[1] Two points here:

(1) In Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058), reg.3 is entitled ‘Interpretation and application of Part II’ and includes:

‘“ratepayer” in relation to a chargeable financial year and a billing authority means a person liable to pay an amount under section 43 or 45 of the Act to the authority in respect of the year;’

(2) for brevity in this article, the word 'ratepayer' will be used without repeatedly using the word 'alleged' in front of it. But of course, the recipient of the demand notice may indeed only be an alleged ratepayer/demandee. He may in fact not be the ratepayer because the Local Government Finance Act 1988 does not actually impose any obligation to pay Business Rates upon him/her. 

[2] It is helpful to consider the process by which a liability order is obtained.

Typically, the ratepayer will receive a 'demand notice', then a 'further notice' and/or a 'final reminder', before formal proceedings begin. Sometimes a 'final notice' is served, though this is not required by the rules. There can also be re-calculation notices. Formal proceedings are initiated by the Billing Authority (i.e. the local authority) applying to the local Magistrates Court, by way of a ‘Complaint’. The Magistrates Court will respond to the Complaint, by issuing a summons against the person named in the Complaint, requiring that person to attend the Magistrates Court to explain why the sum has not been paid.

Where this process runs as it should, the ratepayer will receive the summons at least 14 days before the first hearing is due to take place, the ratepayer can then attend (whether personally or through a representative) and will actively actively participate in the Court procedure.

In summary therefore, the stages are:

(a) Pre-Formal Proceedings: 

(i) Demand Notice; 

(ii) Reminder Notice under reg.11(1) of the 1989 Regulations, or a Further Notice under reg.8(1) of the 1989 Regulations (or both sequentially, as permitted by reg.11(3) of the 1989 Regulations)

[(iii) Re-calculation notices - potentially, under reg.8(3) to (7) of the 1989 Regulations, if applicable]

[(iii) Final Notice - though this stage is not actually required; nor prescribed in the 1989 Regulations]

(b) Formal Proceedings:

(i) Complaint to the Magistraties Court; 

(ii) Summons issued;

(iii) First hearing. 

The formal proceedings will then continue, until final determination of the Complaint (granting the liability order or dismissing the Complaint), unless it is discontinued/withdrawn etc ('not proceeded with').

Judicial overviews of the system were given in:

(1) Chowdbury v Westminster City Council [2013] EWHC 1921 ('Chowdbury'); and

(2) North Somerset DC v Honda Motor Europe Ltd [2010] EWHC 1505 ('Honda').

(3) Atos IT Services Ltd v Fylde BC [2020] EWHC 647 ('Atos IT')

Taking those in turn:

(1) Chowdbury

In Chowdbury, Aikens LJ gives an overview on the process of obtaining a liability order:

'6…The Regulations for the collection and enforcement of business rates are to be found in the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 (“the Regulations”). These have been amended from time to time, both before and after 2010…

7 Under Part II of the Regulations, the local rating authority, known as “the billing authority”, will serve on a “ratepayer” a “demand notice” for the business rates payable in respect of a particular “hereditament”. Part III of the Regulations deals with enforcement if non-domestic rates are not paid by the ratepayer. Broadly, under Regulation 11 a billing authority has to serve on the person who is liable to pay the non-domestic rates a “reminder notice”. Then, under Regulation 12 , if the non-domestic rates are not paid in the 7 days following service of a reminder notice, the billing authority may apply to a Magistrates' Court for an order against “the person by whom” the amount due is payable. This order is known as a “liability order”.

8 Regulation 12(2) and 12(5) provide:

“(2) 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.

(5) The court shall make the order if it is satisfied that the sum has become payable by the defendant and has not been paid.”

Regulations prescribe how the ratepayer can be served with the summons. Regulation 13(2A) stipulates that no liability order shall be made pursuant to a summons issued under Regulation 12(2) unless 14 days has elapsed since the day on which the summons was served. It is therefore clear that service of the summons is a prerequisite to obtaining a liability order.

The Court of Appeal in R (on the application of Mathialagan) v Southwark LBC [2004] EWCA Civ 1689, set out the 'normal procedure' (at least in 2004), at paragraph 20:

The normal procedure is as follows:-

i. The local authority is represented by the same person on each occasion. That person is not legally qualified but has been trained and has shadowed an experienced advocate. A typical hearing at the beginning of the financial year is concerned with up to 1,000 summonses. As the year progresses, and liability orders are made or debts discharged, the number of cases to be heard on each occasion diminishes significantly.

ii. The documents described below are prepared in advance of each hearing and accompany the local authority representative to court.

iii. There is the complaint which is computer-generated by the local authority, a copy of which is faxed to the court and returned by fax.

iv. There is a declaration that the relevant summons has been posted and the proof of posting itself.

v. There is then a very extensive court list which is prepared by the local authority and which is handed to the district judge or lay bench (each member of a lay bench receives a copy). A copy is also provided to the court clerk. The procedure is that the magistrate will make a manuscript endorsement on the right-hand of the list in respect of any case which does not result in a liability order being made that day or which carries any additional orders. For example, where a case is adjourned, the adjournment is endorsed or where a costs order which is less or more than the standard costs order of £100 is made, a specific endorsement is made.

vi. In a simple case, where a debtor does not attend, there has been no communication by the debtor and standard costs are awarded on the summons, the magistrate will make no endorsement. The right-hand of the list will remain blank.

vii. At the conclusion of the hearing, the bench members or district judge will return the list or lists to the local authority representative who will then telephone Liberata plc in order to confirm the outcome of each case which did not result in a standard liability order. For all cases where a standard liability order was made, a notification of liability will be automatically computer-generated and despatched by post that night (see pp. 35 and 36 of the appeal bundle). In all other cases, a letter will be drafted and sent to the debtor (see pp. 139 and 140 of the appeal bundle).

viii. The court list is then returned to the offices of Liberata plc and archived.

ix. The court list which is in the possession of the court clerk is endorsed in manuscript during the hearing by the clerk and is retained by the court and archived.

x. There is also an evidence list. This document summarises the dealings between the local authority and each debtor.

xi. There is further an extract from the valuation list which is a large compendium of all business rate valuations for properties in the borough. The extract will show the subject premises.

xii. There is a declaration of authority. In addition, the local authority representative is sworn at the commencement of each hearing, and there is a further form of authority which is recited in addition to the oath being given.

xiii. There is then signed by the district judge or magistrate at the conclusion of the hearing, a form of order in favour of LBS, but for the purpose of authorising a bailiff a liability order is drawn. This document is generated by the local authority's computer but is not sent to the debtor. It is only printed if a decision has been taken to instruct the bailiff and is used solely for the purpose of confirming to the bailiff that he has authority to act. It is printed off the local authority's computer system without any further reference.'

The Court of Appeal then went on to criticise the blurred boundaries between Court and Billing Authority activities, at paragraph 21(ii):

ii) I find it very surprising that the only document with a court stamp (under xiii) is not produced by the court, but is created automatically by the local authority's software, even though the local authority is a party to the proceedings. (The example before us adds, under the court stamp, the words "Justice of the Peace for the area aforesaid (or by order of the Court Clerk of the Court)". The intended significance of these words is not clear to me.) This document apparently is used only for the purpose of confirming to the bailiff that he has power to act. However, for that purpose the rules require no more than "the written authorisation of the authority" (Non-domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 r.14(5)). It seems both unnecessary, and wrong in principle, for it to be presented as though it had been stamped by the court. Nothing turns on this point in the present case, and we have not heard any submissions about it, but it seems to me an aspect of the procedure which merits reconsideration.

Blackburne J in Dias v London Borough of Havering [2011] EWHC 172 (Ch) said at paragraph 37 'it is true that the liability order procedure is of a relatively summary nature, but it still has the basic hallmarks of a judicial process, and it cannot in my judgment be stigmatised as inherently unfair.'

Addressing an argument that the Magistrates Court liability order judicial procedure might not be human rights compliant, Chief Insolvency and Companies Court Judge Briggs said, in Tower Hamlets v Naris [2019] EWHC 886 (Ch), at paragraphs 23 and 34:

'In Dias v The London Borough of Havering [2011] EWHC 172 (Ch) Mr Justice Henderson, as he was, provided a thorough analysis of liability order procedure and enforcement. He explained:

“It is apparent from the provisions cited above that liability orders can be made only after a fairly elaborate procedure has been followed, and the defendant has been given an opportunity to explain why he has not paid. The court may make the order only if it is satisfied that the sum has become payable, and that it has not been paid. If the defendant thinks that the order has been wrongly made, he is in principle entitled to challenge it either by judicial review or by an appeal by case stated. In the present case, however, Mr Dias took no active steps to present his case to the court, nor did he challenge or appeal against either of the liability orders.”

It is self-evident that the description of the liability order procedure given by Henderson J extinguishes any argument that such orders are made in contravention of Article 6. Mr Naris does not explain why the tribunal was not independent or impartial. He does not argue that it was not established by law. He does not explain why the public hearing was not fair other than to say that [the Hereditament] did not exist and therefore he was not served. In my judgment his argument that there was a breach of Article 6 is without foundation.'

(2) Honda

In Honda, Burnett J gave an overview of the Business Rates system, but focused on the requirement to serve demand notices as soon as practicable after 1 April of the relevant year. At paragraphs 9 to 23, Burnett J said:

'The statutory scheme for the collection of business rates

The system of business rates is governed by the Local Government Finance Act 1988 [“1988 Act”] and Regulations made under it. Those include the 1989 Regulations. The system has two broad parts. The first is concerned with the preparation, maintenance and alteration of rating lists. Such lists identify hereditaments (that is property on which rates must be paid) and rateable values. This aspect of the system is administered by the Valuation Officer, an official of HM Revenue and Customs, in the Valuation Office Agency (“VOA”). The second part is concerned with the recovery of rates in accordance with the rating list. That aspect of the system is administered by the billing authority for the statutory area concerned, in this case the Council, North Somerset District Council.

The 1988 Act introduced an important change in the nature of business rates. Whilst they continued to be charged on the basis of local valuations and were collected locally, money raised by way of business rates was transmitted to a central pool controlled by Central Government for distribution according to a statutory formula. The 1988 Act also introduced the highly controversial community charge in substitution for domestic rates.

The statutory obligation on the VOA to maintain “local non-domestic rating lists” is found in Section 41(1) of the 1988 Act. The first list was required to be compiled on 1st April 1990 with subsequent lists being compiled on 1st April at the end of each five year period thereafter. This case is primarily concerned with the 2000 rating list. The content of local lists is specified by Section 42 of the 1988 Act. Section 43(1) governs liability to pay business rates. It provides:

“43 Occupied hereditaments liability

(1) A person (the ratepayer) shall as regards a hereditament be subject to a non-domestic rate in respect of a chargeable financial year if the following conditions are fulfilled in respect of any day in the year—

(a) on the day the ratepayer is in occupation of all or part of the hereditament, and

(b) the hereditament is shown for the day in a local non-domestic rating list in force for the year.”

Section 43 makes further provision for the calculation of the business rates to which the ratepayer will be subject.

Section 43 does not itself give rise to a duty to pay the rates to which the ratepayer is subject. That duty arises only following service of a notice under the 1989 Regulations.

Section 45 deals with liability for business rates on unoccupied premises (material in Mr. Graham's case). Subject to refinements to which it will be necessary to return when considering the facts of that case, the broad scheme at the material time was that the owners of unoccupied business premises were liable for 50% of the liability calculated pursuant to Section 43 . The position has since changed.

Section 49 provides express statutory provision for a billing authority to reduce any amount a person is liable to pay under Section 43 or Section 45 , or to remit the payment of the whole amount, if the authority is satisfied that the ratepayer would sustain hardship if such steps were not taken and it is reasonable to do so “having regard to the interests of persons liable to pay council tax set by it”.

Schedule 8 concerns the pooling of business rates, that is collection by Central Government of business rates through billing authorities. The approach to contributions required from billing authorities to Central Government is found in paragraph 4 of Schedule 8 of the 1988 Act which provides, as material, as follows:

(1) The Secretary of State may make regulations containing rules for the calculation of an amount for a chargeable financial year in relation to each billing authority (to be called its non domestic rating contribution for the year).

(2) The Rules shall be so framed that the amount calculated under them in relation to an authority is broadly the same as the total which, if the authority acted diligently, would be payable to it in respect of the year under Sections 43 and 45 above.”

The basic structure of the contribution system, which is subject to much further refinement in Schedule 8 itself and Regulations made thereunder, ensures that a billing authority pays to the central pool a sum equivalent to what ought to have been collected, assuming the billing authority had acted diligently, rather than any lesser sum actually collected.

Schedule 9 is concerned with “non-domestic rating administration”. It is given effect by Section 62 which provides:

“Schedule 9 below (which contains provisions about administration, including collection and recovery) shall have effect.”

Paragraph 1 of Schedule 9 enables the Secretary of State to make regulations containing “such provision that he sees fit in relation to the collection and recovery of amounts persons are liable to pay” in business rates. Paragraph 2(2) empowers the Secretary of State to make regulations which, amongst other things, concern the form and content of notices which specify the amount to be paid. The provisions in sub paragraph (2) originally included:

“(e) that the payee must serve a notice or notices on the ratepayer stating the amount payable or its estimated amount and what payment or payments he is required to make (by way of instalment or otherwise),

(f) that no payment on account of the amount payable need be made unless a notice requires it,

(g) that a notice and any requirement in it is to be treated as invalid if it contains prescribed matters or fails to contain other prescribed matters or is not in a prescribed form.”

This was the original form of paragraph 2(e) to (g). It is of note that sub-paragraph 2(g) empowered the Secretary of State to make regulations which specified that a notice that failed to contain prescribed matters was invalid. It was thus anticipated that absent such specification, the defective notice would not be automatically invalid. There was no express power to make a regulation specifying that a failure to comply with a time limit for serving a notice should result in invalidity. The power to make express provision for invalidity of defective notices itself begs the question whether that invalidity could be cured by serving a fresh notice which was compliant. Schedule 9 paragraph 2 was amended by the Local Government and Housing Act 1989 by substituting a new paragraph 2(g), together with paragraphs (ga) to (ge). They provide part of the answer:

“(g) that a notice must be in a prescribed form, (ga) that a notice must contain prescribed matters, (gb) that a notice must not contain other prescribed matters, (gc) that where a notice is invalid because it does not comply with regulations under paragraph (g) or (ga) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (e) or (f) above shall nevertheless have effect as if the notice were valid, (gd) that where a notice is invalid because it does not comply with regulations under paragraph (g) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to issue to the ratepayer a document in the form which the notice would have taken had it complied with regulations under paragraph (g) above, (ge) that where a notice is invalid because it does not comply with regulations under paragraph (ga) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to inform the ratepayer of such of the matters prescribed under paragraph (ga) above as were not contained in the notice.”

This alteration to Schedule 9 paragraph 2 demonstrates that Parliament considered that a notice which was not in the prescribed form, or failed to contain prescribed matters, would be invalid in some circumstances. Nonetheless, the purpose of paragraphs (gc) to (ge) is to enable arrangements to be put in place to ensure that the rates are paid. The underlying intention was that technical failings should not necessarily result in total invalidity. The Schedule remains silent on the question of invalidity for failure to comply with a time limit.

Paragraphs 3 and 4 of Schedule 9 enable the Secretary of State to lay Regulations making provision for the recovery of unpaid business rates by way of a liability order in the Magistrates Court (with distress, committal to prison, bankruptcy and winding-up proceedings to follow) or in a court of competent jurisdiction. Paragraph 7 of Schedule 9 is also of note. It confers a power of entry on a Valuation Officer for the purposes of discharging his functions under the legislation, but not on the billing authority. This is a feature of the scheme which Mr. Drabble relied upon in support of a submission that the task of a billing authority in identifying the occupier of premises, and thus the person to whom a notice should be sent, was far from easy.

The 1989 Regulations were made under Schedule 9 and Section 62 . Part 2 of the 1989 Regulations are concerned with “billing”. Regulations 4 and 5 are as follows:

4.— The requirement for demand notices

(1) For each chargeable financial year a billing authority shall, in accordance with regulations 5 to 7, serve a notice in writing on every person who is a ratepayer of the authority in relation to the year.

(2) Different demand notices shall be served for different chargeable financial years.

(3) A demand notice shall be served with respect to the amount payable for every hereditament as regards which a person is a ratepayer of the authority, though a single notice may relate to the amount payable with respect to more than one such hereditament.

(4) If a single demand notice relates to the amount payable with respect to more than one hereditament, subject to paragraphs 5 and 8 of Schedule 1 the amounts due under it, and the times at which they fall due, shall be determined as if separate notices were issued in respect of each hereditament.

5.— Service of demand notices

(1) Subject to paragraph (2), a demand notice shall be served on or as soon as practicable after–

(a) except in a case falling within sub-paragraph (b), 1st April in the relevant year, or

(b) if the conditions mentioned in section 43(1) or 45(1) of the Act are not fulfilled in respect of that day as regards the ratepayer and the hereditament concerned, the first day after that day in respect of which such conditions are fulfilled as regards them.

(2) Subject to paragraph (3), a demand notice may, if the non-domestic multiplier for the relevant year has been determined or set under Schedule 7 to the Act, be served before the beginning of the relevant year on a person with respect to whom on the day it is issued it appears to the billing authority that the conditions mentioned in section 43(1) or 45(1) of the Act are fulfilled (or would be fulfilled if a list sent under section 41(5) of the Act were in force) as regards the hereditament to which it relates; and if it is so served, references in this Part to a ratepayer shall, in relation to that notice and so far as the context permits, be construed as references to that person.

(3) A demand notice shall not be served before the authority has set amounts for the relevant year under section 30 of the Local Government Finance Act 1992 .”

It is common ground before me that no duty on the ratepayer to discharge his rates liability arises until a notice has been served under Regulation 5. There is thus, within the statutory scheme, a clear distinction between the liability for business rates created by Section 43, on the one hand, and the obligation to discharge that liability after service of a notice under the 1989 Regulations.

Regulation 12 and following are concerned with recovery of outstanding rates through the Magistrates Court or a court of competent jurisdiction, together with the ancillary enforcement procedures if a liability order made in the Magistrates Court is not satisfied. Finally, I should mention Regulation 23(1) which provides “any matter which could be the subject of an appeal under Regulations under Section 55 of the Act may not be raised in proceedings under this part”.

Section 55 of the 1988 Act (together with Regulations made thereafter) is concerned with alteration of lists. There are mechanisms which allow the owners and occupiers of a hereditament to dispute the content of the list. Notably, the rateable value set out in the list, upon which any notice served under the 1989 Regulations would be based, may be disputed. On various bases it might be suggested that the hereditament should be deleted from the list altogether or that other changes should be made. The statutory route of challenge in those circumstances involves first a proposal to the VOA with statutory rights of appeal to a Tribunal thereafter. The effect of Regulation 23(1) of the 1989 Regulations is to deny a ratepayer the opportunity to take a point to defeat enforcement proceedings which could have been raised by way of a statutory appeal.

The mechanisms for altering a list which are of relevance for the arguments advanced in this case are the mechanisms in respect of the 1995 and 2000 lists that were engaged on and after 1st April 2005. The VOA has power to alter the valuation list pursuant to its duty to maintain an accurate list. It also has power to alter the rating list pursuant to a proposal, and may be required to do so by a decision of a tribunal or court.

The VOA's direct powers arise under section 41 of the 1988 Act. Section 41(7) provides that:

‘A list must be maintained for as long as is necessary for the purposes of this Part, so that the expiry of the five year period for which it is in force does not detract from the duty to maintain it.’

However, by virtue of subordinate regulations the last effective date on which the VOA could make an alteration to the 2000 list was 31st March 2006: see the Non-Domestic Rating (Alteration of List and Appeals) Regulations 1993 (SI 1993/2911) [“the 1993 Regulations”]. Until that date, anyone (including a ratepayer) could have drawn an error to the attention of the VOA. If it was accepted as such by that date, the VOA could alter the list. Various protections operate in favour of those who might be adversely affected by such a unilateral change.

That power stands in contrast with the procedure which enables ratepayers to make proposals for the alteration of the list. Regulation 4C of the 1993 Regulations establishes a general rule that a proposal to alter the 2000 list could be made at any time before 1st April 2005. Whilst there are exceptions to that time limit, they do not apply in respect of any of the three defendants in these proceedings. That is a position accepted by the Council. In all three cases before the Court, the 2000 rating list was closed to proposals from 1st April 2005.'

(3) Atos IT

In Atos IT, Saini J said, at paragraphs 64 to 68:

'64....I ... need to complete my summary of certain other aspects of the current statutory regime which are relevant to additional grounds of appeal concerning remedies and jurisdiction in respect of claimed overpayments.

65. LGFA s62 and schedule 9 provide for administration of the tax by the making of regulations, namely the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 ("the 1989 C&E Regulations"). 

66. The broad scheme of these regulations is as follows: 

i) Part II (reg 3-9) governs 'billing'; Part III (reg 10-23) governs 'enforcement'; 

ii) The "amount payable" is defined for the purposes of Part II as follows: 

"the amount payable" for a chargeable financial year or part of a chargeable financial year in relation to a ratepayer, a billing authority and a hereditament means – (a) the amount the ratepayer is liable to pay to the authority as regards the hereditament in respect of the year or part under—(i) section 43 or 45 of [LGFA] "; 

iii) The billing authority (here, the Appellant Council) is required to serve a "demand notice" on every ratepayer for every chargeable year: reg 4(1) . This crystallises the ratepayer's liability into an obligation to pay the rates demanded: reg 7(6) ; 

iv) Where rates have been demanded and not paid then the billing authority may have recourse to the remedies in Part III, most often by making an application to a magistrates' court for a liability order ( reg 12 ) followed if necessary by committal (reg 16-17) or insolvency ( reg 18 ) proceedings; 

v) In such proceedings under Part III, it is not possible to raise "[a]ny matter which could be subject of an appeal under regulations under section 55 of [LGFA 1988] " (reg 23(1)). S55 of LGFA 1988 provides for challenges to the contents of the list. Accordingly, it is not possible to question the contents of the list in proceedings concerned with liability for rates; 

vi) Where a billing authority has demanded the wrong amount (which may be either too much or too little) there is a procedure in reg 9 for making adjustment. In the case of an underpayment, the billing authority may serve a fresh demand notice to recover the extra: reg 9(2)-(3). In the case of an overpayment, the ratepayer has an entitlement to a refund, enforceable if necessary in a court of competent jurisdiction: reg 9(4), reg 22. It was pursuant to this provision that the present proceedings were brought. It is common ground that such proceedings will be subject to the prohibition on challenging the contents of the list, as explained above. 

67. Counsel for [the ratepayer] referred me to the fact that there are parallels with the legislative scheme for administration of the council tax, but also important differences. Most significantly for present purposes, it was submitted that a taxpayer can appeal to a valuation tribunal if he is aggrieved by a decision that he is liable to pay council tax: Local Government Finance Act 1992, s16 . These matters cannot be raised in proceedings relating to the enforcement of liability to council tax or claims for repayment of council tax: Council Tax (Administration and Enforcement) Regulations 1992, reg 57(1). As such, a taxpayer who considers that he has made an overpayment of council tax must first attempt to convince the billing authority that he is not liable or, failing that, may appeal to a valuation tribunal which has exclusive jurisdiction. Civil proceedings may then be brought, if necessary, to enforce any repayment consequent on the tribunal's decision: see Lone v LB Hounslow [2019] EWCA Civ 2206 at [25], [43]-[45]. 

68. In the context of non-domestic rates, the Valuation Tribunal has no jurisdiction to consider questions of liability, and it was argued before me that there is consequently no prohibition on the court considering this issue for itself in a claim (such as the present) for a refund of an overpayment.'

[3] The Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989/1058 ('1989 Regulations') contains different provisions as between England and Wales. For instance, the 1989 Regulations contains 2 different version of reg.2 on service of notices, one for England and one for Wales. This article addresses only the rules applicable to England. 

[4] The rules on service of a council tax demand notice are not the same. 

[5a] The Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989/1058 ('1989 Regulations') is separated into Parts:

(1) Part I - regs 1 and 2 inclusive, entitled 'General';

(2) Part II - regs 3 to 9 inclusive, entitled 'Billing';

(3) Part III - regs 10 to 23 inclusive, entitled 'Enforcement';

(4) Part IV - regs 24 to 9 inclusive, entitled 'Miscellaneous'.

[5b] This regulation was made under powers conferred on the Secretary of State under Schedule 9 to the Local Government Finance Act 1988. Paragraph 1 of Schedule 9 reads (so far as material):

'The Secretary of State may make regulations containing such provision as he sees fit in relation to the collection and the recovery...of amounts persons are liable to pay under sections 43, 45 and 54 above.'

Paragraph 2(f) of Schedule 9 reads:

'(2) Regulations under this Schedule may include provision—

(f) that no payment on account of the amount payable need be made unless a notice requires it...'

The Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 ('1989 Regulations') and shall come into force on 21st July 1989 (as per 1989 Regulations, reg.1(2))

[6] Both North Somerset DC v Honda Motor Europe Ltd [2010] EWHC 1505 (QB) and Rossendale Borough Council v Hurstwood Properties (A) Limited [2017] EWHC 3461 (Ch) involved consideration of a slightly earlier version of Regulation 7(6). That version, which is not materially different, read:

"No payment towards business rates needs to be made by a rate payer unless and until a requisite demand notice has been served".

[7] In North Somerset DC v Honda Motor Europe Ltd [2010] EWHC 1505 (QB), Burnett J said: 

(1) at paragraph 12:

'Section 43 does not itself give rise to a duty to pay the rates to which the ratepayer is subject. That duty arises only following service of a notice under the 1989 Regulations.'

(2) And at paragraph 19:

'It is common ground before me that no duty on the ratepayer to discharge his rates liability arises until a notice has been served under Regulation 5. There is thus, within the statutory scheme, a clear distinction between the liability for business rates created by Section 43, on the one hand, and the obligation to discharge that liability after service of a notice under the 1989 Regulations.'

[8] In Rossendale Borough Council v Hurstwood Properties (A) Limited [2017] EWHC 3461 (Ch) at first instance, HHJ Hodge QC (sitting as a Judge of the High Court) said, at paragraphs 20 to 21:

'...the service of a demand notice is an integral part of the cause of action entitling the charging authority to recover business rates from the ratepayer.

I find that a ratepayer is liable for business rates prior to the service of a demand notice, but that he is not actually obliged to pay business rates until then. The ratepayer is already subject to a liability for business rates, but he only comes under a duty to pay them upon the service of a demand notice.'

Note this case was appealed up to the Supreme Court. See next footnote. 

[9a] In Rossendale Borough Council v Hurstwood Properties (A) Limited (also known as Hurstwood Properties (A) Ltd v Rossendale BC) [2021] UKSC 16; [2022] AC 690, the Supreme Court affirmed what the first instance judge had said (see footnote above), at least in respect to unoccupied hereditaments. Lord Briggs and Lord Leggart said in the Supreme Court, at paragraph 37:

'The judge found that liability for rates accrues day by day, even if it does not become payable until demanded. On the clear wording of section 45 of the 1988 Act (quoted at para 18 above), he was plainly right on this point. See also Jervis v Pillar Denton Ltd [2015] Ch 87, para 74.'

For completeness, in Jervis v Pillar Denton Ltd [2015] Ch 87, Lewison LJ said, at paragraph 74:

'Thus he applied the reasoning of Bowen LJ, which had turned out to be the correct explanation for liability for rates. In my judgment, therefore, the rating cases do not bear on the problem in our case. As Lord Neuberger PSC also pointed out in In re Nortel GmbH [2014] AC 209, para 103, this is consistent with the fact that, at least in the modern law, liability for rates arises from day to day (although the position was different in the 19th century).'

[9b] In Atos IT Services Ltd v Fylde BC [2020] EWHC 647, Saini J said, at paragraph 66, while describing the 'broad scheme of these regulations', at (iii):

'The billing authority ... is required to serve a “demand notice” on every ratepayer for every chargeable year: regulation 4(1). This crystallises the ratepayer's liability into an obligation to pay the rates demanded: regulation 7(6);'

[10] For completeness, reg.4 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058), entitled 'The requirement for demand notices' reads:

'(1) For each chargeable financial year a billing authority shall, in accordance with regulations 5 to 7, serve a notice in writing on every person who is a ratepayer of the authority in relation to the year.

(2) Different demand notices shall be served for different chargeable financial years.

(3) A demand notice shall be served with respect to the amount payable for every hereditament as regards which a person is a ratepayer of the authority, though a single notice may relate to the amount payable with respect to more than one such hereditament.

(4) If a single demand notice relates to the amount payable with respect to more than one hereditament, subject to paragraphs 5 and 8 of Schedule 1 the amounts due under it, and the times at which they fall due, shall be determined as if separate notices were issued in respect of each hereditament.'

[11] For completeness, reg.3 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058), entitled 'Interpretation and application of Part II' reads:

(1) In this Part -

“the amount payable” for a chargeable financial year or part of a chargeable financial year in relation to a ratepayer, a billing authority and a hereditament means -

(a) the amount the ratepayer is liable to pay to the authority as regards the hereditament in respect of the year or part under -

(i) section 43 or 45 of the Act, whether calculated by reference to section 43(4) to (6) or 45(4) or (4A) of the Act (as those provisions are amended or substituted in any case by or under Schedule 7A to the Act) or by reference to an amount or rules determined or prescribed under section 47(1)(a), 57A(3)(a) or 58(3)(a) of the Act; and

(ii) section 11 of the BRS Act, whether calculated by reference to section 13 of the BRS Act (chargeable amount) or determined in accordance with rules set by the levying authority under section 15 of the BRS Act (BRS relief); or

(b) where an amount falls to be credited by the billing authority against the ratepayer's liability in respect of the year or part, the amount (if any) by which the amount referred to in sub-paragraph (a) above exceeds the amount falling to be so credited;

“demand notice” means the notice required to be served by regulation 4(1);

“ratepayer” in relation to a chargeable financial year and a billing authority means a person liable to pay an amount under section 43 or 45 of the Act to the authority in respect of the year; and

“relevant year” in relation to a notice means the chargeable financial year to which the notice relates;

“the 1992 Act” means the Non-Domestic Rating Act 1992;

“the 1993 Act” means the Non-Domestic Rating Act 1993;

“transitional adjustment notice” has the meaning given by paragraph 7A(2)(b) of Schedule 1.

(2) For the purposes of this Part the conditions mentioned in section 43(1) or 45(1) of the Act are not to be treated as fulfilled as regards a hereditament on any day on which the chargeable amount for the day in respect of it is 0 under section 45A of the Act or by virtue of a determination to that effect under section 47(1)(a) of the Act.

(3) Where references are made in this Part to the day on which a notice is issued, they shall be taken to be references–

(a) if the notice is served in the manner described in regulation 2(2) or section 233(2) of the Local Government Act 1972 by being left at, or sent by post to, a person's place of business or proper address, to the day on which it is so left or posted, or

(b) in any other case, to the day on which it is served.

(4) The provisions of this Part which provide for the repayment or crediting of any amount or the adjustment of payments due under a notice (including in particular paragraph 7 of Schedule 1) shall have effect subject to paragraph 10(4) of Schedule 7 to the Act.'

[12] For completeness, section 233 of the Local Government Act 1972, entitled 'Service of notices by local authorities' reads:

'(1) Subject to subsection (8) below, subsections (2) to (5) below shall have effect in relation to any notice, order or other document required or authorised by or under any enactment to be given to or served on any person by or on behalf of a local authority or by an officer of a local authority.

(2) Any such document may be given to or served on the person in question either by delivering it to him, or by leaving it at his proper address, or by sending it by post to him at that address.

(3) Any such document may-

(a) in the case of a body corporate, be given to or served on the secretary or clerk of that body;

(b) in the case of a partnership, be given to or served on a partner or a person having the control or management of the partnership business.

(4) For the purposes of this section and of section 26 of the Interpretation Act 1889 (service of documents by post) in its application to this section, the proper address of any person to or on whom a document is to be given or served shall be his last known address, except that-

(a) in the case of a body corporate or their secretary or clerk, it shall be the address of the registered or principal office of that body;

(b) in the case of a partnership or a person having the control or management of the partnership business, it shall be that of the principal office of the partnership;

and for the purposes of this subsection the principal office of a company registered outside the United Kingdom or of a partnership carrying on business outside the United Kingdom shall be their principal office within the United Kingdom.

(5) If the person to be given or served with any document mentioned in subsection (1) above has specified an address within the United Kingdom other than his proper address within the meaning of subsection (4) above as the one at which he or someone on his behalf will accept documents of the same description as that document, that address shall also be treated for the purposes of this section and section 26 of the Interpretation Act 1889 as his proper address.

...

(7) If the name or address of any owner, lessee or occupier of land to or on whom any document mentioned in subsection (1) above is to be given or served cannot after reasonable inquiry be ascertained, the document may be given or served either by leaving it in the hands of a person who is or appears to be resident or employed on the land or by leaving it conspicuously affixed to some building or object on the land.

(8) This section shall apply to a document required or authorised by or under any enactment to be given to or served on any person by or on behalf of the chairman of a parish meeting as it applies to a document so required or authorised to be given to or served on any person by or on behalf of a local authority.

(9) The foregoing provisions of this section do not apply to a document which is to be given or served in any proceedings in court.

(10) Except as aforesaid and subject to any provision of any enactment or instrument excluding the foregoing provisions of this section, the methods of giving or serving documents which are available under those provisions are in addition to the methods which are available under any other enactment or any instrument made under any enactment.

(11) In this section “local authority” includes a joint authority, an economic prosperity board, a combined authority, a fire and rescue authority created by an order under section 4A of the Fire and Rescue Services Act 2004, a police and crime commissioner and the Mayor's Office for Policing and Crime.'

Section 233(9) does not apply to demand notices, since procedurally, a demand notice must be issued before formal proceedings are commenced in court (which would be either when a Billing Authority issues: (1) an application by way of complaint, in the Magistrates Court; or (2) a claim form in the County Court or High Court). 

[13] Subsection 233(8) of the Local Government Act 1972, which subsections 233(2) to (5) are subject to, should not be relevant to business rates cases, since it relates to notices etc served by the chairman of a parish meeting. Clearly this is not relevant, but for completeness, it reads:

'This section shall apply to a document required or authorised by or under any enactment to be given to or served on any person by or on behalf of the chairman of a parish meeting as it applies to a document so required or authorised to be given to or served on any person by or on behalf of a local authority.'

[14] The definition is contained in subsection 233(11) of the Local Government Act 1972, which reads:

'In this section “local authority” includes a joint authority, an economic prosperity board, a combined authority, a fire and rescue authority created by an order under section 4A of the Fire and Rescue Services Act 2004, a police and crime commissioner and the Mayor's Office for Policing and Crime.' 

Note subsection 233(11) seems to be subject to frequent amendment. Readers may wish to consider checking it has not changed again, when they come to apply it. 

There is special provision where the Billing Authority is the Common Council of the City of London - not contained in the Local Government Act 172, but in reg.2(1) of Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058). Reg.2(1) reads:

'Where any notice which is required or authorised by these Regulations to be given to or served on a person falls to be given or served by or on behalf of the Common Council or by an officer of the Common Council, it may be given or served in any manner in which it might be given or served under section 233 of the Local Government Act 1972 if the Common Council were a local authority within the meaning of that section.'

One could take the view that this provision might read better, if there been the word 'had' or 'were' was used instead of 'if' between '1972' and 'the Common Council...' in the last part of the provision. 

[15] In Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058) (the ‘1989 Regulations’), reg.2(2) reads in full:

'Without prejudice to section 233 of the Local Government Act 1972 and paragraph (1) above, where any notice which is required or authorised by these Regulations to be given to or served on a person relates to a hereditament which is (or, where such a notice relates to more than one hereditament, one or more of which is) a place of business of that person, it may be given or served by leaving it at, or by sending it by post to him at, the place of business (or, as the case may be, one of those places of business).'

The words 'and paragraph (1) above' in reg.2(2) refer to reg.2(1). Reg.2(1) relates only to the Common Council of the City of London.

[16] In Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058) (the ‘1989 Regulations’), reg.4(3) expressly states that:

'a single notice may relate to the amount payable with respect to more than one such hereditament'

 As an aside, reg.4(2)-(4) of the 1989 Regulations, set out what contents / characteristics a business rates demand notice may have. Reg.4(2)-(4) provide:

'(2) Different demand notices shall be served for different chargeable financial years.

(3) A demand notice shall be served with respect to the amount payable for every hereditament as regards which a person is a ratepayer of the authority, though a single notice may relate to the amount payable with respect to more than one such hereditament.

(4) If a single demand notice relates to the amount payable with respect to more than one hereditament, subject to paragraphs 5 and 8 of Schedule 1 the amounts due under it, and the times at which they fall due, shall be determined as if separate notices were issued in respect of each hereditament.'

Schedule 1, paragraphs 5 and 8 read (respectively):

'In this Part “the aggregate amount” means the amount of the estimate referred to in regulation 6(1), or if pursuant to regulation 4(3) the demand notice relates to more than one hereditament for which such an estimate is made, the aggregate of the amount of those estimates.'

'If pursuant to regulation 4(3) the demand notice relates to more than one hereditament for which such an estimate as is referred to in regulation 6(1) is made-

(a) references in paragraphs 6(1) to (5), 7(1) and (3), 7A(1)(d) and (5) and 7B(1)(b) to “the hereditament” shall be construed as references to all the hereditaments, so that paragraph 6 applies only if the even mentioned in sub-paragraph (1) of that paragraph has occurred in relation to all of them,

(b) the relevant day shall be determined for the purposes of paragraph 6 by reference to the hereditament with respect to which the conditions referred to in sub-paragraph (1) of that paragraph were (or, as the case may be, would be) last fulfilled,

(c) the reference to “the hereditament concerned” in paragraph 6(6) shall be construed as a reference to any of the hereditaments concerned, and 

(d) where neither the conditions mentioned in section 43(1) nor those mentioned in section 45(1) of the Act are fulfilled with respect to a hereditament to which the notice relates but paragraph 6 does not apply by virtue of paragraph (a) above, references in paragraph 7 to the revised estimate mentioned in sub-paragraph (3) of that paragraph shall be construed insofar as concerns that hereditament as references to the amount payable in relation to the hereditament for the period in the relevant year up to the day on which the conditions were last fulfilled.'

Reg.4(2) came up by way of background in the case of JJB Sports Plc v Telford and Wrekin BC [2008] EWHC 2870 (Admin) [2009] RA 33, paragraphs 3 and 8

[17] For those interested in some legal history, prior the Local Government Finance Act 1989, the General Rate Act 1967 governed the law on business rates. Within that General Rate Act 1967, there was section 109 (now obsolete), entitled 'Service of notices etc.. As originally enacted, section 109 set down the methods of service for the full gamut of document for service in business rates cases i.e. not just the demand notice, but also for the summons amongst other documents. Section 109(1), with subsection (e) provided:

(1) Any notice, demand note, application, summons, order or other document of any description required or authorised to be sent, given, made or served under or for the purposes of this Act may be sent, given, made or served either-

...

(e) without prejudice to the foregoing provisions of this subsection, where the hereditament to which the document relates is a place of business of the person to or on whom it is to be sent, given, made or served, by leaving it at, or forwarding it by post addressed to that person at, the said place of business.'

[18] Less well-known but places where this phrase is also used, are:

(1) Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009/2268 reg. 22(1)(e);

For Wales, see the equivolent Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2005/758, see reg. 40(1)(e)

(2) Business Improvement Districts (Property Owners) (England) Regulations 2014/3204 - Schedule 4 Imposition, administration, collection, recovery and application of the BRS-BID levy - paragraph 1(4).

For Wales, see the equivolent Business Improvement Districts (Wales) Regulations 2005/1312 Schedule 4 Imposition, administration, collection, recovery and application of the BID Levy para. 1(3) 

For Northern Ireland, see the equivolent Business Improvement Districts (General) Regulations (Northern Ireland) 2014/143 Schedule 4 Imposition, administration, collection and recovery of BID levy, para. 1(2)

There is also one just for Scotland (so no England or elsewhere equivolent), which for completeness, is (3) Act of Sederunt (Rules of the Court of Session 1994) 1994/1443 Schedule 2 The Rules of the Court of Session 1994, paragraph 16(1)(b)

[19] Fortifying the view that the difference is immaterial, is the construction placed on reg.13(2)(d) of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058) (the ‘1989 Regulations’), by the Divisional Court (Aikens LJ and Wilkie J) in Chowdhury v Westminster City Council [2013] EWHC 1921 (Admin). The Divisional Court said, at paragraphs 29 and 30:

'In my judgment, the correct construction of that provision is as follows: for there to be proper service of the summons in such a case, first of all, all or a part of the sum to which the summons relates must be payable in respect of “a heraditament” which is also “a place of business” of the person sought to be served with the summons.

Secondly, the summons must be left at that place of business ie at that heraditament, or the summons must be sent by post to the person sought to be served at that place of business ie that heraditament.'

That construction would equally apply to reg.2(2) of the 1989 Regulations.

[20] While not a business rates demand notice reg.2(2) case, Chuckwu v Redbridge [2015] EWHC 2683 (Ch)(Nugee J)('Chuckwu') can be considered by analogy. In Chuckwu, the ratepayer appealed a Magistrates Court decision to dismiss his application to set aside a liability order made against the ratepayer. On the 3 Conditions (as set down in R (Brighton & Hove City Council) v Hamdan [2004] EWHC 1800 (Admin)('Hamdan')) the Magistrates Court had had to determine, was whether there had been a substantial procedural error, mishap etc, leading to the liability order being made. The alleged procedural error was that the summons was invalidly served, not being served in accordance with any of the 5 permitted methods of service of a summons, as set down in reg.13(2) of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058). On the facts in Chuckwu, the summons was served on 8.7.11 at 81 Ilford Hill, the ratepayer's business address. 

Before Nugee J it was conceded ('accepted' - paragraph 15) that service at 81 Ilford Hill did not fall within any of the 5 methods (paragraph 15). Nugee J said, at paragraph 15 that 'It seems to me that ...(a) which does enable a sumons to be served at a person's place of business, only permits service at the place of business which is where all or part of the summons to which the summos relates is payable with respect to a hereditament which is that place of business.'

On the facts he said:

'None of the rates claimed in this case related to [the ratepayers] premises at 81 Ilford Hill. They all related to the unit in The Mall which, by the time the summons was issued, had ceased to be his place of business and in any event was not served there.'

In other words, not only did the address the summons was sent to, have to be 'a place of business' of the ratepayer, when it was sent, but also, the summons could only be sent to that address, if the summons related to unpaid business rates in relation to that address the summons was sent to. 

This would seem to apply equally to when business rates demand notices are sent to an address, (purportedly) under 1989 Regulations, reg.2(2).

[21] Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations (SI 1989/1058), reg.2(4) to reg.2(7) read:

'(4) For the purpose of any legal proceedings, a notice given by a means described in paragraph (3) shall, unless the contrary is proved, be treated as served on the second business day after-

(a) it was sent in accordance with paragraph (3)(a); or

(b) notification of its publication was given in accordance with paragraph (3)(b)(iv).

(5) A person who has notified an address for the purpose of paragraph (3)(a) shall, by notice in writing to the billing authority, advise the billing authority of any change in that address; and the change shall take effect on the third business day after the date on which the notice is received by the billing authority.

(6) A person who has notified an address for the purpose of paragraph (3)(a) may, by notice in writing to the billing authority, withdraw that notification; and the withdrawal shall take effect on the third business day after the date on which the notice is received by the billing authority.

(7) A person who has entered into an agreement with the billing authority under paragraph (3)(b)(i) may, by notice in writing to the billing authority, inform the authority that he no longer wishes to be a party to the agreement; and where such notice is given, the agreement shall be treated as revoked on the third business day after the date on which the notice is received by the billing authority.'

For completeness, reg.2 contains 2 further paragraphs, namely reg.2(8) and 2(9), which read:

'(8) Notwithstanding the provisions of paragraph (3) of this regulation, subject to paragraph (9) information to which this paragraph applies shall be treated as supplied by a billing authority to a person where the billing authority has-

(a) published the information on a website; and

(b) notified the person in writing of-

(i) the publication of that information on a website;

(ii) the address of that website;

(iii) the place on the website where the information may be accessed; and

(iv) a postal address, email address and telephone number which may be used to request a hard copy of the information.

(9) Where the person referred to in paragraph (8) requests a hard copy of the information to which paragraph (8) applies, the billing authority must comply with that request as soon as practicable following the request.

(10) The information to which paragraph (8) applies is the information mentioned in Part 2 of Schedule 3 to the demand notices regulations which the billing authority is required, by regulation 3(4) of those regulations, to supply to a person when it serves a rate demand notice on that person.'