Magistrates – Jurisdiction – Liability order – Magistrates’ court making liability order at request of respondent rating authority in respect of demand for business rates – Appellant seeking to set aside orders as premises sub-let and summons not properly served – Whether magistrates having jurisdiction to set aside liability order – Appeal allowed in part
The appellant and his brother occupied premises from which they carried out a business through a limited company. The company was liable to pay business rates to the respondent rating authority which demanded sums for the period 31 July 2007 to 31 March 2011. At some date after March 2009, the company ceased trading and the appellant sublet the premises on a series of short term tenancies. The respondents considered that both the appellant and the company were liable for the rates in question under section 43 of the Local Government Finance Act 1988, and pursued them for payment. When they failed to pay the sums claimed, the respondents made a complaint to the magistrates’ court of non-payment of the rates and obtained three liability orders against the appellant and the company for around £91,000.
The respondents subsequently accepted that the appellant had not been in occupation for whole time so that he was not liable to pay the rates for the entire period. The sum demanded was reduced to around £62,000. The appellant applied to set aside the orders. The magistrates accepted that, at the relevant time, the appellant had sub-let the premises and had not been in occupation but took the view that they had no jurisdiction to hear applications to set aside liability orders. The appellant appealed by way of case stated.
The question for the court was whether the fact that a defendant had no knowledge of a hearing at a magistrates’ court at which a liability order was made against him, because he had sub-let his business premises to which the summons had been sent and so was no longer in occupation, amounted to a substantial procedural error, defect or mishap so as to allow the magistrates to set aside that error.
The appellant contended that he had not been served with a summons in accordance with regulation 13(2) of the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 (SI 1058/1989) as the premises had been sub-let at the time that the summons had been served. Therefore, as proper service was a prerequisite to a liability order being made, the magistrates had had no jurisdiction to make liability orders at all. The respondents argued that, as regulation 13(2)(d) referred to service at “a” place of business rather than “the” place of business of the person in question, any place of business of the appellant would suffice. In this case, the appellant was carrying on business at the premises by collecting rent from the tenants.
Held: The appeal was allowed in part.
It would be unnecessary and unwise for the Divisional Court to define the extent of the magistrates’ jurisdiction to set aside liability orders. The much narrower point to be decided was whether the order had ever properly been made at all which gave rise to the question whether in fact the premises had been a place of business of the appellant at the relevant time. The court was not prepared to accept the submission that the appellant carried on business at the premises by collecting rent from tenants as necessarily correct without evidence that that had been the case. Although the premises had been the subject of the appellant’s business of sub-letting, without further evidence, they had not been a place of his business. If he had collected rent there it might be said that the premises had been “a place of business” of the appellant for the purposes of regulation 13(2)(d) but to describe premises leased out as “a place of business of the landlord” would be an abuse of language: Liverpool City Council v Pleroma Distribution Ltd [2002] EWHC 2467 (Admin); [2002] PLSCS 256, R (on the application of Brighton and Hove City Council) v Brighton and Hove Justices [2004] EWHC 1800 (Admin); [2004] PLSCS 252 and R (on the application of Mathialagan) v Southwark London Borough Council [2004] EWCA Civ 1689; [2004] PLSCS 292 considered.
In all the circumstances, it was not possible to give a straight answer to the question posed. If the summons had not been properly served, the magistrates had had no jurisdiction to make the order and the order ought to be set aside, subject to possible argument as to whether the right had been lost to set aside the order as the application had not been made in time. The question of whether or not regulation 13(2)(d) had been fulfilled would have to be investigated by the magistrates by hearing evidence on the matter. Accordingly, the matter would be remitted to the magistrates with a direction to hear evidence relating to the summons in order that they might determine whether it had been properly served. If not, the orders would have to be set aside.
Roger Offenbach (instructed by YVA Solicitors LLP) appeared for the appellant; James Couser (instructed by Westminster City Council) appeared for the respondents.
Eileen O’Grady, barrister
Magistrates – Jurisdiction – Liability order – Magistrates’ court making liability order at request of respondent rating authority in respect of demand for business rates – Appellant seeking to set aside orders as premises sub-let and summons not properly served – Whether magistrates having jurisdiction to set aside liability order – Appeal allowed in partThe appellant and his brother occupied premises from which they carried out a business through a limited company. The company was liable to pay business rates to the respondent rating authority which demanded sums for the period 31 July 2007 to 31 March 2011. At some date after March 2009, the company ceased trading and the appellant sublet the premises on a series of short term tenancies. The respondents considered that both the appellant and the company were liable for the rates in question under section 43 of the Local Government Finance Act 1988, and pursued them for payment. When they failed to pay the sums claimed, the respondents made a complaint to the magistrates’ court of non-payment of the rates and obtained three liability orders against the appellant and the company for around £91,000. The respondents subsequently accepted that the appellant had not been in occupation for whole time so that he was not liable to pay the rates for the entire period. The sum demanded was reduced to around £62,000. The appellant applied to set aside the orders. The magistrates accepted that, at the relevant time, the appellant had sub-let the premises and had not been in occupation but took the view that they had no jurisdiction to hear applications to set aside liability orders. The appellant appealed by way of case stated. The question for the court was whether the fact that a defendant had no knowledge of a hearing at a magistrates’ court at which a liability order was made against him, because he had sub-let his business premises to which the summons had been sent and so was no longer in occupation, amounted to a substantial procedural error, defect or mishap so as to allow the magistrates to set aside that error.The appellant contended that he had not been served with a summons in accordance with regulation 13(2) of the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 (SI 1058/1989) as the premises had been sub-let at the time that the summons had been served. Therefore, as proper service was a prerequisite to a liability order being made, the magistrates had had no jurisdiction to make liability orders at all. The respondents argued that, as regulation 13(2)(d) referred to service at “a” place of business rather than “the” place of business of the person in question, any place of business of the appellant would suffice. In this case, the appellant was carrying on business at the premises by collecting rent from the tenants. Held: The appeal was allowed in part. It would be unnecessary and unwise for the Divisional Court to define the extent of the magistrates’ jurisdiction to set aside liability orders. The much narrower point to be decided was whether the order had ever properly been made at all which gave rise to the question whether in fact the premises had been a place of business of the appellant at the relevant time. The court was not prepared to accept the submission that the appellant carried on business at the premises by collecting rent from tenants as necessarily correct without evidence that that had been the case. Although the premises had been the subject of the appellant’s business of sub-letting, without further evidence, they had not been a place of his business. If he had collected rent there it might be said that the premises had been “a place of business” of the appellant for the purposes of regulation 13(2)(d) but to describe premises leased out as “a place of business of the landlord” would be an abuse of language: Liverpool City Council v Pleroma Distribution Ltd [2002] EWHC 2467 (Admin); [2002] PLSCS 256, R (on the application of Brighton and Hove City Council) v Brighton and Hove Justices [2004] EWHC 1800 (Admin); [2004] PLSCS 252 and R (on the application of Mathialagan) v Southwark London Borough Council [2004] EWCA Civ 1689; [2004] PLSCS 292 considered.In all the circumstances, it was not possible to give a straight answer to the question posed. If the summons had not been properly served, the magistrates had had no jurisdiction to make the order and the order ought to be set aside, subject to possible argument as to whether the right had been lost to set aside the order as the application had not been made in time. The question of whether or not regulation 13(2)(d) had been fulfilled would have to be investigated by the magistrates by hearing evidence on the matter. Accordingly, the matter would be remitted to the magistrates with a direction to hear evidence relating to the summons in order that they might determine whether it had been properly served. If not, the orders would have to be set aside. Roger Offenbach (instructed by YVA Solicitors LLP) appeared for the appellant; James Couser (instructed by Westminster City Council) appeared for the respondents.Eileen O’Grady, barrister
