B e f o r e :
THE HONOURABLE MR JUSTICE STANLEY BURNTON
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| | LONDON BOROUGH OF TOWER HAMLETS
| Appellant
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| | - and -
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| | WILLIAM A MERRICK (1)
|
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| | and
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|
| | THAMES MAGISTRATES’ COURT (2)
| Respondents
|
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(Transcript of the Handed Down Judgment of
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Christopher Lundie (instructed by the Solicitor to the London Borough of Tower Hamlets) for the Appellant.
The First Respondent, William Merrick, appeared in person.
The Second Respondent did not appear and was not represented.
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HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
Crown Copyright ©
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MR JUSTICE STANLEY BURNTON:
This is an appeal by way of case stated from the decision of District Judge Read dated 22 January 2001 by which he dismissed the Appellant's complaint as to the liability of the first respondent, Mr Merrick, to pay to it outstanding non-domestic rates for the chargeable financial years 1997-1998, 1998-1999, 1999-2000, and 2000-2001, on the ground that it was not open to the Appellant to apply for a single liability order in respect of more than one year's liability, and alternatively that it would be unfair to include more than one year's liability in a single liability order. The Appellant contends that both of these grounds are unfounded: it contends that it was entitled to seek a single liability order in respect of rates payable for more than one year, and that the learned district judge had no power to refuse to make such an order on the ground of unfairness; in any event, the Appellant disputes that there was any unfairness in proceeding as it sought to do.
I was told that the issues raised in this case stated are of general practical importance for local authorities.
After the hearing of the appeal, I received a supplemental skeleton argument from Mr Merrick. There was no order permitting further submissions, but the Appellant did not object to my accepting that document, and Mr Lundie, counsel for the Appellant, responded to it in a short written submission, in which he also referred me to some additional authorities and statutory provisions. I have taken Mr Merrick’s supplemental skeleton argument and Mr Lundie’s written submissions into account in my judgment, although I am bound to say that neither of them led me to change the provisional view I had formed by the end of the hearing of the appeal.
The issues in this appeal arise from the provisions of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 ("the Regulations"). Part II of the Regulations deals with the billing of persons liable to pay non-domestic rates; Part III deals with the enforcement of their liabilities to billing authorities such as the Appellant. Part II requires demand notices, that is, notices required to be served by Regulation 4(1), to be served by a billing authority on every ratepayer. Regulation 4 is as follows:
"(1) For each chargeable financial year a billing authority shall, in accordance with regulations 5 to 7, serve a notice in writing on every person who is a ratepayer of the authority in relation to the year.
(2) Different demand notices shall be served for different chargeable financial years.
(3) A demand notice shall be served with respect to the amount payable for every hereditament as regards which a person is a ratepayer of the authority, though a single notice may relate to the amount payable with respect to more than one such hereditament.
(4) If a single demand notice relates to the amount payable with respect to more than one hereditament, subject to paragraphs 5 and 8 of Schedule 1 the amounts due under it, and the times at which they fall due, shall be determined as if separate notices were issued in respect of each hereditament."
Regulation 7(6) provides:
“(6) No payment in respect of the amount payable by a ratepayer in relation to a hereditament for any chargeable financial year .... need be made unless a notice served under .... [Part II] requires it."
Under the provisions of Part III of the Regulations, the liability of a ratepayer to a billing authority may enforced either in a court of competent jurisdiction, the County Court or the High Court, or under the special procedure in magistrates' courts laid down by Regulations 11 to 21. Regulation 10(2) is as follows:
"A sum which has become payable to a billing authority under Part II and which has not been paid shall be recoverable under a liability order, or in a court of competent jurisdiction, in accordance with regulations 11 to 21."
A "liability order" is an order made in accordance under Regulation 12: see Regulation 10(1).
The requirement of regulation 4 that there must be a different demand notice for different chargeable financial years is the basis of Mr Merrick’s case. He submitted that it provides for a “régime” under which separate procedures are required for each financial year. He argued that the provisions of Part III of the Regulations must be interpreted in the light of regulation 4, so that, for example, the reference to “a sum” in regulation 10(2) is to be understood as a sum due in respect of an individual financial year. He submitted that the reference to “the sum” in regulation 12(5) must be similarly construed.
In my judgment these submissions are ill-founded. There is nothing in Regulation 10(2) itself to indicate that proceedings in a court of competent jurisdiction must be confined to a debtor's liability in respect of a single chargeable financial year. It simply provides for the procedures that may be taken to recover a sum due to a billing authority. In the case of proceedings in a court of competent jurisdiction, and in the absence of any express, or implied, restriction, Part 7.3 of the Civil Procedure Rules permits a billing authority to include in the same proceedings liabilities for non-domestic rates relating to more than one year and resulting from the service of more than one demand notices. Nowhere in Part III is there an equivalent of the language of paragraphs (1) or (2) of regulation 4. If joinder of claims for more than one financial year is permissible in the case of proceedings brought in a court of competent jurisdiction pursuant to regulation 10(2), and in my judgment it is, it is difficult to see why the position should be different in proceedings for a liability order under the Regulations. Convenience and the minimising of costs suggest that proceedings claiming liabilities in respect of more than one year should be permitted. In any event, however, the subsequent provisions of the Regulations confirm that such proceedings are permissible.
Regulation 11 is as follows:
"(1) Subject to paragraph (3), before a billing authority applies for a liability order it shall serve on the person against whom the application is to be made a notice ("reminder notice"), which is to be in addition to any notice required to be served under Part II and which is to state every amount in respect of which the authority is to make the application.
(2) A reminder notice may be served in respect of an amount at any time after it has become due.
(3) ...."
As can be seen, Regulation 11(1) expressly provides that the reminder notice to be served under paragraph (1) may state more than one amount, and similarly envisages that the billing authority may make an application for liability order in respect of more than one amount. There is nothing to indicate any prohibition on those amounts being due in respect of more than one year.
Regulation 12, dealing with an application for a liability order, is consistent with this approach:
"(1) Subject to paragraph (3), if an amount which has fallen due under regulation 8(2) in consequence of such a failure as is mentioned in sub-paragraph (a) of that provision is wholly or partly unpaid, or (in a case where a reminder notice is required under regulation 11) the amount stated in the reminder notice is wholly or partly unpaid at the expiry of the period of 7 days beginning with the day on which the notice was served, the billing authority may, in accordance with paragraph (2), apply to a magistrates' court for an order against the person by whom it is payable.
(2) The application is to be instituted by making complaint to a justice of the peace, and requesting the issue of a summons directed to that person to appear before the court to show why he has not paid the sum which is outstanding.
(3) ....
(4) ....
(5) The court shall make the order if it is satisfied that the sum has become payable by the defendant and has not been paid.
(6) An order made pursuant to paragraph (5) shall be made in respect of an amount equal to the aggregate of --
(a) the sum payable, and
(b) a sum of an amount equal to the costs reasonably incurred by the applicant in obtaining the order.
(7) ...."
The request made to the magistrates’ court when the complaint is made is for the issue of a summons directed to the alleged debtor to show why he has not paid “the sum which is outstanding”. The order to be made under this regulation is an order to pay the sum which has become payable by the defendant and has not been paid: paragraph (5): i.e., “the sum outstanding”. The billing authority will normally have served a reminder notice in respect of that sum (or a greater sum, if there have subsequently been payments on account), and, as has been seen, a reminder notice may relate to more than one amount. Furthermore, since Regulation 12(5) requires the magistrates' court to make the order if it is satisfied that the sum has become payable by the defendant and has not been paid, it is not open to the court to refuse to make an order in respect of any sum which it is satisfied has become payable by the defendant and has not been paid on the ground that the complaint or the summons relate to more than one year.
This conclusion is further confirmed by the provisions of Regulation 13. Regulation 13 enables the court to make a single liability order in respect of more than one person and more than one amount outstanding. It does not require there to be any connection between the persons in respect of whom a liability order is made, or the amount outstanding, other than that all the sums in question are due to the same billing authority. Regulation 13(1) is as follows:
"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)."
The power conferred by Regulation 13 must be useful where a billing authority seeks to enforce the liabilities of numerous debtors. It avoids the magistrates' court having to make a separate order in respect of each debtor. However, it is difficult to believe that Parliament could have conferred such a wide-ranging power while restricting liability orders, where proceedings taken against one person only, to a single year's rates.
Mr Merrick's argument depended essentially on the provisions of Regulation 4(2). However, his reliance on paragraph 4(2) ignores the lack of any equivalent provision in relation to reminder notices, complaints or indeed liability orders themselves. His real complaint is that his liability in respect of each year needs to be separately considered. He was concerned that the inclusion of several years' rates in one complaint and one summons would hinder his defence, by which he takes issue with the Appellant's case that it duly served on him the requisite demand notices and reminder notices. The Appellant's case as to the service of these notices depended on the programming of its computer. The Appellant's evidence was that its computer system could not produce a reminder notice without having first produced a demand, and could not produce a summons without first having produced a reminder notice. Mr Merrick's case, as I understood it, is that by joining in one complaint and in one summons several years' rates, this safeguard was circumvented. Mr Merrick contends, as I understand it, that the system will produce a summons provided a reminded notice and demand have been produced in respect of any of the years in respect of which rates are alleged to be outstanding. It is unclear from the case stated whether the district judge made any findings as to what demands and reminder notices had been served in respect of which years, and I have dealt with this appeal on the basis that it is for the district judge to make the requisite findings of fact as to the service of these documents. Be that as it may, the joinder of claims in respect of more than one year's rates in the same proceedings in no way restricts a defendant in his defence of each of those claims. There is no difference between the issues which may be taken by a defendant who is the subject of separate complaints in relation to each year's rates and one who is the subject of a single complaint relating to several years' rates.
Mr Lundie, for the Appellant, sought to rely on the statement in Stone's Justices' Manual 2001, at paragraph 1-570, to the effect that there is no impediment to a complaint containing multiple allegations. The authority cited for that proposition is Tyrell v Tyrell (1928) 92 JP 45. That case concerned a complaint alleging alternative grounds for making an order for maintenance under the Summary Jurisdiction (Married Women) Act 1895, rather than a case, such as the present, where a number of separate allegations are made giving rise to separate liabilities on the part of the defendant. I do not find it of assistance in relation to the present case, which, as I indicated above, in my judgment depends entirely on the provisions of the Regulations.
In his supplemental written submissions, Mr Lundie referred me to the Poor Rates Recovery Act 1862, which provides that:
“Where any number of local rates and taxes, whether of the same or different kinds, are due from the same person, that rates and taxes so due may be included in the same information, complaint, summons, order, warrant or other document required by law to be laid before justices or to be issued by justices …
No costs shall be allowed in respect of several informations, complaints, summonses, orders, warrants or other such documents as aforesaid, in cases where, in the opinion of the justices or court having jurisdiction over the said costs, one information, complaint, summons, order, warrant or other document as aforesaid might have sufficed, regard being had to the provisions of this Act.”
However, I have reached my conclusion on the wording of the Regulations alone.
In the result, I answer the questions of law on which the opinion of the High Court was sought by the case stated as follows:
(a) It was open to the Appellant to make application for a Single Liability order to include more than one financial year's liability.
(b) The district judge had no discretion to make individual liability orders in respect of each financial year's liability. He was obliged by regulation 12 to make an order in respect of the total sum outstanding for rates for the years in question to make a single order in respect of the total sum outstanding plus the Appellant’s reasonable costs incurred in obtaining the liability order.
Lastly, I should mention that it is unnecessary to refer to the provisions of the Regulations relating to aggregate sums. Those references are references to a total of sums payable by way of rates and sums of costs ordered to be paid by a defendant to a billing authority.
Costs
The Appellant having succeeded in this appeal, it is entitled to its costs. Mr Merrick submitted that in the event of the appeal succeeding, he should nonetheless not be required to pay costs by reason of the general importance of the issues raised by this appeal. In my judgment, that is not a good reason to deprive the Appellant of its costs, in circumstances where the issues raised by Mr Merrick were, as I have decided, bad in law. No issue was taken as to the amount of the Appellant's costs, totalling £3,402, set out in its statement of costs, other than in relation to two items which related to its application for an extension of time to lodge the case stated, the total of which is £470 including VAT. No order was made in respect of the costs of that application. Accordingly, I order that Mr Merrick pay the costs of the Appellant in the sum which I assess of £2,932.
MR JUSTICE BURNTON: My judgment was distributed in draft. I am grateful to counsel for the appellant for the corrections. For the reasons set out in my draft judgment the order of the district judge will be set aside and the matter remitted to him for him to continue to hear the application by the appellant in accordance with the law set out in the judgment.PRIVATE
MR LUNDIE: I am grateful for that, my Lord. In the most recent copy of the judgment handed down, I have noticed one of the corrections has not quite made it into the final draft.
MR JUSTICE BURNTON: I am sorry about that.
MR LUNDIE: It is paragraph 6 of the judgment.
MR JUSTICE BURNTON: Okay.
MR LUNDIE: "A "liability order" is an order made in accordance under Regulations----
MR JUSTICE BURNTON: It should say 12, should it not?
MR LUNDIE: It should say it 12.
MR JUSTICE BURNTON: Thank you very much. There are copies available for those who are interested and I hope those who are interested will take a note of that correction. I will make sure that the reported version has that correction. Thank you very much for noticing that.
MR LUNDIE: I believe there is someone from Mr Merrick's solicitors who may wish to make some representations.
MR SHARMA: Yes, that is me. We seek leave to appeal the decision, to take it to the Court of Appeal. We have two reasons for this: firstly, it is a complex matter; secondly, it is mentioned in the judgment that this is important to the local authorities. We also believe it is important to smaller businesses.
MR JUSTICE BURNTON: Thank you very much. I refuse leave to appeal. This was a straightforward matter of statutory construction on which I formed very clear conclusions.
