Sarah Robson Barrister - Liability Orders
Liability Orders       

Members of the General Public are reminded that they should see a SOLICITOR if they have a problem with a liability order.  

Sarah Robson cannot speak to members of the public directly.

The Valuation Tribunal

The Valuation Tribunal is the place to dispute liability to pay council tax. There is a different process for non-domestic or business rates.  See their website for more details at: 

Can I Appeal a Liability Order?

I am often asked if liability orders can be appealed.  you can, but that is an expensive route and the timescales are tiny.  If you believe the liability order should not have been made in the first place, and/or it was made in error, then it would be far cheaper instead to apply to set it aside - but you need to act really fast.  Challenges to liability to pay should be brought in the Valuation Tribunal.
The secret to successfully challenging a liability order is to act fast as soon as you receive a summons or think a liability order may have been made.  

It is not unlike applying to set aside a statutory demand when it comes to time running.  Write to the court and ask for a hearing to consider your application to set the liability order aside.  

Setting Aside Liability Orders
 Magistrates are creatures of statute and do not have a statutory power to re-open civil cases, even when they know they have made an error!  This used to mean that the only way to challenge a liability order was to judicially review the order - a highly expensive process.  

A common law power to re-open a civil case by magistrates developed in case law.  This was set out in Liverpool City Council v Pleroma Distribution Ltd [2002] EWHC 2467 (Admin) (“Plemora”) as where there had been a substantial procedural defect, where it has done something which is unlawful and in excess of its jurisdiction.

R (on the application of Newham London Borough Council) v Stratford  Magistrates' Court & Selwyn Dublin (Interested Party)[2008] EWHC 125 (Admin), [2008] RA 108, [2008] All ER (D) 17 (Jan) [2008]

In this case, Dublin claimed he had not been aware of the proceedings. He did not submit nor prove that order was unlawful or made in excess of jurisdiction, or in ignorance of a significant fact concerning their procedure of which the justices should have been aware, as required in Brighton & Hove. The District Judge allowed the application because he had an ‘arguable case’. The council applied to Judicially Review the decision of the District Judge to set aside the liability order. 

At Judicial Review the council successfully argued that was the wrong test.  The test to set aside a liability order was not simply where it would be reasonable and in the interests of justice to do so – such a test would be too wide and vague.  A liability order cannot be overturned simply by showing an arguable case.  

The court must be satisfied:

  • the order was made as a result of a substantial procedural error, defect or mishap,

  • that there was both a genuine and dispute as to that liability, and

  • that the application was made promptly. Finding ‘some doubt’ over the original decisions does not satisfy the correct test, neither would allegations as to non-receipt of summonses, etc, even if proved. 
However he went on to say:
“If non-attendance at a hearing because of a traffic accident would be sufficient to satisfy that criterion, I find it difficult to see why non-receipt of the notice of the hearing might not also qualify.”

 However in R (Brighton and Hove City Council) v Brighton and Hove Justices [2004] EWHC 1980 (Admin) (“Brighton & Hove”)HHJ Burnton said it was important to note that the power Maurice Kay J held to exist in Plemora to set aside a liability order could not be exercised simply where the defendant disputed his liability.  There must be a substantial defect, and not on the part of the defendant.  Further, in Camberwell, at para 37, LJ Waller expressed disquiet over the Plemora case, saying it was not free from doubt.
Further, at para 34, HHJ Burnton stated the proper consideration was:
“whether there had been any procedural defect in the proceedings that led to making of the liability orders, and whether (the defendant) had applied promptly for them to be set aside after learning they had been made.”

In Brighton & Hove, HHJ Burnton (at para 31) held that it would be exceptional to set aside a liability order, something to be undertaken cautiously.  Further (para 37) he stressed the importance of the need for finality in proceedings for liability orders, and how it is inappropriate to re-open orders simply where it would be reasonable and in the interests of justice to do so – that test was too wide and vague. 
HHJ Burnton further held that a court should not set aside a liability order unless it is satisfied that there is a genuine and arguable dispute as to the defendant’s liability for the rates in question,
a. the order was made as a result of a substantial procedural error, defect or mishap.  (The court must be satisfied that the order was unlawful or made in excess of jurisdiction, or in ignorance of a significant fact concerning their procedure of which the justices should have been aware),
b. the application to the justices for the order to be set aside is made promptly after the defendant learns that it has been made or has notice that an order may have been made.  Prompt action should be taken within a matter of days or at most a very few weeks, not months, and certainly not as much as a year, (para 33).

Prompt Applications
Those wishing to apply to set aside a liability order should note that as a matter of principle for all challenges to administrative and judicial decisions, the application should be made promptly.  Time starts to run from the date of the order, or from when a defendant has notice or constructive notice of the order.  Constructive notice of a liability order can be deemed from as little as notice of the issue of a summons with no notice of the actual outcome – para 33 Brighton & Hove;
“the jurisdiction to reopen a liability order will be unavailable to a defendant who delays in circumstances in which he has notice that an order may have been madealthough he had not received a copy or been informed that an order has been made."

Those who wish to challenge a finding of liability to pay council tax will be pleased to note that there is no time limit for appealing to the council concerned, providing they have not already given a decision notice or 'final decision'.  
© Sarah Robson