Park homes – Administration charge – Mobile Homes Act 1983 – Respondents occupying mobile homes on “protected site” within 1983 Act – Review of pitch fees payable to appellant site owner – Whether review to take account of increase in site licence fees payable by appellant – Paras 16 to 20 of Schedule 1 to 1983 Act – Appeal allowed
The respondent operated a caravan park in Chipperfield, Hertfordshire, which was a “protected site” for the purposes of the Mobile Homes Act 1983. The appellant was the occupant of a mobile homes on the park, occupying a pitch pursuant to an agreement to which the implied terms in Schedule 1 to the 1983 Act applied. The pitch fee payable to the respondent under that agreement was subject to review in December of each year.
In 2014, the local authority, as the body responsible for licensing the respondent’s site, introduced an annual site licence fee of £200 for the calendar year 2015. The fee was imposed pursuant to section 5A of the Caravan Sites and Control of Development Act 1960, which had been introduced by an amendment effected by the Mobile Homes Act 2013 and which took effect in April 2014. On the December 2014 pitch fee review, a proportion of the site licence fee was included in the pitch fees payable by the occupants of the park.
In January 2016, the site licence fee was increased from the £200 fee for a “low risk” site to £300 for “medium risk”. The respondent applied to the first-tier tribunal (FTT) to determine the level of pitch fees payable by the occupants from December 2015.
The appellant argued that the reviewed pitch fee should not include the increase to the site licence fee. She relied on para 18(1)(ba) of the implied terms, by which the matters to which the FTT was required to have “particular regard” included any “direct effect” on the site owner’s maintenance and management costs of “an enactment which has come into force since the last review date”. She argued that the respondent could not pass on increases to the site licence fee imposed since the December 2014 review date because the enactment under which they were imposed, namely the 2013 Act, had come into force before that date.
The FTT determined that the pitch fee should continue to include a proportion of the £200 site licence fee previously payable but could not take into account the £100 increase; moreover, while the main part of the pitch fee should be altered in line with the change in the retail prices index (RPI), pursuant to the presumption in para 20(A1) of the implied terms, no RPI element should be applied to the site licence fee.
It held that: (i) on a purposive reading of the legislation, any site licence fee, and any increase in such licence, permitted and specifically allowed for by the 2013 Act amendments could be passed on as an addition to the pitch fee; (ii) however, that element of the pitch fee could not be further increased by reference to RPI; and (iii) further, it was not within the contemplation of the legislation that a site owner should be able to pass on an increase made by reference to “risk”, which related to the quality of management of the site.
The appellant appealed, contending that the FTT had sought unlawfully to separate the site licence fee element from the pitch fees and that RPI should have applied to all elements. The respondent cross-appealed, contending that the pitch fees should include the whole of the £300 site licence fee.
Held: The appeal was allowed; the cross-appeal was dismissed.
(1) Four key provisions of the Schedule 1 implied terms, as amended by the 2013 Act, were relevant to the FTT’s determination of the pitch fee: (i) para 16, under which the pitch fee could be changed only if the FTT considered it “reasonable” to do so; (ii) para 18(1), which specified a number of matters to which “particular regard” was to be had when determining the amount of the new pitch fee; (iii) paras 18(1A) and 19, setting out matters to which no regard should be had; and (iv) para 20(A1), providing that, “unless this would be unreasonable having regard to paragraph 18(1)”, there was a presumption that the pitch fee should increase or decrease by a percentage which was more than the that specified in the relevant RPI. The issue of reasonableness under para 16 was not at large but had to be determined in the context of the other statutory provisions.
(2) The starting point was the presumption of change in para 20(A1). When considering any change in the pitch fee, the FTT was not bound to apply RPI. If, having regard to a factor to which para 18(1) applied, it would be unreasonable to apply the presumption in para 20(A1), then the presumption did not arise. It was not, strictly speaking, a question of the presumption applying and being displaced, but more that the presumption did not arise in the first place, because to apply it would be unreasonable. The change in wording in the presumption from its predecessor in para 20(1) to the current para 20(1), made by the 2013 Act, was not intended to change the meaning or nature of the presumption in that regard: Re Sayer [2014] UKUT 283 (LC); [2014] PLSCS 202 and Britaniacrest Ltd v Bamborough [2016] UKUT 144 (LC); [2016] PLSCS 117 applied.
(3) Where there was no matter to which para 18(1) in terms applied, then the presumption arose and it was necessary to consider whether any “other factor” displaced it. By definition, that had to be a factor to which considerable weight attached. If it were a consideration of equal weight to RPI, then, applying the presumption, the scales would tip the balance in favour of RPI. How much weight should be attached to an “other factor” was a matter for the FTT in any particular case. What was required was that the decision-maker recognised that the “other factor” had to have sufficient weight to outweigh the presumption in the context of the statutory scheme as a whole.
There was no justification for limiting the nature or type of “other factor” to which regard could be had. If it was not a factor to which “particular regard” should be had under para 18(1), and was not expressly excluded from consideration under paras 18(1A) and 19, then the logical consequence was that regard might be had to it.
(4) Read together, the 2013 Act amendments to the implied terms, setting out what costs could and could not be taken into account on a pitch fee review, indicated that the newly introduced annual site licence fee was intended to be taken into account as having a direct effect on the costs of management payable by a site owner. The increase in a site licence fee was an “other factor” to which the FTT could have regard when determining the amount of the pitch fee. However, that did not mean that the presumption of change in line with RPI would necessarily be displaced in a given case. There was a good reason for the presumption, since RPI was straightforward to apply and provided an element of certainty for all parties, and the need to produce a just and reasonable result had to be viewed in light of the expectation that, in most cases, RPI would apply.
(5) In the instant case, the FTT had not fallen into the error of requiring the appellant to pay a proportion of the site licence fee as a separate charge from the pitch fee. It had properly treated that item as an element of the pitch fee. However, it had erred so far as it had based its decision on the recoverability of the site licence fee on the application of para 18(1)(ba). The increase in the site licence fee was not a matter which could be taken into account pursuant to para 18(1)(ba). Whether or not the increase was the effect of an enactment, the relevant enactment, namely the 2013 Act, had not come into force since the last review date: it had come into force in April 2014 and the last pitch fee review date was December 2014.
Moreover, although the increase was caused by the 2013 Act, in the sense that that legislation introduced the right to charge a fee and a requirement that the fee be charged in accordance with a policy (sections 5A and 10A of the 1960 Act as amended), the proximate cause of the increase was the application of the policy, which was too indirect to fall within the words “any direct effect” on costs “of an enactment”. Otherwise, any cost which could eventually be traced back to legislation would fall within para 18(1)(ba), which would run contrary to the clear indication of a temporal restriction on what could be taken into account, namely that the cost had arisen pursuant to legislation which had come into force since the last review date.
(6) Accordingly, the presumption under para 20(A1) applied in the instant case. While the FTT was entitled to take the site licence fee increase into account as an “other factor” displacing the presumption, it could only lawfully do so if it recognised that para 18(1)(ba) applied only to the initial introduction of the site licence fee. It had erred in that respect.
Nonetheless, the FTT’s decision to disallow the increase in the site licence fee should be upheld because, even if it had properly considered the increase in the site licence fee as an “other factor”, it would inevitably have concluded that the presumption was not displaced on the facts of the case. It was entitled to conclude that it should not allow the increase in site licence fee from £200 to £300 to be included in the pitch fees where that increase was caused by extra risk due to an apparent lack of management.
(7) The FTT’s decision should, however, be reversed so far as it had decided that RPI should not apply in relation to the £200 site licence fee. In the absence of any express agreement for a separate charge, the pitch fee had to reflect all the site owner’s administration costs, which now included the site licence fee. Not all of the site owner’s costs would increase or decrease every year, nor would they necessarily increase or decrease in line with RPI. The fact that a cost had not changed was unlikely of itself to displace the presumption. Accordingly, the site licence fee element of the pitch fee should be increased with effect from the December 2015 review date in accordance with the presumption in para 20(A1).
David Sunderland, a director of the appellant, appeared for the appellant; Alan Savory, of the Independent Park Homes Advisory Service, appeared for the respondents.
Sally Dobson, barrister
