Grimsby Magistrates Court

Claimant

North East Lincolnshire Council

V
Defendant

xxxxxxxxxxx

Application for Liability Order

1.

North East Lincolnshire Council application for Liability Order:

2.

The person who is liable to pay Council Tax in respect of any chargeable dwelling
and any day, is the person who falls within the first paragraph of subsection (2) below
to apply, talking paragraph (a) of that subsection first, paragraph (b) next, and so on.
(2) A person falls within this subsection in relation to any chargeable dwelling and
any day if, on that day
(a) He is a resident of the dwelling and has a freehold interest in the whole or any part
of it;
(b) He is such a resident and has a leasehold interest in the whole or any part of the
dwelling which is not inferior to another such interest held by another such resident;
(c) He is both such a resident and a statutory [F1, secure or introductory tenant]of the
whole or any part of the dwelling;
(d) He is such a resident and has a contractual licence to occupy the whole or any part
of the dwelling;
(e) He is such a resident; or
(f) He is the owner of the dwelling.
Section 6, Paragraph (1) & (2) of the Local Government Finance Act 1992.

3.

The Secretary of State may make regulations containing such provisions as he sees fit
in relation to the collection and recovery of amounts persons are liable to pay in
respect of Council Tax; Paragraph 1, Schedule 2 to the Local Government Finance
Act 1992.

4.

(1) Regulations under paragraph 1(1) above may provide that

(a) The authority concerned may apply to a magistrates court for an order (a
liability order) against the person by whom the sum is payable;
(b) the magistrates court shall make the order if it is satisfied that the sum has
become payable by the person concerned and has not been paid.
Paragraph (1)a & b Section 6, Schedule 4 to the Local Government Finance Act
1992.

5.

On the 9th March 2015 the Defendant was issued with a Council Tax Bill (NELC1) for
the period 01st April 2015 to the 31st March 2016 for the property known as
xxxxxxxxxxx

6.

The amount charged for the period being 907.91

7.

At this juncture it is also important to point out that the defendant had a further
amount of 60.00 outstanding in regards costs relating to a Liability order application
granted on the 2nd November 2012.

8.

2.(1) This paragraph applies where the demand notice is issued on or before 31st
December in the relevant year, but has effect subject to paragraph 3 below.
(2) The aggregate amount is to be payable in monthly instalments.
(3) The number of such instalments
(a)where the notice is issued before the beginning of the relevant year or at any time in
the period beginning on the first day of that year and ending on 31st May of that year,
shall be 10;
(a)where the notice is issued before the beginning of the relevant year or at any time in
the period beginning on the first day of that year and ending on 31st May of that year,
shall be 10;
Paragraph 2, Part 1, Schedule 1 to The Council Tax (Administration and
Enforcement) Regulations 1992

9.

The 10 month statutory instalments where set out as so:

10.

First Payment 1st April 2015

9 Payments due thereafter on the first of every month

88.91
91.00

11.

The made payment of 88.91 on the 10th April 2015 and a further payment of 91.00
on the 22nd April 2015. Both payments being for the correct amounts and in adherence
to the first two statutory instalments set out on the Defendants Council Tax Bill.

12.

The Defendants next payment was received on the 29th May 2015 for an amount of
85.00. This amount was not the amount of the statutory instalment on the Council
Tax Bill. Due to this the payment was allocated by North East Lincolnshire Councils
Council Tax database (Northgate) as follows:

13.

60.00 allocated to the 60.00 costs outstanding in from the Liability Hearing in
November 2012.

14.

25.00 allocated to the Current years Council Tax Bill for the period 01st April 2015 to
31st March 2016.

15.

As of the 1st June 2015 25.00 had been paid to the 91.00 statutory instalment,
leaving a 66.00 to be paid.

16.

On the 2nd June 2015 a further 7.00 was paid by the defendant, leaving a further
59.00 still to be paid to the statutory instalment for June 2015.

17.

23.(1) Subject to paragraph (2), where

(a) a demand notice has been served by a billing authority on a liable person, .
(b) instalments in respect of the council tax to which the notice relates are payable in
accordance with Part I of Schedule 1 or, as the case may be, a Part II scheme, and .
(c) any such instalment is not paid in accordance with that Schedule or, as the case
may be, the relevant scheme, .
the billing authority shall serve a notice (reminder notice) on the liable person
stating
(i) the instalments required to be paid,
(ii) the effect of paragraph (3) below and .
Part 5, Regulations 23, Paragraph 1 to the Council Tax (Administration and
Enforcement) Regulations 1992

18.

(3) If, within the period of 7 days beginning with the day on which a reminder notice
is issued, the liable person fails to pay any instalments which are or will become due
before the expiry of that period, 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.
Part 5, Regulations 23, Paragraph 3 to the Council Tax (Administration and
Enforcement) Regulations 1992

19.

In accordance with the regulations a reminder notice for 59.00 was sent to the
Defendant on the 12th June 2015. The reminder notice sent to the defendant can be
seen as (NELC2).

20.

No communication was received from the Defendant.

21.

A further payment of 90.00 was paid by the defendant on the 2nd July 2015.

22.

This payment cleared the 59.00 arrears on the Reminder notice and allocated a
further amount of 31.00 to the 1st July 2015 statutory instalment.

23.

The amount left outstanding for the 1st July 2015 statutory instalment was 60.00.

24.

23.(1) Subject to paragraph (2), where

(d) a demand notice has been served by a billing authority on a liable person, .
(e) instalments in respect of the council tax to which the notice relates are payable in
accordance with Part I of Schedule 1 or, as the case may be, a Part II scheme, and .
(f) any such instalment is not paid in accordance with that Schedule or, as the case
may be, the relevant scheme, .
the billing authority shall serve a notice (reminder notice) on the liable person
stating
(i) the instalments required to be paid,
(ii) the effect of paragraph (3) below and .
(iii) where the notice is the second such notice as regards the relevant year, the
effect of paragraph (4) below.
Part 5, Regulations 23, Paragraph 1 to the Council Tax (Administration and
Enforcement) Regulations 1992

25.

(4) If, after making a payment in accordance with a reminder notice which is the
second such notice as regards the relevant year, the liable person fails to pay any
subsequent instalment as regards that year on or before the day on which it falls due,
the unpaid balance of the estimated amount shall become payable by him on the day
following the day of the failure.
Part 5, Regulations 23, Paragraph 3 to the Council Tax (Administration and
Enforcement) Regulations 1992

26.

The 2nd Reminder notice in accordance with the regulations was sent to the Defendant
on the 14th July 2015 for the amount of 60.00. The 2nd Reminder sent to the
defendant can be seen as (NELC3)

27.

No Contact was received from the Defendant.

28.

Two separate payments were made by the defendant on the 31st July 2015. The first
payment being for 7.00 and the second for 85.00.

29.

The 7.00 reduced the 60.00 arrears to 53.00.

30.

53.00 of the further 85.00 payment was cleared the outstanding amount of the
arrears.

31.

The 32.00 was then allocated to the 1st August 2015 statutory instalment. Leaving an
overdue amount of 59.00.

32.

No further payment was received in August 2015.

33.

33.(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
(final notice), which is to be in addition to any notice required to be served under
Part V, and which is to state every amount in respect of which the authority is to make
the application.
(2) A final notice may be served in respect of an amount at any time after it has
become due.
(3) A final notice need not be served on a person who has been served under
regulation 23(1) with a reminder notice in respect of the amount concerned.
Part VI, Regulations 33 to the Council Tax (Administration and Enforcement)
Regulations 1992.

34.

A Final Notice was sent to the defendant on 12th August 2015. The Final Notice
sent to the defendant can be seen as (NELC4)

35.

The amount outstanding being 514.00.

36.

As per the statutory Final Notice the Full Amount wholly or partially paid becomes
payable in full.

37.

No Contact was received from the Defendant.

38.

A further payment was paid by the defendant on the 2nd September 2015 for 90.00.

39.

The payment reduced the outstanding amount of 514.00 to 424.00.

40.

34.(1) If an amount which has fallen due under regulation 23(3) or (4) is wholly or
partly unpaid, or (in a case where a final notice is required under regulation 33) the
amount stated in the final notice is wholly or partly unpaid at the expiry of the period
of 7 days beginning with the day on which the notice was issued, the billing authority
may, in accordance with paragraph (2), apply to a magistrates' court for an order
against the person by whom it is payable.
(2) The application is to be instituted by making complaint to a justice of the peace,
and requesting the issue of a summons directed to that person to appear before the
court to show why he has not paid the sum which is outstanding.

41.

Complaint was laid before the Clerk to the Justices on the 9th September 2015 and
subsequently Summons were issued. The Summons sent to the defendant can be seen
(NELC5).

42.

The Summons states the amount outstanding of 424.00 and 60.00 Summons Costs,
equalling 484.00. It also made the defendant aware there would be a liability hearing
on the 2nd October 2015 at the Grimsby Magistrates Court.

43.

No Contact was received from the Defendant.

44.

A further payment of 91.00 was paid by the defendant on the 30th September 2015.

45.

Therefore the application for a liability order including costs was for 393.00.

46.

The defendant alleges that the recovery notices and subsequent Final Notice and
Summons have occurred die to misallocation of his payments.

47.

It is North East Lincolnshire Councils contention that there has been no misallocation
of payments in this case.

48.

A person who is indebted to another on two several accounts, may, on paying him
money, ascribe it to which account he pleases.And his election may either be
expressed, Or may be inferred from the circumstances of the transaction. But if
the payer does not. pay specifically on one account, the receiver may afterwards
appropriate the payment to the discharge of either of the accounts that he pleases.
And if he sue on each account, semble that he thereby declares his election, and the
Defendant cannot, by a subsequent notice of set-off, elect to which account he will
ascribe the payment.
Peters v Anderson 1814, 823 paragraph 1

49.

The defendant makes reference to the above case however it is noted that the
defendants quote from the Peters V Anderson case is paraphrased and does not
include the full description as set out in the original text. Original text of Peters and
Anderson can be seen as (NELC6)

50.

It clearly states that if the payer does not pay specifically The Northgate system is
set up as per the Peters V Anderson case. It asks for a specific payment is made so
that the allocation can be made correctly. If payment is made as per the statutory
instalment due, the payment will allocate to that instalment plan.

51.

This allocation system also helps if there are further debts owing on the account.

52.

If a person was to have current years bill of 100 per month and arrangement on a
previous years amount for 30 per month then as long as the Debtor makes the correct
payment of the 100.00 and 30.00 the amount will be allocated to the debts which
the Debtor makes his election by the expressed payments made.

53.

The fail-safe of this system is if the payments are not made as per the regulations a
Reminder notice is sent to the payee.

54.

At this point it would be reasonable, as it is the defendants liability, for him to contact
the Council and express his election that the payment be allocated differently.

55.

The defendant made no attempt to make his election after receiving notices in June
July and August and subsequently the Summons and as per Peters V Anderson the
receiver of the payment, North East Lincolnshire Council, appropriated the monies
paid.

56.

Further case law establishes that Northgate allocates unspecified payments correctly.

57.

The case of Peters V Anderson 1814 is one of the earliest cases that deals with the
appropriation of payments, further case laws sets somewhat of a precedent for the
appropriation of payments for creditor and debtors.

58.

The case of Devaynes V Noble 1816 merivale 529 (Claytons Case), it established the
basic rule of 'first-in, first-out'. In further terms payments are presumed to be
appropriated to debts in the order which the debts are incurred. If no election is made
the earliest debts are paid first (NELC7).

59.

It is the first item on the debit side of the account, that is discharged, or reduced, by
the first item on the credit side. Devaynes V Noble 1816 merivale 529 *608

60.

This point is further carried forward in the case of Cory Brothers and Company,
Limited Appellants; V The Owners of the Turkish Steamship "Mecca" Respondents.
The "Mecca" 1897 A.C. 286.(NELC8)

61.

When a debtor pays money on account to his creditor and makes no appropriation to
particular items, the creditor has the right of appropriation and may exercise the right
up to the last moment, by action or otherwise; Cory Brothers and Company, Limited
Appellants; V The Owners of the Turkish Steamship "Mecca" Respondents. The
"Mecca" 1897 A.C. 286

62.

Again it is clear that it is the creditor / payee that should make their election clear at
the point of making payment.

63.

In the case brought before you today the defendant had 3 months to make his election
clear however he did not.

64.

It is also noticeable that on the 16th October 2014 the defendant sent an email to the
Council with regards to expressing his election on a payment made to an earlier Bill
which due to not paying the specific amount was allocated to the earlier amount
outstanding. The email can be seen on as (NELC9).

65.

On that occasion the amount was allocated on the defendants request.

66.

This is also shown by the extract from the 'Bailiff Help' forum, 20th April 2013 to 21st
May 2013,(NELC10) clearly showing an awareness of the need to make an election
of payment .

67.

Further evidenced by 'Legalbeagle' post on 2nd October 2015 (NELC11). This shows
that the defendant is well aware of how the Northgate system works and that he is
aware that he needs to make his election if the payment made is not specifically as set
out in the statutory instalment scheme.

68.

The Council is aware that the defendant has taken matters further with regards to
disputing the 60.00 costs incurred from November 2012.

69.

Correspondence received from the defendant as of 20th November 2013 stated

that he had withdrawn his application for the Judicial review of the costs (NELC12)

70.

Given this the Council no longer held action in attempting to recover the outstanding
amount.

71.

Thus in October 2014 when the defendant made a non-specific payment the amount
was allocated to his costs until the defendant contacted the Council and made his
election clear.

72.

An appropriation of a payment cannot be inferred from an intention in the mind of the

debtor un-communicated to the creditor. It can only be inferred from circumstances
known to both parties. Leeson V Leeson 1936 K.B156 (NELC13).

73.

As of the letter from the Defendant regarding his withdrawal of the Judicial review
North East Lincolnshire Council had no further reason to believe that the costs were
being disputed and the allocation of unspecified amounts was made in accordance
with Peters V Anderson.

74.

It is on these authorities that North East Lincolnshire Council would state that the
monies, have, due to the defendants non-election or expression, been allocated
correctly and that North East Lincolnshire Council, have adhered to the Local
Government Finance Act 1992 and the Council Tax (Administration and
Enforcement) Regulations 1992 in issuing recovery notices and applying for a
Liability Order.

75.

This statement is true to the best of my knowledge and belief.

Signed:

On Behalf of North East Lincolnshire Council