CO/5112/2015 hearing for Judgment/costs 7 March 2016

“Reasonable Costs - The attached judgement has been shared with the Institute by East Northampton DC. For the record, costs of £10,000 were awarded against Mr Williams.”

Introduction

1. These proceedings are an appeal by way of Case Stated arising from a decision of the Corby Magistrates Court on 13 July 2015 whereby the Appellant was ordered to meet a council tax liability of £975.26 together with an order for costs of £75.
2. The Case Stated by the Corby Magistrates’ Court (“the Magistrates’ Court”) identifies three questions for determination by this Court. These questions are in the following terms:

1. Were we correct to find that the application for the liability order was valid when the summons included a request for costs?
2. Were we correct in finding the Appellant liable on the basis of the evidence we heard and the certificate produced by the council?
3. Were we right to conclude the costs reasonably incurred in this case amounted to £75?

Background

1. I will return to the detail of the Case Stated in due course. Before that, it is necessary to refer (albeit briefly) to the procedural history of these proceedings. That is because there were a number of matters which the Appellant (who acted in person at this appeal) sought to raise, whether in his skeleton argument or orally at the hearing, which were outside the scope of the issues raised by the Case Stated.
2. Originally the proceedings were issued against the Magistrates’ Court but, on 30 October 2015, this Court (Ouseley J) ordered the Appellant to amend and serve the Appellant’s Notice on the present Respondent, namely the Council. This the Appellant duly did.
3. On 23 November 2015 this Court (Ouseley J) gave directions on paper refusing the application for an order that the Magistrates’ Court be made the sole respondent. The Court also refused both a production order in respect of notes of evidence of the hearing and a protective costs order. In the course of his reasoning, Ouseley J observed that if the Appellant had wanted to challenge the facts as found in the Case Stated he would have to allege that there was no evidence to support them or that those findings of fact were irrational. The Case Stated did not do so and, I observe, the Appellant never subsequently sought to amend his appeal in these proceedings in order to do so. In rejecting the application for the notes of evidence, Ouseley J made clear that the questions in the Case Stated do not raise for decision whether they had evidence for their findings or that the findings were irrational.
4. Finally, on 25 January 2016, this Court (Ouseley J) refused the Appellant’s application for permission to convert the existing Case Stated appeal into a judicial review claim and refused the application for permission to apply for judicial review on further grounds. He ordered that the only case to proceed should be the existing appeal by way of Case Stated. In respect of the complaints which the Appellant sought to raise about the calculation of the costs by the Magistrates Court, Ouseley J said that if the Appellant wished to raise new points not presently included in the Case Stated it would be for the Judge at that appeal to determine whether the Case Stated should be amended.
5. At the hearing before me, the Appellant contended that the recitation of the evidence in the Case Stated was materially inaccurate. He pointed to differences between the draft of the Case Stated (on which he had the prior opportunity to comment) and the final version of the Case Stated (which he did not see before its issue). He said that there were deliberate changes to the record of the evidence pursuant to which the Respondent had sought to improve its position in respect of this appeal. He accepted that the law was such that recourse could not be had to the draft Case Stated unless deceit or bad faith was alleged. At one stage he was minded to so allege but he did not pursue that contention, merely submitting that the changes were “inexplicable”. I concluded that this submission, namely that the Case Stated incorrectly recited the evidence or facts, was outside the scope of the present appeal and, in the absence of any notified application to amend, or broaden, the scope of matters for me to determine, considered that I could not deal with it. The Appellant expressly said he did not want to make such an application if it resulted in an adjournment of this hearing (as such an application would be bound to have done) and, in those circumstances, he did not press the matter further.
6. The Appellant’s skeleton argument also persisted with a contention which related to the signature appearing on the summons. This was a matter which Ouseley J had already ruled was outside the ambit of the Case Stated and in respect of which he also refused permission for the point to be advanced by way of judicial review. I did not permit the Appellant to pursue this point either.
7. Finally, the parties were also at odds over the scope of Question 3 in the Case Stated. The Appellant considered that this question permitted him, on this appeal, to raise any matter which went to a determination as to whether the costs reasonably incurred amounted to £75. Thus, so he said, he could argue points such as the length of time it took for a council employee to drive from the offices to court, even though no such points were taken by him in the Magistrates’ Court and the Case Stated does not address them either. In my judgment, Question 3 is concerned with the question of whether, in law, the costs reasonably incurred in this case amounted to £75 having regard to the three points which the Appellant did take before the Magistrates’ Court and which are specifically addressed in the Case Stated. These are (a) the relevant proportion of the ICT costs; (b) the Chip & Pin Costs; and (c) the pension deficit costs.

The Regulations

1. The original proceedings concerned the Respondent’s application to the Magistrates’ Court for a liability order against the Appellant in respect of unpaid Council Tax. Such proceedings are governed by the Council Tax (Administration and Enforcement) Regulations 1992/613 (“the Regulations”). Regulation 34 materially provides as follows:

“34.— Application for liability order

(1) If an amount which has fallen due under paragraph (3) or (4) of regulation 23 (including those paragraphs as applied as mentioned in regulation 28A(2)) is wholly or partly unpaid, or (in a case where a final notice is required under regulation 33) the amount stated in the final notice is wholly or partly unpaid at the expiry of the period of 7 days beginning with the day on which the notice was issued, the billing authority may, in accordance with paragraph (2), apply to a magistrates' court for an order against the person by whom it is payable.

(2) The application is to be instituted by making complaint to a justice of the peace, and requesting the issue of a summons directed to that person to appear before the court to show why he has not paid the sum which is outstanding.

(3) Section 127(1) of the Magistrates' Courts Act 1980 does not apply to such an application; but no application may be instituted in respect of a sum after the period of six years beginning with the day on which it became due under Part V.

(4) A warrant shall not be issued under section 55(2) of the Magistrates' Courts Act 1980 in any proceedings under this regulation.

(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) The court shall make the order if it is satisfied that the sum has become payable by the defendant and has not been paid.

(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.

(8) Where the sum payable is paid after a liability order has been applied for under paragraph (2) but before it is made, the court shall nonetheless (if so requested by the billing authority) make the order in respect of a sum of an amount equal to the costs reasonably incurred by the authority in making the application.”

Question 1

“Were we correct to find that the application for the liability order was valid when the summons included a request for costs?”

1. As provided for in Regulation 34(2) an application for a liability order is to be instituted by making complaint to a justice of the peace requesting the issue of a summons directed to the person to appear before the court.
2. In this case, the Respondent issued a complaint on or around 15 July 2015, in the following material terms:

“The complaint of the Billing Authority BY L HOGSTON, BENEFIT MANAGER of East Northamptonshire District Council who states that the several persons given in the Schedule below are persons properly liable to pay Council Tax in the sum(s) opposite to their respective names and who have not paid the sum(s) set out or any part thereof.”

1. The Schedule described in the complaint is a computer-generated print out and, on this occasion, included the name of the Appellant. Against his name is described the sum payable, namely £975.26, and, separately, costs of £75. The aggregate figure of £1,050.26 is also given. The Appellant sought to take issue with the legal validity of the complaint but that was outside the scope of this appeal.
2. Following the issue of the complaint, a summons was issued by the Magistrates’ Court. This is as contemplated by Regulation 34(2). In this case, and doubtless many others like it, the summons contains the information which is necessary to inform the recipient of the nature of the complaint. The summons is headed “Summons for Non-Payment of Council Tax”. Below the Appellant’s name and address it is stated:

“Complaint this day has been made to me by the billing authority for the District of East Northamptonshire, that you, being liable to a Council Tax, have not paid the tax due below. You are hereby summoned to appear before the Magistrates’ Court to show cause why you have not paid the said sum.”

1. Details of the forthcoming hearing were given. Then the summons records the following:

“Council Tax                                       £   975.26

Summons Costs                                  £     75.00

TOTAL NOW DUE               £1,050.26

…

If the amount of the costs together with the Council Tax claimed is paid to the East Northamptonshire Council…before the date of the hearing all further proceedings will be stopped.”

1. The next page contains a statement as follows:

“STATEMENT OF COUNCIL TAX DUE UNDER THIS SUMMONS

1. The Appellant’s submission is that the summons served on him is an abuse of process by reason of its inclusion of an amount for costs within it. He contended that the Regulations make no provision for the summons to include an amount by way of costs and that costs could only become due once, and if, a liability order were made. It was therefore wrong to imply on the face of the summons that the recipient was already liable for such costs. He pointed out that the Regulations were only concerned with a liability order, not costs, and that until a liability order had been made, the claim for costs was not justiciable. He relied on R (on the application of Mohammed) v London Borough of Southwark [2009] EWHC 311 (Admin) in which Geraldine Andrews QC (as she then was) (sitting as a Judge of the High Court) made clear that a liability order can only be sought under Regulation 34(1) for an amount which had fallen due under Regulation 23(3) or (4). He also relied on R (on the application of Tull) v Camberwell Green Magistrates Court [2004] EWHC 2780 (Admin) in which Mitting J said that Regulation 34(2) “requires” an application for a liability order to be instituted. The Appellant emphasised the mandatory nature of the requirement.
2. The Appellant also contended that the inclusion of any element of costs on the face of the summons was an abuse because it was an unlawful demand for money which the Respondent had no right to make at that time. He contended that the costs were not due and owing at the date of the summons. He pointed out that the complaint on which the summons was based made no reference to the costs of £75. He submitted that it was an unfair manipulation of the Court process to include an amount for costs on the face of the summons, particularly when the only real summons cost was £3. He suggested that the recipient of a summons written in these terms would be misled into believing that the costs of £75 were fixed and could not be debated or challenged. That was, of course, not the case.
3. The Respondent did not disagree with the proposition that the Regulations were directed to the non payment of the Council Tax and that the amount which should appear on the summons should be the amount of the Council Tax which had not been paid. However, the Respondent submitted that the Regulations also address the matter of costs. Regulation 34(5) enables disposal of the application if the sum specified in the summons is paid together with a sum in respect of costs of the application. The summons is therefore a convenient document in which to notify a recipient of the amount claimed for such costs. If the matter is not disposed of by prior payment, the Magistrates’ Court is empowered by Regulation 35(7) to include within the order it makes under Regulation 35(6) an amount in respect of costs reasonably incurred in obtaining the order. Those would (or could) be greater than the costs of the application.
4. The Respondent’s further submission was that the summons was not invalidated by virtue of the inclusion of additional information relating to costs. The summons contained what it needed to and there was no prohibition against including additional information.
5. The Respondent also contended that the summons clearly differentiated between the outstanding Council Tax on the one hand and the costs on the other. It was therefore clear that the subject matter of the summons related to the former not the latter. It was also clear that the claim for £75 was in respect of costs which had already been incurred and did not therefore relate to such additional and future costs as may be incurred by a contested hearing.
6. Finally, the Respondent contended that the demand for costs was not unlawful because it was the sum which was (properly) claimable in the event that a liability order was made, as it was in this case.

Decision

1. Primary legislation in respect of Council Tax is contained in paragraph 3 of Schedule 4 of the Local Government Finance Act 1992 which sets out that Regulations may provide for liability orders and applicable costs. As I have said, the Regulations themselves are the Council Tax (Administrative and Enforcement) Regulations 1992.
2. Regulation 23 is in the following terms:

“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 (or, as the case may be, the chargeable amount) shall become payable by him at the expiry of a further period of 7 days beginning with the day of the failure.”

1. It is quite clear that the “amount” referred to in Regulation 23 is the amount of Council Tax which has fallen due. Costs are not mentioned in Regulation 23. It therefore follows that the “amount” referred to in Regulation 34(1) is also the Council Tax and not the costs reasonably incurred by the authority in connection with the application for the liability order. Similarly, the “sum which is outstanding” in Regulation 34(2) is limited to the Council Tax and has nothing whatever to do with the costs.
2. Consistent with the Regulations, the complaint which was drawn up in this case is as to the failure to pay Council Tax. Quite rightly, it makes no reference to the costs since the non payment of such costs cannot be a basis for a complaint. According to the schedule forming part of the complaint the sum payable is the sum in respect of Council Tax, not the costs.
3. Article 98 of the Magistrates Court Rules deals with the information which should appear on the face of a summons. It provides:

“A summons shall state shortly the matter of the information or complaint and shall state the time and place at which the defendant is required by the summons to appear”.

1. There can be no doubt that this summons complies with that rule in that it addresses the subject matter of the complaint and provides the other details required in Article 98. The question for me is whether the summons is an abuse of process or otherwise invalid because it also contains information about the level of costs claimed by the Respondent. There is certainly nothing in the Magistrates Court Rules which precludes additional information from appearing on the face of the summons. The Regulations themselves are also silent on the question of whether costs may or may not appear on the face of the summons. It is common ground that they do not expressly preclude reference to costs on the face of the summons. I have come to the clear conclusion that the summons is not an abuse of the process or otherwise invalid by reason of the fact that it includes reference to a claim for costs. The heading of the summons makes clear it seeks recovery of the Council Tax only. The complaint is therefore only as to the non payment of the Council Tax. The tax due is the Council Tax which is separately identified both on the first page and on the subsequent page. It is abundantly clear that the subject matter of the summons is therefore the recipient’s liability for the Council Tax. The obvious purpose of identifying the costs is so as to inform the recipient of the amount of costs which are claimed by the Respondent (and thus asserted by it to be due) which can be paid before the date of the hearing. Since Regulation 34(5) expressly provides for the recipient to pay in advance of the hearing both the sum specified in the summons as outstanding, namely the Council Tax, and the costs reasonably incurred in connection with the application it is obviously convenient to use the summons as a means by which to inform the recipient of what is said by it to be that amount. It also serves to inform the recipient of the amount which the Respondent would seek from the Court by way of costs if the liability order was paid before the hearing but no costs were paid in respect of it: see Regulation 35(8). Regulation 35(8) is important because it addresses a situation in which a recipient does not dispute (or no longer disputes) the making of a liability order but does wish to claim that he should not be liable for an order for costs, at least in the amount claimed. The short paragraph at the foot of the first page of the summons makes clear that the proceedings will only be stopped if the amount of the costs claimed together with the Council Tax sought is paid. It follows that the recipient is made aware that proceedings will continue if only the Council Tax is paid or if only part of the costs claimed are paid. This is consistent with Regulation 35(8).
2. The Appellant disputed the Respondent’s submission that recipients would want to know in advance the amount of costs that would be claimed against them. I do not agree. In my view, that is precisely the sort of information which ought to be made available.
3. I accept the Respondent’s submission that the summons is not invalidated by reason of the inclusion of additional information beyond the subject matter of the complaint. There is nothing on the face of the summons which suggests that a recipient cannot challenge the amount of the Council Tax or the sum which is said to be due in respect of costs. As I have said, the final paragraph is to the contrary. There is nothing misleading in informing the recipient that £75 is said to be due in respect of costs of the application. It is also clear from the wording at the foot of the summons that this is a sum which is referable to the costs which are said to have already been incurred in connection with the application and, for that reason, those costs did not include such future costs as may be incurred if attendance at the hearing of the summons were required.
4. I reject the Appellant’s submission that the claim for costs is not justiciable. No reasonable recipient of the summons could have concluded that fixed costs of £75 would have to be paid if the matter was contested. The summons did not usurp the authority of the Magistrates’ Court to determine that, in a particular case, the costs reasonably incurred in obtaining the order were in a different amount. (In fact, in this case, the Respondent chose not to claim any additional costs of the hearing and confined itself to the costs of the application.)
5. I accept that the order for costs did not fall to be made until after the point in time when the basis for the liability order had itself been established but that is no reason for not telling the recipient in advance what minimum claim for costs would be pursued by the Respondent if such a liability order were subsequently to be made. In this case, as I would expect to be the case whenever it is contested, the level of costs was the subject of evidence and submissions of the parties. The Court did not accede to the claim for £75 without investigation.
6. The demand for costs was not unlawful. It was the amount which the Respondent properly contended was due to it. Contrary to the Appellant’s submission, the lack of explanation as to its breakdown is not such as to make it unlawful.
7. In those circumstances, I am satisfied that the Magistrates’ Court was correct to find that the application for the liability order was valid when the summons included a request for costs. The fact that the summons included an amount in respect of costs did not render it an abuse of process.
8. The answer to Question 1 is “Yes”.

Question 2

“Were we correct in finding the Appellant liable on the basis of the evidence we heard and the certificate produced by the Council”

1. The Appellant contends that the Magistrates’ Court should not have found him liable for Council Tax because the only material which purported to contain evidence of his liability to pay such Council Tax was a computer record which was inadmissible as evidence at the hearing.
2. It must be said at once that this is a deeply unattractive submission. The Appellant did not adduce any evidence of his own to suggest that he was not liable to pay Council Tax in the sum claimed. Nor has he given the slightest hint to this Court that he has a substantive defence to the tax claimed. Be that as it may, he submits that it was for the Respondent to prove its case in support of the liability order and he neither admitted nor denied a liability in respect of the Council Tax. On that basis, so he contends, it makes no difference whether he would have disputed the content of a valid certificate had one been produced.
3. Regulation 53(5) provides:

“In proceedings where the applicant authority or an authorised person desires to give a statement in evidence in accordance with paragraph (4), and the document containing that statement is produced by a computer, a certificate (a) identifying the document containing the statement and the computer by which it was produced…shall be admissible as evidence of anything which is stated in it to the best of the signatory’s information and belief.”

1. At the hearing in the Magistrates’ Court, the Respondent relied on a statement produced by a computer. However, the Appellant contends that the certificate did not comply with sub-paragraph (a) of Regulation 53(5) with the consequence that the evidence itself was not admissible.
2. The relevant document which the Respondent contended and the Magistrates’ Court held was a certificate was in the following terms:

“I, Charlotte Forscutt, certify that this is an accurate extract of information held within the computer operated by the council at the time of printing this document which details names and addresses of persons summonsed for non-payment of Council Tax. I also certify that at all relevant times the computer system functioned properly and that all information given herein is correct to the best of my knowledge and belief.”

1. Above the statement just described the document contained the following information:

“Program: ct6200a

East Northamptonshire District Coun

Version: 7100

Job Id: 349/5

Date: 06.08.2105

Time: 09:02

Liability Order in respect of Council Tax

Certificate of Computer Validity

System in Use: LINUX”

1. The Appellant submitted that the certificate relied on did not constitute a compliant certificate within the meaning of the Regulation because it did not identify the computer from which the document annexed to it had been produced. He submitted that LINUX was a computer operating system, not a computer, and that none of the other information contained on the face of the certificate identified the computer. Whatever the codes and references in the top line meant, so he argued, they did not identify the computer. He suggested that there was no good reason given as to why the certificate did not identify the manufacturer, the model and serial number of the computer. It was not sufficient for the certificate to describe the computer merely as the one used by the Respondent to produce the document.
2. The Respondent disputed these contentions. It was submitted that the certificate did identify the computer as the one operated by the Respondent at the time of printing the document and that it operated a LINUX system. Reliance was also placed on the information set out above the statement including the program, the version and the job identification reference.
3. In addition, the Respondent also submitted that there was oral evidence before the Magistrates’ Court that the Appellant was liable in respect of Council Tax. The effect of this was that there was evidence other than that contained in the document appended to the certificate upon which a liability order could have been founded.
4. At one point the Appellant sought to broaden his submission to the effect that the certificate was also invalid because it only certified the fact that a summons had been issued and not that the sum stated on the summons was in fact due. In the event, he did not pursue that further submission.

Decision

1. I am satisfied that this certificate did contain sufficient information to comply with the Regulation 53(5) in that it did adequately identify the computer by which the relevant document had been produced. I accept the Respondent’s submission that a computer can be identified in a series of different ways. No single or exclusive way of doing so is prescribed in the Regulation. One way would be to refer to its make, model and serial number. Another would be to describe its physical location or to provide some other attribute by which it could readily be identified. The object of the Regulation is to ensure that, if it ever became material to check the veracity or accuracy of the document produced by the computer, the relevant computer could be identified.
2. In this case, had it been necessary to challenge the substantive content of the document produced by the certificate, there was sufficient information on the face of the certificate to identify the computer by which it had been produced. The computer was the one operated by the Respondent at the time and used a LINUX system. It would not be of any further assistance to the Appellant to know the make, model or serial number if the computer itself was identifiable by other means.
3. I therefore conclude that the certificate complied with the Regulations and the document produced by it was admissible as evidence against the Appellant.
4. In any event, the evidence against the Appellant was not confined to the documentary material produced by the Respondent’s computer. There was oral evidence before the Magistrates’ Court that the Appellant had defaulted on his Council Tax payments: see paragraph 10(i) of the Case Stated. This records:

“Denise Beard, an authorised officer of the council, gave evidence:

i)      She said Mr Williams had defaulted on his council tax payments.”

1. Whilst the Appellant disputed that this evidence was given (although I note that the Appellant had never previously raised the accuracy of that record as an independent complaint whether informally or otherwise) I am bound by the record contained in the Case Stated.
2. The Appellant also contends that the evidence recorded at paragraph 10(i) of the Case Stated is insufficient because it does not identify the amount of the Council Tax which had been the subject of default or the period to which it related. In my view that is a poor point. The payments to which the evidence must have related were obviously the Council Tax payments the total of which was set out in the summons. There was no suggestion from the Appellant before the Magistrates’ Court that the defaulting payments were less than the total amount stated as being due on the summons.
3. The question for me to decide specifically embraces both the evidence “heard” and that produced in documentary form by the computer and which was the subject of the certificate relied on.
4. I conclude that the Magistrates’ Court was correct to find the Appellant liable for the full amount of Council Tax in the sum claimed on the basis of the oral evidence which it heard and the certificate produced. I note, as did the Magistrates’ Court, that the Appellant never disputed that the amount contained in the Schedule attached to the certificate was in fact due. Nor has he subsequently made any submission to this Court that he would have been in a position to dispute it. There was therefore no prejudice at all which resulted from the Respondent’s reliance on the certificate.
5. The answer to Question 2 is “Yes”.

Question 3

“Were we right to conclude the costs reasonably incurred in this case amounted to £75”

1. This ground is limited to a question or questions of law. I have concluded that this ground does not give rise to an unrestricted entitlement on the Appellant’s part to raise any point of law which could be said to arise from any aspect of the costs order. Rather, I have concluded that the grounds are limited to those three which had specifically been pursued before the Magistrates’ Court and upon which the Case Stated had focussed: see paragraph 23 of the Appellant’s skeleton argument. The Appellant submitted that he would have raised further points before the Magistrates’ Court but gave up doing so in the face of obvious reluctance by the Bench to accept the three points he had already been making. However, if the Appellant had wanted to pursue further points he should have done so notwithstanding those apparent difficulties. It was his decision not to pursue more than the three points already identified and he cannot raise the additional points now. In any event, there was ultimately no application by the Appellant before me to amend the Case Stated to raise new issues of law. The Appellant elected not to make such an application because of the likely consequence that it would result in an adjournment of the appeal which he was not prepared to countenance.
2. It therefore follows that there are three points that arise for consideration under this heading, namely part of the ICT costs; the Chip & Pin costs included as part of the ICT costs; and the pension deficit costs.
3. In connection with costs, both parties drew my attention to and placed reliance upon the decision of Mrs Justice Andrews in R (on the application of the Reverend Paul Nicolson) v Tottenham Magistrates [2015] EWHC 1252 (Admin). The case concerned Regulation 34(7) of the Council Tax (Administration and Enforcement) Regulations. The complaint in that case was as to the lack of information which was said to be necessary for the Magistrates to address their minds to the question of whether the essential causal connection between the costs claimed and the obtaining of the order had been established by the Council. There was also a complaint that the Magistrates had confused the reasonableness of the amount of the costs with the question of whether the sum in respect of costs had been reasonably incurred.
4. Paragraphs 34 to 36 of the Judgment are in the following terms:

“34 As a matter of straightforward construction of Regulation 34(7) that means 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.

35 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.

36 Since the question whether the costs claimed in this case were “reasonably incurred in obtaining the liability order” is not a matter I have to decide and I have not heard argument on it, it seems to me that I should be circumspect in any observations that I make which could have a bearing on that issue should it arise on a future occasion. On the other hand, there are no authorities that specifically address these Regulations, and this is an opportunity for the Court to afford some general guidance as to their interpretation and scope.”

1. At paragraph 42, Mrs Justice Andrews continued:

“42 It seems to me that in principle the intention in the Regulations is to enable the local authority to recover the actual cost to it of utilising the enforcement process under Regulation 34 , which is bound to include some administrative costs, as well as any legal fees and out of pocket expenses, always subject to the overarching proviso that the costs in question were reasonably incurred. However, bearing in mind the court's inability to carry out any independent assessment of the reasonableness of the amount of those costs, the Regulations should be construed in such a way as to ensure that the costs recovered are only those which are genuinely attributable to the enforcement process.”

1. Paragraphs 45 and 46 say:

“45 I bear in mind the practicalities of the enforcement system; time in the Magistrates' court is limited and given the large number of summonses issued, it would not be practical for the local authority to carry out and provide a detailed calculation of the actual costs incurred in each and every case (save possibly where the actual costs are well in excess of the norm, for example if the local authority has to instruct counsel to turn up and argue specific points of law raised by the taxpayer in defence).

46 In principle, therefore, provided that the right types of costs and expenses are taken into account, and provided that due consideration is given to the dangers of double-counting, or of artificial inflation of costs, it may be a legitimate approach for a local authority to calculate and aggregate the relevant costs it has incurred in the previous year, and divide that up by the previous (or anticipated) number of summonses over twelve months so as to provide an average figure which could be levied across the board in “standard” cases, but could be amplified in circumstances where there was justification for incurring additional legal and/or administrative costs. If that approach is adopted, however, it is essential that the Magistrates and their clerk are equipped with sufficient readily available information to enable the Magistrates to check for themselves without too much difficulty, and relatively swiftly, that a legitimate approach has been taken, and to furnish a respondent with that information on request.”

1. Paragraphs 50 to 52 continue:

“50 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, although in practical terms that approach provides no incentive to the respondent to pay up after the summons is issued. What matters is that the costs that it does decide to claim are properly referable to the enforcement process.

51 If the necessary causal link is established to the satisfaction of the court then the next question is whether the costs claimed have been “reasonably” incurred. It may be that the method by which the costs are calculated demonstrates this without the need for further evidence; but 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.

52 Establishing that the costs were reasonably incurred is not the same thing as establishing that the costs were reasonable in amount. Of course, the latter may have a bearing on the former, since if the costs appear to be excessive, or disproportionate, there may be legitimate grounds for querying whether it was reasonable of the local authority to incur costs in that amount. However so far as proportionality is concerned, one has to bear in mind that in the present context where the recoverable sums are relatively small (though by no means insignificant to many of those who have to pay them) it is inherently likely that there will be a disparity between those sums and the costs of recovering them. On the other hand, the practice of processing applications in bulk could drive the average costs of obtaining liability orders down rather than up.”

1. At one point, despite having relied on it in his skeleton argument, the Appellant appeared to be suggesting that he did not agree with some of the observations in this decision and suggested it was, at least in part, not correct. Suffice it to say that I have found the decision helpful and, so far as it bears on the matters which I have to decide, I respectfully agree with it.
2. Unlike the position which had obtained in Nicolson, in the present case the Respondent had sought to prepare a schedule of standardised costs of the type encouraged by Andrews J at paragraph 46. Some of the supporting information was provided to the Appellant in advance of the hearing before the Magistrates’ Court. Other information was provided at the hearing. Although a point on lateness was taken before the Magistrates’ Court, as paragraphs 6 and 9 of the Case Stated record, the Appellant declined the offer of an adjournment.
3. The Magistrates’ Court made an order against the Appellant which included an amount of £75 in respect of costs which it concluded had been reasonably incurred by the Respondent in obtaining the liability order: see Regulation 34(7)(b).
4. They reached this conclusion based on the evidence provided by the Respondent. This evidence is summarised at paragraphs 10(vi) to (xxi) of the Case Stated. The document produced by the Respondent and relied upon by it contains an annual summary of the costs said to be reasonably incurred by the Respondent in the period before a Court hearing (£266,102) divided by the number of annual liability orders made in the preceding year (3496) to produce a “standard” cost of £76.12 per case. If the costs of attending a court hearing were included, this cost would rise to £78.42 per case. In the event, the Respondent limited its claim to £75.
5. At one point during the hearing before me the Appellant sought to contend that the approach adopted by the Respondent had not been in accordance with the decision in paragraph 46 of Nicolson because the latter required the total annual cost to be divided by the number of summonses in the previous year rather than the number of liability orders made in the previous year. Since the liability orders made would be fewer than the number of summonses issued, the cost per case would have been increased by the Respondent’s approach. Again, as the Appellant accepted, this was not an argument which had been raised in the Magistrates’ Court. The Respondent opposed the introduction of this point on the grounds that it would require an investigation into the difference between the two outcomes. There was no application to amend the Case Stated to raise the new point and the argument was not further pursued. Had it been, on the basis of the submissions I did hear, I would have been inclined to accept the Respondent’s submission that paragraph 46 of Nicolson was to be seen as guidance, rather than an absolute rule, and that an approach based on liability orders fell within the ambit of such guidance in any event.

The IT or ICT Costs

1. Included within the total amount of £266,102 is an amount of £11,397 in respect of Information Technology. According to the evidence before the Magistrates’ Court, this is a figure derived from a percentage of the total cost of software licences and maintenance. The enforcement package, as it is described, is set at 15% of the total cost of £75,976.77. In the supporting material, entitled “Academy Annual Maintenance Charges” a detailed breakdown is given of the total cost of £75,976.77. This is the total of the actual costs for 2015. The information on this sheet largely reflects, but is not identical to, the material which was provided to the Appellant in advance of the hearing. The sums included in the total are the same. To the extent that there are differences, nothing turns on it because the Appellant was provided with a copy of the new details and declined the opportunity to have an adjournment to consider them.
2. The present appeal turns on the allocation of the total IT costs which is attributed by the Respondent to the costs of obtaining the liability orders. In the detailed document, the allocation is described in this way:

“Guidance from Capita usergroups had advised that approximately 15% to 20% is attributed to Recovery work.”

1. Specific evidence in respect of the allocation of 15% is recorded in paragraph 11(ii) of the Case Stated. It says:

“When she was asked by the appellant how the council had concluded that 15% of the annual ICT costs should be attributed to the costs in these cases she said these were costs advised to her by the ICT department and that the percentage was a figure discussed at Capita User Group meetings as the proportion of the costs that were attributable to the enforcement process relating to the obtaining of liability orders.”

1. During submissions the Appellant accepted that paragraph 11(ii) of the Case Stated was broadly consistent with the note at the foot of the detailed document. Nonetheless, in this appeal, the Appellant objected to this percentage allocation. He criticised the evidence as hearsay and said it was insufficiently clear as to the basis upon which the percentage had been derived. It was not clear who attended the Capita User Group or on what basis the figure had been reached. He pointed out that Capita is a professional services company and that the assessment was not produced by the Respondent. He submitted that “recovery work” was broader than and different from “costs reasonably incurred by the applicant in obtaining the order” which was the applicable test. Recovery was applicable to all Council Tax payers and not merely those who had failed to pay. He points out that he sought disclosure of the guidance referred to in the document and was told that the Respondent held no such guidance. (From this I interpose to say that I infer that the guidance was verbal.) All in all, the Appellant contended that in law it was wrong to have included an assessment of 15% of the total IT costs as attributable to the IT costs reasonably incurred in obtaining the order. On his case, there was simply no adequate evidence to support it. His ultimate submission was that no rational court would have regarded the evidence adduced in respect of “guidance” as acceptable. He did not propose an alternative percentage or figure.
2. The Respondent’s over-arching submission (applicable to all three grounds of challenge under this ground of appeal) was that it had sought to comply with the guidance in Nicolson and it was inappropriate for this Court to pick over the minutiae of the itemised costs. The Respondent had detailed the costs and had sought, in a reasonable and proportionate way, to allocate costs to those incurred in obtaining the order. This was, ultimately, a civil claim rather than a criminal trial. Accordingly, a degree of latitude should be shown to the nature of the evidence given. The Respondent contends that the Magistrates’ Court was correct to make an order of £75 in this case, including the applicable assessment in respect of the IT costs.
3. In respect of the basis for the 15% assessment, the Respondent submitted that it was sensible for the Respondent to have sought advice from the IT providers. It was pointed out that no-one was suggesting that no part of the IT costs were attributable to enforcement so at least some allocation had to be made. The entity best placed to make that assessment was the provider. As regards the reference to “recovery work”, this was merely a loose term but the clear evidential basis for the entitlement to include the sum of £11,397 within the gross amount is contained in paragraph 11(ii) of the Case Stated. The Respondent also took a further objection that the point about “recovery” had not previously been foreshadowed such that, if I was to find it was well made, I should preclude the Appellant from relying on it.

Decision

1. I accept the Respondent’s submissions given above. In my view the evidence as to the allocation of the total IT costs was a proportionate approach for the Respondent to have adopted in a case such as this. Whilst it may be the case that the Respondent’s witness was, herself, unable to explain the basis for the 15% within her own knowledge she was at least able to identify its source, namely a discussion at the Capita User Group. Since Capita was the provider it was best placed to make the assessment. It is also material to note that the percentage adopted for the application was at the lowest end of the range of 15 to 20% which was identified by Capita. Finally, I agree that nothing of substance turns on the word “recovery”. The evidence relied on is that described in the Case Stated where the correct test is identified. In any event, the note in the supporting document does not indicate that the wrong question was asked of Capita. On the contrary, it seems clear to me that the Respondent had the approach in Nicolson well in mind when seeking the information from Capita.
2. For those reasons I see no error of principle in the inclusion of 15% of £75,976.77, namely £11,397, within the overall total of £266,102. The assessment of costs in the sum of £75 was not therefore impugned on this account.
3. Although I do not base my decision on it, I observe that, even if the whole amount of £11,397 were excluded from the total it would make only a minor difference to the individual cost that could have been claimed against the Appellant. The costs for those cases where no hearing was required would become £72.86 and for those where a hearing was required would become £75.16. The latter is still greater than the costs order made in this case. That would have been relevant to the question of what the applicable remedy would have been had I otherwise acceded to the Appellant’s argument.

Chip & Pin Costs

1. Included within the total IT costs of £75,976.77 are some amounts attributed to Chip & Pin devices. There are five line items in respect of Chip & Pin devices which total some £881.05. The evidence before the Magistrates’ Court was that these devices are used by the Respondent to take payment as part of the enforcement process. Because of the way in which the table of IT costs was prepared and presented, only 15% of that cost was actually attributed to the use of such devices and that element (namely 15% of £881.05) formed part of the £11,397 described above.
2. The Appellant submitted that it was wrong in principle to include any amount for the cost of these devices. His submission was, and indeed it was common ground, that no Chip & Pin device was used in respect of the enforcement claim against him personally. He therefore submitted that no such costs could be included since they had not been incurred at all in respect of obtaining a liability order against him. Yet further, the Appellant submitted that a Chip & Pin device should never be needed to obtain a liability order: it would only be needed to execute payment of a liability order once it had been obtained. This came after the process encompassed by the costs regime had expired.
3. The Respondent relied on the general points described above. But in addition, the Respondent submitted that it was both reasonable and in keeping with the guidance in Nicolson to adopt standardised types of cost and then take an average cost per head. That approach inevitably meant that it was not appropriate to consider the detail of those costs in order to see whether they had actually been incurred against a particular respondent to the claim. As regards the submission that the devices were not used to secure the liability order, it was contended that the devices were also used to take payment of those against whom a liability order had been sought but who had made payment before the hearing: see Regulation 34(5).
4. I accept the Respondent’s submissions. The approach contemplated in paragraph 46 of Nicolson is one which takes and aggregates the relevant types of costs incurred in the previous year and divides it up by the number of previous or anticipated number of summonses and to provide an average figure. In my judgment, it is an inevitable consequence of that approach that some detailed types of cost will not necessarily have actually been incurred in the case of a specific defaulter, A, but will have been incurred in the case of other defaulters B, C and D. Provided that the “right types of costs and expenses are taken into account” (see paragraph 46 of Nicolson) that is sufficient. It follows that, if the inclusion of a Chip & Pin device is a reasonable category, or type, of cost to include in the aggregate, it is no answer in an individual case to show that such costs were not incurred in the specific case. Of course, the position would be otherwise if the Respondent had sought to prove its costs specifically by reference to a record of the costs incurred against the Appellant personally. But that is not this case. In this case the Respondent sought to demonstrate the level of costs reasonably incurred in obtaining the liability order against the Appellant by reference to the average cost of doing so against other defaulters. In my view that is consistent with the approach suggested in paragraph 46 of Nicolson.
5. I also agree with the Respondent that there is nothing objectionable about including a category of cost for Chip & Pin devices since they form an essential part of the payment collection system where someone wants to pay in the period between the issue of a summons and a hearing in respect of it. It follows that such costs are part of the overall cost of obtaining a liability order.
6. For those reasons I see no error of principle in the inclusion of £881.05 within the total for IT costs of £75,976.77, of which 15% forms part of the overall total of £266,102. The assessment of costs in the sum of £75 was not therefore impugned on this account.
7. Although I do not base my decision on it, I observe that, even if the whole amount of £881.05 were excluded from the total of £75,976.77 from which 15% is derived it would make only a very minor difference to the individual cost that could have been claimed against the Appellant. Indeed, it would not reduce the amount of costs below the level which the Appellant was ordered to pay. That would have been relevant to the question of what the applicable remedy would have been had I otherwise acceded to the Appellant’s argument.

Pension deficit costs

1. The third item in respect of which objection was taken by the Appellant concerns the inclusion of £62,830 in respect of “pension – deficit funding”. This line item formed part of a total overhead cost of £598,100. This overhead cost was used in the calculation of an “on cost” factor of 2.41 which was applied to hourly rates of relevant staff and management undertaking activities in connection with the enforcement of liability orders. The only issue raised in the appeal concerns the legitimacy of including an item in respect of pension deficit funding within the overhead cost which formed the basis of the factor of 2.41. There was no challenge to the basic hourly rates computed from salaries. Within the appeal, there was also no challenge to the hours attributed to the relevant activities. In his skeleton argument, the Appellant sought to broaden his complain to mount an attack on the hours spent “liaising with customers”, “answering complaints” and “checking legislation”. But these were not the subject of challenge in the Magistrates’ Court and are not matters addressed in the Case Stated. It is too late to refer to them now and, as I have said, there was no application to amend. The same applies to the complaint about travel times from the Respondent’s offices to the Court.
2. The Appellant contended that it was wrong in principle to include as part of the overhead an element in respect of funding the pension deficit. He submitted that the Regulations are not there to raise revenue. The function of the Regulations is to permit the Respondent to recover the costs reasonably incurred by it in respect of enforcement action. On the Appellant’s submission the calculation of overhead should not have included an element for the funding of a pension deficit. He pointed out that such a deficit could only have been incurred as a result of mismanagement by the Respondent of its pension funds and there was no reason why members of the public, even those against whom a liability order had been made, should be ordered to make good at least a contribution towards that deficit. In short, he submitted that the pension deficit costs were not reasonably incurred.
3. According to the evidence set out in the Case Stated, the Respondent had distributed the entire pension deficit cost between its different departments and the apportionment had been made at the request of the Audit Commission: see paragraph 11(iii) of the Case Stated. In light of the evidence the Magistrates’ Court concluded that the pension deficit costs were reasonably included in the calculation being a reasonable proportion of those costs associated with the enforcement activity: see paragraph 18(v) of the Case Stated. (As explained earlier, I rejected the Appellant’s attempts to challenge the Case Stated in this respect.)
4. The Respondent’s submission was that the pension deficit was an expense associated with the general running of the Respondent’s offices. A full explanation for it had been given to the Magistrates’ Court and there was nothing wrong in principle with including it as part of the overhead cost of running the department. If relevant, the Respondent submitted that there was no evidence that it had mismanaged its pension funding. By including this item in the overhead, the Respondent had taken a reasonable approach open to it in light of Nicolson. Such a cost is not plainly wrong or outside the scope of the cost of running an organisation such as the Respondent. The position would be otherwise if the overhead included a line item for something inappropriate such as a holiday fund.

Decision

1. I accept the Respondent’s submissions. In my judgment, there was nothing wrong in principle with the inclusion of an amount for pension deficit costs in light of the evidence which was given and the facts found. Pension costs form part of the general expenditure reasonably and properly incurred by the Respondent in carrying out its general functions in just the same way as salaries, national insurance contributions and other costs traditionally associated with the employment of staff. The cost to the Respondent of funding a pension deficit should be seen in exactly the same way. The existence of the deficit does not mean that the Respondent had mismanaged the pension fund or had, in any way, acted unreasonably. It merely meant that the pension fund had fallen short. The evidence was that these deficit costs had been distributed amongst the relevant departments and, as a result, a proportion fell on the department responsible for the enforcement of liability orders. As a result it was right that the factor of 2.41 should have been calculated after taking account of such costs.
2. For those reasons I see no error of principle in the inclusion of £62,830 within the total overhead cost of £598,100 on which the factor of 2.41 was based. This factor was properly deployed in the hourly rates included within the costs claimed. Those hours are directly referable to staff engaged in obtaining liability orders. The assessment of costs in the sum of £75 was not therefore impugned on this account.
3. Although I do not base my decision on it, I observe that, even if the whole amount of the sum allowed in respect of pension deficit were excluded from the calculation it would make only a minor difference to the individual cost that could have been claimed against the Appellant. The costs for those cases where no hearing was required would become £71.93 and for those where a hearing was required would become £74.09. This is, to a de minimis extent, less than the Appellant was ordered to pay. That would have been relevant to the question of what the applicable remedy would have been had I otherwise acceded to the Appellant’s argument.
4. It follows that, having dismissed each of the three individual objections raised by the Appellant, I have concluded that the Magistrates’ Court was correct in law to find the costs reasonably incurred in obtaining the liability order against the Appellant amounted to £75.
5. The answer to Question 3 is “Yes”.

Remedies

1. Pursuant to section 28A(3) of the Senior Courts Act 1981, I may reverse, affirm or amend the determination in respect of which the case has been stated. I have decided that the answers to the three questions are “Yes” in each case and, as such, I affirm the determination in those respects.
2. Accordingly I dismiss the Appellant’s appeal by way of Case Stated.
3. I will hear the parties in respect of any application for costs and summary assessment thereof. The Appellant indicated that he would prefer to deal with costs at an oral hearing. Accordingly the matter will be listed for a one-hour hearing on the occasion on which judgment is handed down. No later than 4pm on Thursday 3 March 2016, such objections as may be taken on the summary assessment of costs should be notified in writing to the Court and the other party.

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