2 separate procedures in play here.
1. Enforcement of the PCN, see here:
Where a Enforcement Authority believes that a moving traffic contravention has occurred, it may serve a Penalty Charge Notice on the person appearing to them to be the owner of the vehicle. This is...
This is the one in which you submit a PE2 and PE3 to the Traffic Enforcement Centre.
2. How the council may pursue the debt after the Order for Recovery using enforcement agents (bailiffs). A different legal procedure entirely. It is this procedure which the council, through their agents, Gladstones, have messed up.
But you must focus on your out of time application which, if accepted, would take Gladstones out of the picture for the moment, but you could still possibly get some leverage out of their error later.
But the PE route is your priority IMO.