Homeowner fails in appeal over council tax liability and sequestration

Judges in the Inner House of the Court of Session said “exceptional circumstances” were required to justify the remedy sought and the party litigant failed to make out a relevant case to that effect on record.

The reclaiming motion by the pursuer Patricia Polley against first defender West Lothian Council and second defender the Accountant in Bankruptcy arose out of a dispute concerning liability to pay a total council tax debt of £11,244 in respect of a property in Kirknewton, during the years 1999 to 2008.

The Lord Justice Clerk, Lord Carloway, sitting with Lord Malcolm andLord McGhie, heard that the pursuer was seeking reduction of an award of sequestration granted against her at Hamilton Sheriff Court in March 2010, together with reduction of the underlying charge for payment in December 2009 and the preceding five summary warrants granted by the sheriff at Linlithgow relating to council tax in each year from 2004 to 2008.

The pursuer claimed that during the period from 1999 to date she had no sole or main residence and therefore no liability to pay any council tax. During the relevant period, the property was occupied by a tenant, namely her son, albeit that he was absent for a period during 1999 to 2002 when he stored his belongings there and continued to pay rent.

The pursuer claimed that no council tax bills were issued to her between 1999 and 2004 and that she was unaware of action being taken against her until August 2007, when sheriff officers served her with summary warrants in respect of the period June 2004 to June 2007.

The first defenders maintain that the pursuer was liable for tax from 1999 onwards, following receipt of a letter from the pursuer in February 2002 intimating that her son had left the property in 1999. The first defenders had accordingly issued demand notices to the pursuer in respect of the years thereafter, in terms of the Council Tax (Administration and Enforcement) (Scotland) Regulations 1992. The notices were not appealed under section 81 of the Local Government Finance Act 1992, and the consequent summary warrants and charge for payment were not challenged in any competent legal process, it was submitted.

The pursuer was served with a sequestration petition in March 2010 and presented documentation to the court to demonstrate that she was not the liable person because of her son’s occupation of the property.

However, no payment was made and decree of sequestration was awarded after apparent insolvency was established, and the pursuer raised “further actions” in the sheriff court in an attempt to “correct the wrongful litigation” taken against her.

She pleaded “entitlement to apply for reduction” on the basis of the statutory provisions on council tax and her lack of opportunity to challenge the first defenders’ claims about her liability prior to the issue of the warrants and charge. She also pleaded “exceptional circumstances to support reduction” of the sequestration.

The sheriff dismissed the action as incompetent and the sheriff principal refused an appeal on the basis that a petition for recall did not permit a challenge to the merits of the warrants and charge. The Lord Ordinary, in dismissing the pursuer’s action, also stated that if a debtor sought to challenge a debt upon which a charge had proceeded, she required to do so by legal process.

The pursuer submitted that the Lord Ordinary had failed to take account of failures by the first defenders to follow the statutory procedures for the assessment and enforcement of council tax up to and including the obtaining of summary warrants.

But the appeal judges ruled that there was “no reason” to interfere with the Lord Ordinary’s “careful and detailed” decision.

Delivering the opinion of the court, the Lord Justice Clerk said: “In the absence of averments of exceptional circumstances, reduction is not open to the pursuer. Put simply, no such circumstances are pled. In that and the other matters raised by the pursuer viva voce, and not in her averments, the court is content to adopt the Lord Ordinary’s reasoning. The first defenders have simply followed the statutory procedures, having formed the view that the pursuer was liable as owner despite her protestations to the contrary based on her son’s alleged liability as occupying tenant.”

The defenders also sought expenses in the cause against the pursuer, but the court was mindful of the need for economy, particularly in cases against unrepresented litigants and was not satisfied that separate representation for each defender was reasonable, given the absence of any conflict of interest.

Lord Carloway added: “It was not suggested that any facts addressed by the second defender could not have been made known to the court by counsel and agents acting for both defenders. Where defenders advance substantially the same position, and no contrary position had been anticipated, it would be inequitable for the pursuer to bear the expenses of two parties. Accordingly, the expenses of process are awarded in favour of the first defenders only. No expenses are found due to or by the pursuer and the second defender.”