A owned two properties, one of which had been divided into two separately rateable properties for council tax purposes. R presented a bankruptcy petition against A based on a purported debt of £14,097.59 owed by A in respect of unpaid council tax for which it had obtained liability orders from the Magistrates Court.
At the initial hearing the petition was adjourned to enable A to apply to the Magistrates Court to set aside the liability orders. It was not pointed out to A that given the application was to challenge the merits of the liability orders the correct procedure was to make an application to the Valuations Tribunal.
The bankruptcy order was made at the adjourned hearing at which A was not present. At a further hearing, A’s representative requested that the bankruptcy order be set aside and mentioned A’s intention to appeal to the Valuations Tribunal. The judge held that there was no arguable basis on which to oppose the bankruptcy order. A sought leave to appeal.
The appeal was allowed. The judge at first instance had, in error, focused on A’s application to the magistrates court to set aside rather than on whether A’s appeal to the Valuation Tribunal was bona fide. The judge stipulated that on the understanding that (1) the appeal to the Valuations Tribunal was made expeditiously, together with any application to the Valuation Agency in relation to the divided property’s registration as a rateable property; and (2) A would not, without the prior written consent of the court, sell or dispose of any interest in any of the properties, he would order that the bankruptcy order be set aside and leave to appeal granted.
The Judge remarked that this case highlighted the level of uncertainty in respect of how the courts should deal with enforcement of domestic council tax liability orders in the context of the availability of the remedy by way of appeal to the Valuation Tribunal.