In what is one of many and doubtless not the last article that will be written regarding the decision of Eyre J. in Total Sprint Ltd v Swale BC [2023] EWHC 2968 (Admin), it must be kept in mind that the same decision can be capable of multiple interpretations.

The classic tale of Admiral Horatio Nelson holding his telescope to his blind eye and ignoring a signal to retreat during the 1801 Battle of Copenhagen can be painted as an exercise of disobedience. However, when coloured with the addition that Admiral Hyde Parker is said to have ordered the signal only so that Nelson had the option to withdraw, expecting him to ignore the order if able to continue, the picture is altogether different. That is before one elects to either scrutinise the detail of one ship and many crew being lost as a result of the order, or stepping back and noting that the English ultimately succeeded as a result of Nelson’s actions.

Stepping off the segway through English maritime history, litigation like war is a results-based industry with victory the ultimate aim. Both endeavours do however also share the feature that victory is not an end achievable at all costs; there are fundamental rules and principles the observance of which are placed paramount to the outcome.

Duty of Candour

One such principle is the duty of candour, a principle which billing authorities will be familiar with due to its application in public law proceedings. At first instance, District Judge (Magistrates’ Courts) Stephen Leake found the Council owed such a duty at the point of seeking issue of a summons and breached it by the failure to disclose earlier liability orders obtained against a third party for the same hereditament and an overlapping period.

On appeal, Eyre J. overturned the first instance decision affirming that the duty of candour’s scope was limited to matters relevant to the Court’s decision as to whether or not to issue a summons. Where the liability orders issued against the third party had been subject of zero balance demands, they would not constitute a basis for the Court not to issue the summons and so not disclosing them at the summons stage didn’t breach the duty of candour.

That is not to say that withholding details of prior liability orders is permissible in all circumstances. In Total Sprint, the liability orders against the third party would have become potentially adverse to the billing authority’s case had the ratepayer discharged its initial evidential burden. Had those circumstances arisen, the Court could rightly have expected the Council to fully and frankly evidence the true position.

Disclosure

Another issue which arose in Total Sprint was the extent of the duty of disclosure in proceedings under the 1989 Regulations. One helpful clarification was that Part 31 of the Civil Procedure Rules does not, without more, apply to such proceedings.

That clarification does not equate to there being no obligation on parties to such proceedings to search for and disclose material. The point at which the obligation arises was found to be the point at which liability was known to be in issue. In practical terms, therefore, this would be the first point following issue of the summons at which a ratepayer identifies the issues in dispute.

Once the issues in dispute are known, parties to litigation should search for and disclose material adverse to or potentially adverse to their case. In the case of a billing authority, this might include previous billing decisions or orders and correspondence whether with the ratepayer in question or where concerning the same hereditament, third parties. For a ratepayer, the disclosure will likely relate to material relevant to the use or ownership of the hereditament.

Burden of Proof

The true basis upon which a liability order came to be made against the ratepayer in Total Sprint becomes clear on a proper analysis of the burden of proof in such cases. To that end, it is well worth reading paragraphs [44] to [64] of Eyre J.’s Judgment, together with the seventh question stated by the District Judge (found at [43]).

Firstly, Ratford v Northavon Council [1987] 1 QB 357 is affirmed as having the effect that a billing authority must first satisfy the Court on the balance of probabilities that; (i) there have been properly issued demands, reminders and summonses; (ii) the hereditament appears in the VOA’s list for the period in issue; and, (iii) that the rates remain unpaid.

If the billing authority does that, the burden then shifts again on the balance of probabilities to the ratepayer to demonstrate that they were neither the occupier or owner during the relevant period.

Total Sprint provides helpful clarification on how that approach applies where, as in Total Sprint itself, the ratepayer adduces no evidence. It is now to be seen as settled law that there is no prima facie burden on a billing authority to lead evidence that the ratepayer summonsed positively was the owner or occupier. If the billing authority initial burden is discharged and the ratepayer calls no evidence, the ratepayer will fail and a liability order will be made.

Where the ratepayer does adduce evidence so as to put ownership or occupation in issue, the evidence of both parties will be considered and the issued decided on the balance of probabilities. If the evidence is of equal weight, again the ratepayer would fail as it has the burden of proof.

That is not to say a billing authority needn’t have reasonable grounds for the issuing of a summons. To issue a summons without reasonable grounds would be a matter capable of challenge on Judicial Review, for example where the summons is directed at a person with no connection at all to a hereditament. It simply isn’t for the Council to evidence that belief during a trial of the complaint by summons.

Demands and Delay

As part of what could be seen as throwing the kitchen sink at the matter, the ratepayer also raised the failure by the Council to serve demand notices on 1^st April in each billing year or as soon thereafter as was practicable.

Whilst the District Judge at first instance did fine delay in the raising of demands, he also held that such a delay did not automatically invalidate the demands and that where the ratepayer had given no evidence of prejudice any inherent prejudice in having to source funds to meet the liability orders would be outweighed substantially by the public interest in collecting the sums. It was also found that the ratepayer would equally have received a benefit from the use of funds for longer than would have been possible had demands been made earlier.

The District Judge’s findings were all upheld on appeal in this regard. Those familiar with the decision in North Somerset DC v Honda Motor Europe Ltd [2010] EWHC 1505 (QB) will view this as unsurprising, but Total Sprint serves as a useful example of how alleging delay will not take a case anywhere without also going on to evidence the prejudice thereby caused.

Abuse of Process

Central also to the decisions both at first instance and on appeal in Total Sprint was the doctrine of abuse of process. In addition to the narrower obligations discussed above, the Court has wide ranging powers to ensure the proper and just use of its process through being able to stay or strike out all or part of an action, application or defence as an abuse of process.

To cover the entirety of the doctrine would require something between a chapter and an entire book, but it is nonetheless useful to analyse its application in Total Sprint to better understand the Judgments and to consider its application to rating cases more generally.

The narrow point which arose in relation to abuse of process, aside from considering all of the above headings more generally, was the submission by the ratepayer that the summons against it was an abusive collateral attack on the earlier liability orders obtained against the third party.

At paragraphs [90]-[93] of his Judgment, Eyre J. firstly identified that where the parties to a later civil action are not the same an abuse could only arise where it would either be manifestly unfair to a party to the later proceedings to relitigate issues or that to relitigate the issues would bring the administration of justice into disrepute.

In Total Sprint, nothing arising from the earlier liability orders would alter the ability of the ratepayer to bring matters into issue by meeting its evidential burden or having the issue of its rateable occupation of the hereditament during the relevant period tried. As such, there was no unfairness caused to it and so no abuse of process.

As to the second type of abuse, whether or not the administration of justice was brought into disrepute was to be judged from the standpoint of a reasonable onlooker with full knowledge of the circumstances. In case such as Total Sprint, not being a case of a dissatisfied litigant looking to subvert an earlier adverse outcome and where zero balance demands had been sent to the third party before the issue of the summons to the ratepayer, the reasonable onlooker would not conclude that the administration of justice would be brought into disrepute.

The more general criticism of the District Judge came in relation to how applications to stay proceedings as an abuse of process should be approached. Eyre J. was clear in his Judgment that following Asturion Fondation v Alibrahim [2019] EWHC 274 (Ch), there were three distinct questions to be approached separately; (i) what as a matter of fact was found to have happened, (ii) do those facts amount to an abuse of process and (iii) what is the appropriate response to the abuse.

It was confirmed that the second question could be answered in the affirmative in some circumstances where failings, though individually not an abuse of process, amounted to an abuse when combined.

On the third question, the issue of appropriate response was affirmed to be a consideration of whether a stay was required either to prevent the oppression of the innocent party or to prevent the administration of justice being brought into disrepute. Where a stay was not required for either of those purposes, it would not be granted. Even where a stay would be required, that would form the starting point rather than being inevitable. The Judge on appeal also went on to say that had there been an abuse in Total Sprint, one factor weighing against a stay would be the public interest in recovering sums properly due by way of tax.

Summary

Stepping back, neither the District Judge at first instance nor Eyre J. on appeal can properly be said to have turned a blind eye to issues of non-compliance. Instead, each of the duties owed was considered in both jurisdictions and the consequence of any non-compliance determined.

On appeal there was found to have been no breach of the duty of candour and no abuse of the Court’s process. Whilst there were failings in the Council’s disclosure, these were ultimately addressed by the trial process and the Court at first instance was held to have made its determination with the benefit of all relevant material.

From there, the case was one in which the initial burden of the billing authority had been met and where the ratepayer adduced no evidence of its own. A liability order was therefore the inevitable outcome, regardless of the amount of money involved.

A Note On Applications To Set Aside

Whilst not the turning point in Total Sprint, one issue which was prevalent throughout the Judgment was whether a billing authority as opposed to a ratepayer could apply to set aside a liability order for NNDR.

I have written previously in Insight about Regulation 36A of the Council Tax (Administration and Enforcement) Regulations 1992 together with the absence of a reciprocal provision for NNDR, and on the scope for a ratepayer to apply in either case on the jurisdiction identified in R (on the application of Brighton and Hove City Council) v Brighton and Hove Justices, Michael Handon [2004] EWHC 1800 (Admin), such that the scope for a billing authority to apply to set aside an NNDR liability order was in my opinion unclear.

Sadly, Total Sprint did not go so far as to provide a definitive solution to the issue. Eyre J. at [77] acknowledged the common law power of the Magistrates’ Court to set aside its own orders but gave no guidance as to whether and in what circumstances it would be exercised in favour of a billing authority.

When looking to rebill an account for which a billing authority holds liability orders, therefore, the first step to take must be the issuing of a zero-balance demand to the party against whom the earlier liability orders were made. Thereafter, if the consent of the respondent to the earlier proceedings can be obtained, it may be worthwhile applying to set aside the earlier liability orders. Without such consent, it could be a time consuming and potentially unsuccessful process. In any event, the existence of the earlier orders must be the subject of disclosure where the subsequently billed party puts their liability in issue.

Alex Worthington