Park homes – Administration charges – Utilities – Respondents occupying mobile homes in appellant’s park – 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 administering those services – Whether such additional charge recoverable under express or implied terms of pitch agreement – Appeal dismissed
The appellant operated a caravan park 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 standard form pitch agreements to which the implied terms in Schedule 1 to the 1983 Act applied. The express terms of the agreement included, in para 3(b) of Part IV, an obligation on the respondents “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”.
The respondents disputed the charge levied by the appellant for gas, electricity and sewerage services so far as those charges represented the additional costs to the appellant of providing, administering and maintaining those services, and not merely the cost of the electricity, gas and sewerage used by the respondents.
Determining an application by the respondents under section 4 of the 1983 Act, the first-tier tribunal (FTT) held that, save where expressly provided in the pitch agreement, the appellant could not recover any “service charge” element in respect of the costs of providing and administering utilities but was limited to the direct costs of supply to each pitch. It disallowed most of the additional costs claimed by the appellant.
The Upper Tribunal (UT) subsequently upheld that decision in large part. Although it found that certain items disallowed by the FTT were recoverable under the pitch agreement, including charges for emptying and regularly servicing the sewerage tanks and a fee payable for an Environment Agency licence, it concurred with the FTT’s view that the standard form pitch agreement was concerned solely with the reimbursement of specific outgoings incurred by the owner in meeting liabilities to third-party service providers and did not allow for the recovery of a general service charge: see [2015] UKUT 587 (LC); [2015] PLSCS 321. The appellants appealed.
Held: The appeal was dismissed.
(1) Whether the respondent was entitled to recover the additional costs turned on the proper meaning and effect of para 3(b) of Part IV of the pitch agreements. On its proper construction, the “charges” mentioned in that provision were restricted to charges by third-party utility suppliers and the “other services” mentioned were those provided by third parties in respect of third-party utility supplies to the pitch. The first part of para 3(b) was directed to general and water rates (now council tax and water charges payable to a private water company), which were the archetype of liabilities due to third parties. The utilities mentioned in the second part were also typically provided by third-party utility suppliers. Payments for other third-party contractors and for services undertaken by the respondent itself were not recoverable under para 3(b) but could be recovered only as part of the site fee.
The language of para 3(b) was unsuitable to cover both charges incurred to third parties and liabilities to the respondent itself. The single word “charges” would then have been used to cover two quite distinct sources of liability. One would be for a specific amount, uncontrovertibly incurred, and simply verified by reference to a third-party charge. The other would, in substance, be a service charge to remunerate the park owner for work done and services performed by or on behalf of the owner. The natural and normal way to provide for a service charge payable by an occupier was by a separate and self-contained promise or covenant by the occupier to pay specified costs and expenses incurred by the owner.
Moreover, the pitch agreements did not contain any of the usual provisions for control of excessive service charges which were found in leases, either expressly or as regulated by statute, or any express provision limiting what was recoverable by way of service charge to a reasonable amount in respect of costs reasonably incurred. It was highly improbable that a written statement in standard form made pursuant to the 1983 Act would include provision for recovery of costs and expense incurred by the owners themselves, or for remunerating other work carried out by the owners, without any express provision specifying limitations on what was recoverable and how the amounts charged could be challenged.
(2) Instead, costs and expenses incurred by the site owner, and remuneration for work done, were potentially recoverable as part of the site fee, which was reviewable annually under the terms of the agreement. While the presumption, on such a review, was that the pitch fee should increase or decrease in proportion to the movement in the retail prices index (RPI), the increase in the pitch fee could be greater if the presumption would produce an unreasonable amount. While the site owner’s costs and expenses, and the other sums in issue in the present proceedings, were not among the matters to which “particular regard” was to be had on a review, that did not preclude them from being taken into account: see paras 18,19 and 20 of Chapter 2 of Schedule 1 to the 1983 Act.
Whether, and to what extent, costs incurred or to be incurred by the site could be recovered as part of the pitch fee depended on what was agreed with the occupiers or, in the absence of any such agreement, was determined by the FTT to be reasonable. There was therefore nothing inherently improbable about costs and expense incurred by the respondent in respect of work done and services provided by them in connection with utilities to the pitches being recoverable as part of the site fee rather than under para 3(b) of Part IV of the agreement.
(3) For the same reasons, there was no scope for an implied term that the respondent could recover its additional costs, expenses and other sums pursuant to para 3(b). Such a term was neither so obvious that it did not need to be expressed nor necessary to give the agreements commercial or practical coherence: Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72; [2016] AC 742; 2016] EGLR 8 applied.
Conrad Rumney (instructed by Tinn Criddle Hall LLP, of Alford) appeared for the appellant; the second respondent appeared in person.
Sally Dobson, barrister
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