Liability Orders fees.. Rev. Paul almost gets his way.

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#1 Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 30 Apr 2015 13:18

At court number three on 30 April 2015 Royal Courts of Justice. At his judicial review, Rev. Paul Nicholson v Tottenham Magistrates with LB Haringay as an interested party,

The judicial revuew is to establish whether local authorities can reasonably charge £125 to apply for a council tax liability order.

The question the court was to answer is -"are the £125 costs are reasonably incurred" under regulation 34 (5)(b) of the Council Tax (Administration and Enforcement) Regulations 1992.

The law that sets the fee to apply for a liability order is Schedule 1 (5) of the Magistrates' Courts Fees Order 2008 which sets a court fee of £3. Regulation 34 (5) of the Council Tax (Administration and Enforcement) Regulations 1992 provides for "reasonably incurred costs" in connection with applying for the liability order.

The court heard arguments from Counsel for Rev Paul, the fee is too high and places an unreasonable burden on those on low income and the vulnerable. The court heard that on economies of scale where applications are made in bulk, it is unreasonable and unquantifiable for the council (LB Haringay) to charge £125 for each application as though it is being made separately and singularly.

Back in 2010, Rev Paul, at his liability order hearing, asked the magistrate how the "maximum" £125 costs are reasonably incurred. The magistrate was unable to explain how he is satisfied this sum is reasonably incurred by the Defendant Tottenham Magistates. The Magistrate would not answer question about how the costs were reasonably incurred.

Counsel for defendant was unable to persuade the court the costs are reasonably incurred because the bench of Magistrates did not explain them. The bench of Magistrates was not given sufficient information by LB Haringay as to how they arrives at £125 as reasonably incurred costs.

Rev. Paul contends the costs are therefore, not reasonably incurred costs.

The court accepted there are no safeguards for courts to protect taxpayers from unexplained high costs. The court must act as a "filter" to screen out high costs and authorities must explain their costs by giving a breakdown of them.

The definition of "sum outstanding" includes the counci tax and the reasonably incurred costs of the application of the liability order. This confirms again, no bailiffs fees are included in the "sum outstanding". Regulation 34 (5) of the Council Tax (Administration and Enforcement) Regulations 1992. This is further authority the "sum outstanding" does not include fees in connection with enforcement or other bailiffs fees.

The Judge retired after announcing that judgment will be given early next week.
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#2 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by Pote Snitkin » 30 Apr 2015 15:59

Won't be until Tuesday at the earliest then. With the uncertain election outcome, I foresee a fudge.
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#3 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 30 Apr 2015 18:09

No fudge. It's a judicial review. I'll discuss the potential ramifications this evening. It could blow a big hole in HCEO policy in charging thousands to debtors in incurred miscellaneous costs. I'll explain the legal argument considered by the judge later.
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#4 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 19 May 2015 18:35

May be of interest to download.....

When can standard costs on liability orders be claimed?
12/05/2015

Local Government analysis: Following the decision in R (on the application of Reverand Nicolson) v Tottenham Magistrates, standard cost charges on non-payment liability orders can only be made if they are actually and reasonably incurred by the local authority. Jenny Wigley, barrister at No 5 Chambers, examines the significance of the decision..............

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#5 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by Kal-El » 02 Jun 2015 05:05

What is the update on this?

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#6 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 02 Jun 2015 07:26

Kal-El wrote:What is the update on this?
Rev Paul Nicolson seeks declaration from auditors that Haringey's £125 council tax court costs are unlawful

There's an obvious conflict of interest having a private company (Grant Thornton) whose loyalty must be with the organisation to ensure it continues handing it substantial sums of money each year for its services as external auditor.

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#7 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 04 Jun 2015 08:20

The article in the previous post originally stated that the Reverend's meeting with the auditor would be on 8 June 2015. It appears the meeting will be tomorrow (5 June 2015).

Haringey Independent

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#8 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 15 Oct 2015 14:38

Auditor rejects Haringey’s CT costs refuses report in the public interest council breaks CT law 4 times with impunity

Auditor, not to make an application to the court for a declaration that an item of account is contrary to law.
Grant Thornton, Haringey's external auditor has bottled out. Presumably it doesn't want to put its contract in jeopardy and risk becoming an ex-external auditor to the council. I guess the firm would be committing perjury or something like that if it endorsed the council's costs in a public interest report and is why it refuses to do so.

The appointment of private firms as auditors to local authorities is obviously not in the public interest.

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#9 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by Pote Snitkin » 15 Oct 2015 14:54

So GT says the LO costs cannot be justified, but won't do anything about it? Haringey offer a token £10 reduction, hoping it's all going to go away.
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#10 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 15 Oct 2015 16:37

Pote Snitkin wrote:So GT says the LO costs cannot be justified, but won't do anything about it? Haringey offer a token £10 reduction, hoping it's all going to go away.
Before going to town on Grant Thornton's document there's this, which stood out like a sore thumb (page 6):
In our opinion the Council has adopted an approach which is aimed at excluding costs not associated with a summons and whilst the basis would ideally be less subjective there is no evidence to suggest that the Council is deliberately apportioning inappropriate costs to increase the fee charged on summonses as a means to increase the income they receive from charging these costs. We are satisfied that the Council has not set out with any intention to raise income to cover other General Fund expenditure.
Did the auditor not know about this:

Haringey Council's 2004 Audit and Finance Scrutiny Panel Review of Income Collection (removed from website), details at paragraph 6.11 the relevant matter, as follows:
6.11. Court Costs

6.11.1. The Review Panel found that other councils had obtained agreement to raise Court Costs recharged to non-payers by a significant level. This charge is intended to act as a deterrent to both late and non-payers and enables councils to fund improved recovery measures. The Review Panel concluded that the Benefits and Local Taxation Service could improve performance by ensuring that it agrees the highest possible level of Court Costs to be charged to non-payers
Paragraph 5.10 (second to last bullet point) in Haringey’s Budget Monitoring report 2014/15 dated 16 September 2014 documents that court costs income props up other council expenditure (customer services) by offsetting an otherwise greater overspend:
£400k overspend in customer services predominately due to slippage in delivery of the 2014/15 savings (£660k) partially offset by forecast over achievement of court costs income.
Item 2 (page 15) of Haringey’s Financial Outturn 2011/12 details that an overachievement of court costs income lessened the impact of over spends on salaries and postage costs:
Revs, Bens & customer services Management Costs - the underlying cause of this over spend is the higher than planned demand for services particularly around benefits. This has led to notable over spends on salaries and postage costs. These pressures have mitigated down by an overachievement of income from reimbursement of court costs incurred during recovery activity.
Page 5 of Haringey’s explanation of variances from budget (Outturn 2013/14) documented that it had over achieved with court cost income therefore part of an under spend of £446k which contributed to an under spend of £1.32 million Revenues, Benefits & customer services budget. Incidentally, the council saved, rather than used funding given it by the government to pay council tax benefit claimants:
Revenues, Benefits & customer services - Management - the funding and responsibility for local welfare provision (Support Fund) transferred to local authorities from April 2013. Haringey along with many other authorities has significantly underspent this grant (£877k) and proposes to transfer it to a reserve for drawdown in the future. This is particularly important as the government has confirmed that funding will cease from 2015/16. The remaining under spend (£446k) is due to over achievement of court cost income and receipt of one-off grant funding largely in support of the changes to welfare and universal credit.

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#11 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 16 Oct 2015 10:29

You couldn't think of a better example of someone knowing which side their bread was buttered.

Quote from the auditors letter:
Mrs Justice Andrews reasoning in paragraph 45 of her judgement is that it would not be practical for the Council to carry out and provide a detailed calculation of the actual costs incurred in each and every case. Therefore, the exercise has been completed by costing of a standard average case.
One thing that the auditor has conveniently neglected in the letter from which the above is quoted is that the Regulations in fact provide for individual costs and is why the government provided guidance in June 2013 (reiterated from a Council Tax Practice Note in September 1993) stating that 'while it is likely that authorities will have discussed costs with the Clerk to Justices it should be recognised that the Court may wish to be satisfied that the amount claimed by way of costs in any individual case is no more than that reasonably incurred by the authority’. The court would not require satisfying on an individual basis for any arbitrary reason, but because an individual sought to challenge the costs, which is why regulation 35(1) of the Regulations provides that a single liability order may deal with one person and one amount. Regulation 35, so far as is relevant, is as follows:
Liability orders: further provision

35.—(1) A single liability order may deal with one person and one such amount (or aggregate amount) as is mentioned in regulation 34(7) and (8), or, if the court thinks fit, may deal with more than one person and more than one such amount.
Nicolson v Tottenham Magistrates agrees (para 46) in so much as it considers in principle, provided that due consideration is given to the dangers of artificially inflating costs, it may be a legitimate approach to provide an average figure which could be levied across the board in "standard" cases. It does however go further and add that such costs ‘could be amplified in circumstances where there was justification for incurring additional legal and/or administrative costs’.

This approach would require the average figure being derived from the aggregate recoverable costs, which (i) excluded any expenditure that was not common to every application, and (ii) be properly referable to the summons/liability order. That is to say in broad terms the exclusion of those elements which are referred to here (paras 64-101). It would then be open to the council in cases where it incurred additional administrative costs (where they were lawful and there was justification to do so) to amplify the standard costs, but again subject to them always being properly referable to the enforcement process.

In other words, if the council wishes to lessen the administrative burden of calculating the costs in each case (and comply with the Regulations), it must base its costing NOT on a standard average case, but in respect of a taxpayer who simply receives a summons and settles outstanding liability before the date of the hearing without contacting the council to query the demand.

If the Regulations were applied appropriately, the consequences would be that the majority of Staff costs (£914,400), Overheads (£1,165,200) and all of the Council Tax Reduction Scheme (£774,000) are not permissible in respect of re-charging expenditure for instituting the complaint.

What is set-out above should have been enough to alert the auditor that Haringey's claims were not reasonable in the context of the relevant law which governs costs and should therefore have used its discretion to apply to the Court for a declaration that an item of account is contrary to law under section 17(1) of the 1998 Act, and issued a report in the public interest.

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#12 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 30 Nov 2015 08:00

It would be understandable, with all the obstacles put in the way by Haringey Borough Council, Magistrates' court and even Grant Thornton (the council's auditor contractor), if the Reverend at this point took the struggle no further.

It was however announced yesterday on the the taxpayers against poverty website that Grant Thornton's decision not to apply to the court for a declaration that an item of account is contrary to law under section 17(1) of the Audit Commission Act 1998, is to be appealed, by seeking a mandatory order through a claim for judicial review.

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#13 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 30 Nov 2015 10:43

Are you going?
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#14 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 30 Nov 2015 11:03

jasonDWB wrote:Are you going?
I have no income whatsoever and any money I have got, NELC with the help of Grimsby Magistrates' court are trying to force from me with fraudulent council tax court costs. If I spend money recklessly on a trip to London that will deprive the two mentioned criminal outfits of potential revenue.

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#15 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by Hopeless » 30 Nov 2015 12:07

Don't worry. My case is coming up soon.

LOL! The council said that the court would write to me re. postponement, but as of today, 30 November 2015, I have not heard anything.

The '4 horsemen of the apocalypse' are in for a miserable time. Everything is almost in play. I need to get before magistrates re. 2015/2016 council tax. Get the court to issue LO for current year.

Then, the fun begins :-)

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#16 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 30 Nov 2015 15:56

Shame, its only a travel card on the District Line to the RCJ. I transfer all my set asides applications there. I usually get the same master. Saves me going all the way to Oldham Warrington Liverpool etc. It gives the likes of Marston and HCE a day trip to London
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#17 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 28 Dec 2015 09:55

Another win in the High Court (council tax liability order costs):

Ewing v Highbury Corner Magistrates Court & Anor [2015] EWHC 3788
..............

11. The substantial question raised in lengthy written submissions and oral argument can be resolved without recourse, as the court was invited, to R v Willesden Justices ex parte Utley [1947] 1 KB 397 and other authorities on criminal sentencing. Regulation 34(7) of the Council Tax (Administration and Enforcement) Regulations 1992 (SI 1992 No.613) provides that when granting a liability order the court shall make an order reflecting the aggregate of the outstanding council tax and a sum of an amount equal to the costs reasonably incurred by the applicant in obtaining the order.

12. Accordingly it is not necessary to form a view on the liability of the Claimant in the sum of £137.02. That is a matter which the Interested Party local authority must decide. The order made was the aggregate of the costs and the debt, the costs part of the order falls away, so must the balance which went to make up the aggregate. The liability order is also quashed.

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#18 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 08 Jan 2016 10:45

News article.....

Reverend Paul Nicolson launches second high court challenge against council over summons "overcharging"
A reverend who won a case against the council over charges for not paying council tax is taking them to court again.

Reverend Paul Nicolson has lodged a second High Court claim against Haringey Council over claims the £125 cost of a summons for people who failed to pay their council tax is “too steep”.......


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#20 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 18 Feb 2016 18:44

I am challenging the decision of Grant Thornton, Haringey Council’s external auditors, not to seek a declaration from the High Court that the council tax court costs awarded to the council by the Tottenham magistrates were unlawful on the 2nd August 2013 and have been since April 2008/9.
He is represented by the Bar Pro Bono Unit. I think Rev Paul will get his way.
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#21 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 26 Feb 2016 08:23

The Reverend's website, Taxpayers Against Poverty, announces the disappointing news; also published in an article (Ham and High).

Lord Justice Hamblen, one of the two High Court judges hearing the case leaves there no doubt from his statement that his knowledge of the issues were so lacking that a fair hearing was impossible.

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#22 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 26 Feb 2016 11:45

Only a matter of time Sheila shouts from the rooftops.

Rev Paul does have strong grounds for an appeal because the court disregarded the poverty threshold and that is a statutory limit set by the rate at which benefit entitlements are awarded according to the claimant's circumstances.

If a statutory charge causes a person to fall below the statutory poverty threshold then the court ought to have taken that into consideration, but if failed to do so. Instead it made a £50,000 costs order knowing it will never be paid.

It also means Grant Thornton will be liable for the VAT element because they will have put it on their engagement letter with LB Haringey and they cannot write it off as a bad debt or recover it from LB Haringey. It lands Grant Thornton a bigger problem than they started with and no prospect of making a profit from administrating the case for LB Haringey.

If Rev Paul becomes on the receiving end of a transfer up, I hope he will approach me for an enforcement assessment and I will most certainly enjoy putting that through the HC. In fact. I'll do it all for free, purely in recognition of his gallant work he has done for the less fortunate.

To be honest, I really cant see any HCEO with an ounce of sanity who will willingly pursue Rev Paul for the sum after for the charity he has put into the community.
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#23 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 26 Feb 2016 14:31

The idea of a tiered justice system seems all wrong to me. Judges should be bothered enough to attempt getting it right first time round, not rely on the toss of a coin which if landing the wrong way up can be rectified on an appeal. A dodgy outcome is more often than not the norm; the error being justified by the notion that if the losing party is not happy he has the option of appealing it to the next court up. It seems as long as there's a superior court it gives the court dealing with the matter justification for making a hash of the case.

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#24 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 26 Feb 2016 15:14

I can't see what the court has done wrong. It had the right to make the decision it did.

It is possible Grant Thornton will appeal because they know their fees are a lost cause pursuing Rev Paul.

But an appeal will dismiss on two grounds;
  • 1, the court has a duty to protect the council tax payers interests, so it won't order them to pay a commercial entity that is Grant Thornton, and

    2, the court had the right to make the decision to order costs against Rev Paul.
The Court knows Grant Thornton is the biggest loser.

Courts don't always get it right, only recently I had an entertaining one, involving interpleader proceedings with HCE Group and its creditor. My client, an interpleader claimant attended with a solicitor which I assigned, but solicitor for HCE argued my client is a "litigant in person", and by turning up at court armed with a lawyer amounted to 'ambushing' the defence.

The court held, the solicitor should have put a notice of acting with the court and with the defence, and ordered my client to pay costs of the day.

My client appealed because the proceedings are not litigation and a notice of action is not a requirement under the civil procedure rules for an interpleader claim. Even though the court was nieve in following HCE's lawyers guidance, it was HCE that landed the its own costs plus my clients costs plus the further costs of the appeal. It was a snowballing costs account being passed around which achieved absolutely nothing other than fill my pockets with their cash. If the judge had a brain then the court ought to have known the difference in the rules between litigation and an interpleader claim.
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#26 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 01 Mar 2016 12:05

I do not see why I should be charged the £50,000 court costs awarded to Grant Thornton, Haringey’s external auditors, when I was factually correct in all that I stated to the court; audit is a public interest activity. A notice of appeal will be served on Grant Thornton, Haringey Council and Tottenham Magistrates with in the next two weeks.
A court thinks £50,000 is reasonable costs to audit £125.

If his appeal is unsuccessful, then I will put in a detailed assessment for a Newlyn fee irregularity case of £25 and charge it at the standard solicitors rate of £450+VAT to unravel it and prepare the draft detailed assessment. I can use Nicolson V Haringey as the precedent.
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#28 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 02 Mar 2016 10:56

A judge ruled the council did not charge £125 and made the applicant pay £50,000 costs.

The applicant showed a document proving the council did charge £125.

1. The judge made a royal cockup.

2. The costs are disproportionate and could be used as a precedent to ask for disproportionate costs.
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#30 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by Mark1960 » 03 Mar 2016 20:48

I wonder if the "holier than thou" brigade will be as vocal about the £50,000 costs (which will ultimately be paid for by the tax payer) as they are about the cost of answering 20 or 30 FOI requests?

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#31 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 03 Mar 2016 20:59

A CAG post from yesterday on the subject had a reply pulled pretty damn quick. I thought I'd be able to access it from the google cache, but had no luck.

The post:
I am going to 'stick my neck out' here and as unpopular as it may be, I really struggle with the idea of an appeal.

In the first instance, going back to the earlier court hearing, Justice Andrews confirmed that the Reverend's case did not involve any consideration as to whether or not the sum of £125 was in fact reasonable incurred by the Council in obtaining the Liability Order. Her role was confined only to examining whether or not it was lawful for the Magistrate to conclude that the cost of £125 was reasonably incurred. It was a easy decision to make. The Court Clerk had not been provided with any supporting evidence as to how the £125 had been calculated. Accordingly, the cost in the case of the Reverend (of £125) was ruled unlawful.

Following the judgment, it was then left to Haringey and their district auditor; (Grant Thornton) to undertake a costing exercise. The report states that as part of this exercise, Haringay provided Grant Thornton with their own calculations on 2nd December 2014 which resulted in the cost per case of 'issuing a summons' for the 2013/4 period of £130.77.

Despite this figure, Haringey only sought to recover costs of £125.

In the Reverend's case, he did not pay his council tax before the Liability Order hearing (ie; he did not pay after receiving the summons). Accordingly, he would be liable in any event, to the higher figure (£125).

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#32 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 03 Mar 2016 21:10

Mark1960 wrote:I wonder if the "holier than thou" brigade will be as vocal about the £50,000 costs (which will ultimately be paid for by the tax payer) as they are about the cost of answering 20 or 30 FOI requests?
It wont be paid by the tax payer. Its Rev Paul that is ordered to pay it, but as he doesn't have the means, the debt dies.

Grant Thornton is a commercial entity and cannot have its bad debts supported by the taxpayer.

That is the risk Grant Thornton chose to take when it accepted the case.
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#33 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by jasonDWB » 03 Mar 2016 21:14

outlawipcc wrote:A CAG post from yesterday on the subject had a reply pulled pretty damn quick. I thought I'd be able to access it from the google cache, but had no luck.

If you have Google Chrome, you can recover deleted posts from history > view all. Or press CTRL+H. Voila!
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#34 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 12 Apr 2016 09:10

For those following the Reverend's pursuit of Haringey's questionable court costs there's an update and recap of events.

Council Tax Rev Paul Nicolson lost In High Court he takes Grant Thornton, Magistrates & Council to the Appeal Court

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#35 Re: Liability Orders fees.. Rev. Paul almost gets his way.

Post by outlawipcc » 09 Jun 2016 10:03

Guardian article:

Refusnik rev: the vicar ​whose council tax protest could put him in jail

By the end of next week, Paul Nicolson could be facing prison and bankruptcy – an unexpected turn of events....

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