Royal Borough of Greenwich (18 011 395)

Category : Benefits and tax > Council tax

Decision : Upheld

Decision date : 20 Mar 2020

The Ombudsman's final decision:

Summary: Ms E complains about how the Council has enforced an old council tax debt. We question whether the Council correctly issued the summons. And, in any case, Ms E can no longer get records to prove her assertion she paid the debt at the time. So, our view is it is not fair to now collect the debt.

The complaint

  1. The complainant, whom I shall refer to as Ms E, complains that:
  • She is not liable for a 2007 Council Tax debt the Council was taking enforcement action about.
  • The liability order was invalid, as it made her liable for a time she was not in the property.
  • She remembers telephoning the Council at the time and being told she did not owe anything. But she cannot now prove this, due to the passage of time.

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The Ombudsman’s role and powers

  1. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
  2. We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
  3. We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, as amended)
  4. We cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended).
  5. We cannot investigate a complaint if someone has appealed to a tribunal. (Local Government Act 1974, section 26(6)(a), as amended) Where proceedings that have been taken are misconceived the Ombudsman retains jurisdiction.
  6. The Valuation Tribunal deals with appeals against decisions on council tax liability and council tax support or reduction.
  7. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

  1. As part of the investigation, I have:
    • considered the complaint and the documents provided by Ms E;
    • made enquiries of the Council and considered its response;
    • spoken to Ms E;
    • sent my draft decision to Ms E and the Council and considered their responses.

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What I found

Legal and administrative background

Council tax

  1. Council tax is a tax made on domestic properties. Councils issue one bill to each household. Residents of dwellings, including tenants, are usually liable for council tax from the date they moved into the property.
  2. Where a sum of council tax is unpaid, a council may seek an order from the magistrates’ court known as a liability order. This confirms the amount owed and who is liable to pay it. When a liability order has been made, a council has several alternatives available to pursue the debt. One option is to instruct enforcement agents. (Regulation 45 of the Council Tax (Administration and Enforcement) Regulations 1992)
  3. The law says that councils can serve a document about billing or enforcement of council tax by delivering it in person, leaving it at the person’s proper address, or sending it by post to their proper address. Proper address is taken to be the last known address. There is no need to use registered or recorded post. Unless the contrary is proved, a document is deemed to have been served by post when it would be delivered in the ordinary course of post. (Local Government Act 1972 (Section 233); Regulation 35(2) of The Council Tax (Administration and Enforcement) Regulations 1992; The Interpretation Act 1978 (Section 7))
  4. Section 7 of the Interpretation Act 1978, says:

“…where an act authorises any document to be served by post, unless the contrary intention appears, the service is deemed to be effective by properly addressing, prepaying and posting a letter containing the document; and, unless the contrary is proved, is deemed to have been effected when the letter would have been delivered in the ordinary course of post.”

  1. In one case the court said that councils should take reasonable steps to find out the place of abode of a person. (R) Tull v Camberwell Green Magistrates’ Court and Lambert London Borough Council (QBD November 2004)

Recovery of debts

  1. The Limitation Act gives a creditor a set amount of time to recover a debt. For unsecured debts, the time limit is six years, from the last time a debtor acknowledged a debt or made a payment. If a creditor does not take court action within that time the debt becomes unenforceable (it is “statute barred”).
  2. One appeal case said there is no time limit to recovery action on council tax debt, once a liability order has been granted: the Limitation Act 1980 does not apply. Ridgeway Motors (Isleworth) Ltd v ALTS Ltd, (2005 EWCA Civ 92 A)

What happened

  1. Ms E moved to a new tenancy (Address 1). She advised the council about this in March 2007.
  2. On 26 April 2007 Ms E moved to a new tenancy in a different borough. She says, before she moved, she contacted the Council. She says the officer she spoke to advised her she had no council tax to pay on the Address 1 account. The Council’s records, which I have seen, have no record of this contact, or any other from Ms E telling it she had moved out.
  3. The Council’s records show that in early August, it sent Ms E a reminder notice, to Address 1, as she had not paid her council tax. It is unclear from its records why there was a delay in it chasing this payment.
  4. The Council issued a summons to Address 1 for non-payment, on 28 August. Its records have a note from 6 September that reads:

“trace ltr sent to ll – ac closed as per g/w returned from the property dated the 3rd Sept – occ form also sent to the property.”

  1. On 17 September the magistrates’ court granted the Council a liability order for the Address 1 debt, which included costs. The amount Ms E owed was £587.29.
  2. The Council’s next notes on the account are from November and December 2007 and February 2008, when it made some efforts to trace Ms E. It was not successful.
  3. The next record on the account is from 16 August 2018. This shows that some new technology had found an address for Ms E. The Council added that address to the council tax account and billed Ms E.
  4. After this, Ms E and a Council officer exchanged several emails. The officer asked Ms E for proof that she had moved out of the address in April 2007 (at first the Council was billing her for a period to September 2007). Ms E also told the officer she had paid the account at the time. She later told the officer she could not prove this, as her bank told her it only kept records going back ten years.
  5. As a result of this communication and Ms E’s complaint to the Council, it decided to accept the evidence she provided it about when she moved out. This reduced the amount Ms E owed to £242.99.
  6. Ms E continued to dispute her liability, so she appealed to the Valuation Tribunal. But in June 2019 the Tribunal decided to strike the appeal out, as it did not have jurisdiction over matters of payment and collection.
  7. In July 2019, a Council court officer offered to cancel the 2007 liability order (and so its costs) reducing the amount Ms E owed to £147.99.
  8. Ms E continued to maintain she had paid, so she complained to the Ombudsman.

Analysis

  1. The Local Government Act 1974 sets out our powers but also imposes restrictions on what we can investigate. So, I first need to consider several jurisdiction matters.

The time limit for complaining to the Ombudsman

  1. Part of this complaint is about what happened in 2007. This would normally be outside the Ombudsman’s jurisdiction. But here I accept Ms E was not aware of the problems with her council tax until August 2018. Ms E first contacted us in July 2019; within 12 months of that date. So the 2007 issues are matters I can look at.

The appeal to the Valuation Tribunal

  1. We cannot investigate a complaint if someone has appealed to a tribunal. But my view is that restriction does not apply here. This is because Ms E’s appeal was misconceived, as the Tribunal had no jurisdiction to look at whether she had paid the debt.

The Court action to enforce the debt and obtain a liability order

  1. The Local Government Act also says we cannot look at the start of court action. The restriction begins from the serving of a summons. The exclusion of court proceedings from the Ombudsman’s jurisdiction is intended to prevent us considering matters courts (using different evidential standards) consider, using the more restrictive test of legality, as opposed to maladministration.
  2. But there is no prohibition on an investigation about whether, had fault not occurred, court proceedings could have been avoided. This is because, in such cases, the court proceedings are the injustice as opposed to the fault. And the Ombudsman can investigate matters before the issue of a summons.

The serving of the summons

  1. My reading of the note I have quoted in paragraph 20 suggests the summons the Council sent to Address 1 was returned. The Council has not challenged this. That means it knew, before the liability order hearing, that there was a doubt about whether Ms E had received the summons for that hearing. So my view is that, at a minimum, it should have paused its enforcement to investigate further.
  2. Ms E could apply to a court to have the liability order set aside. But my view is it is not reasonable to expect her to do so. The delayed enforcement action means she would face obstacles to providing the evidence to the court to challenge the enforcement process.
  3. By not pausing enforcement action when the summons was returned, there is the likelihood, on the balance of probabilities, the Council did not correctly serve the summons. That would mean the liability order was not valid. And that, in turn, would raise the possibility the debt is now unenforceable (statute barred). However, that is a matter a court would need to decide.

The delay in taking enforcement action

  1. The Ombudsman’s view is councils have a right to collect debts owed to them. But they need to do this fairly, considering the debtor’s rights.
  2. My view is the Council is at fault as it delayed in taking action to trace Ms E. It took no action on the account for around 10 years. I acknowledge the Council’s explanation of new technology it had in 2018. But there were methods available to trace debtors in the late 2000s. So, on balance, my view is the Council’s delay is excessive and poor administrative practice.
  3. Ms E says the Council’s delay in enforcing this debt means she cannot now get the proof that, as she maintains, she paid the council tax at the time. My view is it cannot be fair for the Council to collect the debt when its own delay has prevented Ms E from being able to challenge it.

Agreed action

  1. I recommended the Council wipe out the debt and associated charges that Ms E is disputing. The Council has agreed to this recommendation.

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Final decision

  1. I uphold this complaint. The Council has agreed to my recommendation, so I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman

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