IN THE FIRST-TIER TRIBUNAL GENERAL REGULATORY CHAMBER (INFORMATION RIGHTS)

APPEAL: EA/2013/0285

BETWEEN:

XXXXXXXX Appellant and THE INFORMATION COMMISSIONER Respondent

APPELLANTS GROUNDS OF APPEAL

Index
Introduction Background Grounds of Appeal i) legal requirement to hold information ii) all relevant expenditure will be recorded iii) revised information submitted to Case Officer iv) claim to be unaware of guidance The desired outcome 1 1 2 3 8 9 10 11

Introduction 1. This is an appeal under section 57 of the Freedom of Information Act 2000 against a Decision Notice FS50505226 issued by the Commissioner on 16 December 2013. These grounds of appeal are served together with the appellants notice of appeal, in accordance with rule 22 of the Tribunal Procedure (First-tier) (General Regulatory Chamber) Rules 2009.

Background 2. The appeal concerns a request for information made to North East Lincolnshire Council. The appellant requested the councils incurred costs in respect of issuing a Council Tax summons in specific circumstances where liability is settled after the issue of a summons but before the liability order is granted by the court. It should be noted that if the outstanding balance and an amount equal to reasonable costs incurred is paid or tendered to the authority, the application shall not be proceeded with.

3.

Costs specific to the request are provided for in law under Regulation 34(5) of the Council Tax (Administration and Enforcement) Regulations 1992 (SI 1992/613), to which will be referred in detail later. Under paragraph (5)(b), expenditure which the council may lawfully claim is described as costs reasonably incurred and therefore must be a legal requirement for the council to hold the information.

4.

Costs described under Regulation 34(5)(b), where there are no Court proceedings, are distinguished in law from those under 34(7)(b), which are described as costs reasonably incurred by the applicant in obtaining the order. The request was made to the council in the following terms:

With reference to regulation 34(5) of SI 1992/613 In circumstances where payment is made in accordance with (5)(a) and (b) on the day of issue, What cost would the council have incurred in respect of the issue of that summons. 1

Either; in actual pounds and pence -or as percentage of overall costs incurred in respect of an application where the liability order is obtained Note: The authority will have accepted payment and the application halted, therefore no costs can be included in respect of agreeing or setting-up payment arrangements, monitoring payment arrangements, telephone communications or correspondence entered into outside those automatically triggered. 5. The Commissioner considered there was no evidence that would justify refusing to accept the councils position that it did not hold any information relevant to the request. His reasons for reaching this decision are set out at 10-19 of the Decision Notice.

Grounds of Appeal 6. The grounds are as follows:

i) business/legal requirement existing for the council to hold the information ii) on the balance of probabilities, the council would have all relevant expenditure and data on record to facilitate the disclosure of the requested information. Note: Pursuant to s84 FOIA (Interpretation), information means information recorded in any form. iii) revised information submitted to the Case Officer two months prior to the production of the Decision Notice was evidently not taken into account. iv) the Authoritys claim that it was unaware of government guidance which expected Councils to be able to support costs are no more than that reasonably incurred in any individual case.

i) Legal requirement to hold information 7. The issues in this appeal arise from the provisions of the Council Tax (Administration and Enforcement) Regulations 1992 ("the Regulations"). Part VI deals with the enforcement of persons defaulting on Council Tax under Part V (Billing), which requires that liability be paid in 10 instalments in accordance with Regulation 21 and Part I of Schedule 1 to the Regulations.

8.

Under Part VI (Regulation 34), a liability order may be applied for in circumstances where for example a debtor fails to pay any instalments due. Under Part VI, Regulation 33, a liability order cannot be applied for unless a reminder notice under Regulation 23(1) or a final notice, showing the amount for which the application is to be made, has been served. In circumstances where a debtor fails to pay any instalments due within seven days of the issue of a reminder notice, a final notice need not be served.

9.

Once a demand notice, that is, the Council Tax bill, has been issued and one or more of the statutory scheme instalments have become due and less than the full amount(s) has been paid, the billing authority must issue a reminder notice to the taxpayer giving seven days for the outstanding instalment(s) to be paid.

10.

If the outstanding instalment(s) is not paid within 14 days from the issue of the reminder notice the total balance for the year becomes payable immediately in accordance with Regulation 23(3) which provides as follows:

(3) If, within the period of 7 days beginning with the day on which a reminder notice is issued, the liable person fails to pay any instalments which are or will become due before the expiry of that period, the unpaid balance of the estimated amount shall become payable by him at the expiry of a further period of 7 days beginning with the day of the failure.

11.

Part VI, Regulation 34(1), provides that if an amount has fallen due under 23(3) Part V of the Regulations and remains unpaid in whole or in part, then the billing authority may apply to a magistrates court under the provision of regulation 34(2) for a summons to be issued, requiring the debtor to appear before the court to show why the sum stated had not been paid. 3

12.

Regulation 34 further provides that if, after the summons has been issued, an amount is paid, equal to the unpaid balance for the year plus an amount in respect of the costs incurred by the authority, then the authority must accept the payment and stop the proceedings. The relevant part being paragraph 5 which follows:

(5) If, after a summons has been issued in accordance with paragraph (2) but before the application is heard, there is paid or tendered to the authority an amount equal to the aggregate of (a) the sum specified in the summons as the sum outstanding or so much of it as remains outstanding (as the case may be); and (b) a sum of an amount equal to the costs reasonably incurred by the authority in connection with the application up to the time of the payment or tender, the authority shall accept the amount and the application shall not be proceeded with. (6)....

13.

The court will grant a Liability Order if the debtor cannot show good reason why the sum stated on the summons has not been paid, or, in circumstances where the debtor fails to appear.

14.

A Liability Order gives billing authorities powers to enforce payment through attachment of earnings, bailiffs etc and is sought through the Magistrates Court solely for this purpose. It may not for example exploit proceedings by setting costs at a level which acts as a threat or to profit from imposing costs.

15.

Billing authorities may only claim costs they incur in connection with issuing summonses. It would be unlawful to profit or add a deterrent element, as there is nothing in legislation to support setting the level of costs on these bases. Despite this, North East Lincolnshire Council (among others) set summons costs at a level intended to deter late payment. The Ministry of Justice itself has displayed a fundamental misunderstanding of the law by stating The threat of issuing a 4

summons, allied to the costs which will be applied for acts as an incentive for people to meet their liability. Until it is legislated that a penalty may be imposed, the law only provides for the billing authority to claim costs which have been reasonably incurred.

16.

The billing authority may not itself add an amount to the outstanding liability in respect of instigating proceedings, yet states that the total amount outstanding for which the defendant is liable, includes court summons costs of 70. Adding a standard sum pre-empts the bench awarding the amount applied for as the complaint at that stage has not been heard. The power to award costs lies with the Court on hearing the complaint. Section 64 of the Magistrates Courts Act 1980, provides so far as is relevant, as follows:

"(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) .... as it thinks just and reasonable... (2) The amount of any sum ordered to be paid under subsection (1) above shall be specified in the order, or order of dismissal..... 17. More crucially, the standard 70 for a summons is applied to the debtors account whether the liability is settled on the issue of a summons (no court proceedings) or where the application is made for a Liability Order. A distinction is made between summons costs incurred in respect of instigating the complaint and those including additional costs of bringing proceedings before the court. Regulation 34 at paragraph 7(b) distinguishes those from the aforementioned costs at paragraph 5(b), as follows: (7) An order made pursuant to paragraph (6) shall be made in respect of an amount equal to the aggregate of (a) the sum payable, and

(b) a sum of an amount equal to the costs reasonably incurred by the applicant in obtaining the order.

18.

A 1993 publication by the DoE, (Council tax practice note 9: Recovery and Enforcement) states under heading liability orders that the amount claimed by way of costs in any individual case should be no more than that reasonably incurred by the billing authority. Paragraph 3.18 of the DoE document said, so far as relevant:

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.

This was reiterated in a recent publication by the Department of Communities and Local Government on good practice in the collection of Council Tax arrears:

"3.4 Local Authorities are reminded that they are only permitted to charge reasonable costs for the court summons and liability order. In the interests of transparency, Local Authorities should be able to provide a breakdown, on request, showing how these costs are calculated. While it is likely that authorities will have discussed costs with the Clerk to Justices it should be recognised that the Court may wish to be satisfied that the amount claimed by way of costs in any individual case is no more than that reasonably incurred by the authority."

19.

Given that the definition under the Regulations is costs reasonably incurred it is clear that to comply with the law, billing authorities have a legal obligation to be able to justify the level of costs they ask for in the Magistrates Court. The law is also clear that when liability is settled before the complaint is heard, the lesser costs incurred in such cases must be known. DCLG/DoE guidance reinforces this where it states that in any individual case it must be able to provide a breakdown of the costs on request. The guidance together with the Regulations makes for a

strong case to argue that there is a business need and legal obligation for the billing authority to hold a breakdown of the costs requested.

20.

A case to argue that a billing authority would be able to separate costs in respect of instituting the application (summons) as opposed to the total is made in the Regulations as amended and applying to Welsh billing authorities.

21.

A legislative provision for capping costs is set out in the Council Tax and NonDomestic Rating (Amendment) (Wales) Regulations 2011. Though not applying in England, where there is no cap, they nevertheless amend the Regulations governing England and Wales. Rather than the cap itself which applies only in Wales, attention here is on the references made to paragraphs (7)(b) and (8) to regulation 34. Regulation 3 of the 2011 Welsh amendment provides so far as is relevant, as follows: 3. (1) The Council Tax (Administration and Enforcement) Regulations 1992 are amended as follows. (2) In regulation 34 (application for liability order) (a) in paragraph (7)(b), after the order insert (which costs, including those of instituting the application under paragraph (2), are not to exceed the prescribed amount of 70); (b) in paragraph (8), after the application insert (which costs, including those of instituting the application under paragraph (2), are not to exceed the prescribed amount of 70);

Clearly, cases proceeding to court and incurring costs under paragraph (7)(b) or (8) can include those of instituting the application. It cannot mean conversely that cases which are instituted but not prosecuted can include costs of making the application and obtaining the order. It is explicit in its references that those cases for which liability is settled prior to a hearing will only incur costs of instituting the application. Parliament must have intended that the regulations were formulated so as to provide a person issued a summons the opportunity to reduce the otherwise higher costs by settling liability before the hearing date.

ii) All relevant expenditure will be recorded

22.

Irrespective of the legal requirement, expenditure is held/recorded within its budgets etc., as too is data relating to the number of summonsed accounts which determines costs per individual.

23.

Costs under regulation 34(5) are raised in respect of instituting the application prior to any hearing and paid without an order from the court if settled before the hearing. Whereas under regulation 34(7) the court grants an order on the application being made, so include costs of bringing proceedings before the court. Individual costs raised under regulation 34(5) derive from the billing authoritys aggregate, split between however many defendants appear on the complaint list. As aforementioned, the data is held by the billing authority, which for example, in 2011/12 averaged 970 for each of the 12 applications made that year.

24.

The process is controlled automatically in accordance with parameters set in the Council Tax software package. The system compiles particulars of all account holders requiring issue of a summons. The complaint list is generated from the individual entries contained in the database (including the amount outstanding and costs to be applied for at the hearing) and delivered to the court where it is reviewed by a legal adviser who issues the summonses.

25.

The fee payable per entry on the complaint list to the Magistrates Court accounts for 3. This element of the summons costs has been constant since the provision of the Magistrates' Courts Fees Order 2005, which came into force on 10 January 2006. The fee in respect of instigating the complaint has undergone no further changes to the level by any subsequent amendments to the Court Fees Order.

26.

There is no provision for the billing authority to impose costs for anything other than covering reasonably incurred expenditure, therefore in the circumstances of the request, the task to determine this would be minimal. Given that the billing authority will have accepted payment and the application halted, no consideration of expenditure is needed in respect of agreeing, setting-up or monitoring payment arrangements, telephone communications or correspondence entered into outside those automatically triggered. 8

iii) Revised information submitted to Case Officer 27. Additional evidence was submitted to the Commissioner on 18 October 2013 relating to an amended publication of the Department of Communities and Local Government on "Guidance to local councils on good practice in the collection of Council Tax arrears".

28.

The complaint sent to the Commissioner on 26 June 2013, quoted paragraph 3.4 of that publication. The guidance, before it was amended on or around the 29 July, 2013 stated as follows:

"3.4 Local Authorities are reminded that they are only permitted to charge reasonable costs for the court summons and liability order. In the interests of transparency, Local Authorities should be able to provide a breakdown, on request, showing how these costs are calculated."

29.

In the meantime, the government had discovered it had mistakenly placed a passage relevant to paragraph 3.4 in paragraph 4.6 of the publication which related to bailiff fees. The relevant passage is as follows:

While 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.

30.

The corrected guidance gave increased weight to arguments already made for a business need existing for the requested information to be held. It was therefore of central importance that the revised guide was considered by the case officer. As such an email sent on 18 October 2013 asked that paragraph 3.4 of the amended document (which had been attached) be noted. Thus amended, paragraph 3.4 reads as in the second quote at 18 of these grounds of appeal:

31.

A second document, sent as evidence, accompanied the amended guidance attached in the same email of 18 October 2013. It is noted that at 12 of the Decision Notice, the letter to Magistrates Court (second document) was 9

acknowledged. The case officer must therefore have been in receipt of the amended guidance before preparing the 16 December 2013 decision. However, the less relevant, unamended version of the government guidance (paragraph 3.4) had been quoted and presumably considered as evidence at 11 of the Decision Notice.

32.

Had the amended guidance been considered as evidence, there would have been greater recognition of the fact that the government expect the amount claimed by way of costs in any individual case (the subject of the request) to be no more than that reasonably incurred by the authority. Therefore, if the amended guidance had been taken into account it would have been clear that the billing authority is required to hold the requested information.

iv) Authoritys claim to be unaware of government guidance

33.

The council explained (see 16 of the Decision Notice) that at the time of responding to the request and the subsequent internal review response, the guidance had not been published, as it was published on 17 June 2013. It is noted that North East Lincolnshire Council had been aware about it being its obligation to be able to support costs in any individual case, as long ago as 9 March 2012. The relevant paragraph appearing in the 1993 DoE publication referred to in 18 of this appeal was emailed to the council, so far as is relevant, as follows:

On the other point that the council is not required to justify the amount charged to each individual; this is at odds with the 1993 Department of the Environment Council Tax Practice Note 9, which states:

while 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.

North East Lincolnshire Council had also been notified about the amended government guidance on 3 August 2013, and also, where the guidance and the DoE publication was dealt with at paragraph 3(d) of the representations made on

10

the draft case (appeal to the High Court), which was served on the Council, 19 August 2013.

The desired outcome

34.

Contrary to that detailed at 14 of the Decision Notice, the grounds of appeal have provided sufficient argument for why the Council do have a legal obligation to hold the information. It has also been contended that on the balance of probabilities, regardless of whether the council has a legal obligation, it does hold all relevant expenditure and data on record to facilitate the disclosure of the requested information. It is therefore reasonable to expect the Commissioners Decision Notice is revisited and a decision found in favour of the appellant so that the Commissioner requires that the necessary steps are taken to ensure compliance with the legislation.

35.

It is noted the Commissioner comments at 20 of the Decision Notice with regards to the Council publishing a document (since created) which details a breakdown of the reasonable costs incurred for the court summons and liability order. The document does not provide an appropriate disclosure of the specific information requested and so despite its release, this appeal remains valid.

30 December 2013

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