Summary: Mr X complained about the actions of the Council, and enforcement agents who acted on the Council’s behalf, after it obtained a liability order against him for non-payment of business rates which he said he was not responsible for. The Council was not at fault. The magistrates’ court issued a liability order against Mr X for the debt, and the Council passed it to enforcement agents who carried out their role in line with the relevant law.

The complaint

1. Mr X complains about the actions of the Council, and enforcement agents acting on the Council’s behalf, after it obtained a liability order against him for non-payment of business rates which he said he was not responsible for. Mr X complains the Council:
• issued the bills for business rates against him rather than the tenants of the property;
• failed to adjourn the hearing for the liability order after he wrote to it challenging the summons;
• failed to inform him that the court granted the liability order;
• ignored evidence from his tenants which proved he was not liable for the debt; and
• failed to notify the enforcement agents of a £5000 payment against the liability order by Mr X’s tenant.
2. He also complains the enforcement agents acting on the Council’s behalf seized his vehicle rather than using a controlled goods agreement.
3. Mr X said the matter has caused him avoidable financial loss, distress, embarrassment and time and trouble pursuing the matter.

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What I have investigated

4. I have investigated the actions of the Council, and the enforcement agents acting on the Council’s behalf following the granting of a liability order against Mr X for non-payment of business rates.

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The Ombudsman’s role and powers

5. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
6. The law says 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)
7. We cannot investigate a complaint if someone has started court action about the matter. (Local Government Act 1974, section 26(6)(c), as amended)
8. 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

9. I spoke to Mr X about his complaint.
10. I considered the information Mr X sent me.
11. I considered the Council’s response to my enquiry letter and the information it sent me.
12. Mr X and the Council had the opportunity to comment on my draft decision. I considered the comments before I made a final decision.

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What I found

13. Business rates are charged on most non-domestic properties such as shops, offices, pubs and warehouses. They are the way in which businesses contribute to the cost of local services.
14. Councils are responsible for billing and collecting business rates. If people do not pay their business rates, councils will send a reminder. If payment is still not made councils may issue a summons seeking a liability order from a magistrates’ court. If issued, a liability order will confirm the amount owed and the person liable to pay that amount.
15. Councils may ask enforcement agents to recover the debt due on a liability order. The law sets out the fees a bailiff can charge when recovering debt and the three stages they must follow:
• The Compliance Stage - a bailiff must issue a notice of enforcement seven clear days before they take control of the goods. The fee for this stage is £75.
• The Enforcement Stage - this stage starts once a bailiff has made a first visit. At this visit they can take control of goods. Once they have secured goods they must give the debtor a notice. The fee for this stage is £235. If outstanding debts are more than £1500, bailiffs can charge a further 7.5% of the amount outstanding over £1500.
• The Sale or Disposal Stage - this stage starts once a bailiff has taken control of goods. The fee for this stage is £110.
16. An enforcement agent will usually make a list called an ‘inventory’ of anything a debtor owns that could be sold to pay off the debt. This is called ‘taking control’ of belongings. If a debtor cannot afford to pay off a debt in full, a ‘controlled goods agreement’ with the enforcement agent stops the removal of goods taken control of. The debtor will usually make an agreement with the enforcement agent to pay off the debt by making regular payments. If the debtor fails to meet those payments, the enforcement agent can return and remove the goods to sell and pay off the debt.

What happened

17. Mr X is the freeholder and landlord of a property which is comprised of three business units. Mr X said tenants have occupied the units for a number of years and said they were responsible for any outgoings associated with those units including business rates.
18. In November 2017 the Council carried out a land registry search in relation to Mr X’s properties. The search showed Mr X was the freeholder of those properties. The Council sent Mr X a business rates information request form for him to complete, however it did not receive a response from him. It therefore raised business rates bills against Mr X for the properties as it had no other information of whether the properties had tenants.
19. Between November 2017 and May 2018, the Council sent Mr X bills for the business rates to his home address. It sent Mr X a final notice reminder in June 2018, however it received no payments. The Council applied to the magistrates’ court for a liability order against Mr X. The court issued Mr X with a summons to appear at the magistrates’ court in July 2018. Three days before the hearing, Mr X emailed the magistrate’s court, and copied this to the Council, asking the court to adjourn the hearing. However, an administrative error by the clerk meant the court did not receive Mr X’s request. The Council said it did not process the correspondence until after the hearing.
20. The hearing went ahead and the magistrates’ court granted a liability order for non-payment of business rates against Mr X for a total of £11,755.90 in July 2018. In August 2018 the Council received correspondence from one of Mr X’s tenants who advised they were responsible for one of the business units. Following that information, the Council raised a fresh bill and reduced Mr X’s liability to £7,325.62 and sent it to him in August 2018.
21. The Council said it received no contact from Mr X or any payments following the liability order, so it referred the debt to enforcement agents. Mr X said he enquired with the magistrates’ court about the outcome of the hearing, however he said it failed to write back to him. Mr X said he assumed the fresh bills sent to him in August 2018 meant the court had adjourned the hearing.
22. The enforcement agents sent Mr X a notice of enforcement letter to his home address at the start of September 2018. That letter told Mr X about the liability order and that failure to arrange payment would result in a visit from an enforcement agent who may seize his belongings to pay the debt.
23. The records show enforcement agents received no response to the notice of enforcement letter, so an agent visited Mr X’s home address two weeks later. The agents were unable to speak to Mr X so they left a letter for him. The agents took details of a vehicle registered to and owned by Mr X which was parked on his driveway.
24. The enforcement agent visited Mr X’s home address again a few days later. The records show the agent spoke to Mr X’s son who said Mr X was not home. The records show the agents tried to call Mr X on his mobile number and left a voicemail message. The agents also sent Mr X text messages asking him to make contact. The agents left Mr X a further letter.
25. Mr X wrote to the enforcement agents in October 2018. Mr X said he was not responsible for the debt and it was his tenants’ responsibility to pay the business rates. Mr X said he intended to challenge the liability orders by seeking a judicial review.
26. Following Mr X’s letter, the Council asked the enforcement agents to put Mr X’s case on hold. The Council wrote to Mr X and told him it had placed the case on hold for 28 days to give him time to provide evidence of tenancy agreements for the property to prove he was not liable for the debt. The records show the Council received no further correspondence from Mr X and therefore asked the enforcement agents to continue.
27. In November 2018 the enforcement agents attended Mr X’s property again. The agents removed Mr X’s vehicle from the driveway with a view to selling it to pay off the debt. Mr X called the Council the following day and objected to its decision to remove his vehicle. Mr X’s solicitor wrote to the Council and said Mr X intended to take legal action against it. Mr X also submitted a stage one complaint about the matter via his solicitor.
28. Mr X complained to the Council about the matters, however as the complaint made references to court action and an application for judicial review, the Council’s legal team dealt with the complaint through correspondence with Mr X’s solicitor, rather than using its own complaint procedure. The Council’s position was that Mr X had liability for business rates at his property and it had billed and invoiced him as appropriate. The Council said it had not received adequate evidence to show Mr X was not liable for the debt. The Council said it would oppose Mr X’s application to set aside the liability order, and Mr X remained responsible for the debt.
29. In December 2018, Mr X applied to the magistrates’ court to set aside the liability order. As a result, The Council put the sale of Mr X’s vehicle on hold. Mr X also made an application for a judicial review of the liability order in March 2019, however the court refused that application. Mr X withdrew his application to the magistrates’ court in April 2019. The Council proceeded with the sale of Mr X’s vehicle in June 2019, which Mr X bought back at auction. The Council acknowledged the matter has been upsetting for Mr X and had resulted in distress and time and trouble. However, it said it was not because of any fault or failures by the Council.
30. Mr X remained unhappy with the Council’s actions and complained to the Ombudsman.

My findings

31. Mr X’s main complaint, which he originally brought to the Ombudsman, was around the Council’s actions in obtaining the liability order and its failure to request an adjournment of the court after he provided it with mitigating evidence of why he could not attend. It was for the court to decide whether to adjourn the case not the Council. Mr X unsuccessfully applied to judicially review the matter, and also applied to the magistrates’ court to set aside the liability order. The magistrates’ court decided Mr X was liable for the debt, therefore, the court was the appropriate place for Mr X to apply to set aside that liability.
32. The law says the Ombudsman cannot investigate matters if someone has already started court action. Mr X used his opportunity to raise these matters at court. I cannot investigate or question the decisions made by the court. Therefore, I have not investigated any of the circumstances around the liability order or the Council’s reasons for obtaining a liability order.
33. Mr X complained the Council failed to contact him following obtaining the liability order in July 2018. The Council was not required to write to Mr X after it obtained a liability order. The Council instead chose to refer the matter to the enforcement agents which it was entitled to do. Mr X was aware of the summons to court. Having had no response to his request for adjournment or to his enquiry with the court after the hearing date, he had the opportunity to chase the outcome of the hearing with the Council. The enforcement agents sent Mr X the notice of enforcement at the start of September 2018. The letter notified him about the liability order, and that failure to make payment within 12 days would result in enforcement agents visiting him who may ‘take control’ of goods. There was no fault in the process. The Council was not at fault.
34. Mr X said the Council failed to notify enforcement agents of a £5000 payment against the liability. The records show that one of Mr X’s tenants provided it with satisfactory evidence to show they were responsible for part of the debt. Therefore, the Council reduced Mr X’s liability and issued new bills. The debt passed to the enforcement agents was £7,325.62 and the records show no other payments. The Council was not at fault.
35. Mr X said he provided the Council with evidence including letters and emails from his tenants which he said proved he was not liable for the debt. However, the Council said the information Mr X did provide was not adequate enough for it to set aside the liability orders. The records show the Council put Mr X’s case on hold for 28 days in October 2018 to give him a further opportunity to provide leases or other legal agreements which showed Mr X was not liable. However, none was forthcoming, so the Council told the enforcement agents to continue. It was for the Council to decide whether the information Mr X provided was satisfactory. The Council decided it was not and continued to enforce the debt. As explained above, court is the appropriate place for Mr X to challenge the liability. I find no fault in the Council’s actions.
36. Mr X complained the enforcement agents should have used a controlled goods agreement on his vehicle instead of removing it for sale. The records show Mr X disputed the liability and there is no evidence he made any attempts to pay the debt, either in full or in part. Therefore, a controlled goods agreement was not appropriate. Regardless, the enforcement agents had already visited Mr X’s property on more than one occasion, had tried to contact him via letter, telephone and text message. The enforcement agents were entitled to remove goods for sale in order to repay the debt. The records show the Council put the sale of the vehicle on hold until the conclusion of the court proceedings. There was no fault in how the enforcement agents removed Mr X’s vehicle. The Council was not at fault.

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Final decision

37. I have completed my investigation. The Council was not at fault.

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Parts of the complaint that I did not investigate

38. The law says the Ombudsman cannot investigate matters if someone has already started court action. Therefore, I have not investigated any of the circumstances around the liability order or the Council’s reasons for obtaining a liability order.

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Investigator's decision on behalf of the Ombudsman