5988/21 Insight Oct 2002

17/9/02

12:39 PM

Page 35

Legal Corner

As a result, regulation 54 creates a conflict between not only the

wording of the Local Government Act, Magistrates Courts Act and
Magistrates Courts Rules, but also with article 6 of the European
Convention for the Protection of Human Rights and Fundamental
Freedoms (the fair trial).
As a result, it is certainly necessary to serve different notices if there
are different addresses for each joint taxpayer.
In conclusion, joint bills, reminders, finals and so on may be issued,
provided that each taxpayer resides at the same address. However,
different summonses should be sent to each taxpayer, regardless of
whether they live at the same address or not, in order to comply with
article 6 of the European Convention.
In general, the same situation would apply with regard to business
rates. However, there is no provision similar to regulation 54.
In addition, regulation 4 of the Non-Domestic Rating (Collection
and Enforcement) (Miscellaneous Provisions) Regulations 1990,
SI no. 145 states:
"(2) Subject to paragraph (3) a reminder notice shall be served in
accordance with regulation 11(1) and (2) of the principal Regulations

on every person against whom an application for a liability order

is to be made.
(3 A reminder notice need not be served on a person who has been
served under regulation 8(1) of the principal Regulations (whether
jointly or severally) with a notice in respect of the amount concerned
where there has been such a failure by him as is mentioned in
regulation 8(2) (a) of those Regulations in relation to the notice."

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That seems to require that separate reminders/finals should be sent to

each ratepayer!
A failure to issue separate summonses on each taxpayer or ratepayer
(or reminders/finals for business rates) could provide a challenge to the
lawfulness of the enforcement rgime. It is a pity that council tax and
business rates regulations are so dissimilar and also that council tax
regulations are in direct conflict with both the Magistrates Courts Rules
and article 6.

Peter v Anderson (1814) held that where there is no indication from

the debtor, the creditor may apply payments as they think fit.
Albermarle Supply Co Ltd v Hind & Co (1928) held that, once an
election as to where a payment should be allocated, was made by a
creditor and communicated to the debtor, that allocation of payment
was irrecoverable by the debtor.
Stepney Corporation v Osowsky (1937) held that the debtor has first
choice over allocation of payments; that the choice may
be express or implied; and that the creditor cannot
Where should payments be allocated to the oldest exercise a discretion unless there is no indication by
the debtor.
or youngest debt, to current liability or to arrears?
R v Miskin Lower Justices (1953) held that where an
amount obviously relates to a specific liability, it would
be an unwarranted assumption to allocate the
There are some who do not believe that article 6 is relevant to
payment elsewhere.
applications for a liability order. They base that on the decision of the
Thus, if the amount of the payment identifies the debt, then it must
European Commissioners in RT v UK (1995) which related to community be allocated to that debt. Where the debtor states or implies that the
charge. Being a decision of the Commissioners, it does not carry any
payment should be allocated to a specific debt, the creditor must abide
binding precedent on the British courts. However, I am of the view that by that statement. Where the debtor does not make any reference as to
the decision is wrong, especially with regard to business rate cases.
where the payment should be allocated and the amount gives no clue,
then it is up to the creditor (local authority) to make the choice. In the
latter situation, Albermarle provides that the debtor cannot take issue
Allocation of cash
with the way in which the payment has been allocated.
This is often a difficult decision. A debtor who owes several debts may
There is total discretion afforded to the local authority, but only
make a payment which equates to neither an installment or repayment
where there is no indication by either the amount of the payment or by
plan, nor to a balance outstanding. I am often asked where payments
the indications from the debtor
should be allocated to the oldest or youngest debt, to current liability
or to arrears?
Paul Russell is a consultant and trainer. He can be contacted on
There is no council tax or business rate regulation which relates to
paul_russell.birmingham@virgin.net
the allocation of cash. Case law has held as follows:
The views given in this column are personal views
and should not be construed as a legal opinion

Insight October 2002

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