Rating – Business improvement district (BID) levy – Liability – Respondent local authority serving demand notice on appellant ratepayer for payment of BID levy without supplying information specified in para 3(2) of Business Improvement Districts (England) Regulations 2004 – District judge making liability order for payment – Appellant appealing – Whether failure to supply specified information rendering notice invalid – Appeal dismissed
In January 2017, the appellant became the landlord of the King William IV public house, 77 Hampstead High Street, London NW3, a property chargeable to the business improvement district (BID) levy. On 18 January 2019 he transferred the property to his daughter. Accordingly, under the Local Government Act 2003 he was “liable” for the BID levy apportioned so as to cover the period 1 April 2018 to 18 January 2019 in the sum of £642.00.
The recovery of BID levy was governed by regulation 15 of and Schedule 4 to the Business Improvement Districts (England) Regulations 2004: a liability order could not be made unless the magistrates’ court was satisfied that the BID levy claimed had become “payable” by the person named in the summons and had not been paid. A person who was liable to pay BID levy under the Local Government Act 2003 was not required to pay it to the billing authority unless a statutory “demand notice” was served on him requiring payment.
In the present case, a demand notice dated 13 April 2018 was served on the appellant by the respondent billing authority. A statutory “reminder” notice was sent to him on 8 August 2018. Because of non-payment, a summons seeking a liability order against the appellant was issued on 19 September 2018.
The district judge found that the respondent had failed to comply with para 3(2) of Schedule 4 to the 2004 Regulations. However, as the errors identified as reasons why para 3(2) had not been satisfied had amounted to a mistake, notwithstanding the failure to comply with para 3(2), the requirement in the demand notice for the appellant to pay the BID levy applied as if that notice was valid. Accordingly, the judge made the liability order. The appellant appealed by way of case stated.
Held: The appeal was dismissed.
(1) Paragraph 4(1) of the 2004 Regulations addressed failures to comply with certain of the requirements in Schedule 4. But it only dealt with the invalidity of a demand notice and, even then, only in relation to its non-compliance with para 3 (para 4(1)(a)). Within that provision only para 3(1) concerned requirements with which a demand notice had to comply. Provided that para 4(1)(b) and (c) were satisfied, the requirement to pay the amounts specified in the demand notice was treated as if the notice were valid.
Paragraph 4(2) only applied where para 4(1)(a), (b) and (c) were satisfied. Where a requirement to pay a BID levy applied because the demand notice was deemed to be valid under para 4(1), the billing authority had to issue to the person liable for that levy a statement of “the matters” which “were not contained in the notice and which should have been so contained”. That language made it plain that para 4(1) did not apply to a failure to comply with para 3(2), because the latter had nothing to do with the contents of a demand notice. Furthermore, para 4(1) did not apply to any non-compliance with a requirement which fell outside para 3(1).
However, para 4(1) did not apply so that a demand notice was deemed to be valid, unless “the amounts required to be paid under the notice were demanded in accordance with paragraph 3(1)” (para 4(1)(c)). That could only be a reference to the requirements in para 3(1)(b) and (c), namely that the notice had to state how the BID levy demanded was calculated for each hereditament, including the number of days for which the person served was liable. The upshot was that para 4(1) only had the effect of treating a demand notice as valid where the ground for invalidity arose from non-compliance with para 3(1)(a); i.e. the notice failed to state the address and/or the description of the hereditament to which it related.
(2) In the present case, the demand notice served on the appellant complied with all of the requirements of para 3(1) and so para 4(1) did not fall to be applied. It followed that the district judge should not have been asked by the parties to determine whether the errors which occurred in relation to non-compliance with para 3(2) amounted to a “mistake” within para 4(1)(b).
Accordingly, a complaint regarding non-compliance with paragraph 3(2) in respect of a single ratepayer would be incapable of rendering a demand notice invalid or of causing BID levy otherwise due from that person to become non-payable. That conclusion applied to the concepts of both “total invalidity” and “invalidity in the absence of substantial compliance” with para 3(2). Instead, a possible remedy for a failure to comply with para 3(2) could be an application for judicial review.
(3) If an alternative view were to be taken that a demand for payment of BID levy might be invalid on the grounds of substantial non-compliance with para 3(2), the appellant had been unable to point to prejudice he had suffered flowing therefrom which might be relevant to the provisions dealing with demand notices or liability to pay BID levy in the present case.
(4) Only if para 4(1)(a) of Schedule 4 to the 2004 Regulations were to construed to include non-compliance with para 3(2) could the issue arise whether the respondent’s non-compliance in this case was caused by a mistake within the meaning of para 4(1)(b). However, there was no basis for criticising the district judge’s finding on that point as being wrong in law. The legislation did not qualify mistake so as to restrict that word to errors of fact, or to exclude an error of law in the application of the provisions in Schedule 4 for the supply of information under para 3(2). The district judge found that there was no evidence of any deliberate attempt to breach or circumvent the legislation, a finding to which there had been no challenge. Accordingly, the appellant was obliged to pay the BID levy.
W Robert Griffiths QC and Nicola Strachan (instructed by Clarks Legal LLP) appeared for the appellant; Asa Jack Tolson (instructed by Camden London Borough Council) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of McGrath v Camden London Borough Council
