20 January 2014

Recovery of Court Costs Council Tax Liability Orders

1. When recovering unpaid sums of Council Tax, the Council is the complainant. See section 51
of the Magistrates Courts Act 1980 (the 1980 Act) and rules 34 and 14 of the Magistrates
Courts Rules 1981.
2. The starting point for costs recovery is section 64 of the 1980 Act. This allows the Court on
hearing a complaint to make such order as to costs -
a. On making the order for which the complaint is made, to be paid by the defendant
to the complainant;
b. On dismissing the complaint, to be paid by the complainant to the defendant,
as it thinks just and reasonable; but if the complaint is for an order for the periodical
payment of money, or for the revocation, revival or variation of such an order, or for the
enforcement of such an order, the court may, whatever adjudication it makes, order either
party to pay the whole or any part of the others costs.
3. Section 64 (2) states that the amount of costs ordered to be paid shall be specified in the
order concerned.
4. The Council Tax (Administration and Enforcement) Regulations 1992 (as amended) make
further provision as to costs, specifically in regulation 34. First, regulation 34(2) confirms
that the process of applying for a liability order is commenced by a complaint. Although not
strictly relevant to the point in issue, it is worth noting that regulation 34(3) dis-applies the
usual six month time limit for commencing proceedings by way of complaint and replaces it
with a six year limitation period.
5. Regulation 34(6) & (7) state that on an application for an order, if satisfied that the sum has
become payable by the defendant and has not been paid, the Court shall make an order
equal to the aggregate of
a. The sum payable, and
b. A sum of an amount equal to the costs reasonably incurred by the applicant in
obtaining the order.
6. Regulation 34(8) states that if the sum payable is paid after the proceedings are commenced
but before the order is made, the court shall (if requested by the billing authority) make the
Order in relation to costs.
7. In Wales, with effect from 1 April 2011, the amount of costs which the Court may order
under regulation 38 paragraphs (7) & (8) is capped at a prescribed amount of 70.00. (see SI
2011/528 which adds the following words to the end of each of paragraph:
(which costs, including those of instituting the application under paragraph (2), are
not to exceed the prescribed amount of 70.00).
8. Whilst those provisions do not apply in England the situation is somewhat complicated by
the fact that in the 2012 and 2013 volumes of Stones Justices Manual insert those words
into the regulations without explaining their limited application.
9. I have not considered the provisions relating to National Non-domestic Rates in detail
however, SI 2011/528 added the same words to the end of regulation 12(6) & (7) of the
Non-domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 in so far as
they relate to Welsh billing authorities. Again, the situation is not helped by Stones Justices
20 January 2014

Manual which inserts those words in to the 1989 regulations without explanation as to their
territorial extent.
10. Given the absence of a prescribed costs limit in England (at least for the time being) the
ordinary principles which apply under section 64 of the 1980 Act will regulate the Courts
discretion as to the amount it Orders.
11. The general presumption as set out in paragraph 2 above, is the loser pays the winners
costs. That general rule is subject to the test of:
a. What is just; and
b. What is reasonable?
12. The conduct of the parties will clearly be relevant to determining these factors. Case law
demonstrates that the Courts discretion as to what may be included in those costs is quite
wide. For example it may include the costs of the complainants solicitor and witnesses (R v
Pwllheli Justices ex p Soane [1948] 2 All ER 815). An Order for costs is in two stages:
a. The primary decision that an order for costs will be made; and
b. Quantification of the amount of such an order.
13. Usually the two decisions will be made together and in quick succession following an
application from the party concerned however, once the first decision is made the Courts
order is incomplete and, in the interim prior to completing it, the Court can take account of
addition material (from either party) if it is appropriate to do so (Blustarling Ltd v
Westminster Justices (1996) Times 24 July).
14. To prepare for subsequent applications for costs the following will be required:
a. The Council should prepare a breakdown of the costs incurred in obtaining liability
orders showing
i. Staff costs;
ii. Bill production;
iii. Stationery and postage;
iv. Court fees (3.00 per application)
v. Any other reasonable costs.
b. The Council should show any steps is has taken to recover the outstanding sum
(especially noting any steps which are beyond the minimum statutory requirement).
c. The conduct of the defendant e.g. failure to keep to arrangements to pay the
outstanding sum.
15. Provided we can clearly show:
a. The sum concerned has actually been incurred;
b. It is a reasonable sum for the work in question;
c. That the Council has behaved reasonably in pursuing the sum due;
d. The extent to which the debtor has not behaved reasonably; and
e. That the amendment introducing the cap relates only to Wales
Then the prospect of recovering the costs is as good as it can be.
Clive Tobin
Senior Solicitor
Luton Borough Council