Mobile homes Act 1983 – Pitch fee – Review – Appellant giving notice to increase pitch fee in line with retail prices index on annual review – First notice giving incorrect figure for RPI adjustment – later notice giving correct figure and specifying date after end of year for increase to take effect – Whether notices valid to initiate review – Whether first notice complying with requirement in para 25A of Chapter 2 to specify percentage increase or decrease in RPI – Whether later notice invalidly specifying that increase to take effect after next review date – Appeal allowed in part
The appellant owned a caravan park in Harrogate which was a protected site within the meaning of the Mobile Homes Act 1983, with space for 135 permanent residential caravans. The respondents were the owners of mobile homes stationed on 15 of the pitches on the park, pursuant to pitch agreements to which the 1983 Act applied. Each agreement provided for a review of the pitch fee on 1 April of each year.
In January 2014, the appellant served a pitch fee review notice on the respondents, under para 17 of Chapter 2 of Part 1 of Schedule 1 to the 1983 Act, giving notice of a proposed increase in the pitch fee on the 2013 review from £27.79 to £28.87 per week with effect from February 2014. The notice was accompanied by a document in the form prescribed by the Mobile Homes (Pitch Fees) (Prescribed Form) (England) Regulations 2013, indicating that the increase was based on the existing pitch fee adjusted according to the retail prices index (RPI). However, the notice gave the wrong figure for the RPI adjustment, based on an incorrect percentage. That error was subsequently corrected by another review notice served in March 2014, proposing a new pitch fee of £28.71 per week, based on the correct 2013 RPI increase of 3.3%. That notice proposed that the increase take effect from 28 April 2014.
The respondents were dissatisfied with the revised pitch fee. In response to an application by the appellant for a determination of the new pitch fees, the respondents contended that no valid review notice had been served. Finding in favour of the respondents, the first-tier tribunal (FTT) held that: (i) owing to the error over the RPI increase, the first notice did not comply with the requirement, imposed by paras 17(6A) and para 25 of Chapter 2, to “specify any percentage increase or decrease in the retail prices index”; and (ii) the later notice was invalid because the increase did not take effect within the relevant review period, with the effect that a full year had passed without an increase or decrease and the right to a review for that year was lost. The appellant appealed.
Held: The appeal was allowed in part.
(1) When determining the consequences of non-compliance with the process or procedure laid down by a statute for the exercise or acquisition of some right in relation to property conferred by that statute, the modern approach was not to ask whether there had been substantial compliance, or to consider the particular circumstances of the recipient of the notice or the degree of prejudice caused by the non-compliance, but was instead to interpret the notice to see whether it actually complied with the strict requirements of the statute. If it did not, it would be invalid: Osman v Natt [2014] EWCA Civ 1520; [2015] EGLR 11 applied. That stricter approach had the advantage of certainty in relation to property rights and was applicable to the statutory procedures for initiating a review of pitch fees under agreements to which the 1983 Act applied. Moreover, para 17(6A) of Chapter 2 of Part 1 of Schedule 1 to the 1983 Act was explicit in prescribing that a notice which proposed an increase in the pitch fee was of no effect unless it was accompanied by a document which complied with para 25A, thus removed any doubt as to the consequences of non-compliance and leaving no room for considerations of whether any prejudice has been suffered as a result.
The first notice served by the appellant was invalid because it failed to specify the correct RPI figure. Para 25A required the notice to “specify any percentage increase or decrease in the retail prices index calculated in accordance with paragraph 20(A1)” and the first notice had failed to do so, since the percentage increase in RPI which was specified was not calculated in the required manner. It was irrelevant that the recipient might have been able to ascertain the appropriate RPI increase. That was exactly the sort of research which the recipient of the notice would assume that the giver had already carried out. The recipient was entitled to assume that the information contained in the form was accurate, save where it was obvious that an error has been made. It would not have been obvious to a reasonable recipient either that there was an error, or what the correct figure ought to have been: Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749; [1997] 1 EGLR 57 distinguished. The FTT had therefore correctly found that the first attempt to initiate the pitch fee review was ineffective. Although the notice and accompanying document were only a proposal, and could not give rise to a new pitch fee unless and until the proposal was agreed, the failure to calculate the RPI adjustment using the method prescribed in para 25A was fatal.
(2) However, the appellant had validly initiated the 2013 review by its later notice. That notice was not invalidated by reason of specifying an effective date for the pitch fee increase that was after the end of the year in which the review fell due. Where the owner of a site did not serve a pitch fee review notice “by the time by which it was required to be served”, namely at least 28 days before the review date as required by para 17(2), it could do so “at any time thereafter”: see para 17(6)(b). In such cases, the alternative review procedure under para 17(7) to (10) applied. A late review notice served the same purpose, and had the same effect, as an “in-time” review notice under para 17(2), with the sole exception that any new pitch fee which was agreed or determined by the FTT following a late review notice would take effect not from the review date but 28 days after the date of service of the late review notice. The critical words in para 17(6)(b) were “at any time thereafter”, which clearly indicated that there was no terminal date after which a late review notice could no longer be served. The practical operation of para 17(7) and 17(8) was also inconsistent with any requirement that a review notice for a particular year be served to take effect before the next review date. Moreover, the general rule in rent review was that time was not of the essence of the right to a review and that some positive indication, either in the language or the structure of a rent review scheme, was required before the right to a review would be lost by a delay in its commencement: United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 applied. There was nothing in the statutory language to indicate that a later review could only take effect before the next review date. The guidance notes to the 2013 Regulations were wrong so far as they suggested the contrary.
Although the possibility of a number of pitch fee reviews taking place in a single year was an unattractive one, the possibility of a large increase taking account of RPI changes over more than one year was ameliorated by the fact that any such increase could not take effect retrospectively, but only from a date 28 days after the service of the late review notice.
It followed that the appellant’s later notice had validly initiated the 2013 review. Having regard to the presumption in para 20(A1) that a pitch fee would increase annually by RPI, and to the absence of any other issue between the parties on the amount of the increase, it was appropriate to substitute a determination, under para 16, that the amount of the new pitch fee was £28.71 as stated in the later notice, to take effect on 28 April 2014.
Paul Kelly of Tozers Solicitors LLP, of Exeter, appeared for the appellant; three of the respondents appeared in person.
Sally Dobson, barrister
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