Imposing unlawful costs – Non-Domestic rates enforcement

The request was partially successful.

Dear North East Lincolnshire Council,

In addressing this FOI request, please refer to North East Lincolnshire Council's website:

http://www.nelincs.gov.uk/business/busin...

"Summonsed to court?

If you pay the full amount owing including all costs before the date of the hearing no further action will be required."

It was stated by 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) were 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 North East Lincolnshire 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 North East Lincolnshire Council has been provided by DCLG on this matter.

Yours faithfully,

Cherie Jerez

PPD - FOI, North East Lincolnshire Council

Dear Ms Jerez

 

I am pleased to acknowledge your request for information, which has been
allocated the reference number 8429_1415.

Your request has been passed to the relevant department for processing and
you can expect your response within the 20 working day limit. If it will
take us longer than 20 working days to respond to you, we will inform you
of this and provide you with the expected date for receiving a response.

Further information about how we will deal with your Freedom of
Information requests is available on our website at:
[1]http://www.nelincs.gov.uk/council/the-co....

Please feel free to contact me if you require any further information or
assistance quoting the reference number above.

 

Yours sincerely on behalf of North East Lincolnshire Council

 

Feedback Officer

Resources Directorate

 

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Cherie Jerez left an annotation ()

The council is breaking the law regarding Magistrates' court procedures, and has been since around 1989.

Its website states:

"Summonsed to Court?

If you pay the full amount owing including all costs before the date of the hearing no further action will be required."

http://www.nelincs.gov.uk/business/busin...

The Magistrates' court decides whether or not the ratepayer is liable for cost. The council obviously thinks differently.

The Statutory Instrument governing Business rates recovery (SI 1989/1058) makes no provision for the billing authority to apply costs to a ratepayer's account. It is without question the Magistrates' decision to agree the level of expenditure incurred by the authority at the Liability Order hearing and only when the order has been granted would the council be justified in stating an amount, with respect to costs, is added to the ratepayer's account.

In essence, North East Lincolnshire Council may not lawfully impose court costs on a business ratepayer without first obtaining a liability order.

In any event, stating a sum which the council expects to be awarded in costs (£70) implies a financial penalty or deterrent. The council obtains a court order merely for the greater powers of enforcement it permits; nothing more. The law does not permit the local authority to set the level to either act as a deterrent or provide additional income.

Dear PPD - FOI,

Response to this request is delayed. By law, North East Lincolnshire Council should have responded by 10 October 2014.

Yours sincerely,

Cherie Jerez

PPD - FOI, North East Lincolnshire Council

Dear Sir or Madam,

 

Thank you for your information request, reference number 8429_1415.

 

I wish to confirm that North East Lincolnshire Council does not hold any
information in relation to your request.

 

If you believe that your request for information has not been handled in
accordance with the Freedom of Information Act, you have the right to
request an internal review by the Council. Please be clear about which
elements of the Council’s response or handling of the request you are
unhappy with, and would like the Council to address during the internal
review process.  If following this you are still dissatisfied you may
contact the Office of the Information Commissioner. If you wish to request
an internal review, please contact me and I will make the necessary
arrangements.

 

Yours sincerely on behalf of North East Lincolnshire Council

 

Feedback Officer

Resources Directorate

 

 

show quoted sections

Dear PPD - FOI,

Re;

"I wish to confirm that North East Lincolnshire Council does not hold any information in relation to your request"

The response indicates that North East Lincolnshire Council has no plans to update the information on its website and is therefore satisfied that its recovery actions comply with the law.

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.

Please Note:

It is clear from North East Lincolnshire 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

Yours sincerely,

Cherie Jerez

Arnold Layne (Account suspended) left an annotation ()

This council just doesn't listen....too stubborn to be told anything.

If it had taken notice a year or two ago when it was first told and acted on the advice then it could have saved all this embarrassment. Instead it digs itself deeper and deeper in a hole (black is white and all that).

Dear PPD - FOI,

I will advise NELC that its website (the same NNDR web page) contains contradictory information and which leaves it open to be challenge on a point of law.

On the one hand it takes it upon itself to apply costs to a chargepayer evidently without obtaining a liability order from the Magistrates' court and on the other it cites the Non-Domestic Rating (Collection and Enforcement) (Miscellaneous Provisions) Regulations 1990 PART III Regulation 7 as being the legislation allowing it to impose costs, i.e. it provides that the court may make an order for reasonable costs incurred in the application.

Plainly by applying costs without an order from the court it is acting beyond its legal powers.

Legislation quoted on NELC's website which amends Regulation 13(1) SI 1989/1058 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)."

Yours sincerely,

Cherie Jerez

Dear PPD - FOI,

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:

It is evident that North East Lincolnshire Council applies costs in a percentage of NNDR cases without a court order. SI 1989/1058 does not provide for this neither do any amendments.

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

fFaudwAtch UK (Account suspended) left an annotation ()

ANNEX C
(Statutory Instrument ultra vires)

https://www.scribd.com/doc/262650108/Con...