Total Sprint Ltd v Swale Borough Council
| Jurisdiction | England & Wales |
| Judge | Mr Justice Eyre |
| Judgment Date | 29 November 2023 |
| Neutral Citation | [2023] EWHC 2968 (Admin) |
| Court | King's Bench Division (Administrative Court) |
| Docket Number | Case No: AC-2023-LON-000835; CO/700/2023 |
[2023] EWHC 2968 (Admin)
Mr Justice Eyre
Case No: AC-2023-LON-000835; CO/700/2023
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London WC2A 2LL
Richard Clayton KC (instructed by ASW Solicitors) for the Appellant
Neil Berragan (instructed by Mid Kent Legal Services) for the Respondent
Hearing dates: 18 th and 19 th October 2023
Approved Judgment
This judgment was handed down remotely at 10.00am on 29 th November 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction .
This is an appeal by way of case stated from the order of District Judge (Magistrates Court) Leake made on 1 st February 2022 in the Medway Magistrates' Court. On that day the District Judge made a liability order under the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 (“the 1989 Regulations”) against the Appellant (“Total Sprint”) in the sum of £511,120.33.
The order related to Units 19 – 20, Craft Marsh Trading Estate in Sittingbourne (“the Units”). The Respondent (“the Council”) is the rating authority for Sittingbourne.
The Factual Background in Summary .
On 12 th September 2019 the Council issued demand notices to Total Sprint for non-domestic rates on the Units in respect of the period 1 st April 2015 (later revised to 16 th April 2015) to 1 st April 2020.
On 9 th October 2017 and 30 th July 2018 the Council had obtained liability orders (“the Couriers Liability Orders”) against Sprint Couriers (Southern) Ltd (“Sprint Couriers”) in sums totalling £504,385.44. Those orders were also in respect of non-domestic rates on the Units and were for periods from 1 st April 2015 to 1 st April 2019. On 9 th September 2019 the Council sent Sprint Couriers demand notices for the periods covered by those liability orders showing a zero balance.
The Council made complaint to the Medway Magistrates' Court on 13 th January 2020 seeking the issue of a summons pursuant to regulation 12(2) of the 1989 Regulations against Total Sprint. At that date the liability orders against Sprint Couriers remained in being although the zero balance demand notices had been sent. Sprint Couriers had been placed in liquidation by court order on 30 th September 2019.
The Council had not disclosed the existence of the Couriers Liability Orders when it sought the issue of the summons against Total Sprint. As I will explain below the District Judge was critical of that omission and of a number of other aspects of the Council's conduct and of its actions in the proceedings. Those actions had necessitated a number of adjournments and repeated hearings: there were a total of six hearings spanning the period from 30 th January 2020 to 15 th December 2021.
The issues before the District Judge were whether the Council's conduct had amounted to an abuse of the process of the court; whether if there had been such abuse the summons should be stayed as a consequence; and whether, if the summons was not stayed, the requirements for the making of a liability order had been satisfied.
As a consequence of the District Judge's decision to attach no weight to the hearsay evidence which it had put forward there was no evidence to which weight could be attached from Total Sprint before the court.
The District Judge provided the reasons for his decision on 4 th April 2022. Those reasons were markedly comprehensive, clearly reasoned, and detailed. They ran to 303 paragraphs and 69 pages. They are to be read alongside the Case Stated of 12 th February 2023 consisting of 63 paragraphs and 26 pages. I will return to the reasons below but in essence the District Judge found that the Council's actions had amounted to abuse; concluded that on balance the summons was not to be stayed; proceeded on the footing that the burden of establishing that it was not in rateable occupation (and so not liable for the sums demanded) fell on Total Sprint as ratepayer; found that Total Sprint had failed to discharge that burden; and as a consequence concluded that the liability order was to be made.
The Issues .
I have to address four groups of issues to answer the stated questions.
i) Were the District Judge's findings as to the Council's failings and as to whether those failings amounted to abuse of process correct in law? Although the Council accepts that there was scope for criticism of its handling of the proceedings it does not accept that all the District Judge's conclusions in that regard were well-founded nor that its conduct amounted to abuse.
ii) Did the District Judge err in law in failing to stay the summons in light of the abuse of process? Total Sprint says that the gravity of the abuse of process on the Council's part was such that the only proper response for the District Judge was to stay the summons and that he erred in failing to do so.
iii) Which party bore the burden of proof on the question of rateable occupation? This issue turns on the proper construction of regulation 12 of the 1989 Regulations. The Council says that Total Sprint bore an evidential burden in this respect and had to adduce evidence properly putting the question of rateable occupation in issue. Total Sprint says that the burden was on the Council to establish on the balance of probabilities that Total Sprint was in rateable occupation.
iv) Was the District Judge's conclusion as to rateable occupation correct in law? The outcome on this issue will depend on the preceding issue. For Total Sprint Mr Clayton KC accepted that if his client bore the burden then the District Judge had approached the fact-finding exercise on the correct basis and that the judge's conclusion followed from the material before him. For the Council Mr Berragan did not suggest that the District Judge's factual finding could remain if he had approached the exercise of determining rateable occupation on the wrong legal basis.
The Legislative Framework .
The Local Government Finance Act 1988 makes provision for non-domestic rates and the 1989 Regulations were made pursuant to Schedule 9 of that Act.
The liability to pay non-domestic rates depends on rateable occupation of the premises in question. The four ingredients of rateable occupation are that there is actual occupation; that this is occupation which is exclusive for the particular purposes of the possessor; that the possession is of some value or benefit to the possessor; and that the possession is not too transient ( Cardtronics Europe Ltd v Sykes [2020] UKSC 21, [2020] 1 WLR 2184 at [13] approving the classic formulation of Tucker LJ).
The following provisions of the 1989 Regulations are of note.
Regulation 3(1) defines “the amount payable” thus:
“(a) the amount the ratepayer is liable to pay to the authority as regards the hereditament in respect of the year or part under —
(i) section 43 or 45 of the Act, whether calculated by reference to section 43(4) to ( 6) or 45( 4) or (4A) of the Act (as those provisions are amended or substituted in any case by or under Schedule 7A to the Act) or by reference to an amount or rules determined or prescribed under section 47(1)(a), 57A(3)(a) or 58(3)(a) of the Act; and
(ii) section 11 of the BRS Act, whether calculated by reference to section 13 of the BRS Act (chargeable amount) or determined in accordance with rules set by the levying authority under section 15 of the BRS Act (BRS relief); or
(b) where an amount falls to be credited by the billing authority against the ratepayer's liability in respect of the year or part, the amount (if any) by which the amount referred to in sub-paragraph (a) above exceeds the amount falling to be so credited;”
Regulations 4 and 5 provide respectively for demand notices and for their service.
Regulation 8 addresses a failure to pay by instalments with sub-regulations (1) and (2) providing thus:
“(1) Where –
(a) a demand notice has been served by a [billing authority] on a ratepayer,
(b) instalments are payable under the notice in accordance with [Schedules 1 or 1E] [or 1F], and
(c) any such instalment is not paid in accordance with [Schedules 1 or 1E] [or 1F], the [billing authority] shall (unless all the instalments have fallen due) serve a further notice on the ratepayer stating the instalments required to be paid.
(2) If, after the service of a further notice under paragraph (1), the ratepayer –
(a) fails to pay, before the expiry of the period of 7 days beginning with the day of service of the further notice, any instalments which fall due before the expiry of that period under the demand notice concerned, or
(b) fails to pay any instalment which falls due after the expiry of that period under the demand notice concerned on or before the day on which it so falls due, the unpaid balance of the estimated amount shall become payable by him at the expiry of a further period of 7 days beginning with the day of the failure.
…”
Regulation 10 defines a liability order as an order made under regulation 12.
Regulation 11 makes the following provision for reminder notices:
“(1) Subject to paragraph (3), before a [billing authority] applies for a liability order it shall serve on the person against whom the application is to be made a notice (“reminder notice”), which is to be in addition to any notice required to be served under Part II and which is to state every amount in respect of which the authority is to make the application.
(2) A reminder notice may be served in respect of an amount at any time after it has become due.
(3) A reminder notice need not be served on a person who has been served under regulation 8(1) with a notice in respect of the amount concerned where there has been such a failure...
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