Powys County Council v John Bernard Hurst
| Jurisdiction | England & Wales |
| Judge | Lord Justice Singh,Lord Justice Hickinbottom |
| Judgment Date | 04 July 2018 |
| Neutral Citation | [2018] EWHC 1684 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/1374/2018 |
| Date | 04 July 2018 |
[2018] EWHC 1684 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Cardiff Civil Justice Centre
2 Park Street
Cardiff CF10 1ET
Lord Justice Hickinbottom
and
Lord Justice Singh
Case No: CO/1374/2018
Jonathan Elystan Rees (instructed by Solicitor, Powys County Council) for the Appellant
The Respondent in person
Hearing date: 19 June 2018
Judgment Approved
Introduction
This is an appeal by way of case stated against the decision of District Judge (Magistrates' Court) Neil Thomas given on 18 February 2018. By that decision the District Judge held that the Appellant was required to consider proceeding under the Attachment of Earnings Act 1971 (“the 1971 Act”) as an alternative method of recovering unpaid council tax before applying to commit the Respondent to prison for non-payment of that tax. Accordingly he discharged the earlier order for committal which he had made but then suspended on terms.
The District Judge reached his decision on the basis that it was open to the Appellant to seek an attachment of earnings order in the County Court in respect of the Respondent's pension. The main issue in this appeal is whether that course is open to a billing authority such as the Appellant as a matter of law.
At the hearing before this Court, which took place in Cardiff, we heard submissions from Mr Jonathan Elystan Rees on behalf of the Appellant. We also heard from the Respondent, who appeared in person. We are grateful to them both for their submissions. At the hearing the Respondent applied for an adjournment. We refused that application and said that we would set our reasons for doing so in our written judgment, which we now do (at paras. 54–55 below).
Factual background
For present purposes the relevant factual background can be summarised very briefly.
The Appellant is the relevant billing authority for the purposes of council tax. The Respondent is liable to pay council tax. The Appellant has pursued council tax liabilities against the Respondent over a number of years. Liability orders were obtained by the Appellant.
On 1 December 2016 an order was made by the District Judge committing the Respondent to prison for non-payment of council tax. It was found that the Respondent had wilfully refused to pay. That committal was suspended on payment terms. The Respondent subsequently defaulted on payment and so, on 29 September 2017, the Appellant applied to the Court for an order committing the Respondent to prison in accordance with Regulation 47 of the Council Tax (Administration and Enforcement) Regulations 1992 (SI 1992 No. 613) (“the 1992 Regulations”).
The District Judge observed that the Respondent was in receipt of a police pension and raised the issue whether an application could be made under the 1971 Act. The Appellant indicated that this option was not open to it and therefore had not been considered. The application to commit was adjourned on a number of occasions for reasons which are unconnected to this appeal.
A further hearing took place on 18 February 2018. On that occasion the District Judge held that pensions are income for the purposes of the 1971 Act; that a liability order is a “judgment debt” within the meaning of that Act; and therefore that the Appellant was not precluded from applying to the County Court for enforcement. On that basis he was of the view that all other enforcement options had not been exhausted prior to the application to commit. Accordingly the District Judge quashed the committal order which had been made on 1 December 2016.
The case stated for the opinion of this Court
The two questions stated for the opinion of this Court are:
“(i) Are the local authority precluded from applying to the County Court for an attachment of earnings order under the Attachment of Earnings Act 1971?
(ii) Was I entitled to dismiss the application and quash the commitment because I concluded that the local authority had not satisfied me that they had exhausted all alternatives to custody before applying to commit Mr Hurst to prison?”
The Legal Framework
It is unnecessary for present purposes to rehearse the legal framework in great detail. It was helpfully set out by Hickinbottom LJ in R (Woolcock) v Secretary of State for Communities and Local Government and others [2018] EWHC 17 (Admin); [2018] 4 WLR 49 (“ Woolcock”), at paras. 3–17. Here I will do no more than to outline the legislative scheme by reference to the judgment of Hickinbottom LJ.
Council tax is a system of local taxation introduced by the Local Government Finance Act 1992 (“the 1992 Act”) to replace the community charge. It is now used in England, Wales and Scotland to fund approximately one-quarter of expenditure on local services. The applicable law and procedure in England (where there are 326 billing authorities) and Wales (where there are 22 billing authorities) is materially the same: see para.3 of Woolcock.
Section 14(3) gives effect to the provisions of Sch. 4 to the 1992 Act. That schedule is entitled ‘Enforcement: England and Wales’ and contains provisions about the recovery of council tax: see para. 9 of Woolcock.
Para. 1 of Sch. 4 to the 1992 Act confers a power on the Secretary of State to make regulations in relation to the recovery of council tax. By Article 2(a) of, and Sch. 1 to, the National Assembly for Wales (Transfer of Functions) Order 1999 (SI 1999 No. 672) and para. 30(2)(a) of Sch. 11 to the Government of Wales Act 2006, in respect of Wales that function now lies with the Welsh Ministers, to whom is also devolved general competence in respect of “Local Government Finance” (sections 107–108 of, and para. 12 of Sch. 7 to, that Act) see para. 10 of Woolcock.
The relevant regulations which have been made under para. 1 of Sch. 4 to the 1992 Act are the 1992 Regulations. They enable council tax to be collected in monthly instalments. Regulation 23 requires a local authority to send out a reminder notice to a council tax payer when an instalment is missed, giving him 7 days to pay the outstanding instalment. If no payment is made, the right to pay by instalments is lost, and the entire amount of council tax becomes due. If the taxpayer fails to pay that sum, and does not respond to a final notice served under Regulation 33, then the authority can seek a liability order from the Magistrates' Court, under para. 3 of Sch. 4 to the 1992 Act and Regulations 33–36 of the 1992 Regulations: see para. 12 of Woolcock.
At para. 13 of his judgment Hickinbottom LJ said:
“A liability order confirms the amount of the outstanding debt, and the identity of the liable person. It is, in many ways, the equivalent of a judgment, which can be enforced in any of the ways set out in Regulation 52 of the 1992 Regulations, i.e. (i) making an attachment of earnings order (Regulation 37 of the 1992 Regulations); …”
Para. 8 of Sch. 4 to the 1992 Act provides that Regulations made under para. 1 may provide for a council tax debtor, who is an adult, who is the subject of a liability order and who has been the subject of the Sch. 12 procedure (that is a reference to Sch. 12 to the Tribunals, Courts and Enforcement Act 2007) but has been found to have insufficient goods to satisfy the amount due, to be committed to prison: see para. 14 of Woolcock.
After setting out the provisions of Regulation 47 of the 1992 Regulations and referring to earlier authority, at para. 17 Hickinbottom LJ set out a number of propositions which are now well-established and uncontroversial. It is unnecessary to set them all out here in full but I commend that summary of the relevant principles.
The power to commit is coercive. It is intended to be used to extract payment of the debt from those who are able to pay, not to punish the debtor: see para. 17(i) of Woolcock.
Before applying for committal, the local authority must first obtain a liability order and seek to enforce payment by taking control of the subject's goods and selling them under the Sch. 12 procedure, and a bailiff must have reported that he was unable to find any or sufficient goods to enforce payment: see para. 17(iv).
Notice of an application to commit must be made and served: see para. 17(v).
Before making a committal order, the Magistrates' Court must conduct a means enquiry in the presence of the debtor: see para. 17(vi).
The Court must consider, and determine, whether the failure to pay is the result of “wilful refusal or culpable neglect” since any committal order (included one which is suspended) can only be made if that is so: see para. 17(vii).
Before making any committal order (including a suspended order), the Magistrates' Court must consider enforcement options to secure payment other than imprisonment: see para. 17(ix).
At para. 17(x) Hickinbottom LJ said:
“If, and only if, the Court is of the opinion that the subject's failure to pay is due to his wilful refusal or culpable neglect, it may, if it thinks fit, issue a warrant of commitment, or make a suspended committal order (i.e. fix a term of imprisonment and postpone the issue of the warrant until such time and on such conditions as the Court thinks just, usually of course as to payment of the arrears).”
It is usual, although not obligatory, for Magistrates to suspend at least a first committal order on condition that the subject makes regular instalment payments towards the arrears. However, they cannot make any unreasonable order for repayment. Furthermore, the period for which instalments are to be paid must be reasonable. Generally this will be a period of no more than 2 or 3 years: see para. 17(xiii).
The maximum period of imprisonment that may be specified in a committal order (whether suspended or not) is...
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