Summary: Mr B complained that the Council delayed in resolving a business rates dispute, failed to take into account information he provided, failed to keep him properly informed and failed to provide evidence that the liability order has been removed causing Mr B distress, frustration and financial hardship. We intend to discontinue the investigation as the issue of liability has been considered in court and Mr B had the opportunity to dispute the debts at that point.

The complaint

1. Mr B complains that North East Lincolnshire Council (the Council) delayed in resolving a business rates dispute, failed to take into account information he provided, failed to keep him properly informed and failed to provide evidence that the liability order has been removed. Mr B experienced distress, frustration and financial hardship.

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The Ombudsman’s role and powers

2. 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)

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How I considered this complaint

3. I have considered the complaint and the documents provided by the complainant, made enquiries of the Council and considered the comments and documents the Council provided. Mr B and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

4. In January 2010 Mr B told the Council he was occupying premises for his business (Business Z) jointly with a business partner. He gave details of the landlord and said the lease was for a period of five years with a break clause after two and a half years.
5. In March 2013 the Council contacted the landlord to say they were now responsible for the business rates on the property due to the dissolution of Business Z on 19 June 2012. The landlord replied saying that Mr B and his business partner signed a five-year lease in their personal names so were still liable for the business rates. He provided an extract from the lease dated 19 November 2009.
6. On the basis of this information the Council decided Mr B was liable for the business rates from June 2012. The Council issued a summons to Mr B (at the address he had provided in 2010) and obtained a liability order in June 2013. It referred this debt to an enforcement agent in September 2013.
7. In March 2014 Mr B emailed the Council to say he was not liable as the property was not in his possession from June 2011. He also said Business Z had been a limited company of which he was not a director and so he was not liable. The Council carried out an inspection of the property in March 2014 and discovered the premises were unoccupied. It wrote to the landlord asking if Mr B and his partner still had the lease. There is no record of a reply.
8. In April 2014 the Council issued a summons to Mr B and obtained a liability order for the next financial year. It referred this debt to an enforcement agent in June 2014. It also replied to Mr B’s email and said the lease was in personal names not in the name of Business Z and so Mr B remained liable.
9. The enforcement agents returned one debt in January 2015, but the Council did not receive notice of this. It took no action on the other debt.
10. In July 2017 the Council carried out a review of its outstanding debts with bailiffs and established that the two debts were still outstanding. The Council sent copy bills to Mr B. Mr B said he would try to find a copy of the lease. In August 2017 he said he had nothing to do with the business or the premises.
11. No further action is recorded until November 2018 when the Council referred the debts to a different enforcement agent. Mr B got in touch again at this point and said he would provide some information. He submitted the documents in February 2019. They included an unsigned page of a lease saying the lease contained a break clause in May 2011, with six months’ notice. He also included an unsigned letter dated 2 November 2010 to the landlord giving six months’ notice to terminate the lease due to a failure to carry out repairs to the property.
12. The Council held recovery action until June 2019 when it confirmed that Mr B was still liable. Mr B contacted the Council again in July 2019 to dispute this. The Council said it had written to the landlord again but not received a reply. There is no evidence of this communication.
13. In October 2019 the Council wrote to the landlord asking if they had received a letter from Mr B in November 2010 asking for the lease to be terminated. The landlord replied on 15 November 2019. They said Mr B occupied the premises from June 2010 until July 2011. After that Business Z paid the rent until 30 September 2013. They said they did not release Mr B from the contract. The landlord sold the building in July 2014.
14. Mr B paid the debt to the enforcement agent in October 2019. He also said that after Business Z was dissolved in June 2012 it continued to trade from the premises under different ownership. The Council responded in November 2019 asking if Mr B had sublet the property to the new tenants and if so to provide a tenancy agreement.
15. Mr B continued to dispute liability and complained that the Council had taken too long to do anything and had delayed between February and July 2019. The Council said it was checking the information Mr B provided. Mr B provided a VAT certificate for the new business which he said showed he was not occupying the premises. The Council said this did not prove occupation and queried how Mr B had got the certificate if he was not a director of the company. The Council thought that if Mr B had contact with the new business, they could assist in clarifying the occupation dates.
16. On 13 January 2020 Mr B provided a letter from the new business owner confirming they occupied the premises between June 2012 and August 2014 and paid rent directly to the landlord.
17. The Council refunded the money and enforcement agent fees to Mr B in January 2020 and deleted the Liability Orders from its records. It said the Court closed due to COVID in March 2020, but it will apply to the Court to delete the Liability Orders as soon as it is allowed to do so, hopefully in January 2021.

Analysis

18. It is not the Ombudsman’s role to decide issues of liability for business rates. That is a matter for the Council and if the rate-payer disputes the decision, they can attend court and argue their case.
19. In this case the Council sent summonses to Mr B in 2013 and 2014 and obtained two liability orders. There is no evidence that Mr B was not aware of the legal process as he contacted the Council during this period to dispute liability. So, Mr B had the opportunity to dispute liability in court but did not do so.
20. This means the matter falls outside the Ombudsman’s jurisdiction as it is a complaint about what happened in court.
21. I have also considered the possibility that Mr B did not receive any of the documentation relating to the court process and so missed the opportunity to challenge the debt in court. However, the Council correctly sent the summons to the address Mr B had provided in 2010 so the Council is not at fault. Even if this was the case, we would ask the Council to rescind the liability order and then reissue the summons to provide him the opportunity to argue his case in court. However, this is no longer a relevant option because (following information provided by Mr B) the Council has refunded the money paid and deleted the Liability Orders from its records. The enforcement agent has also refunded its fees. So, I cannot achieve anything else for Mr B.

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Final decision

22. I have discontinued my investigation, as the complaint is outside the Ombudsman’s jurisdiction

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Investigator's decision on behalf of the Ombudsman