Pub owner loses appeal over liability order for Business Development District levy

Omitting information from a Business Improvement District (BID) levy demand in error did not in itself invalidate the demand notice, the Divisional Court has found.

In McGrath v London Borough of Camden [2020] EWHC 369 (Admin) Lord Justice Davis and Mr Justice Holgate rejected an application by a pub landlord that he was not liable to pay a levy for the Hampstead Village BID.

James McGrath, then proprietor of the King William IV pub in Hampstead, appealed against the decision of District Judge Julia Newton at Highbury Magistrates' Court to impose a liability order for the £642 BID levy together with costs assessed at £6,264.25.

The BID was set up in 2016 and for five years it can impose a levy of 1.5% of rateable value to pay for various amenities in the area concerned.

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Mr McGrath would be liable to pay the BID levy to the London Borough of Camden so long as a statutory demand notice was served.

Notices were sent but he argued that when the demand notice was served Camden should also have supplied information on the revenue from the BID levy due in 2017-18 financial year, how it had spent the money the previous year and how it was intended to be spent in future.

Camden did not do this and “the main issue for the court is whether the legal effect of that failure was that the BID levy specified in the demand notice was not ‘payable' by the appellant”, Holgate J said.

The council argued that legislation did not insist on such information being provided in the demand notice itself so long as it was available when the notice was sent.

It said an insert with the demand notice which referred to information on the website of the Hampstead Village BID was sufficient and, in the alternative, its failure was a ‘mistake’ within paragraph 4(1)(b) of the 2004 Regulations, so that the notice served on Mr McGrath applied “as if the notice were valid”.

Holgate J said the legislation did not qualify ‘mistake’ and the district judge found no evidence of any deliberate attempt by Camden to breach regulations. He said Mr McGrath’s case “must be rejected”.

Lord Justice Davis agreed and added: “It is plain enough that the introduction of the BID in Hampstead Village has not proved popular in a number of quarters; and the appellant is obviously one of those aggrieved at its introduction.

“But it is not for the court to pronounce on the merits (or otherwise) of the scheme; and these proceedings cannot be used as a proxy for criticising it.”

Mark Smulian

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