Ensuring customers are not subject to unnecessary recovery action, additional costs or hardship

The request was partially successful.

Dear Bristol City Council,

A council taxpayer who owes more than just the current year's liability runs the risk of incurring additional recovery costs through a further application for a liability order if payments which are intended for the current year's liability are allocated by the council's computer to the previous year's liability. This would most likely happen where a non specific payment is made and the computer software is set to automatically allocate these payments to the oldest year's debt.

Councils computer systems have the necessary flexibility to be set to allow non specific payments to be allocated to the arrears or the current year's liability.

I understand that the majority of billing authorities have their computer software set to ensure that their customers are not subject to unnecessary recovery action, additional costs or hardship, i.e. so non specific payments are allocated to the current year's liability.

How does Bristol City Council have its computer software set to deal with non specific payments. Current or oldest year's liability?

Yours faithfully,

Gwyn Worth

Freedom of Information, Bristol City Council

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No Reply @ Bristol, Bristol City Council

Dear Gwyn Worth 
This is a courtesy email to let you know your Public Information
Request has been received on : 03/11/2017. 
Your unique reference number is "CRN00139187 ". Please keep this
number safe, as you may be required to provide it in the future. 
If you need to add further information concerning your case or
require an update about your response date, please email
[email address
Regards,
Customer Relations Team

"No Reply @ Bristol" <noreply@bristol.gov.uk>, Bristol City Council

You sent us a Freedom of Information request on 03/11/2017

Your request number is CRN00139187

We’ve looked at your request and you should receive a reply on or
before 01/12/2017 11:14

This will be 20 working days since your original request.

If you don’t hear from us by this time please contact
[Bristol City Council request email]
Contact details we have for you
Gwyn Worth
 [FOI #442718 email]

 

Thanks

Bristol City Council

Helen Fitzgerald, Bristol City Council

1 Attachment

The attached 'cash posting rules' that are used, should answer your request in full, however if you are not satisfied with this response or wish to lodge an appeal against any exemptions that may have been applied, you can do so by writing to the Data Protection Officer at Bristol City Council Legal Services, The Council House, College Green, Bristol, BS99 7PH or [Bristol City Council request email]. Details of the complaints procedure can be found at www.bristol.gov.uk/complaints.

If, after you have exhausted the council’s complaints procedure, you are still not satisfied with the response you have received you have the right to complain to the Information Commissioner, details of your right to complain can be found at www.ico.gov.uk/complaints.

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The provision of information by Bristol City Council under this scheme does not imply a right to reproduce or commercially exploit such information without the Council's express prior written permission. Reproduction or commercial exploitation of materials supplied under this scheme without the express permission of Bristol City Council may be an infringement of copyright. The Council is unable to grant permission to reproduce or re-use any material accessed through this scheme that is the property of third parties. Permission to reproduce or re-use such material must be obtained from the copyright holders.

Regards
Mrs H Fitzgerald
Senior Local Taxation Officer

Dear Helen Fitzgerald,

Thank you for the attached 'cash posting rules'.

It looks as though the information can not be determined from the attachment because the three final posting rules require to be set or are optional and it is unclear how these this has been done.

Yours sincerely,

Gwyn Worth

Helen Fitzgerald, Bristol City Council

The last three rules - optional boxes - of the 'cash posting rules' have been filled in to show you the options or defaults that Local Taxation has selected to use.

Mrs H Fitzgerald
Senior Local Taxation Officer

Dear Helen Fitzgerald,

Re "The last three rules - optional boxes - of the 'cash posting rules' have been filled in to show you the options or defaults that Local Taxation has selected to use."

I don't understand how the system can be set so that payments which have been unable to be matched by any of the previous rules can hard allocate to the oldest debt, newest debt and soft allocate to the oldest debt. All options appear to be selected. Perhaps unmatched payments are allocated to the newest debt because that rule appears first in the list?

Yours sincerely,

Gwyn Worth

Helen Fitzgerald, Bristol City Council

Dear Gwyn

If the payment does not match any of the 26 cash posting rules that it follows the final rule. Our setting is 'blank' which means cash would soft allocate to the oldest years debt. Apologies if this is not immediately clear from the information previously provided. If I can be of any further assistance please ring me.

Regards
Helen Fitzgerald
Senior Local Taxation Officer
Local Taxation, Neighbourhoods
Bristol City Council
Direct Line 0117 975 5760 [Mon - Fri 10am - 6pm]

Please let us know your views on our proposals to close a budget gap of over £108million over the next five years. It includes proposals on council tax, parks and green spaces. Have your say at www.bristol.gov.uk/corpstrategy.

IMPORTANT NOTICE: Privileged and/or confidential information may be contained in this message and any attachments ("this Email"). If you are not the intended addressee (or responsible for the delivery of this Email), you may not copy or deliver this Email to anyone and you should instead destroy it and are requested to notify the sender of your receipt of the Email immediately. No warranty is given that this Email is free from viruses and/or that this Email or any reply is secure from interception/corruption. Any opinions, recommendations and other information which do not relate to official business of Bristol City Council are included in this Email on the basis that they are personal to the sender and are neither given nor endorsed by Bristol City Council.

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Dear Helen Fitzgerald,

Thank you for stating that unmatched payments are 'soft allocate to the oldest years debt'.

Would you please confirm whether or not any measures are in place to check that allocating an unmatched payment to the oldest debt in these circumstances would have the consequences of putting the current year's liability also in arrears, and if so, in accordance with R. v Miskin Lower Justices [1953] 1 Q.B. 533, whether the payment would be moved in respect of the current year's account to avoid unnecessary recovery action, additional costs etc.?

Yours sincerely,

Gwyn Worth

Helen Fitzgerald, Bristol City Council

3 Attachments

Dear Gwyn

In the case of R. v Miskin Lower Justices [1953] it was held that where an amount 'so obviously' relates to a specific liability, it would be an unwarranted assumption to allocate the payment elsewhere.

Thus:
- if the amount of the payment identifies the debt (which is built into the cash allocation rules previously provided), then it must be allocated to that debt.
- If when making a payment a taxpayer states to which year or debt it should be paid against then we would allocate it accordingly (the cash allocation rules are designed to be used if/when no indication has been given regarding the intended allocation of said payment).
- so, if/when the debtor does not make any reference as to where the payment should be allocated and the amount does not make it obvious where the sum should be allocated, then it is up to the creditor to determine allocation (which is done via the cash allocation rules previously provided - Only if the payment cannot be allocated using one of these rules is it allocated to the oldest debt).

Regards
Helen Fitzgerald
Senior Local Taxation Officer
Local Taxation, Neighbourhoods
Bristol City Council
Direct Line 0117 975 5760

IMPORTANT NOTICE: Privileged and/or confidential information may be contained in this message and any attachments ("this Email"). If you are not the intended addressee (or responsible for the delivery of this Email), you may not copy or deliver this Email to anyone and you should instead destroy it and are requested to notify the sender of your receipt of the Email immediately. No warranty is given that this Email is free from viruses and/or that this Email or any reply is secure from interception/corruption. Any opinions, recommendations and other information which do not relate to official business of Bristol City Council are included in this Email on the basis that they are personal to the sender and are neither given nor endorsed by Bristol City Council.

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Dear Helen Fitzgerald,

Re; "In the case of R. v Miskin Lower Justices [1953] it was held that where an amount 'so obviously' relates to a specific liability, it would be an unwarranted assumption to allocate the payment elsewhere.

Thus:
- if the amount of the payment identifies the debt (which is built into the cash allocation rules previously provided), then it must be allocated to that debt.
- If when making a payment a taxpayer states to which year or debt it should be paid against then we would allocate it accordingly (the cash allocation rules are designed to be used if/when no indication has been given regarding the intended allocation of said payment).
- so, if/when the debtor does not make any reference as to where the payment should be allocated and the amount does not make it obvious where the sum should be allocated, then it is up to the creditor to determine allocation (which is done via the cash allocation rules previously provided - Only if the payment cannot be allocated using one of these rules is it allocated to the oldest debt). "

Your response I believe is an adaption of an article which was published by the Institute of Revenues Rating and Valuation (IRRV), interpreting various case law on appropriation of payments. The article was written by consultant and trainer Paul Russell who made the disclaimer that "the views given in this column are personal views and should not be construed as a legal opinion"

Quoted from the Revenues Rating and Valuation (IRRV) magazine:

QUOTE
' “Where should payments be allocated – to the oldest or youngest debt, to current liability or to arrears?”

Allocation of cash

This is often a difficult decision. A debtor who owes several debts may make a payment which equates to neither an installment or repayment plan, nor to a balance outstanding. I am often asked where payments should be allocated – to the oldest or youngest debt, to current liability or to arrears?

There is no council tax or business rate regulation which relates to the allocation of cash. Case law has held as follows:

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

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.

Stepney Corporation v Osowsky (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 a discretion unless there is no indication by the debtor.

R v Miskin Lower Justices (1953) held that where an amount obviously relates to a specific liability, it would be an unwarranted assumption to allocate the payment elsewhere.

Thus, if the amount of the payment identifies the debt, then it must be allocated to that debt. Where the debtor states or implies that the payment should be allocated to a specific debt, the creditor must abide by that statement. Where the debtor does not make any reference as to where the payment should be allocated and the amount gives no clue, then it is up to the creditor (local authority) to make the choice. In the latter situation, Albermarle provides that the debtor cannot take issue with the way in which the payment has been allocated.

There is total discretion afforded to the local authority, but only where there is no indication by either the amount of the payment or by the indications from the debtor.'
QUOTE END

The following information relevant to the appropriation of payments which has previously been published may be of interest.

The general principles, which take into consideration the relevant case law (relevant to the debtor’s rights) are set out in Chitty on Contracts (31st Edition) Volume 1 at Para 21-061 (see below, note R v Miskin Lower Justices):

'21-061
Debtor’s right to appropriate. It is essential that an appropriation by the debtor should take the form of a communication, express or implied, to the creditor of the debtor’s intention to appropriate the payment to a specified debt or debts so that the creditor may know that his rights of appropriation as creditor cannot arise [353]. It is not essential that the debtor should expressly specify at the time of the payment which debt or account he intended the payment to be applied to. His intention may be collected from other circumstances showing that he intended at the time of the payment to appropriate it to a specific debt or account [354]. Thus, where at the date of payment some of his debts are statute barred and others are not, it will be inferred (in the absence of evidence to the contrary) that the debtor appropriated the payment to the debts that were not so barred. [355]

353 Leeson v Leeson [1936] 2 K.B. 156, 161; Stepney Corp v Osofsky [1937] 3 All E.R. 289; Thomas v Ken Thomas Ltd [2006] EWCA Civ 1504, [2007] Bus. LR 429 at [19].

354 Newmarch v Clay (1811) 14 East 239, 244; Shaw v Picton (1825) 4 B. & C. 715; Young v English (1843) 7 Beav. 10; Nash v Hodgson (1855) 6 De G.M. & G. 474; R. v Miskin Lower Justices [1953] 1 Q.B. 533.

355 Nash v Hodgson (1855) 6 De G.M. & G. 474; cf. a balance owing on a current account: Re Footman Bower & Co Ltd [1961] Ch. 443 (and see below, para. 21-067). '

It was held in R v Miskin Lower Justices, that where an amount obviously relates to a specific liability, it would be an unwarranted assumption to allocate the payment elsewhere. Hence, if the laws of appropriation were to be complied with, an unmatched payment allocated to the oldest debt (having the consequences of putting the current year's liability also in arrears) would require reallocating to the current year's liability. The circumstances would imply that this was the debtor's intention as it would be least burdensome for him and would be an unwarranted assumption to do differently.

There is another source providing guidance on the appropriation of payments here:

https://www.whatdotheyknow.com/request/4...

"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)."

Of further interest

It was held in Fernando v. Fernando (Sri Lankan case around the time of Miskin) that 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".

http://www.lawnet.gov.lk/wp-content/uplo...

Yours sincerely,

Gwyn Worth

Dear Helen Fitzgerald,

Will you please acknowledge receipt of my 5 January 2018 request/clarification.

Yours sincerely,

Gwyn Worth

No Reply @ Bristol, Bristol City Council

Dear Gwyn

Further to your emails 05.01.18 & 06.03.18, (which no do ask for any additional information under the above Act), may I take this opportunity to make clear that the information/clarification issued to you on the 01.12.2017 and 05.01.2017 were deemed to have responded to your Freedom of Information request in full and consequently your request CRN00139187 has been marked as complete.

However if you were not satisfied with this response or wished to lodge an appeal against any exemptions that may have been applied, you can do so by writing to the Data Protection Officer at Bristol City Council Legal Services, The Council House, College Green, Bristol, BS99 7PH or [Bristol City Council request email]. Details of the complaints procedure can be found at www.bristol.gov.uk/complaints.

If, after you have exhausted the council’s complaints procedure, you are still not satisfied with the response you have received you have the right to complain to the Information Commissioner, details of your right to complain can be found at www.ico.gov.uk/complaints.

Copyright Notice
The provision of information by Bristol City Council under this scheme does not imply a right to reproduce or commercially exploit such information without the Council's express prior written permission. Reproduction or commercial exploitation of materials supplied under this scheme without the express permission of Bristol City Council may be an infringement of copyright. The Council is unable to grant permission to reproduce or re-use any material accessed through this scheme that is the property of third parties. Permission to reproduce or re-use such material must be obtained from the copyright holders.

Dear Helen Fitzgerald,

In response to an email I received on 8 March 2018 I would like it clarifying whether it is legally sound for the council to deal with payments based on someone's opinion who makes the disclaimer that his views are personal views and should not be construed as a legal opinion?

Yours sincerely,

Gwyn Worth

Helen Fitzgerald, Bristol City Council

Dear Gwyn

Further to your email Sent: 08 March 2018 18:54 please could you clarify if
- this is a legal question regarding Bristol City Council's standard email disclaimer (see below), that you wish directed to our legal department for a response
Or if
- this is a question regarding how the payment rules Local Taxation use were decided upon

Regards
Helen Fitzgerald
Senior Local Taxation Officer
Local Taxation, Finance
Bristol City Council

IMPORTANT NOTICE: Privileged and/or confidential information may be contained in this message and any attachments ("this Email"). If you are not the intended addressee (or responsible for the delivery of this Email), you may not copy or deliver this Email to anyone and you should instead destroy it and are requested to notify the sender of your receipt of the Email immediately. No warranty is given that this Email is free from viruses and/or that this Email or any reply is secure from interception/corruption. Any opinions, recommendations and other information which do not relate to official business of Bristol City Council are included in this Email on the basis that they are personal to the sender and are neither given nor endorsed by Bristol City Council.

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Dear Helen Fitzgerald,

I can confirm that "this is a question regarding how the payment rules Local Taxation use were decided upon".

Please see my correspondence of 5 January 2018 which will explain why my query referred to a "disclaimer".

"Your response I believe is an adaption of an article which was published by the Institute of Revenues Rating and Valuation (IRRV), interpreting various case law on appropriation of payments. The article was written by consultant and trainer Paul Russell who made the disclaimer that "the views given in this column are personal views and should not be construed as a legal opinion".

Yours sincerely,

Gwyn Worth

Helen Fitzgerald, Bristol City Council

Dear Gwyn Worth

I can honestly say that I was not aware of the IRRV article to which you refer at the time I composed my earlier response. As to the origin of my response, I was part of the project that introduced multi-year accounting into this Council Tax department in 2003, which included setting our payment allocation rules and said case was brought to my attention at that time.

Regards
Helen Fitzgerald
Senior Local Taxation Officer
Local Taxation, Finance
Bristol City Council
Direct Line 0117 975 5760

IMPORTANT NOTICE: Privileged and/or confidential information may be contained in this message and any attachments ("this Email"). If you are not the intended addressee (or responsible for the delivery of this Email), you may not copy or deliver this Email to anyone and you should instead destroy it and are requested to notify the sender of your receipt of the Email immediately. No warranty is given that this Email is free from viruses and/or that this Email or any reply is secure from interception/corruption. Any opinions, recommendations and other information which do not relate to official business of Bristol City Council are included in this Email on the basis that they are personal to the sender and are neither given nor endorsed by Bristol City Council.

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Dear Helen Fitzgerald,

Thank you for your reply. I'm guessing that the interpretation published in the IRRV article has been taken by a number of councils to be authoritative.

It may be useful to point out that the summary of the article which appeared to form the basis for your response was a summary of the 4 cases, Peter v Anderson (1814), Albermarle Supply Co Ltd v Hind & Co (1928), Stepney Corporation v Osowsky (1937) and R v Miskin Lower Justices (1953) and did not just refer to R v Miskin.

Through the process of researching this subject I have come by a number of the relevant case judgments. and it is apparent that the article inadequately interprets the Peter v Anderson (1814) case authority. In that case it was held that;

"A person who is indebted to another on two several accounts, may, on paying him money, ascribe it to which account he pleases.–And his election may either be expressed, –Or may be inferred from the circumstances of the transaction. –But if the payer does not pay specifically on one account, the receiver may afterwards appropriate the payment to the discharge of either of the accounts that he pleases."

The above affirms that the inference from the circumstances of a transaction can be just as valid as an election by the debtor to pay specifically on one of several accounts as if his election were expressed. It is therefore self-evident that in the case of Council Tax liability (where one account is more onerous for the debtor than another) that an unmatched payment must be carried to that account which it is most beneficial to the debtor to reduce. It follows that a debtor 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 appropriated to his arrears, would clearly intend that his payment 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.

The judgment goes on to consider different circumstance which could indicate evidence of an intent to appropriate where an election has not been expressed. The above is considered to be one example where it would be inferred that money was paid in application to a particular debt (where the allocation to one account instead of another would prevent an unnecessary burden). Also highlighted in the judgment are the circumstances attributable to a debtor's payment pattern which would provide evidence of an intent to appropriate payment to a particular debt. 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.

Yours sincerely,

Gwyn Worth

Helen Fitzgerald, Bristol City Council

Dear Gwyn Worth

Would you like me to pass your observations to the appropriate management team?

Regards
Helen Fitzgerald
Senior Local Taxation Officer
Local Taxation, Finance
Bristol City Council
Direct Line 0117 975 5760

IMPORTANT NOTICE: Privileged and/or confidential information may be contained in this message and any attachments ("this Email"). If you are not the intended addressee (or responsible for the delivery of this Email), you may not copy or deliver this Email to anyone and you should instead destroy it and are requested to notify the sender of your receipt of the Email immediately. No warranty is given that this Email is free from viruses and/or that this Email or any reply is secure from interception/corruption. Any opinions, recommendations and other information which do not relate to official business of Bristol City Council are included in this Email on the basis that they are personal to the sender and are neither given nor endorsed by Bristol City Council.

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Dear Helen Fitzgerald,

Yes please, I would appreciate that, thanks.

Yours sincerely,

Gwyn Worth

Dear Helen Fitzgerald,

Is there any feedback from the relevant management team?

Yours sincerely,

Gwyn Worth

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