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 WC2A 2LL
		20 July 2017

1. THE DEPUTY JUDGE: This is a renewed oral application for permission to apply for judicial review, permission having been refused on the papers by Sir Ross Cranston, sitting as a judge of the High Court, on 14 June 2017. The claimant, Mr Morley, represents himself. The defendant, Surrey Heath Borough Council, is represented by Ms Parekh. I am grateful to them both for their assistance.
2. I have carefully read the documents in this case, including the claim form, Mr Morley's responses, his skeleton argument and the documents that he has handed up. If I may say so, he has put his case very clearly both in writing and orally.
3. The issue in this case concerns the amount of costs which a local authority is entitled to charge to a person who has not paid their Council tax in circumstances in which a summons is issued for enforcement proceedings but the outstanding tax is paid before the application proceeds to court.
4. On 1 February 2017, Mr Morley received a summons for arrears of council tax from Surrey Heath Council. The practice of Surrey Heath Council (which I expect is common amongst local authorities) is for the council to include in the summons a claim for the council's administration charges and the court's costs. The amount sought was £80 for the authority's costs and £3 for the court's fee.
5. Mr Morley challenges this figure on the basis that this may well be the appropriate figure for costs if the matter went to court and the court issued a liability order but since he had paid the outstanding council tax as soon as the summons was received the only cost that the council has actually incurred would be the cost of drafting, printing and sending a summons, which would be considerably less than the £80, and indeed he quantifies it at around about £3. He points out that there is difference in time between the date of issuing the summons and the court date. He also points out that half the people who are summonsed pay the arrears between the summons and before the court date takes place. He also points out that the back of the summons document says the following:

"The amount due is shown on the front of this summons, including £83 cost incurred by this authority in instituting proceedings for the recovery of council tax. If payment is not made in full including the costs before the court hearing an application will be made to the magistrates for a liability order to be granted."

6. As for the court fee, Mr Morley say that the authority should not have claimed the court fee as such a fee is only levied when a liability order is issued and that did not happen in his case. Mr Morley has declined to pay the £83 claimed and contends that the council has acted unlawfully in seeking it.
7. The relevant statutory provision which empowers the council to recover costs is Regulation 34 of the Council Tax (Administration and Enforcement) Regulations 1992 made under the Local Government Finance Act 1992. Regulation 34(1) states that:

"If an amount which has fallen due ... is wholly or partly unpaid ... the billing authority may ... apply to a magistrates' court for an order against the person by whom it is payable."

Regulation 34(2) says that:

"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."

The key provision for present purposes is Regulation 34(5), which states that:

"If, after a summons has been issued in accordance with paragraph (2) but before the application is heard, there is paid or tendered to the authority an amount equal to the aggregate of—

(a)the sum ... outstanding ... ; and

(b)a sum of an amount equal to the costs reasonably incurred by the authority in connection with the application up to the time of the payment or tender,

the authority shall accept the amount and the application shall not be proceeded with."

8. So, the obligation is to tender an amount equal to the costs reasonably incurred by the authority in connection with the application up to the time of payment or tender.
9. The question of how costs reasonably incurred are to be calculated under Regulation 34(5) was considered obiter by Andrews J in the case of Nicholson, R(on the application of) v Tottenham Magistrates' Court [2015] EWHC 1252 (Admin). She said that the legislative intention was to recover the actual costs of the enforcement process but she recognised that it would not be reasonable or practicable for a local authority to work out individually the costs that were incurred in each case in enforcement proceedings for non-payment of council tax. In paragraph 46 of the judgment, she expressed the view that it may be a legitimate approach for a local authority to calculate and aggregate the relevant costs it had incurred in the previous year and divide it by the previous or anticipated number of summonses over 12 months so as to provide an average figure which could be levied across the board in standard cases. The approach suggested by Andrews J was approved by the Divisional Court in the case of Nicholson v Grant Thornton [2016] EWHC 710 (Admin).
10. In my view, Andrews J is plainly right in the approach that needs to be taken. It is inevitably somewhat rough and ready because it is simply not practicable to work out the exact figures for any particular individual.
11. Mr Morley's point is that subparagraph (5) makes clear that the individual is only liable to pay the costs reasonably incurred up to the time of the payment or tender and he says that if the matter has not got as far as a court order the costs would be lower and so the figure of £80 plus £3 is not a reasonable figure for the costs actually incurred.
12. I agree that it is clear from Regulation 35(5) that the local authority is only entitled to the costs actually incurred up to the time of payment or tender; however, in my judgment, there are no valid grounds for suspecting that this is not what Surrey Heath Council has done. The point is that the costs that the council incurs in enforcement proceedings are front-loaded and they are incurred within the period leading up to the issue of the summons.
13. Helpfully, the defendant council has included a breakdown of the way in which the charges are calculated in an appendix to the acknowledgement of service. This appendix shows that the council's approach to the calculation of costs is on an averaging basis along the lines proposed by Andrews J.
14. Moreover, the appendix shows that the figure of £80 is calculated by reference to the cost to the council of issuing a summon. The bulk of the costs are staff salaries and general overheads. The sum of £3 is the court fee for issuing the summons and those courts costs are incurred on the date that the summons is signed not on the date subsequently when the court makes the order if that becomes necessary.
15. In light of the above, it seems to me to be clear that the approach taken by the council to calculating costs is the right one and is consistent with Regulation 34(5). It is not right to think that the only costs actually incurred in Mr Morley's case were the costs of printing the summons, putting it in a letter and postage.
16. In Mr Morley's skeleton argument, he said that at the time when he paid his arrears no liability order had been applied for and so no court fee had been incurred by the local authority and, to take the language from the summons form, at the time when a payment was made no proceedings had been instituted.
17. This is a misunderstanding because the act of issuing the summons is the act of issuing proceedings and, as I have said, the work for which the costs are being recovered has already been done.
18. I was slightly concerned about whether it was appropriate to charge the £3 for the court's cost but I am satisfied on the evidence before me that that is also right because that £3 is incurred when the summons is issued and not when the hearing takes place and that, it seems to me, makes sense because that is the point at which the court does the work and incurs the expense.
19. I should add that there was, rather faintly, if I may say so, a point taken that the application was out of time because it was slightly outside 3 months, indeed only one day outside 3 months.
20. Had I been inclined to grant permission to proceed, I would have not been inclined to dismiss the claim purely on that ground.
21. But, for the reason that I have given, in my view this claim is unarguable and so the claim for judicial review is dismissed.
22. I see that there was an order for costs made on a previous occasion by the former Cranston J, now Sir Ross Cranston, not for the full amount claimed but for the sum of £500. Unless I hear submissions to the contrary, that order will stand.
23. That is the decision, Mr Morley.
24. MS PAREKH: My Lord, I am instructed to ask for the costs of this hearing. I believe a schedule of costs was emailed into the court.
25. THE DEPUTY JUDGE: On what basis are you seeking the costs of this hearing?
26. MS PAREKH: I am instructed that the position had been explained to Mr Morley that the claim was entirely hopeless and should not have been proceeded with.
27. THE DEPUTY JUDGE: I do not need to hear form you, Mr Morley.
28. An application has been made by counsel on behalf of the borough council for costs of her attendance and costs incurred in relation to today's hearing on the basis that the position had been made absolutely clear to Mr Morley and his claim was totally hopeless.
29. I am not going to award costs of today's hearing. The usual practice in this court is that a successful defendant at the permission stage receives the costs of preparing the acknowledgement of service not the costs of attending to the hearing and I do not see any good reason to depart from that practice today. Mr Morley had a genuine concern about this matter and he was entitled to renew his application in this court.
30. That reminds me that I have not deal with one matter, which was that Mr Morley asked me to rule that there had been criminal offences committed on behalf of the council and I should make clear in open court (1) that that is not the function of this court; this court deals with applications for judicial review but (2) on the basis of the evidence that I have seen and the legal considerations that I have taken into account there is absolutely no ground whatsoever for an allegation of fraud to be made against the council. They have behaved perfectly properly in levying these charges.
31. THE CLAIMANT: Thank you, your Lordship. Very interesting. £500 well spent.
32. THE DEPUTY JUDGE: I am glad to hear it, Mr Morley.