Council tax – Enforcement – Costs – Local authority obtaining council tax liability order against claimant – Defendant magistrates making order for costs reasonably incurred in enforcement process – Claimant applying for judicial review of costs order – Whether costs order lawfully made – Whether properly reflecting costs of enforcement – Claim allowed
The claimant was a retired clergyman and an active campaigner on issues affecting the rights of those on low incomes, including the effect of cuts in council tax and other benefits. He became increasingly concerned about the level of enforcement costs being levied by the local authority on people who had fallen behind with their council tax, which seemed to him to be disproportionate to the likely actual costs of obtaining liability orders. The claimant refused to pay his own council tax as a matter of civil disobedience so that he could experience the enforcement process for himself and investigate the procedures used and the basis upon which the costs claimed by the interested party were calculated.
The local authority applied for a liability order against the claimant under regulation 34 of the Council Tax (Administration and Enforcement) Regulations 1992. The defendant magistrates made a council tax liability order in relation to sums owed and awarded costs of £125 in favour of the local authority. The claimant challenged the award of costs. When the magistrates refused to state a case for the opinion of the High Court, the claimant applied for judicial review.
The claimant contended that the local authority had produced insufficient evidence to show that the costs they claimed had been “reasonably incurred… in obtaining the order” as required by regulation 34(7)(b) of the 1992 Regulations. The central issue was what was required, prior to making an order for the costs claimed, to satisfy the court that the requirements of the regulation had been met.
Held: The claim was allowed.
(1) Although the proceedings before the magistrates were civil in nature, the provisions of the Civil Procedure Rules (CPR) regarding assessment of costs did not apply to them. Instead, the matter of costs had to be decided in accordance with the 1992 Regulations, which, in contrast with the CPR, contained no provisions requiring the costs to be reasonable or proportionate or any requirement that doubt be resolved in favour of the paying party. As a matter of straightforward construction of regulation 34(7), the magistrates had to be satisfied: (i) that the local authority had actually incurred the costs that they claimed; (ii) that the costs in question were incurred in obtaining the liability order; and (iii) that it was reasonable for the local authority to have incurred them. There had to be a sufficient link between the costs in question and the process of obtaining the liability order. It would, for example, be impermissible to include in the costs claimed any element referable to the costs of executing the order after it was obtained, or to the overall administration of council tax in the area concerned.
(2) In principle, the intention in the 1992 Regulations was to enable the local authority to recover the actual cost to them of utilising the enforcement process under regulation 34, which was bound to include some administrative costs, as well as any legal fees and out of pocket expenses, always subject to the overarching proviso that the costs in question were reasonably incurred. However, bearing in mind the court’s inability to carry out any independent assessment of the reasonableness of the amount of those costs, the 1992 Regulations had to be construed in such a way as to ensure that the costs recovered were only those that were genuinely attributable to the enforcement process.
(3) It was a well-established public law principle that, where a public authority had to make a decision, they had to know, or have been told, enough to ensure that nothing was left out of account that it was necessary and legally relevant for them to know. The claimant had asked for information as to how the costs had been calculated and it had not been forthcoming. Nor had the magistrates had that information before them. It was not good enough for them to have been told in general terms that the costs had something to do with administrative time and the number of people who were involved in the process for making the application. Nor was it good enough for them to have been told that some arrangement or agreement had been reached in 2010 between the interested party and the clerk to the justices about the level of the costs without carrying out any investigation of what the agreement was and the basis for it. Looking to see whether the costs were broadly in line with costs being charged by other local authorities was not enough to discharge the court’s obligations.
Helen Mountfield QC and Eloise Le Santo (instructed by the Bar Pro Bono Unit) appeared for the claimant; the defendant did not appear and was not represented; Josephine Henderson (instructed by the legal department of Haringey London Borough Council) appeared for the interested party.
Eileen O’Grady, barrister
Read the transcript of R (on the application of Nicolson) v Tottenham Magistrates’ Court
