A Liability Order hearing is the first step in the process of enforcing the tax.
The legislation covering the Liability Order process is contained in:
Regulation 33 Council Tax (Administration & Enforcement) Regulations 1992 ~ Preliminary steps
The Council Tax (Administration and Enforcement) (Amendment) (Wales) Regulations 2004
The Council Tax (Administration and Enforcement) (Amendment) (England) Regulations 2004
There are a number of procedural issues which need to be addressed if the authority is to successfully obtain a liability order in all applications made to the Court.
Over the years a large amount of case law has been established especially in the area of local taxation. cases which apply to General rates, Community Change, Non Domestic rates are applicable as well as those directly connected with Council Tax.
Following the correct procedure in this area is essential and all staff who attend Magistrates Court must be well prepared
The Liability Order hearing may proceed in the taxpayer's absence. It will therefore be essential for the authority to adequately prove that all documents have been Issued & served as appropriate
The Council must have a representative who has delegated powers under S233 Local Government Act 1972 and that person must be authorised.
The Court is composed of a number of Justice of the Peace for an area within which a Authority falls.
Normally two JPs will hear the case except where a stipendiary magistrate sits Reg 53.
See also the Role of the Magistrates
If an amount is paid after the application but before the order is issued then the Council may apply for costs.
Normally the Liability Order will include the amount outstanding plus reasonable costs.
Reasonable costs are normally agreed between the Council and the Magistrates Court annually.
It is essential that any officer attending the court familiarises themselves with the following topics:
Evidence to be given by the Authority
Defences available to the Debtor
Statement of Case for opinion of the High Court
There is no general rule to postpone the issue of a liability order nor suspend the execution if once issued correctly
There is also no power to refuse on the grounds of hardship or remit the tax at this stage
HACKNEY LONDON BOROUGH COUNCIL v IZDEBSKI (1988) HACKNEY LONDON BOROUGH COUNCIL v IZDEBSKI (1988)
The rating authority made application for a distress warrant in respect of unpaid rates for the period 1st April 1986 to 8th January 1987 on an unoccupied property leased to the ratepayer. The justices found in favour of the ratepayer and refused to issue the warrant.
The magistrates further determined that the outstanding amount should be remitted on the grounds of hardship. The power to remit rates was then, as now, statutorily provided for in circumstances where an application for a warrant of commitment had been made, and there was no provision for remission at the
stage of the consideration of an application for a liability order
The ratepayer contended at the hearing before the magistrates that an assignee, who ultimately became liable on 1st March 1987, had been in occupation since the summer of 1986, and he argued that it would be oppressive to issue a distress warrant for a period from that time, particularly in the light of his difficulties in assigning the lease and on account of his financial hardship.
The justices found that the ratepayer had “suffered emotional and financial hardship” and, on that basis, they refused to issue a distress warrant and remitted the whole amount due. The rating authority appealed against that decision.
At the hearing before the High Court, the justices conceded that, as a matter of law, the warrant should not have been refused, neither should the amount in question have been remitted. The High Court found that it was not open to the justices, upon an application for a distress warrant, to remit the sum claimed, and that their jurisdiction upon the making of such an application was extremely limited.
Bingham LJ said that if the authority “is shown to have jurisdiction to make a rate, and no objection to the rate is apparent on the face of the demand, a warrant of distress may not be refused by justices on the grounds of hardship by the ratepayer”. He added that it was clear, in his judgment, “that hardship or inability to pay is not a ground upon which the justices may rely at that stage in declining to issue a warrant”.
It was held that the justices had no power to refuse to issue a distress warrant in this case, neither had they power to remit any sum to which the application for the warrant related. The rating authority’s appeal was allowed.
Following the creation and issue of summonses in respect of outstanding council tax accounts it is necessary to produce an up to date (revised court list) prior to the date of court.
In order to ensure that the information on the revised court list is as up to date as possible, the revised
In all cases the authority must establish the reasons why the case was lost and determine whether there should be further action
Where it is considered appropriate the authority may apply for a Statement of Case for opinion of the High Court
It can emerge, after a liability order has been made, that a mistake has occurred, for example, the taxpayer may later find receipts proving that he had paid. In such cases a billing authority will take no further action.
However, some taxpayers view the liability order as an unwarranted stain on their character and demand that the order be deleted from the record. At present, this can only be achieved on application to a higher court. The cost involved is unwarranted where there is no dispute about the facts.
A new regulation 36A has been inserted into the principal regulations to enable the quashing of a liability order that has been made in error and the substitution of a liability order with one of a lesser amount.
The Council Tax (Administration and Enforcement) (Amendment) (Wales) Regulations 2004
The Council Tax (Administration and Enforcement) (Amendment) (England) Regulations 2004
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