Mobile Homes Act 1983 – Pitch fees – Water supply – Appellant owning mobile home in residential caravan park – Owner of park notifying occupiers of proposed increase in pitch fees in accordance with increase in RPI – Increase confirmed by residential property tribunal – Whether RPI increase properly applying to pitch fees so far as these reflecting charge for water supply to pitches – Whether separate charge made for water to which restrictions in Water Resale Order 2006 applying – Appeal dismissed
The appellant owned a mobile home in a residential park that provided permanent pitches for 129 mobile homes and was a protected site within the meaning of the Mobile Homes Act 1983. Pitch fees were payable to the owner of the park in respect of the occupation of the pitches and the services provided to them. Although the terms of the relevant pitch agreement permitted the park owner to charge for water supplies, in practice no separate charge was made and the water was included in the overall pitch fee.
In November 2012, the park owner gave notice to all pitch occupiers of a proposed 3.2% increase in pitch fees with effect from January 2013, in accordance with the increase in the retail prices index (RPI) in the previous 12 months. The appellant’s objections to the proposed increase were considered and rejected by a residential property tribunal (RPT), which confirmed the park owner’s entitlement to increase the pitch fee as proposed.
One of the appellant’s objections was that the increase could not lawfully apply to such part of the pitch fee that represented a charge for the supply of water, since the Water Resale Order 2006, made under r section 150 of the Water Industry Act 1991, prohibited the making of a profit by a re-seller of water. He contended that the park owner should provide information to enable the charge for water comprised in the pitch fee to be identified, leaving only the remaining balance to be the subject of the increase.
On that issue, the RPT found that the park owner was not re-selling water at a profit, because: (i) the park owner was not a re-seller of water since no specific element of the pitch fee had been identified that was attributable to water as opposed to any other service; or, if that were wrong (ii) the park owner was entitled to an increase in accordance with RPI where it could show that the true cost had equalled or exceeded that amount in the relevant period such that it had not profited from re-selling the water. The appellant appealed.
Held: The appeal was dismissed.
(1) The effect of the Water Resale Order 2006, made under section 150 of the Water Industry Act 199, was that anybody re-selling water or sewerage services could charge no more than the amount that they were themselves charged by their own water company, plus a reasonable administration charge. A “re-seller” was defined to include any person who was not a statutory water undertaker who provided a supply of piped water to any purchaser. The park owner did not come within that definition since, although the pitch agreement entitled it to make a separate charge for water, those terms had never been implemented and no separate charge for water had ever been levied in addition to the pitch fee. It was not possible to identify a separate element of the pitch fee which represented the consideration for the supply of water. As matters had evolved over time, a single fee had become payable for all the benefits received by the occupier under the agreement. The whole pitch fee had come to be paid for the totality of the rights, benefits and services received under the agreement and it would not be legitimate to attempt to isolate a charge for a particular element of that total consideration. In particular, it was not legitimate to assume that the water component of the pitch fee could be ascertained simply by apportioning the water bill paid by the park owner amongst all who receive their water from the same metered supply. The water bill had increased at a faster rate than RPI, so that it had consumed a greater proportion of the pitch fees collected by the park owner over the years. It was a misconception to equate the costs incurred by the site owner with a charge to the occupier.
Since the RPT had correctly found that the park owner did not charge the appellant separately for water, it followed that the 2006 Order did not apply to the supply of water. The appellant was not a “purchaser” within the meaning of the 2006 Order since he did not buy water from the park owner in the manner contemplated by the Order. Although he received water in return for payment, he did so only as part of a wider bargain, which included the right to station his mobile home on the pitch, together with any other rights and services conferred by the agreement, in return for a single undifferentiated and indivisible pitch fee. It was impossible to apply the maximum charge provisions of the Order to such an arrangement. The RPT had been correct to conclude that the increase which it otherwise considered to be appropriate was properly applied to the whole of the pitch fee fixed by agreement in the previous year.
(2) The overall effect of the provisions of Part 1 of Schedule 1 to the 1993 Act was that, on the annual review of pitch fees for the Schedule 1 provided, the pitch fee could change either by agreement or if the RPT considered it reasonable for the fee to be changed, in which case the amount of the increase or decrease would ordinarily be limited by the percentage change in the RPI since the last review date. For so long as water charges continued to be subsumed into the pitch fee, the park owner was restricted to the RPI increase in the pitch fee irrespective of the increase in the cost to it of supplying water to the park. Correspondingly, the owner was not required to provide the information that would be required by the 2006 Order if a separate charge was levied. Similarly, while para 22 of Schedule 1 to the 1983 Act imported an implied term into the pitch agreement, requiring the park owner to provide documentary evidence and an explanation of any charges for water or other services payable by the occupier to the owner, that requirement did not apply where there was no separate charge for water and the only charge was the single pitch fee for the totality of the services provided.
(3) In the absence of any express agreement varying the agreement, it was likely that either party could inform the other that, with effect from the next review date, they wished to revert to the strict terms of the agreement, with a separate charge being made for water in addition to the pitch fee. Since the pitch fee had already been reviewed on the assumption that it provided consideration for both the pitch itself and the water supplied to it, as well as any other services and amenities, it would be necessary for the party wishing to revert to the strict contractual position to give notice of that requirement so that the pitch fee could be adjusted appropriately at the next review date, with the introduction of water charges taking effect at the same time. It would be for the tribunal to consider, in the light of the previous levels of pitch fee, and the cost incurred by the park owner for the supply of water at that time and subsequently, what adjustment was appropriate. The task would not necessarily b straightforward one owing to the omission of the 1983 Act to identify any clear valuation principle by which pitch fees were to be adjusted: Walker v Badcock [1997] 2 EGLR 163; [1997] 42 EG 180 considered.
The appeal was decided on written representations.
Sally Dobson, barrister
