation (IRRV) has published similar in its 10 October 2002 Insight magazine https://tinyurl.com/y3hoyx9v

In respect of the council's statement; "payments received that do not identify the debt...", there was no precedent set in the Miskin case based on payments matching the instalment amount of a particular year.

https://tinyurl.com/vk2pwhn (R v Miskin)

It is clear from the first paragraph of the judgment that the debtor (husband) did not once in any of the payments he made, make a payment matching an amount that he was required to under the terms of the maintenance/committal orders. The judge held that an appropriation was inferred from the circumstances to be the debt which it was most beneficial for the debtor to reduce (see quoted from the judgment).

"...the question whether the payments made by the husband should be appropriated to the original debt depended on the particular facts of the case. The husband would be likely to wish the payments to be utilized in discharge of the original debt..." (so that he would secure his release from the committal order).

As for the Council defending the practice of applying non-specified payment to the oldest year where a debt remains outstanding, the overwhelming evidence is that this does not accord with established case law.

Possibly the council has been influenced by the ruling in Devaynes v Noble 1816 merivale 529 (Clayton's Case). Clayton's Case is confined to cases where there is an unbroken account between the parties, or “one blended fund,” as in the case of a current account at a bank or between traders; it does not apply where there is no such account or fund, but merely distinct and separate debts. Snells Principles Of Equity's gives a definition in the document here: https://tinyurl.com/y3uzpd5n

A number of billing authorities wrongly rely on the Clayton Case ruling to justify allocating non-specific payment to the arrears because the effect of the rule is that in the absence of any express appropriation, each payment is impliedly appropriated to the earliest debt that is not statute-barred (payments are presumed to be appropriated to debts in the order in which the debts are incurred). They are of course misinformed because the rule does not apply to Council Tax as it consists of distinct insulated debts, between which a plain line of separation can be drawn (a bill is issued each year relating specifically to that year's liability).

Conveniently in the Clayton Case judgment the rules by which the application of indefinite payments are governed have been discussed. Clearly before any consideration is given as to the order in which the debts have arisen it must be asked, to which of the debts would the allocation be most beneficial to the debtor? (where the purpose for which a payment is made is unspecified it must be carried to that account which it is most beneficial to the debtor to reduce). Only if it was of no more benefit to the debtor which of the accounts payment was applied to could it be said that allocating non-matching payments to any arrears would be in accordance with established case law.

https://en.wikipedia.org/wiki/Devaynes_v... (Clayton's Case)

It is noteworthy that the Sri Lankan case, Ephraims v. Jansz (1895) 3 N.L.R. 142, similarly discussed the rules relating to the appropriation of payments in the context of the onerous nature of debt due on several accounts. The condition in the below quoted from the judgment could not be more relevant to the circumstances that are in issue with Council Tax liability:

https://www.lawnet.gov.lk/wp-content/upl... (Ephraims v. Jansz)

"If no such appropriation is made at the time of payment, the creditor must apply it to some claims which could be enforced at the time of payment and which at the moment is not in controversy."

Council Tax may be enforced (subject to payments being met) so a customer's in-year liability is not in controversy, providing his instalments are paid when due. An unspecified payment then, applying this principle, would have clearly been misappropriated if the council applied it to arrears so causing his in-year liability instalment to have not been met.

But regardless of whether the principle in the Sri Lankan case can be relied on, a customer having one liability more onerous for him than another must have his payment if it were unspecified carried to that account which it is most beneficial for him to reduce in line with other case authority mentioned.

The council's processing system applies payments in respect of the customer's implied intention but on a severely restricted basis (solely on the sum paid corresponding with an instalment amount). A payment matching a specific liability covers only one of several ways that the taxpayer's election may be implied. For example, case authority has consistently found that a debtor's intention may be indicated from the circumstances of the transaction (see Khandanpour v Chambers [2019] EWCA Civ 570 "Appropriation" from para 25). https://www.bailii.org/ew/cases/EWCA/Civ...

A debtor's payment pattern could indicate a debtor's intention to appropriate payment to a particular debt, so if a pattern had emerged of a customer's payment being made and accepted as credited to a particular debt then it would be inferred from the nature of the transaction, even if not expressed at the time by the customer, that he intended to ascribe it to that account. A customer having one liability more onerous for him than another must have his payment if it were unspecified carried to that account which it is most beneficial for him to reduce.

A customer who would be caused the additional burden from recovery action being taken in respect of his in-year liability as a consequence of payment being applied to his arrears, would clearly have intended his payment to be appropriated to his in-year liability to avoid unnecessary additional costs etc. Evidence of an intent to appropriate, although falling short of being express, would be provided in those particular circumstances to be an election to pay specifically on the current year's liability (the inference from the circumstances of a transaction is just as valid an election to pay specifically on one of several accounts as if his election were expressed).

A customer who made payment in an amount sufficient to prevent his in-year liability falling in arrears would have good cause to bring legal proceedings against the council if it were to allocate his payment to a previous year's charge (thus unnecessarily burdening him further) merely because it did not match the instalment amount. In any event, I understand that a billing authority's duty, as a priority, is to maintain a customer's in-year account with payments received in respect of his liability, so logically the frequency with which payment would be correctly applied would be maximised (under automated conditions) if the parameters in the Council Tax processing system were set so that any unspecified payments were applied to the current year's charge.

P.S. Your Monitoring Officer might wish to look at this from the following perspective:

Let's say a Customer has an outstanding balance of £50.00 secured by a Magistrates' court Liability Order from a previous year's charge. This gives councils the power to use various enforcement methods to collect the debt and adds costs to the arrears. The standard costs rubber stamped by the court are in the sum of £110.00 so the total amount owing the council for that year's charge has increased to £160.00. The customer now has his in-year Council Tax obligation to meet as well as the amount secured by a court order from the previous year's charge.

The customer's in-year payments are set at £121.95 for the first instalment and £120.00 for the remaining nine (£1,201.95 in total). The customer makes his first payment of £122.00 but because the council's system applies payments that do not exactly match to the oldest debt, his in-year Council Tax obligations have been detected by the computer system to have not been met even though the payment was made in sufficient an amount to prevent his in-year liability falling in arrears. Although Council Tax liability consists of distinct insulated debts, between which a plain line of separation can be drawn, the benefit to the council is the same (£122.00) whether payment is applied to the in-year account or arrears so there is no legitimate advantage for the council nor justification in engineering a further burden for the customer in respect of his in-year liability. The previous year's debt has already been secured with a court order which has no time limit restricting its use.

It is therefore reasonable to suspect that the council allocates non-matching payments to the arrears thus imposing an additional £110.00 standard costs in respect of the in-year engineered non-payment for a non-legitimate reason. But there is no theoretical advantage to the council in respect of the costs it claims because the law only entitles it to claim the actual expenditure it incurs. It would therefore be self defeating if the council were to go about obtaining court orders merely to benefit from the application if its costs claim was genuine and not inflated. Another possible motive would be to punish the customer, but this is troublesome for the council because it is making use of the Magistrates' court unnecessarily and in so doing burdening the customer with a further £110.00 debt. This by definition is penalising the customer with imposed costs which is impermissible according to established case authority. It was held on judicial review of a licensing case R v Highgate Justices ex parte Petrou [1954] 1 ALL ER 406 that costs should not exceed the proper costs incurred and should not be a penalty.

In the more recent case it was held that the Magistrates were bound to decide the matter of costs in accordance with the Council Tax (Administration and Enforcement) Regulations 1992 (the court needs to be satisfied that it was reasonable for the council to incur them) i.e. they would not reasonably have been incurred if it was not reasonable for the council to take steps to enforce payment (see paras 34 and 51 of R (Nicolson) v Tottenham Magistrates [2015] EWHC 1252) http://www.bailii.org/ew/cases/EWHC/Admi...

In the aforementioned scenario the council would have impermissibly obtained a court order to enforce the misappropriated £122.00 element of the liability TWICE. This is because the payment which was intended to be applied to the in-year liability was misapplied to the arrears.

Each year's liability is a distinct debt so if the council has a secured debt in respect of one year's charge it cannot use the same court order to enforce payment if a customer defaults in a subsequent year (another order must be obtained from the court). However, the court order securing £160.00 debt from a previous year was effectively used to collect the sum of £122.00 which was actually paid in respect of the in-year liability (the amount secured by the previous court order reduced to £38.00). The customer's in-year liability did not only remain unchanged as a result of the misapplied £122.00 payment it actually increased by £110.00 because of the court costs attributable to the council's further application to the Magistrates' court (the in-year liability increased to £1,311.95 which was secured by a fresh court order).

The upshot of all this is that the customer has outstanding liability relating to two separate debts, each independently subject to enforcement by the various oppressive methods enabled by the court order. The customer's overall indebtedness arising from the misappropriated payment has immediately increased by £110.00 because of unnecessary court costs. In engineering the default, the council has clearly been shown to have unlawfully used an order securing a previous year's debt to enforce payment from the in-year liability which was perversely the cause of the Council Tax processing system triggering recovery in respect of the in-year liability (the same £122.00 amount has been subject to enforcement by two separate court orders).

Yours sincerely,

S Staffordson

S Staffordson left an annotation ()

Presumably the anomaly regarding "Leeson v Leeson 1936 K.B156 (NELC13)" has been answered here:

https://www.whatdotheyknow.com/request/c...

We can also answer the following:

Where have you obtained the information regarding "Leeson v Leeson 1936 K.B156 (NELC13)"

Our answer is as follows:

We are able to view the case through such websites as
[1]scribd.com and
[2]legalbeagles.info.