Introduction

1. Liability orders are made against ratepayers who are found to have failed to pay due national non-domestic rates (‘NNDR’ or ‘Business Rates’ or simply ‘non-domestic council tax’). The liability order is an enforceable judgment and the sums involved are usually quite substantial.

2. Where liability orders are made in the ratepayer’s absence, or without him even being aware that a Court process was underway against him, the ratepayer can apply to bring the matter back before the Magistrates’ Court justices, with a view to the justices making an order setting the liability orders aside. Whether the justices will accede to that application depends on whether the circumstances justify it.

3. This article will explore those circumstances, and the conditions that need to be fulfilled before a Magistrates Court will set aside a Business Rates liability order. In the interests of brevity, I shall use the label ‘ratepayer’ for the applicant/defendant to the Local Authority/Billing Authority's[1a] main complaint, though in most cases he will be disputing that he is the ratepayer (mandatory relief ratepayers being the exception).

Warning

4. Those reading this article because they have become aware that a liability order may have been made against them, should note that in such circumstances, the law expects them to act swiftly; to be within time, they must normally make their application to set aside the liability order ‘within days or at most a very few weeks, not months, and certainly not as much as a year'. Engaging in lengthy correspondence with the Billing Authority will not excuse delay in issuing the application to set aside.

Proceedings for a Liability Order.

5. To put the application to set aside the liability order in context, it is helpful to consider the process by which a liability order is obtained.

6. Typically, the ratepayer will receive a 'demand notice', then a 'further notice' and/or a 'reminder notice', before formal proceedings begin[1b]. Sometimes a 'final notice' is served, before formal proceedings begin, though this is not required/prescribed by the rules. Formal proceedings are initiated by the Billing Authority (i.e. the local authority) applying to the local Magistrates Court, by way of a ‘Complaint’[2] (this application is not served on the alleged ratepayers). 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 ('...why he has not paid the sum which is outstanding' reg.12(2) of Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 (SI 1989/1058)). Overviews of the system were given in Chowdbury v Westminster City Council [2013] EWHC 1921 ('Chowdbury'), North Somerset DC v Honda Motor Europe Ltd [2010] EWHC 1505 ('Honda') and Total Sprint Limited v Swale Borough Council [2023] EWHC 2968 (Admin); [2024] 1 WLR 1687[3a]

7. 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 and begin actively participating in the Court procedure, firstly, by setting out his resistance to the liability order being made against him, secondly, complying with any directions[3b] given at the hearing, and then thirdly, attending the final trial on the contested issues[4a].

Form of Application to set aside the liability order

8. The process of commencing an application (sometimes called a ‘request’) for an order setting aside the liability orders is relatively informal. There is no prescribed form to fill in to make the application. Indeed a letter addressed to the Clerk to the Magistrates’ Court will be sufficient. However, the letter must be clear that it is an application under the Court’s exceptional jurisdiction to set aside the liability order (see R (Sangha) v Stratford Magistrates' Court [2008] EWHC 2979 (Admin), paragraphs 37 and 12) and should set out how the 3 conditions (identified below) are satisfied. The letter should at least do this in outline form, since this is akin to an ‘issue of process’ document, and so should contain the main thrust of the grounds upon which the application is made.

The Governing Law

9. The governing law is common law based, rather than statutory. Neither s142 of the Magistrates’ Court Act 1980 nor the CPR (in particular, CPR r.13 and r.39.3[4b]) apply. That law requires that liability orders should not be set aside unless 3 ‘conditions’ are established.

Stage 1: The 3 Conditions

These 3 Conditions were set down in the leading authority is R (Brighton and Hove City Council) v Brighton and Hove Justices [2004] EWHC 1800 (Admin) (‘Hamdan’), at paragraph 31 of the judgment[5a]:

‘31. It is important to take into account that the jurisdiction …held to exist cannot be exercised simply because the defendant disputes his liability to pay the NNDR in question. That there is a genuine and arguable dispute as to that liability is a necessary condition for a decision by justices to set aside a liability order, but it is not a sufficient condition. The power of a magistrates' court to set aside a liability order it has made is an exceptional one, to be exercised cautiously. In my judgment, in general a magistrates' court should not set aside a liability order unless it is satisfied, in addition to there being a genuine and arguable dispute as to the defendant's liability for the rates in question, that:

(a) the order was made as a result of a substantial procedural error, defect or mishap; and

(b) the application to the justices for the order to be set aside is made promptly after the defendant learns that it has been made or has notice that an order may have been made.’

In R (London Borough of Newham) v Stratford Magistrates Court [2008] EWHC 125 (Admin), Andrew Nicol QC (as he then was) sitting as a deputy judge confirmed, at paragraph 13, this was the applicable test, and in Total Sprint Limited v Swale Borough Council [2023] EWHC 2968 (Admin); [2024] 1 WLR 1687 ('Total Sprint'), Eyre J said he agreed with that analysis (paragraph 75)[5b].

10. These 3 Conditions[6a] can be summarised as:

a. Condition 1: A ‘genuine and arguable dispute as to the defendant's liability for the rates in question’ (‘Genuine and Arguable dispute’)

b. Condition 2: ‘Substantial procedural error, defect or mishap’ results in the order (‘Procedural mishap’);

c. Condition 3: Prompt application ‘after the defendant learns that it has been made or has notice that an order may have been made.’(‘Prompt application’)

11. Each of these 3 Conditions must be established. They are cumulative. To put it another way, the application to set aside will fail if one (or more) of these stages can not be established[6b]. Furthermore, the burden of establishing each of these conditions lies upon the Applicant ratepayer[7a].

12. As will be apparent, the test is more prescriptive than simply asking whether it would be reasonable and in the interests of justice to set aside the liability orders (see paragraph 37 of Hamdan).

Stage 2: Discretion

The 3 Conditions are pre-conditions, required to exist, for the power to set aside, to be exerciseable. Even when all the conditions exist, the Magistrates Court has a discretion whether or not to make the set aside order. This was made clear in Total Sprint, wherein Eyre J said, at paragraph 77:

'...it is to be noted that Stanley Burnton J's three criteria were said to be matters which were necessary "in general"; that they were expressed as preconditions required for the power to be exercisable but not such as necessarily to require it to be exercised when they were present...'

Condition 1: Genuine and arguable dispute.

13. For Condition 1, the Court asks itself whether, on the balance of probabilities, there is at least a ‘genuine and arguable dispute’ as to the ratepayer’s liability to pay the Business Rates which founded the liability orders. This is a merits based test; it requires the Court to consider the substantive arguments put forward by the ratepayer as to why he is not liable to pay the relevant Business Rates.

14. The threshold set is fairly low. The ratepayer is not required to establish, at this preliminary stage, that at a trial he will establish on the balance of probabilities, that he is not liable (at all or for some of it); the ratepayer merely has to establish at this stage, that he has at least a genuine and arguable case that he is not liable.

15. Where the ratepayer alleges he has been wrongly identified as the party liable, he is not required to demonstrate who is in fact liable, merely that there is a genuine and arguable dispute that he is not liable. However, it naturally bolsters the ratepayer’s position to be able to produce evidence as to who is the true ratepayer. The credibility, plausibility and strength of the ratepayer’s arguments will be assessed.

16. The genuine and arguable dispute may centre around a variety of potential issues[7b]. One issue might be as to who is in rateable occupation, another might be entitlement to exemptions/Business Rates relief (for instance, mandatory relief for a charity).

Who is liable for Business Rates?

17. Liability for Business Rates is principally governed by two distinct sections in the Local Government Finance Act 1988, Part III Non-Domestic Rating, namely, s43 entitled ‘Occupied hereditaments: liability’ and s45 entitled ‘Unoccupied hereditaments: liability’, though each is the principal provision in a set of sections (set 1 being sections 43, 44 and 44A, and set 2 being sections 45, 45A, 46 and 46A) and readers should note that sections are due to be amended shortly. It is a tax on a ratepayer's property, not on a ratepayer's business per se[7c]

Typically, the first question to ask is: on the relevent day(s), was the hereditament/land rateably occupied? if it was, then s43 applied; if it was not, then s.45 applied.

Rateably Occupied

18. The main part of section 43, subsection 43(1), applying to occupied hereditaments, reads:

‘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.’

Explaining this provision, Aikens LJ in Chowdbury v Westminster City Council [2013] EWHC 1921 (‘Chowdbury') said at paragraph 6:

’Under section 43 of the Local Government Finance Act 1988, a person called “the ratepayer” is liable to pay non-domestic rates as regards a “hereditament” in respect of any day of the year if (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.’

19. For s.43 to govern therefore, there needs to be 'occupation' (i.e. rateable occupation). As to this, section 65(2) of Local Government Finance Act 1988 reads:

‘Whether a hereditament or land is occupied, and who is the occupier, shall be determined by reference to the rules which would have applied for the purposes of the 1967 Act had this Act not been passed (ignoring any express statutory rules such as those in section 24 and 46A of that Act).’

By subection 65(3), this general provision - retaining the pre-Local Government Finance Act 1988 law, is subject to certain specific 'treating' provisions in subsections 65(4) to (8A). Aside from these 'treating' provisions, section 65 has retained the, largely, common law rules on the concept of rateable occupation.

20. This was recently reaffirmed by the Supreme Court in Cardtronics UK Ltd v Sykes (Valuation Officers) [2020] UKSC 21; [2020] 1 WLR 2184, paragraph 13 (noted in Hurstwood Properties (A) Ltd v Rossendale BC [2021] UKSC 16, paragraph 21, who said that 'The question whether property is occupied and, if so, who is the occupier for rating purposes is still largely governed by the common law rules: see section 65(2) of the 1988 Act)'

21. Complex issues can arise around whether and/or who (whether natural person or legal person) was in ‘rateable occupation’ of the property within the hereditament, on a particular day (or over a certain period). In R. (on the application of Secretary of State for Health and Social Care (on behalf of Public Health England)) v Harlow DC [2021] 4 WLR 65 ('Harlow'), Kerr J said, at paragraph 3:

'The conventional starting point for determining whether premises are occupied for rating purposes is to apply the four tests derived from Tucker LJ's judgment in Laing (John) & Son Ltd v Kingswood Assessment Committee [1949] 1 KB 344, 350:

‘First, there must be actual occupation; secondly, that it must be exclusive for the particular purposes of the possessor; thirdly, that the possession must be of some value or benefit to the possessor; and, fourthly, the possession must not be for too transient a period.’[8a]

If any one of the four essential ingredients is missing/test unsatisfied, then the occupier cannot be in rateable occupation. Whether a certain person(s) (natural or legal) was in rateable occupation is a question of fact.

22. Before considering the meaning of rateble occupation in more detail, it should be noted that if the hereditament is: (1) part occupied, part unoccupied; or (2) part occupied, part occupied separately by others, then see Atos IT Services Ltd v Fylde BC [2020] EWHC 647 (QB) and Mr Stephen Morris QC sitting as a Deputy High Court Judge in The Queen on the Application of Tallington Lake Limited v Grantham Magistrates Court [2010] EWHC 3403 (Admin)('Tallington Lake') paragraph 19 - Ryde on Rates quotation. Note s.44A of the LGFA 1988, which gives the billing authority a discretion to take account of part rateably occupied/part not rateably occupied single hereditament, for the purpose of the billing authority granting, under s.44A of the LGFA 1988, a reduction in the applicable business rates due. See also an article, written by this author, entitled 'Business Rates - Occupied Hereditament without Exclusive Occupier'.

23. Returning to rateable ‘occupation’ as a concept, in R v Assessment Committee of St Pancras [1877] 2 QB 581, Lush J said:

‘It is not easy to give an accurate and exhaustive definition of the word ‘occupier’. Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a vacant house is in possession, and may maintain trespass against any one who invades it, but as long as he leaves it vacant, he is not rateable for it as an occupier. If, however, he furnishes it, and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may not reside in it one day in a year.

On the other hand, a person who, without having any title, takes actual possession of a house or piece of land, whether by leave of the owner or against his will, is the occupier of it. Another element, however, besides actual possession of the land, is necessary to constitute the kind of occupation which the Act contemplates, and that is permanence.’ 

24. In Laing, the Court referred to Westminster Council v. The Southern Ry. Co. and W. H. Smith Son, Ld. and Others [1936] AC 511 ('Westminster Council'), quoting Lord Russell at 529 (the case relating to Victoria Station):

‘Occupation, however, is not synonymous with legal possession: the owner of an empty house has the legal possession, but he is not in rateable occupation. Rateable occupation, however, must include actual possession, and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation.’

25. Where there is only one contender for rateable occupier, the position is more straightforward. But, a rateable ‘occupier’ can be more than one person (natural or legal) – if there is more than one, and their legal right of occupation is a joint right - they are joint rateable occupiers (or joint rateable occupants, if you will). However, the situation is more complicated where there are separate, independent contenders for the position of rateable occupier (that is, rival contenders, or sometimes called ‘rival claimants’). Firstly, there can be only one rateable occupier. Excluding joint rateable occupiers, this means there can be only one person (natural or legal) who is the rateable occupier; Lord Diplock in Commissioner of Valuation for Northern Ireland v. Fermanagh Protestant Board of Education [1969] 1 W.L.R. 1708, said at 1728:

‘Under the Northern Irish legislation, as under the English, the liability to pay rates is imposed on the occupier. Parliament cannot have intended to impose separate and independent liabilities to pay the rates for the same hereditament on more than one person except where their legal right of occupation is a joint right, as in the case of joint tenants. In English law, therefore, although there may be a joint occupation of a single hereditament there cannot be rateable occupation by more than one occupier whose use of the premises is made under separate and several legal (or equitable) rights.’[8b]

See also, paragraph 71 of Rossendale. In Re Briant Colour Printing [1977] 1 WLR 942 ('Briant'), Buckley LJ said, at 952-953:

‘There cannot, I think, be two occupiers for rating purposes at one time of one hereditament.’ 

26. Secondly, where there are rival claimants to the rateable occupancy, only the paramount occupier, and not the subordinate occupier, is in rateable occupation. Lord Russell at 529 in Westminster Council said:

‘Where there is no rival claimant to the occupancy, no difficulty can arise; but in certain cases there may be a rival occupancy in some person who, to some extent, may have occupancy rights over the premises. The question in every such case must be one of fact - namely, whose position in relation to occupation is paramount, and whose position in relation to occupation is subordinate; but, in my opinion, the question must be considered and answered in regard to the position and rights of the parties in respect of the premises in question, and in regard to the purpose of the occupation of those premises.'

See Honda, Burnett J for a recent case involving paramount occupier/subordinary occupier.

27. Thirdly, the subordinate occupier is not in rateable occupation because the existence of the paramount occupier negates an essential ingredient in any claim that the subordinate occupier is in rateable occupation, namely that of: exclusive possession. As Eveleigh LJ said in Routhan v Arun [1982] Q.B. 502 ('Routhan'), at 513:

‘In such cases, where it is shown that one person's occupancy is paramount, he is the occupier for the purposes of the Act. The existence of a paramount obligation (sic) shows that the condition of exclusiveness does not exist in the other’

28. Lord Russell in Westminster Council, said, at 10:

‘In truth the effect of the alleged control upon the question of rateable occupation must depend upon the facts in every case; and in my opinion in each case the degree of the control must be examined, and the examination must be directed to the extent to which its exercise would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them, or would be inconsistent with his enjoyment of them to the substantial exclusion of all other persons.’

29a. In Briant, Buckley LJ summarised the position, at 952-953:

'Both the fact of occupation and the identity of the occupier are questions of fact, to be answered on the evidence and the circumstances of the particular case. There cannot, I think, be two occupiers for rating purposes at one time of one hereditament. If a state of affairs arises in which two persons are in occupation of what is listed as one hereditament for rating purposes, each entitled to exclusive use for a particular purpose, the list must be amended to show two hereditaments in order to enable the rating authority to assess both occupiers. But if there are two persons, each of whom makes some use of an immovable property concurrently, there may either be two co-existing hereditaments, the occupier of each one of which may be rateable; or there may be two concurrent uses of one hereditament, in which event it may be necessary to discover which of them has the paramount position so as to be rateable as the occupier.'

29b. In determining who is in rateable occupation, a factor which may be looked at is - who has title to that land. But there is no presumption in law (as distinct from a 'presumption of fact') that the owner is also the occupied. 

29c. Lord Denning MR in Routhan, said at 508, that:

'The title to the land is irrelevant save where the fact of occupation is ambiguous. Then the title may be looked at so as to determine who is the occupier.’

29d. In Briant, Buckley LJ said, page 952:

‘…where all that is known about a hereditament is that it is in use - that is to say, that it is in some kind of occupation - then, in the absence of countervailing evidence, the natural inference on the balance of probabilities is that it is the owner who is using it.’

Later Buckley LJ in Briant rejected the proposition that, where premises are occupied, there is a presumption that the owner is the occupier, saying at 960 that:

'…in my view no such presumption exists, unless it be purely a presumption of fact, that is to say, an inference which can be drawn from the fact that the owner is the owner of the property, when there is nothing to indicate that he is not the person in occupation of it: but that is merely a circumstance which has to be taken into account in conjunction with all the other relevant circumstances of the case, and the question who is in occupation has to be answered as a question of fact in the light of all those relevant circumstances.'

29e. In Queen Street Properties Ltd v Cardiff City and Council Council [2022] EWHC 39 (Admin), Eyre J considered this issue, and said, at paragraph 32:

'Actual occupation is different from ownership and from the legal right to possession of particular premises. It follows that there is no presumption of law that the owner is the rateable occupier of occupied premises in the absence of other explanation. That is the consequence of the passage from Buckley LJ’s judgment in Southwark LBC v Briant Colour Printing Co Ltd...Nonetheless the fact that premises are occupied; that a particular person is the owner and so entitled to possession; and the absence of evidence of an occupier other than the owner are potentially relevant circumstances. In an appropriate case the court is entitled to infer from those matters that the owner is in actual occupation for the purposes of liability to rates. The circumstances of each case must be considered but in an appropriate case such an inference can arise naturally or as a prima facie explanation of the circumstances.'[8c]

30. Returning to joint rateable occupation, and how each of the joint rateable occupiers are liable,Tallington Lake, the deputy High Court Judge said at paragraph 19:'...the issue of whose occupation is paramount and whose is subordinate arises where there are rival claimants to occupancy. This does not arise where occupancy is strictly joint. It is clearly established that there may be two or more occupants of one particular hereditament and that each is jointly and severally liable for the rates. An example would be occupancy by a partnership.'

Tallington Lake applied this to a group of companies, individually and separately occupying parts of one hereditament. See Dias v London Borough of Havering [2011] EWHC 172 (Ch), paragraph 27.

For numerous other articles on Business Rates Law (amongst articles on topics on other areas), see here.

Rateably Unoccupied

18. The main part of s45, subsection 45(1), applying to unoccupied hereditaments, reads:

‘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 none of the hereditament is occupied,
(b) on the day the ratepayer is the owner of the whole of the hereditament,
(c) the hereditament is shown for the day in a local non-domestic rating list in force for the year, and
(d) on the day the hereditament falls within a class prescribed by the Secretary of State by regulations.’

19. A discussion about these 4 conditions would fill an article on its own. Only three points will be noted here:

[1] Condition (a) to s45 has the effect of ensuring that s45 and s43 do not apply to the same hereditament on the same day;[2] Condition (b) to s45(1) makes the ‘owner’ the ratepayer and s65(1) of Local Government Finance Act 1988 defines 'owner' as follows: 'The owner of a hereditament or land is the person entitled to possession of it.’ This definition is, by s.65(3), subject to the provisions in s.65(4) to (8A); readers will need to consider whether these provisions are relevant to their case [9]. Outside the area of tax mitigation schemes, this will typically be the legal title holder of the absolute interest (i.e. the freehold or leasehold interest) which does not have any immediate (as distinct from reversionary) derivative absolute interests carved out of it. In basic terms, for the relevant day(s), whoever both: (a) held a legal title to the property/land (freehold/leasehold) within the hereditament; and (b) was not themselves a landlord to any tenants. In other words, person on the lowest/last chain on the tenurial chain (or lowest 'rung' on the tenurial ladder).

As to who is 'entitled to possession of' the hereditament, in Brown v City of London Corp [1996] 1 WLR 1070 ('Brown'), a case about receivers, Arden J, at 1083, stated that she accepted the certain principles (arising from counsel's submissions - 'In the result, on Issue 1, I accept Miss Gloster's submissions 1(ii), (iii), 2, 3, 5, and 6.'), including:

'(ii) The definition of “owner” in section 65(1) of the Act of 1988 refers to “the person entitled to possession” of the hereditament and this requires one to identify the person who has the immediate legal right to actual physical possession, albeit that such person ex hypothesi will not be in actual physical occupation of the property. In contrast with the word “occupation,” the word “possession” conveys the notion of exclusive entitlement to occupy'

In Hurstwood Properties (A) Ltd v Rossendale Borough Council [2021] UKSC 16, Lord Briggs and Lord Leggett said, at paragraph 50:

'The Act requires someone to be identified as the owner. That will be the person who, in any tenurial chain, starting with the freeholder and working downwards, has not disposed of the entitlement to possession of the property in question.'

Dealing with a few scenarios:

(1) Where the hereditament is subject to a tax mitigation scheme, who is 'entitled to possession of' the hereditament is more nuanced, taking into account the intention of Parliament behind the legislation. The recent Supreme Court case of Hurstwood Properties (A) Ltd v Rossendale BC [2021] UKSC 16, which overturned Rossendale in the Court of Appeal, decided that, who is the 'owner' turns more on: who, in reality, has control/the ability to bring the property back into use. A special purpose vehicle (SPV) leaseholder might not be 'entitled to possession' of the hereditament within the meaning of s.65, despite the existence of the lease (which is not a sham) bestowing on the SPV a property right having attached to it an immediate right to possession. It might actually be the lessor which is 'entitled to possession' of the hereditament (see an article, written by this author, entitled 'Business Rates - 'Owner' of Unoccupied Properties')

(2) merely having a right which, if exercised, would give a person the entitlement to possession, will not be enough. Arden J in Brown, at 1083, said:

'One has to identify who, at the relevant time, had the immediate entitlement to possession; i.e. the immediate legal right to possession. It is not relevant to inquire who, if they exercised a particular right or power, would have such entitlement, in circumstances where they have not yet done so.'[10].

(3) occupation by an agent, occupying as required for his/her principal, will be treated as occupation for the principal. Arden J in Brown, at 1083, said:

“It is a general principle of rating law that where an agent is required to occupy a hereditament in order to secure the better performance of his duties as agent, his occupation is for rating purposes ordinarily treated as that of his principal:” per Slade L.J. in the Ratford case [1987] Q.B. 357, 371G"...'

(4) for mortgagor/mortgagee relationships, in Westminster City Council v Haymarket Publishing Ltd [1981] 1 W.L.R. 677, a mortgagee against billing authority case, Lord Denning MR in the Court of Appeal, considered the meaning of 'owner' in General Rate Act 1967 - in two supplemental sections, 17A and 17B - for the purposes of who must pay the surcharge imposed on empty commercial premises. At 679, Lord Denning MR said:

'Section 17A says who is to pay the surcharge. It says:

“(1) If for a continuous period exceeding six months a commercial building is not used for the purpose for which it was constructed or has been adapted, its owner shall pay in respect of that period … a surcharge additional to the rates (if any) payable apart from this section.”

So there is the liability to pay put upon the owner. The meaning of “owner” is defined in section 17B (7): “… ‘owner’ means the person entitled to possession …” If the owner does not pay, then section 17B provides for how it can be enforced....

The first question is: who is liable to pay the rates? Who is the “owner?” Who is “entitled to possession” when it is a question between mortgagor and mortgagee? It is quite plain to my mind that unless and until the mortgagee enters into possession, in accordance with the mortgage law, and takes the rents and profits, the mortgagor is the person entitled to possession. He is the person who is entitled to put up advertisements, to let and do all that is necessary to let - unless and until the mortgagee interferes. It seems to me that the “owner” under section 17A is not two, three or more people. It is the one who really has control of the letting.'

[3] Condition (d) is governed: (1) for England, by the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 (SI 2008/386), and (2) for Wales, by the Non-Domestic Rating (Unoccupied Property) (Wales) Regulations 2008 (SI 2008/2499 (W. 217). See in particular reg.4. Further information on exemptions can be found here.

Condition 2: Substantial procedural error, defect or mishap

31. There are two distinct parts to this Condition:

a. There was substantial procedural error, defect or mishap; and

b. That procedural error, defect or mishap resulted in the liability order made.

32. Some general guidance on this was set down in Hamdan, paragraph 32:

‘In most cases, it must be shown that the liability order was unlawful or made in excess of jurisdiction or in ignorance of a significant fact concerning their procedure (such as an application for an adjournment) of which the justices should have been aware.'

33. A procedural mishap, satisfying this Condition does not need to involve some fault being attributed to the Court or the local authority. Maurice Kay J in Liverpool City Council v Pleroma Distribution Ltd [2002] EWHC 2467 (Admin) (‘Pleroma’), gave the example of a traffic accident that, unknown to the magistrates' court, prevents the defendant from attending at the hearing.

34. A failure by the ratepayer to attend Court, when he knows that there will be a hearing, will not amount to a procedural mishap. As stated in Hamdan, paragraph 32:

‘…a failure of the defendant to attend the hearing because he assumes, without good reason, that the local authority will not seek an order, or because he is absent abroad, will not of itself satisfy this requirement. A defendant who will be unable to attend a hearing because of his absence abroad may request an adjournment in writing, or instruct a solicitor to appear on his behalf; but if he does nothing, he is not entitled to an order of the magistrates to set aside a liability order made against him.'

Procedural Mishap in Service of the Summons 

35. The service of the Summons can be fertile ground for procedural mishaps.

36. The rules on service are set out in regulation 13(2) of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989. This provides 5 separate and alternative methods by which service of a summons issued under Regulation 12(2) can be effected on a natural person or legal entity. Regulation 13(2) reads:

(2) A summons issued under regulation 12(2) may be served on a person-

(a) by delivering it to him,

(b) by leaving it at his usual or last known place of abode, or in the case of a company, at its registered office,

(c) by sending it to him at his usual or last known place of abode, or in the case of a company, to its registered office,

(d) where all or part of the sum to which it relates is payable with respect to a hereditament which is a place of business of the person, by leaving it at, or by sending it by post to him at, the place of business, or

(e) by leaving it at, or by sending it by post to him at, an address given by the person as an address at which service of the summons will be accepted

Exhaustive list of methods of service

37. The list in Regulation 13(2) is exhaustive. These 5, and no others, can be used for service. An argument in Chuckwu v Redbridge [2015] EWHC 2683 (Ch) (‘Chuckwu’), that ‘…any other method could be used if the local authority had good reason to use another address…’ failed. At paragraph 24, Nugee J said:

‘It seems to me that Regulation 13(2) is intended to set out the possible methods of service, meaning the only possible methods of service, and that service that is not in accordance with Regulation 13(2) is not due service.’

38. When considering whether service was within a permitted method, salient issues include identifying:

a. the method of service (hand delivery, physically leaving it at the destination, sending by the postal system) selected; and

b. the selected destination for the Summons (usual or last known place of abode, registered company address, place of business, specifically provided address).

39. Each limb will be considered in turn. Limb (b) and (c) can be read together. They differ only in respect to the method of service, ‘leaving it at’ for limb (b), while in contradistinction, Limb (c) prescribes ‘sending it to’. These phrases are common for methods of service[11].

Limb (a) delivering it to him

40. In Chuckwu, Nugee J said at paragraph 16 that in respect to limb (a), in the light of the other paragraphs, it must mean ‘by delivering it to him personally.’ Delivering it to a person personally, encompasses handing the Summons personally into the physical possession of the intended recipient. Typically this will be by a process server. Beyond this, it appears that delivery may be effected by handing the Summons to a person other than the intended recipient (a spouse for instance; the postal service cannot count), who promises to pass it on to the intended recipient and the evidence shows that they did in fact pass it on as promised. this finding can be made even where the intended recipient claims he has not received it: see Morecambe and Heysham Corp v. Warwick (1958) 56 L.G.R.

Limb (b) leaving it at his usual or last known place of abode, or registered office

41. ‘leaving it at’ means putting the document physically into the destination address while at the destination address.

42. Parallels can be drawn with a similar set of methods of service in s233 of the Local Government Act 1972. Within s233, service is permitted by ‘delivering it to him, or by leaving it at his proper address’. The Court in Rushmoor v Reynolds [1991] COD 315, found service had occurred within this provision, where the billing authority had used one of its own employees to visit the property itself, and whilst there, the employee pushed the notice through the letter box at the property. Service was found to come within this provision in Lambeth LBC v Mullings [1990] COD 281, a case which involved a notice being inserted ‘through the respondent's letter-box.’ (see Birmingham City Council v Bravington [2023] EWCA Civ 308)

43. The phrase ‘usual or last known place of abode’ should be given its normal and natural meaning. Analogies can be made with similar phraseology in the CPR. CPR r.6.9 uses the language of ‘usual or last known residence’ and ‘usual and last known address’:

a. For ‘usual’, the Court of Appeal in Relfo Ltd (In Liquidation) v Varsani [2010] EWCA Civ 560 said the critical determinant is of the addressee’s pattern of life, rejecting that the test merely required a comparision between periods of occupation - account should be taken of the nature or quality of occupation (for instance, as a family home). The first instance decision had talked of a notion of regularity about it but not necessarily comparative intensity of use.

b. For ‘last known’, the first instance decision in Relfo Ltd (In Liquidation) v Varsani [2009] EWHC 2297 (Ch) said that a person who had more than one residence could have more than one ‘last known’ residence (presumably any single person can only have one last known address for that person).

44. A ‘place of abode’ seems largely synonymous to ‘residence’.

45. A company has a registered address, and this is available and published on Companies House website.

Limb (c) by sending it to him at his usual or last known place of abode, or registered office

46. This method of service is identical to limb (b) save for the substitution of ‘Sending it to’ in place of ‘leaving it at’. ‘Sending it to’ means sending it by the postal system[12].

Limb (d) by leaving it at, or by sending it by post to him at, the place of business

47. The Divisional Court in Chowdhury considered the correct construction of Limb (d); Aikens LJ said:

'29….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 hereditament” which is also “a place of business” of the person sought to be served with the summons.

30 Secondly, the summons must be left at that place of business ie at that hereditament, or the summons must be sent by post to the person sought to be served at that place of business ie that hereditament. In the present case there is, it would appear, no doubt that the letter containing the summons was posted to the appellant at the address of the premises, viz the hereditament. The only question is whether that hereditament was at the relevant time “a place of business” of this appellant.’

48. In Chuckwu, Nugee J at paragraph 15 summarized it as:

‘(d) which does enable a summons 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 summons relates is payable with respect to a hereditament which is that place of business.'

49. In Chowdhury, the relevant business of the ratepayer was that of a landlord – the subject premises were sublet on a succession of short-term leases. The Divisional Court found that the premises was not, by that fact alone, ‘a place of business’ of the landlord. However the Divisional Court left open the question of whether, if rent is collected at that premises, that premises then qualifies as ‘a place’ of business of the landlord (paragraph 31).

Limb (e) An address given by the person as an address at which service of the summons will be accepted

50. Service by this limb is only available: (a) where an address has been given by the ratepayer; and (b) that address was given expressly as an address at which a particular type of communication can be sent, namely a Summons.

51. An address which is given for any other purpose, is not an address which is given as an address at which a Summons will be accepted. An address given for general and/or formal communications or correspondence will not qualify. The CPR adopts a similarly strict approach in respect to the provision of addresses. CPR r.6.8 (a) says that service is good service at an address ‘…which the defendant has given for the purpose of being served with the proceedings’.

The effect of the Summons not being served properly

52. In Chowdhury, the Divisional Court said at paragraph 28:

‘In my judgment, it is unnecessary, and probably also unwise, for this court to try and define the extent of the justices' jurisdiction to set aside liability orders. In this case there is a much narrower point to decide, that is, effectively, whether the liability order challenged was ever properly made at all. It seems to me that if the summons was not properly served then the justices would have had no jurisdiction to make the liability order under Regulation 12(2).

53. It continued later, at paragraph 32:

‘…It seems to me that if the summons was not properly served in accordance with Regulation 12(2)(d) then the justices had no jurisdiction to make the liability order at all.' 

54. This is because the Regulations make the service of the summons within one of the 5 prescribed methods, a prerequisite to obtaining a liability order. This is derived from Regulation 13(2A), which stipulates that no liability order ‘shall be made’ pursuant to a summons issued under Regulation 12(2) ‘unless fourteen days have elapsed since the day on which the summons was served’. If no summons has been properly served, then 14 days cannot have elapsed and so the bar on making a liability order cannot have been lifted (see Chowdbury paragraph 10 and 18).

55. Contrary to what may first appear, the mere fact that the justices lacked jurisdiction to make the liability order, does not mean that the liability order is null and void, or fatally irregular. The liability order remains valid. The lack of jurisdiction only establishes Condition 2. The Hamdan 3 Condition test remains applicable and Condition 1 and 3 must still be established before the liability order will be set aside. This is made clear in the following passage of Chowdhury, paragraph 32:

‘Subject to a possible argument on whether the appellant has lost his right to have the liability order set aside because he had not applied sufficiently promptly, which is not the subject of the Case Stated…then if the summons was not properly served, it seems to me that the justices not only have the power to set the liability order aside but they must do so. That it because it is accepted for present purposes that there is a genuine and arguable dispute as to the appellant's liability and the order would have been made as a result of a substantial procedural error.’

56. The liability orders were not set aside in Chuckwu, as although the summons were found not to have been properly served, and so Condition 2 established, there was no genuine and arguable dispute and the ratepayer had not acted promptly. The Court saw force in the argument at paragraph 25 that:

‘…to set aside the liability order for a failure to serve the summons properly in circumstances where there is neither a genuine and arguable dispute as to liability on the facts before the justices, nor a prompt application to set aside would simply lead to a duplication of costs and the proceedings having to start again to the benefit of nobody.’

Justices lacking knowledge when making Liability Order – Ratepayer unaware

57. The non-receipt of the summons by the ratepayer appears to amount to a procedural mishap.

58. In R (on the application of Jones) v Justice of the Peace [2008] EWHC 2740 (Admin) (‘Jones’), a council tax case, Foskett J said, after listing the 3 stage test set out above, in paragraph 4:

‘…In relation to the second of those matters, Stanley Burnton J emphasised that the procedural mishap may not be the fault of the court or of the local authority. In my judgment, it is broad enough to embrace the situation where the court, in ignorance of the fact that the party against whom the liability notice is sought is himself unaware of the application for such a notice, grants the application for the notice.’

59. The language may be easier understood if ‘notice’ is understood as meaning 'order' in the above passage.

60. Whether the ratepayer was unaware of the proceedings, or not, will be a question of fact for the Court to make a finding on. The Court will not know of the ratepayer’s lack of awareness when it made the liability order, just that the ratepayer was not at Court, so any liability order will be made by the Court in ignorance of that fact.

61. An observation can be made that this construction is rather at odds with the typical purpose of service. Usually, once a method of service is proved to have been used, an irrebuttably[13a] presumption arises that the served document was received by the intended recipient. This difficulty was raised and considered in The Queen on the Application of London Borough of Newham v Stratford Magistrates Court v Selwyn Dublin [2008] EWHC 125 (Admin) (‘Newham’). There the Court took the view that the rules of service of the summons created a least a presumption that the summons will thereby have been received by the intended recipient. However, because non-receipt of the summons, if found as a fact, could not logically be distinguished from non-attendance at a hearing because of a traffic accident (which could qualify as a procedural mishap), the Court could not see why non-receipt of the notice of the hearing might not also qualify as a procedural mishap[13b]. Accordingly, where valid service is established, it is still open to the ratepayer to rebut the presumption that he thereby received the document – he can rebut the presumption by presenting evidence that he in fact did not received it.

Justices lacking knowledge when making Liability Order – Application

62. In Pleroma the justices had made a liability order in ignorance of the fact that the ratepayer’s solicitors had made a prior written request to the Court for an adjournment (only the Court clerk was aware). Upon the justices being informed of their mistake, the justices relisted the matter and set aside the liability orders. In Hamdan, this lack of awareness of the request for an adjournment was defined as a ‘substantial procedural defect’.

Procedural error, defect or mishap resulted in the liability order made

63. This is a question of cause and effect. The identified procedural mishap must have come before, rather than after, the liability order was made.

64. A Notice of Liability Order is produced after a liability order is made. Should that Notice of Liability Order contain an error, arguments can be put both ways on whether that is, or is not, a qualifying procedural error. An error arising in the recording of the liability order, can be said to arise after the liability order was made. The liability order did not arise as a result of the procedural mishap. Conversely, the error may be evidence, that prior to the liability order, an error had been made.

Condition 3: Prompt Application

65. An otherwise meritorious application to set aside a liability order can be lost if it is not made sufficiently promptly. In essence, the law requires that those made subject to a liability order, do not ‘sit on their hands’, but requires them to be proactive and make the application swiftly after they learn or gain notice that an order exists against them, or that there may be an order that exists against them.

66. Two points in time must be established in order to assess whether the application to set aside has been made promptly.

a. The date when the application to set aside is made (the ‘end date’).

b. The date when time began to run against the ratepayer (the ‘start date’).

The End date 

67. This should rarely attract much controversy. The ‘end date’ is the date of the application to the Clerk of Magistrates’ Court to set aside - the date of the letter. This is the formal commencement of proceedings; nothing less than the actual formal commencement of such proceedings will be sufficient. For instance, writing to the Billing Authority complaining about and/or raising objection to the liability orders will not do. It is not enough simply to dispute or put the matter in issue with the Billing Authority.

68. The Billing Authority bears no obligation to commence set aside proceedings. Dove J in Sleekmade Property Company Ltd v Sheffield City Council [2015] EWHC 4193 (‘Sleekmade’) stated at paragraph 30 that responsibility for commencing those proceedings ‘rests fully, fairly and squarely with the rate payer…’.

The Start date

69. The start date is the date when ‘the defendant learns that it [the order] has been made or has notice that any order may have been made’. When this actually is, is complicated and tends to lead to disputes because the moment when sufficient knowledge was gained by the ratepayer for this Condition, can be difficult to pinpoint.

70. Where there is more than one liability order, and particularly when the liability orders were made on different dates, the process of ascertain the start date, requires that the Court adopt a differentiating approach to each liability order. In other words, each liability order (or set of liability orders) must be treated separately. They should not be bundled together as if one liability order. The need for this differentiating approach was emphasised in Sleekmade, at paragraph 29:

‘…there does not appear to be any differentiated consideration of the circumstances pertaining to each of the different orders. The tests which are set out in Hamden need to be applied carefully in relation to each order that has been made. It is apparent that the District Judge dealt with all of the orders based on her contention that there had been a failure to act with urgency and diligence and a failure to communicate the change of address. She concluded that those criticisms could apply to the question of promptness, in respect of all of the orders irrespective of the dates upon which they had made, the property to which they pertained and the circumstances in which each of the orders had been granted. By contrast the test which is required by Hamden is that the application must be “made promptly after the defendant learns that it [the order] has been made or has notice that any order may have been made.”

71. The start date triggers center around knowledge of the order itself – the 2 triggers are either where the ratepayer:

a. learns that the order has been made (‘direct knowledge’); or

b. has notice that an order may have been made (‘indirect knowledge’).

72. I have labeled these two limbs, direct knowledge and indirect knowledge.

73. The law deems that upon the ratepayer gaining either start date knowledge (whether direct knowledge or indirect knowledge), the ratepayer has enough knowledge about his predicament, such that he ought to realize: (a) the seriousness of his position – that a final judgment on the Billing Authority’s claim has been made against him, or at least that there is a sufficient risk that one has been made; and (b) that only by him taking proactive steps to: (1) discover whether in fact an order has been made against him (should he not know that an order exists); and (2) bring the matter back before a subsequent Court, with reasonable expedition, can he expect a Court to consider displacing the order or orders in force against him. The rationale for time not running before this date was stated in Sleekmade - the Court said at paragraph 34:

‘To put the matter crudely they could not apply to set aside orders which they knew nothing about and which in reality they had no sensible justification to know may have been made…’

Direct Knowledge - Learns that the order has been made

74. A ratepayer can learn of the existence of the order by actually receiving a copy of the Notice of Liability Order, or being informed of its existence from a credible source (for instance).

75. Knowledge of the order can be conveyed to the ratepayer through post-liability order correspondence from the Billing Authority. The letters and/or emails from the Billing Authority need to be subject to close scrutiny to see whether the existence of liability orders was expressly conveyed.

Indirect Knowledge - Has notice that an order may have been made

76. By definition, this limb applies where the ratepayer does not know of the liability order itself. Satisfaction of this limb will arise however when the ratepayer has knowledge of certain facts, and those facts are sufficiently indicative of a liability order having been made against him, or at least, may have been made against him.

77. The Court in Hamdan gave a typical example at paragraph 33:

'A defendant who knows of the issue of a summons, and therefore should appreciate that there may have been an order made on the return day, but makes no enquiry as to whether an order has been made against him, will not in general be entitled to set aside the order simply because some time later the local authority takes further steps to enforce the order.'

78. Given that in the normal course of events, a liability order will be made on the return date (i.e. the first hearing), knowing of proceedings and that the return date has passed, will be sufficiently indicative facts to found the conclusion that an order may have been made against him on that date.

79. As with direct knowledge, indicative facts can have been conveyed to the ratepayer during correspondence with the Billing Authority. This time, correspondence exchanged both before and after the liability order can be relevant.

80. A fertile ground for argument arises with such exchanges of correspondence; where:

a. The language used throughout was ambiguous or vague, alluding merely to the existence of a debt or outstanding sums (for instance) but without indicating clearly that proceedings were on foot or that debt had been formal recognized by a Court and made into a liability order. The Court will need to assess whether certain phrases used in correspondence indicated that formal Court proceedings existed and/or what stage things had reached, or whether nothing disclosed indicated anything beyond pre-action assertions.

b. Later correspondence was unequivocal, however the Billing Authority wish to argue that promptness is to be judged from an earlier start date (with promptness consequently harder to establish). Earlier correspondence will be assessed to see whether, and when, sufficient clarity was reached to fulfill limb 2 (whether it was post-order, mid proceedings, or pre-action).

81. Ratepayer knowledge about impending enforcement, may lead to (indirect) knowledge being found. In Chuckwu, the question arose whether correspondence between the Billing Authority and the ratepayer in January 2013 contained sufficient information to trigger the start date for purposes of the Condition 3. The relevant correspondence did not say expressly “We have obtained a liability order” so the question turned on indirect knowledge, and somewhat equivocal phrases used in the correspondence.

82. On the basis that the correspondence from the Billing Authority:

1. stated that the arrears would be passed on to ‘our contract bailiffs’; and

2. had to be read in light of previous correspondence with the ratepayer in 2011 whereby the Billing Authority had agreed to withdraw a previously issued summons;

the Court held at paragraph 20 that:

‘that is sufficient to put him on notice that they have obtained some right to enforce the claim for rates by way of sending in bailiffs.’

83. Consequently, he was ‘…on notice that an order may have been made…’; time began to run in Chuckwu from January 2013. It did not matter that ‘…he had not received a copy of the order or been informed that an order had in express terms been made.’ (paragraph 21).

84. In Sleekmade, the argument was run that later liability orders start date began immediately because of an existing dispute on earlier liability. The foundation for this argument was that:

‘…since they are the same property as in the earlier orders, owned by the same owner, namely the appellant who has been subject to the same failure to pay rates, the appellant can be taken to have failed to have applied promptly to have those orders set aside in effect by implication….that the appellant knew that the subject of rates at those properties was a topic which was in live dispute between them and the respondents, and further, had they disputed those orders at the time when they should have been done, namely in a matter of days or at most weeks…, then they would have known about those orders or should have done, because the appellant and the respondent would have been engaged in active litigation.’

85. Dismissing such a wide construction of ‘notice that an order may have been made’ the Court said at paragraph 34:

‘The observations which were made at paragraph 33 of Hamden are not, in my judgment, necessarily designed to capture in effect prospectively future orders when the rate payer and rating authority are in dispute about earlier orders in respect of the same property. These subsequent orders relate to different periods of liability, in respect of which different factual considerations may very well arise as to whether or not liability exists.’

86. The Court went on to dismiss a similar argument, that start date notice should be taken to have been received for one property, merely from the fact that there was a live dispute about Business Rates about other properties ‘…on the same industrial estate…’ (paragraph 35).

Very old liability orders

87. The older the liability orders, the greater the requirement for a prompt application to set them aside. In Newham, the liability orders were between 5 and 2.5 years old. The Court said at paragraph 20 that there was ‘an important principle that runs independently of the defendant’s knowledge of orders, namely the finality of litigation’ and that:

'Obviously, with orders that were so old the obligation on the defendant, if he wanted to persuade the court successfully to set them aside, was to move particularly swiftly.’

Assessing whether the application was made sufficiently promptly

88. The predominate guidance[14a] on assessing promptness is an observation made in Hamdan, at paragraph 33:

‘In this context, where the defendant is not required to do more than to write a letter stating why he seeks to re-open the decision to make a liability order, promptness normally requires action within days or at most a very few weeks, not months, and certainly not as much as a year.’

89. The crucial phrase ‘within days or at most a very few weeks, not months, and certainly not as much as a year‘ has been adopted and applied in all the main cases. While undoubtedly applicable to assessing promptness, the following observations can be made:

a.The test is and remains promptness; this statement is a gloss on that test;

b. The word ‘normally’ is apt; the converse to ‘normally’ is presumably exceptional circumstances - which would justify departure from this guidance;

c. Words in a judgment should not be elevated to the status of a test set down in an Act of Parliament. In Merabello [1973] Ch 75, Megarry J said, at 91, 'Words in a judgment must be construed in relation to the subject-matter of the case in question, and not as if they were Acts of Parliament.'). In BTI 2014 LLC v Sequana S.A. [2019] EWCA Civ 112 , David Richards LJ (with whom Longmore LJ and Henderson LJ agreed) said, at paragraph 220 'Judicial statements should never be treated and construed as if they were statutes.' The common law discourages an unduly dogmatic and inflexible approach to phrases used in judgments. The perceived mischief which the Condition is designed to meet, must always be kept in mind.

Further, factors can come in to affect how promptness is judged, for instance, whether there have been, between the ratepayer and the Billing Authority, prior to issue of the set aside application:

(a) negotiations and communications, amounting to a reason for putting off immediately issuing[14b];

(b) general (pre-action) correspondence [14c];

90. By way of illustrative example:

a. in Sangha, a finding that an ratepayer was not sufficiently prompt following a delay of 16.5 months (3.9.04 to 23.1.06), was not overturned in the High Court (paragraphs 37-38);

b. in Chuckwu, the High Court held that a finding that the ratepayer had not acted sufficiently promptly following a delay of 15-16 months (23 January 2013 to May 2014), was not susceptible to challenge (paragraph 21);

c. in Sleekmade, delay of 15 months (6.11.12. to 18.2.14) was held by the High Court to be ‘not … remotely prompt.’ 

d. in Naris v Tower Hamlets LBC [2018] EWHC 2768 (Admin)('Naris'), the district judge had found that 12 months was not prompt. The Court of Appeal said of this, at paragraph 22, that 'it is perfectly clear that the substantive decision arrived at on the issue of promptness was well within the realm of reasonable decision-making.'

e. in the unreported case of Hussain v Tower Hamlets LBC, dated 2.11.16, DDJ (MC) M Studdert, held 5 months delay was not prompt.

f. In Thaker v Tameside MBC [2011] EWHC 2354 (Admin); [2012] R.V.R. 36 ('Thaker'), Langstaff J said at paragraph 13 about a delay of 7 months: 

‘On the same basis it follows that he had had …ample time to find out what the magistrates had decided and did not apply promptly to set the matter aside. Promptness is critical in all cases involving public administration. This is no less the case where rating is concerned and it seems to me there was ample justification for the judge to come to that conclusion. It would have been difficult to come to any other conclusion in respect of a delay of over seven months.’

91. As will be apparent, the first 3 High Court examples are rather clustered around the 15-16 month mark, and so merely show that this level of delay has been repeatedly considered insufficiently prompt. There is then Naris at 12 months, Thaker at 7 months and Hussain at 5 months - none, on the facts, were found to be prompt. This gives some indication of how the Court views promptness.

92. The Billing Authority’s own tardiness is not relevant. Promptness is not about comparing one party’s diligence and swiftness against another, or a question of comparing culpabilities. Arguments by the ratepayer in Sangha that the Billing Authority were (also) ‘guilty of delay’ in perusing unpaid Business Rates, did not get much traction (paragraph 25).

93a. A lack of promptness caused by a party being under the disabilty of bankruptcy was touched on in the bankruptcy case of Lambert v Forest of Dean [2019] EWHC 1763 (Ch), paragraph 33. 

The rationale behind promptness

93b. All challenges to administrative and judicial decisions have imposed upon them, some time limit element. The rational behind inserting a test of promptness, was considered in Sangha paragraph 38:

'There is the potential for a lot of prejudice here on behalf of the local authority. The reason why claimants have to move swiftly is that local authorities are put in a difficult position in producing evidence to show who was in occupation at particular times and when, and contradicting claimants' cases or ratepayers' cases that they were not in occupation at the material time. The law requires that people move swiftly so that these issues can be resolved rapidly and without prejudice to the local authority’

94. In Newham, the Court said at paragraph 22:

‘It is common knowledge that any organisation can only keep its records for a limited period. It is common knowledge that witnesses' recollections of events are going to fade with time.'

Need to investigate extent of prejudice to Billing Authority

95. In Newham, the 1st instance DJ was criticized at paragraph 22 for having assumed, without investigation,‘the local authority would still have all the evidence relevant to the questions that were going to be investigated at that hearing, notwithstanding the passage of such long periods of time’, and for concluding that the local authority would not be prejudiced by the setting aside of the liability orders and would not be prejudiced at the future hearing on the original summonses. The DJ should have investigated ‘[t]he possible difficulties which the local authority might have had in assembling or recovering, or being unable to recover, its records of evidence for that hearing…’ The extent of the prejudice to the local authority was an important matter and should have been investigated and not assumed (for instance, it was not known exactly over what period did the local authority ‘…clear the decks, as it were, of old materials and old evidence in their possession’, nor whether live evidence would be extensive or limited).

Preliminary Issues

The Hamdan 3 Conditions are cumulative and divisible. A Magistrates Court can decide to hold a preliminary issue hearing on one of the three Conditions (for instance). This was made clear by the decision in Naris. In that case, the Court of Appeal (hearing a case stated appeal) held that the district judge had been entitled to decide to hold a preliminary issue hearing on Condition 3, promptness. At paragraph 17, Warby J stated:

'... it is plain that the decision to hear the issue of promptness as a preliminary issue was a legitimate case management decision.'

When the district judge found against the applicant ratepayer on that preliminary issue, the district judge had then found that "there was no need to hear evidence and submissions as to the two other grounds which need additionally to be proved to set aside a liability order. " On this, Warby J said, at paragraph 14:

'We do not consider that the District Judge was wrong in her analysis.' 

Entitlement to set aside even where Billing Authority promise not to enforcement

96. Where a Billing Authority, facing an application to set aside a liability order, concedes that the ratepayer is not liable, then the most appropriate way forward is for the application to set aside to continue, with the Billing Authority offering no resistance to the Court setting aside the liability orders. A Billing Authority taking that position, does not render the application to set aside the liability order unnecessary and academic. The subject of a liability order is entitled to demand that the liability order is set aside, whatever the Billing Authority says about whether it will enforce the liability order.

97. In R (on the application of Tull) v Camberwell Green Magistrates Court [2004] EWHC 2780, Mitting J dismissed an argument that liability orders could be left despite an application to set them aside, on the basis that they were rendered academic by a Billing Authority’s statement that it would not enforce them. He said at paragraph 33 and 34:

'33…Liability orders are, in effect, civil orders for payment by a court. They can ultimately be enforced by a sanction of imprisonment if unpaid, and by various other methods of enforcement before that ultimate step is reached. No citizen should be made the subject of orders to which, if they had been properly informed at the time, they would have objected and would have objected successfully…

34. In my view, a citizen is entitled, subject to the usual Administrative Court requirements as to promptitude and openness, to have set aside civil orders, such as liability orders, which adversely effect them, even though the person who has obtained the benefit of the order, the council, is willing to waive enforcement of them. I therefore make the order sought and quash the three liability orders.’

The Hearing

98. An application to set aside an order is an interim application. In the CPR arena, it is unusual to have oral evidence being given at an interim application hearing. Indeed it is discouraged[15]. Within the CPR arena, interim applications are typically dealt with by submissions on the written evidence provided in support, and in resistance, to the application. However, in the Magistrates’ Court, with liability order set aside applications, this reluctance to receive oral evidence is relaxed. Where all essential facts have been definitely established as not in dispute, oral evidence may be unnecessary. In Jones, the Court said at paragraph 7:

‘There may be cases where the essential facts are not in dispute where evidence of this nature is not required, but the court would need to be sure that there is true agreement on all the material facts before proceeding without hearing evidence.'

99. Conversely, at paragraph 10:

‘…a contested crucial issue of fact that may depend upon the credibility and reliability of witnesses cannot be dealt with simply on the basis of argument’

100. Contested issues of fact are adjudicated upon only after there has been an opportunity for cross-examination of any oral evidence adduced. The Billing Authority must put its factual contentions to the ratepayer should he call himself to give oral evidence. As stated in Jones, it would be unfair to the ratepayer to have findings made ‘without that matter being put fairly and squarely to him so that he has an opportunity to deal with it.'

Should the application to set aside the liability orders be successful

101. Where the application is granted, the Court will set aside the relevant liability orders. The Court should then give directions in the normal way, with a view to holding a contested hearing/trial on the application for the liability orders.

102. Facts found when adjudicating on the application to set aside, an interim hearing application, will have been tentative or provisional conclusions on all the admissible evidence[16]. Statements of the law within the application to set aside judgment are not likely to be treated as determining a preliminary point of law. The determination will just be in terms of arguability. The outcome of the application will not be designed to be conclusive on the issue[17].

Costs orders after a decision is made on the application to set aside the liability order

103. The statutory basis empowering the Magistrates' Court to make costs orders is section 64 of the Magistrates’ Court Act 1980[18], save where a complaint is not proceeded with (see below). Section 64 is entitled ‘Power to award costs and enforcement of costs’ and provides:

‘(1) On the hearing of a complaint, a magistrates' court shall have power in its discretion to make such order as to costs-

(a) on making the order for which the complaint is made, to be paid by the defendant to the complainant;

(b) on dismissing the complaint, to be paid by the complainant to the defendant, 

as it thinks just and reasonable; but if the complaint is for an order for the variation of an order for the periodic payment of money, or for the enforcement of such an order, the court may, whatever adjudication it makes, order either party to pay the whole or any part of the other's costs.

(2) The amount of any sum ordered to be paid under subsection (1) shall be specified in the order, or order of dismissal, as the case may be.

(3) Costs ordered to be paid under this section shall be enforceable as a civil debt.

(5) The preceding provisions of this section shall have effect subject to any other Act enabling a magistrates' court to order a successful party to pay the other party's costs.’

104. The application to set aside a liability order should be considered within the ‘hearing of a complaint’, and so the provision is engaged. Unlike in the ordinary civil courts governed by the CPR, where there is a wide discretion granted to the Magistrates' Court on costs orders, Parliament has elected to restrict the occasions when costs orders can be made by the Magistrates’ Court, and further, has limited the direction the costs orders can be made in on those occasions (i.e. in favour of the complainant and against the defendant, or vice versa).

105. The question of whether the Magistrates' Court has jurisdiction to make a costs order has recently been considered by Cockerill J in R.(Khan) v Feltham Magistrates Court [2017] EWHC 3042 ('Khan'). Readers are recommended to read this important decision in full. In essence, Cockerill J holds that an application to set aside a liability order is part of the wider, original 'complaint' brought by the billing authority, or the application itself is a 'complaint'. Either way, the Court has the statutory power to make costs order upon determination of the application to set aside the liability order. The decision in Khan as to recoverability of costs was followed by McCombe LJ and William Davis J in the Divisional Court case Anami Holdings Ltd v Sandwell MBC [2018] EWHC 1913 (Admin), where McCombe LJ said, at paragraph 30 '...I find Cockerill J's reasoning persuasive and I would follow it in this case.'

106. As to whether costs normally follow the event (i.e. whoever succeeds on the application (pursuing it or resisting it) is granted an order that the other party should pay their costs), or some other costs default position, will depend on what category of litigant succeeded.  

Where the billing authority succeeds in resisting the application to set aside the liability order

107. In R (Broxbourne Borough Council) v North and East Hertfordshire Magistrates' Court v Geoffrey Oliver [2009] EWHC 695 (Admin), Munby J said at paragraphs 98 to 100, that 'the Justices were given an erroneous direction in law when they were advised, in terms, that “costs usually followed the event in these cases.”' Arguably however, this comment was obiter (see paragraph 84). The Court may take costs follow the event into account as an ordinary rule. In Thaker v Tameside Metropolitan Borough Council [2011] EWHC 2354 (Admin); [2012] R.V.R. 36, Langstaff J said at paragraph 24 about the DJ's approach:

'He took into account the principle that the loser pays. In civil proceedings that is the general rule. Here there is no obvious reason, as it appears to me, why the ordinary rule should not have applied.'

Where the application to set aside the liability order is successful 

108. Here the liability order is set aside, and the main complaint/summons is revived against the defendant/ratepayer. When considering whether to award any costs to the successful defendant/ratepayer and, if so how much as 'just and reasonable', the Magistrates Court will take into account that the billing authority is a public body and so the principles [19] set down Bradford Metropolitan District Council v Booth (2000) 164 JP 485 at 490, R (Cambridge City Council) v Alex Nesting Ltd [2006] EWHC 1374 (Admin), (2006) 170 JP 539, at paragraph 11, and Silber J in Patel v Camden LBC [2013] EWHC 2459, will apply. See also Chief Constable of Warwickshire v MT (2015) 179 J.P. 454; [2015] EWHC 2303 (Admin).

Where the Complaint is not proceeded with 

109. Where the application by way of complaint for an order setting aside the liability order is not proceeded with, then section 52(3) of the Courts Act 1971, entitled 'Award of costs where information or complaint is not proceeded with', applies[20]. Not 'proceeded with', will include an applicant withdrawing, discontinuing or otherwise ceasing to pursue the complaint through to final determination by the Court. In such circumstances, upon the complaint (to set aside the liability order) formally terminating, section 52(3) will empower the Magistrates Court to order that the applicant (the complainant) do pay the other party (defendant, Billing Authority) such sum in respect to costs as the Court considers 'just and reasonable'.

Quantum of Costs

110. On quantum of recoverable costs, after quoting s.64, Langstaff J said in Thaker, at paragraph 21 that 'that gives a wide discretion to the court.’

111. In Tower Hamlets LBC v Thames Magistrates Court [2012] EWHC 961 (Admin) ('Thames'), a challenge in the Magistrates Court to an alcohol licencing subcommittee decision, Burnett J said, at paragraph 47:

'The general principles when considering the question of costs applications as regards quantum are well known. This judgment is not the place to seek to summarise them but a number of points bear some emphasis:

1. The indemnity principle means that the sum claimed cannot be more than the client is liable to pay his solicitor.

2. Guideline rates for solicitors practising in different locations are published in the White Book for the purposes of assisting summary assessments in civil proceedings (see CPR 48.49). Whilst not directly applicable to complex matters in the Magistrates' Court, it would be rare for a higher hourly rate to be allowed. It might also assist magistrates and District Judges if their attention were drawn to those guideline rates.

3. When deciding the amount of costs to be awarded, the court will take account of all of the circumstances of the case but they include the following:

(a) What was at stake in the proceedings?

(b) What was the importance of the issue to the parties before the court?

(c) What was the complexity of the appeal?

(d) What skill, specialist knowledge and responsibility did the lawyers concerned require or assume?

(e) How much time was actually spent?

In the round, the court will be concerned to check that the expenditure actually incurred was reasonable, and ensure that any award of costs is proportionate.'

Cost Schedules 

112. The High Court in Thaker held that, while there is no statutory requirement that a party seeking costs must produce a costs schedule for the justices (the author interjects, for instance, on CPR Form N260), it is, Langstaff J said, as a matter of practice, to be commended, and that it would normally be expected. 

113. In Thames, Burnett J considered the matter in more detail, at paragraphs 44 to 49.

114. At paragraph 44 in Thames, Burnett J noted the Billing Authority's submission that 'the costs claimed should have been particularised in writing', and said:

'By contrast with the provisions of the CPR , there are no formalities prescribed in connection with summary costs applications in the Magistrates' Court. That is for good reason. The Magistrates' Court deals for the most part with short cases. Applications for costs are generally made for relatively small amounts, the reasonableness of which magistrates and District Judges are well able to determine by using their experience and knowledge of local charges and the nature of the cases they regularly deal with. Even then the paying party is entitled as a matter of fairness to have an explanation of the claim, with a breakdown of rates, time spent and the nature of the work done, to enable a challenge to be made to any aspect of the claim. Routinely, such applications are made orally.'

115. Burnett J said, at paragraph 46:

'When a regulatory body is concerned with a matter in the Crown Court and wishes to recover its costs, it routinely produces a detailed breakdown to assist the court and the other party. So too, in my judgment, should parties in complex matters in the Magistrates' Court who might be seeking substantial costs orders. A failure to do so might found a reason why an application for costs should fail in whole or in part, if the court concluded that it could not satisfactorily explore the detail or the paying party were disadvantaged in challenging the quantum. The production, and indeed exchange, of such short statements of costs would be likely substantially to shorten summary costs assessments in Magistrates' Courts. They are often likely to lead to agreements on quantum, even if the principle of recoverability is in issue. Solicitors are well used to producing such statements of costs for summary assessment in all civil proceedings, as indeed both parties have in connection with this appeal by way of case stated. The form of such statements can be adapted readily to fit the circumstances of any case in the Magistrates' Court.'

In R. (on the application of Preservation and Promotion of the Arts Ltd) v Greater Manchester Magistrates' Court Preservation and Promotion of the Arts Ltd v Birmingham City Council [2020] EWHC 2435 (Admin); [2021] R.A. 91 ('Preservation'), in the Birmingham Case part, the billing authority obtained liability orders against the ratepayer, and claimed the billing authority's costs, relying on a costs schedule in N260 form '...which had been filed by analogy to the procedure in the Civil Procedure Rules'. On the appeal/judicial review, the ratepayer said, amongst other things, that - in effect (paragraph 138) - therefore the 1st instance district judge should have given proper consideration to the matters in CPR Part 44.4(3) on costs. Jefford J rejected this, agreeing with the submission, at paragraph 139, that:

'...the fact that a costs schedule was provided on Form N260, as it would have been for a summary assessment, was the product of using a convenient form and is irrelevant.'

Jefford J added, at paragraph 139 'The use of this form does not bring the CPR into play by analogy or otherwise.'

Reasons for Making a Costs Order

116. The Magistrates Court must pronounce its reasons for making any costs order. In Leeds City Council v Leeds District Magistrates [2013] EWHC 1346 (Admin) ('Leeds City'), no reasons were given for awarding costs to the successful applicant, against the local authority, for about £19,800 (page 8). There had been a finding by the Magistrates Court that the local authority sub-committee's decision had been 'fundamentally wrong' as it had been misled by a licencing officer's inaccurate calculations (held expressly to not been given in bad faith). Supperstone J said, at paragraph 14(5):

'...the word “fundamentally”, in my view, adds little, if anything, to the word “wrong”. The Magistrates' Court must be satisfied that the decision of the Sub-Committee was “wrong” before it can interfere with that decision. The finding that the decision of the Sub-Committee was wrong is not challenged. That finding in itself is not sufficient for the making of a costs order'

117. There had been submissions later from the Magistrates Court clerk, as part of the judicial review process, that the local authority had not acted on “sound grounds”, but those submissions 'did not amount to reasons for the [Magistrates Court's] decision' (paragraph 18(4)). Further, Supperstone J said, at paragraph 18(4):

'Moreover... the [Magistrates Court] clerk did not go on to state what unreasonable conduct there was by the [local authority sub-committee] that led the [Magistrates Court] to find, assuming for present purposes that they had done so, that the [local authority sub-committee] had not acted on “sound grounds”'

118. With the Magistrates Court having pronounced no other reason for its costs order, Supperstone J said in Leeds City,at paragraphs 19 and 20: 

'In my judgment, the decision of the [Magistrates Court] to allow the appeal does not begin to provide adequate reasons for the costs award that was subsequently made. I do not accept that the [local authority sub-commmittee] is able to understand the basis of the costs decision that was reached. 

Further, in my judgment, there was no findings of fact made by the [Magistrates Court] that, applying the principles set out in the [Booth] case and Perinpanathan , would have justified the costs order that was made.'

119. On the other hand, in Crawley BC v Attenborough [2006] EWHC 1278 (Admin), an appeal by a local authority against an adverse costs order in a licencing case, Scott Baker LJ said, at paragraph 11:

'...I think, first of all, there is no obligation on [Magistrates Court] in cases of this kind to go in detail into the reasons for their decision, and it is sufficient that they have made it clear that they appreciated the principle under which they were operating. Secondly, I make the general observation that it seems to me highly undesirable that the courts should do anything to encourage satellite litigation on questions such as costs.'

Staying the Liability Order pending Final Determination of the Application to Set Aside

120. An interesting question arises whether the Magistrates Court has jurisdiction to stay its own liability order, pending final determination of an application to set aside the liability order. 

121. As far as the author is aware, there is only persuasive, rather than binding, authority on the point. The potentially relevant statutory provision is s.75(1) and (2) of the Magistrates Court Act 1980, contained in Part III of the Act, which reads:

'A magistrates' court by whose conviction or order a sum is adjudged to be paid may, instead of requiring immediate payment, allow time for payment, or order payment by instalments.

Where a magistrates' court has allowed time for payment, the court may, on application by or on behalf of the person liable to make the payment, allow further time or order payment by instalments.'

122. The authority on point is the case of R. (on the application of Vtesse Networks Ltd) v North West Wiltshire Magistrates' Court [2009] EWHC 3283 (Admin); [2010] R.A. 1 ('Vtesse'). In Vtesse, judicial review proceedings were brought against a district judge's refusal to state a case for the opinion of the High Court. Permission was granted by the High Court and the judical review was widened to certain substantive issues, which included 6 (c):

'Whether the Magistrates Court has power to grant a stay of execution of a liability order and the (sic) Section 75 - 77 of the Magistrates Courts Act 1980 or otherwise and whether a stay should be granted in this case.' (paragraph 3).

123. Owen J held at paragraph 34:

'By ground 6(c) the claimant contends that the learned District Judge erred in concluding that he had no jurisdiction to order a stay of the liability orders. But given my conclusions as to the substantive grounds, and the consequences of success or failure in the Court of Appeal on the 6(a)(i) and (ii) issues (see paragraph 6 above) the question of a stay has become academic.'

124. Owen J therefore did not rule on this issue. This leaves the law with only the persuasive authority of the district judge (that a district judge does not jurisdiction to order a stay of the liability orders). It may be that Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989/1058, reg.13 (3) applies, which reads:

'The amount in respect of which a liability order is made is enforceable in accordance with this Part; and accordingly for the purposes of any of the provisions of Part III of the Magistrates' Courts Act 1980 (satisfaction and enforcement) it is not to be treated as a sum adjudged to be paid by order of the court.'

125. Part III of the Magistrates Court Act 1980 contains section 75 and so reg.13 (3) strongly appears to prevent s.75 from applying to a business rates liability order. 

126. At present therefore: 

(i) it strongly appears that s.75 of the Magistrates Court 1980 is not available and does not grant the Magistrates Court jurisdiction to stay its own liabilty orders; 

(ii) there is the decision of the district judge in Vtesse, of persuasive authority, that a district judge does not jurisdiction to order a stay of liability orders.

But, until the matter is definitively ruled upon by a higher court, the matter remains potentially unresolved. 

Challenging a dismissal of the application

127. A decision by the justices to refuse the application is itself challengeable.

128. In Hamdan, the issue arose whether the most appropriate method of challenging a refusal, was by way of judicial review, or appeal by way of Case Stated (under s111 of the Magistrates Court 1980) to the High Court (s108 of the Magistrates Court 1980 - an appeal route to the Crown Court - is not available - since there is no convictions or sentence, in Business Rates cases). The Court in Hamdan said at paragraph 23:

‘I …have no doubt that appropriate procedure to challenge the decision of the justices….was to appeal by way of case stated.’

129. The Court went on to explain why Case Stated is the more appropriate method (and why judicial review was not; Hamdan is a case where the challenge was made by judicial review):

‘This is the normal procedure for challenging errors of law by justices. It has a number of advantages, not the least of which is that the discipline of a case stated normally ensures that the High Court has before it a statement by the justices of the issues they had to decide, the evidence before them, their findings of fact and the reasons for their decision. If the case stated is defective (because, for example, the justices' statement of their findings of fact is ambiguous), it may be remitted to them for amendment: see the Practice Direction to Part 52 at 52PD.76. The reasons of the justices in the present case are relatively informal, and do not include what I would expect to see in a case stated. Furthermore, in an appeal by way of case stated, this Court is able to make any order that the lower court might have made: see CPR Part 52.10 (1). The powers of this court on judicial review are more limited: it can quash the lower court's order and order it to make another order only if that other order is the only one properly open to it.’

130. Where judicial review proceedings are brought instead:

‘The High Court may refuse relief in judicial review proceedings on the ground that proceedings by way of case stated were appropriate, but the bar is discretionary, not mandatory.'

131. Where judicial review proceedings are brought, ‘unless prejudice is caused to a party, or there is some other good reason to refuse to permit a party to proceed by way of judicial review…in my judgment the Court should be reluctant to cause a good claim to be defeated by an error as to the form of the proceedings.'

132. It is noteworthy though that ’Judicial review proceedings are most appropriate where it is alleged that there has been a procedural impropriety on the part of the justices’. In the case of Pall Mall Investments Ltd v Leeds City Council [2013] EWHC 3307 (Admin) [2013] RVR 330, Judge Roger Kaye QC maintained this enclave for judicial review where the justices dealt with the case 'unfairly or improperly' (paragraph 43), as distinct from 'challenging errors of law'. The Court in Pall Mall approved Collins J in R (on the application of) P v Liverpool City Magistrates [2006] EWHC 887 (Admin), where he said:

'6...I recognise that there are some conflicting authorities, which do not make it necessarily easy to decide whether judicial review or case stated is appropriate in the circumstances of a given case. Judicial review is obviously more appropriate where, for example, there is an issue of fact which may have to be raised and decided and which the Justices cannot have decided for themselves.

7. Those rather cryptic observations are intended to relate to a situation where it is alleged that there has been unfairness in the way that the Justices conducted the case, obviously where for example it is suggested that there was bias in the manner in which they conducted themselves, or the defendant in question was prevented from properly putting his or her case, or the Clerk to the Justices interfered in a way in which he should not have interfered.

8. There are cases in the books of judicial review which cover that sort of situation. Generally speaking, where it is alleged that Justices have misdirected themselves or got the law wrong in their approach to a decision, case stated is the appropriate way of dealing with it. Generally speaking a failure to go by way of case stated in such a situation is likely to result in a refusal of permission for judicial review on the basis that it is the wrong way of dealing with it.'

133. By way of example of judicial review, in Paling v Ipswich Magistrates Court [2021] EWHC 2739 (Admin), in the Queen's Bench Division (Administrative Court), David Pittaway QC (sitting as a Deputy High Court Judge) heard an application for judicial review in respect to a hearing in the Magistrates Court of Mr Paling's application for an order setting aside a liabilty order made in respect to council tax. Mr Paling's central allegation was that at the hearing of his set aside application (which he lost) '...he was unable to hear what [the Billing Authority's advocate] said, that he informed the magistrates that he was unable to hear, and that he was not given the opportunity of making closing oral submissions.' (paragraph 21). In response to the judicial review application: (1) the Magistrates Court tendered an initial response from the legal advisor to the magistrates at the hearing (paragraph 14) - but played no other part in the judicial review application (paragraph 6); and (2) the Billing Authority tendered a witness statement setting out how the Billing Authority's advocate had now retired and how the Billing Authority had been unsuccessful obtaining a witness statement from him (paragraph 6); and that the Billing Authority relied on the advocate's attendance note of the hearing.

134. The Deputy High Court Judge set out the law on two essential characteristics of natural justice: impartiality and fariness, at paragraphs 9 to 11, before concluding, at paragraph 21 that:

(1) the Magistrates Court legal advisor's initial response and advocate's attendance note did not responded directly to the claimant's central allegations; and

(2) the claim for judicial review succeeded:

'In my view, on the basis of the Claimant’s evidence, which I accept, a fair minded and informed observer would conclude in this case that justice had not been seen to be done. I do not consider that the merits of whether the Claimant’s application would succeed, upon which I do not form a view, should alter my decision. The Claimant’s application to quash the liability orders should be remitted to the magistrates to be heard by a differently constituted bench.'

As set out under 'Case Stated' below, a Case Stated challenge to a Magistrates Court decision must be made within 21 days of the decision. Where a ratepayer should have brought Case Stated proceedings and so should have issued within 21 days, but did not, the High Court, Administrative Court, will not allow the ratepayer to circumvent this 21 days deadline, by permitting the ratepayer to bring judicial review proceedings instead - see R. (on the application of Hacking) v Stratford Magistrates' Court) [2022] 3 WLUK 312 (Case Digest), a decision of Cavanagh J on 22.3.22.

Case Stated

135. An appeal by way of Case Stated must be made within 21 days of the decision[21]. The challenge is that the justices were wrong in law or acted in excess of jurisdiction. The Judge in The Queen on the Application of Tallington Lake Limited v Grantham Magistrates Court [2010] EWHC 3403 (Admin) explained Case Stated, as follows, at paragraphs 21-24:

'21. This is an appeal by way of case stated under section 111 of the Magistrates' Courts Act 1980. Under that provision, the power of this court is to consider whether the Magistrates' Court was wrong in law or exceeded its jurisdiction. However, it is well-established that it is an error of law for the magistrates to reach a perverse conclusion on the evidence.

22. As it is put in Blackstone's Criminal Practice 2011 at paragraph D28.14:

"The remedy [of case stated] operates only in relation to an error of law or a decision taken in excess of jurisdiction. A decision as to a question of fact will ordinarily not give rise to an appeal by way of case stated but may do so if the finding of fact is alleged to be such that no reasonable bench could have properly reached that factual conclusion on this evidence."

And it cites the case of Bracegirdle v Oxley [1947] KB 349.

23. So I remind myself that my task is to decide whether the deputy district judge made an error of law, or reached a conclusion of fact which no reasonable district judge could have reached on the evidence or reached a conclusion which is perverse.

24. It is no part of my task to enter upon analysis of the findings of fact in any other way, for example by balancing the weight of different evidence received.'

136. The process is for the would-be appellant to applying to the Magistrates’ Court to have a case stated for the opinion of the High Court. That application is made to the justices (inc. professional DJ(MC)) who composed the Court that refused the application to set aside. The application should be made by the would-be appellant in writing by letter; not orally - see R. (on the application of Preservation and Promotion of the Arts Ltd) v Greater Manchester Magistrates' Court [2021] R.A. 91; [2020] EWHC 2435 (Admin)('Preservation'), paragraph 9.

As to the relevant rules:

(1) CPR Practice Direction 52E is entitled 'Appeals by way of case stated' and Section II is entitled 'Case stated by Crown Court or Magistrates’ Court', and under the subheading 'Application to state a case ', paragraph 2.1 provides[22]:

'The procedure for applying to ... a Magistrates’ Court to have a case stated for the opinion of the High Court is set out in the Criminal Procedure Rules.

(2) Criminal Procedure Rules 2020 (SI 2020/759) ('CrPR'), contains Pt 35 entitled 'Appeal to the High Court by Case Stated'. Under the subheading 'When this Part applies', paragraph 35.1.provides (so far as is relevant):

'This Part applies where a person wants to appeal to the High Court by case stated-

(a) under section 111 of the Magistrates’ Courts Act 1980 against a decision of a magistrates’ court;'[23]

...

Under the subheading 'Application to state a case', paragraph 35.2 states:

'(1) A party who wants the court to state a case for the opinion of the High Court must-

(a) apply in writing, not more than 21 days after the decision against which the applicant wants to appeal; and

(b) serve the application on-

(i) the court officer, and

(ii) each other party.

(2) The application must-

(a) specify the decision in issue;

(b) specify the proposed question or questions of law or jurisdiction on which the opinion of the High Court will be asked;

(c) indicate the proposed grounds of appeal; and

(d) ...

(3) A party who wants to make representations about the application must-

(a) serve the representations on-

(i) the court officer, and

(ii) each other party; and

(b) do so not more than 10 business days after service of the application.

(4) The court-

(a) may determine the application without a hearing; and

(b) must determine the application not more than 15 business days after the time for service of representations under paragraph (3) has expired.

(5) If the court decides not to state a case, the court officer must serve on each party-

(a) notice of that decision; and

(b) the court’s written reasons for that decision.'

So, it is for the justices to state a case for the opinion of the High Court on the question of law or jurisdiction involved. As set out, the application must be made within 21 days. However, payment of the fee can come later; Jefford J said in Preservation, at paragraph 23 '...the application may be validly made before payment of the fee. The payment of the fee is the condition of the requirement to undertake the stating of the case and, other than in a criminal matter, of the delivery the case stated, but it is not a condition of the application.'

137. The Court will decide whether to accede to the application, or not.

(a) The justices can refuse the application if they are of the opinion that the application is frivolous (s111(5) of the Magistrates Court Act 1980). However, this refusal can itself be challenged in the High Court (under (s111(6) of the Magistrates Court Act 1980), with the prospect of the justices being ordered to produce the Case Stated, if the High Court deems that one should be produced.

(b) In the event that the justices decide to accede to the application, and state a case for the opinion of the High Court, the justices produce the Case Stated[24]. There is then an opportunity for representations (see footnote 24), before the final version is then sent to the High Court.

The Case Stated document will usually:

(a) specify the decision in issue;

(b) specify the question(s) of law or jurisdiction on which the opinion of the High Court will be asked;

(c) include a succinct summary of:

(i) the nature and history of the proceedings,

(ii) the court's relevant findings of fact, and

(iii) the relevant contentions of the parties;

138. The High Court then expresses its opinion on any questions of law arising from those facts. On a Case Stated, it is not the role of the High Court to rehear the evidence. The role of the High Court is to decide whether, on the facts found by the justices and the evidence before the justices, their conclusions were sound in law.

139. Where the question posed in the Case Stated cannot be answered by the High Court, one way or another on the stated facts, the High Court may remit the case back down to the justices, with directions that they should, for instance, hear evidence on an issue, in light of any guidance in the High Court's judgment, and then decide the relevant issue (see Chowdbury paragraph 33).

140. The High Court's powers on a Case Stated are laid down in section 28A(3) of the Senior Courts Act 1981:

'The High Court shall hear and determine the question arising on the case (or the case as amended) and shall-

(a) reverse, affirm or amend the determination in respect of which the case has been stated; or

(b) remit the matter to the magistrates’ court, or the Crown Court, with the opinion of the High Court, and may make such other order in relation to the matter (including as to costs) as it thinks fit.'

In The Queen on the Application of Burnley Borough Council v Huron Properties Ltd [2016] EWHC 3803 (Admin), Kerr J said the following, at paragraph 7, in relation to the Case Stated appeal in a Business Rates case, before him:

'This appeal is governed by rule 52.10 and 52.11 of the Civil Procedure Rules and, in the usual way, pursuant to those provisions I can affirm, set aside or vary the order of judgment below and make various other associated orders. I must allow the appeal if, in my judgment, the decision of the lower court was wrong or unjust because of a serious procedural or other irregularity in the proceedings below.'

BEYOND THE SCOPE OF THIS PAPER

141. It is never possible to cover all aspects of a particular topic in one paper. In particular, this article cannot feasibly cover all the possible types of occupation that can arise. For instance, complicated issues arise around unincorporated associations, office-holders, receivers, mortgagors in possession, holiday homes etc. Readers are advised to refer to the books in the ‘Further Reading’ section for further guidance.

FURTHER READING

1 - Encyclopedia of Rating and Local Taxation

Looseleaf Annual Subscription

Sweet and Maxwell

ISBN 9780421408005

Sweet & Maxwell Ltd

 

2- Ryde on Rating and the Council Tax

Looseleaf

Edited by: Guy Roots, Richard Glover

ISBN 9780406998279

LexisNexis Butterworths

 

SIMON HILL © 2016-2022

BARRISTER

33 BEDFORD ROW

NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.