Mobile Homes – Pitch fee – Mobile Homes Act 1983 – Respondents occupying mobile home in appellant’s park – Pitch agreement providing for payment of administration charge – Appellant seeking to recover administration costs of supplying gas and electricity in addition to unit rate for amount consumed by occupiers on their individual pitches – Whether permissible to recover such sum from respondents by increase in pitch fee rather than through separate administration charge – Appeal dismissed
The appellant owned a mobile home park in Morecambe, Lancashire, which it had acquired in 2009 and which was a protected site governed by the Mobile Homes Act 1983. The respondents owned and occupied a mobile home which was stationed in the park pursuant to a written pitch agreement dating from 2012. The agreement provided for the payment of a monthly pitch fee, further entitled the appellant to recoup its outgoings on various utilities, including gas and electricity, and also provided for “additional charges” in respect of gas, electricity, water/sewage, administration, any other services provided and meters.
Before 2009, occupiers were charged a unit rate for the gas and electricity that they consumed on their individual pitches. However, on acquiring the park the appellant sought to add a quarterly charge of £15 per utility, plus VAT, to cover its administration costs including reading meters, preparing bills, delivering bills, and chasing arrears. Disallowing that charge, the Upper Tribunal held that the addition of a separate administration charge to the cost of fuel supplied to pitches was contrary to the terms of the pitch agreements that the appellant had inherited from its predecessor in the absence of a specific term permitting a charge for administration: see Re Britaniacrest Ltd [2013] UKUT 0521 (LC). The decision was not concerned with the form of pitch agreement held by the respondents, which did provide for the appellant to recoup an additional charge for administration.
Thereafter, the appellant sought instead to increase the monthly pitch fee for all occupiers so as to cover administration costs, regardless of whether the pitch agreements expressly provided for the payment of an administration charge. The respondents were notified that their pitch fee would increase from £154.70 to £169.65 with effect from March 2014, representing the increase in the retail prices index (RPI) over the 12 months since the previous increase plus a charge of £10 per month to cover the administration costs of supplying gas and electricity.
The respondents applied to the first-tier tribunal (FTT), under section 4 of the 1983 Act, for a determination of the pitch fee for which they were liable from March 2014. The FTT held that, in accordance with the usual presumption, the pitch fee could not be increased by an amount greater than the increase in the retail prices index over the previous 12 months. The appellant appealed.
Held: The appeal was dismissed.
The standard terms incorporated into pitch agreements under Chapter 2 of Part 1 of Schedule 1 to the 1983 Act set out the provisions for reviews of the pitch fee and made it clear that that fee did not include any charge for gas, electricity or other services unless the agreement expressly said so.
Three basic principles applied to pitch fee reviews under the standard terms. First, the owner of a protected site could not unilaterally increase the pitch fee but could do so only by agreement with the occupier, or, if agreement was not reached, by asking the appropriate judicial body, namely the FTT, to determine the new fee: see para 16 of the standard terms. Second, the pitch fee was to be reviewed annually at the review date: see para 17(1). Third, there was a statutory presumption that the variation of pitch fees would be limited by reference to the variation in RPI unless the agreement expressly said otherwise: see para 20(A1).
Those three principles gave the FTT a very strong steer that a change in RPI in the past 12 months would make it reasonable for the pitch fee to be changed by that amount, but they gave only limited guidance on what other factors it should consider, in addition to the specific matters required to be taken into account or ignored by virtue of paras 18 and 19. An increase or decrease by reference to RPI was only a presumption; it was neither an entitlement nor a maximum, and in some cases it would only be a starting point of the determination. The FTT had a wide discretion to vary the pitch fee to a reasonable level taking into account all of the relevant circumstances. The increase in RPI in the previous 12 months was important but was not the only factor that could be taken into account; other factors might rebut the presumption and call for a pitch fee that was greater than the RPI increase: Re Sayer’s appeal [2014] UKUT 283 (LC); [2014] PLSCS 202 applied.
However, the appellant’s desire to introduce a uniform approach to charging for the administrative costs associated with the supply of gas and electricity, regardless of which form of pitch agreement the occupiers had signed, was not a factor relevant to the determination of the respondents’ pitch fee. The agreement under which the respondents occupied their pitch included an express provision for the payment of an unspecified charge for administration and for meters. Occupiers under that form of agreement were entitled to expect that any charge for the administration of the supply of gas and electricity would be separate from the pitch fee and would be adjusted only when a change in the costs associated with such administration made an adjustment proper. The appellant had instead sought unilaterally to merge to separate administration charge payment under the respondents’ pitch agreement into the monthly pitch fee by a one-off increase which would go up annually by reference to RPI. Where the respondents had entered into the pitch agreement with a separate charge for administration, the appellant was not entitled unilaterally to insist on a different approach. It followed that there was nothing to displace the presumption in para 20 that the pitch fee should be increased by no more than the increase in RPI since the previous review.
Richard Mullan (instructed by direct access) appeared for the appellant; the first respondent appeared in person for the respondents.
Sally Dobson, barrister
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