Vicar wins High Court battle over £125 costs for council tax summons

A High Court judge has declared a £125 costs order made by magistrates for a council tax summons to be unlawful, following a challenge by a retired vicar and anti-poverty campaigner.

The case of Nicolson, R (on the application of) v Tottenham Magistrates & Anor [2015] EWHC 1252 (Admin) dated back to 2 August 2013 when Reverend Paul Nicolson was ordered to pay £125 costs to Haringey Council for obtaining a liability order. The vicar had refused to pay his council tax in protest at changes to council tax benefits.

Rev Nicolson asked the magistrates how the £125 sum had been arrived at. (In 2011 the council had requested an increase in costs from £95 to £125).

On 20 December 2013 Tottenham refused to state a case in respect of the order of costs.

Under Regulation 34(7) of the Council Tax (Administration and Enforcement) Regulations 1992 (SI 1992 No.613) a court, when granting a liability order, shall make an order reflecting the aggregate of the outstanding council tax and “a sum of an amount equal to the costs reasonably incurred by the applicant in obtaining the order.”

In England there is no legislative cap on those costs; in Wales there is a proviso that the costs “including those of instituting the application under paragraph (2), are not to exceed the prescribed amount of £70.”

Rev Nicolson’s challenge to the legality of the costs order focused on the absence of information that he said was necessary for the Magistrates to address their minds to the question whether the essential causal connection between the costs claimed and the obtaining of the order had been established by the council.

This was allied with a complaint that the Magistrates appeared “to have confused the reasonableness of the amount of the costs with the question whether that sum was reasonably incurred”, Mrs Justice Andrews said. (judge’s emphasis)

The judge concluded that Rev Nicolson was entitled to have the information he requested in order that he could form a view as to whether the proposed order was within the powers of the Magistrates under Regulation 34(7) and make submissions on it.

Counsel for Haringey had submitted that the Magistrates had sufficient material to enable them to make the decision, but Mrs Justice Andrews said it was “patent that they did not”.

She added: “In fact, they had no material which would have justified them in reaching the conclusion that the costs that were claimed were incurred in connection with the issue of the summons or obtaining the liability order.

“All they had was the say-so of a Council representative, who was unable to give any better explanation when he was challenged than (at most) the vague statements recorded in the Magistrates’ reasons for refusal to state a case.” (judge’s emphasis)

Mrs Justice Andrews said she also considered that the decision was unlawful because the claimant had not been provided, on request, with the information that would have enabled him to make properly informed submissions on whether the costs claimed were reasonably incurred in obtaining the liability order.

“It is immaterial that he made no request from the council for disclosure before the hearing,” she added. “There was no requirement on him to do so. It was perfectly proper for the claimant to expect that the Magistrates would be able to provide him with information as to what costs were comprised in the £125 and how that figure was calculated, since they needed to know that information in order to discharge their legal duties.”

Mrs Justice Andrews was told at the hearing that the order for costs against Rev Nicolson had already been withdrawn. Had that not been the case, she said, she would have quashed it.

In summary, the judge declared the order to be unlawful because:

  • the Magistrates did not have sufficient relevant information before them to reach a proper judicial determination of whether the costs claimed represented costs reasonably incurred by the council in obtaining the liability order;
  • the Magistrates erred in law by failing to make further inquiries into how the £125 was computed and what elements it comprised; and
  • the claimant was denied a fair opportunity to challenge the lawfulness of the order before it was made, by reason of the failure to answer his requests for the provision of information as to how the sum of £125 was arrived at.

Mrs Justice Andrews ordered Haringey to play the claimant’s pro bono costs, and the fees, costs and expenses that he incurred earlier in the case, when he was acting in person.

Helen Mountfield QC and Eloise Le Santo of Matrix Chambers appeared for the vicar in the High Court, instructed by the Bar Pro Bono Unit.

Rev Nicolson said: “I made the challenge because I know £125 costs is a very big penalty on top of the inevitable council tax arrears, rent arrears and sanctions for the 1,000s of benefit claimants in work and unemployment who have been charged the council tax by Haringey Council since April 2013.”

He added that he had called on Grant Thornton, external auditors to Haringey, to produce a report in the public interest about the £125 level of costs. These were increased from £95 in 2011.

A Haringey Council spokesperson said: “We accept the court’s decision to quash the costs order in this case as magistrates did not have the relevant information before them. “We welcome that the judge accepted our broad approach to calculating costs to cover legal proceedings. We will now consider this ruling in greater detail.”

A minor victory perhaps but one with far reaching implications.