IN THE GRIMSBY MAGISTRATES’ COURT

CIVIL JURISDICTION (COUNCIL TAX)

Ref: 1234567891

APPLICATION FOR LIABILITY ORDER

BETWEEN:

NORTH EAST LINCOLNSHIRE COUNCIL

Complainant

and

XYXY XYXYXY

Defendant

DEFENDANT’S SUPPLEMENTARY

GROUNDS OF APPEAL

Amendments to Defendant’s Grounds of Appeal (1st October 2015)

Para 22 of the Defendant’s Grounds of Appeal (1.10.15) should have stated a sum of £273.00

in respect of the balance outstanding, not £364.00 as stated in the emphasised text.

At Annex A (para 3) of the same representations the reference, (§§75-82, Annex A), is a

reference to the Defendant’s Draft Consent Order which will be provided as a supporting

document to this.

1. It is clear from the preliminary hearing on 2.10.15 that North East Lincolnshire Council

(the “Council”) does not dispute that the Defendant’s payments were made in sufficient

amount to meet the legal obligation he was under to pay the sums set out on the demand

notice relating to his 2014/15 Council Tax liability.

2. It seems that the Council’s decision to make complaint to the Magistrates’ court against

the Defendant was attributable to payments (albeit in sufficient amount) not always

being sums which matched exactly those specified in the demand notice, therefore,

deemed not to have been paid in accordance with the Council Tax (Administration and

Enforcement) Regulations 1992 (the “Regulations"). It would therefore be helpful and

expedite proceedings if in readiness for the Council’s anticipated representations on

which it is likely to rely, a response is offered here.1

3. For an informed decision on whether the Council were entitled to make complaint to the

Magistrates’ court under the circumstances, there are three key areas of consideration

from which the matter is likely to benefit; those are:

i) Provision under Part I of Schedule 1 of the Regulations (monthly instalments)

ii) The law with respect to specified payments

iii) Payment misallocated to a sum ‘subject to court proceedings’ from 2012/13

tax year.

4. The Council states in a letter accompanying the summons served on the Defendant that

‘we have sent you a Summons because you have not paid your Council Tax in

accordance with your bill’. It was implied by the Council at the preliminary hearing on

2.10.15 that the decision to take recovery action was down to the Defendant engineering

a court hearing in the manner which he had made payments.

5. The Defendant however suspects that the summons is likely to have been issued relying

entirely on parameter settings in the Council Tax processing system2 and so not checked

to ensure there were no anomalies. The amount on the summons described as the

Council Tax owing (£424.00) includes the £60.00 sum which is ‘subject to court

proceedings’. This does not relate to a previous year’s unpaid debt as the sum had been

suspended (and still is) pending a High Court decision (see below para 7).

6. The system’s failure to correctly allocate payments is an indication that the Council had

neither awareness of the Defendant’s intention to attend the court hearing nor of the

circumstances surrounding why the system triggered the summons (the case being just

one of hundreds on the Council’s list). It is feasible that only upon learning of the

1 Representations were served by the Council on 16.10.15, at which point the production of this supplementary

submission was underway though incomplete. The content in paragraphs 7, 68-70 and 73 of the Council’s

Witness Statement caused the Defendant to suspect a deliberate intent to deceive the court. This matter will

consequently require additional representations here to essentially contend the Council’s statement that it had no

further reason to believe that the costs were being disputed when the claim for Judicial review was withdrawn.

2 The process is controlled automatically in accordance with parameters set in the Council Tax software package.

The system compiles particulars of all account holders requiring issue of a summons. The complaint list is

generated from the individual entries contained in the database (including the amount outstanding and costs to be

applied for at the hearing) and delivered to the court where reviewed by a legal adviser who issues the

summonses.

Defendant’s court attendance, did it occur to the Council that the complaint had been

made based on improper evidence. Then, in an effort to save-face, pointed the finger at

the Defendant, asserting he had engineered the hearing to divert attention from the

Council’s reliance on IT to institute court proceedings (a major contributor to Council

maladministration).

7. If ever further evidence was needed to satisfy the court that the Council were at fault, a

letter sent by the Council’s Legal Department in connection with a claim for an order of

mandamus3 requiring the justices to state a case for an appeal to the High Court should

be enough. The letter dated 19.7.13 contains, so far as is relevant, the following

(emphasis added):

“Yourself v Grimsby Magistrates Court & NELC

I write further to the legal proceedings issued by yourself at Leeds High Court

against Grimsby & Cleethorpes Magistrates Court, naming North East

Lincolnshire Council as an interested party. The papers have been passed to me

upon Mrs Conolly's departure from employment with the Local Authority.

The purpose of my writing to you is to inform you that the £60 court costs, which

you dispute, will be suspended until the outcome of the proceedings. At the

completion of those proceedings, dependent on the Court's decision, the fee will

either be withdrawn from your account or will remain outstanding to the Local

Authority.

A copy of this letter has been sent to the Leeds High Court for their information.

Yours sincerely

for Group Manager Legal & Democratic Services”

8. There has however, despite the elapsed time of approaching three years from when the

proceedings to state a case were instituted, still no decision by the High Court on the

Defendant’s appeal. The final correspondence from the Justices' Clerk for Humber &

3 The Justices’ Clerk conditioned the production of the draft case upon agreeing recognizance set at a level

effectively denying the Defendant access to justice. Six months on from the application being served (subsequent

to pre-action letters), permission was sought to bring judicial review proceedings for a mandatory order requiring

the Justices to state a case, as a consequence of numerous contacts going unanswered that queried the

recognizance and which proposed alternative remedies.

The judicial review claim succeeded in prompting a response where contact with the Magistrates’ court had

failed and delivery of a draft case was taken eight months after the date that the initial application to state a case

was served. Representations upon the content of the draft case were served in accordance with the relevant court

rules; however, the final case stated was not served in the required time limits (and in fact never served).

South Yorkshire who is dealing with proceedings was on 6.3.14 who stated in an email

to the Defendant that either that day or the following the position regarding the case

(advising on the next steps) would be set out and communicated in writing. The email

contains, so far as is relevant, the following (emphasis added):

“I am sorry that I have not been available to speak with you when you have called

my office.

I understand that it is not possible for me to contact you by telephone and that you

would prefer me to contact you by e mail.

I am due to be in meetings all day today but I will have written communication

with you either later today or first thing tomorrow setting out the position with

your case and advising you on next steps.

9. The Defendant enquired into whether HMCTS had any arrangements in place to restrict

his contact with the court, as a consequence of a further letter being sent requesting the

production of a Certificate of refusal to state a case which was never replied to. At that

stage around twenty months had elapsed since the application and after a couple of

months from then a judicial complaint was submitted to the relevant ‘Advisory

Committee’ which has not been acknowledged over a period of thirteen months as of

October 2015.4

10. In May 2015 the Defendant made enquiries to try and establish why he had not even

received acknowledgement regarding the complaint. The Magistrates HR Team was

contacted rather than the Advisory Committee Secretary as it was deemed by the

Defendant that eliciting a response from the later was guaranteed to fail. Unfortunately,

the end result was the same as the HR Team merely forwarded the email to the

Committee Secretary. An email sent in response dated 15.5.15 contained, so far as is

relevant, the following:

4 It is understood that the Secretary to the Advisory Committee for the Humber – to whom the complaint was

addressed, and against whom allegations were made – is also the Justices’ Clerk dealing with the Defendant’s

High Court case. In view of that, the subsequent attempt to avoid addressing the failure must raise the

seriousness of the matter to one of misconduct in public office.

“I am sorry that your complaint has taken long to be replied to.

I have been advised by my Policy manager that your email has been forwarded to

the Justice Clerk & Advisory Committee Sec for Humber & South Yorks, Alison

Watts.

This is all we can do from our office, as the subject matter isn't something for us to

get involved with.

kind regards

Magistrates HR Team”

11. The Advisory Committee Secretary made no contact so the following month the

Defendant emailed the Head of the Judicial Conduct Investigations Office. The email

drew attention to the comments made by Mrs Justice Andrews regarding the successful

Tottenham Magistrates case5 which concerned matters not dissimilar to the issues raised

in the Defendant’s case stated appeal. The Defendant had also understood that £33,000

costs were awarded against Haringey (the interested party) and suggested that the effort

put into preventing his case progressing was to prevent a similar outcome. The

Defendant was sent an email in response dated 29.6.15 which contained, so far as is

relevant, the following:

“I have e-mailed Ms Watts today to ask when you might receive a reply, however,

she is away currently away from the office. I hope she will contact you directly. If

however, you remain dissatisfied with the way in which the advisory committee

has handled your complaint, you may complain to the Judicial Appointment and

Conduct Ombudsman; you may do so by e-mailing [email address] further

information about the Ombudsman’s remit may be found at: [website address]

I hope this is of assistance to you.

Yours sincerely

Judy Anckorn | Head of the Judicial Conduct Investigations Office....”

12. The Advisory Committee Secretary (Justices’ Clerk in Defendant’s High Court appeal)

again made no contact so on 8.8.15 the Defendant emailed the Judicial Appointment and

Conduct Ombudsman. A reminder was sent on the 19.8.15 as a consequence of the

5 Mrs Justice Andrews in the judgment of R (Nicolson) v Tottenham Magistrates [2015] EWHC 1252 (Admin)

expressed her gratitude to the appellant and Pro Bono legal reps for bringing the case before the court which

raised ‘issues of significant public interest to both council tax payers and local authorities relating to the costs

sought by local authorities with regard to the enforcement of unpaid council tax’.

Ombudsman failing to acknowledge the Defendant’s submission and that was similarly

ignored.

13. It is without any doubt that the disputed £60.00 court costs from 2012/13 (the cause of

misallocated payments and unlawful recovery action being taken by the Council on

three occasions) have not yet been determined by the High Court, and remain, according

to the Council’s directions, suspended (see above para 7). Moreover, the Defendant has

made more than reasonable efforts to ensure that the case advances and can be held in

no way responsible for the failure in the matter. However, one of the questions of law on

which the opinion of the High Court was sought by the Defendant was whether the

‘costs being disputed as unreasonable should have been awarded by the court without

evidence from the council to support them’. There was clearly no supporting evidence

before the magistrates in respect of that liability order hearing, therefore in the context

of Nicolson v Tottenham Magistrates it is completely rational that had the Defendant’s

case been allowed to proceed, the High Court would have made a similar judgment6.

14. It seems the present case can no longer be viewed simply in terms of the Council’s

unlawful recovery but take into account that had due process been followed, the £60.00

costs would never have been incorporated into the Defendant’s account (suspended or

otherwise) to cause the council tax processing system to appropriate payment wrongly.

15. The Defendant’s representations for the intended High Court appeal bundle, which exist

in draft form, are therefore submitted along with these supplementary appeal grounds.

Those papers include a draft Consent Order, Grounds of Appeal, Chronology of events

and Skeleton argument. The Skeleton argument has substantially amended content to

reflect the judgment in Nicolson v Tottenham Magistrates.

16. Returning to the Council justifying recovery in the court and its anticipated reliance on

the Regulations providing that payments are to be made as specified in the bill. The

Defendant does not dispute this which is set out in the provision for monthly instalments

under Part I of Schedule 1. Part I of Schedule 1 of the Regulations provide, so far as is

relevant, as follows (emphasis added):

6 Paragraph 61 in Nicolson v Tottenham Magistrates, ‘.... I will declare that the order was unlawful, because: i)

the Magistrates did not have sufficient relevant information before them to reach a proper judicial determination

of whether the costs claimed represented costs reasonably incurred by the Council in obtaining the liability

order’.

“2.—(1) This paragraph applies where the demand notice is issued on or before

31st December in the relevant year, but has effect subject to paragraph 3 below.

(2) The aggregate amount is to be payable in monthly instalments.

(3) The number of such instalments—

(a) where the notice is issued before the beginning of the relevant year or

at any time in the period beginning on the first day of that year and

ending on 31st May of that year, shall be 10;

(b) ......

(4) The months in which the instalments are payable must be uninterrupted, but

subject to that are to be such months in the relevant year as are specified in the

notice; and the instalments are to be payable on such day in each month as is so

specified.

(5) If the aggregate amount divided by the number of instalments gives an

amount which is a multiple of a pound, the instalments shall be of that amount.

(6) ......”

17. Sub-paragraph (6) goes on to provide a mathematical formula to apply where the

aggregate amount divided by the number of instalments does not give an amount which

is a multiple of a pound. The formula simply determines two different amounts

permitting all but the first instalment to be the same amount, and a multiple of a pound.

The total liability in the Defendant’s case for 2014/15 was £907.91 therefore specified

on the demand notice were 10 monthly instalments to be paid with the first (£88.91) due

on 1.4.15 and the remaining nine (£91.00) due on 1.5.15 to 1.1.16.

18. Regulation 23 of the Regulations sets out the steps to be taken where the taxpayer fails

to make an instalment payment under the schedule. Where an instalment is not paid as

specified and all the instalments have not fallen due, a reminder notice is required to be

served on the taxpayer stating the instalments to be paid. Regulation 23 (as amended by

regulation 3 of SI 1994/505), is as follows:

“Failure to pay instalments

23.—(1) Subject to paragraph (2), where—

(a) a demand notice has been served by a billing authority on a liable

person,

(b) instalments in respect of the council tax to which the notice relates

are payable in accordance with Part I of Schedule 1 or, as the case

may be, a Part II scheme, and

(c) any such instalment is not paid in accordance with that Schedule or,

as the case may be, the relevant scheme,

the billing authority shall serve a notice (“reminder notice”) on the liable person

stating—

(i) the amount which is the aggregate of the instalments which are

due under the demand notice or any subsequent notice given

under paragraph 10 of Schedule 1 and which are unpaid and the

instalments that will become due within the period of seven

days beginning with the day on which the reminder notice is

issued;

(ii) that the amount mentioned in sub-paragraph (i) above is

required to be paid by him within the period mentioned in that

sub-paragraph;

(iii) the effect of paragraph (3) below and the amount that will

become payable by him in the circumstances mentioned in that

paragraph; and

(iv) where the notice is the second such notice as regards the

relevant year, the effect of paragraph (4) below.

(2) Nothing in paragraph (1) shall require the service of a reminder notice—

(a) where all the instalments have fallen due; or

(b) in the circumstances mentioned in paragraphs (3) and (4).

(3) If, within the period of 7 days beginning with the day on which a reminder

notice is issued, the liable person fails to pay any instalments which are or will

become due before the expiry of that period, the unpaid balance of the estimated

amount shall become payable by him at the expiry of a further period of 7 days

beginning with the day of the failure.

(4) If, after making a payment in accordance with a reminder notice which is

the second such notice as regards the relevant year, the liable person fails to pay

any subsequent instalment as regards that year on or before the day on which it

falls due, the unpaid balance of the estimated amount shall become payable by

him on the day following the day of the failure.”

19. Taken literally, it would mean that the Council was under a legal duty to take steps in

recovery in all circumstances where the taxpayer did not pay an instalment in

accordance with that Schedule. For example if a payment was made a day earlier than

the date specified on the bill, such a payment would not have been paid in accordance

with the demand notice, or if a taxpayer paid an advanced instalment because he was out

of the country when the next was due, that similarly would not have complied with the

bill.

20. It can not of course have been the intention of parliament for a council taxpayer to be in

default in every instance where payments were not made precisely as had been

determined under the Schedule. The intended provision is clarified under regulation 23

(below) where it is set out what must be stated in the reminder notice:

“the billing authority shall serve a notice (“reminder notice”) on the liable person

stating—

(i) the amount which is the aggregate of the instalments which are

due under the demand notice.....and which are unpaid and the

instalments that will become due within the period of seven

days beginning with the day on which the reminder notice is

issued;

(ii) that the amount mentioned in sub-paragraph (i) above is

required to be paid by him within the period mentioned in that

sub-paragraph;

(ii) ....”

21. The above is explicit in its references to mean that the reminder functions only to notify

the taxpayer that there is an unpaid sum due, the amount of the unpaid sum and when

that amount is required to be paid by him. The expression ‘paid in accordance with’

therefore for the purposes of avoiding a reminder notice must only refer to a

requirement that the payment, or aggregate of payments, is/are made in respect of each

instalment in sufficient amount to at least meet the amount specified on the demand

notice and be paid on or before the specified date.

22. It does not matter whether the taxpayer chooses to pay an instalment in one or more than

one transaction or if that payment exceeds the amount specified on the demand notice,

so long as the account is up to date at any given time. Moreover, it is typical for billing

authorities to have parameters agreed in advance by their relevant managers and set in

their Council Tax processing systems relating to the number of days behind and the

monetary value etc., and notices issued on this basis. In practice therefore, billing

authorities provide a safety net for payment oversights or to allow for bank transfers to

clear. Ultimately, it would serve no useful purpose for the Council to serve a reminder

notice which notifies a taxpayer to bring his account up to date when there is no liability

outstanding or where the taxpayer’s account is in credit.

Peters v Anderson (1814) 5 Taunt 596

23. It was sensed by the Defendant at the preliminary hearing on 2.10.15 (from the

Council’s brief representations) that it is likely to rely on case authority in ‘Peters v

Anderson (1814) 5 Taunt 596’ (“Peters v Anderson”) together with the way

instructions are defined in its Council Tax processing system to allocate payments. As

aforementioned, the Council does not seem to dispute the Defendant’s payments were

made in sufficient amount etc., rather that they were not always in amounts matching

exactly those specified on the demand notice, and therefore, deemed not paid in

accordance with the relevant provision. That provision has already been examined (see

above paras 16-22), but there, the scenario was in relation to a taxpayer making

payments in circumstances where no monies were owing for a previous year’s liability.

24. It would be helpful to explain that when the Council is owed money for past years as

well as the current year the account to which its council tax system allocates payment is

entirely reliant upon payments matching exactly the instalment amount. The Council’s

software is believed to have built in allocation rules to ensure, so far as is practical in an

automated system, that the law with respect to specified payments is met. The judgment

in Peters v Anderson, held that:

“A person who is indebted to another on two several accounts, may, on paying

him money, ascribe it to which account he pleases...and his election may either be

expressed....or may be inferred from the circumstances of the transaction.”

25. It has already been dealt with at length (see above paras 7-15) that the £60.00 costs – for

which the Council already have a liability order to enforce and are attempting to obtain

another to enforce the same sum – relate to costs which are subject to court proceedings

and suspended pending the outcome of the case. That sum, by virtue of the case not yet

being determined, can not lawfully be considered a ‘several account’ to which payment

made (in any manner or sum) by the Defendant may be allocated.

26. That, however, does not render the following submissions academic as the Council had

erroneously treated the sum as outstanding arrears, and it was allocating payment to that

sum that caused the system to trigger complaint to the Court which no doubt commonly

occurs, so clearly involves a matter of general public importance. The opportunity

therefore presents itself for the Court in context of Peters v Anderson, to also make

judgment, based on the assumption that the suspended costs did relate to a previous

year’s liability, whether the Council was entitled to allocate payment to that account to

engineer arrears for the current year to enable adding costs for using the court for

complaint.

27. The opportunity therefore also presents itself for the Court in context of Peters v

Anderson, to adjudge whether the Council would have been entitled to allocate payment

in a way that enabled adding costs for using the court for complaint had the £60.00 sum

related to a previous year’s liability, and not as it was suspended. Not only that, there is

the question of whether it can be lawful for the Council to apply court costs, which are a

distinct matter, to a taxpayer’s council tax liability under any circumstances.

28. The Defendant anticipates that the Council – in justifying serving the summons – is

likely to claim that on occasion, his payment did not match exactly the sum specified on

the demand notice and therefore unclear as to which account payment was intended. The

Defendant recalls corresponding with the Council on these issues in April 2013 (see

letter identified as [D-3] Annex D). He alerted the Council to the Peters v Anderson case

on which he then relied to persuade the Council to allocate the payment, misallocated to

the disputed costs (putting his account in arrears) to his current year’s account. It was

also implied in the letter that the Defendant had knowledge of how the Council’s

council tax processing system allocated payments in accordance with the instructions

defined by its software supplier.

29. The Defendant had discovered that the system in all probability allocated payments in

the same way as Milton Keynes (“MK”) Council’s system. He had come by information

regarding the way payments are allocated by MK in an internal audit report which was

produced as a consequence of an investigation into alleged manipulation of in-year

collection figures. The report gives an account of how the council tax system allocates

payments where a taxpayer has arrears from a previous year, in the context of its built in

allocation rules to ensure (supposedly) that the law with respect to specified payments is

met (see Annex A para 4).

30. In February 2014 the Council was asked for information (see Annex A) to verify how its

system allocated payments against a person's council tax account when more than one

debt is outstanding relating to different year's liability and how it would do so in

compliance with proper accounting protocols. The Council refused to explain how its

system was set to do this on the basis that disclosure of the information, would or would

be likely to, prejudice the commercial interests of its software supplier. In a further

exchange the Council claimed it was copyrighted. However, the requester in response

expressed that MK council used the same system (Northgate), and submitted the

relevant account that was contained in the internal audit report to suggest that the cash

allocation rules set by the Council’s software supplier were not copyrighted.

31. Whether the audit report’s explanation was in effect the information that was claimed to

be copyrighted, the Council was alerted to, if not already aware, how the same software

supplier set its system for another client using it so that the law with respect to specified

payments was considered to be met. In February 2014, the Council was made aware of

the relevant case law relating to Peters v Anderson to which the Defendant had referred

previously (see above para 28) which held that (emphasis added):

“A person who is indebted to another on two several accounts, may, on paying

him money, ascribe it to which account he pleases...and his election may either be

expressed....or may be inferred from the circumstances of the transaction.”

32. It is the Defendant’s view that the Council has no feasible grounds to contend that it was

justified in making complaint to the court other than to claim that its Council Tax

processing system had correctly allocated monies to a sum other than the current year’s

account (in accordance with the legal authority in Peters v Anderson). A possible

rationale would be that the law is complied with on the assumption that the election to

which account monies were allocated, was expressed by the sum not matching exactly

the instalment amount (or not paid in a single transaction). The system would then, in

accordance with the instructions defined by the Council’s software supplier, allocate

monies to the oldest debt thus engineering default for the current year’s account.

33. Reliance on such settings can not be claimed to provide a fail safe solution in ensuring

the law is complied with. Payments for various reasons will not always be made in the

exact manner that the system requires to function correctly. It would for example be

detrimental for taxpayers who rely on financial help from family or friends to make up

the difference of amounts they are unable to meet in full. This must occur frequently

especially since changes to the benefit system have left claimants, who before the

reforms were exempt from paying council tax, now having to pay up to 30% of their

liability. Incomes for these people will have fallen below levels which the government

once deemed was a minimum amount needed to live on frugally.

34. Turning again to the legal authority in Peters v Anderson and the provision that a billing

authority is legally obliged to assign payment to the year’s debt that the person

specifies. The Council’s built in allocation rules could at a stretch be considered to be in

accordance with the law, if the relevant provision were only to stipulate that the

person’s election must be expressed. That would still require the Council to move

monies manually when requested to the intended account when a taxpayer discovers that

the system had misallocated payment. However, the law provides more importantly that

the election ‘may be inferred from the circumstances of the transaction’ which suggests

a processing system that automatically allocates monies to the oldest debt when unable

to “hard" allocate (see Annex A para 4) rather than the current year’s liability, does not

fulfil that legal duty.

35. It is only rational that a person indebted on two separate accounts would intend payment

to be made against the current year if failing to would also subject that account to

default. Knowing that a billing authority may then withdraw instalments and demand

the whole balance immediately with further risk of being charged summons costs are

consequences enough to infer that payment was intended for the current year’s account.

36. So far as is practical in an automated system, a more serious attempt to ensure that the

law with respect to specified payments is met, would be if the system was set to

automatically allocate payments which did not match specified instalment amounts to

reduce the indebtedness of the current year’s liability. That appears to be how payments

are allocated in a processing system believed to be the Capita “Academy” Revenues and

Benefits system used by Hyndburn Borough council (“HBC”).

37. A guide to recovery for council tax and Business rates dated November 2013 published

on HBC’s website, contains on page 5 under heading “Methods of Payment” the

following:

“When any payment is received by the Council it will, unless otherwise specified

by the Taxpayer, reduce the balance outstanding for the current year’s outstanding

Council Tax or NNDR. Once payment in full has been made for the current

financial year any payments subsequently received will go towards reducing any

outstanding arrears from previous financial years.”

Automating payment this way must result in a better allocation success rate, assuming

you can measure success by the number of payments that match up with accounts to

which the taxpayer intended.

38. It is reasonable to assert that automating the payment system in a way that ensures the

law in respect to specified payments is complied with can not in any practical sense be

achieved. There must be a common sense approach to implementing a system, which on

failure to allocate monies correctly, affects as few taxpayers as possible. Moreover it

should not be possible in those cases for whom monies are misallocated, that as a

consequence, their current year’s accounts are put in arrears and incur court costs and

bailiff fees associated with recovery. Therefore, the system most closely fitting those

criteria is the one used by HBC which automatically allocates payments to the current

year’s outstanding debt, unless otherwise specified by the taxpayer. Finally, most if not

all taxpayers indebted on two separate accounts, would, if not expressing their

preference, intend reducing the balance that would least likely subject them to additional

recovery. It is therefore self-evident that in those cases it is enough to infer from the

circumstances of the transaction that the election would be the current year’s balance.

39. It is fair to deduce that a council taxpayer struggling to meet payments and who owes

money from a previous year stands more chance of entering a cycle of being subjected

to recovery action whom can be relied on to provide an additional income stream in

perpetuity. The success of securing that source must significantly be increased by the

council tax software package implemented which would logically be the one that

defaults to allocating payment to the oldest account.

40. It may be for this reason that the Council claimed that the information regarding how

payments are allocated against a person's council tax account was exempt from

disclosure. MK’s audit report reveals that its council tax system (supplied by the same

software developer as the Council’s) programs its product so that payment amounts

which are not recognised by the system’s set parameters, by default allocates payment to

the oldest account. Paragraph 3.3.2 of the report states as follows:

“3.3.2 The council tax system has built in allocation rules to ensure that the law with

respect to specified payments is met. For instance, if a customer has a

payment plan for any year of debt and the payment they make matches the

planned instalment then the money will be allocated to that year (this is

known as “hard” allocation on the council tax system). If the system is unable

to “hard allocate” then it will instead “soft” allocate and the debt will be used

against the oldest debt unless manually adjusted.”

41. It could be that the Council’s software supplier did not want the information circulated

because the built in allocation rules are defined to advantage the supplier over

competitors, with a selling point on which to promote its product, being a claim to

optimise court costs income.

ii) The Council’s assertion that the Defendant wished to engineer a hearing

42. The Council stated its opinion at the preliminary hearing on 2.10.15 that the Defendant

had engineered a court hearing. By that it can reasonably be assumed that the Council

suspected that there was some aspect of the law which the Defendant had it in mind to

challenge. If this was in fact the Council’s belief it was wholly misconceived as the

Defendant had already attempted to do that in 2012 (see Annex B) in response to the

Council front loading costs imposed to obtain the liability order to the costs applied in

respect of making the complaint (120% increase). There was no serious consideration of

the evidence provided then and a subsequent appeal to the High Court in the matter has

similarly been a complete waste of three years of the Defendant’s time.

43. It is for these reasons that the Defendant has made a decision to submit a complaint to

the Local Government Ombudsman (the “LGO”) about the Council with the

recommendation that the Parliamentary Ombudsman jointly investigates Her Majesty's

Court Service under powers granted by 2007 Regulatory Reform legislation7 for its part

played in the failings. Section 26(4) of the Local Government Act 1974 provides that a

complaint shall not be considered unless it is made within twelve months from the day

the matters alleged in the complaint were known about. The Council’s ‘Final Decision’

to a formal complaint about which the Defendant wishes to escalate to the LGO was

dated 15.9.14. The completion of the complaint has been delayed because of the time

taken dealing with the Council’s recovery action so it is now out of time.

44. Over 12 months work has been invested to produce the complaint and supporting

documents which is now at risk of being refused by the LGO for consideration. The

Council therefore is completely without grounds to assert that the Defendant would

want to engineer a court hearing given the pressure he was under to complete the work

he had already undertaken.

7 The Regulatory Reform (Collaboration etc. between Ombudsmen) Order 2007, under powers granted by the

Regulatory Reform Act 2001 empowers the Parliamentary Ombudsman and LGO to conduct joint investigations,

thus enabling both organisations to work together collaboratively to address the issues raised by the complainant.

45. Notwithstanding the Council’s untrue statement it is an entirely legitimate approach for

somebody aggrieved by a public body’s unlawful actions to pursue that through a court

of law. The fact that somebody is able to engineer circumstances where a billing

authority’s council tax processing system triggers recovery action for monies which are

not owed is testament to the matter being of general public importance (it is hardly

surprising that the Council claimed that the information regarding how payments are

allocated against a person's council tax account was exempt from disclosure). Moreover,

the Council should not be averse to a member of the public wishing to seek the court’s

opinion, when the Council plainly encourages it.8 Considering the Council’s corporate

complaints procedure is in reality a charade – and you add to this that the watchdog can

be relied on to find a get out clause in 99% of escalated complaints – an aggrieved

member of the public has no real alternative.

46. A customer who is for some reason unable to pay the exact instalment amount in one

transaction, and for example pays the exact instalment amount but from two different

sources is considered not clearly requesting allocation of payments to his current year's

account. If this is the case then the council's reliance on automation amounts to

negligence as the billing authority is legally obliged to assign payment to the year’s debt

that the person specifies.

8 There are responses to questions concerning the Council’s actions, where the message being conveyed is that it

has no moral duty so will continue unless (or until) a court of law tells them otherwise. For example, contained

in a response from the Council to a Freedom of Information request (FOI) that asked for the expenditure incurred

for issuing summons arriving at £60 for a completely automated process was the following (Ref: 8816_1415):

“If you believe there is a point in law on which this can be challenged then there are avenues available for

you to pursue this.”

In a reply from the Council’s Monitoring Officer (29.6.15) to concerns raised by the Defendant regarding a

public consultation for introducing a charge for garden waste collections which he alleged was unlawful

contained the following:

“Should you wish to take formal proceedings to challenge the legality of the public consultation in question

these proceedings should be served on: [Council address]”

In another FOI concerning Enforcement fees provided under the provision of the Taking Control of Goods (fees)

Regulations 2014 there was stated the following (Ref: 8931_1415):

“Should you consider that North East Lincolnshire Council is not carrying out its duties appropriately then

you are within your right to take appropriate action for which you may wish to seek your own independent

legal advice.”

This confidence probably arises from knowing that the technicality of bringing civil proceedings is beyond the

scope of those who are most likely to want to and assessing that the risks (both financially and in time) are such

that the likelihood of a challenge is remote.

47. It can be in no doubt that the £60.00 sum in respect to outstanding costs relating to the

Liability order application granted on the 2nd November 2012 was not a sum to which

the Council were entitled to allocate any monies and so the laws in relation to the

appropriation of payments are not an issue in this case. The Council had acknowledged

receiving letters, the contents of which left no doubt that the High Court appeal

(disputing those costs) had not been withdrawn and as such those costs were and are

suspended until there is a decision made by the court.

48. Even if the £60.00 outstanding was a sum to which the Council were entitled to allocate

payment, the representations are not sufficiently persuasive to satisfy an argument that

the payments were allocated in accordance with the relevant laws. The Council seems to

rely principally on the payments made by the Defendant being neither expressed nor

inferred from the circumstances of the transaction to account for its system (Northgate)

allocating monies to the sum outstanding from 2012/13.

49. The automatic posting then of payment to the oldest debt is defended in the first

instance with what seems to be the argument that because the system is set so it asks for

a specific payment and that payment has not matched the specified sum asked for it has

not, in accordance with Peters v Anderson, been paid specifically on any account.

50. It is important to note that when making payment online, the taxpayer identifies his

payments (whether relating to the current or a previous year’s balance) with the same

account number i.e., he can not specify an account. The Northgate system therefore

operates under a scheme whereby it allocates monies according to specified payments,

not as defined in Peters v Anderson, on a specified account. The system does not allow a

debtor to ‘pay specifically on one account’ when there is more than one outstanding

balance and the transaction is made by online banking.

51. The Council describes a scenario where a debtor’s current instalment is £100 a month

but has arrears in respect of a previous year for which an arrangement has been made to

pay instalments of £30 a month concurrently. The Council asserts that the debtor’s

election is expressed if payments are made by transactions exactly matching the £100.00

and £30.00 amounts. Presumably, where a payment does not match either of the

amounts, then payment is deemed to be neither expressed nor inferred from the

circumstances of the transaction and may be allocated to which ever account the

Council pleases.

52. This however can be distinguished from the present case. In the example, the amount

relating to a previous year constitutes a payment plan for which an arrangement has

specifically been made to pay instalments in that sum, but in the present case there has

been no such arrangement therefore no matter what amount is paid, the Defendant’s

election does not come into it. In respect of the Defendant’s account, the Council’s

system has only one defined instalment amount (£91.00). Therefore, if not expressed

(which is difficult to see how it could not be) the election must have at least had to have

been inferred from the circumstances of the transaction to be allocated to the one

account for which parameters are specifically set. In any event the £85.00 paid more

closely matched the defined instalment of £91.00 than it did the £60.00 sum to which

payment was misallocated and must therefore be considered an appropriation of a

payment inferred not merely from an intention in the mind of the Defendant, but

communicated to the Council. If that isn’t enough, the Defendant made a further

payment in respect of his June 2015 instalment on 1.6.15 in the sum of £7.00, which,

when aggregated with the previous transaction (28.5.15) amounted to £92.00. That sum

matched the defined instalment amount £91.00 plus £1.00, for which the overpayment

was the consequences of an obvious oversight in the favour of the Council.

53. The Council, in its witness statement (“WS”) seeks reliance on Leeson v. Leeson (1936)

2 K.B. 156 (“Leeson”), in so much as ‘an appropriation of a payment cannot be

inferred from an intention in the mind of the debtor un-communicated to the creditor. It

can only be inferred from circumstances known to both parties’ (see WS para 72).

However, in that case, it is noted that Greene LJ states that the communication may be

expressed or implied, see p 161 of the judgment as follows:

“The appropriation by a debtor must take the form of a communication, express or

implied, of his intention to the creditor so that the creditor may know that his right

of appropriation as creditor cannot arise.”

54. Greene LJ elaborates at p162 in the same judgment where he states as follows:

“When, however, he does not notify the creditor of his intention, and when the

circumstances are such that the creditor receives the payment merely in

satisfaction of the debts and the payment is not more appropriate to the payment of

the one debt than to that of the other the creditor is entitled to make the

appropriation. When it is said that there need not be an express appropriation of a

payment, but that the appropriation can be inferred, that does not mean that

appropriation of a payment can be inferred from some undisclosed intention in the

mind of the debtor. It is to be inferred from the circumstances of the case as

known to both parties. Any other view might lead to injustice, as the creditor’s

right to appropriate a payment would be defeated.”

55. Knowing that an appropriation can be inferred from the circumstances of the case as

known to both parties, and the communication may take an implied form, even if not

specifically appropriated at the time of the payments, in the light of the correspondence

between the parties, then the Defendant must be regarded as having appropriated all

payments to his current year’s liability.

56. The relevant principles to the law of appropriation (Debtor’s rights) are set out in Chitty

on Contracts (31st Edition) Volume 1 at Para 21-061. It is noted that the initial content

is effectively that said by Greene LJ (see above para 53):

“Debtor’s right to appropriate. It is essential that an appropriation by the debtor

should take the form of a communication, express or implied, to the creditor of the

debtor’s intention to appropriate the payment to a specified debt or debts so that

the creditor may know that his rights of appropriation as creditor cannot arise. It is

not essential that the debtor should expressly specify at the time of the payment

which debt or account he intended the payment to be applied to. His intention may

be collected from other circumstances showing that he intended at the time of the

payment to appropriate it to a specific debt or account. Thus, where at the date of

payment some of his debts are statute barred and others are not, it will be inferred

(in the absence of evidence to the contrary) that the debtor appropriated the

payment to the debts that were not so barred.”

57. It could be drawn from this that where the purpose for which a payment is made is

unspecified ‘it must be carried to that account which it is most beneficial to the debtor

to reduce’9. Therefore, if as is alleged in the present case, the Defendant paid money

unappropriated, the mere fact that it would be to his detriment if allocated to the earlier

debt was sufficient to infer that the payment was intended to reduce his current year’s

liability. It therefore suggests that the law, which provides for inferred payments,

protects the debtor from the right of appropriation falling on the creditor when his

election may be to the detriment of the debtor.

58. The communication clearly does not have to be made at the time when the payment is

made for the appropriation to be inferred, and so the correspondence which arises from

the Defendant’s dispute with the Council (ongoing since 2.11.12) is categorically known

to both parties. Therefore, this could not fall under a description of an attempt to

9 Walter Pereira's Laws of Ceylon at page 722

appropriate a payment ‘inferred from the intention in the mind’ of the Defendant ‘un-

communicated’ to the Council.

59. The question of liability for payment has run ever since the liability order was granted in

November 2012 with the costs so far as the Defendant is concerned being disputed. In

addition to correspondence identified as [C-2], [C-4], [C-6], [C-8] and [C-9] in Annex C

there are all the letters contained in Annex D which provide indisputable evidence that

the inferred payment was by no means ‘un-communicated’ to the Council. In light of the

Defendant’s unbroken challenge to those costs, it would be unreasonable to construe

that any payment was intended to have been appropriated to that disputed sum. Though

correspondence arising from the Defendant’s dispute with the Council did no

specifically accompany the payment in question it was sufficient to show that he

intended at the time of the payments to appropriate them all to his current year’s council

tax liability.

60. It is a point worthy of mentioning that the public forum, apparently monitored by the

Council, which it references (see WS para 67) is updated by the Defendant with

developments as they arise in respect of his High Court appeal and disputes with the

Council (see Annex B). Clearly the contents, as are set out on that forum, all add to the

information which can be deemed collected from the circumstances to show that the

sum to which the Council allocated payment was disputed and that the High Court

appeal challenging the summons costs had not been withdrawn.

61. In the Leeson case, Greene LJ draws assistance from authority in the judgment of Lush J

in Parker v Guinness (1910) 27 TLR 129 at 130 to explain how, from circumstances

known to both parties, an appropriation of a payment can be inferred. However, this is

expanded in Caltabiano v Electoral Commission of Qld & Anor [2009] QCA 182 at para

108, as follows:

‘An undisclosed, subjective intention to appropriate is not itself effective, but in

the absence of any express statement an inference may be drawn from the

circumstances that a debtor appropriates a payment to a particular debt. The

principle was explained by Lush J in [Parker v Guinness (1910) 27 TLR 129 at

130 – 131]:

“It is clear, I think that the debtor need not state in express terms that he

appropriates the payment he makes in any particular way. What is to be

considered is this. Is the true inference to be drawn from all the

circumstances of the case that the debtor paid the moneys generally on

account, leaving the creditor to apply them as he thought fit, or is the true

inference that he paid them on account of special portions of the debt for

the purpose and with a view to wipe these out of the account? His

undisclosed intention so to do would, of course, not benefit him. It is what

he did in fact, and not what he meant to do that is to be regarded. But if the

inference to be drawn from the circumstances is that the payment was in

fact appropriated by the debtor at the time of payment, the fact that he made

no express statement at the time is immaterial. Now an appropriation by the

debtor may be inferred from a variety of circumstances. Each case must, in

my opinion, be considered on its own peculiar facts. The fact that accounts

are rendered by the debtor before payment in a particular manner may be

enough if the payment which is afterwards made is to be regarded as made

in pursuance of the accounts that have been so rendered, and the nature of

the transaction entered into between the creditor and debtor may be such as

to show that the parties must have contemplated that the payments made by

the debtor on account were appropriated in a particular way by the debtor.

(See City Discount Co v McLean, LR 9 CP 692) The conduct of the parties

coupled with the nature of the transaction, may be sufficient to lead to the

inference I have mentioned. (See Newmarch v Clay 14 East, 239).” ’

62. The Council relies on the case of Devaynes V Noble 1816 merivale 529 (“Clayton”) to

support its assertion that its Council Tax processing system ‘allocates unspecified

payments correctly’ (see WS paras 58-59). It argues that payments are presumed to be

appropriated to debts in the order in which the debts are incurred and if no election is

made the earliest debts are paid first, and cites from Clayton: “it is the first item on the

debit side of the account, that is discharged, or reduced, by the first item on the credit

side.”

63. The present issues however, can be distinguished from those arising in Clayton as that

concerned the distribution of monies between parties from a running account (bank)

where all the sums paid in formed a single account. In the Defendant’s case, there are

two distinct accounts in issue; one in respect of his current Council Tax liability and the

other, relating to a previous year’s account where that liability, is in any event, disputed

and has been since it was incurred in November 2012.

64. Sir W. Grant Master of the Rolls in his judgment in Clayton (as follows) implied it

would not simply be reinventing existing authority (referring to established cases of the

application of indefinite payments), rather the case was deemed an exception worthy of

determining in its own right.

“I should, therefore, feel myself a good deal embarrassed, if the general question,

of the creditor's right to make the application of indefinite payments, were now

necessarily to be determined. But I think the present case is distinguishable from

any of those in which that point has been decided in the creditor's favour. They

were all cases of distinct insulated debts, between which a plain line of separation

could be drawn. But this is the case of a banking account, where all the sums paid

in form one blended fund, the parts of which have no longer any distinct

existence.”

65. It cannot therefore be that the principles of appropriation of payments are overruled by

the Clayton case, and that rule (or presumption) would apply only where payment is

made without appropriation by either party and where the debtor has a running account

with the creditor, such as a bank account. Then only where the accounts are treated as a

single account by all parties would payments be attributed to the earliest items in the

account.

66. That case is clearly distinguishable from the final case referred to by the Council; Cory

Brothers & Company v Owners of Turkish Steamship ‘Mecca’ [1897] AC 286 (the

“Mecca”), however, it is unclear in what way it seeks to rely on the authority. It states

(see WS para 61); ‘when a debtor pays money on account to his creditor and makes no

appropriation to particular items, the creditor has the right of appropriation and may

exercise the right up to the last moment, by action or otherwise’. If the Mecca is the

authority on which the Council relies in appropriating, what it considers an un-specified

payment right up to the last moment (by action of a summons), then that appears to have

already been established. Lord McNaughten in the Mecca said:

“In 1816, when Clayton's case was decided, there seems to have been authority for

saying that the creditor was bound to make his election at once according to the

rule of the civil law, or at any rate, within a reasonable time, whatever that

expression in such a connection may be taken to mean. But it has long been held,

and is now quite settled, that the creditor has the right of election “up to the very

last moment," and he is not bound to declare his election in express terms. He may

declare it by bringing an action, or in any other way that makes his meaning and

intention plain.”

67. But to rely on these principles still presupposes that the Defendant had not inferred

payment from circumstances known to both parties. It is consistent with all cases that it

is the debtor’s right to appropriate the money as he pleases, failing which the creditor

may do so. This in the Mecca is conveyed by Lord McNaughten as follows:

“When a debtor is making a payment to his creditor he may appropriate the money

as he pleases, and the creditor must apply it accordingly. If the debtor does not

make any appropriation at the time when he makes the payment the right of

application devolves on the creditor.”

This concurs with the relevant principles to the law of appropriation (Rights to

appropriate payments) set out in Chitty on Contracts (31st Edition) Volume 1 at Para

21-060:

“Rights to appropriate payments. Where several separate debts are due from the

debtor to the creditor, the debtor may, when making a payment, appropriate the

money paid to a particular debt or debts, and if the creditor accepts the payment so

appropriated, he must apply it in the manner directed by the debtor; if, however,

the debtor makes no appropriation when making the payment, the creditor may do

so.”

68. Assuming that the Defendant had not specified the sum to which he intended to reduce

indebtedness, the Council had nevertheless appropriated payment at (or near enough)

the time of the transaction on 29.5.15 (see WS para 13) and later communicated this in

written correspondence to the Defendant on 2.6.15 (see WS para 19). Lord Herschell in

the Mecca said this (emphasis added):

“It is clear that if the appellants had merely entered in their own books an account

such as was transmitted, it would not have amounted to any appropriation by

them, and they would still have been at liberty to appropriate the payment as they

pleased. It is equally clear, however, that when once they had made an

appropriation and communicated it to their debtors, they would have no right to

appropriate it otherwise. What, then, was the effect of bringing the items of debt

into a single account, and transmitting it to their debtors in the manner they did?”

69. There appears no relevance to the Council seeking reliance on having the right of

appropriation up to the last moment (presumably when summonsing) as the

appropriation had been made and communicated to the Defendant approximately 3

months earlier to that action.

70. The case had more relevance in determining, in one respect, whether there had been any

appropriation made by the creditor, and if not, whether in the context of Clayton,

payments made without appropriation (by either party) ought to have been attributed to

the earliest items in the account. The contention surrounded a Statement of Account

(“SoA”) given by the creditor as seen below:

— — Days Interest at 5

per cent. —

£ s. d. £ s. d.

April 7 To draft p. ss. State of Pennsylvania, at Genoa,

267l. 14s. due, and notarial exp. 3l. . . . . .

137

5

1

8

270

14

0

,, 26 To draft p. ss. State of Nevada, at Alexandria,

176l. 5s. due, and notarial exp. 17s. . . . . .

118

2

17

2

177

2

0

,, 27 To draft p. ss. State of Nevada, at Port Said,

194l. 8s., and notarial exp. 15s. . . . . . . .

117

3

2

6

195

3

0

,, 27 To draft p. ss. State of Pennsylvania, at Port Said,

630l., and notarial exp. 15s. . . . . . . . .

117

10

2

3

630

15

0

Aug. 27 To telegrams to and from Constantinople . . . . — 7 2 5

To interest to date at 5 per cent. . . . . . . . — 20 6 4

£ 21 3 7 1,301 2 9

Aug. 15 By amount received from H. E. Moss & Co. . . . 7 17 3 900 0 0

,, 22 By balance of interest . . . . . . . . . . . — 20 6 4

By balance . . . . . . . . . . . . . . . . — 401 2 9

£ 21 3 7 1,301 2 9

,, 22 To balance . . . . . . . . . . . . . . . . . . . . . . . . £ 401 2 9

71. The case surrounds action that was taken against the owners of the steamship Mecca

(formerly called the State of Nevada). The owners of that vessel also owned another

called the Medina (formerly the State of Pennsylvania). Two of the items in the SoA

were of the same date (April 27), and the first in order was in respect of the Mecca.

72. Payment was made in part (£900) for the debts due which left a sum of £401 2s. 9d.

outstanding. When the debtor failed to pay this, action was brought by the creditor to

recover the debt due with respect to Mecca (the £900 part payment had been

appropriated to Medina debts). However, the debtor argued that by appropriation in

accordance with the SoA, Mecca debt had been paid. Mr. Justice Gainsford Bruce, in a

decision of the Court of Appeal, held that the payment was by law appropriated to the

earlier items in the account, and gave judgment for the defendants. However, it was held

in the House of Lords, on appeal of that decision....

“....that the delivery of the account did not constitute an appropriation of the sum

received from the third parties to the earliest items in the account, and the

appellants were therefore justified in their arrest of the ship for the balance.

By THE LORD CHANCELLOR.—The principle of Clayton's Case cannot apply to two

transactions of the same date.

Decision of the COURT OF APPEAL reversed.”

The House of Lords made the following distinction in the context of Clayton with

regards items listed earliest in the account:

“The rule in Clayton's Case (1 Mer. 572) that where there is an account current

between parties, and payments are made without appropriation by either debtor

or creditor, such payments are to be attributed to the earliest items in the account,

does not apply to a case in which debts arise from distinct transactions which are

not brought into a common account, and where with respect to the items to which

it is sought to appropriate the payments there has been only a temporary

abandonment of a remedy in rem.”

73. In the present case, it appears that none of the authorities on which the Council seeks to

rely are of any assistance. Notwithstanding the suspended costs from the account to

which monies have been allocated, and that the election would have otherwise been

inferred from circumstances, it is misconceived to assert that its software is correctly set

to appropriate monies to the earliest account when neither party specifies. The rule, in

the Clayton case cannot apply in a system whereby the accounts relate, as they do in

council tax, to ‘distinct insulated debts, between which a plain line of separation could

be drawn’ (see above para 64).

Council’s indecision to enforce the summons Costs

74. Whilst the appeal to the decision of Magistrates regarding the liability order for

summons costs from 2012 remains undetermined by the High Court, the Council has

stated in a number of communications, with regards the £60.00 outstanding costs, that it

has made no decision on how it would enforce the debt.

75. The Defendant made the enquiry in an email (6.2.13) see letter identified as [D-1] in

Annex D as follows:

“....I have had no contact from your bailiffs Rossendales since the council

threatened in a letter dated 19 December 2012 to instruct them within 14 days. Do

I take it that NELC have not and will not be instructing its bailiff contractor to

enforce the sum of £60 and the council consider the amount no longer owed.”

In response the Council [D-2] stated that “no decision has been taken at the present time

regarding further action to enforce the debt”.

76. The Council referred again to making no decision to enforce the sum in a response to

the Defendant’s letter (14.7.14) [D-9] but gave an undertaking [D-10] to give ample

notice of any action it decided on:

“With regards to the £60.00 outstanding on your account I can make you aware

that it is for North East Lincolnshire Council to decide on any course of action.

Any action that is taken will of course be relayed to you, giving you ample

notice.”

77. Again the Council [D-12] in its final response to a formal complaint 15.9.14 refers to

the enforcement of the £60.00 outstanding in regards costs relating to a Liability order

application granted on the 2nd

November 2012:

“Details of final recommendations:

This investigation has found that the Council acted in accordance with the

Regulations and the Guidance at all times.

No justification can be found to remove the £60 court summons costs from Mr

Xyxyxy's account and the investigation cannot provide any evidence to support Mr

Xyxyxy's request for compensation for damages.

The recommendation is that North East Lincolnshire Council consider the options

available to them to recover the outstanding £60 and decide on what will be the

appropriate course of action to take. The Council should ensure that Mr Xyxyxy is

duly informed of any action that is to be taken.”

78. This time it was specifically recommended that the options available to them to recover

the sum should be considered, despite the Council at no time having notified the

Defendant that the costs were no longer suspended. It did however, reiterate in the

recommendation that the Defendant should be informed of any action that is to be taken.

79. The Council has never given the Defendant any notification that it had taken a decision

to enforce the sum let alone what steps it would take. A liability order empowers a

billing authority to recover arrears by such methods as Attachment of Earnings/Benefits

or instructing bailiffs to levy distress/control goods. There is nothing likely to be in the

Regulations which allows billing authorities to adopt a system of deception, as appears

to have happened in this case. If there is such a scheme, the Defendant had not been

notified that it was the option considered best for the Council to take. In any event, the

High Court has not yet made a decision and if it had, there is no logical reason why it

would not have found the liability order to enforce the summons costs had been

obtained unlawfully, because like in R (Nicolson) v Tottenham Magistrates [2015]

EWHC 1252 (Admin), the court had insufficient information to determine the

reasonableness of costs claimed.

Annex A

Allocation of payments to accounts relating to different years

1. The Council was asked via Freedom of Information for details it held with regards to the its

procedures when allocating payments to accounts for taxpayers who have outstanding liability

relating to different years and how it conforms with proper accounting protocols in doing so.

2. The request was submitted on 27 February 2014 (reference number 6986_1314) as follows:

Dear North East Lincolnshire Council,

Please provide all recorded information North East Lincolnshire Council holds with

respect to the how payments are allocated against a person's council tax account when

more than one debt is outstanding relating to different year's liability.

I would particularly like to know how the council's system allocates payments so that

the billing authority conforms with proper accounting protocols.

For example, case law is still relevant from "Peters v Anderson [1814] Eng R 418",

where the judgment stated the following:

"A person who is indebted to another on two several accounts, may, on paying him

money, ascribe it to which account he pleases.–and his election may either be

expressed,-Or may be inferred from the circumstances of the transaction."

The importance of this request can be best appreciated in considering that any weakness

in the council tax system's built in allocation rules (to ensure that the law with respect to

specified payments is met), may result in unnecessary enforcement and court costs.

I would therefore like information relating to any measures the Council takes to ensure it

can never be possible for a council taxpayer to be in default of their council tax liability

(and subjected to enforcement/costs) merely because of payments not being allocated to

the current year's liability.

Yours faithfully,

3. The Council responded on 27.3.14, and confirmed that it held information in relation to the

request but withheld it relying on an exemption under the Freedom of Information Act (a

public body may apply one of a number of exemptions if it considers it appropriate). The

requester may then have the response reviewed, if for example he considers the exemption

should not apply. The Council’s response contained, so far as is relevant, as follows:

Payments are allocated by the Council’s Council Tax processing system in accordance

with the instructions defined by Northgate Information Solutions (UK). These

instructions are commercial information and are copyrighted, therefore the disclosure of

these instructions would prejudice Northgate Information Solutions (UK) position in

relation to its Council Tax processing system. We therefore determine that this

information is exempt from disclosure under the Freedom of Information Act by virtue

of section 43.

Section 43 of the Freedom of Information Act states that:

(1) Information is exempt information if it constitutes a trade secret.

(2) Information is exempt information if its disclosure under this Act would, or

would be likely to, prejudice the commercial interests of any person (including

the public authority holding it).

(3) The duty to confirm or deny does not arise if, or to the extent that, compliance

with section 1(1)(a) would, or would be likely to, prejudice the interests

mentioned in subsection (2).

North East Lincolnshire Council deem that section 43 (2) applies and that disclosure of

the information, would or would be likely to, prejudice the commercial interests of

Northgate Information Solutions (UK).

Section 43 is a qualified exemption, and requires North East Lincolnshire Council to

consider the balance of public interest for the disclosure or withholding of the requested

information, before applying the exemption. In assessing the public interest the

following factors, were considered:

• The public interest in understanding the activities of North East Lincolnshire

Council, to inform their decision making, allow them to challenge the decisions

and actions of the council and participate in debate;

• The public interest in ensuring North East Lincolnshire Council can be held

accountable for it's decisions;

• The public interest in ensuring North East Lincolnshire Council are able to

effectively provide services and deliver outcomes for the community;

• The effect disclosure would have on the commercial interest of the third parties

in a competitive environment;

• The public interest in ensuring North East Lincolnshire Council are providing

value for money services.

In considering the factors in favour of disclosing the information it is considered that

any individual can contact the Council Tax department in order to understand how

payments they make are applied to their own account. If you have specific queries in

relation to how payments to your account may be handled we advise that you contact the

Council Tax department on (01472) 323840 or email [email address] who will then be

able to advise specifically on your circumstances.

North East Lincolnshire Council therefore deem that the information regarding how

payments are allocated against a person's council tax account is exempt from disclosure

by virtue of section 43 (2) of the Freedom of Information Act.

4. Despite the refusal to provide the information on the grounds of it being copyrighted, a

contributor (who posted an annotation on the website) noted that Milton Keynes Council used

the same "council tax system" (Northgate) as the Council. This person had also found some

relevant information in an internal audit report which was produced as a consequence of an

investigation into alleged manipulation of in-year collection figures. The relevant part of the

report which was also posted in the same annotation would more likely than not have been

what the Council did not want to disclose. The requester therefore asked the question in an

email to the Council on 17.6.14 if the content in the report amounted to the information it had

decided to withhold. The relevant content of the report is as follows:

“3.3.1 The collection and reporting of Council Tax income is straightforward when a tax

payer pays their annual charge within that year. Complexities arise when a

Council Tax Payer falls into arrears and owes the council money for past years as

well as the current year. There is significant case law (for example, Peter v

Anderson (1814)) however, put simply, if a person specifies which years debt the

payment should be assigned it should be assigned to that years debt.

3.3.2 The council tax system has built in allocation rules to ensure that the law with respect

to specified payments is met. For instance, if a customer has a payment plan for any

year of debt and the payment they make matches the planned instalment then the

money will be allocated to that year (this is known as “hard” allocation on the

council tax system). If the system is unable to “hard allocate” then it will instead

“soft” allocate and the debt will be used against the oldest debt unless manually

adjusted.

3.3.3 A total of 330 payments were selected, from the ICON system (the councils

income collection system), focussing on non-Direct Debit transactions in March

2008 and April 2008 (Direct Debit transactions are often used for the current

years debts; non-Direct Debit transactions will more likely be for arrears – hence

the emphasis towards these). A review of these payments showed that when

“hard” allocated to a year the correct year for allocation had been selected by the

council tax system. However, there are many instances where the payment was

“soft cash” (this is also known as unallocated or “floated” cash).

3.3.4 An example of a “soft cash” receipt would be on an account where instalments

for the current year were £100 a month and where there were arrears for the

previous year which were being paid off at £50 a month. The council tax payer

makes a payment of £25. The system will not know where to allocate this

payment and will therefore not (hard) allocate it to a specific year and instead

“float” it. However, this soft allocation does not affect the in-year collection rate

of the year the money is paid into. This is because, unless allocated manually (for

instance, by debt recovery officers that are monitoring accounts), the unallocated

cash will be allocated to the oldest debt outstanding. Therefore, the soft-

allocation of cash, is more likely to affect in-year collection rates adversely,

rather than improve them.”

5. The requester had found some other information on Cheshire East Council’s website relevant

to the allocation of payments when a taxpayer has arrears outstanding from previous years.

The software used was the same package for the provision of Council Tax as the Council

(Northgate). The requester therefore asked the question in an email to the Council on 14.9.14

if what was published (see below) on the website was relevant to the information it had

decided to withhold:

“Council Tax is a yearly charge normally paid in ten monthly instalments, starting

in April. Your bill must be paid by the 1st of each month unless you choose to

pay by Direct Debit. Your bill shows your payment dates and amounts. If you

have previous year’s arrears on your account it is particularly important that you

pay the exact amount of the instalment otherwise the payment will be allocated to

your arrears.”

6. The Council responded in an email (15.9.14) thanking the requester for the further comments

in relation to information request and stated that those comments would be passed onto the

service for their consideration. Despite the requester prompting the Council for its comments

on 11.11.14 concerned the potential for customers falling in arrears resulting from a flaw in

the Council Tax software, the Council considered that there was nothing to add.

Annex B

Council Tax Liability Order Court Costs –Test-Case

1. In April 2011 the Council increase its standard council tax summons costs by 120% by no

longer charging the costs which it traditionally imposed to obtain the liability order but front

loading it to the costs applied in respect of making the complaint and adding a sum equal to

23% of the aggregate of the previously applied costs. The decision was agreed by members

following public consultation in relation to the Council’s 2011/12 budget setting and was the

preferred measure over alternative proposals to introduce a charge for replacement bins or

garden waste collections. The measure aimed to achieve savings by generating £188,000

additional each year in court costs income.

2. The Defendant believed this manoeuvre to be unlawful; an opinion reinforced by the fact that

it is held on record that the Council wrote advising the Magistrates’ court that the decision had

been taken to increase the court costs without any evidence to support that its incurred

expenditure had increased.

3. Subsequent to an unsuccessful attempt to obtain a breakdown of the costs via FOI the

Defendant took the decision to test the lawfulness of costs in the Magistrates’ court which he

undertook by defaulting on payment until summonsed to court. He considered the issue in the

public interest which was one of the reasons for posting everything relevant to the matter on a

public help forum dealing with council tax issues.

4. The other reason stems from the Defendant’s alarming experiences of having to endure the

dishonest way in which the Council carries out internal investigations into concerns raised

where no fault is usually found and complaints invariably not upheld. Watchdog organisations

that are in place to preside over such malpractice can not be relied on to function as they

should and add to, rather than lessen the problem. This is why the Defendant endeavours to

have all matters of this nature recorded publicly so at least any evidence of maladministration

– which the Council must rely heavily on being kept from the public – does not remain

private.

5. The first of these horrendous experiences occurred after the Defendant voluntarily left

employment on health grounds and supported himself financially, in order to be free of the

hoops through which one is normally expected to jump when being beholden to the state. The

plan was to pursue skills, unhindered, which were necessary to achieve the intended change in

direction. This worked for several months and would have continued had the Council not

begun court proceedings for non-payment of Council Tax. Having no income whatsoever, the

Defendant relied on drawing upon savings which were not instantly accessible to meet

demands such as council tax and thus caused minor cash flow issues. This action was

therefore not taken for non-payment, but because the law provides for the instalment facility

to be withdrawn after two late payments, meaning payment in full is demanded immediately.

6. Failure thereafter to raise the lump sum permits the council to obtain a liability order through

the court which in turn gives it powers to instruct bailiffs. The authority carried out this action

despite full payment being made each month and subsequently instructed its bailiffs to collect

an outstanding sum which was entirely paid off by the time they began to pursue it.

7. This however, was only the root of it. What followed was the discovery that the bailiff firm

instructed to carry out enforcement (and probably every other such firm) had the Council’s

full support to defraud their council taxpayers by imposing charges for phantom visits and

other fraudulent fees10

. When complained about, the bailiff’s side was always taken on the

lamest premise that they were governed by some or other governing body. It also became

10

Hundreds of pounds were added to the Defendant’s council tax liability by the Council’s bailiff contractor. As fraud

was suspected the police were informed. The police's economic crime section concluded the attempted fraud was a civil

matter to be taken up with the Council. The authority covered up fault wherever possible throughout the formal

complaints procedure, taking its contractor’s side, on the basis they are governed by some national code of practice.

Ultimately, however, it was the then Chief Executive who made the decision not to uphold allegations of fraud, making

him complicit to the crime. The LGO was then contacted with the naive assumption it would investigate and put things

right. It proved equally biased and after several months made no attempts to investigate.

On researching further, it's discovered that private bailiff firms contracted to councils, are notorious for defrauding

householders pursued by councils. With this, and other information obtained through the council's complaints, it is

confirmed that several fraud attempts were made. New evidence was submitted to the police, and again this was fobbed

off with several excuses for not allowing an investigation. Naively this was escalated to the IPCC, which turned out as

ineffective as the Council, police and LGO. The failure didn't stop at the LGO, police and Council; it extended to the

county court where a Judge found that the bailiff's fitness was not in question after being presented with evidence of the

fraudulent way he'd imposed charges.

The Information Commissioner’s Office (ICO) next failed to function as it should regarding breaches of the Data

Protection Act. Letters left by the bailiff, categorised as "of a sensitive nature" (threatening to remove goods) were left

available for any member of the public passing. The ICO was contacted; who, after spending several months,

determined the bailiff’s actions were not in breach of the Act. These organisations were given the chance to prove they

were independent and unbiased but all failed and proved rather that they are sham organisations put in place at the

expense of the taxpayer to fake accountability.

apparent from a distinct pattern of cover-ups by taxpayer funded watchdog organisations that

the bailiff’s were able to carry on their crimes unchallenged by the authorities. Public bodies it

seems are reluctant to uphold complaints about another.

8. Turning to the published content (council tax liability order test case). What had set out

simply to be an exercise to record the procedure that would hopefully lead to the Magistrates’

court tackling the apparent unlawful application of summons costs, escalated far beyond that.

The entries took the form of a guide providing the steps required in pursuing Case Stated and

Judicial Review High Court procedures. The initial entries formed the evidence that was

submitted to the Magistrates court to challenge the Councils liability order application which

focussed on the changes it had implemented in April 2011.

9. It became evident around July 2013 that the Reverend Paul Nicolson who heads the campaign

group, ‘Taxpayers Against Poverty’ decided upon bringing to the attention of the Magistrates

the hardship on residents that was caused because of the summons costs that were added to

late and non-payers of council tax by Haringey Borough Council.

10. The announcement of this action in a number of press articles coincided at around the stage

when the Defendant had been served a ‘Draft’ of a case stated that had been prompted by a

judicial review claim for a mandatory order. The Defendant had already done a substantial

amount of research into various local authorities and built up a reasonable collection of

relevant material, some of which was in connection with Haringey Borough Council. He

followed the Reverend’s case with interest and though not getting involved directly made the

effort through anonymous means to ensure as far as possible all information in respect of the

proceedings, which were taking a similar direction as his, were accessible to the Reverend.

11. It is evident from the Haringey case that the Magistrates similarly sought to prevent the

Reverend’s appeal coming before the Queen’s Bench by refusing to state a case. A claim for

judicial review for a mandatory order was subsequently made for which permission was

granted to bring judicial review of the decision by the Magistrates to award the costs against

the Reverend. At around this time the Reverend had secured representation via the Bar Pro

Bono Unit who had up until then been acting in person.

12. That case has since been determined and resulted in a successful appeal with judgment

praising the appellant and Pro Bono legal reps for bringing the case before the court. Mrs

Justice Andrews described the appeal, R (Nicolson) v Tottenham Magistrates [2015] EWHC

1252 (Admin), as raising 'issues of significant public interest to both council tax payers and

local authorities'. It is believed that the costs awarded (apparently donated to the access to

justice foundation) were in the sum of £33,000. It therefore seems grossly unjust that the

Magistrates in the Defendant’s case have failed for three years to progress the appeal and the

relevant departments of the Ministry of Justice have not even responded to complaints made

regarding this failure.

13. This gross injustice is then compounded knowing that it is almost certain (or else a remarkable

coincidence) that Mrs Justice Andrews’ had been provided with the various papers submitted

by the Defendant in an appeal to the Information Rights Tribunal (Ref: EA/2013/0285) which

assisted the production of her judgment in the Haringey case.

Annex C

Correspondence before / after withdrawal of Judicial Review claim

[C-1] Covering letter and statement for the delay of production of the draft case

24 July 2013

[Appellant’s Address]

Dear Mr Xyxyxy

Re: North East Lincolnshire Council V Xyxy Xyxyxy

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012

Application to State a Case

I refer to your request for the Justices to state a case for the opinion of the High Court in

respect of the above-mentioned proceedings.

Enclosed herewith is the draft case that has been prepared, together with a statement of the

delay for production of same.

May I respectfully draw to your attention that in accordance with rule 77 (2) of the

Magistrates' Courts Rules 1981 you have 21 days from receipt of the draft case to submit any

written representations that you may have upon its content.

I shall be grateful if you kindly acknowledge receipt of this correspondence.

Yours sincerely

Mrs A Watts

Justices' Clerk

STATEMENT IN ACORDANCE WITH RULE 79(1) OF THE MAGISTRATES'

COURTS RULES 1981

APPLICATION TO STATE A CASE MADE BY XYXY XYXYXY

It was not possible to comply with rule 77(1) of the Magistrates' Courts Rules 1981 for the

following reasons:

1. The application to state a case was made on 22 November 2012. This was shortly

before the Deputy Justices' Clerk who advised the Justices at Mr Xyxyxy's hearing

on 2 November 2012 and the person who would ordinarily have advised the Justices

in connection with the application to state a case left the service of Her Majesty's

Courts and Tribunals Service.

2. The matter was escalated to the Justices' Clerk. This caused a delay as the Justices'

Clerk had then to review the case papers and discuss the matter with the Justices to

seek their views on whether it was it would be appropriate to state a case or to refuse

to state a case on the grounds that the application was frivolous. The Justices decided

that they would state a case but required a recognizance from Mr Xyxyxy before

doing so.

3. On 24 January 2013 correspondence was sent to Mr Xyxyxy indicating that in

accordance with section 114 of the Magistrates' Courts Act 1980, that before stating

a case the Justices required a recognizance from to prosecute the appeal without

delay. To date Mr Xyxyxy has not entered into such a recognizance.

4. On 29 April 2013 Mr Xyxyxy corresponded with the court indicating concern with

the request for a recognizance and asking for a certificate of refusal to state a case,

and that if the latter were declined, that he would seek permission for a Judicial

Review.

5. On June 2013 Mr Xyxyxy made an application to the Administrative Court for

permission to seek a Judicial Review of the court not to supply him with the draft

case and to seek a mandatory order that the Justices state a case.

6. On 8 July 2013 the Court responded to the application for a Judicial Review by

indicating it was still awaiting Mr Xyxyxy to enter into a recognizance before stating

a case and had not refused to state a case at all. However, in the interests of avoiding

any further delay in the case, and in an endeavour to save the costs of hearings in the

Administrative Court of both an application for Judicial Review and an appeal by

way of case stated, the Justices have decided to proceed to produce and deliver a

draft case to Mr Xyxyxy.

Dated the 22nd day of July 2013

Justices' Clerk

[C-2] Covering letter for representations made on the content of the draft case

[Doncaster Magistrates’ Court]

19 August 2013

Dear Mrs Watts

Re: North East Lincolnshire Council V Xyxy Xyxyxy

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012

Application to State a Case

I refer to your request for the Justices to state a case for the opinion of the High Court in

respect of the above-mentioned proceedings.

In accordance with Rule 77 (2) of the Magistrates' Courts Rules 1981, there is enclosed,

representations made on the content of the draft case.

May I respectfully draw to your attention that in accordance with rule 78 of the Magistrates'

Courts Rules 1981 you have within 21 days after the latest day on which representations may

be made under rule 77 to state and sign the case.

Yours sincerely

X. Xyxyxy

[The Council]

19 August 2013

Dear Ms Richardson

Re: North East Lincolnshire Council V Xyxy Xyxyxy

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012

Application to State a Case

In accordance with Criminal Procedure Rules Part 64.3 (6), there is enclosed, representations

made on the content of the draft case.

Yours sincerely

X. Xyxyxy

[C-3] Order by the High Court (Judicial review) on the progress of the draft case

In the High Court of Justice

Queen's Bench Division

Administrative Court at Leeds

CO Ref: CO/7281/2013

In the matter of an application for Judicial Review

The Queen on the application of XYXY XYXYXY

Versus

GRIMSBY MAGISTRATES’ COURT (Defendant)

NORTH EAST LINCOLNSHIRE COUNCIL (Interested Party)

On the application by the claimant for judicial review

Following consideration of the documents lodged by the parties

Order by His Honour Judge Roger Kays QC sitting as a judge of the High Court

The defendant undertook to serve a draft of a Case stated on the claimant within 14 days of

the Acknowledgement of service (8 Jul 13). It is noted the claimant asked for a case stated by

letter 29 Apr 13 under s 111 MCA 1980. The court would like to know what has happened.

The fourteen days have now expired.

Reasons

As indicated

Signed 14 Aug 13

_________________________________________________

Sent to the claimant, defendant and any interested party / the claimants, defendants and any interested party's

solicitors on (date): 03.09.13

[C-4] Claimant’s (Judicial review) reply to High Court order

[Administrative Court Office at Leeds]

06 September 2013 Ref: CO/7281/2013

In the matter of an application for Judicial Review

The Queen on the application of XYXY XYXYXY

Versus

GRIMSBY MAGISTRATES’ COURT (Defendant)

NORTH EAST LINCOLNSHIRE COUNCIL (Interested Party)

The defendant has served the draft Case on the claimant, received July 30, 2013.

Representations were made on the draft case in accordance with Rule 77 (2) of the

Magistrates' Courts Rules 1981 (Criminal Procedure Rules Part 64.3 (6)), and served on the

defendant and interested party 19 August 2013.

In accordance with rule 78 of the Magistrates' Courts Rules 1981 the defendant has within 21

days after the latest day on which representations may be made under rule 77 to state and sign

the case.

Yours sincerely

X. Xyxyxy

[C-5] High Court recommendation to withdraw Judicial review claim

[Claimant’s Address]

Our ref: CO/7281/2013

Your ref: <none>

12/11/2013

Dear Sir/Madam

Re: The Queen on the application of XYXY XYXYXY v GRIMSBY MAGISTRATES

COURT

Further to your letter dated 06/09/2013 it appears that you have now received a draft case

stated and have made your response upon that draft. In the light of the response filed by the

magistrates' court, I also assume (rightly or not) that you have now entered into the required

recognizance in accordance with the rules.

As your judicial review claim was against what was claimed to be the refusal to state a case

without entering into a recognizance, it appears that this outcome has now been achieved.

I would be obliged if you would contact the court by return to advise whether you are now

withdrawing this judicial review claim as there no longer appears to be a need for further

action on the part of the High Court, the process of stating a case now being underway (if not

completed).

Please note: it remains a requirement that an appellant lodges with the High Court any final

"case stated" within 10 days of receipt (which can be extended on application if necessary).

There is a fee of £235 (or an application for fee remission). This is a separate matter from the

judicial review claim.

Yours faithfully

Administrative Court lawyer

for Court Manager

[C-6] Claimant’s notification to withdraw Judicial review claim

[Administrative Court Office at Leeds]

Your ref: CO/7281/2013 20 November 2013

Dear Sir/Madam

Re: The Queen on the application of XYXY XYXYXY v GRIMSBY MAGISTRATES

COURT

I'm asked to advise the court whether I will be withdrawing this judicial review claim as it

deems there to be no longer a need for further action on the part of the High Court.

Representations have been made upon the draft case though I've neither entered into a

recognizance nor since been asked to. The purpose of the judicial review claim was, I

believed, to mandate the Justices to state the case without being subject to terms of a

recognizance.

I had viewed that agreeing such terms would pose risks, potentially greater than subjecting

myself to forfeiture of the proposed sum – if, for example, to avoid a penalty the appeal was

prosecuted knowing that the stated case omitted the points in law I was questioning. In terms

of successfully appealing the decision I would be disadvantaged from the outset and

disproportionately exposed to the financial risks of incurring costs. It could be argued that in

these circumstances, requiring recognizance would either be denying my access to justice or

unduly burdening me financially, as presently I'm in receipt of no income.

Although the claim prompted service of the draft case, it still remains that delivery of the final

signed case has, in accordance with CrimPR Part 64, rule 64.3(7), overrun by approximately

two months. Presumably then, the agreement detailed in the acknowledgement of service was

only to serve the draft case.

I am therefore in the same position now as I was before the claim for a mandatory order as it

seems the Justices will unlikely deliver the signed case unless recognizance is entered into.

However, where my queries with the Magistrates' court went unanswered, the judicial review

process succeeded in drawing from the Clerk that if I had appeared before the court to enter

into a recognizance, its appropriateness and/or the amount could have been considered. This

is exactly the information I was seeking and would never have obtained had I not proceeded

with this claim for judicial review.

Knowing as I do now, that a possibility exists to negotiate terms which are mutually

acceptable, it seems arranging to appear before the court to enter into a recognizance is now

appropriate.

In light of the Justices expressing regard for the Administrative Court's time and public

money, it would also seem appropriate, if, whilst appearing before the Magistrates' Court to

agree terms of a recognizance, I also seek agreement to terms of an order that the court

consider the matter on the papers and that there be no order as to costs, as the case involves a

matter of general public importance.

After considering the options that appear available to me now, please take this as formal

notice that I am withdrawing this judicial review claim.

Yours sincerely

X. Xyxyxy

[C-7] High Court provisional acceptance to close the case (Judicial review claim)

[Claimant’s Address]

Our ref: CO/7281/2013

Your ref:

25 November 2013

Dear Sir/Madam

Re: The Queen on the application of XYXY XYXYXY v GRIMSBY MAGISTRATES

COURT

I am writing to inform you that your letter in the above case was received by this office on

22/11/2013.

Unless you hear from us within four weeks from the date of this letter, you can assume that

your letter to withdraw has been accepted and the Court file has been closed.

Please note that all copy documents in the above matter will be destroyed immediately

following the closure of the case, unless you have already notified the court that you would

like them returned.

If you require any further information, please contact the Administrative Court Office General

Office on 0113 306 2578.

Yours faithfully

For Court Manager

[C-8] Querying failure to deliver final signed case stated

[Doncaster Magistrates’ Court]

10 January 2014

Dear Mrs Watts

Re: North East Lincolnshire Council V Xyxy Xyxyxy

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012

Application to State a Case

I refer to the draft case received 30 July 2013 and the 21 day time limit from receipt of the

draft case to submit any written representations upon its content.

May I bring it to your attention that on 19 August 2013, representations were served together

with letter advising the Court it had (from the latest day on which representations may be

made) 21 days to state and sign the case in accordance with rule 78 of the Magistrates' Courts

Rules 1981.

Accordingly, the final signed case was expected on or before 10 September 2013 (overrun by

4 months). I would therefore like to know why the justices have decided against complying

with the relevant rules.

Yours sincerely

X. Xyxyxy

[C-9] Second query into the failure to deliver final signed case stated

[Doncaster Magistrates’ Court]

13 February 2014

Dear Mrs Watts

Re: North East Lincolnshire Council V Xyxy Xyxyxy

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012

Application to State a Case

Further to there being no response to my letter of 10.1.14, I am left not knowing why the

justices did not state the case in accordance with rule 78 of the Magistrates' Courts Rules

1981.

It must be assumed that the court only gave an undertaking to serve the draft case, re

acknowledgement of service (Judicial Review 8.7.13) and not intended delivering the case

stated until recognizance had been agreed.

As a consequence of the judicial review claim, I understand that despite a sum (£500) being

stated in your letter (24.1.13), the appropriateness and/or the amount may be considered on

agreeing recognizance. It would appear that if this appeal is to be progressed it will be

conditional on entering into recognizance. I therefore ask that arrangements are made for this

to take place and await your response.

Yours sincerely

X. Xyxyxy

[C-10] Justices’ Clerk advising that the next steps would be communicated in writing

From: Watts, Alison

To: 'Xyxy'

Sent: Thursday, March 06, 2014 9:06 AM

Subject: Case Stated

Good Morning Mr Xyxyxy

I am sorry that I have not been available to speak with you when you have called my office.

I understand that it is not possible for me to contact you by telephone and that you would

prefer me to contact you by e mail.

I am due to be in meetings all day today but I will have written communication with you

either later today or first thing tomorrow setting out the position with your case and advising

you on next steps.

Yours sincerely

Alison Watts (Mrs)

Justices' Clerk for Humber and South Yorkshire

[C-11] Request for certificate stating that the application has been refused

[Doncaster Magistrates’ Court] 22 April 2014

Dear Mrs Watts

Re: North East Lincolnshire Council V Xyxy Xyxyxy

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012

Application to State a Case

Thank you for your email of 6 March 2014 in which you stated:

“I will have written communication with you either later today or first thing tomorrow

setting out the position with your case and advising you on next steps”.

I did not receive the aforementioned communication, neither have subsequent calls to your

office made 19 and 28 March prompted a response. The net result being that the case, for

which the Magistrates owe a legal duty to state for the opinion of the High Court, has not

been stated.

As no contact has been made regarding my 13 February 2014 letter to agree recognizance and

every attempt to proceed with the appeal has drawn a blank, it appears the court is refusing to

state the case.

Pursuant to section 111(5) of the MCA 1980, a magistrate can refuse to state a case, but must

consider the application 'frivolous'. The meaning of the term was considered by the Civil

Division of the Court of Appeal in (R v Mildenhall Magistrates' Court, ex p Forest District

Council). The then Lord Chief Justice in considering the meaning of 'frivolous' was of the

view that in the context, the Court should consider the application to be futile, misconceived,

hopeless or academic. He went on to say that such a conclusion was not one to which the

justices can properly come simply because they consider their decision to be right or immune

from challenge.

Presuming the application is not considered 'frivolous' (a draft has been produced) there is no

obvious reason why the court has not stated the case as legally required. However, as the

court may only refuse on these grounds then I require a certificate stating that the application

has been refused (section 111(5) MCA 1980) setting out the reasons why, so I may under

section 111(6) seek a second mandatory order from the Administrative Court requiring the

case to be stated.

Yours sincerely

X. Xyxyxy

[C-12] Enquiry into whether a measure to restrict contact was in place

From: 'Xyxy'

To: Watts, Alison

Sent: Wednesday, July 09, 2014 11:18 AM

Subject: Restricted Contact - Application to State a Case - Grimsby Magistrates' Court

Dear Mrs Watts

Restricted Contact – Application to State a Case - Grimsby Magistrates' Court

With regards communication with Humber and South Yorkshire, I would like informing

whether Her Majesty’s Courts and Tribunals Service has any arrangements in place to restrict

my contact.

If so, I wish to know in what/which way(s) the organisation has restricted contact. For

example, this may be by telephone, email, letter etc., or a combination of these. It may be that

the organisation has blocked emails without telling me and would like to know if this is the

case.

I look forward to your response.

Yours sincerely

X. Xyxyxy

Annex D

Documentary evidence of the Defendant’s continued challenged of the costs

[D-1] Application to quash liability order with Magistrates court’s letter attached

From: Xyxy

Sent: 06 February 2013 09:42

To: Robinson, Joanne

Subject: Re: Application to State a Case - Grimsby Magistrates' Court

Dear Ms Robinson

Re: Section 82 of the Local Government Act 2003 – Application to quash liability order

Account 1234567891

You will see from the attached that the justices dealing with my application to state a case to

the High Court are exercising their rights under section 114 of the Magistrates' court Act 1980

and requiring I enter into recognizance in the sum of £500.

The supporting papers accompanying my application to state a case have provided evidence

that my gross annual income is substantially below the set level, and so qualified for full

remission of the Magistrates’ court fee (£500). Consequently, setting an additional fee of

£500 in these circumstances is effectively denying my access to the Courts.

I have explained in the attached that I will be contacting the council to seek an alternative

remedy, should the recent obstacles put in the way of the application, not be overcome.

I'm therefore requesting that North East Lincolnshire council apply to the Magistrates court

under section 82 of the Local Government Act 2003 to either quash the liability order for £60

obtained on the 2nd November 2012, or apply for a lesser amount than that for which the

original order was made. Perhaps the £10 already paid, i.e., reasonable costs.

Yours sincerely

X. Xyxyxy

P.S. I have had no contact from your bailiffs Rossendales since the council threatened in a

letter dated 19 December 2012 to instruct them within 14 days. Do I take it that NELC have

not and will not be instructing its bailiff contractor to enforce the sum of £60 and the council

consider the amount no longer owed.

EMAIL ATTACHMENT

[Doncaster Magistrates’ Court]

05 February 2013

Dear Mrs Watts

Re: Application to State a Case – Grimsby Magistrates’ Court

Thank you for outlining the next steps and clarifying that the agreement for the justices to

state a case is conditional on entering into recognizance. However, there are some points I

would like clarifying, one being the terms of the recognizance detailed in your letter appear

not strictly in accordance with section 114 of the MCA 1980.

Your letter implies the case would be delivered without payment as the recognizance would

be subject to forfeiture only upon failure to prosecute the appeal. This appears relevant only to

a criminal matter as Section 114 draws a distinction for such a case. In non-criminal matters

“a justices' clerk shall not be required to deliver the case to the applicant until the applicant

has paid the fees payable for the case and for the recognizances to the designated officer for

the court.”

It is also conditioned under the same to pay any High Court costs which that Court may

award, whilst in your letter it is unclear whether the recognizance would include this.

On an application to state a case for the opinion of the High Court, the fees listed as payable

under schedule 1 of the Magistrates’ Courts Fees Order are £500. It also states that where this

is payable, no further fee is payable in respect of the preparation of a draft case by the

justices’ clerk for taking recognizance.

The justices – once deciding that a recognizance is necessary – must take the applicant's

means into account in setting the amount. A completed EX160 form accompanied my

application to the Magistrates’ court to state the case (22 November 2012). The supporting

papers detailing my gross annual income provided evidence that this was substantially below

the set level, and so qualified for full remission of the Magistrates’ court fee.

It is therefore illogical that by completing form EX160 (effectively means tested) I qualified

for full remission of the £500 Magistrates’ court fee, whilst the justices, after presumably

taking my means into account, concluded that the recognizance should be £500. Setting such

a fee in these circumstances could be seen as a denial of access to the Courts.

It is noted that since the appeal was lodged, the court has taken two months to make contact

on this issue. I was not notified that Mr Draper had left the service and his email account

closed down, until I’d prompted the court. I therefore have concerns that this application

would have been overlooked completely if the failure to correspond had not been queried.

I have further concerns about who would be landed the task of preparing the draft case as it

was Mr Draper – no longer in the employ of HMCTS – who was in attendance and advisor to

the justices on the day of my hearing. It would also appear that an unusually high turn over,

either through reorganisation or redundancies has left the Grimsby Magistrates’ court lacking

any staff to fulfil the role of justices’ clerk.

Although the current Criminal Procedure Rules are unclear whether a time limit applies, 64.2

of the 2011 rules specifies that a draft case shall be sent to all parties within 21 days after

receipt of an application. That is of course unless the justices refuse to state a case under

section 111(5) of the MCA 1980. That has not happened, as requiring recognizance

conditioned to prosecute the appeal, does not constitute a refusal to state a case.

Aside from the above I have to assume that – if not frivolous – the justices consider the

application lacking in merit or have concerns that the appeal may not be pursued, and is why

they have made their agreement to state a case conditional on entering into a recognizance.

Regardless of whether justices agree to state the case, it still remains that the court issued a

liability order where there was no evidence on which the Magistrates could have found their

decision. Consequently North East Lincolnshire Council has threatened to recover, through

their bailiffs, the amount specified on the order, despite there being no supporting evidence

put before the magistrates.

I will therefore make a suggestion that the court considers the possibility of reopening the

case under the provision of Section 142 of the MCA 1980 to rectify the mistake and set aside

the liability order. I’m aware Magistrates’ court’s powers are purely statutory and s.142

applies only to reopening criminal cases, however, I believe the authority to set aside liability

orders has now been established as a common law principle developed in case law.

There is also the possibility that the local authority apply under section 82 of the Local

Government Act 2003 to have the liability order quashed. I will put this to the council and

suggest they do this or apply for a lesser amount than that for which the original order was

made. Perhaps the amount already paid, i.e., reasonable costs.

Yours sincerely

X. Xyxyxy

[D-2] Council’s refusal to quash liability order / undecided on action to enforce the order

By ‘e’ mail

8th

February 2013

Dear Mr Xyxyxy

Council Tax Liability Order

Thank you for your ‘e’ mail of 6th

February 2012.

I am not prepared to apply to the Magistrates Court to quash the liability order obtained on 2nd

November 2012. The liability order was correctly obtained for the outstanding balance due at

that time.

No decision has been taken at the present time regarding further action to enforce the debt.

Yours sincerely

Joanne Robinson

Local Taxation & Benefits Shared Service Manager

[D-3] Letter to the Council querying issuing reminder for non-payment erroneously

[The Council]

22 April 2013

Dear Ms Robinson

Re: Council Tax Reminder – Acc 1234567891

A computer generated letter received on 19/04/13 threatens summons costs of £70, instalment

facility withdrawal and demand for immediate payment for the entire Council Tax liability if

payment is not made in accordance with the request.

I can confirm already making payment in respect of April's instalment and believe the council

has made a mistake.

I presume because disputed costs have been carried forward to this year's account and were

not included in my payment, the council tax system has "soft allocated" funds, therefore

leaving an overdue amount on this year's account. This, if not reversed, will inevitably

involve unnecessary legal action.

Though outlining the probable cause, I suspect the error is not straightforward. The council's

software appears unable to function correctly in circumstances where a balance has been

carried forward from a previous year.

The discrepancy surrounds the sum of the total balance becoming payable. The stated sum

excludes an amount equal to the costs carried forward, but is what makes up the overdue

amount. The system is in effect demanding last year's costs (an unrelated matter) as an

overdue amount from this year's council tax but simultaneously having no account for it in the

total balance. It could be then, that by raising this, a serious programming error in the Council

Tax software has been identified which I trust will be investigated on resolving my own

issues.

I doubt this has been a deliberate act for the purpose of generating extra summons revenue,

but if it transpires it has been engineered to cause default, I will not hesitate escalating this to

the Local Government Ombudsman. In the more likely case this glitch has occurred as a

consequence of its Council Tax software package, I request the misallocated funds are

reallocated to this year's account thereby offsetting my 2012-13 liability. If the department

deems this to be outside its powers, I ask that the judgment of "Peter v Anderson" is sought.

This does raise another important point in regards the incurred summons cost claimed by the

authority. It is questionable how nearly a million pounds each year can be incurred in a

largely automated process. The absence of human involvement is evident in the authority's

apparent confidence that its council tax system can be depended on to function correctly and

progress to recovery without any monitoring, as the erroneous notice highlights.

Yours sincerely

X. Xyxyxy

[D-4] Complaint to Local Government Ombudsman (LGO)

[Local Government Ombudsman]

13 May 2013

What do you think the body did wrong?

I have a situation where if I exhaust the councils formal complaints procedure, the issue will

have likely escalated to having to appeal a liability order which as you will appreciate can

only be done in the High Court.

In any event it is unlikely that the council would cooperate and reply to a formal complaint. I

have up until now had no cooperation or response to a letter which I have included in the

complaint (see attached).

There is a sum outstanding from 2012-13 council tax liability, for which the council has a

liability order. This sum has been carried forward to this year's liability. The effect of doing

this has engineered a default situation, even though my payments for this year's account are

being kept up to date. It is my belief that this year's council tax liability and that outstanding

in respect of the liability order from 2012-13 are separate accounts and should be treat

completely independent of one another. However, the sums relating to both accounts have

been aggregated into one lump sum and for all intents and purposes being treat as one

account, i.e., 2013-14 (this years).

I wrote to the council (see attached) on 22 April 2013 and despite an email sent on 26 April

asking to acknowledge receipt of that letter, it has still not been addressed.

I received a letter on 19 April 2013 threatening instalment withdrawal, demand for immediate

payment for the entire Council Tax liability and summons costs of £70 if payment was not

made in accordance with the request. This situation has occurred due to the council

misallocating payments and causing me to default. The refusal of the council to cooperate

concerns me that they will overlook the request I made asking them to reallocate payments to

this year's account in accordance with the judgment of "Peter v Anderson" which states that

"a person who is indebted to another on two several accounts, may, on paying him money,

ascribe it to which account he pleases.–and his election may either be expressed,-Or may be

inferred from the circumstances of the transaction."

How has this affected you?

The error has caused the inconvenience of having to dispute the council's actions and the

subsequent refusal to cooperate has caused the need to research the position from a legal

standpoint, and of course enter into a complaint with the LGO.

Foreseeably, this will cause the need for a defence to be drafted and an appearance in front of

the bench at a liability order hearing. The Magistrates' court appearance in itself is likely to

take several hours. Additionally, in the likely event the Bench is incompetent and grants a

liability order there will be £70 summons costs incurred and may well be subjected to bailiffs

knocking on my door. Then of course the inconvenience and expense of appealing the

liability order in the High Court could be added to the problems North East Lincolnshire

Council is causing me.

What do you think the body should do to put things right?

North East Lincolnshire Council should offer payment of a suitable amount firstly as

compensation for the error, and secondly for the intransigent way it refused to cooperate,

causing the added inconvenience I'm being put through.

A very good idea if it were possible would be to have key managers responsible for the

negligence and maladministration be made to engage in some disciplinary measures or re-

education with the threat of instant dismissal should they not attend or conform.

[D-5] Letter to Manager querying second reminder for non-payment erroneously

[The Council]

21 May 2013

Dear Ms Robinson

Re: Council Tax Reminder – Acc 1234567891

Further to my letter of 22 April 2013 my account now appears to have been adjusted, i.e., the

£60 from a previous liability order has been separated from my current year’s CTAX account.

For your information, I haven’t received a reply to the queries I made then. I have, however,

received another computer generated letter on 20 May 2013 (dated 14 May). This appears to

be a second reminder and specifies an overdue amount of £11 which I will come to later.

The overdue amount outstanding on the previous year's liability order is now correctly being

treated separately, however, the sum is now included in the total balance becoming payable

immediately should the council have need to withdraw the instalment facility – previously it

wasn’t.

The adjustment made has not completely solved the error on my account. Clearly a possibility

still exists where the council could obtain a liability order incurring summons costs as a

consequence of the two accounts being treated as one in the event the instalment facility is

withdrawn.

Please see that the sum outstanding on the liability order is considered as a

separate balance at all times.

I have checked my bank accounts showing two payments were made in respect of my first

instalment totalling £80.33. These were made on 2 April 2013 and split between two

accounts, the sums being £72.33 and £11.00. My second instalment of £88.00 was made 1

May 2013 and assume because all payments have been debited from my account should mean

this year’s account is up to date.

Please ensure all payments have been correctly allocated to my account.

I have an observation which you probably should be made aware of and surrounds the

inconsistency with the reminder notices. It is my understanding that at this stage, according to

the apparent shortfall, there should not have been a second reminder but a notice of instalment

withdrawal and demand for the total outstanding balance.

X. Xyxyxy

[D-6] Council’s reply to query of reminders sent for non-payment erroneously

5 June 2013

[Defendant’s Address]

Dear Mr Xyxyxy

Council Tax Reminder - account 1234567891

I refer to your e-mailed letter of the 22/04/13 and apologise for the delay in replying.

A payment was received from you in April via Standing Order from your bank which you

state was to cover your 1st April instalment. This payment was not made in accordance with

the amount requested on your annual bill as unfortunately there was an £11.00 shortfall for

the instalment due on the 1st April. The amount that was due from you at that time should

have been £83.33 however only £72.33 was received from you leaving a £11.00 shortfall in

your payment.

As a result of the wrong amount being paid the amount received was not able to allocate

automatically to your first instalment. In these circumstances the monies will automatically

default and reduce any outstanding amount due from previous years including any

outstanding costs. The reminder was therefore sent out for the deficit on your first instalment

namely £60.00 which defaulted to cover your previous years costs plus the £11.00 shortfall

totalling £71.00.

As requested I will arrange to have the monies reallocated to your 2013/14 instalment plan

however please be advised that a reminder would have been issued to you in any event as a

result of your payment having an £11.00 shortfall.

To avoid any further unnecessary reminders/ recovery notices being produced to you please

ensure that payments are brought up to date and any payments that you make in the future are

made in accordance with the instalments shown on your bill using the correct reference.

Yours sincerely

Council Tax Team Leader

[D-7] Letter from Local Government Ombudsman

14 June 2013

[Defendant’s Address]

BY EMAIL

Our ref: 13 002 919

Dear Mr Xyxyxy

Thank you for your complaint against North East Lincolnshire Council. We have allocated

your complaint reference number 13 002 919. Please quote this number whenever you contact

us.

The law says that, before investigating a complaint, the Ombudsman must normally be

satisfied the Council knows about the complaint and has had an opportunity to investigate and

to reply. All local authorities and many other bodies use their own complaints procedures,

which may be different for certain types of complaint. The Council will be able to tell you

more about these procedures.

Usually we expect people to have exhausted complaints procedures before we consider

whether to investigate their complaint. This is because the Council is best placed to resolve

things that have gone wrong. From the information I have, your complaint has not been right

through the Council’s complaints procedure.

I will therefore send a copy of your complaint to the Council today. I will ask it to put the

complaint through the correct procedures or to respond to your complaint in a different way if

that is more suitable. I will also ask the Council to ensure it meets any time scales in the

complaints procedure, and that it keeps you informed about what is happening.

Next steps

When the Council tells you it has completed considering your complaint, if you are not happy

with its response or the way it has dealt with you, please telephone us on 0300 061 0614. Tell

our adviser that you have had this letter and quote our reference number 13 002 919. It would

help if you have with you the Council’s response to your complaint when you call, as our

adviser will ask you some questions about what the letter or email says.

The adviser will then send your resubmitted complaint to the Assessment Team so we can

decide whether your complaint is one we need to investigate.

Please note that if you did come back to the Ombudsman, she may be unable to investigate

your complaint on the basis that you would have a right of appeal to the Valuation Tribunal

about a decision on council tax liability.

Yours sincerely

Assessment Team Co-ordinator

[D-8] Formal complaint regarding summons costs itemised on Council Tax Bill

[The Council]

15/03/14

Dear Sir/Madam

Re: Council tax Ref: 1234567891 – Formal Complaint

The following is quoted from my 2014/2015 Council Tax demand.

“MEMORANDUM NOTE

YOUR INSTALMENTS FOR 2014/15 DO NOT INCLUDE YOUR 2013/14 ACCOUNT BALANCE

AS AT 20-FEB-2014 YOUR 2013/14 COUNCIL TAX ACCOUNT BALANCE IS 60.00

60.00 OF THE TOTAL IS SUBJECT TO COURT PROCEEDINGS”

The “60.00” relates as far as I’m aware to £60 court summons costs. I consider the Liability

Order to enforce this sum was obtained fraudulently by North East Lincolnshire Council

(NELC), and therefore require it be removed from my account.

Justifying my allegations of NELC’s fraudulent actions:

Evidence that NELC obtained the Liability Order fraudulently lies in a calculation it produced

to support its claim that the standard costs sought in respect of instituting the Summons was

no more than it reasonably incurs (see Summons Cost Calculation 2012 /13), NELC’s

website, direct link:

http://www.nelincs.gov.uk/GetAsset.aspx?id=fAAxADYAMgA4ADAAfAB8AFQAc

gB1AGUAfAB8ADAAfAA1

It is clear from the calculation that NELC inappropriately raises revenue through Magistrates’

Court Summons costs to account for large parts of its annual budget for running the Council

Tax department. Please note that if an individual were to bring a case (for example against a

Local Authority) and ask the bench to award his costs, the Magistrates would dismiss any that

weren't directly related to the costs of preparing the case.

Around three quarters of a million pounds a year (set to rise by nearly 70%) is being claimed

for a process automatically controlled in accordance with the Council Tax software settings.

The system (NOT salaried employees) compiles particulars of all account holders requiring

issue of a summons from which the complaint list is generated.

There is no lawful provision that permits NELC to impose costs for anything other than to

cover reasonably incurred expenditure. No costs therefore can be claimed in respect of

agreeing, setting-up or monitoring payment arrangements, telephone communications or

correspondence entered into outside those automatically triggered by parameters set in the

automated Council Tax system.

The fee payable per entry on the complaint list to the Magistrates Court accounts for £3. This

element of the summons costs has been constant since the provision of the Magistrates' Courts

Fees Order 2005, which came into force on 10 January 2006; therefore the overnight increase

in summons costs in 2011 of 120% can not be justified. Owing to a system which is

automated, it is not reasonable that costs could exceed what is paid to HMCTS in fees plus a

token amount in respect of postage, stationary and printing. Such an amount would be

rendered even more insignificant due to economies of scale.

Example One:

It is apparent that North East Lincolnshire Council has a parameter set in its council tax

system of a sum below which an alleged debtor will not theoretically be summonsed. If

parameters are set in its Council Tax system, it must make any claim bogus to justify

allocating £143,215 of its budget to "Control & Monitoring" (see Summons Cost Calculation

2012 /13).

Example Two:

The absence of human involvement is highlighted in a letter to the Council’s Local Taxation

& Benefits Shared Service Manager dated 22 April 2013 [(see Annex A D-3)].

Concerns were raised about a computer generated letter threatening £70 summons costs,

instalment facility withdrawal and demand for immediate payment for the entire Council Tax

liability if payment was not made in accordance with the demands.

This demonstrated that recovery is triggered independently of salaried employees and any

element of "Control & Monitoring" is solely attributed to how the system is programmed to

allocate outstanding payments and to which year’s account they are automatically posted. The

fact that an error in the system went undetected backs-up the assertion that nobody monitors

the recovery process for which NELC claims expenditure and raises costs in respect of

instituting Summonses.

Inadequate monitoring to ensure there is no surplus income from costs

Costs have only ever increased, suggesting that measures have never been taken that would

improve efficiency and reduce incurred expenditure. This seems unlikely given the increasing

trend for councils to share resources, outsource services and exploit the latest technology.

More relevantly however, it would suggest that volumes of bulk applications have remained

constant. For example, if volumes increased significantly, it would be reasonable to expect

lower costs due to economies of scale. The standard costs sought, that is, each defendant’s

share of the total, would require adjusting to ensure no profit was made. However, costs

raised by the billing authority increased by 67% in respect of figures obtained in 2013

compared with the same period in 2012. No adjustment was made to the standard costs

sought, and the court continued to award costs which were applied for.

Changes to the benefit system are the likely cause for the significant increase in numbers

unable to meet council tax payments. Claimants, who before the reforms, where exempt from

paying any council tax must now pay 8.5% of their bill because of reduced funding. Incomes

for these people must therefore have fallen below levels which the government once deemed

was a minimum amount needed to live on frugally. Whatever is behind the soaring numbers,

costs raised have escalated as NELC has opted to seek court orders to enforce payment in

those cases.

Costs raised for the months May to August in 2012 (before the reforms) was £333,480, whilst

for the same months subsequent to the reforms the figure increased by around 67% to

£556,220.

Individual costs raised under regulation 34(5) of S.I 1992/613 derive from the billing

authority’s aggregate, split between however many defendants appear on the complaint list.

Due process would require the council itemise the time and effort expended on each element

of the case after which Magistrates would need to use discretion in awarding the appropriate

costs. This would essentially take into account the number of defendants incurring costs.

However, it is evident that NELC, on behalf of the Magistrates’ court is permitted to

determine its own costs [(see Annexes B and C omitted here)].

The majority of costs currently claimed by the council would if due process was followed be

identified as inappropriate profit, especially when applications exceed certain levels as has

been seen since the benefit changes. With this considered, and discounting costs which would

be incurred regardless of the applications being made, then only those specific to the claim

would be awarded.

The desired outcome of this complaint

As set out at the beginning of this complaint I require the £60 court summons costs, which I

consider to be fraudulent, be removed from my account.

I also require NELC propose a provisional sum as compensation for damages for refusing to

resolve this matter which has consequently required appeals in the High Court, both Judicial

Review and by way of case stated.

A proposed sum should reflect the amount of time researching relevant litigation procedures

in pursuing this matter in the High Court and a final settlement left open to allow for damages

in respect of the unquantifiable time left until this matter has finally concluded.

Yours sincerely

X. Xyxyxy

[D-9] Formal complaint supplementary letter (summons costs)

[The Council]

14/07/14

Dear Sir/Madam

Re: Council tax Ref: 1234567891 – 15 March 2014 Formal Complaint

This letter supplements my 15 March 2014 complaint.

North East Lincolnshire Council erred in law when on the 2.11.12 an application for a

Liability Order was made in the Magistrates’ court. This was in clear breach of Regulation 34

of the Council Tax (Administration and Enforcement) Regulations 1992 (the “Regulations”)

which provides that if, after the summons has been issued, an amount is paid, equal to the

unpaid balance and an amount in respect of the costs incurred, then the authority must accept

the payment and stop proceedings. The relevant part being paragraph 5 which follows:

“(5) If, after a summons has been issued in accordance with paragraph (2) but before

the application is heard, there is paid or tendered to the authority an amount equal to

the aggregate of—

(a) the sum specified in the summons as the sum outstanding or so much of it as

remains outstanding (as the case may be); and

(b) a sum of an amount equal to the costs reasonably incurred by the authority in

connection with the application up to the time of the payment or tender,

the authority shall accept the amount and the application shall not be proceeded with.

(6)....”

Further to my 15 March 2014 complaint detailing why the overall expenditure claimed was

unrealistic, the council’s calculations also provide evidence that in my particular

circumstances the expenditure (£70) it was claiming could not have been incurred.

It is clear from the calculations [(see ANNEXES A and B omitted here)] that inappropriate

expenditure has been incorporated into the standard summons costs. For example, £260k+ in

respect of 2012/13, of which a share is incurred by all account holders receiving summonses,

regardless of whether applications are made in those cases for liability orders or there was

need to correspond with the council. Therefore, apart from my own case, many others

(particularly those settling in accordance with the summons) have legitimate grounds to

dispute that this element (£260k+ at the very least) could not have conceivably been incurred

by the council in respect of their summonses and could be no lawful basis for imposing that

sum. The law states as aforementioned, that the authority may claim only costs in connection

with the application up to the time of the payment or tender.

In any event, the council is misconceived by thinking that it would be open to legal challenge

ONLY if its costs were to exceed the overall (accounted) expenditure. Firstly, as a true

account for overall costs, the sums are very questionable. Secondly, they misrepresent without

any doubt, the ratio between the summons costs to the overall expenditure. NELC accounts

for there being all but a negligible amount of expenditure attributable to instituting the

summons. This is at odds with paragraph 4 of Chiltern District Council’s 16 March 2010

Cabinet report into Court costs in respect of unpaid Council Tax and non domestic rates

which states as far as is relevant the following:

"4. ...... Most of the costs the Council incurs arise from the application for a liability

order at Court and the additional work required to secure payment once we have

the liability order.”

The net effect of this misrepresentation is that the law has been breached. As aforementioned,

the law states at 34(5)(b) of the regulations that the authority (with regards the summons) is

only entitled to costs in connection with the application up to the time of the payment or

tender. By virtue of the fact that any payment or tender would have occurred before the

application for a liability order (at Court) there has evidently been a deliberate distortion of

the figures to enable a greater generation of costs income by moving expenditure incurred in

respect of applying for a liability order, and front loading it to costs in respect of instituting

the summons.

I’m sure NELC is aware it’s not the only local authority to have front loaded costs as a way of

increasing costs revenue and/or to deter late payment. Newham Borough council had no

regard for the law when making a decision to change the composition of its overall £95 court

costs from charging £20 summons and £75 liability order to ramping up the summons by

225% to £65 whilst reducing its liability order accordingly to £30.

Without any apparent regard for the regulations, the Finance Officer openly admitted in the

27th May 2010 report reviewing these charges that the move aimed to influence behaviour:

“The financial implication of this is to retain the overall charge for enforcement of

council tax payment at £95.00 but to front load the costs so that a higher charge

affects the customer at the summons stage. It is anticipated that this would deter tax

payers from defaulting at this stage but rather resolve nonpayment earlier and thereby

improve the council’s cash flow.”

Plainly Newham Borough Council view the manipulation of “court costs” to be a useful

instrument to be taken advantage of; evidently mistaking them as “fees” for which it probably

has a “fees policy” detailing how they may be exploited, for example, by raising them with a

view to influencing behaviour, targeting certain groups or meeting particular objectives.

I doubt, in the case of NELC, nothing demonstrates this more than its cabinet report (6.4.01),

reviewing ways of improving cashflow and potentially increasing income through recovery

costs, particularly at paragraph 5:

“The decision to charge more in respect of Non-Domestic Rates is one which other

local authorities are taking in increasing numbers. (There are two in this region

currently, Bradford and Sheffield.) The reasoning behind this is that it is believed that

some businesses deliberately delay payment of Rates as the penalty for late payment

is so small in comparison to the amount that might be owed. The extra cost is seen as

a way of encouraging prompt payment.”

It is noted that North East Lincolnshire Council’s 17 February 2014 Cabinet report “Review of

Council Tax court costs” refers throughout the document to fees. It also misleadingly states

the following (emphasis added):

“regulations allow the council to levy an additional fee which is equal to the amount

of costs reasonably incurred in connection with the application”.

This misleads the reader because the regulations DO NOT allow for costs incurred in

connection with the application, unconditionally; this would leave the law open for

exploitation. What in fact the regulations do allow is for costs reasonably incurred by the

council in obtaining the liability order (referred to also as “making the application”); see

34(7) and 34(8) of the regulations (emphasis added):

“(7) An order made pursuant to paragraph (6) shall be made in respect of an amount

equal to the aggregate of—

(a) the sum payable, and

(b) a sum of an amount equal to the costs reasonably incurred by the applicant in

obtaining the order.”

(8) Where the sum payable is paid after a liability order has been applied for under

paragraph (2) but before it is made, the court shall nonetheless (if so requested by the

billing authority) make the order in respect of a sum of an amount equal to the costs

reasonably incurred by the authority in making the application.”

The potential for incurring costs are far greater once the liability order has been granted. For

example, in respect of maintaining payment agreements, setting up attachment of

earnings/benefits, related recovery correspondence and phone calls etc., which may be

considered to be “in connection with the application”. However, the law makes no provision

for this expenditure to be recovered by the council.

Secondly where the Cabinet report misrepresents the regulations, re; “...costs reasonably

incurred in connection with the application”, this is a distortion of 34(5)(b) of the Regulations

which states in its entirety the following (emphasis added):

"(b) a sum of an amount equal to the costs reasonably incurred by the authority in

connection with the application up to the time of the payment or tender,”

In full context with 34(5) of the Regulations, the expenditure it refers to does not include all

expenditure restricted to obtaining the liability order. This is limited further to costs incurred

in connection with instituting the summons where the debtor elects to pay (or makes a

proposal to pay) the outstanding debt before the application is heard, under which

circumstances the authority must accept the payment, or proposal to pay, and the application

not proceeded with.

This is especially relevant to the way NELC applies its costs, which have all (since April

2011) been front loaded to the summons. The law only allows under this provision (reg.

34(5)) costs to include expenditure incurred in instituting the summons. There is therefore no

mistaking that the law makes no provision for the authority to re-charge its entire Council Tax

recovery budget to defendant’s costs in respect of instituting the summons. Neither does the

law provide for the authority to re-charge its entire budget – for what it also terms “providing

the service” – to defendant’s costs in respect of obtaining the liability order.

Going back to my particular case, where it has been stated that NONE of the Gross

Recoverable costs in relation to the Council Tax category [(£260k – ANNEX A omitted

here)] could have lawfully been incurred by the council in respect of my summons. The

reason for this is simply because the sum was based on Council Tax activity levels, but more

specifically the man hours deemed attributable to dealing with enquiries which were

estimated from the number of calls arising from issue of each summons being at least twice as

many as for reminders.

My summons was received on 17.10.12 and the outstanding balance settled that same day,

therefore NELC had, within the £70 standard costs, included inappropriate and unlawful

expenditure to mine and whoever else’s that settled accounts similarly. If the impact recovery

had on the Council’s budget was properly evaluated, it would have perversely been deemed

impacting positively because a lump sum payment was made (benefiting the council’s

finances sooner) which ordinarily would have been paid in instalments.

It is clear from North East Lincolnshire Council’s 17 February 2014 Cabinet report “Review

of Council Tax court costs” that there is other expenditure (in respect of waived costs) that is

added to the costs of debtors who pay them.

Under subheading, BACKGROUND AND ISSUES, the report states as far as is relevant the

following:

“The Council recognises the difficulties some residents have encountered in paying

Council Tax as a result of Welfare Reform changes, and as a result has been more

flexible with instalment arrangements. In cases where residents owe a modest amount,

and have subsequently made an arrangement which clears the balance within the

financial year, costs have not been applied. It is anticipated that such action will

continue into 2014/15”

The effects of this are clearly visible in the way the 2013/14 calculation has been produced

[(see ANNEX B omitted here)]. Two different figures have been used in the calculation in

respect of the number of summonses issued. The first higher figure, 13,600 being the

estimated number of summonses, has been used to establish the “Council Tax Activity

Levels”. The second figure adjusted downwards by 26.5% to 10,000 is used in the part of the

calculation to establish the unit or individual costs from the overall expenditure. The higher

and lower figures used in this way have influenced the calculation so that the maximum

individual costs is returned.

As the Cabinet report indicates – because of arrangements deemed favourable to the council –

the difference between the 13,600 and the 10,000 figures is attributable to costs being waived.

However, it is clear that the accounts for which this 26.5% relate have at least had

summonses, if not Liability Orders made against them. The upshot being that costs relating to

3,600 accounts (not having costs applied) have been incorporated into the standard costs of

those who pay them.

To reiterate the concerns (complaint 15 March) with regards costs attributable to Monitoring

& Control, it is not seen how any element of the £143,215 [(see ANNEX A omitted here)]

could have been lawfully incurred by the council in respect of my individual summons. Full

payment was made the same day the summons was served, so there was plainly no agreement

with respect to payment arrangements to Monitor or Control.

However, more importantly on this point of law; even if a payment arrangement had been

agreed, it would have been made as a consequence of a proposal. In terms of 34(5) of the

Regulations such a proposition would constitute a tender for which the authority must accept

and the application not be proceeded with.

For the avoidance of doubt, the law does not exclusively require payment to ensure that the

authority abandons the application; the authority is equally obliged not to proceed if payment

is tendered. If parliament had not intended an offer to constitute a payment agreement, then it

must be questioned why the regulations provide a distinction between “paid” and “tendered”.

It therefore goes that the associated costs, even for those who agree payment arrangements,

can not incur any element of expenditure which is attributable to controlling or monitoring

those plans. The relevant part is regulation 34(5)(b), which provides as follows (emphasis

added):

“a sum of an amount equal to the costs reasonably incurred by the authority in

connection with the application up to the time of the payment or tender”

It is of no relevance whether maintaining an arrangement is deemed by the authority to be “in

connection with the application”. Any costs attributable to this would be incurred after

payment was tendered, and as the law states, costs are allowable only up until this point.

It is also worth noting that the regulations have no provision for recovering the cost of

maintaining payment arrangements. The authority has only one further opportunity to request

costs once the summons has been issued. That is at the court hearing where the application is

made for liability order where the law provides only costs reasonably incurred by the council

in obtaining the order. Man hours attributed to maintaining payment arrangements would be

incurred after this point so would be categorically unlawful if accounted for as any element of

court costs.

Also bear in mind it would be unlawful, if subsequent to a payment proposal being agreed, the

authority (even if waiving costs) still applied for a liability order, for example to protect its

interest. The regulations provide no discretion for the authority as they clearly state that once

the amount has been paid or tendered, “the application shall not be proceeded with”.

Although in a Cabinet report “Review of Council Tax court costs” published 17.2.14 it states

that “it is not practical to calculate the level of costs incurred in each individual case”, it is

nevertheless obliged to do so for those individual cases against whom the council proceed,

who exercise their legal right to challenge them.

It was categorically the case that these costs were challenged on 17.10.12 [(see letter,

ANNEX C omitted here)]. The Council acknowledged receipt of the letter the same day and

advised it had been forwarded to its Court Enforcement Officers to deal with. The council

made no further contact in relation to the issues and the application made in the Magistrates’

Court on 2.11.12 where the bench granted a liability order in respect of the costs which the

billing authority claimed were incurred.

The contents of this letter spell out why North East Lincolnshire Council had no lawful basis

to proceed with the application. Once payment had been made in full including costs in

accordance with 34(5) of the Regulations the authority had clearly an obligation to accept

payment and stop proceedings there and then, or else respond to the letter and provide

evidence to support its costs.

However, had it provided the same or similar calculation as subsequently it produced [(see

ANNEX A omitted here)], it would have revealed expenditure additional to that which the

law provides was included in the £70 summons costs.

There is therefore no doubt that steps taken to obtain the liability order have been unlawful; so

please arrange that this liability order be quashed by applying to the Magistrates’ court under

5(2) of the Regulations to have all trace of this order deleted from the record.

You may be aware that since NELC obtained an order to enforce payment (2.11.12) of the

£60 sum I have attempted to appeal this on a point of law in the high court. The Magistrates

court has obstructed the process and in so doing breached the respective procedure rules

which led to a judicial review claim being necessary which then led to being stonewalled and

lied to by the Justices’ Clerk for Humber & South Yorkshire local justice area. NELC may

consider itself off the hook by virtue of the fact that the case is subject to an appeal. If so, the

twenty months so far of lies and obstruction from Her Majesties Court and Tribunals Service

tends to validly argue against that course of action being one reasonably expected to take.

It is obvious from events that have unfolded over the last twenty months that the Justice

system is a sham. The Magistrates courts far too cosy relationship with local authorities not

only allows councils rake in millions of pounds a year of unlawful revenue, but provides a

substantial amount out of the racket itself, to subsidise other budgets within the department of

the Ministry of Justice. Why else would the Magistrates court or the council for that matter

(who cash in on the MoJ’s corruption) want to deny a higher court the opportunity of

reviewing a point of law that quite obviously is in question? The obvious reason being

because a potential ruling might impact on the millions of pounds each year councils see as

revenue; perhaps meaning billions of pounds would be due back to Council Taxpayers in

refunds. This signifies that DCLG and Ministry of Justice are not fulfilling their perceived

roles, rather functioning primarily as tax collectors.

It would be understood by any reasonable person that the MoJ’s primary concern, when first

alerted to an extortion racket of this magnitude would be to remedy it under its own initiative;

not waiting for it to be challenged in the Administrative court. Instead, it relies on the

possibility being far too remote because of the inordinate amount of time it would take an

appellant wishing to challenge it in the High Court and threat to him of a costs order.

However it seems the MoJ has a contingency plan for when this does happen; evidently when

the risk is taken, it initially obstructs and inconveniences the applicant in the hope they give

up. Or, if over a protracted period that fails, it blatantly resorts to ignoring all

communications, effectively stopping proceedings in its tracks.

The desired outcome of this complaint

This is another opportunity for NELC to deal with the formal complaint submitted 15 March

2014. Though it refused then on the grounds that the employee nominated to investigate was

suitable (in conflict with my opinion), NELC provided no arguments of substance to support

its decision. On the other hand, I went out of my way to provide comprehensive evidence as

to why the person nominated would be wholly inappropriate. Nothing has changed with

regards my view that nothing would be achieved by having the nominated employee

investigate the complaint.

If the council refuse to allocate another employee, which I suspect, I will therefore consider

escalating the complaint to the Local Government Ombudsman (LGO). As no doubt you will

already know from one or a number of NELCs “Effective Complaints Handling” courses

delivered by LGO staff, that by virtue of section 26(6)(c) of the Local Government Act 1974,

the LGO shall not investigate matters where proceedings in any court of law are available to

the person aggrieved.

On the face of it this would appear to be the case, re the High Court application, however the

LGO have discretion in circumstances where it would not be reasonable to expect the person

aggrieved to resort to such remedy. The clause is provided within section 26(6) of the 1974

Act as follows:

“Provided that a Local Commissioner may conduct an investigation notwithstanding

the existence of such a right or remedy if satisfied that in the particular circumstances

it is not reasonable to expect the person aggrieved to resort or have resorted to it”

The LGO would have no reasonable cause to refuse investigating the complaint on these

grounds. Moreover it would have no credibility should it investigate and its decision fall in

favour of NELC given that the council’s calculations provide indisputable evidence that

inappropriate and unlawful expenditure was incorporated into the £70 summons.

Regardless of whether the council agrees to allocate another employee to deal with the

complaint, I expect that a response is given regarding the authority requesting the liability

order be quashed.

Failing NELC agreeing to apply to the court to quash the order, there is the matter of the

outstanding £60 sum and how it is going to obtain payment with available enforcement

powers given by the liability order. It has no way of making an attachment to wages (I receive

none), neither can it make an attachment to benefits (I receive none). The sum is far below the

amount which would allow the council to instigate bankruptcy or apply to the court for a

charging order. There is only therefore two realistic options remaining, one of which being to

apply to the court for commitment to prison, which would fail to obtain payment. Besides, the

council would embarrassingly have to apply to the same court which negligently granted the

liability order in the first place. Its second option available would be to instruct its bailiff

contractor to attempt levying distress. The problem envisioned with that is Humberside Police

would be immediately alerted who are more than aware of Rossendales track record for

defrauding householders with fees and charges in connection with council tax enforcement.

Yours sincerely

X. Xyxyxy

[D-10] Council’s response to stage 1 formal complaint (summons costs)

[Defendant’s Address]

24 July 2014

Private and Confidential

Dear Mr Xyxyxy

I am writing in response to your stage 1 complaint received by me on the 23rd July 2014. As

my role of investigating officer it is my responsibility to investigate your complaint and seek

to resolve matters.

I have spoken to relevant personnel and read the supporting documentation as part of the

investigation process. I will now attempt to address each of your concerns in turn.

Complaint 1: You feel that North East Lincolnshire council should apply to the

Magistrates Court to have your liability Order quashed.

You offer in your complaint many different reasons and explanations as to why you feel

North East Lincolnshire Council should apply to have your Liability Order quashed.

However, as you are aware you attended the Liability Order hearing and you were given the

chance to produce evidence in the court to oppose the application.

The outcome of the hearing was that the Liability order was granted.

Outcome:

I do not uphold this part of the complaint as North East Lincolnshire Council applied

for the Liability order in adherence to the relevant regulations and legislation.

The application was heard in front of a Magistrates bench and it was their decision that

the liability order would be granted.

How is North East Lincolnshire Council going to obtain the £60.00 sum outstanding.

With regards to the £60.00 outstanding on your account I can make you aware that it is for

North East Lincolnshire Council to decide on any course of action.

Any action that is taken will of course be relayed to you, giving you ample notice.

As part of our efforts to continually improve services we consider learning from complaints to

be an important part of developing our services to the community. Should you feel that your

complaint has not been satisfactorily resolved, you can escalate to stage 2 of our complaints

process where it will be reviewed by a senior officer.

Your sincerely

Neil Smith

North East Lincolnshire Council

[D-11] Formal complaint escalate to stage 2 (summons costs)

[The Council]

28/07/14

Dear Sir/Madam

Re: Council tax Ref: 1234567891 – 15 March 2014 Formal Complaint

I refer to the council’s stage 1 complaint response dated 24 July 2014 and would like to

escalate this matter to stage 2 of your complaints process.

After assessing its contents I’m satisfied that the officer given responsibility for dealing with

the matter has not investigated it appropriately. The token gesture, which is all the response

amounts to, serves no purpose other than a back covering exercise for North East Lincolnshire

Council (NELC), for which it has shifted responsibility to the Magistrates’ Court. This is no

less than I expected and why I objected in March for the officer who has responded to be

involved.

Unfortunately however, the negligence and corruption of the Magistrates’ Court and the

Ministry of Justice as a whole is another matter to be dealt with separately. It was therefore

inappropriate that NELC pointed the finger in that direction on this occasion.

The fact remains that the Liability Order was obtained solely for an element of the authority’s

standard summons costs. They have been demonstrated to be fraudulent, made possible

courtesy of a considerable helping hand from NELC by way of cabinet reports etc. and

surprisingly its incriminating calculation which supported my assertions that its expenditure

did not comply with the relevant law.

There is sufficient detail in my letters dated 15 March and 14 July 2014 for me not to need

adding further to it here. All that should be required is for the person next given responsibility

to investigate this complaint, does it properly.

However, there is another matter which needs raising regarding NELC and the amount of

time it wastes of the Council Taxpayer. The same officer allocated the task of dealing with

this matter made it known to me previously that the council do not take a stage 1 complaint

seriously – considering it a test of the complainant’s commitment which is verified by him

escalating it to the next stage.

Yours sincerely

X. Xyxyxy

[D-12] Council’s final response to formal complaint (summons costs)

15th

September 2014

PRIVATE AND CONFIDENTIAL

[Defendant’s Address]

Dear Mr Xyxyxy,

I refer to the letter dated in which it was confirmed that your complaint had been escalated to

the final stage of the Council's complaints procedure. The issues you have raised have been

investigated which has included a review of the stage 1 response. This investigation has been

undertaken independently of the officers that have previously handled your complaint.

The enclosed investigating officer's report details the findings of this investigation which I

consider has been correctly and fairly carried out in accordance with the Council's Feedback

Policy.

If you are not satisfied with this response and the outcome of your complaint, you have the

right to take the matter to the Local Government Ombudsman, whose contact details are as

follows:

LGO Advice Team

The Local Government Ombudsman

PO Box 4771

Coventry CV40EH

Tel: 0845 602 1983

Fax: 024 7682 0001

I would like to thank you for bringing these issues to the Council's attention. This has been, of

necessity, a formal response driven by our Feedback Policy and procedures, designed to

ensure full, fair and impartial examination of concerns which arise. I am personally always

very keen to see how we can improve our services and learning from complaints is one way

of achieving this. Although you may not be happy about all aspects of my conclusions, I am

hoping you will accept that this matter has had proper consideration.

Yours sincerely

Rob Walsh

Chief Executive

North East Lincolnshire Council

Stage 2 Corporate Complaint Investigation

PRIVATE AND CONFIDENTIAL

Head of Service: Sharon Wroot (Assistant Director - Finance)

Service Area: Council Tax

Investigating Sara Hemming (Team Manager - Strategy, Policy and Projects)

Complaint Reference: NEL/8009/1415

Final decision of Investigating Officer:

This investigation has found that the Council acted in accordance with the Council Tax

(Administration and Enforcement) Regulation 1992 and the Guidance to local councils on

good practice in the collection of Council Tax arrears at all times and thus the Liability Order

was obtained lawfully and should remain on Mr Xyxyxy's account.

The complaint is not upheld.

Summary of complaint:

Mr Xyxyxy considers that the Liability Order to enforce the outstanding £60 court summons

costs was obtained fraudulently by North East Lincolnshire Council and therefore requires it

to be removed from his account.

Mr Xyxyxy's desired outcome of this complaint is to have the £60 court summons costs

removed from his account and for North East Lincolnshire Council to propose a provisional

sum as compensation for damages for refusing to resolve this matter.

How the complaint was considered:

Sara Hemming, Investigating Officer, met with Mr Xyxyxy at the Municipal Offices on

Friday 8th

August.

An examination of correspondence received from Mr Xyxyxy, including:

• Formal complaint letter 15/03/14

• Supplementary complaint letter 14/07/14

• Request to escalate to Stage 2 letter 28/07/14

• Draft "case stated" (and representations made on that case) with regards the High

Court application and Grounds of appeal etc. submitted in the Information Rights

Tribunal, supplied by Mr Xyxyxy on 10/08/14

An examination of e-mails between Mr Xyxyxy and Ian Hollingsworth, Information

Governance, Complaints and Consultation sent between 15/03/14 and 28/07/14

An examination of correspondence from North East Lincolnshire Council including:

• Stage 1 complaint response letter 24th July 2014

• Council Tax reminder letter 12/09/12

• Council Tax summons letter 10/10/14

• Recovery of Council Tax letter 05/11/12

Sara Hemming, Investigating Officer interviewed Neil Smith, Court Enforcement Officer on

Wednesday 13th

August.

Sara Hemming, Investigating Officer interviewed Richard Catlyn, Lead Officer Local

Taxation on Wednesday 20th

August.

Cabinet report "Review of Council Tax court costs" 17/02/14

The Council Tax (Administration and Enforcement) Regulation 1992

Council Tax - Guidance to local councils on good practice in the collection of Council Tax

arrears.

Findings:

The concerns raised by Mr Xyxyxy have been addressed and the relevant findings are detailed

below.

Mr Xyxyxy believes that the Liability Order obtained to enforce the outstanding £60 court

summons costs was obtained fraudulently by North East Lincolnshire Council. This

complaint is not upheld.

The Guidance to local councils on good practice in the collection of Council Tax arrears (the

Guidance) makes it clear that enforcement is a necessary and important part of Local

Authority activity and that every penny of council tax that is not collected means a higher

council tax for the law-abiding citizen who does pay on time. The Guidance goes on to state

that where a payment is overdue, a bill payer should receive at least three statutory

communications before further action is taken:

• Reminder for payment

• Court summons

• Notification that the liability order has been granted and unless the amount owing is

paid, bailiffs are likely to follow

The Guidance also states that local authorities should ensure that at each stage full

information is provided about what the bill payer can do to avoid the situation. This should

include where they can go for help and advice, be clear about the next steps and that charges

for the court summons and for liability orders should be clear on all documentation with clear

information on how they can be paid and how they will be collected if not.

In Mr Xyxyxy's case he received each of these communications. The reminder letter dated

12/09/12 clearly indicates that an instalment of £85.52 was missed and that if this was not

received by the 26/09/12 that the total balance of £437.52 would become payable

immediately. This letter also made it clear that if payment was not received that a summons

would be issued, without further notice, and that £70 costs would be incurred. This letter also

clearly explained how payments could be made and how to get advice if Mr Xyxyxy was

experiencing a debt problem.

Mr Xyxyxy was given every opportunity to pay the initial missed payment and then the full

amount outstanding, without incurring any charges. He was also informed of the

consequences of not making those payments and how much the costs associated with this

course of action would be. Following receipt of the summons letter Mr Xyxyxy did make a

payment of £437.52 plus an additional £10 for costs, this left and outstanding sum of £60.

It is Mr Xyxyxy's belief that North East Lincolnshire Council is obliged to calculate the level

of costs incurred in individual cases who exercise their legal right to challenge them. The

Council Tax (Administration and Enforcement) Regulation 1992 (The Regulations) allow the

Council to make an order in respect of a sum of an amount equal to the costs reasonably

incurred in obtaining the order, the regulations do not specify what expenditure mayor may

not be included within the level of cost charged to the non-payer.

The Cabinet report from 17/2/14 explains that it is not practical to calculate the level of costs

incurred in each individual case and therefore a reasonable estimate must be made of the total

of such costs, divided by the estimated number of applications to be made for a summons.

The Regulations do not place any statutory requirement on the Council to calculate the costs

on an individual basis.

Mr Xyxyxy also believes that North East Lincolnshire Council inappropriately raises revenue

through Magistrates summons costs. The Guidance states that local authorities are only

permitted to charge reasonable costs for the court summons and liability order and that in the

interests of transparency they should be able to provide a breakdown, on request, showing

how these costs are calculated. North East Lincolnshire Council provided a detailed

breakdown based on activity and costs on it's website for 2012/13, this was updated for

2013/14. These breakdowns have been through stringent checks both internally and by the

District Auditors.

The Clerk to the Justices is kept informed of the costs that are to be charged for a summons

for Council Tax. The Guidance highlights that while it is likely that authorities will have

discussed costs with the Clerk to Justices it should be recognised that the Court may wish to

be satisfied that the amount claimed by way of costs in any individual case is no more than

that reasonably incurred by the authority. In Mr Xyxyxy's case he chose to attend court and

provide evidence to the magistrates outlining why he felt that the remaining £60 summons

costs were unreasonable, in this case the Liability Order was granted for the outstanding

amount, this would indicate that the Court were satisfied that the amount claimed was

reasonably incurred by the Council.

Details of final recommendations:

This investigation has found that the Council acted in accordance with the Regulations and

the Guidance at all times.

No justification can be found to remove the £60 court summons costs from Mr Xyxyxy's

account and the investigation cannot provide any evidence to support Mr Xyxyxy's request for

compensation for damages.

The recommendation is that North East Lincolnshire Council consider the options available to

them to recover the outstanding £60 and decide on what will be the appropriate course of

action to take. The Council should ensure that Mr Xyxyxy is duly informed of any action that

is to be taken.

Investigators decision on behalf of the Chief Executive:

Sara Hemming

Head of Service:

Sharon Wroot

[D-13] Complaint to Local Government Ombudsman (LGO)

[Local Government Ombudsman]

IN THE MATTER OF COMPLAINT TO THE LOCAL

GOVERNMENT OMBUDSMAN UNDER THE

PROVISION OF PART III OF THE LOCAL

GOVERNMENT ACT 1974

15 January 2015 Postponed

COMPLAINT AGAINST

NORTH EAST LINCOLNSHIRE COUNCIL

Supporting documents (“SD”) listed below are in the order first referred to in this complaint.

It is important that all are to hand, and a copy requested in the case of any missing document:

LIST OF SUPPORTING DOCUMENTS (SD)

(in order of occurrence in complaint)

No # DATE DESCRIPTION FILE NAME

1 19 July 2013 Bailiff fee fraud allegations(FOI data

redemption fees)

FOI data 19 July 2013.pdf

2 24 July 2013 Bailiff fee fraud allegations(FOI data vehicle

fees)

FOI data 24 July 2013.pdf

3 15 March 2014 Formal Complaint Formal Complaint – 15

March 14.pdf

4 14 July 2014 Formal Complaint (supplementary letter) Formal Complaint – 15

March (14 July) 14.pdf

5 15 Sept 2014 Councils Final Decision to formal complaint Council response 15 Sept

2014.pdf

6 June 2013 Guidance to local councils on good practice

in the collection of Council Tax arrears

Guidance on enforcement of

CT arrears.pdf

1

7 22 April 2014 Request for certificate of refusal to state a

case for an appeal to the high court

Cert - refusal to state case

22 April 2014.pdf

8 Various

Letters to head of revenues /Auditor/ evidence

for Magistrates’ court between 16 September

– 17 October 2012 reference: NG/CTR/12912

Evidence 16 Sept – 17 Oct

2012.pdf

9 22 Nov 2014 Application to state a case for an appeal to

the high court

Application to appeal to

high court.pdf

10 – – – Chronology of events (case bundle draft

document – high court application)

11 8 Feb 2013 Refusal to apply to have court order quashed 20130208 NELC.pdf

12 14 Feb 2013 Disputing order was correctly obtained T – S & L Order Feb 14

2013.pdf

13 28 July 2014 Formal Complaint (escalate to final stage) Formal Complaint – 15

March (28 July) 14.doc

14 21 Feb 2011

Explanatory Memorandum to The Council

Tax and Non-Domestic Rating (Amendment)

(Wales) Regulations 2011

Explanatory Memorandum

Regulations 2011.pdf

15 17 Feb 2014 Review court costs to mitigate risk of

exceeding expenditure and being legally

challenged

Review of Council Tax court

costs.pdf

16 –

Leicester City Council’s court costs

calculation 2011-12

Costs calc 2011 12

Leicester.xls

17 April 2009/10 South Gloucestershire Council’s costs

calculation 2009 and 2010

SGC cost calculation 09 and

10.TIF

18 – Great Yarmouth Borough Council’s costs

Calculation 2014-15

Court Costs increase 2014

15.xls

19 5 Sept 2013 Business Rates summons fraud Business Rates summons

fraud 05 Sept 2013.doc

20 19 Aug 2013 Draft case stated for appeal to the high court

and Representations made on the case

Case stated Draft

representation.pdf

21 20 Sept 2012 Refusal to correspond further 20120920 NELC.pdf

22 –

Grounds of appeal (case bundle draft

document – high court application)

Grounds of appeal.pdf

23 –

Consent Order (case bundle draft document –

high court application)

Consent order.pdf

24 –

Skeleton Argument (case bundle draft

document – high court application)

Skeleton Argument draft.pdf

2

Table of Contents

Introduction.......................................................................................................

Matters subject / not subject to investigation....................................................

Twelve months time limit................................................................................

Achieving the desired outcome.......................................................................

What do you think the body did wrong?........................................................

Chronology of events....................................................................................

Matters immaterial to complaint investigated...................................................

Final Decision contention I............................................................................

Final Decision contention II...........................................................................

Increase / front load costs to raise additional £188k per annum.................

Additional £38,000 per annum cost income..............................................

Hike in summons to fund additional staff..................................................

Final Decision contention III..........................................................................

Auditor’s involvement.............................................................................

Case study into local authorities’ court costs............................................

Leicester City Council.........................................................................

South Gloucestershire Council.........................................................

Great Yarmouth Borough Council.....................................................

Final Decision contention IV..........................................................................

Magistrates’ court’s Dereliction of duty.....................................................

Summarising what the council did wrong........................................................

Summarising how there was no justification to claim £70 Summons costs........

How has this affected you?............................................................................

What do you think the body should do to put things right?.........................

Annex A (Letter to Magistrates’ Court) ......................................[omitted here]

Annex B (Article August 9, 2013)...............................................[omitted here]

Annex C (Article June 27, 2013)................................................[omitted here]

3

4

5

5

5

5

7

8

9

14

15

17

18

19

22

22

24

24

25

27

31

32

33

34

3

Annex D (Article October 1, 2013).............................................[omitted here]

Annex E Supplementary Complaint (Summons sent in error) ..[omitted here]

Annex F Supplementary Complaint (Summons sent in error) ..[omitted here]

Introduction

1. This is a complaint under the provision of Part III of the Local Government Act 1974 (the

“Act”) against North East Lincolnshire Council (“NELC”) being an Authority subject to

investigation pursuant to section 25 of the Act.

2. The concerns raised in this complaint are matters of general public importance including

side issues concerning the Ministry of Justice, for which the LGO has no direct

jurisdiction. It is therefore suggested that the main body of the complaint and the matter

of the Magistrates’ court perverting the course of justice are jointly investigated in

conjunction with the Parliamentary Ombudsman under powers granted by 2007

Regulatory Reform legislation 1.

3. Another related matter which is outside the scope of this complaint concerns the spurious

bailiff fees charged by NELC’s enforcement contractor [(See article Annex B omitted

here)]. The aggregate value of fees

2 of around a third of a million pounds was found to be

added fraudulently to householder’s council tax accounts with respect to vehicle

attendances and for returning goods which had never been removed from premises in the

first place. Data obtained through Freedom of Information covering a six year period

from 2007/08 confirms these allegations.

4. It is therefore suggested that the sample material provided is evaluated, and if found

through preliminary investigations to suggest there has been large scale fraud, then the

matter be referred to the Serious Fraud Office.

5. The main body of the complaint surrounds matters raised in a formal complaint3 which

were not properly investigated by NELC as the Final Decision

4 revealed. It was evident

that the matters, which concerned Council Tax summons costs, were either not

understood or there was deliberate intent by NELC in engaging in irrelevant matters for

its own interest.

1 The Regulatory Reform (Collaboration etc. between Ombudsmen) Order 2007, under powers granted by the

Regulatory Reform Act 2001 empowers the Parliamentary Ombudsman and LGO to conduct joint investigations, thus enabling both organisations to work together collaboratively to address the issues raised by the complainant.

2 Evidence sent to Humberside Police in letters 19 and 24 July 2013 – See SD #1 and #2

3 Formal Complaint – 15 March and supplementary 27 July 2014 – SD #3 and #4

4 Council response 15th Sept 2014 (Final) – SD #5

4

6. NELC focussed its investigation on the statutory notices and determined that they had

been served in accordance with the Department for Communities and Local

Government’s good practice guide

5 (the “Guidance”). This however, was wholly

irrelevant to the complaint. Some aspects of the complaint were addressed but only in

terms of the authority’s “Collection and Recovery expenditure”, rather than the specific

concerns of the complaint which were the application of costs with respect to the

regulations.

7. There were inconsistencies in how NELC viewed the relevance of the Guidance. On one

hand it used its contents as the entire basis for supporting its decision not to uphold the

complaint, whilst on the other, dismissing the validity of the paragraph referring to

“reasonable costs claimed in any individual case”

6.

Matters subject / not subject to investigation (S 26(6) / Schedule 5 of the Act).

8. In order that it be made clear, the dispute has its roots predominantly in NELC’s

application (and level) of costs with respect to Council Tax recovery as are provided for

in regulation 34 of the Council Tax (Administration and Enforcement) Regulation 1992

(the “Regulations”).

9. Although these costs are applied on issue of the summons the amount stated is merely to

inform the debtor what sum will be asked for if the case proceeds to court. They are

therefore not subject to the court’s powers until such time when NELC (if necessary)

applies for a Liability Order on the day the hearing is scheduled and an order granted by

the court. (See §§114–117).

10. Schedule 5 of the Act would therefore not render the complaint invalid to be considered

for investigation; it is not strictly a complaint about the commencement of court action or

what happened in court. Rather the complaint surrounds costs which NELC claim to be

reasonably incurred and which it publishes as standard on its website and quotes on

reminder notices etc.

11. Nevertheless, the gross inconvenience caused by NELC’s error in this particular matter

has prolonged for over two years so far. In theory there has been a remedy by way of

proceedings available in the high court which is an avenue that has been pursued (this

complaint, §§24–26). However, due to unknown reasons, the Magistrates’ court is

obstructing proceedings by both failing to produce the case stated and respond to a

request 7 for a certificate of refusal.

12. It is reasonable therefore that the Ombudsman would consider that for me to pursue the

available remedy would not only be unreasonable, but impossible, because to do so is

5 Guidance to local councils on good practice in the collection of Council Tax arrears – SD #6

6 §3.4 of the Guidance (SD #6)

7 Letter requesting Magistrates produce certificate of refusal to state a case for an appeal to the high court – SD #7

5

completely out of my control. Section 26(6) of the Act provides that the Ombudsman

may decide to investigate a complaint under these circumstances.

Twelve months Time limit (Section 26(4) of the Act)

13. Section 26(4) of the Act provides that a complaint shall not be considered unless it is

made within twelve months from the day the matters alleged in the complaint were

known about. However, the Ombudsman has discretion to conduct an investigation if he

considers that it is reasonable to do so.

14. It is a grey area as to whether matters alleged fall within the twelve months time limit. If

the starting point is considered to be the day on which NELC sent a Council Tax

reminder giving notice of the possibility of incurring £70 summons costs, then with that

date being 12 September 2012, the complaint is out of time.

15. The matter alleged in the complaint could legitimately be considered to be NELC’s

handling of the concerns which had not been investigated with due consideration of the

grounds submitted in the formal complaint. NELC’s Final Decision was dated 15

September 2014 and clearly in time.

16. Whichever date is considered to be the starting point, it would be reasonable that the

Ombudsman use discretion, considering the delay is a direct result of Grimsby

Magistrates perverting the course of justice.

Achieving the desired outcome

17. There appears to be many investigations closed after initial enquiries that are attributable

to the Ombudsman’s belief that the outcome the complainant wants is unachievable. See

further, §§165 –172.

What do you think the body did wrong?

Chronology of events

18. The complaint arises from the billing authority sending out a Council Tax reminder dated

12 September 2012 leading to a summons

8 being served on 17 October 2012 to appear

before the Magistrate’s Court on 2 November 2012 to answer the said complaint. The

summons stated alternatively that all further proceedings would be stopped if the amount

outstanding including summons costs was paid before the date of the hearing.

19. Payment was made on 17 October 2012 which included the outstanding Council Tax

liability and an amount (£10) in respect of reasonable costs incurred. The amount

disputed as being reasonably incurred by the billing authority in respect of instituting the

8 Evidence 16 Sept – 17 Oct 2012 (letter 1 October 2012) SD #8

6

summons was £70; hence the sum of £60 would probably have been considered a

shortfall by the authority.

20. The authority was notified by letter 9 and sought whether it would proceed to obtain a

court order to enable enforcement of the element of costs which the council may have

considered unpaid.

21. On 17 October 2012 the billing authority acknowledged receipt of the letter, and advised

that it had been forwarded to its Court Enforcement Officers to deal with. There was no

further response in relation to the issues raised so assumed it would proceed to obtain a

liability order.

22. On 26 October 2012 the Magistrates’ Court was notified

10 that the liability had been

settled and advised that unless the application for a liability order was withdrawn the

complaint would be defended at the hearing of 2 November 2012. A summary

accompanied the letter to support several documents asserting that the sum sought by the

billing authority was an unreasonable claim for costs.

23. The complaint was heard in the Magistrates’ Court on 2 November where the bench

granted a liability order for £60 which was the sum that remained outstanding of the £70

costs which the billing authority claimed it incurred.

24. The Magistrates’ Court was contacted on 5 November 2012 expressing the wish to

appeal the court’s decision to grant the order. It then advised that a Liability Order could

only be challenged by an appeal to the High Court by way of either a case stated on a

point of law or a judicial review.

25. An application to state a case for an appeal to the high court (see SD #9) was served on

both parties, that is, the billing authority and Magistrates' Court on 22 November 2012.

26. I will not elaborate further regarding the application to the high court other than to say

that despite a second application (judicial review) for mandatory order, the case stated

has still not been delivered. The justices' clerk also refuses to respond to communications

regarding the case. Further details can be found in the attached chronology of events

document (SD #10).

27. The council was contacted on 6 February 2013 to suggest as an alternative remedy for it

to apply for the order to be quashed. The council replied on 8 February stating it was not

prepared to do this as it was correctly obtained (SD #11).

28. This was disputed in a letter dated 14 February 2013 (SD #12), on the grounds that the

application should have ceased when the aggregate of the sum outstanding and an

amount equal to the costs reasonably incurred by the authority was paid.

29. A complaint was submitted to the council 15 March 2014 (SD #3) regarding my Council

Tax demand (bill) listing a sum of £60 as being subject to court proceedings. The purpose

9 Evidence 16 Sept – 17 Oct 2012 (letter 17 October 2012) SD #8

10 Annex A of this complaint (letter 26 October 2012)

7

of the complaint was to have the council remove this sum from my account. The letter

went into some detail as to why there were procedural errors regarding applying costs in

obtaining the Liability Order and that the costs could not have been reasonably incurred

to the level it imposed.

30. There was a dispute regarding the person nominated by the council to investigate the

complaint and so shelved until a supplementary complaint letter was submitted 14 July

2014 (SD #4).

31. The letter of the 14th provided further evidence as to the procedural errors. Additionally

there was an analysis of a calculation that the council produced to support its costs. The

calculation provided evidence that expenditure had been included in its £70 standard

costs which had no basis in law with regards to instituting the summons.

32. The council provided a response which was deemed unsatisfactory and so a request to

escalate the complaint to second (final) stage submitted on 28 July 2014 (SD #13).

33. The Final Decision dated 15 September 2014 (SD #5) was not upheld. However, the

complaint had not been investigated with due consideration of the grounds that were

submitted.

Matters immaterial to complaint investigated

34. It is fair to say that the council, in concluding that the complaint was unfounded, sought

to justify its actions by inappropriately focussing its investigation on whether it had

correctly served statutory notices leading up to obtaining the Liability Order. However,

whether the notices (reminder, summons etc.) had been served in accordance with the

Council Tax Regulations was not the concern raised in the complaint. The issues were

raised specifically with reference to costs levels and their application.

35. It was demonstrated that councils are not allowed free rein to elect which budgets they

cover with court costs. For example, the regulations do not allow councils to cover, or

aim to cover their gross collection and recovery expenditure, but make provision only for

costs that they reasonably incur. Defining boundaries confine these costs still further to

include only expenditure incurred by the authority in obtaining the order, therefore not to

include ongoing costs of maintaining and monitoring payment plans etc.

36. It was further demonstrated that in cases where, after receiving a summons, the debtor

elected (or made a proposal) to pay the outstanding debt before the hearing – under

which circumstances the application would not proceed – the boundaries were confined

still further to include only costs incurred in connection with instituting the summons.

Similarly as per the previous paragraph it is not legitimate to include costs of setting up

and monitoring payment plans etc., where payment is by agreement under regulation

21(5) of the regulations (see §§106–110).

Note: Regulation 21(5) makes provision for re-scheduling payments. In such cases, a

debtor may, if the agreement is kept, escape incurring summons costs.

8

37. The Final Decision provides no evidence that the investigation seriously considered

concerns about how costs were applied or the level with respect to the law. However,

some related matters were briefly mentioned in the report's finding so I will highlight and

comment on them here.

Note: Nothing other than that mentioned below (Contention I to IV) had relevance to

the complaint.

Final Decision contention I

38. The Investigating Officer states in her Final Decision:

"It is Mr Xyxyxy's belief that North East Lincolnshire Council is obliged to

calculate the level of costs incurred in individual cases who exercise their legal

right to challenge them. The Council Tax (Administration and Enforcement)

Regulation 1992 (The Regulations) allow the Council to make an order in respect

of a sum of an amount equal to the costs reasonably incurred in obtaining the

order, the regulations do not specify what expenditure may or may not be included

within the level of cost charged to the non-payer."

39. NELC provides clear evidence that it has not understood the key issues surrounding the

complaint with regards the law providing court costs at two stages. The procedure is

clarified in an Explanatory Memorandum prepared by the Local Government Finance

Division of the Welsh Assembly Government (See §§4.2–4.5 of SD #14) under the

heading “Summons/ Liability Order” (emphasis added):

“4.2. When council tax payers...fail to make their payments as scheduled in their

demand notices, they will receive reminder notices, second reminder notices and

final notices. Should they still fail to pay the amount outstanding or come to an

agreement with the local authority, a summons may be issued for their appearance

at the Magistrates Court. The issue of a summons adds a cost to the debtor’s

account.

4.3. If the debtor is unable to pay the balance in full prior to the court hearing date

they are required to attend court. The Council will request that the Magistrates’

Court grant a liability order for the debt in question. This procedure will incur a

further cost for the debtor.

4.4. The Council Tax (Administration and Enforcement) Regulations

1992...provide that the costs added to the debtor’s account at these two stages

should cover the costs that are reasonably incurred by the authority. However, the

amount that is charged varies considerably between local authorities in Wales so

taxpayers in some authority areas may pay up to twice as much as those in other

areas.”

9

40. The opportunity arises for the council to apply appropriate costs firstly in respect of

instituting the summons and secondly where the complaint has proceeded to court where

the appropriate costs include additional expenditure in prosecuting the case.

41. The costs which are the subject of my complaint relate only to those initially applied in

respect of instituting the summons (34(5)(b)). The council fails to recognise this as

emphasis is on the regulations providing for an order in respect of a sum of an amount

equal to the costs reasonably incurred in obtaining the order (34(7)(b)). This is a

fundamental misunderstanding of the issues which are that costs in respect of obtaining

the order are front loaded to those in respect of instituting the summons, i.e., in breach of

the regulations.

42. The council has only loosely got it right by stating that the regulations do not specify

what expenditure may or may not be included within the level of cost. As has been

detailed briefly here already, the regulations do in fact define boundaries confining these

costs. It has also been proved, with the assistance of the council's supporting calculations,

that expenditure outside these confines is inappropriately included.

Final Decision contention II

43. The Investigating Officer states in her Final Decision with reference to NELC’s 17

February 2014 Cabinet report (SD #15):

"The Cabinet report from 17/2/14 explains that it is not practical to calculate the

level of costs incurred in each individual case and therefore a reasonable estimate

must be made of the total of such costs, divided by the estimated number of

applications to be made for a summons. The Regulations do not place any

statutory requirement on the Council to calculate the costs on an individual basis."

44. Again the focus has been on total expenditure with no consideration for the law and its

provision for applying appropriate incurred cost at relevant stages of proceedings. The

authority cannot lawfully disregard the Regulations to justify streamlining operations. It

is fundamentally misunderstanding the Regulations to state that they “do not place any

statutory requirement on the Council to calculate the costs on an individual basis”

45. It is open to those against whom the council proceeds, to challenge the application in

their individual cases. Therefore, the authority should at least – where representation is

made about the costs and where liability is straightforwardly settled – be able to

determine the appropriate expenditure incurred to ensure that its customers are treated

lawfully.

46. The Guidance states ‘that the Court may wish to be satisfied that the amount claimed by

way of costs in any individual case is no more than that reasonably incurred by the

authority’, because there is in fact provision made for individual costs under regulation

35 of the Regulations (Liability orders: further provision).

10

47. The Court would require satisfying on an individual basis, not for any arbitrary reason,

but specifically because an individual sought to challenge the costs, and because

regulation 35(1) provides that (as well as a bulk order) a single liability order may deal

with one person and one amount. Therefore, in the face of such a challenge, the Court

would require satisfying that the amount claimed by way of costs in that particular case

would be no more than that reasonably incurred by the authority. This is why the law

provides that a single liability order may deal with one person and amount in which case

the order shall be in the form specified as Form A in Schedule 2. However, a form

distinct from that specified as Form B, may if the court thinks fit, deal with more than

one person and amount.

48. The relevant part of regulation 35 follows. Below that are the relevant Schedule 2 forms

(Form A and Form B):

“Liability orders: further provision

35.—(1) A single liability order may deal with one person and one such amount (or

aggregate amount) as is mentioned in regulation 34(7) and (8) (in which case the order

shall be in the form specified as Form A in Schedule 2, or a form to the like effect), or,

if the court thinks fit, may deal with more than one person and more than one such

amount (in which case the order shall be in the form specified as Form B in that

Schedule, or a form to the like effect).

(2)......”

11

FORM A Regulation 34 of the Council Tax

(Administration and Enforcement)

Regulations 1992

LIABILITY ORDER IN RESPECT OF COUNCIL TAX

.....Magistrates’ Court

Date:

Defendant:

Address:

On the complaint of [name of billing authority] that the sum of £[ ] is due

from the defendant to the complainant under Part V of the Council Tax

(Administration and Enforcement) Regulations 1992 and is outstanding, it is

adjudged that the defendant is liable to pay the aggregate amount specified

below, and it is ordered that that amount may be enforced in the manner

mentioned in Part VI of those regulations accordingly.

Sum payable and outstanding:

Costs of complainant:

£

£

Aggregate amount in respect of which the

liability order is made:

£

Justice of the Peace

[or by order of the Court

Clerk of the Court]

12

FORM B Regulation 34 of the Council Tax

(Administration and Enforcement)

Regulations 1992

LIABILITY ORDER IN RESPECT OF COUNCIL TAX

.....Magistrates’ Court

Date:

On the complaint of [name of billing authority] that the sums specified in the

Table below are due under Part V of the Council Tax (Administration and

Enforcement) Regulations 1992 due from the defendants so specified to the

Complainant and are outstanding, it is adjudged that the defendants are liable

to pay the aggregate amounts specified in respect of them in the Table, and it is

ordered that those amounts may be enforced in the manner mentioned in Part

VI of those regulations accordingly.

TABLE

Name and

address of

defendant

Sum payable and

outstanding

Costs of

complainant

Aggregate amount in

respect of which the

liability order is made with

respect to the defendant

Justice of the Peace

[or by order of the Court

Clerk of the Court]

49. Turning to the Cabinet report and its explanation that it is not practical to calculate the

level of costs incurred in each individual case. The task need not be so onerous that it

would be necessary to calculate the level of costs incurred in each individual case. In

seeking to standardise costs, the very least requirement would be to have a standard sum

for the summons and another for the liability order; then only where costs are challenged

or an amount tendered (as per the regulations) would they need individually assessing.

50. What is of relevance here is the council, before its 2011 budget, applied costs in

accordance with the regulations; initially at a lesser sum than the total in respect of the

summons and a further sum on being granted the liability order. In reviewing its policy

(involving raising the overall costs as well as front loading them) the cost with respect to

instituting the summons saw an overnight hike of 120%.

51. The council’s decision to no longer carry out the procedure in accordance with law was a

budgetary measure that intended to raise an additional three quarters of a million pounds

(£752,000) in costs income over a four year period. This was the preferred measure – in

response to public consultation – over alternative proposals to introduce a charge for

13

replacement bins or garden waste collections. (re, Cabinet budget report – 14th February

2011).

52. The council provided additionally the following statement:

“The decision to increase the summons charge and make no subsequent charge

for a liability order was agreed by members following public consultation in

relation to the budget proposals.”

53. The minutes of the council’s Scrutiny Chairs’ Liaison Group (re, minutes 28 Jan 2011)

reveal that a Councillor raised his concern about the impact this proposal would have on

the most vulnerable people. The council’s Executive Director of Business Services

answered with no relevance whatsoever saying that “the Council had a duty to collect

monies owed”.

54. The Councillor’s concerns were about the authority wanting to front load and increase

summons costs with the intention of raising £0.75 million additional revenue over 4

years. The director failed to grasp this as his apparent understanding was that the issues

concerned the council pursuing (or not pursuing) recovery through the Magistrates' court.

55. If he was suggesting that inflating costs would achieve improved collection of “monies

owed” by virtue of deterring late or non-payment, then this idea would be at odds with

the proposal’s objective. Achieving the forecasted £188,000 additional income each year

was reliant upon householders being caught out with recovery. Inflicting penalties to

coerce prompt payment would have the exact opposite effect.

56. It seems a fair assessment that the Councillor’s objections were a minor inconvenience

for the council’s Executive Director of Business Services who showed neither any

understanding of the concerns raised nor regard for the legal implications so

consequently dismissed the matter.

57. Of more serious concern however, was the failure of the democratic process which

allowed the proposal. The report provides no evidence of any member in attendance

challenging the Executive’s response, which leads one to believe that the group was

toothless and the meeting merely a formality with the implementation of the proposal a

foregone conclusion.

58. It should be noted that although elected members had the opportunity to scrutinise the

detail behind the proposal at consultation scrutiny meetings, they took place in private as

the details were deemed exempt from publication under the Access to Information rules

of the Local Government Act 1972. Despite the secrecy, there is a publicly available

summary of the response to the budget consultation dated 31 January 2011 where under

the recommendations relating to proposing an increased summons costs it states the

following:

14

“The SCLG [Scrutiny Chairs’ Liaison Group] supports this proposal in

principle. However members sought reassurance that increase in charges would

not create a perverse incentive to summons.”

Interestingly the Council Tax summons count for 2013-14 was 62% higher at 17,197

compared with the 2010-11 figure of 10,675.

59. The seriousness of official error and contempt senior officers had for the law can not be

overstated. It was clearly acting ultra vires to propose a money making scheme that

involved manipulating court costs and made more serious with its implementation being

solely dependent on the outcome of a ballot, as opposed a true evaluation of expenditure.

60. The costs incurred in respect of issuing a Summons had either increased by 120% or they

hadn’t and not appropriate for consultation. Whether it was preferred by the public to

raise additional money this way over introducing charges for waste services was not a

relevant factor.

61. It is because of the council’s inappropriate focus on procedure in serving statutory

notices and misunderstanding of the costs issues that the following is detailed here to

reinforce the assertion that the specific concerns of the complaint had not been dealt with.

Increase / front load costs to raise additional £188,000 per annum

62. Below is a record of historical costs, going back to 1998/99, showing the composition,

i.e., split between Summons costs (regulation 34(5)) and Liability Order costs (regulation

34(7)). Figures are also provided for Business rates (NNDR) for reasons which will

become apparent later in this document (See §69, “Additional £38,000 per annum cost

income”).

Council Tax Business Rates

Summons Liability Order Summons Liability Order

1998/99 £00 £40 £00 £40

1999/00 £10 £32.50 £10 £32.50

2001/02 £10 £35 £30 £35

2002/03 £15 £35 £30 £35

2004/05 £30 £25 £45 £25

2006/07 £32 £25 £47 £25

2011/12 £70 – £70 –

2013/14 £60 – £70 –

Table 1: Council Tax / Business Rates costs raised per summons and liability order

63. Regarding their application, costs were in line with the Regulations before the 2011

review. NELC imposed a set amount of £32 under regulation 34(5), whereas if the case

progressed to a hearing, a costs order would be made by the court in the sum of £57 (32 +

15

25) under either regulation 34(7) or if in respect of costs only, regulation 34(8).

Therefore, only part costs equal to 56% of the total costs ordered on the complaint being

heard were deemed to be incurred in respect of instituting the complaint.

64. Costs appear arbitrarily split between what are termed the ‘summons’ and ‘liability

order’. The tendency to proportion costs in favour of the ‘summons’ is evident with

weight shifting over time to the more frequently incurred summons charge.

65. In 1998/99, it appears that expenditure incurred in respect of instituting the summons was

considered by NELC to be so insignificant that none of the total £40 charged in obtaining

the order was attributable to it. Presumably the council recognised the potential for

generating more income and perhaps using the summons costs as a deterrent against

householders defaulting with its introduction of summons costs the following year.

However, in contrast with the council’s current policy (2011/12) to attribute all the costs

to the summons; in 2001/02 it was deemed only 22 per cent was incurred in respect of

instituting the complaint. Perhaps the fact that this had risen to 30 per cent the year after

and in 2006/07 considered to account for over a half of the total costs of securing the

liability order, the chance for generating more income and /or to encourage prompt

payment was too tempting an opportunity.

66. There must be an accounting for why costs, once weighted in respect of the court hearing

and having less than a quarter attributed to instituting the complaint when introduced in

1999/00 are all now incurred at that stage. A regime change in administration is unlikely

to have contributed as regulations relevant to the application have gone unchanged over

the period. The fee payable per entry on the complaint list to the Magistrates Court

accounts for a small change in composition. This was increased by £2.30 in 2006/07 from

£0.70 to £3 under the provision of the Magistrates' Courts Fees Order 2005, which came

into force on 10.01.06 and would account for the summons costs rising by £2 in that year.

The fee in respect of instituting the complaint has undergone no further changes to the

level by any subsequent amendments to the Court Fees Order.

67. There is no provision for the billing authority to impose costs for anything other than

covering reasonably incurred expenditure. There are however, publicly available

documents detailing how, by reviewing costs, it would benefit either from additional

income and/or encouraging behaviour. Comparing council tax costs with those similarly

imposed for Business Ratepayers allows for a clearer picture of how manipulating the

level and/or composition has enabled this.

Additional £38,000 per annum cost income

68. A review in 2001/02 disclosed that if the billing authority were to follow the trend of

other councils by charging more in respect of Non-Domestic Rates than for Council Tax,

the extra cost would encourage prompt payment. It was forecast that charging three times

more for what had been identical costs would also improve cash flow with the overall

16

effects of the review potentially generating additional income of £38k per annum11

. A

report of the Director of Finance to the Cabinet Committee (Review of Recovery Costs 6

April 2001), details at paragraphs 4, 5 and 6, the relevant matter, as follows:

"4. The proposal would be to increase by £2.50 to £35, the amount charged for a

Liability Order for Council Tax debts. However, with regard to Non-Domestic

Rates, the Summons cost would rise from £10 to £30 in addition to the £2.50

extra for a Liability Order.

5. The decision to charge more in respect of Non-Domestic Rates is one which

other local authorities are taking in increasing numbers. (There are two in this

region currently, Bradford and Sheffield.) The reasoning behind this is that it is

believed that some businesses deliberately delay payment of Rates as the

penalty for late payment is so small in comparison to the amount that might be

owed. The extra cost is seen as a way of encouraging prompt payment.

6. If the proposal is accepted, then based on the number of Summonses issued

and Liability Orders obtained in the current year, an extra £38,000 of

additional cost income would be generated bringing the total to approximately

£390,000.”

69. A liability order is simply the vehicle allowing billing authorities to pursue monies owed.

Importantly, an account holder defaulting does not compel the authority to apply to the

court; rather it has discretion, and if intending to utilise any of the enforcement measures

authorised, is required by law to obtain an order. Having this discretion, it could be seen

as exploiting the judicial system in cases where complaint is made purely to penalise a

debtor with added costs.

70. A liability order is simply the vehicle allowing billing authorities to pursue monies owed.

Importantly, an account holder defaulting does not compel the authority to apply to the

court; rather it has discretion, and if intending to utilise any of the enforcement measures

authorised, is required by law to obtain an order. Having this discretion, it could be seen

as exploiting the judicial system in cases where complaint is made purely to penalise a

debtor with added costs.

71. The 2001/02 review provides clear evidence of the council's disregard for the law with its

abuse of the judicial system. The cost of issuing a summons should only take into

account the administration involved and not a “deterrent” element, as there is nothing in

the legislation to support an increase in costs on this basis. It might have been considered

an effective measure for improving cash flow, but until it is legislated that a penalty may

be imposed, the law only provides for the billing authority to recharge costs to the

resident which have been reasonably incurred.

11

Article, Annex C “Council Tax Summons earn town halls £millions each year”

17

72. To leave absolutely no doubt, the liability order does not function to punish late or non-

payment neither can the costs which may be reclaimed from the respective debtor

function as a fine or penalty nor used to encourage prompt payment.

Hike in summons to fund additional staff / failure in implementing new IT system

73. The 2002/03 increase was detailed in a report to the Cabinet Committee identifying ways

of funding additional resources to ensure the backlog of work that had arisen due to

changes in the IT system were addressed. Recommendations were that the Council Tax

summons cost be increased by 50% with immediate effect. The forecasted additional

revenue would easily produce the £30k per annum that had been costed to pay for

additional staff. The Director of Finance’s report (Revenues and Benefits Service

Staffing Issues 8 November 2002) details the relevant matter, as follows:

“SUMMARY – The report identifies ways of funding additional

resources to ensure the backlog of work that has

arisen due to changes in the IT system are

addressed.

RECOMMENDATIONS:

That Cabinet consider the following recommendations:

.....

• that the Council Tax establishment is increased by two members

of staff.

• that the Council Tax summons cost be increased from £10 to £15

with immediate effect.

........

14. As far as Council Tax administration is concerned it is suggested

that, as an interim measure pending the full review of the

establishment as agreed within the Best Value Review process, two

additional staff be employed. These additional staff will not only

assist in the clearing of the backlog of work but also in maintaining

the day to day work at an acceptable level in order to improve the

current level of recovery being achieved. The additional costs of

these staff can be met by an increase in the level of summons costs

from £10 to £15. This increase would produce additional income in

excess of £30,000.”

74. The billing authority seems to have used liability order applications as an instrument to

manipulate income generated by the authority for purposes other than meeting costs

incurred exclusively for the work attributable to instituting the complaint. The report

18

implied that the billing authority could rely on at least 6,000 residents being caught per

annum with a Summons thus raising in excess of the additional £30,000 required to fund

two extra staff to clear the backlog of work caused by IT complications.

75. Aside from inappropriately increasing costs to fund additional staff to clear the backlog,

the figure used on which it based its calculations was unusually low and if based on a

typical number of summons served each year would have needed only half the amount it

was increased to pay for the two proposed members of staff. However, the figure based

on the subsequent three years average was not 6,000 but 12,277 householders liable for

the summons penalty. The 50% or £5 increase in the Summons fee would therefore pay

for in excess of four staff; more than double what it was looking to fund by residents

caught out with these penalties.

Costs No of Summonses Summons costs raised

2001/02 £10 11,465 £114,650

2002/03 £15 6,140 £92,100

2003/04 £15 10,632 £159,480

2004/05 £30 13,995 £419,850

2005/06 £30 12,205 £366,150

Table 2: Council Tax costs raised per summons, number and total raised

76. There is no recorded information to justify the summons costs doubling to £30 in

2004/05. However, if like the previous increase, it was to fund additional staff, then the

£260,370 raised additional to the previous year would be sufficient to fund another

seventeen, based on the previous employment costing.

77. Turning to the Final Decision of the Investigation; regardless of the failure to consider

the law as it applies, NELC misleadingly states that the total costs are divided by the

estimated number of applications to be made for a summons. It was highlighted in the

complaint that a substantial number of householders summonsed were not included in

the estimated number of applications, therefore artificially inflating the individual cost.

78. The impact this has on the individual cost can be appreciated when the figure submitted

to the Chartered Institute of Public Finance and Accountancy (CIPFA) relating to the

number of Council Tax summonses issued in 2013/14 was 17,197. Set this against the

dividing figure used in the Council's 2013/14 calculation of 10,000 and it is obvious that

the defendants actually paying the costs are paying an inflated sum to either compensate

for the councils error of judgement or subsidise the costs of those others having them

waived for the most likely reason being that they agree to switch to Direct Debit (see

§§106–110, 36).

Final Decision contention III

79. The Investigating Officer states in her Final Decision:

“Mr Xyxyxy also believes that North East Lincolnshire Council inappropriately

raises revenue through Magistrates summons costs. The Guidance states that

19

local authorities are only permitted to charge reasonable costs for the court

summons and liability order and that in the interests of transparency they should

be able to provide a breakdown, on request, showing how these costs are

calculated. North East Lincolnshire Council provided a detailed breakdown based

on activity and costs on it's website for 2012/13, this was updated for 2013/14.

These breakdowns have been through stringent checks both internally and by the

District Auditors.”

80. The council – before investigating the complaint – held evidence that the costs applied

in my case included expenditure which according to the regulations is not attributable to

issuing the summons and therefore unlawful. Details are in the letter dated 14 July 2014

(SD #4) and so will not be reiterated here. The concern is that this content was not

considered in the investigation; rather the council instead opted to imply with its

reference to the District Auditor that the calculation might be a true and accurate

account.

81. The Auditor’s involvement has not been covered in any correspondence of the

complaint so is appropriate that the limited knowledge I have of this is dealt with here.

Auditor’s involvement

82. The Auditor was contacted on 5 October 2012 and furnished with the same

correspondence as had NELC’s head of revenues in raising concerns about its recovery.

These were subsequently submitted as written evidence to the Magistrates’ court for my

defence against the council’s application for a Liability Order (Evidence 16 Sept – 17

Oct 2012, SD #8). Communications since have indicated that none of the detail had

fallen within the Auditor’s responsibilities.

83. It is therefore safe to say that any satisfaction shown by the District Auditor would only

have been based on the accounts being mathematically sound, i.e., that the figures add

up. Percentage estimates will have had to be largely accepted; attributable costs, in

terms of both allowable expenditure and the regulations would have unlikely played a

part. Given that the matter of costs did not fall within the Auditor’s responsibilities and

therefore figures not subject to audit, it is difficult to see how the council’s reference to

“stringent checks” has relevance to its investigation and response.

84. Various communications regarding the District Auditor reinforces my assertions that its

involvement had no relevance to the council’s investigations.

85. The Information Commissioner for example at paragraph 21 of Decision Notice

FS50505226 stated:

“....the council confirmed that....it has entered in to consultation with District

Audit with regards to publishing a document it has since created which details a

breakdown of the reasonable costs incurred for the court summons and liability

order. In the interests of transparency, it is the council's intention that, once

consultation has concluded with District Audit, the spreadsheet will be made

20

available on the council's website and will be updated annually in adherence with

DCLG's best practice guidance.”

86. The spreadsheet referred to had appeared on the council's website and was therefore

assumed that consultation with District Audit has concluded and as a consequence

requested on 17 December 2013 that NELC disclose all recorded information in relation

to the consultation.

87. NELC responded on 16 January 2014 stating that it had “not received any comments from

District Audit relating to summons costs." However on 9 September 2013, NELC had

served the following representations to the interested parties in the judicial review

application (re, §26):

“North East Lincolnshire council Liability order costs

North East Lincolnshire council (NELC), an interested party in this action, fully

supports HMCTS submission. The costs are raised under the Local Government

finance Act 1992 which allows for costs reasonably incurred by the applicant

billing authority in obtaining that order.NELC is currently in talks with the

district auditor to justify the reasonable level of costs that it incurs in bringing

cases to liability order. NELC contends that £70 is a reasonable figure to cover

the expense of brining an account to court for a liability order. The figure is in

line with other local authorities in the area and lower than many Nationally. The

Grimsby Magistrates Court has also agreed that these costs are reasonable given

the work required to obtain a Liability order.”

88. The signals all along seemed to imply that the Auditor’s involvement would attach some

authenticity to a set of accounts supporting the reasonableness of costs when in fact the

figures were not subject to audit and NELC’s external audit contractor (KPMG) was not

willing to have a reference to District Audit on the Council’s website.

89. It wasn’t until NELC made a statement on 29 January 2014 reviewing the one it made on

the 16th that it admitted receiving a report from District Audit relating to summons costs

which it summarised as follows:

“I have reviewed our response and have found that correspondence has been

received from District Audit in relation to summons costs although this is not in

the form of recorded information held by North East Lincolnshire Council.

There has not been any formal consultation between North East Lincolnshire

Council and District Audit. A summary of this correspondence has been provided

for your reference:

District Audit were pleased with the intention to publicise the calculation in

relation to court costs, but stressed that the calculation is not subject to audit and

would therefore not want a reference to District Audit on North East Lincolnshire

21

Council’s website. District Audi were happy with the information supplied but

advised that it is a matter for the Court to decide whether or not the calculated

costs are reasonable. District Audi suggested that costs should be reviewed on a

regular basis to ensure that any changes in activity and/or expenditure is

reflected.”

90. The date NELC received the information for which the above summarises is unknown

but not unlikely to have been around the time I had been contacted by KPMG to set out

its position regarding the allegations aimed at NELC of fraud. The content of the email

(below) suggests – in light of the Council’s summary – that something similar had also

been sent to NELC.

From: Prentice, John

To: Xyxy

Sent: Wednesday, November 13, 2013

Subject: RE: North East Lincolnshire Council – Fraud

Mr Xyxyxy,

Further to your latest e-mail request of 5 November for an update report and your

previous e-mails relating to North East Lincolnshire Council we have set out our

position below.

Following our initial review regarding council tax summons costs, we have

exchanged correspondence with the Council on several occasions regarding its

approach. We understand that the Council is intending to publish information

shortly on its website to show its calculations of the summon costs for 2012/13.

(We cannot be more precise on timing as that is a matter for the Council.) The

Council will show the total costs of council tax collection and what elements

have been excluded to arrive at recovery costs which may then be recoverable

through summons costs. The figures have not been subject to audit as it is not

within our audit responsibilities. Ultimately it is a matter for the courts to

determine which costs are allowable.

This should be followed by the publication of the Council’s forecasts for 2013/14

although we have not seen any specific figures in relation to the latter.

Publication of such calculations is consistent with an increased open and

transparent approach which we have encouraged the Council to adopt, through

discussions with the Corporate Management Team and the Audit & Governance

Committee, in accordance with its own values.

Regarding the other matters upon which you have sent correspondence, you

copied us into correspondence regarding bailiffs fees which you have sent to the

Humberside Police Economic Crime Unit. This is the appropriate agency to deal

with fraud which is your primary allegation. We do not see any other matters

22

which would fall within our responsibilities. You also raised the matter of

business rates summons being charged at £70 rather than the Council requesting

actual costs at court. Again we would see this as a matter for the Court to

determine. We presume you have asked the Council directly on this matter,

although we do not recollect any of your correspondence specifically confirming

that this was done.

In case we have not previously done so, we enclose a copy of the Audit

Commission’s updated leaflet on your rights as a local government elector.

Kind regards

John

91. None of the correspondence relating to District Audit provides any evidence that checks

have been made to ensure summons costs are in line with lawful provisions. The most

checks can hope to confirm is that the way in which costs are calculated is transparent,

nothing more. The Auditor has no interest whether expenditure falls inside or outside the

boundaries defined by law, only that a breakdown is given.

92. Even transparency is disputed with it brought into question its openness in the way debt

recovery staff’s salaries are accounted for, highlighted in the 2013/14 calculation (See

Annex B to SD #4). A separate breakdown apparently exists which supports the way

recovery staff’s wages were accounted for because of a reference to a “debt recovery

salaries tab” which is not present. From this it is reasonable to assume that a calculation

has been omitted and implies a more comprehensive spreadsheet exists including

additional information on separate pages which is kept from the public.

93. This calculation has been asked for more than once but NELC point blank refuses to

disclose it. The refusal suggests that the calculation has not had “stringent checks” and

the breakdown is far from transparent. It is reasonable to suspect that this secrecy enables

the council to conceal evidence of falsely representing their accounts for which openness

would expose.

94. This might lead one to suppose that NELC may have followed in the footsteps of other

councils which have also produce accounts to support their costs but have been less

cautious in shielding the workings behind their sums. A brief case study into three of

these authorities suggests areas of unlawful expenditure that NELC might be hiding by

keeping a tight grip on its breakdown.

Case study into local authorities’ court costs

Leicester City Council

95. Leicester City Council (LCC) produce accounts in support of its costs (see spreadsheet,

SD #16) where it reveals that it accounts for staff time twice. Quite openly the hourly rate

for staff dealing with recovery is calculated at £13.94 then doubled to £27.88. This is

23

justified on the basis that the cost of employing staff to cover for non-recovery work

whilst staff are dealing with recovery work is considered to be an additional cost

attributed to recovery. The Council’s own words are that:

“We have a fixed number of staff for billing and processing work and whilst they

engage in recovery tasks that “gap” has to be filled. This has to be an additional

cost attributed to recovery as staff duties have transferred from their normal

work.”

96. However skilfully one argues its legitimacy the fact remains that for each hour that was

claimed to be spent on staff’s wages, the council tells the court it pays two.

97. The expenditure incurred by the council in respect of filling the "gap" is not attributable

to recovery. This cost is attributable to everyday billing and processing work. The

council (by sleight of hand) doubled its estimated expenditure for the purposes of

justifying higher costs. It is inconceivable that high ranking officers are not aware these

accounts are being falsely represented and would think on the balance of probabilities it

would be those at the top who would be responsible for sanctioning this move.

Note: There would appear to be Criminal implications.

98. The judgment defining dishonesty used in criminal prosecutions is the court of appeal

case (R v Ghosh [1982] EWCA) from which a test to define dishonesty was developed

requiring two stages. The first, an objective test, where a jury would be required to decide

if an act was one that an ordinary decent person would consider to be dishonest and the

second, a subjective test where a jury would need satisfying that the accused must have

realised that what he was doing was, by those standards, dishonest. The second test

(subjective) is not applied if objective test fails

The judgment of the Court that is material to the test is as follows:

"In determining whether the prosecution has proved that the defendant was acting

dishonestly, a jury must first of all decide whether according to the ordinary

standards of reasonable and honest people what was done was dishonest. If it was

not dishonest by those standards, that is the end of the matter and the prosecution

fails.

If it was dishonest by those standards, then the jury must consider whether the

defendant himself must have realised that what he was doing was by those

standards dishonest. In most cases, where the actions are obviously dishonest by

ordinary standards, there will be no doubt about it. It will be obvious that the

defendant himself knew that he was acting dishonestly. It is dishonest for a

defendant to act in a way which he knows ordinary people consider to be

dishonest, even if he asserts or genuinely believes that he is morally justified in

acting as he did."

24

99. Clearly a properly informed jury as to the facts of the case would have no difficulty

establishing the objective test. Similarly, there can be no doubt that even if executive

officers of the council held genuine beliefs that their actions were morally justified, they

must realise that ordinary people would consider them to be dishonest.

South Gloucestershire Council

100. It may be that NELC’s less than open approach to releasing a transparent breakdown is

down to something incriminating in its accounting which makes LCC’s doubling of its

hourly rate look like small change.

101. South Gloucestershire Council (SGC) for example shows in its costs calculations how it

ramps up its employment expenditure. SGC employs a method whereby it calculates the

number of man hours (and other costs) attributable to producing 1,000 summonses and

then factors that up to an estimated number of summons for its breakdown.

102. In its April 2009 estimate (SD #17), the number of staff hours (excluding IT costs)

attributable to producing 1,000 summonses was 1,132 and ranged from the highest

hourly rate of £173.21 to the lowest of £32.56. The majority of the time (900 hours) was

attributable to Recovery and Council Tax Officers where the hourly rate applied was

£47.21. When you compare this with LCC, even after it dodgily doubled its rate to

£27.88, this is a 70% increase; however, comparing it with its legitimate rate this

increase is around 240%.

Great Yarmouth Borough Council

103. The lack of transparency makes the task of evaluating whereabouts in the recovery

process staff costs are attributable. NELC’s mistaken belief that all recovery costs may

be recharged to the defendant, regardless of what the law states, may explain why it

thinks there is no need to provide a clear breakdown.

104. Great Yarmouth Borough Council (GYBC) has openly attributed costs both before and

after the period of recovery for which the law allows. This is useful in helping

demonstrate how, if NELC had been similarly open, its breakdown would likely to have

been equally incriminating.

105. The breakdown tells us (SD #18) that roughly £75 is calculated as the total sum of costs

incurred in obtaining a liability order. Around 5% of this (it estimates) is attributable to

additional costs it incurs from after issuing the summons until the order is obtained. The

matter which GYBC seem unconcerned about is that by imposing this same sum in

cases where the defendant merely receives a summons as for those progressing to court,

they are breaking the law. There requires no legal knowledge to see from the

spreadsheet that inappropriate expenditure (liability order costs) are front loaded to the

summons.

106. In perhaps a less obvious way, the calculation identifies there are costs attributable to

work involved after the court case which are incorporated unlawfully into the summons

25

costs. The regulations permit expenditure only up until the liability order has been

obtained, but included in a sum of almost £400,000 are post liability order activities

such as making attachments of earnings/benefits, dealing with arrangements and

administration costs in referring cases to bailiffs.

107. Of particular relevance to NELC is its policy surrounding payment arrangements. If a

potential defendant accedes to the council’s preferred payment method of direct debit,

he is given – as an alternative to the council demanding full payment/obtaining a

liability order – the opportunity to bring the account up to date. The upshot is that the

debtor, ordinarily liable for the whole year’s tax (plus court costs) at once, can continue

as normal paying by instalments.

108. In cases such as these, NELC has clearly incurred costs for the extra work needed to

make payment arrangements. In addition, and as a consequence of the arrangements,

there are costs in respect of having to monitor these accounts. Importantly however, for

the purposes of accounting for summons expenditure, these costs cannot legitimately be

recharged via the summons because the extra recovery work is not connected with those

cases as those cases did not result in a summons.

109. Ironically, in comparison with account holders who avoid summons costs by entering

into payment arrangements, those who do have summons costs applied cause less extra

work for the council.

110. These costs, along with those in respect of payment arrangements, monitoring accounts

and other administration costs incurred after the liability order make up a significant

amount of gross collection and recovery expenditure. However, it cannot be overstated

that there is no lawful basis for the billing authority to include this element in the gross

recoverable costs from which it then determines a standard sum for an individual

summons.

Final Decision contention IV

111. The Investigating Officer states in her Final Decision:

“The Clerk to the Justices is kept informed of the costs that are to be charged for

a summons for Council Tax. The Guidance highlights that while it is likely that

authorities will have discussed costs with the Clerk to Justices it should be

recognised that the Court may wish to be satisfied that the amount claimed by

way of costs in any individual case is no more than that reasonably incurred by

the authority. In Mr Xyxyxy's case he chose to attend court and provide evidence

to the magistrates outlining why he felt that the remaining £60 summons costs

were unreasonable, in this case the Liability Order was granted for the

outstanding amount, this would indicate that the Court were satisfied that the

amount claimed was reasonably incurred by the Council.”

112. It should be borne in mind that that the complaint concerned NELC making the

application for a liability order in circumstances where the regulations provide that the

26

application “shall not be proceeded with” (complaint letters, SD #3 & #4). This had

already been stressed in the letter asking for the complaint to be escalated to the

council’s final stage of its formal complaints procedure (SD #13).

113. Despite it being made clear that NELC erred in law by applying for a Liability Order in

the Magistrates’ court, the council has chosen (as well as in its first response) to hide

behind the negligent decision of the Magistrates’ Court to grant a court order.

114. Evidence as to why NELC had no lawful basis to make the application has been covered

already and will not be reiterated here. However, that is with the exception of the court’s

jurisdiction over the costs level in proceedings where after a summons has been issued,

but before the application is heard, the amount outstanding plus the costs incurred up to

the time of payment is paid or tendered.

115. In these circumstances the court has no jurisdiction and the reason why NELC had a

minimum obligation (if not accepting payment) to at least support its costs in the face of

being challenged as to their reasonableness.

116. The relevant part of regulation 34(5) is provided for reference below:

“(5) If, after a summons has been issued in accordance with paragraph (2) but

before the application is heard, there is paid or tendered to the authority an amount

equal to the aggregate of—

(d) the sum specified in the summons as the sum outstanding or so much of it

as remains outstanding (as the case may be); and

(e) a sum of an amount equal to the costs reasonably incurred by the authority

in connection with the application up to the time of the payment or tender,

the authority shall accept the amount and the application shall not be proceeded

with.

(6)....”

The following explains why the regulations relevant to costs provide no involvement for

the court to determine the level in proceedings where payment is made before the

application is heard:

i. After a summons has been issued but before the case is heard, the court has

no jurisdiction over the level a council may claim in costs and is of no

consequence whether deemed reasonable by the court (only at the hearing

would the court have power to question them).

ii. The amount paid or tendered to the authority is neither prescribed nor can a

standard sum – in a legal sense – be agreed by the Court. It is therefore open

27

to the council to accept payment at this stage, being mindful of the amount

tendered as may vary from case to case.

iii. If an amount was paid or tendered, and the council failed to agree the sum

(the court yet has no power), then a council, by virtue of regulation 34(5)(b)

must be obliged to support its claim in order to justify the sum is no more

than costs reasonably incurred.

iv. Proceeding with the application once an amount has been paid or tendered

would be breaching regulation 34(5), as it clearly states:

“the authority shall accept the amount and the application shall not

be proceeded with”

117. NELC’s Investigating Officer chose to address the court’s involvement which I hope

now has been shown to have been irrelevant to the complaint. However, in light of the

court’s negligence in granting an order the reasons for its dereliction of duty will be

dealt with here too.

Magistrates’ court’s Dereliction of duty

118. NELC is aware that each of its monthly conveyor belt style proceedings earns it

hundreds of thousands of pounds from costs with substantial sums going to the court

itself. It also knows that these orders are rubber stamped in their thousands without the

court having the slightest knowledge or interest as to whether or not the costs asked for

have been reasonably incurred in accordance with the law.

119. It is stretching it to say the least for the council to hold genuine belief that the court

granted the order on being satisfied that the amount claimed was reasonably incurred.

NELC sought to point the finger so responsibility for the maladministration was solely

with the court, when in fact responsibility for the error was equally NELCs.

120. NELC will unlikely be aware that soon after the court hearing a transcript of the

proceedings was produced which is retained on file. Referring to the records it is clear

that the bench chairman held the belief that a democratically elected body had set the

costs. NELC must have overlooked this whilst producing its Final Decision as it would

have indicated that (in his own mind) he had no discretion to vary the level of costs, not

that he was “satisfied that the amount claimed was reasonably incurred”.

121. It was put to the bench that a breakdown of expenditure should have been submitted by

the authority from which it could determine appropriate costs. The Clerk advised that

this should be the way to go and the bench agreed.

122. The council’s prosecution then stated they were not required to justify costs to the court

and had never submitted a breakdown but proceeded to describe in general terms that

the costs covered Council Tax collection and recovery, IT systems, employment of staff

and Her Majesty's Court Service for the use of their facilities.

28

123. This was admitting to the bench that costs were being claimed for Council Tax

collection. It was submitted in evidence that financing the Council Tax department was

not an overhead it could lawfully fund through court costs. The bench however, seemed

satisfied with the council’s statement and made it obvious that he believed the use of the

court should make up some of the summons costs.

124. With the challenge being that costs in respect of the court hearing were being unlawfully

incurred in respect of instituting the summons, it showed the bench’s ineptness to deem

expenditure for the use of court premises could be legitimately recharged in respect of

issuing the summons.

125. The bench remained uninterested in the evidence, preferring instead to accept the

council’s irrelevant responses which concluded with the statement that "there is no need

to justify the amount".

126. Many aspects of the written evidence were presented orally to the court which had a

zero impact. The bench it seemed had decided, most likely before the hearing that it

would favour the council even in the absence of a breakdown to support its costs.

127. Even the Clerk to Justices word held no sway when confirming that the set recovery

procedure involved the summons issue and then later preparations for court, for which

regulation 34 provided progressive costs.

128. Clearly, cases proceeding to court incur costs which include expenditure of issuing the

summons. It cannot mean conversely that cases for which a summons has been issued,

but not progressed to a hearing, can include costs of making the application and

obtaining the order.

129. The regulations are explicit in their references that those cases for which liability is

settled prior to a hearing will only incur costs of instituting the application. By

formulating the regulations this way, it must have been parliament’s intention to provide

a person issued a summons the opportunity to reduce the otherwise higher costs by

settling liability before the hearing date.

130. It says something if on receiving a summons, a debtor settling the outstanding sum,

incurs no less costs than if he had not paid and the case proceeded to court. This is true

where councils have elected to front load all the costs and apply them on issuing the

summons. Once receiving a summons therefore, a debtor might as well not bother

paying until after an order has been obtained and subsequent enforcement notices sent.

This however, would impact negatively on collection and the reason why the regulations

were not devised this way.

131. NELC’s annual budget for council tax recovery totalled £1.13 million for which £100k+

was attributed to Control & Monitoring. A case was argued for this to have been

claimed under false pretences as there appeared no effective monitoring of liability

29

order applications. A news article

12 “She’s at the door: Britain’s first £1m bailiff”

reports. The letter 1 October 2012 (see Evidence, SD #8) provides comprehensive

details and will only briefly be mentioned here.

Note: A recent summons issued in error (5.11.14) further supports the assertion that

there is a failure to monitor accounts and court proceedings are instituted by the

authority’s Council Tax processing system. [See Annex E omitted here].

132. Regina v Brentford Justices ex parte Catlin [1975] QB 455 was referred to in disputing

the level of expenditure that was attributed to monitoring and control. It was contested

that over a five year period, a total 3,528 Liability Orders had been issued for initial debt

of £50 or less despite being policy for the council to pass accounts to enforcement for

amounts over £50. This along with summonses containing incorrect and out of date

information issued on 3,361 accounts for a hearing of 2 June 2011 pointed to neither the

Magistrates’ court nor more crucially the local authority incurring costs in respect of

monitoring liability order applications.

Note: Numbers of householders receiving council tax summonses has substantially

increased since the benefit reforms. Though this should have had the knock on effect of

lowering the standard costs sought per individual, councils have continued requesting

the same level and Magistrates’ courts continue awarding them

13.

133. In the case between "Regina v. Brentford Justices, Ex parte Catlin" it was held that “a

decision by magistrates whether to issue a summons pursuant to information laid,

involves the exercise of a judicial function, and is not merely administrative.”

Lord Chief Justice, Lord Widgery’s closing judgment:

“....before a summons or warrant is issued the information must be laid before a

magistrate and he must go through the judicial exercise of deciding whether a

summons or warrant ought to be issued or not. If a magistrate authorises the issue

of a summons without having applied his mind to the information then he is guilty

of dereliction of duty....”

134. Negligence was similarly apparent with neither NELC nor the court being mindful of

the fact that the laws governing court costs differ in Council Tax and Business Rates

cases. NELC’s March 4, 2011 letter (See Annex B to SD #3) informed the court that its

decision to increase costs charged for a Council Tax summons would apply similarly to

Business Rates. Annex C of the same document (SD #3) shows that the court had noted

12

Sunday Times 13 November 2011 – “Debt collection on behalf of councils is booming as people are chased for as little

as 1p….A freedom of information request to North East Lincolnshire council revealed it issued 1,387 court orders for

debts of less than £25 between 2006 and 2011 including 82 for less than £10 and three for just one penny..”

13 Article, Annex D “Council Tax prosecutions hit new high as benefit reforms take hold”

30

this in its 8 March response. It is apparent that the court, without evidence supporting

the 120% hike, approved the costs and had not contested procedural errors in liability

order applications for Business Rates.

135. Unlike Council Tax, nothing in the regulations governing Business Rates provides that a

defaulter may halt proceedings, if payment is made of the outstanding liability plus

incurred summons costs, before the case is heard.

136. The law states that in the case of Business Rates applications, an order for costs must be

made by the court. However, NELC instructs defaulters that on receiving a summons, if

they ‘pay the full amount owing including all costs before the date of the hearing no

further action will be required’.

137. It appears in those circumstances, the council does not apply to the court for an order of

costs; in the year 2011-12, statistics reveal out of 932 business ratepayers summonsed,

33% of those incurred £70 costs where no liability order had been granted 14

.

138. The evidence was not going to sway the bench chair as he was implying he had no

discretion in the matter of ordering costs. His claim, whether he believed it or not, was

that a democratically elected body had set these costs and so that was the end of it.

139. It has been highlighted already that the court’s judgment in ordering the costs was

exploited by the council’s investigating officer to support the decision which rejected

the complaint as being unfounded. However, more evidence tending to suggest that

neither the court nor NELC can be trusted to carry out public duties is uncovered in the

Justices’ draft statement

15 which was brought about by an application to the court to

state a case for an appeal to the high court:

“We recognise that in all cases where costs are claimed we always have a

discretion as to whether to order them, and if so, in what sum. Although the

appellant admitted the matter of complaint and costs would therefore normally

follow the event, the fact that the respondent asked for the normal amount of costs

in this case did not prevent us from reducing the amount or refusing to make an

order for costs at all.”

The justices’ and NELC are without doubt motivated by self interest and change their

position in a way which advantages their argument at the given time.

140. The bench chairman gave his assurance he had thoroughly read the submitted evidence

and proceeded to deliver the decision but first singled out one paragraph from the forty

or so pages. It seems he didn’t read it to consider the evidence but to find just one thing

that would give him an excuse to justify invalidating the entire submission.

14

Letter to Humberside Police Business Rates summons fraud 05 Sept 2013 – SD #19

15 Draft case stated for appeal to the high court and Representations made on the case – SD #20

31

141. The evidence was a copy of the series of correspondence sent to the head of revenues

before the court proceedings alleging that the procedure regarding the application of

costs which NELC had adopted was unlawful.

142. The paragraph singled out appeared in the letter dated 25 September 2012 (see Evidence

SD #8) which is quoted below:

“This is almost certainly a revenue scam. The true costs incurred by the authority

are clearly a fraction of those dishonestly being claimed through the court. It is

also clear North East Lincs residents charged with these costs, are being exploited

by the Magistrates' court and council's joint heist operation.”

He had determined this to be contempt of court, though it seemed more like he was

exploiting this as leverage to justify dismissing the evidence; perhaps to imply he would

overlook the contempt issue if his blatant disregard for the facts and error in judgement

were not pursued in an appeal.

143. In concluding this part, the council must be mindful that if the Court held genuine belief

that the expenditure claimed was reasonably incurred by the Council and all aspects of

the costs application were lawful, it would not be phased with the prospects of the case

being scrutinised by the high court. The justices have gone to extraordinary lengths to

ensure progress of the appeal is obstructed with the application ultimately being stopped

in its tracks.

Summarising what the council did wrong

144. The council served a reminder notice in respect of council tax for payment that had not

been made by the due instalment date. This was correctly served in accordance with the

relevant regulations; however, there were concerns that the notice, which warned of the

issue of a summons if the demands were not met, also carried the threat of incurring

court costs of £70.

145. A letter responding to this was sent to the head of revenues outlining the reasons why

the level of costs quoted could not have been reasonably incurred and consequently an

unlawful demand (Evidence, SD #8 letter 16 September 2012). It was informed that

there would be more letters to come providing further supporting evidence of my

allegations.

146. The head of revenues responded in a letter 20 September (SD #21 ) stating that she was

“not prepared to enter into further correspondence regarding this matter” by which

time letters of 16, 17, 18 and 19 September had been sent (Evidence, SD #8). It was

informed in an email of 21 September that all correspondence intended for the council

would continue being sent despite the refusal to communicate further.

147. The council’s failure to act on the supplied information meant it continued unlawfully

applying costs and so a sum of £70 was added to my outstanding liability in respect of

court (summons) costs. Further consequences being that the application for a liability

32

order was made when proceedings should have halted owing to the aggregate of the

outstanding debt and reasonably incurred costs being paid to NELC.

148. The error was compounded because of the council’s failure to make contact after the

head of revenues was informed of the payment and request to be notified in advance of

the hearing date if the application would be proceeded (Evidence, SD #8 letter 17

October 2012).

149. Since erroneously obtaining the liability order, NELC has had the opportunity to apply

to the Magistrates’ court to have it quashed but not done so. I have twice formally asked

for the council to do this but it has refused on both occasions.

Summarising how there was no justification to claim £70 Summons costs

Bad debt

150. It is evident from the council’s expenditure breakdown that the standard sum recharged

to Taxpayers in respect of summons costs (£70) include an element of bad debt brought

about by defendants, who for example, may have no means to pay. Those debtors are

then being subsidised by those from whom payment is more easily recovered.

151. This is confirmed in the calculation (See Annex B to SD #4) where it determines the

average individual costs by dividing its gross expenditure by an “estimated number of

summons requested where costs applied”. There is a significant difference between the

number of summons requested, and the number of summons requested where costs are

applied. The dividing figure used in the Council's 2013/14 calculation was 10,000, but

the figure submitted to CIPFA relating to the number of summonses issued in 2013/14

was 17,197.

152. The reason for the difference does not really matter, nor is it of any consequence that the

authority has not recovered its costs (from the defendant summonsed) in 7,197 cases.

However, the matter that is of concern is that NELC has incurred costs in respect of

each one requested, which in over 7,000 cases it has been unable to recover from the

defendant summonsed. Instead it has added that expenditure to the costs of those against

whom court proceedings are brought and the costs paid. It is obvious that the defendants

actually paying the costs are paying an inflated sum to either compensate for the

councils error of judgement or subsidise the costs of those others having them waived.

Council Tax Admin and Recovery Staff expenditure included in standard costs

153. Standard costs include a broad average of expenditure, so all include an element of staff

time attributable to customer contact, for example, setting up payment arrangements,

dealing with queries etc., plus additional work being necessary to monitor those plans.

154. They make up a significant proportion of the standard costs and those costs are incurred

by all individuals served a summons, regardless of whether in those cases there was

need to correspond with the council. This is confirmed in the calculation (See Annex B

33

to SD #4) under the heading, ‘Council Tax activity levels’. The proportion of the gross

expenditure for the Council Tax budget which it attributes to the summons costs is

determined on the basis of the number of telephone calls which are handled.

The claimed cost above were not incurred by the authority

155. Payment was made on the same day that the summons was served without any

involvement of any employee so all staff costs, which make up the majority of the

standard £70 were not incurred by the council in respect of my summons.

156. In the case relevant to this complaint the summons was issued automatically as a result

of agreed parameters set in the authority’s Council Tax processing system relating to the

number of days behind and the monetary value etc. The only obvious costs for this

include the Magistrates court fee of £3, and postage & stationary.

157. It is reasonable to assert therefore that the amount of cost incurred by the council in

respect of instituting the summons could not have reasonably been a sum exceeding £6.

The amount tendered and paid was £10 in respect of this and therefore more than

covered the expenditure reasonably incurred by the council. However, NELC proceeded

to apply to the Magistrates’ court for a liability order, disregarding the Regulations

which provide that if, after the summons has been issued, the outstanding balance and

an amount equal to reasonable costs incurred is paid or tendered to the authority, the

application shall not be proceeded with.

158. Notwithstanding that the law makes no provision for the majority of the standard £70

claimed as court costs by NELC through the court in liability order applications, the

majority of those unlawfully claimed were not incurred by NELC in respect of the

summons I was served on 17.10.12.

159. It is open to those against whom the council proceeds, to challenge the application in

their individual case to ensure each defendant is treated with due regard for the law.

Where representation is made about the costs charged (as was the case in this matter),

those cases would require individually assessing to ensure that the amount claimed is no

more than that reasonably incurred by the authority in those individual cases. NELC are

not in agreement with this, however, the matter has been detailed earlier (see §§43–49)

and is evident that the council is mistaken.

160. There is evidence in NELC’s own costs calculation (summarised above) which proves

beyond reasonable doubt that the £70 claimed was far in excess of the expenditure it had

incurred in respect of instituting the summons served on 17.10.12.

How has this affected you?

161. The error has caused the inconvenience of having to research various Acts of

parliament, Statutory Instruments and Civil/Criminal Procedure Rules, in order to

pursue proceedings in the high court.

34

162. Hundreds of hours spent have included preparing papers for the appeal bundle. The

Grounds of Appeal (See SD #22) and Consent Order (See SD #23) are two documents

in draft form that have required an inordinate amount of time to produce. This work has

been wasted because the justices involved in the case are perverting the course of

justice. Although the Ministry of Justice’s misconduct can not be pinned on NELC,

were it not for the initial error and subsequent refusal to put this right, I would not have

had two years being put to this trouble.

163. The high court proceedings (case stated and judicial review) are not the only

proceedings I’ve embarked upon. These have been accompanied by time consuming

attempts to obtain crucial material for the appeal by using Freedom of Information laws.

164. Initially, NELC refused to supply the expenditure it incurred in issuing a summons on

the basis that it didn’t hold the information. This in the first instance was appealed and

subsequently a complaint made to the Information Commissioner. The commissioner

sided with NELC and my complaint not upheld. An appeal to the Information Rights

Tribunal was similarly unsuccessful concluding with the judge eventually dismissing the

appeal in favour of the Commissioner’s decision.

What do you think the body should do to put things right?

165. There is no one thing that I believe NELC should do to put things right. However, the

variety of suggestions I’m proposing, is potential cause for the Ombudsman to make a

decision not to investigate based on the outcome I’m hoping for being unachievable.

166. For this reason I will nominate the main objective of this complaint which is for NELC

to request under regulation 36A of the regulations that the Magistrates court quashes the

Liability Order which was made against me in respect of the unreasonable element of its

standard costs which it applies in respect of instituting the Council Tax summons.

167. As it is unlikely these failings are unique to NELC, it would mitigate the sense of

aggrievement in respect of the inordinate amount of time that has been wasted, if

lessons learned from this complaint are also learned by all local authorities and other

government departments which similarly cause hardship for members of the public.

Considering the destructive effect such failings can have on people’s lives (including

health), there would be merit in debating in parliament the difficulties members of the

public face dealing with public bodies (see below para 171).

168. The outcome is not one that is solely seeking to resolve the issues. It is also reasonable

that an offer is made for compensation. However, any consolatory payment, whatever

level will go nowhere near a realistic sum to compensate for the hundreds of hours spent

as a consequence of these circumstances over a period which is approaching three years.

169. On account of the considerable amount of time I have put into addressing these concerns

voluntarily, it is reasonable to ask that I’m updated regularly with any details of

35

improvements or new policies which are put into place as a consequence of highlighting

the negligence and error.

170. Ideally a role would be created so that every local authority has an accountable person

to ensure matters like these are never allowed to remain unresolved indefinitely. That

person would be responsible for ensuring taxpayers affected are not left spending

considerable amounts of their life battling to no end. If such a role does in fact exist

within local government, then that person in respect of NELC should be held to account

and appropriate action taken against him.

171. In order that the Government is seen to be serious about reforming mismanagement in

councils (and HM Court Service), it would be appropriate for parliament to consider

enacting new or amending existing legislation so that matters as serious as these are

punishable with a custodial sentence. Where an individual faces the prospects of being

given a criminal record and consequently having this go against them when seeking

other employment, the introduction of custodial sentences would likely be an effective

deterrent against improper conduct.

172. A threat of a criminal record would also likely focus minds that the relatively small

matter of admitting and remedying errors, the gross injustice and inconvenience caused

an aggrieved taxpayer is an unacceptable trade off to cover up mismanagement and the

possibility of an upheld complaint adversely affecting performance targets and position

in regional league tables.

173. The threat of a criminal record could also be what is needed for a would-be offender to

think twice about subjecting an aggrieved taxpayer to the gross injustice and

inconvenience and fully appreciate that the relatively small matter of admitting and

remedying errors, the gross injustice and inconvenience caused an aggrieved taxpayer is

an unacceptable trade off to cover up mismanagement and the possibility of an upheld

complaint adversely affecting performance targets and position in regional league

tables.

174. The way in which NELC investigates its formal complaints is clearly in a manner which

best interests itself. It goes without saying that for residents taking the trouble to raise

concerns to be duped like this amounts to out and out corruption. It would therefore

benefit residents of North East Lincolnshire if an independent body were to oversee the

complaints process, ensuring the investigation is conducted impartially. The current

arrangement serves no purpose other than for officers engaged in the process to cover up

failings for their colleagues.

175. It is feasible there has been deliberate intent to cause gross inconvenience. If it is found

that an officer has used their public role to indulge in their own personal perverse

gratification, the police should be forwarded details to consider the prospects of a

criminal prosecution.

Dated this 29th

day of October 2015

Signed:

The Defendant