1. Liability orders are made against ratepayers who are found to have failed to pay due national non-domestic rates (‘NNDR’ or ‘Business Rates’ or simply ‘non-domestic council tax’). The liability order is an enforceable judgment and the sums involved are usually quite substantial.
2. Where liability orders are made in the ratepayer’s absence, or without him even being aware that a Court process was underway against him, the ratepayer can apply to bring the matter back before the Magistrates’ Court justices, with a view to the justices making an order setting the liability orders aside. Whether the justices will accede to that application depends on whether the circumstances justify it.
3. This article will explore those circumstances, and the conditions that need to be fulfilled before a Magistrates Court will set aside a Business Rates liability order. In the interests of brevity, I shall use the label ‘ratepayer’ for the applicant/defendant to the Billing Authority's main complaint, though in most cases he will be disputing that he is the ratepayer (mandatory relief ratepayers being the exception).
4. Those reading this article because they have become aware that a liability order may have been made against them, should note that in such circumstances, the law expects them to act swiftly; to be within time, they must normally make their application to set aside the liability order ‘within days or at most a very few weeks, not months, and certainly not as much as a year'. Engaging in lengthy correspondence with the Billing Authority will not excuse delay in issuing the application to set aside.
Proceedings for a Liability Order.
5. To put the application to set aside the liability order in context, it is helpful to consider the process by which a liability order is obtained.
6. Typically, the ratepayer will receive a demand notice, then a final reminder, before formal proceedings begin. Formal proceedings are initiated by the Billing Authority (i.e. the local authority) applying to the local Magistrates Court, by way of a ‘Complaint’. The Magistrates Court will respond to the Complaint, by issuing a summons against the person named in the Complaint, requiring that person to attend the Magistrates Court to explain why the sum has not been paid. Overviews of the system were given in Chowdbury v Westminster City Council  EWHC 1921 ('Chowdbury') and North Somerset DC v Honda Motor Europe Ltd  EWHC 1505 ('Honda')[3a]
7. Where this process runs as it should, the ratepayer will receive the Summons at least 14 days before the first hearing is due to take place, the ratepayer can then attend and begin actively participating in the Court procedure, firstly, by setting out his resistance to the liability order being made against him, secondly, complying with any directions[3b] given at the hearing, and then thirdly, attending the final trial on the contested issues[4a].
Form of Application to set aside the liability order
8. The process of commencing an application (sometimes called a ‘request’) for an order setting aside the liability orders is relatively informal. There is no prescribed form to fill in to make the application. Indeed a letter addressed to the Clerk to the Magistrates’ Court will be sufficient. However, the letter must be clear that it is an application under the Court’s exceptional jurisdiction to set aside the liability order (see R (Sangha) v Stratford Magistrates' Court  EWHC 2979 (Admin), paragraphs 37 and 12) and should set out how the 3 conditions (identified below) are satisfied. The letter should at least do this in outline form, since this is akin to an ‘issue of process’ document, and so should contain the main thrust of the grounds upon which the application is made.
The Governing Law
9. The governing law is common law based, rather than statutory. Neither s142 of the Magistrates’ Court Act 1980 nor the CPR (in particular, CPR r.13 and r.39.3[4b]) apply. That law requires that liability orders should not be set aside unless 3 ‘conditions’ are established. These 3 Conditions were set down in the leading authority is R (Brighton and Hove City Council) v Brighton and Hove Justices  EWHC 1800 (Admin) (‘Hamdan’), at paragraph 31 of the judgment:
‘31. It is important to take into account that the jurisdiction …held to exist cannot be exercised simply because the defendant disputes his liability to pay the NNDR in question. That there is a genuine and arguable dispute as to that liability is a necessary condition for a decision by justices to set aside a liability order, but it is not a sufficient condition. The power of a magistrates' court to set aside a liability order it has made is an exceptional one, to be exercised cautiously. In my judgment, in general a magistrates' court should not set aside a liability order unless it is satisfied, in addition to there being a genuine and arguable dispute as to the defendant's liability for the rates in question, that:
(a) the order was made as a result of a substantial procedural error, defect or mishap; and
(b) the application to the justices for the order to be set aside is made promptly after the defendant learns that it has been made or has notice that an order may have been made.’
10. These 3 Conditions[6a] can be summarised as:
a. Condition 1: A ‘genuine and arguable dispute as to the defendant's liability for the rates in question’ (‘Genuine and Arguable dispute’)
b. Condition 2: ‘Substantial procedural error, defect or mishap’ results in the order (‘Procedural mishap’);
c. Condition 3: Prompt application ‘after the defendant learns that it has been made or has notice that an order may have been made.’(‘Prompt application’)
11. Each of these 3 Conditions must be established. They are cumulative. To put it another way, the application to set aside will fail if one (or more) of these stages can not be established[6b]. Furthermore, the burden of establishing each of these conditions lies upon the Applicant ratepayer.
12. As will be apparent, the test is more prescriptive than simply asking whether it would be reasonable and in the interests of justice to set aside the liability orders (see paragraph 37 of Hamdan).
Condition 1: Genuine and arguable dispute.
13. For Condition 1, the Court asks itself whether, on the balance of probabilities, there is at least a ‘genuine and arguable dispute’ as to the ratepayer’s liability to pay the Business Rates which founded the liability orders. This is a merits based test; it requires the Court to consider the substantive arguments put forward by the ratepayer as to why he is not liable to pay the relevant Business Rates.
14. The threshold set is fairly low. The ratepayer is not required to establish, at this preliminary stage, that at a trial he will establish on the balance of probabilities, that he is not liable (at all or for some of it); the ratepayer merely has to establish at this stage, that he has at least a genuine and arguable case that he is not liable.
15. Where the ratepayer alleges he has been wrongly identified as the party liable, he is not required to demonstrate who is in fact liable, merely that there is a genuine and arguable dispute that he is not liable. However, it naturally bolsters the ratepayer’s position to be able to produce evidence as to who is the true ratepayer. The credibility, plausibility and strength of the ratepayer’s arguments will be assessed.
16. The genuine and arguable dispute may centre around a variety of potential issues. One issue might be as to who is in rateable occupation, another might be entitlement to exemptions/Business Rates relief (for instance, mandatory relief for a charity).
Who is liable for Business Rates?
17. Liability for Business Rates is principally governed by two distinct sections in the Local Government Finance Act 1988, Part III Non-Domestic Rating, namely, s43 entitled ‘Occupied hereditaments: liability’ and s45 entitled ‘Unoccupied hereditaments: liability’, though each is the principal provision in a set of sections (set 1 being sections 43, 44 and 44A, and set 2 being sections 45, 45A, 46 and 46A) and readers should note that sections are due to be amended shortly.
18. The main part of s45, applying to unoccupied hereditaments, reads:
‘(1) A person (the ratepayer) shall as regards a hereditament be subject to a non-domestic rate in respect of a chargeable financial year if the following conditions are fulfilled in respect of any day in the year—
(a) on the day none of the hereditament is occupied,
(b) on the day the ratepayer is the owner of the whole of the hereditament,
(c) the hereditament is shown for the day in a local non-domestic rating list in force for the year, and
(d) on the day the hereditament falls within a class prescribed by the Secretary of State by regulations.’
19. A discussion about these 4 conditions would fill an article on its own. Only two points will be noted here:
 Condition (b) to s45 (1) refers to the ‘owner’ and s65(1) of Local Government Finance Act 1988 states: 'The owner of a hereditament or land is the person entitled to possession of it.’ Outside the area of tax mitigation schemes, this will typically be the legal title holder of the absolute interest (i.e. the freehold or leasehold interest) which does not have any immediate (as distinct from reversionary) derivative absolute interests carved out of it. In Brown v City of London Corp  1 WLR 1070 ('Brown'), a case about receivers, Arden J stated, at 1082-1083:
'...a person is entitled to possession for the purposes of section 65(1) of the Act of 1988 only if he is immediately entitled to possession. It is not enough that a person has a right which if exercised would result in his having possession.'
Arden J, at 1083, stated that she accepted certain of counsel's submissons ('In the result, on Issue 1, I accept Miss Gloster's submissions 1(ii), (iii), 2, 3, 5, and 6.'), these included:
'(ii) The definition of “owner” in section 65(1) of the Act of 1988 refers to “the person entitled to possession” of the hereditament and this requires one to identify the person who has the immediate legal right to actual physical possession, albeit that such person ex hypothesi will not be in actual physical occupation of the property. In contrast with the word “occupation,” the word “possession” conveys the notion of exclusive entitlement to occupy'
'“It is a general principle of rating law that where an agent is required to occupy a hereditament in order to secure the better performance of his duties as agent, his occupation is for rating purposes ordinarily treated as that of his principal:” per Slade L.J. in the Ratford case  Q.B. 357, 371G"...'
'One has to identify who, at the relevant time, had the immediate entitlement to possession; i.e. the immediate legal right to possession. It is not relevant to inquire who, if they exercised a particular right or power, would have such entitlement, in circumstances where they have not yet done so.'.
Where the hereditament is subject to a tax mitigation scheme, who is 'entitled to possession of' the hereditament is more nuanced, taking into account the intention of Parliament behind the legislation. The recent Supreme Court case of Hurstwood Properties (A) Ltd v Rossendale BC[ 2021] UKSC 16, which overturned Rossendale in the Court of Appeal, decided that, who is the 'owner' turns more on: who, in reality, has control/the ability to bring the property back into use. A special purpose vehicle (SPV) leaseholder might not be 'entitled to possession' of the hereditament within the meaning of s.65, despite the existence of the lease (which is not a sham) bestowing on the SPV a property right having attached to it an immediate right to possession. It might actually be the lessor which is 'entitled to possession' of the hereditament (see an article, written by this author, entitled 'Business Rates - 'Owner' of Unoccupied Properties')
S65 continues: ‘(3) Subsections (1) and (2) above shall have effect subject to [the following provisions of this section]’. Readers will need to consider whether s65 (5) to (8A) applies to their case[9a].
 Condition (d) is governed by Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 (SI 2008/386) (England only), see in particular reg.4.
20. The main part of section 43, applying to occupied hereditaments, reads:
‘1. A person (the ratepayer) shall as regards a hereditament be subject to a non domestic rate in respect of a chargeable financial year if the following conditions are fulfilled in respect of any day in the year –
(a) on the day the ratepayer is in occupation of all or part of the hereditament, and (b) the hereditament is shown for the day in a local non-domestic rating list in force for the year.’
Explaining this provision, Aikens LJ in Chowdbury v Westminster City Council  EWHC 1921 (‘Chowdbury') said at paragraph 6:
’Under section 43 of the Local Government Finance Act 1988, a person called “the ratepayer” is liable to pay non-domestic rates as regards a “hereditament” in respect of any day of the year if (a) on the day the ratepayer is in occupation [of] all or part of the hereditament; and (b) the hereditament is shown for the day in a local non-domestic rating list in force for the year.’
21. S65 of Local Government Finance Act 1988 reads:
‘(2) Whether a hereditament or land is occupied, and who is the occupier, shall be determined by reference to the rules which would have applied for the purposes of the 1967 Act had this Act not been passed (ignoring any express statutory rules such as those in section 24 and 46A of that Act).’
This is subject to s65(3).
22. This was recently reaffirmed by the Supreme Court in Cardtronics UK Ltd v Sykes (Valuation Officers)  UKSC 21;  1 WLR 2184, paragraph 13 (noted in Hurstwood Properties (A) Ltd v Rossendale BC  UKSC 16, paragraph 21, who said that 'The question whether property is occupied and, if so, who is the occupier for rating purposes is still largely governed by the common law rules: see section 65(2) of the 1988 Act').
23. Complex issues can arise around whether and/or who (whether natural person or legal person) was in ‘rateable occupation’ of the property within the hereditament, on a particular day (or over a certain period). In R. (on the application of Secretary of State for Health and Social Care (on behalf of Public Health England)) v Harlow DC  4 WLR 65 ('Harlow'), Kerr J said, at paragraph 3:
'The conventional starting point for determining whether premises are occupied for rating purposes is to apply the four tests derived from Tucker LJ's judgment in Laing (John) & Son Ltd v Kingswood Assessment Committee  1 KB 344, 350:
‘First, there must be actual occupation; secondly, that it must be exclusive for the particular purposes of the possessor; thirdly, that the possession must be of some value or benefit to the possessor; and, fourthly, the possession must not be for too transient a period.’[9b]
If any one of the four essential ingredients is missing/test unsatisfied, then the occupier cannot be in rateable occupation. Whether a certain person(s) (natural or legal) was in rateable occupation is a question of fact.
24. Before considering the meaning of ‘occupation in more detail, it should be noted that if the hereditament is: (1) part occupied, part unoccupied; or (2) part occupied, part occupied separately by others, then see Atos IT Services Ltd v Fylde BC  EWHC 647 (QB) and Mr Stephen Morris QC sitting as a Deputy High Court Judge in The Queen on the Application of Tallington Lake Limited v Grantham Magistrates Court  EWHC 3403 (Admin)('Tallington Lake') paragraph 19 - Ryde on Rates quotation. Note s.44A. See also an article, written by this author, entitled 'Business Rates - Occupied Hereditament without Exclusive Occupier'.
25. Returning to ‘occupation’ as a concept, in R v Assessment Committee of St Pancras  2 QB 581, Lush J said:
‘It is not easy to give an accurate and exhaustive definition of the word ‘occupier’. Occupation includes possession as its primary element, but it also includes something more. Legal possession does not of itself constitute an occupation. The owner of a vacant house is in possession, and may maintain trespass against any one who invades it, but as long as he leaves it vacant, he is not rateable for it as an occupier. If, however, he furnishes it, and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may not reside in it one day in a year… On the other hand, a person who, without having any title, takes actual possession of a house or piece of land, whether by leave of the owner or against his will, is the occupier of it. Another element, however, besides actual possession of the land, is necessary to constitute the kind of occupation which the Act contemplates, and that is permanence.’
26. In Laing, the Court referred to Westminster Council v. The Southern Ry. Co. and W. H. Smith Son, Ld. and Others  AC 511 ('Westminster Council'), quoting Lord Russell at 529 (the case relating to Victoria Station):
‘Occupation, however, is not synonymous with legal possession: the owner of an empty house has the legal possession, but he is not in rateable occupation. Rateable occupation, however, must include actual possession, and it must have some degree of permanence: a mere temporary holding of land will not constitute rateable occupation.’
27a. Where there is only one contender for rateable occupier, the position is more straightforward. But, a rateable ‘occupier’ can be more than one person (natural or legal) – if there is more than one, and their legal right of occupation is a joint right - they are joint rateable occupiers (or joint rateable occupants, if you will). However, the situation is more complicated where there are separate, independent contenders for the position of rateable occupier (that is, rival contenders, or sometimes called ‘rival claimants’). Firstly, there can be only one rateable occupier. Excluding joint rateable occupiers, this means there can be only one person (natural or legal) who is the rateable occupier; Lord Diplock in Commissioner of Valuation for Northern Ireland v. Fermanagh Protestant Board of Education  1 W.L.R. 1708, said at 1728:
‘Under the Northern Irish legislation, as under the English, the liability to pay rates is imposed on the occupier. Parliament cannot have intended to impose separate and independent liabilities to pay the rates for the same hereditament on more than one person except where their legal right of occupation is a joint right, as in the case of joint tenants. In English law, therefore, although there may be a joint occupation of a single hereditament there cannot be rateable occupation by more than one occupier whose use of the premises is made under separate and several legal (or equitable) rights.’
See also, paragraph 71 of Rossendale. In Re Briant Colour Printing  1 WLR 942 ('Briant'), Buckley LJ said, at 952-953:
‘There cannot, I think, be two occupiers for rating purposes at one time of one hereditament.’
27b. Secondly, where there are rival claimants to the rateable occupancy, only the paramount occupier, and not the subordinate occupier, is in rateable occupation. Lord Russell at 529 in Westminster Council said:
‘Where there is no rival claimant to the occupancy, no difficulty can arise; but in certain cases there may be a rival occupancy in some person who, to some extent, may have occupancy rights over the premises. The question in every such case must be one of fact - namely, whose position in relation to occupation is paramount, and whose position in relation to occupation is subordinate; but, in my opinion, the question must be considered and answered in regard to the position and rights of the parties in respect of the premises in question, and in regard to the purpose of the occupation of those premises.'
See Honda, Burnett J for a recent case involving paramount occupier/subordinary occupier.
28a. Thirdly, the subordinate occupier is not in rateable occupation because the existence of the paramount occupier negates an essential ingredient in any claim that the subordinate occupier is in rateable occupation, namely that of: exclusive possession. As Eveleigh LJ said in Routhan v Arun  Q.B. 502 ('Routhan'), at 513:
‘In such cases, where it is shown that one person's occupancy is paramount, he is the occupier for the purposes of the Act. The existence of a paramount obligation (sic) shows that the condition of exclusiveness does not exist in the other’
28b. Lord Russell in Westminster Council, said, at 10:
‘In truth the effect of the alleged control upon the question of rateable occupation must depend upon the facts in every case; and in my opinion in each case the degree of the control must be examined, and the examination must be directed to the extent to which its exercise would interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them, or would be inconsistent with his enjoyment of them to the substantial exclusion of all other persons.’
28c. In Briant, Buckley LJ summarised the position, at 952-953:
'Both the fact of occupation and the identity of the occupier are questions of fact, to be answered on the evidence and the circumstances of the particular case. There cannot, I think, be two occupiers for rating purposes at one time of one hereditament. If a state of affairs arises in which two persons are in occupation of what is listed as one hereditament for rating purposes, each entitled to exclusive use for a particular purpose, the list must be amended to show two hereditaments in order to enable the rating authority to assess both occupiers. But if there are two persons, each of whom makes some use of an immovable property concurrently, there may either be two co-existing hereditaments, the occupier of each one of which may be rateable; or there may be two concurrent uses of one hereditament, in which event it may be necessary to discover which of them has the paramount position so as to be rateable as the occupier.'
29a. In determining who is in rateable occupation, a factor which may be looked at is - who has title to that land. But there is no presumption in law (as distinct from a 'presumption of fact') that the owner is also the occupied.
29b. Lord Denning MR in Routhan, said at 508, that:
'The title to the land is irrelevant save where the fact of occupation is ambiguous. Then the title may be looked at so as to determine who is the occupier.’
29c. In Briant, Buckley LJ said, page 952:
‘…where all that is known about a hereditament is that it is in use — that is to say, that it is in some kind of occupation — then, in the absence of countervailing evidence, the natural inference on the balance of probabilities is that it is the owner who is using it.’
Later Buckley LJ in Briant rejected the proposition that, where premises are occupied, there is a presumption that the owner is the occupier, saying at 960 that:
'…in my view no such presumption exists, unless it be purely a presumption of fact, that is to say, an inference which can be drawn from the fact that the owner is the owner of the property, when there is nothing to indicate that he is not the person in occupation of it: but that is merely a circumstance which has to be taken into account in conjunction with all the other relevant circumstances of the case, and the question who is in occupation has to be answered as a question of fact in the light of all those relevant circumstances.'
29d. In Queen Street Properties Ltd v Cardiff City and Council Council  EWHC 39 (Admin), Eyre J considered this issue, and said, at paragraph 32:
'Actual occupation is different from ownership and from the legal right to possession of particular premises. It follows that there is no presumption of law that the owner is the rateable occupier of occupied premises in the absence of other explanation. That is the consequence of the passage from Buckley LJ’s judgment in Southwark LBC v Briant Colour Printing Co Ltd...Nonetheless the fact that premises are occupied; that a particular person is the owner and so entitled to possession; and the absence of evidence of an occupier other than the owner are potentially relevant circumstances. In an appropriate case the court is entitled to infer from those matters that the owner is in actual occupation for the purposes of liability to rates. The circumstances of each case must be considered but in an appropriate case such an inference can arise naturally or as a prima facie explanation of the circumstances.'[11a]
30. Returning to joint rateable occupation, and how each of the joint rateable occupiers are liable,Tallington Lake, the deputy High Court Judge said at paragraph 19:'...the issue of whose occupation is paramount and whose is subordinate arises where there are rival claimants to occupancy. This does not arise where occupancy is strictly joint. It is clearly established that there may be two or more occupants of one particular hereditament and that each is jointly and severally liable for the rates. An example would be occupancy by a partnership.'
Tallington Lake applied this to a group of companies, individually and separately occupying parts of one hereditament. See Dias v London Borough of Havering  EWHC 172 (Ch), paragraph 27.
Condition 2: Substantial procedural error, defect or mishap
31. There are two distinct parts to this Condition:
a. There was substantial procedural error, defect or mishap; and
b. That procedural error, defect or mishap resulted in the liability order made.
32. Some general guidance on this was set down in Hamdan, paragraph 32:
‘In most cases, it must be shown that the liability order was unlawful or made in excess of jurisdiction or in ignorance of a significant fact concerning their procedure (such as an application for an adjournment) of which the justices should have been aware.'
33. A procedural mishap, satisfying this Condition does not need to involve some fault being attributed to the Court or the local authority. Maurice Kay J in Liverpool City Council v Pleroma Distribution Ltd  EWHC 2467 (Admin) (‘Pleroma’), gave the example of a traffic accident that, unknown to the magistrates' court, prevents the defendant from attending at the hearing.
34. A failure by the ratepayer to attend Court, when he knows that there will be a hearing, will not amount to a procedural mishap. As stated in Hamdan, paragraph 32:
‘…a failure of the defendant to attend the hearing because he assumes, without good reason, that the local authority will not seek an order, or because he is absent abroad, will not of itself satisfy this requirement. A defendant who will be unable to attend a hearing because of his absence abroad may request an adjournment in writing, or instruct a solicitor to appear on his behalf; but if he does nothing, he is not entitled to an order of the magistrates to set aside a liability order made against him.'
Procedural Mishap in Service of the Summons
35. The service of the Summons can be fertile ground for procedural mishaps.
36. The rules on service are set out in regulation 13(2) of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989. This provides 5 separate and alternative methods by which service of a summons issued under Regulation 12(2) can be effected on a natural person or legal entity. Regulation 13(2) reads:
(2) A summons issued under regulation 12(2) may be served on a person-
(a) by delivering it to him,
(b) by leaving it at his usual or last known place of abode, or in the case of a company, at its registered office,
(c) by sending it to him at his usual or last known place of abode, or in the case of a company, to its registered office,
(d) where all or part of the sum to which it relates is payable with respect to a hereditament which is a place of business of the person, by leaving it at, or by sending it by post to him at, the place of business, or
(e) by leaving it at, or by sending it by post to him at, an address given by the person as an address at which service of the summons will be accepted
Exhaustive list of methods of service
37. The list in Regulation 13(2) is exhaustive. These 5, and no others, can be used for service. An argument in Chuckwu v Redbridge  EWHC 2683 (Ch) (‘Chuckwu’), that ‘…any other method could be used if the local authority had good reason to use another address…’ failed. At paragraph 24, Nugee J said:
‘It seems to me that Regulation 13(2) is intended to set out the possible methods of service, meaning the only possible methods of service, and that service that is not in accordance with Regulation 13(2) is not due service.’
38. When considering whether service was within a permitted method, salient issues include identifying:
a. the method of service (hand delivery, physically leaving it at the destination, sending by the postal system) selected; and
b. the selected destination for the Summons (usual or last known place of abode, registered company address, place of business, specifically provided address).
39. Each limb will be considered in turn. Limb (b) and (c) can be read together. They differ only in respect to the method of service, ‘leaving it at’ for limb (b), while in contradistinction, Limb (c) prescribes ‘sending it to’. These phrases are common for methods of service[11b].
Limb (a) delivering it to him
40. In Chuckwu, Nugee J said at paragraph 16 that in respect to limb (a), in the light of the other paragraphs, it must mean ‘by delivering it to him personally.’ Delivering it to a person personally, encompasses handing the Summons personally into the physical possession of the intended recipient. Typically this will be by a process server. Beyond this, it appears that delivery may be effected by handing the Summons to a person other than the intended recipient (a spouse for instance; the postal service cannot count), who promises to pass it on to the intended recipient and the evidence shows that they did in fact pass it on as promised. this finding can be made even where the intended recipient claims he has not received it: see Morecambe and Heysham Corp v. Warwick (1958) 56 L.G.R.
Limb (b) leaving it at his usual or last known place of abode, or registered office
41. ‘leaving it at’ means putting the document physically into the destination address while at the destination address.
42. Parallels can be drawn with a similar set of methods of service in s233 of the Local Government Act 1972. Within s233, service is permitted by ‘delivering it to him, or by leaving it at his proper address’. The Court in Rushmoor v Reynolds  COD 315, found service had occurred within this provision, where the billing authority had used one of its own employees to visit the property itself, and whilst there, the employee pushed the notice through the letter box at the property. Service was found to come within this provision in Lambeth LBC v Mullings  COD 281, a case which involved a notice being inserted ‘through the respondent's letter-box.’
43. The phrase ‘usual or last known place of abode’ should be given its normal and natural meaning. Analogies can be made with similar phraseology in the CPR. CPR r.6.9 uses the language of ‘usual or last known residence’ and ‘usual and last known address’:
a. For ‘usual’, the Court of Appeal in Relfo Ltd (In Liquidation) v Varsani  EWCA Civ 560 said the critical determinant is of the addressee’s pattern of life, rejecting that the test merely required a comparision between periods of occupation - account should be taken of the nature or quality of occupation (for instance, as a family home). The first instance decision had talked of a notion of regularity about it but not necessarily comparative intensity of use.
b. For ‘last known’, the first instance decision in Relfo Ltd (In Liquidation) v Varsani  EWHC 2297 (Ch) said that a person who had more than one residence could have more than one ‘last known’ residence (presumably any single person can only have one last known address for that person).
44. A ‘place of abode’ seems largely synonymous to ‘residence’.
45. A company has a registered address, and this is available and published on Companies House website.
Limb (c) by sending it to him at his usual or last known place of abode, or registered office
46. This method of service is identical to limb (b) save for the substitution of ‘Sending it to’ in place of ‘leaving it at’. ‘Sending it to’ means sending it by the postal system.
Limb (d) by leaving it at, or by sending it by post to him at, the place of business
47. The Divisional Court in Chowdhury considered the correct construction of Limb (d); Aikens LJ said:
'29….In my judgment, the correct construction of that provision is as follows: for there to be proper service of the summons in such a case, first of all, all or a part of the sum to which the summons relates must be payable in respect of “a hereditament” which is also “a place of business” of the person sought to be served with the summons.
30 Secondly, the summons must be left at that place of business ie at that hereditament, or the summons must be sent by post to the person sought to be served at that place of business ie that hereditament. In the present case there is, it would appear, no doubt that the letter containing the summons was posted to the appellant at the address of the premises, viz the hereditament. The only question is whether that hereditament was at the relevant time “a place of business” of this appellant.’
48. In Chuckwu, Nugee J at paragraph 15 summarized it as:
‘(d) which does enable a summons to be served at a person's place of business, only permits service at the place of business which is where all or part of the summons to which the summons relates is payable with respect to a hereditament which is that place of business.'
49. In Chowdhury, the relevant business of the ratepayer was that of a landlord – the subject premises were sublet on a succession of short-term leases. The Divisional Court found that the premises was not, by that fact alone, ‘a place of business’ of the landlord. However the Divisional Court left open the question of whether, if rent is collected at that premises, that premises then qualifies as ‘a place’ of business of the landlord (paragraph 31).
Limb (e) An address given by the person as an address at which service of the summons will be accepted
50. Service by this limb is only available: (a) where an address has been given by the ratepayer; and (b) that address was given expressly as an address at which a particular type of communication can be sent, namely a Summons.
51. An address which is given for any other purpose, is not an address which is given as an address at which a Summons will be accepted. An address given for general and/or formal communications or correspondence will not qualify. The CPR adopts a similarly strict approach in respect to the provision of addresses. CPR r.6.8 (a) says that service is good service at an address ‘…which the defendant has given for the purpose of being served with the proceedings’.
The effect of the Summons not being served properly
52. In Chowdhury, the Divisional Court said at paragraph 28:
‘In my judgment, it is unnecessary, and probably also unwise, for this court to try and define the extent of the justices' jurisdiction to set aside liability orders. In this case there is a much narrower point to decide, that is, effectively, whether the liability order challenged was ever properly made at all. It seems to me that if the summons was not properly served then the justices would have had no jurisdiction to make the liability order under Regulation 12(2).
53. It continued later, at paragraph 32:
‘…It seems to me that if the summons was not properly served in accordance with Regulation 12(2)(d) then the justices had no jurisdiction to make the liability order at all.'
54. This is because the Regulations make the service of the summons within one of the 5 prescribed methods, a prerequisite to obtaining a liability order. This is derived from Regulation 13(2A), which stipulates that no liability order ‘shall be made’ pursuant to a summons issued under Regulation 12(2) ‘unless fourteen days have elapsed since the day on which the summons was served’. If no summons has been properly served, then 14 days cannot have elapsed and so the bar on making a liability order cannot have been lifted (see Chowdbury paragraph 10 and 18).
55. Contrary to what may first appear, the mere fact that the justices lacked jurisdiction to make the liability order, does not mean that the liability order is null and void, or fatally irregular. The liability order remains valid. The lack of jurisdiction only establishes Condition 2. The Hamdan 3 Condition test remains applicable and Condition 1 and 3 must still be established before the liability order will be set aside. This is made clear in the following passage of Chowdhury, paragraph 32:
‘Subject to a possible argument on whether the appellant has lost his right to have the liability order set aside because he had not applied sufficiently promptly, which is not the subject of the Case Stated…then if the summons was not properly served, it seems to me that the justices not only have the power to set the liability order aside but they must do so. That it because it is accepted for present purposes that there is a genuine and arguable dispute as to the appellant's liability and the order would have been made as a result of a substantial procedural error.’
56. The liability orders were not set aside in Chuckwu, as although the summons were found not to have been properly served, and so Condition 2 established, there was no genuine and arguable dispute and the ratepayer had not acted promptly. The Court saw force in the argument at paragraph 25 that:
‘…to set aside the liability order for a failure to serve the summons properly in circumstances where there is neither a genuine and arguable dispute as to liability on the facts before the justices, nor a prompt application to set aside would simply lead to a duplication of costs and the proceedings having to start again to the benefit of nobody.’
Justices lacking knowledge when making Liability Order – Ratepayer unaware
57. The non-receipt of the summons by the ratepayer appears to amount to a procedural mishap.
58. In R (on the application of Jones) v Justice of the Peace  EWHC 2740 (Admin) (‘Jones’), a council tax case, Foskett J said, after listing the 3 stage test set out above, in paragraph 4:
‘…In relation to the second of those matters, Stanley Burnton J emphasised that the procedural mishap may not be the fault of the court or of the local authority. In my judgment, it is broad enough to embrace the situation where the court, in ignorance of the fact that the party against whom the liability notice is sought is himself unaware of the application for such a notice, grants the application for the notice.’
59. The language may be easier understood if ‘notice’ is understood as meaning 'order' in the above passage.
60. Whether the ratepayer was unaware of the proceedings, or not, will be a question of fact for the Court to make a finding on. The Court will not know of the ratepayer’s lack of awareness when it made the liability order, just that the ratepayer was not at Court, so any liability order will be made by the Court in ignorance of that fact.
61. An observation can be made that this construction is rather at odds with the typical purpose of service. Usually, once a method of service is proved to have been used, an irrebuttably[13a] presumption arises that the served document was received by the intended recipient. This difficulty was raised and considered in The Queen on the Application of London Borough of Newham v Stratford Magistrates Court v Selwyn Dublin  EWHC 125 (Admin) (‘Newham’). There the Court took the view that the rules of service of the summons created a least a presumption that the summons will thereby have been received by the intended recipient. However, because non-receipt of the summons, if found as a fact, could not logically be distinguished from non-attendance at a hearing because of a traffic accident (which could qualify as a procedural mishap), the Court could not see why non-receipt of the notice of the hearing might not also qualify as a procedural mishap[13b]. Accordingly, where valid service is established, it is still open to the ratepayer to rebut the presumption that he thereby received the document – he can rebut the presumption by presenting evidence that he in fact did not received it.
Justices lacking knowledge when making Liability Order – Application
62. In Pleroma the justices had made a liability order in ignorance of the fact that the ratepayer’s solicitors had made a prior written request to the Court for an adjournment (only the Court clerk was aware). Upon the justices being informed of their mistake, the justices relisted the matter and set aside the liability orders. In Hamdan, this lack of awareness of the request for an adjournment was defined as a ‘substantial procedural defect’.
Procedural error, defect or mishap resulted in the liability order made
63. This is a question of cause and effect. The identified procedural mishap must have come before, rather than after, the liability order was made.
64. A Notice of Liability Order is produced after a liability order is made. Should that Notice of Liability Order contain an error, arguments can be put both ways on whether that is, or is not, a qualifying procedural error. An error arising in the recording of the liability order, can be said to arise after the liability order was made. The liability order did not arise as a result of the procedural mishap. Conversely, the error may be evidence, that prior to the liability order, an error had been made.
Condition 3: Prompt Application
65. An otherwise meritorious application to set aside a liability order can be lost if it is not made sufficiently promptly. In essence, the law requires that those made subject to a liability order, do not ‘sit on their hands’, but requires them to be proactive and make the application swiftly after they learn or gain notice that an order exists against them, or that there may be an order that exists against them.
66. Two points in time must be established in order to assess whether the application to set aside has been made promptly.
a. The date when the application to set aside is made (the ‘end date’).
b. The date when time began to run against the ratepayer (the ‘start date’).
The End date
67. This should rarely attract much controversy. The ‘end date’ is the date of the application to the Clerk of Magistrates’ Court to set aside - the date of the letter. This is the formal commencement of proceedings; nothing less than the actual formal commencement of such proceedings will be sufficient. For instance, writing to the Billing Authority complaining about and/or raising objection to the liability orders will not do. It is not enough simply to dispute or put the matter in issue with the Billing Authority.
68. The Billing Authority bears no obligation to commence set aside proceedings. Dove J in Sleekmade Property Company Ltd v Sheffield City Council  EWHC 4193 (‘Sleekmade’) stated at paragraph 30 that responsibility for commencing those proceedings ‘rests fully, fairly and squarely with the rate payer…’.
The Start date
69. The start date is the date when ‘the defendant learns that it [the order] has been made or has notice that any order may have been made’. When this actually is, is complicated and tends to lead to disputes because the moment when sufficient knowledge was gained by the ratepayer for this Condition, can be difficult to pinpoint.
70. Where there is more than one liability order, and particularly when the liability orders were made on different dates, the process of ascertain the start date, requires that the Court adopt a differentiating approach to each liability order. In other words, each liability order (or set of liability orders) must be treated separately. They should not be bundled together as if one liability order. The need for this differentiating approach was emphasised in Sleekmade, at paragraph 29:
‘…there does not appear to be any differentiated consideration of the circumstances pertaining to each of the different orders. The tests which are set out in Hamden need to be applied carefully in relation to each order that has been made. It is apparent that the District Judge dealt with all of the orders based on her contention that there had been a failure to act with urgency and diligence and a failure to communicate the change of address. She concluded that those criticisms could apply to the question of promptness, in respect of all of the orders irrespective of the dates upon which they had made, the property to which they pertained and the circumstances in which each of the orders had been granted. By contrast the test which is required by Hamden is that the application must be “made promptly after the defendant learns that it [the order] has been made or has notice that any order may have been made.”
71. The start date triggers center around knowledge of the order itself – the 2 triggers are either where the ratepayer:
a. learns that the order has been made (‘direct knowledge’); or
b. has notice that an order may have been made (‘indirect knowledge’).
72. I have labeled these two limbs, direct knowledge and indirect knowledge.
73. The law deems that upon the ratepayer gaining either start date knowledge (whether direct knowledge or indirect knowledge), the ratepayer has enough knowledge about his predicament, such that he ought to realize: (a) the seriousness of his position – that a final judgment on the Billing Authority’s claim has been made against him, or at least that there is a sufficient risk that one has been made; and (b) that only by him taking proactive steps to: (1) discover whether in fact an order has been made against him (should he not know that an order exists); and (2) bring the matter back before a subsequent Court, with reasonable expedition, can he expect a Court to consider displacing the order or orders in force against him. The rationale for time not running before this date was stated in Sleekmade - the Court said at paragraph 34:
‘To put the matter crudely they could not apply to set aside orders which they knew nothing about and which in reality they had no sensible justification to know may have been made…’
Direct Knowledge - Learns that the order has been made
74. A ratepayer can learn of the existence of the order by actually receiving a copy of the Notice of Liability Order, or being informed of its existence from a credible source (for instance).
75. Knowledge of the order can be conveyed to the ratepayer through post-liability order correspondence from the Billing Authority. The letters and/or emails from the Billing Authority need to be subject to close scrutiny to see whether the existence of liability orders was expressly conveyed.
Indirect Knowledge - Has notice that an order may have been made
76. By definition, this limb applies where the ratepayer does not know of the liability order itself. Satisfaction of this limb will arise however when the ratepayer has knowledge of certain facts, and those facts are sufficiently indicative of a liability order having been made against him, or at least, may have been made against him.
77. The Court in Hamdan gave a typical example at paragraph 33:
'A defendant who knows of the issue of a summons, and therefore should appreciate that there may have been an order made on the return day, but makes no enquiry as to whether an order has been made against him, will not in general be entitled to set aside the order simply because some time later the local authority takes further steps to enforce the order.'
78. Given that in the normal course of events, a liability order will be made on the return date (i.e. the first hearing), knowing of proceedings and that the return date has passed, will be sufficiently indicative facts to found the conclusion that an order may have been made against him on that date.
79. As with direct knowledge, indicative facts can have been conveyed to the ratepayer during correspondence with the Billing Authority. This time, correspondence exchanged both before and after the liability order can be relevant.
80. A fertile ground for argument arises with such exchanges of correspondence; where:
a. The language used throughout was ambiguous or vague, alluding merely to the existence of a debt or outstanding sums (for instance) but without indicating clearly that proceedings were on foot or that debt had been formal recognized by a Court and made into a liability order. The Court will need to assess whether certain phrases used in correspondence indicated that formal Court proceedings existed and/or what stage things had reached, or whether nothing disclosed indicated anything beyond pre-action assertions.
b. Later correspondence was unequivocal, however the Billing Authority wish to argue that promptness is to be judged from an earlier start date (with promptness consequently harder to establish). Earlier correspondence will be assessed to see whether, and when, sufficient clarity was reached to fulfill limb 2 (whether it was post-order, mid proceedings, or pre-action).
81. Ratepayer knowledge about impending enforcement, may lead to (indirect) knowledge being found. In Chuckwu, the question arose whether correspondence between the Billing Authority and the ratepayer in January 2013 contained sufficient information to trigger the start date for purposes of the Condition 3. The relevant correspondence did not say expressly “We have obtained a liability order” so the question turned on indirect knowledge, and somewhat equivocal phrases used in the correspondence.
82. On the basis that the correspondence from the Billing Authority:
1. stated that the arrears would be passed on to ‘our contract bailiffs’; and
2. had to be read in light of previous correspondence with the ratepayer in 2011 whereby the Billing Authority had agreed to withdraw a previously issued summons;
the Court held at paragraph 20 that:
‘that is sufficient to put him on notice that they have obtained some right to enforce the claim for rates by way of sending in bailiffs.’
83. Consequently, he was ‘…on notice that an order may have been made…’; time began to run in Chuckwu from January 2013. It did not matter that ‘…he had not received a copy of the order or been informed that an order had in express terms been made.’ (paragraph 21).
84. In Sleekmade, the argument was run that later liability orders start date began immediately because of an existing dispute on earlier liability. The foundation for this argument was that:
‘…since they are the same property as in the earlier orders, owned by the same owner, namely the appellant who has been subject to the same failure to pay rates, the appellant can be taken to have failed to have applied promptly to have those orders set aside in effect by implication….that the appellant knew that the subject of rates at those properties was a topic which was in live dispute between them and the respondents, and further, had they disputed those orders at the time when they should have been done, namely in a matter of days or at most weeks…, then they would have known about those orders or should have done, because the appellant and the respondent would have been engaged in active litigation.’
85. Dismissing such a wide construction of ‘notice that an order may have been made’ the Court said at paragraph 34:
‘The observations which were made at paragraph 33 of Hamden are not, in my judgment, necessarily designed to capture in effect prospectively future orders when the rate payer and rating authority are in dispute about earlier orders in respect of the same property. These subsequent orders relate to different periods of liability, in respect of which different factual considerations may very well arise as to whether or not liability exists.’
86. The Court went on to dismiss a similar argument, that start date notice should be taken to have been received for one property, merely from the fact that there was a live dispute about Business Rates about other properties ‘…on the same industrial estate…’ (paragraph 35).
Very old liability orders
87. The older the liability orders, the greater the requirement for a prompt application to set them aside. In Newham, the liability orders were between 5 and 2.5 years old. The Court said at paragraph 20 that there was ‘an important principle that runs independently of the defendant’s knowledge of orders, namely the finality of litigation’ and that:
'Obviously, with orders that were so old the obligation on the defendant, if he wanted to persuade the court successfully to set them aside, was to move particularly swiftly.’
Assessing whether the application was made sufficiently promptly
88. The predominate guidance[14a] on assessing promptness is an observation made in Hamdan, at paragraph 33:
‘In this context, where the defendant is not required to do more than to write a letter stating why he seeks to re-open the decision to make a liability order, promptness normally requires action within days or at most a very few weeks, not months, and certainly not as much as a year.’
89. The crucial phrase ‘within days or at most a very few weeks, not months, and certainly not as much as a year‘ has been adopted and applied in all the main cases. While undoubtedly applicable to assessing promptness, the following observations can be made:
a.The test is and remains promptness; this statement is a gloss on that test;
b. The word ‘normally’ is apt; the converse to ‘normally’ is presumably exceptional circumstances - which would justify departure from this guidance;
c. Words in a judgment should not be elevated to the status of a test set down in an Act of Parliament. In Merabello  Ch 75, Megarry J said, at 91, 'Words in a judgment must be construed in relation to the subject-matter of the case in question, and not as if they were Acts of Parliament.'). In BTI 2014 LLC v Sequana S.A.  EWCA Civ 112 , David Richards LJ (with whom Longmore LJ and Henderson LJ agreed) said, at paragraph 220 'Judicial statements should never be treated and construed as if they were statutes.' The common law discourages an unduly dogmatic and inflexible approach to phrases used in judgments. The perceived mischief which the Condition is designed to meet, must always be kept in mind.
90. By way of illustrative example[14b]:
a. in Sangha, a finding that an ratepayer was not sufficiently prompt following a delay of 16.5 months (3.9.04 to 23.1.06), was not overturned in the High Court (paragraphs 37-38);
b. in Chuckwu, the High Court held that a finding that the ratepayer had not acted sufficiently promptly following a delay of 15-16 months (23 January 2013 to May 2014), was not susceptible to challenge (paragraph 21);
c. in Sleekmade, delay of 15 months (6.11.12. to 18.2.14) was held by the High Court to be ‘not … remotely prompt.’
d. in Naris v Tower Hamlets LBC  EWHC 2768 (Admin)('Naris'), the district judge had found that 12 months was not prompt. The Court of Appeal said of this, at paragraph 22, that 'it is perfectly clear that the substantive decision arrived at on the issue of promptness was well within the realm of reasonable decision-making.'
e. in the unreported case of Hussain v Tower Hamlets LBC, dated 2.11.16, DDJ (MC) M Studdert, held 5 months delay was not prompt.
f. In Thaker v Tameside MBC  EWHC 2354 (Admin);  R.V.R. 36 ('Thaker'), Langstaff J said at paragraph 13 about a delay of 7 months:
‘On the same basis it follows that he had had …ample time to find out what the magistrates had decided and did not apply promptly to set the matter aside. Promptness is critical in all cases involving public administration. This is no less the case where rating is concerned and it seems to me there was ample justification for the judge to come to that conclusion. It would have been difficult to come to any other conclusion in respect of a delay of over seven months.’
91. As will be apparent, the first 3 High Court examples are rather clustered around the 15-16 month mark, and so merely show that this level of delay has been repeatedly considered insufficiently prompt. There is then Naris at 12 months, Thaker at 7 months and Hussain at 5 months - none, on the facts, were found to be prompt. This gives some indication of how the Court views promptness.
92. The Billing Authority’s own tardiness is not relevant. Promptness is not about comparing one party’s diligence and swiftness against another, or a question of comparing culpabilities. Arguments by the ratepayer in Sangha that the Billing Authority were (also) ‘guilty of delay’ in perusing unpaid Business Rates, did not get much traction (paragraph 25).
93a. A lack of promptness caused by a party being under the disabilty of bankruptcy was touched on in the bankruptcy case of Lambert v Forest of Dean  EWHC 1763 (Ch), paragraph 33.
The rationale behind promptness
93b. All challenges to administrative and judicial decisions have imposed upon them, some time limit element. The rational behind inserting a test of promptness, was considered in Sangha paragraph 38:
'There is the potential for a lot of prejudice here on behalf of the local authority. The reason why claimants have to move swiftly is that local authorities are put in a difficult position in producing evidence to show who was in occupation at particular times and when, and contradicting claimants' cases or ratepayers' cases that they were not in occupation at the material time. The law requires that people move swiftly so that these issues can be resolved rapidly and without prejudice to the local authority’
94. In Newham, the Court said at paragraph 22:
‘It is common knowledge that any organisation can only keep its records for a limited period. It is common knowledge that witnesses' recollections of events are going to fade with time.'
Need to investigate extent of prejudice to Billing Authority
95. In Newham, the 1st instance DJ was criticized at paragraph 22 for having assumed, without investigation,‘the local authority would still have all the evidence relevant to the questions that were going to be investigated at that hearing, notwithstanding the passage of such long periods of time’, and for concluding that the local authority would not be prejudiced by the setting aside of the liability orders and would not be prejudiced at the future hearing on the original summonses. The DJ should have investigated ‘[t]he possible difficulties which the local authority might have had in assembling or recovering, or being unable to recover, its records of evidence for that hearing…’ The extent of the prejudice to the local authority was an important matter and should have been investigated and not assumed (for instance, it was not known exactly over what period did the local authority ‘…clear the decks, as it were, of old materials and old evidence in their possession’, nor whether live evidence would be extensive or limited).
The Hamdan 3 Conditions are cumulative and divisible. A Magistrates Court can decide to hold a preliminary issue hearing on one of the three Conditions (for instance). This was made clear by the decision in Naris. In that case, the Court of Appeal (hearing a case stated appeal) held that the district judge had been entitled to decide to hold a preliminary issue hearing on Condition 3, promptness. At paragraph 17, Warby J stated:
'... it is plain that the decision to hear the issue of promptness as a preliminary issue was a legitimate case management decision.'
When the district judge found against the applicant ratepayer on that preliminary issue, the district judge had then found that "there was no need to hear evidence and submissions as to the two other grounds which need additionally to be proved to set aside a liability order. " On this, Warby J said, at paragraph 14:
'We do not consider that the District Judge was wrong in her analysis.'
Entitlement to set aside even where Billing Authority promise not to enforcement
96. Where a Billing Authority, facing an application to set aside a liability order, concedes that the ratepayer is not liable, then the most appropriate way forward is for the application to set aside to continue, with the Billing Authority offering no resistance to the Court setting aside the liability orders. A Billing Authority taking that position, does not render the application to set aside the liability order unnecessary and academic. The subject of a liability order is entitled to demand that the liability order is set aside, whatever the Billing Authority says about whether it will enforce the liability order.
97. In R (on the application of Tull) v Camberwell Green Magistrates Court  EWHC 2780, Mitting J dismissed an argument that liability orders could be left despite an application to set them aside, on the basis that they were rendered academic by a Billing Authority’s statement that it would not enforce them. He said at paragraph 33 and 34:
'33…Liability orders are, in effect, civil orders for payment by a court. They can ultimately be enforced by a sanction of imprisonment if unpaid, and by various other methods of enforcement before that ultimate step is reached. No citizen should be made the subject of orders to which, if they had been properly informed at the time, they would have objected and would have objected successfully…
34. In my view, a citizen is entitled, subject to the usual Administrative Court requirements as to promptitude and openness, to have set aside civil orders, such as liability orders, which adversely effect them, even though the person who has obtained the benefit of the order, the council, is willing to waive enforcement of them. I therefore make the order sought and quash the three liability orders.’
98. An application to set aside an order is an interim application. In the CPR arena, it is unusual to have oral evidence being given at an interim application hearing. Indeed it is discouraged. Within the CPR arena, interim applications are typically dealt with by submissions on the written evidence provided in support, and in resistance, to the application. However, in the Magistrates’ Court, with liability order set aside applications, this reluctance to receive oral evidence is relaxed. Where all essential facts have been definitely established as not in dispute, oral evidence may be unnecessary. In Jones, the Court said at paragraph 7:
‘There may be cases where the essential facts are not in dispute where evidence of this nature is not required, but the court would need to be sure that there is true agreement on all the material facts before proceeding without hearing evidence.'
99. Conversely, at paragraph 10:
‘…a contested crucial issue of fact that may depend upon the credibility and reliability of witnesses cannot be dealt with simply on the basis of argument’
100. Contested issues of fact are adjudicated upon only after there has been an opportunity for cross-examination of any oral evidence adduced. The Billing Authority must put its factual contentions to the ratepayer should he call himself to give oral evidence. As stated in Jones, it would be unfair to the ratepayer to have findings made ‘without that matter being put fairly and squarely to him so that he has an opportunity to deal with it.'
Should the application to set aside the liability orders be successful
101. Where the application is granted, the Court will set aside the relevant liability orders. The Court should then give directions in the normal way, with a view to holding a contested hearing/trial on the application for the liability orders.
102. Facts found when adjudicating on the application to set aside, an interim hearing application, will have been tentative or provisional conclusions on all the admissible evidence. Statements of the law within the application to set aside judgment are not likely to be treated as determining a preliminary point of law. The determination will just be in terms of arguability. The outcome of the application will not be designed to be conclusive on the issue.
Costs orders after a decision is made on the application to set aside the liability order
103. The statutory basis empowering the Magistrates' Court to make costs orders is section 64 of the Magistrates’ Court Act 1980, save where a complaint is not proceeded with (see below). Section 64 is entitled ‘Power to award costs and enforcement of costs’ and provides:
‘(1) On the hearing of a complaint, a magistrates' court shall have power in its discretion to make such order as to costs—
(a) on making the order for which the complaint is made, to be paid by the defendant to the complainant;
(b) on dismissing the complaint, to be paid by the complainant to the defendant,
as it thinks just and reasonable; but if the complaint is for an order for the variation of an order for the periodic payment of money, or for the enforcement of such an order, the court may, whatever adjudication it makes, order either party to pay the whole or any part of the other's costs.
(2) The amount of any sum ordered to be paid under subsection (1) shall be specified in the order, or order of dismissal, as the case may be.
(3) Costs ordered to be paid under this section shall be enforceable as a civil debt.
(5) The preceding provisions of this section shall have effect subject to any other Act enabling a magistrates' court to order a successful party to pay the other party's costs.’
104. The application to set aside a liability order should be considered within the ‘hearing of a complaint’, and so the provision is engaged. Unlike in the ordinary civil courts governed by the CPR, where there is a wide discretion granted to the Magistrates' Court on costs orders, Parliament has elected to restrict the occasions when costs orders can be made by the Magistrates’ Court, and further, has limited the direction the costs orders can be made in on those occasions (i.e. in favour of the complainant and against the defendant, or vice versa).
105. The question of whether the Magistrates' Court has jurisdiction to make a costs order has recently been considered by Cockerill J in R.(Khan) v Feltham Magistrates Court  EWHC 3042 ('Khan'). Readers are recommended to read this important decision in full. In essence, Cockerill J holds that an application to set aside a liability order is part of the wider, original 'complaint' brought by the billing authority, or the application itself is a 'complaint'. Either way, the Court has the statutory power to make costs order upon determination of the application to set aside the liability order. The decision in Khan as to recoverability of costs was followed by McCombe LJ and William Davis J in the Divisional Court case Anami Holdings Ltd v Sandwell MBC  EWHC 1913 (Admin), where McCombe LJ said, at paragraph 30 '...I find Cockerill J's reasoning persuasive and I would follow it in this case.'
106. As to whether costs normally follow the event (i.e. whoever succeeds on the application (pursuing it or resisting it) is granted an order that the other party should pay their costs), or some other costs default position, will depend on what category of litigant succeeded.
Where the billing authority succeeds in resisting the application to set aside the liability order
107. In R (Broxbourne Borough Council) v North and East Hertfordshire Magistrates' Court v Geoffrey Oliver  EWHC 695 (Admin), Munby J said at paragraphs 98 to 100, that 'the Justices were given an erroneous direction in law when they were advised, in terms, that “costs usually followed the event in these cases.”' Arguably however, this comment was obiter (see paragraph 84). The Court may take costs follow the event into account as an ordinary rule. In Thaker v Tameside Metropolitan Borough Council  EWHC 2354 (Admin);  R.V.R. 36, Langstaff J said at paragraph 24 about the DJ's approach:
'He took into account the principle that the loser pays. In civil proceedings that is the general rule. Here there is no obvious reason, as it appears to me, why the ordinary rule should not have applied.'
Where the application to set aside the liability order is successful
108. Here the liability order is set aside, and the main complaint/summons is revived against the defendant/ratepayer. When considering whether to award any costs to the successful defendant/ratepayer and, if so how much as 'just and reasonable', the Magistrates Court will take into account that the billing authority is a public body and so the principles  set down Bradford Metropolitan District Council v Booth (2000) 164 JP 485 at 490, R (Cambridge City Council) v Alex Nesting Ltd  EWHC 1374 (Admin), (2006) 170 JP 539, at paragraph 11, and Silber J in Patel v Camden LBC  EWHC 2459, will apply. See also Chief Constable of Warwickshire v MT (2015) 179 J.P. 454;  EWHC 2303 (Admin).
Where the Complaint is not proceeded with
109. Where the application by way of complaint for an order setting aside the liability order is not proceeded with, then section 52(3) of the Courts Act 1971, entitled 'Award of costs where information or complaint is not proceeded with', applies. Not 'proceeded with', will include an applicant withdrawing, discontinuing or otherwise ceasing to pursue the complaint through to final determination by the Court. In such circumstances, upon the complaint (to set aside the liability order) formally terminating, section 52(3) will empower the Magistrates Court to order that the applicant (the complainant) do pay the other party (defendant, Billing Authority) such sum in respect to costs as the Court considers 'just and reasonable'.
Quantum of Costs
110. On quantum of recoverable costs, after quoting s.64, Langstaff J said in Thaker, at paragraph 21 that 'that gives a wide discretion to the court.’
111. In Tower Hamlets LBC v Thames Magistrates Court  EWHC 961 (Admin) ('Thames'), a challenge in the Magistrates Court to an alcohol licencing subcommittee decision, Burnett J said, at paragraph 47:
'The general principles when considering the question of costs applications as regards quantum are well known. This judgment is not the place to seek to summarise them but a number of points bear some emphasis:
1. The indemnity principle means that the sum claimed cannot be more than the client is liable to pay his solicitor.
2. Guideline rates for solicitors practising in different locations are published in the White Book for the purposes of assisting summary assessments in civil proceedings (see CPR 48.49). Whilst not directly applicable to complex matters in the Magistrates' Court, it would be rare for a higher hourly rate to be allowed. It might also assist magistrates and District Judges if their attention were drawn to those guideline rates.
3. When deciding the amount of costs to be awarded, the court will take account of all of the circumstances of the case but they include the following:
(a) What was at stake in the proceedings?
(b) What was the importance of the issue to the parties before the court?
(c) What was the complexity of the appeal?
(d) What skill, specialist knowledge and responsibility did the lawyers concerned require or assume?
(e) How much time was actually spent?
In the round, the court will be concerned to check that the expenditure actually incurred was reasonable, and ensure that any award of costs is proportionate.'
112. The High Court in Thaker held that, while there is no statutory requirement that a party seeking costs must produce a costs schedule for the justices (the author interjects, for instance, on CPR Form N260), it is, Langstaff J said, as a matter of practice, to be commended, and that it would normally be expected.
113. In Thames, Burnett J considered the matter in more detail, at paragraphs 44 to 49.
114. At paragraph 44 in Thames, Burnett J noted the Billing Authority's submission that 'the costs claimed should have been particularised in writing', and said:
'By contrast with the provisions of the CPR , there are no formalities prescribed in connection with summary costs applications in the Magistrates' Court. That is for good reason. The Magistrates' Court deals for the most part with short cases. Applications for costs are generally made for relatively small amounts, the reasonableness of which magistrates and District Judges are well able to determine by using their experience and knowledge of local charges and the nature of the cases they regularly deal with. Even then the paying party is entitled as a matter of fairness to have an explanation of the claim, with a breakdown of rates, time spent and the nature of the work done, to enable a challenge to be made to any aspect of the claim. Routinely, such applications are made orally.'
115. Burnett J said, at paragraph 46:
'When a regulatory body is concerned with a matter in the Crown Court and wishes to recover its costs, it routinely produces a detailed breakdown to assist the court and the other party. So too, in my judgment, should parties in complex matters in the Magistrates' Court who might be seeking substantial costs orders. A failure to do so might found a reason why an application for costs should fail in whole or in part, if the court concluded that it could not satisfactorily explore the detail or the paying party were disadvantaged in challenging the quantum. The production, and indeed exchange, of such short statements of costs would be likely substantially to shorten summary costs assessments in Magistrates' Courts. They are often likely to lead to agreements on quantum, even if the principle of recoverability is in issue. Solicitors are well used to producing such statements of costs for summary assessment in all civil proceedings, as indeed both parties have in connection with this appeal by way of case stated. The form of such statements can be adapted readily to fit the circumstances of any case in the Magistrates' Court.'
In R. (on the application of Preservation and Promotion of the Arts Ltd) v Greater Manchester Magistrates' Court Preservation and Promotion of the Arts Ltd v Birmingham City Council  EWHC 2435 (Admin);  R.A. 91 ('Preservation'), in the Birmingham Case part, the billing authority obtained liability orders against the ratepayer, and claimed the billing authority's costs, relying on a costs schedule in N260 form '...which had been filed by analogy to the procedure in the Civil Procedure Rules'. On the appeal/judicial review, the ratepayer said, amongst other things, that - in effect (paragraph 138) - therefore the 1st instance district judge should have given proper consideration to the matters in CPR Part 44.4(3) on costs. Jefford J rejected this, agreeing with the submission, at paragraph 139, that:
'...the fact that a costs schedule was provided on Form N260, as it would have been for a summary assessment, was the product of using a convenient form and is irrelevant.'
Jefford J added, at paragraph 139 'The use of this form does not bring the CPR into play by analogy or otherwise.'
Reasons for Making a Costs Order
116. The Magistrates Court must pronounce its reasons for making any costs order. In Leeds City Council v Leeds District Magistrates  EWHC 1346 (Admin) ('Leeds City'), no reasons were given for awarding costs to the successful applicant, against the local authority, for about £19,800 (page 8). There had been a finding by the Magistrates Court that the local authority sub-committee's decision had been 'fundamentally wrong' as it had been misled by a licencing officer's inaccurate calculations (held expressly to not been given in bad faith). Supperstone J said, at paragraph 14(5):
'...the word “fundamentally”, in my view, adds little, if anything, to the word “wrong”. The Magistrates' Court must be satisfied that the decision of the Sub-Committee was “wrong” before it can interfere with that decision. The finding that the decision of the Sub-Committee was wrong is not challenged. That finding in itself is not sufficient for the making of a costs order'
117. There had been submissions later from the Magistrates Court clerk, as part of the judicial review process, that the local authority had not acted on “sound grounds”, but those submissions 'did not amount to reasons for the [Magistrates Court's] decision' (paragraph 18(4)). Further, Supperstone J said, at paragraph 18(4):
'Moreover... the [Magistrates Court] clerk did not go on to state what unreasonable conduct there was by the [local authority sub-committee] that led the [Magistrates Court] to find, assuming for present purposes that they had done so, that the [local authority sub-committee] had not acted on “sound grounds”'
118. With the Magistrates Court having pronounced no other reason for its costs order, Supperstone J said in Leeds City,at paragraphs 19 and 20:
'In my judgment, the decision of the [Magistrates Court] to allow the appeal does not begin to provide adequate reasons for the costs award that was subsequently made. I do not accept that the [local authority sub-commmittee] is able to understand the basis of the costs decision that was reached.
Further, in my judgment, there was no findings of fact made by the [Magistrates Court] that, applying the principles set out in the [Booth] case and Perinpanathan , would have justified the costs order that was made.'
119. On the other hand, in Crawley BC v Attenborough  EWHC 1278 (Admin), an appeal by a local authority against an adverse costs order in a licencing case, Scott Baker LJ said, at paragraph 11:
'...I think, first of all, there is no obligation on [Magistrates Court] in cases of this kind to go in detail into the reasons for their decision, and it is sufficient that they have made it clear that they appreciated the principle under which they were operating. Secondly, I make the general observation that it seems to me highly undesirable that the courts should do anything to encourage satellite litigation on questions such as costs.'
Staying the Liability Order pending Final Determination of the Application to Set Aside
120. An interesting question arises whether the Magistrates Court has jurisdiction to stay its own liability order, pending final determination of an application to set aside the liability order.
121. As far as the author is aware, there is only persuasive, rather than binding, authority on the point. The potentially relevant statutory provision is s.75(1) and (2) of the Magistrates Court Act 1980, contained in Part III of the Act, which reads:
'A magistrates' court by whose conviction or order a sum is adjudged to be paid may, instead of requiring immediate payment, allow time for payment, or order payment by instalments.
Where a magistrates' court has allowed time for payment, the court may, on application by or on behalf of the person liable to make the payment, allow further time or order payment by instalments.'
122. The authority on point is the case of R. (on the application of Vtesse Networks Ltd) v North West Wiltshire Magistrates' Court  EWHC 3283 (Admin);  R.A. 1 ('Vtesse'). In Vtesse, judicial review proceedings were brought against a district judge's refusal to state a case for the opinion of the High Court. Permission was granted by the High Court and the judical review was widened to certain substantive issues, which included 6 (c):
'Whether the Magistrates Court has power to grant a stay of execution of a liability order and the (sic) Section 75 - 77 of the Magistrates Courts Act 1980 or otherwise and whether a stay should be granted in this case.' (paragraph 3).
123. Owen J held at paragraph 34:
'By ground 6(c) the claimant contends that the learned District Judge erred in concluding that he had no jurisdiction to order a stay of the liability orders. But given my conclusions as to the substantive grounds, and the consequences of success or failure in the Court of Appeal on the 6(a)(i) and (ii) issues (see paragraph 6 above) the question of a stay has become academic.'
124. Owen J therefore did not rule on this issue. This leaves the law with only the persuasive authority of the district judge (that a district judge does not jurisdiction to order a stay of the liability orders). It may be that Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989/1058, reg.13 (3) applies, which reads:
'The amount in respect of which a liability order is made is enforceable in accordance with this Part; and accordingly for the purposes of any of the provisions of Part III of the Magistrates' Courts Act 1980 (satisfaction and enforcement) it is not to be treated as a sum adjudged to be paid by order of the court.'
125. Part III of the Magistrates Court Act 1980 contains section 75 and so reg.13 (3) strongly appears to prevent s.75 from applying to a business rates liability order.
126. At present therefore:
(i) it strongly appears that s.75 of the Magistrates Court 1980 is not available and does not grant the Magistrates Court jurisdiction to stay its own liabilty orders;
(ii) there is the decision of the district judge in Vtesse, of persuasive authority, that a district judge does not jurisdiction to order a stay of liability orders.
But, until the matter is definitively ruled upon by a higher court, the matter remains potentially unresolved.
Challenging a dismissal of the application
127. A decision by the justices to refuse the application is itself challengeable.
128. In Hamdan, the issue arose whether the most appropriate method of challenging a refusal, was by way of judicial review, or appeal by way of Case Stated (under s111 of the Magistrates Court 1980) to the High Court (s108 of the Magistrates Court 1980 - an appeal route to the Crown Court - is not available - since there is no convictions or sentence, in Business Rates cases). The Court in Hamdan said at paragraph 23:
‘I …have no doubt that appropriate procedure to challenge the decision of the justices….was to appeal by way of case stated.’
129. The Court went on to explain why Case Stated is the more appropriate method (and why judicial review was not; Hamdan is a case where the challenge was made by judicial review):
‘This is the normal procedure for challenging errors of law by justices. It has a number of advantages, not the least of which is that the discipline of a case stated normally ensures that the High Court has before it a statement by the justices of the issues they had to decide, the evidence before them, their findings of fact and the reasons for their decision. If the case stated is defective (because, for example, the justices' statement of their findings of fact is ambiguous), it may be remitted to them for amendment: see the Practice Direction to Part 52 at 52PD.76. The reasons of the justices in the present case are relatively informal, and do not include what I would expect to see in a case stated. Furthermore, in an appeal by way of case stated, this Court is able to make any order that the lower court might have made: see CPR Part 52.10 (1). The powers of this court on judicial review are more limited: it can quash the lower court's order and order it to make another order only if that other order is the only one properly open to it.’
130. Where judicial review proceedings are brought instead:
‘The High Court may refuse relief in judicial review proceedings on the ground that proceedings by way of case stated were appropriate, but the bar is discretionary, not mandatory.'
131. Where judicial review proceedings are brought, ‘unless prejudice is caused to a party, or there is some other good reason to refuse to permit a party to proceed by way of judicial review…in my judgment the Court should be reluctant to cause a good claim to be defeated by an error as to the form of the proceedings.'
132. It is noteworthy though that ’Judicial review proceedings are most appropriate where it is alleged that there has been a procedural impropriety on the part of the justices’. In the case of Pall Mall Investments Ltd v Leeds City Council  EWHC 3307 (Admin)  RVR 330, Judge Roger Kaye QC maintained this enclave for judicial review where the justices dealt with the case 'unfairly or improperly' (paragraph 43), as distinct from 'challenging errors of law'. The Court in Pall Mall approved Collins J in R (on the application of) P v Liverpool City Magistrates  EWHC 887 (Admin), where he said:
'6...I recognise that there are some conflicting authorities, which do not make it necessarily easy to decide whether judicial review or case stated is appropriate in the circumstances of a given case. Judicial review is obviously more appropriate where, for example, there is an issue of fact which may have to be raised and decided and which the Justices cannot have decided for themselves.
7. Those rather cryptic observations are intended to relate to a situation where it is alleged that there has been unfairness in the way that the Justices conducted the case, obviously where for example it is suggested that there was bias in the manner in which they conducted themselves, or the defendant in question was prevented from properly putting his or her case, or the Clerk to the Justices interfered in a way in which he should not have interfered.
8. There are cases in the books of judicial review which cover that sort of situation. Generally speaking, where it is alleged that Justices have misdirected themselves or got the law wrong in their approach to a decision, case stated is the appropriate way of dealing with it. Generally speaking a failure to go by way of case stated in such a situation is likely to result in a refusal of permission for judicial review on the basis that it is the wrong way of dealing with it.'
133. By way of example of judicial review, in Paling v Ipswich Magistrates Court  EWHC 2739 (Admin), in the Queen's Bench Division (Administrative Court), David Pittaway QC (sitting as a Deputy High Court Judge) heard an application for judicial review in respect to a hearing in the Magistrates Court of Mr Paling's application for an order setting aside a liabilty order made in respect to council tax. Mr Paling's central allegation was that at the hearing of his set aside application (which he lost) '...he was unable to hear what [the Billing Authority's advocate] said, that he informed the magistrates that he was unable to hear, and that he was not given the opportunity of making closing oral submissions.' (paragraph 21). In response to the judicial review application: (1) the Magistrates Court tendered an initial response from the legal advisor to the magistrates at the hearing (paragraph 14) - but played no other part in the judicial review application (paragraph 6); and (2) the Billing Authority tendered a witness statement setting out how the Billing Authority's advocate had now retired and how the Billing Authority had been unsuccessful obtaining a witness statement from him (paragraph 6); and that the Billing Authority relied on the advocate's attendance note of the hearing.
134. The Deputy High Court Judge set out the law on two essential characteristics of natural justice: impartiality and fariness, at paragraphs 9 to 11, before concluding, at paragraph 21 that:
(1) the Magistrates Court legal advisor's initial response and advocate's attendnace note did not responded directly to the claimant's central allegations; and
(2) the claim for judicial review succeeded:
'In my view, on the basis of the Claimant’s evidence, which I accept, a fair minded and informed observer would conclude in this case that justice had not been seen to be done. I do not consider that the merits of whether the Claimant’s application would succeed, upon which I do not form a view, should alter my decision. The Claimant’s application to quash the liability orders should be remitted to the magistrates to be heard by a differently constituted bench.'
As set out under 'Case Stated' below, a Case Stated challenge to a Magistrates Court decision must be made within 21 days of the decision. Where a ratepayer should have brought Case Stated proceedings and so should have issued within 21 days, but did not, the High Court, Administrative Court, will not allow the ratepayer to circumvent this 21 days deadline, by permitting the ratepayer to bring judicial review proceedings instead - see R. (on the application of Hacking) v Stratford Magistrates' Court)  3 WLUK 312 (Case Digest), a decision of Cavanagh J on 22.3.22.
135. An appeal by way of Case Stated must be made within 21 days of the decision. The challenge is that the justices were wrong in law or acted in excess of jurisdiction. The Judge in The Queen on the Application of Tallington Lake Limited v Grantham Magistrates Court  EWHC 3403 (Admin) explained Case Stated, as follows, at paragraphs 21-24:
'21. This is an appeal by way of case stated under section 111 of the Magistrates' Courts Act 1980. Under that provision, the power of this court is to consider whether the Magistrates' Court was wrong in law or exceeded its jurisdiction. However, it is well-established that it is an error of law for the magistrates to reach a perverse conclusion on the evidence.
22. As it is put in Blackstone's Criminal Practice 2011 at paragraph D28.14:
"The remedy [of case stated] operates only in relation to an error of law or a decision taken in excess of jurisdiction. A decision as to a question of fact will ordinarily not give rise to an appeal by way of case stated but may do so if the finding of fact is alleged to be such that no reasonable bench could have properly reached that factual conclusion on this evidence."
And it cites the case of Bracegirdle v Oxley  KB 349.
23. So I remind myself that my task is to decide whether the deputy district judge made an error of law, or reached a conclusion of fact which no reasonable district judge could have reached on the evidence or reached a conclusion which is perverse.
24. It is no part of my task to enter upon analysis of the findings of fact in any other way, for example by balancing the weight of different evidence received.'
136. The process is for the would-be appellant, to make an application to Case State, to the justices (inc. professional DJ(MC)) who composed the Court that refused the application to set aside (the application should be made by the would-be appellant in writing by letter; not orally - see R. (on the application of Preservation and Promotion of the Arts Ltd) v Greater Manchester Magistrates' Court  R.A. 91;  EWHC 2435 (Admin)('Preservation'), paragraph 9; though it would appear that Criminal Procedure Rules, rule 35.2 'Application to Magistrates' Court ....to State a Case for the an Appeal to the High Court' Form applies)), and it is for the justices to state a case for the opinion of the High Court on the question of law or jurisdiction involved. As stated, the application must be made within 21 days - payment of the fee can come later; Jefford J said in Preservation, at paragraph 23 '...the application may be validly made before payment of the fee. The payment of the fee is the condition of the requirement to undertake the stating of the case and, other than in a criminal matter, of the delivery the case stated, but it is not a condition of the application.'
The Case Stated document will usually:
(a) specify the decision in issue;
(b) specify the question(s) of law or jurisdiction on which the opinion of the High Court will be asked;
(c) include a succinct summary of:
(i) the nature and history of the proceedings,
(ii) the court's relevant findings of fact, and
(iii) the relevant contentions of the parties;
137. The justices can refuse the application if they are of the opinion that the application is frivolous (s111(5) of the Magistrates Court Act 1980). However, this refusal can itself be challenged in the High Court (under (s111(6) of the Magistrates Court Act 1980), with the prospect of the justices being ordered to produce the Case Stated, if the High Court deems that one should be produced.
138. Upon the justices producing the Case Stated, this is then sent to the High Court. The High Court then expresses its opinion on any questions of law arising from those facts. On a Case Stated, it is not the role of the High Court to rehear the evidence. The role of the High Court is to decide whether, on the facts found by the justices and the evidence before the justices, their conclusions were sound in law.
139. Where the question posed in the Case Stated cannot be answered by the High Court, one way or another on the stated facts, the High Court may remit the case back down to the justices, with directions that they should, for instance, hear evidence on an issue, in light of any guidance in the High Court's judgment, and then decide the relevant issue (see Chowdbury paragraph 33).
140. The High Court's powers on a Case Stated are laid down in section 28A(3) of the Senior Courts Act 1981:
'The High Court shall hear and determine the question arising on the case (or the case as amended) and shall—
(a) reverse, affirm or amend the determination in respect of which the case has been stated; or
(b) remit the matter to the magistrates’ court, or the Crown Court, with the opinion of the High Court, and may make such other order in relation to the matter (including as to costs) as it thinks fit.'
BEYOND THE SCOPE OF THIS PAPER
141. It is never possible to cover all aspects of a particular topic in one paper. In particular, this article cannot feasibly cover all the possible types of occupation that can arise. For instance, complicated issues arise around unincorporated associations, office-holders, receivers, mortgagors in possession, holiday homes etc. Readers are advised to refer to the books in the ‘Further Reading’ section for further guidance.
1 - Encyclopedia of Rating and Local Taxation
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2- Ryde on Rating and the Council Tax
Edited by: Guy Roots, Richard Glover
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NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.
See Non-Domestic Rating (Collection and Enforcement) (Local List) Regulations 1989, Part II Billing, paragraphs 3 to 11
See Non-Domestic Rating (Collection and Enforcement) (Local List) Regulations 1989, Part II Billing, paragraph 12.
The Magistrates Court Act 1980, section 52 is entitled 'Jurisdiction to deal with complaints' and reads:
'(1) A magistrates' court has jurisdiction to hear any complaint.
(2) But subsection (1) is subject to provision made by any enactment.'
The Magistrates Court Act 1980, section 51 is entitled 'Issue of Summons on Complaint' and reads:
'Where a complaint relating to a person is made to a justice of the peace, the justice of the peace may issue a summons to the person requiring him to appear before a magistrates' court to answer to the complaint.'
In R. v Manchester Stipendiary Magistrate Ex p. Hill  1 A.C. 328, Lord Roskill in the House of Lords considered how the Magistrates Court gains jurisdiction through: (1) the making of a complaint (in civil cases); and (2) the laying of an information (in criminal cases). His speech was limited to written informations and complaints (346). Lord Roskill said, at 342:
'...in their civil jurisdiction, what a magistrates' court have jurisdiction to try is a complaint, and what is required to give them that jurisdiction is that a complaint has been made to them....their civil jurisdiction does not depend upon a summons being issued.'
Further, Lord Roskill said, at 342:
'My Lords, it is of crucial importance to appreciate that the laying of an information is a matter for the prosecution just as the making of a complaint is a matter for the complainant. In each case it is for the prosecutor or the complainant to decide how the information or how the complaint shall be formulated.'
and at 343/343:
'The laying of an information before or the making of a complaint to a justice of the peace or the clerk to the justices to my mind means, in reference to a written information or complaint, procuring the delivery of the document to a person authorised to receive it on behalf of the justice of the peace and the clerk to the justices. The acts of delivery and receipt are ministerial, and I see no reason why the justices of the peace or the clerks to the justices should not delegate to an appropriate subordinate authority to receive the information which the prosecutor desires to deliver. It can sensibly be inferred that any member of the staff in the office of the clerk to the justices authorised to handle incoming post has such authority. Accordingly, once the information has been received at the office of the clerk to the justices, which today in most cases is likely to be at the magistrates' court house, the information will, in my view, have been laid. No more is required of the prosecutor to launch the intended criminal proceedings. Similarly with a complaint - once the complaint is received at the office of the clerk to the justices no more is required of the complainant.
What happens thereafter is not within the province of the prosecutor or of the complainant but of the court. ... if a summons is required the information or complaint must then be laid before a justice of the peace or before the clerk to the justices. This function of a justice of the peace or of the clerk to the justices in determining whether a summons should be issued is a judicial function which must, therefore, be performed judicially. This function, in my view, cannot be lawfully delegated to any subordinate. Section 1(1) of the Act of 1980 states the circumstances in which a justice of the peace (and now the clerk to the justices) may issue a summons and I respectfully agree with what was said by the Divisional Court in Reg. v. Brentford Justices, Ex parte Catlin  Q.B. 455 , as to the duties of justices of the peace and of clerks to justices before issuing summonses. Similarly, a justice of the peace or clerk to the justices must act judicially in considering an application for a summons following the making of a complaint: see section 51 of the Act of 1980.'
Later, at 346, Lord Roskill said:
'I would add that it is not necessary for the information to be personally received by a justice of the peace or by the clerk to the justices. It is enough that it is received by any member of the staff of the clerk to the justices, expressly or impliedly authorised to receive it, for onward transmission to a justice of the peace or to the clerk to the justices. The same applies to the making of a complaint.'
[3a] See Chowdbury v Westminster City Council  EWHC 1921, where Aikens LJ gives an overview on the process of obtaining a liability order:
'6…The Regulations for the collection and enforcement of business rates are to be found in the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 (“the Regulations”). These have been amended from time to time, both before and after 2010…
7 Under Part II of the Regulations, the local rating authority, known as “the billing authority”, will serve on a “ratepayer” a “demand notice” for the business rates payable in respect of a particular “hereditament”. Part III of the Regulations deals with enforcement if non-domestic rates are not paid by the ratepayer. Broadly, under Regulation 11 a billing authority has to serve on the person who is liable to pay the non-domestic rates a “reminder notice”. Then, under Regulation 12 , if the non-domestic rates are not paid in the 7 days following service of a reminder notice, the billing authority may apply to a Magistrates' Court for an order against “the person by whom” the amount due is payable. This order is known as a “liability order”.
8 Regulation 12(2) and 12(5) provide:
“(2) The application is to be instituted by making complaint to a justice of the peace, and requesting the issue of a summons directed to that person to appear before the court to show why he has not paid the sum which is outstanding.
(5) The court shall make the order if it is satisfied that the sum has become payable by the defendant and has not been paid.”
Regulations prescribe how the ratepayer can be served with the summons. Regulation 13(2A) stipulates that no liability order shall be made pursuant to a summons issued under Regulation 12(2) unless 14 days has elapsed since the day on which the summons was served. It is therefore clear that service of the summons is a prerequisite to obtaining a liability order.
The Court of Appeal in R (on the application of Mathialagan) v Southwark LBC  EWCA Civ 1689, set out the 'normal procedure' (at least in 2004), at paragraph 20:
The normal procedure is as follows:-
i. The local authority is represented by the same person on each occasion. That person is not legally qualified but has been trained and has shadowed an experienced advocate. A typical hearing at the beginning of the financial year is concerned with up to 1,000 summonses. As the year progresses, and liability orders are made or debts discharged, the number of cases to be heard on each occasion diminishes significantly.
ii. The documents described below are prepared in advance of each hearing and accompany the local authority representative to court.
iii. There is the complaint which is computer-generated by the local authority, a copy of which is faxed to the court and returned by fax.
iv. There is a declaration that the relevant summons has been posted and the proof of posting itself.
v. There is then a very extensive court list which is prepared by the local authority and which is handed to the district judge or lay bench (each member of a lay bench receives a copy). A copy is also provided to the court clerk. The procedure is that the magistrate will make a manuscript endorsement on the right-hand of the list in respect of any case which does not result in a liability order being made that day or which carries any additional orders. For example, where a case is adjourned, the adjournment is endorsed or where a costs order which is less or more than the standard costs order of £100 is made, a specific endorsement is made.
vi. In a simple case, where a debtor does not attend, there has been no communication by the debtor and standard costs are awarded on the summons, the magistrate will make no endorsement. The right-hand of the list will remain blank.
vii. At the conclusion of the hearing, the bench members or district judge will return the list or lists to the local authority representative who will then telephone Liberata plc in order to confirm the outcome of each case which did not result in a standard liability order. For all cases where a standard liability order was made, a notification of liability will be automatically computer-generated and despatched by post that night (see pp. 35 and 36 of the appeal bundle). In all other cases, a letter will be drafted and sent to the debtor (see pp. 139 and 140 of the appeal bundle).
viii. The court list is then returned to the offices of Liberata plc and archived.
ix. The court list which is in the possession of the court clerk is endorsed in manuscript during the hearing by the clerk and is retained by the court and archived.
x. There is also an evidence list. This document summarises the dealings between the local authority and each debtor.
xi. There is further an extract from the valuation list which is a large compendium of all business rate valuations for properties in the borough. The extract will show the subject premises.
xii. There is a declaration of authority. In addition, the local authority representative is sworn at the commencement of each hearing, and there is a further form of authority which is recited in addition to the oath being given.
xiii. There is then signed by the district judge or magistrate at the conclusion of the hearing, a form of order in favour of LBS, but for the purpose of authorising a bailiff a liability order is drawn. This document is generated by the local authority's computer but is not sent to the debtor. It is only printed if a decision has been taken to instruct the bailiff and is used solely for the purpose of confirming to the bailiff that he has authority to act. It is printed off the local authority's computer system without any further reference.'
The Court of Appeal then went on to criticise the blurred boundaries between Court and Billing Authority activities, at paragraph 21(ii):
ii) I find it very surprising that the only document with a court stamp (under xiii) is not produced by the court, but is created automatically by the local authority's software, even though the local authority is a party to the proceedings. (The example before us adds, under the court stamp, the words "Justice of the Peace for the area aforesaid (or by order of the Court Clerk of the Court)". The intended significance of these words is not clear to me.) This document apparently is used only for the purpose of confirming to the bailiff that he has power to act. However, for that purpose the rules require no more than "the written authorisation of the authority" (Non-domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 r.14(5)). It seems both unnecessary, and wrong in principle, for it to be presented as though it had been stamped by the court. Nothing turns on this point in the present case, and we have not heard any submissions about it, but it seems to me an aspect of the procedure which merits reconsideration.
Blackburne J in Dias v London Borough of Havering  EWHC 172 (Ch) said at paragraph 37 'it is true that the liability order procedure is of a relatively summary nature, but it still has the basic hallmarks of a judicial process, and it cannot in my judgment be stigmatised as inherently unfair.'
Addressing an argument that the Magistrates Court liability order judicial procedure might not be human rights compliant, Chief Insolvency and Companies Court Judge Briggs said, in Tower Hamlets v Naris  EWHC 886 (Ch), at paragraphs 23 and 34:
'In Dias v The London Borough of Havering  EWHC 172 (Ch) Mr Justice Henderson, as he was, provided a thorough analysis of liability order procedure and enforcement. He explained:
“It is apparent from the provisions cited above that liability orders can be made only after a fairly elaborate procedure has been followed, and the defendant has been given an opportunity to explain why he has not paid. The court may make the order only if it is satisfied that the sum has become payable, and that it has not been paid. If the defendant thinks that the order has been wrongly made, he is in principle entitled to challenge it either by judicial review or by an appeal by case stated. In the present case, however, Mr Dias took no active steps to present his case to the court, nor did he challenge or appeal against either of the liability orders.”
It is self-evident that the description of the liability order procedure given by Henderson J extinguishes any argument that such orders are made in contravention of Article 6. Mr Naris does not explain why the tribunal was not independent or impartial. He does not argue that it was not established by law. He does not explain why the public hearing was not fair other than to say that [the Hereditament] did not exist and therefore he was not served. In my judgment his argument that there was a breach of Article 6 is without foundation.'
In North Somerset DC v Honda Motor Europe Ltd  EWHC 1505, Burnett J gave an overview of the Business Rates system, but focused on the requirement to serve demand notices as soon as practicable after 1 April of the relevant year. At paragraphs 9 to 23, Burnett J said:
'The statutory scheme for the collection of business rates
The system of business rates is governed by the Local Government Finance Act 1988 [“1988 Act”] and Regulations made under it. Those include the 1989 Regulations. The system has two broad parts. The first is concerned with the preparation, maintenance and alteration of rating lists. Such lists identify hereditaments (that is property on which rates must be paid) and rateable values. This aspect of the system is administered by the Valuation Officer, an official of HM Revenue and Customs, in the Valuation Office Agency (“VOA”). The second part is concerned with the recovery of rates in accordance with the rating list. That aspect of the system is administered by the billing authority for the statutory area concerned, in this case the Council, North Somerset District Council.
The 1988 Act introduced an important change in the nature of business rates. Whilst they continued to be charged on the basis of local valuations and were collected locally, money raised by way of business rates was transmitted to a central pool controlled by Central Government for distribution according to a statutory formula. The 1988 Act also introduced the highly controversial community charge in substitution for domestic rates.
The statutory obligation on the VOA to maintain “local non-domestic rating lists” is found in Section 41(1) of the 1988 Act. The first list was required to be compiled on 1st April 1990 with subsequent lists being compiled on 1st April at the end of each five year period thereafter. This case is primarily concerned with the 2000 rating list. The content of local lists is specified by Section 42 of the 1988 Act. Section 43(1) governs liability to pay business rates. It provides:
“43 Occupied hereditaments liability
(1) A person (the ratepayer) shall as regards a hereditament be subject to a non-domestic rate in respect of a chargeable financial year if the following conditions are fulfilled in respect of any day in the year—
(a) on the day the ratepayer is in occupation of all or part of the hereditament, and
(b) the hereditament is shown for the day in a local non-domestic rating list in force for the year.”
Section 43 makes further provision for the calculation of the business rates to which the ratepayer will be subject.
Section 43 does not itself give rise to a duty to pay the rates to which the ratepayer is subject. That duty arises only following service of a notice under the 1989 Regulations.
Section 45 deals with liability for business rates on unoccupied premises (material in Mr. Graham's case). Subject to refinements to which it will be necessary to return when considering the facts of that case, the broad scheme at the material time was that the owners of unoccupied business premises were liable for 50% of the liability calculated pursuant to Section 43 . The position has since changed.
Section 49 provides express statutory provision for a billing authority to reduce any amount a person is liable to pay under Section 43 or Section 45 , or to remit the payment of the whole amount, if the authority is satisfied that the ratepayer would sustain hardship if such steps were not taken and it is reasonable to do so “having regard to the interests of persons liable to pay council tax set by it”.
Schedule 8 concerns the pooling of business rates, that is collection by Central Government of business rates through billing authorities. The approach to contributions required from billing authorities to Central Government is found in paragraph 4 of Schedule 8 of the 1988 Act which provides, as material, as follows:
(1) The Secretary of State may make regulations containing rules for the calculation of an amount for a chargeable financial year in relation to each billing authority (to be called its non domestic rating contribution for the year).
(2) The Rules shall be so framed that the amount calculated under them in relation to an authority is broadly the same as the total which, if the authority acted diligently, would be payable to it in respect of the year under Sections 43 and 45 above.”
The basic structure of the contribution system, which is subject to much further refinement in Schedule 8 itself and Regulations made thereunder, ensures that a billing authority pays to the central pool a sum equivalent to what ought to have been collected, assuming the billing authority had acted diligently, rather than any lesser sum actually collected.
Schedule 9 is concerned with “non-domestic rating administration”. It is given effect by Section 62 which provides:
“Schedule 9 below (which contains provisions about administration, including collection and recovery) shall have effect.”
Paragraph 1 of Schedule 9 enables the Secretary of State to make regulations containing “such provision that he sees fit in relation to the collection and recovery of amounts persons are liable to pay” in business rates. Paragraph 2(2) empowers the Secretary of State to make regulations which, amongst other things, concern the form and content of notices which specify the amount to be paid. The provisions in sub paragraph (2) originally included:
“(e) that the payee must serve a notice or notices on the ratepayer stating the amount payable or its estimated amount and what payment or payments he is required to make (by way of instalment or otherwise),
(f) that no payment on account of the amount payable need be made unless a notice requires it,
(g) that a notice and any requirement in it is to be treated as invalid if it contains prescribed matters or fails to contain other prescribed matters or is not in a prescribed form.”
This was the original form of paragraph 2(e) to (g). It is of note that sub-paragraph 2(g) empowered the Secretary of State to make regulations which specified that a notice that failed to contain prescribed matters was invalid. It was thus anticipated that absent such specification, the defective notice would not be automatically invalid. There was no express power to make a regulation specifying that a failure to comply with a time limit for serving a notice should result in invalidity. The power to make express provision for invalidity of defective notices itself begs the question whether that invalidity could be cured by serving a fresh notice which was compliant. Schedule 9 paragraph 2 was amended by the Local Government and Housing Act 1989 by substituting a new paragraph 2(g), together with paragraphs (ga) to (ge). They provide part of the answer:
“(g) that a notice must be in a prescribed form, (ga) that a notice must contain prescribed matters,
(gb) that a notice must not contain other prescribed matters,
(gc) that where a notice is invalid because it does not comply with regulations under paragraph (g) or (ga) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (e) or (f) above shall nevertheless have effect as if the notice were valid,
(gd) that where a notice is invalid because it does not comply with regulations under paragraph (g) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to issue to the ratepayer a document in the form which the notice would have taken had it complied with regulations under paragraph (g) above,
(ge) that where a notice is invalid because it does not comply with regulations under paragraph (ga) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to inform the ratepayer of such of the matters prescribed under paragraph (ga) above as were not contained in the notice.”
This alteration to Schedule 9 paragraph 2 demonstrates that Parliament considered that a notice which was not in the prescribed form, or failed to contain prescribed matters, would be invalid in some circumstances. Nonetheless, the purpose of paragraphs (gc) to (ge) is to enable arrangements to be put in place to ensure that the rates are paid. The underlying intention was that technical failings should not necessarily result in total invalidity. The Schedule remains silent on the question of invalidity for failure to comply with a time limit.
Paragraphs 3 and 4 of Schedule 9 enable the Secretary of State to lay Regulations making provision for the recovery of unpaid business rates by way of a liability order in the Magistrates Court (with distress, committal to prison, bankruptcy and winding-up proceedings to follow) or in a court of competent jurisdiction. Paragraph 7 of Schedule 9 is also of note. It confers a power of entry on a Valuation Officer for the purposes of discharging his functions under the legislation, but not on the billing authority. This is a feature of the scheme which Mr. Drabble relied upon in support of a submission that the task of a billing authority in identifying the occupier of premises, and thus the person to whom a notice should be sent, was far from easy.
The 1989 Regulations were made under Schedule 9 and Section 62 . Part 2 of the 1989 Regulations are concerned with “billing”. Regulations 4 and 5 are as follows:
4.— The requirement for demand notices
(1) For each chargeable financial year a billing authority shall, in accordance with regulations 5 to 7, serve a notice in writing on every person who is a ratepayer of the authority in relation to the year.
(2) Different demand notices shall be served for different chargeable financial years.
(3) A demand notice shall be served with respect to the amount payable for every hereditament as regards which a person is a ratepayer of the authority, though a single notice may relate to the amount payable with respect to more than one such hereditament.
(4) If a single demand notice relates to the amount payable with respect to more than one hereditament, subject to paragraphs 5 and 8 of Schedule 1 the amounts due under it, and the times at which they fall due, shall be determined as if separate notices were issued in respect of each hereditament.
5.— Service of demand notices
(1) Subject to paragraph (2), a demand notice shall be served on or as soon as practicable after–
(a) except in a case falling within sub-paragraph (b), 1st April in the relevant year, or
(b) if the conditions mentioned in section 43(1) or 45(1) of the Act are not fulfilled in respect of that day as regards the ratepayer and the hereditament concerned, the first day after that day in respect of which such conditions are fulfilled as regards them.
(2) Subject to paragraph (3), a demand notice may, if the non-domestic multiplier for the relevant year has been determined or set under Schedule 7 to the Act, be served before the beginning of the relevant year on a person with respect to whom on the day it is issued it appears to the billing authority that the conditions mentioned in section 43(1) or 45(1) of the Act are fulfilled (or would be fulfilled if a list sent under section 41(5) of the Act were in force) as regards the hereditament to which it relates; and if it is so served, references in this Part to a ratepayer shall, in relation to that notice and so far as the context permits, be construed as references to that person.
(3) A demand notice shall not be served before the authority has set amounts for the relevant year under section 30 of the Local Government Finance Act 1992 .”
It is common ground before me that no duty on the ratepayer to discharge his rates liability arises until a notice has been served under Regulation 5 . There is thus, within the statutory scheme, a clear distinction between the liability for business rates created by Section 43 , on the one hand, and the obligation to discharge that liability after service of a notice under the 1989 Regulations.
Regulation 12 and following are concerned with recovery of outstanding rates through the Magistrates Court or a court of competent jurisdiction, together with the ancillary enforcement procedures if a liability order made in the Magistrates Court is not satisfied. Finally, I should mention Regulation 23(1) which provides “any matter which could be the subject of an appeal under Regulations under Section 55 of the Act may not be raised in proceedings under this part”.
Section 55 of the 1988 Act (together with Regulations made thereafter) is concerned with alteration of lists. There are mechanisms which allow the owners and occupiers of a hereditament to dispute the content of the list. Notably, the rateable value set out in the list, upon which any notice served under the 1989 Regulations would be based, may be disputed. On various bases it might be suggested that the hereditament should be deleted from the list altogether or that other changes should be made. The statutory route of challenge in those circumstances involves first a proposal to the VOA with statutory rights of appeal to a Tribunal thereafter. The effect of Regulation 23(1) of the 1989 Regulations is to deny a ratepayer the opportunity to take a point to defeat enforcement proceedings which could have been raised by way of a statutory appeal.
The mechanisms for altering a list which are of relevance for the arguments advanced in this case are the mechanisms in respect of the 1995 and 2000 lists that were engaged on and after 1st April 2005. The VOA has power to alter the valuation list pursuant to its duty to maintain an accurate list. It also has power to alter the rating list pursuant to a proposal, and may be required to do so by a decision of a tribunal or court.
The VOA's direct powers arise under section 41 of the 1988 Act. Section 41(7) provides that:
‘A list must be maintained for as long as is necessary for the purposes of this Part, so that the expiry of the five year period for which it is in force does not detract from the duty to maintain it.’
However, by virtue of subordinate regulations the last effective date on which the VOA could make an alteration to the 2000 list was 31st March 2006: see the Non-Domestic Rating (Alteration of List and Appeals) Regulations 1993 (SI 1993/2911) [“the 1993 Regulations”]. Until that date, anyone (including a ratepayer) could have drawn an error to the attention of the VOA. If it was accepted as such by that date, the VOA could alter the list. Various protections operate in favour of those who might be adversely affected by such a unilateral change.
That power stands in contrast with the procedure which enables ratepayers to make proposals for the alteration of the list. Regulation 4C of the 1993 Regulations establishes a general rule that a proposal to alter the 2000 list could be made at any time before 1st April 2005. Whilst there are exceptions to that time limit, they do not apply in respect of any of the three defendants in these proceedings. That is a position accepted by the Council. In all three cases before the Court, the 2000 rating list was closed to proposals from 1st April 2005.'
[3b] The relevant procedural rules for civil cases in the Magistrates Court, are those contained in Magistrates Court Rules SI 1981/552, to be cited as 'Magistrates' Courts Rules 1981' and in force since 6.7.81.
After rule 2 entitled 'Interpretation', there is the key rule, namely rule 3A, entitled 'Case Management'. Rule 3A reads:
'(1) The court must actively manage the case. That includes—
(a) the early identification of the real issues;
(b) the early identification of the needs of witnesses;
(c) achieving certainty as to what must be done, by whom and when, in particular by the early setting of a timetable for the progress of the case;
(d) monitoring the progress of the case and compliance with directions;
(e) ensuring that evidence, whether disputed or not, is presented in the shortest and clearest way;
(f) discouraging delay, dealing with as many aspects of the case as possible on the same occasion and avoiding unnecessary hearings;
(g) encouraging the participants to co-operate in the progression of the case; and
(h) making use of technology, including live links.
(2) The court must actively manage the case by giving any direction appropriate to the needs of that case as early as possible.
(3) Each party must—
(a) actively assist the court in managing the case without, or if necessary with, a direction; and
(b) apply for a direction if needed to assist with the management of the case.
(4) At the beginning of the case each party must, unless the court otherwise directs—
(a) nominate an individual responsible for progressing that case; and
(b) tell other parties and the court who he is and how to contact him.
(5) In fulfilling its duty under paragraphs (1) and (2), the court must where appropriate—
(a) nominate a court officer responsible for progressing the case; and
(b) make sure the parties know who he is and how to contact him.
(6) In this rule a person nominated under paragraphs (4) and (5) is called a case progression officer. A case progression officer must—
(a) monitor compliance with directions;
(b) make sure that the court is kept informed of events that may affect the progress of that case;
(c) make sure that he can be contacted promptly about the case during ordinary business hours;
(d) act promptly and reasonably in response to communications about the case; and
(e) if he will be unavailable, appoint a substitute to fulfil his duties and inform the other case progression officers
(7) In fulfilling its duty under paragraph (2) actively to manage the case the court may give any direction and take any step unless that direction or step would be inconsistent with legislation, including these Rules. In particular, the court may—
(a) nominate a magistrate or justices' legal adviser to manage the case;
(b) give a direction on its own initiative or on application by a party;
(c) ask or allow a party to propose a direction;
(d) for the purpose of giving directions, receive applications and representations by letter, by telephone or by any other means of electronic communication, and conduct a hearing by such means;
(e) give a direction without a hearing;
(f) fix, postpone, bring forward, extend or cancel a hearing;
(g) shorten or extend (even after it has expired) a time limit fixed by a direction;
(h) require that issues in the case should be determined separately, and decide in what order they will be determined; and
(i) specify the consequences of failing to comply with a direction.
(8) Any power to give a direction under this rule includes a power to vary or revoke that direction.
(9) A party may apply to vary a direction if—
(a) the court gave it without a hearing;
(b) the court gave it at a hearing in that party's absence; or
(c) circumstances have changed.
(10) A party who applies to vary a direction must—
(a) apply as soon as practicable after becoming aware of the grounds for doing so; and
(b) give as much notice to the other parties as the nature and urgency of the application permits.
(11) The parties may agree to vary a time limit fixed by a direction, but only if—
(a) the variation will not—
(i) affect the date of any hearing that has been fixed, or
(ii) significantly affect the progress of the case in any other way; and
(b) the court has not prohibited variation by agreement.
(12) The court's case progression officer must refer any agreement by the parties to vary a time limit under paragraph (11) to the court if he doubts the condition in paragraph (11) is satisfied.
(13) At every hearing, if a case cannot be concluded there and then the court must give directions so that it can be concluded at the next hearing or as soon as possible after that.
(14) At every hearing the court must, where relevant—
(a) if a party is absent, decide whether to proceed nonetheless;
(b) set, follow or revise a timetable for the progress of the case, which may include a timetable for any hearing;
(c) in giving directions, ensure continuity in relation to the court and to the parties' representatives where that is appropriate and practicable; and
(d) where a direction has not been complied with, find out why, identify who was responsible, and take appropriate action.
(15) In fulfilling his duty under paragraph (3) actively to assist the court in managing the case, each party must—
(a) comply with directions given by the court;
(b) take every reasonable step to make sure that that party's witnesses will attend when they are needed;
(c) make appropriate arrangements to present any written or other material; and
(d) promptly inform the court and the other parties of anything that may—
(i) affect the date or duration of any hearing, or
(ii) significantly affect the progress of the case in any other way.
(16) The court may require a party to give a certificate of readiness.
(17) In order to manage the case—
(a) the court must establish, with the active assistance of the parties, what disputed issues they intend to explore; and
(b) the court may require a party to identify—
(i) which witnesses will give oral evidence,
(ii) the order in which those witnesses will give their evidence;
(iii) whether that party requires an order compelling the attendance of a witness;
(iv) what arrangements are desirable to facilitate the giving of evidence by a witness;
(v) what arrangements are desirable to facilitate the participation of any other person;
(vi) what written evidence that party intends to introduce;
(vii) what other material, if any, that party intends to make available to the court in the presentation of the case;
(viii) whether that party intends to raise any point of law that could affect the conduct of the case; and
(ix) what timetable that party proposes and expects to follow.
(18) The court must make available to the parties a record of directions given.
For 2 cases which expressly considered r.3A, see: (1) Naris v Tower Hamlets LBC  EWHC 2768 (Admin) - a business rates case; and (2) Love v National Crime Agency  Lloyd's Rep. F.C. 424 - a National Crime Agency case.
[4a]The Magistrates Court Act 1980, section 53 is entitled 'Procedure on hearing' and reads:
(1) On the hearing of a complaint, the court shall, if the defendant appears, state to him the substance of the complaint.
(2) The court, after hearing the evidence and the parties, shall make the order for which the complaint is made or dismiss the complaint.
(3) Where a complaint is for an order for the payment of a sum recoverable summarily as a civil debt, or for the variation of the rate of any periodical payments ordered by a magistrates' court to be made, or for such other matter as may be prescribed, the court may make the order with the consent of the defendant without hearing evidence.
[4b]In R (on the application of Tull) v Camberwell Green Magistrates Court  EWHC 2780, Mitting J said at paragraph 24-25: ‘These were civil proceedings, but they were civil proceedings to which no comprehensive code, such as the Civil Procedure Rules 1998, applied. Had the Civil Procedure Rules applied, then it would have been a simple matter to set aside the liability orders under CPR Part 13. Indeed, because the orders were not properly served upon the person against whom they were made, they would have been set aside as of right. Further, once the council had good reason to believe that they had not been served, it would have been obliged, under Part 13.5(2) itself to apply to have the orders set aside. Of course, the CPR did not apply to these proceedings.'
A recent reaffirming of the 3 condition test can be found in Chuckwu v Redbridge LBC  EWHC 2683 For an earlier explanatory/refashioning of the test, see London Borough of Tower Hamlets v Rahman  EWHC 3428 (Admin),  RA 147, where at paragraph 10, Kenneth Parker J said:
'As to the first element, it is not sufficient that a defendant disputes the existence of a liability to pay. There must be material before the magistrates that shows that there is a realistic prospect that the defendant could possibly succeed in setting aside the liability order and that it would therefore be potentially unjust not to reopen the issue of liability. As to the second element, it must be shown in most cases that the original liability order was either unlawful, made in excess of jurisdiction, made in ignorance of a significant fact concerning the procedure to be followed by the magistrates' court in making such an order, or where there is a substantial procedural error or defect. As to the third element, promptness normally requires action within days or at most a very few weeks: not months, and certainly not as much as a year (paragraph 33 of Hamdan ).'
[6a] While it is correct to refer to these as 3 conditions, there is a subtle point to make here. In Okon v London Borough Of Lewisham  EWHC 864 (Ch);  BPIR 958 ('Okon'), a bankruptcy case, Mr Robin Hollington QC (sitting as a Deputy Judge of the Chancery Division) criticised a precis of paragraph 31 to Stanley Burton J's judgment in Hamdan. He said of the precis, at paragraph 11 of Okon, that:
'...it missed the subtlety of the distinction between the ground for setting aside, i.e. procedural defect and promptness, and the condition precedent, namely arguability on the merits, and misdescribed the condition precedent as a ground for setting aside.'
[6b] See Sleekmade Property Company Ltd v Sheffield City Council  EWHC 4193, paragraph 14.
Further, in Naris v Tower Hamlets LBC, Sharp LJ and Warby J held that if a party failed to satisfy one of the 3 cumulative tests, it was not necessary for the court to consider the other two. In other words, the district judge had not been wrong to conclude that, the argument on promptness (Condition 3) having failed, there was no need to hear evidence and submissions on the two other grounds.
The concept of a shifting burden of proof under Ratford v Northavon District Council  QB 357 does not apply to applications to set aside liability orders. Ratford applies only to obtaining the liability order in the first place – see Sleekmade Property Company Ltd v Sheffield City Council  EWHC 4193, paragraph 26
 While the Supreme Court allowed the appeal from Henderson LJ in Rossendale v v Hurstwood Properties (A) Ltd  EWCA Civ 364 ('Rossendale'), there may still be some validity to Henderson LJ's comments, at paragraph 71, though for non-tax mitigation scheme circumstances. After paragraphs 68-69, where Henderson LJ saw no reason to question the correctness of the propositions of law accepted by Arden J in Brown, Henderson LJ then said, at paragraph 71:
'The meaning of entitlement to possession in this context is as stated in Brown, that is to say one has to identify "the person who has the immediate legal right to actual physical possession of the property". The concept is one that inevitably focuses on the legal right to possession, because the property is by definition unoccupied, so the question cannot be answered by reference to the position on the ground and the rights of those in actual physical occupation. It must also follow, in my opinion, that once the person who has the immediate legal right to possession of the property has been identified, there is no other person upon whom liability for the NDR may simultaneously be imposed.'
In Westminster City Council v Haymarket Publishing Ltd  1 W.L.R. 677, a mortgagee against billing authority case, Lord Denning MR in the Court of Appeal, considered the meaning of 'owner' in General Rate Act 1967 - in two supplemental sections, 17A and 17B - for the purposes of who must pay the surcharge imposed on empty commercial premises. At 679, Lord Denning MR said:
'Section 17A says who is to pay the surcharge. It says:
“(1) If for a continuous period exceeding six months a commercial building is not used for the purpose for which it was constructed or has been adapted, its owner shall pay in respect of that period … a surcharge additional to the rates (if any) payable apart from this section.”
So there is the liability to pay put upon the owner. The meaning of “owner” is defined in section 17B (7): “… ‘owner’ means the person entitled to possession …” If the owner does not pay, then section 17B provides for how it can be enforced....
The first question is: who is liable to pay the rates? Who is the “owner?” Who is “entitled to possession” when it is a question between mortgagor and mortgagee? It is quite plain to my mind that unless and until the mortgagee enters into possession, in accordance with the mortgage law, and takes the rents and profits, the mortgagor is the person entitled to possession. He is the person who is entitled to put up advertisements, to let and do all that is necessary to let — unless and until the mortgagee interferes. It seems to me that the “owner” under section 17A is not two, three or more people. It is the one who really has control of the letting.'
[9a] ‘(4) Regulations under s64(3) above may involve rules for ascertaining – (a) whether the different hereditaments or the one hereditaments (as the case may be) shall be treated as occupied or unoccupied; (b) who shall be treated as the owner or occupier of the different hereditaments or the one hereditament (as the case may be).
(5) A hereditament which is not in use shall be treated as unoccupied if (apart from this subsection) it would be treated as occupied by reason only of there being kept in or on the hereditament plant, machinery or equipment – (a) which was used in or on the hereditament which it was last in use, or (b) which is intended for use in or on the hereditament.
(6) A hereditament shall be treated as unoccupied if (apart from this section) it would be treated as occupied by reason only of – (a) [parliamentary or local government election candidature] (b) [returning officer]
(7) [Returning officer]
(8) A right which is a hereditament by virtue of section 64(2) above shall be treated as occupied by the person for the time being entitled to the right.
S64(2) is a ‘right to use any land for the purpose of exhibiting advertisements’
[9b] In Queen Street Properties Ltd v Cardiff City and Council Council  EWHC 39 (Admin), Eyre J recorded, at paragraphs 29 and 30, that:
'It is ... common ground that the test for rateable occupation is that laid down by Tucker LJ in these terms in John Laing at 350:
“First, there must be actual occupation; secondly, that it must be exclusive for the particular purposes of the possessor; thirdly, that the possession must be of some value or benefit to the possessor; and, fourthly, the possession must not be for too transient a period.”
Each of those four elements must be established.'
See also Westminster City Council v Haymarket Publishing Ltd  1 WLR 677 ('Haymarket'), where the single 'owner' concept (whether a single individual or persons holding jointly) was considered by the Court of Appeal, in respect 'owner' in subsections 17A and 17B in the General Rate Act 1967. At 681, Shaw LJ said:
'... support is to be found in the subsection itself for limiting the application of the phrase “person entitled to possession” where it appears in section 17B (7) of the Act to the person who is at material times actually exercising that right. It provides for apportionment between persons who become successively entitled to possession during a period of non-use. This could hardly be apt in relation to persons who are in law collaterally and contemporaneously entitled to possession. I would dismiss the appeal.'
Oliver LJ in Haymarket, at 681 said:
'It is quite clear, in my judgment, that section 17A contemplates, contrary to Mr. Mowbray's submission, only one owner — a single individual or persons holding jointly — on whom the surcharge would be levied....'
[11a] In Queen Street Properties Ltd v Cardiff City and Council Council  EWHC 39 (Admin), Eyre J continued, at paragraphs 32 and 33:
'In that regard it is helpful to note Buckley LJ’s consideration in the Briant case of the decision of Widgery J in Liverpool Corporation v Huytonwith-Roby UDC 10 RRC 256. At 957 E – F Buckley LJ said:
“He [Widgery J] appears to have treated ownership as the basis of a presumption of a special kind, particularly applicable to rating law. Speaking for myself, I would take the view that it is no more than a feature of the facts of any particular case to be taken into account with all other relevant facts in determining, on an overall view, who is in actual occupation. While I think that Liverpool Corporation v. Huyton-with-Roby Urban District Council may have been properly decided on its facts, I consider, with deference to Widgery J, that he was mistaken in treating ownership, as he appears to have done, as giving rise to any presumption of occupation by an owner, beyond the limited scope of a "presumption of fact," which reduces the significance of ownership to that of one of the circumstances of the case to be taken into account in deciding who on the balance of probabilities is in actual occupation.”
It is also relevant to note the terms in which Sir John Pennycuick agreed with Buckley LJ in rejecting the presumption which had been advanced in the Briant case. At 961B he said that no such presumption exists and added:
“The true statement of the law in this respect is that contained in the speech of Lord Atkinson in Winstanley v. North Manchester Overseers  A.C. 7, 14: "But owners in possession are prima facie occupiers, unless it be shown that the occupation is in some one else." Nowhere is there reference to rateable occupation. That statement, which has been frequently cited and applied, as I read it simply sets out the prima facie inference to be drawn where a property is occupied and no one other than the owner can be shown to be the occupier. In such circumstances the prima facie inference is that the owner should be regarded as being in occupation. It is an inference, or presumption, which can be rebutted by evidence that the owner is not in fact in occupation.”'
[11b]See Civil Procedure Rules 6.9, 6.17, 6.20, 6.26, 6.29, 7.5 and 83.24(5)(c); s1139 of the Companies Act 2006; CCR Order 28, 2(2); RSC Order 115.17(1)
Interestingly, limb (c) does not actually say ‘by post’ and so does not thereby benefit from s7 of the Interpretation Act 1978, which states that service “by post” is “deemed to be effected by properly addressing, prepaying, and posting a letter containing the document”. A phrase wide enough to include both ordinary and registered post. There is also not the s7 presumption of delivery, rebuttable by contrary evidence.
[13a] CPR r.6.14 provides that, where service is by first class post or equivalent, the document is irrefutably deemed to have been served on the second business day after completion of the relevant step under r.7.5(1); Contrast with Interpretation Act s7, deeming provision, deeming the letter would be delivered “in the ordinary course of post” unless the contrary is proved. See further Marshall v Maggs  EWCA Civ 20;  1 W.L.R. 1945, O’Hara v McDougal  EWCA Civ 1623 and Lexi Holdings Plc v Luqman, October 22, 2007, unrep.
[13b] In The Queen on the Application of London Borough of Newham v Stratford Magistrates Court v Selwyn Dublin  EWHC 125 (Admin), Andrew Nicol QC sitting as a deputy High Court Judge, heard an application for judicial review. The applicant was a billing authority (Newham BC) and it sought to challenge the decision of a DJ in the Magistrates Court on 30 April 2007, to set aide three liability orders made previously by the court against an alleged ratepayer. The deputy High Court Judge said, at paragraphs 16-17:
'The second argument advanced by [counsel for the billing authority] is that the District Judge could not have found that there was a substantial procedural error, defect or mishap of a kind referred to in the Brighton and Hove case. It is argued that what the District Judge found was that [the alleged ratepayer] had not received the summonses preceding the liability orders, and that non-receipt of a notice of a hearing may be unfortunate but it is not a substantial procedural error.
I agree that mere non-receipt would not by itself necessarily amount to a ground for judicial review. There are provisions in the regulations concerning Council Tax liability order hearings...to allow for proof of service of a summons in various ways and at least presumptively a rule that such summons should be assumed to have been received. The difficulty though is that the Pleroma case referred, by way of example, to a person who was unable to attend the hearing at which the order in question was made because of a traffic accident. Non-attendance at a hearing due to a traffic accident would not give grounds for quashing the subsequent decision on judicial review, and yet nonetheless, in both the Brighton and Hove case and the Court of Appeal decision, subsequent courts have appeared to accept that such a mishap could still be sufficient to satisfy this second criterion. If non-attendance at a hearing because of a traffic accident would be sufficient to satisfy that criterion, I find it difficult to see why non-receipt of the notice of the hearing might not also qualify.' [Bold added]
In fact, the deputy High Court Judge did '...determine that the decision of 30th April to set aside the liability orders should itself be quashed.' but that was because the DJ did not investigate matters relevant to whether Hamdan Condition 3 was satified (see paragraph 24). The 3 Hamdan conditions are, of course, cumulative.
[14a] Hamdan paragraph 33 also contains the following statement: 'If promptness were unnecessary, a defendant could circumvent the requirements of CPR Part 54.5 by applying to the justices for relief instead of to the Administrative Court.' which could be argued indicates that a maximum of 3 months should be applied. CPR r.54.6 sets down that for a judicial review claim form: (1) The claim form must be led— (a) promptly; and (b) in any event not later than 3 months after the grounds to make the claim first arose. However the problem with this argument is that it fails to keep separate the different functions of the separate devices for challenging a liability order: (1) Hamdan jurisdiction is there for when the ratepayer does not attend the hearing at which the liability order is made; he lost his chance to defending myself, and contends he ought to be given another chance; (2) appeal by way of case stated, is for when the substantive adjudication, or hearing procedure, went wrong; a hearing the ratepayer did attend (whether personally or through a legal representative); (3) Judicial review, is for when there is procedural impropriety on the part of the justices, but again, when the ratepayer attended.
[14b] While not exactly an example per se, there is another case,called R. (on the application of Hussain) v Kirklees Magistrates' Court  EWHC 2411 (Admin) (‘Hussain'), at least a little favourable to a relatively long delay - of 11 months. Hussain is a business rates case, wherein Judge Davis-White QC sitting as a judge of the High Court: (i) allowed a judicial review against a decision of a Magistrates Court District Judge to refuse to state a case; and (ii) ordered the Magistrates Court District Judge, to state a case for appeal.
In Hussain, the appellant/alleged ratepayer (Mr Hussain) was made subject to a business rates liability order. He applied under the Hamdan jurisdiction (sometimes called 'Brighton and Hove case'), for the business rates liability order to be set aside. On an agreed preliminary issue, the DJ (MC) found the set aside application had not been made Hamdan promptly - having been made 11 months after the appellant/alleged ratepayer had actual knowledge of the liabilty order (December 2015 to November 2016).
The Deputy High Court Judge said, at paragraphs 28-30:
’It seems to me that it is at least arguable that the requirement to apply very, very quickly, may be in part forgiven and may not require the same sort of time scales as set out in the Brighton and Hove case, if there are negotiations going on between the relevant parties, and matters in play between them, which justify putting off the matter in circumstances where there seem to have been some sort of discussions – if not agreements – that the lady that I have referred to should be paying some of the rates, it seems to me it demonstrates that there was that sort of situation in play.
...there is said to have been a contract, or in principle agreement, to sell the premises to a proposed purchaser, who was going to be discharging the rates liability on behalf of Mr Hussain. That proposed contract fell through and, thereafter, an application to set aside was made. Again, it seems to me these circumstances and timing of those matters, are matters that the district judge did not on the face address, and which may be capable of giving rise to an arguable point of appeal – that he should have done – and that, if properly taken into account, a decision that the application was, nevertheless, made promptly.
It is said on behalf of the local authority that there is no evidence, as such, that there was a causal link between the decision effectively not to make an application more promptly, and the two matters that I have identified. Again, it seems to me that that is a matter for argument on appeal as to whether or not a causal link is required. At this stage, it seems to me arguable that there does not have to be a clear causal link, in the sense of a party deciding positively not to make an application because of a particular matter. As I say, it may be that, at the end of the day, that such a causal link is required, but it seems to me, that the point is, at this stage, arguable.’
Canada Trust Co. v Stolzenberg (No.2)  1 AC 1, 13;  1 WLR 547, Waller LJ
See Attock Cement Co. Ltd v Romanian Bank for Foreign Trade  1 All ER 1189 and Blackstone Civil Practice Commentaries 2016, para.32.29
See Autofocus v Accident Exchange Ltd  EWCA Civ 788, paragraph 20
Section 64 of the Magistrates Court Act 1980 is the main section on costs generally. However, there is an additional provision contained in The Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 Reg 12, entitled ‘Application for liability order’, where Reg 12(5) and (6) read:
‘(5) The court shall make the order if it is satisfied that the sum has become payable by the defendant and has not been paid.
(6) An order made pursuant to paragraph (5) 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.’
(6)(b) seems to overlap with section 64. Reg.12(6)(b) will apply when the billing authority is seeking a liability order, and the Court must assess what is a reasonable sum incurred for costs by the billing authority, before adding that sum assessed, to the rates sum, in order to get the final liability order sum.
 Lord Bingham of Cornhill CJ in Bradford Metropolitan District Council v Booth (2000) 164 JP 485 at 490, sub voc City of Bradford Metropolitan District Council v Booth  LLR 151 at 156, said:
“I would accordingly hold that the proper approach to questions of this kind can for convenience be summarised is three propositions:
(1) Section 64(1) confers a discretion upon a magistrates' court to make such order as to costs as it thinks just and reasonable. That provision applies both to the quantum of the costs (if any) to be paid, but also as to the party (if any) which should pay them.
(2) What the court will think just and reasonable will depend on all the relevant facts and circumstances of the case before the court. The court may think it just and reasonable that costs should follow the event, but need not think so in all cases covered by the subsection.
(3) Where a complainant has successfully challenged before justices an administrative decision made by a police or regulatory authority acting honestly, reasonably, properly and on grounds that reasonably appeared to be sound, in exercise of its public duty, the court should consider, in addition to any other relevant fact or circumstances, both (i) the financial prejudice to the particular complainant in the particular circumstances if an order for costs is not made in his favour; and (ii) the need to encourage public authorities to make and stand by honest, reasonable and apparently sound administrative decisions made in the public interest without fear of exposure to undue financial prejudice if the decision is successfully challenged.”
Toulson J said in R (Cambridge City Council) v Alex Nesting Ltd  EWHC 1374 (Admin), (2006) 170 JP 539, at paragraph 11:
'Although as a matter of strict law the power of the court in such circumstances to award costs is not confined to cases where the Local Authority acted unreasonably and in bad faith, the fact that the Local Authority has acted reasonably and in good faith in the discharge of its public function is plainly a most important factor.'
 The Courts Act 1971, section 52 reads (so far as not repealed):
(b) a complaint is made to a justice of the peace acting in any local justice area but the complaint is not proceeded with, a magistrates' court acting in that area may make such order as to costs to be paid, by the complainant to the defendant as it thinks just and reasonable.
4) An order under subsection (3) above shall specify the amount of the costs ordered to be paid.
(5) for the purpose of enforcement an order under subsection (3) above made in relation to a complaint which is not proceeded with shall be treated as if it were an order made under section 64 of the Magistrates' Courts Act 1980 (power to award, and enforcement of, costs in civil proceedings).'
 Seemingly, this 21 days is not extendable by the Magistrates Court (or any other court). On this, there is the case of R. (on the application of Hacking) v Stratford Magistrates' Court)  3 WLUK 312, a decision of Cavanagh J on 22.3.22. At the time of writing, there is no judgment available for this case, only a summary on Westlaw. It is in the summary that 'The magistrates' court had no discretion to extend time, DPP v Ziegler  EWHC 71 (Admin),  Q.B. 253,  1 WLUK 137 and Mishra v Colchester Magistrates' Court  EWHC 2869 (Admin),  1 W.L.R. 1351,  11 WLUK 303 applied.'