Judge concerned at council tax enforcement and Valuation Tribunal appeals uncertainty

A High Court judge has expressed concern at “the substantial degree of uncertainty that exists” in relation to how the courts, both magistrates and the bankruptcy county court, should deal with the enforcement of domestic council tax liability orders in the context of the availability of the remedy by way of appeal to the Valuation Tribunal.

Robin Hollington QC, sitting as a Deputy Judge of the Chancery Division, said: “This is after all a very important field for councils and council tax payers alike where certainty is desirable.”

The Deputy Judge made his comments in a postcript to the case of Okon v London Borough Of Lewisham [2016] EWHC 864 (Ch), where he allowed the applicant’s appeal.

The council argues that the applicant, who owns three properties, owed £14,097.59 in unpaid council tax. Her case is that she owes nothing, because the properties were tenanted, so that the tenants were liable for the council tax, and than in any event one of the properties had ceased to be a separately rateable property.

A district judge had declined to set aside a bankruptcy order against the applicant on the ground that there was no arguable basis upon which the making of a bankruptcy order could be opposed. Ms Okon applied for permission to appeal.

Deputy Judge Hollington said: “In my judgment, the issue before the Judge at the hearing on 9 June 2015 was whether the Applicant's intended appeal to the valuation tribunal was bona fide and substantial and whether in the exercise of her discretion she ought to adjourn the bankruptcy petition in order to await the outcome of that appeal.

“I am satisfied that the Judge did not approach the matter on that basis. She did not realise that she should have been focussing on the appeal to the Valuation Tribunal rather than the application to set aside to the magistrates court and she never asked herself the question whether the intended appeal to the Valuation Tribunal was bona fide and why it had not been lodged yet.”

The judge said the right course in the case was as follows: “Provided the Applicant undertakes to the court (1) to prosecute with all reasonable expedition and diligence that appeal, together with any application it needs to make to the Valuation Agency in respect of the registration of 18A Hillbrow Road as a rateable property, and (2) not, without the prior written consent of the Respondent or the leave of the court, to sell or otherwise dispose of any interest in any of the properties (otherwise than by way of arm's length short term lettings which do not confer security of tenure), I propose to allow the appeal, set aside the orders dated 2nd and 9 June 2015, and adjourn the bankruptcy petition.”

In the postscript expressing his concern at the uncertainty over the right approach to take, Deputy Judge Hollington said the cases of Wiltshire Council v. Piggin [2014] EWHC 4386 (Admin) and Yang v. The Official Receiver. Manchester City Council [2013] EWHC 3577 (Ch) deserved to be more widely known than they appeared to be, “although they are only first instance decisions and the field would obviously benefit from attention if the opportunity arises by the Court of Appeal”.

He added: “In particular, the Administration Centre for Bexley/Bromley/Greenwich Magistrates Court should consider whether its advice to applicants who seek to set aside liability orders should be modified to include reference to the Piggin case and the need to pursue remedies to the Valuation Tribunal and Valuation Agency.

“I would, however, question whether the court should not also be pointing litigants in person to bodies which offer free legal advice, so that the court is not seen to be giving legal advice.”