London Borough of Waltham Forest, R (on the application of) v Waltham Forest Magistrates' Court & Anor

The requirement to serve a business-rates demand notice as soon as practicable is not automatically absolute. The Magistrates' Court must assess substantial compliance with regulation 5(1) of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 and its statutory objectives. Relevant considerations include the importance of timely notice, the consequences of delay, the nature and length of the delay, and any procedural or substantive prejudice to the ratepayer.

A demand notice is nevertheless required before the potential liability created by section 43 of the Local Government Finance Act 1988 becomes an enforceable obligation. A billing authority cannot treat financial-resource constraints as a complete answer to a failure to act practicably.

The claimant local authority sought judicial review of a decision by a District Judge at Waltham Magistrates' Court concerning liability orders for business rates. The interested party occupied industrial premises from 1 March 2003, but demands for earlier periods were not served until August and September 2005.

The District Judge held that regulation 5(1) of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989 was mandatory and that the authority had failed to serve a demand as soon as practicable. The claimant challenged both conclusions. The central issues were the legal consequences of delay under regulation 5(1) and whether the authority's inspection and information-gathering arrangements had made service practicable earlier.

1. Construction of regulation 5(1). Regulation 4(1) imposes an absolute requirement to serve a demand notice, and no duty to pay arises until that notice is served. Regulation 10(2), regulation 12 and the other enforcement provisions likewise depend on a sum having become payable under Part II. Regulation 5(1), however, does not automatically make every failure to serve as soon as practicable fatal to liability.
2. The Magistrates' Court must determine whether there has been substantial compliance with regulation 5(1) and its objectives. It must consider the importance of timely notice, the consequences of non-compliance, whether substantial compliance can fulfil the statutory purpose, the length and nature of the delay, and whether the ratepayer suffered procedural or substantive prejudice. The issue is fact-specific. A longer delay increases the risk that prejudice will be established.
3. The approach in Regentford Ltd v Thanet District Council was applicable to the materially similar Council Tax provisions. Encon Insulation Limited v Nottingham City Council had proceeded on a concession that the requirement was mandatory and did not determine the present issue after full argument. The court therefore declined to treat its approach as controlling.
4. On ground two, the District Judge was entitled to reject the submission that resource allocation by an elected authority was decisive. The authority had to comply with its statutory duty by reference to an objective standard. The District Judge's findings that inspections were inadequate and that other practical means could have identified the occupier earlier were unimpeachable.
5. The claim did not result in the quashing or remittal of the District Judge's decision. The judgment supplied the necessary guidance on regulation 5(1); ground two failed. Costs were left for written submissions.

The judgment itself records the underlying decision of the District Judge at Waltham Magistrates' Court dated 21 December 2006. Permission for judicial review was granted on 27 June 2007. The High Court declined to quash or remit that decision.