Park homes – Pitch agreements – Utilities – Respondents occupying mobile homes in appellant’s park pursuant to pitch agreements – Appellant charging for provision of gas, electricity and sewerage to pitches – Charge not limited to cost of gas, electricity and sewerage actually used by respondents but also including contribution to appellant’s costs of providing and administrating those services – Whether such additional charge recoverable under express terms of pitch agreement or terms implied pursuant to Mobile Homes Act 1983 – Appeal and cross-appeal allowed
The appellant operated a caravan park at Fiskerton, Lincolnshire, which was a protected site for the purposes of the Mobile Homes Act 1983. The respondents occupied mobile homes on permanent pitches in the park pursuant to pitch agreements with the appellant. The respondents disputed the charge levied by the appellant for included charges for gas, electricity and sewerage services so far as those charges represented the cost to the appellant of providing, administrating and maintaining those services, and not merely the cost of the electricity, gas and sewerage used by the respondents.
Each pitch was provided with a supply of LPG (liquefied petroleum gas) piped from a bulk tank filled by an independent supplier whose charges, including the charge of renting the tank itself, were met by the appellants. The supply to the permanent pitches was individually metered and the cost passed on to the occupiers of the pitches by quarterly billing. The appellants charged a unit rate for the gas supply at a level which included a contribution towards the cost of providing gas to the communal areas of the park and the costs incurred by the appellant in reading meters, tank rental, maintenance of the tank compound and underground pipes, plus an interest charge, based on the fact that the appellants had to pay for the LPG when it was supplied but was reimbursed only quarterly, and a further administration fee. Electricity to the pitches was also metered, and charged at a rate which included a contribution towards the appellant’s costs of supplying electricity to the communal areas and of reading meters, plus standing charges and meter fees as well as an administration fee, the cost of calling out electricians to resolve any problems and the cost of maintaining a computer programme to assist with billing. In respect of sewerage, which the appellant provided through its own private sewerage system, the additional costs charged included the cost of a permit from the Environment Agency, charges levied by a contractor for emptying the tanks, charges by a second contractor for servicing the tanks every quarter and the cost of electricity required to operate the system.
On an application by the respondents under section 4 of the 1983 Act, the first-tier tribunal (FTT) held, applying Re Britaniacrest Ltd’s appeal [2013] UKUT 521 (LC), that the appellant was only entitled to recover the direct costs of supply, so that one of the other costs, save for the cost of supplying electricity to the communal areas, could be passed on to pitch holders in the absence of an express provision to that effect in the pitch agreement. The appellant appealed, contending that the terms incorporated into the pitch agreement by the 1983 Act permitted the recovery of such costs. The appellant appealed. The respondents cross-appealed against the FTT’s decision in respect of electricity to the communal areas.
Held: The appeal and the cross-appeal were allowed.
(1) Neither the express terms of the pitch agreements, nor the statutory implied terms in Chapter 2 of Schedule 1 to the 1983 Act, included anything which looked like a service charge. If either the parties to individual agreements, the draftsmen of standard forms of agreement, or the Secretary of State exercising the power to introduce new implied terms wished to impose an obligation on the occupier to pay a separate charge for services provided by the park owner, there was both conventional language and well-tried models which could be adapted to that purpose. Had a form of service charge been intended, one would expect to see provisions which made it absolutely clear what the charge was to be for, when it was to be paid, how it was to be ascertained and whether it was to be open to any external scrutiny or certification. Nothing of that sort is found in the common form of pitch agreement or in the statutory implied terms.
The express terms of the pitch agreement, so far as they imposed an obligation in para 3(b) of Part IV “to pay and discharge all general and/or water rates which may from time to time be assessed charged or payable in respect of the mobile home or the pitch… and charges in respect of electricity gas water telephone and other services”, were not apt to impose a general service charge obligation on the occupiers but were instead concerned solely with the reimbursement of specific outgoings incurred by the owner in meeting liabilities to third-party service providers. The word “services” was used in the specific sense of utilities, rather than in the more general sense of any service rendered by the owner to the occupier. Each service was generally supplied by a third party and the charge for that service would be quantified by a third party. Para 3(b) was therefore concerned only with the payment, or reimbursement, of outgoings, namely the charges of third-party suppliers or service providers, and did not impose a more general obligation to make payments for administrative tasks performed by the owner in connection with the supply or service: Britaniacrest applied.
The occupier’s obligation under para 21(a) of the statutory implied terms mirrored para 3(b) of the express provisions and was concerned with the pitch fee payable to the owner. It obliged the occupier to make a payment of “all sums due under the agreement in respect of gas, electricity… [etc] supplied by the owner” only in cases where such sums were in fact “due under the agreement” in question, thereby presupposing that there was a provision elsewhere in the agreement which rendered such sums due. Such an agreement might be oral, or implicit in the practice adopted at the site, or expressly provided for in writing. However, in the instant case, no such obligation was provided by para 3(b) itself.
It followed from the presence of a positive requirement for the owner to maintain the services, and the absence of an express or implied term for the payment of a charge to cover the costs of the owner in performing that obligation, that the pitch fee had to be seen as providing the only financial consideration for that performance. In other words the owner was entitled to the pitch fee and to reimbursement of sums that it had paid to third-party suppliers of utilities, but it was not entitled to a service charge, or surcharge, on top of those sums.
(2) The effect of para 3(b) was therefore to limit the charge which the appellant could make in respect of LPG to a unit charge equal to the cost that it had itself incurred for the LPG supplied to it. Costs incurred by the appellant in reading meters, in the provision and maintenance of the infrastructure, including the tanks themselves, the tank compound and the underground pipes, the interest charge and the administration fee were not payable by the respondents. The occupiers were entitled to be provided with documentary evidence in support of the charges on request to the appellant and free of charge in accordance with para 22(b)(ii) of the statutory implied terms. The private sewerage system operated at the park was in a different category and the appellant was entitled to pass on some of the costs incurred in connection with the system. The charges for emptying and regularly servicing the tanks were charges falling within para 3(b) of the pitch agreement, as was the fee payable for the Environment Agency licence. However, the price of electricity supplied to the communal areas including the swimming pool, the sewerage system, the public toilets, laundry room, shower block and the street lights at the park was not recoverable under para 3(b). Para 3(b) was restricted to the costs of utilities provided to the pitch. The natural meaning of para 3(b) was that the electricity, gas and water charges which the occupier was to pay were those incurred in the supply of services to the pitch alone, and did not extend to the cost of operating the communal facilities of the park.
The liability of the respondents to pay for electricity, LPG and sewerage services was accordingly limited to their respective proportions of: (i) the standing charge and the unit price of electricity delivered to their pitches at the rate paid by the appellant to its supplier; (ii) the unit price of electricity required to operate the sewerage system at the rate paid by the appellant to its supplier; (iii) the cost of LPG delivered to their pitches at the unit price paid by the appellant to its LPG supplier; and (iv) the charges of third-party contractors engaged by the appellant to empty and service the sewerage system and the fee paid to the Environment Agency in respect of the system.
Helen Gardiner (instructed by Tinn Criddle Hall LLP, of Alford) appeared for the appellant; Alan Savory, of the Independent Park Homes Advisory Service, appeared for the respondents.
Sally Dobson, barrister
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