Mr James McGrath v London Borough of Camden
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Holgate,Lord Justice Davis |
| Judgment Date | 24 February 2020 |
| Neutral Citation | [2020] EWHC 369 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 24 February 2020 |
| Docket Number | Case No: CO/2910/2019 |
[2020] EWHC 369 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Rt. Hon. Lord Justice Davis and The Hon. Mr Justice Holgate
Case No: CO/2910/2019
Mr W. Robert Griffiths QC and Ms Nicola Strachan (instructed by Clarks Legal) for the Claimant
Mr Asa Jack Tolson (instructed by Camden London Borough Council) for the Defendant
Hearing date: 29 January 2020
Approved Judgment
Introduction
This is an appeal by way of Case Stated from the decision of District Judge Julia Newton delivered in the Highbury Magistrates' Court on 29 April 2019 in which she made a liability order for the payment of £642.00 BID levy (together with costs assessed at £6264.25) against the Appellant in this court, Mr James McGrath.
The order was made on a summons issued by the Respondent, the London Borough of Camden (“LBC”). LBC is the relevant billing authority for the purposes of BID levy chargeable under the Local Government Act 2003 (“the 2003 Act”). Section 41 enables a billing authority such as LBC to make “arrangements” for a Business Improvement District (“BID”) within its area to enable projects to be carried out for the benefit of that district or for those who live, work or carry on any activity there, These arrangements set out the objectives and scheme for the BID and how the projects are to be financed by a BID levy imposed on ratepayers (identified under the Local Government Finance Act 1988 – “LGFA 1988”) of “non-domestic rates”, often referred to as business rates.
On 1 October 2016 the Hampstead Village Business Development District came into existence. It will endure for 5 years (subject to any extension authorised for a further period of up to 5 years). The proposal to establish the BID was approved by a statutory ballot of eligible non-domestic ratepayers held on 15 July 2016. The “arrangements” for the Hampstead Village BID are set out in its “Business Plan 2016–2021”, including the identification of the ratepayers liable to pay the levy, set at 1.5% of the rateable value of each “hereditament”, or rateable property. The object was to raise about £1.2m over the 5 year term charged on 245 properties. It appears from the Plan that by 2016 over 240 BIDs had already been established (of which 51 were in London) generating around £300m a year.
The summons related to unpaid BID levy for the 2018–2019 chargeable year which began on 1 April 2018. In January 2017 the Appellant became the landlord of the King William IV public house, 77 Hampstead High Street, London NW3 1QX, a property chargeable to the BID levy. On 18 January 2019 he transferred the property to his daughter. Accordingly, under the 2003 Act he was “liable” for the BID levy apportioned so as to cover the period 1 April 2018 to 18 January 2019 in the sum of £642.00.
The recovery of BID levy is governed by regulation 15 and Schedule 4 of the Business Improvement Districts (England) Regulations 2004 (SI 2004 No. 2443 – “the 2004 Regulations”). In short, a liability order cannot be made unless the Magistrates' court is satisfied that the BID levy claimed has become “payable” by the person named in the summons and has not been paid. A person who is liable to pay BID levy under the 2003 Act is not required to pay it to the billing authority unless a statutory “demand notice” is served on him requiring payment.
In the present case, a demand notice dated 13 April 2018 was served on the Appellant. A statutory “reminder” notice was sent to him on 8 August 2018. Because of non-payment a summons seeking a liability order against the Appellant was issued on 19 September 2018.
Before the District Judge the Appellant advanced a number of arguments to why as a matter of law the application for a liability order should fail. However, it is now accepted by the Appellant that he was properly served with a demand notice which contained the matters required to be specified therein.
The argument in this court arises from the requirement imposed on LBC by paragraph 3(2) of Schedule 4 to the 2004 Regulations, namely that when the demand notice was served the authority should also have supplied to the Appellant information on the revenue from the BID levy it was due to receive in the 2017–18 financial year, the amount spent on the BID in that year and how it had been spent, and the matters on which it intended to spend the BID levy for the 2018–19 financial year. It is common ground that LBC failed to comply with this requirement. 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.
Statutory Framework
Liability for non-domestic rates
The Explanatory Note to the 2004 Regulations states that Schedule 4 is based upon the rules for the collection and enforcement of non-domestic rates contained in the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 (SI 1989 No. 1058 – “the 1989 Regulations”).
The liability to pay business rates stems from the Local Government Finance Act 1988 (“LGFA 1988”). That liability to pay rates is imposed on the occupier of each occupied hereditament (s. 43) and the owner of each unoccupied hereditament (s. 45). Section 62 and Schedule 9 provide for regulations to be made for the collection and recovery of rates, i.e. the 1989 Regulations. Regulation 7(6) of those Regulations provides that a ratepayer need not make any payment of the amount payable by him for the hereditament unless a notice has been served on him in accordance with Part II. Regulation 4 requires the billing authority to serve a demand notice on each ratepayer for each chargeable financial year.
Part III of the 1989 Regulations deals with enforcement. Regulation 10 (2) provides that a “sum which has become payable to a billing authority under Part II and which has not been paid shall be recoverable under a liability order, or in a court of competent jurisdiction, in accordance with regulations 11 to 21.” These are mutually exclusive remedies (see regulation 20). A “reminder notice” must be served under regulation 11 as a precursor to the making of an application to a Magistrates' court for a liability order under regulation 12. Regulation 12(5) provides that “the court shall make the order if satisfied that the sum has become payable by the defendant and has not been paid.” A failure to pay the sum due under a liability order may give rise to serious consequences. Payment may be enforced by seizure of goods under the procedure in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 (regulation 14), or by committal to prison (regulation 16).
Sections 49 to 52 lay down the procedure for making proposals for a BID and their approval by a ballot of the non-domestic ratepayers in the proposed district. The proposal has to be approved by a majority by reference to both the number of ratepayers voting and the aggregate rateable value of the hereditaments of those voting (s.50). Once approved, the BID arrangements may last for a period of up to 5 years (as specified in the arrangements), and may be renewed for a further period of up to 5 years, subject to a further ballot (s.54).
Section 44 requires the authority to comply with the BID arrangements while they remain in force. Section 45 enables a BID levy to be imposed in accordance with a charging scheme set out in those arrangements. The levies received by a billing authority have to be managed in a separate BID Revenue Account (s.47).
Like LGFA 1988 in relation to non-domestic rates, LGA 2003 creates a liability to pay the BID levy, but whether that liability must be discharged depends upon the machinery set up by secondary legislation on recovery. By s.46(1) the BID arrangements must describe the non-domestic ratepayers in the district who are to be liable for the levy. A person is liable for the levy if he falls within that description for a chargeable period (s.46(2)). The amount of that person's liability is to be determined in accordance with the BID arrangements (s.46(3)). Section 46(4) requires that any amount for which a person is liable be paid to the relevant billing authority. Section 49 empowers the Secretary of State to make regulations for the imposition, administration, collection and recovery of the BID levy, including regulations of the kind which may be made under Schedule 9 to the LGFA 1988.
The Business Improvement Districts (England) Regulations 2004
The 2004 Regulations are the relevant regulations made under s.49 of LGA 2003. Regulation 15 requires each billing authority to provide for the collection and recovery of BID levy in accordance with Schedule 4.
Paragraph 7(6) of Schedule 4 provides:-
“No payment in respect of the amount payable by a person who is liable for the BID levy in relation to a hereditament for any chargeable period need be made unless a notice served under this Schedule requires it.”
Paragraph 9 of Schedule 4 applies Part III and Schedule 4 of the 1989 Regulations to the enforcement of the BID levy subject to a number of modifications. In so far as is relevant to this case, Part III of the 1989 Regulations is applied as follows:-
(i) The references in regulations 10(2) and 20(1) of the 1989 Regulations to a sum which has become payable to a billing authority under Part II of those Regulations includes a sum which has become payable to a billing authority as BID levy under Schedule 4 to the 2004 Regulations. Accordingly, such BID levy is recoverable inter alia under a liability order made by a Magistrates' court under regulation 12 of the 1989 Regulations;
(ii) Following the service of a demand notice (under...
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...of his speech, cited by Arnold J in the Ceart case at paragraph [16]. More recently it has pithily been said in McGrath v Camden LBC [2020] EWHC 369 (Admin) at para 52: “[52] Where legislation requires a procedural step or action to be taken, it may not specify the legal consequences of a ......
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