Appellant owner of park supplying bottled gas to occupiers of mobile homes – Occupiers purchasing gas from third party – Appellant seeking to increase pitch fees to reflect losses – Whether loss of profit from discontinued gas supplies a relevant factor applicable to operation of the park – Mobile Homes Act 1983 – Appeal allowed
The appellant was the owner and operator of Elms Mobile Homes Park (the park). The respondents were occupiers of mobile homes at the park. The terms upon which the respondents occupied their relevant pitches were contained in written agreements made under the Mobile Homes Act 1983. Each mobile home had gas central heating, and one of the services provided by the appellant was the sale of bottled gas. Upon the expert evidence, the profit that the appellant earned from these sales was traditionally an important source of income. In 1993 the respondents wrote to the appellant making unfavourable comparisons between the appellant’s gas prices and those of competitors. They subsequently ceased to purchase the gas sold by the appellant. The appellant purported to raise the pitch fee in order to offset the lost profit in the absence of gas sales.
In June 1998 the county court held that the loss of profit from gas sales was not a “relevant factor applicable to the operation of the park” under para 7(a)(iii) of the written agreements. It accepted that loss of commission was a relevant factor under that paragraph, but distinguished it from loss of profit on gas sales, as the appellant had no contractual or statutory entitlement to profit from such sales and the profit was a figure that fluctuated. The appellant appealed. The issue was whether the appellant’s resultant loss of profit on the sale of bottled gas was a relevant factor in the annual review of the pitch fee under para 7(a)(iii) of the written agreements.
Held: The appeal was allowed.
There was no reason why contractual enforceability should be a necessary touchstone to show that profit from gas sales was a relevant factor under para 7(a)(iii). Profit from the sale of gas was traditionally an important source of income, but it was properly regarded as a relevant factor, as it bore no less upon the appellant’s responsibility regarding maintenance and operation of the park than did loss of commission: see Stroud v Weir Associates Ltd 1 [1987] EGLR 190. The judgment of the county court could not be supported. The pitch fee was to be increased to reflect the loss resulting from the the discontinued use of the gas supplies.
Charles Auld (instructed by Tozers, of Exeter) appeared for the appellant; Ian Clarke (instructed by Bell Wright & Dallman, of Gainsborough) appeared for the respondents.
Sarah Addenbrooke, barrister
