Lonergan v Gedling Borough Council

The Court of Appeal refused a renewed application for permission to appeal against Lewison J's decision. The principal legal question was whether regulation 49 of the Council Tax Administration and Enforcement Regulations 1992 and Schedule 4 paragraph 9 of the Local Government Finance Act 1992 permitted a local authority to present a bankruptcy petition based on unpaid council tax. The court upheld the judge's construction that the deeming provision in regulation 49 converted liability under a liability order into a "debt" for the purposes of section 267 of the Insolvency Act 1986, thereby enabling the local authority to present a petition. The court also upheld the judge's conclusions that (i) the head of finance had authority (and had validly delegated authority) to institute bankruptcy proceedings under the statutory framework including section 151 of the Local Government Act 1972, (ii) there was no realistic claim that procedural or policy failings rendered the decision unlawful on the facts, and (iii) European Convention rights (Article 8 and Article 1 of Protocol 1) did not present a real prospect of success. Permission to appeal was refused because there was no real prospect of success and no sufficiently important point of principle or practice to justify a second appeal.

This is a renewed application for permission to appeal from the judgment of Lewison J (Chancery Division) dated 27 November 2007. The applicant, Mrs Lonergan, challenged the lawfulness of Gedling Borough Council presenting a bankruptcy petition in respect of unpaid council tax.

Procedural history: The matter had previously been before this court on several occasions; earlier applications for permission were refused or adjourned (Rimer LJ refused on paper; Mummery LJ adjourned a renewed application; the Chancellor did not permit the appellant's unqualified solicitor to appear on an earlier listing). This judgment considers only the renewed application for permission to appeal to the Court of Appeal under CPR 52.13.

Issues framed:

• Whether the deeming provision in Schedule 4 paragraph 9 of the Local Government Finance Act 1992 and regulation 49 of the 1992 Regulations confers power on a local authority to present a bankruptcy petition for unpaid council tax (interaction with sections of the Insolvency Act 1986 including sections 261, 264, 267, 382 and 383).
• Whether the council properly delegated authority to institute bankruptcy proceedings (relevance of section 151 LGA 1972, section 13 LGA 2000 and section 100G LGA 1972 / Freedom of Information Act 2000).
• Whether the decision-making process and policies were unlawful given the appellant's vulnerability and mental illness, and whether ECHR rights (Article 8 and Article 1 of Protocol 1) were engaged such that there was an arguable human rights breach.

Court’s reasoning (concise): The court endorsed the judge's statutory construction: a liability under a liability order is a "liability" within section 382 of the Insolvency Act and regulation 49 operates to convert that liability into a "debt" for the purposes of section 267, thus enabling presentation of a petition by the local authority. The judge’s reliance on related provisions (including section 151 LGA 1972) supported the conclusion that the head of finance lawfully possessed and delegated authority to institute bankruptcy proceedings; points based on section 13 LGA 2000 and section 100G were not shown to be arguable on the material before the court. The judge’s factual findings on policymaking, procedures and the decision-maker’s exercise of discretion were not shown to have a real prospect of success on appeal. Finally, the court considered that convention rights did not present a realistic prospect of success because the presentation of a petition was in accordance with the law and, if engaged, any interference would be capable of justification under Article 8(2) and Article 1 of Protocol 1 permits measures to secure the payment of taxes.

Relief sought: Permission to appeal to the Court of Appeal against Lewison J’s judgment refusing annulment and permitting the bankruptcy proceedings to stand. The application for permission to appeal was refused.

Permission to appeal was refused. The court accepted Lewison J’s construction that regulation 49 (and Schedule 4 paragraph 9) enabled a local authority to present a bankruptcy petition for unpaid council tax by converting a liability under a liability order into a debt for purposes of section 267 of the Insolvency Act 1986; the head of finance lawfully held and delegated authority to bring proceedings; the procedural, delegation and human rights arguments did not show a real prospect of success.

Appeal from the High Court of Justice, Chancery Division (Mr Justice Lewison) (judgment dated 27 November 2007). The renewed application for permission to appeal to the Court of Appeal was considered after earlier permission applications had been refused or adjourned (Rimer LJ refused on paper; Mummery LJ adjourned a renewed application; a prior hearing by the Chancellor on 9 June was adjourned when the court would not permit an unqualified solicitor to appear). This judgment is the Court of Appeal decision refusing renewed permission. Neutral citation: [2009] EWCA Civ 1569.