Set Aside Applications – Part 2
A fight on all fronts?
One of the often forgotten principles in contesting such applications is that the ratepayer must succeed on all three limbs of the test in Hamdan to engage the court’s jurisdiction to set aside, which even then is discretionary, but that does not mean that the billing authority must itself contest all three limbs. It is perfectly permissible and in certain cases appropriate for the billing authority, for example, on promptness alone.
Ideally, the appropriate stage at which to make concessions as to which limbs of the test are being conceded is when preparing the statement of case in response. If it is clear at that point that the applicant satisfies a limb of the test confirming in the statement of case that the billing authority accepts that avoids the need for evidence of fact and legal argument to be produced on that limb. This not only keeps the billing authority’s costs and time commitment down, but avoids an argument that pursuing the limb unreasonably caused the applicant to incur additional cost.
Though ideally conceded at the statement of case stage, there should equally be further consideration on receipt of the applicant’s evidence. It may have been that at the point of particularising its case, the strength of the applicant’s case on a particular limb remained in the balance but that on the production of evidence to support the alleged facts it became clear that the billing authority could not properly counter it. Again, this serves to limit the factual evidence and legal argument needed at the final hearing and demonstrates a reasonable approach on the billing authority’s part.
Particular care is to be given to whether or not to concede the genuine and arguable dispute limb. Unlike promptness and procedural mishap, which are finally disposed of within the application, whether or not the ratepayer is actually liable for the rate is not. Rather, the bar for genuine and arguable dispute is much lower, but if cleared the effect is that on a successful application the ratepayer is returned back to summons stage at which point a decision on liability can be made on the usual balance of probabilities test.
A concession in respect of genuine and arguable dispute is merely acknowledging that whilst the billing authority considers the ratepayer liable, its defence is more than merely arguable. It is not an acceptance of the billing decision being incorrect. In some cases, where there is a clear case on either promptness or procedural mishap against the ratepayer, the billing authority may make a tactical decision not to pursue genuine and arguable dispute for commercial reasons. The same outcome of the refusal of an application can in those circumstances be achieved at reduced cost to the public purse.
It is worthwhile noting that whilst the bar for genuine and arguable dispute is low, mere allegations will not be enough. Where the allegations made constitute, if proven, a defence the ratepayer must still in the course of the set aside application be able to produce evidence upon which those allegations could reasonably be founded. It is for this reason that whilst promptness and procedural mishap can often be assessed by the billing authority at the statement of case stage, genuine and arguable dispute tends to be better assessed on receipt of evidence.
What about the ongoing enforcement?
The starting point is that billing authorities must acknowledge that the enforcement court has the ability to adjourn or suspend enforcement whilst an application to set aside a liability order is pursued. It is discretionary rather than mandatory, but in most circumstances the court will look to preserve the status quo so as to balance the prejudice. The question is often whether, if the liability order were set aside, what prejudice would the ratepayer suffer if enforcement continues? Balanced against that is the question as to if enforcement were stayed and the liability order not subsequently set aside, what prejudice would be suffered by the billing authority?
Things such as pending property dispositions or asset dissipation are therefore cases in which a billing authority may which to press more firmly for the enforcement to proceed.
When making decisions on whether to proceed or not, the enforcement court cannot generally pre-determine the merits of the set aside application. That said, the High Court has previously held that where it is clear that a limb of the test is not capable of being met (in that case, promptness) it was appropriate for enforcement to proceed such that the set aside application could not be improperly used as a vehicle for delay.
In summary, whilst applications to set aside liability orders often occur as a reaction by ratepayers to enforcement action, they run within clearly defined parameters. Further, the billing authority can assess the weight of the application on each of the Hamdan limbs separately and make decisions as to how many of the limbs it wishes to contest. Where the case is clear on one limb in the billing authority’s favour, avoiding the other saves time, cost and can add a clarity to the limb in dispute.
Further, whilst the enforcement court does retain the power to adjourn or delay enforcement pending disposal of an application to set aside a liability order, it is not bound to do so and in the clearest cases should not do so.