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.

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

We're waiting for S Staffordson to read a recent response and update the status.

Dear Tameside Metropolitan Borough Council,

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

"I can confirm that when money is sent to the Council for Council Tax, these payments are allocated in the following order:

a) Where the payment received corresponds with the amount of a current year instalment, the monies will be allocated to current year.

b) Where the payment received corresponds with the amount of an agreed payment arrangement, in respect of previous year’s arrears, the amount is credited to the arrears.

c) Where the amount received does not correspond to an expected instalment for current year, or an agreed payment arrangement for previous year’s arrears, the payment will be allocated to the oldest outstanding debt. "

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

Freedom Of Information Requests, Tameside Metropolitan Borough Council

Dear Mr/Ms S Staffordson,

 

Freedom of Information Request

Unique Reference No: FOI 9308

 

Thank you for your email received 17 September 2019 requesting information
under the Freedom of Information Act.  I understand your request to be as
follows:

 

The Council makes the statement quoted below from the document link:

https://www.whatdotheyknow.com/request/3...

 

"I can confirm that when money is sent to the Council for Council Tax,
these payments are allocated in the following order:

 

a)  Where the payment received corresponds with the amount of a current
year instalment, the monies will be allocated to current year.

 

b)  Where  the  payment  received  corresponds  with  the  amount  of  an 
agreed  payment arrangement, in respect of previous year’s arrears, the
amount is credited to the arrears.

 

c)  Where  the  amount  received  does  not  correspond  to  an  expected 
instalment  for current year,  or  an  agreed  payment  arrangement for 
previous  year’s  arrears,  the  payment  will be allocated to the oldest
outstanding debt. "

 

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]?

 

Your request is being considered as a request under the Freedom of
Information Act 2000.  In accordance with statutory requirements, it may
take up to 20 working days (approximately 4 weeks) for the Council to
consider your request and provide a formal response.  Should this 20
working day deadline need to be extended you will be notified and kept
informed.

 

I have passed your request to Tracey Watkin, Service Unit Manager — Assess
and Pay and Income and Collection, to respond to your request and she can
be contacted on 0161 342 2368 or at [1][email address].

 

Please be advised that there may be a charge for your request and you will
be notified if this is the case before any costs are incurred.  Should you
have any concerns about the way your response is being dealt with, please
do not hesitate to contact me in writing or by e-mail.

 

Regards

 

 

Freedom of Information Support

 

 

Email Disclaimer [2]http://www.tameside.gov.uk/disclaimer

show quoted sections

Dear Freedom Of Information Requests,

Response to this request is delayed. By law, Tameside Metropolitan Borough Council should normally have responded promptly and by 15 October 2019.

Yours sincerely,

S Staffordson

Freedom Of Information Requests, Tameside Metropolitan Borough Council

Dear S Staffordson,

Apologies for the delay in response.

I am writing to confirm your Freedom of Information Request is in process and we will endeavour to send as soon as possible.

Thank you for your patience.

Please do not hesitate to contact me with any queries.

Regards,

Freedom of Information Support

show quoted sections

Freedom Of Information Requests, Tameside Metropolitan Borough Council

1 Attachment

Dear S Staffordson,

 

Request for Information – Freedom of Information

Unique Reference FOI 9308

 

Please find attached response in relation to your Freedom of Information
Request.

 

Kind regards,

 

On behalf of Tracey Watkin

 

 

 

 

Tameside MBC GCSX Mail Cessation Notice.

The Tameside GCSX mail service (tameside.gcsx.gov.uk) is in the process of
being ceased.  In future Tameside MBC will communicate with organisations
using the "@tameside.gov.uk" email address with TLS security and DMARC
(SPF & DKIM) as per NCSC guidelines.

 

 

Confidentiality: This e-mail its contents and any attachments are intended
only for the above named. As this e-mail may contain confidential or
legally privileged information, if you are not, or suspect that you are
not the above named or the person responsible for delivering the message
to the above named, delete or destroy the email and any attachments
immediately. The contents of this e-mail may not be disclosed to nor used
by anyone other than the above named.

Security and Viruses: please note that we cannot guarantee that this
message or any attachment is virus free or has not been intercepted and
amended.

Monitoring: The Council undertakes monitoring of both incoming and
outgoing e-mails. You should therefore be aware that if you send an e-mail
to a person within the Council it may be subject to any monitoring deemed
necessary by the organisation from time to time. The views of the author
may not necessarily reflect those of the Council.

Access: As a public body, the Council may be required to disclose this
e-mail (or any response to it) under the Freedom of Information Act 2000,
unless the information in it is covered by one of the exemptions in the
Act.

Dear Freedom Of Information Requests,

Thank you for your reply. I note your reference to Khandanpour v Chambers in support of your reliance on Leeson v Leeson (1936).

Khandanpour v Chambers [2019] EWCA Civ 570
https://www.bailii.org/ew/cases/EWCA/Civ...

This judgment persuasively argues that a local authority should be required to have its council tax processing software parameters set to automatically allocate non-specified payments to the in-year account (rather than to the oldest liability). Having payment allocated to the oldest liability, would with almost certainty trigger the Council's automated recovery procedure adding unnecessary additional costs of enforcement in respect of the in-year account which would have fallen in arrears as a consequence of the misallocated payment.

The taxpayer's obvious intention would in these circumstances to have been to appropriate payment to the in-year account and the relevant billing authority would not be in doubt as to which liability the taxpayer had intended payment to have reduced. It would therefore have been inferred from the circumstances known to both parties.

The council would know that appropriation to the oldest liability would be contrary to the taxpayer's obvious intention in making payment. The mere fact that it would be to the debtor's detriment if allocated to an earlier debt would be sufficient to infer that the payment was intended to reduce his current year’s liability.

The judgment only seems to reinforce the above points under the heading "Appropriation" (paras 25 to 31) particularly where reference is made to the various case authorities such as "Chitty on Contracts", Parker v Guinness and Leeson v Leeson.

If further reference to these authorities is needed it may be helpful to consult paragraph 53 onwards in the following representations relating to court proceedings in which the issue concerned a billing authority appropriating payments wrongly:

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

Yours sincerely,

S Staffordson

Freedom Of Information Requests, Tameside Metropolitan Borough Council

Dear Mr Staffordson,

 

Your further comments are noted. The Council applies payments in a way
which  infers reasonable intention where none is stated. The system also
permits the taxpayer to expressly request application of a payment to a
particular debt.

 

If you need anything further, please do not hesitate to get back in touch.

 

Kind Regards,

 

Freedom of Information Support

 

show quoted sections

Dear Freedom Of Information Requests,

You will already know this but for what it's worth the council's processing system applies payments in respect of the customer's implied intention on a severely restricted basis (solely if the sum paid corresponds with an instalment amount). A payment matching a specific liability is only one of a number of 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 previously quoted Khandanpour v Chambers "Appropriation" from para 25).

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 would be provided in those particular circumstances to be an election to pay specifically on the current year's liability. 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, and the best chance of achieving that would be if the parameters in the Council Tax processing system were set so that any unspecified payments were applied to the current year's charge.

Yours sincerely,

S Staffordson

Freedom Of Information Requests, Tameside Metropolitan Borough Council

Dear S Staffordson,

 

Thank you for your email.

 

I have forwarded your email to the relevant service area – receipt has
been confirmed and your comments noted.

 

Kind regards,

 

Freedom of Information Support

 

 

Email Disclaimer http://www.tameside.gov.uk/disclaimer

 

show quoted sections

Dear Freedom Of Information Requests,

Thank you for informing me that you have forwarded my email to the relevant service area and that my comments have been noted. I assume that the relevant service area is the Council Tax collection/recovery department and the noting of my comments indicates that the approach to payment allocation will be reviewed? Anticipating that I may have assumed wrongly and/or you may not respond, I have decided against pursuing this anyway. However, I would suggest that the most relevant service area would be the Council's legal department because 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; "where the amount received does not correspond to an expected instalment for current year....", 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.

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 £49.00 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 £86.00 so the total amount owing the council for that year's charge has increased to £135.00. 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 £86.00 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 £86.00 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 £135.00 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 £13.00). The customer's in-year liability did not only remain unchanged as a result of the misapplied £122.00 payment it actually increased by £80.00 because of the court costs attributable to the council's further application to the Magistrates' court (the in-year liability increased to £1,287.95 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 £86.00 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

Council Tax, Tameside Metropolitan Borough Council

1 Attachment

Dear S Staffordson,

 

Thank you for your email dated 21 February 2020 the comments of which are
noted.

 

Yours sincerely,

Council Tax

Assess and Pay and Income and Collection

Exchequer

Governance and Pensions

[1]Tameside MBC | [2]Twitter | [3]Facebook | [4]Instagram

PO Box 304 | Ashton-under-Lyne | Tameside | | OL6 0GA

 

Tel. 0161 342 2015

 

Email Disclaimer [5]http://www.tameside.gov.uk/disclaimer

[6][IMG]

Tameside MBC GCSX Mail Cessation Notice.

The Tameside GCSX mail service (tameside.gcsx.gov.uk) will cease as of
27th March 2020.  From this date Tameside MBC will communicate with
organisations using the "@tameside.gov.uk" email address with TLS security
and DMARC (SPF & DKIM) as per NCSC guidelines.

 

 

Confidentiality: This e-mail its contents and any attachments are intended
only for the above named. As this e-mail may contain confidential or
legally privileged information, if you are not, or suspect that you are
not the above named or the person responsible for delivering the message
to the above named, delete or destroy the email and any attachments
immediately. The contents of this e-mail may not be disclosed to nor used
by anyone other than the above named.

Security and Viruses: please note that we cannot guarantee that this
message or any attachment is virus free or has not been intercepted and
amended.

Monitoring: The Council undertakes monitoring of both incoming and
outgoing e-mails. You should therefore be aware that if you send an e-mail
to a person within the Council it may be subject to any monitoring deemed
necessary by the organisation from time to time. The views of the author
may not necessarily reflect those of the Council.

Access: As a public body, the Council may be required to disclose this
e-mail (or any response to it) under the Freedom of Information Act 2000,
unless the information in it is covered by one of the exemptions in the
Act.

References

Visible links
1. http://www.tameside.gov.uk/
2. https://twitter.com/TamesideCouncil
3. https://www.facebook.com/Tameside-Counci...
4. https://www.instagram.com/tamesidecouncil/
5. http://www.tameside.gov.uk/disclaimer
6. file:///tmp/www.tameside.gov.uk/fostering

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.