Ratford v Northavon District Council
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SLADE,LORD JUSTICE RALPH GIBSON,SIR JOHN MEGAW |
| Judgment Date | 20 May 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0520-7 |
| Docket Number | 86/0530 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 May 1986 |
[1986] EWCA Civ J0520-7
Lord Justice Slade
Lord Justice Ralph Gibson
and
Sir John Megaw
86/0530
CO/427/84
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE KENNEDY)
Royal Courts of Justice
MR. GAVIN LIGHTMAN QC and MR. ALAN BOYLE (instructed by Messrs. Wilkinson Kimbers, Solicitors, London WC2A 3UW) appeared on behalf of the Plaintiffs (Appellants)
MR. CHRISTOPHER COCHRANE (instructed by The Solicitor and Deputy Clerk, Northavon District Council, Bristol BS12 1HF) appeared on behalf of the Defendant (Respondent)
This is an appeal by Mr. W.F. Ratford and Mr. C.T.E. Hayward ("the Receivers") pursuant to the leave of the judge from a judgment of Mr. Justice Kennedy delivered on 14th May 1985. By that judgment he dismissed an appeal by the Receivers by way of Case Stated from a decision of the Justices for the County of Avon in respect of their adjudication as a Magistrates' Court sitting at Thornbury on 22nd November 1983. The complaint which the justices had considered was one preferred on 21st July 1983 by the respondents to this appeal, the Northavon District Council ("the Council") against the Receivers, who at the material time had been appointed and were acting as receivers and managers of the property of Sabre Tooling Ltd ("the Company"), a company whose premises were within the area of the Council. The complaint alleged that the Receivers, being duly rated and assessed on a rate made on 28th February 1983, had not paid the sum due, the property in question being certain premises at Unit 21, Cooper Road, Thornbury Industrial Estate, Thornbury, Bristol ("the premises"). The Justices found the complaint was well founded. Mr. Justice Kennedy upheld their decision. The Receivers seek to challenge both decisions.
The sums at stake are quite small. However, the Council apparently regards this appeal as raising important questions of principle concerning the onus of proof in cases where a person has been required, pursuant to s.97(l) of the General Rate Act 1967, to show why he has not paid a rate specified in a complaint. On the other hand, the Receivers, who are two partners in a firm of accountants, apparently regard the appeal as raising no less important questions of principle as to the nature and extent of the personal liability of a receiver, appointed by a debenture holder, for rates in respect of land belonging to a company.
The history of the matter is as follows. On 24th November 1977 the Company executed a debenture in favour of Lloyds Bank Ltd. ("the Bank") by which (Clause 3) it granted a charge over its property present and future. By Clause 7 the Bank empowered at any time after it should have demanded payment of any money or liability thereby secured to appoint any persons to be receivers of the premises thereby charged. Clause 7 further provided that any Receiver(s) so appointed should have power (inter alia).
"(a) To take possession of….. any property hereby charged…..
(b) To carry on manage or concur in carrying on and managing the business of the Company or any part thereof…..
(h) To do all such other acts and things as may be considered to be incidental or conducive to any of the matters or powers aforesaid and which he or they lawfully may or can do as Agent or Agents for the Company".
After directions relating to the application of moneys received by such Receiver(s), Clause 7 finally provided:
"Any Receiver or Receivers so appointed shall be deemed to be the Agent or Agents of the Company and the Company shall be solely responsible for his or their acts or defaults and for his or their remuneration".
On 28th February 1983 the Council made the rate in question and duly published it the following week. The rate was due on 1st April 1983. The Council initially addressed a demand for payment to the Company.
However, on 5th April 1983 the Bank executed an Appointment by which, in exercise of the powers conferred on it by the debenture, it appointed the Receivers "to be Receivers and Managers of the premises charged by the Debenture". The Appointment, after defining the Receivers' powers, provided
"and so that the said Receivers so appointed shall without prejudice to the extent of their said powers be deemed to be the Agents of the Company….which alone shall be responsible for their defaults".
On 6th April 1983 Mr. Ratford wrote a letter to the Council telling them of the appointment of the Receivers. This letter was in the same form as letters addressed to other persons who had had dealings with the Company. In the third paragraph of this letter he said "it is my intention to permit the Company to continue to operate its business with a view to trying to achieve a sale of the whole or part thereof…..". In the fourth paragraph he said: "I must advise you that in respect of any orders placed by or on behalf of the Company my personal liability thereunder will be limited to the value of the assets within my control for the time being".
As the Justices found, the Council received this letter on 11th April 1983, and in reliance on their Officers, formed the view that there had been a change in the rateable occupiers of the premises on 5th April 1983 when the Receivers were appointed. On 23 rd May 1983 the Receivers were entered on the Council's rating records as being occupiers of the premises as from 5th April 1983. On 2nd June 1983 the Council sent out an apportioned account for £37.22 in the name of the Company made up to 4th April 1983 and, in addition, a demand for the rates due from 5th April 1983 to 31st March 1984, addressed to the Receivers personally.
Under s.16 of the General Rate Act 1967 ("the Act") the liability to be assessed for rates in respect of a hereditament falls upon "every occupier thereof", whoever he may be. S.96 of the Act, so far as material, provides:
"if any person fails to pay any sum legally assessed on or due from him in respect of a rate for seven days after it has been legally demanded of him, the payment of that sum may….. be enforced by distress….. under warrant issued by a magistrates' court".
S.97(l), so far as material, provides:
"The proceedings for the issue of a warrant of distress….. may be instituted by making complaint before a justice of the peace and applying for a summons requiring the person named in the complaint to appear before a magistrates' court to show why he has not paid the rate specified in the complaint".
No payment having been made, the Council on 21st July 1983 preferred a complaint against the Receivers asserting that they, being persons duly rated and assessed in the general rate in question, had not paid it.
On 22nd September 1983, at the instance of the Receivers, the Company's leasehold premises were sold.
It is common ground that if the Receivers are liable, their liability extends in respect of the period from 5th April—22nd September 1983 and that the sum in question is £1,591.26.
Prior to the hearing before the Justices, a statement of facts was agreed between the parties which embodied the following facts:
"(a) that the Receivers had representatives on the property from time to time during their receivership;
(b) that the Receivers managed the business of the Company during their receivership;
(c) that the Receivers authorised payments of various outgoings during their receivership e.g. electricity bills, rent, wages;
(d) that the Company at the direction of the Receivers disposed of the Company's assets, including eventually the leasehold interest in the Property; and
(e) that during the receivership, the Receivers had control of those of the Company's assets covered by the debenture".
At the first hearing before the Justices on 1st November 1983 the Council proved that the rate was duly made and published, that it had been duly apportioned in accordance with s.18 of the Act, and that the apportioned rate had been duly demanded of the Receivers and not paid. In these circumstances the Council submitted that they had established a prima facie case against the Receivers that they were the rateable occupiers and that the onus of proof lay on the Receivers to show that they were not liable to pay the rates. The Justices accepted this submission and held that the onus was upon the Receivers to show that they were not liable.
At the resumed hearing on 22nd November 1983 the Receivers submitted that, on the basis of the evidence contained in the agreed statement of facts and the relevant documents (namely the debenture, Appointment and letter of 6th April 1983), the Receivers never entered into rateable occupation of the premises.
The Justices held as follows:
"9. After consideration of submissions and evidence we found as a matter of fact that the Receivers were the occupiers of the rateable property and that they had undertaken the liabilities of Sabre Tooling Limited and were thereby responsible for the rates demanded. We were not shown and could not find any authority in law why the Receivers in this case could escape liability which we found was theirs and accordingly we ordered the issue of the Distress Warrant".
On the application of the Receivers' solicitors, the Justices then stated a Case which raised the following questions for the decision of the High Court, namely:
"(i) whether the onus of proof lay with the (Receivers) in the circumstances established by the evidence;
(ii)...
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