IN THE HIGH COURT OF JUSTICE

CO Ref: CO/

/2013

QUEENS BENCH DIVISION

ADMINISTRATIVE COURT

BETWEEN:
XXXX XXXX
Appellant
and
NORTH EAST LINCOLNSHIRE COUNCIL
Respondent

APPELLANTS SKELETON ARGUMENT

[DRAFT]

INTRODUCTION
1.

This is an appeal by way of case stated by the Appellant from the decision of the
Grimsby Justices dated 2.11.12 to make on the application of the Respondent, North
East Lincolnshire Council (the Council) a liability order against the Appellant for the
payment of outstanding costs in respect of instituting a council tax summons.

2.

A reference to GoA 10 is to paragraph 10 of the Appellants Grounds of Appeal, a

reference to CO-A 10-12 is to Consent Order (Annex A) paragraphs 10-12.

BACKGROUND
3.

On 22.11.12, an application to the Magistrates court to state a case for an appeal to the
high court was served on the relevant parties. Events leading up to the appeal and the
protracted events following until present are set out in detail in CO-B. It would be
convenient at this stage to provide in summary the contributing factors that have
prevented matters raised in these proceedings (as of August 2015) from reaching
conclusion for over two and a half years.

4.

The appeal was postponed without communication when the person initially dealing
with it (Deputy Justices' Clerk) left Her Majestys Courts and Tribunals Service
(HMCTS). A further setback arose after the person subsequently assigned
responsibility (Justices Clerk for Humber & South Yorkshire) conditioned the
production of the draft case upon agreeing recognizance set at a level effectively
denying the Appellant access to justice.

5.

Six months on from the application being served (subsequent to pre-action letters),
permission was sought to bring judicial review proceedings for a mandatory order
requiring the Justices to state a case, as a consequence of numerous contacts going
unanswered that queried the recognizance and which proposed alternative remedies.

6.

The judicial review claim succeeded in prompting a response where contact with the
Magistrates court had failed and delivery of a draft case was taken eight months after
the date that the initial application to state a case was served. Representations upon the
content of the draft case were served in accordance with the relevant court rules;
however, the final case stated was not served in the required time limits (and in fact
never served).

7.

Around seventeen months on from the application, it was speculated that the Court had
not produced the final case because it would not proceed further until recognizance had
been entered into and so contact was made for its arrangement. The case never did
progress further though it was communicated that within two days of the courts
notification that the position regarding the case would be set out in writing.

8.

An enquiry was made into whether HMCTS had any arrangements in place to restrict
the appellants contact with the court, as a consequence of a further letter being sent
requesting the production of a Certificate of refusal to state a case which was never
replied to. At that point around twenty months had elapsed since the application and
after a couple of months from then a judicial complaint was submitted to the relevant
Advisory Committee which has not been acknowledged over a period of eleven
months as of August 2015.
Evidence materialising of significant relevance whilst appeal held in abeyance
R (on the application of Reverend Nicolson) v Tottenham Magistrates

9.

Whilst the present case has been ongoing, another with significant relevance to matters
raised here has been determined. In R (Nicolson) v Tottenham Magistrates [2015]

EWHC 1252 (Admin) (Nicolson v Tottenham Magistrates) the claimant sought

judicial review of the decision of justices to make an award of costs in favour of the
Interested Party, London Borough of Haringey (LBH) following the granting of a
council tax liability order concerning unpaid council tax. It was adjudged that an order
for a council tax summons was unlawful because the court had insufficient information
to determine the reasonableness of costs claimed, then failed to inquire further into how
the sum was calculated (and elements it comprised of) and because the applicant was
denied a fair opportunity to challenge the lawfulness of the order before it was made.
Policy to review court costs and produce annual breakdown
10.

Since instituting these proceedings, pressure from various quarters has been the trigger
for the Council to keep under review its level of court costs and to produce a breakdown
annually supporting them. The first published set of accounts [Ex1] appeared on the
Councils website, based on activity in 2012/13 informing the standard costs charged
during 2013/14.

11.

A Cabinet report dated 17.2.14 reviewing council tax court costs provided the legal
framework supporting the Councils decision to reduce its standard summons costs from
70 to 60 which its subsequent years breakdown (2014/15) reflected.

POINTS OF LAW
12.

The issues in this appeal arise from the provisions of the Council Tax (Administration
and Enforcement) Regulations 1992 (the Regulations") and is set out in detail in the
Appellants GoA. Part VI of the Regulations deals with the enforcement of persons
liable to pay Council Tax to billing authorities such as the Council.

13.

The matters central to these proceedings arise from the provision of regulation 34 of the
Regulations. The provision enables a billing authority to recover its costs by recharging
an amount reasonably incurred to the defendant in relation to an application to the
Magistrates Court to obtain a Liability Order. Regulation 34 makes provision for
applying costs in three distinct circumstances which are set out in paragraphs (5), (7)
and (8).

14.

Under paragraph (5), expenditure which the Council may lawfully claim in respect of
instituting the summons is described as costs reasonably incurred. Therefore the
billing authority is under a legal duty, before levying the sum, to have properly
accounted for each element in arriving at the figure and ensuring that each element it

claims is in fact incurred in connection with the issue of the summons. The Council
applies these costs to the debtors account on making the complaint, therefore they may
only include the Councils expenditure up until that point (see below para 42).
15.

Costs described under paragraph (5) are distinct from those under paragraphs (7) and (8)
in that there are no court proceedings (the latter two require the case be brought before
Magistrates). Paragraph (5) provides that if, after a summons has been issued but before
the application is heard, there is paid or tendered to the authority the aggregate of the
sum outstanding, and costs reasonably incurred by the authority in connection with the
application up to the time of the payment or tender, the authority shall accept the
amount and the application shall not be proceeded with.

16.

Consequently, a defendant settling in the circumstances described under paragraph (5)

will not be subject to any costs awarded by the court. This conflicts with the general rule
that costs follow the event and the understanding of the way a party to court
proceedings is normally awarded costs. It is for this, and examining the primary
legislation, that it is viewed that the Regulations, which provide that the parties may
agree costs prior to the case being heard, are ultra vires the enabling Act. The
incompatibility of bringing the argument into one contesting the defendant parties
compliance with the Regulations makes it inappropriate to expand on here; nevertheless,
the rationale for asserting that the Regulations are ultra vires the enabling Act is
provided separately [CO-C]

17.

Paragraph (7) provides that if after a summons has been issued and the sum has not been
paid, an order shall be made in respect of an amount equal to the aggregate of the sum
payable, and a sum of an amount equal to the costs reasonably incurred by the applicant
in obtaining the order. Paragraph (8) provides that the court shall, subject to an
application by the billing authority, grant an order solely in respect of costs, if after the
issue of a summons but before the liability order has been made by the court a debtor
settles only the sum outstanding.

18.

Pursuant to regulation 35, liability orders may be dealt with individually, or, where the
court thinks fit may be dealt with collectively. The impracticality of magistrates hearing
a thousand or so defendants all summonsed to the same court at the time and on the
same day means that debtors are steered away from appearing. It is those defendants not
attending who will generally by default have admitted liability and be the ones whose
cases will be considered appropriate to be aggregated. It does not mean that because the

established practice is to include all cases in a bulk application, the Council has any less
legal duty to properly account for the costs individually where a defendant seeks to
make representations, nor ensuring that costs it claims are properly referable to the
relevant enforcement process in respect of an individual's circumstances.

SUBMISSIONS
Questions for the High Court
19.

The questions of law on which the opinion of the High Court is sought were presented
to the Magistrates court on 22.11.12 in accordance with the relevant Criminal
Procedure Rules, in the following terms:
The questions focus on two principle points of law with regards regulation 34 of
the Council Tax regulations (SI 1992/613).
Those points being, whether
i)

costs being disputed as unreasonable should have been awarded by

the court without evidence from the council to support them.

ii) costs specifically incurred by the council for obtaining the liability
order should have been charged at the summons issuing stage.
20.

In Nicolson v Tottenham Magistrates it was held unlawful for the court to award costs
without having sufficient relevant information from the billing authority to support
them. Consequently the first question of law in the present case appears to be resolved
in the judgment at paragraph 61 which states as follows:
This application for judicial review of the decision taken by the Magistrates must
therefore succeed. I was told that since the hearing the order for costs against the
Claimant has been withdrawn, but that does not render the proceedings academic;
as I have said, it raises issues of wider public importance. Had the order not been
withdrawn, I would have quashed it. Since it has been withdrawn, I will declare
that the order was unlawful, because:
i)

the Magistrates did not have sufficient relevant information before them
to reach a proper judicial determination of whether the costs claimed
represented costs reasonably incurred by the Council in obtaining the
liability order;

ii) the Magistrates erred in law by failing to make further inquiries into
how the 125 was computed and what elements it comprised; and
iii) the Claimant was denied a fair opportunity to challenge the lawfulness
of the order before it was made, by reason of the failure to answer his
requests for the provision of information as to how the sum of 125 was
arrived at.
21.

Put in context of the present case it is evident that the Council merely informed the
Magistrates' Court of the standard sum it had decided it would impose as costs and
provided no evidence as to how they were arrived at, and what costs they represented
(see below paras 45-46).

22.

Though the court enquired into how the costs were justified at the hearing on 2.11.12,
the Council simply offered that it was not required to justify costs to the court and had
never submitted a breakdown. It was however stated generally that they covered
Council Tax collection and recovery, IT systems, employment of staff and HMCTS for
the use of their facilities.

23.

The Appellant enquired into the Council's letter (GoA 26) advising the court that it had
taken the decision to increase the summons costs to 70 (120% increase) and effectively
front loading the liability order costs by no longer charging for them separately. The
Council defended the decision on the grounds that the overall increase was 23%, as the
summons had previously been 32 and liability order (not applied in all cases) 25 and
compared the level with the national average for unitary authorities, which according to
the Chartered Institute of Public Finance and Accountancy (CIPFA) was 78.

24.

The court queried why costs varied from one authority to another and asked why 70
was charged rather than 50 or 125 (like other places). The Council stated there are no
prescribed costs for issuing a summons, but that they were simply agreed with the court,
adding that 70 was the national average and that other regions might charge over a
100 the 125 sum charged by LBH for issuing a summons was an example quoted.
In concluding, it was stated that there was no requirement to justify the amount; the
costs previously itemised were reiterated with the addition of postage costs to which the
court responded rhetorically, so the cost is reasonable.

25.

The Appellant had written to the court prior to the hearing (GoA 14) referring to a
government publication from 1993 (Council Tax Practice Note 9: Recovery and
Enforcement) produced by the Department of the Environment (the DoE). It was

requested, in accordance with the document, that the court question the reasonableness
of [the Councils] claims and require that the council provide evidence to support the
amount claimed by way of costs is no more than it reasonably incurs. Paragraph 3.81 of
the DoE document states, so far as is relevant, as follows:
3.18 ....The order will include the costs reasonably incurred by the authority in
securing the order. Whilst it is likely that authorities will have discussed a scale of
fees with the Clerk to Justices it should be recognised that the Court may wish to
be satisfied that the amount claimed by way of costs in any individual case is no
more than that reasonably incurred by the authority.
26.

It would be helpful at this point to consider the matter in the context of Nicolson v
Tottenham Magistrates. It should be explained that a good practice guide, produced
since by the Government (June 2013) is referred to, not the DoE Practice Note.
However, the above is largely reiterated in the guide, to which is appended in paragraph
3.4 a reminder that Local Authorities are only permitted to charge reasonable costs for
the court summons and liability order and that a breakdown showing how the costs are
calculated should be provided on request.

27.

Paragraph 3.4 is reproduced in Nicolson v Tottenham Magistrates (56) where it is

affirmed thereafter that the information was asked for in that case and was not
forthcoming. Paragraph 57 which states as follows:
The Claimant asked for that information and it was not forthcoming. The
Magistrates did not have that information before them either. It was not good
enough for them to be told in general terms that the costs had something to do
with administrative time and the number of people who were involved in the
process for making the application. Nor was it good enough for them to be told
that some arrangement or agreement had been reached in 2010 between the
Council and the clerk to the justices about the level of the costs without carrying
out any investigation of what the agreement was and the basis for it. Looking to
see whether the costs were broadly in line with costs being charged by other local
authorities was all well and good, but it was not enough to discharge the courts
obligations.
It was also found unsatisfactory in Nicolson v Tottenham Magistrates (29) that the
Magistrates accepted LBHs justification that the costs claimed were reasonably
incurred on the basis that they were no more than the standard amount claimed in every
case. Paragraph 29 states so far as is relevant, as follows:

The Magistrates sought to rely on the fact that the 125 claimed was no more
than the standard amount claimed in every case; but the fact that a standard sum is
attributed to costs recoverable in every case where a summons has been issued
was one of the matters that gave rise to the Claimants concerns. That is why the
Claimant was seeking to find out how it was computed and what was the
Councils justification for claiming it across the board. For all he knew, there
might well have been a plausible justification, but in the absence of further
information he was in no position to tell and neither were the Magistrates.
28.

It is also in the present case broadly the same criteria that satisfied Magistrates that the
costs were reasonably incurred. The Councils representations are recorded in the
draft statement of the case (the Draft Case) produced on 22.7.13 in sub-paragraphs
(a) to (d) of paragraph 3 which are summarised as follows:
The costs were the same level as were sought in all similar proceedings arising in
cases on or after 1.4.11 which was a sum previously notified to the Court on
4.3.11. They did not exceed the prescribed amount described in regulation 34(8) of
the Regulations and were within the range sought by other local authorities in
similar proceedings. The level sought had been calculated to reflect both
administrative and legal costs in bringing the proceedings to court, including the
court fees.

29.

The courts findings are recorded in sub-paragraphs (a) to (g) of paragraph 7 of the
Draft Case which are summarised as follows:
We recognise that in all cases where costs are claimed we have discretion whether
to order them and in what sum, so the fact that the Council asked for the normal
amount did not prevent us from reducing the sum or refusing to order any costs.
The Council has taken a broad approach to the question of costs and has sought a
similar amount to all others in the same court list. This is normally appropriate,
though we accept we must look at each case individually, so in principle, the
respondent could have sought a greater amount in an individual case where more
costs were incurred, subject to any limitations set by regulations, had it chosen to
do so.
The amount requested in all cases before us was a sum advised to the court over a
year before these proceedings commenced and the court in the intervening period
has considered it appropriate by making orders in favour of the respondent in that
sum. That fact of course did not prevent us from considering the amount requested
here. A court fee payable in respect of each application as well as other
administrative and legal costs of bringing the proceedings satisfied us that 70 was
an amount reasonably incurred by the respondent in making the application before
the court and obtaining the liability order.

On the basis of the information presented to us by both parties, the contention that
the amount claimed by the Council was in the nature of general revenue raising
did not succeed and we were satisfied that it was instead an amount to cover the
cost of bringing council tax enforcement proceedings to court. This case had no
features to distinguish it significantly from other cases in our list to suggest a
different level of costs. The appellant should pay the full amount of the costs
sought. We could not see that it was just to order the appellant to pay less or we
would have so ordered. We ordered that the costs requested by the respondent
should be paid by the appellant in the proceedings and made a liability order
against him to enable that sum to be recovered.
30.

There is nothing left to question or take apart any further from the accounts. The
Magistrates in the present case clearly sought to rely on the same criteria that satisfied
Magistrates in Nicolson v Tottenham Magistrates which had in that case all been
considered unsatisfactory. There is however a need to focus on the declarations which
raise issues beyond simply whether or not they were considered satisfactory.

31.

The court expressed in the Draft Case (7(f)) that the case had no features to distinguish
it significantly from other cases in its list to suggest that a different level of costs should
be considered. It is understood that the data provided on the complaint list relating to
each case simply consists of the defendants personal details, liability period, summons
notice value, costs and the total, therefore unrealistic to expect that this information
would enable the court to go through a judicial exercise of distinguishing different
levels of costs from one case to another.

32.

The Council declared under representations in the Draft Case (3(b)) that the level of
costs sought did not exceed the prescribed amount described in regulation 34(8) of the
Regulations which is an incorrect reference to costs (GoA 15-24). Regulation 34(8)
describes the expenditure incurred in bringing the case before the court and obtaining
the liability order whilst the costs contended were those of instituting the complaint in
regulation 34(5). This was similarly misconceived by the court as evidenced by the fact
that in its findings in the Draft Case (7(d)) it stated that they considered 70 was an
amount reasonably incurred by the Council in making the application before the court
and obtaining the liability order.

33.

Apart from there being an incorrect reference in the present case, it is implied that the
70 costs (the same whether a case proceeds to court or payment renders a hearing
unnecessary) includes an element of front loaded expenditure in applications which are
not proceeded with.

34.

It is also stated in the Draft Case (3(d)) that the level of costs sought had been
calculated to reflect both administrative and legal costs in bringing the proceedings to
court, despite the Councils fervent denial of the existence of a calculation in two
Freedom of Information (FOI) requests. In each case, the opinion of the Information
Commissioner and subsequently the Information Rights Tribunal was sought who
agreed unanimously with the Council that on the balance of probabilities such a
calculation was not held and with whom it also agreed there was nothing legally
obliging it to support its costs. The first of the FOI requests (see below paras 45-46) was
submitted on learning that the Council had increased the summons costs by 120%, but
before the Magistrates court and these proceedings commenced; the second submitted
subsequent to both.

35.

The second FOI request focussed solely on the Councils incurred expenditure to issue a
summons (the matter central to these proceedings) which escalated to an appeal to the
First-tier (Information Rights) Tribunal (FtT), 'Gilliatt v Information Commissioner'
(Appeal No: EA/2013/0285). The appeal relied in part on the Council being legally
obliged to demonstrate how it came by the figure in order to persuade the FtT that it
would in fact know this cost and enable its disclosure.

36.

The Response to the FtT appeal (4.2.14) supported the Commissioners findings in the
Decision Notice (the DN) reference FS50505226, which were reiterated to the extent
necessary to respond to the appeal grounds. In the matter of a legal requirement, and
with reference to the Governments good practice guide, it records in paragraph 27(1)
of the Commissioners Response that the documentation is merely guidance and does
not entail a legal obligation to hold the information requested (DN, para. 16). In the
same matter, but with reference to regulation 34(5) of the Regulations, it records in
paragraph 27(2) of the Response, as follows:
The legislative provisions referred to by the Appellant, specifically regulation
34(5) of the [Regulations], provide that public authorities shall not proceed with
summonses for unpaid council tax if there is paid/tendered to the authority both
the outstanding sum and a sum equal to the costs reasonably incurred by the
authority in connection with the application up to the time of the payment or
tender [of the outstanding council tax payment]. However, neither this provision,
nor any other statutory provisions, provides any obligation on local councils to
hold information enabling them to provide a breakdown of those reasonable
costs (DN, paras. 17, 19).

In Judge Farrers Final Decision dated 22.5.14 dismissing the appeal it is evident that
the FtT had been persuaded that a local authority is under no legal obligation to be able
to support the incurred costs it recharges to those debtors against whom complaint is
made. Under heading The Tribunals Decision (paras 7 and 8) it is held, so far as is
relevant, as follows (emphasis added):
7 Regulation 34(5) of the [Regulations] does not oblige a council to hold the
requested information. It reads (5) If, after a summons has been issued in accordance with
paragraph (2) but before the application is heard, there is paid or
tendered to the authority an amount equal to the aggregate of
(a) ......
(b) a sum of an amount equal to the costs reasonably incurred by
the authority in connection with the application up to the time of
the payment or tender,
the authority shall accept the amount and the application shall not be
proceeded with.
8 The obligations imposed are those set out in the last line, no more. A council
may use a standard estimate of the costs that it reasonably incurs but, as the
Guidance says, a court may question it so keeping the relevant data is good
practice. This basis for rejecting the Councils denial therefore fails. Even had
there been such an obligation, that would not have demonstrated that the
Council must have complied with it.
37.

The Appellant applied for permission to appeal to the Upper Tribunal contending that
the judge was wrong in law to have considered that the Council was under no duty to
hold the requested information by virtue of regulation 34(5) of the Regulations. The
grounds of challenge to the FtT determination in paragraphs 7 and 8 are set out in the
application for permission to appeal (3-5). The appellant attempts to persuade the FtT
(para 5) that the issue involves the interpretation of regulation 34(5) because the judge
held that a legal obligation for a council to show how the sum it claims in costs is
arrived at does not exist explicitly in the statutory language. The Appellants
interpretation is summarised as follows:
After a summons has been issued but before the case is heard, Magistrates have no
jurisdiction over costs until the case is brought before the court where they then
may fall under scrutiny. There is no prescribed amount and the court can not, in a
legal context, agree a standard sum, so is open to the council to accept payment,

mindful that the amount may vary from case to case. Proceedings are not yet
before the court, so if on payment or tender, the authority fails to agree the sum,
then it must, by virtue of regulation 34(5)(b) be obliged to support its claim in
order to justify the sum is no more than costs reasonably incurred. To proceed
once an amount has been paid or tendered would be unlawful, as it clearly states:
the authority shall accept the amount and the application shall not be proceeded
with
38.

Permission to appeal was refused by the FtT in a Decision promulgated on 4.7.14

(DRP). The FtT declined to review the decision because it was not satisfied that any
arguable issue of law arose from its decision to dismiss the appeal, which states at
paragraph 5, so far as is relevant, as follows:
Its response remains the same as in its Decision; Reg. 34(5) does not impose the
asserted duty and, if it did, the Tribunal was entitled to find as a matter of fact that
NELC did not comply with it by holding the requested information.

39.

The FtT was concerned in determining whether on the balance of probabilities the
Council had any demonstrable way of supporting its costs, so the mere existence of a
legal duty would not in itself be evidence. It was nevertheless something that the FtT
had a duty to assess, which in the context of Nicolson v Tottenham Magistrates (61)
had done erroneously. Having no way of verifying its costs, the Council is left unable to
provide Magistrates with sufficient relevant information...to reach a proper judicial
determination of whether the costs claimed represented costs reasonably incurred.

40.

Though the matter was FOI and concerned information the Council held rather than
what it should hold, there may be merits in considering the FtTs reasons for declining
to review its decision to better understand how it fits within the context of the present
case and as a point of comparison in Nicolson v Tottenham Magistrates. Paragraph 6 of
the DRP states, so far as is relevant, as follows:
As to the supposed duty, it is evidently based on the claim that the duty under
Reg. 34(5) to accept the paid or tendered amount can only be discharged if, in
every case, the taxing authority is able to specify precisely the ...amount equal to
the costs reasonably incurred by the authority in connection with the application
up to the time of the payment or tender, (Reg. 34(5)(b))
There is nothing in that wording to preclude the application of a standard charge,
provided it represents a reasonable estimate of the average cost of the application
at the prescribed time.

41.

Nicolson v Tottenham Magistrates agrees (46) in so much as it considers in principle,

provided that due consideration is given to the dangers of artificially inflating costs, it
may be a legitimate approach to provide an average figure which could be levied across
the board in "standard" cases. It does however go further and add that such costs could
be amplified in circumstances where there was justification for incurring additional
legal and/or administrative costs.

42.

This approach would require the average figure being derived from the aggregate
recoverable costs, which (i) excluded any expenditure that was not common to every
application, and (ii) be properly referable to the summons/liability order. That is to say
in broad terms the exclusion of those elements which are referred to later (see below
paras 63-78). It would then be open to the council in cases where it incurred additional
administrative costs (where they were lawful and there was justification to do so) to
amplify the standard costs, but again subject to them always being properly referable to
the enforcement process. There is however another factor arising due to the fact that the
standard summons costs is added to the taxpayers account routinely at the point when
the processing software triggers the summons issue. In doing this the Council has
imposed upon itself a greater restriction in the amount of expenditure it may lawfully
claim than otherwise regulation 34(5) entitles. This could be viewed as a policy which
backfires but for the fact that there has thus far been a free rein given by the
Magistrates court for the Council to set its own costs and apply them in a way without
regard for the Statutory Instrument that governs them.

43.

It is open to those against whom the council proceeds, to challenge the application, and
where representation is made about costs, Magistrates must look at the case on an
individual basis but need not involve the onerous task of calculating the level of costs
incurred in each individual case. In seeking to standardise costs, the very least
requirement would be to have a standard sum for the summons and another for the
liability order; then only where costs are challenged or an amount tendered, as per the
Regulations, would they need individually assessing to ensure that the debtors are
treated lawfully.

44.

The DoE Practice Note states that the Court may wish to be satisfied that the amount
claimed by way of costs in any individual case is no more than that reasonably incurred
by the authority because the Regulations provide for individual costs. Moreover, the
court would not require satisfying on an individual basis for any arbitrary reason, but
because an individual sought to challenge the costs, which is why regulation 35(1) of

the Regulations provides that a single liability order may deal with one person and one
amount. Regulation 35, so far as is relevant, is as follows:
Liability orders: further provision
35.(1) A single liability order may deal with one person and one such amount
(or aggregate amount) as is mentioned in regulation 34(7) and (8), or, if the court
thinks fit, may deal with more than one person and more than one such amount.

Beyond reasonable doubt that there was no evidence to support the costs
45.

A copy of a breakdown was asked for via FOI that was assumed would be supplied by
the Council to the Magistrate's Court in support of a near 120% increase of its standard
council tax summons costs. The Councils 2011/12 budget setting revealed it aimed to
achieve savings by generating 188,000 additional each year in court costs income and
was what brought about the request.

46.

The FtT (in whose hands the matter had been placed) took the decision to strike out the
appeal on the basis that there was no reasonable prospect of the case, or any part of it,
succeeding. Though plainly the attempt to obtain a breakdown via the FtT was
unsuccessful, it has nevertheless provided formal judgment in support of the Magistrates
not having sufficient relevant information before them to reach a proper judicial
determination of whether the costs claimed were reasonably incurred by the Council.
See paragraph 4 of the Appendix to the Order of Judge Taylor dated 27.4.12 striking out
the appeal in case 'Gilliatt v Information Commissioner' (Appeal No: EA/2012/0050):
Following a complaint to the Information Commissioner, a Decision Notice was
issued concluding that the Council had complied with the Freedom of Information
Act 2000 (the Act), and no further information was held. This was because on
the balance of probabilities the Council had provided all of the information it held
that fell within the scope of the information request, and:
a. The Information Commissioner considered the Council had explained
why it did not hold more information falling within the scope of the
request there was no business need for it to hold information in the detail
and context requested.
b. Request A: The Council had explained that it had not supplied the
Magistrates Court with a breakdown of the increased summons costs. It
had explained that it did not hold a breakdown for the calculation of the
70.00 fee, as it was based on comparisons with the fees charged by
neighbouring authorities (including Hull City Council and East Riding of

Yorkshire Council) and then compared against national averages, and as

previously identified checked to ensure that the monies raised from costs
would not be greater than the cost of the service.
47.

The remaining question to be determined in the present case i.e. whether the costs of
obtaining an order which have not been incurred are claimed lawfully in respect of
instituting the complaint has now been established in Nicolson v Tottenham Magistrates.
The judgment focuses on the legislative provisions that sets apart costs which may be
claimed in respect of obtaining the liability order and those which are limited to a lesser
amount (by virtue of payment or tender) under the provision of regulation 34(5) of the
Regulations. It concludes (37-38 & 49-50) that additional costs in obtaining an order
(which have not been incurred) may not be lawfully claimed in respect of instituting the
complaint.
Costs set at same level whether applied at the summons or liability order stage
and/or including costs arising post liability order

48.

A legislative provision for capping costs in Welsh authorities (GoA 22-24) is set out
in the Council Tax and Non-Domestic Rating (Amendment) (Wales) Regulations 2011
(the Amendment). The Amendment and particularly its Explanatory Memorandum
suggest that the Regulations were formulated, intending to give a person issued a
summons an incentive to settle liability before the case proceeded to court. Although
there is no provision for each stage to be capped independently, the language is implicit
(GoA 23) that costs in respect of instituting the complaint, form one distinct part of an
aggregate amount (capped at 70) in respect of the authoritys total incurred expenditure
to obtain a liability order.

49.

LBH made representations in Nicolson v Tottenham Magistrates defending the setting

of costs at the same figure, regardless of whether payment was made before the case is
heard. The Explanatory Memorandum provided the rationale behind why the councils
approach to applying costs was legitimate, which on the face of it, appeared not in
accordance with the Regulations. The explanation is contained in paragraph 49 of the
judgment which, in so far as relevant, is reproduced below (emphasis added):
.....It explains why the limit was not set at 35 for each of the two stages, on the
basis that during the consultation process "several local authorities pointed out
that the greatest amount of work is incurred before the initial summons is issued
and argued that the charge should be higher at this stage. Ms Henderson said

that this explained why in the case of some local authorities, such as the Council
in the present case, the costs were set at the same figure regardless of whether
payment was made after the summons was issued. The costs of obtaining a
liability order were very small in comparison with the costs incurred in connection
with the issue of the summons.
The explanation was accepted in principle but it expressed that in practical terms the
approach provides no incentive....to pay up after the summons is issued. It concluded
(in that matter) in paragraph 50, so far as relevant, as follows:
.....What matters is that the costs that it does decide to claim are properly
referable to the enforcement process.
50.

Observing legislative restrictions that limit costs to expenditure incurred up to the point
where an amount has been paid or tendered and that some authorities claim an
identical sum in cases that proceed to court then those that make no distinction would
be falling foul of the law if the further cost incurred in obtaining an order were not
borne by the taxpayer. The same would be true if continuing expenditure incurred by the
authority after obtaining the order in respect of securing payment etc. was claimed as
court costs (at either stage). However, in order that the cost of recovery does not fall on
the taxpayer as a whole, many billing authorities express a view that rechargeable costs
in respect of applying for a liability order should extend to cover all expenditure which
is considered attributable to recovery and enforcement (CO-A 168-177).

51.

In this respect there is some assistance to be derived from Chiltern District Councils 16
March 2010 Cabinet report into Court costs (CO-A 69-74), see in particular
paragraph 4, where the essential point being made is that, the majority of costs it incurs
arise from the court hearing to obtain the order and the additional work required to
secure payment thereafter. Paragraph 4 of the report is as follows:
The level of costs should be realistic but reflect the fact that we do not believe in
principle that it is fair to pass on the costs of recovery from the few people who
default on payment of Local Taxes to the vast majority who do not. Most of the
costs the Council incurs arise from the application for a liability order at Court and
the additional work required to secure payment once we have the liability order.

52.

Understandably, expenditure varies in proportion to the authoritys size and may be

affected by economies of scale, but that has no bearing on at what stage in the process it

is incurred. It is therefore rational that one authority incurs recovery expenditure in

much the same way as another.
53.

With it established that a billing authoritys priority is to ensure that no cost of recovery
is borne by the taxpayer, the following line of reasoning must lead to the conclusion that
billing authorities in general, account for expenditure in their standard court costs which
falls outside the boundaries defined by law:

54.

a billing authoritys incurred expenditure in securing a liability order makes

up only a small element of its overall cost of recovery due to non and late
payment (CO-A 169-170); however

billing authorities endeavour to ensure that no cost of recovery is borne by the

council tax payer in general; but

the law restricts costs that can be recharged, to an amount incurred in

obtaining a liability order, or limited further to an amount in connection with
instituting the complaint (in the circumstances described under regulation
34(5) of the Regulations).

In context of the present case the Council implies that its priority is to safeguard the
taxpayer from having to bear any element of recovery administration by setting its
standard court costs at a level which includes expenditure that falls outside the
boundaries defined by law (CO-A 171-177). The Councils Cabinet report, Review of
Council Tax court costs, dated 17.2.14 briefly outlines the risks of members opting
either to levy a higher level of court costs than recommended or a lower level. The
relevance in this context, was the risk outlined which was associated with opting for a
lower level than recommended, as follows:
Members may choose to levy a lower level of costs than that recommended,
however, this would mean that additional costs incurred by the Council due to
non-payment are borne by those Council Tax payers who pay on time in
accordance with their instalment plan.

55.

Responses by the Council to FOI requests asking for breakdowns of its costs underpin
this. For example, as a final safeguard in a series of checks to be satisfied its costs are
claimed lawfully, the Council consistently refers to ensuring that the monies raised
from costs do not exceed the cost of the service (see above para 46).

56.

If the law made provision for the cost of the service to be recharged to the taxpayer, it
might be good enough, but that reference has been confirmed to relate to the costs

reasonably incurred for Council Tax collection and recovery. The cost of the service
must include expenditure attributable to the court application but only as an element of
the aggregate amount and so the idea of ensuring income is kept within this budget is
misconceived as a measure of what might be lawful.
57.

The Council implies that because court costs income is within its annual budget (1.1
million) for all activity associated with recovery of Council Tax etc., it considers that its
claim is lawful. The DN (ref: FS50400874) records this in para 6:
...The [Regulations] do not require the Council to justify the amount charged to
each individual, only that the costs have been reasonably incurred by the authority
in connection with the application up to the time of payment or tender. The annual
budget for all activity associated with recovery of Council Tax and Business rates
amounts to approximately 1.1 million.
It is reinforced further at paragraph 15 of the DN that the Council sets it costs, not at a
level to cover the court application but for recovering Council Tax, ultimately in a bid to
safeguard the taxpayer from having to bear any element of recovery administration:
...The monies raised from costs are not greater than the cost of the service. The
increase in summons costs does not represent income generation but a saving
that can be made in the cost of the delivery of the service, that would otherwise
ultimately be passed on to the Council Tax payers of North East Lincolnshire...
As stated the costs raised from the increased Summons costs are to cover the
cost of recovering Council Tax, and do not represent income generation but a
saving that can be made in the cost of the delivery of the service for the benefit of
all Council Tax payers of North East Lincolnshire

58.

The view held by perhaps all billing authorities that costs claimed in an application for a
liability order should encompass all recovery and enforcement administration, appears
to be endorsed by the Ministry of Justice (the MoJ). In a response to a FOI request on
related matters (FOI-87328) the MoJ stated that the level of costs applied for is
calculated by reference to the actual expenditure incurred in recovering council tax
debts...
Policy to review court costs and produce annual breakdown

59.

The calculation produced by the Council [Ex1], subsequent to these proceedings

commencing, attributed the vast majority of expenditure to instituting the complaint (the
summons). Only 5% of what was accounted for as the Gross Recoverable costs was

estimated as being attributed to further work in obtaining a liability order. The

breakdown shows, in apparent compliance with the law, that the estimated 5% was
deducted from the gross figure before dividing that sum by the number of summonses
issued to arrive at the average cost per summons.
60.

In accounting terms therefore, the relatively small cost attributed to additional work in
obtaining a liability order after a summons has been issued is absorbed by the taxpayer.
In this matter it is agreed in Nicolson v Tottenham Magistrates (50) that In principle
there is no reason why a local authority should not decide to limit the costs it claims to
the costs in connection with issuing the summons.

61.

The breakdown allowed the Council to demonstrate, in theory at least (or to an

acquiescent body willing to endorse the figures), that the requirements of the
Regulations were met. Under proper scrutiny however, validation would require further
proof that the expenditure was reasonably incurred and the gross recoverable costs
were in fact lawfully recoverable. The very minimum that would be expected from the
court to be satisfied of this would be that:
a)

estimated further work attributed to obtaining the liability order was not
determined as negligible, merely to justify charging all costs up front,

b)

average costs do not include subsidy for bad debt arising from waived or
unrecoverable costs,

c)

costs do not include subsidy for administration expenditure arising from

setting up payment plans, dealing with queries etc, (CO-A 128)

d)

costs claimed do not include any element attributable to the expenditure of

enforcing the order after it is obtained

a) Further work to obtain liability order determined as negligible

62.

The calculation would have to be dismissed on the basis that it provides nothing at all
that could satisfy the court that the expenditure attributed to obtaining the liability order
only represented 5% of the gross recoverable costs, based as it appeared to be on an
arbitrary estimate (GoA 69-70). In any event, the Councils claim to incur the vast
majority of expenditure in respect of instituting the complaint conflicts entirely with
Chiltern District Councils view (see above paragraph 51) as to where most of the costs
arise which would reinforce justification for the court to require evidence.

b) Subsidising bad debt arising from waived or unrecoverable costs (GoA 71-76)
63.

The calculation would have to be dismissed similarly because it could not be established
whether the standard costs included a subsidy for bad debt. It is clear from subsequent
breakdowns relating to 2013/14 and 2014/15 that the standard sum recharged to
customers in respect of summons costs include a significant element of bad debt brought
about by defendants, who for example, may have no means to pay. Those debtors are
then being subsidised by those from whom payment is more easily recovered. The
Councils Cabinet report, Review of Council Tax court costs, dated 17.2.14 confirms
this, as follows:
The Council recognises the difficulties some residents have encountered in
paying Council Tax as a result of Welfare Reform changes, and as a result has
been more flexible with instalment arrangements. In cases where residents owe a
modest amount, and have subsequently made an arrangement which clears the
balance within the financial year, costs have not been applied. It is anticipated that
such action will continue into 2014/15.

64.

It is estimated from the Councils breakdown (and number of summonses issued in

2013/14) that at least 42% of taxpayers against whom complaint was made were
summonsed without costs applied (GoA 72). Put in context, at least 25 was added to
the standard sum for the remaining debtors, which is conservatively estimated because
no element of bad debt has been factored in to account for unrecoverable costs in those
cases where they were applied.

c) Subsidising administration cost for customer contact (GoA 77-105)

65.

The calculation would be impermissible because it includes a disproportionate amount

of staff time attributable to customer contact under the budget category, Council Tax.
This expenditure arises from dealing with queries/calls etc. as a consequence of issuing
summonses. A second category, Debt Recovery, also includes a disproportionate
amount of staff time that accounts for expenditure in negotiating, setting up and
monitoring payment arrangements etc. The vast majority of this expenditure will not
have been incurred by the Council in a proportion of cases, for example where the
application does not proceed (by virtue of payment or tender) or where it does proceed it
does simply without staff contact.

66.

The gross recoverable costs under the Council Tax budget is 260,912. Based on the
Councils computing method, this adds 25 to the cost per summons, though an element
of this would arguably be legitimate only in cases where the debtor had taken up
resources by engaging staff in matters connected with the summons, as this is the basis
upon which the expenditure is justified.

67.

The breakdown explicitly sets out that its recoverable costs (after deducting 30% for
routine billing activity from the Council Tax budget) is in the ratio of calls arising
from summonses to calls arising from reminders that do not result in a summons. The
final recoverable costs for those proceeding to summons is a sum estimated as 50%
(260,912) with the other half attributed to what the Council categorises as those
paying on time.

68.

None of the expenditure could have lawfully been incurred by the Council in respect of
the Appellants summons simply because the assumptions on which the calculation was
based were that each person against whom complaint is made would take up resources
by engaging with staff in one way or another in matters connected with the summons.

69.

Gross recoverable costs under the Debt Recovery budget are 327,806 and add 31 to
the cost per summons. A 3 fixed cost is budgeted for in this category and payable on
making complaint to the justices for each application. This element is therefore justly
claimed in respect of every summons issued and so in the present case can have been
considered reasonably incurred by the Council.

70.

With the account having been settled on receipt of the summons, none of the other
expenditure could have been incurred by the Council in respect of the Appellants
summons because there was no outstanding liability. No resources were therefore called
upon to negotiate, re-schedule or monitor any payment plan and the whole element of
costs relevant to the Debt Recovery budget, except 3 court application fee would be
impermissible.

71.

In broader terms, the majority, if not all (GoA 93-96) of the costs appear questionable
even in those cases where resources are required to re-schedule and set up payment
plans etc.

72.

Additional to the statutory Regulations instalment scheme, regulation 21(5) provides

for an agreement to be made between the billing authority and the liable person either
before or after the annual bill is issued. In such cases, a debtor may, if the agreement is

kept, avoid incurring summons costs. However, this is enabled by, and at the cost of the
Council re-scheduling and monitoring the plan which must exceed any that would have
been incurred from simply allowing the pre-set parameters in its council tax processing
system trigger the appropriate action uninterrupted by recovery staff.
73.

Additional administration costs incurred by the Council due to the interruption of the
automated process cannot lawfully be included in the recoverable costs from which the
average summons is computed because the extra recovery work caused is unrelated to
those cases that result in a summons. Neither can the cost be recovered from customers,
for whom the re-scheduled payments are made (CO-A 101), because the measure is
taken to prevent (or instead of) taking recovery action.

74.

This expenditure must therefore be absorbed by the Council in a way consistent with
other administrative functions processing benefit claims for example. The line of
reasoning that follows removes any ambiguity that the Regulations might allow for this
administration cost to be subsidised by those against whom complaint is made to the
Magistrates court:

75.

in order for a billing authority to recharge costs to the debtor, it is required

first to make complaint to the Magistrates court; but

where applications to the court are not made (by virtue of flexible payment
plans being arranged), potential rechargeable administrative costs in those
cases are rendered unrecoverable from those for whom the concessions are
made

expenditure can therefore only be met by inflating the standard sum or

alternatively having the cost borne by the taxpayer; however

where complaint is made, the amount claimed must not exceed what is
reasonably incurred by the authority in an individual case. Clearly no
expenditure attributable to assisting the debtor avoid recovery is incurred by
the Council which is referable to those debtors summonsed because none of
those for whom concessions are made are proceeded against;

to that end, it would have to be treated as an unavoidable cost in

administering council tax as it would be unlawful to have this element of
expenditure subsidised by inflating the standard costs.

Notwithstanding that there is no legislative provision to recover this cost, the sheer size
of the estimated recoverable component, indicates that it must be funding far more
resource intensive functions than merely an automated process, upon which instituting

the summons relies. Engaging with customers for example, would far outweigh the
demand on resources and it likely that even expenditure in respect of work done after
securing the order is included, as almost a third of a million pounds annually is
accounted for.
76.

Even before the Welfare Reform changes the Council has implied through various
documents, reports etc., that its standard costs include subsidy for bad debt and/or for
administration expenditure attributable to assisting the debtor avoid recovery. Further
details set out in the Appeal Grounds with rationale for why expenditure, even in cases
were payment plans are re-scheduled (pre or post enforcement commencing) can not, if
properly referable to the Regulations, be included in the standard summons costs (GoA
88-96). In that case, it must follow that gross recoverable costs (143,215) under the
Control & Monitoring budget that add 14 to the cost per summons are impermissible
(GoA 97-105).

d) Administration cost of enforcing the order after it is obtained (GoA 106-109)

77.

The judgment in Nicolson v Tottenham Magistrates goes a step further than clarifying
the position regarding recharging expenditure for obtaining the liability order in respect
of the costs which are applied in connection with serving the summons (the second
question of law on which opinion is sought). Paragraph 35 of the judgment states as
follows (emphasis added):
It is clear that there must be a sufficient link between the costs in question and
the process of obtaining the liability order. It would obviously be impermissible
(for example) to include in the costs claimed any element referable to the costs of
executing the order after it was obtained, or to the overall administration of
council tax in the area concerned.

78.

At around 0.3m, the Debt Recovery budget which adds 31 to each summons has
been shown to be disproportionate for processes that are largely automated. The most
feasible explanation would be that expenditure in respect of work done after securing
the order is included (GoA 107-109). This would give credence to Chiltern Councils
claim (see above paragraph 51) that the work to secure payment once having obtained
the liability order is one of the stages from which most costs arise.

Unreasonable steps taken to enforce costs

79.

A three stage test is set out in Nicolson v Tottenham Magistrates (34) to establish
whether the costs order made by magistrates was lawful. For a proper judicial decision
to be made it is established that the Magistrates must be satisfied: (i) that the local
authority has actually incurred those costs; (ii) that the costs in question were incurred
in obtaining the liability order; and (iii) that it was reasonable for the local authority to
incur them. The judgment considers (51) whether the costs claimed have been
"reasonably" incurred, after it is established to the satisfaction of the court that the costs
were incurred and properly referable to the enforcement process. It offers the below
examples to clarify the kind of challenge that it might be the courts duty to consider
(emphasis added):
.....there may be individual cases in which it would be open to the respondent to
argue that the costs were not reasonably incurred, for example, if it was not
reasonable for the local authority to take steps to enforce payment, or if the costs
which were incurred were excessive e.g. if the local authority sent a QC along to
argue a simple point of law in the Magistrates' Court.

80.

In the present case, there was little to convince Magistrates that the Council was
reasonable in its actions, particularly in view of the process relied on to institute the
complaint being entirely automated and the Appellants case required no call on
resources to correspond on matters relating to the debt. It is contended therefore that the
Councils motivation to proceed once the debt had been settled and an amount in excess
of the costs paid, was punitive (see below para 83) and/or to generate additional revenue
and by granting the order, Magistrates erred in law.

Costs set at levels for improper purposes

81.

Evidence has been discovered confirming that the Council has historically manipulated
costs in order to generate income to meet a number of different objectives.
Encouraging behaviour (deterrent / penalty)

82.

It is documented in relation to a review of costs in 2001/02 that prompt payment of

Business Rates could be encouraged as well as generating additional income by
charging in those cases (which had before the review been identical) three times the cost
of a Council Tax summons (GoA 32-34).

83.

It is well established that costs should be awarded as compensation, not as punishment.

In R v Highgate Justices ex parte Petrou [1954] 1 ALL ER 406 it was held that costs
should not exceed the proper costs incurred and should not be a penalty. In that case the
Appellant owned premises which were let to another party for use as a club. The other
party was charged with offences relating to the supply of alcohol and the appellant was
joined to show cause why the club should not be struck off the register. The justices
convicted and fined the other party and ordered him to pay 20 guineas of the
prosecution costs of 21 guineas and also ordered the Appellant to pay 100 costs. On a
motion for an order of certiorari it was held that since the other party had already been
ordered to pay all but one guinea of the prosecution costs, the order against the appellant
was a penalty in the guise of costs.

84.

In the present case the decision by authorities to set the level of costs disproportionately
high was made on the basis that the level of costs (the penalty) might be considered so
small in comparison to the amount owed in Business Rates.
Resolve issues caused by IT system failures

85.

A Cabinet report in 2002/03 identified ways of funding additional resources to ensure a

backlog of work that had arisen due to changes in the IT system were addressed (GoA
35-38). The summons costs were increased by 50% in order to raise additional
revenue to meet funding to pay for additional staff.

86.

In 2013 the High Court ruled against Barnet Borough Council budgeting for a surplus of
income from residential parking schemes to be used to meet other transport expenditure.
In Attfield v the London Borough of Barnet [2013] EWHC 2089 (Admin), it was held
that a local authority must not attempt to raise revenue where there is no clear statutory
power to do so. In the present case, the statutory power expressly limits costs that may
be claimed to the expenditure incurred by the Council in connection with instituting the
complaint.

87.

The decision to increase summons costs did not arise because of an increase in the cost
of instituting the complaint, rather for the clear intention of funding additional resources
to overcome the backlog of work that had arisen in the administration of Council Tax,
Business Rates and Housing Benefit due to delays in implementing a new IT system.
The Council had therefore acted for an improper purpose namely to raise revenue as it
clearly intended to use the surplus to defray other administration expenditure and reduce
the need to meet the cost, by for example increasing council tax, using reserves or

cutting down on waste. This purpose was not authorised under the Regulations and
therefore the decision was unlawful.
Budget savings and alternative to charging for non statutory services
88.

The Council forecasted that it could raise an additional 0.752 million in costs income
over a four year period by increasing the overall court costs and front loading all the
charge in respect of instituting the complaint (see above para 23). This was proposed as
one of a number of possible ways it could save or increase income to meet its 29.7
million target set out in the Councils 2011/12 draft budget and medium term financial
plan for the period 2011-2015. Increasing summons costs was the preferred measure
in response to public consultation over alternative proposals to introduce a charge for
replacement bins or garden waste collections.

89.

Clearly increasing costs in order to plug a gap in its finances had no legal basis, just like
there was no statutory power to set them disproportionately high for the purposes of
offsetting expenditure for waste services. The public were able to influence the level of
court costs, and probably elected the increase to avoid paying additional for services
(CO-A 120-131). The Council had acted for an improper purpose by increasing
summons costs on account of the majority of respondents preferring to raise additional
money this way over introducing charges for waste services.

90.

It was wrong in law to increase costs based on criteria other than by reference to an
increase in the Councils incurred expenditure. Though indicative of the Council
functioning democratically, the publics preference was not, in the context of the law, a
relevant factor to be considered. The statutory power which provides for reasonably
incurred costs, by definition, renders the determining of them by a democratic process
unlawful.
Set targets for court costs income

91.

The Council has a budgeted income stream for court costs which is evident from
published reports showing outturn variances for this income. A report of the Audit
Committee (Final Accounts 2004/05) compares the outturn with the budget to show
major variations. A surplus of 0.125 million to its summons costs income target is
recorded at Appendix 2 of the report of 28.7.05 (page 15) as follows (emphasis added):
Finance Restructure resulted in vacancy savings (597K), additional benefit
subsidy income arising from changes in subsidy rules and grant received on

benefits overpayments (1,004K) Revenues and Benefits also exceeded their

income target in respect of Council Tax and NNDR summons income (125K)
and housing benefit overpayments (116K)
92.

The provision of a budgeted income stream has presented a means for the Council to
influence its financial position. That is evident with Revenues & Benefits exceeding its
summons income target, leaving a 125k surplus, for example to off-set overspending in
other areas or transfer to reserves. The system is clearly open to abuse with income
targets unquestionably creating a perverse incentive to summons.

93.

Costs were set at a level such that a significant surplus was achievable, which in
2004/05 amounted to 125k. The Council had therefore raised revenue for an improper
purpose, namely to prop up other budgets, and in doing so acted unlawfully (see above
paras 86-87).

CONCLUSION
94.

The Magistrates had no information before them with which to reach a proper judicial
determination of whether the costs claimed represented costs reasonably incurred by the
Council to obtain the liability order. The ruling in Nicolson v Tottenham Magistrates is
unambiguous that the decision to grant an order for costs in those circumstances is
unlawful. It is therefore inconceivable what line of defence could be mounted against an
appeal asserting that the order for costs had been unlawful in the present case.

95.

It follows with the Councils inability to provide relevant information to support the
costs claimed to obtain a liability order, it would be unable to verify that the costs
claimed were properly referable to the enforcement process. That is to say it would be
unable to verify that the sum, which it claims identically to obtain the order, represents
exclusively the expenditure incurred by the Council in connection with instituting the
complaint.

96.

It is nevertheless contested that enforcement should have never proceeded to the stage
where the Council applied for a liability order as to do so once an amount has been paid
or tendered would be in breach of the law which states that the authority shall accept
the amount and the application shall not be proceeded with. However, the fact that the
Council did proceed does not render the appeal invalid as the Magistrates actions and
the Councils approach to supporting its costs raises matters of general public
importance.

Case for impermissible costs (GoA 113-120)

97.

It is established that the Council sets its standard costs at a level to ensure that no cost of
recovery is borne by the taxpayer in priority to complying with the Regulations that
restrict the amount that can be recharged in costs to the court application. It is therefore
contended that an element of the standard 70 costs can not be compliant with the
Regulations, based as they are on the premise that any expenditure considered
attributable to recovery and enforcement activity (however tenuously linked) is
recoverable by recharging it to the defendants through costs claimed in an application
for a Liability Order.

98.

The breakdown of costs which the Council has undertaken to keep under review
provides evidence that in the circumstances relating to this case the vast majority of
expenditure it claimed was not incurred so contended that the Magistrates granted costs
in a sum outside that which the law provides. Moreover it is contended that under any
circumstances where the Council makes use of the court (whether to obtain an order, or
merely institute the process) the costs detailed in its breakdown are not properly
referable to regulation 34 of the Regulations.

99.

For the reasons set out above the Court is respectfully invited to reverse the decision of
the magistrates' court and quash the liability order.

Dated this

day of

2013