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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> JJB Sports Plc, R (on the application of) v Telford & Wrekin Borough Council [2008] EWHC 2870 (Admin) (05 November 2008) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2008/2870.html Cite as: [2009] RA 33, [2008] EWHC 2870 (Admin) |
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QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Strand London WC2A 2LL |
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B e f o r e :
(Sitting as a
Deputy High Court Judge)
____________________
THE QUEEN ON THE APPLICATION OF JJB SPORTS PLC | Claimant | |
v | ||
TELFORD & WREKIN BOROUGH COUNCIL | Defendant |
____________________
WordWave International Limited
A Merrill Communications Company
190 Fleet Street London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)
Douglas Readings (instructed by Telford & Wrekin Borough Council) appeared on behalf of the Defendant
____________________
Crown Copyright ©
"1. An information was preferred by the Respondent [the local authority] against the Appellant seeking a liability order in respect of the non-payment of National Non-Domestic Rates ('NNDR') for the period 09.01.2006 to 31.03.2006 arising out of the occupation of a leisure and health centre at... the Forge Retail Park...
2. The premises were a new building completed in December 2005, entered into the Rating List as from 14.12.2005 and occupied by the Respondent on 09.01.2006.
3. On 10.03.2005 the Respondent issued a demand for NNDR to the Appellant in the form of a 'multi-bill' (i.e. one sheet of paper covering NNDR liability for more tha[n] one year). The multi-bill covered the Appellant's occupation of the premises from 09.01.2006 to the end of the rating year and for the following rating year i.e. 01.04.2006-31.03.2007. It was in the sum of £230,914.90.
4. When such demand was unpaid, the Respondent laid an information and issued a summons in respect of it.
5. Regulation 4 [of the] Non Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989 ('the Regulations') provides that different demand notices shall be served for different chargeable years.
6. By fax dated 02.06.2006 the Appellant contended that the demand was unenforceable due to its non-compliance with Reg. 4 of the Regulations. On 05.06.2006 the Respondent withdrew the summons and issued two separate demands in the correct format.
7. The Appellant the[n] contended that the Respondent had failed to comply with Reg. 5 of the Regulations, which provides that demands should be issued 'as soon as practicable...' And that it was entitled not to pay the demands. By the time of the hearing this issue was limited to the demand for NNDR for the first period of the Appellant's occupation i.e. from 09.01.2006 to 31.03.2006.
8. The issues before me were thus:
(a) Whether the demand for NNDR for the period 09.01.2006 to 31/03/2006 complied with Reg. 5 of the Regulations.
(b) If it did not, then whether the Appellant is nonetheless liable to pay the same."
The District Judge then set out the names of the witnesses from whom he had heard oral evidence, referred to the submissions from counsel and the statutes and Regulations. He continued:
"10.I decided that the demand for NNDR for the period 09.01.2006 to 31.03.2006 did not comply with Reg. 5 of the Regulations. The demand was issued on 05.06.2006 but could have been issued on 10.04.2006 (some 56 days later earlier) when the Respondent issued the multi-bill. I noted that the Respondent had for many years regarded its own multi-bill demands as unlawful but that it nonetheless issued some 400 each year and had, unless challenged, sued on them without informing either the rate-payer [or] the court of the fact that the demands were defective. I categorised the Respondent's conduct as showing contempt for Parliament's rules and regulations and an abuse of the court process. I consider that it was disgraceful.
11. I held that nonetheless the Respondent was liable to pay the NNDR for the period 09.01.2006 to 31.03.2006. I determined that the Appellant had not suffered prejudice (none was advanced) and that whilst Parliament intended Reg. 5 to be complied with, it did not inten[d] that failure to comply mean[t] that the demand was totally invalid.
12. For these reasons I made the liability order sought by the Respondent."
The District Judge referred to his detailed reasoning as set out in a longer, written decision, which he attached to the stated case.
"(e) that the payee [here the rating authority] must serve a notice or notices on the ratepayer stating the amount payable or its estimated amount and what payment or payments he is required to make (by way of instalment or otherwise),
(f) that no payment on account of the amount payable need be made unless a notice requires it,
(g) that a notice must be in a prescribed form,
(ga) that a notice must contain prescribed matters,
(gb) that a notice must not contain other prescribed matters,
(gc) that where a notice is invalid because it does not comply with regulations under paragraph (g) or (ga) above, and the circumstance[s] are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (e) or (f) above shall nevertheless have effect as if the notice were valid..."
"The requirement for demand notices
(1) For each chargeable financial year a billing authority shall, in accordance with regulations 5 to 7, serve a notice in writing on every person who is a ratepayer of the authority in relation to the year.
(2) Different demand notices shall be served for different chargeable financial years.
(3) A demand notice shall be served with respect to the amount payable for every hereditament as regards which a person is a ratepayer of the authority, though a single notice may relate to the amount payable with respect to more than one such hereditament."
"Service of demand notices
(1) Subject to paragraph (2), a demand notice shall be served on or as soon as practicable after-
(a) except in a case falling within sub-paragraph (b), 1st April in the relevant year, or
(b) if the conditions mentioned in section 43(1)... of the Act are not fulfilled in respect of that day as regards the ratepayer and the hereditament concerned, the first day after that day in respect of which such conditions are fulfilled as regards them."
Regulation 7(6) provides:
"No payment in respect of the amount payable by a ratepayer in relation to a hereditament for any chargeable financial year... need be made unless a notice served under this Part requires it."
4. - (2) Where -
(a) a rate demand notice is invalid because it does not comply with sub-paragraph (a) of paragraph (3) of regulation 3, or as the case may be, sub-paragraph (b) or (c) of that paragraph;
(b) the failure to comply was due to a mistake; and
(c) the amounts required to be paid under the notice were demanded in accordance with Part 2 of the Collection Regulations;
The requirement to pay those amounts shall apply as if the notice were valid.
(3) Where a requirement to pay an amount under an invalid notice subsists by virtue of paragraph (1) or (2), the billing authority shall as soon as practicable after the mistake is discovered issue to the liable person or ratepayer concerned a statement of the matters which were not contained in the notice and which should have been so contained."
"14 A recurrent theme in the drafting of statutes is that Parliament casts its commands in imperative form without expressly spelling out the consequences of a failure to comply. It has been the source of a great deal of litigation. In the course of the last 130 years a distinction evolved between mandatory and directory requirements. The view was taken that where the requirement is mandatory, a failure to comply with it invalidates the act in question. Where it is merely directory, a failure to comply does not invalidate what follows. There were refinements. For example, a distinction was made between two types of directory requirements, namely (1) requirements of a purely regulatory character where a failure to comply would never invalidate the act, and (2) requirements where a failure to comply would not invalidate an act provided that there was substantial compliance. A brief review of the earlier case law is to be found in Wang v Comr of Inland Revenue [1994] 1 WLR 1286, 1294d - 1295h.
VII. A new perspective
15 In London & Clydeside Estates Ltd v Aberdeen District Council [1980] 1 WLR 182, 189E-190C Lord Hailsham of St Marylebone LC put forward a different legal analysis:
'When Parliament lays down a statutory requirement for the exercise of legal authority it expects its authority to be obeyed down to the minutest detail. But what the courts have to decide in a particular case is the legal consequence of non-compliance on the rights of the subject viewed in the light of a concrete state of facts and a continuing chain of events. It may be that what the courts are faced with is not so much a stark choice of alternatives but a spectrum of possibilities in which one compartment or description fades gradually into another. At one end of this spectrum there may be cases in which a fundamental obligation may have been so outrageously and flagrantly ignored or defied that the subject may safely ignore what has been done and treat it as having no legal consequences upon himself. In such a case if the defaulting authority seeks to rely on its action it may be that the subject is entitled to use the defect in procedure simply as a shield or defence without having taken any positive action of his own. At the other end of the spectrum the defect in procedure may be so nugatory or trivial that the authority can safely proceed without remedial action, confident that, if the subject is so misguided as to rely on the fault, the courts will decline to listen to his complaint. But in a very great number of cases, it may be in a majority of them, it may be necessary for a subject, in order to safeguard himself, to go to the court for declaration of his rights, the grant of which may well be discretionary, and by the like token it may be wise for an authority (as it certainly would have been here) to do everything in its power to remedy the fault in its procedure so as not to deprive the subject of his due or themselves of their power to act. In such cases, though language like "mandatory," "directory," "void," "voidable," "nullity," and so forth may be helpful in argument, it may be misleading in effect if relied on to show that the courts, in deciding the consequences of a defect in the exercise of power, are necessarily bound to fit the facts of a particular case and a developing chain of events into rigid legal categories or to stretch or cramp them on a bed of Procrustes invented by lawyers for the purposes of convenient exposition. As I have said, the case does not really arise here, since we are in the presence of total non-compliance with a requirement which I have held to be mandatory. Nevertheless I do not wish to be understood in the field of administrative law and in the domain where the courts apply a supervisory jurisdiction over the acts of subordinate authority purporting to exercise statutory powers, to encourage the use of rigid legal classifications. The jurisdiction is inherently discretionary and the court is frequently in the presence of differences of degree which merge almost imperceptibly into differences of kind.'
This was an important and influential dictum. It led to the adoption of a more flexible approach of focusing intensely on the consequences of non-compliance, and posing the question, taking into account those consequences, whether Parliament intended the outcome to be total invalidity. In framing the question in this way it is necessary to have regard to the fact that Parliament ex hypothesi did not consider the point of the ultimate outcome. Inevitably one must be considering objectively what intention should be imputed to Parliament."
"I am therefore satisfied that the Magistrates failed to ask themselves the right question whether there were practicable steps which the billing authority could and should have taken at an earlier stage than November 1997 to locate the relevant premises. I am also satisfied that had the Magistrates asked themselves the right question, the only answer to which they could reasonably have come was to find that there had been a breach of paragraph 5(1)(a) of the regulations and so a liability order could not lawfully be made.
I should mention that the Magistrates noted that they did not need to decide whether the requirement imposed by Regulation 5(1) was mandatory. Counsel for the billing authority has not advanced any argument seeking to limit the consequences of there being a breach of Regulation 5(1). That does not surprise me. Regulation 5(1) contains a balance between the interests of the ratepayers and the practicalities of administration. Parliament must have intended that if the billing authority has not complied with the requirement it would be wrong in principle for the ratepayer to have an obligation thereafter to pay."
"The question whether strict compliance with a statutory requirement is necessary has arisen again and again in the cases. The question is not whether the requirement should be complied with; of course it should: the question is what consequences should attend a failure to comply. The difficulty arises from the common practice of the legislature of stating that something 'shall' be done (which means that it 'must' be done) without stating what are to be the consequences if it is not done. The Court has dealt with the problem by devising a distinction between those requirements which are said to be 'mandatory' (or 'imperative' or 'obligatory') and those which are said to be merely 'directory' (a curious use of the word which in this context is taken as equivalent to 'permissive'). Where the requirement is mandatory, it must be strictly complied with; failure to comply invalidates everything that follows. Where it is merely directory, it should still be complied with, and there may be sanctions for disobedience; but failure to comply does not invalidate what follows."
"The taxpayer's argument, therefore, comes to this: that the requirement that the Case Stated be transmitted to the High Court is mandatory; but the requirement that this be done within thirty days is not.
This is not an easy proposition to accept. Where statute requires an act to be done in a particular manner, it may be possible to regard the requirement that the act be done as mandatory but the requirement that it be done in a particular manner as merely directory. In such a case the statutory requirement can be treated as substantially complied with if the act is done in a manner which is not less satisfactory having regard to the purpose of the legislature in imposing the requirement. But that is not the case with a stipulation as to time. If the only time limit which is prescribed is not obligatory, there is no time limit at all. Doing an act late is not the equivalent of doing it in time...
This probably cannot be laid down as a universal rule, but in my judgment it must be the normal one. Unless the Court is given a power to extend the time, or some other and final mandatory time limit can be spelled out of the statute, a time limit cannot be relaxed without being dispensed with altogether; and it cannot be dispensed with altogether unless the substantive requirement itself can be dispensed with."
He then goes on to deal with the particular provision in question.