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

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Dear Canterbury City Council,

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

"If a payment does not match exactly either the debt outstanding or an instalment due, the payment is allocated to the oldest debt outstanding."

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

CCC FOI, Canterbury City Council

Thank you for submitting a Freedom of Information request.  Your email has
been forwarded to the Freedom of Information and Data
Protection Coordinator. 
We endeavour to respond to all Freedom of Information requests within 20
working days but if we think the request requires extra time we will
contact you to let you know.
Kind regards
Freedom of Information Team
Canterbury City Council

CCC FOI, Canterbury City Council

Reference:         7917

Title:                 Council tax payment allocation

 

Thank you for your freedom of information request.

 

Please see below for our response. 

If you are unhappy with the way your enquiry has been dealt with, you may
ask for an internal review by e-mailing [1][email address] or by
following the procedure set out on the council’s website. 

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,

 

Emma

 

 

Information Governance Team

Corporate Governance

Canterbury City Council

Tel: 01227 862325

[2]www.canterbury.gov.uk

 

 

 

 

Reference:         7917

Title:                 Council tax payment allocation

Date of reply:    04 October 2019

 

 

Request:

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

"If a payment does not match exactly either the debt outstanding or an
instalment due, the payment is allocated to the oldest debt outstanding".

The council's statement above does not agree with the judgment in the case
of R. v Miskin Lower Justices.

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]

Question:

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]?

 

Our response:

Council Tax accounts have unique account reference numbers and payments
will be allocated to the account reference that the customer quotes when
making payment.

Where a payment does not match exactly either the debt outstanding or an
instalment due on that account, the payment is allocated to the oldest
debt outstanding. The oldest debt is considered the most beneficial debt
to clear for our customers. 

There is no manual intervention in this process unless a customer contacts
us to advise payment was intended for an alternative year's charge and
then the payment can be moved upon request. Therefore, should a customer
contact us and request that the payment they have made be reallocated to
the debt that is the most beneficial for them, we would reallocate the
payment as instructed.

References

Visible links
1. mailto:[email address]
2. http://www.canterbury.gov.uk/
3. https://www.whatdotheyknow.com/request/a...

Dear CCC FOI,

Thank you for your reply. However, I don't agree that the oldest debt would be considered the most beneficial debt to clear for council tax payers (the debt would not necessarily be cleared as a consequence of the allocation). 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 council is most likely to have already obtained a liability order adding costs in respect of any older debts that the taxpayer might have and the council cannot repeat this procedure adding more costs again for the same year's liability.

Yours sincerely,

S Staffordson

CCC FOI, Canterbury City Council

Thank you for submitting a Freedom of Information request.  Your email has
been forwarded to the Freedom of Information and Data
Protection Coordinator. 
We endeavour to respond to all Freedom of Information requests within 20
working days but if we think the request requires extra time we will
contact you to let you know.
Kind regards
Freedom of Information Team
Canterbury City Council

Dear Canterbury City Council,

I would like my query addressing re, 13 October, and would also like to bring it to your attention that my request asked "where did the council obtain the information regarding the appropriation of payments case law" (the response never dealt with this).

Yours faithfully,

S Staffordson

CCC FOI, Canterbury City Council

Thank you for submitting a Freedom of Information request.  Your email has
been forwarded to the Freedom of Information and Data
Protection Coordinator. 
We endeavour to respond to all Freedom of Information requests within 20
working days but if we think the request requires extra time we will
contact you to let you know.
Kind regards
Freedom of Information Team
Canterbury City Council

CCC FOI, Canterbury City Council

Good morning
I have checked our records for you and can see that we issued a response
on 04 October 2019 to your query which asked  "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]?"
I can also see we received a reply from you on 13 October 2019 however
this contained no further questions, nor was it apparent you were seeking
a review of your response.  If you wish us to review the response issued
on 04 October 2019 please could you confirm this so I can get one out
officers to do this for you?
Many thanks
Emma

Dear Canterbury City Council,

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

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

My request asked "where did the council obtain the information regarding the appropriation of payments case law" (the response never dealt with this).

I would also like my query addressing re, 13 October (quoted below):

"Thank you for your reply. However, I don't agree that the oldest debt would be considered the most beneficial debt to clear for council tax payers (the debt would not necessarily be cleared as a consequence of the allocation). 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 council is most likely to have already obtained a liability order adding costs in respect of any older debts that the taxpayer might have and the council cannot repeat this procedure adding more costs again for the same year's liability."

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

CCC FOI, Canterbury City Council

Thank you for submitting a Freedom of Information request.  Your email has
been forwarded to the Freedom of Information and Data
Protection Coordinator. 
We endeavour to respond to all Freedom of Information requests within 20
working days but if we think the request requires extra time we will
contact you to let you know.
Kind regards
Freedom of Information Team
Canterbury City Council

Dear Canterbury City Council,

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

Yours faithfully,

S Staffordson

CCC FOI, Canterbury City Council

Thank you for submitting a Freedom of Information request.  Your email has
been forwarded to the Freedom of Information and Data
Protection Coordinator. 
We endeavour to respond to all Freedom of Information requests within 20
working days but if we think the request requires extra time we will
contact you to let you know.
Kind regards
Freedom of Information Team
Canterbury City Council

CCC FOISupport, Canterbury City Council

Good afternoon
I can confirm we do currently have your request as open, and one of our
officers is looking into this for you with the council tax team.  We are
slightly delayed with the response, but the request itself is currently
open and we are awaiting a response to this for you. I will send a chase
for you in respect of this.  In the meantime, should you have any
enquiries please get in touch.
Many thanks
Emma

show quoted sections

Dear CCC FOISupport,

Thank you for updating me.

Yours sincerely,

S Staffordson

CCC FOI, Canterbury City Council

Please see below our response to your request for a review and further
matters in relation to the subject of the request, the practice of
allocating payments to Council Tax balances.
Firstly, our sincere apologies for not replying earlier, and our thanks
for your patience.
I appreciate we did not address the question raised in your
correspondence, and to that end I would now answer the following question:
My request asked "where did the council obtain the information regarding
the appropriation of payments case law" (the response never dealt with
this). 
Our answer is as follows:
This is based on our own interpretation of caselaw and and reference
material such as produced by the Institute of Revenues, Rating, and
Valuation (IRRV) from an article in their 'Insight' magazine dated October
2002.
You also are waiting on an answer to the following query:
...I don't agree that the oldest debt would be considered the most
beneficial debt to clear for council tax payers (the debt would not
necessarily be cleared as a consequence of the allocation). 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 council is most likely to have already obtained a liability order
adding costs in respect of any older debts that the taxpayer might have
and the council cannot repeat this procedure adding more costs again for
the same year's liability.
Here you are asking us to consider alternatives or discuss the merits of a
policy or procedure.  This therefore does not qualify as a request for
information under the Freedom of Information Act 2000.  Having spoken to
the manager responsible for the collection of Council Tax, they have
provided the following response.  Please note, this is not a response for
a request for information:
If a requester is directly affected by our payment allocation procedure
then they can ask us to review what we have done on their individual case.
As already indicated in our previous response, we believe our existing
process complies with the law. As we have also already indicated, any
debtor who wants their payment allocated to a specific debt can ask us to
do so. The FOI process is not the correct channel for challenging
allocation of payments - as indicated, this would need to be done on a
case-by-case basis.
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. 
I hope that answers your queries, if you are with our response you may
appeal to the Information Commissioner, Wycliffe House, Water Lane,
Wilmslow SK9 5AF.
If you would like the Council Tax service to review a payment allocation
on your Council Tax account please contact them seperately to the FOI
process.  Discussing your Council Tax account with you would a service
provision matter and exempt from disclosure under FOI under s40.  Their
contact details are avaiable here:
[3]https://www.canterbury.gov.uk/contact?ca...
Many thanks
Julian
Information Governance Manager
Canterbury City Council

References

Visible links
1. http://scribd.com/
2. http://legalbeagles.info/
3. https://www.canterbury.gov.uk/contact?ca...

S Staffordson left an annotation ()

"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. "

It was not asked of Canterbury City Council where it had obtained the information regarding "Leeson v Leeson 1936 K.B156 (NELC13)".

Presumably this is the response to a review requested here (Thanet)
https://www.whatdotheyknow.com/request/c...

Dear CCC FOI,

Thank you for your response. You will probably be pleased to hear 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; "if a payment does not match exactly either the debt outstanding or an instalment due...", 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 £60.00 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 £100.00 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 £100.00 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 £100.00 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 £100.00 because of the court costs attributable to the council's further application to the Magistrates' court (the in-year liability increased to £1,301.95 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 £100.00 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).

P.P.S. Regarding "Leeson v Leeson 1936 K.B156 (NELC13)"

I have also found on the scribd website a reference to the cited authority and it is evident that "NELC13" does not form part of the formal case citation. 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/jrvk5lc (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’. "

The above is written evidence supporting allegations made against NE Lincs Council for engineering a shortfall in payment of an in-year account by allocating payment against the customer's wishes to a disputed sum from a previous year's liability. Ironically Canterbury City Council/Thanet has, in support of its response, quoted from a witness statement alleged to have been perjured for obtaining additional costs from an unnecessary court application.

Yours sincerely,

S Staffordson

CCC FOI, Canterbury City Council

Thank you for submitting a Freedom of Information request.  Your email has
been forwarded to the Freedom of Information and Data
Protection Coordinator. 
We endeavour to respond to all Freedom of Information requests within 20
working days but if we think the request requires extra time we will
contact you to let you know.
Kind regards
Freedom of Information Team
Canterbury City Council

We don't know whether the most recent response to this request contains information or not – if you are S Staffordson please sign in and let everyone know.