Park homes – Pitch fee – Review – First-tier Tribunal (FTT) increasing pitch fee payable for right to station mobile homes on site in line with retail prices index (RPI) – Appellant site owner appealing – Whether statutory presumption that pitch fee not increased or decreased by more than RPI displaced – Whether FTT misinterpreting earlier decision – Appeal allowed
The appellant owned a park homes site at Wickens Meadow Park in Sevenoaks, Kent. A dispute arose between the appellant and the respondent mobile homes owners on pitches at the site concerning the pitch fee for 2019.
On 16 April 2019, the First-tier Tribunal (FTT) determined that the pitch fee for 2018 should rise, for each pitch, by £6.31 above the rise in the retail prices index (RPI) that year, because the appellant had made improvements to the site that benefited the respondents.
The appellant and the respondents were then unable to agree the 2019 pitch fee. The appellant wanted it to be the 2018 fee as determined by the April decision, increased by the rise in the RPI. The respondents said that the 2019 fee should be calculated by subtracting £6.31 from the 2018 fee and only applying the RPI to the balance.
In October 2019, the FTT concluded that it would be unreasonable, having regard to the April decision, that RPI should be added to that part of the pitch fee which represented a reimbursement of fixed costs incurred, ie the £6.31 per month. It was also clear that that sum had to be deducted from the pitch fee after 20 years of payments.
The appellant appealed contending that the FTT in October misinterpreted its April decision and was wrong to treat the £6.31 as a separate element of the pitch fee and in effect a service charge, merely reimbursing the site owner for the cost of improvements. The appeal was determined under the tribunal’s written representations procedure.
Held: The appeal was allowed.
(1) Part 1 of Schedule 1 to the Mobile Homes Act 1983 implied terms into agreements under which a person was entitled to station a mobile home on a protected site and to live there; it was not disputed that the appellant’s site was a protected site as defined in the Caravan Sites Act 1968. The pitch fee derived from the agreement between the site owner and the occupier; the schedule implied an obligation to pay it only if the agreement required a pitch fee to be paid. The pitch fee was the consideration paid by the occupier for the right to live in the mobile home on the pitch. It was not a service charge because it did not vary with the cost of services: PR Hardman and Partners v Fox, Greenwood and others [2019] UKUT 248 (LC) followed.
(2) Paragraph 20 of Schedule 1 imposed a presumption that the pitch fee would not increase or decrease by more than the increase or decrease in the RPI each year, but it provided that that presumption could be displaced if it would generate an unreasonable result, having regard to para 18(1). Paragraph 20 did not give the site owner an entitlement to an increase in the pitch fee in line with the RPI, although it had come to be regarded in that light: Re Sayer [2014] UKUT 283 (LC); [2014] PLSCS 202 considered.
Paragraph 18(1) did not set out an exclusive list of matters that might justify a departure from the para 20 presumption; it only stated that “particular regard” was to be paid to the matters it set out. Paragraph 18(1)(a) was relevant to the present appeal because the increase in the pitch fee in issue related to the appellant’s expenditure on improvements that benefitted the respondents. The question was not whether the improvements should mean a change in the pitch fee, but what that change should be.
(3) In its April decision, the FTT decided that the RPI related increase would apply to the whole of the pitch fee. Very clear and explicit words would have been needed to decide the contrary. The £6.31 was part of the pitch fee, and if the RPI rate was not to apply to that element of the pitch fee, the pitch fee as a whole would be increased by less than the RPI; a decision that the RPI-related increase would not apply to £6.31 of the pitch fee each year would have amounted to a decision, for each of the following 19 years, that the presumption in para 20 was displaced and that it was unreasonable for the pitch fee to be increased in line with the RPI, as required by para 18(1).
The FTT referred to its April decision as a foundation for its view that the £6.31 should cease to be payable after 20 years. In so doing, it mistook the appellant’s initial calculation of the charge for improvement – by spreading the capital cost over what might be regarded as a period that made it manageable for the occupiers – with the end result, which was a pitch fee that represented consideration for an improved site. Accordingly, the FTT in October 2019 misconstrued its 2018 decision, which did not decide either that the RPI-related increase would apply only to part of the pitch fee thereafter, and not to the £6.31 added in 2018 in respect of improvements, or that the sum relating to improvements would cease to be payable after 20 years.
(4) The construction that the appellant placed on the 2018 decision, far from giving it a double recovery, provided for the recovery of cost, over time, together with some consideration for the improvements by way of a return on the site owner’s investment. What the appellant wanted to charge by way of pitch fee in 2019, namely the 2018 fee increased by the same rate as the RPI over the relevant period, was consistent with the 2018 decision, properly construed.
Eileen O’Grady, barrister
Click here to read a transcript of Wyldecrest Parks (Management) Ltd v Franconi and others
