Summary: The Council instructed enforcement agents to recover council tax when it could not as it already had a charging order for the debt. It caused the complainant a good deal of unnecessary distress, time and trouble. The Council will apologise and write off £750 of council tax arrears.

The complaint

1. Mr X complains the Council has mismanaged his Council Tax account. He says it has ignored a charging order it has on his property for unpaid Council Tax, resulting in a referral to Enforcement Agents.

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The Ombudsman’s role and powers

2. 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)
3. We investigate complaints about councils and certain other bodies. Where an individual, organisation or private company is providing services on behalf of a council, we can investigate complaints about the actions of these providers. (Local Government Act 1974, section 25(7), as amended)
4. 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

5. I considered information from Mr X and discussed the complaint with him. I asked the Council for information and considered what it provided.
6. Mr X and the Council had the opportunity to comment on a draft version of my decision. I considered what they say before I made a final decision.

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What I found

Council tax recovery

7. Before a council can pursue someone for council tax it must send a demand. If a taxpayer misses a payment, the council must issue at least one reminder notice before issuing a summons for a liability order in the magistrates’ court. If the council has a liability order and the debtor does not pay the council can recover the debt.
8. There are several ways a council can recover the debt. These include referring the debt to enforcement agents and putting a charge on the tax-payer’s home. A Council can only take one action at a time. (Council tax (Administration and Enforcement) Regulations 1992 Regulation 52)
9. If a council has one or more liability orders and the total debt is over £1,000 it may ask the county court for a charging order on the property. This is a legal charge, like a mortgage, it is registered with the Land Registry and, must be paid off when the property is sold. (Council tax (Administration and Enforcement) Regulations 1992 Regulation 50)
10. The council can first ask for an interim charging order, which if granted means the taxpayer cannot sell their home without the written permission of the council. The council can then ask the court for a final charging order. The Council Tax Regulations do not distinguish between an interim and final order. If a council has either it cannot take another type of enforcement action.
11. The Government’s website says there is usually no need to register a final order with the Land Registry if the applicant has already registered an interim charge.

The Taking Control of Goods Regulations 2013

12. Before taking control of goods (in other words visiting to take goods) an enforcement agent must issue a notice of enforcement on the debtor seven clear days before the agent takes control of goods. This is the compliance stage. Once an agent makes a first visit the compliance stage is over and the enforcement stage has begun.
13. An enforcement agent can take control of goods on property he has the power to enter and re-enter. This is the property the agent reasonably believes the debtor usually lives at or carries on a business at. Entry to property should be by the normal means of entry for example a door or gate and the agent cannot use force.
14. An agent can only take control of goods by securing them on the property or highway, removing the goods or making a controlled goods agreement with the debtor. The agent must give the debtor a notice with details of the agent and say if the agent has entered the property, and/or taken control of goods. If the agent has taken control of goods, he must give the debtor a list of goods he has taken control of. He also needs to say what the debtor owes and how, where and when the debtor can pay the debt to release the goods.
15. If the debtor does not pay or keep to an agreed arrangement the agent can move to the removal and sale stage. The agent does not have to remove goods to start this stage; just attend intending to remove. But he must have already taken control of the goods.
16. An agent can re-enter to remove goods already taken control of but must give notice at least two clear days before doing this. The agent must sign the notice and give the following information:

(a) the name and address of the debtor;

(b) the reference number or numbers;

(c) the date of the notice;

(d) enough details of the controlled goods agreement, the repayment terms of which the debtor has failed to comply with, to enable the debtor to identify the agreement correctly;

(e) how the debtor has failed to comply with the repayment terms of the controlled goods agreement;

(f) the amount outstanding on the date of the notice;

(g) how and between which hours and on which days the debtor can pay the debt;

(h) a contact telephone number and address at which, and the days on which and hours between which, the debtor can contact the enforcement agent or the enforcement agent’s office;

(i) the date and time by which the debtor must pay the debt to prevent the enforcement agents inspecting or removing the controlled goods storage or sale; and

(j) that the enforcement agent may if necessary use reasonable force to re-enter the property to inspect the goods or remove them for storage or sale.

17. The Government has set standard fees for enforcement agents. These are £75 for the compliance (letter) stage and £235 for the enforcement (visits) stage and £110 for the sale and disposal stage. (The Taking Control of Goods (Fees) Regulations 2014)
18. Enforcement agents must not misrepresent their powers.

What happened

19. Mr and Mrs X own their home. At times Mr X lived apart for his wife. Between 2006 and 2011 the council tax account was in Mrs X’s sole name. The Council put Mr X back on the council tax account in 2011.
20. In March 2010 the Council wrote to Mrs X, saying she owed £1751 council tax for 1 April 2008 until 31 March 2010. It said it intended to apply for a charging order.
21. In July 2010 external solicitors acting for the Council got an interim charging order against Mr and Mrs X’s home. The charging order only names Mrs X. The solicitors registered the interim charge with the Land Registry on 12 August 2010. The register gives no details of the debt.
22. In August 2010 the solicitors wrote to the Council asking if it should go ahead with the final charging order at court on 31 August 2010.
23. The Council has a letter from the solicitors saying they obtained the final order. The Council does not have a copy of the order.
24. The Council got a liability order against Mrs X for the 2011 council tax. It sent the debt to enforcement agents in 2011, 2013 and 2015. Each time the agents returned the case to the Council as “Nulla Bona” (no goods of the value to pay the debt).
25. The Council has the council tax arrears in Mrs X’s sole name from 2008 to 2011 under one reference number. It has the joint account from 2011 onwards under a different reference number.
26. In 2016 Mr X began to pay the council tax arrears from 1 April 2011 in instalments of £200 a month.
27. The Council changed its external solicitors. In 2017 the Council asked its new solicitors to get a final charging order for the debts 2008 to 2010. The solicitors advised against this.
28. In June 2019 Mr X asked the Council to provide a statement of his council tax account. On 12 June the Council sent Mr X a breakdown from 2011 onwards. The Council sent Mrs X a breakdown for the earlier years. The breakdown it sent Mrs X gave the date and amount of payments and said which year it had attributed these to. For the council tax year 1 April 2008 to 31 March 2009 it said it had received the following payments after July 2010.

• 6 September 2011 £130 and £125.
• 2 December 2017 £255, £799.98 and £174.

29. For 1 April 2009 to 31 March 2010 it listed a payment of £1,100.88 made on 2 December 2017.
30. The Council said Mrs X still owed £1751 not covered by the £200 a month payment arrangement. It wanted Mrs X to set up a direct debit of £72 a month to pay this.
31. Mr X complained. The Council’s first response resolved most of his issues from 1 April 2011, though he considered the Council gave him contradictory information. He made a further complaint that the Council now said he owed £2,879.58 not covered by the repayment agreement. He said the Council has a charging order for this and gave the Council the court reference number.
32. The Council replied in September 2019. The Council said it made an application for a charging order for 2008 to 2010 but did not get one. It said Mr X still owed £2,879.59 for the account and had made no payments since 2010. It said if Mr X did not agree to make payments it would send the account to enforcement agents.
33. Mr X continued to tell the Council it had a charging order. In October 2019 the Council sent the debt for 2008 to 2010 to enforcement agents. On 17 October Mr X went to the Council’s offices, the Council would not discuss the 2008 to 2010 accounts without written authority from Mrs X.
34. The Council did contact its external solicitors to ask why it had not removed the interim charging order from the Land Registry when it decided not to pursue this in 2017. The solicitor replied on 23 October 2019. It said it had not obtained an interim charging order for the Council in 2017. It said the Council already has one from 2010 and gave the claim reference number.
35. The Council did not withdraw the case from enforcement agents and on 26 October the agents sent an enforcement notice.
36. On 7 November an enforcement agent visited. Neither Mr nor Mrs X were in. The agent left a removal notice saying he was authorised to remove Mrs X’s goods for sale. He said he would return with a contractor but did not say when. He said to avoid this Mrs X should contact him immediately by telephone. Mr X telephoned the agent that day. The agent refused to speak to him without written authority from Mrs X.
37. Mr X contacted us in great distress about the enforcement agents’ threatening to take his goods. We contacted the Council to ask it to put recovery action on hold while we investigated. On 11 November the Council said it had put a two month hold on recovery and recovery would not start again without a manager’s approval. Despite this the agents wrote to Mrs X on 12 November, 23 December and 2 January 2020. The agents also told Mrs X they would visit on 2 December. The Council has now withdrawn the case from the agents.
38. On 24 December 2019 the Council replied to my enquiries. It said it had never obtained a charging order against Mr and Mrs X’s home. It attached a copy of Land Registry records it had got that day as evidence of this. The records showed the interim charging order, the date the Council got it, the court that agreed it, and the claim reference number.
39. The Council said it would investigate further.
40. The Council replied to my further enquiries on 21 January 2020. It said it was still of the opinion it did not have a charging order. It said because of the letter from its then solicitors in 2010 suggested otherwise, it was pursuing various lines of enquiry, including with the court, to establish if it had a charging order.
41. The Council asked its internal solicitors to check. It told its solicitors it had no paperwork about a charging order from August 2010. It said notes on the account said it got a final charging order on 31 August 2010. It said it did not have a court case number. It asked its solicitors to do a historical Land Registry search.
42. The Council’s solicitor asked the Land Registry for a copy of what’s its records said on 22 April 2008. The solicitor told the Council the historical records did not show any interim charge registered for it. The Council sent this to me. It said as the Council did not have either an interim or final charging order it could use enforcement agents

Findings

43. The Council is at fault. It has a charging order for council tax for 2008 to 2010. It could not use enforcement agents as well.
44. The problem might have arisen because the Council does not have proper records of the legal action it took. However, it is difficult to understand how the Council insisted it did not have an order despite irrefutable evidence to the contrary. Before September 2019 it had a note of the order on its records and a letter from its solicitor in 2010. After September 2019 Mr X told it the case number, it got a copy of the Land Registry records showing the charge, and then its current external solicitors said it had obtained a charge in 2010.
45. The Council then asked for the records as they were more than two years before it got the charge. This would not show the charge. The Council use of this earlier record as evidence to support its stance is misleading.
46. The Council used one reference number for the council tax arrears for the three years from 2008. It had a charging order for the first two years but not the third. This has added to the confusion. Because of this it gave confusing and misleading information to Mr and Mrs X about how much Mrs X owed. It sometimes told her she owed £1,751 and then said she owed £2,879.
47. The Council’s letter of 12 June 2019 says Mrs X had paid nothing for 2008 to 2011 since 2010. The same letter lists substantial payments after that date.
48. The enforcement agents put a removal notice through Mr and Mrs X’s door. The agent had no right to this as he had not taken control of their goods. The agent misrepresented his powers.
49. The Council did not put a hold on enforcement when it said it would. This is fault.

Injustice

50. The Council’s wrongful referral of the debt to enforcement agents caused Mr X anxiety and distress. It caused distress when it did not properly investigate what Mr X told it. It put Mr X to further time, trouble and distress in getting information about the charging order and trying to talk to the Council about this. It caused the most distress when it still made the referral and the agents put a removal notice though his door. Mr X’s anxiety continued as the Council did not put a hold o n enforcement action when it said it would.
51. The enforcement agents added to the distress and anxiety by sending a removal notice when it should not have.

Agreed action

52. We publish guidance on remedies. Where action by enforcement agents occurred because of fault by a council, we anticipate the council should provide a distinct remedy for the distress this caused.
53. If a complainant owes money to the Council, in most circumstances we consider it reasonable for the Council to offset any financial remedy against the debt.
54. When a council commissions another organisation to provide services on its behalf it remains responsible for those services and for the actions of the organisation providing them. So, although I found fault with the actions of the enforcement agents, I have made recommendations to the Council.
55. To put matters right for Mr X the Council has agreed that within one month of my final decision it will:

• Apologise to Mr X;
• Pay £600 towards Mr X’s council tax arrears for the distress and anxiety it caused him and his wife.
• Pay £150 towards Mr X’s council tax arrears for his unnecessary time and trouble
• Provide an explanation for the payments it lists in its letter to Mrs X of 12 June 2019 and say why these payments did not reduce the arrears.

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Final decision

56. The Council is at fault and has caused injustice. It has agreed to provide a remedy for this. I have completed my investigation and closed the complaint.

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Investigator's decision on behalf of the Ombudsman