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Local Government Ombudsman (LGO)....Bailiff enforcement and Part 85 Claims to Controlled Goods.

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The following is a copy of a very recent decision from the Local Government Ombudsman. This particular decision is a vitally important one as it refers to the correct procedure that should be followed if an individual has had his goods taken to settle another person's debt. In almost all cases, the goods in question would be a motor vehicle.

 

PS: As the decision is very lengthly, I have split it into two separate posts.

 

 

London Borough of Ealing (15 016 609)

 

 

Summary:

 

The Council’s enforcement agents were not at fault when they seized Mr X’s car to recover an outstanding penalty charge. But they failed to advise Mr X of his right to make a claim under the Civil Procedure Rules. The Council has agreed to take the steps recommended to remedy the injustice caused.

 

The complaint

 

The complainant, whom I shall call Mr X, complains that enforcement agents acting for the Council removed and eventually sold his car to pay for a debt which related to the previous owner. Mr X says he provided the Council and enforcement agents with proof he had bought the car in good faith but they did not accept it. Mr X would like the cost of the car refunded. He would also like the Council to reimburse him for the cost of possessions he lost when the enforcement agents seized the car and the hire car costs he has since incurred.

 

 

The History

 

The car referred to in this complaint was formerly owned by Mr Z – who previously lived at the same address as Mr X.

 

The Council issued a Penalty Charge Notice (PCN) to Mr Z. When Mr Z did not respond to the PCN, the Council obtained a court order which allowed its enforcement agents to recover the money owed.

 

On 10 September 2016 the enforcement agents issued Mr Z with a Notice of Enforcement (NOE). This told him that enforcement action had started and gave him 14 days to settle the balance or agree a payment plan. Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 (“the Act”) says that once enforcement agents issues an NOE, the goods of a debtor are “bound”. This means the debtor cannot sell them or give them away. But Schedule 12 of the Act says that if a person buys goods from a debtor which were bound, they can keep them if they can show they obtained the goods: in good faith;for valuable consideration (normally money but can be something else of value); andwithout knowing the belongings were bound.

 

Mr Z did not respond to the NOE and on 28 September 2016 enforcement agents visited his home address. The car was parked outside his home address and the enforcement agents took control of the car. When enforcement agents take control of goods they are deciding which goods they can sell to meet the person’s debt. Once an enforcement agent takes control of goods they are known as “controlled goods”.

 

Enforcement agents will not always remove controlled goods straight away. The enforcement agents posted an inventory to Mr Z’s home which said the car was now controlled goods. They also affixed a notice to the car. To stop the enforcement agents removing the car Mr Z needed to pay the outstanding debt.

 

Mr Z did not respond and the enforcement agents returned to his home on 03 November 2015. They clamped the car and posted a letter to Mr Z asking him to make contact and settle the debt or they would remove the car.

 

On 03 November 2015 Mr X emailed the enforcement agent. Mr X said he bought the car on 20 September 2015. Mr X provided a copy of a handwritten receipt for £3000 and a copy of the “New keeper’s details” section from the car’s V5C (its registration document). When someone buys a car they keep this section and the seller sends the rest of the V5C to the Driver and Vehicle Licensing Agency (DVLA). The DVLA then issues a new V5C. Mr X also supplied an email confirmation from the DVLA which showed they had been notified using its online service that he was the registered keeper of the vehicle. The DVLA’s online service is relatively new.

 

On 05 November 2015 the enforcement agents visited Mr Z’s home address and removed the car. The enforcement agents had not heard from Mr Z and they did not consider Mr X to have provided sufficient evidence he had bought the car.

 

Mr X emailed the enforcement agents on the same day. He explained he had paid £3000 for the car on 20 September and had already spent £1100 on maintenance. Mr X gave them two days notice and said he would then be seeking legal advice.

 

On 09 November 2016 the enforcement agents emailed Mr X. They set out the events to date and said that “The evidence you have provided to date is a handwritten receipt on a page out of a diary and the new keeper supplement for the logbook. Neither of these documents prove ownership of the vehicle.” The enforcement agents did not make reference to the email from the DVLA Mr X supplied.

 

The enforcement agents also said “We notice the vehicle has remaining [sic] untaxed since 20/09/05, it is illegal to keep an untaxed car on a public highway.”

 

The enforcement agents concluded by saying “we are satisfied that all you have done is changed the registered keeper with the DVLA to avoid seizure of the vehicle...As you live at the same address as Mr Z we strongly suggest you decide between you who will be setting the balance as the vehicle will be released to auction on 19 November 2015.” Mr X replied on the same day and said he had “instructed [his] solicitors to take this matter further.”

 

On 19 November 2015 the enforcement agents emailed Mr X and explained they would sell the car at auction unless they received payment. They did not receive payment and the car was sold.

 

In January 2016 Mr X complained to the Ombudsman. Because the Council had not considered Mr X’s concerns through its formal complaints process the Ombudsman asked it to do this. The Council provided formal responses to Mr X as follows:

 

Stage 1 response – 03 March 2016. The Council explained that once an enforcement agent issues an NOE a debtor’s goods become bound and they cannot sell or transfer them.

 

Mr X says he bought the car on 20 September 2015but the enforcement agents issued the NOE on 10 September 2015.

 

The Council’s parking services team had previously written to Mr Z about the PCN and the enforcement agents sent Mr Z a letter on 10 September 2015 explaining the goods were bound. Mr X and Mr Z live at the same address. The only proof of purchase Mr X had sent the enforcement agents were an undated, handwritten receipt, and an undated “new keeper” section of the V5C. The Council was satisfied the enforcement agent had acted in accordance with legislation when they had seized the car.

 

Stage 2 response – 11 May 2016. This repeated much of what was said in the stage 1 response. It acknowledged Mr X’s claim (made following the stage 1 response) that Mr Z did not live at the same property as Mr X when the enforcement agents removed the car (although he did return once a week to collect his post). The Council had asked Mr X to provide proof from the DVLA of when he had told them of the change of keeper. Mr X had not done this.

 

Stage 3 response – 07 July 2016. The handwritten receipt and change of keeper slip were not dated and so could not be accepted. Mr X had not been able to provide information from the DVLA about when he told them of the change of keeper. Mr X had provided the Council with a copy of the car’s V5C showing he was the owner. But this was dated 15 December 2015 suggesting Mr X did not tell them of the change of keeper until the middle of November – by which point the enforcement agents had removed the car.

 

The Council was therefore satisfied the car was transferred while a warrant was held against it. If the car had been transferred at the beginning of September then the DVLA would have issued a V5C earlier than the beginning of December. If Mr X remained unhappy he could complain to the Ombudsman.

Was there fault causing injustice?

 

The Ombudsman is not an appeal body and does not retake decisions which were properly made by a Council (or parties acting on its behalf). The Ombudsman’s role is limited to checking if there was any fault in the way a council made a decision. If there was no fault or flaw, the Ombudsman may not, by law, intervene in the judgment reached by a Council. This is the case even where the Ombudsman may have given different weight to a piece of evidence or reached a different decision on the same facts.

 

I do not consider the Council’s enforcement agents were at fault when they seized the car Mr X says he bought from Mr Z. This is because of the following:

 

Mr X says he bought the car on 20 September 2015. This was after the enforcement agents issued the NOE and when the car became “bound”.

 

The enforcement agents took control of the car on 28 September 2015 but Mr X did not contact them until 03 November 2015 when they clamped the car.

 

Mr X showed the enforcement agents an undated handwritten receipt and an undated “change of keeper” section from the V5C. Mr X says he bought the car in good faith, for valuable consideration, and without knowing it was bound goods. Mr X also sent the enforcement agents an email from the DVLA showing he had told them he was now the registered keeper. I note the enforcement agents did not directly refer to this in their email dated 09 November 2015 – they simply mentioned the undated documents. But they did also say “we are satisfied that all you have done is changed the registered keeper with the DVLA to avoid seizure of the vehicle.” They also noted the vehicle was not taxed from 20 September 2015. A vehicle’s tax is automatically cancelled when the DVLA’s online system is used to register a change of keeper. I am therefore satisfied the enforcement agents did take into account all of the information provided by Mr X. But they did not consider Mr X to have provided enough supporting evidence that his purchase of the car was genuine. This was a decision they were entitled to take and meant they were entitled to seize the car.

I also note that:

 

Mr X did not provide the enforcement agents with any proof of insurance from 20 September 2015. Arranging insurance is normally the first thing a person does when they buy a new car. I asked Mr X about this and he said his insurance company needed a copy of the V5C before they could insure it. This is not normal practice.

 

Mr X did not provide the enforcement agents with any evidence he had withdrawn money from the bank to pay for the car. As part of my investigation I asked Mr X about this. He said he borrowed the money from his brother and repaid it instalments.

 

In response to my enquiries Mr X told me he sent the Council a revised V5C in late October / early November. The Council did not return it and so Mr X had to apply for a duplicate – this is why the V5C he has was issued in December. Mr X cannot provide proof he sent the V5C in late October / early November and the Council says it has no record of receiving the document. It is not possible for the Ombudsman to establish exactly what happened.

 

Mr Z did not provide any evidence in support of Mr X’s case.

 

Mr X sent me bank statements for October, November and December 2015. These show payments to the DVLA each month with a reference number which matches the car’s registration number. Mr X says these payments were for the car’s vehicle tax. But there is no evidence Mr X showed this evidence to the enforcement agents.

 

For the reasons set out above I cannot uphold this part of Mr X’s complaint.

 

This decision should not be seen as setting any precedent about what constitutes evidence of ownership. Each case should be considered based on the evidence provided and the particular circumstances of the case.

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The following is the second part to the above Local Government Ombudsman's decision:

 

Other matters coming to my attention

 

Rights under the Civil Procedure Rules

 

Part 85 of the Civil Procedure Rules (“the CPR”) allows a third party to make a claim on goods which an enforcement agent has taken under their control. Given the circumstances of Mr X’s case this is an option he could have pursued.

Paragraph 85.4 of Section 3 of the CPR says:

“Any person making a claim...must, as soon as practicable but in any event
within 7 days of the goods being removed
under the exercise of an enforcement power, give notice in writing of their claim to the enforcement agent who has taken control of the goods”.

As part of my investigation I asked the Council if its enforcement agents had told Mr X of his right to make a claim under the CPR. The Council told me the enforcement agents did not advise Mr X of this right. The enforcement agents told the Council there was no requirement to do so. Mr X had also told the enforcement agents he would be taking legal advice.

 

While there is no legal requirement for the enforcement agents to have told Mr X of his rights under the CPR, the Ombudsman expects councils (or parties acting on their behalf) to advise people of the options available if they dispute a decision which affects them.

 

Councils cannot expect members of the public to be legal experts. A person’s claim they will be taking legal advice does not absolve a council of its responsibility to notify someone of the options available if they dispute a decision.

 

In this case, Mr X clearly claimed he bought the car in good faith, for consideration, and without knowing it was bound goods. These are the tests set out in paragraph 7 which the court could have considered.

 

But the enforcement agents did not advise Mr X of his rights and proceeded to remove and sell the car. I consider this to be fault which meant Mr X lost the opportunity for the court to consider his case. This is injustice.

 

The Council’s complaints investigations

 

During the course of my investigation I carefully considered the responses to Mr X’s complaints.

 

In its stage 3 response the Council referred to the V5C Mr X provided being dated December 2015 (see the third bullet points of paragraphs 22 and 23). The Council concluded this showed Mr X did not register the change of keeper with the DVLA until after the car had been seized. But Mr X provided the enforcement agents with an electronic acknowledgment from the DVLA showing he did this on 20 September 2015. The Council would seem to have omitted this piece of evidence in all of its responses to Mr X. I consider this to be fault. I am not persuaded though that even if the Council had considered this piece of information its decisions would have been any different. A person who is the registered keeper of a vehicle is not necessarily the owner. The enforcement agents did not believe the sale of the vehicle was genuine and the Council would seem to share this view. I do not therefore find Mr X to have been caused any injustice by the Council’s failure to consider the email from the DVLA.

 

 

Agreed action

 

Whenever the Ombudsman finds fault it is necessary to remedy the injustice caused.

 

If the Council or its enforcement agents had advised Mr X of his rights to make a claim under the CPR I do not know if he would have chosen to exercise them. But the enforcement agent’s failure to advise him of his rights meant he lost this opportunity.

 

The enforcement agent’s case is clear, but so is Mr X’s. Both parties have evidence they would have presented if the matter had been taken to court. But I do not know what decision the court would have reached if Mr X had decided to make a claim

 

Given the above, I cannot recommend the Council reimburse Mr X the value of the car, his lost possessions and the expenses he has since incurred.

 

Any recommendation needs to instead reflect the fact that Mr X lost the opportunity to make a claim to the court and the uncertainty caused – Mr X will never know what decision the court would have reached. Any recommendation also needs to take into account the distress caused and the time and trouble Mr X has had to devote to this matter.

 

I therefore recommended that:

 

The Council pay Mr X £200 for the lost opportunity to make a claim to the court and the uncertainty caused.

 

The Council pay Mr X a further £50 in recognition of the distress caused and the time and trouble he has had to devote to this matter.

 

The Council review its processes to ensure its enforcement agents properly advise people of their appeal rights.

 

The Council agreed to my recommendations. It should make the payments to Mr X within one month of the date of my final decision and review its procedures within two months.

 

The Council may also wish to establish why it did not consider the DVLA’s email to Mr X as part of its own investigations. This is to ensure evidence is not missed in future complaints.

 

 

Final decision

 

The Council’s enforcement agents were not at fault when they seized Mr X’s car to recover an outstanding penalty charge. Their decision was appropriate given the evidence available at the time. But the enforcement agents were at fault when they did not advise Mr X of his right to make a claim under the Civil Procedure Rules. There was also fault in the Council’s own investigations into Mr X’s complaints. The Council has agreed to take the actions recommended and I have therefore completed my investigation.

Investigator’s decision on behalf of the Ombudsman

 

http://www.lgo.org.uk/decisions/transport-and-highways/parking-and-other-penalties/15-016-609

Edited by Mr.P
Link added - Original link got munged.

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Thread temporarily closed...work in progress.

 

Regards

 

Andy


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The IRRV (the Institute of Revenues, Rating and Valuation) is the professional body for those working in the field of revenues and I was pleased to read today in the November edition of their monthly journal (Insight) the following article from the Local Government Ombudsman reminding their members of the importance of this particular LGO decision.

 

In the September 2016 issue of Insight, I gave some advice about directing disputes about council tax liability to the Valuation Tribunal, rather than letting such disputes get to court or into your formal complaint process. The same advice also applies to disputes about business rates liability – but in this case, make sure the customer knows that the place to resolve the dispute is (or was) the Magistrates Court.

 

There are also other appeal rights which apply, but of which the customer may not be aware. This especially applies to bailiff action. Schedule 12, Part 2 Paragraph 66 of the Tribunals’ Courts and Enforcement Act 2007 (TCE) says a debtor may bring action for a breach of provisions of the Schedule, or action under a defective warrant in the Court. This action is under Rules 84 and 85 of the Civil Procedure Rules, which give debtors a right to go to court to challenge:

 

• a general breach of the Schedule or 
enforcement action taken under a defective 
instrument (Part 84.13) 


• disputes over a co-owner’s share of proceeds 
(Part 84.15) 


• disputes about the amount of fees or 
disbursements recovered (Part 84.16), and 


• where a third party claims controlled or 
exempt goods (Part 85).

 


A claim under Part 85 must be made to the enforcement agents ‘...as soon as practicable but in any event within seven days of the goods being removed...’. 
In one of our recent investigations, a council asked its bailiffs to collect a debt from David. As it happens, the debt was for an outstanding parking offence, but the TCE legislation makes no distinction between the sort of debt being collected. On 10th September, the bailiff issued David with a Notice of Enforcement which, under Schedule 12 of the 2007 Act, 
it says that any goods of the debtor are bound and cannot be sold or given away. The 
Schedule also says if a person buys bound goods from a debtor, they can keep them if they can show they bought the goods:

 


• in good faith

• for valuable consideration, and
• without knowing the goods were bound.

 

David did not respond to the Notice. The bailiffs visited his address and, not meeting him, took control of a car parked outside his address and told David of this. He did not contact the bailiffs, so they returned, clamped the car, and wrote to David to say he needed to pay the debt or they would remove the car.

 

In response, Andrew contacted the bailiffs, saying he had bought the car from David on 20th September. Andrew sent the bailiffs various items of evidence to prove he had bought the car - the bailiffs were not satisfied with these. During this discussion, the bailiffs removed the car and, not satisfied Andrew was the owner, sold it at auction.

 

Andrew complained to us. Our role was not to decide if Andrew owned the car, but if there was evidence of fault in how the bailiffs, acting for the council, decided to sell the car. We looked at how the bailiffs had considered the evidence and concluded their decision was taken properly. However, we asked if the bailiffs had told Andrew of his right to take the matter to court. In response the bailiffs said, as there was no requirement to do so, they had not; and Andrew had said he was taking legal advice.

 

While there was no legal requirement for the bailiffs to have told Andrew of his rights, we expect councils (or those acting on their behalf) to tell people of available appeal rights if they dispute a decision. Councils cannot expect members of the public to be legal experts. Someone claiming they will be taking legal advice does not absolve a council of its responsibility to tell someone of their appeal rights.

 

In this case, the bailiffs and Andrew had clear, but conflicting, cases over their view
on the car’s ownership. If the bailiffs had told Andrew of his appeal rights, we do not know if he would have used them, or what the court’s decision would have been if he had. So we did not recommend the council reimburse Andrew for the loss of the car. Instead we recommended, and the council agreed, a payment of £250 for the lost opportunity to appeal and the unnecessary distress, time
and trouble Andrew had been put to. We
also recommended the council reviewed
its processes to ensure its bailiffs properly advised people of their appeal rights.

 

Judging from complaints we receive, disputes over the ownership of goods, especially cars, are common. If councils and bailiffs tell people of their appeal rights early, these disputes are less likely to be prolonged and take up valuable time.

 

PS: The IRRV has given me permission to reproduce this article for the forum.

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