Amin v London Borough of Redbridge & Anor, Court of Appeal - Chancery Division, November 15, 2018, [2018] EWHC 3100 (Ch)

Resolution Date:November 15, 2018
Issuing Organization:Chancery Division
Actores:Amin v London Borough of Redbridge & Anor

Case No: CH-2018-000026

Neutral Citation Number: [2018] EWHC 3100 (Ch)




On appeal from the County Court at Romford

Order of DJ Dodsworth dated 5 January 2018

Rolls Building, Royal Courts of Justice

Fetter Lane, London, EC4A 1NL

Date: 15 November 2018

Before :


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Between :

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Rosana Bailey (instructed on a Direct Access basis) for Mr Amin

Rowena Page (instructed by Wilkin Chapman LLP) for London Borough of Redbridge

Simon Hunter (instructed by Clarke Wilmott) for the Trustee in Bankruptcy

Hearing date: 2 October 2018

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JudgmentMr Justice Nugee:


  1. This is an appeal in relation to costs in a bankruptcy. The Appellant, Mr Anjam Amin (``Mr Amin''), was made bankrupt on 10 June 2010 on the petition of the 1st Respondent, the London Borough of Redbridge (``Redbridge''), the petition being based on a statutory demand following liability orders being made against Mr Amin for unpaid Council Tax. Mr Amin ultimately succeeded in having the liability orders set aside by the Valuation Tribunal on 12 September 2017. He then applied to rescind the Bankruptcy Order. That was not opposed, but there was substantial argument about costs.

  2. By an order dated 5 January 2018 (``the Order'') DJ Dodsworth rescinded the Bankruptcy Order pursuant to s. 375 of the Insolvency Act 1986 (``IA 1986''), and dismissed the petition. But he ordered (i) (by paragraph 1) that the costs and expenses of the Trustee in Bankruptcy (the 2nd Respondent, Mr Paul Atkinson) (``the Trustee'') be an expense in the bankruptcy and (by paragraph 5) that the Trustee should retain and might realise any part of Mr Amin's estate until the costs and expenses of the bankruptcy had been discharged; (ii) (by paragraph 6(a)) that Mr Amin pay Redbridge's costs of the petition, summarily assessed at £1,492.80; (iii) (by paragraph 6(b)) that Mr Amin pay Redbridge's costs of his applications, summarily assessed at £11,858.70; and (iv) (by paragraph 6(c)) that Mr Amin pay the Official Receiver's costs and disbursements in the sum of £1,903.00.

  3. The appeal challenges the overall award of these costs and expenses. Ms Rosana Bailey, who appeared for Mr Amin, said that it was not her case that Mr Amin should pay nothing but it was unfair that the entire impact of the bankruptcy should fall on Mr Amin, it having now been established that he was under no liability to pay the Council Tax on which the bankruptcy was based.

  4. Permission to appeal was given by Norris J on 9 April 2018 on the grounds that there was a compelling reason for the appeal to be heard because it relates to the correct approach to costs when a bankruptcy order (properly made in the first place) is later rescinded.


  5. There is a long and quite convoluted procedural history to this matter. Since one of Ms Bailey's submissions was that Redbridge should pay costs from certain alternative dates, it is appropriate to set it out in some detail.

  6. The Council Tax concerned relates to a residential property at 111 Ashburton Avenue in Ilford (``the Property''). Mr Amin was the registered proprietor of the freehold of the Property. The register showed that he had been registered as proprietor on 9 November 2007, and that he had bought it with the assistance of a mortgage from the Nationwide Building Society (``the Nationwide'') on 24 October 2007. The address given for Mr Amin in the proprietorship register was that of the Property.

  7. The effect of s. 6 of the Local Government Finance Act 1992 is to set out a hierarchy of those liable for Council Tax in respect of a chargeable dwelling. If the freehold owner is resident, he or she is primarily liable (see s. 6(2)(a)); there is also provision that if no-one else is liable, the freehold owner is (see s. 6(2)(f)). There is also provision made in regulations whereby an owner may be liable if the property is a house in multiple occupation.

  8. Redbridge considered Mr Amin to be liable on the basis of being the resident freehold owner. They sent a number of requests for payment to him at the Property, and when they received no answer they applied to the Magistrates' Court for liability orders. Two such liability orders were made against Mr Amin, one on 27 November 2008 and another on 28 May 2009. Between them they covered the period from 24 October 2007 to 31 March 2010 and amounted, with some modest costs, to a total of £4,300.49.

  9. Before issuing a statutory demand Redbridge made a visit to the Property to confirm that Mr Amin lived there. A visit report from a Council employee on 21 October 2009 was to the effect that he spoke to a young woman at the Property who said she was newly wed to Mr Amin, that she had only moved in that month, that Mr Amin lived there, that although he had previously rented out a room to a Ms Akram they now occupied the whole house and none of it was rented out, and that Mr Amin would be in in the morning.

  10. By a statutory demand dated the next day (22 October 2009) and addressed to Mr Amin at the Property, Redbridge demanded that Mr Amin pay the £4,300.49. Redbridge employed a process server, a Mr Christopher Lyon, to serve the statutory demand. His evidence was that he went to the Property on 28 October and met with no reply, but that a woman living at 113 Ashburton Avenue told him that Mr Amin continued to live at the Property; that he went again on 4 November and met a woman at the Property who confirmed that Mr Amin continued to live there but was not then in; and that he then posted the demand through the letter box.

  11. The statutory demand not having been paid, on 14 December 2009 Redbridge issued a petition in the Romford County Court. The petition was based on the non-payment of the statutory demand and included a statement that Mr Amin had resided at the Property for the greater part of the previous 6 months. Mr Lyon was again instructed to serve the petition. His evidence was that he went to the Property on 27 January 2010 and met with no reply, although he could hear voices inside; that he asked the neighbours, and a man at 109 Ashburton Avenue told him he did not know the name of the family at the Property, but they had been there for at least a year; that he went again on 3 February and met a woman who said she was a visitor and that Mr Amin was not then in and the time of his return was uncertain; and that a search of 4 February 2010 revealed that Mr Amin was on the 2010 electoral register (or roll) at the Property.

  12. On that basis Redbridge applied for an order for substituted service, but DJ Mullis required more information establishing that it would come to Mr Amin's attention. Redbridge carried out an Experian search on 18 March 2010 which confirmed that Mr Amin had been on the electoral roll for the Property since October 2008, and that he was using the Property address as his address in relation to a mortgage. On 19 March Mr Lyon went back to the Property. He could hear voices inside but there was no reply when he knocked; a woman at 113 Ashburton Avenue told him that she did not know their names but a man and woman lived at the Property; a couple at 114 told him that a family lived there with an older woman; and when he tried to speak to a woman in the garden of the Property she disappeared into the house. His conclusion was that the family was avoiding contact.

  13. Redbridge obtained an order for substituted service on Mr Amin by post addressed to him at the Property. Mr Amin did not respond to the petition and on 10 June 2010 was made bankrupt by Order of DJ Bowles.

  14. On 21 September 2010 the Trustee was appointed trustee of the bankrupt's estate.

  15. The only asset in the estate identified by the Trustee was Mr Amin's interest in the Property. The Trustee obtained a valuation of the Property in October 2010 at £250,000 to £255,000. But there was in excess of £257,000 owing on the Nationwide's mortgage. On that valuation (which I am told is disputed) that meant there was no equity to realise in the Property and by notice of disclaimer dated 16 February 2012 and filed at court on 17 February 2012 the Trustee disclaimed his interest in the Property. On 7 March 2013 a final meeting of creditors was called and the Trustee was released.

  16. Nothing relevant thereafter happened until September 2015 when Mr Amin telephoned Redbridge and told them he was unaware that the tenants had not been paying the Council Tax; he was sent copies of the Council Tax accounts. In October he telephoned again and said he had not lived there; he was told to put that in writing. That was followed up by an e-mail dated 10 November 2015 from Mr Amin (sent through a Mr Ahmad Naeem, who said he held a power of attorney for him), in which Mr Amin said that he wanted to sell the Property and had searched the title and found out he was bankrupt; that although he bought the house in 2007 ``I have never lived in the house till today''; that he bought the house from Mr Muhammad Anwar who wanted to stay in the house and pay him rent; that Mr Anwar lived upstairs, renting out the ground floor to a Mr Umair Shazad; and that ``I am not responsible for the council taxes payment because I never lived there.'' He asked Redbridge to remove his name from bankruptcy.

  17. On 16 November 2015 Ms Tracey Woodrow, a Council Tax Inspector for Redbridge, made a visit (in fact her third) to the Property. In her report of the visit (by e-mail of 19 November) she referred to the Property as divided into two flats, one on the ground and one on the first floor, and said that she had met the ground floor tenant, a Mr Shazad, who had said that he lived on the ground floor and his landlord was Mr Anwar who lived on the first floor.

  18. On 4 December 2015 Redbridge e-mailed Mr Amin asking him to...

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