Liability orders — Magistrates setting aside liability orders — Claimant council challenging decision by judicial review — Whether magistrates exceeding jurisdiction — Whether judicial review appropriate form of proceedings — Claim allowed
Three liability orders were made against the interested party in respect of unpaid non-domestic rates that were said to be owing to the claimant council. The interested party disputed his liability to pay the rates on the property in question, but he did not appear at any of the three hearings in the magistrates’ court. The interested party failed to comply with the statutory demand and the council served a bankruptcy petition. However, he obtained an adjournment of the bankruptcy proceedings, which enabled him to apply to set aside the liability orders.
On that application, the magistrates found that the interested party’s responsibility for the property was the subject of confusion, and that, because he was often out of the country, he had been relying on the council to inform him of the hearings at which the liability orders were made. The magistrates held that the orders should therefore be set aside, and a fresh hearing held to determine the issue of liability. The bankruptcy proceedings were subsequently adjourned again to allow the council to challenge the magistrates’ decision by way of judicial review.
In the judicial review claim, the council contended that the magistrates had exceeded their limited powers to reopen the liability orders and had therefore acted outside their jurisdiction. The magistrates conceded this. However, the interested party opposed the claim, contending that: (i) any challenge to their decision should have proceeded as an appeal by way of case stated; and (ii) in any event, the magistrates had properly exercised their discretion to set aside the orders.
Held: The claim was allowed.
1. Although the appropriate procedure for challenging the magistrates’ decision was an appeal by way of case stated, the court retained the power, in the exercise of its judicial review jurisdiction, to quash any such decision that was unlawful. Judicial review proceedings would be most appropriate where a procedural impropriety was alleged. In other cases, the court might refuse relief on the ground that proceedings by way of case stated were more appropriate, but the bar was discretionary, not mandatory: R v Hereford Magistrates’ Court, ex parte Rowlands [1998] QB 110 applied. In the present case, the court would, in the exercise of its discretion, permit the judicial review claim to proceed. Unless prejudice had been caused to a party, or there was some other good reason not to permit a party to proceed by way of judicial review, the court should be reluctant to cause a good claim to be defeated by an error as to the form of the proceedings: R (on the application of A) v Leeds Magistrates’ Court [2004] EWHC 554 (Admin) distinguished.
2. Although a magistrates’ court had the power to set aside a liability order, that jurisdiction could not be exercised simply because a defendant disputed his liability to pay. In general, a magistrates’ court should not set aside a liability order unless satisfied that, in addition to there being a genuine and arguable dispute as to the defendant’s liability: (i) the order had been made as a result of a substantial procedural error, defect or mishap; and (ii) the application to set aside had been made promptly once the defendant had learned that the order had been made, or had had notice that it might have been made. In the present case, the magistrates had not properly considered either of those questions, and their decision would be quashed.
Iain O’Donnell (instructed by the solicitor to Brighton and Hove City Council) appeared for the claimants; Patrick Hamlin (instructed by Paul Gromett & Co) appeared for the interested party; the defendants did not appear and were not represented.
Sally Dobson, barrister
