Mobile Homes Act 1975–Appeal by site owners from decision of county court judge varying inter alia the lengths of the terms offered to occupiers–Judge awarded extended terms, such as eight or 10 years, in some cases–No jurisdiction to do so–Act provides for security of tenure for five years, with an option to obtain a further three years–Judge’s power to vary provisions does not apply to the period of the agreement–Appeal allowed
This was an
appeal from a decision of Judge R G Woolley at Builth County Court on
applications by a number of occupiers of mobile homes in Caerwnon House Leisure
Park, an area owned by Roy and Joan Calvert, the present appellants. The
applicants had applied under the Mobile Homes Act 1975 for various amendments,
including the extension of the terms, in agreements offered by the site-owners
to the occupiers pursuant to the provisions of the Act. The judge made a number
of alterations in the provisions of the agreement, including the award of
extended terms. The site-owners contended in the present appeal that the judge
had no power to enlarge the terms beyond five years, subject to the possibility
of a three-year extension under section 3(c) of the Act.
L Hoffmann QC
(instructed by Tozers, of Dawlish) appeared on behalf of the appellants; D E
Morgan (instructed by Dilwyn Jones & Sons, of Llandrindod Wells)
represented the respondents.
Giving
judgment, LORD DENNING MR said: This is the first case we have had under the
new Mobile Homes Act 1975. It came into force on October 1 1975. It was, no
doubt, designed to deal with caravans, but it also applies to very substantial
dwellings. So substantial indeed that the Act might almost be called the
‘Immobile Homes Act.’ The
dwelling-houses here are situated in Wales in an area called the Caerwnon House
Leisure Park. They are more like bungalows than caravans. They have no wheels.
Being made of wood, they can be moved with considerable labour and expense.
But, beyond doubt, they are very permanent and there is no intention to move
them. The owners of the area are Mr and Mrs Calvert. They have given licences
for ‘pitches’ in the park to occupiers. They sold the wooden dwellings to the
licensees at varying prices according to their age and the accommodation in
them, and so forth. They sold them for sums in the region of £4,000, £5,000 or
£6,000. They sold them to elderly men and women who used them as their homes
and looked forward to remaining there for the rest of their days.
Prior to the
Mobile Homes Act, the occupiers had no security of tenure. They were only
licensees of the ‘pitch’ on which their homes were standing. They were not
protected by the Rent Restrictions Acts, or anything of the kind. They were
liable to be ordered to quit at short notice. One of the objects of the Mobile
Homes Act was to give them some security of tenure so that they could not be
evicted at short notice and also to ensure that the terms of their occupation
were reasonable. The statute laid down several requirements which the
agreements had to contain.
On January 1
1976, when the Act came into force, Mr and Mrs Calvert, the site-owners, made
an offer to the various occupiers of new terms and conditions for their homes
which they said fulfilled the statutory requirements. We have before us the
case of several of them. I will take Mr Romans, whose address is given as 3
Birch Way, Caerwnon Leisure Park. He is a fairly fit man, 74 years of age. He
had bought his house four years before for £4,000. It has two bedrooms. He
expended £100 on a garage, £135 on central heating, oil tank £70, and so forth.
When the Mobile Homes Act came into force, the site-owners offered him a
written agreement in order to conform to the Act. It was for a term of five
years, from January 1 1976 until December 31 1980. There was an annual fixed
fee of £180 payable by monthly instalments. He was to remove the mobile home
within 14 days, after the expiration of the agreement. He was also to comply
with the rules of the park.
A number of
these occupiers got together (some of them got legal aid) and challenged this
new agreement. They wanted a longer term than the five years: and various other
amendments. The case was heard by the county court judge. It was assumed by
both parties that the judge had an unlimited power to vary and alter all terms
which were offered. It was assumed that the judge could do what he thought
reasonable. On that basis the judge altered the provisions a great deal,
including the length of tenure. In some cases he awarded that, instead of five
years, it should be 10 years: and in others, eight years. The length depended
on the age of the individual occupiers, and how long the judge thought they
would wish to be there, and so forth. In the case of Mr Romans, he awarded
eight years, with a right to an extension of a further three years.
No challenge
was made to the judge’s jurisdiction to give these extended periods: but on
appeal to this court, Mr Hoffmann QC has submitted to us that the judge did not
have the jurisdiction to extend these terms beyond five years, with a
three-year extension. Although the point of jurisdiction was not taken in the
court below, nevertheless it can be taken in this court. It is settled law that
parties cannot give jurisdiction by consent–see Oscroft and Others v Benabo
and Another [1967] 1 WLR 1087 at p 1092.
We have been
taken through the statute. Section 1(1)(b) applies to the case before us. It
says:
. . . where
the owner of a protected site proposes to permit–. . . (b) any person who has
acquired a mobile home which is stationed on that site to continue to station
it on the site, and . . . that person has notified the owner in writing that he
intends to occupy the mobile home as his only or main residence, it shall be
the duty of the owner . . . to offer to enter into a written agreement with him
in accordance with the provisions of section 2 of this Act.
Now comes
section 2(1):
An agreement
offered by an owner of a protected site in pursuance of a duty imposed on him
by section 1 of this Act shall comply with section 3 of this Act and shall be
for a term of not less than five years.
Note those
words: ‘shall be for a term of not less than five years.’ The period is expressly stated. Every other
requirement of the agreement is dealt with in section 3: and, in case of
dispute, can be determined by the court under section 4(5), (6) and (7). But
the period of the agreement is left to the site-owner to determine, provided
always that it is not less than five years. This interpretation is borne out by
the rest of section 2. The proviso to section 2(1) deals with cases where the
site-owner is not in a position to grant a period of five years; as, for
instance, when he has a reversion of less than five years, or has a planning
permission which limits him and does not allow him to grant five years. In
those cases it is sufficient for the site-owner to grant such a period as he
can, even though it is less than five years.
Section 2(2)
is instructive. It deals with cases where the site-owner afterwards becomes in
a position to grant a period of five years: as, for instance, if he acquires
them freehold or gets unlimited planning permission. In those cases the
site-owner must offer to give the full period of five years: but no more. All
this points to the period of five years being treated differently from any
other provision in the agreement.
Turning to
section 3(c), the agreement is to contain a right to the occupier to extend the
period for a further three years after the five years. This again treats the
period as a thing apart.
Stopping
there, I think the site-owner in this case fulfilled his statutory duty by
offering the period of five years. But the question is: did the county court
judge have any power to grant more than five years? He granted some of these occupiers 10
years–and some eight years–with a right to extension of three more years. Had
he any jurisdiction to do this?
Mr Morgan
submitted to us that the county court judge was at liberty to give an extension
of term: and that he had an unlimited power to extend it. In support of his
submission Mr Morgan relied on the terms of section 4(5), which says:
An occupier
who is dissatisfied with any of the terms or conditions in an agreement offered
to him by an owner in pursuance of a duty imposed under Section 1 of this Act
may, within the period of three months following the date on which the
agreement is so offered, apply to the court for the determination of the matter
in dispute.
Mr Morgan
submitted that those words are wide enough to entitle the judge to interfere
with all the terms and to go through the agreement, as this judge did, and to
redraft it as he thought fit. It seems to me that that is not the correct
interpretation of that clause. It seems to me that that clause does not apply
to the period of years offered by the site-owners. It deals with all the other
terms and conditions of the agreement, but not to the period of years which is
treated throughout as a thing apart from the rest of the agreement.
Mr Morgan
relied on section 4(1)(a) dealing with cases in which the site-owner has not
made an offer at all. The court is enabled under section 4(2)(a) to make such
terms and conditions as it thinks reasonable. He relied also on section 4(4)
which provides that where the occupier does not signify agreement with the
terms or conditions the court can insert such terms and conditions as it thinks
reasonable.
It seems to me
that those sections again do not deal with the period of the agreement. They
only deal with the other terms and conditions. Reading through the statute as a
whole, it seems to me that the legislature has itself declared that a period of
not less than five years (with an extension of three years) is sufficient to
satisfy the duty of the site-owner. So long as he offers an agreement to that
period, he has done his duty: save that, in regard to all other terms and
conditions if there is a dispute between the parties, it can be referred to the
county court judge, and he can decide then what is reasonable. The long and
short of it is that this Mobile Homes Act does give security of tenure for five
years, with an option to extend by another three years; and it gives a general
supervision by the county court judge over all the provisions to see that the
agreement is fair and reasonable.
The point
raised in this appeal was not raised before the judge, so he had no opportunity
of dealing with it: but, on being argued, I think that the judge did not have
jurisdiction to grant the extended terms as he did. I would allow the appeal
accordingly.
Agreeing,
ORMROD LJ said: The appeal now turns on subsection (5) of section 4 of the
Mobile Homes Act, which is, in my judgment, not at all clearly drafted. It is
not immediately obvious what was in the mind of the draftsman or what situation
he was intending to deal with. The most startling contrast to my mind between
subsection (5) and subsections (2)(a) and (4) is the fact that the latter in
terms give the court power to impose such terms and conditions as it thinks
reasonable. Section 4(5) in contrast requires the court to determine the matter
in dispute. If it is then to be said that those words give the court a general
discretion to draft and arrange all the terms of a contract between the
parties, I can only say that the language used by Parliament seems to me to be
manifestly defective.
One only has
to test this by using perhaps the most stringent of all the tests, and that is
to ask first the question, can the county court judge impose a term of
indefinite length? Mr Morgan is obliged
to say ‘Yes, in theory he can, but he will only make a term which is
reasonable.’ But the next question must
be, by what standard? That clearly in
this case worried the learned judge because the only two standards he could
think of seemed to be the state of health of the proposed occupier and his age
together with the state of health and its age of the caravan, and this simply
must be nonsense. If one tests it against an even more critical standard, that
is, the amount to be paid by the occupier of the caravan, one finds that Mr
Morgan is driven to say ‘Yes, the county court judge can put in any figure he
likes no matter whether the parties had previously agreed.’ Again there is no indication in the statute
of any standard to be applied; and, if Parliament is really giving the county
court power to fix the rent of mobile homes in these circumstances, it is quite
extraordinary that they should do it as a side-effect of a subsection which is
designed to resolve disputes as to tenure.
We have to
give some meaning to this subsection, and I entirely agree with what my Lord
the Master of the Rolls has said, that the only meaning which can rationally be
given to it is that it refers to a dispute as to whether the terms offered by
the landlord comply with the Act or are consistent with the terms of a
subsisting agreement between the owner and the occupier before the Act itself
came into force. Otherwise I can see no dispute which is capable of
determination without the court exercising a discretion which as far as I can
see it has not got.
I also agree
with all my Lord has said on the narrower point where the statute prescribes
the terms of the offer–the owner must offer no less than five years–and I am
quite unable to imagine how it can be suggested, again apparently indirectly,
that the county court judge has unrestricted power to extend that time.
I therefore
agree that this appeal must be allowed.
Also agreeing,
GEOFFREY LANE LJ said: The practical effect of the occupiers’ argument here is
that the judge would be entitled to ‘fix the rent’ between people who are not
in contractual agreement at all, forcing an owner to enter into an agreement
with a man upon terms which he has no desire to accept or, secondly, to alter
on criteria which are not
occupier. Such a result would be absurd and cannot have been intended by
Parliament.
The appeal
should be allowed.
The appeal
was allowed with no order as to costs save legal aid taxation.
