Patricia Polley Against West Lothian Council And The Accountant In Bankruptcy
| Jurisdiction | Scotland |
| Judge | Lord McGhie,Lord Malcolm,Lord Justice Clerk |
| Neutral Citation | [2015] CSIH 19 |
| Court | Court of Session |
| Docket Number | A112/12 |
| Published date | 06 March 2015 |
| Date | 06 March 2015 |
| Year | 2015 |
SECOND DIVISION, INNER HOUSE, COURT OF SESSION
[2015] CSIH 19
A112/12
Lord Justice Clerk
Lord Malcolm
Lord McGhie
OPINION OF THE COURT
delivered by LORD CARLOWAY, the LORD JUSTICE CLERK,
in the reclaiming motion
PATRICIA POLLEY
Pursuer and Reclaimer;
against
(1) WEST LOTHIAN COUNCIL and (2) THE ACCOUNTANT IN BANKRUPTCY
First and Second Defenders
and Respondents:
Act: Party
Alt: Barne; Simpson & Marwick (First Defenders)
Alt: Ower; Harper Macleod LLP (Second Defender)
20 February 2015
Introduction
[1] This reclaiming motion arises out of a dispute concerning liability to pay council tax in respect of a property in Kirknewton, West Lothian, during the years 1999 - 2008. The pursuer seeks reduction of an award of sequestration granted against her at Hamilton Sheriff Court on 22 March 2010, together with reduction of the underlying charge for payment dated 17 December 2009 and the preceding 5 summary warrants granted by the sheriff at Linlithgow relating to council tax in each year from 2004 to 2008. The pursuer accepts that exceptional circumstances are required to justify the remedy sought. The issue for determination in the case generally is whether the pursuer has made out a relevant case to that effect on record. The reclaiming print did not contain the record upon which the Lord Ordinary decided the case, but the court has had regard to that record when examining the Lord Ordinary’s reasoning.
The pursuer’s averments
[2] The pursuer avers that she bought the property in January 1996. During the period from 1999 to date, she claims to have had no sole or main residence and therefore no liability to pay any council tax. It is said that she has never lived in the property, nor has she ever been the liable party in respect of the council tax. During the relevant period, the property was occupied by a tenant, namely her son, albeit that he was absent for a period, during 1999 to 2002, when he stored his belongings there and continued to pay rent.
[3] The pursuer claims that no council tax bills were issued to her between 1999 and 2004. She was unaware of action being taken against her until, on 22 August 2007, sheriff officers served her with summary warrants in respect of the period June 2004 to June 2007. She responded to this by writing to the sheriff officers stating that she was not liable for the tax and that the property was occupied by a tenant. This information was passed to the first defenders. On 15 August 2008, sheriff officers served the pursuer with a further summary warrant.
[4] On 5 March 2010, the pursuer was served with a sequestration petition at the instance of the first defenders. She challenged the jurisdiction of the court. She presented documentation to demonstrate that she was not the liable person because of her son’s occupation of the property. Decree of sequestration was awarded in spite of this. Thereafter, the pursuer raised “further actions” in the sheriff court, in an attempt to “correct the wrongful litigation” taken against her. It was not until 26 March 2010 that she received copies of the summary warrant applications for June 2004 to June 2008.
[5] The pursuer avers almost no facts which might be relevant to reduction. She pleads “entitlement to apply for reduction” on the basis of the statutory provisions on council tax and her lack of opportunity to challenge the first defenders’ claims about her liability prior to the issue of the warrants and charge. She pleads “exceptional circumstances to support reduction” of the sequestration although it is not said what these might be.
The defenders’ position
[6] Although the court must, at this stage, proceed on the basis that the pursuer will prove her averments, it is necessary to look at some of the defenders’ averments in order to make some sense of the pursuer’s case in the first place. If this were not done, her case would be simply incomprehensible and hence irrelevant in law.
[7] The first defenders maintain that the pursuer is liable for tax from 1999 onwards. This followed receipt of a letter from the pursuer dated 19 February 2002 intimating that her son had left the property in 1999. The first defenders had accordingly issued demand notices (Council Tax (Administration and Enforcement) (Scotland) Regulations 1992) to the pursuer in respect of the years thereafter. The notices were not appealed (Local Government Finance Act 1992, s 81). The consequent summary warrants and charge for payment were not challenged in any competent legal process.
[8] Following the petition for sequestration, the pursuer had appeared at Hamilton Sheriff Court. Sequestration was awarded on 22 March 2010. An appeal against that award was dismissed as incompetent. The pursuer then petitioned for recall of the sequestration. The petition for recall was dismissed on 13 July 2011 and the related appeal on 16 January 2012.
The sequestration
[9] It is also necessary to look at the sheriff court processes in order to make some reasonable sense of the pursuer’s case. The petition for sequestration had first called on 8 March 2010, when the pursuer herself appeared. The total council tax debt was £11,244.19. A charge for payment had been served on 17 December 2009. No payment had been made and thus apparent insolvency was established. The sheriff continued consideration of the petition until 22 March to allow the first defenders to look at the documentation produced by her (supra). However, at the continued diet, he was satisfied that he was bound, in terms of section 12(3) of the Bankruptcy (Scotland) Act 1985, to award sequestration forthwith. He took cognisance of the pursuer’s position that, although she owned the property, it was leased to a tenant, but he correctly observed that matters had moved on from there; the issue not being liability but means of enforcement.
[10] The pursuer’s appeal was refused as incompetent by the sheriff principal on 9 July 2010. No grounds of appeal had been stated but, as the sheriff principal rightly stated, it is not competent to appeal an award of sequestration. The appropriate process is a petition for recall (1985 Act, ss 16 and 17), or, as the sheriff principal also observed, reduction of the underlying orders.
[11] On 3 February 2011, the pursuer presented a petition for recall. This was refused by the sheriff (supra), who reasoned that what the pursuer was trying to do was challenge the original award without seeking reduction of the warrants and charge upon which it was based. The sheriff stated that a recall process was not the correct one in which to pursue such a challenge.
[12] The sheriff principal agreed and refused an appeal against the sheriff on the basis that a petition for recall did not permit a challenge to the merits of the warrants and charge.
The Lord Ordinary’s decision
[13] The pleadings had been the subject of extensive adjustment and amendment at first instance. Amendment of the summons was allowed on two occasions before calling. Thereafter the cause was continued on the Adjustment Roll on numerous occasions from 11 September 2012 until 12 July 2013. On 28 August 2013, the cause was finally appointed to the Procedure Roll. A debate proceeded on 2 May 2014. On 6 June 2014, the Lord Ordinary dismissed the action.
[14] The Lord Ordinary, citing Aitken v Aitken [2005] CSOH 105 (Lord Hodge at para [5]), stated that, if a debtor sought to challenge a debt upon which a charge had proceeded, he required to do so by legal process. The pursuer had not done so, notwithstanding that the charge itself had advised her to seek legal advice if she was not sure what to do.
[15] Despite a paucity of formal averment, the Lord Ordinary permitted the pursuer to mount a series of challenges on various fronts before rejecting them all in sequence. The complaint about the peremptory refusal of her appeal was not well‒founded because it was inevitable. Her appeal was incompetent. The pursuer had accepted that, for an action of reduction to succeed, she required to prove exceptional circumstances, such as fraud, but there were no pleadings about fraud. On that basis alone, dismissal had to follow.
[16] Nevertheless, the Lord Ordinary listened to additional arguments. The only allegation of fraud was based on the first defenders’ refusal to accept that she was not liable to pay the tax; averments which the Lord Ordinary did not regard as sufficient. The Lord Ordinary addressed the pursuer’s submission that sequestration was not a valid step, following upon the expiry of a charge based on a summary warrant. This was rejected under reference to Chaudhry v Advocate General 2013 SLT 548. Finally, he explained that, although the court did have a discretion on whether to reduce an award of sequestration, that was not based upon section 17 of the 1985 Act.
[17] In dismissing the action, the Lord Ordinary had regard to the time which had elapsed since the sequestration (Arthur v SMT Sales and Services Co 1999 SC 109 at 115) and the steps which had been taken by the second...
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