England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		15 May 2007

1. MR JUSTICE LLOYD JONES: This is a statutory appeal brought by Mr Daniels against a decision of the Valuation Tribunal, dated 22 September 2006, in which the tribunal upheld the rescission by the respondent, the London Borough of Barnet, of the unoccupied property discount for 11 Coleridge Walk, London NW11 6AT ("the property"). That discount had been granted to Mr Daniels on or around 9 October 2003.
2. The statutory scheme is as follows. Section 2 (1) of the Local Government Finance Act 1992 provides that -

"Liability to pay council tax shall be determined on a daily basis."

Whether a particular person is liable to pay council tax in respect of a chargeable dwelling is determined by reference to Section 6 of the 1992 Act. Section 11 provides:

"(1) The amount of council tax payable in respect of any chargeable dwelling [on] any day shall be subject to a discount equal to the appropriate percentage of that amount if on that day -

(a) there is only one resident of the dwelling and he does not fall to be disregarded for the purposes of discount .....

(2) Subject to Section 11A and 12 below, the amount of council tax payable in respect of any chargeable dwelling and any day shall be subject to a discount equal to twice the appropriate percentage of that amount if on that day -

(a) there is no resident of the dwelling .....

(3) In this section and Sections 11A and 12 below 'the appropriate percentage' means 25 per cent ..... "

3. So the position was that in respect of a sole resident there was a discount of 25 per cent. In respect of a property in which there was no resident, the percentage was 50 per cent.
4. The particular dispute arose in this way. By a letter sent to the respondent, dated 9 October 2003, the applicant confirmed that the property was presently unoccupied. As a result, the respondent increased the applicant's discount from 25 per cent for sole occupancy to 50 per cent for non-occupancy. On 1 April 2004 a change in the legislation came into force. That permitted the respondent to reduce the discount for non-occupancy to 10 per cent. The respondent authority, early in 2006, gave the applicant notice of such a reduction. That was challenged by the applicant in correspondence with the authority. In particular, he challenged it on the grounds that the council had no power to make such an adjustment retrospectively. That particular point is not directly relevant to the issues I have to decide. As part of that challenge, the applicant contended that his "main home" was the property. As a result of such an admission, the respondent rescinded the previous discount of 50 per cent; it would go back to the sole occupancy discount. That was 25 per cent. That decision was appealed by the applicant before the tribunal.
5. Before the tribunal the applicant was saying that he was a sole resident and that he was entitled to 25 per cent discount. The council was prepared to agree to that and that was something which was to the advantage of the applicant. Had he not been resident, then he would only have been entitled to 10 per cent discount. The council made the point that it followed from the fact that he was a sole resident, and was asserting that he was a sole resident, that the applicant had received too great a discount previously. That was the real issue before the tribunal on appeal and it is the real issue before me today. Mr Daniels has accepted that it is this question of retrospectivity which is at the heart of the case.
6. The Valuation Tribunal considered the appeal on 5 September 2006. It made findings as follows. First, Mr Daniels had at all material times been the sole resident of the property. Secondly, the property was not Mr Daniels' second home and, as a result, he was not subject to a reduction in his discount to 10 per cent. Thirdly, Mr Daniels had been entitled to a 25 per cent discount on his council tax liability and not the higher discount of 50 per cent awarded by the authority as a result of the letter written by Mr Daniels on 9 October 2003. Fourthly, the tribunal concluded that the billing authority had acted correctly in its awards of discount to Mr Daniels based on the information given to them by Mr Daniels. On receipt of new information the appropriate discount was retrospectively determined by the billing authority, as it was entitled to do, under the Local Government Finance Act 1992.
7. I draw attention to two passages in the ruling of the tribunal:

"The tribunal do not find the appeal to be complicated, given that both the Billing Authority and the appellant agree that 11 Coleridge Walk has always been Mr Daniels' main residence. The Tribunal therefore agrees with the Billing Authority that Mr Daniels' correct entitlement is the single person's discount of 25%."

Pausing there, it appears that this is a reference to the evidence given by Mr Daniels at the tribunal which is recorded in the following sentence:

"Mr Daniels informed the tribunal that he had been the sole resident of the subject property since January 2000 and that his dispute centred on the Council's decision to reclaim a discount of 50% it had granted him on the council tax for 11 Coleridge Walk, London N[W]11 6AT."

The second passage reads as follows:

"The tribunal notes the appellant's contention that the Billing Authority should not be allowed to amend/rescind a discount retrospectively, because in his opinion it was the Billing Authority's own mistake that it had awarded an incorrect discount. However the Tribunal is satisfied that the Council acted correctly, based on the information supplied by Mr Daniels at the relevant times."

8. On this appeal the applicant seeks to challenge the decision. I have tried to the best of my ability to identify the grounds on which the challenge is brought. They appear to be as follows. First, the applicant disputes that it was common ground that the property was his main residence. He seeks to draw a distinction between "main home" and "main residence". Secondly, he submits that the tribunal was misled by the failure of the council to draw attention to the Council Tax (Exempt Dwellings) Act 1992. Thirdly, he submits that it was not open to the council to make the adjustment with retrospective effect.
9. So far as the first issue is concerned, Mr Daniels was maintaining before the tribunal that he was resident in the property, that he was a sole resident entitled to 25 per cent discount. That was accepted by the council. It was on that basis that the tribunal, in the passage I have just cited, felt able to conclude that Mr Daniels was resident in the property and on that basis the correct entitlement was a single person's discount of 25 per cent. In support of his case the appellant said the following:

"I may not be living at the property all the time. This does not of itself prevent it being my main home. The property has never been rented out. I have always been intending to return there. Personal possessions are there and it is used for credit reference purposes, credit card statements and bank account statements."

10. In all the circumstances the tribunal was clearly entitled to come to the conclusion that there was a resident in the dwelling. That was the sole basis on which Mr Daniels would have been entitled to the 25 per cent discount which, it is common ground, he should retain.
11. Mr Daniels seeks to draw a distinction between "main home" and "main residence". I am bound to say that I am unable to understand the distinction which he seeks to draw. However it was necessary that he show that he was resident in the property in order to claim the 25 per cent discount to which he was held to be entitled. The tribunal was clearly entitled to come to its conclusion on its decision.
12. The second ground concerns the failure of representatives of the council to draw the attention of the tribunal to the Council Tax (Exempt Dwellings) Act 1992. Mr Daniels says that it amounted to an unfair trial because the tribunal was misled by the failure to place the 1992 Act before the tribunal. He says that this suggested to the tribunal that he had misled the council. However it does not appear that the tribunal was misled in anyway, let alone in the way suggested by Mr Daniels. There is nothing to suggest that the tribunal was influenced by considerations of whether or not the property was furnished.
13. The relevance of the Council Tax (Exempt Dwellings) Act 1992 would have been that if the property was unfurnished, the dwelling would have been entirely exempt from council tax. However it had never been suggested by the applicant that the property was unfurnished. There is nothing to suggest that the tribunal was influenced in any way by considerations as to whether the property was or was not furnished. Again I can see nothing in this ground of appeal.
14. The real point of this appeal concerns the retrospectivity of the conclusion of the tribunal. I have already referred to the tribunal's conclusion. I should now refer to the tribunal's conclusion which was stated in the following terms:

"The tribunal notes the appellant's observations regarding the apparent delay in the Billing Authority's decision to hold the appeal dwelling as his main residence from 23 July 1999. However the Tribunal is satisfied that the Local Government Finance Act 1992 provides that liability for Council Tax accrues on a daily basis for each day upon which the circumstances giving rise to the charge occurred. Further, the Tribunal is satisfied that there is no time limit within which Billing Authorities must determine retrospective changes in liability."

15. Before the tribunal the applicant appeared to be saying the respondent council was not entitled to recover the shortfall arising. He said that it should bear the consequences. However the tribunal considered it was entitled to conclude that the council had acted on information supplied by the applicant.
16. Miss Hall has persuaded me that the tribunal was entitled to uphold the council's decision to change the discount with retrospective effect. The applicant's liability to pay the council tax is determinable each day and not on a once and for all basis at the commencement of each financial year. Section 2 (1) provides:

"The amount of council tax payable in respect of any chargeable dwelling on any day shall be subject to a discount equal to the appropriate percentage of that amount if on that day ..... "

and it sets out the possibilities.

17. In the circumstances of this case the tribunal was entitled to conclude that council tax was payable on the basis that the property was the applicant's main residence from 23 July 1999. The retroactive adjustment to be made was only from 9 October 2003.
18. Regulation 24 (1) of the Council Tax (Administration and Enforcement) Regulations 1992 provides:

"If the chargeable amount proves to be greater than the estimated amount [that is reference to the council tax liability] an additional sum equal to the difference between the two shall, on the service by the billing authority on the liable person of a notice stating the chargeable amount, be due from him to the authority on the expiry of such period (being not less than 14 days) after the day of issue of the notice as specified in it."

The reference to "estimated amount" is a reference to the fact that the amount may be assessed on the basis of certain assumptions. That appears from paragraph 20 (2) (a) of the Regulations which defines that amount as -

"the billing of the estimate of the chargeable amount made in respect of the relevant year or part of a year on assumptions referred to in paragraph (3). Those assumptions in paragraph (3) include, in paragraph (4), chargeable amounts and will continue to be subject to the issue of the notice."

19. In these circumstances I am satisfied that there is a power to make adjustment so as to correct the rate of discount allowed in any demand.
20. For these reasons I am satisfied that the tribunal was entitled to come to its conclusion in relation to retroactive adjustment of the discount. Accordingly the appeal will be dismissed.
21. MISS HALL: I have been asked to seek costs for today and the last hearing. At the last hearing we were adjourned for lack of court time. In fairness to the appellant, he served his late documents and in fact he was given costs thrown away of the day. But in terms of preparation - - those are my instructions, to seek costs in relation to preparation of those matters. A costs schedule has been served and lodged with the court, I understand.
22. MR JUSTICE LLOYD JONES: It has not reached me. That is not unusual.
23. MISS HALL: It provides for £2,251. That is one hearing of mine. It should be rounded down to £2,051. There is a figure that is wrong.
24. MR JUSTICE LLOYD JONES: Has Mr Daniels seen that?
25. MISS HALL: Yes. I think costs schedules were exchanged.
26. THE APPELLANT: I have not had it.
27. MISS HALL: I believe it was an exchange of e:mails.
28. THE APPELLANT: I have a costs schedule for the last hearing - I have not received one for today - dated 16 March.
29. MR JUSTICE LLOYD JONES: Miss Hall, your fee should be how much?
30. MISS HALL: For today it is £500. I do not think my fee could be charged from the last time.
31. MR JUSTICE LLOYD JONES: How much are you claiming for solicitors' time?
32. MISS HALL: That is my only copy. (Handed to judge)
33. MR JUSTICE LLOYD JONES: It is all charged at rates of an associate. Is that right?
34. MISS HALL: I think that is right.
35. MR JUSTICE LLOYD JONES: It is charged at a rate of £55 (?) an hour, 10 hours. Why 10 hours attendance at the hearing?
36. MISS HALL: My apologies. That would have been when my solicitor did attend on the last occasion. That should not be included.
37. MR JUSTICE LLOYD JONES: Why six-and-a-half hours on documents?
38. MISS HALL: I understand that there was an original skeleton argument was drafted by those instructing me in preparation for a hearing. There was a supplementary skeleton argument drafted by myself.
39. MR JUSTICE LLOYD JONES: What have I seen, the supplementary

one?

40. MISS HALL: Yes. It has been quite a complex area for those instructing me with the retrospectivity. There have been calculations and obviously there have been matters between those instructing me, the council and the appellant which would have to have been considered by those instructing me, and bundles were sent to the council.
41. MR JUSTICE LLOYD JONES: Mr Daniels, do you accept that you should pay these costs today?
42. THE APPELLANT: I have only had a statement of costs for the last hearing, not today's hearing.
43. MR JUSTICE LLOYD JONES: The first question is - forget about the figures for a moment - should you pay costs at all? The general rule is whoever loses pays the costs. Is there anything you want to say about that?
44. THE APPELLANT: My own view is that the council did not act properly. They could have acted sooner, and had they done so it could have prevented this. On that basis there should be no costs.
45. MR JUSTICE LLOYD JONES: I am against you on that. You will pay some costs. The total amount of costs which is claimed on this summary statement of costs is certainly excessive. Their estimate is £2,051. I am minded to allow counsel's fee of £500 and to allow five hours of preparation by solicitors at £55. What do you say about that?
46. THE APPELLANT: Sorry?
47. MISS HALL: I am minded to allow £500 which is counsel's brief fee for today and to allow solicitors five hours of preparation.
48. THE APPELLANT: That would be £700, would it?
49. MR JUSTICE LLOYD JONES: Yes, more.
50. THE APPELLANT: As the claim was only in the region £900 total, I would say perhaps a little bit less than that.
51. MR JUSTICE LLOYD JONES: You say it is disproportionate?
52. THE APPELLANT: Yes, £650.
53. MR JUSTICE LLOYD JONES: Thank you both. Is there anything else you want to say about that?
54. MISS HALL: No.
55. MR JUSTICE LLOYD JONES: I am going to make a summary assessment of costs. I will assess these costs summarily in the sum of £500 for counsel's fee plus five hours in total for solicitors' time at £55 per hour.
56. MISS HALL: Is that plus VAT? It is sought. I understand it is a local authority. It seems it is just clarifying - - - - -
57. MR JUSTICE LLOYD JONES: Why is it not on - - - - -
58. MISS HALL: Those instructing me have put it on the costs schedule. That is not say ordinarily VAT would not be claimed in these circumstances.
59. MR JUSTICE LLOYD JONES: Yes, because they have to pay it on their brief fee. The appeal will be dismissed. The costs summarily assessed at £775 plus VAT. Is that correct?
60. MISS HALL: Yes.
61. MR JUSTICE LLOYD JONES: Thank you both for your assistance.