Imposing unlawful costs – Non-Domestic rates enforcement

Dear Broxtowe Borough Council,

In addressing this FOI request, please refer to Broxtowe Borough Council's website:

http://www.broxtowe.gov.uk/index.aspx?ar...

"....you will have to pay extra costs. We will apply to the Nottingham Magistrates' Court for a summons to be issued against you for the full amount of business rates you owe. This cost is £75 which we will add to the amount you owe.

If we still do not receive your payment, we apply for a liability order."

It was stated by a billing authority (North East Lincolnshire Council) on 26 July 2013 that the above procedure (demanding costs without obtaining a liability order) was unlawful. (see below)

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

[I can confirm that as you state for Business Rates there is no provision for the payment in respect of costs to be made before the Court hearing date, which would halt the Liability Order application.]

The Department for Communities and Local Government (DCLG) was made aware shortly after regarding the risk local authorities faced of being legally challenge in the way regulations are applied.

My question therefore, is whether Broxtowe Borough Council have plans to update the information on its website to bring its recovery procedures for NNDR enforcement in line with lawful provisions.

Please give details of guidance (if any) which Broxtowe Borough Council has been provided by DCLG on this matter.

Yours faithfully,

Cherie Jerez

Dear Broxtowe Borough Council,

Response to this request is delayed. By law, Broxtowe Borough Council should have responded by 17 October 2014.

Yours faithfully,

Cherie Jerez

Dear Broxtowe Borough Council,

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

Yours faithfully,

Cherie Jerez

Dear Broxtowe Borough Council,

Re re response to this request is long overdue. By law, under all
circumstances, Broxtowe Borough Council should have responded by
now.

Yours faithfully,

Cherie Jerez

Dear Arron Beckworth,

Re;

"Broxtowe council is confident that the law allows for costs to be charged for summonses and can defend this and the amount if required by the courts. On that basis we believe the website to be accurate in relation to this and will not need to amend it."

I assume that Broxtowe council derives its confidence that it would get court backing from the fact that it would easily be able to pull the wool over the eyes of a judge or that the court would likely proceed in a corrupt way, on account of a proper ruling would potentially impact on the unlawful taxes being collected by local authorities.

That said, you seem to be misunderstanding something. There is no concern specifically being raised regarding the lawfulness of costs being charged for court applications in business rates cases. However, the law doesn't provide for costs without first obtaining a liability order.

It is clear from Broxtowe Borough Council's website that in a percentage of cases, costs are applies without a court order. SI 1989/1058 does not provide for this neither do any amendments.

It might be helpful if I describe the provision in the following terms:

The summons is issued in respect of the "SUM" outstanding (the "SUM" is the unpaid NNDR excluding costs)

The ratepayer, if after receiving a summons, may if he wishes pay the "SUM" before the application is made.

Regardless of any amount paid, the application is made. However, in cases where the "SUM" has been paid before the application is made, the authority has the option (not a requirement) of requesting that the court make the order in respect of costs alone.

Yours sincerely,

Cherie Jerez

Dear Arron Beckworth,

It's uncertain whether my comments in respect of NNDR enforcement have been useful, however in case they have, there are some more observations I've made:

Regulation 13(1) SI 1989/1058 as amended leaves no doubt that a liability order must be granted even in cases where the request has been made for costs alone (see below):

"13. (1) A single liability order may deal with one person and one such amount (or aggregate amount) as is mentioned in regulation 12(6) and (7) (in which case the order shall be in the form specified as form A in Schedule 2, or a form to the like effect), or, if the court thinks fit, may deal with more than one person and more than one such amount (or aggregate amount) (in which case the order shall be in the form specified as form B in that Schedule, or a form to the like effect). "

Note:

Notwithstanding the error following the regulations it would seem that there is has been further legislative error in enacting the Statutory Instrument. Regulation 12(7) of SI 1989/1058 inserted by Regulation 7 of the Non Domestic Rating (Collection and enforcement regulations) Miscellaneous Provisions Regulations 1990 appears to be ultra vires.

The primary legislation laying down the boundaries from which regulation 7 of SI 1990/145 derived is the Local Government Finance Act 1988. The relevant provision inserted by paragraph 13 SCHEDULE 5 (section 139) of the Local Government and Housing Act 1989 (Local Government Finance Act 1988: Amendments), as below:

13.—(I) Schedule 4 (enforcement) shall be amended as follows.

(2) In paragraph 3 (liability orders) the following sub-paragraph shall be inserted after sub-paragraph (2)—

"(2A) The regulations may include provision that, where the sum payable is paid after the order has been applied for but before it is made, the magistrates' court shall nonetheless make the order in respect of a sum (of an amount determined in accordance with prescribed rules) in respect of the costs incurred in APPLYING FOR IT."

As aforementioned, the statutory instrument SI 1990/145 with regards regulation 7 appears to have been enacted without the legal powers of the primary legislation. The paragraph inserted by regulation 7 is as follows:

"(7) Where the sum payable is paid after a liability order has been applied for under paragraph (2) but before it is made, the court shall nonetheless (if so requested by the charging authority) make the order in respect of a sum of an amount equal to the costs reasonably incurred by the authority in MAKING THE APPLICATION."

The primary legislation does not give legal powers such that the regulations may include provision that the court shall make the order in respect of a sum of an amount equal to the costs reasonably incurred by the authority in "MAKING THE APPLICATION".

There is an important distinction in that the primary legislation provides for an order in respect of the costs incurred in "APPLYING FOR IT"

This means that if the respective secretaries of state had made the regulations within the powers conferred on them, regulation 12(7) would make provision for where the sum payable is paid after a liability order has been applied for but before it is made, the court shall nonetheless (if so requested by the charging authority) make the order in respect of a sum of an amount equal to the costs reasonably incurred by the authority in INSTITUTING THE SUMMONS.

Of importance is that this would essentially be a lesser sum than the sum which is claimed to be an amount equal to the costs reasonably incurred by the council in obtaining the order (regulation 12(6)(b)).

Yours sincerely,

Cherie Jerez